It is time to start. We are now going to start with Hitachi, Ltd's web conference on Q1 FY 2022 earnings. Thank you very much for attending despite your busy schedule. As for today's presentation materials, they are posted on Hitachi, Ltd IR site and the news release site. Please confirm the materials when needed. Now, let me introduce today's speakers. Yoshihiko Kawamura, Executive Vice President and Executive Officer, CFO of Hitachi, Ltd. Tomomi Kato, Vice President and Executive Officer, Deputy CFO. Masao Yoshikawa, Executive General Manager, Investor Relations Division. These are the three participants from our side. Now, Mr. Kawamura will introduce the outline of the financial results. We are going to switch the screen. Please wait for a while.
Mr. Kawamura, over to you. Thank you. Ladies and gentlemen, thank you very much for taking time out of your busy schedules to join us today. Hitachi, Ltd's first quarter results for fiscal year 2022, and based on that, we would also like to share with you our full year forecast for FY 2022. I would like to use the material as I speak. If you could please look at page three. Here are the key messages of the first quarter results one, two, and three. First is about the numbers for the first quarter. Second is about DX and GX, digital transformation, green transformation, the areas which are performing very well. Number three is about the full year forecast.
To come back to number one, in the first quarter, the business performance, as is described here on a consolidated basis, revenue was JPY 2,569.8 billion, up 9% year-on-year. Adjusted EBITDA was JPY 154.8 billion. It was down JPY 6.3 billion year-on-year. Quarterly net income was JPY 37.1 billion, down JPY 85 billion year-on-year. The reasons for decrease are as noted below. With respect to Digital Systems & Services and Hitachi High-Tech, these saw increases in revenue and profit, as we will discuss later.
There was a large decrease due to semiconductor shortage and lockdown in China in Hitachi Astemo and Smart Life & Ecofriendly Systems appliances business. This was reflected in the numbers I just mentioned. There's another one-off factor, as is in the third bullet. We shifted to risk-sharing corporate pension plan. It's a one-time factor, but there's impact, JPY 51.1 billion of impact. This is another factor negatively affecting the numbers. Going to point number two, areas which are performing very well, DX and GX. For these business areas, performance is robust and growing successfully. Lumada business, including GlobalLogic, is performing well. Hitachi Energy and Railway Systems have seen increases in orders. For specifics, please take a look below.
Lumada business was up 58% year-on-year in revenue. Adjusted EBITDA ratio was around 12%. GlobalLogic has been seeing a very rapid growth up 47% year-on-year. Hitachi Energy's orders remained firm. This is related to the environment. It has a strong tailwind blowing for Hitachi Energy, as is in the brackets, order backlog of approximately $16 billion. Actually, this is worth a year's backlog or even more. Railway Systems business orders are very firm. Order backlog JPY 3,718.6 billion . GX, DX businesses are doing very well. Based on one and two, what's going to happen for the full year, number three.
In the brackets, these are the numbers noted in the outlook we announced in April. FY 2022 forecast is revised upward for revenues of JPY 9.85 trillion, up 4% from the previous forecast. Adjusted EBITDA, JPY 845 billion, up JPY 25 billion from previous forecast. Core free cash flow, JPY 235 billion, up JPY 25 billion. Net income, our forecast of JPY 600 billion remains the same from April. JPY 600 billion of net income forecast is record high. We used to say that it's around JPY 570 billion, but it's JPY 600 billion in terms of forecast.
There are going to be major divestitures that we are planning. List of subsidiaries were up for divestiture according to our plan we have set. Hitachi Construction Machinery share is to be expected to be divested in the first half. Hitachi Metals, Hitachi Transport System are to be divested by the end of FY 2022. Hitachi Transport System's divestiture is already ongoing. With the divestitures of these three listed subsidiaries, there's going to be negative impact on revenue, but this is according to our plan. Please have a look at page four. This is a description of macroeconomic outlook. Please have a look at the table. Calendar year 2022, this is March forecast by Hitachi Research Institute.
In the middle or to the left, there's forecast as of June. GDP outlook is down for a number of countries. Well, social infrastructure is the area that we focus on, so we will be affected by the macroeconomic environment. Please have a look at negative factors in the right-hand side, lower quarter, as I will provide you with the details. Material and parts prices are up. Logistics disruption. Semiconductor shortage is also having impact, especially for automotive and electric appliances business. Please have a look at page five. By specific business segment and business area that's been impacted by these factors.
On the horizontal axis, semiconductor shortage, soaring material prices, activity constraint due to pandemic, and lastly, situation in Ukraine and Russia. Vertically, business segments are described. Please have a look at the boxes highlighted in black solid line. Astemo, because of a semiconductor shortage, part price increases, these are affecting Astemo. In Shanghai, we are producing substrates for electric appliances, so washing machines. Because they are not being produced and supplied to Japan, we have not been able to produce these products, and that business is affected. On the far right, with respect to Ukraine and Russia, the impact has been minor. Please have a look at page six. These are about the major business areas snapshot.
Clockwise, top left, GlobalLogic. As I just said, GlobalLogic is growing very rapidly. It was up 47% in terms of revenue year-on-year. Adjusted EBITDA +41%. Hitachi Energy to the right. Revenue is doing very well, 14% year-on-year increase. Adjusted EBITDA ±0%. It's being affected by material price increase, especially electrical steel sheet price, and we have to absorb increased costs. Compared to last year, it's flat. Please have a look at right-hand side lower corner, Hitachi Astemo, which is affected by semiconductor shortage year-on-year as well as quarter-on-quarter, both numbers are noted. Adjusted EBITDA is down by JPY 70.8 billion year-on-year. Quarter-on-quarter, JPY 29.6 billion decrease.
Severely affected by market conditions. Hitachi High-Tech, to the left, clinical business, medical business, and semiconductor manufacturing equipment business is doing very well. You can see that by the numbers. Now, order results. Orders are very strong. At the very top, Digital Systems & Services, YoY, up 12% year-over-year. Hitachi Energy, 102% increase year-over-year. These are the areas where orders have increased substantially year-over-year. Hitachi Energy has almost doubled in orders compared to last year. As I said up front, because this is a business related to the environment, there is very strong tailwind for this business. Please go on to page eight. Here are the numbers for Lumada. Now, with respect to Lumada, up until last year, we disclosed based on two categories.
