Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2013
Earnings Results for the Fiscal Year Ended March 31, 2013 April 30, 2013 SoftBank Corp.
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements This document 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,” “providing gu
Slide 3: Acquisition of Vodafone K.K.
7 years ago Acquisition of Vodafone K.K. (in 2006) 2
Slide 4: Losing on all major fronts
2006/3 4% Net adds share 48% Approx. 18k Base stations Approx. 30k No.31 CM preference No.5 Operating JPY 76.3bn income JPY 832.6bn Losing on all major fronts NTT DOCOMO’s base stations: number of FOMA base stations (DOCOMO Tsushin vol. 30) CM Preference Ranking: CM DATABANK (out of 2,038 companies)
Slide 5: ambition
ambition
Slide 6: Exceed DOCOMO within 10 years
Exceed DOCOMO within 10 years 5
Slide 7: Consolidated Results
Consolidated Results 6
Slide 8: Net Sales: Record high for 3 consecutive years
Net Sales JPY 3.4t JPY 3.2t Record high for 3 consecutive years 6% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture (Yahoo Japan, etc.) Others 0 2004/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY)
Slide 9: EBITDA: Record high for 8 consecutive years
EBITDA JPY 1.1t JPY 1.0t Record high for 8 consecutive years 13% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture (Yahoo Japan, etc.) Others 0 2004/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 8
Slide 10: No.1 in both Japan & US
(%) Mobile EBITDA Margin 50 50% SoftBank 47% Verizon 42% NTT DOCOMO 41% 40 39% AT&T KDDI No.1 in both 30 Japan & US *Created by SoftBank based on respective companies’ publicly available information. Japanese companies: Apr.- Mar. period, US companies: Jan.-Dec. period. 2005 ’06 ’07 ’08 ’09 ’10 ’11
Slide 11: Operating Income: Record high for 8 consecutive years
Operating Income 745.0 (JPY bn) 675.2 Record high for 8 consecutive years 10% increase 3 Telecommunications businesses (Mobile Communications, Broadband Infrastructure, Fixed-line Telecommunications) Internet Culture (Yahoo Japan, etc.) 0 Others 2004/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
Slide 12: Closing in on DOCOMO
(JPY bn) Operating Income NTT DOCOMO 837.2 745.0 SoftBank Closing in on DOCOMO 0 2006/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) *Created by SoftBank based on respective companies’ publicly available information. 11
Slide 13: Significant Increase
Operating Income Growth Rate (2013/3) +10% Significant Increase 0 SoftBank (4%) NTT DOCOMO *Created by SoftBank based on respective companies’ publicly available information. 12
Slide 14: Ordinary Income: Record high for 4 consecutive years
(JPY bn) Ordinary Income 653.2 573.6 Record high for 4 consecutive years 14% increase 0 2004/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 13
Slide 15: Net Income: Stable Trend
(JPY bn) Net Income Impact from sales of Yahoo! 313.7 289.4 Stable Trend Inc. shares in US 44.7 Impact from IPO of 17.1 Renren Inc. and others 0 2004/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 14
Slide 16: Summary of Consolidated Earnings Results
Summary of Consolidated Earnings Results (JPY bn) 2012/3 2013/3 Increment YoY Net sales 3,202.4 3,378.3 175.9 106% EBITDA 1,013.7 1,149.8 136.0 113% Operating income 675.2 745.0 69.7 110% Ordinary income 573.6 653.2 79.5 114% Net income 313.7 289.4 (24.3) 92% 15
