Earnings Transcript for 9984.T - Q4 Fiscal Year 2022

Operator: [Interpreted] They will be uploaded on our corporate website after this meeting. Please wait for a moment till the start of this meeting. Thank you.

Interpreter: [Foreign Language]

Operator: [Interpreted] Just to remind you on how to ask questions. We'd first like to have questions from the floor and then from Zoom participants. [Operator Instructions]. Please refer to the instructions that we sent you earlier. Please also refrain from connecting to other live stream to avoid any echoing. We would like to take up to two questions per person so that we can take questions from as many people as possible. Thank you very much for your corporation. Again, please wait for a while before starting the earning results announcement. Thank you. Thank you very much for waiting, everyone. Now, we would like to start the SoftBank Group Corp. Earnings Results Announcement for the Fiscal Year ended March 31, 2022. First of all, I would like to introduce today's participants. From left, Masayoshi Son, Chairman and CEO. Yoshimitsu Goto, Board Director and CFO. Kazuko Kimiwada, Senior Vice President and Head of Accounting Unit. Today's announcement is live broadcast over Internet. Now, I would like to invite Mr. Son, Chairman and CEO to present you the earnings results and business overview. Mr. Son, please.

Masayoshi Son: [Interpreted] My name is Son. Thank you very much for joining today. So about two years, we've been experiencing this COVID-19, and we've been experiencing a confusion in the world, in the market, and also Russian invasion of Ukraine starting from this year, we sold situation I believe that the market in the world is in confusion. Equity markets has been impacted largely, also we've been seeing inflation many places around the world, and interest rate rise due to manage the inflation, which also again impact to the equity market. Under such circumstances, what we should do at SoftBank Group, that's something I would like to explain to you with my presentation. So let me go into my sites. In summary, defense as I mentioned earlier, we are in the confusion in the world under such circumstances, we, SoftBank Group, should be taking defense position. So that's a clear position we should be taking at this moment. Just about two years ago. When COVID-19 started seeing in the world, we have announced ¥4.5 trillion monetization program. Also, we announced our share buyback and we have been executing those initiative in steadily manner. Now that again, we believe that we should be taken this defense mode. There are two things for this defense mode. One, is continued monetization. So that do we have enough cash position on our balance sheet. And for the new investment activities, we would like to make sure to keep stricter investment criteria. So that's the summary for today. For details, I would like to use my slides to explain to you. As I mentioned in the beginning, COVID-19, and the Russia n invasion of Ukraine. More specifically, 500 million has been infected with this COVID-19, it became a global pandemic. And because of this -- as a result of the Russian invasion of Ukraine, crude oil prices raised to 30 -- 38%, natural gas price became a 117% increase. So as lead price -- consumer price index in United States and at the same time, a same phenomenon has been seen in another -- the rest of the world. To manage such a situation, a long-term interest rate has been increasing to some level exchange rate that we've been seeing record a week Yen in Nasdaq 27% down in terms of Composite Index. Under such situation, I believe concerns from the people about SoftBank, I think there are three things, one, is the decline inequity holding value, or too much debt in SoftBank, or cash position. Is it safe? Those are the three things that many people may have as a concern over SoftBank. And this is a fact. Facts are net has its value, whereas we have ¥18.5 trillion with us and loan to value 20.4%. This is a second fact. And third of all, cash position that we have ¥2.9 trillion. So, these three are the facts or the answers for those concerns that you may have for SoftBank. And mainly from these three facts that the we like to -- I would like to explain to you more in detail of our current status. Net income, which has already been announced at three o'clock this afternoon ¥ -1.7 trillion. That year, before last year was the ¥ -1 trillion. And the last year was ¥+5 trillion. So, 1.7 trillion negatives here, but the we had positive several trillion yen. So, which has quite the dramatic movements from upper side to downside, but especially for this fiscal '21, full year net income was a negative 1.7 trillion Yen? Accounting gain were more important index that we focus is loan to value, and the net asset value. So, these two are something that we see as a very important index. So, the vision front which is mainly for our net asset value calculation, it's now down to 3 trillion Yen from 6 trillion Yen. So, Delta is 3 trillion Yen. But still, to the principle we have invested, we are still seeing this gain of 3 trillion Yen. So that's another fact. Those increase of unrealized gain or realized gain in total, with those increasing gain has been decreased, which is fact, but still, we still have ¥3 trillion, but this still [Indiscernible] ¥3 trillion. So compared to ¥1.7 trillion negative of net income, this is dramatically decreasing. So actually, this is even bigger issue compared to accounting loss. And that in detail by region. First of all, China, the gain we have been seeing in the past has been going away, and now it is showing negative figures here. In digital funds, new investment in China has been decreasing. Therefore, a risk for new investment in China has been carefully managed and studied. So that's our current position for investment -- new investment in China. So careful steps do not mean zero if -- EBITDA. There are still a lot of great companies, so for those companies who you'll still