Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2021 Earnings Presentation
48 slides from Kyushu Railway's earnings presentation, May 13, 2021
Slide 1: FY21.3 Annual Investors Meeting
FY21.3 Annual Investors Meeting May 13, 2021
Slide 2: Contents
Contents Highlights 3 Ⅰ Financial Results for FY21.3 4 Ⅱ Performance Forecasts and Dividend Forecasts for FY22.3 8 Ⅲ Future Courses of Action and Issues for the Next Medium-Term 21 Business Plan APPENDIX 38 2
Slide 3: Highlights
Highlights Financial Due to the influence of the COVID-19 infection, consolidated operating revenues, results and operating income, ordinary income, and net income attributable to owners of the parent year-end dividend for all declined. FY21.3 Planning a year-end dividend of ¥93 per share (annua
Slide 4: Financial Results for FY21.3
Ⅰ FINANCIAL RESULTS FOR FY21.3 4
Slide 5: Consolidated Financial Highlights for FY21.3
Consolidated Financial Highlights for FY21.3 Operating revenue Substantial decline in revenue due to such factors as the （\bil） decrease in railway transportation revenues resulting from Results Results the influence of the spread of the COVID-19 infection YoY [¥(71.0) billion] and the influence of
Slide 6: FY21.3 Segment settlement
FY21.3 Segment settlement （\bil） Results Results YoY Major factors FY20.3 FY21.3 Operating revenue 432.6 293.9 (138.7) 67.9% Transportation 173.7 95.2 (78.4) 54.9% Decrease in passenger demand (railway, hydrofoil ferry, bus) due to influence of the COVID-19 infection Railway Business (non-consolidat
Slide 7: FY21.3 Non-consolidated settlement
FY21.3 Non-consolidated settlement (\bil) Results Results YoY Major Factors FY20.3 FY21.3 Operating revenue 214.8 144.7 (70.1) 67.3% Railway transportation 147.3 76.3 (71.0) 51.8% Influence of the COVID-19 infection revenues Shinkansen 52.3 22.4 (29.8) 43.0% Conventional Lines 95.0 53.8 (41.2) 56.6%
Slide 8: Performance Forecasts and Dividend Forecasts for FY22.3
Ⅱ PERFORMANCE FORECASTS AND DIVIDEND FORECASTS FOR FY22.3 8
Slide 9: Positioning of the FY22.3
Positioning of the FY22.3 Implementing initiatives to address structural issues and measures for a V-shaped recovery In FY22.3, which will be the final year of the current Medium-Term Business Plan, we will accelerate initiatives to address structural issues, such as “cost structure reform” and “b
Slide 10: Performance Forecast Assumptions for FY22.3
Performance Forecast Assumptions for FY22.3 With consideration for the lengthening of the influence of the COVID-19 infection, we anticipate a certain level of influence on each business in FY22.3. Railways Station buildings Commuter: Approximately 90% of level before COVID-19 Tenant sales: As of
Slide 11: Transportation Segment: Secure revenues
Transportation Segment Advancing measures to secure revenues and to reduce costs Working to secure revenues through large-scale discontinuance of tickets sold at counters and price increases on discount tickets (implemented April 1, 2021). Advancing cost reductions through BPR while continuing urg
Slide 12: Real Estate and Hotels Segment
Real Estate and Hotels Segment Contribution to consolidated results from opening effect of Kumamoto and Miyazaki station buildings Full-year contribution to consolidated results from Kumamoto Station Building opening (April 23, 2021) and Miyazaki Station Building Opening (November 20, 2020) In F
Slide 13: Consolidated Financial Highlights for FY22.3
Consolidated Financial Highlights for FY22.3 （\bil） Operating revenue Results Forecasts YoY Increase in revenue due to moderate FY21.3 FY22.3 recovery in demand in the Transportation Operating revenue 293.9 344.2 50.2 117.1% Segment and other segments Operating income (22.8) 10.6 33.4 - Ordinary inc
Slide 14: Consolidated Financial Forecasts for FY22.3 (by segment)
