Softbank Group Corp. · TSE:9984
Softbank — Q1 FY2010 Earnings Presentation
88 slides from Softbank's earnings presentation, Jul 29, 2010
Slide 1: Earnings Results for the Three-month Period Ended June 30, 2010
Earnings Results for the Three-month Period Ended June 30, 2010 (April to June 2010) July 29, 2010 SOFTBANK CORP. Aug. 2, 2010 Version
Slide 2: Disclaimer
Disclaimer This presentation was prepared based on information available and views held at the time it was made. Statements in this presentation that are not historical facts, including, without limitation, plans, forecasts and strategies are “forward-looking statements”. Forward-looking statements
Slide 3: Record High Revenue and Profit
Record High Revenue and Profit 1) Net sales increased 5%, record high for 2 consecutive periods 2) Operating income increased 45%, record high for 5 consecutive periods 3) Significant increases in subscribers and ARPU in Mobile Communications 2
Slide 4: Consolidated Earnings Results
Consolidated Earnings Results 3
Slide 5: Summary of Consolidated Earnings Results
Summary of Consolidated Earnings Results (bn JPY) FY09/Q1 FY10/Q1 Increment YoY (Apr. - June 09) (Apr. - June 10) Net sales 666.3 700.8 +34.5 105% EBITDA 184.8 227.2 +42.4 123% Operating income 108.2 156.6 +48.3 145% Ordinary income 78.7 126.8 +48.0 161% Net income 27.3 19.4 (7.9) 71% 4
Slide 6: Competitors' Comparison
Competitors’ Comparison (Versus FY09/Q1) (bn JPY) KDDI NTT DOCOMO Consolidated net sales (YoY) +34.5 +12.2 +4.4 Consolidated operating income +48.3 (12.5) (11.3) (YoY) Revenue and profit Revenue increase Revenue increase increases and profit decrease and profit decrease 5 *Created by SOFTBANK CORP.
Slide 7: Operating Income Comparison
Operating Income Comparison (YoY) (bn JPY) +48.3 0 -139 -11.3 -12.5 GS NTT DOCOMO KDDI SOFTBANK 6 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 8: Consolidated Operating Income (Apr. - June)
Consolidated Operating Income (Apr. - June) (bn JPY) 200 156.6 SOFTBANK 150 129.2 KDDI 100 50 0 -50 05 06 07 08 09 10 (FY) *Created by SOFTBANK CORP. based on KDDI’s 7 Q1 Q1 Q1 Q1 Q1 Q1 publicly available information.
Slide 9: Consolidated Net Sales (Apr. - June)
Consolidated Net Sales (Apr. - June) (bn JPY) 666.3 700.8 Record high 5% increase 407.2 441.0 Mobile Communications 53.4 49.3 Broadband Infrastructure 86.7 85.8 Fixed-line Telecommunications 65.1 68.4 Internet Culture 0 Others FY09 FY10 Q1 Q1 8 *The figures for each segment exclude the amounts of in
Slide 10: Consolidated EBITDA (Apr. - June)
Consolidated EBITDA (Apr. - June) (bn JPY) 227.2 184.8 Record high 153.2 23% increase 117.1 Mobile Communications 16.2 Broadband Infrastructure 17.8 14.6 17.9 Fixed-line Telecommunications 34.9 38.1 Internet Culture 0 Others FY09 FY10 1 1 9
Slide 11: Consolidated EBITDA: Record high for 7 consecutive periods
Consolidated EBITDA (Apr. - June) (bn JPY) 227.2 184.8 Record high 149.7 161.4 for 7 consecutive 104.3 periods 23% increase 19.5 6.0 0 -16.6 03 04 05 06 07 08 09 10 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 10
Slide 12: Consolidated Operating Income by segment
Consolidated Operating Income (Apr. - June) (bn JPY) 156.6 Record high 108.2 102.6 45% increase Mobile Communications 60.2 11.6 Broadband Infrastructure 13.7 6.6 3.5 Fixed-line Telecommunications 32.1 35.5 Internet Culture 0 Others FY09 FY10 1 1 11
