Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2009
Earnings Results for the Nine-month Period Ended December 31, 2009 (Apr. – Dec. 2009) Analyst Meeting February 3, 2010 SOFTBANK CORP.
Slide 2: Disclaimer
Disclaimer This material is made based on information available at the time of writing. Statements in this material that are not historical facts including, without limitation, our plans, forecasts and strategies are Forward-looking Statements. Forward-looking Statements are subject to various risks
Slide 3: Accounting, Finance, Operating
Accounting 5 Consolidated P/L Analysis 6 Consolidated B/S Analysis 15 Consolidated CF Analysis 25 Finance 30 Operating 57 Broadband Infrastructure Segment 59 Fixed-line Telecommunications Segment 63 Mobile Communications Segment 67 3
Slide 4: wm OOftBank
wm OOftBank
Slide 5: Accounting
Accounting Kazuko Kimiwada General Manager Accounting, Internal Control SOFTBANK CORP.
Slide 6: Consolidated P/L Analysis
Accounting Consolidated P/L Analysis 6
Slide 7: Consolidated P/L Summary
Consolidated P/L Summary <bn JPY> Net Sales Operating Income Ordinary Income Net Income 3,000 (FY) 400 +33.4% 2,673.0 359.1 366.3 Q4 +61.1% 690.7 +3.2% 84.4 300 135.6 281.1 1,982.2 2,045.3 274.6 2,000 Q3 696.0 225.6 653.2 94.6 107.6 51.1 200 174.4 Q2 122.3 57.1 +63.0% 1,000 681.7 682.9 94.9 94.7 (FY
Slide 8: Consolidated Net Sales
Consolidated Net Sales <bn JPY> 2,045.3 Mobile Communications +113.4bn 1,982.2 - Increase in telecom service revenue +66.0bn Increase in subscribers +66.4bn Decrease in ARPU -3.6bn +63.0 - Increase in revenue from sales of mobile handsets and accessories +47.4bn (+3.2%) Broadband Infrastructure -23.
Slide 9: Consolidated Operating Income
Consolidated Operating Income <bn JPY> Mobile Communications +80.2bn - Increase in net sales +113.4bn 366.3 - Increase in cost of sales and selling, general and administrative expenses -33.2bn (main factors for increase) +91.6 - Increase in cost of sales for mobile handsets resulting from an increas
Slide 10: Non-operating Income/Expense and Ordinary Income
Non-operating Income/Expense and Ordinary Income <bn JPY> Non-operating Income/Expense Ordinary Income Other non-operating expense FY09/Q1-3 Interest expense Increase in Ordinary Other non-operating income operating Equity in earnings (loss) of affiliated companies income Foreign exchange gain incom
Slide 11: Special Income/Loss and Income Before Income Taxes and Minority Interests
Special Income/Loss and Income Before Income Taxes and Minority Interests < bn JPY> Special Income/Loss Income Before Income Taxes and Minority Interests Other special loss Loss on retirement of non current assets Net of Unrealized appreciation (loss) on v aluation of inv estments at subsidiaries in
Slide 12: Tax and Other Adjustments
Tax and Other Adjustments < bn JPY> FY09/Q1-3 Breakdown of Tax Expenses A Income taxes; current 89.5 (main breakdown) 1. Yahoo Japan 41.9 2. SBM local taxes 26.8 (out of scope for BBM consolidated tax return) 3. BBM income taxes under consolidated tax return 17.6 (all loss carryforwards fully utiliz
Slide 13: Difference in Tax Rate
Difference in Tax Rate FY09/Q1-3 Reconciliation Between Statutory Tax Rate and Effective Tax Rate <reference> Rate(%) Amount (bn JPY) Income before income taxes and minority interests 234.5 Statutory income tax rate 40.7% 95.4 (main factors of difference) Amortization of goodwill (mainly SBM) 7.7% 1
Slide 14: Loss Carryforwards (Dec 09)
Loss Carryforwards (Dec 09) < bn JPY> Occurred Utilized Deferred FY08/Q4 FY09/Q3 During During Tax Company Balance FY09/Q1-3 FY09/Q1-3 Other Balance Expiry (taxable (taxable Assets Name (taxable (taxable Variances Date income income income income (tax based) based) based) based) based) BB Mobile 77.
