Ntt Inc · TSE:9432

Ntt — Investor Presentation (November 2019)

65 slides from Ntt's investor presentation, November 2019

  1. Slide 1: IR Presentation

    IR Presentation Ver. 1911-3 Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

  2. Slide 2: Translation notice and forward-looking statements

    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

  3. Slide 3: Contents

    Contents Overview of Consolidated Results for FY2019.2Q Other Businesses Status of Consolidated Results for FY2019.2Q 4 Promote B2B2X Model 33-34 Create New Lines of Business Contributing Factors by Segment for FY2019.2Q 5 35 ~Smart Energy Business~ FY2019 Forecast Summary 6 Create New Lines of Busi

  4. Slide 4: Overview of Consolidated Results for FY2019.2Q

    Overview of Consolidated Results for FY2019.2Q Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3

  5. Slide 5: Status of Consolidated Results for FY2019.2Q

    Status of Consolidated Results for FY2019.2Q  Operating Revenues increased and Operating Income decreased  Operating Revenues reached record second-quarter levels Status of Consolidated Results  Operating Revenues: ¥5,889.6B < +¥96.4B [ +1.7%] year-on-year >  Operating Income: ¥982.8B < (¥87.9B)

  6. Slide 6: Contributing Factors by Segment for FY2019.2Q

    Contributing Factors by Segment for FY2019.2Q Operating Revenues <Year-on-year: +96.4> (Billions of yen) Mobile Regional Long distance and Data Other elimination of communications communications international communications business inter-segment business business communications business transaction

  7. Slide 7: Financial Results Forecast for FY2019

    Financial Results Forecast for FY2019  Operating Revenues forecast has been revised upward  Operating Income forecast remains same as initial forecast Plan for Consolidated Revenues and Income Financial Results Change from Initial Forecast (announced on May 10, 2019) Forecast Initial Forecast (ann

  8. Slide 8: NTT Group Medium-Term Management Strategy

    NTT Group Medium-Term Management Strategy Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 7

  9. Slide 9: Our Vision

    Our Vision Towards a sustainable society/SDGs To resolve social issues through our business operation, NTT Group works together with our partners, as “Your Value Partner.” Partners Social Issue Resolution through business operation Digital Transformation × CSR NTT Group As a Public Utility and a Pri

  10. Slide 10: Medium-Term Targets

    Medium-Term Targets Financial Targets EPS Growth EPS Growth ＋50％ ※1 Target FY2023 （vs. FY2017） ＋50％ Overseas Sales / $25B/ FY2023 Overseas Operating 7％ Income Margin ※2 Approx. Cost Reductions At least ¥800B FY2023 640 yen (in fixed-line/mobile access networks) （vs. FY2017） 425 ROIC 8％ ※1 yen FY2023

  11. Slide 11: Transition of Medium-Term Targets

    Transition of Medium-Term Targets EPS Growth Cost Reductions （in fixed-line/mobile access networks） Approx. Profit expansion 640yen /share buybacks FY 2017 FY 2018 FY 2019 (E) FY 2023 Target 440yen 462yen *2 ▲220 425yen *1 billion yen ▲470 billion yen FY 2017 FY 2018 FY 2019 (E) FY 2023 Target Esta

  12. Slide 12: Global Business

    Global Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 11

  13. Slide 13: Global Business Overview

    Global Business Overview Overseas Sales/Overseas Operating Income Margin* Revenue $25B Operating profit Margin $20B 7.0％ $18.4B $18.9B 3.5％ Operating Profit 3.2％ 3.1％ $1.75B** $0.56B $0.60B $0.70B FY 2017 FY 2018 FY 2019 (E) FY 2023 Target * Including results from the global holding company, its sub

  14. Slide 14: Enhance Competitiveness in Global Business ①

    Enhance Competitiveness in Global Business ① Aug. 2018 Nov. 2018 July. 2019 NTT NTT NTT Global Holding Company （New） Global Holding Company (Company name：NTT, Inc.) (Company name：NTT, Inc.) NTT Communications NTT Communications Global OpCo (NTT Ltd.) （New） Dimension Data Dimension Data ※1 Data Cente

  15. Slide 15: Enhance Competitiveness in Global Business ②

    Enhance Competitiveness in Global Business② ”One NTT” Global Growth Strategy Deliver High Value Solutions Create New Innovative Solutions Business Modernization Disruptive Innovation Industry Advisory Expertise Drives Global Innovation Fund Outcome-Based Solutions Invest in the Next Innovative （ Fin

