Softbank Group Corp. · TSE:9984
Softbank — H1 FY2010 Earnings Presentation
75 slides from Softbank's earnings presentation, Oct 28, 2010
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2010
Earnings Results for the Six-month Period Ended September 30, 2010 (April to September 2010) October 28, 2010 SOFTBANK CORP. November 12, 2010 Version
Slide 2: 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 3: Highlights: Record High Revenue and Profit
Highlights Record High Revenue and Profit 1) Operating income exceeds JPY 300.0bn, record high for 5 consecutive periods 2) Mobile Communications continues to thrive net additions increased 2.3-fold 2
Slide 4: Consolidated Earnings Results
Consolidated Earnings Results 3
Slide 5: Summary of Consolidated Earnings Results
Summary of Consolidated Earnings Results (bn JPY) FY09/H1 FY10/H1 Increment YoY (Apr. - Sept. ‘09) (Apr. - Sept. ‘10) Net sales 1,349.2 1,465.0 +115.7 109% EBITDA 387.1 459.3 +72.2 119% Operating income 230.6 315.5 +84.8 137% Ordinary income 173.5 253.8 +80.3 146% Net income 70.7 76.8 +6.0 109% 4
Slide 6: Competitors' Comparison
Competitors’ Comparison (FY10/H1 YoY) (bn JPY) NTT KDDI DOCOMO Consolidated net sales 115.7 (4.6) (7.6) (YoY) Consolidated operating (3.1) 46.2 income 84.8 (YoY) Revenue and profit Revenue and profit Revenue decrease and increase decrease profit increase 5 *Created by SOFTBANK CORP. based on respect
Slide 7: Operating Income Comparison
(bn JPY) Operating Income Comparison +84.8 (Apr. - Sept. YoY) 46.2 0 (3.1) KDDI NTT DOCOMO SOFTBANK 6 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 8: Consolidated Net Sales (Apr. - Sept.)
Consolidated Net Sales (Apr. - Sept.) (bn JPY) 1,465.0 Record high 1,349.2 827.4 935.0 9% increase Mobile Communications 102.7 94.8 Broadband Infrastructure 151.5 146.8 Fixed-line Telecommunications 128.9 135.2 Internet Culture 0 Others FY09 FY10 H1 H1 7 *The figures for each segment exclude the amo
Slide 9: Consolidated EBITDA (Apr. - Sept.)
Consolidated EBITDA (Apr. - Sept.) (bn JPY) 459.3 387.1 310.3 Record high 249.3 19% increase Mobile Communications 31.9 Broadband Infrastructure 35.1 29.9 36.5 Fixed-line Telecommunications 70.6 76.9 Internet Culture 0 Others FY09 FY10 H1 H1 8
Slide 10: Consolidated EBITDA: Record high for 7 consecutive periods
Consolidated EBITDA (Apr. - Sept.) (bn JPY) 459.3 387.1 314.2 335.5 Record high 228.4 for 7 consecutive periods 50.2 19% increase 12.0 0 -23.6 03 04 05 06 07 08 09 10 (FY) H1 H1 H1 H1 H1 H1 H1 H1 9
Slide 11: Consolidated Operating Income (Apr. - Sept.)
Consolidated Operating Income (Apr. - Sept.) (bn JPY) 315.5 230.6 Record high 207.2 37% increase 131.7 Mobile Communications 27.0 22.7 Broadband Infrastructure 13.6 7.8 Fixed-line Telecommunications 64.9 71.6 Internet Culture 0 Others FY09 FY10 H1 H1 10
Slide 12: Consolidated Operating Income: Record high for 5 consecutive periods
Consolidated Operating Income (Apr. - Sept.) (bn JPY) 315.5 230.6 Record high for 180.0 5 consecutive 167.7 periods 112.5 37% increase 4.4 0 05 06 07 08 09 10 (FY) H1 H1 H1 H1 H1 H1 11
Slide 13: Consolidated Ordinary Income (Apr. - Sept.)
Consolidated Ordinary Income (Apr. - Sept.) (bn JPY) 253.8 173.5 Record high for 5 consecutive 111.1 117.3 periods 62.6 46% increase 0 -13.4 05 06 07 08 09 10 (FY) H1 H1 H1 H1 H1 H1 12
Slide 14: Consolidated Ordinary Income/Net Income
Consolidated Ordinary Income/Net Income (bn JPY) FY09/H1 FY10/H1 ( Notes ) (Apr. - Sept. ‘09) (Apr. - Sept. ‘10) Ordinary income 173.5 253.8 Asset retirement obligations, etc. Special income/loss (net) 3.2 (7.3) Income before income taxes and minority interests 176.8 246.5 Income tax: Current 48.8 9
Slide 15: Consolidated Net Income (Apr. - Sept.)
