Infrastructure Systems
Business Strategy
Infrastructure Systems Company
Hitachi Plant Technologies, Ltd.
Hitachi Industrial Equipment Systems Co., Ltd.
Hitachi IR Day 2012
June 14, 2012

Yutaka Saito
Senior Vice President and Executive Officer,
President & CEO, Infrastructure Systems Group,
President & CEO, Infrastructure Systems Company,
Hitachi, Ltd.
© Hitachi, Ltd. 2012. All rights reserved.

Infrastructure Systems
Business Strategy
Contents
1. Business Overview
2. Market Trends

3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets

5. Conclusion© Hitachi, Ltd. 2012. All rights reserved.

1-1 Infrastructure Systems Business Concept
Drive Social Innovation Business,
which provides social infrastructures supported
by highly efficient and highly reliable IT technology

Social Innovation Business
Solutions and services
Optimize operation andmanagement ofsocial infrastructureCore components
Lead in energy saving,
resource saving andmaterials innovation

Engineering
Integrate informationand control systems andplant equipments© Hitachi, Ltd. 2012. All rights reserved.

3

1-2 Business Domains of Infrastructure Systems
Provide total solutions globally for social infrastructure
Infrastructure solutions business
Smart cities

Plant systems business

Smart grids
Smart mobility
Intelligent water systems

Water treatment
Transportation

Oil & gas Chemical plants
Electric control systems
for steel plants

FY2011

Solutions andservices

Infrastructure
Systems Company *Hitachi Plant
Technologies

Information systems

Operation and services

769.7 billion Yen
Overseas revenue ratio 19%
Engineering
Monitoring control systems

Hitachi Industrial
Equipment Systems

Power distribution systems

Controllers

Design and construction

Components
Inverters

MotorsCompressors

Large-sized components

Components business*The Infrastructure Systems Company was established in April 2012 by reorganizing the former Information & Control Systems Company, the former Social &Industrial Infrastructure Systems Company and Hitachi Plant Technologies
A certain amount of revenues of the Infrastructure Systems Company are included in the Information & Telecommunication Systems
Company, the Power Systems Company and the Rail Systems Company© Hitachi, Ltd. 2012. All rights reserved.

4

Infrastructure Systems
Business Strategy
Contents
1. Business Overview
2. Market Trends

3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets

5. Conclusion© Hitachi, Ltd. 2012. All rights reserved.

2-1 Market Trends—Expectations for Social Infrastructure
Societies experience simultaneously upgrading social infrastructure and developing
large-scale urban and industrial areas

Issues of Social Infrastructure

Global Smart City Market Forecasts(cumulative)

Sustainability

Source: Comprehensive Guide to Smart Cities of the World, Nikkei BP(trillion Yen)

Quality of Life

Compactness

Developed countries

4,000

Eco-Friendly

Social Infrastructure

Emerging countries
3,000
2,000
1,000
0

Developed countries
Aging society
Old infrastructure

Emerging countries
Increasing urban

populations
Infrastructure
investment

Resource, energy and water shortages
CO2 emissions increase

2015

2020

2025

2030

Upgrading of social infrastructure
in developed countries(e.g. Smart cities)
Large-scale urban development andconstruction of power, water andindustrial plants in emerging countries© Hitachi, Ltd. 2012. All rights reserved.

6

2-2 Ideal Social Infrastructure
Realization of ecological friendly, safe, secure and comfortable society~fusing knowledge and experience of information, control and infrastructure business~
Government

Education
Healthcare andMedicalFinancial

Safe, secure andcomfortable society

Smart industry
Smart grids

Intelligent water systems

Smart mobility

Industry

Water

Sophisticated with IT
EnergyTransportation

Control
Information control andcoordination(EAM, MDM, GIS, …)Highly reliable cloudcomputing services
EAM:Enterprise Asset Management
MDM:Meter Data Management
GIS:Geographic Information System

Utilizing big data

Information© Hitachi, Ltd. 2012. All rights reserved.