Slide 15: Consolidated B/S Analysis
Accounting Consolidated B/S Analysis 15
Slide 16: Consolidated B/S Summary
Consolidated B/S Summary SBM Others <bn JPY> Current Assets Current Liabilities 1,520.3 1,608.4 1,349.5 1,254.6 1,035.3 1,059.9 674.8 698.4 484.9 548.5 674.7 556.2 Mar 2009 Dec 2009 Mar 2009 Dec 2009 Fixed Assets Long-term Liabilities 2,865.0 2,748.6 2,212.2 2,160.8 1,953.9 1,861.8 1,672.2 1,489.9 9
Slide 17: Consolidated B/S (1) Current Assets
Consolidated B/S (1) Current Assets <bn JPY> Assets Mar 2009 Dec 2009 Variance Outline Current assets 1,520.3 1,608.4 88.1 SBM 1,035.3 1,059.9 24.5 Others 484.9 548.5 63.5 Cash and deposits 457.9 605.7 147.7 Increase provided by operating activities (+281.4 ) Securitization of installment sales rece
Slide 18: Consolidated B/S (2) Tangible Assets
Consolidated B/S (2) Tangible Assets <bn JPY> Assets Mar 2009 Dec 2009 Variance Outline Fixed assets 2,865.0 2,748.6 -116.3 SBM 1,953.9 1,861.8 -92.0 Others 911.0 886.7 -242 Property and equipment, net 1,000.9 941.5 -59.4 SBM 697.1 655.3 -41.7 Others 303.8 286.1 -17.6 Building and structures 71.5 68
Slide 19: Consolidated B/S (3) Intangible Assets
Consolidated B/S (3) Intangible Assets <bn JPY> Assets Mar 2009 Dec 2009 Variance Outline Fixed assets 2,865.0 2,748.6 -116.3 Intangible assets, net 1,222.1 1,162.1 -59.9 SBM 1,077.4 1,031.1 -46.3 Others 144.6 131.0 -13.5 Goodwill 956.7 911.0 -45.6 SBM 878.5 839.9 -38.5 Decrease due to regular amort
Slide 20: Consolidated B/S (4) Current Liabilities
Consolidated B/S (4) Current Liabilities <bn JPY> Liabilities Mar 2009 Dec 2009 Variance Outline Current liabilities 1,349.5 1,254.6 -94.9 SBM 674.8 698.4 23.5 Others 674.7 556.2 -118.5 Accounts payable-trade 160.3 141.8 -18.5 SBM 100.5 89.9 -10.5 SBB: Mar 09 (38.3) >> Dec 09 (32.9) Others 59.8 51.8
Slide 21: Consolidated B/S (5) Long-term Liabilities
Consolidated B/S (5) Long-term Liabilities <bn JPY> Liabilities Mar 2009 Dec 2009 Variance Outline Long-term liabilities 2,212.2 2,160.8 -51.4 SBM 1,672.2 1,489.9 -182.2 Others 540.0 670.9 130.8 Corporate bonds 324.5 418.5 93.9 SBM - － － Issue SB stand-alone: 27th, 28th, 29th Unsecured Straight Corp
Slide 22: Consolidated B/S (6) Equity
Consolidated B/S (6) Equity <bn JPY> Equity Mar 2009 Dec 2009 Variance Outline Equity 824.7 943.6 118.8 Shareholders’ equity 348.1 442.7 94.5 Common stock 187.6 188.7 1.0 Additional paid-in capital 211.9 213.0 1.0 Accumulated deficit/retained earnings -51.2 41.2 92.4 FY2009/Q3 net income (+94.8), di
Slide 23: [Equity] Foreign Currency Translation Adjustments
[Equity] Foreign Currency Translation Adjustments <bn JPY> 60 Foreign currency translation adjustments account 40 35.9 20 30.6 25.6 7.4 4.4 3.4 0 -25.7 -21.8 -20 -30.5 -31.6 -34.4 -40 Jun 07 Sep Dec Mar 08 Jun Sep Dec Mar 09 Jun Sep Dec <Ref> Main exchange rate trend <JPY> GBP/JPY (TTM） 240 Euro/JPY
Slide 24: [Equity] Shareholders' Equity
[Equity] Shareholders’ Equity Common stock & additional paid-in capital* Accumulated deficit/retained earnings Treasury stock Unrealized gain on available-for-sale securities Deferred gain (loss) on derivatives under hedge accounting Foreigncash * Including currency translation receipts adjustments
