Softbank Group Corp. · TSE:9984
Softbank — H1 FY2009 Earnings Presentation
84 slides from Softbank's earnings presentation, Oct 30, 2009
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2009
Earnings Results for the Six-month Period Ended September 30, 2009 (Apr-Sep 2009) Analyst Meeting October 30, 2009 SOFTBANK CORP. November 02, 2009 Version
Slide 2: Disclaimer
Disclaimer This material is made based on information available at the time of writing. Statements in this material that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements. Forward-looking Statements are subject to various risks
Slide 3: Accounting, Finance, Operating
Accounting 5 Consolidated P/L Analysis 6 Consolidated B/S Analysis 14 Consolidated CF Analysis 24 Finance 29 Operating 57 Broadband Infrastructure Segment 59 Fixed-line Telecommunications Segment 63 Mobile Communications Segment 67 3
Slide 4: wm OOftBank
wm OOftBank
Slide 5: Accounting
Accounting Kazuko Kimiwada General Manager Accounting, Internal Control SOFTBANK CORP. 5
Slide 6: Consolidated P/L Analysis
Accounting Consolidated P/L Analysis 6
Slide 7: Consolidated P/L Summary
Consolidated P/L Summary <bn JPY> Net Sales Operating Income Ordinary Income Net Income 3,000 400 2,673.0 359.1 Q4 690.7 84.4 300 +28.1% 2,000 Q3 230.6 225.6 653.2 +1.5% 94.6 +47.9% 200 51.1 1,328.9 1,349.2 180.0 173.5 Q2 122.3 57.1 1,000 681.7 682.9 94.9 117.3 94.7 +72.1% 100 43.1 63.0 70.7 Q1 41.1
Slide 8: Consolidated Net Sales
Consolidated Net Sales 1,349.2 1,328.9 <bn JPY> Mobile Communications +58.2bn - Increase in telecommunications service revenue +36.9bn Increase in subscribers +46.1bn Decrease in ARPU -10.7bn +20.2 - Increase in revenue from sales of mobile handsets and accessories +21.3bn (+1.5%) Mobile Communicati
Slide 9: Consolidated Operating Income
Consolidated Operating Income 230.6 <bn JPY> Mobile Communications +43.6bn - Increase in net sales +58.2bn - Increase in operating expenses -14.6bn (main factors for increase in expenses) Increase in sales commissions +50.6 (main factors for decrease in expenses) 180.0 (+28.1%) - Decrease in cost of
Slide 10: Non-operating Income/Loss and Ordinary Income
Non-operating Income/Loss and Ordinary Income <bn JPY> Non-operating Income/Loss Ordinary Income Other non-operating expense FY09/Q1-2 Interest expense Increase in Ordinary Other non-operating income Equity in earnings (loss) of affiliated companies operating income Foreign exchange gain income +5.6
Slide 11: Tax and Other Adjustments
Tax and Other Adjustments < bn JPY> FY09/Q1-2 Breakdown of Tax Expenses A Income taxes; current 48.8 (main breakdown) 1. Yahoo Japan 27.7 2. SBM local taxes 16.8 (out of scope for BBM consolidated tax return) 3. BBM income taxes under consolidated tax return 1.9 (all loss carryforwards fully utilize
Slide 12: Difference in Tax Rate
Difference in Tax Rate FY09/Q1-2 Reconciliation Between Statutory Tax Rate and Effective Tax Rate Amount Rate (bn JPY) Income before income taxes and minority interests 176.8 Statutory income tax rate 40.7% 71.9 (main factors of difference) Amortization of goodwill (mainly SBM) 6.9% 12.1 Change in v
Slide 13: Loss Carryforwards (Sep 09)
Loss Carryforwards (Sep 09) < bn JPY> Occurred Utilized Deferred FY08/Q4 FY09/Q2 During During Tax Company Balance FY09/Q1-2 FY09/Q1-2 Other Balance Expiry (taxable (taxable Assets Name (taxable (taxable Variances Date income income income income (tax based) based) based) based) based) BB Mobile 77.
