Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2024 Earnings Presentation
50 slides from Kyushu Railway's earnings presentation, May 10, 2024
Slide 1: FY24.3 Annual Investors Meeting
FY24.3 Annual Investors Meeting May 10, 2024
Slide 2: Contents
Contents Ⅰ Financial Results and Year-end Dividend for FY24.3 4 Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for 10 FY25.3 Ⅲ Status of Segments 16 Ⅳ Progress on the Medium-Term Business Plan 27 Appendix 40 2
Slide 3: Highlights
Highlights Financial Owing to a recovery of demand in each segment, consolidated operating revenues, results and operating income, ordinary income, and net income attributable to owners of the parent all increased year on year. year-end The Company booked an extraordinary loss due to provision f
Slide 4: Financial Results and Year-end Dividend for FY24.3
Ⅰ Financial Results and Year-end Dividend for FY24.3 4
Slide 5: Consolidated Financial Highlights for FY24.3
Consolidated Financial Highlights for FY24.3 （\bil） Key points Results Results YoY FY23.3 FY24.3 With the further normalization of socioeconomic Operating revenue 383.2 420.4 37.1 109.7% activity, demand recovered in the railway and other businesses, pushing up revenue and operating Operating inco
Slide 6: Basic Agreement on Restoration of the Hisatsu Line
Basic Agreement on Restoration of the Hisatsu Line and Recording of Extraordinary Losses The Company and Kumamoto Prefecture signed a basic agreement on the restoration of the Hisatsu Line (Yatsushiro to Yoshimatsu) between Yatsushiro and Hitoyoshi, where service has been suspended due to heavy ra
Slide 7: Consolidated Balance Sheet and Cash Flow Statement
Consolidated Balance Sheet and Cash Flow Statement （\bil） Results Results YoY Major factors FY23.3 FY24.3 Assets 996.6 1,089.1 92.4 Current assets 197.1 221.5 24.3 Increase in accounts receivable and others Non-current assets 799.5 867.6 68.0 Increase in property, plant and equipment (JR Nagasaki St
Slide 8: Consolidated Results for FY24.3 (by Segment)
Consolidated Results for FY24.3 (by Segment) （\bil） Results Results YoY Major factors FY23.3 FY24.3 Operating revenue 383.2 420.4 37.1 109.7% Transportation 138.3 163.7 25.4 118.4% Railway Business (non-consolidated) 136.5 160.4 23.9 117.6% Increase due to moderate recovery in demand Real Estate and
Slide 9: Non-consolidated Results for FY24.3
Non-consolidated Results for FY24.3 (\bil) Results Results YoY Major Factors FY23.3 FY24.3 Operating revenue 211.6 234.3 22.7 110.7% Railway transportation 121.4 145.0 23.6 119.5% Increase due to moderate recovery in demand revenues Shinkansen 44.0 57.5 13.5 130.7% Conventional Lines 77.4 87.5 10.1
Slide 10: Full-Year Performance Forecasts and Dividend Forecasts for FY25.3
Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for FY25.3 10
Slide 11: Consolidated Financial Forecast Highlights for FY25.3
Consolidated Financial Forecast Highlights for FY25.3 Key points （\bil） Although personnel expenses will rise due Medium-Term to improved employee compensation, we Results Forecasts YoY Business Plan Vs. targets expect higher railway transportation FY24.3 FY25.3 targets revenue and a decline in ma
Slide 12: Consolidated Financial Forecasts for FY25.3 (by Segment)
Consolidated Financial Forecasts for FY25.3 (by Segment) (\bil) Medium-Term Results Forecasts YoY Major factors Business Plan Vs. targets FY24.3 FY25.3 targets Operating revenue 420.4 441.1 20.6 104.9% 440.0 1.1 100.3% Transportation 163.7 166.6 2.8 101.7% Increase due to moderate recovery in demand
Slide 13: Non-consolidated Financial Forecasts for FY25.3
Non-consolidated Financial Forecasts for FY25.3 （\bil） Results Forecasts YoY Major factors FY24.3 FY25.3 Operating revenue 234.3 234.1 (0.2) 99.9% Railway transportation 145.0 147.7 2.6 101.8% Increase due to moderate recovery in demand revenues Shinkansen 57.5 58.7 1.1 102.0% Conventional Lines 87.
