Hitachi : Overview of Strategic Direction

Hitachi Investor Day 2021

Overview of Strategic Direction

June 8, 2021

Keiji Kojima

Executive Vice President and Executive Officer

General Manager of Smart Life Business Management Division [Planned to be appointed as President & COO on June 23, 2021] Hitachi, Ltd.

© Hitachi, Ltd. 2021. All rights reserved.

1. Hitachi's Vision

Create social, environmental and economic value through the Social Innovation Business and ensure sustainable growth and profitability to return the benefits to stakeholders

Resolve the issues faced by customers and society through

the integrated provision of OT × IT × Products

OT	×	IT	×	Products
Digitalize tacit	Lead the digitalization	Expand globally by
knowledge	of customer business	leveraging OT and IT
on-site and use AI		processes		through
to ensure an advantage		through co-creation		strategic collaboration

© Hitachi, Ltd. 2021. All rights reserved.

1

2. Activities during the 2021 Mid-term Management Plan

Strengthen the OT/Products business portfolio to expand

the Lumada business globally, with the goal of becoming a global leader

in the Social Innovation Business

Strengthen the IT business system in stages, working towards the global development of Lumada

Expand the Lumada	Architecture	Domestic co- creation	Global IT platform	Ecosystem	Global co-creation
business	Lumada Launch	Expand	Vantara	Alliance	Acquisition of
(IT)
co-creation-type SI	Launch	Program	GlobalLogic
	(2016)	(2018)	(2020)	(November 2020)	(planned for July 2021)

Acquire OT/Products and customer channels through M&A activities and the establishment of JV

Strengthen the	Industry	Healthcare	Energy	EV	Overseas home appliances
business portfolio	JR Automation	Hitachi	Hitachi ABB	Hitachi	JV with Arçelik
(OT/Products)
High-Tech	Power Grids	Astemo
	(2019)	(May 2020)	(July 2020)	(January 2021)	(planned for July 2021)

© Hitachi, Ltd. 2021. All rights reserved.

2

3. Towards Continued Growth

Growth

Growing with digital technology

Stable adjusted operating income over 1 trillion yen A half of overall profit to be earned

by Lumada business

ESG

Deepening ESG management

Become one of the world's leading companies in D&I, environmental management and corporate governance

Returns

Returning of benefits

Become a more attractive company for stakeholders

(employees and shareholders)

Hitachi's Vision for 2025

Environment	Resilience		Security & Safety
Support the decarbonization of	Support swift recoveries from natural	Support healthcare in an aging society
social infrastructure through	disasters, pandemics and cyberattacks	through measurement and analysis x digital
environmental product x digital technologies	through digital technologies	technologies
Business fields	Business fields		Business fields
Electrification/digital grid/railway	Financial/public/industry/logistics/cyber security	In-vitrodiagnostics/particle-beam radiation
therapy/pharmaceutical solutions
Expand R&D investment to accelerate innovation	Future R&D investment: 1.5 trillion yen (over three years)

D&I: Diversity & Inclusion

© Hitachi, Ltd. 2021. All rights reserved.

3

4. Priority Measures during the Next Mid-term Management Plan

Increase enterprise value with assets acquired through large-scale M&A

Simplify

Digitalize

Globalize

Simplified management

Digitalized management

Globalized management

Improve human resources/asset

value

Increase speed of transformation

Create value in regions, and grow

⚫ Visualize the results of IT x OT x

⚫ Strengthen DX of headquarters

⚫ Construct digitalized global

Products through the Lumada

functions such CRM, shared

headquarters

business

services, etc., and enhancement of

⚫ Incorporate the shared services of

⚫ Management combining similar

risk management

Hitachi ABB Power Grids into the

type of business and operations

⚫ Accelerate growth in each sector

common global platform

⚫ Clarify competitive benchmark

by leveraging GlobalLogic's

⚫ Increase the ratio of female and

customer co-creation capabilities

companies

non-Japanese in executive officers

⚫ Expand cloud-based service

and corporate officers to 30%

business

each (2030)

DX: Digital Transformation, CRM: Customer Relationship Management

© Hitachi, Ltd. 2021. All rights reserved.

4