Consolidated Financial Forecasts for FY22.3(by segment) (\bil) Results Forecasts YoY Major factors FY21.3 FY22.3 Operating revenue 293.9 344.2 50.2 117.1% Transportation 95.2 127.5 32.2 133.8% Increase due to moderate recovery in demand in railway business Railway Business (non-consolidated) 89.7 12
Slide 15: Non-consolidated Financial Forecasts for FY22.3
Non-consolidated Financial Forecasts for FY22.3 (\bil) Results Forecasts YoY Major factors FY21.3 FY22.3 Operating revenue 144.7 177.2 32.4 122.4% Railway transportation 76.3 106.0 29.6 138.9% Increase due to moderate recovery in demand revenues Shinkansen 22.4 36.0 13.5 160.1% Conventional Lines 53
Slide 16: FY22.3 dividend forecasts
FY22.3 dividend forecasts Shareholder return policy The Company views the return of profits to shareholders as one of its most important management tasks. Accordingly, the Company believes it is important to provide stable shareholder returns over the long term. (Policy up to FY22.3) ・Aim for a di
Slide 17: (Reference) Transportation Segment
(Reference) Transportation Segment 【Results】 （\bil） 【Forecasts】 （\bil） Results Results Forecasts YoY YoY FY20.3 FY21.3 FY22.3 Operating revenue 173.7 95.2 (78.4) 54.9% 127.5 32.2 133.8% Railway Business 165.2 89.7 (75.4) 54.3% 120.4 30.6 134.1% (non-consolidated) Railway transportation 147.3 76.3 (7
Slide 18: (Reference) Real Estate and Hotels Segment (1)
(Reference) Real Estate and Hotels Segment (1) Real estate leasing business 【Results】 【Forecasts】 (\bil) (\bil) Results Results Forecasts YoY YoY FY20.3 FY21.3 FY22.3 Operating revenue 55.2 49.7 (5.4) 90.1% 59.4 9.6 119.4% Operating income 16.7 12.0 (4.7) 71.9% 14.0 1.9 116.0% EBITDA 26.1 22.0 (4.1)
Slide 19: (Reference) Real Estate and Hotels Segment (2)
(Reference) Real Estate and Hotels Segment (2) Condominium sales business 【Results】 (\bil) 【Forecasts】 (\bil) Results Results Forecasts YoY YoY FY20.3 FY21.3 FY22.3 Operating revenue 18.9 23.5 4.6 124.5% 23.0 (0.5) 97.6% Operating income 1.5 2.6 1.0 168.6% 2.2 (0.4) 83.3% EBITDA 1.5 2.6 1.0 168.3% 2
Slide 20: (Reference) Retail and Restaurant segment
(Reference) Retail and Restaurant segment 【Results】 【Forecasts】 (\bil) (\bil) Results Results Forecasts YoY YoY FY20.3 FY21.3 FY22.3 Operating revenue 104.6 51.4 (53.1) 49.2% 47.3 (4.1) 91.9% Operating income 2.8 (2.5) (5.4) - 0.5 3.0 - EBITDA 4.4 (1.1) (5.6) - 1.7 2.8 - *Amount of influence of JR K
Slide 21: Future Courses of Action and Issues for the Next Medium-Term Business Plan
Ⅲ FUTURE COURSES OF ACTION AND ISSUES FOR THE NEXT MEDIUM-TERM BUSINESS PLAN 21
Slide 22: Review of Results in FY21.3
Review of Results in FY21.3 While experiencing ups and downs, operating revenues in each business gradually recovered. In addition, we implemented thorough cost management initiatives. From the second quarter, consolidated EBITDA turned positive, and overall consolidated EBITDA was positive for
Slide 23: Issues Revealed by COVID-19 and the Company's Current Courses of Action
Issues Revealed by COVID-19 and the Company’s Current Courses of Action Ongoing Declining population in Kyushu, where the pace of the decline exceeds the issues pace of the decline in the nationwide population Addressing natural disasters of increased severity Dramatic changes in consumer behavi
Slide 24: Business management with the highest priority on safety and peace of mind
[Course of action (1)] Business management with the highest priority on safety and peace of mind ■ At this point, when the future is unclear, we will return to the starting point and work to fulfill our social mission and to be a trusted business group by implementing business management with the hi
Slide 25: City-building that further enhances the value of stations
[Course of action (1)] City-building that further enhances the value of stations ■ No change to business model centered on stations. Reforming Group businesses with a focus on traditional strengths and value provided to customers. Enhancing value of stations as “places that people make a point of vi
