Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2017
Earnings Results for the Fiscal Year Ended March 31, 2017 May 10, 2017
Slide 2: 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 3: Important Notice to Recipients
Important No+ce to Recipients Neither So*Bank nor any of its applicable affiliates makes any representa8ons or warran8es, express or implied, as to the accuracy or completeness of the informa8on in this presenta8on (this “Presenta+on”), other than the historical financial performance set forth herein.
Slide 4: SoftBank = Goose that lays the golden eggs?
SoftBank = Goose that lays the golden eggs? 2
Slide 5: Consolidated Results
— Consolidated a softBank Results ———EE
Slide 6: Consolidated Results
Consolidated Results (JPY bn) FY2015 FY2016 Change YoY Net sales 8,881.8 8,901.0 +19.2 +0.2% Adjusted EBITDA 2,325.2 2,564.5 +239.3 +10% EBIT 908.9 1,026.0 +117.1 +13% Net income 474.2 1,426.3 +952.1 +201% Net income: net income attributable to owners of the parent 4
Slide 7: Net Sales
Net Sales Up 0.2% Net Sales (JPY bn) 8,881.8 8,901.0 112.9 ARM Earnings reflected since Sept. 6, 2016 Sprint 3,871.6 3,623.4 Impact of strong yen (-JPY 387.8bn) Distribution & other 1,213.4 1,117.5 Yahoo Japan 652.0 853.5 Consolidation of ASKUL Exchange rate: Yen/Dollar FY2015 FY2016 Domestic Telco
Slide 8: Net Sales (Ref.: Dollars)
Net Sales (Ref.: Dollars) Up 11% Net Sales (USD bn) 82.0 1.0 ARM 73.9 Earnings reflected since Sept. 6, 2016 Sprint 33.3 32.2 10.3 Distribution & other 10.1 Yahoo Japan 7.9 5.4 Consolidation of ASKUL Exchange rate: Yen/Dollar FY2015 FY2016 Domestic Telco Q1 121.34 109.07 26.1 29.4 Increase in teleco
Slide 9: Adjusted EBITDA 2.6t
Adjusted EBITDA 2.6t (JPY) Up 10% 2.3t 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 *FY2013-14: excluding impact of GungHo & Supercell 7
Slide 10: Adjusted EBITDA
Adjusted EBITDA (JPY bn) 2,564.5 ARM 53.1 Up 10% 2,325.2 Sprint 1,079.6 Cost reduction effort 983.3 Impact of strong yen (-JPY 114.8bn) 239.5 Yahoo Japan 196.0 Exchange rate: Yen/Dollar Domestic Telco FY2015 FY2016 1,163.3 1,209.0 Revenue increase Q1 121.34 109.07 & cost reduction effort Q2 121.91 1
Slide 11: Adjusted EBITDA (Ref.: Dollars)
Adjusted EBITDA (Ref.: Dollars) Up 23% Net Sales (USD bn) 23.7 ARM 0.5 19.3 Sprint 9.9 Cost reduction effort 8.2 2.2 Yahoo Japan 1.6 Exchange rate: Yen/Dollar Domestic Telco FY2015 FY2016 11.2 Revenue increase Q1 121.34 109.07 9.7 & cost reduction effort Q2 121.91 102.91 Q3 121.07 108.72 Q4 116.95 1
Slide 12: EBIT 1,026.0
EBIT 1,026.0 (JPY bn) Up 13% 908.9 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 (FY) *FY2013-2014: excluding impact of GungHo & Supercell *FY2013: excluding one-time gain from consolidation of WILLCOM 10
Slide 13: EBIT
EBIT (JPY bn) 908.9 1,026.0 ARM 12.9 186.4 Sprint Up 13% Impact of strong yen (-JPY 21.8bn) 61.5 Yahoo Japan One-time gain from consolidation of ASKUL 59.4 Disaster loss (ASKUL) -13.0 189.8 JPY 202.8bn (+24%) 163.4 719.6 Domestic Telco Exchange rate: Yen/Dollar 688.4 FY2015 FY2016 Revenue increase &
