Softbank Group Corp. · TSE:9984
Softbank — H1 FY2019 Earnings Presentation
27 slides from Softbank's earnings presentation, Nov 8, 2019
Slide 1: Earnings Results for the Six-month Period Ended September 30, 2019
V1.1 Earnings Results for the Six-month Period Ended September 30, 2019 Investor Briefing November 8, 2019 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries and associates (together with SBG, “we,” “us” or the “Group”) and does not constitute or form any solicitation of investment including any offer to buy or subscribe for any securities
Slide 3: Exchange rates used for translation
Exchange rates used for translation FY2018 FY2019 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 108.71 111.55 112.83 110.46 110.00 107.70 1 GBP 147.54 145.84 144.48 143.99 140.88 132.73 1 CNY 16.97 16.40 16.31 16.37 16.13 15.37 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD
Slide 4: Accounting
Accounting 4
Slide 5: Consolidated Results
Consolidated Results FY18 FY19 (JPY bn) Q1-Q2 Q1-Q2 Change YoY Net sales 4,653.9 4,651.7 -2.2 -0.0% Operating income 1,420.7 -15.6 -1,436.3 - Net income (attributable to owners 840.1 421.6 -418.5 -49.8% of the parent) 25
Slide 6: Change in Reportable Segments
Change in Reportable Segments ・ Revised segment classifications after SoftBank Corp. made Yahoo Japan*1 a subsidiary. ・ The results of operations for FY18 are restated retroactively according to the new reportable segments. FY18 SoftBank Vision SoftBank Yahoo Japan Sprint Arm Brightstar Fund and Del
Slide 7: Loss of Investments in WeWork and Its Affiliates
Loss of Investments in WeWork and Its Affiliates ・Fair value of The We Company (“WeWork”)’s entire equity at end Q2: USD 7.8 bn*1 ・The USD 7.8 bn includes revised business plan after postponing public offering and agreement*2 under which SBG commits to provide Cumulative investment, fair value, loss
Slide 8: Accounting of Funding Commitment to WeWork
Accounting of Funding Commitment to WeWork WeWork to become an associate of SBG SBG and WeWork reached an agreement on October 22, 2019 (ET): SBG committed to provide significant funding to WeWork WeWork will be an associate of SBG SBG will not hold a majority of voting rights at any general sha
Slide 9: Sprint/T-Mobile Merger Status and Impact on Financial Results
Sprint/T-Mobile Merger Status and Impact on Financial Results Sprint/T-Mobile Merger Transaction Status Received approvals from DOJ/FCC and 18 of the state PUC →Outstanding: California PUC approval and the resolution of litigation filed by attorneys general of certain states and District of Columb
Slide 10: Consolidated P/L Summary (IFRSs)
Consolidated P/L Summary (IFRSs) (JPY bn) FY18 FY19 ・FY18Q1-Q2: Recognized gain relating to loss of control over P/L item Change Q1-Q2 Q1-Q2 subsidiaries of 176.3 bn as a result of Arm’s Chinese subsidiary Net sales 4,653.9 4,651.7 -2.2 becoming a JV. Operating income Operating income from SoftBank
Slide 11: Consolidated B/S Summary (IFRSs) - Assets
Consolidated B/S Summary (IFRSs) - 1 (JPY bn) B/S As of As of Main items Change item Mar 2019 Sep 2019 Decrease of 422.6 bn due to withholding tax refund on 7,758.0 7,447.8 -310.2 dividends paid in FY18 from SBGJ to SBG Current assets Cash and cash equivalents 3,858.5 4,259.2 +400.7 The variable pre
Slide 12: Consolidated B/S Summary (IFRSs) - Liabilities
Consolidated B/S Summary (IFRSs) - 2 B/S As of As of (JPY bn) Main items Change item Mar 2019 Sep 2019 8,681.7 7,456.4 -1,225.3 1 Impact of the adoption of IFRS 16 at the beginning of Interest-bearing debt 3,481.0 3,281.9 -199.1 FY19 1 892.5 bn of lease obligations previously included in 1 2 Current
Slide 13: Consolidated B/S Summary (IFRSs) - Equity
Consolidated B/S Summary (IFRSs) - 3 (JPY bn) B/S As of As of Items Change item Mar 2019 Sep 2019 9,009.2 8,623.6 -385.6 Common stock 238.8 238.8 - Due to a decrease in SBG’s economic interests in Yahoo Japan*1 Capital surplus 1,467.8 1,529.1 +61.3 1 Net income attributable to owners of the parent O
Slide 14: Consolidated C/F Summary (IFRSs)
Consolidated C/F Summary (IFRSs) FY19 (JPY bn) C/F item Q1-Q2 1,242.8 Subtotal of cash flows from operating activities C/F from -296.9 Interest paid operating 373.7 activities -1,040.1 Income taxes paid 440.6 Income taxes refunded Purchase of property, plant and equipment, and -636.0 intangible asse
Slide 15: Income and Loss Arising from SoftBank Vision Fund and Delta Fund Included in P/L
