Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2016)

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

  1. Slide 1: Healthcare Business Strategy

    Healthcare Business Strategy Hitachi IR Day 2016 June June 1, 1, 2016 2016 株式会社日立製作所 Masaya Watanabe Vice President and Executive Officer, CEO of Healthcare Business Unit Hitachi, Ltd. © Hitachi, Ltd. 2016. All rights reserved.

  2. Slide 2: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change of Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016.

  3. Slide 3: 2015 Mid-term Management Plan Review

    1-1. 2015 Mid-term Management Plan Review  Reinforced business structure by founding Healthcare Company  Increased revenue and profit in FY2015 ･Testing & Reagents increased revenue, Diagnostics & Clinical improved profit FY2015*2 FY2014 Result*1 Previous Result Forecast*3 YoY Pre-business 337.9 3

  4. Slide 4: Main Progress in FY2015

    1-2. Main Progress in FY2015 Diagnostics & Clinical ･Took 6 orders for PBT (USA, Hong Kong, Nagamori Memorial Center of Innovative Cancer Therapy and Research, etc. ) ･Launched 2 new ultrasound models (for POC and Surgery)(Feb. 2016) Testing & Reagents ･Hitachi High-Technologies: Entered into strate

  5. Slide 5: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change of Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016.

  6. Slide 6: Vision and Business Fields

    2-1. Vision and Business Fields Innovating Healthcare, Embracing the Future For a society where all can enjoy a secure, safe, healthy way of life, Hitachi delivers innovation for implementing healthcare services tailored to individuals. Diagnostics & Clinical Testing & Reagents  Diagnostic Imaging

  7. Slide 7: Business Overview

    2-2. Business Overview Global business development centered on 3 Core Domains FY2015 revenues: 332.6 billion yen ●Revenues Breakdown Diagnostics & Clinical Testing & Reagents Informatics By business field 45% 41% 14% By Healthcare BU Hitachi High-Technologies Others* company 53% 35% 12% Overseas 64%

  8. Slide 8: Hitachi's Healthcare Business Vision

    2-3. Hitachi’s Healthcare Business Vision Innovation for Efficient and Improved Quality of Healthcare Supporting Customers’ Value Chains Solutions Clinical Innovation Healthcare Innovation Diagnostics & Clinical Testing & Reagents ヘルスケア Informatics Power/ Energy Healthcare Finance/ Public Industry/D

  9. Slide 9: Key Indicators of 2018 Mid-term Management Plan

    2-4. Key Indicators of 2018 Mid-term Management Plan  Review of revenue plan in FY2018 ・Change Portfolio focusing on growth and profit ・Reexamine the investment plan FY2015 FY2018 Result Previous Target* Target Pre-business 348.6 600.0 segment － reclassification billion yen billion yen Revenues Pos

  10. Slide 10: Target Position

    2-5. Target Position  Change Portfolio to improve profitability and increase growth rate  Become solution provider featuring by combining Diagnostics & Clinical with Informatics Average 5% Operating income ratio 30 Therapy Diagnostics 20 15 Hitachi Informatics （ (Top group) % 440.0B¥ 10 FY2018 ） 3

  11. Slide 11: New Structure of Hitachi Group's Healthcare Business

    2-6. New Structure of Hitachi Group’s Healthcare Business  Healthcare BU leads all healthcare business as the front-line function  Realize Hitachi group’s comprehensive strength ・ Hitachi High-Technologies: Focus on Bio-Medical Business (Testing & Reagents) ・ Hitachi Chemical: Entered regenerative

  12. Slide 12: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change of Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016.

  13. Slide 13: Market / Customer Trends and Hitachi's Action

    3-1. Market / Customer Trends and Hitachi’s Action Market Changes Customer Trends Hitachi’s Initiatives Reduce medical expense Meet customer’s needs Steady growth in the Improve medical service by Innovation healthcare market (Annual growth over 5%) Integrated Community Care Systems Aging population

  14. Slide 14: Approaching Philosophy for Innovation

    3-2. Approaching Philosophy for Innovation  Collaborative Creation with customers ･ Open innovation with key customers and KOL ･ Utilize tools of collaborative creation(NEXPERIENCE/Cyber-PoC*,etc.)  Utilize IoT Platform of Hitachi group Adapt IoT Platform into Healthcare Cases:  Prediction mainte

  15. Slide 15: Action for Healthcare Innovation

    3-3. Action for Healthcare Innovation Operational Service Hospital Management Reform  Provide operational services for hospital  Adapt advanced social innovation methods department ･ Ethnography, analyze people flow ･Kurume University hospital, etc.(6 facilities) in Japan Research Target (Pharmaci

  16. Slide 16: Action for Clinical Innovation & Improved Economic Outcomes

    3-4. Action for Clinical Innovation & Improved Economic Outcomes From Intelligent Operation to Smart Operation Solutions for each clinical area  IoT for integrating devices and  Shift from product sales to solution utilizing clinical data providers ･Endoscopy Testing / Therapeutic image guide ･Sim

