SoftBank Corp. (9434) Earnings Call Transcript & Summary

[Foreign Language] Thank you very much for waiting. We will now begin SoftBank's investor briefing for the fiscal year ending March 31, 2022. We would like to begin by introducing today's attendees: SoftBank Corporation, Board Director, Executive Vice President and CFO, Fujihara; Finance unit, Vice President and Head of Finance and Accounting division, Naito; Finance Unit, Vice President and Head of Strategic Finance Division, Akiyama. Today's briefing will be broadcast live via the Internet. Thank you for your cooperation. Now we would like to have Fujihara explain the consolidated earnings results of SoftBank Corporation.

This is Fujihara. Thank you very much for participating in this presentation. We've just completed the earnings result of -- earnings results. And we would like to explain -- I would like to explain a little bit further on that. Here is the executive summary. I would like you to follow. First, fiscal year 2021, I would like to explain. And following that, we would like to talk about fiscal year 2022 forecast. And the third, we would like to talk about fiscal year '23 and beyond. Let me deep dive. First, consolidated results. Here is the summary. We were able to increase revenue and income both in the fourth consecutive years. As you can see on the very right side, it's the year-on-year achievement against the forecast, we are able to achieve the target. This is the revenue, the breakdown as follows: year-on-year increased JPY 485 billion, plus 9.3%; the Yahoo! contributed the most, JPY [ 34.6 ] billion; and the largest impact is the LINE consolidation, so the LINE contributed largely. As for enterprise, we have increased in solution. And as for consumer, even though we had the impact of the mobile price reduction, we are able to still maintain and we also had the large-scale project orders last year from the municipalities, and we had some decline. And next is Enterprise and Yahoo! Japan LINE contributed to overall increase. And you can see JPY 25.4 billion, plus 1.5%. And operating income year-on-year, JPY 15 billion plus, and Yahoo! Japan and Enterprise had the largest contribution. As for consumer, due to the impact of the mobile service price reduction, we were able to -- still, we were able to achieve a positive result. And consumer enterprise and distribution, we were able to achieve the forecast. And as for Japan, Yahoo! Japan online, we're able to even exceed the target. And here is the breakdown each segment, the revenue. So -- so far, we presented both revenue and operating income on the same slide. However, we separated this time. So as you can see, sales of goods and others and electricity had a plus. And as for mobile, minus JPY 69 billion, which most -- which the biggest impact was from the price reduction. And also half-price support, we have minus JPY 11 billion. And also, first year half year discounts due to the last year's accounting process change, we booked JPY 29 billion plus. As for electricity, we have a great increase in revenue and the subscriber increase was great. So last year, we had the shortage of electricity power. However, this year, we were able to gain and we have positive results. As for sales of goods and others, we are able to increase the revenue due to mobile device unit price rise. And next, the consumer income. We have cost of goods sold at JPY 37 billion. And cost of service, mainly electricity, was minus JPY 89.9 billion. And we have telecom network charges, which includes access charge, minus JPY 12.9 billion. We used to include this before, but now we separated and -- by itself. And expenses, cost of services was plus JPY 8.4 billion. As for Q4, plus JPY 38 billion. So last year, we had a robust investment and cost of goods, so we have a rebound from the last year. So due to some rebound from the last year's excessive promotion, we have some positive turnaround. So this is Enterprise segment, and this is plus 24.1% and plus 3.5% increase year-on-year. So in terms of revenue, business solutions continue to thrive. And in terms of mobile, it's plus JPY 7.8 billion. The breakdown here, you have mobile related in sales of goods and others. So for sales of goods and others, last year, we had a very [ flat ] margin businesses, large scale, and that impact is about minus JPY 6.6 billion. Now if you look at revenue and profit, I think you can look at this chart. On the right-hand side, you will see the segment income. You will see cost of goods services and sold and others is plus JPY [ 4.3 billion ]. In Q1, we had about JPY 3 billion in reversal of the profits, and we had some end of the year factors. So in terms of cost side, expense side, they were positive side. So that is why we have been able to have this balance here. And in terms of Enterprise