Presentation Materials
February, 2020MIRAIT Holdings Corporation

Table of Contents
I. Profile of the MIRAIT Group

IV. Trends in Each Business

1. Overview of MIRAIT Holdings

3

1. Trends in the NTT Business17 - 18

2. Management Integration of the Mirait Group4

2. Trends in the Multi-carrier Business

19 - 20

3. The Company’s Initiatives Since Establishment

53. Trends in the Environmental & Social Innovation Business21 - 22

4. Future Focus Areas (Frontier Domains)

6

4. Trends in the ICT Solution Business23 - 24

5. Outline of New Medium-term Management Plan

7

5. Initiatives in New Solutions25

6. Key Initiatives under the New Medium-term Management Plan

8

6. Initiatives to Build a Stronger Business Base26

7. ESG Initiatives

27

V. Reference Materials

II. Performance and Financial Overview
1. Historical Performance
2. Financial Overview for the Nine Months Ended December 31, 201910
11 - 1332

3. Current Industry Conditions

33

5. Major Shareholders
15

6. Share Price
Precautionary Statement

Note: In this presentation material, “net income” refers to “profit attributable to owners of parent”.

29 - 31

2. Changes in the Market Environment for the Mobile Business

4. Supplementary Financial Information

III. Performance and Financial Overview
1. Shareholder Returns

1. Business Overview

34 - 38
39
40

41

1

I. Profile of the MIRAIT Group1. Overview of MIRAIT Holdings (As of December 31, 2019)
Established

October 1, 2010

Paid-in capital

7 billion yen

President (CEO)Masatoshi Suzuki

Shares【Total outstanding shares】 108,325,329 shares

Stock listing

1st Section of the Tokyo Stock Exchange (Code: 1417)

Credit ratings

Rating & Investment Information, Inc. (R&I): A-

Location
Office network
Number of consolidated subsidiaries

5-6-36 Toyosu, Koto-ku, Tokyo【Domestic】 50 locations *Total of MIRAIT, MIRAIT Technologies, TTK, SOLCOM and Shikokutsuken【Overseas】 32 locations (Singapore, Sri Lanka, Australia, Philippines, Myanmar ,etc.)
74

Number of employees【Consolidated】 12,694

Fiscal year-end

March 31st of each year

Business description

Japan Credit Rating Agency, Ltd. (JCR): A（MIRAIT Holdings（MIRAIT（MIRAIT Technologies（Lantrovision（TTK（SOLCOM（Shikokutsuken: 101）: Consolidated 5,188）: Consolidated 3,058）: Consolidated 1,021）: Consolidated 1,088）: Consolidated 1,569）: Consolidated 669）

Telecommunications engineering work, electrical work, civil engineering work and building construction
work; management of subsidiaries and Group companies

32. Management Integration of the Mirait Group Established in 10/2010 with the management integration of Daimei, Commuture and TODENTSU, each with a history of more than half a century centered on building
communication infrastructure .
 Promoted the structural shift to become a ”Comprehensive Engineering and Services Company” through M&A and other efforts following the management integration.
 Three operating companies were reorganized into two entities (MIRAIT and MIRAIT Technologies) on October 1, 2012.
 Acquired Lantrovison(S)Ltd in Singapore in 6/2016 to expand global business.
 Management integration with TTK in 10/2018, and Solcom and Shikokutsuken in 1/2019, to further enhance the Group’s business base and corporate value

FYE March 2011

FYE March 2017

FYE March 2020 (Plan)

Net sales 246.6 bil. yen, operating income 4.9 bil. yen

Net sales 283.2 bil. yen, operating income 10.0 bil. yen

Net sales 430.0bil. yen, operating income 21.5 bil. yen

Number of employees 7,184

Number of employees 8,675

Number of employees 12,704

2019.1 －MIRAIT Holdings Corporation

ｰ 2018.9

2010.10

Establishment ofholding company

MIRAIT Technologies Corporation

October, 2010

October, 2012MIRAIT Corporation(Headquarters) Tokyo(Consolidated net sales) 197.9 bil. yen (FYE March 2018)(Consolidated no. of employees) 5,188 (December 2019)MIRAIT Holdings Corporation

TODENTSU Corporation
Established in February 1946
(Net sales) 47.6 bil. yen(No. of employees) 1,269

Commuture Corporation
Established in June 1960
(Net sales) 91.9 bil. yen(No. of employees) 2,847

MergerOctober, 2012MIRAIT Technologies Corporation(Headquarters) Osaka(Consolidated net sales) 107.3 bil. yen (FYE March 2018)(Consolidated no. of employees) 3,058 (Decembet 2019)

Expansion of global
business
Change ofTrade Name

June, 2016
Lantrovision (S) Ltd(Headquarters) Singapore(Consolidated net sales) 15.9 bil. yen ( FYE March 2018)(Consolidated no. of employees) 1,021 (December 2019)

Lantrovision (S) Ltd

Further integration

Daimei Telecom Engineering
Corporation
Established in December 1944
(Net sales) 115.6 bil. yen(No. of employees) 3,030

MIRAIT Corporation

MIRAIT Holdings Corporation

Reorganization of small operations acquisition of full ownership in subsidiaries
Active use of M&A, etc. to acquire technologies and resources that the Group lacks⇒ Air conditioning, sewerage pipeline, new energy, ICT, Software, Global

October, 2018
TTK Co., Ltd.
(Headquarters) Miyagi Sendai(Consolidated net sales) 32.4 bil. yen (FYE March 2018)(Consolidated no. of employees) 1,088 (December 2019)

January, 2019
SOLCOM Co., Ltd.
(Headquarters) Hiroshima(Consolidated net sales) 42.5 bil. yen (FYE December 2017)(Consolidated no. of employees) 1,569 (December 2019)

January, 2019
Shikokutsuken Co., Ltd.
(Headquarters) Ehime Imabari(Net sales) 22.7 bil. yen (FYE March 2018)(No. of employees) 669 (December 2019)

Strengthening the group’sbusiness operations
Expansion ofBusiness Domains

43. The Company’s Initiatives Since Establishment

4nd MTP (~ FYE March 2022)
Target: net sales 450, operating income 27 bil. yen. (6.0%), ROE More than 8.0%

1st MTP (~FYE March 2014)
Mid-term plan

3nd MTP (~ FYE March 2021)
Target: net sales 340,
operating income 17 bil. yen. (5.0%)
ROE More than 8.0%

2nd MTP (~ FYE March 2017)
Target: net sales 310,
operating income 17 bil. yen. (5.5%)

Target: net sales 280,
operating income 12 bil. yen. (operating income ratio 4.2%)■ Historical Performance (Unit: bil. yen)

※ Revised in FYE March 2019

400

25.0

200

12.5

0

2011.32012.32013.32014.32015.32016.32017.32018.32019.3

Net sales (LHS)

246.6

236.0

271.0

277.7

283.7

269.5

283.2

312.9

375.9

Operating income (RHS)

4.9

5.2

10.8

11.4

14.1

6.1

10.0

16.7

20.6

2.0%

2.2%

4.0%

4.1%

5.0%

2.3%

3.5%

5.3%

5.5%

Operating income margin

Net Sales by
Business Category

ICT/Civil
Engineering
28％
Mobile28%

Environment
and ICT
29％

NTT
44％

NTT
36％

Software(ACTIS/Practical)
Strengthening of areas(Okisokou)

Improving
efficiency

Improvement of productivity in NTT business
Consolidation of business locations
through optimization of area operations

Strengthening business basePromotingsynergies

Consolidation ofhead office (Tokyo)

Solar + Rechargeable battery(MIRAIT X)
Global(MIRAIT Technologies Australia)

Software(TIMETEC)

25％
Net sales +45.7 bil. yen

Net sales +33.6 bil. yen
Library business(Libnet)Software(Trust-System)
Temporary staffing(Hope Net)

Strengthening the business base
(TTK, SOLCOM, Shikokutsuken)
Building/ energy(Nishinihon Denko)

System integration/
Standardization of business processes

Mobile（Toei）
Electrical（Tsukada）

Global（MIRAIT Technologies Myanmar、Lantrovision）

Reorganization ofsubsidiaries

34％

41％

27％

Net sales +21.7 bil. yen
Expanding thebusiness through
M&A

35％

38％

Multi-carrier
35％

SewageAir conditioning(Nissetsu) (Katakura Kensetsu)【FYE Mar 2019】【FYE Mar 2017】【FYE Mar 2014】【FYE Mar 2011】

0.0

Smoothing of workload for mobile work
Consolidation of offices/ consolidation of support operations

Unification of core systems (accounting and personnel)

Improved efficiency through the establishment of administrative
Project to reduce administrative expenses
business center (MBC) and consolidation of subsidiary operations
Unification
Promotion of the utilization
Start of CMS Consolidated tax payment Merger of Daimei and Todentsu
of pension systemsof idle real estate

Enhance business base by growing
own assets
Enhanced group-oriented management54. Future Focus Areas (Frontier Domains)
Zone
DomainCloud &
Networks

Smart Office

Smart Town

Smart House• Security (Surveillance cameras, network monitoring)

Stock business &Operations

Frontier Domains

Cloud&
Networks

Wi-Fi• Disaster prevention networks• LAN, PBX• Sensor networks• Drone・ ICT for educational facilities • IoT (water supply smart meters)• ITS (self-driving)• Cloud (Servers, Network)

