Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2016)

32 slides from Hitachi's investor day presentation, Jun 1, 2016

  1. Slide 1: Building Systems Business Unit Business Strategy

    Building Systems Business Unit Business Strategy Hitachi IR Day 2016 June 1, 2016 Hiroshi Sato Senior Vice President and Executive Officer, CEO of Building Systems Business Unit Hitachi, Ltd. © Hitachi, Ltd. 2016. All rights reserved.

  2. Slide 2: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  3. Slide 3: 1-1. Business Profile

    1-1. Business Profile 1. Business Composition Elevator & Escalator Business (1) Sales, manufacturing and installation 5% 9％ (2) After-sales maintenance (3) Renewal (modernization) 17% FY2012 FY2015 Building Solutions & Services Business Consolidated Consolidated Revenues Revenues (1) Comprehensive b

  4. Slide 4: 1-2. Business Performance Trends of Building Systems Business

    1-2. Business Performance Trends of Building Systems Business FY2007-FY2009 FY2010-FY2012 FY2013-FY2015 FY2016-FY2018 Total Aggregate Operating Income 83.2 billion yen 96.7 billion yen 174.3 billion yen 189.8 billion yen 544.0 billion yen Revenues(Index) 200 〈186〉 150 100 176 176 126 50 100 0 FY2009

  5. Slide 5: 1-3. Business Unit Positioning

    1-3. Business Unit Positioning Total Solutions of Building Systems BU Industry & Distribution BU Research & Development Group Group Companies - Robotic technologies - Transformers and Digital Signage - Security products - Crowd flow analysis (Hitachi Industrial Equipment Systems) - Air conditioning

  6. Slide 6: 1-4. Review of 2015 Mid-term Management Plan

    1-4. Review of 2015 Mid-term Management Plan FY2015 Results Previous Deviation (Reference) 2015 Mid-term Management (a) Forecast *1(b) (c)=(a)-(b) Plan Initial Target *2 Revenues 650.9 billion yen 653.0 billion yen (2.1) billion yen 560.0 billion yen Adjusted Operating 10.3% 10.1% +0.2% Over 10% Inc

  7. Slide 7: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  8. Slide 8: 2-1. Global Elevator & Escalator New Installation Market Trends

    2-1. Global Elevator & Escalator Division: New Installation Market Trends China, Asia, Middle East ,and India Driving Global Demand ■ Comparison of demand for new installation ■Target to grow faster than the market by region (thousands of units, based on Hitachi research) 929 Worldwide : CAGR (%) CA

  9. Slide 9: 2-2. Positioning (Elevators & Escalators) and Growth Target

    2-2. Positioning (Elevators & Escalators) and Growth Target Pursue expanded revenues and higher income ratio with the aim of becoming a global major player (Results): FY2012 – FY2015 (Target) : FY2016 – FY2018 Overseas １０％ Company B Revenue Growth Rate (Target) (Compound annual Hitachi Overseas grow

  10. Slide 10: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  11. Slide 11: 3-1. Management Strategy (Basic Policy)

    3-1. Management Strategy (Basic Policy) Expand Social Innovation Business by providing Comfortable Smart Mobility Service Develop and provide the world’s latest products & services that are “HUMAN FRIENDLY” Promote service business based on the concept of “Fiduciary Duty” © Hitachi, Ltd. 2016. All r

  12. Slide 12: 3-2. Business Operating Structure and Mission

    3-2. Business Operating Structure and Mission Elevator & Escalator New Installation Business Management Development & Design Develop cost competitive new products Sales Strategy Enhance Production Achieve optimal supply by building Expand global highly-efficient production systems frontlines-led bus

  13. Slide 13: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  14. Slide 14: 4-1. Business Strategy by Region

    4-1. Business Strategy by Region Region Policy (1) Expand presence in the world’s largest market for new installation (2) Establish solid business base - Promote cost structure reforms China - Strengthen installation and maintenance businesses by establishing the four-regional operation structure (3

  15. Slide 15: 4-2. Expand Global Footprint

    4-2. Expand Global Footprint Enhance the Development of Field Personnel to Coincide with Expanded Global Footprint Tianjin Japan Kuwait Shanghai Global Qatar UAE Delhi Chengdu Guangzhou Training Center Oman (Apr. 2014 ~) Saudi Arabia Kolkata Mumbai Hyderabad Hong Kong Myanmar Philippines Pune Thaila

  16. Slide 16: 4-3. China Strategy

    4-3. China Strategy Continual Business Expansion that Responds to Changes in the Market Environment [Re-growth of the New Installation Market] [New installation Market demand] (1) Launch price competitive products (Unit: Thousands of units)  Launch low-cost models targeting the volume 600 zone in t

  17. Slide 17: 4-4. China Strategy

    4-4. China Strategy Strengthen Finely-tuned Service Framework with Adoption of Four-region Structure [Expand Maintenance Business] Northern and (1) Improve contract ratio by executing regional Tianjin Northeastern maintenance strategy Markets  Establish model branches for each region  Accelerate e

