Softbank Corp. · TSE:9434
Softbank — H1 FY2020 Earnings Presentation
36 slides from Softbank's earnings presentation, Nov 4, 2020
Slide 1: Earnings Results for the Six Months Ended September 30, 2020
Earnings Results for the Six Months Ended September 30, 2020 Investor Briefing SoftBank Corp. November 4, 2020
Slide 2: Disclaimer
Disclaimer Important Notice Regarding Forward Looking Statements and Other Information This document is based on the information available to SoftBank Corp. (“we” or “the Company”) as of the time hereof and assumptions which it believes are reasonable. Statements contained herein that are not histor
Slide 3: Results for H1 FY2020
Results for H1 FY2020 ◼ Despite the impact of COVID-19, progress is at a steady pace towards full-year forecast, aiming for an increase in revenue as well as record high profits Revenue Operating Income Net Income*2 [JPY bn] [JPY bn] [JPY bn] Progress 49% Progress 50% Impact of gains/losses on FY Fo
Slide 4: Revenue (1/2)
Revenue (1/2) ◼ Yahoo drove growth, JPY +73.1 bn (+15.1%) YoY. Enterprise steady, JPY +20.5 bn (+6.5%) YoY ◼ Consumer was JPY -34.8 bn (-2.6%) YoY. Sales of goods and others was JPY -57.3bn YoY due to decrease in mobile device sales, Service revenues was steady at JPY +22.5 bn YoY By Segment Consume
Slide 5: Revenue (2/2)
Revenue (2/2) ◼ Enterprise grew by JPY +20.5 bn (+6.5%) YoY, driven by +17% in Business solution and others ◼ Yahoo grew by a double-digit basis, JPY +73.1 bn (+15.1%) YoY, driven by significant YoY growth in Commerce Enterprise Breakdown Yahoo Breakdown*1 5,900 [JPY bn] [JPY bn] +73.1 YoY 5,800 +15
Slide 6: Operating Income/Adjusted EBITDA/Segment Income
Operating Income/Adjusted EBITDA/Segment Income ◼ Adjusted EBITDA: JPY +66.4bn (+7.6％) YoY ◼ Operating income: JPY +37.6 bn (+6.8％) YoY, increased in all segments. Yahoo and Enterprise recorded double- digit growth and drove total growth Operating Income/Adjusted EBITDA*1 Segment Income 10,000 [JPY
Slide 7: Operating Income (YoY Comparison)
Operating Income (YoY Comparison) ◼ Consumer income increased slightly. Sales were stable, excluding Half-Price Support (JPY 11.0 bn) and First-year and Half-year discounts (JPY -22.2 bn). Reduction in sales-related expenses made a good contribution ◼ Enterprise grew by JPY +10.0 bn YoY. Strong sale
Slide 8: Accounting Related to Support Programs for Mobile Device Purchases
Accounting Related to Support Programs for Mobile Device Purchases ◼ Revised reserve of SoftBank’s cost based on three-year track record since introduction of the program ◼ Reversal of contract liabilities related to Half-Price Support of JPY 11.0 bn was recorded as one-time revenue Half-Price Suppo
Slide 9: Mobile Communications Charge
Mobile Communications Charge ◼ Clarification of pure mobile communications charge-related business Revenue Operating Income By segment Clarification By segment Clarification Enterprise, Yahoo, Enterprise, Yahoo, Distribution, Same as left Distribution, Same as left and Other and Other Sales of goods
Slide 10: Revenue/Operating Income Proportion (Non-audited)
Revenue/Operating Income Proportion (Non-audited) ◼ Proportion of mobile communications charge is continuously decreasing, and businesses other than mobile communication (non-telecom) are becoming growth drivers Operating Revenue*1 Operating Income*2 Revenue*1 Income*2 ZHD ZHD Consolidated Consolida
Slide 11: Revenue/Operating Income (Non-audited)
Revenue/Operating Income (Non-audited) ◼ Revenue and operation income of mobile communications charge are both stable Operating Revenue*1 Operating Income*2 Revenue*1 Income*2 ZHD ZHD 10,000 [JPY bn] [JPY bn] [JPY bn] [JPY bn] Consolidated Consolidated 4,861.2 911.7 2,373.1 2,428.4 3,746.3 3,483.1 3
Slide 12: Net Income (YoY Comparison)
