Kyushu Railway Company · TSE:9142
Kyushu Railway — FY2019 Earnings Presentation
40 slides from Kyushu Railway's earnings presentation, May 12, 2020
Slide 1: FY20.3 Annual Investors Meeting
FY20.3 Annual Investors Meeting May 12, 2020 Kyushu Railway Company
Slide 2: Contents
Contents Highlights 3 Ⅰ Financial results for FY20.3 4 Ⅱ Forecasts for FY21.3 11 Ⅲ Short-term strategies 15 Ⅳ Status of Medium-Term Business Plan Initiatives 18 APPENDIX 28 2
Slide 3: Highlights
Highlights Results Consolidated operating revenue, operating income, ordinary income, and net for FY20.3 income all declined. Due to the influence of the spread of the COVID 19 infection, future revenue trends Forecasts are very unclear, and accordingly our results forecast and annual dividends
Slide 4: Financial results for FY20.3
Ⅰ. Financial results for FY20.3 4
Slide 5: Consolidated Financial Highlights for FY20.3
Consolidated Financial Highlights for FY20.3 Financial Results Overview （\bil） Operating revenue FY19.3 FY20.3 YoY Through the third quarter, results were solid, centered on the railway business and the real estate leasing business. However, Operating revenue 440.3 432.6 (7.7) 98.2% from February 20
Slide 6: Major Consequences Related to COVID-19 (Railway Business)
Major Consequences Related to COVID 19 ①(Railway Business) Due immigration and movement restrictions and people staying inside, railway transportation revenues declined substantially. In particular, the influence on middle and long distance revenues has been significant, and JR Kyushu Rail Pass
Slide 7: Major Consequences Related to COVID-19 (Other than railway)
Major Consequences Related to COVID 19 ②(Other than railway) Due to the decline in railway passengers, the number of visitors to facilities around stations has declined substantially, and station building tenant sales have decreased In particular, at an early stage, the hotel business was affect
Slide 8: Segment Information Summary
Segment Information 【Summary】 （\bil） FY19.3 FY20.3 YoY Major factors Operating revenue 440.3 432.6 (7.7) 98.2% Transportation 181.8 173.7 (8.1) 95.5% Increase in revenues from railway transportation, increase due to change in Railway Business (non-consolidated) 172.2 165.2 (7.0) 95.9% revenue/expens
Slide 9: Non-consolidated Income Statements
Non-consolidated Income Statements (\bil) FY19.3 FY20.3 YoY Major Factors Operating revenue 221.9 214.8 (7.0) 96.8% Railway transportation Influence of the spread of the COVID 19 infection, etc. revenues 151.4 147.3 (4.1) 97.3% Other revenue 70.4 67.5 (2.9) 95.8% Operating expense 176.1 180.4 4.3 10
Slide 10: Consolidated and Non-Consolidated Quarterly Results
FY20.3 — Consolidated and Non-Consolidated Quarterly Results Consolidated results (\bil） FY20.3 1Q 2Q 3Q 4Q Total Operating revenue 100.4 112.3 106.8 112.9 432.6 Operating income 15.4 14.7 15.6 3.5 49.4 Ordinary income 16.0 14.9 15.9 3.6 50.6 Net income 12.3 10.6 12.3 (3.8) 31.4 attributable to Non-
Slide 11: Forecasts for FY21.3
Ⅱ. Forecasts for FY21.3 11
Slide 12: Most Recent Business Conditions (Railway Business)
Most Recent Business Conditions (Railway Business) Due to the growing consequences of people staying inside due to the state of emergency declaration, request for suspension of business operations, etc., the scale of the decline in transportation-related revenues is expanding. In addition to mea
Slide 13: Most Recent Business Conditions (Other than railway)
Most Recent Business Conditions (Other than railway) The influence extended to the entire Group, centered on the railway and hotel businesses but also including station buildings, retail stores, restaurants. There is concern that if the influence lengthens, there will be a further increase in th
Slide 14: Forecasts for FY21.3
Forecasts for FY21.3 Due to the influence of people staying at home accompanying the spread of the COVID 19 infection, mobility demand from domestic and overseas customers is declining rapidly. Also, to prevent the spread of the infection to customers or employees, we are suspending operation of c
Slide 15: Short-term strategies
Ⅲ. Short-term strategies 15
Slide 16: Short-term strategies
Short-term strategies ① Cash flow is declining substantially, centered on the decline in railway passenger revenues. Accordingly, we will advance measures with the highest priority on securing liquidity at hand. ② In preparation for further worsening of cash flow, we will consider and implement dive
Slide 17: Financial Strategies: Review and Looking Ahead
Financial Strategies: Review and Looking Ahead Initiatives in FY2020/3 ① We decided to advance consideration of our financial strategies and to reevaluate our shareholder return policy (November 2019). Due to historical factors, our balance sheet has excess capital, and we recognize that this is a
Slide 18: Status of Medium-Term Business Plan Initiatives
Ⅳ. Status of Medium-Term Business Plan Initiatives 18
Slide 19: 2030 Long-Term Vision
2030 Long-Term Vision 2030 Long-Term Vision We will contribute to the sustainable development of Kyushu through city-building initiatives that leverage the distinctive characteristics of local communities, centered on safe and secure mobility services. • As a corporate group providing mobility servi
Slide 20: Position and Priority Initiatives of the Medium-Term Business Plan 2019-2021
Position and Priority Initiatives of the JR Kyushu Group Medium-Term Business Plan 2019‒2021 20
Slide 21: Building Sustainable Railway Services by Improving Revenues and Expenditures
