Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2010
Earnings Results for the Nine-month Period Ended December 31, 2010 (April to December 2010) February 3, 2011 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: Consolidated Operating Income (full year)
Consolidated Operating Income (full year) (JPY bn) 500.0 (forecast) 0 (FY) 04 05 06 07 08 09 10 2
Slide 4: Consolidated Operating Income: Upward revision
Consolidated Operating Income (full year) (JPY bn) 600.0 (revised forecast) +100.0 500.0 Upward revision 0 (FY) 04 05 06 07 08 09 10 3
Slide 5: Consolidated Earnings Results
Consolidated Earnings Results 5
Slide 6: Summary of Consolidated Earnings Results
Summary of Consolidated Earnings Results (JPY bn) FY09/Q1-3 FY10/Q1-3 Increment YoY (Apr. - Dec. ‘09) (Apr. - Dec. ‘10) Net sales 2,045.3 2,249.9 +204.5 110% EBITDA 601.2 700.5 +99.3 117% Operating income 366.3 482.1 +115.8 132% Ordinary income 281.1 399.9 +118.7 142% Net income 94.8 142.2 +47.4 150
Slide 7: Comparison to Competitors
Comparison to Competitors (Apr. - Dec. 2010 YoY) (JPY bn) SOFTBANK NTT DOCOMO KDDI Consolidated 204.5 (33.2) (13.4) net sales Consolidated operating income 115.8 55.8 (4.7) Revenue and profit Revenue decrease Revenue and profit increase and profit increase decrease 7 *Created by SOFTBANK CORP. based
Slide 8: Consolidated Net Sales
Consolidated Net Sales (JPY bn) 2,249.9 Record high 2,045.3 10% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture Others 0 FY09 FY10 Q1-3 Q1-3 8
Slide 9: Consolidated EBITDA
Consolidated EBITDA (JPY bn) 700.5 Record high for 601.2 7 consecutive 483.7 508.4 periods 382.4 17% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) 94.9 27.8 Internet Culture 0 Others 04 Q1-3 05 Q1-3 06 Q1-3 07 Q1-3 08 Q1-3 0
Slide 10: Consolidated Operating Income
Consolidated Operating Income (JPY bn) 482.1 Record high for 366.3 6 consecutive periods 274.6 260.1 197.2 32% increase 3 Telecommunications business (Mobile Communications, Broadband Infrastructure, 130.6 Fixed-line Telecommunications) 27.9 Internet Culture 0 Others -14.3 04 Q1-3 05 Q1-3 06 Q1-3 07
Slide 11: Consolidated Ordinary Income
Consolidated Ordinary Income (JPY bn) 399.9 Record high for 2 consecutive 281.1 174.4 periods 42% increase 0 FY08 FY09 FY10 Q1-3 Q1-3 Q1-3 11
Slide 12: Consolidated Net Income
Consolidated Net Income (JPY bn) 142.2 Record high for 94.8 2 consecutive 58.1 periods 50% increase 0 FY08 FY09 FY10 Q1-3 Q1-3 Q1-3 12
Slide 13: Financial Status
Financial Status 13
Slide 14: Consolidated Operating Cash Flow
Consolidated Operating Cash Flow (JPY bn) 525.9 469.1 Record high for 270.7 3 consecutive periods 57.2 12% increase 0 07 08 09 10 (FY) Q1-3 Q1-3 Q1-3 Q1-3 14
Slide 15: Consolidated CAPEX
Consolidated CAPEX (JPY bn) 389.8 400.0 No change in 389.8 293.7 293.7 259.0 annual plan 222.9 259.0 222.9 0 2006 2007 2008 2009 2010 (plan) (FY) 15 *Acceptance basis, including CAPEX through finance leases.
