Slide 1: Earnings Results For the Fiscal Year Ended March 31, 2007
Earnings Results For the Fiscal Year Ended March 31, 2007 May 8, 2007 SOFTBANK CORP. March 12, 2010 Version Due to protection of rights, some of the photos and images included at the time of publication have been modified or revised. “FY2007” and “FY07” refer to the fiscal year ending March 31, 2007
Slide 2: Was the Vodafone K.K. acquisition a success?
Was the Vodafone K.K. acquisition a success? 2
Slide 3: Yes!
=m OOftBank Yes!
Slide 4: Concerns before acquisition
Concerns before acquisition Funds? JPY1.45tn refinance completed Profitability? Operating income approx. 1.8X previous year (SOFTBANK MOBILE consolidation) Subscribers? Annual net additions approx. 4X previous year Brand strength? Most favored company through TV commercials 4
Slide 5: Consolidated Earnings Results for the Fiscal Year ended March 31, 2007
Consolidated Earnings Results for the Fiscal Year ended March 31, 2007 5
Slide 6: FY 2007 Summary of consolidated earnings results (annual)
FY 2007 Summary of consolidated earnings results (annual) <unit bn JPY> <FY 07 annual> FY07 FY06 Year on year (Apr/06-Mar/07) (Apr/05-Mar/06) Net Sales 2,544.2 1,108.6 +1,435.5 EBITDA 525.4 149.9 +375.5 Operating income 271.0 62.2 +208.7 Ordinary income 153.4 27.4 +125.9 Income before income taxes a
Slide 7: Consolidated net sales (annual)
Consolidated net sales (annual) <unit tn JPY> 2.54 2.5 2.0 FY07 1.5 2.5tn JPY 1.10 YoY 1.0 0.83 +1.4tn JPY 0.51 0.5 0.40 0.0 FY03 FY04 FY05 FY06 FY07 7
Slide 8: Consolidated net sales by segment (annual)
Consolidated net sales by segment (annual) 3,000 <unit bn JPY> 2,544.2 2,500 2,000 Mobile Communications 1,430.8 (SOFTBANK MOBILE) 1,500 1,108.6 1,000 Others 272.7 256.9 e-Commerce 155.5 191.5 Internet Culture 500 Fixed-line Telecommunications 347.4 332.1 (SOFTBANK TELECOM) 267.2 258.8 BB Infrastruc
Slide 9: Consolidated EBITDA (annual)
Consolidated EBITDA (annual) 525.4 <unit bn JPY> 500 400 FY07: 300 525.4bn JPY 200 149.9 YoY 100 +375.5bn JPY 28.8 44.0 (x3.5) 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 -10.0 -22.0 -100 -71.0 EBITDA： Operating Income (loss) +depreciation and amortization, loss on disposal of fixed assets included in oper
Slide 10: EBITDA by segment (annual)
EBITDA by segment (annual) <unit bn JPY> 550 525.4 450 321.4 Mobile Communications 350 (SOFTBANK MOBILE) 250 7.7 e-Commerce 149.9 Internet Culture 150 5.9 106.2 81.6 Fixed-line Telecommunications 42.5 (SOFTBANK TELECOM) 50 21.4 55.6 BB Infrastructure 48.9 Others (Includes elimination or corporate) -
Slide 11: Consolidated operating income (annual)
Consolidated operating income (annual) <unit bn JPY> 300 271.0 FY07 200 271.0bn JPY 100 62.2 YoY 16.4 +208.7bn JPY 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 -25.3 -23.9 -54.8 -100 -91.9 11
Slide 12: Operating income by segment (annual)
Operating income by segment (annual) 300 271.0 <unit bn JPY> 250 Mobile Communications 155.7 200 (SOFTBANK MOBILE) 150 6.6 e-Commerce 62.2 Internet Culture 100 4.8 96.5 74.1 BB Infrastructure 50 Fixed-line Telecommunications 20.6 26.8 (SOFTBANK TELECOM) 0 -2.9 -25.1 Others (Includes elimination or c
Slide 13: SOFTBANK MOBILE operating income (annual)
SOFTBANK MOBILE operating income (annual) <unit bn JPY> 150 134.6 100 76.3 Operating income 1.8X 50 0 *SOFTBANK MOBILE Corp. consolidated operating income FY06 FY07 13
Slide 14: Consolidated ordinary income (annual)
Consolidated ordinary income (annual) <unit bn JPY> 153.4 150 100 FY07： 50 153.4bn JPY 27.4 20.0 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 YoY +125.9bn JPY -33.3 -50 -45.2 -71.9 -100 -109.8 -150 14