Slide 13: Consolidated Operating Income: Record high for 5 consecutive periods
Consolidated Operating Income (Apr. - June) (bn JPY) 156.6 Record high for 108.2 5 consecutive 78.7 85.0 periods 54.3 45% increase 0 -3.1 05 06 07 08 09 10 (FY) Q1 Q1 Q1 Q1 Q1 Q1 12
Slide 14: Consolidated Ordinary Income (Apr. - June)
Consolidated Ordinary Income (Apr. - June) (bn JPY) 126.8 Record high for 78.7 5 consecutive 51.1 54.2 periods 25.9 61% increase 0 -13.0 05 06 07 08 09 10 Q1 Q1 Q1 Q1 Q1 Q1 13
Slide 15: Consolidated Ordinary Income/Net Income
Consolidated Ordinary Income/Net Income FY09/Q1 FY10/Q1 () Notes (Apr. - June 09) (Apr. - June 10) Ordinary income 78.7 126.8 Special income/loss (net) 0.3 (8.6) Asset retirement obligations, etc. Income before income taxes and minority interests 79.1 118.1 Income tax: Current 19.8 34.1 Income tax -
Slide 16: Consolidated Net Income (Apr. - June)
Consolidated Net Income (Apr. - June) (bn JPY) Impact of correction and ruling notice received by Yahoo Japan 27.3 24.7 19.4 0 09 10 (FY) Q1 Q1 15
Slide 17: Owning Data Centers is Common Sense Amongst Leading Global IT Companies
Owning Data Centers is Common Sense Amongst Leading Global IT Companies Google Amazon.com Microsoft Yahoo! Inc. Alibaba Group etc... 16
Slide 18: Acquisition of SOFTBANK IDC Solutions by Yahoo Japan
Acquisition of SOFTBANK IDC Solutions by Yahoo Japan Business necessity 1. Cloud deployment 2. Service enhancement 3. Significant cost reduction 17
Slide 19: Financial Status
Financial Status 18
Slide 20: Operating Cash Flow (Apr. - June)
Operating Cash Flow (Apr. - June) (bn JPY) 132.0 132.9 52.8 Steady trend 0 -27.4 07 08 09 10 (FY) Q1 Q1 Q1 Q1 19
Slide 21: Operating Cash Flow (Apr. - June) with tax detail
Operating Cash Flow (Apr. - June) (bn JPY) 49.6 Tax at SOFTBANK MOBILE 46.4 Tax at Yahoo Japan 14.5 3.5 132.9 132.0 52.8 Steady trend 0 -27.4 07 08 09 10 (FY) Q1 Q1 Q1 Q1 20 *Tax at SOFTBANK MOBILE: BB Mobile income tax under consolidated tax return.
Slide 22: Consolidated CAPEX
Consolidated CAPEX (bn JPY) 389.8 400.0 293.7 259.0 222.9 314.8 Mobile Communications 25.1 Broadband Infrastructure 44.9 Fixed-line Telecommunications 0 Internet Culture 2010 (FY) 2006 2007 2008 2009 (plan) 21 *Acceptance base, including CAPEX through finance leases.
Slide 23: Consolidated Free Cash Flow (Apr. - June)
Consolidated Free Cash Flow (Apr. - June) (bn JPY) 56.5 57.7 0 -37.8 Steady trend -138.9 07 08 09 10 (FY) Q1 Q1 Q1 Q1 22
Slide 24: Consolidated Free Cash Flow with tax detail
Consolidated Free Cash Flow (Apr. - June) (bn JPY) 49.6 Tax at SOFTBANK MOBILE 46.4 Tax at Yahoo Japan 14.5 3.5 56.5 57.7 0 -37.8 Steady trend -138.9 07 08 09 10 (FY) Q1 Q1 Q1 Q1 23 *Tax at SOFTBANK MOBILE: BB Mobile income tax under consolidated tax return.
Slide 25: Net Interest-bearing Debt Comparison to Peak Level
Net Interest-bearing Debt Comparison to Peak Level (bn JPY) 2,387.0 Since acquisition of Vodafone K.K. 1,498.8 Reduced by approx. JPY 890.0bn 0 2006 2010 24 June June
Slide 26: Commitment to Reduce Net Interest-bearing Debt Remains Unchanged
Commitment to Reduce Net Interest-bearing 2.4t Debt Remains Unchanged 1.9t 1.5t Half Zero 0 FY06 FY08 FY10 FY11 FY14 June June (target) (target) 25 *Half: half of the end of FY08 level.
