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Kddi fy2011 e_main Kddi fy2011 e_main Presentation Transcript

  • KDDI CORPORATION Financial Results of the Fiscal Year Ended March 2012April 25, 2012PresidentTakashi Tanaka
  • 1 Financial Results for FY2012.3 / 1 Outlook for FY2013.3 Complete recovery of au momentum / 2 Initial trends under 3M strategy 3 Key Points in FY2013.3 4 Shareholder Return AppendixThe figures included in the following brief, including the business performance target and the target for the number ofsubscribers are all projected data based on the information currently available to the KDDI Group, and are subject to variablefactors such as economic conditions, a competitive environment and the future prospects for newly introduced services.Accordingly, please be advised that the actual results of business performance or of the number of subscribers may differsubstantially from the projections described here.
  • Summary 2 Operating revenues up, operating income up; Operating revenues up, operating income up;Financial Financial 11 consecutive periods of higher operating income 11 consecutive periods of higher operating income Results Results -Operating revenues: ¥3,572.1B (+4.0%, yoy) -Operating revenues: ¥3,572.1B (+4.0%, yoy) for -Operating income: -Operating income: ¥477.6B (+1.2%, yoy) ¥477.6B (+1.2%, yoy) forFY2012.3FY2012.3 YoY increase of ¥2,000 in dividends YoY increase of ¥2,000 in dividends -Dividends per share: ¥16,000 (payout ratio of 27.5%) -Dividends per share: ¥16,000 (payout ratio of 27.5%) Forecasting higher operating revenues and Forecasting higher operating revenues and operating income operating incomeForecasts Forecasts -Operating revenues: ¥3,580.0B (+0.2%, yoy) -Operating revenues: ¥3,580.0B (+0.2%, yoy) for -Operating income: -Operating income: ¥500.0B (+4.7%, yoy) ¥500.0B (+4.7%, yoy) forFY2013.3FY2013.3 Forecasting higher dividends, with an increase of Forecasting higher dividends, with an increase of ¥1,000 yoy ¥1,000 yoy -Dividends per share: ¥17,000* -Dividends per share: ¥17,000* *Figures for dividends per share in FY2013.3 (E) do not take stock split into account.
  • Consolidated Financial Results and Outlook 3 Operating Revenues (Billions of yen)4, 000. 0 3,434.5 3,572.1 3,580.0 (Billions of yen) FY2011.3 FY2012.3 FY2013.3(E) yoy yoy +4.0% +0.2% Operating revenues 3,434.5 3,572.1 +4.0% 3,580.0 +0.2% Operating income 471.9 477.6 +1.2% 500.0 +4.7% 0. 0 Operating margin 13.7% 13.4% - 14.0% - FY2011.3 FY2012.3 FY2013.3(E) Ordinary income 440.7 451.2 +2.4% 490.0 +8.6% Net income 255.1 238.6 -6.5% 250.0 +4.8% Operating Income (Billions of yen) EBITDA 936.3 908.5 -3.0% 974.0 +7.2% EBITDA margin 27.3% 25.4% - 27.2% - 477.6 500.0 471.9 Free Cash Flow 276.8 241.4 - 150.0 - CAPEX (Cash basis) 443.7 421.6 -5.0% 450.0 +6.7% +1.2% +4.7% *From FY2013.3 (E), amortization of goodwill is included in the calculation of EBITDA (Impact: ¥15.2B) [FY 2012.3] EBITDA = operating income + depreciation + noncurrent asset retirement cost 0 [FY 2013.3 (E)] FY2011.3 FY2012.3 FY2013.3(E) EBITDA = operating income + depreciation + amortization of goodwill + noncurrent asset retirement cost
  • Financial Results by Segment 4 Mobile Business Fixed-line Business Revenues Up, Revenues Up, Income Down Income Up (Billions of yen) (Billions of yen) FY2011.3 FY2012.3 FY2011.3 FY2012.3 yoy yoy Operating revenues 2,590.7 2,727.0 +5.3% 897.3 915.5 +2.0% Operating income 438.9 419.2 -4.5% 24.0 53.4 +122.7% Operating margin 16.9% 15.4% - 2.7% 5.8% - Ordinary income 429.9 413.4 -3.8% 7.8 38.3 +388.4% Net income 214.0 225.7 +5.5% 39.7 14.2 -64.4% EBITDA 774.4 731.7 -5.5% 151.6 170.4 +12.4% EBITDA margin 29.9% 26.8% - 16.9% 18.6% - Free Cash Flow 244.8 200.2 - 35.1 42.5 - CAPEX (Cash basis) 338.7 304.2 -10.2% 103.1 115.6 +12.1%
  • 5 Financial Results for FY2012.3 /1 Outlook for FY2013.3 Complete recovery of au momentum /2 Initial trends under 3M strategy3 Key Points in FY2013.34 Shareholder Return Appendix
  • Overview of FY2012.3 61 au nears complete recovery of momentum au nears complete recovery of momentum1 -Dramatic improvement in the four KPI -Dramatic improvement in the four KPI (1) au Churn Rate (2) MNP No.1 in MNP net gain Declines to record-low level for 6 consecutive month (3) Net Addition Share (4) Data ARPU Note 4Q: Up to 33.4% 4Q: +10.3% (yoy)2 Start of phase 1 of 3M strategy Start of phase 1 of 3M strategy2 -Off to a good start -Off to a good start au Smartvalue au Smart Pass au subscriptions: 0.66M / 0.56M members Households*: 0.44M *Total for KDDI Group companies and fixed-line allied companiesNote: Net addition share among KDDI, NTT DOCOMO and SOFTBANK MOBILE. *Smartvalue is a registered trademark of Energy Management Corporation.