like to invest, but the relatively smaller size. In United States that has decreased Asia, Europe those also declining, so it's kind of a worldwide phenomenon especially setting from this year this Russian invasion of Ukraine, equity market has been largely impacted and declining and that has been also influencing [Indiscernible] funds results. Like I keep saying, rather than income from accounting perspective, NAV and LTV are more important. Net asset value and loan to value, those are most important indicators for SoftBank Group. In terms of NAV, ¥18.5 trillion. Equity holding minus debt, that's a net asset value which is ¥18.5 trillion. And NAV is evaluated every year, ¥18.5 trillion of NAV does not include debt owed. And our market cap as of end of March was ¥9.2 trillion. That means we are experiencing 50% discount. Looking at the history of NAV, as you can see, compared to the peak, we have seen decline, however, we still hold plenty of net asset value, more in detail in terms of net asset value, as you can see on the side, Alibaba lost a lot. I mentioned earlier, Vision Fund saw a loss as well. And the vision fund accounted for about 50% of NAV. Up until two years ago, Alibaba accounted for 60% of our NAV, so our NAV depended on Alibaba in terms of NAV before, but now Alibaba accounted for only 22% of NAV. So called China risks or Alibaba risks, we -- have been able to be reduced reasonably. And if you take the orange portion out of this chart, you can see how bigger proportion is occupied by Vision Fund, and as a total, you don't see a huge decline. So again, before we depended on Alibaba, maybe too much, but now we have been distributing and diversifying since then. And Vision Funds include 100 also portfolio companies, so again, we did diversification. If the global market declined dramatically, accordingly, we will see a loss of our value, but again, we don't depend too much on particular country or particular company anymore. Like I keep saying, NAV and LTV are the most important indicators for SoftBank. The second one to NAV is loan to value. Net debt divided by assets. The loan to value is 20.4% that's a fact. Again, looking back the history of LTV. We listed SoftBank KK, or SoftBank mobile, and sold a part of the shares, and since then, LTV has been constantly below 25%. Our policy is to run the business with LTP below 25% as business as usual, even extraordinary situation should be less than 35%, that's our policy. 35% as our red zone, if you will. 35% is a 1/3 of our assets and if that level is a 1/3 of our asset, we should be fine, but again, for business, as usual, we want to keep as low as 25%. Last time we made announcement of earning result, it was 22%, but now we are seeing 20.4%. That means its improvement. Many people said that since the equity market declined so dramatically, our asset should have decreased. Then the LTV could be over 25%. That's some concerns that many people may have. But again, we have a strict guideline and loan to value instead of deteriorated, it improved in the last three months. In terms of cash position, our policy is to have sufficient level our cash position, enough to take care of redemption for over two years. When you talk about bond redemption for the next three years, we should have ¥1.3 trillion. Against that, we have more than double in terms of cash position, which is ¥2.9 trillion. So, we are managing our business in a very secure and safe manner. The equity market won't decline forever, so when it's in the downtown -- downward trend, it's important to have enough cash position under the circumstance. And SoftBank share price has been discounted, and in fact, it has down, that means we have an opportunity to buy back our shares. And as you know, we made announcement to share buyback that was to buy our shares up to ¥1 trillion by November this year, and we have been in good progress and we are now 42% progress in six months. The shares will be canceled after we purchase our shares. Consequently, NAV per share should be better. So again, share buyback program has been going pretty well. While we are repurchasing shares, how will we be able to improve loan to value? Let me explain. If you asked us, haven't you done any new investment? In fact, we did about ¥5.2 trillion of investment we made. But also, we have done monetization program for about ¥5.6 trillion. So, we did both new investment and monetization. That means new investment is done with the money that we, monetized. So that kind of ecosystem is working low. So, we make sure that we won't affect our debt. So, when it comes to new investment, we monetize first and with that gain, we make an investment. When you -- we make a new investment, we usually invest in public entities. So, Vision Fund makes new investment into public -- excuse me, private companies, and when private companies go listed, then we do monetization from those existed businesses and the gain that we have, will be used for new investment. Again, that ecosystem is working. When it comes to new investment, we are more selective. Why? Because we want to have a stronger defense position, like I said at the beginning of this presentation. Since the world is in chaos, we want to make sure that we have plenty of cash position and we have a strong defense position. So, from existed businesses, instead of making new investment randomly, we want to make sure that we have enough cash position. How do we do? We manage pace of investment. We are more conservative when it comes to pace of new investment. I believe that our global private funds are doing the same, why? Because this data companies’ values are evaluated every day. So -- but the issue is corrected almost every day, but when it comes to private businesses their values are not evaluated every day. So, it's difficult to change the mindset into most of the values that they have in the private companies that they have. So, if the value was higher back then, they wish investors would invest in those businesses at