Softbank Group Corp. · TSE:9984
Softbank — H1 FY2020 Earnings Presentation
128 slides from Softbank's earnings presentation, Nov 11, 2020
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2020
Ver.1 Earnings Results for the Six-month Period Ended September 30, 2020 Investor Briefing November 11, 2020 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment including any offer to buy
Slide 3: Exchange rates and abbreviations
Exchange rates used for translation FY2019 FY2020 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 110.00 107.70 108.98 109.22 107.74 105.88 1 CNY 16.13 15.37 15.46 15.56 15.16 15.27 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 108.83 105.80 1 CNY 15.31 15.54 Abbreviations A
Slide 4: Index
Index Accounting Finance Consolidated Results P 2 Summary of FY2020 Q2 P 2 SBG Standalone Interest-bearing Debt P 30 Changes in Reportable Segments P 3 SBG Share Price and Credit Spread P 4 SBG Standalone Cash Position P 31 Sale of All Shares in Arm – Overview P 4 ¥4.5T Program P 5 SBG Standalone Ne
Slide 5: Accounting
Accounting
Slide 6: Consolidated Results
Consolidated Results FY19 FY20 (JPY bn) Q1-Q2 Q1-Q2 Change YoY Net sales 2,539.7 2,630.5 90.8 3.6% Income before 1,172.7 1,441.5 268.8 22.9% income tax Net income (attributable to owners 421.6 1,883.2 1,461.6 346.7% of the parent) (Reference) Total gain on 216.0 2,033.3 1,817.3 841.5% investments Ac
Slide 7: Change in Reportable Segments
Change in Reportable Segments • In Q1, “Investment Business of Holding Companies” was newly established. Segment income was revised to “income before income tax.” • In Q2, “Brightstar segment” was removed. Changed the name from “SoftBank Vision Fund and Other SBIA-Managed Funds” to “SVF1 and Other S
Slide 8: Sale of All Shares in Arm – Overview
Sale of All Shares in Arm – Overview • In Sep 2020, the Company agreed to sell all of Arm shares to NVIDIA. • As the Company expects to receive approx. 6.7- 8.1% of NVIDIA shares, further upside can be enjoyed as the largest shareholder when the share price goes higher. (USD bn) Transaction Details
Slide 9: Sale of All Shares in Arm – Accounting
Sale of All Shares in Arm – Accounting • Arm will continue to be classified under continuing FY20 FY21 FY22 operations (until the closing of the transaction is deemed Sep. 13 (execution of Closing Purchase Agreement) Approx.18 months highly probable, such as obtaining regulatory approvals). • On clo
Slide 10: Accounting Treatment for Partial Sale of SBKK Shares
Accounting Treatment for Partial Sale of SBKK Shares and After-tax Cash Proceeds • In May and Sep 2020, SBG sold a total of 1.27 bn shares of SBKK held through SBGJ (SoftBank Group Japan Corp.) and received a total of JPY 1.5 tn. ✓ May: 240 mil shares (shareholding ratio: 5.0%) sold for JPY 310.2 bn
Slide 11: Conclusion of Prepaid Forward Contracts Using Alibaba Shares
Conclusion of Prepaid Forward Contracts Using Alibaba Shares • From Apr to Aug 2020, SBG’s wholly owned subsidiaries* entered into several prepaid forward contracts using Alibaba shares and procured an aggregate amount of USD 15.4 bn. • B/S: Financial liabilities relating to sale of shares by prepai
Slide 12: Amendment of Prepaid Forward Contract Using Alibaba Shares
(Q3) Amendment of Prepaid Forward Contract Using Alibaba Shares • Amended in Oct 2020: Revised the cap and floor for the price of shares for the contract entered into in Apr 2020. • The following accounting treatment will be made in FY20Q3 based on the amendment. ✓ Derecognize the financial liabilit
Slide 13: Segment Income - Investment Business of Holding Companies
Segment Income - Investment Business of Holding Companies (JPY bn) P/L FY19 FY20 Items Q1-Q2 Q1-Q2 Gain on investments 729.4 579.6 (1) Gain of 280.3 bn on sales of T-Mobile shares (2) Gain of 296.0 bn on the revaluation of T-Mobile shares continued to be held by the Company (3) Derivative loss of 15
Slide 14: Investment Business of Holding Companies Segment
Investment Business of Holding Companies Segment • Main businesses: Investment activities by SBG and its subsidiaries • Core companies: SBG, SBGC, SBGJ and SB Northstar SBG 67% (and 33% by Masayoshi Son), both indirectly held SBGC Subsidiaries SB Northstar SBGJ and others Indirect Direct Investment
Slide 15: Investment in Listed Stocks and Other Instruments
Investment in Listed Stocks and Other Instruments • In order to diversify assets and manage surplus funds, investments were initially made by SBG directly and later by the newly established SB Northstar from Q2. • SB Northstar is engaged in acquiring and selling listed stocks and derivative and cred