  • Four KPIs (1) au Churn Rate 7 Full-year basis 0.73% 0.66% Declines to SOFTBANK MOBILE record-low level !1.0% In 3Q, achieved lowest level0.8% 0.75% 0.73% 0.75% in industry 0.68% 0.66% 0.67% 0.75%0.6% NTT DOCOMO 0.56%0.4% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3*Baced on financial results materials, etc. of each company.*au churn rate is calculated for ordinary handsets which exclude module-type terminals.
  • Four KPIs (2) MNP 8 Monthly Trends (‘000 subs) Full-year Comparison (‘000 subs) 94 No.1 in MNP net gain for six 273 69 consecutive months 55 53 43 40 Significant 9 improvement (634k, yoy) 0 -12 -12 -19 -23 -26 -362 Apr. Sep. Oct. Mar. FY2011.3 FY2012.3
  • Four KPIs (3) Net Addition Share 9 17.1% 27.2% ( +10.1 points, yoy)60% SOFTBANK MOBILE 4Q:Increase 33.4% to 33.4% 29.0%30% 20.7% 23.7% 18.6% 16.2% 16.0% 13.5% NTT DOCOMO0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3 * Net addition share is created by KDDI using data from Telecommunication Carriers Association’s website. * Net addition share among NTT DOCOMO, SOFTBANK MOBILE, and KDDI
  • Four KPIs (4) Data ARPU 10 YOY Increase / Rise Ratio Increase (Left axis) Rise ratio (Right axis)(yen) +10.3% yoy 10.3% (%) significant growth ! 8.2% 240 200 8% 6.5% Data ARPU 190 in 4Q/FY2012.3: ¥2,580 4.3% 150 100 3.1% 4% 2.7% 100 2.2% 1.8% 70 60 50 40 0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3
  • Smartphone Sales 11 Quarterly Trend (Million units) 1.09 5.63 (9%) (41%)2 (56%) 2.09 (50%) +4.54M units, yoy 1.63 (37%) significant 1.25 increase ! (19%) (20%) (14%) 0.61 0.66 0.39 (2%) (1%)0 0.02 0.07 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q * ( ) is the percentage of smartphone sales of all terminal sales. FY2011.3 FY2012.3
  • Reorganization of 800MHz Bandwidth 12 Handsets Not Compatible* with New 800MHz Bandwidth (Million units) * Excludes module-type handsets10 8.92 March 31, 2012: FY2012.3 7.69 Decline to 0.78M units Decline in units, 3.73M units 6.58 Transition: 5.55 3.38M 4.51 Migration rates: 91% 3.23 2.11 1.38 0.780 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12
  • au Subscriptions / Net Additions 13 au Net Additions Trend (For the past 5 years) (Million subs)2 2.15 2.11 To a high level equivalent to that in FY2008.3 ! 1.13 1.03 0.50 Cumulative total surpasses0 35.00 millon FY2008.3 FY2009.3 FY2010.3 FY2011.3 FY2012.3 *The number of FY2008.3 and FY2009.3 is the sum total of au and TUKA.
  • Initial Trends for 3M Strategy (1) Overall 14 au Smartvalue au Subscriptions / Households Application Rate for Households Utilizing Utilizing au Smartvalue (weekly) au Smartvalue (by Allied Fixed-line Service Company) <March 31, 2012> Allied company 0.66M au subs: 0.66M applications also favorable Households* Commuf@ eo HIKARI (CTC) (K-Opticom) :0.44M au HIKARI Chura 0.44M*Total for KDDI Group companies and fixed-line allied companies Allied CATV companies au HIKARI 55% 45% Applications accepted Last week from Feb. 14 in March *From start of acceptance of applications to March 31, 2012.
