Thank you very much. Let me go over the financial results of the first quarter of fiscal year ending March 2024. Today, I will explain about the three items shown on the slide. On the consolidated results of the first quarter of fiscal year ending March 2024. In the first quarter of March 2024, both consolidated operating revenues and operating income progressed as expected against the full-year forecast. On the left, the operating revenues were JPY 1,332,600,000,000 , achieving 23% of the full-year forecast. On the right, operating income was JPY 266.7 billion, 24.7% of the full-year forecast. Let me explain about the factors of a change in the operating income.
From the left, group MVNO revenues and roaming revenues dropped by JPY 10.5 billion. Multi-brand communications ARPU revenues went down by JPY 2.9 billion. DX increased by JPY 1.7 billion, while financial business fell by JPY 12.9 billion.
Financial business suffered a negative impact of accounting change in the previous fiscal year of JPY 18.2 billion, but excluding that, it would have enjoyed a growth of JPY 5.2 billion. Due to decline in roaming revenues and impact from accounting change in the previous fiscal year, which had been anticipated at the beginning of the fiscal year, we did see a drop of JPY 30.6 billion in operating income, but achieved a solid results in focus areas. Let me move on to the power to connect, or our efforts in communication networks. KDDI's mission is to Tsunagu, or connecting 24/7 for 365 days. In addition to monitoring and automation shown on the left, we're proceeding with efforts to strengthen infrastructure to support connecting. One of such efforts shown on the right is a steady implementation of additional investments of around JPY 50 billion for the midterm.
Those include virtualization of core facilities, AI-based operations and congestion detection, and enhancement of organizations and HR development. Based on the fortified and resilient infrastructure, KDDI will continue to connect lives, livelihoods, and hearts. Furthermore, in the era of communications integrating into society, we will strengthen Tsunagu, or connecting with partners. As shown on the left, we signed a disaster agreement with Kanto Regional Development Bureau for disaster response cooperation. In the middle, you can see we started to provide secondary line services to prepare for outages and disasters, working with other carriers. On the right, vehicle-mounted portable shipboard base stations deployed using Starlink are expected to total about 200 units by the end of March 2024. By strengthening Tsunagu, or connecting, we will contribute to building safe and secure society. We will leverage the satellite telecommunication service, Starlink, to connect here, there, everywhere throughout Japan.
To the left, Starlink will be used as backhaul lines for au base stations to expand the communication areas to include 100 famous mountains and tourist destinations in Japan. 5G will be deployed by the end of this fiscal year as well. On the right is expansion of coverage. Recently, high speed, large capacity communication service was made available for maritime use as well. We will seek to make customers' experience more comfortable as well. Mountain Hut Wi-Fi makes safety confirmation, information gathering, and cashless payment possible. In festivals where many users gather in locally concentrated manner, we can expect it to help mitigate congestions in communication lines. Let me go on to discuss satellite growth strategy and strengthening of management. On the communication area, ARPU revenues have shown steady growth. Multi-brand total ARPU revenues increased year-on-year as shown on the left.
On the right, multi-brand communications ARPU revenues reached a negative year-over-year growth of JPY 2.9 billion. We will continue to aim for a rebound during the first half of this fiscal year. Multi-brand ID and 5G penetration rate was a steady growth. Multi-brand IDs increased by 190,000 year-on-year. On the right, 5G penetration rate shows steady growth with about 60% of the customers of multi-brand having 5G available. Based on the situation, we'll seek to enhance the attractiveness of au further. Popular contents with high data demand are included in au communication service plans reasonably. In June, we launched a new partnership with Piccoma, an e-cartoon service with MAU over 10 million. au monthly data's usage has increased steadily by 25% year-over-year, as you can see on the right. In particular, when changing models, about 80% of the customers choose the unlimited plan.
Going forward, in response to the growing data demand, we will strive to enhance the attractiveness of unlimited plans.
Next is business segment performance. NEXT Core is driving growth, and performance is progressing within expectations. On the left, operating revenues totaled JPY 281.3 billion, of which NEXT Core was JPY 106 billion, up by 21.8% year-on-year. Right side shows Q1 topics. NEXT Core achieved double-digit top-line and bottom-line growth. In particular, Business DX drove revenue and profit growth, especially in IoT. IoT connections expanded steadily by 8.5 million year-on-year. As for business infrastructure services, we expanded our connectivity data center and integrated our contact center and BPO services. Next is connectivity data center business. On the left, Telehouse's strength lies not only in its space and equipment, but also in its ability to provide an interconnected environment. It provides an optimal connection environment with the accumulation of hyperscalers in favorable locations where traffic is concentrated, in response to customer needs for direct connection near users without delay.
