Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2009 Earnings Presentation
109 slides from Softbank's earnings presentation, Feb 2, 2010
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2009
Earnings Results for the Nine-month Period Ended December 31, 2009 (Apr. – Dec. 2009) February 2, 2010 SOFTBANK CORP. 1
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: Earnings Highlights
Earnings Highlights 1. Renew record high profit * 2. Operating income forecast for next FY: JPY 500bn * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 2
Slide 4: Earnings Highlights
Earnings Highlights 1. Renew record high profit * 2. Operating income forecast for next FY: JPY 500bn * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 3
Slide 5: Consolidated Earnings Results
Consolidated Earnings Results 4
Slide 6: Summary of Consolidated Earnings
Summary of Consolidated Earnings (bn JPY) FY08/Q1-3 FY09/Q1-3 YoY (Apr. - Dec./08) (Apr. - Dec./09) Net sales 1,982.2 2,045.3 +63.0 EBITDA*1 508.4 601.2 +92.7 Operating income 274.6 366.3 +91.6 Ordinary income 174.4 281.1 +106.6 Net income 58.1 94.8 +36.6 Operating cash flow 270.7 469.1 +198.4 *2 Fr
Slide 7: Progress on Earnings Forecasts
Progress on Earnings Forecasts (bn JPY) FY08 FY09 FY09 Actual Forecast Q1-3 Actual Operating income 359.1 420.0 366.3 (+60.8) (+91.6) FCF 181.5 300.0 283.5 (+118.4) (+235.9) Progressing according to plan (Note) YoY comparison stated within brackets. * Free cash flow (FCF) = cash flows from operating
Slide 8: Consolidated Earnings Comparison (Apr. - Dec. 2009)
Consolidated Earnings Comparison (Apr. - Dec. 2009) SOFTBANK KDDI NTT DOCOMO Consolidated net sales (YoY) +3% -2% -4% Consolidated operating income (YoY) +33% -7% -6% Revenue Revenue and Revenue and and profit profit profit increases decreases decreases (Note) Created by SOFTBANK CORP. based on resp
Slide 9: Consolidated Net Sales (Apr. - Dec.)
Consolidated Net Sales (Apr. - Dec.) (bn JPY) 2,500 2,045.3 2,000 1,982.2 3% increase (YoY) 1,500 1,144.8 1,256.7 1,000 Mobile Communications 173.9 152.1 Broadband Infrastructure 500 235.9 225.9 Fixed-line Telecommunications 187.2 196.4 Internet Culture 184.4 165.9 0 e-Commerce FY08 FY09 Q1-3 Q1-3 (
Slide 10: Consolidated EBITDA (Apr. - Dec.)
*1 Consolidated EBITDA (Apr. - Dec.) (bn JPY) 601.2 *2 600 508.4 Record high (Q1-3 basis) 500 400 392.1 303.7 18% increase YoY 300 Mobile Communications 200 54.1 51.4 Broadband Infrastructure 45.5 47.3 Fixed-line Telecommunications 100 107.2 Internet Culture 100.9 0 e-Commerce FY08 FY09 Q1-3 Q1-3 -1
Slide 11: Consolidated EBITDA (Apr. - Dec.)
*1 Consolidated EBITDA (Apr. - Dec.) (bn JPY) *2 600 601.2 Record high 483.7 508.4 for 6 consecutive 500 382.4 periods 400 (Q1-3 basis) 300 200 94.9 100 27.8 0 04 05 06 07 08 09 (FY) Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 *1 EBITDA =Operating income (loss) + depreciation and amortization (including amortizat
Slide 12: Consolidated Operating Income (Apr. - Dec.)
Consolidated Operating Income (Apr. - Dec.) (bn JPY) * 400 366.3 Record high (Q1-3 basis) 300 274.6 215.1 33% increase YoY 134.9 200 Mobile Communications 39.4 Broadband Infrastructure 36.6 100 11.3 14.3 Fixed-line Telecommunications 98.5 Internet Culture 92.0 0 e-Commerce FY08 FY09 Q1-3 Q1-3 -100 *
Slide 13: Consolidated Operating Income Trend (Apr. - Dec.)
