Softbank Corp. · TSE:9434
Softbank — H1 FY2019 Earnings Presentation
29 slides from Softbank's earnings presentation, Nov 6, 2019
Slide 1: Investor Briefing
Earnings Results for the Six Months Ended September 30, 2019 Investor Briefing SoftBank Corp. November 6, 2019 1
Slide 2: Disclaimer
(Disclaimer) This presentation is based on information available at the time it was made. Statements in the presentation that are not historical facts including, without limitation, our plans, forecasts and strategies are forward-looking statements. Forward-looking statements are subject to various
Slide 3: Results for H1 FY2019
Results for H1 FY2019 FY18: after retrospective ◼ Revenue and income increased YoY, and progressing at a steady pace towards adjustments of Yahoo Japan consolidation full-year forecasts Revenue Operating Income Net Income* [JPY bn] Progress 49% [JPY bn] [JPY bn] FY Forecast 120% 120% 4,800.0 120% FY
Slide 4: Revenue (1/2)
Revenue (1/2) FY18: after retrospective ◼ Revenue increased in all segments. JPY +134.7 bn (+6.0%) YoY adjustments of Yahoo Japan consolidation ◼ Consumer segment: JPY +47.0 bn due to growth in Mobile and Broadband By Segment Consumer Breakdown [JPY bn] [JPY bn] +134.7 YoY 2,373.1 2,238.4 +6.0% 2,30
Slide 5: Revenue (2/2)
Revenue (2/2) FY18: after retrospective ◼ Enterprise segment: JPY +13.4 bn (+20.6%) in Business solution and others adjustments of Yahoo Japan consolidation ◼ Yahoo segment: JPY +20.0 bn (+6.4%) in Commerce Enterprise Breakdown 600 Yahoo Breakdown [JPY bn] [JPY bn] +20.4 YoY +4.4% 484.1 500 463.8 2.
Slide 6: Operating Income/Adjusted EBITDA/Segment Income
Operating Income/Adjusted EBITDA/Segment Income FY18: after retrospective ◼ Adjusted EBITDA increased by JPY +104.0 bn (+13.5％) YoY. Adjusted EBITDA excluding impact adjustments of Yahoo Japan consolidation from IFRS 16 increased by JPY +31.2 bn ◼ Operating income increased by JPY +33.8 bn (+6.5%) Y
Slide 7: Quarterly Segment Income (Q2)
Quarterly Segment Income (Q2) FY18: after retrospective ◼ Operating income for Q2 FY19 increased by JPY +24.1 bn (+9.3%) YoY adjustments of Yahoo Japan consolidation Segment Income*1 Enterprise Segment Income Yahoo Japan*4 Operating Income*5 Other includes temporary factors*2 Income excluding tempor
Slide 8: Operating Income (YoY Comparison)
Operating Income (YoY Comparison) FY18: after retrospective ◼ Revenue increased in all segments. After deduction of Cost of goods sold and Telecommunication adjustments of Yahoo Japan consolidation network charges, gross profit increased by JPY +60.4 bn YoY (a) ◼ Expenses increased by JPY 24.3 bn Yo
Slide 9: Cumulative Subscribers (Main Subscribers/Smartphones)
Cumulative Subscribers (Main Subscribers/Smartphones) ◼ Cumulative main subscribers reached 35.56 mil (+1.61 mil YoY), smartphones contributed to the increase substantially ◼ Cumulative smartphones reached 23.03 mil (+1.94 mil YoY), steady growth in all 3 brands Cumulative Subscribers*1 Smartphone S
Slide 10: Churn Rate (Main Subscribers/Smartphones)
Churn Rate (Main Subscribers/Smartphones) ◼ Smartphones: churn rate increased due to increase in liquidity and increase in composition ratio of Y!mobile subscribers 0.02 0.02 0.01 0.01 1.03% 0.98% +0.04% Main subscribers 0.01 0.93% 0.01 0.81% 0.01 0.74% +0.07% Smartphones 0.68% 0.00 0.00 0.00 Q1 Q2
Slide 11: ARPU (Main Subscribers)
ARPU (Main Subscribers) ◼ ARPU before discount decreased due to the introduction of plans that separate handset payment and service fees, as well as a rise in composition ratio of Y!mobile and LINE MOBILE subscribers (a) ◼ Total ARPU rose by JPY 120 YoY in Q2 due to a decrease in impact from Monthly
Slide 12: Broadband Service
Broadband Service ◼ SoftBank Hikari cumulative subscribers were 6.16 mil as of Q2, steadily increased by 0.67 mil YoY ◼ Home Bundle Discount Hikari Set applications to mobile subscribers increased to 9.84 mil Cumulative Subscribers Home Bundle Discount Hikari Set (Number of Connected Lines) YoY Cumu
Slide 13: Net Income (YoY Comparison)
Net Income (YoY Comparison) ◼ (a) Financing income/costs: Improvement due to decrease in interest and valuation gain of financial instruments ◼ (b) Shares of profit/losses of associates accounted for using the equity method: Loss from upfront investment to new businesses, such as PayPay ◼ (c) Income
Slide 14: CAPEX/Adjusted Free Cash Flow
