softbank corp. investor briefing earnings results …...7 operating income for q2 fy19 increased by...

1

Earnings Results for the Six Months Ended September 30, 2019

Investor Briefing

SoftBank Corp.

November 6, 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.

(Definitions of numbers on this presentation)

For the definitions of numbers on this presentation, please refer to SoftBank Corp.’s data sheet.

2

3

161.4 164.8

153.2 162.6

148 153

462.5 480.0

+12.8314.6 327.4

Progress 68%

+4.1%

0%

20%

40%

60%

80%

100%

120%

0

FY18 FY19

259.2 268.9

259.0 283.1

300 338

818.2 890.0

+33.8518.2 552.0

Progress 62%

+6.5%

0%

20%

40%

60%

80%

100%

120%

0

200

400

600

800

1,000

1,200

1,400

FY18 FY19

1,101.0 1,164.9

1,137.4 1,208.2

2,418 2,427

4,656.8 4,800.0

+134.7

2,238.4 2,373.1

Progress 49%

+6.0%

0%

20%

40%

60%

80%

100%

120%

0

2,000

4,000

FY18 FY19

Revenue Operating Income

Results for H1 FY2019

Net Income*

Q1

[JPY bn] [JPY bn] [JPY bn]

FY Forecast

FY Forecast

FY Forecast

◼ Revenue and income increased YoY, and progressing at a steady pace towards

full-year forecasts

Q2

FY18: after retrospective

adjustments of Yahoo

Japan consolidation

H1

FY

*Net income: net income attributable to Owners of the Company (same hereafter)

4

1,289.0 1,336.0

301.6 314.1

191.6 245.1

463.8 484.1

41.4 48.2

-49.0 -54.5

2,238.42,373.1

+3.6%

+4.1%

+27.9%

+16.4% +6.0%

+47.0

+12.5

+53.5

+6.8

+134.7

+4.4% +20.4

-200

300

800

1,300

1,800

2,300

FY18H1 FY19H1

◼ Revenue increased in all segments. JPY +134.7 bn (+6.0%) YoY

◼ Consumer segment: JPY +47.0 bn due to growth in Mobile and Broadband

By Segment Consumer Breakdown

805.3 848.2

175.7 190.5

308.0 297.4

1,289.0 1,336.0

+5.3%

+8.4%

-3.4%

+3.6%

+42.9

+14.7

-10.6

+47.0

-200

300

800

1,300

1,800

2,300

FY18H1 FY19H1

Revenue (1/2)

Distribution

Enterprise

Consumer

Other

Revenue from sales of goods

and others

Broadband

Mobile

Adjustments

[JPY bn] [JPY bn]YoY

YoY

Yahoo



Japan consolidation

5

314.3 334.3

146.6147.3

2.92.5

+6.4%

+0.5%

+20.0

+0.7

463.8484.1

+20.4 +4.4%

-14.4%-0.4

0

100

200

300

400

500

600

FY18H1 FY19H1

130.7 138.1

105.9 97.6

65.0 78.4

301.6 314.1

+5.7%

+20.6%

+4.1%

+7.5

+13.4

+12.5

-7.9%-8.3

0

FY18H1 FY19H1

◼ Enterprise segment: JPY +13.4 bn (+20.6%) in Business solution and others

◼ Yahoo segment: JPY +20.0 bn (+6.4%) in Commerce

Enterprise Breakdown Yahoo Breakdown

Revenue (2/2)

Business solutionand others

Fixed-line

Mobile

Media

YoY

YoY

Commerce

Other



Japan consolidation

[JPY bn] [JPY bn]

6

518.2552.0+6.5%

+33.8

+13.5%

+104.0

767.9

871.9

0

FY18H1 FY19H1

383.5 401.6

50.7 54.68.4 11.078.075.7

-1.0

8.5 518.2552.0

+18.1

+3.9+2.6

+9.5

+33.8

+4.7%

+7.6%

+31.0%

+6.5%

-2.3

-10

FY18H1 FY19H1

◼ Adjusted EBITDA increased by JPY +104.0 bn (+13.5％) YoY. Adjusted EBITDA excluding impact

from IFRS 16 increased by JPY +31.2 bn

◼ Operating income increased by JPY +33.8 bn (+6.5%) YoY. Consumer contributed JPY +18.1 bn (+4.7%)

