Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2008 Earnings Presentation
81 slides from Softbank's earnings presentation, Feb 6, 2009
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2008
Earnings Results for the Nine-month Period Ended December 31, 2008 (FY2008/Q1-3) Analyst Meeting February 6, 2009 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: Content
Content Accounting Consolidated P/L Analysis 5 Consolidated B/S Analysis 14 Consolidated CF Analysis 24 Finance Repayment Resources & Cash Position 32 Reduce Debt 42 Improve Various Financial Indices 50 Operating Broadband Infrastructure Segment 59 Fixed-line Telecommunications Segment 63 Mobile Com
Slide 4: Accounting
Accounting Kazuko Kimiwada General Manager Accounting, Internal Control SOFTBANK CORP. 4
Slide 5: Consolidated P/L Analysis
Consolidated P/L Analysis Consolidated B/S Analysis Consolidated CF Analysis 5
Slide 6: Consolidated P/L Summary
Consolidated P/L Summary <P/L-1> <bn JPY> Net Sales Operating Income Ordinary Income Net Income 3,000 400 2,776.1 Q4 717.4 324.2 -3.7% +5.6% Q1-3 300 64.0 2,058.7 1,982.2 274.6 2,000 260.1 258.6 Q3 26.6 694.0 94.6 653.2 -24.8% 92.4 231.9 200 174.4 Q2 120.8 57.1 1,000 701.6 681.7 94.9 89.0 108.6 100
Slide 7: Consolidated Net Sales
Consolidated Net Sales <P/L-2> 2,058.7 <bn JPY> 1,982.2 Mobile Communications -69.7bn - Increase in sales of telecommunications service +12.1bn Increase in subscribers +112.2bn -76.5 Decrease in ARPU -107.0bn - Decrease in sales of mobile handsets and accessories -79.3bn (-3.7%) Mobile Communication
Slide 8: Consolidated Operating Income (loss)
Consolidated Operating Income (loss) <P/L-3> Mobile Communications (-13.0bn) 274.6 - Decrease in net sales -69.7bn - Decrease in costs of goods sold: 260.1 Decrease related to decline in shipped handsets etc. +63.6bn <bn JPY> Increase in depreciation and amortization -13.9bn - Decrease in selling, g
Slide 9: Non-operating Income/Loss and Ordinary Income
Non-operating Income/Loss and Ordinary Income <P/L-4> Non-operating Income/Loss <bn JPY> Ordinary Income Other non-operating expense Interest expense Other non-operating income Equity in earning (loss) of affiliated companies Increase in Net of decrease in foreign exchange gain operating non-operati
Slide 10: Variance Related to Earnings of Affiliated Companies
Variance Related to Earnings of Affiliated Companies <P/L-5> <bn JPY> FY07 FY08 Variance Q1-3 Q1-3 Equity in earnings of affiliated companies 61.5 -8.4 -70.0 (net) Main variances Gain recorded related to listing of Alibaba Group Holding Limited’s 57.2 - -57.2 subsidiary Equity in earnings and loss u
Slide 11: Special Income/Loss and Income Before Income Taxes and Minority Interests
Special Income/Loss and Income Before Income Taxes and Minority Interests <P/L-6> < bn JPY> Special Income/Loss Income Before Income Taxes and Minority Interests Other special loss Unrealized loss on v aluation of inv estments at subsidiaries in the U.S., net* 07/Q1-Q3 Valuation loss on inv estment
Slide 12: Tax and Other Adjustments, Difference in Tax Rate
Tax and Other Adjustments, Difference in Tax Rate <P/L-7> <bn JPY> Tax and Other Adjustments Income Taxes: Current & Deferred 1 <bn JPY> Yahoo Japan Corporation 37.6 1 53.2 BBM group consolidated taxation 18.9 Income taxes; current BBM use of loss carryforwards 26.5 53.2 SBM depreciation and amortiz
