Softbank Group Corp. · TSE:9984
Softbank — Q1 FY2019 Earnings Presentation
94 slides from Softbank's earnings presentation, Aug 9, 2019
Slide 1: Earnings Results for the Three-month Period Ended June 30, 2019
V1.1 Earnings Results for the Three-month Period Ended June 30, 2019 Investor Briefing August 9, 2019 SoftBank Group Corp.
Slide 2: Disclaimer
DISCLAIMER This material was prepared based on information available and views held at the time it was made. Statements in this material that are not historical facts, including, without limitation, plans, forecasts and strategies are “forward-looking statements”. Forward-looking statements are by t
Slide 3: Accounting policy, trademarks and exchange rates
Accounting policy SoftBank Group Corp. adopted the International Financial Reporting Standards (IFRSs) in fiscal 2013. Trademarks and registered trademarks, etc. The names of other companies, other logos, product names, service names, brands, etc., mentioned in this material are registered trademark
Slide 4: Index
Index Accounting Finance Consolidated Results P 2 Financial Highlights (FY2019) P 2 SoftBank Corp. Made Yahoo Japan a Subsidiary P 3 Net Debt and Investment Asset Value P 3 Change in Reportable Segments P 4 LTV P 4 Sprint/T-Mobile Merger Approval Flow P 5 SBG Standalone Interest-bearing Debt P 5 (Re
Slide 5: Accounting
Accounting 15
Slide 6: Consolidated Results
Consolidated Results (JPY bn) FY18Q1 FY19Q1 Change YoY Net sales 2,272.8 2,336.4 +63.6 +2.8% Operating income 715.0 688.8 -26.2 -3.7% Net income (attributable to owners 313.7 1,121.7 +808.0 +257.6% of the parent) 26
Slide 7: SoftBank Corp. Made Yahoo Japan a Subsidiary
SoftBank Corp. Made Yahoo Japan a Subsidiary ・ On June 27, 2019, Yahoo Japan issued 1,511 million new shares to SoftBank Corp. through a third-party allotment. ・ SBGJ, a wholly owned subsidiary of SBG, accepted a tender offer of share buyback by Yahoo Japan and sold its holdings of 1,793 million Yah
Slide 8: Change in Reportable Segments
Change in Reportable Segments ・ Revised segment classifications after SoftBank Corp. made Yahoo Japan a subsidiary ・ The results of operations for FY18 are restated retroactively according to the new reportable segments. FY18 SoftBank Vision SoftBank Yahoo Japan Sprint Arm Brightstar Fund and Delta
Slide 9: Sprint/T-Mobile Merger Approval Flow
Sprint/T-Mobile Merger Approval Flow ・ After acquiring approvals from FCC and DOJ, Sprint segment will be classified as discontinued operations. ・ On the merger date, Sprint shares will be converted into the shares of the combined company (“New T-Mobile US”), which will become an equity method assoc
Slide 10: (Reference) Impact of Sprint Becoming Discontinued Operations on P/L
(Reference) Impact of Sprint Becoming Discontinued Operations on P/L Reported in Consolidated Financial Report When Sprint becomes discontinued operations (retrospectively revised) (JPY bn) FY18Q1 FY19Q1 (JPY bn) FY18Q1 FY19Q1 Change YoY (Continuing operations) Net sales 2,272.8 2,336.4 Net sales 1,
Slide 11: (Reference) Impact of Sprint Becoming Discontinued Operations on B/S
(Reference) Impact of Sprint Becoming Discontinued Operations on B/S As reported in As if Sprint had become Consolidated Financial Report discontinued operations* (JPY bn) FY19Q1 FY19Q1 (Indicative) Change Current assets 6,600.5 5,503.7 -1,096.8 incl. Sprint 1,096.8 － -1,096.8 Assets classified as h
Slide 12: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Primary change in accounting treatment: Classification of finance and operating leases has been eliminated and “right-of-use assets*1” and “lease liabilities” are recognized on a balance sheet for all leases. -Leases previously classified as operating leas
Slide 13: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Items of right-of-use assets Opening B/S（April 1, 2019） (JPY bn) SoftBank Class of underlying assets Sprint Others Total Corp. Telecommunications equipment (wireless equipment, switching equipment and 1,079.0 21.9 117.5 1,216.6 other network equipment) Rec
