East Japan Railway Company · TSE:9020
East Japan Railway — FY2020.3 Earnings Presentation
45 slides from East Japan Railway's earnings presentation, Apr 30, 2020
Slide 1: FY2020.3 Financial Results Presentation
FY2020.3 Financial Results Presentation April 30, 2020 East Japan Railway Company
Slide 2: Contents
Contents I. Effect of Spread of COVID-19 and Near-Term Management Direction Effect of Spread of COVID-19 4 Retail & Services - Results 22 Near-Term Management Direction 5 Real Estate & Hotels - Results 23 Others - Results 24 Summary of Non-operating Income / Expenses and 25 II. JR East Group Managem
Slide 3: I. Effect of Spread of COVID-19 and Near-Term Management Direction
I. Effect of Spread of COVID-19 and Near-Term Management Direction
Slide 4: Effect of Spread of COVID-19
Effect of Spread of COVID-19 ■ Revenue decreases in FY2020.3 approx. ¥94 billion Revenue decreases in each business segment ・Transportation approx. ¥71 billion ・Retail & Services approx. ¥14 billion ・Real Estate & Hotels approx. ¥9 billion ※JR East （non-consolidated) approx. ¥69 billion （Passenger r
Slide 5: Near-Term Management Direction: Three Key Tasks
Near-Term Management Direction “Accomplishment of social mission” Implement COVID-19 countermeasures rigorously, secure required transportation, and provide services Implement achievable social contributions, such as medical examinations and hospitalization at hospitals and provision of hotels T
Slide 6: II. JR East Group Management Vision "Move Up" 2027
II. JR East Group Management Vision “Move Up” 2027
Slide 7: Numerical targets (FY2023)
Numerical targets (FY2023) Consolidated operating revenue Consolidated operating income (100 mil. Yen) 32,950 (100 mil. Yen) 6,000 30,020 29,466 5,200 30,000 4,848 +3,483 +1,391 3,808 4,000 20,000 2,000 10,000 0 0 FY 2019 FY 2020 FY 2023 FY 2019 FY 2020 FY 2023 (results) (results) (target) (results)
Slide 8: Numerical targets (FY2023): Transportation
Numerical targets (FY2023) Transportation Operating 営業収益 revenue Operating income (100 mil. Yen) (100 mil. Yen) 25,000 21,000 4,000 3,300 20,381 19,945 3,419 20,000 ＋1,054 3,000 2,505 ＋794 15,000 2,000 10,000 1,000 5,000 0 0 FY2019 FY2020 FY2023 FY2019 FY2020 FY2023 (results) (results) (target) (res
Slide 9: Numerical targets (FY2023): Maintenance Cost
Numerical targets (FY2023) East Japan Railway Company Maintenance Cost 【Causes of Increases and Decreases in the Period through FY2023.3】 Causes of Cost Increases (100 mil. Yen) Provision for Large-Scale Renovation of Shinkansen Infrastruture ・Increase of old and new facilities 4,000 Construction su
Slide 10: Numerical targets (FY2023): Retail & Services
Numerical targets (FY2023) Retail & Services Operating revenue 6,600 Operating income (100 mil. Yen) (100 mil. Yen) 560 6,000 5,218 600 5,020 +1,579 +216 392 4,000 400 343 2,000 200 0 0 FY 2019 FY 2020 FY 2023 FY 2019 FY 2020 FY 2023 (results) (results) (target) (results) (results) (target) Toward A
Slide 11: Numerical targets (FY2023): Real Estate & Hotels
Numerical targets (FY2023) Real Estate & Hotels Operating revenue 4,400 Operating income 1,090 (100 mil. Yen) 4,400 (100 mil. Yen) 1,000 4,000 3,490 3,485 814 +914 746 +343 2,000 500 0 0 FY2019 FY 2020 FY 2023 FY 2019 FY 2020 FY 2023 (results) (results) (target) (results) (results) (target) Toward A
Slide 12: Numerical targets (FY2023): Others
