Full Year 2024 SoftBank Group Corp Earnings Call
Seven times, so revenue chip shipments and also the engineering so as a company.
Has been diebold in growth.
So those are the fact basis and.
And for the future outlook, how do you see in here.
Recently announced that their earnings results announcement also provided guidance.
For first quarter fiscal 2024 revenue is expected between 30% to 37% increase.
And for the full year basis for fiscal 2024 revenue is expected to increase by 18% to 27%. So here, we have Jason on a stage, including others like give me rather than have neat we Oh finance people, we are basically concept.
But the people here on the stage and are based on that Conservative view, but at the same time that we do every effort to be able to achieve the upside at the same time.
And also like to share with you some numbers for the consolidated results.
First consolidated result for FY 'twenty and tier three net sales was almost six trailing him and you see it a numbers gain and loss on investment income before income taxes net income or net income for FY2023.
Actually in that the loss was recorded at 227 for us a it wasn't a big.
But the English if you look at the change.
From the last year.
Net income improved by 742 billion.
So compared to FY 'twenty, two we have a meet a booth.
Good progress.
Speaker Change: I think our the good progress as well, Sean and the quarterly results from them.
Speaker Change: Quarter, one through quarter four.
Speaker Change: Quarter four net income was 231 billion income before income tax was negative 206, because mainly due to reversal of deferred tax liabilities.
Speaker Change: In any case for crude oil the three in a quarter for the core debt plus numbers in terms of net income.
Speaker Change: Impact of changes in arms, a share price I P. O us a huge event as I mentioned earlier, so just to remind you impacts of the I M. I P. O from the perspective of our consolidated P. L changes in the stock values are not record.
Speaker Change: Did it because we have over 90% of arm.
Speaker Change: It means is our subsidiary but in terms of our net asset value on Nab of course value is reflected in the number of shares held at times number.
Speaker Change: Sorry, the share price is reflected here.
Speaker Change: Our loss on investments and net income on quarterly basis is shown here.
Speaker Change: As I mentioned earlier for the two consecutive quarters are we recorded a net profit and the Orange line shows gain or loss on investments of course, it goes ups and downs.
Speaker Change: But.
Speaker Change: In general.
Speaker Change: It's been.
Speaker Change: Stabilized.
And Debbie you want to have a there's a trend on the.
Speaker Change: Positive aside going for the gain or loss on investments Orange is investments business of holding companies, whereas the bloom.
Speaker Change: Indicates Softbank vision fund as you can see.
Speaker Change: If I turn to attend to choose they recorded.
Speaker Change: Over five agility them.
And it improved 267 billion, which was a huge improvement over the last year.
Speaker Change: And investment business are a holding companies in orange.
[noise] reflect.
Speaker Change: Alibaba.
Speaker Change: So again the message here is a huge improvement off of Softbank Vision fund.
Speaker Change: On a quarterly basis.
Speaker Change: Yeah.
Speaker Change: Rather than a annual basis.
Speaker Change: For the.
Speaker Change: Whole ear.
Speaker Change: The demonstrated improvement trends, especially S V F.
Speaker Change: Now talking about the key indicators are three important arcade P is the first net asset value or NAV.
Speaker Change: As of March and it's almost 28, Chilean and doubled in the last year loan to value L. T V.
Smaller number is the better as of the end of March eight 4% or 11% as of March 2023, So we have shown improvement.
Speaker Change: Over.
Speaker Change: Three percentage point cash position decreased a little bit.
Speaker Change: But I believe that this is contributing to a bigger net asset value.
Speaker Change: And if you can see a change in net asset value on the waterfall chart.
Speaker Change: Main driver of the increase includes Oh.
Speaker Change: Increased about you.
Speaker Change: Which is about $10 eight trillion and Forex.
Speaker Change: Most of all the assets are U S dollar denominated and so because of the weaker E M.
Speaker Change: From net asset value perspective, we are enjoying a positive a number of instruments are a forex.
Speaker Change: All foreign exchange.
Speaker Change: If our.
Speaker Change: Not out of our control.
And the $3 three is not bad or good it just a fact of the market condition.
Speaker Change: Going forward.
Speaker Change: It's likely that JV and well make an investment in dollar term.
Speaker Change: So we are not really a focusing too much on hedging, but the more important thing is to communicate well with you or how much impact it would be easy reflected on our net asset value in June was a forex.
Speaker Change: They're talking about Forex.
Speaker Change: From the perspective of an a b and accounting.
Speaker Change: On N V.
Speaker Change: Weaker Japanese yen increased NAV by 3.3, Trillium on accounting basis, especially when it comes to consolidated net income.
Speaker Change: Weaker yen.
Speaker Change: Decreased net income by seven Chilean whereas increased equity by two Julien.
Speaker Change: The yen was we got from 133, one year ago 250 of them a lot of us are the impact of Forex.
Speaker Change: Now loan to value, which is an indicator of our safety enough. If you will.
Speaker Change: A L. T V. Currently is eight 4%.
Speaker Change: It's almost record low from our companies are prospective.
Speaker Change: On a quarterly basis as you can see on this chart.
Generally speaking it's been improving.
Speaker Change: And the cash position is.
Plenty.
Speaker Change: And we have the capacity to try a lot of new things, but I'll talk about that later.
Speaker Change: Yeah.
Speaker Change: About our financial policy and the fine national disciplines, So we want to strike.
Speaker Change: Balance between a safety net and gross.
Cash position as I mentioned earlier, we have maintained a high level, which is around $4 seven or chileans in fourth quarter.
Speaker Change: This chart shows the change in composition of asset halogen.
Speaker Change: As you can imagine from the history of net asset value incentive 10 G.
Speaker Change: When we.
We had a lot of Alibaba shares on our balance sheet.
Alibaba accounted for 48%.
Speaker Change: In our assets held now.
Speaker Change: Economically perspective.
Speaker Change: Alibaba is almost zero.
Speaker Change: Instead, we have are I'm over 45% not only arm about the vision fund.
Speaker Change: <unk> percentage increased from 11% in 2022 929% insurance agency for.
Speaker Change: This change it.
Speaker Change: Is not simply.
A transformation of the portfolio.
Speaker Change: Yeah.
