Softbank Group Corp. · TSE:9984
Softbank — H1 FY2017 Earnings Presentation
89 slides from Softbank's earnings presentation, Nov 8, 2017
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2017
Earnings Results for the Six-month Period Ended September 30, 2017 Investor Briefing November 8, 2017 SoftBank Group Corp.
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER This presentation (this “Presentation ”) is furnished on a confidential basis to a limited number of sophisticated parties for informational due diligence purposes and is not, and may not be relied on in any manner as, legal, tax, investment, accounting or other advice or as an offe
Slide 3: Disclaimer
Disclaimer This material was prepared based on information available and views held at the time it was made. Statements in this material that are not historical facts, including, without limitation, plans, forecasts and strategies are “forward-looking statements”. Forward-looking statements are by t
Slide 4: Definition of Company Names and Abbreviations
■Definition of Company Names and Abbreviations Used in this material Except as otherwise stated or interpreted differently in the context, company names and abbreviations are as follows: Company names / Abbreviations Definition SoftBank Group Corp. (SBG) SoftBank Group Corp. (standalone basis) The C
Slide 5: Accounting
Accounting 5
Slide 6: Segments and Core Companies
Segments and Core Companies <FY16> <FY17> Reportable Reportable Core companies Core companies segments segments Domestic SoftBank Domestic SoftBank Telecommunications Wireless City Planning Telecommunications Wireless City Planning Sprint Sprint Sprint Sprint Yahoo Japan Yahoo Japan Yahoo Japan ASKU
Slide 7: Structure of SoftBank Vision Fund
Structure of SoftBank Vision Fund (conceptual image) • SoftBank Vision Fund (SVF) consists of a fund managed by SVF GP (Jersey) Limited ("Vision Fund"), a fund managed by SB Delta Fund GP (Jersey) Limited ("Delta Fund"), and advisory companies which will provide investment advice to each general par
Slide 8: Accounting Treatment for Investment Portfolio
Accounting Treatment for Investment Portfolio (investees) SBG consolidated financial statements treat: subsidiaries: consolidated / other: financial instruments at FVTPL in principle. SBG consolidation: Fund (stand-alone): SoftBank Group Corp. SoftBank Group Corp. (NOT investment entity under IFRS)
Slide 9: Accounting Treatment for Third-party Interests in SVF
Accounting Treatment for Third-party Interests in SVF Third-party interests are classified as liabilities Fund life is finite; Third-party interests Obliged to distribute classified as “liabilities” to investors Types of contribution to SVF; - Equity (Performance-based) - Preferred Equity (Fixed) 9
Slide 10: Capital Deployment of SVF
Capital Deployment of SVF (Vision Fund & Delta Fund) (as of Sept. 30, 2017) SVF (USD bn) (Vision Fund & Delta Fund) The Company Third-party investors Committed capital as of Initial Closing 93.2 28.0 65.2 Additional committed capital 4.5 4.5 - 97.7 32.5 65.2 Total committed capital In-kind contribut
Slide 11: Investments of SVF
Investments of SVF (Vision Fund & Delta Fund) (as of Sept. 30, 2017) Main investees Acquisition As of Sept. 30,2017 Fair value Investees cost Businesses (in alphabetical order) Arm *1 Semiconductor technology (a part of SBG’s holding) designer Online retailer of Fanatics licensed sports merchandise
