Softbank Group Corp. · TSE:9984
Softbank — Q1 FY2022 Earnings Presentation
50 slides from Softbank's earnings presentation, Aug 8, 2022
Slide 1: Earnings Results for the 3-month Period ended June 30, 2022
Earnings Results for the 3-month Period ended June 30, 2022 August 8, 2022
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: 2
2
Slide 4: Portrait of Tokugawa Ieyasu
Portrait of Tokugawa Ieyasu (1st Shogun of Tokugawa Shogunate) “Frown” after the Battle of Mikatagahara 3
Slide 5: Consolidated Results
Consolidated Results 4
Slide 6: Net Income (Quarterly)
Net Income (Quarterly) 1,932.8 (JPY bn) 1,255.7 1,121.7 1,172.0 912.3 698.3 627.5 761.5 Biggest loss in SBG history 526.4 313.7 97.1 55.0 29.0 5.5 24.0 JPY 3.2tr -127.2 -397.9 -700.2 -1,438.2 -2,100.6 JPY -3,162.7bn (USD -24.5bn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2017
Slide 7: Factors of Loss
Factors of Loss Global Rapid Fall Stock Market of Yen Turmoil 6
Slide 8: Stock Performance
Stock PerformanceIndex with Mar. 31, 2022 as 100 130 120 110 100 90 80 ▲22% NASDAQ Composite Index 70 60 50 40 30 Mar. 31 Jun. 30 2022 2022 7 (Source) S&P Capital IQ
Slide 9: Stock Performance
Stock PerformanceIndex with Mar. 31, 2022 as 100 130 120 110 100 90 80 ▲22% NASDAQ Composite Index ▲31% Vision Funds 70 60 Public Stock Index 50 40 The information contained herein is solely for illustrative purposes and does not purport to be a complete list of SVF1, SVF2, and LatAm investments. 30
Slide 10: Gain and Loss on Investments at Vision Funds (Quarterly)
Gain and Loss on Investments at Vision Funds (Quarterly) 3,661.8 (JPY bn) 1,417.2 1,155.2 519.8 610.9 320.0 392.0 414.4 248.4 319.9 106.9 87.5 71.0 77.8 106.9 -190.5 -943.7 -1,173.9 -1,160.7 The information contained herein is provided solely for illustrative purposes on an SBG basis and individual
Slide 11: Gain and Loss on Investments at Vision Funds (Cumulative)
Gain and Loss on Investments at Vision Funds (Cumulative) 7,094.5 (JPY bn) 6,483.6 6,040.8 5,933.8 3,047.2 2,821.8 2,237.8 1,823.4 The information contained herein is provided solely for 1,431.4 1,294.1 illustrative purposes on an SBG basis and individual investors' results may vary. Furthermore, pa
Slide 12: Gain and Loss on Investments at Vision Funds (Cumulative)
Gain and Loss on Investments at Vision Funds (Cumulative) (JPY bn) 367.0 147.6 506.7 477.3 284.5 341.0 521.8 421.4 3,047.2 6,220.9 76.0 5,858.7 258.6 5,171.5 5,234.5 529.7 14.5 112.2 Vision Funds: sum of SVF1, SVF2, and LatAm Funds of SoftBank Vision Funds segment Vision Fund 1: SVF1 2,830.3 Vision
Slide 13: Gain and Loss on Investments at Vision Funds (Cumulative)
Gain and Loss on Investments at Vision Funds (Cumulative) Mar. 31, 2022 Gain JPY 6.7tr No change 117 co (26%) 161 co (36%) 171 co Loss (38%) JPY -3.6tr JPY 3,047.2bn (449 co) The information contained herein is provided solely for illustrative purposes on an SBG basis and individual investors' resul
Slide 14: Gain and Loss on Investments at Vision Funds (Cumulative)
Gain and Loss on Investments at Vision Funds (Cumulative) Mar. 31, 2022 Jun. 30, 2022 Gain Gain JPY 6.7tr JPY 5.1tr No change No change 73 co 117 co (16%) 119 co (26%) 161 co (25%) (36%) 171 co 277 co (59%) Loss (38%) Loss JPY -3.6tr JPY -5.0tr JPY 3,047.2bn (449 co) JPY 112.2bn (469 co) The informa
