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Hitachi

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photo :Toshiaki Higashihara Executive Chairman & CEO

In 2020, as the world confronted the dramatic impact of COVID-19, a number of pressing social and economic issues were brought to light. In this changing environment, Hitachi posted an adjusted operating income ratio in fiscal 2020 of 6.5% in its five sectors by offering solutions through the Social Innovation Business and responding to these changes in the business environment despite the negative effects of COVID-19. Furthermore, we have increased operating cash flow by approximately 230 billion yen year over year and established a strong business base poised for sustainable growth in the future.

Fiscal 2021 is the final year of the 2021 Mid-term Management Plan, in which we declared that Hitachi would become a global leader in the Social Innovation Business. In fiscal 2020, Hitachi's Lumada business continued to grow and in July 2021, we completed the acquisition of GlobalLogic, a leading U.S.-based digital engineering services company, which will enable us to further strengthen our global rollout and increase sales from 1.1 trillion yen in fiscal 2020 to 1.6 trillion yen in fiscal 2021, with the goal of accelerating this to 3 trillion yen by fiscal 2025. Moving forward, we will leverage acquired powerful assets in a range of business domains to demonstrate synergy with digital technologies in each region and create an even more robust Hitachi. We will secure an adjusted operating income ratio of 8% in fiscal 2021, and in fiscal 2022, the first year of the new Mid-term Management Plan, we will bring this figure above 10%. We will position fiscal 2021 as the year in which we complete the transition to a growth mode, as we work to further strengthen profitability.

Recently, I have had increasing opportunities to discuss a wide range of topics, including environmental issues and human resource development in dialogue and engagement with shareholders and investors. Environmental, social, and governance (ESG) criteria are top priorities in corporate management and it is understood as responsibilities to society. Hitachi declared its intention to achieve carbon neutrality at in-house business offices and production bases by fiscal 2030, and aims to achieve carbon neutrality across its entire value chain together with our customers by fiscal 2050. Regarding human resources, we will promote diversity and inclusion on a global scale. On the other hand, it is clear that we have built a structure that emphasizes independence and diversity with regard to corporate governance. Then after making clear to all shareholders our policies regarding the allocation of management resources, we will ensure a stable increase in dividends, while at the same time considering the possibility of conducting share buybacks at the appropriate time, as part of efforts to share the fruits of growth with stakeholders.

Hitachi's ideal image as a global leader in the Social Innovation Business is directly in line with its public perception as a next-generation leader. A true leader looks toward the future with great perspective, gained from encountering new ideas while working tirelessly to implement policies that result in the best possible future for everyone. I will take every necessary step to bring Hitachi closer to this ideal image of a global leader. I look forward to your continued support as we continue this work together.

September 2021
Toshiaki Higashihara Executive Chairman & CEO
Toshiaki Higashihara
Executive Chairman & CEO