SoftBank (SOBKY) 12 May 222022 Q4 Earnings call transcript

Thank you very much for waiting.

We will now begin SoftBank's Investor Briefing for the Fiscal Year Ending March 31, 2022. We would like to begin by introducing today's attendees: SoftBank Corporation, Board Director, Executive Vice President and CFO, Fujihara; Finance Unit, Vice President and Head of Finance and Accounting Division, Naito; Finance Unit, Vice President and Head of Strategic Finance Division, Akiyama. Today's briefing will be broadcast live via the Internet. Thank you for your cooperation.

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already has the Holdings and just made I Yahoo! main LINE will disclosures. Z points. highlight Now

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on big a that. there's impact So

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this we disclosed way in each year. So the same

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billion. ¥XX is rest So

the cash the So of picture is this overall flows.

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growth. investment we ¥XX like have LINE, can FYXXXX, billion, events and been manage them we major you So Yahoo! that very proactive we And have as see And in events.

that disclosed but major that we have like has year been not So impact FYXXXX. each do anything in always

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we total we out ¥XX dividend. trillion, in billion and assets So ¥XXX pay have of

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ratio net is total net debt that see So you assets leverage shareholders' in and can equity improved. interest bearing here and to And equity ratio. our

increase about is see about On ¥XXX which an billion. the plus side, left-hand that, of you can

is of LINE, and As had we shares about for purchase and squeeze million you comments side, part one of less which a the a can ¥X.X we out payment there's a than see so on trillion. acquired Yahoo!, that's LINE for trademark

bearing debt So billion. ¥X.XX net was by up

So our X.Xx. is leverage ratio

basically it's So same a the slight increase, unchanged. but

position. see can our you So

Now KPI. next is

up X.X% addition net is for by so As telecom, million. ¥X.XX

So smartphone just others. is entry an to

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companies the same. So I think disclose other will

quarter, can additions see each by goes addition as for that quarter increasing you steadily. net each As is by,

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ARPU billion ¥X annual to ¥XXX and on the shown year-on-year right ¥XXX have reduction annual was to which thoroughly. manage year, was were And the so like able each the we compared impact last average, price is average. it billion However, side. billion difference, billion quarter, it And and ¥XXX this like

year, the throughout the this So average. is

be As will estimate. billion year for be billion, is ¥XXX XXXX, fiscal expected we ¥XXX where to this

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PayPay. are expecting In just and to earnings we before, results to so the continues what XX of turn, presentation expand. the merchants subscribers number is Next is million

the what So achieved so growth. PayPay our will PayPay have XX% the And and have – ¥X.X so impact is – the revenue, we trillion of we’ve KPI as for achieved. on

rebate As QX, cash previously back, for the expensed. due exceeding to amount revenue was

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book gray to shown therefore, left on So side. amount, in which is decided this we the

in So what in are seeing future out what the expecting are is gray. this we coming you

change, accounting figure here. see after the you So can

double further. where this need So we to is down on

so ¥X,XXX we billion XX.X% year-on-year. which a established special is of service, external committee for development, And increase as independent payment As directors. plus ESG growing comprised for and greatly,

So selected. to were as we for Index, be able

FYXXXX continue I forecasts. consolidated on So will

is number what wise, exactly have presented. it as So we the same

highlight of just main we points growth. revenue terms Here in

– have ¥X.X we it medium-term our was So we when disclosed target, trillion.

will segment, in income by this in ¥XXX And impact announced as dividends operating PayPay have billion revision about other decrease by unchanged you categories. there’s consolidation is especially offset at in policy. Consumer if look So we and upward Enterprise, and our be remains

you that. If just confirm could

when On comments will positive to subsidiary, side, it the impact. we we see will have PayPay. make And right-hand in a you

measurement of have [indiscernible] will and making PayPay intangible from So accounting. loss payback M&A is related income which to consolidation we to amortization assets, and operating gains

in segment will I of it walk FYXXXX how terms through So income. consumer trends

One ¥XXX.X service in price So billion, this reduction. a reduction there’s forecast. mobile significant is

we billion is of right-hand expenses, among which ¥XX assets impact on service and retirement the your removing side. disposals. termination, non-cash and with is deferred are be will Next details listed high to regards the PHS And sales-related

be will about billion. there minus So ¥XX

impacts account. in PHS you service it increase and mobile price termination, we a on negative year a whether generate service into because because lot be trend we also have market we expenses. situation income reductions smartphone So reductionary is the will that, have that FYXXXX, be there have expenses able diminish. look electricity subscribers, but And today, difficult will from this or aside to from sales-related beyond been But subset of of be taken reductions. so impact But if cost will this will

