Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2015)

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

  1. Slide 1: Information & Telecommunication Systems Business Strategy

    Information & Telecommunication Systems Business Strategy Hitachi IR Day 2015 June 11, 2015 Yutaka Saito Executive Vice President and Executive Officer President & CEO Information & Telecommunication Systems Group and Information & Telecommunication Systems Company Hitachi, Ltd. © Hitachi, Ltd. 2015

  2. Slide 2: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  3. Slide 3: 1-1. Market Environment and Target Position

    1-1. Market Environment and Target Position Environmental changes Target Position  Slowing growth in IT market*, intensification of global competition, recovery of IT services demand in Japan Expand revenue and enhance profitability  Shift to services, expansion of collaboration with and aiming to

  4. Slide 4: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  5. Slide 5: 2-1. Progress of 2015 Mid-term Management Plan

    2-1. Progress of 2015 Mid-term Management Plan FY2014 FY2015 (Results) (Forecast) Year over FY2013 year (US-GAAP) (US-GAAP) (US-GAAP) (IFRS)*1 (US-GAAP) (IFRS) +67.8 1,934.9 2,032.1 2,034.0 2,100.0 2,100.0 Revenues billion yen billion yen billion yen billion yen billion yen billion yen [103%] 96.3 9

  6. Slide 6: 2-2. Differences from Previous Forecast

    2-2. Differences from Previous Forecast Revised FY2015 plan because of delays in transforming to a profitable cost structure although having planned to achieve increase in operating income/EBIT by revenue growth and reform of the business portfolio [US-GAAP] FY2015 Previous forecast* Differences (Fo

  7. Slide 7: 2-3. FY2013-2014 Summary

    2-3. FY2013-2014 Summary  Service revenue is steadily increasing - Continued to win large SI projects and improved profitability of SI business - Expanded development of services business globally, including Southeast Asia Achievements  Strengthened Social Innovation Business - Implemented priorit

  8. Slide 8: 2-4. Factors for Changes in Performances (FY2013-2015)

    2-4. Factors for Changes in Performances (FY2013-2015) Revenues Billion yen SI/service revenues up SI/service revenues up +107.2 Exchange gain +37.9 2,100.0 +30.0 Exchange gain 2,032.1 +60.0 Platform business deteriorated 1,934.9 in Japan (70.0) FY2013 (Result) FY2014 (Result) FY2015 (Forecast) Oper

  9. Slide 9: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  10. Slide 10: 3-1. Business Policy and Vision

    3-1. Business Policy and Vision Continue growth, establish a business model with earnings power, and generate steady earnings by completing business portfolio transformation Establishing position as a major global player and further growth Growth domain Business expansion in growth fields Foundation

  11. Slide 11: 3-2. Expansion of the Social Innovation Business (1)

    3-2. Expansion of the Social Innovation Business (1) Expand services business with focus on Big Data utilization and IoT Knowledge accumulation and utilization by organizations across the Hitachi Group Solutions through collaborative  Strengthen business structure of Social Innovation creation with

  12. Slide 12: 3-2. Expansion of the Social Innovation Business (2)

    3-2. Expansion of the Social Innovation Business (2) Secure investment resources maximizing operating cash flows, and continue priority investments in core fields Customers Financial Public Manufacturing Social ・・・ Core investments up to FY2014 Region Region Region Region ・・・ Strengthen upstream con

  13. Slide 13: 3-2. Expansion of the Social Innovation Business (3)

    3-2. Expansion of the Social Innovation Business (3) Expand the Social Innovation Business centered on new management structure in North America Model for promoting Established Social Innovation Unit (North America) (April 2015) Social Innovation Business  Consolidate related organizations of Hitac

  14. Slide 14: 3-3. Expansion of System Solutions Business (1)

    3-3. Expansion of System Solutions Business (1) Complete large SI projects and acquire new projects by strengthening front-line Establish operations structure that unites front-line and MONOZUKURI, and flexible utilization of human resources  Strengthen industry-specific capabilities and share expe