CAPEX/Adjusted Free Cash Flow FY18: after retrospective ◼ CAPEX for H1 FY19 was JPY 163.5 bn. CAPEX excluding Yahoo Japan was JPY 116.0 bn adjustments of Yahoo Japan consolidation (FY target JPY 380.0 bn) ◼ Adjusted free cash flow was JPY 395.7 bn. Adjusted free cash flow excluding Yahoo Japan and I
Slide 15: Interest-bearing Debt/Net Interest-bearing Debt and Net Leverage Ratio
Interest-bearing Debt/Net Interest-bearing Debt and Net Leverage Ratio After Consolidation of Yahoo Japan FY18: after retrospective ◼ Interest-bearing debt increased slightly QoQ due to issuance of unsecured bonds by Yahoo Japan adjustments of Yahoo Japan consolidation ◼ Tender offer by Yahoo Japan
Slide 16: Achieving Both Growth and Shareholder Returns
Achieving Both Growth and Shareholder Returns Shareholder Growth Returns Increase in Payout Ratio Revenue and c. 85% Profit Earnings per share (EPS) Dividends per share (DPS) *1 JPY 90→100 FY18 FY19 JPY 75→85 FY18 FY19 Payment of interim dividend (DPS JPY 42.5) *FY18 figures do not include Yahoo Jap
Slide 17: Group Companies
Group Companies
Slide 18: Group companies
Group companies ◼ The number of group companies increased due to the expansion of new business domains and the consolidation of Yahoo Japan 300 [Companies] 249 250 Group companies of Yahoo Japan 200 105 As of end of Q2 FY19: Subsidiaries 186 142 150 Affiliate companies*1 63 Total number of group com
Slide 19: Subsidiaries (1/2)
Subsidiaries (1/2) Ratio of Voting Segment Company Name Business Description Rights Held Wireless City Planning Inc. 32.2%* Telecommunication services *Economic interests: 99.5% LINE MOBILE Corporation 60.0% Telecommunication services Consumer WILLCOM OKINAWA, Inc. 100.0% Telecommunication services
Slide 20: Subsidiaries (2/2), Affiliates
Subsidiaries (2/2), Affiliates Ratio of Voting Segment Company Name Business Description Rights Held HAPSMobile Inc. 94.5% R&D and manufacturing of network equipment for HAPS business SB Payment Service Corp. 100.0% Payment processing SB Cloud Corp. 60.0% Sales of public cloud services One Tap BUY C
Slide 21: SB C&S
Distribution and sales of IT-related products, SB C&S provision of IT-related services Overview and business characteristics ◼ Based on the Company‘s founding business, SB C&S now distributes ICT products, cloud services, mobile communications and IoT equipment to enterprise and individual customers
Slide 22: SB Payment Service
SB Payment Service Payment processing Overview and business characteristics ◼ Provides credit card and convenience store payments, which can be used in online businesses, in addition to electronic money and QR code settlement services for physical stores ◼ Introduces new payment services to meet div
Slide 23: Appendix
Appendix
Slide 24: Consolidated Statements of Income
Consolidated Statements of Income [JPY bn] [Reference] After Yahoo Consolidation Variance Reasons for Variance Disclosed FY18H1 FY19H1 FY18H1 Revenue 2,238.4 2,373.1 +134.7 1,794.4 Cost of sales -1,136.7 -1,201.2 -64.5 Increase in cost of goods and outsourced service fees, etc. -950.4 Gross profit 1
Slide 25: Consolidated Statements of Financial Position (Assets)
Consolidated Statements of Financial Position (Assets) [JPY bn] [Reference] After Yahoo Consolidation Disclosed Variance Reasons for Variance As of As of As of Mar 31, 2019 Sep 30, 2019 Mar 31, 2019 Total assets 8,036.3 8,733.6 +697.2 5,775.0 Current assets 2,965.7 3,168.7 +203.0 1,756.3 Cash and ca
Slide 26: Consolidated Statements of Financial Position (Liabilities)
Consolidated Statements of Financial Position (Liabilities) [JPY bn] [Reference] After Yahoo Consolidation Disclosed Variance Reasons for Variance As of As of As of Mar 31, 2019 Sep 30, 2019 Mar 31, 2019 Total liabilities 6,013.8 7,118.3 +1,104.5 4,510.6 Current liabilities 3,317.0 3,896.0 +579.0 2,
Slide 27: Consolidated Statements of Financial Position (Equity)
Consolidated Statements of Financial Position (Equity) [JPY bn] [Reference] After Yahoo Consolidation Disclosed Variance Reasons for Variance As of As of As of Mar 31, 2019 Sep 30, 2019 Mar 31, 2019 Total equity 2,022.6 1,615.2 -407.3 1,264.5 Equity attributable to owners of the Company 1,498.2 1,09
Slide 28: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows [JPY bn] [Reference] After Yahoo Consolidation Reasons for Variance Disclosed FY18H1 FY19H1 FY18H1 Cash flows from operating activities 564.3 566.1 498.9 Net income 339.3 346.6 292.8 Depreciation 249.1 327.3 +69.9 due to adoption of IFRS 16 224.1 Change in worki
Slide 29: SoftBank
SoftBank