Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2022
Earnings Results for the Fiscal Year Ended March 31, 2022 Investor Briefing May 13, 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 FY2020 FY2021 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 107.74 105.88 104.45 106.24 110.00 110.47 113.60 117.10 1 CNY 15.16 15.27 15.71 16.31 17.01 17.09 17.75 18.43 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 110.71 122.39
Slide 4: How We See the Current Environment
How We See the Current Environment Developments in U.S. monetary policy and increased geopolitical risks posed by the Russia-Ukraine issue 3.5 170 105 10 Year May 6, NASDAQ 2 Year 2022 S&P500 3.1% 160 May 6, 3 2022 100 -4.9% 150 ＋47% May 6, 2.3% -9.1% 2022 2.5 140 95 -13.5% 2.7% 130 2 90 120 +33% 2.
Slide 5: U.S.-listed Chinese stocks sliding amid regulatory developments
How We See the Current Environment U.S.-listed Chinese stocks are sliding in the wake of regulatory developments in both U.S. and China ($) Announcement of policies & regulations 25,000 in U.S. and China Regulatory and policy development in China Jun 2021: Data Security Law was passed Aug 2021: ”Com
Slide 6: How We Act under the Current Environment
How We Act under the Current Environment Understanding of current environment SBG in FY21 ◆ External environment remains highly ◆ Equity value of holdings declined amid volatile with capital markets in a volatile market conditions broadly risk-off mode ◆ Firmly kept the financial policies: LTV maint
Slide 7: Finance
Finance SBG stand-alone financial figures are calculated by excluding those of self- financing entities from the consolidated figures, unless otherwise stated. Major self-financing entities are SBKK (including its subsidiaries such as Z Holdings), SVF1, SVF2, SoftBank Latin America Funds, Arm, and P
Slide 8: Summary of FY21
Summary of FY21*1 Steadily continued investment activities and shareholder returns, while firmly keeping financial policies even under the volatile market environment Recorded net loss of ¥1,708.0B mainly due to falls in share prices of listed Results portfolio companies / NAV - Recorded ¥3,434.7B i
Slide 9: Results of Investment Businesses
- Results of Investment Businesses - Financial Condition - Financial Strategy - ESG Initiatives Finance 3
Slide 10: Investment Activities of the Group
Investment Activities of the Group Multiple investment entities are active in their focused fields, preparing for the arrival of full-scale AI era SBG SVF1 AI ＆ Unicorns Existing investments 82 companies in total etc. SVF2 Latin America Funds AI & Unicorns AI & Unicorns (in Latin America) etc. 101 c
Slide 11: Investment Strategy of SoftBank Group
Investment Strategy of SoftBank Group SoftBank Group ＝ “Vision Capitalist” for the Information Revolution ◼ Drive the Information Revolution with portfolio companies and group companies by providing capital to bring the vision to life ◼ Focus on maximizing investment return from a mid- to long- term
Slide 12: Gain (Loss) on Investments & Net Income
Gain (Loss) on Investments & Net Income Investment loss of ¥3,434.7B and net loss of ¥1,708.0B Gain (loss) on investments Net income (attributable to owners of the parent) ■ Investment Business of Holding Companies ■ SVF1&2 ¥7,529.0B ■ Latin America Funds ■ Other ¥4,988.0B ● Total gain (loss) on inv
Slide 13: Calculation of NAV (Net Asset Value)
Calculation of NAV (Net Asset Value) (as of Mar. 31, 2022) NAV = ¥18.5T (¥ T) Adjustment for SBG stand-alone interest-bearing debt ¥14.9T*3 asset-backed finance － SBG stand-alone cash position ¥2.7T*3 5.8 （V） （L） NAV 4.7 （V）-（L） 12.1 29.0 23.2 7.4 【19.4】兆円 Adjustment for asset-backed finance ¥7.3T 1
