Softbank Group Corp. · TSE:9984
Softbank — H1 FY2018 Earnings Presentation
92 slides from Softbank's earnings presentation, Nov 7, 2018
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2018
v.1.1 Earnings Results for the Six-month Period Ended September 30, 2018 Investor Briefing November 7, 2018 SoftBank Group Corp.
Slide 2: Legal Disclaimer for SoftBank Presentation
LEGAL DISCLAIMER for SoftBank Presentation This presentation (this “Presentation”) is furnished to you as an investor in SoftBank Group Corp. (“SoftBank”) and is not, and may not be relied on in any manner as, legal, tax, investment, accounting or other advice or as an offer to sell or a solicitatio
Slide 3: SoftBank Group Corp. Disclaimer for Investor Briefing
SoftBank Group Corp. Disclaimer for Investor Briefing This confidential presentation (this “Presentation”) is furnished to you for informational purposes solely to provide a summary of SoftBank Group Corp.’s (together with its subsidiaries, “SoftBank”) accounting and business practices with respect
Slide 4: 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 5: Accounting
Accounting 5
Slide 6: Segments and Core Companies
Segments and Core Companies FY17 FY18 Reportable segments Core companies Reportable segments Core companies Domestic SoftBank SoftBank Wireless City Planning SoftBank Wireless City Planning Telecommunications SoftBank Commerce & Service Sprint Sprint Sprint Sprint Yahoo Japan Yahoo Japan Yahoo Japan
Slide 7: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) 1. Operating income: JPY 1.4 tn SoftBank Vision Fund: realized gain of JPY 146.7 bn on the sale of Flipkart shares, valuation gain of JPY 503.8 bn due to an increase in the fair values of investments 2. Derivative gain of JPY 42.4 bn: derivative gain relating to coll
Slide 8: Consolidated B/S Summary (IFRSs) - Non-current assets
Consolidated B/S Summary (IFRSs) - 1 1. Balance of investments from SoftBank Vision Fund and Delta Fund of JPY 3.7 tn: new investments and increase in fair values of investments 2. Balance of investment outside the Fund (investment securities) of JPY 3.1 tn: new investment in GM Cruise and increase
Slide 9: 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 Primary changes item Mar 2018 Sep 2018 6,728.8 9,143.1 +2,414.3 Short-term borrowings 957.6 1,179.5 +221.9 SBG 771.3 1,052.7 +281.4 Current portion of long-term borrowings 1,093.7 1,389.9 +296.2 SoftBank Vision Fund 313.
Slide 10: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 1. Increase in retained earnings: ‒ Net income attributable to owners of the parent: JPY 840.1 bn ‒ Cumulative impact of adopting the new standards (IFRS 9 & IFRS 15) of JPY 300.6 bn: recognized as adjustments to the opening balance (positive impact) of retained
Slide 11: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) 1. SoftBank Vision Fund: acquisition of investments of JPY 362.3 bn and proceeds from sale of Flipkart shares of JPY 421.9 bn 2. Acquisition of Company investments outside of SoftBank Vision Fund of JPY 408.8 bn: GM Cruise and others 3. Reorganizing debts of SoftBank
Slide 12: Investments of SoftBank Vision Fund and Delta Fund
Investments of SoftBank Vision Fund and Delta Fund (as of September 30, 2018) SoftBank Vision Fund Acquisition cost: USD 28.1 bn, Fair value: USD 35.8 bn (Excluding investments sold) Semiconductors On-demand economy Enterprise, media, and Arm Full Truck Alliance advertising NVIDIA Loggi ByteDance Op
Slide 13: Valuation Process for Investments at SoftBank Vision Fund
