Softbank Group Corp. · TSE:9984
Softbank — Q2 FY2021 Earnings Presentation
27 slides from Softbank's earnings presentation, Nov 10, 2021
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2021
Earnings Results for the Six-month Period Ended September 30, 2021 Investor Briefing November 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 and abbreviations
Exchange rates per JPY used for translation FY2020 FY2021 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 107.74 105.88 104.45 106.24 110.00 110.47 1 CNY 15.16 15.27 15.71 16.31 17.01 17.09 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 110.71 111.92 1 CNY 16.84 17.30 Abbrevi
Slide 4: Accounting
Accounting
Slide 5: Consolidated Results
Consolidated Results FY20 FY21 (¥ B) Q1-Q2 Q1-Q2 Change Change % Net sales 2,630.5 2,983.5 353.0 13.4% Income before 1,441.5 1,047.0 -394.5 -27.4% income tax Net income (attributable to owners of the 1,883.2 363.6 -1,519.6 -80.7% parent) (Reference) Gain on investments 2,033.3 -395.2 -2,428.5 ― Inve
Slide 6: Change in Reportable Segments
Change in Reportable Segments • From FY21Q1, Latin America Funds, which were previously included within “Other,” are newly presented as independent reportable segments. • In FY21Q2, “SoftBank Vision Funds Segment” was renamed from “SVF1 and Other SBIA-Managed Funds Segment.” FY20 Investment SVF1 and
Slide 7: Segment Income – Investment Business of Holding Companies
Segment Income – Investment Business of Holding Companies (¥ B) P/L item FY20 FY21 Items Q1-Q2 Q1-Q2 Gain on investments at Investment 579.6 279.7 Business of Holding Companies Gain relating to sales of T-Mobile shares 421.8 3.1 See page 6 for details of the sales of T-Mobile shares. Realized gain (
Slide 8: Partial Sale of T-Mobile Shares in September 2021
Partial Sale of T-Mobile Shares in September 2021 Number of shares held Procured Execution Deutsche Transaction amount T-Mobile shares timing Telekom shares ($ B) (millions) (millions) Borrowing made using 106.3 million T-Mobile a 4.4 Jul 2020 shares pledged as collateral (margin loan) Number of sha
Slide 9: T-Mobile Shares – Partial Exercise of Call Options by Deutsche Telekom
T-Mobile Shares – Partial Exercise of Call Options by Deutsche Telekom and Cumulative Loss since Partial Sale on June 26, 2020 • In September 2021, Deutsche FY20 FY21 Telekom partially exercised its call Jun 26 Q4-end Q1-end execution in Sep options. $144.83 （Breakdown of the exercised call options）
Slide 10: T-Mobile Shares – The Company's Holding and Fair Values
T-Mobile Shares – The Company’s Holding (including Unexercised Call Options Held by Deutsche Telekom) and Fair Values T-Mobile shares held by the FY20 FY21 Company as of FY21Q2-end: Jun 26 Q4-end Q1-end Q2-end 60.92 million shares ((i)+(ii) below) $144.83 (i) unexercised portion of call T-Mobile sha
Slide 11: T-Mobile Shares – Fair Value of Contingent Consideration
T-Mobile Shares – Fair Value of Contingent Consideration • Contingent consideration: $144.83 The Company’s right to $134.85 acquire 48.75 million $125.29 $127.76 T-Mobile shares for no T-Mobile share price $114.36 consideration if certain conditions are met $104.15 （$ B） • Conditions: $82.99 6.0 45-
Slide 12: Investment in WeWork
Investment in WeWork • In August 2021, SBG transferred SBWW, a wholly owned subsidiary Before transferring SBWW Present that holds WeWork common stock and preferred stock, to SVF2 in accordance with the policy for handling the investment portfolio. SBG SBG • On October 21, 2021, WeWork listed on NYS
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) (¥ B) Consolidated B/S Consolidated P/L Consolidated B/S Consolidated P/L Cumulative gain (loss) Investor Investment type (Minuses show Amount recorded Account liabilities) Account since incept
Slide 14: Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts
Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts (Quarterly Trend) Alibaba share price Amendment of （Impact on P/L） contracts $226.73 $226.78 FY21 (¥ B) Q1-Q2 Amendment of $148.05 Income before income tax 625.1 contracts ($5.7B) Signing （¥ B） Net income 414.8 Day 1 gain on the amendment 6
