New Mid Term Business Plan - Hitachi Zosen Corporation Mid Term... · 2012-12-03 · No1...

Step to Hitz 2016 Vision

May 12, 2011Hitachi Zosen Corporation

President & Chairman Minoru Furukawa

1

New Mid Term Business PlanFY2011 thru. FY2013

Contents

II. Hitz 2016 Vision and New Mid Term Business Plan

2

I. Background of New Mid Term Business Plan

I. Background of New Mid Term Business Plan

1. Changes in Business Environment2. 130 Years History of Hitachi Zosen3. Review of former Mid Term Business Plans

- (HI & HI-II) Start of Company Reform -4. Inauguration of Hitz 2016 Vision

- Evolution to Highly Profitable Companywith Public Recognition

3

1. Changes in Business Environment

Global

Europe

US

Japan

?

IT Innovation

Industrial Plant

Innovation

Electric Power

Innovation

1890

1930

1990

20?0

2010

TechInnovation Region

Globally

- Economic growth mainly in developed countries (Europe and US)

- Rapid growth of population- Increase of energy consumption

(mass production and mass consumption)

Japan- Post war high economic growth- Became a developed country

Globally

- 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

Japan- Decrease of population, Aging of the populationMarket contraction

Paradigm Sift

4

Until now:

Going forward:

2. 130 Years History of Hitachi Zosen

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

１９６１

１９６３

１９６５

１９６７

１９６９

１９７１

１９７３

１９７５

１９７７

１９７９

１９８１

１９８３

１９８５

１９８７

１９８９

１９９１

１９９３

１９９５

１９９７

１９９９

２００１

２００３

２００５

２００７

２００９

Oil Shock

Japan

Korea

China

Europe

Shipbuilding volume-by country

1881 E.H. Hunter, a British entrepreneur, founded the Co.

1950-1973Post war economic growth Growth driven by Shipbuilding

1974-2002Slump of Shipbuilding mkt. Fierce competition

(Note) Hitachi Zosen started its business as shipbuilding company. Company’s name “Zosen” means shipbuilding in Japanese.

Market Contraction

Fierce Competition

Yen Appreciation

(100.0)

(50.0)

0.0

50.0

100.0

150.0

200.0

300200100

0100200300400500600

Sales other than Shipbuilding Sales of Shipbuilding Oper. Profit

Financial Results of Hitachi Zosen

Sales other than Shipbuilding

5

Unit: '000 Gross tons

Net Sales(unit: bil. Yen)

Ordinary Income(unit: bil. Yen)

Strategic Reform of the Co.

- Booked substantial loss- Restructuring of the Co. - Separation of Shipbuilding business

3. Review of Former Mid Term Business Plans- (HI & HI-II) Start of Company Reform -

✦ Control of Business Process

✦ Transform Business & Corp.

Prevention of Loss Making Large Contracts

Approval process before Order intakePeriodical review at construction stage

Stop Deficit Operation Sale or withdrawal via portfolio management

Transform Corporate Culture Compliance committee, External consultants, President/employee forum

Enhance Group Unity Merger of 10 affiliates, On-going seminars for directors

Set up Business Strategy and Implementation

Business strategy meeting

New Products and New Business R&D conference, Development to meet customer requirements

Human Resources Training Training of management class officers, Review training system, Career plan, HR committee

Corporate Culture (Priority in BU Profit & Consensus)

Promotion of corporate culture reform, Priority for optimization over whole co.

