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Analysis of Operating Results

Consolidated Results

Revenue

  • For the fiscal year ended March 31, 2021, revenue increased across all segments by ¥344.3 billion (7.1%) year on year to ¥5,205.5 billion. Revenue increased by ¥52.8 billion in the Enterprise segment mainly due to increased demand for telework-related solutions, by ¥152.9 billion in the Yahoo segment mainly due to an increase in e-commerce transaction value, by ¥73.7 billion in the Consumer segment due to an increase in service revenues, and by ¥48.9 billion in the Distribution segment due to large-scale project orders from the municipalities.

Operating income

  • For the fiscal year ended March 31, 2021, operating income increased by ¥59.0 billion (6.5%) year on year to ¥970.8 billion, with increases seen in all segments. Operating income increased by ¥24.1 billion in the Enterprise segment, ¥9.8 billion in the Yahoo segment, ¥11.4 billion in the Consumer segment, and ¥5.1 billion in the Distribution segment.

Net income attributable to owners of the Company

  • Net income attributable to owners of the Company increased by ¥18.2 billion (3.8%) year on year to ¥491.3 billion. While there was an increase in operating income, this was partially offset by an increase in financing costs of ¥12.4 billion mainly due to losses on valuation of investment securities held by the Company and an increase in impairment loss on equity method investments of ¥7.0 billion that was associated with treatment of impairment loss equivalent to goodwill of WeWork Japan G.K. The increase in net income attributable to non-controlling interests was mainly due to an increase in earnings at the Z Holdings Group.

Adjusted free cash flow*1

  • In the fiscal year ended March 31, 2021, adjusted free cash flow was positive ¥830.8 billion, an increase of ¥451.4 billion year on year. This mainly reflects a decrease of ¥388.9 billion in net cash outflow from investing activities year on year mainly because, while the net cash outflow for the consolidation of ZOZO, Inc. in the previous fiscal year was ¥377.9 billion, the net cash outflow associated with the joint tender offer for the shares of LINE Corporation in the fiscal year ended March 31, 2021, was ¥175.3 billion. In addition, in the fiscal year ended March 31, 2021, there was a cash inflow of ¥312.8 billion from the acceptance of the balance of cash and cash equivalents resulting from the consolidation of LINE Corporation through a share exchange.

[Notes]
  1. *1
    Adjusted free cash flow = free cash flow ± total cash flows relating to non recurring transactions with SoftBank Group Corp. + (proceeds from the securitization of installment sales receivables – repayments thereof)
  2. *2
    Z Holdings Corporation’s free cash flow (including impact of IFRS 16 in Z Holdings Corporation), dividend payments from Z Holdings Corporation to SoftBank Corp. (FY19: 5.4 bn, FY20: 18.8 bn), A Holdings Corporation's free cash flow, net payments for obtaining control of subsidiaries associated with the business integration with LINE Corporation and others.

Revenue by segment

Revenue by segment
Revenue by segment

Consumer segment

  • Revenue*3

  • Segment income

Consumer segment revenue increased by ¥73.7 billion (2.7%) year on year to ¥2,770.4 billion. Mobile communications revenue increased by ¥0.7 billion (0.0%) year on year. This increase was due to the improvement related to Half-Price Support and an increase in subscribers led by the Y!mobile brand, off-set by a decline in average unit price due to discount programs for price plans of the SoftBank brand and increases in Y!mobile and LINE MOBILE subscribers. Broadband revenue increased by ¥15.8 billion (4.1%) year on year. This increase was due to an increase in subscribers of the SoftBank Hikari fiber-optic service. Electricity revenue increased by ¥53.7 billion (69.5%) year on year. This increase was due to an increase in subscribers of the Ouchi Denki (Home Electricity) service. Revenues from sales of goods and others increased by ¥3.5 billion (0.6%) year on year. This increase was mainly due to an increase in mobile device sales.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥2,111.8 billion, an increase of ¥62.3 billion (3.0%) year on year. This increase was mainly due to an increase in the cost of products for the Ouchi Denki (Home Electricity) service, an increase in sales-related expenses related to Toku Suru Support + and campaigns aimed at attracting users and promoting usage, and an increase in provisions related to handsets, while there was a decline in sales commission.

