Slide 1: IR Presentation
IR Presentation Ver.241002
Slide 2: Forward-looking statements notice
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 FY2024.2Q Consolidated Results Initiatives of a sustainable society, etc. Status of Consolidated Results for FY2024.2Q 4 Sustainability Charter 85 Contributing Factors by Segment for FY2024.2Q 5 Targets of “NTT Green Innovation toward 2040” 86 FY2024 Results Forecast Outlook of
Slide 4: Overview of FY2024.2Q Consolidated Results
Overview of FY2024.2Q Consolidated Results Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3
Slide 5: Status of Consolidated Results for FY2024.2Q
Status of Consolidated Results for FY2024.2Q ◼ Operating Revenues increased, Operating Profit decreased and EBITDA increased ◼ Operating Revenues reached new record-high levels Status of Consolidated Results ⚫ Operating Revenues: ¥6,590.6B <+¥226.1B [+3.6%] year-on-year> ⚫ Operating Profit: ¥920.3B
Slide 6: Contributing Factors by Segment for FY2024.2Q
Contributing Factors by Segment for FY2024.2Q Operating Revenues <Year-on-year:＋226.1> Others (Billions of yen) Integrated ICT Regional Global Solutions (Real Estate, Elimination of Business Segment Communications Business Segment Energy and Others) Inter-Segment Business Segment Transactions 6,590.
Slide 7: FY2024 Results Forecast
FY2024 Results Forecast Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 6
Slide 8: FY2024 Forecast Summary
FY2024 Forecast Summary ◼ Operating Revenues will increase year-over-year while Operating Profit and Profit will decrease year-over-year Consolidated Revenues and Income Plan FY2023 Results FY2024 Forecast Year-on-Year Operating Revenues ¥13,374.6B ¥13,460.0B +¥85.4B Operating Profit ¥1,922.9B ¥1,81
Slide 9: FY2024 Forecast Summary by Segment
FY2024 Forecast Summary by Segment Operating Revenues <Year-on-year: +85.4> (Billions of yen) Integrated ICT Regional Global Solutions Others Elimination of Business Segment Communications Business Segment (Real Estate, Inter-Segment Business Segment Energy and Others) Transactions 13,460.0 47.1 13,
Slide 10: Current Profit Levels and Initiatives to Reach Medium-Term Targets
Current Profit Levels and Initiatives to Reach Medium-Term Targets ◼ We actively streamlined non-core assets to achieve the previous medium-term targets, for which FY2023 was the final year, and achieved significant profit increases and reached those targets in FY2023 as a result ◼ Although profits
Slide 11: New Medium-Term Management Strategy
New Medium-Term Management Strategy New Value Creation & Sustainability 2027 Powered by IOWN Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 10
Slide 12: Fundamental Principles of New Value Creation & Sustainability 2027
Fundamental Principles of New Value Creation & Sustainability 2027 Powered by IOWN Innovating a Sustainable Future for People and Planet Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 11
Slide 13: Increase Investments in Growth Areas
For that Purpose, We Will Increase Our Investments in Growth Areas Will invest ~¥8.0 trillion in growth areas over the next 5 years 50％UP ¥0.6tn/year ~¥8.0 trillion ¥1.0tn/year over the next 5 years ¥1.5tn/year ~¥12.0 trillion ¥1.0tn/year in total FY2015 FY 2022 FY2027 Copyright 2024 NIPPON TELEGRAP
Slide 14: Further Increase Cash-Generation Ability
We Will Also Further Increase Our Cash-Generation Ability for the Future Looking ahead to FY2027, aiming to increase our cash-generation ability for growth and reach EBITDA of ~¥4.0 trillion 4.0 ¥ tn +20％ increase 3.3tn ¥ FY 2022 2027 FY Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 13
Slide 15: Pillars of Our Initiatives
Pillars of Our Initiatives 1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ① IOWN-Driven Creation of New Value ③ Achievement of a Circular Economy Society (from concept to commercialization) i. Establishment of manufacturing company for photonic- i. Develop sustainab
Slide 16: IOWN-Driven Creation of New Value
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ① IOWN-Driven Creation of New Value (from Concept to Commercialization) ⅰ. Establishment of manufacturing company for photonic-electronic convergence devices ◼ Will establish “NTT Innovative Devices Corporation” in June
Slide 17: Data-Driven Creation of New Value (Smart World)
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ②Data-Driven Creation of New Value (Smart World) ⅰ. Strengthening personal business (strengthening DOCOMO’s Smart Life businesses) ◼ Will actively invest in personal business and other growth areas (at least ~¥1.0tn/5 y
Slide 18: Data-Driven Creation of New Value (Smart World)
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ②Data-Driven Creation of New Value (Smart World) ⅱ. Strengthening the Use of DX/Data in Society and Industry (use of AI/Robots) ◼ Will jointly develop technology and solutions globally, transforming industries that supp
