Mirait One Corporation · TSE:1417
Mirait One — MIRAIT Holdings — Q3 FYE March 2017 Earnings Presentation
50 slides from Mirait One's earnings presentation, Mar 17, 2017
Slide 1: Presentation Materials
Presentation Materials February, 2017 MIRAIT Holdings Corporation
Slide 2: Table of Contents
Table of Contents I. Profile of the MIRAIT Group IV. Reference Materials 1. Message from the President 3 1. Business Overview 30 - 34 2. Overview of MIRAIT Holdings 4 2. Changes in the Business Environment through 2020 35 - 36 3. Establishment of the MIRAIT Group 5 3. Changes in the Market Environme
Slide 3: I. Profile of the MIRAIT Group
I. Profile of the MIRAIT Group
Slide 4: 1. Message from the President
1. Message from the President In Japan today, new growing markets have been created along with the social innovation which has been accelerated by promoting a growth strategy with the government and the private sector working together and by developing and utilizing ICT technology. At the same time,
Slide 5: 2. Overview of MIRAIT Holdings (As of December 31, 2016)
2. Overview of MIRAIT Holdings (As of December 31, 2016) Established October 1, 2010 Paid-in capital 7 bil. yen President (CEO) Masatoshi Suzuki Shares 【Total outstanding shares】 85,381,866 shares Stock listing 1st Section of the Tokyo Stock Exchange (Code: 1417) Rating & Investment Information, Inc
Slide 6: 3. Establishment of the MIRAIT Group
3. Establishment of the MIRAIT Group MIRAIT Holdings Corporation was established in October 2010 through the management integration of Daimei, Commuture and TODENTSU, each of which had a history of more than half a century centered on building communication infrastructure in partnership with telec
Slide 7: 4. The Company's Initiatives Since Establishment
4. The Company’s Initiatives Since Establishment The management integration aims to strengthen the Group’s competitiveness and to create a robust management base by leveraging synergies. The following efforts have been implemented to date: (1) Strengthening of the environmental & social and ICT bu
Slide 8: 5. Transformation into a Comprehensive Engineering and Service Company
5. Transformation into a "Comprehensive Engineering and Service Company" (1) Expansion of Business Domains (Overview) Expand the "breadth" of our business domains → Expansion from upstream to downstream processes (planning, design, construction, maintenance, operation, etc.) Increase the "height
Slide 9: Future Focus Areas (Frontier Domains)
(2) Future Focus Areas (Frontier Domains) Zone Smart Office Smart Town Smart House Domain Cloud & Networks • Security (Surveillance cameras, network monitoring) Cloud • Disaster prevention networks Stock business & & • PBX (Cloud) Operations • Sensor networks Networks Frontier Domains • LAN, Servers
Slide 10: II. Performance and Financial Overview
II. Performance and Financial Overview
Slide 11: 1. Historical Performance
1. Historical Performance Until FY2014, synergies through management integration and transformation of business structure led to increased revenue and income for three consecutive years In FY2015, there was a substantial decrease in revenue and income due to decreased in the multi-carrier busine
Slide 12: 2. Financial Overview for the Nine Months Ended December 31, 2016
2. Financial Overview for the Nine Months Ended December 31, 2016 Orders received achieved steady growth thanks to M&A and other efforts, reaching a record high of 231.8 bil. yen(up by 44.3 bil. yen yoy). Net sales came in at 171.5 bil. yen (down by 1.3 bil. yen yoy), due to delays in work in th
Slide 13: Detailed Analysis of Net Sales and Operating Income
■ Detailed Analysis of Net Sales [YoY Comparison] ■ Detailed Analysis of Operating Income[YoY Comparison] NTT Business: Up given the increase in facility improvement proposals and regular small-scale construction work. Multi-carrier Business: Mobile-related work decreased reflecting the drop in
