Softbank Group Corp. · TSE:9984

Softbank — Q1 FY2014 Earnings Presentation

68 slides from Softbank's earnings presentation, Aug 8, 2014

  1. Slide 1: Earnings Results for the 3-month Period Ended June 30, 2014

    Earnings Results for the 3-month Period Ended June 30, 2014 August 8, 2014 SoftBank Corp.

  2. 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

  3. Slide 3: Consolidated Results of Operations

    Consolidated Results of Operations 2

  4. Slide 4: Net Sales: record high for 2 consecutive periods

    Net Sales 2t (JPY bn) Record high for 2 consecutive 881.1 periods 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 3

  5. Slide 5: Net Sales

    Net Sales 2t SoftBank (JPY bn) No.1 1.1t NTT DOCOMO 1.0t KDDI 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 4

  6. Slide 6: EBITDA: record high for 11 consecutive periods

    EBITDA (JPY bn) 592.1 Record high for 354.3 11 consecutive periods 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 5

  7. Slide 7: EBITDA

    EBITDA 592.1 SoftBank (JPY bn) No.1 386.7 NTT DOCOMO 326.4 KDDI 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 6

  8. Slide 8: EBIT: 16% decrease

    EBIT (Operating income) 400.1 (JPY bn) 337.6 Temporary gains from 149.1 16% decrease consolidation of GungHo, etc. 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 7

  9. Slide 9: EBIT: 35% increase excluding temporary gains

    EBIT (Operating income) 337.6 35% increase (JPY bn) Temporary gains from consolidation of GungHo, etc. excluding temporary gains 251.0 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 8

  10. Slide 10: EBIT

    EBIT (Operating income) (JPY bn) 337.6 SoftBank No.1 209.6 NTT DOCOMO 194.8 KDDI 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs * Excluding temporary gains from consolidation of GungHo, etc. (JPY 149.1bn) in Q1 FY2013 9

  11. Slide 11: Net Income: 68% decrease

    Net Income 244.4 (Net income attributable to owners of the parent) (JPY bn) 68% decrease 77.6 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 10

  12. Slide 12: Net Income: 68% decrease

    Net Income 244.4 (Net income attributable to owners of the parent) (JPY bn) 68% decrease Temporary gains from consolidation of GungHo, etc. 149.1 77.6 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 11

  13. Slide 13: Net Income

    Net Income (Net income attributable to owners of the parent) (JPY bn) Temporary gains from consolidation of GungHo, etc. 95.2 77.6 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 12

  14. Slide 14: Net Income

    Net Income (Net income attributable to owners of the parent) (JPY bn) 180.6 Temporary gains from consolidation of GungHo, etc. Loss from IFRSs adjustment on Alibaba’s Convertible Preference Shares (CPS) (this adjustment is to be reversed as gain at the timing of Alibaba’s IPO) 95.2 77.6 2003 ’04 ’05

  15. Slide 15: Net Income: 90% increase excluding temporary items

    Net Income (Net income attributable to owners of the parent) (JPY bn) 180.6 90% increase excluding temporary gains and losses 95.2 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs 14

  16. Slide 16: IFRSs Adjustment Relating to Alibaba

    IFRSs Adjustment Relating to Alibaba (amounts after reflecting SoftBank’s interest in Alibaba) Alibaba’s net income Equity in loss (US-GAAP) IFRSs adjustment of associates (IFRSs) JPY33.6bn - JPY 98.9bn - JPY 65.3bn Incl. Loss from IFRSs adjustment on Alibaba’s Convertible Preference Shares (CPS) -

  17. Slide 17: At the timing of Alibaba IPO

    At the timing of Alibaba IPO (amounts after reflecting SoftBank’s interest in Alibaba) Amount raised in IPO × SB interest (after dilution) Planned to be recognized as gain at the timing of IPO Reversed IFRSs adjustment (Equity) JPY 103.0bn *1 Loss from IFRSs adjustment (Liability) - JPY 103.0bn*1 *1

  18. Slide 18: Summary of Consolidated Operation Results

    Summary of Consolidated Operation Results (JPY bn) FY13/Q1 FY14/Q1 Change YoY (Apr. - June 2013) (Apr. - June 2014) Net sales 881.1 1,992.2 +1,111.1 226% EBITDA 354.3 592.1 +237.8 167% EBIT 251.0 337.6 +86.6 135% * (excl. temporary gains) EBIT (operating income) 400.1 337.6 - 62.5 84% * Excluding te

