SoftBank Group Corp. · TSE:9984
SoftBank — FY2020 Earnings Presentation
35 slides from SoftBank's earnings presentation, May 14, 2021
Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2021
Ver.1.1 Earnings Results for the Fiscal Year Ended March 31, 2021 Investor Briefing May 14, 2021 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 and abbreviations
Exchange rates used for translation FY2019 FY2020 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 110.00 107.70 108.98 109.22 107.74 105.88 104.45 106.24 1 CNY 16.13 15.37 15.46 15.56 15.16 15.27 15.71 16.31 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 108.83 110.71 1 CNY 1
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results (JPY bn) FY19 FY20 Change YoY Net sales 5,238.9 5,628.2 389.3 7.4% Income before 50.0 5,670.5 5,620.5 - income tax Net income (attributable to owners of -961.6 4,988.0 5,949.6 - the parent) (Reference) Gain on investments -1,410.2 7,529.0 8,939.2 - Investment Business of Holding
Slide 6: Change in Reportable Segments
Change in Reportable Segments • In Q1, “Investment Business of Holding Companies” was newly established. Segment income was revised to “income before income tax.” • In Q2, “Brightstar segment” was removed. “SoftBank Vision Fund and Other SBIA-Managed Funds” was renamed to “SVF1 and Other SBIA-Manage
Slide 7: Investment Business of Holding Companies Segment
Investment Business of Holding Companies Segment • Main businesses: Investment activities by SBG and its subsidiaries • Core companies: SBG, SBGC, SBGJ, and SB Northstar SBG By contract, two-thirds of gain/loss is attributable to SBG and the remaining one-third to non-controlling interests (Masayosh
Slide 8: Segment Income - Investment Business of Holding Companies
Segment Income - Investment Business of Holding Companies (JPY bn) P/L FY19 FY20 Items Gain on investments 484.3 946.1 (1) Gain of 280.3 bn on sales of T-Mobile shares Gain relating to sales of T-Mobile shares (2) Gain of 296.0 bn on the revaluation of T-Mobile shares continued to be held by the Com
Slide 9: Partial Sale of T-Mobile Shares and Evaluation at FY20-end
Partial Sale of T-Mobile Shares and Evaluation at FY20-end The Company sold (1) and (2) below in FY20Q1 and received JPY 1,830.4 bn. With additional sales of (3) and (4) in Q2, the Company received JPY 2,099.7 bn in aggregate for FY20Q1-Q2. P/L (FY20) (JPY bn) Evaluation at FY20-end Gain relating to
Slide 10: Investment in Listed Stocks and Other Instruments
Investment in Listed Stocks and Other Instruments • In order to diversify assets and manage surplus funds, investments were initially made directly by SBG and later by asset management subsidiary SB Northstar from Q2. • SB Northstar is engaged in acquiring and selling listed stocks and other instrum
Slide 11: Investment in Listed Stocks: Main Impact on B/S and P/L
Investment in Listed Stocks and Other Instruments: Main Impact on B/S and P/L (Gain (Loss) on Investments) (JPY bn) Consolidated B/S Consolidated P/L Investor Investment type FY20-end Gain (loss) Account balance Account (minuses indicate liabilities) Q1 Q2 Q3 Q4 FY20 Realized gain on sales of invest
Slide 12: Price Sensitivity of Derivatives at SB Northstar (FY20-end)
Price Sensitivity of Derivatives at SB Northstar (FY20-end) The below table shows the impact on income before income tax of changes in the market prices of the underlying assets from March 31, 2021 of options, total return swap contracts, and forward contracts related to listed stocks at SB Northsta
Slide 13: Details and Progress of the Agreement between the Company and WeWork
Details and Progress of the Agreement between the Company and WeWork in Oct 2019 and in FY20 Reduction of exercise price • The Company paid full amount of USD 1.5 bn in Oct 2019. Existing from USD110.00/share to • USD 200 mn was converted into preferred stock in Nov 2019, while the remaining USD 1.3
