FY2020/1Q
Results Presentation
August 3, 2020
- FY2020/1Q Results Highlights
- FY2020 Guidance and Principal Actions
1
FY2020/1Q Results Highlights
(Billions of yen)
IFRS
FY2019/1Q | FY2020/1Q | Changes | Changes | |
(1) | (2) | (2) - (1) | (%) | |
Operating revenues | 1,159.3 | 1,098.2 | ‐61.1 | ‐5.3% |
Operating profit | 278.7 | 280.5 | +1.8 | +0.7% |
Profit attributable to shareholders | 192.3 | 195.3 | +3.0 | +1.5% |
of NTT DOCOMO, INC. | ||||
Adjusted free cash flow | 174.8 | ‐54.0 | ‐228.8 | ー |
Capital expenditures | 97.9 | 90.8 | ‐7.1 | ‐7.2% |
◆ Consolidated financial statements in this document are unaudited.
◆ Adjusted free cash flow is calculated excluding the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with original maturities of longer than three months.
2
Results by Segment
IFRS | ||||
FY2019/1Q | FY2020/1Q | |||
Changes | ||||
(Billions of yen) | (1) | (2) | (2) -(1) | |
Telecommunications | Operating revenues | 945.1 | 851.8 | ‐93.3 |
business | Operating profit | 231.2 | 219.4 | ‐11.8 |
Smart life | Operating revenues | 111.3 | 145.0 | +33.8 |
business | Operating profit | 18.8 | 28.3 | +9.5 |
Other | Operating revenues | 109.5 | 110.4 | +0.9 |
businesses | Operating profit | 28.7 | 32.8 | +4.2 |
Smart life | Operating revenues | 220.8 | 255.5 | +34.7 |
business and | 47.5 | 61.2 | +13.6 | |
Other businesses | Operating profit |
- Certain services that had been included in Smart life business were reclassified to Other businesses to reflect the change in its internal organizational structure effective as of July 1,
2019. In connection with this realignment, segment information for the fiscal year ended Mar. 31, 2020 has been restated to conform to the presentation for the fiscal year ending | 3 |
March 31, 2021. |
Key Factors behind Changes
in Operating Profit
IFRS
(Billions of yen)
Mobile | Other | Selling | Selling | Other | |
operating | expenses: | operating | |||
communications | revenues: | revenues: | expenses: | ||
services revenues: | Up 23.2 | Down 77.7 | Down 84.9 | Up 8.9 | 280.5 |
278.7 Down 18.7 | Network‐related | ||||
expenses | |||||
Optical‐fiber broadband | (including optical‐ | ||||
fiber broadband | |||||
service revenues, etc. : | service‐related | ||||
Up 12.0 | expenses): | ||||
Up 13.0 | |||||
Selling revenues | |||||
and expenses: | |||||
Up 7.2 | |||||
Operating revenues | Operating expenses | ||||
-61.1 | -63.0 |
FY19/1Q | ||||||
FY20/1Q | ||||||
◆ Selling expenses represent the sum of cost of equipment sold and commissions to agent resellers. | 4 |
◆ Network‐related expenses represent the sum of depreciation/amortization, loss on disposal of property, plant and equipment and intangible assets, and communication network charges. |
"d POINT CLUB"
"d POINT CLUB" members | "d POINTs" used |
(Million)
Topped 76 million | (Billion points) |
71.31
76.57
Up 22%
57.1
Up 7%
Up 24% | "d POINT CARD" |
36.16 | registrants |
44.72 | |
FY19/1QFY20/1Q
46.9
Up 55%
26.0
FY19/1Q
Points used
at
partners'
stores, etc.
40.3
FY20/1Q
- "d POINT CARD" registrants indicate the no. of users who can earn and use "d POINTs" at participating stores by registering their personal information.
