Slide 1: Earnings Results for the First Quarter Ended June 30, 2009
Earnings Results for the First Quarter Ended June 30, 2009 July 30, 2009 SOFTBANK CORP. 1
Slide 2: Disclaimer
Disclaimer This material is made based on information available at the time of writing. Statements in this material that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements. Forward-looking Statements are subject to various risks
Slide 3: Q1 Highlights
Q1 Highlights 1. 1. Achieved Achieved revenue revenue and and profit profit increases increases Exceeded ExceededJPYJPY100bn 100bnof of operating operatingincome incomefor forthe thefirst first time timeon on quarterly quarterlybasis basis Net Netsales salesand andoperating operatingincome incomeinc
Slide 4: Summary of Consolidated Earnings
Summary of Consolidated Earnings (bn JPY) FY08/Q1 FY09/Q1 YoY (Apr/08-Jun/08) (Apr/09-Jun/09) Net sales 647.2 666.3 +3% EBITDA 161.4 184.8 +14% Operating income 85.0 108.2 +27% Ordinary income 54.2 78.7 +45% Quarterly net income 19.3 27.3 +41% Operating cash flow 52.8 132.0 +150% Free cash flow (37.
Slide 5: Consolidated Earnings Variance
Consolidated Earnings Variance (FY2009/Q1 YoY comparison) Net sales +3% Achieved revenue and Operating income profit increases +27% Ordinary income +45% Quarterly net income +41% Operating cash flow +150% 4
Slide 6: Consolidated Earnings Variance
Consolidated Earnings Variance (FY2009/Q1 YoY comparison) +3% Mobile Communications Net sales +9% (Mobile) drove the revenue and +27% profit increases Operating income +36% (Mobile) Ordinary income +45% Quarterly net income +41% Operating cash flow +150% 5
Slide 7: Comparison of Consolidated Earnings
Comparison of Consolidated Earnings (FY2009/Q1 YoY comparison) SOFTBANK KDDI NTT DOCOMO Consolidated net sales (YoY) +3% -2% -7% Consolidated operating income +27% +14% -15% (YoY) Revenue Revenue down Revenue and and profit and profit profit increases decreases increases 6 Source: calculated by SOFT
Slide 8: Status of FY2009 Earnings Forecast
Status of FY2009 Earnings Forecast (bn JPY) FY08 FY09 FY09 Actual Forecast Q1Actual Operating income 359.1 420.0 108.2 (+60.8) (+23.2) Free cash flow 181.5 250.0 56.5 (+68.4) (+94.4) On track for FY2009 earnings forecast *YoY comparison stated within brackets. 7
Slide 9: Consolidated Earnings Results
Consolidated Earnings Results 8
Slide 10: Consolidated Net Sales
Consolidated Net Sales (bn JPY) 700 647.2 666.3 Record high for Q1 600 Increased by 3% YoY 500 370.6 405.0 400 300 Mobile Communications 58.7 52.6 Broadband Infrastructure 200 78.1 76.4 Fixed-line Telecommunications 61.5 100 64.1 Internet Culture 59.6 51.7 e-Commerce 0 FY08/Q1 FY09/Q1 *The figure fo
Slide 11: Mobile Communications Segment Net Sales
Mobile Communications Segment Net Sales (bn JPY) 405.0 Record high for Q1 400 370.6 Increased by 9% YoY 136.2 117.7 +18.4 300 Handset sales, etc. 200 +15.9 Telecom service revenue, etc. 268.8 252.8 100 0 FY08/Q1 FY09/Q1 *The figure for each segment excludes the amounts of inter-segment sales and tra
Slide 12: Consolidated EBITDA
