Date and Time:	April 30, 2010 (Fri.) 13:30-14:30
Place:	Akihabara UDX 6 Floor (UDX Conference Room)
Participants:	Mitsuo Imai,  :  Representative Executive Officer, President & Chief Executive Officer Yoshiaki Yoneda,  :  Executive Vice-President, Representative Executive Officer; Group Executive, Business Support Group Shinichi Susukida,  :  Senior Executive Managing Officer; Group Executive, Electronic & Automotive Products Group Shinya Inasaka,  :  General Manager, Finance Div. Business Support Group Shoichi Kogure,  :  General Manager, Administration Dept., Human Resources & Administration Group Takuya Akiyama,  :  Group Manager, Corporate Communication Sec., Administration Dept., Human Resources & Administration Group
Agenda:	1. Explanation of Medium-Term Management Plan (Mr. Imai) 2. Medium-Term Management Plan: Plan "BRIDGE"    Condition through Fiscal 2010    Overview of Plan "BRIDGE" 3. Questions and Answers

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The information provided herein is only an overview and not a word-for-word transcription of the briefing. The following is a summary of the explanations and of the question-and-answer session that followed.

Notes:

Forecasts of numerical performance contained herein (excluding actual accounting figures) were made as of April 30, 2010, and the Company's management has calculated such forecasts based on assumptions and suppositions judged to be sound. Accordingly, actual results may differ greatly from targets and forecasts.

*1	Each brsand name that appears here is the trademark or registered trademark of their respective owners.
*2	This document is an English translation of a document prepared in Japanese. In the event of any discrepancies between the content of the Japanese and English documents, the content of the Japanese document shall take precedence.

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1. Condition through Fiscal 2010

1-1. Trends in Hitachi Cable business Performance

The Hitachi Cable Group moved ahead with structural reforms during the period from fiscal 2004 through fiscal 2006 under its medium-term management plan "Survival Project," and then worked to build a new growth foundation during the period from fiscal 2007 through fiscal 2009 under its medium-term management plan Plan "BEGIN." The "Survival Project" plan was begun amid a harsh operating environment at a time when the end of the IT bubble had caused us to record losses, but we were able to restore our operating profitability during the first year of the plan, generating about 10 billion yen of ordinary income in fiscal 2004. In fiscal 2007, when we initiated our next medium-term management plan, Plan "Begin," we also smoothly improved our performance, attaining our ordinary income target of 20 billion yen for that year. In fiscal 2009, however, the impact of the rapid deterioration of our operating environment caused us to record considerable losses, including a net loss of 53.8 billion yen and an ordinary loss of 20 billion yen. In fiscal 2010, benefits from fixed cost reductions and other factors enabled us to decrease the scale of our losses, and we recorded a net loss of 9.1 billion yen and an ordinary loss of 4.9 billion yen. That year, we posted net sales of 372.5 billion yen, exceeding our initial forecast of 370 billion yen, but this reflected the impact of a surge in copper prices—from our initial assumption of 400 thousand yen/ton to approximately 600 thousand yen/ton. On a real basis defined as excluding this impact, our net sales amounted to only about 30 billion yen; so, we were not able to attain our net sales target on a real basis.

1-2. Ordinary income: Analysis of differences between FY 2010 forecasts and actual performance

If one analyzes the gap between forecast and actual levels of ordinary income in fiscal 2010, one will find that most of the factors that push ordinary income up or down were roughly in line with our forecast. The exception was the impact of lower net sales on ordinary income. We initially forecast that a decrease in sales would have the effect of reducing ordinary income by 12.3 billion yen. The fall in sales was greater than expected, however, and it had the effect of reducing ordinary income by 19.6 billion yen. This depressed ordinary income to a loss of 4.9 billion yen, compared with our forecast of 1 billion yen in profit.

1-3. Fiscal 2010 Structural Reforms

Aiming to improve our performance, we worked to implement diverse structural reforms during fiscal 2010.

In the electronic wires field, we merged or dissolved four of our overseas joint ventures to consolidate their operations within wholly owned subsidiaries.

Regarding automotive components, we worked to consolidate our bases in North America. We are moving ahead with the consolidation of brake hose manufacturing operations at bases in Florida and Mexico, and that consolidation process is scheduled to be completed this year.

