Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2019 Earnings Presentation
93 slides from Softbank's earnings presentation, Feb 14, 2020
Slide 1: Earnings Results for the Nine-month Period Ended Dec. 31, 2019
Ver1.1 Earnings Results for the Nine-month Period Ended Dec. 31, 2019 Investor Briefing February 14, 2020 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries and associates (together with SBG, “we,” “us” or the “Group”) and does not constitute or form any solicitation of investment including any offer to buy or subscribe for any securities
Slide 3: Exchange rates and abbreviations
Exchange rates used for translation FY2018 FY2019 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 108.71 111.55 112.83 110.46 110.00 107.70 108.98 1 GBP 147.54 145.84 144.48 143.99 140.88 132.73 139.55 1 CNY 16.97 16.40 16.31 16.37 16.13 15.37 15.46 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30
Slide 4: Index
Index Accounting Finance Consolidated Results P 2 Equity Value of Holdings P 2 Change in Reportable Segments P 3 LTV P 3 Details and Progress of SBG/WeWork Agreement P 4 SVF I Listed Portfolio Companies P 4 Investments in WeWork by SBG P 5 Alibaba: Share Price P 5 Sprint/T-Mobile Merger Status and I
Slide 5: Accounting
Ver1.1 Accounting
Slide 6: Consolidated Results
Consolidated Results FY18 FY19 (JPY bn) Q1-Q3 Q1-Q3 Change YoY Net sales 7,168.5 7,089.8 -78.7 -1.1% Operating income 1,859.0 -13.0 -1,872.0 - Net income (attributable to owners 1,538.4 476.6 -1,061.8 -69.0% of the parent) Accounting 2
Slide 7: Change in Reportable Segments
Change in Reportable Segments • Revised segment classifications from FY19 after SBKK made Yahoo Japan (currently Z Holdings) a subsidiary. The results of operations for FY18 are restated retroactively according to the new reportable segments. • In FY19Q3, the “SoftBank Vision Fund and Other SBIA-Man
Slide 8: Details and Progress of SBG/WeWork Agreement
Details and Progress of SBG/WeWork Agreement Details and progress of the agreement between SBG and WeWork dated Oct 22, 2019 are as follows Details Progress Exercise Price Existing commitment of USD 1.5 bn originally • SBG paid full amount of USD 1.5 bn on Oct 30, 2019 Reduction of planned to be exe
Slide 9: Investments in WeWork by SBG -1
Investments in WeWork by SBG -1 (USD mil) Cumula- Carrying Amounts Gain (loss) Recorded in tive Cumula- in FY19 Consolidated P/L in FY19 Account in Account in Investment Type Invest- tive Gain Consolidated B/S Consolidated P/L ment (loss) Q2 End Q3 End Q1 Q2 Q3 Q1-3 Amount Loss from Investment finan
Slide 10: Investments in WeWork by SBG -1 (Illustration)
Investments in WeWork by SBG -1 (Illustration) Outlook of the treatment of transactions agreed by SBG/WeWork (for illustrative purposes only) The losses are expected to be approximately the same Assumption: (a) the fair value of WeWork’s entire Actual Outlook equity remains at USD 7.8 bn as of Sep 3
Slide 11: Investments in WeWork by SBG -2
Investments in WeWork by SBG -2 (USD mil) FY18 FY19 FY19 Q1 Q2 Q3 Item in (c) Conversion of (e) Exercise of Investment Type Acqui- Valuation Q4 End (a) Tender Offer Warrants, Gain (loss) Q3 End Consolidated B/S sition Gain Carrying Promissory Notes Carrying and (f) Exercise and in Q1-Q3 Cost (Loss)
Slide 12: Sprint/T-Mobile Merger Status and Impact on Financial Results
