Ntt Inc · TSE:9432

Ntt — Investor Presentation (August 2019)

61 slides from Ntt's investor presentation, August 2019

  1. Slide 1: IR Presentation

    IR Presentation Ver. 1908-2 Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

  2. Slide 2: Translation notice and forward-looking statements

    This document is a translation of the Japanese original. The Japanese original is authoritative. The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, pro

  3. Slide 3: Contents

    Contents Overview of Consolidated Results for FY2019.1Q Other Businesses Status of Consolidated Results for FY2019.1Q 4 Promote B2B2X Model 32-33 Create New Lines of Business Contributing Factors by Segment for FY2019.1Q 5 34 ~Smart Energy Business~ FY2019 Forecast Summary 6 Create New Lines of Busi

  4. Slide 4: Overview of Consolidated Results for FY2019.1Q

    Overview of Consolidated Results for FY2019.1Q Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 3

  5. Slide 5: Status of Consolidated Results for FY2019.1Q

    Status of Consolidated Results for FY2019.1Q  Operating Revenues increased and Operating Income decreased  Operating Revenues reached record first-quarter levels Status of Consolidated Results  Operating Revenues: ¥2,915.4B < +¥62.7B [ +2.2%] year-on-year >  Operating Income: ¥505.2B < (¥32.0B)

  6. Slide 6: Contributing Factors by Segment for FY2019.1Q

    Contributing Factors by Segment for FY2019.1Q Operating Revenues <Year-on-year: +62.7> (Billions of yen) Mobile Regional Long distance and Data Other elimination of communications communications international communications business inter-segment business business communications business transaction

  7. Slide 7: FY2019 Forecast Summary

    FY2019 Forecast Summary  Operating Revenues and Operating Income will decrease  Profit and EPS will increase over the previous year Plan for Consolidated Revenues and Income FY2018 Result FY2019 Forecast Year-on-Year Operating ¥11,879.8B ¥11,830.0B (¥49.8B) Revenues Operating ¥1,693.8B ¥1,550.0B (

  8. Slide 8: FY2019 Forecast Summary by Segment

    FY2019 Forecast Summary by Segment Operating Revenues 【Year-on-year:(49.8)】 (Billions of yen) Regional Long distance and Data Other elimination of Mobile communications international communications business inter-segment communications business business communications business transactions business

  9. Slide 9: NTT Group Medium-Term Management Strategy

    NTT Group Medium-Term Management Strategy Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 8

  10. Slide 10: Our Vision

    Our Vision Towards a sustainable society/SDGs To resolve social issues through our business operation, NTT Group works together with our partners, as “Your Value Partner.” Partners Social Issue Resolution through business operation Digital Transformation × CSR NTT Group As a Public Utility and a Pri

  11. Slide 11: Medium-Term Targets

    Medium-Term Targets Financial Targets EPS Growth EPS Growth ＋50％ Target FY2023 ※1 （vs. FY2017） ＋50％ Overseas Sales / $25B/ FY2023 Overseas Operating 7％ Income Margin ※2 Approx. Cost Reductions At least ¥800B FY2023 640 yen (in fixed-line/mobile access networks) （vs. FY2017） 425 ※1 yen ROIC 8％ FY2023

  12. Slide 12: Transition of Medium-Term Targets

    Transition of Medium-Term Targets EPS Growth Cost Reductions （in fixed-line/mobile access networks） Approx. Profit expansion 640yen /share buybacks FY 2017 FY 2018 FY 2019 (E) FY 2023 Target 440yen 462yen *2 ▲220 425yen *1 billion yen ▲470 billion yen FY 2017 FY 2018 FY 2019 (E) FY 2023 Target Esta

  13. Slide 13: Global Business

    Global Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 12

  14. Slide 14: Global Business Overview

    Global Business Overview Overseas Sales/Overseas Operating Income Margin* Revenue $25B Operating profit Margin $20B 7.0％ $18.4B $18.9B 3.5％ Operating Profit 3.1％ 3.2％ $1.75B** $0.56B $0.60B $0.70B FY 2017 FY 2018 FY 2019 (E) FY 2023 Target * Including results from the global holding company, its sub

  15. Slide 15: Enhance Competitiveness in Global Business ①

    Enhance Competitiveness in Global Business ① Aug. 2018 Nov. 2018 July. 2019 NTT NTT NTT Global Holding Company （New） Global Holding Company (Company name：NTT, Inc.) (Company name：NTT, Inc.) NTT Communications NTT Communications Global OpCo (NTT Ltd.) （New） Dimension Data Dimension Data ※1 Data Cente

