On February 4, 2021, SoftBank Corp. (TOKYO: 9434) held its earnings results briefing for the nine months ended December 31, 2020 in the fiscal year ending March 31, 2021 (Q3 FY2020) at Tokyo Portcity Takeshiba, home of SoftBank’s new headquarters.
This earnings conference was the first press conference held since SoftBank announced that CTO Junichi Miyakawa will take the CEO post on April 1, 2021. In addition to President & CEO Ken Miyauchi’s review of the Q3 FY2020 financial results, future CEO Miyakawa outlined his future vision for the company.
Using technology as a compass, SoftBank will strive to create new normals
Commenting on his appointment, Miyakawa reflected on SoftBank’s development over the past twenty years since he joined the company. “SoftBank has grown with the aim of creating a world where the Internet can be used with ease by anyone, anytime,” he said. Observing that the Internet is now critical social infrastructure as the 5G era beckons, Miyakawa stated his aim to make SoftBank a “comprehensive digital platformer” centered on AI when he takes the helm.
He added, “I want SoftBank to be a company that constantly takes on new challenges and evolves while using technology as a compass to create new normals.”
Non-telecom businesses see continued growth
Reviewing SoftBank’s consolidated results for Q3 FY2020, Miyauchi explained that both revenue and operating income increased compared to the same period of the previous fiscal year, despite a difficult business environment due in part to COVID-19. With operating income amounting to 841.6 billion yen in the nine-month period, SoftBank set a new company record.
In light of the company’s progress in the first three quarters, Miyauchi announced that SoftBank raised its full year forecasts for revenue, operating income and net income to 5.1 trillion yen, 970 billion yen and 490 billion yen, respectively.
Demand for digitalization at enterprises and Yahoo Japan drive growth
For the Enterprise Business, Cloud, IoT, Security and other solution-related business domains were key drivers of revenue growth. While the Enterprise Business focused on communications services and stand-alone products in the past, the unit has since shifted to solutions-based businesses in recent years. By doubling its ratio of in-house employees delivering digital transformation (DX) solutions to 21% in the past three-and-a-half years, and by transitioning to a business style of proposing comprehensive solutions to customers, the Enterprise Business recorded a compound annual growth rate of 15% in the solutions field.
To meet the needs of clients facing a range of business challenges, SoftBank established a sales style that draws upon a wide range of products and services to propose optimal solutions tailored for each customer. Furthermore, Miyauchi noted that, thanks to an extensive base of customer touchpoints in mobile communications, commerce, payment and social media, SoftBank’s “B2B2C” business model will promote digitalization both for clients and their end-users.
Turning to network connectivity, Miyauchi said that over the next 10 years SoftBank plans to invest 2.2 trillion yen in 5G/6G networks to promote the full-fledged digitalization of companies in Japan. He added that SoftBank will aim to achieve 90% population coverage with its 5G network by the end of the FY2021 and that coverage areas are steadily expanding.
Due to increased demand for Ecommerce in line with more people staying at home, the Yahoo Japan business saw a boom in shopping transactions, Miyauchi explained. He added that he expects growth to continue in this domain.
Turning to the Consumer Business, Miyauchi said that revenue growth held steady despite COVID-19-related headwinds. He stressed SoftBank’s success with its strategy of offering multiple brands--‘SoftBank,’ ‘Y!mobile’ and ‘LINE Mobile’--to meet the varied needs of customers. Collectively, the three brands saw an 8% net increase of smartphone subscribers, bringing the number of cumulative subscribers up to 25 million. “We want to boost our smartphone subscriber base up to 30 million by FY2023,” Miyauchi added.
Looking forward, Miyauchi stated that SoftBank will continue to execute its Beyond Carrier strategy and expand into new business domains. “We’ll foster new unicorns in Japan by collaborating with investees of our parent company SoftBank Group and other companies,” he said.
Miyauchi also touched upon the “Digital Worker 4000 Project,” an initiative SoftBank is promoting to boost efficiency through the use of digital tools. The program is in effect creating productivity equivalent to the work of 4,000 employees. The project aims to increase work efficiencies and reduce costs by digitizing processes. “By reducing costs, SoftBank will become an even more resilient company,” Miyauchi said.
Contributing to SDGs
Closing the earnings presentation, Miyauchi noted that SoftBank’s digital transformation of industries and technology-driven societal innovations are helping to contribute to the achievement of SDGs. He pledged that SoftBank will continue to help realize a sustainable society through its business activities.
While the earnings conference was his last as CEO, Miyauchi explained that as Chairman starting April of this year he will continue to be actively involved in SoftBank’s business growth. “I’m not retiring,” he said. “Going forward I’ll be focusing on new businesses.”
(First posted on February 4, 2021, updated on February 10, 2021)
by SoftBank News Editors