New Mid Term Business Plan. Step to Hitz 2016 Vision

Transcription

1 New Mid Term Business Plan FY2011 thru. FY2013 Step to Hitz 2016 Vision May 12, 2011 Hitachi Zosen Corporation President & Chairman Minoru Furukawa 1

2 Contents I. Background of New Mid Term Business Plan II. Hitz 2016 Vision and New Mid Term Business Plan 2

3 I. Background of New Mid Term Business Plan 1. Changes in Business Environment Years History of Hitachi Zosen 3. Review of former Mid Term Business Plans - (HI & HI-II) Start of Company Reform - 4. Inauguration of Hitz 2016 Vision - Evolution to Highly Profitable Company with Public Recognition 3

4 1. Changes in Business Environment Until now: Tech Innovation Region Globally Japan - Economic growth mainly in developed countries (Europe and US) - Rapid growth of population - Increase of energy consumption (mass production and mass consumption) - Post war high economic growth - Became a developed country Electric Power Innovation Industrial Plant Innovation Europe US Japan Going forward: Globally Japan - Economic growth mainly by newly developed countries (China and others) Soaring price of raw material and food => Social unrest Impact over environment => Limit of growth potential - Decrease of population, Aging of the population Market contraction IT Innovation? Global 4

5 Years History of Hitachi Zosen Unit: 80,000 '000 Gross tons 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Shipbuilding volume-by country Oil Shock Europe Market Contraction Yen Appreciation Fierce Competition China Korea Japan 1881 E.H. Hunter, a British entrepreneur, founded the Co Post war economic growth Growth driven by Shipbuilding Slump of Shipbuilding mkt. Fierce competition Net Sales (unit: bil. Yen) Financial Results of Hitachi Zosen Sales other than Shipbuilding Sales other than Shipbuilding Sales of Shipbuilding Oper. Profit Ordinary Income (unit: bil. Yen) (Note) Hitachi Zosen started its business as shipbuilding company. Company s name Zosen means shipbuilding in Japanese (50.0) (100.0) - Booked substantial loss - Restructuring of the Co. - Separation of Shipbuilding business Strategic Reform of the Co. 5

6 3. Review of Former Mid Term Business Plans - (HI & HI-II) Start of Company Reform - Control of Business Process Prevention of Loss Making Large Contracts Stop Deficit Operation Transform Corporate Culture Enhance Group Unity Mostly Achieved Approval process before Order intake Periodical review at construction stage Sale or withdrawal via portfolio management Compliance committee, External consultants, President/employee forum Merger of 10 affiliates, On-going seminars for directors Transform Business & Corp. In Process Set up Business Strategy and Implementation New Products and New Business Human Resources Training Corporate Culture (Priority in BU Profit & Consensus) Business strategy meeting R&D conference, Development to meet customer requirements Training of management class officers, Review training system, Career plan, HR committee Promotion of corporate culture reform, Priority for optimization over whole co. 6

7 4. Inauguration of Hitz 2016 Vision Evolution to Highly Profitable Company with Public Recognition 6% 15% 19% 19% 23% 23% 30% Shareholders' e q u i t y r a t i o H i t z I n n o v a t i o n H i t z V i s i o n Hi tz Vision Next Mid Term Business Plan [Restructuring of Company Basis] - Prevent Loss of Large Contracts - Group Company Unity - Corporate Culture Reform [Evolution to Highly Profitable Company with Public Recognition] - Expansion of Net sales to Yen 500 billion - No. 1 Profitability in each business segments - Shareholders equity ratio over 30% 7

8 II. Hitz 2016 Vision and New Mid Term Business Plan 1. Hitz 2016 Vision 2. Key Measure for New Mid Term Business Plan 2-1. Innovation of Business 2-2. Innovation of Management Control 3. Financial Target New Mid Term Business Plan and FY2016 8

