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Earnings Results First Half of the Fiscal Year Ending March 31, 2015 (FY2014 H1) October 29, 2014 SoftBank Technology Corp. 1
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Page 1: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Earnings Results

First Half of the Fiscal Year Ending March 31, 2015 (FY2014 H1)

October 29, 2014

SoftBank Technology Corp.1

Page 2: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

2

DisclaimerThis presentation was prepared based on information available and views held at the time it was made. Statements in this presentation that are not historical facts, including, without limitation, plans, forecasts and strategies, are “Forward-looking statements”. Forward-looking statements are by their nature subject to various risks and uncertainties, including, without limitation, a decline in general economic conditions, general market conditions, technological developments, changes in customer demand for products and services, increased competition, risks associated with international operations, and other important factors, each of which may cause actual results and future developments to differ materially from those expressed or implied in any forward-looking statement due to a change in the operating environment or for other reasons.

The contents of this presentation , including summary notes, quotes, data and other information, are provided solely for informational purposes and not intended for soliciting investment in, or as a recommendation to purchase or sell, any specific products.

Company names, logo, or service names appearing in this presentation are registered trademarks or trademarks of the relevant companies, or SoftBank Technology Corp. and its group companies.

Consideration for the Presentation

1. Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment have been combined to create a single segment called ICT Services. To provide additional financial information for reference, three business categories have been established: Digital Marketing, Platform Solutions and System Integration. The business category sales for prior years on page 8 of this presentation use the new business categories.

2. The marginal profit and fixed cost shown on pages 10, 11, 12, 34 and 35 have been revised because of the partial change in the method used for recognizing expenses for e-commerce services. Marginal profit and fixed cost for prior years have been restated based on the new expense recognition method.

3. Figures in all graphs in this presentation may differ slightly from figures in earnings announcements because of rounding.

Page 3: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Results Overview

3

Page 4: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Highlights

4

Consolidated net sales increased 20.8% year-on-year to 19,678 million yen, a record high for first half sales.

Sales in the Symantec Store business declined slightly, but steady growth in the focus businesses, which are data analytics, security and Microsoft solutions, contributed to the increases in first half sales and earnings.

Subsidiaries providing their original content and services contributed to the improvement in profit margin. In the second quarter (July-Sept), the marginal profit ratio improved 4.0 % year-on-year to 28.8%.

Fixed costs increased mainly due to an increase in the number of employees, the expansion of office space, an increase in the number of subsidiaries. But an increase in sales and an improvement in profit margin resulted in a 0.4% increase in operating income to 572 million yen.

Page 5: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

16,286

570

584

324

3,391

2

(42)

5

+ 20.8%

+ 0.4%

(7.3)%

+ 1.8%

19,678

572

541

330

FY2014 H1 Results Summary Comparison with the previous fiscal year

FY2013 ResultsApr-Sep 2013

FY2014 ResultsApr-Sep 2014

5

Net sales

Operating income

Ordinary income

Net income

Amount of change

Ratio of change

(Millions of yen)

Page 6: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

18,500

650

650

400

1,178

(77)

(108)

(69)

+ 6.4%

(11.9)%

(16.7)%

(17.4)%

19,678

572

541

330

ForecastApril 24, 2014

6

FY2014 H1 Results Summary Comparison with earnings forecast

Net sales

Operating income

Ordinary income

Net income

(Millions of yen)Amount of

changeRatio of change

FY2014 ResultsApr-Sep 2014

Page 7: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Sales to Internal/External Groups (Billions of yen)

Non-SoftBank Group

Year-on-year sales+1.96 billion yen, +49.9%

SoftBank Group

Year-on-year sales+1.5 billion yen, +35.4%

E-commerce service

Year-on-year sales(70) million yen, (1.0)%

16.2816.0814.85

13.94

19.67

7

Non-SoftBank Group

E-commerce sales

SoftBank Group

8.19 8.21 8.17 8.10

2.80 2.71 3.27 3.94

2.95 3.94 4.65 4.24

0.0

5.0

10.0

15.0

20.0

FY10H1

FY11H1

FY12H1

FY13H1

FY14H1

8.02

5.74

5.91

Page 8: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

8.28 8.30 8.27 8.43 8.62

0.35 0.48 0.59 0.51 0.74

2.87 3.83

4.90 3.97 4.52 0.42

0.40

0.49 0.48

1.64

2.24 1.81

1.61 2.37

2.97

0.02

0.23 0.53

1.19

0.00

5.00

10.00

15.00

20.00

FY10H1

FY11H1

FY12H1

FY13H1

FY14H1

Microsoft

SI

Security

Platform

Data

EC

16.2816.0814.85

13.94

Net Sales by Business Category (Billions of yen)

19.67Net sales increased year on year in all business categories.

