Kyushu Railway Company · TSE:9142
Kyushu Railway — H1 FY2018/3 Earnings Presentation
42 slides from Kyushu Railway's earnings presentation, Nov 10, 2017
Slide 1: FY2018/3 Semi-Annual Investors Meeting
FY2018/3 Semi-Annual Investors Meeting November 10, 2017 Kyushu Railway Company 11
Slide 2: Contents
Contents Ⅰ Financial results for the first half of FY2018/3 3 Ⅱ Forecasts for FY2018/3 14 Ⅲ Progress of the Medium-Term Business Plan 19 Ⅳ Individual business initiatives 24 Appendix 38 2
Slide 3: Financial results for the first half of FY2018/3
Ⅰ Financial results for the first half of FY2018/3 3
Slide 4: Consolidated Financial Highlights for the First Half of FY2018/3
Consolidated Financial highlights for the First Half of FY2018/3 (Year on Year) • Operating revenues increased due to a rise in railway transportation revenues owing to such factors as the dissipating impact from the 2016 Kumamoto earthquakes, in addition to higher revenues form condominium sales. •
Slide 5: Consolidated Income Statements
Consolidated Income Statements (Billions of yen) YoY 6 months ended 6 months ended Sep 30, 2016 Sep 30, 2017 Increase/ Major factors % (decrease) A B B-A B/A Railway transportation revenues +4.1 Operating revenues 172.0 189.4 17.3 110.1% Revenues from condominium sales ＋5.1 Condominium selling costs
Slide 6: Segment Information (Summary)
Segment Information (Summary) (Billions of yen) YoY 6 months ended 6 months ended Sep 30, 2016 Sep 30, 2017 Increase/ % (decrease) A B B-A B/A Operating revenues 172.0 189.4 17.3 110.1% Transportation 83.9 89.5 5.5 106.6% Construction 24.7 27.8 3.0 112.3% Real Estate 24.6 30.9 6.3 125.6% (Real Estat
Slide 7: Segment Information ①
Segment Information ① ◆ Transportation Segment （Billions of yen） YoY 6 months ended 6 months ended Increase/ Sep 30, 2016 Sep 30, 2017 % (decrease) A B B-A B/A Operating revenues 83.9 89.5 5.5 106.6% Operating income 15.2 18.0 2.7 118.1% EBITDA 16.4 20.3 3.9 123.9% ◆ Construction Segment （Billions o
Slide 8: Segment Information ②
Segment Information ② ◆ Real Estate Segment （Billions of yen） YoY 6 months ended 6 months ended Sep 30, 2016 Sep 30, 2017 Increase/ % (decrease) A B B-A B/A Operating revenues 24.6 30.9 6.3 125.6% Operating income 10.3 11.7 1.3 113.1% EBITDA 14.6 16.0 1.4 109.8% (Reprint) Real Estate Lease （Billions
Slide 9: Segment Information ③
Segment Information ③ ◆ Retail and Restaurant Segment （Billions of yen） YoY 6 months ended 6 months ended Sep 30, 2016 Sep 30, 2017 Increase/ % (decrease) A B B-A B/A Operating revenues 50.0 51.5 1.4 102.9% Operating income 1.6 1.8 0.1 110.4% EBITDA 2.5 2.6 0.1 105.8% ◆ Other Segments （Billions of y
Slide 10: Financial Position and Status of Cash Flows (consolidated)
Financial Position and Status of Cash Flows (consolidated) (Billions of yen) As of March As of Sep Increase/ Financial Position 31, 2017 30, 2017 (decrease) A B B-A Assets 676.6 682.7 6.0 Current assets 198.6 181.6 (16.9) Non-current assets 478.0 501.0 22.9 Liabilities 328.2 317.4 (10.7) Current ass
Slide 11: Nonconsolidated Income Statements
Nonconsolidated Income Statements (Billions of yen) 6 months ended 6 months ended YoY Sep 30, 2016 Sep 30, 2017 Increase/ Major factors % (decrease) A B B-A B/A Operating revenues 93.2 104.1 10.9 111.8% Revenues from condominium sales +5.1 Dissipating impacts from the 2016 Kumamoto (Railway transpor
Slide 12: Non-consolidated Income Statements (Reprint)
Non-consolidated Income Statements (Reprint) （Billions of yen） YoY 6 months ended 6 months ended Sep 30, 2016 Sep 30, 2017 Increase/ % (decrease) A B B-A B/A Operating revenues 78.6 83.5 4.9 106.2% Railway business Operating expenses 63.5 65.8 2.2 103.6% Operating income 15.0 17.6 2.6 117.5% Operati
Slide 13: Railway Transportation Revenues and Performance of Transportation Volume
Railway Transportation Revenues and Performance of Transportation Volume （Billions of yen） YoY 6 months ended 6 months ended Transportation Revenues Increase/ Major factors Sep 30, 2016 Sep 30, 2017 % (decrease) A B B-A B/A Total 71.1 75.3 4.1 105.9% － Shinkansen 23.7 26.9 3.1 113.4% Dissipating imp
Slide 14: Forecasts for FY2018/3
Ⅱ Forecasts for FY2018/3 14
Slide 15: Consolidated Financial Forecasts