⇒ Mostly Achieved

⇒ In Process

○

○

○

○

△

△

△

△6

4. Inauguration of Hitz 2016 VisionEvolution to Highly Profitable Company with Public Recognition

[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%

ＨＩ Plan ＨＩ Plan - ⅡNext Mid Term Business Plan

H i t z I n n o v a t i o n H i t z 2 0 1 6 V i s i o n

6% 15% 19% 19% 23% 23% 30%

Hitz Vision

Shareholders 'e q u i t y r a t i o

Net sales(unit: bil. Yen)

Oper. profit(unite: bil. Yen)

7

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 Business2-2. Innovation of Management Control

3. Financial TargetNew Mid Term Business Plan and FY2016

8

[1] Expand Net sales to Yen 500 billion While investing Yen 20 billion (4% of Net sales) inResearch & 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

Evolution to Highly Profitable Co. with Public Recognition

1. Hitz 2016 Vision

9

Innovation of

Business

✦Define Growth Area Define Business Domain and Target Market

✦Strengthen the Growth Area

✦Global Business

Newly established Global Business Promotion Division Expansion of overseas office

✦Proposal for Solution

Promotion of Customers' View ActivitiesNew R&D System

✦Improvement of Fundamental Earning Power

Well-balanced Business Portfolio

✦No. 1 Profitability in each business segments

PDCA of Business Strategy

Innovation of

Mgmt. Control

✦Organization Promotion of Flat Matrix Management

✦Financial Position Shareholders' equity ratio of 30% by FY 2013Further improvement of credit rating

✦R&D to Future Profit

New R&D Organization (Business & Product Development HQ)Joint Work with Business Planning Dept. and Business & Product Development HQ

✦Transform Corporate Culture

Secure Aggressive, Growth Driven, Efficiency-minded culturePromote Proactive Staff

✦Define Growth Area

Innovation of

Business

2. Key Measure for New Mid Term Business Plan

10

[Business Domain]A. Green EnergyB. Social Infrastructure and

Disaster Prevention

✦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

[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

2-1. Innovation of BusinessDefine Growth Area (1)

[Target Markets]- Newly Developed Countries- Advanced Business Field

Growth Area

11

HitzSaturated Mkt. Japan Top-tier track record

=> Promotion of O&M

Growth Mkt. China No. 1 in new EfW EPC+ Promotion of O&M

InovaSaturated Mkt. Germany, Swiss Top-tier track record

Growth Mkt. UK, Spain, Scandinavia, US

Achieve No. 1 position in new EfW EPC

EfW: Energy from Waste O&M: Operation & Maintenance

Saturated Mkt.

Growth Mkt.

Potential Mkt. in future

Acquisition of Hitachi Zosen Inova

2-1. Innovation of BusinessDefine 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

12

Ａ．Green Energy (2) --- Solar Power

2-1. Innovation of Business Define Growth Area (2)

★ Dye Sensitized Solar Cell--- Indoor power generation, Low cost

★ Laser patterning technology--- Cost reduction via automation

★ Film Circuit manufacturing process--- Light weight and low cost[Current Issue]

- Heavy and difficult to handle- High cost- No indoor power generation

13

★ Ethanol Dehydration System--- Reduction of Co2

Ａ．Green Energy (3) --- Reduction of Nox & Co2


★ ORC (Organic Rankine Cycle) Mid to Low Temperature HeatRecovery Power Generation--- Reduction of Co2

★ Selective Catalytic Reduction (SCR) system for industrial plants

★ SCR system for Marine Diesel Engines --- Removal of Nox

★ Electronically Controlled Marine Diesel Engines--- Reduction of Co2 & Nox

[Current Issue]- Mitigation and reduction of Nox- Reduction of greenhouse gases

such as Co2

14

B. Social Infrastructure & Disaster Prevention (1)

Shortage of water

Shortage of water

Requirement of social

infrastructure

Requirement of social

infrastructure

Aging of social infrastructureAging of social infrastructure

Countermeasure

for Tsunami

Countermeasure

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


B. Social Infrastructure & Disaster Prevention (2) --- Shield Tunneling Machine

ChinaTaiwan

Korea

South

East Asia

India

Expected Market SizeAsia (Excluding Japan) Year 2011-2013

95 billion Yen

16


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

Innovation of

Business



✦Global Business

Newly established Global Business Promotion DivisionExpansion of overseas office







Innovation of

Mgmt. Control


✦Financial Position Shareholders' equity ratio of 30% by Year 2013Further improvement of credit rating





2-1. Innovation of Business

18


Newly established Global Business Promotion Division Expansion of overseas office


Innovation of

Business

✦ Enhancement of Overseas Business[Establishment of Global Business Promotion Division]

Global Business Promotion

Division

Sales Dept.

