Ntt Inc · TSE:9432
Ntt — Investor Presentation (August 2020)
71 slides from Ntt's investor presentation, August 2020
Slide 1: IR Presentation
IR Presentation Ver.200805
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 FY2020.1Q and Fixed-line Communication Business FY2020 Forecast Local 5G utilization example 39 Status of Consolidated Results for FY2020.1Q 4 Migrate PSTN to IP Networks 40 Contributing Factors by Segment for FY2020.1Q 5 Other Businesses Overview of FY2
Slide 4: Overview of Consolidated Results for FY2020.1Q and FY2020 Forecast
Overview of Consolidated Results for FY2020.1Q and FY2020 Forecast Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: Status of Consolidated Results for FY2020.1Q
Status of Consolidated Results for FY2020.1Q Operating Revenues and Operating Income decreased as a result of the impact of COVID-19, among other factors Status of Consolidated Results Operating Revenues: ¥2,766.5B <(¥149.0B) [ (5.1%)] year-on-year > Operating Income: ¥497.6B < (¥7.6B) [ (1.5%
Slide 6: Contributing Factors by Segment for FY2020.1Q
Contributing Factors by Segment for FY2020.1Q (Billions of yen) Operating Revenues <Year-on-year:(149.0)> Mobile Regional Long distance and Data Other elimination of communications communications international communications business inter-segment business business communications business transactio
Slide 7: Overview of FY2020 Financial Forecasts
Overview of FY2020 Financial Forecasts The impact of COVID-19 is expected to be a decrease in Operating Revenues of approximately ¥350.0 billion and a decrease in Operating Income of approximately ¥70.0 billion, based on the following assumptions: In Japan, without taking into account any re-iss
Slide 8: FY2020 Forecast Summary
FY2020 Forecast Summary Plan for Consolidated Revenues and Income FY2019 FY2020 Year-on- COVID-19 Result Forecast Year Impact Operating (¥350.0B) Revenues ¥11,899.4B ¥11,500.0B (¥399.4B) Domestic: (¥180.0B) Overseas: (¥170.0B) Operating (¥70.0B) ¥1,562.2B ¥1,590.0B ＋¥27.8B Income Domestic: (¥45.0B)
Slide 9: FY2020 Financial Forecast Summary (by Company)
FY2020 Financial Forecast Summary (by Company) Operating Operating Revenues Year-on-Year Income Year-on-Year NTT DOCOMO ¥4,570.0B (¥81.3B) ¥880.0B ＋¥25.4B NTT East ¥1,689.0B ＋¥11.9B ¥260.0B ＋¥4.0B NTT West ¥1,438.0B ＋¥3.7B ¥148.0B ＋¥15.8B Long Distance and International ¥2,114.0B (¥91.8B) ¥124.0B ＋¥
Slide 10: FY2020 Forecast Summary by Segment
FY2020 Forecast Summary by Segment (Billions of yen) Operating Revenues <Year-on-year:(399.4)> Mobile Regional Long distance and Data Other elimination of communications communications international communications business inter-segment business business communications business transactions business
Slide 11: Initiatives in Response to COVID-19
Initiatives in Response to COVID-19 Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 10
Slide 12: Main Initiatives in Response to COVID-19 (1/3)
Main Initiatives in Response to COVID-19 (1/3) Improved treatment and environments to support telework-centered work styles • Rate of working from home* is 55％ (as of July 31, 2020) • Introduction of “Remote Work Allowance,” “Commuting Cost Reimbursements (Abolition of Commuter Pass),” and “Super
Slide 13: Main Initiatives in Response to COVID-19 (2/3)
Main Initiatives in Response to COVID-19 (2/3) Launch of new services for a remote world ～First wave of new service strategy (further enhancing the service lineup in the future)～ ① “NeWork” online workspace (NTT Com, launching for free* beginning at the end of August 2020) Provides safe and secu
Slide 14: Main Initiatives in Response to COVID-19 (3/3)
Main Initiatives in Response to COVID-19 (3/3) ④ “Smart Government Platform NaNaTsu” (NTT Data, launching free trials beginning in August 2020, with planned commercial launch beginning in October 2020) Automation of over 100 government work processes within the fiscal year through shared RPA/AI-OC
Slide 15: NTT Group Medium-Term Management Strategy
NTT Group Medium-Term Management Strategy Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 14
Slide 16: 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 320yen (in fixed-line/mobile access networks) （vs. FY2017） ※2 212 yen ROIC 8％ F
Slide 17: 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 FY 2017 FY 2018 FY 2019 FY 2023 Target /share buybacks 220yen 231yen ▲220 212yen *2 billion yen ▲500 billion yen FY 2017 FY 2018 FY 2019 FY 2023 Target Establish eff
Slide 18: Overview of Medium-Term Management Strategy Initiatives
Overview of Medium-Term Management Strategy Initiatives Roll Out 5th- • Completed buildout of stations to all prefectures and Generation administrative divisions in Japan (as of June 30, 2020) Wireless System • In collaboration with NEC, will achieve a “new made-in- Enhance and Japan” by driving ope
Slide 19: Global Business
Global Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 18
Slide 20: Global Business Overview
Global Business Overview Overseas Sales/Overseas Operating Income Margin* Revenue $25B 7.0％ Operating profit Margin $19.5B $18.4B $18.9B 2.4％ Operating Profit 3.1％ 3.2％ $1.75B** $0.56B $0.60B $0.46B FY 2017 FY 2018 FY 2019 FY 2023 Target * Including results from the global holding company, its subsi
Slide 21: Enhance Competitiveness in Global Business (1)
Enhance Competitiveness in Global Business (1) We established a new global holding company under NTT Corporation by the third quarter of the fiscal year ending March 31, 2019. And NTT Communications, Dimension Data, NTT DATA, NTT Security, and NTTi3 will be transferred to NTT, Inc. and will alig
Slide 22: Enhance Competitiveness in Global Business (2)
Enhance Competitiveness in Global Business (2) ”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 Fi
Slide 23: Structural Reform of NTT Ltd.
