SoftBank Group Corp (OTCPK:SFTBY) Q2 2021 Earnings Conference Call November 9, 2020 2:30 AM ET Company Participants Masayoshi Son - Chairman & CEO Conference Call Participants Sam Nussey - Reuters Morita - TV Tokyo Ryo Inoue - Asahi Tatsuhisa Shirakabe - Nikkei Business Phred Dvorak - Wall Street Journal Kana Inagaki - Financial Times Naotaka Owada - Nikkei BP Shugo-san - Bloomberg Noriyuki Hirata - Reuters Wataru Suzuki - Nikkei Asia Unidentified Company Representative Thank you very much for waiting, ever ...

Financial Performance - Net income attributable to owners of the parent was JPY 1,883.2 billion (USD 17.8 billion), a 4.5x year-over-year increase[13, 17] - Gain and Loss on Investments (SVF Segment on a SBG Consolidated Basis) was JPY 1,390.1 billion (USD 13.1 billion)[26, 29] - SBG NAV reached USD 258 billion as of September 30, 2020[50] - SBG NAV has increased 157x since April 1, 2002, from JPY 0.2 trillion (USD 1.3 billion) to JPY 27.3 trillion (USD 258 billion)[93, 94] Investment Strategy and Portfolio - SoftBank is positioned as a company investing in the AI Revolution[35, 40] - The company aims to maintain an LTV (Net Debt / Equity Value of Holdings) of less than 25% during normal periods; as of Sep 30, 2020, it was 12%[134, 135] - The company targets a ratio of unlisted stocks (Value of Unlisted Stocks / Equity Value of Holdings) around 10%; as of Sep 30, 2020, it was 8%[136] - The derivative ratio (Fair Value of the Option / Equity Value of Holdings) was 1.2% as of Sep 30, 2020, with a target of less than 10% in principle[138, 139] - SVF2 invested USD 1.35 billion in Beike in November 2019, with a holding value of USD 7.908 billion as of November 6, 2020, representing a 5.9x return[211, 212, 213] SoftBank Vision Fund 1 (SVF1) - SVF1's listed portfolio companies had a total investment cost of USD 9.9 billion and a gross return of USD 15.4 billion, resulting in a gross gain of USD 5.5 billion[353] - SVF1's private companies had a total investment cost of USD 72.8 billion and a gross gain of USD 1.9 billion[353] SoftBank Vision Fund 2 (SVF2) - SVF2's listed portfolio companies had a total investment cost of USD 1.4 billion and a gross gain of USD 5.1 billion[375] - SVF2's private companies had a cumulative gross loss of USD -0.1 billion[375]

Ver.1 Earnings Results for the Three-month Period Ended June 30, 2020 Investor Briefing August 12, 2020 SoftBank Group Corp. Disclaimers This presentation provides relevant information about SoftBank Group Corp. ("SBG") and its subsidiaries (together with SBG, the "Company") and its affiliates (together with the Company, the "Group") and does not constitute or form any solicitation of investment including any offer to buy or subscribe for any securities in any jurisdiction. This presentation contains forwar ...

Financial Data and Key Metrics Changes - The company achieved a net sales increase from ¥1.4 trillion to ¥1.45 trillion, indicating good progress in the first quarter [15] - Net income increased by 12% compared to the previous year, with operating income around ¥500 billion, slightly exceeding expectations [17] - The total equity value increased from ¥28 trillion to ¥30.2 trillion, while net debt decreased from ¥6.3 trillion to ¥5.8 trillion, resulting in a shareholder value increase of ¥2.7 trillion [28][29] Business Line Data and Key Metrics Changes - The SoftBank Vision Fund showed signs of recovery in the first quarter, despite previous losses, with a valuation gain of ¥1.1 trillion from successful investments [52] - The domestic telecom business, SoftBank Corp., maintained steady growth in revenue and recorded its highest operating income ever during the COVID-19 pandemic [46] - The merger of Sprint and T-Mobile was officially certified, leading to a significant increase in the equity value of the new entity from ¥0.4 trillion to ¥1.9 trillion [50] Market Data and Key Metrics Changes - The company reported that the share price of Alibaba has been steadily increasing, contributing positively to the overall asset value [45] - The performance of the SoftBank Vision Fund improved, with a gross gain of ¥0.5 trillion as of August 10, 2020, indicating a turnaround from previous losses [55][56] Company Strategy and Development Direction - The company is focused on a monetization program targeting ¥4.5 trillion, with ¥4.3 trillion already achieved in just four months [9][10] - The strategy includes share buybacks totaling ¥2.5 trillion, with ¥1 trillion already executed [40] - The establishment of an investment management subsidiary aims to diversify assets and manage excess cash effectively [67][69] Management's Comments on Operating Environment and Future Outlook - The management emphasized a defensive posture in response to the ongoing COVID-19 pandemic, aiming to maintain a low level of loan-to-value (LTV) ratio [33][35] - There is cautious optimism regarding the recovery of the Vision Fund and the overall financial health of the company, despite uncertainties in the market [59] - The management is committed to achieving the monetization targets and maintaining shareholder value, despite market volatility [72] Other Important Information - The company plans to stop daily disclosures of private company valuations to avoid misleading investors, opting for quarterly updates instead [44] - The performance of the Vision Fund is improving, with several companies in the portfolio preparing for upcoming listings [59] Q&A Session Summary Question: What is the current status of the Vision Fund? - The Vision Fund has shown improvement, with a valuation gain of ¥0.5 trillion and several companies preparing for IPOs, indicating a positive trend [55][59] Question: How is the company managing its debt? - The company has successfully reduced net debt from ¥6.3 trillion to ¥5.8 trillion, maintaining a healthy financial position [28][73] Question: What are the plans for the monetization program? - The company is on track to exceed its ¥4.5 trillion monetization target, having already achieved ¥4.3 trillion in just four months [9][10]