Particularly, the security business posted strong sales.Year-on-year sales

+1.15 billion yen, +241.8%Cybertrust Japan contributed to this growth.

Net sales increased due to an increase in sales of hardware such as SMC (server) and Alcatel (network)

Net sales increased due to the inclusion of new subsidiary Fontworks

Net sales increaseddue to the inclusion of new subsidiary Cybertrust Japan

8

Focus business

Focus business

Focus business

Page 9: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

491 666

3,972 4,336

479 781

2,316

2,934

528

1,193

199 445

14 77

181

856

53

32

0

1,000

2,000

3,000

4,000

5,000

6,000

Net Sales by Business Category Comparison with the previous fiscal year (Millions of yen)

e-commerce services Data analytics Platform solutions Security solutions System integration Microsoft solutions

8,1788,235

Year-on-year

Consolidated: +2.2%

Non-consolidated: (0.7)%

Year-on-year

Consolidated : +47.1%

Non-consolidated: +35.6%

Year-on-year

Consolidated: +13.7%

Non-consolidated: +9.1%

Year-on-year

Consolidated: +241.8%

Non-consolidated: +63.1%

Year-on-year

Consolidated: +25.2%

Non-consolidated: +26.7%

+125.9%

Fontworks

Kan

Miracle Linux

Cybertrust Japan

M-SOLUTIONS

8,4348,623

505743

3,972

4,517

479

1,637

2,368

2,966

528

1,193

Digital marketing Platform solutions System integration

9,366 million yen 6,153 million yen 4,158 million yen

9Focus

business

Focus business

Focus business

Page 10: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

972

741

223 279

949 1,067

152 211

947

1,172

210

466

126

278

7

45

136

566

50

142

0

250

500

750

1,000

1,250

1,500

Marginal Profit by Business Category Comparison with the previous fiscal year (Millions of yen)

Digital marketing Platform solutions System integration

Year-on-year

Consolidated: +40.6%

Non-consolidated: +24.9%

Year-on-year

Consolidated: +26.8%

Non-consolidated: +12.5%

Year-on-year

Consolidated: +410.3%

Non-consolidated: +38.5%

Year-on-year

Consolidated: +31.7%

Non-consolidated: +23.7%

+121.9%

Fontworks

Kan

Miracle Linux

Cybertrust Japan

1,0971,019

230

324

949

1,203

152

777

997

1,313

210

466

Year-on-year

Consolidated: (7.1)%

Non-consolidated: (23.7)%M-SOLUTIONS

1,342 million yen 1,979 million yen 1,779 million yen

10Focus

business

Focus business

Focus business

e-commerce services Data analytics Platform solutions Security solutions System integration Microsoft solutions

Page 11: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Operating Income Comparison with the previous fiscal year (Millions of yen)

571 573

757

721 (713)

(432 )

(195)(64)

(72)

0

500

1,000

1,500

2,000

2,500

FY13H1Operating

income

FY14H1Operating

income

FY14H1Forecast

↓Increase in fixed costs at subsidiaries

↓ Increase in fixed costs at

SBT

↓Increase in depreciation ↓Increase in

amortization of goodwill

↓Unprofitable projects

650

Labor cost +400 million yen

Office rent +80 million yen

Outsourcing (80) million yen

Mainly Cybertrust Japanand Miracle Linux

SBT +100 million yen

Cybertrust Japan

+80 million yen

Mainly Fontworks,Cybertrust Japan andMiracle Linux

+70 million yen

11

↑Increase innet sales

Consolidated: 19.6 billion yen, +3.3 billion yen

Non-consolidated: 18.0 billion yen, +2.0 billion yen

↑Improvement in marginal profit ratio

Consolidated: 25.9%, +3.6Pts

Non-consolidated: 21.8%, +0.2Pts

Page 12: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

1.2 1.3 1.3 1.4 1.41.7 1.7 1.9

2.12.4

0.20.5

0.3

0.50.2

0.4 0.2

0.6 0.1

0.4

7.5

8.6

8.0

8.7

7.8

8.4

9.4 9.7 9.9

0.0

2.5

5.0

7.5

10.0

0.0

1.0

2.0

3.0

4.0

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

1.4419.1%

Quarterly Trends and Results (Billions of yen)