Slide 17: Operating Cash Flow: Steady Growth
Operating Cash Flow (JPY bn) 894.4 825.8 740.2 Steady Growth 668.0 447.8 158.2 2008/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 16
Slide 18: Cash Flow
Cash Flow (JPY bn) 2012/3 2013/3 Operating cash flow 740.2 894.4 Free cash flow 364.5 (25.3) Breakdown 1) Acquisition of Sprint convertible bonds - (249.3) 2) Sales of Yahoo! Inc. shares 57.1 - 3) CAPEX (455.0) (548.6) 17
Slide 19: Net Interest-bearing Debt: Steady Reduction
Net Interest-bearing Debt (JPY t) 1.9 1.5 Steady 1.2 Reduction 0.73 Acquisition of Sprint 0.5 0.25 convertible bond 0.48 2009/3 ’10/3 ’11/3 ’12/3 ’13/3 (CY) *Excluding lease obligations. 18
Slide 20: Net Debt/EBITDA Multiple: Maintaining Appropriate Level
(times) Net Debt/EBITDA Multiple 4.0 2.9x Maintaining Appropriate 3.0 2.0 Level 1.0 0.6x 0.5x 0 2009/3 ’10/3 ’11/3 ’12/3 ’13/3 (CY) *Excluding lease obligations. 19
Slide 21: Net Debt/EBITDA Multiple Including Lease Obligations
(times) Net Debt/EBITDA Multiple 4.0 3.5x Maintaining Appropriate 3.0 2.0 Level Including Lease 1.3x Obligations 1.0 1.1x 0 2009/3 ’10/3 ’11/3 ’12/3 ’13/3 (CY) *Lease obligations included in this analysis represent finance leases. 20
Slide 22: No change in dividend policy
Dividend per Share 2012/3 2013/3 (JPY) Interim 20 Year-end 40 20 (plan) Annual dividend 40 40 (plan) No change in dividend policy 21
Slide 23: Communication Business in Japan
Communication Business in Japan 22
Slide 24: Annual Net Additions: Exceeded 10 million
Annual Net Additions 3.53m 3.54m 3.53m Exceeded 10 million in 3 years 0.17m 2006/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 23
Slide 25: Overwhelmingly No.1 in Net Additions
Net Additions (2013/3) Overwhelmingly 4.36m EMOBILE No.1 WILLCOM 3.53m 2.60m 1.40m *Created by SoftBank based on respective companies’ publicly available information. NTT DOCOMO au SoftBank 24
Slide 26: No.2 in Japan & US
Net Additions (2013/3) 5.92m 4.97m No.2 in Sprint EMOBILE 3.76m Japan & US WILLCOM 2.60m 1.40m *Created by SoftBank based on respective companies’ publicly available information. NTT DOCOMO au AT&T SoftBank Verizon 25
Slide 27: Subscribers in Japan: Steady Growth
Subscribers in Japan 41.88m Steady Growth 15.22m 10m Apr. 2006 Mar. 2013 26
Slide 28: Subscribers
Subscribers (m) 100 80 60 NTT DOCOMO 61.54m 41.88m 40 20 *Created by SoftBank based on respective companies’ publicly available information. 2007/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 27
Slide 29: Closing in on Verizon
Subscribers (m) 100 98.93m 97.10m 80 Verizon NTT DOCOMO 61.54m Closing in on Verizon 60 40 20 *Created by SoftBank based on respective companies’ publicly available information. 2007/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) *Verizon: retail subscribers. 28
Slide 30: ARPU: Steady Trend
(JPY) 9,000 8,480 ARPU (2002/3 - 2013/3) 8,080 7,000 7,600 Steady Trend NTT DOCOMO Vodafone au 5,000 4,420 4,290 SoftBank 4,160 (company estimate) *Excluding communication modules. Created by SoftBank based 3,000 on respective companies’ publicly available information. 2002/3 ’03/3 ’04/3 ’05/3 ’06/3
Slide 31: Mobile Telecom Service Revenue: Steady Growth