  16. Slide 16: Enhance Competitiveness in Global Business ③

    Enhance Competitiveness in Global Business③ Enhance Competitiveness in Global Business (1 of 2)  Promoted rebranding at NTT Ltd. to further expand the NTT brand globally • Changed the logo of overseas subsidiaries to an NTT logo (October 1, 2019) • Started changing company names in each region to n

  17. Slide 17: Enhance Competitiveness in Global Business ④

    Enhance Competitiveness in Global Business④ Enhance Competitiveness in Global Business (2 of 2)  Entered into a technology partnership with Major League Baseball (MLB) (September 4, 2019) • Successfully delivered ultra-realistic live viewing with NTT’s most advanced “Ultra Reality Viewing” technolo

  18. Slide 18: Smart City Project (Las Vegas City)

    Smart City Project (Las Vegas City) Pain Point of the City: To reduce “Response Time” Requirements: ① Reactive actions: Notify “What is going on？” ② Proactive actions: Notify “What is going to happen next？” ③ Flexible ICT : Deploy ICT resources ASAP NW bandwidth Judgement by Authorities Actions by O

  19. Slide 19: Mobile Communication Business

    Mobile Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 18

  20. Slide 20: NTT DOCOMO FY2019 Key Actions

    NTT DOCOMO FY2019 Key Actions Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 19

  21. Slide 21: NTT DOCOMO New Rate Plans

    NTT DOCOMO New Rate Plans Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 20

  22. Slide 22: NTT DOCOMO Comparison with Existing Rates

    NTT DOCOMO Comparison with Existing Rates Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 21

  23. Slide 23: NTT DOCOMO New Rate Plans

    NTT DOCOMO New Rate Plans Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 22

  24. Slide 24: NTT DOCOMO Increased Rate Plan Options

    NTT DOCOMO Increased Rate Plan Options Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 23

  25. Slide 25: NTT DOCOMO “d POINT CLUB” Members

    NTT DOCOMO “d POINT CLUB” Members （Million Subs） Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24

  26. Slide 26: NTT DOCOMO 5G Pre-Commercial Service

    NTT DOCOMO 5G Pre-Commercial Service Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25

  27. Slide 27: NTT DOCOMO 5G Base Station Deployment Plan

    NTT DOCOMO 5G Base Station Deployment Plan Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26

  28. Slide 28: NTT DOCOMO Termination of FOMA (3G) Service

    NTT DOCOMO Termination of FOMA (3G) Service Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27

  29. Slide 29: NTT DOCOMO Cost Efficiency Improvement

    NTT DOCOMO Cost Efficiency Improvement Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28

  30. Slide 30: Fixed-line Communication Business

    Fixed-line Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29

  31. Slide 31: Contribute to Vitalization of Regional Societies and Economies

    Contribute to Vitalization of Regional Societies and Economies Contribute to Vitalization of Regional Societies and Economies  Launched the “IoT Temperature Management Service,” which automates measurement and management of temperatures, for factories and stores involved in food manufacturing (NTT

  32. Slide 32: 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

  33. Slide 33: Other Businesses

    Other Businesses Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 32

  34. Slide 34: Promote B2B2X Model

    Promote B2B2X Model  Number of B2B2X Projects: 54 (as of the end of Sep. 2019)  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 2021 FY 2023 target Number of Projects 39 100 Copyright 2019 N

  35. Slide 35: Promote B2B2X Model

    Promote B2B2X Model Promote B2B2X Model As of the end of As of the time of FY2019.2Q announcement of (September 30, 2019) “Your Value Partner 2025” (October 31, 2018)  Number of B2B2X Projects: 54（＋41） 13  Supported the offering of a new lending service for financial institutions • Offered the “DO

  36. Slide 36: Create New Lines of Business ~Smart Energy Business~

    Create New Lines of Business ~Smart Energy Business~ Promotion of Smart Energy Business FY2025 (Target)  Acquisition of ENNET Corporation (May 10, 2019)  Establishment of “NTT Anode Energy” (June 3, 2019)  Reorganized ENNET and NTT Smile Energy as a member of the NTT Anode Energy Group (October 2

  37. Slide 37: Create New Lines of Business ~Medical Science Business~

    Create New Lines of Business ~Medical Science Business~ Healthcare Management Support through Big Data  Leverage NTT Group’s data analysis and security technology to establish a healthcare recommendation business that contributes to health promotion  Jointly opened the Project Division of Genomic

