Hitachi, Ltd. · TSE:6501
Hitachi — Investor Day (December 2013)
46 slides from Hitachi's investor day presentation, Dec 13, 2013
Slide 1: Power Systems Business Strategy
Power Systems Business Strategy December 13, 2013 Tatsuro Ishizuka Senior Vice President and Executive Officer President & CEO Power Systems Group and Power Systems Company Hitachi, Ltd. © Hitachi, Ltd. 2013. All rights reserved.
Slide 2: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 3: 1-1. Business Overview
1-1. Business Overview Thermal Power Business Nuclear Power Business Coal-fired thermal power plants Boiling water reactor nuclear power plants (ABWR, ESBWR) Gas turbine Preventive maintenance, nuclear fuel cycle, etc. Major equipment of coal-fired 18% thermal power plants FY2012 Consolidated Transm
Slide 4: 1-2. Market Trends
1-2. Market Trends World Electricity Generation by Energy Source Market Trends 40 (Tr kWh) (By energy 1.5 times source) ・Expansion of renewable energy, Renewable : 2.2 times Increased demand for 30 1.2 times Energy systems to stabilize power Base level Nuclear :1.6 times grid 20 Energy ・Expansion of
Slide 5: 1-3. Overview of the Thermal Power Business Integration and the Power Systems Company
Overview of the Thermal Power Business Integration 1-3. and the Power Systems Company (1) Company Name Capture Business Synergies with Mitsubishi Hitachi Power Systems, Ltd. Mitsubishi Hitachi Power Systems, Ltd. Customers (2) Scope of business integration Thermal power system businesses (gas turbin
Slide 6: 1-4. Global Position of the Power Systems Company
1-4. Global Position of the Power Systems Company Business Portfolio Comparison FY2012 FY2015 FY2020 Renewable Power Energy Solutions Power and Others Power Nuclear Solutions Nuclear Transmission & Solutions Power and Others Power and Hitachi Distribution Hitachi Nuclear Company Hitachi 800.0 Power
Slide 7: 1-5. Strengths of the Power Systems Company
1-5. Strengths of the Power Systems Company Expand business by leveraging Hitachi’s strengths ■ Propose energy solutions based on facilities and equipment, plus IT integration and management capabilities ■ Respond to potential issues and needs of a wide range of customers by harnessing collective st
Slide 8: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 9: 2-1. FY2013 1st Half Results and Full-Year Forecasts
2-1. FY2013 1st Half Results and Full-Year Forecasts FY2013 1st Half Results Revenues: Decreased due to a decline in preventive maintenance services for nuclear power systems, despite higher revenues from transmission & distribution systems Operating income: Decreased in line with lower revenues
Slide 10: 2-2. Strengthen Business Base
2-2. Strengthen Business Base Accelerate “Hitachi Smart Transformation Project” Reduce costs by 53 billion yen through cost structure reforms (FY2011 to FY2015 total) FY2013 1st Half cost reduction (cumulative) : approximately 35 billion yen Production Create global manufacturing system and value ch
Slide 11: 2-3. Continue Working on the Hitachi Smart Transformation Project
2-3. Continue Working on the “Hitachi Smart Transformation Project” Production, procurement and engineering structural reforms Domestic mother factory Planned overseas manufacturing development concept bases Develop and own new products and Build new overseas plants and increase capacity new technol
Slide 12: 2-4. Strengthen Project Management
2-4. Strengthen Project Management Develop high-speed engineering tools and standardize local construction management systems Order Design and engineering received Local construction ■Use IT tools to shorten bid preparation ■Use systems to grasp details on local conditions periods and improve precis
Slide 13: 2-5. Examples of Development and Global Expansion of Cutting-edge Manufacturing Technologies
2-5. Examples of Development and Global Expansion of Cutting-edge Manufacturing Technologies Assembly navigation system (G-KITS) ・Developed by pooling the manufacturing expertise of Kokubu Engineering & Product Div. (March 2013) ・Provide clear work instructions using 3D animation; store and share da
Slide 14: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 15: 3-1. Nuclear Power Business-Basic Policy
3-1. Nuclear Power Business-Basic Policy Raise the safety of nuclear power generation as an effective source of energy for curbing CO2 emissions to meet continuing global demand. Revenues FY2012: 160 billion yen FY2020: 360 billion yen Japan: Promote measures to increase plant safety, and respond to
Slide 16: 3-2. Plant Safety Enhancement Measures