1.7420.3% 1.55

19.5%

1.9122.1%

1.5419.7%

2.0924.8% 1.92

20.4%

2.5222.4% 2.24

23.0%

2.8628.8%

Marginal profit (left axis)

Net sales (right axis)

Operating income (left axis)

Fixed costs (left axis)

11.3

12

Page 13: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

509 542

601

30

34

38

35

35

36

13

13

12

80

48

0

100

200

300

400

500

600

700

800

900

FY11Q2 Q4

FY12Q2 Q4

FY13Q2 Q4

FY14Q2

SoftBank Technology 601

M-SOLUTIONS 38

Fontworks 36

Kan 12

Number of employees (consolidated basis)

815

As of September 31, 2014

Cybertrust Japan 80

426 444484

587624

815 Miracle Linux 48

420

Transition of Employees (consolidated basis)

13

Page 14: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

18 25 14

87

144 163

0

50

100

150

200

250

FY09 FY10 FY11 FY12 FY13 FY14Q2

FY14Q4

(estimate)

Number of engineers acquired the advanced information technology certifications Adobe

FY2013FY2012FY2011

Microsoft

Oracle

and more...

Advanced Information Technology Certification & Award

14

200+Strengthen training program for

acquiring PMP ( Project Management Professional )

Page 15: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

6.578.07

12.6412.81

0.0

50. 0

100 .0

150 .0

200 .0

250 .0

FY13 FY14H1

9.62 10.35

9.5810.53

0.0

50. 0

100 .0

150 .0

200 .0

250 .0

FY13 FY14H1

Current assets

Fixed assets

Liabilities

Net assets

20.89 billion yen

19.21 billion yen

Current cash 5.3 billion yen

+1.4 billion yen

Sales credit 5.8 billion yen

(1.2) billion yen

Goodwill 2.4 billion yen

+0.7 billion yen

Software 1.2 billion yen

+0.3 billion yen

Retained earnings 8.8 billion yen

+0.1 billion yen

Minority interests 0.6 billion yen

+0.5 billion yen

Accounts payable 4.0 billion yen

(0.7) billion yen

Loans payable 1.4 billion yen

+1.4 billion yen

Advances received 1.2 billion yen

+0.2 billion yen

20.89 billion yen

19.21 billion yen

Balance Sheet Comparison with the previous fiscal year (Billions of yen)

15

Page 16: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

FY2013 H1Results

0.47

(3.94)

(0.2)

2.53

1.86

(2.19)

1.81

5.24

+ 1.38

+ 1.75

+ 2.02

+ 2.70

Amountof change

FY2014 H1Results

Cash Flows Comparison with the previous fiscal year (Billions of yen)

16

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Cash and cash equivalents at end of period

Page 17: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Business Overview

17

Page 18: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Business Categories of the SoftBank Technology Group

e-commerce services

System integration

Data analytics Security solutions

Microsoft solutions

Platform solutions

• Provision of web access log analysis tools, consulting and other support service concerning digital marketing for corporate clients

• Operation of Symantec Store and provision of web fonts, foreign currency payment processing, etc.

• Office 365 solutions and other Microsoft cloud services and provision of original services

SoftBank Technology Fontworks Kan Mode2

• Construction of security systems for corporate clients, and provision of operation and maintenance services; provision of the SSL server certificates, device authentication services

• Construction of wireless network, Thin Client and other IT platform for corporate clients and provision of operation and maintenance services

Cybertrust Japan Miracle LinuxSoftBank Technology

Focus business

• Development of IT systems for corporate clients and provision of operation and maintenance services; provision of application services for smart devices

M-SOLUTIONSSoftBank Technology

Focus business Focus business

Digital Marketing Platform Solutions System Integration

(equity-method affiliate)

SOLUTION BUSINESS TECHNOLOGY HONG KONG

SOLUTION BUSINESS TECHNOLOGY KOREA

18

Page 19: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Overview of the Digital Marketing Business

3,867 3,910 4,154 4,069 3,930 3,755 3,806 3,911 3,916

3,662

119 118

126 161 145

145 150 176 167

154

203 155

158 140 136

124 132 131 129

150

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Other e-commerce services

Symantec Store (Asia)

Symantec Store (Japan)

E-commerce services sales

Sales in the Symantec Store business declined slightly.

To maintain profitability, various measures are promoted including the introduction of IT systems to improve operating efficiency.