Other DivisionBusiness Promotion Dept.

Overseas office

Investment Project Dept.

Administration Dept.

2-1. Innovation of BusinessStrengthen the Growth Area (1)

Acceleration of Global Business

◆ Research and intelligence of global business◆ Strategy for company-wide optimization

and synergy19

Co-work

Management

Engineering HQ

Product Development

Center

Respective BU

Machinery & Infrastructure

HQ

Product Development

Center

Respective BU

Precision Machinery HQ

Product Development

Center

Respective BU

Business & Product

Development HQ

ProductDevelopment Project Dept.

TechnicalResearch Institute

R&Ds to provide solution for Customers' Issue

✦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

2-1. Innovation of BusinessStrengthen the Growth Area (2)

20

Innovation of

Business



✦Global Business








Innovation of

Mgmt. Control









2-1. Innovation of Business



21

Innovation of

Business

✦Improvement of Profitability[Well-balanced Business Portfolio]

Unit: billion Yen FY2010 FY2016Domestic 237.5 83% 300.0 60%

Overseas 49.6 17% 150.0 30%

New Business/Products －－ 50.0 10%

Total 287.1 100% 500.0 100%

(Including O&M and others) (115.5) (40%) (250.0) (50%)

[Domestic sales

vs. Overseas sales]Overseas 17% 30%

[New Business& New Products]

Yen 0.1 bil. 50bil.

[O&M]40% 50%

2-1. Innovation of BusinessImprovement of Profitability (1)

[Cost Reduction]Int'l Procurement, Expand inter-group trade, Utilize ICT

22

✦No1 Profitability in each business segments[Ensure PDCA of business strategy]Ｐｌａｎ : Business strategy as per

company-wide standard measurement

- Define the value provided to customers- Growth thru. new & global business- Secure stable income source- Business model to provide solution to customers

Ｄｏ : Promote concrete measures

Ｃｈｅｃｋ : Check business strategy and concrete measures by Management

Ａｃｔｉｏｎ : Feedback, advice and instruction to business strategy

: Check business strategy and concrete measures by Management

2-1. Innovation of BusinessImprovement of Profitability (1)

- Define the value provided to customers- Growth thru. new & global business- Secure stable income source- Business model to provide solution to customers

23

Innovation of

Business



✦Global Business








Innovation of

Mgmt. Control







Innovationof

Mgmt. Control

2-2. Innovation of Administration

24

3. Financial Target

Actual Hitz-V Plan Hitz2016Vision

FY2010 FY2011 FY2012 FY2013 FY2016

Order intake 246.0 370.0 440.0 500.0 600.0Net sales 287.1 310.0 340.0 400.0 500.0

Operating profit(ratio)

13.3（4.7%）

14.0（4.5%）

15.5（4.6%）

20.0（5.0%）

30.0（6.0%）

Ordinary income(ratio)

12.0（4.2%）

13.0（4.2%）

13.5（4.0%）

16.0（4.0%）

25.0（5.0%）

Net income 9.6 10.0 10.5 11.5 15.0Int. bearing debt 104.6 114.4 100.0 100.0 Below 100.0

Shareholders’equity ratio 22.9% 24.2% 29.1% 30.0% Above 30%

（unit: billion yen)

25

3. Financial Target （Investment）

FY2008-2010〈HI Plan-ⅡActual〉

3 years total

FY2011-2013〈Hitz-V plan〉3 years total

R&D expenses 16.0 25.0Capital investment 27.3 30.0

M&A & others 4.0 20.0

Total 47.315.7/p. a.

75.025.0/p.a.