higher value, but when it comes to listed companies, since their values are valued every day, it's difficult to attract new investment. So again, not only SoftBank, but also Venture Capitals and private equity funds are in the same circumstances. But in one year ahead, two, three years ahead, listed companies, equity market should be improved and the private businesses in the meantime, will keep growing. So, the balance, our values and opportunities should come in 1, 2, 3 years, and once an opportunity comes, we can resume investment in listed companies. So, depending on the circumstances, we are flexible, we are opportunistic again. Now is the time for us to have a strong defense position. And when it comes to approved investment amount of Vision Fund, in fact we have 475 portfolio companies, and Vision Fund, and compared to before, ticket size per business is being smaller. That's the recent trend. Number of IPO s have been growing in the last five years, every year doubled. But for the last 12 months, number of IPOs will be smaller. That's my conservative view. So again, we keep conservatively run the business. In the distribution of Vision Fund because we have about ¥3 trillion of the cumulative gain, and that you may wonder are those all-unrealized gain? But actually, partially the share has been sold and the way return in cash and the distribution total is ¥5.3 trillion. Vision Fund 1 and 2 total, as you can see, ¥5.3 trillion. It's not that all are coming to us, actually some of them are going to our partners. So first we distribute to our LPs and then we will be receiving, based on our equity ownership, Vision Fund 1 and 2 in total as you can see, yellow portion and orange portion. Those are the return to SoftBank Group as on distribution. Not only Vision Fund but also there are other assets or the public securities such as Sprint, T-Mobile, and some others, that those are also being sold or monetized. And in total after fiscal '18 in the past four years, we have already monetized ¥14.8 trillion either sales or monetization. So new investment, when it comes to new investment, we are recycling those money that being monetized of our existing assets, so that we are more conservatively with these decent modes that the way you like to keep on going. So, monetization will be continued, and also, we see stricter investment criteria so that we would like to make sure not to exceed 25% of LTV, so that we can have a safely manner of the driving of our business. So up to here, this page, you may disappoint it's not like your Masa, it's not like SoftBank, are you okay? You don't want to speak more about other side. So here, we also like to share with you that we don't forget about our opportunities, how we're going to frame and when or what. Without using new money as much as possible, we would like to use what we have in mind opportunity that's something you like to do that mainly coming from arms. In five-years ago, we acquired this company and SoftBank Group became 75% owner, and SoftBank Vision Fund 25%, so group overall that though we have 100% of this company. And Arm is kept on growing compared to when we acquired this business with these five years. Arm has been growing continuously and actually, annual Arm-based chips shipped became 29 billion chips. And this I believe is going to even grow exponentially, mobile market, IoT, Automotive, Cloud. In each sector -- each segment Arm is actually taking a very large market share. Actually, right after our acquisition of this business, markets share of mobile was much smaller, IoT was also the same, Auto was also the same, Cloud, was almost zero back then. But in these past four years R&D was fully invested and from back then was the Version 8 which was [Indiscernible] products when we acquire. But starting from that year Version 9 shipment had started. In the Version 9 case, unit price per chip is much higher compared to Version 8 in terms of loyalty. So, using this Version 9, for example, 5G mobile phone is almost using Version 9 chip and this proportion of Version 9 usage is increasing, which is also applied the same to auto or cloud and actually high function, high-quality chip, has been shipping to these segments so that -- it used to be flat in terms of sales, but starting from last year second half, it is increasing dramatically and we expect that this will grow even farther for this year and next year. As a result, when we acquire this business, there adjusted EBITDA was about $800 million and now went down by half. Back in fiscal '19, $365 million, but in the past two years, actually growing dramatically in almost record high in terms of adjusted EBITDA. When it comes to fiscal '22 - '23, actually, we are expecting they'll be doing even better, even higher. That's how I convinced this moment because they have already a bit pipelines with the major clients. And based on such pipelines we will be able to predict the good numbers of shipments, so that we can see a good picture for the business in the future and we are convinced that it's going to make great gross. So, from version eight, to version nine. So, in each version, it's been used in various products. But the key to further growth for this upgrading of version, is a multi-core. When you hear core, you make -- you can interpret to the one engine for one piston. So, one-core became two cores, became four cores, became eight cores. So, the core has been increasing. So, it's like eight pistons engines in automotive -- automobile case. So just about 10 years ago, it was single-core. So, starting from a single-core to dual-core, quad-core, so that number of cores has been increasing along with this version update. And now that it's becoming much, much higher function, and has hyperscale being used for Cloud automobile, those actually now have 144 cores. So, for one -- per chip, 144 cores are installed. So that's the kind of a product to use towards a Cloud. So, Arm CPU, actually low consumption of the electricity. However, computer