Softbank Group Corp. · TSE:9984
Softbank — H1 FY2007 Earnings Presentation
62 slides from Softbank's earnings presentation, Nov 6, 2007
Slide 1: Earnings Results for the Interim Period Ended September 30, 2007
Earnings Results for the Interim Period Ended September 30, 2007 November 6, 2007 SOFTBANK CORP. March 12, 2010 Version Due to protection of rights, some of the photos and images included at the time of publication have been modified or revised.
Slide 2: Highlights
<Highlights> 1. Consolidated earnings results: H1 operating income increased by 49% (YoY) H1 net income: 3.2 times (YoY) 2. Success in mobile operations: 1.14 million of net subscriber additions in H1 3. Becoming No.1 Internet company in Asia: IPO of Alibaba + Yahoo! JAPAN 2
Slide 3: H1/FY2007 Summary of Consolidated Earnings Results
H1/FY2007 Summary of Consolidated Earnings Results <bn JPY> <Interim> H1/FY07 H1/FY06 YoY (Apr 07 – Sep) (Apr 06 – Sep) Net Sales 1,364.7 1,120.1 +244.5 EBITDA 314.2 228.4 +85.8 Operating income 167.7 112.5 +55.1 Ordinary income 111.1 62.6 +48.4 Income before income taxes and 122.9 118.8 +4.0 minori
Slide 4: H1/FY2007 Highlights: Interim Net Additions
H1/FY2007 Highlights <k> Interim Net Additions 1,140 1,030 1,000 960 960 +1.05 million YoY 500 320 97 0 FY06 FY07 FY06 FY07 FY06 FY07 H1 H1 H1 SBM NTT DoCoMo KDDI 4
Slide 5: H1/FY2007 Highlights: Operating Income Up 49% YoY
H1/FY2007 Highlights <bn JPY> Interim Operating Income 180 167.7 160 140 120 112.5 Increased by 100 80 49% YoY 60 40 20 0 H1/FY06 H1/FY07 5
Slide 6: H1/FY2007 Highlights: Operating Income YoY Movement
H1/FY2007 Highlights <%> Interim Operating Income YoY Movement 50% 49% SOFTBANK Increased by 9% KDDI 49%YoY 0% -21% NTT DoCoMo -50% H1/FY06 H1/FY07 6
Slide 7: Consolidated Net Sales (interim)
Consolidated Net Sales (interim) 1,364.7 <bn JPY> 1,120.1 1,000 H1/FY2007 1,364.7bn JPY 522.7 500 Increased by 22 YoY 0 H1/FY05 H1/FY06 H1/FY07 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 7
Slide 8: Net Sales by Segment (interim)
Net Sales by Segment (interim) 1,364.7 <bn JPY> 1,120.1 1,000 808.9 Mobile Communications 581.8 (SBM) 522.7 Others 500 123.6 117.0 118.5 e-Commerce 71.2 89.6 108.8 Internet Culture (Yahoo Japan) 168.9 166.2 157.8 Fixed-line Telecommunications (SBTM) 124.9 127.4 126.7 Broadband Infrastructure 0 H1/FY
Slide 9: Consolidated EBITDA (interim)
Consolidated EBITDA (interim) 350 <bn JPY> 314.2 300 250 228.4 H1/FY2007 200 314.2bn JPY 150 Increased by 100 38 YoY 50.2 50 0 H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 9
Slide 10: EBITDA by Segment (interim)
EBITDA by Segment (interim) 350 <bn JPY> 314.2 300 250 228.4 Mobile Communications (SBM) 200 Broadband Infrastructure 150 Fixed-line 100 Telecommunications (SBTM) 50.2 Internet Culture (Yahoo Japan) 50 e-Commerce 0 H1/FY05 H1/FY06 H1/FY07 Others -50 Note: Operating results of SOFTBANK MOBILE Corp. (
Slide 11: Consolidated Operating Income (interim)
Consolidated Operating Income (interim) <bn JPY> 167.7 150 112.5 100 H1/FY2007 167.7bn JPY 50 Increased by 4.4 49% YoY 0 H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 11
Slide 12: Operating Income by Segment (interim)
Operating Income by Segment (interim) 167.7 <bn JPY> Consolidated Operating 150 Income 112.5 Mobile Communications 100 (SBM) Broadband Infrastructure Fixed-line 50 Telecommunications (SBTM) Internet Culture 4.4 (Yahoo Japan) e-Commerce 0 Others H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of
Slide 13: Consolidated Ordinary Income (interim)
Consolidated Ordinary Income (interim) <bn JPY> 120 111.1 100 80 H1/FY2007 62.6 60 111.1bn JPY 40 Increased by 20 77% YoY 0 H1/FY05 H1/FY06 H1/FY07 -20 -13.4 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 13
Slide 14: Consolidated Net Income (interim)
Consolidated Net Income (interim) <bn JPY> 50 46.4 40 30 H1/FY2007 46.4bn JPY 20 14.4 x3.2 YoY 10 0 H1/FY05 H1/FY06 H1/FY07 -4.1 -10 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 14