Slide 25: Consolidated CF Analysis
Accounting Consolidated CF Analysis 25
Slide 26: Consolidated Cash Flow Main Breakdown
26 Dec 09 603.2 Cash and cash equivalents at the end of the period -69.5 Repayment of lease obligations 55.4 Sale and lease back of equipment newly acquired -51.6 Redemption of bonds Financing CF Consolidated Cash Flow Main Breakdown 153.6 -136.4 Bonds issued -352.3 Repayment of long-term debt Note:
Slide 27: Consolidated Earnings Forecast
Consolidated Earnings Forecast Operating Income Free Cash Flow <bn JPY> 600 600 +19% 500 500.0 +17% 500 420.0 400 400 359.1 +65% 300.0 300 300 200 200 181.5 Not 100 100 Announced 0 0 FY08 FY09 FY10 FY08 FY09 FY10 (actual) (forecast) (forecast) (actual) (forecast) Note: Free Cash Flow (FCF) = cash fl
Slide 28: Scope of Consolidation/Scope of Equity Method
Scope of Consolidation/Scope of Equity Method Number of Name of Core Companies Companies SOFTBANK MOBILE, SOFTBANK BB, SOFTBANK TELECOM, Consolidated subsidiaries 109 Yahoo Japan, SOFTBANK TECHNOLOGY, ITmedia, etc. Newly consolidated subsidiaries 5 Subsidiaries excluded from consolidation 4 Overture
Slide 29: wm OOftBank
wm OOftBank
Slide 30: Finance
Finance Yoshimitsu Goto General Manager Finance SOFTBANK CORP. 30
Slide 31: Main Financial Activities of FY2009 Apr-Dec
Main Financial Activities of FY2009 Apr-Dec (bn JPY) Date Content Amount Issue 27th Unsecured Straight Corporate Bond 2009 June 60.0 (Fukuoka SoftBank HAWKS Bond) Securitization of mobile handset installment sales June 70.2 receivables July Issue 28th Unsecured Straight Corporate Bond 30.0 Issue 29t
Slide 32: FCF Actual - Forecast
FCF Actual - Forecast <bn JPY> 400 300.0 300 118.4bn JPY 181.5 (65%) estimated 200 increase 345.7bn JPY increase FY09/Q1-3 100 actual JPY 283.5bn 0 -100 -200 -164.2 FY07 FY08 FY09 (forecast) Note: Free Cash Flow (FCF) = cash flows from operating activities + cash flows from investing activities 32
Slide 33: Cash Flow Trend
Cash Flow Trend <bn JPY> Operating CF Investing CF Financing CF FCF 500 400 283.5 300 200 100 47.6 0 -100 -200 -216.3 -300 FY07 FY08 FY09 Q1-3 Q1-3 Q1-3 Note: Free Cash Flow (FCF) = cash flows from operating activities + cash flows from investing activities 33
Slide 34: EBITDA and EBITDA Margin (by segment)
EBITDA and EBITDA Margin (by segment) ¾ EBITDA growing steadily in each segment. Consolidated EBITDA EBITDA Margin <bn JPY> Elimination Other 60% Internet Culture e-Commerce 53% Internet BB Infrastructure Fixed-line Telecommunications 54% Culture 650 Mobile Communications 601.2 52% 50% 550 508.4 483
Slide 35: EBITDA - CAPEX
EBITDA - CAPEX ¾ Steady increase due to expansion of EBITDA. <bn JPY> EBITDA – CAPEX 800 678.6 626.6 EBITDA FY09/Q1-3 actual/3X4 525.4 419.5 400 332.9 FY09/Q1-3 actual 601.2 JPY 458.4bn 135.6 0 EBITDA - CAPEX -142.8 EBITDA -259.0 -260.0 -293.7 CAPEX -400 (planned) -389.8 FY06 FY07 FY08 FY09 (forecas
Slide 36: EBITDA – CAPEX (by main segments)
EBITDA – CAPEX (by main segments) <bn JPY> Mobile Communications Broadband Infrastructure 300 300 200 200 272.6 100 150.0 204.6 100 46.2 13.0 33.4 49.0 56.3 0 0 FY09 FY09 FY06 FY07 FY08 FY06 FY07 FY08 Q1-3 Q1-3 Yearly 9 months Yearly 9 months 300 Internet Culture 300 Fixed-line Telecommunications 20