SoftwareEnvironment & Energy

Stock business&
Operations

Global• Data centers• Operation centers(Network maintenance, help desks)• Solar power facility operationand maintenance• Batteries + solar power
maintenance• Wi-Fi + digital signage (Digital information stands “PONTANA” )• Stadium Wi-Fi• Hotel Wi-Fi
NTT

Base Domains

Wi-Fi(Guest room tablets (ee-TaB Plus))• Office and educational Wi-Fi
Civil engineering• Convenience store Wi-Fi• Home Wi-Fi• Subway Wi-Fi• Local government Wi-Fi

MobileSoftware• Aiming to be the best partner for major SIers (finance, insurance, public sector)• Unique app development (WFM, libraries, Wi-Fi solutions)

KAIZEN

AlliancesGroup management

Human resource
development• Building related equipment(Solar power, EV chargers, LED, BEMS, access control systems)

Environment&
Energy• Air conditioning(Batteries, EV chargers, LED street
lights)• Building solar power plants• Carrier business (4 countries)

Business Foundations• Disaster prevention measures

Global• LAN cabling work
(13 countries)• Batteries + solar power• Intake of electrical power for
entire apartment buildings• HEMS

Pursuit of synergies(Domestic customers, overseas customers, building solutions)65. Outline of New Medium-term Management Plan
■ Business environment■ Theme of New Medium-term Management Plan Upcoming era of 5G and advanced mobile services
 Development of new ICT technologies and IoT(cloud, use of drones, etc.)
 Building of leading-edge/ advanced infrastructure in light of the2020 Tokyo Olympics/ increase in inbound tourists.
 Progress in labor-saving and automation to resolve issue ofshortage of labor Increase in new energy-related facilities and social infrastructure

Tailwind for the MIRAIT Group■ Key initiatives
 Generate new business opportunities
 Accelerate transformation of business structure Enhance productivity and reduce costs through efficient operations
 Strengthen human resources Promote ESG-oriented management, safety and quality initiatives
 Capital policy■ Net sales■ Targets （FYE March 2022）

Net sales Aim to be a company that contributes to the “smart society”, throughinitiatives to enhance competitiveness amid the changing businessenvironment with the upcoming era of 5G, penetration of IoT and launchof new services that combine various technologies.

(Unit: bil. yen)
450.0

450.0 bil. yen

430.0

Mergerimpact375.9

Operating income

27.0 bil. yen

Mergerimpact312.9

Operating income
ratio
ROE

Shareholder
return policy

6.0%

Environmental& Social
ICT

MergerimpactMore than 8%
 Stable and consistent payment of dividends.
 Comprehensive decisions to be made taking into
consideration the Company’s business results andcash position, based on the rough total return
ratio of more than 30%.
 Shareholder returns to be considered with theobjective of achieving ROE of more than 8%.

Multi-carrier
MergerimpactFYE Mar 2018

FYE Mar 2019

FYE Mar 2020

NTT

FYE Mar 2022

7

6. Key Initiatives under the New Medium-term Management Plan
Generating new business opportunities Support regional development by leveraging the expanded regional coverageachieved through management integration.
 Help resolve social issues by combining business domains and technologies.
NTT×※ Frontier domains include multi-carrier (global), environmental & social innovation and ICT solutions.

LPWA【Net sales】

Base Domains

Frontier Domains

FYE 3/2014

FYE 3/2020

FYE 3/2022

５G

Combining business domains
and technologies
EV/
Sensors
rechargeable Software
Old batteries
Dronesinfrastructure
Datacenters

Environmental& Social

Support regional development

6 companies

BIGDATAAI
New energy

GlobalFYE 3/2023

IoT

RobotsExpanding regional coverage Accelerate the transformation of the business structure (shift from base domains
to frontier domains) to achieve business growth, and promote the shift to quality
within the frontier domains (profit-oriented).

Multi-carrier

Disaster
Fixed-line
infrastructure prevention WiFi
HikariCivil
engineering Collaboration

Transforming the business structure

29%

46%
31%

71%

43% 430.0 bil. yen

277.7 bil. yen

57%

49%
34%
450.0
bil. yen
46%

69%
54%

ICT

Help resolve social issues

54%

50%

66%
51%
Former Group(3 companies)

Aim to be a company that contributes to the “smart society”

3 merged companies

Strengthening human resources

Promote ESG-oriented management

 Become a company that attracts talent - a company that can fully exploit theenergy and competency of each employee and as a team, where each employee
can feel healthy and motivated at work to discover his/her potential.

 Contribute to SDGs through all business activities; identify business risks andopportunities from a broad perspective to enhance ESG and to take appropriate
measures.

Comprehensive Engineering andServices Company
Attractive

Challenger

Highly productive

Transform operational and cost
structures
Improve productivity to enhance costcompetitiveness

Enhance work-life balance

Promote diversity

Develop skills and secure the health ofeach employee

Establish an organization that engages
diverse talent50%

Key themes
Build and protect
systems to realize aconveniet society（Business activities）

Challenges• Building, maintaining and renewing social infrastructure• Promoting “smart lifestyles”• Building a disaster-resilient community

Build and protect safe
and securetechnologies（safety/ quality, HR）• Strengthening technology development/ engineering
capabilities; fostering human resources• Continuous improvement of safety and quality• Promoting diversity• Workstyle reforms = work-life balance

Build and protect ourtrust with society• Corporate governance• Environmental initiatives through business activities• Resolving labor/ safety/ environmental/ human rights
issues at suppliers• Regional development

8

II. Performance and Financial Overview

1. Historical Performance(6-month (Oct-Mar) results for TTK and 3-month (Jan-Mar) results for Solcom and Shikokutsuken are reflected in FYE3/2019 consolidated financial results)

 FYE 3/2019: Posted record-high net sales and operating income, thanks partly to the contribution of newly merged companies.
 FYE 3/2020: Net sales forecasted to reach 430.0 bil. yen and operating income to reach 21.5 bil. yen, achieving record-high sales and profits for the fourthconsecutive year on the back of expansion in mobile work and Osaka No. 1 Datacenter operations, and full-year contribution of newly merged companies.

Units: bil. yen

FYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

FYE March 2020
(Plan)Net sales

269.5

283.2

312.9

375.9

430.0

NTT

95.1

98.2

100.5

128.3

155.0

Multi-carrier

76.1

76.9

84.1

92.5

98.0

Environmental & Social
Innovation

53.6

42.0

43.6

56.3

74.0

ICT Solution

44.5

65.9

84.6

98.7

103.0

Gross profit

25.8

33.5

39.7

46.9

50.5

Gross profit margin

9.6%

11.8%

12.7%

12.5%

11.7%

SG&A

19.7

23.4

23.0

26.2

29.0

SG&A ratio

7.3%

8.3%

7.4%

7.0%

6.7%

Operating income

6.1

10.0

16.7

20.6

21.5

Operating income ratio

2.3%

3.5%

5.3%

5.5%

5.0%
10

2. Financial Overview for the Nine Months Ended December 31, 2019(※FYE 3/2019 Q3 results reflect those of the former group (Mirait, Mirait Technologies and Lantrovision(S)Ltd) and 3-month (Oct-Dec) results for TTK.)FYE March 2019

FYE March 2020

Units: bil. yen
Q3 actual results Q3 actual results

Key Highlights for Q3

YoY Change

Amount%Orders received

267.2

334.5

+ 67.3+ 25.2%

Net sales

230.0

288.5

+ 58.5+ 25.4%

NTT

74.4

102.2

+ 27.8+ 37.4%Multi-carrier

59.5

61.5

+ 2.0

+ 3.4%

Environmental &Social Innovation

33.1

43.3

+ 10.2+ 30.8%ICT Solution

62.9

81.3

+ 18.4

28.2

31.2

+ 3.0

（12.3%）（10.8%）（- 1.5p）

Gross profit(Gross profit margin)

SG&A

18.4

22.1

+ 3.7

(SG&A ratio)（8.0%）（7.7%）（- 0.3p）

Operating income

9.8

9.0

- 0.8

(Operating income ratio)（4.3%）（3.1%）（- 1.2p）

Ordinary income

10.8

10.3

- 0.5

(Ordinary income ratio)（4.7%）（3.6%）（- 1.1p）

8.7

6.3

- 2.4

(Net income ratio)（3.8%）（2.2%）（- 1.6p）

Construction accountcarried forward

165.4

191.0

+ 25.6

Net income+ 29.3%+ 10.6%

・Net sales up by 58.5 bil. yen yoy
・Operating income down by 0.8 bil, yen yoy⇒Some delays in work for mobile carriers; provisioning for possible
losses on unprofitable projects
・Orders maintained at high levels⇒Promoting completion of existing projects to achieve full-year forecast
Orders received: 334.5 bil. yen (+67.3 bil. yen yoy), with growth across all businesscategories
Orders received(Unit: bil. yen)

- 8.2%- 4.6%- 27.6%―

Q3 actual results

FYE March 2020
Q3 actual results

YoY Change

Multi-carrier

88.8
70.5

113.8
81.8

+ 25.0+ 11.3

Environmental &Social Innovation

35.2

38.6

+ 3.4

72.6
267.2

100.2
334.5

+ 27.6+ 67.3NTT

ICT Solution+ 20.1%FYE March 2019

Total

Net sales: 288.5 bil. yen (+58.5 bil. yen yoy), thanks to growth in businesses in the frontierdomain, in addition to the contribution of newly merged companies.
Gross profit: Up by 3.0 bil. yen yoy to 31.2 bil. yen, but gross profit margin dropped due tothe provisioning for possible losses on unprofitable projects and due to changes in thebusiness portfolio.
SG&A: 22.1 bil. yen (+3.7 bil. yen yoy), but SG&A ratio improved by 0.3p given efforts to
reduce overhead costs.
Construction account carried forward: Recorded a historically high level of 191.0 bil. yen(+25.6 bil. yen yoy).