Slide 16: Main Impact on B/S and P/L (Gain (Loss) on Investments)
Main Impact on B/S and P/L (Gain (Loss) on Investments) (JPY bn) Balance in B/S (minuses indicate Gain (loss) recorded in consolidated P/L Account in Investor Investment type liabilities) Account in consolidated P/L consolidated B/S FY20 FY20Q2-end Q1 Q2 Q1-Q2 Realized gain on sales of 64.5 102.8 16
Slide 17: Price Sensitivity of Derivatives at SB Northstar
Price Sensitivity of Derivatives at SB Northstar (FY20Q2-end) The below table shows the impact of changes in market prices on income before income tax; arising from options for acquisition/sale of listed stocks, and stock index futures contracts at SB Northstar, assuming all other variables remain u
Slide 18: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) FY19 FY20 (JPY bn) P/L item Change Q1-Q2 Q1-Q2 Gain on investments at Investment Business of Holding Companies: +579.6 bn Continuing operations (see page 9, 12 and 24 for details) Net sales 2,539.7 2,630.5 +90.8 ・Gain relating to sales of T-Mobile shares: 421.8 bn ・U
Slide 19: 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 2020 Sep 2020 15,636.9 10,406.3 -5,230.6 Cash and cash equivalents 3,369.0 5,105.2 +1,736.2 Increased mainly due to the sale and monetization of assets under the JPY 4.5 trillion program 1 1 Current assets Inves
Slide 20: 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 2020 Sep 2020 14,191.1 7,599.3 -6,591.8 1 Current liabilities related to SB Northstar 1 A: Short-term borrowings to be used in transactions for listed stocks: 364.3 bn Interest-bearing debt 3,845.2 A 2,900.8 -94
Slide 21: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2020 Sep 2020 7,372.9 8,420.6 +1,047.7 Common stock 238.8 238.8 - Capital surplus 1,490.3 2,388.0 +897.7 Changes in interests in subsidiaries resulting from the partial sale of SBKK shares: +932.4 bn Other equity ins
Slide 22: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) FY20 (JPY bn) C/F item Q1-Q2 As SB Northstar’s primary business is to frequently trade marketable 783.7 Subtotal of cash flows from operating activities securities, investments made by the company are recorded in C/F from C/F from -132.7 Interest paid operating activ
Slide 23: Segment Income - SVF1 and Other SBIA-Managed Funds
Segment Income - SVF1 and Other SBIA-Managed Funds (JPY bn) FY19 FY20 P/L Q1-Q2 Q1-Q2 Items Gain on investments at SVF1 and SVF2 -529.3 1,411.6 Sale of a portion of shares in 4 portfolio companies and all shares in 6 portfolio companies Realized gain on sales of investments 34.8 141.4 (including sha
Slide 24: Appendix
Appendix
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 2020 Sep 2020 Amortization exchange Others rate 3,998.2 3,941.3 *1 Goodwill Arm 2,554.1 2,515.9 - -38.2 - SBKK 907.5 907.5 - - - ZOZO 212.9 212.9 - - - Technologies 395.6 370.8 Main b/d A
Slide 26: Changes in Presentation of P/L
Changes in Presentation of P/L ➢ In FY20Q1, “Gain (loss) on investments” is newly P/L after the revision of the presentation presented ➢ Operating income is no longer used Net sales Gross profit • The importance of investment activities has increased in the consolidated results, following the comple
Slide 27: Completion of the Merger of Sprint / T-Mobile US, Inc.
Completion of the Merger of Sprint / T-Mobile US, Inc. • On April 1, 2020, the merger of Sprint / T-Mobile US, Inc. was completed. • The Company received T-Mobile’s 304,606,049 shares and contingent consideration (the right to acquire T-Mobile’s 48,751,557 shares for no additional consideration if c
Slide 28: Partial Sale of T-Mobile Shares and Evaluation at Q2-end
Partial Sale of T-Mobile Shares and Evaluation at Q2-end The Company sold (1) and (2) below in FY20Q1 and received JPY 1,830.4 bn. With additional sales of (3) and (4) in Q2, the Company received JPY 2,099.7 bn in aggregate for FY20Q1-Q2. P/L (FY20Q1-Q2) (JPY bn) Evaluation at Q2-end Gain relating t
Slide 29: Consolidation of Earnings of PayPay
Consolidation of Earnings of PayPay PayPay has consistently been classified as a subsidiary of SBG since its founding in June 2018. FY18 FY19 FY20 May 15, 2019 SBG: 50% Voting ratio SBKK: 50% SBKK: 25% Yahoo Japan (currently Z Holdings): 50% Z Holdings: 25% SBG Subsidiary (Other segment) Subsidiary
Slide 30: SoftBank
SoftBank
Slide 31: Finance
Finance SBG standalone financial numbers are calculated by excluding numbers of self-financing entities from the consolidated numbers, unless otherwise stated. Major self-financing entities are SBKK, Arm, SVF1, SVF2, Brightstar, PayPay, Fortress, SB Energy, etc.
