power systems business strategy - hitachi
TRANSCRIPT
Copyright © Hitachi, Ltd. 2005 All rights reserved.1
Shigeharu ManoPresident & Chief Executive Officer
Power Systems
October 6, 2005
Power Systems Business StrategyInitiatives Toward 2015
Hitachi, Ltd.
Copyright © Hitachi, Ltd. 2005 All rights reserved.2
2.Market Trends
3.Management Vision
4.Technologies and Products
1.Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.3
2.Market Trends
3.Management Vision
4.Technologies and Products
1.Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.4
Position of the Power Systems1-1.
Hitachi’s Revenues by Industry Segment
Total¥9,027.0 bil.
High Functional Materials & Components
Electronic Devices
Digital Media &Consumer Products
Financial Services
Logistics, Services& Others
Information & TelecommunicationSystems
Power & IndustrialSystems
24%
Power Systems¥520.4 bil.
Industrial SystemsAutomotive SystemsUrban Planning and Development SystemsHitachi Air Conditioning Systems Co., Ltd.Hitachi Construction Machinery Co., Ltd.Hitachi Industrial Equipment Systems Co., Ltd.Hitachi Kiden Kogyo, Ltd.Hitachi Via Mechanics, Ltd.Hitachi Plant Engineering & Construction Co., Ltd., othersFY04 Consolidated Basis (ended March 31, 2005)
※Total revenues are the total after eliminations and corporate items; shares of total revenues by segment are computed based on revenues before eliminations
¥2,515.3 bil.
Position of Power Systems in Power & Industrial Systems Segment
Copyright © Hitachi, Ltd. 2005 All rights reserved.5
Overview of the Power Systems
Hokuriku Electric Power CompanyShika Nuclear Power Plant(Steam turbine generators)
Tokyo Electric Power Company (TEPCO)Hitachinaka Power Station(Coal-fired Power Plant)
University of TsukubaProton Medical Research Center(Proton Beam Therapy System for Cancer Treatment)
Power Systems Revenues by Business
Total:¥520.4 bil.
Japan 74%
Overseas 26%
Total:¥520.4 bil.
Thermal &Hydroelectric
Systems41%
Nuclear Systems 37%
Medical Systems1%
Power & Industrial Systems 21%
FY04 Consolidated Basis (ended March 31, 2005)
1-2.
Ratio of Overseas Sales in Power Systems
Copyright © Hitachi, Ltd. 2005 All rights reserved.6
Power Systems Products
Thermal & Hydroelectric SystemsCoal-fired Power Plant, Boiler, Air Quality Control System, Steam Turbine, Gas Turbine, Combined Power Plant, Hydraulic Turbine, Wind Generator System,Electrical Power Selling, Preventive Maintenance
Nuclear SystemsNuclear Power Plant, Reactor Pressure Vessel, Reactor Internals,Component/Piping Support Structure, Nuclear Fusion Equipment, Accelerator and Superconducting Application System, Condenser, Nuclear Fuel Cycle Facility, Transport and Storage Dual-Purpose Dry Cask, Preventive Maintenance
Power & Industrial SystemsGenerator, General-Purpose Motors, Traction Motors, Substation Equipment, Control and Monitoring System, Power Device, Uninterruptible Power Supply System,Bifacial Photovoltaic Solar Module
Medical SystemsProton Beam Therapy System for Cancer Treatment, Positron Emission Tomography System with Semiconductor Detector,Supporting and Solution Service for Clinical PET
*PET: Positron Emission Tomography
1-3. 1( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.7
Power Systems Products
Boilers Steam Turbine Generators
Environmental Control Systems
(Desulfurization Systems)
H-25 Gas Turbines
Turbine Runners Nuclear Reactors
Transmission Equipments
Wind-turbine Generators
Uninterruptible Power Supplies Power Devices Small-scale Nuclear
Reactors
Linear Accelerators Accelerators Gantries (Medical Systems) Monitoring and Control Equipments
1-3. 2( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.8
2.Market Trends
3.Management Vision
4.Technologies and Products
1.Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.9
Domestic Market Trends
Source: Ministry of Economy, Trade and Industry, Summary of Electricity Supply Plan, FY 2005
* Source: computed from actual plant and equipment projects carried out by 10 power companies
■Outlook
FY1993=100%
(¥ bil.)(FY)
37%
19934,934.1
100%
19983,553.1
72%
20031,770.6
36%
2005(Plan)1,690.7
34%
20041,512.6
31%
13 0.07116.9Hydroelectric
1115.4922.46Incl. BWR*
1216.3233.37Nuclear
2212.34107.99Thermal
No. of Plants
Planned (MW)
No. of Plants
Under Construction (MW)
■Future Power Capacity Development PlansPower capacity scheduled to come on line in next 10 years (FY2005~2014) FY05 planned capital expenditures are expected
to rise year on year for the first time in 12 years
In terms of new capacity, demand is expected to remain firm for thermal power plants and new construction of nuclear power plants is also anticipated
Demand for upgrades to existing facilities is expected to rise to boost output and renew aging equipment
Capital Expenditures of 10 Japanese Power Companies
Gradualincrease
*BWR: Boiling Water Reactor
2-1.