Income and Loss Arising from SoftBank Vision Fund and Delta Fund Included in P/L (JPY bn) FY18 FY19 P/L Items Q1-Q2 Q1-Q2 Gain and loss on investments at 649.4 -529.3 SoftBank Vision Fund and Delta Fund Realized gain and loss on sales of FY18Q2: Sale of investment in Flipkart shares 146.7 34.8 inves
Slide 16: Difference in Tax Rate
Difference in Tax Rate FY19Q1-Q2 Reconciliation between statutory tax rate and effective Tax Rate Amount Rate (%) (JPY bn) Income before income tax 1,116.9 Statutory income tax rate 31.5％ 351.4 (main factors of difference) - Impact from reassessment of the recoverability of 17.4% 193.8 deferred tax
Slide 17: Bridge of Disclosures between SBG Financial Report and SVF & Delta Fund Update
Bridge of Disclosures between SBG Financial Report and “SoftBank Vision Fund & Delta Fund Update” section (USD bn) Committed capital, Total (p. 11） Committed capital, The Company (p. 11) SBG SVF Delta SVF Delta Financial Report 103.0 (= 98.6 + 4.4) 37.5 (= 33.1 + 4.4) Earmarked for use in an incenti
Slide 18: Bridge from Income before Income Tax of SVF and Delta Fund to SVF's Contribution to SBG
Bridge from Income before Income Tax of SVF and Delta Fund Business to SVF’s Contribution to SBG FY18 FY19 Q1-Q2 Q1-Q2 SBG JPY bn 339.5 -399.5 Financial Income before income tax of SVF and Delta Report Fund Business （Contribution to SBG) USD bn 3.08 -3.75 (p.12) Income taxes on investment gains of S
Slide 19: Appendix
Appendix
Slide 20: SoftBank Corp. Made Yahoo Japan a Subsidiary
SoftBank Corp. Made Yahoo Japan a Subsidiary ・ On June 27, 2019, Yahoo Japan*1 issued 1,511 million new shares to SoftBank Corp. through a third-party allotment. ・ SBGJ, a wholly owned subsidiary of SBG, accepted a tender offer of share buyback by Yahoo Japan and sold its holdings of 1,793 million Y
Slide 21: Breakdown of Goodwill / Intangible Assets
Breakdown of Goodwill / Intangible Assets (JPY bn) B/S As of As of Change Main items Changes in Outline item Mar 2019 Sep 2019 Amortization Others exchange rate 4,321.5 4,083.3 Goodwill Arm 2,777.5 2,542.0 - -235.5 - SoftBank 907.5 907.5 - - - Sprint 326.8 317.8 - -9.0 - FCC licenses 4,155.1 4,041.2
Slide 22: (Reference) Adoption of new standards: IFRS 16 - Leases
(Reference) Adoption of new standards: IFRS 16 - Leases Initial measurement for Right-of-use Assets and Lease Liabilities Lease Liabilities: Measured at the present value of total lease payments over the lease term Right-of-use Assets: Amount of the initial measurement of a lease liability plus any
Slide 23: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Primary change in accounting treatment: Classification of finance and operating leases has been eliminated and “right-of-use assets*1” and “lease liabilities” are recognized on a balance sheet for all leases. -Leases previously classified as operating leas
Slide 24: Adoption of new standards: IFRS 16 - Leases
Adoption of new standards: IFRS 16 - Leases Breakdown of right-of-use assets Opening B/S（April 1, 2019） (JPY bn) SoftBank Class of underlying assets Sprint Others Total Corp. Telecommunications equipment (wireless equipment, switching equipment and 1,079.0 21.9 117.5 1,216.6 other network equipment)
Slide 25: SoftBank Vision Fund - Gain/Loss on Investments Transferred from the Company in P/L
SoftBank Vision Fund - Gain/Loss on Investments Transferred from the Company in P/L Investments transferred from the Company other than “Bridge investments” shown below. Examples include investments that were made without the premise of offering to the SVF at the time of acquisition, or, investments
Slide 26: Differences in Figures of Financial Results of the Company's SoftBank Segment and SoftBank
Differences in Figures of Financial Results of the Company’s SoftBank Segment and SoftBank (1) Depreciation and amortization for non-current assets at SoftBank (formerly Vodafone K.K.) SBG’s consolidated financial statements SoftBank’s consolidated financial statements When Vodafone K.K.’s controlli
Slide 27: Settlement of Prepaid Forward Contract using Alibaba Shares
Settlement of Prepaid Forward Contract using Alibaba Shares At signing of contract 3 years total At settlement （June 2016） （June 2019） Derivative liabilities USD 6.8 bn Gain relating to settlement of variable prepaid forward contract Amortized Interest expense using Alibaba cost USD 0.3 bn shares De