SoftBank's Digital Shift
SoftBank Corp.
August 4, 2020
0
Digitalization for Consumer Business
Conventional | ||
"New Normal" | ||
Face-to-face/Gathering type | Non-face-to-face/Remote type |
Stores
Promote store visits | Face-to-face contact | Reservations/hearings | Online contact |
Mass | Large scale on-site events | Live streaming events |
retailers |
1
Digitalization for Consumer Business
Digitalized customer acquisition events
to prevent spread of infection
Conventional
Large-scale gathering
type events
"New Normal"
Distributed live streaming type events
Crowded
Risk of infection
Main store
Avoid
crowded
situations
Staff
safetySmall
monitors
Small
number of customers
Event
cost efficiency
2
Digitalization for Consumer Business
Number of events
(Weekly average)
1,400
Distributed
live streaming
1,200
type events
1,000
800
600
400
200
0
Jun 2019 | Jun 2020 |
Successfully
maintaining contact
with customers
while preventing the spread of infection
(Note)
Duration: weekend average in June 2019, fourth weekend in June 2020 3 Data collected for SoftBank stores, Y!mobile stores and mass retailers
Digitalization for Enterprise Business
Conventional | ||
"New Normal" | ||
Visit/Face-to-face meeting | Non-face-to-face/Online |
On-site hearing | On-site negotiation | Email marketing | Online negotiation |
Webinar, etc. | |||
On-site support | Seal on contract | Remote configuration | Digital seal/signature |
(Note) Digital signature is available for some products | 4 |
Digitalization for Enterprise Business
Styles of biz discussions
Other
16%
June 2020
Online
84%
Online biz discussion
becoming "new normal"
Customers
Sales
SE
5
Digitalization for Enterprise Business
Total number of customer contacts
700,000 | 730k | DX has increased number of | |||
600,000 | customer contacts to by | ||||
500,000 | c. 3x | ||||
400,000 | |||||
300,000 | |||||
200,000 | 260k | ||||
100,000 | |||||
0 |
Jun 2019 | Jun 2020 | (Note) The number of customer contacts is the sum of the number of | |
emails delivered, the number of customers contacted through | 6 | ||
seminars/webinars, and the number of business meetings |
Digital Worker 4000 Project
Increasing productivity and shifting to
high value-added work
Promoting DX in work | Shifting to new workstyles |
AI
Customer care | Enterprise | Consumer |
RPA
BPR
Online
usage
Technology HR/GA/Finance
7
Earnings Results for the Three Months
Ended June 30, 2020
SoftBank Corp.
August 4, 2020
Disclaimer
Important Notice Regarding Forward Looking Statements and Other Information
This document is based on the information available to SoftBank Corp. ("we" or "the Company") as of the time hereof and assumptions which it believes are reasonable. Statements contained herein that are not historical facts, including, without limitation, our plans, forecasts, strategies and beliefs about our business and financial prospects, are forward-looking statements. Forward-looking statements often include the words such as "targets", "plans", "believes", "hopes", "continues", "expects", "aims", "intends", "will", "may", "should", "would", "could" "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof. These forward-looking statements do not represent any guarantee by us or our management of future performance or of any specific outcome are subject to various risks and uncertainties, including, without limitation, general economic conditions, conditions in the Japanese telecommunications market, our ability to adopt new technologies and business models, competition with other mobile telecommunications providers, our ability to improve and maintain our telecommunications network, our reliance on third parties in conducting our business, including SoftBank Group Corp. and its other subsidiaries and associates, our major vendors and suppliers, and other third parties, risks relating to M&A and other strategic transactions, risks relating to information security and handling of personally identifiable information, changes in the substance and interpretation of other laws and regulations and other important factors, which may cause actual results to differ materially from those expressed or implied in any forward-looking statement. The Company expressly disclaims any obligation or responsibility to update, revise or supplement any forward-looking statement in any document or generally to the extent allowed by law or stock exchange rule. Use of or reliance on the information in this material is at your own risk. Information regarding companies other than the Company and our subsidiaries and associates is quoted from public sources and others, and we have neither verified nor are we responsible for the accuracy of information. The information presented herein regarding certain joint ventures and collaborations of the Company, 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., the Company 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.