Slide 14: NAV & NAV per Share
NAV & NAV per Share NAV decreased by 31% YoY NAV (Net Asset Value) NAV per share*1 and share price (¥ T) (¥) Share price 26.7 NAV per share 15,353 15,000 18.5 11,204 10,000 9,330 5,559 5,000 0 Mar 21 Mar 22 Mar 21 Mar 22 (Note) As of the end of each fiscal year *1 NAV per share = NAV/Total number of
Slide 15: Equity Value of Holdings
Equity Value of Holdings Equity value of holdings decreased to ¥23.2T Excl. asset-backed finance Composition (as of March 31, 2022) (¥ T) T-Mobile 23％ Alibaba 4％ 32.1 10％ SBKK 0.4％ Deutsche Telekom 30.4 17％ SVF1 12％ Arm 21％ SVF2 3% SB Northstar 25.7 5％ Latin America Funds 6％ Other 24.7 23.2 12.4 See
Slide 16: Equity Value of Holdings: Diversification of Portfolio
Equity Value of Holdings: Diversification of Portfolio Greater asset diversification mainly due to investment progress Excl. asset-backed finance in SVF2. March 31, 2021 March 31, 2022 Proportion of Proportion of listed shares SB Northstar listed shares (net of asset-backed finance) (net of asset-ba
Slide 17: SVF1&2: Cumulative Investment Return
SVF1&2: Cumulative Investment Return (SBG Consolidated Basis, as of Mar. 31, 2022) Cumulative investment return of $117.9B at SVF1 and $47.6B at SVF2 SVF1 SVF2 ($ B) ($ B) 150 75 117.9 47.5 47.6 100 89.2 Exited*1 2.1x 50 Exited*1 1.9x Currently held 1.1x Currently held 0.9x and listed and listed 50
Slide 18: SVF1&2 etc. Fair Value of Portfolio Companies
SVF1&2 etc. Fair Value of Portfolio Companies (as of Mar. 31, 2022; unrealized value only) Regional composition remained almost unchanged from the end of December 2021 Asia, Europe, U.S. Investments in China (fair value) Latin America, etc. 34% decreased from December-end, while fair value of invest
Slide 19: SVF1&2: Average Investment Cost Scaled Down
SVF1&2: Average Investment Cost Scaled Down SVF2’s average investment cost per company is $0.2B SVF1 SVF2 Average investment cost Average investment cost per company per company $0.9B $0.2B Cumulative Cumulative investment cost $87B investment cost $41B Cumulative number Cumulative number of investm
Slide 20: Activities of SVF1&2 (FY21): Investments
Activities of SVF1&2 (FY21): Investments New and follow-on investments by SVF1&2 totaled $44.2B, mainly by SVF2 Sale / Investment New listing Monetization ($ B) SVF2 made new & follow-on investments of $40.8B in FY21, including new investments in 2.1 207 companies 0.4 0.4 13.5 13.7 9.2 0.5 SVF1 Tota
Slide 21: Activities of SVF1&2 (FY21): New Listings
Investment Activities of SVF1&2 (FY21): New Listings A total of 21 companies listed; with multiple large listings Sale/ Investment New listing Monetization Fund Companies listed *1 *1 SVF1 12 companies with a total fair value of $13.9B as of Mar. 31, 2022 (Dingdong) *1 *1 SVF2 (JD Logistics) 11 comp
Slide 22: Activities of SVF1&2 (FY21): Sale/Monetization
Investment Activities of SVF1&2 (FY21): Sale/Monetization A total of $24.6B of sales & monetization*1*2 Sale/ Investment New listing Monetization Fund Sale/Monetization*1 SVF1 Partial sale of 13 investments incl. above and entire sales of 2 investments*1 $16.5B in total*1*2 （partial） SVF2 KE Holding
Slide 23: Cycle of Investment and Recovery (FY21)
Cycle of Investment and Recovery (FY21) Approx. ¥2.2T invested capital was recovered and funded for new investments. Share repurchase continued. Investments/ Contribution to SVF1 ¥65.4B ($0.6B) Return to shareholders Source of funds Distribution from SVF1*1 & 2 ¥1,708.0B Distribution from ($15.2B) S