With respect to TAB operations, we previously had three domestic bases for manufacturing COF (Chip On Film)items, but we have completed the consolidation of those manufacturing operations at a single facility of Hitachi Cable Film Device, Ltd.

In the copper products field, the market environment for copper tubes has dramatically changed over the past one to two years, and a considerable quantity of such items are now imported into Japan. In view of this, we must shrink our domestic manufacturing system for those items.

Looking at our marketing operations, we have merged two marketing companies in eastern Japan—Hitachi Densen Shoji, Ltd., and Fujinaga Electric Co., Ltd. Since April, our domestic marketing system has consisted of one company in eastern Japan and one company in western Japan.

Regarding our measures to reduce fixed costs, our initial cost reduction target was 17.5 billion yen, and we have already realized 16.6 billion yen of those reductions.

2. Overview of Plan "BRIDGE"

2.(1) Fundamental Policies

2-1. Issues confronting the Group

The Hitachi Cable Group's core strengths have stemmed from its provision of superior products as a comprehensive manufacturer of such electric wire products as industrial cables and magnet wires and from its stable business foundation in the wires and cables business. In addition, we have been emphasizing operations in the information systems business for several years, and those operations have grown and developed robust profit generation capabilities.

On the other hand, it can be said that the Group has a weakness in that it does not have strong capabilities for responding to market fluctuation risks faced by electronics-related businesses. Another weakness of the Group is overseas business. While the Group has about 20 overseas manufacturing companies, their profit earning power has fallen to an extremely low level.

2-2. Fundamental Policies of Plan "BRIDGE" (1)

The name of the Plan "BRIDGE" medium-term management plan is meant to suggest a physical road bridge along with the associated meanings of "something that enables people to surmount and overcome obstacles" and "something that helps people reach their destinations." In Hitachi Cable's case, the obstacle to be surmounted is the harsh situation we are facing, while the destination is the future attainment of our medium-term management plan's targets.

The three main categories of measures to be undertaken in accordance with Plan "BRIDGE" include "drafting and implementing strategies based on marketing," "review of priority target areas," and "strengthening of overseas businesses."

2-3. Fundamental Policies of Plan "BRIDGE" (2)

As the fundamental policy of Plan "BRIDGE" is to restore the Group's status as a highly profitable enterprise and to reshape it into a truly global business, the Group is implementing diverse measures to build a robust profit base. Previously, the Group aimed to increase the magnitude of its profit by expanding the overall scale of its business operations, but Plan "BRIDGE" is designed to promote business operations that place greater emphasis on profit ratios. To this end, each of the Group's businesses will individually manage its ordinary income ratio and seek to increase that ratio to a high level. In fiscal 2013, which is the final year of Plan "BRIDGE", we are aiming to raise consolidated ordinary income to the record high level of 25 billion yen.

Looking at concrete features of Plan "BRIDGE", the first noteworthy feature is the plan's measures to reevaluate priority target areas. The priority target areas of Plan "BEGIN" were electronics, automotives and wireless/broadcasting/information networks. The new medium-term management plan places emphasis on the fields of electrical power infrastructure and next-generation energy; industrial infrastructure; and information and telecommunications infrastructure. It also seeks to augment responses to environment-related needs. At the same time, the plan calls for moving ahead with restructuring measures in such previously priority fields as electronics, semiconductors and automotive components. Overall, the plan is designed to further strengthen our strong products, undertake a selection-and-concentration process regarding weak products and thereby focus efforts on a lineup of superior products.

Another noteworthy feature of the plan is its provisions for the fundamental strengthening of overseas business operations. The Group faces problems stemming from the small scale and low efficiency of each of its overseas manufacturing bases. In view of this, we are considering the establishment of core bases that are built on a larger scale than previous bases and offer greater efficiency. We are considering positioning such bases in China, Vietnam and certain other candidate locations. The Group is aiming to increase the overseas share of its sales to 38% by fiscal 2013.

2-4. Performance targets for medium-term management plans

In fiscal 2013, the final year of Plan "BRIDGE", we are targeting 500 billion yen in net sales, 25 billion yen in ordinary income and 14 billion yen in net income.