Slide 15: Gain and Loss on Investments at Vision Funds: Mark up
Gain and Loss on Investments at Vision Funds Total JPY -2,935.0bn (FY2022Q1) Mark up JPY +230.9bn (35 companies) (Main factors of mark up, JPY bn) 181.9 42.7 6.3 Performance Public Public New funding of portfolio comparable portfolio Other round companies companies companies (9 co) (0 co) (0 co) (12
Slide 16: Gain and Loss on Investments at Vision Funds: Mark up and Mark down
Gain and Loss on Investments at Vision Funds Total JPY -2,935.0bn (FY2022Q1) Mark up Mark down JPY +230.9bn (35 companies) JPY -3,165.9bn (284 companies) (Main factors of mark up, JPY bn) (Main factors of mark down, JPY bn) 181.9 42.7 6.3 -16.6 -125.8 -254.6 -1,043.6 -1,725.3 Performance Public Publ
Slide 17: Weaker Yen
Exchange Rate (USD/JPY) 140 136.7JPY Weaker Yen 135 130 125 122.4 JPY 120 Mar. 31 Jun. 30 2022 2022 Exchange Rate: daily TTM rates 16
Slide 18: Net Income (FY2022Q1)
Net Income (FY2022Q1) Others JPY -11.9bn Vision Funds JPY -2,330.8bn Foreign Exchange Loss JPY -820.0bn JPY -3,162.7bn Net income attributable to owners of the parent Vision Funds: SoftBank Vision Funds segment (Income before income tax) 17
Slide 19: Net Income (FY2022Q1)
Net Income (FY2022Q1) Others JPY -11.9bn Vision Funds JPY -2,330.8bn Foreign Impact of increase in the yen amount Exchange Loss of foreign currency-denominated JPY -820.0bn net debt of companies in Japan JPY -3,162.7bn Net income attributable to owners of the parent Vision Funds: SoftBank Vision Fun
Slide 20: Most Important Indicators for SBG
Most Important Indicators for SBG 19
Slide 21: NAV LTV
Most Important Indicators for SBG NAV LTV (Net Asset Value) (Loan to Value) 20
Slide 22: NAV (Net Asset Value)
NAV (Net Asset Value) USD 151bn USD 135bn Down USD 16bn in 3 months Mar. 31, 2022 Jun. 30, 2022 21 USD 1 = JPY 122.39 (Mar. 31, 2022 TTM) USD 1 = JPY 136.68 (Jun. 30, 2022 TTM) For details, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Mar. 31, 2022)” and “Definition an
Slide 23: NAV (Net Asset Value)
NAV (Net Asset Value) JPY 18.5tr JPY 18.5tr Flat in 3 months Mar. 31, 2022 Jun. 30, 2022 22 USD 1 = JPY 122.39 (Mar. 31, 2022 TTM) USD 1 = JPY 136.68 (Jun. 30, 2022 TTM) For details, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Mar. 31, 2022)” and “Definition and Calcu
Slide 24: NAV (Net Asset Value)
NAV (Net Asset Value) JPY 18.5tr JPY 18.5tr +JPY 2.2tr FX impact Flat in 3 months Mar. 31, 2022 Jun. 30, 2022 23 USD 1 = JPY 122.39 (Mar. 31, 2022 TTM) USD 1 = JPY 136.68 (Jun. 30, 2022 TTM) For details, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Mar. 31, 2022)” and
Slide 25: NAV (Net Asset Value)
NAV (Net Asset Value) Flat in 3 months (incl. FX impact +JPY 2.2tr) JPY 18.5tr (Jun. 30, 2022) JPY 18.5tr (USD 135bn) (USD 151bn) (Mar. 31, 2022) ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 (FY) 24 USD 1 = JPY 122.39 (Mar. 31, 2022 TTM) USD 1 =
Slide 26: NAV (Net Asset Value)
NAV (Net Asset Value) 59% (Sep. 30, 2020) JPY 18.5tr (Jun. 30, 2022) (USD 135bn) 21% Alibaba 2% Listed investments 14% arm 5% T-Mobile/Deutsche Telekom 11% SBKK 47% Vision Fund etc. Other Each percentage is the proportionated share of holding equity value for each time period T-Mobile/Deutsche Telek