Sprint/T-Mobile Merger Status and Impact on Financial Results Sprint/T-Mobile Merger Transaction Status Regulatory Approvals Business Combination Agreement (BCA) with T-Mobile • Received approvals from DOJ, FCC and 18 of the state PUC. • BCA is still effective (as of Feb 12) • Resolution of litigati
Slide 13: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) FY18 FY19 (JPY bn) P/L item Change Q1-Q3 Q1-Q3 ・FY18Q1-Q3: Recognized gain relating to loss of control over subsidiaries of 176.3 bn as a result of Net sales 7,168.5 7,089.8 -78.7 Arm’s Chinese subsidiary becoming a JV. Operating income (excluding income from 1,050.2
Slide 14: Consolidated B/S Summary (IFRSs) - Assets
Consolidated B/S Summary (IFRSs) - 1 B/S As of As of (JPY bn) Main items Change item Mar 2019 Dec 2019 Decrease of 422.6 bn due to withholding tax refund on dividends paid in FY18 from SoftBank 7,758.0 7,501.4 -256.6 Group Japan (SBGJ) to SBG Current assets Cash and cash equivalents 3,858.5 3,804.7
Slide 15: Consolidated B/S Summary (IFRSs) - Liabilities
Consolidated B/S Summary (IFRSs) - 2 B/S As of As of (JPY bn) Main items Change item Mar 2019 Dec 2019 8,681.7 8,087.1 -594.6 1 Impact of the adoption of IFRS 16 at the beginning of FY19 Interest-bearing debt 3,481.0 3,483.1 +2.1 1 892.5 bn of lease obligations previously included in interest-bearin
Slide 16: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2019 Dec 2019 9,009.2 9,191.4 182.2 Common stock 238.8 238.8 - Increased due to a decrease in SBG’s economic interests in Yahoo Japan (currently Z Holdings) Capital surplus 1,467.8 1,484.1 16.3 1 Net income attributa
Slide 17: Consolidation of ZOZO by Z Holdings
Consolidation of ZOZO by Z Holdings • Z Holdings implemented a tender offer of ZOZO with the aim of strengthening its e-commerce business. • Completed the tender on Nov 13, 2019 and acquired 50.1% of voting rights; ZOZO became a subsidiary of Z Holdings. Increase of assets of SBG B/S by ZOZO consoli
Slide 18: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) FY19 (JPY bn) C/F item Q1-Q3 ・SBG’s wholly owned subsidiary acquired preferred and common stock of 1,747.5 Subtotal of cash flows from operating activities WeWork for USD 2.0 bn in FY19Q1 and paid existing commitment of USD C/F from -430.5 Interest paid 1.5 bn to WeW
Slide 19: Income and Loss Arising from SVF and Other SBIA-Managed Funds
Income and Loss Arising from SVF and Other SBIA-Managed Funds (JPY bn) FY18 FY19 P/L Q1-Q3 Q1-Q3 Items Gain and loss on investments at 838.8 -729.0 SVF and other SBIA-Managed Funds FY18Q1-Q3: Gain on sale of Flipkart shares Realized gain and loss on sales of investments 146.7 14.6 FY19Q1-Q3: Gain on
Slide 20: Difference in Tax Rate
Difference in Tax Rate FY19Q1-Q3 Reconciliation between statutory tax rate and effective tax rate Amount Rate (%) (JPY bn) Income before income tax 1,345.4 Statutory income tax rate 31.5% 423.3 (main factors of difference) - Impact from reassessment of the recoverability of 12.2% 163.7 deferred tax
Slide 21: Bridge of Disclosures between SBG Financial Report and SVF I Update
Bridge of Disclosures between SBG Financial Report and “SoftBank Vision Fund I Update” section (USD bn) Committed capital, Total (p.15) Committed capital, The Company (p. 16) Contributions, The Company (p.16) SBG Financial Report 98.6 (SVF) 33.1 (SVF) 26.9 (SVF) Paid-in capital from the incentive -4
Slide 22: Bridge from Income before Income Tax to SVF's Contribution to SBG