Slide 19: Expansion and Upgrade of Data Centers
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ②Data-Driven Creation of New Value (Smart World) ⅲ. Expansion and Upgrade of Data Centers ◼ Will further expand the world’s third-largest(1) data center infrastructure, and implement upgrades through the introduction of
Slide 20: Achievement of a Circular Economy Society: Green Energy
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ③Achievement of a Circular Economy Society i. Develop sustainability solutions for customers ◼ Will promote green solutions that can be achieved by “Green Energy x ICT” (will make investments of ~¥1.0tn/5 years) ◼ Will
Slide 21: Achievement of a Circular Economy Society
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ③Achievement of a Circular Economy Society ⅱ. Creating Circular Economy-Oriented Businesses ◼ Will achieve a sustainable society by recycling resources across various industries and further accelerating regional revital
Slide 22: Progression towards Net-Zero
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ③Achievement of a Circular Economy Society ⅲ. Progression towards Net-Zero ◼ Looking ahead to FY2040, aiming to expand “NTT Green Innovation toward 2040” to Scope 3 NTT Green Innovation toward 2040(1) Expansion to Scope
Slide 23: Further Strengthening of Business Foundations
1. NTT as a Creator of New Value and Accelerator of a Global Sustainable Society ④Further Strengthening of Business Foundations ◼ We will make our networks/systems more resilient to withstand large-scale failures, cyberattacks or other occurrences in order to strengthen social infrastructure and enh
Slide 24: Fusion of R&D with a Market-Focused Strategy
2. Upgrading the Customer Experience (CX) ⑤ Fusion of Research and Development with a Market-Focused Strategy ◼ Will combine and strengthen our R&D capabilities with our market analysis and alliance capabilities at the holding company level ◼ Will enable us to strengthen our product-oriented R&D to
Slide 25: Strengthening of Services that Emphasize CX
2. Upgrading the Customer Experience (CX) ⑥Strengthening of Services that Emphasize CX Customers (Individuals, businesses, local governments, government organizations, etc.) Customer Experience Offer New Experiences and Set/Implement KPIs that Track the Customer Journey First Impressions that Exceed
Slide 26: Open and Innovative Corporate Culture
3. Improvement of Employee Experience (EX) ⑦Open and Innovative Corporate Culture ◼ Foster a culture of openness, collaboration and trial and error for a better customer experience ◼ Continue to strengthen diversity and inclusion Openness • Open discussions • Transparency • Healthy debate • Psycholo
Slide 27: Support Career Growth
3. Improvement of Employee Experience (EX) ⑧ Support Career Growth ◼ Support employee career growth and increase investment in human capital to drive business growth Supporting Growth Improve Expertise by Repeating the Cycle Career Work Training/ Review/ New EX Joining the Onboarding Design Experien
Slide 28: Global Benefits for Employees and their Families
3. Improvement of Employee Experience (EX) ⑨Global Benefits for Employees and their Families ◼ Expand the benefits that support a portion of educational expenses for children of deceased employees until they reach age 22 Current Future Scheme Scholarship fund Expand the current scheme Japan-based El
Slide 29: Medium-Term Financial Targets
Medium-Term Financial Targets Targets Indicators Target Levels (FY2027) Company-Wide Targets EBITDA ＋20％ increase (compared to FY2022) Growth EBITDA ＋40％ increase (compared to FY2022) Areas(1) Overseas Operating Income Margin(2) 10％（FY2025） Existing EBITDA ＋10％ increase (compared to FY2022) Areas(3)
Slide 30: Strengthening Our Ability to Generate Cash for Growth
Strengthening Our Ability to Generate Cash for Growth (with EBITDA as a Key Indicator) ◼ We will strengthen initiatives focused on our cash generation abilities to achieve further sustainable growth and have set EBITDA as a key indicator, aiming for an increase of 20% to reach ¥4.0 trillion by FY202
Slide 31: Increase Investments to Achieve Further Growth
Increase Investments to Achieve Further Growth ◼ We will make investments/contributions to our growth areas(1) amounting to ~¥8.0 trillion in the next five years(2) (an increase of 50% over current levels), and plan for a total of ~¥12.0 trillion ◼ Maintain/reduce our debt-to-EBITDA ratio to ~2x Gro
Slide 32: Fundamental Policy on Shareholder Returns
Fundamental Policy on Shareholder Returns Dividend Policy Our basic policy is to implement steady increases in dividends Share Buybacks We will flexibly conduct share buybacks to improve capital efficiency Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 31
Slide 33: Integrated ICT Business
Integrated ICT Business Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 32
