Slide 1: Earnings Results for the Three-month Period Ended June 30, 2012
Earnings Results for the Three-month Period Ended June 30, 2012 July 31, 2012 SOFTBANK CORP.
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
Highlights 1 Operating income: record high for 7 consecutive periods 2 Steady growth in telecom service revenue 3 Implementation of interim dividend 2
Slide 4: Consolidated Earnings Results
Consolidated Earnings Results 3
Slide 5: Net Sales
Net Sales 764.2 766.9 Record high for (JPY bn) 4 consecutive periods 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture Others 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 4
Slide 6: EBITDA
EBITDA 284.4 254.2 Record high for (JPY bn) 9 consecutive periods 12% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture Others 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ‘11 ‘12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 5
Slide 7: Operating Income
Operating Income 192.1 175.8 Record high for (JPY bn) 7 consecutive periods 9% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture 0 Others 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
Slide 8: Operating Income vs NTT DOCOMO and KDDI
Operating Income (JPY bn) NTT DOCOMO SOFTBANK 192.1 262.6 2x KDDI KDDI 94.2 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 *Created by SOFTBANK CORP. based on respective companies’ Q1 Q1 publicly available information. 7
Slide 9: Operating Income (YoY)
Operating Income (YoY) +9% SOFTBANK Only winner (2%) NTT DOCOMO (33%) KDDI *Created by SOFTBANK CORP. based on respective companies’ publicly available information. 8
Slide 10: Operating Margin
30% Operating Margin NTT DOCOMO 25% 25.1% SOFTBANK 24.5% No.1 20% 15% KDDI 10.9% 10% ( QUICK ) 2006 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 *Created by SOFTBANK CORP. based on respective companies’ publicly available information. 9
Slide 11: Ordinary Income
Ordinary Income 180.9 (JPY bn) Record high for 151.2 7 consecutive periods 20% increase 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 10
Slide 12: Net Income
Net Income (JPY bn) 94.7 90.6 Dilution gain from changes in equity 13.9 interest mainly related to Renren Steady trend Inc. IPO etc. (special income) 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 11
Slide 13: Summary of Consolidated Earnings Results
Summary of Consolidated Earnings Results (JPY bn) FY11/Q1 FY12/Q1 Change YoY Net sales 764.2 766.9 2.6 100% EBITDA 254.2 284.4 30.1 112% Operating income 175.8 192.1 16.2 109% Ordinary income 151.2 180.9 29.7 120% Net income 94.7 90.6 (4.1) 96% 12
Slide 14: Operating Cash Flow
Operating Cash Flow (JPY bn) 132.0 132.9 131.8 107.0 Steady trend 52.8 2008 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 13
Slide 15: Cash Flow
Cash Flow (JPY bn) FY11/Q1 FY12/Q1 Operating cash flow 107.0 131.8 Free cash flow 30.8 (34.3) 1) CAPEX outlays (77.8) (118.0) 2) Acquisition of ASKUL Corporation shares − (33.0) (by Yahoo Japan) 14
Slide 16: Net Interest-bearing Debt
Net Interest-bearing Debt (JPY t) 2.1 1.9 Maintain 1.5 appropriate 1.1 0.8 level 0.2 Payment related to acquisition of preferred stock, etc. issued to Vodafone Group 2008 ’09 ’10 ’11 ’12 (CY) *Lease obligations are not included. June June June June June 15
Slide 17: Equity Ratio
Equity Ratio 20% 20% Significant improvement 15% 10% 9% 5% 0% 2008 ’09 ’10 ’11 ’12 (CY) June June June June June 16
Slide 18: Interest Expense
Interest Expense 1/3 (JPY bn) 28.4 27.7 27.4 22.4 of peak level 9.0 2008 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 17