Slide 14: Capital Investment Plan
Capital Investment Plan ●We are making steady progress according to the capital investment plan indicted in the medium-term business plan. ●In FY25.3, we will utilize our borrowing capacity. We plan growth investments, including in the development of logistics facilities and in growth investment pro
Slide 15: FY25.3 Dividend Forecasts
FY25.3 Dividend Forecasts Shareholder return policy JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY25.3, we will aim for a consolidated dividend payout ratio of 35%, with a minimum dividend per share of ¥93.0. We will flexibly
Slide 16: Status of Segments
Il Status of Segments 16
Slide 17: Transportation Segment
Transportation Segment In Q4 FY24.3, railway transportation revenues were on a par with Q3. In FY25.3, we expect these revenues to remain at the same level as in 2H FY24.3. Maintenance costs rose in FY24.3, owing to the lifting of emergency restraints during COVID-19, but we expect these costs t
Slide 18: Status of Inbound Measures in the Railway Business
Status of Inbound Measures in the Railway Business The number of tickets sold remained robust, even after prices were revised on the JR- KYUSHU RAIL PASS, and inbound revenue in Q4 FY24.3 remained at Q3 levels. Inbound revenues (approximate) 25.0 Demand for JR-KYUSHU RAIL PASS JR-KYUSHU RAIL PASS
Slide 19: Sales Measures in the Railway Business
Sales Measures in the Railway Business Promotion of measures to capture and further stimulate the growing demand for mobility after the COVID-19 pandemic Start of operations of the “KANPACHI/ICHIROKU,” Trial of dynamic pricing a new D&S train We began dynamic pricing verification testing of “KYU
Slide 20: Railway Business (Transportation Data)
Railway Business (Transportation Data) Railway transportation revenues (\bil) Results Results YoY Major Factors FY23.3 FY24.3 Total 121.4 145.0 23.6 119.5% Commuter pass 29.0 30.2 1.1 104.0% Non-commuter pass 92.3 114.8 22.4 124.3% Cargo 0.0 0.0 0.0 133.5% Shinkansen 44.0 57.5 13.5 130.7% Gradual re
Slide 21: Real Estate and Hotels Segment: Real Estate Leasing Business
Real Estate and Hotels Segment: Real Estate Leasing Business In FY24.3, JR Hakata City drove existing station building tenant sales above pre-pandemic levels. In FY25.3, Amu Plaza Nagasaki annex, which opened in November 2023, will contribute to performance for the entire year. [Results] [Foreca
Slide 22: Real Estate and Hotels Segment: Real Estate Sales Business
Real Estate and Hotels Segment｜Real Estate Sales Business The sale of Company properties in FY24.3 was down from FY23.3 levels, causing revenue to decline. In FY25.3, we expect condominium sales to be above FY24.3 levels, but we anticipate lower sales of Company properties. [Results] [Forecast]
Slide 23: Real Estate and Hotels Segment: Hotel Business
Real Estate and Hotels Segment｜Hotel Business ADR increased in FY24.3, centering on THE BLOSSOM, rising above ¥20,000 in 2H. In FY25.3, we expect occupancy rates and ADR to be around 2H FY24.3 levels. [Results] （\bil） [Forecast] （\bil） FY23.3 FY24.3 FY24.3 FY25.3 YoY YoY Results Results Results
Slide 24: Retail and Restaurant Segment
Retail and Restaurant Segment In FY24.3, a resurgence in footfall led to positive performance at retail stores and restaurants. In FY25.3, we look forward to higher revenues, due to increased sales at existing stores, as well as sales from new stores. [Results] [Forecast] （\bil） （\bil） FY23.3 FY
Slide 25: Construction Segment
Construction Segment In FY24.3, revenues and income were up year on year, owing to construction related to the New Nagasaki Station Building, Hokuriku Shinkansen, Hokkaido Shinkansen, and other projects. In FY25.3, we will consolidate our sub-subsidiaries, as the businesses have become more impo