segment, as it was mentioned earlier, we have recurring revenue and there are challenges to how we can increase recurring revenue, so we have been able to achieve plus 7% year-on-year growth. So this continues to drive our business. Now Yahoo! and LINE Z Holdings has already made the disclosures. I will just highlight main points. So media has grown significantly, commerce is also growing and LINE is contributing. And on the -- you can see that on the left-hand side segment revenue. On the right-hand side on income, Line, since it has been consolidated, we had stock options, expenses. We had amortization intangible assets, so we have pressures under the expenses. But LINE business has really been able to -- their growth has really been able to offset that. So this is something that we have been delightful. When we decided to integrate Line, it was loss-making, so we have made a significant progress. And we have other onetime factors here and Z Holdings has already explained that. So please look at the slide. In terms of Distribution segment and others, you can see that there's a decrease in revenue by increasing profit. And this is really 11th consecutive period increase in operating income. So this is overall quite strong. And in terms of net income, Z Holdings has already made a disclosure. So I will keep that in mind. But in addition to operating profit, please look at financial income and losses. On SoftBank's side, we had asset impairment of about JPY 20 billion here. So there is a reaction of that. So we have been able to actually increase this year on the back of that. And in terms of equity, shares of profit losses of associates, PayPay has recovered. So we have reductions here. And Z Holdings, our economic stake has reduced. So there's a big impact on that. So in terms of the number, it's JPY 517.5 billion, so we have been able to exceed JPY 500 billion. Next is CapEx. In last financial results, we said JPY 470 billion. We have front-loaded it, so it is in line. In our plan, it's JPY 450.4 billion. And since there are new companies, so consumer and enterprise numbers will be disclosed furthermore in detail. Next is free cash flow. So JPY 579.7 billion year-on-year, this is minus JPY 134.1 billion year-on-year. This is a factor that had occurred in Q1 and it has been reflected on a full year basis as well. In Q1, we explained in detail. But 2 years ago, so FY '19 end, we try to streamline our balance sheet. And with regards to -- we have decided to reduce our cash and cash on hand. And at the beginning of FY '20, we started out the year with COVID, so we decided that we need to build up cash. So it was from the valley to the mountain, and there have been [indiscernible] securitization of receivables. So there's an absence of that. And also in terms of income tax, with an integration of LINE business, we have paid out the taxes as well. So the impact has been reflected here as well. So this is how it has impacted our free cash flows. Essentially, how do we generate free cash flows and how do we use it? So let me explain, that's really the essence of the business. So we disclosed this in the same way each year. So if you exclude Z Holdings, if you look at operating cash flows, you have impact of securitization, CapEx, investments, those have been reflected. We do investments for growth. And also, we do additional investment to PayPay. And for example, this year, we have spent about JPY 25 billion in Treasure Data. And also, we have invested in digital marketing company in Asia. So we have invested about JPY 80 billion or so. So we have this cash left on hand, and this is what we have disclosed. In IFRS 16, base station rent has to be capitalized, and it will be paid out in financial cash flows. So this is minus JPY 125.4 billion, which we have to pay out, and then we pay out dividends. So rest is JPY 50 billion. So this is the overall picture of the cash flows. On the right-hand side, you can see our investments for growth in the past. So FY 2021, JPY 88 billion, you can see that we have been very proactive in investment growth. And we have major events like Yahoo! and Line, and we manage them as events. So that impact has always been disclosed each year, but we do not have anything major like that in FY '21. So we -- it has led to improvements in our financial position. And I want to introduce our balance sheet. So we have total assets of JPY 12 trillion, and we pay out JPY 400 billion in dividend. So our shareholders' equity will be JPY 139.5 billion increase. Total equity is up JPY 151.2 billion even after the dividend was paid out. So you can see that our shareholders' equity ratio and equity to total assets improved. And here is net interest in bearing debt and net leverage ratio. On the left-hand side, you can see that, which is about an increase of about plus