Valuation Process for Investments at SoftBank Vision Fund Listed Unlisted companies companies 6 - 12 mos. after Yes Quoted initial investment Quarterly valuation market price No Measurement by SBIA* team Significant changes Gather information on • Financial / non-financial info. Yes (performance/mar
Slide 14: SoftBank Vision Fund - Distribution waterfall related to realized gain (illustrative)
SoftBank Vision Fund - Distribution waterfall related to realized gain (illustrative) (Sales value – acquisition cost) Op. expenses Fixed distribution Third-party Performance- Management interests based distribution fee (A) (B) Contribution Third-party to SBG's net （A)＋(B)＋(C)＋(D) interests income T
Slide 15: SoftBank Vision Fund - Gain/Loss on Investments in P/L
SoftBank Vision Fund - Gain/Loss on Investments in P/L (Bridge Investments and Other Investments) Bridge Investments that were acquired by the Company on the premise of offering to SoftBank Vision Fund and that were in accordance with the investment eligibility criteria of the Fund at the time of ac
Slide 16: SoftBank Vision Fund - Gain/Loss on Investments in P/L (Coupang, OYO)
SoftBank Vision Fund - Gain/Loss on Investments in P/L (Other Investments: Coupang, OYO) 1. Coupang Fair value Acquisition cost for held at SVF the Company Operating income from Acquisition cost for SVF Valuation SoftBank Vision Fund gain at SVF and Delta Fund The Company acquired June 30 The Compan
Slide 17: Income and Loss Arising from the SoftBank Vision Fund and Delta Fund
Income and Loss Arising from the SoftBank Vision Fund and Delta Fund included in P/L Income and loss arising from the SoftBank Vision Fund and Delta Fund included in income before income tax in P/L are calculated by aggregating income and loss arising from SoftBank Vision Fund and Delta Fund, income
Slide 18: Income on Equity Method Investments Related to Alibaba
Income on Equity Method Investments Related to Alibaba Alibaba SoftBank Group US GAAP IFRSs (CNY mil) (JPY bn) Net income Income on equity Reconciliation Income on equity attributable to Net income Ownership method Exchange rate method investments Alibaba to IFRSs investments FY17Q1 10,647 -8,568 *1
Slide 19: Derivative Gain and Loss Relating to Variable Prepaid Forward Contract for Alibaba Shares
Derivative Gain and Loss Relating to Variable Prepaid Forward Contract for Alibaba Shares (if settled by Alibaba shares) $184 $173 $165 Total gain to be $142 recorded at time of Alibaba share $108 settlement in June 2019 price $77 (+ USD 10.3 bn) Cumulative increase +USD 10.3 bn USD Derivative asset
Slide 20: Appendix
Appendix 20
Slide 21: Outline of Funds in SoftBank Vision Fund and Delta Fund
Outline of Funds in SoftBank Vision Fund and Delta Fund As of September 30, 2018 SoftBank Vision Fund Delta Fund Major limited partnership SoftBank Vision Fund L. P. SB Delta Fund (Jersey) L. P. Total committed capital USD 91.7 bn *1 *2 USD 6.0 bn *2 SBG: USD 28.1 bn *3 SBG: USD 4.4 bn Third-party i
Slide 22: Capital Deployment of SoftBank Vision Fund and Delta Fund
Capital Deployment of SoftBank Vision Fund and Delta Fund (USD bn) As of September 30, 2018 Total The Company Third-party investors Committed capital SoftBank Vision Fund 91.7 *1 28.1 *2 63.6 *1 Delta Fund 6.0 *1 4.4 1.6 *1 Contribution from limited partners *3 SoftBank Vision Fund 23.8 7.2 16.6 Del
Slide 23: Investments of SoftBank Vision Fund and Delta Fund
Investments of SoftBank Vision Fund and Delta Fund (USD bn) Acquisition As of September 30, 2018 Fair value cost SoftBank Vision Fund 28.1 35.8 Investments acquired Delta Fund 5.0 5.0 Investments agreed to be transferred 0.2 0.2 from the Company Total 33.3 41.0 Excluding consolidated subsidiaries -8
Slide 24: Third-party interests in SoftBank Vision Fund and Delta Fund