Important Notice Regarding Trading of SoftBank Corp. Common Stock and Unsponsored American Depository Receipts
The Company encourages anyone interested in trading in its common stock to do so on the Tokyo Stock Exchange. The Company's disclosures are not intended to facilitate trades in, and should not be relied on for decisions to trade, unsponsored American Depository Receipts ("ADRs") representing the shares of its common stock. The Company has not and does not participate in, support, encourage, or otherwise consent to the creation of any unsponsored ADR programs or the issuance or trading of any ADRs issued thereunder. The Company does not represent to any ADR holder, bank or depositary institution, nor should any such person or entity form the belief, that (i) the Company has any reporting obligations under the U.S. Securities Exchange Act of 1934 (the "Exchange Act") or (ii) the Company's website will contain on an ongoing basis all information necessary for the Company to maintain an exemption from registering its common stock under the Exchange Act pursuant to Rule 12g3-2(b) thereunder. To the maximum extent permitted by applicable law, the Company disclaims any responsibility or liability to ADR holders, banks, depositary institutions, or any other entities or individuals in connection with any unsponsored ADRs representing its common stock.
Consolidated Results
Q1 Fiscal Year 2020
10
Revenue | |||||
[JPY bn] | 1,164.9 | 1,172.6 | |||
12,000 | 1,101.0 | ||||
10,000 | Even with COVID-19 impact | ||||
8,000 | Increased | ||||
6,000 | total revenue | ||||
4,000 | |||||
2,000 | |||||
0 | (Notes) | ||||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 | Actuals for FY2018 have been adjusted retrospectively to have | ||
consolidated Z Holdings Corporation (formerly Yahoo Japan | |||||
Corporation, hereinafter "ZHD") from April 1, 2018 | 11 | ||||
"Yahoo" is used as the segment name when referring to ZHD business |
Revenue by Segment
[JPY bn] | 1,164.9 | 1,172.6 | |
Yahoo | 238.6 | 273.9 | |
Distribution/ | |||
113.7 | |||
110.8 | |||
Other, Adjustment | |||
Enterprise | 154.5 | ||
162.5 | |||
Consumer | 658.1 | 625.4 |
Despite decline of consumer
handset sales, etc.
Increased revenue
in Yahoo and
Enterprise
FY2019 Q1 | FY2020 Q1 |
12
Operating Income
[JPY bn] | 268.9 | 279.9 |
259.2 | ||
2,500 | ||
2,000 | ||
1,500 | ||
1,000 | ||
500 | ||
0 | ||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
Up 4%
13
Operating Income by Segment
[JPY bn] | 268.9 | 279.9 | |
Yahoo | 36.2 | 50.6 | |
Distribution | |||
5.3 | 5.5 | ||
Enterprise | 28.1 | ||
31.3 | |||
Consumer
205.7189.4
Other, | -6.5 | 3.2 | |
Adjustment | FY2020 Q1 | ||
FY2019 Q1 |
Yahoo and Enterprise
contributed to profit increase
14
Adjusted Free Cash Flow (excluding Z Holdings)
[JPY bn] | 236.3 |
Impact from
IFRS 16
2,000 | |||
159.0 | |||
1,500 | 136.2 | Impact from | |
IFRS 16 | |||
1,000 | 202.3 | ||
128.0 | |||
500 | |||
0 | |||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
Up 49%
(Note) Adjusted free cash flow = free cash flow ± total cash flows relating to non-recurring transactions with SoftBank Group Corp. + (proceeds
from the securitization of installment sales receivables - repayments 15 thereof) , excluding ZHD
Net Income
[JPY bn] | ||
161.4 | 164.8 | 152.1 |
1,600 | 99 | |
One-time | ||
1,400 | factors | |
(gains on sales and | ||
valuations, etc.) | ||
1,200 | ||
1,000 | ||
800 | 154.9 | |
600 | ||
400 | ||
200 | ||
0 | ||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
Excluding one-time factors
of last fiscal year
Flat
