2018 Mid-term Management Plan
Progress and Prospects
May 12, 2017

Toshiaki Higashihara
President & CEO
Hitachi, Ltd.

© Hitachi, Ltd. 2017. All rights reserved.

Contents

1.
2.
3.
4.
5.

2018 Mid-term Management Plan
Progress in FY2016
Further Growth in Social Innovation Business
Strengthening the Management Base
Preparing for 2018

© Hitachi, Ltd. 2017. All rights reserved.

2

1. 2018 Mid-term Management Plan

© Hitachi, Ltd. 2017. All rights reserved.

3

1.1 2018 Mid-term Management Plan

An Innovation Partner for the IoT Era
Accelerate collaborative creation with customers
through Advanced Social Innovation Business

Four Focus Business Domains

Ｐｏｗｅｒ・Ｅｎｅｒｇｙ

Ｉｎｄｕｓｔｒｙ・Ｄｉｓｔｒｉｂｕｔｉｏｎ・
Ｗａｔｅｒ

Ｕｒｂａｎ

Ｆｉｎａｎｃｅ・
Ｐｕｂｌｉｃ・Ｈｅａｌｔｈｃａｒｅ© Hitachi, Ltd. 2017. All rights reserved.

4

2. Progress in FY2016© Hitachi, Ltd. 2017. All rights reserved.

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2.1 FY2016 Business Performance
FY2016(Results)

FY2017(Forecasts)

FY2018(Targets)

9,000.0
billion yen

9,162.2
billion yen

9,050.0
billion yen

10,000.0
billion yen

6.3%

6.0%

6.4%

7.0%

Over 8.0%

634.8
billion yen

540.0
billion yen

587.3
billion yen

630.0
billion yen

Over 800.0
billion yen

5.3%

5.0%

5.2%

6.4%

Over 8.0%

EBIT

531.0
billion yen

450.0
billion yen

475.1
billion yen

580.0
billion yen

Over 800.0
billion yen

Net income
attributable
to Hitachi, Ltd.
stockholders

172.1
billion yen

200.0
billion yen

231.2
billion yen

300.0
billion yen

Over 400.0
billion yen

FX rate U.S. Dollar
Euro(Average)

120 yen
133 yen

110 yen
120 yen108 yen
118 yen

110 yen
115 yen

Revenues
ratio

Adjusted
operating income
ratio

FY2015(Results)(Original plan*)

10,034.3
billion yen

110 yen
120 yen＊As of May 2016
© Hitachi, Ltd. 2017. All rights reserved.

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2.2.1 Progress in FY2016 (1)Business reorganization for growth of Social Innovation Business Business Restructuring (One-time loss: approx. 96 billion yen)

Business
Structural
Reforms

・Closure, Reduction and Improvement of low profitability business(e.g. Communication products, Overseas Plant EPC*1)[Operating income improved by approx. 40 billion yen YoY]

 Impairment loss related to uranium enrichment business of
GE-Hitachi Nuclear Energy: approx. 66 billion yen Reorganization

Selection &Concentrationof Businesses

Business Field

Revenues*2

Date of reorganization

Logistics Service (Hitachi Transport System)

680.4

May, 2016

Financial Service (Hitachi Capital)

365.3

October, 2016

Power Tools (Hitachi Koki)

141.6

March, 2017

Semiconductor manufacturing / video communications
equipment (Hitachi Kokusai Electric)

180.7

Agreement of share transfer

Others (LCD Panel,etc.Manufacturing Equipment
Business / Security Service)

19.5

Total
*1 EPC : Engineering, Procurement and Construction *2 FY2015 Results (billion yen)

April, 2017-

1,387.5© Hitachi, Ltd. 2017. All rights reserved.

