Softbank Group Corp. · TSE:9984
Softbank — Q1 FY2017 Earnings Presentation
82 slides from Softbank's earnings presentation, Aug 8, 2017
Slide 1: Earnings Results for the Three-month Period Ended June 30, 2017
Earnings Results for the Three-month Period Ended June 30, 2017 Investor Briefing August 8, 2017 SoftBank Group Corp.
Slide 2: Disclaimer
Disclaimer This material was prepared based on information available and views held at the time it was made. Statements in this material that are not historical facts, including, without limitation, plans, forecasts and strategies are “forward-looking statements”. Forward-looking statements are by t
Slide 3: Accounting
Accounting 3
Slide 4: Segments and Core Companies
Segments and Core Companies <FY16> <FY17> Reportable Reportable Core companies Core companies segments segments Domestic SoftBank Domestic SoftBank Telecommunications Wireless City Planning Telecommunications Wireless City Planning Sprint Sprint Sprint Sprint Yahoo Japan Yahoo Japan Yahoo Japan ASKU
Slide 5: Consolidated P/L (including SVF segment)
Consolidated P/L (including SVF segment) In FY17Q1: P/L -No investments were made by SVF. -Changes in fair value of the shares that Net sales had been agreed to be transferred Cost of sales Gross profit to SVF from the Company have been Selling, general and administrative expenses recognized as valu
Slide 6: Consolidated P/L Summary (IFRSs) - 1
Consolidated P/L Summary (IFRSs) - 1 <JPY bn> FY16 FY17 P/L item Change Main breakdown Q1 Q1 Continuing operations Decrease in net sales (for customers) of Domestic Telecommunications segment. -7.6 Decrease in telecom service revenue and product and other sales. Increase in net sales (for customers)
Slide 7: Consolidated P/L Summary (IFRSs) - 2
Consolidated P/L Summary (IFRSs) - 2 <JPY bn> FY16 FY17 P/L item Change Main breakdown Q1 Q1 Continuing operations Net sales 2,126.5 2,186.1 +59.6 Operating income 319.2 374.0 +54.8 (excluding SVF) Operating income - 105.2 +105.2 from SVF Operating income 319.2 479.3 +160.1 -8.8 SBG: Increase in int
Slide 8: Structure of SoftBank Vision Fund
Structure of SoftBank Vision Fund (conceptual image) All entities which comprise SoftBank Group Corp. SoftBank Vison Fund are in the scope of consolidation of SBG. Wholly-owned Wholly-owned subsidiary subsidiary Investment advice Advisory GP (General Partner) Intercompany transactions such as manage
Slide 9: SoftBank Vision Fund Accounting Treatment (1)
SoftBank Vision Fund Accounting Treatment (1) Treatment of portfolio company investments in SBG consolidation Fund (stand-alone): SBG consolidation: SoftBank Group Corp. SoftBank Group Corp. (Not considered as an investing company under IFRSs) (Not considered as an investing company under IFRSs) Sof
Slide 10: SoftBank Vision Fund Accounting Treatment (2)
SoftBank Vision Fund Accounting Treatment (2) Treatment of third-party interests Third-party interests Fund life is finite recorded as “liabilities” 10
Slide 11: Consolidated B/S (including SVF segment)
Consolidated B/S (including SVF segment) B/S Assets Liabilities and Equity Current assets Current liabilities Cash and cash equivalents Interest-bearing debt Trade and other receivables Trade and other payables etc. Other financial assets etc. Non-current liabilities Non-current assets Interest-bear
Slide 12: Consolidated B/S Summary - Non-current assets
