Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2023 Earnings Presentation
32 slides from Softbank's earnings presentation, Feb 8, 2024
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2023
Ver.1.1 Earnings Results for the Nine-month Period Ended December 31, 2023 Investor Briefing February 8, 2024 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment including any offer to buy
Slide 3: Exchange rates and abbreviations
Exchange rates per JPY used for translation FY2022 FY2023 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 129.04 138.68 141.16 133.26 138.11 145.44 147.00 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 133.53 141.83 Abbreviations Abbreviations used in Accounting section of th
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results FY22 FY23 (¥ B) Q1-Q3 Q1-Q3 Change Change % Net sales 4,875.8 5,001.9 +126.1 +2.6% Income before -290.0 264.1 +554.1 ー income tax Net income (attributable to owners of the -912.5 -458.7 +453.8 ー parent) (Reference) Loss on investments -1,361.2 -538.9 +822.2 ー Investment Business
Slide 6: Net Income & SVF Segment Income
Net Income & SVF Segment Income 3,033.6 950.0 (¥ B) 422.7 Net income SVF segment income -57.6 61.0 (income before income tax) -660.1 • Includes investment gain in Arm shares -297.5 -258.9 • After considering third-party interests -1,019.9 -477.6 -783.4 -931.1 -2,330.8 -3,162.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 F
Slide 7: Investment Business of Holding Companies Segment
Investment Business of Holding Companies Segment (¥ B) FY22 FY23 P/L item FY23Q1-Q3 Main Items Q1-Q3 Q1-Q3 Gain/loss on investments at Investment 3,699.7 -583.4 Business of Holding Companies Gain relating to settlement of prepaid forward contracts using Alibaba shares 4,838.3 ― Gain/loss relating to
Slide 8: Acquisition of T-Mobile Shares for No Additional Consideration
Acquisition of T-Mobile Shares for No Additional Consideration Contingent consideration The condition of 45-day trailing VWAP of T-Mobile share (Part of consideration for the merger between Sprint and T-Mobile) ≧ $149.35 was satisfied on Dec 22, 2023 Acquired 48.8M T-Mobile shares for no additional
Slide 9: T-Mobile: Shareholding & Fair Values
T-Mobile: Shareholding & Fair Values includes shares subject to unexercised Deutsche Telekom’s call options Held 92.1M T-Mobile shares T-Mobile share price $160.33 at FY23Q3, up 52.3M shares $140.00 $144.84 $138.90 $140.05 from FY22Q4 Received 3.6M shares upon vesting contingent value rights (CVR)
Slide 10: Deutsche Telekom: Shareholding & Fair Values
Deutsche Telekom: Shareholding & Fair Values Acquired 225M Deutsche Deutsche Telekom share price Telekom shares in Sep 2021 €22.35 €21.75 in return for the sale of T-Mobile shares €19.98 €19.87 €18.64 -$56M (-¥3.0B) valuation loss for FY23Q1-Q3 Fair value of Deutsche Telekom shares ($ M) (i) DT sh
Slide 11: Alibaba Shares & Derivative Financial Assets/Liabilities
Alibaba Shares & Derivative Financial Assets/Liabilities (Amount Recorded in B/S) Value of Alibaba shares Derivative financial Investment securities (FVTPL) recorded in B/S assets/liabilities (net) considering prepaid Alibaba share price forward contracts: $102.18 $102.18 $31,384M ( A + B ) $77.51 $
Slide 12: SoftBank Vision Funds Segment
SoftBank Vision Funds Segment (¥ B) FY22 FY23 P/L Q1-Q3 Q1-Q3 FY23Q1-Q3 Main Items In consolidated P/L, loss on investments at SoftBank Vision Gain/loss on investments at SoftBank Vision Funds -5,042.7 781.9 Funds was ¥52.0B (see p10) ¥767.4B gain at SVF1, ¥96.8B loss at SVF2 Gain/loss on investment
