East Japan Railway Company · TSE:9020
East Japan Railway — Q2 FY2017.3 Earnings Presentation
45 slides from East Japan Railway's earnings presentation, Oct 31, 2016
Slide 1: FY2017.3 Second Quarter Financial Results Presentation
FY2017.3 Second Quarter Financial Results Presentation October 31, 2016 East Japan Railway Company
Slide 2: Contents
Contents FY2017.3 Second Quarter Financial Results and 17 I. JR East Group Management Vision Ⅴ - Ever Onward - FY2017.3 Plan (consolidated) JR East Group Management Vision Ⅴ 4 Transportation - Results and Plan 18 Priority Groupwide Tasks (1) : 5 Station Space Utilization - Results and Plan 19 Improv
Slide 3: I. JR East Group Management Vision V - Ever Onward -
I. JR East Group Management Vision Ⅴ - Ever Onward -
Slide 4: JR East Group Management Vision V
JR East Group Management Vision Ⅴ Updated “Priority Initiatives Going Forward” of JR East Group Management VisionⅤ JR East Group Management Vision V - Ever Onward - (Announced on Oct. 30, 2012) Priority Groupwide Tasks Eternal Mission Pursuing Unlimited Potential Improve the Safety and Reliability o
Slide 5: Priority Groupwide Tasks (1): Improve the Safety and Reliability of Transportation
Priority Groupwide Tasks (1) : Improve the Safety and Reliability of Transportation As it approaches the 30th anniversary of its establishment, the JR East Group faces internal and external “change points,” including changes in railway systems, the increasingly flat division of work, and the rapid t
Slide 6: Priority Groupwide Task (2): Take on the Challenge of Enhancing Profitability
Priority Groupwide Task (2): Take on the Challenge of Enhancing Profitability Given the realization of large projects, such as the respective extension and opening of the Hokuriku and Hokkaido Shinkansen lines and the opening of the Ueno-Tokyo Line to expand the railway network as well as the comple
Slide 7: Priority Groupwide Task (3): Advance TICKET TO TOMORROW Initiatives
Priority Groupwide Task (3): Advance “TICKET TO TOMORROW” Initiatives JR East will steadily advance the “JR East 2020 Project” with a view to the Tokyo 2020 Olympic and Paralympic Games. Based on the “TICKET TO TOMORROW” communication slogan, the JR East Group will advance concerted initiatives aime
Slide 8: FY2019.3 Numerical Targets
FY2019.3 Numerical Targets (¥ billion,%) 2019.3/2016.3 2016.3 2017.3 2019.3 ■ Main assumptions Plan Target Increase / (For the three years ending Results (%) decrease FY2019.3) Operating revenues 2,867.1 2,878.0 2,967.0 +99.8 103.5 ・Real GDP growth rate Transportation 1,954.5 1,951.0 1,979.0 +24.4 1
Slide 9: Uses of Consolidated Cash Flows
Uses of Consolidated Cash Flows Targets FY2017.3 Consolidated operating Approx. ¥ 2.0 trillion cash flow (Three-year total to FY2019.3) Capital expenditures Approx. ¥ 1.6 trillion ¥ 520.0 billion * (Three-year total to FY2019.3) Investment needed for the continuous operation of business Approx. ¥1,0
Slide 10: II. FY2017.3 Second Quarter Financial Results and FY2017.3 Plan
II. FY2017.3 Second Quarter Financial Results and FY2017.3 Plan
Slide 11: FY2017.3 Second Quarter Financial Results and Plan (non-consolidated)
FY2017.3 Second Quarter Financial Results and FY2017.3 Plan (non-consolidated) (¥ billion) 2016.9 2016.9/2015.9 2017.3/2016.3 2015.9 Results 2016.3 2017.3 Increase / [Apr. plan] Increase / Results [Apr. plan] decrease (%) Results decrease (%) 1,041.8 Operating revenues 1,037.7 [1,039.0] +4.0 100.4 2
Slide 12: Passenger Revenues - 1st half Results and Main Positive and Negative Factors