Consolidated Net Income (Apr. - Sept.) (bn JPY) 76.8 70.7 Record high for 2 consecutive 41.1 periods 9% increase 0 08 09 10 (FY) H1 H1 H1 14
Slide 16: Consolidated Net Income: Impact of Yahoo Japan correction
Consolidated Net Income (Apr. - Sept.) (bn JPY) Impact of correction and ruling notice received by Yahoo Japan JPY 24.7bn 70.7 Record high for 76.8 2 consecutive 41.1 periods 9% increase 0 08 09 10 (FY) H1 H1 H1 15
Slide 17: Financial Status
Financial Status 16
Slide 18: Consolidated Operating Cash Flow (Apr. - Sept.)
Consolidated Operating Cash Flow (Apr. - Sept.) (bn JPY) 349.3 Record high for 315.3 2 consecutive periods 177.2 11% increase 0.4 0 07 08 09 10 (FY) H1 H1 H1 H1 17
Slide 19: Consolidated Operating Cash Flow: Impact of Yahoo Japan correction
Consolidated Operating Cash Flow (Apr. - Sept.) (bn JPY) Impact of correction and ruling notice received by Yahoo Japan JPY 26.4bn 315.3 349.3 Record high for 177.2 2 consecutive periods 0 0.4 11% increase 07 08 09 10 (FY) H1 H1 H1 H1 18
Slide 20: Consolidated CAPEX
Consolidated CAPEX (bn JPY) 400.0 389.8 No change 293.7 in annual plan 259.0 222.9 314.8 Mobile Communications 25.1 Broadband Infrastructure 44.9 Fixed-line Telecommunications 0 Internet Culture 2006 2007 2008 2009 2010 (Plan) (FY) 19 *Acceptance basis, including CAPEX through finance leases.
Slide 21: Consolidated Free Cash Flow (Apr. - Sept.)
Consolidated Free Cash Flow (Apr. - Sept.) (bn JPY) 219.6 177.0 Record high for 2 consecutive periods 12.1 0 24% increase -226.8 07 08 09 10 (FY) H1 H1 H1 H1 20
Slide 22: Consolidated Free Cash Flow: Impact of Yahoo Japan correction
Consolidated Free Cash Flow (Apr. - Sept.) (bn JPY) Impact of correction and ruling notice received by Yahoo Japan JPY 26.4bn 177.0 219.6 Record high for 12.1 2 consecutive periods 0 24% increase -226.8 07 08 09 10 (FY) H1 H1 H1 H1 21
Slide 23: Net Interest-bearing Debt Comparison to Peak Level
Net Interest-bearing Debt Comparison to Peak Level 2,387.0 (bn JPY) 1,455.0 Since acquisition of Vodafone K.K. Reduced by approx. JPY 930.0bn 2006 2010 22 June Sept.
Slide 24: SBM Loan Balance
(t JPY) SBM Loan Balance 1.366t JPY 1.0 Reduced by approx. JPY 590.0bn JPY 780.0bn 0.5 Oct. 2010 Minimum case 0 Inception of 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (CY) borrowings Nov. 2006 23
Slide 25: 2.4t Commitment to Reduce Net Interest-bearing Debt Remains Unchanged
2.4t Commitment to Reduce Net Interest-bearing Debt Remains Unchanged 1.9t 1.45t Half 0 Zero June Sept. FY11 FY14 2006 FY08 2010 (target) (target) 24 *Refers to half of the end of FY08 level.
Slide 26: Corporate Bond Spread Improved
(bps) Corporate Bond Spread Improved 500 Issued corporate bond for retail market 400 33rd Series Unsecured Straight Corporate Bond 300 (Fukuoka SoftBank HAWKS Bond) 200 Amount: JPY 130.0bn Term to maturity: 3 years Coupon rate: 1.24% p.a. 100 26th bond (4 years remaining) 28th bond (2 years remainin
Slide 27: Mobile Communications Business
Mobile Communications Business 26
Slide 28: Net Subscriber Additions (Apr. - Sept.)