power is actually, you may fear, or you may wonder that the performance is interior to Intel or somebody else. But actually, that's not true. With this multi-core, by improving this multi-core, low batteries, whether consumption buttery, but actually computing power is improving further more specifically per watt. Computing power is actually the key for the cloud service, or key for the automotive. And for that, we believe Arm is going to be a show player. A strong player. Smartphone and IoT, a lot of devices will have AI capability in Cloud and automotive. It's like super computers running on the road. So those are the trends that we're looking at. So, under that trend, Arm should be the key for the growth. Like I said earlier, SoftBank --now it's a time for SoftBank to be defensive. So, it's important that Arm does not need additional capital requirement, capital required from SBG. So, from personality perspective, I want to be offensive sometimes not always, being defensive, but as the business leader, when I think about Arm's next growth opportunities, in fact, I spend a lot of my time, Vision Fund and Arm growth strategy. We were talking about setting Arm to NVIDIA. But since we couldn't get the invite from the regulators, so taking that opportunity, me and myself spend my energy and time to figure out how best we can grow Arm further. So, in the future when we look back, we want to be proud of ourselves having Arm in our family. Arm is making profit and Arm does not require Capex. So, as you go offensive, Arm should get the more return, and does not require additional capital. So, looking at current SoftBank position, I should have spent my energy and time into Arm, which is reasonable. Arm is preparing for future IPO and the process should proceed. One obstacle for the future IPO was Arm China. The head of Arm China sort of rebelled and the board even though released him two years ago, the decision made by the Board two years ago to release him, procedures for that decision were not going well in China. And the head of Arm China kept control of the business, but we have seen dramatic progress in the last two weeks. And two core CEOs were officially approved by the Board, and the seal of Representative was authorized by the Chinese government, with that Arm China's now and a normal course. So, we have seen a big improvement and progress. In the past two years, we were not able to audit Arm China, but going forward, audit firm will scrutinize Arm China. With that, the only obstacle against Arm's IPO was addressed. So again, Arm's performance is good in the first place, and Arm was listed five-years ago. There's no reason why not Arm going public. So going forward, we will proceed with procedures of Arm's IPO. By the way -- well, I keep saying that defense, but in meet long-term, information revolution will stop our equity holding and assets and our group companies. For those things that we have, the future is uncertain forever. No, I am confident about the future of our business. Let me explain why I'm confident. The revolution of Internet started sometime around 1994. If the value back then was one, Internet industry index grew by 30 times in less than 10 years. That's why many people would say that Internet bubble, net bubble. In less than 10 years, the value grew by 30 times. There were net companies that did not to make profits, but their valuation went up. So back then many people say that was crazy. In fact, the market tanked. So, the valuation of the internet industry tanked to 1/3, but from a big picture perspective, in 10 years, it grew from one to 10 in the end. It was not bad, while worse than 30, but still compared to one, 10 is 10 times bigger. But from the people who bought those businesses at the time when the market cap was 30 times and people might call someone like me a liar. And bold liar. And maybe I am careless, but I am not a liar. Anyway, 30 went down to 10. But later in another 10 years, it grew from 10 to 100. Again, in less than 20 years in total, the market cap grew from one to 100. But after what we call Lehman shock, it down to 50 from 100, but again, compared to one, 50 is 50 times bigger than one. And people who sold Internet businesses at the time of Lehman shock, but to get this. In another less than 10 years, the market cap grew from 50 to 2,400, well, maybe a little bit over 10 years, grew from 50 to 2,400 compared to the peak 100, it grew 24 times and from that time it been down to 1,800 now. So, from SoftBank perspective, Vision Fund variation or NAV, we have seen decline, but we have seen those pink three times in the history, but in the middle of those pink period, whether you want to sell the stocks or buy the stocks. Buying the stocks, those people were brave and their bravery was worth doing that. And declined from 2,400 to 1,800. For me, it's a peanut. I believe that from now on information revolution will progress further. Why? Because Arm base chipset grew exponentially and AI users, AI penetration, computing power, all these things have been increasing exponentially. So, of number of users and computing power and cloud, value of them should not be effective by one time fluctuation of employment or market price, or foreign exchanges. More fundamentally, evolution of technology won't stop. Exchange rate, interest rate change, and change take place in a short period of time. But when it comes to change for a longer period of time, it's evolution. So, look at the forest, not look at the trees. We believe, long-term evolution and we will continue committed to information revolution. To summarize, SoftBank's position is defense at the moment. Without spending new money, we also go defensive and offensive. NAV, ¥18.5 trillion, LTV 20.4% and cash position ¥2.9 trillion, which is double the amount of bond redemption for next two years. So, while keeping defense position, we go offense without spending new money, and we keep committed to information revolution happens for everyone. Thank you very much.