Slide 32: Summary of FY2020 Q2
Summary of FY2020 Q2*1 Completed the asset monetization under the ¥4.5T Program. Diversifying assets holdings while being firmly committed to our financial policies. Asset ⚫ Completed the asset monetization under the ¥4.5T Program - Asset monetization completed in September 2020. monetization - SBKK
Slide 33: Progress of ¥4.5T Program - Status of Assets - Financial Condition
- Progress of ¥4.5T Program - Status of Assets - Financial Condition - Financial Strategy - ESG Initiatives Finance 3
Slide 34: SBG Share Price and Credit Spread
SBG Share Price and Credit Spread Both equity and credit markets favorably perceived the progress of ¥4.5T Program. SBG share price*1 As of Nov 6 bps SBG CDS*2 (YTD) (YTD) 150 600 141 (SBG) 544bps 133 (Nasdaq) 125 400 100 99 (Dow) As of Nov 6 96 (TOPIX) 256bps 200 75 ¥4.5T Program announced ¥4.5T Pr
Slide 35: ¥4.5T Program
¥4.5T Program Large-scale returns to shareholders and creditors by asset monetization Asset sale and monetization up to ¥4.5T Returns to Financial Shareholders Improvements Share repurchase Debt repayment up to ¥2T Bond buyback (¥2.5T in total with the previously- Cash reserves announced repurchase
Slide 36: Asset Monetization (¥4.5T Program)
Asset Monetization (¥4.5T Program) ¥4.5T asset monetization already completed; monetized ¥5.6T in just 6 months Prepaid forward Alibaba April to August contracts, etc. $15.4B $15.4B May Block trade *1 ¥0.3T SBKK September Offering *1 ¥1.2T $14.4B June to July Public offering, etc. $18.1B T-Mobile Ju
Slide 37: Offering of SBKK Shares
Offering of SBKK Shares Acquired a mobile telecom business in 2006; monetized ¥3.8T since its listing. Will continue to hold the asset over the medium to long term. Total ¥6.1T Disposal at IPO (shareholding ratio*1:33.7%) ¥2.3T Monetized Block trade (shareholding ratio*1: 5.0%) ¥0.3T ¥3.8T Offering
Slide 38: Debt Reduction
Debt Reduction Reduced debt by ¥1.5T bps SBG CDS*4 (YTD) Repurchase of domestic bonds in July*1 600 Total repurchase amount ¥0.2T 544bps (face value) Total Repayment of Alibaba margin loan in July*2 400 ¥1.5T Fully repaid $9.4B As of Nov 6 256bps (¥1.0T*3) Early repayment of senior loan in September
Slide 39: Returns to Shareholders (Share repurchase)
Returns to Shareholders (Share repurchase) Share repurchase brings higher shareholder value per share; SBG shares outperformed others. Share price performance Share repurchase of Japanese large-cap companies (March 19, 2020*2 ~ November 6, 2020) (Market cap, ¥ T) Authorized amount ¥2.5T #1 Toyota (2
Slide 40: Return to Shareholders (Dividend)
Return to Shareholders (Dividend) Maintained an interim dividend of ￥22 /share Dividend per share*1 (¥) 22.0 22.0 ¥22.0 11.0 11.0 11.0 11.0 11.0 11.0 FY16 FY16 FY17 FY17 FY18 FY18 FY19 FY19 FY20 (Interim) (Year-end) (Interim) (Year-end) (Interim) (Year-end) (Interim) (Year-end) (Interim) *1 Dividend
Slide 41: Progress of ¥4.5T Program (Wrap-up)
Progress of ¥4.5T Program (Wrap-up) Monetization completed. (¥ T) 1.1 • Monetized over ¥4.5T 1.0 Cash reserves, etc. Financial 1.5 improvements • The use of the surplus Executed proceeds will be decided ¥4.5T Program 4.5 debt reduction considering financial 1.3 balance. Remaining amount of share rep
Slide 42: Progress of ¥4.5T Program (LTV)
Progress of ¥4.5T Program (LTV) Excluding asset-backed finance LTV trend*1 25% • Rapid execution of large-scale monetization, taking full 21.9% advantage of highly liquid 18.4% 18.0% 17.9% assets *2 • Flexible financial 11.8% 9.0% management in response to market conditions as articulated in the fin
Slide 43: Progress of ¥4.5T Program - Status of Assets - Financial Condition
- Progress of ¥4.5T Program - Status of Assets - Financial Condition - Financial Strategy - ESG Initiatives Finance 13
Slide 44: Equity Value of Holdings
Equity Value of Holdings Equity value of holdings increased to ¥30.9T driven mainly by higher share prices of investments. 30.9 Excluding asset-backed finance (¥ T) Composition 26.3 60％ Alibaba 24.3 6％ SBKK 9％ SVF1 18.6 3％ SVF2 13.0 4％ T-Mobile (formerly Sprint) 12.6 8％ Arm 7％ Investments in listed
Slide 45: Price Trend of Listed Stockholdings (YTD)
Price Trend of Listed Stockholdings (YTD) Alibaba stock price remains strong. SBKK is trending above the offer price in September. 160 160 Alibaba T-Mobile 150 150 140 140 130 130 120 120 110 Nasdaq 110 S&P500 100 100 Nikkei 90 90 80 80 SBKK 70 70 60 60 50 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Slide 46: Alibaba Share Price Trend
Alibaba Share Price Trend Alibaba's share price has kept rising as a leading technology company. Alibaba’s share price Top 10 Largest public companies by （listing-to-date） market capitalization (as of November 6, 2020) *2 ($ B) 0 500 1,000 1,500 2,000 $290.5 Apple 2,018 Annual Growth Rate of Saudi A
Slide 47: SVF1 & 2: Investment Highlights
SVF1 & 2: Investment Highlights (SBG consolidated basis) Significant growth in asset values driven mainly by a strong demand for online services under COVID-19 and recovery in public stock market. SVF1 SVF2 ($ B) ($ B) 100 90.1B 10 82.7B Exited 1.8 x 7.6 B 80 8 Currently held 1.4 x 60 and listed 6 C
Slide 48: Gain and Loss on Investments (SBG Consolidated Basis)
Gain and Loss on Investments (on a SBG Consolidated Basis) Recorded ¥1.1T gain on investments in FY20Q2. (¥ T) 1.1 T (sum of SVF1 and SVF2) On Apr. 1, 2020, Sprint ceased to be a subsidiary of the Company following the completion of the merger between Sprint and T-Mobile US, Inc. Given that investme
