Kyushu Railway Company · TSE:9142
Kyushu Railway — H1 FY23.3 Earnings Presentation
44 slides from Kyushu Railway's earnings presentation, Nov 2, 2022
Slide 1: FY23.3 Semi-Annual Investors Meeting
FY23.3 Semi-Annual Investors Meeting November 2, 2022
Slide 2: Contents
Contents Ⅰ Financial Results for the First Six-Months of FY23.3 4 Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for 8 FY23.3 Ⅲ Status of Segments 14 Ⅳ Progress on the Three Key Strategies of the Medium-Term 21 Business Plan 2
Slide 3: Highlights
Highlights Financial The number of COVID-19 infections around Japan trended toward record levels, particularly in July and August. However, the impact on our business revenue was limited, results for the compared with previous surges in COVID-19. first six Due to a gradual recovery in demand sin
Slide 4: Financial Results for the First Six-Months of FY23.3
Ⅰ Financial Results for the First Six-Months of FY23.3 4
Slide 5: Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2022
Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2022 （\bil） 6 months ended 6 months ended YoY September, 30 2021 September, 30 2022 Operating revenue Operating revenue 141.6 170.1 28.5 120.2% Although COVID-19 continued to affect performance, revenue increased thanks t
Slide 6: Results for the First Six Months of FY23.3 (by segment)
Results for the First Six Months of FY23.3 (by segment) (Shown According to New Segments) （\bil） 6 months ended 6 months ended September, 30 September, 30 YoY Major factors 2021 2022 Operating revenue 141.6 170.1 28.5 120.2% Transportation 46.7 63.4 16.7 135.8% Railway Business (non-consolidated) 46
Slide 7: Results for the First Six Months of FY23.3 (non-consolidated)
Results for the First Six Months of FY23.3 (non-consolidated) (\bil) 6 months ended 6 months ended YoY Major factors September, 30 2021 September, 30 2022 Operating revenue 74.7 94.2 19.5 126.1% Railway transportation revenues 39.8 55.4 15.5 138.9% Increase due to moderate recovery in demand Shinkan
Slide 8: Full-Year Performance Forecasts and Dividend Forecasts for FY23.3
Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for FY23.3 8
Slide 9: Performance Forecasts for FY23.3: Current Conditions and Revenues Expectations
Performance Forecasts for FY23.3: Current Conditions and Revenues Expectations in Major Businesses We continue to anticipate a gradual recovery in mobility demand and personal consumption due to the combination of efforts to suppress infections and consumer activity. While performance in all bus
Slide 10: Consolidated Financial Forecast Highlights for FY23.3
Consolidated Financial Forecast Highlights for FY23.3 （\bil） Operating revenue Results Forecasts YoY Despite the impact of COVID-19 and a downturn in the FY22.3 FY23.3 sale of properties, we expect operating revenues to increase due to gradual demand recovery in each segment Operating revenue 329.5
Slide 11: Consolidated Financial Forecasts for FY23.3 (by segment)
Consolidated Financial Forecasts for FY23.3 (by segment) (Shown According to New Segments) (\bil) Results Forecasts YoY Major factors FY22.3 FY23.3 Operating revenue 329.5 381.4 51.8 115.7% Transportation 104.2 139.2 34.9 133.5% Increase due to moderate recovery in demand in railway business Railway
Slide 12: Non-consolidated Financial Forecasts for FY23.3
Non-consolidated Financial Forecasts for FY23.3 (\bil) Results Forecasts YoY Major factors FY22.3 FY23.3 Operating revenue 179.9 210.5 30.5 117.0% Railway transportation revenues 89.3 122.6 33.2 137.2% Increase due to moderate recovery in demand Shinkansen 27.4 43.8 16.3 159.5% Conventional Lines 61
Slide 13: FY23.3 dividend forecasts
FY23.3 dividend forecasts Shareholder return policy JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY25.3, we will aim for a consolidated dividend payout ratio of 35%, with a minimum dividend per share of ¥93.0. We will flexibly
Slide 14: Status of Segments
Il Status of Segments 14
Slide 15: Transportation Segment
Transportation Segment The pace of recovery slowed in Q2, due to a surge in the number of COVID-19 infections. At present, however, a decrease in the number of infections and the introduction of the nationwide travel support program is prompting a recovery mainly in revenues from medium-to-long-di
Slide 16: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (\bil) 6 months ended 6 months ended YoY Major factors September, 30 2021 September, 30 2022 Total 39.8 55.4 15.5 138.9% Commuter pass 14.2 14.8 0.6 104.2% Non-commuter pass 25.6 40.5 14.9 158.2% Cargo 0.0 0.0 0.0 186.1% Shinkans
Slide 17: Real Estate and Hotels Segment: Real estate leasing business
Real Estate and Hotels Segment: Real estate leasing business As in the railway business, the pace of recovery in station building tenant sales slowed in Q2 but are now trending toward recovery. In office buildings and rental apartments, performance was affected by such factors as the sale of pro