Slide 14: Consolidated B/S Analysis
Accounting Consolidated B/S Analysis 14
Slide 15: Consolidated B/S Summary
Consolidated B/S Summary SBM Others <bn JPY> Current Assets Current Liabilities 1,520.3 1,559.4 1,349.5 1,241.0 1,035.3 1,010.7 674.8 676.4 484.9 548.7 674.7 564.5 Mar 2009 Sep 2009 Mar 2009 Sep 2009 Fixed Assets Long-term Liabilities 2,865.0 2,785.3 2,212.2 2,193.7 1,953.9 1,896.4 1,672.2 1,518.7 9
Slide 16: Consolidated B/S (1) Current Assets
Consolidated B/S (1) Current Assets <bn JPY> Assets Mar 2009 Sep 2009 Variance Outline Current assets 1,520.3 1,559.4 39.1 SBM 1,035.3 1,010.7 -24.5 Others 484.9 548.7 63.7 Cash and deposits 457.9 575.8 117.8 Increase provided by operating activities (+167.2 ) SBM Securitization of installment sales
Slide 17: Consolidated B/S (2) Tangible Assets
Consolidated B/S (2) Tangible Assets <bn JPY> Assets Mar 2009 Sep 2009 Variance Outline Fixed assets 2,865.0 2,785.3 -79.6 SBM 1,953.9 1,896.4 -57.5 Others 911.0 888.9 -22.0 Property and equipment, net 1,000.9 968.7 -32.1 SBM 697.1 677.4 -19.6 Others 303.8 291.3 -12.5 Building and structures 71.5 70
Slide 18: Consolidated B/S (3) Intangible Assets
Consolidated B/S (3) Intangible Assets <bn JPY> Assets Mar 2009 Sep 2009 Variance Outline Fixed assets Intangible assets, net 1,222.1 1,184.0 -38.0 SBM 1,077.4 1,049.1 -28.3 Others 144.6 134.8 -9.7 Goodwill 956.7 925.3 -31.4 SBM 878.5 852.8 -25.7 Decrease due to regular amortization Others 78.1 72.4
Slide 19: Consolidated B/S (4) Current Liabilities
Consolidated B/S (4) Current Liabilities <bn JPY> Liabilities Mar 2009 Sep 2009 Variance Outline Current liabilities 1,349.5 1,241.0 -108.5 SBM 674.8 676.4 1.5 Others 674.7 564.5 -110.1 Accounts payable-trade 160.3 158.0 -2.2 SBM 100.5 106.6 6.1 Others SBB: Mar 09 (38.3) >> Sep 09 (31.8) 59.8 51.4 -
Slide 20: Consolidated B/S (5) Long-term Liabilities
Consolidated B/S (5) Long-term Liabilities <bn JPY> Liabilities Mar 2009 Sep 2009 Variance Outline Long-term liabilities 2,212.2 2,193.7 -18.5 SBM 1,672.2 1,518.7 -153.5 Others 540.0 675.0 135.0 Corporate bonds 324.5 418.5 93.9 SBM - - - SB stand-alone: 27th, 28th, 29th Unsecured Straight Corporate
Slide 21: Consolidated B/S (6) Equity
Consolidated B/S (6) Equity <bn JPY> Equity Mar 2009 Sep 2009 Variance Outline Equity 824.7 912.3 87.5 Shareholders’ equity 348.1 417.9 69.7 Common stock 187.6 188.7 1.0 Additional paid-in capital 211.9 212.2 0.2 Accumulated deficit/retained earnings -51.2 17.1 68.4 FY2009/Q2 net income (+70.7), div
Slide 22: [Equity] Foreign Currency Translation Adjustments
[Equity] Foreign Currency Translation Adjustments <bn JPY> 60 Foreign currency translation adjustments account 40 35.9 20 30.6 25.6 7.4 4.4 3.4 0 -25.7 -21.8 -20 -30.5 -31.6 -40 Jun 07 Sep Dec Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 <Ref> Main exchange rate trend <JPY> GBP/JPY (TTM） 240 Eur
