Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2022 Earnings Presentation
45 slides from Kyushu Railway's earnings presentation, May 11, 2022
Slide 1: FY22.3 Annual Investors Meeting
FY22.3 Annual Investors Meeting May 11, 2022
Slide 2: Contents
Contents Highlights 3 Ⅰ Financial Results for FY22.3 4 Ⅱ Performance Forecasts and Dividend Forecasts for 9 FY23.3 Ⅲ The Medium-Term Business Plan and 19 Key Measures in the Current Fiscal Year APPENDIX 34 2
Slide 3: Highlights
Highlights Although performance was affected by COVID-19, we remained profitable. Consolidated operating revenues, Financial operating income, ordinary income, and net income attributable to owners of the parent all increased year results for FY22.3 on year, owing to such factors as a gradual reco
Slide 4: Ⅰ Financial Results for FY22.3
Ⅰ Financial Results for FY22.3 4
Slide 5: Consolidated Financial Highlights for FY22.3
Consolidated Financial Highlights for FY22.3 （\bil） Results Results FY21.3 FY22.3 YoY Operating revenue Despite the continued influence of the COVID-19 Operating revenue 293.9 329.5 35.6 112.1% infection and the change of JR Kyushu Drug Eleven to Operating income (22.8) 3.9 26.8 - an equity-method a
Slide 6: Quarterly trend of FY22.3 (Former Segments)
Quarterly trend of FY22.3 (Shown According to Former Segments) Consolidated Railway Business (non-consolidated) Railway （¥bil） （億円） Operating Operating （¥bil） Operating 営業収益 transportation 鉄道旅客運輸収入 Operating 営業利益 ＥＢＩＴＤＡ EBITDA 営業収益 営業利益 ＥＢＩＴＤＡ EBITDA revenue income revenue income revenues 400 40 120
Slide 7: FY22.3 Segment settlement (Former Segments)
FY22.3 Segment settlement (Shown According to Former Segments) （\bil） Results Results YoY Major factors FY21.3 FY22.3 Operating revenue 293.9 329.5 35.6 112.1% Transportation 95.2 108.9 13.6 114.3% Railway Business (non-consolidated) 89.7 102.9 13.1 114.7% Increase due to moderate recovery in demand
Slide 8: FY22.3 Non-consolidated settlement
FY22.3 Non-consolidated settlement (\bil) Results Results YoY Major Factors FY21.3 FY22.3 Operating revenue 144.7 179.9 35.2 124.4% Railway transportation 76.3 89.3 13.0 117.1% Increase due to moderate recovery in demand revenues Shinkansen 22.4 27.4 4.9 122.1% Conventional Lines 53.8 61.9 8.0 115.0
Slide 9: Ⅱ Performance Forecasts and Dividend Forecasts for FY23.3
Ⅱ Performance Forecasts and Dividend Forecasts for FY23.3 9
Slide 10: Change in Segment Classifications
Change in Segment Classifications We are changing our segment classifications with the aim of strengthening our business portfolio (growing BtoB and BtoG businesses). Overview of changes (April 1, 2022) Key points of changes Former segments New segments 1. Positioning the “Construction Segment” and
Slide 11: Revenue Assumptions in Main Businesses
Performance Forecast for FY23.3: Revenue Assumptions in Main Businesses We expect the control of COVID-19 and consumer activity to cause a gradual recovery in mobility demand and consumer spending. Railway Business｜Handling revenues from railway transportation (vs. FY19.3) Real Estate Leasing Busine
Slide 12: Consolidated Financial Forecast Highlights for FY23.3
Consolidated Financial Forecast Highlights for FY23.3 Operating revenue （\bil） Results Forecasts Despite the impact of COVID-19 and a downturn in FY22.3 FY23.3 YoY the sale of properties, we expect operating revenues to increase due to gradual demand recovery in each Operating revenue 329.5 381.4 51
Slide 13: Consolidated Financial Forecasts for FY23.3 (by segment)
Consolidated Financial Forecasts for FY23.3 (by segment) (Shown According to New Segments) (\bil) Results Forecasts YoY Major factors FY22.3 FY23.3 Operating revenue 329.5 381.4 51.8 115.7% Transportation 104.2 139.2 34.9 133.5% Increase due to moderate recovery in demand in railway business Railway
Slide 14: Non-consolidated Financial Forecasts for FY23.3
Non-consolidated Financial Forecasts for FY23.3 (\bil) Results Forecasts YoY Major factors FY22.3 FY23.3 Operating revenue 179.9 210.5 30.5 117.0% Railway transportation 89.3 122.6 33.2 137.2% Increase due to moderate recovery in demand revenues Shinkansen 27.4 43.8 16.3 159.5% Conventional Lines 61
Slide 15: FY23.3 dividend forecasts
FY23.3 dividend forecasts Shareholder return policy JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY25.3, we will aim for a consolidated dividend payout ratio of 35%, with a minimum dividend per share of ¥93.0. We will flexibly
Slide 16: (Reference) Transportation Segment
(Reference) Transportation Segment Results (Former Segments) Forecasts (New Segments) (\bil) (\bil) FY21.3 FY22.3 FY22.3 FY23.3 YoY YoY Results Results Results Forecasts Operating revenue 95.2 108.9 13.6 114.3% 104.2 139.2 34.9 133.5% Railway Business (non-consolidated) 89.7 102.9 13.1 114.7% 102.9
