Ntt Inc · TSE:9432
Ntt — Investor Presentation (June 2020)
71 slides from Ntt's investor presentation, June 2020
Slide 1: IR Presentation Ver. 2006
IR Presentation Ver. 2006 Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION
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
Slide 3: Contents
Contents Overview of FY2019 Consolidated Results Fixed-line Communication Business Contribute to Vitalization of Regional Societies and FY2019 Consolidated Results Highlights 4 34 Economies FY2019 Contributing Factors by Segment 5 Local 5G utilization example 35 FY2020 Forecast Summary 6 Migrate PST
Slide 4: Overview of FY2019 Consolidated Results
Overview of FY2019 Consolidated Results Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: FY2019 Consolidated Results Highlights
FY2019 Consolidated Results Highlights Operating Revenues and Profit increased Operating Revenues reached record levels Status of Consolidated Results Operating Revenues: ¥11,899.4B < +¥19.6B [ +0.2%] year-on-year > Operating Income: ¥1,562.2B <(¥131.7B) [ (7.8%)] year-on-year > Profit*: ¥
Slide 6: FY2019 Contributing Factors by Segment
FY2019 Contributing Factors by Segment Operating Revenues <Year-on-year: +19.6> (Billions of yen) Regional Long distance and Data Other elimination of Mobile communications international communications business inter-segment communications business business communications business transactions busin
Slide 7: FY2020 Forecast Summary
FY2020 Forecast Summary We anticipate that new SI orders and sales of various types of services will be affected by the impact of the COVID-19 pandemic. However, because we cannot predict the termination of the pandemic or the arrival of a second wave and cannot reasonably estimate the amount of
Slide 8: Impact of COVID-19
Impact of COVID-19 Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 7
Slide 9: Primary Initiatives in Response to COVID-19 (1)
Primary Initiatives in Response to COVID-19 (1) Ensure the stable provision of services as a designated public institution • Increase in fixed communications service traffic by approximately 50%-60%* during the daytime, and increase in volume of nighttime peak communications by approximately 10%*
Slide 10: Primary Initiatives in Response to COVID-19 (2)
Primary Initiatives in Response to COVID-19 (2) Support measures in the education field For schools: • Free-of-cost set-up and maintenance of online learning environments for schools for a period of time (NTT East) • Free provision of “Omakase Kyoshitsu,” a cloud service for learning support (NTT
Slide 11: Planning for after COVID-19
Planning for after COVID-19 Respond to ongoing maintenance of social distancing • Initiatives for establishment of a remote society (telework, telemedicine/distance learning, etc.) • Support for online administrative procedures, business transactions, etc. • Provision of security solutions Use D
Slide 12: NTT Group Medium-Term Management Strategy
NTT Group Medium-Term Management Strategy Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 11
Slide 13: 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
Slide 14: Medium-Term Targets
Medium-Term Targets Financial Targets EPS Growth EPS Growth ＋50％ ※2 Target FY2023 （vs. FY2017） ＋50％ Overseas Sales / $25B/ FY2023 Overseas Operating 7％ Income Margin ※3 Approx. ※1 Cost Reductions At least ¥800B FY2023 ※1 320 yen (in fixed-line/mobile access networks) （vs. FY2017） 212 ※2 yen ROIC 8％
Slide 15: Transition of Medium-Term Targets
Transition of Medium-Term Targets EPS Growth Cost Reductions *1 （in fixed-line/mobile access networks） Approx. Profit expansion 320yen /share buybacks FY 2017 FY 2018 FY 2019 FY 2023 Target 220yen 231yen ▲220 212yen *2 billion yen ▲500 billion yen FY 2017 FY 2018 FY 2019 FY 2023 Target Esta blish e
Slide 16: Overview of Medium-Term Management Strategy Initiatives
Overview of Medium-Term Management Strategy Initiatives Number of B2B2X Projects：66（＋53）* Promotion of alliances with Toyota, Mitsubishi Corporation, Promote B2B2X Model Microsoft and others Development of smart cities (Austin, UC Berkley campus and others) Launched 5G commercial service Roll Out 5t
Slide 17: Global Business
Global Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 16
Slide 18: Global Business Overview
Global Business Overview Overseas Sales/Overseas Operating Income Margin* Revenue $25B Operating profit Margin $19.5B 7.0％ $18.4B $18.9B 2.4％ Operating Profit 3.2％ 3.1％ $1.75B** $0.56B $0.60B $0.46B FY 2017 FY 2018 FY 2019 FY 2023 Target * Including results from the global holding company, its subsi
Slide 19: 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 Cen
Slide 20: Enhance Competitiveness in Global Business (2)
Enhance Competitiveness in Global Business (2) ”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 （
Slide 21: Structural Reform of NTT Ltd.
