WASHINGTON, D. C. 20549
The registrant files annual reports under cover of Form 20-F.
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form
40-F,
Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
|
|
(Yen in billions)
|
|
|
|
|
|
|
|
|
|
March 31, 2023
Results
Restated
|
|
|
November
Forecast
|
|
|
February
Forecast
|
|
|
Change from
November Forecast
|
|
Sales *1
|
|
|
10,974.4
|
|
|
|
12,400
|
|
|
|
12,300
|
|
|
-100 bil
|
|
|
|
-0.8
|
%
|
Operating income
|
|
|
1,302.4
|
|
|
|
1,170
|
|
|
|
1,180
|
|
|
+10 bil
|
|
|
|
+0.9
|
%
|
Income before income taxes
|
|
|
1,274.5
|
|
|
|
1,160
|
|
|
|
1,190
|
|
|
+30 bil
|
|
|
|
+2.6
|
%
|
Net income attributable to Sony Group Corporation’s stockholders
|
|
|
1,005.3
|
|
|
|
880
|
|
|
|
920
|
|
|
+40 bil
|
|
|
|
+4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
|
1,816.9
|
|
|
|
1,785
|
|
|
|
1,785
|
|
|
|
-
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
1,797.6
|
|
|
|
1,785
|
|
|
|
1,770
|
|
|
-15 bil
|
|
|
|
-0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For all segments excluding the Financial Services segment *2
|
|
|
March 31, 2023
Results
|
|
|
|
November
Forecast
|
|
|
|
February
Forecast
|
|
|
Change from
August Forecast
|
|
Net cash provided by operating activities
|
|
|
415.5
|
|
|
|
1,160
|
|
|
|
1,080
|
|
|
-80 bil
|
|
|
|
-6.9
|
%
|
*1 “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).
*2 Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to
investors. Please refer to page F-16 for details about the preparation of the Condensed Statements of Cash Flows.
Assumed foreign exchange rates are the following:
|
Assumed foreign exchange rates for the
three months ending March 31, 2024
|
(For your reference)
Assumed foreign exchange rates for the fiscal
year ending March 31, 2024 at the time of the
November forecast
|
1 U.S. dollar
|
approximately 142 yen
|
approximately 142 yen
|
1 Euro
|
approximately 153 yen
|
approximately 152 yen
|
Sales are expected to be lower than the November forecast mainly due to lower-than-expected sales in the Game & Network Services segment, partially offset mainly by higher-than-expected sales in the Financial
Services segment.
Operating income is expected to be higher than the November forecast due to an expected increase in operating income in the Financial Services segment, partially offset by an expected increase in the operating loss in
All Other, Corporate and elimination.
Both income before income taxes and net income attributable to Sony Group Corporation’s stockholders are expected to be higher than the November forecast mainly due to the above-mentioned expected increase in
operating income as well as an expected increase in financial income, net, primarily resulting from the recording of unrealized gains on securities.
Adjusted OIBDA is expected to remain unchanged from the November forecast due to an expected increase in Adjusted OIBDA in the Music segment, substantially offset by an expected increase in Adjusted OIBDA loss in All
Other, Corporate and elimination. Adjusted EBITDA is expected to be lower than the November forecast mainly due to an expected increase in net foreign exchange losses recorded within financial expenses, net.
The forecast for each business segment for the fiscal year ending March 31, 2024 has been revised as follows:
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
Please refer to “Supplemental Information” on pages 5 to 11 for details of the reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31,
2023.
