Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2020 Earnings Presentation
28 slides from Softbank's earnings presentation, Feb 10, 2021
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2020
Ver.1.2 Earnings Results for the Nine-month Period Ended December 31, 2020 Investor Briefing February 10, 2021 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 used for translation and abbreviations
Exchange rates used for translation FY2019 FY2020 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 110.00 107.70 108.98 109.22 107.74 105.88 104.45 1 CNY 16.13 15.37 15.46 15.56 15.16 15.27 15.71 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 108.83 103.50 1 CNY 15.31 15.88 Ab
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results FY19 FY20 (JPY bn) Q1-Q3 Q1-Q3 Change YoY Net sales 3,901.3 4,138.0 236.7 6.1% Income before 1,442.7 3,361.5 1,918.8 133.0% income tax Net income (attributable to owners of 476.6 3,055.2 2,578.6 541.0% the parent) (Reference) Gain on investments 131.8 3,799.5 3,667.7 - Investmen
Slide 6: Change in Reportable Segments
Change in Reportable Segments • In Q1, “Investment Business of Holding Companies” was newly established. Segment income was revised to “income before income tax.” • In Q2, “Brightstar segment” was removed. “SoftBank Vision Fund and Other SBIA-Managed Funds” was renamed to “SVF1 and Other SBIA-Manage
Slide 7: Entry into Agreement for Sale of All Shares in Arm – Overview
Entry into Agreement for Sale of All Shares in Arm – Overview • In Sep 2020, the Company agreed to sell all of Arm shares to NVIDIA. • As the Company expects to receive approx. 6.7- 8.1% of NVIDIA shares, further upside can be enjoyed as the largest shareholder when the share price goes higher. (USD
Slide 8: Entry into Agreement for Sale of All Shares in Arm – Accounting
Entry into Agreement for Sale of All Shares in Arm – Accounting • Arm will continue to be classified under continuing FY20 FY21 FY22 operations (until the closing of the transaction is deemed Sep 13 (execution of Closing Purchase Agreement) Approx.18 months highly probable, such as obtaining regulat
Slide 9: Derivative gain (loss) on Alibaba Prepaid Forward Contracts
Derivative gain (loss) on Alibaba Prepaid Forward Contracts Q2-end: $293.98 Alibaba share price Q3-end: Amendment of contracts $232.73 Q1-end: (JPY bn) $215.7 (JPY bn) FY20Q3 YTD Income before -485.4 Signing income tax (-$4.5B) Net income -705.5 (-$6.6B) 280.9 Derivative gain 184.4 ($2.7B) ($1.7B) -
Slide 10: Segment Income - Investment Business of Holding Companies
Segment Income - Investment Business of Holding Companies (JPY bn) P/L FY19 FY20 Items Q1-Q3 Q1-Q3 Gain on investments 840.7 846.5 (1) Gain of 280.3 bn on sales of T-Mobile shares (2) Gain of 296.0 bn on the revaluation of T-Mobile shares continued to be held by the Company (3) Derivative loss of 15
Slide 11: Investment Business of Holding Companies Segment
Investment Business of Holding Companies Segment • Main businesses: Investment activities by SBG and its subsidiaries • Core companies: SBG, SBGC, SBGJ and SB Northstar SBG By contract, two-thirds of gain/loss is attributable to SBG and the remaining one-third to non-controlling interests (Masayoshi
Slide 12: Investment in Listed Stocks and Other Instruments
Investment in Listed Stocks and Other Instruments • In order to diversify assets and manage surplus funds, investments were initially made by SBG directly and later by asset management subsidiary SB Northstar from Q2. • SB Northstar is engaged in acquiring and selling listed stocks and derivative an
Slide 13: Investment in Listed Stocks and Other Instruments: Main Impact on B/S and P/L
Investment in Listed Stocks and Other Instruments: Main Impact on B/S and P/L (Gain (Loss) on Investments) (JPY bn) Consolidated B/S Consolidated P/L Investor Investment type FY20Q3-end Gain (loss) recorded Account balance Account (minuses indicate FY20 liabilities) Q1 Q2 Q3 Q1-Q3 Realized gain on s
Slide 14: Investment in Listed Stocks by SB Northstar: Gain/Loss Transferred from SBG in P/L
Investment in Listed Stocks by SB Northstar: Gain/Loss on Investments Transferred from SBG in P/L In case that SB Northstar continues Fair value held to hold listed shares after the shares at SB Northstar are transferred from SBG Transfer value P/L accounts to SB Northstar Valuation gain at SB North
