Unidentified

Company Representative: Thank you very much for waiting, ladies and gentlemen. Now we would like to start the SoftBank Group Corp. earnings results announcement for the fiscal year ended March 31, 2019. First of all, I would like to introduce today's participants. On -- from right, we have Masayoshi Son, Chairman and CEO of SoftBank Group Corp.; Yoshimitsu Goto, Senior Executive Corporate Officer and CFO; Kazuko Kimiwada, Executive Corporate Officer and Head of Accounting.

This meeting is live broadcast over the Internet. Now I would like to invite Mr. Son, Chairman and CEO, to present to you the earnings results announcement announced and business overview.

Masayoshi Son: My name is Son. Thank you very much for joining today.

So since our foundation of the business, so many years has passed. I usually think that, especially around the year 2000 when we have Internet bubble. Our dream and the future vision of SoftBank was something that I was believed in, and many investors who bet on us. And we also made a trouble for them at the time of the Internet bubble. And that made me feel the responsibility whenever I think back.

So for the long time, I made some troubleness and also -- or many people worried. And since then, we have spent so many years. So that's something that always reminds me or think about it. And that also hurt my feeling as well. Since then, Internet industry has grown so far.

And actually, about seven out of ten companies of the number one in market caps are Internet companies. And amongst those, we are still very small company, and I'm still embarrassed to see our business is not large enough compared to those; and still not being able to provide big results to the investors, which is something that I still want to work on going forward. By showing the steady performance in the business of SoftBank Group one by one, I hope we will be able to live up to the expectations of the investors of ours. So based on that, I believe today this meeting shows, including our determination, that this will be our future vision of SoftBank Group. So I hope that you'll be sharing a good time with me.

So now let me enter into the presentation graph. Can you tell what it is? Anybody who understands what this is? I believe that that would be a quite good understanding of SoftBank. Anybody who understands what this is? Is anybody there? Share price? No. It's not share price, something close but not share price. Anybody else? You don't know, right? It's really difficult.

Back in year 1999. We had a peak at year 2000. This is the first phase of Internet journey of SoftBank. Second phase, this is the second phase. And this is the third phase.

So you can see the first phase, second phase and third phase. Looks like share price, but it is not a share price. What do you think? So person who just said share price. Market cap? No, it's not market cap. Market cap and share price is almost a similar, same thing, right? Anybody else? Can you tell? It's quite difficult, isn't it? Please.

Operating income? Close but not right, not quite. Anybody else? Investment assets value, portfolio, close. So let me answer. Let me give you the answer. Today's earnings results announcement, I will talk about the many details, but I want you to remember just one page.

Others -- are just nothing. So you just please remember this one page. And I want you to remember this graph for today. Others are just minor thing. SoftBank Group shareholder value.

So this is the most clear way of showing today's SoftBank Group. With this page, I believe we can talk about SoftBank Group. And this is per share basis, which gives you ¥21,688 per share. So shareholder value is ¥21,000 per share. And this graph, is anything that you believe that a similar trend? Do you see some similarity with other trend? Can you guess? Operating income? What do you think? Is it sales? Maybe you can think of many things, but actually for me this

is it: Internet traffic.

So the shape is very similar to Internet traffic trend. So just this page tells you everything. Other things, you can forget about it. What I want to say most today and what is the business of SoftBank is shown here. So here on, it may be a little bit boring, consolidated results.

And for me, this is nothing. This is really nothing, but being a listed company, we do have accountability to explain, so let me share some numbers. So 5% increase in net sales, and you can see the breakdown. Sprint is quite a large portion. SoftBank KK domestic telecom is large.

Softbank Vision Fund hasn't shown here yet. So net sales. What does this mean? Actually, it doesn't really mean nothing. EBIT, 80% increase. But some people say we're just recognizing those valuation gain of those existing share which has not been disposed, which is also the fact, but under the IFRS, the value of investee, once they increase, that also needs to record in EBIT.

So we follow and in accordance with Internet accounting rules that we are recording such. Better yet, it shows a direction which means we have Sprint and SoftBank KK or SoftBank Mobile business and Yahoo! Japan. We have different businesses in our group. And the biggest contributor to this growth is the Vision Fund. That's what this graph shows.

Of course, other businesses are doing good but are not our biggest contributor. And for long term, which is looking at about 16 years, gray indicates our traditional SoftBank Group business. Of course, it's been constantly growing. So we are not ashamed of that, but like I said earlier, compared to the global Internet companies -- and the top 10 Internet companies globally are far ahead of us, which makes me feel embarrassed because this industry is growing so fast but our growth rate is not that high. So me as a man and from my [pride perspective], it's not acceptable.

But once as SoftBank Vision Fund was launched and SoftBank 2.0 started two years ago, and we showed that direction. And we established a SoftBank Vision Fund and we were now on the -- another growth track. Net income exceeded ¥1 trillion for three consecutive years. Three years ago, we exceeded ¥1 trillion for the first time. And back then, I said with some caution that this performance included some onetime gain.

So we were not confident enough to deliver this performance for some more years, but yet we exceeded ¥ 1 trillion last year. But again that result included onetime effect in the United States. Tax reform saw Sprint had a onetime gain. That's why that helped us to exceed ¥ 1 trillion. But this time, we showed again.