Operating Income/Adjusted EBITDA*1 Segment Income*2

Operating Income/Adjusted EBITDA/Segment Income

Operating Income

Adjusted EBITDA

Distribution

Enterprise

Consumer

Other

YoY

Yahoo

Other



Japan consolidation

[JPY bn] [JPY bn]

*1: Adjusted EBITDA＝operating income＋depreciation and amortization

(including loss on disposal of non-current assets) ±other adjustments*2: Inter-segment adjustments was -1.5 bn for H1 FY18 and 0.6 bn for H1 FY19

-3.0%

7

◼ Operating income for Q2 FY19 increased by JPY +24.1 bn (+9.3%) YoY

*4: On October 1, 2019, Yahoo Japan Corporation transitioned to a holding

company structure through a company split (absorption-type company

split) and changed its trade name to Z Holdings Corporation

*5: Above are figures disclosed by Yahoo Japan Corporation, and thus

differ from those of the Company’s Yahoo segment

192.2 195.9

26.8 26.54.4 5.7

38.7 39.5

-2.8

15.6 259.0

283.1

+3.6

-0.4

+1.3

+18.5

+24.1

+1.9%

+29.8%

+9.3%

+0.8 +2.1%

-10

FY18Q2 FY19Q2

42.8

35.5 39.5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

YoY

Yahoo Japan

consolidation

Income in Q2 FY19 increased YoY for the

first time in 7 quarters

Full-year income for FY19 expected to

increase YoY for the first time in 3 years

Yahoo Japan operating income

23.3

3.5 +3.1

26.8 26.5+13.4%

FY18Q2 FY19Q2

Other

business

factors

Temporary

factor*3

+4.0

*3: Temporary decline in costs due to the recording of a reversal

related to an allowance for losses on orders received

associated with the expiration of a large contract related to

network construction in the previous fiscal year

Distribution

Enterprise

Consumer

Other

Yahoo

Other

YoY

*1: Inter-segment adjustments was -0.3 bn for Q2 FY18 and

-0.1 bn for Q2 FY19

*2: The increase in Other was mainly attributable to the recording

of a gain of 11.9 bn on loss of control due to the reclassification

of Cybereason Japan Corp. from the Company’s subsidiary to

an equity method affiliate

Other includes temporary factors*2

Quarterly Segment Income (Q2)FY18: after retrospective


Japan consolidation

Enterprise Segment Income Yahoo Japan*4 Operating Income*5Segment Income*1

[JPY bn] [JPY bn][JPY bn]

Income excluding temporary factors in

the previous fiscal year increased YoY

8

518.2 552.0

+114.4+59.2

-53.5 -0.5 -15.5

-68.0 -2.3

Excluding IFRS 16 impact -3.7

Operating Income (YoY Comparison)

FY18H1

[JPY bn]

FY19H1

Excluding IFRS 16 impact -6.7

*Sales to external customers

(b)

Revenue - Cost of goods sold and

Telecom network charges

+60.4

Expenses

-24.3

Consumer +46.5 (of which, sales of goods -10.6)

Enterprise +11.0

Distribution +51.8

Other +5.0

◼ Revenue increased in all segments. After deduction of Cost of goods sold and Telecommunication

network charges, gross profit increased by JPY +60.4 bn YoY (a)

◼ Expenses increased by JPY 24.3 bn YoY (b) due to vigorous sales promotions, subsidiaries, and business expansion

+33.8 bn

Cost of goods

soldRevenue*

Outsourced

service fees

etc.

Decrease in

Yahoo

segment profit

Depreciation

and

amortization

Telecom

network

charges

Sales

commissions

and sales

promotion

expenses

(a) (c)



Japan consolidation

9

◼ Cumulative main subscribers reached 35.56 mil (+1.61 mil YoY), smartphones contributed to the increase substantially

◼ Cumulative smartphones reached 23.03 mil (+1.94 mil YoY), steady growth in all 3 brands

21.09 22.45 23.03

12.86 12.56 12.53

33.95 35.01 35.56

0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

Cumulative Subscribers*1 Smartphone Subscribers

21.09 22.45 23.03

0Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

*1: Cumulative subscribers include Wireless Home Phone subscribers (H1 FY18: 0.70 mil, H1 FY19: 0.99 mil)

*2: Feature phones, tablets, mobile data communications devices, Wireless Home Phones, etc.