Slide 27: Issuance of Stock Acquisition Rights
Issuance of Stock Acquisition Rights Stock options with charge Reason: encourage motivation of officers and employees to achieve targets Outline: 4 milion shares (0.37%) but no dilution through treasury stock buyback Conditions: 1Generate total amount of at least JPY 1 trillion FCF inyears (FY2009 -
Slide 28: Mobile Communications Business
Mobile Communications Business 27
Slide 29: Net Subscriber Additions (Apr. - June)
Net Subscriber Additions (Apr. - June) 700k Doubled 320k 0 FY09/Q1 FY10/Q1 28
Slide 30: Net Adds: Competitors' Comparison
Net Adds: Competitors’ Comparison (Apr. - June) Overwhelmingly 700k No.1 430k 220k 0 KDDI NTT DOCOMO SOFTBANK 29 *Calculated by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data.
Slide 31: MNP Net Additions (Apr. - June)
MNP Net Additions (Apr. - June) 130k 2.5-fold YoY 0 SOFTBANK -70k -60k NTT DOCOMO KDDI 30 *Created by SOFTBANK CORP. based on analyst report issued by Mitsubishi UFJ Morgan Stanley Securities.
Slide 32: Churn Rate
Churn Rate (%) 2 Termination of 2G Dramatic improvement 1 1.02% (3G postpaid: 0.99%) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY07 FY08 FY09 FY10 31 *Churn rate: includes the number of prepaid mobile phones and communication module subscribers.
Slide 33: ARPU Increments YoY Comparison
ARPU Increments YoY Comparison (JPY) 300 SOFTBANK (JPY +260) 0 -300 NTT DOCOMO (JPY -250) KDDI (JPY -440) -600 -900 -1,200 FY07 FY08 FY09 FY10 32 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 34: Data ARPU Increments YoY Comparison
Data ARPU Increments YoY Comparison (JPY) 400 SOFTBANK (JPY +370) 300 200 100 NTT DOCOMO (JPY +80) KDDI (JPY +50) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q FY07 FY08 FY09 FY10 33 *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 35: Mobile Communications Segment Operating Income
Mobile Communications Segment Operating Income (bn JPY) Record high for 102.6 4 consecutive periods 60.2 70% increase 43.5 44.2 27.2 0 06 07 08 09 10 (FY) 1 1 1 1 1 34
Slide 36: iPad launched in Japan in May 2010
iPad launched in Japan in May 2010 35
Slide 37: Otsuka Pharmaceutical: iPad used in presentations to medical experts
(Otsuka Pharmaceutical) Medical expert MR (medical representative) Used in presentations to medical experts 36 *Above photos are images.
Slide 38: Mizuho Bank: iPad used to explain products at counter
(Mizuho Bank) Bank staff Customer Used to explain products at counter 37 *Above photos are images.
Slide 39: Many Companies Announced Implementation
Many Companies Announced Implementation 38
Slide 40: Expanding eBook Market
Expanding eBook Market (bn JPY) Approx. 140 130.0bn 120 Mobile/new platform PC 100 80 60 40 20 0 2002 2004 2006 2008 2010 2012 2014 (Forecast) 39 Source: Internet Media Research Institute.
Slide 41: Viewn: Newspapers, magazines, and TV programs in your hands
(Viewn) Newspapers, magazines, and TV programs in your hands 40
Slide 42: 13 companies, 31 media outlets
13 companies 31 media outlets 41 *As of July 28, 2010.
