Ntt Inc · TSE:9432
Ntt — Investor Presentation (February 2022)
78 slides from Ntt's investor presentation, February 2022
Slide 1: IR Presentation
©) NTT IR Presentation
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 the Nine Months Ended December 31, 2021 Fixed-line Communication Business 2021.3Q Financial Results – Key Points 4 Fixed Broadband Business FTTH Subscriptions 43 Status of Consolidated Results for FY2021.3Q 5 Migrate PSTN to IP Networks 44 Contributing F
Slide 4: Overview of Consolidated Results for the Nine Months Ended December 31, 2021
Overview of Consolidated Results for the Nine Months Ended December 31, 2021 Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: 2021.3Q Financial Results – Key Points
2021.3Q Financial Results – Key Points ・ FY2021.3Q revenues and income both increased. Operating revenues, operating income and profit each reached new record-high levels. Operating revenues increased by ¥185.2 billion (an increase of 2.1%) year-over-year to ¥8,923.2 billion, and operating income in
Slide 6: Status of Consolidated Results for FY2021.3Q
Status of Consolidated Results for FY2021.3Q Year-on-year, both operating revenues and operating income increased Operating revenues, operating income and profit all reached record-high levels Status of Consolidated Results Operating Revenues: ¥8,923.2B <+¥185.2B [+2.1%] year-on-year> Operat
Slide 7: Contributing Factors by Segment for FY2021.3Q
Contributing Factors by Segment for FY2021.3Q Operating Revenues <Year-on-year:＋185.2> (Billions of yen) Long Distance and Mobile Regional Data Other Elimination of International Communications Communications Communications Business Inter-Segment Communications Business Business Business Transaction
Slide 8: FY2021.Q3 Details for NTT DOCOMO
FY2021.Q3 Details for NTT DOCOMO Despite a decrease in profits compared to the prior year, the Smart Life area continues to steadily grow Operating Mobile (Billions of yen) Communications Income Service Impact of 7,696 821.8 Revision of Point Revenues Accounting Smart Life System in the Area Earni
Slide 9: FY2021 NTT DOCOMO Quarterly Income Trends
FY2021 NTT DOCOMO Quarterly Income Trends Income has been steadily improving each quarter, shifting to profitability for Q3 on a standalone basis, and with further increases expected in Q4 Operating Income (Year-on-Year Increase/Decrease) (Billions of yen) FY2021.Q1 FY2021.Q2 FY2021.Q3 FY2021.Q4 (
Slide 10: Financial Results Forecast
Financial Results Forecast Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 9
Slide 11: FY2021 Financial Results Forecast
FY2021 Financial Results Forecast Operating revenues, operating income, profit, EPS and overseas operating income margin forecasts have all been revised upwards, reflecting strong business results Consolidated Revenues and Income Plan Initial Forecast Financial Results Forecast Change from (Announ
Slide 12: Revision of NTT Ltd. Financial Results Forecast
Revision of NTT Ltd. Financial Results Forecast (Billions of yen) Operating Income (Compared to Initial Forecast: (19.0)) [Based on a rate of 104 yen per dollar from the time of the Initial Forecast] Impact of COVID-19, semiconductor shortages, etc. Acceleration 22.0 7.0 of structural reforms Effect
Slide 13: FY2021 Financial Results Forecast (by Company)
FY2021 Financial Results Forecast (by Company) Operating Operating Change from Change from Revenues Initial Forecast Income Initial Forecast NTT DOCOMO ¥4,790.0B - ¥920.0B - NTT East ¥1,730.0B - ¥273.0B - NTT West ¥1,470.0B - ¥156.0B - NTT Communications ¥1,075.0B - ¥138.0B - NTT Ltd. ¥1,080.0B - ¥3
Slide 14: Operating Revenue and Operating Income Trends
Operating Revenue and Operating Income Trends In FY2018, there continued to be increases in both revenues and income, while FY2019 saw a shift to a downward trend in income as a result of the effect of the introduction of new billing plans by NTT DOCOMO, among other factors In FY2020, while cont
Slide 15: NTT Group Medium-Term Management Strategy
NTT Group Medium-Term Management Strategy Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 14
Slide 16: Directionality of Refinement of the Medium-Term Management Strategy