  16. Slide 16: Enhance Competitiveness in Global Business ②

    Enhance Competitiveness in Global Business② ”One NTT” Global Growth Strategy Deliver High Value Solutions Create New Innovative Solutions Business Modernization Disruptive Innovation Industry Advisory Expertise Drives Global Innovation Fund Outcome-Based Solutions Invest in the Next Innovative Finan

  17. Slide 17: Enhance Competitiveness in Global Business ③

    Enhance Competitiveness in Global Business③ Enhance Competitiveness in Global Business  Integrated the overseas businesses of NTT Communications, Dimension Data and NTT Security under the NTT branded company NTT Ltd. and launched operations on July 1, 2019  Reached mutual agreement on the acquisit

  18. Slide 18: Smart City Project (Las Vegas City)

    Smart City Project (Las Vegas City) Pain Point of the City: To reduce “Response Time” Requirements: ① Reactive actions: Notify “What is going on？” ② Proactive actions: Notify “What is going to happen next？” ③ Flexible ICT : Deploy ICT resources ASAP NW bandwidth Actions by Officers City Sensor setti

  19. Slide 19: Mobile Communication Business

    Mobile Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 18

  20. Slide 20: NTT DOCOMO FY2019 Key Actions

    NTT DOCOMO FY2019 Key Actions Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 19

  21. Slide 21: NTT DOCOMO New Rate Plans

    NTT DOCOMO New Rate Plans Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 20

  22. Slide 22: NTT DOCOMO Comparison with Existing Rates

    NTT DOCOMO Comparison with Existing Rates Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 21

  23. Slide 23: NTT DOCOMO New Rate Plans

    NTT DOCOMO New Rate Plans Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 22

  24. Slide 24: NTT DOCOMO “d POINT CLUB” Members

    NTT DOCOMO “d POINT CLUB” Members （Million Subs） 80.00 70.00 60.00 50.00 40.00 70.15 71.31 67.63 68.83 65.60 66.52 62.32 63.24 64.32 30.00 59.26 60.01 61.35 58.50 20.00 10.00 0.00 FY2016 FY2016 FY2016 FY2016 FY2017 FY2017 FY2017 FY2017 FY2018 FY2018 FY2018 FY2018 FY2019 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

  25. Slide 25: NTT DOCOMO Actions for 5G

    NTT DOCOMO Actions for 5G Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 24

  26. Slide 26: NTT DOCOMO Actions for 5G

    NTT DOCOMO Actions for 5G Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 25

  27. Slide 27: NTT DOCOMO Cost Efficiency Improvement

    NTT DOCOMO Cost Efficiency Improvement ◆ The numbers above are the amount of cost reduction compared to FY2018. Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 26

  28. Slide 28: Fixed-line Communication Business

    Fixed-line Communication Business Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 27

  29. Slide 29: Revitalization of Regional Economies (NTT EAST)

    Revitalization of Regional Economies (NTT EAST) Develop “Food/Agriculture x ICT” Business ■Implement IoT in Agriculture Support the DX of Small and Medium ‐ “Agri-Innoviation Lab @ Yamanashi” collaborative project with the region (“Advanced IoT Project,” sponsored by the Ministry of Economy, Trade a

  30. Slide 30: Revitalization of Regional Economies (NTT WEST)

    Revitalization of Regional Economies (NTT WEST) Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 29

  31. Slide 31: Migrate PSTN to IP Networks

    Migrate PSTN to IP Networks Simplify services and networks with IP networks  Nation-wide call rates to fixed-line telephones will be 8.5 yen per every 3 minutes (from January 2024)  Migrate tandem/signal transfer switches to IP, and connect to other carriers through IP (scheduled completion by Jan

  32. Slide 32: Other Businesses

    Other Businesses Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 31

  33. Slide 33: Promote B2B2X Model

    Promote B2B2X Model  Number of B2B2X Projects: 39 (as of end of FY2018), to expand to 100 (by FY2021)  Set B2B2X Sales Target: ¥600.0 billion (for FY2023) Sales / Number of Projects Target ¥ 600.0 billion Create new B2B2X project 440円 ¥ 60 billion FY 2018 FY 2021 FY 2023 target Number of Projects

  34. Slide 34: Promote B2B2X Model

    Promote B2B2X Model Promote B2B2X Model  Entered into an industry-government cooperation agreement with Hokkaido University and the city of Iwamizawa* with the goal of creating a smart agri-city (June 28, 2019)  Entered into a comprehensive cooperation agreement with Chiba City for future communit

