Softbank Group Corp. · TSE:9984
Softbank — FY2023 Earnings Presentation
60 slides from Softbank's earnings presentation, May 13, 2024
Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2024
Ver.1.3 Earnings Results for the Fiscal Year Ended March 31, 2024 Investor Briefing May 13, 2024 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 FY2022 FY2023 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 129.04 138.68 141.16 133.26 138.11 145.44 147.00 147.87 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 133.53 151.41 Abbreviations Abbreviations used in Finance section o
Slide 4: Finance
Finance SBG stand-alone financial figures are calculated by excluding those of self- financing entities from the consolidated figures, unless otherwise stated. Major self financing entities includes SBKK (including its subsidiaries such as LY Corporation and PayPay), Arm, SVF1, SVF2, LatAm Funds, et
Slide 5: Current Market Environment
Current Market Environment SoftBank Despite rising U.S. interest rates, stock indices, with the exception of Chinese high-tech stocks, are rising. JPY weakened against USD U.S. Interest Rates Stock Indices*1 Exchange Rate (USD/JPY) (%) FF Target Rate (upper bound) (JPY) 165 4 6.05 — US Treasury 2Y i
Slide 6: Impact of Market Environment on Our NAV
Impact of Market Environment on Our NAV SoftBank NAV nearly doubled due to the surge in Arm shares and depreciation of JPY “en Forex Impact* Others arm Other Assets Bod} -0.4 a 13.4% iati -4% appreciation 0.8 of USD ¥+13.71 Yoy ($1=¥133.53>151.41) Share price increase after IPO Time of listing (Sep
Slide 7: Historical Equity Value of Holdings
Historical Equity Value of Holdings SoftBank Large-scale portfolio reshuffling was facilitated by the monetization of Alibaba and the rise in Arm's value ¥30.4r ¥30.3r ¥28.6r V6 4 ¥26.9 ¥23.21 SVF1/SVF2/LatAm Telecommunication ¥ 1 5. or companies Others Alibaba Alibaba Group rr ad r mM < BEPPSo FY20
Slide 8: Historical NAV
Historical NAV SoftBank NAV increased significantly, recording its highest value NAV L M&A | | IPO | ome 6M VI7 8 SVF2. Sprint ) 10OT LatAm SoftBank SVF1 [M&A] arm LIPO EQ Alibaba croup [Launch | } JAPAN TELECOM SATCS. BB. [sa | [_1P0_| 6) Or Ez. ‘Alibaba.com “YaHQQ! vodafone FY2000 Fy2005 FY2010 Fy
Slide 9: FY2023 Summary
FY2023 Summary NAV doubled due to strong performance of listed shares, led by Arm NAV ¥27.8T (+¥13.7T YoY) LTV 8.4％ (-2.6 ppt YoY) NAV・LTV Net debt ¥2.6T (+¥0.8T YoY) *1 Cash position ¥4.7T (-¥0.5T YoY) Executed sizable monetization ⁻ Asset back finance using Alibaba shares ¥605.6B (Completed cumula
Slide 10: Historical Equity Value of Holdings
Historical Equity Value of Holdings SoftBank Significant increase in Arm's value nearly doubled the equity value of holdings 30.3 Net of asset-backed finace (¥T) aa OTM Share price $124.99 as of 31 Mar Alipaba croup 15,9 0.7 SVF1+2, LatAm SoftBank Corp. T-Mobile/ Deutsche Telekom Others Mar 2023 Jun
Slide 11: Proportion of Listed Shares
Proportion of Listed Shares SoftBank Proportion of listed shares is ~80%, resulting in the portfolio's liquidity being at an extremely high level Net of asset- Unlisted 26% 21% 48% 59% Listed FRZ0% 79% 52% 41% Mar 2021 Mar 2022 Mar 2023 Mar 2024 * Proportion of listed shares : Shares of Alibaba, Arm
Slide 12: Asset Concentration Risk
Asset Concentration Risk SoftBank Pursue long-term return by flexibly handling short-term volatility A defensive wall against short-term asset volatility Ample cash position (¥4.7T*) * Constantly maintain sufficient cash position to cover 2 years' worth of bond redemptions « Abundant cash position t
Slide 13: Historical Invested Amounts