Slide 17: (Reference) Real Estate and Hotels: Real estate leasing
(Reference) Real Estate and Hotels Segment: Real estate leasing business Real estate leasing business Results (Former Segments) Forecasts (New Segments) （\bil） （\bil） FY21.3 FY22.3 FY22.3 FY23.3 YoY YoY Results Results Results Forecasts Operating revenue 49.7 57.9 8.1 116.5% 58.5 61.6 3.0 105.2% Ope
Slide 18: (Reference) Real estate sales and hotel businesses
(Reference) Real Estate and Hotels Segment: Real estate sales and hotel businesses Real estate sales business Results (Former Segments) （\bil） Forecasts (New Segments) （\bil） FY21.3 FY22.3 FY22.3 FY23.3 YoY YoY Results Results Results Forecasts Operating revenue 23.5 43.6 20.0 185.2% 46.1 43.2 (2.9)
Slide 19: Ⅲ The Medium-Term Business Plan and Key Measures in the Current Fiscal Year
Ⅲ The Medium-Term Business Plan and Key Measures in the Current Fiscal Year 19
Slide 20: Toward the Realization of the 2030 Long-Term Vision
Toward the Realization of “the 2030 Long-Term Vision” The Group’s “What We Aim to Be,” “Our Conduct,” and “the 2030 Long-Term Vision” remain unchanged. Taking changes in the operating environment into account in our scenario planning, we are working toward “Implementing city-building initiatives for
Slide 21: Steps toward the Realization of the 2030 Long-Term Vision
Steps toward the Realization of “the 2030 Long-Term Vision” Targeting the realization of “the 2030 Long-Term Vision,” over the period of the current medium-term business plan, we will work to return to a growth track and subsequently strive to realize sustainable growth. Positioning of each term, re
Slide 22: Key Measures for the Current Fiscal Year
Key Measures for the Current Fiscal Year Key strategies in the medium-term business plan Completing business structural reforms Key strategies for the realization of the long-term vision Key strategy① Key strategy② Key strategy③ Railway business Stabilizing profitability Creating a model for buildin
Slide 23: Reduce Costs in the Railway Business through BPR
Key strategy❶ Completing business structural reforms: Reduce Costs in the Railway Business through BPR We expect to achieve fixed cost reductions in the railway business by ¥14.0 billion in the current fiscal year, and we will continue working to further strengthen BPR. Cost reductions in the previo
Slide 24: Ticket Reevaluation, Shift to On-Line Sales
Securing Revenues in the Railway Business: Ticket Reevaluation, Shift to On-Line Sales We will strengthen yield management by focusing on measures we can implement swiftly, such as reevaluating tickets and shifting to on-line sales. Reevaluation of various types of tickets Initiatives in the previou
Slide 25: Structural Reforms in the Hotel Business
Structural Reforms in the Hotel Business Accelerate various initiatives to increase the competitiveness of existing hotels. Improve the break-even occupancy rate Quarterly results in the hotel business (FY22.3) Maintain a 25% reduction in （¥bil） Operating 営業収益 Operating 営業利益 Occupancy 稼働率 revenue
Slide 26: City-Building in the Western Kyushu Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Western Kyushu Area Taking the opening of the Nishi-Kyushu Shinkansen as a trigger, we will promote multi-faceted development in the western Kyushu area and seek to maximize the impact of opening. Expand
Slide 27: City-Building in the Fukuoka Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Fukuoka Area In the city of Fukuoka, where the amount and rate of population growth are the largest among ordinance- designated cities in Japan, we are advancing city-building. We are positioning the enh
Slide 28: Promoting MaaS
Key strategy❷ Creating a model for building cities that promote well-being: Promoting MaaS To further promote MaaS, we are strengthening cooperation and expanding initiatives involving regional transportation companies. Examples of recent initiatives 1 Expansion of the “my route” Area 2 Cooperation
Slide 29: Transitioning to BRT for the Hitahikosan Line
Key strategy❷ Creating a model for building cities that promote well-being: Transitioning to BRT for the Hitahikosan Line Building a model for sustainable mobility services The decision was made to introduce a BRT system on the route between Soeda Station and Yoake Station, which had become impass
Slide 30: Strengthening the Business Portfolio
Key strategies ➌ Developing businesses in new areas in which we can contribute: Strengthening the Business Portfolio We will continuously monitor the businesses and flexibly reconfigure the business portfolio. Major initiatives over the past three years Future directions Business revision / Expandin
