Hitachi : Consolidated Financial Results for the Year Ended March 31, 2024

FOR IMMEDIATE RELEASE

Hitachi Announces Consolidated Financial Results for Fiscal 2023

Tokyo, April 26, 2024 --- Hitachi, Ltd. (TSE:6501) today announced its consolidated financial results for fiscal 2023, ended March 31, 2024.

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Summary

(Billions of yen)

		Year ended	Year ended	(B)/(A)
		March 31, 2023 (A)	March 31, 2024 (B)	(%)
1.	Revenues	10,881.1	9,728.7	89
2.	Adjusted operating income	748.1	755.8	101
3.	Adjusted EBITA
	(Adjusted Earnings before interest, taxes	884.6	918.1	104
	and amortization)
4.	Income before income taxes	819.9	825.8	101
5.	Net income	703.8	626.7	89
6.	Net income attributable to	649.1	589.8	91
	Hitachi, Ltd. stockholders
7.	Earnings per share attributable to	(Yen)	(Yen)
	Hitachi, Ltd. stockholders
	Basic	684.55	634.57	93
	Diluted	683.89	633.75	93

Notes: 1. The Company's consolidated financial statements are prepared based on IFRS.

1. "Adjusted operating income" is presented as revenues less cost of sales as well as selling, general and administrative expenses.
2. "Adjusted EBITA" = Adjusted operating income + Acquisition-related amortization + Share of profits(losses) of investments accounted for using the equity method.
3. The figures are for 573 consolidated subsidiaries and 369 equity-method associates and joint ventures.

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1. Qualitative Information Concerning Consolidated Business Results

(1) Summary of Fiscal 2023 Consolidated Business Results

				(Billions of yen)
		Year Ended		Year over year
		March 31, 2024		change
Revenues		9,728.7		(11%)
Adjusted operating income		755.8		+7.6
Adjusted EBITA		918.1		+33.5
Income before income taxes		825.8		+5.8
Net income		626.7		(77.1)
Net income attributable to Hitachi, Ltd. stockholders		589.8		(59.2)

For fiscal 2023, the Hitachi's consolidated revenues were 9,728.7 billion yen, decreased 11% year over year. While decreased due to changing Hitachi Astemo to equity method affiliate, the revenues of three sectors increased due to robust domestic and oversea DX demand and Lumada business expansion in Digital Systems & Services sector, robust business performance in Hitachi Energy and Railway Systems in Green Energy & Mobility sector, and Connective Industries sector.

Adjusted operating income increased 7.6 billion yen year over year, to 755.8 billion yen. Digital Systems

• Services sector, Green Energy & Mobility sector, and Connective Industries sector increased the profits.

Adjusted EBITA increased 33.5 billion yen year over year, to 918.1 billion yen. The increase was mainly due to the increase equity in earnings of affiliates as well as the increase in adjusted operating income.

Income before income taxes increased 5.8 billion yen year over year, to 825.8 billion yen. The increase was due to the increase in adjusted operating income, share selling of Hitachi Astemo, etc.

Net income decreased 77.1 billion yen year over year, to 626.7 billion yen due to income tax increase. Net income attributable to Hitachi, Ltd. stockholders decreased 59.2 billion yen year over year, to 589.8 billion yen.

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(2) Business Results by Segments

Please refer to the presentation material, "Outline of Consolidated Financial Results for the Year Ended March 31, 2024."

(3) Outlook for Fiscal 2024

				(Billions of yen)
		Year Ending		Year over year
		March 31, 2025		change
Revenues		9,000.0		(7%)
Adjusted operating income		855.0		+99.1
Adjusted EBITA		1,035.0		+116.8
Income before income taxes		850.0		+24.1
Net income		630.0		+3.2
Net income attributable to Hitachi, Ltd. stockholders		600.0		+10.1

Reflecting these business environments, Hitachi forecasts the results shown above for fiscal 2024, the year ending March 31, 2025.

