Earnings Results for the Six Months Ended September 30, 2019
SoftBank Corp. November 5, 2019 Disclaimer
This presentation is based on information available at the time it was made. Statements in the presentation that are not historical facts including, without limitation, our plans, forecasts and strategies are forward-looking statements. Forward-looking statements are subject to various risks and uncertainties, including, without limitation, general economic conditions, general market conditions, customer demand for products and services, increased competition, inherent risks in international operations and other important factors, which may cause actual results to differ materially from those expressed or implied in any forward-looking statement.
Information regarding companies other than SoftBank Corp. and other companies within the group of SoftBank Corp. is quoted from public sources and others, and we have neither verified nor are we responsible for the accuracy of information. SoftBank Corp. expressly disclaims any obligation or responsibility to update, revise or supplement any forward-looking statement in any presentation material or generally to any extent. Use of or reliance on the information in this presentation is at your own risk.
The information presented in this section regarding certain joint ventures and collaborations of SoftBank Corp., Vision Fund and SoftBank Group Corp. portfolio companies and investments has been selected on a subjective basis, is provided solely for illustrative purposes and does not purport to be a complete listing of all such collaborations or joint ventures. SoftBank Group Corp., SoftBank Corp. and the Vision Fund each have different strategies and objectives with respect to their investments and portfolio company operations. There is no guarantee that any joint venture will be consummated on the terms expressed herein or at all, or that the joint venture will be successful. All such plans are subject to uncertainties and risks, as well as investor consents and regulatory approvals, as applicable. References to such portfolio companies and investments should not be a recommendation of any particular investment. Revenue [JPY bn] 2,373.1 2,238.4 Yahoo Japan impact 20,000 1,794.4 444.0
15,000 Up 32%
10,000 (Post Yahoo adj, Up 6%)
5,000
(Note) 0 Actuals for FY2018 have been restated retrospectively to have consolidated Yahoo Japan Corporation from April 1, 2018. (On October 1, 2019, Yahoo Japan Corporation FY2018H1 FY2018H1 FY2019H1 transitioned to a holding company structure through a company split (absorption-type company split) and changed its trade name to Z Holdings Corporation. For convenience, (Prior to adj) (Post adj) Yahoo Japan is used within this materials) 2 Revenue [JPY bn] 2,373.1 2,238.4 477.8 Yahoo, others 2000.0 456.1
245.1 191.6 Distribution
1500.0 301.6 314.1 Enterprise Increased
1000.0 across all segments
1289.0 1336.0 Consumer
500.0
0.0 FY2018H1 FY2019H1 (Note) Actuals for FY2018 have been adjusted retrospectively to have consolidated (Post adj) Yahoo Japan Corporation from April 1, 2018 3 Revenue [JPY bn] 2,373.1 Non Consumer Mobile
Consumer Diversified sources 20,000 Mobile 1,794.4 1,686.9 of revenue 36%
15,000
45% Yahoo 47% Japan Other
10,000 (Non Consumer Mobile)
5,000 64% 53% 55%
0
FY2017H117年度… 18FY2018H1年度上期 19FY2019H1年度上期
(Prior to adj) (Note) Consumer Mobile refers to mobile business in the Consumer business segment 4 Operating Income [JPY bn] 552.0 518.2
5,000 Yahoo Japan impact 443.3 74.9 4,000 Up 25%
