Presentation Materials

Comments from the CEO (Results for the FY2018, announced on April 26, 2019)

"Execute Change for Further Growth"
FY2019 NTTDOCOMO Business Management Policy

FY2018 Results Overview

Positioning the fiscal year ended March 31, 2019 (FY2018) as the year to "innovate and take action," we steadily implemented measures to deliver on our Medium-Term Strategy 2020 "Declaration beyond" and initiated the transformation of our business foundation. As a result of these undertakings, we recorded an increase in both operating revenues and profit, which reached 4,840.8 billion yen (up 1.7% year-on-year) and 1,013.6 billion yen (up 2.7% year-on-year), respectively.
With respect to the shift from "subscriptions to membership"-the centerpiece of our business foundation transformation initiatives, we strove to develop a customer base pivoted on "membership" breaking away from the traditional focus on "mobile subscriptions" and successfully expanded the total number of "d POINT CLUB" members by 6.9% from the level a year ago to 70.15 million.
In telecommunications business, we continued proactive customer returns through the launch of "Basic Share Pack" and "Basic Pack" and other programs while increasing the number of "docomo Hikari" optical fiber broadband service subscriptions, and generated 866.3 billion yen in operating profit, which posted an increase of 1.4% over the previous fiscal year. The operating profit from Smart life and other businesses also grew by 11% year-on-year to 147.3 billion yen driven mainly by the steadfast expansion of finance/payment services and enterprise solutions, etc.
The FY2018 capital expenditures amounted to 593.7 billion yen as we appropriated an additional 20 billion yen to accelerate the initiatives for the launch of 5G pre-commercial services scheduled for September 2019 and to step up our disaster response/preparedness including the measures taken in the aftermath of Typhoon No. 21 of 2018, the Hokkaido Eastern Iburi Earthquake and other natural disasters.
As for our ESG activities, we have been selected for the first time as "Nadeshiko Brand" for our active undertakings to encourage the empowerment and advancement of women. We are committed to further promoting ESG management to contribute to sustainable development of society while enhancing our enterprise value over the long term.

FY2019 Business Management Policy

We position the fiscal year ending March 31, 2020 (FY2019) as the "year to execute 'change' to propel further growth" and will undergo self-reformation in order to drive growth for the future.
In October 2018, We declared to lower our rates by approximately 20-40% through the introduction of a new "simple and great value" rate structure and to provide customer returns of up to 400 billion yen per annum. In accordance with this announcement, we will launch new rate plans that are simple and offer great value, "Gigaho" and "Gigalight," in June 2019 in a preemptive move as a market leader to bolster our competitiveness amid a radical change in the market environment.
Because we believe a large proportion of our smartphone users will perceive great value and benefits in the new rate plans, we project the impact of customer return programs to reach 200 billion yen in FY2019, with operating profit estimated to be 830 billion yen. We feel very sorry for any concerns that we may have caused to our valued shareholders and investors due to the projected decline in operating revenues and profit. Leveraging the new rate plans, we will endeavor to forge a stronger bond with customers and solidify our customer base by making the optimal proposal catered to each customer with the aim of generating incremental revenues down the road.
In addition, through the promotion of digital marketing, we will steadily expand our Smart life and other businesses primarily focusing on finance/payment and enterprise solutions and implement actions toward the commercialization of 5G services, while at the same time addressing cost efficiency improvement in a scale larger than FY2018 of total 130 billion yen.

Initiatives for the Launch of 5G Pre-Commercial/Commercial Services

After receiving the allocation of 5G spectrum in three bands in April 2019, we commenced the buildout of our 5G coverage. To allow our customers to experience 5G ahead of the competition, we plan to offer 5G pre-commercial service in conjunction with the Rugby World Cup 2019TM games in September 2019 and its full commercial service in the spring of 2020. To deliver services that fully capitalize on the strong points of 5G, we will continue to promote our co-creation activities with a broad range of external partners, and thereby contribute to building a richer future.

Shareholder Returns
For FY2018, we have announced a dividend hike of 10 yen to pay an annual dividend 110 yen per share and repurchased shares worth approximately 600 billion yen. Despite the projected decline in operating profit for FY2019, as we can expect stable free cash flow generation over the medium term, we will adhere to our shareholder return policy of accelerating our shareholder returns through "continued dividend increase" and "expeditious share repurchases." For FY2019, we plan to pay an annual dividend of 120 yen per share and secured the authorization for share repurchase of up to 300 billion yen to further improve the returns to our valued shareholders.

As presented above, although we expect to see a drop in operating revenues and profit for FY2019, we hope to make FY2019 the bottom year and achieve the earliest possible recovery while at the same time continuing our endeavors to enhance our shareholder returns.

As always, we thank you very much for your patronage, we look forward to enjoying the continued support and understanding of our valued shareholders and investors.

noticeAn initiative jointly promoted since 2012 by the Ministry of Trade, Economy and Industry and Tokyo Stock Exchange, in which listed companies that are outstanding in encouraging the empowerment and advancement of women are selected and announced as "Nadeshiko Brands".

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