Ntt Inc · TSE:9432
Ntt — FY2019 3Q Earnings Presentation
64 slides from Ntt's earnings presentation, February 2020
Slide 1: IR Presentation
IR Presentation Ver. 20022 Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Slide 2: Translation notice and forward-looking statements
This document is a translation of the Japanese original. The Japanese original is authoritative. 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, pro
Slide 3: Contents
Contents Overview of Consolidated Results for FY2019.3Q Other Businesses Status of Consolidated Results for FY2019.3Q 4 Promote B2B2X Model 33-35 Contributing Factors by Segment for FY2019.3Q 5 Sustainable Cities partnership Program 36 Create New Lines of Business 37-41 FY2019 Forecast Summary 6 Sha
Slide 4: Overview of Consolidated Results for FY2019.3Q and FY2019 Forecast
Overview of Consolidated Results for FY2019.3Q and FY2019 Forecast Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: Status of Consolidated Results for FY2019.3Q
Status of Consolidated Results for FY2019.3Q Operating Revenues increased and Operating Income decreased Operating Revenues reached record third-quarter levels Status of Consolidated Results Operating Revenues: ¥8,862.7B < +¥67.5B [ +0.8%] year-on-year > Operating Income: ¥1,450.4B < (¥76.7B
Slide 6: Contributing Factors by Segment for FY2019.3Q
Contributing Factors by Segment for FY2019.3Q Operating Revenues <Year-on-year: +67.5> (Billions of yen) Mobile Regional Long distance and Data Other elimination of communications communications international communications business inter-segment business business communications business transaction
Slide 7: Financial Results Forecast for FY2019
Financial Results Forecast for FY2019 Operating Revenues will increase, Operating income will decrease Profit will increase over the previous year Plan for Consolidated Revenues and Income FY2018 Result FY2019 Forecast Year-on-Year (announced on November 5, 2019) Operating ¥11,879.8B ¥11,890.0B
Slide 8: NTT Group Medium-Term Management Strategy
NTT Group Medium-Term Management Strategy Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 7
Slide 9: Our Vision
Our Vision Towards a sustainable society/SDGs To resolve social issues through our business operation, NTT Group works together with our partners, as “Your Value Partner.” Partners Social Issue Resolution through business operation Digital Transformation × CSR NTT Group As a Public Utility and a Pri
Slide 10: Medium-Term Targets
Medium-Term Targets Financial Targets EPS Growth EPS Growth ＋50％ ※2 Target FY2023 （vs. FY2017） ＋50％ Overseas Sales / $25B/ FY2023 Overseas Operating 7％ Income Margin ※3 Approx. ※1 Cost Reductions At least ¥800B FY2023 ※1 320 yen (in fixed-line/mobile access networks) （vs. FY2017） 212 ※2 yen ROIC 8％
Slide 11: Transition of Medium-Term Targets
Transition of Medium-Term Targets EPS Growth Cost Reductions *1 （in fixed-line/mobile access networks） Approx. Profit expansion 320yen /share buybacks FY 2017 FY 2018 FY 2019 (E) FY 2023 Target 220yen 231yen *3 ▲220 212yen *2 billion yen ▲470 billion yen FY 2017 FY 2018 FY 2019 (E) FY 2023 Target Es
Slide 12: Global Business
Global Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 11
Slide 13: Global Business Overview
Global Business Overview Overseas Sales/Overseas Operating Income Margin* Revenue $25B Operating profit Margin $20B 7.0％ $18.4B $18.9B 3.5％ Operating Profit 3.2％ 3.1％ $1.75B** $0.56B $0.60B $0.70B FY 2017 FY 2018 FY 2019 (E) FY 2023 Target * Including results from the global holding company, its sub
Slide 14: Enhance Competitiveness in Global Business ①
Enhance Competitiveness in Global Business ① Aug. 2018 Nov. 2018 July. 2019 NTT NTT NTT Global Holding Company （New） Global Holding Company (Company name：NTT, Inc.) (Company name：NTT, Inc.) NTT Communications NTT Communications Global OpCo (NTT Ltd.) （New） Dimension Data Dimension Data ※1 Data Cente
Slide 15: Enhance Competitiveness in Global Business ②
Enhance Competitiveness in Global Business② ”One NTT” Global Growth Strategy Deliver High Value Solutions Create New Innovative Solutions Business Modernization Disruptive Innovation Industry Advisory Expertise Drives Global Innovation Fund Outcome-Based Solutions Invest in the Next Innovative （ Fin
Slide 16: Enhance Competitiveness in Global Business ③