(Note) | 16 |
Net Income: net income attributable to owners of SoftBank Corp. |
Progress Toward Forecasts
[JPY] | Revenue |
Full year 4.9 tn | |
forecast16,000 |
14,000 | ||
12,000 | ||
10,000 | ||
8,000 | ||
6,000 | ||
Progress | 24% | |
4,000 | ||
Q1 | 2,000 | 1.2 tn |
Operating | Good progress | |
income | towards increased | |
920.0 bn | ||
Net income | revenue & profit | |
485.0 bn |
30% | 31% |
279.9 bn | |
152.1 bn | |
0
17
Business by Segment
18
Consumer: Revenue | ||||||
[JPY bn] | 635.3 | 658.1 | ||||
625.4 | ||||||
Sales of | 600.0 | 128.4 | ||||
goods | 147.0 | 97.4 | Despite decline of handset sales | |||
and others | ||||||
500.0 | 11.3 | 18.9 | Service revenues | |||
Electricity | 95.0 | 97.2 | ||||
Broadband | 87.8 | |||||
remained flat | ||||||
400.0 | ||||||
300.0 | ||||||
Mobile | 200.0 | 400.5 | 423.3 | 412.0 | ||
100.0 | ||||||
(Notes) | ||||||
0.0 | Service revenues: sum of Mobile revenue, Broadband revenue and | |||||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 | Electricity revenue | |||
From FY2020, Electricity, previously included in Revenues from sales of | ||||||
goods and others is presented separately and the breakdown of | 19 | |||||
revenue for FY2019 has been restated accordingly |
Consumer: Operating Income | ||||||
[JPY bn] | 205.7 | Full year profit | ||||
2,000 | 191.3 | 189.4 | expected to increase | |||
Declined in Q1 due to one-time factors | ||||||
1,500 | Good business | |||||
momentum | ||||||
1,000 | kept with continued growth in | |||||
smartphone and broadband subs | ||||||
500 | YoY change | -16.4 | ||||
Handset | Recording of reserve for | -12.0 | ||||
related | handset related expenses | |||||
Decrease in handset sales, etc. | ||||||
First-year/Half-yearAccounting | -10.0 | |||||
discounts | change, etc. | |||||
0 | ||||||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 | Other change than above | +5.6 |
20
Smartphone Cumulative Subscribers
[Mil] | 24.50 |
22.45
20.72
20.0018.89
2.04 mil
net adds
15.00
10.00
Up 9%
Net adds for all brands
5.00
0.00
FY2017 Q1 | FY18 Q1 | FY19 Q1 | FY20 Q1 |
(Note) Including enterprise subscribers 21
Broadband Cumulative Subscribers
[Mil] | 7.70 | 7.99 |
7.22
7
6.40
6
5
4
6.05 | 6.60 | |
3 | ||
5.26 |
24.01
1
0
FY2017 Q1 | FY18 Q1 | FY19 Q1 | FY20 Q1 |
SoftBank Hikari
Up 9%
(Note) "SoftBank Air" subscribers are included in "SoftBank Hikari" subscribers 22
Enterprise: Revenue
[JPY bn] | 162.5 | ||
154.5 | |||
160.0 | 147.8 | ||
Business140.0 | 37.5 | 43.4 | |
solution | 30.3 | ||
and | |||
others120.0 | |||
100.0 | 47.3 | ||
Fixed-line | 52.2 | 49.1 | |
80.0 | |||
60.0 | |||
40.0 | 71.9 | ||
Mobile | 65.2 | 67.8 | |
20.0 | |||
0.0 | |||
FY2018 Q1 | F2019 Q1 | FY2020 Q1 |
Up 5%
23
Enterprise: Operating Income
[JPY bn] | 31.3 | ||
300 | 28.1 | ||
250 | 23.9 | ||
200 | |||
150 | |||
100 | |||
50 | |||
0 | |||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
Demand for telework
drove growth
Up 11%
24
Enterprise: Surge in Telework Demand
Remote access to corporate system
Internet access via VPN *1
Web conference | Voice calls |
*2
New connected IDs | New connected IDs | New connected IDs |
2x | 48x | 3x | |||
FY2019 Q4 | FY2020 Q1 | FY2019 Q4 | FY2020 Q1 | FY2019 Q4 | FY2020 Q1 |
*1 A service that enables access to corporate system with security from PCs | *2 An enhanced voice communication service of Microsoft Teams | 25 |
and smart devices remotely | ||
Yahoo: Revenue | |||||
[JPY bn] | 273.9 | ||||
250 | 231.1 | 238.6 | |||
67.5 | |||||
72.6 | |||||
Media | 71.9 | ||||
200 | |||||
150
100 | 206.4 |
Commerce 159.2 | 166.0 |