9 1. Hitz 2016 Vision Evolution to Highly Profitable Co. with Public Recognition [1] Expand Net sales to Yen 500 billion While investing Yen 20 billion (4% of Net sales) in Research & Development, secure Yen 30 billion Operating profit (6% of Net sales). [2] No.1 profitability in each business segments [3] Achieve shareholders equity ratio of 30% by FY2013 9

10 2. Key Measure for New Mid Term Business Plan Innovation of Business Innovation of Mgmt. Control Define Growth Area Strengthen the Growth Area Global Business Proposal for Solution Improvement of Fundamental Earning Power No. 1 Profitability in each business segments Organization Define Business Domain and Target Market Newly established Global Business Promotion Division Expansion of overseas office Promotion of Customers' View Activities New R&D System Well-balanced Business Portfolio PDCA of Business Strategy Promotion of Flat Matrix Management Financial Position Shareholders' equity ratio of 30% by FY 2013 Further improvement of credit rating R&D to Future Profit Transform Corporate Culture New R&D Organization (Business & Product Development HQ) Joint Work with Business Planning Dept. and Business & Product Development HQ Secure Aggressive, Growth Driven, Efficiency-minded culture Promote Proactive Staff 10

11 2-1. Innovation of Business Define Growth Area (1) Define Growth Area [Technology of Hitachi Zosen] Technology to cope with Japanese social issue - Environmental issue and energy saving - Social infrastructure for safety and security Advanced technology for future [Business Domain] A. Green Energy B. Social Infrastructure and Disaster Prevention [Economic & Social Changes] Economic growth in newly developed countries - Environmental problem - Requirement for infrastructure - Shortage of energy and water New issues for developed countries - Aging of infrastructure - Attain social safety and security Growth Area [Target Markets] - Newly Developed Countries - Advanced Business Field 11

12 2-1. Innovation of Business Define Growth Area (2) A. Green Energy (1) --- Refuse Incineration (EfW) [Current Issue] - Source of energy with low environmental impact -Waste treatment with social safety and security Global strategy of EfW Acquisition of Hitachi Zosen Inova Hitz Inova Saturated Mkt. Japan Top-tier track record => Promotion of O&M Growth Mkt. China No. 1 in new EfW EPC + Promotion of O&M Saturated Mkt. Germany, Swiss Top-tier track record Growth Mkt. EfW: Energy from Waste UK, Spain, Scandinavia, US Achieve No. 1 position in new EfW EPC O&M: Operation & Maintenance Saturated Mkt. Growth Mkt. Potential Mkt. in future 12

13 2-1. Innovation of Business Define Growth Area (2) Green Energy (2) --- Solar Power [Current Issue] - Heavy and difficult to handle - High cost - No indoor power generation Film Circuit manufacturing process --- Light weight and low cost Dye Sensitized Solar Cell --- Indoor power generation, Low cost Laser patterning technology --- Cost reduction via automation 13

14 2-1. Innovation of Business Define Growth Area (3) Green Energy (3) --- Reduction of Nox & Co2 [Current Issue] - Mitigation and reduction of Nox - Reduction of greenhouse gases such as Co2 Ethanol Dehydration System --- Reduction of Co2 Electronically Controlled Marine Diesel Engines --- Reduction of Co2 & Nox Selective Catalytic Reduction (SCR) system for industrial plants SCR system for Marine Diesel Engines --- Removal of Nox ORC (Organic Rankine Cycle) Mid to Low Temperature Heat Recovery Power Generation --- Reduction of Co2 14

15 2-1. Innovation of Business Define Growth Area (3) B. Social Infrastructure & Disaster Prevention (1) Shortage of water Aging of social infrastructure Requirement of social infrastructure Counter measure for Tsunami [Water Related Business] -Desalination and Potabilization Plants - Water Treatment System [Infrastructure] - Bridges - Hydraulic Gates - Shield Tunneling Machine - EfW [Maintenance of Infrastructure] Maintenance and replacement of Bridges and Hydraulic Gates [Disaster Prevention] - GPS Comprehensive Oceanographic Monitoring System - Flap Gate-Type Wave Breaker 15

