UPDATE 2-Hitachi to pursue M&A, focus investments

* Aims for Y525 bln op profit in 2012/13 vs Y202 bln in ’09/10

* 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 (BestGrowthStock) – 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

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.

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(Reporting by Sachi Izumi; Editing by Edwina Gibbs)

UPDATE 2-Hitachi to pursue M&A, focus investments