Softbank Group Corp. · TSE:9984
Softbank — Q3 FY2024 Earnings Presentation
47 slides from Softbank's earnings presentation, Feb 12, 2025
Slide 1: Earnings Results for the Nine-month Period Ended December 31, 2024
Earnings Results for the Nine-month Period Ended December 31, 2024 Investor Briefing February 12, 2025 SoftBank Group Corp.
Slide 2: Disclaimers
Disclaimers This presentation provides relevant information about SoftBank Group Corp. (“SBG”) and its subsidiaries (together with SBG, the “Company”) and its affiliates (together with the Company, the “Group”) and does not constitute or form any solicitation of investment including any offer to buy
Slide 3: Exchange rates and abbreviations
Exchange rates per JPY used for translation FY2023 FY2024 Average during quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 USD 138.11 145.44 147.00 147.87 156.53 150.26 151.32 EOQ Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 1 USD 151.41 158.18 Abbreviations Abbreviations used in Finance section of this
Slide 4: Finance
Finance SBG stand-alone financial figures are calculated by excluding those of self- financing entities from the consolidated figures, unless otherwise stated. Major self financing entities include SBKK (including its subsidiaries such as LY Corporation and PayPay), Arm, SVF1, SVF2, LatAm Funds, etc
Slide 5: ASI: Powering realization with Group-wide efforts
AI AI Chip Data center ASI Artificial Super Intelligence AI Robot Energy Powering realization with Group-wide efforts Finance 2 2
Slide 6: Stargate
Stargate Finance 3 3
Slide 7: Cristal intelligence
"Cristal intelligence" is a provisional name and not the official product name. The information contained in this document is based on the current plans and is subject to change, including specifications and other conditions, before the official release. Finance 4
Slide 8: Historical Share Prices (Since 2024)
Historical Share Prices (Since 2024) Outperforming U.S. and Japanese stock indices as interest towards AI related shares heightens 260 240 220 210 Arm 200 180 160 151 SBG 145 Magnificent 7* 140 127 S&P500 120 116 NIKKEI 100 80 Jan 2024 Apr 2024 Jul 2024 Oct 2024 Jan 2025 (Note) Created by SBG based
Slide 9: Interest Rates and FX Rate (Since 2024)
Interest Rates and FX Rate (Since 2024) FX volatility is amplified by uncertainty surrounding U.S. interest rates and policies. Yen interest rates continue to rise due to expectations of additional rate hikes by BoJ Japan-U.S. Interest Rates FX Rate (USD/JPY) (%) (JPY) 6.0 165 米国債… U.S. Treasury (10
Slide 10: FY2024Q3 Financial Summary
FY2024Q3 Financial Summary LTV remains at a low level. Increased cash position through expanded margin loan capacity and retail bond issuance NAV ¥29.3T (+¥0.3T QoQ) LTV 12.9％ (+0.4ppt QoQ) NAV・LTV Net debt ¥4.3T (+¥0.2T QoQ) *1 Cash position ¥5.0T (+¥1.2T QoQ) Expanded margin loan capacity and hybr
Slide 11: Historical NAV
Historical NAV Maintaining a high level. Currently at a record high (¥ T) level due to the rise in Arm’s share price 35.3 33.5 29.3 29.0 FY2000 FY2005 FY2010 FY2015 FY2020 Q1 Q2 Q3 (Q3*) FY2024 Applying share prices (Note) As of the end of each fiscal year and FX rate • NAV (Net Asset Value) = Adj.