Slide 15: Entry into Agreement for Sale of All Shares in Arm: Overview
Entry into Agreement for Sale of All Shares in Arm: Overview • In September 2020, the Company agreed to sell all of Arm shares to NVIDIA. • The Company expects to hold approx. 6.7- 8.1% of NVIDIA shares. Further upside can be enjoyed as the largest shareholder when the share price goes higher. ($ B)
Slide 16: 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 Sep 13, 2020 continuing operations (until the closing of the (execution of Purchase Agreement) Closing transaction is deemed highly probable, such as after obtaining regulatory approvals). A sub
Slide 17: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (¥ B) FY20 FY21 P/L item Q1-Q2 Q1-Q2 Change Gain on investments at Investment Business of Holding Companies: +¥279.9B (See page 4 for details.) Continuing operations • Gain related to a partial sales of T-Mobile shares in Sep 2021: +¥3.1B Net sales +2,630.5 +2,983.5
Slide 18: Consolidated B/S Summary (IFRSs) – Assets
Consolidated B/S Summary (IFRSs) – 1 (¥ B) B/S As of As of 1 Current assets related to investments from SB Northstar Main items Change item Mar 2021 Sep 2021 A: Decrease mainly due to sales of listed stocks B: Decrease due to sales of investments and repayment of collateralized debt 10,820.2 8,979.6
Slide 19: Consolidated B/S (Main Investments)
Investment Securities on Consolidated B/S (Main Investments) (¥ B) As of As of Change Outline Mar 2021 Sep 2021 Investment securities 3,706.8 3,898.4 +191.6 FVTPL 3,187.6 3,413.0 +225.4 • New and follow-on investments and increase in Latin America Funds 441.0 889.1 +448.1 fair values of investments
Slide 20: Consolidated B/S Summary (IFRSs) – Liabilities
Consolidated B/S Summary (IFRSs) – 2 (¥ B) B/S As of As of Main items Change item Mar 2021 Sep 2021 1 SB Northstar: borrowings (current) -¥1,580.3B yoy 12,891.0 11,201.4 -1,689.6 1 Repayment of a margin loan of $6.0B using Alibaba shares and short-term Interest-bearing debt 7,735.2 7,123.0 -612.2 bo
Slide 21: Consolidated B/S Summary (IFRSs) – Equity
Consolidated B/S Summary (IFRSs) – 3 (¥ B) B/S As of As of Items Change item Mar 2021 Sep 2021 11,955.6 12,339.5 +383.9 Common stock 238.8 238.8 ― 1 • Net income attributable to owners of the parent: +¥363.6B Capital surplus 2,618.5 2,595.6 -22.9 • Decreased following the retirement of treasury stoc
Slide 22: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (¥ B) C/F from operating activities: +¥1,546.3B yoy FY20 FY21 (Major reasons) C/F item Change Primary details for FY21Q1-Q2 Q1-Q2 Q1-Q2 • Sale of investments, etc. by SB Northstar: +¥1,768.4B (positive impact on cash Subtotal of cash flows from inflows) C/F from 2,67
Slide 23: Segment Income – SoftBank Vision Funds
Segment Income – SoftBank Vision Funds (¥ B) FY20 FY21 P/L Q1-Q2 Q1-Q2 FY21 Items Gain (loss) on investments at SVF1, SVF2, and others 1,411.6 -743.2 SVF1: +¥757.2B (net) Entire sale of shares in 1 portfolio company and a partial sale of shares in 9 portfolio Realized gain on investments 141.4 862.5
Slide 24: Co-investment Program to SVF2: Related Party Transaction
Co-investment Program to SVF2: Related Party Transaction Masayoshi SBG Son* 1 Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $1,638M 100% (Return of Capital) (1) Initial acquisition costs: $1,448M (committed capital: $2.6B) (2) Adjustments: $190M Equity interests: 82
Slide 25: Appendix
Appendix
Slide 26: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (¥ B) Change B/S As of As of Main items Changes in Outline Item Mar 2021 Sep 2021 Amorti- exchange Others zation rate 4,684.4 4,706.2 * Arm 2,621.6 2,650.2 ― +28.6 ― Goodwill SBKK 907.5 907.5 ― ― ― Increased due to the revision of the provisional LINE 627.9
Slide 27: Price Sensitivity of Derivatives at SB Northstar
Price Sensitivity of Derivatives at SB Northstar (FY21Q2-end) The below table shows the impact on income before income tax of changes in the market prices of the underlying assets from September 30, 2021 of long call options, total return swap contracts, and forward contracts related to listed stock