19

Page 20: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

167 191 194 177 125 119 130

158

222 260

99

132 106 149

106 154

165

233 97

164

84 86 87 93

86 86 88 90

100 105

0

20

40

60

80

100

0

100

200

300

400

500

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Project revenue (licenses/individual development projects)

Consistent revenue (analysis tools/consulting/operation and maintenance services)

Number of clients

Overview of the Digital Marketing Business

Data analytics services sales

The number of clients increased because of the extended lineup of web access log analysis solutions.

First half consistent revenue was480 million yen.

Year-on year sales+ 230 million yen, +97%

20

Focusbusiness

Page 21: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

21

Digital Marketing: Highlights

2,865 3,399

3,931

4,489

5,196

5,848

7,262

7,858

8,657 9,176

2,000

4,000

6,000

8,000

10,000

FY12Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

The data analyst training businessAs data analytics tools become more advanced and mature, the shortage of people who have data analysis and utilization skills is becoming more severe.

Through the operation of the Web Analytics Consultants Association, we promote the improvement of the analytical technologies.

Number of examinees of the certified web

analytics consultants

As of Oct. 29,

2014

9,176

Page 22: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Overview of the Platform Solutions Business

788 788 803 823 836 852 857 914 902 997

98 373

120

504 126

307 97

612

166

411

1,173

1,574

1,082

994

990 861

1,956

2,197

1,127

913

0

500

1,000

1,500

2,000

2,500

3,000

3,500

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Project revenue (hardware/software sales)

Project revenue (system construction/consulting)

Consistent revenue (operation and maintenance/support)

Platform solutions sales

In addition to orders from the current corporate clients, we have acquired orders from the public sectors .

Aiming to increase earnings from public-sector clients.

Sales from operation and maintenance services continue to grow steadily.First half consistent revenue was 1.9 billion yen.

Year-on-year sales+210 million yen, +12.5%

22

Page 23: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

114 120 121 127 121 121 125 132 146 168

355 374

97 160 121 134 127 110 121

279

138

328 86

63

0

100

200

300

400

500

600

700

800

900

1,000

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Project revenue (CT) (vulnerability diagnoses/individual development projects)

Project revenue (SBT) (hardware sales/system construction)

Consistent revenue (CT) (certification service)

Consistent revenue (SBT) (operation and maintenance services)

Overview of the Platform Solutions Business

Security solutions sales

The acquisition of Cybertrust Japan as a consolidated subsidiary resulted in first half sales to more than 1.6 billion yen.

Year-on-year sales about +350%

Receipt of new security product orders also contributed to the increase in sales.

23

Focusbusiness

Page 24: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Growth in the public sector business

Sales have been increasing steadily in the public sector,which was started in the previous fiscal year ended March 31, 2014 by collaborating with other SoftBank Group companies.

Orders received

Central ministries: 2

Prefectures: 3

Ordinance-designated cities: 1

Municipal governments: 6

Associations: 3

Orders received through business partners

Prefectures: 1, Ordinance-designated cities : 1, Core cities: 1, Special cities: 1, Cities: 1, Wards of Tokyo: 3, Associations: 1

Platform Solutions: Highlights

24

Hamamatsu City Website, which introduced the BCP total solution

Page 25: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Overview of the System Integration Business

548 532 503 694 689 745

853

1,073

854 812

120 318

257

372 290

548 442

580

489 715

56

41 109

99

45

50 90

116

75

21

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Project revenue (hardware and software sales)

Project revenue (development projects)

Consistent revenue (operation and maintenance services)

System integration sales: Consistently strong

Development projects for the SoftBank Group’s telecommunications business were strong.

Although the percentage of project revenue increased along with the scale of projects, the percentage of consistent revenue remained above 50% in the first half.

We expect to record revenue from the public sector in the second half of the fiscal year.

25

Page 26: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

11 16 19 24 31 44 51 61 67 94 25

78 54

110

32

172 124

234

142

339

30

59

33

85

111

139

140

158

452

99

33

36

38

45 54

112

116

127

215

291

25

29 32

43 53 98 104

139

182

208

0

50

100

150

200

250

300

0

100

200

300

400

500

600

700

FY12Q1 Q2 Q3 Q4

FY13Q1 Q2 Q3 Q4

FY14Q1 Q2

Project revenue (licenses)

Project revenue (individual development)

Consistent revenue (operation and maintenance/original service)

O365 users (Thousands)

OSG/AoC users (Thousands)

Overview of the System Integration Business

Microsoft solutions sales: Strong sales at Office 365 solutions

The Office 365 projects performed well.