Consolidated EBITDA (bn JPY) 200 184.8 Record high 161.4 (on quarterly basis) 150 14% increase YoY 117.2 99.5 100 Mobile Communications 16.3 18.0 Broadband Infrastructure 50 12.2 14.6 Fixed-line Telecommunications 33.0 34.6 Internet Culture 0 e-Commerce FY08/Q1 FY09/Q1 -50*EBITDA = Operating income
Slide 13: Consolidated Operating Income
Consolidated Operating Income (bn JPY) Exceeded JPY 100bn 120 108.2 for the first time 100 (on quarterly basis) 85.0 27% increase YoY 80 60.2 44.2 60 Mobile Communications 40 13.9 Broadband Infrastructure 10.4 3.4 Fixed-line Telecommunications 20 30.5 31.7 Internet Culture 0 e-Commerce FY08/Q1 FY09/
Slide 14: Consolidated Ordinary Income
Consolidated Ordinary Income (bn JPY) 100 80 78.7 Record high for Q1 60 54.2 45% increase YoY 40 20 0 FY08/Q1 FY09/Q1 13
Slide 15: Consolidated Net Income
Consolidated Net Income (bn JPY) 30 27.3 Record high for Q1 20 19.3 41% increase YoY 10 0 FY08/Q1 FY09/Q1 14
Slide 16: Consolidated Net Income
Consolidated Net Income FY08/Q1 FY09/Q1 Notes (bn JPY) Ordinary income 54.2 78.7 Special 3.0 0.3 income/loss (net) Income before income taxes and minority interests 57.3 79.1 Income tax: Current 11.7 19.8 Income tax: Deferred 14.5 21.1 SOFTBANK MOBILE, etc. Mainly Yahoo Japan Minority interests 11.7
Slide 17: Improvement in Key Financial Indexes
Improvement in Key Financial Indexes Improvement FY08/Q1 FY09/Q1 Rate EBITDA margin 24.9% 27.7% +11% (EBITDA/net sales) Equity ratio 9.0% 9.5% +6% (total shareholders’ equity/total assets) D/E ratio 6.4 times 5.8 times +9% (interest-bearing debt/total shareholders’ equity) Net D/E ratio 5.3 times 4.
Slide 18: Interest-bearing Debt Reduction Status
Interest-bearing Debt Reduction Status 17
Slide 19: Consolidated Interest-bearing Debt
Consolidated Interest-bearing Debt (bn JPY) 3,000 2,545.3 Decrease continues 2,500 2,392.0 223.1 231.9 Securitization of installment receivables (SOFTBANK MOBILE) 2,000 1,261.9 1,500 1,154.1 SBM loan (WBS)* 1,000 84.5 84.5 Vodafone Subordinated loan 489.9 473.4 Loans from other financial institution
Slide 20: Cash Position
Cash Position (bn JPY) Cash Position Cash position 600 Unused portion of credit line facility Cash position 537.8 increase 500 481.8 51.0 21.0 400 300 460.8 486.8 200 100 0 e/o March e/o June 2009 2009 19
Slide 21: Redemption Schedule of Corporate Bonds
Redemption Schedule of Corporate Bonds Abundant repayment resources available (bn JPY) Repayment Resources Bond Redemption Schedule Unused portion of credit line facility SOFTBANK straight bonds 600 Cash position 537.8 SOFTBANK TELECOM straight bonds 481.8 51.0 SOFTBANK convertible bonds * 500 21.0
Slide 22: Consolidated Net Interest-bearing Debt
Consolidated Net Interest-bearing Debt (bn JPY) 2,387.0 2,500 Reduction of JPY 481.8bn after merger of Vodafone K.K 2,000 1,905.1 231.9 Securitization of installment receivables 1,500 1,000 1,673.1 Other than securitization of installment receivables 500 Reduction of JPY 713.8bn 0 e/o June e/o June
Slide 23: First Corporate Bond Issue in Years
First Corporate Bond Issue in 2 Years June 27th Unsecured Straight Corporation Bond JPY 60.0bn (Fukuoka SoftBanks HAWKS Bond) (for individual investors) July 28th Unsecured Straight Corporate Bond JPY 30.0bn (for institutional investors) Secure a long and stable financing Resume access to corporate