Mobile Telecom Service Revenue 1,567.3 (JPY bn) 1,433.4 Steady Growth 9% increase 2008/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 30
Slide 32: Mobile Service Revenue Growth Rate: No.1 in Japan & US
Mobile Service Revenue Growth Rate (FY2012) SoftBank +9% Verizon +8% Sprint +6% AT&T +4% Metro PCS +3% NTT DOCOMO (1%) No.1 in au (2%) (Q3) Japan & US T-Mobile (7%) *Created by SoftBank based on respective companies’ publicly available information. Communication service revenue for personal segment
Slide 33: Mobile EBITDA Margin: Improved Dramatically
Mobile EBITDA Margin (%) 55 50% 50 Improved Dramatically 45 40 38% 35 30 27% 25 *Mobile EBITDA margin = mobile EBITDA/mobile telecom service revenue 2003/3’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 32
Slide 34: Mobile EBITDA Margin: Global No.1
Mobile EBITDA Margin (FY2012) SoftBank 50% China Mobile 48% Verizon 47% NTT DOCOMO 42% AT&T 39% Bharti Airtel (Q3) 31% Global No.1 *Created by SoftBank based on respective companies’ publicly available information. 20% Mobile EBITDA margin = mobile EBITDA/ mobile telecom service revenue 33
Slide 35: Mobile Operating Income: Record high
Mobile Operating Income 467.8 (JPY bn) 429.2 Record high for SoftBank 4 consecutive years 9% increase Vodafone Japan 76.3 0 2003/3’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 34
Slide 36: Mobile EBITDA: 14% increase
Mobile EBITDA 783.0 (JPY bn) 684.1 Record high for SoftBank 6 consecutive years Vodafone Japan 14% increase 300.8 0 2003/3’04/3 ’05/3 ’06/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 (FY) 35
Slide 37: Mobile EBITDA Growth Rate (FY2012)
Mobile EBITDA Growth Rate (FY2012) SoftBank +14% Verizon +12% AT&T +7% China Mobile +1% Bharti Airtel (1%) Global No.1 (Q3) NTT DOCOMO (1%) *Created by SoftBank based on respective companies’ publicly available information. 36
Slide 38: WILLCOM Subscribers: Record High
(m) WILLCOM Subscribers 5.36m Record 5.0 High Profitable since FY2011/Q2 4.5 4.0 3.77m 3.5 3.0 May 2009 Dec. 2010 Mar. 2013 *PHS+3G 37
Slide 39: Expect WILLCOM to be a consolidated subsidiary beginning Q2 FY2014/3
Will make a bullet repayment of WILLCOM’s reorganization claims and reorganization security interests (approx. JPY 27bn) (Court plans to terminate rehabilitation proceedings upon bullet repayment) Expect WILLCOM to be a consolidated subsidiary beginning in Q2 FY2014/3 38
Slide 40: Approaching No.1 in Connectivity
Approaching No.1 in Connectivity 39
Slide 41: Platinum Band Base Stations: Exceeded & Achieved Ahead of Schedule
Platinum Band Base Stations 22k Exceeded & 16k Target in Mar. 2013 (submitted plan) Achieved Ahead of Schedule July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 2012 2013 40
Slide 42: Call Connection Rate (Japan)
Call Connection Rate (Japan) Platinum Band Smartphones iPhone 5 Only 99% SoftBank No.1 99% SoftBank No.1 98.6% 98.5% 98% 98% 97.8 97.8 97.6 Competitor 97% 97% July 24, 2012 Apr. 23, 2013 Nov. 6, 2012 Apr. 23, 2013 *Surveyed by IPSOS. Left chart: actual connection rate on calls made to 14,100 smartph
Slide 43: Data Connection Rate (Japan)
