Hitachi Announces Conclusion of Absorption-type Split Agreement to Strengthen the Energy and Facility Management Service Business by Company Split
January 29, 2024 at 03:32 pm
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Tokyo - Hitachi, Ltd. (TSE: 6501, 'Hitachi') today announced that it has concluded an absorption-type split agreement (the 'Absorption-Type Split Agreement') with Hitachi Power Solutions Co., Ltd. ('Hitachi Power Solutions'), a wholly owned subsidiary of Hitachi, for the company split announced on December 13, 20231 (the 'Company Split').
Details of the matters that were undecided in the news release dated December 13, 2023 as follows. The matters which have been changed since the previous news release are underlined. Through the Company Split, Hitachi will take over its Carbon Neutral Development Division under the Energy Business Division, which is responsible for energy and facility management service business and distributed energy resources solutions business to Hitachi Power Solutions for the purpose of strengthening and expanding its energy and facility management service business for the Japanese market in order to further support customers' decarbonization
With the Absorption-Type Split Agreement, Hitachi will promote the consolidation of its energyrelated technologies, knowledge, and consulting capabilities that the Carbon Neutral Development Division has cultivated over many years to Hitachi Power Solutions and combine them with digital services and field services that are the strengths of Hitachi Power Solutions. As a result, Hitachi will contribute to customers' decarbonization and the enhancement of their corporate value by growing its energy and facility management service business through strengthening the cycle of Lumada's Co-creation Framework, which is to understand customers' management challenges, develop and implement solutions with IT/OT/products, and operate and maintain and assess for the next step while co-creating with various customers such as electricity suppliers, local communities, consumers, and financial institutions. Furthermore, through the complementary relationship between the Carbon Neutral Development Division and Hitachi Power Solutions, we will expand domains where solutions and services can be proposed. This allows us to provide optimal one-stop solutions and services to customers in different business sectors with businesses of various sizes. Consequently, Hitachi aims to expand revenues from Hitachi Power Solutions' carbon neutrality-related business.
As a result of the Company Split, Hitachi Power Solutions' carbon neutrality-related business (solar power generation systems, cogeneration systems, etc.2) is projected to increase its revenues by approximately 7 billion yen to more than 20 billion yen in fiscal 2024. In addition, Hitachi aims to expand revenues from Hitachi Power Solutions' carbon neutrality-related business to over 30 billion yen in fiscal 2027 by strengthening its energy and facility management service business and expanding domains where solutions and services can be proposed. In the medium to long term, we will aim for further growth with a view to expanding its energy and facility management service business into overseas markets.
Cautionary Statement
Certain statements found in this document may constitute 'forward-looking statements' as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such 'forward-looking statements' reflect management's current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as 'anticipate,' 'believe,' 'expect,' 'estimate,' 'forecast,' 'intend,' 'plan,' 'project' and similar expressions which indicate future events and trends may identify 'forward-looking statements.' Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the 'forward-looking statements' and from historical trends. Certain 'forward-looking statements' are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on 'forward-looking statements,' as such statements speak only as of the date of this report.
Hitachi specializes in manufacturing and marketing of electronic and industrial equipments. Net sales (including intragroup) break down by family of products and services as follows:
- social infrastructure and industrial systems (24.7%): elevators, escalators, industrial facilities, railway systems, power generation units, etc. The group also provides engineering and construction of nuclear, hydroelectric, and thermal power plants services;
- information and telecommunications products and services (20.1%): systems integration, cloud computing, software, servers, hard disks, PCs, ATMs, data communication base stations, payment terminals, etc.;
- materials and components (16.6%): semi-conductor materials, printed circuit cards, cables, copper and forged steel products, magnetic materials, organic and inorganic chemical products, etc.;
- construction equipment (10%) : hydraulic excavators, wheel loaders, mining equipment, etc.;
- automotive systems (9.4%): powertrain systems, control systems, etc.;
- electronic products (9.2%): fiber-optic components, screen tubes, testing and measurement equipment, medical equipment, equipment for manufacturing semiconductors, etc.;
- household appliances (4.7%): heating and air conditioning equipments, refrigerators, washing machines, etc.;
- other (5.3%): mainly transport, financial and logistical services.
Net sales are distributed geographically as follows: Japan (49.2%), Asia (21.3%), North America (12.7%), Europe (10.8%) and other (6%).
HITACHI, LTD. 