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2.2.2 Progress in FY2016 (2)Promoted empowerment of growing businesses
Railway Smooth progress in integration of Hitachi Rail Italy and continued
collaboration with Ansaldo STS Rail business is planned to grow globally with CAGR over 10%

Financial Utilizing emerging technologies, such as block chain in Asia market
 Steady growth of SI business for financial sector in Japan

Industrial

 Expanding the business of products and digital solutions through thecustomer channels in North America, obtained through Sullair acquisition

Building

 Completed the development of standardized elevator for Asia and the
Middle East
 Business expansion by strengthening the sales and maintenance bases in
Asia, the Middle East, and EuropePower Developed and started trial operation of 5.2MW off-shore wind power
generation system
 Accelerated the expansion of wind power business in Japan and Asia
© Hitachi, Ltd. 2017. All rights reserved.

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2.2.3 Progress in FY2016 (3)Established IoT platform to drive the Social Innovation Business
Launch of the Lumada IoT platform One of the world’s most advanced IoT platforms

Examples of cases Development team comprised of top talent
in the IoT field

Distribution

Logistics

Call centers

Purchases
per customer

Productivity

Order receipt
Rate

up 15%

up 10%+

up 27%--- 270 members, mainly in the U.S.
 Accumulated insights obtained throughCollaborative Creation with customers--- 203 cases
 Insights incorporated into reusable software

Railway Automotive--- Enhancing the solution core

* CLO: Chief Lumada Officer

Banks

Manufacturing

Construction

Continue expansion of cases
through collaborative creation with customers

 CLO* responsible for the use of IoT platform
appointed in each business
LumadaBusiness
Revenues(billion yen)

Water

FY2016FY2017FY2018(Result)(Forecast)(Target)

900

950

1,050

…

Consider additionallarge-scale investment
to increase revenue
and profit© Hitachi, Ltd. 2017. All rights reserved.

92.3.1 Business Growth Plan (1)Increase revenues and profits through growth of Social Innovation Business*1 Adjusted operating income (ratio)*2 Net income attributable to Hitachi, Ltd. stockholders

 Revenues

Increase by M&A and etc.

■ Impacts of business reorganizations(trillion yen)
10

9.7

9.8

10.0

7

7.9

6.3％
9.2

9
8

8.2

 Operating income (ratio)*1
 Net income*2
7.0％

8.6

8.6

9.1

10.0

9.0

6.6％

6.3％

(billion yen)
1000

6.4％

6.0％(plan)

Operatingincomeratio■ Impacts of business reorganizations

6

800

604.7

5

500

3

641.3

634.8

587.3

630

Operatingincome

620

500

4

530

530

540
400

413.8

2

300

1
0

8.0％

217.4
FY2013(Result)

FY2014(Result)

FY2015(Result)

FY2016 FY2017 FY2018(Result) (Forecast) (Target)

0

FY2013(Result)

FY2014(Result)

231.2

Net
income172.1
FY2015(Result)

FY2016 FY2017 FY2018(Result) (Forecast) (Target)

Note: Figures shown for revenues and adjusted operating income from FY2013 to FY2017 reflect adjustments based on existing businesses in FY2018(Results of Hitachi Transport Systems, Hitachi Capital, Hitachi Koki, Hitachi Kokusai Electric, Hitachi Maxell, the air conditioning business, and the thermal
power generation business were excluded actual results from FY2013 to FY2017. The elimination among inter-company transactions are not reflected.)© Hitachi, Ltd. 2017. All rights reserved.

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2.3.2 Business Growth Plan (2)Accelerate further growth by large scale investment

Revenues

Growth of existing business(FY2018)

9.5 - 9.6 trillion yen＋

Further growth by additional
investment and M&A

400 - 500 Billion yen

FY2018＝ 10 trillion yen

Large scale investment (M&A)

1.0 trillion yen

Overseas
Revenue
ratio

Growth of existing business(FY2018)

51%＋

Further growth by additional
investment and M&A

Up 4%+FY2018＝ Over 55%© Hitachi, Ltd. 2017. All rights reserved.

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3. Further Growth in Social Innovation Business Further Strengthening Digital and Lumada
 Strengthening the Front on a Global Basis Growth strategies in Four Focus Business Fields© Hitachi, Ltd. 2017. All rights reserved.

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3.1 Global Trends and Social Innovation Business
Opportunities for Hitachi’s Social Innovation Business are expanding
The United Nations has adopted“Sustainable Development Goals” (SDGs),
and promoted it through many global companies.