  • Initial Trends for 3M Strategy (2) Mobile 15 au SmartvalueSubscription Rate for New au Subs % of MNP Usage Among New au Subs Utilizing au Smartvalue (Weekly) (%) Utilizing au SmartvalueAt a level exceeding Using au SmartvalueARPU-based BEP20% There is a trend toward high MNP usage % at time of new au subscription Approx. 60% Applications accepted Last week * From March 1 to March 31 from Feb. 14 in March
  • Initial Trends for 3M Strategy (3) Mobile 16 au Smartvalue Eliminating the barriers Before Upgrade to Smartphone to the transition to smartphones Feature Phone Data ARPUPromote shift to smartphones Contribution to expandingby reducing concerns about base of smartphone usersusage charges Approx. ¥3,900 4, 200 Approx. Reasons why feature phone purchasers did not purchase smartphones* ¥4001st. An ordinary mobile phone is good enough Approx. ¥3,5002nd. Monthly usage charges are high/seem high3rd. The purchase price for a smartphone is high*Based on independent research by the Company in December 2011. 0Subjects: Users who upgraded from a feature phone to a smartphone in February 2012 (excluding company users) Customers not utilizing Customers utilizingDetails: Comparison of monthly data ARPU in month before model upgrade. au Smartvalue au Smartvalue
  • Initial Trends for 3M Strategy (4) Fixed-line 17 au SmartvalueSubscription Rate for New au HIKARI Subs No. of new au HIKARI applications Utilizing au Smartvalue (Weekly) (%) have been received in Feb. and Mar.At a level substantially Doubled year on yearexceeding ARPU-based BEP 22 Approx. 0.21M Approx. 0.10M12% 0 Feb. and Mar. Feb. and Mar. Applications accepted Last week 2011 2012 from Feb. 14 in March
  • Initial Trends for 3M Strategy (5) 18 au Smart Pass Growth in No. of Member in March (Daily) Age Distribution of Members No. of members surpassed Subscribers extend over a wide 0.5M in the first month range of ages after the service launch Further growth is expected0.5M 50 and above Up to 22 (Students) 40’s Female Male 23 to 29 30’sMarch 1 March 31 * As of March 31, 2012
  • 19 Financial Results for FY2012.3 /1 Outlook for FY2013.3 Complete recovery of au momentum /2 Initial trends under 3M strategy3 Key Points in FY2013.34 Shareholder Return Appendix
  • Positioning of FY2013.3 20 Full-Scale Implementation of “3M Strategy” Implement “game change” and secure competitive edge through 3M Strategy. Through multiple networks, provide faster, more comfortable connection environment and a reduction in costs Toward the realization of business growth in a new age Maximizing Maximizing Maximizing Maximizing “Communications revenues” Sales “Value-added revenues” “Communications revenues” “Value-added revenues” Streamlining sales Streamlining sales Optimized network cost by Optimized network cost by and marketing cost Costs realization of data offloading and marketing cost realization of data offloading
  • Outlook for Net Adds and Smartphone Sales Consolidated Basis 21 au Net Additions Smartphone Sales FTTH Net Additions* (Million subs) (Million units) (Million subs) 8.00 0.63 2.11 2.10 5.63 0.370 0 0 FY2012.3 FY2013.3(E) FY2012.3 FY2013.3(E) FY2012.3 FY2013.3(E) Net increase stays smartphone sales %: +70% yoy at a high level Approx. 70% *KDDI Groups FTTH services (au HIKARI, au HIKARI Chura, and Commuf@) (Outlook for au handset sales of FY2013.3: 11.80M units)
  • Change in Segments 22【From FY2013.3】 Segments have been reorganized, with the new segments based on reportable segments determined in accordance with the management approach, reflecting the units for which management resources are allocated and financial results are evaluated. Outline of the New Segments (1) Expand communications services customer base (2) Expand content distribution/settlement services on a foundation of communications infrastructure/customer base Value Services Value Services Business Business Global Global(2) Personal Services Personal Services Services Services Services Services (Mobile / Fixed-line) (Mobile / Fixed-line) (1)
  • Overview of New Segments 23Current New Business activities Sales ratioNote Personal Provision of communications services Services for households and individuals 71%Mobile Provision of content and Value settlement services Services for households and individuals 4% Provision of communications Business and solution/cloud services Services for companies 16% Fixed -line Provision of communications Global and solution/cloud services Services for companies and individuals overseas 5% Communications facility construction as well as Other Other maintenance, call centers, R&D, etc. 4%Note: Calculated based on the simple sum of the sales for each segment =100%.
