Ntt Inc · TSE:9432

Ntt — Investor Presentation (March 2017)

61 slides from Ntt's investor presentation, March 2017

  1. Slide 1: IR Presentation March, 2017

    ©) NTT IR Presentation March, 2017

  2. 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

  3. Slide 3: Towards the Next Stage 2.0

    Towards the Next Stage 2.0 (Formulated in May 2015, Revised Financial Targets in May 2016)

  4. 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

  5. Slide 5: Progress toward Financial Targets (FY2018/03)

    Progress toward Financial Targets (FY2018/03) Results Medium Term Forecasts Targets (FY2017/03) (FY2018/03) EPS Growth ¥376 At least ¥400 Original target at the announcement of “2.0”(May 2015): At least ¥350 (¥1.4 trillion in consolidated profits) Streamlining Capital Investment ¥150 billion At leas

  6. Slide 6: EPS Growth

    EPS Growth At least 400 yen +91.1% Revised Original target at the 376 announcement of “2.0”(May 2015) yen 350 At least yen 350 yen 237 183 yen Profit Growth yen Share Buybacks FY 2012/03 FY 2015/03 FY 2016/03 FY 2017/03 FY 2018/03 (Forecast) (Target) * EPS is adjusted according to the two-for-one st

  7. Slide 7: Overseas Sales/Operating Income

    Overseas Sales/Operating Income Sales $22.0B Sales Sales $17.6B Sales $15.6B $15.0B Operating Income* $1.5B Operating Operating Operating Income* Income* Income* $0.67B $0.69B $0.9B FY 2015/03 FY 2016/03 FY 2017/03 FY 2018/03 (Forecast) (Target) * Operating Income excludes M&A-related temporary expe

  8. Slide 8: Progress of Global Business Initiatives

    Progress of Global Business Initiatives Accomplishments of Working Group Initiatives  Enhanced sales capabilities to promote customers’ digital transformation Sales/Marketing Organized GTM* Achieved record TCV** Established sales account support team of cross-selling collaboration platform across N

  9. Slide 9: Streamlining Capital Investment

    Streamlining Capital Investment Optimize Domestic Improve Capex to Sales Network Businesses 18.1％ Target of 1.0: 15% 14.2％ 1,910 billion yen 1,700 Reduction of at least billion yen 1,610 billion yen 200 billion yen (Consolidated Financials*) 1,400 Capital billion yen 1,300 billion yen 1,250 Investme

  10. Slide 10: Cost Reductions

    Cost Reductions FY 2016/03 FY 2017/03(Forecast) FY 2018/03(Target) Cost Reductions* (in fixed-line/mobile Original target at the announcement of networks) “2.0”(May 2015) At least ▲414 ▲650 ▲600 billion yen billion yen billion yen (compared to (compared to FY 2015/03) FY 2015/03) Revised At least ▲8

  11. Slide 11: Optimize Domestic Network Businesses

    Optimize Domestic Network Businesses Streamlining Capital Investment At least 200 billion yen (Domestic network business, compared to FY 2015/03) Improve efficiency of facility use Reduce procurement costs Improve and optimize IT systems Cost Reductions At least 800 billion yen* (in fixed-line/mobil

  12. Slide 12: For Sustainable Growth

    For Sustainable Growth Make good use of ”2020” and the Government’s “Vitalization of Local Economies” initiative as opportunities to accelerate the migration to B2B2X Strengthen Collaboration Platform (security, loT, network virtualization, etc.) Promote partnerships with a wide range of business en

  13. Slide 13: Progress of B2B2X Initiatives

    Progress of B2B2X Initiatives April 2015 June 2015 July 2016 Optimization of Manufacturing/Production Sept. 2015 July 2016 DAZN Processes with IoT Cooperation on Oct. 2015 Smart Stadium Project Sept. 2016 Safe Driving Control Solutions Integrating April 2016 Biometric Information Integration of Kabu

  14. Slide 14: 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 New Service consumers Tools with Resolve Group Partners Providers Soc

  15. Slide 15: Financial Results for the FY 2017/03 3Q and Financial Forecasts

    Financial Results for the FY 2017/03 3Q and Financial Forecasts for the FY 2017/03

