Hitachi , Ltd.

Hitachi, Ltd. (Japanese Hitati Seisakusho, Russian Hitachi. ^[1].") - One of the largest multi-national multidisciplinary corporations, one of the main activities of which is the development of high-tech equipment. Headquartered in Tokyo, Japan. Hitachi is a conglomerate with about 1,100 companies on its list.

Structure

2022: Restructuring: Hitachi Digital will be responsible for the IT-Business at Hitachi

In early February 2022, Hitachi announced a restructuring of its business. The changes, which will come into force on April 1, 2022, will simplify the company's management structure based on three sectors: digital systems and services, green energy and mobility. More details here.

Hitachi restructured, Hitachi Digital will be responsible for IT-Business

2018: Business Directions

As of April 2018, Hitachi's business is built around the following main divisions:

• Information & Telecommunication Systems (servers, software, network and telecommunications equipment, as well as IT consulting and system integration services);
• Electronic Systems & Equipment;
• Power Systems (power equipment);
• Social Infrastructure & Industrial Systems;
• Construction Machinery;
• High Functional Materials & Components (the semiconductor materials special became also alloys, products of organic and inorganic chemistry);
• Automotive Systems (automotive components);
• Smart Life & Ecofrendly Systems (air conditioners, refrigerators, washing machines);
• Logistics, Services & Others;
• Financial Services.

Companies

In 2017, Hitachi Vantara was created, which included the following divisions:

• Hitachi Data Systems,
• Hitachi Insight Group и
• Pentaho.

Performance indicators

2017: Return of revenue to growth - plus 2% to 9.4 trillion yen

In fiscal 2017, Hitachi's revenue amounted to almost 9.4 trillion yen, which is 2% more than a year earlier. Net profit during this time rose from 338 to 490.9 billion yen.

Hitachi's sales began to grow again (in 2016 there was a decline of 9%), and the company on the rise entered the new fiscal year, which it declared a "year of structural reforms."

Hitachi Financial Performance

During the reporting 12-month period, which ended on March 31, 2018, revenue in Hitachi Information & Telecommunications Systems (servers, software, network and telecommunications equipment, IT consulting and system integration services) exceeded 2 trillion yen, an increase of 1% compared to the previous year. This growth in the company was associated with the expansion of system integration services in Japan and favorable exchange rate fluctuations. It is noted that the indicators could be higher if it were not for the restructuring in the direction of IT products and platforms.

Sales in the Electronic Systems & Equipment division (LCD displays, semiconductor, medical and measuring equipment) decreased by 7% to 1.09 trillion yen due to the deconsolidation of Hitachi Koki, a subsidiary specializing in power tools. Among the positive factors in the company was the high demand for equipment for the production of semiconductors. The direction of automotive systems brought Hitachi a little more than 1 trillion yen in revenue, largely due to the company's work in China.

Hitachi generates about half of its revenues in the Japanese market, in which it earned 4.6 trillion yen in fiscal year 2017, which is 2% less than a year ago. In the rest of Asia, revenue increased by 12% to 2.08 trillion yen. In North America, turnover amounted to 1.18 trillion yen (+ 3% compared to the previous year), in Europe there was a decline of 1% to 964.4 billion yen^[2]

Business in Russia

The office of Hitachi Data Systems and Hitachi High Technologies RUS (Hitachi) operates in Russia

2022: Suspension of the sale of construction equipment in Russia at the request of the Government of Ukraine

On March 10, 2022, it became known that the Japanese technology corporation Hitachi announced the suspension of operations in the Russian Federation, TASS reports citing the company's publication.

This will affect the production and sale of construction equipment, the revenue from which amounted to about 0.5% of Hitachi's total profit.

The measure will not apply to products and technical support for electrical systems, as well as electrical equipment.

According to Kyodo, Kiev appealed to the leadership of the corporation with a request to stop its activities in the Russian Federation due to the conflict in Ukraine.

