Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2010
Earnings Results for the Fiscal Year Ended March 31, 2010 Analyst Meeting April 28, 2010 SOFTBANK CORP. June 3, 2010 Version
Slide 2: Disclaimer
Disclaimer This material is made based on information available at the time of writing. Statements in this material that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements. Forward-looking Statements are subject to various risks
Slide 3: Accounting, Finance, Operating
Accounting 5 Consolidated P/L Analysis 6 Consolidated B/S Analysis 15 Consolidated CF Analysis 25 Finance 31 Operating 61 Broadband Infrastructure Segment 63 Fixed-line Telecommunications Segment 67 Mobile Communications Segment 71 3
Slide 4: wm OOftBank
wm OOftBank
Slide 5: Accounting
Accounting Kazuko Kimiwada General Manager Accounting, Internal Control SOFTBANK CORP. 5
Slide 6: Consolidated P/L Analysis
Accounting Consolidated P/L Analysis 6
Slide 7: Consolidated P/L Summary
Consolidated P/L Summary <bn JPY> Net Sales Operating Income Ordinary Income Net Income 3,000 +3.4% +29.7% 500 2,673.0 2,763.4 465.8 Q4 718.1 99.5 690.7 400 +51.1% 359.1 340.9 2,000 Q3 84.4 59.8 300 135.6 653.2 696.0 225.6 94.6 107.6 Q2 200 51.1 124.0% 1,000 681.7 682.9 122.3 57.1 94.9 94.7 96.7 1.8
Slide 8: Consolidated Net Sales
Consolidated Net Sales 2,763.4 <bn JPY> 2,673.0 Mobile Communications +138.5bn +90.3 - Increase in telecom service revenue +90.7bn Increase in subscribers +85.2bn (+3.4%) Increase in ARPU +0.6bn - Increase in revenue from sales of mobile handsets and accessories +47.5bn Mobile 1,562.8 1,701.4 Commun
Slide 9: Consolidated Operating Income
Consolidated Operating Income <bn JPY> Mobile Communications +89.5bn - Increase in net sales +138.5bn 465.8 - Increase in cost of sales, selling, general and administrative expenses -49.0bn (main factors for increase) - Increase in cost of sales for mobile handsets resulting from an increase in hand
Slide 10: Non-operating Income/Expense and Ordinary Income
Non-operating Income/Expense and Ordinary Income <bn JPY> Non-operating Income/Expense Ordinary Income (1) Other non-operating expense Increase in (2) Equity in loss of affiliated companies non-operating (3) Interest expense FY2009 (4) Other non-operating income Increase in income/expense Ordinary (
Slide 11: Special Income/Loss and Income Before Income Taxes and Minority Interests
Special Income/Loss and Income Before Income Taxes and Minority Interests < bn JPY> Special Income/Loss Income Before Income Taxes and Minority Interests (1) Other special loss Net of FY2009 (2) Loss on additional entrustment for debt assumption (3) Impairment loss increase in Income before (4) Loss
Slide 12: Tax and Other Adjustments
Tax and Other Adjustments < bn JPY> FY2009 Main Breakdown of Tax Expenses A Income taxes: current 117.8 (main breakdown) 1. Yahoo Japan 57.5 2. SBM local taxes 31.8 (out of scope for BBM consolidated tax return) 3. BBM income taxes under consolidated tax return 23.3 (all loss carryforwards fully uti
Slide 13: Difference in Tax Rate
Difference in Tax Rate FY2009 Reconciliation Between Statutory Tax Rate and Effective Tax Rate <reference> Rate(%) Amount (bn JPY) Income before income taxes and minority interests 289.2 Statutory income tax rate 40.7% 117.6 (main factors of difference) Change in valuation allowance -8.6% -24.9 Amor
Slide 14: Loss Carryforwards (Mar 2010)
Loss Carryforwards (Mar 2010) < bn JPY> Occurred Utilized Deferred FY08/Q4 FY09/Q4 During During Tax Company Balance FY09 FY09 Other Balance Expiry (taxable (taxable Assets Name (taxable (taxable Variances Date income income income income (tax based) based) based) based) based) BB Mobile 77.1 - -77.
