Thank you for waiting. We will now begin the finan cial results briefing and Q&A of KDDI Corporation for the first quarter of fiscal year ending March 2024. Thank you very much for taking time out of your busy schedule to join us today. I am Miyakawa of Investor Relations Department, and will serve as the moderator today. This briefing will be broadcast live on the internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance. Let me introduce the participants today. Amamiya, Executive Vice President and Executive Director of Personal Business Sector. Yoshimura, Senior Managing Executive Officer, CTO, and Executive Director of Technology Sector. Kuwahara, Senior Managing Executive Officer and Executive Director of Solutions Business Sector. Matsuda, Director and Executive Director of Business Exploration and Development Division. Saishoji, Managing Executive Officer, CFO, and Executive Director of Corporate Sector. Aketa, Executive Officer and Executive Director of Corporate Management Division. Today, three financial results related materials and two TSE disclosures, a total of five materials, are posted on our IR website. Please refer to the disclaimer in the material regarding statements made in these documents, performance targets, and projected subscriber numbers, et cetera, explained in the Q&A session today. Managing Executive Officer, Saishoji, will first explain the financial results summary, followed by Q&A. Ms. Saishoji, please. Thank you very much for taking time out of your busy schedule to attend KDDI's financial results briefing today. Before the Q&A session, let me share with you the summary of the financial results for the first quarter of fiscal year ending March 2024, and our initiatives. In the first quarter of fiscal year ending March 2024, both operating revenues and operating income progressed as expected against the full year forecast. Left side, operating revenues were JPY 1,332.6 billion, 23% progress against the full year forecast. Operating income, on the right side, was JPY 266.7 billion, with a progress rate of 24.7%. Next, I will explain the factors behind the decrease in operating income of JPY 30.6 billion. From the left, group MVNO and roaming revenues were down by JPY 10.5 billion. Multi-brand communications ARPU revenues were down JPY 2.9 billion. DX revenues were up JPY 1.7 billion, and the Financial business was down JPY 12.9 billion. Excluding the - JPY 18.2 billion accounting change impact of the previous fiscal year, the financial business posted an increase of JPY 5.2 billion. The decrease in roaming revenues and the accounting change impact year-on-year, which were expected from the beginning of the fiscal year, led to profit decline, but the focus areas remained solid. This is the summary of the financial results for Q1 of fiscal year ending March 2024, and our initiatives. I just explained the consolidated results. We will strengthen Tsunagu, connecting through infrastructure improvement and partner collaboration. In satellite growth strategy and strengthening of management, communications ARPU revenues progressed steadily toward first half rebound. In the business segment, NEXT Core drove the growth. Leveraging its strengths, we will further promote connectivity data center, digital BPO, and connected. Financial business achieved growth, synergizing with au. We consolidated CATV business into J:COM to contribute to industry development and regional co-creation. In addition, we will promote initiatives toward a decarbonized society and utilization of generative AI. We will promote our initiatives for a medium to long-term sustainable growth. Thank you very much again for today. Thank you very much, Managing Executive Officer Saishoji. Now I would like to entertain questions from all of you. In order to make sure that we take questions as many people as possible, I would like to limit the questions to two to one person. If you have two questions, after first question is answered, you please ask the second question. As was announced previously, we will take questions from those of you who had been registered and connected to the system in advance, one by one. Let me explain how to ask questions. If you have any questions, please click the Raise Hand icon on the Zoom, and if your name is called after the announcement of your company name and your name, please unmute yourself and go ahead with questions. We'll receive questions until the scheduled ending time. First question, Mr. Ando from Daiwa Securities, please unmute yourself and ask questions. Ando speaking. Can you hear me? Yes. I have two questions. The first question is about ARPU revenues. In the first quarter, if you look at the single months, were there any months where you had year-on-year growth already? There was some impact from Aoyama, but in the second quarter, are you expecting as much effect from the previous fiscal year as you saw in the first quarter? You're not going to see that much effect, but you are going to see rebound in the second quarter, which one is what you're expecting? Thank you for your question. As for ARPU revenues, I'd