11

■ Detailed Analysis of Operating Income [YoY Comparison]■ Detailed Analysis of Net Sales [YoY Comparison]
NTT: Contribution of newly merged companies, but decrease in access-related work
completed.
Multi-carrier: Partial delays in mobile work.
Environmental & Social Innovation: Increase in large-scale solar and civil engineering
projects completed.
ICT Solutions: Decrease in work to resolve TV interference, but increase in sales from
LAN/PBX work, software development and sales of goods.

Net sales(Unit: bil. yen)○positive factors▲negative factors

59.5⇒61.5○Contribution of newly merged companies▲Partial delays in mobile work

62.9⇒81.3○ Increase from LAN/PBX. software and sales of goods▲Decrease in work to resolve TV reception interferenceImpact of increase in net sales: +7.2 bil. yen
Drop in gross profit margin doe to changes in business portfolio and due to theprovisioning for possible losses on unprofitable projects.
Increase in SG&A due to addition of subsidiaries through mergers: -3.7 bil. yen

Operating income○positive factors▲negative factors▲Decrease due to changes in business portfolio▲Provisioning for unprofitable projects

Increase in net
sales

ICT

NTT

Multicarrier

Environmental& Social+ 2.0+ 10.2(Unit: bil. yen)

Drop in grossprofit margin- 4.3+ 18.4+ 7.2

YoY change + 58.5

+ 27.833.1⇒43.3○Contribution of newly merged companies○Increase in mega solar projects and civilengineering projects completed.

Increase in
SG&A

- 3.7

288.5
YoY change - 0.8

230.0

FYE Mar 2019Q3

74.4⇒102.2○Contribution of newly merged companies▲Decrease in access-related work

9.8

FYE Mar 2020
Q3

FYE Mar 2019
Q3

○Net sales: 230.0⇒288.5▲Increase in SG&A due to addition ofsubsidiaries through mergers

9.0

FYE Mar 2020
Q3

12

(Reference) Financial Overview for the Nine Months Ended December 31, 2019 (Former Group)* Former Group is Mirait, Mirait Technologies and Lantrovision.
FYE March 2019

FYE March 2020

Units: bil. yen
Q3 actual results Q3 actual results

Key Highlights for Q2

YoY Change
Amount%Orders received

243.8

257.7

+ 13.9+ 5.7%Net sales

222.3

228.4

+ 6.1

+ 2.7%

NTT

68.6

66.2

- 2.4

- 3.5%

Multi-carrier

58.5

54.3

- 4.2

- 7.2%

Environmental &Social Innovation

32.8

38.4

+ 5.6

+ 17.1%ICT Solution

62.5

69.3

+ 6.8

+ 10.9%・Net sales up by 6.1 bil. yen yoy, thanks to growth in the frontier domains(Environmental & Social Innovation, ICT), which more than offset thedecrease in the base domains (NTT, Multi-carrier) caused by delays inwork for certain mobile carriers・Operating income down by 2.0 bil. yen yoy due to delays in work forcertain mobile carriers and due to the provisioning for possible losses on
unprofitable projects
Orders received: 257.7 bil. yen (+13.9 bil. yen) due to growth in Multi-carrier and ICT.
Orders received(Unit: bil. yen)

26.9

25.3

- 1.6

（12.1%）（11.1%）（- 1.0p）

SG&A

17.7

18.1

+ 0.4

(SG&A ratio)（8.0%）（7.9%）（- 0.1p）(Gross profit margin)- 5.9%

Operating income

9.2

7.2

- 2.0

（4.1%）（3.2%）（- 0.9p）

Ordinary income

10.2

8.1

- 2.1

(Ordinary income ratio)（4.6%）（3.5%）（- 1.1p）

7.4

4.6

- 2.8

（3.3%）（2.0%）（- 1.3p）

Net income(Net income ratio)

Q3 actual results

YoY Change

Multi-carrier

71.7
70.6

- 0.1
+ 3.1

Environmental &Social Innovation

33.6

31.8

- 1.8

70.9
243.8

83.5
257.7

+ 12.6+ 13.9ICT Solution

Total(Operating income ratio)

Q3 actual results

FYE March 2020

71.8
67.5

NTT

Gross profit

FYE March 2019

+ 2.3%

Gross profit: 25.3 bil. yen (-1.6 bil. yen yoy) due to drop in gross profit margin reflectingchanges in the business portfolio and the provisioning for possible losses on unprofitableprojects.

- 21.7%

SG&A: Slight increase to 18.1 bil. yen (+0.4 bil. yen yoy); SG&A ratio flat. Increase in costs
associated with systems upgrade and M&A.

- 20.6%

Operating income: 7.2 bil. yen (- 2.0 bil. yen yoy)

- 37.8%13

III. Shareholder Returns

1. Shareholder Returns
 FYE3/2020: Annual dividend forecast of 40 yen per share (interim: 20 yen, term-end: 20 yen); in addition, executed share repurchase of 10.4 bil. Yen(2.48 bil. yen in May and 7.96 bil. yen in September), translating to a total shareholder return ratio of 97%.
 Exercised call options on convertible bonds in 12/2019 (total amount: 15.5 bil yen). Allotted treasury shares for all amounts, including the partial execution in 9/2019(total amount: 1.0 bil. yen) to avoid dilution.
 No change in basic shareholder return policy of the Company: comprehensive decisions on shareholder returns will be made based on the Company’s basic policy to pay
dividends consistently and its total shareholder return target of more than 30%, while also taking into consideration the Company’s business results and cash position,
among other factors.

■ Shareholder Returns

Total dividends (left)(Unit: bil. yen)

Share repurchase (left)

Total return ratio (right)

96.9%

15.0

100%

76.6%

67.2%

7.9
7.5

50%

24.1%

23.6%

2.5
3.8

2.5
0.0

2.4

2.4

2.7

3.7

FYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

0%

FYE March 2020
(forecast)

Total dividends

2.4 bil. yen

2.4 bil. yen

2.7 bil. yen

3.7 bil. yen

4.0 bil. Yen

Net income

3.6 bil. yen

6.4 bil. yen

11.5 bil. yen

25.7 bil. Yen

15.0 bil. Yen

Annual dividends
per share

30 yen30 yen35 yen40 yen40 yenNo. of shares outstanding (thousands)

85,381

85,381

85,381

108,325

108,325

No. of treasury shares (thousands)

4,050

5,985

5,840

6,418

477

Share repurchase－

2.5 bil. yen

ーー

10.4 bil.yen

Consolidated dividend payout ratio

67.2%

37.6%

24.1%

（Note）

13.5%（23.6%）

27.2%

Consolidated total return ratio

67.2%

76.6%

24.1%

（Note）

13.5%（23.6%）

96.9%

ROE

3.0%

5.2%

8.8%

（Note）

15.4%（9.4%）―(Note) Figures in ( ) for consolidated dividend payout ratio, consolidated total return ratio and ROE exclude the impact of negative goodwill from the recent acquisitions.

15IV. Trends in Each Business1. Trends in the NTT Business NTT’s investment activities continue to slow down, but non-capex work (accounted for by NTT as operating expense ), such as those to remove lead-in wires, remainabundant.
 Access work such as utility pole renewals will decrease, but the decline in sales will be offset through active facility management proposals and the expansion offacility management operations.
 Improve profitability by consolidating branch offices and generating synergies among the 5 group companies.
(integration of systems, controlling capacity utilization at the national level)■ Net sales■ Key initiatives
Initiatives（Unit: bil. yen）

155.0

160
128.3

80

95.1

98.2

100.5

35.1

36.6

32.1

Facility
improvement
proposals

52.8

53.9
36.5
102.2
Top: Q3 results
Middle: Q2 results
Bottom: Q1 results

33.7
60.0

68.4

61.6

74.4

Sales
growth32.0

Facility
management0
FYE Mar 2016

FYE Mar 2017

FYE Mar 2018

FYE Mar 2019

FYE Mar 2020(Plan)• Continued efforts to sell proposals⇒Commenced inspection by unit area (”area round”
method) in 7/2019; continued focus on faulty
equipment renewals• Facility renewal proposals through daily inspection⇒Renewal of faulty infrastructure equipment(e.g. maintenance hatches)

Expanding maintenance services⇒Expand services（Business-related, enhancing in-office collaboration,
network maintenance, in-office jumpers）⇒Expand coverage area

Capital investments by NTT East and NTT West
（Unit: bil. yen）

Consolidationof offices andupgrading ofwork
environment

600

583.4

547.9

549.6

541.0

300

520.0
Of which, opticalrelated work

177.0

156.0

154.0

161.0

150.0

FY2015FY2016FY2017FY2018FY2019(Plan)0

Source: MIRAIT from company information(Notes) 1. NTT figures based on IFRS from FY2017 (Regional communications business)
2. Figures for optical-related work from FY2018 reflect investment plans
submitted to the government.