|
|
(Yen in billions)
|
|
|
|
March 31, 2023
Results
Restated
|
|
|
November
Forecast
|
|
|
February
Forecast
|
|
Game & Network Services (G&NS)
|
|
Sales
|
|
|
3,644.6
|
|
|
|
4,360
|
|
|
|
4,150
|
|
Operating income
|
|
|
250.0
|
|
|
|
270
|
|
|
|
270
|
|
Adjusted OIBDA
|
|
|
337.0
|
|
|
|
385
|
|
|
|
385
|
|
Music
|
|
Sales
|
|
|
1,380.6
|
|
|
|
1,560
|
|
|
|
1,570
|
|
Operating income
|
|
|
263.1
|
|
|
|
295
|
|
|
|
295
|
|
Adjusted OIBDA
|
|
|
316.4
|
|
|
|
350
|
|
|
|
360
|
|
Pictures
|
|
Sales
|
|
|
1,369.4
|
|
|
|
1,460
|
|
|
|
1,470
|
|
Operating income
|
|
|
119.3
|
|
|
|
115
|
|
|
|
115
|
|
Adjusted OIBDA
|
|
|
168.2
|
|
|
|
165
|
|
|
|
165
|
|
Entertainment, Technology & Services (ET&S)
|
|
Sales
|
|
|
2,476.0
|
|
|
|
2,440
|
|
|
|
2,430
|
|
Operating income
|
|
|
179.5
|
|
|
|
180
|
|
|
|
180
|
|
Adjusted OIBDA
|
|
|
276.9
|
|
|
|
280
|
|
|
|
280
|
|
Imaging & Sensing Solutions (I&SS)
|
|
Sales
|
|
|
1,402.2
|
|
|
|
1,590
|
|
|
|
1,590
|
|
Operating income
|
|
|
212.2
|
|
|
|
195
|
|
|
|
195
|
|
Adjusted OIBDA
|
|
|
408.9
|
|
|
|
440
|
|
|
|
440
|
|
Financial Services
|
|
Financial services revenue
|
|
|
889.1
|
|
|
|
1,210
|
|
|
|
1,300
|
|
Operating income
|
|
|
318.1
|
|
|
|
155
|
|
|
|
175
|
|
Adjusted OIBDA
|
|
|
322.4
|
|
|
|
180
|
|
|
|
180
|
|
All Other, Corporate and elimination
|
|
Operating loss
|
|
|
(39.8
|
)
|
|
|
(40
|
)
|
|
|
(50
|
)
|
Adjusted OIBDA
|
|
|
(12.9
|
)
|
|
|
(15
|
)
|
|
|
(25
|
)
|
Consolidated
|
|
Sales
|
|
|
10,974.4
|
|
|
|
12,400
|
|
|
|
12,300
|
|
Operating income
|
|
|
1,302.4
|
|
|
|
1,170
|
|
|
|
1,180
|
|
Adjusted OIBDA
|
|
|
1,816.9
|
|
|
|
1,785
|
|
|
|
1,785
|
|
Adjusted EBITDA
|
|
|
1,797.6
|
|
|
|
1,785
|
|
|
|
1,770
|
|
Game & Network Services (G&NS)
Sales are expected to be lower than the November forecast, mainly due to an expected decrease in sales of hardware resulting from lower unit sales, partially offset by
the impact of foreign exchange rates and an expected increase in sales of non-first-party titles including add-on content. Operating income and Adjusted OIBDA are expected to remain unchanged from the
November forecast mainly due to the impact of the above-mentioned increase in sales of non-first-party titles, substantially offset by an expected increase in losses from hardware mainly due to promotions.
Music
Sales are expected to be higher than the November forecast primarily due to the impact of foreign exchange rates. Operating income is expected to remain unchanged from the November forecast primarily due to an
improvement in profitability, substantially offset by an increase in depreciation and amortization expenses. Adjusted OIBDA is expected to be higher than the November forecast, mainly due to the same factors affecting operating income,
excluding the above-mentioned increase in depreciation and amortization expenses.
Pictures
Sales are expected to be higher than the November forecast, primarily due to the impact of foreign exchange rates. Operating income and Adjusted OIBDA are expected to remain unchanged from the November
forecast.