like to ask Amamiya to ask the question. As for the first quarter ARPU status, on a monthly basis, whether we have had year-on-year growth, on that point in June, we were very close, but on a monthly basis, we haven't been able to reach the complete positive territory yet. In July, we may be able to reach a very close point, but the question is whether how much we can add up more. We are going to see the impact in the second quarter, as we saw in the first quarter, for the support and discount, and so we would like to improve the communication ARPU. There's a follow-up question on that. The ARPU support discount and also handset subsidy, I think there were two different approaches in this year. Is that the correct way to look at that? In the first quarter, You have seen that, impact, and that's why you have ended up with this result. Is that correct? With regard to the support discount, and, well, there was some, discount, for us in the period of time, but that, time had expired, and, the support discount had ended, and, there was, an impact from that. Well, so that, that means that, handset support has not increased. That there is correct. We don't have that view. The second question is about roaming. If you look at the, the waterfall chart, there was, negative impact of, JPY 10 billion + impact. For the full year, JPY 60 billion worse, and then there will be JPY 10 billion + or close to JPY 20 billion improvement that you are expecting. If you look at the status in first quarter, compared to your assumption, do you think the pace has been slowing down as compared to your initial anticipation? Also, on top of that, is there any possibility that there will be more requests for roaming? If you can explain about that, that would be appreciated. Thank you. As for roaming revenues, I would like to ask Matsuda to answer the question. Thank you for the question. With regard to the new agreement on roaming with Rakuten Mobile, we have made announcement in May. At the beginning of this fiscal year, as you said, we had expected JPY 60 billion decline in revenues. With this new agreement, our new forecast for this fiscal year is that there will be an improvement of JPY 10 billion-JPY 20 billion. After the first quarter is over, I think we are in line with our new expectation. For the second point, on a regular basis, we are having discussions with Rakuten. There is additional area for roaming, in other words, the business center district. We are still under negotiation for the area for this district, so we would like to continue to have discussion with Rakuten Mobile. That's all. Thank you. Understand, does that answer your questions? Yes. We will take the next question. Please use the Raise Hand button on Zoom if you have any questions. Next question is from SMBC Nikko Securities, Kikuchi-san. Please unmute yourself and ask your question. This is Kikuchi speaking. Thank you. I have two questions. First, your profit did went down, but it is in line with your plan. In your focus areas, you will increase the profit contribution this year and next year, you will increase your profit from there. The focus areas, if you could update us on the status of focus areas. That's my first question. First, in DX sales, the operating revenue of the business domain is growing, but the profit does not seem to be growing as much. In which areas, which service do you plan to grow your profit going forward? It's growing, but finance, the housing loan and settlement, there are various areas. Which area do you plan to grow the profit, and what is your forecast? That's my first question. Thank you very much. Focus areas, DX and finance. First, DX area will be responded by Kuwahara-san. Yes, thank you for the question. First, in DX domain, we have NEXT Core. We have 3 areas designated under NEXT Core, and the sales revenue is growing steadily. In particular, IoT, BS, Business DX is leading this momentum. In profit, JPY 1.7 billion, so overall, the growth seems to be small. In the first quarter, it was in line with the plan. Second quarter and onward, we are growing. We will grow year-on-year. Thank you. I hope this answers your question. Next on finance, financial business, Amamiya will respond. Yes, financial business. In the current quarter, excluding the one-time factor, it was JPY 5.2 billion +. The growth driver is the mortgage loan and the credit card business. Those two continue to be strong, and those two will continue growing. In addition, in this current quarter, the fixed interest rate was mark-to-marketed, and that was JPY 2 billion. Interest rate, there were some news today. Interest rate is expected to rise going forward, so we can expect profit contribution from that factor. Thank you. I hope this answers your question. Thank you. My follow-up question: Business DX is growing. Any particular service? Which service, in particular, will contribute to your profit? Business DX is relatively IoT related and the development and operation, so both are expanding and profit is growing. Thank you. I understand. My second question, we'd like to know the details later. My