Message from the CEO

Last updated : June 26, 2018

Accelerating Our Self-Transformation to Become “Your Value Partner” [Representative Member of the Board, President and Chief Executive Officer Jun Sawada]

I was recently named to succeed our previous President and Chief Executive Officer, Mr. Hiroo Unoura. I am delighted to have the honor of guiding the company forward in these extremely challenging yet exciting times.

NTT Group is accelerating its transformation toward becoming “Your Value Partner.” By offering quality services to customers, shareholders, partners, local communities, and all of our other stakeholders, and earning their trust, we are doing our best to contribute to the enrichment of society.

For the fiscal year ended March 31, 2018, operating revenues, operating income and net income all reached record levels. Increases in revenues from the data communications business, mainly from overseas sales, and from the mobile communications business, from an increase in mobile communications, all contributed to this.

For the fiscal year ending March 31, 2019 (the current fiscal year), despite the continued harsh competitive environment, we forecast both increased revenues and increased income, with revenues increasing to ¥11,830.0 billion (an increase of ¥51.8 billion compared to the previous fiscal year) and operating income increasing to ¥1,690.0 billion (an increase of ¥48.2 billion compared to the previous fiscal year).

While aiming for sustainable growth, NTT Group will continue to both support its customers’ transformations and its own transformation. Looking at the business environment, the geopolitical situation makes the future increasingly difficult to predict, and there are astounding developments taking place in the realms of the Internet of Things (IoT), Big Data, and Artificial Intelligence (AI). With respect to AI in particular, a variety of discussions have started to take place due to AI’s utility and the significance of its impact on employment. Furthermore, with the rumored end of Moore’s Law, which expresses the evolution of computers, the information and communications world is likely to undergo great changes in the future.

There are also significant events on the horizon in Japan, such as the Olympic and Paralympic Games in 2020, and the migration from PSTN scheduled for 2024.

As the business environment trends toward fluidity in these ways, NTT Group will proceed as described below to become “Your Value Partner,” while supporting our concept of Shared Values—the core principles that support our activities—which are “Connect,” “Trust,” and “Integrity."

1. Supporting Customers’ Transformations (Digital Transformation)

For its corporate customers, NTT Group will further accelerate the promotion of the B2B2X model that it has been working on, and will continue to support new value creation. Together with its partners, NTT Group will develop new businesses with the combined strength of NTT Group, and create solutions to resolve both its customers’ issues and social issues. Furthermore, NTT Group will work with all of its partners to implement and develop services that utilize 5th-Generation Wireless Systems (5G), which is expected to be introduced in 2020.

For its individual customers, NTT Group will provide personal services and support individuals’ lifestyle changes. For example, through new services such as d-points, NTT Group will expand its membership base beyond the boundaries of the telecommunications business and provide new value to its individual customers, such as with content and online payments.

2. Our Own Digital Transformation

We will aim for our own continued growth and work towards our own transformation (digital transformation). By further automating and updating the processes of our businesses and services, including our global businesses and services, we will create a business structure that has speed and is able to quickly respond to change.

3. Utilizing Personnel, Technology and Assets

NTT Group will continue to utilize its personnel, technology and assets. For example, NTT Group will work to strengthen and globalize its research and development and endeavor to have NTT Group’s technology used worldwide. Furthermore, NTT Group will use its real estate to develop smart cities, and create new businesses utilizing the direct current power system.

In addition to the three initiatives described above, in order to improve corporate value in the medium- to long-term, NTT Group will pursue management with an emphasis on Environment, Society, and Governance (ESG) standards and, at the same time, continue to work to improve shareholder returns.

Specific initiatives and objectives will be planned on a short-term (three-year), medium-term (five-year) and long-term (seven-year) basis, and NTT Group plans to announce a new medium- and long-term management strategy in conjunction with results from the second quarter of the fiscal year ending March 31, 2019. For financial targets, NTT Group will continue to work toward increasing its profits, with EPS (earnings per share) continuing to be the main indicator, and consider new targets for business structure reform and improved investment efficiency.

Finally, with respect to shareholder returns, NTT Group intends to increase the aggregate annual dividend amount to ¥170 per share (an increase of ¥20 per share compared to the previous fiscal year), beginning with the interim dividend of ¥85 per share, on the basis of its favorable business results.

We hope for the continued understanding and support.

2018 June