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Results of OperationsFiscal Year Ended March 31, 2019 (FY2018)
April 24, 2019SoftBank Technology Corp.
2
Table of Contents
1. Results Overview P. 3
2. Numerical Data P. 10
Results Overview
4
Consolidated
FY18 FY17 Amount of change
Ratio of change Forecast Progress
rateNet Sales 50,430 49,140 ＋1,289 ＋2.6% 52,000 97.0%
Marginal Profit14,521 13,744 ＋777
＋5.7%(28.8%) (28.0%) (＋0.8pt)
Fixed Cost 12,008 11,567 ＋440 ＋3.8%
Operating Income2,513 2,176 ＋337
＋15.5%2,500
100.6%(5.0%) (4.4%) (＋0.6pt) (4.8%)
Ordinary Income 2,291 2,399 ▲107 ▲4.5% 2,500 91.7%(4.5%) (4.9%) (▲0.4pt) (4.8%)
Profit attributable to owners of parent
1,386 1,556 ▲169 ▲10.9% 1,600 86.7%(2.8%) (3.2%) (▲0.4pt) (3.1%)
Growth in the cloud and security business helped set a new record high operating income. The net sales target was not met, due possibly to the concentration of resources in unprofitable
projects affecting the receipt of orders. A temporary non-operating loss resulted in failure to meet ordinary income and profit targets.
Highest net sales andoperating income ever
Results for the Fiscal Year Ended March 31,2019(vs. Previous Year & Forecast)
(Millions of yen)
5
Consolidated
47 46 49
67 50 54
45 34 32
159 132 137
Both the business of the SoftBank Group companies and the enterprise business saw operation and service projects increase, chiefly in cloud and security.
Sales of hardware to SoftBank Group companies fell following the strategic withdrawal of unprofitable hardware sales.
186 186 192
178 178 190
137 126 121
502 491 504
200 199 209
130 148 165
99 96 83
71 47 46
502 491 504
F u l l Ye a r
SB Group
Enterprises/Public
Individuals
FY16 FY17 FY18
Q 4
FY16 FY17 FY18
51 50 53 37 37 42 42 31 26 28 12 13
159 132 137
FY16 FY17 FY18 FY16 FY17 FY18
Hardware Sales
Development
E-commerce sales
Operation and services
B y c u s t o m e r t y p e B y b u s i n e s s t y p eF u l l Ye a r Q 4
(Billions of yen)
Net Sales
50.2 49.1 50.4
15.9 13.2 13.7
13.7 12.6 12.1
19.017.817.8
18.6 18.6 19.24.5
6.7
4.7
3.45.04.6
3.25.44.9
50.2 49.1 50.4
15.9 13.2 13.7
7.1
9.9
13.0
20.0
4.7
9.6
14.8
19.9
4.6
8.3
16.5
20.92.84.23.75.1
3.13.75.0
1.2 2.64.25.3
1.3
6
Consolidated
21.7 25.1
3.64.1 4.4
↓ Increase in fixed costs
↑Increase in sales
Net Sales50.4 billion yen(＋1.2 billion)
↑Increase inmarginal profit ratio
Marginal profit14.5 billion yen
(＋0.8pts)
FY17Operating Income
FY18Operating Income
2.3 0.94.5
4.4 6.2
5.63.2 4.3
4.9
12.3 10.2
10.0
22.4 21.7
25.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
FY16 FY17 FY18Q1 Q2 Q3 Q4
Revenue growth in cloud and security and a rise in the sales composition ratio led to a higher operating income ratio. The withdrawal of unprofitable hardware sales and the progress of recurring business eased the overconcentration at
the end of the fiscal year.