2017: Intentions to invest in joint projects

Yasuo Tanabe, Hitachi's senior vice president, announced his intention to implement joint projects with Russian enterprises at the Innoprom international exhibition in July 2017 in Yekaterinburg. The priority in the strategy of the Japanese corporation is Internet of Things technologies, in the development of which Hitachi intends to invest about $3 billion.

Hitachi management is confident that in the coming years the Russian market will develop in the vein of combining industrial production and high technology - that is, in the field of application of the Internet of Things. The Japanese corporation pays attention to the development of technologies that will allow Russian enterprises to use the most advanced data storage and management mechanisms, innovative solutions for analyzing this data - all this creates the necessary prerequisites for the successful implementation of digital transformation projects and the wide distribution of the most advanced developments in the field of the Internet of Things in the financial sector, industry and transport industry. In fact, the integration of these areas in the activities of Russian companies is an important step towards creating smart enterprises and can be a powerful impetus for the development of the digital economy, Hitachi believes.

History

2022: Hitachi evacuates 7,200 employees from Ukraine

At the end of February 2022, Hitachi developed an evacuation plan for 7.2 thousand employees in Ukraine due to the aggravation of the situation. The company began to work out various options and look for ways to ensure the safety of its workers and their evacuation.

Subsidiary GlobalLogic has five branches in Ukraine, where 7.2 thousand engineers work. Hitachi has taken measures to evacuate these Ukrainian employees to Germany, Poland and other nearby countries where the company's offices are present. The company initially created a detailed business continuity plan, which tracks important indicators such as the safety and mood of specialists, the operation of basic infrastructure, and customer mood. Depending on the indicators, the plan provides several levels of security:

Hitachi evacuates 7,200 employees from Ukraine

• Green - no problems;
• Yellow - there is a low threat;
• Orange - there is a moderate threat;
• Red is a high level of threat.

Changes to one or more key figures will change levels and trigger a certain company response. The company said that in the circumstances, the first task is to take care of their employees. To protect their life and safety, the company management decided to evacuate its personnel in Ukraine, which will be implemented until March 1, 2022.

According to Teikoku Database, which is engaged in business analytics, as of January 2022, 57 Japanese companies were operating in Ukraine. Automakers and other manufacturers account for about half of this number of 28 companies. The Japanese government is also preparing to send charter planes to countries located near Ukraine for Japanese citizens who have moved along land routes.

We take the necessary measures because the safety of employees and their families is a top priority for us. To protect their life and safety, Hitachi management decided to evacuate the company's employees, said Hitachi CEO Toshiaki Higashihara.

According to estimates by the Ministry of Foreign Affairs of Japan, as of February 19, 2022, there were about 120 Japanese citizens in Ukraine. This number decreased from more than 250 in December 2022. The largest trade conglomerates from the end of January 2022 transferred Japanese personnel outside Ukraine. All employees of Itochu and Marubeni were evacuated.^[3]

2021

Fine for participation in the cartel

On September 29, 2021, NEC, Hitachi and three other Japanese electronic component manufacturers lost a lawsuit against an EU fine of €254 million ($298 million) for participating in the cartel for more than ten years. More details here.

Purchase of Thales railway division for $2 billion

On August 4, 2021, Thales announced the sale of the railway business to the Japanese company Hitachi. The value of the transaction is €1.66 billion. More details here.

Completion of acquisition GlobalLogic

Hitachi, Ltd., on July 28, 2021, announced the completion of the purchase of GlobalLogic Inc. It is expected that joining the company will expand the ability of Hitachi Group to promote initiatives in the field of business social innovation to solve global problems of customers and society. More details here.

Purchase of software developer GlobalLogic for $9.6 billion

At the end of March 2021, Hitachi announced the acquisition of an American development company. software GlobalLogic The deal is estimated at $9.6 billion. It is expected to be closed by the end of July 2021. More. here

2020: Transfer of ABB 80.1% of the business unit "Electric Networks"

On July 3, 2020, ABB announced an important milestone towards transformation into a decentralized global technology company, completing the transfer of 80.1% of Hitachi's Power Grids business unit as planned. More details here.

