Hitachi (6501) Q1 2025 earnings summary

Executive summary

• Q1 FY2024 saw strong revenue and profit growth in three core sectors, driven by digital (DX) and green (GX) transformation demand, with significant improvement in core free cash flow and progress toward FY2024 and mid-term targets.

• Major acquisitions (Thales GTS/CENTELEC) and divestitures (Astemo, Johnson Controls-Hitachi Air Conditioning) impacted results, with organic growth in key business areas.

• Net income attributable to shareholders surged 150% year-over-year to ¥175.3 billion, supported by margin gains and one-time items.

Financial highlights

• Revenues for the three core sectors rose 21% year-over-year to ¥2,211.4 billion, while consolidated revenues declined 5% due to the Astemo divestiture.

• Adjusted EBITDA/EBITA grew by 55% year-over-year, with margin up 2.4 points to 11%.

• Net income attributable to shareholders increased by ¥105.3 billion to ¥175.3 billion.

• Core free cash flow improved by ¥41.8 billion to ¥70.9 billion.

• One-time Q1 net profit gains included business divestiture, FX gains, and land sales.

Outlook and guidance

• FY2024 guidance is maintained, with consolidated revenues forecast at ¥9,000 billion (down 7%), adjusted EBITA at ¥1,035 billion (up ¥116.8 billion), and net income at ¥600 billion.

• Core free cash flow for FY2024 projected at ¥480 billion, with a three-year total expected to exceed ¥1.5 trillion.

• Revenues (excluding FX) are forecast to rise 6%, with adjusted EBITDA up 20% and margin improving to 11.5%.

• ROIC expected at 9.5%, and EPS forecast at ¥129 (excluding share split effect).

• No change to previously announced FY2024 guidance; midterm management plan KPIs are nearly achieved.