Slide 16: Consolidated Free Cash Flow
Consolidated Free Cash Flow (JPY bn) 364.2 283.5 Record high for 47.6 2 consecutive 0 periods 28% increase -216.3 07 08 09 10 (FY) Q1-3 Q1-3 Q1-3 Q1-3 16
Slide 17: Net Interest-bearing Debt Comparison to Peak Level
Net Interest-bearing Debt Comparison to Peak Level (JPY bn) 2,387.0 Since acquisition of Vodafone K.K. 1,429.9 Reduced by approx. JPY 960.0bn June Dec. 2006 2010 17
Slide 18: SBM Loan Balance
(JPY t) JPY 1.36t SBM Loan Balance 1.4 14,000 1.2 12,000 1.0 10,000 Reduced by 0.8 8,000 approx. JPY 620.0bn 0.6 6,000 JPY 745.0bn (Jan. 2011) 0.4 4,000 Minimum case 0.2 2,000 0 0 Inception of 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (CY) borrowings (Nov. 2006) 18
Slide 19: Acquisition of Preferred Stock Issued to Vodafone and Yahoo Japan
Acquisition of Preferred Stock, etc. Issued to Vodafone and Yahoo Japan Amount: JPY 412.5bn for Vodafone JPY 120.0bn for Yahoo Japan Purpose: ensure flexibility of financial and business strategies First step towards WBS refinance *Preferred stock issued to Vodafone: completed payment of JPY 212.5bn
Slide 20: Improvement in Bond Spread
(bps) 500 Improvement in Bond Spread 400 35th Unsecured Straight Corporate Bond 300 Term to maturity: 7 years 200 Interest rate: 1.66% p.a. 100 26th bond (4 years remaining) 0 09 10 11 Jan. Jan. Jan. 20
Slide 21: Commitment to Reduce Net Interest-bearing Debt
2.4t Commitment to Reduce Net Interest-bearing Debt Remains Unchanged 1.9t 1.43t Half 0 Zero Dec. FY2011 June 2006 FY08 2010 (target) FY2014 (target) 21 *Refers to half of the end of FY08 level.
Slide 22: Mobile Communications Business
Mobile Communications Business 22
Slide 23: Net Adds: No.1 for 4 consecutive years
Net Adds 2,520k (Apr. - Dec.) No.1 for 4 consecutive years 1,130k 660k KDDI NTT DOCOMO SOFTBANK 23 *Calculated by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data.
Slide 24: Cumulative Subscribers: Reaching a 10mil increase
(mil) 25 25,000,000 24.40mil Cumulative ! Subscribers Since acquisition of Vodafone K.K. 20 20,000,000 Reaching a 10mil increase Vodafone 15.22mil ! 15 15,000,000 10 10,000,000 " " Apr. Dec. 24 2006 2010
Slide 25: Churn Rate
Churn Rate (%) 2 Termination of 2G 1 0.91% Record low Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY07 FY08 FY09 FY10 25 *Churn rate: includes the number of prepaid mobile phones and communication module subscribers.
Slide 26: Brand of the Year in 2010
Brand of the Year in 2010 (Out of 8,770 brands) Name Score 1 SOFTBANK MOBILE 8,540 4 time 2 KDDI 3,254 champion (First-ever) 3 NTT DOCOMO 3,249 4 LOTTE 2,802 5 Aflac 1,762 6 Nintendo 1,626 7 SUNTORY 1,612 8 DAIHATSU 1,401 9 Kikkoman 1,237 10 TOKYO GAS 1,226 26 (Source) CM DATA BANK
Slide 27: ARPU Turnaround
ARPU 100 (Indexed at FY07/Q3 = 100) Turnaround 95 SOFTBANK 90 85 NTT DOCOMO 80 KDDI 75 07 08 09 10 (FY) Q3 Q3 Q3 Q3 27 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 28: Data ARPU
Data ARPU (Indexed at FY07/Q3 = 100) 160 SOFTBANK 140 Significant increase 120 NTT DOCOMO KDDI 100 07 08 09 10 (FY) Q3 Q3 Q3 Q3 28 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 29: Actual Data ARPU
Actual Data ARPU (JPY) 2,700 2,500 2,540 NTT DOCOMO 2,330 SOFTBANK 2,320 KDDI Surpassed KDDI for the first time 1,000 06 07 08 09 10 (FY) Q3 Q3 Q3 Q3 Q3 29 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 30: Mobile Communications Business Operating Income
Mobile Communications Business Operating Income (JPY bn) 314.4 Vodafone SOFTBANK Turnaround Japan 215.1 147.9 134.9 113.5 0 03 04 05 06 07 08 09 10 (FY) Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 30 *Figures from FY02-05 are created by SOFTBANK CORP. based on Vodafone K.K.’s internal material.