Slide 14: EBIT (Ref.: Dollars)
EBIT (Ref.: Dollars) (USD bn) 9.60.1 1.7 ARM Sprint Up 27% 7.5 Disaster loss (ASKUL) -0.1 Yahoo Japan 0.5 One-time gain from consolidation 1.8 $1.9bn of ASKUL 0.5 1.4 Domestic Telco Exchange rate: Yen/Dollar 6.7 5.7 FY2015 FY2016 Revenue increase & cost reduction effort Q1 121.34 109.07 Q2 121.91 10
Slide 15: 3rd Japanese company to reach milestone
Years to Achieve JPY 1t EBIT *Excluding impact of GungHo & Supercell (CY) 1880 1900 1920 1940 1960 1980 2000 2020 118 years NTT Group Founded in 1885 (MCT) FYE March 2003 65 years Founded in 1937 FYE March 2002 36 years * Founded FYE March 2017 in 1981 3rd Japanese company to reach milestone 13
Slide 16: Net Income JPY 1.4t
Net Income JPY 1.43t JPY 1.4t JPY 474.2 bn 2003 ’07 ’11 ’15 ’16 (FY) *FY2013-2014: including impact of GungHo & Supercell 14
Slide 17: 2nd Japanese company to reach milestone
Years to Achieve JPY 1t Net Income (CY) 1900 1920 1940 1960 1980 2000 2020 67 years Founded in 1937 FYE March 2004 36 years Founded FYE March 2017 in 1981 2nd Japanese company to reach milestone (Note) Operating companies excluding financial institutions 15
Slide 18: Financial Status
Financial Status Domestic Telco Other (Incl. Sprint acquisition cost) etc. Net interest- Net interest- JPY bearing debt JPY 3.6t bearing debt 4.4t EBITDA JPY 1.2t 3.0x Equity value of JPY 25% holdings 17.9t *Net interest-bearing debt as of Mar. 31, 2017, EBITDA FY16, Market cap of listed holdings as
Slide 19: Leverage Ratio (Major Mobile Operators in Europe or the U.S.)
Leverage Ratio (Major Mobile Operators in Europe or the U.S.) 4.7x Source: S&P Capital IQ net interest-bearing debt / EBITDA (latest 12 months) 3.6x 3.4x 3.5x 2.9x 3.0x 2.9x 2.6x 2.6x 2.5x 2.2x Orange AT&T T-Mobile Verizon Deutsche Telia Telefónica Telecom Vodafone SFR Telekom Italia 17
Slide 20: Domestic Telco
ea OOftBank Domestic Telco
Slide 21: EBIT Domestic Telco
EBIT Domestic Telco (JPY bn) 719.6 688.4 Up 5% *FY2011: JGAAP, FY2012-2016: IFRSs After FY2014: Domestic Telecommunications segment Up to FY2013: Mobile Communications segment + Fixed-line segment 2011 ’12 ’13 ’14 ’15 ’16 (FY) + Broadband Infrastructure segment 19
Slide 22: Enhanced efficiency
EBITDA Margin Domestic Telco 55% Enhanced 27% efficiency *Mobile business *EBITDA margin = EBITDA / service revenue 2002 ’04 ’06 ’08 ’10 ’12 ’14 ’16 (FY) *Service revenue = wireless revenue - equipment revenue 20
Slide 23: Global No.1 EBITDA Margin
EBITDA Margin (FY2016) Domestic Telco SoftBank 55% Verizon 54% AT&T 49% China Mobile 41% Global No.1 NTT DOCOMO 38% Source: companies’ disclosures *Mobile business of each company *EBITDA margin = EBITDA / service revenue *Service revenue = wireless revenue - equipment revenue Telecom operators with
Slide 24: Cumulative Subs (Main Subscribers)
Cumulative Subs (Main Subscribers) EBIT Domestic Telco 32.04m 32.4m Up 360k 2014 ’15 ’16 (FY) *Main subscribers: smartphones + feature phones Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 + tablets + mobile data communication devices and others 22