Slide 15: Impact of the Asset Management Subsidiaries on SBG Consolidated B/S
Impact of the Asset Management Subsidiaries on SBG Consolidated B/S*1 (JPY bn) December 31, December 31, 2020 2020 Cash and cash equivalents 284.9 Interest-bearing debt 1,528.8 Investments from asset management subsidiaries 1,039.9 Derivative financial liabilities in asset management subsidiaries 64
Slide 16: Price Sensitivity of Derivatives at SB Northstar
Price Sensitivity of Derivatives at SB Northstar (FY20Q3-end) The below table shows the impact on income before income tax of changes in the market prices of the underlying assets for long and short call options of listed stocks, short stock index futures contracts, and total return swap contracts o
Slide 17: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) FY19 FY20 (JPY bn) P/L item Change Q1-Q3 Q1-Q3 Gain on investments at Investment Business of Holding Companies: +846.5 bn Continuing operations (see page 7, 10, 24 for details) Net sales 3,901.3 4,138.0 +236.7 ・Gain relating to sales of T-Mobile shares: 421.8 bn ・Unr
Slide 18: Consolidated B/S Summary (IFRSs) - Assets
Consolidated B/S Summary (IFRSs) - 1 (JPY bn) B/S As of As of Main items Change Increased mainly due to the sale and monetization of assets under the JPY 4.5 trillion program item Mar 2020 Dec 2020 15,636.9 10,066.9 -5,570.0 1 Current assets related to investments from SB Northstar Cash and cash equ
Slide 19: Consolidated B/S Summary (IFRSs) - Liabilities
Consolidated B/S Summary (IFRSs) - 2 B/S As of As of (JPY bn) Main items Change item Mar 2020 Dec 2020 1 Current Interest-bearing debt of SB Northstar 14,191.1 9,810.7 -4,380.5 ・Short-term borrowings to be used in transactions for listed stocks: +910.0 bn 1 ・Borrowings made using Alibaba shares (mar
Slide 20: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2020 Dec 2020 7,372.9 8,622.3 +1,249.4 Changes in interests in subsidiaries resulting from the partial sale of SBKK shares: +932.4 bn Common stock 238.8 238.8 - 1 Capital surplus 1,490.3 2,401.8 +911.5 Net income att
Slide 21: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (JPY bn) C/F from operating activities: -73.0 bn (-696.7 bn yoy) FY19Q1-Q3: Includes Sprint’s cash flow of 431.4 bn FY19 FY20 C/F item Primary details for FY20Q1-Q3 (deconsolidated at the beginning of FY20) Q1-Q3 Q1-Q3 FY20Q1-Q3: SB Northstar -885.6 bn (before elimin
Slide 22: Segment Income - SVF1 and Other SBIA-Managed Funds
Segment Income - SVF1 and Other SBIA-Managed Funds (JPY bn) FY19 FY20 P/L Q1-Q3 Q1-Q3 Items Gain on investments at SVF1 and SVF2 -729.0 2,767.3 SVF1 Realized gain on sales of investments 14.6 205.3 Sale of a portion of shares in 4 portfolio companies and all shares in 7 portfolio companies (includin
Slide 23: Appendix
Appendix
Slide 24: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (JPY bn) Change B/S As of As of Main items Changes in Outline item Mar 2020 Dec 2020 Amortization exchange Others rate 3,998.2 3,875.9 *1 Goodwill Arm 2,554.1 2,461.3 - -92.8 - SBKK 907.5 907.5 - - - ZOZO 212.9 212.9 - - - Technologies 395.6 353.4 Main b/d A
Slide 25: Changes in Presentation of P/L
Changes in Presentation of P/L In FY20Q1, “Gain (loss) on investments” is newly P/L after the revision of the presentation presented Operating income is no longer used Net sales Gross profit • The importance of investment activities has increased in the consolidated results, following the comple
Slide 26: Accounting Treatment for Partial Sale of SBKK Shares and After-tax Cash Proceeds
Accounting Treatment for Partial Sale of SBKK Shares and After-tax Cash Proceeds • In May and Sep 2020, SBG sold a total of 1.27 bn shares of SBKK held through SBGJ (SoftBank Group Japan Corp.) and received a total of JPY 1.5 tn. May: 240 mil shares (shareholding ratio: 5.0%) sold for JPY 310.2 bn
Slide 27: Partial Sale of T-Mobile Shares and Evaluation at Q3-end
Partial Sale of T-Mobile Shares and Evaluation at Q3-end The Company sold (1) and (2) below in FY20Q1 and received JPY 1,830.4 bn. With additional sales of (3) and (4) in Q2, the Company received JPY 2,099.7 bn in aggregate for FY20Q1-Q2. P/L (FY20Q1-Q3) (JPY bn) Evaluation at Q3-end Gain relating t
Slide 28: SoftBank
SoftBank