Increases / decreases in operating income Changes in operating income
(4.4%)(5.0%)
(2.2%)
(3.7%)
(2.9%)
(7.7%)
(0.7%)
(5.2%)
(3.7%)
(7.8%)
(3.7%)
(4.6%)
(4.1%)
(4.5%) (4.4%)
(5.0%)( ) Operating Income Ratio
(7.3%)
(Billions of yen)
Operating Income
2.17 2.51
0.440.410.36
2.24 2.17
2.51
1.23 1.02
1.00
0.32
0.44
0.23
0.43
0.62
0.09
0.49
0.56
0.45
7
Consolidated
36
81 110 123
138 161
13 36 44 48 58 65
21.9%
27.3% 26.4% 25.6%27.3% 28.8%
37.7%
45.0%
40.5% 39.4%42.2%
40.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0
50
100
150
200
250
300
350
400
FY13 FY14 FY15 FY16 FY17 FY18
Changes in the results ofthe three focus businesses ※
※SB Group’s cloud development included in the focus businesses
Net Sales CAGR35%
0%
20%
40%
60%
80%
100%
FY13 FY16 FY18
Net Sales
9.8％
24.7％32.0％
■Focus biz ■Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY13 FY16 FY18
Marginal income
■Focus biz ■Others
16.9％
38.0％44.9％
Component ratios ofthe three focus businesses
Cloudsolutions
Securitysolutions
Dataanalytics
Net sales and marginal profit increased +17% and +12% respectively year on year.
Net sales ■Marginal profit ■
Consolidatedmarginal profit ratio
Marginal profit ratio ofthe three focus businesses
(Billions of yen)
Cloud Integration
3.61.3
8.1
3.6 4.4
11.0 12.3
4.8
13.8
5.8 6.5
16.1
8
Consolidated
6
56 55 50 45 3858
63 53 6561 7024
2224 16
17 14
4
75 10
7 10
93
149137 143
131 135
'16/9 '17/3 '17/9 '18/3 '18/9 '19/3
18
67 61 58 49 41
40
4543 45
43 4833
3632 38
38 4493
149137 143
131 135
'16/9 '17/3 '17/9 '18/3 '18/9 '19/3
※Net sales accounted by percentage-of-compression method is excluded
By business type By customer type
Operation projects for public sector clients were cleared as planned. In the business for the SoftBank Group companies and in the enterprise business, the backlog of orders increased for operation and services.
These businesses saw their order backlogs at the highest-ever levels.
License & HW Development Operation and services SB Group Enterprises Public OfficesPublic operations
Order Backlog (Excluding E-commerce Services)
(Billions of yen)
9.30.42.4
5.8
0.6
5.6
6.3
2.20.7
2.4
5.3
5.5
0.5
5.0
6.5
1.61.0
3.8
7.0
1.41.0
1.7
6.1
4.5
0.7
14.9 14.313.7 13.1 13.5
9.3
14.9 14.313.7 13.1 13.5
3.3
4.0
1.8
3.6
4.5
6.7
3.2
4.3
6.1
3.8
4.5
5.8
3.8
4.3
4.9
4.4
4.8
4.1
9
Consolidated
FY18 FY19Forecast
Ratio ofchange
Net sales 50,430 54,000 ＋7.1%
Operating Income 2,513(5.0%)
3,000(5.6%) ＋19.3%
Ordinary Income 2,291(4.5%)
2,900(5.4%) ＋26.6%
Profit attributable toowners of parent
1,386(2.8%)
1,700(3.1%) ＋22.6%
The cloud and security business will continue to enjoy strong demand. SBT will work to boost income margins by enhancing its service sales structure.
(Millions of yen)
Forecast for the fiscal Year Ending March 31, 2020 (FY2019)
10
Numerical Data
11
Consolidated
FY18Q4 FY17Q4 Amount ofchange
Ratio of change
Net sales 13,706 13,209 ＋496 ＋3.8%
Marginal income 4,012 3,932 ＋79＋2.0%
(29.3%) (29.8%) (▲0.5pt)
Fixed cost 3,011 2,907 ＋103 ＋3.6%
Operating income 1,000 1,024 ▲24▲2.3%
(7.3%) (7.8%) (▲0.5pt)
Ordinary income 1,011 1,252 ▲240 ▲19.2%(7.4%) (9.5%) (▲2.1pt)
Profit attributable toowners of parent
605 831 ▲226 ▲27.2%(4.4%) (6.3%) (▲1.9pt)
The cloud and security business expanded nearly 20% to help boost net sales. Operating income eventually remained flat, affected partly by unprofitable projects. Ordinary income and profit dropped due to a non-operating gain in the same period a year earlier.
