Kddi Corp Unsp/Adr

Thank you for waiting. We will now begin the financial results briefing and Q&A of KDDI Corporation for the first half of fiscal year ending March 2025. Thank you very much for taking time out of your busy schedule to join us today. I am Miyakawa of Investor Relations Department and will serve as the moderator today. This briefing will be broadcast live on the Internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance. Let me introduce the participants today. Takahashi, President and CEO. Kuwahara, Executive Vice President and Executive Director of Business Solutions Sector. Matsuda, Managing Executive Officer, CDO and Executive Director of Advancing Business Technology Sector. Saishoji, Managing Executive Officer, CFO and Executive Director of Corporate Sector. Takezawa, Managing Executive Officer and Executive Director of Personal Business Sector. Aketa, Executive Officer and Executive Director of Corporate Management Division. three financial results-rated materials, and two TSE disclosure materials. A total of five materials are posted on our IR website. Please refer to the disclaimer in the material regarding statements made in this document, performance targets, and projected subscriber numbers and others explained in the Q&A session today. President Takahashi will first explain the financial results summary, followed by Q&A. Mr. Takahashi, the floor is yours.

Thank you. Thank you for joining us today out of your very busy schedules. Before we entertain your questions, let me briefly review the highlights of a financial performance for the first half of the fiscal year ending in March 2025. Both revenue and income increased in the first half of the year, ending in March 2025. If you look at the consolidated results, the left shows the operating revenue, which was 2,855,700,000 yen, up 2.8% year-on-year with progress ratio of 49.5% against the full-year forecast. If you look at the center operating income, it was 573.1 billion yen, up 2.3% year-on-year with a good progress ratio of 51.6% against the full-year forecast. The key points of the first half performance are communications upper revenues continue to increase building on the first quarter. DX business services segment operating income had double digit growth. Financial and energy businesses achieved an increase in income, all enjoying steady progress in line with the full year forecasts. Next, let me share with you factors for change in the consolidated operating income. Communications upper revenues on major businesses such as DX enjoyed steady growth. From the left, group MVNO revenues and Rakuten roaming revenues was minus 11.2 billion yen year-on-year. Multi-brand communications upper revenues were plus 4.6 billion yen. Financial business and energy business combined were plus 11.4 billion yen. Lawson income with equity method was plus 9.8 billion yen. DX business services segment was up 11.4 billion yen, while there was an increase in technology and sales promotion cost operating income was up 12.8 billion yen. Next on pathway, it was mid-term growth. To achieve our EPS target by the year ending in March 2026 by promoting satellite growth strategy, we aim to grow major businesses and new business areas. In addition to increasing profits in major businesses such as ARPU revenues and focal areas like DX and new areas such as drones, Starlink and Lawson, We will also increase efficiency in technology cost. Regarding ARPU revenues, the left shows total ARPU revenues, which are growing both in communications and value-added. The right shows communications ARPU by brand. For AU, about 3% increase year-on-year. For UQ Mobile, it's about 7% growth year-on-year. As for migration from UQ to AU, it has almost doubled here. It's steady. And brand mix is also improving.

We will promote initiatives to expand our customer base and create added value to maximize total ARPU revenues. Left side, growth strategy of personal services segment aims to increase revenues and retention by creating added value while building on the communication customer contact points. Right side, to strengthen this strategy, KDDI-Lawson collaboration started on a full scale in addition to the announcement of number one network for connected experience and competitive pricing plans. Our customer base in value-added area is steadily expanding through synergy with communications. Left side, the number of AU Jibun Bank savings accounts increased by 940,000 year-on-year. The number of AU Pay Gold Card members increased by 410,000 year-on-year. And right side, the number of AU Denki subscriptions increased by 30,000 year-on-year. Next is on business services segment. Left side, operating revenue in the first half was 672.4 billion yen, with a steady increase of 13.1% year-on-year. The growth area in particular is driving growth, which is up by 29.5% year-on-year. Right side, operating income was 113.7 billion yen, up 11.1% year-on-year, making steady progress toward double-digit growth for the full year. Next is our capital policy for sustainable growth. Left side. We resolved the reduction of investment unit through two-for-one stock split in order to attract new individual investors who can support our sustainable growth. As shown on the right side, we resolved additional share repurchase up to 100 billion yen of owned shares through market purchases, including the 100 billion yen. The total amount of repurchase for FY March 25 is up to 400 billion yen. This is today's summary. The consolidated results for the first half of FY March 25 show an increase in revenue and income and steady progress in line with the full year forecasts. In personal services segment, total ARPU revenues increased and ARPU by brand and number of migration to AU progressed steadily. Towards strengthening of the momentum, we are promoting attractiveness of KDDI with our multi-brand strategy and high-quality network. Collaboration with Lawson started. We will contribute to solving social issues through the power of real tech. In business services segment, growth area is driving growth with double-digit growth in both operating revenue and income. We will promote Wacom Cross initiatives and construction of AI infrastructure to support it. Capital policy is as I just explained. That concludes my presentation. We will now move on to Q&A session. Thank you.