Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2015)

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

  1. Slide 1: Infrastructure Systems Business Strategy

    Infrastructure Systems Business Strategy Hitachi IR Day 2015 June 11, 2015 Hitachi, Ltd. Kunizo Sakai Senior Vice President and Executive Officer President & CEO Infrastructure Systems Company Power & Infrastructure Systems Group Masakazu Aoki Vice President and Executive Officer President & CEO, In

  2. Slide 2: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  3. Slide 3: 1-1. Positioning of Infrastructure Systems Business

    1-1. Positioning of Infrastructure Systems Business Drive the Social Innovation Business, centered on Social Infrastructure & Industrial Systems Hitachi’s Consolidated Revenues (FY2014, US GAAP) Provision of systems Financial Services and components for the information, Others その他 Information & 情報・通

  4. Slide 4: 1-2. Business Activities and Portfolio

    1-2. Business Activities and Portfolio Become the best solutions partner by providing answers to business challenges faced by global customers Water &  Strengthen market-oriented and front-line 15% Environment functions through reorganization of solutions Industrial Solutions FY2014 business produc

  5. Slide 5: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  6. Slide 6: 2-1. Progress of 2015 Mid-term Management Plan

    2-1. Progress of 2015 Mid-term Management Plan FY2014*1 FY2015 (Forecast) FY2013 (US GAAP) (US GAAP)*1 (US GAAP) [YoY] [vs. previous (IFRS)*2 (US GAAP) (IFRS) forecast] Revenues 758.0 790.9 -17.5 790.8 816.7 813.6 +25.8 billion yen billion yen billion yen billion yen billion yen billion yen billion

  7. Slide 7: 2-2. Differences Between the Previous Forecast

    2-2. Differences Between the Previous Forecast US GAAP FY2015 Previous forecast* Differences (Forecast) Revenues 816.7 billion yen 959.1 billion yen -142.4 billion yen Operating income 5.0% 6.9% -1.9% ratio EBIT ratio 4.5% 6.7% -2.2% Main Reasons for Differences ①Downward revision of revenues  Decr

  8. Slide 8: 2-3. FY2015 Initiatives

    2-3. FY2015 Initiatives Focus on profitability in FY2015 and continue structural transformation in anticipation of next growth Revenues*1 816.7 Operating income*1 billion yen 790.9 758.0 billion yen billion yen +16.3 billion yen 50 (billion yen) +8.0 billion yen +8.3 Optimize billion yen cost struct

  9. Slide 9: 2-4. Improving Profitability

    2-4. Improving Profitability Convert business portfolio, expand products’ revenues Operating income *  Provide value-added services to solve customer billion yen issues • Water supply and sewerage in Japan 60 (Turnkey proposals combining electrical facilities and machinery) • Support Japanese compa

  10. Slide 10: 2-5. Optimization of Cost Structure

    2-5. Optimization of Cost Structure Continuously promote cost structure reform Improvement points (vs. FY2012)  Add hub functions to important manufacturing, EPC*1 and 5 service bases to strengthen the global supply chain SG&A expenses Gross margin 2.5 0.7  Expand overseas procurement and centrali

  11. Slide 11: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  12. Slide 12: 3-1-1. Market Trends

    3-1-1. Market Trends The infrastructure market is estimated to recover from temporary slowdown in the medium to long-term future Industrial capital expenditure forecast Average annual Average annual (Trillion yen) investment amount investment growth rate 900 Energy and natural resources Core fields

  13. Slide 13: 3-1-2. Competitive Environment

    3-1-2. Competitive Environment Growth trajectory and consistent earnings from both solutions and products % Company A Operating income ratio Note 1: Hitachi represents figures of the 10 Company C Social Infrastructure & Industrial Systems Segment; other Company B companies represent figures from sim

  14. Slide 14: 3-1-3. Medium-to Long-term Strategies for Growth

    3-1-3. Medium-to Long-term Strategies for Growth Aim to become global major player in the social & industrial infrastructure market Develop business providing both total solutions and strong products capabilities to solve issues of growing customers in growth markets Infrastructure systems business

  15. Slide 15: 3-1-4. Competitive Strategies

    3-1-4. Competitive Strategies Business顧客協創とIT・制御・プロダクツの強みを活かした事業展開 development leveraging collaborative creation with customers, as well as strengths in IT, control and products Natural resources Life & security Core industries Social infrastructure Oil & Gas, mining, Pharmaceutical, food, Core manu

