Softbank Group Corp. · TSE:9984
Softbank — Q1 FY2023 Earnings Presentation
71 slides from Softbank's earnings presentation, Aug 8, 2023
Slide 1: Earnings Results for the 3-month Period ended June 30, 2023
Earnings Results for the 3-month Period ended June 30, 2023 August 8, 2023
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: Signs of change
Signs of change 3 3
Slide 4: Stock Market Trends
Stock Market Trends 130 120 120.3 Thomson Reuters Venture Capital Index 116.9 NASDAQ-100 Technology Sector 110 114.5 NASDAQ 110.0 S&P 500 102.8 Golden Dragon China 100 90 80 Mar 31 Jun 30 2023 2023 Latest (Aug 7, 2023) Stock market trends are illustrated with the value of each index on March 31, 202
Slide 5: Stock Market Trends: Magnificent 7
Stock Market Trends: “Magnificent 7” 130 123.1 Magnificent 7 120 Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla 110 110.0 S&P 500 105.7 S&P 500 (excluding Magnificent 7) 100 90 80 Mar 31 Jun 30 2023 2023 Latest (Aug 7, 2023) Created by SBG based on Bloomberg Stock market trends are illu
Slide 6: Stock Market Trends: Public Investments of SVF1+2
Stock Market Trends: Public Investments of SVF1+2 130 120 114.5 NASDAQ 110 108.4 SVF1+2 Public investments 100 90 80 Mar 31 Jun 30 2023 2023 Latest (Aug 7, 2023) Stock market trend is illustrated with the value of each index and funds on Mar 31, 2023 as 100. Created by SBG based on Bloomberg SVF1+2
Slide 7: SVF: Gain/Loss on Investments (quarterly)
SVF: Gain/Loss on Investments (quarterly) USD basis (SVF1 + SVF2 + LatAm Funds) 34,467 ($ M) Returned to profit for the first time 13,567 in 6 quarters 10,910 FY23Q1 975 4,607 5,554 2,869 3,549 2,285 3,768 2,969 FY21 958 941 Incl. investment gains Q1 785 630 715 FY19 Q1 FY21 FY22 -1,748 on SBG subsi
Slide 8: SVF: Gain/Loss on Investments (cumulative)
SVF: Gain/Loss on Investments (cumulative) USD basis (SVF1 + SVF2 + LatAm Funds) 66,374 ($ M) 60,821 56,808 First turnaround 55,867 in 6 quarters 31,245 26,353 The information contained herein is provided solely for 20,166 illustrative purposes on an SBG basis and individual investors' results may v
Slide 9: Invested Amounts (SVF1 + SVF2 + LatAm Funds + SBG/Others)
Invested Amounts (SVF1 + SVF2 + LatAm Funds + SBG/Others) ($ B) 15.9 SBG/ 1.2 Others 13.4 Resuming SVF1+ SVF2+ LatAm 14.7 8.7 investments Funds 13.1 5.9 8.6 5.6 2.5 1.8 0.9 2.3 0.5 0.5 0.5 0.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 SBG/Others: SBG and its core wholly owned subsidiaries SVF invested amounts: the
Slide 10: From Presentation Material on Business Strategy in AGM
From Presentation Material on Business Strategy in AGM 10
Slide 11: Consolidated Results
Consolidated Results Some figures in this presentation are rounded and may not add up to the figures presented as the total. 11
Slide 12: Consolidated Results
Consolidated Results (¥ B) FY2022 FY2023 Q1 Q1 Change Net sales 1,572.0 1,557.5 -14.5 Loss on -2,834.4 -699.0 +2,135.5 investments Income before -3,292.5 -176.2 +3,116.3 income tax Net income -3,162.7 -477.6 +2,685.1 Net Income: Net income attributable to owners of the parent 12
Slide 13: Gain/Loss on Investments: SVF
Gain/Loss on Investments (¥ B) SVF -13.0 Materially -2,919.1 improved on investments at SVF FY2022 FY2023 Q1 Q1 SVF: SoftBank Vision Funds 13