Slide 12: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) FY16 FY17 P/L item Change Main breakdown of changes Q1-Q2 Q1-Q2 Continuing operations <JPY bn> Net sales 4,271.8 4,411.1 +139.3 Operating income 647.4 688.6 +41.2 (excluding SVF) Operating income Unrealized gain on valuation of investments of 194.3, mainly reflecting
Slide 13: Consolidated B/S Summary (IFRSs)
Consolidated B/S Summary (IFRSs) - 1 <JPY bn> B/S As of As of Main items Mar. 2017 Sept. 2017 Change Main breakdown item Current assets 5,724.0 6,762.8 +1,038.8 Cash and cash 2,183.1 3,462.7 +1,279.6 See Cash Flow on page 18 for details. equivalents Other financial assets 794.7 539.9 -254.8 Sprint s
Slide 14: Breakdown of Goodwill
Consolidated B/S Summary (IFRSs) - 2 - Breakdown of Goodwill <JPY bn> B/S As of As of Change item Main items Mar. 2017 Sept. 2017 Changes in Outline Others exchange rate 4,175.5 4,392.9 +218.8 -1.4 Decrease in “others” is related to adjustment Arm 2,687.9 2,899.9 +216.3 -4.3 to the provisional amoun
Slide 15: Breakdown of Intangible Assets
Consolidated B/S Summary (IFRSs) - 3 - Breakdown of Intangible Assets <JPY bn> B/S As of As of Change Main items Outline item Mar. 2017 Sept. 2017 Amortization Changes in Others exchange rate FCC licenses 4,100.7 4,175.2 - +20.3 +54.2 (non-amortized) Increase in “others” mainly related to FCC licens
Slide 16: Consolidated B/S Summary: Liabilities
Consolidated B/S Summary (IFRSs) - 4 <JPY bn> B/S As of As of item Main items Mar. 2017 Sept. 2017 Change Main breakdown 5,226.9 6,760.4 +1,533.5 Short-term borrowings 667.7 1,101.0 +433.3 SBG 505.8 737.6 ＋231.8 Increased through the use of a commitment line. Current liabilities SVF - 244.5 ＋244.5 B
Slide 17: Consolidated B/S Summary: Equity
Consolidated B/S Summary (IFRSs) - 5 <JPY bn> B/S As of As of Items Change Main breakdown item Mar. 2017 Sept. 2017 4,469.7 5,468.4 +998.7 Common stock 238.8 238.8 - Capital surplus 245.7 279.0 +33.3 USD-denominated Undated Subordinated Notes (the “Hybrid Other equity instruments - 496.9 +496.9 Note
Slide 18: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) <JPY bn> FY17 C/F item Main breakdown Q1-2 143.7 Net income 750.5 Depreciation and amortization -194.3 Gain on investments at SVF 243.5 Finance cost -108.3 Income on Equity Method Investments 504.7 Derivative loss Cash flows from 748.3 77.2 Change in third-party inte
Slide 19: Impact of Sprint – U.S. GAAP > IFRSs Adjustment (1)
Impact of Sprint – U.S. GAAP > IFRSs Adjustment (1) <Adjustment to P/L items> (April 1, 2017 – September 30, 2017) <USD mil> Difference of recognition and measurement IFRSs U.S. Re-classifi- Network ARO Liability to Depreciation Sprint GAAP cation (1) restructuring discount SoftBank Group pay levies
Slide 20: Impact of Sprint – U.S. GAAP > IFRSs Adjustment (2)
Impact of Sprint – U.S. GAAP > IFRSs Adjustment (2) <Adjustment to B/S items> (as of September 30, 2017) <USD mil> Re- Difference of recognition and measurement Adjust- IFRSs U.S. classifi- ment on Sprint GAAP Impaired Network ARO Liability to goodwill SoftBank Group cation assets restructuring disc
Slide 21: Income on Equity Method Investments Related to Alibaba
Income on Equity Method Investments Related to Alibaba Alibaba SoftBank Group U.S. GAAP IFRSs (CNY mil) (JPY bn) (*1) Income on equity Reconciliation Income on equity Net income Net income Ownership method Exchange rate method investments to IFRSs investments FY16Q1 5,365 1,434 6,799 Approx. 33% 2,2
Slide 22: Financing from Sale of Alibaba Shares