Consolidated Operating Income Trend (Apr. - Dec.) (bn JPY) * 400 366.3 Record high 300 274.6 for 5 consecutive 260.1 periods 197.2 200 (Q1-3 basis) 100 27.9 0 -14.3 -100 04 05 06 07 08 09 (FY) Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 12
Slide 14: Operating Income Comparison of (Apr. - Dec.)
Operating Income Comparison of (Apr. - Dec.) (bn JPY) 400 376.8 KDDI 366.3 SOFTBANK 300 200 Closing in on KDDI 100 0 FY05 FY06 FY07 FY08 FY09 Q1-3 Q1-3 Q1-3 Q1-3 Q1-3 (Note) Created by SOFTBANK CORP. based on respective companies’ publicly available information. 13
Slide 15: Consolidated Ordinary Income (Apr. - Dec.)
Consolidated Ordinary Income (Apr. - Dec.) (bn JPY) * 300 281.1 Record high 250 (Q1-3 basis) 200 174.4 61% increase YoY 150 100 50 0 FY08 FY09 Q1-3 Q1-3 * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 14
Slide 16: Consolidated Net Income (Apr. - Dec.)
Consolidated Net Income (Apr. - Dec.) (bn JPY) * 100 94.8 Record high 80 (Q1-3 basis) 58.1 63% increase YoY 60 40 20 0 FY08 FY09 Q1-3 Q1-3 * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 15
Slide 17: Consolidated Net Income (Apr. - Dec.)
Consolidated Net Income (Apr. - Dec.) (bn JPY) FY08/ FY09/ Notes for FY09 Q1-3 Q1-3 Ordinary income 174.4 281.1 Loss on retirement of non current assets by SBM: (46.8) Special income/loss (net) (0.3) (46.6) Income before income taxes and minority interests 174.0 234.5 Income tax: Current 53.2 89.5 I
Slide 18: Special Loss
Special Loss (Loss on Retirement of Non Current Assets) (bn JPY) Amount Notes Loss on retirement of 46.8 non current assets Facility removal cost and loss on retirement of telecommunications 2G facilities 24.3 equipment along with the termination of 2G service Facility removal cost and loss on retir
Slide 19: Operating Cash Flow (Apr. - Dec.)
Operating Cash Flow (Apr. - Dec.) (bn JPY) 500 469.1 Record high * (Q1-3 basis) 400 +198.4bn JPY 73% increase YoY 300 270.7 200 100 0 FY08 FY09 Q1-3 Q1-3 * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 18
Slide 20: Operating Cash Flow (Apr. - Dec.)
Operating Cash Flow (Apr. - Dec.) (bn JPY) * 500 469.1 Record high 400 for 2 consecutive periods 300 270.7 (Q1-3 basis) 200 100 57.2 0 FY07 FY08 FY09 Q1-3 Q1-3 Q1-3 * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 19
Slide 21: Free Cash Flow (Apr. - Dec.)
*1 Free Cash Flow (Apr. - Dec.) (bn JPY) *2 300 300 283.5 Record high (Q1-3 basis) 200 200 +235.9bn times 6 YoY 100 100 47.6 0 0 FY08 FY09 Q1-3 Q1-3 *1 Free cash flow (FCF) = cash flows from operating activities + cash flows from investing activities. *2 Since SOFTBANK CORP. applied consolidated acc
Slide 22: Record High Results (Apr. - Dec. 2009)
9 “Record High” Results (Apr. - Dec. 2009) Consolidated Results (YoY) *1 EBITDA Record high*5 6 consecutive periods +18% *5 Operating Income Record high 5 consecutive periods +33% Ordinary Income Record high*5 +61% *5 Net Income Record high +63% *5 Operating CF Record high 2 consecutive periods +73%
Slide 23: Net Interest-bearing Debt Reduction Status
Net Interest-bearing Debt Reduction Status 22
Slide 24: Net Interest-bearing Debt
Net Interest-bearing Debt * (bn JPY) 2,500 Reduced by approx. 2,044.9 2,000 370bn JPY 218.8 1,678.2 (compared to December 2008) 222.3 Securitization of installment 1,500 receivables (SOFTBANK MOBILE) 1,000 1,826.1 1,455.8 Other than securitization of installment receivables 500 0 Dec. Dec. 2008 2009
Slide 25: SBM Loans Balance
SBM Loans Balance (bn JPY) 1,342.1 1,350 1,311.4 1,295.0 Toward below 1t JPY level 1,300 1,276.4 1,261.9 1,250 1,239.2 1,207.7 1,200 1,184.8 1,154.1 1,150 (Reference) 1,118.9 1,100 1,088.9 102.2bn JPY 1,050 repaid in Jan. 1,000 986.7 950 9000 June Sept. Dec. Mar.June Sept. Dec. Mar. June Sept. Dec.