Directionality of Refinement of the Medium-Term Management Strategy Transformation to a New FY2023 Management Style Cost Reductions over (Further Promotion of DX) ¥200.0 billion Effect of Synergies in FY2023 Achieving the Newly Formed Profit Increase of EPS of ¥370 DOCOMO Group ¥100.0 billion in FY2
Slide 17: Directionality of NTT Group's Transformation
Directionality of NTT Group’s Transformation Social/Economic NTT Group’s Directionality Directionality Society During Contribution to the Achievement A New Management Style Suitable COVID-19 and of a Sustainable Society for a Decentralized Network Society Post-COVID-19 Enhance Domestic and Global Ad
Slide 18: New Strategic Framework
New Strategic Framework ① Transformation to a • New style premised on remote work New Management Style • Growth and strengthening of the newly formed DOCOMO Group ② Enhance • Promotion of the IOWN development/rollout plan Domestic/Global • Enhance competitiveness in global business Business • Promot
Slide 19: Growth and Strengthening of the Newly Formed DOCOMO Group
Growth and Strengthening of the Newly Formed DOCOMO Group Challenge of the New DOCOMO Group New DOCOMO Group Medium-Term Strategy Expansion of enterprise business Expansion of the Smart Life Business Strengthening the telecommunications business Strengthening global business Strengthening IT Stren
Slide 20: Refinement of Medium-Term Financial Targets
Refinement of Medium-Term Financial Targets (Reference) Target Previous Target Current Target FY2021 Plan EPS Approx. ¥320 ¥370 ¥306 (FY2023) (FY2023) (1) Overseas 7% 7% 6.1% Operating Income Margin (FY2023) (FY2023) (2) At least At least Cost Reductions ¥(800.0) billion ¥(840.0) billion (In Fixed-L
Slide 21: Changes in Medium-Term Targets
Changes in Medium-Term Targets *1 EPS Growth (1) Cost Reductions* （in fixed-line/mobile access networks） Profit Expansion Oct. 2021 Refinement /Share Buybacks 370yen FY 2017 FY 2018 FY 2019 FY 2020 FY 2021E FY 2023 Target 302yen (220.0) 248yen billion yen 220yen 231yen (500.0) 212yen (2) billion yen
Slide 22: New DOCOMO Group Medium-Term Strategy
New DOCOMO Group Medium-Term Strategy Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 21
Slide 23: New DOCOMO Group Medium-Term Strategy①
New DOCOMO Group Medium-Term Strategy① As the New DOCOMO Group, we are expanding our business domain to encompass mobile, services, and solutions and create a new world Integration of the three companies NTT Communications Clear business responsibilities NTT COMWARE become subsidiaries of DOCOMO Str
Slide 24: New DOCOMO Group Medium-Term Strategy②
New DOCOMO Group Medium-Term Strategy② Synergy Through Integration Expansion of Integrate all enterprise business under enterprise business the New DOCOMO Group; support all corporate customers through one stop - contribute toward DX of society and industry More competitive Fixed and Mobile converge
Slide 25: New DOCOMO Group Medium-Term Strategy③
New DOCOMO Group Medium-Term Strategy③ Medium-term Management Goals FY 2025 Ratio of smart life plus 50% or more Growth enterprise business revenue Enterprise business revenue 2 trillion yen or more Efficiency Telecom CAPEX to Sales 16.5%or less Capital ROIC 12% or more productivity Copyright 2022 N
Slide 26: New DOCOMO Group Medium-Term Strategy④
New DOCOMO Group Medium-Term Strategy④ Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25
Slide 27: Transformation to a New Management Style
Transformation to a New Management Style Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26
Slide 28: Transformation to a New Management Style (1/4)
Transformation to a New Management Style (1/4) Transformation to a New Style Premised on Remote Work Re-examination of Transformation of Promotion of Remote Work Systems/ General Business/ DX Improvements Promotion of “work-in-life” (health management) Open, global and innovative business operations
Slide 29: Transformation to a New Management Style (2/4)
Transformation to a New Management Style (2/4) Transformation of Business/ DX ① Introduction of Cloud-Based Systems/ Zero-Trust Systems Completion in FY2022(1) Development of an IT environment that enables employees to work from anywhere Completion in FY2023(2) (1) Staff and sales teams. (2) All.
