East Japan Railway Company · TSE:9020
East Japan Railway — Q3 FY2021.3 Earnings Presentation
47 slides from East Japan Railway's earnings presentation, Feb 1, 2021
Slide 1: FY2021.3 Third Quarter Financial Results and New Numerical Targets for Move Up 2027
FY2021.3 Third Quarter Financial Results and Establishment of New Numerical Targets for the Group Management Vision “Move Up” 2027 Presentation February 1, 2021 East Japan Railway Company
Slide 2: Contents
Contents Establishment of New Numerical Targets for the Group Ⅰ FY2021.3 Third Quarter Financial Results and FY2021.3 Plan Ⅱ Management Vision “Move Up” 2027 Summary of FY2021.3 Third Quarter Financial Results 4 Numerical Targets of “Move Up” 2027 (FY2026) 20 (non-consolidated / consolidated) Cost R
Slide 3: FY2021.3 Third Quarter Financial Results and FY2021.3 Plan
Ⅰ FY2021.3 Third Quarter Financial Results and FY2021.3 Plan
Slide 4: Summary of FY2021.3 Third Quarter Financial Results
Summary of FY2021.3 Third Quarter Financial Results (non-consolidated / consolidated) non-consolidated consolidated 4
Slide 5: Cost Reduction Results
Cost Reduction Results (¥ billion) Capital Operating Expenses Total Expenditures Plan Results Plan Plan Plan*2 2020.9 2020.12 2021.1 2020.9 2021.1 JR East 62.0 75.5 96.5 54.0 116.0 150.5 Group companies*1 30.0 30.0 35.0 10.0 40.0 45.0 Total 92.0 105.5 131.5 64.0 156.0 195.5 *1 Simple total for respe
Slide 6: Passenger Revenues - FY2021.3 Third Quarter Results
Passenger Revenues - FY2021.3 Third Quarter Results 6
Slide 7: Passenger Revenues - Third Quarter Results and Outlook
Passenger Revenues - FY2021.3 Third Quarter Results and Outlook ■Non-commuter passes 100% Conventional lines *The black dotted lines show September Plan (Kanto Area Network) Third Quarter Results : About 80% (September Plan) ¥7.0 billion above the plan Difference between Conventional lines Conventio
Slide 8: Passenger Revenues - Third Quarter Results and Full-term Plan
Passenger Revenues - FY2021.3 Third Quarter Results and Full-term Plan *As the effect of the COVID-19 pandemic on basic revenues cannot be accurately estimated at the present juncture, it has been treated as special factor, and the basic trend has been presented at 100%. 8
Slide 9: Operating Expenses (non-consolidated) - Third Quarter Results
Operating Expenses (non-consolidated) - FY2021.3 Third Quarter Results (¥ billion) 2019.12 2020.12 2020.12/2019.12 Increase / Results Results Decrease (%) Main factors behind change Operating expenses 1,246.6 1,174.0 -72.6 94.2 Personnel ・Bonus related: -31.5 expenses 332.3 285.4 -46.9 85.9 ・Decreas
Slide 10: Operating Expenses (non-consolidated) - FY2021.3 Plan
Operating Expenses (non-consolidated) - FY2021.3 Plan (¥ billion) 2020.3 2021.3 Plan 2021.3/2020.3 September January Increase / Increase / Results Plan Plan Decrease Decrease (%) Main factors behind change Operating expenses 1,767.0 1,714.0 1,680.0 -34.0 -87.0 95.1 Personnel [-] Bonus related expens
Slide 11: Transportation - Results and Plan
Transportation - Results and Plan (¥ billion) 2020.12/ 2020.3 2021.3/ 2021.3 Plan 2019.12 2020.12 2019.12 Results [September Plan] 2020.3 Operating 1,545.1 820.6 -724.5 1,994.5 1,083.0 -911.5 revenues 53.1% [1,170.0] 54.3% Operating 316.8 -331.2 -648.0 250.5 -565.0 -815.5 income - [-529.0] - Operati
