Hitachi, Ltd. · TSE:6501
Hitachi — Investor Day (December 2022)
35 slides from Hitachi's investor day presentation, Dec 5, 2022
Slide 1: Research & Development Strategy
R&D and IP Strategy Briefing Research & Development Strategy For global innovation leadership 5 December 2022 Norihiro Suzuki, PhD Vice President and Executive Officer, CTO, General Manager of the Research & Development Group, Hitachi, Ltd. © Hitachi, Ltd. 2022. All rights reserved.
Slide 2: Today's takeaway message
Today’s takeaway message 1 Increased investment in R&D & expanding global R&D network 2 Accelerating R&D to expand Lumada business 3 Driving innovation by backcasting from 2050 © Hitachi, Ltd. 2022. All rights reserved. 1
Slide 3: R&D strategy Contents
R&D strategy Contents 1. Research & Development Group vision 2. Accelerating research & development to expand Lumada business 3. Driving innovation by backcasting from 2050 4. Summary © Hitachi, Ltd. 2022. All rights reserved. 2
Slide 4: R&D strategy Contents
R&D strategy Contents 1. Research & Development Group vision 2. Accelerating research & development to expand Lumada business 3. Driving innovation by backcasting from 2050 4. Summary © Hitachi, Ltd. 2022. All rights reserved. 3
Slide 5: The Hitachi Group's vision
1-1. The Hitachi Group’s vision Support people’s quality of life with data and technology that fosters a sustainable society Growth Planetary boundaries Green Wellbeing Protect the earth while A society where maintaining social Digital every individual is infrastructure Innovation comfortable and ac
Slide 6: Apply OT×IT×Product strength to solve customer challenges
1-2. Apply OT×IT×Product strength to solve customer challenges Planetary boundaries Wellbeing Customers (Power, Transport) (Financial, Public services) (Industry, Urban) (Vehicles) Energy, Financial/Public services Manufacturing/Logistics Railway/Transport services services Grid Battery IoT Sustaina
Slide 7: Contribute to Hitachi Group's transformation
1-3. Contribute to Hitachi Group’s transformation 2013-2015 2016-2018 2019-2021 2022-2024 MMP 2015 MMP 2018 MMP 2021 MMP 2024 Shift to Implement growth Global deployment of Accelerate growth with Social Innovation Business through Social Innovation Business Green, Digital & Innovation Hitachi Establ
Slide 8: Promotion structure for innovation
1-4. Promotion structure for innovation Transform the promotion structure for global business growth through DX & GX Growth Planetary boundaries Green Digital Wellbeing MMP 2024 key directives for Innovation the innovation strategy Focus on digital to drive innovation Customers for global business g
Slide 9: Hitachi Group R&D investment and R&D efficiency trend
1-5. Hitachi Group R&D investment and R&D efficiency trend Reinforce R&D investment to drive innovation through Digital & Green R&D investment R&D efficiency Ratio of R&D expenditure to profit （Profit/Past 3-year avg. R&D expenditure） R&D expenditure (Billion JPY) R&D expenditure/Revenue (%) 400 4.0
Slide 10: Hitachi Group R&D investment portfolio
1-6. Hitachi Group R&D investment portfolio Forecast to support current business and backcast from 2050 to drive innovation Hitachi Group R&D investment breakdown Innovation target Publicly-listed Business unit-led Business roadmap affiliated companies Corporate, miscellaneous* 5.8% 8.4% Sponsored &
Slide 11: Innovate for global business growth through DX/GX
1-7. Innovate for global business growth through DX/GX Drive innovation through synergy fully leveraging Hitachi Group technology platforms, talented teams, and customer channels GlobalLogic Hitachi Energy Europe R&D China R&D Hitachi China Singh CTO Salge CTO Sugimura GM Chen GM Harada CTO Europe 6
Slide 12: Video message from GlobalLogic CTO Sunil Singh
1-8. Video message from GlobalLogic CTO Sunil Singh © Hitachi, Ltd. 2022. All rights reserved. 11
Slide 13: Major external recognitions
1-9. Major external recognitions Highly sensitive MEMS vibration sensors High-voltage, high-power inverters Video analysis solution for public place to detect water leakage for EVs and PHVs (X-ray baggage inspection, human flow visualization) Safety & Safety & Security Environment Resilience Securit
Slide 14: Contribution to Lumada business growth
1-10. Contribution to Lumada business growth Increase Lumada revenue by CX/DX/GX co-creation for customers’ next growth FY2021 FY2022* FY2024 * Lumada business revenue (Trillion JPY) 0.45 1.12 1.41 R&D Group/Hitachi Group 1.39 1.90 2.70 * Forecast or Target value CX × Lumada DX × Lumada GX × Lumada
Slide 15: R&D strategy Contents
R&D strategy Contents 1. Research & Development Group vision 2. Accelerating research & development to expand Lumada business 3. Driving innovation by backcasting from 2050 4. Summary © Hitachi, Ltd. 2022. All rights reserved. 14
Slide 16: Change in business environment
2-1. Change in business environment The transformation of society and industry, and behavioral changes in people are being accelerated by digital in response to dramatic changes in the environment Sustainable society Industrial structure change Human behavioral change Carbon neutrality being Diversi
Slide 17: Customer's growth through the Lumada growth cycle
2-2. Customer’s growth through the Lumada growth cycle Promote innovative co-creation and digital services for the customers’ next challenge Customer’s Strengthen global front line and next Managed services Digital engineering Understand marketing operations. Realize growth challenge MAINTAIN custom