Slide 14: Investments and Debt Financing to WeWork - Equity
Investments and Debt Financing to WeWork from the WeWork Investment Subsidiary-1 Equity (USD mn) Consolidated Statement of Financial Position Consolidated Statement of Income Cumulative Gain (loss) Type Cumulative Carrying amount investment amount gain (loss) Account (Minuses show liabilities) Accou
Slide 15: Investments and Debt Financing to WeWork - Debt
Investments and Debt Financing to WeWork from the WeWork Investment Subsidiary-2 Debt (USD mn) Consolidated Statement of Financial Position Consolidated Statement of Income Cumulative Cumulative Type debt financing Carrying amount Gain (loss) gain (loss) Account (Minuses show liabilities) Account am
Slide 16: Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts
Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts (Impact on P/L) Amendment (JPY bn) of contracts FY20 cumulative Alibaba share price Income before -504.0 income tax (-$4.7 bn) Net income -732.9 Signing (JPY bn) (-$6.8 bn) Derivative gain 280.9 184.4 ($2.7 bn) ($1.7 bn) -18.5 Derivative lo
Slide 17: Structure After Business Integration of Z Holdings and LINE
Structure After Business Integration of Z Holdings Corporation and LINE Corporation Consolidated 40.9%*1 50% 50% Consolidated*2 JV Non-listed company 65.3% Listed company 100% 100% * The structure presented is simplified for illustrative purposes. *1 Holding ratio as of March 31, 2021 *2 SBKK holds
Slide 18: Business Integration of Z Holdings Corporation and LINE Corporation
Business Integration of Z Holdings Corporation and LINE Corporation Identifiable intangible assets: JPY 407.0 bn in total Goodwill: JPY 617.1 bn * The above amounts are fair values based on the best estimate currently available; therefore may change in a year from the acquisition date when additiona
Slide 19: Entry into Agreement for Sale of All Shares in Arm - Overview
Entry into Agreement for Sale of All Shares in Arm – Overview • In Sep 2020, the Company agreed to sell all of Arm shares to NVIDIA. • As the Company expects to hold approx. 6.7- 8.1% of NVIDIA shares, further upside can be enjoyed as the largest shareholder when the share price goes higher. (USD bn
Slide 20: Entry into Agreement for Sale of All Shares in Arm - Accounting
Entry into Agreement for Sale of All Shares in Arm – Accounting • Arm will continue to be classified under continuing FY20 FY21 FY22 operations (until the closing of the transaction is deemed Sep 13 (execution of Purchase Agreement) Approx.18 months Closing highly probable, such as after obtaining r
Slide 21: SPACs Controlled by SBG's Subsidiaries
SPACs Controlled by SBG’s Subsidiaries A Special Purpose Acquisition Company (“SPAC”) is an investment vehicle formed for the purpose of effecting business combination with an existing operating company. • A subsidiary of SBG, as a sponsor, establishes a SPAC with a small amount of capital. The SPAC
Slide 22: SPACs Controlled by SBG's Subsidiaries
SPACs Controlled by SBG’s Subsidiaries Nine SPACs controlled by SBG’s subsidiaries raised USD 3,304 mn in total through IPO in FY20 SBIA: USD 1,154 mn Investment fund business in Latin America: USD 230 mn Fortress: USD 1,920 mn (of which USD 345 mn from one entity that completed De-SPAC) Impact of e
Slide 23: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (JPY bn) P/L item FY19 FY20 Change Continuing operations Gain on investments at Investment Business of Holding Companies: +945.9 bn (see pages 5 and 8 for details) Net sales 5,238.9 5,628.2 +389.3 • Gain relating to sales of T-Mobile shares: 421.8 bn Gross profit • U
Slide 24: Tax Rate Analysis
Tax Rate Analysis FY20 Tax rate analysis Amount Rate (%) (JPY bn) Net income before income tax 5,670.5 Effective statutory tax rate 31.5% 1,783.9 （Main factors of tax rate analysis） (1) Permanent difference (mainly tax rate differences) -22.0% -1,247.9 (2) Anti-tax heaven taxation in Japan 6.9% 392.