3,000 (Post Yahoo adj, Up 7%)
2,000
1,000
0 FY2018H1 FY2018H1 FY2019H1 (Note) Actuals for FY2018 have been adjusted retrospectively to have consolidated (Prior to adj) (Post adj) Yahoo Japan Corporation from April 1, 2018 5 Net Income [JPY bn] 314.6 327.4
3,000 294.7 Yahoo Japan impact
2,500 19.9
2,000 Up 11%
1,500 (Post Yahoo adj, Up 4%)
1,000
500
0
(Notes) FY2018H1 FY2018H1 FY2019H1 Net Income: net income attributable to owners of SoftBank Corp. Actuals for FY2018 have been adjusted retrospectively to have consolidated Yahoo (Prior to adj) (Post adj) Japan Corporation from April 1, 2018 6 Consolidated Results [JPY bn] FY2018 FY2018 FY2019 YoY YoY % H1 H1 H1 (Prior to adj) (Post adj) (Post adj) (Post adj)
Revenue 1,794.4 2,238.4 2,373.1 +134.7 +6%
Operating 443.3 518.2 552.0 +33.8 +7% Income
Net Income 294.7 314.6 327.4 +12.8 +4%
(Note) Actuals for FY2018 have been adjusted retrospectively to have consolidated Yahoo Japan Corporation from April 1, 2018 7 FY2019 Profit Progress Toward Forecast [JPY bn] 1,200.0 62％ Progress
1,000.0
Full Year800.0 890.0 68％ Forecast Good progress 600.0 to annual forecast H1 552.0 400.0 480.0
200.0 327.4
0.0 Operating Income Net Income
(Note) Full year forecast was announced on May 8, 2019 8 SoftBank Growth Strategy New Businesses
AI / Technologies Beyond Carrier Cutting-edge business models
Yahoo Japan
Telecom Business
Broadband subscriber growth New infrastructure Smartphone subscriber growth 99 Telecom Business
10 Consumer: Revenue [JPY bn] 1,289.0 1,336.0
1200.0 Sales of goods 297.4 308.0 and others
1000.0 190.5 Broadband 175.7 800.0 Up 4%
600.0 Mobile and Broadband drove the growth
400.0 805.3 848.2 Mobile
200.0
0.0 FY2018H1 FY2019H1 11 Smartphone Cumulative Subscribers [Mil] 23.03 21.09
20.00
15.00 Up 9%
10.00 (1.94 mil increase)
5.00
0.00 FY2016Q2 FY2017Q2 FY2018Q2 FY2019Q2
(Note) Including enterprise subscribers 12 Comply with amended Telecommunication Business Act
Effective from October 1, 2019
No fixed-term for contracts No cancellation fee
In addition to unbundle Unbundled Already Unbundled Price reduction in place ＋ Plans* Plans* Higher data since Sep 2018 in Oct 2019 capacity
*Unbundled plans: price plans that separate service fees and handset payments 13 50GB+ data plan
Unbundled Plans already in place Since September 2018
14 Comparison of Large Capacity Data Plans （Prices for first year enrollment) Remain competitive even after other players reduced prices
JPY6,380
JPY5,480 JPY5,480 JPY5,380 JPY5,380 JPY5,380 JPY4,980 JPY4,980 JPY4,480 JPY4,480 JPY3,980 JPY3,480
SoftBank A B SoftBank A B SoftBank A B SoftBank A B One Three Three Four person people people people
(Notes) As of November 1, comparison of first year price plans from each company’s web site (annual amount divided by 12 months). Comparison of 30GB date plan by company A, unlimited data plan + video services by company B, and Ultra Giga monster + by SoftBank. 15 October 2019 Unbundled Plans introduced
16 Y!Mobile New Plans
Price Reduction Capacity Increase
Smartphone Basic Plan S Plans Monthly data capacity Monthly fee after 14 months Smartphone basicplans S 2GB 3GB
Max M 12% 6GB 9GB DOWN R 14GB
(Note) Price reduction refers to the comparison of “Smartphone Basic Plan S” (previous “Smartphone Plan S”) after Home Broadband bundle discount 17 Customer Satisfaction for Prices
Ultra Giga Monster Plus (50GB+) plan All smartphone price plans All smartphone price plans
Satisfied Satisfied Satisfied 96％ 94％ 94％
Question: At what level are you satisfied with the current pricing?
