Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2023 Earnings Presentation
48 slides from Kyushu Railway's earnings presentation, May 12, 2023
Slide 1: FY23.3 Annual Investors Meeting
FY23.3 Annual Investors Meeting May 12, 2023
Slide 2: Contents
Contents Highlights 3 Ⅰ Financial Results for FY23.3 4 Ⅱ Performance Forecasts and Dividend Forecasts for 9 FY24.3 Ⅲ Progress of the Medium-Term Business Plan 19 APPENDIX 34 2
Slide 3: Highlights
Highlights Although performance was affected by COVID-19, demand recovered gradually in all Financial results and segments. As a result, consolidated operating revenues, operating income, ordinary year-end dividend for FY23.3 income, and net income attributable to owners of the parent all increase
Slide 4: Financial Results for FY23.3
Ⅰ Financial Results for FY23.3 4
Slide 5: Consolidated Financial Highlights for FY23.3
Consolidated Financial Highlights for FY23.3 （\bil） Results Results FY22.3 FY23.3 YoY Operating revenue Operating revenue 329.5 383.2 53.7 116.3% Revenues increased, owing to such factors as gradual demand increases in each business. Operating income 3.9 34.3 30.3 870.2% Ordinary income 9.2 35.7 26.
Slide 6: Quarterly trend of FY23.3
Quarterly trend of FY23.3 Consolidated Railway Business (non-consolidated) Real Estate and Hotels Segment Retail and Restaurant segment 6
Slide 7: FY23.3 Segment settlement (Shown According to New Segments)
FY23.3 Segment settlement (Shown According to New Segments) （\bil） Results Results YoY Major factors FY22.3 FY23.3 Operating revenue 329.5 383.2 53.7 116.3% Transportation 104.2 138.3 34.0 132.6% Railway Business (non-consolidated) 102.9 136.5 33.5 132.6% Increase due to moderate recovery in demand
Slide 8: FY23.3 Non-consolidated settlement
FY23.3 Non-consolidated settlement (\bil) Results Results YoY Major factors FY22.3 FY23.3 Operating revenue 179.9 211.6 31.6 117.6% Railway transportation 89.3 121.4 32.0 135.9% Increase due to moderate recovery in demand revenues Shinkansen 27.4 44.0 16.5 160.4% Conventional Lines 61.9 77.4 15.4 12
Slide 9: Performance Forecasts and Dividend Forecasts for FY24.3
Ⅱ Performance Forecasts and Dividend Forecasts for FY24.3 9
Slide 10: Performance Forecasts for FY24.3: Key Business Assumptions
Performance Forecasts for FY24.3: Key Business Assumptions We expect revenue to maintain its recovery trend from 2H FY23.3. However, we anticipate higher energy costs in the railway business and also expect opening expenses related to the Nagasaki Station area development. Railway Business Real Esta
Slide 11: Consolidated Financial Forecast Highlights for FY24.3
Consolidated Financial Forecast Highlights for FY24.3 （\bil） Results Forecasts YoY Operating revenue FY23.3 FY24.3 Even though we expect a decrease in the Operating revenue 383.2 417.0 33.7 108.8% sale of properties, we anticipate a rise in revenues owing to such factors as the gradual recovery of d
Slide 12: Consolidated Financial Forecasts for FY24.3 (by segment)
Consolidated Financial Forecasts for FY24.3 (by segment) (¥bil) Results Forecasts YoY Major factors FY23.3 FY24.3 Operating revenue 383.2 417.0 33.7 108.8% Transportation 138.3 160.7 22.3 116.2% Increase due to moderate recovery in demand Railway Business (non-consolidated) 136.5 156.9 20.3 114.9% R
Slide 13: Non-consolidated Financial Forecasts for FY24.3
Non-consolidated Financial Forecasts for FY24.3 (¥bil) Results Forecasts YoY Major factors FY23.3 FY24.3 Operating revenue 211.6 228.6 16.9 108.0% Railway transportation revenues 121.4 142.8 21.3 117.6% Increase due to moderate recovery in demand Shinkansen 44.0 53.9 9.8 122.4% Conventional Lines 77
Slide 14: FY24.3 Dividend Forecasts
FY24.3 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 15: Transportation Segment
Transportation Segment We expect handling revenues from railway transportation to reach around 94% of FY19.3 levels. With regard to expenses in the railway business, we expect the effects of a ¥14.0 billion reduction in fixed costs to continue. However, we also anticipate a decrease in emergency
Slide 16: Real Estate and Hotels Segment: Real Estate Leasing Business
Real Estate and Hotels Segment: Real Estate Leasing Business We expect the recovery in tenant sales at existing station buildings to continue from 2H FY23.3. Several new properties are scheduled to open, including the New Nagasaki Station Building, which is slated to open in autumn 2023. 【Result
Slide 17: Real Estate and Hotels Segment: Real Estate Sales Business