Bridge from Income before Income Tax of SVF and Other SBIA- Managed Funds Business to SVF’s Contribution to SBG FY18 FY19 Q1-Q3 Q1-Q3 JPY bn 584.9 -623.1 SBG Financial Income before income tax of SVF and other SBIA- Report (p.17) managed funds business (Contribution to SBG) USD bn 5.29 -5.81 Income
Slide 23: Appendix
Appendix
Slide 24: Consolidation of Yahoo Japan by SBKK, ZOZO by Z Holdings
Consolidation of Yahoo Japan by SBKK, ZOZO by Z Holdings • On June 27, 2019, Yahoo Japan (currently Z Holdings) issued 1,511 mil. new shares to SBKK through a third-party allotment. • SoftBank Group Japan (SBGJ), a wholly owned subsidiary of SBG, accepted a tender offer of share buyback by Yahoo Jap
Slide 25: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (JPY bn) Change B/S As of As of Main items Changes in Outline item Mar 2019 Dec 2019 Amortization Others exchange rate 4,321.5 4,518.7 Goodwill Arm 2,777.5 2,748.7 - -28.7 - SBKK 907.5 907.5 - - - Sprint 326.8 322.6 - -4.2 - ZOZO - 212.9 - - 212.9*1 FCC lice
Slide 26: Adoption of new standards: IFRS 16 - Leases
(Reference) Adoption of new standards: IFRS 16 - Leases Initial measurement for Right-of-use Assets (ROU) and Lease Liabilities Lease Liabilities: Measured at the present value of total lease payments over the lease term Right-of-use Assets: Amount of the initial measurement of a lease liability plu
Slide 27: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Primary change in accounting treatment: Classification of finance and operating leases has been eliminated and “right-of-use assets*1” and “lease liabilities” are recognized on a balance sheet for all leases. -Leases previously classified as operating leas
Slide 28: Adoption of new standards: IFRS 16 - Right-of-use assets
Adoption of new standards: IFRS 16 - Leases Breakdown of right-of-use assets Opening B/S (Apr 1, 2019) (JPY bn) Class of underlying assets SBKK Sprint Others Total Telecommunications equipment (wireless equipment, 1,079.0 21.9 117.5 1,216.6 switching equipment and other network equipment) Reclassifi
Slide 29: SVF - Gain/Loss on Investments Purchased from SBG in P/L
SVF - Gain/Loss on Investments Purchased from SBG in P/L Investments purchased from SBG other than “Bridge investments” shown below. Examples include investments that were made without the premise of offering to the SVF at the time of acquisition, or, investments that were made with the premise of o
Slide 30: Differences in Figures of SoftBank Segment and SBKK
Differences in Figures of Financial Results of SoftBank Segment and SBKK (1) Depreciation and amortization for non-current assets at SBKK (formerly Vodafone K.K.) SBG’s consolidated financial statements SBKK’s consolidated financial statements When Vodafone K.K.’s controlling Depreciation & amortiza
Slide 31: Settlement of Prepaid Forward Contract using Alibaba Shares
Settlement of Prepaid Forward Contract using Alibaba Shares At signing of contract 3 years total At settlement （June 2016） （June 2019） Derivative liabilities USD 6.8 bn Gain relating to settlement of variable prepaid forward contract Amortized Interest expense using Alibaba cost USD 0.3 bn shares De
Slide 32: SoftBank
SoftBank
Slide 33: Finance
Ver1.1 Finance SBG standalone financial measures are calculated by excluding self-financing entities from consolidated group, unless otherwise stated. Self-financing entities are SBKK, Sprint, Arm, SVF, Brightstar, PayPay, Fortress, SB Energy, etc.