Slide 19: Dividend per Share
Dividend per Share FY11 FY12 (plan) Interim dividend JPY 20 Year-end dividend JPY 40 JPY 20 Annual dividend JPY 40 JPY 40 Enhance shareholder return through interim dividend *The interim dividend amount and payout date will be resolved at a separate future Board of Directors meeting. *Year-end divid
Slide 20: Business Results
Business Results 19
Slide 21: Net Subscriber Additions
Net Subscriber Additions 750k Highest ever 730k 700k 320k 2009 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 20
Slide 22: Smartphone Market Share
Smartphone Market Share Rank Operator Model Share No.1 1 SOFTBANK iPhone 4S 28.5% Smartphone 2 au iPhone 4S 16.2% 3 NTT DOCOMO Xperia acro HD 7.0% 4 au Xperia acro HD 4.3% 5 NTT DOCOMO GALAXY Note 3.0% (Source) Survey on number of handsets sold at major electronics retail stores executed by external
Slide 23: Corporate Tablets
Corporate Tablets No.1 NTT DOCOMO 20% corporate tablet SOFTBANK 80% (Source) Survey by external research company. *iPad represents 3G model only. Share of active devices as of June 2012 22
Slide 24: No. of Corporate iPad Customers
No. of Corporate iPad Customers Exceeds 70k co.’s 18x in 2 years Gulliver VI manual 7 4k co.’s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 05 2010 2011 2012 (FY) *Customers using 3G model. 23
Slide 25: No. of Google Apps IDs Acquired
No. of Google Apps IDs Acquired Cumulative 240k IDs Global No.1 8k Q1 Q2 Q3 Q4 Q1 2011 2012 (FY) *“Global No.1”: actual sales results of Google Apps for Business from Jan. to June, 2012 24
Slide 26: WILLCOM Subscribers
WILLCOM Subscribers 4.86mil Record high 3.77mil May 2009 Dec. 2010 June 2012 *PHS + 3G 25
Slide 27: Cumulative Subscribers
Cumulative Subscribers 35.68mil 34.40mil Closing in au on au WILLCOM 15.22mil Apr. 2006 June 2012 26
Slide 28: Towards Profit No.1
Towards Profit No.1 27
Slide 29: Operating Income vs NTT DOCOMO and KDDI
Operating Income (JPY bn) NTT DOCOMO SOFTBANK 192.1 262.6 2x KDDI KDDI 94.2 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 *Created by SOFTBANK CORP. based on respective companies’ Q1 Q1 publicly available information. 28
Slide 30: ARPU
ARPU (JPY) JPY 5,900 6,000 JPY 5,890 5,500 Unique growth NTT DOCOMO 5,000 au JPY 4,650 4,500 JPY 4,180 JPY 4,300 SOFTBANK JPY 4,240 4,000 *Excluding communication modules 3,500 Created by SOFTBANK CORP. based on respective companies’ publicly available information. 2008 ’09 ’10 ’11 ’12 (FY) au FY201
Slide 31: Mobile Telecom Service Revenue
Mobile Telecom Service Revenue 377.3 Steady growth (JPY bn) 347.5 307.5 254.8 270.5 9% increase 2008 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 30
Slide 32: Mobile Telecom Service Revenue (YoY)
Mobile Telecom Service Revenue (YoY) +9% Only winner SOFTBANK (3%) (4%) NTT au DOCOMO *Created by SOFTBANK CORP. based on respective companies’ publicly available information. au: Personal Service segment 31
Slide 33: Mobile Telecom Service Revenue: Data Growth
Mobile Telecom Service Revenue (JPY bn) 377.3 Significant growth in data 347.5 307.5 270.5 254.8 153.5 Voice revenue, etc. 158.8 157.2 153.4 161.8 Data revenue 223.7 +19% 188.6 150.2 117.0 93.0 2008 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 32
Slide 34: Mobile Operating Income
Mobile Operating Income 128.1 5x (JPY bn) 27.2 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 33
Slide 35: Fixed-line Operating Income
Fixed-line Operating Income 25.0 Profitable (JPY bn) 0 (28.8) 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) *Broadband Infrastructure Fixed-line Telecommunications Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 34