And for three consecutive years, we exceeded ¥ 1 trillion. And for this current term, which is 2019, we are confident that we can exceed ¥1 trillion again. So we expect exceeding ¥1 trillion of net income for four consecutive years once this term is over. Once we overcome a hurdle, we become committed to keep going to that direction. And again, we are expecting to exceed ¥1 trillion of net income for four consecutive years.

That said, like I said earlier, sales and operating income and net income from accounting perspective, I'm not running the business from those angles anymore, like net income, sales and operating income in terms of accounting. Of course, according to the global accounting standard, we are trying to deliver performance by running a business, but the shareholder value is the biggest forecast at the moment when I run the business. Because two years ago, we said that SoftBank Group will transform itself into investment company. And we are running the business since then by looking at only one focus, which is to maximize shareholders' value. Of course, our core business is Information Revolution.

And with Information Revolution, we want to make people happy. Of course, that's the ultimate philosophy of our business. And that remains our core focus and core business, but when it comes to specific numerical scores that we should focus on when we run the business, that is to maximize shareholders' value, that is. So like I said earlier, our ¥23 trillion of shareholders' value, and the formula is like this. We have ¥23 trillion of equity value of holdings, and net debt is ¥4 trillion.

So ¥27 trillion minus ¥4 trillion is ¥23 trillion. That's the formula when we talk about shareholders' value. So we have only three figures. Shareholders' value, ¥23 trillion, is the result, the input are those two, equity value of holdings and debt. So those are the only two numbers.

So we're accumulating holdings of equity value. If you are SoftBank's investor, you're interested in how much the shares that you have in SoftBank become. And we are running a business from that perspective as well. ¥27 trillion minus ¥4 trillion equals ¥23 trillion. That's it.

One of the inputs, which is equity value of holdings, let me walk you through details. What kind of shares we have? How much? Alibaba, ¥13 trillion. In fact, Alibaba alone exceeds SoftBank Group's market cap. And SoftBank Mobile went into public recently. The value is around ¥4 trillion.

On top of that, we have Sprint and Arm. And also we have Yahoo! Japan and others. And finally, we added SoftBank Vision Fund. So total is ¥27 trillion. As you can see here, others, just ¥0.5 trillion.

And others include hundred of companies but all in all, still, ¥0.5 trillion. So that's why I said the number was negligible. So other than others, if

you will: Arm, which was listed up until recently; and Vision Fund, fair value of SoftBank Vision Fund, including outside investors, are recorded every 3 months. So it's effectively public numbers. And equity holding -- equity value of holdings, ¥27 trillion.

And SoftBank Mobile went public. And investors are generating our stock price every day in open market, and that's the value of SoftBank Group. When it comes to net debt. In consolidated financial results, debt of subsidiaries are included when you calculate consolidated financial results. So all in all, ¥15.7 trillion of gross debt, but if you look at Sprint and SoftBank KK, those are listed companies and they are self-financing.

And transaction between parent company and subsidiary is restricted strictly. And SoftBank KK, for example, has their own independent P&L and their own debt; and they borrow from financial institutions, for example, in their capacity. And more specifically or technically, we called it non-recourse, so the agreement non-recourse with bank. So meaning, SBG, the parent company, is -- does not provide any guarantee to the subsidiary that -- who are making any loans. Or SBG, the parent, cannot guarantee because we don't have any obligation.

And if we pay for that on behalf of them, that's going to be damaging the value. So that we keep this nonrecourse debt. As a matter -- as a result, we should take this out from the consolidated debt. So when it comes to the SBG, the parent's net debt is ¥6.7 trillion. And cash we have is ¥2.3 trillion.

So we take that out. That gives us ¥4.4 trillion as net debt. So as SBG, SoftBank Group, the borrowings of net debt -- as a net debt is ¥4.4 trillion. So when you look at the balance sheet of SoftBank Group, many experts, many people tells me that this is very complicated. However, that is because you don't really make an effort to look at the real picture of ours.

I think they are not really open up the eyes. The asset -- we don't have any other assets other than what we have invested as an equity plan to our buildings. Actually, that's not including in the others section so that those are very much negligible. So those does not really have any value. At the same time, we don't have such bad debt as well.

So those assets that we have is those equity value that -- of holdings which is ¥27 trillion. Debt we have is ¥4.4 trillion. That's it. So this is -- this math, as far as you see, this simple math. I think you can tell the shareholder value of SoftBank Group.

So the percentage of the borrowings against the asset we have, which is called as loan-to-value or LTV. So net debt, how much is the net debt against equity value of holdings? And that is now 16%. Right after the acquisition of Vodafone Japan, that was about 65%. When SoftBank -- immediately before SBKK go public, it was around 35% or something, the details set aside. But we were having like 65% of LTV or 35% LTV, but now that -- we are seeing 16%, so which is very healthy.

And amongst all the history of SoftBank Group, I believe that the LTV is the lowest now, which is, I believe, too good. And I believe a healthy level is to keep it less than 25%. So 25% is some kind of a threshold. And we would like to manage the business keeping, managing loan-to-value less than 25%. Loan-to-value is quite important indicator and against the shareholder value or equity value, what is the loan-to-value for us, which is the -- something I always keep in mind.