Slide 31: New Target for Network Enhancement
New Target for Network Enhancement 140k (new target) 120k 107k 76k 66k 70k 89k Approx. 60k 42k 46k 33k 39k Radio base stations Transitive base stations 30k 31k 33k (repeaters) 27k 27k 28k 0 Mar. June Sept. Dec. Mar. Sept. 2010 2010 2010 2010 2011 2011 *Excludes residential femtocell 31 (plan) (plan)
Slide 32: Provide Coverage on Subway
Provide Coverage on Subway To be provided in 2011 on main lines Son Masayoshi With passion we can do anything. Providing network coverage on the subway looks possible. Inose Naoki I talked to @masason today about ‘enable texting on the subway’ *Original text in Japanese, translated for reference onl
Slide 33: Winning Formula
Winning Formula No.1 No.1 No.1 Mobile Internet Smartphone Tablet Conventional terminal PC Competitors 33
Slide 34: No.1 Smartphone
No.1 Smartphone Conventional terminal 34
Slide 35: Number of New Acquisitions for Major Smartphones (Jan. 2011)
Number of New Acquisitions for Major Smartphones (Jan. 2011) (excludes upgrades) Clearly No.1 NTT NTT NTT NTT SB au DOCOMO DOCOMO DOCOMO DOCOMO SO-01B SH-03C au 003SH IS03 SC-02B T-01C iPhone iPhone (Xperia) LYNX 3D GALAPAGOS Galaxy S REGZA *Created by SOFTBANK CORP. based on external research compa
Slide 36: Number of App Store Applications
Number of App Store Applications 300k 100k 10k 0 Dec. Dec. Dec. (Source) publicly available data of Apple Inc. 36 08 09 10
Slide 37: Are You Happy With iPhone?
Are You Happy With iPhone? 98% Satisfied *Dec. 2010 survey by VLC (questionnaire to 500 iPhone users). 37
Slide 38: Robust Lineup of Android Smartphones
Robust Lineup of TM Android Smartphones 38
Slide 39: No.1 Tablet
No.1 Tablet PC 39
Slide 40: Share of Tablets Sold (Dec. 2010)
Share of Tablets Sold (Dec. 2010) Others Galaxy Tab 18% Clearly No.1 iPad 81% *Created by SOFTBANK CORP. based on external research company’s study of number of handsets sold at the major electronic retailers. 40 Number of iPads sold is the total of Wi-Fi and Wi-Fi+3G.
Slide 41: iPad Corporate Implementations
iPad Corporate Implementations 41
Slide 42: Per Employee Contribution to Profit
Per Employee Contribution to Profit (example) Per person JPY 52,000 Work time generation JPY 95,000/month JPY 10,000 Paperless JPY 33,000 Overtime reduction *Results of survey held among SOFTBANK TELECOM’s sales people on the positive effects of using iPhone, iPad 42 professionally.
