Slide 1: Earnings Results for the Fiscal Year ended March 31, 2019
Earnings Results for the Fiscal Year ended March 31, 2019 May 9, 2019
Slide 2: Important Information
IMPORTANT INFORMATION This presentation (“Presentation”) is furnished to you for informational purposes in connection with SoftBank Group Corp.’s (together with its subsidiaries, “SoftBank”) interests in the SoftBank Vision Fund L.P. (together with, as the context may require, any parallel fund, fee
Slide 3: 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 4: 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY)
1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) 2
Slide 5: 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY)
1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) 3
Slide 6: 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY)
1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) 4
Slide 7: SBG shareholder value JPY 23t
SBG shareholder value JPY 23t 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 5
Slide 8: SBG shareholder value per share JPY 21,688
SBG shareholder value JPY 23t JPY 21,688 per share 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 6
Slide 9: Internet traffic and SBG shareholder value
SBG Internet traffic shareholder value JPY 23t JPY 21,688 per share (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) (Source) Internet traffic (per month): Cisco VNI (Visual Networking Index) & OECD 7
Slide 10: Consolidated Results
Consolidated SoftBank Results
Slide 11: Consolidated Results
Consolidated Results (JPY bn) FY17 FY18 Change YoY Net sales 9,158.8 9,602.2 +443.4 +5% EBIT 1,303.8 2,353.9 +1,050.1 +81% Net income 1,039.0 1,411.2 +372.2 +36% FY18: after applications of IFRS 9 and IFRS 15 Net income: net income to attributable to owners of the parent FY17: before applications of
Slide 12: Net Sales
Net Sales (JPY bn) 9,602.2 9,158.8 3,602.0 3,726.8 Sprint Up 5% 947.4 Yahoo Japan 876.1 3,608.8 3,747.7 SoftBank segment 1,071.9 1,180.3 Others FY17 FY18 Others = Arm + Brightstar + “Others” + reconciliations 10
Slide 13: EBIT
EBIT 2,353.9 (JPY bn) 1,303.8 1,256.6 SVF segment Up 81% 303.0 279.3 280.3 Sprint 176.3 134.9 Yahoo Japan 725.1 SoftBank 684.7 segment Others FY17 FY18 Others = Arm + Brightstar + “Others” + reconciliations SVF: SoftBank Vision Fund and Delta Fund 11
Slide 14: EBIT history
EBIT 2,353.9 (JPY bn) SVF segment Up 81% 1,303.8 Others ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 (FY) *FY2013-14: excluding impact of GungHo & Supercell 12
Slide 15: Net Income
Net Income (JPY bn) 1,426.3 1,411.2 Exceed JPY 1t for 3 consecutive years 1,039.0 JPY 1t FY16 FY17 FY18 Net income: net income to attributable to owners of the parent 13
Slide 16: Shareholder Value
Shareholder Value 14
Slide 17: Shareholder value = Equity value of holdings - Net debt
Shareholder Equity value Net debt value of holdings 23 27 4 − 15
Slide 18: Equity Value of Holdings
Equity Value of Holdings 16
Slide 19: Equity Value of Holdings
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 17
Slide 20: Equity Value of Holdings
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings JPY 4.5t JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 18
Slide 21: Equity Value of Holdings
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings JPY 2.8t JPY 4.5t JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 19
Slide 22: Equity Value of Holdings
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings JPY 2.7t JPY 2.8t JPY 4.5t JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 20
Slide 23: Equity Value of Holdings
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings Others JPY 0.5t JPY 0.6t JPY 2.7t JPY 2.8t JPY 4.5t JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 21
Slide 24: Equity Value of Holdings JPY 27t
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” Equity Value of Holdings SVF JPY 3.2t Others JPY 0.5t JPY 0.6t JPY 2.7t JPY 2.8t JPY 4.5t JPY 27t JPY 13.1t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.