  19. Slide 19: Net Interest-bearing Debt / EBITDA Multiple

    Net Interest-bearing Debt / EBITDA Multiple (times) 7.0 6.2x 6.0 (Post Vodafone K.K. acquisition) Maintaining manageable level 5.0 4.0 3.1x 3.0 (including the impact of Sprint acquisition) 2.0 1.0 2006 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (at end of June each year) Japanese-GAAP IFRSs *EBITDA: actual EBI

  20. Slide 20: Financing conditions remain favorable

    Fukuoka SoftBank HAWKS Bond for Retail Investors (the 45th Unsecured Straight Corporate Bond) Total amount JPY 300.0bn Term 5 years Coupon rate 1.45% (annual) 45 3,000 5 1.45% 1.155% 100 2014 5 19 2014 5 29 100 100 Financing conditions remain favorable 100 100 2014 5 30 5 30 11 30 2 2019 5 30 A 20.3

  21. Slide 21: FY2014 Consolidated Operation Results Forecast

    FY2014 Consolidated Operation Results Forecast Net sales JPY 8t EBITDA JPY 2t EBIT (Operating income) JPY 1t (Excluding temporary gains) 20

  22. Slide 22: SoftBank Business Domains

    SoftBank Business Domains 21

  23. Slide 23: SoftBank Business Domains: Japan, Global

    SoftBank Business Domains Japan Global 22

  24. Slide 24: Japan

    SoftBank Business Domains Japan Global 23

  25. Slide 25: Smartphone Subscribers (Japan): Toward 100mil smartphones

    Smartphone Subscribers (Japan) over 100mil Toward 100mil smartphones 57mil 2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 (FY) 24 (Source) Created by SoftBank Corp. based on press release issued by MM Research Institute, Ltd. (Apr. 23, 2014)

  26. Slide 26: Mobile EBIT 8x

    Mobile EBIT (Mobile operating income) 207.9 (JPY bn) 180.9 8x after Vodafone K.K. acquisition 27.2 2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs * FY2006-2011: operating income of Mobile Communications business FY2012-2014: segment inco

  27. Slide 27: No.1 in smartphone connectivity

    No.1 in smartphone connectivity Data Connectivity Call Connectivity (smartphone) (smartphone) 99% SoftBank 99.5% 98.6% SoftBank 98% 99.0% 98.9% au NTT DOCOMO 97.3% 98.5% 98.5% 97% NTT DOCOMO 97.1% 98.0% au 96% 97.8% 97.5% 95% *Statistics analyzed by Agoop Corp. Platinum band-compatible 97.0% *Nation

  28. Slide 28: No.1 in MNP port-in customer satisfaction (Smartphones)

    No.1 in MNP port-in customer satisfaction (Smartphones) Connectivity Speed 65% 70% 62% 67% 65% 61% 60% 64% 60% 59% 55% 55% 55% au NTT DOCOMO SoftBank au NTT DOCOMO SoftBank (Source) MMD LABO’s survey of MNP port-in smartphone users about network performance (July 14, 2014) Those who switched carrier

  29. Slide 29: Call Instability

    Call Instability Call Quality on Moving Shinkansen (Bullet trains) 28 times 20 times Sendai Call quality 10 times No.1 SoftBank au NTT DOCOMO Call Instability Tohoku Shinkansen Call Instability 33 times 40 times 19 times 12 times 17 times Tokyo 10 times SoftBank au NTT DOCOMO SoftBank au NTT DOCOMO

  30. Slide 30: Yahoo! Japan

    YAHOO! JAPAN

  31. Slide 31: Yahoo! Japan Net Income: Steady growth

    Net Income (Net income attributable to owners of the parent) (JPY bn) 36.4 33.9 Steady growth 2004 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 (FY) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Japanese-GAAP IFRSs (Source) Created by SoftBank Corp. based on companies’ publicly available historical information 30