  16. Slide 16: FY 2017/03 3Q Highlights (U.S. GAAP)

    FY 2017/03 3Q Highlights (U.S. GAAP) Consolidated Results of Operations Operating Revenues ： ¥8,360.5 billion (¥134.9 billion [1.6%] decrease year-on-year) Operating Income ： ¥1,318.6 billion (¥192.0 billion [17.0%] increase year-on-year) Net Income *1 ： ¥668.7 billion (¥64.7 billion [10.7%] incr

  17. Slide 17: FY 2017/03 3Q Contributing Factors by Segment

    FY 2017/03 3Q Contributing Factors by Segment (U.S. GAAP) Regional communications business: Operating income increased due to a reduction in the level of decreasing revenues from fixed voice services and cost efficiency improvement, among other things. Long distance and international communications

  18. Slide 18: FY2017/03 Consolidated Forecasts (U.S. GAAP)

    FY2017/03 Consolidated Forecasts (U.S. GAAP) Consolidated Revenues and Income Plan Operating Revenues ： ¥11,410.0 billion (¥40.0 billion decrease from initial forecast) Operating Income ： ¥1,470.0 billion (¥40.0 billion increase from initial forecast) Net Income* ： ¥770.0 billion (¥20.0 billion i

  19. Slide 19: Changes in Anticipation of the Adoption of IFRS

    Changes in Anticipation of the Adoption of IFRS NTT executed the following changes in anticipation of the planned adoption of IFRS (beginning from the fiscal year ending March 31, 2019) Change in Depreciation Method  In light of the globalization of its business operations and its consideration of

  20. Slide 20: Appendix

    Appendix

  21. Slide 21: Changes in Dividend

    Changes in Dividend Increased by 4.8 Times （yen） 120 120 100% 100 80% Dividends per share 80 60% 60 38.2% 37.2% 38.0% 32.3% 33.4% 31.4% 31.9% 40% 31.2% 40 27.5% 25 23.0% 19.5% 20% 20 17.1% 12.3% 13.0% 0 0% （Fiscal year ended/ing March 31） * Dividend is adjusted according to the two-for-one stock spl

  22. Slide 22: Record of Share Buybacks

    Record of Share Buybacks Over 3 Trillion Yen in Buybacks (Billions of yen) From From From From From From From From Market/ Market/ From Gov’t From Market Market/ Gov’t Gov’t Gov’t Gov’t Market Market / Gov’t Market Gov’t 600 6,000 539.4 417.4 406.5*3 (max) 400 366.5 381.7 338.1*4 345.0*5 (as of the

  23. Slide 23: NTT East and West's business operation plans for 2018/3

    NTT East and West’s business operation plans for 2018/3 (submitted for approval on March 1, 2017) NTT East NTT West (Billions of yen) FY2017/3 FY2018/3 Change FY2017/3 FY2018/3 Change Item forecast Plan from forecast Plan from previous FY previous FY Operating revenues 1,659.0 1,627.0 (32.0) 1,481.0

  24. Slide 24: Global Cloud Business Promotion System

    Global Cloud Business Promotion System 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 Applications Solutions Service Layers Man

  25. Slide 25: 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) - - Network Leader - Integration Network - - - Imple- mentation - - Apps (ERP) AMO - - Attacker Public - Cloud Hosted Private - - Security - - nd Legend： Global capability Top Tier 2 T

  26. Slide 26: Our Strengths in Global Cloud Services

    Our Strengths in Global Cloud Services Network Scale： ・ Provides service in 196 countries/areas ・ World-class in Global IP backbone traffic (Source: Dyn Corporation) Quality： ・ Lowest network latency between Japan / US / major countries in Asia Data Center Scale： ・ World-class in total floor space (

  27. Slide 27: Expansion of Cross-Selling (Aggregate Contract Value)

    Expansion of Cross-Selling (Aggregate Contract Value) Expansion of Aggregate contract value of Cross- Global Account Management Selling reached approx. 1.6 billion USD Manufacturing Public (Motor vehicle) Total IT solution triggered by Cloud Service Insurance Finance Healthcare 1,190 1,625 North Ame