Slide 15: Consolidated B/S Analysis
Accounting Consolidated B/S Analysis 15
Slide 16: Consolidated B/S Summary
Consolidated B/S Summary SBM Others <bn JPY> Current Assets Current Liabilities 1,520.3 1,694.4 1,349.5 1,378.8 1,035.3 1,093.8 674.8 768.5 484.9 600.6 674.7 610.2 Mar 2009 Mar 2010 Mar 2009 Mar 2010 Fixed Assets Long-term Liabilities 2,865.0 2,766.4 2,212.2 2,120.0 1,953.9 1,850.0 1,672.2 1,426.4 9
Slide 17: Consolidated B/S (1) Current Assets
Consolidated B/S (1) Current Assets <bn JPY> Assets Mar 2009 Mar 2010 Variance Outline Current assets 1,520.3 1,694.4 174.1 SBM 1,035.3 1,093.8 58.5 Others 484.9 600.6 115.6 Cash and deposits 457.9 690.0 232.1 Increase provided by operating activities (+417.8 ) Securitization of installment sales re
Slide 18: Consolidated B/S (2) Tangible Assets
Consolidated B/S (2) Tangible Assets <bn JPY> Assets Mar 2009 Mar 2010 Variance Outline Fixed assets 2,865.0 2,766.4 -98.5 SBM 1,953.9 1,850.0 -103.9 Others 911.0 916.4 5.3 Property and equipment, net 1,000.9 950.7 -50.2 SBM 697.1 660.0 -37.0 Others 303.8 290.6 -13.1 Building and structures 71.5 68.
Slide 19: Consolidated B/S (3) Intangible Assets
Consolidated B/S (3) Intangible Assets <bn JPY> Assets Mar 2009 Mar 2010 Variance Outline Fixed assets 2,865.0 2,766.4 -98.5 Intangible assets, net 1,222.1 1,152.3 -69.7 SBM 1,077.4 1,021.3 -56.1 Others 144.6 131.0 -13.5 Goodwill 956.7 900.7 -55.9 SBM 878.5 827.1 -51.4 Decrease due to regular amorti
Slide 20: Consolidated B/S (4) Current Liabilities
Consolidated B/S (4) Current Liabilities <bn JPY> Liabilities Mar 2009 Mar 2010 Variance Outline Current liabilities 1,349.5 1,378.8 29.2 SBM 674.8 768.5 93.7 Others 674.7 610.2 -64.4 Accounts payable-trade 160.3 158.9 -1.3 SBM 100.5 93.1 -7.3 SBB: Mar 09 (38.3) >> Mar 10 (43.4) Others 59.8 65.8 5.9
Slide 21: Consolidated B/S (5) Long-term Liabilities
Consolidated B/S (5) Long-term Liabilities <bn JPY> Liabilities Mar 2009 Mar 2010 Variance Outline Long-term liabilities 2,212.2 2,120.0 -92.2 SBM 1,672.2 1,426.4 -245.7 Others 540.0 693.5 153.4 Corporate bonds 324.5 448.5 123.9 SBM - - - Issue SB stand-alone: 27th, 28th, 29th, 30th Unsecured Straig
Slide 22: Consolidated B/S (6) Equity
Consolidated B/S (6) Equity <bn JPY> Equity Mar 2009 Mar 2010 Variance Outline Equity 824.7 963.9 139.1 Shareholders’ equity 348.1 444.6 96.4 Common stock 187.6 188.7 1.0 Additional paid-in capital 211.9 213.0 1.0 Accumulated deficit/retained earnings -51.2 43.0 94.3 FY2009 net income (+96.7), divid
Slide 23: [Equity] Foreign Currency Translation Adjustments
[Equity] Foreign Currency Translation Adjustments <bn JPY> 60 Foreign currency translation adjustments account 40 35.9 20 30.6 25.6 7.4 4.4 3.4 0 -25.7 -21.8 -20 -30.5 -31.6 -32.5 -34.4 -40 Jun 07 Sep Dec Mar 08 Jun Sep Dec Mar 09 Jun Sep Dec Mar 10 <Ref> Main exchange rate trend <JPY> GBP/JPY (TTM）
Slide 24: [Equity] Shareholders' Equity
[Equity] Shareholders’ Equity Common stock & additional paid-in capital* Accumulated deficit/retained earnings Treasury stock Unrealized gain on available-for-sale securities * Including cash receipts for new stock subscriptions Deferred gain (loss) on derivatives under hedge accounting Foreign curr
