Softbank Group Corp. · TSE:9984
Softbank — FY2008 Earnings Presentation
100 slides from Softbank's earnings presentation, Apr 30, 2009
Slide 1: Earnings Results For the Fiscal Year Ended March 31, 2009
Earnings Results For the Fiscal Year Ended March 31, 2009 April 30, 2009 SOFTBANK CORP. 1 February 25, 2010 Version Due to protection of rights, some of the photos and images included at the time of publication have been modified or revised.
Slide 2: Highlights
Highlights 1. 1. Record Record profit profit for for 44 consecutive consecutive years years Operating Operating income: income: JPY JPY 359.1bn 359.1bn (+11% (+11% YoY) YoY) 2. 2. No. No. 11 net net additions additions for for 22 consecutive consecutive years years Double-digit Double-digit growth g
Slide 3: Summary of Earnings (FY08)
Summary of Earnings (FY08) <bn JPY> FY2007 FY2008 YoY Net sales 2,776.1 2,673.0 (103.1) EBITDA 626.6 678.6 51.9 Operating income 324.2 359.1 34.8 Ordinary income 258.6 225.6 (32.9) Net income 108.6 43.1 (65.4) Operating cash flow 158.2 447.8 289.6 Free cash flow (164.2) 181.5 345.7 3
Slide 4: Met Earnings Forecast
== ooftBank Met Earnings
Slide 5: Exceeded Raised Earnings Forecast
Exceeded Raised Earnings Forecast <bn JPY> FY2008 (actual) Operating income 359.1 Free cash flow 181.5 forecast forecast forecast (08.10.29) (09.2.5) (09.4.10) Operating income 340.0 340.0 350.0 Free cash flow 140.0 150.0 170.0 5
Slide 6: FY2009 Earnings Forecast
FY2009 Earnings Forecast <bn JPY> FY2007 FY2008 FY2009 (actual) (actual) (forecast) Operating income 324.2 359.1 420.0 Free cash flow (164.2) 181.5 250.0 6
Slide 7: Earnings Results 10 Year Trend
Earnings Results 10 Year Trend 7
Slide 8: Net Sales
Net Sales (t JPY) 3.0 2.6 5 times in 10 years 2.0 FY2008 JPY2.6 trillion 1.0 Revenue 0.5 increase also expected in 0.0 FY2009 FY1998 FY2008 8
Slide 9: EBITDA
EBITDA (bn JPY) 700 678.6 600 12 times 500 in 10 years 400 300 FY2008 200 JPY678.6bn 100 54.6 0 -100 FY1998 FY2008 9
Slide 10: Operating Income
Operating Income (bn JPY) 420.0 400 30 times 359.1 Record profit for in 10 years 4 consecutive years 300 FY2008 200 JPY359.1bn 100 12.1 0 -100 FY1998 FY2008 FY2009 10 (forecast)
Slide 11: Earnings Results
== ooftBank ee Earnings Results 1 1
Slide 12: Net Sales
Net Sales (bn JPY) 3,000 2,776.1 2,673.0 2,544.2 2,500 2,000 1,618.9 1,554.7 1,430.8 1,500 Mobile Communications 1,000 258.8 251.3 229.2 Broadband Infrastructure 332.1 324.7 320.3 Fixed-line Telecommunications 500 191.5 243.8 251.1 Internet Culture 256.9 255.6 247.3 e-Commerce 0 FY2006 FY2007 FY2008
Slide 13: Mobile Communications Segment Net Sales
Mobile Communications Segment Net Sales (bn JPY) 1,800 1,618.9 1,554.7 1,600 1,400 601.7 523.6 1,200 Handset sales, etc. 1,000 800 Telecom Service revenue, etc. +14.1 600 1,031.2 400 1,017.1 Telecom 200 service revenue 0 FY2007 FY2008 increased *The figures for each segment exclude the amounts of in
Slide 14: Increasing Trend in Telecom Service Revenue
Mobile Communications Segment Increasing Trend in Telecom Service Revenue (%) Telecom Service Revenue Growth 10 Telecom service revenue increase 5 also expected in FY2009 0 -5 -10 FY2006 FY2007 FY2008 14
Slide 15: Increasing Trend in Telecom Service Revenue vs Major Operators