(Note) Survey by the Company in September 2019. Survey for customer satisfaction (SoftBank: n=900, Y!mobile: n=900, LINE MOBILE: n=1,700) 18 Broadband Cumulative Subscribers [Mil] 7.76 7.38
7.00
6.00
5.00
4.00
3.00 6.16 5.50
2.00 Up 12%
1.00
0.00 FY2016Q2 FY2017Q2 FY2018Q2 FY2019Q2
(Note) “SoftBank Air” subscribers are included in “SoftBank Hikari” subscribers 19 Enterprise: Revenue [JPY bn] 301.6 314.1
300.0
78.4 Business solution 65.0 and others
250.0
200.0 105.9 97.6 Fixed-line Up 4%
150.0 Business solution drove the growth
100.0
130.7 138.1 Mobile
50.0
0.0 FY2018H1 FY2019H1 20 Enterprise: Revenue of Business Solution and Others [JPY bn] 78.4
70.0 65.0
60.0
50.0 Up 21%
40.0
RPA
30.0 Robot Network IoT
20.0 Cloud
10.0 Digital Marketing AI
0.0 Security FY2018H1 FY2019H1 21 Centimeter Level Positioning Service
Service image
GNSS Satellite High precision
3,300 Deviation location information locations few cm nationwide Projects in progress with c.100 companies
Positioning info Detection data
Correction info transmission SoftBank proprietary Position correction User reference point distribution server (Note) GNSS（Global Navigation Satellite System）refers to all kinds of satellite systems, such as QZSS (Quasi-zenith satellite system), GPS, GLONASS, Galileo and others 22 Centimeter Level Positioning Service
Demonstration experiment with Yanmar Agri
Automatic operation of agricultural machinery with accurate position information support
Deviation No unplowed field missing 0.89cm
(Note) Position deviation: measured when agricultural machinery is in stationary. 23 Drone Inspection Service
Nationwide infrastructure inspection application Plan to install centimeter level positioning service
Service started Power lines Bridges Railways November 1
Detecting abnormalities with drone aerial photography
Power plans Construction site Arena
Bolt Tree Cracks damages fallings
24
5G Pre-services
5G Antenna International Basketball Games Providing 5G Pre-service
VR camera 5G service installed under hoop coverage on-site 26 We would like to express our heartfelt condolences to everyone who has suffered from the typhoon.
27 SoftBank Disaster Response Activities
28 Network Response Plans for Disasters
1 2 3
Strengthen nationwide Action plans for base Various solutions for network centers station power outrage recovery
Important sites in operation for more than Action plans prepared for power outage Mobile base station vehicles / Power supply 48 hours during power outrage of more than 24 hours vehicles / Tank trucks / Portable base stations / Fuel storage in major regions nationwide Satellite antennas / Balloons
Regular drills with Self-Defense Forces, Japan Coast Guard and local governments 29 Disaster Response: Recovery Activities
Typhoon No. 19 (Hagibis) Recovery Activities
Prompt response center setup Wide area support All effort recovery
Including partners Established mitigation Support * headquarter 2 days before resources 10,000 staff in action Typhoon No.19 came dispatched from 6 areas outside of typhoon areas
Dispatched one day before Typhoon No.19 came
* Nominalized number of staff in action per day during October 10~31, 2019 30 Disaster Response: Rescue Support Activities
Typhoon No. 19 (Hagibis) Support Activities
Free charge service Free Wi-Fi service Support measures
For customers in the areas that Disaster Relief Free charge services in Using common SSID Law applies to SoftBank and Y!mobile shops “00000JAPAN” free in all ・Waive charges for additional data in disaster regions disaster-hit areas purchase ・Extend the payment due date ・ Applicable areas: Reduce or waive the cost of All areas in prefecture handset repair and loss Miyagi, Fukushima, Ibaraki, Gunma, Saitama, Chiba, Tokyo, Kanagawa, Niigata, Yamanashi, and Shizuoka