  15. Slide 15: 3-3. Expansion of System Solutions Business (2)

    3-3. Expansion of System Solutions Business (2) Expand highly profitable services business  Expand service domain by a market-driven approach  Expand service development globally - Strengthen the foundation for providing services in Southeast Asia Create services to realize new value, expand servi

  16. Slide 16: 3-4. Acceleration of Platform Business Portfolio Reform (1)

    3-4. Acceleration of Platform Business Portfolio Reform (1) Strengthen services platform FY2015 Services  Expand IoT-related business/ Pentaho FY2014 Social Innovation Business  Expand global solutions oXya Services Shorten  Development of Big Data-related PoC*1 time-to-market  Solutions for pub

  17. Slide 17: 3-4. Acceleration of Platform Business Portfolio Reform (2)

    3-4. Acceleration of Platform Business Portfolio Reform (2) FY2015 expenses: Execute structural reforms approx. 10 billion yen  Add high-value through software and focus development on distinctive function Strengthening measures  Build services platform for Hitachi Group's Social Innovation Busine

  18. Slide 18: 3-5. Global Business Plan

    3-5. Global Business Plan Establish autonomous decentralized global management structure by developing North American model to other regions EMEA/ CIS China Americas Promote Social Innovation Japan Business Globally Asia Major Social Innovation Businesses (including PoC) Others Asia Oil & Gas Financ

  19. Slide 19: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  20. Slide 20: 4-1. Hitachi Smart Transformation Project

    4-1. Hitachi Smart Transformation Project Cost reduction effect: FY2015 (Forecast) 22.5 billion yen / FY2011-2015 total 65.0 billion yen*1 Earnings structure Progress 5.5 5.7 6.7 Operating income Cash generation  Enhancing business efficiency by implementing SCM and cash flow reform projects 29.3 2

  21. Slide 21: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  22. Slide 22: 5-1. Performance Trends

    5-1. Performance Trends Amount of orders received 1,981.8 2,119.9 2,172.0 (billion yen) Service revenue ratio 62% 64% Over 65% 64% Over 65% Operating Overseas 30% 33% 36% 33% 36% income/ revenue ratio EBIT Revenues (billion yen) (billion yen) 2,032.1 2,100.0 2,034.0 2,100.0 2,000 1,934.9 200 7.5% 6.

  23. Slide 23: 5-2. Performance Trends by Subsegment

    5-2. Performance Trends by Subsegment*1 [US-GAAP] Revenues (billion yen) Operating income (billion yen) Former Former subsegment Current subsegment subsegment Current subsegment 2,100.0*2 2,032.1 *2 2,032.1 *2 1,934.9*2 140.0*2 1,199.7 1,238.7 1,278.6 116.2*2 1,127.3 116.2*2 106.5 *2 83.3 68.3 47.4

  24. Slide 24: Contents

    Information & Telecommunication Systems Business Strategy Contents 1. Market Environment and Target Position 2. Progress of 2015 Mid-term Management Plan 3. Business Policy and Growth Strategy 4. Hitachi Smart Transformation Project 5. Business Performance Trends 6. Conclusion © Hitachi, Ltd. 2015.

  25. Slide 25: 6-1. Conclusion: FY2015 Plan

    6-1. Conclusion FY2015 Plan US-GAAP IFRS Revenues 2,100.0 billion yen 2,100.0 billion yen Overseas revenue ratio 36% 36% Operating income* 140.0 billion yen 158.0 billion yen Operating income ratio* 6.7% 7.5% EBIT ratio 6.3% 6.9% Benefit from Hitachi Smart  Gross margin: 0.8 points decrease (from F

  26. Slide 26: Notes

    Notes  Company names The official names of the companies referred to in this material are the following. Celerant: Celerant Consulting Investments Limited IMG: Information Management Group Limited Sierra: Sierra Atlantic, Inc. Sunway: Sunway Technology Sdn Bhd (Established a joint venture Hitachi S

  27. Slide 27: 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

  28. Slide 28: © Hitachi, Ltd. 2015. All rights reserved.

    © Hitachi, Ltd. 2015. All rights reserved.

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