Slide 31: Strengthen BtoB and BtoG Businesses
Key strategies ➌ Developing businesses in new areas in which we can contribute: Strengthen BtoB and BtoG Businesses We will strengthen BtoB and BtoG businesses with an eye to expanding areas in which we can contribute and enhancing business sustainability. Strengthening areas of BtoB business Initia
Slide 32: Capital Investment Plan
Capital Investment Plan This fiscal year, we will continue making maintenance and upgrade investments, such as investing in rolling stock for the Nishi-Kyushu Shinkansen. We will accelerate growth investments to expand our development pipelines, using cash obtained through the sale of properties to
Slide 33: ESG Initiatives
ESG Initiatives We will promote initiatives to achieve the non-financial KPIs listed in the medium-term business plan. For certain items, a link with officer compensation will also be considered. Status of major initiatives E S G Realization of a decarbonized society Safety and service, the foundati
Slide 34: APPENDIX
APPENDIX 34
Slide 35: Consolidated Balance Sheet and Cash Flow Statement
Consolidated Balance Sheet and Cash Flow Statement Consolidated Balance Sheet （\bil） Results Results YoY Major factors FY21.3 FY22.3 Total Assets 891.3 951.9 60.6 Cash and time deposits 22.9 39.7 16.7 Short-term securities 42.0 39.0 (3.0) Property, plant and equipment 532.0 575.3 43.2 Increase due t
Slide 36: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (\bil) Results Results YoY Major Factors FY21.3 FY22.3 Total 76.3 89.3 13.0 117.1% Commuter pass 26.2 27.9 1.6 106.2% Non-commuter pass 50.0 61.4 11.4 122.8% Cargo 0.0 0.0 0.0 - Shinkansen 22.4 27.4 4.9 122.1% Commuter pass 2.4 2
Slide 37: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels (¥bil) （億円） EBITDA EBITDAマージン EBITDA margin (¥bil) （億円） EBITDA EBITDAマージン EBITDA margin 40 400 35.6 60% 400 40 34.3 34.4 34.3 40% 33.1 32.0 31.8 29.5 30.5 30 300 30% 30 300 50% 200 20 20% 22.2 200 20 46.2% 45.6% 40% 100 10 18.7% 18.6% 18.9% 17.
Slide 38: Trends in the Railway Business
Trends in the Railway Business Railway transportation revenues (Shinkansen), passenger Internet train reservation services: load factor on the Kyushu Shinkansen (Hakata－Kumamoto) （10,000 reservations） Number of reservations, sales (¥bil) (¥bil) 新幹線 乗車率（右軸） 600 400 Shinkansen Passenger load factor (r
Slide 39: Trends in the Real Estate and Hotel Businesses
Trends in the Real Estate and Hotel Businesses Station building tenant sales Hotel occupancy rates and average unit prices （億円） （¥bil） Other main station 2,500 250 その他主要駅ビル buildings JR博多シティ JR Hakata City （¥） Occupancy (left) ADR（左軸） 稼働率（右軸） 203.0 202.6 16,000 Rates (right) 100% 195.8 2,000 200 184
Slide 40: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Units/Rooms Notes (Uses, etc.) March 2022: Opening under elevated railway tracks ・Multi-faceted development incorporating Nagasaki City, Nagasaki Station area Fall 2023: Full opening of new commercial facilities, hot
Slide 41: Fukuoka is a rapidly growing city
Kyushu has one of the best economic bases in Japan: Fukuoka is a rapidly growing city Kyushu is positioned as the "10% economy of Japan" (in terms of gross regional product, total population, total area, number of establishments, etc.) In particular, The Fukuoka Metropolitan Area is a city with
Slide 42: Railway Business—Outline of Fares/Charges and Measures to Increase Revenues
Railway Business—Outline of Fares/Charges and Measures to Increase Revenues Outline of Fares/Charges (¥bil) Trend of operating income in the railway business 400 40 28.2 26.7 ■ Breakdown of fares/charges 300 30 25.0 20.0 200 20 100 10 FY16.3 16.3期 FY21.3 FY22.3 22.3期 Charges → Compensation for the u
Slide 43: Railway Business Expenses
Railway Business Expenses Special tax measures In FY22.3, the impact of Shinkansen special measures (between Hakata to Shin-Yatsushiro) was approximately ¥3.4 billion. Special tax measures for the Kyushu Shinkansen (between Hakata and Shin-Yatsushiro) ended at the close of FY22.3. (¥bil) Expecte
Slide 44: Damage to the Hisatsu Line due to Heavy Rains in July 2020
Damage to the Hisatsu Line due to Heavy Rains in July 2020 Based on the information currently available, we estimate railway restoration costs to be approximately ¥23.5 billion. We are participating in the JR Hisatsu Line Review Conference held by the Ministry of Land, Infrastructure, Transport
Slide 45: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. These statements are judgments made by the Company based on information, projections, and assumptions available at the time of the materials’ creation. A
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