Slide 14: Gain/Loss on Investments: Consolidated
Gain/Loss on Investments (¥ B) Investment Business of Holding Companies SVF Others Consolidated 111.2 3.8 -689.7 -13.0 Materially -2,919.1 -699.0 improved on consolidated basis -26.5 -2,834.4 FY2022 FY2023 Q1 Q1 SVF: SoftBank Vision Funds 14
Slide 15: Gain/Loss on Investments: Alibaba Derivative Gain
Gain/Loss on Investments (¥ B) Investment Business of Holding Companies SVF Incl. ¥553.4B loss on Alibaba due to Others Derivative gain lower share price, offset by ¥769.9B related to Alibaba derivative gain related to the shares Consolidated 111.2 769.9 3.8 -689.7 -13.0 Materially -2,919.1 -699.0 i
Slide 16: Income Before Income Tax (by segment)
Income Before Income Tax (by segment) (¥ B) FY2022 FY2023 Q1 Q1 Change Investment Business of Holding Companies -1,198.1 -394.5 +803.5 SVF -2,330.8 61.0 +2,391.8 SoftBank 222.2 255.0 +32.8 Arm 29.8 -9.5 -39.4 Other/Reconciliations -15.7 -88.2 -72.5 Consolidated -3,292.5 -176.2 +3,116.3 SVF segment:
Slide 17: Net Income (quarterly)
Net Income (quarterly) (¥ B) 3,033.6 Alibaba-related transactions 1,932.8 1,255.7 1,172.0 1,121.7 912.3 698.3 627.5 761.5 526.4 313.7 97.1 24.0 55.0 29.0 5.5 ¥477.6B loss -57.6 -127.2 -397.9 -700.2 -783.4 (incl. ¥464.6B loss on forex) -1,438.2 -2,100.6 -3,162.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 18: Key Indicators
Key Indicators Some figures in this presentation are rounded and may not add up to the figures presented as the total. SBG stand-alone financial figures in this section are calculated by excluding those of self-financing entities from the consolidated figures. Major self-financing entities includes
Slide 19: Changes in Key Indicators (FY2023Q1)
Changes in Key Indicators (FY2023Q1) All indicators improved Mar 31, 2023 Jun 30, 2023 NAV (Net Asset Value) ¥14.1T ($105.8B) ¥15.5 ($107.2B) T LTV (Loan-to-Value) 11.0% 8.0% Cash position ¥5.1T ¥5.8T For details of NAV and LTV, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (a
Slide 20: Change in NAV
Change in NAV (¥ T) Share Forex price Others ＋0.4 - 0.3 ＋1.3 Up T ¥1.4 mainly due to 15.5 forex impact and NAV 14.1 higher share prices of assets Mar 31, 2023 Jun 30, 2023 For details of NAV, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Mar 31, 2023)” and “Definition a
Slide 21: Impact of Forex (FY2023Q1)
Impact of Forex (FY2023Q1) Weaker JPY increased NAV and equity On NAV On accounting Equity +¥1.3T +¥1.3T Consolidated net income -¥0.5T For details of NAV, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Jun 30, 2023)” 21
Slide 22: NAV per Share and Share Price
NAV per Share and Share Price (¥) Share Price NAV per Share 10,616 9,656 -36％ -46％ 6,773 6,917 5,182 Mar 31, 2023 Jun 30, 2023 Aug 7, 2023 For details of NAV, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Mar 31, 2023)” and “Definition and Calculation Method of SBG’s NA
Slide 23: Equity Value of Holdings
Equity Value of Holdings (¥ T) excluding asset-backed finance Alibaba 21.7 19.7 fully monetized 4.5 3.0 16.9 16.9 Component ratio (as of Jun 30, 2023) 0.02 15.9 2.4 2.2 2.0 0.7 2.4 Alibaba 0.1% 3.4 2.3 2.4 SoftBank Corp. 14% 3.3 3.1 2.8 2.8 SVF1 18% 4.5 4.2 4.0 SVF2 24% 3.7 3.5 0.9 LatAm Funds 5% 1.
