Hitachi’s History of Transformation (From Fiscal 2006)

Targeting the achievement of the goals outlined in the 2018 Mid-term Management Plan as well as further growth in theyears ahead, Hitachi will work to accelerate its transformation into a company that is a leader in global markets andstrive to increase corporate value.
Transformation of Business Portfolio

Fiscal 2006 – Fiscal 2009

Fiscal 2010 – Fiscal 2012: 2012 Mid-term Management Plan

Strengthening Initiatives

Strengthening Initiatives

Advancing Partnerships / Rebuilding Initiatives• Made Clarion a consolidated subsidiary• Acquired BlueArc, a network storagesolution business in the United States•	Transferred plasma display panel plant to Solar Frontier K.K.

• Established joint venture with GE in nuclear power
generation systems business• Acquired a nuclear energy company
in the United Kingdom• Made Hitachi Kokusai Electric a consolidated subsidiary• Made Hitachi Koki a consolidated subsidiary•	Integrated Renesas Technology, an equity method company
in the semiconductor business, with NEC Electronics Corporation•	Transferred business in large LCD panels for TVs to PanasonicCorporation•	Casio Hitachi Mobile Communications, an equity method company
in the mobile phone business, integrated mobile phone operations
with NEC Corporation• Made five listed companies* wholly owned consolidated
subsidiaries*H itachi Information Systems, Hitachi Software Engineering, Hitachi Systems& Services, Hitachi Plant Technologies, and Hitachi Maxell

Advancing Partnerships / Rebuilding Initiatives•	Established joint venture in the hydroelectric power generation
systems business with Mitsubishi Electric Corporation andMitsubishi Heavy Industries, Ltd.

• Sold precision small motor business to Nidec Corporation•	Transferred hard disk drive business to Western Digital Corporation• Withdrew from consumer PC business•	Integrated small and medium-sized LCD businesswith Japan Display Inc.

• Transferred semiconductor manufacturing subsidiary inSingapore to a semiconductor foundry•	Stopped in-house production of flat-panel TVs(Millions of yen)
800,000

22.9%
20.6%
Stockholders’ equity ratio

21.2%
Fiscal 2008

18.8%

• F inancial crisis caused by Lehman Shock•O ne-off write-down of deferred tax assets

600,000

15.7%(Adjusted) Operating income(left scale)
400,000

14.3%

11.2%

EBIT (earnings before
interest and taxes)*1(left scale)

200,000

0
Net income (loss) attributable toHitachi, Ltd. stockholders per share(right scale)‒200,000‒400,000

2

Fiscal 2007
• Implemented one-off write-down of deferred
tax assets due to worsening of conditions indigital media field

2006

2007

2008

Fiscal 2009

Fiscal 2010

Fiscal 2011

Fiscal 2012

• Raised funds through theissuance of new shares• Introduced in-house company system•C elebrated 100th
anniversary offounding•A chieved new record
high in net income• Transferred hard disk
drive business• S tarted cost structurereform project• Introduced Groupsystem• Increased number of
non-Japanese directors,
outside directors
became majority

2009*1 EBIT is presented as income before income taxes less interest income plus interest charges.
*2 Manufacturing, Services and Others
Note: Figures are U.S. GAAP, IFRS was introduced from fiscal 2014.

2010

2011

2012

Hitachi, Ltd. | Integrated Report 2016

Fiscal 2013 – Fiscal 2015: 2015 Mid-term Management Plan

Fiscal 2016 – Fiscal 2018:2018 Mid-term Management Plan

Strengthening Initiatives

Advancing Partnerships / Rebuilding Initiatives• Absorbed Hitachi Plant Technologies• T ransferred printed circuit board production
equipment business to an investment fund

Advancing Partnerships /Rebuilding Initiatives• Hitachi Metals and Hitachi Cable were merged• E stablished joint venture with Mitsubishi Heavy Industries, Ltd.
in thermal power generation systems business• Made Hitachi Medical a wholly owned subsidiary• Acquired Prizm Payment Services, a provider ofpayment services to financial institutions in India• R elisted Hitachi Maxell shares• Built a strategic partnership with ABB in the high-voltage
direct current power transmission business in Japan•D
 iscontinued production of semiconductors for information &telecommunications equipment• Hitachi Data Systems acquired Pentaho Corporation,a big-data analytics software company in the United States• Establisheda joint venture with Johnson Controls, Inc.
in the air-conditioning systems business• Transfer of a portion of stockholding in Hitachi
Transport System to SG Holdings• Agreement to transfer a portion of stockholding inHitachi Capital to Mitsubishi UFJ Financial Groupand Mitsubishi UFJ Lease & Finance• Acquired the signaling and rolling stock operations ofFinmeccanica S.p.A.

24.1%

23.7%

24.0%

23.6%

(Yen)

IFRS

120

21.8%

90

60

30

IFRS

IFRS

0IFRS〜〜
Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016•A
 chieved newrecord high in EBIT•A chieved new record
high in operating income•A chieved new record high inoperating cash flow margin*2• Introduction of business structuresby market with strengthened frontline capabilities

2013

2014

2015

2016

‒210

‒240(FY)

3