FY 2026 First Half: President's Start of Term Message

I would like to share a few thoughts with you at the start of FY 2026.
First of all, today we welcome new members to our company, including new graduates as well as mid-career hires. I would like to extend my heartfelt welcome to all of you. I hope you will make full use of your experience and skills to contribute to our organization. I would also like to encourage teams welcoming new members to provide attentive support so that they can hit the ground running.

1. FY 2025 General Overview

The Hitachi Systems Group is expected to meet its budget targets and achieve all-time highs in revenue, adjusted EBITA^*1, and core free cash flow^*2 on a consolidated basis in FY 2025, mainly due to the system standardization project for municipal governments, the expansion of services for data centers driven by rising demand for generative AI, and the positive results of the Value UP activities.
I sincerely thank all of you for your dedicated efforts.

*1

Adjusted EBITA = (Operating profit) + (PPA amortization expense)

*2

Core free cash flow = (Operating cash flow) - (Capital investment)

2. For Sustainable Growth in the Future

The speed of technological progress such as the rise of AI is increasing even further. The Hitachi Group will keep pace with the evolution of physical AI and accelerate growth of Lumada 3.0 mainly by leveraging our next-generation solutions suite called HMAX, which can transform social infrastructure through AI. We aim to achieve sustainable growth by placing digital technologies at the core of our "True One Hitachi" initiative as set forth in our "Inspire 2027" management plan. As a member of the Hitachi Group, we should recognize that we must drive digitalization efforts across the OT and product business areas. Let us take advantage of the trust and achievements that we have established so far and continue to deliver value to society in line with "PLEDGES," the Hitachi Group's sustainability strategy.
Looking ahead to the future, we see fiscal year 2026 as a year to take on challenges that are greater than ever. Central to this effort is reimagining the business model of Hitachi Systems by getting the most out of AI. By implementing the Customer Zero approach (in which we perform implementation internally before extending it to our customers) based on the One Hitachi initiative, and by implementing AI transformation (AX) across the entire Hitachi organization and our customer organizations, we will establish a high-profit recurring model to continuously improve our services and deliver added value by integrating AI into our daily operations to drive business innovation, efficiency improvements, and service delivery.

3. Requests to Everyone

(1) Act with the mindset that your health is yours to protect

I would like to remind everyone once again that safety and health takes precedence over everything else.
When your mind and body are healthy, you can find greater fulfillment in both your work and your personal life. When you feel anxious or worried, you should not keep it to yourself. You should share it with your colleagues and help one another to overcome the issue. With the mindset that your health is yours to protect, I ask that you take daily actions that prioritize the health and happiness of yourself and your family.

(2) Make teamwork a priority

It is essential to share and combine our strengths beyond organizational boundaries to carry out projects that will have a significant impact on society. When people with different backgrounds and perspectives respect each other, acknowledge their differences, and exchange opinions frankly, new ideas are born and real change begins. I look forward to visiting our various business locations and having many meaningful conversations with each of you. Let us maintain a strong sense of "One (HISYS)" and "One Hitachi" as we move forward into fiscal year 2026.

(3) Act in accordance with "Basics and ethics," "Right and wrong is more important than profits and losses," and "S >> Q > D > C"

To make sure that the Hitachi Systems Group continues to grow sustainably and contribute to society, we must understand compliance not merely as a rulebook but as a business foundation that drives sustainable business growth. We must also follow our principles, which are "Basics and ethics," "Right and wrong over profit and loss," and "S (Safety) >> Q (Quality) > D (Delivery time) > C (Cost)." I ask that teams foster an open workplace culture that encourages organizational problem-solving without deviating from company rules, even when issues arise.

Finally, I would like to conclude my address today by wishing good health to all Hitachi Systems Group stakeholders, including our customers and business partners, as well as our colleagues and their families.

End