Passenger Revenues - 1st half Results and Main Positive and Negative Factors (YoY, ¥ billion,％) Increase / (YoY, ¥ billion) Increase / decrease （％） Positive and Negative Factors Decrease Passenger revenues +2.2 Passenger revenues +2.2 100.2 Commuter passes revenues (Seasonal Tickets) +1.7 Commuter p
Slide 13: Passenger Revenues - 1st half Results and Full-term Plan
Passenger Revenues - 1st half Results and Full-term Plan (Apr. plan) (YoY, ¥ billion,%) Total 1st half Main factors behind change Trend [Results] 2nd half +1.9 billion 100.1% Passenger revenues 100.2% 100.3% [100.2%] 100.0% Commuter passes +1.4 billion 100.3% 100.3% 100.3% (Seasonal tickets) 100.3%
Slide 14: Topics (Hokkaido Shinkansen and Hokuriku Shinkansen)
Topics (Hokkaido Shinkansen and Hokuriku Shinkansen) ■ Hokkaido Shinkansen ■ Hokuriku Shinkansen Amount contributed by Hokkaido Shinkansen (target and result) Amount contributed by Hokuriku Shinkansen (target and result) * Shinkansen increase net of conventional line decrease * Shinkansen increase n
Slide 15: Topics (Inbound Tourism)
Topics (Inbound Tourism) ■ Inbound Tourism ■Railway business ■Lyfe-style business Visitors to Japan (first half) Inbound revenue (target and result) Accomodation revenue for foreign guests *JR East’s share of JR ticket sales, including sales (result) (Millions) ［Reference：JNTO］ of discount railway t
Slide 16: Operating Expenses (non-consolidated) - FY2017.3 Second Quarter Results
Operating Expenses (non-consolidated) - FY2017.3 Second Quarter Results (¥ billion) 2015.9 2016.9 2016.9/2015.9 Increase / Main factors behind change Results Results decrease (%) Operating expenses 780.9 799.4 +18.4 102.4 Personnel expenses 236.0 231.1 -4.9 97.9 ・Decrease in number of employees etc.
Slide 17: FY2017.3 Second Quarter Results and Plan (consolidated)
FY2017.3 Second Quarter Financial Results and FY2017.3 Plan (consolidated) (¥ billion) 2016.9 2016.9/2015.9 2016.3 2017.3 2017.3/2016.3 2015.9 Results Increase / Apr. Increase / Results (%) Results (%) [Apr. plan] decrease plan decrease 1,435.1 Operating revenues 1,421.2 [1,432.0] +13.8 101.0 2,867.
Slide 18: Transportation - Results and Plan
Transportation - Results and Plan (¥ billion) 2016.9/ 2017.3/ 2015.9 2016.9 2016.3 2017.3 Plan 2015.9 2016.3 Operating +5.1 -3.5 revenues 984.1 989.2 100.5％ 1,954.5 1,951.0 99.8％ Operating -14.1 -40.5 income 224.0 209.9 93.7％ 348.5 308.0 88.4％ Operating revenues - main positive and negative factors
Slide 19: Station Space Utilization - Results and Plan
Station Space Utilization - Results and Plan (¥ billion) 2016.9/ 2017.3/ 2015.9 2016.9 2016.3 2017.3 Plan 2015.9 2016.3 Operating -0.9 +2.0 revenues 201.5 200.5 99.5％ 399.9 402.0 100.5％ Operating -2.0 -2.0 income 18.9 16.9 89.3％ 35.0 33.0 94.0％ Operating revenues FY2017.3 Topics - main positive and
Slide 20: Shopping Centers & Office Buildings - Results and Plan
Shopping Centers & Office Buildings - Results and Plan (¥ billion) 2016.9/ 2017.3/ 2015.9 2016.9 2016.3 2017.3 Plan 2015.9 2016.3 Operating +4.5 +18.0 revenues 125.0 129.5 103.6％ 255.9 274.0 107.0％ Operating -0.0 +3.3 income 38.3 38.3 99.9％ 71.6 75.0 104.7％ Operating revenues FY2017.3 Topics - main
Slide 21: Others - Results and Plan
Others - Results and Plan (¥ billion) 2016.9/ 2017.3/ 2015.9 2016.9 2016.3 2017.3 Plan 2015.9 2016.3 Operating +5.1 -5.6 revenues 110.6 115.7 104.7％ 256.6 251.0 97.8％ Operating +1.5 -0.0 income 10.1 11.7 115.7％ 35.0 35.0 99.9％ Operating revenues Hotel operating results 1st-half - main positive and n
Slide 22: Major Projects of the Life-style Business Going Forward
Major Projects of the Life-style Business Going Forward Total floor space (m2) Opening Office (m2) Commercial (m2) Hotel (rooms) Approx. Approx. Approx. JR Shinjuku Miraina Tower Mar. & Apr. 2016 - 111,000 77,200 9,400 Approx. Approx. Mar. 2016 - - Sendai Station East Exit 43,000 41,000 Development