Slide 14: (Reference) Adoption of new standards: IFRS 16 - Leases
(Reference) Adoption of new standards: IFRS 16 - Leases Initial measurement for Right-of-use Assets and Lease Liabilities Lease Liabilities: Measured at the present value of total lease payments over the lease term Right-of-use Assets: Amount of the initial measurement of a lease liability plus any
Slide 15: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (JPY bn) P/L item FY18Q1 FY19Q1 Change ・FY18Q1: Recognized gain relating to loss of control over subsidiaries of 161.3 bn as a result of Arm’s Chinese subsidiary becoming a JV. Net sales 2,272.8 2,336.4 +63.6 Operating income Operating income from SoftBank Vison Fund
Slide 16: Consolidated B/S Summary (IFRSs) - Assets
Consolidated B/S Summary (IFRSs) - 1 (JPY bn) B/S As of As of Main items Change Includes 422.6 bn of expected withholding tax refund on item Mar 2019 Jun 2019 dividends from SBGJ to SBG in FY18 7,758.0 6,625.5 -1,132.5 (refunded in July 2019 ) Current assets Cash and cash equivalents 3,858.5 2,932.5
Slide 17: 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 2019 Jun 2019 8,681.7 7,415.9 -1,265.8 Impact of the adoption of IFRS 16 at the beginning of 1 FY19 Interest-bearing debt 3,481.0 3,277.8 -203.2 1 ・892.5 bn of lease obligations previously included in 1 2 Curren
Slide 18: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2019 Jun 2019 9,009.2 9,445.3 +436.1 Common stock 238.8 238.8 － Due to decrease in SBG’s economic interests in Yahoo Japan Capital surplus 1,467.8 1,547.3 +79.5 1 Net income attributable to owners of the parent Other
Slide 19: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) C/F item FY19Q1 Main breakdown (JPY bn) 1 Income taxes paid: -989.5 bn 559.8 Subtotal of cash flows from operating activities C/F from ・Income tax of 321.3 bn at SBGJ on a gain on sale of operating -547.2 -135.3 Interest paid SoftBank Corp. shares activities 1 ・Withh
Slide 20: Income and Loss Arising from SoftBank Vision Fund and Delta Fund Included in P/L
Income and Loss Arising from SoftBank Vision Fund and Delta Fund Included in P/L (JPY bn) P/L FY18Q1 FY19Q1 Items Gain and loss on investments at 247.2 414.4 SoftBank Vision Fund and Delta Fund Unrealized valuation gain of 603.8 bn: OYO and its affiliate, Slack, Doordash, Unrealized gain/loss on val
Slide 21: Settlement of Prepaid Forward Contract for Alibaba Shares
Settlement of Prepaid Forward Contract for Alibaba Shares At signing of contract 3 years total At settlement （June 2016） （June 2019） Derivative liabilities USD 6.8 bn Gain relating to settlement of variable prepaid forward contract Amortized Interest expense using Alibaba cost USD 0.3 bn shares Deri
Slide 22: Bridge from SBG Financial Report Disclosure to SVF & Delta Fund Update
Bridge from SBG Financial Report Disclosure to SoftBank Vision Fund & Delta Fund Update Disclosure (USD bn, otherwise stated) SBG Gain and loss on investments at SVF Committed capital, Total (p. 11） Committed capital, The Company (p. 11) Financial and Delta Fund (p. 10) SVF SVF Delta Delta Report*1
Slide 23: Bridge from Income before Income Tax of SVF and Delta Fund Segment
Bridge from Income before Income Tax of SVF and Delta Fund Segment to SVF’s Contribution to SBG FY18Q1 FY19Q1 SBG JPY bn 162.9 212.3 Financial Income before income tax of SVF and Delta Report*1 Fund Segment （Net of 3rd part interests) USD bn 1.50 1.93 (p.10) Taxes on investment gains of SVF, paid/ac
Slide 24: Appendix
Appendix 20
Slide 25: SVF - Gain/Loss on Investments Transferred from the Company in P/L
SoftBank Vision Fund - Gain/Loss on Investments Transferred from the Company in P/L (Bridge Investments and Other Investments) Bridge Investments that were acquired by the Company on the premise of offering to SoftBank Vision Fund and that were in accordance with the investment eligibility criteria
Slide 26: Differences in Figures of SoftBank Segment and SoftBank Corp.
