Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2021)

47 slides from Hitachi's investor day presentation, Jun 8, 2021

  1. Slide 1: Hitachi Investor Day 2021 Energy Sector

    Hitachi Investor Day 2021 Energy Sector June 8, 2021 Toshikazu Nishino Executive Vice President and Executive Officer Hitachi, Ltd. Claudio Facchin Senior Vice President and Executive Officer CEO of Power Grids Business Unit Hitachi, Ltd. © Hitachi, Ltd. 2021. All rights reserved.

  2. Slide 2: Key Messages Today

    Key Messages Today 1 Changes in the Energy Markets and Business Opportunities 2 New Growth Strategy for Energy Business 3 Strengths and Growth Potential of Hitachi's Power Grids Business © Hitachi, Ltd. 2021. All rights reserved. 1

  3. Slide 3: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  4. Slide 4: Position of Energy Sector

    3 Hitachi Astemo © Hitachi, Ltd. 2021. All rights reserved. Automotive Systems Business Hitachi High-Tech Hitachi Global Life Solutions Smart Life Railway Systems BU Building Systems BU Mobility Water & Environment BU Industry & Distribution BU Services & Platforms BU Industry Product Business Hitac

  5. Slide 5: Business Structure and Revenues of the Energy Sector

    1-1. Energy Sector Overview 2. Business Structure Revenues of the Energy Sector Revenues by Business as a Percentage of Hitachi as a whole within Energy Sector*1 Others Nuclear Power Grids BU IT Energy BU 68% 15% 759.5 billion yen Listed 169.3 billion yen subsidiaries FY2020 FY2020 Consolidated Ener

  6. Slide 6: Business Overview and Major Orders in FY2020

    1-1. Energy Sector Overview 3. Business Overview and Major Orders Received and Delivered in FY2020 Power Grids Business Energy Business Nuclear Energy Business ⚫ Grid Automation ⚫ Grid Integration ⚫ Energy Solution Services ⚫ New Plant EFaaS, regional energy management, Automation products, SCADA sy

  7. Slide 7: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  8. Slide 8: Expanding Energy-Related Markets and Business Opportunities

    1-2. Vision and Growth Strategy 1. Expanding Energy-Related Markets and Business Opportunities Energy-Related Market Energy Sector’s Business Opportunities [Global] Recovery from COVID-19 Creation of a next-generation electric power ◼ Changes in industrial structure (digitalization) due Ｅ R network

  9. Slide 9: Goals of the Energy Business

    1-2. Vision and Growth Strategy 2. Goals of the Energy Business Enhancing Our value as a global leader in the field of energy in a sustainable society Improve Quality of Life Social value Environmental Economic Add value for customers value value Solving customer energy-related issues by providing t

  10. Slide 10: Growth Strategy (Business Strategy)

    1-2. Vision and Growth Strategy 3. Growth Strategy (Business Strategy) Achieve further revenues growth by exceeding the market growth rate in the Power Grid and Digital Services Business Strengthen integration and Global No.1 T&D business service businesses Business portfolio transformation with Hit

  11. Slide 11: Growth Strategy (Target Markets and Focused Regions)

    1-2. Vision and Growth StrategyOverview of Operations 4. Growth Strategy (Target Markets and Focused Regions) Accelerate growth in target markets and focused regions by creating digital synergy Europe Eco-friendly grid Energy portfolio North China transformation Progress of Digitalization ◼ EV + EV

  12. Slide 12: Operational synergies benefitting Hitachi and Hitachi ABB Power Grids

    1-2. Vision and Growth Strategy 5. Operational synergies benefitting Hitachi and Hitachi ABB Power Grids Common ERP Global Shared Services Group wide CRM Digital Business Digital Augmented Front End Engineering Digital Core Data & Digital HR Analytics Core IT Services • Harmonized business processes

  13. Slide 13: Toward the Realization of Carbon Neutrality in FY2030

    1-2. Vision and Growth Strategy 6. Toward the Realization of Carbon Neutrality in FY2030 Achievement of carbon neutrality in FY2030 through reform of the in-house energy portfolio 1. CO2 emission reduction plan for in-house 3. Contributing to decarbonization through collaboration production activiti

  14. Slide 14: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  15. Slide 15: Financial Performance & Progress of 2021 Mid-term Management Plan

    1-3. Summary 1. Financial Performance & Progress of 2021 Mid-term Management Plan 12.0% 9.0% 8.3％ 10.0% Adjusted operating income ratio 4.0％ 3.8％ Exclude related cost 2.6％ 2.8％ Include (4.1)％ Over 1,700.0 billion yen related cost 1,330.0 billion yen 1,330.0 billion yen Revenues 1,118.1 billion yen 4