Slide 24: NAV (Net Asset Value)
NAV (Net Asset Value) ¥15.5T $107.2B (Jun 30, 2023) 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 (FY) As of the end of each quarter For details of NAV, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Jun 30, 2023)” Information on NAV is provided for re
Slide 25: LTV (Net Debt / Equity Value of Holdings)
LTV (Net Debt / Equity Value of Holdings) excluding asset-backed finance 40% 35％ 30% 25％ 21.6% 20.4% 18.7% 18.2% 20% 15.9% 15.0% Lowest 14.5% 11.0% 8.0% ever 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2021 FY2022 FY2023 As of the end of each quarter For details of LTV, see Appendix "Definition and Calculat
Slide 26: Cash Position
Cash Position (¥ T) 6.0 5.8 5.1 5.0 4.6 4.3 4.0 3.8 3.0 2.8 2.9 Further 2.1 2.1 increased to ~¥6T 2.0 1.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2021 FY2022 FY2023 As of the end of each quarter Cash position: cash and cash equivalents + short term investments recorded as current assets + undrawn commitmen
Slide 27: SoftBank Vision Funds
SoftBank Vision Funds SoftBank Vision Funds: SoftBank Vision Funds Segment. Includes SVF1, SVF2, and LatAm Funds. Some figures in this presentation are rounded and may not add up to the figures presented as the total. 27
Slide 28: FY2023Q1: Gain/Loss on Investments
FY2023Q1: Gain/Loss on Investments Combined SVF1 SVF2 LatAm Funds +$1.0B +$0.9B -$0.3B +$0.3B The information contained herein is provided solely for illustrative purposes and individual investors’ results may vary. There is no guarantee that historical trends will continue throughout the life of SV
Slide 29: SVF1: Cumulative Investment Return
SVF1: Cumulative Investment Return (as of Jun 30, 2023) ($ B) 102.0 89.6 Exited 25.2 45.7 Public companies (investments 30.2 20.5 before exit) Private companies (investments 34.2 35.8 before exit) Investment cost Cumulative investment return The information contained herein is provided solely for il
Slide 30: SVF2: Cumulative Investment Return
SVF2: Cumulative Investment Return (as of Jun 30, 2023) ($ B) 51.8 Exited 1.8 Public companies (investments 8.7 before exit) 33.2 2.8 4.9 Private companies (investments 41.3 before exit) 25.5 Investment cost Cumulative investment return The information contained herein is provided solely for illustr
Slide 31: Value Changes in Portfolio (cumulative)
Value Changes cin Portfolio (cumulative) USD basis (SVF1 + SVF2 + LatAm Funds) Mar 31, 2023 Jun 30, 2023 No change No change 26 co Gain 18 co Gain (6%) +$46.3B (4%) +$49.0B 101 co 112 co (21%) (24%) 346 co 343 co (73%) (72%) Loss Loss -$54.8B -$56.5B -$8.5B (473 co) -$7.5B (473 co) The information c
Slide 32: Gain/Loss on Investments
Gain/Loss on Investments USD basis (SVF1 + SVF2 + LatAm Funds) FY2022Q4 (Total -$1,879M) FY2023Q1 (Total +$975M) Markup +$4,639M (88 companies) +$5,385M (150 companies) +95 +222 +1,202 +2,921 +200 +256 +238 +1,731 +2,649 +511 (6 co) (16 co) (16 co) (21 co) (29 co) (9 co) (12 co) (44 co) (32 co) (53
Slide 33: Invested Amounts (SVF1 + SVF2 + LatAm Funds)
Invested Amounts (SVF1 + SVF2 + LatAm Funds) ($ B) 14.7 13.1 8.6 Resuming investments 5.6 2.3 0.4 0.4 0.9 0.3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Invested amounts are the sum of new and follow-on investments, including those through share exchanges. FY2021 FY2022 FY2023 Excludes the amount invested by SVF to
Slide 34: Enhancing Ecosystem
Enhancing Ecosystem Host post-COVID networking events globally Reconnect SVF portfolio companies, SBG group companies, and investors Promote knowledge sharing among SVF portfolio companies 34
