Softbank Group Corp. · TSE:9984
Softbank — FY2022 Earnings Presentation
32 slides from Softbank's earnings presentation, May 11, 2023
Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2023
Earnings Results for the Fiscal Year Ended March 31, 2023 Investor Briefing May 11, 2023 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment including any offer to buy
Slide 3: Exchange rates and abbreviations
Exchange rates per JPY used for translation FY2021 FY2022 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 110.00 110.47 113.60 117.10 129.04 138.68 141.16 133.26 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 122.39 133.53 Abbreviations Abbreviations used in Accounting sectio
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results (¥ B) FY21 FY22 Change Change % Net sales 6,221.5 6,570.4 +348.9 +5.6% Income before -869.6 -469.1 +400.4 - income tax Net income (attributable to owners of the -1,708.0 -970.1 +737.9 - parent) (Reference) Loss on investments -3,434.7 -835.1 +2,599.7 - Investment Business of Hol
Slide 6: Investment Business of Holding Companies Segment
Investment Business of Holding Companies Segment □：Alibaba-related □：TMo&DT-related □：WeWork-related (¥ B) P/L item FY21 FY22 FY22 Main Items Gain/loss on investments at Investment Business of 104.1 4,560.6 Holding Companies Gain/loss relating to settlement of prepaid forward 200.0 4,838.3 See p4-5
Slide 7: Alibaba: Transactions in FY2022
Alibaba: Transactions in FY2022 Scope of Ownership % consolidation As of Mar 31, 2022 24.4％*1 Procurement of $10.5B through prepaid forward contracts Apr-Jun Equity method Physical settlement of prepaid forward contracts associate Procurement of $6.8B through prepaid forward Jul contracts Early phys
Slide 8: Alibaba: Contribution to Income Before Income Tax
Alibaba: Contribution to Income Before Income Tax Recorded a total of ¥4.3T profit related to Alibaba shares in FY2022 (¥ B) Gains and losses while an associate Loss on equity method investment -25.4 Gain from changes in equity interest (net) 75.7 Gain on settlement of prepaid forward contracts usin
Slide 9: Alibaba (Amounts Recorded in B/S)
Alibaba (Amounts Recorded in B/S) Equity method Investment securities (FVTPL) investments Excluded from Recorded in “investment securities” as Alibaba share price associates financial assets at FVTPL with investment Increment by income on equity results measured at fair value method investments, etc
Slide 10: Alibaba Shares and Derivative Financial Assets/Liabilities
Alibaba Shares and Derivative Financial Assets/Liabilities (Amount Recorded in B/S) Value of Alibaba shares recorded in B/S Derivative financial Investment securities (FVTPL) assets/liabilities (net) considering prepaid forward contracts: Alibaba share price $102.18 $102.18 $33,214M ( A + B ) $79.99
Slide 11: Monetization of T-Mobile Shares
Monetization of T-Mobile Shares Number of shares held Procured (millions) Execution Transaction amount Deutsche timing T-Mobile ($ B) Telekom shares shares a Borrowings made using 106.3M T-Mobile shares pledged as collateral (margin loan) 4.38 Jul 2020 Number of shares held as of Jun 30, 2021 106.3
Slide 12: T-Mobile: Shareholding & Fair Values
T-Mobile: Shareholding & Fair Values includes shares subject to Deutsche Telekom’s call options T-Mobile $144.84 Sold 21.2M T-Mobile shares in Apr share price $144.83 $140.00 2022 $134.54 $134.17 $127.76 $128.35 following Deutsche Telekom's partial exercise of $125.29 call options, which were exerci