  • Outlook for FY2013.3 by Segment 24 Personal Revenues Down, Value Revenues UP, Services Income UP (Billions of yen) Services Income UP (Billions of yen) FY2012.3 FY2013.3(E) FY2012.3 FY2013.3(E) yoy yoyOperating revenues 2,799.8 2,760.0 -1.4% Operating revenues 136.4 164.0 +20.2%Operating income 348.2 370.0 +6.3% Operating income 44.5 45.0 +1.1% Operating margin 12.4% 13.4% - Operating margin 32.6% 27.4% -EBITDA 714.1 767.0 +7.4% EBITDA 51.2 57.0 +11.4% EBITDA margin 25.5% 27.8% - EBITDA margin 37.5% 34.8% - Business Revenues Down, Global Revenues UP, Services Income Down(Billions of yen) Services Income UP (Billions of yen) FY2012.3 FY2013.3(E) FY2012.3 FY2013.3(E) yoy yoyOperating revenues 636.7 630.0 -1.1% Operating revenues 171.6 195.0 +13.6%Operating income 74.7 71.0 -4.9% Operating income 4.1 6.0 +45.0% Operating margin 11.7% 11.3% - Operating margin 2.4% 3.1% -EBITDA 122.8 122.0 -0.7% EBITDA 13.6 19.0 +39.9% EBITDA margin 19.3% 19.4% - EBITDA margin 7.9% 9.7% -* The figures for FY2012.3 presented here have been adjusted in line with the change in segments from FY2013.3.* From FY2013.3 (E), amortization of goodwill is included in the calculation of EBITDA .
  • (Ref.) Results Forecast Based on Previous Segment 25(Ref.) (Ref.) Increase in operating income for first time in four years Increase in operating income for first time in four years Mobile Mobile ((¥419.2B --> ¥432.0B) ¥419.2B --> ¥432.0B) Business Business(Ref.) (Ref.) Third consecutive year of increases in revenues and Third consecutive year of increases in revenues and Fixed-line Fixed-line income. On a non-consolidated basis, KDDI switches income. On a non-consolidated basis, KDDI switches Business Business to gain in revenues, following decline in previous year. to gain in revenues, following decline in previous year. Mobile Revenues Down, Fixed-line Revenues UP, Business Income UP (Billions of yen) Business Income UP (Billions of yen) FY2012.3 FY2013.3(E) FY2012.3 FY2013.3(E) yoy yoyOperating revenues 2,727.0 2,685.0 -1.5% Operating revenues 915.5 950.0 +3.8%Operating income 419.2 432.0 +3.1% Operating income 53.4 60.0 +12.3% Operating margin 15.4% 16.1% - Operating margin 5.8% 6.3% -
  • Personal Services Segment 26 Operating Revenues (Billions of yen) Operational Strategies and Focus KPI Increase competitiveness 2,799.8 2,760.03, 200. 0 by advancing the 3M strategy -Growth in no. of new au subscriptions -1.4% Advancing and households utilizing au Smartvalue the 3M -Reduce au churn rate Strategy 0. 0 FY2012.3 FY2013.3(E) -Reverse decline in au ARPU Focus KPI FY2012.3 FY2013.3(E) Change Operating Income (Billions of yen) Utilizing au Smartvalue au subscriptions 0.66M 3.10M +2.44M 370.0 430. 0 348.2 Utilizing au Smartvalue Households* 0.44M 1.55M +1.11M +6.3% au churn rate 0.62% 0.61% -0.01% 0. 0 au ARPU ¥4,530 ¥4,160 -¥370 FY2012.3 FY2013.3(E) *Total for KDDI Group companies and fixed-line allied companies
  • Advancing Cross-Selling Initiatives 27 Cross-sell to both customer bases, with au Smartvalue as the hook Cross-selling FTTH Approx. CATV Approx. 16M households* 10M households* Linked au acquisitions through Linked FTTH/CATV acquisitions utilization of FTTH/CATV through utilization of customer base au customer base*As of March 31 2012.
  • Expansion of Cross-Selling Areas 28 Expanding au Smartvalue broadband circuits to nationwide FTTH/CATV Sep. 2011 Mar. 2012 FTTH household FTTH/CATV household coverage ratio coverage ratio Approx. 40% 73% au HIKARI commuf@ (CTC) au HIKARI commuf@ eo HIKARI (CTC) (K-Opticom) au HIKARI Chura au HIKARI Chura Allied CATV companies*Household coverage ratio in detached house provision area.