Building Sustainable Railway Services by Improving Revenues and Expenditures We will further strengthen our efforts to increase our earning power in short-distance, inbound, and Shinkansen operations. In this way, we will continue to implement measures to maximize a favorable operating cycle under
Slide 22: Implementing Strategic City-Building Initiatives in the Regions Around our Business Areas
Implementing Strategic City-Building Initiatives in the Regions Around our Business Areas Implementing initiatives to increase the population in the areas around our railway lines by implementing strategic city-building initiatives in the regions around our bases Kumamoto Station Area Development Mi
Slide 23: Reevaluating Our Business Portfolio
Reevaluating Our Business Portfolio To achieve strategic business portfolio formation and appropriate management resource allocation, we have implemented acquisition, reorganization, and sales initiatives, as described below. Moving forward, we will continue to implement initiatives while focusing o
Slide 24: Take on the challenge of new mobility services (MaaS)
Take on the challenge of new mobility services (MaaS) Initiatives with Other Regional Transportation Companies in FY2020/3 Planning to implement business alliances with a focus on rolling out seamless mobility services and start verification testing Concluded a business alliance agreement with Nis
Slide 25: Regional Transportation Initiatives
Regional Transportation Initiatives Status of progress toward restoration of Hitahikosan Line Kokura Held five restoration meetings between April 2018 and April 2020 Hakata Hitahikosan Line In regard to maintaining the transportation network, we presented a restoration plan involving railways, B
Slide 26: Duties that the JR Kyushu Group Must Fulfill Now
Duties that the JR Kyushu Group Must Fulfill Now We will work together with stakeholders to overcome COVID 19 and fulfill our social duty as a mobility services company in Kyushu. ・Maintaining transportation network as social infrastructure Society ・Suspending operation of all conventional line limi
Slide 27: Purpose of the JR Kyushu Group: Regional Invigoration
Purpose of the JR Kyushu Group: “Regional Invigoration” For details, please refer to the following site: https://www.jrkyushu.co.jp/train/sonohimade/ 27
Slide 28: APPENDIX
APPENDIX 28
Slide 29: Consolidated Income Statements
Consolidated Income Statements （\bil） FY19.3 FY20.3 YoY Major factors Operating revenue 440.3 432.6 (7.7) 98.2% Decline in railway transportation revenue, etc. Elimination of special tax measures (JR Kyushu) Operating expense 376.4 383.2 6.7 101.8% Increase in depreciation cost (JR Kyushu), etc. Ope
Slide 30: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet （\bil） FY19.3 FY20.3 YoY Major factors Total Assets 801.4 828.5 27.1 Cash and time deposits 16.9 23.8 6.8 Short-tem securities 19.9 - (19.9) Property, plant and equipment 461.3 517.9 56.6 Railway business assets 72.4 89.1 16.6 Interest-bearing debt
Slide 31: Railway business
Railway business Railway Transportation Revenues (\bil) FY19.3 FY20.3 YoY Major Factors Total 151.4 147.3 (4.1) 97.3% Commuter pass 32.4 32.5 0.1 100.4% Non-commuter pass 119.0 114.7 (4.2) 96.4% Shinkansen 54.9 52.3 (2.6) 95.2% ・Basic trend (approx. 101% ) Commuter pass 2.7 2.8 0.0 102.9% ・Increase
Slide 32: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels (¥bil) （億円） EBITDA 34.3 (¥bil) （億円） 343 344 34.4 34.3 343 20% EBITDA 350 35 EBITDAマージン EBITDA margin 400 40 EBITDAマージン EBITDA margin 35.6 356 50% 28.5 285 29.5 295 32.0 320 331 33.1 28.4 31.1 311 30.5 305 270 27.0 284 280 28 18.9% 18% 18.7% 18.
Slide 33: Initiatives in the Railway Business: Strengthening Earning Power
Initiatives in the Railway Business —Strengthening Earning Power 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
Slide 34: Revenues, Occupancy Rates, Etc., in the Real Estate and Hotel Businesses
Revenues, Occupancy Rates, Etc., 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
Slide 35: Categories of Growth Investment
Categories of Growth Investment Investment category Characteristics Major investments ・Development centered on commercial facilities, using sites owned by the ・JR Hakata City (Commercial facilities, etc.) Station building ① Company ・JR Oita City (Commercial facilities, etc.) Within Kyushu developmen
Slide 36: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot area Name Location Schedule Units Notes (Uses, etc.) Rooms Scheduled for commencing Miyazaki Station West Miyazaki Lot area: Development of commercial construction in spring 2019 Entrance Development City Approx. 7,300㎡ areas, office buildings,
Slide 37: JR Kyushu's Capital Structure
JR Kyushu’s Capital Structure Capital calculated as difference between assets and liabilities at time of privatization of Japanese National Railways in 1987 JR Kyushu established with excessive levels of capital (additional paid-in capital) due to low levels of liabilities Note: The three JR com
Slide 38: Changes in Cost Structure
Changes in Cost Structure Elimination of Special Tax Measures Elimination of special tax measures (special tax breaks implemented following the privatization of Japanese National Railways and provisions extending the period of these breaks) effective March 31, 2019 (period extending provisions eli
Slide 39: 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 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 — FY2019 Earnings Presentation on 6ix