ＩＲ Presentation November, 2014

Transcription

1 November, 2014

2 1 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, projections, estimates, judgments and beliefs of the management of NTT in light of information currently available to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission. * E in this material represents that the figure is a plan or projection for operation.

3 Medium-term Financial Targets

4 Medium-term Financial Targets (Announced on November 8, 2012) The Path to Profit Recovery and Growth Global Cloud Services as the cornerstone of NTT s business operations Comprehensively strengthen network service competitiveness Further Improvement of Facility Efficiency Establishment of Simple and Highly Efficient Business Operations Tailored to Future Market Changes Cash Control and its Effective Utilization Streamlining capital investment Increasing M&A with a focus on Cloud-related businesses Enhancing shareholder returns in the medium term By the fiscal year ending March 31, 2017: Overseas sales: $20 billion Proportion of corporate sales represented by overseas sales: 50% or more By the fiscal year ending March 31, 2015: At least 400 billion yen in cost reductions in fixed-line/mobile access networks (compared with the fiscal year ended March 31, 2012) Revised to 600 billion yen in cost reductions By the fiscal year ending March 31, 2016: Capex to Sales: 15% EPS growth of 60% or more by the fiscal year ending March 31, 2016 (compared with the fiscal year ended March 31, 2012) 3

5 Progress of the Medium-term Financial Targets 12.0 Billion USD 31.8% Overseas Sales 12.2 Billion USD 36.6% Percentage of sales to overseas corporations 15.0 Billion USD 43.1% Cost reductions in fixed-line/mobile access networks Fiscal year ended/ing March * 410* Billions of yen 2013/3 2014/3 2015/3 E Fiscal year ended/ing March /3 2014/3 2015/3 E * Compared to fiscal year ended 2012/3 600* Capital Investment Capex to Sales Billions of yen Fiscal year 2013/3 2014/3 2015/3 E ended/ing March 31 * Amounts does not include sales and investments related to real estate and solar power generation operations EPS Yen/Share Fiscal year ended/ing March /3 2014/3 2015/3 E * Compared to fiscal year ended 2012/3 (Note) Fiscal year ended 2014/3 EPS is 477 yen(30% increase) when excluding the effect of non-operating income relating to the Otemachi 2-chome area redevelopment project. 4

6 Shareholder Returns Dividend Dividends per share yen Increased by More Than 3 Times Fiscal year ended/ing March /3 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3E Share Buy Backs (Billions of yen) Fiscal year ended/ing March 31 From Market/ Gov t 2004/ / More Than 2 Trillion Yen in Buy Backs From Gov t 2006/3 2007/3 1:Market 61 billion yen, Gov t 39 billion yen From Market /3 2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 5 From Gov t From Market From Market/ Gov t max Raised the max amount in /6E 2:Market billion yen, Gov t billion yen

7 Global Cloud Services

8 Global Cloud Business Promotion System Cloud Services Corporate Customers Advisory Services Migration Services Operation Services Management Services Applications Solutions Managed ICT Data Centers Networks R&D 7

9 Our Strengths in Global Cloud Services (Traffic volume (Source: Renesys Corporation)) (Total floor space: Approx. 1 million (as of the end of March 2014)) 8

10 Our Strengths in Global Cloud Services (Source: Renesys Corporation) (Source: TeleGeography) 9

11 Expansion of Cross-Selling (Contract Value) 10

12 Cross Selling Track Record 11

13 IT Spending 1 Forecast 12

14 Network Services

15 NTT DOCOMO s New Billing Plan Packet Sharing Flat rate for calls Discount for long-term users Up 1.5-fold 2014/3.1H 2015/3.1H At service launce: 2.08 mil Jul. 5, 2014: Over 5 mil Oct. 14, 2014: Over 10 mil 14

