Kddi Corp Unsp/Adr

Now we will begin the KDDI Corporation's F526 March term financial results briefing. I am Hiraoka from the KDDI's Public Relations Department, and I will serve as today's moderator. Today's briefing is being held both on onsite and through multiple online streaming platforms, including YouTube. Today's financial materials, And related documents are available on KDDI website. A total of eight materials are posted on the web. If you are on the conference room, please check your handouts. Let me introduce today's speakers. President, Representative Director, CEO, Hiromichi Matsuda. Senior Managing Director, Executive Officer, Director, CFO, Executive Director, Corporate Sector, Nanae Saijoji. Managing Executive Officer, Director, CFO, Executive Director, Corporate Strategy Planning Division, and Executive Director, Tomohiko Katsuki. Executive Officer, Deputy General Manager, Corporate Sector, and Executive Director, Corporate Management Division, Kenji Akita. A total of four will be the speakers.

Mr. Matsuda, please.

Thank you very much for taking time out of your busy schedules to join us today at KDDI's earnings briefing. I will present our financial performance for the year ending March 2026 and the new medium-term management plan. First, the financial results for the year ending March 2026. On the financial results for the final year of the previous medium-term management strategy, we achieved growth in both revenue and profit, hitting mid-term EPS target through underlying performance driven by business growth. Operating revenue for the year ending March 2026 was 6,071,000,000,000 yen, up 4.1 percentage points year-on-year. Our underlying performance in terms of operating income was 1,164.3 billion yen, up 6.0% year-on-year, excluding the external outflow and cost of impairment for the contracts associated with the fictitious circular transactions we explained as part of our Q3 earnings at the end of March. Likewise, our net income attributed to the owner of the parent was 756.7 billion, an increase of 13.6% year-on-year. Because the amount of net income required to attain our EPS target, which was set at 1.5 times, our net income 7.9%, our revenue 1.1%. And I said, because the amount of net income required to attain our EPS target, which was set at 1.5 times the level of March 2019, is 748 billion, we were able to achieve net income well above that. Next, I will discuss our consolidated operating income and its factors for change. Starting from the left, mobile, the personal services segment base, rose 31.7 billion a year. Excluding the impact of access charge, the increase was 45 billion yen, a major growth due to our initiative to create a value of Finance and energy businesses, as well as Lawson's equity method income combined, increased 17.4 billion yen. VX increased by 28.6 billion yen, growing substantially in the second half. We controlled technology structural reform and impact of prior year's promotional expenses. In total, income grew by 66.4 billion yen, with all the business domains maintaining solid debt performance. This slide is on a mobile structural transformation we have been focusing on for the past year. Structural transformation to shift towards focus on LTV and creation of value have succeeded, resulting in a strong growth in our mobile revenue. As shown on the left, mobile revenue in the personal services segment increased 32.6 billion yen year-on-year, excluding the impact of access charge. The increase was 50 billion yen year-on-year, which was much greater than our initial forecast. Shown on the right is our value creation ahead of our competitors, which underpinned our success. KDDI was rated number one in connected experience in terms of telecommunications quality for an unprecedented consecutive four years. Furthermore, AU Styling Direct, which is marking its first anniversary, exceeded 4 million connections, and the 5G pass lane is being used by approximately 2.5 million users On a cumulative basis, as a result, mobile ARPU was up 100 yen year-on-year with a stable churn rate. The number of smartphone subscriptions was up 360,000 year-on-year, enabling us to achieve increasing both ARPU and the number of IDs. Next on financial business and DX, which are our areas of focus, by promoting the satellite growth strategy during the prior medium-term management strategy between We are addressing the issues identified in the review so that they are remediated by June. Next, toward the year end, we will invigorate actions to enhance the quality and quantity of our communication. Executive-level dialogues with group companies have been initiated to establish a relationship on an equal footing with them and to better understand their perspectives. Additionally, to embed KDDI's philosophy as the common language, by the end of the first half of this fiscal year, KDDI's top management is scheduled to visit 14 of our strategic subsidiaries in person. I myself have visited Big Globe and G-Plan. 260 employees participated in the meeting I attended there. I had more than 10 instances of interactions with them during the Q&A sessions. discussing our hopes and expectations for the employees, the future of telecom business, mindset change, and so forth, with the majority of the views expressed being positive, reminding me of the importance of having a dialogue. By embracing the genuine opinions of the group company's employees and responding to them sincerely, we hope to enhance their trust in KDDI and improve their psychological safety. Because there is a possibility that simply trying to strengthen the control processes will only increase the burden and cause fatigue on the part of the employees on the ground, we will try to alleviate the burden by leveraging AI and managing creatively so as to make it positive. Let me talk about the organizational change we're implementing to make these initiatives more effective. As is on the lockdown side, Although we put in place a framework 10 years ago when we had the DMX case to manage the subsidiaries across the group from a unified perspective, as reorganization repeatedly ensued to respond to changes in the environment, subsidiary management functions within the corporate department have come to be dispersed. This time, to correct this situation, we installed a division to advance governance in all the companies across the group and to integrate the departments in charge of finance, group governance, and risk management. This division will be headed up by our CFO, Sai Shoji, who will double head as CFO and Head of Governance Division, enabling centralized management, assessment, and as a result, effective control of financial activities and governance risk related information. This division will also play the role of passing down the lessons learned from the inappropriate incident to the new employees and group of companies.