Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2019 Earnings Presentation
46 slides from Kyushu Railway's earnings presentation, May 14, 2019
Slide 1: FY19.3 Annual Investors Meeting
FY19.3 Annual Investors Meeting May 14, 2019 Kyushu Railway Company
Slide 2: Contents
Contents Highlights 3 Ⅰ Financial results for FY19.3 4 Ⅱ Forecasts for FY20.3 11 Ⅲ Business Initiatives by Each Segment Under Medium-Term Business Plan 16 APPENDIX 36 2
Slide 3: Highlights
Highlights Results Operating revenues up YoY due to the consolidation of Caterpillar Kyushu, etc. For Consolidated operating income, ordinary income, and net income attributable to FY19.3 owners of the parent down due to higher depreciation at JR Kyushu Operating revenues expected to increase
Slide 4: Ⅰ. Financial results for FY19.3
Ⅰ. Financial results for FY19.3 4
Slide 5: Consolidated Financial Highlights for FY19.3
Consolidated Financial Highlights for FY19.3 Operating revenues up for the 9th consecutive year (set new record) Operating income down for the first time in six periods Net income attributable to owners of the parent down for the first time in 3 years EBITDA up for the 6th consecutive year (
Slide 6: Consolidated Income Statements
Consolidated Income Statements (\bil) FY18.3 FY19.3 YoY Majour Factors Operating revenues 413.3 440.3 26.9 106.5% Increase due to consolidation of Caterpillar Kyushu Increase due to consolidation of Caterpillar Kyushu Operating expenses 349.4 376.4 27.0 107.7% Increase in depreciation costs (JR Kyus
Slide 7: Segment Information 【Summary】(Former Segments)
Segment Information 【Summary】(Former Segments) (\bil) FY18.3 FY19.3 YoY Majour Factors Operating revenues 413.3 440.3 26.9 106.5% Transportation 183.7 185.0 1.2 100.7% Railway Business (non-consolidated) 171.3 172.2 0.9 100.5% Increase in railway transportation revenues, etc. Construction 88.0 91.7
Slide 8: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet (\bil) Increase/ FY18.3 FY19.3 Major Factors (decrease) Total Assets 749.3 801.4 52.0 Cash and time deposits 15.0 16.9 1.9 Short-tem securities 65.0 19.9 (45.1) Decrease in negotiable certificates of deposit, etc. Money held in trust 55.7 56.9 1.1
Slide 9: Non-consolidated Income Statements
Non-consolidated Income Statements (\bil) FY18.3 FY19.3 YoY Majour Factors Operating revenues 219.7 221.9 2.1 101.0% Railway transportation revenues 151.1 151.4 0.3 100.2% Other revenues 68.5 70.4 1.8 102.7% Increase in revenues from real estate leases, etc. Operating expenses 172.9 176.1 3.2 101.9%
Slide 10: Railway business
Railway business Railway Transportation Revenues (\bil) FY18.3 FY19.3 YoY Majour Factors Total 151.1 151.4 0.3 100.2% Commuter pass 32.3 32.4 0.1 100.4% Non-commuter pass 118.8 119.0 0.1 100.2% Shinkansen 54.1 54.9 0.7 101.5% ・Basic trend (approx. 101% ) Commuter pass 2.6 2.7 0.0 102.4% ・Increase du
Slide 11: Ⅱ. Forecasts for FY20.3
Il. Forecasts for FY20.3 11
Slide 12: Strengthening Segment Management—Revising Segment Information
Strengthening Segment Management—Revising Segment Information— We will steadily advance segment management by establishing intermediate holding companies in the station building business and the hotel business, changing segment classifications, etc. Overview of segment classification changes, etc.