Slide 25: Consolidated CF Analysis
Accounting Consolidated CF Analysis 25
Slide 26: Consolidated Cash Flow Main Breakdown
26 Mar 10 687.6 Cash and cash equivalents at the end of the year -103.0 Repayment of lease obligations 135.9 Sale and lease back of equipment newly acquired Financing CF -70.6 Redemption of bonds Consolidated Cash Flow Main Breakdown -159.5 183.4 Bonds issued -516.0 Repayment of long-term debt Note:
Slide 27: Consolidated Earnings Forecast
Consolidated Earnings Forecast Operating Income <bn JPY> 600 500.0 500 465.8 400 359.1 300 200 100 0 FY08 FY09 FY10 (actual) (actual) (forecast) 27
Slide 28: Influence of New Accounting Standards in FY2010
Influence of the implementation New Accounting Standard in FY2010 1. Accounting Standard for Disclosures about Segments of an Enterprise and Related Information (ASBJ Statement No.17) 2. Accounting Standard for Asset Retirement Obligations (ASBJ Statement No.18) 28
Slide 29: Scope of Consolidation/Scope of Equity Method
Scope of Consolidation/Scope of Equity Method Number of Name of Core Companies Companies SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Consolidated subsidiaries 109 Yahoo Japan, SOFTBANK TECHNOLOGY, ITmedia, SOFTBANK Holdings Inc. etc. Newly consolidated subsidiaries 8 Viewn Corporation Subsidiari
Slide 30: wm OOftBank
wm OOftBank
Slide 31: Finance
Finance Yoshimitsu Goto General Manager Finance SOFTBANK CORP. 31
Slide 32: Achievements of FY2009 Financial Strategies
Achievements of FY2009 Financial Strategies Towards “ZERO net-interest bearing debt” ¾ FCF: JPY 390.8bn (215% YoY) Maximize FCF, through increased operating CF and ¾ Net interest-bearing debt reduced by JPY 438.4bn appropriate investing CF (reduction by approx. JPY 880.0bn from Jun 06) Continue im
Slide 33: Main Financing Activities of FY2009
Main Financing Activities of FY2009 (bn JPY) Date Content Amount Issue 27th Unsecured Straight Corporate Bond 2009 June 60.0 (Fukuoka SoftBank HAWKS Bond) June Securitization of mobile handset installment sales receivables 70.2 July Issue 28th Unsecured Straight Corporate Bond 30.0 Issue 29th Unsecu
Slide 34: Main Investments in Businesses during FY2009
Main Investments in Businesses during FY2009 Company Name FY09 Investment Amount Oak Pacific Interactive Approx. JPY 7.7bn RockYou, Inc. Approx. JPY 5.0bn Ustream, Inc. Approx. JPY 1.8bn Total Approx. JPY 14.6bn Note: investment amount is calculated based upon an exchange rate of 1$=JPY 93. 34
Slide 35: FCF Actual
FCF Actual <bn JPY> 400 390.8 300 JPY 209.3bn increase 181.5 (215% YoY) 200 JPY 345.7bn 100 increase 0 -100 -200 -164.2 FY07 FY08 FY09 Note: free cash flow (FCF) = cash flows from operating activities + cash flows from investing activities. 35
Slide 36: Cash Flow Trend
Cash Flow Trend <bn JPY> Operating CF Investing CF Financing CF FCF 600 390.8 400 181.5 200 0 -200 -164.2 -400 FY07 FY08 FY09 Note: free cash flow (FCF) = cash flows from operating activities + cash flows from investing activities. 36
Slide 37: EBITDA and EBITDA Margin (by segment)