  28. Slide 28: 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 HM Treasury ANA Texas Department of Transportation  Implementation and operation of  Cloud, Business platform construction  Cloud solution, Application

  29. Slide 29: Revenue by Region

    Revenue by Region  NTT Global Business (USD) (FY2016/03) Total AMERICAS EMEA APAC (EBITA/Rev 4.4%) 34% 29% 2.2B 4.5B 37% 0.4B 10% 1.9B 11.1B 3.2B 4.2B 3.7B 71% 63% 66% 90%  ICT Market 1,610B 940B (60%) 490B (30%) 180B (10%) Legend Application 67% 33% 54% 46% 47% 53% IT Infrastructure *Source: Crea

  30. Slide 30: Global ICT services market (enterprise customers)

    Global ICT services market (enterprise customers) (USD B) $1,770B 1,800 5 % Growth per annum New Business 1,600 BPO $1,460B 1,400 Traditional apps 1,200 SI for traditional apps 1,000 Cloud SaaS 10% of market size 800 Cloud SI IaaS/PaaS CAGR 23% 600 IT infrastructure Network service 400 200 ITO/AMO 0

  31. Slide 31: Smart Stadium powered by Digital Marketing

    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 Local Event Video 3D 3D, multi-angle, player- Community Or

  32. Slide 32: The Smartification of World Sports

    The Smartification of World Sports The Open Tour de France Indy 500 (U.K.) (France) (U.S.) Racer position, speed, and time Ball flight distance and trajectory; Driving status and racers’ behind; combination of data and Overseas Tweet map (worldwide) vital signs video ※ At Six Day London (a popular P

  33. Slide 33: Tourism・Transportation・Trade×ICT

    Tourism・Transportation・Trade×ICT Digital Marketing ～Multilingual Support,Tourist Information, Navigation, Digital Coupons, Wi-Fi One Certification, Etc.～ Vitalization of Local Communities Increase Tourists’ Satisfaction and Economies CASE：Fukuoka City to Whole Kyushu Area Proposed Excursion Route Ba

  34. Slide 34: "Digital Trust"

    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

  35. Slide 35: Toward Efficient and Sustainable Operations

    Toward Efficient and Sustainable Operations Effective Usage of Optimize Domestic Assets/facilities Network Businesses Improve effective usage of network infrastructure Cross-utilization of services and functions Improvement of ROA through streamlining and reallocating facilities Streamlining Capital

  36. Slide 36: NTT DOCOMO's Billing Plan "Kake-hodai & Pake-aeru"

    NTT DOCOMO’s Billing Plan “Kake-hodai & Pake-aeru” Billing Plan “Kake-hodai & Pake-aeru” （from June, 2014） Basic Concept Shifting competition focus from “switching users” to “customer retention” “Flat rate” for declining voice usage, “measured rate” for increasing data usage Primary feature Subscrip

  37. Slide 37: NTT DOCOMO: Increased Customer Returns

    NTT DOCOMO : Increased Customer Returns Expanded to 150.0 billion (Over a 12-month period) IR Presentation (March, 2017) ‐36‐ Copyright©2017 Nippon Telegraph and Telephone Corporation

  38. 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 Partner’s by single package own service Improve Flet’s Hikari Wholesale (FTTH) of FTTH FTTH “Creation of c

  39. Slide 39: "docomo Hikari" Subscriptions

    “docomo Hikari” Subscriptions Topped 3 million on Jan. 14, 2017 (Millions subs) 2.97 1.09 FY 2016/03 '15.3Q 3Q FY 2017/03 '16.3Q 3Q IR Presentation (March, 2017) ‐38‐ Copyright©2017 Nippon Telegraph and Telephone Corporation

  40. Slide 40: Billing Table of docomo Hikari Pack

    Billing Table of docomo Hikari Pack Monthly Plan Fee*1 *2 Kake-hodai Plan (Smartphone/Tablet) ¥2,700 Basic Monthly Charges Kake- Kake-hodai Plan (Feature Phone) ¥2,200 hodai Plan Kake-hodai Light Plan (Voice) (Smartphone/Tablet) *3 ¥1,700 Kake-hodai Light Plan (Feature Phone)*3 ¥1,200 Data Plan (Sma