  38. Slide 38: Create New Lines of Business ~Smart Infra Business~

    Create New Lines of Business ~Smart Infra Business~ Promotion of the Smart Infra Business  Promoted the Smart Infra business, which leverages group technology, know-how and assets to solve social infrastructure issues such, as infrastructure equipment and facilities  Will reorganize “NTT GEOSPACE

  39. Slide 39: Other Medium-Term Management Strategy Initiatives

    Other Medium-Term Management Strategy Initiatives Drive Self-Digital Transformation in Domestic Business  Started the implementation of cloud-based IT system to automate operations for subscription, provisioning and billing of services (anticipated to be completed in FY2024*) * Excludes certain ser

  40. Slide 40: Other Medium-Term Management Strategy Initiatives

    Other Medium-Term Management Strategy Initiatives Enhance and Globalize R&D  NTT, Intel and Sony acted as pioneers to establish the IOWN Global Forum and began recruiting partners (October 31, 2019)  Promoted joint research with JAXA to provide for ultra-high-speed, large-capacity, secure optical

  41. Slide 41: Disaster Countermeasure Initiatives (1 of 2)

    Other Medium-Term Management Strategy Initiatives Disaster Countermeasure Initiatives (1 of 2)  There has been an increased impact from large-scale disasters due to the increased intensity of disaster energy in recent years Increasing Impact on Communications Facilities and Services FY2019 Disaster

  42. Slide 42: Disaster Countermeasure Initiatives (2 of 2)

    Other Medium-Term Management Strategy Initiatives Disaster Countermeasure Initiatives (2 of 2)  Promoted the strengthening of base stations and other equipment and the acceleration of recovery support, in light of the increasing impact on communications equipment and services and increasingly long

  43. Slide 43: Shareholder Returns/ ESG

    Shareholder Returns/ ESG Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 42

  44. Slide 44: Shareholder Returns

    Shareholder Returns Dividend Policy • Basic policy is steady dividend increases Share Buybacks • Carry out buybacks flexibly to improve capital efficiency Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 43

  45. Slide 45: Shareholders Returns etc.

    Shareholders Returns etc. Dividends  Aggregate annual dividends for FY2019 expected to increase to ¥190 per share (an increase of ¥10 from FY2018) ※Dividend has not been adjusted to reflect the two-for-one stock split with an effective date of January 1, 2020 authorized by the board of directors at

  46. Slide 46: Enhancement of Plans to Encourage Investments by Individual Investors

    Enhancement of Plans to Encourage Investments by Individual Investors Description of Initiatives  Stock Split • Objective: Lower the minimum investment price per unit of NTT, thereby facilitating an environment where it is easier to invest in NTT’s shares and expanding NTT’s investor base • Stock S

  47. Slide 47: Changes in Dividend

    Changes in Dividend 190 (Yen) 200 180 85% 150 65% Payout Ratio 100 45% 40.9% 41.1% 38.2% 37.2% 38.0% 32.3% 33.4% 32.9% 25 50 31.2% 31.4% 30.7% 25% 27.5% 23.0% 19.5% 17.1% 12.3% 13.0% 0 5% • Dividend is adjusted according to the two-for-one stock split effective on July 1, 2015. (This has not been ad

  48. Slide 48: Record of Share Buybacks

    Record of Share Buybacks Approx. 4 Trillion Yen in Buybacks From From From From From From From From From From Market/ Market/Gov’t From Gov’t Market/ Market/ Gov’t Market Gov’t Market Market / Gov’t Market Gov’t Market Gov’t (Billions of yen) 600 539.4 501.1 500 *4 406.5 381.7 *6 400 366.5 374.1 *5

  49. Slide 49: Changes of EPS and Outstanding Shares

    Changes of EPS and Outstanding Shares （Yen） (mio shares) 3,000 EPS(right axis) 500 462 2,646 2,500 EPS Growth 400 (Average Annual Growth Rate +10%) Cumulative total of shares decrease by around ▲30% (▲4% Average Decrease Annually) 2,000 300 1,852 193 1,500 200 1,000 100 2010 2011 2012 2013 2014 2015

  50. Slide 50: Promote ESG Management

    Promote ESG Management Environment Social Governance  Reduce environmental  Promote diversity  Enhance structure on impact  Protect personal the basis of the intent  Leverage ICT to information of Japan’s Corporate contribute to the  Support customers in Governance Code environment reinforcing