Enhance Competitiveness in Global Business③ Enhance Competitiveness in Global Business Expands Smart City solutions implemented for the City of Las Vegas • Vehicle monitoring in Cyberjaya, Malaysia* (NTT Ltd. and others, from February 2020) Vehicle counting and specific vehicle monitoring at int
Slide 17: Smart City Project (Las Vegas City)
Smart City Project (Las Vegas City) Pain Point of the City: To reduce “Response Time” Requirements: ① Reactive actions: Notify “What is going on？” ② Proactive actions: Notify “What is going to happen next？” ③ Flexible ICT : Deploy ICT resources ASAP NW bandwidth Judgement by Authorities Actions by O
Slide 18: Smart City Project (Malaysia)
Smart City Project (Malaysia) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 17
Slide 19: Mobile Communication Business
Mobile Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 18
Slide 20: NTT DOCOMO FY2019 Key Actions
NTT DOCOMO FY2019 Key Actions Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 19
Slide 21: NTT DOCOMO New Rate Plans
NTT DOCOMO New Rate Plans Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 20
Slide 22: NTT DOCOMO Actions to Reinforce Customer Base
NTT DOCOMO Actions to Reinforce Customer Base Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 21
Slide 23: NTT DOCOMO Comparison with Existing Rates
NTT DOCOMO Comparison with Existing Rates Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 22
Slide 24: NTT DOCOMO New Rate Plans
NTT DOCOMO New Rate Plans Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 23
Slide 25: NTT DOCOMO 5G Pre-Commercial Service
NTT DOCOMO 5G Pre-Commercial Service Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24
Slide 26: NTT DOCOMO 5G Pre-Commercial Service - Co-Creation with Partners
NTT DOCOMO 5G Pre-Commercial Service - Co-Creation with Partners - Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25
Slide 27: NTT DOCOMO 5G Base Station Deployment Plan
NTT DOCOMO 5G Base Station Deployment Plan Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26
Slide 28: NTT DOCOMO Termination of FOMA (3G) Service
NTT DOCOMO Termination of FOMA (3G) Service Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27
Slide 29: NTT DOCOMO Cost Efficiency Improvement
NTT DOCOMO Cost Efficiency Improvement Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28
Slide 30: Fixed-line Communication Business
Fixed-line Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29
Slide 31: Contribute to Vitalization of Regional Societies and Economies
Contribute to Vitalization of Regional Societies and Economies Contribute to Vitalization of Regional Societies and Economies Established a New esports Company • Established “NTTe-Sports” with the aim of contributing to local communities through ICT×esports (NTT East and others, January 31, 2020)
Slide 32: Migrate PSTN to IP Networks
Migrate PSTN to IP Networks Simplify services and networks with IP networks Nation-wide call rates to fixed-line telephones will be 8.5 yen per every 3 minutes (from January 2024) Migrate tandem/signal transfer switches to IP, and connect to other carriers through IP (scheduled completion by Jan
Slide 33: Other Businesses
Other Businesses Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 32
Slide 34: Promote B2B2X Model
Promote B2B2X Model Number of B2B2X Projects: 61 (as of the end of Dec. 2019) Set B2B2X Sales Target: ¥600.0 billion (for FY2023) Sales / Number of Projects Target ¥ 600.0 billion Create new B2B2X project 440円 ¥ 60 billion FY 2018 FY 2021 FY 2023 target Number of Projects 39 100 Copyright 2020 N
Slide 35: Promote B2B2X Model
Promote B2B2X Model Promote B2B2X Model Business partnership with Mitsubishi Corporation to pursue industrial DX (December 20, 2019) • Aiming to establish an “Industrial DX Platform” that leverages the strengths of both companies, will promote DX across food and industrial materials fields and res
Slide 36: Business Partnership with Mitsubishi Corporation
Business Partnership to Pursue ”Industrial Digital Transformation(DX)”with Mitsubishi Corporation Objectives of business partnership: Pursuing DX through cross-industry collaboration • Collaborate Mitsubishi Corporation’s industry knowledge with technologies of NTT Group • Expand its expertise, deve
Slide 37: Sustainable Cities Partnership Program