Slide 34: Consumer business strategy
Consumer business strategy Further revenue growth Partners/ merchants Finance Marketing solutions Entertainment Data Strengthen service mix New customer base utilization Telecommunications Expand customer base customer base Halt decline of ARPU “d POINT CLUB” membership Copyright 2024 NIPPON TELEGRA
Slide 35: Consumer Revenue aspiration
<Consumer> Revenue aspiration ✓ Aim to grow revenues by over ¥350 billion (compared to FY2024 level) by FY2027 Consumer business operating revenues (Billions of yen) 4,489 4,476.1 1,090.8 1,200 Smart life Consumer communications 3,424.8 3,333 FY23 FY24 FY27 * The breakdown data represent the amount
Slide 36: Consumer Customer base: Future vision
<Consumer> Customer base: Future vision ✓ Focus on customer acquisition to expand market share in anticipation of population decliner. Increase loyal users in the young/middle-age group leveraging our service mix. Subscriber share approx. 30% 【Priority targets】 Telecom customers as well as users of
Slide 37: Consumer Customer base reinforcement: Current status
<Consumer> Customer base reinforcement: Current status ✓ Net additions performance turning positive and churn rate showing improvement as a result of customer base reinforcement measures YOY changes of handset net additions (retail user) Handset churn rate (retail user) YOY improvement of +30,000 su
Slide 38: Consumer Channel reinforcement
<Consumer> Channel reinforcement ✓ Expand customer contact points and strengthen proposal capabilities by leveraging channel characteristics Direction of channel reinforcement Approaches in each channel • Strengthening sales promotion at mass retailers and Mass retailer docomo Shop commercial comple
Slide 39: Consumer ARPU outlook
<Consumer> ARPU outlook ✓ Aim to reverse the ARPU trend after hitting the bottom during fiscal year ¥4,200 Retail accounts ¥4,140 Approx. ¥100 ¥4,090 ¥4,070 ¥4,050 All accounts ¥3,980 ¥3,950 FY22 FY23 FY24 FY25 FY26 FY27 Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 38
Slide 40: Utilization of three-tier price plan
<Consumer> Utilization of three-tier price plan ✓ Promote migration to “eximo” by acquiring new customers using “ahamo” and “irumo” and proposing cross-selling of services New Customers For customers who wish to Services enjoy stress-free unlimited data usage with generous support Cross sell For cus
Slide 41: Consumer ARPU: Base trend
<Consumer> ARPU: Base trend ✓ Average revenue per user has been rising even when user stay on the same rate plan due to increased data usage Changes in data usage ARPU of irumo/eximo subscribers ◼ Data usage increasing every year driven by consumption of ◼ Percentage of large data-volume users has b
Slide 42: Initiatives for ARPU growth
<Consumer> Initiatives for ARPU growth ✓ Accelerate ARPU increase leveraging video services and “Poikatsu” program 【Entertainment x Telecom】 Video offerings 【Finance x Telecom】 “Poikatsu” Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 41
Slide 43: Finance x Telecom: Poikatsu
<Consumer> Finance x Telecom: “Poikatsu” ✓ Total “Poikatsu” subscriptions topped 200 thousand. Aim to acquire over 1 million subs by March 31, 2025. Subscriber breakdown by plan before joining “d CARD” shopping basket size of “Poikatsu” subscribers “eximo Poikatsu” ◼ “eximo Poikatsu” contributing to
Slide 44: Entertainment x Telecom: Video services
<Consumer> Entertainment x Telecom: Video services ✓ “Bakuage” subscriptions topped 2.5 million. Promote upsell by driving increased data usage. The percentage of “Bakuage” subscribers who use 7GB or more Upsell ratio for “Bakuage” subscribers ◼ Increase of users using 7GB or more after signing up ◼
Slide 45: eximo migration rate
<Consumer> “eximo” migration rate ✓ Aim to increase “eximo” migration rate by expanding data usage and leveraging “Poikatsu” program 60%+ 53% 47% (Started offering “eximo” plan in July 2023) * % of users who have switched to “eximo” plan among existing subscribers Copyright 2024 NIPPON TELEGRAPH AND
Slide 46: irumo downsell effect
<Consumer> “irumo” downsell effect ✓ Due to the increase in “eximo” migration rate, the upsell effect of switching to “eximo” is expected to outweigh the “irumo” downsell effect in FY2024/4Q Revenue impact from “eximo”/ “irumo” migration ARPU before and after switch from old to new plan No decline i
Slide 47: Consumer communication: Operating revenues
Progress of FY2024.2Q <Consumer communication> Operating revenues By promoting the transition to “eximo”, the impact of price cuts due to “irumo” last year has been reduced. Device equipment sales have increased. Operating revenues Key points (Billions of yen) ➢ Factors behind change 1,670.3 1,649.5
Slide 48: Consumer communication: Customer base