Slide 15: Consolidated net income (annual)
Consolidated net income (annual) <unit bn JPY> 100 57.5 50 36.6 28.8 FY07： 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 28.8bn JPY YoY -50 (28.7)bn JPY -59.8 -100 -88.7 -99.9 -107.0 -150 15
Slide 16: Details of tax and other adjustments
Details of tax and other adjustments <unit bn JPY> 200 <Reference> Income taxes; Current Unrecognized deferred tax assets 48.7 Total 317.2 bn JPY 150 Mainly Yahoo Japan Income taxes; Income before Corporation Deferred tax&minority 100 interest 93.6 208.5 Minority interest 50 No cash outlay this peri
Slide 17: Net interest-bearing debt
Net interest-bearing debt <unit bn JPY> 2,500 Consolidated net interest-bearing debt 2,000 JPY2,008.1bn (end of March) Investment by SB and Yahoo 1,500 JAPAN Corporation in SBM: JPY320.0bn 1,000 SBM Net interest-bearing Debt (Non-recourse): 531.6 CB including WBS loan of 500 454.6 JPY1,355.0bn 356.1
Slide 18: Cash position
Cash position <unit bn JPY> 600 Cash & cash equivalents Unused portion of credit line facility 500 100.0 61.0 39.0 69.0 400 30.0 300 30.0 29.9 401.7 386.2 440.6 322.2 450.6 292.5 280.9 200 100 0 4 5 6 /06 6 6 7 ar/0 ar/0 ar/0 n p/0 c/0 ar/0 M M M Ju S e D e M 18
Slide 19: Ratings
Ratings JCR (AA-) AA3/AA Mobile business A1/A+ securitization ratings S&P (A) A2/A WBS senior portion Moodys (A3) A3/A BBB+/Baa1 JCR (BBB) BBB/Baa2 BBB /Baa3 BB+/Ba1 Moodys (Ba2) BB/Ba2 BB /Ba3 S&P (BB-) B+/B1 JAPAN TELECOM Vodafone K.K. acquisition acquisition 19
Slide 20: Market capitalization of SB shares
Market capitalization of SB shares (JPY tn) Acquisition of Vodafone K.K. announced Acquisition of JAPAN TELECOM announced Yahoo! BB service launch announced 20
Slide 21: Operational Results for the Fiscal Year ended March 31, 2007
Operational Results for the Fiscal Year ended March 31, 2007 21
Slide 22: Dramatic start
Dramatic start Double White 2007.3 start of “Double White” White Plan 2007.1 start of White Plan Announce 07 spring models MNP start Announce new price plans 911SH 2006.10 change brand to “SOFTBANK” Display prevented due to protection of rights. 905SH 2006.4 enter mobile market 22
Slide 23: Steadily expanding customer base after acquisition
Steadily expanding customer base after acquisition In 12 months from April 2006 850K net additions Cumulative subscribers 16.07m 15.22m Enter market through acquisition start from scratch 0 FY11 FY12 FY10 FY09 FY08 FY07 April April 23
Slide 24: Dramatic net increase in subscribers
Dramatic net increase in subscribers (K) 850 800 600 Yearly net subscriber addition 400 200 221 =X 4 (approx.) 25 0 04/5 - 05/4 05/5 – 06/4 06/5 - 07/4 Vodafone 24
Slide 25: Subscriber situation at the end of April 2007
Subscriber situation at the end of April 2007 April monthly net additions >160K (excluding prepaid subscribers >200K) Cumulative subscribers >16m 3G ratio >50% White Plan subscribers >4m* *Reached May 3rd 2007 25
Slide 26: Net additions
Net additions (K) 200 150 April April 2007additions: 2007additions: approx.160K 160K approx. 100 50 Complete change in trend 0 Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- 03 04 04 05 05 06 06 07 -50 Vodafone 26
Slide 27: Net additions (excluding prepaid)
Net additions (excluding prepaid) (K) 200 150 April April 2007additions: 2007additions: 100 approx.200K 200K approx. 50 Dramatic 0 improvement Oct- Apr- Oct- Apr- Oct- Apr- Oct- Apr- 03 04 04 05 05 06 06 07 -50 27
Slide 28: Cumulative subscribers
