Performance Highlights and Q&A of FY2016.3

Date Thursday, May 12, 2016, 5:00 pm-6:00 pm
Location 20F Conference Room, Garden Air Tower
Respondents Takashi Tanaka, President; Hirofumi Morozumi, Executive Vice President; Makoto Takahashi, Senior Vice President; Yuzo Ishikawa, Senior Vice President; Hidehiko Tajima, Associate Senior Vice President; Yoshiaki Uchida, Associate Senior Vice President; Takashi Shoji, Vice President; Hiroki Honda, General Manager, Corporate Management Division; Keita Horii, General Manager, Investor Relations Department (MC)

Performance Highlights

Financial results for the fiscal year ended March 2016

President Tanaka explained the three points; "review through to the fiscal year ended March 2016," "medium-term target through to the fiscal year ending March 2019," and "forecasts for the fiscal year ending March 2017."

1. Review through to the fiscal year ended March 2016

In the fiscal year ended March 31, 2016, consolidated operating revenue increased 4.6% year on year, to ¥4,466.1 billion. Consolidated operating income was up 25.2%, to ¥833.4 billion. Profit for the period attributable to owners of the parent also was up 24.9%, to ¥494.5 billion.
KDDI announced the medium-term target announced in April 2013 (double-digit growth in consolidated operating income for three consecutive years and a dividend payout ratio of over 30%) and aimed for further growth by promoting the 3M Strategy. The expansion of customer base for au Smart Value and au Smart Pass, the two services embodying the implementation of the 3M Strategy, has brought KDDI three consecutive years of double-digit growth in consolidated operating income.

On the other hand, KDDI has promoted improvement in shareholder returns in line with the goal to ensure over 30% dividend payout ratio for three years in a row. The dividend per share as of the fiscal year ended March 2016, the final year of the medium-term plan, is planned to be ¥70―a five-yen increase from the forecast made at the beginning of the term. The payout ratio is planned for over 35%. KDDI has also resolved to repurchase of own shares up to aggregate price of ¥100 billion.

2. Medium-term target through to the fiscal year ending March 2019

To be the customers' preferred carrier while handsets, fees, and networks continue to be homogeneous, KDDI pursues the "transformation to a business that offers customer experience value" to "sustainably grow the domestic telecommunications business," "maximize the au Economic Zone," and "aggressively develop global businesses."

Specifically, for the sustainable growth of the domestic telecommunications business, KDDI seeks to expand the au ARPA by increasing the penetration of smart devices and IoT [1] services. For the maximization of the au Economic Zone, KDDI aims to establish a growth in non-telecommunications domains through increasing circulation in online (content services for au customer base) and offline (shop use) settlement as well as in commerce and financial services that cross over both settlement spheres.
For the aggressive development of global business, KDDI will ensure growth by developing businesses in heavily populated regions where business is flourishing at a rapid pace, drawing on its experiences and know-how cultivated through international and domestic activities.

Building on the achievement of such objectives, KDDI aims for CAGR of 7% in consolidated operating income, as well as attaining a dividend payout ratio from over 30% to over 35%, in its continuing pursuit to simultaneously improve sustainable profit growth and shareholder returns.

  • [1]
    IoT: Internet of Things

3. Forecasts for the fiscal year ending March 2017

To achieve our new medium-term plan, KDDI projects a consolidated operating revenue of ¥4,700 billion (yoy +5.2%) and an operating income of ¥885 billion (yoy +6.2%) for the fiscal year ending March 31, 2017, as the first year of the plan.
We also plan dividends per share of ¥80 (dividend payout ratio 36.9%) for the year as well.

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