Earnings Results for the Interim Period Ended Spetember 30, 2007
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Earnings Results for the Interim Period Ended September 30, 2007 November 6, 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. <Highlights> 1. Consolidated earnings results: H1 operating income increased by 49% (YoY) H1 net income: 3.2 times (YoY) 2. Success in mobile operations: 1.14 million of net subscriber additions in H1 3. Becoming No.1 Internet company in Asia: IPO of Alibaba + Yahoo! JAPAN 2 H1/FY2007 Summary of Consolidated Earnings Results <bn JPY> <Interim> H1/FY07 H1/FY06 YoY (Apr 07 – Sep) (Apr 06 – Sep) Net Sales 1,364.7 1,120.1 +244.5 EBITDA 314.2 228.4 +85.8 Operating income 167.7 112.5 +55.1 Ordinary income 111.1 62.6 +48.4 Income before income taxes and 122.9 118.8 +4.0 minority interests Net income 46.4 14.4 +32.0 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 3 H1/FY2007 Highlights <k> Interim Net Additions 1,140 1,030 1,000 960 960 +1.05 million YoY 500 320 97 0 FY06 FY07 FY06 FY07FY06 FY07 H1 H1 H1 SBM NTT DoCoMo KDDI 4 H1/FY2007 Highlights <bn JPY> Interim Operating Income 180 167.7 160 140 112.5 120 Increased by 100 49% YoY 80 60 40 20 0 H1/FY06 H1/FY07 5 H1/FY2007 Highlights <%> Interim Operating Income YoY Movement 50% 49% SOFTBANK Increased by 9% KDDI 49%YoY 0% -21% NTT DoCoMo -50% H1/FY06 H1/FY07 6 Consolidated Net Sales (interim) 1,364.7 <bn JPY> 1,120.1 1,000 H1/FY2007 1,364.7bn JPY 522.7 500 IncreasedIncreased byby 2222%% YoYYoY 0 H1/FY05 H1/FY06 H1/FY07 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 7 Net Sales by Segment (interim) 1,364.7 <bn JPY> 1,120.1 1,000 808.9 Mobile Communications 581.8 (SBM) 522.7 Others 500 e-Commerce 123.6 117.0 118.5 71.2 89.6 108.8 Internet Culture (Yahoo Japan) 168.9 166.2 157.8 Fixed-line Telecommunications (SBTM) 124.9 127.4 126.7 Broadband Infrastructure 0 H1/FY05 H1/FY06 H1/FY07 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 SBM: SOFTBANK MOBILE Corp. SBTM: SOFTBANK TELECOM Corp. 8 Consolidated EBITDA (interim) 350 <bn JPY> 314.2 300 250 228.4 H1/FY2007 314.2bn JPY 200 150 IncreasedIncreased byby 100 3838%% YoYYoY 50.2 50 0 H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 9 EBITDA by Segment (interim) 350 <bn JPY> 314.2 300 250 228.4 Mobile Communications (SBM) 200 Broadband Infrastructure 150 Fixed-line 100 Telecommunications (SBTM) 50.2 Internet Culture (Yahoo Japan) 50 e-Commerce 0 H1/FY05 H1/FY06 H1/FY07 Others -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 10 Consolidated Operating Income (interim) <bn JPY> 167.7 150 112.5 100 H1/FY2007 167.7bn JPY 50 IncreasedIncreased byby 4.4 49%49% YoYYoY 0 H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 11 Operating Income by Segment (interim) 167.7 <bn JPY> Consolidated Operating 150 Income 112.5 Mobile Communications 100 (SBM) Broadband Infrastructure Fixed-line 50 Telecommunications (SBTM) Internet Culture 4.4 (Yahoo Japan) e-Commerce 0 Others H1/FY05 H1/FY06 H1/FY07 -50 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 12 Consolidated Ordinary Income (interim) <bn JPY> 120 111.1 100 80 H1/FY2007 62.6 60 111.1bn JPY 40 IncreasedIncreased byby 20 77%77% YoYYoY 0 H1/FY05 H1/FY06 H1/FY07 -20 -13.4 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 13 Consolidated Net Income (interim) <bn JPY> 50 46.4 40 30 H1/FY2007 46.4bn JPY 20 14.4 x3.2x3.2 YoYYoY 10 0 H1/FY05 H1/FY06 H1/FY07 -4.1 -10 Note: Operating results of SOFTBANK MOBILE Corp. (formerly Vodafone K.K.) are included beginning in May 2006 14 Consolidated Net Income (interim) <bn JPY> H1/FY07 H1/FY06 Notes (Apr 07 – Sep) (Apr 06- Sep) Ordinary income 111.1111.1 62.6 Gain on sale of Special income, net 11.7 56.2 investment securities:10.4 Income before incomeincome taxestaxes andand 122.9122.9 118.8 minority interests Income taxes: Current 16.8 80.9 Income taxes: Deferred 39.0 6.0 Mainly SBM Minority interests 20.5 17.4 Mainly Yahoo Japan Net income 46.446.4 14.4 15 Consolidated Cashflow (interim) <bn JPY> H1/FY07 Notes (Apr 07 – Sep) Income taxes paid (28.6) Decrease in A/P handset payments (46.8) Operating cashflow +0.4+0.4 Interest paid (49.6) Increase in installment receivables (174.3) Purchase of property and equipment, and Investing cashflow ((22227.2)7.2) intangibles (204.4) Proceeds from exercise of warrants +44.8 