Slide 25: Cumulative Subs (FTTH Service)
Cumulative Subs (FTTH Service) Domestic Telco 3.59m 2x 1.72m 2014 ’15 ’16 (FY) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *SoftBank Hikari includes the data of SoftBank Air. 23
Slide 26: Free Cash Flow Domestic Telco
Free Cash Flow Domestic Telco (JPY bn) 561.8 +159.6 550bn (revised target) 500bn (original target) Up 40% 402.2 +288.9 113.3 *Free Cash Flow = operating cash flow + investing free cash flow 2014 2015 2016 (FY) *IFRSs excluding eliminations within SoftBank Group Corp. 24
Slide 27: Global No.1 FCF/Revenue Ratio
FCF/Revenue Ratio (FY2016) Domestic Telco SoftBank 23% NTT DOCOMO 17% Verizon 11% AT&T 10% Global No.1 China Mobile 9% Source: companies’ disclosures *Free Cash Flow = operating cash flow + investing cash flow *Service revenue = wireless revenue - equipment revenue Free cash flow of NTT DOCOMO exclu
Slide 28: FY2017 Forecast Domestic Telco
FY2017 Forecast Domestic Telco 1 Continuous profit growth for 13 consecutive periods 2 FCF at same level as FY2016 3 Expand synergies with Yahoo Japan *Toward 13 consecutive periods: after FY2014 in Domestic Telecommunications segment Up to FY2013: total of Mobile Communications segment + Fixed-line
Slide 29: Sprint
Sprint »
Slide 30: Net Additions (Postpaid Phone)
Net Additions (Postpaid Phone) 930k 437k More than double 2013 ’14 ’15 ’16 (FY) *Sprint platform 28
Slide 31: Churn (Postpaid Phone)
Churn (Postpaid Phone) Best in Sprint history 1.52% 1.48% 1.0% 2013 ’14 ’15 ’16 (FY) *Sprint platform 29
Slide 32: Net Operating Revenue
Net Operating Revenue USGAAP (USD bn) 33.3 Up 4% 32.2 2013 ’14 ’15 ’16 (FY) 30
Slide 33: Cost Reduction
Cost Reduction USGAAP (USD bn) 19.2 15.9 $3.4bn reduction in 2 years SG&A Cost of service 2014 2015 2016 (FY) 31
Slide 34: Adjusted EBITDA
Adjusted EBITDA USGAAP (USD bn) 9.9 Joined SoftBank Group Double 5.1 in 4 years 2012 ’13 ’14 ’15 ’16 (FY) 32
Slide 35: Operating Income
Operating Income USGAAP (USD bn) 1.8 Joined 6x SoftBank Group 0.3 2012 ’13 ’14 ’15 ’16 (FY) 33
Slide 36: Adjusted Free Cash Flow
Adjusted Free Cash Flow USGAAP (USD bn) Positive Joined SoftBank Group 0.6 *Adjusted FCF: the cash provided by operating activities + the cash used in investing activities 2012 ’13 ’14 ’15 ’16 (FY) (excluding short-term investments) + the proceeds from sales of future lease receivables, net of repay
Slide 37: Liquidity
Liquidity USGAAP (USD bn) 12.1 1.2 Sufficient Vendor financing Receivables/ device financing 0.8 level Revolver 1.8 General purpose liquidity 10.9 5.0 Other repayments Cash 8.3 Network equipment + cash equivalent 1.9 financing + short-term investments 0.4 Receivables/ device financing 2.4 Note matur
Slide 38: Toward No.1 or No.2 Network
Toward No.1 or No. 2 Network 36
Slide 39: Voice Performance
Voice Performance 86.4 90.1 84.6 67.2 No.2 nationwide (2H 2016) T-Mobile AT&T Sprint Verizon Source: RootMetrics 37
Slide 40: Voice Performance
Voice Performance 107 108 Most 67 voice awards in metro 32 (2H 2016) T-Mobile AT&T Verizon Sprint Source: RootMetrics 38