Slide 26: Corporate Bonds Redemption Schedule
Corporate Bonds Redemption Schedule Abundant repayment resources available Repayment Capability Corporate Bonds Redemption Schedule (bn JPY) 800 Unused portion of credit line facility*1 SOFTBANK straight bonds Cash position*2 720.8 SOFTBANK convertible bonds*3 111.0 600 423.3 400 36.0 609.8 200 387.
Slide 27: Improvement in Key Financial Indices
Improvement in Key Financial Indices Improvement FY08/Q1-3 FY09/Q1-3 Rate EBITDA margin*1 25.7% 29.4% +15% Equity ratio*2 9.0% 10.6% +18% D/E ratio*3 6.3 times 4.9 times +21% Net D/E ratio*4 5.3 times 3.6 times +31% *1 EBITDA margin = EBITDA / net sales *2 Equity ratio: shareholders’ equity/ total a
Slide 28: First Upgrade in 6 Years
First Upgrade in 6 Years AA-/AA3 A+/A Upgraded to BBB+ A/A2 (December 2009) A-/A3 BBB+/Baa1 JCR (BBB+) BBB/Baa2 BBB-/Baa3 BB+/Ba1 BB/Ba2 BB-/Ba3 B+/B1 2003 2004 2005 2006 2007 2008 2009 2010 (CY) 27
Slide 29: Credit Rating
Credit Rating JCR (AA-) AA-/AA3 A+/A WBS*structured S&P (A) finance rating A/A2 (senior portion) Moody’s (A3) A-/A3 BBB+/Baa1 JCR (BBB+) BBB/Baa2 BBB-/Baa3 BB+/Ba1 SOFTBANK Moody’s (Ba2) rating BB/Ba2 BB-/Ba3 S&P (BB) B+/B1 Acquisition of Acquisition of JAPAN TELECOM Vodafone K.K. 2003 2004 2005 200
Slide 30: Earnings Highlights
Earnings Highlights 1. Renew record high profit * 2. Operating income forecast for next FY: JPY 500bn * Since SOFTBANK CORP. applied consolidated accounting in FY1994. 29
Slide 31: Operating Income Forecast
Operating Income Forecast (bn JPY) 500 500.0 420.0 FY2010 400 500bn JPY 3000 FY09 FY10 (full year forecast) (full year forecast) 30
Slide 32: Trend of Operating Income (Since foundation)
Trend of Operating Income (Since foundation) (bn JPY) FY2010 (forecast) 500 FY2009 (forecast) 400 500bn JPY level in the 30th year 300 200 100 0 1990 2000 2010 (FY) -100 31
Slide 33: Operating Income Ranking (FY2010 forecast)
Operating Income Ranking (FY2010 forecast) Rank Company name Amount (bn JPY) 1 NTT 1,153.4 2 NTT DOCOMO 844.6 3 TOYOTA MOTOR 601.9 4 INPEX 521.7 5 KDDI 502.5 6th in FY10 6 SOFTBANK 500.0 7 Canon 432.6 8 TEPCO 407.0 9 East Japan Railway 406.7 10 Honda Motor 404.1 11 Takeda Pharmaceutical 363.2 12 Nin
Slide 34: CAPEX (acceptance base)
CAPEX (acceptance base) (bn JPY) 389.8 400 293.7 300 259.0 260.0 308.4 200 148.9 235.3 142.8 199.1 47.6 Mobile Communications 100 Broadband Infrastructure 119.4 22.1 Fixed-line Telecommunications 82.6 14.5 37.6 21.2 21.8 29.5 5.2 Others 11.0 0 FY05 FY06 FY07 FY08 FY09 (forecast) (Note) Amounts above
Slide 35: No Change in Target of 1t JPY FCF
*1 No Change in Target of 1t JPY FCF (bn JPY) 500 400 +α α Toward *2 Yahoo! Inc. + *1 300 +α 100.0 100.0bn JPY FCF + JPY 1 trillion +α *3 200 300.0 300.0 300.0 900.0bn JPY (300.0bn JPY x 3 years) (forecast) (assumption) (assumption) 100 0 FY09 FY10 FY11 *1 Free cash flow (FCF) = cash flows from oper
Slide 36: Targeted Reduction of Net Interest-bearing Debt Unchanged
