Softbank Group Corp. · TSE:9984
Softbank — FY2021 Earnings Presentation
34 slides from Softbank's earnings presentation, May 13, 2022
Slide 1: Earnings Results for the Fiscal Year Ended March 31, 2022
Earnings Results for the Fiscal Year Ended March 31, 2022 Investor Briefing May 13, 2022 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (including Arm Limited, together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment inc
Slide 3: Exchange rates and abbreviations
Exchange rates per JPY used for translation FY2020 FY2021 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 107.74 105.88 104.45 106.24 110.00 110.47 113.60 117.10 1 CNY 15.16 15.27 15.71 16.31 17.01 17.09 17.75 18.43 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 110.71 122.39
Slide 4: How We See the Current Environment
How We See the Current Environment Developments in U.S. monetary policy and increased geopolitical risks posed by the Russia-Ukraine issue 3.5 170 105 10 Year May 6, NASDAQ 2 Year 2022 S&P500 3.1% 160 May 6, 3 2022 100 -4.9% 150 ＋47% May 6, 2.3% -9.1% 2022 2.5 140 95 -13.5% 2.7% 130 2 90 120 +33% 2.
Slide 5: How We See the Current Environment: U.S.-listed Chinese stocks
How We See the Current Environment U.S.-listed Chinese stocks are sliding in the wake of regulatory developments in both U.S. and China ($) Announcement of policies & regulations 25,000 in U.S. and China Regulatory and policy development in China Jun 2021: Data Security Law was passed Aug 2021: ”Com
Slide 6: How We Act under the Current Environment
How We Act under the Current Environment Understanding of current environment SBG in FY21 ◆ External environment remains highly ◆ Equity value of holdings declined amid volatile with capital markets in a volatile market conditions broadly risk-off mode ◆ Firmly kept the financial policies: LTV maint
Slide 7: Accounting
Accounting
Slide 8: Consolidated Results
Consolidated Results (¥ B) FY20 FY21 Change Change % Net sales 5,628.2 6,221.5 593.4 10.5% Income before 5,670.5 -869.6 -6,540.0 ― income tax Net income (attributable to owners of the 4,988.0 -1,708.0 -6,696.0 ― parent) (Reference) Gain (loss) on 7,529.0 -3,434.7 -10,963.7 ― investments Investment B
Slide 9: Change in Reportable Segments
Change in Reportable Segments • From FY21Q1, SoftBank Latin America Funds, which were previously included within “Other,” are newly presented as an independent reportable segment. • In FY21Q2, “SoftBank Vision Funds Segment” was renamed from “SVF1 and Other SBIA-Managed Funds Segment.” FY20 Investme
Slide 10: Termination of Agreement on Sale of All Shares in Arm: Accounting Treatment
Termination of Agreement on Sale of All Shares in Arm: Accounting Treatment • Sep 2020: Agreed on a sale of all Arm shares to NVIDIA • Feb 2022: Terminated the sale agreement – $2.0B cash received in Sep 2020 ✓ $1.25B: SBGC received as a deposit -> Recognized ¥146,375M as profit in FY21Q4 as the dep
Slide 11: Segment Income: Investment Business of Holding Companies
Segment Income: Investment Business of Holding Companies (¥ B) P/L item FY20 FY21 Items Gain on investments at Investment Business of Holding Companies 946.1 104.1 Gain relating to settlement of prepaid forward contracts using Alibaba shares ― 200.0 Gain relating to a partial settlement of Alibaba p
Slide 12: Partial Sale of T-Mobile Shares in September 2021
Partial Sale of T-Mobile Shares in September 2021 Number of shares held Procured (millions) Execution Transaction amount Deutsche timing T-Mobile ($ B) Telekom shares shares a Borrowings made using 106.3M T-Mobile shares pledged as collateral (margin loan) 4.38 Jul 2020 Number of shares held as of J
Slide 13: T-Mobile Shares: The Company's Holding & Fair Values