Slide 12: Historical LTV
Historical LTV Maintaining with a significant buffer 25% 18.2% 15.0% 14.5% * 12.5% 12.9% 13.3% Average LTV over the past 3 years 11.0% 10.6% 11.5% 8.0% 8.4% 7.8% Jun 2022 Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023 Dec 2023 Mar 2024 Jun 2024 Sep 2024 Dec 2024 * As of the end of each quarter * For d
Slide 13: Historical Equity Value of Holdings
Historical Equity Value of Holdings While Arm’s value decreased from Sep end, equity value of holdings remains unchanged mainly due to JPY depreciation; however, has expanded since the beginning of 2025 due to the rise in Arm’s share price Net of asset-backed 38.3 37.8 finace 33.1 33.7 (¥ T) 30.3 21
Slide 14: Historical Invested Amounts (SVF + SBG)
Historical Invested Amounts (SVF + SBG) Invested $0.6B in Q3 FY2023 FY2024Q1～Q3 $3.9B $4.5B ($ B) 2.0 1.9 1.8 1.5 SBG*1 0.9 1.4 1.2 1.1 Follow-on investment 1.5 0.6 in OpenAI 0.05 SVF*2 0.9 0.3 0.3 0.6 0.6 0.5 0.4 0.2 0.3 0.1 0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Jan 2025 invested FY2023 FY2024 *1 Invested amoun
Slide 15: Margin Loan Utilizing Arm Shares
Margin Loan Utilizing Arm Shares Increased non-recourse financing by $5B $13.5B （¥2.1T*1） Achieved capacity increase Incremental amount is and maturity extension fully $8.5B undrawn*2 One of the largest ever Increased capacity single-stock margin loans +$5.0B Support from financial institutions has
Slide 16: Cash Position and Future Bond Redemptions
Cash Position and Future Bond Redemptions Maintain ample cash position, well over 2-year worth of bond redemptions Cash position Bond redemption schedule*2 (¥ B) ¥5.0 T *1 Undrawn commitment line 900.1 ＞ Undrawn Arm margin loan borrowing capacity 790.9 Bond redemptions for the next 2 years (¥2.1T) *
Slide 17: Currency Breakdown of Cash Position
Currency Breakdown of Cash Position Manage cash position by capturing higher interest rates Cash position ¥3.3T*1 (+ undrawn borrowing capacity: ¥1.7T*2) Subsidiaries*3 USD ¥0.6T ¥1.8T USD average yield 4.8% *4 EUR, etc. ¥0.1T 3％ Deposit Bonds 56% 4.3% 5.3% JPY 22% (Reference*5) FF Target Rate (uppe
Slide 18: Issuance of Domestic retail senior bonds
Issuance of Domestic retail senior bonds Robust demand from retail investors confirmed 64 th Domestic retail senior bonds NIKKEI VERITAS (Fukuoka SoftBank HAWKS Bond) Deal of the Year 2024 Amount ¥350.0B 63rd Domestic retail senior Issue bonds ¥550.0B Issued in June Dec 11th, 2024 Date Awarded Best
Slide 19: FY2024 Funding and Fund Management Policy
FY2024 Funding and Fund Management Policy Financing from FY2025 and beyond to be considered while closely monitoring market conditions Products Policy Progress status Domestic bond Primarily anticipated for refinancing Completed refinancing. Implemented cash position buildup Foreign currency through
Slide 20: Bond Redemption Schedule
Bond Redemption Schedule Completed refinancing for bond redemptions in FY2024. Future bond issuances to be managed with due consideration for cash position and market environment Domestic senior bonds (¥ B) 1,638.6 Domestic subordinated bonds Domestic hybrid bonds Foreign currency-denominated senior
Slide 21: SBG Stand-alone Interest-bearing Debt
SBG Stand-alone Interest-bearing Debt*1 Interest-bearing debt decreased due to settlements of prepaid forward contracts using Alibaba shares, etc. SBG stand-alone interest-bearing debt increased due to domestic bond issuance and forex impact Main changes from Sep 30, 2024 • Decrease of financial lia
Slide 22: SBG Stand-alone Cash Position
SBG Stand-alone Cash Position Cash position increased due to forex impact and retail bond issuance (¥ B) SB Northstar 3,956.1 3,771.1 3,831.2 3,307.0 2,986.2 Main changes from Sep 2024 Increase Decrease 3,742.4 3,934.0 3,813.7 ・Investments/contribution to SVF, etc. *2 ・Bond issuance (+¥350.0B) 3,289
Slide 23: SBG Stand-alone Net Interest-bearing Debt
SBG Stand-alone Net Interest-bearing Debt Adjusted net debt increased due to the increase in interest-bearing debt (¥ B) 10,363.5 10,515.1 10,275.3 10,023.3 9,662.0 Finance-related adjustments 6,144.4 5,332.1 Asset-backed finance, etc. ¥4,940.5B 7,534.1 7,536.8 7,810.2 Hybrid finance ¥391.6B Adjuste
Slide 24: Historical Credit Ratings
Historical Credit Ratings Acquisition of Acquisition Acquisition Acquisition Listing Listing JCR A A+ 14Japan Telecom of Vodafone KK of Sprint of Arm of SBKK of Arm A 13 A- 12 (Stable) BBB+ 11 BBB10 BBB-9 S&P BB+ 8 BB 7 BB+ (Stable) BB- 6 B+ 5 4 (CY) '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '
Slide 25: Share Repurchase
Share Repurchase Maximum ¥500B (Until Aug 7, 2025) ¥209.9B Repurchased 42% Progress (Aug 2024 to Jan 2025) (Note) Maximum ¥500B: Share repurchase program authorized by the Board of Directors on Aug 7, 2024. For details, refer to the press release dated Aug 7, 2024, "Resolution regarding Share Repurc