/Other | |
50 |
0
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
Up 15%
(Note) Revenue for Commerce and Media is restated for FY2019 to
reflect the transfer of certain services and subsidiaries from26 Commerce to Media in April 2020
Yahoo: Operating Income | ||||
[JPY bn] | 50.6 | |||
500 | ||||
39.3 | Growth in Commerce | |||
400 | 36.2 | Up 40% | ||
300 | ||||
200 | ||||
ZOZO consolidation | +7.0 | |||
100 | EC usage increase | +7.0 | ||
Cost reduction effect | +3.0 | |||
0 | Ad placement decline | -3.0 | ||
FY2018 Q1 | FY2019 Q1 | FY2020 Q1 |
27
Yahoo: E-Commerce Transaction Value
[JPY bn] | 707.3 | |||
7,000 | ||||
6,000 | 536.7 | 584.0 | ||
5,000 | 483.6 | |||
4,000 | ||||
3,000 | ||||
2,000 | ||||
1,000 | ||||
0 | ||||
FY2017 Q1 | FY18 Q1 | FY19 Q1 | FY20 Q1 |
Up 21%
Due to ZOZO consolidation
PayPay Mall, etc.
28
PayPay: Cumulative Registered Users
[Mil]
30
20
10
Registered users
exceeded
30 mil
As of June 2020
0
Oct 2018 | Jun 2020 (Source) Data by PayPay Corporation, collected from October 5, 2018 to | |
June 30, 2020 | 29 | |
(Note) Number of registered users: number of accounts registered |
PayPay: Number of Payments | ||||||
[Mil] | 430 | |||||
400 | Number of payments | |||||
increased by | ||||||
300 | 9x | |||||
200 | ||||||
in one year | ||||||
100 | ||||||
50 | ||||||
0 | ||||||
FY2019 | FY2020 | |||||
Q1 | Q2 | Q3 | Q4 | Q1 | (Source) Data by PayPay Corporation | 30 |
(Note) Data is as of August 4, 2020 |
Consolidated Results
[JPY bn]
FY2019 | FY2020 | YoY | YoY % |
Q1 | Q1 | ||
Revenue
Operating
Income
Net Income
Adjusted
Free Cash Flow
1,164.9 1,172.6
268.9 279.9
164.8 152.1
159.0 236.3
+7.8 +1%
+11.1 +4%
-12.7-8%
+77.3 +49%
(Notes) | |
Net Income: net income attributable to owners of SoftBank Corp. | |
Adjusted free cash flow = free cash flow ± total cash flows relating to non-recurring transactions with SoftBank Group Corp. + (proceeds from the | 31 |
securitization of installment sales receivables - repayments thereof) , excluding ZHD |
Announced in May 2019
Target of JPY 1 Trillion
Operating Income
Road to Achieve JPY 1 Trillion Operating Income in FY2022
FY2022 Targets
[JPY]
Revenue 5.5 tn | Operating 1 tn | Net Income 530 bn |
Income | ||
5.5 tn |
4.7 tn | 4.9 tn 4.9 tn |
912 bn 920 bn
818 bn
1 tn
462 bn 473 bn 485 bn
530 bn
FY18 | FY19 | FY20 | FY22 | FY18 | FY19 | FY20 | FY22 | FY18 | FY19 | FY20 | FY22 |
Maximizing our corporate value by
driving two pillar strategies
5G | FinTech | RPA |
Growth | Structural | |
Strategy | Reform | |
IoT | E-Commerce | AI |
Growth Strategy Beyond Carrier
New
Business
Fields
Yahoo/LINE
Telecom
Business
Strategies for JPY 1 tn Operating Income
1
2
3
PayPay as a Platform
Smartphone Expansion and Enterprise DX
Cost Containment
4 Financing and Shareholder Returns
Smartphone Payment
PayPay Strengths
No. of users | No. of merchants | Recognition | App update |
30 mil | 2.3 mil | No. 1 | 60 times/year |
locations
PayPay pickup
service
COVID-19 alert
function
Link to My
Number Points
PayPay Platform Strategy
Financial Services
Unified PayPay brand
Revenue model establishment
Mobile
Boost of smartphone penetration Differentiation through PayPay
service
E-Commerce
Transition to PayPay Mall and
PayPay Flea Market
Reciprocal customer transfer
Financial Services
To unify existing financial services with PayPay brand
Existing services | After brand change | No. of users | |
30 mil | |||
Recognition No. 1 | |||
(Note) The change of company names is planned after the approval at the shareholders' meeting of each company and approval from the relevant government agencies.