second question is the churn rate is rising, and it's a big concern, concerning. Maybe it's because of SoftBank, SoftBank. Compared to a year or two ago, it is up by 40%-50%, and from three years ago, it is double, and I think you are filling that, offsetting that with new subscribers. With to capture new customers, it is the, the acquisition cost, it increase cost, and so your reduction in the sales-related cost is not progressing well. What is your forecast? Do you think you can control this or not? The government's guideline changed, what is your forecast on that background? If you could share with us your view on churn rate. Churn rate forecast. Amamiya will respond. First, on churn rate, first quarter was 0.96. On a year-on-year basis, this was up by 0.4, 0.04. That is a multi-brand. If we look at this on the brand by brand basis, au churn rate is declining, and UQ is pushing up the churn rate. Core ARPU au users are staying, so that is a favorable trend. UQ is pushing up the rate because of two reasons. One is that the proportion of UQ is increasing, and so that is one factor. The other is that in the market, SIM standalone or the customers that are not cost conscious, the frequent buyers are increasing. That is impacting the churn rate somewhat. We will analyze how we allocate our cost by customer, and so that we will not spend too much cost on the customers who do not have large lifetime value and capture them. We will try to efficiently capture customers. For au, like we've been doing so far, bundle plan with OTT will be enhanced to improve our retention. Going forward, we will also strengthen the bundling with financial services. On au side, churn rate will continue declining, we think. Thank you. UQ and povo, Now the mix is worsening. I think now the deterioration is milder. The deterioration of mix, meaning, there's ARPU and the churn rate, they're both becoming milder. For ARPU, in June, our ARPU, the new UQ price plan was announced, and we think this will have an impact. We've only seen the results for June and July. We'll have to scrutinize further. Looking at July results, the ARPU increase from the new price plan and ID, the penetration to the stores was not sufficient in June, so it weakened somewhat, but we've seen a de- recovery in July. ID is recovering, and ARPU is rising. I think we're moving in the positive direction. In addition, after this new price plan was announced, au to UQ and UQ to au is now in a better balance. Another area we're seeing an improvement. We think this new price plan had a good impact. Thank you. That's all. Thank you very much. Let us move to the next question. If you have any questions, please click on Raise Hand icon on the Zoom. Next question, Nomura Securities, Mr. Masuno, please unmute yourself and ask questions. Masuno from Nomura Securities. I have two questions. First one is about the profit increase and decrease. Honestly speaking, roaming revenues decline and financial finance business accounting was something that I had expected. If you would look at the waterfall chart, there was minus JPY 6 billion in the others. Originally, the power charge improvement contribution and the rationalization and the midterm plan had something that we had expected, but that was not the case. Maybe power charge was a one-time factor, was that true? As for rationalization and streamlining, in second, third, and fourth quarters, are we going to see some results? In other words, in the first quarter, the, in the annual plan, there was some skew in the first quarter, and we're going to see improvements in the second quarter onward. That's, that was about rationalization. In terms of natural expenses, I think in new UQ mobile plan expense, JPY 2,980 fixed plan and 20 gig is quite simple to understand, and you don't have to, to spend too much money to acquire contracts. It's not about rationalization, but organically, you can actually promote sales with the new UQ price plan. Inclusive of that, can you answer that question? Thank you very much for the question. On the profit, for JPY 6 billion negative figure. In others, what are the main contributors? About JPY 4 billion worth is from electricity or power sector business. Actually, this had been already incorporated in our plan, so it is not out of our expectations, so it is in line with expectation. The way you generate profit, if you look at that, compared to our internal plan, actually it was slightly upside. That's how we how we are in terms of profitability. As for UQ mobile, I would like to ask Amamiya to answer the question. The new plan for UQ mobile, as I said, it is going in a very positive direction as we see it. As you said, rightly, the Komi-Komi Plan of UQ price scheme, the proportion is increasing much more than we had expected. The more customers are using this plan, and, mostly, prior to the new plan, we had S, M, and L plans. For M and L, the share was not that large for M and L. Komi-Komi Plans, the share of these two plans are increasing. More recently, 70% of the customers are choosing these two plans. I think we are in a very positive direction. That's