Financial policy. We have three. So this loan-to-value, we would like to manage less than 25%; and also maintain cash position covering bond redemptions for at least next two years. So we always like to be prepared for that and also secure sustainable distribution and dividend income from SoftBank Vision Fund and other subsidiaries. So these are our disciplines for the, as in financial policy.

And 85% of the dividend ratio, a payout, or compared to the dividend ratio that, compared to the other companies, I believe that, that also matches to the interest of shareholders. So just this

one math: our shareholder value equals to equity value of holdings, less net debt. So only want you to look at this math. On, in addition to that, loan-to-value is another important indicator. So who is the major contributor to add shareholder value is SoftBank Vision Fund.

So as you saw the slide of EBIT, 80% increase. Majority of those are, were coming from SoftBank Vision Fund. So SoftBank Vision Fund is actually the key driver and the key engine for Softbank 2.0. So there are some numbers which I first mentioned about this time. So the past two years since the launch of SoftBank Vision Fund, and now we have more than 80% being invested.

So 80 more companies. Two years ago, that was 0. So only in two years, we looked for global-wide unicorns, and now that 80 companies are our family. And also with the ¥ 100 billion fund, of which ¥ 40 billion is preferred equity which I also mentioned in a previous earnings but I would like to recap once again for your further understanding. So this ¥ 40 billion is not a loan.

So this is the investment. So from our partners, they invested in. So if something goes wrong in SoftBank Vision Fund, ¥ 40 billion is not that we are obligated to repay, which is one of the most important character. And the dividend will be preferred, preferably distributed, which is 7% fixed distribution once again. So this 7% is not the loan or borrowings.

This is like a preferred share. So if something goes wrong, we don't have an obligation to repay as a debt. Let me remind you once again. And this blue portion is the common equity. So it's like a common share for the corporation.

This is something that a majority of the distribution will be -- go to the investor of this common equity portion when there is any profit in SoftBank Vision Fund. And about half of this equity, which is 48%, is actually attributable to the SoftBank Group's investors. So the -- out of the profit, close to half of that is -- it belongs to SoftBank Group investors. So SoftBank Vision Fund. Many people still believes that the SoftBank Group is only a little bit of part of SoftBank Vision Fund, which is 28%, which is misunderstanding or misleading because about half of the profit of SoftBank Vision Fund belongs to -- or attributable to SoftBank Group.

And why it's important, which I can explain in the next page. This light blue part and gray part are investment from limited partners, and they get return. And this is the first time to disclose the performance result. Our limited partners, after [set of] fees, how much return those limited partners will get, which is 45%. Net equity IRR from limited partners perspective is 45%, whereas blended -- LP net blended IRR, which is 29%, on the right-hand side.

Well, 70% -- Excuse me. 7% fixed distribution, and variable distribution are mixed 1 to 1.57, which is common to preferred. So weighted value, weighted average or net blended IRR is 29% because 7% is fixed distribution and 45% is variable distribution. There are a lot of investment funds and -- that are savings and deposits around the world, but there are a lot of investment opportunities in the world. And after fees, 45% net IRR; or even blended IRR of 29%, which is high.

So I don't see many venture capitals or private equities that have as high IRR as ours. On top of that, this level is very high, which is rare if you look at the world. From SoftBank Group's shareholders' perspective, how much performance SoftBank Vision Fund delivered. Since launch of SoftBank Vision Fund, we have accumulated a lot of money. And some people criticized, "You have been too aggressive.

And you can't deliver good results by just investing so much," but we show this result, 62%. Like I said earlier, SoftBank Group's shareholders, half of the blue part that I'm -- showed you earlier is attributable to SoftBank Group's shareholders. On top of that, we get performance or -- performance-based distribution from investment partners. And put them together, from SoftBank Group's shareholders' perspective, IRR is 62%. Every year, by calculating compound interest in the last two years, we have been growing 62% per year.

Again, there are a lot of investment opportunities around the world, but from SoftBank Group's shareholders' perspective -- well, before SoftBank Vision Fund was launched, when I was running the business for the last 18 years -- and IRR was 44%. And 18 years period, every year, on compound basis, 48 -- 44% in the last 18 years. And after SoftBank Vision Fund was launched and since the launch, for the last two years, we delivered even higher IRR than 44% right after we launched Vision Fund. Even though we said that we can go higher than 44%, it was just not confirmed. And it was just assumption, but it's been two years since we started SoftBank Vision Fund.

And multiple companies are -- in our portfolio went public, or we exited from those companies. So we showed this result for the first time to you. And going forward, at the end of March every year, we will update you constantly once a year on those numbers. This number is too high. If you expect 60% annually every year, it's a huge expectation to mean.

So 60% is, well, too good actually, so I have to be cautious. I want you to be cautious. We may not reach as high as 60% next year, but nonetheless we delivered 62% this time. And Vision Fund focuses on AI and Vision Fund focuses on investing unicorns. And Vision Fund focuses on creating synergy.

Easy to create synergies because of those focuses to specialize in AI and to specialize in investing in unicorns. Through AI, transportation, health tech and real estates, those industries. So AI is centered in those industries. And we invested in unicorns. And we invest in number 1 company in respective industry.