Slide 37: Interest-bearing Debt (by procurement method)
Interest-bearing Debt (by procurement method) <bn JPY> Securitization of installment sales 3,000 receivables obligations SBM loan 2,532.9 2,545.3 2,494.9 2,432.2 2,400.3 2,392.0 2,348.3 219.0 223.1 230.9 2,288.1 Vodafone subordinate loan 218.8 221.9 231.9 221.6 222.3 Yahoo Japan borrowings 2,000 1,2
Slide 38: Lease Obligations
Lease Obligations <bn JPY> 3,000 * Finance leases (accounted for as operating lease transactions) Finance leases (lease obligations) 2,000 1,000 484.9 481.4 494.5 468.7 462.9 436.1 437.7 421.7 173.6 166.0 157.5 149.5 141.3 121.4 112.8 133.4 311.2 315.3 336.9 319.2 321.5 302.7 316.3 308.8 0 Mar Jun S
Slide 39: Net Interest-bearing Debt
Net Interest-bearing Debt <bn JPY> 3,000 2,119.3 2,070.9 2,044.9 2,036.8 1,939.5 1,905.1 2,000 223.1 230.9 219.0 218.8 221.9 231.9 1,768.5 1,678.2 221.6 222.3 Securitization of installment sales receivables obligations 1,000 1,817.8 1,896.2 1,840.0 1,826.1 1,717.5 1,673.1 1,546.9 1,455.8 Excl. secur
Slide 40: Cash Position
Cash Position <bn JPY> 800 720.7 720.8 661.0 141.0 111.0 600 165.0 537.8 525.9 525.0 481.8 51.0 Unused portion of credit 100.0 101.0 21.0 423.3 line facility 400 36.0 Cash and deposits, and 579.7 609.8 marketable securities 496.0 460.8 486.8 200 425.9 424.0 387.3 0 Mar Jun Sep Dec Mar Jun Sep Dec 08
Slide 41: Interest-bearing Debt Long/Short and Fixed/Variable Ratio (Dec 09)
Interest-bearing Debt Long/Short and Fixed/Variable Ratio (Dec 09) Interest-bearing Debt Interest-bearing Debt Long/Short Ratio Fixed/Variable Ratio <bn JPY> <bn JPY> Variable rate procurement Short-term debt 284.5 476.8 (12%) (21%) Fixed interest procurement Long-term debt 2,003.6 1,811.3 (88%) (79
Slide 42: Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend
Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend Interest-bearing Debt Interest-bearing Debt Long/Short Ratio Fixed/Variable Ratio <bn JPY> <bn JPY> Long-term Short-term Fixed Variable 100% 100% 476.8 410.0 354.2 270.4 284.5 639.5 626.8 511.8 80% 80% 60% 60% 1,990.3 2,037.7 2,077.8 2,
Slide 43: Credit Rating
Credit Rating JCR (AA-) AA /AA3 Mobile A+/A Communications S&P(A) credit rating (WBS A/A2 structured rating Moody’s (A3) (senior portion)) A /A3 BBB+/Baa1 JCR( +) BBB/Baa2 BBB /Baa3 SOFTBANK BB+/Ba1 rating Moody’s (Ba2) BB/Ba2 BB /Ba3 S&P(BB) B+/B1 Acquisition of Acquisition of JAPAN TELECOM Vodafon
Slide 44: CDS and Bond Spread
CDS and Bond Spread CDS Bond Spread SOFTBANK CDS (5 years) 26th Unsecured Straight Corporate Bond <bp> <bp> (4.4 years remaining) 26th Unsecured Straight Corporate Bond 28th Unsecured Straight Corporate Bond 2,200 (4.4 years remaining) 550 (2.5 years remaining) 25th Unsecured Straight Corporate Bond
Slide 45: Price Trend of Convertible Bonds
Price Trend of Convertible Bonds <JPY> 150 CB Prices Convertible Bond due 2013 140 (Balance as of Dec 2009: JPY 50.0bn) The end of the exercise period for the put option is February 28, 2010. 130 Convertible Bond due 2014 120 (Balance as of Dec 2009: JPY 50.0bn) 110 Convertible Bond due 2015 (alread
