#1Hitachi Investor Day 2021 Industry Sector June 8, 2021 Masakazu Aoki Executive Vice President and Executive Officer General Manager of Industry Business Division HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved.#21 Key Messages Today Digital Transformation (DX) Accelerating in the New Normal Era - Responses to Market Changes in Manufacturing and Distribution Industries Due to COVID-19 - HITACHI Inspire the Next 2 Expansion of Total Seamless Solutions Utilizing Lumada 3 Development for Global Growth Hitachi, Ltd. 2021. All rights reserved. 1#3Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved. 2#4Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved. 3#5HITACHI Inspire the Next Automotive Systems Business Hitachi Astemo Hitachi High-Tech Solutions Hitachi Global Life IT Energy Industry Mobility Smart Life 1-1. Position of the Industry Sector Railway Systems BU Building Systems BU Water & Environment BU Distribution BU Industry & Hitachi, Ltd. 2021. All rights reserved. 4 Services & Platforms BU Product Business (Hitachi Industrial Products, Hitachi Industrial Equipment Systems) Power Grids BU Energy BU Nuclear Energy BU Systems BU Social Infrastructure Financial Institutions BU BU: Business Unit#61-2. Business Overview Industrial Products Business Mass-production business [28%] - Air compressors - Marking systems Drive systems Power Substation equipment 44% 36% HITACHI Inspire the Next Industry & Distribution BU Digital solution business Built-to-order business [16%] - Centrifugal compressors - Pumps - Drive systems - Transport systems 858.1 billion yen FY2020 Result Water & Environment BU 20% Utility solution business Social and Environmental Value Increasing the efficiency of customers' production and service delivery ■ Providing safe and secure water environments Helping reduce CO2 emissions with energy-saving products Figures for each BU and overall Industry Sector include control systems business, which is allocated in IT Sector. Related SDGs CLEAN WATER 9 INDUSTRY, INNOVATION AND INFRASTRUCTURE 13 CLIMATE ACTION Hitachi, Ltd. 2021. All rights reserved. 5#71-3. Sector Structure HITACHI Inspire the Next The Sector and Hitachi Group Promote Business for Customers in Industry and Distribution Fields Hitachi Group's business potential in Industry and Distribution fields IT Sector Industry Sector Masakazu Aoki Executive Vice President and Executive Officer 858.1 billion yen Hitachi Systems, Ltd. Hitachi Solutions, Ltd. Total revenues for customer in industry and distribution fields: Approx. 260 billion yen Services & Platforms BU Kazunobu Morita CEO Industry & Distribution BU 305.3 billion yen Digital solution business Hideshi Nakatsu CEO BU Water & Environment 173.3 billion yen Utility solution business Keizo Kobayashi President and Director Hitachi Industrial Products Yasuhiro Takeuchi President and Director Hitachi Industrial Equipment Systems 376.4 billion yen Built-to-order Mass-production business IT OT The figures above indicate revenues (FY2020 results). Figures for each BU and overall Industry Sector include control systems business, which is allocated in IT Sector. business Products Hitachi, Ltd. 2021 All rights reserved. 6#81-4. Business Domains HITACHI Inspire the Next Providing digital solutions by utilizing strengths with Products x OT X IT Creating customer value in value chains LUMADA t control system Management/ OT 10 Products Workplace system ΑΙ Analytics Cloud Big data processing Security Production planning/ Supply chain optimization control optimization Logistics optimization Maintenance, quality/safety verification Manufacturing execution system Energy/equipment management Next-generation utilities (water, power supply, heat and air) Automation line-building (Robotic SI) Inverter IoT controller Marking system Edge computing Racrew*1 Intelligent robot system AirLinx*2 UPS Air compressor Transformer Intelligent Carry Sorter HITACH *1 The compact, low-floor, automated guided robot, Racrew, is a registered trademark of Hitachi Industrial Products, Ltd. in Japan. *2 The air compressor remote monitoring service, AirLinx, is a registered trademark of Sullair, L.L.C. in the US. *3 The air compressor cloud-based monitoring service, FitLive, is a registered trademark of Hitachi Industrial Equipment Systems Co., Ltd. in Japan. OT: Operational Technology Al: Artificial Intelligence Sl: System Integration UPS: Uninterruptible Power System FitLive*3 FitLive HITACHI Hitachi, Ltd. 2021. All rights reserved. 7#9Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved.#102-1. Progress of 2021 Mid-term Management Plan HITACHI Inspire the Next Steady progress is being made through the strengthening of integrated operations in the Industry Sector, although COVID-19 has somewhat impacted the plan Basic policy and progress Expand and strengthen total seamless solutions Accelerate global expansion Response to market change Increase business resilience Scaling of digital solutions utilizing Lumada (Lumada Core Business: up 6% YoY for FY2020) Acquisition of Kyoto Robotics, a developer of intelligent robotic systems Continued strengthening of Products x OT x IT for business growth Acquisition of JR Automation, a U.S.-based robotic system integrator Hitachi Industrial Holdings Americas established to supervise operations in North America More orders received after strengthening business base in North America Resources shifted to the digital business to accelerate DX Increased the number of solutions matched with the needs of the new normal created by the COVID-19 pandemic Investments reduced and selected carefully COVID-19 impact Profit secured by reducing fixed costs and more strictly managing projects © Hitachi, Ltd. 2021. All rights reserved. 6#112-2. Results and Forecasts HITACHI Inspire the Next FY2020 A huge decline in revenues was expected due to the COVID-19 pandemic. However, revenues were higher than the initial forecast as a result of shift to the digital business and global business expansion Adjusted operating income ratio stood at 5.7% after cost reductions and strict project management Revenues and income are forecast to grow as a result of capturing new DX needs despite the continued impact of COVID-19 FY2021 Adjusted operating income ratio 8.2% 7.5% 6.7% COVID-19 impact: Down 4.3 points 5.7% (Result) Over 10% Over 1,000.0 3.2% Revenues (billion yen) Up 2.5 points 909.4 COVID-19 impact: 867.8 880.0 Down 147.6 858.1 761.8 Industry & 259.8 310.0 Distribution BU Up 96.3 315.0 305.3 245.0 Water & Environment BU 179.6 175.0 173.3 176.0 149.0 Industrial Products 147.1 140.0 Business Built-to-order business 424.0 132.9 133.2 138.0 422.0 365.4 376.4 390.0 276.9 282.0 232.5 243.2 252.0 Mass-production- business FY2019 Results Initial forecasts Initial forecasts Results (excluding COVID-19 impact) FY2021 Forecasts Goal FY2020 Figures for each BU and overall Industry Sector include control systems business, which is allocated in IT Sector. Hitachi, Ltd. 2021. All rights reserved. 10#122-3. Trends of the Results of JR Automation JR JR AUTOMATION™ A Hitachi Group Company HITACHI Inspire the Next • After acquisition in the 4th quarter of FY2019, with the impact of COVID-19 pandemic, steady post-merger integration (PMI) efforts led to a considerable increase in orders and revenues • Increase business domains in the growing e-commerce and medical markets to accelerate the shift from an automotive-centered business portfolio Quarterly trends High growth rate achieved Business portfolio Order growth rate 200 Nearly 200% 150 100 50 growth Orders Revenues Accelerate the shift of the business portfolio to the growing e-commerce and medical markets * Revenues Other 19% Aerospace & Amusement 4% Other Aerospace & Amusement 12% E-commerce Automotive 47% E-commerce 16% Automotive 32% 8% Medical care 40% 0 6% Medical care (4Q) FY2019 (1Q) (2Q) (3Q) (4Q) FY2020 16% FY2019 Just after COVID-19 outbreak COVID-19 pandemic FY2020 Expansion of the robotic SI business featuring digital fusion from FY2021 Figures for orders and revenues represent indices in which a value of 100 refers to their respective levels in the 4th quarter of FY2019. Hitachi, Ltd. 2021. All rights reserved. 11#13• . 2-4. Trends of the Results of Sullair SULLAIR A Hitachi Group Company HITACHI Inspire the Next Both orders and revenues for the 1st quarter of FY2020 fell due to the COVID-19 pandemic Improvement measures for the building of resilient structures were carried out to achieve a higher orders growth rate in the 4th quarter of FY2020 than in the same period of the previous year Quarterly trends Orders grown substantially 150 Order growth rate Nearly 118% 100 50 growth Orders Revenues 0 (4Q) (1Q) (2Q) (3Q) (4Q) FY2019 FY2020 Just after COVID-19 outbreak COVID-19 pandemic Figures for orders and revenues represent indices in which a value of 100 refers to their respective levels in the 4th quarter of FY2019. Implementation of improvement measures ⚫ Steady expansion of new customer base • Flexible production system and increase in the cost competitiveness of products Strengthen production systems that respond to the fluctuation of demand (integrate production bases in China) • Introduce common key components and internal production to reduce costs • Introduce Hitachi's global loT platform to strengthen the aftermarket © Hitachi, Ltd. 2021. All rights reserved. 