. . SoftBank Historical Invested Amounts (SVF1i + SVF2 + LatAm Funds + SBG) Group Invested $3.9B in FY2023. Strategic investment committed capital stands at $5B ($B) $5B FY2022 total FY2023 total $4.0B $3.9B 2.5 SBG*! 1.8 1.5 SVF1+ 0.9 SVF2+ 05 05 tA *2 LatAm 0.5 i 0.3 0.3 fee ea ai Q2 Q3 a4 Qi Q2 Q
Slide 14: Historical LTV
Historical LTV*! SoftBank LTV decreased by 2.6ppt YoY, standing at one of the lowest levels in history Average LTV over the past two 10.6% 3 years*2 8.0% 8.4% Mar 2022) Jun2022 Sep2022 Dec2022 Mar2023 Jun2023 Sep2023 Dec2023 Mar 2024 *1 As of the end of each quarter *2 Incl. end of FY2022Q4 Fi ii *3
Slide 15: Cash Position and Future Bond Redemptions
Cash Position and Future Bond Redemptions Maintain ample cash position, well over 2-year worth of bond redemptions Cash position Bond redemption schedule*3 ¥4.7 T *1 (¥ B) 749.5 Undrawn commitment line*2 Bond redemptions 3,934.0 for the next 2 years (¥1.7T) ＞ 700.5 999.0 1,097.2 506.1 Mar 2024 Apr 2
Slide 16: Currency Breakdown and Yield of Cash Position
Currency Breakdown and Yield of Cash Position soitBank Continuing high yield operations primarily with USD deposits. Annual interest income in FY2023 was ~¥160.0B*! Breakdown of cash position*2 Yield for SBG USD deposits, etc. fey (#7) (%) 5.5% FF Rate (Upper Limit) 5.5% 5.5% Yield"? a 4.2%us 10Y a
Slide 17: Impact of Currency Exchange
Impact of Currency Exchange Weaker JPY against USD increases NAV, while decreasing consolidated net income Quarter Year (FY23Q4) （FY22Q4-FY23Q4） Forex change Weaker by ¥10 Weaker by ¥18 (Forex change in USD/JPY) (6.8%) (13.4%) Impact on NAV* +¥1.8T +¥3.3T Impact on consolidated net -¥0.4T -¥0.7T inc
Slide 18: Bond Redemption Schedule
Bond Redemption Schedule SoftBank Group Bond issuances will be managed with due consideration for cash position and market environment (¥ B) 1,555.4 1,097.2 999.0 700.5 588.0 506.1 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 + Outstanding balance as of Mar 31, 2024. However, incl. domestic senior bond
Slide 19: Issuance of Domestic Senior Bonds in March and April 2024
Issuance of Domestic Senior Bonds in March and April 2024 SoftBank Completed large bond offerings for retail and institutional investors. Symbolic deals confirming support from investors for our credit profile March 2024: Senior retail bonds April 2024: Senior institutional bonds ¥550.0B ¥100.0B in
Slide 20: Household Financial Assets (Bank of Japan Flow of Funds)
SoftBank Household Financial Asset (Bank of Japan Flow of Funds) rus Household financial assets continue to increase and exceed ¥2,000T Dec 31, 2005 ome, Total ¥1,631T ¥Olt \ Insurance, pension and standardized guarantees | Currency and deposit ¥4827 ¥/997 Investment trust ¥51T Equity, etc. ¥208T De
Slide 21: Growth of Investments in Corporate Bonds
Growth of Investments in Corporate Bonds Investments in corporate bonds by households significantly expanded, ranking as the second largest category after government bonds / FILP Dec 31, 2005 Dec 31, 2023 Balance of corporate bonds ¥1.2T ¥8.0T (Ref) Balance of ¥26.8T ¥13.5T government bonds / FILP %
Slide 22: Historical Issuance and Redemption of SBG Retail Bonds
SoftBank Historical Issuance and Redemption of SBG Retail Bonds rus Continuing large-scale issuance. The cumulative issuance amount has reached ¥8T. The cycle of issuance and redemption continues. 1 ete («B) 772.0 7,899.5 Annual Issuance Amount Cumulative Issuance Amount | 900.0 Hawks Bond initial y
Slide 23: SBG Leads the Retail Bond Market
SBG Leads the Retail Bond Market SoftBank SBG's continuous offering of retail bonds has significantly contributed to the expansion of the retail bond market Outstanding retail bonds per issuer (as of the end of Mar 2024) *1 | Top 10 issuers by outstanding retail bond | 10 issuers by outstanding reta
Slide 24: SBG Retail Bonds vs. Bank Time Deposits Balance