Entertainment, Technology & Services (ET&S)
Sales are expected to be lower than the November forecast due to an expected decrease in sales of televisions resulting from lower unit sales, partially offset by the impact of foreign exchange rates. Operating
income and Adjusted OIBDA are expected to remain unchanged from the November forecast mainly due to the impact of the above-mentioned lower unit sales of televisions, substantially offset by expected reductions in operating expenses.
Imaging & Sensing Solutions (I&SS)
Sales are expected to remain unchanged from the November forecast mainly due to the impact of foreign exchange rates, substantially offset by an expected decrease in sales in businesses other than image sensors.
Operating income and Adjusted OIBDA are expected to remain unchanged from the November forecast mainly due to the positive impact of foreign exchange rates, substantially offset by an increase in costs and the impact of the above-mentioned
expected decrease in sales.
Financial Services
Financial services revenue is expected to be higher than the November forecast primarily due to an increase in net gains on investment in the separate accounts at Sony Life Insurance Co., Ltd. (“Sony Life”).
Operating income is expected to be higher than the November forecast mainly due to the expected recording of a gain from the transfer of a portion of shares of Sony Payment Services Inc. in the three months ending March 31, 2024. Adjusted
OIBDA is expected to remain unchanged from the November forecast.
The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict
market trends in the future. Accordingly, future market fluctuations could further impact the above forecast.
The above forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances. Actual results may differ materially from those included in this forecast due to a
variety of factors. See “Cautionary Statement” below.
Notes about Financial Performance of the Music, Pictures and Financial Services segments
The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate the results
of their worldwide subsidiaries on a U.S. dollar basis.
The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.
The Financial Services segment results include Sony Financial Group Inc. (“SFGI”) and SFGI’s consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. The results discussed in the Financial
Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.
Supplemental Information
Regarding Adjusted OIBDA and Adjusted EBITDA
Sony believes that Adjusted OIBDA and Adjusted EBITDA are performance metrics suitable for the long-term management that Sony prioritizes. This is because (i) they represent the sustainable earnings power of the
business as they do not include the effects of one-time gains and losses, (ii) they enable management to confirm that all the businesses of the Sony Group, including the Financial Services business, are expanding over the mid- to long-term
through cycles of investment and return, and (iii) they are often used to calculate corporate value. Adjusted OIBDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that these disclosures may be useful
information to investors. Adjusted OIBDA and Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results in accordance with IFRS.
Adjusted OIBDA (Operating Income Before Depreciation and Amortization) is calculated by the following formula:
Adjusted OIBDA = Operating income + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and
master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by the following formula:
Adjusted EBITDA = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in
Financial income and Financial expense - Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights,
as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the three months ended December 31, 2022 and 2023, respectively.
As the results for the three months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal
year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Three months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Game & Network Services (G&NS)
|
|
|
|
|
|
|
Operating income
|
|
|
116.2
|
|
|
|
86.1
|
|
Depreciation and amortization expense*
|
|
|
23.7
|
|
|
|
27.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
139.9
|
|
|
|
113.1
|
|
Music
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
63.0
|
|
|
|
76.1
|
|
Depreciation and amortization expense*
|
|
|
15.7
|
|
|
|
22.4
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
78.6
|
|
|
|
98.5
|
|
Pictures
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
25.4
|
|
|
|
41.6
|
|
Depreciation and amortization expense*
|
|
|
12.8
|
|
|
|
12.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
38.2
|
|
|
|
54.6
|
|
Entertainment, Technology & Services (ET&S)
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
81.1
|
|
|
|
77.2
|
|
Depreciation and amortization expense*
|
|
|
24.2
|
|
|
|
26.2
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
105.3
|
|
|
|
103.4
|
|
Imaging & Sensing Solutions (I&SS)
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
84.9
|
|
|
|
99.7
|
|
Depreciation and amortization expense*
|
|
|
49.8
|
|
|
|
64.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
134.7
|
|
|
|
163.7
|
|
Financial Services
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
47.1
|
|
|
|
77.3
|
|
Depreciation and amortization expense*
|
|
|
6.7
|
|
|
|
7.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
53.8
|
|
|
|
84.3
|
|
All Other, Corporate and elimination
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
3.9
|
|
|
|
5.3
|
|
Depreciation and amortization expense*
|
|
|
7.1
|
|
|
|
5.3
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
11.0
|
|
|
|
10.6
|
|
Consolidated
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
421.6
|
|
|
|
463.3
|
|
Depreciation and amortization expense*
|
|
|
139.9
|
|
|
|
164.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
561.5
|
|
|
|
628.3
|
|
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the three months ended December 31, 2022 and
2023, respectively.