Targeted Reduction of Net * Interest-bearing Debt Unchanged Net Interest-bearing Debt Balance (bn JPY) Reduce 2,000 1.9t net interest-bearing debt to zero Half 1,000 Zero 0 FY08 FY11 FY14 (target) (target) * Net interest-bearing debt = interest-bearing debt – cash position Interest-bearing debt: sho
Slide 37: Business Results
—~= SoftBank Business Results 36
Slide 38: Comparison Among 3 Mobile Operators
Comparison Among 3 Mobile Operators SOFTBANK KDDI NTT DOCOMO Net adds + 1.67mil + 0.84mil + 1.28mil 2009 (CY) ARPU* FY09/Q3 + 110 JPY - 400 JPY - 260 JPY (YoY) (Note) Created by SOFTBANK CORP. based on respective companies’ publicly available information. * ARPU: Average Revenue Per User. 37
Slide 39: Business Highlights
Business Highlights *1 1. No.1 net adds for 2 consecutive years *2 2. Turnaround of ARPU to YoY growth for the first time Data ARPU surpassed 2,000 JPY for the first time *1 Created by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data (2008, 2009). *2 ARPU: Average Rev
Slide 40: Business Highlights
Business Highlights *1 1. No.1 net adds for 2 consecutive years *2 2. Turnaround of ARPU to YoY growth for the first time Data ARPU surpassed 2,000 JPY for the first time *1 Created by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data (2008, 2009). *2 ARPU: Average Rev
Slide 41: Net Additions 2009 (CY)
Net Additions 2009 (CY) (k) 2,000 * No.1 annual 1,670 net adds for 2 1,280 consecutive years 1,000 840 0 KDDI NTT DOCOMO SOFTBANK (Note) Created by SOFTBANK CORP. based on Telecommunications Carriers Association (TCA) statistical data (2008, 2009). * Calculated by SOFTBANK CORP. based on TCA data. 4
Slide 42: Cumulative Subscribers
Cumulative Subscribers Vodafone 21.67 Steady growth (mil) 20 15.20 15 10 Mar. Sept. Mar. Sept. Mar. Sept. Mar. Sept. Mar. Sept. Mar. Sept. FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 41
Slide 43: Subscriber Breakdown (3G/2G)
Subscriber Breakdown (3G/2G) (mil) 21.67 Slight decrease 20 in March due to termination of 15 2G service 2G Subscribers 670k (Jan. 31, 2010) 10 (Breakdown) Postpaid: 320k Prepaid: 350k 5 3G mobile phones 2G mobile phones 0 Q3 Q3 Q3 Q3 Q3 FY05 FY06 FY07 FY08 FY09 42
Slide 44: Telecom Service Revenue Breakdown (3G/2G)
Telecom Service Revenue Breakdown (3G/2G) (bn JPY) 250 Termination of 200 80.5% 2G to contribute to profit growth 150 in FY10 100 50 3G mobile phones 1.7% 2G mobile phones 0 Q3 Q3 Q3 Q3 Q3 FY05 FY06 FY07 FY08 FY09 43
Slide 45: TV CM Preference No.1 for 3 Consecutive Years
TV CM Preference No.1 for 3 Consecutive Years 44
Slide 46: TV CM Preference Ranking (annual)
TV CM Preference Ranking (annual) Among approx. 9,000 brands Rank 2007 2008 2009 1st No.1 for 3 * 2nd NTT DOCOMO NTT DOCOMO KDDI consecutive 3rd Coca-Cola (Japan) KDDI NTT DOCOMO 4th KDDI TOKYO GAS Aflac years 5th TOKYO GAS Suntory LOTTE 6th NTT East Coca-Cola (Japan) Suntory 7th Shiseido Otsuka Pha
Slide 47: TV CM Preference Ranking (Jan.)