Slide 24: SVF1&2: Capital Commitment
SVF1&2: Capital Commitment (as of Mar. 31, 2022) ($ B) 2.6 *1 SVF1 33.1 （29.9） SVF2 53.4 65.5 98.6 56.0 （57.3） (87.2) (48.2) SBG Third-party limited partners Management, etc.*2 * Numbers in brackets represent amounts drawn. *1 The presented SBG’s committed capital to SVF1 includes approximately $8.2
Slide 25: Arm: Revenue and Adjusted EBITDA
Arm: Revenue and Adjusted EBITDA Revenue*1 (annual) Adjusted EBITDA*2 (annual) ($ M) $2,665M ($ M) 1,980 1,823 1,788 1,809 1,689 $999M 827 596 436 371 365 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 (Notes) 1. Source: Arm 2. Based on, but not necessarily in conformity with IFRS 3. Al
Slide 26: Arm: Preparation for IPO
Arm: Preparation for IPO Arm-based chips shipped (annual)*1 Market share*2 29.0B Mobile IoT Powering the 95% 63% Information Revolution Becoming the key player in growth industries Automotive Cloud 24% 5% ‘90 ‘90'90 ‘94 ’94 ‘98 ’98 ‘02 ’02 ‘06 ’06 ‘10 ’10 ‘14 ’14 ‘18 ’18 Arm will prepare for an IPO
Slide 27: Financial Condition
- Results of Investment Businesses - Financial Condition - Financial Strategy - ESG Initiatives Finance 21
Slide 28: Main Financing Activities in FY21Q4
Main Financing Activities in FY21Q4 Executed asset-backed finance with agility Domestic subordinated bonds Corporate Issued domestic subordinated bonds (Feb) +¥550.0B (+$4.7B) bonds Redeemed domestic subordinated bonds at -¥404.4B ( -$3.5B) maturity (Feb) Arm shares Asset-backed finance (Mar) +$8.0B
Slide 29: LTV Trend
LTV Trend*1 Continue to maintain ample financial buffer Excluding asset-backed finance 25% 21.6% 18.7% *2 17.5% 20.4% 15.9% 14.3% 11.6% 12.2% 8.8% Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 *1 As of the end of each quarter *2 See “LTV Calculation: SBG Stand-alone Net Debt” and “L
Slide 30: Cash Position
Cash Position Maintain ample cash position, more than sufficient for bond redemptions for the next 2 years Cash position Bond redemption schedule*2 ¥2.9T *1 (¥ B) 124.7 Undrawn commitment line*3 Bond redemptions 2,749.9 for the next 2 years (¥1.3T) ＞ 426.0 873.2 711.8 1,021.2 Mar 22 Apr 22 - Mar 23
Slide 31: Bond Redemption Schedule
Bond Redemption Schedule Redemptions were funded by carefully managed bond issuance with due consideration for the market environment. Domestic senior bonds (¥ B) 1,378.8 Domestic subordinated bonds Domestic hybrid bonds 1,140.6 328.8 Foreign currency-denominated senior notes Foreign currency-denomi
Slide 32: SBG Credit Spread
SBG Credit Spread SBG’s credit has been softening since the beginning of the year against a backdrop of deteriorating credit market Spread of SBG foreign currency- denominated notes SBG 5 years CDS bps bps 650 450 600 400 550 500 350 450 300 400 350 250 300 200 250 150 200 150 100 100 EUR 2.2Y USD 2
Slide 33: Asset-backed Finance Using Arm Shares (March 2022)
Asset-backed Finance Using Arm Shares (March 2022) Monetization of Arm shares ahead of planned IPO, contributing to improved financial flexibility Participating financial Financing terms institutions Total JP Morgan financing $8.0B Mizuho Bank amount Goldman Sachs Collateral Arm shares held by SBG (
Slide 34: SBG Stand-alone Interest-bearing Debt
SBG Stand-alone Interest-bearing Debt*1 Interest-bearing debt excl. non-recourse items remained stable Main variance factors from Dec. 31, 2021 • Issuance of domestic subordinated bonds +¥550.0B (¥ B) 14,918.7 • Redemption of domestic subordinated bonds on maturity -¥404.4B 14,033.4 13,967.4 13,860.