EBITDA and EBITDA Margin (by segment) ¾ EBITDA growing steadily in each segment. <bn JPY> Consolidated EBITDA EBITDA Margin Elimination Other 60% Internet Culture e-Commerce 787.6 800 BB Infrastructure Fixed-line Telecommunications 54% 54% Internet Mobile Communications 51% Culture 678.6 50% 700 626
Slide 38: Interest-bearing Debt (by procurement method)
Interest-bearing Debt (by procurement method) <bn JPY> 2,532.9 2,545.3 2,494.9 Securitization of installment sales 2,432.2 2,400.3 2,392.0 receivables obligations 2,500 2,348.3 219.0 223.1 230.9 2,288.1 2,195.4 SBM loan 218.8 221.9 231.9 221.6 222.3 219.8 Vodafone subordinate loan 2,000 Yahoo Japan
Slide 39: Lease Obligations
Lease Obligations ¾ Continue implementation of lease financing. <bn JPY> 2,500 Finance leases (accounted for as operating lease transactions) * Finance leases (lease obligations) 2,000 1,500 1,000 484.9 481.4 494.5 468.7 462.9 436.1 437.7 439.8 500 421.7 173.6 166.0 157.5 149.5 141.3 133.4 121.4 112
Slide 40: Cash Position
Cash Position ¾ Sustain abundant cash position. <bn JPY> 795.3 800 720.7 720.8 101.0 661.0 141.0 111.0 600 165.0 537.8 525.9 525.0 481.8 51.0 Unused portion of credit 100.0 101.0 21.0 423.3 line facility 400 36.0 694.3 Cash and deposits, and 579.7 609.8 marketable securities 496.0 460.8 486.8 200 42
Slide 41: Net Interest-bearing Debt
Net Interest-bearing Debt ¾ Accelerate redemption of debt. <bn JPY> 2,500 2,119.3 2,070.9 2,036.8 2,044.9 223.1 1,939.5 1,905.1 2,000 219.0 230.9 218.8 221.9 231.9 1,768.5 1,678.2 221.6 1,501.0 222.3 1,500 219.8 Securitization of installment sales receivables obligations 1,000 1,817.8 1,896.2 1,840.
Slide 42: Net Interest-bearing Debt
Net Interest-bearing Debt ¾ Steady reduction towards achieving commitment. <bn JPY> 2,500 Approx. JPY 100.0bn 2,036.8 Approx. JPY 440.0bn 1,939.5 2,000 1,501.0 1,500 Half of Mar 09 1,000 500 0 Mar 08 Mar 09 Mar 10 Mar 12 Note: 1. Net interest-bearing debt = interest-bearing debt - cash position. (ta
Slide 43: Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend
Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend ¾ Ratios recovered to pre-financial crisis levels. Interest-bearing Debt Interest-bearing Debt Long/Short Ratio Fixed/Variable Ratio <bn JPY> <bn JPY> Long-term Short-term Fixed Variable 100% 100% 347.3 410.0 311.5 90% 501.1 492.3 90% (
Slide 44: Summary of the Procurement with Corporate Bond FY2009
Summary of the Procurement with Corporate Bond FY2009 ¾ Achieved rapid improvement of bond spread and procured record-high amount. Bond Spread <bp> 30th Unsecured Straight Corporate Bond (4.9 years remaining) 26th Unsecured Straight Corporate Bond (4.2 years remaining) Return to the bond market for
Slide 45: Ranking of the Amount of Corporate Bond Issuance in FY2009
Ranking of the Amount of Corporate Bond Issuance in FY2009 ¾ The only BBB related company to achieve upper ranking. Rank Company Amount (bn JPY) Rating 1 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 763.0 AA- JCR, subordinated 2 Sumitomo Mitsui Banking Corporation. 699.0 A+ JCR, subordinated 3 Mizuho Corp