Speaker Change: Not just simply shifting from Alibaba to someone else.
Speaker Change: Rather it shows.
Speaker Change: Sure.
Speaker Change: Sue AI centric portfolio arm is core of our AI shift and.
Assets held by Us and Softbank Vision fund.
Speaker Change: Also AI centric.
So arm and portfolio companies should create a new ecosystem going forward, that's our view and that's our expectation and that is reflected in this portfolio.
Speaker Change: As I mentioned at the beginning of presentation.
Speaker Change: Changing keeps changing is the biggest or most important our risk hedging.
Speaker Change: Talking about the risk.
Speaker Change: Regional competition.
Speaker Change: It's something that we need to look at as long because of a recent geographic geopolitical situation.
Speaker Change: So China centric risk as you can see has been mitigated.
Speaker Change: Attempted synergy.
Speaker Change: Investment in China, It was over 50% in 'twenty 'twenty and now.
Speaker Change: A majority is Europe middle East and Africa.
Speaker Change: Yeah.
Speaker Change: We have shown all several pie charts, so far and.
Speaker Change: Now, let me talk about the quality of assets.
Speaker Change: I think there's a big difference between them this data.
Speaker Change: Chairs and the listed of sheds.
Speaker Change: Because for the list of the shares of values are clear in the market and our liquidity is high.
Speaker Change: And credit.
Agency is prospective in the rating agencies' perspective, Ah I think those aspects are very important.
Speaker Change: Wouldn't be worth.
Speaker Change:
Downgraded by the rating agency.
Speaker Change: It was because mainly because of you didn't have a long list of companies, but now we have over a 75% on 79% of listed companies in our portfolio.
Speaker Change: JC off for example in the Japanese rating agency raised the other outraging. So I believe that this should improve our credit.
Here on our investment strategy.
Speaker Change: Uh huh.
Speaker Change: Martha.
In the past few yes once in a while he comes to the public and talk about a G. I you may recall.
Speaker Change: This is studdingsail artificial general intelligence and this is.
Speaker Change: 10 times over the human intellectual and that can be achieved within 10 years that's.
Speaker Change: Masa mentioned Oh, his keynote speech, but most of our girl loves sure.
Speaker Change: And after then.
Speaker Change: Into India. So in addition to this 10 year obey G I.
Speaker Change: 10 times 10000 times.
Speaker Change: Oh, Dear human intelligence.
Can be a bit will be available for a so called artificial super intelligence to be available. That's the kind of a big picture, we have us for gift and right now we've been utilizing chart GBT and so on.
Speaker Change: To see.
Speaker Change: The Oh the hypothesis for the future will be eye in the beef that.
Hal John V E support the changes of the business or changes of the service.
Speaker Change: C O a bomb Rene.
Speaker Change: Also made a speech at the C O C F 2004, and he said yeah.
Speaker Change: Yeah. He's everywhere you can run without Armand that'd be the.
Meanwhile, accepted.
Speaker Change: Hum.
Speaker Change: You know.
He has a great market shows in terms of the design of chip.
Speaker Change: So they are the very beginning of the upstream of the supply chain or semi conductor and that is for my understanding.
And when you look good.
Speaker Change: The direction of D. A.
Speaker Change: For the future there are many issues that we need to solve for example completely.
Speaker Change: Different scale of the AR.
Speaker Change: Computing power is going to be necessary data center is going to be necessary and if you look at this size on your electricity consumption of data centers worldwide was 460 kilowatts and actually if you compare with the consumption in U K in the Nexus of D. It is already exceeding and how are we going to solve that.
Speaker Change: It's kind of issue is something that we need to address.
Speaker Change: One thing of course.
Speaker Change: Generating powerful running the data center is important but.
Speaker Change: Also you can see a different aspect, which is the in the energy efficiency, which is very good at and here are three examples for example, Amazon Microsoft Oracle they are.
Speaker Change: Actually.
Speaker Change: Using a base.
I P afford our products.
Speaker Change: So as a result, Amazon for example, AWS scrubbing is 60% more efficient than competition or competitors.
Or Microsoft Azure, <unk> cobalt is 40% more efficient oracle, 60% more efficient so for them. This is very variable it technology the dummies providing no.
Speaker Change: Nvidia.
Speaker Change: Also.
Speaker Change: Using arm based chip for their data center chips. So net Neil bus the two core is deployed.
And they've been making a costa and energy consumption less dramatically.
Google.
They also announced the Googles first arm based CPU for their data center. They also using out of many of US the two core in the 50% better performance in up to 60% better energy efficiency.
Speaker Change: Yeah.
Speaker Change: So yeah.
Speaker Change: It's no.
Speaker Change: Already contributing a many places for our technology development and service development.
Speaker Change: And how that would be addressing each sector or each industry.
Speaker Change: And that's something that the engineers in the Ah experts and technology is looking into such area mobility Health care service finance logistic money functions. Those are the areas that are relatively easy to understand how it is going to be addressed and.
Speaker Change: And with that that the we'd been invested across various sectors utilizing AI and.
Speaker Change: And also Oh.
Speaker Change: We've been making our investment through mutual funds.
Speaker Change: Focusing going in such areas.
Speaker Change: Yeah.
Speaker Change: And are any.
Business models serve as models technology that the <unk> can contribute to.
Speaker Change: So our investments in vision fund.
Speaker Change: How does about 477 portfolio companies now.
Speaker Change: We used those aims and those are the highlights and focus.
Speaker Change: So it was unless I said.
Speaker Change: Last year it.
Speaker Change: It's like it or not is your is coming is a revolution is coming.
Speaker Change: So kind of a very basic story for us and if that's the case.
Speaker Change: What do you want to.
Speaker Change: Become the lead.
Speaker Change: For the E G a bit.
Speaker Change: Because we believe intend to 'twenty as companies and individuals working on there Joe will lead humidity humanity.
Speaker Change: So that's why that's so we are preparing for the base for them. Another girl. So another step for the company and this is the in visit the Mt. Sofa, you to the fiscal year 2023 to $3 90, the onion boosted so almost a famous last year last year was about will be the only business.
Speaker Change: And this fiscal 2023 or 3.9.
Speaker Change: But on your far right you see the dotted Bar chart a bar graph. This is the total committed kept all of our strategic investments.