Slide 30: Transformation to a New Management Style (3/4)
Transformation to a New Management Style (3/4) Re-Examination of Systems/ General Improvements ⑤ Re-Examination of Systems to Promote Business Transformation/DX Systematizing information security that is appropriate for remote work From FY2022 Re-examination of the office environment (increase the
Slide 31: Transformation to a New Management Style (4/4)
Transformation to a New Management Style (3/4) Promotion of Work-in-Life, and Open, Global and Innovative Business Operations ⑧ Promotion of Work-in-Life (Health Management) through the Workplace-Residence Proximity Employees’ work will be premised on remote work, and they can choose their own wor
Slide 32: Mobile Communication Business
Mobile Communication Business Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 31
Slide 33: NTT DOCOMO Lineup of rate plans
NTT DOCOMO Lineup of rate plans Enriched lineup of rate plans from a customer-first perspective Freely selectable plans from large to small capacity Enriched rate plans for young users Large 5G Gigaho Premier capacity U15 Hajimete Sumaho Plan Gigaho Premier U30 Long Wari Middle capacity 5G-enabled h
Slide 34: NTT DOCOMO Fast Expansion of 5G Area
NTT DOCOMO Fast Expansion of 5G Area Number of 5G base stations reached 13,000* and is expanding steadily Introduction of 5G Core Network and launch of standalone 5G services planned for the third quarter (Number of 5G base stations) 32,000 20,000 Population coverage** 13,000 approx.70% Population 7
Slide 35: NTT DOCOMO Smart Life Business: Principal Services
NTT DOCOMO Smart Life Business: Principal Services Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 34
Slide 36: Growth and Scope Expansion of Finance/Payment Business
NTT DOCOMO Growth and Scope Expansion of Finance/Payment Business Further grow finance/payment business by stimulating everyday use, and broaden scope of business by strengthening customer touchpoints and data utilization Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 35
Slide 37: Digitalization of Sales Channel
NTT DOCOMO Digitalization of Sales Channel Accelerate digital shift of sales channel and DX utilization responding to the needs of society (Support digitalization and DX of customers) Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 36
Slide 38: Termination of FOMA (3G) Service
NTT DOCOMO Termination of FOMA (3G) Service Terminate 3G service on Mar.31, 2026 ◆ Stop accepting ◆ Terminate service on Mar. 31, 2026 new applications for 3G after Mar.31 2020. ◆ Max.download speed of 1.7Gbps to be offered from Mar. 2020 Commercial launch in Mar. 2020 Copyright 2022 NIPPON TELEGR
Slide 39: Global Business
Global Business Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 38
Slide 40: Enhance competitiveness in global business (1/2)
Enhance competitiveness in global business (1/2) Strengthening Digital Business Consulting as One NTT From FY2021 to FY2023 NTT DATA Primary KPIs (for FY2023) ・Strengthen industry-specific consulting capabilities ・Form a Global One Team across six industries* to gain and develop the capabilities o
Slide 41: Enhance competitiveness in global business (2/2)
Enhance competitiveness in global business (2/2) Target Global Business with O-RAN/vRAN • In collaboration with partners (NEC, Fujitsu and others), from the end of FY2022, will expand global business in the RAN area, and will provide services for multi-vendor integration, management/intelligent co
Slide 42: Global Data Centers Service delivery schedule
Global Data Centers Service delivery schedule FY2020 FY2021 UK Malaysia US US US US UK US Germany 20+ Countries /regions Ashburn VA5 Hemel London 1 Cyberjaya 5 Hillsboro HI1 Chicago CH1 Silicon ValleySV1 Hempstead 4 Phoenix PH1 Berlin 2 Data Center Data Center Data Center Data Center Data Center Dat
Slide 43: Fixed-line Communication Business
Fixed-line Communication Business Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 42
Slide 44: Fixed Broadband Business FTTH Subscriptions
Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West） * 22.56 23.26 Reference: (millions subs) 21.66 FY2021E Breakdown of FTTH Subscriptions (millions subs) 21.08 FY2021E 20.05 20.53 Total FTTH Service: +0.70 Hikari Change from preceding Fiscal Year Collaborat
Slide 45: 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 46: Initiatives of a sustainable society, etc.