Slide 24: Cash Flow Results
== ooftBank Cash Flow Results ee 2 3
Slide 25: Operating Cash Flow
Operating Cash Flow (bn JPY) 140 132.0 +79.1bn 120 (doubled) 100 80 Record high 60 52.8 for Q1 40 20 0 -20 -27.4 -40 FY07/Q1 FY08/Q1 FY09/Q1 24
Slide 26: CAPEX (acquisition base)
CAPEX (acquisition base) (bn JPY) 389.8 400 293.7 300 259.0 220.0 308.4 200 148.9 235.3 Mobile Communications 199.1 47.6 Broadband Infrastructure 100 Q1 82.6 22.1 40.3 Fixed-line Telecommunications 21.2 14.5 32.4 37.6 21.8 29.5 1.6 0 3.7 Others FY2005 FY2006 FY2007 FY2008 FY2009 (forecast) *Amounts
Slide 27: Free Cash Flow
Free Cash Flow (bn JPY) 100 Dramatic 50 56.5 improvement 0 +94.4bn -50 -37.8 -100 -150 -138.9 FY07/Q1 FY08/Q1 FY09/Q1 26
Slide 28: Status of FY2009 Earnings Forecast
Status of FY2009 Earnings Forecast (bn JPY) FY08 FY09 FY09 Actual Forecast Q1Actual Operating income 359.1 420.0 108.2 (+60.8) (+23.2) Free cash flow 181.5 250.0 56.5 (+68.4) (+94.4) No change in FY2009 Earnings Forecast *YoY comparison stated within brackets. 27
Slide 29: Future Cash Flow
—= SoftBank Future Cash Flow ——— Sa 2 8
Slide 30: Free Cash Flow Target
Free Cash Flow Target (bn JPY) Free Cash Flow 550 Goal to achieve around JPY 1 trillion* 350 free cash flow 250.0 cumulatively over 181.5 the next 3 years 150 Continued revenue FY07 FY08 FY09 FY10 FY11 -50 (forecast) and profit increases -164.2 -250 Around JPY 1trillion* 29 *Cumulative total target
Slide 31: Targeted Reduction of Net Interest-bearing Debt
Targeted Reduction of Net Interest-bearing Debt Net Interest-bearing Debt (bn JPY) 1.9t 2,000 Halve net Halve interest- 1,000 bearing debt 0 FY2011 FY2014 FY2008 (target) (target) *Lease obligations are not included in the net interest-bearing debt. 30 -1,000
Slide 32: Targeted Reduction of Net Interest-bearing Debt
Targeted Reduction of Net Interest-bearing Debt Net Interest-bearing Debt (bn JPY) Reduce 2,000 1.9t net interest-bearing Halve debt to zero 1,000 Zero 0 FY2011 FY2014 FY2008 (target) (target) *Lease obligations are not included in the net interest-bearing debt. 31 -1,000
Slide 33: Source of Cash Flow
Source of Cash Flow 1. Mobile Communications business 2. Fixed-line business 3. Yahoo Japan 32
Slide 34: Source of Cash Flow
Source of Cash Flow 1. Mobile Communications business 2. Fixed-line business 3. Yahoo Japan 33
Slide 35: Mobile Communications Business
Mobile Communications Business Increase in subscribers Cash income per subscriber Cash flow increase 34
Slide 36: Expanding Customer Base
Expanding Customer Base (k) 400 3 Major Mobile Operators FY09/Q1 Net Additions 350 320 300 260 250 200 Consistent 150 * 150 No.1 in net 100 50 adds in Q1 0 SOFTBANK NTT DOCOMO KDDI *Source: Telecommunications Carriers Association statistical data (excluding EMOBILE). 35
Slide 37: Expanding Customer Base
Expanding Customer Base Cumulative Subscribers (mil) Vodafone K.K. 20.96 * 20 No.1 in net adds for 26 15.20 consecutive 15 months *Source: Telecommunications Carriers Association statistical data (excluding EMOBILE). 10 Mar Sep FY2004 Mar Sep FY2005 Mar Sep FY2006 Mar Sep FY2007 Mar Sep FY2008 Mar F