Proceeds from securitizing installment Financing cashflow +303.5+303.5 receivables +153.0 Proceeds from sale and lease back of equipment newly acquired +220.8 <Reference> Q2 (Jul 07 - Sep) operating cashflow: +27.9bn JPY 16 Cash Position <bn JPY> 700 Unused portion of credit line facility Cash position 600 119.0 500 400 300 30.0 481.9 200 280.9 100 0 End Sep 06 End Sep 07 17 Net Interest-bearing Debt <bn JPY> 2,500 2,000 1,676.5 1,672.5 1,500 Investment by SOFTBANK CORP. and Yahoo Japan in 1,000 SBM: 320.0bn JPY Mobile net interest- 615.6 bearing debt (non- 500 CB 432.5 recourse) 321.7 (including SBM loan 465.6 balance of: 1,311.4bn 282.5 171.7 JPY) 0 End Sep 05 End Sep 06 End Sep 07 Balance of lease obligations are not included in the net interest-bearing debt Mobile: SOFTBANK MOBILE Corp. and BB MOBILE Corp. 18 Pro-forma Equity Ratio (after impact of unrealized capital gain) Alibaba.com Limited unrealized gain Pro-forma adjusted equity ratio 26.2% (after consideration of unrealized 23.5% capital gain*) 20% Equity ratio 7.9% 6.6% 0% End Mar 07 End Sep 07 * Calculated by offsetting the tax liability to the unrealized capital gain on investments in listed securities held by SOFTBANK CORP. domestic and overseas fully owned subsidiaries. Closing stock price of November 5 is used. The unrealized gain of Alibaba.com Limited is estimated based on the value of indirect economic ownership ratio. 19 Mobile Communications 20 No.1 in Net addition Share for 5 Consecutive Months (May 07 - Sep) Net Addition Share in Sep 2007 100% Net Addition Share (monthly) NTT DoCoMo 9.5% 80% KDDI 40.1% 50.4%50.4% 60% SOFTBANK 40% KDDI 20% NTT DoCoMo 0% Apr Oct Apr Oct Apr Vodafone Source: Telecommunications carriers 2005 2006 2007 association (excl. EMOBILE) -20% 21 No.1 in Net Addition Share in H1 (Apr 07 - Sep) 70% Net Addition Share (interim) 50% SOFTBANK KDDI 30% 10% NTT DoCoMo H1/FY5 H1/FY06 H1/FY07 Source: Telecommunications carriers association (excl. EMOBILE) -10% 22 Significant Increase in 3G Subscribers (million) 18 Cumulative Subscribers 17.05 16 14 12 10.92 10 2G2G End of Sep 2007 8 3G subscribers: 10.9210.92 millionmillion 6 3G ratio: 64%64% 4 2 3G3G 0 Mar Sep Mar Sep Mar Sep Mar Sep 2004 2005 2006 2007 23 Continue to Expand Base Stations Number of (BS) 3G Base Stations 47,439 46,000 PlanPlan toto enhanceenhance coveragecoverage furtherfurther toto improveimprove ‘‘connectivityconnectivity’’ Q1 Q2 Q3 Q4 Q1 Q2 FY2006 FY2007 24 Market Penetration of Installment Sales: Acquire Long- Number of tenure Subscribers (million) ‘New Super Bonus’ Subscribers 8 7 6 5 4 ExceedExceedss 3 88 millionmillion 2 subscribersubscriberss** 1 0 *As of Nov 1, 2007 Oct Jan Apr Jul Oct 2006 2007 25 Experienced Outstanding Response to Price Plans (million) Number of Subscriptions 9 8 White Plan 7 exceedsexceeds 6 99 millionmillion** 5 4 White Plan Double White 3 2 exceedsexceeds 1 2.72.7 millionmillion** Double White *As of Oct 29, 2007, including 0 applications to which rates are 2007/Jan Mar Oct not yet applied 26 Overtook Competitors in Terms of Customer Satisfaction Related to Pricing Satisfaction in Pricing White Plan Family Discount 24 49%49% au 30% NTT DoCoMo 21% Source: research by an external institution 27 Triple Winner in CM Preference for 3 Consecutive Months (2007) Aug Sep Oct Among 1,217 companies Among 1,196 companies Among 1,219 companies 1 SOFTBANK MOBILE SOFTBANK MOBILE SOFTBANK MOBILE First-ever! 2 SUNTORY NTT DoCoMo Shiseido 3 NTT DoCoMo SUNTORY NTT DoCoMo 4 Coca-Cola (Japan) Meiji Seika SUNTORY By Comp 5 Kao SHARP KDDI Among 4,520 commercials Among 4,559 commercials Among 4,541 commercials 1 SOFTBANK MOBILE SOFTBANK MOBILE SOFTBANK MOBILE 2 Coca-Cola (Japan) NTT DoCoMo Shiseido 3 Shiseido Meiji Seika KDDI By CM 4 NTT DoCoMo NTT DoCoMo NTT DoCoMo 5 SOFTBANK MOBILE Shiseido Credit Saison Among 3,184 brands Among 3,167 brands Among 3,185 brands Source: CM Data Bank/CM 1 SOFTBANK MOBILE SOFTBANK MOBILE SOFTBANK MOBILE Research Center, monthly survey on 2 NTT DoCoMo NTT DoCoMo Shiseido 3,000 consumers’ 3 Coca-Cola (Japan) Meiji Seika NTT DoCoMo preference in CM 4 Shiseido SHARP KDDI By Brand 28 5 SUNTORY RECRUIT TOKYO GAS More Shops Number of 2,500 2,417 SoftBank Shops IncreasedIncreased byby 2,000 30%!30%! (Against April last year) 1,500 Display prevented due to protection of rights.