T-Mobile Shares: The Company’s Holding (incl. Deutsche Telekom’s Unexercised Call Options) & Fair Values T-Mobile shares held by the FY20 FY21 Company as of FY21-end: Jun. 26 Q4-end Q1-end Q2-end Q3-end Q4-end 60.92M shares ((i)+(ii) below) $144.83 (i) Unexercised call options held by Deutsche Telek
Slide 14: Deutsche Telekom Shares: The Company's Holding & Fair Values
Deutsche Telekom Shares: The Company’s Holding & Fair Values In Sep 2021, the Company FY21 acquired 225M Deutsche At execution in Sep Q2-end Q3-end Q4-end Telekom shares in return for Deutsche Telekom share price the sale of T-Mobile shares. €17.67 €17.40 €16.93 €16.30 ¥48.5B unrealized valuation lo
Slide 15: T-Mobile Shares: Fair Values of Contingent Consideration
T-Mobile Shares: Fair Values of Contingent Consideration • Contingent consideration: $144.83 The Company’s right to T-Mobile share price $134.85 $125.29 $127.76 $128.35 acquire 48.75M T-Mobile shares for no $114.36 $115.98 additional consideration if $104.15 certain conditions are met ¥93.0B derivat
Slide 16: Investment in Listed Stocks and Other Instruments
Investment in Listed Stocks and Other Instruments: Main Impact on B/S and P/L (Gain (Loss) on Investments) (¥ B) Consolidated B/S Consolidated P/L Cumulative Consolidated B/S Consolidated P/L Investor Investment type (Minuses show liabilities) amount recorded gain (loss) account account since incept
Slide 17: Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts
Derivative Gain (Loss) on Alibaba Prepaid Forward Contracts (Quarterly Trend) $293.98 Alibaba share price (at each quarter end) (Impact on P/L) (¥ B) FY21 $226.78 $232.73 Income before 1,133.0 $226.73 income tax ($10.1B) $215.70 $148.05 Net income 705.1 $118.79 $108.80 ($6.3B) Day 1 gain on 63.8 the
Slide 18: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (¥ B) P/L item FY20 FY21 Change Continuing operations Gain on investments at Investment Business of Holding Companies: Net sales +5,628.2 +6,221.5 +593.4 +¥104.4B (See page 5 for details.) • Loss on investments in listed stocks and other instruments: -¥229.5B Gross p
Slide 19: Difference in Tax Rate
Difference in Tax Rate (Minuses show expenses) FY21 Rate (％) Amount (¥ B) Income before income tax (minus: loss) -869.6 *1 Effective statutory tax rate 31.5％ 273.6 (Main factors of difference) (i) Permanent difference (mainly tax rate differences) -127.1% -1,105.2 (ii) Income taxes related to interc
Slide 20: Loss Carryforwards (as of Mar. 31, 2022)
Loss Carryforwards (as of Mar. 31, 2022) (¥ B) Valuation Carrying amounts Income base Tax base allowance in B/S Total of companies 3,551.7 1,128.8 -1,083.2 45.6 based in Japan Total of companies 335.1 47.8 -21.6 26.2 based outside of Japan Consolidated total 3,886.8 1,176.6 -1,104.8 71.8 Accounting
Slide 21: Consolidated B/S Summary (IFRSs) – Non-current assets
Consolidated B/S Summary (IFRSs) – 1 (¥ B) B/S 1 Main items Mar 2021 Mar 2022 Change Current assets related to investments from SB Northstar item A: Decrease primarily due to sale of listed stocks 10,820.2 10,028.6 -791.6 B: Decrease due to sale of investments C: Decrease in the fair value of long c
Slide 22: Investment Securities on Consolidated B/S (Main Investments)
Investment Securities on Consolidated B/S (Main Investments) (¥ B) Mar 2021 Mar 2022 Change Outline Investment securities 3,706.8 4,208.6 +501.8 FVTPL 3,187.6 3,730.9 +543.3 • New and follow-on investments and increase in fair values of investments Latin America Funds 441.0 1,123.2 +682.2 • 101 inve
Slide 23: Consolidated B/S Summary (IFRSs) – Non-current liabilities