12#14Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved. 13#15• • 3-1. Changes in Market Conditions and Aims of the Industry Sector HITACHI Inspire the Next ⚫ Changes in market environment brought about massive changes in customers' management perspectives (values of companies) ⚫ Solving issues of "boundaries" between companies and organizations is more important now Changes in market environment ⚫Drastic changes due to COVID-19 • Increase in geopolitical risks ⚫Increasing environmental awareness • Shift to a recycling society Change in customers' management perspectives Environment Achieve net zero emissions Resilience Ensuring business continuity Security & Safety Providing people with fulfilling and healthy lives Solve issues of "boundaries" between companies and organizations to maximize customers' total profits Management connections are established Value provided only when Workplace Accelerate DX, such as the reduction of required labor, automation and contactless solutions that are becoming increasingly sophisticated in the new normal Consulting Value Chain as a Service O LUMADA IT | Ⓒ 0/0-020-00 OT Process modeling (digital twin solution) Products JR JR AUTOMATION KEC A Hitachi Group Company 株式会社ケーイーシー Total seamless solutions Hitachi, Ltd. 2021. All rights reserved. 14#163-2. Comparison to Competitors HITACHI Inspire the Next •After the change of market environment, the importance of solving customer issues through comprehensive Products x OT X IT solutions based on collaborative creation with customers has increased ⚫Hitachi differentiates itself from the competition by advancing total seamless solutions based on domain Sl knowledge Scope of the provision of solutions Full layer Products x OT X IT Adjacent layer OTX IT Products x OT Products x IT (IOT) Partial layer IT only OT only Products only Company Z's industry division Hitachi Industry Sector Hitachi Industry Sector's goal Company Y Company X's industry division Package proposals Customer requirements * The size of each circle reflects revenues. Revenues of companies X and Y are based on the FY2019 figures announced by their respective companies. That of company Z is based on the FY2020 figure announced by the said company. Collaborative creation with customers (domain SI) Approach for the resolution of customer issues © Hitachi, Ltd. 2021. All rights reserved. 15#173-3. Total Seamless Solutions Applied to "Boundary" Issues HITACHI Inspire the Next Capitalize on the strengths of Products x OT x IT to solve issues of "boundaries" through collaborative creation with customers and create new value for society Management Manufac- Different Logistics Market Place industries Connect through digital technologies Value Chain Boundaries Vertical Workplace Horizontal Suppliers turing Connect through digital technologies Connect through digital technologies Consulting Management Supplier Manufacturing Distribution Market Management Workplace IT OT Efficiency improvement of multi site collaboration Efficiency improvement of Advanced logistics Advanced demand prediction Analy Data tics Enabler -LUMADA Cyber space production planning -LUMADA Working level - Products Various solution cores -LUMADA Real space Apply total seamless solutions to emerging issues involving "boundaries" arising in the era of the new normal © Hitachi, Ltd. 2021. All rights reserved. 16 Production plan Production Parts Products#183-4. Expansion of Total Seamless Solutions utilizing Lumada Expand total seamless solutions with the strengths of technologies, domain knowledge and customer relations Until FY2019 Mitsubishi Tanabe Pharma Collaboration with Hitachi HITACHI Inspire the Next From FY2021 onwards Nichirei Logistics NTT DOCOMO Suntory Beverage & Food (Factory loT platform) FY2020 Collaboration with Microsoft Group Transport System Daikin Industries (SCM-optimization) (SSCV) Showa Denko Alfresa Mitsui & Co. Collaboration Yamato Transport Daikin Industries AMADA (Chemicals) Nichirei Foods with PTC Okuma Suntory Beverage & Food (Production plan) MonotaRO (Inagawa) Daikin Industries (Brazing) Seiyu Omika Works MonotaRO (Kasama) Daicel Sumitomo Rubber Industries and PTC All Nippon Airways Domain knowledge (Advanced manufacturing capabilities and experience at workplace) Customer relations (Wide customer base) Collaborative creation with customers Technologies (e.g., Al, mathematical optimization technology) SCM: Supply Chain Management WORKMAN SHIP HEALTHCARE/ Konishi Medical Instruments Hitachi, Ltd. 2021. All rights reserved. 