And I don't like number 2. From my personality perspective, I can't accept number 2. I need to be number 1. I've been like this since I was kid. So if I try something, I want to be number 1 in that area.

I'm always like that. So our unicorn companies in respective space, in respective countries, those are number 1. And on top of that, they are running around AI. That's why, from SoftBank Vision Fund's perspective, it's easy for us to create synergy. Well, ride sharing is utilizing AI, for example, as you know.

And if things go as planned, tomorrow or early next week, or I don't know if I say the specific date or not, but soon Uber will go public in the United States. So those values will be materialized going forward. Uber is not a taxi company, but Uber is rather AI company which has been recognized and understood by more and more people. I would like to introduce you one company today which you may not know or you may not have heard. This company introduced AI for used cars.

So if you put them together, used cars and AI, what will happen? This is only company in the world that effectively uses AI in the used car market. And this is a brilliant, great company. And I introduce you the founder of this company. This is one of our portfolio companies, and it's I think the first time to bring portfolio companies to the earning results. You have it, okay.

Unidentified

Company Representative: Thank you, everyone. So we all know China has, is a big new car market. And compared with the new car market, the used car market in China is massive; is unmatured; and fast growth, growing, doubling every 5 to 6 years. And is very fragmented with over 120,000 small dealers, on average each 100 cars sold per year. China, we started 3 years ago and we are now or is a leading player in China.

We sold 700,000 cars last year, and we doubled our revenue. And compared with small dealers, how can we grow that fast? The secret is we're trying to be more efficient. First, we're trying to connect individual sellers and individual buyers directly with no middleman. And we, that's why we call ourselves the endgame. And more important, we have AI-based algorithm engine.

We're testing a lot of data. And with that data, we'll have the capability to predict for each typical car how long it takes, what's the chance for that car to be sold on our platform, at what price. And with that capability, we are more efficient. So how efficient? More efficient we are, compared with dealers. And inspection productivity, we're 4x more efficient.

On sales productivity, we're 5 times more efficient. And more important, on the turnover we're 4x more faster. So for you to better understand all these, we'll have a video play... [Audio/Video Presentation] Thank you, everyone. I'll hand over to Masa.

Thank you.

Masayoshi Son: Thank you. Fantastic. Thank you. Guazi has already achieving the platform in the 700,000 cars per year, and that is the growth is doubling every year.

So great scale, great speed and also taking advantage of AI to disrupt the industry. In United States or in Japan or in Europe there is no such company. This is the only one company I have found that -- using AI of the used car market platform. So I believe they will be able to make more surprises in the future. One other example that I would like to share with

you today: medical and AI.

What happens if we combine together? Whenever you try to detect the cancer or if you -- the stage is earlier, you will be -- more possibility to be able to cure. If you go to the stage IV, then that's going to make your -- make the survival rate worse, so important thing is as quickly as possible detect what kind of cancer stays at which body part. So from the blood, we can analyze DNA. The hardware technology is already available from the achievements a few years back. For example, Illumina, which is quite a famous company in the United States, is already -- they are existing as a hardware company, hardware business.

But even you analyze DNA, well, that's just numbers of alphabets, but you need to read those signals. Or you need to read those combinations of alphabets. What does that mean? Identify and also communicate what's happening, which has not been possible, but using AI, you recognize a pattern and decode. As a result, you'll be able to tell this patient actually suffering from, for example -- or some cancers in Stage IV or Stage III, what kind of cancer is that, in which body part? Those kind of things has been available to be more specific. So that -- compared to the conventional way like tissue biopsy, which is becoming more costly -- more affordable and quickly and also safer.

So this Guardant technology has been adopted by all 28 NCCN centers in United States. So this is 100% of NCCN centers adopting. And last year, this company went public. We invested about ¥30 billion. We are majority of the shareholder.

We owns about 33% of this company. And this company went public, and the -- now that the value of ¥200 billion. Since the investments of -- in this company, two year has -- have passed and the value became about two-- six times. So this company is the combination of AI and medical. This is only available in United States, but this can be developed to other market, other countries, so I believe that this company can keep their growth.

So these are the two examples that I picked for this time, but we would like to accelerate growth with such a cluster of number one AI strategy. Also, I'd like to encourage synergies in-between those companies so that we will be able to create a great ecosystem. And that ecosystem starts up and running. So fund -- SoftBank Vision Fund went very well. So now we are looking at the SoftBank Vision Fund 2, and this is the first time that I -- officially announcing that we would like to start preparing for the establishment of the SoftBank Vision Fund 2.

So the size, structure, timing, which has not been decided yet. And we will be discussing that in details going forward, but roughly speaking, we would like to look at about a similar size with Vision Fund 1 and also investors. Because we made great results and performance in SoftBank Vision Fund 1, so majority of the investors also shows the high interest over SoftBank Vision Fund 2. On top of that, many investors around the world shown their interest to be part of SoftBank Vision Fund 2 as well. So such invoice has been also coming to us, so sometimes soon that we would like to start establishing this.

So most likely that the way we would like to start, by ourselves, 100% SoftBank Group; and invite the other investors on. That's the kind of a way I am thinking right now, but that's something that needs to be discussed further, and that's going to be worked on. So similar size that we would like to create this Vision Fund 2. And future vision. I just want to show you big picture first.

