Kyushu Railway Company · TSE:9142
Kyushu Railway — H1 FY21.3 Earnings Presentation
40 slides from Kyushu Railway's earnings presentation, Nov 5, 2020
Slide 1: FY21.3 Semi-Annual Investors Meeting
FY21.3 Semi-Annual Investors Meeting November 5, 2020 Kyushu Railway Company
Slide 2: Contents
Contents Highlights 3 Second Quarter Financial Results Ⅰ 4 Overview and Full-Year Forecasts Ⅱ Status of major segments 12 Ⅲ Medium-Term Business Plan 2019‒2021 17 Understanding of environment during the Ⅳ period with COVID-19, strategies that can 20 be implemented Understanding of issues to be consi
Slide 3: Highlights
Highlights Second Quarter ◼ Declines in consolidated operating revenue, operating income, ordinary income, and net Financial Results income Overview and Full- ◼ For full-year forecasts and dividend forecasts, no change from announcement on Year Forecasts September 24 ◼ There was a decline in August
Slide 4: Second Quarter Financial Results Overview and Full-Year Forecasts
Ⅰ SECOND QUARTER FINANCIAL RESULTS OVERVIEW AND FULL-YEAR FORECASTS 4
Slide 5: Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2020
Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2020 Operating revenue Substantial decline in revenue due to such factors as （\bil） the decrease in railway transportation revenues 6 months ended September 30, 2019 September 30, 2020 6 months ended YoY resulting from th
Slide 6: Results for the First Six Months of FY21.3 (by segment)
Results for the First Six Months of FY21.3 (by segment) （\bil） 6 months ended 6 months ended YoY Major factors September 30, 2019 September 30, 2020 Operating revenue 212.8 124.5 (88.3) 58.5% Transportation 90.5 41.3 (49.1) 45.7% Decrease in passenger demand (railway, hydrofoil ferry, bus) due to in
Slide 7: Results for the First Six Months of FY21.3 (non-consolidated)
Results for the First Six Months of FY21.3 (non-consolidated) (\bil) 6 months ended 6 months ended September 30, September 30, YoY Major Factors 2019 2020 Operating revenue 107.5 56.2 (51.2) 52.3% Railway transportation 77.2 32.6 (44.5) 42.3% Influence of the COVID-19 infection revenues Shinkansen 2
Slide 8: Consolidated Financial Highlights for FY21.3
Consolidated Financial Highlights for FY21.3 Operating revenue Results Forecasts YoY Operating revenue declined significantly owing FY20.3 FY21.3 in part to a decrease in railway transportation Operating revenue 432.6 291.7 (140.9) 67.4% revenues [¥(69.7) billion] and the influence of changing JR Ky
Slide 9: Consolidated Financial Forecasts (by segment)
Consolidated Financial Forecasts (by segment) (\bil) Results Forecasts YoY Major factors FY20.3 FY21.3 Operating revenue 432.6 291.7 (140.9) 67.4% Transportation 173.7 97.3 (76.4) 56.0% Decrease in passenger demand (railway, hydrofoil ferry, bus) due to influence of the COVID-19 infection Railway Bu
Slide 10: Non-consolidated Financial Forecasts
Non-consolidated Financial Forecasts (\bil) Results Forecasts YoY Major factors Cost FY20.3 FY21.3 reductions Operating revenue 214.8 145.0 (69.8) 67.5% Railway transportation 147.3 77.6 (69.7) 52.7% Influence of the COVID‒19 infection revenues Shinkansen 52.3 24.0 (28.3) 45.9% Conventional Lines 95
Slide 11: Dividend Forecasts
Dividend Forecasts ◼ The Company views the return of profits to shareholders as one of its most important management tasks. Accordingly, the Company believes it is important to provide stable shareholder returns over the long term. Over the period to the fiscal year ending March 31, 2022, the Compan
Slide 12: Status of Major Segments
Il! STATUS OF MAJOR SEGMENTS 12
Slide 13: Transportation Segment
Transportation Segment 【Results】 【Forecasts】 （\bil） （\bil） 6 months ended 6 months ended Results Forecasts September 30, September 30, YoY YoY 2019 2020 FY20.3 FY21.3 Operating revenue 90.5 41.3 (49.1) 45.7% 173.7 97.3 (76.4) 56.0% Railway Business 86.1 38.9 (47.2) 45.2% 165.2 92.2 (73.0) 55.8% (non
Slide 14: Real Estate and Hotels Segment (1)
Real Estate and Hotels Segment (1) Real estate leasing business 【Results】 （\bil） 【Forecasts】 （\bil） 6 months ended 6 months ended Results Forecasts September 30, September 30, YoY YoY FY20.3 FY21.3 2019 2020 Operating revenue 27.4 22.9 (4.4) 83.7% 55.2 49.5 (5.7) 89.6% Operating income 8.9 5.0 (3.9)
Slide 15: Real Estate and Hotels Segment (2)
Real Estate and Hotels Segment (2) Condominium sales business 【Results】 （\bil） 【Forecasts】 （\bil） 6 months ended 6 months ended Results Forecasts September 30, September 30, YoY YoY FY20.3 FY21.3 2019 2020 Operating revenue 6.5 1.9 (4.5) 29.3% 18.9 21.5 2.5 113.6% Operating income 0.6 (0.3) (0.9) -
