Softbank Group Corp. · TSE:9984
Softbank — FY2019 Earnings Presentation
29 slides from Softbank's earnings presentation, May 20, 2020
Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2020
Ver.1 Earnings Results for the Fiscal Year Ended March 31, 2020 Investor Briefing May 20, 2020 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 used for translation; Abbreviations
Exchange rates used for translation FY2018 FY2019 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 108.71 111.55 112.83 110.46 110.00 107.70 108.98 109.22 1 GBP 147.54 145.84 144.48 143.99 140.88 132.73 139.55 140.20 1 CNY 16.97 16.40 16.31 16.37 16.13 15.37 15.46 15.56 EOQ Jun 30 Sep 30 Dec 31
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results (JPY bn) FY18 FY19 Change YoY Net sales 6,093.5 6,185.1 91.6 1.5% Operating income 2,073.6 -1,364.6 -3,438.2 - Net income (attributable to owners 1,411.2 -961.6 -2,372.8 - of the parent) Accounting 2
Slide 6: Change in Reportable Segments
Change in Reportable Segments • Revised segment classifications after SBKK made Yahoo Japan (currently Z Holdings) a subsidiary. • Renamed to the “SoftBank Vision Fund and Other SBIA-Managed Funds segment.” • Sprint business is classified as discontinued operations and excluded from the reportable s
Slide 7: Sprint/T-Mobile Merger and Impact on Consolidated Earnings
Sprint/T-Mobile Merger and Impact on Consolidated Earnings Completion of the Merger Upon completion of the merger, from Apr 1, 2020 Sprint is no longer a subsidiary of the Company New T-Mobile*1 instead became an equity method associate The Company has an approximately 24%*2 shareholding FY19:
Slide 8: WeWork fair value and agreement details
WeWork The fair value of WeWork’s entire equity • A significant decline from USD 7.3 bn (as of Dec 31, 2019) to USD 2.9 bn (as of Mar 31, 2020) • The fair value is calculated using the income approach (discounted cash flow method). • The significant decline was due to, in light of the COVID-19 outbr
Slide 9: Investments in WeWork by WeWork Investment Subsidiary - 1
Investments in WeWork by WeWork Investment Subsidiary - 1 As of Mar 31, 2020 (USD mil) Cumula- Gain (loss) Recorded in Carrying Consolidated P/L tive Cumula- Account in Account in Amounts Investment Type Invest- tive Gain Consolidated Consolidated B/S in ment (Loss) P/L Q1 Q2 Q3 Q4 FY19 FY19-End Amo
Slide 10: Investments in WeWork by WeWork Investment Subsidiary - 2
Investments in WeWork by WeWork Investment Subsidiary - 2 Liabilities related to financial guarantee contract and loan commitment As of Mar 31, 2020 (USD mil) Cumula- Gain (loss) Recorded in Carrying tive Cumula- Account in Consolidated P/L Account in Amounts Investment Type Invest- tive Gain Consol
Slide 11: Investments in WeWork by SVF
Investments in WeWork by SVF As of Mar 31, 2020 (USD mil) Cumula- Carrying Gain (loss) Recorded in Cumula- Account in Consolidated P/L tive Invest- Account in Amounts Investee Investment Type tive Gain Consolidated ment Consolidated B/S in FY19- (loss) P/L Q1 Q2 Q3 Q4 FY19 Amount End Common stock 52
Slide 12: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) P/L item FY18 FY19 Change (JPY bn) Continuing operations FY18: Recognized gain relating to loss of control over subsidiaries of 176.3 bn as a result of Arm’s Chinese subsidiary becoming a JV. Net sales 6,093.5 6,185.1 91.6 Operating income Operating income from SVF a
Slide 13: Consolidated B/S Summary (IFRSs) - Assets
Consolidated B/S Summary (IFRSs) - 1 B/S As of As of (JPY bn) Main items Change item Mar 2019 Mar 2020 Decrease of 422.6 bn due to a refund of withholding income tax on dividends paid in FY18 from SoftBank 7,758.0 15,636.9 +7,878.9 Current assets Group Japan (SBGJ) to SBG Cash and cash equivalents 3
Slide 14: Consolidated B/S Summary (IFRSs) - Liabilities
Consolidated B/S Summary (IFRSs) - 2 B/S As of As of (JPY bn) Main items Change item Mar 2019 Mar 2020 8,681.7 14,191.1 +5,509.4 Impact of the adoption of IFRS 16 at the beginning of FY19 Interest-bearing debt 3,481.0 3,845.2 +364.2 ・Lase obligations of 892.5 bn previously included in interest-beari
Slide 15: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2019 Mar 2020 9,009.2 7,372.9 -1,636.3 Common stock 238.8 238.8 － Increased due to a decrease in SBG’s economic interests in Yahoo Capital surplus 1,467.8 1,490.3 22.5 Japan (currently Z Holdings) Other equity instru