As the results for the three months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal
year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Three months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Net income attributable to Sony Group Corporation’s stockholders
|
|
|
321.5
|
|
|
|
363.9
|
|
Net income attributable to noncontrolling interests
|
|
|
1.7
|
|
|
|
3.5
|
|
Income taxes
|
|
|
68.2
|
|
|
|
91.2
|
|
Interest expenses, net, recorded in Financial income and Financial expense
|
|
|
0.5
|
|
|
|
2.1
|
|
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
|
|
|
(2.3
|
)
|
|
|
(20.6
|
)
|
Depreciation and amortization expense*
|
|
|
139.9
|
|
|
|
164.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
529.5
|
|
|
|
605.0
|
|
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content
assets.
** There were no items which Sony deemed non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the three months ended December 31, 2022 and 2023, respectively.
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the nine months ended December 31, 2022 and 2023, respectively.
As the results for the nine months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal
year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Nine months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Game & Network Services (G&NS)
|
|
|
|
|
|
|
Operating income
|
|
|
211.1
|
|
|
|
184.2
|
|
Depreciation and amortization expense*
|
|
|
63.2
|
|
|
|
87.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
274.3
|
|
|
|
272.1
|
|
Music
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
202.7
|
|
|
|
230.5
|
|
Depreciation and amortization expense*
|
|
|
43.9
|
|
|
|
54.1
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(5.7
|
)
|
|
|
(6.0
|
)
|
Adjusted OIBDA
|
|
|
240.9
|
|
|
|
278.5
|
|
Pictures
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
103.7
|
|
|
|
87.0
|
|
Depreciation and amortization expense*
|
|
|
36.7
|
|
|
|
38.5
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
140.5
|
|
|
|
125.6
|
|
Entertainment, Technology & Services (ET&S)
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
212.5
|
|
|
|
193.8
|
|
Depreciation and amortization expense*
|
|
|
72.3
|
|
|
|
78.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
284.8
|
|
|
|
271.8
|
|
Imaging & Sensing Solutions (I&SS)
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
180.5
|
|
|
|
158.8
|
|
Depreciation and amortization expense*
|
|
|
143.6
|
|
|
|
182.1
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
324.2
|
|
|
|
340.9
|
|
Financial Services
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
266.3
|
|
|
|
147.5
|
|
Depreciation and amortization expense*
|
|
|
19.6
|
|
|
|
20.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(22.1
|
)
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
263.8
|
|
|
|
168.4
|
|
All Other, Corporate and elimination
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(21.0
|
)
|
|
|
(22.4
|
)
|
Depreciation and amortization expense*
|
|
|
20.1
|
|
|
|
15.5
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
(0.9
|
)
|
|
|
(7.0
|
)
|
Consolidated
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,155.8
|
|
|
|
979.4
|
|
Depreciation and amortization expense*
|
|
|
399.4
|
|
|
|
476.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(27.8
|
)
|
|
|
(6.0
|
)
|
Adjusted OIBDA
|
|
|
1,527.5
|
|
|
|
1,450.3
|
|
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the nine months ended December 31, 2022 and
2023, respectively.