Mobile Communications Segment Increasing Trend in Telecom Service Revenue 3 Major Mobile Operators (%) Movement of Telecom Service 10 Revenue Increasing trend for SOFTBANK 5 SOFTBANK 0 FY2008 movement SOFTBANK :1.4% KDDI NTT DOCOMO :(7.8%) KDDI :(1.8%) -5 NTT DOCOMO -10 FY2006 FY2007 FY2008 15
Slide 16: EBITDA
EBITDA (bn JPY) 750 626.6 678.6 Highest ever 650 8% increase 525.4 550 Achieved profit increase 403.8 450 385.4 in all segments 321.4 350 Mobile Communications 250 70.9 Broadband Infrastructure 70.3 55.6 64.3 Fixed-line Telecommunications 150 47.9 42.5 106.2 126.4 137.3 Internet Culture 50 e-Commerc
Slide 17: Operating Income
Operating Income (bn JPY) 450 420.0 400 350 324.2 359.1 Highest ever 300 271.0 11% increase 171.3 250 174.5 Mobile Communications 200 155.7 47.2 Broadband Infrastructure 150 39.7 18.9 Fixed line Telecommunications 26.8 3.3 100 125.0 Internet Culture 96.5 115.2 50 0 e-Commerce -50 FY2006 FY2007 FY200
Slide 18: Comparison of Operating Income
Mobile Communications Segment/SOFTBANK MOBILE Comparison of Operating Income (bn JPY) 200 174.5 Mobile Communications * 155.7 171.3 Segment 150 100 50 0 FY2006 FY2007 FY2008 *Operating results of Mobile Communications segment of FY2006 reflect 11 months results from May 2006 when the consolidation o
Slide 19: Comparison of Operating Income
Mobile Communications Segment/SOFTBANK MOBILE Comparison of Operating Income (bn JPY) 200 189.4 SOFTBANK MOBILE 174.5 Consolidated 155.7 * 171.3 Mobile Communications 150 162.4 segment 134.6 100 SOFTBANK MOBILE income increased 17% 50 0 FY2006 FY2007 FY2008 *Operating results of Mobile Communication
Slide 20: Details of Variance in Operating Income
Mobile Communications Segment/SOFTBANK MOBILE Details of Variance in Operating Income <bn JPY> FY2006 FY2007 FY2008 SOFTBANK MOBILE Consolidated operating 134.6 162.4 189.4 income (12 months) Consolidation adjustment Amortization of goodwill (47.1) (51.4) (51.4) Variance of depreciation* 77.3 55.2 2
Slide 21: Ordinary Income
Ordinary Income (bn JPY) One time gain due to 300 258.6 IPO of Alibaba.com Limited 250 225.6 57.2 200 FY2008 153.4 150 JPY 225.6bn 100 201.4 50 0 FY2006 FY2007 FY2008 *Operating results of SOFTBANK MOBILE Corp. were consolidated from May 2006 21
Slide 22: Net Income
Net Income (bn JPY) 150 One time gain due to IPO of Alibaba.com Limited 108.6 100 FY2008 57.2 JPY 43.1bn After an additional entrustment loss 50 43.1 related to in-substance redemption 28.8 before maturity (debt assumption) 51.4 0 FY2006 FY2007 FY2008 *Operating results of SOFTBANK MOBILE Corp. were
Slide 23: Net Income
Net Income FY2007 FY2008 Notes (bn JPY) Ordinary income 258.6 225.6 Additional entrustment loss related to debt 75.0 Special income/loss (32.7) assumption (118.3) (net) Impairment loss related 28.9 to Yahoo! BB hikari assets Income before income taxes and minority interests 225.8 107.3 Income tax: C
Slide 24: Interest-bearing Debt Status
Interest-bearing Debt Status 24
Slide 25: Interest-bearing Debt
Interest-bearing Debt (bn JPY) 3,000 2,532.9 2,500 219.0 2,400.3 221.9 Securitization of installment 2,000 receivables (SOFTBANK MOBILE) 1,276.4 1,184.8 SBM loan (WBS)* 1,500 1,000 84.5 84.5 Vodafone Subordinated loan 455.1 520.4 Loans from other financial institutions 500 497.7 388.5 Corporate bond