5
Telecommunications Business
Operational Performance (1)
Mobile telecommunications | Churn rate |
service subscriptions | |
(Million subs)
78.9080.61
Up 2% | 0.58% | |
0.45% | 0.42% | |
Handset churn rate: |
0.34%
FY19/1Q FY20/1Q
◆ Handset churn rate indicates the combined churn rate for smartphones and feature phones. | 6 |
Telecommunications Business
Operational Performance (2)
Total smartphone/ | "docomo Hikari" |
tablet users | optical‐fiber broadband subs |
(Million) | (Million subs) |
40.87 | 42.15 | 6.66 |
5.99
Up 3%
Up 11%
FY19/1Q. | FY20/1Q. | FY19/1Q. | FY20/1Q. |
7
ARPU
モバイルARPU | ドコモ光ARPU | 割引適⽤額 | |||
Mobile | docomo Hikari ARPU | Impact of discounts | |||
(Yen)
4,770 | 4,740 | 4,710 | 4,760 | 4,800 |
530 | ||||
550 | 570 | 580 | 590 | |
5,250 | 5,140 | 4,970 | 4,890 | 4,820 |
(1,010) | (950) | (830) | (710) | (610) |
FY19/1Q. | 9/. | FY19/3Q. | 19.4Q | FY20/1Q. |
FY1 2Q | FY1 /4 |
◆ For an explanation of ARPU, please see the Appendix. | 8 |
◆ Mobile ARPU and docomo Hikari ARPU exclude the impact of discounts. | |
◆ The impact of discounts include those from "Monthly Support," "docomo with" and "docomo Hikari set discount." |
Smart Life Business & Other Businesses:
Operating Profit
(Billions of yen)
Principal services
61.2
47.5
Up 29%
Smart life business
Content/Lifestyle Finance/Payment
Other businesses
475 | Support services for |
customers' peace of mind |
Enterprise solutions
FY19/1QFY20/1Q
9
Finance/Payment Services (1)
Finance/Payment | "d CARD" members |
Transactions handled | Topped 13 million |
(Billions of yen) | (Million members) |
1,500.0
Up 32% | 11.71 | 13.18 |
1,130.0 | Up 13% | |
Up 26% | d CARD | |
transactions | ||
910.0 | 1,140.0 | Up 25% d CARD GOLD |
5.62 | 7.04 |
FY19/1Q | FY20/1Q | FY19/1Q | FY20/1Q |
- The amount of transactions handled represent the cumulative amount for FY20/1Q, which includes the transactions handled with "d CARD", "iD," "d Payment," direct carrier billing and "DOCOMO Mobile Payment Service," etc.
◆ | The following changes have been made in association with the integration of "d CARD mini" into "d Payment" service on Nov. 19, 2019: (i) Transactions handled with "d CARD mini" were excluded from the amount of | 10 |
transactions handled with "d CARD" and recorded as "d Payment" transactions; and (ii) "d CARD mini" members were excluded from "d CARD" members.
Finance/Payment Services (2)
Transactions processed | "d Payment" users | Locations where payment/ |
with "d Payment" | point service can be used | |
(Billions of yen) | (Millions) | (Million locations) |
Topped 27 million
153.0 | 1.94 |
27.27
1.11
1.7‐fold
14.96
54.0
1.8‐fold
2.8‐fold
FY19/1Q | FY20/1Q | ||||||||||||
FY19/1Q | FY19/1Q | ||||||||||||
FY20/1Q | FY20/1Q | ||||||||||||
◆ The amount of transactions processed with "d Payment" represents the | of payments | ||||||||||||
with "d Payment" (code and online payment) and "d | |||||||||||||
cumulative amount | |||||||||||||
Payment (iD)". | |||||||||||||
made in FY20/1Q | |||||||||||||
◆ The number of "d Payment" users represents the sum of total number of "d Payment" app downloads and "d Payment (iD)" members. | 11 | ||||||||||||
◆ Locations where payment/point service can be used represent the combined no. of locations where "d POINT," "iD" and "d Payment" (code and online payment) services can be used. |
Expansion of | partners |
No. of | partners increased 1.4‐fold |
Expansion of "d POINT" participating stores
1,312
925 | Developed new photo sales service |
that utilizes image recognition engine |
Contributed to advancement of fishing industry with ICT‐based new mackerel farming model
FY19/1Q | FY20/1Q | |||
12 | ||||
◆ No. of "+d" partners: The no. of partners that have jointly created new value by integrating DOCOMO's business assets with their own assets. |
Medium‐Term Strategy "Declaration beyond": Actions Taken (1)
Value & excitement to customers
Declaration 1
Market
leader
Declaration 2
Style
innovation
Declaration 3
Peace of mind and comfort support
Launch of "Disney+" official video streaming service
Exclusive provider* in Japan. Also made available bundle discount with DOCOMO's "Giga" plans and limited‐edition "d POINT CARD". (Launched Jun. 11, 2020) *: As of Aug.3, 2020.