16 2-1. Innovation of Business Define Growth Area (3) B. Social Infrastructure & Disaster Prevention (2) --- Shield Tunneling Machine Expected Market Size Asia (Excluding Japan) Year China India Taiwan 95 billion Yen Korea 16

17 2-1. Innovation of Business Define Growth Area (3) B. Social Infrastructure & disaster prevention (3) GPS Comprehensive Oceanographic Monitoring System Deployed 15 systems Data released (12 systems) Under installation (3 systems) Flap Gate-Type Wave Breaker 17

18 2-1. Innovation of Business Innovation of Business Innovation of Mgmt. Control Define Growth Area Strengthen the Growth Area Global Business Proposal for Solution Improvement of Fundamental Earning Power No. 1 Profitability in each business segments Organization Define Business Domain and Target Market Newly established Global Business Promotion Division Expansion of overseas office Promotion of Customers' View Activities New R&D System Well-balanced Business Portfolio PDCA of Business Strategy Promotion of Flat Matrix Management Financial Position Shareholders' equity ratio of 30% by Year 2013 Further improvement of credit rating R&D to Future Profit Transform Corporate Culture New R&D Organization (Business & Product Development HQ) Joint Work with Business Planning Dept. and Business & Product Development HQ Secure Aggressive, Growth Driven, Efficiency-minded culture Promote Proactive Staff 18

19 2-1. Innovation of Business Strengthen the Growth Area (1) Enhancement of Overseas Business [Establishment of Global Business Promotion Division] Global Business Promotion Division Sales Dept. Business Promotion Dept. Investment Project Dept. Administration Dept. Co-work Other Division Overseas office Research and intelligence of global business Strategy for company-wide optimization and synergy Acceleration of Global Business 19

20 2-1. Innovation of Business Strengthen the Growth Area (2) Proposal for Solution [Customers View Oriented Activities] - Find Customers issue and R&D task [Move to New R&D System] - R&D to provide solution for Customers, Speed-up creation of new business R&Ds to provide solution for Customers' Issue Management Engineering HQ Machinery & Infrastructure HQ Precision Machinery HQ Business & Product Development HQ Product Development Center Product Development Center Product Development Center Product Development Project Dept. Respective BU Respective BU Respective BU Technical Research Institute 20

21 2-1. Innovation of Business Innovation of Business Innovation of Mgmt. Control Define Growth Area Strengthen the Growth Area Global Business Proposal for Solution Improvement of Fundamental Earning Power No. 1 Profitability in each business segments Organization Define Business Domain and Target Market Newly established Global Business Promotion Division Expansion of overseas office Promotion of Customers' View Activities New R&D System Well-balanced Business Portfolio PDCA of Business Strategy Promotion of Flat Matrix Management Financial Position Shareholders' equity ratio of 30% by Year 2013 Further improvement of credit rating R&D to Future Profit Transform Corporate Culture New R&D Organization (Business & Product Development HQ) Joint Work with Business Planning Dept. and Business & Product Development HQ Secure Aggressive, Growth Driven, Efficiency-minded culture Promote Proactive Staff 21

22 2-1. Innovation of Business Improvement of Profitability (1) Improvement of Profitability [Well-balanced Business Portfolio] Unit: billion Yen FY2010 FY2016 Domestic % % [Domestic sales vs. Overseas sales] Overseas 17% 30% Overseas % % New Business/Products % [O&M] 40% 50% Total % % (Including O&M and others) (115.5) (40%) (250.0) (50%) [Cost Reduction] Int'l Procurement, Expand inter-group trade, Utilize ICT [New Business & New Products] Yen 0.1 bil. 50bil. 22

23 2-1. Innovation of Business Improvement of Profitability (1) No1 Profitability in each business segments [Ensure PDCA of business strategy] : Business strategy as per company-wide standard measurement - Define the value provided to customers - Define the value provided to customers - Growth thru. new new & global & global business business - Secure stable stable income income source source Business model to provide solution to customers - Business model to provide solution to customers : Promote concrete measures : Check business strategy and concrete measures by Management : Feedback, advice and instruction to business strategy 23