Slide 23: [Equity] Shareholders' Equity
[Equity] Shareholders’ Equity Common stock & additional paid-in capital* Accumulated deficit/retained earnings Treasury stock Unrealized gain on available-for-sale securities Deferred gain (loss) on derivatives under hedge accounting Foreigncash * Including currency translation receipts adjustments
Slide 24: Consolidated CF Analysis
Accounting Consolidated CF Analysis 24
Slide 25: Consolidated Cash Flow Main Breakdown
Sep 09 573.4 <bn JPY> Cash and cash equivalents 25 at the end of the period -44.5 Repayment of lease obligations 38.9 Sale and lease back of equipment newly acquired Financing CF 153.6 Consolidated Cash Flow Main Breakdown Bonds issued -59.0 -250.1 Repayment of long- term debt 201.7 Proceeds from lo
Slide 26: Consolidated Earnings Forecast
Consolidated Earnings Forecast <bn JPY> Operating Income FCF 500 500 +17% 420.0 400 400 359.1 +65% 300 300 300.0 Raised by +50.0bn JPY 200 200 181.5 100 100 0 0 FY08 FY09 FY08 FY09 (actual) (forecast) (actual) (forecast) Note: Free Cash Flow (FCF) = cash flows from operating activities + cash flows
Slide 27: Scope of Consolidation/Scope of Equity Method
Scope of Consolidation/Scope of Equity Method Number of Name of Core Companies Companies SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Consolidated subsidiaries 110 Yahoo Japan, SOFTBANK TECHNOLOGY, ITmedia, etc. Newly consolidated subsidiaries 5 Subsidiaries excluded from consolidation 3 Non-cons
Slide 28: wm OOftBank
wm OOftBank
Slide 29: Finance
Finance Yoshimitsu Goto General Manager Finance SOFTBANK CORP. 29
Slide 30: Main Financial Activities of FY2009 Apr-Sep
Main Financial Activities of FY2009 Apr-Sep (bn JPY) Date Content Amount Issue 27th Unsecured Straight Corporate Bond June 2009 60.0 (Fukuoka SoftBank HAWKS Bond) Securitization of mobile handset installment sales June 2009 70.2 receivables July 2009 Issue 28th Unsecured Straight Corporate Bond 30.0
Slide 31: FCF Actual - Forecast
FCF Actual - Forecast <bn JPY> Consolidated FCF: Yearly Trend 400 Revised upward 300.0 +50.0bn JPY 300 118.4bn JPY 181.5 (65%) estimated 200 increase 345.7bn JPY increase 100 0 FY09/Q1-2 -100 actual JPY 177.0bn -200 -164.2 FY07 FY08 FY09 (forecast) 31 Note: Free Cash Flow (FCF) = cash flows from ope
Slide 32: Cash Flow Trend
Cash Flow Trend Consolidated CF: Q1-2 Trend <bn JPY> Operating CF Investing CF Financing CF FCF 400 300 177.0 200 100 0 12.1 -100 -200 -226.8 -300 FY07 FY08 FY09 Q1-2 Q1-2 Q1-2 Note: Free Cash Flow (FCF) = cash flows from operating activities + cash flows from investing activities 32
Slide 33: EBITDA and EBITDA Margin (by segment)
EBITDA and EBITDA Margin (by segment) ¾ EBITDA growing steadily in each segment. Consolidated EBITDA EBITDA Margin <bn JPY> Elimination Other 60% Internet Culture Internet Culture e-Commerce 55% 53% 53% 387.1 400 BB Infrastructure Fixed-line Telecommunications Mobile Communications 335.5 50% 350 314