Slide 26: Stargate Project: Building AI infrastructure for OpenAI
Stargate Project Building AI infrastructure for OpenAI Stargate Lead partners Chairman Masayoshi Son Finance Operation Joint investors Key technology partners (Note) Joint investors and key technology partners: as of the timing of project announcement (Jan 21, 2025). For details, see the press relea
Slide 27: Stargate Project: Illustration
Stargate Project: Illustration Equity funding Stargate Lenders/ Equity funding Debt investors Project finance (e.g.) Project 1 Project 2 Project 3 Project 4 ・・・・・ • Banks • Insurances • Pension Build and own funds Data centers Data centers Data centers Data centers • Investment ・・・・・ funds etc. (Not
Slide 28: Track Record of the Group's Project Finance
Track Record of the Group’s Project Finance Broadly expanded with a focus on Japan, U.S., and India U.S. Japan India Originator SB Energy SB Energy Japan*1 SB Energy India*1 Total project size $4,438M ¥218.6B $2,119M*2 Number of 10 16 8 projects SBG equity 8-18%*3 5-10%*4 16-21% contribution rate Ty
Slide 29: Case Study of Project Finance
Case Study of Project Finance Equity contribution ratio is generally low, ranging from 5-20% Total project size Originator SB Energy $1,029M Timing 2024 Location U.S. Texas Capacity Solar 904MWDC Project $901M finance, etc. * Equity $128M (12%) * Incl. Tax equity investments (Tax credit investment:
Slide 30: Journey of the Groups' Funding Activities (1995~)
Journey of the Groups’ Funding Activities (1995~) Implement diverse financing strategies by fully leveraging asset portfolio. Funding channels expanded from domestic banks to a global scale Business 2013~ Project finance Securitization Around 1998~ 2006 securitization utilizing Lease (consolidated)
Slide 31: Adherence to Financial Policy
Adherence to Financial Policy 1 Maintain LTV below 25% in normal times (upper threshold of 35% even in times of emergency) Maintain at least 2-year worth of bond 2 redemptions in cash １ Secure recurring distributions and 3 dividend income from SVF and other subsidiaries Finance 28
Slide 32: FY24 Financial Strategy
FY24 Financial Strategy Financial management Financial synchronized with investment strategy Philosophy ・Adhering to financial policy Financial ・Flexibly respond to all environmental changes ・Building trust with each stakeholder Principles （Pursuing the optimal balance between shareholder returns an
Slide 33: Appendix
Appendix
Slide 34: SBG Credit Spread
SBG Credit Spread Spread of foreign currency- denominated senior notes 5-year CDS bps USD 1.4Y USD 3.4Y USD 4.4Y 350 bps 700 USD 6.4Y USD 6.4Y EUR 1.9Y SBG 5Y CDS (JPY) EUR 4.4Y EUR 3.9Y EUR 7.4Y EUR 7.4Y 300 600 500 250 400 200 300 150 200 100 100 50 0 0 Jun 2023 Sep 2023 Dec 2023Mar 2024 Jun 2024
Slide 35: Calculation of Equity Value of Holdings
Dec 31, 2024: Calculation of Equity Value of Holdings $1 = ¥158.18 ¥38.7T （unadjusted） Equity value of holdings Adjustment for (¥ T) Equity value of holdings ー ＝ asset-backed finance Prepaid forward (adjusted) （unadjusted） contracts, etc. 3.2 Payable 923M Share price ¥15.4T ＝ amount for Margin loan
Slide 36: LTV Calculation: SBG Stand-alone Equity Value of Holdings
LTV Calculation: SBG Stand-alone Equity Value of Holdings (L) Adjusted ¥4.33T SBG stand-alone net debt =12.9% (V) Adjusted SBG stand-alone equity value of holdings*1 ¥33.66T (¥ T) Adjusted SBG Major SBG’s interest in Other investments = + + stand-alone equity value of holdings assets SVF1&2 & LatAm
Slide 37: Details of SBG Stand-alone Equity Value of Holdings (1/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (1/2) (¥ T) Assets Value Calculation method (a) Arm 15.42 Multiplying the number of Arm ADSs equivalent to SBG's holdings by the ADS price (¥18.01T) - Before adjustment 16.75 payable amount of the consideration for Arm shares acqui
Slide 38: Details of SBG Stand-alone Equity Value of Holdings (2/2)
LTV Calculation: Details of SBG Stand-alone Equity Value of Holdings (2/2) (¥ T) Assets Value Calculation method (g) T-Mobile 2.98 Number of T-Mobile shares held by SBG × share price (h) Deutsche Telekom 0.38 Before adjustment 1.07 Number of DT shares held by SBG × share price Adjustment for asset-b
Slide 39: LTV Calculation: SBG Stand-alone Net Debt
LTV Calculation: SBG Stand-alone Net Debt (L) Adjusted SBG stand-alone net debt*1 ¥4.33T (V) Adjusted SBG stand-alone ¥33.66T =12.9% equity value of holdings (¥ T) Adjusted SBG Consolidated Net debt at self- Other stand-alone net financing entities, debt = net debt - etc. - adjustments 4.33 14.63 4.