Slide 46: CDS and Bond Spread
CDS and Bond Spread ¾ Rapid tightening of CDS and bond spread. <bp> 2,200 2,000 1,800 SOFTBANK CDS (5 years) 1,600 26th Unsecured Straight Corporate Bond (4.2 years remaining) 1,400 1,200 1,000 800 600 400 200 0 Apr Jul Oct Jan Apr Jul Oct Jan Apr FY08 FY09 FY10 Source: CDS data by Bloomberg. Bond s
Slide 47: Bond Redemption Schedule
Bond Redemption Schedule ¾ Sustain sufficient repayment resources. <bn JPY> Repayment Capability Corporate Bonds Redemption Schedule Unused portion of credit line facility Cash and cash deposits, and marketable securities SB straight bond 800 795.3 SB convertible bond 101.0 SBTM straight bond 600 48
Slide 48: FY09 Purchase of Corporate Bonds etc.: Actual
FY09 Purchase of Corporate Bonds etc.: Actual ¾ Purchased corporate bonds appropriately according to the market conditions. - Purchase and retirement of corporate bonds Bond Issuer Purchased face value Unsecured Straight Bond SOFTBANK JPY 2.5bn Euro-denominated Approx. JPY 4.3bn SOFTBANK Senior Note
Slide 49: Outstanding Balance of SBM Loans
Outstanding Balance of SBM Loans Reduce approx. JPY 450bn since the beginning of WBS structure (as of Apr 2010). <bn JPY> <times> 1,400 1,355.0 1,276.4 5.0 Mobile 1,200 4.5 1,184.8 Communications 4.1 4.0 leverage ratio 1,000 959.7 3.7 912.7 3.0 2.5 times 800 (Mar 2010) 600 2.5 2.0 Net interest-beari
Slide 50: Securitization of Installment Receivables in Mobile Communications
Securitization of Installment Receivables in Mobile Communications (reported as borrowings) ¾ Continue implementation of securitization of installment receivables in Mobile Communications. <bn JPY> 230.9 231.9 221.6 222.3 250 219.0 223.1 218.8 221.9 219.8 193.4 200 Outstanding 142.1 balance 150 88.1
Slide 51: Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple
Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple ¾ Expand EBITDA and reduce interest-bearing debt. Interest-bearing Debt/EBITDA (Ref.) Net Interest-bearing Multiple Debt/EBITDA Multiple <times> <times> 8.0 8.0 6.0 6.0 4.8 4.0 4.1 4.0 3.5 4.0 3.3 2.8 2.9 1.9 2.0 2.0 0.0 0.0 FY06 FY07 FY08 F
Slide 52: Improve Indexes: (2) Debt/Equity Ratio
Improve Indexes: (2) Debt/Equity Ratio ¾ Drastic improvement. <times> <times> Debt Equity Ratio Net Debt Equity Ratio 12.0 12.0 D/E ratio Net D/E ratio D/E ratio (excl. Mobile Communications segment) Net D/E ratio (excl. Mobile Communications business) 10.0 9.0 10.0 7.6 8.0 8.0 6.6 6.4 6.0 6.0 5.3 5
Slide 53: Improve Indexes: (3) Equity Ratio
Improve Indexes: (3) Equity Ratio ¾ Equity ratio recovered to 10% level. Equity Ratio (Ref.) Equity Ratio* <bn JPY> <bn JPY> (considering unrealized gain) 2,000 30% 54.5% Shareholders' equity (considering unrealized gain) Shareholders' equity 2,000 1,876.9 Equity ratio (considering unrealized gain)
Slide 54: Trend of Credit Rating
Trend of Credit Rating ¾ JCR: upgraded (BBB BBB+) / S&P: upgraded (BB BB+). Moody’s: changed its estimation (stable positive). Evaluation points of credit rating: JCR (AA-) Mobile Improvement in profitability of main business segments. AA /AA3 Communications Reduction of net interest-bearing debt. c