Slide 27: LTV (Net Debt / Equity Value of Holdings)
LTV (Net Debt / Equity Value of Holdings) 40% 35% 30% 22% 25% 20.4% 19% (excl. FX impact) Lower 20% 16% 16.8% 14% 12% 12% 14.5% 10% 9% LTV 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2020 FY2021 FY2022 For details, see Appendix “Definition and Calculation Method of SBG’s NAV and LTV (as of Jun. 30, 2022)” 26
Slide 28: Cash Position
Cash Position JPY 4.6tr (USD 33bn) JPY 1.8tr (USD 13bn) Jun. 30, 2022 For the next 2 years Cash Position Planned Bond Redemption incl. undrawn commitment line USD 1 = JPY 136.68 (Jun. 30, 2022 TTM) 27 Cash position: cash and cash equivalents + short-term investments recorded as current assets + undr
Slide 29: Equity Value of Holdings
Equity Value of Holdings 32.1 12.4 25.7 24.7 23.2 7.3 6.0 JPY 21.7tr 5.2 1.5 0.8 4.5 Alibaba 0.7 0.6 0.5 2.7 2.8 Listed investments 2.8 1.9 1.3 0.8 2.7 1.1 3.0 arm 2.3 1.2 T-Mobile/ 2.3 2.4 2.2 Deutsche Telekom 2.4 SBKK 11.4 11.3 12.0 11.4 Vision 10.2 Fund etc. Q1 Q2 Q3 Q4 Q1 FY2021 FY2022 LTV = Net
Slide 30: Equity Value of Holdings and Net debt
Equity Value of Holdings Net debt 32.1 12.4 25.7 24.7 23.2 7.3 6.0 JPY 21.7tr 5.2 1.5 0.8 4.5 Alibaba 0.7 0.6 0.5 2.7 2.8 Listed investments 2.8 1.9 1.3 0.8 2.7 1.1 3.0 arm 2.3 1.2 T-Mobile/ 2.3 2.4 2.2 Deutsche Telekom 2.4 SBKK 12.0 5.1 5.3 11.4 11.3 11.4 10.2 Vision 4.8 4.7 Fund etc. JPY 3.1tr Q1
Slide 31: Equity Value of Holdings, Net debt and LTV
Equity Value of Holdings Net debt LTV (Loan to Value) 32.1 35% 12.4 25.7 24.7 23.2 7.3 JPY 21.7tr 6.0 5.2 25% 22% 1.5 0.8 4.5 Alibaba 20.4% 0.7 0.6 0.5 19% 2.7 2.8 Listed investments 2.8 1.9 1.3 0.8 2.7 1.1 3.0 arm 16% 2.3 1.2 T-Mobile/ 2.3 2.4 2.2 Deutsche Telekom 2.4 SBKK 14.5% 12.0 5.1 5.3 11.4 1
Slide 32: SoftBank Vision Funds
SoftBank Vision Funds 31
Slide 33: SoftBank Vision Funds total companies
SoftBank Vision Funds 473 total companies (incl. 3 companies post-investment committee approval but pre-investment closing) SoftBank Vision Fund 1 SoftBank Vision Fund 2 advised by SBGA SoftBank Latin America Funds advised by SBIA (276 total companies: 272 portfolio companies as of Jun. 30, 2022 + 1
Slide 34: Approved Investment Amount at Vision Funds
Approved Investment Amount at Vision Funds (USD bn) 20.6 12.7 Heightened 9.6 investment discipline 2.4 0.6 Q1 Q2 Q3 Q4 Q1 FY2021 FY2022 Vision Funds: sum of SVF1, SVF2, and LatAm Funds of SoftBank Vision Funds segment Approved Investment Amount: investment amount approved by the Investment Committee
Slide 35: SoftBank Vision Funds (Current policy)
SoftBank Vision Funds (Current policy) 1 Substantial reduction of operational costs 2 Heightened discipline for new investments 3 Enhancing the value of current portfolio (473 companies) 34 Portfolio companies: sum of a) SVF1 (94 total portfolio companies), including JVs / affiliates among portfolio
Slide 36: arm
arm
Slide 37: Arm Revenue (3-month)
Revenue (3-month) (USD mm) USD 719mm 675 419 426 429 398 378 (Source) Arm After FY2017Q1: excl. ISG revenues ISG: Internet-of-Things Services Group Q1 Q1 Q1 Q1 Q1 Q1 Q1 Based on, but not necessarily in conformity with IFRS FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 All numbers are unaudited an
Slide 38: Share Repurchase Program
Share Repurchase Program 37
Slide 39: Share Repurchase Program JPY 1.0tr