  32. Slide 32: Number of Stores: Significant increase

    Number of Stores 130k ショッピング shopping (After screening completed) ショッピング Significant ＜赤＞ PANTONE 185 DIC 156 M91%+Y76% R255・G0・B51 ＜グレー＞ PANTONE Cool Gray 11 DIC 541 BL80% #545454 Gray increase ●2行ロゴ リンク用ロゴなどスペースが狭い場合に使用できます。 ●その他色指定 ショッピング ショッピング 白抜き利用の場合（背景色は任意） ※紫ロゴは原則使用しないでください ＜紫＞ ショッピング PANTON

  33. Slide 33: Number of Available Products: Significant increase

    ショッピング Number of Available Products shopping over 100mil ショッピング ＜赤＞ ＜グレー＞ PANTONE 185 PANTONE Cool Gray 11 DIC 156 DIC 541 M91%+Y76% BL80% R255・G0・B51 #545454 Gray Significant ●2行ロゴ リンク用ロゴなどスペースが狭い場合に使用できます。 ショッピング ショッピング increase ●その他色指定 白抜き利用の場合（背景色は任意） ※紫ロゴは原則使用しないでください ＜紫＞ ショッピング PANTONE 259 DIC

  34. Slide 34: Pepper

    pepper

  35. Slide 35: Projected Market Size of Robot Industry (Japan)

    Projected Market Size of Robot Industry (Japan) JPY 10t more than 10x JPY 860.0bn 2012 2015 2020 2025 2035 (CY) 34 (Source) Ministry of Economy, Trade and Industry, “Trends in the Market for the Robot Industry in 2012” (July 2013)

  36. Slide 36: World's first Personal Robot that reads emotions

    World’s first Personal Robot that reads emotions 35

  37. Slide 37: Cloud AI Emotional engine

    Cloud AI Emotional engine 36

  38. Slide 38: Number of Visitors to SoftBank Ginza

    Number of Visitors to SoftBank Ginza Store traffic 87% increase Before pepper After pepper 37 *Compared to the numbers for a one-week period before and after pepper placement at store on June 6, 2014.

  39. Slide 39: Developers' event coming soon

    Sept. 20, 2014 Developers’ event coming soon 38

  40. Slide 40: Global

    SoftBank Business Domains Japan Global 39

  41. Slide 41: Deploy successful formula worldwide

    Deploy successful formula worldwide 40

  42. Slide 42: 41

    41

  43. Slide 43: Turnaround Network Improvement

    Turnaround Network Improvement 42

  44. Slide 44: Sprint Consolidated Adjusted EBITDA

    Consolidated Adjusted EBITDA USD 1.8bn USD 1.4bn Steady growth 30% increase ’13 ’14 (FY) *Combined consolidated U.S. GAAP results presented to be consistent with Sprint’s public disclosure and presentation of Apr. - June Apr. - June FY14 Q1 results 43

  45. Slide 45: Sprint Consolidated Operating Income

    Consolidated Operating Income USD 519mil USD 420mil Continue to stay in the black Apr. - June July - Sept. Oct. - Dec. Jan. - Mar. Apr. - June 2013 2014 *Combined consolidated U.S. GAAP results presented to be consistent with Sprint’s public disclosure and presentation of (FY) FY14 Q1 results 44

  46. Slide 46: 4G LTE Coverage

    4G LTE Coverage 250mil POPs in 488 markets Network Vision is largely completed 45

  47. Slide 47: Call Accessibility Rate

    Call Accessibility Rate 99.6% 99.5% Significantly 99.5% improved 99.4% 99.3% 99.2% 99.1% 99.05% 99.0% 2013/7/20 2014/7/19 (Source) Sprint Corporation Call accessibility rate = 1 - call block rate 46

  48. Slide 48: LTE Accessibility Rate

    LTE Accessibility Rate 99.8% 99.6 Significantly 99.6% improved % 99.4% 99.2% 99.0% 98.9% 98.8% 2013/7/20 2014/7/19 (Source) Sprint Corporation LTE Accessibility = Total LTE connection successes divided by Total LTE connection attempts 47

  49. Slide 49: Data Connectivity (National carriers)

    Data Connectivity (National carriers) 92% 90% Competitors Significantly 88% improved 86% 84% 82% Sprint 80% 2014/2/10 4/20 7/21 (Source) Sprint’s internal benchmarking 48