Slide 13: Consolidated Financial Highlights for FY20.3
Consolidated Financial Highlights for FY20.3 (\bil) Results Forecasts YoY FY19.3 FY20.3 Operating revenue 440.3 442.3 1.9 100.4% Operating income 63.8 56.6 (7.2) 88.6% Ordinary income 66.5 57.2 (9.3) 86.0% Net income attributable to 49.2 42.5 (6.7) 86.3% owners of the parent EBITDA（Note） 85.4 82.3 (
Slide 14: Consolidated Financial Forecasts (By Segment) (New Segments)
Consolidated Financial Forecasts (By Segment) (New Segments) (\bil) Results Forecasts YoY Majour Factors FY19.3 FY20.3 Operating revenues 440.3 442.3 1.9 100.4% Transportation 181.8 180.4 (1.4) 99.2% Decrease due to revision of recording revenues and expenses related to compensated construction, inc
Slide 15: Non-consolidated Financial Forecasts
Non-consolidated Financial Forecasts (\bil) Results Forecasts YoY Majour Factors FY19.3 FY20.3 Operating revenue 221.9 220.4 (1.5) 99.3% Railway transportation Increase due to leap year and rebound from heavy rain in July revenues 151.4 152.8 1.3 100.9% 2018, etc. Shinkansen 54.9 55.7 0.7 101.3% Bas
Slide 16: Ⅲ. Business Initiatives by Each Segment Under Medium-Term Business Plan
Ⅲ. BUSINESS INITIATIVES BY EACH SEGMENT UNDER MEDIUM-TERM BUSINESS PLAN 16
Slide 17: Creation of 2030 Long-Term Vision
Creation of 2030 Long-Term Vision We created the 2030 Long-Term Vision in a management environment undergoing dramatic change. 2030 Long-Term Vision We will contribute to the sustainable development of Kyushu through city- building initiatives that leverage the distinctive characteristics of local
Slide 18: 2030 Long-Term Vision
2030 Long-Term Vision Negative factors Positive factors Elimination of special tax measures Marketing that leverages online sales data Increase in depreciation due to rebound from Fostering demand through dynamic pricing impairment processing of railway assets Utilizing D&S trains, etc.; e
Slide 19: Issues That Need to be Addressed in the Railway Business
Issues That Need to be Addressed in the Railway Business Countermeasures for aging facilities and rolling stock and addressing disasters while also investing for the future Countermeasures for Using new technologies for the future aging facilities and rolling stock Expand Smart Support Stations
Slide 20: Issues That Need to be Addressed in the Railway Business (MaaS)
Issues That Need to be Addressed in the Railway Business Image of Initiatives for New Mobility Services (MaaS) Collaboration among a variety of transportation modes, such as Urban-style MaaS railways, buses, taxis, and shared bicycles, and advancing city- building initiatives, centered on mobility s
Slide 21: Growth Investment in the Real Estate and Hotels Segment
Growth Investment in the Real Estate and Hotels Segment Major investment projects during the period of the Medium-Term Business Plan (2019-2021) Implementing initiatives to increase the population in the areas around our railway lines by implementing strategic city-building Investment of initiatives
Slide 22: Forming new cities through station building development
Forming new cities through station building development Hakata Station building development (opened March 2011) Comprehensive city-building in coordination with the opening of the Kyushu Shinkansen Aging of facilities 150 福岡地区近距離収入 Short distance revenues in the Fukuoka region 140 Shinkansen ext
Slide 23: Target Management Indicators (Consolidated)(New Segments)
Target Management Indicators (Consolidated)(New Segments) Operating revenues Operating income 500 70 (¥bil) (¥bil) 480.0 63.8 60 57.0 450 440.3 50 400 40 400 40 0 FY19.3 FY20.3 FY21.3 FY22.3 0 FY19.3 FY20.3 FY21.3 FY22.3 ［Reference］EBITDA ［Reference］ROE Approx. ¥85.4 billion ¥90.0 billion 12.4％ More
Slide 24: Transportation Segment