One is core, the IT business per se, and related business where IT is applied. Starting this year, we are using these four quadrants. Please have a look at the table below. Digital engineering, as is noted on the right. GlobalLogic is included in digital engineering. System integration. Below that is connected products. As is in the right-hand side part, Lumada is implemented on hardware and power grid equipment, and other connected products. The last one is managed services. Getting back to the upper left-hand side bar chart. On the left shows the comparison between Q1 last year and this year, and a yearly comparison on the right. Please have a look at the comparison.
Second from the bottom, a darker red, JPY 660 billion, up 64% year-on-year. This represents connected products, so semiconductor manufacturing equipment where Lumada is implemented on hardware. This is growing very steadily. Margin is 13%, very high. 34% increase forecasted JPY 1.87 trillion. On the right-hand side Q1 FY 2022, and on the right, or to the right, FY 2022 forecast and our revenue JPY 1.87 trillion. You can see that the business is split 50/50 between Japan and overseas. These are the qualitative comments for the performance in Q1. Let me show the numbers next. Have a look at page 10. Here are the highlights for the numbers for Q1.
On the left, revenue, on the right, adjusted EBITDA. Please have a look at the revenue bars. Darker gray is unconsolidated, three sectors plus Astemo. Light gray represents listed subsidiaries. As you can see, for both three sectors plus Astemo as well as listed subsidiaries, our revenue has increased. On the other hand, adjusted EBITDA has gone down, as it is on the right. That's because of impact from China's lockdown, semiconductor shortage, Astemo and electric appliance business is down. YoY are down JPY 6.3 billion for adjusted EBITDA. On the far right, overseas revenue JPY 1.696 trillion, up 16% YoY. Lumada business JPY 399 billion, 58% year-on-year. Net income attributable to shareholders JPY 37.1 billion, down JPY 85 billion year-on-year.
EBITDA JPY 222.7 billion, down JPY 77.2 billion because of risk-sharing corporate pension plan and the shift thereof JPY 50 billion. Cash flow from operating activities JPY 106 billion, down JPY 30 billion. Core free cash flow, as noted, there are increased orders from power grid and so forth and therefore increased working capital are needed, and that's reflected in cash flow from operating activities. Moving on to the next page. Three sectors, Astemo unlisted subsidiaries, the breakdown is given. From left to right. Increased our revenue, decreased profit 7.6%, that's the ratio for three sectors. Astemo increased our revenue, decreased profit. Unlisted subsidiaries increased our revenue as well as profit.
As is, on the right, total adjusted EBITDA JPY 154.8 billion. Revenue JPY 2,569 billion. Moving on to the next page twelve and onward. These are the details of each segment. On page twelve, Digital Systems & Services, Green Energy & Mobility are described. Digital Systems & Services, please have a look. In the first quarter, revenue JPY 505 billion and adjusted EBITDA JPY 49.3 billion, 9.8%. Increase of JPY 5 billion in adjusted EBITDA year-on-year. Green Energy & Mobility, have a look in the same way. Revenue of JPY 512.4 billion, EBITDA JPY 18.5 billion. The ratio is lower at 3.6%. This will be increased.
YoY 108%. Adjusted EBITDA +JPY 6.7 billion. Next, Hitachi Energy. Revenue JPY 301.9 billion. Adjusted EBITDA JPY 70.4 billion. Revenue is up because of increased power prices, but in terms of EBITDA, it's flat year-over-year. Below other, Railway Systems, JPY 155.7 billion revenue, JPY 6 billion adjusted EBITDA, 107% increase of 6.3 billion in EBITDA. Next, Connected Industries, JPY 670.8 billion in revenue. Adjusted EBITDA JPY 61 billion, which is 9.1% revenue, 100% EBITDA flat. Please have a look at Smart Life & Ecofriendly Systems. This is about electric appliances. Adjusted EBITDA was down by JPY 9 billion year-over-year. That's because of the severe impact from Shanghai lockdown. Next, page 14, please.
This shows the subsidiaries. The top is Hitachi Astemo. For Astemo, if you look at the right-hand side, YoY adjusted EBITDA is JPY -17.8 billion. Hitachi Construction Machinery, if you look at those items, 117% + JPY 8.1 billion. Hitachi Metals, 122% + JPY 3.8 billion. Next is page 15. This shows the revenues. The left-hand side is Q1 last year until Q1 this year, how did it move, and also the bottom one is adjusted EBITDA. Look at the revenues at the top. Last year was JPY 2,367.4 billion. GlobalLogic acquisition effect. Another major feature now is the weakening of the yen. JPY 184 billion is the impact of foreign exchange and also the other adjustments.
On the right-hand side are JPY 2,569.8 billion. Adjusted EBITDA also is the same terms of items. Left-hand side is Q1 last year, and the acquisition of GlobalLogic was positive. Impact of foreign exchange and others on the right-hand side, JPY 154.8 billion. This is how it's trended. Next is page 16. This shows the cash flows. This is as of end of Q1, so these are snapshot as of end of Q1. The top one is the situation of BS. Because of the weakening of the yen, it used to be JPY 10 trillion-JPY 11 trillion, but now it's more than JPY 14 trillion. This is the situation. If it in terms of full year, it would be about JPY 0.4 trillion-JPY 0.5 trillion.
As of end of this fiscal year, net equity ratio will return to the normal situation. Below are the cash flows. Cash flow from operating activities, JPY 106.1 billion. Investing activities, -JPY 72 billion. Free cash flows, JPY 34.1 billion. Core free cash flows, deducting CapEx from investment activities, it is JPY 5.3 billion. Next page, 17, revenues by market. Clockwise, the small circle is a comparison between Q1 of previous year and this year. North America is growth of 32%. Europe, growth of 20%. China, there has been adjustments, so compared to the past, there is a slowdown. The growth is 1% and going down. What is tough is the situation in Japan. You can clearly see that Japan is a tough situation. Japan's growth is negative as shown below.