Slide 25: Net Debt
Net Debt 23
Slide 26: SBG Net Debt
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • SBG gross debt = SBG interest-bearing debt = Gross debt (consolidated) - Gross debt of subsidiaries (non-recourse) • Gross debt of subsidiaries (non-recourse): Total amount of interest-bearing debt of SBKK, Sprin
Slide 27: SBG Net Debt
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • SBG gross debt = SBG interest-bearing debt = Gross debt (consolidated) - Gross debt of subsidiaries (non-recourse) • Gross debt of subsidiaries (non-recourse): Total amount of interest-bearing debt of SBKK, Sprin
Slide 28: SBG Net Debt
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • SBG gross debt = SBG interest-bearing debt = Gross debt (consolidated) - Gross debt of subsidiaries (non-recourse) • Gross debt of subsidiaries (non-recourse): Total amount of interest-bearing debt of SBKK, Sprin
Slide 29: SBG Net Debt
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • SBG gross debt = SBG interest-bearing debt = Gross debt (consolidated) - Gross debt of subsidiaries (non-recourse) • Gross debt of subsidiaries (non-recourse): Total amount of interest-bearing debt of SBKK, Sprin
Slide 30: SBG Net Debt
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • SBG gross debt = SBG interest-bearing debt = Gross debt (consolidated) - Gross debt of subsidiaries (non-recourse) • Gross debt of subsidiaries (non-recourse): Total amount of interest-bearing debt of SBKK, Sprin
Slide 31: Equity value of holdings JPY 27t
• For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” JPY 27t Equity value of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 29
Slide 32: Equity value JPY 27t and net debt JPY 4.4t
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” JPY 27t JPY 4.4t Equity value Net debt of holdings Share price: closing price as of May 9 (Japan) closing price as of May 8
Slide 33: LTV
• Net debt = SBG net interest-bearing debt = SBG gross debt - SBG cash positions, etc • LTV (Loan to value) = Net debt / Equity value of holdings • For details, see “Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation” JPY 27t LTV 16% (Manage less than 25%) JPY 4.4t Equity value Ne
Slide 34: Financial Policy
Financial Policy Manage LTV less than 1 25% (upper threshold of 35%) Maintain cash position covering 2 bond redemptions for at least next 2 years Secure sustainable distribution and dividend income 3 from SVF and other subsidiaries 32
Slide 35: Shareholder value = Equity value of holdings - Net debt
Shareholder Equity value Net debt value of holdings 23 27 4 − 33
Slide 36: Zi— SS
\/ \ >> Ki Zi— SS
Slide 37: SVF portfolio companies and pipeline
(Zuoyebang) + Investment Committee Alibaba approved companies Local Services + pipeline, etc. (20 companies) The investments presented herein are solely for illustrative purposes, have been selected in order to demonstrate examples of Fund investments, and do not purport to be a complete list thereo
Slide 38: Commitment Structure of SVF (As of Mar. 31, 2019)
Commitment Structure of SVF (As of Mar. 31, 2019) * Preferred Equity 7% fixed distribution USD 40.0bn Equity Performance-based USD 58.6bn distribution Fixed distribution amounts are subject to the terms and conditions of an investment in this class of interests in SVF; there can be no assurance that
Slide 39: Valuation Process (March 2019)
(March 2019) <Valuation Process> SBIA is responsible for determining fair values on a quarterly basis in line with the requirements of the AIFM Directive (as issued by the FCA). The SBIA Valuation team is functionally independent from portfolio management and may engage external specialists with a h
Slide 40: Valuation Process (March 2019)
(March 2019) <Valuation Process> SBIA is responsible for determining fair values on a quarterly basis in line with the requirements of the AIFM Directive (as issued by the FCA). The SBIA Valuation team is functionally independent from portfolio management and may engage external specialists with a h
Slide 41: Specialize in AI, Investment Synergy, Unicorns Creation
Specialize Investment Synergy in A I in unicorns creation 39
Slide 42: SVF investments by sector