17#193-5. Examples of Introduction of Lumada Digital Solutions HITACHI Inspire the Next Connect Supply Chains Globally 1 Management Vertical Workplace Horizontal Suppliers Manufac- turing Logistics Market Daikin Industries, Ltd. Connect Sales Workplace and Markets 2 Manufac- Horizontal Suppliers turing Logistics Market Seiyu GK & WORKMAN Co., Ltd. Connect Workplace and Management Management 3 in Logistics Field Vertical Workplace MonotaRO Co., Ltd. 4 Connect Workplace and Management in Logistics Field Vertical Management Workplace Different Place industries Hitachi Transport System, Ltd. Provide a Place for Connecting 5 Different Companies Horizontal Suppliers Manufac- turing Logistics Market Different Place industries Alfresa Corporation and others Connect Workplace, Management, Management 6 and Supply Chain in Food Field Vertical Workplace Horizontal Suppliers Manufac- turing Logistics Market Nichirei Foods Inc. & Nichirei Logistics Group Inc. Hitachi, Ltd. 2021 All rights reserved. 18#20Collaborative Creation Customer Case 1. Connect Supply Chains Globally INDUSTRY, INNOVATION AND INFRASTRUCTURE RESPONSIBLE CONSUMPTION AND PRODUCTION HITACHI Inspire the Next For Daikin's chemical business, five manufacturing bases and nine sales bases are connected globally to provide production/sales planning and execution support solutions that quickly respond to changes in demand Boundaries Management Vertical Workplace Horizontal Suppliers Manufac- turing /Logistics/ Logistics Market Optimization of supply chains aiming to maximize business KPIs SCM Optimization Simulation Production/Sales Plan Results of estimation Profit Inventory value Inventory Sufficiency ratio quantity Present approx. 60 times more manufacturing/ sales measure patterns than before in a short time. Operating ratio Effects of Introduction Shortens the time to determine by approx. 95% Eliminate bottlenecks through switching manufacturing DAIKIN Increase high-profitable products by utilizing surplus capabilities Respond to the value chain that changes variedly Contribute to employee's workstyle reform through automation of planning Hitachi, Ltd. 2021. All rights reserved. 19#21Collaborative Creation Customer Case 2. Connect Sales Workplace and Markets INDUSTRY, INNOVATION AND INFRASTRUCTURE RESPONSIBLE CONSUMPTION AND PRODUCTION QO HITACHI Inspire the Next Contribute to productivity improvement of sales workplace by automating order placement operations based on the demand forecasting by Al Provide value that corresponds to the characteristics and needs of each of Seiyu and WORKMAM Manufac- Logistics Market Boundaries Horizontal Suppliers, turing 1980 198 Hitachi Digital Solution for Retail/ Al demand forecasting based automatic order placement service A Variation by day of week + Sales Variation by season Sales floor promotion Stockout planogram event Order placement to delivery lead time Automatic order placement Sales operation Demand forecasting Inventory optimization Calculation for order placement Order placement operation 2316 Cumbersome order placement operation was reduced drastically, which allows SEIYU focusing on kitchen operations and customer services In future, they will aim to reduce stockouts and food loss Contributed to stockout reduction and inventory optimization of 100 thousand WORKMAN items that have different sales turnover ratios 1.900 Effects of Introduction (WORKMAN) Shortening order placement operation from approx. 30 2.500 minutes to approx. 2 minutes Hitachi, Ltd. 2021 All rights reserved. 20 20#22Collaborative Creation Customer Case 3. Connect Workplace and Management in Logistics Field INDUSTRY, INNOVATION AND INFRASTRUCTURE RESPONSIBLE CONSUMPTION AND PRODUCTION HITACHI Inspire the Next Realize improved productivity by automated transfer at MonotaRO Aim to optimize the whole distribution center from workplace to planning Boundaries Vertical Management Workplace monotaro LUMADA Sophistication of the distribution center (Hitachi vision) Productivity Production allocation •Inventory ⚫Shelf/product allocation sophistication through WMS renewal/use of robotics (Future plan) Transfer robot + control system ERP: Enterprise Resource Planning ERP SCM ΑΙ analytics Optimization ⚫Schedule ⚫ Personnel count/allocation ⚫Delivery WMS Product/inventory data linkage WCS Operation control optimization Racew 013-- The compact and low-floor automated guided robot "Racrew" WMS: Warehouse Management System WCS: Warehouse Control System Vertical linkage Effects of Introduction Picking efficiency tripled Respond to labor shortage through automation using robotics Realize data-originated and sophisticated operation of the distribution center © Hitachi, Ltd. 2021 All rights reserved. 