Sustainable Cities Partnership Program -Future Urban Solutions initiative- Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 36
Slide 38: Create New Lines of Business: Asset Management
Create New Lines of Business Promotion of efficient asset management Promotion of efficient asset management • Collaboration with Tokyo Century Corporation (“TC”) on leasing and new fields (NTT Finance) Transfer leasing business (assets: ¥1.3 trillion; liabilities: ¥1.2 trillion) to a JV* with T
Slide 39: Create New Lines of Business: Smart Energy Business
Create New Lines of Business ~Smart Energy Business~ Promotion of Smart Energy Business FY2025 (Target) Acquisition of ENNET Corporation (May 10, 2019) Establishment of “NTT Anode Energy” (June 3, 2019) Reorganized ENNET and NTT Smile Energy as a member of the NTT Anode Energy Group (October 2
Slide 40: Create New Lines of Business: Medical Science Business
Create New Lines of Business Medical Science Business Healthcare Management Support through Big Data • Established “NTT Life Science” (February 3, 2020) Leverage NTT Group’s data analysis and security technology to establish a healthcare recommendation business that contributes to health promotio
Slide 41: Create New Lines of Business: Smart Infra Business
Create New Lines of Business ~Smart Infra Business~ Promotion of the Smart Infra Business Promoted the Smart Infra business, which leverages group technology, know-how and assets to solve social infrastructure issues such, as infrastructure equipment and facilities Will reorganize “NTT GEOSPACE
Slide 42: Create New Lines of Business: Enhance and Globalize R&D
Create New Lines of Business Enhance and Globalize R&D First Exhibit at CES2020 (January 7-10, 2020) • Exhibited basic technologies and use cases to realize the IOWN concept on the theme of ”Beyond The Internet” • Over 10,000 customers visited the NTT booth • NTT-related videos viewed over 25 mill
Slide 43: Shareholder Returns/ ESG
Shareholder Returns/ ESG Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 42
Slide 44: Shareholder Returns
Shareholder Returns Dividend Policy • Basic policy is steady dividend increases Share Buybacks • Carry out buybacks flexibly to improve capital efficiency Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 43
Slide 45: Changes in Dividend
Changes in Dividend 95 (Yen) 100 90 85% 75 65% Payout Ratio 50 45% 40.9% 41.1％ 38.2% 37.2% 38.0% 32.3% 33.4% 32.9% 12.5 25 31.4% 31.2% 30.7% 25% 27.5% 23.0% 19.5% 17.1% 12.3% 13.0% 0 5% • Dividend reflects the two-for-one stock split effective on July 1, 2015 , and January 1, 2020. • FY2003-FY2017,
Slide 46: Record of Share Buybacks
Record of Share Buybacks Approx. 4 Trillion Yen in Buybacks From From From From From From From From From From Market/ Market/Gov’t From Gov’t Market/ Market/ Gov’t Market Gov’t Market Market / Gov’t Market Gov’t Market Gov’t (Billions of yen) 600 539.4 *7 501.1 500 *4 406.5 381.7 *6 400 366.5 374.1
Slide 47: Changes of EPS and Outstanding Shares
Changes of EPS and Outstanding Shares （Yen） (mio shares) 6,000 EPS(right axis) 250 231 5,293 EPS Growth 5,000 200 (Average Annual Growth Rate +10%) Cumulative total of shares decrease by around ▲30% (▲4% Average Decrease Annually) 4,000 150 3,704 96 3,000 100 2,000 50 1,000 0 2010 2011 2012 2013 201
Slide 48: Promote ESG Management①
Promote ESG Management① Environment Social Governance Reduce environmental Promote diversity Enhance structure on impact Protect personal the basis of the intent Leverage ICT to information of Japan’s Corporate contribute to the Support customers in Governance Code environment reinforcin
Slide 49: Promote ESG Management②
Promote ESG Management② Promote Diversity and Inclusion Joined “The Valuable 500” initiative to promote Disability Inclusion (December 19, 2019） Will conduct a trial of the robot “OriHime-D” remotely controlled by people with physical disabilities at the NTT reception Trial image (from February
Slide 50: Strengthen Corporate Governance
Strengthen Corporate Governance Improve the Presence of Outside and Female Members of the Board From the perspective of strengthening the supervisory function of the Board of Directors and improving corporate governance, and at the same time promoting diversity, we have increased the number of out
Slide 51: Financial Data, etc.