16 Upselling strategies and recovering profits Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 15

17 docomo Hikari Pack Concept 16

18 Hikari Collaboration Model 17

19 Creation of Value through Collaboration 18

20 Current status and goal of Collaboration Model 19

21 Towards the Next Stage 2.0 At the announcement of 2015/3 results, NTT will upgrade its strategy to Towards the Next Stage

22

23 Broadband Access Services in Japan Mobile Fixed Mobile 145.6M subs Approx. FTTH 25.8M subs Approx. Access speed NTT DOCOMO Approx. 63.6M subs NTT market share Approx. 44 Access speed NTTEAST and NTT WEST Approx. 18.3M subs DSL 4.2M subs NTT EAST and NTT WEST Approx.1.4M subs NTT market share Approx. 33 NTT market share Approx. 71 Approx. CATV 6.0M subs Approx. NoteAccess speeds shown are numbers used for commercial purposes, and are the maximum output speeds achievable within the framework of the respective best effort services. Source MIC data (As of the end of June 2014) 22

24 Mobile Broadband Business DOCOMO Smartphone Users Xi LTE Subscriptions Increased by approx.10 million From 2014/3.2Q 2014/3 2Q 3Q 4Q 2015/3 1Q 2015/3 2Q 2014/3 2Q 3Q 4Q 2015/3 1Q 2Q 23

25 Aggregate ARPU of Mobile Broadband Business (Exclusive of Monthly Support Impact) 24

26 Basic Monthly Charges Comprehensive Plan Data Plan (voice call not included) Packet Pack Monthly Charges Billing Plan Monthly Fee (Yen) Type Xi Plan Ninen 743 Voice Call Fee 20Yen/30sec Android Xi Pake-hodai Light 3GB 4,700 Tablets, etc Xi Data Plan Light Ninen 3GB 4,700 Android Xi Pake-hodai Flat 7GB 5,700 Comprehensive Plan (Yen) Xi Pake-hodai Double 7GB 2,000 6,200 iphone Xi Pake-hodai for iphone 7GB 5,200 Basic Monthly Charges Data Plan (voice call not included) Billing Plan Kake-hodai Plan (Smartphone/Tablet) Kake-hodai Plan (Feature Phone) Data Plan (Smartphone/Tablet) Data Plan (Router) Monthly Fee (Yen) Voice Call Fee 2,700 Flat Rate 2,200 Flat Rate 1,700 1,200 Packet Pack Monthly Charges (Yen) (Yen) Additional Fee Data S pack 2GB 3,500 per 1GB For single Data M pack 5GB 5,000 1,000 subscriptions For Families Data L pack 8GB 6,700 Share pack 10 10GB 9,500 Share pack 15 15GB 12,500 Share pack 20 20GB 16,000 Tablets, etc Xi Data Plan Flat Ninen 7GB 5,700 Share pack 30 30GB 22,500 Others Plus Xi-wari (Packet discount for 2nd device) 3GB *Discount of -2,861yen for 25 months (max) w hen 1st device is smartphone From 26th month, or w hen 1st device is feature phone, discount amount is -1,909 yen 2,861 (Yen) Others Share Option Zutto Docomo Discount (Discount rate determined by subscription length) U25 Ouen Discount (Discount for subscribers to age 251GB bonus packet) (Yen) *When choosing data S pack and subscription length is more than 15 years 25

27 Fixed Broadband Business FTTH Subscriptions FTTH Subscriptions (Sum of NTT East and NTT West FTTH Churn Rate (Sum of NTT EAST and NTT WEST thousands subs) Fiscal year ended/ing March 31 26

28 Fixed Broadband Business ARPU ARPU Basic Rate Additional Services Yen <Hikari Denwa> Percentage of FTTH users Million channels 500 yen/month <FLET S TV> 660 yen/month <Remote Support> Fiscal year ended/ing March yen/month 27