Slide 13: Loss Carryforwards (e/o Dec 2008)
Loss Carryforwards (e/o Dec 2008) <P/L-8> < bn JPY> Balance Balance Valuation Deferred tax assets (tax income based) (tax based) allowance on B/S Total 373.4 151.5 126.0 25.4 Balance Used During Period Company Name Expiry date (tax income based) (tax income based) BB Mobile 34.4 -85.7 Mar 2009-Mar 2
Slide 14: Consolidated B/S Analysis
Consolidated P/L Analysis Consolidated B/S Analysis Consolidated CF Analysis 14
Slide 15: Consolidated B/S Summary
Consolidated B/S Summary <B/S-1> SBM Others <bn JPY> Current Assets Current Liabilities 1,582.7 1,435.4 1,240.7 1,250.6 1,005.1 635.9 604.4 980.5 577.5 604.7 646.2 454.8 Mar 2008 Dec 2008 Mar 2008 Dec 2008 Fixed Assets Long-term Liabilities 2,973.3 2,469.4 2,865.5 2,208.3 1,986.0 1,713.5 1,939.9 1,6
Slide 16: Consolidated B/S (1) Current Assets
Consolidated B/S (1) Current Assets <B/S-2> <bn JPY> Assets e/o Mar 2008 e/o Dec 2008 Variance Outline Current assets 1,582.7 1,435.4 --147.2 SBM 1,005.1 980.5 -24.5 Others 577.5 454.8 -122.6 Cash and deposits 491.1 383.3 -107.8 Increase provided by operating activities (+ 183.4) Securitization of i
Slide 17: Consolidated B/S (2) Tangible Assets
Consolidated B/S (2) Tangible Assets <B/S-3> <bn JPY> Assets e/o Mar 2008 e/o Dec 2008 Variance Outline Fixed assets 2,973.3 2,865.5 -107.8 SBM 1,986.0 1,939.9 -46.1 Others 987.2 925.5 -61.6 Property and equipment, net 1,029.2 1,010.5 -18.6 SBM 692.9 688.4 -4.5 Others 336.2 322.1 -14.1 Building and
Slide 18: Consolidated B/S (3) Intangible Assets
Consolidated B/S (3) Intangible Assets <B/S-4> <bn JPY> Assets e/o Mar 2008 e/o Dec 2008 Variance Outline Intangible assets, net 1,238.3 1,237.6 -0.7 SBM 1,119.6 1,084.1 -35.5 Others 118.6 153.4 34.8 Goodwill 974.4 974.3 -0.1 SBM 929.9 891.4 -38.5 Decrease due to amortization Others 44.4 82.9 38.4 S
Slide 19: Consolidated B/S (4) Current Liabilities
Consolidated B/S (4) Current Liabilities <B/S-5> <bn JPY> Liabilities e/o Mar 2008 e/o Dec 2008 Variance Outline Current liabilities 1,240.7 1,250.6 9.9 SBM 635.9 604.4 -31.5 Others 604.7 646.2 41.5 Accounts payable-trade 187.2 128.3 -58.9 SBM 113.3 76.2 -37.1 Mobile handsets costs payable etc. Othe
Slide 20: Consolidated B/S (5) Long-term Liabilities
Consolidated B/S (5) Long-term Liabilities <B/S-6> <bn JPY> Liabilities e/o Mar 2008 e/o Dec 2008 Variance Outline Long-term liabilities 2,469.4 2,208.3 -261.1 SBM 1,713.5 1,621.5 -92.0 Others 755.9 586.8 -169.1 Corporate bonds 445.2 394.6 -50.5 SBM SB stand-alone: redemption (-5.6), SBTM: transferr
Slide 21: Consolidated B/S (6) Equity
Consolidated B/S (6) Equity <B/S-7> <bn JPY> Net Assets e/o Mar 2008 e/o Dec 2008 Variance Outline Equity 848.7 843.6 -5.0 Shareholders’ equity 307.2 363.0 55.8 Common stock 187.4 187.6 0.2 Cash receipts for new stock subscriptions Additional pain-in capital 211.7 211.9 0.2 Accumulated deficit -91.7
Slide 22: (Equity) Foreign Currency Translation Adjustments (Q'ly)
(Equity) Foreign Currency Translation Adjustments (Q’ly) <B/S-8> <bn JPY> 60 Foreign currency translation adjustments account 40 35.9 20 28.8 30.7 25.6 7.4 4.4 3.4 0 -20 -25.7 -40 06/Q4 07/Q1 07/Q2 07/Q3 07/Q4 08/Q1 08/Q2 08/Q3 (JPY) <Ref> exchange rate trend （$/Yen/TTM） 240 Euro/Yen(TTM) Pound/Yen(
Slide 23: (Equity) Shareholders' Equity, Valuation & Translation etc.