Differences in Figures of Financial Results of the Company’s SoftBank Segment and SoftBank (1) Depreciation and amortization for non-current assets at SoftBank (formerly Vodafone K.K.) SBG’s consolidated financial statements SoftBank’s consolidated financial statements When Vodafone K.K.’s controlli
Slide 27: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (JPY bn) B/S As of As of Change Main items Changes in Outline item Mar 2019 Jun 2019 Amortization Others exchange rate 4,321.5 4,152.8 Goodwill Arm 2,777.5 2,616.4 - -161.1 - SoftBank 907.5 907.5 - - - Sprint 326.8 317.4 - -9.4 - FCC licenses 4,155.1 4,035.6
Slide 28: SoftBank Vision Fund & Delta Fund Update
1 SoftBank VisionSoftBank Fund Vision Fund & Delta Fund Update & Delta Fund Update Navneet Govil Managing Partner & Chief Financial Officer, SoftBank Investment Advisers August 9, 2019
Slide 29: Important Information (1 of 2)
Important Information (1 of 2) 2 This presentation (this “Presentation”) is furnished to you on a confidential basis for informational due diligence purposes and is not, and may not be relied on in any manner as, legal, tax, investment, accounting or other advice or as an offer to sell or a solicita
Slide 30: Important Information (2 of 2)
Important Information (2 of 2) 3 Vision Fund performance is based in part on valuations of certain investments that were recently acquired by the Vision Fund as a portfolio from SoftBank Group Corp; accordingly, the performance information herein, which is based in part on valuations of unrealized i
Slide 31: Topics
4 Topics 1. Progress & Highlights 2. Performance & Impact on SoftBank Group 3. In Focus: Growth through Ecosystem Synergies & Geographic Expansion
Slide 32: Progress & Highlights
Progress & Highlights SoftBank Vision Fund
Slide 33: Launch of SoftBank Vision Fund 2
Launch of SoftBank Vision Fund 2 6 Shared Vision, Amplified Ambition – Announced on July 26, 2019 Expected Fund Size Expected Limited Partners $108B+ 12+ Existing and new Continued Diversified assets $108B acceleration of across sectors AI revolution Industry disruptors Market-leading, Based on MOUs
Slide 34: Highlights of SoftBank Vision Fund
Highlights of SoftBank Vision Fund1 7 Three-month Period Ended June 30, 2019 New & Additional Investment Acquisition Cost Investments2 Gains3 31 $7.2B $4B $45.00 $46.38 Public Offerings UBER (NYSE) Initial Jun 28, 2019 85% Offering Price (Invested + Legally Binding) $26.00 $37.50 (Total Commitments
Slide 35: SoftBank Vision Fund & Delta Fund: Snapshot
SoftBank Vision Fund & Delta Fund: Snapshot 8 As of June 30, 2019 Cumulative Acquisition Cost1 Investment Gains1 Distributions2 SVF & Delta $103B $71.4B +$20.2B $6.4B SBG Paid-In Capital SBG Total Value3 SBG Distributions2 $32.5B $20.5B $30.1B $1.6B SBG Footnotes: 1. Including investments in Flipkar
Slide 36: Growth of Our Portfolio
Growth of Our Portfolio 9 Number of Investments1,2 83 Cumulative $20.2B Investment Gains1 Number of Investments1,2 Cumulative 33 Acquisition Cost1,2 $71.4B Investment Gains1 $5.2B Acquisition Cost1,2 $30.9B Jun 30, 2018 Jun 30, 2019 Footnotes: 1. Acquisition Cost, Number of Investments, and Cumulati
Slide 37: Growing Portfolio of Market Leaders
Growing Portfolio of Market Leaders 10 As of June 30, 2019 Investments included herein were held by the Vision Fund as of June 30, 2019. The investments presented herein are solely for illustrative purposes, have been selected in order to demonstrate examples of Fund investments, and do not purport
Slide 38: Portfolio Composition By Sector