Slide 26: Net Interest-bearing Debt
Net Interest-bearing Debt (bn JPY) 2,500 2,158.1 2,036.8 1,939.5 Steady repayment 2,000 219.0 221.9 Securitization of installment receivables 1,500 2,158.1 1,000 1,817.8 1,717.5 Net interest-bearing debt (excluding securitization of installment 500 receivables) 0 Mar 2007 Mar 2008 Mar 2009 *Lease ob
Slide 27: Redemption Schedule of Corporate Bonds
Redemption Schedule of Corporate Bonds Abundant repayment resources available (bn JPY) Repayment Resources Bonds Redemption Schedule 600 Unused portion of credit line facility SOFTBANK straight bonds 500 Cash position 481.8 SOFTBANK TELECOM straight bonds 423.3 21.0 SOFTBANK convertible bonds 400 36
Slide 28: Outstanding Balance of SBM Loans
Outstanding Balance of SBM Loans (bn JPY) Repaying ahead of schedule 1,342.1 1,350 1,311.4 1,295.0 1,300 1,276.4 1,261.9 Cumulative repayment 1,250 1,239.2 1,207.7 JPY 211.8bn 1,200 1,184.8 (April 2009) 1,154.1 1,150 1,100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Apr *Balance of WBS loan borrowed by SBM 2009 FY200
Slide 29: Financial Indexes
== ooftBank Financial Indexes a 2 9
Slide 30: Improvement of Key Financial Indexes
Improvement of Key Financial Indexes Improvement FY2007 FY2008 rate EBITDA margin 22.6% 25.4% +12.4% (EBITDA/net sales) Equity ratio 8.4% 8.5% +1.3% (total shareholders’ equity/total assets) D/E ratio 6.6 times 6.4 times +2.8% (interest-bearing debt/total shareholders’ equity) Net D/E ratio 5.3 time
Slide 31: EBITDA Margin by Segment
EBITDA Margin by Segment (%) Broadband Infrastructure 30 Mobile Communications 25 SOFTBANK Consolidated 20 Fixed-line Telecommunications 15 0 10 FY2006 FY2007 FY2008 *EBITDA margin = EBITDA/net sales 31
Slide 32: Credit Rating
Credit Rating JCR (AA-) AA /AA3 A+/A WBS structured S&P (A) A/A finance rating (senior portion) A /A3 Moody’s (A3) BBB+/Baa1 JCR (BBB) BBB/Baa2 BBB /Baa3 SOFTBANK BB+/Ba1 Moody’s (Ba2) rating BB/Ba2 S&P (BB) BB /Ba3 B+/B1 Acquisition of JAPAN Acquisition of TELECOM CO., LTD. Vodafone K.K 2003 2004 2
Slide 33: Cash Flow
== ooftBank Cash Flow ———— 3 3
Slide 34: Free Cash Flow
Free Cash Flow (bn JPY) 300 250.0 200 181.5 FY2008 improved by 100 JPY 345.7bn 0 -100 -200 -164.2 FY2007 FY2008 FY2009 (forecast) 34
Slide 35: CAPEX (acquisition base)
CAPEX (acquisition base) (bn JPY) FY2008 plan 389.8 JPY 276.5bn* 400 293.7 (actual) 300 259.0 220.0 308.4 200 Mobile Communications 148.9 235.3 199.1 47.6 Broadband Infrastructure 100 82.6 22.1 Fixed-line Telecommunications 21.2 14.5 37.6 21.8 29.5 0 Others FY2005 FY2006 FY2007 FY2008 FY2009 (foreca
Slide 36: FY2009 Earnings Forecast
FY2009 Earnings Forecast Expect revenue and profit increase 36
Slide 37: FY2009 Earnings Forecast
FY2009 Earnings Forecast <bn JPY> FY2007 FY2008 FY2009 (actual) (actual) (forecast) Operating income 324.2 359.1 420.0 Free cash flow (164.2) 181.5 250.0 37
Slide 38: Operating Income Forecast
Operating Income Forecast (bn JPY) 500 420.0 400 359.1 300 Profit expected to 200 increase by 17% 100 0 FY2008 FY2009 (actual) (forecast) 38
Slide 39: Operating Income Top Ranking (Fiscal Year 2008)