Slide 15: Consolidated Net Income (interim)
Consolidated Net Income (interim) <bn JPY> H1/FY07 H1/FY06 Notes (Apr 07 – Sep) (Apr 06- Sep) Ordinary income 111.1 62.6 Gain on sale of Special income, net 11.7 56.2 investment securities:10.4 Income before income taxes and 122.9 118.8 minority interests Income taxes: Current 16.8 80.9 Income taxes
Slide 16: Consolidated Cashflow (interim)
Consolidated Cashflow (interim) <bn JPY> H1/FY07 Notes (Apr 07 – Sep) Income taxes paid (28.6) Decrease in A/P handset payments (46.8) Operating cashflow +0.4 Interest paid (49.6) Increase in installment receivables (174.3) Purchase of property and equipment, and Investing cashflow (227.2) intangibl
Slide 17: Cash Position
Cash Position 700 <bn JPY> Unused portion of credit line facility Cash position 600 119.0 500 400 300 30.0 481.9 200 280.9 100 0 End Sep 06 End Sep 07 17
Slide 18: Net Interest-bearing Debt
Net Interest-bearing Debt <bn JPY> 2,500 2,000 1,676.5 1,672.5 1,500 Investment by SOFTBANK CORP. and Yahoo Japan in 1,000 SBM: 320.0bn JPY Mobile net interest- 615.6 bearing debt (non- 500 CB 432.5 recourse) 321.7 (including SBM loan 465.6 balance of: 1,311.4bn 282.5 171.7 JPY) 0 End Sep 05 End Sep
Slide 19: Pro-forma Equity Ratio (after impact of unrealized capital gain)
Pro-forma Equity Ratio (after impact of unrealized capital gain) Alibaba.com Limited unrealized gain Pro-forma adjusted equity ratio 26.2% (after consideration of unrealized 23.5% capital gain*) 20% Equity ratio 7.9% 6.6% 0% End Mar 07 End Sep 07 * Calculated by offsetting the tax liability to the u
Slide 20: SoftBank Mobile Communications
— SoftBank Mobile Communications 20
Slide 21: No.1 in Net Addition Share for Consecutive Months
No.1 in Net addition Share for 5 Consecutive Months (May 07 - Sep) Net Addition Share in Sep 2007 100% Net Addition Share (monthly) NTT DoCoMo 9.5% 80% KDDI 40.1% 50.4% 60% SOFTBANK 40% KDDI 20% NTT DoCoMo 0% Apr Oct Apr Oct Apr Vodafone Source: Telecommunications carriers 2005 2006 2007 association
Slide 22: No.1 in Net Addition Share in H1
No.1 in Net Addition Share in H1 (Apr 07 - Sep) 70% Net Addition Share (interim) 50% SOFTBANK KDDI 30% 10% NTT DoCoMo H1/FY5 H1/FY06 H1/FY07 Source: Telecommunications carriers association (excl. EMOBILE) -10% 22
Slide 23: Significant Increase in 3G Subscribers
Significant Increase in 3G Subscribers (million) 18 Cumulative Subscribers 17.05 16 14 12 10.92 10 2G 2G End of Sep 2007 3G subscribers: 10.92 million 8 3G ratio: 64% 6 4 2 3G 0 Mar Sep Mar Sep Mar Sep Mar Sep 2004 2005 2006 2007 23
Slide 24: Continue to Expand Base Stations
Continue to Expand Base Stations Number of (BS) 3G Base Stations 47,439 46,000 Plan to enhance coverage further to improve ‘connectivity’ Q1 Q2 Q3 Q4 Q1 Q2 FY2006 FY2007 24
Slide 25: Market Penetration of Installment Sales
Market Penetration of Installment Sales: Acquire Long- Number of tenure Subscribers (million) ‘New Super Bonus’ Subscribers 8 7 6 5 4 Exceeds 3 8 million 2 subscribers* 1 0 *As of Nov 1, 2007 Oct Jan Apr Jul Oct 2006 2007 25
Slide 26: Experienced Outstanding Response to Price Plans
Experienced Outstanding Response to Price Plans (million) Number of Subscriptions 9 8 White Plan 7 exceeds 6 9 million* 5 4 White Plan Double White 3 2 exceeds 1 2.7 million* Double White *As of Oct 29, 2007, including 0 applications to which rates are 2007/Jan Mar Oct not yet applied 26
Slide 27: Overtook Competitors in Customer Satisfaction Related to Pricing
Overtook Competitors in Terms of Customer Satisfaction Related to Pricing Satisfaction in Pricing White Plan Family Discount 24 49% au 30% NTT DoCoMo 21% Source: research by an external institution 27
Slide 28: Triple Winner in CM Preference for Consecutive Months
Triple Winner in CM Preference for 3 Consecutive Months (2007) Aug Sep Oct Among 1,217 companies Among 1,196 companies Among 1,219 companies By Comp 1 SOFTBANK MOBILE SOFTBANK MOBILE SOFTBANK MOBILE First-ever! 2 SUNTORY NTT DoCoMo Shiseido 3 NTT DoCoMo SUNTORY NTT DoCoMo 4 Coca-Cola (Japan) Meiji S