Variable Prepaid Forward Contract (Monetization of Alibaba shares, Jun. 2016) Financing from sale of Alibaba shares （Jun. 2016） Alibaba shares pledged as collateral (to be delivered in Jun. 2019) Mandatory Exchangeable Trust USD 5.4bn * (as advances received on sale of shares) (Notes) 1. Alibaba sha
Slide 23: In Case of Alibaba Share Price Decline
Variable Prepaid Forward Contract (Monetization of Alibaba shares, Jun. 2016) Variable prepaid In case of forward contract (collar transaction) Alibaba share price decline Alibaba shares pledged as collateral (to be delivered in Jun. 2019) Mandatory Exchangeable Trust USD 5.4bn * (as advances receiv
Slide 24: Variable Prepaid Forward Contract (Jun. 2019)
Variable Prepaid Forward Contract (Monetization of Alibaba shares, Jun. 2016) Variable prepaid Jun. 2019 forward contract (collar transaction) Cumulative derivative losses over 3 years to be converged to USD 0.9bn Alibaba shares pledged as collateral (to be delivered in Jun. 2019) Gain on sale to be
Slide 25: Collar Transaction Embedded in Variable Prepaid Forward Contract
Collar Transaction Embedded in Variable Prepaid Forward Contract Number of shares delivered to investors 86 million shares At signing of contract USD 6.6bn equivalent 73 million shares USD 76.69 USD 90.11 Alibaba share price 25
Slide 26: Collar Transaction Embedded in Variable Prepaid Forward Contract
Collar Transaction Embedded in Variable Prepaid Forward Contract Number SBG is not subject to of shares delivered Derivative gains downside even from a to be recorded to investors decline in share price 86 million shares SBG is partially subject to upside At signing of contract USD 6.6bn equivalent
Slide 27: Status of Alibaba Shares -1
Status of Alibaba Shares -1 $173 $108 USD Total market value $106 $77 129.0bn up USD 70.9bn Alibaba share price USD 116.4 USD bn Total market value 58.1bn of Alibaba shares Market value of Alibaba shares USD after settlement 51.5 Cumulative bn increase of Market value of USD 6bn Alibaba shares sched
Slide 28: Status of Alibaba Shares -2
Status of Alibaba Shares -2 $173 $106 $108 $77 Alibaba share price Increase in market value was not recorded on P/L Cumulative increase of Market value of USD 6bn Alibaba shares scheduled to be delivered USD 6.6bn USD 6.6bn USD 12.6bn Number of Alibaba shares Jun. 2016 Sept. 30, 2016 Mar. 31, 2017 S
Slide 29: Status of Alibaba Shares -3
Status of Alibaba Shares -3 $173 $106 $108 $77 Alibaba share price Derivative liabilities recorded on B/S Cumulative increase of Market value of USD 6bn Alibaba shares scheduled to be delivered USD 6.6bn USD 6.6bn USD 12.6bn -USD 5.8bn -USD 1.0bn -USD 1.3bn Derivative liabilities Number of Alibaba s
Slide 30: Status of Alibaba Shares -4
Status of Alibaba Shares -4 $173 $106 $108 $77 Alibaba share price Increase in derivative liabilities recorded on P/L (Cumulative derivative losses: USD 6.7bn) Cumulative Derivative assets increase of Market value of USD 6bn Alibaba shares of +USD 0.9bn scheduled to be delivered USD 6.6bn USD 6.6bn
Slide 31: Status of Alibaba Shares -5
Status of Alibaba Shares -5 $173 $106 $108 $77 Alibaba share price Total gain to be recorded at time of settlement (USD 11.0bn) Cumulative increase of Market value of Derivative assets USD 6bn +USD 11.0bn Alibaba shares of +USD 0.9bn USD 5.2bn Gain on sale scheduled to be delivered USD 6.6bn USD 6.6
Slide 32: Finance
Finance 32
Slide 33: Main Financing Activities in FY2017