Projections for fiscal 2024 assume exchange rates of 140 yen to the U.S. dollar and 150 yen to the euro.

Hitachi will accelerate the global expansion of its Social Innovation Business through collaborative creation with customers, persist with its business structural reforms and pursue efforts to strengthen its business foundations by reviewing its business portfolio, with the aim of achieving sustainable growth.

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2. Financial Position

(1) Financial Position

				(Billions of yen)
		As of		Change From
		March 31, 2024		March 31, 2023
Total assets		12,221.2		(280.1)
Total liabilities		6,361.6		(804.1)
Interest-bearing debt		1,180.0		(1,033.3)
Total Hitachi, Ltd. stockholders' equity		5,703.7		+760.8
Non-controlling interests		155.8		(236.8)
Cash Conversion Cycle		54.2 days		3.9 days decrease
Total Hitachi, Ltd. stockholders' equity ratio		46.7%		7.2 points increase
D/E ratio (including non-controlling interests)		0.20 times		0.21 points decrease

Total assets decreased 280.1 billion yen from March 31, 2023, to 12,221.2 billion yen, mainly due to changing Hitachi Astemo to equity method affiliate, etc. Interest-bearing debt decreased 1,033.3 billion yen from March 31, 2023, to 1,180.0 billion yen, mainly due to changing Hitachi Astemo to equity method affiliate, reimbursement, etc. As of March 31, 2024, the total Hitachi, Ltd. stockholders' equity increased

1. billion yen from March 31, 2023, to 5,703.7 billion yen. As a result, the total Hitachi, Ltd. stockholders' equity ratio was 46.7%. The debt-to-equity ratio, including non-controlling interests, was

1. times and Cash Conversion Cycle was 54.2 days.

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(2) Cash Flows

				(Billions of yen)
		Year Ended		Year over year
		March 31, 2024		change
Cash flows from operating activities		956.6		+129.5
Cash flows from investing activities		(131.5)		(282.6)
Free cash flows		825.0		(153.0)
Cash flows from financing activities		1,024.9		+118.0

Operating activities provided net cash of 956.6 billion yen, 129.5 billion yen more than in the previous fiscal year, mainly due to the improvement of working capital and net gain on business reorganization and others. Investing activities used net cash of negative 131.5 billion yen, 282.6 billion yen less than in the previous fiscal year, mainly due to the decrease of business divestures. Free cash flows were 825.0 billion yen, 153.0 billion yen less than in the previous fiscal year. Financing activities used net cash of negative 1,024.9 billion yen, 118.0 billion yen more than in the previous fiscal year, mainly due to the decrease of Purchase of shares of consolidated subsidiaries from non-controlling interests and others while the decrease of short-term debt.

Accordingly, cash and cash equivalents were 705.3 billion yen, down 127.9 billion yen from the end of the previous fiscal year.

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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.

Factors that could cause actual results to differ materially from those projected or implied in any "forward-looking statement" and from historical trends include, but are not limited to:

• economic conditions, including consumer spending and plant and equipment investment in Hitachi's major markets, as well as levels of demand in the major industrial sectors Hitachi serves;
• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi's assets and liabilities are denominated;
• uncertainty as to Hitachi's ability to access, or access on favorable terms, liquidity or long-term financing;
• uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds;
• fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components;
• credit conditions of Hitachi's customers and suppliers;
• general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;
• uncertainty as to Hitachi's ability to response to tightening of regulations to prevent climate change;
• uncertainty as to Hitachi's ability to maintain the integrity of its information systems, as well as Hitachi's ability to protect its confidential information or that of its customers;
• uncertainty as to Hitachi's ability to attract and retain skilled personnel;
• uncertainty as to Hitachi's ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance for such products;
• exacerbation of social and economic impacts of the spread of COVID-19;
• the possibility of disruption of Hitachi's operations by natural disasters such as earthquakes and tsunamis, the spread of infectious diseases, and geopolitical and social instability such as terrorism and conflict;
• estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses the percentage- of-completion method to recognize revenue from sales;
• increased commoditization of and intensifying price competition for products;
• fluctuations in demand of products, etc. and industry capacity;
• uncertainty as to Hitachi's ability to implement measures to reduce the potential negative impact of fluctuations in demand of products, etc., exchange rates and/or price of raw materials or shortages of materials, parts and components;
• uncertainty as to the success of cost structure overhaul;
• uncertainty as to Hitachi's ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;
• uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances and the possibility of incurring related expenses;
• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness;
• the potential for significant losses on Hitachi's investments in equity-method associates and joint ventures;
• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity-method associates and joint ventures have become or may become parties;
• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