29 Penetration of Video Services Million subscriptions Hikari TVFLET S TV Multi-Device Tuner (STB) TV TV with Built-in tuner Hikari TV Smartphones, tablet PCs Car Navigation Multi-Service Hikari TV FLET S TV IPTV service which distributes VOD, terrestrial digital broadcasting, BS digital broadcasting, and multi-channel broadcasting Service which distributes terrestrial digital broadcasting, BS digital broadcasting, and multi-channel broadcasting(optional), by Radio Frequency system video karaoke game TV music book application shopping End of Year/month 28

30 Expansion of Wi-Fi Solution Business Enterprises and local government provide information service through Wi-Fi, together with free Internet access NTT Group (NTT-BP) builds the Wi-Fi network and provides the platform for Information service Users Area Owners NTT Airports Railway Stations server Internet access free of charge Information service charged Office buildings Tourist spots, Art galleries, City halls, etc. Information service platform including cloud Wi-Fi network Started provision of Japan Connected-free Wi-Fi, which inter-connects the Wi-Fi services provided by enterprises and local governments 29

31 NTT Group Overview Operating revenues (consolidated) :10,925.2 billion yen Operating income (consolidated) :1,213.7 billion yen No. of employees : 239,750 No. of subsidiary companies : 946 * Percentage figures show the percentage of voting rights (March 31, 2014) Regional communications business Long distance and international communications business Mobile communications business Data communications business Other group companies Other businesses real estate, finance, construction and power business Operating Revenue: 3,572.3 billion yen Operating Income: billion yen 1,809.9 billion yen billion yen 4,461.2 billion yen billion yen 1,343.9 billion yen 67.9 billion yen No. of Employees: No. of Subsidiaries: 75, , , , (Note) Fiscal year ended March Operating revenue and operating income of each segment include inter-segment transactions. 1,328.5 billion yen 56.1 billion yen 25,

32 2015/3. 2Q Consolidated Financial Results Operating Revenues increased for the fifth consecutive year due to the growth of overseas businesses. Operating Income decreased due to a larger decrease in profit of the Mobile communications segment despite an increase in profit of the Regional communications segment and the Data communications segment. (Billions of yen) Operating Revenues Operating Expenses Operating Income FY2014/2Q 2015/3 2Q FY2013/2Q 2014/3 2Q Change year-on-year 5, % 5, , % 4, (62.1) % Year-on-Year Increase (Decrease) (9.5)% Net Income* (33.2) (10.3)% * Net income represents net income attributable to NTT, excluding noncontrolling interests. 31

33 2015/3.2Q Contributing Factors by Segment Regional communications business: Operating Income increased as a result of continued efforts to improve operational efficiency, despite the increased impact of FLET S Hikari discounts. Long distance and international communication business: Although Operating Income decreased year-on-year, profit improvement in overseas businesses contributed to an increase in profit for the six-month period ended September 30. Mobile communications business: Operating Income decreased due to the increased impact of Monthly Support discount programs and the effect of new rate plans to decrease Operating Revenues. Data communications business: Operating Income increased due to the effect of reducing unprofitable transactions, in addition to the improvement of gross margin in conjunction with an increase in sales. Operating Revenues [year-on-year+107.6] , ,373.7 Regional communications business 86.1 Long distance and international communications business Mobile communications business 26.0 Data communications business 81.7 Other business Elimination of intersegment/others (Billions of yen) 2014/3.2Q 2015/3.2Q Operating Expenses 4,613.0 [year-on-year+169.7] Regional communications business Long distance and international communications business 46.8 Mobile communications business 60.6 Data communications business 0.8 Other business 16.6 Elimination of intersegment/others 4, /3.2Q Operating Income 2014/3 2Q [year-on-year(62.1)] Regional communications business Long distance and international communications business Mobile communications business Data communications business Other business Elimination of intersegment/ Others 2015/3.2Q /3 2Q