ProfitgrowthStrengthening
group-oriented
operations• Consolidation of branch offices to improve productivity• Upgrade work environment to motivate employees

・Build a common pool of staff across the five JV
companies for construction work and engineering, etc.
・Share initiatives across the five companies; improveearnings by setting benchmarks, etc.
• Enhance efficiency through systems integration

17

Sales growth through facility improvement proposals

Consolidation of branch offices/ upgrading of work
environment Commenced “area round method”, which involves the grouping of maintenanceareas and the inspection of each unit area every five years (7/2019~).
New method
Conventional methodTokyo

5th year

Improved
Productivity

Base

Location

Third
year

4th year

Narita Building(under construction)

Secondyear

Chiba

Consolidation of branch offices【Naganuma Building】
Completed 1/2020

Chiba

Consolidation of branch offices【Narita Building】
Scheduled for 7/2020

Saitama

upgrading of work environment【Tokorozawa Technical Center】
Scheduled for 5/2020（5-year round method）

Enhanced safety and quality●Use of ICT:safe and efficient inspection

DronesTablets
Cameras【Expand facilities for inspection】●AI image analysis:consistent and accurate
evaluation●Inspection of NTT facilities
for other companies’ poles

Growth in facility management operations＜Net sales growth (nationwide) ＞（Unit: bil. yen）
20

【Network machine room】

Increasedue tomergerGive instructions for/support onsite repairs

Tablets⇒Procedures/manuals

Tokorozawa(Under construction)

Strengthening group-oriented operations
Sharing of staff

Integration Synergies

 West Japan maintenance area expanded(on-premise +network)
601 buildings ⇒1,015 buildings （+414）
 Use of ICT for remote network
maintenance support【Remote center】

10

Consolidation of branch offices【Ikebukuro Technology Center】
Completed 2/2019

Base：Poles to be inspectedin current year

Advanced evaluation method

Office (image)●Achieve early disaster recovery by sharing staff across different
office locations
KAIZEN initiatives●Hold KAIZEN meetings at the group level to share common
initiatives●Deploy common initiatives to improve efficiency using IT●Improve earnings by comparing cost structures

Cameras⇒Sending of site photographs●Technical support provided remotely02017.32018.32019.32020.3(Plan)●Prevention of accidents by remote center confirmation

Systems integration●Cost reduction by integrating systems(currently under development)18

2. Trends in the Multi-carrier Business Work to build facilities for pre-launch of 5G services; launch of construction consulting service for commercialization of 5G-related services.

 Sales growth with work for new frequencies (1.7GHz/3.4GHz) gaining full momentum and start of work for Rakuten Mobile.
 Mobile carriers’ capital investments remain at high levels for advancement of 4G (3.5GHz, 700MHz).

■ Net sales■ Key initiatives
Initiatives（Unit: bil. yen）

92.5

100
76.1
26.2

76.9

Growth in workforadvancements
in 4G/ newfrequencies

98.0

84.1
29.0

33.0

36.5

31.5

50

22.8

49.9

45.4

55.1

59.5

21.3

61.5

Sales growth

Top: Q3 results
Middle: Q2 results
Bottom: Q1 results• Olympics areas

Work toimprove
reception
quality• Regional road tunnels• Regional areas with poor reception

17.4
0
FYE Mar 2016

FYE Mar 2017

FYE Mar 2018

FYE Mar 2019

• Start of work for Rakuten Mobile

Expandingbusinessdomains

FYE Mar 2020(Plan)• 5G-related work
⇒Preparation, verification tests, network construction• Initiatives for infrastructure sharing

Capital investments by the three major mobile carriers

Promotingefficiency• Use of systems to enhance efficiency of administrativeand on-site operations⇒Project and site management systems⇒On-site management tools (such as i-Construction※)⇒Use of RPA（Robotic Process Automation）
・Efforts to smooth operational workload

Enhancing work
capabilities• Cooperation with subsidiaries to enhance work
capabilities⇒Acquired 100% ownership in Toei Telecommunication(6/2019)⇒Seconding of employees（Unit: bil. yen）

2,000
1,539.1
412.5
1,000

531.4

1,583.9
8.3

1,437.0

1,491.1
3.3

320.5

350.0

380.2

560.8

601.7

519.4

1,797.1
187.1
430.0

610.0

RakutenProfit growthSoft Bank

595.2

597.1

577.0

593.7

FY2017FY2018570.0

KDDINTT Docomo

0
FY2015• Promote 3.5GHz/700MHz-related work
⇒Group-wide support to boost resources⇒Enhance administrative processes and progress
management• Measures in light of launch of 1.7GHz/3.4GHz services

FY2016

Source: MIRATI from company information

FY2019(Plan)(Notes) 1.NTT figures based on IFRS from FY2017
2. SoftBank figures prior to FY2016 reflect capital investments for the domestic telecommunications business of the SoftBank Group
3.Rakuten figures reflect total mobile-related capital investments

Global• Sales growth to improve profits (Australia)• Take measures to stabilize operations following thedecline in sales (Myanmar)※i-Construction is a MLIT initiative to improve productivity at construction sites

19

Initiatives to improve efficiency and synergies in the mobile business

Trends in mobile business (5G)
 Network to be established based by 10km grids in all urban and regional potential industrial
areas nationwide
2019年⇒ 5G base stations (parent station) to be set up in more than 50% of the grids within 5 years⇒ Service to be launched in all prefectures within 2 years

Promote development of operational tools and systems
Optimal ordering system currently under development

 Illustration of 5G network (at initial launch in 2020)

Improve productivity through group-wide deployment

4G（LTE）area

Small cell（radius of up to100m）

Micro cell
（ 2～3km radius）

Sales ordermanagement

Nationwide
network of
microcells
Anticipatedconstruction
locations

Additions toexisting sites

Windows onlower levels

Sign boards on Utility poles andlower levels
street lights

Building walls of
lower levels

 Testing services such as ① locating golf balls and ②streaming play images incollaboration with NTT Docomo and partner companies
Golf course

System[Camera]Locate golf ball using
smartphone○○
operation[5G terminal]

5G

Review operational processes

5G network

１８Ｈ

Par5/502Yard

4°
Direction

 Established and launched collaboration structure to maximize use of group
resources in order to expand orders, sales and profits

Challenges and potential initiatives①

Analyze shot and locationof ball using MEC

5G

Invoicingandpayment

Establishment of integration process and collaborative organization

Verification of idea from MIC contest (golf course operations using 5G technology)➊ found

DesignConstruction On-site
Costmanagement accounting management support

Develop tools and Use RPA

Initiatives for 5G services

High-speed
uploading ofplay records

ContractOn-sitesupportsystemPromote “i-construction”

Top of midrise buildings

Walls of mid-risebuildings

Project management system

Early set-up of 5Gbase stations

Horizontal application of systems

5G area

14°
Angle

Spin

Comparing/improving cost structures

Centralization of common operations

Improve outsourcing / indirect cost structure

Identify / streamline common operational processes

Improve efficiency of on-site operations

Developing human resourcesGroup-wide deployment of systems and tools

Sharing of skills and group-wide training

Efficient operation of branch offices

Sharing resources to improve utilization

Sharing assets between offices/ consolidation of branches

Use of subcontractors/ subsidiaries to improve utilization[Mobile Edge Computing]

5G➋[5G base station

NiceShotLive streaming of highresolution images② Send high-resolution images with low latency
1
Live

2
Play

3

2

ReplayZoom

Consider initiatives for each carrier business
Launched task force to design detailed initiatives20

3. Trends in the Environmental & Social Innovation Business Net sales growth due to increase in completed projects for mega-solar and civil engineering.
 In solar power, shifting from mega-solar projects to work for self-consumption solar power systems (roof-top solar panels at multiple stores) and O&M business.
 Focus on growing orders for infrastructure-related construction work toward 2020(laying of power lines underground, EV chargers, LED installment for street lights, road-side lighting facilities)■ Net sales■ Key initiatives
Initiatives（Unit: bil. yen）

56.3

53.6
40

【Solar power】• Roof-top middle solar facilities + rechargeable batteries(self-consumption power systems)⇒home centers, transport co., drug stores, etc.

74.0

80

20.0

33.6

42.0

43.6

19.5

18.1

22.5

25.5

FYE Mar 2017

• O&M (as of end-9/2019)⇒14 power generation facilities across Japan

23.2

33.1

16.8

43.3

15.0

Top: Q3 results
Middle: Q2 results
Bottom: Q1 results

New
Energy11.5

0
FYE Mar 2016

30.7

FYE Mar 2018

FYE Mar 2019

【Other new energy】
・EV chargers⇒Collaboration with manufacturers

FYE Mar 2020(Plan)■ Breakdown of net sales（Unit: bil. yen）

Civil
engineering,
etc.