Slide 13: Deutsche Telekom: Shareholding & Fair Values
Deutsche Telekom: Shareholding & Fair Values Acquired 225M Deutsche Telekom shares in Sep 2021 in return for the sale of T-Mobile €22.35 shares. Deutsche Telekom share price €18.95 €18.64 €17.67 €17.40 €17.49 $1,231.0M (¥164.81B) €16.93 €16.30 valuation gain for FY22Q1-Q4 Fair value of Deutsche 5,46
Slide 14: T-Mobile Shares: Fair Values of Contingent Consideration
T-Mobile Shares: Fair Values of Contingent Consideration Closing price on May 8, 2023: $144.18 $144.83 Contingent consideration is $140.00 $144.84 the Company’s right to T-Mobile $134.85 $134.54 $134.17 $127.76 $128.35 acquire 48.8M share price $125.29 T-Mobile shares for no $114.36 $115.98 $1,411.7
Slide 15: Status of Investment and Financial Support for WeWork
Status of Investment and Financial Support for WeWork (¥ B) P/L B/S Carrying amount Account Amount Changes since Apr 2023 on Mar 31, 2023 (as in the notes to the (Minus Account (Minus shows financial statements) shows loss) liabilities) Loss on investments at -340.4 Investments from SVF 43.1 SoftBan
Slide 16: SoftBank Vision Funds Segment
SoftBank Vision Funds Segment (¥ B) P/L FY21 FY22 FY22 Main Items Gain/loss on investments at SoftBank Vision Funds -3,434.5 -5,279.5 Gain/loss on investments at SVF1, SVF2, and LatAm -3,436.4 -5,298.5 ¥2,311.2B loss at SVF1, ¥2,445.4B loss at SVF2 Funds Realized gain/loss on investments* 1,345.6 78
Slide 17: Investment Performance of SVF1 and SVF2
(Reference) Investment Performance of SVF1 and SVF2 ($ B) Since Inception FY22*1 Gain/loss Gain/loss Cost*2 Returns*2 Gain/loss Q4 YTD SVF1 89.6 101.0 11.4 0.4 -17.3 Exited investments 24.0 42.7 18.7 0.3 0.6 Investments before exit 65.6 55.9 -9.7 0.2 -14.7 Reversal of previously-recorded valuation g
Slide 18: Consolidated P/L Summary
Consolidated P/L Summary (¥ B) P/L item FY21 FY22 Change Net sales 6,221.5 6,570.4 +348.9 1 ¥4,838.3B gain on settlement of Alibaba prepaid forward Gross profit 3,265.6 3,328.0 +62.5 contracts (see p4-5) Gain/loss on investments 2 Valuation loss (net) of ¥1,952.0B at SVF1 and ¥2,527.5B at Investment
Slide 19: Difference in Tax Rate
Difference in Tax Rate (Minuses show expenses) FY22 Rate (％) Amount (¥ B) Income before income tax (minus: loss) -469.1 Effective statutory tax rate 31.5％ *1 147.6 (Main factors of difference) (i) Permanent difference -307.1% -1,440.8 (ii) Recoverability of deferred tax assets 145.4% 682.2 (iii) Tem
Slide 20: Loss Carryforwards (as of Mar 31, 2023)
Loss Carryforwards (as of Mar 31, 2023) (¥ B) Valuation Carrying amounts Income base Tax base allowance in B/S Total of companies 2,923.2 882.6 -314.0 568.6 based in Japan Total of companies 203.0 45.1 -21.2 23.9 based outside of Japan Consolidated total 3,126.2 927.7 -335.2 592.5 Accounting 17
Slide 21: Consolidated B/S Summary – Non-current assets
Consolidated B/S Summary – 1 (¥ B) B/S 1 SBG balance: ¥3,454.5B (¥951.8B increase) Main items Mar 2022 Mar 2023 Change item 2 ¥1,033.6B decrease due to the full settlement of Alibaba prepaid forward contracts Current assets 10,028.6 10,586.5 +557.9 outstanding at FY21Q4 Cash and cash equivalents 5,1
Slide 22: Investment Securities in Consolidated B/S (Main Investments)
Investment Securities in Consolidated B/S (Main Investments) (¥ B) Mar 2022 Mar 2023 Change Outline Investment securities 3,085.4 7,706.5 +4,621.1 FVTPL 2,587.6 7,244.3 +4,656.7 Alibaba shares carrying amount at FY22 was ¥4,842.3B, mainly reflecting an increase in the 4,842.3 +4,842.3 Alibaba share