Consolidated B/S Summary (IFRSs) - 1 <JPY bn> B/S As of As of Main items Mar 2017 Jun 2017 Change Main breakdown item 5,724.0 4,767.1 -956.9 Current assets Payments for acquisition of investments (-912.7). Cash and cash 2,183.1 1,288.0 -895.1 Mainly due to payments for investments with the plan of t
Slide 13: Breakdown of Goodwill
Consolidated B/S Summary (IFRSs) - 2 - Breakdown of Goodwill <JPY bn> B/S As of As of Change item Main items Mar 2017 Jun 2017 Changes in Outline Others exchange rate 4,175.5 4,278.7 +108.9 -5.7 Decrease in “others” related to adjustment of Arm 2,687.9 2,793.0 +109.4 -4.3 the provisional amount of P
Slide 14: Breakdown of Intangible Assets
Consolidated B/S Summary (IFRSs) - 3 - Breakdown of Intangible Assets <JPY bn> B/S As of As of Change Main items Outline item Mar 2017 Jun 2017 Amortization Changes in Other exchange rate FCC licenses 4,100.7 4,148.5 - -6.8 +54.6 (non-amortized) Increase in “others” mainly related to FCC licenses ac
Slide 15: Consolidated B/S Summary - Non-current liabilities
Consolidated B/S Summary (IFRSs) - 4 <JPY bn> B/S As of As of item Main items Mar 2017 Jun 2017 Change Main breakdown 5,226.9 5,538.5 +311.6 Short-term borrowings 667.7 831.6 +163.9 SBG 505.8 701.6 +195.8 Increase due to drawing down of credit line facility. Current portion of long-term borrowings 1
Slide 16: Consolidated B/S Summary - Equity
Consolidated B/S Summary (IFRSs) - 5 <JPY bn> B/S As of As of item Items Mar 2017 Jun 2017 Change Main breakdown 4,469.7 4,654.7 +185.0 Common stock 238.8 238.8 - Capital surplus 245.7 247.5 +1.8 Increase due to net income attributable to owners of the Equity parent (+5.5). Retained earnings 2,958.4
Slide 17: Consolidated C/F (including SVF segment)
Consolidated C/F (including SVF segment) C/F Cash flows from operating activities Payments for investments executed Net income Depreciation and amortization by the Company during the first Gain on investments at SVF quarter that had been agreed to be Change in third-party interests in SVF etc. trans
Slide 18: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) <JPY bn> C/F item FY17Q1 Main breakdown 30.5 Net income 372.0 Depreciation and amortization -106.9 Gain on investments at SVF 120.9 Finance cost 257.1 Derivative (gain) loss Cash flows from 43.6 Change in third-party interests in SVF 196.0 operating activities -18.2
Slide 19: Impact of Sprint – U.S. GAAP > IFRSs Adjustment (1)
Impact of Sprint – U.S. GAAP > IFRSs Adjustment (1) <Adjustment to P/L items> (April 1, 2017 – June 30, 2017) <USD mil> Difference of recognition and measurement IFRSs U.S. Re-classifi- Network ARO Depreciation Sprint GAAP cation (1) Securitization SoftBank Group restructuring discount cost (4) on i
Slide 20: Impact of Sprint – U.S. GAAP > IFRSs Adjustment (2)
Impact of Sprint – U.S. GAAP > IFRSs Adjustment (2) <Adjustment to B/S items> (as of June 30, 2017) <USD mil> Re- Difference of recognition and measurement Adjust- IFRSs U.S. classifi- ment on Sprint GAAP Impaired Network ARO Liability to goodwill SoftBank Group cation assets restructuring discount
Slide 21: Income on Equity Method Investments Related to Alibaba
Income on Equity Method Investments Related to Alibaba Alibaba SoftBank Group U.S. GAAP IFRSs (CNY mil) (JPY bn) (*1) Income on equity Reconciliation Income on equity Net income Net income Ownership method Exchange rate method investments to IFRSs investments FY16Q1 5,365 1,434 6,799 Approx. 33% 2,2
Slide 22: Sale of a Portion of Alibaba Shares and Variable Prepaid Forward Contract