Financial Data and Key Metrics Changes - The consolidated results showed a significant impact on EBIT and net income, primarily due to the performance of the SoftBank Vision Fund segment, which experienced a large decrease [9][10] - The net sales remained relatively stable, but the overall EBITDA was dragged down by the Vision Fund's performance [9][10] - The equity value of holdings decreased by ¥500 billion, and net debt increased by ¥800 billion, leading to a total decrease in shareholder value of ¥1.4 trillion since December 2019 [22][23] Business Line Data and Key Metrics Changes - The domestic telecom business reported a 4% increase in revenue and an 11% increase in operating income, marking the highest performance ever [17] - The SoftBank Vision Fund had cumulative investments of ¥8.8 trillion, with a valuation loss of approximately ¥100 billion [11][12] - Eight companies from the Vision Fund went public, generating a gross gain of about ¥150 billion [15][16] Market Data and Key Metrics Changes - The global impact of COVID-19 led to a 90% decrease in travel and a 50% decline in automotive shipments, significantly affecting various sectors [6][37] - The stock prices of major holdings like Alibaba initially dropped but began to recover, indicating a potential return to normal business performance [16] Company Strategy and Development Direction - The company plans to monetize ¥4.5 trillion in assets, with ¥2.5 trillion allocated for share buybacks, indicating a focus on strengthening financial stability [27][71] - The merger between Sprint and T-Mobile is expected to create significant synergies, enhancing the value of SoftBank's equity stake [18][81] - The company is committed to supporting unicorns and new technologies that can thrive post-COVID-19, emphasizing a shift towards online services and digital solutions [41][90] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented crisis caused by COVID-19, comparing it to the Great Depression and emphasizing the need for cautious management [5][26] - There is an expectation that some unicorns will successfully navigate the challenges posed by the pandemic, with a belief in the long-term growth potential of the remaining investees [42][98] - The management remains optimistic about achieving a blended IRR of 20% in the long term, despite current challenges [104][112] Other Important Information - The company has implemented measures to ensure a loan-to-value ratio below 25% as part of its financial discipline [29] - There is uncertainty regarding dividends for fiscal 2020, with management indicating that the amount may be adjusted based on financial needs [30][32] - The company has been actively involved in social contributions by supplying medical equipment at cost during the pandemic [33][35] Q&A Session Summary Question: How does the company view new investments for Vision Fund in the current fiscal year? - Management indicated that new investments for Vision Fund 1 are no longer being pursued, but they will continue to invest using their own funds for Vision Fund 2 [50][51] Question: Is the Vision Fund considered a failure due to its negative performance? - Management stated that while there have been losses, the overall performance relative to market declines has not been as severe, suggesting a nuanced view on the fund's success [59][60] Question: What measures are in place to manage potential valuation losses in the Vision Fund? - Management emphasized a conservative approach to evaluating potential losses, utilizing third-party assessments and maintaining a cautious investment strategy [92][94] Question: How does the company plan to compete in the current investment landscape? - Management highlighted the importance of recycling proceeds from successful public companies to fund new investments, while also focusing on maintaining a strong market position [70][72] Question: What is the outlook for the company's governance and board structure? - Management confirmed plans to increase the number of independent directors to enhance governance and ensure robust decision-making processes [106][109]