  41. Slide 41: The World Envisaged by 5G

    The World Envisaged by 5G IR Presentation (March, 2017) ‐40‐ Copyright©2017 Nippon Telegraph and Telephone Corporation

  42. Slide 42: Operating Income of Docomo's Smart Life Business & Other Businesses

    Operating Income of Docomo’s Smart Life Business & Other Businesses Steadily progressing (Billions of yen) 120.0 98.2 69.2 FY 2016/03 '15.3Q（累計） FY 2017/03 '16.3Q（累計） FY 16年度 2017/03 E Apr. to Dec. Apr. to Dec. IR Presentation (March, 2017) ‐41‐ Copyright©2017 Nippon Telegraph and Telephone Corporat

  43. Slide 43: The Current State of Fixed-Line Telephone Services and Going Forward

    The Current State of Fixed-Line Telephone Services and Going Forward Migration to IP Networks Continue providing currently used fixed-line telephone services* by gradually migrating from PSTN to IP networks *Analog telephone services and INS-Net (voice) provided via PSTN (Public Switched Telephone N

  44. Slide 44: Considerations to maintain fixed-line telephone services

    The Current State of Fixed-Line Telephone Services and Going Forward Considerations to maintain fixed-line telephone services In order to maintain fixed-line telephone services while minimizing the burden on customers, after migration IP networks in principle will not be equipped with the PSTN-speci

  45. Slide 45: Migration of PSTN-Specific Functions to IP Networks

    The Current State of Fixed-Line Telephone Services and Going Forward [Appendix] Migration of PSTN-Specific Functions to IP Networks Inter-connectivity functions Hub function Direct interconnection between (Interconnection through NTT East/NTT West PSTN) major carriers Complex inter-carrier access ch

  46. Slide 46: Migration from PSTN to IP Networks

    The Current State of Fixed-Line Telephone Services and Going Forward [Appendix] Reference: Migration from PSTN to IP Networks Current system Post-migration Other Other carriers carriers Migrate tandem/signal ◎ PSTN interconnection transfer switches to IP IP interconnection◎ Continue use of copper PS

  47. Slide 47: Broadband Access Services in Japan

    Broadband Access Services in Japan Mobile Fixed Mobile Approx. 30M FTTH Approx. 159.5M subs 150M 28.7M subs SoftBank SoftBank market share Approx. 25％ 20M 100M KDDI NTTEAST and KDDI market share Approx. 30％ NTT WEST Approx. 19.7M subs 50M NTT DOCOMO 10M Approx. CATV Approx. DSL 6.8M subs 72.9M subs

  48. Slide 48: Mobile Broadband Business

    Mobile Broadband Business DOCOMO Mobile telecommunications services Subscriptions (Millions subs) Total smartphone/tablet users (Millions subs) Churn rate (%) 72.94 73.59 70.96 71.61 68.49 69.60 66.60 67.53 64.30 65.27 63.57 32.91 33.44 34.09 34.93 30.75 31.63 28.75 29.67 26.36 27.33 25.29 0.60% 0.5

  49. Slide 49: Aggregate ARPU of Mobile Broadband Business

    Aggregate ARPU of Mobile Broadband Business ：Voice ARPU ：Packet ARPU ：”docomo Hikari” ARPU ：Impact of discount programs* （Yen） 4,420 4,450 4,430 4,260 4,330 4,190 4,230 4,210 4,110 4,040 4,030 4,010 70 110 150 190 230 210 40 20 3,250 3,260 3,280 3,320 3,340 3,310 3,320 3,270 3,200 3,140 3,160 3,210

  50. Slide 50: Fixed Broadband Business FTTH Subscriptions

    Fixed Broadband Business FTTH Subscriptions * FTTH Subscriptions (Sum of NTT East and NTT West） 1,996 1,926 <Reference: Breakdown of FTTH Subscriptions> 1,872 Hikari (ten thousands) (ten thousands subs) 27 1,805 Collaboration 2017/3E 469 1,730 Model Total FTTH Service: 1,656 854 Change from precedin