Astemo and the home appliances are greatly influencing, leading to this negative growth. ASEAN, India, 12% growth and other areas, 16% growth. China and Japan are facing a tough situation. In total, overseas revenues, JPY 1,696.3 billion. The ratio out of a total is 66%. This was the situation of Q1. Next is the full year forecast for FY 2022. Please turn to page 19. Just like Q1, left-hand side is revenue, right-hand side, adjusted EBITDA. Revenues, as you can see, we expect a decline. Adjusted EBITDA also is going down. The reasons, as you can see in the graph below. Just like the previous one, dark gray are the three sectors, plus Astemo. Pale gray are listed subsidiaries.
For revenues, three sectors plus Astemo are growing, but subsidiaries, as I mentioned, there will be a reduction. Adjusted EBITDA to the right is facing a similar situation as you can see on the graph. Three sectors plus Astemo is growing, but listed subsidiaries, there will be a decline. In terms of a total consolidation, there will be a slight decline. Three sectors and Astemo, there's increase in revenues and profit, but in general, because of the changes in the assets, there will be a reduction in revenues and profit. Look at the figures at the right. Lumada will go up to JPY 1,870 billion. Net income, JPY 600 billion. There is no change from April. This will be a record high figure.
EBITDA, the largest part of cash flow, JPY 1,444 billion compared to previous year, +JPY 51.1 billion. Cash flows from operating activities, JPY 675 billion, down JPY 54.9 billion year on year. Because of increase in working capital, we are seeing this situation. Core free cash flow, JPY 235 billion, influenced by working capital and ROIC 7.2%. FX rate we assume is JPY 130 . It was JPY 120 in April, so we calculated at JPY 130 . FX sensitivity, if there is JPY 1 movement of a dollar, there will be an impact of JPY 13.5 billion revenues and JPY 1 billion to adjusted EBITDA. Page 20 onwards shows a forecast of individual businesses. Page 20 are the three sectors and Astemo, and listed subsidiaries figures.
Look at the three sectors. We expect increase in revenue and EBITDA for a full year. Revenue, JPY 7,050 billion. Year-on-year increase of 105%. Previous forecast comparison is 102%, which is increase. Adjusted EBITDA, JPY 690 billion, year-on-year increase, and adjusted EBITDA ratio goes up to 9.8%. In the previous medium-term plan, we expected 10% increase in terms of operating income. Because of the pandemic, I said that there will be a delay of about one year, but now it's up to 9.8%. We need another 0.2%. There are still three quarters remaining, so we will try to raise this level to 10%.
The figures under the 2021 medium-term plan will be achieved with a delay of one year. Net income, JPY 570 billion. Astemo increase in revenues and profit, JPY 1.8 trillion and JPY 92 billion adjusted EBITDA. Losses of subsidiaries will be reduced over full year. There will be reductions both for revenue and profit. The right-hand side shows the total revenues, JPY 9.85 trillion. Adjusted EBITDA, JPY 845 billion, 8.6%, and net income, JPY 600 billion. Please turn to page 21. This shows the forecast by business segment. Page 21, Digital Systems & Services and Green Energy & Mobility. Digital Systems & Services at the top. Full year forecast is JPY 2.290 trillion.
Adjusted EBITDA is JPY 300 billion, so the ratio will go up to 13.1%. Going to the right, YoY 160% +18.5%. From the previous year, growth is going on smoothly. Green Energy & Mobility, JPY 2.3 trillion, JPY 159 billion, 6.9%. 112%, JPY 66.6 billion. Going down to Hitachi Energy, JPY 1,291.2 billion revenue, JPY 104.5 billion profit. Ratio has recovered to 8.1% and YoY revenue 110%, adjusted EBITDA JPY 39.2 billion.
Railway Systems is at the bottom, JPY 687.9 billion, JPY 43.5 billion, 6.3% and YoY 109% + JPY 14.6 billion. Page 22. This is Connective Industries. Total at the top, revenues JPY 2,770 billion, adjusted EBITDA JPY 296 billion. It is more than 10%, 10.7%. YoY 101%, adjusted EBITDA 38.1 billion. Going down, for Smart Life & Ecofriendly Systems to the right, adjusted EBITDA comparison. With that, there's a reduction of JPY 8 billion. Page 23. These are the subsidiaries. First one is Astemo.
As I have been saying, because of the lockdown in China and the influence of a semiconductor, as you can see to the very right-hand side, adjusted EBITDA was revised by JPY 17 billion, and Hitachi Construction Machinery, Hitachi Metals are recovering. Page 24. These are revenues adjusted EBITDA comparing full, last year full year and this year. For revenues, FY 2021 was JPY 10,264.5 billion. In GlobalLogic acquisition and the divestiture of listed subsidiaries was negative impact. There's a positive impact of foreign exchange and others. The right-hand side, forecast for FY 2022, JPY 9,850 billion. Adjusted EBITDA below, also left-hand side is last year, 855.3. Acquisition of GlobalLogic and divestiture of subsidiaries for foreign exchange. To the right-hand side, JPY 845 billion. Page 25. The same trends are shown.
The top part is FY 2021, bottom one is FY 2022, showing how net income is proceeding. For FY 2021, JPY 855.3 billion, and right-hand side, JPY 583.4 billion, and the factors are shown. From the third one from the right, income taxes rate is about 20%. GlobalLogic was acquired in North America, and there was tax benefits from that acquisition. Income tax rate is 21.1%. FY 2022, starting from JPY 845 billion, going to the right. The third one, Hitachi Construction Machinery, Hitachi Metals, and Hitachi Transport System divestitures take place. Going further to the right, there is the shift to the risk-sharing corporate pension plan. The right-hand side, tax rate is 25.3%.
Astemo is having losses, so that leads to lower revenue. There are profits at the subsidiaries, which means that effective income tax will be higher, so the effective income tax rate gets higher. Right-hand side, net income, JPY 600 billion. Lastly, page 26. This shows a summary of a consolidated statement of profit and loss. The gray on the left-hand side is Q1, revenue starting at JPY 2.569 trillion, and operating income JPY 121.5 billion, and adjusted EBITDA JPY 154.80 billion. There are adjustment items and EBIT JPY 80.60 billion, and net income JPY 37.1 billion. FY 2022 revenues JPY 9.85 trillion. Adjusted operating income is JPY 725 billion.