Numerical targets (FY2023) Others Operating revenue Operating income (100 mil. Yen) 950 (100 mil. Yen) 300 260 929 1,015 1,000 238 238 +21 -65 200 500 100 0 0 FY2019 FY2020 FY2023 FY2019 FY2020 FY2023 (results) (results) (target) (results) (results) (target) Toward Achievement of FY2023.3 (Goals) IT
Slide 13: Main Initiatives in Relation to MaaS, Suica, and Data Marketing
Main Initiatives in Relation to MaaS, Suica, and Data Marketing Advancement of MaaS ■Realize seamless, stress-free mobility ■Expand and develop tourism-type MaaS Advance Data Marketing Vigorously Expand and enhance Increase alliances based on Ringo Pass Conduct verification tests of tourism-type Maa
Slide 14: Major Projects Going Forward
Major Projects Going Forward FY2025.3 Shinagawa Development Project (Block 1,2,3,and 4) Project cost (Plan) approx. ¥550 billion Leveraging 5G and IoT to introduce Forecast for operating revenues (Full-year basis) new mobility and create new businesses approx. ¥50 billion Realizing town development
Slide 15: Irreversible Structural Changes in Post-COVID-19 Society
From concentration Acceleration from Irreversible Structural to dispersion “real” to “digital” Changes in Post-COVID-19 Society From commuting-centered Acceleration from to daily life-centered “mass” to “personal” Rebuilding of growth and innovation strategy Fundamental strengthening of management e
Slide 16: III. FY2020.3 Financial Results
III. FY2020.3 Financial Results
Slide 17: FY2020.3 Financial Results (non-consolidated)
FY2020.3 Financial Results (non-consolidated) (¥ billion) 2019.3 2020.3 2020.3/2019.3 Increase / Results Results [Jan. Plan] Decrease (%) Operating revenues 2,113.3 2,061.0 ［2,125.0］ -52.2 97.5 Passenger revenues 1,856.7 1,792.8 -63.9 96.6 Others 256.5 268.2 +11.6 104.5 Operating expenses 1,721.4 1,
Slide 18: Passenger Revenues – FY2020.3 Results
Passenger Revenues – FY2020.3 Results (YoY, ¥ billion,％) Increase / (YoY, ¥ billion) Increase / decrease (％) Positive and Negative Factors Decrease Passenger revenues -63.9 Passenger revenues -63.9 96.6 Commuter passes revenues (Seasonal tickets) +3.0 Commuter passes Effect of COVID-19 -1.0 (Seasona
Slide 19: Operating Expenses (non-consolidated) – FY2020.3 Results
Operating Expenses (non-consolidated) – FY2020.3 Results (¥ billion) 2019.3 2020.3 2020.3/2019.3 2021.3 Increase / Main factors behind change Point Results Results decrease (%) Operating expenses 1,721.4 1,767.0 +45.5 102.6 ・Decrease in number of employees Personnel (Standard wages: -8.4, Bonus rela
Slide 20: FY2020.3 Financial Results (consolidated)
FY2020.3 Financial Results (consolidated) (¥ billion) 2019.3 2020.3 2020.3/2019.3 Increase / Results Results [Jan. Plan] Decrease (%) Operating revenues 3,002.0 2,946.6 ［3,041.0］ -55.4 98.2 Transportation 2,038.1 1,994.5 -43.6 97.9 Retail & Services 521.8 502.0 -19.8 96.2 Real Estate & Hotels 349.0
Slide 21: Transportation - Results
Transportation - Results (¥ billion) 2019.3 2020.3 2020.3/2019.3 -43.6 Operating revenues 2,038.1 1,994.5 97.9％ -91.3 Operating income 341.9 250.5 73.3％ Operating revenues - main positive and negative factors (FY2020.3) (¥ billion) JR East -58.9 Decrease in passenger revenues FY2021.3 Topics (FY2020
Slide 22: Retail & Services - Results
Retail & Services - Results (¥ billion) 2019.3 2020.3 2020.3/2019.3 -19.8 Operating revenues 521.8 502.0 96.2％ -4.8 Operating income 39.2 34.3 87.7％ Operating revenues FY2021.3 Topics - main positive and negative factors (FY2020.3) (¥ billion) ・KINOKUNIYA JR Kyoto Isetan Store ・Renewal of Sendai Sta
Slide 23: Real Estate & Hotels - Results