As shown on the right side, Telehouse has been expanding the number of global connections with such connectivity as a strength. It ranks fourth in the world and first among telecom carriers. Next is data center business strategy. The strategic direction can be broadly categorized into connectivity data center and hyperscale data center. Connectivity data center is highly profitable and does not require large investments. Telehouse will focus on this area to capture market growth and achieve further business growth. Based on this strategy, we signed a business transfer agreement with Canada's number 1 connectivity data center in June of this year, as shown on the right. We will work to enhance our value further by enhancing connectivity and expanding the space offered. Our data center business is expanding globally.
In addition to Europe, including London, which is number one in the world in terms of connectivity, we established a three-pillar structure, opening one in Bangkok in Asia in May, and in Canada in North America. As shown in the pie chart on the right, overseas sales account for about 70% of our data center business sales. Next is contact center and BPO business. Relia Communications and KDDI Evolva will launch a new company, Altius Link, on September 1st, through a management integration based on a spirit of equality. Altius Link's strengths include one of the largest contact centers in Japan and global expansion, including North America and Asia. In addition, the capabilities of Mitsui & Co., and KDDI Group will be leveraged to provide total solutions. Through this management integration, we became the second-largest player in the industry, as shown on the right.
Going forward, we aim to become a leading Digital BPO company by integrating the strengths of both companies. We are expanding our initiative on Connected. Left side, we are expanding our business in seven regions around the world, with the number of IoT lines installed in connected cars exceeding 20 million. Right side shows our efforts with Toyota, with whom we have built the foundation of this business together. We have worked together for over 20 years, starting with collaboration on car telematics service in 2002. Going forward, we will continue working together to build a next-generation global communication platform and develop the global Tsunagu connecting infrastructure. Next is financial business. Left side, our customer base is steadily expanding. Transaction volume of settlement and loan totaled JPY 3.9 trillion. The number of au PAY card members reached 8.8 million, and the number of au Jibun Bank accounts reached 5.3 million.
In June, mortgage loans disbursement by au Jibun Bank exceeded JPY 3 trillion on a cumulative basis. We are receiving support from many customers. Right side shows the effectiveness of promoting the financial business. It not only helps the growth of au Financial Group, but also has synergies with au, contributing to the telecom business. Synergies for au include contribution to value-added ARPU revenue and churn rate reduction. Left side, finance-related value-added ARPU revenue was up by 13.7% year-on-year. Right side shows that the use of multiple financial services reduces churn rate. We will continue to promote cross-use of financial services to achieve growth of the entire group. Next is on our regional co-creation initiative, CATV business. Today, we announced the transfer of our CATV-related business to J:COM in January 2024.
By consolidating our CATV-related business with J:COM, we will maximize the business by leveraging the strengths of both companies and reinforcing our support for CATV operators, thereby contributing to industry development and regional co-creation. Next is generative AI. We will promote its internal use with a view to commercialization. In May, we introduced KDDI AI Chat to 10,000 employees. In addition, we established a company-wide cross-functional organization to create and share best practices internally and link to commercialization. To achieve this, we need to develop AI, R&D, human resources. As shown on the right side, in addition to providing AI-specialized training at KDDI DX University, we offer a development practice through participation in the company-wide cross-functional organization. Regarding carbon neutrality, we are deploying renewable energy business and accelerating initiatives to net zero carbon emissions.
Left side, Gunma Prefecture, KDDI, and au Renewable Energy signed an agreement in June to promote GX. We will strengthen our cooperation to promote renewable energy and VPP. We began operating sustainable base stations in May, as shown on the center, to achieve net zero carbon emissions 24/7, 365. Right side, we joined RE100 in July with a goal of 100% renewable energy across the group by 2050. The last slide is today's summary. Regarding consolidated results, the progress of Q1 of fiscal year ending March 2024 is within expectations. Profit was affected by roaming revenue decrease and impact of accounting treatment the previous year, but focus areas showed solid 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 strength, 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. 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 for your kind attention.
Thank you for waiting. We will now begin the financial 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 1,332,600,000,000 , 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, we 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 Zoom. If your name is called after the announcement of your company name and your name, please unmute yourself and go ahead with questions. We will 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 month, were there any month where you saw year-on-year growth already? Of course, there was some impact from support discount, I would assume. In the second quarter, are you going to see as much effect on year-on-year growth as you saw in the first quarter? You are not going to see that much, but you are going to see the rebound in this fiscal year? Can you explain more about that?
Thank you for your question. As for ARPU revenues, I would like to ask Amamiya to answer 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. 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 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. 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, well, there was some discount for extended period of time, but that time had expired, and the support discount had ended, and there was an impact from that. That means that handset support has not increased. That is correct. We don't have that view.