  50. Slide 50: Data Connectivity (in 4G areas)

    Data Connectivity (in 4G areas) 100% Competitors Significantly improved 98% 96% 94% 92% Sprint 90% 2014/2/16 4/20 7/20 (Source) Sprint’s internal benchmarking 49

  51. Slide 51: Sprint New CEO Marcelo Claure

    Sprint Corporation New CEO Marcelo Claure Effective Aug. 11 50

  52. Slide 52: The Sprint Strategies

    The Sprint Strategies Customer acquisition through network improvement Cost reduction 51

  53. Slide 53: Additional Purchase of Brightstar Global Group Inc. Shares

    Additional Purchase of Brightstar Global Group Inc. Shares Ownership (Before transaction: 62.3%) Creating further synergies PMS WARM RED PMS BLACK 6 Note: percentages based on the number of voting rights before dilution and the number of common shares, and does not include references to outstanding

  54. Slide 54: 53

    53

  55. Slide 55: Mobile Game Revenue (Global)

    Mobile Game Revenue (Global) USD 35.4bn 3x in 5 years USD 12.7bn 2012 ’13 ’14 ’15 ’16 ’17 (CY) 54 (Soure) Newzoo: Newzoo Global Games Market Report 2014 (June 2014)

  56. Slide 56: Puzzle & Dragons App Downloads: Continued growth

    Puzzle & Dragons App Downloads (Japan) Over 29mil Continued growth June Dec. June Dec. July 2012 2013 2014 (CY) 55

  57. Slide 57: Global businesses advancing

    Europe 27 countries launching 4mil downloads 2mil downloads in the pipeline Hong Kong Taiwan 1mil downloads Global businesses advancing 56

  58. Slide 58: No.1 in countries

    No.1 No.1 in 146 countries in 121 countries No.1 in 81 countries 57 (Source) App Annie: Highest Grossing Game Ranking for iPad as of Aug. 6, 2014

  59. Slide 59: Top Grossing Games Ranking

    Top Grossing Games Ranking (iOS + Google Play) April May June 1 Clash of Clans Clash of Clans Clash of Clans 2 Puzzle & Dragons Puzzle & Dragons Puzzle & Dragons 3 Candy Crush Saga Candy Crush Saga Candy Crush Saga 4 Hay Day Hay Day Hay Day 5 Farm Heroes Saga Monster Strike Game of War Global No.1 i

  60. Slide 60: Alibaba Group

    & 2 fF libaba Group

  61. Slide 61: Alibaba is applying for listing on New York Stock Exchange

    Alibaba is applying for listing on New York Stock Exchange 60

  62. Slide 62: Alibaba Net Income (after tax)

    Net Income (after tax) (Net income attributable to Alibaba Group) JPY 375.0bn (RMB 23,315mil) JPY 137.2bn (RMB 8,532mil) (Source) Created by SoftBank Corp. based on Alibaba Group Holding Limited amended Form F-1 Apr. 2012 - Mar. 2013 Apr. 2013 - Mar. 2014 (filed on June 16, 2014) *Net income attribu

  63. Slide 63: SoftBank Business Domains: Japan, Global

    SoftBank Business Domains Japan Global 62

  64. Slide 64: Nikesh Arora

    Vice Chairman of SoftBank Corp. CEO of SoftBank Internet and Media, Inc. Nikesh Arora (Former Senior Vice President and Chief Business Officer of Google Inc.) Will help accelerate global growth strategy 63

  65. Slide 65: FY2014 Consolidated Operation Results Forecast

    FY2014 Consolidated Operation Results Forecast Net sales JPY 8t EBITDA JPY 2t EBIT (Operating income) JPY 1t (Excluding temporary gains) 64

  66. Slide 66: Toward further growth

    Toward further growth 65

  67. Slide 67: Copyright 2014 SoftBank Corp.

    Copyright (C) 2014 SoftBank Corp., All rights reserved.

  68. Slide 68: Adoption of IFRSs, Definition of terms, Trademarks

    1. Adoption of IFRSs SoftBank Corp. has adopted the International Financial Reporting Standards (IFRSs) from the three-month period ended June 30, 2013 (transition date: April 1, 2012). The financial data for the three-month period ended June 30, 2012 (“YoY”) and the fiscal year ended March 31, 2013

SoftBank — Q1 FY2014 Earnings Presentation on 6ix