SoftBank Corp Q1 2021 Earnings Investor Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Shinji Moriyuki - SBI Securities Co., Ltd., Research Division - Analyst : This is Moriyuki speaking. Unidentified Company Representative Please unmute.

Question: Shinji Moriyuki - SBI Securities Co., Ltd., Research Division - Analyst : You talked about different one-off factors. So I want to clarify that. In Q1, consumer one-off factor is JPY 6 billion in handset, JPY 10 billion for used and OTOKU is JPY 10 billion. So in second half, you will not have this minus JPY 2.6 billion and the other one-off factors. So again OTOKU, the first and half year discounts, I think, will be eliminated. But so JPY 6 billion revision, that's true and JPY 1 billion for first year discount, that's true. But used is less than JPY 1 billion. So what in total? What's the total for one-off factor? Unidentified Company Representative So majority of the JPY 22 billion is JPY 12 billion and JPY 10 billion from the provision and discounts. And the discount, the -- how you -- if you break it down between the accounting changes and the actual discount, I think you had JPY 100 and JPY 10 billion. Well, we used to book JPY 500 for 24 months, that's accounting we had applied, but we have changed this to 120 month JPY 1,000 -- 12 month, excuse me, JPY 1,000, so that's the big impact. But this will probably come down.

Question: Shinji Moriyuki - SBI Securities Co., Ltd., Research Division - Analyst : I understand. Also, what you were saying at the beginning was that in first half, it would be difficult and you'll recover in second half, and you will be able to realize 1% increase in full year level. But Q1, I think it was a relatively large size or high level. But consumer is better than expected. So do you think you're on an upside trend? And are you going to spend money on other measures? Are you spending on cost? Unidentified Company Representative So if you take corona for one example, at the beginning of May, it was mainly after the golden week. We were in the midst of the state of emergency, and we were not sure how long this will be prolonged. We had less traffic at the shops. And that was the direction. So we thought that if they continue until June, this was the scenario. If they continue even further down, this will be the scenario. We have to reduce the cost. And what is the upside that we have different scenarios. And not able to really sense the upside. So we tend to be somewhat conservative. And in terms of cost down, we have not been able to realize the forecast effect yet. So the negative impact we expected to continue until the end of June. So in all business segments, we were a little more conservative than the numbers we have ended up disclosing. Even if in Z Holdings, we thought it was a lot more difficult. We were wondering if they will be able to reduce cost as scheduled. In the enterprise business, they were able to really leverage on telework demand. But at the beginning of May, we did not have that assumption in mind. Therefore, in Q1, we were a little more conservative, especially last year Q1, it was immediately after we went public and the share price level was still sluggish, so in that sense, we wanted to improve in profit. So we were stretching ourselves. I think that was how we were operating. So year-on-year Q1, we thought it was going to be very difficult. So it's true that that's how we have projected Q1 in May. Compared to that, we encountered COVID, and we were able to counter that quite well. So on an overall level, I think we're somewhat a little more bullish. I think we've had a good upside, but Z Holdings was saying this but they had about JPY 10 billion level cost reductions. But actually, they want to -- would have done more sales promotion, and they would have generated more revenue. I think Mr. Kawabe's intention was to do that if it was under normal circumstances.

Question: Shinji Moriyuki - SBI Securities Co., Ltd., Research Division - Analyst : What about organic? Is that also an upside trend? Do you think it's upward looking? Unidentified Company Representative Yes, I think so. In terms of number of smartphones, I think it's very steady. So business trend is not bad. Also, enterprise is really growing, 10% in profit increases for sure. We have strong confidence against that. So business trend is good, including Z Holdings.