Slide 34: EBITDA - CAPEX
EBITDA - CAPEX ¾ Steady increase due to expansion of EBITDA. <bn JPY> EBITDA – CAPEX 800 678.6 626.6 525.4 EBITDA FY09/Q1-2 actual X2 419.5 400 332.9 FY09/Q1-2 actual 387.1 135.6 0 EBITDA - CAPEX -87.2 EBITDA -259.0 -260.0 -293.7 CAPEX (changed plan) -400 -389.8 FY06 FY07 FY08 FY09 (forecast) Note 1
Slide 35: EBITDA – CAPEX (by main segments)
EBITDA – CAPEX (by main segments) EBITDA – CAPEX <bn JPY> Mobile Communications Broadband Infrastructure 200 200 100 150.0 204.6 177.9 100 32.2 13.0 33.4 49.0 56.3 0 0 FY09 FY09 FY06 FY07 FY08 Q1-2 FY06 FY07 FY08 Q1-2 Yearly Interim Yearly Interim 200 200 Internet Culture Fixed-line Telecommunicatio
Slide 36: Interest-bearing Debt (by procurement method)
Interest-bearing Debt (by procurement method) <bn JPY> Interest-bearing Debt Securitization of installment sales 3,000 receivables obligations 2,545.3 2,494.9 SBM loan 2,432.2 2,400.3 2,392.0 2,348.3 223.1 230.9 Vodafone subordinate loan 218.8 221.9 231.9 221.6 Yahoo Japan borrowings 2,000 1,261.9 B
Slide 37: Lease Obligations
Lease Obligations <bn JPY> Lease Obligations 3,000 Finance leases (accounted for as operating lease transactions) Finance leases (lease obligations) 2,000 1,000 481.4 494.5 468.7 462.9 436.1 437.7 166.0 157.5 149.5 141.3 133.4 121.4 315.3 336.9 319.2 321.5 302.7 316.3 0 Jun Sep Dec Mar Jun Sep 08 09
Slide 38: Net Interest-bearing Debt
Net Interest-bearing Debt <bn JPY> Net Interest-bearing Debt 3,000 2,119.3 2,070.9 2,044.9 2,000 223.1 1,939.5 1,905.1 230.9 218.8 221.9 231.9 1,768.5 221.6 Securitization of installment sales receivables obligations 1,000 1,896.2 1,840.0 1,826.1 1,717.5 1,673.1 1,546.9 Excl. securitization of insta
Slide 39: Cash Position
Cash Position Cash Position <bn JPY> 800 720.7 141.0 600 525.9 525.0 537.8 481.8 51.0 Unused portion of credit 100.0 101.0 21.0 423.3 line facility 400 36.0 Cash and deposits, and 579.7 marketable securities 460.8 486.8 200 425.9 424.0 387.3 0 Jun Sep Dec Mar Jun Sep 08 09 Note 1: Cash position = ca
Slide 40: Interest-bearing Debt Long/Short and Fixed/Variable Ratio (Sep 09)
Interest-bearing Debt Long/Short and Fixed/Variable Ratio (Sep 09) Interest-bearing Debt Interest-bearing Debt Long/Short Ratio Fixed/Variable Ratio <bn JPY> <bn JPY> Variable rate procurement Short-term debt 270.4 511.8 (12%) (22%) Fixed interest procurement Long-term debt 2,077.8 1,836.4 (88%) (78
Slide 41: Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend
Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend Interest-bearing Debt Interest-bearing Debt Long/Short Ratio Fixed/Variable Ratio <bn JPY> <bn JPY> Long-term Short-term Fixed Variable 100% 100% 410.0 354.2 270.4 639.5 626.8 511.8 80% 80% 60% 60% 2,037.7 2,077.8 40% 1,836.4 40% 1,990.
