Softbank Group Corp. · TSE:9984
Softbank — Q2 FY2022 Earnings Presentation
30 slides from Softbank's earnings presentation, Nov 14, 2022
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2022
Earnings Results for the Six-month Period Ended September 30, 2022 Investor Briefing November 14, 2022 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (including Arm Limited, together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment inc
Slide 3: Exchange rates and abbreviations
Exchange rates per JPY used for translation FY2021 FY2022 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 110.00 110.47 113.60 117.10 129.04 138.68 1 CNY 17.01 17.09 17.75 18.43 19.60 20.19 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 122.39 144.81 1 CNY 19.26 20.37 Abbrevi
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results FY21 FY22 (¥ B) Q1-Q2 Q1-Q2 Change Change % Net sales 2,983.5 3,182.5 199.0 6.7% Income before 1,047.0 292.6 -754.3 -72.0% income tax Net income (attributable to owners of the 363.6 -129.1 -492.7 ― parent) (Reference) Loss on investments -395.2 -849.6 -454.4 ― Investment Busines
Slide 6: Change in Reportable Segments
Change in Reportable Segments From FY22Q1, the Latin America Funds segment has been integrated into the “SoftBank Vision Funds segment.” FY21 Investment SoftBank Business of SoftBank Arm Latin America Vision Funds Other Holding Companies Segment Segment Funds Segment Segment Segment SoftBank Latin A
Slide 7: No Impact on SBG from PayPay's Conversion into Subsidiary of SBKK
No Impact on SBG from PayPay’s Conversion into Subsidiary of SBKK PayPay became a subsidiary of SBKK and Z Holdings from Oct 2022. SBKK • PayPay’s conversion into a subsidiary: Plan to record remeasurement gain relating to business combination in FY22Q3. • Change in accounting policy: Plan to chan
Slide 8: Alibaba (Transactions in FY22Q2)
Alibaba (Transactions in FY22Q2) Scope of Ownership % consolidation As of Jun 30, 2022 Procurement through prepaid 23.7％ Jul forward contracts Equity method ($6.8B) associate Physical settlement of prepaid Jul forward contracts Aug – Early physical settlement of Exclusion from prepaid forward contra
Slide 9: Alibaba (Amounts Recorded in B/S)
Alibaba (Amounts Recorded in B/S) Equity method investments Investment securities (FVTPL) Alibaba share price Excluded from Recorded in “investment securities” $113.68 associates as financial assets at FVTPL with investment results measured at fair Increment by income on equity value method investme
Slide 10: Early Physical Settlement of Alibaba Prepaid Forward Contracts
Early Physical Settlement of Alibaba Prepaid Forward Contracts Corresponding to 242M ADRs Announced on Aug 10 • P/L: Recorded ¥5,371.6B in income before income tax for FY22Q2 → Recorded value of Alibaba shares that had not been counted in accounting • B/S: Reduced financial liabilities relating to p
Slide 11: Expected Cash Tax Related to Alibaba Shares
Expected Cash Tax Related to Alibaba Shares Expected cash tax of ¥203.7B at SBG’s wholly owned subsidiary mainly due to the realization of derivative gain related to the early physical settlement mentioned on the previous page (recorded in B/S as income taxes payable). Estimated as of Sep 30, 2022 t
Slide 12: Segment Income: SoftBank Vision Funds