Main Financing Activities in FY2017 Category Event Amount Timing Total committed capital: USD 93.2 bn May First major closing of SoftBank Vision Fund (SVF*1) (incl. capital committed by SBG: USD 28.0 bn)*2 2017 As of Total committed capital: USD 97.7 bn Addition of committed capital (to SVF) Sep 30
Slide 34: Adjusted EBITDA and Adjusted EBITDA Margin (1)
Adjusted EBITDA and Adjusted EBITDA Margin (1) Consolidated EBITDA has been stable. Adjusted EBITDA Adjusted EBITDA Margin <JPY bn> Domestic Telecommunications Domestic Telecommunications Yahoo Japan Sprint Distribution Yahoo Japan Arm Distribution Sprint Arm Other(Incl. SVF) Consolidated 1,390.5 46
Slide 35: Adjusted EBITDA and Adjusted EBITDA Margin (2)
Adjusted EBITDA and Adjusted EBITDA Margin (2) Domestic Telecommunications segment sustains high margin. Adjusted EBITDA Adjusted EBITDA margin (Domestic Telecommunications) <JPY bn> SoftBank 691.3 (Domestic 659.7 44% 43% Telecommu- NTT DOCOMO nications) 36% 35% KDDI 35% 34% SoftBank Group 31% 32% (
Slide 36: Interest-bearing Debt
Interest-bearing Debt Increased YoY due to foreign exchange fluctuations and the issuance of foreign currencies bonds. Breakdown of Sprint’s interest-bearing debt <JPY bn> Main change from Jun ’17 Interest-bearing debt of JPY244.5 bn at SVF is excluded. <JPY bn> Borrowings 1,375.0 14,653.7 Bonds 2,8
Slide 37: Cash Position
Cash Position Ample cash position is restored due to cash reimbursement of bridge investments* for SVF and the issuance of bonds. Cash position of JPY521.2 bn at SVF is excluded. <JPY bn> 3,654.0 239.7 *3 *2 *1 Bridge investment by SBG 2,957.9 2,906.5 2,935.3 531.6 which had been agreed to transfer
Slide 38: Net Interest-bearing Debt
Net Interest-bearing Debt No material change since Mar ’17. Net interest-bearing debt of negative JPY276.6 bn (net cash) at SVF is excluded. <JPY bn> 12,280.2 11,269.3 11,207.6 11,239.4 10,702.2 *1 -239.7 8,642.5 7,455.6 *1 Bridge investment by SBG 7,581.5 7,667.6 which has been agreed to transfer 7
Slide 39: Financing by Hybrid Instruments
Financing by Hybrid Instruments Total hybrid capital raised amounted to JPY1.1 tn with hybrid loan execution in Nov. Net leverage ratio lowered by 0.2x compared to a ratio with senior indebtedness. Foreign Currency-denominated Domestic Hybrid Hybrid Loan Bonds Hybrid Bonds Closing timing November 20
Slide 40: Refinancing of Bank Loans
Refinancing of Bank Loans Successfully extended the maturity of loans via refinancing amid low interest rates. Senior Loan Hybrid Loan Size JPY 2,650 bn JPY 84.0 bn Closing November 2017 Use of Repayment of loans General corporate purpose proceeds General corporate purpose Equity Not eligible (Debt)
Slide 41: Foreign Currency-denominated Senior Bonds
Foreign Currency-denominated Senior Bonds Successfully secured long-term funds through the issuance of long-term bonds in the low interest rates environment. Foreign Currency-denominated Senior Bonds Issuance timing September 2017 Maturity 7 years 10 years 8 years 12 years Issuance size USD 1.35 bn
Slide 42: Leverage Ratio
Leverage Ratio Improvement due to cash reimbursement of bridge investments for SVF. Leverage ratio (gross / net) 5.4x 5.6x (Gross) 4.5x 4.2x (Net) *4.3x *After considering 50% equity credit of the Hybrid Bonds issued in July and cash reimbursement from SVF for the investments that SBG expects to tra
Slide 43: Net Leverage Ratio (Consolidated)
Net Leverage Ratio (Consolidated) Continued to focus on lowering leverage for a mid-term range. 6.2x (after Vodafone K.K. acquisition) 4.5x 4.2x 4.3x* *After considering 50% equity credit of the Hybrid Bonds issued in July and cash reimbursement from SVF for the investments that SBG expects to trans