Slide 14: 3. Quarterly Financial Results
3. Quarterly Financial Results Net sales and operating income are recovering as the end of the fiscal year approaches. Orders received recorded historically high levels in 2Q and 3Q of FYE March 2017. ⇒ Construction account carried forward reached historically high levels; both sales and profits
Slide 15: 4. Forecast for FYE March 2018
4. Forecast for FYE March 2018 ■ Trends in net sales and operating income FYE March 2015 FYE March 2016 FYE March 2017 FYE March 2018 Net sales 283.7 bil. yen Significant decrease in Back on growth track Aim to achieve further sales growth revenues Net sales: 280.0 bil. yen Net sales: 269.5 bil. yen
Slide 16: 5. Shareholder Returns and Corporate Governance
5. Shareholder Returns and Corporate Governance Our basic policy is to pay dividends consistently, while taking the business performance, the dividend payout ratio, etc. into consideration. Dividends for the current fiscal year is planned at 30 yen per share (interim and year-end dividends of 15
Slide 17: III. Trends in Each Business
III. Trends in Each Business
Slide 18: 1. Trends in the NTT Business
1. Trends in the NTT Business MIRAIT Group’s initiatives ■Business environment NTT’s investment activities remain on a downward trend, but work for optical Net sales recovery through expansion of facility improvement proposals and lines has increased given the spread of Hikari Collaboration※. ci
Slide 19: Net sales growth in NTT business
Net sales growth in NTT business ■ Breakdown of net sales ■ Facility management services Repairs and management of facilities in certain work areas are now fully outsourced from （Unit: bil. yen） 99.9 95.6 NTT to MIRAIT. 95.1 95.0 Decrease 100 MIRAIT will proactively approach NTT with proposals ,
Slide 20: 2. Trends in the Multi-carrier Business
2. Trends in the Multi-carrier Business MIRAIT Group’s initiatives ■Business environment Net sales growth due to pick up in work for LTE-Advanced and new frequencies. Mobile carriers’ investment activities remain on a downward trend, but work for LTE-Advanced and new frequencies has gained momen
Slide 21: Trends in the mobile business and global business
Trends in the mobile business Net sales growth in the global business (Unit: bil. yen) LTE-A (add-on cells, carrier aggregation, 3.5GHz, etc.) gaining momentum approx.20.0 20 700MHz-related work is expected to commence from the end of the current FY. Other regions 5th generation (5G) services
Slide 22: 3. Trends in the Environmental & Social Innovation Business
3. Trends in the Environmental & Social Innovation Business Achieve sales growth in new-energy related businesses, specifically in the area of “solar power + rechargeable batteries”. Expand O&M business in solar power + rechargeable batteries. Focus on expanding the infrastructure and redevelo
Slide 23: Initiatives in solar power, batteries and underground power lines
Initiatives in solar power + rechargeable batteries business Initiatives in work to lay power lines underground ■ Expansion of solar power EPC and O&M businesses Tokyo is behind other major cities in the world in laying power lines underground ⇒London/ Paris/ Hong Kong : 100%, Singapore: 93%, Toky
Slide 24: 4. Trends in the ICT Solution Business
4. Trends in the ICT Solution Business Strengthen channel sales to win for work related to PBX, servers, LAN, etc. Acquired a LAN cabling company in Singapore (Lantrovision) to expand the business in the Asia region. Launch the data center business in an effort to enhance the stock business (O
Slide 25: Leveraging Lantrovision and data center business
Leveraging Lantrovision to expand overseas business (Became a consolidated subsidiary in June 2016) Initiatives in the data center business Asia’s largest company engaged in design, construction and maintenance of LAN cabling, etc., MIRAIT Technologies is building the Osaka No1 Data Center in re
Slide 26: 5. Recent Initiatives for Business Expansion