Slide 46: Bond Redemption Schedule
Bond Redemption Schedule ¾ Sustain sufficient repayment resources. <bn JPY> Repayment Capability Corporate Bonds Redemption Schedule Unused portion of credit line facility Cash and cash deposits, and marketable securities SB straight bond 800 720.8 SB convertible bond 111.0 600 423.3 Early redemptio
Slide 47: SBM Loan Cumulative Repayment Amount
SBM Loan Cumulative Repayment Amount ¾ Repayment exceeds plan. <bn JPY> <times> 400 379.2 4.5 Mobile Communications 300 277.0 4.0 leverage ratio 3.7 247.0 211.8 2.7 times 200 181.1 3.5 (Dec 09) 158.2 126.7 104.0 Net interest-bearing 100 3.0 debt basis 2.7 2.1 times 0 2.5 Jun Sep Dec Mar Jun Sep Dec
Slide 48: Outstanding Balance of SBM Loans Below JPY 1 trillion
Outstanding Balance of SBM Loans <bn JPY> Below JPY 1 trillion 1,342.1 1,350 1,311.4 1,295.0 1,300 1,276.4 1,261.9 1,250 1,239.2 1,207.7 Repaid 1,200 1,184.8 1,154.1 JPY 102.2bn 1,150 1,118.9 on January 2010. 1,100 1,088.9 1,050 1,000 986.7 950 900 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Jan 07
Slide 49: Securitization of Installment Receivables in Mobile Communications
Securitization of Installment Receivables in Mobile Communications (reported as borrowings) Securitization of Installment Receivables (reported as borrowings) <bn JPY> 230.9 231.9 221.6 222.3 250 219.0 223.1 218.8 221.9 193.4 200 Outstanding 142.1 balance 150 88.1 100 50 100 88.1 80 71.5 70.2 0 23.0
Slide 50: Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple
Improve Indexes: (1) Interest-bearing Debt/EBITDA Multiple ¾ Expand EBITDA and reduce interest-bearing debt. Interest-bearing Debt/EBITDA (Ref.) Net Interest-bearing Multiple Debt/EBITDA Multiple <times> <times> 8.0 8.0 6.0 6.0 4.8 4.0 4.1 4.0 3.5 4.0 3.3 2.9 2.9 2.1 2.0 2.0 0.0 0.0 FY09 FY09 FY06 F
Slide 51: Improve Indexes: (2) Debt/Equity Ratio
Improve Indexes: (2) Debt/Equity Ratio ¾ Ratio improving steadily. <times> <times> Debt Equity Ratio Net Debt Equity Ratio 12.0 12.0 D/E ratio Net D/E ratio D/E ratio (excl. Mobile Communications business) Net D/E ratio (excl. Mobile Communications business) 10.0 9.0 10.0 7.6 8.0 8.0 6.6 6.4 6.0 6.0
Slide 52: Improve Indexes: (3) Interest Coverage Ratio
Improve Indexes: (3) Interest Coverage Ratio ¾ Maintain stable trend. <times> <times> Interest Coverage Ratio 14.0 Interest Coverage Ratio 14.0 (Quarterly) (Yearly) 12.0 12.0 10.0 10.0 8.0 6.7 7.3 7.5 8.0 7.2 6.1 6.3 6.3 6.0 5.7 6.1 6.0 6.0 5.4 4.0 4.0 2.0 2.0 0.0 0.0 FY08/Q1 Q2 Q3 Q4 FY09/Q1 Q2 Q3
Slide 53: Improve Indexes: (4) Equity Ratio
Improve Indexes: (4) Equity Ratio ¾ Equity ratio recovered to double digits. Equity Ratio (Ref.) Equity Ratio* <bn JPY> <bn JPY> (considering unrealized gain) 2,000 30% 54.5% Shareholders' equity (considering unrealized gain) Shareholders' equity 2,000 1,876.9 Equity ratio (considering unrealized ga
Slide 54: FY2009 Financial Strategies (no change)
FY2009 Financial Strategies (no change) Towards “ZERO net-interest bearing debt” Maximize FCF, through maximum operating CF and appropriate investing CF Continued improvement of various financial indexes through steady reduction of debts Improve credit rating as a result of strengthening of balan