Slide 49: Sale of Shares in Arm to NVIDIA
Sale of Shares in Arm to NVIDIA Remain committed to the long-term success of NVIDIA as a major shareholder (approximately 6.7- 8.1% ownership expected). Received by the Company as a deposit*1 Cash $2.0B Cash $10.0B To be received by the Company*2 Transaction upon closing value up to NVIDIA shares*3
Slide 50: Strength of SBG's Portfolio
Strength of SBG’s Portfolio Diversified portfolio comprising leading tech companies with high liquidity Proportion of listed companies Arm (excl. the value related to asset-backed finance) Semicon Amazon Alphabet Facebook Salesforce Adobe SBKK Telecom 77% *2 PayPal T-Mobile Telecom Listed securities
Slide 51: Overview of Asset Management Subsidiaries
Investments in Listed Stocks and Other Instruments; Overview of Asset Management Subsidiaries Fund Name SB Northstar LP Location Cayman Capital*1 $555 million Ownership*2 SBG 67%, Masayoshi Son 33％ Fund life 12 + 2 years *1 The total capital of the Company’s 3 subsidiaries investing in SB Northstar
Slide 52: Purpose and Management Policy
Investments in Listed Stocks and Other Instruments; Purpose and Management Policy Purpose Diversify assets Manage surplus funds Management Policy Investment theme = Investing in Vision. Provide leading listed tech companies with risk capital with a focus on IT innovation and emerging business models
Slide 53: Investment Gain (Loss) for FY20 Q1-2
Investments in Listed Stocks and Other Instruments; Investment Gain (Loss) for FY20 Q1-2 ¥263.8B Valuation gain +¥96.6B Valuation gain (loss) + Realized gain Realized gain (loss) +¥167.2B -¥103.1B +¥131.8B 0.15B Valuation gain (loss) -¥131.7B + Realized gain (loss) -292.3B 現物株式 Actual stocks 現物株式 Ac
Slide 54: Actual Stocks (as of Sep 30, 2020)
Investments in Listed Stocks and Other Instruments; Actual Stocks（as of Sep 30, 2020) ($ M) Fair value Adobe 685 Alphabet Class A 1,221 Alphabet Class C 206 Amazon.com 6,331 Facebook 2,222 Microsoft 370 Netflix 1,024 PayPal Holdings 249 Salesforce.com 69 TSMC ADR 256 Zoom Video Communications 1,801
Slide 55: Options (as of Sep 30, 2020)
Investments in Listed Stocks and Other Instruments; Options (as of Sep 30, 2020) $24.5B (net) $72.1B $3.4B (net) Long call option of listed stocks $4.7B -$1.3B Short call option of listed stocks -$47.6B Fair value Notional principal Finance 25
Slide 56: Risk Management
Investments in Listed Stocks and Other Instruments; Risk Management All investments are conducted in accordance with IC-approved investment strategy and risk management policy. Under the responsibility of the CRO, Counterparty Liquidity exposure Daily P/L Market risk are monitored on a daily basis.
Slide 57: Progress of ¥4.5T Program - Status of Assets - Financial Condition
- Progress of ¥4.5T Program - Status of Assets - Financial Condition - Financial Strategy - ESG Initiatives Finance 27
Slide 58: LTV
LTV Excluding asset-backed finance 17.9% 11.8% Secured an even larger financial cushion with the progress of the ¥4.5T program FY19Q4 FY20Q2 (Mar' 20) (Sep' 20) * As of the end of each quarter * See "LTV Calculation: SBG Standalone Net Debt" and "LTV Calculation: SBG Standalone Equity Value of Holdi
Slide 59: Cash Position
Cash Position Always maintain ample cash position, more than the amount of the bond redemptions for two years Cash position Bond redemption schedule *3 ¥2.4T *1, 2 （¥ B) Bond redemptions for the next 2 years (¥1.4T) ＞ 505.6 897.0 827.6 890.5 Sep' 20 Oct' 20 - Sep' 21 Oct' 21 - Sep' 22 Oct' 22 - Sep'
Slide 60: SBG Standalone Interest-bearing Debt
SBG Standalone Interest-bearing Debt*1 Main variance factors from June-end 2020 Decreased by debt repayment Bank loans and CPs (-¥341.3B) Bonds (-¥158.6B) (¥ B) Margin loan (-¥555.6B) Financial liabilities relating to prepaid forward contracts (+¥191.5B) 9,803.6 9,319.8 Breakdown as of September-end
Slide 61: SBG Standalone Cash Position
SBG Standalone Cash Position*1 Maintained ample cash position through large-scale monetization. (¥ B) 4,601.6 4,158.1 SB Northstar (Cash and deposits and listed stocks under management) 2,175.0 Main variance factors from June-end 2020 2,093.9 to September-end 2020 1,728.9 1,818.3 Increase Decrease S
Slide 62: SBG Standalone Net Interest-bearing Debt
SBG Standalone Net Interest-bearing Debt*1 Excluding Net Interest-bearing Increased through returns to shareholders and Debt of SB Northstar management of cash on hand (¥ B) 6,528.9 6,240.1 6,463.0 5,522.9 5,645.5 Adjustments relating to finance 2,887.1 Asset-backed finance ( -¥2,861.9B) Hybrid fina
Slide 63: Bond Redemption Schedule
Bond Redemption Schedule Exploring various redemption options with refinancings as a main option (¥ B) 1,221.6 Domestic straight bonds Domestic subordinated bonds Domestic hybrid bonds 455.6 924.1 Foreign currency-denominated senor bonds 890.5 Foreign currency-denominated hybrid bonds 291.0 424.1 58
Slide 64: Progress of ¥4.5T Program - Status of Assets - Financial Condition
- Progress of ¥4.5T Program - Status of Assets - Financial Condition - Financial Strategy - ESG Initiatives Finance 34
Slide 65: Financial Strategy for FY2020
Financial Strategy for FY2020 Flexible financial management adapting to any change Agile financial Firmly keeping management in financial policy response to market conditions Finance 35
Slide 66: Firmly Keeping Financial Policy (1/2)