Slide 42: Renewal of Credit Line Facility
Renewal of Credit Line Facility <bn JPY> Trend of Credit Line Facility Renewed credit line, 250 235.6 increased by 34.6bn JPY (partially loan) 201.0 200 179.0 161.0 141.0 Unused portion 150 30.0 101.0 of credit line facility 105.0 119.0 100 30.0 20.0 Used portion 131.0 of credit line facility 50 100
Slide 43: Issue of Corporate Bonds in FY09/Q1-2
Issue of Corporate Bonds in FY09/Q1-2 Amount Targeted Coupon Term to Month Content (bn JPY) Investors rate maturity 27th Unsecured Straight June Corporate Bond 60.0 Individual 5.10% p.a. 2 years (Fukuoka SoftBank HAWKS Bond) 28th Unsecured Straight July Corporate Bond 30.0 Institutional 4.72% p.a. 3
Slide 44: Credit Spread
Credit Spread SOFTBANK CDS and Bond Spread Trend <bp> 2,500 Market stabilizes 2,000 1,500 SOFTBANK CDS (5 years) 1,000 26th Unsecured Straight Corporate Bond (4.7 years remaining) 500 Source: CDS data by Bloomberg Bond spread data is calculated by 0 SOFTBANK based on Japan Securities Apr Jun Aug Oct
Slide 45: Bond Redemption Schedule
Bond Redemption Schedule ¾ Sustain sufficient repayment resources. <bn JPY> Repayment Capability Corporate Bonds Redemption Schedule Unused portion of credit line facility Cash and cash deposits, and marketable securities 800 720.7 SB straight bond 141.0 SBTM straight bond 600 525.0 SB convertible b
Slide 46: Corporate Bond Details
Corporate Bond Details <mil JPY> Interest <mil09JPY> Mar 09 Sep Company name Bond Issue date Maturity date rate Collateral Change balance balance (%/year) 19th series Unsecured Straight Bond 2005/1/31 2010/1/29 1.97 None 19,000 19,000 － 24th series Unsecured Straight Bond 2007/4/26 2010/4/26 2.72 No
Slide 47: SBM Loan Cumulative Repayment Amount
SBM Loan Cumulative Repayment Amount ¾ Repayment exceeds plan. <bn JPY> <times> SBM Loan Cumulative Repayment Amount 300 4.5 277.0 Mobile 247.0 250 211.8 Communications 3.9 181.1 4.0 leverage ratio 200 158.2 2.9 times 126.7 150 3.5 (Sep 09) 104.1 100 Net interest-bearing 2.9 3.0 debt basis 50 2.3X 0
Slide 48: Securitization of Installment Receivables in Mobile Communications
Securitization of Installment Receivables in Mobile Communications (reported as borrowings) Securitization of Installment Receivables (reported as borrowings) 219.0 223.1 230.9 218.8 221.9 231.9 221.6 250 193.4 200 Outstanding 142.1 balance 150 88.1 100 50 100 88.1 71.5 70.2 0 80 23.0 64.8 57.2 61.4
Slide 49: Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple
Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple ¾ Expand EBITDA and reduce interest-bearing debt. Interest-bearing Debt/EBITDA (Ref.) Net Interest-bearing Multiple Debt/EBITDA Multiple <times> <times> 8.0 8.0 6.0 6.0 4.8 4.0 4.1 4.0 3.5 4.0 3.3 3.0 2.9 2.3 2.0 2.0 0.0 0.0 FY09 FY09 FY06 F
Slide 50: Improve Indexes: (2) Debt/Equity Ratio