Slide 55: Corporate Bond Details
Corporate Bond Details <mil JPY> Interest rate Mar 09 Dec 09 Company name Bond Issue date Maturity date Collateral Change (%/year) balance balance th 19 series Unsecured Straight Bond 2005/1/31 2010/1/29 1.97 None 19,000 19,000 － th 24 series Unsecured Straight Bond rd 2007/4/26 2010/4/26 2.72 None
Slide 56: wm OOftBank
wm OOftBank
Slide 57: Operation
Operation Kazuhiko Fujihara Senior Vice President, CFO, Director of the Board SOFTBANK MOBILE Corp. Senior Vice President & CFO, Director SOFTBANK BB Corp. Director SOFTBANK TELECOM Corp. 57
Slide 58: Overview of Telecommunications Businesses
Overview of 3 Telecommunications Businesses ¾ Large increase in profit in Mobile Communications led consolidated <bn JPY> operating income to a record high. Broadband Infrastructure Fixed-line Telecommunications Mobile Communications 392.1 (Ref.) consolidated operating income 303.7 YoY (Apr-Dec) +91
Slide 59: Broadband Infrastructure Business
Operation Broadband Infrastructure Business 59
Slide 60: Operating Income, EBITDA
Operating Income, EBITDA <BB> ¾ Maintain trend of revenue increase through cost reductions. <bn JPY> Operating Income EBITDA 80 80 70.3 70.9 18.2 16.8 55.6 52.0 54.1 51.4 47.2 Q4 15.7 39.7 10.6 18.5 20.1 16.0 39.4 40 39.8 40 9.4 36.6 (FY) 26.8 30.2 12.1 Q3 15.4 14.3 17.5 17.3 Q4 7.3 11.3 17.5 19.4 1
Slide 61: Yahoo! BB ADSL Lines and ARPU
Yahoo! BB ADSL Lines and ARPU <BB> ¾ Number of ADSL lines is decreasing. ARPU on same level. Number of Lines <JPY> ARPU <k lines> 6,000 Installed lines 5,000 1.Basic charge 4.BB Phone 2.Modem rental revenue 5.BB Security Charged lines 3.WLAN 6.Yahoo! ISP 5,160 4,940 4,245 5,000 4,430 4,000 6 5 4,570
Slide 62: CAPEX [acceptance basis]
CAPEX [acceptance basis] <BB> ¾ Decreased by JPY 4.3bn from original plan (announced at 09/Q2 earnings release) <bn JPY> CAPEX and Depreciation & Amortization CAPEX 50 47.6 (quarterly trend) (yearly trend) 25 40 20 CAPEX Depreciation & amortization 30 15 22.1 21.2 20 10 14.5 (Ref.) 14.4 orig. plan 6
Slide 63: Fixed-line Telecommunications
Operation Fixed-line Telecommunications 63
Slide 64: Operating Income, EBITDA
Operating Income, EBITDA <Fixed> ¾ Sustain trend of profit increase through enhancement of corporate <bn JPY> lines and efficient management. Operating Income/Loss EBITDA 20 18.9 75 SOFTBANK IDC impact Q3: JPY +0.5bn 64.3 Q2: JPY +0.5bn 15 Q1: JPY +0.5bn 7.6 14.3 18.7 Q1-3(total): JPY +1.6bn 11.3 50
Slide 65: Number of Lines and ARPU for OTOKU Line
Number of Lines and ARPU for OTOKU Line <Fixed> ¾ Sustain number of lines and ARPU due to enhancement of corporate lines. <k lines> Number of Lines <JPY> ARPU 1,800 12,000 Large Corp. 1,660 1,650 Large Corp. Total SME (SBTP) 1,600 SME (excl. SBTP) 1,540 Consumer 10,000 1,400 1,350 1,200 8,000 1,000
Slide 66: CAPEX [acceptance basis]
CAPEX [acceptance basis] <Fixed> ¾ Increased by JPY 4.6bn from original plan (announced at 09/Q2 earnings release) <bn JPY> 40 CAPEX and Depreciation & Amortization 150 CAPEX (quarterly trend) (yearly trend) CAPEX 30 Depreciation & amortization 100 82.6 20 50 9.6 9.4 9.4 9.4 9.2 9.2 9.1 9.1 8.9 8.8