2018

Purchase of ABB electric grid business for $6.4 billion

On November 17, 2018, the sale of an 80.1 percent stake in the ABB electric grid business to the Japanese company Hitachi was announced for $6.4 billion. This acquisition was the largest in the history of Hitachi and reflects the buyer's desire to become a global industrial giant, and in the case of ABB, the deal indicates the company's focus on digital and robotics businesses. More details here.

Reduce companies in the group from 800 to 500

In April 2018, it became known about a 40 percent reduction in the number of companies in the Hitachi group. The Japanese conglomerate is reorganizing in an attempt to increase the profitability of the business.

According to the business publication Nikkei, the number of companies included in Hitachi will be reduced to 500 by the end of the financial year, which will end in March 2022. By April 2018, the corporation has about 800 subsidiaries, of which more than 300 firms operate in China and Southeast Asian countries.

Hitachi is reorganizing in an effort to increase business profitability

The cuts have already begun, but Hitachi does not specify how they will go through - by curtailing some business, combining enterprises or using both methods.

The elimination of fragmentation within the Hitachi group was part of decisive measures to reduce indirect costs and increase the operating profit margin to more than 10% - the level of foreign competitors. According to the results of the financial year, which ended at the end of March 2018 of the calendar year, this indicator of the profitability of the Hitachi business amounted to 7.1%.

For more than 10 years, Hitachi's indirect costs have increased due to the growing number of companies that were part of the conglomerate and provided its international expansion.

It is planned to finalize its Hitachi consolidation program by the end of March 2019. The person will be responsible for its implementation, who will take the position of vice president for cost structure reforms created for the first time. Who the company is going to appoint to this post is not specified.

As Nikkei notes, many Nikkei companies (working in the field of energy, construction equipment, information and communication technologies, vehicles, home electronics, etc.) tried to independently take some steps to expand their business abroad, as a result of which an excess of labor was created in the group, expressed, for example, in duplicating the functions of back-office employees.^[4]

2017

Creation of a new company Hitachi Vantara

In September, 2017 Hitachi declared creation of the new company Hitachi Vantara which included such business directions of the Japanese conglomerate as the Internet of things, systems of data storage (SDS) and Big Data. More details here.

Discontinuation of mainframe development

On May 24, 2017, Hitachi announced the supply of IBM mainframes. The Japanese company stopped the independent development of such equipment amid the growing popularity of cloud services.

Hitachi will offer customers IBM z System servers running its own Hitachi VOS3 operating system. The start of sales is scheduled for fiscal year 2018, which starts in March 2018 calendar year.

Hitachi abandoned mainframe release and decided to sell IBM hardware

Our agreement with Hitachi allows companies to continue to use the Hitachi operating system and software, which are central to their business, but at the same time receive the speed, scale and security benefits provided by the new IBM z System technologies, "says Ross Mauri, general manager of IBM z Systems. - Hitachi and IBM will continue to work together to develop technologies that provide customers with new digital solutions to transform their business.

IBM z System mainframes support z/OS, z/TPF, z/VM, and Linux operating systems. The latter accounts for more than 40% of users of these servers. IBM z System equipment is used by 44 banks from the 50 largest in the world, ten leading insurance companies and 18 of the 25 largest retailers (IBM data released in May 2017).

The business publication Nikkei writes that once the Japanese mainframe market was large. For example, in the mid-1990s, its volume was measured at 1 trillion yen (approximately $9 billion), and in 2015 the figure fell to less than 45 billion yen, according to the data of the Japanese Association of Electronics and Information Technology. This decline, which intensified during the growing spread of cloud services, forced Hitachi to abandon the release of mainframe and promote IBM hardware and focus on developing a server OS.^[5]

2016

Decline in revenue due to decline in ICT business

In fiscal year 2016, Hitachi's revenue decreased by 9%, which is a significant fault of the ICT business. At the same time, the company's profit rose by 15%.

During the reporting three-month period ending March 31, 2017, Hitachi's sales reached 9.16 trillion yen ($81.8 billion) against 10 trillion yen a year earlier. Net profit increased from 294.7 to 338 billion yen ($3 billion).