Slide 44: Leverage Ratio of Domestic Telco Business and Debt Coverage Ratio
Leverage Ratio of Domestic Telco Business and Debt Coverage Ratio Domestic Others Telco (incl. Sprint acquisition cost) etc. Net interest- Net interest- JPY 3.3 tn JPY 4.7 tn bearing debt bearing debt Adjusted = 2.8x Equity value of = 21% JPY 1.2 tn JPY 22.1 tn EBITDA holdings *1 Net interest-bearin
Slide 45: Leverage Ratio of Domestic Telco Business and Debt Coverage (details)
Leverage ratio of Domestic Telco Business and Debt Coverage (details) Domestic Telco Others 2.8x 21% Net interest-bearing debt (consolidated basis) +JPY 11.0 tn Domestic Telco Net interest-bearing debt - Net interest-bearing debt (Sprint, YJ, Domestic Telco etc.) (incl. Sprint acquisition - JPY 6.0
Slide 46: Equity Attributable to Owners of the Parent Ratio
Equity Attributable to Owners of the Parent Ratio Significantly expanded due to increased net income generation and the Hybrid Bonds issuance. Equity attributable to owners of the parent Ratio of equity attributable to owners of (Shareholders’ equity) the parent (Shareholders’ equity ratio) <JPY bn>
Slide 47: Debt / Equity Ratio
Debt / Equity Ratio Debt / equity ratio (gross / net) 3.5x 3.2x (Gross) 2.9x 2.4x (Net) Jun '17 Sep '17 *1 Debt / equity ratio = interest-bearing debt / equity attributable to owners of the parent (shareholders’ equity (including adjustments related to the Hybrid Bonds issued in Sep ‘16 and Jul ‘17)
Slide 48: Interest Expense
Interest Expense Increased due to Hybrid Bonds, and bridge loan for acquisition of Arm Interest expense (finance cost) Interest coverage ratio Excl. Sprint Sprint Excl. Sprint Consolidated <JPY bn> 243.5 222.0 9.1x 136.6 7.1x 132.8 6.0x 5.7x 106.9 89.3 FY16/Q1-Q2 FY17/Q1-Q2 FY16/Q1-Q2 FY17/Q1-Q2 * I
Slide 49: Market Cap of Major Listed Shares Held by SBG and Its Subsidiaries
Market Cap of Major Listed Shares Held by SBG and Its Subsidiaries Listed shareholdings amount to JPY 18 tn. 17.2 17.6 <JPY tn> 14.8 Partial monetization (Alibaba) 12.6 11.3 9.7 12.9 13.8 10.4 Alibaba 8.1 8.0 7.1 Sprint 4.6 Yahoo Japan Others 1.3 1.5 1.3 0.7 0.9 0.8 0.8 Mar '07 Mar '08 Mar '09 Mar '
Slide 50: Current Status of SVF
Current Status of SVF (Vision Fund & Delta Fund) <Capital Deployment of SVF (as of Sep 30)> Total committed capital Total contribution SVF*1 total $93.2 bn + $4.5 bn $17.0 bn (Vision Fund & Delta Fund) (Additional Committed Capital) Incl. SBG*2 $28.0 bn + $4.5 bn $3.8 bn*3 + $3.6 bn*4 (Additional Co
Slide 51: SBG: Price and Spread of Domestic Currency Denominated Bond
SBG: Price and Spread of Domestic Currency Denominated Bond Domestic currency-denominated bond Domestic currency-denominated bond price credit spread Z-spread, bps 105 450 Sub 2021 #1 Sub 2022 #2 2020 #47 Sub 2021 #1 Sub 2022 #2 2020 #47 2022 #48 2026 #50 Hyb 2021 #1 2022 #48 2026 #50 Hyb 2021 #1 Hy
Slide 52: SBG: Price and Spread of Foreign Currency-denominated Bond
SBG: Price and Spread of Foreign Currency- denominated Bond Foreign currency-denominated bonds price Foreign currency-denominated bonds spread Z-spread, bps 120 550 2022 USD 2025 USD 2022 EUR 2022 USD 2025 USD 2022 EUR 2025 EUR 2027 EUR Perp NC6 USD 2025 EUR 2027 EUR Perp NC6 USD Perp NC10 USD 2024
Slide 53: Sprint: Price and Spread