Speaker Change: And this accounts for 5 billion so in whole yeah.
In the coming few years, where you would like to invest.
Speaker Change: In this amount and this is a committed amount.
Speaker Change: No.
Speaker Change: This is almost about the same or align with dean visit the amount in this year in the last year.
Speaker Change: So far.
Speaker Change: It will be the plus 5 billion equal to 90, there when you're somewhere that the we've been facing out in that.
Speaker Change: Actually is almost double the size of the fiscal 2022.
Strategic investments.
Speaker Change: I mean this fiscal 'twenty three.
Mi sector, we focused on is the industrial automation and robotics autonomous driving.
So those are the areas that remain the best at a relatively bigger than the others.
Speaker Change: Yeah.
Speaker Change: Each individual portfolio.
Speaker Change: Well, sometimes it become coming from the same six so that they'll be able to show a good synergy in between.
Speaker Change: Rich I will be touching on in a later page.
Speaker Change: And the one example of the joint venture that they would like to introduce you today is a green box systems and.
And these are joint venture.
Speaker Change: Was.
Speaker Change: Done between Synbiotics and the Softbank group.
Speaker Change: Investment in Green books actually.
Is actually coming from decided beyond that I mentioned earlier has a committed capital of the strategic investments.
Speaker Change: So this screen book system is gonna be providing a warehouse as a service.
Speaker Change: To those customers clients. So that's the plan.
Speaker Change: And Ah recently.
Speaker Change: The first site in California has already launched.
Speaker Change: They're making a smooth operation.
Speaker Change: And are we expecting 100% capacity offtake signed.
Speaker Change: Yeah.
So these are the projects that the we all can go one by one so that we'd be able to hub a good lead in terms of AI.
Speaker Change: For the each sector and I believe this is the area, where they do we'd be able to see the good results relatively sooner than the others. So that's something that we will be able to share sometime soon for the results out from such joint venture.
Speaker Change: These are the AI reshaping industrial automation, so Oh, I mentioned like Athene bought the green box or the box you agree all store they are very much in the similar sector, especially they seem boutiques they are.
Speaker Change: In the two and.
Speaker Change: Case handling system with AI powered.
Speaker Change: So pallet things optimization of the politics.
Speaker Change: <unk> is also Oh powered.
Speaker Change: Powered by AI.
Speaker Change: Okay great.
Speaker Change: This is the eight hour, peaking and sortation solutions company.
Speaker Change: Various type of the AR products is picked and sold it.
Speaker Change: Oh, we know automated way and if you take a look at the there on technology, it's quite interesting and old stock.
Speaker Change: Yeah.
Speaker Change: So they are the company with the AI powered module that is RF system enhancing operations and storage without aisles. So these three are.
Speaker Change: Different in a way.
Speaker Change: And also having a very good technology.
And they are a portfolio company.
Speaker Change: In visit.
Speaker Change: From a group and I believe they will be able to have a very good synergies with our existing portfolio companies for the future growth and after may I be the this is relatively recent that we made the investment in the company called wave in UK.
Speaker Change: Hey.
Speaker Change: They are the company.
Speaker Change: Yeah.
Speaker Change: That provides a into in deep learning autonomous driving system and this time must be won't be the only investments around and where you are.
Speaker Change: Main participants.
Speaker Change: And then to be days, the first new in Vista and those so they already have on the existing and beside Microsoft. So are they are they have been very much about a good well they love the aided by many companies.
Speaker Change: Actually they are providing a different type of the autonomous rubbing compared to the traditional autonomous driving technology are very much into and deep learning autonomous driving system on public roads.
Speaker Change: And there is the huge traffic day does well dripping date does.
Speaker Change: Based on the external circumstance, they can make a judgment to do drive.
Speaker Change: So each vehicle.
Speaker Change: Look and think.
Speaker Change: And decide to take our rote. So this is called also attribute people jumping in I would like to show you some video.
Speaker Change: Five years ago, we started wave we have a vision for floating autonomy that truly scale.
Speaker Change: [noise], rather through that required us to fundamentally rethink how we build our tourists.
This result is prototyping and understanding.
Speaker Change: On the first part.
Speaker Change: Essentially we've been able to leverage data to learn how to drive in a way that hasn't been done.
Speaker Change: Those two experiences on the road or a thing that's why it's so important that our autonomous driving.
Speaker Change: This is why a generalization.
Speaker Change: Generalization is the idea of learning or behavior, or a conscious and being able to acquire a new scenario.
Speaker Change: Over the last year, we've been able to show that our autonomous driving system can generalize across to T cells.
Speaker Change: Generalize the different cities and generalized.
Speaker Change: Todd.
Speaker Change: We were able to transfer our system from the passenger vehicle fleet sedan sites with very little extra trading days.
Speaker Change: Generalization is what lets us scale to the world means that we can enter a new market driving new cities and we can adapt to new use cases as the demands of the world change we can do this quickly safely and efficiently.
Speaker Change: [noise] Mcclinton crash huh.
Speaker Change: So the investment in this company.
Speaker Change: In the sector of autonomous driving.
Yeah.
Speaker Change: I believe that there's a service offering or I'll be launched in.
Speaker Change: The world much earlier or bigger than we anticipated and now let me talk about the Softbank Vision fund.
Speaker Change: We saw an improvement of trend quarter by quarter, but in the fourth quarter, maybe quoted at 389 billion loss, but overall in general.
Speaker Change: Especially two years ago we.
We recorded a huge loss.
Speaker Change: Oh, it's a beam on a improvement of trend.
And going forward.
Speaker Change: Aye.
Speaker Change: Want to make sure that this trend is a continuous and that you are the positive direction.
Speaker Change: Cumulative a gain or loss on investments are shown here.
Speaker Change: We want to deliver results on.
Speaker Change: Companies in our pipeline.
Speaker Change: Softbank vision hand went through a very challenging at yes.
Speaker Change: And vision fun to have gone through those challenging environments and they have built their strength.
Speaker Change: And those portfolio companies should we have high expectations for them before.
Speaker Change: We have a free funds be jump on the one big jump on the chin and debt funds, which is much smaller than the other two.
Speaker Change: For vision fund one.
