Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2014
Earnings Results for the Fiscal Year Ended March 31, 2014 May 7, 2014 SoftBank 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: 118 years
118 years (Source) National Diet Library “Ministry of Communications and Transportation” Establishment of MCT: 1885; achieved 1 trillion yen of EBIT in fiscal year ended Mar. 31, 2003 2
Slide 4: 65 years
65 years (Source) “Toyoda Model AA“ Establishment of Toyota Motor Co., Ltd.: 1937; achieved 1 trillion yen of EBIT in fiscal year ended Mar. 31, 2002 By Iwao from Tokyo, Japan [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons 3
Slide 5: 33 years
33 years 4
Slide 6: Achieved 1 trillion yen of EBIT in the shortest period
Achieved 1 trillion yen of EBIT in the shortest period 5
Slide 7: EBIT exceeded JPY 1t
EBIT JPY 1.09t (company forecast) (Operating Income) Over JPY 1t Exceeded 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) 6
Slide 8: Consolidated Results of Operations
Consolidated Results of Operations 7
Slide 9: Highlights
Highlights 1. Net sales JPY 6.7t (2x growth) 2. EBIT Over JPY 1t (36% increase) (Operating income) 3. Net income JPY 527bn (42% increase) 8
Slide 10: Record high growth at 2x
(JPY t) Net Sales 6.7t 2.6t Sprint segment Record high 3.2t 4.1t growth at 2x 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) Japanese-GAAP IFRSs 9
Slide 11: Record high for 9 consecutive periods (EBITDA)
EBITDA 1.8t (JPY t) 0.4t Sprint segment Record high for 9 consecutive 1.4t 1.2t periods 55% increase 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) Japanese-GAAP IFRSs 10
Slide 12: Record high for 9 consecutive periods (EBIT)
(JPY bn) EBIT 1.09t (Operating Income) One-time gains from making 253.9 GungHo and WILLCOM subsidiaries 799.4 831.5 Record high for 9 consecutive periods 36% increase 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) Japanese-GAAP IFRSs 11
Slide 13: Record high for 4 consecutive periods (Net income)
(JPY bn) Net Income 527.0 (Net income attributable to owners of the parent) Record high for 372.5 4 consecutive periods 42% increase 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) Japanese-GAAP IFRSs 12
Slide 14: Net Sales vs KDDI
(JPY t) Net Sales 6.7t 4.5t 4.3t KDDI No.1 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) *Created by SoftBank Corp. based on respective companies' publicly available historical information Japanese-GAAP IFRSs 13
Slide 15: EBIT vs KDDI
(JPY bn) EBIT 1.09t (Operating Income) 819.2bn 663.2bn KDDI No.1 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) *Created by SoftBank Corp. based on respective companies' publicly available historical information Japanese-GAAP IFRSs 14
Slide 16: Net Income vs KDDI
(JPY bn) Net Income 527.0 (Net income attributable to owners of the parent) 464.7 No.1 322.0 KDDI 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY) *Created by SoftBank Corp. based on respective companies' publicly available historical information Japanese-GAAP IFRSs 15
Slide 17: No.1 in all core KPIs
FY2013 Consolidated Operation Results Rank Company Net Sales EBIT Net Income (Operating Income) 1 JPY 6.7t JPY 1.09t JPY 527.0bn 2 JPY 4.5t JPY 819.2bn JPY 464.7bn 3 JPY 4.3t JPY 663.2bn JPY 322.0bn No.1 in all core KPIs *Created by SoftBank Corp. based on respective companies' publicly available in
Slide 18: Summary of Consolidated Operation Results
Summary of Consolidated Operation Results (JPY bn) FY2012 FY2013 Change YoY Net sales 3,202.5 6,666.7 3,464.2 208% EBITDA 1,152.7 1,786.8 634.1 155% EBIT 799.4 1,085.4 286.0 136% (Operating income) Net income 372.5 527.0 154.5 142% (Net income attributable to owners of the parent) 17
Slide 19: Cash Flow