Slide 38: Steady Cash Income per Subscriber
Steady Cash Income per Subscriber (JPY) Cash Income per Subscriber (Ave.)* Consistent 5,690 5,750 5,760 5,790 5,850 5,990 6,040 5,760 5,890 6000 5000 480 210 730 1,000 1,230 1,400 1,540 1,680 1,640 1,580 trend 210 230 250 270 280 270 280 4000 280 3000 2,150 HS installment payment 3,340 3,040 2,710 2
Slide 39: Steady Cash Income per Subscriber
Steady Cash Income per Subscriber (JPY) Cash Income per Subscriber * (average) Consistent 5,690 5,750 5,760 5,790 5,850 5,990 6,040 5,890 trend 5,760 6000 5000 4000 3000 2000 1000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2007 FY2008 FY2009 *Cash income per subscriber (average) = Data + Basic charge + Voice -
Slide 40: Toward Increasing Cash Flow
Toward Increasing Cash Flow Subscribers Cash Income per Subscriber Total Cash Income = 39
Slide 41: Enhanced Branding
—= SoftBank a Enhanced Branding ee 4 0
Slide 42: Further Branding Enhancement
Further Branding Enhancement Keeping high TV CM preference TV CM Preference Ranking By Company By Production By Brand* Apr 2nd 1st 1st 2009 (among 1,174 companies) (among 4,595) (among 3,146 brands) May 1st 1st 1st 2009 (among 1,037 companies) (among 3,929) (among 2,795 brands) Jun 1st 1st 1st 2009
Slide 43: Further Branding Enhancement
Further Branding Enhancement FY2008 TV CM Talent Preference Ranking Male Female 1st Dante Carver Aya Ueto 2nd Takuya Kimura Kanako Higuchi 3rd Shingo Katori Yukie Nakama * 4th Goro Inagaki Yu Aoi SMAP now 5th Masahiro Nakai Riko Narumi joins as a 6th Shun Oguri Yuko Takeuchi new brand 7th Satoshi Ts
Slide 44: Further Branding Enhancement
Further Branding Enhancement FY2008 CM Talent Preference Ranking Total (male + female + characters) 1st : White Family father * 2nd : Aya Ueto 3rd : Dante Carver All ranked in top 8 4th : Takuya Kimura (SMAP) (among 2,042 talents/characters) 5th : Kanako Higuchi 6th : Shingo Katori (SMAP) 7th : Goro
Slide 45: Enjoy our new TV CM
Enjoy our new TV CM 44
Slide 46: One Year Since iPhone 3G Release
TM One Year Since iPhone 3G Release 45
Slide 47: Astonishing Long Seller
Astonishing Long Seller Mobile HS Sales Ranking at Mass Appliance Retailers FY2008 FY2009 Q2 Q3 Q4 Q1 (ranking) 1st 1st 2nd 1st 0 1 50 Handset A Top 7 handsets (FY08 Q2) 100 KDDI Handset B 150 Handset C NTT DOCOMO Handset D 200 KDDI Handset F KDDI Handset E 46 Source: estimated by SOFTBANK based on
Slide 48: More Adoption by Corporate Users
More Adoption by Corporate Users After Introduction of iPhone Easily access e-mails with full functionality while traveling On-the-spot approval (higher work efficiency/speed) Dramatic changes in work styles *Case example: PriceWaterHouseCoopers. 47
Slide 49: Video clip of iPhone 3G experience at SoftBank HAWKS
Video clip of iPhone 3G experience at SoftBank HAWKS 48
Slide 50: SoftBank HAWKS in Top Shape
SoftBank HAWKS in Top Shape Position in Pacific League (2009) Won 2nd straight inter- league championship 1st Aim to win the pennant 2nd 3rd 4th 5th 6th Apr May Jun Jul 49 *As of 29 July. Showing a weekly position after 72 out of 144 tenant games played.