Speaker Change: Are they deliver a very stable result vision fund two.
Speaker Change: They made an investment in a very tough year and.
Speaker Change: They are still expecting a future of growth.
Speaker Change: Our cumulative investment return of our vision fund one is shown here as I can I said before.
Speaker Change: It's been steadily girls and deliver a good result.
Speaker Change: Currently at 106 Buzzy them, if we don't find it you still.
Speaker Change: Under the investment cost of 52.4 billion.
Speaker Change: But as you can see most of their holdings.
Speaker Change: Ara private companies and me Austin, expecting and hoping that mature and grow in the future.
They came back the 12 month.
Speaker Change: We have made a lot of returns.
Speaker Change: And not only existing but also M&A or are there ways for us to.
Speaker Change: Ensure returns.
Speaker Change: Left hand side shows the strategic exits.
Speaker Change: Which was 14.
Speaker Change: And Gaurav M Oh I see.
Speaker Change: Whereas one seven.
Speaker Change: <unk>.
Right hand side shows select M&A transactions or portfolio of companies.
Speaker Change: Yes.
Speaker Change: Recent examples include you.
Cohesive team.
Speaker Change: Which plans to acquire very does data protection business, forming a new leader in AI power to data security and management.
Speaker Change: And also took a P D O N Gacek got merged a too big.
Become bigger Uber Raw go first and it's a matter.
Speaker Change: Through the synergies are we were able to value up of course.
Speaker Change: We want to make sure that lifting or exit or amend a will not have impact negatively on the market.
Speaker Change: But again M&A is one of the ways for us to secure the return.
Speaker Change: Yeah.
Speaker Change: Looking back the public listing.
Speaker Change: A V made it 58 listings I think 50 is a pretty good as a fund.
Speaker Change: And.
Speaker Change: Total fair value of late stage portfolio was 32 billion.
Speaker Change: This.
Speaker Change: Shoot it contribute to improvement of the funds.
Speaker Change: So we will watch carefully.
Speaker Change: And communicated with you how those portfolio companies will go.
Speaker Change: Bike dance fanatics are first cry.
Speaker Change: In terms of vision fund them.
Speaker Change: Our.
Speaker Change: Late stage.
Speaker Change: And funded two has a PPA and other companies are also at the late stage.
Speaker Change: And I P. O I mentioned earlier was a huge success.
Speaker Change: And it was a happy news for our and also a positive impact on the market I believe.
Speaker Change: And asked IP or market condition improves.
Speaker Change: I expect more of listings and the better performances going forward.
Speaker Change: Now, let me talk about the financial strategy before our closing of this presentation.
Speaker Change: This shows the historical credit ratings.
Speaker Change: They are an investment company.
Speaker Change: And if he on just.
Speaker Change: Aggressive.
Speaker Change: And.
Being offensive.
Speaker Change: Avi.
Speaker Change: Might suffer risks.
Speaker Change: From a financial perspective, or we want to make sure that we are ready for any market circumstances and of course recognition by rating agency is very important.
Speaker Change: Not only for the last 12 months, but since we became investment the company.
Speaker Change:
Speaker Change: You want to demonstrate.
Speaker Change: How good we are and the D C Ara.
Speaker Change: Upgrade you to us from a negative to a.
Speaker Change: And I believe that.
Speaker Change: We are committed to our financial policy and our financial disciplines and our position I believe is well recognized by rating agencies like D. C. R.
Speaker Change: Financial policy I believe is a just a summary, and maybe you are board are watching this and this remains strongly the sema.
Speaker Change: We want to adhere to financial policy and figure out what we can do.
Which is very important.
Speaker Change: For FY 'twenty for a financial strategy what is the philosophy what is.
Speaker Change: The thing that we need to stick to.
Speaker Change: The philosophy is.
Speaker Change: Financial management synchronized with investment strategy.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: We cannot be too conservative.
Speaker Change: Like many C F O I try not.
Speaker Change: Not to say, none, but instead, if I say no. It's really no I believe my.
Speaker Change: Our management team understands it.
Speaker Change: So.
Speaker Change: Yeah.
Speaker Change: And I want to.
B.
Speaker Change: Rudy Fora implementing our financial strategy as much as possible about if I believe it's no I would say no.
Speaker Change: And.
Speaker Change: Financial Principles, Inc.
Speaker Change: Include in there.
Speaker Change: Turning to financial policy.
Speaker Change: And flexibly respond to all environmental changes.
Speaker Change: What are the different options.
Speaker Change: And building trust with each stakeholder.
Speaker Change: Of course, there are different kinds of stakeholders.
Speaker Change: Especially in shareholders and.
Speaker Change: Don't hold us.
Because money from our bondholders and our stock market Crazy market.
Speaker Change: We need to closely communicate whether those two markets and market players.
Speaker Change: And then we don't.
Speaker Change: Man if I may.
Speaker Change: The financial institutions, we want to make sure that we have a strong a trusting relationship with those stakeholders.
Speaker Change: So we want to pursue the optimal balance between shareholder returns and the financial improvement now talking about FY, 'twenty or 'twenty or full financial strategy.
Speaker Change: For those.
Two stakeholders bondholder and the shareholder the most important the value is.
Speaker Change: To expand the future net asset value.
Speaker Change: I believe that the both all stakeholders shareholders and bondholders agree with our approach or our focus on expanding future N E beam, while we are protecting what they need to be protected and we want to.
Speaker Change: Cute our financial strategy.
Speaker Change: Loan to value eight 4%.
Speaker Change: Yes, maybe too low to be honest choose save so while maintaining a safety net we want to be aggressive when needed it.
Speaker Change: And in order for us to grow the group overhaul could it started she is also important.
No the only utilizing our corporate credit.
Speaker Change: But also.
Speaker Change: Verities of assets and are excellent our subsidiaries.
Speaker Change: Oh, we can leverage those all subsidiaries.
Speaker Change: And the non recourse financing by utilizing assets.
Speaker Change: So we want to be active in the use I use nonrecourse financing to support the strategic investments.
Speaker Change: We need to.
Speaker Change: Keep in monitoring our portfolio to make sure that quality of assets are maintained and monetization and we investment that's kind of a cycle is a very important.
Speaker Change: And.