Slide 18: Real Estate and Hotels Segment: Real estate sales business
Real Estate and Hotels Segment: Real estate sales business Revenues rose year on year in Q2, due to the sale of an office building (Shinkawa East Building). However, income decreased as a result of lower sales of condominiums and other factors. (Full-year operating revenues are expected to be flat
Slide 19: Real Estate and Hotels Segment: Hotel business
Real Estate and Hotels Segment: Hotel business Conditions remained problematic in Q2, owing to an increase in COVID-19 infections, but as the result of thorough revenue management and other factors, the company posted ADR in the ¥13,000 level for the first time since Q3 of FY21.3, when the GoTo tr
Slide 20: Real Estate and Hotels Segment: Hotel business
Real Estate and Hotels Segment: Hotel business The total number of hotel rooms in Japan was up by around 880 rooms (approximately 36%) from FY19.3 due to the opening of a high-end brand, THE BLOSSOM series. Changes in total number of hotel rooms in Japan Future development plans Nagasaki Marriott
Slide 21: Progress on the Three Key Strategies of the Medium-Term Business Plan
Ⅳ Progress on the Three Key Strategies of the Medium-Term Business Plan 21
Slide 22: JR Kyushu Group Medium-Term Business Plan 2022-2024
JR Kyushu Group Medium-Term Business Plan 2022-2024 Three key strategies of the medium-term business plan 2030 Long-Term Vision Robustly promoting three key strategies during the stage for returning the We will contribute to the sustainable development of Company to a growth track Kyushu through cit
Slide 23: Key strategy 1: Reduce Costs in the Railway Business through BPR
Key strategy❶ Completing business structural reforms: Reduce Costs in the Railway Business through BPR* ＊Business Process Re-engineering We made further progress toward reducing fixed costs by ¥14.0 billion through BPR through fall 2022 timetable revisions and other moves. We expect to complete the
Slide 24: Key strategy 2: City-Building in the Western Kyushu Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Western Kyushu Area The Nishi-Kyushu Shinkansen opened on September 23, and events were held at each station. The new D&S train, TWO STARS 4047, started operations, and we worked alongside the local resi
Slide 25: Key strategy 2: City-Building in the Western Kyushu Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Western Kyushu Area We will seek to sustain and expand the effects of the Nishi-Kyushu Shinkansen opening through various initiatives to increase usage and enhance convenience. Initiatives aimed at incre
Slide 26: Key strategy 2: City-Building in the Fukuoka Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Fukuoka Area In the city of Fukuoka, where the amount and rate of population growth are the largest among ordinance-designated cities in Japan, in addition to real estate development we are promoting cit
Slide 27: Key strategy 2: Regional transportation initiatives
Key strategy❷ Creating a model for building cities that promote well-being: Regional transportation initiatives Since FY18.3, we have disclosed the necessary data to share the current situation with local governments and residents in the areas around our railway lines, and hold meetings with local g
Slide 28: Key strategy 2: Promoting MaaS
Key strategy❷ Creating a model for building cities that promote well-being: Promoting MaaS Strengthen collaboration among regional transportation operators, local governments, economic organizations, and other bodies to further promote MaaS. In addition, expand and enhance initiatives throughout Kyu
Slide 29: Key strategy 3: Course of action in business development
Key strategies ➌ Developing businesses in new areas in which we can contribute: Course of action in business development We will strengthen BtoB and BtoG businesses with an eye to expanding areas in which we can contribute and enhancing business sustainability. Course of action in business developme
Slide 30: Key strategy 3: Strengthening BtoB businesses
Key strategies ➌ Developing businesses in new areas in which we can contribute: Strengthening BtoB businesses Promote M&A with a view to expanding the BtoB business domain, which is less susceptible to the influence of population changes Conceptual image of expanding the BtoB business (construction
Slide 31: Key strategy 3: M&A implementation
Key strategies ➌ Developing businesses in new areas in which we can contribute: M&A implementation Acquired three companies this fiscal year, as a foothold for expanding the BtoB business area Construction Segment Business Services Segment JR Kyushu Engineering, Ltd. JR Kyushu System Solutions Inc.