Operating Income Top Ranking (Fiscal Year 2008) Rank Company Name Operating Income (bn JPY) 1 2 NTT NTT DOCOMO 1,109.7 830.9 Currently 3 4 INPEX Mitsubishi 663.2 588.8 ranked 12th 5 Nintendo 555.2 6 KDDI 443.2 7 East Japan Railway 432.5 8 JFE Steel 407.8 9 MITSUI & CO 394.6 10 Central Japan Railway
Slide 40: Operating Income Top Ranking (FY2009 Forecast)
Operating Income Top Ranking (Fiscal Year 2009 Forecast) Operating Improvement (bn JPY) Rank Company Name Income Rate (YoY) 1 NTT 1110.0 0.0% 2 NTT DOCOMO 830.0 -0.1% 3 Nintendo 490.0 -11.8% 4 KDDI 470.0 +6.0% SOFTBANK 5 SOFTBANK 420.0 +17.0% fiscal year 2009 (forecast) 6 395.0 +28.9% JPY 420.0bn Ta
Slide 41: Operating Income Variance
Operating Income Variance Operating Income Variance FY09 operating income 30% variance SOFTBANK :+17.0% NTT DOCOMO : (0.1%) 20% KDDI : +6.0% SOFTBANK 10% KDDI 0% NTT DOCOMO -10% FY08 FY09 (forecast) 41 Source: based on disclosed material by each company *FY2009 forecasts of each company
Slide 42: Operating Income Trend
Operating Income Trend (bn JPY) Operating Income 1,000 NTT DOCOMO 600 KDDI SOFTBANK 200 -200 FY03 FY04 FY05 FY06 FY07 FY08 FY 09 (fore cast) 42 Source: based on disclosed material by each company *FY2009 forecasts of each company
Slide 43: FY2009 Free Cash Flow Forecast
FY2009 Free Cash Flow Forecast (bn JPY) 300 250.0 200 181.5 FCF expected to increase by 38% 100 0 FY2008 FY2009 (actual) (forecast) 43
Slide 44: Free Cash Flow Top Ranking (FY2008 provisional)
Free Cash Flow Top Ranking (FY2008 provisional) Rank Company Name FCF (bn JPY) 1 Nissan 317.1 Currently 2 Mitsui & Co 291.7 3 Toyota 246.6 ranked 7th 4 NTT 244.4 (based on fiscal year 2008 ranking) 5 JT 210.2 6 East Japan Rail Way 187.5 7 SOFTBANK 181.5 SOFTBANK 8 Nippon Mining Holdings 181.2 fiscal
Slide 45: Free Cash Flow Top Ranking (FY2008 provisional)
Free Cash Flow Top Ranking (FY2008 provisional) Rank Company Name FCF (bn JPY) 1 Nissan 317.1 2 Mitsui & Co 291.7 SOFTBANK 3 Toyota 246.6 fiscal year 2009 (forecast) 4 NTT 244.4 5 JT 210.2 JPY 250.0bn 6 East Japan Rail Way 187.5 7 SOFTBANK 181.5 8 Nippon Mining Holdings 181.2 Expect to reach Top 3 9
Slide 46: Enhance Cash Flow Management
Enhance Cash Flow Management 46
Slide 47: Towards approx. JPY 1 trillion free cash flow
Enhance Cash Flow Management Towards approx. JPY 1 trillion free cash flow for next 3 Years (Cumulative total target for 3 years from FY2009 to FY2011) * Equivalent to JPY 1,000 free cash flow per share (cumulative for 3 years) 47
Slide 48: Targeted Reduction of Net Interest-bearing Debt
Targeted Reduction of Net Interest-bearing Debt after 2 fiscal years (FY2011) Reduce net interest-bearing debt* by half *Lease obligations are not included in the net interest-bearing debt 48
Slide 49: Targeted Reduction of Net Interest-bearing Debt: Project ZERO
Targeted Reduction of Net Interest-bearing Debt after 2 fiscal years (FY2011) Reduce net interest-bearing debt* by half after 5 fiscal years (FY2014) project ZERO net interest-bearing debt* *Lease obligations are not included in the net interest-bearing debt 49
Slide 50: Investment Policy
Investment Policy Pay down ‘net interest-bearing debt*’ to zero and No new major investments *Lease obligations are not included in the net interest-bearing debt 50