Portfolio Composition By Sector 11 As of June 30, 2019 40% 12% Cost $28.3B Cost $8.0B Information herein is presented on an Fair Value $33.0B Fair Value $9.9B aggregated basis across the Vision Fund and Delta Fund and does not include Flipkart and Nvidia which were exited in August 2018 and January
Slide 39: Portfolio Composition By Geography
Portfolio Composition By Geography 12 As of June 30, 2019 Health Tech Real Estate Transportation & Logistics Fintech Frontier Tech Enterprise AMERICAS 45% Consumer Information herein is presented on an aggregated basis across the Vision Fund and Delta Fund and does not include Flipkart and Nvidia wh
Slide 40: Portfolio Composition By Geography
Portfolio Composition By Geography 13 As of June 30, 2019 Consumer Real Estate Frontier Tech Transportation & Logistics Fintech EMEA 13% Health Tech Consumer Fintech Transportation & Logistics ASIA 42% Enterprise Real Estate Information herein is presented on an aggregated basis across the Vision Fu
Slide 41: Public Offerings & Exits in the First Two Years
5 Public Offerings & 2 Exits in the First Two Years 14 Since Inception to June 30, 2019 OFFERINGS Expected PUBLIC Upcoming IPOs2 Sep 2017 May 2018 Oct 2018 May 2019 June 2019 Aug 2018 Jan 2019 Recent Public Offerings EXITS Uber, Slack Gross MOIC1: 1.5X Investment Cost: $8.0B Fair Value1: $11.7B Gros
Slide 42: Public Portfolio Increases in Value
Public Portfolio Increases in Value 15 As more investments became publicly listed 2.6x Public Investments Value1 $71.3B Private Investments1 $29.0B +$11.6B Public $18.8B Investments1 $7.2B June 30, 2018 June 30, 2019 Footnotes: 1. Public and Private Investments’ values include Fair Market Value of u
Slide 43: SoftBank Vision Fund - Portfolio Financing Facility
SoftBank Vision Fund - Portfolio Financing Facility1 16 Potential to Enhance Performance & Accelerate Distributions $4.1B Maximum Facility Size Mandated Mandated Mandated Mandated Lead Arranger Lead Arranger Lead Arranger Lead Arranger 3 Years Tenor Lead Arranger Lead Arranger Lead Arranger 33% Init
Slide 44: SoftBank Vision Fund – Expected End of Investment Period
SoftBank Vision Fund – Expected End of Investment Period 17 Effects on SoftBank Group as Limited Partner and Manager 85% (Invested + Legally Binding) (Total Commitments) $0 Total Commitments Investment Period Expected to End1 Limited Partners Capital Calls Unpaid Manager Distributions No New Investm
Slide 45: Performance & Impact on SoftBank Group
18 Performance & Impact on SoftBank Group
Slide 46: Contribution to SBG, Net of 3rd Party Interests
Contribution to SBG, Net of 3rd Party Interests 19 Amounts in USD Billions Three-month Period Three-month Period ended ended June 30, 2018 June 30, 2019 SVF & Delta SVF & Delta Fund Net Profit1 $0.94 $2.71 Less: Change in 3rd Party Interests in Funds -0.84 -1.35 SBG LP Income: Share of Fund Net Prof
Slide 47: Contribution to SBG, Net of 3rd Party Interests
Contribution to SBG, Net of 3rd Party Interests 20 Amounts in USD Billions Period from Fund Inception to June 30, 2019 SVF & Delta Fund Net Profit1 $13.37 Less: Change in 3rd Party Interests in Funds -6.96 SBG LP Income: Share of Fund Net Profit $6.41 SBG Manager Income: Management & Performance Fee
Slide 48: Contribution to SBG, Realized and Unrealized Values
Contribution to SBG, Realized and Unrealized Values 21 As of June 30, 2019 $30.1B $1.6B LP Distributions – Realized Value $3.2B Manager Undistributed & Accrued Performance Fee3 $25.3B $20.5B LP NAV1 – Unrealized Value Paid-In Total Value 2 Capital Footnotes: 1. Net Asset Value includes net changes i