Progress of FY2024.2Q <Consumer communication> Customer base Net additions turned positive as a result of customer base reinforcement measures. October MNP acquisitions recorded net gains significantly higher than planned. Churn rate trending lower. YOY changes in individual handset net adds Churn r
Slide 49: To strengthen customer acquisition
Progress of FY2024.2Q <Consumer communication> To strengthen customer acquisition Acquisition of young MNP subscribers increased significantly. Strive to further strengthen customer base in FY2024/2H. MNP net additions among young users Positive effects of channel reinforcement measures becoming pro
Slide 50: Mobile Communication ARPU
Progress of FY2024.2Q <Consumer communication> Mobile Communication ARPU APRU decline came to a halt. Achieved “eximo” migration rate* target ahead of plan. Average of all plan revenue before/after migration from old to new plan became positive. Mobile communication ARPU Rate of migration to “eximo”
Slide 51: Evolution of entertainment business
<Smart life> Evolution of entertainment business ✓ Become a rights holder in the content field, which is upstream of the value chain, and monetize downstream through distribution/show. Aim for entertainment revenue to reach 310 billion yen in FY2027, a 30% increase from FY2024. IP development Moneti
Slide 52: Marketing leveraging entertainment
<Smart life> Marketing leveraging entertainment ✓ Expand telecommunications and finance/payment revenues through strong engagements that are unique to entertainment New customer acquisition Creation of IP content using entertainment as an axis Sale of goods at docomo Shops Cross-sell leveraging Di m
Slide 53: Finance business evolution
<Smart life> Evolution of entertainment business ✓ Aim to grow revenue size to ¥630 billion by FY2027, a 40% increase from FY2024 through the provision of a wide array of finance services Account Respond to the Become customer’s money life partner needs of both through our collaboration with Monex,
Slide 54: Expansion of marketing solutions business
<Smart life> Expansion of marketing solutions business ✓ Grow at a faster pace than market, aiming for revenue size of ¥270 billion in FY2027, a 50% increase from FY2024 Expand use of payment/point services Utilization of marketing solutions Enterprises (Wide range of sectors, e.g., manufacturers, d
Slide 55: Joint initiatives with Intage for marketing solutions
<Smart life> Joint initiatives with Intage for marketing solutions ✓ End-to-end support covering the entire value chain leveraging DOCOMO’s 100 million membership base and Intage’s industry-leading data collection capability ･ Procurement Market survey/ ･ Sales Promotion/ ･Production product develop
Slide 56: Smart life: Operating revenues
Progress of FY2024.2Q <Smart life> Operating revenues Recorded revenue growth in all business domains including finance, marketing solutions and entertainment. Operating revenues Key points (Billions of yen) 590.1 ➢ Factors behind change 521.0 +）Finance/payment +34.1 billion +69.1 216.5 (Excluding F
Slide 57: Growth of finance business
Progress of FY2024.2Q <Smart life> Growth of finance business Finance/payment transactions and “d CARD” membership expanding at a favorable pace. Accelerate business growth leveraging the launch of platinum card in November. Aim for year-on- year increase over 20% in Finance/payment revenue. Finance
Slide 58: Growth of marketing solutions business
Progress of FY2024.2Q <Smart life> Growth of marketing solutions business Achieved significant revenue increase due to growth of marketing DX and other existing businesses, as well as inclusion of Intage Holdings as a growth driver. Marketing solutions revenues Initiative for expansion of marketing
Slide 59: Initiatives for large enterprises
<Enterprise> Initiatives for large enterprises ✓ Roll-out of solutions/services leveraging advanced technologies New solutions that leverage “tsuzumi” Enhance value of IoT solutions through 5G consulting More than 200 cases of introduction consultations. Started offering communication environment co
Slide 60: Initiatives for small and medium-sized companies
<Enterprise> Initiatives for small and medium-sized companies ✓ Assist regional communities and companies solve issues with mobile + solutions Regional co-creation solutions “DOCOMO Business Package” Solution of regional issues through the use of LGPF* Strengthen problem-solving assistance capabilit
Slide 61: Enterprise: Operating revenues
Progress of FY2024.2Q <Enterprise> Operating revenues Organic growth offsets the negative impact of one-off factors Operating revenues Key points (Billions of yen) ➢ Factors behind change +) Organic growth: +24.2 billion 879.4 878.9 -0.4 -) PSTN migration: -17.0 billion -) One-off factors for FY23/1
Slide 62: Enterprise: Solution rollout
Progress of FY2024.2Q <Enterprise> Solution rollout Active deployment primarily by large corporations. Contributing to boosting economy through the rollout of social/industrial platforms. Initiative targeting large corporations Construction site DX For realization of smart city DX/GX of building, bl