Cumulative Subscribers (Main Subscribers/Smartphones)

Main Subscribers

Smartphones

Other*2

[Mil]YoY

-0.33

+1.61

+1.94

[Mil]

10

0.93%1.03%

0.98%

0.68%

0.81%0.74%

0.00

0.00

0.00

0.01

0.01

0.01

0.01

0.01

0.02

0.02

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

◼ Smartphones: churn rate increased due to increase in liquidity and increase in composition ratio of

Y!mobile subscribers

Churn Rate (Main Subscribers/Smartphones)

+0.04%

+0.07%

Main subscribers

Smartphones

11

◼ ARPU before discount decreased due to the introduction of plans that separate handset payment and service fees, as

well as a rise in composition ratio of Y!mobile and LINE MOBILE subscribers (a)

◼ Total ARPU rose by JPY 120 YoY in Q2 due to a decrease in impact from Monthly Discounts after the introduction of

plans that separate handset payment and service fees, and 4-year installments (c)

5,450 5,250 5,190

-1,120 -800 -740

4,330 4,450 4,450

-1,500

500

2,500

4,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

ARPU (Main Subscribers)

*Revenue deductions relating to reward points and programs supporting handset payments are not included in calculation of ARPU

YoY

ARPU before discount

Total ARPU (after discount)

Discount ARPU(b)

(a)

(c)

+380

-260

+120

(c) = (a) + (b)

[JPY]

12

5.506.05 6.16

1.891.65 1.59

7.387.70 7.76

0.00

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

◼ SoftBank Hikari cumulative subscribers were 6.16 mil as of Q2, steadily increased by 0.67 mil YoY

◼ Home Bundle Discount Hikari Set applications to mobile subscribers increased to 9.84 mil

Cumulative Subscribers

(Number of Connected Lines)

Home Bundle Discount Hikari Set

Cumulative Subscribers

4.20 4.53 4.61

8.82

9.64 9.84

0.00

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY17 FY18 FY19

Broadband Service

*1: SoftBank Hikari includes SoftBank Air

×2.1*2

+1.02

+0.41

+0.37

*1

+0.67

YoY

-0.29

YoY

*2: Number of mobile lines under bundled discount per SoftBank Hikari line

Mobile

Broadband

Other

[Mil][Mil]

13

314.6 327.4

+33.8+2.9

+5.0+5.5

-15.9 -18.5

0

FY18H1 FY19H1

Net Income (YoY Comparison)

[JPY bn]

+12.8 bn

(Reference) Income taxes paid

FY18H1: 121.4

FY19H1: 124.6

Excluding IFRS 16 impact +5.7

◼ (a) Financing income/costs: Improvement due to decrease in interest and valuation gain of financial instruments

◼ (b) Shares of profit/losses of associates accounted for using the equity method: Loss from upfront investment to new

businesses, such as PayPay

◼ (c) Income taxes: Increased due to an increase in profit and the impact of the use of loss carryforwards in the

previous fiscal year

(a) (b) (c)

Financing income/costs and

share of profit/losses of associates accounted

for using the equity method

-8.0

Financing

income/costs

Shares of

profit/losses of

associates

accounted for

using the equity

method

Gains on sales of

equity method

investmentsIncome taxes Net income

attributable to

non-controlling

interests

Operating

income



Japan consolidation

14

-33.2 1.0

329.3 331.3

63.5296.1

395.7

-40

10

60

110

160

210

260

310

360

410

460

FY18H1 FY19H1

172.4116.0

45.2

47.5

217.6

163.5

0

50

100

150

200

250

300

350

400

450

FY18H1 FY19H1

CAPEX*1 Adjusted FCF*2

Yahoo

+99.7

YoY

Adjusted FCF

*3

CAPEX/Adjusted Free Cash FlowFY18: after retrospective


Japan consolidation◼ CAPEX for H1 FY19 was JPY 163.5 bn. CAPEX excluding Yahoo Japan was JPY 116.0 bn

(FY target JPY 380.0 bn)

◼ Adjusted free cash flow was JPY 395.7 bn. Adjusted free cash flow excluding Yahoo Japan and IFRS 16 impact was

JPY 331.3 bn. Progressing at a steady pace towards full-year forecast of JPY 520.0 bn

[JPY bn] [JPY bn]

SoftBank

IFRS 16impact

SoftBankFY target520.0 bn

(excluding Yahoo)

*1: CAPEX is on acceptance basis. Excludes CAPEX for rental mobile phones and

impact from IFRS 16

*2: Adjusted FCF = FCF ± total CF relating to non-recurring transactions with SoftBank Group Corp.