Firmly Keeping Financial Policy (1/2) 1. Manage LTV below 25% in normal times (upper threshold of 35% even in times of emergency) 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 F
Slide 67: Firmly Keeping Financial Policy (2/2)
Firmly Keeping Financial Policy (2/2): Our Policy on Supporting Portfolio Companies Portfolio company finances to be No rescue self-financing package Finance 37
Slide 68: Agile Financial Management in Response to the Market
Agile Financial Management in Response to the Market Achieving both shareholder return and financial improvement by implementing the ¥4.5T Program Appropriately control the balance between new investments and exits (prepare for future investment opportunities) Financial management focused on dialogu
Slide 69: Progress of ¥4.5T Program - Status of Assets - Financial Condition
- Progress of ¥4.5T Program - Status of Assets - Financial Condition - Financial Strategy - ESG Initiatives Finance 39
Slide 70: SBG's Approach to ESG
SBG's Approach to ESG Continue essential initiatives for ESG • Take the initiative in addressing changing social issues and lead to trends in society • Continue to discuss what we should address and put them into practice Further strengthen the communication • With the appointment of Chief Sustainab
Slide 71: E: Environment Initiatives - Renewable Energy
E: Environment Initiatives - Renewable Energy - SBG ・Recognized the importance of renewable energy earlier than Paris Agreement and SDGs in 2015 ・Contributing to lay groundwork to the spread of renewable energy in Japan and overseas since 2011 - Established the Renewable Energy Governors’ Alliance (
Slide 72: S: Social Initiatives - COVID-19 Responses
S: Social Initiatives - COVID-19 Reponses - SBG ・Quick responses to changing situations ・Proactive initiatives for early normalization of medical and economic activities Lack of personal protective Increased need for PCR testing Unclear infection situation in Japan equipment for medical personnel to
Slide 73: S: Social Initiatives - SB Opportunity Fund
S: Social Initiatives - Diversity & Inclusion - Funds Actively supporting underrepresented founders to create a more diverse society “SB Opportunity Fund” The largest venture fund dedicated solely to underrepresented racial minorities in US ($100M) Targeting Black, Latinx, Native Americans founders
Slide 74: S: Social Initiatives - Emerge Program
S: Social Initiatives - Diversity & Inclusion - Funds “Emerge Program” Targeting underrepresented founders of diverse races, LGBTQ, etc. Invested in 12 companies so far, and 5 of them closed their rounds Accelerator program that connect with SoftBank ecosystem Finance 44
Slide 75: S: Social Initiatives - Simprints
S: Social Initiatives - Gap Elimination Efforts- Arm Contributions to gap elimination and social innovations using IT “Simprints” The mechanism that allows people to use fingerprint as ID Accessible to life services (medical care, education, banking etc.) Introduced in 11 countries | Provided to 250
Slide 76: S: Social Initiatives - IoT Challenge
S: Social Initiatives - IT Professionals Development - SoftBank KK Providing programming education opportunities for the development of future IT professionals “IoT Challenge” Provide creative programming education, that combines robot programming using Pepper and highly scalable micro:bit Finance 4
Slide 77: G: Governance
G: Governance Implementing governance appropriate for a strategic investment company while balancing agile decision-making and risk mitigation For higher transparency and trust (efforts to gain better understanding from the capital markets) Establishment of the Improve transparency in the process of
Slide 78: G: Governance
G: Governance Corporate governance enhancements and appointment of corporate officers • Increased the proportion of External Board Directors on the Board: four external out of nine ✓ External ratio increased : 4/13 (30.8%) ➡ 4/9 (44.4%); top-ranked ratio among companies listed on the first section o
Slide 79: Appendix
Appendix
Slide 80: Direction of Financial Management (illustrative)
Direction of Financial Management (illustrative) • Conservative financial management with asset monetization in the COVID-19 market environment • Securing financial stability and preparing for future investment opportunities Value increases in the mid-term; Improving LTV Enables balancing elevated l
Slide 81: SBG Credit Rating Trend
SBG Credit Rating Trend Aim to improve credit rating under the investment holding company rating criteria Acquisition of Acquisition of Acquisition Acquisition Listing Japan Telecom Vodafone KK of Sprint of Arm of SBKK A+ 14 A 13 A- 12 JCR (A－) Outlook Stable BBB+11 BBB 10 BBB- 9 BB+ 8 S&P (BB＋) Out
Slide 82: LTV Calculation: SBG Standalone Net Debt
LTV Calculation: SBG Standalone Net Debt (L) Adjusted SBG standalone net debt*1 ¥3.64T (V) SBG standalone = 11.8% ¥30.94T equity value of holdings = - - Adjusted SBG Consolidated Net debt at self- Other adjustments standalone net debt net debt financing entities (¥ T) 3.64 9.07 2.54 2.89 SoftBank se
Slide 83: LTV Calculation: SBG Standalone Equity Value of Holdings
LTV Calculation: SBG Standalone Equity Value of Holdings (L) Adjusted ¥3.64T SBG Standalone Net Debt (V) SBG Standalone = 11.8% Equity Value of Holdings ¥30.94T SBG standalone Interest of SBG in Other, investments in holdings = Major shares + SVF1/SVF2 + listed stocks, etc. (¥ T) 30.94 24.18 3.67 3.