Slide 25: Consolidated B/S Summary (IFRSs) - Non-current assets
Consolidated B/S Summary (IFRSs) - 1 (JPY bn) As of As of 1 B/S item Main items Change Current assets related to investments from SB Northstar Mar 2020 Mar 2021 A: The fair value of listed stocks 15,636.9 10,820.2 -4,816.7 B: Securities pledged as collateral C: Fair value of long call option of list
Slide 26: Consolidated B/S Summary (IFRSs) - Non-current liabilities
Consolidated B/S Summary (IFRSs) - 2 (JPY bn) B/S As of As of Main items Change item Mar 2020 Mar 2021 14,191.1 1 12,891.0 -1,300.1 1 Interest-bearing debt 3,845.2 2 7,735.2 +3,890.0 Interest-bearing debt (current) of SB Northstar • Short-term borrowings to be used in transactions for listed stocks:
Slide 27: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2020 Mar 2021 • Changes in interests in subsidiaries resulting from the partial sale of SBKK shares: +932.4 bn 7,372.9 11,955.6 +4,582.7 • Changes in interests due to a decrease in the equity stake in the new company
Slide 28: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (JPY bn) C/F item FY19 FY20 Change Primary details for FY20Q1-Q3 C/F from operating activities: decreased 602.5 bn yoy (Major reasons for decrease) Subtotal of cash flows from operating • Decrease of Income taxes paid by 613.4 bn yoy 1,119.2 C/F from activities • Dec
Slide 29: Segment Income - SVF1 and Other SBIA-Managed Funds
Segment Income - SVF1 and Other SBIA-Managed Funds (JPY bn) P/L FY19 FY20 Items Gain on investments at SVF1, SVF2, and others -1,844.9 6,357.5 SVF1 Realized gain on sales of investments 58.3 419.6 Sale of a portion of shares in five portfolio companies and all shares in eight portfolio companies (in
Slide 30: Appendix
Appendix
Slide 31: Changes in Presentation of P/L
Changes in Presentation of P/L In FY20Q1, “Gain (loss) on investments” is newly P/L after the revision of the presentation presented Operating income is no longer used Net sales Gross profit • The importance of investment activities has increased in the consolidated results, following the comple
Slide 32: Investment in Listed Stocks by SB Northstar: Gain/Loss on Investments Transferred from SBG
Investment in Listed Stocks by SB Northstar: Gain/Loss on Investments Transferred from SBG in P/L In case that SB Northstar continues Fair value held to hold listed shares after the shares at SB Northstar are transferred from SBG Transfer value P/L accounts to SB Northstar Valuation gain at SB North
Slide 33: Impact of the Asset Management Subsidiaries on SBG Consolidated B/S
Impact of the Asset Management Subsidiaries on SBG Consolidated B/S*1 (JPY bn) March 31, March 31, 2021 2021 Cash and cash equivalents 221.3 Interest-bearing debt 1,866.5 Investments from asset management subsidiaries 755.3 Derivative financial liabilities in asset management subsidiaries 14.7 Secur
Slide 34: 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 2020 Mar 2021 Amortization exchange Others rate 3,998.2 4,684.4 Arm 2,554.1 2,632.7 - +78.6 - Includes ISG businesses Goodwill SBKK 907.5 907.5 - - - *1 ZOZO 212.9 212.9 - - - LINE - 617.
Slide 35: Accounting Treatment for Partial Sale of SBKK Shares and After-tax Cash Proceeds
Accounting Treatment for Partial Sale of SBKK Shares and After-tax Cash Proceeds • In May and Sep 2020, SBG sold a total of 1.27 bn shares of SBKK held through SBGJ (SoftBank Group Japan Corp.) and received a total of JPY 1.5 tn. May: 240 mn shares (shareholding ratio: 5.0%) sold for JPY 310.2 bn