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• uncertainty as to Hitachi's access to, or ability to protect, certain intellectual property; and
• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related costs.

The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in this report and in other materials published by Hitachi.

*This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

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3. Basic Stance on Accounting Standard Selection

Hitachi, Ltd. applied International Financial Reporting Standards (IFRS), starting with the consolidated financial statements in its annual securities report for fiscal 2014, the year ended March 31, 2015. IFRS was applied in response to globalization, with the primary goal of building a uniform standard for evaluating operating results, standardizing operations, and improving management efficiency of the Hitachi Group.

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Consolidated Statement of Profit or Loss

					(Millions of yen)
			Year ended	Year ended	(B)/(A)
			March 31, 2023 (A)	March 31, 2024 (B)	(%)
Revenues	10,881,150	9,728,716	89
Cost of sales	(8,192,063)	(7,146,629)	87
		Gross profit	2,689,087	2,582,087	96
Selling, general and administrative expenses	(1,940,943)	(1,826,271)	94
		Adjusted operating income	748,144	755,816	101
Other income	302,196	116,653	39
Other expenses	(245,016)	(97,184)	40
Financial income	7,878	17,388	221
Financial expenses	(20,417)	(10,015)	49
Share of profits (losses) of investments accounted for using	52,847	75,284	142
	the equity method
		EBIT (Earnings before interest and taxes)	845,632	857,942	101
Interest income	25,652	38,781	151
Interest charges	(51,313)	(70,922)	138
		Income before income taxes	819,971	825,801	101
Income taxes	(116,101)	(199,053)	171
		Net income	703,870	626,748	89
		Net income attributable to:
		Hitachi, Ltd. stockholders	649,124	589,896	91
		Non-controlling interests	54,746	36,852	67

Earnings per share attributable to Hitachi, Ltd. stockholders

Basic

Diluted

Yen

684.55

683.89

Yen

634.57

633.75

93

93

Consolidated Statement of Comprehensive Income

							(Millions of yen)
					Year ended	Year ended	(B)/(A)
					March 31, 2023 (A)	March 31, 2024 (B)	(%)
	Net income	703,870	626,748	89
	Other comprehensive income (OCI)
		Items not to be reclassified into net income
		Net changes in financial assets measured at	21,484	45,156	210
			fair value through OCI
		Remeasurements of defined benefit plans	40,202	13,872	35
		Share of OCI of investments accounted for	1,511	1,437	95
			using the equity method
				Total items not to be reclassified into net income	63,197	60,465	96
		Items that can be reclassified into net income
		Foreign currency translation adjustments	232,360	354,395	153
		Net changes in cash flow hedges	7,265	14,915	205
		Share of OCI of investments accounted for	14,595	22,025	151
			using the equity method
				Total items that can be reclassified into net income	254,220	391,335	154
		Other comprehensive income (OCI)	317,417	451,800	142
	Comprehensive income	1,021,287	1,078,548	106
	Comprehensive income attributable to:
		Hitachi, Ltd. stockholders	905,819	1,013,811	112
		Non-controlling interests	115,468	64,737	56

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