Cumulative subscribers (m) 16.1 16 15.0 15.0 15.2 End EndApril April2007 2007 14 14.2 3G 3Gsubscribers: subscribers:8.2m 8.2m 3G 3G ratio: ratio: 51.1% 51.1% 12 +31pp +31ppcompared comparedtotoend endofofMarch March2006 2006 10 2G 8 3G ratio more than 6 2.5X in 1 year 3G 4 2 0 Apr-03 Apr-04 Apr-05 A
Slide 29: 3G Churn rate (quarterly)
3G Churn rate (quarterly) Dramatic improvement 3.5% 2.5% MNP 1.5% 0.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY05 FY06 FY07 29
Slide 30: Dramatic change
Dramatic change 3G base stations Network satisfaction approx. 21,000 approx. 31,000 +26% (End of April 2007) Launched models 2.2X Launched colors 3.9X Most favored CM Access to 80% of Yahoo! Keitai top page HS bought in installments X53 30
Slide 31: 3G Network Enhancement
3G Network Enhancement —~= SoftBank 31
Slide 32: 3G Network enhancement: base stations
3G Network enhancement: base stations (BS) 46,000 End April 07: + approx. 31,000 BS 29,404 achieved Property secured Scheduled to reach Construction 46,000 BS in 1st half of FY 08 In service 0 Q1 Q2 Q3 Q4 FY07 32
Slide 33: 3G Network enhancement: satisfaction
3G Network enhancement: satisfaction June June2006 2006set setas as100: 100: improved improved byby26 %! 26%! Ongoing surge in 100 satisfaction due to increase in number of base stations June Sept Jan March 2006 2007 *Results of research consigned to a third-party institution 33
Slide 34: Handset Enrichment
—~= SoftBank Handset Enrichment 34
Slide 35: Handset enrichment types
Handset enrichment 35 types V201SH 19 types V304T 811T 708SC 705NK 705SH V604T 813T V501SH 911SH 812T 705P 502T 705T 910SH 707SC V502T 803T 708SC V302SH 804SH V604SH 903T 813SH 905SH X01HT 910T 709SC 810SH 903SH 811SH 706SC V501T 902T 703N 702NKII V403SH 911T 810T 707SCII 812SH 803T 804SS 706N 304T
Slide 36: Comparison with competitors (number of models)
Comparison with competitors (number of models)* (models) 30 SoftBank approx. 2.2X NTT DoCoMo 26 au 24 20 20 20 Selection-No.1! 18 12 10 0 Before acquisition After acquisition FY2006 (2nd half) FY2007 (2nd half) *SOFTBANK estimate 36
Slide 37: Comparison with competitors (number of colors)
Comparison with competitors (number of colors)* (Colors) 120 120 approx. 3.9X SoftBank NTT DoCoMo 100 au Overwhelming 80 68 58 selection-No.1! 60 52 43 40 31 20 0 Before acquisition After acquisition FY2006 (2nd half) FY2007 (2nd half) *SOFTBANK estimate 37
Slide 38: Steep increase in handset satisfaction level
Steep increase in handset satisfaction level Shift towards users’ tastes (%) Doubled score 100 (approx.) Spring 07 models 80 60 Spring 06 models 40 20 Design Functionality Easy-to-use Size *Survey conducted by SOFTBANK MOBILE 38
Slide 39: Mobile trendsetter
Mobile trendsetter Introduce handsets that are one step ahead of competitors’ Collaboration with Fashion PANTONE® 812SH 705SH 706SC Slim 708SC 707SC 911T One-Seg 905SH 911SH One-Seg One-Seg 5 months No.1! 3 months No.1! 2006 2007 *905SH: 2006/6-10, 911SH: 2006/12-2007/2 Number of newly sold handsets
Slide 40: Known for "Abundant Colors"
Known for “Abundant Colors” Brand with image of “abundant colors” (%) NTT DoCoMo 60 au At the top due SoftBank to superiority 50 40 30 20 Source: Results of research consigned to 10 a third-party institution Jan 2007 Feb 2007 Mar 2007 40
Slide 41: Brand Image Improvement
Brand Image Improvement —~= SoftBank 41
Slide 42: Introduce series of ads with great originality
Introduce series of ads with great originality May 7-18 2007, first company to wrap up Tokyo’s new landmark “Tokyo Midtown” in its ads Display prevented due to protection of rights. 42
Slide 43: Series of popular TV commercials
Series of popular TV commercials Display prevented due to protection of rights. 43
Slide 44: Surge in popularity