Financial Services
PayPay as a gateway to connect numerous
financial services seamlessly
Insurance | |||||||||||||||||
Splitting | |||||||||||||||||
Investment/FX | |||||||||||||||||
Hotel | |||||||||||||||||
bills | |||||||||||||||||
Loan | |||||||||||||||||
Banking | Taxi | ||||||||||||||||
Public Utilities | |||||||||||||||||
Communi- | |||||||||||||||||
cation | E-Commerce | ||||||||||||||||
Card | |||||||||||||||||
Lending | Asset management |
Mobile
Mobile
PayPay differentiates our mobile services
from others
E-Commerce
Banking / Insurance
Payment
E-CommerceSavings
Asset management
Mobile | Payment | Investment |
PayPay Bonus
E-Commerce
PayPay captures more customers leading to
transaction value expansion
PayPay | E-Commerce |
Sending customers through
point rewards
/ Recognition improvement
Reciprocal
customer
transfer
No. of users
30 mil
Sending e-commerce users
/ Commission fees
Recognition No. 1
PayPay Platform Strategy
PayPay at core to pursue business synergies
Strengths as No. 1
No. of users
30 mil
No. of merchants
2.3 mil
locations
Recognition
No. 1
App update
60 times/year
Business Synergies
Financial services
Mobile
E-Commerce
Strategies for JPY 1 tn Operating Income
1
2
3
PayPay as a Platform
Smartphone Expansion and Enterprise DX
Cost Containment
4 Financing and Shareholder Returns
Growth | SoftBank Core Business Strategy |
Strategy | |
12
Smartphone Expansion | Enterprise Digitalization |
Smartphone cumulative subscribers
[Mil]
24.13
22.08
20.13
30 mil
Target
30 mil
smartphone
users
in FY2023
FY2017 | FY18 | FY19 | FY2023 |
[Target] |
(Note) Including enterprise subscribers
Target 30 mil smartphone users
Thoroughly reinforce our existing strategy
Multi-brand Strategy | Collaboration with | |||
Yahoo and PayPay | ||||
1 Strong acquisition | 1 | Trigger for new | ||
subscriptions |
Competitors | ||
Competitors | ||
2 Upgrade promotion | 3 Retention effect | 2 Retention effect |
Target 30 mil smartphone users
5G Deployment
March 2022
Population coverage 90%+
50,000
base stations
10,000
base stations
Mar 2021 | Mar 2022 |
Smartphone cumulative subscribers
[Mil] | 30 mil |
24.13
22.08
20.13
5G
smartphones
3G/4G
smartphones
FY2017 | FY18 | FY19 | FY2023 |
[Target] |
Target
60% 5G
smartphone users in FY2023
(Note) Including enterprise subscribers
Growth | SoftBank Core Business Strategy |
Strategy | |
12
Smartphone Expansion | Enterprise Digitalization |
Enterprise: Business solution and others revenue
[JPY]
169.2 bn
145.0 bn
128.9 bn
Business solution and
others revenue
double-digit
growth every year
FY2017 | FY18 | FY19 | FY2022 |
[Target] |
Double-digit growth for Business solutions
Leverage DX demand surge in "new normal"
Enterprise Digitalization | Industry Digitalization | |||||||
Providing more than 100 types of | Solving social issues with the power of | |||||||
digitalization solutions | AI, IoT, and 5G with partners | |||||||
Communication | Automation | Data utilization |
Online medical care Smart cities Smart distribution
Security
Growth Strategy Beyond Carrier
New
Business
Fields
Yahoo/LINE
Telecom
Business
Growth Strategy Beyond Carrier
Consumer | Enterprise |
Profit Target | Profit Target |
Profit increase | Double-digit profit |
every year | increase every year |
New
Business
Fields
Business Target | Business Target |
30 mil smartphone | Business solution and others |
users in year 2023 | Double-digit growth |
Yahoo/LINE |
Telecom
Business
Yahoo
Profit Target
Profit Operating income increase / ¥225 bn in FY2023
Business Target
First half of To achieve No. 1 in EC 2020s transaction value in Japan
Expansion of PayPay Mall /
PayPay Flea Market
Focus area of shopping | Focus area of reuse | |
Group Synergies | Customers from media |
business | |
ZOZO and ASKUL, etc. | Customer traffic from Yahoo! |
top page | |
New Business Fields
Profit Target
Reduce losses on equity
method investments
Business Target
Peak out loss on PayPay
PayPay to transition from expansion
period to stable growth
Expansion | |||
Stable | |||
period | growth | ||
Concentrated | Use case | ||
investment to | enhancement | ||
fund vertical | to establish | ||
build-up | stable growth |
Profit growth in other leading businesses
SB Payment, Cybereason, WeWork and OYO, etc.