Sale of a Portion of Alibaba Shares and Variable Prepaid Forward Contract <Consolidated> SoftBank Group Corp. SoftBank Group International Payment of proceeds West Raptor Holdings, LLC APAC (Singapore) Transfer of Alibaba USD 5.4bn for advance shares 3.4% of Alibaba shares received for the sale of p
Slide 23: Variable Prepaid Forward Contract for Alibaba Shares
Variable Prepaid Forward Contract for Alibaba Shares At signing of contract 3 Years total At settlement (3 years later) （initial recognition） Amortized (1) Interest paid cost USD 0.3bn Derivative assets (2) Derivative loss USD 0.9bn USD 0.9bn (3) Gain on Financial Financial sale liabilities relating
Slide 24: Derivative Gain and Loss Relating to Variable Prepaid Forward Contract
Derivative Gain and Loss Relating to Variable Prepaid Forward Contract for Alibaba shares At signing Derivative gain and loss over 3 years of contract until June 2019 Cumulative Expected gain FY16 FY16 FY16 FY16 FY17 derivative gain and Derivative gain on sale in June 1, 2016 Q1 Q2 Q3 Q4 Q1 loss by
Slide 25: Collar Transaction Embedded in Variable Prepaid Forward Contract
Collar Transaction Embedded in Variable Prepaid Forward Contract Trust (=investors) (Number of shares) are subject to the downside when the Number of shares to be delivered after share price falls 3 years will vary within USD 6.6bn equivalent range At signing of contract 86mil shares A Cap and Floor
Slide 26: Gain or Loss at Measurement of Fair Value of Investments
Gain or Loss at Measurement of Fair Value of Investments by SBG and SBGC (other than subsidiaries or equity method) (1) Financial assets at FVTPL (Fair Value Through Profit or Loss) Financial assets are measured at fair value at the end of each quarter, with changes to be recognized as net income or
Slide 27: (Reference) PPA Relating to Arm Acquisition
(Reference) PPA Relating to Arm Acquisition After PPA Completion Goodwill JPY 2.65t (GBP 19.2bn) Technology JPY 542.9bn Amortization period 8-20 years (GBP 3.9bn) Yearly amortization Amortization period Customer relationships JPY 148.6bn (GBP 1.1bn) 13 years amount Amortization period Trademarks JPY
Slide 28: SoftBank
SoftBank
Slide 29: Finance
Finance 29
Slide 30: Main Financing Activities
Main Financing Activities Category Event Amount Timing Total capital committed by general partners and limited * First major closing of SoftBank Vision Fund (SVF) partners: over USD 93.0 bn (including capital committed by the Company: USD 28 bn)* May 2017 Investees that had been agreed to be transfe
Slide 31: Adjusted EBITDA and Adjusted EBITDA Margin (1)
Adjusted EBITDA and Adjusted EBITDA Margin (1) Significant improvement in Sprint contributes to consolidated EBITDA growth. Adjusted EBITDA Adjusted EBITDA Margin <JPY bn> Domestic Telecommunicatioins Domestic Telecommunications Yahoo japan Sprint Distribution Yahoo Japan Arm Distribution Sprint Arm
Slide 32: Adjusted EBITDA and Adjusted EBITDA Margin (2)
Adjusted EBITDA and Adjusted EBITDA Margin (2) Domestic Telecommunications segment sustains high margin. Adjusted EBITDA Adjusted EBITDA Margin (Domestic Telecommunications) <JPY bn> SoftBank 351.3 46% (Domestic 329.5 44% Telecommu- NTT DOCOMO 37% nications) 36% KDDI 37% 35% 32% 32% SoftBank Group (
Slide 33: Interest-bearing Debt
Interest-bearing Debt No material change since the acquisition of Arm. Breakdown of Sprint’s interest-bearing debt <JPY bn> Change from FY16-end (details) 14,142.9 14,183.3 Borrowings 1,393.8 <JPY bn> 14,175.8 13,660.1 Bonds 2,978.0 - 189.3 (early redemption) Other 33.0 11,723.5 4,404.8 Total 4,404.