Slide 55: Net Interest-Bearing Debt Reduction Target
Net Interest-Bearing Debt Reduction Target <bn JPY> JPY1.9t Consider WBS refinance 2,000 (conditions) ¾Favorable procurement environment. ¾Sustain favorable trend in Mobile Communications Segment. Half ¾Improvement in credit rating of SOFTBANK CORP. 1,000 Zero 0 FY08 FY11 FY14 (target) (target) Note
Slide 56: Commitments Unchanged
Commitments Unchanged *1 Cumulative 3 years FCF: at least JPY 1t (FY2009-2011) *2 Net Interest-bearing debt to half (by end of FY2011) *2 Net Interest-bearing debt to zero (by end of FY2014) No major investments until the achievement of the commitments Notes: 1. Free cash flow (FCF, Cash and deposit
Slide 57: FY2010 Financial Strategies
FY2010 Financial Strategies Towards “ZERO net interest-bearing debt” 1. Further strengthening of financial base ¾ Thoroughness towards debt reduction through sustained high level of FCF. ¾ Appropriate distribution of investment CF (CAPEX or investment in business). ¾ Improve corporate value as resul
Slide 58: Corporate Bond Details
Corporate Bond Details <mil JPY> Interest Mar 09 Mar 10 Company name Bond Issue date Maturity date rate Collateral Change balance balance (%/year) 19th series Unsecured Straight Bond 2005/1/31 2010/1/29 1.97 None 19,000 ― -19,000 24th series Unsecured Straight Bond 2007/4/26 2010/4/26 2.72 None 20,0
Slide 59: wm OOftBank
wm OOftBank
Slide 60: wm OOftBank
wm OOftBank
Slide 61: Operation
Operation Kazuhiko Fujihara Senior Vice President, CFO, Director of the Board SOFTBANK MOBILE Corp. Senior Vice President & CFO, Director SOFTBANK BB Corp. Director SOFTBANK TELECOM Corp. 61
Slide 62: Overview of Telecommunications Businesses
Overview of 3 Telecommunications Businesses ¾ Continued increase in consolidated operating income. Large increase in profit in <bn JPY> Mobile Communications led consolidated operating income to reach a record high. Broadband Infrastructure Fixed-line Telecommunications Mobile Communications 504.3 Y
Slide 63: Broadband Infrastructure Business
Operation Broadband Infrastructure Business 63
Slide 64: Operating Income, EBITDA
Operating Income, EBITDA <BB> ¾ Maintain trend of revenue increase through cost reductions. <bn JPY> Operating Income EBITDA 80 80 70.3 70.9 65.7 18.2 16.8 55.6 14.2 48.7 47.2 Q4 15.7 39.7 9.3 18.5 20.1 16.0 10.6 40 40 9.4 12.1 Q3 15.4 26.8 14.3 17.5 17.3 Q4 11.3 17.5 7.3 13.3 Q3 7.7 Q2 12.6 11.7 10
Slide 65: Yahoo! BB ADSL Lines and ARPU
Yahoo! BB ADSL Lines and ARPU <BB> ¾ Number of ADSL lines is decreasing. ARPU on same level. Yahoo! BB hikari with FLET’S deployed full-fledged. Number of Lines <JPY> ARPU <k lines> 6,000 Installed lines 5,000 (1) Basic charge (4) BB Phone (2) Modem rental revenue (5) BB Security Charged lines (3) W
Slide 66: CAPEX [acceptance basis]
CAPEX [acceptance basis] <BB> ¾ Amount of CAPEX in FY09 was JPY 9.4bn (plan: JPY 10.1bn). <bn JPY> CAPEX and Depreciation & Amortization CAPEX (quarterly trend) 50 47.6 (yearly trend) 25 CAPEX 40 20 Depreciation & amortization 15 30 22.1 21.2 (Reference) 10 20 Annual forecast 14.5 (FY09) 6.9 6.7 10.
