Ntt Inc · TSE:9432
Ntt — Q3 FY2018/03 Earnings Presentation
57 slides from Ntt's earnings presentation, February 2018
Slide 1: Slide 1
Slide 2: Forward-looking statements
The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information curre
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Slide 4: Basic Concept of "2.0"
Basic Concept of “2.0” Accelerate Self-Transformation towards a “Value Partner” and Embark on a Profit Growth Track Accelerate Profit Generation of “Global Cloud Services” Enhance Profitability of “Network Services” Develop new markets by further promoting B2B2X model Re-establish EPS Growth Goal (a
Slide 5: Progress toward Financial Targets (FY2018/03)
Progress toward Financial Targets (FY2018/03) FY2018/03 3Q FY2018/03 Medium Financial Results Term Targets Streamlining Capital Investment ¥141.4 billion At least ¥200 billion (Domestic Network Business ) *1 [compared to FY2015/03] Cost Reductions*2 ¥766.0 billion At least ¥800 billion (in fixed-lin
Slide 6: EPS Growth
EPS Growth 440yen At least 416* 400 yen yen Revised Original target at the 391 announcement of “2.0”(May 2015) yen At least 237 350 183 yen Profit Growth Yen yen Share Buybacks FY 2012/03 FY 2015/03 FY 2017/03 FY 2018/03 FY 2018/03 * Exclude the effects of the arbitration award received from Tata So
Slide 7: Overseas Sales/Operating Income
Overseas Sales/Operating Income Sales $22.0B Sales Sales $19.6B Sales Sales $16.9B $15.0B $15.6B Operating Operating Operating Income* Operating Operating Income* Income* $1.5B Income* Income* $1.2B $0.8B $0.67B $0.69B FY2015/03 FY2016/03 FY2017/03 FY 2018/03 FY 2018/03 (Forecast) (Target) * Operati
Slide 8: Strengthen NTT's Global Business
Strengthen NTT’s Global Business (Bringing together cloud IaaS capabilities) n Strengthen competitiveness by bringing together cloud IaaS capabilities and development capabilities of NTT Communications and Dimension Data. n Establish a wholesale company of cloud IaaS under Dimension Data to prepare
Slide 9: Optimize Domestic Network Businesses
Optimize Domestic Network Businesses Streamlining Capital Investment At least 200 billion yen (Domestic network business, compared to FY 2015/03) Reduction of at least 1,400 200 billion yen Improve efficiency of facility use billion yen 1,300 billion yen 1,260 billion yen 1,193 1,200 Reduce procurem
Slide 10: Direction of Initiatives for the B2B2X Model
Direction of Initiatives for the B2B2X Model Support business model transformation for service providers to create new value, which leads to lifestyle transformations of service users Enrich User Experiences Individual NTT Provide Service consumers Resolve New Tools Group with Providers Social Issue
Slide 11: Major B2B2X Initiatives in FY2018/03 1H
(Reference) Major B2B2X Initiatives in FY2018/03 1H Enter- tainment Produced a new Kabuki experience by utilizing NTT’s Immersive Telepresence Apr. Technology called “Kirari!®” Sports Enhanced racing drivers’ performance by measuring their biological information Apr. during races Sports Demonstrated
Slide 12: Major B2B2X Initiatives in FY2018/03 3Q
(Reference) Major B2B2X Initiatives in FY2018/03 3Q Demonstrated a pleasant flight experience by monitoring babies' Aviation Oct. conditions through the utilization of hitoe® (Established “Airplane without crying babies!?” project) Manu- Began the commercial provision of the FIELD system facturing O
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Slide 14: FY2018/03 3Q Highlights
FY2018/03 3Q Highlights n Both Operating Revenues and Operating Income increased. n Financial results are steadily progressing in line with the annual plan. Status of Consolidated Financial Results ØOperating Revenues ¥8,722.0 billion (increase of ¥361.5 billion [4.3%] year-on-year) ØOperating Incom
Slide 15: FY2018/03 3Q Topics
FY2018/03 3Q Topics Increased Profitability of Network Services ØExpansion of NTT’s User Base • Mobile Subscriptions: 75.68 million mobile subscriptions (net increase of 0.80 million) (Included in the above) Kake-hodai & Pake-aeru: 40.60 million subscriptions (net increase of 3.53 million) • FTTH Su
Slide 16: FY2018/03 3Q Topics
FY2018/03 3Q Topics Promotion of the B2B2X Model ØContinued to expand collaboration efforts with corporations and local governments by supporting their digital transformation in various fields, such as sports, transportation and manufacturing in an effort towards creating new value and solving socia
Slide 17: FY2018/03 3Q Contributing Factors by Segment