Real Estate & Hotels - Results (¥ billion) 2019.3 2020.3 2020.3/2019.3 -0.4 Operating revenues 349.0 348.5 99.9％ -6.8 Operating income 81.4 74.6 91.6％ FY2021.3 Topics (FY2020.3 opening is in italics) ・SHIBUYA SCRAMBLE SQUARE Phase 1 (East Tower) ・Hotel (Akihabara, Shin-Kiba, Gotanda ) ・WATERS takesh
Slide 24: Others - Results
Others - Results (¥ billion) 2019.3 2020.3 2020.3/2019.3 +8.5 Operating revenues 92.9 101.5 109.2％ +0.0 Operating income 23.8 23.8 100.3％ FY2021.3 Topics (FY2020.3 topics is in italics) ・Participating in “cashless, consumer-returns business” and conducting of unique JRE POINT reward campaign in conj
Slide 25: Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses
Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses (consolidated) - Results 25
Slide 26: Summary of Cash Flows (consolidated)
Summary of Cash Flows (consolidated) 26
Slide 27: Change in Capital Expenditures (consolidated)
Change in Capital Expenditures (consolidated) * The results show investment amounts for transportation and non-transportation based on the previous segment before FY2017.3. 27
Slide 28: Change in Interest-bearing Debt Balance (consolidated)
Change in Interest-bearing Debt Balance (consolidated) (¥ billion) 2016.3 2017.3 2018.3 2019.3 2020.3 (Results) (Results) (Results) (Results) (Results) 1,809.9 1,839.9 1,770.1 1,730.1 1,710.2 Bonds (1.83%) (1.73%) (1.68%) (1.61%) (1.56%) 993.7 1,030.1 1,072.9 1,101.4 1,124.3 Long-term loans (1.23%)
Slide 29: IV. Reference Materials
JR-EAST IV. Reference Materials
Slide 30: FY2020.3 Traffic Volume and Passenger Revenues - Results
FY2020.3 Traffic Volume and Passenger Revenues - Results Traffic Volume Passenger Revenues Commuter Passes: Seasonal Tickets (million passenger kilometers) (¥ billion) Non-commuter Passes: Ordinary Tickets 2019.3 2020.3 Increase / 2019.3 2020.3 Increase / (%) (%) Results Results decrease Results Res
Slide 31: Inbound Tourism
Inbound Tourism ■ Railway business ■ Life-style service business Passenger revenue （¥ billion） （¥ billion） Visitors to Japan accommodation revenue *1 (Regular tickets and Railway passes) Total tax-free sales *2 30.0 27.0 50.0 47.0 22.0 40.0 38.0 20.0 15.1 14.6 30.0 12.9 26.0 25.0 6.9 6.7 23.5 10.0 5
Slide 32: Major Subsidiaries - Results
Major Subsidiaries - Results (¥ billion) 2019.3 2020.3 2020.3/ Results Results 2019.3 (%) JR East Retail Net Operating revenues 229.9 221.9 96.5 (J-Retail) Operating income 5.0 3.9 79.1 Nippon Restaurant Operating revenues 58.0 44.3 76.4 Enterprise (NRE) Operating income 0.4 -0.1 - East Japan Market
Slide 33: Hotel Operations - Overview
Hotel Operations - Overview Operating revenues＊1 ¥ 53.4 billion （2020.3） Operating income＊1 ¥ 0.9 billion （2020.3） *1 Simple total of the revenues and expenses of the hotel businesses of Group companies and the revenues and expenses of the hotel businesses of non-consolidated JR East ［Reference］ JR
Slide 34: Suica
Suica ■Number of e-money available shops ■Largest number of e-money transactions in one month * Figures include results of other affiliated stores. * Figures include results of other affiliated stores. 【Compatible stores】 【Suica cards issued】 82.73 million (109.0%) 940,290 (152.5%) 【Mobile Suica mem
Slide 35: ESG ~Overview~
ESG ~Overview~ Environment (E) ■Advancement of energy-saving and carbon-free society ■Use of hydrogen Increase in generation of renewable energy Continued introduction of Enhancement of environmental Advancement of Development of test railcar Development of hydrogen station in energy-saving railcars