A temporary non-operating loss resulted in an
ordinary income slide.
FY2018 Ended March 2019 Q4 Results (January-March, vs. Previous Year)
(Millions of yen)
12
Segmentation of Solutions
Digital Marketing
Platform Solutions
Cloud Systems
(1) System integration
(2) Cloud solutions
• ICCの提供およびデータ解析・BIの提供等• SIOTPの提供および組込ソリューション• 顧客本業に貢献するITソリューション全般
④ ECソリューション
② コーポレートITソリューション
① ビジネスITソリューション
• 主に情報システム部門を対象としたクラウド＆セキュリティサービス等
• サーバー等の販売・構築・保守• Linuxソリューション• クラウド以外のシステムインテグレーション
• SymantecのECサイト運用代行等
E-commerce site operation services, development and sales of font sets, and provision of font services
Transfer of internal business information systems to cloud, cloud consulting and provision of independent cloud services
Construction of data management platforms, access log analysis, data analysis, BI tools, and provision of consulting services
Development of information systems except cloud systems, development of applications, and provision of operation services
Sales of servers and network hardware, provision of operation and maintenance services, sales of Linux- and OSS-related products, and development of embedded Linux and OSS solutions
Security operation and monitoring services, vulnerability checks, sales and introduction of products against cyber attacks and provision of electronic certificate services
• Consulting and IT solutions that help customers achieve business growth
• IoT services
[4] E-commerce solutions
[3] Technical solutions
[2] Corporate IT solutions
[1] Business IT solutions
• Cloud services and security operation and monitoring services• Cloud & security consulting for work style reforms• Cloud integration and sales of products for security measures
• System integration except cloud systems• Hardware sales, construction, operation and maintenance
services• Sales of Linux- and OSS-related products, and development of
embedded Linux and OSS solutions
• E-commerce site operation services and others
FY2018 From FY2019 onwards
(3) IT infrastructuresolutions
(4) Security solutions
(5) E-commerceservices
(6) Data analytics
13
Consolidated
23 24 28
11.9% 12.1%13.6%
-30%
20%
0
30
60
90
120
150
～
[Net Sales] In the Symantec Store business, net sales grew as a result
of a steady transition to high performance products. The font service gained new users and changed its business
model.
[Marginal Profit] Increased as a result of sales growth and the expansion of
the font business～～FY16 FY17 FY18 FY16 FY17 FY18
183 183 189 6 15
20 190 199 209
0
30
60
90
120
150
180
210
Net sales Marginal profitSymantec StoreFont, etc. Marginal profit ratio
(Billions of yen)
E-commerce website operation services Development and sales of font sets and web font services and more
E-commerce services (mainly serving individual customers)
Progress in E-commerce Services
19.0 19.9 20.9
18.3 18.3 18.9
2.01.50.6
2.3 2.4 2.8
14
Consolidated
8 7 5
41.1
%38.2
%34.6
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0
30
11 12 11
8 7 4
20 20
16
0
5
10
15
20
25
30
[Net Sales] Briskness retained in site and data platform solutions Shrinkage in site analysis tools and incidental consulting
services for e-commerce operators following a change in business policy
[Marginal Profit] Decreased due to the sales decline
FY16 FY17 FY18 FY16 FY17 FY18
Consistent revenue
Project revenue
Net sales Marginal profitMarginal profit ratio
Construction of websites and databases Access log analysis tools Data analysis and consulting services and more
Data analytics(mainly serving enterprises, public offices and municipalities)
Progress in Data Analytics
(Billions of yen)
2.0 2.0
1.6
0.8 0.70.5
0.8
1.1
0.7
1.2 1.1
0.4
15
Consolidated
26 25 24
26.0
%
35.1
%
41.1
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0
30
60
90
36 40 35
63
31 24
100
71
59
0
20
40
60
80
100
FY16 FY17 FY18 FY16 FY17 FY18
Net sales Marginal profit
Consistent revenueProject revenue Marginal profit ratio
IT infrastructure solutions(mainly serving customers in the SoftBank Group)
Construction of IT platforms, operation and maintenance services, andsales of servers and network equipment
Integrated monitoring tools for utilizing Linux and other open source software (OSS) for server applications and mission-critical systems, and system backups and more
[Net Sales] Net sales contracted due to the termination of sales of
specific hardware with difficulties creating and maintaining extra value in Q2 of FY2017.* A decline of 950 million yen has an impact throughout the fiscal year.