Slide 34: Equity Value of Holdings
Equity Value of Holdings (JPY tn) 31.1 25.7 12.2 16.1 +JPY 5.4tn Alibaba SBKK 4.8 SVF (equity value for SBG) 4.7 Sprint 3.2 Arm 3.1 3.2 Others 2.3 2.7 2.7 0.8 1.1 *2 Sep. 30, 2019 Feb. 12, 2020 *1 Equity value of holdings are calculated as follows - Alibaba: calculated by multiplying the number of s
Slide 35: LTV
LTV Manage LTV at less than 25% during normal periods with upper Excl. asset finance threshold of 35% even during abnormal periods (JPY) 29.9 tn （8.0） （8.0） LTV 16.1% *1 (Debt coverage 6.2x) 4.8 tn Equity value SBG standalone of holdings *2 net debt *1 Debt coverage = Equity value of holdings divide
Slide 36: SVF I Listed Portfolio Companies
SVF I Listed Portfolio Companies As of Dec. 31, 2019 As of Feb. 11, 2020 As of Feb. 11, 2020 (USD m) Investment cost Gross gain/(loss) Gross gain/(loss) Gross MOIC* Company to SVF I to SVF I to SVF I Guardant Health 308 +$1,863 +$1,875 7.1 x Uber 7,666 -$1,057 +$1,505 1.2 x Slack 334 +$489 +$578 2.7
Slide 37: Alibaba: Share Price
Alibaba: Share Price Alibaba share price hit all-time high in January 2020 and continues considerably high liquidity (US$) Alibaba share price and target price Global trading value ranking* ($, bn) 275 3 Months Average 250 $242 Company Market Cap. $248 Daily Trading Value 225 $211 $217 1 Apple 8.7 1
Slide 38: Sprint
Sprint Sprint and T-Mobile won in court in litigation seeking injunction prohibiting the closing of the merger Moving to finalize the merger (%) Sprint’s bond yield* (due 2024) 8 7 Will have a customer base 6 rivaling top two carriers 5 4 3 3.5% Establish stronger financial 2 base through the merger
Slide 39: SVF I Cumulative Investment Highlights
SVF I Cumulative Investment Highlights(as of Dec.31, 2019) Investment USD 9.5bn market uplift + realized gains Cumulative Investment cost USD 80.5bn (Since SVF I inception) Cumulative investment cost and aggregate market uplift include Flipkart and Nvidia, which were exited in August 2018 and Januar
Slide 40: SVF I Cumulative Investment Highlights
SVF I Cumulative Investment Highlights(as of Dec.31, 2019) USD17.2bn USD 9.5bn Realized gain Investment USD 4.7bn market uplift + USD -7.7bn realized gains Valuation gain USD 12.5bn Realized loss -$0.2bn Valuation loss USD -7.5bn Mark up Mark down (38 companies) (31 companies) SVF I highlights are p
Slide 41: Credit Quality of Portfolio Companies
Credit Quality of Portfolio Companies High creditworthiness supports our portfolio value (JPY tn) 31.1 Market cap : $601bn / Ratings : A+/A1/A+ Spread : 53bp (in US$) 16.1 Generated JPY0.9tn FCF in last 6 months (+34%). Consists of highly creditworthy assets Market Cap : $65bn / Ratings : AA-/A+ Ann
Slide 42: Progress of Transactions Related to WeWork
Progress of Transactions Related to WeWork Announced Plan Progress Support for letter of credit facility Entered into from financial institutions (US$1.75bn) an agreement (Date of execution: Dec. 27, 2019) Preparing a loan facility to WeWork Unsecured notes Facilitated / Undrawn (US$2.2bn) (Date of
Slide 43: SVF I: Fair Value of Investment Assets
SVF I: Fair Value of Investment Assets (US$bn) ＋10％ ＋7％ 77.6 79.8 74.6 70.7 Acquisition cost Fair Value Sep' 19 Dec' 19 88 companies 88 companies *1 The presented acquisition cost and fair value of investment assets excludes exited investments. *2 Past performance is not indicative of future results
Slide 44: SBG Standalone Interest-bearing Debt
SBG Standalone Interest-bearing Debt Funded in preparation for future bond redemptions (JPY bn) Main variance factors from Sep 30, 2019 7,969.0 Increase/decrease in bank loan and CP (+JPY39.8bn) 7,411.9 7,385.5 7,616.9 Collar financing on Alibaba shares (+JPY196.6bn) *Variable prepaid forward contra