Slide 49: In Focus: Growth through Ecosystem Synergies & Geographic Expansion
22 In Focus: Growth through Ecosystem Synergies & Geographic Expansion
Slide 50: Creating Significant Value via Capital & Growth
Creating Significant Value via Capital & Growth 23 Capital and SoftBank ecosystem help portfolio companies unleash their full potential Capital • World’s Largest Private Investment Fund • Freedom-level capital Capital Ecosystem Synergies • Growth • Value creation and synergies Value • Partnerships G
Slide 51: Ecosystem Synergy Case Study: Uber and Fair Create Mutual Benefits
Ecosystem Synergy Case Study: 24 Uber and Fair Create Mutual Benefits 75,000 Rideshare companies need new Cars with Uber expected drivers with cars to address by December 20191 growing demand Alternative Car Ownership Platform enables used car leases & flexible terms Footnotes: 1. Source: Fair. Ther
Slide 52: Ecosystem Synergy Case Study: Uber, Fair, Getaround, REEF, DoorDash
Ecosystem Synergy Case Study: Uber, Fair, Getaround, 25 REEF Technology1, & DoorDash Go Further with Synergies Urban Mobility Hubs Cloud Kitchens • Flexible car rentals, • Expand service to e-bikes, and scooters delivery for cloud kitchens • UberX staging areas 19% 93% • Provide data for scaling • E
Slide 53: Geographic Expansion Case Study: OYO
Geographic Expansion Case Study: 26 OYO Expands Network of Budget Hotels to New Regions China Japan - 2019 USA - 2019 Mexico - 2019 KSA - 2019 India Brazil - 2019 15 countries Footnotes: 17,000+ properties Source: OYO. Data is accurate as of June 30, 2019. There can be no assurances that any forward
Slide 54: Case Study: Katerra
Case Study: Katerra 27 Smarter Building. Better Communities. For Everyone. USA - 2019 End-to-end multi-family building projects Next generation factories KSA - 2019 Nearly $2B in orders Vision 2030 Signed 10-Year MOU: 500K units ($60B value) Faster construction Assembled a single family home in 48 h
Slide 55: Other Geographic Expansion Activities
Other Geographic Expansion Activities 28 Portfolio Company Expansion Region Portfolio Company Expansion Region South East Asia South East Asia South East Asia South East Asia Europe, LATAM, South East Asia, Middle East South East Asia Asia Pacific South East Asia Footnotes: The above information inc
Slide 56: Wrap-Up
29 Wrap-Up 1. Progress & Highlights 2. Performance & Impact on SoftBank Group 3. In Focus: Growth through Ecosystem Synergies & Geographic Expansion
Slide 57: Thank You
SoftBank Vision Fund Thank You 30
Slide 58: Appendix
SoftBank Vision Fund Appendix Bil
Slide 59: SoftBank Vision Fund: Snapshot
SoftBank Vision Fund: Snapshot 32 As of June 30, 2019 Cumulative $97B Acquisition Cost1 Investment Gains1 Distributions2 $71.4B +$20.2B $6.3B SVF SBG Paid-In Capital SBG Total Value3 SBG Distributions2 $28.1B $16.7B $26.5B $1.6B SBG Footnotes: 1. Including investments in Flipkart and Nvidia which we
Slide 60: Delta Fund: Snapshot
Delta Fund: Snapshot 33 As of June 30, 2019 Cumulative $6B Acquisition Cost1 Investment Gains1 Distributions2 Delta $5.0B +$0.0B $0.1B SBG Paid-In Capital SBG Total Value3 SBG Distributions2 $4.4B $3.8B $3.6B $0.0B SBG Footnotes: 1. Including solely the investment in DiDi which was transferred to th
Slide 61: Contribution to SBG, Net of 3rd Party Interests
Contribution to SBG, Net of 3rd Party Interests 34 Amounts in USD Billions Three-month Period Three-month Period ended ended June 30, 2018 June 30, 2019 SVF Delta Total SVF Delta Total Fund Net Profit1 $ 0.95 -$ 0.01 $ 0.94 $ 2.73 -$ 0.02 $ 2.71 Less: Change in 3rd Party Interests in Funds -0.85 0.0