Slide 63: Enterprise: Solution rollout
Progress of FY2024.2Q <Enterprise> Solution rollout Orders increasing steadily capturing market needs. Contributing of DX of small/medium-sized companies docomo Business Package Example of services “Business Pack” such as communications package ICT Communications package and security offerings repor
Slide 64: Network reinforcement
Network reinforcement ✓ Accelerate implementation of initiatives to construct a network that resilient to environmental changes and disaster Improve network quality perceived by customers Strengthen network resilience Early detection of Build network resilient against experienced quality environment
Slide 65: Network: Enhancement of customer experience quality
<Network> Enhancement of customer experience quality ✓ Improve customer experience quality by expanding Sub6 base stations, etc. Expanding Sub6 areas, Expansion of Sub6 coverage mainly in urban areas (Service areas inside Yamanote Line) Mar.31, 2024 Aug.31, 2024 110% 130% March 2025 Strengthening me
Slide 66: Network deployment roadmap
<Network> Deployment roadmap to deliver comfortable experience quality ✓ Further expand Sub6 coverage across Japan mainly focusing on urban centers. Utilize new 5G overlays that use 4G bands, to construct an even thicker network. Aim for Opensignal*1 No. 1 rating, an indicator for evaluating mobile
Slide 67: Global Solutions Business
Global Solutions Business Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 66
Slide 68: Status of investments and orders in the data center business
Progress of FY2024.2Q Status of investments and orders, etc. in the data center business • Investment of 2,908M$ is planned for FY2024. 860M$ (¥131.4 billion, progress rate is approx. 30%) was invested in the first half of the year, which is on track with the plan • Orders from hyperscalers were str
Slide 69: Financial performance of the data center business
Progress of FY2024.2Q Financial performance of the data center business • Revenue for the first half was 1,190M$ (up 340M$ YoY), and EBITDA was 407M$ (up 80M$ YoY) • Aim to achieve EBITDA of over 1,400M$ (over ¥190 billion) in FY2027 Revenue EBITDA <EBITDA Margin> Operating Profit <OP Margin> FY2024
Slide 70: Data Center Business as a Growth Engine
Data Center Business as a Growth Engine NTT has committed to invest at least JPY1.5 trillion into data centers until the end of FY2027 as one of the pillars of our new medium-term strategy, aiming to double EBITDA during this period by leveraging our proven operational and technological capabilities
Slide 71: Expansion and Upgrade of Data Centers
（2023年5月公表） 新中期経営戦略 より New value creation & Sustainability 2027 powered by IOWN Expansion and Upgrade of Data Centers ◼ NTT will further expand the world’s third-largest(1) data center infrastructure, and implement upgrades through the introduction of IOWN technology (will make investments of at lea
Slide 72: NTT's Position In The Global Market
NTT’s Position In The Global Market Global Data Center Colocation Revenue Share1 Global IDC MarketScape Vendor Assessment 2 Operators 1 Equinix 2 Digital Realty 12% 3 NTT GDC 4 Digital Bridge 9% 5 CyrusOne Total 6% 6 KDDI $51.8B 3% 7 American Tower 3% 8 Cyxtera 9 Flexential 10 QTS Others NTT GDC is
Slide 73: Regional Communications Business
Regional Communications Business Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 72
Slide 74: Initiatives to Restore Business Results
Initiatives to Restore Business Results (Billions of yen) 437.7 + Expansion of new businesses, 420.5 α further re-evaluation of fees, etc. Streamlining Shifting to profit Re-evaluation of personnel and Non-Core 3 business portfolio Operating Profit Assets growth with FY2024 as the + FY2027 +¥45.0 bi
Slide 75: Direction of Each Business Portfolio
Direction of Each Business Portfolio Market Growth Investments/capital increases Strengthening in response to market expansion Growth/new business:¥300.0 billion Enterprise Business: ¥750.0 billion New Business (Subsidiary) • Solving local social issues SI,etc. • Developing communication Networks in
Slide 76: Evolving and Expanding the Enterprise Network Business
Evolving and Expanding the Enterprise Network Business Making the most of existing optical networks, we will leverage our strengths in regional connections and engineering to expand our network businesses that support the digitalization of society (targeting a ¥25.0 billion increase in profit throug
Slide 77: Current Status of Fiber Optic Services and Future Targets
Current Status of Fiber Optic Services and Future Targets • By strengthening sales and improving the pricing strategies for FLET’s Hikari Cross and the apartment building market business, we plan to expand our market share and improve our profitability, with a goal of generating profit of ¥40.0 bill