Slide 16: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (JPY bn) C/F item FY19 ・A wholly owned subsidiary of the Company acquired preferred stock and 2,423.3 Subtotal of cash flows from operating activities common stock of WeWork totaling USD 2.0 bn in Q1, and paid USD 1.5 bn C/F from related to existing commitment of WeW
Slide 17: Income and Loss Arising from SVF and Other SBIA-Managed Funds
Income and Loss Arising from SVF and Other SBIA-Managed Funds (JPY bn) P/L FY18 FY19 Items Gain and loss on investments at 1,302.8 -1,844.9 SVF and other SBIA-Managed Funds FY18: Gain on sale of Flipkart shares and NVIDIA shares Realized gain and loss on sales of investments 296.5 58.3 FY19: Sale of
Slide 18: Difference in Tax Rate
Difference in Tax Rate FY18 FY19 Reconciliation between statutory tax rate and effective tax rate Amount Amount Rate (%) Rate (%) (JPY bn) (JPY bn) Income before income tax 1,682.7 35.5 Statutory income tax rate 31.5% 529.4 31.5% 11.2 (main factors of difference) - Permanent difference (mainly from
Slide 19: Loss Carryforwards (as of Mar 31, 2020)
Loss Carryforwards (as of Mar 31, 2020) (JPY Bn) Valuation Carrying amounts Income base Tax base allowance in B/S Total of companies 3,116.3 1,007.1 -998.9 8.2 based in Japan Total of companies 292.1 67.2 -46.6 20.6 based outside of Japan Consolidated total 3,408.4 1,074.3 -1,045.5 28.8 Accounting 1
Slide 20: Appendix
Appendix
Slide 21: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (JPY bn) Change B/S As of As of Main items Changes in Outline item Mar 2019 Mar 2020 Amortization Others exchange rate 4,321.5 3,998.2 Arm 2,777.5 2,554.1 - -223.4 - Goodwill SBKK 907.5 907.5 - - - Transferred to “Assets classified as held for sale” subseque
Slide 22: Consolidation of Yahoo Japan by SBKK, ZOZO by Z Holdings
Consolidation of Yahoo Japan by SBKK, ZOZO by Z Holdings • On June 27, 2019, Yahoo Japan (currently Z Holdings) issued 1,511 mil. new shares to SBKK through a third-party allotment. • SoftBank Group Japan (SBGJ), a wholly owned subsidiary of SBG, accepted a tender offer of share buyback by Yahoo Jap
Slide 23: Consolidation of ZOZO by Z Holdings
Consolidation of ZOZO by Z Holdings • Z Holdings implemented a tender offer of ZOZO with the aim of strengthening its e-commerce business. • Completed the tender on Nov 13, 2019 and acquired 50.1% of voting rights; ZOZO became a subsidiary of Z Holdings. Increase of assets of SBG B/S by ZOZO consoli
Slide 24: (Reference) Adoption of new standards: IFRS 16 - Leases
(Reference) Adoption of new standards: IFRS 16 - Leases Initial measurement for Right-of-use Assets (ROU) and Lease Liabilities Lease Liabilities: Measured at the present value of total lease payments over the lease term Right-of-use Assets: Amount of the initial measurement of a lease liability plu
Slide 25: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Primary change in accounting treatment: Classification of finance and operating leases has been eliminated and “right-of-use assets*1” and “lease liabilities” are recognized on a balance sheet for all leases. -Leases previously classified as operating leas
Slide 26: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Breakdown of right-of-use assets Opening B/S (Apr 1, 2019) (JPY bn) Class of underlying assets SBKK Sprint Others Total Telecommunications equipment (wireless equipment, 1,079.0 21.9 117.5 1,216.6 switching equipment and other network equipment) Reclassifi
Slide 27: SVF - Gain/Loss on Investments Purchased from SBG in P/L
SVF - Gain/Loss on Investments Purchased from SBG in P/L Investments purchased from SBG other than “Bridge investments” shown below. Examples include investments that were made without the premise of offering to the SVF at the time of acquisition, or, investments that were made with the premise of o
Slide 28: Differences in Figures of Financial Results of SoftBank Segment and SBKK
Differences in Figures of Financial Results of SoftBank Segment and SBKK (1) Depreciation and amortization for non-current assets at SBKK (formerly Vodafone K.K.) SBG’s consolidated financial statements SBKK’s consolidated financial statements When Vodafone K.K.’s controlling Depreciation & amortiza
Slide 29: Settlement of Prepaid Forward Contract using Alibaba Shares
Settlement of Prepaid Forward Contract using Alibaba Shares At signing of contract 3 years total At settlement （June 2016） （June 2019） Derivative liabilities USD 6.8 bn Gain relating to settlement of variable prepaid forward contract Amortized Interest expense using Alibaba cost USD 0.3 bn shares De