Hitachi Rail Introduction and a Vision of the Future Hitachi Social Innovation Forum Brett Dolan Brisbane 2017 General Manager Hitachi Australia Pty Ltd Contents

1. Hitachi Rail Intro 2. Key Achievement 3. Hitachi’s Rail Future

■Financial Services ＊2

■Others ＊1 ■ Information & 2% Telecommunication Systems 6% ■Smart Life & Ecofriendly Systems 6% 20%

10% Revenues

9,162.2 billion yen ■ Social Infrastructure & ■Automotive Systems Industrial Systems 81.81 billion USD 14% 23% ■High Functional Materials & Components 7% 12% ■Electronic Systems & Equipment

■Construction Machinery

*1: Hitachi Transport System, Ltd. which is included in "Others“ became equity-methods affiliate of Hitachi, Ltd. on May 19, 2016. *2: Hitachi Capital Corporation which constitute of "Financial Services" became equity-methods affiliate of Hitachi, Ltd. on October 3, 2016. © Hitachi Australia Pty Ltd.2017. All rights reserved 3 Global Rail business performance FY2016

FY2016 Results

Revenues

First IEP train manufactured in UK ¥ 497.9bn A$6.22Bn

Order Intake Order Backlog

¥ 473.1bn ¥ 2,020.5bn A$5.91bn A$25.26Bn

Note: FX Rate used 1AUD = 80JPY. FY2016 results, as of March 30th, 2017. Hitachi Rail Italy delivers first train to Miami Dade County, USA © Hitachi Australia Pty Ltd. 2017. All rights reserved. 4 Our rail business has a full product range…

53% ROLLING STOCK 26% SIGNALLING & SYSTEMS

Rolling Stock Components Signalling & Traffic Management Station & Information Solutions

Very High Shinkansen Bogies Interlocking Satellite Train Passenger Speed Control Information

Commuter Intercity Traction Motor CBTC Components Ticketing & Payment

Traction Inverters & LRV Metro Transformers TMS ETCS Security

Monorail HVAC DriverlessFacility Crowd Flow Control Management

8% O&M RS RS Signalling Asset Refurbishment Maintenance O&M Management

13% TURNKEY

LRV: Light Rail Vehicle, HVAC: Heating, Ventilation and Air Conditioning, TMS: Train Management System, ETCS: European Train Control System, CBTC: Communications-based Train Control, O&M: Operations & Maintenance, RS: Rolling Stock © Hitachi Australia Pty Ltd.2017. All rights reserved As a % of FY16 revenues 5 We have an international footprint…

We have a geographically diverse business with the ability to bid effectively on major projects all over the world

Europe (excl. UK) Revenues: 32%

UK Revenues: 26%

Japan Revenues: 17%

Americas Revenues: 11%

Middle East & Africa Revenues: 4% Asia Pacific (excl. Japan) Revenues: 10% OFFICES / SALES PRESENCE HEADQUARTERS FACTORIES Hitachi Rail Hitachi Rail Hitachi Rail (1) Ansaldo STS Ansaldo STS Ansaldo STS Total global headcount – 11,091

Naples, Italy Mito(Rail), Japan Pittsburg, USA Newton Aycliffe, UK Pistoia, Italy Electrical Components, Electrical Components, Rolling Stock Rolling Stock Rolling Stock Bogies Signalling System Size: 19,300 m2 Size: 42,000 m2 Size: 107,000 m2 Size: 58,850 m2 Size: 28,000 m2

Riom, France Potenza, Italy Signalling Signalling System System

Miami, USA Kasado, Japan Rolling Stock Train Cars, Size: 13,000 m2 Bogey Size: 130,000 m2

HYC, China * HYEE, China * CHS, China * Batesburg, USA Reggio Calabria, Italy Electrical Electrical Signalling System Signalling System Rolling Stock Components Components 2 Size: 4,700m2 Size: 63,500 m Size: 19,800 m2 Size: 14,300 m2

Hitachi RailSystems Ansaldo STS Hitachi Rail Italy * JV with CNR. HYEE : CRRC xi’an YongeJieTong Electric Co., Ltd. HYC : Hitachi Yonge Electric Equipment (Changchun) Co., Ltd.) Qingdao CNR Hitachi Railway Signal&Communication Co., CHS : Ltd. © Hitachi Australia Pty Ltd.2017. All rights reserved 7 Key Achievement in FY2016 – Investing in our future and delivering for our customers

Delivering Projects

First train delivered to Delivered first 4 cars of Hitachi-built battery powered trains Testing began on the The first driverless Miami Dade County 68 car order to Taipei began operation for Kyushu first of 70 commuter train for new Lima USA as part of 68 Metro for driverless Railway Company & East Japan trains for Scotland Metro arrived in Peru Metro train contract metro system Railway Company

Investing in Facilities Key Achievements

Inauguration of Our newly- new Pistoia The first UK- Hitachi Rail and refurbished UK Italy Testing built IEP train Trenitalia Doncaster Facility was unveiled at unveiled new maintenance attended by Newton Aycliffe double-deck depot receives then Prime manufacturing regional train - its first train Minister Matteo facility Rock Renzi