Resolving the world's social challenges andproviding innovative structures for society
and lives through Social Innovation BusinessSociety 5.0
Industrie 4.0

IoT

SDGs Market; US$12 Trillion(Predicted figures by 2030)*1

Digital Market; US$1.29 Trillion (2020)(CAGR 15.6%)*2*1 BSDC “Better Business, Better World”*2 IDC “Worldwide Semiannual Internet of Things Spending Guide”© Hitachi, Ltd. 2017. All rights reserved.

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3.2 Growth Measures for Social Innovation Business
Growing Social Innovation Business, Driven by Lumada
Furtherstrengthening
Digitaland Lumada

Strengthening
the Front Businesson a Global Scale

Growthstrategies infour Focused
Business Fields

End-to-end Integrated Solutions

Open Ecosystems

Global Front
Americas

EMEA/CIS

APAC

Power / Energy

Industry &Distribution / Water

China

Urban

Japan

Finance / Public/ Healthcare© Hitachi, Ltd. 2017. All rights reserved.

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3.3.1 Growth Measures (1)Further strengthening digital and Lumada
Further expansion of Digital Solutions Business by Enhancing Lumada
Providing optimal solution based on the understanding of issues
through co-creation with customers
Customers (in various fields)

End-to-end
Integrated
Solutions

Co-Creation

Issue
Analysis

Co-Creation

Hypothesis
Formulation

Proposal

PoC / PoV*

Component/System
Modernization

O&M

Delivery

Providing value rapidly to customers through co-creation with partners

Open
Ecosystems

×Typical Co-Creation Partners* PoC / PoV : Proof of Concept / Proof of Value© Hitachi, Ltd. 2017. All rights reserved.

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3.3.2 Growth Measures (1) Case[1]Urban : Connected Vehicle Solutions
Expanding existing technical and marketing partnerships to an Innovation Partner
through joint engagements on multiple co-innovation projects in the United States

Penske Corporation
Head Office- Bloomfield Hills,
MichiganPenske-Hitachi Co-innovation Concept
Challenges

 Improving vehicle uptime, safety, andcompliance Helping keep customers wellinformed about their vehicles

Description of main operations- Diversified, on-highway,transportation services
Subsidiaries- Retail Automotive- Truck Leasing
Operating Vehicles: 240,000 +Service Locations: 1,000 +- Logistics- Professional Motorsports, etc.

Co-innovation
Vehicle Data
Operational Expertise

Big Data Analytics
Artificial Intelligence© Hitachi, Ltd. 2017. All rights reserved.

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3.3.2 Growth Measures (1) Case[2]Industry : Digital Solution for Quality Management[Co-creation case with Daicel]

Connecting image analysis data andmanufacturing execution
management systems (facilities data)
Issues Enhancing quality on a global scale
Solution Connect image analysis systems and manufacturingexecution management systems at Daicel’s Harima
plant, to improve quality assurance efficiency,
and hereafter develop for global sites

Value /
Outcomes

Trend monitoring and preventative
measures using image data
Preventing defects before they occur© Hitachi, Ltd. 2017. All rights reserved.

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3.3.2 Growth Measures (1) Case[3]Urban : Rail Maintenance in UK
Providing the trains that are needed when they are needed,in keeping with service requirements specified by
the railway operating companies
Issues Challenges that come with an older railway
 Increasing the reliability and safety of railways

Solution Remote monitoring and next-generation maintenance basedon analysis of unusual sensor data and type of fault
 Extend the cycle of parts replacements and optimize thestock and supply chain

Value /
Outcomes* QoL : Quality of Life

On-time, secure and comfortable operation,enhancing QoL* of users, and economic
revitalization© Hitachi, Ltd. 2017. All rights reserved.

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3.3.2 Growth Measures (1) Case[4]Financial : Digital Settlements (FinTech)
Demonstrating secure financial services
to create new cross-border settlement services
Issues Evolution of digital technologies and increasing security risks
 Ensuring the global competitiveness of financial institutions(increased efficiency, service development)

Solution Verification tests using frameworks for the developmentof FinTech services by Singapore authorities
 Development of future FinTech services, including
electronic checks

Value /
Outcomes

Identify issues in the use ofblock chain technologies(in the future)© Hitachi, Ltd. 2017. All rights reserved.

