Nippon Telegraph & Telephone (NTT)

We now like to start earnings announcement for the first quarter of the fiscal year 2021. Thank you very much for taking time out of your busy schedule to attend the conference call today. I am Fujiki from the IR office and will be serving as today's facilitator. Thank you for your cooperation. First, I'd like to introduce the attending members today. Representing member of the board Senior Executive Vice President, Mr. Shimada. Senior Vice President, Head of Finance and Accounting, Mr. Nakayama. Senior Vice President, Head of Corporate Strategy Planning, Mr. Taniyama. We have these representatives attending. The audio of announcement is streamed live on this website. This also will be distributed on demand at a later date, and we ask your understanding. And after this, the earnings results presentation, we will have the earnings results announcement of NTT.com. We would like to seek your attendance as well. Today's presentation materials are posted on our IR website, and please refer to them. On the first page of the presentation materials, points to be considered are stated, so we would kindly ask you to read them through. After this, Mr. Shimada, Senior Executive Vice President will explain the overview of the financial results, which will be followed by a Q&A session to take your questions. Mr. Shimada, the floor is yours.

This is Shimada speaking. So, I would like to explain the financial results for the first quarter of fiscal year 2021. I would like to take as many questions as possible. Therefore, for my explanation, I would like to make it brief. First of all, please look at page 4. Both revenue and income exceeded expectations. That was the quarter's result. As for the operating revenues, it was 2,892,000,000,000 yen, up by 126.1 billion yen year-on-year. Operating income was 486.3 billion yen down by 11.3 billion yen year-on-year. Profit set a new record high of 340 billion yen up by 67.3 billion yen year-on-year due to the positive impact of bringing in the profit that would have been of minority shareholders by wholly owning Docomo. As for overseas sales, increase compared to the previous year due to the increase in the system integration of entity data revenue by capturing the strong digitalization demand. Overseas operating income margin has improved as a result of a higher revenue in entity data as well as positive effect of the structural reform initiatives. It was a 4.1% up by 1.9% year on year. Next page, please. I will explain the mobile communications of business and the long-distance international communications segment. As for the mobile communications business, though revenues declined due to low rates, overall had an increase in revenue compared to the previous year due to increase in hard handset sales as well as expansion of smart light business such as finance payment. On the other hand, due to enhancing measures for further growth of smart light business and expanding the 5G areas, operating income declined against the previous year. And by continuing the cost reductions for the full year, we are aiming for both increase in revenue and income. As for the long-distance and international communications business, there was a special demand for conference revenue last year at NTD Communications, which did not occur this fiscal year. And there was an increase in structural reform expenses at NTD Limited, therefore both revenue and income decreased. And at the I did skip a lot, but please go to page 14.

Well, in order to improve the capital efficiency and also enhance the shareholder return at the Board of Directors meeting held today, and up with a maximum of 250 billion yen of the share buyback was resolved. And also, EPS was the target for this 320 yen in FY2022 and forecast of the free cash flow and debt repayment for the term has been well considered. And with this, EPS target for the FY2021 has been revised to 302 yen from the 300 yen. Our basic shareholder return policy remains the same to increase dividend in a steady manner and also to conduct the buyback in a flexible manner to improve capital efficiency. That's it from me. Thank you.