Transportation Segment (Results: Former Segments / Forecasts: New Segments) Transportation Segment performance Results (Former Segments) Forecasts (New Segments) (\bil) FY22.3 Results Results Results Forecasts YoY (medium-term FY18.3 FY19.3 FY19.3 FY20.3 business plan) Operating revenues 183.7 185.0
Slide 25: Initiatives in the Railway Business—Strengthening Earning Power
Initiatives in the Railway Business —Strengthening Earning Power Increasing Shinkansen earning power Railway transportation revenues (Shinkansen), passenger load Accelerate shift toward Internet factor on the Kyushu Shinkansen (Hakata－Kumamoto) (¥bil) reservations 570 57 60% Shinkansen (left) 新幹線（左軸
Slide 26: Initiatives in the Railway Business—Strengthening Earning Power
Initiatives in the Railway Business —Strengthening Earning Power Increasing Urban Area Earning power Implementing Strategic City-Building Initiatives in the Railway transportation revenues (short distance) Regions Around our Business Areas (¥bil) 25.9 Extending the lively atmosphere with new city-bu
Slide 27: Natural Disasters—Kumamoto Earthquakes and Heavy Rains
Natural Disasters—Kumamoto Earthquakes, July 2017 Heavy Rain in Northern Kyushu, and July 2018 Heavy Rain Recovery of Kyudai Main Line achieved on July 14, 2018 July 2017 heavy Kumamoto July 2018 heavy rain in northern earthquakes rain Kyushu Time of April 2016 July 2017 July 2018 occurrence Appro
Slide 28: Real Estate and Hotels Segment
Real Estate and Hotels Segment (Results: Former Segments / Forecasts: New Segments) Real Estate and Hotels Segment performance Results (Former Segments) Forecasts (New Segments) (\bil) FY22.3 Results Results Results Forecasts YoY (medium-term FY18.3 FY19.3 FY19.3 FY20.3 business plan) Operating reve
Slide 29: Implementing Strategic City-Building Initiatives—Increasing City Value
Implementing Strategic City-Building Initiatives in the Regions Around our Business Areas—Increasing City Value with Stations as Bases Station building operation that leverages leasing capabilities Station building tenant sales Condominium business development that leverages brand strength (¥bil
Slide 30: Implementing Strategic City-Building Initiatives—Increasing City Value
Implementing Strategic City-Building Initiatives in the Regions Around our Business Areas—Increasing City Value with Stations as Bases Nagasaki Station Area Development Hakata Station Area Development Uses: Commercial areas, office buildings, hotels, etc. Plan for utilizing the space above the track
Slide 31: Retail and Restaurant Segment
Retail and Restaurant Segment (Results: Former Segments / Forecasts: New Segments) Retail and Restaurant Segment performance Results (Former Segments) Forecasts (New Segments) (\bil) FY22.3 Results Results Results Forecasts YoY (medium-term FY18.3 FY19.3 FY19.3 FY20.3 business plan) Operating revenu
Slide 32: Construction Segment
Construction Segment (Results: Former Segments / Forecasts: New Segments) Construction Segment performance Results (Former Segments) Forecasts (New Segments) (\bil) FY22.3 Results Results Results Forecasts YoY (medium-term FY18.3 FY19.3 FY19.3 FY20.3 business plan) Operating revenues 88.0 91.7 3.7 1
Slide 33: Other Segment
Other Segment (Results: Former Segments / Forecasts: New Segments) Other Segment performance Results (Former Segments) Forecasts (New Segments) (\bil) FY22.3 Results Results Results Forecasts YoY (medium-term FY18.3 FY19.3 FY19.3 FY20.3 business plan) Operating revenues 67.4 89.8 22.4 133.3% 72.6 71
Slide 34: Sources/Uses of Funds, and Principal Management Indicators
Sources/Uses of Funds, and Principal Management Indicators Over the period of the medium-term business plan, we will aim for capital investment of ¥340.0 billion, which will exceed our cumulative consolidated operating cash flow. We will take a flexible approach to investment opportunities and work