In positive. can expect FYXXXX to cost be onwards, to out FY in quite change turn will regards depreciation, I this in depreciation will actually, think So so significantly larger XXXX. decrease you picture that after

elaborate beyond. me XXXX more let So FY on

So President already XX, service earlier, visibility. the business that we growth from and reductions, have reductions. we mobile so fixed it’s decreases, to as price depreciation realize and offset reduce explained have and Impact to we make we Miyakawa to first minus will be this OpEx in make cost will And to will so sure that, able in add be well. our XX we’re with as reduced And that. addition already seen will

So design blueprint. our that’s

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within tend to on a And they timing, upgrade. most customers years, plan. at new So go that three

to year in on prices one, most So customers who picture largely, they sensitive tended devices. upgrades are focused to this mobile the do is

tends the trend this after overall, – to the be higher. onwards. will FY be it But and XXXX So

know tend in we already years We see we So from will XX or to that cost. past reductions within so, flow, depreciate. the depreciation

depreciation right-hand So And enter expected into we the side, well. are network beginning now to decrease on this OpEx, to that as is decrease period.

some As but absorb Miyakawa expenses that me, and – will excuse we said, realize benefit. would observe occur, the be will there that, we will that

you As service be a trend. year revenue, exclude operating challenging. mobile recovery consolidation will impact, be will a next result, PayPay particular, income more on In if our existing

you if and follow, think multiply it’s grow key will we it will by there. that’s much we subscribers, can be I about KPI that difficult how ARPU until But So really FYXXXX. our

we So years. turn hopefully around two can in or three

in maintain. regards continue want we conservative we as CapEx make sure reduce somewhat XXXX, so smartphone our in this to we And we thrill CapEx, So But is XG, to an income are grow we is by forecast. subscribers, operating billion. With to we to complete this challenge deploy be we make our ¥XXX sure will on our successfully. that this and will

discipline. to continue with CapEx will ¥XXX billion we So maintain

and EBITDA free our result, cash Actually, you a look As it’s declining, CapEx. are at profit, we our if increasing flows. but

I valid increase So flows? that’s how you are we question have. able a cash may question – mean, to free

on side. made more So the description little a I have right-hand

regards reflected billion with ¥XX actually to EBITDA. says is it So in non-cash. acquisition in costs, This

have this investment And billion. on we’re our we more we This be to as well. course, paying room also, So have ¥XX a for the tax normal – And looking of twice cap we will decreasing than year. will maybe working taxes working that inform and there we’re be growth, for well. phases because cap, operating securitization. is of income, year, at able But benefit about controlling as including operating

we a CapEx. where level FY And will billion believe ¥XXX onward, will will that our XXXX be contain in stabilized. So we beyond be and phase we

billion number I So very is achievable, a is that ¥XXX much think.

page. this a So summary is

a of FYXXXX, beyond and our thinking. forecast XXXX have just You way

It target. by will supported achieved medium-term PayPay. operating So of be consolidation income

to we make need existing to recovered that fully. So with sure business, is regards it

for So challenge XXXX that’s CapEx. our

do We be in continued and upward. billion, we continue shareholder – fixed visible we that really our complete we the And XG, beyond And to it And off ¥XX of will dividend sure But ¥XXX efficiency. cost, cycled network free that sure that it’s flow, deployment in will we return to cash per make OpEx will so. decrease. make have achieve XXXX cost will share. XXXX,

how and this higher will – that will to of is we we return fixed, announce shareholder and realize can continue in specifically. to have this. And continue beyond We we XXXX, will terms achieve we examine

much attention. kind all for Thank you your is So very from that me.

would I take questions to from Thank you. you. like So

The Instructions] unmute questions. Securities. first ask [Operator please Ando, and from Mr. Daiwa your

Can This me? hear is you Ando.