Slide 29: More Shops
More Shops Number of 2,500 SoftBank Shops 2,417 Increased by 2,000 30%! (Against April last year) 1,500 Display prevented due to protection of rights. 1,000 500 Display prevented due to protection of rights. 0 End End 29 Apr 06 Sep 07
Slide 30: More Counters
More Counters (counters) Number of Counters at SoftBank Shops exceeds 10,000 Increased by 10,000 63%! 8,000 (Against April last year) 6,000 4,000 2,000 Display prevented due to protection of rights. 0 End End 30 Apr 06 Sep 07
Slide 31: Significant Growth in Net Corporate Customer Additions
Significant Growth in Net Corporate Customer Additions Number of Corporate (k) Customer Net Additions 400 330 300 X5.5 ! (YoY) 200 Display prevented 100 due to protection of rights. 60 0 H1 H1 FY2006 FY2007 31
Slide 32: High Family Plan Subscription Level Among Acquisitions
High Family Plan Subscription Level Among Acquisitions White Plan Family Discount 24 80% Subscription Ratio (among acquisitions) 70% 70% of new customers 60% subscribed 50% 40% 30% 20% 10% Announced ‘White Plan Family Discount 24’ on May 10, 2007 0% *White Plan Family Discount 24 subscription ratio
Slide 33: Rapid Recovery of User Evaluation Results
Rapid Recovery of User Evaluation Results (%) Intend to Continue Use MNP 82% 80 Launch 75 70 Source: research by an external institution Jun Sep Dec Mar Jun Sep 2006 2007 33
Slide 34: 3G Churn Rate
4.0% 3G Churn Rate 3.0% 2.0% Q2/FY2007 1.0% 1.05% 0.0% Q4/FY05 Q4/FY06 Q2/FY07 34
Slide 35: ARPU
ARPU (JPY) 5,870 5,930 5,840 6,000 5,600 5,580 5,700 5,560 5,210 5,000 4,800 5,000 4,000 4,540 4,540 4,510 4,260 4,230 4,320 4,230 Voice 3,830 3,590 3,340 3,000 Data 2,000 1,000 1,330 1,390 1,330 1,340 1,350 1,380 1,330 1,380 1,410 1,470 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY2005 FY2006 FY2007 35
Slide 36: Reference: ARPU + Installment Payments
Reference: ARPU + Installment Payments (JPY) 5,870 5,930 5,840 6,000 5,600 5,580 5,700 5,580 5,430 5,480 5,530 5,000 Installment 4,000 4,540 4,540 4,510 4,260 4,230 4,320 4,230 Voice 3,830 3,590 3,340 3,000 Data 2,000 1,000 1,330 1,390 1,330 1,340 1,350 1,380 1,330 1,380 1,410 1,470 0 Q1 Q2 Q3 Q4 Q1
Slide 37: Mobile will become an "Internet Machine"
Mobile will become an “Internet Machine” Composition of ARPU Voice Voice Voice Data Data Data 2G 3G 4G 37
Slide 38: Winter 2007, SOFTBANK's Next Mobile Evolution
Winter 2007, SOFTBANK’s Next Mobile Evolution 38
Slide 39: No.1 Internet Company in Asia
No.1 Internet Company in Asia 39
Slide 40: IPO of Alibaba.com Limited
IPO of Alibaba.com Limited <Impact to SOFTBANK Group> Alibaba.com Limited (listed company) ¾Market capitalization: approx. 1 trillion JPY (based on initial offering price*) ¾P/L impact due to this IPO: Record equity in earnings of affiliated companies (planned for Q3) ¾Discuss business cooperation i
Slide 41: Alibaba.com Limited Listing
Alibaba.com Limited Listing Management/employees of Alibaba Group and other minority shareholders Yahoo! Inc. 33%*1 Alibaba Group Holding Limited*2 Nov 6, 2007 100%*1 listed on Hong Kong stock exchange (Yahoo China) (Alisoft) (Alipay) (Taobao) Alibaba.com Limited Search/portal Online software Paymen
Slide 42: Alibaba.com
Alibaba.com Market Share of Annual Overwhelmingly the No.1 B2B Sales in 2006 e-commerce service in China Others Display prevented 51% due to protection of rights. Source: Alibaba.com Limited prospectus issued on Oct 23, 2007 42
Slide 43: Alibaba.com
Alibaba.com Turnover share Overwhelmingly the No.1 B2B from Apr to Jun 2007 e-commerce service in China Others emedChina HC360 Made-in- China.com Global Sources Display prevented 69% due to protection of rights. Source: Analysys International Press Release Sep 5, 2007 43
Slide 44: Taobao.com
Taobao.com Turnover share from Apr to Jun 2007 each Other Overwhelmingly the No.1 net. com C2C auction service PaiPai in China 83% Display prevented due to protection of rights. Source: Analysys International Press Release Aug 13, 2007 44