2-5. Management strategies to achieve goals

Regarding new and priority target areas, we will be placing emphasis on infrastructure fields in which demand is progressively growing, particularly overseas. In the fields of electronics, semiconductors and automotive components, we will concentrate our efforts on creating a lineup of superior products with distinctive features.

2.(2) Review of priority target areas

2-6. Focus policies in business sector

Since around the year 2000, Hitachi Cable has given strategic emphasis to such businesses as electronics, information systems, compound semiconductors and automotive components in accordance with its previous Plan "BEGIN" medium-term management plan. In addition, Plan "BEGIN" positioned power and industrial cables, magnet wires and copper products as basic businesses capable of dependably generating profit.

Based on Plan "BRIDGE", the Group is further increasing its emphasis on business in power and industrial cables and magnet wires centered on infrastructure-related products. Plans also call for giving still greater emphasis to information systems business. On the other hand, we will be undertaking additional structural reforms with respect to TAB products and automotive components. Regarding electronic wires, compound semiconductors, leadframes and copper products we will clarify our strategic selection-and-concentration decisions as a means of tightening our focus on strong products.

2-7. Net sales and ordinary income in priority target areas

In fiscal 2013, we estimate that 64% of our total sales will be derived from priority target areas. Of the 25 billion yen in ordinary income we are forecasting for fiscal 2013, we anticipate that 18 billion yen will stem from priority target areas.

2-8. Electric Power Infrastructure/Next-Generation Energy

Products in the fields of electric power infrastructure and next-generation energy include products in the heavy electric equipment field. We intend to proactively work to develop and promote sales of products used in connection with nuclear power facilities, for which demand is projected to increase. We also will be striving to meet demand for products related to wind energy. In addition, we plan to intensify our efforts to obtain orders related to large-scale electric power infrastructure projects, particularly in newly industrializing countries.

Going forward, we also expect growth in demand for products related to solar energy. Hitachi Cable has earned a high share of the market for solder-coated rectangular wires for solar cells, and we intend to maintain our strong position in that field.

2-9. Industrial Infrastructure

In the industrial infrastructure field, Hitachi Cable is particularly strong regarding wires for use in railway vehicles. Having completed the development of products that conform to European EN standards, we plan to promote sales of these products in markets throughout the world going forward. We also have a large share of the medical-use probe cable market, and we are working to further expand this market share based on high performance products that leverage our alloy technologies.

2-10. Information and Telecommunication Infrastructure

In the information and telecommunications infrastructure field, we have a high share of the domestic Ethernet switch market and are seeking to earn a still-greater share of the information network equipment market. Going forward, we aim to increase the volume of our business in such products as those related to mobile phones (and mobile computing). To encourage broader application throughout the world of the L2 transmission method that has become predominant in Japan, we are moving ahead with promotional activities centered on Southeast Asian markets, and the method has already come into use in Thailand and Vietnam.

Regarding antennas and high-frequency coaxial cables, we have obtained orders for work including that on antenna systems to be installed in Tokyo Sky Tree, and we will be completing that work going forward.

The market for optical submarine cables is currently experiencing a temporary period of slack demand, but we are emphasizing technology development and other measures designed to facilitate our response to the resurgence of demand in the future.

2-11. Electronics, Semiconductors and Automotive components Fields

In the electronics, semiconductors and automotive components fields, we are moving ahead with a selection-and-concentration process. As for electronic wires, we are emphasizing thin coaxial cables for medical probe cables and other applications as well as products for environmental protection applications.

Regarding compound semiconductors, we plan to further increase our already strong sales of epitaxial wafer products for high-frequency device. On the other hand, because of the harsh price competition in markets for LED-related applications, we will progressively concentrate our business in products for LED-related applications within a Taiwan-based subsidiary.

In the TAB field, we will minimize losses by establishing a COF manufacturing system on the scale required for profitability. We will be emphasizing business in memory-use TAB products going forward.

With respect to leadframes, our products for semiconductor applications are showing signs of robust performance. Moreover, there is an increasingly bright future for products for LED-related applications, and we will be endeavoring to enhance our business structure in this field going forward through such measures as those to reorganize overseas bases.