Slide 35: Enhancing Ecosystem: Japan Market
Enhancing Ecosystem: Japan Market • SBG Group as a gateway to the Japanese market; helping SVF portfolio companies to expand into Japan at various stages • 50+ SVF portfolio companies operating in Japan • Provides business opportunities to Japanese companies inside and outside SBG Group SVF1 SVF2 Th
Slide 36: AI Technology Mapping
AI Technology Mapping Artificial Intelligence Expert Systems Machine Learning Other Generative AI is one component Subfields Deep Natural Learning Language Processing of AI Generative AI & Sources: IDC and others Large Language Models Computer Vision The illustrative diagram on the slide is a simpli
Slide 37: Expansion of Use Cases for AI
Expansion of Use Cases for AI Sector Frontier Health Transpor- Enterprise Consumer Logistics Proptech FinTech EdTech Tech Tech tation Customer Credit Scoring Dynamic Drug Automated Building Self-Driving Processor IP Code Writing Service & Loan Educational Discovery Warehouses Operations Vehicles Man
Slide 38: Arm
Arm Some figures in this presentation are rounded and may not add up to the figures presented as the total. 38
Slide 39: Arm revenue and 3-year CAGR
2,817 2,665 Q2-Q4 Q1 1,980 3-year CAGR 1,823 1,788 1,809 (3 months) 1,689 14% 2,098 1,990 1,550 1,397 1,410 1,410 1,270 719 675 641 419 426 378 398 429 (Source) Arm After FY2017: excl. ISG revenues '16 '17 '18 '19 '20 '21 '22 '23 ISG: Internet-of-Things Services Group Based on, but not necessarily i
Slide 40: AI on Arm is Everywhere
AI on Arm is Everywhere IoT & Mobile Cloud compute Automotive embedded AI for all Generative Optimized Autonomous Smart applications AI for AI driving vision (Source) Arm 40
Slide 41: Computing Platform for Mobile
Computing Platform for Mobile (announced in May 2023) Next generation Immersive AI gaming experience CPU GPU Tools Software Arm Total Compute Solutions 2023 (Source) Arm The information contained herein is provided for illustrative purposes only. The information herein was prepared by Arm. None of S
Slide 42: NVIDIA announced Isambard 3 Supercomputer in May 2023
NVIDIA announced Isambard 3 Supercomputer in May 2023 Isambard 3 will feature Arm-based NVIDIA Grace CPU Superchips to power medical and scientific research Expected to be among Europe’s most energy-efficient systems according to NVIDIA (Source) NVIDIA Corporation For details, please see” NVIDIA Gra
Slide 43: Arm confidentially submitted draft Form F-1
Arm has confidentially submitted a draft registration statement on Form F-1 to the U.S. Securities and Exchange Commission. The size and price range for the proposed offering have yet to be determined. The initial public offering is subject to market and other conditions and the completion of the SE
Slide 44: AI Reshapes the Industrial Landscape
AI Reshapes the Industrial Landscape 44
Slide 45: AI is revolutionizing every industry
AI is revolutionizing every industry AI The information contained herein is provided for illustrative purposes only and does not guarantee accuracy. 45
Slide 46: Logistics Market Size as a Percentage of GDP (Global)
Logistics Market Size as a Percentage of GDP Ads Logistics 1% 8% ($0.3T) ($1.8T) Total $23.3T GDP: as of 2021, (Source) The World Bank, “GDP (current US$)” Ads: as of 2021, (Source) dentsu, “Global Ad Spend Forecasts July 2022” Logistics: as of 2021, sum of transportation costs + inventory carrying
Slide 47: Logistics Market Size as a Percentage of GDP (Japan)