Copyright © Hitachi, Ltd. 2005 All rights reserved.10
Overseas Market Trends
*Source: International Energy Agency’s International Energy Outlook 2005
Trends in Electricity Consumption
21,400 tril.Wh14,300 tril.Wh 18,900 tril.WhTotal:2015 (forecast)2010 (forecast)2002 (actual)
4.6
3.4
3.31.1
4.3
3.2
2.81.0
U.S.
Europe
China
Others
3.7
2.91.5
Japan 1.0
9.07.6
5.2
(Unit: tril. Wh)
■Outlook for World Electricity Consumption 1.5 times2002 level1.3 times
2002 levelThe U.S., Europe and China will remain theworld’s three largest electricity consumingregionsWorld electricity demand is expected tocontinue expanding
2-2. 1( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.11
Overseas Market Trends
Coal Oil GasHydroelectric
Other Nuclear
U.S. 51.3% 20.2
*Source: Energy Balances of OECD Countries 2001-2002, others
Features of the Three Largest Electricity Consuming Regions
China 77.2%
Europe 26.9% 33.7%
Stable price of coal prompts reappraisal of coal-fired thermal power generation
Briskness of new facility construction in the U.S.for the first time in almost three decades
The price of crude oil will remain high
More stringent environmental regulations will be imposed on gas emissionsEnergy security will be reviewed
Coal-fired and nuclear power generation underpins the supply of electricity in the world’s three largest consuming regions
■Medium- and Long-term Outlook■Electricity Generating Capacity by Type (2002)
2-2. 2( )
Growing demand for environmental control equipment (flue gas treatment systems) Moves to add this equipment to existing plants worldwide
Increased activity in construction and renewal of nuclear power plantsEnactment of the Energy Policy Act of 2005 in the U.S.
Copyright © Hitachi, Ltd. 2005 All rights reserved.12
2.Market Trends
3.Management Vision
4.Technologies and Products
1.Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.13
Power Systems Management Vision
Succeed in the global marketplace
Overwhelmingly powerful technologies and products
Business framework deeply rooted in regional markets
3-1.
Copyright © Hitachi, Ltd. 2005 All rights reserved.14
Coal-fired Power Plants
Focus on Overwhelmingly Powerful Technologies and Products
Maintain and strengthen “monozukuri” (manufacturing) capabilities
Nuclear Power Plants
Proton Beam Therapy Systems forCancer Treatment
Business Policy3-2. 1( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.15
Create a Business Framework Deeply Rooted in Regional Markets
Domestic OperationsMaintain a powerful sales system based on relationships of trust with customers
Global OperationsDomestic: Globalize Japan—strengthen support functions as the general headquartersOverseas: Localize overseas operation—promote local operations in each region
3-2. 2( )Business Policy
Copyright © Hitachi, Ltd. 2005 All rights reserved.16
Revenue and Operating Margin Targets
1,000
800
600
400
[(Unit: ¥ billion)]
26% 42% 53%Overseas sales ratio
FY2004 FY2010 FY2015
200
0
10% operating margin
41%
137
21
About40%
About 35
About 10About 15
About45%
About 35
About 5About 15
6% operating margin
Revenue: ¥800.0 billion (FY2015)Operating profit margin: At least 10% (FY2015)
520.4
730.0800.0
Thermal & Hydroelectric Systems
Nuclear Systems
Medical Sytems
Power & Industrial Systems
3-3.
