Nippon Telegraph & Telephone (NTT)

Thank you very much for participating today despite your busy schedules. We would like to now start the briefing session on NTT's fiscal year 2024 third quarter financial results. I am Hanaki from the IR office and will be serving as the MC today. First, we would like to introduce today's attending members. Hiroi, representative member of the board, senior executive vice president. Nakamura, executive officer, head of finance and accounting. Hattori, executive officer, head of corporate strategy and planning. The audio of today's briefing is streamed live. We are planning to have on-demand streaming on our website at a later date, so we seek your understanding. As for today's materials, please refer to presentation materials on our IR website. On the first page of the materials, points to be noted are listed, so we kindly ask you to please go through them. First of all, today Senior Executive VP Hiroi will explain the overview of our financial results, followed by questions from all of you. Without further ado, Mr. Hiroi, please.

Thank you. My name is Hiroi. Thank you for joining us despite your busy schedule. We appreciate your attendance today. So let's explain the financial results for the third quarter of fiscal year 2024. Let's begin with the consolidated results. Please turn to page four. Operating revenue increased while operating profit and profit decreased. Operating revenue set a record for the third quarter. Also, operating revenue increased by 332.9 billion yen, reached 10 trillion 49.7 billion yen, due to increase in domestic and global revenue at Entity Data Group, as well as increase in revenue from the smart lab business at Docomo. Now, of this increase, the impact of foreign exchange rate was approximately 125 billion yen. So, this is record high level as the operating revenue for the quarter. Let me now turn to operating profit. Operating profit decreased by $87 billion and raised $1,299.2 billion. Despite the increase in profit at anti-data group and increase in smart life business, this is due to decreasing communication service revenues in mobile and fixed-line segments, as well as measures to strengthen Docomo's customer base, as well as the impact of slowing down on core assets, which was implemented in the previous year. Now, with regard to net increase in optical fiber services, this has increased year-on-year due to efforts to enhance marketing, and as a result, mobile number portability, or MNP, is showing strong results in the recent month. Now, achieving the annual plan for the profit may seem somewhat challenging, but we'll make the utmost effort toward the goal through the efforts of individual respective operating companies within the group. As for profit, this was $150.7 billion down $116.4 billion year-on-year due to decline in operating profit and also rebound from gains on the stock sales from the previous year. EBITDA was $2,552.5 billion down $19.2 billion year-on-year due to decline in operating profit. Now let me turn to page five and talk about continuing factors by segment. Let me first start with integrated ICT business. This segment posted year-on-year growth, despite decline in mobile communication service revenue, mainly due to growth in finance and payment in the smart life business. Now, although profit increased in the smart life business segment, overall profit declined due to measures to strengthen customer base in the communication service department. Achieving target might be challenging, but we will make efforts towards recovery by taking all possible measures to reduce cost and also improve network quality and strengthen customer base Let me now talk about the regional communication business segment. In this segment, both revenue and profit decreased due to decrease in network revenue and also rebound from the impact of slowing down non-core assets implemented in the previous year. But net increase in auto corporate service posted increased year-on-year due to stronger sales of 10 gigabit plan and also all unit plans for the condominium market. Both operating revenue and operating profit are generally in line with our expectations, and we will actively review our cost structure, including the selection and concentration of businesses and the reform of operations in order to achieve medium-term growth. Let me now turn to global solution business segment. In addition to increased sales in the public, financial, and corporate sectors in Japan, Sales increased year-on-year due to the impact of foreign exchange rates. So this part was very strong. Operating profit increased year-on-year due to higher operating profit here in Japan, and so it's higher operating income, operating profit in the data center business overseas. As for the other segment, here in the other business segment, sales and profit increased year-on-year due to the expansion of data center engineering at NTT Urban Solutions. Authenticity facilities did very well as well. Self-business increased year-on-year in terms of sales and profit. Although profit increased driven by increase in revenue, profit remained unchanged from the previous year because of the loss from the sales of properties.

I would like to move on to topics, so please refer to page, slide number seven. I will first explain our initiatives towards regional revitalization and urban development. In connection with the Expo 2025, we are scheduled to open hotels, parks, and cultural facilities in the Osaka area, Patina, Osaka, Naniwa, Nomiya, Ato, Koen, and the commercial facility within the park, Nanoniwa, will open this spring. Furthermore, stadiums and arenas are scheduled to begin operations in various locations. Slide eight, please. I will explain about holding the NTT Data Leadership Event in India. To mark the start of eye on APN connections and connections to the missed submarine cable between India, Singapore, and Malaysia at the Mumbai Data Center. We will be holding an entity data leadership event in Mumbai in March. In addition, we will expand our data centers in India and further strengthen our data center business, which has the number one market share in India. Next, please go to slide nine. Mobile World Congress, the exhibition of us there. Every year, we are doing this at the Mobile World Congress in Barcelona in March. We plan to exhibit the NTT Group's space business strategy, network operation solutions using a generative AI, and more. In addition, As part of the ION Global Forum, we are planning to hold sessions and exhibitions of solutions. So if there are people who will be going to India, please come and visit our booth as well. Slide 10 is something that we are showing you every time. This is the progress under the Medium-Term Management Strategy And therefore, we would like you to take a look at this at your leisure time. This concludes my presentation.