Speaker Change: And we expect the funds and subsidiaries choose focus selected areas and maintain the quality of assets.
Speaker Change: I believe that they can do that.
Speaker Change: To summarize for the last year first.
Speaker Change: As of March 31st 2024, net asset value reached near record levels.
Speaker Change: I P O was completed and the share.
Speaker Change: Has.
Speaker Change: When it's up.
Speaker Change: Beat maintained financial safety.
Speaker Change: We resumed our new investment.
Speaker Change: Three 9 billion.
Speaker Change: Annually and also we have.
Speaker Change: <unk>.
Speaker Change: Billions of a commitment and Softbank vision fund's performance improved dramatically.
Last but not the least.
Speaker Change: Let me share with you on the slide.
Speaker Change: We are going to have AGM in June and the sense myself as the chairman.
Speaker Change: All of the AG Emma.
Speaker Change: As the chairman.
Speaker Change: I think of myself, well I'll make a presentation in front of you.
Speaker Change: And.
Speaker Change: Please stay tuned.
Speaker Change: That's all from myself. Thank you very much for your kind attention.
Speaker Change: Yeah.
Speaker Change: Thank you now we would like to take questions.
Speaker Change: First of all we would like to take questions from the floor.
Speaker Change: Please wait for the microphone and start with your name and affiliation.
Speaker Change: For those who are on insulin.
Speaker Change: Please Prez resend button and wait for your name is called.
Speaker Change: Also please refrain from connecting to other live stream to avoid any occurring.
Speaker Change: You can start pressing raise hung button now.
Speaker Change: And also if you'd like to withdraw your question. Please press law, hence button.
Speaker Change: If you are joining in Japanese soon please ask vishal in Japanese thank you.
Speaker Change: And also we would like to take up to two questions per person. So that we can take questions from as many people as possible.
Speaker Change: Now we would like to take questions from the floor. Please raise your hand, if you have any questions.
Speaker Change: Second row from the front.
Speaker Change: [noise] I'm N J from Bloomberg's, Thank you very much.
N J: I have two questions first I haven't Fisher Mr. Goto.
N J: Yeah.
N J: I would like to ask for your directions in terms of the the investment from the SPG and investment from mutual funds in case of wave. It was invested from Softbank group.
N J: Well, so what kind of companies are in visits from Softbank group and what kind of companies are in visit by visual funds. So what is the kind of.
N J: Difference in between those two so can I ask you once again and can you.
N J: Explain.
Speaker Change: Thank you first.
Speaker Change: So at the GP investment by Softbank group, and they've just been baby's own fund.
Speaker Change: So if you invest from.
Speaker Change: Vision fund.
Speaker Change: You also need to think about.
Speaker Change: The collection of reimbursement how far how soon do you have for the idea of exit story for the company, but when it comes to the investment from our own balance sheet are that is usually a strategic investments how far how much is strategic meetings are therefore these investments. So that's the kind of a <unk>.
Speaker Change: Friends in between those two we have been for the case of wave.
Speaker Change: The decision was made.
Speaker Change: First we discussed was without these technologies in Evo, it's important from a strategic point of view, especially this is autonomous driving a technology based on AI, which is very strategic meetings there.
And do we have any clear view on the exits a story for this company then.
Speaker Change: Answer was no so for such a cases, we decide where do you see this regard this as a strategic investments so that they came from our balance sheet.
Speaker Change: Uh huh.
Speaker Change: If the companies already in late stage at the time of investments well, if we have a clear view in terms of the exit story.
Speaker Change: And how about third parties, a variation of what it would be in a clear way than that though we may consider a relatively from the bedroom and fund investments. Thank you.
Speaker Change: My second question.
Speaker Change: That's neat.
Speaker Change: Oh, I see that in the fourth quarter, the disposals or greater than investments our investments were at 120 million and disposals were at $2 5 billion I'd like to ask.
Speaker Change: Investment plans for the vision fund in terms of timing when do you think investments could pick up and what kind of companies.
Speaker Change: So we're looking at thank you.
Speaker Change: Thank you for your question I'm Jay.
Jay: So in terms first in terms of.
Speaker Change: Monetization or dispositions and then secondly on the investing pace.
Jay: So on the dispositions.
Jay: As you know our fund one we're now in our seventh year. After having launched in May 2017, and if you look at the lifecycle of an investment we invest in private companies.
Jay: And then hopefully over time, they will publicly list and once they publicly list. There's typically a six month lockup period.
Jay: After that we would monetize those investments and given our ownership percentage, especially in vision fund one companies where for example, the average could be about 20% equity ownership.
Jay: We cannot sell them in a relatively short timeframe because that will impact the stock price. So what we typically do as we exit them over a period of time.
And what you are seeing now is because we are in year seven of the life of a fund one and we have had 50 listings public listings cumulatively across all of our funds.
Jay: A lot of these companies are public and we are monetizing them gradually.
Jay: It does not accurate to say that we are doing more disposals or monetization. It's just the natural course and investing lifecycle.
Jay: And the company the company goes public and then overtime we show.
Jay: Because we are in year seven of 12 to 14 year life of a fund it's natural to see quite a few monetization.
Jay: Then in terms of the investing pace in 2023, we had a pipeline of 300 companies that we looked at we looked at a number of companies.
Jay: To invest in and our criteria is very clear that Samsung said, we invest in companies at the forefront of technology that are leveraging or using artificial intelligence.
Jay: So we look at the quality of the technology stack, whether or not they're using artificial intelligence, whether or not theres, a strong product market fit.
Jay: The weather they have positive unit economics, and whether they have a positive track record of execution from the founders and leaders of the company.
Jay: So our threshold for investing is very high and we're continuing to look at opportunities. We have a very robust pipeline. We have already made a number of investments in 2024, and we're going to continue to do that.
Thank you.
Speaker Change: I think that's it thank you very much.
Speaker Change: Any other question.
Speaker Change: Plus you mean from a T V. Tokyo in Q4, taking on my questions go to sung.
Speaker Change: You mentioned that the financial guys are all conservative.
Sung: And I think the most aggressive person who is not here.
Speaker Change: Rich.
Masa why my size and not hear what my son is doing what he is doing if you could share with us that'd be great because investors want to hear directly from masa about.