Revenues
Copyright © Hitachi, Ltd. 2005 All rights reserved.17
2. Market Trends
3. Management Vision
4. Technologies and Products
1. Overview of the Power Systems
5. Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.18
Coal-fired Power PlantsStrengthen key components, including boilers, steam turbines, generators and environmental control systems (AQCS)
Nuclear Power PlantsDevelop key technologies, including next-generation nuclear reactors and preventative maintenance technologies
Proton Beam Therapy Systems for Cancer TreatmentDevelop key technologies, including accelerators and rotating gantry
Focus on Overwhelmingly Powerful Technologies and Products
Maintain and strengthen “monozukuri” (manufacturing) capabilities
Accelerator(Proton Beam Therapy System for Cancer Treatment)
Environmentalcontrol system
Exhaust flue
Desulfurization equipment
Electrostatic precipitator
Denitrificationequipment
Small-scale nuclear reactor
Mainstay Products and Technologies4-1.
*AQCS: Air Quality Control system
Copyright © Hitachi, Ltd. 2005 All rights reserved.19
Coal-Fired Power Plants
Further refine ultra-super critical pressure coal-fired thermal power generation technology proven in Japan and differentiate Hitachi by improving the performance of key components and leveraging integrated strengths
Trust and brand powerTechnologies for achieving high efficiency using ultra super critical pressure (high temperatures, high pressure)Production of BTG and AQCS equipment with proprietary technologies
Project management capabilities in EPCKnow-how in operating and managing power plants
Boiler Flue gasCoal
Steam
Environmentalequipment
(AQCS)
Steam turbine Generator Electricity
Coal-fired Thermal Power Generation
Strengths of the Hitachi Group
*BTG: Boilar, Turbine and Generator*AQCS: Air Quality Control system*EPC: Engineering, Procurment and Construction
4-2. 1( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.20
Coal-Fired Power Plants
(India) BHEL28.4%
Hitachi27.5%
Mitsubishi Heavy Industries, Ltd.
10.3%
Toshiba Corp.5.7%
(U.S.) GE2.9%
Others25.2%
Share of Orders for Steam TurbinesUsed in Coal-fired Thermal Power Plants
*Source: McCoy Power Reports 2004excluding Chinese manufacturers
Share of Orders for BoilersUsed in Coal-fired Thermal Power Plants
(India) BHEL 21.2%
Hitachi24.7%
(U.S.) B&W17.1%
(U.S.) FW7.3%
(France) ALSTOM6.7%
Others4.4%
Global Share in Key Components (1)
4-2. 2( )
(South Korea) Doosan Heavy Industries
18.6%
*BHEL: Bhart Heavy Electricals Limited *B&W: Babcock & Wilco Company *FW: Foster Wheeler Corporation
Copyright © Hitachi, Ltd. 2005 All rights reserved.21
Coal-Fired Power Plants
*Source: Estimate by Hitachi
Total number of delivery records as of 2002
MHI -Cormetech24%
*IHI: Ishikawajima-Harima Heavy Industries Co.,Ltd.
Hitachi30%
(Germany)Siemens
14%
IHI*9%
Others23%
Hitachi51%(U.S.) GE
13%
Others23%
Global Share in Key Components (2)
Share of Market for Flue Gas Denitration Unit
Share of Market forFlue Gas Desulfurization Unit
4-2. 3( )
Mitsubishi Heavy Industries, Ltd.
13%
Copyright © Hitachi, Ltd. 2005 All rights reserved.22
Supplied to MidAmerican Energy Company (U.S.)Council Bluffs Energy Center Unit 4(Capacity: 790kW)
Coal-Fired Power Plants (4)4-2.
