Ntt Inc · TSE:9432

Ntt — Nippon Telegraph and Telephone — Investor Presentation (May 2019)

55 slides from Ntt's investor presentation, May 2019

  1. Slide 1: IR Presentation

    IR Presentation May 2019 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 FY2018 Consolidated Results, FY2019 Forecast Other Businesses FY2018 Consolidated Results Highlights 4 Promote B2B2X Model 29 FY2018 Contributing Factors by Segment 5 Growth of Urban Solutions business 30 FY2019 Forecast Summary 6 Create New Lines of Business 31 FY2019 Forecast Summary by S

  4. Slide 4: Overview of FY2018 Consolidated Results

    Overview of FY2018 Consolidated Results Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3

  5. Slide 5: FY2018 Consolidated Results Highlights

    FY2018 Consolidated Results Highlights  Both Operating Revenues and Operating Income increased to record levels Status of Consolidated Results  Operating Revenues: ¥11,879.8B 〔 +¥97.7B [ +0.8% ] year-on-year〕  Operating Income: ¥1,693.8B 〔 +¥52.7B [ +3.2% ] year-on-year〕  Profit※1: ¥854.6B 〔 (¥4

  6. Slide 6: FY2018 Contributing Factors by Segment

    FY2018 Contributing Factors by Segment Operating Revenues 【Year-on-year:+97.7】 (Billions of yen) Regional Long distance and Data Other elimination of Mobile communications international communications business inter-segment communications business business communications business transactions busine

  7. Slide 7: FY2019 Forecast Summary

    FY2019 Forecast Summary  Operating Revenues and Operating Income will decrease  Profit and EPS will increase over the previous year Plan for Consolidated Revenues and Income FY2018 Result FY2019 Forecast Year-on-Year Operating ¥11,879.8B ¥11,830.0B (¥49.8B) Revenues Operating ¥1,693.8B ¥1,550.0B (

  8. Slide 8: FY2019 Forecast Summary by Segment

    FY2019 Forecast Summary by Segment Operating Revenues 【Year-on-year:(49.8)】 (Billions of yen) Regional Long distance and Data Other elimination of Mobile communications international communications business inter-segment communications business business communications business transactions business

  9. Slide 9: NTT Group Medium-Term Management Strategy

    NTT Group Medium-Term Management Strategy Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 8

  10. Slide 10: 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

  11. Slide 11: Medium-Term Targets

    Medium-Term Targets Financial Targets EPS Growth EPS Growth ＋50％ Target FY2023 ※1 （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

  12. Slide 12: 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 456yen ▲220 425yen * billion yen ▲470 billion yen FY 2017 FY 2018 FY 2019 (E) FY 2023 Target Esta blis

  13. Slide 13: Global Business

    Global Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 12

  14. Slide 14: 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 subsi

  15. Slide 15: Enhance Competitiveness in Global Business ①

    Enhance Competitiveness in Global Business ① Aug. 2018 Nov. 2018 July. 2019（Plan） 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 Japa

  16. Slide 16: 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

  17. Slide 17: 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

  18. Slide 18: Mobile Communication Business

    Mobile Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 17

  19. Slide 19: NTT DOCOMO FY2019 Key Actions

    NTT DOCOMO FY2019 Key Actions Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 18

  20. Slide 20: NTT DOCOMO New Rate Plans

    NTT DOCOMO New Rate Plans Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 19

  21. Slide 21: NTT DOCOMO Comparison with Existing Rates

    NTT DOCOMO Comparison with Existing Rates Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 20

  22. Slide 22: NTT DOCOMO “d POINT CLUB” Members

    NTT DOCOMO “d POINT CLUB” Members （Million Subs） 80.00 70.00 67.63 68.83 70.15 65.60 66.52 63.24 64.32 60.01 61.35 62.32 58.50 59.26 60.00 50.00 40.00 30.00 20.00 10.00 0.00 FY2016 FY2016 FY2016 FY2016 FY2017 FY2017 FY2017 FY2017 FY2018 FY2018 FY2018 FY2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Copyri

  23. Slide 23: NTT DOCOMO 5G Pre-Commercial Service

    NTT DOCOMO 5G Pre-Commercial Service Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 22

  24. Slide 24: NTT DOCOMO Cost Efficiency Improvement

    NTT DOCOMO Cost Efficiency Improvement FY 2018 FY 2019E Focus areas ◆Network Outsourcing cost, improved investment efficiency, etc. ◆Marketing After-sales support, sales promotion measures, etc. ◆Other ▲120.0※ ▲130.0 R&D, information systems, etc. ※Amount in FY2018 includes revenue improvement of mo

  25. Slide 25: Fixed-line Communication Business

    Fixed-line Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24

  26. Slide 26: Revitalization of Regional Economies (NTT EAST)

    Revitalization of Regional Economies (NTT EAST) Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25

