Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2021 Earnings Presentation
67 slides from Softbank's earnings presentation, Feb 8, 2022
Slide 1: Earnings Results for the 9-month Period ended December 31, 2021
Earnings Results for the 9-month Period ended December 31, 2021 February 8, 2022
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: 2
2
Slide 4: SoftBank's Origin
x . M4 Pd oftBank’s Origin — .¢ ae . : ; ‘ F / + :
Slide 5: Acquisition in 2016
Acquisition in 2016 For details, refer to the press release dated Sep. 5, 2016, "Completion of Acquisition of ARM by SoftBank” 4
Slide 6: Evolution is accelerating
Computing Power of CPU (number of transistors installed per chip) 10 (bn units) 9.0bn Evolution is 7.5 accelerating 5.3bn 5 2.3bn 2.5 730mm 2,250 134k 3.1mm Third-party logos included herein are provided for illustrative 0 purposes only. Inclusion of such logos does not imply affiliation with or end
Slide 7: Arm-based Chips Shipped (Cumulative)
Arm-based Chips Shipped (Cumulative) (chips) 220bn Powering the Information Revolution Humans births: 110bn (Cumulative) ’85 ’95 ’05 ’15 ’21 (CY) Cumulative shipments of Arm-based chips up to end of each calendar year until 2020, and up to end of Sep. for 2021 only. (Source) Arm Cumulative number of
Slide 8: September 2020 Announced sale of Arm to NVIDIA
September 2020 Announced sale of Arm to NVIDIA *1 (to become Nvidia’s largest shareholder) *1 Based on the approximate ownership ratio of SBGC and SVF1 after closing of the Transaction as of the announcement of the Transaction, if the full amount of the earn-out is received. (approximately 8.1% of o
Slide 9: Agreed with NVIDIA to terminate the sale of Arm
Agreed with NVIDIA to terminate the sale of Arm For details, refer to the press release dated Feb. 8, 2022, "Termination of Agreement to Sell All Shares in Subsidiary Arm and Preparation for Arm Public Offering” 8
Slide 10: Arm to aim for listing in FY2022
Agreed with NVIDIA to terminate the sale of Arm Arm to aim for listing in FY2022 For details, refer to the press release dated Feb. 8, 2022, "Termination of Agreement to Sell All Shares in Subsidiary Arm and Preparation for Arm Public Offering” 9
Slide 11: Powered the Smartphone Revolution
Powered the Smartphone Revolution (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accuracy of the information and are und
Slide 12: To Power Every Revolution
Powered the To Power Smartphone Revolution Every Revolution (Cloud, Automotive, IoT, Metaverse, etc.) (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any
Slide 13: On to the Second Growth Stage
On to the Second Growth Stage 12
Slide 14: Arm Will Prepare for the Most Significant IPO in the History of the Semiconductor Industry
Arm Will Prepare for the Most Significant IPO in the History of the Semiconductor Industry For details, refer to the press release dated Feb. 8, 2022, "Termination of Agreement to Sell All Shares in Subsidiary Arm and Preparation for Arm Public Offering” 13
Slide 15: Consolidated Results
Consolidated Results 14
Slide 16: Net Income
Net Income (JPY bn) 3,055.2 (USD 3.5bn) 392.6 FY2020 Q1-Q3 FY2021 Q1-Q3 USD 1 = JPY 111.38 (average rate during Apr. 2021-Dec. 2021) Net income: net income attributable to owners of the parent 15
Slide 17: NAV (Net Asset Value)
NAV (Net Asset Value) USD 187bn USD 168bn (Sep. 30, 2021) (Dec. 31, 2021) ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 (FY) Share price: closing price as of Dec. 31, 2021 16
Slide 18: NAV (Net Asset Value)
NAV (Net Asset Value) USD 187bn USD 168bn (Sep. 30, 2021) (Dec. 31, 2021) 24% Others SBKK, Sprint/T-Mobile/Deutsche Telekom, Arm, SB Northstar 27% Vision Fund etc. 49% Each percentage is the proportionated share of holding equity value for each time period ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08
Slide 19: NAV (Net Asset Value)
NAV (Net Asset Value) USD 187bn USD 168bn (Sep. 30, 2021) (Dec. 31, 2021) China 32% Japan, Asia, Europe, etc. 46% *Asia excluding China US: sum of T-Mobile(Sprint), SVF1(equivalent to US stocks), SVF2(equivalent to US stocks), SB Northstar (equivalent to US stocks), other US stocks China: sum of Ali
Slide 20: LTV (Net Debt / Equity Value of Holdings)
LTV (Net Debt / Equity Value of Holdings) USD 214bn 22% Manage LTV below 25% in normal times USD 46bn Equity value Net debt of holdings Share price: closing price as of Dec. 31, 2021 For details, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Dec. 31, 2021)” 19
Slide 21: LTV (Net Debt / Equity Value of Holdings)
LTV (Net Debt / Equity Value of Holdings) 100% JPY 4.5 Trillion 90% IPO Program (Dec. 2018) (Mar. - Sep. 2020) 80% 70% 60% 50% 40% 30% 30% 35% 30% 18% 19% 25% 20% 15% 16% 17% 17% 14% 16% 22% 11% 12% 12% 9% 10% JPY 4.5 Trillion Program: The period is based on the date of announcement of the program 0
Slide 22: Vision Fund etc.