  51. Slide 51: Strengthen Corporate Governance

    Strengthen Corporate Governance Improve the Presence of Outside and Female Members of the Board  From the perspective of strengthening the supervisory function of the Board of Directors and improving corporate governance, and at the same time promoting diversity, we have increased the number of out

  52. Slide 52: Financial Data, etc.

    Financial Data, etc. Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 51

  53. Slide 53: NTT Group Overview

    NTT Group Overview • Operating revenues (consolidated) ：¥11,879.8 billion *1 Voting rights to major subsidiaries (As of March 31, 2019) • Operating income ：¥1,693.8 billion *2 NTT, Inc.(global holding company), was established with the goal of *2 enhancing NTT Group's overall competitiveness and pro

  54. Slide 54: Trend in Consolidated Financial Results

    Trend in Consolidated Financial Results 11.9 11.9 11.8 11.8 ■ Operating 11.5 11.4 Revenues 11.1 （Trillion yen） 10.9 10.7 ■ Operating 1.64 1.64 1.69 1.54 1.55 1.35 Income 1.20 1.21 1.08 （Trillion yen） 0.91 0.90 0.74 0.80 0.85 0.86 0.52 0.59 0.52 ■ Net Income （Trillion yen） 456 462 450 440 391 350 255

  55. Slide 55: Changes in Consolidated Operating Revenues

    Changes in Consolidated Operating Revenues ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business （Billion yen） 15,000 11,799.6 11,782.1 11,879.8 11,890.0 11,541.0 11,391.0 10,700.7 10,9

  56. Slide 56: Changes in Consolidated Operating Income

    Changes in Consolidated Operating Income ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,693.8 1,642.8 1,641.1 1,539.8 1,550.0 1,500 1,348.1 1,202.0 1,213.7

  57. Slide 57: Changes in CAPEX

    Changes in CAPEX ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,970.0 1,892.8 1,817.5 1,750.0 1,687.2 1,700.0 1,674.8 1,697.9 1,697.0 753.7 703.1 661.8 570.

  58. Slide 58: Changes in Interest-bearing Debt

    Changes in Interest-bearing Debt Debt/Equity ratio* （Billion yen） 6000.0 60.0% 50.8% 49.0% 49.3% 47.1% 45.2% 43.9% 46.0% 40.6% 4000.0 40.0% 4200.0 4406.7 4262.7 4300.0 2000.0 4036.0 4163.3 4088.2 3971.6 20.0% 3854.8 0.0 0.0% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2017 FY2018 FY2019E [IFRS] [IFR

  59. Slide 59: Changes in Number of Employees

    Changes in Number of Employees ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business 287,500 300,000 273,650 280,000 (311,900) 268,450 (303,350) (282,550) (274,850) 27,700 26,600 27,450

  60. Slide 60: 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, 2019） 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

  61. Slide 61: Changes in Personnel expenses

    Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 991.8 938.5 885.7 827.6 785.1 (43,850) 738.1 709.4 684.0 (28,100) (27,450) (26,750) (122,500) (111,300) (117,100) 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019E * The scope of aggregation for each of th

  62. Slide 62: Broadband Access Services in Japan

    Broadband Access Services in Japan Mobile Fixed Mobile Approx. FTTH 179.64M subs Approx. 150M 30M 32.0M subs SoftBank SoftBank market share Approx. 25％ 100M KDDI 20M NTT EAST and KDDI market share Approx. 31％ NTT WEST Approx. 21.0M subs 50M NTT DOCOMO 10M Approx. CATV Approx. DSL 6.9M subs 77.0M sub

  63. Slide 63: Fixed Broadband Business FTTH Subscriptions

    Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West） * Reference: FY2019 Breakdown of FTTH Subscriptions (millions subs) 2,168 (millions subs) 2,108 2,005 2,053 FY2019E 1,926 Hikari Total FTTH Service: +0.60 Change from preceding Fiscal Year Collaboration 4.6

  64. Slide 64: Share Buybacks and Cancellation

    Share Buybacks and Cancellation ＜＞：share holding ratio Buyback Buyback from Buyback from Buyback from from Cancellation Gov’t and Cancellation Gov’t and Cancellation Gov’t and market Market Market Market Treasury Stocks Treasury Stocks Excess Holdings 124mil. shares ＜14.1％＞ ＜0.0％＞ Excess Holdings 59

  65. Slide 65: Your Value Partner

    Your Value Partner Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Nippon Telegraph and Telephone Corporation (NTT) — Investor Presentation (November 2019) on 6ix