Cash Flow FY2012 FY2013 (JPY bn) Operating cash flow 813.0 860.2 Free cash flow - 61.1 - 1,857.9 Cash increase/decrease from acquisition of control over subsidiaries + 12.2 - 1,663.5 (Sprint, GungHo, Supercell, etc.) Proceeds from settlement of foreign currency forward contract for acquisition - + 3
Slide 20: No change in dividend policy
Dividend per Share FY2012 FY2013 Interim dividend JPY 20 JPY 20 Year-end dividend JPY 20 JPY 20 (Plan) Annual dividend JPY 40 JPY 40 (Plan) No change in dividend policy 19
Slide 21: Domestic Business
Domestic Business 20
Slide 22: Net additions No. 1 for 4 consecutive years
Net Additions Ranking (FY) 2010 2011 2012 2013 1 2 3 Net additions No. 1 for 4 consecutive years *Created by SoftBank Corp. based on respective companies' publicly available historical information 21
Slide 23: Over 100mil subscribers in Japan & US
Subscribers Over 100mil Over 100mil in Japan & US 63.11mil 40.52mil *Created by SoftBank Corp. based on respective companies' publicly available historical information Subscribers for SoftBank Group include WILLCOM, EMOBILE and Sprint (At the end Sprint subscribers: “Total End of Period Subscribers”
Slide 24: Mobile Service Revenue: Steady growth
Mobile Service Revenue (JPY bn) 2,102.5 Steady growth ! 1,594.6 32% YoY increase * Including impact of JPY 424.4bn from newly consolidated subsidiaries from FY2013 (GungHo, eAccess, WILLCOM, Supercell) (FY) *FY2008 - 2011: Telecom service revenue of SoftBank Mobile 2008 ’09 ’10 ’11 ’12 ’13 FY2012 -
Slide 25: Mobile EBIT: Record high for 5 consecutive periods
Mobile EBIT 609.0 (JPY bn) (Mobile Operating Income) 517.1 Record high for 5 consecutive periods 18% YoY increase 76.3 * Including impact of JPY 81.7bn from newly consolidated subsidiaries from FY2013 (GungHo, eAccess, WILLCOM, Supercell, Brightstar) 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (FY)
Slide 26: Network
Network 25
Slide 27: Global No.1 average data traffic
Average Data Traffic Global per Smartphone User (GB/month) 2.9 No.1 1.2 0.3 Era of rapidly increasing 0.3 0.5 0.5 Latin mobile data traffic Middle East & East West North (Source) Cisco: VNI Mobile Forecast Highlights, 2013 – 2018 America Europe Europe America Africa Average data traffic in 2013 26
Slide 28: Who is the best in network management?
Who is the best in network management? 27
Slide 29: Smartphone Data Connectivity Rate
Smartphone Data Connectivity Rate No.1 99% 98.6% 97.4% 97.2% data connectivity 97% 95% *Statistics analyzed by Agoop Corp. Platinum band-compatible smartphone data connection: total 120,000 platinum band-compatible smartphones (40,000 for each operator) were randomly selected for analysis. In analys
Slide 30: No.1 satisfaction by third party survey
Smartphone Data Connectivity User Satisfaction 50 52 54 56 58 60 (Satisfaction score) No.1 satisfaction by third party survey (Source) Press release by ICT and Research & Consulting (Jan. 17, 2014) Survey about user satisfaction level of data communications provided by NTT DOCOMO, au and SoftBank Mo
Slide 31: No serious network incident for 1,078 days
Major incidents that must be reported to the Communications Minister (since June 2011) Date Operator Affected users No serious 2011/6/6 2011/8/16 1.5mil 1.1mil network incident 2011/11/2 2012/1/1 2012/1/25 1.1mil 2.61mil 2.52mil for 1,078 days 2012/1/25 74k 2012/2/9 up to 1.3mil (SoftBank Mobile) 20
Slide 32: Reasons behind ascent to No.1
Reasons behind ascent to No.1 31
Slide 33: Platinum-band Base Stations: Rapid deployment
Platinum-band Base Stations (900MHz) 32k Rapid deployment July 2012 Mar. 2014 32
Slide 34: LTE Base Stations: Soon to hit 100k