Like I said earlier, top 10 market cap in the world. Of them, 7 are Internet companies. It was unexpected 10 years ago, but those Internet companies revolutionized only 2 industries, which is advertisement and retail for consumers. For example, in United States GDP, advertisement is just 1% from U.S. GDP perspective; likewise, retail 6%, only 6%, in U.S.

GDP. So industry obviously GDP 1% and industry which has only 6% of U.S. GDP, those Internet companies revolutionized. But by revolutionized only 2 industries, small industries, in the U.S., they became 7 out of top 10 market cap in the world. But AI will revolutionize every industry, not only retail, advertisement but also any other, many other industries.

And talking about AI, what kind of business model you have, you may ask. To put simply, AI equals prediction. AI is useful, best in prediction, at least AI at the moment, prediction. So AI is most effective in terms of prediction. To put simply, to put in one word, AI is most useful when you predict something and what you want to predict.

In the case of ride sharing, for example, predicting demand will be most useful. By predicting demand most effectively and most optimized way, you can create supply. You can bring supplies, which has been done by other companies in, very less effectively. For example, in the case of ride map, ride share, for, Excuse me, you create heat map. In New York, for example, on the Fifth Avenue, 7 p.m.

on Friday this week, how many customers could be that demand can be predicted. So prediction 1 week ahead or 10 days ahead or 1 day ahead or 15 minutes away, most useful. So within 15 minutes -- so at the crossroad of New York Fifth Avenue and 41st Street. And how many customers will be there, could be there on Friday next week? And that's demand side. And on

supply side: So if you deliver cars over there.

So even before customers raise their hands, cars can be reaching there, but if you call a taxi -- and it will take 15 minutes or 20 minutes until a car gets arrived. But Uber car and Grab car and DiDi car, they can reach there in only 3 minutes because there was a prediction in the background with AI. So you can't do it without AI, with only human. On top of that, dynamic pricing is provided every minute. So like Mark mentioned earlier, dynamic pricing in used car markets.

So they inspect probably 260 points of a used car. So what's happened on wheel. And what is the condition of paint? So every time they check 1 point of a used car, you can predict how much this used car can be sold in 10 days or in 2 weeks. You can predict with AI. And then you will realize how much you should have paid for this used car now to sell that price in several days ahead.

You can't do that if only human brain. So in the case of EGO or shogi board game, AI can help you to predict what kind of play this opponent will do. So AI is most suitable and effective in prediction. And in order to enhance the accuracy of prediction, not only communication between human and human but communication between human and thing and communication between thing and thing which is IoT. So you have to collect every possible data available.

Arm, for example, in next 10 years or so, they will deliver about 1 trillion chips in the world. So in 10 years, Arm, 1 trillion chips will be delivered around the world, and those chips will give us a lot of data. It's population -- globe population is only 7 billion. So beyond the number of population, there are so many data. And the chips of Arm, for example, will give us tons of data.

And there's a huge gap between companies that are effectively using AI and not. Traditional Internet is not Internet as intelligent. Internet in the past were just knowledge based. So because the Internet is more for -- more like knowledge basis, you can search something. Or you can find pricing, prices of something, but going forward, the Internet will connect information and collect the data.

And utilizing intelligence, AI will predict things in the future. So going forward, 5G and 6G and communication infrastructure will be enhanced. And around the world, you will know what's happening realtime around the world. So I believe that it will be a huge development going forward. So coming back to the point of market cap and shareholder value.

Well, in the case of auto industry, market cap of auto industry is about $1 trillion or 100 -- Excuse me. ¥10 billion. So what's created the most? This market cap of auto industry is correlated to car production volume most in the last 25 years or so. So market cap of auto industry and car production volume are most correlated, as you can see on the graph. So that's the market cap of auto industry.

And likewise, not only auto industry but, let's say, manufacturing industry. Market cap of manufacturing industry is $22 trillion or 20 times bigger than auto industry. That's the manufacturing industry's market cap. In the last 25 years, it grew 25 times. And in the auto industry it grew by 20 times.

So market cap grew 10 times, and all manufacturing industry grew by 20 times in terms of market cap. So looking at the same latest 25 years, how much growth we have seen in

Internet industry: 1,000 times. So that is why about seven companies out of 10 companies in the top 10 is Internet companies. And that's why that those companies are making big growth in past 10 years. And what comes -- what makes that happens -- mean is that, we believe, Internet traffic -- I believe that Internet traffic is the one that are making the similarities with the market cap growth in Internet companies.

So for the auto industries, that relates to car production volume. Manufacturing companies, that relates to GDP or the manufacturing. And for Internet companies market cap, that relates to Internet traffic, so forest for the trees that many people said. Many people here. I believe you are all the experts.

You may see the everyday share price. And you may be happy or unhappy in every single or, minutes of news in U.S., China trade relationship or a tweet by some presidents. Or FDR rates have moved. So those are the micros, we believes. And you may be happy or unhappy or ups and downs because of those news, but for me, that may be too narrowed.