74.0

80
56.3

53.6
42.0

EV charging

43.6• Mega-solar construction work
⇒3 projects completed in FY2019 （6MW）⇒10 projects ongoing （191MW） in various locations
nationwide• Expand work to lay power lines underground(Net sales target 3.8 bil. yen)
⇒Around venues for Tokyo Olympics• Sewage pipeline work for Tokyo⇒Acquired Tokaikoei and Miyako Construction（Total sales in FY2018: 2.0 bil. yen）
Laying of power lines
underground

Battery40

EV chargers

Solar power• LED installment work for municipalities

Civil engineering
Electric, airconditioning

0
FYE Mar2016

FYE Mar2017

FYE Mar2018

FYE Mar2019

FYE Mar
2020(Plan)

Electrical/
lighting• Instalment of lighting facilities in highways• Business expansion through newly acquired subsidiaries⇒Nishinihon Denko (Kyushu), Tsukada Electrical
Construction (Tohoku)

LED installment
work

21

Initiatives in civil engineering

Initiatives in solar power-related business Project in Ponto-cho, Kyoto to lay power lines underground: Adopted various new
construction methods for work in narrow roads.
【Key features】
・Use of large construction machinery difficult due to requirement to preserve landscape・New methods adopted to shorten the construction period.
BeforeReducing space undergroud

From FIT to self-consumption systems + O&M
2010～
Household power
generation2012～
Large-scale power generation
(FIT)

2019～
Self-consumption
power systems

Self-consumption solar power（demand driven by roof-top solar power + rechargeable battery + HEMS）

After⇒ work for supermarkets, home centers, housing
manufactures

Roof-top solar power work

Building “smart communities” using IoT（Public housing for disaster-affected victims in Namie-machi)Household solar
power
HEMS

Installment work
Smart community

rechargeable
battery※Construction method and quality of work was highly regarded, which led to additional orders
to lay power lines underground.
<Comparison of Rate of Elimination of Power Poles
with Other Countries>
London/Paris/ Hong kong(2004）

100%

Singapore（2001）

100%

seoul（2017）
Tokyo 23 wards（2017）＜Net sales for work to lay power lines underground＞

2

 Increase in work to install LED street lights for municipalities to reduce power
consumption and to prevent crime.

0 Increase in work to install lights and ETC equipment in highways to upgrade
facilities and to prevent accidents.

2017.3
Source: Created by MIRAIT based on materials published by the
Ministry of Land, Infrastructure, Transport and Tourism

2018.32019.32020.3（Plan）＜Net sales＞

 Water utility conduit work

（Unit: bil. yen）
1.5

Large propulsion project awarded by Tokyo Met. Water Bureau
Installment of propulsion machine

Initiatives for road lighting facilities-related work

4

49%
8%

Solar power O&M⇒Monitoring and maintenance of mega-solar facilities
using own operation center

Operation center

Launch of new 3-year plan
（MILT）EMS that achieves local
production/ local
consumption using
LoRaWAN

1.0

Φ800mmpropulsion machine

0.5

Hume pipe propulsion

Installment of LED
street lights

Road-related work

0.0
2017.32018.32019.32020.3（Plan）

22

4. Trends in the ICT Solution Business Actively cultivate Olympics-related business opportunities （LAN, Wi-Fi, security-related, etc.）

 Expand regions and business domains at Lantrovision.
 Sales to decrease for work to resolve 700MHz TV reception interference.

■ Net sales■ Key initiatives
Initiatives（Unit: bil. yen）

110

98.7
84.6
65.9

55

44.5

21.7
35.8

27.2

81.3

42.0

57.4

62.9

29.6

Top: Q3 results
Middle: Q2 results
Bottom: Q1 results

22.3

Stock Business/
Data Center

0
FYE Mar 2016

FYE Mar 2017

FYE Mar 2018

FYE Mar 2019

FYE Mar 2020(Plan)■ Breakdown of net sales
110

98.7

103.0

84.6
65.9

Cloud/ NW

Osaka No.1
Data Center

Stock Business※Hyper Converged Infrastructure.
Reduces operational burden by adopting simple infrastructure that combines server, storage andvirtual functions.

Wi-Fi
Goods Sales
Other
Broadcasting0
FYE Mar2018

FYE Mar2019

FYE Mar
2020(Plan)※ Software Defined Wide Area Network
Improves NW performance and cost reduction through software routing (connection)⇒Use of HCI※ virtualization platform technology

LAN・PBXFYE Mar2017• Contact center solutions
Promote proprietary product “Casting Table 3.0”
（as of end 9/2019） adopted at 76 companies/ 287 locations⇒Promote the use of cloud and expand stock business

Wi-Fi

Software

44.5

FYE Mar2016• Expand services through network DC⇒Floor OEM service⇒Total DC management service⇒Virtual network DC service• Meet corporate customers’ need to adopt advanced technologies⇒NW creation using SD-WAN※（Unit: bil. yen）

55

LAN cabling work

• Construction/ launch of operations at own datacenter（in full operation from 5/2019）

29.4

23.9

15.4
29.1

• Strengthen collaborative sales efforts with Lantrovision
LAN/PBX/
telecommunicati(domestic/ overseas)
ons equipment • ICT work for Olympics/ Paralympics facilitiies

103.0

Goods sales• Promote Wi-Fi installation⇒Hotel, retail facilities, stadiums, multi-store users, etc.
⇒High-security service （Log storage service, etc）
⇒Propose package with NW equipment and surveillancecamerasStadium Wi-Fi• PC and servers to schools (Shikokutsuken)• Mobile-related goods（Daimei Tsusan）

23

Initiatives in global businessInitiatives in datacenter business Net sales target for Group: 23.0 bil. yen Development and operation of own datacenter（of which ICT (Lantrovision): approx. 16.5 bil. yen, multi-carrier: approx. 6.5 bil. yen)

6/2018: Launched operations at Osaka No 1. Datacenter

Net sales: 0.1 bil. yen※Siri Lanka subsidiary is outside the scope of
consolidation

Lantrovision
Net sales forecast: 16.5 bil. Yen
Global network of offices in 28
cities across 13 countries/regions.

Net sales: 0.1 bil. yen

Myanmar5/2019: All floors occupied and running at full capacity

Japan

Sri Lanka

Osaka No.1 Data Center

Net sales: 0.7 bil. yen※Philippines subsidiary is anequity-method affiliate

Singapore

Philippines＜Lantrovision’s overseas business strategy＞

 Expand services through network DC
Rental DC

Own DC

Signs of changes in the business environment due touncertainties in the Asia region⇒Maintain sales volumes with a focus on largescale projects

Establish network in
response to client needs

Australia※Connect to leased datacenter via underground cable
to expand services leveraging know-how
accumulated through own datacenter operations.

Floor OEM service
Total DC management service
Virtual network DC service

Net sales: 5.9 bil. yen⇒Strengthen group-oriented operations throughreferral of clients within the group

Expansion⇒Expand regions and business domains

Initiatives in SD-WAN

Initiatives in Wi-Fi
 ee-TaB*(ee-TaB Plus®）⇒ ee-TaB* was launched in 2014 as a service platform in light of the upcoming 2020
Tokyo Olympic/ Paralympic Games.
⇒ Approx. 7,500 units have been installed in 35 facilities across Japan, including some of
the most renowned hotels. The high functionality of ee-TaB* enhances conveniencefor guests and productivity for hotel operators.
＜Installed units＞（Units）

 Respond to corporate customers’ need to adopt advanced technologies.
 Reduce network load due to use of Office365 and other public cloud through local
breakout.
 SD-WAN allows for quick set-up changes and centralized management of equipment.
＜Net sales from cloud/ NW-related work＞

SD-WAN

Cloud service（Unit: bil. yen）

Local breakout

Office365, etc.

Branch A

8,0002

Branch B
Internet
line

1
4,000
SD-WAN
Router

0
2014

2015

2016

2017

2018

2019

Centralized
management system
Closed area
network

Centralized management/ operation of router0
2017.32018.32019.32020.3（Plan）

24

5. Initiatives in New Solutions
Cultivating business opportunities in light of the Olympics
 The Mirait Group, being headquartered in the local area, is actively engaging in work
to build communications infrastructure and lay underground power lines in the Tokyo
Bay area.
 Expanding business by cultivating new business areas in collaboration with telecom
companies and major construction companies, in light of the upcoming 2020 Tokyo
Olympic Games.

■ Examples
Inbound demand

Mitsui Garden Hotel, etc.
（LAN、PBX、Wi-Fi）

Work to improve reception quality/ install cabling

Olympic Stadium, etc.

Cabling work

(Mobile sensors) Initiatives in drone business Offer wide range of services in areas such as facility inspection, measurement,
agriculture, disaster recovery, by leveraging the Company’s telecommunication
construction work capabilities (human resources and organization) as well as businessalliances.
①Human resources/ locations
・Drone school opened in Kumagaya and Kobe
⇒Approx. 500 pilots were trained in the 3 years up to 9/2019.
⇒Various courses offered to target planning, autonavigator, beginners, etc.
・Established “Drone Techno Port” for wide-area service⇒Established network of pilots through alliances primarily with partner
telecommunication construction companies （11 companies）⇒42 service locations nationwide with 110 pilots （as of 9/2019）②Systems
・Won order for all-weather drone systems from MLIT, Chubu Regional Development
Bureau, and Tohoku Regional Development Bureau⇒Chubu:7 units and Tohoku: 5 units to monitor rivers.
・Won order for drone lease in collaboration with NTT Finance.
⇒ Kobe City Construction Bureau

Mirait branch officeMirait Headquarters
Mirait branch office

Wi-Fi work

・”Everyday Drone” kitting service for Komatsu (alliance with Kinki Electric)⇒700 units maintained and kitting service provided in cooperation with Kinki Electric.
・“Surveying of rice field growing conditions” for Farm Eye(JV between Yanmar and Konica Minolta)⇒Trained pilots and photographed 2,000 ha in Tohoku and Kanto

Underground power lines

Makuhari Messe（High-speed Wi-Fi）

Roadside lighting③Alliances
・Inspection of telecommunication facilities/ station buildings and survey of disasteraffected areas outsourced from NTT Group⇒Inspection of approx. 200 telecommunication facilities and 20 buildings.

