Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2022 Earnings Presentation
33 slides from Softbank's earnings presentation, Feb 7, 2023
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2022
Earnings Results for the Nine-month Period Ended December 31, 2022 Investor Briefing February 7, 2023 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 110.00 110.47 113.60 117.10 129.04 138.68 141.16 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 122.39 132.70 Abbreviations Abbreviations used in Accounting section of th
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results FY21 FY22 (¥ B) Q1-Q3 Q1-Q3 Change Change % Net sales 4,580.8 4,875.8 294.9 6.4% Income before 1,234.7 -290.0 -1,524.8 - income tax Net income (attributable to owners of the 392.6 -912.5 -1,305.1 - parent) (Reference) Loss on investments -551.8 -1,361.2 -809.4 - Investment Busin
Slide 6: Change in Reportable Segments
Change in Reportable Segments From FY22Q1, the Latin America Funds segment is included in the SoftBank Vision Funds segment; from FY22Q3, PayPay is included in the SoftBank segment. FY21 Investment SoftBank Business of SoftBank Arm Latin America Vision Funds Other Holding Companies Segment Segment F
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: Recorded remeasurement gain of ¥294.8B relating to business combination in FY22Q3. • Change in accounting policy: Changed
Slide 8: Alibaba (Transactions in FY22Q2-Q3)
Alibaba (Transactions in FY22Q2-Q3) Scope of Ownership % consolidation *1 As of Jun 30, 2022 23.7％ Procurement through prepaid forward contracts Equity method Jul ($6.8B) associate Jul Physical settlement of prepaid forward contracts Early physical settlement of prepaid forward Exclusion from Aug–Se
Slide 9: Alibaba (Amounts Recorded in B/S)
Alibaba (Amounts Recorded in B/S) Equity method Investment securities (FVTPL) investments Excluded from Recorded in “investment securities” as Alibaba share price associates financial assets at FVTPL with investment Increment by income on equity $113.68 results measured at fair value method investme
Slide 10: Alibaba Shares and Derivative Financial Assets
Alibaba Shares and Derivative Financial Assets (Amount Recorded in B/S) Value of Alibaba shares recorded in B/S Investment securities (FVTPL) Derivative financial assets (net) considering prepaid forward contracts: Alibaba share price $88.09 $88.09 $32,825M ( A + B ) $79.99 $79.99 Of valuation gain
Slide 11: Expected Cash Tax Related to Alibaba Shares
Expected Cash Tax Related to Alibaba Shares SBG’s wholly owned subsidiary paid cash tax of ¥201.8B in FY22Q3 mainly due to the realization of derivative gain related to the early physical settlement of Alibaba prepaid forward contracts in Aug – Sep 2022. SBG estimated as of Dec 31, 2022 that cash ta
Slide 12: Segment Income: SoftBank Vision Funds
Segment Income: SoftBank Vision Funds (¥ B) FY21 FY22 P/L Q1-Q3 Q1-Q3 FY22Q1-Q3 Items Loss on investments at SoftBank Vision Funds -441.0 -5,042.7 Loss on investments at SVF1, SVF2, and LatAm Funds -442.9 -5,048.1 SVF1 -¥2,365.4B, SVF2 -¥2,240.0B, LatAm Funds -¥442.7B SVF1 +¥48.1B (mainly the full e
Slide 13: Investment Performance of SVF1 and SVF2
(Reference) Investment Performance of SVF1 and SVF2 ($ B) Since Inception FY22*1 Investment Gain/loss Gain/loss Returns*2 Gain/loss cost*2 (Q3) (Q1-Q3) SVF1 89.6 100.6 11.0 -2.5 -17.7 (-¥357.2B) (-¥2,365.4B) Exited investments 23.1 41.6 18.5 0.3 0.3 Investments before exit 66.5 56.6 -9.9 -2.6 -16.0
Slide 14: Segment Income: Investment Business of Holding Companies
Segment Income: Investment Business of Holding Companies (¥ B) P/L item FY21 FY22 FY22Q1-Q3 Items Q1-Q3 Q1-Q3 Gain on investments at Investment Business of Holding Companies 15.8 3,699.7 Gain relating to settlement of prepaid forward contracts using Alibaba shares 68.1 4,838.3 See pages 5 and 30 for
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: The Company's Holding & 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 Q3-end Telekom's partial exercise of its call option
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 Q3-end in Sep Telekom shares in return for the sale of T-Mobile shares. Deutsche Telekom share price €18.95 €18.64 €17.67 €17.40 €17.