Slide 78: Initiatives to Increase Hikari Cross Sales
Initiatives to Increase Hikari Cross Sales （Responding to Demand for Faster Fiber Optic Speeds） We will expand the Hikari base with improved support for high-speed demand by promoting transitions to Hikari Cross, which is expected to increase ARPU, with free installations and other promotional measu
Slide 79: Initiatives in the Apartment Market
Initiatives in the Apartment Market • We will strengthen collaborations with developers and management companies to launch comprehensive apartment building-wide services that meet market needs and have high operating efficiency • We will shift to a business model in which we can maintain medium- and
Slide 80: Reforming Telecommunications Operations through DX and AI
Reforming Telecommunications Operations through DX and AI • We will fully leverage DX and AI to redesign personnel-heavy front and back-office support services ⇒ Enhancing efficiency and transitioning to “zero-touch (automated)” • We are aiming to improve profit by ¥18.0 billion through FY2027 by re
Slide 81: Reforming Telecommunications Operations through DX and AI
Reforming Telecommunications Operations through DX and AI • We will upgrade on-site operations and other manual tasks through the use of AI diagnostic imaging and other technologies • We will fully leverage DX and AI to transition routine repetitive tasks in the operation of NW equipment to “zero-to
Slide 82: Exit from Unprofitable Services
Exit from Unprofitable Services We will aim to improve profit by ¥13.5 billion in FY2027 through the termination of consumer line-related businesses and initiatives to promote the rapid shift to digital services Schedule Profit Improvement Effects (Billions of yen) （FY） 2024 2025 2026 2027 +13.5 ▲Ju
Slide 83: Migration to Alternative PSTN Services
Migration to Alternative PSTN Services • The ¥350.0 billion PSTN service revenue base will be maintained to the fullest extent possible by encouraging migration and improving pricing strategies at various contact opportunities with customers • Migration to alternative services (optical and wireless
Slide 84: Further Expansion of Growth Businesses
Further Expansion of Growth Businesses （Solmare Expansion） • In addition to expanding Comic C’MoA, which is one of the largest domestic e-book stores in Japan (with more than 40 million monthly users and over 1.40 million books), we are strengthening comprehensive initiatives from original comic pro
Slide 85: Initiatives of a sustainable society, etc.
Initiatives of a sustainable society, etc. Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 84
Slide 86: Sustainability Charter
Sustainability Charter • Establishment of Sustainability Charter in November 2021 • Three themes and nine challenges are set. Key indicators (carbon neutrality, percentage of new female managers, employee engagement rate, customer engagement) are reflected in executive compensation. Sustainability C
Slide 87: Targets of NTT Green Innovation toward 2040
Targets of “NTT Green Innovation toward 2040” ⚫ FY2030 Reduction of NTT Group’s greenhouse gas emissions by 80% (compared to FY2013) Carbon neutrality for the mobile (NTT DOCOMO) and data center businesses ⚫ FY2040 Carbon neutrality as NTT Group Energies Source: Created from “NTT Green Innovation to
Slide 88: Outlook of NTT Group's Energy Consumption
Outlook of NTT Group’s Energy Consumption ⚫ BY replacing legacy facilities with IOWN, energy consumption will be reduced by approximately half by FY2040 ⚫ Renewable energy will be adopted for the remaining half to achieve carbon neutrality Outcome Approx. doubled (compared to FY2013) Energy Savings
Slide 89: Towards Achieving Net Zero in 2040
Towards Achieving Net Zero in 2040 ◼ With 2023 preliminary results for scope 1 and 2 emissions being 2.42 million tons, our emissions are reducing faster than planned and we are making steady progress towards carbon neutral in 2040 ◼ By encouraging and supporting suppliers with their emissions reduc
Slide 90: Current Status and Future of Renewable Energy Business
Current Status and Future of Renewable Energy Business ◼ As a result of acquiring Green Power Investment (GPI), a leading domestic renewable energy company, in 2023, NTT added wind power generation to its solar power generation capabilities, and anticipates achieving its renewal energy acquisition f
Slide 91: New Green Transformation Initiatives (GX)
New Green Transformation Initiatives (GX) ◼ Launch the new solutions brand to strengthen initiatives in the GX field Improving power generation businesses through integrated management, analysis and visualization of Specific Initiatives: power generation and financial data Integrated Data Management
Slide 92: Reinforcement of Corporate Governance
