Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2021 Earnings Presentation
27 slides from Softbank's earnings presentation, Feb 10, 2022
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2021
Earnings Results for the Nine-month Period Ended December 31, 2021 Investor Briefing February 10, 2022 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 FY2020 FY2021 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 107.74 105.88 104.45 106.24 110.00 110.47 113.60 1 CNY 15.16 15.27 15.71 16.31 17.01 17.09 17.75 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 110.71 115.02 1 CNY 16.84
Slide 4: FY21Q3: External Environments & SBG's Initiatives
FY21Q3: External Environments & SBG’s Initiatives External environments SBG’s initiatives Tightened regulations in China Arm to start preparations for a FY22 and elsewhere public offering Continue investing in unicorns: Heightened geopolitical risks SVF2 invested $36.3B including 165 Chang
Slide 5: Accounting
Accounting
Slide 6: Consolidated Results
Consolidated Results FY20 FY21 (¥ B) Q1-Q3 Q1-Q3 Change Change % Net sales 4,138.0 4,580.8 442.8 10.7% Income before 3,361.5 1,234.7 -2,126.8 -63.3% income tax Net income (attributable to owners of the 3,055.2 392.6 -2,662.5 -87.1% parent) (Reference) Gain on investments 3,799.5 -551.8 -4,351.2 ― In
Slide 7: Change in Reportable Segments
Change in Reportable Segments • From FY21Q1, Latin America Funds, which were previously included within “Other,” are newly presented as independent reportable segments. • In FY21Q2, “SoftBank Vision Funds Segment” was renamed from “SVF1 and Other SBIA-Managed Funds Segment.” FY20 Investment SVF1 and
Slide 8: Subsequent Event: Termination of Agreement on Sale of All Shares in Arm
Subsequent Event: Termination of Agreement on Sale of All Shares in Arm - Accounting Treatment • Sep 2020: Agreed on a sale of all Arm shares to NVIDIA • Feb 2022: Terminated the sale agreement – $2.0B cash received in Sep 2020 $1.25B: SBGC received as a deposit* -> Recognize as profit in the FY21
Slide 9: Segment Income – Investment Business of Holding Companies
Segment Income – Investment Business of Holding Companies (¥ B) P/L item FY20 FY21 Items Q1-Q3 Q1-Q3 Gain on investments at Investment Business 846.5 15.8 of Holding Companies Gain relating to settlement of prepaid forward Gain relating to settlement of prepaid forward contracts using Alibaba shares
Slide 10: Partial Sale of T-Mobile Shares in September 2021
Partial Sale of T-Mobile Shares in September 2021 Number of shares held Procured Execution T-Mobile Deutsche Transaction amount timing shares Telekom shares ($ B) (millions) (millions) Borrowings made using 106.3 million T-Mobile shares pledged as a 4.38 Jul 2020 collateral (margin loan) Number of s
Slide 11: T-Mobile Shares – The Company's Holding & Fair Values
T-Mobile Shares – The Company’s Holding (incl. Deutsche Telekom’s Unexercised Call Options) & Fair Values T-Mobile shares held by the FY20 FY21 Company as of FY21Q3-end: Jun 26 Q4-end Q1-end Q2-end Q3-end 60.92 million shares ((i)+(ii) below) $144.83 (i) Unexercised portion of call T-Mobile share pr
Slide 12: Deutsche Telekom Shares – The Company's Holding & Fair Values
Deutsche Telekom Shares – The Company’s Holding & Fair Values In September 2021, FY21 the Company acquired Execution in Sep Q2-end Q3-end 225 million Deutsche Telekom shares in return for the sale of Deutsche Telekom share price €17.67 T-Mobile shares. €17.40 €16.30 Fair value ($ M) 4,665 4,537 4,17
Slide 13: T-Mobile Shares – Fair Values of Contingent Consideration
T-Mobile Shares – Fair Values of Contingent Consideration $144.83 • Contingent consideration: The Company’s right to $134.85 $125.29 $127.76 acquire 48.75 million T-Mobile shares for no $115.98 T-Mobile share price $114.36 additional consideration if $104.15 certain conditions are met • Conditions:
Slide 14: Investment in Listed Stocks and Other Instruments: 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) (¥ B) Consolidated B/S Consolidated P/L Consolidated B/S Consolidated P/L Cumulative gain (loss) Investor Investment type (Minuses show amount recorded account liabilities) account since incept
Slide 15: Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts
Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts (Quarterly Trend) Alibaba share price (Impact on P/L) Amendment of contracts $226.73 $226.78 FY21 (¥ B) Q1-Q3 $148.05 Income before 1,058.2 Amendment income tax ($9.5B) Signing of contracts $118.79 Net income 684.9 ($6.1B) Day 1 gain on 63.