Slide 34: Cash Position
Cash Position Temporarily decreased due to bridge investments for SVF,*1 payment of income taxes (JPY 250.7 bn), and early redemption of certain corporate bonds by Sprint (JPY 189.3 bn). <JPY bn> 3,407.9 2,957.9 2,906.5 2,935.3 Net proceeds from hybrid bonds 2,765.5 (July) 497.7 Investments that hav
Slide 35: Net Interest-bearing Debt
Net Interest-bearing Debt Slightly increased due to bridge investments for SVF and payment of income taxes (JPY 250.7 bn). <JPY bn> 12,280.2 Investments that have been -364.6 agreed to be transferred to 11,269.3 11,207.6 10,702.2 -497.7 SVF from the Company Net proceeds from hybrid bonds (July) 8,31
Slide 36: Foreign Currency-denominated Hybrid Notes
Foreign Currency-denominated Hybrid Notes The first offering of hybrid notes denominated in foreign currencies by a Japanese corporate issuer. Successfully raised USD 4.5 bn (approx. JPY 500 bn) in total. (Ref.) Foreign-currency denominated Domestic Hybrid Hybrid Notes Bonds Issuance timing July 201
Slide 37: Leverage Ratio
Leverage Ratio Substantially stable. Leverage Ratio (Gross / Net) 5.3x 5.4x (Gross) 4.5x (Net) 4.2x 4.3x (Net*) *After the consideration of 50% equity credit of the hybrid bonds issued in July, and recovery from SVF of the investments that SBG plans to transfer to SVF Mar '17 Jun '17 *1. Gross lever
Slide 38: Net Leverage Ratio (Consolidated)
Net Leverage Ratio (Consolidated) Continued focus on lowering leverage for a mid-term range. 6.2x (after Vodafone K.K. acquisition) 4.2x 4.5x 4.3x* *After the consideration of 50% equity credit of the hybrid bonds issued in July, and recovery from SVF 1.1x of the investments that SBG plans to transf
Slide 39: Leverage Ratio of Domestic Telco Business and Debt Coverage Ratio
Leverage Ratio of Domestic Telco Business and Debt Coverage Ratio Domestic Other Telco (incl. Sprint acquisition cost) Etc. Net interest- Net interest- JPY 3.5 tn JPY 4.4 tn bearing debt bearing debt Adjusted = 2.9x Equity value of = 21% JPY 1.2 tn JPY 20.4 tn EBITDA holdings *Net interest-bearing d
Slide 40: Leverage ratio of Domestic Telco Business and Debt Coverage (details)
Leverage ratio of Domestic Telco Business and Debt Coverage (details) Domestic Telco Other 2.9x 21% Net interest-bearing debt (consolidated basis) +JPY 12.3t Domestic Telco - Net interest-bearing debt (Sprint, YJ, Domestic Net interest-bearing debt Telco) - JPY 6.7t (Sprint acquisition cost) - Recov
Slide 41: Equity Attributable to Owners of the Parent Ratio
Equity Attributable to Owners of the Parent Ratio Firm equity level. Equity Attributable to Owners of the Parent Ratio of Equity Attributable to Owners of (Shareholders’ equity) the Parent (shareholders’ equity ratio) <JPY bn> *1 497.7 Actual shareholders’ 231.4 equity 231.4 18.1%*1 Actual ratio of
Slide 42: Debt / Equity Ratio
Debt / Equity Ratio Debt / Equity Ratio (Gross / Net) 3.6x 3.5x (Gross) 2.9x (Net) 2.9x 2.6x (Net*) *After the consideration of 50% equity credit of the hybrid bonds issued in July, and recovery from SVF of the investments that SBG plans to transfer to SVF Mar. '17 June '17 *1. Debt / equity ratio =
Slide 43: Interest Expense
Interest Expense Increased year on year due to acquisition of Arm. Interest Expense (finance cost) Interest Coverage Ratio Excl. Sprint Sprint Excl. Sprint Consolidated <JPY bn> 120.9 112.1 9.6x 7.2x 68.7 69.7 6.1x 5.8x 52.2 42.4 FY16/Q1 FY17/Q1 FY16/Q1 FY17/Q1 43 * Interest Coverage Ratio = adjuste
Slide 44: Market Cap of Major Listed Holdings Held by SBG and Its Subsidiaries
Market Cap of Major Listed Holdings Held by SBG and Its Subsidiaries Listed holdings amount to JPY 16t. 16.0 14.8 <JPY t> Partial 12.6 monetization (Alibaba Group) 11.3 9.7 11.3 10.4 8.1 Alibaba Group 8.0 7.1 4.6 Sprint Yahoo Japan Other 1.3 1.5 1.3 0.7 0.9 0.8 0.8 Mar '07 Mar '08 Mar '09 Mar '10 Ma
Slide 45: SBG: Price and Spread of Domestic Currency Denominated Bond