7

2-3 Competitive Environment
Provide total solutions fusing knowledge of IT and social infrastructure
Solutions and services
Components

Engineering

Control

Information

Siemens
ABB
IBM

Collaborating Hitachi
Information &Telecommunication
Systems Company

Infrastructure Systems Company

Hitachi

Hitachi Plant Technologies
Hitachi Industrial Equipment Systems

Groups in a wide rangeof business fields

The three companies areworking together toprovide one-stop totalsolutions by fusing

Power Systems Company
Rail Systems Company

knowledge of IT andsocial infrastructure© Hitachi, Ltd. 2012. All rights reserved.

8

Infrastructure Systems
Business Strategy
Contents
1. Business Overview
2. Market Trends

3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets

5. Conclusion© Hitachi, Ltd. 2012. All rights reserved.

3-1 Business Policy and Growth Strategy
Globally provide total solutions, including operation services, by making intelligent use of IT
FY2015Growth Strategy

Components

Infrastructure
Solutions
Business■ Provide optimized solutions and services for the supply anddemand of energy■ Develop the business field of the smart city, including water
treatment and mobility through developing new solutions andconducting demonstrations

Plant Systems
Business■ Pursue turnkey solutions, which including operation andservices(Sea water desalination, industrial plants)■ Enter growth fields through leveraging core technologies andcomponents(Oil & gas, electric control systems for steel plants)■ Provide plant information systems for supporting operationand management

Components
Business■ Strengthen product lineup of high reliability, high-speed
and great capacity■Strengthen top-runner products for saving energy andresources

Infrastructure
Solutions

1 trillion Yen
Overseas revenue
ratio 33 %Plant Systems

FY2011769.7 billion Yen
Overseas revenue
ratio 19%

Strengthen business base
( Invest in key development areas and pursue the Hitachi Smart Transformation Project )© Hitachi, Ltd. 2012. All rights reserved.

10

3-2 Infrastructure Solutions Business

Infrastructure
Solutions

Provide next-generation solutions and services that connect social infrastructure and people with IT
Water treatment

Intelligent water systems

Transportation

Smart mobility

Powergeneration

Smart grids
Power transmission

EMS(center-fed system)

Wind power

Power distribution
automationPower
distribution

CEMS
Solar power

Users

Retail and services

User service systems
Metering systems
変電所
Distributed powersourcesmanagement

Demand response

HEMS

BEMS

Aggregator

EV-EMS

Information control and coordination
Analysis and
GIS
EAM
MDM
simulation

 Provide highly reliable control systems to ensurestable supply of electricity

 Create smart cities throughdeveloping water treatment
and transportation systems

FEMS

 Offer energy management solutions andservices by utilizing advanced IT

EMS:Energy Management System, CEMS ： Community Energy Management System, EV:Electric Vehicle,
HEMS:Home Energy Management System , BEMS:Building Energy Management System , FEMS:Factory Energy Management System© Hitachi, Ltd. 2012. All rights reserved.

11

for Optimizing
3-2 Solutions
Energy Supply and Demand (1)Infrastructure
Solutions

Establish demand response (DR) business model to optimize power supply and demand
Testing DR technology at smart grids
demonstration project in Hawaii(November 2011 to March 2015)

DR through direct control in Hawaii
 Absorb surplus electricity(charging/water heating) Control when there is a sudden change
in power output(shut down unnecessary equipment)

 Optimize the energy supply-demand balance assuming
widespread use of renewable energy
 Direct control of users’ equipment based on contracts

Solar power
generation

μＤＭＳ

Create an aggregator business modelthrough collaboration with power operatorsand partners

 Load leveling during
EV recharging time

 BEMS aggregator business TEPCO/Peak demand restriction business plan

DR:Demand Response, DMS:Distribution Management Systemaggregator:Operator providing energy-saving services by getting power consumption

Control request

Power operators

Develop total solutions business extending
from supply-demand management
systems to services

EV recharger

Aggregator business scheme(adopted by the METI in April 2012)(Signed in May 2012)

Water heater

Hitachi(Total supplydemand plan)
Aggregator
Aggregator

Serviceprovision
Visualization,
power-saving
consulting,automated
control

Buildings

Homes

Factories

Demandresponse
agreement© Hitachi, Ltd. 2012. All rights reserved.

