CFO Message

Under the current Mid-Term Management Strategy, we are targeting EPS for FY26.3 at 1.5 times the level of FY19.3. For FY26.3, the final year of the plan, we aim to achieve consolidated operating revenue of ¥6,330 billion (YoY +7.0%), operating income of ¥1,178 billion (YoY +5.3%), and profit for the year attributable to owners of the parent of ¥748 billion (YoY +9.1%), thereby posting higher revenue and profit and meeting our EPS target. The FY26.3 operating income plan reflects (1) higher mobile revenue from value-added communications, (2) sustained growth in Finance, Energy, and Lawson, (3) revenue growth in Business Services segments including IoT and data centers, and (4) gains from technological restructuring and other measures, which together will offset factors such as reduced roaming revenue from Rakuten and investments in co-creation with partners, resulting in a year-on-year increase of ¥59.3 billion versus FY25.3.

As our Mid-Term Management Strategy, we are promoting the Satellite Growth Strategy, in which data-driven utilization and the social implementation of generative AI based on 5G communication as a core business, in conjunction with "Orbit1" (DX, Finance, Energy), which drives KDDI's growth, and "Orbit2" (Mobility, Space, Healthcare, Web3/Metaverse, Sports & Entertainment), which represents future growth domains. To achieve this, we believe optimization of medium- to long-term investments and cost balance is necessary. While we will not scale back CAPEX in communications, our core strengths, we are enhancing efficiency through infrastructure sharing and reviewing low-utilized equipment, thereby appropriately controlling CAPEX and OPEX to allocate resources for advanced technologies such as AI.
Alongside sustainable growth, we remain committed to shareholder returns, targeting a dividend payout ratio of over 40% and pursuing continuous dividend increases. For FY26.3, we plan a DPS of ¥80, representing +10.3% growth year on year and the 24th consecutive year of dividend growth. In addition, we resolved to repurchase up to ¥400 billion in treasury stock.

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With capital efficiency gaining increasing importance, we also focus on ROE. Excluding the financial business, ROE for FY25.3 was in the 13% range, exceeding our cost of equity. For FY26.3, we target further improvement in ROE by balancing business growth with shareholder returns. Going forward, we will continue to pursue sustainable business growth while maintaining an efficient balance sheet management.

To strengthen the capabilities of individuals and organizations, we are implementing "Workstyle Updates" to create a more employee-friendly work environment. From April 2025, we began relocating to THE LINKPILLAR 1 NORTH in TAKANAWA GATEWAY CITY, with the grand opening of our new headquarters in July 2025. The new headquarters concept is a "Connectable City that enhances the Power to Connect and continues to inspire an exciting future."
The facility serves as a "sandbox for new workstyle" that encourages flexible and productive work by providing collaboration spaces and event areas for employees, group companies, customers, and partners alike, breaking down barriers and fostering ongoing workstyle innovation. Starting with the headquarters' opening, we are cultivating a culture that encourages employees to take on challenges and generate co-creation and synergies across divisions and companies.
At the same time, we are evolving our KDDI Version Job Style Personnel System to create an environment where diverse talent can thrive, continuing our transformation into a Human Resources First company.

On carbon neutrality, we have set four environmental targets, including achieving net-zero emissions by FY2040, and are working across the Group toward this goal. With the expansion of AI use, rising electricity consumption at data center facilities has become a critical issue. By FY2025, we plan to use virtually 100% renewable energy for all data centers worldwide, through measures such as introducing energy-saving technologies and shifting to renewable sources. Notably, the Osaka Sakai Data Center, scheduled to begin operations in FY2025, will adopt a hybrid of direct liquid cooling and air cooling and use 100% renewable energy. On mobile base stations, we are advancing initiatives such as demonstration projects for stations powered by perovskite solar cells in collaboration with investee companies of the KDDI Green Partners Fund. We also continue to promote solar power generation via au Renewable Energy and CO2 reduction across the supply chain through dialogue with business partners.
In addition to carbon neutrality, we promote biodiversity conservation, for example, conducting citizen-participatory ecological surveys using the "Biome" smartphone app in collaboration with the Ministry of the Environment and local governments, and actively disclose environmental information based on frameworks such as not only TCFD but also TNFD.

In recent years, incidents such as cyberattacks by third parties leading to leaks of important confidential information and unauthorized use of services have become major social issues worldwide. With the advancement of the Satellite Growth Strategy, our business portfolio has diversified and the number of Group companies has grown, making Group-wide risk management increasingly important. In this context, we reviewed our risk management system and established the Risk Management Committee, chaired by President Matsuda, to centrally identify and deliberate material management risks. The committee selects responsible officers for each identified risk and determines response policies. Matters deliberated by the committee are submitted to and reported to the Board of Directors, thereby ensuring that material management risks are discussed at the board level.
We also recognize that all business activities must be grounded in respect for human rights, and have established the "KDDI Group Human Rights Policy." We believe we have a responsibility to respect the human rights of all stakeholders, including employees and business partners, and to prevent and mitigate adverse impacts.
With the rapid evolution of technology, particularly AI, human rights risks such as data privacy are also increasing. To strengthen AI governance, we are promoting compliance with the "AI R&D and Utilization Principles for KDDI Group." Participation in the AI Governance Association, and the launch of the "AI Security Portal," a website centralizing information on AI-related security.