The other adjusted items, adjusted EBITDA JPY 845 billion, and EBIT JPY 903 billion, and net income JPY 600 billion. This is our plan. This is all from me. This is Hitachi, Ltd Q1 earnings results and forecast for the full year. Thank you.
Thank you very much. We would like to move on to questions and answers. Those of you with questions, please use the raise hand button on the web conferencing system screen. Among those of you who raised your hand, we will be calling upon you by your name, as so please state your name and affiliation before asking your questions. If you no longer wish to ask your questions, please cancel the hand raise button. Because of the setup today, we're not going to show the video of the persons who are asking questions. We would like to take questions first from the members of the press from the Japanese channel, and then move on to institutional investors, analysts, and then to the members on the English channel. That will be the order.
First, the members of the press, the media on the Japanese channel, please ask questions if you have any. Use the hand raise button. Any questions? Hiroi-san, please unmute and start your questions. Question. Can you hear me? The question I have. I have two main questions. Excuse me. Excuse me. Your voice is breaking up, so if you could please repeat once again. Apologies. I'm sorry. As this is the business results of the first quarter of the new mid-term management plan. What is your assessment? It's only three months into the new plan. For the execution of the plan, for the mid-term business plan, what's been the achievement and what are the challenges? That's my first question.
If you could go on to your second question. Should I? Yes. Here's my second question about the risk factors. Semiconductor prices, parts and components prices, and impact of lockdown in Shanghai, as is described on page eight in graphs. If you could tell the impact for each of the factors, please. Well, thank you for the question answer. As you rightly pointed out, we're having the first business results of the first quarter into the new medium-term business plan. What's our assessment so far, was the question. As I said, there are areas that are on plan. On the other hand, like Astemo and electric appliance business, there are those who are underperforming compared to our initial plan. Macroeconomic environment, semiconductor problems in Shanghai.
There are a number of factors and reasons, but inclusive of that, we need to manage our businesses properly. That's what business management is about. We are learning lessons here, reflecting upon the fact that we have not been able to do so sufficiently. How to improve Astemo and electric appliance business going forward into the second half, that's what we have to do. In terms of cash flow, the FY 2024 medium-term business plan, the most important cash flow is core free cash flow. From operating cash flow, you subtract CapEx. We want to maximize this. Core free cash flow in Q1 was not sufficient. From the second quarter into the second half, we would like to expend our maximum effort to maximizing core free cash flow.
We're looking into CapEx. We're taking a look at CapEx. We would like to suppress investments into a fixed asset while investing in intangibles. By so doing, we would like to curtail a CapEx so that we can maximize our core free cash flow. Specifically, we're going to focus on recovering Astemo and electric appliance business and overall free cash flow control will be improved. Based on this assessment in the first quarter, we would like to continue running our businesses for the rest of the fiscal year 2022. For the next three years under the FY 2024 medium-term business plan, now that challenges are clear, I think we will be able to come up with the countermeasures steps for that.
Given that these two businesses I mentioned are underperforming, we can't necessarily say that everything is good. I think we have been able to set forth our first step based on the plan. To answer your second question, I would like to turn to Kato-san for an answer.
Kato speaking. First about the impact of semiconductor shortage. Shortage existed last year, so compared to last year, ±0%, it's been flat. But in terms of the absolute numbers in the first quarter, in terms of revenue, there was a negative impact of JPY 40 billion. It mainly concentrated in Astemo, automotive parts business. Second, the impact from rising part prices, parts prices are year-on-year, in the first quarter of JPY 35 billion. That's the direct impact. With various efforts on our side, the net impact was JPY 30 billion in profit. Lockdown. Well, this is a factor specific to this year. JPY 40 billion in the first quarter, in revenue and JPY 20 billion, in EBIT. Astemo and GL, these were the businesses affected. That would be all.
Thank you very much. Thank you. Then next. Yamazaki-san, please unmute yourself and raise your question. I'm Yamazaki from Kyodo Press. Can you hear me? Yes, I have a few questions. In the earlier question, Kawamura-san mentioned that the issue is how to recover in the second half the home appliances and Astemo. I wanted to know how do you plan to recover this business? As for your forecast revenue, you made an upward revision. What are major factors for that revision? Number three, shortage of semiconductors is continuing. Until when do you think this shortage will continue? How long do you expect this will continue, and what measures do you plan to take against that situation? Those are my three questions. Thank you for your question. Number-
Questions one and three, I will answer, and the second question about upward revision, Mr. Kato will answer. For Astemo and GL, what are we to do about that? For home appliances, we are thinking of doing two things. Shanghai lockdown is now relaxing, and as I have said, centered on washing machines, the control board production is already starting, and we are starting to have those parts coming to Japan. Refrigerators and washing machines are now possible to manufacture in the factories in Japan. We are collecting market information from mass merchandisers and others, and our washing machine and refrigerators have a very big potential demand and also vacuum cleaners as well. In Q1, demand that we couldn't respond. In Q1, we plan to focus in responding to such demand in the second half because the boards will be introduced.
For refrigerators and washing machines and vacuum cleaners, we plan to concentrate in the second half. With the weakening of the yen, exports. We have a joint venture with Arçelik, a Turkish company in selling overseas, and they have a global network, so we can use this company for exports. In the second half, we plan to recover our performance. For Astemo. The last question about semiconductors. Because of semiconductors problem, when this will recover? Of course, we are watching the situation. We are trying to go through a fundamental reform. Automotive manufacturers, we are a subcontractor to providing parts and components to automotive manufacturers. That occupies a very large portion. We will gradually reduce that level and increase areas that we can deploy by ourselves. There is a Bosch model. There's the IT, which is a precision machinery.
Instead of being a subcontractor, we want to introduce our own model and as Bosch and we are like a subcontractor, but we want to look at their business and see how we can provide our parts. Also we have our unique technology, which is not like a subcontractor, like safety, and we are taking such measures, so we expect results. Secondly, within Astemo's business, what is difficult are our chassis. Chassis, if electrification continues, they're not heavy chassis that used to be in the past, but they'll be lighter in weight, and we will allocate more resources to that. Number three, cost control. To be more specific, integration of factories and concentrate more on R&D, like ADAS and electrification. We are making a general research on that towards the second half.