Slide 23: Breakdown of Goodwill/Intangible Assets
Breakdown of Goodwill/Intangible Assets (¥ B) Change B/S Main items Mar 2022 Mar 2023 Amorti- Outline Item Changes in Others zation FX rate 4,897.9 5,199.5 * Arm 2,898.1 3,161.7 ― +263.6 ― Goodwill SBKK 913.9 913.9 ― ― ― LINE 630.6 628.9 ― ― ― ZOZO 212.9 212.8 ― ― ― Technologies 357.7 344.3 Main Arm
Slide 24: Consolidated B/S Summary – Non-current liabilities
Consolidated B/S Summary – 2 (¥ B) B/S Main items Mar 2022 Mar 2023 Change 1 SBG item Borrowings*: ¥381.9B (¥873.3B decrease) 12,381.5 10,580.7 -1,800.8 Corporate bonds*: ¥5,753.0B (¥165.2B decrease) Interest-bearing debt 7,328.9 1 5,129.0 -2,199.8 Wholly owned subsidiaries conducting fund procureme
Slide 25: Consolidated B/S Summary – Equity
Consolidated B/S Summary – 3 (¥ B) Mar Mar Items Change 2022 2023 11,707.8 10,649.2 -1,058.5 1 Repurchased $0.75B (face value) of USD-denominated Undated Hybrid Notes*1 Common stock 238.8 238.8 ― 2 ・¥1,412.4B*2 was deducted following the retirement of treasury stock Capital surplus 2,634.6 2,652.8 +
Slide 26: Impact of the Weaker Yen on P/L & B/S (Illustration)
Impact of the Weaker Yen on P/L & B/S (Illustration) P/L B/S Entities Components Foreign exchange Exchange differences gain (loss) from translation Foreign currency- denominated cash and cash equivalents/ SBG stand-alone + Loans receivable Foreign exchange gain Subsidiaries conducting (excl. investm
Slide 27: Impact of the Weaker Yen in FY22
Impact of the Weaker Yen in FY22 Foreign exchange loss in consolidated P/L for FY22: ¥772.3B At SBG stand-alone: Foreign exchange losses of ¥927.5B related to foreign currency-denominated borrowings from Group companies, ¥96.8B related to foreign currency-denominated bonds (incl. hybrid bonds) Mar 3
Slide 28: Consolidated C/F Summary
Consolidated C/F Summary (¥ B) C/F 1 ¥1,984.2B decrease in a net inflow yoy FY21 FY22 Primary details for FY22 ・¥1,918.4B decrease in SB Northstar’s cash inflows item +1,573.6 Subtotal of cash flows from operating activities ・¥235.6B decrease in outlay for income taxes compared to FY21 C/F from 1 op
Slide 29: Cash Tax
Cash Tax SBG’s wholly owned subsidiary paid ¥201.8B cash tax in FY22Q3 mainly due to the realization of derivative gain related to the early physical settlement of Alibaba prepaid forward contracts in Aug – Sep 2022 SBG will pay ¥225.6B cash tax in FY23Q1 mainly due to gain on sale of Alibaba shares
Slide 30: Income Taxes Paid on a Consolidated Basis (Net)
Income Taxes Paid on a Consolidated Basis (Net) (¥ B) FY19 FY20 FY21 FY22 Consolidated 636.3 445.5 589.3 525.9 Japan 575.2 310.5 551.2 469.7 SBG and holding companies (wholly 324.7 35.7 200.0 214.2 owned subsidiaries) Operating companies, mainly 250.5 274.8 351.2 255.5 SBKK and Yahoo Japan Overseas
Slide 31: Co-investment Program to SVF2: Related Party Transactions
Co-investment Program to SVF2: Related Party Transactions Equity interests of third-party interests Masayoshi SBG FY22: $― (¥―) Son* 1 FY21: $2,207M (¥270.1B) Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $2,923M 100% (Return of capital) (i) Acquisition costs: $2,59
Slide 32: Co-investment Program to LatAm Funds & Management's Investment
Co-investment Program to LatAm Funds & Management’s Investment in Asset Management Subsidiary Co-investment program to LatAm Funds Management’s investment in Equity interests of third-party investors asset management subsidiary FY22: $215M ( ¥28.7B) FY21: $659M (¥80.7B) Masayoshi SBG Masayoshi Son S