(Equity) Shareholders’ Equity, Valuation & Translation etc. <B/S-9> Common stock & additional paid-in capital Accumulated deficit Treasury stock Unrealized gain on available-for-sale securities Deferred gain (loss) on derivatives under hedge accounting Foreign currency translation adjustments Shareh
Slide 24: Consolidated CF Analysis
Consolidated P/L Analysis Consolidated B/S Analysis Consolidated CF Analysis 24
Slide 25: Consolidated Cash Flow Main Breakdown
e/o Dec 2008 25 <CF> <bn JPY> 383.7 Cash and cash equivalents at the end of the period * Significant items from the consolidated CF statement are shown here. -60.2 Repayment of lease obligations Proceeds from sale and lease 67.2 back of equipment newly acquired -57.7 -53.5 Financing CF Purchase of t
Slide 26: Operating Cash Flow
Operating Cash Flow <CF> Operating Cash Flow: Quarterly Trend Operating Cash Flow: Nine Month Trend <bn JPY> <bn JPY> Operating cash flow excluding effect of variation Operating cash flow excluding effect of variation in in installment receivables installment receivables Variation in installment sal
Slide 27: Earnings Forecast
Earnings Forecast <bn JPY> Operating Income Operating Cash Flow Investing Cash Flow Free Cash Flow 500.0 FY08 （ Forecast） FY09 (Forecast） 500 500 0 500 430.0 to H1 420.0 420.0 400 400 -100 400 340.0 Q1-3 Actual Q3 300 Q1-3 Actual 300 300 -200 274.6 270.7 Q1-3 Actual 250.0 Q3 Q3 -223.1 250.0 200 200
Slide 28: Scope of Consolidation/Scope of Equity Method
Scope of Consolidation/Scope of Equity Method <P/L-1> No. of Core Companies Comp. Consolidated subsidiaries 105 SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Yahoo Japan, SOFTBANK TECHNOLOGY, ITmedia, etc. Newly consolidated companies 7 SOFTBANK TELECOM PARTNERS CORP. (*1), Alibaba.com Japan, etc.
Slide 29: Finance
Finance Yoshimitsu Goto General Manager Finance, Group Management SOFTBANK CORP. 29
Slide 30: FY2008 Financial Strategies
FY2008 Financial Strategies Towards appropriate level of leverage Maximize FCF in each segment and decrease interest-bearing debt Improve various financial indices and equity ratio Improve credit rating as a result of the above Respond to market trends flexibly Minimize financial risks in each o
Slide 31: Major Financial Activities of FY08/Q1-3
Major Financial Activities of FY08/Q1-3 Date Content Amount Investment in Oak Pacific Interactive JPY 10.2bn April 2008 Investment in SOFTBANK TELECOM PARTNERS(*) JPY 25.5bn Redemption of 20th series Unsecured Straight Bond JPY12.5bn June 2008 Securitization of installment receivables (fifth) JPY 45
Slide 32: Repayment Resources & Cash Position
Repayment Resources & Cash Position Reduce Debt Various Financial Indices 32
Slide 33: Consolidated EBITDA and EBITDA Margin
Consolidated EBITDA and EBITDA Margin ¾ Cash flow from operations increasing steadily <bn JPY> Consolidated EBITDA 30% Consolidated EBITDA Margin 26% 700 626.6 23% 525.4 21% Q4 508.4 20% 500 172.8 14% Q3 300 174.0 Q2 10% 149.9 5% 100 44.0 161.4 Q1 -20.7 -100 0% FY03 FY04 FY05 FY06 FY07 FY08 Q1-3 FY0
Slide 34: EBITDA and EBITDA Margin (by segment)
