Hitachi, Ltd. · TSE:6501

Hitachi — Investor Day (June 2013)

28 slides from Hitachi's investor day presentation, Jun 13, 2013

  1. Slide 1: Rail Systems Business Strategy

    Rail Systems Business Strategy Hitachi IR Day 2013 June 13, 2013 Hiroshi Nakayama Vice President and Executive Officer President & CEO, Rail Systems Company Infrastructure Systems Group Hitachi, Ltd. © Hitachi, Ltd. 2013. All rights reserved.

  2. Slide 2: Contents

    Rail Systems Business Strategy Contents 1. Overseas Business Development 2. Business Performance Trends and Targets 3. Business Overview and Market Environment 4. Growth Strategies 5. Conclusion © Hitachi, Ltd. 2013. All rights reserved.

  3. Slide 3: 1-1. Overseas Business Development (1)

    1-1. Overseas Business Development (1) Turn-key orders for “Urban Railway Line 1” in Ho Chi Minh City, Vietnam(June 11, 2013) Project Overview A new line that is scheduled to become operational in early 2018. The 19.7 km line includes both underground and elevated tracks. It will connect Ben Thanh i

  4. Slide 4: 1-2. Overseas Business Development (2)

    1-2. Overseas Business Development (2) UK IEP (Intercity Express Programme) Order (July 24, 2012) Project Overview  Customer : UK Department for Transport  No. of rolling stocks : 596  Delivery : from 2017 to 2019  Procurement method : PPP (Public Private Partnership) project Meanings for Hitach

  5. Slide 5: 1-3. Overseas Business Development (3)

    1-3. Overseas Business Development (3) Order for UK Railway Traffic Management System Prototype (August 29, 2012) Project Overview A large-scale traffic management system upgrade project encompassing the entire existing UK rail network (approx. 25,000 km). The project involves separation into sectio

  6. Slide 6: Contents

    Rail Systems Business Strategy Contents 1. Overseas Business Development 2. Business Performance Trends and Targets 3. Business Overview and Market Environment 4. Growth Strategies 5. Conclusion © Hitachi, Ltd. 2013. All rights reserved.

  7. Slide 7: 2-1. FY2012 Results and FY2013 Forecast

    2-1. FY2012 Results and FY2013 Forecast (Billion yen) FY2011 FY2012 FY2013 Results Results YoY Forecast YoY Revenues 139.6 146.7 105% 150.0 102% Operating income 4.7 5.0 +0.3 5.1 +0.1 (EBIT) (5.8) (5.2) (-0.6) (4.8) (-0.4)  FY2012 revenues were higher year over year due mainly to an increase in tra

  8. Slide 8: 2-2. Business Performance Trends

    2-2. Business Performance Trends Overseas Revenue Ratio Operating Revenues 65% income ～ (Billion yen) 60% (Billion yen) 39% 20 250 24% 28% 26% 240.0 8.0% 200.0 200 15 6.5% 8.0% 146.7 150.0 150 133.1 139.6 6.5% 4.2% 10 3.6% 3.4% ～ 100 1.5% 3.4% 3.4% 3.2% 5 50 1.4% ～ 0 0 FY2010 FY2011 FY2012 FY2013 FY

  9. Slide 9: 2-3. Orders

    2-3. Orders Orders (Billion yen) 296.7 300 280.0 200 147.6 116.5 100 0 FY2010 FY2011 FY2012 FY2013 Forecast © Hitachi, Ltd. 2013. All rights reserved. 9

  10. Slide 10: 2-4. Differences From Previous Forecast

    2-4. Differences From Previous Forecast Revenues IEP schedule Operating (Billion yen) changed income ratio (%) 320.0 10 300 8 8.0% ～～ 200 8.0% 6 146.7 139.6 133.0 6.5% 240.0 4 100 200.0 3.4% 3.4% 2 2.7% ～ 0 0 FY2011 FY2012 FY2015 Target FY2016 Target Revenues Revenues Operating income ratio Operatin

  11. Slide 11: Contents

    Rail Systems Business Strategy Contents 1. Overseas Business Development 2. Business Performance Trends and Targets 3. Business Overview and Market Environment 4. Growth Strategies 5. Conclusion © Hitachi, Ltd. 2013. All rights reserved.