[Marginal Profit] The marginal profit ratio surged after the termination of
sales of poorly profitable equipment.
Progress in IT Infrastructure Solutions
(Billions of yen)
10.0
7.15.9
2.6 2.5 2.4
6.3
3.6 4.0
3.12.4
3.5
16
Consolidated
21 23 28
43.6
%
52.1
%51.6
%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0
30
[Net sales] Sales hike in security operation and monitoring services
(MSS*) amid needs for preparations due to increasing cyber attacks and shortage of security professionals
Strong in electronic certificates and device IDs
[Marginal profit] Increased after sales growth resulting from demand for
security
26 32
39
21 11
15 48
44
55
0
10
20
30
40
50
60
70
80
FY16 FY17 FY18 FY16 FY17 FY18
Net sales Marginal profitMarginal profit ratio
Consistent revenueProject revenue
* Managed security service (MSS): A service of operation and monitoring for customers’ security systems on a 24/7 basis from the security monitoring center.
Vulnerabilities examinations and measures against targeted attacks Authentication and encryption services using electronic certificates 24/7 security operation (monitoring and analysis) services and more
Security solutions(mainly serving enterprises, public offices and municipalities)
Progress in Security Solutions
(Billions of yen)
4.84.4
5.5
2.1 2.32.8
2.1
2.6
1.1
3.2
1.5
3.9
17
Consolidated
29 32 30
38.3
%
37.0
%37.2
%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0
30
60
90
[Net sales] Rise in recurring business sales after promotion of business
IT solutions and encouragement of shift to operation services
[Marginal profit] Decreased due to contraction of spot development
projects Accumulation of recurring business sales led to upward
trend in income margins.
41 41 52
36 44
29
78 86 82
0
20
40
60
80
100
FY16 FY17 FY18 FY16 FY17 FY18
Net sales Marginal profit
Consistent revenue
Project revenueMarginal profit ratio
Design and development of internal systems and operation and maintenanceservices
Development of business applications and systems for business divisions and operation and maintenance services
Development of applications for tablets, smartphones and robotsand more
System integration(mainly serving customers in the SoftBank Group Companies)
Progress in System Integration
(Billions of yen)
7.88.6 8.2
3.64.4
4.1 4.15.2
2.9
2.9 3.2 3.0
18
Consolidated
19 25 27
35.1
%
36.4
% 33.8
%
0
30
60
90
14 20 25
40
48
55 54
69
80
0
10
20
30
40
50
60
70
80
90
100
FY16 FY17 FY18 FY16 FY17 FY18
[Net Sales] Growth in central management of devices and mobility
services* Sales of collaboration platforms (stage 2 and later)
contributed to a sales surge.[Marginal Profit] A part of business IT (for business sections) project
became unprofitable. The marginal profit ratio fell, due partly to the precedence
of license sales.
* Enterprise mobility: A concept of increasing business productivity and stepping up security to provide mobility to the organization and its staff members
Net sales Marginal profit
Consistent revenueProject revenue Marginal profit ratio
Sales of licenses for Microsoft solutions Design, development and introduction support concerning the transition
of information systems to the cloud Operation efficiency improvement, authentication and security servicesand more
Cloud solutions(mainly serving enterprises, public offices and municipalities)
Progress in Cloud Solutions
(Billions of yen)
5.4
6.9
8.0
1.92.5 2.74.0
4.8
5.5
1.4 2.0 2.5