Real Estate and Hotels Segment: Real Estate Sales Business We expect revenue from the sale of condominiums to be up slightly from FY23.3 levels. We expect revenue from the sale of properties to decline, reflecting the FY23.3 sale of an office building to a third party. 【Results】 【Forecasts】 （\bi
Slide 18: Real Estate and Hotels Segment: Hotel Business
Real Estate and Hotels Segment: Hotel Business We expect occupancy rates and ADR to maintain the recovery trend that began in 2H FY23.3. URESHINO YADOYA and Nagasaki Marriott Hotel are scheduled to open. 【Results】 【Forecasts】 （\bil） （\bil） FY22.3 FY23.3 FY23.3 FY24.3 YoY YoY Results Results Resu
Slide 19: Progress of the Medium-Term Business Plan
Ⅲ Progress of the Medium-Term Business Plan 19
Slide 20: JR Kyushu Group Medium-Term Business Plan 2022-2024
JR Kyushu Group Medium-Term Business Plan 2022-2024 Three key strategies of the medium-term business plan 2030 Long-Term Vision Robustly promoting three key strategies during the stage for returning the We will contribute to the sustainable development of Company to a growth track Kyushu through cit
Slide 21: Positioning of FY24.3
Positioning of FY24.3 Operating environment and policies in FY24.3 Although we expect personal consumption to be affected by higher energy, raw materials, and other costs, as well as a sharp rise in commodities prices, we anticipate a gradual recovery in demand, mainly for transportation and hotel
Slide 22: Completing Business Structural Reforms: Railway Business Through BPR
Key strategy❶ Completing Business Structural Reforms: Railway Business Through BPR* ＊Business Process Re-engineering The ¥14.0 billion reduction in fixed costs in the railway business, due to BPR, which were initiated in response to COVID-19, were completed in FY23.3 and have helped to return the ra
Slide 23: Completing Business Structural Reforms: The Future Railway Project
Key strategy❶ Completing Business Structural Reforms: Railway Business Through The Future Railway Project Taking a railway business streamlined through BPR as our starting point, we will work to advance mobility and strengthen our management base through the “Future Railway Project” to create the “r
Slide 24: 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 Aiming to maximize the opening effect of the Nishi-Kyushu Shinkansen by promoting development in the western Kyushu area, using the opening of the Nishi-Kyushu Shinkansen as a catalys
Slide 25: Nagasaki Station area development
Key strategy❷ Creating a model for building cities that promote well-being: Nagasaki Station area development New Nagasaki Station Building (tentative name) (scheduled opening: autumn 2023) ・Prior to the full opening, Nagasaki Kaido Kamome Market (a retail space under the elevated tracks) opened in
Slide 26: 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 Fukuoka area, we are promoting city-building, positioning as an opportunity the enhancement of the Hakata Station terminal functions resulting from the extension of the Nanakuma Line.
Slide 27: Promoting MaaS
Key strategy❷ Creating a model for building cities that promote well-being: Promoting MaaS Strengthen collaboration among regional transportation operators, local governments, economic organizations, and other bodies to further promote MaaS. In addition, expand and enhance initiatives throughout Kyu
Slide 28: Strengthening BtoB and BtoG businesses
Key strategies ➌ Developing businesses in new areas in which we can contribute: Strengthening BtoB and BtoG businesses To accelerate growth by promoting stronger business collaboration within the Construction segment and leading the resolution of diverse regional infrastructure challenges, we will e
Slide 29: Capital Investment Plan
Capital Investment Plan ●We are making steady progress according to the capital investment plan indicted in the medium-term business plan. ●In FY24.3, we are planning growth investments in large-scale projects, such as the New Nagasaki Station Building development, as well as in growth investment pr
Slide 30: Status of Revision to the Business Portfolio
Status of Revision to the Business Portfolio We are continuously monitoring the business and working to flexibly reconfigure the business portfolio. Initiatives under the current Main initiatives to date medium-term business plan Expanding Business revision/ Expanding Business revision/ business are
Slide 31: ESG Initiatives
ESG Initiatives Proactive environmental approach (new value creation) Enter the grid-based storage battery business A joint business that leverages the strengths of JR Kyushu and Sumitomo Corporation (establish new company → apply equity method) ◆Unused land alongside Business expertise tracks
