Welcome to Hitachi's Home Page! My name is Etsuhiko Shoyama, and from today,
April 1, I am President and Director of Hitachi, Ltd. So on behalf of Hitachi, I would
like to thank you for visiting our Home Page. At the same time, as I start out as
president of the new Hitachi, I would like to describe our ambitions concerning the
management of the company's business, and our policies for the future.
Hitachi wrote off some major losses in its statement of accounts for fiscal 1998, ended
March 31, 1999. As president, my mission is to use that decision as a basis to transform
Hitachi into a company that generates high profits. Part and parcel of achieving this is
the implementation of reforms that create change, based on reliability and speed. Today,
I'd like to talk about three aspects of this, with respect to taking Hitachi in that direction.
These are, one: what earnings targets should we achieve; two: which businesses should
we focus on, and which should we drop; and three: how should we set about
implementing a more forward-looking mind-set for achieving our goals?
First, our earnings target. I believe that a management perspective that places more
priority on the interests of shareholders, and improving asset efficiency, is crucial. Our
first aim is to move into the black in the current fiscal year. Our next target is to achieve
an ROE (return on equity) of over 8% as quickly as possible, and then an ROE of over
10%, again, as quickly as possible.
To accomplish this, we will move forcefully ahead to achieve high earnings by investing
management resources into the systems integration, software and network business
sectors of our information and electronics operations and, in the services sector, by the
implementation of strategic financial business operations.
The specifics of these policies will be set out in a medium-term business plan that is due
to be released in six months' time. Moreover, from the standpoint of increasing our
value to shareholders, I consider that accelerating the improvement of business results to
enhance Hitachi's ratings, and stable dividends, are also important.
Moving on to the second point, choosing which businesses to commit to, and which to
get out of. Within the next six months I will be conducting a comprehensive review of
all Hitachi's businesses to clarify which should be grown and which should be
reorganized or dropped.
The information division, central to which is information services, will form one of the
core businesses which are to be grown. At the same time, we will use the addition of
information technology to enhance the profitability, convenience and safety of a broad
range of services and products, from heavy machinery to consumer products, that
underpin the basic systems of a society. Information services in new markets such as the
environment, education and distribution are areas we will be concentrating on. We have
announced that through these efforts, on a consolidated basis, we plan to expand our
services business from the current 1.5 trillion yen to 2.5 trillion yen by 2003. I am utterly
determined to see that we achieve this.
On the other hand, I intend to drastically reorganize businesses that do not do well in the
marketplace, and in some cases will even pull out of the market sector concerned.
I consider that an appropriate assessment of business results based on suitable
performance criteria is essential for improving the profitability of the company's business
groups. Goals will be clearly defined by setting numerical criteria in four categories:
profitability, growth, degree of improvement, and degree of achievement. These will be
put into numerical form, using ROA (return on assets), net income per share, sales
growth, amount of increase in income before income taxes, and a comparison between
actual and projected ratio of profit to net sales. This will be used as a basis for the fair
evaluation of business performance and as an incentive to improve profitability.
The third point concerns how we should set about implementing a more forward-looking
mind-set for achieving our goals. The only way to achieve these goals is to keep trying
our utmost. Most of my work up until now has been to bring about change. I've also
sought constant change from our workforce. Looking to the future, there will be no
place in the company for people who do not seek change. I intend to use this thinking to
carry out a complete reappraisal of the way we have been doing things up to now. In
these times of global megacompetition, we shall be aggressively tackling the task of
changing Hitachi, through outside alliances, including mergers and acquisitions, and
through reorganizations within the Hitachi group.
We regard the Internet Home Page service as an important channel of communication.
As such, we intend to ensure that it carries the latest information on products, services
and management, as we expand and enhance the Home Page as part of our focus on
creating change that anticipates the trends of the times.
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