Surge in popularity Most favored company through TV commercials No 1 SOFTBANK MOBILE No 2 SUNTORY No 3 Nintendo No 4 TOKYO GAS No 5 Coca-Cola (Japan) No 6 TOYOTA No7 KDDI (whole brand including au No 8 Kao No 9 FUJIFILM No 10 HOUSE FOODS No 11 SHARP No 12 SHISEIDO No 13 MEIJI SEIKA No 14 Procter & G
Slide 45: Higher exposure of TV commercials
Higher exposure of TV commercials SOFTBANK MOBILE NTT DoCoMo KDDI/au SOFTBANK 12% MOBILE 27% KDDI/au 29% NTT DoCoMo 2004 2005 2006 Source: CM Data Bank/ CM Research Center, 2007 3rd quarter (Oct-Dec) results 45
Slide 46: Additional surge in preference for TV commercials
Additional surge in preference for TV commercials SOFTBANK MOBILE NTT DoCoMo KDDI/au 8% 21% SOFTBANK KDDI/au MOBILE NTT 50% DoCoMo 2004 2005 2006 Source: CM Data Bank/ CM Research Center, 2007 3rd quarter (Oct-Dec) results 46
Slide 47: Surge in inclination to use
Surge in inclination to use SOFTBANK MOBILE NTT DoCoMo KDDI/au 7% SOFTBANK 20% KDDI/au MOBILE NTT 47% DoCoMo 2004 2005 2006 Source: CM Data Bank/ CM Research Center, 2007 3rd quarter (Oct-Dec) results 47
Slide 48: Net additions (annual)
Net additions (annual) (m) 3.0 KDDI (au + TU-KA) 2.5 2.0 NTT DoCoMo 1.5 1.0 0.5 0.0 FY05 FY06 FY07 *Source: disclosed information from each company 48
Slide 49: Enhancement of Sales Efforts
Enhancement of Sales Efforts 49
Slide 50: Sales structure expansion
Sales structure expansion Mass Mass Corporate Corporate Retailers Retailers Display prevented due to protection of rights. large increase in acquisitions Display prevented due to protection of rights. Non-exclusive Non-exclusive Shops Shops shops shops 50
Slide 51: New acquisition share
New acquisition share Acquisition share in mass retailers exceeds total market acquisition share New contracts acquisition share (units) 1 year ago Mass retailers Current Total Display prevented due to protection of rights. 25% Display prevented due to protection of rights. 15% 1Q 2Q 3Q 4Q FY07 51
Slide 52: Introduction of Installment Sales Method for Handsets
Introduction of Installment Sales Method for Handsets 52
Slide 53: Introduction of installment sales method
Introduction of installment sales method Separate HS cost and communication charges HS Cost HS Cost (paid by user in installments) (subsidize) Communication Communication Charge Charge (high price) (moderate price) HS Subsidy Model Installment Model 53
Slide 54: Acquisition of installment subscriber = long-tenure stable user
Acquisition of installment subscriber = long-tenure stable user More than 80% of all recent new acquisitions and upgrades select the installment method 100% Ratio of installment contracts Decrease in churn 80% 60% 40% Improvement of 20% future profitability 0% 6/07 6/08 6/09 6/10 6/11 6/12 7/01 7/02
Slide 55: Introduction of installment sales method
Introduction of installment sales method MIC* “Mobile communication study group” Agenda Subsidies Introduce installment sales Reexamine subsidies SIM Lock MVNO Early adopter of future business model *Ministry of Internal Affairs & Communications 55
Slide 56: Introduction of New Price Plans
Introduction of New Price Plans 56
Slide 57: White Plan
White Plan Voice Call 21yen (30 sec.) Free SBM on-net domestic calls from 1 to 21:00 Basic Charge (Month) 980 yen 57
Slide 58: Double White
Double White Voice Call 10.5yen Off-net calls at half price (30 sec.) Free SBM on-net Basic Charge 980 yen domestic calls from (Month) 980 yen 1 to 21:00 58
Slide 59: Huge success of White Plan