Third-party interests in SoftBank Vision Fund and Delta Fund (Reference) Links with the consolidated F/S Third-Party Interests in SoftBank Vision Fund and Delta Fund P/L C/F (JPY bn) (Total of current liability and non- current liabilities) As of April 1, 2018 1,844.7 (JPY bn) Contributions from thi
Slide 25: Breakdown of Goodwill / Intangible Assets
(Reference) Breakdown of Goodwill / Intangible Assets (JPY bn) B/S As of As of Change Main items Changes in Outline item Mar 2018 Sep 2018 Amortization Others exchange rate 4,302.6 4,407.7 - +19.3 +85.8 Goodwill Arm 2,851.4 2,845.5 - -5.9 - SoftBank 907.5 907.5 - - - Sprint 312.8 334.4 - +21.6 FCC l
Slide 26: Adoption of IFRS 9 and IFRS 15 -1
Adoption of IFRS 9 and IFRS 15 -1 IFRS 9 (Financial Instruments) IFRS 15 (Revenue from Contracts with Customers) Primary changes in accounting treatment: Primary changes in accounting treatment: Recognition of changes in fair values of investment securities (1) Customer acquisition costs (SB/Sprint)
Slide 27: Adoption of IFRS 9 and IFRS 15 -2
Adoption of IFRS 9 and IFRS 15 -2 Impact of adopting new standards on P/L: Net sales: + JPY 39.5 bn, operating income: + JPY 76.0 bn Net sales Operating Income (JPY bn) (JPY bn) Impact of adopting Impact of adopting new standards 1,420.7 new standards 4,614.4 4,653.9 1,344.7 +39.5 +76.0 4,411.1 874.
Slide 28: Finance
Finance 28
Slide 29: Main Activities in FY2018 (Investments and Fundings)
Main Activities in FY2018 (Investments and Fundings) Event Amount Timing Accumulated invested amount: USD 35.5 bn*1 Invest- By Sep Investments made by SoftBank Vision Fund and Delta Fund ment (Ref.) Total committed capital: USD 97.7 bn 2018 (incl. capital committed by SBG: USD 32.5bn*2) Restructurin
Slide 30: Listing of SoftBank Corp.
KK Listing of SoftBank Corp. • SBG to secure multiple ways of financings • Shareholder value of SBKK to be apparent 30
Slide 31: Adjusted EBITDA and Adjusted EBITDA Margin (1)
Adjusted EBITDA and Adjusted EBITDA Margin (1) Consolidated adjusted EBITDA has been stable. Adjusted EBITDA Adjusted EBITDA Margin (JPY bn) Others SoftBank Seg. Yahoo Seg. Sprint Seg. Consoliated SoftBank Seg. Yahoo Seg. Sprint Seg. 1,583.3 1,390.5 * 39% 40% * 37% 727.2 35% 34% 629.0 32% 25% 100.2
Slide 32: Adjusted EBITDA and Adjusted EBITDA Margin (2)
Adjusted EBITDA and Adjusted EBITDA Margin (2) SoftBank segment has sustained high margin. Adjusted EBITDA Adjusted EBITDA margin (SoftBank segment) (JPY bn) SoftBank * Segment 669.7 672.7 39.2% * 37.4% NTT DOCOMO 35.8% 35.0% KDDI 34.2% 34.4% 34.0% 31.5% SoftBank Group (Consolidated) *The margin for
Slide 33: Interest-bearing Debt (by Sprint / source of funding)
Interest-bearing Debt (by Sprint / source of funding) *1 Major changes Increased due to forex rate change Sprint segment 4,616.4 from Jun 2018 and new borrowings Borrowings 1,624.9 +54.3 (forex) Bonds 2,963.1 +76.6 (forex) (JPY bn) Other 28.4 16,610.2 15,855.4 16,014.9 Lease Obligation etc. 1,241.6
Slide 34: Interest-bearing Debt (by entity)
Interest-bearing Debt (by entity) (JPY bn) Major changes Sprint*1 4,616.4 from Jun 2018 Borrowings 1,624.9 +54.3 (forex) (JPY bn) Bonds 2,963.1 +76.6 (forex) 16,610.2 15,855.4 16,014.9 Others 28.4 SoftBank segment*1 3,376.2 Sprint segment SBKK debt 4,616.4 SoftBank segment 4,343.9 4,486.7 ($40,675mn
Slide 35: Cash Position
Cash Position Maintaining high level of cash Excludes cash position of JPY 115.9 bn at SoftBank Vision Fund and Delta Fund and JPY 360.7 bn at 4,961.0 The Japan Net Bank, respectively as of Sep 18. (JPY bn) After considering transfer of bridge investments and other investments 1,738.1 3,414.3 3,177.