Support of "Mainapoint" on "d Payment" and "d CARD"
Award of 500 "d POINTS" to "d CARD" users applying for "Mainapoint." (Announced Jun. 30, 2020). Execution of "d Payment" campaign offering up to 2,500 points (Announced Jul. 17, 2020)
Launched new plan of "docomo Hikari" that offers transmission speeds of up to 10Gbps
Aim to expand the new experience brought about by large‐capacity communications. (Launched Apr. 1, 2020*). *: Service coverage, which is currently limited to certain
geographies, is planned to be broadened over time.
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Medium‐Term Strategy "Declaration beyond": Actions Taken (2)
Value co‐creation with partners
Declaration 4
Industry creation
Further enrichment of "docomo Open Innovation Cloud (dOIC)"
Declaration 5
Solution
co‐creation
Declaration 6
Partner business
expansion
Opened three new locations (Osaka, Kanagawa and Oita) in addition to Tokyo (Launched May 29, 2020). Launched "Cloud Direct" service (Launched June 30, 2020).
Launched "d Healthcare for Biz" health and productivity management support service for enterprises
Promote enterprises' health and productivity management leveraging smartphone apps and AI (Launched Apr. 13, 2020).
Launched "DOCOMO Image Recognition Platform"
Started providing a platform for AI‐based image recognition solution on "docomo Open Innovation Cloud." Also used for "Easy Pass powered by SAFR" (Launched May 29, 2020).
14
Response to July 2020 Torrential Rain
Responded swiftly to minimize impact on service
Established nationwide support structure
and mobilized companywide efforts for restoration activities
Emergency recovery of | Automatic rerouting using | ||||||||||||||||||||||
transmission lines | multi‐route transmission lines | ||||||||||||||||||||||
Main route | |||||||||||||||||||||||
︓ | 本ルート | ||||||||||||||||||||||
Alternative route | |||||||||||||||||||||||
︓迂回ルート | |||||||||||||||||||||||
Coverage restoration through | Deployment of satellite |
satellite base stations | mobile base stations |
Implemented various support measures for
customers in disaster‐stricken areas
Provision of free‐of‐charge battery charging and Wi‐Fi services at shelters, etc., in stricken areas
Operation of "Disaster Data Unlimited Mode"
Operation of "disaster data unlimited mode"
Support measures provided through Aug. 31.
to over 1.4 million customers in areas applied with Disaster Relief Act (9 prefectures, 98 municipalities)
◆ No. of users applied with "disaster data unlimited mode" is as of Jul. 29. | 15 |
- FY2020/1Q Results Highlights
- FY2020 Guidance and Principal Actions
16
FY2020 Guidance
IFRS | ||||
(Billions of yen) | FY2019 | FY2020 | Changes | |
full year (1) | full year (2) | (2) - (1) | ||
Operating revenues | 4,651.3 | 4,570.0 | ‐81.3 |
Operating profit
854.7 880.0 +25.4
Smart life business & Other businesses | 148.1 | 160.0 | +11.9 |
Adjusted free cash flow
893.3 730.0 ‐163.3
Capital expenditure
572.8 570.0 ‐2.8
- Adjusted free cash flow is calculated excluding the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management
purposes with original maturities of longer than three months. | 17 |
FY2020 Guidance (2)
Aim for profit growth properly dealing with COVID‐19 impacts
・Decline in mobile communications services revenues resulting from | |||
Operating | DOWN | expanded customer return measures, e.g., "Gigaho/Gigalight" plans. | |
revenues | ・Significant drop in international roaming and equipment sales | ||
revenues due to COVID‐19. | |||
・Operating profit from Smart life and Other businesses projected to | |||
Operating | grow driven by Smart life business and enterprise solutions. | ||
UP | |||
profit | ・Reduction of sales‐related expenses and thorough cost efficiency | ||
improvement to offset decline in international roaming revenues | |||
caused by COVID‐19 and rise in COVID‐19 countermeasure expenses. | |||
Reinforce/ | ・ Concentrate resources on reinforcement of 5G business, and | ||
CAPEX | Improve | maintain annual CAPEX comparable to the level of last fiscal year by | |
efficiency | making more efficient use of expenditures for 3G/LTE, etc. | ||
18 |
FY2020 Principal Actions
Further reinforcement
of customer base
Full‐scale execution of a business foundation centered on our membership base
New value creation for the 5G era
Structural reform
underpinning the new era
- Further refine customers' experience at shopfront and online, and enhance the attractiveness of "d POINT" program.