Slide 45: SBG Standalone Cash Position
SBG Standalone Cash Position Decreased due to SVF I Capital call, new investments, etc. (JPY bn) 2,158.8 2,093.9 1,914.8 173.8 Net proceeds expected from asset sale 1,642.4 1,741.0 to SVF I (+$1.6bn) *unsettled 1,173.0 Main variance factors from Sep 30, 2019 Increase Decrease Exercising warrants of
Slide 46: Maintaining Abundant Cash Position
Maintaining Abundant Cash Position Maintain a liquidity level that covers bond redemptions for at least the next 2 years Steady implementation of early refinancing Cash position In addition to maintaining abundant cash position, (JPY bn) JPY0 1.9tn*1 secure various funding sources: • Refinancing Net
Slide 47: SBG Standalone Net Interest-bearing Debt
SBG Standalone Net Interest-bearing Debt Increased mainly due to change in cash position Excl. asset finance *for Dec.19 data (JPY bn) 6,212.4 6,228.0 5,522.9 Net proceeds expected from asset sale to SVF I: −$1.6bn 5,253.1 1,426.4 Adjustment on hybrid finance: −JPY 25.0bn 5,080.5 Adjustment on asset
Slide 48: Interest Expenses (standalone)
Interest Expenses (standalone*1) Interest payments are sufficiently covered by cash income and cash position 250.0 (JPY bn) 205.7 • Dividend income from 200.0 187.3 subsidiaries JPY 270.5bn*3 150.0 • Distribution from SVF I*4 $1.6bn in FY2018 100.0 $0.4bn in FY2019 Avg. interest rate on • Asset disp
Slide 49: Redemption Schedule
Redemption Schedule Planning various redemption options with refinancing as the main option (JPY bn) Domestic straight notes 1,305.6 Domestic subordinated notes Domestic hybrid notes 455.6 Foreign currency-denominated senior notes 951.5 924.1 Foreign currency-denominated hybrid notes 301.3 424.1 583
Slide 50: Financial Policy
Financial Policy 1. Manage LTV at less than 25% during “normal” periods (upper threshold of 35% even during “abnormal” periods) 2. Maintain cash position covering bond redemptions for at least the next 2 years 3. Secure sustainable distribution and dividend income from SVF and other subsidiaries Fin
Slide 51: Our Policy on Portfolio Companies' Support
Our Policy on Portfolio Companies’ Support Portfolio company finances to be No rescue self-financing package Finance 19
Slide 52: Appendix
Appendix
Slide 53: FY2019 Finance Strategy
FY2019 Finance Strategy Pursue both financial stability and flexibility as an investment company Well-protected financial management to be invulnerable to any environmental change 1. Manage balance between investment asset value and debt size • Manage LTV at less than 25% with upper threshold of
Slide 54: Direction of Financial Management (illustrative)
Direction of Financial Management (illustrative) Maximize enterprise value by maintaining optimal leverage through LTV management LTV to improve in the long run as investment assets appreciate in value Balance elevated leverage Divestment during with improvement in financial bull market; position du
Slide 55: LTV Calculation: Adjusted SBG Standalone Net Debt
LTV Calculation: Adjusted SBG Standalone Net Debt (L) Adjusted SBG Standalone Net Debt JPY 4.80tn (V) SBG Standalone = 16.1% JPY 29.85tn Equity Value of Holdings (JPY tn) = - - Adjusted SBG Consolidated Net Debt at Self- Other Standalone Net Debt Net Debt financing Entities Adjustments 4.80 15.70 9.
Slide 56: LTV Calculation: SBG Standalone Equity Value of Holdings
LTV Calculation: SBG Standalone Equity Value of Holdings (L) Adjusted JPY 4.80tn SBG Standalone Net Debt (V) SBG Standalone = 16.1% Equity Value of Holdings JPY 29.85tn (JPY tn) = + + Investment SBG Standalone Holdings Major Shares Assets Under Others SVF 29.85 25.56 3.15 1.14 Alibaba 16.08 SBKK 4.7