Vision Fund etc. Vision Fund etc.: SVF1, SVF2, LatAm Funds, other listed and unlisted investments by SBG (excluding Alibaba, T-Mobile, Deutsche Telekom, SBKK, Arm, and SB Northstar) 21
Slide 23: Gain and Loss on Investments of Vision Fund etc. (Cumulative)
* Gain and Loss on Investments of Vision Fund etc. (Cumulative) (JPY bn) 7,094.7 6,483.8 6,040.6 5,934.3 2,821.9 2,237.8 1,823.4 1,431.4 1,294.1 911.6 1,103.5 1,404.8 The information contained herein is provided solely for illustrative purposes on an SBG consolidated basis and individual investors'
Slide 24: Gain and Loss on Investments of Vision Fund etc. (Cumulative)
* Gain and Loss on Investments of Vision Fund etc. (Cumulative) (JPY bn) 873.8 625.0 6,040.6 762.8 806.1 Vision Fund 2 etc. 6,220.9 5,858.7 605.9 5,171.5 5,234.5 Vision Fund 1 Vision Fund 2 etc.: sum of SVF2 and LatAm Funds Vision Fund 1: SVF1 The information contained herein is provided solely for
Slide 25: Gain and Loss on Investments of Vision Fund etc. (Cumulative)
* Gain and Loss on Investments of Vision Fund etc. (Cumulative) (JPY bn) 1,476.8 6,040.6 170.2 922.1 132.1 China ** 3,092.3 2,960.8 3,107.7 Asia, Europe, Latin America, etc. 3,205.2 510.7 112.8 363.2 685.5 527.5 Countries and regions: Based on the headquarters of portfolio companies 492.6 291.9 2,35
Slide 26: Provide capital in a wide range of regions
Vision Fund etc. Portfolio Companies Fair Value (as of Dec. 31, 2021, unrealized value only) Provide capital in US a wide range of regions * Asia, Europe, Latin America etc. 34% 48% China 18% Vision Fund etc.: SVF1, SVF2, LatAm Funds, other listed and unlisted investments by SBG (excluding Alibaba,
Slide 27: Capital for Investments (FY2021 Q1-Q3)
Capital for Investments (FY2021 Q1-Q3) (9-month total) JPY 4.4tr (USD 39.9bn) Contribution to Vision Fund etc. Investment Calculations are converted into JPY at the average rate for each period, etc. Contribution to Vision Fund etc.: the amount of contribution to SVF1 (USD 0.5bn), SVF2 (USD 36.5bn,
Slide 28: Capital for Investments (FY2021 Q1-Q3)
Capital for Investments (FY2021 Q1-Q3) (9-month total) JPY 4.4tr (USD 39.9bn) JPY 3.8tr (USD 34.4bn) Cash in from Vision Fund, Contribution to sale of listed stocks, Vision Fund etc. asset finance, etc. Investment Capital Calculations are converted into JPY at the average rate for each period, etc.
