KDDI HOMECorporate InformationInvestor RelationsIR DocumentsPresentationsFY 2019.3Performance Highlights and Q&A for the First Quarter of the Fiscal Year Ending March 2019

Performance Highlights and Q&A for the First Quarter of the Fiscal Year Ending March 2019

Date Wednesday, August 1, 2018 5:00 pm-5:45 pm
Location Conference Room, Garden Air Tower
Respondents Makoto Takahashi, President; Yuzo Ishikawa, Executive Vice President; Yoshiaki Uchida, Executive Vice President; Takashi Shoji, Senior Vice President; Shinichi Muramoto, Senior Vice President; Keiichi Mori, Associate Senior Vice President; Kei Morita, Associate Senior Vice President; Nanae Saishouji, 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 Takahashi described two points; "Integration of telecommunications and life design" and "Highlights of Financial Results for the 1st Quarter".

1. Integration of telecommunications and life design

At KDDI, based on our core business of telecommunication, we feel that our mission is to deliver new "Experience Value" by providing life design services such as commerce, finance, energy, entertainment, and education to individual customers and services using technologies such as IoT and 5G, which will be launched full-scale in coming years, to corporate customers.

First, for our individual customers, we offer a cost-saving "au Flat Plan 25 Netflix Pack" bundle that resolves the issue of content fees and communication data charges, which have been an impediment to joining subscription-based video streaming services. This plan does more than simply offer a product and price plan, but it is the result of the core values of both KDDI and Netflix, who are committed to providing an even better experience value from the customer perspective.

For our corporate customers, we are using IoT to contribute to the business of our customers.
For example, in the "KDDI IoT Cloud: Factory Package," which is scheduled for launch this month, we provide a one-stop solution from sensor installation to alert notification and fault prediction detection using data collection and analysis for contributing to higher productivity and reduced costs for companies.
Through our collaboration with global partners such as TOYOTA and HITACHI, we are using the KDDI "IoT Worldwide Architecture" to build an environment for consolidated operation from device management to data analysis so that companies expanding their businesses globally are not dependent on line connections. In addition, KDDI is elaborating with SORACOM to enable usage in more than 100 countries and regions around the world. Through those initiatives KDDI will expand coverage to automobiles and a wide range of IoT devices in coming years.

Finally, KDDI is conducting innovative proof-of-concept experiments as a part of its initiatives for the 5G era, such as telexistence, where a remote robot binds with your body, unmanned automatic driving vehicle, drones for disaster relief and other scenarios, and more. KDDI is striving to be a company that continues to deliver exciting proposals in a wide range of scenarios in customers' everyday life and businesses by using new technology to build a world where all the devices around us are connected by communication.

2. Highlights of Financial Results for the 1st Quarter

Consolidated sales for the first quarter of the fiscal year ending March 2019 increased by 1.9% YoY to 1,221.7 billion yen.
For consolidated operating income, even though mobile communications revenue fell by 11.2 billion yen due to a temporary drop in revenue as a result of new price plans, increased value-added ARPA revenues and the Business and Global Services segments, resulting in 288.9 billion yen (+7.4 billion yen YoY, 2.6% increase). For the consolidated operating income in the annual plan, this represents strong progress at 28.3% of the target.

In the domestic telecom business, the number of subscribers has increased significantly for both KDDI's "au Pitatto Plan," which enables customers with low data usage to have rates with great value, and the "au Flat Plan," which is exceeded for customers who use large amounts of data, and total subscribers passed 8 million on May 31. Also, the au price plan satisfaction* for the one year since the launch of the new rate plans has continued to improve. Looking ahead, with our "au Flat Plan 25 Netflix Pack" as a start, KDDI will continue to offer new experience value that exceeds customer expectations and that goes beyond simple price plans.
With the result of these initiatives also having a positive effect, the au churn rate for the first quarter was 0.71% (0.2 percentage point drop YoY).

  • Survey of au smartphone and feature phone users (KDDI survey. Approx. 2,300 responses per month)

In life design businesses, the au Economic Zone gross merchandise value was 561.0 billion yen (32.8% increase YoY), au Economic Zone sales were 144.0 billion yen (21.0% increase YoY), value-added ARPA was 660 yen (17.9% increase YoY), and so these indicators all showed two-digit growth compared to the same period last year.
This operation data is being led by continued strong growth in the number of au Smart Pass Premium members (5 million as of the end of June 2018) and number of valid issued au WALLET credit cards (3.6 million as of the end of June 2018).

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