Speaker Change: His message should we wait until a G M.
Speaker Change: The second question Softbank is.
Speaker Change: Shifting from investment company to AI company I think.
Speaker Change: That's the message you want to deliver so when can we see clearly you are now a company of course vision fund performance is still not perfectly well, but one can be see it acts as a result of good results all the your investments as in <unk>.
Speaker Change: When the company and now you are AI company.
Speaker Change: Thank you very much for your question.
Speaker Change: First about the Martha.
Speaker Change: Most of it has not been.
Speaker Change: Presenting financial results for some time and.
Speaker Change: I may not be enough to fill his shoes.
Speaker Change: And the last time, he was presenting financial results.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: He mentioned that he wanted to focus on thinking what a softbank group can do choose to leverage.
Speaker Change: The move up.
Speaker Change: Oliver.
Oliver: And I have been talking with him a lot.
Oliver: And.
Oliver: Yeah.
Oliver: As Softbank group, what can we do in the era of AR.
Angie I and what tell me Jay.
Oliver: Maybe this is something to do you you whether your second question what is a AI company.
That's the question.
Oliver: Of course, we are in the investment company and.
Oliver: I mean, it won't you.
Oliver: One two.
Oliver: Neither.
Oliver: The era of AI in many ways and so what role should we play.
Oliver: And what kind of role on my side should play.
Oliver: We are a we have been thinking about them.
Oliver: And.
Oliver: Going forward.
Oliver: Yeah.
Oliver: Yeah.
Oliver: We need to deliver the results on our thoughts and when will it happen of course, it's hard to say.
Oliver: S. I E G I should've come in 10 years 20 years.
Oliver: A major milestone we won't you.
Oliver: The ETA and the AI era together with a R M centric companies.
Oliver: Give us.
Oliver: Some more time and to be patient until you hear from him directly I don't know how much and he can say, but at least at our next AGM I believed that that he can share with you here's the thoughts of the moment.
Speaker Change: Thank you any other questions.
The very front row person please.
Osama: My name is Osama from Nikkei business. Thank you for the opportunity I have two questions about share price.
Osama: So recently.
Osama: It's kind of a bit of a slow down these days and how what is your opinion on how they look at this are the recent.
Osama: Recent share price and my second question because.
Osama: The slowdown of the surprise, probably because of the downward.
Osama: Predictions or the expectations down the market consensus the beginning of the increase in share price was because of the good share price increase in the beginning and so how do you look at the sharp rise for your the impact to your share price.
Speaker Change: Thank you.
Speaker Change: Yeah.
When it comes to the share price fluctuation.
Speaker Change: I don't become too happy or we don't become to set for the short time period the share price movements.
Speaker Change: But that of course is an important agenda.
Speaker Change: Is that we have many more things to do in terms of making of our stakeholders happy shareholders and bondholders.
Speaker Change: So a competitor and that's not the value share price its discount that so many people call that softbank discount.
Speaker Change: And that's holding this softbank discount is something that we have been facing and addressing this is one of the biggest agenda for us so it's.
It's not that short time period of the shoppers, but rather that do you like to be more focused on the.
Speaker Change: A narrowing of the Softbank discount and when it comes to the impact from the arm share price.
Speaker Change: Rig.
Speaker Change: Of course, there must be some impact because is taking.
Providing the biggest value to our group.
Speaker Change: And.
Speaker Change: We are very much are impacted from them and share price.
Speaker Change: But at the same time.
Speaker Change: We are not.
Speaker Change: Do you sense it to be in terms of the shape is it in a short time period for them. So rather that the way you would like to focus more on the mid to long term period the growth in them and as a result.
Speaker Change: We believe that they will be able to organically are able to grow our in our group companies as well then I believe that the overall Softbank group Buddy.
Speaker Change: Many are coming from but also that's going to also enhance the other group companies grow and also the portfolio company for those that are still a private company may have are also good developments for the future value of the Softbank group. So that's something that we'd rather like the.
Speaker Change: Gus Moron.
Speaker Change: Yeah.
Speaker Change: Thank you well can you kind of and you had a question.
Speaker Change: Yeah.
Asahi newspaper: And then are there from Asahi newspaper I. Thank you for this opportunity I have two questions first.
Asahi newspaper: To get the song.
Asahi newspaper: The balance of our being offensive and defensive.
Speaker Change: Rich you said at the last year financial results announcement and he also mentioned back then you wanted to turn to more aggressive from that perspective.
Speaker Change: Yeah.
Yeah.
Speaker Change: You turn to aggressive and eventually even though you saw improvement about the Sterling you recorded a loss so what's your thought.
The second I think that that is a report from the U S is it.
Speaker Change: Development of <unk>.
Speaker Change: Chip for AI and AR U S. The group, who are may get involved and engaged and the development of a chip for and I think that it was a.
Speaker Change: Media coverage, a some a month ago.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: Semiconductor for AI sector or development of the chip for that AI, What's your view on the future potential and Oh watch are the likelihood for you to be more involved in such development. Thank you first about the balance between being aggressive.
Speaker Change: And being a conservative or offensive versus defensive.
Speaker Change: Defensive.
Speaker Change: In the last a 12 months.
Speaker Change: Of course, we want to make sure that Avi.
Speaker Change: Protect ourselves strongly and.
Speaker Change: Being aggressive when needed, which we did I believe them.
Speaker Change: As for the investment I think a $3 9 billion. The almost 4 billion about the same level as the last year on top of that.
Speaker Change: We have 5 billion commitment. So it's equipped effectively 9 billion level of investment, which was a two times to figure out at the end of last year.
Speaker Change: And 9 billion monetary amount.
Speaker Change: In yen terms over one trillion yen so that's a big.
Speaker Change: Ticket size. If you will so we have executed is such a huge investment in the last year.
In the meantime.
Speaker Change: Vision fund two.
Speaker Change: So a huge improvement from all five Chilean loss.
Speaker Change: Almost all.
Speaker Change: No loss at all so again, we delivered a huge improvement in the last year.
Speaker Change: And second the point about our development of a chip for AI, which was.
Speaker Change: On the media and I have no comment to such a speculation.
Speaker Change: Jason would you like to.
Jason: Add something as much as you can.