Slide 12: Retail & Services - Results and Plan
Retail & Services - Results and Plan (¥ billion) 2020.12/ 2020.3 2021.3/ 2019.12 2020.12 2021.3 Plan 2019.12 Results [September Plan] 2020.3 Operating 385.3 231.2 -154.0 502.0 333.0 -169.0 revenues 60.0% [375.0] 66.3% Operating 28.3 -12.6 -40.9 34.3 -4.0 -38.3 income - [-4.0] - Effect of COVID-19 ¥-
Slide 13: Real Estate & Hotels - Results and Plan
Real Estate & Hotels - Results and Plan (¥ billion) 2020.12/ 2020.3 2021.3 Plan 2021.3/ 2019.12 2020.12 2019.12 Results [September Plan] 2020.3 Operating 268.2 200.6 -67.6 348.5 276.0 -72.5 revenues 74.8% [305.0] 79.2% Operating 67.0 13.8 -53.1 74.6 24.0 -50.6 income 20.7% [24.0] 32.2% Effect of COV
Slide 14: Others - Results and Plan
Others - Results and Plan (¥ billion) 2020.12/ 2020.3 2021.3 Plan 2021.3/ 2019.12 2020.12 2019.12 Results [September Plan] 2020.3 Operating 67.8 53.7 -14.1 101.5 81.0 -20.5 revenues 79.2% [80.0] 79.8% Operating 15.1 7.3 -7.7 23.8 12.0 -11.8 income 48.8% [11.0] 50.3% *Operating revenues: ¥80.8 billio
Slide 15: Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses
Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses (consolidated) 15
Slide 16: 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 in FY2017.3. 16
Slide 17: 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 2020.12 (Results) (Results) (Results) (Results) (Results) (Results) 1,809.9 1,839.9 1,770.1 1,730.1 1,710.2 2,020.2 Bonds (1.83％) (1.73％) (1.68％) (1.61％) (1.56％) (1.34％) 993.7 1,030.1 1,072.9 1,101.
Slide 18: Fund-Raising
Fund-Raising ■Policy • Secure adequate liquidity through “early, abundant, long-term” funding • Take flexible measures (funding, repayment) while carefully analyzing revenue trends going forward • Ensure that the utilization of short-term fund-raising does not accumulate excessive interest-bearing d
Slide 19: Establishment of New Numerical Targets for the Group Management Vision Move Up 2027
Ⅱ Establishment of New Numerical Targets for the Group Management Vision “Move Up” 2027
Slide 20: Numerical Targets of Move Up 2027 (FY2026)
Numerical Targets of “Move Up” 2027 (FY2026) Previous targets for the fiscal New targets for the fiscal year ending March 31, 2023 year ending March 31, 2026 (announced in July 2018) (announced in January 2021) Consolidated operating 3,090.0 billion yen 3,295.0 billion yen revenue [3,325.0 billion y
Slide 21: Numerical Targets of Move Up 2027 (FY2026) by Segment
Numerical Targets of “Move Up” 2027 (FY2026) Consolidated operating Consolidated operating Segment revenues * income 1,970.0 billion yen Transportation 252.0 billion yen [1,980.0 billion yen] 550.0 billion yen Retail & Services 57.0 billion yen [709.0 billion yen] 480.0 billion yen Real Estate & Hot
Slide 22: Numerical Targets of Move Up 2027 (Transportation)
Numerical Targets of “Move Up” 2027 (Transportation) （billion yen） Consolidated operating revenues ＜JR EAST＞ ・Passenger Revenues Approximately 85% of the pre-COVID-19 level (at Dec. 31 2021) Approximately 90% of the pre-COVID-19 level (at Dec. 31 2022) 【Main initiatives going forward】 2,038.1 1,994.