Transportation Logistics Health tech Real estate Alibaba Local Services Fintech Enterprise Frontier tech Consumer 40 The investments presented herein are solely for illustrative purposes, have been selected in order to demonstrate examples of the Vision Fund investments, and do not purport to be a c
Slide 43: Used cars + AI
Used cars + AI 41
Slide 44: Mark Yang
Mark Yang Founder CEO of Chehaoduo Group, founder of Guazi.com and Maodou.com 42
Slide 45: Guazi market data
*1 *2 *3 *4 *1 Calculated by Guazi based on China Automotive Dealers Association, iResearch and TF Securities market report *2 Calculated by Guazi based on China Automotive Dealers Association, China Association of Automobile Manufacturers *3 Calculated by Guazi based on iResearch *4 (Source) Uxin l
Slide 46: Leading used car transaction platform in China
Leading used car transaction platform in China Inventory Turnover Data 44
Slide 47: Traditional vs Guazi
Traditional Guazi Traditional Guazi 45
Slide 48: AI Utilization
AI AI Utilization Utilization Leading used car transaction Leading used car transaction platform in China platform in China Inventory Turnover Data Inventory Turnover Data 46
Slide 49: Traditional used car dealers in China
Traditional used car dealers in China Monthly inspection Monthly sales Sales cycle efficiency productivity / person productivity / person The metrics regarding select aspects of the company's operations were selected by Guazi on a subjective basis. Such metrics are provided solely for illustrative p
Slide 50: Medical + AI
Medical + AI 48
Slide 51: Comprehensive liquid biopsy utilizing AI
Blood test Digital AI Early detection (Liquid biopsy) sequencing analysis & cancer (Big data) management Comprehensive liquid biopsy utilizing A I The information contained herein is provided for illustrative purposes only. The information presented herein was provided by Guardant Health. Nothing he
Slide 52: Conventional tissue biopsy vs liquid biopsy
Conventional Tissue biopsy Liquid biopsy Costly, slow, risky Affordable, quick, safe The information contained herein is provided for illustrative purposes only. The information presented herein was provided by Guardant Health. Nothing herein should be construed as a recommendation of any investment
Slide 53: Adopted by all 28 NCCN centers
Select Adoption Rate (U.S.) Adopted by all 28 NCCN centers * 100% * (Source) Guardant Health Form 10-K as of Mar. 19, 2019. *Adoption rate of Guardant 360. The metrics regarding select aspects of the company’s operations were selected by SBG on a subjective basis. Such metrics are provided solely fo
Slide 54: Investment Track Record
Investment Track Record (USD bn) 1.8 Valued 6X 0.3 ** (As of May 8) (Source) Guardant Health Form 424B4 as filed with Securities and Exchange Commission dated Oct. 5, 2018 *Amount of investment or its value to SVF of Guardant Health AMEA, Inc. are not included in the calculation The information here
Slide 55: Accelerate Growth with Cluster of No.1 AI Strategy
Accelerate Growth with Cluster of No.1 AI Strategy No.1 No.1 No.1 No.1 No.1 No.1 No.1 No.1 No.1 53
Slide 56: SoftBank Vision Fund 2 announcement pending
SoftBank Vision Fund 2 announcement pending in the near future Information presented herein is solely for illustrative purposes only and there can be no assurance that the anticipated announcement will actually occur. The content of this slide is not and should not be construed as an offer of or inv
Slide 57: Future Vision
Future Vision 55
Slide 58: Internet revolutionized advertisement and retail
GDP (U.S.) Retail Ads 6% Others 1% Internet revolutionized Constructions 4% 9% Real estate advertisement and retail Recreation, etc. 13% 4% Information 5% Wholesale trade Government 6% 13% Finance, etc. 8% Professional and business services Educational services, 11% health care, etc. 9% Manufacturin
Slide 59: AI will revolutionize various industries
GDP (U.S.) Others Retail Ads Constructions 9% 6% 4% 1% Real estate AI will revolutionize Recreation, etc. 4% 13% various industries Information 5% Wholesale trade Government 6% 13% Finance, etc. 8% Professional and Educational services, business services health care, etc. 9% Manufacturing 11% 11% (S
Slide 60: AI = Prediction
AI = Prediction Demand Supply Suppliers prediction optimization Consumers 58
Slide 61: Ride-sharing
Ride-sharing Drivers Passengers Heat map Dynamic-pricing 59
Slide 62: Enhance with 5G and IoT