Slide 36: ESG ~Making regional areas more affluent~
ESG ~Making regional areas more affluent~ Operation of sight-seeing train Compact cities around stations TRAIN SUITE SHIKI-SHIMA Support from local people NORTHERN STATION GATE AKITA （TOHOKU EMOTION） ・Renewal of Akita Station as a base for tourism ・Opening of an arena, Shin-Aomori a sports orthopedi
Slide 37: Numerical targets (FY2023)
Numerical targets (FY2023) Values to create Focus points Numerical targets for specific actions (FY2023) FY2020 results 〇Mobility Linkage Platform :Service usage: 30 mil. transactions/month 0.004 mil. transactions/month ○Ticketless service usage rate for JR East Shinkansen: 50% 17.1 % “Affluence” ○N
Slide 38: Key Financial Indicators(1)
Key Financial Indicators(1) Additional Information for bond Investors (¥ billion) Trend in Net Interest-bearing Debt / EBITDA (times) 1,000.0 5.0 900.0 847.3 830.4 849.2 853.5 4.2 780.7 800.0 755.5 4.0 700.0 3.9 600.0 3.5 3.5 3.4 3.4 3.0 500.0 400.0 2.0 300.0 200.0 1.0 100.0 0.0 0.0 2015.3 2016.3 20
Slide 39: Key Financial Indicators(2)
Key Financial Indicators(2) Additional Information for bond Investors Trend in Interest Coverage Ratio and Debt to Equity Ratio (times) 12.0 2.0 10.9 10.5 10.0 9.2 9.0 1.4 8.8 1.5 8.0 7.6 1.3 1.2 1.1 1.1 1.0 6.0 1.0 4.0 0.5 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 Interest coverage ratio (left scal
Slide 40: Interest-bearing Debt Breakdown and Maturity Outlook
Interest-bearing Debt Breakdown and Additional Information for bond Investors Maturity Outlook Breakdown of consolidated interest-bearing debt (As of Mar. 31, 2020) Balance (¥ billion) Breakdown Average interest rate Average maturity Bonds 1,710.2 51.6% 1.56% 12.74 years Long-term loans 1,124.3 34.0
Slide 41: Outlook of Bond Maturity
Outlook of Bond Maturity Additional Information for bond Investors Redemption ladder of bonds(non-consolidated) (¥ billion) Domestic bonds (unsecured, issued in 2020.4) 140.0 Domestic bonds (unsecured, issued in FY2020.3) 120.0 Euro-GBP bonds 100.0 Domestic bonds (unsecured) 50.0 58.7 80.0 Domestic
Slide 42: Bonds Issuance in FY2020.3
Bonds Issuance in FY2020.3 Additional Information for bond Investors Total amount Issue Reoffer JGB Maturity Series Tenor Coupon Issue date of issue price yield spread date 140 10 ¥ 10.0 billion 0.100% ¥100 0.100% - 2019.7.23 2029.7.23 141 30 ¥ 10.0 billion 0.488% ¥100 0.488% +16bp 2019.7.23 2049.7.
Slide 43: Bonds Issuance in 2020.4
Bonds Issuance in 2020.4 Additional Information for bond Investors Total amount Issue Reoffer JGB Maturity Series Tenor Coupon Issue date of issue price yield spread date 146 3 ¥ 50.0 billion 0.150% ¥100 0.150% - 2020.4.22 2023.4.21 147 10 ¥ 20.0 billion 0.265% ¥100 0.265% +25.5bp 2020.4.22 2030.4.2
Slide 44: Long-term Funding and Liquidity
Long-term Funding and Liquidity Additional Information for bond Investors ■ Long-term Funding - Constraining the risks of rising interest rates by raising long-term fund at fixed interest rates and smoothing redemption ladder Long-term credit ratings Rating agency Rating Notes Moody’s Aa3 Reviewing
Slide 45: Forward-Looking Statements and IR website
These materials and the video of the presentation can be viewed at the JR East’s web site. JR East Web site, IR (Investor Relations) https://www.jreast.co.jp/e/investor/index.html Forward-Looking Statements Statements contained in this report with respect to JR East’s plans, strategies and beliefs t
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