Strategies for JPY 1 tn Operating Income
1
2
3
PayPay as a Platform
Smartphone Expansion and Enterprise DX
Cost Containment
4 Financing and Shareholder Returns
Structural
Reform
Cost Containment Strategy
12
Keep fixed costs flat | Cost efficiency through |
group synergies | |
Cost Strategy 1 Flat Fixed Costs
[JPY]
Fixed | |||
Yahoo | Depreciationcosts | ||
& amortization | (Excl. Yahoo | ||
segment | segment) | ||
Network | |||
Operating | related | ||
expenses | |||
expenses | Personnel | ||
expenses, |
c. 4 tn | etc. | |
commissions per year | ||
Sales | ||
and others | Cost of | |
goods sold |
Variable costs
(Excl. Yahoo segment)
Fixed Costs
(Excluding Yahoo)
c. 1tn /year
(Note) Operating expenses include cost of sales and selling, general and administrative expenses
Cost Strategy 1 Flat Fixed Costs
[JPY] | Reference | |||
SoftBank Consolidated | Business | 5.5 tn | ||
Revenue | growth | |||
4.9 tn
Excl. Yahoo | Cost | Cost | |
Fixed | increase | reduction | |
costs | associated through cost | ||
with growth | efficiency | ||
1 tn | +50 bn | -50 bn | 1 tn |
Flat
Thorough cost
management
Maximizing
operation efficiency
FY2019 | FY2022 |
Cost Strategy 1 Flat Fixed Costs
Target ¥50 bn cost reduction through 2 pillars
Productivity improvement and workstyle
reform through digitalization
- Digitization of mobile shop operations
Remoteリモート | Cashless |
customer | |
接客 | payment |
services |
AI
image recognition
2 Workstyle reform in "New Normal"
AI
voice
recognition and emotion
AIanalysis chat
support
Network efficiency and optimization
Optimization of equipment after termination
- of PHS, 3G, etc.