Slide 18: T-Mobile Shares: Fair Values of Contingent Consideration
T-Mobile Shares: Fair Values of Contingent Consideration (Ref.) Closing price on Feb 3, 2023: $145.19 • Contingent T-Mobile share price $144.83 consideration: $140.00 $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 $1,094.3M (¥
Slide 19: Loans/Guarantees/Loan Facility to WeWork
Loans/Guarantees/Loan Facility to WeWork Expected credit losses increased mainly due to worsening credit spreads for WeWork notes traded in the market. ($ M） B/S P/L FY22 Q3-end Carrying amount Account FY22Q1-Q3 Account (minus figures （breakdown） Loss recorded show liabilities) Other financial Other
Slide 20: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (¥ B) FY21 FY22 P/L item Change Q1-Q3 Q1-Q3 Net sales +4,580.8 +4,875.8 +294.9 Gain on investments at Investment Business of Holding Companies (consolidated basis): +¥3,699.6B (See page 11 for details) Gross profit +2,477.0 +2,579.1 +102.2 • Gain relating to settleme
Slide 21: Consolidated B/S Summary (IFRSs) – 1 Non-current assets
Consolidated B/S Summary (IFRSs) – 1 (¥ B) 1 Cash and cash equivalents: ¥5,778.1B（+¥609.1B） B/S item Main items Mar 2022 Dec 2022 Change SBG ¥2,896.0B（+¥393.4B） -¥1,033.6B decrease in derivative financial assets related to Alibaba prepaid 10,028.6 9,540.8 -487.8 forward contracts (due to the settlem
Slide 22: Investment Securities on Consolidated B/S (Main Investments)
Investment Securities on Consolidated B/S (Main Investments) (¥ B) Mar 2022 Dec 2022 Change Outline Investment securities 3,085.4 6,854.0 3,768.7 FVTPL 2,587.6 6,431.5 3,843.9 The carrying amount of Alibaba shares held at FY22Q3-end was ¥4,148.6B, mainly reflecting the physical settlement of a porti
Slide 23: Breakdown of Goodwill/Intangible Assets
Breakdown of Goodwill/Intangible Assets (¥ B) Change B/S Main items Mar 2022 Dec 2022 Outline Item Amorti- Changes in Others zation FX rate 4,897.9 5,170.3 * Arm 2,898.1 3,142.1 ― 244.0 ― Goodwill SBKK 907.5 907.5 ― ― ― LINE 630.6 629.5 ― ― ― ZOZO 212.9 212.9 ― ― ― Technologies 357.7 353.6 Main Arm
Slide 24: Consolidated B/S Summary (IFRSs) – 2 Liabilities
Consolidated B/S Summary (IFRSs) – 2 (¥ B) 1 SBG B/S Borrowings (current and non-current) -¥886.1B Main items Mar 2022 Dec 2022 Change ・ Repaid borrowings under commitment lines: -$4.5B item ・ Repaid entire senior loans: -¥325.2B (including ¥292.7B repaid before 12,381.5 9,186.6 -3,194.8 maturity) 1
Slide 25: Consolidated B/S Summary (IFRSs) – 3 Equity
Consolidated B/S Summary (IFRSs) – 3 (¥ B) B/S Items Mar 2022 Dec 2022 Change item 1 11,707.8 10,593.6 -1,114.2 Repurchase of a portion of the USD-denominated Undated Subordinated Non-Call 6 years Resettable Notes (the Hybrid Notes): $0.75B (face value) Common stock 238.8 238.8 ― Capital surplus 2,6
Slide 26: 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 27: Impact of the Weaker Yen in FY22Q1-Q3
Impact of the Weaker Yen in FY22Q1-Q3 Foreign exchange loss in consolidated P/L for FY22Q1-Q3: ¥728.0B SBG stand-alone: Foreign exchange loss of ¥900.8B related to foreign currency-denominated borrowings from Group companies, ¥82.3B related to foreign currency-denominated bonds (incl. hybrid bonds)
Slide 28: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (¥ B) FY21 FY22 C/F from operating activities: -¥1,684.1B yoy C/F item Change Primary details for FY22Q1-Q3 • Decrease in SB Northstar’s cash inflows: -¥1,791.4B Q1-Q3 Q1-Q3 Subtotal of cash flows from • Decrease in income taxes paid (cash outflows): +¥254.5B C/F fro
Slide 29: 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 FY22Q3-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 30: 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 31: 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
Slide 32: Appendix
Appendix
Slide 33: Early Physical Settlement of Alibaba Prepaid Forward Contracts
Early Physical Settlement of Alibaba Prepaid Forward Contracts Corresponding to 242M ADRs Announced on Aug 10, 2022 • 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 relatin