Financial Data, etc. Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 50
Slide 52: NTT Group Formation
NTT Group Formation Voting rights to major subsidiaries (As of March 31, 2019) Operating revenue：¥4,840.8 billion 64.1% Operating income ：¥1,013.6 billion Mobile communications No. of employees ： 26,600 business No. of subsidiaries： 103 Operating revenue：¥3,152.3 billion 100% Operating income ：¥ 360
Slide 53: Trend in Consolidated Financial Results
Trend in Consolidated Financial Results 11.9 11.9 11.8 11.8 ■ Operating 11.5 11.4 Revenues 11.1 （Trillion yen） 10.9 10.7 ■ Operating * 1.64 1.64 1.69 1.54 1.55 1.35 Income 1.20 1.21 1.08 /Operating Profit （Trillion yen） 0.91 0.90 0.74 0.80 0.85 0.86 0.52 0.59 0.52 ■ Net Income * /Profit （Trillion ye
Slide 54: Changes in Consolidated Operating Revenues
Changes in Consolidated Operating Revenues ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business （Billion yen） 15,000 11,799.6 11,782.1 11,879.8 11,890.0 11,541.0 11,391.0 10,700.7 10,9
Slide 55: Changes in Consolidated Operating Income
Changes in Consolidated Operating Income ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,693.8 1,642.8 1,641.1 1,539.8 1,550.0 1,500 1,348.1 1,202.0 1,213.7
Slide 56: Changes in CAPEX
Changes in CAPEX ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,970.0 1,892.8 1,817.5 1,750.0 1,687.2 1,700.0 1,674.8 1,697.9 1,697.0 753.7 703.1 661.8 570.
Slide 57: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） Debt/Equity ratio* 6000.0 60.0% 50.8% 49.0% 49.3% 47.1% 45.2% 43.9% 46.0% 40.6% 4000.0 40.0% 4900.0 4406.7 4262.7 2000.0 4036.0 4200.0 4163.3 4088.2 20.0% 3854.8 3971.6 0.0 0.0% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2017 FY2018 FY2019E [IFRS] [IFR
Slide 58: Changes in Number of Employees
Changes in Number of Employees ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business 292,500 300,000 284,550 (317,850) 275,650 (307,900) 268,450 (284,550) 27,500 (274,850) 26,600 (27,75
Slide 59: Age Distribution of Employees at NTT East, NTT West
Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2019） 4,000 Number of Employees 2,000 0 20 30 40 50 60 65 Age * Figures for East Outsourcing Companies include employees from the consolidated regional outsourcing companies (NTT EAST-MINAMIKANTO and oth
Slide 60: Changes in Personnel expenses
Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 991.8 938.5 885.7 827.6 785.1 (43,850) 738.1 709.4 684.0 (28,100) (27,450) (26,750) (122,500) (111,300) (117,100) 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019E * The scope of aggregation for each of th
Slide 61: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Mobile FTTH Approx. Approx. 183.30M subs 32.3M subs 150M 30M SoftBank SoftBank market share Approx. 25％ 100M KDDI 20M NTT EAST and KDDI market share Approx. 31％ NTT WEST Approx. 21.4M subs 50M NTT DOCOMO 10M Approx. CATV Approx. DSL 6.8M subs 79.0M sub
Slide 62: Fixed Broadband Business FTTH Subscriptions
Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West） * Reference: FY2019 Breakdown of FTTH Subscriptions (millions subs) 2,168 (millions subs) 2,108 2,005 2,053 FY2019E 1,926 Hikari Total FTTH Service: +0.60 Change from preceding Fiscal Year Collaboration 4.6
Slide 63: Share Buybacks and Cancellation
Share Buybacks and Cancellation ＜＞：share holding ratio Buyback Buyback from Buyback from Buyback from from Cancellation Gov’t and Cancellation Gov’t and Cancellation Gov’t and market Market Market Market Treasury Stocks Treasury Stocks Excess Holdings 248mil. shares ＜14.1％＞ ＜0.0％＞ Excess Holdings 11
Slide 64: Your Value Partner
Your Value Partner Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Nippon Telegraph and Telephone Corporation (NTT) — FY2019 3Q Earnings Presentation on 6ix