SBG Retail Bonds vs. Bank Time Deposits Balance Softbank SBG retail bonds have grown to a scale comparable to the time deposits of major regional banks Balance of major Japanese banks’ time deposit*! and SBG retail bonds*2 (¥T) Japan Post Bank { 75.2 Japan Post Bank MUFG 29.8 “Mega” Banks Mizuho FG
Slide 25: Initiatives to Provide Financial Products to Retail Investors
Initiatives to Provide Financial Products to Retail Investors Encourage a "shift from savings to investment" through continuous offerings of a wide range of mid-risk/mid-return products Low risk/ Mid-risk / Mid-return High risk/ Low return High return Balance First year of Investment Outstanding*1 o
Slide 26: Short-term Financing Balance Track Record
Short-term Financing Balance Track Record SoftBank Diversifying product lineup to meet short-term investment needs from a wide range of investors s < Mar 2024 Short-term financing Balance cP for financial markets 176.5 money trusts for corporate 118.2 money trusts for retail investors 189.5 Rind Ss
Slide 27: Funding and Fund Management Plans for FY2024
Funding and Fund Management Plans for FY2024 Flexibly select methods and scale while closely monitoring market conditions Products Plans Primarily anticipated for refinancing Domestic Bond (¥450.0B to be redeemed in FY2024) Foreign Currency Primarily anticipated for refinancing Bond ($1.9B equiv. to
Slide 28: SBG Stand-alone Interest-bearing Debt
SBG Stand-alone Interest-bearing Debt*! SoftBank Interest-bearing debt excl. non-recourse increased due to forex impact and domestic bond issuance Main changes from December 31, 2023 + Increase in financial liabilities relating to prepaid forward contracts +¥172.1B*2 (¥ B) - Forex impact on financia
Slide 29: SBG Stand-alone Cash Position
SBG Stand-alone Cash Position SoftBank Cash position increased mainly from forex impact and domestic bond issuance (¥B) 5,171.3 SB Northstar 29.6 415284 4,397.6 " 40.6 3,956.1 3,771.1 2.2 28.7 3,934.0 Mai es from Dec 2023 -Domestic bonds issuance -Domestic bonds redemption (+¥550.0B) (-¥399.9B) «Imp
Slide 30: SBG Stand-alone Net Interest-bearing Debt
SBG Stand-alone Net Interest-bearing Debt Softbank Adjusted net interest-bearing debt on par with previous quarter (¥ B) 9,978.8 10,023.3 10,363.5 . 8,941.6 8,205.2 - wal 7,536.8 7,810.2 > | Asset-backed finance, etc. ¥7,443.1B 8,034.6 r . Hybrid finance ¥367.1B 6,458.2 7,588.6 Adjusted SBG stand-al
Slide 31: Historical Credit Ratings
Historical Credit Ratings ~ SoftBank First upgrade in 12 years Acquisition of Acquisition Acquisition | Acquisition Listing Listing J CR A+ Japan Telecom || of Vodafone KK of Sprint of Arm of SBKK of Arm 1 1 1 1 1 ys A i— 1 ' t I 1 I A- 1 1 ra wml, (Stable) BBB+ toa 1 1 ' t I 1 BBB oI ' \ t ! t ' S&
Slide 32: Approach to Financial Strategy
Approach to Financial strategy SoftBank Formulation of financial strategies to execute investment strategies — Financial Financial management . synchronized with Philosophy investment strategy ys _ ssi“ Ce ‘Adhering to financial policy Financial *Flexibly respond to all environmental changes . q «Bu
Slide 33: Evolution of Financial Strategy
Evolution of Financial Strategy SoftBank Executed financial strategies tailored to environmental changes Emergence of Geopolitical Equity Value of Holdings* Start of US interest rate Semiconductor hikes Bankruptcy of Silicon Valley Bank JCR Financial Strategies Based on Financial Philosophy and Fina
Slide 34: Financial Management as an Investment Holding Company: Interest-Bearing Debt
Financial Management as an Investment Holding Company: SoftBank Breakdown of Consolidated Interest-Bearing Debt Grow Debt for which SBG has direct obligation of repayment is maintained at a low level Consolidated interest-bearing debt ¥21.47 Debt for self-financing entities SoftBank.. SWFLSVF2, etc.