Logistics Market Size as a Percentage of GDP Ads Logistics 1% 9% ($0.1T) ($0.4T) Total $5.0T USD 1 = JPY 109.90 (2021 average TTM) GDP: as of 2021, (Source) Cabinet Office, “National Accounts for 2021” Ads: as of 2021, (Source) dentsu, “Advertising Expenditures in Japan 2021” Logistics: as of 2020,
Slide 48: Strategic Investments in Logistics
Strategic Investments in Logistics Made strategic investments in automated logistics that leverage AI (i) Established a JV with SBG's investment commitment of $3.2B; (ii) acquired additional 3% interests for $500M in July 2023 (SBG Group's interest in the company as of Mar 31, 2023: 5.6% in total) A
Slide 49: Symbotic
Symbotic Warehouse automation platform for retailers and distributors • Founded in 2007, listed on NASDAQ in 2022 • Revolutionized warehouse automation to dramatically improve storage density, efficiency, speed and flexibility through AI-powered robotic platform • Launched GreenBox JV targeting the
Slide 50: GreenBox Systems
GreenBox Systems Transformative Warehouse-as-a-Service offering GreenBox Automated Warehouse A GreenBox Automated Warehouse B GreenBox Automated Warehouse C Third-party customers (single and multi-tenant) GreenBox is a jointly controlled entity of SBG and Symbotic. (Source) Symbotic 50
Slide 51: Berkshire Grey
Berkshire Grey AI-enabled robotic solutions to automate fulfillment processes • Founded in 2013 • Provide AI-enabled robotic solutions of e-commerce fulfillment, store replenishment, and packaging handling (identifying, sorting, and picking) for e- commerce, retail, convenience and logistics provide
Slide 52: TELEXISTENCE
TELEXISTENCE Develop and deploy remote control technology and AI robots • Founded in 2017 • Deploy AI robots to restock beverage in convenience store backyards • Entered into an agreement with FamilyMart to install AI robots in 300 stores across Japan • Replenish 500-1000 drinks/store with TX robots
Slide 53: Financial Strategy
Financial Strategy Some figures in this presentation are rounded and may not add up to the figures presented as the total. 53
Slide 54: FY2023 Financial Strategy
FY2023 Financial Strategy Financial management Adhering to adaptable to both financial policy Defense and Offense 54
Slide 55: Adhering to Financial Policy
Adhering to Financial Policy Maintain LTV below 25% in normal times 1 (upper threshold of 35% even in times of emergency) 2 Maintain at least 2-year worth of bond redemptions in cash Secure recurring distributions and dividend income from 3 SVF and other subsidiaries 55
Slide 56: Respond to Both Defense and Offense
Respond to Both Defense and Offense Invest in the Defense against Information further downside Revolution, while maintaining financial stability Maintain LTV below 25% in normal times (LTV = 8.0% as of Jun 30, 2023) Maintain at least 2-year worth of bond redemptions in cash (Cash position = ¥5.8T as
Slide 57: Capital Allocation
Capital Allocation New Shareholders investments return* Endeavor to strike a balance Financial policy (Financial stability) *The level of NAV discount is also considered 57
Slide 58: SBG Income Taxes Paid on a Consolidated Basis (Net)
SBG Income Taxes Paid on a Consolidated Basis (Net) (¥ B) Total of 5 FY2018 FY2019 FY2020 FY2021 FY2022 fiscal years Consolidated 415.4 636.3 445.5 589.3 525.9 2,612.4 Japan 284.3 575.2 310.5 551.2 469.7 2,190.9 SBG and intermediate holding companies (wholly owned 36.8 324.7 35.7 200.0 214.2 811.4 s
Slide 59: Top Consolidated Corporate Income Tax Payments (FY2018-2022)