Slide 23: Numerical Targets of Move Up 2027 (Transportation) - Passenger Revenue Outlook
Numerical Targets of “Move Up” 2027 (Transportation) ■Outlook of passenger Revenues Post COVID 100% 95% 90% 85% 80% 75% 70% Conventional lines (Kanto Area Network) 65% Shinkansen 60% Commuter passes 55% 50% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2021 2022 FY 2023 2022 FY 2024 2023 ■Basic trend at With COVID-1
Slide 24: Numerical Targets of Move Up 2027 (Retail & Services)
Numerical Targets of “Move Up” 2027 (Retail & Services) （billion yen） 【Outlook of operating revenues of each businesses】 ＜EKINAKA Stores＞ ・By post-COVID-19 (during FY2023), will recover in tandem with flows of customers that use railways [ 709.0] ・ Approximately over 80% of the pre-COVID-19 level 52
Slide 25: Numerical Targets of Move Up 2027 (Real Estate & Hotels)
Numerical Targets of “Move Up” 2027 (Real Estate & Hotels) （billion yen） 【Outlook of operating revenues of each businesses】 ＜Shopping center business＞ ・Until post-COVID-19 (during FY2023), Trending at approximately 90% of the pre-COVID-19 level [ 535.0 ] 480.0 ・ Approximately the same level of the p
Slide 26: Numerical Targets of Move Up 2027 (Others)
Numerical Targets of “Move Up” 2027 (Others) （billion yen） 【Outlook of operating revenues and expenses of the segment】 Although there has been a decrease due to the absence of the major system development contracts received in FY2019 and FY2020, revenues and profits are expected to trend upward from
Slide 27: Financing and Money usage
Financing and Money usage Financing Money usage Corporate bonds, Priority budget Advance investment that loans, asset allocation will contribute to liquidation, etc. 275.0 bil. yen technology innovation Rapidly advance Growth investment investment that will 1.828 tril. yen contribute to future growt
Slide 28: Capital Expenditures Implementation Policy
Capital Expenditures Implementation Policy 【Growth investment】 Rapidly advance investment that will contribute to future growth 【Investment needed for the continuous operation of business】 Premised on ensuring safety, revise investment scale 【Priority budget allocation (Investment in innovation, etc
Slide 29: Debt Management Policy
Debt Management Policy ■ Maintain the approach to interest-bearing debt set out in “Move Up” 2027 “Seek net interest-bearing debt / EBITDA of about 3.5 times over the medium to long term” ■ Abovementioned ratio is going to rise to the FY 2022.3 temporarily. However, improve to 5 times or less by FY2
Slide 30: Shareholder returns Policy
Shareholder returns Policy Approach to Shareholder Returns: Maintain the Policy of “Move Up” 2027 ■ In the medium-to-long term, we are setting our sights on realizing a total return ratio target of 40% and a dividend payout ratio of 30%. ■ We will continue increasing dividends stably while proceedin
Slide 31: Numerical targets for specific actions (FY2026)
Numerical targets for specific actions (FY2026) Previous targets for the New targets for the fiscal Values Focus fiscal year ending year ending Numerical targets for specific actions to create points March 31, 2023 March 31, 2026 (announced in July 2018) (announced in January 2021) Ticketless servic
Slide 32: Reference Materials
JR-EAST Il Reference Materials
Slide 33: FY2021.3 Traffic Volume and Passenger Revenues - Plan
FY2021.3 Traffic Volume and Passenger Revenues - Plan Traffic Volume Passenger Revenues Commuter Passes: Seasonal Tickets (million passenger kilometers) (¥ billion) Non-commuter Passes: Ordinary Tickets 2020.3 2021.3 Increase / 2020.3 2021.3 Increase / (%) (%) Results Plan Decrease Results Plan Decr
Slide 34: Hotel Operations - Overview
Hotel Operations - Overview Operating revenues＊1 ¥ 17.6 billion （2020.12） Operating income＊1 ¥ -14.9 billion （2020.12） *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］
