CFO Message

In the two years since being appointed Executive Director of the Corporate Sector, I have worked hard on both financial and non-financial fronts to maximize corporate value.
On the financial front, I worked on the priority of achieving the goals outlined in the medium-term management plan, such as EPS growth in tandem with business growth and structural reforms. To achieve long-term and stable growth in the telecommunications industry, where the market is rapidly changing, we need to strengthen our financial foundation to nimbly acquire and leverage business resources. To this end, we are taking measures to maximize cash fl ow, aware of the balance sheet. These mainly include swifter collection of accounts receivable (improved cash conversion cycle), effective capital expenditures, and liquidation of credit card receivables.
On the non-financial front, we are enhancing disclosure on our website in an effort to ensure fair and appropriate disclosure of ESG information. In addition, we carefully consider the points made through ESG briefings and dialogue with shareholders and investors, and we use them to make improvements. For 2030, we established SDG targets in eight areas, such as building a resilient infrastructure for communication and disaster response and conserving the environment. As a company responsible for social infrastructure, KDDI has the mission of proactively addressing various social issues and aims to grow alongside society. Furthermore, we are striving to be a company that puts human resources fi rst and attracts a diverse range of talented personnel. By strengthening the training of DX personnel and new work styles for the new normal era, we aim to spur innovation and enhance productivity in an effort to help maximize corporate value.

We continue to prioritize growth investment to sustainably grow profits. We conduct M&A in growth fi elds and carry out capital investment with the aim of maintaining and enhancing our competitiveness.
We forecast capital investment of ¥610 billion in the fiscal year ending March 31, 2021, which is roughly level with the previous fiscal year, as we actively pursue 5G investments and reduce 4G investments. Over the medium term, we intend to maintain this investment level of around ¥600 billion.
KDDI considers M&A mainly in terms of: 1) maximizing Group IDs, the basis for "the integration of telecommunications and life design," 2) maximizing life time value by expanding operating revenue and increasing engagement, 3) providing new value by acquiring additional capabilities for the 5G and IoT era, and 4) expanding global business.
As for shareholder returns, in line with the medium-term management plan, we conduct flexible share buybacks in addition to maintaining a dividend payout ratio of over 40%.

Because the impact of COVID-19 on our telecommunications business (a subscription business model) is small compared with our goods-focused businesses (one-time-fee business model), the entire Group's cash fl ow has not been seriously affected.
In preparation for a prolonged COVID-19 crisis and further uncertainty, KDDI has ensured operations have more leeway than before when it comes to financing and has secured funding procurement methods from financial institutions, such as commitment lines.