  12. Slide 12: 3-1. Revenues by Systems and Products & Services

    3-1. Revenues by Systems and Products & Services Transport management & control systems Rolling stock systems Signaling/ traffic management systems Rolling stock/maintenance Signaling/train control systems High-speed trains Regional trains FY2012 39% Consolidated Revenues 146.7 billion yen 61% Commu

  13. Slide 13: 3-2. Market Trends

    3-2. Market Trends Conditions 18 trillion yen per year (2009-2011 average) ⇒ 20 trillion yen per year (2015- 2017 average) (CAGR 2.6%) High growth in service and signaling/control businesses Increased investments in railway networks in emerging countries Source: UNIFE World Rail Market Study 2012 

  14. Slide 14: 3-3. Global Position

    3-3. Global Position Hitachi’s Position Revenues *Figures are for FY2012 (Billion yen) Overseas Company D Overseas Company E 1,000 ～ ～ Overseas Company B Overseas Company C Overseas Company A 500 ～ ～ (FY2016 Target) (FY2015 Target) 240.0 billion yen Hitachi (FY2012) 200.0 billion yen 146.7 billion y

  15. Slide 15: 3-4. Strengths and Key Targets

    3-4. Strengths and Key Targets Rolling stock systems Transport management & control systems Higher efficiency, lower environmental impact High reliability, lower environmental impact Aluminum train technology Signaling/ (high-speed trains, commuter trains) train control systems technologies  Highly

  16. Slide 16: Contents

    Rail Systems Business Strategy Contents 1. Overseas Business Development 2. Business Performance Trends and Targets 3. Business Overview and Market Environment 4. Growth Strategies 5. Conclusion © Hitachi, Ltd. 2013. All rights reserved.

  17. Slide 17: 4-1. Growth Strategy

    4-1. Growth Strategy Rail Systems Business Growth Strategy Global  Expand existing bases further (Japan, UK, and China)  Actively develop new bases (India, Brazil, and Southeast Asia) Transformation  Reshape business portfolio Expand services businesses, increase sales of signaling/ transport man

  18. Slide 18: 4-2. Growth Strategy (Global Expansion)

    4-2. Growth Strategy (Global Expansion) ● Europe ● China ・ Expand maintenance business ・ Establish signaling/ control system throughout the U.K. manufacturing base (2013) ・ Establish rolling stock ・ Expand electrical component manufacturing base (2015) manufacturing bases (2014) ・ Enter signaling/tr

  19. Slide 19: 4-3. Growth Strategy (Transformation (1))

    4-3. Growth Strategy (Transformation (1)) Reshape business portfolio Expand service businesses Expand maintenance business  Depots in U.K. (Ashford in existence +11 bases) Expand rolling stock lease business  IEP rolling stock Service business ratio Increase Ashford Depot IEP rolling stock to 15%

  20. Slide 20: 4-4. Growth Strategy (Transformation (2))

    4-4. Growth Strategy (Transformation (2)) Expand and enhance product portfolio Global A-train Optima product lineup by use  AT100 (metro/Commuter)  AT200 (regional)  AT300 (high-speed)  AT400 (monorail) Global signaling systems Develop products compliant with global (European) standards  UK: Ex

  21. Slide 21: 4-5. Growth Strategy (Innovation (1))

    4-5. Growth Strategy (Innovation (1)) Total rail solutions concept Integrate services leveraging infrastructure control systems and IT systems On-board guidance Seat reservations system Transport plan Communications Control Systems Traffic control Digital signage Maintenance IT Product sales IC card

  22. Slide 22: 4-6. Growth Strategy (Innovation (2))

    4-6. Growth Strategy (Innovation (2)) GREEN (Rail energy management system concept) Achieve greater energy conservation by facilitating railcar control synced with optimal electricity control via the TrainLink wayside and onboard communications system Conserve energy through optimal control by makin

  23. Slide 23: 4-7. Hitachi Smart Transformation Project Progress

    4-7. Hitachi Smart Transformation Project Progress Main Initiatives (Complied) Production Shortened rolling stock production lead times costs Increased product syncing efficiency Direct Increased global procurement efficiency ratio materials costs Promoted centralized purchasing Reduced indirect cos

  24. Slide 24: 4-8. Measures to Strengthen Cash Flow Management

    4-8. Measures to Strengthen Cash Flow Management Areas for Improvement and Issues Specific Initiatives 1. Generate cash flows by shortening production lead times Operating cash flows ・Improve asset efficiency to generate 2. Implement Vendor Managed the necessary Inventory (VMI) working capital for 3

  25. Slide 25: Contents

    Rail Systems Business Strategy Contents 1. Overseas Business Development 2. Business Performance Trends and Targets 3. Business Overview and Market Environment 4. Growth Strategies 5. Conclusion © Hitachi, Ltd. 2013. All rights reserved.

  26. Slide 26: 5. FY2015 Targets

    5. FY2015 Targets FY2015 Targets Revenues: 200 billion yen (overseas revenue ratio: 60%) Operating income (EBIT): 13 billion yen (operating income ratio (EBIT ratio): 6.5%) Gross margin: 1.0 point improvement (Vs. FY2012) SG&A expenses ratio: 2.1 point improvement (Vs. FY2012) Accelerate globalizat

  27. Slide 27: 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

  28. Slide 28: HITACHI Inspire the Next

    HITACHI Inspire the Next

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