Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (November 2013)

32 slides from Hitachi's investor day presentation, Nov 29, 2013

  1. Slide 1: Information & Telecommunication Systems Business Strategy

    Information & Telecommunication Systems Business Strategy November 29, 2013 Yutaka Saito Senior Vice President and Executive Officer President & CEO Information & Telecommunication Systems Company Information & Telecommunication Systems Group Hitachi, Ltd. © Hitachi, Ltd. 2013. All rights reserved.

  2. Slide 2: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  3. Slide 3: FY2013 1H Results and Full-Year Forecasts

    1-1. FY2013 1H Results and Full-Year Forecasts FY2013 1H Results  Revenues: Increased due to higher sales in services and ATMs, and foreign currency fluctuations impact, etc.  Operating income: Increased due mainly to the higher revenues and progress with cost-cutting programs, despite lower profi

  4. Slide 4: Management Policy

    1-2. Management Policy Become a global major player by 3Gs (Growth, Global and Group) 1. Hitachi’s Comprehensive Capabilities in the Social Innovation Business  Enhance Group collaboration for displaying “One Hitachi” strengths  Strengthen upstream approaches using frontline expertise  Utilize IT

  5. Slide 5: Management Targets (Overview)

    1-3. Management Targets (Overview) FY2013 FY2015 FY2012 Forecasts Targets 1,786.5 1,860.0 2,100.0 Revenues billion yen billion yen billion yen EBIT* (Operating income) 5.8% 5.9％ 9.8% margin (5.9%) (6.5％) (10.0%) Overseas revenue ratio 26% 31% 35% Services revenue ratio 60% 63% over 65% Expanding glo

  6. Slide 6: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  7. Slide 7: IT's role in the Social Innovation Business (1)

    2-1. IT’s role in the Social Innovation Business (1) Growing global IT market Major countries and regions for global development 120 Europe North Japan WW 106 China America Japan 100 CAGR* India WW 4% ASEAN Japan 1% Sub-Saharan Brazil Africa Australia CY2010 CY2015 Drive Social Innovation Business w

  8. Slide 8: IT's role in the Social Innovation Business (2)

    2-2. IT’s role in the Social Innovation Business (2) More advanced society driven by valuable data Business Advancing social Safe/Comfortable innovation infrastructure Living Utilize information / Total engineering Front areas Back areas People Feedback Intelligence ＯＴ*1 Management, Marketing Anal

  9. Slide 9: Initiatives in the Social Innovation Business (Healthcare)

    2-3. Initiatives in the Social Innovation Business (Healthcare) Support the creation of a society in which each person can live healthily and safe Social changes / customer needs Hitachi’s initiatives Use IT to get more out of healthcare Pre-medical data for prevention, treatment and care (prevent

  10. Slide 10: Initiatives in the Social Innovation Business (Agriculture)

    2-4. Initiatives in the Social Innovation Business (Agriculture) Improve the level of agriculture by effectively utilizing data about growing agricultural production Social changes / customer needs Hitachi’s initiatives Declining number of farm workers Get more out of data on growing food Declini

  11. Slide 11: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  12. Slide 12: Business Growth Strategies

    3-1. Business Growth Strategies Key fields to lead growth 1. Expand global businesses ● Overseas revenue ratio: 26% (FY2012)  35% (FY2015) 2. Strengthen services businesses ● Service revenue ratio: 60% (FY2012)  over 65% (FY2015) 3. Strengthen priority fields ● Smart information ● Big Data ● Highl

  13. Slide 13: Global Business Expansion (1)

    3-2. Global Business Expansion (1) Deliver customer value as One Hitachi Increase revenues to 2,100 billion Finance Manufacturing Healthcare Telematics Logistics Transport Energy City development Agriculture Mining yen in FY2015 Business target: Overseas revenue ratio 26% (FY2012) → 35% (FY2015) Bus

  14. Slide 14: Global Business Expansion (2)

    3-3. Global Business Expansion (2) Business enhancement initiative (1) Promote centered on Strengthen solutions proposal capabilities Hitachi Consulting 1. Develop financial channel solutions targeting growth markets - Concluded agreement to acquire Prizm Payment Services Expand (November 2013) busi

  15. Slide 15: Global Business Expansion (Financial Channel Solutions)

    3-4. Global Business Expansion (Financial Channel Solutions) Expand business through Indian company acquisition 1. Utilize ATM track record in China to lead the financial channel market No.1 share* 2. Quickly expand business through acquisition of Indian payment service company ASEAN, India and Chin

  16. Slide 16: Global Business Expansion (Strengthen Solution Proposal Capabilities)

    3-5. Global Business Expansion (Strengthen Solution Proposal Capabilities) Strengthen frontline-focused R&D and consulting Promote open innovation and strengthen Consulting to help solve customers’ issues Conduct the world’s most-advanced R&D by linking systems and products with IT and cloud service