12

for Optimizing
3-2 Solutions
Energy Supply and Demand (2)Infrastructure
Solutions

Establish a distributed energy management system with the aim of locally generating
electricity and heat for local consumption
Joint feasibility study business for
Sino-Singapore Tianjin Eco-City
 METI feasibility study for promoting
infrastructure-related system exports(October 2011 to March 2013)
 Locally generate electricity and heat energy for
local consumption by making full use of distributed
renewable energy (solar power, biogas)

The Japan Research Institute:
total coordination
Hitachi: supply-demand management,
sophisticated demand control system
investigation (CEMS)
Mitsubishi Heavy Industries: supply-sidesysteminvestigation

Develop an energy managementbusiness of both electricity and heat
supply for cities and industrial zones

Achievements at Sino-Singapore Tianjin Eco-City
 Introduced HEMS system(Stage 1 : 450 homes/to March 2012)
 Provided battery storage system for micro grids
demonstration by Tianjin Electric Power Corporation(60 kWh/September 2011)

Sino-Singapore Tianjin Eco-Citystage 5 development area
Theme park
(Installed PV
on roof)

Heat supply
equipment
Sewagetreatment
facility

Housing area
approx.
10,000households

Commercial
facilities

 Utilizing various distributed energy sources© Hitachi, Ltd. 2012. All rights reserved.

13

of
3-2 Development
Water Environment Solutions

Infrastructure
SolutionsIntelligent water systems for effectively using water resources and improving management efficiency
Effectively use treated water for reuse

Application model for intelligent water systems

Optimize management of water resources

Water resources (rivers/seas) Devise comprehensive plans taking into account matterssuch as water demand, energy saving, cost andRiver surface water

environmental impact
 Utilize the buffer function of reservoirs and theflexibility within water distribution systems

Wide-area management
 Create network for multiple regions and cities Realize wide-area water management

Sea water

Water purification systems/
sea water desalination systems

Water purification

Treated waterIndustrial water

drinking water

Plant

Homes

SewageRecycled
Industrial
Industrial
wastewater
water
wastewaterIndustrial water
Agricultural
Sewagewastewater
treatment
treatment

DB

Make proposals to improve efficiency of waterbusinesses in Japan and globally expand thewater environment solutions(Smart community business centered on Dahej sea
water desalination project and Maldives water
management business)

Treated water
Water distribution
control system
Smart meter system

Advanced sewage
treatment systems• Water management systems• Management systems
City

DB

Advanced sewage
treatment systems

City

DB

DB

DB

© Hitachi, Ltd. 2012. All rights reserved.

14

Infrastructure
Solutions

3-2 Realizing Smart Cities

Contribute to the creation of safe and secure cities, especially in regard to energy and mobility
Promote demonstration projects
EV bus operation model project(April 2012 to March 2013)
 Test runs in city with help of Hino Motors and others
 Testing of recharging and operation andmanagement systems
 Adoption of inductive power supply system

Hitachi City future city model project・Aim to create an industrial city-type smart city
・Promote the introduction of renewableenergy and EV to save energy and ensure
energy supply in a disaster

Factory-led carbon reductions
Omika distributed EMS demonstration project(Start of 1st phase from July 2012)

・Save energy by optimizing plant energy use
・Build eco-conscious business in an industrial city
EV recharger

 Demonstrate systems to accommodate
electricity between hypotheticalcommunities built between works

A Works
FEMS
EV

Realize safe and secure cities with low carbon
emissions and that are resilient to disasters.
Develop smart city business.