EBITDA and EBITDA Margin (by segment) ¾ EBITDA of each segment is increasing steadily Consolidated EBITDA EBITDA Margin <bn JPY> Elimination Other 60% Internet Culture e-Commerce 55% BB Infrastructure Fixed-line Telecommunications 53% 53% Mobile Communications 52% 51% 700 626.6 50% Internet Culture
Slide 35: CAPEX (acquisition and forecast)
CAPEX (acquisition and forecast) ¾ Completed first cycle of CAPEX for BB, Fixed-line, 3G base stations for Mobile CAPEX <bn JPY> 400 389.8 (Yearly plan) 300 293.7 276.5 200 (Q1-3 actual) 148.9 174.7 Mobile Communications BB Infrastructure 100 Fixed-line Telecommunications Internet Culture e-Commerce
Slide 36: EBITDA-CAPEX
EBITDA-CAPEX ¾ Steady increase due to expansion of EBITDA and completion of first CAPEX cycle <bn JPY> EBITDA-CAPEX 800 626.6 525.4 EBITDA: actual FY08/Q1-3 X4/3 400 332.9 135.6 149.9 0.9 EBITDA-CAPEX 0 EBITDA -148.9 CAPEX -293.7 -276.5 -400 (Yearly plan) *CAPEX on acquisition basis -389.8 FY05 FY06
Slide 37: EBITDA-CAPEX (by segment)
EBITDA-CAPEX (by segment) <bn JPY> Mobile Communications BB Infrastructure 200 200 100 174.5 100 150.0 13.0 33.4 49.0 43.2 1.2 0 0.0 0 FY05 FY06 FY07 FY08 Q1-3 FY05 FY06 FY07 FY08 Q1-3 Yearly Nine Months Yearly Nine Months 200 100 Internet Culture Fixed-line Telecommunications 4.9 26.1 22.6 100 0 -6
Slide 38: Cash Flow
Cash Flow Consolidated Cash Flow: Quarterly Trend <bn JPY> Operating CF Investing CF Financing CF FCF 250 200 150 100 52.1 49.9 50 10.4 35.5 0 -0.4 -16.4 -50 -37.8 -100 -87.8 -150 -138.9 -200 06/Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Free Cash Flow (FCF) = cash flows from operating activities + cash flows
Slide 39: Cash Position
Cash Position <bn JPY> Cash Position 653.9 661.0 604.9 600.9 600 165.0 185.0 119.0 119.0 525.9 525.0 100.0 Unused portion of credit line 101.0 423.3 facility 400 36.0 Cash&cash equivalents 485.9 481.9 468.9 496.0 200 425.9 424.0 387.3 0 e/o Jun e/o Sep e/o Dec e/o Mar e/o Jun e/o Sep e/o Dec 07 07 0
Slide 40: Current Portion of Liabilities Details (e/o Dec 2008)
Current Portion of Liabilities Details (e/o Dec 2008) Short-term Borrowings 288.1 <bn JPY> Credit line facility SB 165.0 Cash receipts as collateral relating to 90.0 marketable security lending transactions Bank loans SB 27.5 Others 5.6 Current portion of Long-term Borrowings 269.4 Securitization of
Slide 41: Securitization of Installment Receivables
Securitization of Installment Receivables ¾ Continue securitization of installment receivables going forwards Securitization of Installment Receivables <bn JPY> 250 223.1 230.9 219.0 218.8 Balance 193.4 200 142.1 150 88.1 100 <bn JPY> 50 100 88.1 0 80 23.0 71.5 64.8 56.1 57.2 60 28.0 20.8 45.3 45.6
Slide 42: Reduce Debt
Repayment Resources & Cash Position Reduce Debt Financial Indices 42
Slide 43: Interest-bearing Debt Status (by item)
Interest-bearing Debt Status (by item) Interest-bearing Debt <bn JPY> Securitization of installment sales 3,000 receivables obligations 2,627.1 SBM Loan 2,606.3 2,557.3 2,532.9 2,545.3 88.1 2,494.9 142.1 2,432.2 Vodafone subordinate 193.4 219.0 223.1 230.9 218.8 loan Yahoo Japan Corporation borrowin
Slide 44: Balance of Lease Obligations