3-2. Plant Safety Enhancement Measures Respond to New Nuclear Power Plant Regulations Measures to prevent hydrogen explosion Major accident management facility ■Blowout panel Hydro ■Emergency control room ■Power supply (generators, batteries) ■Recombination by gen ■Communication and monitoring contr
Slide 17: 3-3. Example of Safety Enhancement Measures For Domestic Plants
3-3. Example of Safety Enhancement Measures For Domestic Plants Plant Safety Enhancement Measures Filtered containment venting (cooperation with AREVA) Hitachi Works Enhance performance of high Power supply pressure coolant injection system enhancement (cooperation with GE-Hiitachi Nuclear Energy) H
Slide 18: 3-4. Steady Progress on the Fukushima Restoration and Revitalization
3-4. Steady Progress on the Fukushima Restoration and Revitalization (Examples of activities at the Fukushima Daiichi Nuclear Power Plant) Examples of activities at the Fukushima Daiichi nuclear power plant Unit 4 rubbles and spent fuels removal in the spent fuel pool Hitachi BWR Reactor Mock up and
Slide 19: 3-5. Recent progress on major overseas projects (1)
3-5. Recent progress on major overseas projects (1) UK Nuclear Project: Horizon Nuclear Power Status of Wylfa Newydd Project Construction of 2 ABWR units Hitachi, Horizon Nuclear Power and HM Treasury signed a co-operation agreement to jointly promote the financing of the Project GDA to be com
Slide 20: 3-6. Recent progress on major overseas projects (2)
3-6. Recent progress on major overseas projects (2) Current status of the Visaginas project in Lithuania Actively carried forward activities in Lithuania Electric power providers of Baltic states and Hitachi have signed and submitted to the government, an agreement for jointly evaluating economic
Slide 21: 3-7. Updates on Cooperation with GE
3-7. Updates on Cooperation with GE Focusing on countries planning constructions of new nuclear power plants Sweden Finland Canada UK U.S.A. Lithuania ■ HEU Hitachi GE Nuclear Energy HNP ■ HAL Poland ■ Mexico ■ GE-Hitachi Vietnam Nuclear Energy Propose ABWRs to Malaysia and other Saudi Arabia countr
Slide 22: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 23: 4-1. Transmission & Distribution Business - Basic Policy
4-1. Transmission & Distribution Business - Basic Policy Revenues FY2012: 70 billion yen FY2015: 110 billion yen Develop into a core business of Power Systems Company Expand T&D business globally based on competitive products and abundant supply experiences Strengthen global expansion of wide-area g
Slide 24: 4-2. Strengthen Transmission & Distribution Business Framework
4-2. Strengthen Transmission & Distribution Business Framework Expand competitive global solutions that fuse equipment and IT Transmission & Distribution Integrate high value-added products and information Systems Division control technologies in Japan with competitive overseas products Establish an
Slide 25: 4-3. Global Expansion of Wide-area Grid Stabilization Systems
4-3. Global Expansion of Wide-area Grid Stabilization Systems Wide-area Grid Stabilization Systems Prevent large-scale power outages through forecast and simulation-based control Grid stabilization with battery storage systems, etc. System control room Comprehensive agreement with Russia's Federal G
Slide 26: 4-4. Power Storage System CrystEna
4-4. Power Storage System “CrystEna” A new initiative targeted by the Power Systems Group = One of Hitachi’s Energy Solutions CrystEna = Crystal (crystallization of the Hitachi Group’s technologies) + Energy Information & Control System Power Electronics Lithium-ion Battery Telecommunication Informa
Slide 27: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 28: 5-1. Renewable Energy and Others-Basic Policy
5-1. Renewable Energy and Others-Basic Policy Revenues FY2012: 160 billion yen FY2015: 240 billion yen Renewable Energy Business Contribute to realizing a low-carbon society through wind and photovoltaic power systems Provide integrated energy solutions spanning grid connection, construction, mainte
Slide 29: 5-2. Wind Power Generation Systems
5-2. Wind Power Generation Systems Hitachi’s initiatives and characteristics of downwind-type wind turbines Won orders for more than 130 x 2 MW-class Hitachi downwind- 2012 No. 1* share in Japan type wind turbines to date Participated in floating offshore wind power generation demonstration and rese
Slide 30: 5-3. Photovoltaic Power Systems
5-3. Photovoltaic Power Systems Characteristics of Photovoltaic Power Systems (Mega Solar) Extensive track record in coordination of large-scale projects World-class core product lineups such as power conditioners (PCS) A solutions business providing turn-key solutions ranging from fund procurement