Slide 51: Enhance Cash Flow Management
Enhance Cash Flow Management bn 550 Towards 350 250.0 approx. JPY 1 181.5 150 trillion free cash flow cumulative -50 FY2007 FY2008 FY2009 (forecast) FY2010 FY2011 for next 3 years -164.2 -250 *Cumulative total target for 3 years from FY2009 to FY2011 *Free cash flow = cash flow from operating activi
Slide 52: Targeted Reduction of Net Interest-bearing Debt
Targeted Reduction of Net Interest-bearing Debt Net Interest-bearing Debt (bn JPY) 2,000 1.9t Reduce net interest- 1,000 Halve bearing debt* to zero Zero 0 FY08 FY11 FY14 *Lease obligations are not included in the net interest-bearing debt 52 -1,000
Slide 53: Dividend Policy
== ooftBank Dividend Policy SS 5 3
Slide 54: Plan for Significant Dividend Increase Beginning FY2009
Plan for Significant Dividend Increase Beginning FY2009 Direction shift of dividend policy (JPY) Dividend per Share 14 12 Free cash flow remains 10 in the black 8 6 5.0 (planned) Double to JPY 5.0 (planned) 4 2.5 2 2.5 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 54
Slide 55: By FY2011
By FY2011 Goal to halve net interest-bearing debt* (JPY) Dividend per Share 14 Halve net interest-bearing 12 debt* (target) 10 8 Planning further 6 5.0 (planned)) dividend increases 4 2.5 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 *Lease obligations are not included in the net interest-be
Slide 56: By FY2014
By FY2014 Net interest-bearing debt* free + further dividend increases (JPY) Dividend per Share 14 12 Net interest-bearing 10 debt*free (target) 8 6 5.0 (planned)) 4 2.5 2 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 *Lease obligations are not included in the net interest-bearing debt 56
Slide 57: Cash Flow Management
—~= SoftBank SoftBank Cash Flow Management o/
Slide 58: Mobile Communications
—~= SoftBank Mobile Communications 58
Slide 59: Cash Flow Management (Mobile Communications)
Cash Flow Management (Mobile Communications) 1. Expand Display prevented due to protection of rights. customer base 2. Improve data ARPU 3. Manage efficiently 59
Slide 60: 1. Expand Customer Base
Cash Flow Management (Mobile Communications) 1. Expand Display prevented due to protection of rights. customer base 2. Improve data ARPU 3. Manage efficiently 60
Slide 61: 1. Expand Customer Base
1. Expand Customer Base (%) 3 Major Mobile Operators No. 1 net adds for 2 Net Adds Share 60 consecutive years 50 SOFTBANK 40 NTT DOCOMO 30 FY2008 Net Adds Share 20 SOFTBANK KDDI 10 54.4%* NTT DOCOMO 0 KDDI FY2005 FY2006 FY2007 FY2008 Source: calculated by SOFTBANK based on Telecommunications Carrier
Slide 62: 1. Expand Customer Base: Subscriber Growth
1. Expand Customer Base 3 Major Mobile Operators Subscriber Growth FY2008 14% SOFTBANK 12% 11.0% double-digit 10% growth 8% 6% 4% Display prevented 2.3% due to protection of rights. 1.7% 2% 0% KDDI NTT DOCOMO SOFTBANK Source: Created by the Company based on Telecommunications Carriers Association da
Slide 63: No.1 TV CM Evaluation in All Segment (FY2008)
