Hitachi, Ltd. · TSE:6501
Hitachi — Investor Day (June 2011)
39 slides from Hitachi's investor day presentation, Jun 16, 2011
Slide 1: Power Systems Business Strategy
Power Systems Business Strategy Hitachi IR Day 2011 June 16, 2011 Tatsuro Ishizuka Vice President and Executive Officer President & CEO, Power Systems Company Hitachi, Ltd. © Hitachi, Ltd. 2011. All rights reserved.
Slide 2: Contents
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 3: 1-1 Business Overview
1-1 Business Overview Thermal Power Business Nuclear Power Business Coal-fired thermal Boiling water reactor nuclear power plants (ABWR, ESBWR) IGCC power plants Preventive maintenance, nuclear fuel cycle, etc. <Major equipment of nuclear power plants> Reactor pressure Reactor Main Control <Major eq
Slide 4: 1-2 FY2010 Results
1-2 FY2010 Results FY2009-FY2010 Results (Billion yen) FY2009(Actual) FY2010(Actual) YoY Revenues 882 1 882.1 813 2 813.2 92% Operating income 22.0 22.0 100% Revenues declined in thermal power systems due to delays with some projects. Lower sales were recorded for preventative maintenance Revenues s
Slide 5: Great East Japan Earthquake
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 6: Most operations have resumed, thanks to urgent restoration work
Great East Japan Earthquake—Damage and 2 Restoration Status in Power Systems Company 国分地区 Damage Report Hitachi district The 6+ earthquake on the Japanese seismic scale Ibaraki Prefecture damaged buildings and production facilities in the Hitachi district. Power, water and other lifelines were affec
Slide 7: Market Environment
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 8: 3-1 Market Trends in Japan
3-1 Market Trends in Japan Market changes caused by the Great East Japan Earthquake Uncertainty in nuclear power market (Shelving of new construction plans, earthquake- and tsunami-proofing of existing plants, etc.) Recovering eco e g demand de a d for o power po e infrastructure ast uctu e (Restora
Slide 9: 3-2 Overseas Market Trends
3-2 Overseas Market Trends World Electricity Generation by Type World electricity generation is expected (Tr kWh) to grow by 1.8 times (from 2005 to 2030) 30 183% Renewable energy Coal-fired g generation will continue to 127% play a significant role in power sector 20 100% Natural gas Oil (Replaceme
Slide 10: Business Policy and Growth Strategy
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 11: 4-1 From Recovery to Growth
4-1 From Recovery to Growth Accelerate global development Thermal power ■Expand business in growth markets business (China, India, ASEAN nations, etc.) Nuclear power ■Target countries proceeding with new nuclear business power plant construction ■Sell S wind power and solar power generation Renewabl
Slide 12: 4-2 Accelerate Global Development
4-2 Accelerate Global Development Globally develop the Power Systems Company 500 Overseas revenue Increase manufacturing and engineering subsidiaries ratio Overseas revenues Increase thermal p power orders and strengthen g sales (Billion yen) 250 structure in emerging economies, centered on China, I
Slide 13: 4-3 Measures to Boost Competitiveness
4-3 Measures to Boost Competitiveness Production and procurement Project management Strengthen global production framework Strengthen overseas project management Strengthen g manufacturing g bases in Japan p as (HR and organizational structure) Mother Factories Increase enrollees in development prog
Slide 14: Thermal Power Business
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 15: 5-1 Thermal Power Business Basic Policy
5-1 Thermal Power Business Basic Policy FY2015: ¥650 billion ■ Upgrade response to Revenues Great East Japan Earthquake FY2010: ¥460 billion ■ Actively yppromote g global business Upgrade response to Great East Japan Earthquake ■ Quickly Q i kl restart t tddamaged d th thermall power facilities f il
Slide 16: 5-2 Upgrading Response to Great East Japan Earthquake
5-2 Upgrading Response to Great East Japan Earthquake Quickly restart damaged thermal power facilities and idled thermal power plants ■ Established a Great East Japan Restarted plants Earthquake Restoration Division ■Recovery in Power Output (Plan) ■ Restored or quickly restarted plants 11 plants 5,
Slide 17: 5-3 Actively Develop in Global Markets (1)
5-3 Actively Develop in Global Markets (1) Integrated supply of BTG + AQCS ⇒ Optimize entire plants AQCS Boilers (B) Turbines (T) Generators (G) DeNOx Precipitators Desulfurizers CCS Systems Catalysts ○ ○ ○ ○ ○ ○ ○ ○ ■Steam turbines and power generators (TG) ■Boilers (B) Highly efficient and reliabl
Slide 18: 5-4 Actively Develop in Global Markets (2)
5-4 Actively Develop in Global Markets (2) Step up global development of highly efficient coal-fired thermal power business Europe, South Africa Asia Americas Babcock-Hitachi Hitachi Power Europe GmbH Hitachi Works K.K. Kure Branch Hitachi Power Systems America, Ltd. Maasvlakte Moorburgg Keephills-3
Slide 19: 5-5 Actively Develop in Global Markets (3)
5-5 Actively Develop in Global Markets (3) Expand by deepening localization in growth markets ■ Thermal power market trends (1) Shift in new construction to emerging markets, (2) Rising demand on coal-fired thermal power plants for especially in Asia upgrade and major repair Projected Thermal Genera
Slide 20: 5-6 Actively Develop in Global Markets (4)
5-6 Actively Develop in Global Markets (4) Expand global procurement and production network ■Expand global procurement bases ■Establish new Chinese DeNOx catalyst production subsidiary (June 2011) ■*Global procurement ratio target: 70% (FY2015) Respond p to rapid p market expansion p for DeNOx catal