SBG: Price and Spread of Domestic Currency Denominated Bond Domestic Currency Denominated Bond Domestic Currency Denominated Bond Price Credit Spread 45th Series (2 yrs remaining) 45th Series (2 yrs remaining) 44th Series (4 yrs remaining) (bp) 44th Series (4 yrs remaining) 48th Series (6 yrs remain
Slide 46: SBG: Price and Spread of Foreign Currency Denominated Bond
SBG: Price and Spread of Foreign Currency Denominated Bond Foreign Currency Denominated Bonds Foreign Currency Denominated Bonds Price Spread (bp) 2020 USD 2022 USD 2025 USD 2020 USD 2022 USD 2025 USD 780 120 2020 EUR 2022 EUR 2025 EUR 2020 EUR 2022 EUR 2025 EUR 2027 EUR Perp NC6 USD Perp NC10 USD 2
Slide 47: Sprint: Price and Spread
Sprint: Price and Spread Sprint Senior Notes Sprint Senior Notes Price Spread (bp) 1,990 115 due 2021 due 2023 due 2021 due 2023 due 2024 due 2024 due 2025 due 2025 due 2028 due 2028 1,690 105 1,390 95 1,090 85 75 790 65 490 55 190 16/1 16/3 16/5 16/7 16/9 16/11 17/1 17/3 17/5 17/7 16/1 16/3 16/5 16
Slide 48: Trend of Credit Rating of SBG
Trend of Credit Rating of SBG Acquisition of Acquisition of Acquisition of Acquisition of Japan Telecom Vodafone K.K. Sprint Arm 14 13 A/A2 12 A－/A3 JCR (A－) 11 BBB+/Baa1 10 BBB/Baa2 9 BBB－/Baa3 S&P (BB＋) 8 BB+/Ba1 7 BB/Ba2 Moody’s (Ba1) 6 BB－/Ba3 5 B+/B1 4 2003 2004 2005 2006 2007 2008 2009 2010 20
Slide 49: SBG Bond Redemption Schedule
SBG Bond Redemption Schedule Straight bond Subordinated bond Hybrid bond 1,305.6 Foreign currency denominated bond Foreign currency denominated hybrid bond 455.6 <JPY bn> (793.4) 700.0 561.8 308.0 474.4 15.4 400.0 191.8 485.4 850.0 700.0 324.4 293.4 (263.7) 470.0 400.0 370.0 120.0 293.4 196.0 150.0
Slide 50: SoftBank Vision Fund Financial Significance (concept)
SoftBank Vision Fund Financial Significance (concept) Maximize investment opportunities while managing leverage. Manage as GP Third-party (Investment as LP) Limited Partners SBG SoftBank Vision Operation Fund companies Yahoo Other SoftBank Sprint Arm subsidiaries Japan Investment 投資先 portfolio Non-r
Slide 51: FY2017 Financial Strategies
FY2017 Financial Strategies Balance SoftBank Vision Fund and credit improvement SoftBank Vision Fund: A new investment strategy that accelerates enterprise value-oriented management • Maximize investment opportunities while managing leverage • Visualize mid to long-term investment strategy Enhance s
Slide 52: (Reference)
(Reference) 52
Slide 53: Sprint Debt Maturities
Sprint Debt Maturities Sprint notes and credit facilities Clearwire Notes (897.1) (897.1) <USD mil> JPY bn in ( ) 8,010 (571.3) 5,101 (458.5) (448.0) (421.0) 4,094 4,000 3,759 8,010 (279.9) (284.5) (282.2) (277.2) 2,499 2,540 2,520 2,475 (224.0) 5,101 629 3,759 2,000 4,094 4,000 2,475 2,540 2,520 1,
Slide 54: Interest-bearing Debt: Breakdown by Long/Short and Fixed/Variable
Interest-bearing Debt: Breakdown by Long/Short and Fixed/Variable Interest-bearing Debt Interest-bearing Debt Long / Short Ratio Fixed / Variable Ratio <JPY bn> Long-term Short-term <JPY bn> Fixed Variable 14,142.9 14,183.3 14,142.9 14,183.3 19％ 23％ 30％ 30％ 9,778.5 9,778.5 28％ 34% 77％ 70％ 81％ 70％ 72
Slide 55: Domestic Telecommunications
Domestic Telecommunications 55
Slide 56: Growth Strategy
<Domestic Telecommunications Segment> 1. Growth Strategy (2) Yahoo Japan Synergies (OTT) (3) New Areas (IoT) ② Strategic Automatic areas driving AI Content EC Shopping IoT Robotics businesses Existing Smartphone FTTH (1) Expand customer base 56
Slide 57: Enhance Upfront Investment
<Domestic Telecommunications Segment> 2. Enhance Upfront Investment Expansion of Customer rewards Synergy with customer base Yahoo Japan * Shopping 10x loyalty points everyday Smartphone Debut Premium Discount All benefits Home Bundle Discount Long-term loyalty available benefits Promoting 2 brands
Slide 58: Net Sales
<Domestic Telecommunications Segment> 3. Net Sales FY17Q1 net sales was approx. JPY 755.7bn (-JPY 6.1bn YoY: telecom revenue -JPY 3.4bn, product and other sales -JPY 2.7bn). Broadband revenue grew steadily (+JPY 18.3bn YoY). Net Sales Telecom Service Revenue Product and other sales YoY compariso
Slide 59: Operating Income/Adjusted EBITDA