Koto-ku （areas near Olympic facilities)

・Awarded roof inspection service for Fukita City Budokan facility by Nankai Building Service⇒1/10 cost and 1/5 time for inspection compared to conventional method using
scaffolds, and safer.
Inspection of roofs

Survey ofdisasteraffected areas

Shinagawa-ku （Ooi Seaside Park）

Tokyo Bay area
Tokyo Metropolitan Expressway
Haneda No1 Route

Surveying rice fieldgrowing conditions25

6. Initiatives to Build a Stronger Business BaseStrengthening the group’s business operations

Overhead cost reduction effect (+700 mil. yen)

 Strengthen group-oriented management to enhance work capabilities, client baseand profit structure.

②

HD

ClientClient①■ Measures in 3/2020① Acquiring own assets and selling idle assets: +110 mil. yen
・Consolidation of branch offices to Ikebukuro Technology Center : 70 mil. yen
・Housing cost reduction with corporate housing for single employees: 40 mil. yen

Mirait, Mirait Technologies, TTK, SOLCOM, Shikokutsuken AllianceNTT

Multi-carrier(mobile)Solution(Env/ ICT)NTT subsidiaries

Mobilesubsidiaries

Solutionscompany
subsidiary.A

M&A
Conversion to full-time employment

Sub-contractors

M&A

Solutionsrelated company③

MergerAcquiring of fullownership

Subsidiary C② Reorganization of subsidiaries:
・Increase in profits from Toei acquisition:① Strengthening NTT and Multi-carrier businesses⇒Acquisition of Toei Telecommunication (6/2019)※ To be merged with Nisshin Tsuko in 4/2020
Docomo HQ③ Merger of subsidiaries, acquiring 100% ownership of subsidiaries⇒Mergers: Cotonet and Nara Construction; Solcom Meister and Ainet
Telecommunications (6/2019)＜ Operating income of subsidiaries of Mirait and Mirait Technologies ＞（Unit: bil. yen）

33

33

35

companies

36
3.0%

35
3.4%

3

1.7%

2.8

2.8

2015.32016.3

4.1

5.2

5.9

0

2%

0%
2017.32018.32019.3

Subsidiary（Profit contribution/ addition of staff）

Subcontra
ctor（Toei）③Other cost reductions:+ 520 mil. yen
・Reduction of retirement benefit expenses
60 mil. yen
・Reduction of management integration costs
260 mi. yen
・Reduction of other administrative expenses
200 mil. yen

4%

2.5%
1.7%

+50 mil. yen
50 mil. yen

Acquisition② Expanding solutions-related businesses⇒Merger with Tokaikoei and Miyako Construction(Environmental & Social Innovation business, effective 10/2019)6

Corporate housing for single
employees

Corporate housing for single
employees

Subsidiary B

OperatingincomeOperatingincome margin

Mirait HD

Management
integration
Mark-to-market

TTK
SolcomShikokutsuken

Reduced retirement benefit
expenses
Reduced management
integration costs
Reduced costs to list on stock
exchange26

7. ESG Initiatives
Strengthening Human Resources
through Integration Synergies

ESG Initiatives
E

Environment

・Contribute to penetration of renewable energy⇒Solar power EPC business・ Contribute to penetration of new energy⇒EV chargers⇒Rechargeable battery system

Mirait’s track record in solar
panel installation workMW
(generation capacity)
400

288
201
200
123

159

47
EV chargers

Rechargeable
battery system

02014 2015 2016 2017 2018

・ISO 14001 certification

S

Total number of qualifications
11,500 ⇒ 17,000 （+ 5,500）

1,583

984 1,143

875

828

1,742

2016 2017 2018 2019

On-ground technicalradio operator, etc② Grow the number of qualified staff
・Identify qualifications of priority
・Encourage staff to attain multiple skills

1,153
1,078

③ Achieve more diversity
・Hiring and training of engineers to respond to clients’ needs
・Strengthen human resources at subsidiaries

978

894

865

910

2016 2017 2018 2019

※Red indicates MRT, MTC; blue indicates total of MRT,MTC,TTK, Solcom and Shikokutsuken

Society・Contribute to the local society⇒Building of infrastructure（construction work for telecommunications networks,
surveillance cameras, highways, water utility networks, etc.）⇒Early rebuilding of infrastructure following majordisasters such as typhoon and earthquakes.

KAIZEN Activities and Workstyle Reform
Rebuilding of utility
poles and cables

・Building hard and soft systems for safety⇒Safety patrol⇒Cloud-based drive recorders
・Promoting diversity （hiring women, elderly and disabled individuals）⇒ Highest “Eruboshi” certification awarded, etc （Mirait Technologies)

G① Increase in construction/ qualified staff due to recent mergers
Construction staff
6,900 ⇒ 9,150 （+ 2,250）

Electrical engineer①KAIZEN activities
・Achieve “zero accidents (Safety) ” and “highest Quality” through Kaizen activities by the
12300 employees of the Mirait GroupANZENHINSITSU KAIZEN“AKH123” Activity
・Promote autonomous and voluntary Kaizen activities (74 KAIZEN Fellows as of 9/2019)
Goods and work methods developed and improved throughKaizen proposals; adopting RPA to improve operations

No. of proposals

16,794

18,37910,298

Deploy and improve
quality of porposals

Governance・Strengthen corporate governance⇒Establish and manage internal control system⇒Issues handled by Compliance Committee and Risk Management Committee⇒Self-assessment of effectiveness of Board of Directors⇒Nomination and Compensation Committee chaired by outside director
・Secure shareholders’ rights and equality⇒Management decisions with a focus on capital costs⇒Enhance constructive dialogue with shareholders

input

14,727

2015

2016

2017

2018

Data

calculation
DB

Recovery of mobile
base stations
Data

Optical cable
光ｹｰﾌﾞﾙ自動算出ﾂｰﾙ
calculation tool

Training for RPA②Workstyle reform
・Proper management of overtime work and annual paid leave・Introduction of flexible working hours, irregular workstyles and telework
・Upgrading of operational tools to enhance efficiency(going paperless, reducing business travel)
・Use of ICT to achieve efficiency (RPA, i-Construction)

27

V. Reference Materials

1. Business Overview(1) Business Overview
 The MIRAIT Group’s business is centered on the construction of communication infrastructure (for fixed and mobile communication), but the Group is also engaged invarious other businesses in areas such as ICT, the environment, and energy.

■Overview of business categories■ Cloud computing, office solutions, Wi-Fi, software, Broadcasting, etc.
■ Construction, maintenance and operation of telecommunication systems f general companies, etc.

(Unit: bil. yen)

450

430.0

375.9

103.0

312.9

300

269.5
ICT
44.5

■ Environmental/ new energy, building of social infrastructure, construction and maintenance ofelectrical and air conditioning facilities

98.7

283.2
74.0
84.6
65.9

56.3

Environmental& Social
53.6

150

42.0

98.0

■ Construction, maintenance and operation of mobile communication facilities■ NCC fixed communication equipment, CATV work, Global etc.

155.0

■ Construction, maintenance and operation of fixed communication facilities for NTT

92.5

Multi
Carrier
76.1

43.6

76.9

84.1

NTT

128.3

95.1

98.2

100.5

FYE Mar2016

FYE Mar2017

FYE Mar2018

0
FYE Mar2019

FYE Mar
2020(Plan)29

(2) Group Formation (As of December 31, 2019)
 In the NTT and Multi-carrier (mobile) businesses, MIRAIT and MIRAIT Technologies are fully responsible for the project design, quantity surveys and sitemanagement, while the construction work is undertaken by subsidiaries and subcontractors.
 The MIRAIT group boasts a nationwide network of 1,000 subcontractors / 20,000 more over staff.
 The MIRAIT group companies deploy various services as shown below, and pursuing further expansion of business areas through M&A .
No of
employees:
100

MIRAIT Holdings

MIRAIT, MIRAIT Technologies, Lantrivison, TTK, Solcom, Shikokutsuken
Full responsibility, overall coordination

NTT business

Multi-carrier business

Environmental & Social
Innovation Business

No ofemployees:
6,000
No. ofconsolidated
subsidiaries:68
No. of employees:
6,600

ICT Solution Business

Order
AccessPublicengineering

NW

Mobile15 companies

3 companies

2 companies

4 companies

Overseas

AccessPublicengineering

Electricaland air
conditioning

Solutions

SoftwareOutsourcing

Trading &recycling

2 companies

6 companies

5 companies

3 companies

5 companies

3 companies

4 companies(2 other ompanies• Line Connect(strengthening of capabilities to handle
directly-managed projects)• Okisokou(Facility construction in Okinawa)• Katakura Kensetsu(Public sewer construction)• Tokai Koei
(Public sewer construction)

16 companies(5 other ompanies)• Nissetsu(Air conditioning)• MIRAIT X(Battery)• Nishinihon Denko(Building/ energy)• Tsukada Electrical Construction

Order
Recent
M&A

Overseas• MIRAIT Technologies Australia (Australia)• MIRAIT Technologies Myanmar (Myanmar)• ACTIS• Practical Solutions• TIMETEC• Lantrovision(S) (Singapore)〔Subsidiaries 16 companies〕• Libnet (Library outsourcing)• Hope Net (Temporary staffing)• Trust System Inc.