Slide 26: Future city-building initiatives throughout Kyushu
[Course of action (1)] Future city-building initiatives throughout Kyushu We will continue to take on the challenge of development plans, such as development in areas surrounding stations and public offerings for which we have already acquired preferred negotiating rights. Aiming for sustained g
Slide 27: Advancing new businesses that do not depend on the flow of people
[Course of action (1)] Advancing new businesses that do not depend on the flow of people Due to new lifestyles, the flow of people will not return in the short term. While making full use of the Group’s strengths and management resources, we will build a portfolio of new businesses by taking on
Slide 28: BPR Strategy for Railway Business Cost Structure Reform (1)
[Course of action (2)] （※Business Process Re-engineering） BPR Strategy for Railway Business Cost Structure Reform (1) With the objective of generating stable profits even through railway transportation revenues do not return to the level before COVID- 19, we will rebuild business operations proces
Slide 29: BPR Strategy for Railway Business Cost Structure Reform (2)
[Course of action (2)] BPR Strategy for Railway Business Cost Structure Reform （2） Direction of BPR strategy With safety as the major precondition, continually advancing measures with ongoing cost reduction effects, rather than temporary measures Direction of measures ✔ Providing services aligned
Slide 30: Hotel business cost structure reform
[Course of action (2)] Hotel business cost structure reform Reducing break-even point through sustained cost reductions ■ In FY21.3, the COVID-19 infection had a major influence. However, we are forecasting a return to profitability in FY22.3 as a result of cost structure reform initiatives. (*FY21.
Slide 31: Establishing specialized regional funds
[Course of action (3)] Establishing specialized regional funds Reason for establishment JR Focus on growth fields, with consideration for Increase in small and medium sized companies in Regional challenging business environment Kyushu changes in management environment during issues (COVID-19, succes
Slide 32: Invigorating Local Communities through MaaS
[Course of action (3)] Invigorating Local Communities through MaaS Expanding/enhancing initiatives in each Direction of MaaS region of Kyushu Initiatives in Kitakyushu City Declining birth rate and aging population, Shimosone Station Public declining population, labor shortage • In conjunction with
Slide 33: Issues for the Next Medium-Term Business Plan
Issues for the Next Medium-Term Business Plan In the final year of the current Medium-Term Business Plan, with consideration for the influence of COVID-19, we will advance initiatives for “cost structure reform” and “business reform and growth model creation” In addition, we will need to continu
Slide 34: Issues for the Next Medium-Term Business Plan
Issues for the Next Medium-Term Business Plan Capital investment in FY22.3 Balance sheet at end of FY21.3 FY22.3 (with COVID-19) Increase in interest-bearing debt （¥bil） In FY22.3, we will invest in city-building in （¥bil） Growth investment the Kumamoto Station area and investment due to influen
Slide 35: Private REIT formation for sustained growth in real estate
Issues for the Next Medium-Term Business Plan Private REIT formation with the aim of sustained growth in the real estate business, which supports city-building Leasing （Income gains） Building foundation for sustainable growth in the real estate development business through a cyclical investment mo
Slide 36: Initiatives for the creation of sustainable business value