Balance of Lease Obligations Balance of Lease Obligations <bn JPY> 3,000 Finance leases (off balance) Finance leases (on balance) 2,000 1,000 415.5 452.6 492.1 484.9 481.4 494.5 468.7 187.2 179.5 173.6 166.0 157.5 149.5 195.4 220.0 265.3 312.5 311.2 315.3 336.9 319.2 0 e/o Jun e/o Sep e/o Dec e/o Ma
Slide 45: Net Interest-bearing Debt Balance
Net Interest-bearing Debt Balance Net Interest-bearing Debt <bn JPY> Securitization of installment sales receivables obligations 3,000 Net interest-bearing debt (excl. securitization of installments) 2,141.2 2,124.3 2,119.3 2,088.3 2,036.8 2,070.9 2,044.9 88.1 142.1 2,000 193.4 223.1 230.9 219.0 218
Slide 46: Reduce Debt: SBM Loan
Reduce Debt: SBM Loan ¾ SBM loan repayment exceeds forecast SBM Loan Cumulative Repayment Amount <bn JPY> 200 181.1 158.2 Mobile 150 Communications 126.7 leverage ratio* 100 89.5 104.0 x3.7 70.9 (FY08/Q3) 54.5 50 23.8 *Leverage ratio = interest-bearing debt / EBITDA (annualized) 0 e/o Jun e/o Sep e/
Slide 47: Reduce Debt: Debt Balance After Mobile Business Acquisition
Reduce Debt: Debt Balance After Mobile Business Acquisition ¾ Repayment exceeds forecast <bn JPY> 1,400 1,200 1,000 Forecast Steadily repaying 800 600 400 Minimum 200 0 * Loan started: Nov 2006 09 10 11 12 13 14 15 16 17 18 e * WBS balance borrowed by SBM nc 20 20 20 20 20 20 20 20 20 20 ala FY FY F
Slide 48: Reduce Debt: Bond Redemption Schedule
Reduce Debt: Bond Redemption Schedule ¾ Secure sufficient cash position in accordance with the redemption schedule <bn JPY> Repayment Resources Bond Redemption Schedule 1,000 SB straight bonds SBT straight bonds 800 SB convertible bonds (*2) 600 400 799.0 CB 626.6 200 387.3 <50.0> <69.0> 0 45.0 36.4
Slide 49: Reduce Debt: Corporate Bond Details
Reduce Debt: Corporate Bond Details (m JPY) Interest rate Mar 08 Jun 08 Sep 08 Dec 08 Company name Bond Issue date Maturity date Collateral Change (%/year) balance balance balance balance 19th series Unsecured Straight Bond 2005/1/31 2010/1/29 1.97 None 19,000 19,000 19,000 19,000 － 20th series Unse
Slide 50: Improve Various Financial Indices
Repayment Resources & Cash Position Reduce Debt Improve Various Financial Indices 50
Slide 51: Improve Indices: (1) Interest-bearing Debt/EBITDA Multiple
Improve Indices: (1) Interest-bearing Debt/EBITDA Multiple ¾ Combine reduction of interest-bearing debt and expansion of EBITDA Interest-bearing Debt/EBITDA Multiple (Ref.) Net Interest-bearing Debt/EBITDA Multiple (times) (times) 10.0 10.0 7.5 7.5 6.7 4.8 5.0 5.0 4.1 4.0 3.7 3.6 3.3 3.0 2.5 2.5 0.0
Slide 52: Improve Indices: (2) Equity Ratio
Improve Indices: (2) Equity Ratio ¾ Improve equity ratio through steady build up of profit Actual Basis (Ref.) Considering Unrealized Gain (bn JPY) (bn JPY) 2,000 30% 2,000 60% Shareholders' equity Shareholders' equity (considering unrealized gain) Equity ratio Equity ratio (considering unrealized g
Slide 53: Improve Indices: (3) Debt/Equity Ratio
Improve Indices: (3) Debt/Equity Ratio ¾ Ratio improving steadily Debt/Equity Ratio Net Debt/Equity Ratio (times) (times) 14.0 14.0 D/E ratio Net D/E ratio 12.0 D/E ratio (excl. Mobile) 12.0 Net D/E ratio (excl. 10.0 9.0 10.0 8.0 7.6 8.0 6.6 6.3 6.0 6.0 5.3 5.3 4.1 3.9 4.0 4.0 2.5 2.3 2.9 2.4 1.8 1.