TV CM Preference Ranking (Jan.) Among 4,492 brands Rank Company Production 1st Shiratoke “Ryoma Kabure” 5 titles rank 2nd 3rd Ezaki Glico TOKYO GAS within top 13 4th Aflac 5th Tanaka Kikinzoku Kogyo 6th House Foods 7th NY Roof Top Shiratoke “Densha 8th Norikae” (1st by production: Shiratoke “Ryoma K
Slide 48: Business Highlights
Business Highlights *1 1. No.1 net adds for 2 consecutive years *2 2. Turnaround of ARPU to YoY growth for the first time Data ARPU surpassed 2,000 JPY for the first time *1 Calculated by SOFTBANK CORP. based on Telecommunications Carriers Association statistical data (2008, 2009). *2 ARPU: Average
Slide 49: Cash Income per Subscriber
Cash Income per Subscriber * (JPY) Stable trend 5,760 5,790 5,850 5,990 6,040 5,760 5,890 5,980 5,960 6,000 5,000 4,000 3,000 2,000 1,000 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY07 FY08 FY09 * ARPU (Average Revenue Per User, communication revenue per subscriber) = basic monthly charge + monthly usage charge
Slide 50: Cash Income per Subscriber
Cash Income per Subscriber * (JPY) Stable trend 5,760 5,790 5,850 5,990 6,040 5,760 5,890 5,980 5,960 6,000 1,480 1,000 1,230 1,400 1,540 1,680 1,640 1,580 1,540 5,000 230 250 270 280 280 270 280 290 4,000 280 Handset installment payment 3,000 3,040 2,710 2,530 2,460 2,300 2,020 2,150 2,160 2,150 Ba
Slide 51: ARPU
* ARPU (communication revenue per subscriber) Turnaround to YoY (JPY) ARPU growth 6,000 Data ARPU reaches 5,000 4,520 JPY 2,000 level 4,310 4,180 4,200 4,170 4,150 4,090 4,030 4,000 3,830 3,000 3,040 2,710 2,530 2,460 2,300 2,020 2,150 2,160 2,150 Basic charge + voice ARPU 2,000 1,000 1,710 1,790 1,
Slide 52: Comparison Among Mobile Operators (YoY)
Comparison Among 3 Mobile Operators (YoY) Turnaround to YoY ARPU (JPY) ARPU Increments 200 (YoY) growth for the first time SOFTBANK 0 (+110) -200 NTT DOCOMO -400 KDDI -600 -800 -1,000 -1,200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY07 FY08 FY09 (Note) Created by SOFTBANK CORP. based on respective companie
Slide 53: Overtake Other Operators in Improvement of Data ARPU
Overtake Other Operators in Improvement of Data ARPU (JPY) Incremental Data ARPU in CY 2009 (YoY 2008) 300 250 270 200 150 100 80 50 50 0 KDDI NTT DOCOMO SOFTBANK (Note) Created by SOFTBANK CORP. based on materials publicly disclosed by each company. Comparison of quarterly data ARPU translated into
Slide 54: Stable Fixed-line Business
Stable Fixed-line Business (bn JPY) Operating Income/loss at Major 140 Fixed-line Telecom Operators 120 100 80 NTT East, West 60 SOFTBANK 40 (Fixed-line Business)* 53.7bn JPY 20 0 -20 KDDI (Fixed-line Telecommunications Business -40 -34.8bn JPY -60 * Fixed-line business = Fixed-line Telecommunicatio
Slide 55: Strategic Investments in Next Generation Internet Companies
Strategic Investments in Next Generation Internet Companies 55
Slide 56: Strategic Investments in Next Generation Internet Companies
Strategic Investments in Next Generation Internet Companies 1. Oak Pacific Interactive (April 2008) 2. RockYou (October 2008) 3. Ustream (January 2010) 56
Slide 57: RockYou
RockYou Social applications Largest social Display prevented due to protection of *1 copyrights application provider in the world * 2 (SOFTBANK investment ratio approx. 32%) Facebook MySpace hi5 Friendster orkut * 1 Estimated by SOFTBANK CORP. based on statistical data by compete.com. 2 Fully dilute
Slide 58: RockYou
RockYou (mil people) 300 Monthly Visitors* Exceeds 250mil people 250 200 150 Display prevented due to protection 100 of copyrights 50 “SPEED RACING” screen 0 June Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. Jan. 2007 2008 2008 2010 * Estimated by SOFTBANK CORP. based on statistical data by
Slide 59: Expansion to Asia