JPY 360 billion. As you can see on the comments side, we acquired trademark for Yahoo!, and we had a payment for squeeze out of LINE, and there's a part which is a purchase of LINE shares less than [ one unit ] so that's about JPY 0.2 trillion. So net bearing debt was up by JPY [ 0.36 ] billion. So our leverage ratio is 2.5x. So it's a slight increase, but basically the same unchanged. So you can see our position. Now next is KPI. As for telecom, so net addition is up 6.4% by JPY 1.65 million. So smartphone is just an entry to others. So therefore, we would like to double down on this area. And the right side shows a churn rate. So what's happening in the market, we are doing steadily. And acquisition and churn rate simultaneously we are working on. So I think other companies will disclose the same. As for net additions by each quarter, as each quarter goes by, you can see that addition is increasing steadily. As for Q4 compared to the previous year, we have grown significantly. And for main subscribers, net additions, we have increased, such as tablets and mobile have decreased. However, as for main subscribers as a whole, we have [ press ] net additions. And this is where you are interested in most for operating data telecom. And as for JPY 280 billion among which JPY 260 billion is the impact of the price reduction. The price reduction -- and after the price reduction gap has been recovered. So as for ARPU before discount and debut plan and the entry models, which we increased, this is the negative factors. However, each quarter, ARPU compared to year-on-year and the price reduction impact have shown on the right side. And this is the annual average, JPY [ 220 billion ] annual average. And last year, it was like JPY [ 217 billion ] and [ JPY 220 billion ]. So it was like JPY [ 5 billion ] different, which we were able to manage thoroughly. So throughout the year, this is the average. As for fiscal year '22, JPY [ 220 billion ] will be expected to be JPY [ 270 billion ], this is where we estimate. So the background of the forecast is this JPY [ 270 billion ]. And next is broadband and electricity, those subscribers grew steadily. As you can see here how we grow. And next is the Yahoo! Japan and LINE, which Z Holdings has already disclosed. And e-commerce and the LINE integration had a great impact. Next is PayPay. In the earnings results presentation just before, so 50 million subscribers is what we are expecting to turn, and the number of merchants continues to expand. So the KPI -- so we've achieved 78% and JPY 5.4 trillion is what we have achieved. And as for PayPay revenue, so PayPay will have the impact on the -- of our growth. As for Q4, due to the cash back, rebate amount exceeding revenue was previously expensed. So therefore, we had to reduce this amount. So therefore, we decided to book this amount, which is shown in gray on the left side. So what we are expecting coming out in the future is what you are seeing in this gray. So after accounting change, you can see the figure here. So this is where we need to double down on further. As for payment service, which is growing greatly, plus 31.5% increase and JPY 1,273 billion year-on-year. And as for ESG development, so we established a special committee comprised of independent external directors. So as for Index, we were able to be selected. So I will continue on consolidated FY 2022 forecasts. So number wise, it is exactly the same as what we have presented. Here we just highlight main points in terms of revenue growth. So we have -- when we disclosed our medium-term target, it was JPY 5.9 trillion. So there's about JPY 400 billion in upward revision and operating income remains unchanged and dividends is as we have announced in our policy. And if you look at this by segment, Consumer decrease will be offset by Enterprise, especially PayPay consolidation impact in other categories. If you could just confirm that. On the right-hand side, you will see comments in PayPay. And when we make it to a subsidiary, we will have positive impact. So we will have gains from measurement related to making PayPay [indiscernible] operating income loss of payback to consolidation and amortization and intangible assets, which is M&A accounting. So FY 2022 I will walk through how it trends in terms of consumer segment income. So JPY 639.5 billion, there's a significant reduction in this forecast. One is mobile service price reduction. Next is high your sales-related expenses, among which JPY 40 billion is noncash deferred impact and the details are listed on the right-hand side. And with regards to PHS service termination, we will be removing retirement of assets and disposals. So there will be about minus JPY 15 billion. So this will be [ sunset ] expenses. And aside from that, we will have increase in smartphone subscribers, cost