Net Income (YoY Comparison) ◼ Effect from one-time gains/losses on sales and valuations of shares in the previous and current fiscal year (a) ◼ Impact on net income attributable to non-controlling interests mainly came from ZHD earning growth (including impact from ZOZO consolidation) (b) [JPY bn] -
Slide 13: CAPEX/Adjusted Free Cash Flow
CAPEX/Adjusted Free Cash Flow ◼ CAPEX was JPY 178.2 bn. CAPEX excluding ZHD was JPY 141.8 bn ◼ Adjusted free cash flow excluding ZHD (including IFRS 16 impact) was JPY 401.9 bn. Steady progress towards full-year target of JPY 670.0 bn CAPEX*1 Adjusted FCF*2,4 [JPY bn] [JPY bn] Total 395.7 501.6 200
Slide 14: Interest-bearing Debt/Net Interest-bearing Debt and Net Leverage Ratio
Interest-bearing Debt/Net Interest-bearing Debt and Net Leverage Ratio ◼ Net interest-bearing debt decreased QoQ due to the impact of working capital of ZHD. Financing has been diversified by utilizing straight bonds and ECA*1 finance, etc. ◼ Net leverage ratio improved due to decrease of net intere
Slide 15: Cumulative Subscribers (Main Subscribers/Smartphones)
Cumulative Subscribers (Main Subscribers/Smartphones) ◼ Smartphone subscribers exceeded 25.00 mil (+1.97 mil YoY). Y!mobile drove the growth, reached 20% of total smartphone subscribers ◼ Cumulative main subscribers reached 37.28 mil (+1.72 mil YoY) Cumulative Subscribers*1 Smartphone Subscribers Yo
Slide 16: Churn Rate (Main Subscribers/Smartphones)
Churn Rate (Main Subscribers/Smartphones) ◼ Churn rates for both main subscribers and smartphones dramatically improved, YoY -0.10% 0.01 0.01 YoY 0.98% 0.99% 0.01 0.88% -0.10% Main subscribers 0.73% 0.01 0.74% 0.72% 0.01 0.64% -0.10% Smartphones 0.53% 0.00 0.00 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY1
Slide 17: ARPU (Main Subscribers)
ARPU (Main Subscribers) ◼ ARPU before discount decreased due to introduction of unbundling plan (including family discounts and Smartphone Debut Plan), effects from First-year and Half-year discount*1, and a rise in composition ratio of Y!mobile and LINE MOBILE subscribers (a) ◼ Discount ARPU also g
Slide 18: Broadband Service
Broadband Service ◼ SoftBank Hikari cumulative subscribers (connected lines) reached 6.76 mil, steadily increased by 0.60 mil YoY ◼ Increase in subscribers accelerated partly from increased telework needs (Net adds of FY20Q2 +0.16, FY19Q2 +0.11). Home Bundle Discount Hikari Set subscribers increased
Slide 19: ZHD and SB Payment Service: Transaction Value
ZHD and SB Payment Service: Transaction Value ◼ E-commerce transaction value was +30% YoY due to factors such as the consolidation of ZOZO and increased demand for online shopping under COVID-19 ◼ SB Payment Service transaction value in Q2 recovered from a temporary decline in travel and entertainm
Slide 20: PayPay: Registered Users and No. of Payments
PayPay: Registered Users and No. of Payments ◼ Cumulative registered users grew by 2.2 times YoY and number of payments grew by 5.1 times YoY ◼ Rapid growth through synergies from cooperation among Paytm’s technological capabilities, Yahoo’s engineers and marketing, and SoftBank’s sales capabilities
Slide 21: PayPay: Capital Structure
PayPay: Capital Structure ◼ Stock acquisition rights*1 issued to Paytm in Sep 2020. Future consolidation of PayPay would be considered and make PayPay a core business of SoftBank Ratio of Voting Rights After conversion of preferred Present stock (after FY22) + exercise of stock acquisition rights by
Slide 22: Secondary Offering of Shares
Secondary Offering of Shares ◼ In September 2020, SoftBank Group executed a secondary offering of SoftBank Corp.’s shares ◼ SoftBank Group’s ownership decreased to 40%, increasing the presence of minority shareholders Shareholder Composition*1 End of Mar 2020 67% 17% 7% 10% End of Sep 2020 40% 27% 1
Slide 23: Net Income by Segment (Non-audited)
Net Income by Segment (Non-audited) ◼ As Beyond Carrier strategy progresses, sources of revenue and earnings diversified ◼ PayPay and other new business fields are in the investment phase [JPY bn] FY19*1 *3 Adjusted Operating Financing Profit/loss Income Non- Net Revenue income/ from equity taxes*6