Slide 67: Mobile Communications
Operation Mobile Communications 67
Slide 68: SBM Consolidated Net Sales
SBM Consolidated Net Sales <Mobile> ¾ Both telecom service revenue and handset sales revenue increased YoY. SBM Consolidated Net Sales SBM Consolidated Net Sales (Yearly Comparison) (Quarterly Comparison) <bn JPY> Telecom service revenue Sales of mobile handsets and accessories 1,017.1 1,031.1 Telec
Slide 69: Operating Income
Operating Income (SB consolidated, SBM consolidated) <Mobile> ¾ Increase in profit by approx. 60% by increase of sales and efficient management led the consolidated results. <bn JPY> SB Consolidated SBM Consolidated <bn JPY> Mobile Communications Segment (YoY) (YoY) (Apr-Dec) (Apr-Dec) +92.2 +80.2 2
Slide 70: EBITDA (SB consolidated, SBM consolidated)
EBITDA (SB consolidated, SBM consolidated) <Mobile> ¾ Favorable trend sustained by sales increase and efficient management. <bn JPY> SB Consolidated Mobile Communications Segment SBM Consolidated (YoY) (YoY) (Apr-Dec) (Apr-Dec) +88.4 +87.8 (+29.1%) (+29.4%) 403.8 397.2 385.4 392.1 386.5 400 400 376.
Slide 71: Quarterly Net Additions
Quarterly Net Additions <Mobile> ¾ Continued steady growth in net additions. <k subs> 1,000 973 No.1 in net addition share for 11 consecutive quarters* 800 612 633 FY09/Q3 600 531 561 526 521 net additions 400 412 367 361 350 323 350k <Breakdown> 190 Postpaid +383k 200 125 93 67 Prepaid -33k 25 30 0
Slide 72: Trend of Total Subscribers and 3G Subscribers
Trend of Total Subscribers and 3G Subscribers <Mobile> ¾ Number of total subscribers growing steadily. 3G ratio increased to 96.4%. <mil subs> 21.67 20.00 20 2G 3G Cumulative Subscribers 17.61 2009/12 21.67mil 15.12 15.50 15 2006/6 15.24mil 2.32 Increase +6.43mil 5.96 12.28 17.25 20.89 10 3G Ratio 1
Slide 73: Aspects of 2G Subscribers
Aspects of 2G Subscribers <Mobile> ¾ As of 09/Q3, prepaid represented approx. half of 2G subscribers. 2G ARPU is declining. ¾ Telecom service revenue from 2G is 1.7% of the total for 09/Q3, impact is minor. Subscribers ARPU Telecom Service JPY Revenue mil subs 3G bn JPY 2G postpaid 6,000 Total 300 3
Slide 74: Loss on Retirement of Non Current Assets and Impact on Operation
Loss on Retirement of Non Current Assets and Impact on Operation <Mobile> Amount Note (JPY bn) - Facility removal cost and loss on retirement of telecommunications equipment along with the termination of 2G service. Equipment used for 2G mobile phone services 24.3 - Equipment used exclusively for 2G
Slide 75: Churn Rate & Upgrade Rate
Churn Rate & Upgrade Rate <Mobile> ¾ Churn rate higher YoY due to end of installment contracts, yet QoQ improved. ¾ Upgrade rate decreased slightly YoY, number of upgrades at same level. Churn Rate Upgrade Rate Total 3G postpaid 3.02% 3.0% 2.0% 1.66% 2.00% 1.60% 2.0% 1.21% 1.16% 0.91% 1.67% 1.0% 1.5
Slide 76: Churn Rate Details
Churn Rate Details <Mobile> ¾ Churn rate largely varies according to type of contract, history of model changes. Churn Rate by Type of Contract Churn Rate by Model Change (FY09/Q3) (FY09/Q3) 4.5% (details) <postpaid 3G> 4.0% 3.94% (details) 4.0% 3.5% 3.5% 3.0% 3.0% 2.73% 2.5% 2.5% 2.0% 2.0% 1.60% 1.