Slide 23: Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses
Summary of Non-operating Income / Expenses and Extraordinary Gains / Losses (consolidated) (¥ billion) 2015.9 2016.9 Increase/ 2016.3 2017.3 Increase/ Results Results decrease Results Plan decrease Operating income 292.3 277.6 -14.6 487.8 450.0 -37.8 Non-operating income or expenses -34.7 -32.6 +2.0
Slide 24: Summary of Cash Flows (consolidated)
Summary of Cash Flows (consolidated) (¥ billion) Increase/ 2015.9 2016.9 decrease Increase in payments of income taxes: - 28.3 Cash Flows from Operating Activities (I) 298.2 281.2 -16.9 Increase of payments for purchases of fixed assets: -16.0 Decrease of proceeds from sales of fixed assets: -9.0 Ca
Slide 25: Change in Capital Expenditures (consolidated)
Change in Capital Expenditures (consolidated) (¥ billion) 2013.3 2014.3 2015.3 2016.3 2016.9 2017.3 (Results) (Results) (Results) (Results) (Results) (Plan) Growth investment 58.9 85.9 65.2 47.0 40.0 Investment needed for Transportation the continuous 316.2 325.9 336.5 345.2 86.8 353.0 operation of
Slide 26: Change in Interest-bearing Debt Balance (consolidated)
Change in Interest-bearing Debt Balance (consolidated) (¥ billion) 2012.3 2013.3 2014.3 2015.3 2016.3 2016.9 (Results) (Results) (Results) (Results) (Results) (Results) 1,599.6 1,659.7 1,719.7 1,764.8 1,809.9 1,829.9 Bonds (1.97%) (1.94%) (1.90%) (1.84%) (1.83%) (1.79%) 815.9 853.7 899.8 965.4 993.7
Slide 27: III. Reference Materials
JR-EAST lll. Reference Materials
Slide 28: FY2017.3 Traffic Volume and Passenger Revenues - Plan
FY2017.3 Traffic Volume and Passenger Revenues - Plan Traffic Volume Passenger Revenues Commuter Passes: Seasonal Tickets (million passenger kilometers) (¥ billion) Non-commuter Passes: Ordinary Tickets 2016.3 2017.3 Increase / 2016.3 2017.3 Increase / (%) (%) Results Plan decrease Results Plan decr
Slide 29: Operation Suspended Lines and Segments Damaged by Tsunami
Operation Suspended Lines and Segments Damaged by Tsunami during Great East Japan Earthquake Akita Akita ■ Current status of conventional lines along Morioka the Pacific coast damaged by tsunami Miyako Restoration work underway Bus Rapid Transit (BRT) systems Kitakami (transfer of management of oper
Slide 30: Suica
Suica ■ Suica Electronic Money - Transactions and Compatible Stores * Figures include results of other affiliated stores. (Compatible （利用可能店舗数） Stores) (Transactions per month: million) （１箇月当たり利用件数：万件） 380,000 150.0 15,000 Suica cards issued: 61.44 million 店舗数（その他加盟店） Other Suica compatible stores 3
Slide 31: (Topics) Getting started with Suica and Apple Pay
(Topics) Getting started with Suica and Apple Pay Overview of using Suica and View Card with Apple Pay User guide（image） ※ For further details, please visit the website below. http://www.jreast.co.jp/appsuica (in Japanese only) 31
Slide 32: Development of Station Buildings
Development of Shinagawa Omiya Shinagawa Tachikawa Nippori Tokyo Ueno Akabane South Dec. 2010 Mar. 2011 Oct. 2007 (phase I) (phase I) (phase I) Mar. 2008 Dec. 2010 Feb. 2011 Jul. 2011 Beginning Oct. 2008 Jun. 2009 (phase I) (phase II) (phase II) of Mar. 2005 Oct. 2005 (phase II) Mar. 2010 (floor spa
Slide 33: Hotel Operations - Overview
Hotel Operations - Overview ■ Metropolitan Hotels (10 hotels, 3,032 guest rooms) Hotel Metropolitan (Ikebukuro), Edmont (Iidabashi), Takasaki, Nagano, Sendai, Morioka, Morioka New Wing, Akita, Yamagata and Marunouchi Operating revenues* : ¥ 16.7 billion (Sep. 2016) Occupancy rate: 81.8% ■ HOTEL METS
Slide 34: Major Subsidiaries - Results and Plan