Slide 24: Growth and Shareholder Returns
Growth and Shareholder Returns ◼ Aim to achieve both operating income of over JPY 1 tn in FY22 and continue stable and high dividend policy. Continue policy to achieve both growth and shareholder returns. Operating Income*1 Shareholder Returns Over JPY 1 tn in FY22 No dividend reduction every year /
Slide 25: Appendix
SoftBank Appendix
Slide 26: Consolidated Statements of Income
Consolidated Statements of Income [億円] [JPY bn] FY19H1 FY20H1 Variance Reasons for Variance Revenue 2,373.1 2,428.4 +55.3 Cost of sales -1,201.2 -1,184.6 +16.6 Gross profit 1,171.9 1,243.9 +72.0 Selling, general and administrative expenses -631.9 -654.3 -22.3 Gain on loss of control due to the recla
Slide 27: Consolidated Statements of Financial Position (Assets)
Consolidated Statements of Financial Position (Assets) [億円] [億円] [JPY bn] As of As of Variance Reasons for Variance Mar 31, 2020 Sep 30, 2020 Total assets 9,792.3 10,490.8 +698.6 Current assets 3,364.3 3,849.3 +485.0 Increase in funds procured from securitization of sales receivables and Cash and ca
Slide 28: Consolidated Statements of Financial Position (Liabilities)
Consolidated Statements of Financial Position (Liabilities) [億円] [JPY bn] As of As of Variance Reasons for Variance Mar 31, 2020 Sep 30, 2020 Total liabilities 8,084.7 8,648.0 +563.3 Current liabilities 4,496.6 4,735.1 +238.5 Interest-bearing debt 1,811.3 2,145.3 +334.0 Increase from securitization
Slide 29: Consolidated Statements of Financial Position (Equity)
Consolidated Statements of Financial Position (Equity) [億円] [JPY bn] As of As of Variance Reasons for Variance Mar 31, 2020 Sep 30, 2020 Total equity 1,707.6 1,842.9 +135.3 Equity attributable to owners of the Company 1,000.5 1,126.7 +126.2 Common stock 204.3 204.3 - Capital surplus -133.9 -136.1 -2
Slide 30: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows [JPY bn] FY19H1 FY20H1 Reasons for Variance Cash flows from operating activities 566.1 785.9 Net income 346.6 346.7 Depreciation 327.3 342.9 Change in working capital -90.8 -56.9 Interest paid -26.4 -29.2 Income taxes paid/refunded -124.6 -156.1 Other 134.0 338.
Slide 31: Subsidiaries (1/2)
Subsidiaries (1/2) ◼ 263 group companies at the end of Sep 2020 (of which, 201 subsidiaries and 62 affiliate*1 companies) Ratio of Voting Segment Company Name Business Description Blue: listed company Rights Held Wireless City Planning Inc. 32.2% Telecommunication services (Economic interests: 99.5%
Slide 32: Subsidiaries (2/2), Affiliates
Subsidiaries (2/2), Affiliates Ratio of Voting Segment Company Name Business Description Blue: listed company Rights Held HAPSMobile Inc. 92.9% 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 s
Slide 33: Business Integration Between ZHD and LINE
Business Integration Between ZHD and LINE ◼ After the business integration is completed, the JV (consolidated by SoftBank) between NAVER and SoftBank will own 65.3% of ZHD Post-Integration Structure ・SoftBank will have control of the majority of the board of directors 50% 50% (three out of five nomi
Slide 34: Timeline of Business Integration between ZHD and LINE
Timeline of Business Integration between ZHD and LINE Nov. 18, Dec. 23, Aug 4, Sep 15, Jan 2021 Mar 2021 2019 2019 2020 2020 (Plan) (Plan) Completion of joint Commencement of Acquired clearance tender offer for tender offer for Signing of Signing of from JFTC*1 LINE shares by ZHD shares by Memorandu
Slide 35: SoftBank's Priority Issues (Materiality)
SoftBank’s Priority Issues (Materiality) ◼ Identified priority issues (materiality) to contribute to the achievement of Sustainable Development Goals (SDGs) Building society and Connecting people to Creating new business issues through Solving social industry through information to create through op
Slide 36: SoftBank
SoftBank