5. Recent Initiatives for Business Expansion Expanding the “frontier domains” by actively engaging in strategic investments that leverage the technologies accumulated through the building of telecommunications infrastructure, which is MIRAIT’s core business at present. Actively engaging in allia
Slide 27: 6. Initiatives in New Solutions
6. Initiatives in New Solutions Initiatives in Wi-Fi solutions Wi-Fiソリューションへの取組み Initiatives in IoT and M2M business Creating new business opportunities by offering Wi-Fi-related services Verification test for wide-area wireless sensor network that connects smart ⇒”ee-TAB*” tablet service for hote
Slide 28: 7. Efforts to Reduce Administrative Costs and Strengthen the Business Base
7. Efforts to Reduce Administrative Costs and to Strengthen the Business Base Initiatives in FYE March 2017 Initiatives for FYE March 2018 • Cost reduction efforts(copying, telecommunication fees, office supplies, etc.) • Cost reduction efforts (switch to Hikari collaboration telecommunication line,
Slide 29: MEMO
<M E M O> 28
Slide 30: IV. Reference Materials
IV. Reference Materials
Slide 31: 1. Business Overview (1) Business Categories
1. Business Overview (1) Business Categories The MIRAIT Group’s business is centered on the construction of communication infrastructure (for fixed and mobile communication), but the Group is also engaged in various other businesses in areas such as ICT, the environment, and energy. ■ Overview of
Slide 32: (2) Group Formation
(2) Group Formation In NTT and (Mobile), MIRAIT and MIRAIT Technologies bear total responsibility including designing, quantity survey, operational management, while subsidiaries and subcontracting companies undertake the construction works. MIRAIT group is building a nationwide work organizatio
Slide 33: (3) Business Overview: NTT and Multi-carrier Business
(3) Business Overview (1) NTT and Multi-carrier Business NTT : Construction, maintenance and operation of fixed communication facilities of NTT. Centered on the Greater Tokyo and Kansai regions. This accounts for 35.3% of net sales. Multi-carrier : Nationwide works on construction, maintenance a
Slide 34: Environmental & Social Innovation and ICT Solution Business
(2) Environmental & Social Innovation and ICT Solution Business The growing business which serves as an engine to become a "Comprehensive Engineering and Service Company". Environmental & Social Innovation : Offers the comprehensive solutions to create environmental / social infrastructure. This a
Slide 35: Initiatives in building solutions
■ Initiatives in building solutions Target market ⇒ Promising market targeting renovation of existing buildings Offering solutions ⇒Comprehensive support from planning to building design, construction and operations, through the offering of a full line-up of solutions including those to optimize
Slide 36: 2. Changes in the Business Environment through 2020
2. Changes in the Business Environment through 2020 ■ Japan's Structural Problems ■ Evolution of communications technology Abenomics (departure from deflation, low ■ Changes in the Spread of smartphones and tablets birthrate and aging society, revitalization of ■ Changes in regional economies, e
Slide 37: Changes in the Communications Environment
■ Changes in the Communications Environment (Domestic) State of establishment of local government Wi-Fi - 2015 2016 2017 2020 - Installed Not installed Overall (n=1,273) 39.7% 60.3% Data volume Special admin cities 2010 × 1,000 times (n=39) 61.5% 38.5% Other cities (n=603) 44.8% 55.2% Core networks
Slide 38: 3. Changes in the Market Environment for the Mobile Business
3. Changes in the Market Environment for the Mobile Business - FY2015 FY2016 FY2017 Spread of smartphones Data offloading measures General mobile Rapid increase in data traffic Expansion of frequency bands Measures to resolve poor reception areas between subway stations Communication method LTE LTE-