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3.3.2 Growth Measures (1) Case[5]Healthcare : Hospital Management Support in China
Provide secure medical services by increasing efficiency of
hospital operations/management utilizing
Hitachi’s operational know-how, IT and medical devices
Local medical
institution

Diagnostic imaging
centerIssues Improvement in the efficiency of hospitalmanagement
 Improvement for the quality of medical
treatment

Solution Operational support at diagnostic imaging center(Provide Medical devices such as PET*1, MRI*2 and know-how)

Hospital

Local medical
institution

 Reduction of operational costs utilizing IT (e.g. Central purchasing) Increase the number of patients in cooperation with local
medical institutions

Value /
Outcomes

Improvement of local healthcare quality
Increase in hospital profits*1 PET: Positron Emission Tomography *2 MRI: Magnetic Resonance Imaging© Hitachi, Ltd. 2017. All rights reserved.

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3.4.1 Growth Measures (2)Strengthening the Front on a global scale

Accelerate global expansion of Social Innovation BusinessBusiness organization
２０１６年度からの事業体制
Customers●Establishment of global front
・Establish “global front”, management
organization to accelerate global expansion ofSocial Innovation Business (April 2017)●Employment of human resources
Global Front

・Employ human resources such as
consultant/SE/maintenance personnel etc.
(FY2016 results: domestic 1,000 staff, Overseas 1,000 staff)●Training for human resources
Platform・Accelerate development of staff and increase
global front staff by building global certification
system●Strengthening front function by M&A
Product

・Business growth through M&As to strengthen
front function
Target: Customer channels/Maintenance sites/Product business, etc.
© Hitachi, Ltd. 2017. All rights reserved.

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3.4.2 Growth Measures (2)Strengthening the Front on a global scale

Business growth by empowering front line through investment
Effects of Ansaldo STS acquisition

Aims of Sullair acquisition

 Business collaboration proceedingsmoothly as planned Entry to prospective North America
market and acquisition of Sullair's
customer base and sales network

 Acquired customers in global railway
market Growing by adding products (rollingstock, equipment, signaling systems)
and digital solutions on railway turnkey solutions(US customers: 4,000)

 Enhance the line-up of products(Air-compressor, marking device) Provide digital solutions, such as
optimized factory and SCM*
renovation to Sullair’s customers
as next step

Investment track records in global front line empowerment
Ansaldo STS (Italy)(March 2016)

Entry to turn-key business and expansion of global businesses

Kurt & Kurt (Turkey)(Announced Dec. 2016)

Sales expansion for medical devices in Europe and the Middle East

Sullair (US)(Announced April 2017)

Acquisition of customer channel and business expansion in the U.S.

Temple Lifts (UK)(Announced April 2017)

Entry to lift maintenance business in Europe* SCM : Supply Chain Management© Hitachi, Ltd. 2017. All rights reserved.

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3.5.1 Growth Measures (3)Growth strategies in four key business fields
Focus on four business fields, Consider Growth Strategies and Investments

Hitachi’s Business

Strategy & Investment

Power / Energy Electric power
reforms (Japan)
 Distributed Power /Renewable EnergyPowerNuclear Energy
Energy Solution

Industry &Distribution / Water

Finance / Public/ Healthcare

Urban

 Plant optimization
using digitaltechnologies

 QoL enhancement

 Rebuilding supply
chains by digitaltechnologies

 Further growth of
product businessIndustry/Distribution
WaterIndustrial Products

Urban solutions
RailElevators/Escalators
Automotive parts
Smart Life &(Urban / Mobility / Home
digitalization)

 Growth in keepingwith changes intechnologies andmarkets (financial) Support for “MyNumber”

Eco-friendly Systems(Home Appliances)

Systems for

Financial Sector
Systems for Publicand Social
Infrastructure Sector
Healthcare
Defense Systems© Hitachi, Ltd. 2017. All rights reserved.