+ (proceeds from the securitization of installment sales receivables – repayments thereof)

*3: Sum of Yahoo’s disclosed FCF and dividend payments from Yahoo to SoftBank Corp. (5.4 bn)

Yahoo

15

1.52 1.45 1.60 1.53

0.63 0.66 0.96 0.94

1.23 1.17

1.19 1.18

0.01 0.02

0.01 0.05 0.38 0.53

0.49 0.49

3.38 3.29

4.64 4.73

3.07 2.93

3.76 3.57

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Q1 Q2 Q3 Q4 Q1 Q2

FY18 FY19

2.6x 2.5x 2.4x 2.4x 2.4x 2.2x

2.0x 2.0x 1.9x 1.9x 1.7x 1.5x

0.0

1.0

2.0

3.0

Q1 Q2 Q3 Q4 Q1 Q2

FY18 FY19

Interest-bearing Debt/Net Interest-bearing Debt and

Net Leverage Ratio After Consolidation of Yahoo Japan

◼ Interest-bearing debt increased slightly QoQ due to issuance of unsecured bonds by Yahoo Japan

◼ Tender offer by Yahoo Japan for shares of ZOZO is scheduled to end on November 13



Japan consolidation

Interest-bearing Debt/

Net Interest-bearing Debt*1Net Leverage Ratio*4,5

Excludes impact fromadoption of IFRS 16[JPY tr]

Before YJ Consolidation After

*1: Net interest-bearing debt = Interest-bearing debt – Cash and cash equivalents

*2: Lease liabilities for FY19 are liabilities and borrowings related to sale and leaseback transactions of SoftBank

Corp. (standalone basis) and WCP (including payables from purchase of installments)

*3: Senior Loan Agreements which SoftBank Corp. entered in August 2018 and June 2019

*4: Net leverage ratio = Net interest-bearing debt/ Adjusted EBITDA (LTM)

*5: Excludes impact from adoption of IFRS 16

Securitization of sales receivables

Lease liabilities*2

Inter-company loans

Other

YJ consolidation

IFRS 16

Bank loans*3

Net interest-

bearing debt

Interest-

bearing debt

Adjusted net leverage ratio(excluding effect of securitization of

sales receivables)

16

Achieving Both

Growth and Shareholder Returns

16

Earnings per share (EPS)

JPY 90→100Dividends per share (DPS)

JPY 75→85FY18 FY19 FY18 FY19

Increase in

Revenue and

Profit

Payout Ratio

c. 85%

GrowthShareholder

Returns

*FY18 figures do not include Yahoo Japan. FY19 figures are forecasts

*1: annual basis

*1

Payment of interim dividend (DPS JPY 42.5)

scheduled in December

Group Companies

18

Group companies

◼ The number of group companies increased due to the expansion of new business domains and the

consolidation of Yahoo Japan

144

105

51

142

249

0

50

100

150

200

250

300

FY15 Q4 FY18 Q4 FY19 Q2

Group companies of Yahoo Japan

Subsidiaries 186

Affiliate companies*1 63

Total number of group companies*2 249

*1: Including joint ventures *2: Total number of group companies excludes SoftBank Corp.

As of end of Q2 FY19:

[Companies]

19

Subsidiaries (1/2)

Segment Company NameRatio of Voting

Rights Held Business Description

Consumer

Wireless City Planning Inc. 32.2%* Telecommunication services *Economic interests: 99.5%

LINE MOBILE Corporation 60.0% Telecommunication services

WILLCOM OKINAWA, Inc. 100.0% Telecommunication services

SB Power Corp. 100.0% Sales and purchases of power and mediating power transaction

SB Mobile Service Corp. 100.0% Call center business

EnterpriseIDC Frontier Inc. 100.0% Data center business

Telecom Engineering CO.,LTD.*1 100.0% Construction and operation related to telecommunications

Distribution SB C&S Corp. 100.0% Distribution and sales of IT-related products, provision of IT-related services

Yahoo

Yahoo Japan Corporation*2 44.6% E-commerce, internet advertising business

Ikyu Corporation 100.0%Operation of various internet sites that provide reservation services for high-end hotels and

restaurants, etc.