Slide 18: Lumada growth cycle: Financial/Public Services area
2-3. Lumada growth cycle: Financial/Public Services area Collaboration between financial services using knowledge from various industries is accelerating to realize financial inclusion Operational excellence Creating new demand Customer: Financial organizations Customer: Financial organizations, man
Slide 19: Sustainable finance platform
2-4. Sustainable finance platform Share data on green assets with a range of stakeholders to accelerate investments in the environment Insufficient Issues in project Collect raw data on facility operations and investment funding planning, reporting automatically create an impact report for green ene
Slide 20: Lumada growth cycle: Energy, Railway/Transport area
2-5. Lumada growth cycle: Energy, Railway/Transport area Progress optimized control of distributed multi energy/transport systems to contribute to decarbonization Promote demand-side Operational excellence, APM transformation transition to carbon neutrality Customers: Power utilities, factories, rai
Slide 21: Smart/Green mobility (Green MaaS)
2-6. Smart/Green mobility (Green MaaS) Digitally connect city transport networks improving wellbeing and contributing to carbon neutrality Green mobility solutions that Green mobility solution enable both smooth in-city mobility and lower environmental impact Digital ticketing, Digital twin Determin
Slide 22: Industrial metaverse
2-7. Industrial metaverse Enable a new workstyle through training and work-support by building a metaverse operation & maintenance site Realize operational excellence Accumulate OT knowledge from the field in Education & skill transfer Work procedures & Safety precautions Consensus-building a metave
Slide 23: Lumada growth cycle: Manufacturing & Logistics
2-8. Lumada growth cycle: Manufacturing & Logistics Apply Monozukuri knowhow towards process automation of manufacturing, operation, and reuse for a circular economy Manufacturing process innovation Addressing the circular economy Customer: Manufacturers Customer: Manufacturers, logistics providers
Slide 24: Co-creation with Suntory 'Manufacturing of the Future'
2-9. Co-creation with Suntory “Manufacturing of the Future” Build IoT infrastructure to realize advanced traceability, DX of factory management & workstyle Building a next-generation factory that continues “IoT infrastructure" enabling integration & display of diverse data to evolve based on finding
Slide 25: Upcycling circular economy
2-10. Upcycling circular economy Lead the realization of a circular economy society by demonstrating with products and through open innovation Solutions to quantify and control environmental Mining Material Proc. リユース Parts Assy. Test Proc. Assy. Upcycling of recycled リペアmaterials impact, and expand
Slide 26: Promotion of Global co-creation for customers' next growth
2-11. Promotion of Global co-creation for customers’ next growth Promote jointly with Hitachi Digital, Global Environment Division and Global Marketing & Sales Implement an inter-industry Showcase Kyōsō-no-Mori as an Offer value distribution service coordinated IoT information operational excellence
Slide 27: R&D strategy Contents
R&D strategy Contents 1. Research & Development Group vision 2. Accelerating research & development to expand Lumada business 3. Driving innovation by backcasting from 2050 4. Summary © Hitachi, Ltd. 2022. All rights reserved. 26
Slide 28: Backcasting from 2050
3-1. Backcasting from 2050 Explore future societal and customer issues through discussion with stakeholders High impact Society in 2050 Societal & business Technology / Solution trends (Innovation) International conferences Achieve carbon neutrality ● Upcycling circular economy ● ● Quantum computers
Slide 29: Towards the realization of environmentally neutral society
3-2. Towards the realization of environmentally neutral society Form ecosystems & solve global issues to resolve decarbonization & resource recycling challenges Climate change Novel Biosphere entities integrity Rate of extinction Stratospheric Disappearance of ecosystems ozone depletion Hitachi-ICL
Slide 30: Towards a society with an active 100-year lifespan
3-3. Towards a society with an active 100-year lifespan Realize low-burden on patient treatment methods with biomedical technologies with a goal to overcome intractable diseases such as cancer Regenerative medicine Applied in clinical trials for Parkinson’s Disease treatment *2 [2021] Automated cell
Slide 31: Towards the co-evolution of digital, people and society
3-4. Towards the co-evolution of digital, people and society Develop quantum computers & quantum applications to solve large-scale and increasingly complex societal issues, and create new industries CMOS annealing for early societal implementation (2015) P&C insurance portfolio optimization demonstr
Slide 32: R&D strategy Contents
R&D strategy Contents 1. Research & Development Group vision 2. Accelerating research & development to expand Lumada business 3. Driving innovation by backcasting from 2050 4. Summary © Hitachi, Ltd. 2022. All rights reserved. 31
Slide 33: Society 5.0
Planetary boundaries Wellbeing Society 5.0 Stakeholders Academia • University of Tokyo, • Investors Kyoto University, • Environmental NGOs Hokkaido University • Customers • AIST • Communities • Stanford University • Citizens, Consumers • Imperial College London • Employees • University of Cambridge
Slide 34: Slide 34
Slide 35: 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