Segment Income: SoftBank Vision Funds (¥ B) FY21 FY22 P/L Q1-Q2 Q1-Q2 FY22Q1-Q2 Items Loss on investments at SoftBank Vision Funds -549.1 -4,312.3 Loss on investments at SVF1, SVF2, and -549.8 -4,316.2 SVF1 -¥2,008.3B, SVF2 -¥1,934.4B, LatAm Funds -¥373.6B LatAm Funds SVF1 +¥3.3B (mainly monetizatio
Slide 13: Investment Performance of SVF1 and SVF2
(Reference) Investment Performance of SVF1 and SVF2 ($ B) Since Inception FY22*1 Investment Gain/loss Gain/loss Returns*2 Gain/loss cost*2 (Q2) (Q1-Q2) SVF1 89.4 102.9 13.5 -5.0 -15.2 (-¥695.2B) (-¥2,008.3B) Exited investments 21.8 39.9 18.1 0.2 0.0 Investments before exit 67.6 60.6 -7.0 -5.1 -14.0
Slide 14: Segment Income: Investment Business of Holding Companies
Segment Income: Investment Business of Holding Companies (¥ B) P/L item FY21 FY22 FY22Q1-Q2 Items Q1-Q2 Q1-Q2 Gain on investments at Investment Business of Holding Companies 279.7 3,524.7 Gain relating to settlement of prepaid forward contracts using Alibaba shares ― 4,838.3 See page 6 and 7 for det
Slide 15: Monetization of T-Mobile Shares
Monetization of T-Mobile Shares Number of shares held Procured (millions) Execution Transaction amount Deutsche timing T-Mobile ($ B) Telekom shares shares a Borrowings made using 106.3M T-Mobile shares pledged as collateral (margin loan) 4.38 Jul 2020 Number of shares held as of Jun 30, 2021 106.3
Slide 16: T-Mobile Shares: Holding and Fair Values
T-Mobile Shares: The Company’s Holding (incl. Deutsche Telekom’s Unexercised Call Options) & Fair Values • In Apr 2022, the Company sold 21.2M FY20 FY21 FY22 T-Mobile shares, following Deutsche 6/26 Q4-end Q1-end Q2-end Q3-end Q4-end Q1-end Q2-end Telekom's partial exercise of its call options. (Num
Slide 17: Deutsche Telekom Shares: Holding & Fair Values
Deutsche Telekom Shares: The Company’s Holding & Fair Values In Sep 2021, the Company FY21 FY22 acquired 225M Deutsche At execution Q2-end Q3-end Q4-end Ｑ1-end Q2-end in Sep Telekom shares in return for the sale of T-Mobile shares. Deutsche Telekom share price €18.95 €17.67 €17.40 €17.49 €16.93 €16.
Slide 18: T-Mobile Shares: Fair Values of Contingent Consideration
T-Mobile Shares: Fair Values of Contingent Consideration (Ref.) Closing price on Nov 11, 2022: $146.19 • Contingent T-Mobile share price $144.83 consideration: $134.85 $134.54 The Company’s right $127.76 $134.17 $125.29 $128.35 to acquire 48.8M T-Mobile shares for $114.36 $115.98 no additional $104.
Slide 19: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (¥ B) FY21 FY22 P/L item Change Q1-Q2 Q1-Q2 Net sales +2,983.5 +3,182.5 +199.0 Gain on investments at Investment Business of Holding Companies (consolidated basis): +¥3,524.7B (See page 11 for details) Gross profit +1,635.0 +1,721.3 +86.3 • Gain relating to settlemen
Slide 20: Consolidated B/S Summary (IFRSs) – Non-current assets
Consolidated B/S Summary (IFRSs) – 1 (¥ B) 1 Cash and cash equivalents: ¥5,886.2B（+¥717.2B） B/S item Main items Mar 2022 Sep 2022 Change SBG ¥3,259.2B（+¥756.6B） -¥407.5B decrease in derivative financial assets related to Alibaba prepaid 10,028.6 10,187.8 +159.2 forward contracts (mainly due to the p
Slide 21: Investment Securities on Consolidated B/S (Main Investments)