We will wait for the recovery of the semiconductor market, but ultimately, we want to recover our revenue and profit. This is about recovery of home appliances and system. The second question will be answered by Mr. Kato, the content of upward revision. Compared to what we announced in April in terms of sales, 4% is + 4% and adjusted EBITDA, JPY 25 billion upward revision was made. In general, there's a big impact from foreign exchange. By sector, as for the features, in terms of profit upward revision, Green Energy & Mobility is JPY 7 billion. It has impact of foreign exchange, but the power grid, Hitachi Energy, has been accumulated demand, as I have said, and that is influencing. For this, there are more deals and also there's the impact of foreign exchange, which leads to higher profits.
For Connective Industries, there is impact of foreign exchange, but because of a lockdown in China, performance deteriorated, so there is a downward revision. In automotive, it was already explained before. Roughly speaking, there's impact of foreign exchange, but for power grid, there is the influence of increase in deals. Thank you very much. For semiconductors, from a macro perspective, actually, this time last year, we expected that after one year, which is this year, there'll be more room for in terms of supply, but it is still in a very tough situation. But it's not that all semiconductors are facing a tough situation. It is different from last year's semiconductors. There's a concentration investment in for the advanced semiconductors that is used on AI and others of a nano type semiconductors. But for automotive semiconductors, they are not the super advanced.
They're about 20 or 30 nano. There is one or two generations older. Compared to advanced semiconductors, there is some delay in investment, so the supply and demand situation is not yet fully relaxed. For the semiconductors to be used in automotive purpose of a low-end semiconductors, we expect the current situation will continue for about one year. We are talking with semiconductor manufacturers about the specifications to provide it to the manufacturers, but the industry as a whole, that is the situation of supply and demand. The semiconductors that are used in automobiles, the low-end type, 20 or 30 nano semiconductors. To be able to recover, we believe will take another year. This situation is going on. What we are doing right now is that not semiconductors, but we are trying to control the operations through software.
At Hitachi, we are making developments of software that can be used for semiconductors. By doing so, not to use the semiconductors that is in shortage, but change the design so that we can use semiconductors that are relatively available, so that the impact can be minimized as much as possible. That is all. Thank you.
Thank you very much. Well, thank you for the questions. Just one point from the MC. Lockdown, a negative impact in the first quarter, a negative JPY 60 billion. That is something that the MC wishes to comment on. Next. Let's move on to the next person. Please unmute and state your questions. Question. Can you hear me? Yes. Thank you very much for the presentation and the remarks. At the outset, revenue growth in GlobalLogic is doing very well, it was mentioned. In April, GlobalLogic Japan was established and new projects are up and running. In terms of business in Japan, what would be its strategy in the second quarter onward? Well, thank you for the question. Answer. As was mentioned, in April this year, we established GlobalLogic Japan.
Here in Japan, there are not a lot of companies who specialize in DX. Although demand in market for DX is high, supply has not been enough. We're targeting that, and that was the reason why we established GlobalLogic Japan. We are already having specific business consumer manufacturers manufacturing companies wholesalers. All these companies are making inquiries to GlobalLogic Japan with respect to DX. We are providing individual consulting service. We are inviting experts from the U.S. to perform a joint research project and so forth. We're starting these efforts. How much profit are we going to gain? We will come out with a plan soon.
Profit in GlobalLogic Japan is expected. We're going to have expertise from the U.S., and we need to recruit people. People recruited will be placed in Tokyo so that in wholesale manufacturing and so forth, we would like to capture our DX business. In the next announcement, we hope to have more discussions about GlobalLogic Japan included. That is the overall direction of GlobalLogic Japan.
This is Yoshikawa speaking. Let me add to that. It's been just a few months since we established the business. In June, we made an announcement about DX partnership with Nojima. We released information about that project. Digitization of real brick-and-mortar stores through that and other means, we're going to implement DX. At this moment, the business is at a small scale, but onshore and offshore included in the future. The staff will be increased to 1,500 people. That's the plan, which I wanted to add. Thank you. Thank you very much. 1500 you said, that's for Japan? Well, onshore and offshore included. It's not just Japan. For both, 1,500 staff members. Thank you.
Thank you very much. Doi-san, could you unmute yourself? Doi from Asahi Shimbun. Can you hear me? I have two questions. Sectors in Japan, we are facing the seventh wave of COVID-19. Currently in your business or performance, is there any influence to your business? And to prevent such impact, what measures are you taking? Another question. In your forecast for the full year, you said that China and Japan both are facing a difficult situation. What are the factors for that? Those are my two questions. Thank you for your question. First, the seventh wave of the pandemic. In the last one or two years, there has been a large increase of people infected. I'm concerned about it, but so far there is no major impact on our operation.
At the head office as well, people are working as usual and at our factories also we are not facing any lockdown. We are able to overcome the situation so far. Of course, we have to keep vigilant. Centers of remote work, working from home, we are able to work from home. At our factories we are taking shifts so that the employees will not have to be gathered together to enhance the risk of infection. So far, it is all right with us. Vaccination, we are doing our best so that people can be vaccinated. It's been under control so far. If there's a further increase of people infected, we may have to think of other measures. That is one point.
Your second question about why Japan and China are not growing, it's a very difficult question. In case of China, one clear issue is their demographics. In these five years, there's a reduction of population of a range of millions. That is one major factor. Secondly, those may be detailed issues, but real estate and construction industry are under adjustment, which influenced our elevator business last year. The adjustment of the real estate business is influencing. Number three, China is facing the very difficult trade tension with the United States. They were manufacturing a lot and selling a lot to the U.S., which is difficult now. These are macroeconomic issues, demographic issues, adjustment of the real estate market and relationship with the United States leading to a decline in growth. In case of Japan...
There may be many views, but one is that the income in Japan, not only of the workers, but income of corporations as a whole is not growing. That may be one factor. Another factor, just like China, is demographics. Growth is stagnant. Overall GDP growth is stagnant. Number three, there has been excessive capacity, so BOJ has lowered interest rate to such a low level, but CapEx is not reacting to that. There is a lot of excess, and adjustment is not over yet. Japan is not growing demographics, and also because of adjustment issues, Japan is not growing. Both China and Japan. There are limitations from a macro environment. For individual companies on a micro basis, there are companies overcoming through technologies and innovation, but there are a lot of limitations in terms of a macro perspective. That is all. Thank you very much.