Slide 36: Net Interest-bearing Debt
Net Interest-bearing Debt No significant change from FY18Q1 Excludes net interest-bearing debt of (JPY bn) JPY520.0 bn at SoftBank Vision Fund and Delta Fund and JPY378.0 bn at the Japan 13,114.2 13,387.3 Net Bank, respectively as of Sep 18. 12,650.4 -1,738.1 11,239.4 11,525.2 Rest of the Group (exc
Slide 37: Debt Restructuring for Listing of SoftBank Corp.
Debt Restructuring for Listing of SoftBank Corp. Restructuring of senior loan for listing of SoftBank Corp. Guarantees to SBG debts to be released following the approval by the Tokyo Stock Exchange on the listing of SoftBank Corp. shares. SoftBank Corp. SBG Repaid inter-company loan Senior loan New
Slide 38: Leverage Ratio and Investment Asset Value (LTV)
Leverage Ratio and Investment Asset Value (LTV) Leverage Ratio Investment Asset Value (LTV) Holding Company SoftBank Segment (Other Businesses) <Equity holdings> KK etc. Net interest- Net interest- JPY 3.07 tn JPY 5.21 tn bearing debt bearing debt Adjusted = 2.6x Equity value of = 25.9% JPY 1.20 tn
Slide 39: Supplemental (1) Basic Concept
Supplemental (1) Basic Concept Consolidated net interest-bearing debt Major SoftBank consolidated Segment Holding Company subsidiaries Sprint, Yahoo, SoftBank Vision Fund, etc. LTV Net interest- (Net interest- Self-controlled bearing debt/ bearing debt/ finance EBITDA Equity value of shareholdings)
Slide 40: Supplemental (2) Calculation of Leverage Ratio
Supplemental (2) Calculation of Leverage Ratio SoftBank Segment (a) Net interest- JPY 3.07 tn bearing debt KK = 2.6x Adjusted EBITDA JPY 1.20 tn (JPY tn) Interest-bearing debt 3.38 Bank loan 1.52 Securitization of receivables 0.63 Lease obligation etc. 1.23 Cash position 0.31 SoftBank segment Net in
Slide 41: Supplemental (3) Calculation of Investment Asset Value (LTV)
Supplemental (3) Calculation of Investment Asset Value （LTV） Holding Company (b) Net interest- JPY 5.21 tn (Other Businesses) bearing debt <Equity Holdings> (c) Equity value of = 25.9% JPY 20.08 tn 31.6% shareholdings Before considering transfer etc. of bridge investments and other investments (JPY
Slide 42: Market Cap: Major Listed Shareholdings of SBG and Its Wholly-owned Subsidiaries
Market Cap: Major Listed Shareholdings of SBG and Its Wholly-owned Subsidiaries Market value of listed shareholdings amounted to JPY 14.6 tn. (JPY tn) 15.9 14.6 12.6 11.3 Partial 9.7 monetization 12.9 (Alibaba) 8.1 11.3 Alibaba 8.0 7.1 Sprint 4.6 Yahoo Japan Others 1.3 Mar'13 Mar'14 Mar'15 Mar'16 Ma
Slide 43: Net Leverage Ratio (Consolidated)
Net Leverage Ratio (Consolidated) 6.2x (immediately after Vodafone K.K. acquisition) 5.0x 4.2x 4.3x After considering transfer of bridge investments and other investments 1.1x Jun '06 Mar '07 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13 Mar '14 Mar '15 Mar '16 Mar '17 Mar '18 Sep '18 * Net levera
Slide 44: Shareholders' Equity Ratio
Shareholders’ Equity Ratio Consistently improved Shareholders’ equity *1 Shareholders’ equity ratio (JPY bn) Ratio of effective Effective shareholders’ equity*2 273.1 shareholders’ equity*2 19.6% 273.0 18.5% 18.8% 17.6% 6,345.0 5,689.8 Jun '18 Sep '18 Jun '18 Sep '18 *1 Shareholders’ equity = equity
Slide 45: Debt / Equity Ratio
Debt / Equity Ratio Debt / equity ratio (gross / net) 2.8x 2.6x (Gross) 2.3x 2.1x (Net) 2.0x (Net) 1.8x (Net) After considering transfer of bridge investments and other investments Jun'18 Sep'18 * Debt / equity ratio = interest-bearing debt / equity attributable to owners of the parent (shareholders
