|Date||Thursday, February 4, 2021 4:00 pm – 5:45 pm|
Ken Miyauchi (President & CEO)
Junichi Miyakawa (Representative Director & CTO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
Mr. Ken Miyauchi, President & CEO of SoftBank Corp., discussed two themes at the earnings results briefing: (1) consolidated results for Q3 FY2020 and (2) SoftBank's growth strategy.
1. Consolidated Results for Q3 FY2020
- Revenue for Q1-Q3 increased year-on-year. Growth was driven by the Yahoo segment and Enterprise segment.
- Operating income increased by 6% year on year. Segment income rose in every segment.
- Net income attributable to owners of SoftBank Corp. was mostly unchanged from the same period a year earlier, due to one-time factors such as impairments and losses on valuation of financial assets. Full-year net income is expected to surpass FY2019.
- Full-year forecasts was revised upwardly, with revenue of JPY 5,100.0 bn, increased by JPY 200.0 bn compared with forecast at the beginning of the fiscal year, operating income of JPY 970.0 bn, increased by JPY 50.0 bn, and net income attributable to owners of SoftBank Corp. of JPY 490.0 bn, increased by JPY 5.0 bn. The positive impacts of digitalization and stay-at-home demand far exceeded the negative impacts from the COVID-19 crisis that had been anticipated at the beginning of the fiscal year.
2. SoftBank's Growth Strategy
Expansion of non-telecommunications business
(1) Enterprise segment
- Growth in the Enterprise segment was driven by business solution and others including cloud, IoT and security. Revenue increased by 8% and segment income increased by 21% year on year. In response to growing cloud demand, we opened a data center—one of the largest in Tokyo—in December 2020.
- A major strength of the Enterprise segment is its solution-type business. The Company reformed its conventional business of communication centered stand-alone sales over several years. As a result of strengthening digital technology personnel development through training, the ratio of digital technology personnel within the Enterprise segment has increased to 21%. By establishing a business-style of proposing optimal solutions with a variety of products and expertise in response to the various issues facing enterprises, and as a result, the business solution field became a high-growth area with compound annual growth rate of 15%.
- Going forward, the Company will expand its B2B2C business model, which promotes the digitalization to end users together with client companies. We will fully utilize the strengths of Japan's largest customer touch points, from telecommunications to social media within the group. In the smart city field, one of the focus areas, the Company will expand its business to other companies and cities, utilizing our new corporate headquarters, which is designed as a smart building that utilizes AI, IoT, and 5G.
- To promote adoption of 5G and 6G, we will invest ¥2.2 trillion over the next 10 years. We are steadily expanding our 5G service areas, with the aim of realizing a population coverage of over 90% by the end of FY2021.
- We are focusing on initiatives to realize 5G businesses. Together with SUBARU CORPORATION, we succeeded in on-site verification of an use case of autonomous driving. In other areas, we also promoted co-creation initiatives with multiple partner companies.
(3) Distribution segment
- We participated in the “GIGA School Program” of the Ministry of Education, Culture, Sports, Science and Technology (MEXT) aimed to realize one computer per student, and received orders from over 200 local governments nationwide to deploy more than 1 million ICT devices.
(4) Yahoo segment
- Due to growth in the commerce field, revenue increased by 15% and segment income rose by 15% year on year.
- Usage of e-commerce and online media both increased in step with cocooning consumption.
(5) PayPay and new fields
- Cumulative registered users of PayPay exceeded 35 million as of January 2021. In Q3 FY2020, the number of payments made with PayPay surpassed 500 million.
- We will foster new unicorn companies in Japan by working closely with various technology companies such as investees of our parent company SoftBank Group Corp.
Solid growth in telecommunications business
- Consumer segment maintained revenue growth, despite the COVID-19 crisis. Segment income remained firm.
- There was a net increase in the number of cumulative smartphone subscribers for all brands, specifically SoftBank, Y!mobile and LINE MOBILE, with subscribers up 8% year on year.
- In December 2020, we announced new price plans for all brands applicable for 4G and 5G. Based on the service concept of “SoftBank on LINE,” a new online exclusive brand will start services in March. The service will provide unlimited use of messaging app LINE without consumption of the monthly data allowance*1. Under the SoftBank brand featuring high-volume data plans, the “Merihari Museigen” service, which offers unlimited data, will start in March*2. The Y!mobile brand, which offers small and medium-sized volume data plans, will provide new simple price plans in February for smartphones that features flat monthly fees that never change.
Increasing cost efficiency
- We are pushing ahead with the Digital Worker 4000 Project, which seeks to generate the productive output that would require the work hours of approximately 4,000 people using digital tools and other means. In the first two years since its launch, the project has replaced the work of approximately 2,000 people with digital technology.
- By cutting outsourcing expenses, we expect to reduce expenses by ¥9.5 billion in FY2020. Apart from this, we will successfully convert the work of approximately 600 people over two years, as part of efforts to contain increases in personnel costs.
- *1Payments are required separately for paid LINE content. In some cases, unlimited use of LINE without consuming data allowance may not apply within LINE services.
- *2Speeds may be restricted for “Merihari Museigen” depending on the time of day. Tethering and data sharing is available up to a total of 30 GB. 5G service areas are limited. Voice call charges will apply separately due to the pay as you go voice plan.