Our purpose- Hitachi Rail Production built IEP showcased its 20th anniversary started at maintenance integrated global for Hitachi Pistoia Italy on depot in rail offering at designed Tokyo GWR contract Swansea UK the bi-annual Area Traffic for the UK became InnoTrans Management operational exhibition in System Berlin Germany

India China UK UK Italy Japan Signalling Components RS RS RS RS Framework HVAC & High West of England agreement for up CBTC systems Voltage Equipment options – 7 x 9 Hull trains – 5 x 5 to 300 regional for Noida-Greater for CRRC Inspection car MAYA35 car AT300 bi- car AT300 bi- double-deck Noida Metro and Traction for for Hokkaido Railway mode sets mode sets trains Project Xi’an Metro Line1 Company

USA Taiwan Signalling RS / Turnkey Turnkey and 29 Long Island Rail two-car trainsets Road to design for the Sanying and build a new Line in New signalling system Taipei City

USA Belgium Italy Italy Malaysia Australia RS Signalling RS Services Signalling Signalling Three contracts Upgrade of Subway Link - 78 Baltimore Metro Additional 15 for control, signalling works Complete system new trains with Brussels Metro “Leonardo” metro monitoring and within a section of for Perth’s CBTC signalling signalling system trains for the city maintenance of Klang Valley Forrestfield - renewal of Milan Trenitalia trains railway Airport Link CRRC: China Railway Rolling Stock Corporation SGTP: Sydney Growth Train Project RS: Rolling Stock © Hitachi Australia Pty Ltd.2017. All rights reserved 9 Track Record and on-going projects in Australia

We have 40 years experience in the Australian Rail market with offices in Sydney, Brisbane, Perth, Newcastle and Karratha

Western Australia Western Australia Sydney Signalling Signalling RS Components Signalling and Rio Tinto signalling, communications communications, Waratah Train system for the Roy train control and traction supply Hill Iron Ore Project automation systems (624 cars)

Melbourne Sydney RS Design RS Components

Design of the Silver traction supply Liner EMU’s (on-going project)

Australia Queensland Queensland Queensland Signalling RS RS Components Complete system RS Components for Perth’s Forrestfield - Electric Locomotive Electric Locomotive Airport Link Tilting EMU traction supply traction supply (on-going project) (12 cars) (22 cars) (86 cars)

1. About Hitachi Rail 2. Key Achievement 3. Hitachi’s Rail Future

Background Project Benefits

UK Department for Transport's £7.5 billion programme • 30% more seats capacity to replace older intercity trains currently operating on • 30% reduced journey time London to Bristol the East Coast and Great Western Main Lines • 15% reduced journey time London to Edinburgh 1976 2017 • 18% saving in energy consumption • 43% saving in track damage • Largest privately financed rolling stock deal ever • One of the largest Public Private Partnerships projects to date An award winning project

Project Details

• Total of 122 trains (866 cars) • Includes bi-mode sets for non-electrified routes • Construction of new depots for fleet maintenance • Maintenance of the fleet for 27.5 years • Collaborative interior design process

2014/11 1st Train (T1) Manufacturing 2015/01 T1 2015/03 T1 Arrival Completion in Japan Leaving Japan Southampton, UK

2015/05~ On-going test 2015/09 Open of Hitachi Manufacturing in UK Network Facility at Newton Aycliffe, UK 13 © Hitachi Australia Pty Ltd.2017. All rights reserved 13 Project Delivery Progress of IEP Project

2016/12 2016/05 Unveiling 2016/05 Prime Minister’s visit 1st UK built Train IEP Train (Azuma) (Mr. D. Cameron & Mr. S. Abe) at Newton Aycliffe

2016/05 2016/05 Queen Elizabeth II Ride Queen Elizabeth II Ride

1. About Hitachi Rail 2. Case Study 3. Hitachi’s Rail Future

− Hitachi Rail has become a major global player within the rail industry and we have ambition to grow further − We aim to become a ¥1 trillion revenue business with market leading profit margins by: “Our aim is to become a − Further strengthening our product offering and ¥1 trillion revenue leading the way in innovation business by the early − Continuing the transformation of our business and 2020s” operations Mr Toshiaki Higashihara – President and CEO, Hitachi, Ltd − Using M&A to further grow and differentiate our offering

Our key areas of external focus that will allow us to achieve our ambitions

Strengthen Core Grow Rolling Stock Focus on IoT and Provider of end-to- Innovation Leader Offering Maintenance Digital end solutions

Further grow our High quality IoT and digital Transition to a rolling stock Be an innovation manufacturing will services will enhance provider of end-to- maintenance leader in the rail remain core to our our core products end solutions, business. Reducing industry, fully utilising business and we will and present supported by market- total cost of the wider Hitachi invest in expanding customers with a leading technology ownership of our Group’s technology and improving our truly unique rail from across the customers will capabilities platforms offering Hitachi Group differentiate us

Our aim is to become a ¥1 trillion revenue business by the early 2020s

We are investing in core platforms and technologies for future growth

Our core markets remain strong

Customers continue to value our technology developed and demonstrated overseas

IoT is an integral element of our strategy and a clear differentiator for Hitachi.