(Note) There are photos from shelter in Igi-gun, Miyagi (left) and AEON mall in Kisarazu (right)
(Note) Refer to our website for the detailed support activities 31 SoftBank will continue to strengthen disaster response efforts as a telecommunications carrier responsible for social infrastructure
32 33 Yahoo: Revenue [JPY bn] 463.8 484.1
450.0
400.0 147.3 Media 146.6
350.0
300.0
250.0 Up 4%
200.0 336.8 Commerce and Other 150.0 317.2
100.0
50.0
0.0 FY2018H1 FY2019H1 34 Yahoo! JAPAN Monthly Logged-in User IDs Media [Mil] 50.49
50.00 45.87
40.00
30.00 Up 10%
20.00
10.00
0.00 FY2016Q2 FY2017Q2 FY2018Q2 FY2019Q2 (Source) Yahoo Japan Earnings Results Presentation Materials, dated November 1, (Note) Number of Yahoo! JAPAN IDs logged in each month at the end of the quarter. 2019 35 Yahoo Segment: Strengthen Enterprise Sales
Transferred Dispatched Integrated team formed Yahoo Service Promotion Dept. within SoftBank Enterprise Division
Planning Marketing Data Consulting
36 Yahoo Segment: Strengthen Enterprise Sales
Total solution for enterprise customers
Integrated Analysis Effort & Data Marketing management & Forecast Measurement Yahoo CM Advertisement etc.
Media products promotion strengthened via SoftBank’s total solution to IoT enterprise customers
Marketing consultant Retails
37 E-commerce Transaction Value Commerce [JPY bn] 604.7
600.0 540.0
500.0 400.0 Up 12% 300.0
200.0
100.0
0.0 FY2016Q2 FY2017Q2 FY2018Q2 FY2019Q2 (Source) Yahoo Japan Earnings Results Presentation Materials dated November 1, 2019 38 PayPay: New E-commerce Services
Premium shopping mall Good-deal flea market app
Mall Flea Market
Higher rank of Good deals either shopping experience sell or buy via via selected stores PayPay
(Note) PayPay Mall and PayPay Flea Market are Yahoo services. PayPay is a trademark owned by Yahoo. 39 Cross Company E-commerce Projects
Japan PayPayPay Project Yahoo PayPay SoftBank
Mall Government PayPay consumer return customer return
Max. 20% equivalent return Total Mobile subscribers gain “10 B Yen Giveaway Campaign” additional values PayPay Flea Market and Yahoo! Shopping 10% return! various campaigns on-going
Active deployment of e-commerce across three organizations
(Note) Refer to relevant website for each campaign details 40 Yahoo aims to make ZOZO a consolidated subsidiary Tender Offer in Progress
(Note) On September 12, Yahoo Japan announced to start a Tender Offer for ZOZO, aiming to consolidate ZOZO. The tender offer is in progress 41 E-commerce Transaction Value (sales of goods) Commerce [JPY Tri]
Target first half of 2020s No.1 2.2 0.3 in Japan
1.9
FY2018 FY2019 (Combined) (Consolidated) (Note) Yahoo Japan announcement materials dated September 12, 2019 42 Growth in New Businesses
43 Smartphone Payment Service PayPay
44 PayPay: Cumulative Registered Users [Mil]
Government Consumer 1,50015.00 Return* + Convenient Anytime PayPay Anywhere Exciting PayPay nd 1,00010.00 2 19.0 mil JPY10bn campaign JPY10bn 13 months since launch Give out campaign 5500.00
0 * Government Consumer Return refers to the Point Reward Project for Consumers using Cashless Payment, initiated Oct2018 2018年10月 Nov 2019 by the Ministry of Economy, Trade and Industry, which is a subsidy program for small and medium-sized enterprises and micro enterprises that wish to issue point rewards for consumers using cashless payment. This project aims to level demand after the consumption tax rate hike on October 1, 2019. (Source) Data by PayPay Corporation, collected from October 5, 2018 to November 5, 2019, including registrations from PayPay app and via Yahoo! JAPAN app 45 PayPay: Number of Transactions per Month [Mil] 85.0 Daily usage Steep rise 5,00050.0 42.0
Government PayPay Consumer Customer Return Return Total
0 10% Return! Jan 2019 Oct 2019