2.(3) Thorough strengthening of overseas businesses

2-12. Thorough strengthening of overseas businesses

To date, we have established overseas capabilities for individual products in response to moves by our Japan-based customers to create an overseas presence in various regions. As a result, our overseas manufacturing plants have tended to be relatively small-scale facilities that are dispersed geographically, and there have been problems with the profitability of those plants. Going forward, we intend to promote greater sales to non-Japan-affiliated companies and proceed with the expansion of our overseas business by using marketing-based strategies. Regarding geographic regions, we are targeting markets in growth regions in Asia and elsewhere.

2-13. Percentage of sales overseas: Comparison of four industry firms

Hitachi Cable's overseas sales ratio was at levels around 30% for many years but fell to 25% in fiscal 2010. This drop reflects overseas Group companies' use of fiscal years ending in December, making fiscal 2010 a year in which the impact of deteriorating economic conditions on their net sales was particularly strong. Despite that temporary situation, we anticipate that the overseas sales ratio will rebound to the approximately 30% level in fiscal 2011. Going forward, we will be seeking to boost the ratio to the vicinity of 40%, which is the top level for our industry.

2-14. Measures to strengthen overseas businesses

First, we will move ahead with a reevaluation of the allocation of responsibilities among overseas bases and with the creation of core manufacturing bases. We want to complete the plant under construction in Vietnam and begin operating it as quickly as possible, and we are considering measures to transform that plant into a core manufacturing base for the Southeast Asian region. We are also reevaluating our worldwide business execution systems and taking steps to optimize business processes, including component and materials procurement, manufacturing, and distribution operations.

In priority target areas, we will be responding to demand for products with applications related to next-generation energy technologies, building overseas manufacturing systems for infrastructure-related products and also emphasizing associated marketing activities. We will be advancing with the expansion of our marketing routes through various means, including a strengthening of strategy regarding corporate alliances.

Going forward, we will be implementing strategic measures designed from a Companywide perspective, and the Global Business Development Group we established in April will be playing a central role in the planning and implementation of those measures.

2-15. Target percentages for sales overseas

Our overseas sales ratio target for fiscal 2011 is 30%, and the target for fiscal 2013 has been raised to 38%.

2.(4) R&D Expenses, Capital Investment, Depreciation, Etc.

2-16. Strengthening R&D capabilities

To a certain extent, we have been maintaining the level of our R&D expenses even after the deterioration of our performance in fiscal 2009, but our plans call for gradually raising that level going forward. Our strategy for bolstering R&D power calls for expediting product development and commercialization processes and also calls for giving additional emphasis to fostering the creation of new element technologies. In addition, as a means of strengthening overseas business, we will be strengthening our intellectual property strategy.

2-17. Trends in Capital Investment and Depreciation

We restrained our capital investment to 13.9 billion yen in fiscal 2010, and we anticipate that capital investment in fiscal 2011 will be at the same level. In light of Hitachi Cable's real capabilities, we believe that roughly 20 billion yen of depreciation expense is an appropriate level; so, we will seek to maintain this level going forward. In addition, while the sophisticated materials segment recently accounted for a large share of the Company's capital investments, we are decreasing that share while advancing with investments in the wires and cables segment, which has many infrastructure-related products.

2-18. Net Sales and Ordinary Income by Segment

Looking at the performance of individual business segments, we are expecting our wires and cable segment as well as our information and telecommunications segment to contribute to our overall profitability.

2-19. Leading Management Indicators

In fiscal 2013, we are aiming to post 500 billion yen in net sales and 25 billion yen in ordinary income, for an ordinary income rate of 5%. The growth in profits will be accompanied by an increase in total assets, which we expect to rise roughly 21.5 billion yen, to 310.4 billion yen. Our free cash flow target is 8 billion yen.

2-20. Keeping to the Straight and Narrow (Compliance and CSR Management)

Our Code of Conduct calls for adherence to a rigorous compliance philosophy expressed by the phrase—"Keep to the Straight and Narrow" —and management gives top priority to efforts to ensure we operate in accordance with this philosophy. Since last year, our investigation by the Japan Fair Trade Commission and other matters have been cause for concern. Going forward, however, we are determined to make the efforts required to ensure such problems do not recur, so that we can regain society's trust and confidence.