Expansion to Asia * 53% Korea (investment 44% (investment ratio) ratio) nate (From September 2009) RockYou Asia (joint venture) China (From June 2009) mixi (PC) mixi mobile Mobaga (From August 2009) (From October 2009) (From January 2010) * Total of SOFTBANK CORP.’s investment ratio of 44% and SOFTB
Slide 60: Roll Out Popular Applications in Asia
Roll Out Popular Applications in Asia Provide “SPEED RACING” (From Jan. 27, 2010) Display prevented due to protection of Approx. 300k* users 5 days copyrights after start of service “SPEED RACING” screen * Source: RockYou Asia. 60
Slide 61: Ustream
Ustream Popular live broadcast service in the USA Display prevented due to protection of copyrights Share experienced thrills on a live broadcast of Twitter 61
Slide 62: Ustream
Ustream (mil) 50 Monthly Viewers*2 More than 50mil people in the world 40 1st investment made on Jan. 29, 2010 30 SOFTBANK poised to 20 become largest 1 10 shareholder (over 30%)* *1 Fully diluted investment ratio. Investment ratio before dilution is 13.7% (as of Jan. 29, 2010). 0 *2 Total of daily
Slide 63: Revolutionary Change of Live Streaming
Revolutionary Change of Live Streaming Previous iPhoneTM + Ustream Live broadcast Live broadcast means media available to anyone 63
Slide 64: iPhone Still Strong
—~= SoftBank iPhone Still Strong 65
Slide 65: iPhone No.1 Seller in 2009
iPhone No.1 Seller in 2009 Ranking of Mobile Handsets Sold at Electronic Retail Stores (2009) No.1 iPhone No. 2 830P No. 3 KDDI Handset A NTT DOCOMO No. 4 Handset A KDDI No. 5 Handset B (Note) Estimated by SOFTBANK CORP. based on research company data. iPhone: total of iPhone 3G (8GB,16GB) and iPhon
Slide 66: App Store's Phenomenal Growth
App Store’s Phenomenal Growth App Store Downloads (bn) 3 Exceeds 3bn in 18 months 2 1 0 July 2008 Jan. 2010 Note: Created by SOFTBANK CORP. based on press release by Apple. 67
Slide 67: Enjoy Twitter More With Applications
Enjoy Twitter More With Applications Twitter users exceed 5mil (estimate) * Main Twitter Applications Display prevented due to protection of copyrights * Diamond Weekly (Jan. 23,2010 issue). 68
Slide 68: Business Development in China
Business Development in China 69
Slide 69: Expanding China Market (1)
Expanding China Market (1) (t USD) Nominal GDP Nominal GDP 9 China China will 8 become No.2 7 Inverted 6 5 Japan 4 3 2 1 2010 Source: Created by SOFTBANK CORP. based on data from IMF’s “World Economic Outlook 0 Database October 2009”. 2001 2003 2005 2007 2009 2011 2013 (CY) (Forecast) 70
Slide 70: Expanding China Market (2)
Expanding China Market (2) (mil people) Overwhelmingly 450 Internet Population No.1 in the world *1 400 China 380mil people 350 (in 2009) (Penetration: 29%) 300 *2 250 230mil people USA (in 2009) 200 (Penetration: 74%) 150 100 50 *1 Internet World Stats “WORLD INTERNET USAGE AND POPULATION STATISTIC
Slide 71: Presence in China
Presence in China *1 *2 Approx. 33% Approx. 35% (Shareholding) (Shareholding) Alibaba Group Oak Pacific Interactive (OPI) Holding Limited *1 As of Dec. 31, 2009. *2 Fully diluted investment ratio. Investment ratio before dilution is 22.9% (as of Dec. 31, 2009). 72
Slide 72: Presence in China
Presence in China *1 *2 Approx. 33% Approx. 35% (Shareholding) (Shareholding) Alibaba Group Oak Pacific Interactive (OPI) Holding Limited *1 As of Dec. 31, 2009. *2 Fully diluted investment ratio. Investment ratio before dilution is 22.9% (as of Dec. 31, 2009). 73
Slide 73: Overview of Alibaba Group
Overview of Alibaba Group Approx. 33%*1 Shareholding Alibaba Group Holding Limited 73.6% 100% 100% 100% 100% (Shareholding) (Shareholding) (Shareholding) (Shareholding) (Shareholding) (Yahoo China) B2B Online market Online Internet portal Cloud computing November 2007 Listed on the place settlement
Slide 74: Alibaba.com
Alibaba.com Global trade starts here.™ 15
Slide 75: Large Scale of Registered Companies
Large Scale of Registered Companies (mil) *2 10 times 50 approx. 45.00mil companies the scope 40 30 20 10 *1 approx.4.20mil companies 0 *1 Source: MIC “Economic Census for Business Frame 2006”. Total number of *2 As of Sept. 30, 2009. Alibaba companies in Japan 76