Slide 41: LTE Key to Success
LTE Key to Success × Spectrum Advantage Innovative Tools 39
Slide 42: Spectrum Advantage
Spectrum Advantage 2.5GHz Higher capacity & coverage Capacity with HPUE 1.9GHz Capacity & coverage 800MHz Coverage Coverage 40
Slide 43: HPUE
HPUE UL data throughput (Mbps) Non-HPUE Distance from site 41
Slide 44: HPUE
HPUE UL data throughput (Mbps) HPUE extends HPUE 2.5GHz coverage (99% of 1.9GHz) Non-HPUE LG Samsung ZTE G6 Galaxy S8 | S8+ Max XL Distance from site 42
Slide 45: Innovative Tools
Innovative Tools Mini Macro Air Pole Strand Mount Magic Box Femto 43
Slide 46: Innovative Tools
Innovative Tools Macro (800MHz, 1.9GHz, 2.5GHz) Magic Strand Box Mount Macro Coverage Magic Box Dense Magic Femto Box Femto Strand Mount Air Pole Rural Mini Macro Residential Millions of small cells 44
Slide 47: Magic Box
Magic Box Magic Box Sprint LTE near window n a l s ig i ng ti m u l & c kha b a LT E Indoor Outdoor 45
Slide 48: Magic Box
Magic Box Ey Sprint » magichox
Slide 49: Magic Box (Metro)
Magic Box (Metro) Magic Box 47
Slide 50: Magic Box (Residential)
Magic Box (Residential) Magic Box Magic Box Magic Box Magic Box Magic Box Neighborhood coverage of Magic Box 48
Slide 51: Benchmarks of 6 Market Areas
Benchmarks of 6 Market Areas 49
Slide 52: Benchmarks of 6 Market Areas
Benchmarks of 6 Market Areas San New York Chicago Denver Indianapolis Houston Francisco Overall #1* #1* #1 #1 #1* #2* Web browsing #1* #1* #1* #1 #1* #2* File download #2 #2 #1* #1 #1* #1* YouTube App #1* #1 #1 #1 #1* #2 *Denotes ties Source: P3 50
Slide 53: New York (Manhattan-Midtown)
Sprint New York (Manhattan-Midtown) AT&T T-Mobile Verizon Average Download Speed (Ookla) 60Mbps Mar. 16 Apr. 11 Based on Sprint’s analysis of Ookla's Speedtest Intelligence data from 03/10/17 to 04/10/17 Test Area Overall Performance (P3) #1* *Denotes ties 51
Slide 54: San Francisco (Golden Gate Park-Balboa-Mission District)
Sprint San Francisco (Golden Gate Park-Balboa-Mission District) AT&T T-Mobile Verizon Average Download Speed (Ookla) 60Mbps Mar. 16 Apr. 11 Based on Sprint’s analysis of Ookla's Speedtest Intelligence data from 03/10/17 to 04/10/17 Test Area Overall Performance (P3) #1* *Denotes ties 52
Slide 55: Chicago (Downtown Lombard Cluster)
Sprint Chicago (Downtown Lombard Cluster) AT&T T-Mobile Verizon Average Download Speed (Ookla) 100Mbps Mar. 16 Apr. 11 Based on Sprint’s analysis of Ookla's Speedtest Intelligence data from 03/10/17 to 04/10/17 Test Area Overall Performance (P3) #1 53
Slide 56: Denver (Downtown Cluster)
Sprint Denver (Downtown Cluster) AT&T T-Mobile Verizon Average Download Speed (Ookla) 60Mbps Mar. 16 Apr. 11 Based on Sprint’s analysis of Ookla's Speedtest Intelligence data from 03/10/17 to 04/10/17 Overall Performance (P3) Test Area #1 54
Slide 57: Toward No.1 or No.2 Network
Toward No.1 or No. 2 Network 55
Slide 58: Sprint = SoftBank
QuALCONW\ Sprint = SoftBank
Slide 59: FY2017 Forecast: Sprint
FY2017 Forecast 1 Adjusted EBITDA $10.7-11.2bn 2 Operating income $2-2.5bn 3 Cash CAPEX $3.5-4bn *Cash CAPEX excluding the CAPEX associated with purchasing leased devices in indirect channels 57