Improve Indexes: (2) Debt/Equity Ratio ¾ Ratio improving steadily. <times> <times> Debt Equity Ratio Net Debt Equity Ratio 12.0 12.0 Net D/E ratio 10.0 9.0 D/E ratio 10.0 Net D/E ratio (excl. Mobile) D/E ratio (excl. Mobile) 7.6 8.0 8.0 6.6 6.4 6.0 5.3 6.0 5.3 5.2 3.9 4.0 4.0 4.0 2.9 2.5 2.4 2.1 1.8
Slide 51: Improve Indexes: (3) Interest Coverage Ratio
Improve Indexes: (3) Interest Coverage Ratio ¾ Maintain stable trend. <times> <times> Interest Coverage Ratio 14.0 Interest Coverage Ratio 14.0 (Quarterly) (Yearly) 12.0 12.0 10.0 10.0 8.0 7.3 8.0 7.0 6.7 6.1 6.3 6.3 6.0 5.7 6.1 6.0 6.0 5.4 4.0 4.0 2.0 2.0 0.0 0.0 FY08/Q1 Q2 Q3 Q4 FY09/Q1 Q2 FY09 FY
Slide 52: Improve Indexes: (4) Equity Ratio
Improve Indexes: (4) Equity Ratio ¾ Equity ratio recovered to double digits. Equity Ratio (Ref.) Equity Ratio*1 <bn JPY> <bn JPY> (considering unrealized gain) 2,000 30% 54.5% Shareholders' equity (considering unrealized gain) Shareholders' equity 2,000 1,876.9 Equity ratio (considering unrealized g
Slide 53: FY2009 Financial Strategies
FY2009 Financial Strategies Towards ‘ZERO net-interest bearing debt’ Maximize FCF, through maximum operating CF and appropriate investing CF Continued improvement of various financial indexes through steady reduction of debts Improve credit rating as a result of strengthening of balance sheet Con
Slide 54: wm OOftBank
wm OOftBank
Slide 55: wm OOftBank
wm OOftBank
Slide 56: wm OOftBank
wm OOftBank
Slide 57: Operation
Operation Kazuhiko Fujihara Senior Vice President, CFO, Director of the Board SOFTBANK MOBILE Corp. Senior Vice President & CFO, Director SOFTBANK BB Corp. Director SOFTBANK TELECOM Corp. 57
Slide 58: Overview of Telecommunications Businesses
Overview of 3 Telecommunications Businesses ¾ Increase in profit in all 3 telecommunications businesses. <bn JPY> Significant increase in Mobile Communications. Broadband Infrastructure Fixed-line Telecommunications Mobile Communications (Ref.) consol. operating income 249.4 YoY (Apr-Sep) +50.6 YoY
Slide 59: Broadband Infrastructure Business
Operation Broadband Infrastructure Business 59
Slide 60: Operating Income, EBITDA
Operating Income, EBITDA <BB> ¾ Maintain trend of revenue increase through cost reductions. <bn JPY> Operating Income EBITDA 80 80 70.3 70.9 18.2 16.8 55.6 47.2 Q4 15.7 39.7 18.5 20.1 10.6 40 40 33.9 35.4 9.4 33.4 26.8 Q3 15.4 14.3 27.2 24.4 17.3 Q4 7.3 11.3 22.2 17.5 17.5 18.9 13.3 Q3 7.7 Q2 12.6 1
Slide 61: Yahoo! BB ADSL Lines and ARPU
Yahoo! BB ADSL Lines and ARPU <BB> ¾ Number of ADSL lines are decreasing. ARPU on same level. Number of Lines and ARPU <k lines> Full Charged Users 1.Basic charge 4.BB Phone <JPY> 6,000 5,000 2.Modem rental revenue 5.BB Security 3.WLAN 6.Yahoo! ISP 5,150 5,040 4,255 5,000 4,550 6 4,000 5 4,040 4 4,5
Slide 62: CAPEX [acquisition basis]
CAPEX [acquisition basis] <BB> ¾ CAPEX compressed and decreased from original planned amount (-4.3bn JPY). <bn JPY> CAPEX and Depreciation & Amortization CAPEX 50 47.6 (quarterly trend) (yearly trend) 25 40 20 CAPEX Depreciation & amortization 30 15 22.1 21.2 20 10 14.5 (Ref.) 14.4 orig. plan 6.9 6.