  35. Slide 35: Create New Lines of Business ~Smart Energy Business~

    Create New Lines of Business ~Smart Energy Business~ Promotion of Smart Energy Business FY2025 (Target)  Acquisition of ENNET Corporation (May 10, 2019)  In order to establish and launch a smart energy business, will establish “NTT Anode Energy” (June 3, 2019)  Reorganized ENNET and NTT Smile Ene

  36. Slide 36: Create New Lines of Business ~Medical Science Business~

    Create New Lines of Business ~Medical Science Business~ Healthcare Management Support through Big Data  Leverage NTT Group’s data analysis and security technology to establish a healthcare recommendation business that contributes to health promotion  Jointly opened the Project Division of Genomic

  37. Slide 37: Create New Lines of Business ~Smart Infra Business~

    Create New Lines of Business ~Smart Infra Business~ Promotion of the Smart Infra Business  Promoted the Smart Infra business, which leverages group technology, know-how and assets to solve social infrastructure issues such, as infrastructure equipment and facilities • Develop a platform to digitali

  38. Slide 38: Other Medium-Term Management Strategy Initiatives

    Other Medium-Term Management Strategy Initiatives Drive Self-Digital Transformation in Domestic Business  Advanced the automation of support for telephone inquiries about problems regarding glitches (6.5 million calls annually) with the Web and chatbots Adopted at NTT DOCOMO, NTT East and NTT Commu

  39. Slide 39: Other Medium-Term Management Strategy Initiatives

    Other Medium-Term Management Strategy Initiatives Roll Out 5th-Generation Wireless System  Reached an agreement with JTOWER on a capital and business partnership with the aim of increasing efficiency in the early expansion of 5G service areas and reducing the number of communications (radio) quiet

  40. Slide 40: Shareholder Returns/ ESG

    Shareholder Returns/ ESG Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 39

  41. Slide 41: Shareholder Returns

    Shareholder Returns Dividend Policy • Basic policy is steady dividend increases Share Buybacks • Carry out buybacks flexibly to improve capital efficiency Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 40

  42. Slide 42: Shareholders Returns

    Shareholders Returns Dividends  Aggregate annual dividends for FY2019 expected to increase to ¥190 per share (an increase of ¥10 from FY2018) Share Buybacks  Resolved to buy back shares to be acquired from the Japanese government  Details of Share Buybacks ・Aggregate Amount: Up to ¥300.0 billion

  43. Slide 43: Changes in Dividend

    Changes in Dividend 190 (Yen) 200 180 85% 150 65% Payout Ratio 100 45% 40.9% 41.1% 38.2% 37.2% 38.0% 50 32.3% 33.4% 32.9% 31.2% 31.4% 30.7% 25 25% 27.5% 23.0% 19.5% 17.1% 12.3% 13.0% 0 5% • Dividend is adjusted according to the two-for-one stock split effective on July 1, 2015. • FY2003-FY2017, fina

  44. Slide 44: Record of Share Buybacks

    Record of Share Buybacks Approx. 4 Trillion Yen in Buybacks From From From From From From From From From From Market/ Market/Gov’t From Gov’t Market/ Market/ Gov’t Market Gov’t Market Market / Gov’t Market Gov’t Market Gov’t (Billions of yen) 600 539.4 500 Up to 406.5 *4 300.0 *6 400 381.7 374.1 366

  45. Slide 45: Changes of EPS and Outstanding Shares

    Changes of EPS and Outstanding Shares （Yen） (mio shares) 3,000 EPS(right axis) 500 462 2,646 2,500 EPS Growth 400 (Average Annual Growth Rate +10%) Cumulative total of shares decrease by around ▲30% (▲4% Average Decrease Annually) 2,000 300 1,852 193 1,500 200 1,000 100 2010 2011 2012 2013 2014 2015

  46. Slide 46: Promote ESG Management

    Promote ESG Management Environment Social Governance  Reduce environmental  Promote diversity  Enhance structure on impact  Protect personal the basis of the intent  Leverage ICT to information of Japan’s Corporate contribute to the  Support customers in Governance Code environment reinforcing

  47. Slide 47: Strengthen Corporate Governance

    Strengthen Corporate Governance Improve the Presence of Outside and Female Members of the Board  From the perspective of strengthening the supervisory function of the Board of Directors and improving corporate governance, and at the same time promoting diversity, we have increased the number of out

  48. Slide 48: Financial Data, etc.

    Financial Data, etc. Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 47

  49. Slide 49: NTT Group Overview

    NTT Group Overview • Operating revenues (consolidated) ：¥11,879.8 billion *1 Voting rights to major subsidiaries (As of March 31, 2019) • Operating income ：¥1,693.8 billion *2 NTT, Inc.(global holding company), was established with the goal of *2 enhancing NTT Group's overall competitiveness and pro