Slide 62: Contribution to SBG, Net of 3rd Party Interests
Contribution to SBG, Net of 3rd Party Interests 35 Amounts in USD Billions Period from Fund Inception to June 30, 2019 SVF Delta Total Fund Net Profit1 $13.53 -$ 0.16 $13.37 Less: Change in 3rd Party Interests in Funds -6.97 0.01 -6.96 SBG LP Income: Share of Fund Net Profit $ 6.56 -$ 0.15 $ 6.41 SB
Slide 63: SoftBank Vision Fund: Contribution to SBG, Realized and Unrealized Values
SoftBank Vision Fund: Contribution to SBG, Realized and 36 Unrealized Values As of June 30, 2019 $26.5B $1.6B LP Distributions – Realized Value Manager Undistributed & Accrued $3.2B Performance Fee3 $21.7B LP NAV1 – Unrealized Value $16.7B Paid-In Total Value 2 Capital Footnotes: 1. Net Asset Value
Slide 64: Delta Fund: Contribution to SBG, Realized and Unrealized Values
Delta Fund: Contribution to SBG, Realized and 37 Unrealized Values As of June 30, 2019 $3.8B $3.6B LP NAV1 – Unrealized Value Paid-In Total Value 2 Capital Footnotes: 1. Net Asset Value includes net changes in fair value of financial assets at fair value through profit or loss (FVTPL) and investment
Slide 65: Finance
Finance In this section, SoftBank Corp. is referred to as SBKK and SoftBank Vision Fund is referred to as SVF. SBG standalone financial measures are calculated by deducting self-financing entities’ financial measures from consolidated financial measures. Self-financing entities are SBKK, Sprint, Arm
Slide 66: Financial Highlights (FY2019)
Financial Highlights (FY2019) • Issued JPY 500bn of domestic retail bond in April and redeemed Financial JPY 300bn of domestic retail bond in May position • Increased commitment line from JPY 178.5bn to JPY 330.0bn in July • Announced the planned establishment of SVF2, with approximately US$ 108bn o
Slide 67: Net Debt and Investment Asset Value
Net Debt and Investment Asset Value (JPY) Net debt 4.9tn Investment SVF Others asset value 11.3tn 4.7tn 2.9tn 3.5tn 2.6tn 0.9tn 25.8tn Listed Listed Listed * Yahoo Japan became a consolidated subsidiary of SBKK in June 2019 * Listed share prices: (Japan) closing price as of Aug 7, 2019, (US) closing
Slide 68: LTV
LTV Manage LTV at less than 25% during normal periods with upper threshold of 35% even during abnormal periods (JPY) 25.8 tn （8.0） （8.0） LTV 18.9% (Debt cover 5x) 4.9 tn Investment SBG standalone asset value net debt (As of Aug. 7) * Debt cover = Investment asset value divided by net debt 4 68
Slide 69: SBG Standalone Interest-bearing Debt
SBG Standalone Interest-bearing Debt Increase due to early bond issuance for refinancing purpose and short-term borrowings for temporal expenses (JPY bn) Main variance factors from Mar. 31, 2019 Issuance/redemption of domestic bond (+JPY 200bn) 9,265.1 Short-term borrowing (+JPY 420bn) for payment o
Slide 70: SBG Standalone Cash Position
SBG Standalone Cash Position Decrease due to new investments, corporate tax payment and share buyback (JPY bn) 2,463.0 Refund of withholding income tax (JPY 423.6bn)*2 2,158.8 Net proceeds expected for asset sale to SVF, etc. (JPY 866.4bn)*3 Main variance factors from Mar. 31, 2019 1,642.4 1,290.0 I
Slide 71: Maintaining Abundant Cash Position
Maintaining Abundant Cash Position Maintain a liquidity level that covers bond redemptions for at least the next 2 years JPY2.5tn 0.0 *1 (JPY bn) In addition to maintaining abundant cash position, secure various funding sources: • Refinance Withholding income tax • Asset divestments, non-recourse as
