Softbank Group Corp

Thank you very much for waiting, everyone. Now we would like to start the SoftBank Group Corp Earnings Resource Announcement for the nine-month period ended December 31st, 2024. First of all, I would like to introduce today's participants. From left, we have Yoshimitsu Goto, Board Director and CFO. Kazuko Kimiwada, Corporate Officer, Chief Sustainability Officer, Senior Vice President and Head of Accounting Unit. Navneet Govel, CFO, SB Investment Advisors and SB Global Advisors. Jason Child, Executive Vice President and CFO, Today's announcement is live broadcast over the Internet. Now I would like to invite Yoshimitsu Goto to present you the earnings results and business overview. Mr. Goto, please. Thank you for the kind introduction. This is Goto speaking. Thank you very much for sharing your time with us today. So this marks actually two and a half years. to present the earnings. Before me, actually, our chairman CEO, Masayoshi Son, has been presenting the earnings. But since then, he started saying and motivated to only focus on AI revolution. So he's been working very hard for the past two and a half years. And many people wonder what Masayoshi is doing. And time to time, I was trying to kind of brief you what he's doing, but this time, I believe this quarter, now that we are able to clarify and share the message that Masa wanted to convey, and for that, we have two big events. Of course, our road to ASI is of course our objective and sometime soon that we will be seeing AI is going to be exceeding human beings capability so we've been thinking how should we approach to this road and how can we minimize the time to be spent to come to this era and these are the four focus if we asked to limit to four elements first ai chip of course this is the biggest advantage that we have in the group because design capability that i'm has been building is going to be still very much essential piece for the future development of ai and based on that we have various studies and hypotheses and based on that we are to prepare the computing power and for that we need a huge size of the data center as early as possible so that we'll be able to take an advantage and utilize for the AI evolution and for that power is necessary to support such data center And in addition, robotics, which we've been making an effort for the past 10 years or so, that is another important area together with logistics that the AI can be a big leverage for. So robot is still on the way, but the first things to first, which is supplying the... chip and also supporting the chip for AI. And that comes to the Stargate project announcement in White House. Together with President Trump, we had an opportunity to share our project. And here you see old friend of Martha, Mr. Larry Ellison was also together with him, and also the strong partner, Mr. Sam Altman from OpenAI was also there for that announcement. In the path to ASI, what kind of commercial service can we provide? And that came to Crystal Intelligence. you may have an opportunity to be able to see the earnings announcements by SoftBank Corp. the other day, and there was some explanation about Crystal Intelligence, and also there was an announcement together with Mr. Sam Altman from OpenAI. We had more than 500 companies with about 1,000 business persons joined together to hear and also what they need to say. In addition to that, we had many people from the financial institutions as well. We cannot evaluate right now for this service yet, but we would like to continuously study what would be the most necessary part or the tasks that we need to be solving with this service. So we would like to spend some time for that. And here on that, I would like to share the highlights for this quarter. Important KPI, net assets value, a little bit shy of $30 trillion, and also loan-to-value, 12%. Both are very much steadily progressed. In addition, cash position, this is another important KPI in that this quarter, three months, we have increased. So that gave us the 5 trillion yen of the cash position. Net income, year to date, 636.2 billion yen. Year-on-year basis, a 1.1 trillion yen increase. Number four, as I mentioned, Stargate Crystal Intelligence. Those are the announcements we made. These four points are the highlights that we have done for the quarter and a little bit after this quarter. And let me start going into details with key KPIs. Net asset value, loan-to-value, and cash position. All of those are having very steady progress. As for net asset value, at the end of December end it was a bit short of 30 trillion but if you look at the very latest number 33.5 trillion and you can see here the breakdown up until the end of December breakdown is a little bit of a difficulty in share price but After January, we've been seeing quite a good pickup on share price from ARM and T-Mobile, one of the biggest contributors. And right now, the pro forma basis net asset value is about 33.5 billion yen. I believe this number is very much close to the record high level for net asset value, considering from the start of our business. Of course, it is still just the beginning of the AI era, and the important thing is to keep the momentum. Every quarter announcement, whenever it's good or whenever it's bad, We don't want to be too happy or too sad about the share price volatilities, but I would like to focus on one year, five years, ten years, and make sure that we would like to keep the momentum of increasing. And that would be the most important trend for the investment company like us. Cash position. As you see, in the past three years, we've been keeping a very ample or financial resources. At the end of December, we have some increase in cash position because we had a margin loan capacity utilizing arm share has been increased by 0.8 trillion yen. And also some issuance of bonds, we have increase of 0.4 trillion yen. to cover for the next two years of the bond redemption is about 2.1 trillion yen. So if you look at this number, 2.1 trillion is the cash position financial policy that we've been communicating to the market. And actually, you can tell that this is a very safe level of cash position. This is also an important KPI that's asking everybody to follow. And right now, 12.9%, we are too safe, again, for this quarter as an investment company. We would like to seek for the even higher performance so that it is going to be – I believe that this is a message that maybe we can make a little bit more challenge for the equity investor as well as the credit investor.

Next consolidated results. Gain on investment, income before income tax, net income, and net sales. We are making steady growth in all areas. As a holding company, we are not really paying too much attention on sales, but the gain on investment was up by 2.7 trillion. Income before income tax, up by 1.1 trillion. Year-on-year net income, we posted 636 billion, up by over 1 trillion yen. So again, compared to the last same period, we saw a huge improvement. Looking at the numbers by the quarter, however, you see some ups and downs. In the third quarter, we saw a loss in investment and a net loss as opposed to gains. but this is a very small aspect of the total picture. If you look at gain or loss on investment more in detail, for example, two numbers, investment business of holding companies and SPF, which comprise of this number mainly, Vision Fund posted loss of 339, and investment business of all the companies posted 108 billion loss. But this 108 billion loss by investment business of all the companies, if you look at in detail, we posted a loss of 377 billion of Alibaba shares because the share price went down. But remember we monetized Alibaba share but we still have some shares for the contract So the value of share price and value of derivative we have to look at both Down of share price is presented straight here And team over share went up by, sorry, went up by 185 billion. So net-net, we lost 108 billion. But when share price went down, derivative value goes up. So even though we saw a loss in terms of investment business of holding companies, especially looking at Alibaba, Even though we saw a loss of 339 billion, but we saw also derivative gain of 686, then you can say the numbers are netted out. So when the term will be expired, we will see all net out and zero. you could exclude Alibaba at all, then you could see the result of our in real-term performance. And impact of foreign gain or loss on net income, which could be very significant, Foreign exchange rate is a different animal compared to corporate performance and corporate management. As yen gets weaker, we posted 540 billion loss. pushing down net income. That was the result of third quarter. Yen was 142 yen per dollar as of end of September, but it got even weaker down to 158 as of December 30. That had a positive impact on NAV, up by 3 trillion, thanks to the share price and also foreign exchange rate. From accounting perspective, BKY has positive impact on equity, but negative impact on consolidated net income. Now, Sopank Vision Fund performance.

Thank you.