Reinforcement of Corporate Governance June 2020 • Introduced an executive officers system* (separation of the functions of managerial decision-making/supervision and business execution) • Increased the ratio of outside directors from 27% to 50% *Introduced an executive officers system into key group
Slide 93: R&D
R&D Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 92
Slide 94: IOWN initiative
IOWN initiative ◼ In order to utilize all types of information beyond the limits of conventional infrastructures, photonics technologies such as photonics-electronics convergence devices will be utilized everywhere from networks to terminals to realize a network and information processing infrastruc
Slide 95: Photonics-Electronics Device Roadmap
Photonics-Electronics Device Roadmap From FY2022 From FY2025 From FY2028 From FY2032 Optical engine Connections Board Connections Integrated between Connections between Photonics Datacenters Chips Chips PEC-1 PEC-2 PEC-3 PEC-4 Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 94
Slide 96: IOWN2.0 - Optical Based Computing
IOWN2.0 - Optical Based Computing ◼ Developing a high-capacity, low-power consumption compact optical processing engine that will open up new possibilities in the world of computing ◼ Connecting xPU and memory optically instead of electrically to achieve ultra-low-power-computing ◼ In process of con
Slide 97: Future path for IOWN
Future path for IOWN Power efficiency Power efficiency APN 100-times * 100-times * Server 13-times 8-times 1.0-times 1.0-times Up to IOWN IOWN IOWN IOWN Up to IOWN IOWN IOWN 最終 IOWN now 1.0 2.0 3.0 4.0 now 1.0 2.0 3.0 目標 4.0 * Power efficiency for the entire photonics-applied area, including the APN
Slide 98: Achieved the World's First International IOWN APN Connection
Achieved the World’s First International IOWN APN Connection ◼ Adding to existing IOWN APN connections between data centers within Japan and overseas, in August 2024, we achieved the world’s first international IOWN APN connection, connecting Japan and Taiwan across a distance of approximately 3,000
Slide 99: NTT's LLM tsuzumi's Key Features
NTT’s LLM ’s Key Features Result of over 40 years of accumulated research on natural language processing 1 Japanese/English Compatible with World-Class Japanese Ultra-lightweight and high-performance 2 High Level of Cost Performance Flexible and low-cost tuning; capable of learning from closed datas
Slide 100: World-Class Japanese Language Capabilities
World-Class Japanese Language Capabilities World-class capabilities that surpass other large-scale models and significantly surpass other domestic Japanese LLMs in the same class Win Draw Lose Compared to Domestic Top-Class LLM A 86.3% 11.3% Compared to Domestic Top-Class LLM B 71.3% 8.8% 20.0% Comp
Slide 101: High Level of Cost Performance
High Level of Cost Performance Achieves high level of functionality while reducing hardware costs necessary for the implementation 生成AI利用 and operation of generative AI Main Cost Components AI’s Customizability Needed for Generative AI (Knowledge Upgrades, etc.) Use Operation GPU Cost Cost (Operator
Slide 102: Promoting the Further Development of tsuzumi
Promoting the Further Development of tsuzumi ◼ Since commercialization in March 2024, customers from a variety of fields have indicated interest, with over 400 proposals for implementation ◼ Going forward, NTT will collaborate with its partners to accelerate the expansion of tsuzumi both domesticall
Slide 103: Plan to establish NTT AI-CIX to Promote Linked AI
Plan to establish “NTT AI-CIX” to Promote Linked AI ◼ In August 2024, NTT plan to establish “NTT AI-CIX* Corporation (NTT AI-CIX)” to promote cross- business/cross-industry-linked AI services * AI-Cross Industry transformation ◼ NTT aims to achieve the optimization of the entire supply chain through
Slide 104: Shareholder Returns
Shareholder Returns Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 103
Slide 105: Record of Share Buybacks
Record of Share Buybacks Amount of Share Buybacks (Billions of yen) Up to 200.0* ¥88.3 billion of buybacks as of the end of Oct. 2024 * On August 7, 2024, the Board of Directors of NTT resolved to buy back shares in an amount up to ¥200.0 billion. Buyback Period: August 8, 2024 to March 31, 2025. Co
Slide 106: Changes in Dividend
Changes in Dividend （Yen） 5.2 5.0 85% 4.0 Dividend per share 65% Payout Ratio 3.0 45% 2.0 40.9% 41.1% 42.3% 40.0% 37.2% 38.0% 33.4% 34.9% 34.5% 33.8% 31.2% 38.2% 31.4% 32.9% 32.3% 30.7% 25% 0.5 1.0 27.5% 23.0% 19.5% 17.1% 12.3% 13.0% 0.0 5% • FY2003-FY2017, financial statements were prepared in acco
Slide 107: Number of Shareholders
Status of Shareholder Count Shareholder Count Age Composition* 1% 3% 6% The number of shareholders has grown by 2.7x compared to prior to the stock split (end of March 2023) to 2.44 million 12% 2.44 million (+1.52 million), setting a new record high Stock Split Announcement 55% 23% 1.90 2.7x million
Slide 108: Financial Data, etc.