21 24#23Collaborative Creation Customer Case 4. Connect Workplace and Management in Logistics Field GOOD HEALTH AND WELL-BEING 11 SUSTAINABLE CITIES AND COMMUNITIES HITACHI Inspire the Next Realize both safety and efficiency improvements by combining Hitachi Transport System's unique safe operation management solution utilizing Al with the delivery optimization service Management Boundaries Vertical Workplace Different Place industries Digital platform for logistics x biological data/operation data x delivery optimization service SSCV-Safety on Hitachi Digital Solution for Logistics Hitachi Transport System Safety Smart Safe operation management Operating effectiveness improvement SSCV Smart & Safety Connected Vehicle Vehicle Vehicle management ☑ Drive Recorder Data management cloud delivery optimization Hitachi Digital Solution for Logistics Lumada Solution Hub -LUMADA SSO Respond to decrease in number of truck drivers Accident preventive measures Real-time operation management utilizing IoT technologies Before/after operation Biological data of driver During operation Vehicle behavior * "SSCV" is a registered trademark of Hitachi Transport System, Ltd. in Japan. During operation Physical condition data © Hitachi, Ltd. 2021 All rights reserved. 22 22#24Collaborative Creation Customer Case 5. Provide a Place for Connecting Different Companies GOOD HEALTH AND WELL-BEING INDUSTRY, INNOVATION AND INFRASTRUCTURE HITACHI Inspire the Next Through collaborative creation with a pharmaceutical wholesaler (Alfresa) etc., provide Japan's first* platform for integrated management of cell and tracing information throughout the value chain for regenerative medicine products alfresa Pharmaceutical company Manufac- Boundaries Horizontal Suppliers turing Logistics Market Different Place industries Contract manufacturer Medical institution Common service infrastructure for all stakeholders involved in regenerative medicine products Operational Function Individual sample identification Information tracing for cell collection/production/transportation/administration Data from the entire process for regenerative medicine products Medical institution Logistics company Pharmaceutical company/Contract manufacturing organization (CMO) Logistics company Medical institution Diagnosis Cell collection Transportation * Investigated by Hitachi in May 2021 Acceptance inspection - Manufacturing -Shipment Transportation Administration Pharmaceutical and other companies Respond to strict quality control and traceability Analyze and simulate the supply chain Post-marketing surveillance Hitachi, Ltd. 2021 All rights reserved. 23 23#25Collaborative Creation Customer Case 6. Connect Workplace, Management, and Supply Chain in Food Field GOOD HEALTH AND WELL-BEING INDUSTRY, INNOVATION AND INFRASTRUCTURE Through collaborative creation with Nichirei Group, HITACHI Inspire the Next provide a planning/operating efficiency improvement solution at manufacturing/processing factories and distribution centers (food value chain) Boundaries Vertical Management Workplace Suppliers Horizontal Manufac- turing Logistics Market NICHIREI Manufacturing/ Processing Automatic production/staff planning Maximum of 16 trillion patterns for a plant Configuring Master (narrowing down) Absolute constraints (narrowing down) AI Discretionary constraints ༨༢༩ Logistics Improvement of operation/maintenance efficiency of refrigeration equipment -LUMADA exiida Remote monitoring/ Dashboard predictive diagnosis CYDEEN BI EMilia-based cloud service platform Scoring multiple plans with evaluation indices Mathematical optimization engine Effects of Introduction Planning time Shortened to 1/10 * "CYDEEN" is a registered trademark of Hitachi Systems, Ltd. in Japan. VPN network Industrial controller for loT applications HX series Tablets Sensing technology Inspection assistance technology Electronic ledger sheet Refrigeration equipment * "exiida" is a registered trademark of Hitachi Global Life Solutions, Inc. in Japan. Production system that quickly responds to changes in demand Reducing environmental burdens Hitachi, Ltd. 2021 All rights reserved. 