Slide 57: Equity Value of Holdings
Equity Value of Holdings +JPY6.7tn YoY (JPY tn) 29.5 26.4 26.2 25.7 Composition Ratio 22.8 54％ 15.9 13.4 12.3 12.2 10.1 Alibaba SBKK SVF (equity value for SBG) 4.0 4.5 4.7 4.6 16％ Sprint 4.3 Arm 3.2 3.5 11％ Yahoo Japan 2.7 3.1 3.1 7％ Others 2.2 2.2 2.4 2.3 2.0 2.7 2.7 2.6 2.7 2.7 9％ 0.5 0.2 0.5 0.5
Slide 58: SVF I Listed Portfolio Companies (as of Dec. 31, 2019)
SVF I Listed Portfolio Companies (as of Dec. 31, 2019) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD m) Company Investment cost Gross Return*5 Gross gain/(loss) Gross MOIC*7 to SVF I to SVF I to SVF I Guardant Health*1 308 2,171 +$1,863 7.1 x Slack 334 823 +$489 2.5 x 10x Genomics 31 293 +$262 9.4 x
Slide 59: SVF I Snapshot (as of Dec. 31, 2019)
SVF I Snapshot (as of Dec. 31, 2019) (a) (b) (c) = (b) - (a) (USD billion) Investment cost*2 Gross return*1 Gross gain/(loss)*1 to SVF I to SVF I to SVF I (A) Listed company total*3 $9.6 $11.0 +$1.4 (B) Private & existed company total $70.9 $79.0 +$8.1 (A)+(B) SVF I total（Gross） $80.5 $90.0 +$9.5 (d
Slide 60: SVF I Listed Portfolio Companies (as of Feb. 11, 2020)
SVF I Listed Portfolio Companies (as of Feb. 11, 2020) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD m) Investment cost Gross return*8 Gross gain/(loss) Company Gross MOIC*9 to SVF I to SVF I to SVF I Guardant Health*1 308 2,183 +$1,875 7.1 x Uber 7,666 9,171 +$1,505 1.2 x Slack*2 334 912 +$578 2.7 x
Slide 61: SVF I: Capital Commitment
SVF I: Capital Commitment Capital Commitment (as of Dec. 31, 2019) (US$bn) 98.6 (74.9) SBG 65.5 33.1 （26.9） （48.0） Third-party limited partners * Numbers in brackets represent amounts contributed *1 SBG’s committed capital to SVF I includes approximately $8.2 billion of an obligation satisfied by us
Slide 62: SBG Credit Rating Trend
SBG Credit Rating Trend Aim to improve credit rating evaluation under the investment holding company rating criteria 14 Acquisition of Acquisition of Sprint Arm SBKK Japan Telecom Vodafone KK Acquisition Acquisition Listing 13 A/A2 12 A－/A3 JCR (A－) 11 BBB+/Baa1 10 BBB/Baa2 9 BBB－/Baa3 S&P (BB＋) 8 B
Slide 63: Consolidated Interest-bearing Debt
Consolidated Interest-bearing Debt Interest-bearing debt ＋ (JPY bn) 19,250.0 Lease liabilities 18,088.6 17,053.8 17,329.6 SBG 15,685.1 Others (Arm, etc.) 7,969.0 SVF 7,616.9 7,385.5 Variable prepaid forward contract*2 7,411.9 (Alibaba) 6,722.9 307.1 SoftBank segment*3 283.5 721.3 283.6 624.3 Sprint
Slide 64: Consolidated Cash Position
Consolidated Cash Position (JPY bn) 5,125.8 4,005.9 2,158.8 3,629.1 3,553.2 SBG 2,724.2 2,093.9 547.9 1,642.4 1,741.0 Others (Arm, etc.) SVF 1,173.0 1,285.6 572.2 322.9 SoftBank segment*2 416.5 263.2 245.6 273.8 118.1 140.5 Sprint segment 376.1 358.3 645.1 876.9 900.1 757.4 782.4 524.8 466.5 355.1 D
Slide 65: Consolidated Net Interest-bearing Debt
Consolidated Net Interest-bearing Debt Interest-bearing debt (JPY bn) ＋Lease liabilities – Cash position 15,696.8 14,605.3 14,082.7 11,927.9 12,056.0 6,228.0 6,212.4 5,522.9 SBG 5,253.1 5,080.5 Others (Arm, etc.) 580.8 9.4 378.7 SVF 20.4 Variable prepaid forward contract*3 727.8 730.6 4,451.0 (Aliba
Slide 66: SoftBank Vision Fund I Update
QUARTER ENDED DECEMBER 31, 2019 SoftBank Vision Fund I Update NAVNEET GOVIL Managing Partner & Chief Financial Officer SoftBank Investment Advisers
Slide 67: Important Information (1 of 2)
2 Important Information (1 of 2) This presentation (this “Presentation”) is furnished to you for informational purposes in connection with the interests of SoftBank Group Corp. (together with its affiliates, “SoftBank”) in SoftBank Vision Fund L.P. (together with, as the context may require, any par