<Domestic Telecommunications Segment> 4. Operating Income/Adjusted EBITDA FY17Q1 segment income marked JPY 218.5bn, down JPY 20.5bn YoY. Operating Income/ Adjusted EBITDA Segment Income <JPY bn> YoY comparison in ( ) <JPY bn> YoY comparison in ( ) 800 719.6 688.4 1,209.0 68.1 1,200 1,163.3 Q4 90.1
Slide 60: Segment Income Analysis
<Domestic Telecommunications Segment> 5. Segment Income Analysis Broadband drove topline growth. Mobile communications revenue decreased due to the impact of Home Bundle Discount Hikari Set, Giga Monster, and decreases in MBB and PHS. Cost increased due to upfront investment for customer acqui
Slide 61: Mobile Communications Subscribers and Churn Rate
<Domestic Telecommunications Segment> 4. Mobile Communications Subscribers and Churn Rate (main subscribers) Subscribers: increased 300k YoY, smartphone increased 1,750k. Churn rate: flat YoY, steadily improved in handset churn, while deteriorating in MBB. Main subscribers: handsets, tablets, an
Slide 62: ARPU (main subscribers)
<Domestic Telecommunications Segment> 7. ARPU (main subscribers) FY17Q1 ARPU decreased by JPY 230 YoY, with monthly discount ARPU widening by JPY 120. Telecom ARPU decreased due to higher penetration of Y!mobile smartphones and expansion of Home Bundle Discount Hikari Set. ARPU YoY comparison in
Slide 63: Broadband Service
<Domestic Telecommunications Segment> 8. Broadband Service 4.01mil SoftBank Hikari at FY17Q1-end. Steady trend in customer acquisition. 6.64mil subscribers under Home Bundle Discount Hikari Set; doubling YoY. Cumulative Subscribers Home Bundle Discount Hikari Set (number of connected lines) Cumu
Slide 64: CAPEX / Free Cash Flow
<Domestic Telecommunications Segment> 9. CAPEX / Free Cash Flow FY17Q1 CAPEX is JPY 47.0bn. FY17Q1 FCF is JPY 76.5bn, up JPY 6.8bn YoY. CAPEX Free Cash Flow (*adjusted) <JPY bn> YoY comparison in ( ) <JPY bn> YoY comparison in ( ) 減価償却費 Depreciation 480 120 385.3 370.0 80 360 76.5 (+6.8) Q4 69.7
Slide 65: Growth Strategy (New Areas) ~SBW
<Domestic Telecommunications Segment> 10. Growth Strategy (New Areas) ~SBW Generate synergies with investees 65
Slide 66: Growth Strategy (New Areas) ~Maximize Synergies
<Domestic Telecommunications Segment> 11. Growth Strategy (New Areas) ~Maximize Synergies 1. Deploy cutting-edge business model and technologies (seeds) Robotics Fintech SoftBank Group Investees SoftBank Security 2. Promote JV / alliance Cloud IoT 3. Develop and return AI Showcasing Japan 66
Slide 67: Growth Strategy (New Areas) ~Examples
<Domestic Telecommunications Segment> 12. Growth Strategy (New Areas) ~Examples Create growth opportunities through smartphones & FTTH Entered into energy-IoT services Established JV to IBM Watson transform work style in Japan Successful demonstration in Okinawa (Cabinet Office SIP) Analysis and Sel
Slide 68: Summary of FY17
13. Summary of FY17 Domestic Telco Prioritize upfront investment 1 Drive growth strategy 2 Maintain FCF over JPY 500bn Except Domestic Telco income to decline*(up to -7% YoY) 3 Focus on future growth *Operating income of Domestic Telecommunications segment (FY2017) 68
Slide 69: Domestic Telecommunications Segment Breakdown of Net Sales
<Domestic Telecommunications Segment> (Reference) Domestic Telecommunications Segment Breakdown of Net Sales <億円> FY2016 FY2017 Full Q1 Q2 Q3 Q4 year Q1 Total net sales 7,618 7,928 8,461 7,931 31,938 7,557 Telecom service revenue 6,058 6,095 6,135 5,943 24,231 6,024 Mobile communications 4,801 4,781
Slide 70: Definition and calculation method of main operational data
Definition and calculation method of main operational data <Mobile Communications Service> 1. Subscribers Main subscribers: smartphones (*1), feature phones, tablets, mobile data communications devices (*2), others, Communication modules: communication modules (*3), Mimamori Phone, prepaid mobile ph
Slide 71: Sprint
Sprint 71
Slide 72: Sprint Q1 FY2017 Results
Q1 FY 2017 RESULTS SoftBank Investor Briefing ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the intended recipient.