- Compelling rate plans and early roll out of 5G coverage.
- Build strong customer touchpoints for members and advance digital marketing.
- Reinforce growth areas, e.g., finance/payment, marketing solutions, etc.
- Full‐scale deployment of new solutions through co‐creation with partners.
- Deliver new sensory services and experiences primarily through video.
- Improve efficiency of operational processes through DX and reallocate resources to growth areas.
- Streamline business operations by stepping up efforts for 3G subscriber migration.
19
Strategic Business Alliance with
Mercari/Merpay
Strengthen collaboration with strategic partner to further enhance attractiveness of "d POINT" and "d Payment"
Enable use of "d POINT" on "Mercari"
Enable use of "d Payment" and "Merpay" with a single code
Federation between one of Japan's largest marketplace and one of Japan's largest loyalty point membership club, "d POINT"
Over 2.00 million federations
×
◆ No. of member federations is as of Jul 27, 2020.
◆ Support of "d POINT" on "Mercari" started from Jun. 11, 2020.
◆ Payment using common QR code between "d Payment" and "Merpay" to start from early September, 2020. | 20 |
5G Subscriptions/Coverage
Making steady progress toward full‐year target
5G subscriptions | 5G coverage |
(Subs) | (Cities) |
Release of | 500 cities |
standard models 2.5 mil | including all government‐ |
designated cities |
5G service started in 47 prefectures
92 cities
0.15 mil
FY20/1Q | ・・・ | FY20 (target) | FY20/1Q | ・・・ | FY20 (target) |
21
5G Services
Expand initiatives for
delivery of 5G era services
Introduced 5G "multi‐streaming function"
on "Hikari TV for docomo"
Main view screen
Multi‐streaming
view screen
- Les Films du Cap ©BBC (c)ORF/Ali Schafler
- Igo & Shogi Channel (C)Hiroshi Kaneko
Accelerate joint initiative with
new partners
Creation of new experienced value
inside and outside stadiums and arenas
◆Agreement to explore cooperation in digital services for Hanshin Koshien Stadium and Hanshin Tigers ( Jun. 18)
- Conclusion of capital alliance agreement and official sponsor agreement with Kawasaki Brave Thunders (Jun. 29)
"Shintaikan Live CONNECT" | Future communication experience |
Southern All Stars Special Live 2020 | in 5G areas |
JR Takanawa Gateway Station
22
5G Solutions (1)
Solve social issues based on strong demand identified through 5G pre‐commercial service
Solution technologies
Others
AI
Video
IoT transmission
High‐resolution video transmission solution
Secure environment/High‐resolution video transmission
■ Remote education using |
multi‐angle video |
■ Remote medical treatment support |
Robotics
Industry sectors
Others
using high‐resolution video |
Virtual space
(XR)Medical
Manufacturing/ IT/services construction
Municipalities/
Transport/ education, tourism infrastructure
Media
- Analysis result of 5G pre‐commercial service use cases provided from Sept. 2019
Virtual space/XR solutions
Remote operational support suited for remote‐style society
■ Remote tourism support using AR ■ Joint designing of industrial products
23
5G Solutions (2)
Expand high‐security, low‐latency solutions
to deliver "5G x DX"
Launch of "Cloud Direct"
High security | Low latency |
Installed inside | Shortened transmission distance |
carrier network | (Shortest path routing) |
【Examples of compatible solutions】
High‐resolution
video transmission
Smart‐telecaster
Carrier network |
Zao‐SH
Streamways
Virtual space/XR
AceReal | Virtual Design |
for docomo | Atelier |
24
Response to COVID‐19 (1)
Social contribution through mobile solutions and data utilization business
Telework and remote education
realization support