Thank you for the questions. There are many hands raised, but because the time constraint, we would like to move on to taking questions from institutional investors and analysts. If there's time left, toward the end, we would like to come back to the Japanese channel. Those institutional investors and financial analysts on the Japanese channel, if you have questions, please raise your hand. Please use the raise hand button. I see a hand. Please unmute and start your questions. Thank you. Can you hear me? Yes. Thank you.
Question number one: Hitachi Construction Machinery. In the first quarter, but then into the second quarter, there seems to be some delay. Deconsolidation development, if you can share something. Hitachi Metals, Astemo, Hitachi Transport System, inclusive of these, so what's the status? The second question about the status of orders. Orders are very robust, it appears, especially for Hitachi Energy and building the business. Chinese economy is stalled, but orders remain robust. What's the background? The water and environment business, perhaps orders are not up as much, and that's because of the size of the business, but what are the factors that you see continuously? If you could provide a summary comment with respect to orders as well.
Thank you for the questions. About divestiture of listed subsidiaries, I will answer, and the second half of your question will be responded to by Kato-san. Hitachi Construction Machinery, Metals, and Astemo, what's the status of these three entities? HCM and Hitachi Metals, as I said up front, by the end of this fiscal year, we're going to divest the shares, we're on plan. HCM in April, we said that we will do that in the first quarter. There has been some delay since, and that is because of the reviews that carried out overseas. In terms of the procedure, there has been some delay, but according to the information that we have received, it will be okayed as soon.
There's slippage, it's going to be into the second quarter, but ultimately, we will complete divestiture. Hitachi Metals, there's been delay as well. That's because of the review process and so forth, but it's a matter of time. By the end of this fiscal year, at some point in time, we will be able to complete the divestiture. Astemo, well, I talked about the status. We're taking recovery measures, but in parallel, we're trying to figure out how to handle this. As to the capital structure, we are running a number of simulations on that, but we're still having internal discussions which we are not yet prepared to share at this moment.
We would like to optimize our capital structure in the future. What should we do, and of course, IPO may be one of the options. We're having a comprehensive review and discussions as to what to do. That's all for me, and I would like to turn to Kato-san. Kato speaking. Hitachi Energy, 202%, very large share growth. As is on page seven of the slide, there have been large share orders. Hornsea 3, offshore wind farm, this is DC, HVDC, in North Sea, and Mumbai, India's HVDC project. Major projects have been received, and that's why the growth. With respect to order backlog, $16 billion of order backlog on page three, we mentioned.
Compared to March, there's an increase of $2 billion, so there's been steady increase. Buildings. Certainly, the China market itself, this year, unfortunately, is expected to decline according to our forecast, but orders for Hitachi are continuing to remain firm. But that's mainly because of the positive impact from Forex. Compared to the local currency, in Japanese yen, there's been an increase, and that's one of the factors. Water and environment business. 187% as a ratio, it's up, but as is on page seven, so domestically, public sector, water service, sewage business and so forth, there's been a major project that was commissioned and that pushed up the number. That would be all. Yoshikawa speaking.
I would like to add comments about the elevator business in China. Our competitors, for example, Company K from Europe, has 40% exposure in China, and their revenue is down substantially. Even amidst the such circumstances, we have been able to be resilient. The location of our plant for Hitachi, it's close to Guangzhou and our rivals. Because they have their plants close to Shanghai, they were affected negatively by lockdown. In the first quarter, there was no supply chain disruption. Orders in China, compared to our rivals, Hitachi's orders have been quite robust. Company K of Europe, their orders in China, according to their results, was 108%. For us, orders in China are 120% in value. In volume, 110%. Our position continues to be number one in China, and we have been able to leverage our advantage in that regard in China. Thank you. Thank you.
Thank you very much. Next. I'd like to ask the next question to unmute yourself. Thank you very much. I have three questions. Maybe I missed it, but in the first quarter, adjusted EBITDA, how do you evaluate compared to your assumption? You made an upward revision, and I think in total there was a rise in the corporate elimination, corporate items eliminations. So am I understanding that you implemented this at an early stage? Maybe there was impact of a delay in the timing, but in terms of operation, how should we interpret the upward and downward revision? And also, I think there was impact of the revision of a foreign exchange assumption. So, how do you evaluate that, and what is the impact of a full-year forecast? Number two, about the orders.
Digital Systems orders growth of 12%. GlobalLogic is consolidated, which may be another influence. If this is excluded, what was the situation? Could you explain how it would be the situation for IT? Lastly, my third question, centered on Europe and North America, there may be concerns of slowdown. How do you evaluate the risk of slowdown? In particular, your business, you have been shifting your portfolio aiming at being resilient. If there's a slowdown, what are the businesses from your position as CFO that you believe there might be risks? There may be exposure in Europe, and I think a large portion is rail and power grid, so that would not be influenced that much. Could I have your comments on that? Thank you very much for your question.
The impact of foreign exchange, how is that evaluated in making this evaluation? Mr. Kato will talk about it. The second question, Yoshikawa-san will talk. Lastly, I will answer the final question. Now first, Mr. Kato. About Q1 evaluation. In terms of revenue, in general, it was upward by JPY 100 billion compared to the plan. Out of that, JPY 110 billion is foreign exchange. In organic terms, there was a reduction of JPY 10 billion. In terms of profits, compared to our internal plan, the Q1 adjusted EBITDA was almost close to the plan. The foreign exchange helped an addition of JPY 9 billion. In terms of organic growth, there is a reduction. Mainly Astemo and GLS, these are the items that mainly declined.
For the fiscal year's upward revision in terms of revenue, JPY 350 billion upward revision was made. The major factor is foreign exchange. Out of that, JPY 415 billion and organic, we expect a decline of JPY 65 billion. For profit, JPY 25 billion upward revision was made. JPY 65 billion is impact of foreign exchange, organic decline of JPY 9 billion. Astemo and GLS are the major items that we expect decline. As for the corporate items and eliminations, in the beginning of the year, in terms of GlobalLogic, that investment was not clear. Operating JPY 35 billion and non-operating JPY 35 billion, in total JPY 70 billion was expected.