Huge success of White Plan (m) Cumulative subscribers (application based) 5 4 Double DoubleWhite White little over 4 months since start 3 4m subscriptions (including applications before activation) 2 White WhitePlan Plan 1 0 07/01 07/02 07/03 07/04 07/5 59
Slide 60: Evaluation of pricing image
Evaluation of pricing image (%) 60 SoftBank NTT DoCoMo au 50 Trade places with competitors on 40 pricing image after 30 start of White Plan 20 10 0 Source: Results of research consigned to a third-party institution 2006/08 2007/04 60
Slide 61: Achieve "getting ahead of the times" image
Achieve “getting ahead of the times” image (%) 60 March 2007 40 September 2006 20 Ahead of the Unique Flexible Interesting Energetic times Source: Results of research consigned to a third-party institution 61
Slide 62: Business Roadmap
—~= SoftBank Business Roadmap 62
Slide 63: Phases from FY08 on
Phases from FY08 on After a year of restructuring, beginning to enter the growth stage Harvest Stage •stable growth and Growth Stage business expansion •revenue & profit growth •customer base expansion •new services introduction Initial Stage •acquisition •business restructuring •concentrated invest
Slide 64: Roadmap
Roadmap expand services expand revenue & profit opportunities Expand content / service Enhance network Develop / introduce handsets Enhance sales / branding FY2007 64
Slide 65: Pursuit of further group synergies
Pursuit of further group synergies Improve network efficiency Enhance sales structure Retailer Shop Display prevented due to protection of rights. Leverage customer base Expand content 65
Slide 66: Before network integration
Before network integration Access network Mobile base Fixed-line network stations ADSL, FTTH network 66
Slide 67: After network integration
After network integration Broadcast service Medical service Content ASP Home appliances Service Platform SDP IMS Billing SIP Admin MPLS GMPLS Core network MPLS Multi service network MPLS VPLS Area network PBT Access network Mobile base ADSL, FTTH Fixed-line network stations network 67
Slide 68: Announce New Models
May 22, 2007 Announce New Models 68
Slide 69: ARPU Strategy
ARPU Strategy —~= SoftBank 69
Slide 70: SOFTBANK's concept of ARPU
SOFTBANK’s concept of ARPU Customer satisfaction leading to ARPU increase ARPU growth Customer satisfaction Service C •abundant options Service B •appealing services Service A Data Usage Display prevented due to protection of rights. •cut-rate Basic Fee 70
Slide 71: Yahoo! BB ADSL results
Yahoo! BB ADSL results ARPU increase ISP 4,359 yen Additional service fee Provide value-added services BB Security BB Phone 2,707 yen Wireless LAN Basic fee & Modem Rental modem rental fee Fee Offer high-speed services Basic Fee 2002/Q4 2007/Q4 71
Slide 72: Yahoo! Auctions results
Yahoo! Auctions results (m items) Auction items* 12 Traffic is a solid basis for revenue 8 FY07 Yahoo Japan Corp. Commerce transaction volumes amounted to approx. JPY 900bn including 4 Yahoo! Auctions 0 *daily average amount of auction items per month 2002/06 2003/06 2004/06 2005/06 2006/06 72
Slide 73: Continuous surge in page views
Continuous surge in page views Page view Compared to the end of June growth is approx. 53 times Link to Yahoo! JAPAN set in top page *Page views of Yahoo! JAPAN’s top page through mobile devices Till Sep 30th Yahoo! Mobile from Jan 10th Yahoo! Keitai 6/1 7/1 10/1 4/30 2006 2007 73
Slide 74: Image of superior internet services
Image of superior internet services (%) 25 SoftBank NTT DoCoMo au 20 Exceed competitors with 15 image of superior internet services 10 5 Source: Results of research 0 consigned to a third-party institution 2006/10 2007/03 74
Slide 75: Intention to continue using
