Q&A at Earnings Investor Briefing for FY2022

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Date Wednesday, May 10, 2023 6:00 pm - 7:00 pm
Speakers SoftBank Corp.:
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
Takashi Naito (Vice President, Head of Finance and Accounting Division)
Osamu Akiyama (Head of Strategic Finance Division)
  • What is the outlook of the total ARPU for mobile services?

    Total ARPU in FY2022 decreased by ¥220 year-on-year and is expected to decrease by ¥170 year-on-year in FY2023. In FY2022, there was an improvement of about ¥40 in monthly discounts, but since that will disappear from FY2023, the rate of decline in total ARPU will shrink. From the second half of FY2023, we will implement new initiatives to strengthen the “SoftBank” brand, aiming to increase the number of subscribers and expand mobile service revenue toward FY2025.

  • The number of mobile subscriber acquisitions increased, but the churn rate also increased. Is the acquisition of mobile subscribers contributing to business growth?

    Acquisitions through Mobile Number Portability (MNP) are very strong. Though the churn rate has partially deteriorated as a reaction to acquisition efforts, the net additions have improved. The Group has many companies that provide smartphone-related services, and therefore increasing the number of mobile subscribers is extremely important to strengthen the foundation for group synergies with PayPay and Yahoo! JAPAN Shopping, etc.

  • Under the current severe environment in the telecommunications industry, through which brands and what measures will you expect to achieve the target set in the medium-term management plan of continuing smartphone net additions at the level of 1 million per year from FY2024 onwards in the Consumer segment?

    Acquisition of “Y!mobile” subscribers is strong and contributing greatly to the net additions in smartphone subscribers, and we will continue to acquire subscribers through “Y!mobile.” Furthermore, in line with the increase in data usage, we are strengthening efforts to guide customers to “SoftBank” brand, which provides high value-added services. In addition to increasing the number of subscribers, we will also focus on improving ARPU to expand mobile service revenue. We would like to achieve net additions of at least 1 million for smartphone subscribers per year.

  • In addition to steady customer acquisition, the rate of decline in ARPU is becoming smaller. Regarding the operating income forecast for the Consumer segment in FY2023, considering the reductions in fixed costs and outsourcing costs, can we expect the operating profit to exceed your forecast of ¥780 billion?

    The situation in the Consumer segment has not changed significantly. As we have guided before, the impact of the mobile service price reductions is expected to be ¥50 billion, and there will also be impact including soaring electricity prices. We will implement cost reductions to fill those gaps. In FY2022, as a result of active customer acquisitions, we are seeing extremely favorable growth, so we are assuming similar acquisition costs in FY2023.

  • Will the customer acquisition costs incurred in Q3 and Q4 of FY2022 occur in FY2023?

    In FY2023, we expect the customer acquisition costs to be on the same scale as those in FY2022. The costs include the portion to be capitalized and the portion to be deducted from the revenue.

  • What is the impact of deferred sales-related expenses in FY2023?

    In FY2022, at the time of the initial forecast, it was expected to be about ¥40 billion, of which about ¥30 billion was as expected due to the impact of past expenses being capitalized. In FY2023, the impact of deferred sales-related expenses is expected to decrease, partly due to the impact of the reduction in revenue (lump sum expense processing) due to customer acquisition measures implemented in Q3 and Q4 of FY2022.

  • When will the Financial segment become profitable?

    We pursue the Financial segment turning profitable by FY2025. Since PayPay has many opportunities for business expansion, such as salary digital payment and new NISA, we expect PayPay Corporation to spend a certain amount of expenses for some time.

  • Is the capital relationship of each company related to the Financial segment still in the development stage? What assumptions are you making regarding the capital structure in your medium-term management plan by FY2025?

    The Financial segment is centered on PayPay Corporation, and we are considering initiatives that can leverage the current momentum and customer base. Regarding the capital structure, there are relationships with several partners, and it is not something that can be decided by our company alone. Though we do not have an assumption of the change of PayPay Corporation's capital structure for the medium-term management plan, we will develop businesses to strengthen cooperation with PayPay Corporation.

  • Please tell us the details of operating loss of ¥25.2 billion for Other in the operating income forecast by segment for FY2023.

    It is mainly due to the increase in research and development expenses, as well as some amount preparing for subsidiary-related items.

  • Please explain the share buyback program with the limit of ¥100 billion.

    The purpose is to retire ¥91.7 billion worth of treasury stock. Since the amount fluctuates depending on the stock price, upper limits are set for the acquisition price and the number of shares to be acquired.

  • Regarding the share buybacks, is there any possibility of additional acquisition of treasury stock in the future if earnings exceed the forecast? Also, is it correct to assume that the dividend amount will be maintained at the current level?

    We have not decided on our policy for FY2024 and onwards, but we understand the high expectations for our dividends, and there are also opinions on how to invest in growth. In order to increase management options in the future, the policy is to first focus on expanding profits.

  • Please tell us about strategies related to generative AI.

    We strongly believe that we must take on initiatives related to generative AI. We are always open to technology, and the decisions and initiatives that were made in the turning point of technology have shaped SoftBank Corp. into what it is today. Generative AI is changing fast every day and what we can currently talk about is limited. However, we would like you to understand that we see this as a very important time.