As the results for the nine months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal
year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Nine months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Net income attributable to Sony Group Corporation’s stockholders
|
|
|
864.3
|
|
|
|
781.6
|
|
Net income attributable to noncontrolling interests
|
|
|
5.5
|
|
|
|
4.9
|
|
Income taxes
|
|
|
242.0
|
|
|
|
205.7
|
|
Interest expenses, net, recorded in Financial income and Financial expense
|
|
|
2.7
|
|
|
|
4.7
|
|
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
|
|
|
27.4
|
|
|
|
(30.2
|
)
|
Depreciation and amortization expense*
|
|
|
399.4
|
|
|
|
476.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(27.8
|
)
|
|
|
(6.0
|
)
|
Adjusted EBITDA
|
|
|
1,513.5
|
|
|
|
1,437.6
|
|
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content
assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the nine months ended December 31, 2022
and 2023, respectively.
|
|
(Yen in billions)
|
|
|
|
Nine months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
(Profit) / loss amount that Sony deems non-recurring
|
|
|
|
|
|
|
Impact of litigation settlements, net of expenses, received in relation
to lawsuits for Recorded Music and Music Publishing (Music segment)
|
|
|
(5.7
|
)
|
|
|
-
|
|
Recovery of an unauthorized withdrawal of funds at a subsidiary of
Sony Life which occurred in the three months ended June 30, 2021
(Financial Services segment)
|
|
|
(22.1
|
)
|
|
|
-
|
|
Remeasurement gain resulting from the consolidation of a company
previously accounted for using the equity method (Music segment)
|
|
|
-
|
|
|
|
(6.0
|
)
|
Total
|
|
|
(27.8
|
)
|
|
|
(6.0
|
)
|
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31, 2023.
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Fiscal year ended
March 31, 2023
|
|
|
|
Restated
|
|
Game & Network Services (G&NS)
|
|
|
|
Operating income
|
|
|
250.0
|
|
Depreciation and amortization expense*
|
|
|
87.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
337.0
|
|
Music
|
|
|
|
|
Operating income
|
|
|
263.1
|
|
Depreciation and amortization expense*
|
|
|
59.0
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(5.7
|
)
|
Adjusted OIBDA
|
|
|
316.4
|
|
Pictures
|
|
|
|
|
Operating income
|
|
|
119.3
|
|
Depreciation and amortization expense*
|
|
|
48.9
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
168.2
|
|
Entertainment, Technology & Services (ET&S)
|
|
|
|
|
Operating income
|
|
|
179.5
|
|
Depreciation and amortization expense*
|
|
|
97.4
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
276.9
|
|
Imaging & Sensing Solutions (I&SS)
|
|
|
|
|
Operating income
|
|
|
212.2
|
|
Depreciation and amortization expense*
|
|
|
196.7
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
408.9
|
|
Financial Services
|
|
|
|
|
Operating income
|
|
|
318.1
|
|
Depreciation and amortization expense*
|
|
|
26.3
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(22.1
|
)
|
Adjusted OIBDA
|
|
|
322.4
|
|
All Other, Corporate and elimination
|
|
|
|
|
Operating loss
|
|
|
(39.8
|
)
|
Depreciation and amortization expense*
|
|
|
26.8
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
-
|
|
Adjusted OIBDA
|
|
|
(12.9
|
)
|
Consolidated
|
|
|
|
|
Operating income
|
|
|
1,302.4
|
|
Depreciation and amortization expense*
|
|
|
542.2
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(27.8
|
)
|
Adjusted OIBDA
|
|
|
1,816.9
|
|
The following table shows a reconciliation of Adjusted EBITDA from net income attributable to Sony Group Corporation’s stockholders in accordance with IFRS for the fiscal year ended March 31, 2023.