YJ Card Corporation 100.0% Credit card, card loan, credit guarantee business

ASKUL Corporation 45.1% Mail-order service of office-related products and other delivery services

YJFX, Inc. 100.0% Foreign exchange margin trading business

The Japan Net Bank, Limited 46.6% Banking business

eBOOK Initiative Japan Co., Ltd. 43.9%Content digitization and distribution service, planning, development, and production of digital

content, and publishing and editorial service for magazines and books

ValueCommerce Co., Ltd. 52.0% Advertisement business, CRM business

*1: On October 1, 2019, Telecom Engineering CO., LTD. was renamed as SB Engineering Corp.

*2: On October 1, 2019, Yahoo Japan Corporation transitioned to a holding company structure through a company split (absorption-type company split) and changed its trade name to Z Holdings Corporation

Blue: listed company

20

Subsidiaries (2/2), Affiliates

Category Company NameRatio of Voting


Affiliate

companies

PayPay Corporation 50.0% Development and offering of electronic payment services such as mobile payment

WeWork Japan G.K. 25.0% Provision of co-working spaces

OYO Hotels Japan G.K. 24.9% Provision of accommodation and hotel services

Tpoint Japan Co., Ltd. 34.0% Point management business

J.Score CO., LTD. 50.0% FinTech services using AI-scoring

Geniee, Inc. 31.5% Marketing technology business

Scigineer Inc. 32.1%Internet marketing support services utilizing “deqwas”, a personalized engine for e-commerce

businesses and retailers

Segment Company NameRatio of Voting


Other

HAPSMobile Inc. 94.5% R&D and manufacturing of network equipment for HAPS business

SB Payment Service Corp. 100.0% Payment processing

SB Cloud Corp. 60.0% Sales of public cloud services

One Tap BUY Co., Ltd. 47.2% Securities business specializing in smartphones

SB Media Holdings Corp. 100.0% Intermediate holdings company that owns ITmedia Inc.

ITmedia Inc. 53.7% Operation of comprehensive IT information site ITmedia

SB Players Corp. 100.0% Solution services for government

SoftBank Technology Corp.*1 53.5% Cloud service, security monitoring service, provision of IoT solution

*1: On October 1, 2019, SoftBank Technology Corp. was renamed as SB Technology Corp.Blue: listed company

21

Manufacturers

10,000 companies

40,000 bases

Items handled

Mobile accessory shipments

Sales partners nationwide

Merchandise handled

4,000 companies

More than

400,000 items

More than

75,000 items

More than

25,000 stores

SB C&S

Overview and business characteristics

◼ Based on the Company‘s founding business, SB C&S now distributes ICT products, cloud services, mobile communications and IoT

equipment to enterprise and individual customers (reportable segment : Distribution segment)

◼ Strong sales of hardware, software and services to enterprise customers

Distribution Segment

RevenueFor individualsFor enterprises

[JPY bn] Providing PC and mobile-related

equipment including accessories, IoT

products and services, etc.

Providing ICT-related products, cloud

services, and products and services

utilizing AI and IoT

As of October 2019 As of October 2019

Stores nationwide

347.1

417.3

161.5 191.6

245.1 +27.9%

FY17 FY18

Distribution Segment

Operating Income

YoY

FY19

13.3

15.2

7.6 8.4

11.0 +31.0%

FY17 FY18 FY19

YoY

Full

year

First

half

Full

year

First

half

Distribution and sales of IT-related products,

provision of IT-related services

[JPY bn]

FY18

c. 18 mn items

22

2.51

3.42

4.25

1.35 1.78

2.20

3.41

+55.2%

FY16 FY17 FY18

SB Payment Service

◼ Provides credit card and convenience store payments, which can be used in online businesses, in addition to electronic money and

QR code settlement services for physical stores

◼ Introduces new payment services to meet diverse demands, such as Alipay international payments and deferred payments

◼ Introduced payment services in 80,000 stores*2. Annual transaction value was JPY 2.95 trillion*2

SB Payment Service Annual Transaction Value

[JPY tn]

SB Payment Service Operating Income*3

[JPY bn]

* 1: As of September 2019 *2: FY2018 actuals

2.192.53

2.95+16.6%

FY16 FY17 FY18 FY19

YoY

YoY

FY19

Forecast

Full year

First half

*3: Japanese GAAP, figures for first half are unaudited

Overview and business characteristics

Payment processing

Appendix

24

After Yahoo ConsolidationVariance Reasons for Variance

[Reference]