Sprint: Price and Spread Sprint senior notes price Sprint senior notes spread Z-spread, bps 120 1400 2024 USD 2024 USD 115 2021 USD 2021 USD 2025 USD 1200 2025 USD 110 2028 USD 2028 USD 105 1000 100 800 95 600 90 85 400 80 200 75 70 0 16/4 16/7 16/10 17/1 17/4 17/7 17/10 16/4 16/7 16/10 17/1 17/4 17
Slide 54: Trend of Credit Rating of SBG
Trend of Credit Rating of SBG Acquisition of Acquisition of Acquisition of Acquisition of Japan Telecom Vodafone K.K. Sprint Arm 14 13 A/A2 12 A－/A3 JCR (A－) 11 BBB+/Baa1 10 BBB/Baa2 9 BBB－/Baa3 S&P (BB＋) 8 BB+/Ba1 7 BB/Ba2 Moody’s (Ba1) 6 BB－/Ba3 5 B+/B1 4 2003 2004 2005 2006 2007 2008 2009 2010 20
Slide 55: SBG Bond Redemption Schedule
SBG Bond Redemption Schedule Straight bond Subordinated bond Hybrid Bond 1,305.6 Foreign currency-denominated bond Foreign currency-denominated Hybrid Bond 455.6 <JPY bn> 795.4 700.0 310.0 561.8 474.4 491.2 485.3 15.4 400.0 191.8 850.0 197.3 700.0 324.4 470.0 491.2 400.0 370.0 288.0 98.9 10.0 150.0
Slide 56: Financial Significance of SoftBank Vision Fund
Financial Significance of SoftBank Vision Fund (conceptual image) Maximize investment opportunities while managing leverage. Manage as GP Third-party (Investment as LP) Limited Partners SoftBank Group *1 SoftBank Vision Fund Operating companies Yahoo Other SoftBank Sprint Arm Investment Japan subsid
Slide 57: FY2017 Financial Strategies
FY2017 Financial Strategies Balance SoftBank Vision Fund and credit improvement SoftBank Vision Fund:*1 A new investment strategy that accelerates enterprise value-oriented management • Maximize investment opportunities while managing leverage • Visualize mid to long-term investment strategy Enhance
Slide 58: (Reference)
(Reference) 58
Slide 59: Sprint Debt Maturities
Sprint Debt Maturities Sprint notes and credit facilities Clearwire Notes (903.0) (903.0) <USD mil> JPY bn in ( ) 8,010 (515.5) (519.3) 4,573 4,607 (450.9) (425.0) 8,010 4,000 3,770 (285.0) (284.1) (279.0) 2,528 2,520 2,475 (225.5) (152.7) 4,573 4,607 3,770 2,000 4,000 1,355 2,475 2,528 2,520 629 2,
Slide 60: Interest-bearing Debt: Breakdown by Long/Short and Fixed/Variable
Interest-bearing Debt: Breakdown by Long/Short and Fixed/Variable Interest-bearing debt: Interest-bearing debt: Long / short ratio Fixed / variable ratio <JPY bn> Long-term Short-term <JPY bn> Fixed Variable 14,653.7 14,653.7 14,183.3 14,183.3 23％ 28％ 25％ 30％ 10,354.3 10,354.3 26% 35％ 72％ 70％ 75％ 77
Slide 61: Domestic Telecommunications
Domestic Telecommunications 61
Slide 62: 1. Net Sales
<Domestic Telecommunications Segment> 1. Net Sales FY17H1 sales approx. JPY 1,529 bn, down JPY 25.6bn YoY: telecom service revenue down JPY 11.4bn, product and other sales down JPY14.2bn. Broadband revenue grew steadily, up +JPY 33.5bn YoY. Net sales Telecom service revenue Product and other sal
Slide 63: 2. Operating Income/Adjusted EBITDA
<Domestic Telecommunications Segment> 2. Operating Income/Adjusted EBITDA FY17H1 segment income marked JPY 434.0bn, down JPY 32.0bn YoY. Operating income/ Adjusted EBITDA Segment income YoY comparison in ( ) YoY comparison in ( ) <JPY bn> <JPY bn> 800 68.1 1,200 Q4 90.1 214.3 600 Q4 233.2 185.6 Q3
Slide 64: 3. Segment Income Analysis
<Domestic Telecommunications Segment> 3. Segment Income Analysis Broadband drove topline growth. Mobile communications revenue decreased due to an enhancement of Home Bundle Discount Hikari Set, introduction of Giga Monster, and decreases in MBB and PHS. Cost increased due to upfront investmen
Slide 65: 4. Mobile Communications Subscribers and Churn Rate