Slide 46: Interest Expense
Interest Expense Increased due to one-off cost for early repayment of senior loan and issuance of foreign currency-denominated senior notes and margin loan. Interest expense (finance cost)*1 Interest coverage ratio*2 (JPY bn) RestSprint Excl. of the Consolidated Excl. Rest Sprint of the Sprint segme
Slide 47: Capital Commitment to SoftBank Vision Fund
Capital Commitment to SoftBank Vision Fund <Capital Commitment (as of Sep. 30, 2018)> Numbers in brackets represent amounts contributed SoftBank Vision Fund 91.7 *1 (26.3) （USD bn） 28.1 *2 （8.0）*3 SBG 63.6 *1 （18.3）*3 Public Investment Fund (PIF), Mubadala, Apple, Third-party LP Foxconn, Qualcomm, S
Slide 48: Main Investment Portfolio of SoftBank Vision Fund companies
Main Investment Portfolio of SoftBank Vision Fund 67 companies (as of November 5, 2018) Ping An HealthKonnect (Full Truck Alliance) ＋ Pipeline, etc (Ping An Good Doctor) The investments presented herein are solely for illustrative purposes and are not a complete list of investments held by SoftBank
Slide 49: SBG: Price and Spread of JPY Notes
SBG: Price and Spread of JPY Notes Price Spread Z-spread, bps 106 450 Sub 2022 #2 2026 #50 Hyb 2021 #1 Hyb 2023 #2 Sub 2022 #2 2026 #50 Hyb 2021 #1 Hyb 2023 #2 105 400 104 350 103 300 102 250 101 200 100 150 99 100 98 50 16/4 16/7 16/10 17/1 17/4 17/7 17/10 18/1 18/4 18/7 18/10 16/4 16/7 16/10 17/1
Slide 50: SBG: Price and Spread of Foreign Currency Notes
SBG: Price and Spread of Foreign Currency Notes Price (USD denominated notes) Spread (USD denominated notes) 115 Z-spread, bps 2022 USD 2025 USD Hyb 2027 USD 2027 USD 600 2028 USD 2023 USD 2025 USD 110 500 105 400 100 300 95 90 200 2022 USD 2025 USD Hyb 2027 USD 2027 USD 2028 USD 2023 USD 2025 USD 8
Slide 51: Sprint: Price and Spread
Sprint: Price and Spread Sprint senior notes price Sprint senior notes spread Z-spread, bps 120 1400 2024 USD 2024 USD 115 2021 USD 2021 USD 2025 USD 1200 2025 USD 110 2028 USD 2028 USD 2026 USD 2026 USD 105 1000 100 800 95 600 90 85 400 80 200 75 70 0 16/4 16/7 16/10 17/1 17/4 17/7 17/10 18/1 18/4
Slide 52: FY2018 Finance Strategy
FY2018 Finance Strategy • Pursue optimal leverage as a strategic holding company Our Aim • Well-protected financial management to be invulnerable for any environmental change - Leverage index: Manage LTV lower than around 35% Safety design - Cash position: Maintain a liquidity level that covers rede
Slide 53: Expected Financial Management (illustrative)
Expected Financial Management (illustrative) • Seek to maximize enterprise value by maintaining optimal leverage through appropriate LTV management • LTV expected to improve for mid-to long-term along with increases in investment asset value Investment asset value 35% LTV % Net debt Time 53
Slide 54: Reference
Reference SoftBank 54
Slide 55: SBG Credit Rating Trend
SBG Credit Rating Trend Acquisition of Acquisition of Acquisition of Acquisition of Japan Telecom Vodafone K.K. Sprint Arm 14 13 A/A2 JCR (A－) 12 A－/A3 11 BBB+/Baa1 10 BBB/Baa2 9 BBB－/Baa3 S&P (BB＋) Outlook: Negative 8 BB+/Ba1 7 BB/Ba2 Moody’s (Ba1) 6 BB－/Ba3 5 B+/B1 4 2003 2004 2005 2006 2007 2008
Slide 56: SBG Bond Redemption Schedule
SBG Bond Redemption Schedule (JPY bn) Domestic straight bonds 1,305.6 Domestic subordinated bonds Domestic hybrid bonds*1 Foreign currency-denominated senior notes*2 455.6 962.5 Foreign currency-denominated hybrid notes*1 *2 312.3 700.0 598.8 510.4 164.8 487.7 148.8 15.4 447.6 850.0 140.4 700.0 198.