34 Consolidated Forecasts for 2015/3 Forecasts for both Operating Revenues and Operating Income have been adjusted due to the higher-than-expected spread of new rate plans FY /3 Forecasts Change from Initial Forecasts (Billions of yen) (Billions % Progress of yen) 2015/3 Compared to FY2014/2Q 2Q FY /3 Forecasts Operating Revenues 11,010.0 (190.0) 5, % Operating Expenses 9,915.0 (70.0) 4, % Operating Income 1,095.0 (120.0) % Net Income* (57.0) % EPS(yen) (57.00) * Net income represents net income attributable to NTT, excluding noncontrolling interests. 33

35 Trend in Consolidated Financial Results Operating Revenues Trillion yen Operating Income Trillion yen Net Income Trillion yen Operating FCF Trillion yen EPS yen Fiscal year ended/ing March 31 *Includes influence of 60 billion yen of non-operating revenues by The Otemachi 2-Chome Area Redevelopment Project. (Note) Operating FCFEBITDA -Capex 34

36 Changes in Consolidated Operating Revenues Consolidated Operating Revenues billion yen Regional communications business Long distance and international communications business Mobile communications business Data communications business Other business (Fiscal year ended/ing March 31) (Note) Business segment operating revenues include inter-segment transactions 35

37 Changes in Consolidated Operating Income Consolidated Operating Income billion yen Regional communications business Long distance and international communications business Mobile communications business Data communications business Other business (Fiscal year ended/ing March 31) (Note) Business segment operating income include inter-segment transactions 36

38 Changes in CAPEX Billions of yen CAPEX / Sales Others NTT DOCOMO NTT EAST NTT WEST (Fiscal year ended/ing March 31) 37

39 Changes in Interest-bearing Debt Interest-bearing Debt billion yen (Fiscal year ended/ing March 31) * Debt ratio = Interest-bearing debt / (Interest-bearing debt + Shareholders equity) x

40 Changes in Number of Employees Consolidated No. of employees Regional communications business Long distance and international communications business Mobile communications business Data communications business Other business End of Year/month 39

41 Age Distribution of Employees at NTT East, NTT West and Outsourcing Companies (As of March 31, 2014 Number of Employees Age (Note) Figures for East Outsourcing Companies include the consolidated prefectural outsourcing companies (NTT EAST-TOKYO and others), NTT-ME and NTT EAST SOLUTIONS. while figures for West Outsourcing Companies include NTT BUSINESS SOLUTIONS, NTT MARKETING ACT, NTT NEOMEIT, NTT FIELDTECHNO and NTT BUSINESS ASSOCIE WEST. Figures for those companies include the number of more than 60-year-old contracted employees. 40

42 Share Buy Backs and Cancellation Buy back from market Buy back from market Cancellation Buy back from Gov t share holding ratio Treasury Stocks <10.4%> Treasury Stocks <14.1%> Treasury Stocks <0.0%> 99mil. shares Gov t Owned Shares 431mil. shares <33> 99mil. shares 38mil. shares Gov t Owned Shares 431mil. shares <33> 138mil. shares 49mil. shares Gov t Owned Shares 431mil. shares <33> Excess Holdings 62mil. shares Cancellation -187 mil. shares Gov t Owned Shares 431mil. shares <39> Excess Holdings 36mil. shares Treasury Stocks <2.3%> 26mil. shares Gov t Owned Shares 405mil. shares <37> 793mil. shares 755mil. shares 705mil. shares 705mil. shares Market floating shares 705mil. shares Mar. 31, 2012 Mar. 31, 2013 Oct. 31, 2013 Nov., 2013 Total number of shares issued (million shares) 1,323 1,137 Mar., 2014 Mandatory (minimum) number of shares to be held by the Government under the NTT Law = total number of shares issued30 million shares issued at the IPO in 2000) 1/3 *The number of shares issued after the initial listing are not to be included in the calculations. (NTT Law, supplementary provision 13) 41

43 N Next Value Partner T for Transformation T of Business models and Lifestyle by Trusted Solutions of Global, Secure, End-to-end, and Full-line ICT services