Slide 43: iPhone 4 launched worldwide in June 2010
iPhone 4 launched worldwide in June 2010 42
Slide 44: Number of Pre-orders (Japan)
Number of Pre-orders (Japan) iPhone 3GS iPhone 4 43
Slide 45: Business professionals wanting both iPhone 4 and iPad
1 out of every 3 business professionals wants to have both iPhone 4 and iPad 44
Slide 46: Forecast of World Mobile Data Traffic
Forecast of World Mobile Data Traffic (terabyte/month) Approx. 3.6mil approx. 40-fold in 5 years since 2009 Approx. 90k 0 2009 2010 2011 2012 2013 2014 (CY) (Forecast) 45 Source: “Cisco Visual Networking Index” the updated forecast of mobile data traffic of the world from 2009 to 2014.
Slide 47: Progress on Plan to Double Number of Mobile Phone Base Stations
Progress on Plan to Double Number of Mobile Phone Base Stations Approx. 120k Steady 94k Sites increase 19k finalized Approx. 9k 1.5GHz band 60k planned 66k 0 2010 2010 2011 e/o Mar. e/o June e/o Mar. 46 (plan)
Slide 48: Steady Progress With Femtocell
Steady Progress With Femtocell Number of applications 30,000 (as of July 29, 2010) 47
Slide 49: More Wi-Fi Spots: Starbucks
More Wi-Fi Spots STARBUCKS Diversifying ways of spending time in a coffee shop 48
Slide 50: More Wi-Fi Spots: Ministop
More Wi-Fi Spots MINISTOP Create alternative ways of use at eat-in corners 49
Slide 51: More Wi-Fi Spots: Motosumi/Bremen shopping street
More Wi-Fi Spots Motosumi/Bremen shopping street Attractive town planning 50
Slide 52: Brands agreeing to install Wi-Fi spots
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Slide 53: Brands Agreed to Install SOFTBANK Wi-Fi Spots
Brands Agreed to Install SOFTBANK Wi-Fi Spots 774 0 16 2010 e/o Mar. 2011 e/o Mar. (Actual) (Forecast) 52 * The service is provided through BB Mobile Point at McDonald’s, Ginza Renoir, Tokyu Hotels, JAL, Royal Park Hotel, ANA. * As of July 29,2010.
Slide 54: 3G Network
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Slide 55: 3G Network Femtocell Wi-Fi
3G Network Femtocell Wi-Fi 54
Slide 56: Service Improvement with Additional Band
Service Improvement with Additional Band New frequency band 1.5GHz band (Full-fledged service launch in September 2010) 2GHz band 2010 From 2012 55
Slide 57: Enhance Coverage and Capacity
Enhance Coverage and Capacity Wi-Fi Doubled Femtocell base stations New frequency band 56
Slide 58: Launch Unlimited Packet Discount for Overseas
POSTCARD Launch “Unlimited Packet Discount for Overseas” Up to JPY 1,480/day Application not required Available in 31 countries and regions 57
Slide 59: Renewed "Let's do it" List
Renewed “Let’s do it” PPOELAS] EAR TwitterT @masason H[POKLASJCOHPULRMGRREKLOTUST. 2 PedDEL, zs) [T#ELRI ARB7/28 (AK) 18:00 YPN ITAFS7 MRA. AASRREARIGMR ele i. Ust PRES. PC http://ustre.am/bNT) iPhone htto-//ustre.am/etwy #softbank a: ES masason 10-07- 7: * Bamizo55 KiPhonelSWi-Fi MAOH Bi HRELK. $B-
Slide 60: Let's do it list: 49 items completed
Completed! Currently 49 items *As of July 29, 2010. 59
Slide 61: Strategic Synergy Group
Strategic Synergy Group 60
Slide 62: Birth of the world's largest e-commerce market on June 1, 2010
Birth of the world’s largest e-commerce market on June 1, 2010 61
Slide 63: Online Shopping Transaction Value (CY2009)
Online Shopping Transaction Value (CY2009) JPY 3.8t JPY 2.2t Amazon 62 (simple added value) *Created by SOFTBANK CORP. based on respective companies’ publicly available information.
Slide 64: Announced establishment of USTREAM Asia
Announced establishment of USTREAM Asia on May 18, 2010 63
Slide 65: Establishment of USTREAM Asia
Establishment of USTREAM Asia Max. 30% (Currently 19%) 60% 32% *30%: fully diluted investment ratio. 64 *19%: as of July 6, 2010.