Slide 60: Yahoo Japan
YAHOO! JAPAN
Slide 61: Advertising Revenue
Advertising Revenue (JPY bn) 78.6 71.7 37.0 41.2 (+11%) Display ads Up 10 37.3 Search 34.6 (+8%) ads (FY) 2013 ’14 ’15 ’16 (FY) Q4 Q4 Q4 Q4 59
Slide 62: Yahoo! Shopping # of Merchants
Yahoo! Shopping # of Merchants ショッピング 510k ＜赤＞ PANTONE 185 DIC 156 M91%+Y76% R255・G0・B51 ＜グレー＞ PANTONE Cool Gray 11 DIC 541 BL80% #545454 Gray ●2行ロゴ リンク用ロゴなどスペースが狭い場合に使用できます。 25x in 4 years ショッピング ショッピング ●その他色指定 白抜き利用の場合（背景色は任意） ※紫ロゴは原則使用しないでください。 ＜紫＞ ショッピング PANTONE 259 DIC 227 C65%+M100%+K15% R123・
Slide 63: Shopping Transaction Value
Shopping Transaction Value ショッピング (JPY bn) 137.0 ＜赤＞ ＜グレー＞ PANTONE 185 PANTONE Cool Gray 11 DIC 156 DIC 541 M91%+Y76% BL80% R255・G0・B51 #545454 Gray ●2行ロゴ リンク用ロゴなどスペースが狭い場合に使用できます。 Up 21 112.8 ショッピング ショッピング ●その他色指定 白抜き利用の場合（背景色は任意） ※紫ロゴは原則使用しないでください。 ＜紫＞ ショッピング PANTONE 259 DIC 227 C65%+M100%+K15% R1
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62
Slide 65: Revenue (ARM)
Revenue (JPY bn) 184.2 Up 8% 170.0 ($1.69bn) ($1.56bn) FY2015 FY2016 (Apr. 2015 - Mar. 2016) (Apr. 2016 - Mar. 2017) *USD 1 = JPY 109.03 (average exchange rate of April 2016 – March 2017) 63
Slide 66: ARM-based Chips Shipped (Per Year)
ARM-based Chips Shipped (Per Year) 17.7bn 15.1bn Up 17% 1990 ’93 ’96 ’99 ’02 ’05 ’08 ’11 ’14 ’16 (FY) 64
Slide 67: ARM-based Chips Shipped Cumulative
ARM-based Chips Shipped Cumulative 200bn (forecast) Accelerated growth 100bn 50bn 1991 2013 2017 2021 (CY) 22 4 4 years years years *Cumulative number of ARM-based chips shipped per year 65
Slide 68: Technical Headcount
Technical Headcount 3,960 3,262 Up 21% 2015 2016 (FYE) *Number of technical employees 66
Slide 69: Multi-core redefined
Greater flexibility for optimal performance New single cluster design with reduced latency Multi-core redefined 67
Slide 70: Accelerating AI adoption everywhere
Dedicated processor for AI Accelerators 50x boost in 10x quicker response AI performance Accelerating AI adoption everywhere 68
Slide 71: Strategic Progress: Mobile
Strategic Progress: Mobile Up 18% YoY Further expansion with latest technology AI, Deep Learning, VR etc. ARMv8-A Mali Octacore Up 3% YoY Smartphone shipments Royalty revenue * (Worldwide) (Smartphones) *Royalty revenues from the main application processors in smartphones (Note) CY 2016 vs CY 2015 c
Slide 72: Strategic Progress: Networking & Servers
Strategic Progress: Networking & Servers Microsoft announced that ARM could be deployed in over half of data center servers 70
Slide 73: Various IoT products incorporating ARM
VR glasses Various IoT products incorporating ARM Robotic vacuum RHEME Wireless cardio cleaner monitor *Radiation Hardened Electronic Memory Experiment 71
Slide 74: FY2017 Forecast: ARM
FY2017 Forecast 1 Create new IoT opportunities 2 Gain more share in long-term growth markets 3 Accelerate investment in new technology 72
Slide 75: Enterprise Value
— Enterprise ~— SoftBank Value ———EE
Slide 76: SoftBank = Goose that lays the golden eggs?