Slide 16: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (¥ B) FY20 FY21 Gain on investments at Investment Business of Holding Companies: P/L item Change Q1-Q3 Q1-Q3 +¥16.0B (See page 5 for details.) Continuing operations • Gain related to settlement of prepaid forward contracts using Alibaba shares: Net sales +4,138.0 +4,
Slide 17: Consolidated B/S Summary (IFRSs) – Assets
Consolidated B/S Summary (IFRSs) – 1 (¥ B) B/S As of As of Main items Change item Mar 2021 Dec 2021 1 10,820.2 9,588.3 -1,231.9 Current assets related to investments from SB Northstar A: Decrease primarily due to sale of listed stocks Cash and cash equivalents 4,662.7 4,618.8 -44.0 B: Decrease due t
Slide 18: Consolidated B/S (Main Investments)
Investment Securities on Consolidated B/S (Main Investments) (¥ B) As of As of Change Outline Mar 2021 Dec 2021 Investment securities 3,706.8 3,871.7 +164.9 FVTPL 3,187.6 3,378.0 +190.4 • New and follow-on investments and increase in fair values of investments Latin America Funds 441.0 976.7 +535.7
Slide 19: Consolidated B/S Summary (IFRSs) – Liabilities
Consolidated B/S Summary (IFRSs) – 2 (¥ B) B/S As of As of Main items Change item Mar 2021 Dec 2021 1 12,891.0 11,956.6 -934.4 SB Northstar: Borrowings (current) -¥1,591.2B 1 Decrease in short-term borrowings of ¥935.7B and repayment of $6.0B margin Interest-bearing debt 7,735.2 7,262.3 -472.9 loans
Slide 20: Consolidated B/S Summary (IFRSs) – Equity
Consolidated B/S Summary (IFRSs) – 3 (¥ B) B/S As of As of Items Change item Mar 2021 Dec 2021 11,955.6 12,846.1 +890.5 Common stock 238.8 238.8 ― 1 • Net income attributable to owners of the parent: +¥392.6B • Decreased following the retirement of treasury stock: -¥2,475.8B Capital surplus 2,618.5
Slide 21: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (¥ B) FY20 FY21 C/F item Change Primary details for FY21Q1-Q3 C/F from operating activities: +¥2,482.0B yoy Q1-Q3 Q1-Q3 • Sale of investments, etc. by SB Northstar: +¥1,907.4B (cash inflows) Subtotal of cash flows from C/F from 3,224.7 • Increase in income taxes paid
Slide 22: Segment Income – SoftBank Vision Funds
Segment Income – SoftBank Vision Funds (¥ B) FY20 FY21 P/L Q1-Q3 Q1-Q3 FY21 Items Gain (loss) on investments at SVF1, SVF2, and others 2,767.3 -579.7 SVF1: +¥1,016.7B (net) Entire sale of shares in 1 portfolio company and a partial sale of shares in 14 Realized gain on investments 205.3 1,127.6 port
Slide 23: Co-investment Program to SVF2: Related Party Transaction
Co-investment Program to SVF2: Related Party Transaction Masayoshi SBG Son* 1 Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $2,923M 100% (Return of capital) (1) Acquisition costs: $2,594M (committed capital: $2.6B) (2) Adjustments etc.: $329M Equity interests: 82.75
Slide 24: Appendix
Appendix
Slide 25: Investment in WeWork
Investment in WeWork • In August 2021, SBG transferred SBWW, a wholly owned subsidiary that holds WeWork common stock and preferred stock, to SVF2 in accordance with the policy for handling the investment portfolio. • On October 21, 2021, WeWork listed on NYSE thorough a merger with a SPAC, BowX Acq
Slide 26: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (¥ B) Change B/S As of As of Main items Changes in Outline Item Mar 2021 Dec 2021 Amorti- exchange Others zation rate 4,684.4 4,720.9 * Arm 2,621.6 2,723.6 ― +102.1 ― Goodwill SBKK 907.5 907.5 ― ― ― Increased due to the revision of the provisional LINE 627.9
Slide 27: T-Mobile Shares – Partial Exercise of Call Options by Deutsche Telekom
T-Mobile Shares – Partial Exercise of Call Options by Deutsche Telekom & Loss on Partial Sale of T-Mobile Shares Related to the Exercise • In September 2021, Deutsche FY20 FY21 Telekom partially exercised its call Jun 26 Q4-end Q1-end execution in Sep options. $144.83 (Breakdown of the exercised cal