reductions. But because we have been able to generate a lot of income from electricity this year but because of the difficult market situation today, there will be negative impacts so we have taken that into account. But if you look beyond FY 2023, whether it be mobile service price reductions or sales-related expenses is on a reductionary trend and also PHS service termination, impact will diminish. So actually, this will turn out to be positive. In regards to depreciation, you can expect larger decrease in depreciation cost in FY 2023 onwards, so I think that picture will change quite significantly after FY 2023. So let me elaborate more on FY '23 beyond. So as President Miyakawa explained earlier, so we have mobile service price reductions. Impact will be reduced from 90 to minus 50, and this will be offset with the fixed cost reductions, and we have already seen depreciation decreases, so it's already in visibility. And in addition to that, we will make our first to reduce OpEx as well. And we will add business growth and make sure that we're able to realize that. So that's our design blueprint. And so let me elaborate on the mobile service price reduction. So within 3 years, most customers upgrade. And at that timing, they tend to go on a new plan. So largely, this is the picture in year 1, customers who are sensitive to prices they tended to do upgrades most focused on mobile devices. So the -- it tends to be higher. But overall, this will be the trend after FY '23 and onwards. So we will see reductions in depreciation cost. We already know that from the past flow, within 10 years or so, we tend to depreciate. So we are now beginning to enter into that depreciation decrease period. And on the right-hand side, network OpEx, this is expected to decrease as well. As Miyakawa said, there will be some expenses that would occur, but we will observe that -- absorb that, excuse me, and we will realize the benefit. As a result, if you exclude PayPay consolidation impact, our existing operating income will be on a recovery trend. In particular, mobile service revenue, next year will be more challenging. So it will be more difficult until FY 2023. But if you multiply ARPU by subscribers, I think that's our key KPI that we will follow, and it's really about how much we can grow there. So we can hopefully turn around in 2 or 3 years. So we are somewhat conservative in our forecast. But as we grow our smartphone subscribers, this is an operating income we want to continue to maintain. With regards to CapEx, in 2022, our challenge is to make sure that we deploy 5G, so we will be [ thorough ] on this and make sure we complete this successfully. And we will reduce CapEx by JPY 100 billion. So we will continue to maintain JPY 330 billion CapEx with discipline. As a result, our free cash flows. Actually, if you look at EBITDA and profit, it's declining, but we are increasing our CapEx. So how are we able to increase free cash flows? I mean, that's a question -- valid question you may have. So I have made a little more description on the right-hand side. So with regards to acquisition costs, it says JPY 40 billion in noncash. This is actually reflected in EBITDA. So we have investment for growth, about JPY 88 billion. This is maybe more than twice on a normal year. But we have room for controlling that as well. And our working cap, because we're paying taxes this year, and also, we're looking at the phases of operating -- decreasing operating income, there will be tax benefit as well. And of course, we will be able to inform working cap including securitization. So we believe that JPY 600 billion level will be stabilized. And FY 2023 and beyond onward, we will be in a phase where we will contain our CapEx. So JPY 600 billion is a number that is very much achievable, I think. So this is a summary page. You have 2022 forecast and beyond FY 2023, just a way of our thinking. So operating income achieved medium-term target, but it will be supported by consolidation of PayPay. So with regards to existing business, we need to make sure that it is recovered fully. So that's our challenge for 2022 CapEx. We will make sure that we complete the deployment of 5G, and it will be cycled off in 2023 upward. And fixed cost, we will continue to achieve cost efficiency. And we have continued to do so. But in -- beyond 2023, we will make sure that it's really visible that network actually decrease. And our free cash flow, JPY 600 billion, shareholder return JPY 86 dividend per share. We have -- this is fixed, and we will announce this. And in terms of beyond '23, we will continue to achieve higher shareholder returns, and we will continue to examine how we can realize that specifically. So that is all from me. Thank you very much for your kind attention. So I would like to take questions from you.