Initiatives of a sustainable society, etc. Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 45
Slide 47: Sustainability Charter
Sustainability Charter • Establishment of Sustainability Charter in November 2021 • Three themes and nine challenges are set. Key indicators (carbon neutrality, B2B2X revenue, percentage of new female managers) are planned to be reflected in executive compensation. Sustainability Charter Moving towa
Slide 48: NTT Green Innovation toward 2040
NTT Green Innovation toward 2040 80% Reduction in Greenhouse Gas Emissions 2030 (compared to FY2013) Mobile (NTT DOCOMO) Carbon-Neutral Data Centers 2040 Carbon-Neutral • Targets of the Above Reduction Objectives GHG Protocol: Scope 1 (our own direct greenhouse gas emissions) and Scope 2 (indirect e
Slide 49: Towards the Achievement of Carbon Neutrality
Towards the Achievement of Carbon Neutrality • Increased use of renewable energy: Reduce greenhouse gas emissions by 45%(1) 1 • Lower energy consumption with IOWN technologies: Reduce greenhouse gas 2 emissions by 45%(2) (8.60 million tons) (Millions of Tons) Outcome Reduce Energy 10% Savings Reduce
Slide 50: NTT's Contributions to Reducing Society's Environmental Impact
NTT’s Contributions to Reducing Society’s Environmental Impact Expanding adoption of IOWN technologies from the telecommunications field into other industries • Contribute to the reduction of greenhouse gases(1) in Japan and the world › Japan ⇒ Reductions: over 0.02 billion tons; Reduction Rate: o
Slide 51: Initiatives in the Energy Business
Initiatives in the Energy Business Target for Promotion of the Energy Business through NTT Anode Energy FY2025 Green Energy Generation Business ■ Strengthening development capabilities for renewable energy generation facilities Regional Grid Business ■ By leveraging NTT-owned assets, promote loc
Slide 52: Consolidation of Energy-Related Operations
Consolidation of Energy-Related Operations to Accelerate the Expansion of the Smart Energy Business NTT Group’s functions related to energy will be consolidated under “NTT Anode Energy” to achieve “NTT and Society’s carbon neutrality,” “local energy generation for local consumption” and “strengthe
Slide 53: Reinforcement of Corporate Governance
Reinforcement of Corporate Governance June • Introduced an executive officers system* (separation of the functions of managerial decision-making/supervision and business execution) 2020 • Increased the ratio of outside directors from 27% to 50% *Introduced an executive officers system into key group
Slide 54: Promote B2B2X Model
Promote B2B2X Model Number of B2B2X Projects: 124 (as of the end of December 2021) 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 3Q FY 2023 target Number of Projects 39 124 Copyrigh
Slide 55: Real Estate Business
Real Estate Business We are rolling out urban development plans with maximum use of resources such as nationwide exchange station buildings by collaborating with NTT Group's regional bases and building partnerships with other companies and organizations. Main group resources Telephone exchanges: app
Slide 56: R&D
R&D Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 55
Slide 57: IOWN initiative
IOWN initiative In order to utilize all types of information beyond the limits of conventional infrastructures, photonics technologies such as photonics-electronics convergence devices will be utilized everywhere from networks to terminals to realize a network and information processing infrastruc
Slide 58: What's IOWN?
What’s IOWN? Innovative Optical and Wireless Network (IOWN) Initiative Three main technology components of IOWN All-photonics network, which incorporates photonics-based technology at every level from networks to terminals Cognitive Foundation, which connects and controls everything Digital tw
Slide 59: IOWN Rollout Plan
【Legend】 Black: related to Communications Actions Green: related to Smart City PoC IOWN Rollout Plan ▲ Commercialization (planned) Blue: related to Maps/Cars • Exhibit Red: Photonics-electronics Convergence Technology Contribution to the realization of a sustainable society by IOWN as a game-c
Slide 60: Shareholder Returns
Shareholder Returns Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 59
Slide 61: Shareholder Returns
Shareholder Returns Dividend Policy : Basic policy is steady dividend increases Share Buybacks : Carry out buybacks flexibly to improve capital efficiency Dividends Increase in the year-end dividend of ¥5 over the forecast at the beginning of FY2021 to ¥60 Annual dividend per share forecast
Slide 62: Changes in Dividend
Changes in Dividend 115 105 （Yen） 100 85% Dividend per share 75 65% Payout Ratio 50 45% 40.9% 41.1% 42.3% 38.2% 37.0% 38.0% 37.6% 32.3% 33.4% 32.9% 12.5 25 31.2% 31.4% 30.7% 25% 27.5% 23.2% 19.5% 17.2% 12.3% 13.1% 0 5% • Dividend reflects the one hundred-for-one stock split effective on January 4, 2
Slide 63: Record of Share Buybacks
Record of Share Buybacks Approx. 4.7 Trillion Yen in Buybacks (Billions of yen) From From From From From From From From From From From Market/ Market/Gov’t From Market Market/ Market/ Market/ Gov’t Gov’t Gov’t Market Market Gov’t Market Market Gov’t Gov’t 600 539.4 *8 501.1 500 *5 *4 406.5 *7 400 38
Slide 64: Financial Data, etc.