Slide 29: Vision Fund etc. Listed Portfolio Companies + SPAC Merger Announced Companies Fair Value
Vision Fund etc. Listed Portfolio Companies + SPAC Merger Announced Companies Fair Value USD *1 63.4bn (unrealized value) SPAC merger USD 0.7bn announced Other listed USD 17.4bn SenseTime USD 3.3bn Grab USD 5.0bn WeWork USD 3.8bn AutoStore USD 5.2bn Vision Fund etc. (unrealized value) DiDi USD 4.8bn
Slide 30: Vision Fund etc. Listed Portfolio Companies + SPAC Merger Announced Companies Fair Value
Vision Fund etc. Listed Portfolio Companies + SPAC Merger Announced Companies Fair Value USD 91.7bn (incl. realized value) *2 USD 28.3bn (realized value) *1 USD 63.4bn (unrealized value) SPAC merger USD 0.7bn announced Vision Fund etc. (realized value) Other listed USD 17.4bn SenseTime USD 3.3bn Gra
Slide 31: SoftBank Vision Fund etc. total companies
SoftBank Vision Fund etc. 441 total companies (incl. 34 companies post investment committee approval but pre investment closing) SoftBank Vision Fund 1 advised by SBIA SoftBank Vision Fund 2 advised by SBIA, SBGA SoftBank Latin America Funds 1 (94 total portfolio companies as of Dec. 31, 2021 (261 t
Slide 32: Number of Invested Companies of Vision Fund etc.
Number of Invested Companies of Vision Fund etc. (Companies) 239 57 34 37 22 2017 2018 2019 2020 2021 (CY) Vision Fund etc.: SVF1, SVF2 and LatAm Funds portfolio companies. 2017(22 companies)=SVF1 22 companies, 2018(34 companies)=SVF1 34 companies, 2019(57 companies)=SVF1 35 companies, SVF2 3 compan
Slide 33: Venture Capital Total Funding Amount (2021)
Venture Capital Total Funding Amount (2021) (total funding amount of deals led or co-led by each investor) SoftBank USD 36.3bn Tiger Global USD 29.4bn Sequoia Capital USD 19.6bn Tencent Holdings USD 17.3bn Insight Partners USD 12.0bn T. Rowe Price USD 11.8bn D1 Capital Partners USD 11.2bn Temasek Ho
Slide 34: Number of IPOs / Divestments of Vision Fund etc. Portfolio Companies
Number of IPOs / Divestments of Vision Fund etc. Portfolio Companies (Apr. 2021 - Jan. 2022) (Companies) 25 SoftBank Vision Fund 14 Listed (Jan. 31, 2022) 6 4 3 2 2 2 2 1 1 1 1 1 1 1 1 1 1 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 (FY) Vi
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Slide 36: Arm Revenue (annual)
Revenue (annual) (USD mm) USD 2.5bn On to the Second 1,980 1,823 1,788 1,809 Growth Stage 1,689 (Source) Arm After FY2017: excl. ISG revenues ISG: Internet-of-Things Services Group FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 All numbers are unaudited, non-IFRS and provided for directional information
Slide 37: Arm Adjusted EBITDA (annual)
Adjusted EBITDA (annual) (USD mm) USD 900mm 827 V-Shaped Recovery 596 436 371 365 (Source) Arm Arm’s Adjusted EBITDA for FY2018-19 excludes ISG direct costs only. FY2020-21 also excludes some corporate costs associated with ISG. ISG: Internet-of-Things Services Group FY2016 FY2017 FY2018 FY2019 FY20
Slide 38: Number of Engineers
Number of Engineers (Employees) 5,228 Increased engineers for future growth 3,736 FY2016 Q3 FY2021 Q3 (End of each quarter) (Source) Arm Number of Engineers: Technical employees (employees who work on the research, creation, maintenance, deployment and support of technology products and services of
Slide 39: Computing Power
Computing Power (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accuracy of the information and are under no obligation t
Slide 40: Computing Power, Low Power Consumption
Computing Low Power Power Consumption (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accuracy of the information and are
Slide 41: Computing Power, Low Power Consumption: Smartphone
Computing Low Power Power Consumption Smartphone (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accuracy of the informat