Slide 13: Difference between Segment Results and Consolidated P/L
Difference between Segment Results and Consolidated P/L (i) Investment gains/losses related to subsidiaries, mainly Arm and PayPay, are included in “gain/loss on investments at SoftBank Vision Funds” (segment information), but are eliminated in consolidations and excluded from “gain/loss on investme
Slide 14: (Reference) Investment Performance of SVF1 and SVF2
(Reference) Investment Performance of SVF1 and SVF2 ($ B) Since Inception FY23*1 Gain/loss Gain/loss Cost*2 Returns*2 Gain/loss Q3 Q1-Q3 SVF1 89.6 106.3 16.7 1.9 5.3 Exited investments 36.1 61.7 25.6 0.6 6.9 Investments before exit 53.5 42.2 -11.3 1.7 -0.6 Reversal of previously-recorded valuation g
Slide 15: Status of Investment and Financial Support for WeWork
Status of Investment and Financial Support for WeWork (Cumulative) ($ M) Cumulative acquisition cost as of Dec 2023 Cumulative cash flows (SBG consolidated basis) Cumulative loss Carrying other than acquisition as of Dec 2023 amount * Exchange from of investments as of (SBG consolidated Amount paid
Slide 16: Bridge to Arm's disclosure (FY23 Q1-Q3 P/L)
Arm Segment in SBG’s Consolidated Financial Report Bridge to Arm’s disclosure (FY23 Q1-Q3 P/L) Adjustment (1) Adjustment (2) Adjustment (3) Amortization expenses SBG Consolidated related to intangible Difference in assets recognized in accounting Arm Financial Report Arm segment the purchase price s
Slide 17: Consolidated P/L Summary
Consolidated P/L Summary (¥ B) FY22 FY23 P/L item Change Q1-Q3 Q1-Q3 1 ・¥225.4B derivative gain on investments Net sales 4,875.8 5,001.9 +126.1 ・¥943.0B realized and unrealized valuation losses on Alibaba shares Gross profit 2,579.1 2,665.2 +86.1 (offset by ¥1,204.7B derivative gain related to Aliba
Slide 18: Consolidated B/S Summary – Non-current assets
Consolidated B/S Summary – 1 (¥ B) B/S Main items Mar 2023 Dec 2023 Change item 1 SBG and wholly owned subsidiaries conducting fund procurement, etc.: ¥3,354.5B (¥730.5B decrease) Current assets 10,586.5 10,927.1 +340.6 Cash and cash equivalents 6,925.2 1 6,163.7 -761.5 2 ・¥414.7B increase for Aliba
Slide 19: Investment Securities in Consolidated B/S (Main Investments)
Investment Securities in Consolidated B/S (Main Investments) (¥ B) Mar 2023 Dec 2023 Change Outline Investment securities 7,706.5 8,619.9 +913.4 FVTPL 7,244.3 7,953.4 +709.1 4,842.3 3,769.8 -1,072.5 Decreased mainly due to lower share price and the physical Alibaba $36,264M $26,580M -$9,684M settlem
Slide 20: Breakdown of Goodwill/Intangible Assets
Breakdown of Goodwill/Intangible Assets (¥ B) Change B/S Main items Mar 2023 Dec 2023 Amorti- Changes in Outline Item Others zation FX rate 5,199.5 5,419.5 *1 Goodwill Arm 3,161.7 3,358.3 ― +196.6 ― SBKK 913.9 913.9 ― ― ― LY*2 647.4 647.4 ― ― ― ZOZO 214.0 214.0 ― ― ― Technologies 344.3 349.0 Main Ar
Slide 21: Consolidated B/S Summary – Non-current liabilities
Consolidated B/S Summary – 2 (¥ B) B/S Main items Mar 2023 Dec 2023 Change item 10,580.7 12,088.8 +1,508.1 Interest-bearing debt 5,129.0 1 6,624.0 +1,495.0 1 SBG Borrowings*: ¥446.4B (¥64.5B increase) Lease liabilities 184.1 152.7 -31.4 Current liabilities Corporate bonds*: ¥5,902.0B (¥149.0B increa
Slide 22: Consolidated B/S Summary – Equity