Slide 35: SBG Stand-alone Cash Position
SBG Stand-alone Cash Position Cash position increased due to asset-backed finance (¥ B) 3,589.6 3,357.9 Cash position of SB Northstar 3,103.3 3,079.9 991.6 595.9 2,681.1 330.0 1,008.1 Main variance factors from Dec. 31, 2021 582.1 Increase Decrease ・Asset-backed finance using Arm shares ・SVF2 capita
Slide 36: SBG Stand-alone Net Interest-bearing Debt
SBG Stand-alone Net Interest-bearing Debt Adjusted net interest-bearing debt decreased due to accelerated monetization 12,135.3 11,486.0 Excl. SB Northstar 10,919.2 (¥ B) 10,513.7 8,558.8 Adjustments relating to finance Asset-backed finance -¥7,323.6B 6,163.8 7,411.2 Hybrid finance -¥87.6B 5,397.8 6
Slide 37: Adjustment for Asset-backed Finance for LTV and NAV Calculation
Adjustment for Asset-backed Finance for LTV and NAV Calculation Non-recourse asset-backed finance is deducted from debt, and value of assets required for settlement is deducted from assets Collar/Forward/Put (¥ T) 1 2 Margin loan, etc. transactions 29.0 Shares Alibaba/T-Mobile/Deutsche Alibaba/T-Mob
Slide 38: (Reference) Forward / Collar Transaction
(Reference) Forward / Collar Transaction Objective Non-recourse financing using derivatives • Transaction in which parties agree to settle at a pre-specified price or price range at a specific date in the future • Fund procurement through pledged shares and derivative referencing them Outline • Sett
Slide 39: Financial Strategy
- Results of Investment Businesses - Financial Condition - Financial Strategy - ESG Initiatives Finance 33
Slide 40: Financial Strategy for FY22
Financial Strategy for FY22 Already established optimal financial management structure as an investment company (2) Flexible and agile (1) Firmly keeping financial management financial policy that can respond to any changes Finance 34
Slide 41: (1) Firmly Keeping Financial Policy
(1) Firmly Keeping Financial Policy 1. Manage LTV below 25% in normal times (upper threshold of 35% even in times of emergency) 2. Maintain funds covering bond redemptions for at least the next 2 years 3. Secure recurring distribution and dividend income from SVF1&2 and other subsidiaries Finance 35
Slide 42: (2) Flexible and agile financial management
(2) Flexible and agile financial management that can respond to any changes ◆ Already established a cycle of “investment” → “value realization /monetization” → ”reinvestment (partially to shareholder returns)” as an investment company ◆ Investment activities/shareholder returns continue while firmly
Slide 43: Cycle of Investment and Recovery in FY2020
Cycle of Investment and Recovery in FY2020: Breakdown of Investment and Monetization Allocated capital generated by ¥4.5T Program mainly to share repurchase and financial improvements. Started to manage surplus funds through investment in SB Northstar (¥ T) ¥4.5T Program Invest- ment*1 Share repurch
Slide 44: Cycle of Investment and Recovery in FY2021
Cycle of Investment and Recovery in FY2021: Breakdown of Investment and Monetization Allocated capital generated by various means primarily to new investments SB Northstar monetization Invest- (¥ T) Sale/ monetization*1 *3 ment*2 *3 SVF1&2 distribution Bond issuance/ redemption, Interest Share payme
Slide 45: Direction of Financial Management for FY2022
Direction of Financial Management for FY2022 (Illustrated) Flexible and agile response to any changes in the external environment LTV (％) Scenario Assumption Action to be taken 25 External Uncertainty in the Continue new Firmly committed to the financial policy of environment external environment in
Slide 46: Share Repurchase
Share Repurchase Total repurchase amount: ¥1T (maximum) Details Repurchase period: From Nov. 9, 2021 to Nov. 8, 2022 1. Firm commitment to the financial policies A flexible approach to purchase shares considering 2. Investment opportunities these factors Policies 3. Level of NAV discount Depending o
Slide 47: ESG Initiatives
- Results of Investment Businesses - Financial Condition - Financial Strategy - ESG Initiatives Finance 41
Slide 48: Summary of ESG Initiatives in FY21: Governance
Summary of ESG Initiatives in FY21: Governance Promoting diversity in the Board of Directors • More diversified Board in terms of skills, gender, and nationality • 5 out of 9 directors are External Directors, composing a majority Development of Group ESG policies • Developed Group policies on ESG ar
Slide 49: Summary of ESG Initiatives in FY21: Environment
Summary of ESG Initiatives in FY21: Environment Established GHG emission reduction targets and promoted reduction actions • Major subsidiaries are on track to achieve GHG targets Achieve Net Zero Carbon Achieve Carbon Neutrality Achieve Carbon Neutrality Convert 100% of electricity by 2030 by FY2030
Slide 50: Summary of ESG Initiatives in FY21: Society