Slide 51: Release of iPhone 3GS
—= SoftBank a Release of iPhone 3GS —————————————— 50
Slide 52: Video clip of Eve Fest & Ceremony celebrating iPhone 3GS release
Video clip of Eve Fest & Ceremony celebrating iPhone 3GS release 51
Slide 53: iPhone Evolution Continues
iPhone Evolution Continues iPhone 3GS Purchase Motive Ranking (only exclusive functions) Flagship Internet Rank 1 Doubled speed Purchase Motive Ranking Machine 2 Improved memory size 3 Longer battery life 4 Video recording 5 Electronic compass Source: survey by SOFTBANK MOBILE. 52
Slide 54: Source of Cash Flow
Source of Cash Flow 1. Mobile Communications business 2. Fixed-line business 3. Yahoo Japan 53
Slide 55: Fixed-line Business Contributed to Profit Growth
Fixed-line Business Contributed to Profit Growth (JPY bn) Operating Income/loss of Fixed-line Business* 25.0 JPY 17.4bn SOFTBANK (Fixed-line business) 15.0 5.0 -5.0 -15.0 *Fixed-line business = Fixed-line Telecommunications segment + Broadband Infrastructure segment. -25.0 FY2005 FY2006 FY2007 FY200
Slide 56: Fixed-line Business Contributed to Profit Growth
Fixed-line Business Contributed to Profit Growth (JPY bn) 200 Operating Income/loss of Major Fixed-line Telecom Operators No.1 in 150 operating 100 JPY 66.2bn income SOFTBANK (Fixed-line business) 50 JPY 44.5bn NTT East & West 0 JPY -56.6bn -50 KDDI (Fixed-line telecom business) -100 FY03 FY04 FY05
Slide 57: Source of Cash Flow
Source of Cash Flow 1. Mobile Communications business 2. Fixed-line business 3. Yahoo Japan 56
Slide 58: Yahoo Japan Sustains Trend of Revenue and Profit Increases
Yahoo Japan Sustains Trend of Revenue and Profit Increases Net Sales of Internet Culture (JPY bn) Segment (mainly Yahoo Japan) 70 65.2 Revenue growth 62.3 60 trend continues 52.8 50 44.6 40 34.6 30 20 10 0 FY2005 FY2006 FY2007 FY2008 FY2009 Q1 Q1 Q1 Q1 Q1 57
Slide 59: Yahoo Japan Sustains Trend of Revenue and Profit Increases
Yahoo Japan Sustains Trend of Revenue and Profit Increases Operating Income of Internet Culture (JPY bn) Segment (mainly Yahoo Japan) Profit growth 31.7 30 27.1 30.5 trend continues 21.6 20 18.2 10 0 FY2005 FY2006 FY2007 FY2008 FY2009 Q1 Q1 Q1 Q1 Q1 58
Slide 60: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 59
Slide 61: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 1. Continuously developing Chinese markets 2. Advancement in China 60
Slide 62: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 1. Continuously developing Chinese markets 2. Advancement in China 61
Slide 63: Continuously Developing Chinese Markets
1. Continuously Developing Chinese Markets (Time of achievement) Nominal GDP USD 5.3t World No.2 (2010 forecast) Internet population 250mil World No.1 (2008) Mobile users 610mil World No.1 (2001) Foreign currency USD 2.1t World No.1 (2006) reserves New cars shipped 6.06mil units World No.1 (1st HF 2
Slide 64: Nominal GDP in Japan and China
Continuously Developing Chinese markets (USD t) 6 Nominal GDP in Japan and China Soon to be China world’s No.2 USD 5.3t (2010 forecast) 4 Japan USD 4.7t 2 Source: created by SOFTBANK based on data on ‘World Economic Outlook’ by IMF. 0 2000 2002 2004 2006 2008 2010 (CY) (forecast) 63
Slide 65: China has the World's No.1: Internet Population
China has the World’s No.1 (1) Internet Population (mil) 300 Internet Population World’s No.1 (achieved in 2008) 250 250mil China (19% penetration) 220mil US 200 (73% penetration) 150 100 50 Source: Created by SOFTBANK based on data in ‘WORLD INTERNET USAGE AND POPULATION STATISTICS’ by Internet Wor
Slide 66: China has the World's No.1: Mobile Phone Subscribers