[Operator Instructions] And we would like to limit questions to 2 per person. The first, from Daiwa Securities, Mr. Ando, please unmute and ask your questions.

I have 2 questions. One is about consumer, consumer's income forecast. So as you explained, but I'd like to have a different angle questions. So a 3% decrease in income. And you said a 25% decrease in income this year, which is impacted by the mobile service price reduction, which I understand partly. However, from the previous year result and this fiscal year's result, why the results look differently? Can you elaborate on that, please?

I will go one by one, and one is about acquisition costs. As for fiscal year '21, we were active in acquisition -- active. And so therefore, '21 we had increase in cost. However, due to the COVID situation, acquisition cost was lower. And in that time, depreciation was lower and which has been accrued. And what's used was accrued in the following the year, which is the ordinary case. Therefore, for fiscal year '21, there was the benefit of this accrued. That's why fiscal year '21 did not have much impact. However, if we say that we spend almost the same amount for the acquisition cost, we are going to see the full year impact for the acquisition costs due to the accrued from the previous fiscal year, and we are getting on top. And for fiscal year '21 compared to fiscal year '20, and that time, we were not able to acquire handsets -- the income from handsets. But in fiscal year '21, for handset income, we were able to get some merits. So from '21 to '22, we were able to maintain the speed. So we were -- so this JPY 60 billion is still noncash. As for the impact of the price reduction, yes, it has increased. So as for '21, against the demand of the electricity, supply was less. So there was a loss-making, that's why it was negative. But this year, we successfully managed and -- due to the market situation. So therefore, a couple of double-digit billion yen, we have some merit. And we are going to have some benefit of JPY 15 billion. So last year, we tried to cover with other costs and -- but this year, we had to admit some negative -- negative results.

So regarding 3G, is there any impact of 3G? And are you -- are you having any accelerating factor for that?

Well, as for 3G, we are not expecting much about 3G. However, there will be some plus and minus position towards 3G, but we should be able to deal with the 3G situation.

And my second question is about the income from mobile and your forecast for subscribers. As for subscribers from the latter half of the previous fiscal year, it increased. Are you expecting the increase this year as well? Or do you have any guidance on that?

Yes. For net additions, of course, we need to pay attention to the same level this year. We are not optimistic too much. However, we have regained our confidence. So increasing the number of smartphone subscribers is a core driver for our business growth as SoftBank Corporation. So therefore, we would like to further reinforce this.

So assuming that you're expecting the significant growth in subscribers, which is estimated in this number?

Yes, largely.

Next, Mr. Masuno from Nomura Securities.

This is Masuno from Nomura Securities. One question. First question about understanding ARPU. So among the minus JPY 220 billion in FY 2021, the service price reduction is JPY 170 billion, I think that's what it says. So FY '21 is minus JPY 170 billion, among -- what is the amount and the impact of mobile service price reduction? We always see price reduction. That's how you express it. But that's because there's a lot of things, items that are migrated to Y!Mobile. That's not really a price reduction. So maybe there's a true sense of tariff reduction and also the differences changes in brand mix. So would you be able to really give us a breakdown on that, of the JPY 170 billion.

So when you say service price reduction, I think in reality, it's different, the nature is different. I apologize, I think the way we express it is inappropriate so -- which is the impact of the prices. So brand migration is actually, in reality, more like an upgrade, but it does have a significant management impact. And this is all affected by the series of events. So we take this as an impact on our management. Among the impact, the majority is migration, brand switch. I think that's how you can understand that.

So how much is it among JPY 270 billion?

So we can assume a certain number of subscribers and then you can divide it by JPY 90 billion. So you should probably get like JPY 170 billion, JPY 190 billion or so. So that's the situation. And this year, the benefit of half price discount is reflected. But next year, it will not be. So I think you expected JPY 270 billion level in terms of total ARPU year-on-year. Q4, JPY 280 billion. I think if we give you this number, you will be able to see what this JPY 280 billion means. So Q4 this year, FY '21 is minus JPY 280 billion. But next year, we're looking on an average in minus JPY 270 billion. I think you can get a message from that.

