Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2015)

33 slides from Hitachi's investor day presentation, Jun 11, 2015

  1. Slide 1: Power Systems and Energy Solutions Business Strategy

    Power Systems and Energy Solutions Business Strategy Hitachi IR Day 2015 June 11, 2015 Katsumi Nagasawa Vice President and Executive Officer President & CEO, Power Systems Company Power & Infrastructure Systems Group Hitachi, Ltd. Masaaki Nomoto President & CEO, Energy Solutions Company Hitachi, Ltd

  2. Slide 2: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  3. Slide 3: 1-1. Business Overview

    1-1. Business Overview Strengthen front engineering capabilities in response to market changes Power Systems Company Energy Solutions Company Established April 2015 Nuclear Power Business Transmission & Distribution Business 15% 26% FY2014 Nuclear Power Plants(ABWR) *2 Revenues *1 15% Supervisory co

  4. Slide 4: 1-2. Business Performance Trends

    1-2. Business Performance Trends Orders received 641.0 512.7 500.0 (billion yen) Service revenue ratio 25% 36% 44% 36% 44% 32% Revenues/ EBIT (Billion yen) (Billion yen) Overseas 36% 11% 11% 11% 11% 41% revenue ratio 1,000 158.4 800.0 800 724.9 21.9% 120.0 600 472.6 460.0 466.7 460.0 100 15.0% 400 2

  5. Slide 5: 1-3. Progress on 2015 Mid-term Management Plan

    1-3. Progress on 2015 Mid-term Management Plan Status of progress on Mid-term Management Plan and future outlook FY2015 FY2014 Year (Forecast) FY2013 Over (US GAAP) Year (US (US (US GAAP) (IFRS)* (IFRS) GAAP) GAAP) 724.9 472.6 466.7 460.0 460.0 Revenues Billion yen Billion yen Billion yen Billion ye

  6. Slide 6: 1-4. Differences From Previous Forecast

    1-4. Differences From Previous Forecast <US GAAP> FY2015 Previous Difference (Forecast) forecast* 460.0 520.0 ▲60.0 Revenues Billion yen Billion yen Billion yen EBIT ratio 5.0% 8.5% ▲3.5 points <Main reasons for differences> Revenues and EBIT are both expected to be lower than the previous forecasts

  7. Slide 7: 1-5. Status of Progress on Thermal Power Projects

    1-5. Status of Progress on Thermal Power Projects  Steady execution and completion of remaining work and Specific commissioning activities  Negotiations with customers on compensation for delays in the start of operations and other issues Regions Status of progress  Operations had been started by

  8. Slide 8: 1-6. Reasons for Declining Performance and Enhancement Measures

    Transmission & Distribution Business 1-6. Reasons for Declining Performance and Enhancement Measures Reasons for declining performance Transmission & Distribution Business Global SCM Intensified price competition China North America Markets worldwide Markets Continued product development Saudi Ara

  9. Slide 9: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  10. Slide 10: 2-1. Market Environment

    2-1. Market Environment Market trends  Positioned as an important power source  Many countries going ahead with plans Nuclear Power  Increased capital investment to restart Nuclear Power  Strong needs for safety and a solid track nuclear power plants record Overseas  New construction plans in m

  11. Slide 11: 2-2. Target Position

    2-2. Target Position Aim for growth and high earnings by providing solutions that integrate “OT” and “IT” in step with market changes EBIT Ratio(%) Key 16 Others Nuclear Hitachi Power FY2020 14 Transmission & Renewable 12 Distribution Energy 10 Company D 8 Company F Company B 6 4 Company C 2 Hitachi

  12. Slide 12: 2-3. Business Strategy for the Power Systems and Energy Solutions

    Strategy for the Power Systems and Energy Solutions 2-3. Business Energy solutions based on collaborative creation that are tailored to the new market Highly reliable systems and key components aimed at the power infrastructure market Energy Solutions Company 【Established April 2015】 Power Systems C

  13. Slide 13: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  14. Slide 14: 3-1. Market Changes in the Energy Field

    3-1. Market Changes in the Energy Field Diversification of customers and markets due to electricity system reforms Issues caused by rapid integration of different energy value chains FY 2015 FY 2016 FY 2020  Establishment of the Organization for  Full liberalization of the retail market  Legal un

  15. Slide 15: 3-2. Promote the Energy Solutions Business

    3-2. Promote the Energy Solutions Business Established the Energy Solutions Company  Stay on top of changes in business models and customer needs in the market  Enhance market-oriented front engineering functions Power generation Power transmission and distribution Consumers Renewable Energy Trans

  16. Slide 16: 3-3. Energy Solutions Business Policy

    3-3. Energy Solutions Business Policy Establish a global position by vertically starting up IT-driven businesses Energy solutions market Provide optimal solutions Vigorously push ahead with the energy by integrating “OT” and “IT” solutions business Components markets Strengthen core Counter intensif