Free provision of products and services that help realize telework and remote education Applications from over 600 companies
in a short period of time
"Mobile Spatial Statistics®"
population map
Limited‐time offer of
real‐time
demographics data
for free
docomo map navi "Congestion Map"
Limited‐time offer of
"Congestion Map" for free
25
Response to COVID‐19 (2)
Support measures for users under 25
years old
Encouragement of web procedures
and shop visit reservation
Measures for preventing spread of infections upon customers' shop visit
Provision of "docomo Smartphone
classes" online version
Provision of population dynamics
analysis using
"Mobile Spatial Statistics®"
Free‐of‐charge provision of "Additional 1GB Option" and "Speed Mode" for up to Ongoing 50GB to users under 25 years old during the period between April and August
2020.
Encouraging use of web channel for various procedures and shop visit reservation Ongoing to avoid "3Cs" (Closed spaces, Crowded places, Close‐contact settings).
Customer attendance with adequate distance between seats, obliging shop staff Ongoing to wear face coverings, installation of virus protection shields on customer
counters, provision of protective goggles for shop staff, etc.
Ongoing Online version of "docomo Smartphone classes" providing smartphone operations guidance and enjoyable usage tips in video.
Analysis of demographic changes in principal areas before and after the
Ongoing declaration of state of emergency using "Mobile Spatial Statistics" and provision of analysis results to national and local governments, media, etc.
Extension of payment due for mobile
phone charges, etc.
Re‐grant of expired "d POINTs"
Free online health consultation through
"d Healthcare" app
Deferral of payment deadline of phone charges originally due on and after Feb. 29 to Jul. 31 for customers who filed an application for extension.
Re‐grant "d POINTs" expired in March, April and May 2020.
Limited‐time provision (through Jun. 30, 2020) to "d Account" users of a free 24‐hour chat | |
service with medical doctors for consultation of COVID19‐related and other anxieties or | |
health concerns. | 26 |
Toward the New Post‐Coronavirus Society
Promote new value creation and solution of social issues.
Also contribute to structural transition to a remote‐style society.
Sports/Live performance | Healthcare/Telemedicine |
MaaS | Remote learning support | Online operation support in manufacturing |
27 |
Cost Efficiency Improvement
(Billions of yen)
FY20/1Q20.1Q | 20年度(予想) | |
FY20 (target) | ||
‐24.0
4Q実績
▲560
‐100.0
Focus areas
◆Marketing
Promotion of DX, sales promotion measures, after‐sales support, etc.
◆Network
Equipment integration, outsourcing cost, etc.
◆Other
R&D, information systems, etc.
◆ The amount of cost efficiency improvement above indicates the cost reduction compared to the previous fiscal year. | 28 |
Shareholder Returns
Dividend increase planned for the seventh straight term
125
120
【Dividend per share (yen) 】 | 110 |
100 | ||
80 | ||
60 | 65 | 70 |
FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 |
(forecast) | |||||||
Share | ¥473 billion | ¥457.1 billion | ¥300 billion | ¥600 billion | ¥300 billion | ||
repurchase | |||||||
◆ The amount spent for share repurchase indicates the sum of amount used for tender offer and market purchase. | 29 | ||||||
Summary
■ FY2020/1Q results overview
Recorded a decline in revenues but an increase in profit, with operating revenues and profit coming in at ¥1,098.2 billion and ¥280.5 billion, respectively.
Growth of Smart life and Other business contributed to offset year‐on‐year decrease in operating revenues caused by COVID‐19 and other factors.