Electric buses

D Works
FEMS

HEMS

Electric
fork lifts
EV

C Works FEMSB Works

FEMS© Hitachi, Ltd. 2012. All rights reserved.

15

3-3 Plant Systems Business

Plant systems

Provide total solutions leveraging IT, services, core technologies and components

IT systems

Services

Business
operation

Operation &maintenancePursue total solutions business,
including operation and services
 Sea water desalination,
reused water Water and sewage andwastewater treatment
 Total construction andservices for overseas
industrial plants

Provide plant information
systems for supporting
operations and management
 Plant EAM
 Knowledge management
 Operation automation

Maintenance support
systems

Components

Systems & EPC

Sea water desalination
plantsProcess compressors

Components
Oily water-treatment
facilities

EPC:Engineering Procurement & Construction
Oily water: Groundwater mixed with crude oil, and water injected into oil fields to extract crude oil

Expand growth fields leveraging
core technologies and components
 Oil & gas (offshore plants, LNG plants)
 Electric control systems for steel plants(hot-rolled)© Hitachi, Ltd. 2012. All rights reserved.

16

3-3 Providing Plant Turnkey Solutions

Plant systems

Develop the water business globally, including operations and services, as a “Japanese water major”
Business operation consortium model

India: Dahej sea water desalination business Develop a comprehensive water treatment business by
totally providing systems, EPC to operations andmaintenance, and business operation
Plant plan
Finance

Plant design

Construction

System design

Procurement

Developer

Bank

Basic plan and development

Operation andmaintenanceBusiness
operation

Smart community plan for
Dahej Special Economic Zone
Energy management in homes,
buildings and elsewhere

Customer
Finance

Investment Business operation company(EPC, operation andProvision of management, business operation)systems.

Hitachibusiness scope

Water supply
agreement

Hitachi Plan to establish a business operation company
in conjunction with ITOCHU and Hyflux in Singapore.

Recycle center

Wastewater

Treatment

Mega solar

Investment

Government

Tradingcompanies

Partners

Use the Dahej sea water desalination businessas a model for promoting businessin India and other emerging countries

Industrial-use
waterSupplyWastewater
Reuse

Sea water desalination plant Facility capacity: 336,000
m3/day (One of Asia’s largest)
 Begin supplying water in 2015

© Hitachi, Ltd. 2012. All rights reserved.

17

in Growth Fields
3-3 Expand
Leveraging Core Components

Plant systems

Provide total oil & gas solutions extending from oil and gas fields (on land or at sea) to LNG facilities

Respond to demand to reduce environmental impact
leveraging core technologies(Improve efficiency with motor-drive technologies, RO membrane water
treatment and IT)

Newcastle LNG Plant, Australia
Site plan

Lower costs and shorten delivery times by
packaging solutions
IT systems (wide-area management, plant monitoring and control)

Oil and gas fields

Pipeline

Gas treatment facilities
Oily water and other water
treatment facilities
Gas and water treatment
facilities

Power
generation
facilities
Substation
facilities

Motor-drive and power
Electronics facilities

Inverters
MotorsRefrigerant
Compressors

Plant facilities

Injection pumps

Booster compressors

High-pressure compressors

Electric-motor-driven
LNG plant packages

 Motor-driven plant(low cost, low environmental impact) Proposing a total plant package
in conjunction with Toyo Engineering

Floating Plants in Brazil (FLNG, FPSO)

DCS

Alliances

Process compressors

Expand oil & gas business through cooperation withpartners and local maintenance service networks
DCS:Distributed Control System , FPSO : Floating Production Storage and Offloading
FLNG : Floating Liquefied Natural Gas , RO : Reverse Osmosis First order for installingcompressors and water
treatment system for a
FPSO (September 2011)
RO membrane Responding to floating operations
water treatment(small, lightweight package solutions,vibration resistance, environment resistance)© Hitachi, Ltd. 2012. All rights reserved.
18

