FY 2026 Second Half: President’s Start of Term Message

I would like to share a few thoughts with you at the start of the second half of FY 2026.

1. First Half General Overview

Regarding our performance in the first half of FY 2026, the Hitachi Systems Group is expected to meet its budget targets in revenue, adjusted EBITA^#1, and core free cash flow^#2 on a consolidated basis due to factors such as securing modernization projects in the public and financial sectors and capturing demand for SAP upgrades, as well as steady progress in initiatives such as the expansion of fee-based businesses following the standardization of municipal systems.
I sincerely thank all of you for your dedicated efforts.

*1

Adjusted EBITA = (Adjusted operating profit) + (Amortization of intangible assets, etc., related to acquisition (added back))

*2

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

2. For Sustainable Growth and the Future That Hitachi Systems Aims to Create

(1) Toward achieving the FY 2026 budget and even further growth

As we work toward achieving our “Inspire 2027” management plan, we at Hitachi Systems are pursuing growth through business expansion in growth market segments and utilizing AI to improve profitability in our core businesses.
With that in mind, the second half of the fiscal year is a critical period to steadily build up results to achieve the FY 2026 budget, while also laying the groundwork for what comes next. I ask that you build on the achievements of the first half, further enhance collaboration across organizations, and advance initiatives that will lead to growth in the next fiscal year and beyond.

Additionally, to achieve even further growth in FY 2027 and beyond, it is important that we are personally invested in the “Hitachi Systems Future Compass” and consider what value we will provide to customers and to society as we continue to undertake challenges with an eye to the future. Let us take advantage of the trust and achievements that we have established so far and strive to achieve a sustainable society and business growth in line with “PLEDGES,” the Hitachi Group’s sustainability strategy.

(2) Initiatives to achieve this

The business environment surrounding us is undergoing significant changes. Taking these changes as opportunities for growth, I ask that you once again reflect on the policies and measures explained during the business policy briefing and reliably put them into practice at each workplace.

Anticipating that the municipal system standardization projects will pass their peak and that the environment surrounding the data center business might change, let us work to create new projects that will drive growth in the next fiscal year and beyond, and to enhance our business foundation.

A vital pillar supporting these initiatives is reimagining the business model of Hitachi Systems by getting the most out of AI. I would like each and every one of you to utilize AI in your daily work, not only to improve efficiency but also to drive business reform and create new value.
The AI transformation (AX) that we aim for is to integrate AI into our customers’ on-site operations and continue delivering results even after implementation. By working side by side with customers across the nation, Hitachi Systems has accumulated domain knowledge across a wide range of industries and operations. We believe that by combining AI with our unique strengths rooted in expertise of on-site work, we can support the adoption of AI at work sites as well as the continuous improvement thereof, thus helping solve challenges faced by our customers and society.
Furthermore, through the Customer Zero approach, in which we roll out the services and know-how practiced and verified within the Hitachi Group to customers, let us create new business value and contribute to promoting AX for our customers and across the entire Hitachi Group.

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 take precedence over everything else. Only when your mind and body are healthy can you continue to grow and undertake new challenges. It is important that when you feel anxious or worried, you should not keep it to yourself, but instead share it with your colleagues and help one another.
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.
Please share your diverse knowledge and experiences, engage in ongoing dialogue, learn from one another, and actively take on new challenges. Let us maintain an even stronger sense of “One (HISYS)” and “One Hitachi” as we work in unity across the entire Hitachi Systems Group.

(3) Act in accordance with “Basics and ethics,” “Right and wrong is more important than profits and loss,” 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 act with an awareness of “Basics and ethics,” “Right and wrong is more important than profits and loss,” and “S (Safety) >> Q (Quality) > D (Delivery time) > C (Cost).” Understand the meaning behind the rules and do the right things the right way, and let’s build an open workplace culture where we support one another as an organization and resolve issues together, so when problems or doubts arise, you won’t carry them alone.

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