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3.5.2 Growth Measures (3)Growth strategies in four key business fields
Strengthen investment strategy toward the next stage of growth

Focusing investment and improving asset profitability are
essential for the growth by Social Innovation BusinessRole of Investment Strategy Division (established on April 2017)
 Focused investment (M&A, capital expenditure, R&D, sales
investment, etc.) on growing business fields
 Re-design the balance sheet
 Strengthen project finance© Hitachi, Ltd. 2017. All rights reserved.

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3.5.2 Growth Measures (3)Growth strategies in four key business fields
Business creation investment beyond the existing business field

Role of Future Investment Division (established on April 2017)
 In charge of investment and business start-up to grow by social innovation,in addition to growth of individual business and associate business group Aim at fast business start-ups, promoting open innovation with external
institutes / ventures[ Projects and Leaders ]Robotics / AI

Urban mobility

Healthcare
informatics

Kaori Kashimura

Seiichiro Nukui

Asako Koike

Infrastructure
maintenance

Security

Masahiko Hasegawa Yuichiro Nakaya© Hitachi, Ltd. 2017. All rights reserved.

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4. Strengthening the Management Base© Hitachi, Ltd. 2017. All rights reserved.

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4.1 Progress in Management Base Reforms
Strengthening the management base to achieve business growth
Speed upmanagement

 Accelerate decision making under Business Unit
systemExpand global
business

 Investment to acquire sales channels and partners
 Empower global front line

Increase businessprofitability

 Identify low profitability businesses, and implement
countermeasures
 Promote Hitachi Smart Transformation Project Improve investment efficiency and ROA

Invest in growthbusinesses Make “strategic investments” and “investments
toward future,” on a total scale of 1 trillion yen
 Formulate and execute strategies in each of four
focus business fields© Hitachi, Ltd. 2017. All rights reserved.

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4.2 Improvement by Management Base Reform
Improving business performance by Hitachi Smart Transformation Project

Hitachi Smart Transformation Project CCC*1
FY2016 72.2 days →C/F

FY2018 70 days

improvement…Reduce lead time by sharing order receipt information
between Front and manufacturing divisions Gross Margin
FY2016 26.0%→

FY2018 Over 28.0%…Reduce costs of purchased items through cost designfrom the design and development stage

 SG&A*2
FY2016 19.6%

P/L→

improvement

FY2018 20%…Control an increase in SG&A, resulting from strengthening
Front, through standardization of operations*1 CCC : Cash Conversion Cycle (Manufacturing, Services and Others)*2 SG&A : Selling, General and Administrative expenses© Hitachi, Ltd. 2017. All rights reserved.

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4.3 Progress of Important Items
Continue close collaborations with stakeholders inside and outside of the company

Horizon Project (Nuclear Power Project in UK)
 Activities going according to plan Prospect the Final Investment Decision in 2019

Thermal Power Project in South Africa
 Continue close collaboration with Mitsubishi Hitachi Power Systems
toward project completion
 Continue discussions with Mitsubishi Heavy Industries© Hitachi, Ltd. 2017. All rights reserved.

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5. Preparing for 2018

© Hitachi, Ltd. 2017. All rights reserved.

30

5.1.1 Goal of the Hitachi Group (1)Front drives growth in sales and earnings
Front revenue ratio FY2016 38% → FY2018 40% (Target)
Revenues (billion yen):
3,521.3 → 4,000.0

Front

Adjusted operating income ratio:
8% (FY2018 target)

Power / Energy

Industry &Distribution / Water

Urban

Finance / Public /Healthcare

Revenues (billion yen)

Revenues (billion yen)

Revenues (billion yen)

Revenues (billion yen)

495.7

590.0

703.0

FY2016FY2018FY2016

Platform/
Products*

770.0
FY20181,083.8

Revenues (billion yen):
6,714.5 → 7,160.0

1,320.0

1,238.6

FY2018FY2016FY2016

1,460.0

FY2018Adjusted operating income ratio:
8% (FY2018 target)* “Products” includes Automotive Systems business and Smart Life & Eco-friendly Systems business© Hitachi, Ltd. 2017. All rights reserved.