  16. Slide 16: FY2021 Forecast and FY2022 Targets

    1-3. Summary 2. FY 2021 Forcast and FY 2022 Targets FY2021 (Forecast) Revenues ⚫ Increase in revenues due to the establishment of Hitachi ABB Power Grids 1.33 trillion yen ⚫ Hitachi ABB Power Grids revenues increase, Increase in profit due to Adjusted Operating completion of measures for some Energy

  17. Slide 17: Powering Good for Sustainable Energy

    1-3. Summary 3. Toward further growth Powering Good for Sustainable Energy Achieving a Decarbonized Society, Supporting Stable Energy Supply, and Contributing to Improving Quality of Life © Hitachi, Ltd. 2021. All rights reserved. 16 16 16

  18. Slide 18: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  19. Slide 19: Hitachi ABB Power Grids: Powering Good for Sustainable Energy

    2-1．Overview of Operations 1. Hitachi ABB Power Grids：Powering Good for Sustainable Energy Utilities Industry Transport & Infrastructure PLAN BUILD OPERATE MAINTAIN Products and components Systems Software and automation Service Broadest portfolio and footprint Technology and innovation leader Deepe

  20. Slide 20: Hitachi ABB Power Grids: Overview

    2-1．Overview of Operations 2. Hitachi ABB Power Grids：Overview Well positioned … in attractive markets … Transformation underway… …. to deliver profitable and sustainable growth US$10 Bn Business Volume CAGR ~36,000 employees ~3%* 3 pillars ~100 BUSD ~90 countries, 115 factories: 200 offices Becomin

  21. Slide 21: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  22. Slide 22: Growth opportunities as climate commitments gather pace

    2-2．Market Environment 1. Growth opportunities as climate commitments gather pace Global investments $100bn Emission peak by 2030 “ Avoiding new emissions is not enough. If $2.2 trillion expected investment in power infrastructure - carbon neutrality by 2060 nothing is done about the power sector un

  23. Slide 23: Powering Good for a Sustainable Energy Future

    2-2．Market Environment 2. Powering Good for a Sustainable Energy Future Growth opportunities with the combination of Hitachi ABB Power Grids energy platform & Lumada Enabling carbon-neutral energy systems through large scale renewable integration, highly efficient end-to-end electrification and eco-

  24. Slide 24: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  25. Slide 25: Shaping a Sustainable Energy Future: HVDC for Offshore Wind

    2-3．Growth Opportunities 1. Shaping a Sustainable Energy Future: HVDC for Offshore Wind Environmental benefits Offshore wind HVDC connection - Capable of meeting ~5% of the from HVDC Light® connectors Dogger Bank (UK) UK electricity demand with clean Constantly innovating to reduce power fossil-free

  26. Slide 26: Introducing EconiQ

    2-3．Growth Opportunities 2. Shaping a Sustainable Energy Future: Introducing EconiQ™ Towards a carbon-neutral future creating value for our customers BENEFITS Cost of the Ownership: SF6 420 kV GIS* - Collaborating with our customers & partners to EconiQ™ reduce carbon footprint Equipment 51% Emissio

  27. Slide 27: Uniquely positioned: combining energy and digital platforms

    2-3．Growth Opportunities 3. Uniquely positioned: combining energy and digital platforms Hitachi ABB Power Grids’ Digital Enterprise joins Lumada ecosystem Smart Digital Substation Proven substation hardware + data-driven asset management ENTERPRISE ASSET PERFORMANCE WORKFORCE + connected domain ASSE

  28. Slide 28: Grid resilience is increasingly in focus

    2-3．Growth Opportunities 4. Grid resilience is increasingly in focus Examples of some recent large-scale power outages Power system resilience* : a key focus area for Hitachi ABB Power Grids System Advisory services e.g. grid reinforcement planning with enhanced resilience focus Technologies for ena

  29. Slide 29: Japan opportunity: access to the world's 3rd largest economy

    2-3． Growth Opportunities 5. Japan opportunity: access to the world’s 3rd largest economy Japan – Grid opportunities Hitachi ABB Power Grids solutions 4th largest electricity market globally*1 - opportunities from continued deregulation HVDC (Renewable integration, interconnections) Back-to Back con

  30. Slide 30: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  31. Slide 31: Business operating model and key characteristics

    2-4．Execution Focus 1. Business operating model and key characteristics Illustrative Products & Systems Revenues Engineering Life Cycle Services services Software time Pre-Bid/ Order Commercial operation 20-40 years asset life cycle Bid Products & Systems Services & Software • Broad mix – from compo

  32. Slide 32: Leveraging transformation for profitable growth

    2-4．Execution Focus 2. Leveraging transformation for profitable growth Ongoing transformation efforts yielding results despite COVID-19 headwinds Becoming a growth engine Sharpening our winning portfolio Driving world-class execution Total approximate Total approximate 6% $50M $700M Steady orders wi