Slide 63: Fixed-line Telecommunications
Operation Fixed-line Telecommunications 63
Slide 64: Operating Income, EBITDA
Operating Income, EBITDA <Fixed> ¾ Sustain trend of profit increase through enhancement of corporate <bn JPY> lines and efficient management. Operating Income/Loss EBITDA 20 18.9 75 64.3 15 7.6 18.7 50 47.9 SOFTBANK IDC impact 10 Q2:+JPY +0.6bn 42.5 Q1-2 (cumulative): JPY +1.1bn 5.7 7.8 13.0 10.7 17
Slide 65: Number of Lines and ARPU for OTOKU Line
Number of Lines and ARPU for OTOKU Line <Fixed> ¾ Stead number of lines and ARPU due to enhancement of corporate lines. <k lines> <JPY> Number of Lines ARPU Corporate lines: 1,320 12,000 1,800 Corporate lines ratio: 80% Large corp. Total Heisei Denden 1,650 Large corp. 1,600 SME (SBTP) 1,500 10,000
Slide 66: CAPEX [acquisition basis]
CAPEX [acquisition basis] <Fixed> ¾ CAPEX for network increased (-4.6bn JPY). <bn JPY> CAPEX and Depreciation & Amortization 150 CAPEX 40 (quarterly trend) (yearly trend) CAPEX 30 Depreciation & amortization 100 82.6 20 50 9.6 9.4 9.4 9.4 9.2 9.2 9.1 9.1 8.9 8.8 37.6 (Changed plan) 10 29.5 22.6 (Ref
Slide 67: Mobile Communications
Operation Mobile Communications 67
Slide 68: SBM Consolidated Net Sales
SBM Consolidated Net Sales <Mobile> ¾ Both telecom service revenue and handset sales revenue increased YoY. SBM Consolidated Net Sales SBM Consolidated Net Sales (Yearly Comparison) (Quarterly Comparison) <bn JPY> Telecom service income Sales of mobile handsets and accessories 1,017.1 1,031.1 Teleco
Slide 69: Operating Income
Operating Income (SB consolidated, SBM consolidated) <Mobile> ¾ Increase in profit by approx. 50% by increase of sales and efficient management led the consolidated results. <bn JPY> SB Consolidated SBM Consolidated <bn JPY> 200 Mobile Communications Segment (YoY) 200 (YoY) 189.3 (Apr-Sep) 174.5 171
Slide 70: EBITDA (SB consolidated, SBM consolidated)
EBITDA (SB consolidated, SBM consolidated) <Mobile> ¾ Favorable trend sustained by sales increase and efficient management. <bn JPY> SB Consolidated Mobile Communications Segment SBM Consolidated (YoY) (YoY) 403.8 (Apr-Sep) (Apr-Sep) 400 385.4 397.2 400 376.9 350.0 321.4 80.6 100.0 98.5 78.2 +48.8 Q
Slide 71: Quarterly Net Additions
Quarterly Net Additions <Mobile> ¾ Continued steady growth in net additions. <k subs> 1,000 973 No.1 in net addition share for 10 consecutive quarters* 800 633 612 600 561 531 526 521 412 400 367 361 FY09/Q2 net additions 323 190 361k 200 125 93 67 25 30 <Breakdown> 0 Postpaid +395k Prepaid -34k -74
Slide 72: Trend of Total Subscribers and 3G Subscribers
Trend of Total Subscribers and 3G Subscribers <Mobile> ¾ Number of total subscribers growing steadily. 3G ratio increased to 94.9%. <mil subs> 21.32 20 2G 3G 19.63 Cumulative Subscribers 17.05 2009/9 21.32 mil 14.99 15.31 2006/6 15.24 mil 15 1.75 Increase +6.08 mil 4.49 10.92 16.32 20.24 10 3G Ratio
Slide 73: Churn Rate & Upgrade Rate
Churn Rate & Upgrade Rate <Mobile> ¾ Churn rate higher QoQ, YoY due to end of installment contracts. ¾ Steady trend in upgrade rate. Churn Rate Upgrade Rate Total 3G postpaid 3.0% 2.0% 2.67% 2.53% 1.50% 2.0% 1.91% 1.81% 1.42% 1.24% 1.05% 1.27% 0.98% 1.73% 1.0% 1.05% 1.07% 1.27% 0.87% 1.0% 0.76% 0.0%
Slide 74: Churn Rate Details
Churn Rate Details <Mobile> ¾ Chun rate largely varies according to type of contract, history of model changes. Churn Rate by Type of Contract Churn Rate by Model Change (FY09/Q2) (FY09/Q2) 4.0% <postpaid 3G> (details) 4.0% 3.65% (details) 3.5% 3.5% 3.0% 3.0% 2.53% 2.5% 2.5% 2.0% 2.0% 1.79% 1.5% 1.2