Disclosed

FY18H1 FY19H1 FY18H1

Revenue 2,238.4 2,373.1 +134.7 1,794.4

Cost of sales -1,136.7 -1,201.2 -64.5 Increase in cost of goods and outsourced service fees, etc. -950.4

Gross profit 1,101.7 1,171.9 +70.2 844.0

Selling, general and administrative expenses -587.2 -631.9 -44.7 Increase in sales commissions and sales promotion expenses -400.6

Other operating income 8.4 12.0 +3.5 4.7

Other operating expenses -4.8 - +4.8 -4.8

Operating Income 518.2 552.0 +33.8 443.3

Share of gain / losses (-) of associates

accounted for using the equity method-1.5 -17.3 -15.9 Increase in expenses for sales promotion campaigns of PayPay -3.3

Financing income 2.4 3.9 +1.5 1.1

Financing costs -31.1 -29.7 +1.4 -31.1

Gains on sales of equity method investments 0.4 5.5 +5.0 3.7

Profit before income taxes 488.5 514.2 +25.8 413.7

Income taxes -149.2 -167.7 -18.5 Increase due to use of loss carryforwards in Q2 FY18 -120.9

Net income 339.3 346.6 +7.3 292.8

Net income attributable to

Owners of the Company 314.6 327.4 +12.8 294.7

Non-controlling interests 24.7 19.2 -5.5 Decrease in Yahoo Japan’s net income -1.8

Consolidated Statements of Income

[JPY bn]

25

After Yahoo Consolidation

Variance Reasons for Variance

[Reference]

Disclosed

As of

Mar 31, 2019

As of

Sep 30, 2019

As of

Mar 31, 2019

Total assets 8,036.3 8,733.6 +697.2 5,775.0

Current assets 2,965.7 3,168.7 +203.0 1,756.3

Cash and cash equivalents 938.4 1,154.4 +216.0 +229.3 from unsecured bonds issued by Yahoo Japan 358.0

Trade and other receivables 1,696.0 1,687.5 -8.5 1,186.9

Other financial assets 90.6 100.1 +9.5 1.7

Inventories 132.8 106.1 -26.7 114.3

Other current assets 108.0 120.7 +12.7 95.5

Non-current assets 5,070.6 5,564.9 +494.2 4,018.7

Property, plant and equipment 1,791.3 788.4 -1,002.9Due to adoption of IFRS 16, assets recorded based on classification of

lease contracts were transferred to right-of-use assets1,657.3

Goodwill 393.3 395.9 +2.6 198.5

Intangible assets 1,212.4 1,205.3 -7.1 1,046.0

Right-of-use assets - 1,409.4 +1,409.4Due to adoption of IFRS 16, assets recorded based on classification of

lease contracts were transferred to right-of-use assets-

Contract costs 211.7 219.5 +7.8 208.1

Investments accounted for using the

equity method89.7 108.7 +19.0 68.3

Other financial assets 736.5 827.0 +90.5 Increase in deposit to Central clearing agency of The Japan Net Bank 716.5

Investment securities 114.8 128.7 +13.9 -

Investment securities in banking business 337.5 324.0 -13.5 -

Deferred tax assets 72.6 45.1 -27.5 36.6

Other non-current assets 110.9 112.9 +2.1 87.4

Consolidated Statements of Financial Position (Assets)

[JPY bn]

26



[Reference]

Disclosed

As of

Mar 31, 2019

As of

Sep 30, 2019

As of

Mar 31, 2019

Total liabilities 6,013.8 7,118.3 +1,104.5 4,510.6

Current liabilities 3,317.0 3,896.0 +579.0 2,046.3

Interest-bearing debt 953.7 1,669.2 +715.5

Increase in borrowings for purchase of Yahoo Japan shares (+240.0

from securitization of telecom service fee receivables and +150.0 from

bank borrowings), +128.9 from adoption of IFRS 16, and increase in

borrowings of other group companies

909.9

Trade and other payables 1,214.2 1,050.9 -163.3 Decrease in operating payables and trading payables 817.5

Deposits for banking business 745.7 797.4 +51.7 Increase in saving accounts of The Japan Net Bank -