  • Value Services Segment 29 Operating Revenues (Billions of yen) Operational Strategies and Focus KPI200. 0 Increase au Smart Pass members 164.0 136.4 and expand value revenues +20.2% -Achieving a high level for 0. 0 Advancing the au Smart Pass subscription rate FY2012.3 FY2013.3(E) the 3M -Ongoing introduction of attractive content Strategy -Multiple device development Operating Income (Billions of yen) 52. 0 45.0 Focus KPI FY2012.3 FY2013.3(E) Change 44.5 Value ARPU ¥260 ¥280 +¥20 +1.1% au Smart Pass 0.56M 5.00M +4.44M members 0. 0 FY2012.3 FY2013.3(E)
  • Moving toward maximization of value ARPU / Revenues 30 Enhancement and up-selling of entertainment services linked to au Smart Pass Unlimited Unlimited listening! watching! …! MUSIC VIDEO and more Ongoing introduction of up up up attractive content -sell -sell -sell au Smart Pass Multiple device development ¥390/month PC TV Tablet Smartphone
  • New ARPU in the 3M Period 31 After “game change,” Total ARPU = au ARPU + Value ARPU Aim to reverse decline in au ARPU by March 31, 2013.3 New ARPU (full-year comparison) Full-year average yoy Total ARPU ▲¥350 (▲7.3%)(yen) au ARPU ▲¥370 (▲8.2%) au ARPU (before discount) +¥70 (+1.5%) 4,790 4,440 Amount of discount applied ▲¥440 (-) 260 280 Value ARPU +¥20 (+7.7%) 260 280 【Total ARPU】 au ARPU + Value ARPU 4,760 4,530 4,830 4,160 【au ARPU (after application of discount)】 -au ARPU (before application of discount) -Amount of discount applied* -230 【Value ARPU】 -670 FY2012.3 FY2013.3(E) *Amount of discount applied: Maitsuki Discount (monthly discount), au SmartvalueOn left for each period: applicable discount amount is presented separately *The definition of ARPU is provided on slide 46.On right for each period: applicable discount amount is included.
  • 3M Strategy Roadmap 32 From summer 2012, transition to phase of further expansion in 3M services Step1 Step2 Step3 Start of the Expansion to multiple Toward a more-connected, Smart Passport concept devices, multiple uses multiple use world January 2012 announcement Summer 2012 au Smartvalue Multi-use au Smart Pass ..... Unlimited services and more… Increasing range of Multi-device compatible devices Strengthening cross-sell capabilities Start of LTE Bolstering Wi-Fi SpotsMulti-network Strengthening WiMAX Expanding FTTH area
  • Business Services Segment 33 Operating Revenues (Billions of yen) Operational Strategies and Focus KPI Implement “game change” 636.7750. 0 630.0 in corporate market through 3M Strategy -1.1% 【For large companies】 0. 0 -Move ahead with integrated proposals for mobile/voice/intranet + solutions. FY2012.3 FY2013.3(E) Advancing the 3M 【For small and medium-sized companies】 Strategy -With 3M proposals, make inroads in the Operating Income (Billions of yen) undeveloped small and medium-sized company market 74.7 71.0 85. 0 Focus KPI FY2012.3 FY2013.3(E) Change -4.9% Smartphone 0.22M 0.45M +0.23M sales (units) 0. 0 FY2012.3 FY2013.3(E)
  • Overview of Business Services Segment 34 No. of companies in Japan Large Company Market Usage rate for KDDI services Approx. 70% ??? Large -Aim to expand sales to existing ??? Expanding companies customers through cross-selling Intranet sales to 13,000 of existing services existing Mobile customers -Strengthening cloud services Voice No. of employees: 300 Small and Medium-sized Company Market Usage rate for KDDI services Approx. 30% Small and Expanding no. of customers medium-size -Aim to expand number of customers companies (increase share) with “Smartvalue for Business,“ which was launched Voice Mobile 1.8 million in April. users usersSource: Ministry of Internal Affairs and Communications, Statistics Bureau, [2009 Economic Census]
  • Global Services Segment 35 Operating Revenues (Billions of yen) Operational Strategies Establish operational foundation 195.0230. 0 171.6 for new growth +13.6% -Implement reforms to facilitate integrated services built around 0. 0 Global ICT data centers. FY2012.3 FY2013.3(E) -Full-scale entry into markets not directly related to Japan Operating Income (Billions of yen) -Entry into data relay operations. Carrier business -Bring in traffic from overseas 6.0 mobile companies. 4.1 Global -Developing new businesses +45.0% consumer in emerging economies. 0. 0 FY2012.3 FY2013.3(E)