SoftBank = Goose that lays the golden eggs? 74
Slide 77: JPY 2t increase
(JPY t) USD 1 = JPY 113.28 Domestic Telco business: EBITDA x 6.0x GBP 1 = JPY 146.63 ARM: SBG’s acquisition cost (As of May 9, 2017) Net interest-bearing debt: excl. Sprint & Yahoo Japan JPY 2t increase 8 6 Mar. 2015 May 2017 Net interest-bearing debt 75
Slide 78: JPY 7t increase
(JPY t) JPY 7t 25 USD 1 = JPY 113.28 Domestic Telco business: EBITDA x 6.0x GBP 1 = JPY 146.63 ARM: SBG’s acquisition cost increase 1 (As of May 9, 2017) Net interest-bearing debt: excl. Sprint & Yahoo Japan 4 ARM 1 18 Other 1 3 Yahoo Japan 1 Sprint 2 9 Alibaba 8 7 8 Domestic Telco 6 6 Mar. 2015 May
Slide 79: JPY 5t increase
(JPY t) USD 1 = JPY 113.28 Domestic Telco business: EBITDA x 6.0x GBP 1 = JPY 146.63 ARM: SBG’s acquisition cost (As of May 9, 2017) Net interest-bearing debt: excl. Sprint & Yahoo Japan JPY 5t increase 25 18 17 12 8 6 Mar. 2015 May 2017 Mar. 2015 May 2017 Mar. 2015 May 2017 Enterprise value Net int
Slide 80: Market cap JPY 9t? JPY 17t
Market cap JPY 9t? - SPY 17t > rn
Slide 81: SoftBank Group's Shareholder Value
SoftBank Group’s Shareholder Value 17 (JPY t) 12 10 5 4 3 2 1 0 (FYE) ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 (May 2017) 79
Slide 82: Track Record
(Source) Calculated by SoftBank Group Corp. based on S&P Capital IQ data (as of May 9, 2017) Track Record USD 1 = JPY 114.1 Incl. leverage (Sprint): excluding funds procured at time of acquisition (JPY 1.65t) from accumulated investment and cumulative return (Vodafone K.K.) $90bn $12bn $43bn $8bn IR
Slide 83: Investment Track Record: IRR 44%
Investment Track Record Internet companies (incl. SBM/Sprint) $175bn IRR 44% (18 years) 15x (Japan) $11bn Accumulated investment Accumulated return *1 USD 1 = JPY 114.1, as of May 9, 2017 *2 Includes SoftBank Mobile Business (former Vodafone Japan) and Sprint (1999 - May 2017) As of May 9, 2017, exc
Slide 84: SoftBank = Goose that lays the golden eggs
SoftBank = Goose that lays the golden eggs Value of Goose? JPY 17t 82
Slide 85: To Further Evolution by SoftBank Vision Fund
To Further Evolution by SoftBank Vision Fund 83
Slide 86: Internet
Internet -Information industry innovation- Advertising model Charging model Information Platform Business (People driven data) (Search engine/portal etc.) model 84
Slide 87: SINGULARITY: Birth of Super Intelligence
SINGULARITY -Birth of Super Intelligence- IoT 1 trillion Big data AI (90% ARM based) (Cloud) (Super intelligence) "85
Slide 88: SINGULARITY: Innovation in all industries
SINGULARITY -Innovation in all industries- Super Intelligence 86
Slide 89: Accelerate Information Revolution: SoftBank Vision Fund
Accelerate Information Revolution SoftBank Vision Fund "87
Slide 90: SoftBank Vision Fund
SoftBank Vision Fund Approx. JPY 10t * *Target size 88
Slide 91: SoftBank = Flying Golden Goose
SoftBank = Flying Golden Goose "89
Slide 92: SoftBank
SoftBank
Slide 93: Adoption of IFRSs; Definition of terms; Trademarks
1. Adoption of IFRSs SoftBank Group Corp. adopted the International Financial Reporting Standards (IFRSs) from fiscal 2013. Figures for fiscal 2012 have also been presented in accordance with IFRSs. 2. Definition of terms etc. in this material. Free cash flow = cash flows from operating activities +