<Domestic Telecommunications Segment> 4. Mobile Communications Subscribers and Churn Rate (main subscribers) Subscribers: increased 480k YoY, with smartphone net adds 810k for FY17H1. Churn rate: improved 0.05pp YoY; steadily improved in phones while deteriorated in MBB Cumulative subscribers Ch
Slide 66: 5. ARPU (main subscribers)
<Domestic Telecommunications Segment> 5. ARPU (main subscribers) FY17Q2 ARPU decreased by JPY 230 YoY, with monthly discount ARPU widening by JPY 110 Adverse impact from higher mix of Y!mobile smartphones and expansion of Home Bundle Discount Hikari Set. ARPU YoY comparison in ( ) (JPY) 540 560
Slide 67: 6. Broadband
<Domestic Telecommunications Segment> 6. Broadband 4.36mil SoftBank Hikari at FY17Q2-end; steady trend in customer acquisition. 7.14mil subscribers under Home Bundle Discount Hikari Set; a significant increase. Cumulative subscribers Home Bundle Discount Hikari Set (number of connected lines) cu
Slide 68: 7. Capex / Free Cash Flow
<Domestic Telecommunications Segment> 7. Capex / Free Cash Flow FY17H1 Capex amounted to JPY 113.8bn. FY17H1 FCF marked JPY 334.5bn, up JPY 8.4bn YoY. Capex* Free cash flow (adjusted*) * <JPY bn> YoY comparison in ( ) <JPY bn> YoY comparison in ( ) 480 Depreciation 400 385.3 360.0 360 300 Q4 153
Slide 69: 8. Growth Strategy
<Domestic Telecommunications Segment> 8. Growth Strategy 69
Slide 70: 9. Strengthen Upfront Investment
<Domestic Telecommunications Segment> 9. Strengthen Upfront Investment Expansion of Synergy with Customer rewards customer base Yahoo Japan * Launched in Sep. 2017 Yahoo! Shopping Ultra GIGA Monster Half Price Support 10x loyalty points everyday for iPhone Yahoo! Premium All benefits available Home
Slide 71: 10. Growth Strategy (New Areas)
<Domestic Telecommunications Segment> 10. Growth Strategy (New Areas) SoftBank Group Investees Generating synergies through pack of joint ventures 71
Slide 72: 11. Growth Strategy (New Areas) ~Examples~
<Domestic Telecommunications Segment> 11. Growth Strategy (New Areas) ~Examples~ Create growth opportunities through smartphones & FTTH Collaboration to deploy ads distribution platform designated for gaming apps IBM Watson Announced to launch first new coworking spaces in Roppongi and Ginza etc. Se
Slide 73: 12. FY2017 Forecast
12. FY2017 Forecast Domestic Telco Prioritize upfront investment 1 Drive growth strategy 2 Maintain FCF over JPY 500bn Except Domestic Telco income to decline* (up to -7% YoY) 3 Focus on future growth * Operating income of Domestic Telecommunications segment (FY2017) 73 73
Slide 74: (Reference) Domestic Telecommunications Segment Breakdown of Net Sales
<Domestic Telecommunications Segment> (Reference) Domestic Telecommunications Segment Breakdown of Net Sales FY2016 FY2017 Full Q1 Q2 H1 Q3 Q4 Q1 Q2 H1 year Total net sales 761.8 792.8 1,554.6 846.1 793.1 3,193.8 755.7 773.3 1,529.0 Telecom service revenue 605.8 609.5 1,215.3 613.5 594.3 2,423.1 602
Slide 75: Definition and calculation method of principal operational data
Definition and calculation method of principal operational data <Mobile Communications Service> 1. Subscribers Main subscribers: smartphones, feature phones, tablets, mobile data communications devices, Wireless Home Phone and others * Wireless Home Phone is a new home-phone voice calling service us
Slide 76: Sprint
Sprint 76
Slide 77: Q2 SoftBank Investor Briefing: FY 2017 Results (Sprint)
Q2 SoftBank Investor Briefing FY 2017 RESULTS November 8th, 2017 ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confidential or privileged materials intended for the sole use of the i