(Ref.) Top 10 Consolidated Corporate Income Tax Payments (FY2018- 2022) (¥ B) Total of 5 Company FY2018 FY2019 FY2020 FY2021 FY2022 fiscal years 1 TOYOTA MOTOR 836.6 777.5 810.1 809.8 1,297.2 4,531.2 2 NTT 613.4 488.3 524.3 434.3 738.4 2,798.7 3 SoftBank Group 415.4 636.3 445.5 589.3 525.9 2,612.4 4
Slide 60: Summary
Summary SVF returned to profit for the first time 1 in 6 quarters 2 NAV up to ¥15.5T, LTV down to 8.0% 3 Resuming offensive 4 Arm continues preparations for the IPO 60
Slide 61: Information Revolution - Happiness for Everyone
“Information Revolution －Happiness for Everyone” 61
Slide 62: SoftBank
SoftBank
Slide 63: Appendix
Appendix Some figures in this presentation are rounded and may not add up to the figures presented as the total. 63
Slide 64: Equity Value of Holdings: Diversified Portfolio
Equity Value of Holdings: Diversified Portfolio excluding asset-backed finance 0.1% 5% 14% SoftBank Corp. Alibaba 23% 15% T-Mobile/ 8% Deutsche Telekom Alibaba 10% 10% 5% 22% Arm 18% fully 12% monetized SVF1+SVF2+ 45% 47% 43% LatAm Funds 435 439 438 investments investments investments 8% 8% 8% Other
Slide 65: Equity Value of Holdings: Diversified Portfolio by Region
Equity Value of Holdings: Diversified Portfolio 15% 10% China 31% 17% Japan Greater 18% APAC 13% （excluding China 11% geographical 12% and Japan） 9% EMEA diversification 27% 32% 20% 4% 5% 5% Latin America 25% 24% 23% North America Mar 31 Mar 31 Jun 30 2022 2023 2023 Classification of regions based o
Slide 66: Monetization and Capital Allocation (FY2023Q1)
Monetization and Capital Allocation (FY2023Q1) (¥ T) Fund procurement 5.8 5.1 0.1 -0.2 +0.1 0.7 Undrawn commitment line Undrawn commitment line 0.6 0.7 Investment Monetization +0.8 5.1 4.5 Cash position Cash position （Mar 31, 2023) Increase Decrease Others （Jun 30, 2023） Converted to JPY at average
Slide 67: Definition and Calculation Method of SBG's NAV and LTV (as of Jun 30, 2023)
Definition and Calculation Method of SBG’s NAV and LTV (as of Jun 30, 2023) 1. NAV (Net Asset Value) • NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjustment for asset-backed financing) • Alibaba: the number of Alibaba ADSs equivalent to the number of shares held by
Slide 68: Definition and Calculation Method of SBG's NAV and LTV (as of Mar 31, 2023)
Definition and Calculation Method of SBG’s NAV and LTV (as of Mar 31, 2023) 1. NAV (Net Asset Value) • NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjustment for asset-backed financing) • Alibaba: the number of Alibaba ADSs equivalent to the number of shares held by
Slide 69: Definition and Calculation Method of SBG's NAV and LTV (as of Mar 31, 2022)
Definition and Calculation Method of SBG’s NAV and LTV (as of Mar 31, 2022) 1. NAV (Net Asset Value) • NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjustment for asset-backed financing) • Alibaba: the number of Alibaba ADSs equivalent to the number of shares held by
Slide 70: SVF1 Public Portfolio Companies (as of Jun 30, 2023)
SVF1 Public Portfolio Companies (as of Jun 30, 2023) (a) (b) (c) = (b) - (a) (d) = (b) / (a) ($ M) Company Investment cost *2 Gross return *3 Gross gain (loss) Gross MOIC *4 to SVF1 to SVF1 to SVF1 Coupang 2,729 10,798 8,069 4.0x Doordash 680 7,486 6,806 11.0x Fully Exited NVIDIA 2,878 5,813 2,936 2
Slide 71: SVF2 Public Portfolio Companies (as of Jun 30, 2023)
SVF2 Public Portfolio Companies (as of Jun 30, 2023) (a) (b) (c) = (b) - (a) (d) = (b) / (a) Investment cost *2 Gross return *3 Gross gain (loss) *4 ($ M) Company Gross MOIC to SVF2 to SVF2 to SVF2 Fully Exited Beike 1,350 2,497 1,147 1.8x Symbotic 200 856 656 4.3x AutoStore 2,800 2,876 76 1.0x IonQ