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Earnings presentation6501Hitachi,Ltd.Electrical Equipment and Precision Instruments

Progress on the Management Plan "Inspire 2027"

Compared FY2025 results with the targets of “Inspire 2027” and presented progress in revenue growth, profitability, the Lumada business and ROIC. It also explained the performance of new businesses capturing AI demand, shareholder returns and growth investments.

Worth reading
49Recurring
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Improvement
Direction inferred from the company’s description.
Scale
8.2
Year-on-year change in revenue (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Medium-Term Management Plan PresentationFY2025 (fiscal year ending March 2026)10 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥10.6 trillion+8.2%
Operating profit margin12.4 % Adj. EBITA margin
What the company explained in this material
New initiatives
  • Expansion and full-scale rollout of HMAX
  • Expansion of the North American energy services business through an investment in Shermco
  • Strengthening AI development capabilities through synvert
  • Launch of HMAX Industry
  • Investment of more than ¥150 billion in the construction and expansion of US transformer plants
  • Opening of a railcar plant in Hagerstown, Maryland, US
  • Establishment with NVIDIA of an 800V DC power supply architecture for data centers
  • Development of space big data applications and silicon quantum computing
Key KPIsA metric the company considers important as a management benchmark.
  • ROIC12.4 %
    Year on year against the same period last year+1.5 percentage points
  • Core FCF¥1.2 trillion
    Year on year against the same period last year+50%
  • Lumada revenue ratio40 %
    Year on year against the same period last year+11 percentage points
  • Lumada Adj. EBITA margin16 %
    Year on year against the same period last year+1 percentage point
  • Overseas revenue (excluding Japan)¥6.7 trillion
    Year on year against the same period last year+11.2%
  • EPS176 yen
    Year on year against the same period last year+32%
Segment results
Energy
Revenue
¥3.2 trillion
Adjusted EBITA margin
12.9 %
Backlog
¥10 trillion+37.6%
Mobility
Revenue
¥1.3 trillion
Adjusted EBITA margin
9.2 %
Backlog
¥7.1 trillion+15.2%
Connective Industries
Revenue
¥3.1 trillion
Adjusted EBITA margin
11 %
Backlog
¥2.5 trillion+13.5%
Digital Systems & Services
Revenue
¥3.1 trillion
Adjusted EBITA margin
15.5 %
Backlog
¥1.8 trillion+11.2%
Medium-term management plan targets
Plan nameInspire 2027
Target fiscal yearFY2027
Revenue CAGR7~9%
Adjusted EBITA margin13~15%
CF conversionMore than 90%
ROIC12~13%
Lumada revenue ratio50%
Lumada Adj. EBITA margin18%
Comparison with FY2025 actual results
Revenue CAGRFY2025 actual: 8.2% year-on-year
Adjusted EBITA marginFY2025 actual: 12.4%
ROICFY2025 actual: 12.4%
Lumada revenue ratioFY2025 actual: 40%
Lumada Adj. EBITA marginFY2025 actual: 16%
Financial targets
ROIC
Target12~13%
Actual results12.4%
Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.
  • ¥300 100 million
    DetailsAdditional tariff costs from US reciprocal tariffs (outlook as of Q1)
  • ¥200 100 million
    DetailsRisk impact of the conflict in the Middle East in FY2026
Market Size / Share
  • AI market
    Scale100
  • Grid maintenance services market
    Scale15
  • Railway AI applications market
    Scale3
  • Frontline worker support market
    Scale10
  • Power infrastructure market for data centers
    Scale8
  • Potential market for space big data
    Scale150
  • Potential market for silicon quantum computing
    Scale100
Number of employees
Next-generation leadership talent550 people
AI professionals3.9 people
AI professionals_unit10,000 people
Employee engagement score73.3 people
Employee engagement score_unitpoints
Annual Dividend
¥0.2 trillion
Acquisition of treasury shares
¥0.3 trillion
PeriodJanuary–April 2026 (including an additional ¥0.1 trillion repurchase)