Consolidated Financial Forecasts （Billions of yen） Difference Forecast FY2018/3 YoY between the Results forecasts FY2017/3 Increase/ As of August 10 As of November 9 % Increase/ (decrease) (Decrease) A B C C-A C/A C-B Operating revenues 382.9 396.3 405.3 22.3 105.8% 9.0 Operating income 58.7 56.2 59
Slide 16: Consolidated Financial Forecasts (By segment)
Consolidated Financial Forecasts (By segment) （Billions of yen） Forecast FY2018/3 YoY Difference between the Results forecasts FY2017/3 Increase/ As of August 10 As of November 9 % Increase/ (decrease) (Decrease) A B C C-A C/A C-B Operating revenues 382.9 396.3 405.3 22.3 105.8% 9.0 Transportation 1
Slide 17: Non-consolidated Financial Forecasts
Non-consolidated Financial Forecasts （Billions of yen） Difference Forecast FY2018/3 YoY between the Results forecasts FY2017/3 As of August As of Increase/ % Increase/ 10 November 9 (decrease) (Decrease) A B C C-A C/A C-B Operating revenues 212.2 215.5 218.1 5.8 102.8% 2.6 (Railway transportation re
Slide 18: Non-consolidated Financial Forecasts (Reprint)
Non-consolidated Financial Forecasts (Reprint) （Billions of yen） Difference Forecast FY2018/3 YoY between the Results forecasts FY2017/3 As of November Increase/ As of August 10 % Increase/ 9 (decrease) (Decrease) A B C C-A C/A C-B Operating revenues 164.9 169.0 170.2 5.2 103.2% 1.2 Railway business
Slide 19: Progress of the Medium-Term Business Plan
Ⅲ Progress of the Medium-Term Business Plan 19
Slide 20: Position of the Medium-Term Business Plan 2016–2018
Position of the Medium-Term Business Plan 2016–2018 Aiming to be a kind and robust corporate group involved in comprehensive city-building Actively promoting city-building through strong railway construction and diverse businesses and further solidifying business foundations in Kyushu Steadily m
Slide 21: Target Management Indicators (FY2019/3)
Target Management Indicators ◆ Target Indicators (FY 2019/3) ＜ Operating revenues: ¥400 billion ＞ ＜EBITDA: ¥78 billion＞ Share of revenues excluding those from railway transportation ¥ Billions Over 62% ¥ Billions 4,500 800 80 77.4 450 73.2 3.3 405.3 69.1 3.3 5.4 377.9 382.9 3.3 5.1 4.9 600 60 3,000
Slide 22: Target Management Indicators: Capital Investment Amounts
Target Management Indicators ＜Capital Investment Amounts[Reference]＞ ¥ Billions 900 ¥190 billion 90 (FY 2017/3–2019/3 totals) 69.4 68.7 600 60 (Main details) 35.9 36.0 Investments to improve safety 300 30 in the railway business ¥65 billion 22.9 18.1 Growth investments ¥80 billion 00 FY17.3 17.3期
Slide 23: Returns to Shareholders
Returns to Shareholders ◆ Dividend Policy Until FY 2019/3, we will aim for stable dividends per share with a consolidated payout ratio at a level of approximately 30% as the standard guideline. Note: Taking into account the fact that the period between the Company’s public listing and the year- end
Slide 24: Individual business initiatives
Ⅳ Individual business initiatives 24
Slide 25: Creating Synergies Between Businesses through City-Building
Creating Synergies Between Businesses through City-Building Development of versatile businesses that leverages the security and trust and customer attraction capabilities cultivated in the railway business Contribution of city-building to increased ridership and short-distance transportation in
Slide 26: Strong Railway Business as the Foundation for All Business
Strong Railway Business as the Foundation for All Business Stable revenues from railway passenger traffic following establishment of position as an important transportation method connecting all of Kyushu Strong JR Kyushu brand known for safety and reliability in Kyushu to be cultivated by opera
Slide 27: Initiatives in the Railway Business—Bolstering Profitability
Initiatives in the Railway Business—Bolstering Profitability Further increase train usage and bolster profitability by encouraging the use of the “JR Kyushu Internet Reservation Service” and actively promoting policies focused on inbound demand ＜Number of Reservations through the ＜Internet Strateg
Slide 28: Initiatives in the Railway Business—Pursuing Efficient Business Operations
Initiatives in the Railway Business —Pursuing Efficient Business Operations Pursue technological innovation and efficient business operations to respond flexibly to rapidly changing operating environment and diversifying customer needs ＜Streamlining of Business Operation System＞ Expand Smart Sup