Slide 35: Progress in the Speeding Up Move Up 2027
Progress in the Speeding Up “Move Up” 2027 Press Releases Contents (Date) 9/3/2020 Announced new train control system designed for introduction to local lines going forward ・A new train control system, which utilizes GNSS and a mobile wireless communication network, will be developed with the aim of
Slide 36: Reorganization of Group Businesses (1)
Reorganization of Group Businesses (1) JR East Cross Station Co., Ltd. (Plan to establish on April 1, 2021) With a view to maximizing the value of railway stations, preparations have been made to establish JR East Cross Station Co., Ltd., through the merger of subsidiaries JR East Retail Net Co., Lt
Slide 37: Reorganization of Group Businesses (2)
Reorganization of Group Businesses (2) JR Chuo Line Community Design Co., Ltd. (Plan to establish on April 1, 2021) With a view to realizing the Lineside Urban Development Vision, which aims to create comfortable living spaces for people of all ages, preparations have been made to establish JR Chuo
Slide 38: Suica
Suica ■Number of e-money available shops ■Largest number of e-money transactions in one month (thousand) * Figures include results of other affiliated stores. (10 million) * Figures include results of other affiliated stores. 1,200 30 1,150 1,101 1,100 1,050 Largest number of e-money transactions in
Slide 39: Mobile Suica / eki-net
Mobile Suica / eki-net ■Number of Mobile Suica members ■Number of eki-net members (10 thousand) (10 thousand) 1,200 1,400 October 2019 1,252 Beginning the service of 1,054 granting JRE POINT when 1,200 1,000 using Suica for railways 1,118 934 994 1,000 800 886 715 802 800 October 2016 722 600 Beginn
Slide 40: JRE POINT
JRE POINT ■Number of JRE POINT members (10 thousand) October 2019 1,400 Beginning the service of granting JRE POINT when using Suica for 1,223 1,200 railways June 2018 Integration of View Thanks Point to JRE POINT 1,000 800 December 2017 600 Integration of Suica Point to JRE POINT 400 200 0 '16/9 '1
Slide 41: Key Financial Indicators(1)
Key Financial Indicators(1) Additional Information for bond Investors Trend in Net Interest-bearing Debt / EBITDA (¥ billion) (times) 1,000.0 5.0 847.3 830.4 849.2 853.5 4.2 800.0 4.0 755.5 600.0 3.5 3.5 3.4 3.4 3.0 400.0 2.0 200.0 1.0 0.0 0.0 (36.2) (200.0) (1.0) 2016.3 2017.3 2018.3 2019.3 2020.3
Slide 42: Key Financial Indicators(2)
Key Financial Indicators(2) Additional Information for bond Investors Trend in Interest Coverage Ratio and Debt to Equity Ratio (times) (times) 10.9 12.0 2.0 10.5 8.8 9.2 9.0 9.0 1.5 1.5 6.0 1.3 1.0 1.2 1.1 1.1 1.0 3.0 0.5 0.0 0.0 (3.0) (0.5) (5.4) (6.0) (1.0) 2016.3 2017.3 2018.3 2019.3 2020.3 2020
Slide 43: 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 Dec. 31, 2020) Balance (¥ billion) Breakdown Average interest rate Average maturity Bonds 2,020.2 47.5% 1.34% 13.88 years Long-term loans 1,264.3 29.7
Slide 44: 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 FY2021.3) 250.0 Euro-GBP bonds 200.0 Domestic bonds (unsecured) Domestic bonds (general mortgage) 150.0 150.0 100.0 58.7 90.0 65.0 20.0 78.
Slide 45: Bonds Issuance in FY2021.3
Bonds Issuance in FY2021.3 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
Slide 46: Bonds Issuance in FY2021.3
Bonds Issuance in FY2021.3 Additional Information for bond Investors Total amount Issue Reoffer JGB Maturity Series Tenor Coupon Issue date of issue price yield Spread date 158 20 ¥ 20.0 billion 0.560% ¥100 0.560% +17.5bp 2020.12.18 2040.12.18 159 30 ¥ 30.0 billion 0.836% ¥100 0.836% +19.5bp 2020.12
Slide 47: 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
East Japan Railway Company — Q3 FY2021.3 Earnings Presentation on 6ix