Slide 76: Taobao.com
+8) SE Taobao.com
Slide 77: Gross Merchandise Volume Market Share
Gross Merchandise Volume Market Share Online Shopping Market Share in China by Gross Merchandise Volume (GMV) 2008 Largest online 78% market in China (Note) Created by SOFTBANK CORP. based on iResearch China Online Shopping Research Report (2008-2009) data. 79
Slide 78: Overwhelming Growth in Taobao GMV
Overwhelming Growth in Taobao GMV (t JPY) 3.0 Taobao and Rakuten GMV (total circulation) Comparison *2 2.5 Exceeds 3t JPY 2.0 1.5 Display prevented 1.0 due to protection of *1 copyrights Rakuten 0.5 Ichiba 0.0 *1 Source: Rakuten publicly available material. 2005 2007 2009 *2 Source: Alibaba Group Ho
Slide 79: Alipay
bd © www.alipay.com 98
Slide 80: Number of Alipay Users and Credit Cards Issued in China
Registered Users (mil) Higher penetration 300 Number of Alipay Users and Credit Cards Issued in China than credit cards *2 250 270mil (December 2009) 200 175mil cards (September 2009) 150 Total number of credit 100 cards issued in China* 1 50 3mil cards (2003) 0 *1 Source: The People’s Bank of China
Slide 81: Tie Up with All National Banks
Tie Up with All National Banks Global market cap. ranking of listed banks* as of Jan. 31, 2010 ICBC No.1 China Construction Bank No.3 Display prevented due Bank of China No.6 to protection of copyrights Postal Saving Bank of China Bank of Communications Agriculture Bank of China * Bloomberg statisti
Slide 82: Alipay's Service Model (5 steps)
Alipay’s Service Model (5 steps) Buyer Buyer Supplier Buyer Supplier 1. Orders online 2. Pays Alipay 3. Ships order 4. Confirms 5. Receives delivery payment Settlement service without bad-debt 101
Slide 83: Presence in China
Presence in China *1 *2 Approx. 33% Approx. 35% (Shareholding) (Shareholding) Alibaba Group Oak Pacific Interactive (OPI) Holding Limited *1 As of Dec. 31, 2009. *2 Fully diluted investment ratio. Investment ratio before dilution is 22.9% (as of Dec. 31, 2009). 102
Slide 84: Outline of OPI
Outline of OPI Approx. 35%* (Investment ratio) Oak Pacific Interactive (OPI) * Fully diluted investment ratio. Investment ratio before dilution is 22.9% (as of Dec. 31, 2009). 103
Slide 85: OPI (Renren + Kaixin)
OPI (Renren + Kaixin) (mil people) 120 Display prevented due to (Xiaonei) protection of *2 100 copyrights Exceeds 120mil 80 people Kaixin (December 2009) 60 service start Growing at pace of 10mil people/month (January 2009) 40 *1 mixi 20 17.92mil people (September 2009) Display prevented due to 0 pr
Slide 86: Renren
Renren One of China’s largest SNS Display prevented due to protection of copyrights 106
Slide 87: Renren's History
Renren’s History * used by over 95% of university students in China Continue to use after graduation Change name to Renren targeting anyone (August 2009) * Source: Oak Pacific Interactive. 107
Slide 88: Connect With School Friends
Connect With School Friends Display prevented due to protection of copyrights Beijing university student 108
Slide 89: Connect With School Friends
Connect With School Friends Mostly friends Display prevented due to from university protection of copyrights 109
Slide 90: Connect With Work Friends
Connect With Work Friends China Mobile search Display prevented due to protection of copyrights Find people working at China Mobile 110
Slide 91: Get Comments on Diary
Get Comments on Diary (Diary) (Friends’ Comment) Display prevented Display prevented due to protection of due to protection of copyrights copyrights * Source: Oak Pacific Interactive (as of Dec. 31, 2009). Uploaded more than 200mil times* 111
Slide 92: Communicate With Photos
Communicate With Photos (Share Photos) (Friends’ Comment) Display prevented Display prevented due to protection of due to protection of copyrights copyrights * Source: Oak Pacific Interactive (as of Dec. 31, 2009). Uploaded more than 2bn pictures* 112