Slide 68: Important Information (2 of 2)
3 Important Information (2 of 2) Vision Fund I performance herein is based on unrealized valuations of portfolio investments. Valuations of unrealized investments are based on assumptions and factors (including, for example, as of the date of the valuation, average multiples of comparable companies,
Slide 69: Topics
4 Topics 01- Progress & Highlights 02- Performance & Impact on SoftBank Group 03- In Focus: Valuations Update
Slide 70: Progress & Highlights
Progress & Highlights Investment Advisers
Slide 71: Key Developments
6 Investments Funded1 Acquisition Cost2 Recent IPOs3 PROGRESS & HIGHLIGHTS Key Developments Three-Month Period Ended 21 $4.2B December 31, 2019 Footnotes: 1. Investments Funded include follow-on investments and subsequent tranches of funding in Vision Fund I’s existing portfolio companies. 2. Acquis
Slide 72: Vision Fund I Snapshot
7 SoftBank SoftBank Vision Fund I Group Total Commitment Total Commitment $98.6B $28.1 B PROGRESS & HIGHLIGHTS Acquisition Cost1 SBG Paid-In Capital SoftBank $80.5B $22.9B Vision Fund I: Cumulative Investment Gains1 SBG Total Value3 Snapshot $9.5B $25.6B As of December 31, 2019 Distributions2 SBG Di
Slide 73: Growth of our Portfolio: Vision Fund I
8 91 INVESTMENTS 1 ,2 Cumulative $9.5B 56 Investment Gains1 PROGRESS & HIGHLIGHTS INVESTMENTS 1 ,2 Growth of $12.9B our Portfolio: Acquisition Vision Fund I $80.5B Cost1,2 $46.7B Dec 31, 2018 Dec 31, 2019 Footnotes: 1. Acquisition Cost, Number of Investments, and Cumulative Investment Gains are cumu
Slide 74: Growing Portfolio of Market Leaders
PROGRESS & HIGHLIGHTS 9 Growing Portfolio of Market Leaders As of December 31, 2019 Investments included herein were held by Vision Fund I as of December 31, 2019. The investments presented herein are solely for illustrative purposes, have been selected in order to demonstrate examples of Vision Fun
Slide 75: Portfolio Composition By Sector
PROGRESS & HIGHLIGHTS 10 Portfolio Composition By Sector As of December 31, 2019 Frontier Health Real Transportation Consumer Enterprise Fintech Tech Tech Estate & Logistics 19% 4% 7% 14% 6% 10% 40% COST $10.8B $2.5B $4.9B $10.8B $2.7B $10.1B $33.0B FAIR VALUE $15.4B $3.5B $5.6B $11.0B $4.8B $7.9B $
Slide 76: Portfolio Composition By Geography and Sector: Americas
PROGRESS & HIGHLIGHTS 11 Portfolio Composition By Geography and Sector As of December 31, 2019 Transportation Frontier Tech Health Tech Enterprise & Logistics Consumer Real Estate Fintech Americas 38% Information herein is presented solely for Vision Fund I and does not include investments in Flipka
Slide 77: Portfolio Composition By Geography and Sector: EMEA, Asia
PROGRESS & HIGHLIGHTS 12 Portfolio Composition By Geography and Sector As of December 31, 2019 Transportation & Consumer Transportation Logistics & Logistics Consumer Real Estate Enterprise Fintech Real Estate Fintech EMEA Asia Frontier Tech Health Tech 14% 48% Information herein is presented solely
Slide 78: Public Listings Since Inception
PROGRESS & HIGHLIGHTS 13 8 Public Listings Since Inception As of December 31, 2019 NASDAQ: GH HKG: 1833 NYSE: WORK NASDAQ: TXG STOCK PRICE1 $78.14 $56.85 HKD $22.48 $76.25 GROSS 7.1x 1.2x 2.5x 9.4x MOIC2 NYSE: UBER NASDAQ: VIR HKG: 6060 NYSE: OCFT STOCK PRICE1 $29.74 $12.58 $28.10 HKD $10.03 GROSS 0
Slide 79: Performance & Impact on SoftBank Group
14 Performance & Impact on SoftBank Group
Slide 80: Contribution to SBG, Nine-Month Period Ended December 31, 2019