Strengthen Key Components
Develop highly efficient, low-cost steam turbines and large-scale generators
Develop low-cost boilers with a small environmental impact
Develop high-performance, low-cost AQCS
Slated to come on line in 2007
Copyright © Hitachi, Ltd. 2005 All rights reserved.23
Nuclear Power Plants
Steadily complete domestic BWR projects and focus on developing key technologies for preventative maintenance technology as well as next-generation nuclear reactors
Strengths of the Hitachi GroupCapable of handling everything from nuclear reactors to turbinesAbility to create proposals for increasing output of a plant andupgrading aging facilitiesTechnology development capabilities rooted in “monozukuri” DNA
Sophisticated preventative maintenance technologies such as Water Jet Peening (WJP)
Slated to come on line in March 2006
Supplied to Hokuriku Electric Power CompanyShika Nuclear Power Plant No. 2(Capacity: 1,358kW)
WJP is a maintenance technique whereby a high-pressure water jetis applied to the surface of steel structures to reduce the residual tensile stress on surfaces. WJP is effective for maintenance work insidenuclear reactor pressure vessels.
SteamSteam turbine Generator
Electricity
Nuclear Power Plant
Nuclearreactor
Fuel
4-3. 1( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.24
Nuclear Power Plants
FY2013FY2007TEPCO/Higashidori Unit #1
After FY2015After FY2009TEPCO/Higashidori Unit #2
FY2014FY2009The Chugoku Electric Power Co., Inc./Kaminoseki Nuclear Power Station No. 1 unit
FY2016FY2011Tohoku-Electric Power Co., Inc./HigashidoriNuclear Power Station No. 2
FY2017FY2012The Chugoku Electric Power Co., Inc./Kaminoseki Nuclear Power Station No. 2 unit
Start of Operations
Start of ConstructionCompany/Plant Name
Oct. 2012Apr. 2007TEPCO/Fukushima Daiichi Unit #8
Oct. 2011Apr. 2007TEPCO/Fukushima Daiichi Unit #7
Mar. 2012Aug. 2006Electric Power Development Co., Ltd. (J-POWER)/Oma Nuclear Power Plant
Dec. 2011Sept. 2005The Chugoku Electric Power Co., Inc./Shimane Nuclear Power Station No. 3 unit
*Source: Ministry of Economy, Trade and Industry, Summary of Electricity Supply Plan, FY 2005
Power Plants Planned in the Next 10 Years (Through FY2014)
Development Plans for ABWR Nuclear Power Plants in Japan
BOPACRAECL(Canada)Canada
BOP
Nuclear reactor-relatedBOP
Nuclear reactor-relatedBOP
Scope
CANDUAECL (Canada)
Reactor Type
Cooperating ManufacturersRegion
ABWRGE (U.S.), Toshiba Corp.
China
ESBWRGE (U.S.), Toshiba Corp.U.S.
Overseas Nuclear Power Plant Projects
*AECL:Atomic Energy of Canada limited*ESBWR:Economic and Simplified BWR*ABWR:Advanced Boiling Water Reactor*CANDU:Canadian Deuterium Uranium Reactor*ACR:Advanced Canadian Deuterium Uranium Reactor*BOP: Balance of Plant (steam turbines, generator-related)
4-3. 2( )
Copyright © Hitachi, Ltd. 2005 All rights reserved.25
Proton Beam Therapy Systems for Cancer Treatment
Help treat cancer patients worldwide through the creation of proton beam cancer therapy systems that apply atomic accelerator technology.
Market for Radiotherapy Equipment
Particularly effective in the treatment of prostate, breast, lung, ovarian and liver cancersCan be used to treat more than 60% of all cancer patients
Estimated at approx. ¥1.6 tril. worldwide (2004)
Efficacy of Proton Bean Cancer Therapy
Computer graphic of radiotherapy
chamber
Irradiationequipment
Patient Rotating gantry
4-4. 1( )
Quality of Life before and after treatment maintained, minimizes physiological and psychological burden
Non-invasive and few side-effectsFeatures Strength
Irradiation delivered in sync with patient’sbreathing (Hitachi patent)
Technology to control proton beam accurately and safely
Copyright © Hitachi, Ltd. 2005 All rights reserved.26
U.S.MD Anderson Cancer Center
One of the world’s largest cancer centers, with 65,000 outpatients per year
Applying for U.S. FDA approval : scheduled to start using the system in 2006 Plans to use the system to treat some 3,400 patients a year
4-4. 2( )Proton Beam Therapy Systems for Cancer Treatment
Around 500,000 people diagnosed with cancer each year
Over 300,000 treatable with this system
JapanAround 1 million people diagnosed with cancer each year
Over 600,000 treatable with this system
North America
*FDA:Food and Drug Administration
Copyright © Hitachi, Ltd. 2005 All rights reserved.27
The backbone supporting the development and production ofcompetitive technologies and products
Maintain and Strengthen“Monozukuri” (Manufacturing) Capabilities
Handing Down Skillsand Technology
A program for databasing Hitachi’s core skills (held by highly skilled veterans) using the latest digital media technologies; skills then transferred to other employees ・Content consists of image, narration and
explanatory text・Covers a wide range of fields, including
machinery processing, assembly, welding and quality control
・Aids in both strengthening and improving the efficiency of production and design, including job automation
Participation in World Skills Competition・Hands-on skills learning・Instill pride and confidence in monozukuri・13 Hitachi employees from nuclear systems have won the gold medal, the top award
・A technical training school for engineers etc.(Established in August 1959)
e-Meister Activities
Hitachi Technical College
4-5.