Slide 54: Improve Indices: (4) Interest Coverage Ratio
Improve Indices: (4) Interest Coverage Ratio ¾ Maintain stable trend Quarterly Interest Coverage Ratio (*) Yearly Interest Coverage Ratio (*) (times) (times) 14 14 Interest coverage ratio Interest coverage ratio 12 12 10 10 8 8 6.1 6.1 6.3 6.0 5.4 5.6 5.8 5.7 5.4 6 5.0 6 5.0 4 4 2 2 0 0 07/Q1 Q2 Q3
Slide 55: Credit Rating
Credit Rating Maintain rating JCR (AA-) AA-/AA3 Contributing factors to future evaluation Mobile A+/A1 •Increase mobile communications market share, Communications control reduce in ARPU S&P ( ) credit rating (WBS A/A2 structured rating •Reduce debt (senior portion)) A-/A3 •Maintain cash flow in ADS
Slide 56: =m OOftBank
=m OOftBank
Slide 57: Operation
Operation Kazuhiko Fujihara Senior Vice President, CFO, Director SOFTBANK MOBILE Corp. Senior Vice President & CFO, Director SOFTBANK BB Corp. Director SOFTBANK TELECOM Corp. 57
Slide 58: Overview of Telecommunications Businesses
Overview of 3 Telecommunications Businesses ¾ All 3 telecommunications businesses maintain profitability <bn JPY> BB Infrastructure Fixed-line Telecommunications Mobile Communications 304.8 303.7 147.9 134.9 52.0 54.1 45.5 34.8 30.2 36.6 11.3 1.7 07/Q1-3 08/Q1-3 07/Q1-3 08/Q1-3 07/Q1-3 08/Q1-3 07/Q1
Slide 59: Broadband Infrastructure Business
Broadband BroadbandInfrastructure Business Infrastructure Business Fixed-line Telecommunications Business Mobile Communications Business 59
Slide 60: Operating Income, EBITDA (BB Business)
Operating Income, EBITDA (BB Business) <BB-1> ¾ Maintain trend of revenue increase through cost reductions <bn JPY> Operating Income EBITDA 80 80 70.3 Q4 18.2 55.6 Q1-3 54.1 Q1-3 52.0 Q4 15.7 39.7 39.8 18.5 20.1 Q1-3 Q3 Q3 40 Q1-3 36.6 40 9.4 Q4 Q1-3 30.2 15.4 26.8 Q3 14.3 Q3 11.3 7.3 Q3 Q2 17.5 Q2
Slide 61: Yahoo! BB ADSL Lines and ARPU
Yahoo! BB ADSL Lines and ARPU <BB-2> ¾ Number of ADSL lines are decreasing. ARPU on same level. Number of Lines and ARPU Full Charged Users (k lines) (JPY) Basic charge BB Phone 6,000 Modem rental revenue BB Security 5,000 WLAN Yahoo! ISP 5,161 5,007 4,943 4,278 5,000 4,575 4,436 4,427 4,340 4,000 4
Slide 62: CAPEX (BB Business)
CAPEX (BB Business) <BB-3> ¾ CAPEX stabilized within range of depreciation <bn JPY> CAPEX and Depreciation & Amortization (quarterly trend) CAPEXyearly trend 25 100 83.9 CAPEX 20 Depreciation&amortization 15 47.6 50 10 (forecast 6.9 6.7 amount) 6.4 6.4 5.6 5.3 5.3 22.1 21.2 21.9 5 Q1-3 Q4 Q3 10.8 5.