Share Repurchase Program JPY 1.0tr JPY 1.0tr: total amount of share repurchase authorized by the Board on Nov. 8, 2021, to be repurchased considering financial policies, new investment opportunities, NAV discount, etc (the total repurchase amount may not reach JPY 1.0tr within one year from Nov. 9,
Slide 40: Share Repurchase Program: 70% progress
Share Repurchase Program JPY 1.0tr To be repurchased (maximum) (Program expires on Nov. 8, 2022) JPY 295.2bn Repurchased 70% progress JPY 704.8bn (Nov. 2021 - Jul. 2022) in 9 months JPY 1.0tr: total amount of share repurchase authorized by the Board on Nov. 8, 2021, to be repurchased considering fin
Slide 41: Newly Authorized Share Repurchase Program
Newly Authorized Share Repurchase Program JPY 400bn (for one year from Aug. 9, 2022 to Aug. 8, 2023) Shares will be repurchased in consideration of financial policy, investment opportunities and NAV discount, among others. (the repurchase amount may not reach JPY 400bn within one year For details, r
Slide 42: Information Revolution Happiness for everyone
Information Revolution Happiness for everyone 41
Slide 43: SoftBank
SoftBank
Slide 44: Appendix
Appendix
Slide 45: 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. NAVNet Asset Value ◦ NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjusting asset-backed financing) ◦ Alibaba: calculated by multiplying the number of Alibaba ADSs equivalent to the number
Slide 46: Definition and Calculation Method of SBG's NAV and LTV (as of Jun. 30, 2022)
Definition and Calculation Method of SBG’s NAV and LTV (as of Jun. 30, 2022) 1. NAVNet Asset Value ◦ NAV = Equity value of holdings - Net debt 2. Equity value of holdings (after adjusting asset-backed financing) ◦ Alibaba: calculated by multiplying the number of Alibaba ADSs equivalent to the number
Slide 47: SVF1 Public Portfolio Companies (as of Jun. 30, 2022)
SVF1 Public Portfolio Companies (as of Jun. 30, 2022) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD mm) Company Investment cost *2 Gross return *3 Gross gain (loss) Gross MOIC *4 to SVF1 to SVF1 to SVF1 Doordash 680 7,314 +$6,634 10.8x Coupang 2,729 8,615 +$5,886 3.2x Fully Exited NVIDIA 2,878 5,813
Slide 48: SVF1 Public Portfolio Companies (as of Aug. 5, 2022)
SVF1 Public Portfolio Companies (as of Aug. 5, 2022) (a) (b) (c) = (b) - (a) (d) = (b) / (a) (USD mm) Company Investment cost *1 Gross return *2 Gross gain (loss) Gross MOIC *3 to SVF1 to SVF1 to SVF1 Coupang 2,729 11,604 +$8,875 4.3x Doordash 680 7,825 +$7,145 11.5x Fully Exited NVIDIA 2,878 5,813
Slide 49: SVF2 Public Portfolio Companies (as of Jun. 30, 2022)
SVF2 Public Portfolio Companies (as of Jun. 30, 2022) (USD mm) (a) (b) (c) = (b) - (a) (d) = (b) / (a) Investment cost Gross return Gross gain (loss) Company *2 *3 Gross MOIC *4 to SVF2 to SVF2 to SVF2 Fully Exited Beike (KE Holdings) 1,350 2,497 +$1,147 1.8x Symbotic 200 219 +$19 1.1x Qualtrics 24
Slide 50: SVF2 Public Portfolio Companies (as of Aug. 5, 2022)
SVF2 Public Portfolio Companies (as of Aug. 5, 2022) (USD mm) (a) (b) (c) = (b) - (a) (d) = (b) / (a) Investment cost Gross return Gross gain (loss) Company *1 *2 Gross MOIC *3 to SVF2 to SVF2 to SVF2 Fully Exited Beike (KE Holdings) 1,350 2,497 +$1,147 1.8x Symbotic 200 324 +$124 1.6x Berkshire Gre