Ntt Inc · TSE:9432
Ntt — Investor Presentation (November 2021)
73 slides from Ntt's investor presentation, November 2021
Slide 1: IR Presentation
IR Presentation Ver.2201
Slide 2: Forward-looking statements notice
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 Six Months Ended September 30, 2021 Other Businesses 2021.2Q Financial Results – Key Points 4 Promote B2B2X Model 41 Status of Consolidated Results for FY2021.2Q 5 Real Estate Business 42 Operating Revenue and Operating Income Trends 6 Energy Busines
Slide 4: Overview of Consolidated Results for the Six Months Ended September 30, 2021
Overview of Consolidated Results for the Six Months Ended September 30, 2021 Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: 2021.2Q Financial Results – Key Points
2021.2Q Financial Results – Key Points • In FY2021 Q2, both revenues and income increased. Operating income shifted from a decrease in FY2021 Q1 to an increase, mainly as a result of the decrease in income at NTT DOCOMO being covered by increases in income at NTT DATA, NTT East and NTT West, among o
Slide 6: Status of Consolidated Results for FY2021.2Q
Status of Consolidated Results for FY2021.2Q ◼ Year-on-year, both operating revenues and operating income increased, and profit set a new record high level ◼ Both revenues and income exceeded expectations Status of Consolidated Results ⚫ Operating Revenues: ¥5,887.6B <+¥176.3B [+3.1%] year-on-year>
Slide 7: 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 8: Contributing Factors by Segment for FY2021.2Q
Contributing Factors by Segment for FY2021.2Q (Billions of yen) Operating Revenues <Year-on-year:＋176.3> Regional Long Distance and Mobile Data Other Elimination of Communications International Communications Communications Business Inter-Segment Business Communications Business Business Transaction
Slide 9: NTT Group Medium-Term Management Strategy
NTT Group Medium-Term Management Strategy Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 8
Slide 10: Directionality of Refinement of the Medium-Term Management Strategy
Directionality of Refinement of the Medium-Term Management Strategy FY2023 Transformation to a New Cost Reductions Management Style over ¥200.0 (Further Promotion of DX) billion FY2023 Achieving Effect of Synergies in Profit Increase EPS of the Newly Formed of ¥370 in DOCOMO Group ¥100.0 billion FY2
Slide 11: 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 COVID-19 and Suitable for a Decentralized of a Sustainable Society Post-COVID-19 Network Society Advancement of Enhance Domesti
Slide 12: 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 ② DOCOMO Group Enhance • Promotion of the IOWN development/rollout plan Domestic/Global • Enhance competitiveness in global business Business • Promot
Slide 13: 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 Strengthening global business business Strengthening IT Stren
Slide 14: Refinement of Medium-Term Financial Targets
Refinement of Medium-Term Financial Targets (Reference) Target Current Target New Target FY2021 Plan EPS Approx. ¥320 ¥370 ¥302 (FY2023) (FY2023) Overseas (1), (2) ＄25B ー ＄19B Sales (FY2023) (FY2023) Overseas (1) Operating Income 7% 7% 6% (FY2023) (FY2023) Margin Cost Reductions (3) At least At leas
Slide 15: Transition of Medium-Term Targets
Transition of Medium-Term Targets *1 EPS Growth Cost Reductions* （in fixed-line/mobile access networks） Oct. 2021 Profit expansion Refinement /share buybacks 370yen FY 2017 FY 2018 FY 2019 FY 2020 FY 2021E FY 2023 Target 302yen ▲220 billion yen 248yen 220yen 231yen ▲500 212yen *2 billion yen ▲670 bi
Slide 16: New DOCOMO Group Medium-Term Strategy
New DOCOMO Group Medium-Term Strategy Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 15
Slide 17: 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 18: 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 19: 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 2021 N
Slide 20: New DOCOMO Group Medium-Term Strategy④
New DOCOMO Group Medium-Term Strategy④ Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 19
Slide 21: Transformation to a New Management Style
Transformation to a New Management Style Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 20
Slide 22: 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 Systems/ General Business/ DX Work Improvements Promotion of “work-in-life” (health management) Open, global and innovative business operations
Slide 23: 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 Development of an IT environment that enables employees to work from Completion in FY2022(1) anywhere Completion in FY2023(2) (1) Staff and sales teams. (2) All.