  16. Slide 16: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  17. Slide 17: 3-2-1. Creating New Businesses by Collaborative Creation with Customers

    3-2-1. Creating New Businesses by Collaborative Creation with Customers Solve customers’ issues by leveraging IT, control and manufacturing capabilities, and expertise ＩＴ、制御とモノづくり力、ノウハウを活かし、顧客の課題解決  Contribute to new-value creation and business model transformation through the Hitachi Group’s colle

  18. Slide 18: 3-2-2. Provide Total Solutions for Growth Field (1)

    3-2-2. Provide Total Solutions for Growth Field (1) Provide high-quality and high- reliability support for Pharmaceutical pharmaceutical manufacturing in the growing bio-pharmaceutical markets (Billion Expand bio-pharmaceuticals market  Accelerate development & mass Dollars) Source: Ministry of Eco

  19. Slide 19: 3-2-3. Provide Total Solutions for Growth Field (2)

    3-2-3. Provide Total Solutions for Growth Field (2) Mining Support increased efficiency of overall mining operations from Pit to Port  Propose total solutions that fuse IT with expertise in Mining CAPEX trends energy, railways, and industrial process control (trillion yen)  Develop wide-ranging pr

  20. Slide 20: 3-2-4. Multi-pronged development of core technologies & solutions into growth markets

    Multi-pronged development of core technologies & 3-2-4. solutions into growth markets Multi-pronged development of advanced (billion yen) Size of target overseas water business market Water Environment water treatment technology 5,000 Source: Hitachi’s estimate, based on “GLOBAL WATER MARKET 2014” O

  21. Slide 21: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  22. Slide 22: 3-3-1. Objectives of establishing Industrial Products Company

    3-3-1. Objectives of establishing Industrial Products Company Strengthening products business that supports the Social Innovation Business Aims  A strong business framework that can compete in the industrial field by products alone  A business framework that generates stable earnings and cash  Pr

  23. Slide 23: 3-3-2. Industrial Products Business Activities and Portfolio

    3-3-2. Industrial Products Business Activities and Portfolio Strong products that meet a wide range of industrial needs Natural resources Life & security Core industries Social infrastructure Oil & Gas, mining, Pharmaceutical, food, Core manufacturing Water and sewage, city gas farming, cities indus

  24. Slide 24: 3-3-3. Overall strategy for Industrial Products Business

    3-3-3. Overall strategy for Industrial Products Business Bolster global competitiveness by unified operation of products business  Develop an integrated business strategy covering small to large products Basic policy  Prioritize strategic investment and resource allocation Enhancement initiatives

  25. Slide 25: 3-3-4. Industrial Products Business Targets (by product field)

    3-3-4. Industrial Products Business Targets (by product field) Unify business development of high- and low-voltage products Obtain superior position Drive & automation - Sales, services, manufacturing - In global markets (Motors, inverters, etc) Power supply & Develop business centered on Expand bus

  26. Slide 26: Contents

    Infrastructure Systems Business Strategy Contents 1. Business Overview 2. FY2015 Initiatives 3. Medium-to Long-term Strategy for Growth 3-1. Business Environment and Strategy 3-2. Solutions Business 3-3. Industrial Products Business 4. Conclusion © Hitachi, Ltd. 2015. All rights reserved.

  27. Slide 27: 4-1. Business Performance Trends

    4-1. Business Performance Trends Amount of 746.8 769.8 890.0 orders received Revenues (billion yen) Operating (billion yen) Service income 29% 29% 29% business ratio 29% 29% (billion yen) 1,000 100 Overseas 24% 28% 29% revenue ratio 28% 29% ８１６.７ ８１３.６ ７９０.９ ７９０.８ ７５８.０ ５.３％ ５.０％ ５.１％ ４.９％ ４.６％ ４.５％

  28. Slide 28: 4-2. Conclusion

    4-2. Conclusion FY2015 Target US GAAP IFRS Revenues 816.7 billion yen 813.6 billion yen Overseas revenue ratio 29.0% 29.1% Operating income ratio* 5.0% 5.3% EBIT ratio 4.5% 4.9% Benefits from Hitachi Smart  Gross margin: 2.5 percentage point improvement (vs. FY2012) Transformation Project  SG&A ex

  29. Slide 29: 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

  30. Slide 30: © Hitachi, Ltd. 2015. All rights reserved.

    © Hitachi, Ltd. 2015. All rights reserved.

Hitachi — Investor Day (June 2015) on 6ix