Conclusion

In line with the fundamental policy of Plan "BRIDGE"—which is to revitalize Hitachi Cable as a highly profitable enterprise and to transform it into a truly global business—the Group will be emphasizing business in infrastructure fields, strengthening its profit rate management processes and seeking to increase its overseas sales ratio. To achieve these objectives, we will be drafting and executing strategies based on marketing considerations.

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Questions and Answers

Q.	What do you think about market fluctuation risks with respect to business fields where you are advancing with a selection-and-concentration process?
A.	Our electronics and semiconductor-related products are associated with a relatively high level of business risks stemming from market fluctuations. In accordance with the Plan "BRIDGE" medium-term management plan, we will be reducing the weight of such products in our portfolio and thereby diminishing the business risks we face.
Q.	In the electronics, semiconductors and automotive components fields, how much progress have you made in reorganizing your manufacturing systems?
A.	We have completed the consolidation of COF operations, and we will be advancing with measures to establish related manufacturing systems that are appropriate in light of demand trends. Regarding leadframes, we have two manufacturing plants in Japan and four overseas, but there has been insufficient coordination of the operations of those plants up to now. Going forward, we will aim to clarify each plant's mission, foster the development of each plant's strengths, and thereby create the optimal manufacturing system from the perspective of the Group as a whole. Regarding copper tubes, imported products are meeting a rising share of demand in Japan; so, we see a need to shift some of our manufacturing operations to overseas bases and thereby increase the share of imported items in our product lineup. We will be sharpening the focus of the roles of our domestic plants, which will specialize in the manufacture of products featuring particularly high quality.
Q.	What kind of optical submarine cable demand trends are you expecting to see during the term of the Plan "BRIDGE" medium-term management plan?
A.	We are expecting the demand hiatus to continue through the first half of fiscal 2011 followed by double-digit numbers of projects getting under way beginning from the second half; so, we are forecasting our fiscal 2011 net sales in this field to amount to roughly 5 billion yen. There are still many unclear factors with respect to demand during fiscal 2012 and fiscal 2013, but, in general, we are expecting that our net sales in those years will be similar to the fiscal 2011 level of roughly 5 billion yen.
Q.	Among the priority target areas of the Plan "BRIDGE" medium-term management plan, which fields do you expect to make large contributions to your profitability?
A.	We are expecting contributions to our profitability from our solar cell-related products and electric power infrastructure-related products as well as from our wires and cables for use in railway vehicles. In addition, although our information network equipment products require considerable R&D expenditure, once their sales volume surpasses a certain level, they can make a rising contribution to the Company's profitability.
Q.	What kinds of investments and expansion strategies are you planning to use to grow your operations in the priority target areas?
A.	We will be proactively making investments designed to expand our overseas business related to industrial cables. We also expect to make investments related to magnet wires associated with electric power infrastructure. The manufacturing facilities we will be investing in will require some time before they can begin operating; so, we expect to begin posting depreciation expenses associated with the plants beginning from fiscal 2013.
Q.	What kind of benefits have you obtained from the structural reform measures you have implemented so far?
A.	Regarding measures for which the benefits can be calculated, our use of impairment accounting has reduced annual depreciation expense by 0.3 billion yen. Management rationalization measures at Hitachi Cable Film Device have generated 0.8 billion yen of benefits, while we believe that our measures to reduce the number of subsidiaries in the electronic wires field have generated about 0.1 billion yen of benefits. In addition to those benefits, our reassessment of the global distribution of manufacturing tasks and other initiatives are also generating benefits. The aggregate value of all these and other benefits in terms of the reduction of annual expenses is expected to be roughly 3.5 billion yen.
Q.	What trends in fixed costs are you anticipating during the term of the Plan "BRIDGE" medium-term management plan?
A.	During the period from fiscal 2010 through fiscal 2013, we are expecting a slight rise in personnel expenses and a slight decrease in depreciation expense; so, the overall level of fixed expenses should be almost unchanging. In addition, as the plan calls for a trend of growth in net sales during the years through fiscal 2013, our original performance forecast anticipates that the net sales growth will be accompanied by a rise in personnel expenses.