KDDI HOMECorporate InformationInvestor RelationsIR DocumentsPresentationsFY 2017.3Performance Highlights and Q&A for the Fiscal Year Ended March 2017

Performance Highlights and Q&A for the Fiscal Year Ended March 2017

Date Thursday, May 11, 2017 5:00 pm-6:00 pm
Location 20F Conference Room, Garden Air Tower
Respondents Takashi Tanaka, President; Hirofumi Morozumi, Executive Vice President; Makoto Takahashi, Executive Vice President; Yuzo Ishikawa, Executive Vice President; Yoshiaki Uchida, Senior Vice President; Takashi Shoji, Associate Senior Vice President; Shinichi Muramoto, Associate Senior Vice President; Hiroki Honda, General Manager, Corporate Management Division; Keita Horii, General Manager, Investor Relations Department (MC)

Performance Highlights

The Presentation of the Financial Results

In the presentation of the financial results, President Tanaka described three points; "Financial Results for FY17.3," "Toward Achieving the Medium-Term Target," and "Financial Forecasts for FY18.3".

1. Financial Results for FY17.3

In the fiscal year ended March 31, 2017, consolidated operating revenue increased 6.3% year on year, to ¥4,748.3 billion. Consolidated operating income was up 9.7%, to ¥913.0 billion mainly due to driving the increase of profit by domestic business.
We plan to raise the year-end dividends per share up ¥5 from the initial forecast, to ¥85 for the fiscal year ended March 31, 2017 (for the 15 consecutive years.)

2. Toward Achieving the Medium-Term Target

To achieve the goals of the medium-term plan, which will continue through the fiscal year ending in March 2019 (and which includes targets such as a 7% CAGR for consolidated operating income, and a dividend payout ratio of more than 35%), KDDI aims to sustainably grow the domestic telecom business and establish new growth pillars based around three strategies, which are to "sustainably grow the domestic telecom business," "maximize the au Economic Zone," and "ambitiously develop global business."

(1) Sustainably grow the domestic telecom business
au STAR, which is an au brand service designed to give preferential treatment to long-term users, aims to increase customer experience value by awarding points every month depending on years of service use and flat-rate data fee, while simultaneously improving the appeal of WALLET points by offering a wide range of products that can be obtained using WALLET points.

Also, in conjunction with the "Super-Dedzilla" high-volume 20/30 GB data plan that was launched in September 2016, KDDI is enriching the range of value-added services that are provided such as video content, in an effort to expand the total ARPA.

Furthermore, in the growing low-price smartphone market, the MVNO service provided by KDDI group companies aim to leverage each of their strengths to maximize the number of mobile IDs.

(2) Maximize the au Economic Zone
To expand business in areas of non-telecom business, KDDI has pursued alliances and investments with the aim of acquiring new expertise and customer bases.

In the commerce business, KDDI acquired a shopping mall business from DeNA Co., Ltd. in December 2012, and launched the new Wowma! shopping mall in January of this year. To bolster the number of stores and the product lineup, KDDI is enhancing measures such as campaigns for store operators, which are aimed at improving the quality of services.

In financial services, KDDI established Jibun Bank (Internet banking service) in 2008, launched the au WALLET Settlement service in 2014, and has been expanding the service lineup through efforts such as the launch of au brand financial products in April 2016.

In energy services, KDDI launched au Denki in April 2016 and started handling new gas services in the Kansai area in April 2017.

In addition, along with the active development of au Smart Pass as a customer touchpoint, KDDI launched au Smart Pass Premium in January of this year. By providing enhanced special offers for members and additional security functions, the service further strengthens au Smart Pass as a customer touchpoint.

Furthermore, in addition to consumer-oriented business, KDDI is developing IoT business for corporate customers. The provided services include solutions that help corporate customers achieve cost reductions. As an example, KDDI offers a service that uses a variety of sensors to enable toilet occupancy management and water-saving management.

(3) Ambitiously develop global business
In the global consumer business, KDDI is conducting a full-scale roll-out of LTE services in Myanmar and Mongolia. For corporate customers, KDDI is providing high-quality data center services centered in Europe, which boast the largest number of connections in the world, while continuing to promote the mobile business in developing Asian countries and the data center business.

3. Financial Forecasts for FY18.3

For the fiscal year ending March 31, 2018, the Company projects a consolidated operating revenue of ¥4,950.0 billion (yoy +4.2%) and an operating income of ¥950.0 billion (yoy +4.1%).
We also plan dividends per share of ¥90 (dividend payout ratio 39.2%, yoy+¥5) for the year as well.
To achieve our medium-term plan toward the fiscal year ending March 31, 2019, KDDI focus on both sustainable profit growth and enhancing shareholder returns.
And the board of directors of KDDI Corporation at its meeting held on May 11, 2017, resolved that we will repurchase its own shares up to 100 billion yen.

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