FY2018/03 3Q Contributing Factors by Segment n Increase in Operating Revenues and Operating Income in the Long Distance and International Communications business and the Data Communications business segment. Operating Revenues (Year-on-year: +361.5) (Billions of yen) Long distance and Mobile 66.8 Re
Slide 18: FY2018/03 Financial Results Forecast
FY2018/03 Financial Results Forecast n Operating Revenues and Operating Income remain unchanged from the Initial Forecast. Plan for Consolidated Revenues and Income Financial Results Initial Forecast (announced on May 15, 2017 Forecast (announced on November 10, 2017) Operating Revenues ¥11,750.0 bi
Slide 19: FY2018/03 Forecast Summary by Segment
FY2018/03 Forecast Summary by Segment Operating Revenues (Year-on-year: +359.0) (Billions of yen) Data communications Other business business* Mobile Long distance and communications 80.3 Regional international business 251.3 communications communications business business 165.4 11,750.0 78.2 100.7
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Slide 22: Gov’t Gov’t Gov’t
Gov’t Gov’t Gov’t Gov’t Gov’t Market / Gov’t Gov’t billion yen, Gov’t billion yen, Gov’t 250.0 billion yen, Gov’t 156.5 billion yen 4:Market 101.2 billion yen, Gov’t 236.9 billion yen, Gov’t 267.4 21 ©
Slide 23: NTT East and West's business operation plans
NTT East and West’s business operation plans for Net Increase of FLET’S 22 ©
Slide 24: Corporate Customers
Provides full stack, full life-cycle service (Covers Infrastructure to Applications, Advisory to Management) Cloud Services Advisory Migration Operation Management Services Services Services Services Corporate Customers Application Service Layers Managed Services IT Infrastructure Data Centers Netwo
Slide 25: Enhanced IT capabilities for clients' digital transformation
n NTT Group to deliver enhanced IT capabilities and contribute to the success of clients’ digital transformation Advisory Advisory Business Applications Application Business Process Data Defined Business Model Managed Managed Service Security Services NTT’s Cloud Cloud Cloud 3rd party DC clouds IT D
Slide 26: NTT's Capability in Global Business
NTT’s Capability in Global Business Telecom Cloud IT Vendor SIer NTT (A) (A) (A) (I) Data Center (incl. colocation) - - Leader Network Integration - Network - - - Imple- mentation - - Apps (ERP) AMO - - Attacker Public - Cloud Hosted Private - - Security - - Legend Global capability Top Tier 2 nd Ti
Slide 27: Our Strengths in Global Cloud Services
Our Strengths in Global Cloud Services Network Scale Provides service in 190 countries/areas World-class in Global IP backbone traffic (Source: Dyn Research) Quality Lowest network latency between Japan / US / major countries in Asia Data Center Scale World-class (total floor space: approx. 1.35 mil
Slide 28: Expansion of Cross-Selling (Aggregate Contract Value)
Expansion of Cross-Selling (Aggregate Contract Value) Aggregate contract value of Cross-Selling reached Expansion of approx. 3.2 billion USD Global Account Management 3,223 million Total IT solution Manufacturing USD Public (Motor vehicle) triggered by Cloud Service Insurance Finance Healthcare Nort
Slide 29: Cross Selling Track Record
Cross Selling Track Record Improved brand awareness leads to more deals with global enterprises EMEA Japan AMERICAS 2014/3.3Q 2014/3.1Q 2015/3.1Q ANA Texas Department of Transportation HM Treasury Ø Implementation and operation of Ø Cloud, Business platform construction Ø Cloud solution, Application
Slide 30: Revenue by Region
Revenue by Region USD (FY2017/3) Application IT Infrastructure Not-including the number of Japan Total AMERICAS EMEA APAC 35% 40% 10% 45% 65% 60% 90% 55% ICT Market USD (FY2016) 1,650B 810B (50%) 480B (30%) 360B (20%) 52% 55% 48% 34% 48% 45% 52% 66% *Source: Created by NTT based on McKinsey’s data (
Slide 31: Sports & ICT: Smart Stadium powered by Digital Marketing
Sports & ICT Smart Stadium powered by Digital Marketing Game Day/Outside of the Game Fan/ (Children’s Lessons, Local Events, etc.) Supporter Fan Virtual Reality VR Children’s Lessons, Sponsors Services Mileage Points, etc. Information Services Spectators 3D Event Video 3D, multi-angle, player- Local
Slide 32: Sports & ICT B2B2X Model Collaboration with a Sports League
Sports & ICT B2B2X Model Collaboration with a Sports League Contribution to the Development of the Sports Field into a Growth Industry with J.League Club Teams Diagram of Collaboration Initiatives Expansion of Customer Base through Digital Marketing • Fully leverage NTT Group’s assets to support the
Slide 33: Sports & ICT: The Smartification of World Sports