The drop in revenue is largely due to the negative dynamics in the Information & Telecommunications Systems division (servers, software, network and telecommunications equipment, IT consulting and system integration services), whose revenues decreased by 6% to 1.98 trillion yen ($17.7 billion) due to adverse fluctuations in exchange rates and a decrease in the sale of ATMs in foreign markets. In addition, reorganization in subsidiaries, including Hitachi Koki and Hitachi Kokusai, affected.

In fiscal year 2016, Hitachi's revenue decreased by 9%, which is a significant fault of the ICT business

At the same time, the operating profit of Information & Telecommunications Systems in annual terms increased by 1% to 152.9 billion yen ($1.37 billion), which was facilitated by the restructuring of the telecommunications and network business, as well as strengthening the profitability of sales of IT systems for social infrastructure.

In the division of Electronic Systems & Equipment (LCD displays, semiconductor, medical and measuring equipment), annual revenue increased by 4% and reached 1.17 trillion yen ($10.5 billion), in which the main merit belongs to the acquisition of the well-known manufacturer of electrical tools Metallo. The operating profit of the division turned out to be 81.5 billion yen ($729 million), which is 1.1% more than a year ago.

At the end of fiscal 2016, Hitachi's revenue in the Internet of Things market reached $5.4 billion. The corporation created the Hitachi Insight Group, whose main task is to maximize the benefits of combining the operating and information technologies offered by Hitachi with the new open Lumada IoT platform.

Between 2017 and 2019, Hitachi plans to spend 1 trillion yen (about $9 billion) on mergers and acquisitions. The amount, which is three times the cost of these purposes in the previous two years, will go mainly to the purchase of foreign companies engaged in the field of infrastructure.

At the end of fiscal 2017, Hitachi expects revenue at the level of 9 trillion yen, which is 1% less compared to 2016. The company's forecast for net profit is 405 billion yen.^[6]

Creating Hitachi Insight Group IoT Division

On May 10, 2016, Hitachi announced the creation of the Hitachi Insight Group division, which will be responsible for the company's projects in the Internet of Things (IoT) market. More details here.

2015: 3% revenue growth

In May 2016, Hitachi submitted a performance report for fiscal year 2015. The corporation's revenue rose 3%, which was largely facilitated by the IT-Business.

For the 12-month period, which ended on March 31, 2016, Hitachi's sales reached 10 trillion yen ($91.2 billion) against 9.77 trillion yen a year earlier. The main drivers of revenue growth were the following divisions: Social Infrastructure & Industrial Systems (industrial equipment, escalators, elevators), Information & Telecommunications Systems (servers, software, network and telecommunications equipment, as well as IT consulting and system integration services) and Automotive Systems (automotive components).

Hitachi Results: 3% Revenue Growth Due to IT-Business

Annual net profit attributable to shareholders decreased by 21% to 172.1 billion yen ($1.57 billion) and was below its own forecasts. In this recession, the Japanese giant blames large restructuring costs, losses from discontinued operations and increased taxes on income in Japan.

The largest revenue in fiscal 2015 was recorded in the Social Infrastructure & Industrial Systems division - 2.3 trillion yen ($21 billion), which is 3% more than a year ago. The highest dynamics of income growth (by 7%) occurred in the automobile division.

Hitachi's ICT business, which is responsible for the structure of Information & Telecommunications Systems, amounted to 2.1 trillion yen ($19.2 billion), an increase of 4% compared to fiscal year 2014. Operating profit in the division increased by 5%, amounting to 141.3 billion yen ($1.3 billion).

Hitachi President Toshiaki Higashihara said that the company is paying more and more attention to digital technologies to increase sales of automotive components, trains and energy solutions. At the same time, Hitachi prefers to separate non-core areas and is considering opportunities for buying other companies, the head said.^[7]

2014: IT-Business helped Hitachi boost revenue

On May 14, 2015, Hitachi released its consolidated results for fiscal year 2014. The revenue of the Japanese conglomerate grew 2.1% partly due to the IT-Business, and net profit fell 9% due to conversion costs in one of the divisions.