As a result, segment income increased by ¥11. 4 billion (1.8%) year on year to ¥658.6 billion.

[Note]
  1. *3
    In the fiscal year ended March 31, 2021, Electricity, which was previously included in Revenues from sales of goods and others is presented separately due to its increase in materiality, and thus the breakdown for the fiscal year ended March 31, 2020 has been restated accordingly.

Enterprise segment

  • Revenue

  • Segment income

Enterprise segment revenue increased by ¥52.8 billion (8.3%) year on year to ¥691.6 billion. Mobile revenue increased by ¥30.3 billion (11.0%) to ¥305.4 billion, fixed-line revenue decreased by ¥5.7 billion (2.9%) to ¥188.9 million, and business solution and others revenue increased by ¥28.1 billion (16.6%) to ¥197.3 billion.
The increase in mobile revenue was mainly due to an increase in smartphone subscribers following growing demand for telework, etc. The decrease in fixed-line revenue was mainly due to a decrease in the number of subscribers to telephone services. The increase in business solution and others revenue was mainly from increased revenue from cloud services and security solutions atop growing demand for telework-related products due to the impact of the COVID-19 outbreak, along with increased revenue related to IoT products and others.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥583.9 billion, an increase of ¥28.6 billion (5.2%) year on year. This increase mainly reflects an increase in costs following the abovementioned increase in mobile revenue and business solution and others revenue.

As a result, segment income increased by ¥24.1 billion (28.9%) year on year to ¥107.7 billion.

Distribution segment

  • Revenue

  • Segment income

Distribution segment revenue increased by ¥48.9 billion (10.1%) year on year to ¥531.3 billion. This was mainly due to large-scale project orders from the municipalities and solid growth in the focused subscription services such as cloud and SaaS.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥509.0 billion, an increase of ¥43.8 million (9.4%) year on year. This increase was mainly due to an increase in costs of products in connection with the abovementioned increase in revenue.

As a result, segment income increased by ¥5.1 billion (29.9%) year on year to ¥22.3 million.

Yahoo segment

  • Revenue*4

  • Segment income

Yahoo segment revenue increased by ¥152.9 billion (14.5%) year on year to ¥1,205.8 billion. Commerce revenue increased by ¥116.1 billion (15.7%) to ¥854.3 billion, media revenue increased by ¥14.0 billion (4.5%) to ¥324.0 billion, and other revenue increased by ¥22.8 billion (474.8%) to ¥27.6 billion.
The increase in commerce sales is mainly due to sales of ZOZO, Inc. recorded for 12 months in the fiscal year ended March 31, 2021, compared with five months in the previous fiscal year following the consolidation of ZOZO, Inc. in November 2019, in addition to the strong sales revenue of ZOZO, Inc., an increase in shopping-related advertising revenue, and an increase in transaction value in other commerce services.
The increase in media revenue reflected an increase in display advertising-related revenue as a result of sales activities and product improvement measures, despite the continued decline in ad placements due to the impact of the COVID-19 outbreak.
The increase in other revenue mainly reflected consolidation of LINE Corporation.

The total of operating expenses (cost of sales and selling, general and administrative expenses) and other operating income and loss (other operating income and other operating expenses) was ¥1,043.7 billion, an increase of ¥143.1 billion (15.9%) year on year. This increase mainly reflected increases in selling, general and administrative expenses accompanying the consolidation of ZOZO, Inc. and LINE Corporation.

As a result, segment income increased by ¥9.8 billion (6.5%) year on year to ¥162.1 billion.

[Notes]
  1. *4
    In the fiscal year ended March 31, 2021, the Z Holdings Group transferred certain service and subsidiary from the commerce business to the media business. In accordance with this change, the breakdown of commerce and media in revenue for the Yahoo segment for the fiscal year ended March 31, 2020 has been restated.
  2. *
    Transactions under common control are accounted for as if such transactions were executed by SoftBank Corp. and its subsidiaries on the later of the acquisition date of the transferred companies by SoftBank Group Corp. or the opening balance sheet date of the comparative period.

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