all. Thank you. The electricity or power business, is it a one time event? JPY 90 billion or JPY 1 trillion for the 3-year period, that rationalization effect, what was that, what was the effect in first quarter? Are we going to see those results in second quarter onward? Was it the power sector, was it a one-time phenomenon? Well, as for the power sec business, this was a one-time phenomenon. For the first quarter, what was the biggest contributor? We are selling the electricity in the market. The unit price of selling power was expensive last year, but it was cheaper this year. As for the procurement cost, it was less, but the cost share was increased this year, the cost has increased. In June, the power utilities power charge regulation was modified. We also modified our plan in line with that. As for the new adjustment, the power source procurement adjustment amount was added. If there is any change in the procurement sector, we can pass this on to our customers when we charge customers, and that will be contributing more. Also, the fuel adjustment fee cap, which was eliminated last year. From July onward, there's no such negative factors, so we are going to turn into positive territory. There will be close to JPY 10 billion improvement for the full year. That's all for the electricity business. As for the rationalization for the 3-year period, JPY 100 billion effect is something that we had expected and announced. Up until March 2020, cumulatively, JPY 80 billion is expected till March 2024. We are doing the restructuring in profit and revenue, and there was not much effect that we've seen in the first quarter, but there will be more in the second quarter onward. That's all. In the second, third, and fourth quarter, you are going to see a positive JPY 10 billion or more that you are going to see. Well, among JPY 100 billion, up until last year, we had achieved JPY 50 billion. Cumulatively, we're talking about JPY 80 billion. For the full year, JPY 30 billion improvement is expected, and there was not much that we've seen in the first quarter. The larger portion will be realized from second quarter onward. Thank you. I'm feel assured. My second question is about share buyback of your share, treasury shares. JPY 250 billion in tender offer was announced. Going forward, one year behind, but in May, the president has announced and explained about the share buyback of EPS target, and EPS target and share buyback. You are going to plan to achieve both of these targets, is that unchanged? Is your policy to accept the repurchase a subscription if there is an offer? As for the future policy for share buyback, JPY 250 billion worth of TOB, takeover bid, was announced, and it was not done in with a view of EPS target. We have been meticulously doing this, and JPY 300 billion is something that we had announced from all along. Of course, if we can increase this, then that would also affect EPS, but JPY 300 billion is the one that we have as a plan for this fiscal year. As for achieving EPS, maybe this was explained in the previous meeting, but we haven't given this up, and we are still trying to aim to achieve this target. In order to achieve this target of EPS, in every possible way, we are going to seek this achievement, but we're not blindly and randomly doing the share repurchase. We are doing proper measures, and if there is any offer for repurchase, it depends on the amount, but if there is a huge amount offered, then we may seek other methodologies. We'll be very flexible in addressing this issue. Maybe the way I put it, the question was not that appropriate. You are going to seek EPS and looking at profitability and share, number of shares, it is not going to be changed from the first quarter onward. That is correct. Thank you. Thank you very much. We will take the next question. Please use the Raise Hand button on Zoom. Next question, Mitsubishi UFJ Morgan Stanley Securities, Tanaka-san, please unmute yourself and ask your question. Hi, this is Tanaka. Thank you very much. I have two questions. First, multi-brand ID, number of multi-brand ID, the net increase is 28,000. It seems a bit weak. What is the background to that? UQ, you revised your plan, and you said you're moving in the right direction, but the churn rate with UQ is rising. Including all that, this may be a bit weak growth in ID. Could you explain? Thank you. number of multi-brand ID, Amamiya will explain. Number of ID, as you mentioned, it's 28,000. The reasons are in July, in June, in June, when UQ introduced its new price plan, the store operation was not sufficient. We slowed down in June, and because of that, this number may be a bit weak. In July, we are back to normal, going forward, we think we can meet your expectation. About churn rate. The churn rate is rising. Like I mentioned earlier, the SIM standalone or the mobile subscribers or mobile users are increasing, we are not pushing ourselves too much to capture them. That is our intention. We want the customers that have reasonable lifetime value that meets the cost level, who are willing to subscribe with us. We will