Aims for Y525 bln op profit in 2012/13 vs Y202 bln in ’09/10
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* Sees sales of Y10.5 trln in 2012/13 vs Y8.97 trln in ’09/10
* Plans Y1.4 trln in capital investment, strategic spending
* 70 pct of spending will go to “social innovation” business
* To use M&A aggressively to drive growth-president (Recasts, adds president comment)
By Sachi Izumi
TOKYO, May 31 (Reuters) – Hitachi Ltd (6501.T), Japan’s largest electronics maker, said it would pursue acquisitions and focus spending on a group of key businesses, seeking to more than double its profit over the next three years.
Hitachi, a sprawling conglomerate of 900 group firms, has been trying to narrow its focus to give it a better chance of competing globally with more profitable rivals such as Germany’s Siemens (SIEGn.DE) and General Electric Co (GE.N).
Over the next three years, Hitachi will allocate 70 percent of its 1.4 trillion yen ($15.4 billion) budget for capital spending and strategic investments to its “social innovation” segment, a group of businesses that includes data centres, power plants, construction machinery, batteries and railway systems.
Hitachi would look to buy companies to bolster these operations, President Hiroaki Nakanishi said, in a sign the company is becoming more aggressive after years of cost-cutting.
“We turn 100 years old this year. It will be a turning point for us to change to offense from defense,” Nakanishi told a news conference.
Hitachi said it would aim for an operating profit margin of more than 5 percent in the financial year to March 2013 on sales of 10.5 trillion yen. That would come to profit of at least 525 billion yen, up from 202 billion yen in the year just ended.
The company said it would aim to boost the ratio of sales generated in overseas markets to more than half the total, up from 41 percent in the year ended in March 2010, as it makes a push into emerging markets.
Hitachi said it would also aim to lower its debt-to-equity ratio to 0.8 times or below, from 1.04 times at the end of the past financial year.
Shares of Hitachi were up 0.5 percent at 372 yen. The benchmark Nikkei average .N225 was down 0.2 percent. (Reporting by Sachi Izumi; Editing by Edwina Gibbs)