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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  SoftBank Group Corp.    9984   JP3436100006

SOFTBANK GROUP CORP.

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SoftBank : Summary of Earnings Results Briefing for Q2 FY2020

11/05/2020 | 03:52am EST
Summary of Earnings Results Briefing
for Q2 FY2020

Date Wednesday, November 4, 2020 4:00 pm - 5:30 pm
Speakers SoftBank Corp.:
Ken Miyauchi (President & CEO)
Junichi Miyakawa (Representative Director & CTO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
Summary

Mr. Ken Miyauchi, President & CEO of SoftBank Corp., discussed two themes at the earnings results briefing: (1) consolidated results for Q2 FY2020 and (2) SoftBank's growth strategy.

1. Consolidated Results for Q2 FY2020
  • We continued to record year-on-year growth in revenue, despite the COVID-19 crisis. The Yahoo segment and Enterprise segment recorded revenue increases, while there was a decrease in revenue in the Consumer segment due to a decline in mobile device sales, etc.
  • Operating income increased by 7% year on year. In the Yahoo segment, segment income rose by 30%. In the Enterprise segment, segment income rose by 18%. Both increased substantially year on year.
  • While net income attributable to owners of SoftBank Corp. decreased due to one-time factors such as valuation loss, business showed good progress. Full-year net income is expected to surpass FY2019.
  • Looking at progress rates against the consolidated financial results forecasts for FY2020, the progress rate for revenue was 50%, operating income was 64%, and net income attributable to owners of SoftBank Corp. was 65%, indicating steady progress against our forecasts.
2. SoftBank's Growth Strategy
  • The ratio of pure mobile communications charge revenue to consolidated revenue decreased from 45% in FY2015 to 29% in FY2019, reflecting expansion in non-telecom businesses, in addition to solid growth in the telecom business. Progress has been made on the diversification of earnings sources through growth in business solution and others, including cloud and IoT, and the consolidation of Z Holdings Corporation (formerly Yahoo Japan Corporation).
  • We will continue working to drive growth to achieve operating income of ¥1 trillion in FY2022, a target announced in August 2020, and to maintain our shareholder return policy, with a guidance total shareholder return ratio*1 to net income attributable to owners of the SoftBank Corp. of approximately 85%.
Expansion of non-telecommunications business (1) Enterprise segment
  • Revenue increased by 7% year on year. This growth was driven by an increase in business solution and others revenue, including cloud, IoT, and security, due to the increasing demand for digitalization under COVID-19 crisis. Segment income increased by 18% due to growth in telework demand.
  • There was a five-fold year-on-year increase in the number of customer contacts*2 in Q2 FY2020 due to digitalization, supported by efforts to conduct 'hybrid sales' activities combining online and offline activities.
  • Looking ahead, we will continue to promote the three major digital revolutions of 'digital communication,' 'digital automation,' and 'digital marketing.' We are targeting double-digit growth in business solution and others revenue every year.
(2) Yahoo segment
  • Revenue increased by 15% year on year due to growth in Commerce. Segment income rose by 30% year on year.
  • E-commerce demand increased due to the COVID-19 crisis, in addition to the consolidation of ZOZO, Inc. In the second half of FY2020, we will bolster Commerce investments, with the aim of becoming No. 1 in Japan in terms of e-commerce transaction value in the first half of the 2020s.
(3) PayPay
  • Cumulative registered users of PayPay exceeded 33 million (as of October 2020). In Q2 FY2020, the number of payments made with PayPay increased by 5 times year on year.
  • We aim to form a financial/FinTech ecosystem centered on PayPay through collaboration with partners such as The Japan Net Bank, Limited, Japan's first internet-dedicated banking service (expected to be renamed to PayPay Bank in April 2021), and One Tap BUY Co., Ltd., which started a trial investment service using PayPay Bonus (expected to be renamed to PayPay Securities in January 2021).
Solid growth in telecommunications business
  • SoftBank has been working to launch innovative price plans to lower mobile service charges. It has reduced data service charges per GB by more than 80% compared with five years ago*3. In October 2020, SoftBank announced that it would roll out the new Simple 20 price plan for the Y!mobile brand. Simple 20 is a simple and straightforward price plan for smartphone users, offering to address increased needs for the use of large-volume 20 GB data plans at a more affordable rate. In addition, we aim to completely abolish Mobile Number Portability (MNP) transfer out fees in spring 2021.
  • Average revenue per user (ARPU before discount for main subscribers) has decreased by roughly 20% over the past five years. Despite temporary decreases in revenue due to price reduction, the number of smartphone subscribers has grown 1.5 times over the past five years. Revenue has returned to positive growth owing to an increase in the number of subscribers. Going forward, we will continue to drive growth through increases in the number of subscribers.
  • We have built a highly competitive network by investing ¥5 trillion over the last 14 years. From among 181 mobile network carriers around the world, SoftBank was crowned as the global No. 1 in Voice App Experience and the global No. 3 in Video Experience in the Global Mobile Network Experience Awards 2020*4. Over the next 10 years, we will invest ¥2.2 trillion in 5G and 6G, with the aim of delivering new value to society.
[Notes]
  1. *1
    Total dividends and share buybacks for FY2020 to FY2022 / total net income attributable to owners of SoftBank Corp. for FY2020 to FY2022
  2. *2
    Number of customer contacts: The total of the number of e-mails, the number of participants in seminars and webinars, and the number of business negotiations
  3. *3
    Based on a comparison of the data service charges of the Merihari Plan (¥130 or less per 1 GB) and the fixed-rate packet service charges of the White Plan (¥814 per 1 GB)
  4. *4
    Softbank was ranked the global No. 1 for Voice App Experience and the global No. 3 for Video Experience in the Global Mobile Network Experience Awards 2020, Global claim from September 2020, Japan claim from October 2020, based on independent analysis of mobile measurements. © 2020 Opensignal Limited .

Disclaimer

SoftBank Group Corporation published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2020 08:51:01 UTC


© Publicnow 2020
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Financials
Sales 2021 5 794 B 55 836 M 55 836 M
Net income 2021 1 720 B 16 576 M 16 576 M
Net Debt 2021 9 464 B 91 202 M 91 202 M
P/E ratio 2021 8,51x
Yield 2021 0,49%
Capitalization 15 595 B 150 B 150 B
EV / Sales 2021 4,32x
EV / Sales 2022 4,20x
Nbr of Employees 80 909
Free-Float 63,0%
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Technical analysis trends SOFTBANK GROUP CORP.
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 14
Average target price 8 629,14 JPY
Last Close Price 8 664,00 JPY
Spread / Highest target 27,0%
Spread / Average Target -0,40%
Spread / Lowest Target -20,4%
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Managers and Directors
NameTitle
Masayoshi Son Chairman & Chief Executive Officer
Raul Marcelo Claure Chief Operating Officer & Vice President
Yoshimitsu Goto Chief Financial Officer & Senior Managing Director
Norikazu Oba Manager-Finance & Planning
Ken Miyauchi Director
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