Financial Data, etc. Copyright 2024 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 107
Slide 109: NTT Group Formation
NTT Group Formation Operating revenue：¥6,140.0 billion Integrated ICT Operating income ：¥1,144.4 billion Business No. of employees ： 51,050 No. of subsidiaries： 127 Operating revenue：¥3,183.2 billion Regional Operating income ：¥ 437.7 billion Communications Business No. of employees ： 67,200 Nippon
Slide 110: Trend in Consolidated Financial Results
Trend in Consolidated Financial Results 13.4 13.5 13.1 ■ Operating 12.2 11.8 11.9 11.9 11.9 Revenues 11.5 11.4 （Trillion yen） 1.9 1.8 1.8 1.8 1.6 1.7 1.7 ■ Operating 1.5 1.6 Income 1.4 /Operating 1.28 Profit 1.18 1.21 1.10 （Trillion yen） 0.91 0.86 0.92 0.80 0.85 ■ Net Income 0.74 * /Profit 13.9 15.1
Slide 111: Changes in Consolidated Operating Revenues
Changes in Consolidated Operating Revenues （Billion yen） 13,136.2 13,374.6 13,460.0 15,000 11,879.8 11,899.4 11,944.0 11,944.0 12,156.4 11,541.0 11,391.0 11,799.6 6,059.0 6,140.0 6,244.0 4,840.8 4,651.3 4,725.2 4,769.4 5,870.2 4,527.1 4,584.6 5,880.9 10,000 3,079.9 3,207.4 3,177.6 3,183.2 3,070.0 3,
Slide 112: Changes in Consolidated Operating Income
Changes in Consolidated Operating Income （Billion yen） 2,000 1,922.9 1,671.4 1,829.0 1,810.0 1,768.6 1,642.8 1,693.8 1,671.4 1,539.8 1,562.2 1,500 1,348.1 1,144.4 1,060.0 1,093.9 1,072.5 1,170.0 1,013.6 913.2 982.1 854.7 951.6 1,000 788.4 420.2 420.2 437.7 388.3 420.5 500 354.3 360.7 440.0 290.0 265
Slide 113: Changes in CAPEX
Changes in CAPEX （Billion yen） 2,063.1 2,150.0 2,000 1,862.4 1,806.6 1,687.2 1,700.0 1,674.8 1,697.0 1,728.3 1,728.3 1,687.6 749.0 705.4 1,500 572.8 706.3 569.1 595.3 597.1 576.4 593.7 734.3 698.6 482.0 481.0 1,000 522.5 527.4 498.1 583.4 549.6 541.0 622.1 527.4 501.1 279.3 662.0 657.4 500 259.0 232
Slide 114: Changes in asset composition
Changes in asset composition (Billions of yen) (1) The scope of aggregation for each of the figures presented for Finance Business is internal management figures of Finance business in Smart Life of NTT DOCOMO Group in Integrated ICT Business Segment. Such figures include that calculated based on ce
Slide 115: Changes in Interest-bearing Debt
Changes in Interest-bearing Debt （Billion yen） 12,000.0 120.0% Debt/Equity ratio* 100.8% 96.1% 97.4% 10,000.0 100.0% 88.9% 8,000.0 80.0% 6,000.0 60.0% 51.9% 47.1% 45.2% 46.0% 43.9% 9,591.0 9,600.0 40.6% 4,000.0 8,230.5 40.0% 7,624.3 7,364.3 4,699.9 2,000.0 4,163.3 4,088.2 3,971.6 4,262.7 20.0% 3,854
Slide 116: Changes in Number of Employees
Changes in Number of Employees 333,850 338,650 338,450 345,700 319,050 324,650 324,650 (325,050) (329,850) (331,100) (338,550) 307,900 (296,500) (298,900) (298,900) (284,550) 51,400 284,550 27,550 28,100 45,850 46,500 47,150 51,050 300,000 274,850 (275,650) 26,650 (27,500) (28,050) (45,750) (46,450)
Slide 117: Changes of Outstanding Shares
Changes of Outstanding Shares (Hundred million shares) 1,400 1,276 Cumulative total of shares decreased by around ▲34% 1,200 (▲2.6% Average Decrease Annually) 1,000 837 800 600 400 200 0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024E (Note1) Outsta
Slide 118: Age Distribution of Employees at NTT East and NTT West
Age Distribution of Employees at NTT East and NTT West (As of March 31, 2024） Number of Employees 4,000 2,000 0 20 30 40 50 60 65 Age * Figures for NTT East include employees from the consolidated regional outsourcing companies (NTT EAST-MINAMIKANTO and others), NTT-ME and NTT EAST SERVICE, while fi
Slide 119: Fixed Broadband Business FTTH Subscriptions
Fixed Broadband Business FTTH Subscriptions * FTTH Subscriptions (Sum of NTT East and NTT West） 23.65 23.75 Reference: (millions subs) 23.27 23.58 FY2024E Breakdown of FTTH Subscriptions (millions subs) 22.56 FY2024E 21.66 Total FTTH Service: +0.1 Change from preceding Fiscal Year Hikari (1) Number
Slide 120: Broadband Access Services in Japan
Broadband Access Services in Japan Mobile Fixed Rakuten mobile market share Mobile Approx. 4％ Approx. Approx. FTTH 216.14M subs 200M 40M 40.54M subs SoftBank SoftBank market share Approx. 24％ 150M 30M KDDI KDDI market share Approx. 33％ 100M 20M NTT East and NTT DOCOMO NTT West Approx. 50M 90.12M sub
Slide 121: 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 122: Innovating a Sustainable Future for People and Planet
Innovating a Sustainable Future for People and Planet