Jason: Or nothing else.
Jason: I'm, sorry, I don't have anything to add on that topic.
Speaker Change: So can we muscle.
Speaker Change: Okay.
Speaker Change: I thought so.
Yeah.
Speaker Change: Yes. It is okay, I think that the only thing thank you.
Speaker Change: Any other questions.
Speaker Change: Third row from the front.
Speaker Change: My name he is with me from that factor.
Speaker Change: Two years ago.
Speaker Change: The mother, let's saying that he's going to focus on the.
Speaker Change: And I believe.
Speaker Change: He's been achieving they're great numbers, including IPO event.
Speaker Change: And back then.
Speaker Change: He said he's gonna be devoting himself, but he has a time of 400% in and based on that.
Speaker Change: How much is involved in operation you see making a direct injection instructions to him I think he has quite a guy like that but now that the army is a public company and also becoming so large in terms of the net asset value.
Speaker Change: That was how the muscles involved in operations how he.
Speaker Change: Directing.
Speaker Change: That's my first question and the second question is about the rating soldiers they see ours operating in the S&P downgrade. It so it's going the other side so.
Speaker Change: Is it if E.
Speaker Change: Based on the share price it shouldn't be never agreed Tor upgrades. So how you see this a discrepancy or the CFO.
Speaker Change: What is your view on that.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Yes about two years ago, I do recall that that he's gonna be putting all his energy in.
Speaker Change: And that idea or the base concept itself hasn't changed really.
Speaker Change: As I mentioned in my presentation to that.
Speaker Change: Keep IBD in designing chips.
Speaker Change: Is so essential.
Speaker Change: For the full fledge development for the future.
Speaker Change: The product service never be able to catch up is a speed without these chip that's the clear message by Ryanair and also that's the kind of a message from us as well for the future a development.
Speaker Change: Tremendous development I believe.
Speaker Change: So many things he's gonna unnecessary, but the very bottom Barry bass is going to be based chip and their capabilities upgrading such based chip. So like a N V D S or other companies' needs mm capability technology and Harbin.
Speaker Change: Based chip together with the products that they'll be able to provide the latest technology and also for the future a development I believe those clients theory goes as the essential partner for their future development. So.
Speaker Change: Uh huh.
Speaker Change: It's not that the only himself do can do anything.
Speaker Change: We need management engineers members from arm and also the global network of mess up in Tokyo people clients friends.
Speaker Change: So many people.
Speaker Change: <unk> actually contributing.
Speaker Change: To the next service.
Speaker Change: Or any companies for next era of use AI development then it leaves the circumstance what our software can do but softbank can lead that's something that the months I was thinking so it's growing of course growth is probably the most obvious things from you are you in.
Market, but the <unk>.
Starting from I believe that there are many.
Speaker Change: Things that we may be able to create and build around that Jason do you have any additional comments on the muscle involvement.
Jason: Yes, I guess, the only thing I would add is that.
Jason: The world of AI in all the different players.
Jason: Who arm has deep relationships with.
Jason: It is a space that is it's very very early days.
Jason: And I think the needs and the understanding of what each of the different partners that arm has is is something that is constantly changing especially because it's such a nascent opportunity.
So I know masa has been engaged.
Jason: Quite heavily with Purdue.
Jason: Our CEO are in those discussions and dialogue to really make sure that its clear what the opportunity is but also what is.
Jason: Some of the opportunities that both arm and Softbank could provide.
Jason: Provide that might be unique in the market.
Yeah.
Jason: Yeah.
Speaker Change: Thank you. Thank you.
Speaker Change: Okay. That's helpful.
Speaker Change: Yes.
Speaker Change: Second question about rating.
Speaker Change: So the dialogue with our credit rating agency, we are having a very close communication with them.
Speaker Change: Yeah.
Speaker Change: Things like that where you would like them to about the eight.
Speaker Change: What about you.
Does not always match with their criteria and what happened.
Speaker Change: That's always the discussion point.
Speaker Change: The company like Us investment company.
Speaker Change: I believe is very unique.
Speaker Change: When you look at our investment company, they usually do asset management toy they usually do investment fund, but that's the we also do the investment by using our own balance sheet and at the same time operating funds.
Speaker Change: And at the same time, it does have value and looking at the balance sheets healthiness.
And if you see the default of the bond risks and the bankruptcy risk. How you look at that that's the question I think I thought that it's very easy to explain from other point of view, but when they look at the six star I believe that the example is very few they cannot really compare with the peer I believe.
Speaker Change: That's something that's always difficult for S&P do bother us D. C are outside the I believe they.
Speaker Change: Sip one once it hits and they show us they they provided us obviously upgrades. Thank you.
Speaker Change: Andrew.
In the interest of time.
Speaker Change: And now we'd like to take questions from Zuma participants.
Speaker Change: Again to avoid a cool please.
Speaker Change: Do not access to live streaming other than a gym, well Uh huh.
Speaker Change: If you have access to.
Speaker Change: Japanese version of Zimmer, Please ask us questions in Japanese them first and of course, Samsung NH King Please mute and speak thank you.
NHK: Thank you Nicolas she from NHK. Thank.
Nicolas: Thank you for this opportunity.
Nicolas: She got Tucson.
Speaker Change: You had mentioned 5 million.
Speaker Change: Commit tenant I think of that investment is a farmer or buy a softbank group, So 5 billion.
Speaker Change: Is that last year's only or going forward or so what's your view on a softbank group's investment in the future I think the 5 billion.
Speaker Change: Yeah.
Speaker Change: Is the commencement.
Speaker Change: And the contract once I conclude at the end of last fiscal year when it comes to payment.
Speaker Change: Timing of payment some.
Speaker Change: Determined decided and others for example, green a box.
Speaker Change: Oh, that's a joint venture of.
Speaker Change: By Us and the same bocek.
Speaker Change: And for in such a new investment once it's.
Speaker Change: Concrete and once a project as arms get you all we will not make a payment accordingly. So there are different he says.
Speaker Change: Going for Ida.
Speaker Change: The investment by Softbank group.
Speaker Change: That's the financial discipline that I'm talking about the decider.
So so long as we can protect all our safe Janice and financial discipline, I think that amount of investment will naturally.
