The Hitachi Group’s Growth Strategy

Story of Value Creation in the Mobility Sector
Global population is growing and urbanization is advancing rapidly, so that the proportion of people living in urban areas isexpected to rise to 68% by 2050, from around 55% today. In addition, the negative impact from climate change is causing
environmental, economic and social damages. Against this backdrop, in the mobility realm, the demand for clean and highly
efficient mobility solutions such as one for faster and more environmentally friendly intercity transportation and alleviation ofdependency on car use within city centers, and smart solution to manage the people flow in high-rise buildings.

Results and Targets
Revenues (¥ billion)/
Overseas revenue ratio (%)
82%

80%

Building Systems

616.5*1

9.8%

8.1%

55%

1,270.0
650.0*1

124.8
100.2

61.8

46.3*1

*1

620.0

54.0

63.0

FY2018 (Results)

FY2021 (Target)

FY2018 (Results)

FY2021 (Target)

142.6

80.8*1

78.5

13.6%

13.1%

Building Systems BU
Railway Systems BU*1 Figures for Railway Systems BU include the control systems business, which is posted in the IT segment.

Our Ideal under the 2021 Mid-term Management Plan

51.1%

billionericas
Am9.9%

37.9%

Interlocking

ETCS*

Satellite Train Control

Driverless

CBTC*

Facility Control

Components
TMS** CBTC：Communications-Based Train Control
TMS：Traffic Management System
ETCS：European Train Control System

Elevators

Rolling StockJapanA

Railway Systems
Business Unit
M

EA

62.

%
27.8

FY2021 (Target)

FY2021 (Target)

57.7%

Moving walkways

E

FY2018 (Results)¥616.5

Sale / Manufactureof E&E

Escalators

Building equipment management services

Signalling& Turnkey
FY2018 (Results)

64.1

E&E Modernization

Building Systems
Business UnitFY2018 Revenues*154.3

42.3%

CPA

135.1

BuildingServicesbillion

ROIC

11.2%

10.9%

¥621.6
E&E maintenance services

621.6

EBIT (¥ billion)/EBIT ratio (%)

APAC/Others 4.4%

FY2018 Revenues

China 52.5%

1,238.1

Adjusted operating income (¥ billion)/
Adjusted operating income ratio (%)

J a p a 4 3.1 %n57%

Railway Systems

Principal Products and Services

Very High Speed
Shinkansen
CommuterIntercity
LRV
Metro
Monorail
Components

3%Service &Maintenance11.0 %RS Maintenance
RS Refurbishing
Signalling Operation &Management
Asset Management

Growth Strategies under the 2021 Mid-term Management Plan

Providing People with Safe, Secure and Comfortable

In the Building Systems Business Unit, we expand technologicallyTransportation Services

advanced and competitive products and services, which include theIn the Mobility Sector, we deliver social value by providing people withworld’s fastest elevator (according to our research as of September

safe, secure and comfortable transportation services, and products2019) with the speed of 1,260 meters per minute, and Lumada

and services for urban spaces such as buildings. At the same time, wesolutions leveraging Hitachi Group’s robust resources on digitalcreate environmental value by realizing transportation services thattechnologies such as Internet of Things (IoT) and artificial intelligence.

have a low environmental impact and contribute to, for example,

Meanwhile, in the Railway Systems Business Unit, we realize thereducing CO2 emissions.

differentiation from other competitors by providing total solutions
spanning the manufacture of rolling stock to operational control, IC
ticketing and seat reservation system, and solutions utilizing IoT anddigital technologies for operation optimization, driverless operationand digital ticketing.

60

Hitachi Integrated Report 2019

Building Systems Business Unit

operation, and digital ticketing utilizing location information and other

The market for elevators and escalators (E&E) is expected to continue

data to realize automatic payments via smartphones. In addition to

expanding steadily. Particularly high rates of growth are expected in thefurther reinforcing services and solutions such as these, we will

Asian market, especially in India, which has the world’s second largest

augment the value for customers and provide safe, secure andmarket scale. In the largest market, China, the expected growth area

comfortable transportation services.

has been shifted from new installation to maintenance andIn January 2019, we acquired Ansaldo STS (now Hitachi Rail STS),

modernization of E&E. In Japan, the demand for E&E modernization is

an Italian leader in railway signaling systems, converting the company

expanding and the expectation for new solutions leveraging digitalto a wholly owned subsidiary and delisting it. In addition to further

technologies for workers and tenants in buildings is increasing.

enhancing our strength in the signaling and turnkey businesses, we

Against this backdrop, the Building Systems Business Unit has

expect this move to generate synergies through organizational

achieved growth globally based on its sophisticated products andoptimization and increased production efficiency, allowing us to further

technologies, which are exemplified by the top share (Hitachi research)

expand our global operations.

of order received in fiscal 2018 by unit in China, the world’s largest
market for new installation of E&E, accounting for more than 50% of
the total. Going forward, we plan to combine manufacturing and salesof E&E with building services to realize business growth and increased
profitability. To this end, we are stepping up investment centering on
digitalization. Specifically, we are accelerating investment in a global
control center that functions as a basement for providing leading-edgebuilding services, such as a sophisticated remote monitoring service
which utilizes digital technologies and a solution which realizes efficientand comfortable movement by using sensors in buildings andanalyzing the flow of people.
In addition, in Asia and Middle East, where demand for new

Value Co-Creation in the Mobility Sector

installation of E&E is surging, we are deploying our sales and service
bases, and expanding our business through maximizing the capacity

In the Building Systems Business Unit, we are working on enhancing ourutilization of factories in China and utilizing sophisticated maintenanceproducts and services through the analysis of the data gathered fromand modernization technologies which we have developed in Japan.

elevators, escalators and building equipment, increasing added value ofmaintenance services such as sophisticated remote monitoring andcontrol, providing data to building owners and managers, and creating
new businesses leveraging Lumada.
By positioning the global control center as a core competence anddeploying new solutions leveraging Lumada to the customer base wehave built in E&E business, we aim to develop our business further andrealize the expansion of building service business other than E&E anddifferentiation from manufacturers specializing in E&E.
In the Railway Systems Business Unit, for Denmark’s Copenhagen

Railway Systems Business Unit

Metro we are working on the maximization of transportation capability,

Demand in the railway market is expected to expand throughout thecongestion alleviation and cost reduction through detecting demand

world thanks to economic development. Growth, mainly for rollingbased on the number of people waiting at station platforms and realizing

stock, signaling system and control system, is expected in Europe,

autonomous and flexible operation. With core products such as this, weMiddle East, Africa and Americas.

aim to expand business in the urban transport market in Europe, whereIn fiscal 2018, the Railway Systems Business Unit set records forbusiness volume is the highest in the world. Demand is also expected torolling stock deliveries and orders, revenue and adjusted operating

flourish in Americas. There, we aim to secure growth opportunities byincome ratio, highlighting our efforts to build a firm global business

utilizing existing manufacturing bases and leveraging our market

platform. In the future, we intend to move forward with rolling stock,presence in services and maintenance.

signaling system and turnkey business as core businesses. We willIn the Mobility Sector, through social innovation businesses such asalso concentrate investment in digital technologies and IoT to enhancethese, we will provide people around the world with products andour competitiveness further. We are encouraging our Dynamic

services that are safe, secure, comfortable and environmentally friendly.

Headway, which optimizes operations based on demand, autonomous

61