Hitachi Integrated Report 2022

CEO Message

Whatʼs Hitachi

Introduction

The Story of Collaborative Value Creation with Stakeholders

Business Strategies

Value Creation

Materiality

Mid-term Management Plan 2024

The Value Creation Process

Capital expenditure 388.7 billion yen
Manufacturing bases*
approx. 470

on for Soreati
ciectyCo

Human capital

Diverse and global talent thatcan resolve social issues

DigitalInnovation

Green
Energy &Mobility

Leverage competitive
advantages
DigitalSystems &Services

61 kt

Financial platforms andinvestments for creating value
Hitachi, Ltd.
stockholdersʼ equity

HitachiAstemoConnective
Industries

4,341.8 billion yen
Interest-bearing debt 3,126.7 billion yen
Growth investment 1,000 billion yen

Total: 67,000 persons

65%

Environment
Integrity in management

Reduction rate in total CO2 emissions
at business sites (factories and offices)

Materiality

Reduction rate in water use per unit
Reduction rate in waste andvaluables generation per unit
Reduction rate in chemical
atmospheric emissions per unit

Corporate governance

MissionPeople(vs. fiscal 2010)

Security & Safety
Diversity,
equity and inclusion

Risk management

Contribute to society through the development ofsuperior, original technology and products.

*Number of employees, R&D staff and customer co-creation centers are as of end of fiscal 2020; manufacturing bases are as of April 2021.

Wellbeing

Number of publishedapprox. 11,000
patent applications

IT, OTs, ProductEnhancing quality of life

Society

A society where
every individual is
comfortable and activeReduction in CO2 emissions
from products and services

Resilience

Protect the earth
while maintaining
social infrastructure

Expand the use of Lumada in-house
Application cases forinternal IT services
305 cases

Reducing environmental burden(1.61 GL)

Raw material input
3,235 kt
Total water input 25.61 million m3
Total chemical substances handled

32,000 persons

Lumada business revenues 1.6 trillion yen
Lumada overseas revenue ratio
47%

62 PJ

Financial capital

Increase ofPlanetary
Boundaries

Increase competitive superiority
to expand business

R&D investments
317.3 billion yen
R&D staff*
2,550
Customer co-creation centers*
19

Total energy input (crude oil equivalent）(FY2021)Engagement indicatorin employee survey

Three Growth Drivers
Realizing Co-creation

Technologies/co-creation platforms
to ensure global competitiveness

Efficient use of resources

CFO Message

Diversity, equity and inclusion
Ratio of female managers
9.8%
Ratio of non-Japanese executive
and corporate officers
17.6%
Ratio of female executive
and corporate officers
12.2%
Digital talent

GreenIntellectual capital

Lumada Alliance
Program partners approx. 50 companies
Investments incumulativestartups
17 companies
Funding for social
contribution activities 1.9 billion yen
Natural capital

Financial Strategies

Diversification and globalizationof human capital

Production/Business processes
enhanced through IT

Partnerships for creating value
through Co-creationHuman Resources Strategies

OUTCOME

Manufactured capitalSocial and relationship capital

21Support Peopleʼs Quality ofLife with Data and Technologythat Fosters a Sustainable Society(FY2021)

Number of employees*
368,247
Overseas employee ratio
57%
Investment in education
per employee
57,700 yen

Data

Corporate GovernanceMid-term Management Plan 2024 -Vision

The Value Creation Process

INPUT

Sustainability

28%
37%
36%
18%
35%

Accumulate resources forgrowth and returns
Core free cash flows 290.0 billion yen
Total dividends
120.9 billion yen
Total shareholder return +120.9%(past five years)