Speaker Change: Be determined so I think we want to we can communicate with you on quarterly basis.
Speaker Change: Talking about financial discipline.
Speaker Change: Looking at our the Finance report I think you are in a very safe side.
Speaker Change: You resume with investment last year, you said.
Speaker Change: But going forward again, the size of the investment going forward or what's your view, what's your thought on that.
Yeah, we make our investment plan.
Speaker Change: But we don't disclose the such investment the Pam So we cannot say anything about our investment plan, but if I may repeat.
Speaker Change: So a little that's a re tender.
Speaker Change: You need financial discipline, and there should be a capacity for us to make an investment.
Speaker Change: And I believe that our credit investor understand our our financial policy and the discipline and a shareholder or share of investors.
Can also understand so again, how disciplined we are is something that you would like you to keep watching.
Speaker Change: Yes again.
Speaker Change: You are very in a safe position in Germany, although off financial discipline. So can we expect a little bit more aggressive than us going forward.
Speaker Change: Well actually we have made at 9 billion investment, including our commitments. So again like I said I personally I think it's good.
Speaker Change: Good amounts of investment going forward or what we are going to do is to communicate with you on quarterly basis, while maintaining a safe and soundness of our financial position. Thank you.
Speaker Change: Thank you next question from.
Speaker Change: I mean shoot me say Heuga Bloomberg.
Hugo: Yes. My name is Hugo from Bloomberg can you hear me Okay, yes. Thank you.
Hugo: So thank you for the presentation.
Hugo: So from defense to offense.
Hugo: So shifting to offense I believe that has been there kind of a keywords.
Speaker Change: For the last quarter results.
Speaker Change: And when you look at now.
Speaker Change: What is your position once again.
Speaker Change: Results are improving largely.
Which I can understand from today's announcement.
Speaker Change: But how far are you going to go for offensive, which has not been fully communicated to the market. So a G. I S I in each stage.
Speaker Change: While keeping your financial discipline, how much investment are you going to make so in the media coverage you are having a discussion with middle east in the stars or 10 trillion yen are those.
Speaker Change: Are the numbers that we see on the news coverage even that can be a just a long time, but the when you go to the from defense to offense.
Speaker Change: Offense, how much offensive are you going to become that's something that Oh, he would like to ask you.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: So today.
We explain about the financial results in Softbank group and the Ford Credit also explained about the Softbank group level of financial discipline.
Speaker Change: But.
Speaker Change: Also having a variety of the diversification of the financing option.
Speaker Change: We can also.
Speaker Change: Keeping.
Speaker Change: Our credit.
And at the same time.
Speaker Change: To increase the D V D cell. So there are many ways that we can do for example, one a good example can be.
Yeah.
Speaker Change: Project financing.
Speaker Change: It's one thing so project finance means.
Speaker Change: If you built any.
Speaker Change: That's.
Always our buyers at the end then as long as you go to assure this failure then that the bankers will give you money loaned you money.
Speaker Change: In our case.
It could be in Vista is like 20%, 30% equity so that there will be at both to build the structure. So far is that part of it would be the union.
Speaker Change: US then that the work scope exposure can be 230, 320 or thought they would be the only so that's the one example that the we'd be a.
Speaker Change: <unk> able to consider so you did or a weekend utilize in the us it sort of having a leveraged by asset backed away that is nonrecourse to Softbank group, which means that it doesn't damage our credit so it's not always about business size and credit.
Or simply equal.
Speaker Change: So on the way up the variety or diversification of their financing option. We can we could challenge or make a big challenge us well, if we wish to do so so that's a kind of a mind that we have and try to make our steps towards a while so that means that the why are we keeping our financial discipline still we'd be able.
Speaker Change: Or to make any challenges if we wish to do so so keeping our credit keeping our financial discipline. So that the weekend have a good discussion with our rating agencies, while we keeping go our health and that's the soundness of our financials.
Speaker Change: And at the same time, we would be able to consider the challenge or they need projects of course, there are many other agenda that we need to discuss and.
Speaker Change: Hopefully sometime soon that we'll be able to share with you more specific or they have any have any when it's ready.
Speaker Change: Thank you.
Speaker Change: Next.
Speaker Change: I'd like to take questions from our participants.
Speaker Change: At the same thing on soon.
Speaker Change: In English.
Speaker Change: So David from financial Times, a police a mute and speak thank you deviate from financial times.
David: Hello. Thank you very much can you guys hear me.
David: Yes, we can hear you.
David: Can I ask one question on the arm to begin with the Softbank synchrony.
David: Think army needs to go beyond chip design in order for the group to achieve its AI ambitions.
Speaker Change: Thank you.
Speaker Change: This is Jason from arms I'll I'll take that one so I would say no.
Jason: No it does not.
There is you know you've probably heard our CEO Renee talk about you can't run AI without arm, which actually got Tom mentioned in his presentation.
Jason: And some of the proof points are if.
Jason: If you look at.
The number of chips shipped that have AI capability, you know, we're obviously extremely prevalent and if you look at some of the largest most successful products out. There. For example, you know Grace Hopper now recently, Chris Blackwell from Nvidia.
The Grace portion of that of course is designed by by arm and so we're already a very large player in the space. So I would say no we definitely don't need to be to be able to realize certainly the plans that we provided back at IPO and then.
Jason: Of course, you know just last week, we had a strong quarter raised our guidance and then provided a strong growth trajectory going out. The next three years north of 20% and that's all based on the design business, though that we're known for and certainly.
Jason: Have a significant market share at over 50% of all the application processor chips are in and all of the largest AD market. So so we feel we have great coverage.
Jason: And don't feel like it's something that's necessary.
Yes, it is okay.
Speaker Change: Did I answer your question.
Thank you very much.
Speaker Change: Yes.
Speaker Change: Oh, Thank you very much that's all for Q and a session.
Speaker Change: This concludes the Softbank Group Corporation earnings results announcement for the fiscal year ended March 31st Gen. Two Gen three or four.
Speaker Change: The video footage of this meeting will be distributed on demand from our corporate website.
Speaker Change: Thank you once again for joining US Softbank Group Corporation earnings results announcement for the fiscal year ended at March 31st two antigen to four thank you.
Speaker Change: I think that though as I understand.