Slide 16: Retail and Restaurant Segment
Retail and Restaurant Segment 【Results】 【Forecasts】 （\bil） （\bil） 6 months ended 6 months ended Results Forecasts September 30, September 30, YoY YoY 2019 2020 FY20.3 FY21.3 Operating revenue 53.0 29.4 (23.5) 55.5% 104.6 52.7 (51.9) 50.4% Operating income 1.7 (1.9) (3.6) - 2.8 (2.2) (5.0) - EBITDA 2
Slide 17: Medium-Term Business Plan 2019-2021
Ⅲ MEDIUM-TERM BUSINESS PLAN 2019‒2021 17
Slide 18: Withdrawal of numerical management targets and reference indicators
Withdrawal of numerical management targets and reference indicators ◼ Due to the influence of COVID-19, the operating environments for the Group’s businesses are changing significantly. The Company determined that the achievement of the targets in the Medium-Term Business Plan, for which the final y
Slide 19: Future Strategy
Future Strategy Basic policy (priority initiatives) Major initiatives to date Future Strategy Revising segments and portfolios Accelerate Rearranging businesses and reorganizing the Group Further strengthen our Growth field focus, M&A investment Accelerate Growth field focus, M&A investment manageme
Slide 20: Understanding of environment during the period with COVID-19, strategies that can be implemented
Ⅳ Understanding of environment during the period with COVID-19, strategies that can be implemented 20
Slide 21: Understanding of environment during COVID-19, strategies (1)
Understanding of environment during the period with COVID-19, strategies that can be implemented (1) Social mission of a transportation network We will operate our businesses with the highest priority on safety and fulfill our social mission through cooperation with the national government and local
Slide 22: Understanding of environment during COVID-19, strategies (2)
Understanding of environment during the period with COVID-19, strategies that can be implemented (2) Demand creation Collaboration with local governments/local community residents and New tourist train with the Departure ceremony for the full name 36+3 opening of the Hohi Main Line initiatives to ne
Slide 23: Understanding of environment during COVID-19, strategies (3)
Understanding of environment during the period with COVID-19, strategies that can be implemented (3) Miyazaki Station west entrance development ◼ Planning opening of “Amu Plaza Miyazaki” on November 20, 2020 (Implementing advance opening of “Himuka Kirameki Ichiba,” a commercial facility located und
Slide 24: Understanding of environment during COVID-19, strategies (4)
Understanding of environment during the period with COVID-19, strategies that can be implemented (4) ◼ In regard to cost reductions, we will implement temporary measures on an urgent basis, including such as controlling personnel costs and postponing maintenance expenses. ◼ Moving forward, we will a
Slide 25: Understanding of issues to be considered in preparation for the period after COVID-19
Ⅴ Understanding of issues to be considered in preparation for the period after COVID-19 25
Slide 26: Issues to be considered for the period after COVID-19 (1)
Understanding of issues to be considered in preparation for the period after COVID-19 (1) Approach to future business strategies and financial strategies Balance sheet at end Balance sheet at end of Currently of FY2019/3 second quarter of FY2021/3 Period after COVID-19 (Period with COVID-19) Aiming
Slide 27: Issues to be considered for the period after COVID-19 (2)
Understanding of issues to be considered in preparation for the period after COVID-19 (2) Improving earnings, centered on the railway Promoting city-building through development in business areas around stations ◼ With ongoing, large-scale declines in railway users, there is a need for fundamental i
Slide 28: Issues to be considered for the period after COVID-19 (3)
Understanding of issues to be considered in preparation for the period after COVID-19 (3) Advancing MaaS ANA airport access website Advancing collaboration with transportation companies and the expansion of initiatives ◼ Collaboration between an ANA airport access website and JR Kyushu Internet trai
Slide 29: APPENDIX
APPENDIX 29
Slide 30: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet （\bil） 6 months ended FY20.3 September 30, YoY Major factors 2020 Total Assets 828.5 896.9 68.3 Cash and time deposits 23.8 42.9 19.1 Short-tem securities - 71.4 71.4 Increase in negotiable certificates of deposit Property, plant and equipment 517.