Structural Reform of NTT Ltd. Promoted integration at NTT Ltd. since its establishment in July 2019 Promoting structural reforms to realize business shift to attractive markets centered on managed IT services • Streamlining business operations - Optimization by consolidating operations and overl
Slide 22: 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
Slide 23: Smart City Project (Malaysia)
Smart City Project (Malaysia) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 22
Slide 24: Mobile Communication Business
Mobile Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 23
Slide 25: NTT DOCOMO FY2020 Principal Actions
NTT DOCOMO FY2020 Principal Actions Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24
Slide 26: NTT DOCOMO New Rate Plans (1)
NTT DOCOMO New Rate Plans (1) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25
Slide 27: NTT DOCOMO New Rate Plans (2): Comparison with Existing Rates
NTT DOCOMO New Rate Plans (2) Comparison with Existing Rates Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26
Slide 28: NTT DOCOMO New Rate Plans (3)
NTT DOCOMO New Rate Plans (3) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27
Slide 29: NTT DOCOMO Finance/Payment Services
NTT DOCOMO Finance/Payment Services Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28
Slide 30: NTT DOCOMO Actions for 5G (1)
NTT DOCOMO Actions for 5G (1) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29
Slide 31: NTT DOCOMO Actions for 5G (2)
NTT DOCOMO Actions for 5G (2) Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 30
Slide 32: NTT DOCOMO Termination of FOMA (3G) Service
NTT DOCOMO Termination of FOMA (3G) Service Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 31
Slide 33: NTT DOCOMO Cost Efficiency Improvement
NTT DOCOMO Cost Efficiency Improvement Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 32
Slide 34: Fixed-line Communication Business
Fixed-line Communication Business Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 33
Slide 35: Contribute to Vitalization of Regional Societies and Economies
Contribute to Vitalization of Regional Societies and Economies Contribute to Vitalization of Regional Societies and Economies Established a New esports Company • Established “NTTe-Sports” with the aim of contributing to local communities through ICT×esports (NTT East and others, January 31, 2020)
Slide 36: Local 5G utilization example
Local 5G utilization example Realizing the improvement of the manufacturing site by remote monitoring, etc. by utilizing local 5G, eliminates labor shortage and improves productivity .(Collaboration agreement with Yamaguchi Prefecture and joint experimental agreement with Hibiki Seiki Co., Ltd. Ap
Slide 37: 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
Slide 38: Other Businesses
Other Businesses Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 37
Slide 39: Promote B2B2X Model
Promote B2B2X Model Number of B2B2X Projects: 66 (as of the end of March. 2020) 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 2020
Slide 40: Business Partnership with Mitsubishi Corporation
Business Partnership to Pursue ”Industrial Digital Transformation(DX)”with Mitsubishi Corporation Objectives of business partnership: Pursuing DX through cross-industry collaboration • Collaborate Mitsubishi Corporation’s industry knowledge with technologies of NTT Group • Expand its expertise, deve
Slide 41: Business and Capital Alliance with Toyota
Business and Capital Alliance Agreement with Toyota Partnership for the realization of a smart city Basic concept of smart city platform • Social infrastructure for urban development, cooperation of urban functions, and sophistication • A platform that continues to evolve • Providing API to service
Slide 42: Sustainable Cities Partnership Program
Sustainable Cities Partnership Program -Future Urban Solutions initiative- Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 41
Slide 43: Create New Lines of Business: Efficient Asset Management
Create New Lines of Business Promotion of efficient asset management Promotion of efficient asset management • Collaboration with Tokyo Century Corporation (“TC”) on leasing and new fields (NTT Finance) Transfer leasing business (assets: ¥1.3 trillion; liabilities: ¥1.2 trillion) to a JV* with T
Slide 44: 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
Slide 45: Create New Lines of Business: Medical Science Business
Create New Lines of Business Medical Science Business Healthcare Management Support through Big Data • Established “NTT Life Science” (February 3, 2020) Launched the “Genovision” corporate wellness support service (April 1, 2020) • Jointly opened the Project Division of Genomic Medicine and Disea
Slide 46: 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
Slide 47: Create New Lines of Business: Location business
Create New Lines of Business Initiatives in location business Investment in HERE Technologies (December 20, 2019) • Strengthen location information services as a core functions of the “Industrial DX Platform” that we are establishing in collaboration with Mitsubishi Corporation Capital and busin
Slide 48: Create New Lines of Business: Enhance and Globalize R&D
