FY2020.1Q Financial Results-Key Points

Despite an increase in optical fiber lines and telework product sales, the decline of DOCOMO's handset sales revenue in japan/system integration (SI) revenue mainly from overseas had a negative impact on operating revenues of approximately 70 billion yen and on operating profit of approximately 10 billion yen.

As a result of the spread of COVID-19, DOCOMO's handset sales revenue in japan and SI revenue mainly from overseas are expected to decrease toward the second half of the year, and so operating revenues is expected to decrease by 350.0 billion yen (▲180.0 billion yen in Japan and ▲170.0 billion yen overseas) and operating income is expected to decrease by 70.0 billion yen (▲45.0 billion yen in Japan and ▲25.0 billion yen overseas). However, we expect profit to increase year-on-year by covering this with (1) cost reduction of equipment through investment restraint, etc., (2)further operational efficiency improvement by promoting DX and other measures.
Seizing the potential for major changes in the way people work and lifestyles, we have announced to offer "NeWork", an online workspace, and "Window Talk", which enables contactless conversations, as the first steps for our new service strategy to create a remote world. Going forward, we will continue to create innovative technologies and products originating in Japan, expand product lineup, and expand sales with the aim of achieving sustainable profit growth from FY2021 onward.

Due to the impact of COVID-19, operating revenues of SI business/other businesses are decreasing, and the impact is expected to expand further from 2Q. As a result, overseas sales and overseas operating income for FY2020 are planned to decrease.
NTT Ltd. expects its operating income to improve significantly from the previous year and become profitable, by contributing to cost reduction effects such as personnel expenses through structural reforms, and promoting various sales measures to increase sales.
NTT DATA expects a decrease in operating revenues and operating income for FY2020 due to temporary costs for structural reforms mainly in North America to support digitalization of after-COVID-19 (expansion of digital human resources, reskilling, resource optimization, office/data center integration, etc.), in addition to the sales decrease due to the impact of COVID-19.

The basic policy is to increase dividends on a continuous basis, to buy back shares flexibly, and to improve capital efficiency. We have announced in our FY2019 results that we would pay a dividend of 100 yen per share for FY2020, an increase of 5 yen from the previous year.