Message from the CEO

Last updated : June 25, 2019

Working to Resolve Social Issues as “Your Value Partner” [President and Chief Executive Officer, Representative Member of the Board. Jun Sawada]

NTT Group is working on a variety of issues in order to accomplish our self-transformation towards “Your Value Partner” and to achieve sustainable increases in corporate value by contributing to both Japanese and global society.

Results for the Fiscal Year Ended March 31, 2019

Both Operating Revenues and Operating Profit Increased to Record Levels

Both operating revenues and operating profit for the fiscal year ended March 31, 2019 increased over the previous fiscal year due to, among other factors, increases in revenues in the Data Communications Business and Mobile Communications Business, with operating revenues increasing by ¥97.7 billion year-over-year to ¥11,879.8 billion and operating profit increasing by ¥52.7 billion year-over-year to ¥1,693.8 billion. Both operating revenues and operating profit reached record levels. Although profit for the fiscal year ended March 31, 2019 decreased year-over-year by ¥43.3 billion to ¥854.6 billion, when adjusted to exclude the effect of the arbitration award received in the previous fiscal year, profit for the fiscal year ended March 31, 2019 increased year-over-year by ¥6.7 billion. Similarly, although EPS (earnings per share) for the fiscal year ended March 31, 2019 decreased year-over-year by ¥10 to ¥440, when adjusted to exclude the effect of the arbitration award received in the previous fiscal year, EPS for the fiscal year ended March 31, 2019 increased year-over-year by ¥15. Overseas sales for the fiscal year ended March 31, 2019 also increased year-over-year by $0.6 billion to $18.9 billion.

Financing Results Forecast for the Fiscal Year Ending March 31, 2020

Aim to Increase Profit* and EPS over the Previous Fiscal Year

Although we anticipate that operating revenues for the fiscal year ending March 31, 2020 will decrease by ¥49.8 billion year-over-year to ¥11,830.0 billion and that operating profit will decrease by ¥143.8 billion year-over-year to ¥1,550.0 billion due to decreases in revenues in the Mobile Communications Business resulting from the introduction of new billing plans, among other factors, we are aiming to increase profit* by ¥0.4 billion year-over-year to ¥855.0 billion and to increase EPS by ¥16 year-over-year to ¥456. In addition, with the fiscal year ending March 31, 2020 set as a baseline, are aiming to restore profitability as soon as possible.

  • *Profit represents profit attributable to NTT, excluding noncontrolling interests

Initiatives under the Medium-Term Management Strategy

Working to Resolve Social Issues as “Your Value Partner”

I would like to describe some of the initiatives we have undertaken in accordance with the four pillars of our Medium-Term Management Strategy.

1. Support Our Customers’ Digital Transformations

We have been working to promote the B2B2X model and have set a B2B2X sales target of ¥600.0 billion for the fiscal year ending March 31, 2024. The number of B2B2X projects at the end of the fiscal year ended March 31, 2019 was 39, which we intend to expand to 100 by the fiscal year ending March 31, 2022 as we continue to advance new value creation with partners in various industries.

In addition, NTT DOCOMO launched a new simple and great value rate plan starting from June 2019. In terms of 5G services, we will develop 5G infrastructure with a 97% deployment rate within five years.

2. Accelerate Our Own Digital Transformation

We are working to enhance our competitiveness in global business. The overseas businesses of NTT Communications, Dimension Data and NTT Security will be integrated, and under the umbrella of NTT Inc., the global holding company established last year, will conduct business as NTT Ltd., an NTT-branded global operating company, in 57 countries worldwide beginning in July 2019. Of the six Board Members of NTT Ltd., four members, including the CEO, are non-Japanese. The name of the domestic (Japanese) operating company will continue to be NTT Communications.

3. Leverage Talent, Technologies and Assets

In response to social problems relating to the environment and energy, we established NTT Anode Energy Corporation, a new smart energy business, and are aiming to commence business operations in September 2019. We will provide new value, including improved resiliency, by fully leveraging NTT Group’s ICT technology, DC power and other power supply technology, and power storage and other assets in order to improve energy efficiency and response to power outages when disasters occur, by developing our power generation, transmission / distribution / storage, and retailing / wholesaling business.

In addition, we established NTT Life Science Corporation, which will operate a new medical science business that provides recommendations for improvements tailored to individuals’ constitutions through healthcare data analysis that combines genome information with health and behavioral data, by leveraging NTT Group’s big data analysis technology, AI technology and security technology.

4. Promote ESG Management, and Enhance the Returns of Shareholders to Improve Corporate Value

We carry out our management with an emphasis on E (environment), S (society) and G (governance). In particular, with respect to governance, from the perspective of strengthening the supervisory function of the Board of Directors and improving corporate governance, and at the same time promoting diversity, we increased the number of outside Members of the Board by two members and newly appointed two female Members of the Board. As a result, four out of the 15 Members of the Board (approximately 27%) are now outside Members of the Board.

Next is enhancement of returns to shareholders. With regard to dividends, our basic policy is to steadily increase dividends, and we plan to continue to increase them going forward. For the fiscal year ending March 31, 2020, we anticipate an annual dividend of ¥190 per share, representing the ninth consecutive annual dividend increase since the fiscal year ended March 31, 2012. With respect to share buybacks, we flexibly carry out buybacks to improve capital efficiency. The Board of Directors resolved at its meeting in May 2019 that NTT may acquire up to ¥250.0 billion of its outstanding common stock until the end of July 2019. Following these buybacks, we will have made approximately ¥4,000 billion of share buybacks since 1999.

We hope to receive the continued understanding and support.

2019 June