  18. Slide 18: 4-5. Asia / Middle East / India Strategy

    4-5. Asia / Middle East / India Strategy Establish Presence in Asia / Middle East / India [Asia and Middle East] [India] (1) Expand global footprint (1) Product strategy  Change strategy from distributor sales  Develop mid-range segment by utilizing image as a (Vietnam, Saudi Arabia, UAE, etc.) lu

  19. Slide 19: 4-6. Japan Strategy

    4-6. Japan Strategy Further Bolster Presence in New Installation Market [Index of New Installation Market Demand (Standard Elevators)] (Index) (1) Expand orders of standard elevators 100 (2) Expand orders of high-speed elevators for 50 100 93 87 large-scale projects in the Tokyo Metropolitan area 0

  20. Slide 20: 4-7. Building Systems BU Research & Development Strategy

    4-7. Building Systems BU Research & Development Strategy Develop and Provide the World’s Latest HUMAN FRIENDLY Products & Services (1) Utilize cutting-edge technologies in coordination with the Research & Development Group (2) Consider new businesses through collaboration with Building Systems BU cu

  21. Slide 21: 4-8. The History of Increasingly Fast Hitachi Elevators

    4-8. The History of Increasingly Fast Hitachi Elevators Changes in Hitachi Technologies and the History of High-rise Buildings Year 1968 1974 1991 2008 2011 2016 Fastest in Japan Fastest in the world Fastest in the Middle Double Deck Fastest* in the World Speed (at the time) (at the time) 540m / min

  22. Slide 22: 4-9. Developing the World's Fastest Elevator Technologies

    4-9. Developing the World’s Fastest Elevator Technologies Achieving the World’s Fastest Elevators*1 and Re-purposing Cutting-edge Technologies for High-speed and Standard Elevators Control Panel applicable to electronic safety system Traction machine and high-tensile rope Electronic Safety Mechanism

  23. Slide 23: 4-10. Considering Robot-based Building Solutions & Services

    4-10. Considering Robot-based Building Solutions & Services Creating Services that Maximize Synergy with the Elevator & Escalator Business [Business Model for Building Solutions & [Extension of Services with Utilization of Robots] Services] Tenants and Users Elevators & Monitoring of Building Escala

  24. Slide 24: 4-11. Businesses Utilizing Crowd Flow Analysis

    4-11. Consideration of Businesses Utilizing New Technology (Crowd Flow Analysis) Detect People’s Movements from Surveillance Camera Footage to Analyze Crowd Flow and Apply findings to the Service Business Example of Applying Crowd Flow Analysis Usage Scenario 1: Ascertaining the degree of Usage Scen

  25. Slide 25: 4-12. Significant Orders

    4-12. Significant Orders Major Overseas Projects Major Projects in Japan 1. Shenzhen Center (China) 1. Nihonbashi 2-chome Area Redevelopment Project (1) Double-deck Elevators 18 units (1) Redevelopment of Nihonbashi 2-chome area neighboring Takashimaya, which is an important cultural property (2)Bui

  26. Slide 26: 4-13. Promotion of Hitachi Smart Transformation Project

    4-13. Promotion of Hitachi Smart Transformation Project Achieving Low-cost Structure  Strengthen global development and procurement structure 1 Common Improvement Rate  Promote expansion of cost planning activities Strategy  Promote measures to reduce indirect costs 0.5 SG&A Margin  Focus on hig

  27. Slide 27: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  28. Slide 28: 5-1. Business Performance Trends

    5-1. Business Performance Trends Order Received 626.2 630.0 670.0 (billion yen) Proportion of Revenues from 59% 57% 58% Overseas Revenues Adjusted Operating Income / (billion yen) EBIT (billion yen) 800 120 <690.0> 650.9 650.0 600.0 100 600 67.3 71.5 [10.3%] [11.0]) 80 57.3 400 70.5 [9.6%] 72.0 60 [

  29. Slide 29: Contents

    Building Systems Business Unit Business Strategy [Contents] 1. Business Overview 2. Market Environments 3. Business Policy 4. Business Strategy by Region 5. Business Performance Plan 6. Conclusion © Hitachi, Ltd. 2016. All rights reserved.

  30. Slide 30: 6. Conclusion

    6. Conclusion FY2018 Target  Revenues 650 billion yen (Vs. FY2015 100%)  Adjusted operating income ratio 11.0% (Vs. FY2015 +0.7%)  EBIT ratio 11.1% (Vs. FY2015 +0.3%) Although reduced revenues are expected in FY2016 due to a worsening of the Chinese market, losses will be recovered through more c

  31. Slide 31: 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

  32. Slide 32: © Hitachi, Ltd. 2016. All rights reserved.

    © Hitachi, Ltd. 2016. All rights reserved.

Hitachi — Investor Day (June 2016) on 6ix