Slide 57: Sprint's Debt Maturities
Sprint’s Debt Maturities （USD mil） Sprint’s Debt 8,903 5,238 4,895 4,893 4,153 2,852 2,525 2,475 1,868 2,000 367 366 ~ FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY31 * The balance as of the end of September 2018. * Created by SBG based on Sprint’s earnings results material 57
Slide 58: 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 16,610.2 16,610.2 16,014.9 16,014.9 18％ 22％ 29％ 30％ 11,993.8 11,993.8 25％ 34% 82％ 78％ 71％ 70
Slide 59: SoftBank
SoftBank 1. H1 Results 2. Important Topics (Price Plans, New Businesses) 59
Slide 60: Presentation of YoY Analysis at SoftBank Segment
Presentation of YoY Analysis at SoftBank Segment <SoftBank Segment> In the following presentation, new standards (IFRS 9 and IFRS 15) adopted since FY18 are hypothetically applied to FY17 for comparison and referential purposes YoY analysis in this presentation will be based on ① difference at F
Slide 61: 1-1. Net Sales
1-1. Net Sales <SoftBank Segment> FY18H1 sales were JPY1,795.1 bn, ②: +108.6 bn (+6.4%) YoY Strong growth in consumer sales driven by product sales and broadband; steady growth in mobile communications Breakdown by business sections Consumer breakdown ①Accounting factor ②Business factor YoY chan
Slide 62: 1-2. Operating Income / Adjusted EBITDA
1-2. Operating Income / Adjusted EBITDA <SoftBank Segment> FY18H1 segment income was JPY 446.9 bn, ②: +38.7 bn (+9.5%) YoY Operating income / Segment income Adjusted EBITDA* ①Accounting factor ②Business factor ①Accounting factor ②Business factor <JPY bn> <JPY bn> 800 684.7 690.0 1,199.7 1,205.0 1,
Slide 63: 1-3. Segment Income YoY Analysis
1-3. Segment Income YoY Analysis <SoftBank Segment> Topline growth in all business sections Increase in cost of products due to smartphone unit price increase Successfully reduced cost mainly in sales-related expenses <JPY bn> Mobile +10.1 Distribution +28.4 Broadband +22.8 Enterprise + 7.6 60
Slide 64: 1-4. Mobile Subscribers and Churn Rate
1-4. Mobile Subscribers and Churn Rate (main subscribers) <SoftBank Segment> Subscribers: main subs increased 778K YoY due to steady smartphone net adds Record low churn rate: churn rate improved YoY by 0.08pp for main subs and 0.03pp for handsets Cumulative subscribers* Churn rate YoY change Yo
Slide 65: 1-5. ARPU (main subscribers)
1-5. ARPU (main subscribers) <SoftBank Segment> Q2 total ARPU decreased by JPY 40 YoY: Dilutive impact of Y!mobile and LINE MOBILE smartphones drove down ARPU Discount on ARPU improved due to decrease of monthly discounts <JPY> YoY Change ARPU before 6,000 5,620 5,470 5,450 ① -160 discount 4,000
Slide 66: 1-6. Developments in Broadband
1-6. Developments in Broadband <SoftBank Segment> 5.50 mil SoftBank Hikari*1 subs at FY18Q2-end; steady new acquisitions 8.82 mil subs to Home Bundle Discount Hikari Set Cumulative subscribers Home Bundle Discount Hikari Set (number of connected lines) cumulative subscribers <Mil> YoY change <Mi
Slide 67: 1-7. Capex / Adjusted Free Cash Flow
1-7. Capex / Adjusted Free Cash Flow <SoftBank Segment> FY18H1 capex was JPY 168.5 bn*1 with expansion of LTE service area and improvement of network quality Adjusted FCF on track for over JPY 500 bn in FY18 (excluding impact from purchase of YJ shares) Capex*1 Adjusted free cash flow*3 <JPY bn>