Operator: [Interpreted] Now, we will would like to take questions. First, we would like to take questions from the floor. Please wait for the microphone and start your name and affiliation. [Operator Instructions]. We would like to take up to two questions per person, so that to we can take questions from as many people as possible. Now, we would like to take question from the floor. Please raise your hand if you have any.

Unidentified Analyst: [Interpreted] Thank you for your presentation, each cover from Yomiuri Newspaper. I would like to ask you about the investment policy. So, you actually being defense. But if you keep defense mode for this fiscal year, that's going to damage your next fiscal year and on for the -- any results. How are you going to -- do you have any measures for that? And another question from me is that equity market, especially volatility is high because of those new businesses, I think that you can help it and I understand the situation. However, seeing such unvolatility I believe there are concerns by the shareholders. So, to actually keep your performance steady, are you have -- do you have any plan to increase your portfolio in public securities?

Masayoshi Son: [Interpreted] We -- thank you for your question. We didn't stop or we don't stop our challenge, actually, we just make a smaller. There are some shining stars here and there. So, we be -- we've been selective for our investment activities. And for next fiscal year end on, we have 475 portfolio companies the umbrella of SoftBank Vision Fund. So those companies can also grow in being a fruitful for the results. So, I think we are still convinced. We may not be able to have a new pipeline for this fiscal year or the last fiscal year. But the one to two years later, we believe that the public market to IPO market is going to recover from my personal view. And that moment, we believe that we'll be able to come to the offense mode once again. So, we would like to well manage our defense mode and offense mode based on the situation, and to do so, loan to value, LTV, is very important. We need to keep this loan to value managing this in 25% so that financial discipline is going to be kept and while keeping such a commitment or while keeping these discipline that the way you would like to see a situation for our mode change. Because of private securities or private portfolio, we have several activities. But instead, your question is do we have any plan to do the public securities. But actually, public securities are the one that having that hit by the volatility and the and there was ratio of decrease in value compared to the markets average decrease ratio is something similar. Therefore, even if we have invested in public markets above, still I think that the result was the same. Rather, we had a vehicle called SV [Indiscernible] to diversify our portfolio, changing from focus or concentration for Alibaba. And as a result, actually that we have seen the decrease in Alibaba holdings. That's why that we have more diversification SV [Indiscernible]. We are scaling down not much activities of -- that's an answer for you question. Hope that answers your question.

Operator: [Interpreted] Next question, please. From the [Indiscernible].

Unidentified Analyst: [Interpreted] Thank you very much. Yee from Bloomberg. Question about pace of investment. You said that you'd make an investment more conservatively. If you slow down the pace compared to the previous year, how much in terms of pace and how much in terms of the amount of investment? That's the first question. And second is about Arm IPO. Timing and valuation that you are expecting now, if you could share your views with me, that'll be great. Thank you.

Masayoshi Son: [Interpreted] Compared to the previous year, remember the growth I showed you earlier in the latest quarter from December to March. Compared to the previous quarters, we have made it smaller. Peak was Q1. We made investment about 2 trillion. But Q4, you see a huge decline compared to Q1. Compared to the investment we made in the last year, I would say half or even lower than half of the investment. And of course, it depends on our LTV level and investment opportunities. We strike balance when it comes to making investment. But I would say compared to last year, the amount of new investment could be half or could be as small as a quarter. Now talking about Arm, again we can keep preparing for IPO. But the timing well, I would say as early as possible, but I won't say more specifically. Otherwise, my legal team would give me hard time, so I'd just say, foreseeable future. About the valuation, well, a lot of investment banks are giving us their expectation's while Arm's performance is pretty good. But again, before IPO, I'd rather not comment on the valuation that we're expecting. That's again, strong feedback I get from my legal team. Thank you.

Operator: [Interpreted] The next question.

Unidentified Analyst: [Interpreted] My name is Nakagawa Toyocase, I have two questions. First, you mentioned earlier regarding SB NorthStar. So, you issued a press release today. So, ¥900 billion, which is unrecoverable and 1/3 is from you. So public securities investment by Nasdaq, why do you think it comes to this end? And second question, is district investment criteria more specifically what part to you would like to make more strict when it comes to the criteria? And I -- and also, I like to ask you, is there any financial down-round of the portfolio?