Slide 43: Enhanced Cloud Services for Corporate Users: Google Apps for Business
Enhanced Cloud Services for Corporate Users Google Apps TM for Business Launched on February 1 43
Slide 44: Upgraded Winning Formula
Upgraded Winning Formula 44
Slide 45: Winning Formula
Winning Formula No.1 No.1 No.1 Mobile Internet Smartphone Tablet Conventional terminal PC Competitors 45
Slide 46: Upgraded Winning Formula
Upgraded Winning Formula No.1 Mobile Internet Competitors 46
Slide 47: Upgraded Winning Formula
Upgraded Winning Formula No.1 No.1 No.1 Mobile Internet Asia Internet Global Internet Competitors Competitors Competitors 47
Slide 48: No.1 Asia Internet
No.1 Asia Internet Competitors 48
Slide 49: SOFTBANK's Internet Companies in Asia
SOFTBANK’s Internet Companies in Asia 49
Slide 50: Yahoo! JAPAN
AHOO! JAPAN ee el wad ted) ee Ne eera Pe ee Vereen: LARS OS NOES reerr em Je ere ne ee bahia =| reaten 6 SB 8 ree AEF ARNNS AMMEN | Perea 2 RPT. SNE CT | ar ere “ewe moore Led reapers steno es treme wars 50°"
Slide 51: Internet Culture Operating Income
(JPY bn) Operating Income 120 110.6 90 Record high 60 30 0 03 Q1-3 04 Q1-3 05 Q1-3 06 Q1-3 07 Q1-3 08 Q1-3 09 Q1-3 10 Q1-3 (FY) *Operating income of Internet Culture segment. 51
Slide 52: Smartphone Page Views
3,000 Smartphone Page Views 2,543 2,250 x25 1,500 750 100 0 " " 52 Sept. 2008 Dec. 2010 *Indexed at Sept. 2008 = 100
Slide 53: The Internet Business in China
The Internet Business in China 53
Slide 54: Chinese Internet Population
(mil) Chinese Internet Population 9 900 880mil (2015) 7 700 5 500 280mil 2 200 120mil 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2015 hose *Actual data from ITU, forecast data UeDDCI, Japan on China from catherine and USA forecast data estimated by SOFTBANK CORP. based on the
Slide 55: Chinese Internet Population and Strategic Investment
(mil) Chinese Internet Population 9 900 880mil (2015) 2008 Renren (formerly OPI) 7 700 2003 5 500 Taobao 2000 Alibaba.com Strategic investment 2 200 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2015 from DDCI. Ue hose *Actual data from ITU, forecast data catherine ken Pitt (for
Slide 56: Alibaba Group
hey Group > WBPPS A EDAlibabacon T9=PA SCTE estatshere™ Taobao.com Alipay.con 56
Slide 57: Number of Alibaba.com Registered Users
Number of Alibaba.com Registered mil Users 60 56.72mil 45 Steady growth 30 15 0 2005 2006 2007 2008 2009 2010 (Source) publicly available data of Alibaba.com. 57
Slide 58: No.1 Online Shopping in China
No.1 Online Shopping in China 58
Slide 59: Number of Users: Alipay vs PayPal
Number of Users 550mil x2.4 230mil PayPal Alipay (Source) publicly available data of Alipay (Dec. 2010), publicly available data of PayPal (Sept. 2010). 59
Slide 60: Renren Inc.
Name changed (Dec. 2010) Renren Inc. 60
Slide 61: Additional Investment in Renren (Jan. 2011)
Additional Investment in Renren (Jan. 2011) Additional investment of JPY 16.4bn Voting rights 29.2%#39.7% *Before dilution basis. 61
Slide 62: Time Spent on the Internet (USA)
Time Spent on the Internet (USA) SNS 23% Predominantly Others Online game SNS Email Search Portal Instant message Video (Source) created by SOFTBANK CORP. based on the press release of The Nielsen Company (Aug. 2, 2010). 62
Slide 63: Facebook Advertisement Revenue
Facebook Advertisement Revenue (JPY bn) (estimate) 500 approx. 470.0bn 400 300 x8 (in 3 years) 200 100 0 2009 hose Ue 2010 catherine 2011 ken 2012 (Source)Pitt created by SOFTBANK CORP. based on the press release of eMarketer (Jan. 18, 2011). 63
Slide 64: Number of SNS Users
Number of SNS Users 230mil 140mil China is biggest market 50mil hose Ue catherine ken Pitt (Source) Japan, US: The Nielsen Company press release Feb. 18, 2010. China: CCNIC: ” (Jan. 1 2011). 64
Slide 65: Number of Users: Biggest SNS in China
(mil) Number of Users 120 110mil (Dec. 2010) 90 Biggest SNS 60 in China 30 mixi 20mil GREE 20mil 6 Mobage 20mil 0 2007 2008 2009 2010 65 * Created by SOFTBANK CORP. based on respective companies’ publicly available information. Renren: number of activated users.