Net Subscriber Additions (Apr. - Sept.) 1,600k 2.3-fold (YoY) 680k FY09/H1 FY10/H1 27
Slide 29: Monthly Net Adds
(k) Monthly Net Adds 350 330k 300 FY2010 3-fold 250 (Sept. YoY) 200 150 100 FY2009 110k 50 0 Apr. May June July Aug. Sept. 28
Slide 30: Net Adds Competitors' Comparison
Net Adds (Apr. - Sept.) 1,600k Competitors’ Comparison Overwhelmingly No.1 810k 420k KDDI NTT DOCOMO SOFTBANK 29 *Calculated by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data.
Slide 31: Churn Rate
Churn Rate (%) 2 Termination of 2G 1 0.96% Improvement Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY07 FY08 FY09 FY10 30 *Churn rate: includes the number of prepaid mobile phones and communication module subscribers.
Slide 32: TV CM Preference Ranking (Sept. 2010)
TV CM Preference Ranking (Sept. 2010) Triple Crown 1st By production (among 4,411 productions) By brand 1st (among 2,881 brands) By company 1st (among 1,125 companies) 31 (Source) CM DATABANK.
Slide 33: TV CM Came From Twitter
TV CM Came From Twitter Ayumi Hamasaki x Jiro Shirato Let’s do it. RT @xxxxxxxx Want to see that!!! !!! RT @ayu_19980408 Hello, my name is Ayumi Hamasaki. Mr. Son! I want to be on TV CM with Father Dog! *Original text in Japanese, translated for reference only. 32
Slide 34: TV CM
TV CM
Slide 35: ARPU
ARPU 100 (Indexed at FY07/Q2 = 100) SOFTBANK 90 80 KDDI Turnaround NTT DOCOMO 70 60 07 08 09 10 (FY) Q2 Q2 Q2 Q2 34 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 36: Data ARPU
Data ARPU 160 (Indexed at FY07/Q2 = 100) SOFTBANK 140 Overwhelming increase 120 NTT DOCOMO KDDI 100 07 08 09 10 (FY) Q2 Q2 Q2 Q2 35 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 37: Mobile Communications Business Operating Income
Mobile Communications Business Operating Income 207.2 (bn JPY) Vodafone SoftBank Increase 131.1 131.7 122.5 94.2 87.4 88.1 56.6 43.5 0 02 03 04 05 06 07 08 09 10 (FY) 36 H1 H1 H1 H1 H1 H1 H1 H1 H1
Slide 38: SoftBank Network Enhancement Initiative
We are working hard to improve coverage as fast as we can. SoftBank Network Enhancement Initiative! People who have coverage problems, please let us know 37 *Original text in Japanese, translated for reference only.
Slide 39: Progress on Plan to Double Mobile Phone Base Stations
Progress on Plan to Double the Number of Mobile Phone Base Stations Approx. 120k 100k Progress 30k as scheduled Sites finalized Approx. 60k 70k 0 Mar. Sept. Mar. 2010 2010 2011 38 (plan)
Slide 40: Renewed Website
Renewed Website Create monthly report Communicate on progress of initiative 39
Slide 41: Number of Applications for Femtocell
Number of Applications for Femtocell 54,000 (as of Sept. 2010) 40
Slide 42: Coverage After Installing Femtocell
Coverage After Installing Femtocell No change 8% Improved 92% *Survey conducted by 1,276 users whose femtocell is activated. 41
Slide 43: WILLCOM Joins the SOFTBANK Group
WILLCOM Joins the SOFTBANK Group 1 Rehabilitation plan expected to be approved in November 2010 2 Accelerate initiative to double the number of mobile phone base stations 42
Slide 44: Summary of FY2010/H1
Summary of FY2010/H1 Revenue and profit increase to reach record high Net adds: overwhelmingly No.1 ARPU positive turnaround 43
Slide 45: Question
Question 44
Slide 46: Will SOFTBANK keep winning?
Will SOFTBANK keep winning? 45
Slide 47: Let's do it.
Let’s do it. 46
Slide 48: Towards No. 1 Mobile Internet Company
Towards No. 1 Mobile Internet Company 47
Slide 49: Equation Towards Victory
Equation Towards Victory X+X-= 48
Slide 50: Equation Towards Victory
Equation Towards Victory Smartphone Smartpad SoftBank Conventional PC Competitors terminal 49
Slide 51: Start of Smartphone era
2008 Start of Smartphone era Smartphone Conventional terminal 50
Slide 52: Cumulative number of iPhones sold
Cumulative number of iPhones sold June 2010 Launched iPhone 4 June 2009 Launched iPhone 3GS Overwhelmingly the No.1 smartphone July 2008 Launched iPhone 3G 2009 2010 2008 51 *External data.