Slide 75: New Super Bonus Ratio and Installment Sales Receivables Balance
New Super Bonus Ratio and Installment Sales Receivables Balance <Mobile> ¾ Maintain high subscription ratio. Installment balance over peak. New Super Bonus Subscription Ratio <bn JPY> Installment Sales Receivables Balance (include Super Bonus) 600 Acquisitions installment ratio (*1) Long-term balanc
Slide 76: Cash Flow Impact from Installment Sales Receivables
Cash Flow Impact from Installment Sales Receivables <Mobile> ¾ Impact on operating CF in FY09 Q1-2 JPY 73.9bn. Impact on operating CF decreasing. <bn JPY> Impact on Operating CF (cumulative) Installment Sales Installment Increase in Impact on Receivables Sales Installment Operating <bn JPY> Balance
Slide 77: ARPU (telecom service revenue per subscription)
ARPU (telecom service revenue per subscription) <Mobile> ¾ Total ARPU in steady recovery, after bottoming in FY08/Q4. ¾ QoQ: Data ARPU growth trend increased. <JPY> 6,000 5,700 Data Basic charge + voice QoQ Comparison 5,000 4,800 Total 4,170 4,150 4,030 +120 JPY 4,000 Basic 4,320 charge 3,340 2,160
Slide 78: ARPU (telecom service revenue per subscription)
ARPU (telecom service revenue per subscription) <Mobile> ¾ Monthly Discounts impact clearly over its peak. ¾ YoY: voice ARPU continues to decrease at slower pace. Data increases by JPY 280 (approx. 16%). <JPY> (YoY comparison) Monthly Discounts 6,500 Basic charge + voice (before Monthly Discounts) 5
Slide 79: ARPU YoY Comparison
ARPU (telecom service revenue per subscription) YoY Comparison <Mobile> ¾ ARPU continues to improve YoY due to data ARPU growth <JPY> 0 -20 -150 (-0.5%) -200 (-3.6%) -400 -280 (-4.9%) -430 -600 (-9.5%) -480 (-11.1%) -630 -800 (-13.1%) <Seasonal factors> -access charge -820 -leap year -1,000 -900(-16
Slide 80: Cash Income Per Subscription (average)
Cash Income Per Subscription (average) <Mobile> ¾ Favorable trend in cash income per subscriber (incl. HS installment payments). Impact from access charge <JPY> HS installment payment 7,000 Backup Service Package, etc. leap year Voice Data 6,000 6,000 5,890 5,980 210 5,740 730 1,540 1,580 1,540 5,00
Slide 81: CAPEX [acquisition basis]
CAPEX [acquisition basis] <Mobile> ¾ Revise CAPEX plan to increase (+39.8bn JPY). <bn JPY> CAPEX and Depreciation & Amortization CAPEX (quarterly trend) (yearly trend) 400 100 CAPEX (Mobile Communications segment) Depreciation & amortization (Mobile Communications Business) 1 month (Apr 06) Referren
Slide 82: Improvement in Management Efficiency
Improvement in Management Efficiency <Mobile> ¾ Large reduction in inventory since FY07 ¾ Large improvement of allowances <bn JPY> SBM Inventory (on B/S) <bn JPY> Allowance for Doubtful Accounts of 70 Installment Receivables and Bad Debt Loss 66.0 35 (on P/L) 60 30.4 09/Q2 30 Occurred in this period
Slide 83: SBM Average Acquisition Commission per User and Gross Margin
Average Acquisition Commission per User and Gross Margin from Sales of Mobile Handsets and Accessories ¾ Large reduction in acquisition commission in FY09/Q2. <Mobile> SBM Average Acquisition Commission per <JPY> User and Gross Margin from Sales of <SBM Average Acquisition Commission per User*1 Mobi
Slide 84: Trademark and copyright notice
* 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