China has the World’s No.1 (2) Mobile Phone Subscribers (mil) 800 Mobile Phone Subscribers World’s No.1 (achieved in 2000) China 600 610mil 400 US 270mil 200 Japan 100mil Source: created by SOFTBANK based on data on cumulative mobile phone subscription 0 in each country by Wireless Intelligence. 200
Slide 67: China has the World's No.1: Foreign Currency Reserves
China has the World’s No.1 (3) Foreign Currency Reserves (USD t) Foreign Currency Reserves World’s No.1 2.5 (achieved in 2006) China 2.0 USD 2.1t (e/o June 09) 1.5 Japan (World No.2) 1.0 USD 1.0t (e/o June 09) 0.5 Source: Created by SOFTBANK based on data on foreign currency reserves of each country
Slide 68: China has the World's No.1: New Cars Shipped
China has the World’s No.1 (4) New Cars Shipped (mil units) 10 New Cars Shipped World’s No.1 (achieved in 1st HF 2009) 8 China 6 6.06mil units 4 US 4.81mil units 2 Japan 219mil units Source: Created by SOFTBANK based on data by Bloomberg, 0 (CY) Japan Automobile Manufacturers Association and China A
Slide 69: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 1. Continuously developing Chinese markets 2. Advancement in China 68
Slide 70: Alibaba.com
Alibaba.com (mil) Registered Users * 50 Overwhelming No.1 ** 40.25 B2B e-commerce 40 in China 30 29.71 Exceeded 20 21.64 40mil users (35% growth YoY) 12.95 10 Source: created by SOFTBANK based on data disclosed by Alibaba.com. 0 *iResearch China B2B e-Commerce Report (2007-2008). Mar 2006 Mar 2007 M
Slide 71: Taobao.com
Taobao.com (mil) 120 Registered Users 100 98.48 Leading* consumer e-commerce**market 80 place in China 60 53.36 40 Dramatic 31.08 20 13.90 increase Source: Alibaba Group Holding Limited. 0 Dec 2005 Dec 2006 Dec 2007 Dec 2008 70 *iResearch China Online Shopping Research (2008-2009) **Includes interne
Slide 72: Potentially Bigger Than Total Sales of all Department Stores in Japan
Potentially Bigger Than Total Sales of all Department Stores in Japan Total Sales of Department Stores in Japan vs Transaction Volume of Taobao (JPY t) Sales of department stores in Japan * JPY 7.3t 8 (2008) Growing rapidly 6 4 ** JPY 2.7t (2009 forecast) 2 0 *Source: created by SOFTBANK based on da
Slide 73: OPI (Xiaonei)
OPI (Xiaonei) (mil) Registered Users 60 50 40 Exceeded 56 million users 30 (doubled in a year) 20 10 0 Jun Dec Jun Dec Jun FY2007 FY2008 FY2009 Source: Oak Pacific Interactive 72
Slide 74: OPI (Xiaonei & Kaixin)
OPI (Xiaonei & Kaixin) Exceeded 56mil users (mil) Registered Users (doubled in a year) 60 50 40 Exceeded 20mil users (doubled in two 30 months) 20 10 0 Jun Dec Jun Dec Jun FY2007 FY2008 FY2009 Source: Oak Pacific Interactive 73
Slide 75: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 74
Slide 76: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 75
Slide 77: Lifestyle Company in the 21st Century
Lifestyle Company in the 21st Century Broadband available to all living people everywhere 76
Slide 78: 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. 77
Slide 79: Trademark notices
* The names of other companies, other logos, product names, service names, brands, etc., mentioned in this material are registered trademarks or trademarks of SOFTBANK CORP. or the applicable companies. * Unauthorized copying of this material and use of the information or the data in this material i
Slide 80: FY2009/Q1 Appendix to the Earnings Results
FY2009/Q1 Appendix to the Earnings Results ） (Amounts less than one billion yen are omitted. / Net Sales to external customers FY2007 FY2008 FY2009 Business segment unit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Net sales bn JPY 389.0 419.8 403.1 406.8 370.6 399.4 374.6 409.9 405.0 Operating income bn JPY 43.5 50.