Yes.

questions. consumer, two have I consumer’s One income is about forecast.

angle but you questions. So as explained, I’d to different like a have

I you in decrease decrease impacted And a in which X% said by understand price this XX% reduction, service is partly. a mobile So the year, income income. which

results why you previous and the result, this from that, year differently? result look However, on the fiscal Can elaborate year’s please?

and I will about acquisition is go one costs. one, one by

year fiscal XXXX, in As acquisition for we active. active – were

And XXXX had so in increase we therefore, cost.

time, for However, following was much was not that due impact. to ordinary fiscal which why and what’s COVID is fiscal acquisition depreciation cost used situation, accrued. in year XXXX accrued case. was in was been accrued. there benefit year the the has lower That’s have the Therefore, the the And year, And of this lower. which did XXXX,

year see spend are we are costs we However, on the acquisition same were impact merits. top. acquire And to if fiscal accrued we not XXXX, for XXXX, fiscal the some income, the for the year, cost, year compared previous in full amount to we we from to and that that the getting due the for year say But from handsets. almost able able fiscal acquisition fiscal XXXX going get for time, income to year the – were handset we to handsets and

were So from XXXX we XXXX, maintain to speed. able the to

¥XX this were billion – is so we noncash. So still

has As the price of reduction, for it yes, impact the increased.

the electricity, demand against XXXX, the supply of was as for So less.

loss-making, and it the due this situation. managed – was negative. So there why to year, we that’s But successfully was market a

therefore, a billion. have billion to we some of And we going of have couple yen, some are So merit. ¥XX benefit double-digit

tried So and last year, year, to some to cover negative but other – had – with we this admit negative we results. costs

XG, that? any is regarding XG? – for are And are factor any of having So accelerating impact you you there

XG. about not XG, much as expecting are Well, for we

able be XG will to situation. XG, there position should However, minus deal some but plus the towards we and be with

and question forecast the from And for income subscribers. is my second about mobile your

you year, this do that? Or guidance As have increase it latter you as of year on from the the previous any Are for half fiscal subscribers expecting the increased. well?

Yes.

this we For of year. net course, the same level attention pay to to need additions,

optimistic not much. We are too

However, have confidence. our regained we

is the driver So number subscribers business smartphone our as growth a SoftBank of Corporation. core for increasing

we therefore, So to would like further this. reinforce

this you’re growth assuming in in the which expecting So significant subscribers, that estimated is number?

largely. Yes,

Thank you so much.

Masuno Mr. Nomura from Securities. unmute. Next, Please

this One from Securities. Masuno Hello, Nomura is question.

about question First understanding ARPU.

I price is reduction minus So the XXXX, think in FY it the what ¥ service says. that’s ¥XXX, among XXX million

is But of it. not that there’s the express mobile price what – That’s see price things, is So a reduction. Y!mobile. among because reduction. reduction? you that’s the are price FY XXXX lot amount of to We migrated ¥XXX, a and impact items how That’s minus always service really

true a brand changes mix. in and there’s the sense tariff maybe differences So of reduction also

really us you be ¥XXX. would the breakdown of So that, able give a to on

– you service when I different, price say which prices. the of different. reality, I is is So express the think impact it’s think we reduction, the it so I inappropriate in the nature apologize, way is

of migration series is more by this management brand actually, have is in So affected like does but significant And the events. upgrade, all reality, an impact. a it

the an majority brand as on switch. we this take So, Among migration, impact the is management. our impact,

think understand that’s that. how I you can

is much among ¥XXX it how So billion?

assume number subscribers ¥XX can So, certain by and we a then of it can billion. divide you

¥XXX probably like billion, So so. ¥XXX or get you billion should and

that’s So But reflected. will next situation. year, half be. this of And is the year, benefit not the it price discount

I ¥XXX you So, ¥XXX billion. level think in terms QX, total year-on-year. ARPU of expected

will I number, billion you see be able to think we means. give you this if this ¥XXX what

So QX looking minus billion. ¥XXX year, this is year, an we’re minus average But in FY next on ¥XXX XXXX billion.

you a from think I can get that. message

lot that will sales book promotions. you and sales a because a have January such decided do secondly, decided QX, of the And give earlier, losses on expenses. the But such profit that President’s to of as impact? decided large in impact a stringent you you Is XX-year it. tone continue you of there’s In that large you a margin, result That’s do you you that actually the why on – done In amount sales promotions. will sales-related said a not – and have expenses. presentation about and

necessarily Well, it January, wasn’t March period.