Slide 68: 2-1. Multi-Brand Strategy
2-1. Multi-Brand Strategy <SoftBank Segment> Large capacity data plans Low price + Requires more data for stress-free use Light Users Address various needs 68
Slide 69: 2-2. Multi-Brand Strategy ~SoftBank~
2-2. Multi-Brand Strategy ~SoftBank~ <SoftBank Segment> Handset Cost and Service Fee Target/Price Attractive Data Price Separation Plan Ultra GIGA MONSTER Plus Unlimited streaming & SNS plan Unlimited streaming & SNS plan Large capacity data plans Ultra GIGA MONSTER Plus MINI MONSTER ULTRA ULTRA Whi
Slide 70: 2-3. Multi-Brand Strategy ~Y!mobile~
2-3. Multi-Brand Strategy ~Y!mobile~ <SoftBank Segment> Low-cost Smartphone Handset Cost and Service Fee Target/Price Market Share*3 Separation Plan Low price Smartphone plan L Smartphone plan M To be launched next FY Smartphone plan S Light Users *1 No. 1 Meet JPY 1,480〜 per month Drive low-cost Cu
Slide 71: 2-4. Domestic Market of Smartphone Possession
2-4. Domestic Market of Smartphone Possession <SoftBank Segment> Continuously in growth market for Consumer & Enterprise Smartphone Possession (Consumer)*1 Smartphone Subs Ratio (Enterprise)*2 Non- Smartphones/ Non- No phones Smartphones Smartphones Smartphones (FY) (FY) *1︓(Source) Ministry of Inte
Slide 72: 2-5. Beyond Carrier Strategy
2-5. Beyond Carrier Strategy <SoftBank Segment> Expand customer base Generate new businesses Differentiation / strengthening relationship with customers Aim for continuous growth with both strategies 72
Slide 73: 2-6. Expansion of New Business Domains
2-6. Expansion of New Business Domains <SoftBank Segment> 73
Slide 74: 2-7. Structural Reformation Project
2-7. Structural Reformation Project <SoftBank Segment> “Half & Twice”: Internally used slogan, which SBKK aims to double the productivity / creativity of employees, while cutting the workload and cost to halves 74
Slide 75: 2-8. Growth Fueled by Telco and New Business
2-8. Growth Fueled by Telco and New Business <SoftBank Segment> 75
Slide 76: 3. FY2018 Forecast
3. FY2018 Forecast <SoftBank Segment> 1 Increase in revenue / profit *1 (aim to achieve increase in profit in FY19 and after) Excl. impact of TOB of YJ shares 2 Generate stable FCF (over JPY 500bn) *2 Promote “Beyond Carrier” strategy & 3 enhance collaboration with SVF 4 Preparation for listing *1 C
Slide 77: (For reference) Net Sales
(For reference) Net Sales <SoftBank Segment> （JPY bn） Reference FY17H1(Previous) FY17H1(New) FY18H1(New) YoY (New) Consumer 1,241.1 1,220.6 1,287.3 66.7 Telecom service revenue 962.2 946.4 979.3 32.9 Mobile 811.6 793.4 803.6 10.1 Broadband 150.6 153.0 175.7 22.8 Product and other sales 278.8 274.2 3
Slide 78: Definition and Calculation Method of Principal Operational Data
Definition and Calculation Method of Principal Operational Data <SoftBank Segment> i. Mobile All data on mobile communications service includes SoftBank, Y!mobile and LINE MOBILE brands. Each category includes the services as follows. Main subscribers: smartphones, feature phones, tablets, mobile da
Slide 79: Sprint
Sprint 79
Slide 80: Q2 SoftBank Investor Briefing FY 2018 Results
Q2 SoftBank Investor Briefing FY 2018 RESULTS 80
Slide 81: Cautionary Statement
Cautionary Statement SAFE HARBOR 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 82: FY2Q 2018 Highlights