Slide 26: Business Services Segment
Business Services Segment In FY24.3, revenues and income were up due to increased material deliveries, advertising placements, etc. In FY25.3, we will consolidate sub-subsidiaries in this business due to their increased importance to our management strategy over the medium to long term. [Results
Slide 27: Progress of the Medium-Term Business Plan
Ⅳ Progress of the Medium-Term Business Plan 27
Slide 28: JR Kyushu Group Medium-Term Business Plan 2022-2024
JR Kyushu Group Medium-Term Business Plan 2022-2024 Three key strategies of the medium-term business plan 2030 Long-Term Vision Robustly promoting three key strategies during the stage for returning the We will contribute to the sustainable development of Company to a growth track Kyushu through cit
Slide 29: State of Progress of the Medium-Term Business Plan
State of Progress of the Medium-Term Business Plan To FY24.3 FY25.3 Achieving ¥14.0 billion reduction (1) Completing Steadily implement the Future in fixed costs in the railway business structural Railway Project business reforms Restructure hotel subsidiaries Launch the Future Railway Proje
Slide 30: Key Strategy 1: Future Railway Project
Key Strategy ❶ Completing Business Structural Reforms｜Railway Business (Future Railway Project) We introduced Japan’s first GOA* 2.5 self-driving trains in March, and we have commenced verification testing of GOA 2.0 self-driving trains. One year after its launch, the “future management of incom
Slide 31: Restructure Hotel-Operating Companies
Key Strategy ❶ Completing Business Structural Reforms｜Restructure Hotel-Operating Companies We plan to increase the resilience of our management base and strengthen overall facility management capabilities through a merger. We will review the personnel and wage systems in conjunction with the re
Slide 32: City-Building in the Western Kyushu Area
Key Strategy ❷ Creating a Model for Building Cities That Promote Well-Being｜City-Building in the Western Kyushu Area We have opened the “Amu Plaza Nagasaki annex” and the “Nagasaki Marriott Hotel” and renovated existing station buildings.Development of the western Kyushu area and area around Nagas
Slide 33: City-Building in the Fukuoka Area
Key Strategy ❷ Creating a Model for Building Cities That Promote Well-Being｜City-Building in the Fukuoka Area We are promoting city-building, including collaboration with outside entities such as the “Hakata Connected” project in Fukuoka City We will continue to aggressively prepare and enhance
Slide 34: City-Building along Our Railway Lines
Key Strategy ❷ Creating a Model for Building Cities That Promote Well-Being ｜City-Building along Our Railway Lines We responded to the “Kyushu University Hakozaki Campus Site Area Land Use Business Application” and were selected as the preferred bidder for providing multiple types of value through
Slide 35: Promoting Logistics Real Estate Development
Key Strategy ❷ Creating a Model for Building Cities That Promote Well-Being ｜Promoting Logistics Real Estate Development We are entering the logistics facilities business, and we have already begun on our first development project. We will actively promote both acquisition and development, while
Slide 36: Rediscover and Utilizing Regional Resources
Key Strategy ❷ Create a Model for Building Cities That Promote Well-Being｜ Rediscover and Utilizing Regional Resources We are discovering people who are contributing to the attraction and liveliness of the region through the “Kyushu DREAM STATION” and the “Kyushu Tourism Urban Development Award.”