Slide 36: Yahoo Japan Operating Income
Yahoo Japan Operating Income 42.1 (JPY bn) Growth re-accelerates 0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 35
Slide 37: Enhance Network Towards Further Growth
Enhance Network Towards Further Growth 36
Slide 38: No. of Base Stations
No. of Base Stations 190k 10x since acquisition Acquisition of Vodafone Japan ▼ 20k *Excluding home femtocell and home repeaters. 2006 ’07 ’08 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 37
Slide 39: Number of Wi-Fi Spots
Number of Wi-Fi Spots SOFTBANK 270,000 au 100,000 NTT 23,300 Overwhelmingly No.1 DOCOMO *As of July 31, 2012 38
Slide 40: Communication Speed
Communication Speed SoftBank 4G LTE 110 Mbps NTT DOCOMO 37.5 Mbps Fastest in the Xi LTE industry UQ WiMAX 40 Mbps *Outdoor maximum downlink speed NTT DOCOMO: 12 spots throughout Japan are compatible with 75 Mbps (as of July 30, 2012). 39
Slide 41: Actual Communication Speed
Actual Communication Speed SoftBank 4G LTE 34 Mbps Akihabara NTT DOCOMOLTEXi 2 Mbps UQ WiMAX 1 Mbps SoftBank 4G LTE 28 Mbps Shinjuku NTT DOCOMO Xi LTE 9 Mbps UQ WiMAX 2 Mbps SoftBank 4G LTE 29 Mbps Yurakucho NTT DOCOMOLTEXi 8 Mbps UQ WiMAX 5 Mbps (Source) NIKKEI PERSONAL COMPUTING (April 9, 2012) 40
Slide 42: Improving Area Coverage
60 SOFTBANK Image: Improving Area Coverage 55 Improving ( ) 50 50% 45 40 39% 35 30 Sept. Dec. Mar. June *External survey (approx. 3,000 SOFTBANK MOBILE users/month) 2011 2012 41
Slide 43: Platinum Band
Platinum Band Start roll-out from July 25, 2012 42
Slide 44: Video
Video 43
Slide 45: Consolidated CAPEX
Consolidated CAPEX (JPY bn) 612.4 516.3 Enhancing 420.5 450.0 CAPEX *FY2012 excludes Fukuoka Yahoo! JAPAN Dome related CAPEX (JPY 87.6bn). 2010 ’11 ’12 ’13 (FY) (plan) 44
Slide 46: LTE Flat-rate Plan for Smartphones
LTE Flat-rate plan for Smartphones JPY 5,985/month Launch this fall 45
Slide 47: Growth in Data Revenue
Mobile Telecom Service Revenue (JPY bn) 377.3 Growth in data revenue 347.5 307.5 270.5 254.8 153.5 Voice revenue, etc. 158.8 157.2 153.4 161.8 Data revenue 223.7 +19% 188.6 150.2 117.0 93.0 2008 ’09 ’10 ’11 ’12 (FY) Q1 Q1 Q1 Q1 Q1 46
Slide 48: Towards Profit No.1
Towards Profit No.1 47
Slide 49: Towards Profit No.1
Operating Income (JPY bn) NTT DOCOMO 262.6 192.1 SOFTBANK KDDI Towards profit No.1 94.2 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 ’12 (FY) *Created by SOFTBANK CORP. based on respective companies’ Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 publicly available information. 48
Slide 50: Operating Income CAGR (FY2005-2011)
Operating Income CAGR (FY2005-2011) SOFTBANK 49% Bharti Airtel 16% America Movil 11% China Mobile 10% Global No.1 AT&T 2% Vodafone -1% Verizon -5% Telefonica -7% 49
Slide 51: Operating Income Indexed with FY2005
Operating Income (Indexed with FY2005 = 100) 1,200 SOFTBANK Global No.1 900 600 America Movil Bharti Airtel 300 China Mobile AT&T Vodafone Group 100 Verizon Telefonica 0 2005 ’06 ’07 ’08 ’09 ’10 ’11 (FY) *Created by SOFTBANK CORP. based on Bloomberg data. 50
Slide 52: Internet Company Culture
Internet Company Culture 51
Slide 53: Mobile Internet Companies
960 Mobile Internet Companies Mobile communication platform *As of March 2012 52
Slide 54: 2017/3 Target Consolidated Operating Income JPY 1t
2017/3 Target Consolidated Operating Income JPY 1t 53
Slide 55: Maximize Shareholders Value
Maximize Shareholders Value 54
Slide 56: SoftBank
SoftBank
Slide 57: Application of Accounting Standard 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