Slide 66: SNS in China Number of Monthly Users
SNS in China Number of Monthly Users (Sept. 2010) mil 93.45 Biggest SNS 42.17 in China 30.65 24.85 14.08 5.48 6.60 3.67 Tongxue.com baihe.com Zhenai.com myspace.cn 25.com jiayuan.com kaixin001.com (Source) (Oct. 2010). 66
Slide 67: Renren's new group buying service
Renren’s new group buying service Chinese version of Groupon 67
Slide 68: Group Buying Users in China
Group Buying Users in China (mil) 12 11.40mil 6 x500 (in 6 months) 0 20k ‘09/ Mar. Apr. May June July Aug. Sept. ※* 2010 10 68
Slide 69: Mind Share Ranking of Group Buying Sites in China
Mind Share Ranking of Group Buying Sites in China Site 1 (Nuomi) 33.1 No.1 in China 2 (Meituan) 21.2 3 F (Ftuan) 3.0 4 (Sina) 3.0 5 58 (58.com) 2.1 6 (Aibang) 1.8 7 24 (24quan.com) 1.8 8 (Sohu) 1.6 9 1.2 10 (Kutuan) 1.2 *From CBN Weekly Report Oct. 19, 2010. 69
Slide 70: No.1 Online TV in China
New Announcement No.1 Online TV in China Covers 120TV stations throughout China 20,000 channels 70
Slide 71: PPLive Investment (Jan. 2011)
35% (Jan. 2011) *After dilution basis. 71
Slide 72: Video
VIDEO 72
Slide 73: Number of Monthly Active Users
Number of Monthly Active Users (mil) 100 100mil approx. x2 (in 1 year) 60mil 500 0 73 (Source) PPLive. 2006 2007 2008 2009 2010
Slide 74: Average Daily Viewing Time
Average Daily Viewing Time 2hrs 33min YouKu 33min qq.com 31min Clearly No.1 Sohu 19min viewing time Sina 12min Baidu 12min (Source) iResearch (Dec. 2010). 74
Slide 75: Media Dependency by Age
(Media dependency) Media Dependency by Age TV Popular among young people 10-14 15-19 20-24 25-29 25-29 30-34 30-34 35-39 35-39 40-44 40-44 45-49 50-54 55-59 (age) (Source) CNNIC survey, 2010. 75
Slide 76: TV Ad Market Size
TV Ad Market Size JPY 4.8t approx. x3 JPY 1.7t 0 (Source) China: China Market Research (Jan. 28, 2010). 76 Japan: advertisement expenditures in Japan (DENTSU) Feb. 22, 2010.
Slide 77: The SOFTBANK Group in China
The SOFTBANK Group in China eCommerce No.1 Payment No.1 SNS No.1 Group buying No.1 Online TV distribution No.1 77
Slide 78: The SOFTBANK Group in China
The SOFTBANK Group in China eCommerce Amazon Payment PayPal SNS Facebook Group buying Groupon Online TV Netflix/Hulu distribution
Slide 79: The SOFTBANK Group in China: Equivalent to Chinese population
The SOFTBANK Group in China 1,200mil Equivalent to Chinese population 600mil 300mil 160mil 80mil 30mil *Created by SOFTBANK CORP. based on respective 79 2005 2006 2007 2008 2009 2010 companies’ publicly available information.
Slide 80: Upgraded Winning Formula
Upgraded Winning Formula No.1 No.1 No.1 Mobile Internet Asia Internet Global Internet Competitors Competitors Competitors 80
Slide 81: Towards the World Internet No.1
Towards the World Internet No.1 81
Slide 82: Summary
Summary 1) Upward revision of operating income to JPY 600.0bn 2) Strategic investment in China (PPLive) 82
Slide 83: Make People Happy Through Information Revolution
Make People Happy Through Information Revolution 83
Slide 84: SoftBank
SoftBank
Slide 85: Application of accounting standard and definition of terms
1. Application of accounting standard for disclosure on segments The “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” and related “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” are applied fro