Slide 42: Computing Power, Low Power Consumption: Cloud, Smartphone
Computing Low Power Power Consumption Cloud Smartphone (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accuracy of the in
Slide 43: Computing Power, Low Power Consumption: Automotive
Computing Low Power Power Consumption Cloud Smartphone Automotive (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of SBG, SVF1, the general partner of SVF1 or SBIA make any representation regarding the accurac
Slide 44: 365x Power-efficient chips are required
Energy Demand for Cloud (Global) (energy demand of hyperscale datacenters) (assuming 2010 as 1) 365 (estimate) 365x Power-efficient chips in 30 years are required (2010 - 2040) 1 2010 2040 (CY) (Source) Estimated by SBG. based on the information of the International Energy Agency, assuming that elec
Slide 45: 350x Power-efficient chips are required
Energy Demand for EV (Global) (assuming 2016 as 1) 350 (estimate) 350x Power-efficient chips in 24 years are required (2016 - 2040) 1 2016 2040 (CY) EV: Electric Vehicle Nothing contained herein should be relied upon as a promise or representation as to future performance of SBG or Arm. (Source) Est
Slide 46: On to the Second Growth Stage
On to the Second Growth Stage 45
Slide 47: New Leadership
New Leadership Rene Haas Inder Singh Chief Executive Officer Chief Financial Officer To accelerate the growth strategy Rene Haas has been President of Arm’s IP Group since 2017, and Inder Singh has been Arm’s CFO since 2019. 46
Slide 48: The world's software lives and thrives on Arm.
The world’s software lives and thrives on Arm. • 15+ million developers • 10+ million apps • Industry’s largest software ecosystem • Major OS support: Android, iOS, Linux, Windows, FreeRTOS and more (Source) Arm The information contained herein is provided for illustrative purposes only. The informa
Slide 49: Mobile, Infrastructure, Automotive through 2016
through 2016 Mobile (Smartphone & Laptops) Infrastructure Automotive (Source) Arm Third-party logos included herein are provided for illustrative purposes only. Inclusion of such logos does not imply affiliation with or endorsement by such firms or businesses. There is no guarantee that the Group wi
Slide 50: Mobile, Infrastructure, Automotive 2016 - 2021
through 2016 2016 - 2021 Mobile (Smartphone & Laptops) Infrastructure Automotive (Source) Arm Third-party logos included herein are provided for illustrative purposes only. Inclusion of such logos does not imply affiliation with or endorsement by such firms or businesses. There is no guarantee that
Slide 51: Expanding market opportunity
through 2016 2016 - 2021 2022+ Mobile (Smartphone & Laptops) Infrastructure Automotive Expanding market opportunity (Source) Arm Third-party logos included herein are provided for illustrative purposes only. Inclusion of such logos does not imply affiliation with or endorsement by such firms or busi
Slide 52: Future revolutions require the same three forces that fueled the smartphone economy
SMARTPHONE REVOLUTION Future revolutions require the same three forces that fueled the smartphone economy. DATACENTER REVOLUTION • Power-efficient computing • Application ecosystems • Foundational software AUTOMOTIVE REVOLUTION (Source) Arm The information contained herein is provided for illustrati
Slide 53: AWS and Arm are changing the industry
AWS and Arm are changing the industry (AWS Graviton Family of Processors) Graviton3 Arm based Graviton2 has (announced in Dec. 2021) 40% better price/performance over comparable generation x86 instances 48 out of the top 50 AWS EC2 customers use Graviton2 instances Graviton3 has up to 25% more compu
Slide 54: Arm-based chips are the de-facto standard