Sports & ICT The Smartification of World Sports The Open Tour de France Indy 500 (U.K.) (France) (U.S.) Ball flight distance and trajectory; Tweet map Racer position, speed, and time behind; Driving status and racers’ vital signs Overseas (worldwide) combination of data and video Position #1 At Six
Slide 34: Tourism Trade & ICT
Tourism Trade & ICT B2B2X Model Collaboration with Local Governments and Companies Contribution to ICT Community Development Utilized Publicly Available Data and Real-World Data through Collaboration with Sapporo City and Local Distribution Companies We have collected and analyzed real-world data re
Slide 35: For Resolution of Social and Economic Issues
For Resolution of Social and Economic Issues Promote coordination of administrative services and social infrastructure with local governments as the hubs, and contribute to the resolution of social and economic issues of local regions (including local economic regions) Businesses Citizens Organizati
Slide 36: Major R&D Initiatives in FY2017/03
Major R&D Initiatives in FY2017/03 Dialogue Technology The World’s Best World-Leading Security Technology Catching the World’s Attention Sound-Processing Technology • Showcased “Natural Conversation among Multiple • Provided Hitachi Zosen with “Anomaly Noise Detection • Developed “Secure Computation
Slide 37: NTT DOCOMO: Further enriched offerings responding to customer requests
NTT DOCOMO: Increased Customer Returns (FY2018/03 3Q) Further enriched offerings responding to customer requests 36 ©
Slide 38: Hikari Collaboration Model
Hikari Collaboration Model Supporting a variety of market players to create new value Service Provider* Customers EAST Mobile, MVNO, ISP, WEST Players in other industries etc. Providing service by single package Partner’s Wholesale own service Flet’s Hikari Improve (FTTH) of FTTH Creation customer’s
Slide 39: Subscriptions and Billing Table of "docomo Hikari"
Subscriptions and Billing Table of “docomo Hikari” Monthly Plan docomo Hikari Fee*1 *2 (Million Subs) Kake-hodai Plan (Smartphone/Tablet) ¥2,700 Subscriptions 4.48 Kake- Kake-hodai Plan (Feature Phone) ¥2,200 2.97 Topped Basic Monthly Charges hodai /Simple Plan Kake-hodai Light Plan (Smartphone/Tabl
Slide 40: The World Envisaged by 5G
The World Envisaged by 5G High speed/ _ - Peak rate: Over 10Gbps large capacity + System capacity: 1,000 times” \ ( ez 4K/8K video streaming Stadium solution Autonomous driving Smart city, smart home Connéction with numerous devices = Low latency - Ee. - “ Transmission latency in . Radio Access Netw
Slide 41: Operating Income of Docomo's Smart Life Business & Other Businesses
Operating Income of Docomo’s Smart Life Business & Other Businesses Principal services Smart life business Content/Commerce Finance/Payment Lifestyle Other businesses Enterprise solutions Support services for customers’ peace of mind FY2017/03 FY2018/03 FY2018/03 3Q 3Q Full year (Planned) 40 ©
Slide 42: Migration to IP Networks
The Current and Future State of Fixed-Line Telephone Services Migration to IP Networks Schedule for service changeovers and migration to IP networks Aim to complete migration to IP networks before tandem/signal transfer switches in the PSTN networks approach their limits of useful life *PSTN (Public
Slide 43: Image of Migration to IP Networks
The Current and Future State of Fixed-Line Telephone Services Image of Migration to IP Networks Current system Post-migration Other carriers Other carriers Migrate tandem/signal PSTN interconnection transfer switches to IP IP interconnection Continue use of copper lines PSTN IP network Use local swi
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Slide 46: Aggregate ARPU
2016/3 Full-year Aggregate ARPU 4,170 Yen Voice ARPU 1,950 Yen, Packet ARPU 3,250 Yen, docomo Hikari ARPU 60 Yen, Impact of discount programs 1,090 Yen 2017/3 Full-year Aggregate ARPU 4,430 Yen Voice ARPU 2,010 Yen, Packet ARPU 3,340 Yen, docomo Hikari ARPU 210 Yen, Impact of discount programs 1,130
Slide 47: FLET'S
FLET’S FLET’S 46 ©
Slide 48: NTT Data
| | NTT Data
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Slide 53: Interest-bearing debt / Shareholders' equity
bearing debt / Shareholders’ equity x 100 52 ©
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Slide 55: 4,000 2,000
4,000 2,000
Slide 56: Gov’t and Market Gov’t and Market Gov’t
Gov’t and Market Gov’t and Market Gov’t Gov’t Gov’t Gov’t Gov’t Gov’t 55 ©
Slide 57: Trusted Solutions for Transformation
Next Value Partner for Transformation of Business models and Lifestyle by Trusted Solutions of Global, Secure, End-to-end, and Full-line ICT services