  • Overview of Global Services Segment 36 98 bases in 59 cities and 26 regions around the world Global ICT Carrier Business Data Provision of traffic relay servicecenter (22 sites in 14cities and 11 regions) to more than 600 communications companies around the world No. of sites doubled Floor space tripled In 4 years in 4 years 22 0.22M ㎡ Global Consumer 10 0.07M ㎡ Develop business providing service 3/’08 Current 3/’08 Current to immigrants in the U.S. NW SI
  • Advancing Multiple Networks 37 Bolstering Wi-Fi Spots Advancing 3G Introduction of EV-DO Advanced Completing Capacity: Effective speed: Surpassing distribution of approx. average approx. 100k spots 350k units 1.5 times two times Toward further expansion Nationwide rollout by June 30, 2012 Expanding WiMAX Area Expanding FTTH/CATV Area Major cities FTTH/CATV household nationwide 95% coverage ratio Note1 73%(Actual population coverage ratio) Toward further expansion 【Data offload rateNote2 (year-end)】 【Consolidated CAPEX】 From current level of 20% to 50% Hold down to level of ¥450.0B at March 31, 2013 per yearNote1: Including au Smartvalue allied companies Note2: Data offloading to Wi-Fi+WiMAX ÷ smartphone data traffic volume
  • Introduction of LTE 38 Develop 2GHz band addition to 800MHz band and 1.5GHz band. Plans now call for service to commence prior to the originally scheduled start in Dec. 2012. Area Coverage Data Transmission Speed Down link: 75Mbps (Max.)Actual populationcoverage ratio 96% Frequency Bands(March 2013) 800MHz band (area base band) 1.5GHz band High-quality LTE 2GHz band Simultaneous CAPEX (Base Station Basis) Forecast for FY2013.3 nationwide rollout Approx. ¥80.0B scale
  • Affiliated Companies (1) UQ Communications Inc. 39 Subscriptions Area Expansion (Million subs) Increasing Focus on facilities for railroads, subways4 smoothly 3.40 JR East, Toei Subway, Tokyo Metro, Tokyo Tokyu Dentetsu, Tokyo Monorail, metropolitan Yokohama Municipal Subway, area Sagami Railway, others 2.27 Chubu region Meitetsu, others Kyushu Fukuoka City Subway, others Outlook for FY2013.3 0.81 【Initial targets】 On track 0.15 Achieve single-year profitability to achieve0 in fourth year after start of targets 3/10 3/11 3/12 3/13 (E) operations (Feb. 2009)
  • Affiliated Companies (2) J:COM 40 Steady Progress in Alliance with J:COM Switching J:COM’s Backbone NW Cross-selling Promotion to KDDI’s Integrated IP Core NWRapid growth after start of application --> KDDI increase in sales acceptance for au Smartvalue in 4Q --> J:COM reduction of cost 13,000 Base Base Increase station station more than Base TV Base station Telephone station Six times Internet Base Base station station *Promoting au through J:COM sales route Integrated IP core network 2Q 3Q 4Q 1Q 2Q 3Q 4Q Plans call for transition to be completed in 2013 FY2011.3 FY2012.3
  • 41 Financial Results for FY2012.3 /1 Outlook for FY2013.3 Complete recovery of au momentum /2 Initial trends under 3M strategy3 Key Points in FY2013.34 Shareholder Return Appendix
  • Cash Flow Allocation Priority and Shareholder Return 42 1 CAPEX Aim for development of multi-NW and conduct efficient CAPEX 2 Investment, M&A Conduct necessary M&A for further growth strategy 3 Dividend Policy Steadily increasing consolidated payout ratio to 25%-30% range 4 Share Buyback Consider as a choice after judging cash flow status etc. Dividend per Share (yen) (26.0%) (27.5%) 17,000 Year-end Dividend (24.1%) 16,000 (27.2%) 14,000 Commemorative Dividend (22.0%) 13,000 Interim Dividend (21.5%) (22.4%)10,500 11,000 8,500 (20.8%) 9,500 8,500 (21.2%) 8,000 6,500 7,500 6,900 5,500 5,500 (16.8%) 5,000 ( − ) (17.5%) 3,600 3,500 4,500 1,000 8,500 1,790 2,095 1,000 7,500 6,500 2,400 4,500 5,000 5,500 5,500 895 1,200 2,400 3,500 895 895 1,200 FY2002.3 FY2004.3 FY2006.3 FY2008.3 FY2010.3 FY2012.3 FY2013.3 (E) (E)*( ) refers to payout ratio, which shows on non-consolidated basis until FY2006.3 and on a consolidated basis from FY2007.3. FY2002.3 posted net loss.*Figures for dividends per share in FY2013.3 (E) do not take stock split into account.