Total introductions: 126 users/291,000 licenses

Original cloud services performed well.

Online Service Gate, ADFS on Cloud

Total introductions: 208,000 licenses

Consistent revenue exceeded 160 million yen in the first half.

26

Focus business

Page 27: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Azure assessment service

Client’s ICT platform (on-premises environment)

Provide more convenient and secure high-capacity cloud

mail

Move internal applications and groupware to cloud services

Step3Step2Step1

SitecoreSystemCenterSharePoint

NotesMigration

ADFS onCloud

OnlineService Gate

Office 365

Microsoft Azure Cloud ServiceHybrid

operations oversight

System development using Azure

Acquired 500,000 users for Office 365, OSG and AoC

Number one in the introduction of Office 365 for enterprise

Leverage our experience to capture advanced introduction examples

Currently conducting extensive sales activities

Microsoft: Highlights

We have already developed this environment as a measure to increase the efficiency of the e-commerce services business

Start offering these services to clients

Progress with Microsoft solutions

27

Enable the seamless integrated operations management of on-premises and cloud environment

Page 28: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

4.79 4.885.22

5.455.79

6.576.21 6.28

6.67

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

FY12Sep Dec Mar

FY13June Sep Dec Mar

FY14June Sep

Order backlog

6.67 billion yen

Year-on-year+0.87 billion yen, +15.2%

Order Backlog (SoftBank Technology parent basis)(Billions of yen)

System integration

business

Public-sector

Security business

New security products

28

Page 29: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

29

Sales of security products and construction of security systems

The Evolution of the SoftBank Technology Group’s Operations

Original 1st stage 2nd stage

FY2012 FY2013 FY2014

Digital marketing

e-commerce services

Data analytics

Platform solutions

Platform solutions

Security solutions

System integration

System integration

Microsoft solutions

Focus business

Focus business

Focus business

Symantec Store business

IT Trading

& IntegrationIT Trading

& Integration

IT Trading & Integration+ Service Provider

Adobe & Consulting

Symantec Store business+ Web font services

Symantec Store business+ Web font services

AdobeGoogle

Adobe/Google & Consulting+ Data Science services

Sales of IT products to companies

Sales of security products and construction of security systems

Establishment of IT platforms to companies & operation and

maintenance services

Establishment of IT platforms to companies & public-sector clients

and operation services

Sales of security products and construction of security systems

+ Cybertrust Japan’s security services

SoftBank commerce & service

MS license salesOffice 365 & OSG

SoftBank commerce & service and telecommunications business

Office 365& OSG, ADFS on Cloud

SoftBank commerce & service and telecommunications business

+ Public-sector

Office 365 & OSG, AoC+ SBT Azure solutions

& Consulting

Page 30: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

FY2014 Earnings Forecast

30

Page 31: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

FY2014ForecastApr. 2014 – Mar. 2015

40,000

1,700

1,700

1,000

+ 3,048

+ 329

+ 336

+ 363

+ 8.3%

+ 24.1%

+ 24.7%

+ 57.2%

Amount of change

Ratio of change

36,951

1,370

1,363

636

FY2013Results

Apr. 2013 – Mar. 2014

FY2014 Earnings Forecast

31

(Millions of yen)

Net Sales

Operating income

Ordinary income

Net income

Page 32: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Information Revolution –Happiness for everyone

Harnessing the power of Technologyto build a Brighter future

SoftBank Technology M-SOLUTIONS Fontworks Kan Cybertrust Japan Miracle Linux Mode2

32

Page 33: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Appendix

33

Page 34: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Consolidated results FY13 H1 FY14 H1 YoY change

Amount(Millions of yen)

Ratio Amount(Millions of yen)

Ratio Amount(Millions of yen)

Ratio

Net sales 16,286 - 19,678 - +3,391 +20.8%

Digital marketing 8,939 - 9,366 - +427 +4.8%

Platform solutions 4,451 - 6,153 - +1,702 +38.3%

System integration 2,896 - 4,158 - +1,262 +43.6%

Cost of sales 14,458 - 16,716 - +2,258 +15.6%

Gross profit 1,828 11.2% 2,962 15.1% +1,133 +62.0%

SG&A expenses 1,257 - 2,389 - +1,131 +90.0%

Operating income 570 3.5% 572 2.9% +2 +0.4%

Non-operating income (loss) 13 - (31) - (44) -

Ordinary income 584 3.6% 541 2.8% (42) (7.3)%

Extraordinary gains (losses) (4) - (0) - +3 -

Net income 324 2.0% 330 1.7% +5 +1.8%

Marginal profit 3,635 22.3% 5,102 25.9% +1,466 +40.3%

Fixed costs 3,064 - 4,528 - +1,464 +47.8%

Non-consolidated order backlog 5,789 - 6,668 - +879 +15.2% 34

Page 35: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Consolidated results FY13 H1 FY14 H1Amount of