If you become wider, or if you've seen wider place, you may see 10 times, 20 times, 1,000 times of movements there. Where you should put the money in, should you put the money in 10 times company or 20 times growth company or 1,000 times? Or is it 1 time growth company? Or there are some companies that the growth is less than 1x. In industry of less than 1x growth, there may be some great person or businessperson who are restructuring the company, but for me, why do you use your wisdom to such a difficult industry if you have some specific reason how you have to do that? But I don't think that's the right way to use your wisdom or intelligence. Why do you need to share your time or passion to the company which only show 1 time growth or less than 1 time? Why don't you put your wisdom which, put your time to the companies which are making growth? Because it's already difficult enough to manage the business. Why do you choose those even more difficult businesses which is not making any growth? I think that's the waste of passion, waste of time.

For me, I'd rather like to put more passion to companies 20 times growth, 1,000 times growth and so on. 156 exabyte. So from, starting from 180 terabyte, it reached its growth 1,000 times. If you look back, I think it can be just a rounding error. You are speaking such a small world.

That's the kind of things that you may be saying in 20 years. What I'm trying to say here is that Internet traffic is not the limit yet. It's still growing. It's still expanding. And actually, it's not a simple Internet traffic anymore.

It's which is added on with the artificial intelligence and evolving even further. So in the chess world, pawn to king, for example. So that's a big change from pawn to king. So Internet traffic was just data traffic exchange without any intelligence, but this data, it's not only to search for the information, but now you are adding the artificial intelligence. And now you're predicting.

So the traffic is going to be reborn to that way. So in the coming 10 to 20 years, we believe that traffic, that types of traffic is explosively increasing to the tremendous size. That's I'm quite sure and convinced that time, that era will come. In past 25 years, without fail even one time, we see any drop of Internet traffic. Share price is the evaluation by people, so it comes ups and downs, but still it's increased by 1000 times.

Internet traffic is not ups and down. It's ups and ups and ups, never fail to up. It's very simple. Even scientists, like I mentioned in the previous announcement. If you try to see in a complicated way, that's not a smart way to look at the things.

Why don't you make a -- why don't you see the things more simply -- simple way? That what makes you even better understandings. So that's why that I would like to focus on that. And as a result, I have been keep -- kept our shareholders waiting for over 20 years, but now is the time that SoftBank is making a big jump. And now we are ready. We have such a base now.

Ecosystem is ready. Although that my forehead is wider, but the passion is -- never fail. So I may have some other hairs coming out from my forehead, but that's how I excited about. And that's how I am feeling. And my time has come.

That's how I feel right now. For shareholders, I kept them waiting so long, but now I think that they can enjoy, our investors can enjoy our fruitful moment. We are in a fruitful moment. And this is the one -- return that we would like to make to shareholders. And as a one step for that, for the retail investors, for investors [Indiscernible] framework that we would like to enhance our shareholder return.

So easier access for retail investors. We start -- they can start investing in smaller amount. And so that we would like to split but keeping the dividend per share, which means that substantially we are doubling the dividend. So it's just about ¥100 billion level; net income exceeding ¥1 trillion in 3 years consecutively, this year once again that we would like to do so. So 4 years consecutive exceeding ¥1 trillion is the kind of a base that we have for our business.

So that one tenth of that, which is ¥100 billion, that we would like to use for dividends to shareholders. And we would like to make the return to shareholders in that way. This is just a small step. I cannot be proud for this yet, but still a small step but one step up. So that we believe that we can show the real growing or real growth stage to shareholders.

So now we will be -- we are convinced that we can live up to investors' expectations. So now that -- let me in to the summary pages. So I'm only looking at one thing, which is shareholder value. Shareholder value equals to equity value of holdings less net debt. That's what -- one thing that I mentioned in the very beginning of my presentation.

I showed you this slide. Several or hundreds of experts here didn't know about this graph which is the shareholder value. Even the experts like you didn't really recognize this graph. And I think that is my fault, which because I haven't communicated to this graph, but that's because we are not yet being able to proud ourselves about this, our shareholders' value. But now we are ready to be able to show our good shareholder value in our proud mind.

This is not a commitment. This is the determination. This is just my determination to show shareholders our growth in the shareholder value. Share price, that's -- that goes ups and downs but back then with the share price which was about ¥6 trillion. But market cap went up to ¥20 trillion at the peak, so actually about three times of expectation than real world.

So that's when we caused many shareholders trouble, which is my spiritual liabilities, if you will. So the shareholders who invested in us at peak time. I just wanted to make sure that they will have another great moment. So the shareholder value now is three times bigger than that. And the second phase, share price and the shareholder value was correlated.

That was like that for 10 years or so. So blue line and green line were hand in hand for about 10 years, which was second phase. And third phase, which is now. So since the peak back then, 20 years ago, share price went up, but I believe that we have advanced more than what you may think about us. But in the long run -- again, it's just a starting point because, like I said earlier, our shareholder value is most correlated to the Internet traffic.

And it's going to be correlated to AI traffic going forward. And that's how we want to grow going forward; and that's my determination, not promise though, just my determination. And how can we make it happen? Well, Internet traffic goes further and AI traffic goes further. And we want to make sure that we catch up with this growth in order for us to increase shareholder value. And the strategy for that is group of AI entrepreneurs.

So I alone can't do this. My employees alone can't do that either. We need a group of AI entrepreneurs. That group of AI entrepreneurs, those entrepreneurs are all number 1 in respective areas, in respective countries. And those are great, fantastic companies.