Advanced
3-3 Providing
Plant Information Systems

Plant systems

Continue developing solutions for visualizing andextracting knowledge from information relating to plant facilities
Enhance operations and maintenanceusing site information
Example of application tomaintenance operations
EAM
Site activities
knowledge
Maintenanceprogram

Work sheet

Information terminals
RFID

Plant maintenance work management systemusing tablet terminals

Feedback via
KPI
management

Structured
document

Sensing technologies

Performance
optimization

Equipments

 Plant operating information visualization
 Improvement of maintenance work efficiency(work instructions, work plan support)
 Unification of facility management(specifications, maintenance information)

Information upload and download
 Improve efficiency of site maintenance work, paperlessunify maintenance information, build know-how
Crane Doctor Cloud
Cloud service for crane monitoring, failure diagnosis
and facilities maintenance.
Provide high-value-added services based on cloud computing

Customer

HitachiDatacenterExtend to management support solutions(Improved efficiency of global operations,
Respond to aging society and lack of skilled workers)

Operatinginformation

Operation efficiency
improvement

EAM : Enterprise Asset Management , RFID : Radio Frequency Identification , KPI : Key Performance Indicators

Analyze

Accumulate
Service provision(monitoring, breakdown
diagnosis, analysis andimprovement information)

Use・Launched service in December 2011

© Hitachi, Ltd. 2012. All rights reserved.

19

3-4 Components Business

Components

Provide new technologies and components for making systems andplants more intelligent and adding value
Respond to need for higher reliability,
Leading in the fields of energy saving,
speed and capacity
resource saving and materials innovation

Information control platforms

Industrial-use transformers

Realize fault tolerance andhigh-speed processing(social infrastructure, large-scale plants)
CF-1000/FT
Fault tolerant (FT) systems

Industrial-use computers

Industrial-use wirelesscommunications
equipments

Power distribution andutility monitoring
equipments

Develop business in the areaof wide-area wireless to shortdistance wirelesscommunications,equipment control
and data collection

Realize real-time, detailed
monitoring and control function

PCS : Power Conditioning Subsystem

XSH series

Industrial inverters

High-reliability using PC architecture, andlong-term support(monitoring control, embedding inindustrial equipment)
HF-W7500/LX Model30

smartMODULE

Amorphous transformers
・Won 8th Eco Products Awards inNovember 2011
・Won Grand Prize for Energy Saving
Product in Eco-Products Category Super amorphous

H-NET

NE-S1 series achieves
simple operability and cost
performance with smallest
dimensions in industry

NE-S1 series

Power conditioners (PCS)Power conditioners for solar power
generation that realize an industryleading* power conversion ratio「BUY電ゲートウェイ」
Web
controllers*As of May 2012; Hitachi research© Hitachi, Ltd. 2012. All rights reserved.

20

3-5 Developing Global Growth Markets (1)Expand global business by promoting localization operations in growth markets
Improve customer-focused management
and services businesses by expanding
and enhancing the sales and service
networkDevelop solution businesses fitted withlocal needs by strengthening local
manufacturing and engineering

Accelerate business development throughalliances and M&As
Establish global “MONOZUKURI” network
through Hitachi Groups collaboration andIT utilization

●

●
●

●■

●
●●●
●●

■
●
● ■
●

■

■
■ ●■
●
■■■ ●
■
●
■■●
● ■
■
■
■
●

●
■●
■
●

●

Develop branches andplants in growing
Asian belt zone■● Manufacturing, engineering and service bases ●●(local subsidiaries)
 Sales bases (offices)
Infrastructure Systems Company
Hitachi Plant Technologies
Hitachi Industrial Equipment Systems■ 6 (6)■ 17 (4)■ 4 (3)* Figures in brackets indicate joint ventures with local
partners and investments

China

Asia

Americas

Europeandothers

Total

Hitachi Plant Technologies

3

8

2

7

20

Hitachi Industrial
Equipment Systems

69

88

53

98

308

● Hitachi, Ltd. ● Hitachi Plant Technologies, Ltd.
Overseas sales bases for Hitachi Industrial Equipment Systems Co., Ltd.
are omitted© Hitachi, Ltd. 2012. All rights reserved.