  • 43 Financial Results for FY2012.3 /1 Outlook for FY2013.3 Complete recovery of au momentum /2 Initial trends under 3M strategy3 Key Points in FY2013.34 Shareholder Return Appendix
  • Consolidated KPI in FY2013.3 44 Item Unit FY2012.3 FY2013.3(E) Change au subscriptions ‘000 35,109 37,210 +2,101Consolidated au handset sales ‘000 13,690 11,800 -1,890 (Mobile) Smartphone sales ‘000 5,630 8,000 +2,370 au handset shipments ‘000 13,880 11,500 -2,380 FTTH subscriptionsNote1 ‘000 2,268 2,900 +632 Metal-plus subscriptions ‘000 2,189 1,750 -439Consolidated Cable-plus phone subscriptions ‘000 2,074 2,700 +626 (Fixed-line) CATV subscriptionsNote2 ‘000 1,142 1,200 +58 Fixed-access lines ‘000 7,118 8,000 +882 − Data offload rateNote3 % 20 50 +30Note1: Total for KDDI Group’s FTTH services (au HIKARI, au HIKARI Chura, and Commuf@) Note2: Total for JCNNote3: The definition is provided on slide 37.
  • Segment KPI in FY2013.3 (1) 45 Item Unit FY2012.3 FY2013.3(E) Change au subscriptions ‘000 30,084 31,680 +1,596 au churn rate % 0.62 0.61 -0.01 Total ARPU yen 4,790 4,440 -350 (au ARPU + Value ARPU) au ARPU yen 4,530 4,160 -370PersonalServices Value ARPU yen 260 280 +20 & Value au Smart Pass members ‘000 560 5,000 +4,440Services au handset sales ‘000 12,220 10,400 -1,820 Smartphone sales ‘000 5,410 7,550 +2,140 au handset shipments ‘000 12,450 10,100 -2,350 au sales commissions yen 24,000 24,000 ±0
  • Segment KPI in FY2013.3 (2) 46 Item Unit FY2012.3 FY2013.3(E) Change FTTH subscriptionsNote1 ‘000 2,221 2,850 +629 Metal-plus subscriptions ‘000 1,973 1,550 -423 Cable-plus phone subscriptions ‘000 2,074 2,700 +626 Personal Services CATV subscriptionsNote2 ‘000 1,142 1,200 +58 & Value Fixed access lines ‘000 6,856 7,750 +894 Services 【Utilizing au Smartvalue】 ‘000 660 3,100 +2,440 au subscriptions 【Utilizing au Smartvalue】 ‘000 440 1,550 +1,110 HouseholdsNote3 Business Services Smartphone sales ‘000 220 450 +230【Definition of ARPU】 Note1 and Note2: Definition is the same *Total ARPU: au ARPU + Value ARPU *au ARPU(au communications ARPU): as on slide 44. Note3: Total for KDDI Group companies and Voice ARPU + Data ARPU *Value ARPU: Value Services Segment revenues of “in-house and fixed-line allied companies cooperative services + settlement commissions + advertising” ÷ Personal Services Segment’s no. of au subscriptions (average no. of subscriptions for the period, excluding modules)
  • Subscriptions/Net Additions 47 Net Adds (au+UQ WiMAX) <Subscriptions> (‘000 subs) (‘000 subs) FY2011.3 FY2012.3 yoy 3,5694000 au Total 32,999 35,109 2,110 of module-type 1,494 2,037 543 1,783 WIN(EV-DO) 29,633 33,539 3,906 1X 3,221 1,519 -1,702 cdmaOne 146 51 -94 0 UQ WiMAX 807 2,266 1,459 FY2011.3 FY2012.3 au + UQ WiMAX 33,806 37,375 3,569Net Adds (Fixed access lines) <Subscriptions> (‘000 subs) (‘000 subs) FY2011.3 FY2012.3 yoy1100 FTTH 1,901 2,268 367 711 Metal-plus 2,543 2,189 -355 463 Cable-plus phone (注1) 1,341 2,074 733 CATV (注2) 1,088 1,142 55 0 Fixed access lines (注3) 6,407 7,118 711 Note1: Includes wholesale to “J:COM PHONE Plus” from FY2012.3. FY2011.3 FY2012.3 Note2: CATV subs include number of households with at least one contract of broadcasting, internet, or telephone. Note3: Fixed access lines are FTTH, direct-revenue telephony (Metal-plus, Cable-plus phone), and CATV subs. The number excludes crossover subs.
