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© Hitachi, Ltd. 2016. All rights reserved. Anand Singh, Deputy Managing Director Hitachi Australia Pty Ltd July 28, 2016 Outline of Hitachi

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Page 1: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Anand Singh, Deputy Managing DirectorHitachi Australia Pty Ltd

July 28, 2016

Outline of Hitachi

Page 2: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Contents

1

1. Overview of Hitachi

2. Hitachi in Australia

3. Future of Hitachi

Page 3: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Contents

2

1. Overview of Hitachi

2. Hitachi in Australia

3. Future of Hitachi

Page 4: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 3

1-3. Corporate Foundation

Founder Namihei Odaira Original repair shop in Ibaraki (1910)

Founded in 1910 as a machine repair shop at Kuhara Mining

Company in Hitachi City, Ibaraki Prefecture, Japan

(Incorporated in 1920)

Hitachi founding spirit: Harmony, sincerity, pioneering spirit

Corporate credo: Contribute to society through the development

of superior, original technology and products

Ibaraki Prefecture

Page 5: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 4

1-4. Hitachi Group Identity

Hitachi delivers innovations that answer society’s challenges. With our talented team and proven experience in global markets, we can inspire the world.

Hitachi’s Vision

Throughout its 100 year history, the Hitachi Group has passed on its Mission and its Values to generations of employees and external stakeholders.The Vision has been created based on the Mission and the Values. It is an expression of what the Hitachi Group aims to become in the future.

Page 6: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

1-5. Segment Constitution (FY2015)

5

10%

6%

19%

14%

3%

11%

21%

7%

9%Revenues

10,034.3 billion yen

(US$88,799M)

■ Information & Telecommunication Systems

■ Social Infrastructure & Industrial Systems*1

■Electronic Systems & Equipment

■Construction Machinery*1: Effective on April 1, 2015, the "Power Systems" became part of the "Social Infrastructure & Industrial Systems. "*2: Hitachi Transport System, Ltd. which is included in "Others" became equity-methods affiliate of Hitachi, Ltd. on May 19, 2016.*3: Hitachi Capital Corporation which constitute of "Financial Services" is planned to become equity-methods affiliate

of Hitachi, Ltd. in August, 2016.

■High Functional Materials & Components

■Automotive Systems

■Financial Services *3

■Smart Life & Ecofriendly Systems

■Others

(Logistics and Other services) *2

Page 7: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 6

1-6. Segment introduction(1)

<Main products & Services>■Systems Integration■Consulting■Cloud Services■Servers■Storages■Software■Telecommunication Systems■ATMs

Information& Telecommunication Systems

Page 8: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 7

1-6. Segment introduction(2)

<Main products & Services>■Industry and Distribution Solutions■Water Treatment Solutions■Industrial Machineries ■Elevators■Escalators■Railway Systems■Nuclear Power Generation Systems■Renewable Energy Power Generation Systems■Transmission & Distribution Systems

<Main products & Services>■Semiconductor Manufacturing

Equipment■Test and Measurement Equipment■Advanced Industrial Products■Medical Equipment■Power Tools

Social Infrastructure& industrial Systems

Electronics Systems& Equipment

Page 9: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 8

1-6. Segment introduction(3)

<Main products & Services>■Hydraulic Excavators■Wheel Loaders■Mining Equipment

<Main products & Services>■Semiconductor and Display-

Related Materials■Circuit Boards and Materials■Automotive parts (plastic molding etc.)■Energy Storage Devices ■Specialty Steels■Magnetic Materials and Components■High Grade Casting Components and Materials■Cable Materials

Construction Machinery

High Functional Materials& Components

Page 10: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 9

1-7. Global Expansion* (FY2015)

■Revenues: 951.1 billion yen

■Number of companies: 194■Number of employees: 20 thousand

* Revenues: FY2015, Number of companies and employees: As of end of FY2015

Asia(incl. China)

China

North America

Other Areas

Japan

Europe

Revenues:10,034.3 billion yen/Number of companies: 1,056/Number of employees: 335 thousand

■Revenues: 1,055.5 billion yen

■Number of companies: 180■Number of employees: 47 thousand

■Revenues: 5,231.5 billion yen

■Number of companies: 262■Number of employees: 187 thousand

■Revenues: 1,280.3 billion yen

■Number of companies: 112■Number of employees: 21 thousand

■Revenues: 2,112.3 billion yen

■Number of companies: 399■Number of employees: 95 thousand

■Revenues: 459.0 billion yen

■Number of companies: 89■Number of employees: 10 thousand

Revenues: 4,802.7 billion yen/Number of companies: 794/Number of employees: 147 thousand

Revenues: 5,231.5 billion yen/Number of companies: 262/Number of employees: 187 thousand

Total

Outside Japan

Japan

($USD46,297M)

($USD11,330M)

($USD8,417M)

($USD18,693M)($USD4,062M)

Page 11: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Contents

10

1. Overview of Hitachi

2. Hitachi in Australia

3. Future of Hitachi

Page 12: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 11

9 Companies in Australia

• Hitachi Australia Pty Ltd

• Hitachi Construction Machinery (Australia) Pty Ltd

• Hitachi Data Systems Australia Pty Ltd

• Ansaldo STS Australia A Hitachi Group Company

• Hitachi Power Tools Australia Pty Ltd

• Clarion (Australia) Pty Ltd

• Hitachi Transport System (Australia) Pty Ltd.

