KDDI(US:KDDIY)2021-01-30 02:30Financial Data and Key Metrics Changes - Consolidated operating revenues for the first three quarters were JPY 3,923.8 billion, up 0.5% year-on-year [6] - Operating income was JPY 871 billion, up 3.2% year-on-year [6] - Cumulative consolidated operating income increased by JPY 27.2 billion, driven by growth in Life Design domain and Energy business [7][8] Business Line Data and Key Metrics Changes - Life Design domain sales for three quarters were JPY 940 billion, with a progress ratio of 72.9% towards the full-year target [8] - Business Services segment operating revenues for three quarters were JPY 722 billion, with a progress ratio of 76.0% [9] - Personal Services segment total ARPA revenues for three quarters were JPY 1,721.5 billion, with a progress ratio of 75.5% [9] Market Data and Key Metrics Changes - The number of 5G base stations is expected to reach about 50,000 by March 2022, covering 90% of the population nationwide [14] - Sales of 5G devices exceeded 1.2 million units in December [15] - The number of au PAY cardholders reached 6.1 million, indicating strong growth in cashless payment systems [20] Company Strategy and Development Direction - The company aims to promote 5G and growth fields to drive business growth [25] - New pricing plans for 5G services were introduced to cater to diverse customer needs [10][11] - The company is focusing on expanding its IoT connections and partnerships, particularly in the automotive sector [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of price cuts on revenues but emphasized the importance of sustainable growth and customer acquisition [28][29] - The company expects to achieve a JPY 100 billion cost reduction in the next fiscal year, contributing to performance [29][60] - Management remains optimistic about the growth potential in Life Design and Business Services despite some anticipated slowdowns due to COVID-19 [53][54] Other Important Information - The company is actively promoting digital transformation and regional revitalization projects [24] - Initiatives in non-financial areas include a new HR system to enhance employee productivity and work styles [23] Q&A Session Summary Question: Impact of price cuts on revenue and cost reduction areas - Management acknowledged that price cuts would have a revenue impact but emphasized the focus on sustainable growth and cost reduction initiatives [28][29] Question: Changes in growth initiatives in recent months - Management indicated that Life Design and Business Services have shown steady growth, with ongoing efforts to enhance service offerings [35][38] Question: Specific businesses driving profit increases - Strong performance in mobile services and a subsidiary focused on small- and medium-sized enterprises contributed to profit growth [44] Question: Expectations for subscriber movement between brands - Management expects some customers to move from au to UQ and Poco, with attractive pricing and services [48] Question: Cost reduction progress towards JPY 100 billion target - Management confirmed that most of the cost reductions would manifest in the next business year, with some realized this year [60][61] Question: Energy business profit margin outlook - Management explained the complexities of the energy market and efforts to minimize risks associated with wholesale power market fluctuations [66]