Structural Reform of NTT Ltd. Promoted integration at NTT Ltd. since its establishment in July 2019 Promoting structural reforms to realize business shift to attractive markets centered on managed IT services • Streamlining business operations - Optimization by consolidating operations and overl
Slide 24: 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 25: Smart City Project (Malaysia)
Smart City Project (Malaysia) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24
Slide 26: Mobile Communication Business
Mobile Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25
Slide 27: NTT DOCOMO FY2020 Principal Actions
NTT DOCOMO FY2020 Principal Actions Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26
Slide 28: NTT DOCOMO New Rate Plans (1)
NTT DOCOMO New Rate Plans (1) To start from Jun. 1, 2019 Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27
Slide 29: NTT DOCOMO New Rate Plans (2) Comparison with Existing Rates
NTT DOCOMO New Rate Plans (2) Comparison with Existing Rates Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28
Slide 30: NTT DOCOMO New Rate Plans (3)
NTT DOCOMO New Rate Plans (3) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29
Slide 31: NTT DOCOMO Finance/Payment Services
NTT DOCOMO Finance/Payment Services Finance/Payment “d CARD” members Transactions handled Topped 13 million (Billions of yen) (Million members) 1,500.0 13.18 Up 32％ 11.71 Up 13% 1,130.0 Up 26％ d CARD transactions 1,140.0 Up 25% d CARD GOLD 910.0 5.62 7.04 FY19/1Q FY20/1Q FY19/1Q FY20/1Q ◆ The amount
Slide 32: NTT DOCOMO Actions for 5G
NTT DOCOMO Actions for 5G Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 31
Slide 33: NTT DOCOMO 5G Subscriptions/Coverage
NTT DOCOMO 5G Subscriptions/Coverage Making steady progress toward full-year target 5G subscriptions 5G coverage (Subs) (Cities) Release of 500 cities including all government- standard models 2.5 mil designated cities 5G service started in 47 prefectures 92 cities 0.15 mil FY20/1Q ・・・ FY20 (target)
Slide 34: NTT DOCOMO 5G Services
NTT DOCOMO 5G Services Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 33
Slide 35: NTT DOCOMO 5G Solutions (1)
NTT DOCOMO 5G Solutions (1) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 34
Slide 36: NTT DOCOMO 5G Solutions (2)
NTT DOCOMO 5G Solutions (2) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 35
Slide 37: NTT DOCOMO Termination of FOMA (3G) Service
NTT DOCOMO Termination of FOMA (3G) Service Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 36
Slide 38: NTT DOCOMO Cost Efficiency Improvement
NTT DOCOMO Cost Efficiency Improvement Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 37
Slide 39: Fixed-line Communication Business
Fixed-line Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 38
Slide 40: Local 5G utilization example
Local 5G utilization example Realizing the improvement of the manufacturing site by remote monitoring, etc. by utilizing local 5G, eliminates labor shortage and improves productivity .(Collaboration agreement with Yamaguchi Prefecture and joint experimental agreement with Hibiki Seiki Co., Ltd. Ap
Slide 41: 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 42: Other Businesses
Other Businesses Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 41
Slide 43: Promote B2B2X Model
Promote B2B2X Model Number of B2B2X Projects: 74 (as of the end of June. 2020) 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
Slide 44: 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 45: Business and Capital Alliance Agreement with Toyota
Business and Capital Alliance Agreement with Toyota Partnership for the realization of a smart city Basic concept of smart city platform • Social infrastructure for urban development, cooperation of urban functions, and sophistication • A platform that continues to evolve • Providing API to service
Slide 46: Sustainable Cities Partnership Program
Sustainable Cities Partnership Program -Future Urban Solutions initiative- Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 45
Slide 47: Create New Lines of Business
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 48: Create New Lines of Business (Smart Energy)
Create New Lines of 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 2019) Launched practica
Slide 49: Create New Lines of Business (Medical Science)
Create New Lines of Business Medical Science Business Healthcare Management Support through Big Data • Established “NTT Life Science” (February 3, 2020) Launched the “Genovision” corporate wellness support service at April, 2020, and about 2000 NTT Group employees took the genetic test (at August
Slide 50: Shareholder Returns/ ESG
Shareholder Returns/ ESG Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 49