24 24#26Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved. 25#27• 4-1. Growth of the Global Business Centering on Operations in North America HITACHI Inspire the Next • Establishing a North American business base through M&A and strengthening differentiating technologies Accelerating global expansion by strengthening robotic Sl while simultaneously reinforcing the fusion of Lumada-based digital technologies Until 2018 Mid-term Technology layer Management Plan FY2019 FY2020 FY2021 From FY2022 Management Consulting T 10 Workplace huMan Machine Material OT Method 4M data Products Business operation Management Establishment of the robotic Sl business Acquisition of JR Automation Acquisition of KEC Strengthening of global product lineup Acquisition of Sullair Establishment of a North American business base in the industrial area Progress in labor-saving and automation in line with new normal Creation and enhancement of Lumada-based digital solutions in North America Strengthening of the functions of robotic Sl and expansion of the business area thereof Acquisition of Kyoto Robotics Strengthening of the creation of high valued products Establishment of Hitachi Industrial Holdings Americas Acquisition of GlobalLogic(plan) Strengthening of fusion between robotic SI and digital technologies Establishment of Hitachi Industrial Equipment & Solutions America Development into E2E digital solutions Management Connecting with digital technologies O LUMADA Workplace Global expansion by building on operations in North America Hitachi, Ltd. 2021. All rights reserved. 26 26#284-2. Fusion of Robotic SI and Digital Technologies: Rolls Royce Case HITACHI Inspire the Next Automation of large-scale robots, processing equipment and conveyers collaboration between ERP and MES for the processing of aircraft components Acceleration of the fusion of robotic SI and digital technologies through synergies between JR Automation and Hitachi in North America ROLLS R× ROYCE JR JR AUTOMATION™ A Hitachi Group Company × Synergies HITACHI Inspire the Next Digital technologies 6'969 Spader 3 Water Robotic SI MES: Manufacturing Execution System SCADA: Supervisory Control And Data Acquisition PLC: Programmable Logic Controller Business formation ROLLS R Rolls-Royce® ROYCE JR JR AUTOMATION™ A Hitachi Group Company RADIX SIEMENS GÜDEL ABB IT partner Providing products of SCADA and PLC Components Robots *1 The current company name is AIS Technologies Group. © Hitachi, Ltd. 2021. All rights reserved. 27#29. 4-3. Strengthening the Functions of Robotic Sl: Acquisition of Kyoto Robotics HITACHI Inspire the Next • Acquisition of a start-up that supplies an intelligent robotic system equipped with a world-class 3D vision sensor Deepening the seamless operation between the workplace and management by strengthening the company's 3D vision technology-based robotic Sl High-level technological and product development capabilities ✓ 99.99% 3D object recognition rate featuring high-level speed and accuracy (in case of single depalletizing) ✓ Masterless object recognition ✓ Industry-leading depalletizing capability (600 cases from a consolidated depalletizing per hour and 850 cases from a single depalletizing per hour) 3D recognition technology for depalletization 3D recognition technology for picking items out of a bulk cargo 3D recognition Captured images Identification of unique factors and matching 3D models 3D recognition Abundant delivery record ✓ More than 400 units delivered ✓ Ability to operate flexibly on various types of lines Strengthening the robotic Sl business in the logistics and FA areas Hitachi, Ltd. 2021. All rights reserved. 28#30• • 4-4. Strengthening of the Functions of Robotic Sl: Use Case of Intelligent Robotic Systems HITACHI Inspire the Next Upgrading logistics center operations through the OT x IT solution and facilitate NTT DOCOMO's logistics operation reform Applying the piece picking method for practical use through Kyoto Robotics' intelligent robotic system with an eye toward the full automation döcomo × HITACHI X Initiatives for logistics optimization Logistics operations Reform project Inspire the Next (1) Improve the level of sales stores' services (2) Facilitate labor-saving and efficiency improvement to ensure stable operation even if the company faces labor shortages KYOTO ROBOTICS A Hitachi Group Company Sophistication of distribution centers Improvement of efficiency through the installation of material handling facilities and WMS WMS Planning WCS Linkage of product/inventory information Automation Optimal control of operation Practical use of advanced technologies (intelligent robots) Further automation at workplaces through the installation of intelligent robots Piece-picking robot utilizing 3D vision Material handling facility From 2021 KYOTO ROBOTICS A Hitachi Group Company Step 3 Installation of robots equipped with advanced technologies Step 2 Installation and establishment of the OT X IT solution Centralize distribution channels to sales stores through the consolidation of operation bases From 2017 From 2015 Step 1 Consulting on operational reforms Implementation of full automation Hitachi, Ltd. 2021. All rights reserved. 