  51. Slide 51: Penetration of Video Services

    Penetration of Video Services Million subscriptions 4.48 4.52 Hikari TV＋FLET’S TV 4.36 3.98 Multi-Device 3.46 Tuner TV TV with New STB for Smart TV 2.87 (STB) Built-in tuner 3.01 3.05 3.06 2.82 2.01 Smartphones, tablet PCs PC/NotePC 2.45 2.00 Hikari TV Car Navigation 1.41 Multi-Service music video T

  52. Slide 52: NTT Group Overview

    NTT Group Overview • Operating revenues (consolidated):11,541.0 billion yen • Operating income (consolidated) : 1,348.1 billion yen • No. of employees : 241,450 • No. of subsidiary companies : 907 * Percentage figures show the percentage of voting rights (March 31, 2016) * * * * 100％ 100％ 65.7％ 54.2

  53. Slide 53: Trend in Consolidated Financial Results

    Trend in Consolidated Financial Results 11.5 11.4 10.9 11.1 10.7 ■ Operating 10.5 Revenues （Trillion yen） 1.47 1.35 1.22 1.20 1.21 1.08 ■ Operating Income （Trillion yen） 0.74 0.77 0.59 0.52 0.52 ■ Net Income 0.47 （Trillion yen） 376 350 255 237 ■ EPS* 215 183 （yen） Fiscal year ended/ing 2012/03 2013/

  54. Slide 54: Changes in Consolidated Operating Revenues

    Changes in Consolidated Operating Revenues ：Regional communications business ：Data communications business ：Long distance and international ：Other business Consolidated communications business Operating Revenues （billion yen） ：Mobile communications business 11,541.0 11,410.0 10,925.2 11,095.3 10,700

  55. Slide 55: Changes in Consolidated Operating Income

    Changes in Consolidated Operating Income ：Regional communications business ：Data communications business ：Long distance and international ：Other business Consolidated communications business Operating Income ：Mobile communications business （billion yen） 1,470.0 1,348.1 1,223.0 1,202.0 1,213.7 1,084.

  56. Slide 56: Changes in CAPEX

    Changes in CAPEX （Billions of yen） ：Regional communications business ：Data communications business ：Long distance and international ：Other business communications business ：Mobile communications business 1,946.6 1,970.0 1,892.8 1,817.5 1,687.2 1,710.0 (Fiscal year ended/ing March 31) * CAPEX excludi

  57. Slide 57: Changes in Interest-bearing Debt

    Changes in Interest-bearing Debt Interest-bearing Debt （billion yen） Debt/Equity ratio* (Fiscal year ended/ing March 31) * Debt Equity ratio = Interest-bearing debt / Shareholders’ equity x 100 IR Presentation (March, 2017) ‐56‐ Copyright©2017 Nippon Telegraph and Telephone Corporation

  58. Slide 58: Changes in Number of Employees

    Changes in Number of Employees ：Regional communications business ：Data communications business ：Long distance and international ：Other business communications business ：Mobile communications business Consolidated No. of employees 271,600 239,750 241,600 241,450 224,250 227,150 （End of Year/month） IR

  59. Slide 59: Age Distribution of Employees

    Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2016） Number of Employees 20 30 40 50 60 65 Age * Figures for East Outsourcing Companies include employees from the consolidated regional outsourcing companies (NTT EAST-MINAMIKANTO and others), NTT-ME a

  60. Slide 60: Share Buybacks and Cancellation

    Share Buybacks and Cancellation Buyback Buyback from Buyback Cancellation Cancellation from market Gov’t and Market from Gov’t ＜＞：share holding ratio Treasury Stocks Treasury Stocks ＜14.1％＞ ＜0.0％＞ 199mil. Cancellation Excess shares 276mil. 373 mil. shares Holdings Excess shares 124mil. shares Gov’t

  61. Slide 61: Next Value Partner

    Next Value Partner for Transformation of Business models and Lifestyle by Trusted Solutions of Global, Secure, End-to-end, and Full-line ICT services

NTT — Investor Presentation (March 2017) on 6ix