Slide 63: Fixed-line Telecommunications
Broadband Infrastructure Business Fixed-line Telecommunications Mobile Communications 63
Slide 64: Operating Income, EBITDA (Fixed-line Telecommunications Business)
Operating Income, EBITDA (Fixed-line Telecommunications Business) <Fixed-1> ¾ Trend of revenue increase through enhancement of corporate lines <bn JPY> and efficient management Operating Income/Loss EBITDA 20 75 Operating income/loss(nine months) Operating income/loss(full year) 15 -2.3 1.7 11.3 50
Slide 65: Number of Lines and ARPU for OTOKU Line
Number of Lines and ARPU for OTOKU Line <Fixed-2> ¾ Number of lines and ARPU improving due to enhancement of corporate lines Number of Lines ARPU (k lines) (JPY) 1,800 Heisei Denden 12,000 Large Corp. Large Corp. Total SME (SBTP) Corporate lines 1,600 1,540 SME (excl. SBTP) 1,170 (76%) Consumer 10,0
Slide 66: CAPEX (Fixed-line Telecommunications Business)
CAPEX (Fixed-line Telecommunications Business) <Fixed-3> ¾ CAPEX maintains stable trend <bn JPY> CAPEX and Depreciation & Amortization CAPEX (yearly trend) 50 (quarterly trend) 200 186.8 40 CAPEX Depreciation&amortization 150 6 months (Oct – Mar) 30 100 82.6 20 (forecast 50 amount) 9.6 9.4 9.4 9.4 9
Slide 67: Mobile Communications
Broadband Infrastructure Business Fixed-line Telecommunications Mobile Communications 67
Slide 68: Net Sales (SBM consolidated)
Net Sales (SBM consolidated) <Mobile-1> ¾ Decrease in revenue due to decrease in handsets. Increasing trend in Telecom <bn JPY> service revenue. SBM Consolidated Net Sales SBM Consolidated Net Sales Nine Month Comparison Quarterly Comparison Telecom service income Telecom service income Sales of mob
Slide 69: Operating Income (SB consolidated, SBM consolidated)
Operating Income (SB consolidated, SBM consolidated) <Mobile-2> <bn JPY> ¾ Favorable trend sustained. First cycle of installments ended (26 months since introduction) SB Consolidated SBM Consolidated 200 Mobile Communications Segment 200 174.5 155.7 26.5 162.4 Q4 Q1-3 147.9 Q4 25.9 Q1-3 146.8 42.2 Q
Slide 70: EBITDA (SB Consolidated, SBM Consolidated)
EBITDA (SB Consolidated, SBM Consolidated) <Mobile-3> ¾ Favorable trend sustained. <bn JPY> SB Consolidated SBM Consolidated Mobile Communications Segment 400 385.4 400 376.9 80.6 Q4 350.0 321.4 Q4 78.2 Q1-3 304.8 Q1-3 303.7 300 Q4 88.6 Q1-3 298.6 Q1-3 298.7 87.9 300 Q4 Q1-3 261.3 Q1-3 233.4 Q3 108.