Slide 35: Financial Management as an Investment Holding Company: Historical Asset and Debt
Financial Management as an Investment Holding Company: SoftBank Historical Asset and Debt Srow Achieved group-wide growth through effective asset utilization, while keeping SBG’s directly obligated net interest-bearing debt low . | Leverage management through Phase of business expansion through leve
Slide 36: Historical Equity Value of Holdings and LTV
Financial Management as an Investment Holding Company: Historical Equity Value of Holdings and LTV Equity value of holdings 25% |—— = ee eee ee ee ee ee ee ee Controlling LTV to a low level even when the equity value of holdings declines ef a FY2018 FY2019 (Note) As of each quarter Q2. O38 QF Qt FY2
Slide 37: Evaluation from Market
Evaluation from Market SoftBank Our share price and credit spreads performing steadily ont News article on domestic Spread of SBG foreign currency- 1 (JPY) Significantly (bps) Historically low level 12,000 — Share price recovered 1,000 —..UspD 3.4Y — Analyst target price — USD 3.9Y 11,000 (average)
Slide 38: FY24 Financial Strategy
FY24 Financial Strategy = SoftBank * . Financial management Financial synchronized with . investment strate Philosophy oy . . -Adhering to financial policy Financial -Flexibly respond to all environmental changes . . -Building trust with each stakeholder Pri ncl ples (Pursuing the optimal balance be
Slide 39: Adhering to Financial Policy
Adhering to Financial Policy Maintain LTV below 25% in normal times 1 (upper threshold of 35% even in times of emergency) 2 Maintain at least 2-year worth of bond redemptions in cash Secure recurring distributions and dividend income from 3 SVF and other subsidiaries Finance 36
Slide 40: Promoting Sustainability
Promoting Sustainability
Slide 41: Addressing the Top Priority Issues in Sustainability
SoftBank Addressing the Top Priority Issues in Sustainability rus Responsible AI Climate change Human capital Established Group GHG Emissions Reduction Plan for SBG and its major Attracting autonomous : subsidiaries (Scope1,2) and professional talent Established an eso) ‘ and supporting their AI G 6
Slide 42: Revision of Material Issues
Revision of Material Issues SoftBank Material issues relating to sustainability (“Material Issues”) updated according to changes in social and business environment € 2 g Responsible Al oO Be Hi i on a uman capil <£ [J x o¢ Pe Q £ Conservation of “Some 5 = natural capital 2 ie} a E c 2 8 E (Important
Slide 43: Promoting sustainability through investment: ESG integration
Promoting sustainability through investment: ESG SoftBank integration Sioa As an investment company, SBG promotes sustainability through its investments Developed and operating a framework for assessing risks and opportunities arising from sustainability in the investment process Pre-investment Inve
Slide 44: Investments that help address sustainability related issues
Investments that help address sustainability related SoftBank issues crew Aiming to address environmental and social challenges through investment == Flock Freight OLA ELECTRIC ll ENERGY VAULT . _E EXEGER ln... swell IONQ © mapbox Enpal. Qa Circular economy flexport Plenty Environment &) CAMBRIDGE M
Slide 45: Noto earthquake recovery aid
Noto earthquake recovery aid SoftBank Various relief efforts made for those affected by the 2024 Noto peninsula earthquake Image source : The NGO Collaboration Center for HANSHIN QUAKE Rehabilitation Finance 42 Image source : Civic Force
Slide 46: MSCI rank-up: 2 consecutive years
MSCI rank-up: 2 consecutive years Achieved an 'AA' rating after consecutive upgrades over two years Earned a perfect score in the environmental assessment of CO2 emissions for two consecutive years Score progression THE USE BY SoftBank Group Corp. OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSC
Slide 47: Appendix
Appendix
Slide 48: SBG Credit Spread
SoftBank SBG Credit Spread rus Spread of SBG foreign currency- SBG 5-year CDS denominated senior notes 700 —USD 1.2Y —-USD 2.7Y —SBG SY CDS (JPY bps —USD 4.7Y —-USD 7.7Y PY) —EUR 0.7Y —EUR 3.2Y 450” 600 —EUR 5.7Y —EUR8.7Y 400 500 350 300 400 250 300 200 200 150 100 100 50 0 ) Dec 2022Mar 2023 Jun 20
Slide 49: Calculation of Equity Value of Holdings as of Mar 31, 2024