Slide 78: Cautionary Statement
SAFE HARBOR Cautionary Statement This release includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan”, “outlook,” “providing guidance,” and si
Slide 79: Fiscal 2Q 2017 Highlights
Fiscal 2Q 2017 Highlights Adjusted EBITDA* Adjusted Free REDUCING Cash Flow* HIGHEST EXPENSES for a fiscal second Continued year-over-year POSITIVE quarter in a decade reduction in 7 of last 8 quarters Postpaid Phone Prepaid NETWORK 9 3 Performing at consecutive consecutive quarters of quarters of n
Slide 80: Growing Connections
Growing Connections Postpaid Phone Net Adds Prepaid Net Adds^ Q215 Q216 Q217 Q215 Q216 Q217 9 NET ADDITIONS consecutive quarters of 3 NET ADDITIONS consecutive quarters of ^excluding Lifeline ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and
Slide 81: Network Getting Better Every Day
Network Getting Better Every Day Magic Box Download up Speed 33% year-on-year1 National Average Download Speed 1 Average download speed increase based on Ookla's analysis of Speedtest Intelligence data comparing Sept. 2016 to Sept. 2017 for all mobile results. ©2017 Sprint. This information is subje
Slide 82: Enhancing our Value Proposition
Enhancing our Value Proposition Simplify the Wireless Experience Optimize & Expand Distribution Grow Digital Sales Capabilities ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint and/or its relevant affiliates and may contain restricted, confiden
Slide 83: Stable Revenue
Stable Revenue Net Operating Revenues Postpaid Phone Average Billings per Dollars in Billions User (ABPU)* Q215 Q216 Q217 Q215 Q216 Q217 Wireless Service Rev Wireless Equip Rev Service Equipment Normalized Consolidated Net Operating Rev down slightly relatively Flat year-over-year year-over-year nor
Slide 84: Reducing Operating Expenses
Reducing Operating Expenses Cash Operating Expenses Dollars in Billions $400M Y/Y NET REDUCTIONS over Q215 Cost of Services Q216 Selling, General & Administrative Q217 $750M YTD NET REDUCTIONS ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of Sprint an
Slide 85: Improving Profitability
Improving Profitability Adjusted EBITDA* Operating Income Dollars in Billions Dollars in Billions Q215 Q216 Q217 Q215 Q216 Q217 Highest Fiscal Second Quarter in relatively Flat 10 YEARS year-over-year ©2017 Sprint. This information is subject to Sprint policies regarding use and is the property of S
Slide 86: Net Income/Loss
Net Income/Loss Net Income (Loss) Dollars in Millions (actual dollars) 2QFY17 2QFY16 Change EPS ($0.01) ($0.04) $0.03 After tax spectrum swap gain $0.05 Q215 Q216 Q217 Litigation & other contingencies ($0.03) Hurricane Charges ($0.01) improved year-over-year 66% ©2017 Sprint. This information is sub
Slide 87: Capex & Adjusted Free Cash Flow
Capex & Adjusted Free Cash Flow* Cash Capex Adjusted Free Cash Flow* Dollars in Millions Dollars in Millions Q215 Q216 Q217 Q215 Q216 Q217 Network/Other Device investing in our NETWORK investment POSITIVE seven of the last eight quarters ©2017 Sprint. This information is subject to Sprint policies r
Slide 88: Guidance
FISCAL YEAR 2017 Guidance Adjusted Operating Cash Adjusted Free EBITDA* Income Capex Cash Flow* $10.8 billion to $2.1 billion to $3.5 billion to Around $11.2 billion $2.5 billion $4 billion Breakeven excluding devices leased through indirect channels ©2017 Sprint. This information is subject to Spri
Slide 89: SoftBank
SoftBank