Slide 29: Natural Disasters—Heavy Rain in Northern Kyushu
Natural Disasters—Heavy Rain in Northern Kyushu <Heavy rain in northern Kyushu> Time of occurrence • July 2017 Main details on damage • Kyudai Main Line Occurrence of leaks on the ■Sediment runoff on the premises of ■Leaks on the Kagetsugawa Bridge between Teruoka Chikuzen-Iwaya Station, Hitahik
Slide 30: Natural Disasters—Typhoon No. 18
Natural Disasters—Typhoon No. 18 <Typhoon No. 18> Time of occurrence • September 2017 Main details on damage • Nippo Main Line Occurrence of damage on ■Sediment runoff on the Nippo Main Line between Tsukumi Station and Hishiro Station multiple tracks, including sediment runoff on the premises of
Slide 31: Real Estate Segment Driving Growth and Evolution
Real Estate Segment Driving Growth and Evolution Important segment comprising real estate lease and sales operations and accounting for approximately 40% of consolidated EBITDA Develops operations focused on station buildings and other commercial facilities, office buildings, and condominiums in
Slide 32: Initiatives in the Station Building Business
Initiatives in the Station Building Business Carry out attractive and lively city-building centered on train stations and rooted in local communities Maximize synergistic effects with the railway business with the aim of improving the value of our stations and station buildings ＜Performance of T
Slide 33: Opening of Ropponmatsu 421
Opening of Ropponmatsu 421 Acquired a former site of Kyushu University to promote city-building in an inner-city area that is distant from the Company’s train lines 【Artist rendition of building exteriors】*As seen from National Route 202 ◆Ropponmatsu 421 ＜SJR Ropponmatsu＞ ＜MJR Ropponmatsu＞ ＜Roppon
Slide 34: Initiatives in the Apartment Business
Initiatives in the Apartment Business ＜Rental Apartments＞ Secure stable profits by promoting new <Acquisition of Higashi-Jujo Rental Apartments> business development Location Higashi-Jujo, Kita Ward, Tokyo Name Location Start of move-in availability Number of units Four-minute walk from Higashi-Ju
Slide 35: Taking on Challenges outside of the Kyushu Area
Taking on Challenges outside of the Kyushu Area —Pursuing Further Growth Promote the expansion of our various businesses, including our retail and restaurant, hotel, apartment, and construction businesses, targeting all of Japan and other markets in Asia <Hotel Business> <Overseas Business> ◆Openi
Slide 36: Major Development Pipeline
Major Development Pipeline Continue to strengthen profitability through large-scale developments Without being limited to areas surrounding train stations, actively pursue development in urban areas as a “city-building” company Promote expansion outside of the Kyushu area, including Tokyo and
Slide 37: Kumamoto Station Development Project
Kumamoto Station Development Project ◆Overview of Plan for Kumamoto Station Building West parking Commercial 高架下商業施設facility Schematic N garage 西立体駐車場 配置図 Layout ・Lot area: 19,000 m2 ・Total floor space West : 107,000 m2 Residential 住居系等 development, parking 西立体駐車場 garage Station 駅前広場 plaza (Shinkans
Slide 38: Appendix
Appendix 38
Slide 39: EBITDA by Segment
EBITDA by Segment ＜Transportation＞ ＜Real Estate ＞ EBITDA EBITDA EBITDAマージン EBITDA margin ¥Billion EBITDA EBITDA EBITDA margin EBITDAマージン margin ¥Billion 32.8 31.6 330 33 20% 320 31.1 50% 32 28.5 28.4 27.0 18.0% 25.8 25.1 24.3 22.7 220 22 16.2% 46.9% 46.5% 16% 160 16 46.2% 45% 45.7% 45.8% 14.1% 110 1
Slide 40: Major Properties
Major Properties Timings Floor space / Units / Asset type Name Location Tenant sales (FY2017/3) Major tenants (Opening / Acquisition) Rooms Commercial facility Kokura Kita Ward, Kitta AMU PLAZA Kokura Mar. 1998 Approx. 48,500㎡ ￥12.0 billion UNITED ARROWS, Francfranc, etc. (Station building) Kyusyu T
Slide 41: Overview of Major Development Pipelines
Overview of Major Development Pipelines Name Location Timings Floor space / Lot area / Units / Rooms Additional comments (uses, etc.) Spring 2018: Scheduled start of operations in area under elevated tracks Lot area: 70,000 m2 (total) Area below elevated tracks: Commercial area 2 Spring 2019: Schedu
Slide 42: 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 — H1 FY2018/3 Earnings Presentation on 6ix