  • au ARPU 48 (min.) Total ARPU (yen) 160 152 154 154 157 151 151 149 144 6,000 140 5,160 5,100 MOU 4,980 4,530 120 4,640 4,590 4,470 4,340 100 2,860 4,000 2,790 2,660 2,240 2,130 1,960 1,760 Total 2,190 80 60 Voice 2,000 40 2,300 2,310 2,320 2,340 2,400 2,460 2,510 2,580 20 Data 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3 Full-year FY2011.3 FY2012.3 FY2012.3 - FY2011.3 Total ARPU 4,940円 4,510円 ▲¥430 (▲8.7%) of Voice 2,620円 2,020円 ▲¥600(▲22.9%) of Data 2,320円 2,490円 +¥170 (+7.3%)Note: The portion of FY2011.3 4Q and FY2012.3 4Q are negative due to the settlement of access charges among carriers.
  • au Handset Sales/au Sales Commissions 49 au Handset Sales Average Commissions / Unit (‘000 units) (yen) 3,710 3,240 3,310 3,380 3,290 27,000 28,000 24,000 24,000 24,000 25,0002,810 2,830 2,700 23,000 22,000 2,090 1,630 1,250 390 610 660 20 70 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3 Smartphone FY2011.3 FY2012.3 FY2011.3 FY2012.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Total sales commissions (Billions of yen) 76.0 80.0 65.0 78.0 299.0 78.0 76.0 76.0 94.0 323.0 27,000 28,000 24,000 24,000 26,000 24,000 22,000 23,000 25,000 24,000 Average commissions / unit (yen) 2,810 2,830 2,700 3,240 11,570 3,310 3,380 3,290 3,710 13,690 Number of units sold (‘000 units) Of smartphone (‘000 units) 20 70 390 610 1,090 660 1,250 1,630 2,090 5,630
  • Simple Course Number of Subs and Take-up Ratio Note 50 (Million subs) 32 27.85 26.30 24.81 23.13 21.06 19.03 17.22 14.97 12.52 9.86 8.01 5.96 4.27 0 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 6/11 9/11 12/11 3/12Take-up Ratio 14% 20% 27% 33% 41% 49% 56% 62% 68% 73% 78% 82% 85% Note: Module-type and pre-paid contract are excluded from take-up ratio calculation.
  • FTTH 51 FTTH revenues (Billions of yen) FTTH Net Additions (‘000 subs) 150 au HIKARI Chura 12435. 0 32.7 Commuf@ (CTC) 1 31.0 au HIKARI 29.7 25 104 100 28.4 1 97 27.1 100 92 87 2 18 83 2 26.2 1 2 16 2 15 23.9 21 68 22.7 1 22 17 21 50 99 85 80 83 69 63 64 46 99.9 121.8 388 367 010. 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2011.3 FY2012.3 FY2011.3 FY2012.3
  • Capital Expenditures 52 Mobile CAPEX Common Equip. etc. Fixed-line CAPEX LTE(Billions of yen) New 800MHz (Billions of yen) Others 2GHz 400.0 150.0 FTTH 300.0 103.8 100.0 165.7 69.5 200.0 60.0 190.8 50.0 34.0 100.0 93.1 43.1 46.1 44.0 0.0 0.0 FY2011.3 FY2012.3 11.4 FY2011.3 FY2012.3 (Billions of yen) FY2011.3 FY2012.3 FY2013.3(E) yoy yoy CAPEX (Cash basis) Consolidated 443.7 421.6 -5.0% 450.0 +6.7% Mobile 338.7 304.2 -10.2% - - Fixed-line 103.1 115.6 +12.1% - -
  • Free Cash Flow 53(Billions of yen) 1,000.0 1, 000 800.0 800 600.0 600 400.0 296.5 276.8 241.4 400 FCF 200.0 139.6 150.0 200 CF from operating activities 0.0 0 Capex -200.0 -12.5 -63.2 - 200 Other CF (investment etc.) -400.0 -184.4 - 400 (equity participation etc.) -600.0 - 600 EBITDA -800.0 - 800 4 Buildings buy-back related etc. Equity participation in J:COM etc. -1,000.0 - 1, 000 FY2006.3 FY2007.3 FY2008.3 FY2009.3 FY2010.3 FY2011.3 FY2012.3 FY2013.3 (E)
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