Slide 93: Play Games Together
Play Games Together Display prevented due to protection of copyrights Communication with friends through games 113
Slide 94: Play Games Together
Play Games Together Display prevented due to protection of copyrights Play a prank on a friends’ harvest 114
Slide 95: Enjoy Games With Bought Items
Enjoy Games With Bought Items Display prevented due to protection of copyrights Items to get advantages in games Per-item billing 115
Slide 96: Buy a Present With SNS Currency
Buy a Present With SNS Currency Display prevented due to protection of copyrights (2 Renren beans =2 yuan) (send present to) (message to friend) Per-item billing 116
Slide 97: Variety of Other Games
Variety of Other Games Display prevented due to Display prevented due to protection of copyrights protection of copyrights Display prevented due to protection of copyrights Display prevented due to Display prevented due to protection of copyrights protection of copyrights 117
Slide 98: Expand to Mobile Phones
Expand to Mobile Phones (iPhone) (Android) (Symbian) (Windows CE) Display Display Display Display prevented due to prevented due to prevented due to prevented due to protection of protection of protection of protection of copyrights copyrights copyrights copyrights 118
Slide 99: Game Software Market
Game Software Market *1 900 Rapid Growth 800 (Reasons) 700 Increase in Internet population Growth in social game market 600 Growth of mobile game market 500 400 *2 Display prevented 300 due to protection of copyrights 200 100 0 *1 Source: iResearch press release (Jan. 8, 2010) research on China onli
Slide 100: The Internet Focus is Shifting to Asia
The Internet Focus is Shifting to Asia (2015) approx. 2.6bn people (1998) approx. 0.19bn people Others Asia Asia Others 19% 50% USA 50% USA 12% (Source) Euromonitor 120
Slide 101: Winners in Asia are winners in the World
Winners in Asia are winners in the World 121
Slide 102: SB Group Users in China Market
SB Group Users in China Market (mil users) 600 600 *1 500 Exceeds 400 600mil people *2 310 300 200 160 *2 100 90 30 *3 0 2005 2006 2007 2008 2009 *1 Source: Oak Pacific Interactive (registered users of Kaixin and Renren as of Dec. 31, 2009). *2 Source: Alibaba Group Holding Limited (registered users
Slide 103: Toward No.1 Internet Company in Asia
Toward No.1 Internet Company in Asia 125
Slide 104: The SOFTBANK Group's Internet Companies China
The SOFTBANK Group’s Internet Companies China Display prevented due to protection of copyrights 123
Slide 105: The SOFTBANK Group's Internet Companies China Japan
The SOFTBANK Group’s Internet Companies China Japan Display prevented Display prevented due to protection of due to protection of copyrights copyrights 124
Slide 106: Lifestyle Company in the 21st Century
Lifestyle Company in the 21st Century IT revolution to all mankind and places 126
Slide 107: SOFTBANK's Fundamental Management Policy
SOFTBANK’s Fundamental Management Policy Endeavoring to benefit society and the economy and maximize enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution. 127
Slide 108: (Definition of terms)
(Definition of terms) - Referrals to “record high” and “record high profit” relate to the earnings results for Apr. - Dec. 2009 indicating records since SOFTBANKCORP. applied consolidated accounting in FY1994. - Free cash flow (FCF) = cash flows from operating activities + cash flows from investing
Slide 109: FY2009/Q3 Appendix to the Earnings Results
FY2009/Q3 Appendix to the Earnings Results (Amounts less than one billion yen are omitted. / Net Sales to external customers） FY2007 FY2008 FY2009 Business segment unit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net sales bn JPY 389.0 419.8 403.1 406.8 370.6 399.4 374.6 409.9 405.0 422.3 429.3 Operating incom