not allocate money on SIM per se. The number of IDs, we will continue net increase, but it may seem weak in some points, but we will see the balance with ARPU so that we can increase the revenue, the overall revenue as a whole. One question. You introduced the new plan, and the, maybe the administrative side, the back office had some confusions on the storefront, and was back to normal in July? The number of applications or the UQ number of visitors, was not, did not fall, but it was the procedure that slowed down? The number of visitors did not change. Compared to, unlike the SML days, we needed to explain a little more with the new plan. We explained to our customers, but customers did not make the decision on the spot and went home without a decision on that day. That was some shortcomings on our part, and we improved that, and in July, we were able to close the contracts in the store on that day. My next question, Kikuchi-san asked but was not answered. The Business DX, the profit did not grow much in the first quarter. What is the reason for that? Thank you. Kuwahara will explain. The reason it did not grow in the first quarter was, NEXT Core. On a year-on-year basis, both sales and profit grew by double digits, and the driver is Business IoT, Business DX, IoT under Business DX. In other areas, like Corporate DX, managed, and M365, Microsoft 365, sales increases, but profit is not that large. Profit did not grow as much as we thought. Another is data center related. A fuel price increase in the first quarter, first half last year was not existent, but this year it is evident. That is another reason profit is not as large, and we already incorporated this factor in the plan. As a result, it seems like the profit is not growing strongly. Okay. The business that you're aiming for is growing, NEXT Core is growing, but Microsoft 365, margin is low. Microsoft 365, it's not that it's not promising or from the second quarter, what is the biggest factor that will push up or improve the profit margin from second quarter onward? In data center, from second quarter onward, the fuel price increase, well, this will be gone on an apple to apple, so that will be a positive factor. In Corporate DX, M365 is one. We go to our customers, and then the next stage is managed service. We can deploy a more profitable services in the next stage, which will bring us profit. The deals from last year, accumulation of deals from last year, in the first quarter, we are 110% YoY, the accumulation of deals. The number of deals is increasing steadily, so we think the profit will increase steadily going forward. Thank you. That's all from me. Thank you very much. We are close to our ending time. We're sorry, but we would like to take one last question from one person. If you have any questions, please click the Raise Hand icon on the Zoom. The last question, Mr. Tsuruo from Citigroup Global Markets Japan. I would like to ask about roaming. From August, there will be connections that will be started gradually. You're talking about JPY 10 billion-JPY 20 billion in benefits from roaming. From what timing, in what magnitude are you going to see the effect? What are you going to spend that money on? Are you going to spend on the improvement of competitiveness or profitability improvement, philosophically? My, in my understanding, raising ARPU revenue is your priority, so probably you are going to spend more on profitability. That's my guess, but is that correct? Thank you very much. In the first half of your question, it was not audible. Are you asking about roaming revenues from Rakuten? Sorry, yes. Matsuda will respond. Thank you very much for your question. For the full year, in the first quarter, as I said, we were just as expected. We're not going to see particular improvements from the second quarter, between JPY 10 billion-JPY 20 billion. In the first quarter as well as in second quarter onward, we are expecting to make progress. There will be several discussions that will take place as we go along with the other party, and how we are going to land on is what we are going to also discuss with the other party. Does that answer your question? Well, there were two parts to my question. That revenue, are you going to spend that money on the strategic approaches or initiatives or profitability? This is the money that you would get that you had not expected initially. Well, I'll, I'll answer the question. Just, just as for the full year prospect, and we're just looking at the first quarter, and there could be some changes in the environment going forward. At this moment, as for the upside expected, we are going to do, make, or make some upward revision or forecast or spend the money on any specific items we'll not have yet to decide. If there's any change in the environment going forward, we would incorporate that in our business forecast. Does that answer your question? Yes. Thank you. Thank you very much. We have used up our time. We'd like to conclude the financial results briefing on the first quarter of March 2024 of KDDI Corporation. Thank you very much for your attendance.