• Wenco Systems (Fleet Management Systems)

• Hitachi Consulting Australia

Consolidated Revenue : AUD $1.80 Billion

Number of Employees: ~2000

Hitachi in Australia - Overview

Page 13: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Hitachi in Australia - Overview

12

Consulting

Ansaldo STS

Hitachi Rail

Components

Industrial Equipment

Mining Solutions

AV Systems

Infra & Power

Clarion Australia

Information

Technology

Transport Systems

Hitachi Construction Machinery

Wenco

Power Tools

Data

Systems

Hitachi in

Australia

Page 14: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Hitachi Affiliation with Australia

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Melbourne Silver Liner : 348 cars Clyde & Hitachi 1971~81

New Zealand : Class TR shunting tractor 6 DHLs & 14 cars 1971~

Queensland : Electric Locomotive 86 cars Comeng & Hitachi 1986~

Queensland : Electric Locomotive 22 cars Clyde & Hitachi 1994~

Queensland : Tilting EMU 12 cars EDI & Hitachi 1996~97

New South Wales: Traction & Aux. Electric Packages for Double Deck Trains

Operator: Sydney Trains Configuration: 312 Traction packages for 624 cars (78 train sets)

(Supplied under Joint Venture with Downer Rail)

HAUL

Office

Page 15: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Contents

14

1. Overview of Hitachi

2. Hitachi in Australia

3. Future of Hitachi

Page 16: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Four focus business domains

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Power・Energy Urban

Finance・Public・

Healthcare

Industry・Distribution・

Water

Accelerate collaborative creation with customers

through the advanced Social Innovation Business

An Innovation Partner for the IoT Era

2-1. Hitachi Moving Forward

Page 17: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved. 16

Front

社会イノベーションのコア

産業機器、自動車部品、材料等

Strengthening focused areas for expansion of the Social Innovation Business

Platform

Products

Strengthening Lumada

Expanding of Industrial products and materials businesses

Investment

focus

Investment

focus

・Strengthening grid and engineering

・Strengthening engineering

・Predictive Maintenance

・Optimized Factory

・Strengthening healthcare informatics

・Development of urban solution

・Expansion of the rail business area

Power / Energy

- Use “Lumada” IoT platform to optimize value-chain for industry and distribution

-Improvement of Quality of Life in communities

-From Rail as a Service to Outcome Delivery

-FinTech / My-number

-Healthcare Service (Platform)

-Transition to distributed power supply utilizing IT

・Microgrid, Regional energy management

・Renewable energy

UrbanFinance / Public /

Healthcare

Industry /

Distribution / Water

Investment focus

Investment focus

Investment focus

Investment focus

2-7. Hitachi Group’s Position in FY2018 (1)

Page 18: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Business structure from FY2016

Customers

Platform

Core of Social Innovation

Front

Customers’ segments (12BUs)

Regional bases

ProductsIndustrial products,

automotive parts, materials, etc.

17

Promoting R&D close to the customers

[R&D structure from FY2015]

Center for Exploratory Research

Global Center for Social Innovation

Center for Technology Innovation

Establishing Global No.1 Technologies

(Platforms, products)

Resolving future social issues

[Total: 550 people]

[Japan: 100 people]

[Japan: 2,050 people]

North America 100 Europe 70 China 115

Asia 65 Japan 200

Developing services in keeping with

the needs of customers in each region

2-5. R&D that Supports Strengthening the Front

Page 19: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Delivering new value to society through

collaborative creation with our customers and partners

© Hitachi, Ltd. 2016. All rights reserved. 18

Page 20: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in

© Hitachi, Ltd. 2016. All rights reserved.

Cautionary Statement

19

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 not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate 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 “forward-looking 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 not limited 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; 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 acceptance for

such products; 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; credit conditions of Hitachi’s customers and suppliers; 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; increased commoditization of and intensifying price competition for products; 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 acquisitions of other companies, joint ventures and strategic alliances and the possibility of incurring related expenses; uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness; uncertainty as to the success of 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 and

Europe, 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 associates and joint ventures

have become or may become parties; the possibility of incurring expenses resulting from any defects in products or services of Hitachi; the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures; the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis, the spread of infectious diseases, and geopolitical and social instability such as

terrorism and conflict; 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.

Page 21: Outline of Hitachi · 1-3. Corporate Foundation Founder Namihei Odaira Original repair shop in Ibaraki (1910) Founded in 1910 as a machine repair shop at Kuhara Mining Company in