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
|
|
(Yen in billions)
|
|
|
|
Fiscal year ended
March 31, 2023
|
|
|
|
Restated
|
|
Net income attributable to Sony Group Corporation’s stockholders
|
|
|
1,005.3
|
|
Net income attributable to noncontrolling interests
|
|
|
6.5
|
|
Income taxes
|
|
|
262.7
|
|
Interest expenses, net, recorded in Financial income and Financial expense
|
|
|
4.0
|
|
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
|
|
|
4.6
|
|
Depreciation and amortization expense*
|
|
|
542.2
|
|
(Profit) / loss amount that Sony deems non-recurring**
|
|
|
(27.8
|
)
|
Adjusted EBITDA
|
|
|
1,797.6
|
|
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included
in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the fiscal year ended March
31, 2023.
|
|
(Yen in billions)
|
|
|
|
Fiscal year ended
March 31, 2023
|
|
|
|
Restated
|
|
(Profit) / loss amount that Sony deems non-recurring
|
|
|
|
Impact of litigation settlements, net of expenses, received in relation to lawsuits for
Recorded Music and Music Publishing (Music segment)
|
|
|
(5.7
|
)
|
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which
occurred in the three months ended June 30, 2021 (Financial Services segment)
|
|
|
(22.1
|
)
|
Total
|
|
|
(27.8
|
)
|
Cautionary Statement
Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance
of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,”
“might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included
in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and
uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:
(i)
|
Sony’s ability to maintain product quality and customer satisfaction with its products and services;
|
(ii)
|
Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms,
smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing
customer preferences;
|
(iii)
|
Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and
distribution platforms;
|
(iv)
|
the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other
strategic initiatives;
|
(v)
|
changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well
as growing consumer focus on corporate social responsibility;
|
(vi)
|
Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and
capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;
|
(vii)
|
Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of
its products, and its other business operations;
|
(viii)
|
the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending;
|
(ix)
|
Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;
|
(x)
|
Sony’s ability to forecast demands, manage timely procurement and control inventories;
|
(xi)
|
foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets,
liabilities and operating results are denominated;
|
(xii)
|
Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;
|
(xiii)
|
Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products
or services infringe the intellectual property rights owned by others;
|
(xiv)
|
the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the
Financial Services segment;
|
(xv)
|
shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;
|
(xvi)
|
risks related to catastrophic disasters, geopolitical conflicts, pandemic disease or similar events;
|
(xvii)
|
the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the
personally identifiable information of its employees and customers, potential business disruptions or financial losses; and
|
(xviii)
|
the outcome of pending and/or future legal and/or regulatory proceedings.
|
Risks and uncertainties also include the impact of any future events with material adverse impact. The continued impact of developments relating to the situations in Ukraine and Russia and in the Middle East could
heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
Going Concern Assumption
Not Applicable
Accounting Policy and Other Information
(Changes in accounting policies)
Sony newly adopted the following accounting standards and interpretations from the fiscal year ending March 31, 2024:
IFRS 17 “Insurance Contracts”
The IASB issued IFRS 17 “Insurance Contracts” (“IFRS 17”) in May 2017 and Amendments to IFRS 17 in June 2020 and December 2021. IFRS 17 replaces IFRS 4 “Insurance Contracts”
and sets out principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of IFRS 17. IFRS 17 provides a general model, supplemented by a specific approach for contracts with direct
participation features (the variable fee approach), and a simplified approach (the premium allocation approach) mainly for short-duration contracts.
IFRS 17 was effective for Sony as of April 1, 2023. Sony has retrospectively applied changes in accounting policies resulting from the adoption of IFRS 17 unless it was
impracticable. Sony applied the modified retrospective approach, which uses reasonable and supportable information, or the fair value approach, which uses the fair value as of April 1, 2022, the transition date for IFRS 17, to identify,
recognize and measure certain groups of insurance contracts as of the transition date for IFRS 17, for which it was impracticable to apply the full retrospective approach. Therefore, Sony has restated the condensed consolidated financial
statements for comparative periods and the condensed consolidated statement of financial position as of April 1, 2022 on the basis of the retrospective application of IFRS 17. The effects of the retrospective application of IFRS 17 on Sony’s
total equity as of April 1, 2022 are presented in the condensed consolidated statements of changes in stockholders’ equity.
