NTT(US:NTTYY)2022-05-15 14:54Financial Data and Key Metrics Changes - Operating revenue increased by ¥979.7 billion year-on-year, reaching ¥13,136.2 billion, attributed to growth in the Global Solutions business and electricity revenue [7][12] - Operating income rose by ¥60.4 billion year-on-year to ¥1,829 billion, driven by increased revenue and cost reductions [8][9] - Profit decreased by ¥32 billion to ¥1,213.1 billion, despite the increase in operating income [9] - Overseas operating income margin improved by 0.9 points to 7.2%, achieving the medium-term financial target of 7% one year ahead of schedule [9] Business Segment Data and Key Metrics Changes - Integrated ICT business segment saw an increase in both operating revenue and income year-on-year, despite price reductions in consumer communications [10] - Regional communications business experienced a drop in both operating revenue and income due to increased costs and delays in cost reduction measures [11] - Global Solutions business segment reported year-on-year increases in both operating revenue and income, driven by robust demand for digital services [12] - Other segment's operating revenue and income increased due to higher electricity business revenue reflecting rising fuel prices [12] Market Data and Key Metrics Changes - The impact of foreign currency fluctuations was noted as ¥280 billion [8] - Operating revenue is expected to decrease year-on-year in fiscal year 2023, while operating income and profit are forecasted to increase [13][14] Company Strategy and Development Direction - The new medium-term management strategy, titled "New Value Creation and Sustainability 2027, powered by ION," aims to innovate for a sustainable future and increase investment in growth areas by ¥8 trillion over five years [20][21] - The company plans to increase EBITDA by 20% to approximately ¥4 trillion by fiscal year 2027 [21] - Key initiatives include enhancing customer experience, improving employee experience, and promoting a circular economy [22][28] Management's Comments on Operating Environment and Future Outlook - Management expressed a commitment to achieving cash generation capabilities by fiscal year 2027 to support new growth areas [103] - The focus will be on maintaining a balance between investment and shareholder returns, with a robust shareholder return program planned [51][41] Other Important Information - The company announced a dividend increase to ¥125 per share for fiscal year 2023 and a 25:1 stock split effective July 1st [42] - The establishment of new organizational structures to enhance R&D and marketing capabilities was also discussed [43] Q&A Session Summary Question: EPS growth and share buyback assumptions - Management indicated that the EPS target of ¥370 for the fiscal year assumes some level of share buyback [48][49] Question: Investment in new business areas - Management acknowledged the need for upfront investments in new business areas and emphasized careful planning to ensure returns [55][56] Question: Interest rate impacts on data center investments - Management confirmed that rising interest rates would be considered in future investments, with a focus on recouping costs through customer payments [59][60] Question: Medium-term financial targets and indicators - Management reiterated that while EPS is not a primary indicator, they aim to maintain similar growth levels as in the past [67][68] Question: Clarification on capital expenditures - Management stated that while specific breakdowns of capital versus equity investments are not available, they aim to maintain trends in capital investment [70][72]