Masayoshi Son: [Interpreted] The reason we established SB NorthStar because two years ago the Alibaba body is accounted for almost 60% of total asset. So, we should diversify. And one of the ways we can diversify is the investment in private securities by SoftBank Vision Fund. But we also like to diversify with public securities as well. So that was the background for establishing, as we know stuff. However, public stock investment that have some risks. And also, that was a new initiative for SoftBank Group as well. So that is why I also took risk of 1/3 of such so that we can carefully manage this activity. And we did get some damage, but if we keep on concentrating in Alibaba because Alibaba share price has been even declined to know about 1/3 compared to back then. Therefore, the amount or the ratio based on the share price decline Alibaba, if we keep holding the same ratio of Alibaba, should be the -- should be quite large. So, amongst the market overall declines of the situation, I believe that SB NorthStar has experienced same level of the declines in the equity value. In the mid to long term period, we believe regardless of a private or a public, once that we start seeing more and more opportunities, then that there must be role that SB NorthStar should be playing. So that the we're not seizing SB NorthStar or anything. We just keep it open but not making a big move. We would like to carefully watching the markets and when the time comes, and when the time is right, then again, we like to diversify our portfolio with our Public Securities through SB NorthStar. In your second question about stricter investment criteria. When we invest in Private Securities, this company in the industry, if there any peers which is a public company. So, when you have any peers in public securities, there growth ratio compared to such trend, how much their value should be for the company. That's what we called a comp. So that compare with the peer company that we check the value. And also, our business term that this company issue. How far should we trust their business plan that we do, have some surveys or do some research. That is, it trustful our business plan, or is it dependable business plan that we can. So, by having such strict criteria, we'd like to become even more careful about research and also due diligence of all the portfolio companies. I believe that's necessary, so that is why for the fourth quarter amount of the investment was about ¥300 billion, yes. So, it has been reduced because of such a strict investment criteria.

Wataru Suzuki: [Interpreted] Wataru from Nikkel Paper. Two questions. First, March 2020 you did a ¥4.5 trillion monetization program. Back then, your performance was not good, and it's not good either this year. So, I wonder if you have a plan to do another big monetization plan? Back then, LTV was not tie. Now what's the difference between now and then? The second question is about IPO. On IPO, I believe that you plan to make it listed by the end of fiscal year 2022. But since the equity market is weak, you may not be able to expect high valuation. Do you have a plan to extend the timeline maybe for next year or further? Thank you.

Masayoshi Son: [Interpreted] Thank you. First, we, made announcement of 4.5 trillion of monetization program two years ago. And while we made investment as much as ¥4.5 trillion or something, also we existed or monetized ¥5 trillion. See the slide again, please. We made new investment ¥5.2 trillion but at the same time, we monetized ¥5.6 trillion. Two years ago, we announced ¥4.2 trillion of monetization program, but this time even though we don't have such announcement, as you can see, ¥5.6 trillion of monetization is being done. So, again, ecosystem starts working even without making an official announcement. We constantly do monetization. And when it comes to new investment, like I mentioned earlier, for new investment, we have been stricter criteria. So, in one year period, this blue should go smaller and the yellow on the slide continues. From that perspective, loan to value should improve and we have enough cash position and do we have enough financial resources, achieve -- make an investment. So even without such unofficial announcement like we did two years ago, it's business as usual now, when it comes to monetization. So that's -- I would like you to understand how it works. And the second question is about Arm IPO. Again, obvious performance is extremely low even at the pace of exceeding our internal budget plan, but market moves. So, at the time of IPO, if the market then is not good enough, maybe we may extend the timeline by three months, six months, we don't have a critical target. So, Arm's business performance is going well and any time we should be ready for Arm's IPO. Thank you.

Operator: [Interpreted] Next question, please.

Unidentified Analyst: [Interpreted] Thank you. Thank you for your presentation. My name is Sheen from TV Asahi. You mentioned about interest rate and exchange rate. That's the kind of a onetime change. But you believe in the long-term progress. But we've been seeing the lock down in Shanghai in China, Chinese economy is being very uncertain. Do you see any impact to your business performance from such Chinese economy or Chinese status?

Masayoshi Son: [Interpreted] Yes, if it was two years ago, when we just start the beginning of COVID-19, our holdings in Alibaba accounted for 60% of our assets total, but now it's 20%. Actually, other than Alibaba is accounted for 80% and also Chinese portfolio, Chinese companies in digital fund portfolio is decreasing as well. Actually, other than China portfolio is a majority for visual fund investments too. So, in the past two years, actually, we've been receiving quite a large impact from China or Chinese situation. But for the future, because we have reduced the China dependency amongst our portfolio. Therefore, we believe we don't have to worry too much about the situation in China. Actually, the reason is because the exposure other than China is majority now. Net asset value, loan to value those calculation, Arm has its value as a private security so that this is very conservative calculation for net asset value and [Indiscernible]. Once Arm go public, then the value, what we calculating now for net asset value and [Indiscernible] will be much improved. That's how I see and convinced. So that proportion actually it's going to be taking more compared to Chinese concentration. Because Arm will be probably, I believe -- I assume that Arm is going to be the largest exposure amongst our portion.