(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)
|
|
Yen in millions
|
|
|
|
Three months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Net income attributable to Sony Group Corporation’s stockholders for basic and diluted EPS computation
|
|
|
321,521
|
|
|
|
363,918
|
|
|
|
Thousands of shares
|
|
|
|
Three months ended December 31
|
|
|
|
2022
|
|
|
2023
|
|
Weighted-average shares outstanding for basic EPS computation
|
|
|
1,235,285
|
|
|
|
1,230,805
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
Stock options and other
|
|
|
3,128
|
|
|
|
3,553
|
|
Weighted-average shares for diluted EPS computation
|
|
|
1,238,413
|
|
|
|
1,234,358
|
|
|
|
Yen in millions
|
|
|
|
Nine months ended December 31
|
|
|
|
2022
Restated
|
|
|
2023
|
|
Net income attributable to Sony Group Corporation’s stockholders
|
|
|
864,296
|
|
|
|
781,568
|
|
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
|
|
|
|
|
|
|
|
|
Zero coupon convertible bonds
|
|
|
51
|
|
|
|
-
|
|
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS
computation
|
|
|
864,347
|
|
|
|
781,568
|
|
|
|
Thousands of shares
|
|
|
|
Nine months ended December 31
|
|
|
|
2022
|
|
|
2023
|
|
Weighted-average shares outstanding for basic EPS computation
|
|
|
1,236,176
|
|
|
|
1,232,879
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
Stock options and other
|
|
|
3,632
|
|
|
|
3,922
|
|
Zero coupon convertible bonds
|
|
|
2,706
|
|
|
|
-
|
|
Weighted-average shares for diluted EPS computation
|
|
|
1,242,514
|
|
|
|
1,236,801
|
|
(Segmentation)
The G&NS segment includes the network services businesses, the manufacture and sales of home gaming products and the production and sales of software. The Music segment
includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The ET&S segment includes the Televisions
business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and the internet-related service business. The I&SS segment includes the image sensors business. The Financial Services segment
primarily represents individual life insurance and non-life insurance businesses in the Japanese market and the banking business in Japan. All Other consists of various operating activities, including the disc manufacturing and recording
media businesses. Sony’s products and services are generally unique to a single operating segment.
(Change in presentation)
Condensed Consolidated Statements of Cash Flows
Certain reclassifications of the condensed consolidated statements of cash flows for the nine months ended December 31, 2022 have been made to conform to the presentation
for the nine months ended December 31, 2023.
Subsequent Events
Transfer of a portion of shares of Sony Payment Services Inc.
On January 31, 2024, Sony Bank Inc. (“Sony Bank”), a wholly-owned subsidiary of Sony, transferred a portion of its shares of Sony Payment Services Inc. (“Sony Payment Services”), a
consolidated subsidiary of Sony Bank, to a special purpose company established by private equity funds which are managed by Blackstone Inc. and its affiliates. Upon the transfer, Sony Payment Services became an affiliate of Sony accounted for
using the equity method and Sony expects to record a total of approximately 20 billion yen as operating income for the fiscal year ending March 31, 2024, reflecting both a realized gain for the shares transferred and a remeasurement gain
based on the fair value of the shares Sony will continue to hold after the transfer. The amounts of assets and liabilities of Sony Payment Services to be derecognized as a result of the transfer are not material.
Commencement of Preparations for Partial Spin-off of Financial Services Business
On February 14, 2024, Sony Group Corporation decided to begin concrete preparations for the execution of a partial spin-off (the “Spin-off”) of Sony Financial Group Inc. (“SFGI”), its
wholly-owned subsidiary, which operates the Financial Services business, and the listing of the shares of SFGI.
The impact of the execution of the Spin-off on Sony’s results of operations and financial positions has not been determined at this time. However, prior to the execution of the Spin-off, the
Financial Services business will be presented separately as a discontinued operation in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations.” And upon the execution of the Spin-off, Sony will apply accounting
for the loss of control of the Financial Services business in accordance with IFRS 10 “Consolidated Financial Statements.”