Slide 24: 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 Re-examination of the office environment (increase the amount of s
Slide 25: Transformation to a New Management Style (4/4)
Transformation to a New Management Style (4/4) ◼ 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 26: Mobile Communication Business
Mobile Communication Business Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25
Slide 27: 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 U15 Hajimete Sumaho Plan capacity Gigaho Premier U30 Long Wari Middle capacity 5G-enabled h
Slide 28: 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 29: NTT DOCOMO Smart Life Business: Principal Services
NTT DOCOMO Smart Life Business: Principal Services Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28
Slide 30: 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 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29
Slide 31: NTT DOCOMO 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 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 30
Slide 32: 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 2021 NIPPON TELEGR
Slide 33: Global Business
Global Business Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 32
Slide 34: Global Business Overview
Global Business Overview Overseas Sales/Overseas Operating Income Margin* Operating profit Margin 6.0% Revenue $18.4B $18.9B $19.5B $18.6B $19.0B Operating Profit 3.2% 3.0% 3.1% 2.4% $1.14B $0.56B $0.60B $0.46B $0.56B FY 2017 FY 2018 FY 2019 FY 2020 FY 2021E * Including results from the global holdi
Slide 35: 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 36: 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 37: Global Data Centers Service delivery schedule
Global Data Centers Service delivery schedule Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 36
Slide 38: Fixed-line Communication Business
Fixed-line Communication Business Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 37
Slide 39: Fixed Broadband Business FTTH Subscriptions
Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West） * 23.26 22.56 Reference: (millions subs) 21.66 FY2021E Breakdown of FTTH Subscriptions (millions subs) 21.08 20.05 20.53 Hikari FY2021E Collaboration Total FTTH Service: +0.70 Model Change from preceding Fi
Slide 40: 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 41: Other Businesses
Other Businesses Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 40
Slide 42: Promote B2B2X Model
Promote B2B2X Model ⚫ Number of B2B2X Projects: 119 (as of the end of September 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 2020 2Q FY 2023 target Number of Projects 39 119 Copyrig
Slide 43: 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 44: Energy Business
Energy Business Expansion of renewable energy Target for ⚫ Provision of decarbonization solutions and development of renewable FY2025 power plants - Providing customers with renewable energies, including off-site PPA, and an option of EnneGreen® for reducing CO2 emissions - Developing renewable ener
Slide 45: R&D
R&D Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 44
Slide 46: 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 47: 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 48: IOWN Rollout Plan
【Legend】 Black: related to Communications ◼ Actions IOWN Rollout Plan ◆ PoC ▲ Commercialization (planned) • Exhibit Green: related to Smart City Blue: related to Maps/Cars Red: Photonics-electronics ◼ Contribution to the realization of a sustainable society Convergence Technology by IOWN as a game-c
Slide 49: Initiatives of a sustainable society
Initiatives of a sustainable society Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 48
Slide 50: 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 51: 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 52: 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 53: 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 54: 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 2020 execution) • Increased the ratio of outside directors from 27% to 50% *Introduced an executive officers system into key group
Slide 55: Shareholder Returns
Shareholder Returns Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 54
Slide 56: Shareholder Returns
Shareholder Returns ◆ Dividend Policy : Basic policy is steady dividend increases ◆ Share Buybacks : Carry out buybacks flexibly to improve capital efficiency Cancellation of Treasury Stock ⚫ Resolved to cancel treasury stock at a meeting of the Board of Directors ⚫ Details of Cancellations ・Number
Slide 57: Changes in Dividend
Changes in Dividend 110 （Yen） 105 100 85% 75 65% Dividend per share Payout Ratio 50 45% 40.9% 41.1% 42.3% 38.2% 37.0% 38.0% 36.4% 32.3% 31.2% 33.4% 32.9% 25 31.4% 30.7% 12.5 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 58: 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 From Market/ Market/Gov’t Market/ Market/ Market/ Gov’t Gov’t Market Gov’t Market Market Gov’t Market Market Gov’t Gov’t 600 539.4 *8 501.1 500 *5 406.5 *7 *4 400 38
Slide 59: Financial Data, etc.
Financial Data, etc. Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 58
Slide 60: 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 61: Trend in Consolidated Financial Results
Trend in Consolidated Financial Results 11.9 11.9 11.9 12.0 11.8 ■ Operating 11.8 11.5 11.4 Revenues 11.1 10.9 （Trillion yen） ■ Operating 1.54 1.64 1.64 1.69 1.56 1.67 1.73 Income 1.21 1.08 1.35 /Operating Profit （Trillion yen） 0.91 0.90 0.85 0.86 0.92 1.09 0.80 * 0.74 ■ Net Income 0.59 0.52 /Profit
Slide 62: 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 12,000.0 11,799.6 11,782.1 11,879.8 11,899.4 11,944.0 11,541.0 11,3
Slide 63: Changes in Consolidated Operating Income
Changes in Consolidated Operating Income ：Mobile communications business ：Data communications business ：Regional communications business ：Other business （Billion yen） ：Long distance and international 2,000 communications business 1,730.0 1,693.8 1,671.4 1,642.8 1,641.1 1,539.8 1,562.2 1,500 1,348.1
Slide 64: 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 1,700.0 1,674.8 1,697.0 1,728.3 1,750.0 1,697.9 753.7 703.1 57
Slide 65: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） Debt/Equity ratio* * Debt Equity ratio = Interest-bearing debt / Shareholders’ equity x 100 Copyright 2021 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 64
Slide 66: 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 67: 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 29,100 284,550 27,550
Slide 68: Age Distribution of Employees at NTT East, NTT West
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 69: Changes in Personnel expenses
Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 938.5 885.7 827.6 785.1 738.1 709.4 683.2 675.4 664.0 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 70: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Mobile FTTH Approx. Approx. Rakuten mobile 196.1M subs 35.6M subs market share Approx. 2％ SoftBank SoftBank market share 150M Approx. 25％ 30M KDDI KDDI market share 100M Approx. 31％ NTT EAST and 20M NTT WEST Approx. 22.8M subs NTT DOCOMO CATV Approx. 5
Slide 71: Trends in share buyback and cancellation
Trends in share buyback and cancellation Disposal of Acquired Acquired Acquired Acquired treasury from from from from Cancellation stock by Cancellation government government market market third-party /market /market allotment Excess over [Business and capital alliance with obliged Toyota Motor Corp
Slide 72: Changes of EPS and Outstanding Shares
Changes of EPS and Outstanding Shares EPS(right axis) (mil shares) （Yen） 302 EPS Growth (Average Annual Growth Rate +11.0%) 96 (Note1) Outstanding Shares : Average number of shares outstanding, excluding own shares (Note2) This chart reflects the two-for-one stock split effective on July 1, 2015 , a
Slide 73: Your Value Partner
Your Value Partner
Nippon Telegraph and Telephone Corporation (NTT) — Investor Presentation (November 2021) on 6ix