Copyright © Hitachi, Ltd. 2005 All rights reserved.28
Ibaraki
Saitama
TokyoChiba
Kanagawa Hitachi Research Laboratory(Hitachi-city, Ibaraki)Materials, devices, components
Mechanical Engineering Research Laboratory (Hitachikana-city, Ibaraki)Mechatronics systems
Babcock-Hitachi K.K. (Kure Works and Laboratory)(Kure-city, Hiroshima) Boilers and environmental control systems
Hitachi Region Kokubu Region
Power & Industrial Systems R&D Laboratory (Hitachi-city, Ibaraki)Turbines, generators and electrical machinery, transmission
equipment, receiving and transforming equipment, protectionand control systems, power devices
Hitachi Engineering Co., Ltd.Hitachi Engineering & Services Co., Ltd.Other Group companies(Ibaraki)Generation equipment, electrical equipment, inspection facilities, etc.
4-6. Technologyand Product Development Bases
Hitachi Works (Hitachi-city, Ibaraki)
Core electric power and energy systems technologies
Copyright © Hitachi, Ltd. 2005 All rights reserved.29
2. Market Trends
3. Management Vision
4. Technologies and Products
1. Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.30
Create a Business Framework Deeply Rooted in Regional Markets
Domestic OperationsMaintain a powerful sales system based on relationships of trust with customers
Global OperationsDomestic: Globalize Japan—strengthen support functions as the general headquartersOverseas: Localize overseas operation—promote local operations in each region
Create a Business Framework for Each Region 5-1.
Copyright © Hitachi, Ltd. 2005 All rights reserved.31
Global Operations—Domestic—
Upgrade general headquarters’ functions to respond to the needs of each region worldwide
Strengthen support capabilities for overseas operations
Increase the number of foreign employees in Japan・Increase from around 40 at present by at least 5 people a year・Energize communication at the “monozukuri” frontline (design and manufacturing) and
make Japanese employees constantly aware of the world marketplaceIncrease the number of Japanese employees overseas・Around 70 at present・Including design, quality assurance, procurement and other areas, in addition to salesMake greater use of job rotation with overseas bases
5-2.
Globalize Japan
Copyright © Hitachi, Ltd. 2005 All rights reserved.32
Global Operations—Overseas—
Localize overseas bases
Strengthen partnerships・North America GE, leading engineering companies・Canada AECL, leading engineering companies・Europe Leading engineering companies・China Dongfang Electric Corporation, Harbin Electric Machinery Co., Ltd., others
・Employ local management personnel・Employ local engineers・Strengthen project management capabilities and local procurement capabilities・Disseminate local information and business proposal to Japan
Push ahead with business localization in each region to create a business framework that dovetails with local markets
5-3.
Localize overseas operation
Copyright © Hitachi, Ltd. 2005 All rights reserved.33
Hitachi Power Systems AmericaThermal power plant sales, engineering, procurement, EPC project management
■ Established thermal power systems operating company (February 2005)
■ Utilization of manufacturing bases
■ Strengthen alliances with GE, AECL, others
Hitachi Canadian Industries Ltd.Manufacture of generating equipment, maintenance services(established in April 1988)
■ Build a collaborative framework with engineering companies
■ Synergy with Hitachi America, Ltd.