  33. Slide 33: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  34. Slide 34: Our journey

    2-5．Summary 1. Our journey… HITACHI ABB POWER GRIDS Start of the new journey & building up Leveraging synergies collaboration and identifying synergies (digital, technology, broader portfolio) Social value Environmental value Economic value Transformation Transition Profitable & Sustainable Growth 2

  35. Slide 35: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  36. Slide 36: Business Forecast and Target

    3-1. Performance Data 1. Business Forecast and Target Unit : Billions of yen Revenues Adjusted operating income 7.5% Adjusted operating income ratio 1,330.0 1,118.1 Power Grids BU 3.8% 2.8% Nuclear Energy BU +Energy BU 7,595 997.1 318 15.3 153 370 759.5 31.8 37.0 (45.4) △454 423.5 4,235 408.6 4,086

  37. Slide 37: Business Forecast and Target

    3-1. Performance Data 2. Business Forecast and Target Unit : Billions of yen Adjusted EBITA ratio ROIC 7.5% 7.4% 6.4% 6.1% 2.2% 3.8% 0.6% (2.7)% FY2021 FY2021 FY2018 FY2019 FY2020 2021年度 FY2018 FY2019 FY2020 2021年度 Forecast 見通し Forecast 見通し Cash flows from operating activities Lumada business revenu

  38. Slide 38: FY2020 Results and FY2021 Forecast

    3-1. Performance Data 3. FY2020 Results and FY2021 Forecast Unit : Billions of yen FY2019 FY2020 FY2021 YoY YoY Forecast YoY Target Changes from the (As of April 2021) (As of June 2019) previous target Orders 356.3 83% 1,149.7 323% 1,356.5 118% - - Order backlog 635.3 93% 1,897.8 299% 1,924.3 101% -

  39. Slide 39: FY2020 Results and FY2021 Forecast (Detail(1))

    3-1. Performance Data 4. FY2020 Results and FY2021 Forecast (Detail(1)) Unit : Billions of yen FY2019 FY2020 FY2021 Forecast Orders Sector Total 356.3 1,149.7 1,356.5 Nuclear Energy BU +Energy BU 356.3 337.7 343.9 Power Grids BU - 811.9 1,012.7 Hitachi ABB Power Grids - 783.6 986.5 Order backlog Sec

  40. Slide 40: FY2020 Results and FY2021 Forecast (Detail(2))

    3-1. Performance Data 5. FY2020 Results and FY2021 Forecast (Detail(2)) Unit : Billions of yen FY2019 FY2020 FY2021 Forecast EBIT [ratio] Sector Total (374.0)[(91.5)%] (53.3)[(4.8)%] 41.0[3.1%] Nuclear Energy BU +Energy BU (374.0)[(91.5)%] (5.6)[(1.6)%] 32.5[9.6%] Power Grids BU - (47.7)[(6.3)%] (2.

  41. Slide 41: Growth (Value) Drivers and Risk Factors

    3-1. Performance Data 6. Growth (Value) Drivers and Risk Factors Supporting Decarbonization as a Leader in the Energy Market and Achieving Sustainable Growth Growth (Value) Drivers Risk Factors ⚫ Green policies in countries around the world linked to ⚫ Prolonged economic slowdown and curbing of sust

  42. Slide 42: Energy Sector Contents

    Energy Sector Contents 1. Energy Sector 2. Power Grids Business 3. Appendix 1-1. Energy Sector Overview 2-1. Overview of Operations 3-1. Performance Data 1-2. Vision and Growth Strategy 2-2. Market Environment 3-2. Glossary of Terms 1-3. Summary 2-3. Growth Opportunities 2-4. Execution Focus 2-5. Su

  43. Slide 43: Glossary of Terms A-E

    3-1. Glossary of Terms 1. Glossary of Terms ① A～E Adjusted EBITA Adjusted Earnings Before Interests, Taxes and Amortization AIS Air Insulated Switchgear APM Asset Performance Management CAGR Compound Average Growth Rate Capex Capital Expenditure CCC Cash Conversion Cycle CO2e CO2 equivalent CRM Cust

  44. Slide 44: Glossary of Terms E-V

    3-1. Glossary of Terms 2. Glossary of Terms ② E～V EV Electric Vehicle FACTS Flexible Alternating Current Transmission Systems FSM Field Service Management GCB Gas Circuit Breaker GIS Gas Insulated Switchgear HVDC High Voltage Direct Current Opex Operational Expenditure OT Operational Technology PPA(

  45. Slide 45: 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

  46. Slide 46: Hitachi Social Innovation is POWERING GOOD

    Hitachi Social Innovation is POWERING GOOD

  47. Slide 47: Hitachi Inspire the Next

    HITACHI Inspire the Next

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