Slide 40: Details of SBG Stand-alone Net Debt
LTV Calculation: Details of SBG Stand-alone Net Debt (¥ T) SBG stand-alone net debt Consolidated net interest-bearing debt - net interest-bearing debt (before adjustment) 9.66 at self-financing entities*1 For hybrid bonds and hybrid loans with maturity dates, deduct 50% from interest-bearing debt; A
Slide 41: Adjustment for Asset-backed Finance in LTV and NAV Calculation
Adjustment for Asset-backed Finance in LTV and NAV Calculation Non-recourse asset-backed finance is deducted from debt. Value of assets required for settlement is deducted from assets (¥ T) Forward/Collar 1 2 Margin loan transactions 38.7 Main shares Alibaba, Deutsche Telekom SBKK, Arm Asset-backed
Slide 42: Financial Liabilities from Prepaid Forward Contracts
Alibaba Monetization Related Financial Liabilities from Prepaid Forward Contracts All transactions to be settled by June 2025 Balance of financial liabilities related to prepaid forward contracts using Alibaba shares (quarterly basis) ($B) Projection* 33 33 32 31 29 25 17 Completion of settlements (
Slide 43: Breakdown of Equity Value of Holdings
Breakdown of Equity Value of Holdings Net of asset- 12% backed finance 24% 32% 16% 46% 11% 14% 9% 13% 3% 8% 9% 10% SBKK 21% 16% 15% 10% T-Mobile / Deutsche Telekom 12% 22% SVF1(61 investments) 20% 19% 13% SVF2 (284 investments) 4% 5% 4% 3% LatAm Funds (91 investments) 7% 8% 8% 6% Others Dec 2021 Dec
Slide 44: Geographical Portfolio Diversification
Geographical Portfolio Diversification Net of asset-backed finance 9% 7% China 20% 32% 11% Japan 15% 7% APAC 16% 9% (excl. China and Japan） 10% 10% 10% 40% 53% EMEA 26% 21% 22% 22% 21% 18% North America 5% 6% 5% 3% Others Dec 2021 Dec 2022 Dec 2023 Dec 2024 (Note) Classification of regions based on
Slide 45: Breakdown by Currency
Breakdown by Currency Investment and monetization flows are primarily in USD, while debt refinancing is principally in the same currency Investments and monetization Debt composition Cash position: ¥3.3T*1*2 Equity value of holdings: ¥33.7T*3 Interest-bearing debt*4: ¥7.9T Subsidiaries*2 JPY EUR, et
Slide 46: FY2024Q3: Increase/Decrease in Cash Position
FY2024Q3: Increase/Decrease in Cash Position Cash position increased mainly due to an increase in margin loan using Arm shares and bond refinancing & issuance （¥ T） Increase in Arm margin loan capacity Forex impact, etc. (incremental amount undrawn) +0.1 Net amount of bond issuance and +0.8 -0.1 -0.
Slide 47: Consolidated Interest-bearing Debt/Cash Position/Net Interest-bearing Debt
Consolidated Interest-bearing Debt/Cash Position/ Net Interest-bearing Debt Consolidated Interest-bearing Debt*1 (¥ B) Dec 2023 Mar 2024 Jun 2024 Sep 2024 Dec 2024 SBG stand-alone 13,765.7 14,297.5 14,328.8 13,249.7 12,951.9 Incl. SB Northstar - - - - - SVF1&2 and LatAm Funds 513.2 547.9 583.1 508.3