21

3-5 Developing Global Growth Markets (2)Develop regionally centered on emerging countries
Entering into the smart grid market startingfrom demonstration projects, and extend intobusiness projects(Projects in Spain and Hawaii and others)

South America

India

Enter into the Indian market by establishing
manufacturing, sales and service networks
in growing regions

North America/
EuropeChina

Develop regionally focused businesses,
water business, in cooperation
with leading companies
Expand business to the environmental
and energy-saving fields by bolstering
local production(power electronics business,
control systems business)

Enter oil & gas market by strengthening
service network
 Establish plant-use compressor after-sales
service framework through joint venture with
Mayekawa Manufacturing(Establish company before end of 2012)(Billion yen) Overseas Revenue Targets by Region

400

Middle East

Enter oil & gas market by strengthening
service network Signed corporate procurement agreement forcompressors with Saudi Arabian Oil Company(June 2011)
 Established plant equipment maintenancecompany (June 2012)

CPA:Corporate Procurement Agreement

300

China

200

India/Asia

100
0America/
Europe andothers

FY2011FY2015© Hitachi, Ltd. 2012. All rights reserved.

22

3-5 Developing Global Growth Markets (3)Full-scale entry into the Indian market by establishing manufacturing, sales and service bases
in growth markets[Revenue Target : over 50 billion Yen (FY2015) ]Construction and services

Delhi Mumbai Industrial Corridor project(Develop comprehensive industrial structure) Established construction and engineering base

(Established February 2012)

 Pursue regionally focused infrastructure business as a
Hitachi Group, including the water treatment, energy
And industrial fields

Offer integrated industrial plant construction andservices for Japanese companies advancing into India

Industry Begin local production of industrial power electronics products(Construction and engineering)

Gurgaon■■ Delhi(Hitachi India)(Commence operations at a plant in December 2012)
Increase orders for plant energy-saving and electric control
systems for steel plants with integrated manufacturing, sales, andservice organizations▲ Kolkata● Ahmedabad(Industrial systems control)(Electric control

◆●

Water
 Establish sea water desalination operating company
Extend business from sea water desalination including operations
and services to smart city projects

Energy Began operations at DCS engineering base (October 2011)
Pursue system solution business extending from thermal power
plant monitoring and control systems to smart grids

Dahej▲ Nagpur

Mumbaisystems for steel
plants)(Electric control systems
for steel plants)(Water business)

IT industry●
Bangalore(DCS)■ Sales▲ Maintenance● Manufacturing andengineering◆ Service© Hitachi, Ltd. 2012. All rights reserved.

23

3-5 Entering Global Growth Markets (4)Expand total solutions business deeply rooted in China[Revenue Target: over 70 billion Yen (FY2015 )]Cooperation with leading companies Participate in sea water desalination and sewage
treatment on Changxing Island in conjunction

with Dalian City(Currently conducting feasibility
studies)Dalian(DCS/power electronics)◆★

Beijing ■ ●(Electricity grids) Xuchang★ Tianjin● Wuxi (Large pumps)(Power electronics/printed-circuit board
manufacturing equipment)●● Shanghai●
Nanjing● (Steel plant(Construction and engineering)
Suzhouwith Dalian Dongda Group(In negotiations on an official agreement)

Expand local production

control systems)●◆

Chengdu(Power electronics)

 Participate in wastewater treatment and waterreuse business in the Dalian National
Eco-Industrial Demonstration Park in conjunction★
Guangzhou

 Increase production capacity for power
Electronics products to respond market needs
for improved environmental performance,energy saving, and efficient plants
・Beijing: Large-scale solar PCS
・Chengdu: Large inverters for plants■ Sales● Manufacturing and engineering★ Smart cities Major projects◆ Major water business projects

・Nanjing: Small and medium-sized inverters forindustrial equipments© Hitachi, Ltd. 2012. All rights reserved.