29 29#31• · 4-5. Strengthening the Global Development of the Robotic SI Business HITACHI Inspire the Next Strengthening robotic SI featuring digital fusion through the execution of cross-regional comprehensive activities Strengthening and expanding the robotic Sl business based on North American strategies developed by Hitachi Industrial Holding Americas and accelerating global expansion by building on its business base (North America Establishment of Hitachi Industrial Holdings Americas JR JR AUTOMATION™ A Hitachi Group Company HITACHI Europe Inspire the Next Strengthening of cross-regional comprehensive activities KYOTO ROBOTICS A Hitachi Group Company KEC ASEAN 株式会社ケーイーシー Japan Hitachi, Ltd. 2021. All rights reserved. 30#32Industry Sector Contents 1. Overview of the Industry Sector 2. Progress of 2021 Mid-term Management Plan 3. Expansion of Total Seamless Solutions 4. Development for Global Growth 5. Conclusion HITACHI Inspire the Next Hitachi, Ltd. 2021. All rights reserved. 31#33• • . 5-1. Initiatives for Creating Environmental Value CLEAN WATER AND SANITATION INDUSTRY, INNOVATION AND INFRASTRUCTURE RESPONSIBLE CONSUMPTION AND PRODUCTION Q CLIMATE 13 ALMATE HITACHI Inspire the Next Creating sustainable environmental value as well as economic value through collaborative creation with customers Digital Solution Business Reducing CO₂ by optimizing production, supply chains and distribution Utility Solution Business Reducing CO2 by making advanced technology-driven improvements to the efficiency of water resources cycling systems Industrial Products Business Reducing CO₂ by applying energy- saving and/or loT schemes to products Creating sustainable environmental value by offering total seamless solutions Optimizing production and supply chains through digital technologies Production planning optimization service SCM optimization simulation service Delivery optimization service • Contributing to the cycle of water resources and improvement of the efficiency of utility facilities Advanced water treatment system Seawater desalination technology Initiatives for the hydrogen business HITACHI Reducing the environmental load through high value-added products Reducing the environmental load of internal facilities Creation of carbon neutrality for production lines by FY2030 Motors featuring high-level efficiency and reliability (Motors for railway vehicles and mining dump trucks) Highly efficient air compressors Hitachi, Ltd. 2021. All rights reserved. 32#345-2. Intensive Actions for the Growth of the Industry Sector HITACHI Inspire the Next To achieve business growth and business value enhancement in the Industry Sector Facilitating the evolution of total seamless solutions Creating new social value by solving issues of "boundaries" Enhancing digital solutions through robotic Sl and Lumada Intensive actions Accelerating growth globally Strengthening North American business resources and differentiating technologies Expanding businesses into Europe, ASEAN and Japan centered on the North American business base Strengthening the management base Creating synergies through comprehensive operation of acquired businesses Continuing the reform of operations (project management, etc.) Business growth and business value enhancement in the Industry Sector Hitachi, Ltd. 2021. All rights reserved. 33#355-3. Conclusion HITACHI Inspire the Next Aiming to achieve revenues upwards of 1 trillion yen and an adjusted operating income ratio exceeding 10% as the best solution partner for industrial customers Adjusted operating income ratio 5.7% 8.2% Over 10% Over 1,000.0 Revenues (billion yen) - 858.1 880.0 Global/growth area 322.2 360.0 Core business 535.9 520.0 FY2020 Results FY2021 Forecasts Goal FY2021 Forecasts Revenues 880.0 billion yen Overseas revenues ratio 24% Figures for each BU and overall Industry Sector include control systems business, which is allocated in IT Sector. Adjusted operating income ratio ROIC 8.2% 8.7% Hitachi, Ltd. 2021. All rights reserved. 