Investment Securities on Consolidated B/S (Main Investments) (¥ B) Mar 2022 Sep 2022 Change Outline Investment securities 3,085.4 7,362.6 +4,277.2 FVTPL 2,587.6 6,905.8 +4,318.2 4,484.8 +4,484.8 The carrying amount of Alibaba shares that continued to be held Alibaba ― ($30,970M) (+$30,970M) at FY22Q
Slide 22: Breakdown of Goodwill/Intangible Assets
Breakdown of Goodwill/Intangible Assets (¥ B) Change B/S Main items Mar 2022 Sep 2022 Outline Item Amorti- Changes in Others zation FX rate 4,897.9 5,459.2 * Arm 2,898.1 3,429.0 ― +530.9 ― Goodwill SBKK 907.5 907.5 ― ― ― LINE 630.6 630.6 ― ― ― ZOZO 212.9 212.9 ― ― ― Technologies 357.7 398.3 Main Arm
Slide 23: Consolidated B/S Summary (IFRSs) – Non-current liabilities
Consolidated B/S Summary (IFRSs) – 2 (¥ B) 1 SBG B/S Main items Mar 2022 Sep 2022 Change Borrowings (current and non-current) -¥843.0B item ・ Repaid borrowings under commitment lines: -$4.5B 12,381.5 9,467.8 -2,913.6 ・ Repaid entire senior loans: -¥325.2B (including ¥292.7B repaid before 1 maturity)
Slide 24: Consolidated B/S Summary (IFRSs) – Equity
Consolidated B/S Summary (IFRSs) – 3 (¥ B) B/S Items Mar 2022 Sep 2022 Change item 11,707.8 13,519.6 +1,811.8 1 Net loss attributable to owners of the parent: -¥129.1B Common stock 238.8 238.8 ― Capital surplus 2,634.6 2,653.8 +19.3 2 Shares repurchased under the total of up to ¥1 trillion authorize
Slide 25: Impact of the Weaker Yen on P/L & B/S (Illustration)
Impact of the Weaker Yen on P/L & B/S (Illustration) P/L B/S Entities Components Foreign exchange Exchange differences gain (loss) from translation Foreign currency- denominated cash and cash equivalents/ SBG stand-alone + Loans receivable Foreign exchange gain Subsidiaries conducting (excl. investm
Slide 26: Impact of the Weaker Yen in FY22Q1-Q2
Impact of the Weaker Yen in FY22Q1-Q2 Foreign exchange loss in consolidated P/L for FY22Q1-Q2: ¥1,095.4B SBG stand-alone: Foreign exchange loss of ¥1,605.1B related to foreign currency-denominated borrowings from Group companies, ¥197.2B related to foreign currency-denominated bonds (incl. hybrid bo
Slide 27: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (¥ B) C/F from operating activities: -¥1,522.7B yoy FY21 FY22 • Decrease in SB Northstar’s cash inflows: -¥1,674.5B C/F item Change Primary details for FY22Q1-Q2 Q1-Q2 Q1-Q2 • Decrease in income taxes paid (cash outflows): +¥438.5B Subtotal of cash flows from FY21Q1-
Slide 28: Co-investment Program to SVF2: Related Party Transactions
Co-investment Program to SVF2: Related Party Transactions Masayoshi Equity interests (third-party interests) SBG Son* 1 FY22Q2-end: $― (¥―) FY21-end: $2,207M (¥270.1B) Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $2,923M 100% (Return of capital) (i) Acquisition cos
Slide 29: Income Taxes Paid on a Consolidated Basis (Net)
Income Taxes Paid on a Consolidated Basis (Net) (¥ B) FY19 FY20 FY21 Consolidated 636.3 445.5 589.3 Japan 575.2 310.5 551.2 SBG and holding 324.7 35.7 200.0 companies Operating companies, mainly SBKK and 250.5 274.8 351.2 Yahoo Japan Overseas 61.1 135.0 38.1 Notes: • The amounts are the net amount o
Slide 30: Characteristics of SoftBank Group's Taxation
Characteristics of SoftBank Group’s Taxation • Income on the consolidated P/L Illustration for calculation of SBG’s non-consolidated is not directly connected to income before income tax and income taxes SBG’s non-consolidated tax Calculation of non- payment amount. consolidated income before income