Consolidated B/S Summary (IFRSs) – 2 (¥ B) B/S item Main items Mar 2021 Mar 2022 Change 1 12,891.0 12,381.5 -509.5 SB Northstar: Borrowings (current) -¥1,833.0B 1 ¥1,170.4B decrease in short-term borrowings and repayment of $6.0B margin Interest-bearing debt 7,735.2 7,328.9 -406.4 loans using Alibab
Slide 24: Consolidated B/S Summary (IFRSs) – Equity
Consolidated B/S Summary (IFRSs) – 3 (¥ B) B/S Items Mar 2021 Mar 2022 Change item 1 • Net income attributable to owners of the parent: -¥1,708.0B 11,955.6 11,707.8 -247.8 • Decrease following the retirement of treasury stock: -¥2,475.8B 366,860,600 shares were retired in May 2021 (equivalent to Com
Slide 25: Impact of the Weaker Yen on P/L & B/S (Illustration)
Impact of the Weaker Yen on P/L & B/S (Illustration) P/L B/S Entities Components Foreign exchange Exchange differences gain (loss) from translation Foreign currency- denominated cash and cash equivalents/ SBG stand-alone + Loans receivable Foreign exchange gain Subsidiaries conducting (excl. investm
Slide 26: Impact of the Weaker Yen in FY21
Impact of the Weaker Yen in FY21 Foreign exchange loss in consolidated P/L in FY21: ¥706.1B (of which <90% from SBG stand-alone) ・SBG stand-alone: ¥708.4B foreign exchange loss related to foreign currency-denominated borrowings from foreign subsidiaries ・SBG stand-alone: ¥146.0B foreign exchange los
Slide 27: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) (¥ B) C/F item FY20 FY21 Change Primary details for FY21 C/F from operating activities: +¥2,168.2B yoy Subtotal of cash flows from • +¥2,044.5B incremental impact from sales of investments, etc. by SB Northstar C/F from 3,659.3 • Increase in income taxes paid: -¥285.
Slide 28: Segment Income: SoftBank Vision Funds
Segment Income: SoftBank Vision Funds (¥ B) P/L FY20 FY21 FY21 Items Gain (loss) on investments at SVF1, SVF2, and others 6,357.5 -3,547.4 SVF1: +¥1,226.1B Entire sale of shares in 3 portfolio companies and a partial sale of shares in 13 portfolio Realized gain on investments* 419.6 1,354.7 companie
Slide 29: Co-investment Program to SVF2: Related Party Transaction
Co-investment Program to SVF2: Related Party Transaction Masayoshi SBG Son* 1 Equity interests: 17.25% (B) (A) Distribution: $173M Equity acquisition amount: $2,923M 100% (Return of capital) (i) Acquisition costs: $2,594M (committed capital: $2.6B) (ii) Adjustments etc.: $329M Equity interests: 82.7
Slide 30: Appendix
Appendix
Slide 31: How the Weaker Yen Moves Fair Values of Investment Assets
How the Weaker Yen Moves Fair Values of Investment Assets at Foreign Subsidiaries/Associates Year-end rate Year-average rate Year-end rate ¥110/$ ¥115/$ ¥120/$ Equity (B/S): Changes in fair values Increase/decrease in of investment assets exchange differences at foreign from the translation of subsi
Slide 32: Investment in WeWork
Investment in WeWork • In Aug 2021, SBG transferred SBWW, a wholly owned subsidiary that holds WeWork common stock and preferred stock, to SVF2 in accordance with the policy for handling the investment portfolio. • On Oct. 21, 2021, WeWork listed on NYSE through a merger with a SPAC, BowX Acquisitio
Slide 33: Breakdown of Goodwill/Intangible Assets
Breakdown of Goodwill/Intangible Assets (¥ B) Change B/S Main items Mar 2021 Mar 2022 Outline Item Amorti- Changes in Others zation FX rate 4,684.4 4,897.9 * Arm 2,621.6 2,898.1 ― +276.6 ― Goodwill SBKK 907.5 907.5 ― ― ― Increased due to the revision of the provisional LINE 627.9 630.6 ― ― +2.7 amou
Slide 34: T-Mobile Shares: Partial Exercise of Call Options by Deutsche Telekom
(FY21) T-Mobile Shares: Partial Exercise of Call Options by Deutsche Telekom & Loss on Partial Sale of T-Mobile Shares Related to the Exercise • In Sep 2021, Deutsche Telekom FY20 FY21 partially exercised its call options. Jun. 26 Q4-end Q1-end At execution in Sep (Breakdown of the exercised call op