Create New Lines of Business Enhance and Globalize R&D IOWN Global Forum was established in the United States by NTT, Intel Corporation, and Sony Corporation who have excellent leadership in the industry and expertise in the core technology fields of IOWN. (January 23, 2020) 13 member companies
Slide 49: Create New Lines of Business: 4D digital platform
Create New Lines of Business ~4D digital platform~ Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 48
Slide 50: Shareholder Returns/ ESG
Shareholder Returns/ ESG Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 49
Slide 51: Shareholder Returns
Shareholder Returns Dividend Policy • Basic policy is steady dividend increases Share Buybacks • Carry out buybacks flexibly to improve capital efficiency Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 50
Slide 52: Changes in Dividend
Changes in Dividend (Yen) 100 100 95 85% 75 65% Payout Ratio 50 45% 40.9% 41.7% 38.2% 37.2% 38.0% 32.3% 31.2% 33.4% 32.9% 12.5 25 31.4% 30.7% 25% 27.5% 23.0% 19.5% 17.1% 12.3% 13.0% 0 5% • Dividend reflects the two-for-one stock split effective on July 1, 2015 , and January 1, 2020. • FY2003-FY2017,
Slide 53: 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 *7 500 406.5*4 400 381.7 374.1 *6 366.5 *
Slide 54: Changes of EPS and Outstanding Shares
Changes of EPS and Outstanding Shares （Yen） (mio shares) 6,000 EPS(right axis) 250 231 5,293 EPS Growth 5,000 200 (Average Annual Growth Rate +10%) Cumulative total of shares decrease by around ▲30% (▲4% Average Decrease Annually) 4,000 150 3,699 96 3,000 100 2,000 50 1,000 0 2010 2011 2012 2013 201
Slide 55: Promote ESG Management (1)
Promote ESG Management (1) 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 reinfor
Slide 56: Promote ESG Management (2): Environment and Energy Vision
Promote ESG Management (2) Environment and Energy Vision: Zero Environmental Impact Contribute to the reduction of the environmental impact of customers, companies and society Promotion of renewable energy • Aim To increase the proportion of our renewable energy usage to 30% or higher by FY2030 •
Slide 57: Promote ESG Management (3)
Promote ESG Management (3) Strengthening of corporate governance (Adoption an executive officer system , Independent outside director ratio 50%) In order to further strengthen our governance, which contributes to increasing corporate value, we have decided to adopt an executive officer system and
Slide 58: Financial Data, etc.
Financial Data, etc. Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 57
Slide 59: NTT Group Formation
NTT Group Formation Voting rights to major subsidiaries (As of March 31, 2020) Operating revenue：¥4,651.3 billion 66.2% Operating income ：¥ 854.7 billion Mobile communications No. of employees ： 27,500 business No. of subsidiaries： 97 Operating revenue：¥3,079.9 billion 100% Operating income ：¥ 388.3
Slide 60: 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 1.56 1.54 1.35 Income 1.20 1.21 1.08 /Operating Profit （Trillion yen） 0.91 0.90 0.74 0.80 0.85 0.86 0.52 0.59 0.52 ■ Net Income * /Profit （Trillion ye
Slide 61: 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 11,899.4 11,541.0 11,391.0 10,700.7 10,9
Slide 62: 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 1,562.2 1,500 1,348.1 1,202.0 1,213.7
Slide 63: 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 1,970.0 2,000 1,892.8 1,817.5 1,806.6 1,687.2 1,700.0 1,674.8 1,697.9 1,697.0 753.7 703.1 572.8 661.
Slide 64: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） Debt/Equity ratio* 6000.0 60.0% 51.9% 50.8% 49.0% 49.3% 47.1% 46.0% 45.2% 43.9% 40.6% 4000.0 40.0% 4699.9 4406.7 4262.7 2000.0 4036.0 4200.0 4163.3 4088.2 20.0% 3854.8 3971.6 0.0 0.0% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2017 FY2018 FY2019 [IFRS]
Slide 65: 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 296,500 284,550 300,000 275,650 (319,050) 268,450 (284,550) (307,900) 27,500 (274,850) 26,600 (27,55
Slide 66: Number of Employees: Age Distribution
Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2020） 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
Slide 67: Changes in Personnel expenses
Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 991.8 938.5 885.7 827.6 785.1 738.1 709.4 683.2 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 * The scope of aggregation for each of the figures are not audited and are provided for reference only. (24,
Slide 68: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Mobile FTTH Approx. Approx. 184.80M subs 32.7M subs 150M 30M SoftBank SoftBank market share Approx. 25％ 100M KDDI 20M NTT EAST and KDDI market share Approx. 32％ NTT WEST Approx. 22.0M subs 50M NTT DOCOMO 10M Approx. CATV Approx. DSL 6.8M subs 80.0M sub
Slide 69: 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) 2,166 (millions subs) 2,108 2,005 2,053 FY2019 1,926 Hikari Total FTTH Service: +0.58 Change from preceding Fiscal Year Collaboration 4.69
Slide 70: 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 248mil. shares ＜14.1％＞ ＜0.0％＞ Excess Holdings 11
Slide 71: Your Value Partner
Your Value Partner Copyright 2020 NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Nippon Telegraph and Telephone Corporation (NTT) — Investor Presentation (June 2020) on 6ix