No.1 TV CM Evaluation in All Segment (FY2008) Male Female 1st / Elementary among 9,472 Elementary 1st / among 9,472 Teens 1st / among 9,472 High school 1st / among 9,472 20’s 1st / among 9,472 Office/college 1st / among 9,472 30’s 1st / among 9,472 Working ladies 1st /among 9,472 40’s 1st / among 9,
Slide 64: No.1 in 13 of 15 Categories (FY2008)
TV CM Preference <Evaluation of SoftBank brand > No.1 in 13 of 15 Categories (FY2008) Attractive product Cutting-edge Cute No.1 No.1 No.1 Humorous Healing Story No.1 No.1 No.1 Performer / character Reputation Dull but lovable No.1 No.1 No.1 Advertisement message Image Music/sound No.1 No.1 No.2 Corp
Slide 65: 2. Improve Data ARPU
Cash Flow Management (Mobile Communications ) 1. Expand of customer base 2. Improve data ARPU 3. Manage efficiently 65
Slide 66: 2. Improve Data ARPU
2. Improve Data ARPU (%) Data ARPU Increase (YoY) SOFTBANK 20 No.1 increase rate SOFTBANK 15 10 NTT DOCOMO 5 KDDI 0 FY2006 FY2007 FY2008 Source: Created by the Company based on the disclosed materials of each company 66
Slide 67: Total Monthly Payment Per User (average)
Total Monthly Payment Per User (average) (JPY) Impact from access charge 5,780 5,910 5,780 5,620 5,690 5,750 5,760 5,790 5,850 5,990 6,040 5,760 6,000 HS installment payment 210 20 200 200 220 480 730 190 1,000 1,230 1,400 1,540 1,680 1,640 5,000 210 210 Expect to 230 250 270 280 bottom out & 270 4,
Slide 68: Data Service for More People
Data Service for More People TM Display prevented due to protection of rights. App Store (iPhone 3G) 68
Slide 69: Data Service for More People
Data Service for More People TM Display prevented due to protection of rights. App Store (iPhone 3G) Display prevented MOBILE WIDGET due to protection of rights. Content Value Package S-1 BATTLE 69
Slide 70: Unlimited Packet Discount
Unlimited Packet Discount 2 (tentative name) Offer new Unlimited Packet Discount (Differences with Unlimited Packet Discount) 1. Minimum fixed monthly charge down to JPY 490/month from JPY 1,029 2. Similar to NTT DOCOMO’s new service, the send & receive SMS and mail charges between SOFTBANK subscrib
Slide 71: S-1 BATTLE
Mobile Internet Content S-1 BATTLE Display prevented due to protection of rights. Watch stand-up comedy easily through mobile and submit vote for preference 71
Slide 72: Mobile Internet Content
Mobile Internet Content Ask Dr. Katei no Igaku, Lite Content Value Package Nashimoto-Geino!-Ura-Channel Itsudemo Game Center The Kensho Koujien Ekitan Japan Transit Basic Monthly Deco Deco Mail LIVE YOSHIMOTO Charge: JPY 315 honmono no shinri test GOLFDIGEST MOBILE Asahi Nikkan Sports WEATHERNEWS La
Slide 73: Past Paid Mobile Content
Past Paid Mobile Content Itudemo Game Center ster Regi Register Asahi Nikkan Sports Register WEATHERNEWS Register LIVE YOSHIMOTO Register Ekitan Japan Transit Must register for each individually 73
Slide 74: New Paid Mobile Content
New Paid Mobile Content Itudemo Game Center Asahi Nikkan Sports WEATHERNEWS LIVE YOSHIMOTO Ekitan Japan Transit Itudemo Game Center Asahi Nikkan Sports Register WEATHERNEWS LIVE YOSHIMOTO Ekitan Japan Transit Easy-to-use Web Site 74
Slide 75: Hot Widget (1)
Hot Widget (1) Yahoo! Weather Widget Just one click to check Display prevented due to protection of rights. weekly weather forecast 75
Slide 76: Hot Widget (2)