Slide 53: Percentage of Smartphones Within Total New Smartphones Sold
Percentage of Smartphones Within Total New Smartphones Sold (FY10/H1) 4% 5% 11% IS01 Others Overwhelmingly Xperia No.1 smartphone iPhone 80% 52 *External data (Apr. - Sept. 2010).
Slide 54: Female Users Among New iPhone Subscribers
Female Users Among New iPhone Subscribers 40% Accelerate 30% 20% 10% H1 H2 H1 H2 H1 FY2008 FY2009 FY2010 53
Slide 55: Corporate iPhone Subscribers
Corporate iPhone fold Subscribers 40 Approx. 40-fold 30 20 10 *Corporate subscribers as of July 2008 indexed at 1. July Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 2008 2009 2010 54
Slide 56: More Smartphones With Android
TM More Smartphones With Android ... HTC HTC Desire II Desire HD Android 2.2 Android 2.2 55
Slide 57: Cutting-edge Shop for Smartphone Era
Cutting-edge Shop for Smartphone Era SOFTBANK PREMIUM SHOP Staffed by IT skilled employees Exceeds 400 shops nationwide (as of Oct. 1) 56
Slide 58: Smartphone Becomes the Center of One's Lifestyle
Smartphone Becomes the Center of One’s Lifestyle 57
Slide 59: Mobile Handsets Sold (Japan)
mil Mobile Handsets Sold (Japan 40 30 Entering the Conventional smartphone era 20 terminal 10 Smartphone 0 2008 2009 2010 2011 2012 2013 2014 2015 (FY) (forecast) *Calculated by SOFTBANK CORP. based on material 58 disclosed by MM Research Institute (Aug. 31, 2010).
Slide 60: Start of the Smartpad era
2010 Start of the Smartpad era Smartpad PC 59
Slide 61: iPad Corporate Implementations
iPad Corporate Implementations Gulliver VI manual 7 05 60
Slide 62: Smartpad Better Addresses Business Users' Needs
Smartpad Better Addresses Business Users’ Needs Model sold the most in 2009 Laptop Smartpad Boot speed Several minutes 1 second Battery life Approx. 2hrs Approx. 10hrs Weight 2.8kg 0.7kg UI Mouse Touch 61 *Smartpad specifications refer to iPad (Wi-Fi+3G model).
Slide 63: One for Each Business Person
One for Each Business Person 62
Slide 64: Shops Selling iPad Expanding
Shops Selling iPad Expanding SoftBank shops 114 shops 7-fold 16 shops Before Oct. 21 As of Oct. 22 63
Slide 65: PCs Sold (Japan): From the PC era
(mil) PCs Sold (Japan 15 Desktop From the PC era 10 5 Laptop Netbook 2005 2006 2007 2008 2009 (FY) 2010 2011 2012 2013 2014 2015 64 *2005 - 2009 data based on material disclosed by MM Research Institute (Feb. 3, 2010).
Slide 66: PCs Sold (Japan): Entering the smartpad era
(mil) PCs Sold (Japan 15 Desktop Entering the 10 smartpad era Netbook 5 Laptop Smartpad 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (FY) Forecast 65 *2005 - 2009 data based on material disclosed by MM Research Institute (Feb. 3, 2010). After 2010 estimated by SOFTBANK CORP.
Slide 67: Penetration in the SOFTBANK Group
Penetration in the SOFTBANK Group iPhone 100% iPad 100% Wi-Fi 100% Twitter 96% *Penetration rate in employees of three telecommunications companies and SOFTBANK CORP. 66 Penetration rate of Twitter based on internal company survey results (as of Oct. 2010).
Slide 68: Smartphone No.1, Smartpad No.1, Mobile Internet No.1
Smartphone No.1 Smartpad No.1 Mobile Internet No.1 67
Slide 69: SOFTBANK MOBILE New Milestone: 40 Million Lines
SOFTBANK MOBILE New Milestone: 40 Million Lines 68
Slide 70: Profit increase, Zero net debt, 40 million lines
Profit increase Zero net debt 40 million lines in 201X 69
Slide 71: 40 Million Lines Equation
40 Million Lines Equation Smartphone Smartpad SoftBank Conventional PC Competitors terminal 70
Slide 72: Towards No. 1 Mobile Internet Company
Towards No. 1 Mobile Internet Company 71
Slide 73: Make People Happy Through Information Revolution
Make People Happy Through Information Revolution 72
Slide 74: =m OOftBank
=m OOftBank
Slide 75: Accounting standard application and definition of terms
1. Application of accounting standard for disclosure on segments The “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” and related “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” are applied fro