And secondly, about -- the impact on the 30-year profit and losses as a result of sales expenses. In Q3, you do not give such a stringent [ tone ] on it. But in the President's presentation earlier, you said -- decided that you will actually book a large amount of sales-related expenses. That's because you have done a lot of sales promotions. In January margin, you have decided that and you decided that you will continue to do sales and promotions. Is that why there's such a large impact?

Well, it wasn't necessarily January, March period. However, we want to track -- go after net additions. So we are planning to spend substantial amount of acquisition costs. But in the previous quarter, with regards to PayPay, we were not able to give you details. And even today, there's points which we are not able to speak with certainty. So I think maybe the tone was slightly different in that sense. But it's not that there's been a sudden change.

I see. However, but if you look at full year March 2023, you have decided that you will do significant sales promotion. Is this something that you had decided 6 months?

Yes. In the first half, when we struggled, we discussed what we need to do in the future. So we need to really leverage on the sales capabilities of SoftBank, and we should -- that we need to really be -- our consensus whether we need to focus on net additions. So that's sort of the process that we went through, which was explained by Mr. Miyakawa. And we thought that there will be a substantial amount of expenses. But in light of this COVID situation is starting to calm down and we're starting to recover, we have been able to really exercise our key sales capabilities. And I think this is now being able to reflect more in the numbers, and I think the reality is that we're able to speak more in terms of solid numbers.

Next from Citigroup Securities, Mr. Tsuruo. Please unmute and ask your questions.

My first question is the CapEx investment for the midterm, so I would like to confirm once again. So I understand that this fiscal year increased JPY 430 billion, but the current base -- the number of base station and the future number of base stations, can I have the number? And I understand that you're expanding the coverage. But what about the investment for a stand-alone, and that can be covered by this JPY 430 billion. This is my first question.

Yes, now we have covered 90%. So the number of base station is not clear as far as I understand yet. But we would like to achieve that. As for stand-alone, yes, amongst JPY 330 billion, we are able to manage it, and which is included.

Okay. And my second question is about dividend. And many carriers are aiming to increase the dividend, and they are trying to actually achieve the -- increasing the dividends. So your company is not going to increase the dividend at this time. Maybe you're not motivated to do so? Or there is some -- the reasons behind? So I would like to hear what your plan for that. And you have no plan to increase the shareholders' equity at this time. So please explain what you think.

Yes. regarding -- we were able to provide dividend by 80% or so. And I think our number is second highest next to Toyota. I would like you to understand that we are proactive in providing the dividends. We are proactive in providing dividends. I appreciate your understanding. As for increasing the number of -- so buyback of 85% over 3 years is -- I think our standard is higher than the others. So therefore, we would like to maintain this. And moving forward, yes, we understand your expectations. So we are determined to further discuss. And we would like to have a proactive communication around that.

So Okumura-san from Okasan Securities.

Okumura-san from Okasan Securities. I have 2 questions. First question, just a clarification. If you look at the segment income forecast, you're planning to increase by JPY 150 billion year-on-year in Yahoo! and LINE segment. In Q&A, first session, you said PayPay consolidation impact is a little, or minimal. I don't know if this for the holdings EBITDA basis, they are planning to increase. So I must assume that PayPay consolidation was significant -- made a significant contribution. Is this difference in understanding?

I apologize. We need to make a correction. It's a significant contribution. Yes.

Then the second question, about PayPay. I'm looking at take rate. The year before, because of accounting treatment changes, I think there was maybe 1% or so. But if you look at PayPay potential going forward, you talk about first layer -- second layer and third layer, if you want to monetize that. What is the take rate improvement you're looking at on a GMV basis? What is your guidance on that or target? And along with that, in order to break even in the future, what is the GMV target you have in mind? If you're able to share, please share. That's all from me.