  17. Slide 17: Global Business Expansion (Strengthen IT Services Platform)

    3-6. Global Business Expansion (Strengthen IT Services Platform) Lead the world in data management services 1. Provide advanced solutions that add value to data 2. Expand business scale into integrated platform solutions Cloud Service Market (IaaS) (B$) Integrated platform solutions 18 CAGR Storage

  18. Slide 18: Expand Global Businesses (Business Plan)

    3-7. Expand Global Businesses (Business Plan) 458.1 billion yen Overseas revenue 735.0 billion yen Asia, etc. Asia, etc. China China [8] [5] [5] Europe [5] Europe [6] [9] North Oversea America Oversea Revenue Revenue North [10] America Ratio Ratio Japan 35% Japan 26% [13] [74] [65] Overseas ratio: 3

  19. Slide 19: Business Growth Strategies

    3-8. Business Growth Strategies Key fields to lead growth 1. Expand global businesses ● Overseas revenue ratio: 26% (FY2012)  35% (FY2015) 2. Strengthen services businesses ● Service revenue ratio: 60% (FY2012)  over 65% (FY2015) 3. Strengthen priority fields ● Smart information ● Big Data ● Highl

  20. Slide 20: Strengthen Services Businesses

    3-9. Strengthen Services Businesses Increase service revenue ratio 1. Increase profitability in system integration services in Japan 2. Expand business domains in management support services, operation services and product services Service Revenue Composition Business target: Service revenue ratio s

  21. Slide 21: Strengthen Services Businesses (SI in Japan)

    3-10. Strengthen Services Businesses (SI in Japan) Expanding demand in Japan Finance Government Steadily acquisition Increasing opportunities to make Increasing opportunities proposals due to Abenomics-based of orders to replace existing public works spending, the Social large-scale systems Security

  22. Slide 22: Strengthen Services Businesses (Operations services)

    3-11. Strengthen Services Businesses (Operations services) Bolster outsourcing services Provide “Monozukuri (manufacturing) techniques”, “OT” and “IT” - strengths of Hitachi - on an outsourcing basis Operations services Expansion of Hitachi’s business domains Services encompassing entire information

  23. Slide 23: Strengthen Services Businesses (Analytics)

    3-12. Strengthen Services Businesses (Analytics) Create new customer value and business opportunities utilizing big data New value created from data Big data-related market  Integration of customer information systems and user information from other types of businesses (B$) CAGR 31％ Analysis of aut

  24. Slide 24: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  25. Slide 25: Strengthening the Financial Basis

    4-1. Strengthening the Financial Basis Cash flow management Shift to high-value-added service businesses, expand Increase cash flow business globally Increase profitability Increase business efficiency and cash efficiency by implementing SCM reform project (Execute E2E* 1 supply chain reform project

  26. Slide 26: Hitachi Smart Transformation Project Progress

    4-2. Hitachi Smart Transformation Project Progress Consistent cost reduction toward FY2015 targets Target earnings structure Hitachi Smart Transformation Project Progress 5.9 6.5 Operating  Strengthen consolidated 10 income management: 30.3 32.1 Integrate sales organizations 29 SG&A* SG&A expenses

  27. Slide 27: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  28. Slide 28: Performance Targets

    5-1. Performance Targets Amount of orders received (billion yen) 1,787.5 1,838.3 1,899.0 35% Overseas 31% ９.８％ 25% 26% revenue 24% ratio ＥＢＩＴ Revenue 5.9％ ratio EBIT (billion yen) ５.８％ ５.５％ ５.８％ (billion yen) 2,100.0 2,000.0 ３００.０ 1,860.0 1,652.0 1,764.2 1.786.5 205.0 ２００.０ 1,000.0 104.2 110.0 96.0

  29. Slide 29: FY2015 Business Targets

    5-2. FY2015 Business Targets FY2015 Targets Revenues: 2,100.0 billion yen (overseas revenue ratio: 35%) EBIT (Operating income) ratio: 9.8% (10%) Gross margin: 2.8 point improvement (from FY2012) SG&A expense ratio: 1.3 point improvement (from FY2012) © Hitachi, Ltd. 2013. All rights reserved. 29

  30. Slide 30: Contents

    Contents 情報・通信システム事業戦略 1. 2015 Mid-term Management Policy and Results/Forecasts Outline 2. Hitachi’s Comprehensive Capabilities in the Social Innovation Business 3. Transforming a Business Portfolio with Growth Potential 4. Developing the Global Business Structure 5. Business Targets 6. Conclusion ©

  31. Slide 31: Conclusion

    6. Conclusion Become a global major player by 3Gs (Growth, Global and Group) © Hitachi, Ltd. 2013. All rights reserved. 31

  32. Slide 32: HITACHI Inspire the Next

    HITACHI Inspire the Next

Hitachi — Investor Day (November 2013) on 6ix