(Source) Data by PayPay Corporation 46 QR Code Payment Service Intention of Use Survey
30
25 Intention of Use 20
15 Far ahead
10 A B5 C D 0 Jan 2019 Oct 2019
(Source) Survey by PayPay Corporation. A, B, C and D are other companies who provide QR code payment services. 47 Recognition Survey: Daily Payment Method Preference 50%
Cashless payment 36%
30% 28% Intention of use for cashless 23% 21% increased Cash payment 17%
0% (Source) Research by our company Period and sample: August 2-8 (n=3,353), September 6-12 (n＝3,594), October: 4-7 (n＝ August 2019 September October 2,044). Question “As payment for daily shopping, which method do you like better”, and answers “I like to use cashless as much as possible” and “I like to use cash as much as possible” were given. 48 Recognition Survey: Cashless Payment Preference
45% 41%
40%
35% 31%
30%
25%
20% No.1
15% 10% excluding credit card 10% 9% 8% 7%
5%
0% Credit card PayPay Transportation QR-code Commerce Commerce e-Money settlement e-Money e-Money (Source) Survey by our company (Total) Sample: October 4-7, 2019 n＝2,044 (15~59 year old male and female) A B C D Method: To answer the “For everyday shopping and other transaction, when you use cashless method, what are the names of the services come to your mind”, the Cashless payment services other than credit card respondents can chose multiple answers or write names not in choices. Ratio is the % of the times of the name answered over total number of answers. (Service name varies) (Note) Credit card includes all kinds of credit card services such as VISA and JCB 49 Realizing new functions continuously
Utility bill payments Cash withdrawal
PayPay can be used to pay bills for Withdrawal from PayPay to bank account electricity, gas, water, tax and etc. is possible with the registration for fund transfer business license completed
Cash withdrawal from PayPay balance Scan barcode from invoice using the app PayPay Money now available 50 Evolution to “Super App” from a payment app
Off-line Utility bills/Tax On-line/O2O
Convenience Barber shop EC Movie store reservation Utilities Tax Phone bill Orders/ Taxi Retail store Food stand Booking
Hotel Ticket Pharmacy Restaurant
Flight tickets
Financial Services P2P/Social
Postpay Gold Pocket Pleading money for tip
Loan Investment Gift Celebration
Household Insurance Donation Splitting bill management
(Note) Items in Red have been realized as of October 2019 51 Community Promoted Workspace WeWork
The information contained herein is provided for illustrative purposes only. The information presented here was provided by WeWork. Nothing herein should be construed as a recommendation of any investment or security. (Photo credits) WeWork 52 WeWork Memberships in Japan [Memberships] 17,000
10,000 17,000 1 year and 7 months since launch in February 2018
0 0 Mar Jun Sep Dec Mar Jun Sep (Source) Provided by WeWork Japan 2018 2019 (Note) Memberships at the beginning of each month The information herein is provided for illustrative purposes only and is based on WeWork's data. There can be no assurances that historical trends will continue throughout the life of the Vision Fund. Nothing herein should be construed as a recommendation of any investment or security. The metrics regarding select 53 aspects of the company's operations were selected by SBIA on a subjective basis. Such metrics are provided solely for illustrative purposes to demonstrate elements of the company's business, are incomplete, and are not necessarily indicative of the company's performance or overall operations. WeWork Japan Locations
Osaka Roppongi Yokohama Kamiyacho (Midosuji)
Marunouchi Kyobashi Yotsuya Nihonbashi Expanding
Osaka Ginza Jimbocho Toranomon (Namba) nationwide
Fukuoka Hyogo 23 locations in 6 cities Shimbashi Nogizaka (Nakasu) (Sannomiya (As of November 2019) Fukuoka Osaka Hibiya Nagoya (Daimyo) (Umeda)