Slide 66: USTREAM Number of Monthly Viewers
(mil people) Number of Monthly Viewers 17,000 150 15,300 13,600 Exceeded 11,900 10,200 100 160mil 8,500 6,800 50 5,100 3,400 1,700 0 0 Sept. June 2007 2010 65 *Created by SOFTBANK CORP. based on USTREAM Inc. data on total number of daily viewers.
Slide 67: The world's largest social game developer
The world’s largest social game developer 230mil monthly active users 66 Source: App Data (June 2010).
Slide 68: Social Game
Social Game Play with friends on SNS sites In principle free of charge Item sales main source of revenue hose Ue catherine saha-c kahori ken makoto Pitt 67
Slide 69: World's largest SNS site
(mil people) 500mil 500 people 400 World’s largest 300 SNS site 200 100 0 2004/10/01 2005/06/01 2006/02/01 2006/10/01 2007/06/01 2008/02/01 2008/10/01 2009/06/01 2010/02/01 Feb. Aug. Apr. July 04 08 09 10 hose Ue Facebook users catherine saha-c kahori ken makoto Pitt Source: Facebook official blog.
Slide 70: Weekly market share of visits (US)
Google 6% Facebook 4% 2% 2009 2010 Weekly market share of visits (US) Source: Hitwise press release. 69
Slide 71: Facebook Application Ranking
Facebook Application Ranking Rank Name of Game Vendor Users (mil) 1 FarmVille Zynga 62 Monopolize top positions 2 Texas HoldEm Poker Zynga 28 3 Create your Quiz Pencake Created 22 4 FrontierVille Zynga 21 5 Phrases 4 Fun Phrases 4 Fun 21 6 Cafe World Zynga 20 7 Treasure Isle Zynga 19 8 Facebook for
Slide 72: Monthly Active Users
Monthly Active Users (mil people) 2.5 250 230mil (2010) US online games 1.3 130 90mil (2009) Establish company 0 2007 2008 2009 (CY) (Source) US online games: comScore press release. 71 Zynga: after 2009 App Data, before 2009 image.
Slide 73: Agreement to establish Zynga Japan
Agreement to establish Zynga Japan on July 29, 2010 72
Slide 74: Birth of the World's Largest Social Game Alliance
Birth of the World’s Largest Social Game Alliance JPY 13.7bn 50% 50% Zynga Japan 73 *JPY 13.7bn:150mil US $ converted at 1$=JPY 91.
Slide 75: Zynga Japan
Zynga Japan The world’s largest social game Mobile Internet developer 74
Slide 76: SoftBank Zynga
= SoftBank 74 Zynga
Slide 77: July 2010, JIL will join forces with WAC
July 2010, JIL will join forces with WAC 76
Slide 78: JIL's Concept Is to Be World's No.1 Content Distributor
JIL’s Concept Is to Be World’s No.1 Content Distributor JIL 1bn subscribers *1bn people: total of subscribers of operators participating in JIL. Estimated by SOFTBANK CORP. based on disclosed information. 77
Slide 79: Expand Around the World Through WAC
Expand Around the World Through WAC JIL 1bn subscribers WAC 3bn subscribers *1bn people: total of subscribers of operators participating in JIL. Estimated by SOFTBANK CORP. based on disclosed information. 78 *3bn: total of subscribers of operators participating in WAC. WAC press release and web site
Slide 80: Next 30-Year Vision
Next 30-Year Vision 79
Slide 81: Making of Next 30-Year Vision
Making of Next 30-Year Vision 80
Slide 82: Unprecedented Project in the World
Unprecedented Project in the World Share Vision for Next 300-Years Create Vision with All 20k Employees 81
Slide 83: SOFTBANK Academia
SOFTBANK Academia 82
Slide 84: Train successors
Only purpose Train successors 83
Slide 85: Successor wanted! OPEN
SOFTBANK Academia Successor wanted! OPEN 84
Slide 86: Make People Happy Through Information Revolution
Make People Happy Through Information Revolution 85
Slide 87: SoftBank
=m OOftBank
Slide 88: Application of accounting standards and definition of terms
1. Application of accounting standard for disclosure on segments The “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” and related “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” are applied fro