Slide 67: Fixed-line Telecommunications
Operation Fixed-line Telecommunications 67
Slide 68: Operating Income, EBITDA
Operating Income, EBITDA <Fixed> ¾ Sustain trend of profit increase through enhancement of corporate <bn JPY> lines and efficient management. Operating Income/Loss EBITDA 30 75 66.9 SOFTBANK IDC impact 64.3 25 Q4: JPY +0.4bn Q3: JPY +0.5bn 22.9 Q2: JPY +0.5bn 19.6 20 Q1: JPY +0.5bn 18.9 18.7 FY2008
Slide 69: Number of Lines and ARPU for OTOKU Line
Number of Lines and ARPU for OTOKU Line <Fixed> ¾ Sustain number of lines and ARPU due to enhancement of corporate lines. <k lines> Number of Lines <JPY> ARPU 1,800 Large Corp. 12,000 1,660 1,670 SME (SBTP) 1,610 Large Corp. Total 1,600 SME (excl. SBTP) Consumer 1,400 10,000 1,400 1,200 8,000 1,000
Slide 70: CAPEX [acceptance basis]
CAPEX [acceptance basis] <Fixed> ¾ Amount of CAPEX in FY09 was JPY 17.9bn (plan: JPY 22.6bn). <bn JPY> 40 CAPEX and Depreciation & Amortization 150 CAPEX (quarterly trend) (yearly trend) CAPEX 30 Depreciation & amortization 100 82.6 20 (Reference) 50 Annual forecast 9.6 9.4 9.4 9.4 9.2 9.2 9.1 9.1 8
Slide 71: Mobile Communications
Operation Mobile Communications 71
Slide 72: SBM Consolidated Net Sales
SBM Consolidated Net Sales <Mobile> ¾ Both telecom service revenue and handset sales revenue increased significantly (YoY). SBM Consolidated Net Sales SBM Consolidated Net Sales (Yearly Comparison) (Quarterly Comparison) <bn JPY> Telecom service revenue Sales of mobile handsets and accessories 1,200
Slide 73: Operating Income
Operating Income (SB consolidated, SBM consolidated) <Mobile> ¾ Profit increase exceeds 50% YoY through increase of sales and efficient management (record high*). <bn JPY> <bn JPY> SBM Consolidated SB Consolidated Mobile Communications Segment (YoY) (YoY) +103.7 +89.5 260.9 (+54.8%) 250 (+52.2%) 300
Slide 74: EBITDA (SB consolidated, SBM consolidated)
EBITDA (SB consolidated, SBM consolidated) <Mobile> ¾ Favorable trend sustained by continuous sales increase and efficient management. SB Consolidated Mobile Communications Segment SBM Consolidated (YoY) <bn JPY> <bn JPY> (YoY) +100.5 +98.8 (+24.9%) (+24.9%) 504.3 500 500 496.1 112.2 109.5 403.8 397
Slide 75: Quarterly Net Additions
Quarterly Net Additions <Mobile> ¾ Continued growth in net additions (Q4 results include the effect of <k subs> termination of 2G service.) FY09 Q4 1,000 973 net additions 800 209k <Breakdown> 612 633 600 Postpaid +507k 531 561 526 521 Prepaid -297k 412 361 350 400 367 323 190 209 200 125 93 67 25 3
Slide 76: Monthly Net Additions
Monthly Net Additions <Mobile> ¾ Net decrease in March due to the termination of 2G service. The number of MNP net additions remains steady. <k subs> Number of Net Additions <k subs> Number of MNP Net Additions 600 100 80 SOFTBANK 60 400 40 20 0 200 KDDI -20 -40 NTT DOCOMO 0 -60 FY2008 FY2009 FY2008
Slide 77: Trend of Total Subscribers and 3G Subscribers
Trend of Total Subscribers and 3G Subscribers <Mobile> ¾ Number of total subscribers growing steadily. 3G ratio reaches 100% after termination of 2G service. <mil subs> 20.63 21.88 20 2G 3G 18.59 Cumulative Subscribers 15.21 15.91 2010/3 21.88mil 15 2006/6 15.24mil 3.04 Increase +6.64mil 7.66 14.05
Slide 78: Status of 2G Subscribers
Status of 2G Subscribers <Mobile> ¾ Slightly influenced by the termination of 2G service. Continuous growth in telecom service revenue. Subscribers ARPU Telecom Service JPY Revenue mil subs 3G bn JPY 6,000 Total 300 3G 2G postpaid 20 2G 2G 2G prepaid 5,000 15 4,000 200 25.1% 80.0% 3,000 99.5% 10 2,0
Slide 79: Churn Rate & Upgrade Rate
Churn Rate & Upgrade Rate <Mobile> ¾ Churn rate higher YoY due to termination of 2G service. ¾ Upgrade rate decreased YoY, number of upgrades at same level. Churn Rate Upgrade Rate Total 3G postpaid 2.89% 2.01% 3.0% 2.0% 1.63% 1.93% 1.98% 2.0% 1.78% 1.19% 1.13% 1.37% 1.0% 1.28% 0.90% 1.0% 0.85% 0.0%