Slide 71: Quarterly Net Additions
Quarterly Net Additions <Mobile-4> <k lines> ¾ No.1 in net additions for 20 consecutive months 1,000 973 FY08/Q3 net additions 367k 800 612 <Breakdown> 561 600 531 Postpaid +398k 526 521 412 Prepaid -31k 367 400 190 FY08/Q1-3 net additions 200 125 93 67 25 30 0 -74 Others 46% -200 [FY] 1 1 1 1 2 3 0
Slide 72: Total Subscribers, 3G Subscribers
Total Subscribers, 3G Subscribers <Mobile-5> ¾ Number of total subscribers is growing steadily. 3G subscribers increase (over 85%). <k lines> 20,000 3G 2G Jan 1st 2009 cumulative subscribers exceed 20m 15,000 e/o Dec 2008 19,999k Cumulative subscribers: 3G subscribers: 17,248k 10,000 3G ratio: 86.2%
Slide 73: Churn Rate
Churn Rate <Mobile-6> ¾ Churn rate maintains decreasing trend Churn Rate Churn Rate (3G postpaid) (comp. to other operators SOFTBANK MOBILE SOFTBANK MOBILE NTT DoCoMo SOFTBANK MOBILE (3G postpaid) 2.0% KDDI 2.0% 1.60% 1.66% 1.21% 0.98% 1.0% 0.91% 1.0% 0.91% 0.88% 0.76% 0.69% 0.0% 0.0% 2 3 4 2 3 4 2
Slide 74: Churn Rate & Upgrade Rate
Churn Rate & Upgrade Rate <Mobile-7> ¾ Upgrade rate maintains trend lower than 2% Upgrade Rate Churn & Upgrade Rate Churn 3.02% 1.60% 07/Q1 3.0% 07/Q2 1.40% 1.20% 07/Q4 07/Q3 2.00% 1.00% 08/Q1 08/Q2 2.0% 0.80% 08/Q3 1.67% 0.60% 1.0% 0.40% 0.20% 0.0% 0.00% 0.00% 1.00% 2.00% 3.00% 4.00% 1 1 1 2 3 4 2
Slide 75: Installment Sales Receivables and Super Bonus Ratio
Installment Sales Receivables and Super Bonus Ratio <Mobile-8> ¾ Maintain high subscription ratio. Installment balance over peak. <bn JPY> Super Bonus Subscription Ratio Installment Sales Receivables Balance Acquisitions (new+upgrades) installment ratio (*1) Installment sales receivables procurement
Slide 76: ARPU
ARPU <Mobile-9> ¾ ARPU decreased: rate of decrease slowing down YoY ¾ Voice ARPU decreased (impact of Monthly Discounts) Increase in data ARPU accelerates. (JPY) 7,000 6,000 5,840 5,560 5,000 4,520 4,170 4,090 Voice 4,000 4,510 4,230 3,000 3,040 2,460 2,300 2,000 Data 1,000 1,710 1,790 1,330 1,330 1
Slide 77: ARPU + Installment Payments
<Reference> ARPU + Installment Payments <Mobile-10> ¾ ARPU & installment payment trend improved (reason for improvement in operating CF) (JPY) 7,000 6,000 5,840 5,580 5,720 5,770 5,520 20 5,000 1,000 1,540 1,680 Installment 4,000 4,510 4,230 3,000 3,040 2,460 2,300 Voice 2,000 Data 1,000 1,710 1,790
Slide 78: CAPEX (Mobile Communications Business)
CAPEX (Mobile Communications Business) <Mobile-11> ¾ Continue effective CAPEX <bn JPY> CAPEX and Depreciation & Amortization CAPEX (yearly trend) (quarterly trend) 100 400 CAPEX 1 month (Apr 06) Depreciation&amortization 300 11 months 72.1 308.4 (May 06-Mar 07) (forecast 60.3 235.3 amount) 52.9 220.
Slide 79: Improvement in Doubtful Accounts
<Reference> Improvement in Doubtful Accounts <Mobile-12> k) Trend in Short-Term Churn 120 100 Big drop in 80 short-term churn 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY07 FY08 79
Slide 80: Allowance for Doubtful Accounts of Installment Receivables/Loss
<Reference> Allowance for Doubtful Accounts of Installment Receivables/Loss <Mobile-13> ¾ Quality of new receivables improving. Reversal of allowance for doubtful accounts. Allowance for Doubtful Accounts of Installment Receivables and (bn JPY) Bad Debt Loss (on P/L) <bn JPY> 12 Incurred before FY08
Slide 81: Trademark and copying notice
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