Introduction
Materiality

Value Creation

Mid-term Management Plan 2024

Business Strategies

Transformation

Corporate Initiatives for Sustainability Growth

Human Resources Strategy

Financial Strategy

Governance
CFO Message

Hitachi Integrated Report 2023

DataSector Strategies

Mid-term Management Plan 2024

Progress of the Mid-term Management Plan 2024

The company stage is changing from the phase of business structural reforms to the phase of organic growth. The Mid-term Management Plan 2024 is a crucial turning point to increase
corporate value as One Hitachi.

Supporting people’s quality of life with dataand technology that foster a sustainable society

Ideal Positioning in the Mid-term Management Plan 2024

GrowthWith the three growth drivers of Digital, Green and Innovation, the Mid-termManagement Plan 2024 aims to achieve global growth. Under this management plan,Hitachi will protect the global environment so as not to exceed planetary boundaries
and contribute to the realization of a sustainable society where wellbeing (humanhappiness) is maintained so that all members of society can be comfortable and active.

n for Soeatio
cie-crtyCo

PlanetaryBoundaries
Protect the earth
while maintaining
social infrastructure

GreenWellbeingDigitalA society where
every individual is
comfortable and active

Innovation

PeopleSociety

Financial Targets (FY2024)*1

Financial Figures by Sector

Under the Mid-term Management Plan 2024, Hitachi is focusing on growth in boththe top line and the bottom line and on generating cash for growth and shareholder
returns. Hitachi will thereby achieve growth in EPS and CFPS.

Revenue growth rate
FY2021-FY2024 CAGR

5% – 7%
Core FCF*4*5(3-year cumulative)

1.2 trillion yen

Adj. EBITA margin*2

12 %ROIC

10 %EPS*3 growth
FY2021-FY2024 CAGR

10% –14%EPS

CFPS≥ 600 yen ≥ 500 yen

Shareholder returns:
0.8 - 0.9 trillion yen*1 Revenues, profit and cash flow of listed subsidiaries and Hitachi Astemo are subtracted, and equity in earnings of affiliates
are added to results and plans of FY2021-FY2024.
*2 Adjusted operating income plus Acquisition-related amortization and equity in earnings/losses of affiliates.
*3 The impact of one-time factors is excluded from net income in FY2021.
*4 Core FCF = Cash flows from operating activities – CAPEX.
*5 The target was updated in April 2023 as a result of deconsolidation of listed subsidiaries and Hitachi Astemo.

FY2021Results

FY2022
Results

FY2023
Forecast*6Revenues

6,699.2

7,638.2

7,840.0

Adj. EBITA margin*8

9.9%

9.5%

10.2%

12%

Revenues

2,153.6

2,389.02,450.0

CAGR 7%(2,600.0)

Adj. EBITA margin

13.1%

12.3%

12.6%

14%

Revenues

2,051.0

2,469.9

2,580.0

CAGR 13%(2,900.0)

Adj. EBITA margin

4.5%

6.6%

6.7%

9%

Revenues

2,752.8

2,975.2

3,000.0

CAGR 4%(3,100.0)

Adj. EBITA margin

9.4%

10.5%

11.0%

12%

Billions of yen

Continuing
consolidatedbusiness(three sectors)
Digital Systems &Services

Green Energy &Mobility

Connective
Industries

FY2024
Target*7
CAGR 5%-7%(7,800.0-8,200.0)*6 Assumed FX rate: 130 yen / US$, 140 yen / €. Impact of FX rate fluctuation by one-yen depreciation from assumed rate is as follows—
US$: Revenues +13.5 billion yen / Adj. EBITA +1.5 billion yen, €: +7.0 billion yen / Adj. EBITA +0.5 billion yen (as of April 2023)*7 In parentheses, revenues are calculated from CAGR.
*8 For an analysis of changes in adjusted EBITA (FY2022-FY2024), refer to page 4 of Investor Day CFO Session.

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Introduction
Materiality

Mid-term Management Plan 2024

Value Creation

Transformation

Corporate Initiatives for Sustainability GrowthBusiness Strategies

Human Resources Strategy

Governance

Financial Strategy

CFO Message

Hitachi Integrated Report 2023

DataSector Strategies

Revenues and Profits Growth Driven by Lumada
The expansion of the Lumada business leads our revenues and profits growth. We aim toincrease the Lumada business to one-third of revenues and more than 40% of profits of Hitachi
overall in fiscal 2024 (fiscal 2022 Lumada business: Revenues 1,960.0 billion yen, Adj. EBITA
margin 14%. fiscal 2024 Lumada business: Revenues 2,650.0 billion yen, Adj. EBITA margin16%). Lumada’s customer co-creation framework has generated many customer cases andsolutions. We use the customer cases and solutions repeatedly to increase profitability. We
are also striving to increase the service business and recurring ratio with large-scale assets
acquired through M&A.
For details of the digital strategy, please refer to page 23.

Revenues (Trillions of yen)*1
LumadaNon-Lumada

21%

Adj. EBITA (Trillions of yen)*1

Lumada ratio*

26%

29%

7.6

7.8

2LumadaNon-Lumada
41%

38%

33%

Lumada ratio*2

26%

0.96

8.0

6.7

1.38

1.96

2.28

2.65

FY2022

FY2023(forecast)

FY2024(MMP target)

0.80

0.72

0.66

FY2021

44%

0.17

0.27

0.33

0.42

FY2021

FY2022

FY2023(forecast)

FY2024(MMP target)*1 Revenues and profit of listed subsidiaries and Hitachi Astemo are subtracted, and equity in earnings of affiliates are added to results andplans of FY2021-FY2024.
*2 Equity in earnings of Hitachi Construction Machinery is classified into Lumada; that of Hitachi Astemo is classified into Non-Lumada.

Capital Allocation Policies
Hitachi will achieve sustainable growth by well-balanced allocation of generated cash to growthinvestments and shareholder returns. We will focus on Digital, Green and Innovation as areasfor growth investments, and we strictly apply our criteria for financial decisions. When we findgood growth investment opportunities, we apply financial leverage flexibly, combining both theexisting D/E ratio target of 0.5x and net debt/EBITDA 1-2x.
We consider both 50% of core FCF and 50% of net income for total shareholder returns.
For Hitachi, the executing of shareholder returns based on medium- and long-term businessplans and achieving growth in total shareholder return (TSR) through achieving appropriate
stock prices are important management issues. Under this policy, we examine the continuing
payment of dividends and share buybacks and returning earnings generated from businessgrowth to shareholders.
For details about our financial strategies, please refer to page 29.

Cash generation

Capital allocation

Apply financial leverage flexibly,
combining both the existing D/E ratio
target of 0.5x and net debt/EBITDA 1-2x.

2.3 trillion yen
Asset sales

1.1

trillion yen

Core FCF

1.2

trillion yen

Growthinvestments≥1.4
trillion yen

Shareholder
returns0.8-0.9
trillion yen

MMP 2024(3-year cumulative)

Investment criteria• Profitability: Adj. EBITA 12%+• Asset efficiency: ROIC 10%+Consider returning 50% of core FCF
and 50% of net income• Dividends: Stable dividends based on business growth• Share buybacks: Implement based on funding
demands and the business environment, etc.

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