Slide 84: SVF1: Capital Commitment
SVF1: Capital Commitment (as of September 30, 2020) ($ B) 98.6 (83.9) SBG 33.1*1 （28.4） 65.5 （55.5） Third-party limited partners * Numbers in brackets represent amounts contributed. * 1 The presented SBG’s committed capital to SVF1 includes approximately $8.2 billion of an obligation satisfied by us
Slide 85: SVF1 Snapshot
SVF1 Snapshot (as of Sep. 30, 2020) 1. Gross Return to SVF1 is the sum of the cumulative Gross Realized Proceeds from exited and partially exited investments and Fair Market Value of unrealized investments held by SVF1 as of September 30, 2020. Gross Gain/(Loss) to SVF1 is the difference between the
Slide 86: SVF1 Listed Portfolio Companies
SVF1 Listed Portfolio Companies (as of Sep. 30, 2020) ※3 1. Listed company total only includes companies that have become publicly listed on or after the date SVF1 made its initial investment in the companies. The companies indicated as fully exited are fully exited companies that became publicly li
Slide 87: SVF2 Snapshot
SVF2 Snapshot (as of Sep. 30, 2020) 1. Gross Return to SVF2 is Fair Market Value of unrealized investments held by SVF2 as of September 30, 2020. Gross Gain/(Loss) to SVF2 is the difference between the Gross Return to SVF2 and Investment Cost to SVF2. Gross Realized Proceeds are before tax and expen
Slide 88: SVF2 Listed Portfolio Companies
SVF2 Listed Portfolio Companies (as of Sep. 30, 2020) 1. Listed company total only includes companies that have become publicly listed after SVF2 made its initial investment in the companies. 2. Gross Return = Unrealized value. SBG’s return on any SVF2 portfolio company is not the full return amount
Slide 89: Subsequent Event: Finance Using Collar Transaction
Subsequent Event: Finance Using Collar Transaction SBG executed amendments to the outstanding collar transaction by way of restriking to pursue the upside from the rise in stock price. Transaction costs recorded as a one-time loss. Pre-amendment Post-amendment Gain from Gain from collar transaction
Slide 90: Consolidated Interest-bearing Debt
Consolidated Interest-bearing Debt*1 (¥ B) Interest-bearing debt ＋ Lease liabilities 19,250.0 18,088.6 15,869.1 15,497.8 7,969.0 Of which SB Northstar*2 14,272.2 364.3 7,616.9 307.1 283.5 9,803.6 SBG standalone 721.3 9,319.8 624.3 8,281.3 Others (Arm, etc.) SVF1 5,351.1 4,727.6 SoftBank segment 328.
Slide 91: Consolidated Cash Position
Consolidated Cash Position*1 (¥ B) 6,426.8 5,918.7 2,175.0 Of which SB Northstar*2 4,005.9 SBG standalone 3,553.2 4,158.1 4,601.6 Others (Arm, etc.) 3,244.6 SVF1 2,093.9 1,728.9 SoftBank segment 1,818.3 Sprint segment*3 322.9 428.6 459.1 411.1 245.6 96.5 140.5 408.1 256.7 876.9 900.1 197.2 1,044.7 1
Slide 92: Consolidated Net Interest-bearing Debt
Consolidated Net Interest-bearing Debt*1 (¥ B) Interest-bearing debt ＋Lease liabilities – Cash position 15,696.8 14,082.7 6,240.1 11,027.6 10,881.7 (Excl. SB Northstar） 5,522.9 9,950.5 -1,810.7 SB Northstar*2 580.8 9,071.0 378.7 6,463.0 SBG standalone 5,645.5 4,718.2 4,451.0 3,850.7 Others (Arm, etc
Slide 93: SoftBank Vision Funds Update
QUARTER ENDED SEPTEMBER 30, 2020 SoftBank Vision Funds Update NAVNEET GOVIL Managing Partner & Chief Financial Officer SoftBank Investment Advisers
Slide 94: 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 95: 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 96: Topics
4 Topics 01- Progress & Highlights 02- Performance & Impact on SoftBank Group 03- In Focus: Monetization Strategy
Slide 97: Progress & Highlights
Progress & Highlights Investment Advisers
Slide 98: Update on SoftBank Vision Fund 2
PROGRESS & HIGHLIGHTS 6 Update on SoftBank Vision Fund 2 As of September 30, 2020 Total Commitment1 Acquisition Cost2 Total Fair Value3 Number of Investments4 CURRENT PORTFOLIO Transportation Health Tech Education Real Estate Consumer Enterprise & Logistics AV JV BEIKE Footnotes: 1. Total Commitment
Slide 99: SVF1: Key Developments
PROGRESS & HIGHLIGHTS 7 SVF1: Key Developments Three-Month Period Ended September 30, 2020 New Public Full Announced Listings1 Exits2 Transactions3 + + (Announced SPAC) Footnotes: 1. Relay Therapeutics – Source: Press release, “Relay Therapeutics Announces Pricing of Initial Public Offering”, July 1
Slide 100: SVF1: Portfolio Fair Value Changes