LTE Base Stations 94k Soon to 2.5GHz hit 100k 1.7GHz 2.1GHz *1.7GHz base stations: counting only those EMOBILE-owned base stations that are shared with SoftBank Mobile *2.5GHz base stations: counting base stations capable of AXGP, standard highly July 2012 Mar. 2014 compatible with TDD-LTE 33
Slide 35: Various initiatives
Small cell deployment Wi-Fi hot spot Leveraging Full-IP network deployment big data implementation Various initiatives 34
Slide 36: Consolidated CAPEX (Japan)
Consolidated CAPEX (Japan) (JPY bn) 779.4 eAccess 747.4 WCP CAPEX ahead 110.6 WILLCOM 668.8 of schedule 550.0 500.7 450.0 407.4 2010 ’11 ’12 ’13 ’14 ’15 (FY) (Forecast) (Forecast) *FY2012 excludes FUKUOKA YAHUOKU DOME related CAPEX *Excluding rental handsets for corporate customers acquired by SoftB
Slide 37: Internet Business
Internet Business 36
Slide 38: Yahoo Japan EBIT: Record profit
Yahoo Japan EBIT (JPY bn) (Operating Income) 197.4 186.4 Record profit 6% increase 1997 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 (FY) *Yahoo Japan Corporation’s operating income (Japanese-GAAP) 37
Slide 39: Drive growth through e-Commerce
Drive growth through e-Commerce 38
Slide 40: Wide variety of stores is key to revitalization
Wide variety of stores is key to revitalization 39
Slide 41: Beginning of virtuous cycle
October 2013 Beginning of virtuous cycle 40
Slide 42: Number of Stores: Outpaced Rakuten
Number of Stores 78k (after screening completed) Outpaced Rakuten 40k (Rakuten) (Source) Created by SoftBank Corp. based on respective companies' publicly available historical information *Number of stores: number of corporate and individual accounts issued, including the number of accounts still pr
Slide 43: Shopping Transaction Volume: Record high
Shopping Transaction Volume Record high transaction volume 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 (Q4 of each year) 42
Slide 44: YAHUOKU! Transaction Volume Growth Rate
YAHUOKU! (Auction) Transaction Volume Growth Rate 12% 9% 6% Accelerating 3% 0% growth -3% -6% -9% Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 2007 ’08 ’09 ’10 ’11 ’12 ’13 (FY) 43
Slide 45: New growth strategy: Internet carrier business will begin
New growth strategy Internet carrier business will begin 44
Slide 46: IPO process has begun
IPO process has begun 45
Slide 47: Alibaba Net Income: 4x YoY growth
Net Income JPY 351.6bn (After tax) 4x YoY growth JPY 89.0bn (Source) Created by SoftBank Corp. based on Yahoo! Inc.’s publicly available historical information USD1.00 = JPY100 2008 ’09 ’10 ’11 ’12 ’13 (CY) Net income attributable to Alibaba Group 46
Slide 48: Net Income: Outpaced major players
(JPY bn) Net Income (After tax) 400 JPY 351.6bn 300 JPY 313.0bn (Combined market cap: JPY 21t) Outpaced 200 100 major players 0 (Source) Created by SoftBank Corp. based on Yahoo! Inc.’s publicly available historical information USD1.00 = JPY100 Net income attributable to Alibaba Group amazon.com, eB
Slide 49: Transaction Volume: Outpaced major players
(JPY t) Transaction 25 Volume JPY 25 t 20 15 JPY 16t 10 Outpaced 5 major players (Source) Created by SoftBank Corp. based on respective companies' publicly available historical information and Form F-1 published by Alibaba Group Holding Limited USD1.00 = JPY 100 Amazon.com: Consolidated net sales, e
Slide 50: Puzzle & Dragons: Continued growth
Puzzle & Dragons App Downloads Over 27mil (Japan) Continued growth (Hit 6mil mark overseas) Apr. July Oct. Jan. Apr. July Oct. Jan. Apr. 2012 2013 2014 (CY) 49
Slide 51: Yet another No.1 - Hong Kong
App Store Revenue Ranking Google Play Revenue Ranking (Hong Kong) (Hong Kong) 1 Puzzle & Dragons 1 Puzzle & Dragons 2 BFB 2 BFB 3 Q 3 - 4 - 4 5 5 Q Yet another No.1 - Hong Kong (Source) App Annie Store Stats App Store Revenue Ranking: Mar. 14, 2014 Google Play Revenue Ranking: Apr. 3, 2014 50