Slide 77: New Super Bonus Ratio and Installment Sales Receivables Balance
New Super Bonus Ratio and Installment Sales Receivables Balance <Mobile> ¾ Maintain high subscription ratio. Installment balance over peak. New Super Bonus Subscription Ratio Installment Sales Receivables Balance <bn JPY> (include Super Bonus) 600 Long-term balance Acquisitions installment ratio (*1
Slide 78: Cash Flow Impact from Installment Sales Receivables
Cash Flow Impact from Installment Sales Receivables <Mobile> ¾ Impact on operating CF in FY09 Q1-3 JPY 95.5bn. Impact on operating CF decreasing. <bn JPY> Impact on Operating CF (cumulative) Installment Sales Installment Increase in Impact on Receivables Sales Installment Operating <bn JPY> Balance
Slide 79: ARPU (telecom service revenue per subscription)
ARPU (telecom service revenue per subscription) <Mobile> ¾ Total ARPU in steady recovery, after bottoming in FY08/Q4. ¾ QoQ: data ARPU, in growth trend, rose above JPY 2,000. <JPY> 6,000 5,560 Data Basic charge + voice QoQ Comparison 5,000 4,520 4,090 4,150 4,200 Total +50 JPY 4,000 Basic charge 4,2
Slide 80: ARPU (telecom service revenue per subscription)
ARPU (telecom service revenue per subscription) <Mobile> ¾ Turnaround of total ARPU to YoY growth for the first time (increased by JPY 110). ¾ YoY: voice ARPU continues to decrease at slower pace. Data increases by JPY 270 (approx. 15%). <JPY> (YoY comparison) Monthly Discounts 6,500 Basic charge +
Slide 81: ARPU (telecom service revenue per subscription) YoY Comparison
ARPU (telecom service revenue per subscription) YoY Comparison <Mobile> ¾ Turnaround of total ARPU to YoY growth for the first time (increased by JPY 110). <JPY> (YoY:%) SOFTBANK YoY: JPY+110 0 (+2.7%) -20 (-0.5%) -200 NTT DOCOMO -280 -400 (-4.8%) KDDI -430 (-9.5%) -600 -800 -1,000 -1,040 -1,200 (-1
Slide 82: Cash Income Per Subscription (average)
Cash Income Per Subscription (average) <Mobile> ¾ Favorable trend in cash income per subscriber (incl. HS installment payments). Impact from access * charge HS installment payment <JPY> Backup Service Package, etc. 7,000 Voice leap year Data 6,040 5,980 5,970 6,000 5,780 5,750 200 1,000 1,680 1,540
Slide 83: CAPEX [acceptance basis]
CAPEX [acceptance basis] <Mobile> ¾ Increased by JPY 39.8bn from original plan (announced at 09/Q2 earnings release) <bn JPY> CAPEX and Depreciation & Amortization CAPEX (quarterly trend) (yearly trend) 400 100 CAPEX (Mobile Communications business) Depreciation & amortization (Mobile Communications
Slide 84: Improvement in Management Efficiency
Improvement in Management Efficiency <Mobile> ¾ Large reduction in inventory since FY07 ¾ Large improvement of allowances <bn JPY> SBM Inventory (on B/S) <bn JPY> Allowance for Doubtful Accounts of 70 Installment Receivables and Bad Debt Loss 66.0 35 (on P/L) 60 30.4 30 09/Q3 50 Occurred in this per
Slide 85: SBM Average Acquisition Cost per Subscriber and Gross Margin
Average Acquisition Cost per Subscriber and Gross Margin from Sales of Mobile Handsets and Accessories ¾ Reduction in acquisition cost in YoY, increased in QoQ. <Mobile> SBM Average Acquisition Cost per Subscriber and Gross Margin <k JPY> from Sales of Mobile Handsets and Accessories per Unit 60 Ave
Slide 86: Trademark and copyright notice
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