The second question is about roaming. If you look at the waterfall chart, there was a negative impact of JPY +10 billion impact. For the full year, JPY 60 billion worth, 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 would be appreciated. Thank you.
As for roaming revenues, I'd 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, but we are still under negotiation for the area for this district. 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 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 three areas designated under NEXT Core, and the sales revenue is growing steadily. In particular, IoT, Business DX is leading this momentum. In profit, JPY 1.7 billion. Overall, the growth seems to be small. In the first quarter, it was in line with the plan. Second quarter and onward, 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, 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. 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 bit concerning. Maybe it's because of SoftBank. Compared to a year or two ago, it is up by 40%-50%. From three years ago, it is double. I think you are offsetting that with new subscribers, to capture new customers, the acquisition cost, it incurs cost, 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 0.04%. That is a multi-brand. If we look at this on a brand-by-brand basis, au churn rate is declining, and UQ is pushing up the churn rate.
Core ARPU au users are staying, that is a favorable trend. UQ is pushing up the rate because of two reasons. One is that the proportion of UQ is increasing, 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, 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 c hurn 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, 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, and 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 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 fairness business accounting was something that I had expected. If you look at the waterfall chart, there was a 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?
Also, rationalization and streamlining in second, third, and fourth quarters, are we going to see some results? In other words, in the first quarter, in the annual plan, there was some skew in the first quarter, and are we going to see improvements in the second quarter onward? That was about rationalization. In terms of natural expenses, I think in new UQ mobile plan expense, JPY 2,980 fixed plan and 20 GB is quite simple to understand, and you don't have 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. First of all, on the profit, for a JPY -6 billion 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 expectation. 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 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 mobile price scheme, the proportion is increasing much more than we had expected, that more customers are using this plan. 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. What is equivalent to M and L, which is Komitoku and 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 power business, is it a one-time event? JPY 90 billion, or JPY 1 trillion for the three-year period, that rationalization effect, what was the effect in the first quarter? Are we going to see those results in the second quarter onward? The power sector, was it a one-time phenomenon?
As for the power 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. The cost share was increased this year, so that's why the cost has increased. In June, the power utilities power charge regulation was modified, and 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. 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 three-year period, JPY 100 billion effect is something that we had expected and announced. Up until March 2020, cumulatively, JPY 80 billion is expected until March 2024. We are doing the restructuring in profit and revenue. 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 JPY +10 billion or more that you're 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. There was not much that we've seen in the first quarter.
The larger portion will be realized from the second quarter onward.
Thank you. I feel assured. My second question is about share buyback of your treasury shares. JPY 250 billion in tender offer was announced. Going forward, one year behind, but in May, our president has announced and explained about the share buyback of 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 subscription if there is an offer?
Yes. As for the future policy for share buyback, JPY 250 billion worth of TOB, take or bid, was announced, and it was not done with a view of EPS target. We have been meticulously doing this, and JPY 300 billion was something that we had announced 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. We're not blindly and randomly doing the share repurchase. We are doing proper measures. If there's 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 the question was not that appropriate. You are going to seek EPS and looking at profitability and 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, 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.
First, number of ID, as you mentioned, it's 28,000. The reasons are in June, when UQ introduced its new price plan, the store operation was not sufficient. We slowed down in June. 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. Next, 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.
It may seem weak in some points, but we will see the balance with ARPU so that we can increase the overall revenue as a whole.
One question. You introduced the new plan and 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 did not fall, but it was the procedure that slowed down?
The number of visitors did not change. 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.
In July, we were able to close the contracts in the store on that day.
My next question, Kuwahara-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, the driver is business IoT.
Business DX, IoT under Business DX. In other areas like Corporate DX, Managed and Microsoft 365, sales increases, 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, this year it is evident. That is another reason profit is not as large. 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, the NEXT Core is growing. 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, this will be gone on an apple-to-apple. 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% year-on-year, the accumulation of deals. The number of deals is increasing steadily. 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, we would like to take one last question from one person. If you have any questions, please click the raise hand icon on 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? And what are you going to spend that money on? Are you going to spend on the improvement of competitiveness or profitability improvement, philosophically? In my understanding, raising ARPU revenue is your priority. 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.
Then 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 now going to see particular improvements from the second quarter, 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. 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? Because this is the money that you would get that you had not expected initially.
Well, I'll answer that question.
Just as for the full year prospect, we're just looking at the first quarter, there could be some changes in the environment going forward. At this moment, as for the upside expected, we are going to make some upward revision or forecast or spend, the money on any specific items we 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.