Data Connection Rate (Japan) Platinum Band Smartphones iPhone 5 Only 98% SoftBank No.1 98% SoftBank No.1 97.7% 96.8% 96.3% 96% 96.3% 96% 96.0% Competitor 94% 94% 92% 92% Feb. 10, 2013 Apr. 28 Feb. 10, 2013 Apr. 28 *Statistics analyzed by Agoop Corp. Platinum band smartphone data connection: total 10
Slide 44: Data Connection Rate (Landmark)
Data Connection Rate (Landmark) Platinum Band Smartphones iPhone 5 Only 98% SoftBank No.1 Golf course 98% 96% 96.2% SoftBank 96% 94.9% 95.4% 94% 94.2% 94% 93.7% SoftBank Competitor 92% 92% 90% 90% 2013/2/10 4/28 2013/2/10 4/28 Leisure facility SoftBank No.1 SoftBank No.1 98% SoftBank 98% SoftBank 96
Slide 45: Data Connection Rate (Landmark)
Data Connection Rate (Landmark) Platinum Band Smartphones iPhone 5 Only Fast food/ SoftBank No.1 SoftBank No.1 SoftBank family-oriented SoftBank 98% 98% 97.6% restaurant 96% 96.9% 96% 96.3% 96.6% Competitor 96.3% 94% 94% 92% 92% 2013/2/10 4/28 2013/2/10 4/28 Shopping mall SoftBank No.1 SoftBank No.1
Slide 46: Data Connection Rate (Landmark)
Data Connection Rate (Landmark) Platinum Band Smartphones iPhone 5 Only Stations SoftBank No.1 SoftBank No.1 SoftBank SoftBank 98% (1,000 railway stations) 98% 96.2% 96.5% 96.9% 96% 95.8% 96% 95.8% 95.6% 94% 94% Competitor 92% 92% 2013/2/10 4/28 2013/2/10 4/28 SoftBank No.1 SoftBank No.1 University
Slide 47: Data Connection Rate (Landmark)
Data Connection Rate (Landmark) Platinum Band Smartphones iPhone 5 Only Electronics SoftBank No.1 SoftBank No.1 SoftBank SoftBank retail store 98% 96.7% 98% SoftBank 97.4% 96% 96.1% 96% 95.6% 95.9% 94% 94% Competitor 92% 92% 2013/2/10 4/28 2013/2/10 4/28 Convenience SoftBank No.1 SoftBank SoftBank N
Slide 48: Data Connection Rate (Landmark)
Data Connection Rate (Landmark) Platinum Band Smartphones iPhone 5 Only Hotel SoftBank No.1 SoftBank No.1 98% 98% SoftBank SoftBank 96.4% 97.3% 96% 96% 95.9% 96.2% 94% 96.1% Competitor 94% 92% 92% 2013/2/10 4/28 2013/2/10 4/28 Expressway SoftBank No.1 SoftBank SoftBank No.1 SoftBank 99% 99% rest are
Slide 49: iPhone 5 LTE Coverage (Kanto)
iPhone 5 LTE Coverage (Kanto) Competitor ■ 3G or LTE are available 48
Slide 50: iPhone 5 LTE Coverage (Kanto)
iPhone 5 LTE Coverage (Kanto) Competitor ■ 3G or LTE are available ■ LTE ■ 3G *Showing logs of less than 0.1 second as the time required for download to start from the start of communication defined as LTE (survey period: February 10, 2013 to April 24, 2013). 49
Slide 51: iPhone 5 LTE Coverage (Kanto)
iPhone 5 LTE Coverage (Kanto) Competitor ■ LTE ■ 3G *Showing logs of less than 0.1 second as the time required for download to start from the start of communication defined as LTE (survey period: February 10, 2013 to April 24, 2013). 50
Slide 52: iPhone 5 LTE Coverage area (Tokai)
iPhone 5 LTE Coverage area (Tokai) Competitor ■ LTE ■ 3G *Showing logs of less than 0.1 second as the time required for download to start from the start of communication defined as LTE (survey period: February 10, 2013 to April 24, 2013). 51
Slide 53: iPhone 5 LTE Coverage area (Kansai)
iPhone 5 LTE Coverage area (Kansai) Competitor ■ LTE ■ 3G *Showing logs of less than 0.1 second as the time required for download to start from the start of communication defined as LTE (survey period: February 10, 2013 to April 24, 2013). 52
Slide 54: No.1 in all major urban areas