  17. Slide 17: 3-4. Energy Solutions Business Promotion Structure

    3-4. Energy Solutions Business Promotion Structure Engage in collaborative creation with an increasingly diverse range of customers by bolstering front engineering Electric power Gas Industrial customers Telecommunications Companies newly such as Developers Financial services Transportations joined

  18. Slide 18: 3-5. Responding to the Growing Adoption of Renewable Energy

    3-5. Responding to the Growing Adoption of Renewable Energy Provide optimal solutions based on collaborative creation by integrating “OT” and “IT” Projection of Japanese market in 2030 Optimal solutions for increasing grid capacity Substation Onshore wind power Share of renewable Approx. double powe

  19. Slide 19: 3-6. Addressing Grid Stabilization

    3-6. Addressing Grid Stabilization Grid stabilization systems in response to growing adoption of renewable energy Cross-regional grid stabilization systems Energy storage systems Demonstration projects in the U.S. and Poland Demonstration projects in the U.S. Mass introduction of Renewable energy La

  20. Slide 20: 3-7. Responding to Electricity System Reforms

    3-7. Responding to Electricity System Reforms Develop a system for the Organization for Cross-regional Coordination of Transmission Operators, Japan that supports the inter-regional use of electricity Expand the solution business in response to the increase in PPSs (PPSs: 663 companies (as of May 21

  21. Slide 21: 3-8. New Energy Services Through Symbiotic Autonomous Decentralization

    New Energy Services Through Symbiotic Autonomous 3-8. Decentralization Achieve small to large-scale micro grids according to customer needs Provide services according to various environment and other needs through symbiotic autonomous decentralization Commercial and demonstration projects Symbiotic

  22. Slide 22: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  23. Slide 23: 4-1. Nuclear Power Business (Japan)

    4-1. Nuclear Power Business(Japan) Facilitate the resume operations of nuclear power plants and the restoration of the Fukushima Daiichi Nuclear Power Plant, while prioritizing safety Efforts to strengthen safety and respond to new regulatory requirements  Continued promotion of measures to improve

  24. Slide 24: 4-2. Nuclear Power Business (Overseas)

    4-2. Nuclear Power Business(Overseas) Extend global management and expand business UK: Horizon Nuclear Power project  Push ahead with Generic Design Assessment (GDA) and Front End Engineering and Design(FEED)  Scheduled to complete GDA STEP 3 in August 2015  Establish a local project promotion fr

  25. Slide 25: 4-3. Power Generation Solutions Business

    4-3. Power Generation Solutions Business Ensure solid revenues and earnings through power generation solutions and preventive maintenance Power generation Provide power generation systems and engineering as energy solutions solutions Support for replacements, expand orders for repairs of high-temper

  26. Slide 26: 4-4. Strengthen the Service Business

    4-4. Strengthen the Service Business Expand business and generate high earnings, by developing advanced service business and utilizing IT systems Strengthen development of advanced service business Strengthen IT and service networks  Increase applications of the predictive  Upgrade and enhance the

  27. Slide 27: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  28. Slide 28: 5-1. Hitachi Smart Transformation Project

    5-1. Hitachi Smart Transformation Project Cost reduction benefits:Outlook for FY2015: ¥9.5 billion FY2011-FY2015 cumulative: ¥53.0 billion*1 Progress status Improve CCC*1*2  Execute cash flow management by shortening lead Cash generation  Visualization of cash flows by adopting IT system  Optimiz

  29. Slide 29: 5-2. Business Performance Trends

    5-2. Business Performance Trends Orders received 641.0 512.7 500.0 (billion yen) Service revenue ratio 25% 36% 44% 36% 44% 32% Revenues/ EBIT (Billion yen) (Billion yen) Overseas 36% 11% 11% 11% 11% 41% revenue ratio 1,000 158.4 800.0 800 724.9 21.9% 120.0 600 472.6 460.0 466.7 460.0 100 15.0% 400 2

  30. Slide 30: Contents

    Power Systems and Energy Solutions Business Strategy Contents 1. Business Overview 2. Market Environment 3. Growth Strategy for the Energy Solutions Business 4. Strategy of Power Infrastructure Business for Generating Higher Earnings in the Next Growth Stage 5. Business Performance Trends 6. Conclus

  31. Slide 31: 6. Conclusion - FY2015 Targets

    6. Conclusion - FY2015 Targets - FY2015 Targets US GAAP IFRS Revenues(Billion yen) 460.0 460.0 Overseas revenue ratio 11.0% 11.1% EBIT ratio 5.0% 5.9% Improve the gross margin Benefits of Hitachi Smart 2.3 point deterioration (Vs. FY2013) Transformation Project SG&A expenses (US GAAP) 1.4 point im

  32. Slide 32: Cautionary Statement

    Cautionary Statement Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial

  33. Slide 33: © Hitachi, Ltd. 2015. All rights reserved.

    © Hitachi, Ltd. 2015. All rights reserved.

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