Slide 37: State of Progress on Non-Financial KPIs
State of Progress on Non-Financial KPIs Materiality Objectives/Indicators Progress (FY24.3) ● CO2 emissions ● JR Kyushu non-consolidated emissions in 50% reduction compared to FY14.3 Reduced by 54.0% (FY23.3 result) FY31.3 Realization of a ● Disclosure of environment-related ● Groupwide Scope 1 and
Slide 38: Key Issues for Management Going Forward
Key Issues for Management Going Forward Our Various measures are generally in line with plans, and we expect to understanding of achieve our numerical targets, so we are on the way to “returning the the current Company to a growth track.” situation Going forward, we will enter the phase of “real
Slide 39: Medium- to Long-Term Issues in the Railway Business and Fare Revisions
Medium- to Long-Term Issues in the Railway Business and Fare Revisions As one measure for addressing the medium- to long-term challenges we face in the railway business, we are preparing to apply for fare revisions in response to revised cost-of-income calculation procedures. [Reference] Key revis
Slide 40: Appendix
APPENDIX 40
Slide 41: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels （¥bil） EBITDA EBITDA margin （¥bil） EBITDA EBITDA margin 40 40% 50 60% 30 29.5 30% 40.8 22.3 40 36.2 50% 20 13.1 20% 31.8 31.9 30.5 10 10% 30 17.0% 13.6% 22.2 9.5% 40% 0 0% 20 FY20.3 FY21.3 FY22.3 FY22.3 FY23.3 FY24.3 (10) -10% 30% 10 33.7% (20)
Slide 42: Trends in the Railway Business
Trends in the Railway Business Railway transportation revenues (Shinkansen), passenger Internet train reservation services: load factor on the Kyushu Shinkansen (Hakata-Kumamoto) Number of reservations, sales （¥bil） （¥bil） （10,000 rersevations） Shinkansen Passanger load factor(right) 600 36.6 40 80
Slide 43: 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 （¥bil） 300 Other major station buildings* JR Hakata City （¥） 262.8 ADR(left) Occupancy Rates(right) 24,000 100% 250 222.1 78.8% 202.6 20,000 73.3% 67.5% 80% 200 184.6 128.3 16,0
Slide 44: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot Name Location Schedule area/Units/Roo Notes (Uses, etc.) ms Autumn 2021: Start of Lot area: Approx. • Phase I: commercial facilities, offices, multi- construction 9,500㎡ story parking garage; Phase II: multi-faceted Kagoshima City, Kagoshima-Ch
Slide 45: Railway Business: Outline of Fares/Charges and Depreciation Costs
Railway Business—Outline of Fares/Charges and Depreciation costs Outline of Fares/Charges （￥bil） Trend of operating income in the railway business 400 40 ■ Breakdown of fares/charges 25.0 28.2 26.7 300 30 20.0 200 20 10.5 100 3.1 10 Charges → Compensation for the use of facilities, the provision of
Slide 46: Routes in Relation to Airport Access Railway and TSMC's Kumamoto Plant
Our Routes and Position in Relation to Airport Access Railway and TSMC’s Kumamoto Plant With the entry of TSMC and the construction of airport access railway, the Kumamoto area is expected to see an increase in interaction and population along the rail line. We plan to build a new station betwee
Slide 47: Comprehensive Collaborative Agreement with the Kasuya Town
Comprehensive Collaborative Agreement with the Kasuya Town The number of passengers on the Sasaguri Line, which connects to Hakata Station, is on the rise. On May 7, 2024, we signed a comprehensive cooperation agreement with the Kasuya Town, a municipality along the line, aiming to further revit
Slide 48: Initiatives and Policies for Improving Return on Capital and Market Valuation
Initiatives and Policies for Improving Our Return on Capital and Market Valuation • We recognize improving return on capital and market valuation as an important management issue. Recognition －We plan to meet the numerical management targets for fiscal 2024 indicated in of the our current medium-ter
Slide 49: Dialogue with Shareholders and Investors in FY24.3
Dialogue with Shareholders and Investors in FY24.3 Details of communications Feedback to the Board of Directors Targeting institutional investors and analysts: Number of reports to the Board of Directors: Six Financial results briefings, IR Day, small meetings, facility Main measures implemented bas
Slide 50: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. These statements are judgments made by the Company based on information, projections, and assumptions available at the time of the materials’ creation. A
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