Hot Widget (2) Yahoo! Maps Widget Direct access from stand-by screen Display prevented due to protection of rights. Easy access to restaurants, shopping, sports information 76
Slide 77: 3. Manage Efficiently
Cash Flow Management (Mobile Communications) 1. Expansion of customer base 2. Improve data ARPU 3. Manage efficiently 77
Slide 78: 3. Manage Efficiently: Short-term Churn
3. Manage Efficiently (k) Short-term Churn 120 100 80 Considerable 60 decline in short- 40 term churn 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2007 FY2008 78
Slide 79: 3. Manage Efficiently: Allowance for Doubtful Accounts
3. Manage Efficiently Allowance for Doubtful Accounts of Installment Receivables/Loss (on P/L) (bn JPY) 35 30.6 30 Significant drop 25 in doubtful 20 16.0 accounts 15 10.3 expense 10 5 0 FY2006 FY2007 FY2008 79
Slide 80: 3. Manage Efficiently: Churn Rate
3. Manage Efficiently Churn Rate 1.6 1.4 Churn rate greatly improved 1.2 1.0 FY2008 churn rate 0.8 1.00% 0.6 FY2006 FY2007 FY2008 * Churn rate = amount of churns during the year/(subscribers at beginning of year + subscribers at end 80 of year)/2 /(number of months within scope) X100
Slide 81: 3. Manage Efficiently: Network Satisfaction
3. Manage Efficiently (point) Network Satisfaction Improvement Rate* 130 128 120 Improvement in satisfaction level 110 and CAPEX 100 100 efficiency 90 80 Dec 2006 Feb 2009 * Rate of increase when network satisfaction of Dec 2006 is considered to be 100 81 *Source: research done by SOTBANK MOBILE (sc
Slide 82: Cost Reduction (inventory relevant improvement)
Cost Reduction (inventory relevant improvement ) (bn JPY) Inventory 160 (B/S amounts) Significant reduction in inventory Inventory Annual 140 Handset Sales (16%) (bn) (mil HS) 120 NTT DOCOMO 123.2 20.13 100 Compared to SBM 2.4 times +25% 80 KDDI 77.3 10.81 60 Compared to SBM 1.3 times 40 SOFTBANK 32
Slide 83: Broadband Infrastructure & Fixed-line Telecommunications
Broadband Infrastructure & Fixed-line Telecommunications 83
Slide 84: Operating Income is Consistently in the Black
Fixed-Telecommunications and Broadband Infrastructure Operating Income is Consistently in the Black (bn JPY) Operating Income/Loss by 200 Segment 150 100 50 Broadband infrastructure Fixed-line Telecommunications 0 -50 -100 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 84
Slide 85: Fixed-line Business Operating Income is Consistently in the Black
Fixed-line Business Operating Income is Consistently in the Black (bn JPY) Operating Income/Loss of 200 Major Fixed-line Telecom Companies 150 100 SOFTBANK (fixed-line business)* 50 0 -50 *Fixed-line business = Fixed-line Telecommunications -100 segment + Broadband Infrastructure segment FY 03 FY 04
Slide 86: No.1 Operating Income Among Major Fixed-line Telecom Companies
No. 1 Operating Income Among Major Fixed-line Telecom Companies (bn JPY) Operating Income of Major 200 Fixed-line Telecom Companies 150 100 SOFTBANK (fixed-line business) 50 NTT East and West 0 -50 KDDI (fixed-line segment) -100 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 86 Source: disclosed income stateme
Slide 87: Internet in China
—= softBank a Internet in China ——— Sa 87
Slide 88: The Internet Focus is Shifting to Asia