Weekly ASCII LTE Speed Survey Sapporo (Mbps) SoftBank 9.6 Kansai Area au 7.6 (Mbps) NTT DOCOMO 5.4 SoftBank 11.2 No.1 in all NTT DOCOMO 6.7 Fukuoka au 4.2 major urban (Mbps) SoftBank 9.0 areas NTT DOCOMO 8.8 au 7.2 Tokyo Area Nagoya (Mbps) (Mbps) SoftBank 10.1 SoftBank 10.1 au 8.3 NTT DOCOMO 6.7 (So
Slide 55: Double LTE became available in Yamanote-line area
Double LTE became available in Yamanote-line area (early April 2013) 54
Slide 56: Data Connection Rate (Ikebukuro Station)
Data Connection Rate (Ikebukuro Station) Before Double LTE (Mar. 6-7) After Double LTE (Apr. 4) ■ Connection succeed ■ Connection failed *Out of coverage or unconnected for 10 sec. is regarded as connection failed. 55
Slide 57: Data Connection Rate (Ikebukuro Station): Improved
Data Connection Rate (Ikebukuro Station) 99% 98% After Double LTE 97% 96% Improved 95% 94% 93% Mar. 6, 2013 Apr. 17 Double LTE * Weekdays only became available 56
Slide 58: High-speed Communications: Customer Experience: Connectivity
High-speed Communications Customer Experience: Connectivity 46% No.1 connectivity 33% in customer smartphone experience 30% Source: smartphone connectivity survey by Research Survey Asia. Sample: total 12,600 users, 4,200 users for each operator (Mar. 2013). NTT DOCOMO au SoftBank *Percent of users
Slide 59: High-speed Communications: Customer Experience: Speed
High-speed Communications Customer Experience: Speed 48% No.1 in high speed 37% in customer smartphone experience 30% Source: smartphone connectivity survey by Research Survey Asia. NTT DOCOMO au SoftBank Sample: total 12,600 users, 4,200 users for each operator (Mar. 2013). *Percent of users who an
Slide 60: Aggressive CAPEX Spending
(JPY bn) Consolidated CAPEX 698.4 Aggressive 516.3 CAPEX Spending 420.5 *2013/3 excludes FUKUOKA YAFUOKU! DOME related CAPEX. 2011/3 ’12/3 ’13/3 (FY) 59
Slide 61: Forecast
Forecast 60
Slide 62: Exceed DOCOMO within 10 years
Exceed DOCOMO within 10 years 61
Slide 63: 2014/3 Forecast Domestic Operating Income: JPY 1 trillion
2014/3 Forecast Domestic Operating Income (IFRS) Exceed JPY 1 trillion (USD 10bn) (Including approx. JPY150 billion of one-time gain from consolidation of GungHo Online Entertainment) 62
Slide 64: To be No.1 in Japan
Operating Income Exceed JPY 1t SoftBank (IFRS) domestic business NTT DOCOMO JPY 840.0bn (US GAAP) To be No.1 in Japan 0 *Created by SoftBank based on respective companies’ publicly available information 2006/3 ’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3 ’13/3 ’14/3 (FY) *SoftBank’s Operating Income is based
Slide 65: Approaching No.1 in Japan
2013/3 4% ➡ 52% Net adds share 48% ➡ 17% Approx. 190k Base stations Approx. 100k No.1 CM preference No.9 Operating Exceed JPY 1t income (2014/3 Forecast) JPY 840.0bn Approaching No.1 in Japan NTT DOCOMO’s base stations: sourced from NTT DOCOMO’s web site CM Preference ranking: CM DATABANK (out of 1,
Slide 66: No.1 in Japan is a stepping stone
No.1 in Japan is a stepping stone 65
Slide 67: Toward Global No.1 in Mobile Internet
Toward Global No.1 in Mobile Internet 66
Slide 68: Copyright (C) 2013 SoftBank Corp., All rights reserved.
Copyright (C) 2013 SoftBank Corp., All rights reserved. 67
Slide 69: Q&A
Q&A 68
Slide 70: Application of accounting standard for segments; 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