The business risk in Q1, in particular for GLS and Astemo, this surpassed, and which was JPY 25 billion, and remaining JPY 10 billion is included in the forecast. Now how about the orders? DSS orders. GlobalLogic deals are included. To be more specific, at GlobalLogic on standalone basis in Q1, from 25 global top brand customers, there were new orders placed. The total is $120 million. I cannot disclose the names, but this includes major sports manufacturers in the United States and car provisioning service and online stores. In a variety of areas, there were orders received. In addition to that, GlobalLogic business is time and material, so revenue and orders taken are recognized at the same time, so they don't have a concept of backlog, as this is additional information. Thank you very much.
Let me add. I'd like to add one more point. In DSS segment, in total, 112% in total. Excluding GlobalLogic is 101%. So GlobalLogic growth was a major factor. That is all. Thank you. Thank you very much. Your last question about our views about Europe and North America. Yes, this is a very difficult question. Starting from Europe, the problem of Ukraine is a major factor. Now, winter is coming and gas supply from Russia, if this supply declines, there are many materials about Germany. If supply reduced to half, GDP has a sensitivity of more than half. If gas from Russia is 10%, there could be a negative growth of GDP. In Europe as a whole, in the continent as a whole, we expect a strong impact.
How about our business under such a situation? As was mentioned, our European major businesses is rail and power grid. It's not cyclical as a consumer business. From the long term, the long-term business, we secure funding in three or five years based on long-term contracts with our customers. We make investments and provide products and technology. Unless something extremely bad happens, like a collapse of the market in Germany or France, we have commitment and a firm funding. So far we don't think there'll be a big downward impact. In terms of orders, as Mr. Kato said, in Europe, power grid is increasing greatly, and for rail as well. Though the situation is so unstable, orders are increasing. There's infrastructure and funding is also available.
The situation may be very tough, but in our case, that is the type of business that we are doing. I think we can control the impact, relatively speaking. In the case of the United States, the situation is more complex. A few weeks ago, there was an increase in rate of 0.75%. In the past, the increase was by 0.25%, but now there was a sudden increase by 0.75%. This will greatly impact the revenue. In the emerging countries, funds are mainly denominated in dollars. International organizations and banks provide loans in dollars. If the dollar rate goes up, that money will come from the emerging countries, so there may be a deflationary pressure on the emerging countries. 20% of our business is with the emerging countries.
If there's a strong deflationary pressure, there could be problems like default, as we experienced in the past. Rate hike in the U.S. and impact on emerging countries is something that we must keep watching. About the United States, for two consecutive times, there was a negative growth of GDP, which is defined as recession. Housing investment, I understand, is minus 10%. Under such a situation, they're entering a recession, and the stock market is also stagnant. All Americans are investing on equities, so if stock market declines, that will impact the personal consumption. This may greatly impact the consumption market. In Central and North America, we are centering our business on industrial machinery and also IT in California and automobiles with Astemo.
Of course, there will be influence, but as I have said before, we are committing on infrastructure business, so we will try to control the downward impact in collateral business. North America is a very important growth market. Population is increasing. In this economic cycle, we are not thinking of reducing our resources allocation. We will continue to invest in North America. That is all. Thank you. Thank you very much. Hi.
Thank you. Well then, to continue, Borodo-san, please unmute and state your questions. Can you hear me? Yes. Question, only one question. Hitachi Energy's orders are very robust. Year-on-year, it's doubled. Very good. Congratulations. In the first quarter with reduced profitability, order revenue is up, but EBITDA did not grow. On a full-year basis, EBITDA was revised upward. Second quarter to the second half, profitability is expected to grow. What kind of steps are being taken for that? Are you going to take such steps? Answer. Well, thank you very much for the question. Good morning. I would like to turn to Kato-san for the answer.
Kato speaking. In the first quarter, profit and loss, in terms of revenue and profit, revenue is up substantially, page six. But profit is flat, and that's because of being negatively affected by parts and component price increase. We are talking with our customers with respect to the cost. In principle, cost increases are basically going to be passed on to the customer price, and that's the kind of agreements and contracts we're having with our customers. We're taking steps to reduce the cost and so forth. In the second half, we are planning to recover profitability.
I'll just add to that, Kawamura speaking. Orders are very robust. The production structure in Europe, actually plants in Europe, are running at 100%. Under the pandemic, utilization was down, but it's now at full capacity. We need to ramp up production, increase the production. We're going to invest in technology as well as products. We're going to strengthen production, and so into the second half, that will have a positive impact. That would be all. Thank you very much. Well understood.
Thank you very much. Next, Okawa-san, please unmute yourself. Thank you. Okawa from Daiwa Securities. I have two questions. One is about Lumada business. In Q1 sales results, how is it compared to the plan? Is it progressing ahead of the plan? In addition to that, system integration and managed services sales are increasing. This is a growth because of topics, or is there any other background for this increase in sales and revenue? Thank you for your question. Mr. Kato will answer the details. Thank you for your question. For Lumada, Q1 results, we have been splitting using four quadrants, and there has been increase in revenue. Compared to the previous situation, there were some downward factors like shortage of procurement. In general, because of impact of foreign exchange, the result is higher.
The system integration and managed services in your question, as written in the topics on page 8, this shows the outline. In terms of actual features, first for system integration, 134%, a large growth was seen. DSS doing IT trended firmly. In Connective Industries, there is a team doing industrial digital. Centered on this, SI business grew. In green energy as well, centered on Hitachi Energy, there was an increase in revenue, including influence of foreign exchange. Those are major factors for increase in revenue for system integration. Managed services, 124% growth was seen. In Connective Industries, the building, remote monitoring industrial products, maintenance of large equipment increased. In digital DSS, Hitachi Vantara, because a shift in the cloud environment, there was increase in sales, mainly in foreign countries.