Unidentified Analyst: [Interpreted] Kilimoto from Nikkei Paper, two questions. First China risk. So, you don't have a plan to further reduce China exposure. And secondly, what will be the most appropriate distribution in terms of regions? And second question is IPO. Even after IPO would you like to keep control of Arm and how much you anticipate? And IPO might have impact on your financial position. What's your view?

Masayoshi Son: [Interpreted] The first China mostly Alibaba, again declined from 60% to 20%. That's our dependency to China, and of Vision Fund cumulatively I believe that China exposure to less than 20% as of now, and for new investment even smaller. So again, dependency on China keeps less and less and other portion will be bigger and bigger. For Arm, Arm's business performance is pretty good. And even if IPO gets delayed by three months, six months, even further, our cash position is ¥2.9 trillion. And we have a strict criterion for new investment, so excess capital will keep piled up. So again, even Arm IPO gets delayed, which I don't believe, but even if Arm IPO timing gets delayed, so what? From my perspective it's not that big deal. After IPO, SoftBank 75%, Vision Fund, 25%, that's the current holding. And all Vision Fund, about half is held by SoftBank as a common stock. So SoftBank's control should be there even after IPO. So, majority stake will be still kept by SoftBank even after IPO.

Operator: [Interpreted] So, I'll take two more questions from the floor. After then that we would like to take questions from the Zoom.

Keidai Sanda: [Interpreted] My name is Sanda from Nikkei Business. I have two questions as well, first is technical confirmation, I would like to make regarding the financial policy. So, after April of this fiscal year, market is volatile and LTV, latest LTV figure, if you can share with us as of today. That's something that's very helpful, and cash ¥2.9 trillion, how much are there for the commitment line? If you can share with us, I would like to hear. My second question is a big set of question. In the very last page of the presentation, you were looking at a bird view. And you're taking a big picture for the future. So, when it comes to such a big picture in the past three months, because of the Ukraine situation, economics or economies or securities framework may change. Will those be a gas for your AI revolution or a break for your AI revolution?

Masayoshi Son: [Interpreted] For LTV. We disclosed every quarter basis. So that's a policy for the company. So, we don't share with you in the middle of the term. But as of March, and as of today, not much difference. That's what I can say for now. So, it's not that they're deteriorating heavily or anything. Actually, mid to long term, we're expecting to be able to improve the situation. And commitment lines for the -- of cash. About ¥450 billion under dollar currency and we haven't used any credit lines in Japanese Yen credit lines. And for long term even if we can see some cease fire by Russia, but the economic sanction may continue. So, this is not something all of a sudden disappear. We believe that this facts for inflate --inflation may continue. And I do expect the continuous increasing rate. That's how I see in conservative way. Under such circumstance world or the market starts building in those new situation, supply of new type of energy source like shell oil. So that's kind of a shifting is going to be happening, oil, gas, electricity in the coming one to two, three years. New base stall, new situation, and assuming such situations continue, the world is going to be adopting the new energy source or a new methodology. Then those volatility is going to come down. So that's something that we have seen in the past. So, the people's wisdom will be used and also developed based on or adjusting to the new situation, so that I don't believe we need to be pessimistic forever, but at the same time, having said that, I don't think this is going to solve in a short-term period. That is why that I believe we need to be in defensive mode of -- in the meantime. But when it comes to technology revolution, I believe this is going to be even more developed going forward. After COVID hit, online demand has increased dramatically, and such revolution is irreversible so that people start using much more online shopping, online education, Metaverse, online entertainment. That kind of things is going to be online and that use will be increasing or evolved further more. Even in the other ecosystems, I believe those will be change or replaced to online basis. That's how I see the future going. That's why I think, information revolution in this industry, will developed not depending on traditional methods or traditional way. I think evolution will go on. That's why I think the Arm's importance or Internet Ai's role is going to be even greater.

Operator: Our last question from the floor. Oda (ph) from Gigi Press (ph).

Unidentified Analyst: [Interpreted] Press. Two questions. First, your prospects for the market, you said that we don't have to be pessimistic forever. But the tech companies in Nasdaq market have been hit dramatically. So how long will it take and how do you think are you going to -- are they going to get improved? That's our first question. The second question. About Twitter bought by Elon Musk. So, from your perspective, what's your view as an investor? And is there any possibility that you get engaged whether it's an investment or not?

