For the first half of FY 2024, due to factors including the expansion of Lumada and DX and the acquisition of large-scale platform projects in the public sector, our group consolidated sales, Adj. EBITA*1, and core free cash flow are all expected to be within our budget goals.
I would like to express my sincere appreciation to all executives and employees for your earnest efforts.
Recovery measures were implemented for various natural disasters such as earthquakes, heavy rains, and major typhoons, and the switch to new banknotes in Japan was handled with special support.
I would like to express my sincere appreciation for these efforts.
In the “Nikkei Computer Customer Satisfaction Survey 2024-2025” published by Nikkei Business Publications, Inc. in August, our company won first place in both the “System Development Services (Manufacturer)” and “System Operation Services (Manufacturer)” categories, as we did last year as well.
I believe that this is the result of your efforts to support digital transformation by working closely with our customers and thoroughly discussing all approaches to solving their issues. I ask you to continue with these efforts.
*1 Adj. EBITA = (adjusted operating profit) - (depreciation of intangible assets, etc., involved in acquisition) + (profits or losses due to the equity method)
For FY 2024, the DSS sector of Hitachi, Ltd. has established a management policy for thoroughly improving profitability, achieving the 2024 Mid-Term Management Plan, and acquiring global profitability comparable to that of our competitors. To achieve this, the sector is attempting to acquire new growth opportunities using generative AI. Specifically, we will invest 300 billion yen into generative AI, promoting “infrastructure development,” “enhancement of services and engineering,” and “expansion of generative AI human resources” in order to evolve Lumada into its next phase.
In light of these trends throughout the entire Hitachi Group, it is my hope that we at Hitachi Systems will not only reliably achieve our 2024 Mid-Term Management Plan, but will also create a smooth start for our next Mid-Term Management Plan.
Please continue to carry out work in the second half of this fiscal year in accordance with the following six strategies.
In order to achieve sustainable growth through a positive cycle, we must further expand our profits.
To that end, it is important for us to “improve productivity through the use of generative AI and the like” and to “prevent the occurrence of loss cost.” I ask that you use generative AI to expand our DX services, which can help reform customer work processes, as well as to reform our own development, operation, and maintenance work.
Also, as measures to prevent the occurrence of loss cost, I ask that you enhance quality management, thoroughly manage projects, and select projects based on the resources available.
To achieve even further growth, we need to maximize our human resources and organizational strength.
In order for each and every employee to maximize their potential and create their own unique growth story, we at Hitachi Systems are promoting “SMILE∞2.0,” a human resources strategy that supports employees from the two pillars of “growth opportunities” and “safety and peace of mind.” By combining these two pillars, we aim to create new value for both the individual and the company.
You should feel secure in your workplace and know that “this is where you belong.” I would like you to feel confident that you are contributing to the growth of the organization as you achieve your own personal growth through your work.
Last fiscal year, we organized systematic measures for promoting compliance management, issuing the “Compliance Fundamentals Handbook” and engaging in activities through workplace meetings.
It is important for each individual to act in accordance with the basis that “right and wrong is more important than profits and losses,” and to make decisions using the priority order of “S (Safety) >> Q (Quality) > D (Delivery time) > C (Cost).” Let us work together to create a corporate culture where people observe the rules and raise their voices if there is a problem to solve it through workplace discussions. The first step towards achieving that is eliminating harassment. Please carry out organization-wide responses as well as use the whistleblowing system.
The most important thing is the health and happiness of each individual. I ask that you take your own health management seriously and always stay aware of the fact that “you are responsible for protecting your own health” so that you may live a fulfilling life with family and friends. The company will also promote the enhancement of our safety nets for physical and mental health by further promoting the use of Concare*2 and performing follow-up checks for employees who require re-examination or consultations after their employee health checks.
I also ask that, in cooperation with the 901 campaign, you avoid drinking in excessive amounts and for long periods of time.
*2 Concare: In this service, each employee registers their daily mood with a weather mark, which is then used to visualize their condition from the changes and notify them of signs of poor health.
I would like to conclude my message by offering my best wishes for a second half of this fiscal year full of healthy, bright, and fulfilling days for our customers, partners, Hitachi Systems Group employees and their families, and all other stakeholders.
October 18, 2024
Setsuo Shibahara
President and CEO
Hitachi Systems, Ltd.
* This translation is a message shared with the employees of Hitachi Systems, Ltd. on October 1, 2024.
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