24

3-6 Strengthen Business Base
Investment in key development areas and pursue Hitachi Smart Transformation Project
Investments in key
development areas

Invest 50% of R&D budgets into strategic fields

 11 kW rare earth-free motor
Highest standard in IEC efficiency guidelines (IE4)

 System operation technologies for overall optimization
Achieved motor efficiency of approx. 93%(Information control and coordination environment, DR technologies,
Current induction motor
EAM)
Achieve
 Energy-related products(Large power converters, rare earth-free products)
resource
 Environment and natural resource development-related fields
savings and(large-scale sea water desalination, oily water treatment,high efficiency
11 kW permanenthigh-pressure compressors)
magnet synchronous
motor

Achieve higher earnings

Execute Hitachi Smart Transformation Project
Achieve cost structure reforms through cooperation with all Hitachi Group Strengthen “MONOZUKURI” capabilities(Reform manufacturing processes in Japan; Expand manufacturing capabilities overseas; Develop modularizationof control software) Globalize value chain(Localize manufacturing, sales and services, and establish global IT management platform) Develop global human capital, system engineers with IT and infrastructure expertise

For improvement of profitability

Transform into a global major player© Hitachi, Ltd. 2012. All rights reserved.

25

Infrastructure Systems
Business Strategy
Contents
1. Business Overview
2. Market Trends

3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets

5. Conclusion© Hitachi, Ltd. 2012. All rights reserved.

4 Business Performance Trends and Targets
33%
Revenues(Billion yen)

Operatingincome ratio(%)
Overseas ratio (%)

1,000
17%

23%

19%
769.7

790.0

715.5

500

1,000
Infrastructure
Solutions
Business
Operatingincome ratio(%)

4.0%

10

Over
7.0%

4.1%

5
Plant Systems
Business

2.2%

Components
Business0

FY2010FY2011FY2012FY20150•A certain amount of revenues and operating income of the Infrastructure Systems Company are included in the Information &Telecommunication Systems Company, the Power Systems Company and the Rail Systems Company© Hitachi, Ltd. 2012. All rights reserved.

27

Infrastructure Systems
Business Strategy
Contents
1. Business Overview
2. Market Trends

3. Business Policy and Growth Strategy
4. Business Performance Trends and Targets

5. Conclusion© Hitachi, Ltd. 2012. All rights reserved.

5 Conclusion

FY2015 Targets
Revenues 1 trillion Yen
Overseas revenue ratio 33%
Operating income ratio over 7%
Drive Social Innovation Business,
which provides social infrastructures
supported by highly efficient and highly
reliable IT technology© Hitachi, Ltd. 2012. All rights reserved.

29

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 notdirectly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions whichindicate 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 materially from 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 “forwardlooking 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 notlimited 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 levels of demand in the major industrial sectors Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;
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;
the potential for significant losses on Hitachi’s investments in equity method affiliates;increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Digital Media &Consumer Products segments;
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 acceptancefor such products;
rapid technological innovation;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;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,
or shortages of materials, parts and components;
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
shortages of materials, parts and components;
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 restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitivenessand other cost reduction measures;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 alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain
key products;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates 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 earthquakes, tsunamis or other natural disasters;
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;
uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its significant employee benefit-related costs; anduncertainty as to Hitachi’s ability to attract and retain skilled personnel.
The factors listed above are not all-inclusive and are in addition to other factors contained in other materials published by Hitachi.

© Hitachi, Ltd. 2012. All rights reserved.

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© Hitachi, Ltd. 2012. All rights reserved.