Slide 80: Churn Rate Details (FY09/Q4)
Churn Rate Details (FY09/Q4) <Mobile> ¾ The termination of 2G service resulted in high churn rate in prepaid and postpaid (2G). ¾ Churn rate largely varies according to type of history of model changes. Churn Rate by Model Change (FY09/Q4) Churn Rate by Type of Contract (FY09/Q4) <postpaid 3G> 20.0%
Slide 81: New Super Bonus Ratio and Installment Sales Receivables Balance
New Super Bonus Ratio and Installment Sales Receivables Balance <Mobile> ¾ Installment balance peaked out, sustain steady securitization. New Super Bonus Subscription Ratio Installment Sales Receivables Balance <bn JPY> (include Super Bonus) 600 Long-term balance Acquisitions installment ratio (*1)
Slide 82: Cash Flow Impact from Installment Sales Receivables
Cash Flow Impact from Installment Sales Receivables <Mobile> ¾ Impact on operating CF in FY09 was JPY 91.4bn. (Impact on operating CF decreasing). <bn JPY> Impact on Operating CF (cumulative) Installment Sales Installment Increase in Impact on Receivables Sales Installment Operating <bn JPY> Balance
Slide 83: ARPU (average telecom service revenue per subscription)
ARPU (average telecom service revenue per subscription) <Mobile> ¾ FY09 ARPU increased YoY (+3 JPY). Data ARPU exceeded basic charge & voice ARPU for the first time. ¾ QoQ: total ARPU decrease impacted by access charge adjustment. <JPY> FY06 FY07 FY08 FY09 6,000 5,510 JPY 4,650 JPY 4,070 JPY* 4,070
Slide 84: ARPU (Reference) Influence of Monthly Discounts
(Reference) Influence of Monthly Discounts ARPU (average telecom service revenue per subscription) <Mobile> ¾ ARPU increased YoY (+60 JPY). ¾ Data ARPU increased YoY (+320 JPY). The growth trend accelerated. <JPY> (YoY comparison) Impact of access charge Monthly Discounts 6,500 Basic charge + voice
Slide 85: ARPU YoY Comparison
ARPU (average telecom service revenue per subscription) YoY Comparison <Mobile> ¾ Continued increase in ARPU YoY from Q3. <JPY> 110 SOFTBANK (+2.7%) YoY: +60 JPY 0 (+1.6%) -200 -480 NTT DOCOMO (-11.1%) -400 -390 KDDI -600 (-7.0%) -800 -1,000 -900 (-17.2%) -1,200 06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q
Slide 86: Average Cash Income Per Subscription
Average Cash Income Per Subscription (including HS installment payment) <Mobile> ¾ Cash income per subscription decreased due to the impact of access charge adjustment. Impact from access * charge HS installment payment <JPY> Backup Service Package, etc. 7,000 leap year Voice Data 5,960 5,630 6,000
Slide 87: CAPEX [acceptance basis]
CAPEX [acceptance basis] <Mobile> ¾ Amount of CAPEX in FY09 was JPY 184.7bn. JPY 30.3bn lower than <bn JPY> planned (to be carried over to FY10). CAPEX and Depreciation & Amortization CAPEX (quarterly trend) 400 (yearly trend) 100 CAPEX (Mobile Communications Segment) Depreciation & amortization (Mo
Slide 88: Improvement in Management Efficiency
Improvement in Management Efficiency <Mobile> ¾ Steady improvement. ¾ Large improvement in allowances. <bn JPY> SBM Inventory (on B/S) <bn JPY> Allowance for Doubtful Accounts of 70 Installment Receivables and Bad Debt Loss 35 66.0 (on P/L) 60 30.4 30 50 25 Q4 10.1 46.2 45.9 44.9 40 41.6 20 38.6 16.
Slide 89: Average Acquisition Cost per Subscriber and Gross Margin from Handset Sales
Average Acquisition Cost per Subscriber and Gross Margin from Sales of Mobile Handsets and Accessories ¾ Reduction in acquisition cost YoY impacted by corporate sales, etc. <Mobile> SBM Average Acquisition Cost per Subscriber and Gross Margin <k JPY> from Sales of Mobile Handsets and Accessories per
Slide 90: Trademarks and copying notice
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