15 Nine-Month 2018 2019 Period Ended December 31 December 31 Fund Net Profit (Loss)2 $6.49 $(6.20) PERFORMANCE & IMPACT ON SBG Less: Change in third party Contribution to interests in funds (4.43) 3.28 SBG, Net of 3rd SBG LP Income (Loss): $2.06 $(2.92) Share of Fund Net Profit (Loss) Party Interest
Slide 81: Contribution to SBG, Fund Inception to December 2019
16 Fund 2019 Inception to December 31 Fund Net Profit2 $4.60 PERFORMANCE & IMPACT ON SBG Less: Change in third party Contribution to interests in funds (2.34) SBG, Net of 3rd SBG LP Income: $2.26 Share of Fund Net Profit Party Interests1 SBG GP Income: Amounts in USD Billions 0.72 Management Fees &
Slide 82: Contribution to SBG, Realized and Unrealized Values
17 Total Value PERFORMANCE & IMPACT ON SBG Paid-In Capital $25.6B Contribution to $22.9B SBG, Realized and Unrealized Values As of December 31, 2019 Net Asset Value1 Distributions2 Performance (Unrealized Value) (Realized Value) Fees3 $23.5B $1.7B $0.4B Footnotes: 1. Net Asset Value includes net cha
Slide 83: In Focus: Valuations Update
18 In Focus: Valuations Update
Slide 84: Vision Fund I: Measurable Value in Our Portfolio
IN FOCUS: VALUATIONS UPDATE 19 Vision Fund I: Measurable Value in Our Portfolio As of December 31, 2019 Realized Investments Unrealized Investments Gross Realized Gains1 Total Acquisition Cost1 Gross Unrealized Gains1,3 Total Fair Market Value1,3 $4.5B $74.8B $5.0B $79.8B Number of Portfolio Compani
Slide 85: Measurable Value in Our Portfolio (Year-over-Year)
IN FOCUS: VALUATIONS UPDATE 20 Vision Fund I: Measurable Value in Our Portfolio (Year-over-Year) Public Investment Value1 Private Investment Value1 $73.2B Cumulative $5.2B Investment Gains2 $52.4B $9.8B Acquisition $68.0B $16.8B Cost2 Cumulative $4.3B Investment $42.6B $7.2B Gains2 $12.5B Acquisitio
Slide 86: Portfolio Fair Value Changes
21 No. of Portfolio Companies1 Since Inception Three-Months Ended IN FOCUS: VALUATIONS UPDATE Portfolio Fair Value With Uplifts2,3 38 22 Changes As of December 31, 2019 With Writedowns2,3 31 27 Footnotes: 1. No. of Portfolio Companies with Uplifts and with Write Downs include Flipkart and Nvidia whi
Slide 87: Quarterly Valuation Process
IN FOCUS: VALUATIONS UPDATE 22 Quarterly Valuation Process 6-Week Parallel Workflows Between SBIA Valuations Team and Independent Valuers 1 Valuation Results for Vision Fund I Quarterly SBIA Valuation Process As of December 31, 2019 Management Calls Financial Model Independent Valuer Range1 Data wit
Slide 88: Triangulation of Valuation Methodologies
23 Income Approach Fundamental Analysis Discounted Cash Flows IN FOCUS: VALUATIONS UPDATE Triangulation of Valuation Valuation Methodologies Methodologies Market Approach Recent Transaction Comparable Company Multiples Approach Guideline Company Transactions Follow-On Rounds of Financing Footnotes:
Slide 89: Valuations Validated by Participating Co-Investors
24 IN FOCUS: VALUATIONS UPDATE 130+ Participating1 Co-Investors 96% at Same Valuations Validated or Higher Valuations by Participating Co-Investors 91 Initial 48 Follow-On Since Inception to Investments Rounds December 31, 2019 Footnotes: 1. Participating co-investors includes both institutional and
Slide 90: Examples of Third-Party Validation
IN FOCUS: VALUATIONS UPDATE 25 Examples of Third-Party Validation Pre-Money Valuations $15.0B $12.0B Series G Series G $10.0B $6.7B Series F Series F1 $3.8B $6.0B Series E Series F $0.9B Series D 2017 2018 2019 2018 2018 2019 2019 Sep Sep Nov Apr Aug Feb May Information is provided solely for illust
Slide 91: Wrap-Up
26 Wrap-Up 01- Progress & Highlights 02- Performance & Impact on SoftBank Group 03- In Focus: Valuations Update
Slide 92: Thank You
Thank You == SoftBank Investment Advisers
Slide 93: SoftBank
SoftBank