PROGRESS & HIGHLIGHTS 8 SVF1: Portfolio Fair Value Changes COVID-19 Cumulative Gain Cumulative Gain Inception to Dec 2019 Mar 2020 Jun 2020 Sep 2020 Inception to Sep 2020 ($8.9B) Quarterly Fair Value Uplifts & Write-Downs Fair Value Changes indicates the increase/decrease in Fair Value of unrealized
Slide 101: Performance Snapshot
9 SoftBank SoftBank Vision Fund 1 Group Total Commitment Total Commitment $98.6B $28.1B PROGRESS & HIGHLIGHTS Acquisition Cost1 SBG Paid-In Capital Performance $83.0B $24.1B Cumulative Investment Gains1 SBG Cumulative Increase in Value4 Snapshot $9.6B $2.0B As of September 30, 2020 Total Fair Value2
Slide 102: SVF1: Portfolio Companies
PROGRESS & HIGHLIGHTS 10 SVF1: Portfolio Companies As of September 30, 2020 PRIVATE Number of Investments1 Current Portfolio Companies2 PUBLIC Full Exits3 Footnotes: 1. Number of Investments includes investments in portfolio companies made by SoftBank Vision Fund 1 and joint-ventures with existing p
Slide 103: SVF1: Portfolio Composition By Sector
PROGRESS & HIGHLIGHTS 11 SVF1: Portfolio Composition By Sector As of September 30, 2020 Transportation Real Estate Consumer Fintech Enterprise Health Tech Frontier Tech & Logistics 7% 18% 6% 41% 5% 7% 16% COST $10.0B $11.4B $4.7B $34.0B $2.1B $2.2B $10.8B FAIR VALUE $5.3B $14.0B $4.5B $32.6B $3.5B $
Slide 104: SVF1: Measurable Value in Our Portfolio
PROGRESS & HIGHLIGHTS 12 SVF1: Measurable Value in Our Portfolio As of September 30, 2020 Total Acquisition Cost1 Cumulative Investment Gains1 Total Fair Value1,3 $83.0B $9.6B $92.6B Realized Investments2 Unrealized Investments FULL & PARTIAL PUBLIC PRIVATE $13.9B $12.0B $66.5B $66.7B $7.7B $8.8B Co
Slide 105: SVF1: Public Listings Since Inception
PROGRESS & HIGHLIGHTS 13 SVF1: 10 Public Listings Since Inception As of September 30, 2020 2 NYSE: IPOB NASDAQ: RLAY NYSE: OCFT NASDAQ: VIR NYSE: UBER GROSS MOIC1 GROSS MOIC1 GROSS MOIC1 GROSS MOIC1 GROSS MOIC1 3.1x 4.0x 0.9x 3.9x 1.1x 3 3 NASDAQ: GH HKG: 1833 HKG: 6060 NASDAQ: TXG NYSE: WORK GROSS
Slide 106: SVF2: 1st Public Listing - Beike (KE Holdings Inc.)
PROGRESS & HIGHLIGHTS 14 SVF2: 1st Public Listing - Beike (KE Holdings Inc.) As of September 30, 2020 TICKER SVF1 - Cost3 Post - IPO Trading Activity4 NYSE: BEKE SEP 30 AUG 13 GROSS MOIC +87% NOV 2019 IPO – AUG 13 2020 Footnotes: 1. IPO Price represents KE Holdings Inc.’s listing price of publicly t
Slide 107: SVF1: Valuations in Recent Funding Rounds
PROGRESS & HIGHLIGHTS 15 SVF1: Valuations in Recent Funding Rounds Pre-Money Valuations Aug 2020 $5.8B Sept 2020 $4.0B Sept 2020 $3.5B Sept 2020 $700M Prior Round: Prior Round: Prior Round: Prior Round: Series E $3.7B Series E $2.5B Series F $1.7B Series E $1.4B Lead Lead Lead Lead Investors: Invest
Slide 108: Performance & Impact on SoftBank Group (SBG)
16 Performance & Impact on SoftBank Group (SBG)
Slide 109: SVF1 Contribution to SBG, Net of 3rd Party Interests
17 SVF1 2019 2020 Six-Month Period Ended Sep 30 Sep 30 Fund Net Profit (Loss)2 ($4.87) $7.87 PERFORMANCE & IMPACT ON SBG Less: Change in 3rd Party Contribution to Interests in Fund 2.57 (4.02) SBG, Net of 3rd SBG LP Income (Loss): (2.30) 3.85 Share of Fund Net Profit (Loss) Party Interests 1 SBG GP
Slide 110: SVF1 Contribution to SBG, Net of 3rd Party Interests
18 SVF1 2020 Inception to Sep 30 Fund Net Profit2 $3.86 PERFORMANCE & IMPACT ON SBG Less: Change in 3rd Party Contribution to Interests in Fund (1.91) SBG, Net of 3rd SBG LP Income: 1.95 Share of Fund Net Profit Party Interests 1 SBG GP Income: Amounts in USD billions 0.48 Management Fees & Performa
Slide 111: Contribution to SBG, Realized and Unrealized Values (SVF1)
19 SBG Paid-In Capital SVF1 PERFORMANCE & IMPACT ON SBG Contribution to SBG, Realized and SBG Total Value3 Unrealized Values Net Asset Value1 (Unrealized Value): As of September 30, 2020 Distributions2 (Realized Value): Footnotes: 1. Net Asset Value includes net changes in Fair Value of financial as
Slide 112: Contribution to SBG, Realized and Unrealized Values (SVF2)
20 SBG Paid-In Capital SVF2 PERFORMANCE & IMPACT ON SBG Contribution to SBG, Realized and SBG Total Value3 Unrealized Values Net Asset Value1 (Unrealized Value): As of September 30, 2020 Accrued Performance Fees2: Footnotes: 1. Net Asset Value includes net changes in Fair Value of financial assets a
Slide 113: In Focus: Monetization Strategy
21 In Focus: Monetization Strategy
Slide 114: SVF1: Investment Approach