The Internet Focus is Shifting to Asia (2015) World Internet Population and approx. 2.6bn people Comparison by Region (1998) Approx. 0.19bn people Others Asia Asia Others 19% 50% U.S U.S 50% 12% Source: Euromonitor (as of June 19, 2008) 88
Slide 89: Towards Asia No.1 Internet Company
Towards Asia No.1 Internet Company (i) One of the largest No. 1 online B2B player in (vii) China C2C & Online No.1 Search No. 1 consumer e-Commerce (ii) Settlement in U.S. share in U.S. player in China eBay No. 1 online payment service PayPal Google provider in China One of the largest SNS in China
Slide 90: Taobao No.1 Online Shopping Player in China
Taobao No.1 Online Shopping Player in China Online Shopping Market Share by Gross Merchandise Volume in 2008 Other Eachnet 6% 7% Overwhelmingly No.1 online shopping Paipai 9% Display prevented due to protection of rights. Taobao 78% Source : iResearch China Online Shopping research report (2008-2009
Slide 91: Online Shopping in China Market Forecast
Online Shopping in China Market Forecast (t JPY) 14 Online Shopping Market in China Rapid 12 11.5 growth 10 8.4 8 5.6 6 4 3.5 1.8 Taobao 2 0.8 Others 0 2007 2008 2009 2010 2011 2012 China online shopping market (forecast) Calendar year Actual Forecast Source: iResearch "China Online Shopping Researc
Slide 92: Expect revenue and profit growth in FY2009
Enhance CF Management Expect revenue and profit growth in FY2009 92
Slide 93: Towards approx. JPY 1 trillion Free Cash Flow
Enhance of Cash Flow Management Towards approx. JPY 1 trillion Free Cash Flow For 3 Years (Cumulative total target for 3 years from FY2009 to FY2011) * Equivalent to JPY 1,000 free cash flow per share (cumulative for 3 years) 93
Slide 94: Targeted Reduction of Net Interest-bearing Debt
Targeted Reduction of Net Interest-bearing Debt after 2 fiscal years (FY2011) Reduce net interest-bearing debt* by half after 5 fiscal years (FY2014) project ZERO net interest-bearing debt* *Lease obligations are not included in the net interest-bearing debt 94
Slide 95: Cash Flow Management
—~= SoftBank SoftBank Cash Flow Management 95
Slide 96: Maximize Enterprise Value
Maximize Enterprise Value 96
Slide 97: Lifestyle Company in the 21st Century
Lifestyle Company in the 21st Century Broadband available to all living people everywhere 97
Slide 98: SOFTBANK's Fundamental Management Policy
SOFTBANK’s Fundamental Management Policy Endeavoring to benefit society and the economy and maximize enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution 98
Slide 99: Trademark and copyright notices
* The names of other companies, other logos, product names, service names, brands, etc., mentioned in this material are registered trademarks or trademarks of SOFTBANK CORP. or the applicable companies. * Unauthorized copying of this material and use of the information or the data in this material i
Slide 100: FY2008/Q4 Appendix to the Earnings Results
FY2008/Q4 Appendix to the Earnings Results (Amounts less than one billion yen are omitted. / Net Sales to external customers ） Business segment unit FY2006 FY2007 FY2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net sales bn JPY 231.5 350.3 426.6 422.2 389.0 419.8 403.1 406.8 370.6 399.4 374.6 409.9 Opera