Slide 73: Cautionary Statement
SAFE HARBOR Cautionary Statement This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan”, “outlook,” “providing guidance,” and si
Slide 74: Fiscal 1Q 2017 Highlights
Fiscal 1Q 2017 Highlights Net Income Adjusted EBITDA* GROWING REVENUE FIRST HIGHEST REDUCING time in three years in nearly 10 years EXPENSES Adjusted Free Net Additions Investing in our consecutive quarters of growth Cash Flow* Postpaid Phone NETWORK POSITIVE 8 to improve the in 6 of last 7 quarters
Slide 75: Growing Connections
Growing Connections Postpaid Phone Net Adds Prepaid Net Adds^ Q115 Q116 Q117 Q115 Q116 Q117 8 NET ADDITIONS consecutive quarters of 2 NET ADDITIONS consecutive quarters of ^excluding Lifeline ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and
Slide 76: Network Getting Better Every Day
Network Getting Better Every Day TODAY TOMORROW National Average Download Speed Change Innovative Deployment Macro (800MHz, 1.9GHz, 2.5GHz) Up More than Macro Coverage 25% Dense Residential Network Built For Rankings based on RootMetrics Metro RootScore Reports from 1H 2016 and 1H 2017 for mobile pe
Slide 77: Enhancing our Value Proposition
Enhancing our Value Proposition Simple & Expanding Ramping Prepaid Flexible Offers Distribution Digital Sales Momentum ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or p
Slide 78: Growing Revenue
Growing Revenue Net Operating Revenues Postpaid Phone Average Billings per Dollars in Billions User (ABPU)* Q115 Q116 Q117 Q115 Q116 Q117 Wireless Service Rev Wireless Equip Rev Service Equipment Normalized Consolidated Net Operating Rev 4 GROWTH consecutive quarters of year-over-year STABLE Revenue
Slide 79: Reducing Operating Expenses
Reducing Operating Expenses Cash Operating Expenses Dollars in Billions nearly $4B annualized REDUCTIONS over two years nearly Q1 15 Q1 16 Q1 17 $370M of combined year-over-year Cost of Services Selling, General & Administrative REDUCTIONS in CoS and SG&A in FY1Q17 ©2017 Sprint. This information is
Slide 80: Improving Profitability
Improving Profitability Adjusted EBITDA* Operating Income Dollars in Billions Dollars in Billions Q115 Q116 Q117 Q115 Q116 Q117 Non-Recurring Items (Net) HIGHEST in nearly ten years 3 x increase year-over-year as reported ©2017 Sprint. This information is subject to Sprint policies regarding use and
Slide 81: Delivering Net Income
Delivering Net Income Net Income (Loss) Dollars in Millions (actual dollars) 1QFY17 1QFY16 Change EPS $0.05 ($0.08) $0.13 Spectrum license exchanges, $0.07 $0.07 after tax Q115 Q116 Q117 Other expenses ($0.08) ($0.03) ($0.05) NET INCOME first time in three years ©2017 Sprint. This information is sub
Slide 82: Capex & Adjusted Free Cash Flow
Capex & Adjusted Free Cash Flow* Cash Capex Adjusted Free Cash Flow* Dollars in Millions Dollars in Millions Q115 Q116 Q117 Q115 Q116 Q117 Network/Other Device investing in our NETWORK investment POSITIVE six of the last seven quarters ©2017 Sprint. This information is subject to Sprint policies reg