Slide 72: SBG Standalone Net Interest-bearing Debt
SBG Standalone Net Interest-bearing Debt Increase mainly due to decrease in cash position (JPY bn) 8,254.9 6,834.8 6,212.4 5,253.1 5,080.5 JPY 4,922.5bn※ Refund of withholding income tax; Net proceeds expected for asset sale to SVF, etc. Jun' 18 Sep' 18 Dec' 18 Mar' 19 Jun' 19 * The difference with
Slide 73: Interest Expenses (Standalone)
Interest Expenses (Standalone*1) Interest payments are sufficiently covered • Dividend income from (JPY bn) Average coupon on subsidiaries standalone basis*2 2.28％ JPY 270.5bn*3 Funded in JPY : 1.80％ • Distribution from SVF 250.0 Funded in foreign currencies : 3.66% (CY2018 actual) 205.7 200.0 191.2
Slide 74: A Concept of Interest Coverage
A Concept of Interest Coverage Sufficient recurring cash income to cover interest payment Dividend income from Distribution from SVF subsidiaries (CY2018 actual) Approx. JPY 270.5bn*1 Approx. JPY 220.0bn Interest payment 2.2x JPY 222.9bn*2 Dividend income from Distribution from SVF subsidiaries (CY2
Slide 75: Equity Value of Holdings
Equity Value of Holdings Market value of shareholdings amounts to JPY 25.8tn (JPY tn) 27.3 25.4 25.8 Composition 21.9 Ratio 20.1 13.1 44％ 11.3 12.1 Alibaba 13.4 11.3 SBKK 4.5 4.7 18％ SVF (equity value for SBG) 4.3 Sprint 13％ Arm 1.9 2.1 2.7 3.2 3.5 Yahoo Japan 2.2 2.4 2.8 2.9 11％ 2.7 Others 2.7 2.8
Slide 76: Alibaba Shares
Alibaba Shares Share price/Target price Trading volume Market cap JPY 43.6tn US$ 409.9bn (US$) (US$ bn) Share price*1 US$ 157.43 300 Trading Share Price Target Price 16 Target price*2 US$ 217.65 volume 60-day average daily trading volume US$ 3.5bn 14 250 % owned by SBG Group 26.0% 12 Market cap of s
Slide 77: SBKK Shares
SBKK Shares Share price/Target price Trading volume Market cap JPY 7.1tn (JPY) (JPY bn) Share price*1 JPY 1,492.00 Target price*2 JPY 1,600.83 1,700 Trading Share Price Target Price 100 volume 60-day average daily trading volume JPY 11.8bn 90 1,600 % owned by SBG Group 66.5% 80 Market cap of shares
Slide 78: Sprint Shares
Sprint Shares Share price/Target price Trading volume (US$) (US$ mn) Market cap JPY 2.9tn US$27.4bn 10.0 Trading Share Price Target Price 1,400 volume Share price*1 US$ 6.71 *2 1,200 Target price US$ 6.89 9.0 60-day average daily trading volume US$ 197mn 1,000 8.0 % owned by SBG Group 84.2% 800 Mark
Slide 79: SVF: Capital Commitment
SVF: Capital Commitment Capital Commitment (as of June 30, 2019) (US$ bn) 97.0*1 (56.2) SBG 63.9 *1 33.1 *2 （8.0） （19.6）*3 （36.6）*3 Third-party Numbers in brackets represent amounts contributed limited partners *1 A portion of the capital committed by third-party investors in SVF and Delta Fund has
Slide 80: SVF: Investment Portfolio
SVF: Investment Portfolio 16 80
Slide 81: SVF: Fair Value of Investment Assets
SVF: Fair Value of Investment Assets (US $bn) ・ SVF/Delta Fund Total ・ Excluding exited investments ＋24％ 82.2 ＋20％ 72.3 66.3 60.1 Fair value Acquisition cost Mar' 2019 Jun' 2019 *1 Excludes exited investments. Includes Delta Fund, but Delta Fund has no investment holding as of June 30, 2019, due to
Slide 82: SoftBank Vision Fund 2
SoftBank Vision Fund 2 Total expected contribution of capital $108bn Expected contribution of capital by SBG $38bn * As of the July 26, 2019 press release announcement <Financial Policy> Manage LTV at less than 25% during normal periods (upper threshold of 35% even during abnormal periods) Plan
Slide 83: Financial Policy
Financial Policy 1. Manage LTV at less than 25% during “normal” periods (upper threshold of 35% even during “abnormal” periods) 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 19