Slide 51: 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 50
Slide 52: Changes in Dividend
Changes in Dividend （Yen） 100 100 95 85% 75 Payout Ratio 65% 50 45% 43.2% 40.9% 41.1% 38.2% 37.2% 38.0% 12.5 33.4% 25 32.3% 31.2% 31.4% 30.7% 32.9% 27.5% 25% 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-F
Slide 53: 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/ From Gov’t Market/ Market/ Gov’t Market/Gov’t Market Gov’t Market Market / Gov’t Market Gov’t Market Gov’t (Billions of yen) 600 539.4 501.1 *7 500 406.5*4 400 381.7 374.1 *6 366.5 3
Slide 54: 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 3,699 96 3,000 100 2,000 50 1,000 0 2010 2011 2012 2013 201
Slide 55: Promote ESG Management (1)
Promote ESG Management (1) 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 reinfor
Slide 56: Promote ESG Management (2)
Promote ESG Management (2) Environment and Energy Vision: Zero Environmental Impact Contribute to the reduction of the environmental impact of customers, companies and society Promotion of renewable energy • Aim To increase the proportion of our renewable energy usage to 30% or higher by FY2030 •
Slide 57: Promote ESG Management (3)
Promote ESG Management (3) Strengthening of corporate governance (Adoption an executive officer system , Independent outside director ratio 50%) In order to further strengthen our governance, which contributes to increasing corporate value, we have decided to adopt an executive officer system and
Slide 58: Financial Data, etc.
Financial Data, etc. Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 57
Slide 59: NTT Group Formation
NTT Group Formation Voting rights to major subsidiaries (As of March 31, 2020) Operating revenue：¥4,651.3 billion 66.2% Operating income ：¥ 854.7 billion Mobile communications No. of employees ： 27,500 business No. of subsidiaries： 97 Operating revenue：¥3,079.9 billion 100% Operating income ：¥ 388.3
Slide 60: Trend in Consolidated Financial Results
Trend in Consolidated Financial Results 11.8 11.9 11.9 ■ Operating 11.8 11.5 11.5 11.4 Revenues 11.1 （Trillion yen） 10.9 ■ Operating * 1.64 1.64 1.69 1.56 1.59 1.54 Income 1.21 1.35 /Operating 1.08 Profit （Trillion yen） 0.91 0.80 0.90 0.74 0.85 0.86 0.86 ■ Net Income 0.59 * 0.52 /Profit （Trillion ye
Slide 61: 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 11,899.4 11,500.0 11,541.0 11,391.0 10,9
Slide 62: 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 1,590.0 1,539.8 1,562.2 1,500 1,348.1 1,213.7
Slide 63: 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 1,892.8 2,000 1,817.5 1,687.2 1,806.6 1,700.0 1,674.8 1,697.0 1,730.0 1,697.9 753.7 703.1 572.8 661.
Slide 64: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） Debt/Equity ratio* 6000.0 60.0% 50.8% 49.3% 51.9% 47.1% 46.0% 45.2% 43.9% 40.6% 4000.0 40.0% 4699.9 4406.7 4262.7 2000.0 4200.0 4163.3 4088.2 20.0% 3854.8 3971.6 3400.0 0.0 0.0% FY2013 FY2014 FY2015 FY2016 FY2017 FY2017 FY2018 FY2019 FY2020E [IFRS] [IFR
Slide 65: 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 305,550 296,500 (327,900) 284,550 (319,050) 300,000 275,650 28,200 268,450 (284,550) (307,900) 27,50
Slide 66: 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, 2020） 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 67: Changes in Personnel expenses
Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 938.5 885.7 827.6 785.1 738.1 709.4 683.0 673.0 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020E * The scope of aggregation for each of the figures are not audited and are provided for reference only. (24
Slide 68: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Mobile Approx. FTTH Approx. 184.80M subs 33.1M subs 150M 30M SoftBank SoftBank market share Approx. 25％ 100M KDDI 20M NTT EAST and KDDI market share Approx. 32％ NTT WEST Approx. 22.0M subs 50M NTT DOCOMO 10M CATV Approx. Approx. DSL Approx. 6.7M subs 8
Slide 69: Fixed Broadband Business FTTH Subscriptions
Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West） * 22.31 Reference: (millions subs) 21.66 FY2019 Breakdown of FTTH Subscriptions (millions subs) 21.08 20.05 20.53 FY2020 Total FTTH Service: +0.65 Hikari Change from preceding Fiscal Year 8.74 12.69 13.89 C
Slide 70: Share Buybacks and Cancellation
Share Buybacks and Cancellation ＜＞：share holding ratio Buyback from Buyback from Buyback from Disposal of treasury Gov’t and Cancellation Gov’t and Cancellation stock by way of Gov’t and third-party Market Market Market allotment Excess Holdings 118mil. shares Excess Holdings 98mil. shares Treasury
Slide 71: Your Value Partner
Your Value Partner
Nippon Telegraph and Telephone Corporation (NTT) — Investor Presentation (August 2020) on 6ix