Slide 35: Shareholder Return
Shareholder Return Shareholder Return Policy JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY22.3, we will aim for a total payout ratio of 35% while providing stable dividends and implementing share repurchase depending on the si
Slide 36: APPENDIX
APPENDIX 36
Slide 37: Review of the Medium-Term Business Plan 2016-2018
Review of the Medium-Term Business Plan 2016-2018 Due to favorable results in revenues from railway transportatio n and in the construction segment, we surpassed the financial targets (operating revenues and EBITDA) in the previous medium-term business plan. ［Reference］Capital investment surpass
Slide 38: Review of the JR Kyushu Group Medium-Term Business Plan 2016–2018
Review of the JR Kyushu Group Medium-Term Business Plan 2016–2018 Previous Medium-Term Business Plan Current Medium-Term Business Plan FY17.3 FY18.3 FY19.3 FY20.3 and Beyond Kumamoto earthquakes (Apr. 2016) Heavy rain in northern Kyushu (July 2017) Heavy rains (July 2018) Listing on stock exchange (
Slide 39: EBITDA by Segment (Former Segments)
EBITDA by Segment (Former Segments) Notes: Transportation Real Estate Figures for the Transportation segment EBITDA up to and (¥bil) (¥bil) including FY16.3 contain earnings from use of the Management 34.3 343 34.4 343 20% 400 Stabilization Fund (¥12.5 billion in EBITDA 40 EBITDA 50% 350 35 FY15.3,
Slide 40: Progress of Business Initiatives
Progress of Business Initiatives Station Building Business Retail and Restaurant Store Hotel (Ryokan) Business Revenues Numbers Revenues (¥bil) （Stores） (¥bil) 450 45 750 200 20 418 41.8 403 40.3 701 706 386 693 149 14.9 40 400 38.6 700 142 367 14.2 36.7 665 150 15 130 13.0 130 13.0 350 35 650 297 2
Slide 41: Changes in Cost Structure
Changes in Cost Structure Elimination of Special Tax Measures Elimination of special tax measures (special tax breaks implemented following the privatization of Japanese National Railways and provisions extending the period of these breaks) effective March 31, 2019 (period extending provisions eli
Slide 42: JR Kyushu's Capital Structure
JR Kyushu’s Capital Structure Capital calculated as difference between assets and liabilities at time of privatization of Japanese National Railways in 1987 JR Kyushu established with excessive levels of capital (additional paid-in capital) due to low levels of liabilities Note: The three JR com
Slide 43: Net Cash on March 31, 2019
Net Cash on March 31,2019 Overview of Net Interest-Bearing Debt Net Interest-Bearing Debt on March 31, 2018*1 (¥mil) Interest bearing debt Cash and cash equivalents Net interest- Borrowings Cash and deposits Securities Money held in trust bearing debt 87,324 15,064 65,077 55,783 (48,600) Net Interes
Slide 44: Major Properties
Major Properties Floor space Tenant Opening/ Asset type Name Location Units sales Major tenants Acquisition Rooms FY19.3 Kokura Kita Ward, AMU PLAZA Kokura Mar 1998 Approx. 48,500m2 ¥12.5 bil UNITED ARROWS, Francfranc, etc. Kitta Kyusyu Onoemachi, Nagasaki TOKYU HANDS, MUJI, AMU PLAZA Nagasaki Sep 2
Slide 45: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Units Notes (Uses, etc.) Rooms Area below elevated tracks Lot area: Approx. 70,000m2 Area below elevated tracks: Commercial area opened in Mar 2018 (including area below elevated Sta. building: Commercial area, movie
Slide 46: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. The Company decided on these forward-looking statements based on the available information, as well as Company estimates and assumptions, at the time the
Kyushu Railway Company — FY2019 Earnings Presentation on 6ix