Slide 32: APPENDIX
APPENDIX 32
Slide 33: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet （\bil） Results 6 months ended YoY Major factors FY22.3 September, 30 2022 Total Assets 951.9 938.8 (13.1) Cash and time deposits 39.7 31.6 (8.1) Securities 39.0 18.0 (21.0) Increase due to new production of rolling stock for Property, plant and equ
Slide 34: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels (¥bil) （億円） EBITDA EBITDAマージン EBITDA margin (¥bil) （億円） EBITDA EBITDAマージン EBITDA margin 40 400 35.6 60% 400 40 34.3 34.4 34.3 40% 33.1 32.0 31.8 29.5 30.5 30 300 30% 30 300 50% 200 20 20% 22.2 200 20 46.2% 45.6% 40% 100 10 18.7% 18.6% 18.9% 17.
Slide 35: 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) （10,000 reservations） Number of reservations, sales (¥bil) (¥bil) 新幹線 乗車率（右軸） 600 400 Shinkansen Passenger load factor (r
Slide 36: Trends in the Real Estate and Hotel Businesses
Trends in the Real Estate and Hotel Businesses Station building tenant sales Hotel occupancy rates and ADR （億円） （¥bil） Other main station 2,500 250 その他主要駅ビル buildings JR博多シティ JR Hakata City （¥） Occupancy (left) ADR（左軸） 稼働率（右軸） 203.0 202.6 16,000 Rates (right) 100% 195.8 2,000 200 184.6 13,103 13,877
Slide 37: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Units/Rooms Notes (Uses, etc.) March 2022: Opening under elevated railway tracks ・Multi-faceted development incorporating Nagasaki City, Nagasaki Station area Fall 2023: Opening of new commercial facilities, hotels,
Slide 38: Kyushu has one of the best economic bases in Japan
Kyushu has one of the best economic bases in Japan: Fukuoka is a rapidly growing city Kyushu is positioned as the "10% economy of Japan." (in terms of gross regional product, total population, total area, number of establishments, etc.) In particular, The Fukuoka Metropolitan Area is a city with
Slide 39: Railway Business—Outline of Fares/Charges and Measures to Increase Revenues
Railway Business—Outline of Fares/Charges and Measures to Increase Revenues Outline of Fares/Charges Trend of operating income in the railway business (¥bil) 400 40 28.2 26.7 ■ Breakdown of fares/charges 300 30 25.0 20.0 200 20 100 10 FY16.3 16.3期 FY21.3 FY22.3 22.3期 Charges → Compensation for the u
Slide 40: Railway Business Expenses
Railway Business Expenses Special tax measures In FY22.3, the impact of Shinkansen special measures (between Hakata to Shin-Yatsushiro) was approximately ¥3.4 billion. Special tax measures for the Kyushu Shinkansen (between Hakata and Shin-Yatsushiro) ended at the close of FY22.3. (¥bil) Expecte
Slide 41: Profitability by train line in FY22.3
Profitability by train line in FY22.3 (train lines averaging fewer than 2,000 passengers per day) Disclosing profitability for train lines averaging fewer than 2,000 passengers per day Of these, in regard to those lines on which the average number of passengers has declined by 70% or more in com
Slide 42: The BRT on the Hitahikosan Line
The BRT on the Hitahikosan Line In summer of 2023, BRT service is scheduled to commence on the Soeda–Yoake/Hita segment, which a disaster made impassible in July 2017. Through cooperation with local governments and related organizations, we plan to establish 37 BRT stations (12 train stations, p
Slide 43: Damage to the Hisatsu Line due to Heavy Rains in July 2020
Damage to the Hisatsu Line due to Heavy Rains in July 2020 We participated in the JR Hisatsu Line Review Conference held by the Ministry of Land, Infrastructure, Transport and Tourism and Kumamoto Prefecture concerning policy for restoring the Hisatsu Line. The policy on restoration is being discuss
Slide 44: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. These statements are judgments made by the Company based on information, projections, and assumptions available at the time of the materials’ creation. A
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