  17. Slide 17: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016. Al

  18. Slide 18: Growth Strategies

    4-1. Growth Strategies Current Position FY2018 Target Ultrasound, PBT: Global Share No.1  Ultrasound: No.1 Market Share  Ultrasound: Expand for each clinical area, Diagnostics & in Japan focus on POC Clinical  PBT: Top 3 Global Market Share  PBT: Providing total solution  Selection and Concentr

  19. Slide 19: Target for New Business Portfolio

    4-2. Target for New Business Portfolio  New Portfolio Target Strengthening the 3 Core Domains shall drive us to higher Profitability and Growth Testing & Reagents FY2015 FY2018 Profitability Diagnostics & Clinical FY2018 Informatics FY2018 FY2015 Growth Rate Circles in the graph are in proportion t

  20. Slide 20: Radiation Therapy (1) Market Trends and Target

    4-3. Radiation Therapy(1) Market Trends and Target  Growth of market (CAGR:8%)  Market demands for seamless usage ・Expand in China, Asia and Europe ・Low-end model  Provide various line-up  Footprint at Top hospitals ・Hitachi’s software (for PBT) ・RayStation, Pinnacle3 ・Various product line-up e.

  21. Slide 21: Radiation Therapy (2) Growth Strategies of PBT

    4-3. Radiation Therapy(2) Growth Strategies of PBT Target position  No.1 Global Share  The total solution provider for radiation therapy Growth strategies  Develop market and cultivate customers aggressively ・High-end model: Key hospitals in China, Asia and Europe ・Low-end model: Launch new-model

  22. Slide 22: Ultrasound (1) Market Trends and Target

    4-4. Ultrasound(1) Market Trends and Target Market growth 3%→5% (FY2015-FY2018) Hitachi’s position  Easy-to-use ultrasound accepted widely in Market share clinical areas ・Large demand for applications specializing in specific clinical area  Global 12%* ・Use devices in combination to improve diagno

  23. Slide 23: Ultrasound (2) Growth Strategies

    4-4. Ultrasound(2) Growth Strategies Target position  No.1 Global Share  The solution provider for all clinical areas Growth strategies  Designate unique strategies for each clinical area (e.g. Cardiology, Obstetrics/Gynecology, Radiology) ・Differentiation with unique application 3D transesophage

  24. Slide 24: Global Business Target

    4-5. Global Business Target Asia, others Asia, others 4% 5% China China 9% 9% Japan Japan Japan 30% Overseas 36% Overseas 36% Overseas revenue ratio revenue ratio revenue ratio Europe 64％ Europe 64％ 70％ 34% Overseas 35% North North 70% America America 16% 16% FY2015 Result FY2016 Forecast FY2018 Tar

  25. Slide 25: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change of Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016.

  26. Slide 26: Reinforcement of Business Structure

    5-1. Reinforcement of Business Structure Improve SG&A margin & generate FCF FY2015 Results Improving points of SG&A margin  “Smart Transformation PJ” for optimizing (accumulated number since FY2014) employees in Japan 4.0  Big improvement of FCF by SCM reform 3.1  Integration of HMC and HAM 3.0 (

  27. Slide 27: Investment for FY2018

    5-2. Investment for FY2018 Investment for accelerating Innovation Revenues M&A  Strategic Investment ・Strengthen Informatics Organic growth (Global, especially North America) ・Strengthen global business FY2015 Result FY2015 FY2018 Target FY2018  R&D Investment ・Focus on Informatics and Ultrasound

  28. Slide 28: Contents

    ヘルスケア事業戦略 Healthcare Business Strategy [Contents] 1. Review of FY2015 2. Business Overview and Overall Strategies 3. Innovation and Collaborative Creation for New Growth 4. Change of Portfolio and Main Business 5. Reinforcement of Business Structure and Investment 6. Conclusion © Hitachi, Ltd. 2016.

  29. Slide 29: Business Performance Trends (1)

    6-1. Business Performance Trends(1) [Revenues] （Billion yen） Informatics +48.0 440.0 Testing & Reagents Diagnostics & Clinical +10.4 +49.0 332.6 FY2015 Result FY2018 Target [Adjusted operating income] （Billion yen） Structural reform downsizing unprofitable Increase revenue products （including M&A） +

  30. Slide 30: Business Performance Trends (2)

    6-1. Business Performance Trends(2) FY2014 FY2015 FY2016 FY2018 Result Result Forecast Target Overseas revenue ratio 65% 64% 64% 70% Revenues Adjusted operating income (Billion yen) /EBIT(Billion yen) 500 440.0 60 400 44.0 44.0 332.6 336.0 [10%] [10%] 320.0 300 40 25.3 25.0 20.0 [7.6%] 21.9 [7.4%] 2

  31. Slide 31: FY2018 Target (Conclusion)

    6-2. FY2018 Target(Conclusion) FY2018 Target  Revenues 440 billion yen (132％ v.s FY2015)  Adjusted operating income [EBIT] ratio 10％[10％] (+ 2.4points [+ 3.4points] v.s FY2015) © Hitachi, Ltd. 2016. All rights reserved. 31

  32. Slide 32: 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

  33. Slide 33: © Hitachi, Ltd. 2016. All rights reserved.

    © Hitachi, Ltd. 2016. All rights reserved.

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