Calculation of Equity Value of Holdings as of Mar 31, 2024 SoftBank ¥36.9T (¥T) (unadjusted) _ Equity value of holdings _ Equity value of holdings Adjustment for (adjusted) (unadjusted) b - Payable t a rt 923M Share price amount for 1 Margin I i i © _ _ _ rgin loan: ——— O¥14.4T= | ¥25-6T shares hela
Slide 50: LTV Calculation: SBG Stand-alone Equity Value of Holdings
SoftBank LTV Calculation: SBG Stand-alone Equity Value of Holdings Group (L) Adjusted SBG stand-alone net debt ¥2.55T (V) Adjusted SBG stand-alone equity value of holdings”: Adjusted SBG stand-alone equity value of holdings SBG‘s interest in =8.4% Other investments 1.89 SVF1 +3.44 SVF2 +4.42 LatAm F
Slide 51: LTV Calculation: Details of Equity Value of Holdings (1/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (1/2) (¥ T) Assets Value Calculation method (a)Alibaba 0.01 Multiplying the number of Alibaba ADSs equivalent to the number of shares held by SBG by the Before adjustment 3.76 ADS price Sum of the outstanding maturity settlement am
Slide 52: LTV Calculation: Details of Equity Value of Holdings (2/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (2/2) (¥ T) Assets Value Calculation method (g) T-Mobile 1.76 Value of SBG’s shareholding (92,089,766 shares as of Mar 31, 2024) (incl. the number of shares subject to call options held by Deutsche Telekom (DT): 34,971,809 shares a
Slide 53: LTV Calculation: SBG Stand-alone Net Debt
LTV Calculation: SBG Stand-alone Net Debt SoftBank (L) Adjusted SBG stand-alone net debt*! (V) Adjusted SBG stand-alone equity value of holdings Adjusted SBG Consolidated Net debt at self- Other els inet net debt financing entities adjustments 14.89 SBKK +4,53 LatAm Funds -0.003 Adjustments for hybr
Slide 54: LTV Calculation: Details of SBG Stand-alone Net Debt
LTV Calculation: Details of SBG Stand-alone Net Debt (¥ T) SBG stand-alone net debt Consolidated net interest-bearing debt - net interest-bearing debt (before adjustment) 10.36 at self-financing entities*1 For hybrid bonds and hybrid loans with maturity dates, deduct 50% from interest-bearing debt;
Slide 55: Adjustment for Asset-backed Finance
Adjustment for Asset-backed Finance in LTV and NAV Calculation SoftBank Non-recourse asset-backed finance is deducted from debt. Value of assets required for settlement is deducted from assets. 1) Forward/Collar transactions (2) Margin loan 1 ie Alibaba SBKK, Arm Asset-backed GES finance Funding thr
Slide 56: Geographical Portfolio Diversification
Geographical Portfolio Diversification SoftBank Proportion of China decreased significantly Proportion of EMEA increased significantly due to growth of Arm’s value China finance Japan APAC (excluding China and Japan) EMEA 24% North America Mar 2022 Mar 2023 Mar 2024 (Note) Classification of regions
Slide 57: Portfolio's Core Asset Shifts from Alibaba to Arm
SoftBank Portfolio’s Core Asset Shifts from Alibaba to Arm Alibaba monetization and the rise in Arm value contributed. Geopolitical risks decreased arm Eo vtibaba Group 5 MEEPS SBKK SVF1 (68 investees) SVF2 (272 investees) 1% LatAm (89 investees) Others Mar 2021 Mar 2022 Mar 2023 Mar 2024 Proportion
Slide 58: Debt Fixed/Floating Ratio of Interest-bearing Debt
Debt Fixed/Floating Ratio of Interest-bearing Debt SontBank No risk of surge in interest payments from short-term interest rate rise Fixed /Floating Ratio of SBG Stand-alone Interest-bearing Debt*! Floating rate; JPY*+ ¥8.1B interest payment increase with 1 ppt rise in JPY interest rate*5 Floating r
Slide 59: Breakdown by Currency
Breakdown by Currency SoftBank Investment and monetization flows are mainly in USD, while debt refinancing is principally in the same currency (— Investments and monetization > fl Debt composition \\ Cash position: ¥3.9T*! Equity value of holdings: ¥30.3T*2 Debt*?: ¥6.8T Subsidiaries Net of asset- b
Slide 60: Consolidated Interest-bearing Debt / Cash Position / Net Interest-bearing Debt
Consolidated Interest-bearing Debt/ Cash Position/ Net Interest-bearing Debt Consolidated Interest-bearing Debt*1 (¥ B) Mar 2023 Jun 2023 Sep 2023 Dec 2023 Mar 2024 SBG stand-alone 12,691.7 14,083.3 14,335.8 13,765.7 14,297.5 Incl. SB Northstar - - - - - SVF1&2 and LatAm Funds 1,322.7 1,419.9 542.2