Slide 21: 5-7 Actively Develop in Global Markets (5)
5-7 Actively Develop in Global Markets (5) Expand global services business ■ Utilize extensive overseas network to expand business field ■ Expand services business through investment in facilities, cooperation with local partners, andd M&As M&A ■ Make more high-value-added product and technology pro
Slide 22: 5-8 Expand AQCS Business
5-8 Expand AQCS Business Expand business, centered on DeNOx systems Step up development of CCS technologies and catalysts ■ Step up the pace of joint demonstration projects with ■ DeNOx system delivery track record European and American customers, quickly develop Unit: GW commercial systems China 20
Slide 23: 5-9 Expand Gas Turbine Business
5-9 Expand Gas Turbine Business H-25 H-80 ■Top-class performance in heavy-duty gas turbines ■Hitachi developed the H-80 80MW-class gas turbine, ■Expand market by handling different types of fuel the world's largest capacity two-shaft, heavy-duty type (Coke gas, etc.) gas turbine, in a short time. Fi
Slide 24: Nuclear Power Business
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 25: 6-1 Nuclear Power Business Basic Policy
6-1 Nuclear Power Business Basic Policy Raise R i ththe safety f t off nuclear l power generation ti as an effective ff ti source off energy for curbing CO2 emissions to meet continuing global demand. ■Lend support for countermeasures at the FY2020: ¥360 billion Fukushima Daiichi nuclear power stati
Slide 26: 6-2 Support Fukushima Countermeasures and Offer Services for Nuclear Power Sector in Japan
Support Fukushima Countermeasures and Offer 6-2 Services for the Nuclear Power Sector in Japan <Strengthen support system> Countermeasure support system -Provide a Hitachi Group response -More than 2,200 people are working on this project, including cooperating companies Fukushima Project j Supervis
Slide 27: 6-3 Step up development of overseas business
6-3 Step up development of overseas business Continue to promote nuclear power business under the “One Team” framework with GE ■ Target countries proceeding with plans Deepen and develop t construct to t t new nuclear l power plants l t collaborative relationship ■ Established Vietnam Nuclear Power
Slide 28: Power Distribution, Renewable Energy and Other Businesses
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 29: 7-1 Basic Policy
Power Distribution, Renewable Energy and Other Businesses 7-1 Basic Policy FY2015: ¥280 billion ■ Strengthen power distribution business Revenues ■ Expand and boost sales in renewable energy business FY2010: ¥170 billion ■ Expand p and boost sales of particle p beam therapy py system y Power distrib
Slide 30: 7-2 Power Distribution Business
7-2 Power Distribution Business Provide solutions from power generation to power transmission and smart grids ■ Established new division to harness the Hitachi Group’s g collective strengths ■ Promote system integration in power distribution systems worldwide ■ Strengthen and accelerate STATCOM and
Slide 31: 7-3 Renewable Energy Business
7-3 Renewable Energy Business Wind power systems ■ FY2015 target: No. 1 share in Japan ■ Advantage in windy and hilly regions (Efficiency, durability) ■ Expand sales of bottom-mounted offshore systems Solar power systems Kamisu Wind Power Plant Ohgishima Solar Wind Power Ibaraki, Ltd. Power Plant TE
Slide 32: 7-4 Actively Develop Particle Beam Cancer Therapy System
7-4 Actively Develop Particle Beam Cancer Therapy System Expand orders based on technologies amassed over many years and high operating track record University of Tsukuba: Spot scanning irradiation technology First delivery of a proton beam therapy system ■ Stable operations for nearly 10 years (Sin
Slide 33: Business Performance Trends and Targets
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 34: 8-1 Business Performance
8-1 Business Performance 50% Revenues (Billion yen) Overseas revenue ratio 45% Operating income ratio (%) 1,200 , 40% 39% 41% 1 100 0 1,100.0 8.0 7.9 1,000 32% 882.1 870.0 813.2 810.0 6.0 6 50 5.9 9 800 6.0% 600 566.7 4.0 3.9 400 3.5% 2.7% 2.0 1.9 200 2.5% 1.2% 0 0.0 Loss FY2009 FY2010 FY2011 FY2012
Slide 35: 8-2 FY2011 Outlook
8-2 FY2011 Outlook FY2010 Results and FY2011 Forecasts (Billion yen) FY2010 (Actual) FY2011 (Forecasts) YoY Revenues 813 2 813.2 810 0 810.0 100％ Operating income 22.0 10.0 45％ Revenues are expected to be on a par with FY2010 FY2010. Higher sales of thermal power systems overseas and in Japan (due t
Slide 36: Conclusion
Power Systems Business Strategy Contents 1. Business Overview 2. Great East Japan Earthquake 3. Market Environment 4. Business Policy and Growth Strategy 5. Thermal Power Business 6. Nuclear Power Business 7. Power Distribution, Renewable Energy and Other Businesses 8. Business Performance Trends an
Slide 37: Conclusion
9 Conclusion The World Market Leader Advancing the Future Global Society with Evolutionary Energy Technologies Accelerate A l t global l b l business b i development d l t Expand services business FY2015 targets Revenues: ¥1.1 trillion Overseas revenue ratio: 50% Operating income ratio: 6% © Hitachi
Slide 38: Cautionary Statement
Cautionary Statement C t i statements Certain t t t found f d in i this thi document d t may constitute tit t “forward-looking “f d l ki statements” t t t ” as defined d fi d ini the th U.S. U S Private P i t Securities S iti Litigation Liti ti R Reform f A Actt off 1995 1995. S Such h “f “forward-l
Slide 39: HITACHI Inspire the Next
HITACHI Inspire the Next