  50. Slide 50: Trend in Consolidated Financial Results

    Trend in Consolidated Financial Results 11.9 11.8 11.8 11.8 ■ Operating 11.5 11.4 Revenues 11.1 （Trillion yen） 10.9 10.7 ■ Operating 1.64 1.64 1.69 1.54 1.55 1.35 Income 1.20 1.21 1.08 （Trillion yen） 0.91 0.90 0.74 0.80 0.85 0.86 0.52 0.59 0.52 ■ Net Income （Trillion yen） 456 462 450 440 391 350 255

  51. Slide 51: Changes in Consolidated Operating Revenues

    Changes in Consolidated Operating Revenues ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business （Billion yen） 15,000 11,799.6 11,782.1 11,879.8 118,300 11,541.0 11,391.0 10,700.7 10,92

  52. Slide 52: Changes in Consolidated Operating Income

    Changes in Consolidated Operating Income ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,693.8 1,642.8 1,641.1 1,539.8 1,550.0 1,500 1,348.1 1,202.0 1,213.7

  53. Slide 53: Changes in CAPEX

    Changes in CAPEX ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business （Billion yen） ：Regional communications business 2,000 1,970.0 1,892.8 1,817.5 1,750.0 1,687.2 1,700.0 1,674.8 1,697.9 1,697.0 753.7 703.1 661.8 570.

  54. Slide 54: Changes in Interest-bearing Debt

    Changes in Interest-bearing Debt Debt/Equity ratio* （Billion yen） 6000.0 60.0% 50.8% 49.0% 49.3% 47.1% 45.2% 43.9% 46.0% 40.6% 4000.0 40.0% 4200.0 4406.7 4262.7 4300.0 2000.0 4036.0 4163.3 4088.2 3971.6 20.0% 3854.8 0.0 0.0% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2017 FY2018 FY2019E [IFRS] [IFR

  55. Slide 55: Changes in Number of Employees

    Changes in Number of Employees ：Mobile communications business ：Data communications business ：Long distance and international ：Other business communications business ：Regional communications business 287,500 300,000 273,650 280,000 (311,900) 268,450 (303,350) (282,550) 27,700 (274,850) 26,600 27,450

  56. Slide 56: Number of Employees

    Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2019） 4,000 Number of Employees 2,000 0 20 30 40 50 60 65 Age * Figures for East Outsourcing Companies include employees from the consolidated regional outsourcing companies (NTT EAST-MINAMIKANTO and oth

  57. Slide 57: Changes in Personnel expenses

    Changes in Personnel expenses (NTT East Group, NTT West Group) （Billion yen） 1000 500 991.8 938.5 885.7 827.6 785.1 (43,850) 738.1 709.4 684.0 (28,100) (27,450) (26,750) (122,500) (111,300) (117,100) 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019E * The scope of aggregation for each of th

  58. Slide 58: Broadband Access Services in Japan

    Broadband Access Services in Japan Mobile Fixed Mobile Approx. FTTH 177.73M subs Approx. 150M 30M 32.0M subs SoftBank SoftBank market share Approx. 25％ 100M KDDI 20M NTT EAST and KDDI market share Approx. 31％ NTT WEST Approx. 21.0M subs 50M NTT DOCOMO 10M Approx. CATV Approx. DSL Approx. 6.9M subs 7

  59. Slide 59: Fixed Broadband Business FTTH Subscriptions

    Fixed Broadband Business FTTH Subscriptions * FTTH Subscriptions (Sum of NTT East and NTT West） Reference: FY2019 Breakdown of FTTH Subscriptions (millions subs) 2,168 (millions subs) 2,108 2,005 2,053 FY2019E 1,926 Hikari Total FTTH Service: +0.60 Change from preceding Fiscal Year Collaboration 4.6

  60. Slide 60: Share Buybacks and Cancellation

    Share Buybacks and Cancellation ＜＞：share holding ratio Buyback Buyback from Buyback from from Cancellation Gov’t and Cancellation Gov’t and Cancellation market Market Market Treasury Stocks Treasury Stocks Excess Holdings 124mil. shares ＜14.1％＞ ＜0.0％＞ Excess Holdings 59mil. shares 199mil. 276mil. sh

  61. Slide 61: Your Value Partner

    Your Value Partner Copyright 2019 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Nippon Telegraph and Telephone Corporation (NTT) — Investor Presentation (August 2019) on 6ix