31

5.1.2 Goal of the Hitachi Group (2)Global business expansion
China

EuropeN. America Railway
 Nuclear energy
 Energy

 Elevators / escalators
 Healthcare Construction machinery Automotive parts
 Industrial products
 Urban mobility

FY2016 Revenue
0.97 trillion yen

FY2016 Revenue
0.93 trillion yen

FY2016 Revenue
1.14 trillion yen

FY2018 Revenue
1.15 trillion yen

Asia Finance(FinTech) Industrial products
FY2016 Revenue
0.93 trillion yen

FY2018 Revenue
1.22 trillion yen

FY2018 Revenue
1.1 trillion yen

FY2018 Revenue
1.46 trillion yen

Overseas Revenue Ratio
FY2016 (Result)

48%→

FY2018 (Target)

55%

Note: Regions except for those which are listed above (including Japan): FY2016 5.18 trillion yen → FY2018 5.07 trillion yen© Hitachi, Ltd. 2017. All rights reserved.

32

5.2.1 Mid-term Management Plan Targets (1)FY2016 Results
Front businessexpansion

FY2018 Targets

38%

40%

48%

Over 55%

7.1%

Over 9%3.3%Over 5%(Front revenue ratio)

Global business expansion(overseas revenue ratio)

Strengthening
cash-generating capability(Operating cash flow margin*1)

Improving asset profitability(ROA*1,2)*1 Manufacturing, Services and Others*2 ROA(Return on Asset) = [Net income] / [Total Asset (Average between the end of current fiscal year and the end of previous fiscal year)] x 100© Hitachi, Ltd. 2017. All rights reserved.

33

5.2.2 Mid-term Management Plan Targets (2)FY2016(Results)

FY2017(Forecasts)

FY2018(Targets)

9,000.0
billion yen

9,162.2
billion yen

9,050.0
billion yen

10,000.0
billion yen

6.3%

6.0%

6.4%

7.0%

Over 8.0%

634.8
billion yen

540.0
billion yen

587.3
billion yen

630.0
billion yen

Over 800.0
billion yen

5.3%

5.0%

5.2%

6.4%

Over 8.0%

EBIT

531.0
billion yen

450.0
billion yen

475.1
billion yen

580.0
billion yen

Over 800.0
billion yen

Net income
attributable
to Hitachi, Ltd.
stockholders

172.1
billion yen

200.0
billion yen

231.2
billion yen

300.0
billion yen

Over 400.0
billion yen

FX rate U.S. Dollar
Euro(Average)

120 yen
133 yen

110 yen
120 yen108 yen
118 yen

110 yen
115 yen

Revenues
ratio

Adjusted
operating income
ratio

FY2015(Results)(Original plan*)

10,034.3
billion yen

110 yen
120 yen* As of May 2016
© Hitachi, Ltd. 2017. All rights reserved.

34

Delivering new value to society throughcollaborative creation with our customers and partners© Hitachi, Ltd. 2017. All rights reserved.

35

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 performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify“forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materiallyfrom those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which
may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to: economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levelsof demand in the major industrial sectors Hitachi serves;
 exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the
U.S. dollar and the euro; uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds;
 fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, orshortages of materials, parts and components;
 the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses the percentage-of-completion method to recognize revenue from sales; credit conditions of Hitachi’s customers and suppliers; fluctuations in product demand and industry capacity; uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials or shortagesof materials, parts and components;
 uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance forsuch products;
 increased commoditization of and intensifying price competition for products;
 uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;
 uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances and the possibility of incurring related expenses;
 uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness; the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;
 general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States andEurope, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms
and conditions and labor relations; uncertainty as to the success of cost structure overhaul; uncertainty as to Hitachi’s ability to attract and retain skilled personnel;
 uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights;
 uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity-method associates and joint ventures
have become or may become parties;
 the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
 the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis, the spread of infectious diseases, and geopolitical and social instability such as
terrorism and conflict; uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information or that of its customers; and uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related costs.

The factors listed above are not all-inclusive and are in addition to other factors contained in other materials published by Hitachi.

© Hitachi, Ltd. 2017. All rights reserved.

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