Slide 32: ESG Initiatives: HR Strategy
ESG Initiatives HR Strategy Our assumptions when ●Create a company where employees are motivated and can work considering HR strategy Two basic with vigor and enthusiasm policies ●Cultivate employees to have interpersonal and practical skills Sense of Diversity unity ＜Four pillars of our HR strategy
Slide 33: State of Progress on Non-Financial KPIs
State of Progress on Non-Financial KPIs Materiality Objectives/Indicators Progress (FY23.3) ● CO2 emissions ● JR Kyushu non-consolidated emissions in 50% reduction compared to FY14.3 Reduced by 46.0% (FY22.3 result) FY31.3 Realization of a ● Disclosure of environment-related ● Groupwide Scope 1 and
Slide 34: APPENDIX
APPENDIX 34
Slide 35: Consolidated Balance Sheet and Cash Flow Statement
Consolidated Balance Sheet and Cash Flow Statement （¥bil） Results Results YoY Major factors FY22.3 FY23.3 Total Assets 951.9 996.6 44.7 Cash and time deposits 39.7 37.2 (2.4) Securities 39.0 15.0 (24.0) Increase due to acquisition of real estate and new Property, plant and equipment 575.3 632.2 56.8
Slide 36: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (\bil) Results Results YoY Major Factors FY22.3 FY23.3 Total 89.3 121.4 32.0 135.9% Commuter pass 27.9 29.0 1.1 104.2% Non-commuter pass 61.4 92.3 30.8 150.3% Cargo 0.0 0.0 0.0 152.2% Shinkansen 27.4 44.0 16.5 160.4% Commuter pas
Slide 37: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels （¥bil） （¥bil） EBITDA EBITDA margin EBITDA EBITDA margin 40 40% 40 60% 35.6 36.2 34.3 30 29.5 30% 31.8 31.9 30.5 30 50% 20 20% 13.1 22.2 10 18.9% 17.0% 10% 20 40% 9.5% 0 0% 39.5% FY19.3 FY20.3 FY21.3 FY22.3 FY22.3 FY23.3 (10) -10% 10 30% 33.7% (
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) Number of reservations, sales （¥bil） （¥bil） Shinkansen Passanger load factor(right) （10,000 rersevations） 80 60% 600 40 5
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 (¥bil) 250 Other main station buildings JR Hakata City (¥) ADR(left) Occupancy Rates(right) 222.1 16,000 14,624 100% 203.0 202.6 13,877 200 184.6 13,103 11,766 11,370 80% 111.0
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 Autumn 2023: Opening of new commercial facilities, hotels
Slide 41: 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 ■ Breakdown of fares/charges 300 30 25.0 26.7 20.0 200 20 100 3.1 10 FY16.3 Charges → Compensation for the use of facilities, the
Slide 42: Inbound measures in the railway business
Inbound measures in the railway business Product lineup JR-KYUSHU RAIL PASS demand trends ● JR-KYUSHU RAIL PASS, our main product for Strong demand recovery following the easing of protection measures inbound travelers, offers access to a diverse in October 2022 lineup of products depending on the
Slide 43: Railway Business Expenses
Railway Business Expenses Leasing and other fees for the Nishi-Kyushu Shinkansen Perspective on the basis for calculation leasing fees, etc. (concept) We lease facilities from the Japan Railway Construction, Leasing fees, etc., are based on the average benefit Transport and Technology Agency, whic
Slide 44: The BRT on the Hitahikosan Line
The BRT on the Hitahikosan Line On August 28, 2023, BRT service is scheduled to commence on the Soeda–Yoake/Hita segment, which a disaster made impassible in July 2017. The number of stations is expected to triple from pre-disaster levels, to 36 stations, mainly in areas closely connected to dai
Slide 45: Damage to the Hisatsu Line due to Heavy Rains in July 2020
Damage to the Hisatsu Line due to Heavy Rains in July 2020 We participated in the JR Hisatsu Line Review Conference held by the Ministry of Land, Infrastructure, Transport and Tourism and Kumamoto Prefecture concerning policy for restoring the Hisatsu Line. The policy on restoration is being discuss
Slide 46: Rehabilitation of Local Public Transportation Systems
Reference: Partial Overview of Revisions to the Act on Revitalization and Rehabilitation of Local Public Transportation Systems Creation and expansion of mechanisms for restructuring local railroads Background and necessity Due to long-term decline in the number of users resulting from such factor
Slide 47: Examples of Recent Revisions to the Business Portfolio
Examples of Recent Revisions to the Business Portfolio Details Overview and background Impact on performance We acquired the business in 2007 and made it a wholly owned subsidiary in 2019. However, as gaps in the profit structure were expected to widen in comparison with major drugstore chains, 51
Slide 48: 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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