Contract liabilities 126.4 127.4 +1.1 114.0

Other financial liabilities 3.2 2.9 -0.3 -

Income taxes payable 115.5 124.8 +9.3 91.3

Provisions 10.0 8.2 -1.8 7.9

Other current liabilities 148.4 115.0 -33.3 105.6

Non-current liabilities 2,696.8 3,222.3 +525.6 2,464.3

Interest-bearing debt 2,538.0 3,059.3 +521.4+358.6 from adoption of IFRS 16, +229.3 from unsecured bonds issued

by Yahoo Japan and decrease in borrowings from banks, etc.2,379.5

Other financial liabilities 38.6 38.0 -0.6 11.6

Defined benefit liabilities 14.7 14.6 -0.0 11.1

Provisions 72.7 75.0 +2.3 54.8

Deferred tax liabilities 20.4 22.9 +2.5 -

Other non-current liabilities 12.4 12.4 +0.1 7.4

Consolidated Statements of Financial Position (Liabilities)

[JPY bn]

27



[Reference]

Disclosed

As of

Mar 31, 2019

As of

Sep 30, 2019

As of

Mar 31, 2019

Total equity 2,022.6 1,615.2 -407.3 1,264.5

Equity attributable to owners of the Company 1,498.2 1,096.7 -401.5 1,247.1

Common stock 204.3 204.3 - 204.3

Capital surplus 111.8 -132.2 -244.0c. -330.0 from difference in equity of Yahoo Japan and acquisition price

(equivalent to goodwill)202.7

Retained earnings 1,178.3 1,057.2 -121.1

c. -280.0 due to retrospective adjustments of Yahoo Japan

consolidation in FY18, -195.8 from dividend payments by SoftBank Corp.

and +327.4 from net income in FY19H1

893.9

Treasury stock - -30.7 -30.7 -

Accumulated other comprehensive income 3.7 -2.0 -5.7 -53.8

Non-controlling interests 524.4 518.6 -5.8 17.4

Consolidated Statements of Financial Position (Equity)

[JPY bn]

28

After Yahoo ConsolidationReasons for Variance

[Reference]

Disclosed

FY18H1 FY19H1 FY18H1

Cash flows from operating activities 564.3 566.1 498.9

Net income 339.3 346.6 292.8

Depreciation 249.1 327.3 +69.9 due to adoption of IFRS 16 224.1

Change in working capital 7.8 -120.0 Impact from refund related to consumption tax in FY18, etc. -45.7

Interest paid -47.6 -26.4Increase in interest paid and fees due to preparation for the listing of shares of

our common stock on the TSE in FY18-47.4

Income taxes paid/refunded -121.4 -124.6 -93.3

Other 137.1 163.2 168.4

Cash flows from investing activities -324.9 -219.5 -435.5

Purchases of/proceeds from sales of property, plant and

equipment, and intangible assets-256.9 -221.6 -209.4

Proceeds from sales/redemption of investments -19.9 -10.0 -228.9

Other -48.1 12.1 2.8

Cash flows from financing activities -297.1 -130.1 127.2

Proceeds from interest-bearing debt 2,381.0 980.0 Increase in additional borrowings from banks in FY18 2,373.6

Repayment of interest-bearing debt -2,229.7 -705.8 Repayment of borrowings to SoftBank Group in FY18 -2,226.8

Net increase/decrease of short-term interest-bearing debt 51.0 400.8Increase in short-term borrowings for acquisition of Yahoo Japan shares in

FY18-

Cash dividends paid -22.0 -195.0 -0.3

Purchase of treasury stock - -30.7 Purchase of treasury stock by SoftBank Corp. -

Payment for purchase of subsidiaries’ interests -221.0 - Purchase of Yahoo Japan shares by SoftBank Corp. in FY18 -19.5

Purchase of treasury stock by subsidiaries -227.2 -526.8 Purchase of treasury stock by Yahoo Japan in FY18 and FY19 -

Other -29.2 -52.5 0.2

Effect of exchange rate changes on cash and cash equivalents 0.9 -0.4 -

Cash and cash equivalents at the beginning of the period 987.8 938.4 121.0

Cash and cash equivalents at the end of the period 931.0 1,154.4 311.6

Adjusted free cash flow 296.1 395.7 125.9

Consolidated Statements of Cash Flows

[JPY bn]

softbank corp. investor briefing earnings results …...7 operating income for q2 fy19 increased by...

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