Financial Data, etc. Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 63
Slide 65: NTT Group Formation
NTT Group Formation Voting rights to major subsidiaries (As of March 31, 2021) Operating revenue：¥4,725.2 billion 100% Operating income ：¥ 913.2 billion Mobile communications No. of employees ： 28,100 business No. of subsidiaries： 82 Operating revenue：¥3,207.4 billion 100% Operating income ：¥ 420.2
Slide 66: Trend in Consolidated Financial Results
Trend in Consolidated Financial Results 12.2 11.8 11.9 11.9 11.9 ■ Operating 11.8 11.5 11.4 11.1 Revenues （Trillion yen） 10.9 ■ Operating 1.69 1.67 1.75 1.54 1.64 1.64 1.56 Income 1.21 1.08 1.35 /Operating Profit （Trillion yen） 1.10 0.91 0.90 0.85 0.86 0.92 * 0.74 0.80 ■ Net Income 0.59 0.52 /Profit
Slide 67: Changes in Consolidated Operating Revenues
Changes in Consolidated Operating Revenues ：Mobile communications business ：Data communications business ：Regional communications business ：Other business ：Long distance and international （Billion yen） communications business 15,000 11,879.8 11,899.4 11,944.0 121,800 11,799.6 11,782.1 11,095.3 11,54
Slide 68: Changes in Consolidated Operating Income
Changes in Consolidated Operating Income ：Mobile communications business ：Data communications business ：Regional communications business ：Other business ：Long distance and international （Billion yen） communications business 2,000 1,745.0 1,693.8 1,671.4 1,642.8 1,641.1 1,539.8 1,562.2 1,500 1,348.1
Slide 69: Changes in CAPEX
Changes in CAPEX ：Mobile communications business ：Data communications business ：Regional communications business ：Other business ：Long distance and international （Billion yen） communications business 1,892.8 2,000 1,817.5 1,687.2 1,806.6 1,674.8 1,728.3 1,750.0 1,700.0 1,697.9 1,697.0 753.7 703.1 57
Slide 70: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） 12000.0 120.0% 10000.0 100.8% 100.0% Debt/Equity ratio* 8000.0 80.0% 6000.0 60.0% 49.3% 50.8% 47.1% 46.0% 51.9% 45.2% 43.9% 40.6% 4000.0 7624.3 40.0% 7250.0 4699.9 2000.0 20.0% 4200.0 4406.7 4163.3 4262.7 4088.2 3854.8 3971.6 0.0 0.0% FY2013 FY2014 FY20
Slide 71: Medium-Term Debt Levels
Medium-Term Debt Levels Medium-Term Debt Levels are Debt/EBITDA Ratio of Approx. 2x(About ¥6 trillion) Debt will be repaid while maintaining the same shareholder returns as before. Spin-Off of Securitizations Leasing Business 〔¥9.0 trillion〕 of ¥1.1 Receivables Debt trillion ¥1.0 Repayments ¥4.3
Slide 72: Changes in Number of Employees
Changes in Number of Employees ：Mobile communications business ：Data communications business ：Regional communications business ：Other business ：Long distance and international communications business 319,050 324,650 327,750 307,900 (296,500) (298,900) (319,500) (284,550) 28,100 29,100 300,000 284,55
Slide 73: Age Distribution of Employees at NTT East, NTT West and Outsourcing Companies
Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2021） 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 74: Changes in Personnel expenses (NTT East Group, NTT West Group)
Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 938.5 885.7 827.6 785.1 738.1 709.4 683.2 675.4 664.0 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021E * The scope of aggregation for each of the figures are not audited and are provided for refere
Slide 75: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Mobile Approx. FTTH Rakuten mobile Approx. market share 35.99M subs Approx. 2％ 197.85M subs SoftBank SoftBank market share 3,000万 Approx. 25％ 1.5億 KDDI KDDI market share 2,000万 NTT EAST and Approx. 31％ 1.0億 NTT WEST NTT DOCOMO 23.03M subs Approx. CATV
Slide 76: Trends in share buyback and cancellation
Trends in share buyback and cancellation Disposal of Acquired from Acquired from treasury stock Acquired Acquired government/ Cancellation government/ by from market Cancellation from market market market third-party allotment [Business and capital alliance with Excess over Toyota Motor Corp.] oblig
Slide 77: Changes of EPS and Outstanding Shares
Changes of EPS and Outstanding Shares EPS(right axis) (mil shares) （Yen） 5,500 306 EPS Growth (Average Annual Growth Rate +11.1%) 300 5,000 4,500 4,000 200 3,500 3,000 2,500 96 100 2,000 1,500 1,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E (Note1) Outstanding Shares : Average n
Slide 78: Your Value Partner
Your Value Partner