22 EARLY STAGE GROWTH/EXPANSION LATE STAGE Growth & Equity Capital Required capital to scale Have proven unit economics Poised to become cash flow positive MONETIZATION STRATEGY SVF1: Investment Approach Cost by Revenue Stage Revenue Up0-50 to $50M $50M to $250M 50-250 $250M to $1B 250-1B Over 1B+ $
Slide 115: SVF1: Fund Life Cycle
MONETIZATION STRATEGY 23 SVF1: Fund Life Cycle Illustrative Timeline Investment Period Value Creation Period Monetization Period There can be no assurance that the operations and/or processes of SBIA and SoftBank Vision Fund 1 described in this Presentation will continue throughout the life of SoftB
Slide 116: SVF1: Disciplined Approach to Monetization
MONETIZATION STRATEGY 24 SVF1: Disciplined Approach to Monetization PUBLIC EXITED3 PUBLIC EXITED3 PUBLIC EXITED3 2 EXITED $13.9B $10.1B EXITED 2 $3.9B EXITED 2 SVF1 PUBLIC 1 Launch $9.9B PUBLIC 1 $12.0B $8.3B PUBLIC 1 MAY 2017 2017 Sep 2018 Sep 2019 Sep 2020 Footnotes: 1. Public includes the Fair Va
Slide 117: Exit Decision Considerations
25 Strategic Competitive Position Geopolitical Uncertainty Macroeconomic Volatility Risk Exposure MONETIZATION STRATEGY Exit Decision Long-term Investor Value Maximization Considerations Returning Capital to LPs Financial Opportunistic Profitability Goals IPO Window Future Growth Inbound Offers Mult
Slide 118: Exit Strategies
26 Public Markets IPO, DPO, SPAC MONETIZATION STRATEGY Strategic Exit Strategies Mergers & Acquisitions Restructuring & Recovery There can be no assurance that the operations and/or processes of SBIA and SoftBank Vision Fund 1 described in this Presentation will continue throughout the life of SoftB
Slide 119: Exit Strategies
27 Public Markets1 IPO, DPO, SPAC MONETIZATION STRATEGY Strategic Exit Strategies Mergers & Acquisitions Restructuring & Recovery 1. Opendoor not publicly listed as of September 30, 2020, the company is expected to become publicly listed via a SPAC acquisition by December 31, 2020. There can be no a
Slide 120: Public Markets
MONETIZATION STRATEGY 28 Public Markets INITIAL PUBLIC OFFERING DIRECT PUBLIC OFFERING SPECIAL PURPOSE ACQUISITION (IPO) (DPO) COMPANY (SPAC) MOIC MOIC MOIC GROSS REALIZED GROSS REALIZED COST1 COST1 COST1 MARKET VALUE4 PROCEEDS2 PROCEEDS3 $334M $450M $31M Dec 2018 Sep 2020 Oct 2017 Sep 2020 Aug 2018
Slide 121: Exit Strategies
29 Public Markets IPO, DPO, SPAC MONETIZATION STRATEGY Strategic Exit Strategies Mergers & Acquisitions Restructuring & Recovery There can be no assurance that the operations and/or processes of SBIA and SoftBank Vision Fund 1 described in this Presentation will continue throughout the life of SoftB
Slide 122: Strategic – Mergers & Acquisitions
MONETIZATION STRATEGY 30 Strategic – Mergers & Acquisitions ENTERPRISE VALUE1 INVESTMENT MOIC2 STRATEGIC RATIONALE ACQUIRED BY Transform Walmart’s position in country with 1.3+ billion people and significant runway for eCommerce penetration ANNOUNCED Help customers accelerate their digital ACQUISITI
Slide 123: Exit Strategies
31 Public Markets IPO, DPO, SPAC MONETIZATION STRATEGY Strategic Exit Strategies Mergers & Acquisitions Restructuring & Recovery OTHER UNDSICLOSED PORTFOLIO COMPANIES There can be no assurance that the operations and/or processes of SBIA and SoftBank Vision Fund 1 described in this Presentation will
Slide 124: SVF1: Performance on Fully Monetized Exits
MONETIZATION STRATEGY 32 SVF1: Performance on Fully Monetized Exits As of September 30, 2020 SVF1 Fully Exited Investments1 Investment MOIC2 1.8x Gross Blended IRR3 95% Gross Realized Proceeds4 $11.2B Footnotes: 1. SVF1 Fully Exited Investments reflects all investments for which 100% of position has
Slide 125: SVF1: Portfolio Evolution
33 Exited2 $13.9B $10.1B Public3 Private4 $9.9B $12.0B $3.9B MONETIZATION STRATEGY $67.7B $66.7B SVF1: Portfolio $8.3B Evolution SVF1 $26.2B Inception Fair Value1 2017 Sep 2018 Sep 2019 Sep 2020 Footnotes: 1. Amounts shown are the Fair Value of each cohort of investments. 2. Exited includes the Gros
Slide 126: SVF1: Portfolio Evolution
34 Exited & Public2 $25.9B Private3 $39.6B of our portfolio will be Exited & Public FV Public $10.1B Exited $9.9B and Public MONETIZATION STRATEGY $3.9B $66.7B SVF1: Portfolio $8.3B $67.7B $53.3B Evolution $26.2B Private Fair Value1 Sep 20204 Sep 2020 Sep 2018 Sep 2019 Pro-Forma5 Footnotes: 1. Amoun
Slide 127: Wrap-Up
35 Wrap-Up 01- Progress & Highlights 02- Performance & Impact on SoftBank Group 03- In Focus: Monetization Strategy
Slide 128: Thank You
Thank You == SoftBank Investment Advisers