Consolidated B/S Summary – 3 (¥ B) Mar Dec Items Change 2023 2023 10,649.2 11,712.6 +1,063.4 1 Amount equivalent to the gain on the sale of Arm shares upon Common stock 238.8 238.8 ― its IPO :¥674.4B Capital surplus 2,652.8 3,322.6 1 +669.8 2 Redeemed $2.0B USD-denominated NC6 undated hybrid notes 3
Slide 23: Impact of the Weaker Yen on P/L & B/S (Illustration)
Impact of the Weaker Yen on P/L & B/S (Illustration) P/L B/S Entities Components Foreign exchange Exchange differences gain (loss) from translation Foreign currency- denominated cash and cash equivalents/ SBG stand-alone + Loans receivable Foreign exchange gain Subsidiaries conducting (excl. investm
Slide 24: Impact of the Weaker Yen in FY23Q1-Q3
Impact of the Weaker Yen in FY23Q1-Q3 (from ¥133.53/$ to ¥141.83/$) Foreign exchange loss in consolidated P/L for FY23Q1-Q3: ¥308.2B At SBG stand-alone: Foreign exchange losses of ¥456.7B related to foreign currency-denominated borrowings from Group companies, ¥47.1B related to foreign currency-deno
Slide 25: Impact of the Stronger Yen in FY23Q3
Impact of the Stronger Yen in FY23Q3 (from ¥149.58/$ to ¥141.83/$) Foreign exchange gain in consolidated P/L for FY23Q3: ¥339.9B At SBG stand-alone: Foreign exchange gains of ¥498.0B related to foreign currency-denominated borrowings from Group companies, ¥17.9B related to foreign currency-denominat
Slide 26: Consolidated C/F Summary
Consolidated C/F Summary (¥ B) C/F FY22 FY23 Primary details for FY23Q1-Q3 item Q1-Q3 Q1-Q3 1 ¥149.7B net inflow, despite income taxes and outlays for the acquisition of corporate and government bonds by asset management subsidiaries +1,077.6 Subtotal of cash flows from operating activities ・¥854.9B
Slide 27: Income Taxes Paid on a Consolidated Basis (Net)
Income Taxes Paid on a Consolidated Basis (Net) (¥ B) FY23 FY18 FY19 FY20 FY21 FY22 Total Q1-Q3 Consolidated 415.4 636.3 445.5 589.3 525.9 2,612.4 787.3 Japan 284.3 575.2 310.5 551.2 469.7 2,190.9 705.2 SBG and holding companies (wholly 36.8 324.7 35.7 200.0 214.2 811.4 432.9 owned subsidiaries) Ope
Slide 28: Co-investment Program to SVF2: Related Party Transactions
Co-investment Program to SVF2: Related Party Transactions Equity interests of third-party interests Masayoshi SBG FY23Q3: $― (¥―) Son* 1 FY22: $― (¥―) Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $2,923M 100% (Return of capital) (i) Acquisition costs: $2,594M (comm
Slide 29: Co-investment Program to LatAm Funds & Management's Investment
Co-investment Program to LatAm Funds & Management’s Investment in Asset Management Subsidiary Co-investment program to LatAm Funds Management’s investment in Equity interests of third-party investors asset management subsidiary FY23Q3: $135M ( ¥19.1B) FY22: $215M (¥28.7B) Masayoshi SBG Masayoshi Son
Slide 30: Appendix
Appendix
Slide 31: Arm IPO and Accounting Treatment
Arm IPO and Accounting Treatment In September 2023, SBG’s wholly owned subsidiary disposed 10%* of Arm shares in the IPO and received proceeds of $5.12B. The amount equivalent to the gain on the disposal was $4.65B. Arm continues to be SBG’s consolidated subsidiary post-IPO as SBG holds 90%* of
Slide 32: Bridge to Arm's Form F-1 (FY22 P/L)
Arm Segment in SBG’s Consolidated Financial Report Bridge to Arm’s Form F-1 (FY22 P/L) Adjustment (1) Adjustment (2) Adjustment (3) Amortization expenses SBG Consolidated related to intangible Difference in Reflecting the latest assets recognized in accounting available Arm Financial Report Arm segm