Slide 31: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (\bil) 6 months ended 6 months ended September 30, September 30, YoY Major Factors 2019 2020 Total 77.2 32.6 (44.5) 42.3% Commuter pass 16.8 13.0 (3.7) 77.7% Non-commuter pass 60.3 19.5 (40.8) 32.4% Shinkansen 28.1 9.0 (19.1) 32.
Slide 32: Trends in the Railway Business
Trends in the Railway Business Railway transportation revenues (Shinkansen), passenger Internet train reservation services: load factor on the Kyushu Shinkansen (Hakata－Kumamoto) (¥bil) (¥bil) （億円） （10,000 reservations） Number of reservations, sales （億円） 600 400 40 57 570 55% 新幹線 Shinkansen 乗車率（右軸）
Slide 33: Status of major damage caused by heavy rains in July 2020
Status of major damage caused by heavy rains in July 2020 ◼ Over the period from July 3 to 10, 17 train lines were damaged and operation was suspended on 20 routes. ◼ In regard to the Hisatsu Line, after the announcement of the river improvement policy, we plan to consider restoration methods, with
Slide 34: Railway Business — Outline of Fares/Charges and Measures to Increase Revenues
Railway Business — Outline of Fares/Charges and Measures to Increase Revenues ●Fares/charges (¥bil) （億円） Operating income in the railway business 鉄道事業における営業利益の推移 400 40 Charges →Compensation for the use of facilities other than transportation and 28.2 282 300 25.0 26.7 267 for the provision of addit
Slide 35: Disclosure of profitability by train line
Disclosure of profitability by train line ◼ We will disclose profitability for train lines that had an average of less than 2,000 passengers per day. ◼ We will share the difficult situation with regard to profitability with local governments and residents in areas around our railway lines. Aiming to
Slide 36: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Units/Rooms Notes (Uses, etc.) Miyazaki Spring 2019: Start of construction Miyazaki Station West November 20, 2020: Station building Entrance Development City, Lot area: Development of commercial opening *Joint devel
Slide 37: Overview of Miyazaki Station West Entrance Development and MaaS Initiatives
Overview of Miyazaki Station West Entrance Development and MaaS Initiatives Miyazaki Station West Entrance Development *Joint development with JR Miyako Twin JR Miyako Twin Building Miyazaki Kotsu Umikan Yamakan Building Umi-kan (commercial facility floor space: 9,800 ㎡) ◼ 1st to 6th floors: Commerc
Slide 38: Overview of Kumamoto Station Area Development
Overview of Kumamoto Station Area Development JR Kumamoto Station Building JR Kumamoto Station Building JR Kumamoto Kasuga April 23, 2021: Planned opening Total floor space: Approximately 109,000㎡ South Building Number of hotel rooms: 203 rooms (planned) December 2020: Planned start of 1st to 8th fl
Slide 39: Trends in the Real Estate and Hotel Businesses
Trends in the Real Estate and Hotel Businesses Station building tenant sales Hotel occupancy rates and average unit prices （¥bil） Occupancy Other main station (left) ADR（左軸） 稼働率（右軸） その他主要駅ビル JR博多シティ JR Hakata City （¥） Rates (right) 2,500 250 buildings 13,877 90% 203.0 2,030 202.6 2,026 14,000 13,103
Slide 40: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. The Company decided on these forward-looking statements based on the available information, as well as Company estimates and assumptions, at the time the
Kyushu Railway Company — H1 FY21.3 Earnings Presentation on 6ix