– go additions. want net However, to after we track

costs. not to there’s we able quarter, we even able the details. you spend are So, are acquisition And with previous to PayPay, points which planning speak But of were in with give substantial to certainty. to not we amount regards today,

So, that there’s it’s different not been that I tone think But a sense. slightly maybe was the change. in sudden

I see.

full you six promotion. However, at sales March Is but you year significant that had this XXXX, decided you if you months? do decided look will that have something

Yes. In we the first future. need when the struggled, do to half we we what in discussed

So of really – to on need net consensus, we that our sales be we need whether SoftBank, the really on focus and additions. we capabilities to we to need leverage should

by but explained thought down been which have COVID substantial solid that's capabilities. of we in we we recover, we’re to is I this of Miyakawa. this numbers. of light I now the in that there to expenses, numbers, think in went reflect terms situation, sort So able speak starting to really amount process that will the And was through, be And we're Mr. of starting and that our sales and to the reality is exercise to more more able being think able calm

Thank much. you very

Next Tsuruo, from Mr. ask unmute questions. Securities, Citigroup your and please

so you investment Thank muted. CapEx much question for the ask the My opportunity this a first am is I for to question. midterm.

to So once I would like confirm again.

this understand I have I the and of billion, –the be coverage, death base question. about base number what my number year for current is but number? first by can that station So I This investment of but the ¥XXX station the future the and standalone a you’re understand the billion. that base can this increase expanding ¥XXX covered fiscal And

Yes.

covered we Now have XX%.

like able to achieve understand for the which yet, standalone. that but as Yes, is and we included. of will number manage clear are it station far we as to billion, amongst not I as So ¥XXX base is

Okay. And question dividends. actually to the is Thank dividends. And the dividend my about they’re achieve many increasing trying the aiming increase much. to are carriers and you second so

time. reasons to this or you’re not company is going is Maybe So so, to your the motivated behind. dividend not there some do increase

have increase And to your would what shareholders’ time. for to this equity that. hear I like plan So the no plan you

what explain please you So think?

Yes.

or Regarding are I you dividend. We providing able XX% to we to in our we second were like that proactive to next provide so. would highest number the think by dividend And understand is Toyota.

proactive in dividend. are understanding. We appreciate your providing I

buyback XX% the than the of I As others. is for standard higher of number our three over is think increasing years

expectations. maintain like would forward, we moving understand So therefore yes, And this. your to we

are like that. to we would further to have So and around discuss, we proactive communication determined a

Thank you so much.

Okasan from Okasan from Okumura Yusuke Okumura Please Securities. unmute. Securities.

Can you hear me?

Yes. We you. can hear

questions. I have two

First just a clarification. question,

little the they maybe increase minimal. holdings say QA, you’re billion segment consolidation PayPay forecast, If Yahoo! EBITDA increase. by are you in don’t look to in LINE this year-on-year or the planning income know In you first impact and I basis, planning at for segment. to session, XXX is

contribution. I’m that significant So in difference Is PayPay was assuming understanding? consolidation – significant a made this

I a to apologize. contribution. make We correction. a It’s significant need

PayPay. What you if at because think I you. of if that able the Yes. the before, is layer, mind? that. a year you. – looking along rate. looking third have to order forward, target And was basis? all PayPay the is you Thank to take about monetize What Thank layer rate improvement and the share, accounting about at in target? But even at or Then future, If or there on going share. first me. question you're you I'm what on you're second break maybe your is look please potential treatment X% take in from you GMV The to want so. guidance that, changes, That's layer second in with talk GMV

able comment. I looking specific we as But to mind. makes X% or at we're take is With need rate, specific expand a X% to not PayPay specific disclosure, increase. our a that continue X% to satisfactory; services, we make in we're mean, regards to unless not keep

they room many of have time, regards breakeven. to to they breaking even, this that have endeavor in an design So to they they quite to a need point potential terms in things – you significant, on, initiative is and brake step With on customer challenge if on that need at acquisition, on.

