#1Tomorrow, Together KDDI Fiscal Year Ending March 2024 Q1 Financial Results (April June 2023) - July 28, 2023 KDDI Corporation The creation of a society in which anyone can make their dreams a reality, by enhancing the power to connect. EKDDI VISION 2030 Space/STARLINK Smart Drone Smart Fisheries www FOT#21. -i di m 2. 3. Index Consolidated Results: FY2024-03 Q1 The Power to Connect Satellite Growth Strategy and Strengthening of Management Appendix 2#31. Consolidated Results: FY2024-03 Q1#4Financial Highlights Within expectations against full-year forecast Operating revenue (Unit: yen billion) 5,671.8 5,800.0 (E) Progress 1,351.7 FY23-03 Q1 23.0% 1,332.6 FY24-03 Q1 Note) IFRS 17 is adopted from FY24-03. FY23-03 figures are changed accordingly. Operating income (Unit: yen billion) 1,077.4 1,080.0 (E) Progress 24.7% 297.3 266.7 FY23-03 Q1 FY24-03 Q1 4#5297.3*1 Operating Income - Factors for Change Lower roaming revenues, accounting change impact YOY Solid results in focus areas Multi-Brand Communications FY23-03 (Unit: yen billion) (10.5) ARPU revenues DX Accounting Impact (1) Group MVNO (2.9) +1.7 (18.2) Excl. (1) Other revenues + 266.7 Roaming +5.2 (6.0) revenues Financial Business*2 (12.9) FY23-03 Q1 (30.6) *1 IFRS 17 is adopted from FY24-03. FY23-03 figures are changed accordingly. *2 au Financial Holdings (IFRS basis) FY24-03 Q1 5#62. The Power to Connect#7KDDI's Mission Strengthen infrastructure to support "tsunagu" (connecting) Our mission: connecting 24/7/365 14:52:46 Monitoring Automation Ongoing fortification Additional Capex: 50 billion yen mid-term ✓ Virtualizating core facilities ✓ AI-based operations and congestion detection ✓ Enhance organization and HR development Connecting Lives, Livelihoods and Hearts 7#8Promoting Safety and Security Communications integrate into society, strengthen “tsunagu" (connecting) with partners Secondary Line Service Starlink Portable Base Stations Disaster Agreement phim NUM 八王子市 相模原市 災害復旧支援ツール 災害ダッ 03/02813 $9 EMERGENCY G KDDI au With Kanto Regional Development Bureau for disaster cooperation Prepare for outages and disasters with other carriers Vehicle-mounted, portable, shipboard base stations Deploy about 200 units by end FY24-03 8#9Satellite Communication Starlink Here, there, everywhere, throughout Japan au Base Stations ✓ Expansion to 100 famous mountains, attractions ✓ Deploy 5G by end FY24-03 Mt. Tsurugidake Summit (Toyama Pref.) Lake Kuzuryu (Fukui Pref.) Expansion of coverage Hut Wi-Fi / Festival Wi-Fi ✓ Safety confirmation, information gathering ✓ Cashless payments ✓ Maritime use ✓ Information for safe navigation ✓ Improve passenger and crew satisfaction ✓ Fishery DX Promote DX in Mountain / Event 9#103. Satellite Growth Strategy and Strengthening of Management#115G Communications ARPU Revenues Steady growth in Q1. Aiming for rebound during H1 Multi-brand total ARPU revenues Multi-brand Communications ARPU revenues (YOY) (Unit: yen billion) Comm. ARPU Rev. Val-add. ARPU Rev.* 477.9 479.7 107.2 112.0 370.7 367.8 Q1 Q2 (Unit: yen billion) FY23-03 FY24-03 Q3 Q4 Q1 (2.9) (14.3) (17.0) H (29.2) (30.6) FY23-03 Q1 FY24-03 Q1 * New definition from FY24-03 11#125G Communications Multi-brand ID / 5G Penetration Steady Growth Multi-brand ID* (Unit: thousand) YOY +190 5G Penetration Rate 30,910 30,720 57.5% 39.4% FY23-03 Q1 FY24-03 Q1 FY23-03 Q1 FY24-03 Q1 Note) Personal services segment * au, UQ mobile, povo (charged users only) About 60% customers 5G available 12#135G Communications Explore the extraordinary a au Worry-free unlimited plans meet growing needs for content Attractiveness of au au Monthly Data Usage Steady increase in data usage Popular content also included YOY + 25% e-cartoon Video When changing models, about 80% choose unlimited plan*2 DA ZN BEYOND ピッコマ プロ野球 ライブ中継 ホームも、 ビジターも Netflix, Amazon Prime, DAZN, etc. Piccoma MAU over 10 million*1 New partnerships *1 May 2023 Piccoma applications and web services total *2 Apr.- Jun. 2023 FY23-03 Q1 FY24-03 Q1 au 0-0 13#14DX Business Segment Results NEXT Core drives growth. Performance within expectations Operating revenues 281.3 264.7 NEXT Core 87.0 +21.8% Telecom Services 106.0 (Unit: yen billion) YOY double-digit growth in each area Corporate DX 30 bil. yen scale Business DX 40 bil. yen scale Business Infrastructure Services 40 bil. yen scale Q1 Topics NEXT Core achieved double-digit top line / bottom line growth Business DX drives revenue/profit growth, especially in IoT IoT connections: 34.5 mil. (YOY+8.5 mil.) of which, over 20 mil. Connected ✓ Strengthening Business Infrastructure Services Connectivity DC Business Expansion ➤ Contact Center / BPO Service Integration FY23-03 Q1 FY24-03 Q1 14#15DX Connectivity DC Global presence with connectivity as a strength TELEHOUSE Strengths Provides space and equipment as well as interconnected environment Internet Service Provider TELEHOUSE hyperscale DC Share