Downsize | Using | |
Smart | ||
power saving | ||
machines | meters |
2 Infrastructure sharing with KDDI
Mutual use
of equipment
in rural areasPromote 5G in Japan
Cost Strategy 2 Group Synergies
Seek further cost reduction through group synergies
Cost reduction through
joint procurement
Joint procurement
by SoftBank and Z Holdings
Network
equipment
Storage
equipment
Servers | Cost reduction of |
¥7.0 bn | |
Z Holdings | |
FY2019 Actual |
Cost reduction through in-house development
Actively leverage group resources
E.g.) In-house settlement services
Within our group | Within our group | |||||
Commerce services | Commerce services | |||||
Settlement fee | Sales | ||||
reduction | increase | ||||
Settlement services | Settlement services | ||||
Outside companies | |||||
Strategies for JPY 1 tn Operating Income
1
2
3
PayPay as a Platform
Smartphone Expansion and Enterprise DX
Cost Containment
4 Financing and Shareholder Returns
SoftBank Financial Strategy
1 | Generation of stable free cash flow | ||
2 | Improvement of | High and stable | |||||
financial leverage | 3 shareholder returns | ||||||
- Generation of Stable Free Cash Flow
[Free cash flow formula] [JPY bn]
Operating cash flow
Increase with
business growth
Ref)Adj. EBITDA | 1,630 | 1,700 | ||
FY18 | FY19 | FY20 | FY21 | FY22 |
CAPEX
Including 5G expansion, maintain at level of
400 bn
400 | 400 | 400 | ||
FY18 | FY19 | FY20 | FY21 | FY22 |
Investment in growth
M&A investments for future growth
Budget of
50~70 bn
50~70 | ||||
FY18 | FY19 | FY20 | FY21 | FY22 |
(Notes) Adjusted EBITDA = operating income + depreciation and amortization (including loss on disposal of non-current assets) ± other adjustments CAPEX: acceptance basis, excluding ZHD, rental mobile phones for enterprise customers, and impact from IFRS 16
- Generation of Stable Free Cash Flow
[Free cash flow formula] [JPY bn]
CAPEX
400
level Investments in Adj. FCF growth
50~70 670+
Impact from
IFRS 16
FCF from previous definition
550
Operating CF | CAPEX | Investment | Adj. FCF |
in Growth |
Adj. FCF
670+ bn
every year
(FY2019 Actual 644.7)
(Notes)
Adjusted free cash flow = free cash flow ± total cash flows relating to non-recurring transactions with SoftBank Group Corp. + (proceeds from the securitization of installment sales receivables - repayments thereof) , excluding ZHD
CAPEX: acceptance basis, excluding ZHD, rental mobile phones for enterprise customers, and impact from IFRS 16
- Generation of Stable Free Cash Flow
[Free cash flow formula] [JPY bn]
CAPEX
400
level Investments in Adj. FCF growth
50~70 670+
Impact from
IFRS 16
FCF from previous definition
550
Operating CF | CAPEX | Investment | Adj. FCF |
in Growth |
Use of Cash
Improvement of
-
financial leverage
High and stable - shareholder returns
(Notes)
Adjusted free cash flow = free cash flow ± total cash flows relating to non-recurring transactions with SoftBank Group Corp. + (proceeds from the securitization of installment sales receivables - repayments thereof) , excluding ZHD
CAPEX: acceptance basis, excluding ZHD, rental mobile phones for enterprise customers, and impact from IFRS 16
2 | Improvement of | 3 | High and stable |
financial leverage | shareholder returns | ||
Net Leverage Ratio | No dividend reduction every year / | ||
Improve from 2.4x | total shareholder return ratio of c. 85% | ||
(3-year weighted average)*1 | |||
DPS in JPY | 86+α | |||||
86 | Share | |||||
85 | ||||||
buyback | ||||||
2.4x | ||||||
2.7x | 75 | Dividend | ||||
2.4x | ||||||
2.3x | ||||||
Includes impact from adopting IFRS 16 | ||||||
Excludes impact from LINE TOB | ||||||
Excludes impact from adopting IFRS 16 | ||||||
FY17 END FY18 END FY19 END | FY22 END | FY18 | FY19 | FY20 | FY2022 | |
[Target] | [Forecast] | [Target] |
(Notes) Net Leverage Ratio=Net Interest-bearing debt / Adj. EBITDA *1 Total dividends and share buybacks for FY20-FY22 / total net income attributable to owners of SoftBank Corp. for FY20-FY22
Summary
To Achieve JPY 1 tn Operating Income
1
2
3
4
Enhance synergies centered on PayPay platform
Target 30 mil smartphones and double-digit business solutions revenue growth annually
Keep fixed costs flat by reducing JPY 50 bn telecom costs
Improve financial leverage and maintain total shareholder return ratio at c. 85%
FY2022 Targets
[JPY]
Revenue 5.5 tn | Operating 1 tn | Net Income 530 bn |
Income | ||
5.5 tn |
4.7 tn | 4.9 tn 4.9 tn |
912 bn 920 bn
818 bn
1 tn
462 bn 473 bn 485 bn
530 bn
FY18 | FY19 | FY20 | FY22 | FY18 | FY19 | FY20 | FY22 | FY18 | FY19 | FY20 | FY22 |
Corporate Philosophy
Information Revolution ─
Happiness for everyone
Attachments
- Original document
- Permalink
Disclaimer
SoftBank Group Corporation published this content on 04 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2020 08:02:07 UTC