come, I furthermore. to customer they continue have want they far the build think to but that's base,

be to that, do can naturally they will if breakeven. able So they

spend and say break they they I when naturally, even, even costs, can if So horizon. that will acquisition in be

size. they're very a what is company becoming trying that's trying the to do right to need are And we now clear. – and they make blueprint So build to

And proxy's But shareholder, I sure they make, not services to be a update as will about that. I'm unilateral a hope information as continue am to additional communicate with you. we to you. will or a will PayPay, company and I able able make you different PayPay to accept so the So comment parent

it. thank Well, appreciate your much I very you for through explanation.

much. Thank very you

Next, BofA Securities.

you Can me? Kinoshita. hear is This

Yes.

questions. I mentioned you is years. over – One about XX% have two three

In much terms in – incentives how also may and of And buyback of it ratio? would include employees how is – considered it's This included the management. be – return for or not so terms your buyback. much would be

is Well and billion. XX% times in three ¥X years over

So from be ¥XXX billion. subtracted that will the

So includes so billion this mentioned XX%, close or time, I which ¥XX to that.

in we like would would maintain having or have to either depreciate IFRS. like we we So communicate to contributes mind and to the – which depreciation

So confirm, to this once again, just is be billion return? ¥XXX to considered at time,

that Yes, considered that. we

so about income. you is Thank next much. The question

So due the onetime PayPay. this time, income to

is and PayPay onetime So income, including LINE. like Yahoo!

minus. So even but income, increase is though in Yahoo! PayPay there is a

the fiscal But onetime you said – So to I'm that Or you're purely, planning next take that recover sure you more in no that factor. will recover. it even think income year. are little a to is than there might you

Language] [Foreign Language] what difficult say In for over [Foreign realize. some earnings fiscal we be [Foreign is as As year will is XXXX Language] soon results expect can I to presentation earlier, what here the years possible recovery.

you. Thank

is unmute. Next Moriyuki Please Securities. from Mr. SBI

This Moriyuki you Can from hear me? Securities. is SBI

Yes, we can hear you.

revenue. us have questions. to confirm I So two want about I

be be have in but XX increased like increase have Or it number an price XX. order promote can devices of But if there – net not about reflected XX. of to will minus device cost is you deferral upgrades? see you would in item this be And is it device for of unit I sales. that or additions, said you seems sales, Would So in will do that. this increase,

to could you So that? be explain able

was FY Well, too good. XXXX

it normalize. be So will

slight there So decrease. a be will

our view. of that's sort So overall

Also question, to it's next related see. earlier so difficult recover to I the year. said you

it below So have one back next trillion will ¥X point, ¥X Is at that image? be step will right trillion have and – year. you that it's the a achieved you actually

the we target one reasons thinking will a order next – billion ¥XXX have correct. will ¥X we an because is that the we that that. of achieve as Well, about be base cash be buying in trillion element of will sure line make concerned realize set growth. of to just we're why And also time. It's But

will next growth. that make generate do cash our what to to and So sure to And need that we do and time, meet target. to we expectations we need during we lead will the and respond

So that's show intention or of will. our a

conservative. this regards incorporating with So to valuation, think, year, terms are In how you you which of, that? it's in were I PayPay, incorporating fiscal quite

lot So is might is possibility can not year? this be we see you're a Maybe or of upside, it a that why realized it that conservative?

in to than PayPay, regards been to PayPay has money. that have because make Well, losing to we it's and amount want said have situation. more invested there's with we and I – subject a market But is thing one

zero, positive But value close that be very So will is appropriately, – evaluated, is if then book zero. it our there's no it no doubt to there's nearly

well Okay, I understand. you. Thank

briefing much. XX, conclude for the We March like the ending XXXX. year Q&A investor would very Thank to you session. SoftBank's to We would fiscal like conclude