Slide 45: Taobao.com
Taobao.com Number of Listed Products Approx.75 million Number of listed products doubled in 1 year Display prevented due to protection of rights. Jun 2006 Jun 2007 Source: Alibaba Group Press Release Jul 18, 2007 45
Slide 46: Alipay
Alipay Transaction Share*1 from Apr to Jun 2007 No.1 online payment Others service in China Tenpay 9Number of users: 47 million 75% (increases 80k/day) 9Avg. transactions: 780k/day Source: Alibaba Group press release on Aug 28, 2007 *1 In the non-independent third party online payment market Source:
Slide 47: Alipay: No.1 Online Payment Service in China
Alipay: No.1 Online Payment Service in China Used by more than 300 thousand e-commerce businesses Used by roughly 80% of TaoBao users Display prevented due to protection of rights. 47
Slide 48: Alipay: No.1 Online Payment Service in China
Alipay: No.1 Online Payment Service in China Aligned with major banks in China including 4 mega banks 4 mega banks in China Display prevented due to protection of rights. 48
Slide 49: Alipay: Provide Online Software to SME's
Alipay: Provide Online Software to SME’s Provide self-developed online software to SME’s in China to support e-commerce, sales, internal management, instant messaging, etc. e-Commerce Support Mail distribution Sales Support Shop management Customer support Client management Sales management Internal
Slide 50: No.1 Internet Company Mobile
No.1 Internet Company Mobile 50
Slide 51: No.1 Internet Company in Asia
No.1 B2B No.1 Portal No.1 Mobile net adds No.1 C2C No.1 C2C No.1 ADSL No.1 Online payment No.1 Search No.1 Internet Company in Asia 51
Slide 52: SOFTBANK Group Investment IPO's
SOFTBANK Group Investment IPO’s China Japan USA Display prevented due to protection of rights. 52
Slide 53: Leverage the Group's Competitive Strength in the Internet
Leverage the Group’s Competitive Strength in the Internet Display prevented Display prevented due to protection due to protection of rights. of rights. Content & Services Portal Display prevented Display prevented due to protection of rights. due to protection of rights. PC Mobile 53
Slide 54: SOFTBANK's Goal
SOFTBANK’s Goal No.1 in Infrastructure, platform/portal, and content commerce business education game broadcast sports publish music Platform/Portal Infrastructure 54
Slide 55: Mobile will become an "Internet Machine"
Mobile will become an “Internet Machine” Hello… Display prevented due to protection of rights. Voice Internet 55
Slide 56: Mobile will become an "Internet Machine"
Mobile will become an “Internet Machine” Hello… Display prevented due to protection of rights. Voice Internet 56
Slide 57: Mobile will become an "Internet Machine"
Mobile will become an “Internet Machine” Hello… Display prevented due to protection of rights. Voice Internet 57
Slide 58: Make Mobile an "Internet Machine"
Make Mobile an “Internet Machine” 58
Slide 59: Lifestyle Company in the 21st Century
Lifestyle Company in the 21st Century Broadband available to everyone everywhere 59
Slide 60: SOFTBANK's Fundamental Management Policy
SOFTBANK’s Fundamental Management Policy Endeavoring to benefit society and the economy and maximize enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution 60
Slide 61: http://www.softbank.co.jp
http://www.softbank.co.jp This presentation contains forward-looking statements including statements regarding future events, future strategies or future performance of SOFTBANK CORP. that involves risks or uncertainties. In evaluating these statements, a recipient thereof should specifically consid
Slide 62: FY2008/Q2 Appendix to the Earnings Results
FY2008/Q2 Appendix to the Earnings Results (Amounts less than one billion yen are omitted. / Net Sales to external customers ） Business segment unit FY2006 FY2007 FY2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net sales bn JPY 231.5 350.3 426.6 422.2 389.0 419.8 Operating income bn JPY 27.2 29.3 56.9 42.2 43.