  27. Slide 27: Revitalization of Regional Economies (NTT WEST)

    Revitalization of Regional Economies (NTT WEST) Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26

  28. Slide 28: 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

  29. Slide 29: Other Businesses

    Other Businesses Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 28

  30. Slide 30: Promote B2B2X Model

    Promote B2B2X Model  Number of B2B2X Projects: 39 (as of end of FY2018), to expand to 100 (by FY2021)  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

  31. Slide 31: Growth of Urban Solutions Business

    Medium and Long Term growth toward enhancement of Urban Solutions business NTT Urban Solutions aims to be a company leading the Urban Solutions business not only by the existing property development business, but by combining ICT and energy etc. to solve issues of community and develop a community w

  32. Slide 32: Create New Lines of Business ~Smart Energy Business~

    Create New Lines of Business ~Smart Energy Business~ Establishment of Energy Business Promotion Company FY2025 (Target)  In order to establish and launch a smart energy business, will establish “NTT Anode Energy” (planned for June 3, 2019) June 2019 September 2019 Generation ・Green power generation

  33. Slide 33: 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 Employees of businesses that promote Achieve corp

  34. Slide 34: Other Medium-Term Management Strategy Initiatives

    Other Medium-Term Management Strategy Initiatives Drive Self-Digital Transformation in Domestic Business  Promote Connected Value Chain logistics system, and reduce logistics costs by introducing group-shared transportation and warehouse optimization (starting from FY2020) Enhance and Globalize R&D

  35. Slide 35: Shareholder Returns/ ESG

    Shareholder Returns/ ESG Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 34

  36. Slide 36: 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 35

  37. Slide 37: Shareholders Returns

    Shareholders Returns Dividends  Aggregate annual dividends for FY2019 expected to increase to ¥190 per share (an increase of ¥10 from FY2018) Share Buybacks  Resolved to buy back shares in order to improve capital efficiency and enhance shareholder returns  Details of Share Buybacks ・Aggregate Am

  38. Slide 38: Changes in Dividend

    Changes in Dividend 190 (Yen) 200 180 85% 150 65% Payout Ratio 100 45% 40.9% 41.7% 38.2% 37.2% 38.0% 32.3% 33.4% 32.9% 25 50 31.4% 31.2% 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. • FY2003-FY2017, fina

  39. Slide 39: Record of Share Buybacks

    Record of Share Buybacks Approx. 4 Trillion Yen in Buybacks From From From From From From From From From Market/ Market/Gov’t From Gov’t Market/ Gov’t Market Gov’t Market Market / Gov’t Market Gov’t Market (Billions of yen) 600 539.4 500 406.5*4 400 366.5 381.7 374.1*6 338.1*5 258.0 300 250.0 235.2

  40. Slide 40: Share Buybacks and Cancellation

    Share Buybacks and Cancellation ＜＞：share holding ratio Buyback Buyback from Buyback from from Cancellation Gov’t and Cancellation Gov’t and Cancellation market Market Market Treasury Stocks Treasury Stocks Excess Holdings 124mil. shares ＜14.1％＞ ＜0.0％＞ Excess Holdings 59mil. shares 199mil. 276mil. sh

  41. Slide 41: 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

  42. Slide 42: 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 will increase the number of outs

  43. Slide 43: Financial Data, etc.

    Financial Data, etc. Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 42

  44. Slide 44: 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

  45. Slide 45: Trend in Consolidated Financial Results

    Trend in Consolidated Financial Results 11.9 11.8 11.8 11.8 ■ Operating 11.5 11.4 Revenues 11.1 （Trillion yen） 10.7 10.9 ■ Operating 1.54 1.64 1… 1… 1… 1.2 1.21 1.35 Income 1.08 （Trillion yen） 0.91 0.9 0.74 0.80 0… 0… 0.52 0.59 0.52 ■ Net Income （Trillion yen） 456 450 456 391 440 350 255 237 215 ■ E

  46. Slide 46: 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 11,879.8 118,300 11,541.0 11,391.0 10,700.7 10,92

  47. Slide 47: 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

  48. Slide 48: Changes in CAPEX

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

  49. Slide 49: 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

  50. Slide 50: 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

  51. Slide 51: Number of Employees

    Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2018） 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

  52. Slide 52: Changes in Personnel expenses

    Changes in Personnel expenses (NTT East Group, NTT West Group) 1000yen） （Billion 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 the

  53. Slide 53: Broadband Access Services in Japan

    Broadband Access Services in Japan Mobile Fixed Mobile Approx. FTTH 174.84M subs Approx. 150M 30M 31.0M 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

  54. Slide 54: 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

  55. Slide 55: Your Value Partner

    Your Value Partner Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Nippon Telegraph and Telephone — Investor Presentation (May 2019) on 6ix