NEW Jingumae Ikebukuro Hanzomon
(Source) Provided by WeWork Japan 54 AI Taxi-hailing Platform DiDi
The information contained herein is provided for illustrative purposes only. The information presented here was provided DiDi. Nothing herein should be construed as a recommendation of any investment or security. 55 DiDi: Taxi-hailing App Comparison
Taxi-hailing app Number of downloads per month No.1 Number of downloads
No.2 No.1
No.3 for 3 consecutive months
No.4
Jan Feb Mar Apr May Jun Jul Aug Sep 2019
(Source) App Annie from January 1 to September 30, 2019 (Note) Comparison of monthly number of downloads among open platform for taxi- hailing apps. 56 DiDi: Number of Contracted Companies [Number of companies] 333
300
250
200 X18
150 13 months since launch
100
50
0 Sep 2018 Oct 2019 (Source) Provided by DiDi Mobility Japan (Note) Number of contracted companies 57 DiDi: Service Area Expansion Target
Expand to 16 cities (As of Oct 2019) 20 cities in 2019
(Source) Provided by DiDi Mobility Japan The information contained herein is provided for illustrative purposes only. The information presented here was provided DiDi. Nothing herein should be construed as a recommendation of any investment or security. 58 DiDi Seamless use of taxi-hailing app by Chinese visitors
Seamless
Seamless support for vistors from Mexico, Australia, etc.
The information contained herein is provided for illustrative purposes only. The information presented here was provided DiDi. Nothing herein should be construed as a recommendation of any investment or security. 59 Innovative Hotel Service OYO Hotels
The information contained herein is provided for illustrative purposes only. The information presented here was provided OYO. Nothing herein should be construed as a recommendation of any investment or security. 60 OYO Hotels Japan: Number of Rooms in Japan [Number of rooms] 5,200
5,000
4,000 Guest room
3,000 5,200+
2,000 Opened in 39 prefectures in Japan in only 7 months
1,000
0 Apr May Jun Jul Aug Sep Oct (Source) Provided by OYO Hotels Japan (Note) Hotel rooms opened under OYO brand as of October 31, 2019 61 OYO Hotels Japan: Average Occupancy
100% 84% 80% Average occupancy
60% 80％+ 40% 42% 3 months after OYO brand
20%
0% (Source) Provided by OYO Hotels Japan OYOBefore加盟前 OYO AfterOYO OYO加盟後 brand (Note) Sample: c 400 rooms opened in May 2019 brand Before OYO brand: occupation rate before reformed as OYO brand 11stか月目month 22ndか月目month 33rdか月目month 4thか月目month After OYO brand: average occupancy from May to August 2019 after open with OYO brand 62 OYO Hotels Japan In addition to OYO app Booking from various online sites
Others
(Note) The photos are image 63 Accelerating the collaboration with partners inside and outside of Japan in various areas Collaboration with SoftBank Vision Fund Investees Collaboration with Other Partners
JV JV JV JV JV
JV JV JV JV JV
Collabo Collabo JV Invest Invest ration ration ment ment
Collabor Collabor Collabor Invest Collabor ation ation ation ment ation ・・・・・
The investments presented herein are solely for illustrative purposes, have been selected in order to demonstrate examples of Fund investments, and do not purport to be a complete list thereof. References to investments included herein should not be construed as a recommendation of any particular investment or security. It should not be assumed that investments made in the future will be comparable in quality or performance to the investments described herein. 64 SoftBank Growth Strategy New Businesses
AI / Technologies Beyond Carrier Cutting-edge business models
Yahoo Japan
Telecom Business
Broadband subscriber growth New infrastructure Smartphone subscriber growth 6565 Information Revolution — Happiness for everyone