Slide 31: 5-4. Particle Beam Therapy System Business
5-4. Particle Beam Therapy System Business Particle beam therapy systems*1 around the world and Hitachi’s track record of winning orders All facilities Some facilities Mayo Clinic Mayo Clinic (Minesota) (Arizona) Hokkaido University St.Jude Children Research Hospital Heidelberg lon Therapy Center MD
Slide 32: 5-5. Initiatives in the Particle Beam Therapy System Business
5-5. Initiatives in the Particle Beam Therapy System Business Create technologies using accelerator technology and plant engineering skills amassed over many years Cutting-edge technologies, including industry-leading spot scanning irradiation system Expand orders received based on outstanding opera
Slide 33: 5-6. Outline of Particle Beam Therapy Facility System
5-6. Outline of Particle Beam Therapy Facility System Composition and main facilities and equipment of Particle beam therapy facility Approx. 70 m Injector (Proton Linac) Main accelerator (Proton Synchrotron) Approx. 50 m Inside Gantry Rotating Gantry Fixed beam irradiation room Irradiation room © H
Slide 34: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 35: 6-1. Energy Solution Business
6-1. Energy Solution Business Newly establish Energy Solution Business Division Power Systems Group Nuclear System Division Hitachi-GE Nuclear Energy, Ltd. Infrastructure Systems Group Industrial Systems Division Transmission & Distribution Systems Division Information & Telecommunication (Energy Di
Slide 36: 6-2. Examples of Energy Solutions Business (1)
6-2. Examples of Energy Solutions Business (1) Examples of energy solutions for micro grid communities, which are facing high fuel prices Local needs of micro grid communities Hitachi’s Solutions Control operational costs (reduce fuel costs) Renewable energy facilities Reduce power generation
Slide 37: 6-3. Examples of Energy Solutions Business (2)
6-3. Examples of Energy Solutions Business (2) Examples of coordination among IPP and PPS operators leveraging extensive channels Needs Hitachi’s Solutions ■IPP: upgrade facilities (newly built) ■Secure and coordinate transaction parties (sellers Enhance availability rate, secure power and buyers of
Slide 38: 6-4. Service Business Basic Policy
6-4. Service Business Basic Policy Revenues FY2013: 140 billion yen FY2015: 210 billion yen Expand conventional maintenance services business to advanced maintenance services Examples of products eligible for Service Center 36 locations Sapporo Iwamizawa conventional maintenance services Sales Branc
Slide 39: 6-5. Expand Service Business
6-5. Expand Service Business Expand preventive maintenance and advanced maintenance services Expand preventive maintenance business further Provide advanced maintenance service business based on greater IT utilization Expand remote monitoring, Long-Term Service Agreements (LTSA) and Enterprise Ass
Slide 40: Contents
Contents 1. Business Overview and Market Environment 2. Business Policy and Growth Strategy 3. Nuclear Power Business 4. Transmission & Distribution Business 5. Renewable Energy and Other Businesses 6. Energy Solution Services and Other Businesses 7. Conclusion © Hitachi, Ltd. 2013. All rights reser
Slide 41: 7-1. Business Deployment of Power Systems Company
7-1. Business Deployment of Power Systems Company Cultivate global market in close collaboration with each company Nuclear Energy Energy Solution Energy Storage Transmission & Particle Beam Wind Power Solar Power Distribution Systems EMS Therapy System, others Finance Renewable Energy Service Inform
Slide 42: 7-2. Orders
7-2. Orders FY2013 forecast excludes the thermal power systems business for January-March 2014 Orders received (Billion yen) 1,000 848.3 800 691.7 685.7 650.0 600 Thermal Power Business 400 200 Nuclear Power Business, T&D, Renewable Energy and Other Businesses 0 FY2010 FY2011 FY2012 FY2013 Forecast
Slide 43: 7-3. Business Performance Trends
7-3. Business Performance Trends 43% 39% Overseas revenue ratio ［39%] Revenues （30%） EBIT 34% 36% (Billion yen) ［50%] (Billion yen) ［58.0] ～ 28% ［840.0] 58.0 60.0 1,000 904.6 832.4 ［6.1%] 50.0 813.2 800 750.0 11.6% （450.0） 40.0 ［12.0] ［950.0] 600 30.0 500.0 30.0 400 ［1.4%] 20.0 15.6 ～ 3.3% 15.0 200
Slide 44: 7-4. Conclusion: FY2015 Targets
7-4. Conclusion The World Market Leader Advancing the Future Global Society with Evolutionary Energy Technologies Accelerate promotion of global growth strategy Capture synergies with the integrated thermal power business FY2015 Targets Revenues: 500 billion yen (overseas revenue ratio: 28%) EBIT ma
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
Slide 46: HITACHI
HITACHI Inspire the Next