Major Subsidiaries - Results and Plan (¥ billion) 2015.9 2016.9 2016.9/ 2017.3 2017.3/ Results Results 2015.9 Plan 2016.3 Operating JR East revenues 99.2 98.0 98.8% 190.1 96.8% Retail Net Operating (J-Retail) income 2.1 1.1 53.8% 0.5 19.4% Operating revenues 31.2 30.4 97.3% 61.2 98.3% Nippon Restaur
Slide 35: Shinagawa Development Project
Shinagawa Development Project Schedule for the Formation of an International Exchange Hub ・We aim to create a town that can continue growing as an international exchange hub through interim use Town able to with a view to the 2020 Tokyo Summer Olympic and Paralympic Games and the subsequent opening
Slide 36: Shinagawa Development Project
Shinagawa Development Project Basic Summary of the New Station ・ We aim to transmit the appeal of this new community by fusing the train station building with the Tentatively scheduled surrounding neighborhood to form a true sense of unity and create a link between people and the region for spring 2
Slide 37: Breakdown of Shinkansen and Conventional Lines FY2016.3 Operating Performance
Breakdown of Shinkansen and Conventional Lines FY2016.3 Operating Performance (¥ billion) Shinkansen Conventional Lines 2016.3/2015.3 2016.3/2015.3 2015.3 2016.3 (%) 2015.3 2016.3 (%) Operating kilometers (km) 1,194 1,194 100.0 6,264 6,263 100.0 Passenger kilometers (million) 20,914 22,848 109.2 109
Slide 38: Key Financial Indicators(1)
Key Financial Indicators(1) Additional Information for bond Investors Trend in Interest-bearing Debt / Net Cash Provided by Operating (¥ billion) Activities and Interest Coverage Ratio (times) 800.0 10.0 8.8 700.0 9.0 7.6 7.8 8.0 600.0 6.3 6.2 7.0 6.0 500.0 6.0 400.0 5.5 5.6 5.8 5.0 5.3 300.0 4.8 4.
Slide 39: Key Financial Indicators(2)
Key Financial Indicators(2) Additional Information for bond Investors Trend in Debt to Equity Ratio （¥ billion） (times) 4,000.0 2.0 3,340.2 3,307.4 3,288.4 3,275.5 3,241.9 3,231.6 1.8 3,000.0 1.6 1.3 1.5 1.5 1.3 1.4 2,442.1 2,543.0 2,000.0 2,180.6 2,285.6 1.0 2,030.6 1,874.4 1,000.0 0.5 0.0 0.0 2012
Slide 40: Breakdown of Interest-bearing Debt
Breakdown of Interest-bearing Debt Additional information for bond investors Breakdown of consolidated interest-bearing debt (As of Sep. 30, 2016) Balance (¥ billion) Breakdown Average interest rate Average maturity Bonds 1,829.9 56.6% 1.79% 9.97 years Long-term loans 1,011.3 31.3% 1.17% 7.36 years
Slide 41: 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 Moody’s Aa3 (Stable) Standar
Slide 42: Outlook of Interest-bearing Debt Maturity
Outlook of Interest-bearing Debt Maturity Additional information for bond investors Redemption ladder of interest-bearing debt (consolidated) (¥ billion) Redemption of the Number 1 Long-terms liabilities incurred for purchase of railway facilities and Number 2 long-term liabilities incurred for purc
Slide 43: Outlook of Bond Maturity
Outlook of Bond Maturity Additional information for bond investors Redemption ladder of bonds(non-consolidated) (¥ billon) Domestic bonds (unsecured, issued in FY2017.3) 180.0 Euro-GBP bonds 160.0 Domestic bonds (unsecured) 140.0 Domestic bonds (general mortage) 120.0 100.0 100.0 135.0 58.7 80.0 105
Slide 44: Bonds Issuance in FY2017.3
Bonds Issuance in FY2017.3 Additional Information for bond Investors Total amount Issue Reoffer JGB Series Tenor Coupon Issue date Maturity date of issue price yield spread 115 10 ¥ 10.0 billion 0.060% ¥100 0.060% ―* 2016.7.28 2026.7.28 116 20 ¥ 10.0 billion 0.210% ¥100 0.210% ―* 2016.7.28 2036.7.28
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) http://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 th
East Japan Railway Company — Q2 FY2017.3 Earnings Presentation on 6ix