Contents of this document
ItemDetails
Document typeMedium-Term Management Plan Presentation
Fiscal Period CoveredFY2025 (fiscal year ending March 2026)
Net Sales¥10.6 trillion (YoY +8.2%)
Operating profit margin12.4 % (Adj. EBITA margin)
Segment resultsEnergy Revenue ¥3.2 trillion / Adjusted EBITA margin 12.9 % / Backlog ¥10 trillion (YoY +37.6%) / Mobility Revenue ¥1.3 trillion / Adjusted EBITA margin 9.2 % / Backlog ¥7.1 trillion (YoY +15.2%) / Connective Industries Revenue ¥3.1 trillion / Adjusted EBITA margin 11 % / Backlog ¥2.5 trillion (YoY +13.5%) / Digital Systems & Services Revenue ¥3.1 trillion / Adjusted EBITA margin 15.5 % / Backlog ¥1.8 trillion (YoY +11.2%)
Key KPIsROIC 12.4 %, Core FCF ¥1.2 trillion, Lumada revenue ratio 40 %, Lumada Adj. EBITA margin 16 %, Overseas revenue (excluding Japan) ¥6.7 trillion, EPS 176 yen
Number of employeesNext-generation leadership talent 550 people / AI professionals 3.9 people / AI professionals_unit 10,000 people / Employee engagement score 73.3 people / Employee engagement score_unit points
Risk amount incorporated into the outlookDetails Additional tariff costs from US reciprocal tariffs (outlook as of Q1) / Amount ¥300 100 million, Details Risk impact of the conflict in the Middle East in FY2026 / Amount ¥200 100 million
Medium-term management plan targetsPlan name Inspire 2027 / Target fiscal year FY2027 / Revenue CAGR 7~9% / Adjusted EBITA margin 13~15% / CF conversion More than 90% / ROIC 12~13% / Lumada revenue ratio 50% / Lumada Adj. EBITA margin 18% / Comparison with FY2025 actual results Revenue CAGR FY2025 actual: 8.2% year-on-year / Adjusted EBITA margin FY2025 actual: 12.4% / ROIC FY2025 actual: 12.4% / Lumada revenue ratio FY2025 actual: 40% / Lumada Adj. EBITA margin FY2025 actual: 16%
Financial targetsROIC Target 12~13% / Actual results 12.4%
Annual Dividend¥0.2 trillion
Acquisition of treasury sharesAmount ¥0.3 trillion / Period January–April 2026 (including an additional ¥0.1 trillion repurchase)
Market Size / ShareMarket AI market / Scale 100 over ¥1 trillion (2030), Market Grid maintenance services market / Scale 15 trillion yen (2035), Market Railway AI applications market / Scale ¥3 trillion (2030), Market Frontline worker support market / Scale ¥10 trillion (2030), Market Power infrastructure market for data centers / Scale ¥8 trillion (2030), Market Potential market for space big data / Scale 150 trillion yen (2035), Market Potential market for silicon quantum computing / Scale ¥100 trillion (2040)
New initiativesExpansion and full-scale rollout of HMAX, Expansion of the North American energy services business through an investment in Shermco, Strengthening AI development capabilities through synvert, Launch of HMAX Industry, Investment of more than ¥150 billion in the construction and expansion of US transformer plants, Opening of a railcar plant in Hagerstown, Maryland, US, Establishment with NVIDIA of an 800V DC power supply architecture for data centers, Development of space big data applications and silicon quantum computing
Items this document does not state (17)
Operating profitOrdinary incomeNet incomeGross Profit MarginSelling, general and administrative expensesResults for the three months of the current quarterFull-year earnings forecastProgress against full-year forecastSelf-assessment against the planBreakdown of Factors Affecting the ChangeUnit price and quantity metricsNumber of stores and locationsAssumptions Underlying the Business OutlookPayout ratioCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The expansion of the Lumada business, growth in the AI market, earnings growth and an increase in advance payments, expansion of the backlog, and business portfolio reforms were cited as factors contributing to growth and improved profitability.

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Progress on the Management Plan "Inspire 2027" | Hitachi,Ltd. (6501) timely disclosure | Komori