34 =4#36Industry Sector HITACHI Inspire the Next Contents Appendix Hitachi, Ltd. 2021. All rights reserved. 35 35#37Appendix 1: Progress in 2021 Mid-term Management Plan HITACHI Inspire the Next Unit: billion yen FY2019 FY2020 YOY YOY FY2021 Forecasts (as of June 2021) YOY Targets (announced on IR Day Change from previous targets in June 2019) Revenues 867.8 94% 858.1 99% 880.0 103% 1,000.0 88% Overseas revenues ratio 21% Down 8.2 points 24% Up 3.1 points 24% Up 0.4 points 30% Down 6.0 points Adjusted op. income 57.9 Up 33.8 48.6 Down 9.2 72.0 Up 23.4 91.0 Down 19.0 Adjusted op. income ratio EBIT*1 6.7% Up 4.1 points 5.7% Down 1.0 points 8.2% Up 2.5 points 9.1% Down 0.9 points 60.9 Up 38.5 45.4 Down 15.5 62.0 Up 16.6 86.0 Down 24.0 EBIT ratio 7.0% Up 4.6 points 5.3% Down 1.7 points 7.0% Up 1.7 points 8.6% Down 1.6 points EBITDA *² ratio 9.6% Up 5.3 points 8.2% Down 1.4 points 9.4% Up 1.2 points ROIC (Return on Invested Capital) 8.6% Down 0.7 points 6.1% Down 2.5 points 8.7% Up 2.6 points 10.8% Down 2.1 points FY2020 Outlook for FY2021 ⚫ Financial results • • • Revenues: Took new normal-conscious measures to offset a decline in revenues attributable to the COVID-19 pandemic Adjusted operating income: Took new normal-conscious fixed cost reduction measures ROIC: Deteriorated due to a decrease in adjusted operating income and an increase in invested capital • Achievements . • A shift to the digital solution business, the reallocation of resources to growing and solid business areas, and establishment of a structure in which revenues are secured mainly through the improvement of SI productivity even amid the COVID-19 pandemic Decisive implementation of structural reforms and preparation for the next growth stage (creating the Next-Generation Platform Development Center) *1 Earnings before interests and taxes, *2 Earnings before interests, taxes, depreciation and amortization ⚫ Financial results . • . Revenues: Expected to increase by 3%, partly reflecting the continuing impact of the COVID-19 pandemic Adjusted operating income: Expected to increase due to the optimization of fixed costs and improvement of productivity, and other measures ROIC: Expected to improve with an increase in adjusted operating income • Issues • • . Expansion of the robotic SI business Acceleration of scaling and further improvement of productivity Strengthening of systems with an eye to accelerating global expansion and becoming the global leader 36 Hitachi, Ltd. 2021. All rights reserved. 36#38Appendix 2: Growth (Value) Drivers and Risk Factors HITACHI Inspire the Next Growth drivers: Increase in digital investment for the acceleration of DX taking place amid the COVID-19 pandemic and measures taken to satisfy demand in the growth market Risk factors: Delay in recovery of the Japanese economy due to the COVID-19 pandemic, and geopolitical risks Growth (Value) drivers Increase in digital investments for the acceleration of DX ● Recovery of the Japanese economy due to the containment of the COVID-19 pandemic ● Expansion of the e-commerce and medical markets with the COVID-19 pandemic Increase in environment-related investments such as energy saving • Automotive investments, reflecting efforts to popularize EV Creation of synergies with acquired companies Risk factors • Delay in recovery of the Japanese economy due to the COVID-19 pandemic ⚫ Geopolitical risks Natural disaster risk • Exchange rate fluctuations Hitachi, Ltd. 2021. All rights reserved. 37 32#39Cautionary Statement HITACHI Inspire the Next 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: exacerbation of social and economic impacts of the spread of COVID-19; 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; 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; ■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; 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; credit conditions of Hitachi's customers and suppliers; ■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; ■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; ■the potential for significant losses on Hitachi's investments in equity-method associates and joint ventures; ■uncertainty as to the success of cost structure overhaul; ■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; ■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; ■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 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. Hitachi, Ltd. 2021. All rights reserved. 38 38#40Hitachi Social Innovation is POWERING GOOD#41HITACHI Inspire the Next