FY2Q 2018 Highlights Wireless Service Adjusted EBITDA* Net Income Revenue [1] delivered for the 4th consecutive quarter GREW HIGHEST Operating Income year-over-year for fiscal second quarter the first time in in twelve years nearly five years delivered for the 11th [1] excluding the impact of the ne
Slide 83: Balancing Growth & Profitability
Balancing Growth & Profitability Postpaid Net Adds Postpaid Consumer Phone GAVA Results in Thousands (New Account Gross adds * Customer Lifetime Value) 168 123 10 9 Higher CLV offsets Lower Gross Adds Q217 Q118 Q218 Q217 Q218 delivers a superior financial 5 GROWTH consecutive quarters of outcome ove
Slide 84: Network Built For Unlimited
Network Sprint’s Network is the fastest in TURBO Built For average download speeds in Unlimited 123 CHARGING The Customer Experience cities! Analysis by Ookla of Speedtest Intelligence data average download speeds from 7/1/18 to 9/30/18 for all mobile results. 2x LTE Faster ADVANCED UP TO Tri-Band E
Slide 85: Unlimited for All
Unlimited for All Premium Extras Bundled Extras Mobile Hotspot 500MB LTE 15GB LTE 50GB LTE Video Streaming DVD-quality Streaming (480p) HD Streaming (1080p) Full HD Streaming Unlimited talk, text, 5GB Unlimited talk, text, 10GB Unlimited talk, text, and Canada/Mexico Roaming of 4G LTE data of 4G LTE
Slide 86: Digital Transformation
Digital Transformation Leveraging digital capabilities and advanced analytics and artificial intelligence to further optimize our business structure 01 02 03 Increase Digital Intelligent Customer Improve Digital Revenue Experience Engagement ©2018 Sprint. This information is subject to Sprint polici
Slide 87: Growing Revenue
Growing Revenue Wireless Service Revenue Postpaid Average Revenue per User Dollars in Billions (ARPU)* $5.7 $44.99 $5.6 $44.57 $46.0 0 $5.6 $43.55 $43.99 $5.5 $5.5 Q217 Q118 Q218 Q217 Q118 Q218 New revenue standard impact New revenue standard impact Grew year-over-year Grew sequentially First time i
Slide 88: Improving Profitability
Improving Profitability Cost of Services + SG&A Expenses Adjusted EBITDA* Dollars in Billions Dollars in Billions $3.3 $3.3 $7.4 $2.7 $3.1 $3.0 $7.2 $7.0 YTD17 YTD18 Q217 Q118 Q218 New revenue standard impact New revenue standard impact Roughly $200M year-over-year reductions [1] HIGHEST fiscal seco
Slide 89: Generating Income
Generating Income Operating Income Net Income Dollars in Billions Dollars in Millions $196 $0.8 $0.8 $176 $0.6 $0.6 $0.6 $24 $18 ($48) Q217 Q118 Q218 Q217 Q118 Q218 New revenue standard impact New revenue standard impact 11 CONSECUTIVE quarters of operating income 4 CONSECUTIVE quarters of net incom
Slide 90: Investing & Delivering FCF
Investing & Delivering FCF Cash Capex[1] Adjusted Free Cash Flow* Dollars in Billions Dollars in Millions $525 $1.3 $1.1 $420 $0.7 $8 Q217 Q118 Q218 Q217 Q118 Q218 Nearly DOUBLED year-over-year POSITIVE 6 out of last 7 quarters [1] excludes capitalized device leases ©2018 Sprint. This information is
Slide 91: Guidance
FISCAL YEAR 2018 Guidance Adjusted Cash EBITDA* Capex $12.4 billion to $5.0 billion to $12.7 billion $5.5 billion As Reported excluding leased devices $11.7B-$12.0B excluding the impact of the new revenue standard ©2018 Sprint. This information is subject to Sprint policies regarding use and is the
Slide 92: SoftBank
SoftBank