Total "d CARD" members and "d Payment" users grew to over 13 million and 27 million, respectively.
■ FY2020 guidance and principal actions
Aim to grow operating profit to ¥880 billion while properly managing the impact from COVID‐19.
Continue to focus on growth of Smart life and Other businesses and cost efficiency improvement.
5G subscriber acquisition and coverage expansion making steadfast progress. Release of standard model handsets planned for FY2020/2H.
Shareholder returns: Dividend increase planned for the seventh straight term. | |
Aim to contribute to the structural shift to a remote‐style society through 5G | |
envisaging the post‐coronavirus world. | 30 |
Always chosen
to sustain connections
as your robust ICT service partner
31
The new of today, the norm of tomorrow
32
Appendix
33
Principal Services, etc., Included in
Each Reportable Segment
Telecommunications business
Mobile communications services
- 5G services ・ LTE (Xi) services ・FOMA services (3G) ・ International services ・Sales of handset/equipment for each service etc.
Optical fiber broadband service and other telecommunications services
・Optical‐fiber broadband services | ・ Satellite communications services | etc. |
Smart life business
Content/ Lifestyle services
- "dTV" "d hits" "d magazine" "d shopping" "d healthcare" etc.
・ NTT Plala Inc. ・ Oak Lawn Marketing, Inc. ・Tower Records Japan Inc. etc.
Finance/Payment services
・ d CARD ・ d CARD GOLD ・iD ・d Payment ・ Fintech etc.
Other businesses
Support services for customers peace of mind
・ "Mobile Device Protection Service" ・ "Anshin Remote Support" etc.
Enterprise solutions
・ Enterprise IoT solutions | ・ System development/sales/maintenance services | etc. |
34
Definition and Calculation Methods
of ARPU
i. Definition of ARPU
ARPU (Average monthly Revenue Per Unit):
Average monthly revenue per unit, or ARPU, is used to measure average monthly operating revenues attributable to designated services on a per user basis. ARPU is calculated by dividing telecommunications services revenues (excluding certain revenues) by the number of active users of our wireless services in the relevant periods, as shown below under "ARPU Calculation Method." We believe that our ARPU figures provide useful information to analyze the average usage per user and the impacts of changes in our billing arrangements.
ii. ARPU Calculation Methods
Aggregate ARPU = Mobile ARPU + "docomo Hikari" ARPU
‐ Mobile ARPU | : Mobile ARPU Related Revenues (basic monthly charges, voice charges, communication charges) / No. of active users |
- "docomo Hikari" ARPU : "docomo Hikari"‐Related Revenues (basic monthly charges, voice communication charges) / Number of active users *ARPU excluding the impact of discounts are calculated without including the amounts of discounts applied in the relevant revenues.
- Active Users Calculation Method
Sum of Number of active users for each month ((Number of users at the end of previous month + Number of users at the end of current month) / 2) during the relevant period
iv.
- The number of "users" used to calculate ARPU is the total number of subscriptions, excluding the subscriptions listed below:
- Subscriptions of communication modules services, "Phone Number Storage," "Mail Address Storage," "docomo Business Transceiver" and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs); and
- Data Plan subscriptions in the case where the customer contracting for such subscription in his/her name also has a subscription for "5G," "Xi" or "FOMA" services in his/her name.
- Revenues from communication module services, "Phone Number Storage," "Mail Address Storage," "docomo Business Transceiver" and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs) , and impact on revenues from "d POINT" program, etc.,are not included in the ARPU calculation.
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Special Note Regarding Forward‐Looking Statements
All forward‐looking statements that are not historical facts are based on management's current plans, expectations, assumptions and estimates based on the information available as of the filing date of this document. Some of the projected numbers in this report were derived using certain assumptions that were indispensable for making such projections in addition to historical facts. These forward‐looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contained in or suggested by any forward‐looking statement. With regard to various known and unknown risks, uncertainties and other factors, please see our latest Annual Securities Report and Quarterly Securities Reports.
Names of companies, products, etc., contained in this presentation are the trademarks or registered trademarks of their respective organizations.
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NTT DoCoMo Inc. published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 07:43:09 UTC