Slide 84: Appendix
Appendix 84 20
Slide 85: FY2019 Finance Strategy
FY2019 Finance Strategy Pursue both financial stability and flexibility as an investment company Well-protected financial management to be invulnerable to any environmental change 1. Manage balance between investment asset value and debt size • Manage LTV at less than 25% with upper threshold of
Slide 86: Direction of Financial Management (illustrative)
Direction of Financial Management (illustrative) Maximize enterprise value by maintaining optimal leverage through LTV management LTV to improve in the long run as investment assets appreciate in value Balance elevated leverage Divestment during with improvement in financial bull market; position du
Slide 87: LTV Calculation: Adjusted SBG Standalone Net Debt
LTV Calculation: Adjusted SBG Standalone Net Debt (L) Adjusted JPY 4.90tn SBG Standalone Net Debt = 18.9% (V) SBG Standalone Investment Asset Value JPY 25.85tn (JPY tn) = - - Adjusted SBG Consolidated Net Debt at Self- Other Standalone Net Debt Net Debt *1,２ Financing Entities Adjustments 4.90 14.60
Slide 88: LTV Calculation: SBG Standalone Investment Asset Value
LTV Calculation: SBG Standalone Investment Asset Value (L) Adjusted SBG Standalone Net Debt JPY 4.90tn (V) SBG Standalone = 18.9% JPY 25.85tn Investment Asset Value (JPY tn) = + + + Investment SBG Standalone Major Listed Arm Shares Assets Under Other Holdings Shares (75% SBG-held) SVF Shares 25.85 1
Slide 89: SVF: Committed Capital of SBG
SVF: Committed Capital of SBG SBG reserves funds for remaining committed capital at SVF (US $bn) Change in SBG’s cash position upon asset sale to SVF * * The amount includes $5bn planned to be used in an incentive scheme related to SVF and approximately $8.2bn of obligation to be satisfied by using
Slide 90: SBG Credit Rating Trend
SBG Credit Rating Trend Aim to improve credit rating evaluation under the investment holding company rating criteria 14 Acquisition of Acquisition of Sprint Arm SBKK Japan Telecom Vodafone KK Acquisition Acquisition Listing 13 A/A2 JCR (A－) 12 A－/A3 11 BBB+/Baa1 10 BBB/Baa2 S&P (BB＋) 9 BBB－/Baa3 Moo
Slide 91: Redemption Schedule
Redemption Schedule Planning various redemption options with refinancing as the main option Domestic straight notes (JPY bn) 1,305.6 Domestic subordinated notes Domestic hybrid notes Foreign currency-denominated senior notes 455.6 Foreign currency-denominated 946.6 924.1 hybrid notes 296.4 424.1 583
Slide 92: Consolidated Interest-bearing Debt
Consolidated Interest-bearing Debt Interest-bearing Debt ＋ (JPY bn) Lease Liabilities 17,987.8 17,349.0 17,053.8 17,328.2 SBG 15,685.1 Others (Arm etc.) SVF 8,116.5 7,385.5 Variable prepaid forward contract 7,411.9 (Alibaba) 9,265.1 6,722.9 SoftBank segment*3 283.6 Sprint segment 501.1 472.0 635.9 4
Slide 93: Consolidated Cash Position
Consolidated Cash Position (JPY bn) 5,125.8 2,158.8 3,629.1 3,338.8 2,978.2 2,724.2 1,281.7 547.9 1,642.4 1,010.2 1,173.0 SBG 617.9 1,285.6 572.2 795.5 Others (Arm etc.) 115.9 263.2 311.1 273.8 118.1 SVF 77.5 168.0 376.1 358.3 645.1 SoftBank segment*3 927.0 1,012.3 782.4 757.4 524.8 Sprint segment J
Slide 94: Consolidated Net Interest-bearing Debt
Consolidated Net Interest-bearing Debt (JPY bn) Interest-bearing Debt ＋Lease Liabilities – Cash Position 14,370.8 14,648.9 14,603.9 11,927.9 12,056.0 6,834.8 6,212.4 8,254.9 5,253.1 5,080.5 520.0 SBG 741.7 727.8 730.6 Others (Arm etc.) 537.5 3,989.5 719.0 SVF 3,065.1 3,012.4 2,928.0 1,662.9 Variable