No. of personnel 8,528March 2011

9,693March 2014

26

（unit: billion Yen)

3. Financial Target（Order Intake by Segment）

Actual Hitz-V Plan Hitz 2016Vision

27

Order Intake（unite: bil. yen）

3.Financial Target （by Segment P&L）

Actual Hitz-V Plan Hitz2016FY2010 FY2011 FY2012 FY2013 FY2016

Net sales

Oper.profit

Net sales

Oper.profit

Net sales

Oper.profit

Net sales

Oper.profit

Net sales

Oper.profit

EnvironmentalSystems 93.1 5.7 130.0 6.1 138.0 7.0 165.0 9.2 180.0 12.0Plants 29.6 -2.2 39.5 0.4 48.0 0.7 62.0 1.3 86.0 4.6

Machinery 60.9 3.0 58.0 2.6 60.0 3.0 63.0 3.4 88.0 4.8Process

Equiment 17.3 1.6 9.0 0 14.0 0.4 19.0 0.9 30.0 1.5

Infrastructure 38.4 1.2 35.5 1.5 37.0 1.3 42.0 1.7 56.0 2.8Precision

Machinery 38.6 3.2 29.0 2.6 34.0 2.3 40.0 2.6 50.0 3.3Other 9.2 0.8 9.0 0.8 9.0 0.8 9.0 0.9 10.0 1.0Total 287.1 13.3 310.0 14.0 340.0 15.5 400.0 20.0 500.0 30.0

28


3. Financial Target (by Segment）

✦Environmental SystemsActual Hitz-V Plan Hitz2016Vision

FY2010 FY2011 FY2012 FY2013 FY2016Order intake 94.1 175.0 205.0 215.0 225.0Net sales 93.1 130.0 138.0 165.0 180.0Oper. profit 5.7 6.1 7.0 9.2 12.0

0.0

5.0

10.0

15.0

050

100150200250

FY 2010 FY 2011 FY 2012 FY 2013 FY 2016

Order intake Net sales Oper. profit

Oper. profit(unit: bil. yen)

29


Order intake & Net sales （unit: bil. yen)

✦PlantsActual Hitz-V Plan Hitz2016Vision

FY2010 FY2011 FY2012 FY2013 FY2016Order Intake 29.7 49.0 63.0 75.0 95.0Net sales 29.6 39.5 48.0 62.0 86.0Oper. profit -2.2 0.4 0.7 1.3 4.6

-2.5

0.0

2.5

5.0

-50

0

50

100

FY2010 FY2011 FY2012 FY2013 FY2016


30



Oper. profit(unit: bil. yen)Order intake

& Net sales （unit: bil. yen)

✦MachineryActual Hitz-V Plan Hitz2016Vision


0.0 1.0 2.0 3.0 4.0 5.0 6.0

020406080

100120

FY2010 FY2011 FY2012 FY2013 FY2016


31




Oper. profit(unit: bil. yen)

✦Process EquipmentsActual Hitz-V Plan Hitz2016Vision


0.0

0.5

1.0 1.5

2.0

2.5

0

10

2030

40

50

FY2010 FY2011 FY2012 FY2013 FY2016


32



Oper. profit （unit: bil. yen)


0.0

1.0

2.0

3.0

4.0

0

20

40

60

80

FY2010 FY2011 FY2012 FY2013 FY2016


✦InfrastructureActual Hitz-V Plan Hitz2016Vision




Oper. profit （unite: bil. yen)


33

✦Precision MachineryActual Hitz-V Plan Hitz2016Vision


0123456

0102030405060

FY2010 FY2011 FY2012 FY2013 FY2016

Order intake Net sales Oper. Profit

34

（unit: billion en)


Oper. profit （unit: bil. yen)


35

Technology for the earth and people

36

Cautionary StatementForward-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.

New Mid Term Business Plan - Hitachi Zosen Corporation Mid Term... · 2012-12-03 · No1...

Documents

Transcript of New Mid Term Business Plan - Hitachi Zosen Corporation Mid Term... · 2012-12-03 · No1...