of connections* TELEHOUSE Expands Global Connections Customer needs ✓ Direct connection near end users Conditions for selection/ ✓ Where traffic is concentrated Competitiveness ✓ Accumulation of hyperscalers Market share (Global) 1st: DC specialized firm 2nd: DC specialized firm TELEHOUSE 1st place in telecom carriers 4th place in the world*2 3rd: 4th DC specialized firm *1 Source: Structure Research 2023 *2 Actual results for 2022, excluding Canadian Connectivity DC, which signed a business transfer agreement in June 2023 15#16DX DC Strategy Focus on Connectivity DC Strategic Direction Steady market growth and high profitability aiming for further business growth Enhancing Connectivity in Canada Canada's No. 1 Connectivity DC Business transfer agreement signed June 2023 Market Growth Business Scale Margins TELEHOUSE (2023-2028) 3 locations in heart of Toronto Connectivity DC CAGR* Medium High 11% Enhanced Connectivity Hyper Scale DC CAGR* 24% Large Lower Expansion of space offered Further Value Enhancement * Source: Structure Research 2023 16#17DX Connectivity World No. 1* DC Business Global Expansion Establishment of three-pillar structure for Connectivity DC in Europe, Asia, North America London March 2022 Expansion Europe Asia North America DC Business Revenues 100+ bil. yen (FY23-03) Connectivity France No.1* Paris Bangkok Connectivity Canada No. 1* Toronto Overseas sales about 70% May 2022 Expansion * Source: peeringdb.com as of March 2023 Opened May 2023 June 2023 Business Transfer Agreement 17#18DX Contact Center / BPO Integrating strengths of both companies to become leading digital BPO company Formed new company via management integration KDDI Group KDDI Evolva Mitsui & Co. Group 1st Contact Center / BPO Industry 2nd largest in industry Relia, Inc. ✓ Altius Link Strengths of New Company CX improvement proposal through digital contact center Global expansion including North America and Asia * s Altius Link 3rd KDDI evolva Relia Revenues 240+ bil. yen * Economies of scale and synergies for further growth Note) Digital BPO: Method outsources series of operations through AI and other digital technologies to improve efficiency, rather than outsourcing only human resources Aggregate of both companies' FY2022 full-year results; KDDI Evolva includes inter-group sales. I 18#19DX Connected Develop global ❝tsunagu" (connecting) infrastructure with partners Global expansion Initiatives with TOYOTA 7 regions worldwide Japan, North America, China Europe, Australia, Middle East and India 20+ million lines Overseas Domestic March 2020 March 2021 March 2022 June 2023 TOYOTA KDDI 2002 Car telematics service collaboration 2016 Global Communications Platform to support car connectivity 2020 Start collaboration aiming to solve future issues through communications and mobility Both work together to build next-generation global communications platform 19#2020 Finance Financial Business Steadily expanding customer base. Contributing to growth of entire Group au PAY au au じぶん銀行 Expansion of customer base Transaction volume of settlement/loan 3.9 trillion yen (YOY +17.0%) Number of au PAY Card members 8.8 million (YOY +900K) au Jibun Bank accounts 5.3 million (YOY +530K) Effectiveness of Financial Business Synergies with au also contribute to telecom business Synergies with au Total ARPU Increase Churn Rate Reduction au Growth of auFG Customer base expansion Sales promotion cost efficiency ☐ ☐☐ Mortgage loans disbursements Exceeded 3 trillion yen (June 2023) au FG#21Finance Synergies with au Contribute to value-added ARPU revenue and Churn Rate reduction Finance-related value-added ARPU revenue YOY +13.7% au Churn Rate*2 Use of multiple financial services increases effectiveness Down about Down about 20% 30% Further reduction FY23-03 Q1 *1 New definition from FY24-03 FY24-03 Q1 au only +Service (1) : +Service (1) +Service (2) *2 Actual Churn Rate for au smartphones from Jan. to Mar. 2023. Excludes short-term churn, intra-group transfers, corporate subscriptions. +Service (1) +Service (2) +Extra 21#22Regional co-creation -CATV, etc.- CATV Consolidate CATV business into J:COM Contribute to industry development and regional co-creation Consolidation into J:COM Maximize CATV business By the strength of KDDI / J:COM KDDI J:COM Reinforce support for CATV operators Enhance customer service Provision system for CATV operators CATV business Total asset Maximize operation support January 2024, transfer CATV related business of KDDI to J:COM Solving regional issues (DX, disaster measures, etc.) Contribute to further development of CATV industry and community J:COM also expands further 22#23Utilization of Generative AI Promote internal use with a view to commercialization Established company-wide cross-functional organization Create and share best practices within company and link to commercialization KGA (KDDI Gen. AI COE) Development ↑ Proposals Implementation Personal a U (Metaverse) New service Solution DX by Industry Solution Proposal Corporate, others Share and Expand Use Case AI R&D Human Resources Development AI specialized training at KDDI DX University and development practice at KGA CHAT AI 23#24Carbon Neutral Deploying renewable energy business Furthering initiatives to net-zero carbon emissions GX*1 with Gunma Pref. Strengthen cooperation towards promotion of renewable energy & VPP*2 Sustainable Base Station Achieve net-zero carbon emissions 24/7/365 Membership in RE100 Goal of 100% renewable energy across Group by 2050 wome KDDI au リニューアブルエナジー 群馬県 urter KDDI ニューアブルエナジー au ジー aw 群馬県 KDDI ニューアブルエナジー 營群馬県 772 RE100 Agreement signed June 2023 Launched May 2023 *1 Green Transformation: Initiatives to transition from a fossil fuel-centered industrial and social structure to a clean energy-centered one. Joined July 2023 *2 Virtual Power Plant: System collectively controls distributed power sources, such as storage batteries, located on premises of electric power users and bundles power generated to be used as if it were a single power plant. 24#25Summary Promoting initiatives for medium- to long-term sustainable growth FY24-03 Q1 within expectations Consolidated Results The Power to Connect Satellite Growth Strategy and Strengthening of Management Profit affected by roaming revenue decrease and impact of accounting treatment in FY23-03 Q1. Solid results in focus areas Strengthening "tsunagu" (connecting) through improving infrastructure and partner collaboration Steady progress in Communications ARPU revenues towards H1 rebound Business Segment NEXT Core grew steadily. Leveraging strengths, promote Connectivity DC, Digital BPO and Connected Financial business synergizing with au, achieving growth Consolidate CATV business into J:COM. Contribute to industry development and regional co-creation Promoting initiatives toward a decarbonized society and utilization of generative AI 25#26Appendix#27Multi-brand ARPU Communications ARPU Value-added ARPU* (Unit: Yen) 3,990 3,950 4,030 3,920 3,930 (Unit: Yen) 1.150 1,180 1,210 1,210 1,200 Q1 Q2 Q3 Q4 FY23-03 Q1 FY24-03 Q1 Q2 Q3 Q4 Q1 FY23-03 FY24-03 Factors for change (YOY) +50 yen Factors for change (YOY) -60 yen (-) Brand mix, etc. (+) Settlement, finance, product supports, content, etc. (-) Commerce, etc. Note) Personal segment. au, UQ mobile, povo (charged users only) * New definition from FY2024-03 27#28Consolidated FCF (excluding Financial Business) Factors for Change Investments, CAPEX etc. (Unit: yen billion) 43.6 EBITDA (46.8) Others 43.4 +62.4 +19.2 (35.0) FY23-03 Q1 Note) Financial business is au Financial Holdings (0.1) FY24-03 Q1 28#29Consolidated / Financial Business Balance Sheet (as of the end of June 2023) Total Assets 12.17 trillion yen Property, Plant and equipment, Intangible assets and Right-of-use assets Interest-bearing debt Trade and other payables Deposits for financial business Goodwill Trade and other receivables Securities for financial business Other liabilities Loans for financial business Equity Cash and cash equivalents Others Total Assets 4.11 trillion yen Cash and cash equivalents Securities Loans Others Deposits Others KDDI (Consolidated) au Financial Holdings (Consolidated) Note) KDDI (consolidated) is prepared in accordance with IFRS and au Financial Holdings (consolidated) is prepared in accordance with J-GAAP. 29#30Changes in Multi-Brand Value-added ARPU Definition (Reposted) Definition Value-added ARPU revenues Changes (from FY24.3) [Addition] Interest on mortgage and card loan, administrative fee on mortgage, etc. (au ID- based) of au Financial Holdings Corporation [Exclusion] Advertising related Multi-Brand Value-added ARPU revenues Product supports ARPU revenues Electricity ARPU revenues (No change) Exclusion 30#31Tomorrow, Together KDDI Disclaimer Statements made in these documents with respect to the KDDI Group's performance targets, projected subscriber numbers, future forecasts and strategies that are not historical facts are forward-looking statements about the future performance of the KDDI Group, based on company's assumptions and beliefs in light of the information available at the time they were made. They therefore include certain risks and uncertainties. Actual results can differ from these statements due to reasons including, but not limited to, domestic and overseas situation, economic, trends, competitive position, formulation, revision or abolition of laws and ordinances, regulations or systems, government actions or intervention and the success or lack thereof of new services. Consequently, please understand that there is a possibility that actual performance, subscriber numbers, strategies and other information may differ significantly from the forecast information contained in these materials or other envisaged situations.