Summary of ESG Initiatives in FY21: Society Promotion of human rights initiatives • SBG – Conducted an assessment targeting all officers and employees and identified areas of human rights risk to consider countermeasures – Aiming to expand human rights initiatives to suppliers and group companies in
Slide 51: ESG Promotion through Investment
Summary of ESG Initiatives in FY21: ESG Promotion through Investment Actively invest in start-ups that address ESG issues by providing services that contribute to climate change mitigation, circular economy, D&I, and elimination of disparity and discrimination ※This slide shows examples of portfolio
Slide 52: Expansion of Disclosure/Status of Major ESG Indices
Expansion of Disclosure/Status of Major ESG Indices Expansion of disclosure • Increased non-financial information in the Annual Report and the Sustainability Report – Extensively increased the number of group companies and measures subject to disclosure and will continue to expand disclosure Status
Slide 53: Appendix
Appendix
Slide 54: Equity Value of Holdings (Calculation Method)
Equity Value of Holdings (Calculation Method) 1USD = ¥122.39 ¥29.0T (non-adjusted) Adjustment for (¥ T) Equity value of holdings; Equity value of holdings; asset-backed finance Alibaba 2.7 adjusted ＝ non-adjusted ー Collar contracts, shown in the dotted box T-Mobile 0.4 Deutsche Telekom etc. 3.5 Shar
Slide 55: LTV Calculation: SBG Stand-alone Equity Value of Holdings
LTV Calculation: SBG Stand-alone Equity Value of Holdings (L) Adjusted ¥4.72T SBG stand-alone net debt (V) Adjusted SBG stand-alone =20.4% equity value of holdings*1 ¥23.18T (¥ T) Adjusted SBG Interest of SBG in Other Major = + + stand-alone equity SVF1&2 & Latin Investments in value of holdings ass
Slide 56: Details of SBG Stand-alone Equity Value of Holdings (1/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (1/2) (¥ T) Assets Value Calculation method (a) Alibaba 5.23 Multiplying the number of Alibaba ADSs equivalent to the number of shares held by SBG by Before adjustment 8.67 the ADS price Deducting (a) and (b) below (amount required
Slide 57: Details of SBG Stand-alone Equity Value of Holdings (2/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (2/2) (¥ T) Assets Value Calculation method (g) T-Mobile 0.96 summing - Value of SBG’s shareholding (incl. the number of shares subject to call options held by Deutsche Telekom (DT): 56,124,954 shares as of Mar. 31, 2022) × the sha
Slide 58: LTV Calculation: SBG Stand-alone Net Debt
LTV Calculation: SBG Stand-alone Net Debt (L) Adjusted SBG stand-alone net debt*1 ¥4.72T (V) Adjusted SBG stand-alone =20.4% ¥23.18T equity value of holdings (¥ T) Adjusted SBG Consolidated Net debt at self- Other = - stand-alone net - debt net debt financing entities adjustments 4.72 17.10 4.97 7.4
Slide 59: LTV Calculation: Details of SBG Stand-alone Net Debt
LTV Calculation: Details of SBG Stand-alone Net Debt (¥ T) SBG stand-alone net debt Consolidated net interest-bearing debt, 12.14 net of interest-bearing debt at self-financing entities (before adjustment) - Add 50% to interest-bearing debt (to treat it as liability) for USD Hybrid Notes issued in J
Slide 60: SBG Credit Rating Trend
SBG Credit Rating Trend Aim to improve credit rating under the investment holding company rating criteria Acquisition of Acquisition of Acquisition Acquisition Listing 14 A+ Japan Telecom Vodafone KK of Sprint of Arm of SBKK 13 A 12 JCR (A－) A- Outlook Positive 11 BBB+ 10 On November 2, 2021, JCR BB
Slide 61: SB Northstar: Cumulative Investment Gain (Loss)
SB Northstar: Cumulative Investment Gain (Loss)*1 ¥283.9B -¥225.0B -¥213.6B＊2 -¥521.2B -¥462.4B Impact on net income ¥248.7B＊2 attributable to SBG Positive impact Stocks Stocks + credit Derivatives Total investment on net income due to losses borne transactions loss by Masayoshi Son SBG SB Northstar
Slide 62: SB Northstar: Assets Under Management
SB Northstar: Assets Under Management (as of Mar. 31, 2022) Significant downsizing of investments Stocks, etc. and derivatives (fair value) Notional principal of options （¥ B） $44.3B Long call option 2,371.5 of listed stocks 1,741.0 $13.4B $11.2B Stocks & other $4.9B $4.4B instruments*1 $1.4B 2,198.
Slide 63: Consolidated Interest-bearing Debt / Cash Position
Consolidated Interest-bearing Debt/ Cash Position/ Net Interest-bearing Debt Consolidated Interest-bearing Debt *1 （\ B） Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 SBG stand-alone 13,023.3 14,033.4 13,967.4 13,860.4 14,918.7 Incl. SB Northstar 1,866.5 1,424.5 286.3 275.4 33.5 SVF1 and SVF2 444.2 543.3 827.2
Slide 64: Introduction of Co-investment Program to SVF2
Introduction of Co-investment Program to SVF2 Co-investment by management in SVF2 together with SBG, sharing both the profits and risks associated with investments, will lead to enhanced focus on the fund and contribute to SBG’s earnings growth. Masayoshi Son & SBG other Management, etc.*1 Equity Pr