I have been meeting with them up until last night, yesterday. And they have been growing amazingly. And every time I meet them, I feel more confident. And I enjoy meeting with them. With this strategy, group of AI entrepreneurs, we want to make sure that we catch up with AI traffic growth in order for us to increase SoftBank Group's shareholder value.

That's my wish. That's my determination, and AI, group of AI entrepreneurs strategy is our tool to make it happen. So I just wanted to show you a big picture like this. Thank you very much for your kind attention today. Thank you.

Unidentified

Company Representative: Thank you very much. We'd like to go to question-and-answer session. If you have any question, please raise your hand and wait for the microphone. And please begin your question by stating your name and affiliation. We'd like to take up to 2 questions per person so that we can take questions from as many people as possible.

Do you have any question? Interpreted The first, the blue gentleman that gave us answer, at the beginning of the presentation, about that graph.

Operator:
Q -

Toshihiro Yamada: My name is Yamada from Toyo Keizai. So ¥ 526.5 billion is coming in after the tender of Yahoo! Japan share. Does that goes to SoftBank Vision Fund 2? And then my second question is about Sprint and T-Mobile merger. It looks like the process is delayed.

And what is your prospect, any change in strategy? Those are the two of my questions.

Masayoshi Son: Yahoo! Japan. As for Yahoo! Japan, SoftBank Corp., we, our subsidiary, consolidated subsidiary. Mr. Ken Miyauchi has an eagerness to bring Yahoo! Japan to, under his company's umbrella and make their subsidiary and make a 100% synergy with Yahoo! Japan.

And from Yahoo! Japan's point of view, they like to enhance the relationship with SoftBank Corp. e-commerce PayPay. Those business will be able to be stronger with the relationship. So both actually wants to go to that approach. And then my first word was that I understand how you feel, but if you make the structure, it looks like me, Masa, using you as my pocket or wallet and the parent like to use those money for my cash management.

So there will be people criticizing me if we make that happen. So that's I don't want to see. So that's why I didn't really like that way. But those 2 CEOs of Yahoo! Japan and SoftBank Corp. still wants to do that.

That's a kind of minor things. And Masa, please accept the criticism. It's that people is going to say whatever they say. So please accept the idea. And that's why that I end up accepting that idea and we made that happen.

As a result, we responded to the tender offer for the share repurchase by Yahoo! Japan, and we are receiving proceeds and that to be used for the enhancement, on the improvement of the balance sheet of ours and also some preparation for the SoftBank Vision Fund 2 and also increasing in dividend for this time. So we were making a balanced use of the proceeds. And your second question, about Sprint and T-Mobile. Sprint earnings was announced about 2 day -- 1 days -- 1 day ago. And the business itself is doing smoothly and positively, although some difficulties are there, here and there.

But when it comes to mid- to long-term strategy for 5G and so on, merger with T-Mobile: for T-Mobile and for Sprint and for consumers in United States and also for the 5G strategy of United States. From such many angles, we believe this merger is best for everyone in every aspect. That's how we believe in. And also that's also we believe this is very logical. Whether the approval will be given or not, we don't know.

That is up to the regulatories to make a final decision. However, we believe this is good things to happen, and we hope that our belief is communicated to regulatories. And we are putting every efforts to communicate or share such belief as much as possible. That's my answer. Unidentified Company Representative : Next question?

Unidentified Analyst: Hogane from Nikkei Computer's.

May be related to the previous question. SoftBank KK and Yahoo! will strengthen relationship. And why don't you have them merge together? That might be better. Any idea around that?

Masayoshi Son: Well, anything is possible, to be very blunt with you, but SoftBank KK's, Ken Miyauchi's management and Yahoo! Japan's management led by Kawabe, they discuss further to figure out what will be the best approach in the future. And the starting point is this structure.

And going forward, what they should do is something that they will discuss further while watching how it goes.

Unidentified Analyst: And another question, with regards to regulation in Japan about ride sharing. In July last year, you mentioned that it's ridiculous that ride sharing was banned legally, but the government has not really deregulate ride sharing market in Japan. But autonomous driving and AI, from those perspective, is very important topics, so any opinion about Japanese government approach?

Masayoshi Son: Well, my thought remains the same. Too much regulation will slow down evolution of things.

And in Japan automobile industry has significant portion of Japan's GDP. And how many Japanese companies are there that we can proud of? And that growing -- or that industry might not survive anymore if autonomous driving or [MaaS] and industry can't catch up with that trend. So there is tons of risks. So small [just] and big just . And policymakers and regulators, I hope that they figure out what's the ground that we should protect in Japan and what's consumers will ask for most.

Industry grows only when consumers want them to grow. There is a demand from consumers. That's when and where industry grows. So again, I hope that regulators and policymakers and politicians will keep watching what's happening around the world before making the best decision for Japan. Either way, from a SoftBank perspective, we started investing in ride sharing business not because we rely on potential growth in Japan, but that industry has been growing already outside Japan.

That's why we decided to invest in ride sharing industries. So whether Japanese government deregulates the market or not, from SoftBank's perspective, it doesn't mean a lot. We are sad because our -- Japanese consumers don't enjoy the benefits. That's why.

Akito Tanaka: My name is Tanaka from Nikkei Computer.