Slide 39: 4. Expansion of Business Areas Utilizing Technologies
4. Expansion of Business Areas Utilizing Technologies Resources (Technologies) Current Business Usage Areas to Expand Into （As of December 31, 2016) Engineering area Expanded areas NTT Qualified personnel (total qualifications) Recent areas engaged in Construction 4,400 (7,600 qualifications) Teleco
Slide 40: 5. Current Industry Conditions
5. Current Industry Conditions (1) Current State of the Industry (As of January 2017) Communications construction companies are made up of three nationwide groups (MIRAIT, COMSYS, Kyowa Exeo), and nine regional companies. In recent years, a realignment of the industry has been carried out by these
Slide 41: Net Sales and Operating Income of MIRAIT and Peer Companies
(2) Net Sales and Operating Income of MIRAIT and Peer Companies MIRAIT Holdings established with the management integration of the three companies had net sales of 269.5 bil. yen in the year ended March 2016, approaching the scale of the two largest companies (COMSYS and Kyowa Exeo). Growing into
Slide 42: V. Supplementary Financial Information
IV. Supplementary Financial Information
Slide 43: 1. Historical Performance
1. Historical Performance FYE March 2017 Unit: bil. yen FYE March 2013 FYE March 2014 FYE March 2015 FYE March 2016 (Plan) Orders received 278.0 282.0 293.6 260.7 310.0 Net sales 271.0 277.7 283.7 269.5 280.0 Gross profit 29.3 29.9 33.1 25.8 33.5 Gross profit margin 10.8% 10.8% 11.7% 9.6% 12.0% SG&A
Slide 44: 2. Orders Received and Net Sales by Business Category
2. Orders Received and Net Sales by Business Category FYE March 2016 FYE March 2017 YoY Change FYE March 2016 FYE March 2017 Orders received Full-year Results Progress Full-year Plan Progress 3Q actual results 3Q actual results (Percentage change） Units: bil. Yen (a) (b) (b)－(a) (c) (a)／(c) (d) (b)／
Slide 45: 3. Assets, Liabilities and Net Assets
3. Assets, Liabilities and Net Assets The Company’s equity ratio stood at 60.4% as of December 31, 2016 (63.1% as of March 31, 2016). 65% of assets are current assets, which are primarily cash and deposits, accounts receivable from completed construction contracts, and costs on uncompleted const
Slide 46: 4. Key Performance Indicators
4. Key Performance Indicators Capital-related Indicators FYE March 2017 FYE March 2013 FYE March 2014 FYE March 2015 FYE March 2016 (Forecast) Equity ratio 60.0％ 63.0％ 63.8％ 63.1% 63.2% Return on equity (ROE) 4.1％ 6.7％ 9.5％ 3.0% 5.5% Shareholder Return Indicators FYE March 2017 FYE March 2013 FYE Ma
Slide 47: Cash Flows and Cash and Deposits/Interest-bearing Debt
Cash Flows FYE March 2016 FYE March 2017 Units: bil. yen FYE March 2013 FYE March 2014 FYE March 2015 FYE March 2016 3Q actual results 3Q actual results Operating cash flow - 1.6 9.0 18.6 6.2 1.2 3.3 Investment cash flow - 1.5 - 2.7 - 3.8 - 3.6 - 2.9 - 10.7 Financial cash flow - 2.4 - 3.5 - 2.2 - 2.
Slide 48: 5. Major Shareholders
5. Major Shareholders (As of September 30, 2016) Number of Shares Shareholding Ratio Shareholder Held Shareholder Composition (%) (thousands) Sumitomo Electric Industries, Ltd. 16,236 19.0% * 3,694 * 4.3% MIRAIT Holdings Corporation (Treasury Stock) (5,978) (7.0%) Treasury The Master Trust Bank of J
Slide 49: 6. Share Price
6. Share Price (Since establishment of MIRAIT Holdings on October 1, 2010) ■ Share price and trading volume (Closing price) (Units: yen) 1,600 Jun.24, 2015 1,473 yen (highest) 1,200 Closing price on Jan.31,2017 Oct.1, 2010 ■ Share price 1,030 yen 553 yen (listed) ■ PER 12.3x ■ PBR 0.7x 800 ■ Dividen
Slide 50: Precautionary Statement
Precautionary Statement Statements and quotes relevant to the forecasted values in this handout are the future prospects based on the plans and prospects of the Company at this point in time. The actual business results could be significantly different from those stated in this handout due to change
MIRAIT Holdings — Q3 FYE March 2017 Earnings Presentation on 6ix