Approx. (Domestic) 850 subcontracting companies

No ofemployees:
approx. 20,000

30(3) Expansion of Business Areas Utilizing Technologies (As of September 30, 2019)
Resources (Technologies)

Current Business Usage

Qualified personnel (total qualifications)
Construction
SoftwareTotal

8,000 (12,400 qualifications)
1,150 (4,600 qualifications)9,150 (17,000 qualifications)NTT

Areas to Expand Into
Engineering area

Expanded areas
Aging infrastructure

Telecommunications/civil Engineering

Elimination of poles(Structural analysis and sensors)(For Olympics)
Civil engineering/construction

Power /switching
Civil engineering

Wireless

Multi-carrier<Details>

Civil engineering/construction

Telecommunications, civil engineeringand construction
Installation technicians (A1/DD general)
Construction managing engineers
Architect

660
355
15

(ITS/ smart cars)

Power

Power

power

Wireless

Wireless

Wireless

Wi-Fi creation(For Olympics)

LAN/WAN
SoftwareWireless

Electrical, power and switching
70
355
400

ICT Solution

Technical radio operators for on-the-ground services
95
Special radio operators for on-the-ground services
1,100
CATV engineers
30

ICT-related technologies

Wireless

Sensor networks

LAN/WAN

Telecommunications/civil Engineering

Servers

Wireless/broadcasting

Wi-Fi Solution
Servers

Cloud and DC
Environmental &Social Innovation

LAN/WAN

Drone
Telecommunications Wireless

Software

Electricity
55
1,590
75

LAN/WAN

Wireless

Wireless and broadcasting

Cisco-certified CCIE
Information technology engineers
Drone

Next-gen Mobility

Civil engineering/construction

Transmission/switching

Licensed electrical engineers
Electrical construction managing engineersType I electrical workers

Smart Cities

EV chargers

Power/switching
LAN/WAN

Solutions leveraging IoT and 5G
Telecommunications Wireless
LAN/WAN

Servers

Electricity
Servers

Broadcasting

Solar power
Electricity

Environment / Energy
Electricity

LAN/WAN

Servers31

2. Changes in the Market Environment for the Mobile Business
FY 2019- FY 2018

General mobile

Spread of smartphones
Increase in connected devices
Data offloading measures

FY 2020 -2020 Tokyo Olympics and Paralympics

Rapid increase in data traffic

Expansion of frequency bands
Measures to resolve poor reception areas
between subway stations（5G）

LTE-Advanced(4G)Communication method
Transmission speed

Ultra high-speed⇒ max.10Gbps (100x 4G)
Multiple concurrent connections⇒1 million/k㎡ connections(100x 4G)
Ultra low latency⇒approx. 1millisecond (1/10 of 4G)- 10 Gbps- 1Gbps -▲ （Docomo） 9/2018: 199,500 LTE base stations (of which PREMIUM 4G: 131,800)▲（Docomo） Winter 2019: Max 1,576 Mbps (receiving)▲（KDDI） 1/2019: Max. 1,237Mbps

Advancements in 4G

Frequency event
NTT Docomo
KDDI
Softbank▲（Softbank）8/2019: Max 988 Mbps (downstream)

700MHzband▲（Docomo） Target of 80% population coverage in FY2018

Total investment(FY 2014 – FY 2025) : estimated at approx. 630.0 bil. yen (total for 3 companies)▲（3 carriers） Target of 50%+ population coverage in FY2018

3.5GHzband

Total investment(FY 2014 – FY 2019) : estimated at approx. 430.0 bil. yen (total for 3 companies)

1.7GHzband
Measures to counter
shortage of frequencies▲（3 carriers） Target of 90%+ population coverage in FY2019▲（KDDI） 3/2019: launch of service▲（2 carriers） Target of
80%+ population coverage in FY2025▲（Rakuten） 10/2019: launch of service

KDDI
RAKUTEN

Total investment(FY 2018 – FY 2028) : estimated at approx. 770.0 bil. yen (total for 2 companies)

3.4GHzband▲（Docomo） 1/2020: launch of service▲（Softbank） 3/2020: launch of service

NTT Docomo
Softbank▲（2 carriers） Target of 50%+
population coverage in FY2022

Total investment （cumulative for 2018-2028）: appox. 170.0 bil. yen (total for 2 companies)

4/2019: Allocation of frequencies ▲Activities in preparation for(Docomo) ▲ 9/2019: preliminary service launch

3.7GHz band
4.5GHz band

(Docomo) spring 2020: launch of service▲（KDDI）▲ 9/2019: preliminary service launch

launch of 5G
28GHz band

Docomo: 795.0 bil. yen
KDDI: 466.7 bil. yen
Softbank: 206.1 bil. yen
Rakuten: 194.6 bil. yen(Note) PREMIUM 4G is a communication service using carrier aggregation technology provided by NTT Docomo.

(Softbank)▲ 7/2019: preliminary service launch(KDDI. Softbank) 3/2020: launch of service ▲▲(Rakuten) 6/2020: launch of service▲FY2024
No. of specified base stations(Docomo) 26,334(Docomo)▲end-2021:10,000 base stations(KDDI) 53,626（KDDI） ▲end-2021:10,622 base stations(Rakuten) 23,735（Softbank）▲end-2022: 11,210 base stations

Total investment (FY2019～2024): approx. 1,600 bil. yen (total for 4 companies)
Source: MIRAIT from publicly available information

32

3. Current Industry Conditions (As of December 31, 2019)
 Communication construction companies are made up of three nationwide groups (MIRAIT, COMSYS, Kyowa Exeo), and nine regional companies.
 Nine regional communication construction companies are being merged into the three nationwide groups from October 2018.
 Electrical construction and railway construction companies are also operating communications construction businesses, and some are competitors.

Communication construction companies
As of July 2018 （ 3 groups + 9 companies ）October 2018- (3 groups)

Regional
operation of business

Nationwide operation of business

MIRAIT HD GroupMIRAIT HD Group Net sales 430.0 bil.yen／Operating income 21.5 bil.yen
TTK

MIRAITTTKMIRAIT※ Merger scheduled for10/2018

SolcomSolcom※ Merger scheduled for 1/2019

Shikokutsuken

MIRAIT Technologies

MIRAIT Technologies

Shikokutsuken※ Merger scheduled for 1/2019

COMSYS HD GroupNet sales 540.0 bil.yen／Operating income 38.0 bil.yen

COMSYS HD GroupNDS

Nippon COMSYSSANWA COMSYS Engineering
TOSYS
TsukenNippon COMSYSSANWA COMSYS Engineering
TOSYS
TsukenSYSKEN

HokuwaC-CubeKyowa Exeo GroupKyowa Exeo
Daiwa Communication Facilities
EXEO TECH CORPORATION

Seibu Electric Industry

Kyowa Exeo
Daiwa Communication Facilities
EXEO TECH CORPORATIONElectrical construction companies
Net sales 600.0 bil.yen

Kinden560.0

NEC Networks & System Integration Net sales 295.0 bil.yen

etc.
(Note) Financial figures reflect company forecasts for FYE 3/2020.

C-CubeSeibu Electric Industry
Nippon Dentsu※ Merger scheduled for 10/2018

Railway construction companies

IT construction companies

Kandenko※ Merger scheduled for 10/2018

Net sales 495.0 bil.yen／Operating income 32.0 bil.yen

Kyowa Exeo Group

Nippon Dentsu

NDS
SYSKEN
HokuwaNet One Systems

187.5

ITOCHU Techno Solutions

480.0

etc.

Nippon Densetsu Kogyo

Net sales 191.2 bil, yen

etc.

33

4. Supplementary Financial Information(1) Historical Performance
Unit: bil. yen

FYE March 2016※（ ） indicates results for the former MIRAIT Group (Mirait, Mirait Technologies andLantrovision(S) Ltd.) excluding the impact from the merged companies.

FYE March 2017

FYE March 2018

Orders received

260.7

323.3

326.3

Net sales

269.5

283.2

312.9

Gross profit

25.8

33.5

39.7

Gross profit margin

9.6%

11.8%

12.7%

SG&A

19.7

23.4

23.0

SG&A ratio

7.3%

8.3%

7.4%

6.1

10.0

16.7

2.3%

3.5%

5.3%

6.7

10.5

17.8

2.5%

3.7%

5.7%

Net income

3.6

6.4

11.5

Net income

1.3%

2.3%

3.7%

Operating income
Operating income ratio
Ordinary income
Ordinary income ratio* Figures are rounded down to one decimal place.

FYE March 2019

FYE March 2020
(Plan)

392.6

420.0

（320.4）（325.5）

375.9

430.0

（330.8）（335.5）

46.9

50.5

（41.3）（41.5）

12.5%

11.7%

（12.5%）（12.4%）

26.2

29.0

（23.6）（23.5）

7.0%

6.7%（7.1%）（7.0%）

20.6

21.5（17.6）（18.0）

5.5%

5.0%（5.3%）（5.4%）

21.9

23.0（18.7）（19.0）

5.8%

5.3%（5.7%）（5.7%）

25.7

15.0（13.5）（12.5）

6.8%

3.5%（4.1%）（3.7%）

34

※（ ） indicates results for the former MIRAIT Group (Mirait, Mirait Technologies andLantrovision(S) Ltd.) excluding the impact from the merged companies.