24 2-2. Innovation of Administration Innovation of Business Innovation Innovation of of Mgmt. Control Control Define Growth Area Strengthen the Growth Area Global Business Proposal for Solution Improvement of Fundamental Earning Power No. 1 Profitability in each business segments Organization Define Business Domain and Target Market Newly established Global Business Promotion Division Expansion of overseas office Promotion of Customers' View Activities New R&D System Well-balanced Business Portfolio PDCA of Business Strategy Promotion of Flat Matrix Management Financial Position Shareholders' equity ratio of 30% by Year 2013 Further improvement of credit rating R&D to Future Profit Transform Corporate Culture New R&D Organization (Business & Product Development HQ) Joint Work with Business Planning Dept. and Business & Product Development HQ Secure Aggressive, Growth Driven, Efficiency-minded culture Promote Proactive Staff 24

25 3. Financial Target Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Operating profit (ratio) Ordinary income (ratio) % % % % % % % % unit: billion yen) % % Net income Int. bearing debt Below Shareholders equity ratio 22.9% 24.2% 29.1% 30.0% Above 30% 25

26 3. Financial Target Investment unit: billion Yen) FY HI Plan- Actual 3 years total FY Hitz-V plan 3 years total R&D expenses Capital investment M&A & others Total /p. a /p.a. No. of personnel 8,528 March ,693 March

27 3. Financial Target Order Intake by Segment Actual Hitz-V Plan Hitz 2016 Vision Order Intake unite: bil. yen 27

28 3.Financial Target by Segment P&L unit: billion yen) Actual Hitz-V Plan Hitz2016 FY2010 FY2011 FY2012 FY2013 FY2016 Net sales Oper. profit Net sales Oper. profit Net sales Oper. profit Net sales Oper. profit Net sales Oper. profit Environmental Systems Plants Machinery Process Equiment Infrastructure Precision Machinery Other Total

29 3. Financial Target (by Segment Environmental Systems Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) Order intake Net sales Oper. profit FY 2010 FY 2011 FY 2012 FY 2013 FY 2016 unit: billion yen) Oper. profit (unit: bil. yen) 29

30 Plants 3. Financial Target (by Segment unit: billion yen) Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order Intake Net sales Oper. profit Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) -50 FY2010 FY2011 FY2012 FY2013 FY Oper. profit (unit: bil. yen)

31 Machinery 3. Financial Target (by Segment unit: billion yen) Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) Order intake Net sales Oper. profit FY2010 FY2011 FY2012 FY2013 FY Oper. profit (unit: bil. yen) 31

32 3. Financial Target (by Segment Process Equipments unit: billion yen) Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Oper. profit Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) FY2010 FY2011 FY2012 FY2013 FY Oper. profit unit: bil. yen) 32

33 Infrastructure 3. Financial Target (by Segment unit: billion yen) Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) Order intake Net sales Oper. profit FY2010 FY2011 FY2012 FY2013 FY Oper. profit unite: bil. yen) 33

34 3. Financial Target (by Segment Precision Machinery unit: billion en) Actual Hitz-V Plan Hitz2016Vision FY2010 FY2011 FY2012 FY2013 FY2016 Order intake Net sales Oper. profit Order intake & Net sales unit: bil. yen) Order intake Net sales Oper. Profit FY2010 FY2011 FY2012 FY2013 FY Oper. profit unit: bil. yen) 34

35 Technology for the earth and people 35

36 Cautionary Statement Forward-looking statements are based on information currently available to Hitachi Zosen Corporation. Therefore those forward-looking statements include unknown risks and uncertainties. Accordingly, you should note that the actual results could differ materially from those forward-looking statements. Risks and uncertainties that could influence the ultimate outcome include, but are not limited to, the economic conditions surrounding Hitachi Zosen Corporation and/or exchange rate fluctuation. 36