Transforming the Software Defined Vehicle Digital Cockpit IVI Dashboard Body Chassis Powertrain Qualcomm MediaTek NXP Infineon Samsung SemiDrive TI Elmos Renesas TI ST Micro Microchip NXP SiEngine NVIDIA ADAS to Autonomous Gateway Telematics MobilEye Xilinx Renesas Samsung Renesas Horizon Robotics Q
Slide 55: World's leader in mobile, gaining share in automotive and infrastructure
World’s leader in mobile, gaining share in large and growing markets including automotive and infrastructure Forecasting revenues to grow 26%* in FY21 and Adj. EBITDA up 2.5x from trough** Highly profitable and cash generative business model, with strong and debt free balance sheet A new Arm with an
Slide 56: Arm Will Prepare for the Most Significant IPO in the History of the Semiconductor Industry
Arm Will Prepare for the Most Significant IPO in the History of the Semiconductor Industry For details, refer to the press release dated Feb. 8, 2022, "Termination of Agreement to Sell All Shares in Subsidiary Arm and Preparation for Arm Public Offering” 55
Slide 57: — = SofiBank Soup: ne
— = SofiBank 3 Soup: ne
Slide 58: — = SofiBank Soup: ne
— = SofiBank 3 Soup: ne
Slide 59: SoftBank
SoftBank
Slide 60: Appendix
Appendix
Slide 61: Definition and Calculation Method of SBG's NAV and LTV (as of Dec. 31, 2021)
Definition and Calculation Method of SBG’s NAV and LTV (as of Dec. 31, 2021) 1. NAVNet Asset Value ◦ NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjusting asset-backed financing) ◦ Alibaba: calculated by multiplying the number of Alibaba ADSs equivalent to the number
Slide 62: SVF1 Investment Highlights (SBG consolidated basis)
SVF1 Investment Highlights (SBG consolidated basis) * (From SVF1 inception to Dec. 31, 2021) USD 69.1bn USD 49.3bn Realized gain USD 19.1bn Investment market uplift + realized gains Valuation gain USD 50.0bn USD -19.8bn Realized loss USD -0.6bn Valuation loss USD -19.2bn Mark up Mark down (50 invest
Slide 63: SVF1 Listed Portfolio Companies (as of Dec. 31, 2021)
SVF1 Listed Portfolio Companies (as of Dec. 31, 2021) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD mm) Company Investment cost *2 Gross return *3 Gross gain (loss) Gross MOIC *4 to SVF1 to SVF1 to SVF1 Coupang 2,729 16,710 +$13,981 6.1x Doordash 680 10,150 +$9,470 14.9x Fully Exited NVIDIA 2,878 5,8
Slide 64: SVF1 Listed Portfolio Companies (as of Feb. 7, 2022)
SVF1 Listed Portfolio Companies (as of Feb. 7, 2022) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD mm) Company Investment cost *1 Gross return *2 Gross gain (loss) Gross MOIC *3 to SVF1 to SVF1 to SVF1 Coupang 2,729 12,375 +$9,646 4.5x Doordash 680 8,438 +$7,758 12.4x Fully Exited NVIDIA 2,878 5,813
Slide 65: SVF2 Investment Highlights (SBG consolidated basis)
SVF2 Investment Highlights (SBG consolidated basis) (From SVF2 inception to Dec. 31, 2021) USD 7.3bn USD 4.9bn Realized gain USD 1.0bn Investment market uplift Valuation gain USD -2.5bn + realized gains USD 6.3bn Valuation loss USD -2.5bn Mark up Mark down (43 investments) (23 investments) SVF2 high
Slide 66: SVF2 Listed Portfolio Companies (as of Dec. 31, 2021)
SVF2 Listed Portfolio Companies (as of Dec. 31, 2021) (USD mm) (a) (b) (c) = (b) - (a) (d) = (b) / (a) Investment cost *2 Gross return *3 Gross gain (loss) *4 Company Gross MOIC to SVF2 to SVF2 to SVF2 AutoStore 2,800 5,184 +$2,384 1.9x Beike (KE Holdings) 1,350 2,847 +$1,497 2.1x WeWork 2,444 3,047
Slide 67: SVF2 Listed Portfolio Companies (as of Feb. 7, 2022)
SVF2 Listed Portfolio Companies (as of Feb. 7, 2022) (USD mm) (a) (b) (c) = (b) - (a) (d) = (b) / (a) Investment cost *1 Gross return *2 Gross gain (loss) *3 Company Gross MOIC to SVF2 to SVF2 to SVF2 Beike (KE Holdings) 1,350 2,800 +$1,450 2.1x AutoStore 2,800 3,563 +$763 1.3x WeWork 2,444 2,576 +$