So QR payment settlement is now expanding, and I believe SoftBank is also putting efforts in PayPay. So payment data, what is the value of having a payment data? Or what is the impact of having a payment data?

Masayoshi Son: Yes. Thank you for your question. Payment data is very important and also important for the base of the AI data. Without payment data, you don't know or you cannot understand the flow of money.

And that cannot be utilized for the prediction by AI data. So that's how I feel. From that sense, China is leading this area and realizing this payment world. Actually, compared to U.S. or compared to Japan or compared to any other place, China is leading this area.

Southeast Asia or India, those area are actually taking one step ahead compared to United States using QR code payments and so on. And that, I believe, Japan should not be left alone. And even United States now already seen as a kind of a leaving behind. So why don't we go to the person in the back?

Unidentified Analyst: Yamashita from Yomiuri newspaper. Mr.

Eiichi Shibusawa, which is going to be printed on the new ¥ 10,000 bill. And I remember you mentioned that Mr. Eiichi Shibusawa was 1 of the 4 people that you respect. And Eiichi Shibusawa, the companies that Mr. Eiichi Shibusawa was involved have been here in Japan for a long time.

So I wonder if you want, still want to be like Mr. Shibusawa or as a SoftBank Group. Or some people call SoftBank Group as Internet [indiscernible] or conglomerate. So what's your thought about conglomerate?

Masayoshi Son: And I believe that there are a lot of good things about Japan's conglomerates. And Mr.

Shibusawa's companies, or Mr. Shibusawa's motto is great, but SoftBank Group, our group of AI entrepreneurs strategy is a tool for us to evolve differently. We are not going to copy their strategy. We want to evolve different from how Mr. Shibusawa did.

And why do we want to do this? I won't comment on that because it may, it might sound very selfish, but by focusing on AI and by focusing on Information Revolution and by focusing on number 1 companies around the world, by putting them together, and intentionally, we are not going to take 51% of holding. So we deliberately take anti- [indiscernible] approach. So that's how we want to grow differently.

Unidentified Analyst: So you changed your mind. Because 10 years ago, you wanted to be like Mr.

Shibusawa.

Masayoshi Son: Well, it doesn't mean I copy him. So we want to evolve in a different way.

Unidentified Analyst: So in a constraint of time, we want to limit number of people that can make a question. Two people and one question per each.

Unidentified Analyst: My name is Samfrom Reuters. Regarding the Vision Fund 2, I have a question. Who have you been discussing with for -- as an investor? Is it Oman or Saudi Arabia's? Have you started negotiation or discussion with them?

Masayoshi Son: Can you keep the question to one?

Unidentified Analyst: No. That really is my first question. Regarding the Saudi Arabia, there was an accident about Mr.

Khashoggi which happened about 6 months ago. And Mr. Son mentioned that the money is not -- is from the nationals of Saudi Arabia. And also you said that you're going to explore once again that once the fact is investigated, but time has passed quite a long time. And I believe that we all quite understand that what has happened.

Have you or have you understand well?

Masayoshi Son: For the investors of Vision Fund 2, what kind of companies or what kind of organization are participating? That is your question, and when and how and how much size? Those are still early to discuss at this occasion, so I don't want to be specific to any individual or any details about that. So please go to the next question. Unidentified Company Representative : Nigi-san? I know your name. I remember your name. Thank you.

Unidentified Analyst: Until Vision Fund 2 is launched, how can you keep your passion level or energy level? Maybe IPO of Vision Fund 1 as an option, for example. What's your thought?

Masayoshi Son: Well, Vision Fund 2, well, relatively early stage. I think I can predict Vision Fund 2 will be launched rather soon. By that, what I mean is effectively there should not be huge gap between SoftBank vision 1 and SoftBank Vision Fund 2 in terms of timing. So we want to ensure smooth start of SoftBank Vision Fund 2's investment.

So we will -- we are most likely start tentatively. One option is have SoftBank Group having 100% as a start and invite other investors later. So that's one option to make sure that we can start investing with Vision Fund 2 as early as possible. With regards to passion about Vision Fund 2, I think 97% of my passion goes to Vision Fund. So my brain and my heart, almost everything about myself is focusing on Vision Fund.

IPO, well, there are some rumors around IPO, but I can't make a comment now. Unidentified

Company Representative: So maybe the last, very last person for the question.

Unidentified Analyst: My name is from [Yamaka] from World Business Satellite. Toyota market cap is ¥21 trillion. EBIT at SoftBank is almost the same with them.

And you mentioned about discount. Market cap, probably you're -- you could go over Toyota. How do you think about that?

Masayoshi Son: Toyota is a world-class, great and respectful company. And they have their very steady, robust position. And also they are our partner as well in business, so we -- I'm very respect of this company.

So it's not like exceeding or not exceeding. That's not a level that we should be discussing. But so Toyota also mentioned that they would like to evolve their business as much so that -- we would like to see their further growth. And also us, our own business, we would like to grows ourselves as well. So thank you very much.

That it. Well, thank you very much. That's about time, so we would like to close the earnings results announcement. Thank you very much once again. Unidentified

Company Representative: Thank you.

This concludes the SoftBank Group Corp. earnings result announcement for the fiscal year ending March 31, 2019.