Coal-fired thermal power plantsNext-generation nuclear power plants
Push ahead with business localization in each region to create a business framework that dovetails with local markets
Hitachi America, Ltd.(U.S.A./Tarrytown, NY)
<Key Markets>
5-4. Initiatives in North America
Copyright © Hitachi, Ltd. 2005 All rights reserved.34
Babcock-Hitachi Europe GmbHBoiler engineering, procurement, installation, test operation(acquired in May 2003, made a wholly owned subsidiary inDecember 2003)
■ Made German boiler company a subsidiary(May 2003)
■ Build a collaborative framework with engineering companies
Hitachi Power Systems Europe (tentative)Thermal power plant sales, engineering, procurement, EPC project management
■ Establish thermal power systems operating company(scheduled for around spring 2006)
■ Synergy with Hitachi Europe Ltd.
Coal-fired thermal power plantsEnvironmental control systems (AQCS)
Badcock Hitachi Europe GmbH(Germany/Oberhausen)
5-5. Initiatives in Europe
Push ahead with business localization in each region to create a business framework that dovetails with local markets
<Key Markets>
Copyright © Hitachi, Ltd. 2005 All rights reserved.35
■ Cooperation with Dongfang Electric Corporation
■ Cooperation with Harbin Electric Machinery Co., Ltd.
■ Made manufacturing joint venture a wholly ownedsubsidiary (June 2005)
■ Synergy with Hitachi (China) Ltd.
Dalian Hitachi Machinery & Equipment Co., Ltd.Design and manufacture of thermal, nuclear and hydroelectric power generation equipment, petrochemical plants, cast products,etc.(JV established May 1997, made a wholly owned subsidiary June 2005)
Local partner in thermal power plantsBegan licensing thermal power technology and extending cooperation for local production in 1991Signed transfer agreement for ultra-super critical pressure technologyin 2004
Cumulative orders from Dongfang in China exceed ¥100 billion
Local partner in hydroelectric power plantsBegan licensing technology and cooperating on local productionin 1980
Coal-fired thermal power plantsEnvironmental control systems (AQCS)Nuclear and hydroelectric power plants
Dalian Hitachi Machinery & Equipment Co., Ltd.(Dalian, Liaoning, China)
5-6. Initiatives in China
Push ahead with business localization in each region to create a business framework that dovetails with local markets
<Key Markets>
Copyright © Hitachi, Ltd. 2005 All rights reserved.36
2. Market Trends
3. Management Vision
4. Technologies and Products
1. Overview of the Power Systems
5.Business Framework
6.Conclusion
Power Systems Business StrategyInitiatives Toward 2015
Copyright © Hitachi, Ltd. 2005 All rights reserved.37
Revenue: ¥800.0 billion (FY2015)Operating margin: At least 10% (FY2015)
Succeed in the global marketplace with overwhelmingly powerful technologies and products, and a business framework deeply rooted in regional markets
6. Conclusion
Copyright © Hitachi, Ltd. 2005 All rights reserved.38
Copyright © Hitachi, Ltd. 2005 All rights reserved.39
CAUTIONARY STATEM ENT Certain statem ents found in this docum ent 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 m ay 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 lim ited to: - fluctuations in product dem and and industry capacity, particularly in the Information & Telecommunication Systems
segment, Electronic Devices segment and Digital M edia & Consumer Products segment; - uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely
and cost-effective basis and to achieve market acceptance for such products; - rapid technological change, particularly in the Information & Telecommunication System s segment, Electronic Devices
segment and Digital M edia & Consumer Products segment; - increasing commoditization of information technology products, and intensifying price competition in the m arkets for such
products; - fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which
Hitachi’s assets and liabilities are denominated, particularly between the yen and the U.S. dollar; - uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product
demand and/or exchange rates; - general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets,
particularly, the United States, Japan and elsewhere in Asia, including, without lim itation, a return to stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations on im ports;
- 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 success of restructuring efforts to improve management efficiency and to strengthen competitiveness; - uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi m ay not control, w ith other
corporations in the design and development of certain key products; - uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and - uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write
down equity securities it holds. The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in this document and in othermaterials published by Hitachi.