changeRatio of change

Digital marketingNet sales 8,939 9,366 +427 +4.8%

Marginal profit 1,327 1,342 +15 +1.1%

Margin 14.9% 14.3% (0.5)Pts -

(1) E-commerce services

Net sales 8,433 8,623 +189 +2.2%

Marginal profit 1,097 1,019 (78) (7.1)%

Margin 13.0% 11.8% (1.2)Pts -

(2) Data analytics

Net sales 505 743 +237 +47.1%

Marginal profit 230 323 +93 +40.6%

Margin 45.6% 43.6% (2.0)Pts -

Platform solutionsNet sales 4,451 6,153 +1,702 +38.3%

Marginal profit 1,100 1,979 +878 +79.8%

Margin 24.7% 32.2% +7.4Pts -

(1) Platform solutions

Net sales 3,972 4,516 +544 +13.7%

Marginal profit 948 1,203 +254 +26.8%

Margin 23.9% 26.6% +2.8Pts -

(2) Security solutions

Net sales 478 1,636 +1,158 +241.8%

Marginal profit 152 776 +624 +410.3%

Margin 31.8% 47.4% +15.7Pts -

System integrationNet sales 2,896 4,158 +1,262 +43.6%

Marginal profit 1,206 1,779 +572 +47.4%

Margin 41.7% 42.8% +1.1Pts -

(1) System integration

Net sales 2,368 2,965 +597 +25.2%

Marginal profit 997 1,313 +316 +31.7%

Margin 42.1% 44.3% +2.2Pts -

(2) Microsoft solutions

Net sales 528 1,193 +664 +125.9%

Marginal profit 209 465 +255 +121.9%

Margin 39.7% 39.0% (0.7)Pts -35

Focus business

Focus business

Focus business

Page 36: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

36

• Symantec Store business, e-commerce platform services

• Web access log analysis services

• Font set, web font services

• Construction of server, storage and other IT platform; operation and maintenance services

• Construction of security system; operation and maintenance services

eBusiness Services

Old Segments New Segments

E-commerce services

Platform solutions

System integration

Solutions

ICT Services

Data analytics Focus business

Security solutions Focus business

Microsoft solutions Focus business

Old and New Business Segments

• Development of IT system and mobile apps; operation and maintenance services

• Provision of the Microsoft solutions

Digital marketing

Platform solutions

System integration

Page 37: First Half of the Fiscal Year Ending March 31, 2015 ... · Starting in the first quarter of the fiscal year ending March 31, 2015, the eBusiness Services segment and Solutions segment

Company name BusinessNet sales

(Millions of yen)

M-SOLUTIONS, Inc.

(consolidated subsidiary)

Design and development of systems and operation services; provision of mobile applications and mobile movie content services

379FY ended March 2014

SOLUTION BUSINESS TECHNOLOGY HONG KONG LIMITED

(consolidated subsidiary)

Online payment services and e-business in Hong Kong 5FY ended March 2014

SOLUTION BUSINESS TECHNOLOGY KOREA Ltd.

(consolidated subsidiary)Online payment services and e-business in Korea 11

FY ended March 2014

Fontworks Inc.

(consolidated subsidiary)

Planning, development and sales of digital fonts (typefaces), software development, and technical service business

876FY ended March 2014

Kan Corporation

(consolidated subsidiary)

Development and management of web analysis tools, website construction; Providing consulting service of the web analysis, Web Analytics certified course business

144FY ended January 2014

Cybertrust Japan Co., Ltd.

(consolidated subsidiary)

Certification service, security solutions, and managed security services

1,710FY ended December 2013

Mode2 inc.

(equity-method affiliate)

Planning, production and other activities for advertising and sales promotion strategies

1,485FY ended August 2013

MIRACLE LINUX CORPORATION

(consolidated subsidiary)

Linux OS development, embedded Linux solutions,support and consulting services

751FY ended May 2014

July 2014

May 2014

April 2014

June 2013

December 2012

June 2012

April 2001

June 2013

Subsidiaries and Affiliates

37


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