(2) Orders Received and Net Sales by Business Category
Orders received
Units: bil. Yen

FYE March 2019

FYE March 2020

FYE March 2019

FYE March 2020

Q3 actual results

Q3 actual results

Full-year Results

Full-year Plan(a)

NTT Business

Multi-carrier business
Environmental & social
innovation business
ICT solution businessTotal

Net sales
Units: bil. Yen

NTT Business

Multi-carrier business
Environmental & social
innovation business
ICT solution business

Total

YoY Change(b)－(a)(b)

Percentage change(b)／(a)Progress(a)／(c)(c)

Progress(b)／(d)

(d)

88.8

113.8

+ 25.0+ 28.2%

137.7

64.5%

154.0

73.9%

（71.8）（71.7）（- 0.1）（- 0.1%）（97.5）（73.6%）（98.0）（73.2%）

70.5

81.8

+ 11.3+ 16.0%

95.1

74.1%

100.0

81.8%

（67.5）（70.6）（+ 3.1）（+ 4.6%）（86.7）（77.9%）（90.5）（78.0%）

35.2

38.6

+ 3.4

+ 9.7%

58.4

60.3%

60.0

64.3%

（33.6）（31.8）（- 1.8）（- 5.4%）（43.7）（76.9%）（48.0）（66.3%）

72.6

100.2

+ 27.6+ 38.0%

101.2

71.7%

106.0

94.5%

（70.9）（83.5）（+ 12.6）（+ 17.8%）（92.4）（76.7%）（89.0）（93.8%）

267.2

334.5

+ 67.3+ 25.2%

392.6

68.1%

420.0

79.6%

（243.8）（257.7）（+ 13.9）（+ 5.7%）（320.4）（76.1%）（325.5）（79.2%）FYE March 2019

FYE March 2020

FYE March 2019

FYE March 2020

Q3 actual results

Q3 actual results

Full-year Results

Full-year Plan(a)

YoY Change(b)－(a)(b)

Percentage change(b)／(a)Progress(a)／(c)(c)

Progress(b)／(d)

(d)

74.4

102.2

+ 27.8+ 37.4%

128.3

58.0%

155.0

65.9%

（68.6）（66.2）（- 2.4）（- 3.5%）（101.8）（67.4%）（99.0）（66.9%）

59.5

61.5

+ 2.0

+ 3.4%

92.5

64.3%

98.0

62.8%

（58.5）（54.3）（- 4.2）（- 7.2%）（87.6）（66.8%）（89.0）（61.0%）

33.1

43.3

+ 10.2+ 30.8%

56.3

58.8%

74.0

58.5%

（32.8）（38.4）（+ 5.6）（+ 17.1%）（50.3）（65.2%）（62.0）（61.9%）

62.9

81.3

+ 18.4+ 29.3%

98.7

63.7%

103.0

78.9%

（62.5）（69.3）（+ 6.8）（+ 10.9%）（90.9）（68.8%）（85.5）（81.1%）

230.0

288.5

+ 58.5+ 25.4%

375.9

61.2%

430.0

67.1%

（222.3）（228.4）（+ 6.1）（+ 2.7%）（330.8）（67.2%）（335.5）（68.1%）* Figures are rounded down to one decimal place (bil. yen).

35

(3) Assets, Liabilities and Net Assets
 The Company’s equity ratio stood at 65.0% as of December, 2019.
 60% of assets are current assets, which are primarily cash and deposits, accounts receivable from completed construction contracts, and costs on uncompleted construction
contracts.

(Unit: bil. yen)

Item
Ratio of current assets
59.9%

AmountAssetsAmountLiabilities

Current assets

190.7

Current liabilities

79.9

Cash and deposits

33.3

Accounts payable for construction
contracts and others

47.0

Accounts receivable from completed
construction contracts and others

Short-term loans payable and others

10.5

92.4

Others22.3

Costs on uncompleted construction
contracts and others

52.2

Non-current liabilities

28.4

Others12.7

Non-current assets

127.9

Property, plant and equipment

82.2

Intangible assets
Total assets
318.6 bil. yen

Item

Investments and other assets
Total assets

Total liabilities

108.4

Net assets
Shareholders’ equity

201.7

Capital stock

7.0

Capital surplus

69.4

Retained earnings

126.6

Treasury stock
Total accumulated other comprehensive
incomeMinority interests

- 1.3

38.9

Total net assets

210.2

318.6

Total liabilities and net assets

318.6

6.6

Equity207.1 bil. yen
Equity ratio
65.0%

5.3
3.1

36

(4) Key Performance Indicators
Cash FlowsFYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

FYE March 2019
Q3 actual results

FYE March 2020
Q3 actual results

Operating cash flow

6.2

4.7

12.5

6.4

6.4

11.6

Investment cash flow

- 3.6

- 11.1- 10.0- 13.5- 14.4- 6.8

Financial cash flow

- 2.6

10.4

- 3.6

- 1.9

- 0.4

- 8.6

Free cash flow

2.6

- 6.4

2.5

- 7.1

- 8.0

4.8

Units: bil. yen(Note) Free cash flow = operating cash flow + investment cash flow

Cash and Deposits/ Interest-bearing Debt
FYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

FYE March 2019
Q3 actual results

FYE March 2020
Q3 actual results

Cash and cash equivalents

29.1

33.1

32.2

35.6

28.3

31.6

Loans

- 0.0

- 17.3- 16.6- 20.2- 21.1- 10.6

Lease
obligations

- 0.4

- 0.8

- 2.3

- 9.8

- 3.9

- 9.7

Total

- 0.4

- 18.1- 19.0- 30.0- 25.0- 20.3

28.7

15.0

13.2

5.6

3.3

11.3

Units: bil. yen

Interestbearing debt

Net cash(Notes) 1. Net cash is the amount obtained by deducting interest-bearing debt from cash and cash equivalents.
2. Cash and cash equivalents exclude deposits and securities not maturing within three months.

* Figures are rounded down to one decimal place (bil. yen).

37

Capital Expenditure / Depreciation and Amortization
Unit: bil. yen

FYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

FYE March 2020
(Forecast)

Capital expenditure

3.7

4.6

12.6

19.3

10.5

Depreciation and mortization

2.4

2.8

3.0

4.0

3.8

Shareholder Return IndicatorsFYE March 2016

FYE March 2017

FYE March 2018

Dividend payout ratio

67.2%

37.6%

24.1%

Total return ratio

67.2%

76.6%

24.1%

FYE March 2019

13.5%
（23.6%）

13.5%（23.6%）FYE March 2020
(Forecast)

27.2%

96.9%

(Note) Figures in () from FYE 3/2019 exclude the impact of extraordinary gains from the recent acquisitions (negative goodwill of 10.0 bil. yen).

Capital-related IndicatorsFYE March 2016

FYE March 2017

FYE March 2018

FYE March 2019

Equity ratio

63.1%

56.9%

58.5%

59.3%

Return on equity (ROE)

3.0%

5.2%

8.8%

15.4%
（9.4%）(Note) Figures in () for FYE 3/2019 exclude the impact of extraordinary gains from recent acquisitions (negative goodwill of 10.0 bil. yen).

* Figures are rounded down to one decimal place (bil. yen).

38

5. Major Shareholders (As of September 30, 2019)

Shareholder

Number of Shares
Shareholding Ratio
Held(%)(thousands)

MIRAIT Holdings Corporation (Treasury Stock)

12,118

11.2

Japan Trustee Services Bank, Ltd.(Trust Account)

10,0699.3

Sumitomo Electric Industries, Ltd.

9,560

8.8

The Master Trust Bank of Japan, Ltd(Trust Account)

5,595

5.2

Sumitomo Densetsu Co, Ltd.

2,488

2.3

MIRAIT Holdings Employees's Stock Option Plan

1,941

1.8

Japan Trustee Services Bank, Ltd.(Trust Account 5)

1,581

1.5

SSBTC CLIENT OMNIBUS ACCOUNT

1,559

1.4

Mizuho Bank, Ltd.

1,300

1.2

State Street Bank and Trust Company 505001

1,300

1.2

Japan Trustee Services Bank, Ltd.(Trust Account 9)

1,209

1.1

SharesShareholder Composition

Treasury
stock
11.2%

Individuals
21.9%

Financial
institutions
32.5%

Japanese
corporations
17.7%
Foreigncorporations
16.7%

108,325

39

6. Share Price (Since establishment of MIRAIT Holdings on October 1, 2010)■ Share price and trading volume (Closing price)(Units: yen)

September.26, 2018
1,970 yen (highest)

2,000

Closing price on January.31,2020
1,600

1,200

■ Share price
1,646 yen
■ PER
10.6x
■ PBR
0.9x
■ Dividend yield 2.4%

Oct.1, 2010
553 yen (listed)

800

400
(Units: shares) 2,000,000

Mar.15, 2011499 yen (lowest)

1,000,000
0
2010/10/1

2011/10/1

2012/10/1

2013/10/1

2014/10/1

2015/10/1

2016/10/1

2017/10/1

2018/10/1

2019/10/1■ Performance of MIRAIT compared to major indices
280%
TOPIX

N225

MIRAIT

Rate of increase as of January.31,2020
180%■ MIRAIT■ TOPIX■ N225

197.7%
103.0%
146.8%

80%-20%
2010/10/1

2011/10/1

2012/10/1

2013/10/1

2014/10/1

2015/10/1

2016/10/1

2017/10/1

2018/10/1

2019/10/1

40

Precautionary Statement

Statements and quotes relevant to the forecasted values in this handout are
the future prospects based on the plans and prospects of the Company at thispoint in time.
The actual business results could be significantly different from those stated inthis handout due to changes in conditions.
As such, please be advised that we will not be able to guarantee the accuracyof the forecasted values, in this handout and the session, over the period oftime to come in the future.

MIRAIT Holdings Corporation
41