According to the results of the 12-month reporting period, which ended on March 31, 2015, Hitachi's net profit amounted to 241.3 billion yen (about $2 billion) against 265 billion yen ($2.2 billion) a year earlier. This decline is largely due to the cost of reorganizing the unit involved in the development and sale of thermal power systems.

Hitachi's profit fell 9% due to conversion costs in one of the divisions

Hitachi's annual operating profit jumped 12%, reaching 600.48 billion yen ($5 billion). Revenue turned out to be 9.76 trillion yen ($81.9 billion), while in fiscal year 2013 it amounted to 9.56 trillion yen ($80.2 billion). The reasons for the growth of sales in the corporation are the high demand for elevators in China, as well as for automotive components and electronics around the world.

Most of Hitachi's revenue comes from Information & Telecommunication Systems, which, among other things, specializes in network equipment, storage systems and servers. In fiscal 2014, this structure showed a 5 percent increase in revenue to 2 trillion yen ($16.8 billion). Operating profit at the same time rose by 9.6%, amounting to 116.2 billion yen ($974.2 million).

Hitachi Electronic Systems & Equipment finished the reporting year with sales of 1.1 trillion yen ($9.2 billion), which grew by 1% year-on-year. Operating profit growth amounted to 10.3%, and its size was 69.4 billion yen ($582 million).

More than half of Huawei's revenue comes from the Japanese market. In fiscal 2014, the Japanese corporation earned 5.2 trillion yen ($43.6 billion) in its homeland, which is 2% less than a year earlier. Sales abroad, on the contrary, increased - by 8%, to 4.6 trillion yen ($38.6 billion).

At the end of fiscal 2015, which will last until the end of March 2016, Hitachi predicts net profit at 310 billion yen ($2.6 billion) with revenue of 9.95 trillion yen ($83.5 billion). Thus, the company expects to resume profit growth and continue to increase sales.^[8]

2011: Announcing Cloud Strategy for Cities

According to the statement of the Japanese technology giant, they are preparing to implement large cloud projects that will be able to combine these municipal infrastructures of Japan into a single information cloud network.

Hitachi plans, announced on November 24, 2011, to actively develop large cloud computing projects and software that will combine data from entire cities' infrastructures. According to the statement, the corporation will sell cloud systems that will combine and analyze data obtained from various sources of municipal engineering infrastructures, such as roads, shipping, energy networks and public transport.

According to Kaichiro Sakuma, one of Hitachi's top managers, these systems currently exist independently of each other, such as train management systems or enterprise management systems, but they can be connected using a cloud. "This is something that other IT vendors will not be able to offer," Sakuma emphasized.

He noted that the company has worked out stringent security requirements that it plans to implement using specialized cloud systems for sensitive data and groups of employees devoted entirely to monitoring and protecting networks.

Hitachi, which produces everything from nuclear power plants to mobile phones, said in a cloud-related business it aims to reach revenues of 500 billion yen ($6.5 billion) during the fiscal year. Deadline: March 2016. This is a significant rise - from 70 billion yen, which she managed to generate in the last fiscal year.

As an example of the implementation of Hitachi's plans, Sakuma pointed to the system that the company is installing on the Japanese islands of southern Okinawa, which is a summer vacation destination. The system will manage a fleet of rental electric vehicles, charging stations, monitor electricity consumption and electronic payments. In the future, the company plans to expand the system and go beyond Japan, to such regions of the world as Spain and Hawaii.

Hitachi plans to process the so-called "big data." Sakuma said so far infrastructure projects have focused heavily on real-time monitoring and feedback, but now big data can be stored and redesigned to find more trends and inefficient sectors.

To manage this business, the company will create two new data centers in China in addition to the one that was built two years ago and operates for the domestic market.

2010:360 thousand employees

The results of fiscal year 2009, which ended on March 31, 2010, showed a total revenue of 8.968 billion yen ($96.4 billion ). The company has approximately 360,000 employees worldwide.

2009: Fine for participation in a price conspiracy

In the spring of 2009, the company was sentenced to a fine of $32 million for participating in fixing prices for LCD.

Notes