AI Enhance with 5G and IoT 60
Slide 63: Car production and auto industry market cap
Market cap. Number of cars USD 1.4t 0.1bn 100m Car production volume (annual) USD 1t Market cap. of auto industry 50m USD 0.1t USD 0t 40m (CY) (Source) Chart created by SoftBank Group Corp., based on S&P Capital IQ (Primary Industry Classification: Automobile) , Car Production Volume (annual) : 1995
Slide 64: 23x market cap of manufacturing
GDP USD 25t Index of the market cap (1994 = 1). 24 Market cap. of 23x manufacturing companies USD 22t GDP (manufacturing) USD 6t 0 (Source) Market cap. of manufacturing companies: S&P Capital IQ (Primary Industry Classification: Aerospace, Building products, Construction, Engineering, Industrial Con
Slide 65: Internet traffic and market cap of Internet companies
Traffic Index of the market cap (1994 = 1). 160EB 1,030 156EB Internet traffic 1,000x Market cap. of Internet companies 23x Market cap. of manufacturing companies 0 180TB 10x Market cap. of auto industry Index assuming the market cap. of the Internet companies in 1994 was 1 ’95 ’97 ’99 ’01 ’03 ’05 ’
Slide 66: AI traffic and market cap of AI companies
AI traffic Market cap. of AI companies 180TB 1995 2018 (CY) (Source) 1995-2018: Internet traffic: Cisco VNI (Visual Networking Index) & OECD Index assuming the market cap. of the Internet companies in 1994 was 1 Market cap. of Internet companies: Estimated by SoftBank Group Corp. based on S&P Capita
Slide 67: Enhance Shareholder Return
Enhance Shareholder Return 65
Slide 68: Doubling dividend
Enhance Shareholder Return Split 1:2 Dividend per share JPY 44 (no change) Doubling dividend 66
Slide 69: Amount of Dividend
Amount of Dividend Doubling (FY) Plan *Calculated based on shares issued 1.05 billion shares (excl. treasury stock) as of March 31, 2019 67
Slide 70: Shareholder value
Shareholder value 68
Slide 71: Shareholder value: equity value of holdings
Shareholder value equity value of holdings - 69
Slide 72: Shareholder value: equity value of holdings - net debt
Shareholder value equity value of holdings - net debt 70
Slide 73: SBG shareholder value per share JPY 21,688
SBG shareholder value JPY 21,688 per share Shareholder value equity value of holdings - net debt 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 71
Slide 74: SBG shareholder value and share price
SBG shareholder value JPY 21,688 per share Share price (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 72
Slide 75: SBG shareholder value and share price
SBG shareholder value JPY 21,688 per share Share price (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 73
Slide 76: Discount of share price to shareholder value
SBG shareholder value JPY 21,688 per share Discount 47% Share price JPY 11,550 (CY) Share price: SBG share price closing price as of May 9 Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) 74
Slide 77: Internet traffic and SBG shareholder value
SBG Internet traffic shareholder value 156EB JPY 21,688 per share 180TB 1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’18 (CY) Shareholder value per share: closing price as of May 9 (Japan) closing price as of May 8 (U.S.) *1 Exabyte (EB) = 1 billion GB, (Source) Internet traffic (per month): Cis
Slide 78: Toward further growth
AI traffic SBG shareholder value Toward further growth 1995 2018 (CY) After 2018: AI traffic is for illustrative, AI traffic: Internet traffic generated by AI 76
Slide 79: Group of AI Entrepreneurs
Alibaba Local Group of AI Entrepreneurs Services 77
Slide 80: SoftBank
SoftBank
Slide 81: Definition and Calculation Method of SBG's Sum-of-the-parts Valuation
Definition and Calculation Method of SBG’s Sum-of-the-parts Valuation i. Net debt • Net debt = SBG net interest-bearing debt • SBG net interest-bearing debt = SBG gross debt - SBG cash position, etc • SBG gross debt = SBG gross interest-bearing debt = Gross debt (Consolidated) - Gross debt of subsid
Slide 82: Valuation Process / Methodology, and Definitions of Investment Performance
Valuation Process / Methodology, and Definitions of Investment Performance <Valuation Process> SBIA is responsible for determining fair values on a quarterly basis in line with the requirements of the AIFM Directive (as issued by the FCA). The SBIA Valuation team is functionally independent from por