Intention to continue using (%) 77 Intention to continue using increased by 75 5 points 72 Source: Results of research 70 consigned to a third-party institution 2006/2 2007/4 75
Slide 76: Achieve ARPU increase through the Group's collective strength
Achieve ARPU increase through the Group’s collective strength Service C Service B Service A Data Usage Basic Fee 76
Slide 77: SOFTBANK's arena
SOFTBANK’s arena Content Portal Infrastructure Other Other 77
Slide 78: "Fun" Internet: video
“Fun” Internet : video Unique user trend Yahoo! JAPAN video services (m) U Company service G 8 No.1 in number of unique users amongst 6 national video services 4 8.924m end of March 2007 2 Source Research by NetRatings Japan Inc., access from homes * Yahoo! Streaming, Yahoo! Movie, Yahoo! News etc.
Slide 79: Multi concurrent video distribution system: "BB Broadcast"
Multi concurrent video distribution system: “BB Broadcast” Games of four pacific league teams distributed live free of charge on Yahoo! Streaming Best service line-up for live professional baseball Fukuoka SoftBank HAWKS Chiba Lotte Marines Display prevented due to protection of rights. Display prev
Slide 80: Multi concurrent video distribution system is highly valued
Multi concurrent video distribution system is highly valued Cost efficient distribution technology adopted for national & international content distribution Display prevented due to protection of rights. Display prevented due to protection of rights. Display prevented due to protection of rights. Di
Slide 81: IPO results for significant investments
IPO results for significant investments April 19, 2007 listed on TSE Mothers Several other companies preparing to be listed in Japan and overseas GungHo Online Entertainment BroadBand Tower YUME NO MACHI SOUZOU IINKAI Advance Media E*TRADE GignoSystem All About Nexyz. Japan Finance All e-Seikatsu M.
Slide 82: Shift in revenue & profit sources
Shift in revenue & profit sources Currently derived from infrastructure business Content Portal Infrastructure 82
Slide 83: Shift in revenue & profit sources
Shift in revenue & profit sources Increase revenue & profit through a variety of content options Content Portal Infrastructure 83
Slide 84: Collective strength drives our business
Collective strength drives our business No.1 No.1 Internet Internetgroup group Infrastructure Infrastructure Portal Content 84
Slide 85: Make mobile in Japan more fun
Make mobile in Japan more fun 85
Slide 86: Make broadband in Japan more fun
Make broadband in Japan more fun 86
Slide 87: Lifestyle Company in the 21st Century
Lifestyle Company in the 21st Century Broadband available to all living people everywhere 87
Slide 88: SOFTBANK's Fundamental Management Policy
SOFTBANK’s Fundamental Management Policy Endeavoring to benefit society and the economy and maximize enterprise value by fostering the sharing of wisdom and knowledge gained through the IT revolution. 88
Slide 89: http://www.softbank.co.jp
http://www.softbank.co.jp This presentation contains forward-looking statements including statements regarding future events, future strategies or future performance of SOFTBANK CORP. that involves risks or uncertainties. In evaluating these statements, a recipient thereof should specifically consid
Slide 90: FY2007 Appendix to the Earnings Results
FY2007 Appendix to the Earnings Results (Amounts less than one billion yen are omitted. / Net Sales to external customers Business segment unit FY2005 FY2006 FY2007 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net sales bn JPY 231.5 350.3 426.6 422.2 Operating income bn JPY 27.2 29.3 56.9 42.2 Mobile communi