Masayoshi Son: [Interpreted] First to your question about to market forecast. The bulk of the net companies and [Indiscernible] are those huge events. How much the equity markets lost volume? It went down by 1/2 or 1/3, but they got to rebounded and even rebounded further from the previous peak. And compared to traditional industries, high-tech industries got rebounded remarkably. Growth companies have better leverage in terms of multiple. So, for those growth stocks, they may hit hard or harder than traditional industries, but when it comes to rebounding, they're only coming back to previous peak. But further, they get even more in terms of value compared to the previous peak. Because things get adopted to a new normal, so again, for a next one, two years, may be the market continues to be in chaos, but after that, it should get re-bonded dramatically. Well, looking back the Corona pandemic -- so again, tech companies were hit hard. But they got rebounded dramatically when the COVID-19 pandemic got stabilized. I believe that tech companies will get rebounded even more than before. Now, about a Twitter and Mr. Musk, I think Mr. Musk is great entrepreneur and he is one of the most respectful entrepreneurs to me. And he -- I think can grow Twitter in his own way. But from SoftBank's perspective, whether it's a direct investment or not, at the moment, I don't have any plan or any view.

Operator: [Interpreted] Now taking question from all nine agent participants. To avoid any echoing, please make sure that you don't connect to other live streaming other than Zoom. So, we would like to take a question from [Indiscernible].

Unidentified Analyst : [Interpreted] Yes. Thank you. This is [Indiscernible] speaks. SoftBank Vision Fund 2, I have a question about them. Looking at the financial statements, it seems like the requisite amount of after investment is negative. Well, how -- what is the status or performance results for the Vision Fund 2 activity so far? And also, how do you feel about that?

Masayoshi Son: [Interpreted] Vision Fund 2 is a slightly negative, I think. In principle investing in private securities, but because public market is declining in value even if they haven't had any down financial round, but because, we voluntarily decrease the value of the companies along with disappear a comparison. So that's because we are conservative for the views on Vision Fund 2 and the new investment in Vision Fund 2, that the we reduced our values for the calculation, six months or 12 months or 18 months since that investment was made and they haven't had any up rounds yet. So, when you don't have any new up rounds, meaning the situation is flat. But peer public names comparison in reduced evaluation along with that. So that's why you see some negatives in the results. For Vision Fund 1, they have already spent three to four years after our investments, so that they have experienced some up rounds or IPO events. So that's why that they resulting in some negative. But because Vision Fund 2 it's just -- it's not yet spent enough time. So that's why along with this comparison, compared peers that we have increased the value of those.

Operator: [Interpreted] Thank you. Next from the Zoom, Mr. Owada from Nikkei BP.

Naotaka Owada: [Interpreted] About information relation, happiness for everyone. To that you mentioned that technologies fundamentally keep evolving, but when it comes to happiness for everyone, how much technology can contribute to make people happy? What's your view because of the war and COVID-19, there are other people's struggling around the world? How do you help, making them happy? Thank you.

Masayoshi Son: [Interpreted] Every act by humans, may not end in something happy or pleasant. There are always some challenges and problems like traffic in accident, diseases, like wars. But for those problems occur with information revolutions solving those issues or problems at higher pace. I think information revolution should help in solving problems faster and better. For example, development of vaccine and the drugs for COVID-19. Thanks to AI technology. The development of vaccine was successful in very shorter period of time. Usually, it takes as long as five-years, but less than one year vaccine for COVID-19 was developed. Without AI or without information revolution, we could not have had drugs or vaccines for COVID-19. [Indiscernible] for example, which we bought, the company have developed drugs for COVID-19 and they went through medical test. And they've got authorization by the regulators in the U.S. and autonomous driving goes deeper and deeper and gets wider and wider. And they believe that the traffic accident will be less and better. For example, in Japan, a lot of aged drivers may cause a traffic accident, but with AI and autonomous driving technology, even aged drivers can drive without causing traffic accidents. And we're pressing the button of a weapon is done by people, a person. So long as people are on the earth, maybe they always we'll be a war. But information revolution, I believe and I hope should contribute to people's happiness.

Operator: [Interpreted] Thank you. Thank you very much. For the interest of time, this was the last question for today. Thank you. Thank you very much for your participation. So, this concludes the SoftBank Group Corp earnings results announcement for the fiscal year ended much 31st, 2022. The video footage of this meeting will be distributed on demand from our corporate website. Thank you very much once again for joining the SoftBank Group Corp earnings results announcement for the fiscal year ended much 31, 2022.

Interpreter: [Foreign Language]