Issues for the Next Medium-Term Business Plan Initiatives for the creation of sustainable business value Support for TCFD Safety and service (Background) • Safety and service are the foundation of all of our businesses. • In Kyushu, in recent years, the frequency and severity Advancing initiatives t
Slide 37: Local Community Invigoration
Local Community Invigoration Shooting Star Shinkansen ©村上悠太 The Shining Kyushu, Everyone’s Kyushu project was launched to shine a light of hope on Kyushu, which has been affected by COVID-19, and to encourage the people of Kyushu to take the initiative in building a brighter future. With the coo
Slide 38: APPENDIX
APPENDIX 38
Slide 39: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet （\bil） Results Results YoY Major factors FY20.3 FY21.3 Total Assets 828.5 891.3 62.7 Cash and time deposits 23.8 22.9 (0.8) Short-term securities - 42.0 42.0 Increase in negotiable certificates of deposit Property, plant and equipment 517.9 532.0 1
Slide 40: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (\bil) Results Results YoY Major Factors FY20.3 FY21.3 Total 147.3 76.3 (71.0) 51.8% Commuter pass 32.5 26.2 (6.3) 80.6% Non-commuter pass 114.7 50.0 (64.7) 43.6% Shinkansen 52.3 22.4 (29.8) 43.0% Decline due to influence of COVI
Slide 41: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels EBITDA EBITDAマージン EBITDA margin (¥bil) （億円） EBITDA EBITDAマージン EBITDA margin (¥bil) （億円） 40 400 35.6 356 60% 400 40 343 34.3 34.4 344 343 34.3 30% 32.0 33.1 331 285 28.5 295 29.5 31.1 311 320 30.5 305 30 300 30 300 50% 20% 20 200 22.2 222 100 10
Slide 42: Important Accounting Matters
Important Accounting Matters Changes in accounting policies (implemented April 1, 2021) Application of revenue recognition accounting standard Accompanying the clarification of the handling of revenue recognition and the mandatory application of the standard, applying new standard from FY22.3. (
Slide 43: Trends in the Railway Business
Trends in the Railway Business Railway transportation revenues (Shinkansen), passenger Internet train reservation services: (¥bil) （億円） (¥bil) load factor on the Kyushu Shinkansen (Hakata－Kumamoto) （10,000 reservations） Number of reservations, sales 800 80 Shinkansen Passenger load factor 55% 600 40
Slide 44: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Notes (Uses, etc.) Units/Rooms Shimoori Onojo City, Fukukoka Winter 2019: Start of construction Integrated development incorporating commercial Lot area: Approx. 13,000㎡ development Prefecture Spring 2022: Planned op
Slide 45: MaaS Initiatives and Miyazaki Station West Entrance Development
Overview of Miyazaki Station West Entrance Development and MaaS Initiatives Miyazaki Station West Entrance Development *Joint development with JR Miyako Twin JR Miyako Twin Building Miyazaki Kotsu Umikan Yamakan Building Umi-kan (commercial facility floor space: 9,800 ㎡) 1st to 6th floors: Commerc
Slide 46: Overview of Kumamoto Station Area Development
Overview of Kumamoto Station Area Development JR Kumamoto Station Building Opening: April 23, 2021 JR Kumamoto Kasuga Total floor space: Approximately 110,000㎡ Number of hotel rooms: 203 rooms South Building 1st to 8th floors: Amu Plaza Kumamoto Completion: December 2020 (commercial, weddings) (comm
Slide 47: Trends in the Real Estate and Hotel Businesses
Trends in the Real Estate and Hotel Businesses Station building tenant sales Hotel occupancy rates and average unit prices （¥） （円） （¥bil） Occupancy Other main station (left) ADR（左軸） 稼働率（右軸） Rates (right) 2,500 その他主要駅ビル JR Hakata City JR博多シティ 16,000 100% 250 buildings 13,877 203.0 2,030 202.6 2,026 1
Slide 48: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. The Company decided on these forward-looking statements based on the available information, as well as Company estimates and assumptions, at the time the
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