With regards to specific take rate, unless PayPay makes a specific disclosure, we're not able to make a specific comment. But 1% is not satisfactory, we're looking at 2% or 3% increase. I mean, as we continue to expand our services, we need to keep that in mind. So potential is quite significant, and they have many things that they need to challenge on, an initiative that they need to endeavor on. With regards to breaking even, at this point in time, in terms of -- if you step on a brake on customer acquisition, they have room to design breakeven. I think that's the far they have come, but they want to continue to build customer base, furthermore. So if they can do that, they will be able to naturally break even. So when I say naturally, even if they spend acquisition costs, they can break even, and that will be in horizon. So we need to make -- that's what they're trying to do right now, and they're trying to build a company size. And the blueprint is becoming very clear. So with additional services and the [indiscernible] they make, we will be able to update you. And I'm sure PayPay will continue to communicate different information to you. But as a parent company or as a shareholder, I am not able to make a unilateral comment about PayPay, so I hope you will accept that.

Next, BofA Securities.

This is Kinoshita. I have 2 questions. One is -- you mentioned about 85% over 3 years. In terms of buyback, it may include incentives for your employees and management. This is also considered -- or it's not included in terms of buyback. And -- so how much would be -- how much would be the return ratio?

Well, 85% is times in over 3 years and JPY 8 billion. So that will be subtracted from the JPY 400 billion. So this time, I mentioned 85%, so which includes JPY 80 billion or close to that. So we would like to have the -- we would like to communicate having depreciation in mind, either we depreciate or maintain and -- which contributes to IFRS.

So just to confirm, once again, at this time, JPY 100 billion is considered to be used for return?

Yes, that -- we consider that.

The next question is about income. So this time, onetime income due to the PayPay. So PayPay is onetime income, including like Yahoo! and LINE. So even though there is a Yahoo! increase in income, but PayPay is minus. So purely, there is no onetime income factor. But you are -- I'm sure you said that you're planning to recover in the next fiscal year. Or you might think that it will take even a little more than that to recover.

As soon as possible is what I can say here over some years is what we expect for recovery. In the earnings results presentation earlier, fiscal year 2023 will be difficult to realize.

Next is Moriyuki, Mr. Moriyuki from SBI Securities.

This is Moriyuki from SBI Securities. So I have 2 questions. I want to confirm about revenue. So you said it will be minus 60. And I can see that there will be deferral of about 40. But 20 is cost of increased device sales. Would this be reflected in net additions, or is this increase in unit price in order to promote upgrades? Or -- if number of devices increase, it seems like you would have an item for device sales, but you do not have that. So could you be able to explain that?

Well, FY 2021 was too good. So it will be normalize. So there will be a slight decrease. So that's our sort of overall view.

I see. Also related to the earlier question. So you said it's difficult to recover next year. So JPY 1 trillion that you have achieved at one point, it's actually -- you will have a step back and it will be below JPY 1 trillion next year. Is that the right image?

Well, the base line thinking will be just that, that will be correct. But because we have set JPY 1 trillion as a target make sure we will achieve that. And we -- one of the reasons why we're concerned about cash of JPY 600 billion is in order to realize next growth. It's also an element of buying time. So we will do what we need to do and lead that to next growth. And during that time, we need to make sure we will generate cash and respond to the expectations and meet our target. So that's a show of our intention or will.

So with regards to PayPay, which you were incorporating this fiscal year, how are you incorporating in that? In terms of, I think, valuation, it's quite conservative. So can we see a lot of upside, or is it a possibility that it might not be realized this year? Maybe is that why you're conservative?

Well, with regards to amount and we have said more than because there's -- it's subject to a market situation. But one thing I want to make is that we have invested in PayPay, and PayPay has been losing money. So our book value is nearly 0, very close to 0. But if it is evaluated, there's no -- appropriately, then there's no doubt that it will be positive.

We would like to conclude the Q&A session. We would like to conclude SoftBank's investor briefing for the fiscal year ending March 31, 2022. Today's presentation will be available on demand on our website later today. Thank you very much for taking time out of your busy schedule today to attend the investor briefing for the fiscal year ending March 31, 2022, of SoftBank Corporation. Thank you very much. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]