Hitachi Solutions, Hitachi Systems in Japan, security monitoring services increased. This grew both overseas and Japan. Green energy, rail and energy, Hitachi Energy, maintenance service increased, leading to the increase in revenue. Let me make some additional comments. Actually, with GlobalLogic, we are seeing synergy with existing business. On page eight, connected products
This transmission line and conversion station we're seeing, and that is a result of Hitachi Energy and power grid synergy. Real control as well, we are seeing synergy. We didn't write this down in the material, but Nomura is contributing in terms of synergy as well. This was an additional comment. Thank you very much. Thank you very much. As my second question, about eliminations. In Q1, -JPY 5.7 billion. Compared to the plan, the plan is quite large, - JPY 82 billion. Besides buffer, is there any upside factor? I missed the first part of your question. Could you repeat that? Was that about elimination? Yes, corporate items and eliminations. Are you asking about Q1, or are you asking about the forecast for the full year? Compared to the Q1 figures, it's not that large.
Is it as large as -JPY 82 billion? On page 14 in Q1, there's a brief explanation. This is a management basis for the whole company. To be more specific, we are making an IT infrastructure for a company-wide management. We plan to have the service of the second half. The plan itself has not changed, but Q1 looks as if the amount is smaller. Thank you very much.
Let's continue to another person to ask questions. Please unmute and start your questions. Question. Thank you. I have just one single question. With respect to energy orders are very firm, doing very well. I think much of it is in overseas.
On the other hand, here in Japan domestically, clean energy strategy by the Japanese government, that's there, and strengthening infrastructure resilience, which is announced by the government. In the Japanese market, strengthening of infrastructure, digitization of infrastructure, I think Hitachi can play a major role in those areas. At this moment, what is the outlook here in Japan? Is it robust? Well, thank you for the question. Here's the answer. As you rightly pointed out, we are very much interested in the themes that you mentioned, and we are studying them. Power grid business, we took over from the European business. What to do with the Japan business, that's next. The Japanese market is difficult, and that's because there are 10 power utilities, inclusive of Okinawa.
Well, part of the utilities have separated generation and transmission. Power grid business, you need to have HVDC 1,000 km or 1,500 km without any attenuation. Just like Germany in North Sea, power generated, can it be supplied to Munich in Germany? Well, that does work in Europe, but here in Japan, would it work? The power utilities, there are 10 of them in Japan, and they both perform generation and transmission. There are local characteristics when it come to power generation, so they can do this business separately. Power transmission is also done separately by these utilities.
Power generated in Hokkaido, based on supply and demand, you may want to send power to Kyushu, but there are so many grids in between, so you have to change frequency in the process, charge up electricity. There's a lot of energy loss in between. We need to have discussions with the authorities. Well, power generation can remain the same, but power transmission, for example, at the national level, why not create one single transmission company so that power grid can handle 1,000 km of transmission? Itoigawa problem can be overcome. I think we need to have that kind of transmission structure in Japan. Otherwise, we will not be able to efficiently send DC power.
Inclusive of such discussions, we need to think about how to structure our power business in Japan. Unofficially, we are starting discussions with the relevant parties. That should be the overall direction. Beyond business, we have to respond to power shortage in Japan, and that is something very much, we are looking forward to engage in. That would be all. Kawamura-san, thank you very much. That is understood well. Certainly, as you said, transmission and distribution, it's segregated utility by utility, locality by locality. That is true. If you can make proposals as such, I think we can make the grids more efficient. Thank you.
The next question, please. Thank you. Can you hear me? I have two questions. For Astemo, the full year adjusted EBITDA JPY 17 billion, down. So what is included in this JPY 17 billion? In the first quarter, in your own year, I believe you assumed a certain difficulties. The first quarter assumption, downward revision, how much did you assume in your second quarter? What's the visibility? Is there a trend of bottoming out since? That is my first question. Number two, for DSS orders, you said that there's 101% exclusive effect of a GlobalLogic acquisition. Is that 101%, how do you evaluate in terms of IT service in Japan compared to the industry statistics? I have impression that there might be some weaknesses, but as a momentum, is that what you have assumed? How do you evaluate that?
That is my second question. Thank you. Thank you for your question about Astemo. Mr. Kato will answer, and then I will make additional comments. For Astemo, in Q1, compared to our internal plan in terms of profit, about, there was a drop of about JPY 10 billion. Out of that, foreign exchange was positive, about JPY 3 billion, so the remaining JPY 13 billion is the actual worsening. There are nine months remaining. In nine months, compared to the initial plan, JPY 17 billion is for the full year, and JPY 10 billion in Q1, and remaining JPY 9 billion we assume for remaining of the year. As you can see on the slide, lockdown in China was for the first quarter, but shortage of semiconductors we expect not to end soon.
Those are our two major factors, and also some impact of foreign exchange leading to this reduction. That is a breakdown of our forecast. Thank you very much. This is the situation for this fiscal year, but next fiscal year, FY 2023, whether we build recovery of automotive sector is a major issue that we are discussing. We had pandemic, and in two or three years the market has changed greatly, like, ride share and EVs included in the U.S. People, maybe, it's not possible to leave and even these out automobiles.
Demand for automobiles will that recover [frustrations] that we experienced a few years ago. That's the major problem. If there is no recovery, what will happen? The structure of overall operation, business model must be changed. We discussed that. We will continue what we are doing this year. But from next fiscal year, we will think of ways to recover the profit. For DSS IT service, Mr. Yoshikawa will talk about it. About [audio distortion] the market, in July, IT investment market size forecast was 2.4%, has the growth of 2.4% is the data that we have in ITC. Among ourselves, how to grow offshore businesses except GlobalLogic or except Lumada?
To make a side business cash flow to increase portability and accelerate course nation of global in Japan, and also the legacy business, business opportunities. In particular, our mission critical areas, like cloud, migration modernization, we are confident that we can provide the support. We will not go to unprofitable businesses, but in the market, we will try to catch the business opportunities in the market. Other than Lumada, other business opportunities, we're discussing in focusing in such opportunities. In addition to that, for IT business, large financial institution systems and pension system of the government, My Number Card system. Yes, there are steady businesses coming this year, next year. These businesses are also related to Lumada and related to digital transformation. We will maintain relationship to existing customers are continue to secure IT service to businesses. That is all. Thank you very much.
Thank you. Thank you very much for so many questions. It's also the schedule time to end. The are several hands being raised. We have to bring the meeting to a close. We will be responding to your questions individually later. With that, we would like to end the web conference for Q1 2022 earnings. Thank you very much for your participation.