Slide 52: GungHo EBIT: Record high
GungHo EBIT (Operating Income) JPY 28.8bn (Jan.- Mar. period each year) JPY 18.6bn Record high *GungHo Online Entertainment, Inc.’s EBIT (Japanese-GAAP) 2007 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (Jan.- Mar. period each year) 51
Slide 53: Steady ascent
Top Grossing Games on Google Play Global Ranking Oct. 2013 Nov. Dec. Jan. 2014 Feb. Mar. 1 Puzzle & Dragons Puzzle & Dragons Puzzle & Dragons Puzzle & Dragons Puzzle & Dragons Puzzle & Dragons Clash 2 Candy Crush Saga Candy Crush Saga Candy Crush Saga Candy Crush Saga Clash of Clans of Clans Clash C
Slide 54: No.1 in countries
No.1 No.1 in 144 countries in 111 countries (Source) App Annie: Highest Grossing Game Ranking for iPad (as of Apr. 30, 2014) 53
Slide 55: 3rd Game launched globally
rd 3 Game launched globally (on Mar. 27) 54
Slide 56: No.1 in countries
No.1 in 42 countries (Source) App Annie: Highest Grossing Game Ranking for iPad (as of Apr. 30, 2014) 55
Slide 57: Strategic Reorganization of Commerce & Service Business
Strategic Reorganization of Commerce & Service Business 1t level Net sales JPY PMS WARM RED PMS BLACK 6 Toward Global No.1 distribution & services company in the mobile market *JPY 1t level: combined annual net sales of Brightstar’s net sales for fiscal year ended December 31, 2012 and SoftBank C&S’
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Slide 59: Sprint: Returned to profit
Consolidated Operating Income USD 420mil 0 Returned to profit - USD 580mil Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 *Combined consolidated U.S. GAAP results presented to be consistent with Sprint’s public disclosure and presentation of FY14 Q1 results 2012 2013 2014 (FY) 58
Slide 60: Sprint Adjusted EBITDA Margin: Turned around
40% Consolidated Adjusted EBITDA Margin 30% Turned 20% 23.4 18.9% around % 10% 0% *Combined consolidated U.S. GAAP results presented to be consistent 2006 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) with Sprint’s public disclosure and presentation of FY14 Q1 results Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 59
Slide 61: Wireless EBITDA Growth Rate
Wireless EBITDA Growth Rate (YoY) 11% 32% No.1 growth rate 7% - 26% *Combined consolidated U.S. GAAP results presented to be consistent with Sprint’s public disclosure and presentation of FY14 Q1 results T-Mobile AT&T Verizon Sprint *Growth rate from Q1 FY2013 to Q1 FY2014 60
Slide 62: Sprint Adjusted EBITDA: Steady growth
Consolidated Adjusted EBITDA USD 1.5bn USD 1.8bn Steady growth 22% increase *Combined consolidated U.S. GAAP results presented to be consistent 2009 ’10 ’11 ’12 ’13 ’14 (FY) with Sprint’s public disclosure and presentation of FY14 Q1 results Q1 Q1 Q1 Q1 Q1 Q1 61
Slide 63: Forecast
Forecast 62
Slide 64: FY2014 Consolidated Operation Results Forecast (previously announced)
FY2014 Consolidated Operation Results Forecast (previously announced) Net sales JPY 7t EBITDA JPY 2t EBIT JPY 1t (Operating income) (Excluding one-time gains) 63
Slide 65: FY2014 Consolidated Operation Results Forecast (upward revision)
FY2014 Consolidated Operation Results Forecast (upward revision) Net sales JPY 8t EBITDA JPY 2t EBIT JPY 1t (Operating income) (Excluding one-time gains) 64
Slide 66: Toward further growth
Toward further growth 65
Slide 67: Copyright (C) 2014 SoftBank Corp.
Copyright (C) 2014 SoftBank Corp., All rights reserved. 66
Slide 68: Adoption of IFRSs and definition of terms
1. Adoption of IFRSs SoftBank Corp. has adopted the International Financial Reporting Standards (IFRSs) from the three-month period ended June 30, 2013 (transition date: April 1, 2012). The financial data for the three-month period ended June 30, 2012 (“YoY”) and the fiscal year ended March 31, 2013