Form 6-K Sony Group Corp For: Jul 29
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E-mailSECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of JULY 2020
Commission File Number: 001-06439
SONY GROUP CORPORATION
(Translation of registrant's name into English)
1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN
(Address of principal executive offices)
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,
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Form 20-F X
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Form 40-F __
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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-______
SIGNATURE
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.
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SONY GROUP CORPORATION
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(Registrant)
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By: /s/ Hiroki Totoki
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(Signature)
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Hiroki Totoki
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Executive Deputy President and
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Chief Financial Officer
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Date:July 29, 2022
List of materials
Documents attached hereto:
i) Press release: _______________________________________________________
Quarterly Financial Statements
for the First Quarter Ended June 30, 2022
And
Outlook for the Fiscal Year Ending March 31, 2023
July 29, 2022
Sony Group Corporation
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Quarterly Financial Statements (Unaudited)
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F-1
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Condensed Consolidated Statements of Financial Position
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F-1
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Condensed Consolidated Statements of Income (Three months ended June 30)
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F-3
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Condensed Consolidated Statements of Comprehensive Income (Three months ended June 30)
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F-4
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Condensed Consolidated Statements of Changes in Stockholders’ Equity (Three months ended June 30)
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F-5
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Condensed Consolidated Statements of Cash Flows (Three months ended June 30)
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F-6
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Notes to Condensed Consolidated Financial Statements
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F-8
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- Business Segment Information
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F-8
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- Going Concern Assumption
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F-14
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- Accounting Policy and Other Information
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F-14
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- Subsequent Event
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F-15
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Outlook for the Fiscal Year Ending March 31, 2023
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1
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Cautionary Statement
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4
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All financial information is presented on the basis of International Financial Reporting Standards (“IFRS”).
Sony Group Corporation and its consolidated subsidiaries are together referred to as “Sony” or “Sony Group”.
(Unaudited)
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Position
|
Yen in millions
|
||||||||||||
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March 31,
2022
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June 30,
2022
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Change from
March 31, 2022
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||||||||||
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ASSETS
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||||||||||||
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Current assets:
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||||||||||||
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Cash and cash equivalents
|
2,049,636
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1,371,867
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(677,769
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)
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||||||||
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Investments and advances in the Financial Services segment
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360,673
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332,422
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(28,251
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)
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||||||||
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Trade and other receivables, and contract assets
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1,628,521
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1,775,516
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146,995
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|||||||||
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Inventories
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874,007
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1,093,667
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219,660
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|||||||||
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Other financial assets
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149,301
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147,070
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(2,231
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)
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||||||||
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Other current assets
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473,070
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563,979
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90,909
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|||||||||
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Total current assets
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5,535,208
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5,284,521
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(250,687
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)
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||||||||
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Non-current assets:
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||||||||||||
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Investments accounted for using the equity method
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268,513
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281,927
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13,414
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|||||||||
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Investments and advances in the Financial Services segment
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18,445,088
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18,024,195
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(420,893
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)
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||||||||
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Property, plant and equipment
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1,113,213
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1,155,401
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42,188
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|||||||||
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Right-of-use assets
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413,430
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431,243
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17,813
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|||||||||
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Goodwill
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952,895
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1,074,013
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121,118
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|||||||||
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Content assets
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1,342,046
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1,461,238
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119,192
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|||||||||
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Other intangible assets
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450,103
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476,169
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26,066
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|||||||||
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Deferred insurance acquisition costs
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676,526
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688,780
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12,254
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|||||||||
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Deferred tax assets
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298,589
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321,064
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22,475
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|||||||||
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Other financial assets
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696,306
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883,179
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186,873
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|||||||||
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Other non-current assets
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289,050
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293,166
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4,116
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|||||||||
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Total non-current assets
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24,945,759
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25,090,375
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144,616
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|||||||||
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Total assets
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30,480,967
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30,374,896
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(106,071
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)
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||||||||
(Continued on the following page.)
F-1
Condensed Consolidated Statements of Financial Position (Continued)
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Yen in millions
|
||||||||||||
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March 31,
2022
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June 30,
2022
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Change from
March 31, 2022
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||||||||||
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LIABILITIES
|
||||||||||||
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Current liabilities:
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||||||||||||
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Short-term borrowings
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1,976,553
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1,917,701
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(58,852
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)
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||||||||
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Current portion of long-term debt
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171,409
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216,522
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45,113
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|||||||||
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Trade and other payables
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1,843,242
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1,961,784
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118,542
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|||||||||
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Deposits from customers in the banking business
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2,886,361
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2,955,103
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68,742
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|||||||||
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Income taxes payables
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106,092
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128,277
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22,185
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|||||||||
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Participation and residual liabilities in the Pictures segment
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190,162
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215,970
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25,808
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|||||||||
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Other financial liabilities
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97,843
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86,292
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(11,551
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)
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||||||||
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Other current liabilities
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1,488,488
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1,386,708
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(101,780
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)
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||||||||
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Total current liabilities
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8,760,150
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8,868,357
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108,207
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|||||||||
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Non-current liabilities:
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||||||||||||
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Long-term debt
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1,203,646
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1,198,083
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(5,563
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)
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||||||||
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Defined benefit liabilities
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254,548
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255,533
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985
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|||||||||
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Deferred tax liabilities
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696,492
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475,923
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(220,569
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)
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||||||||
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Future insurance policy benefits and other
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7,039,034
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7,200,722
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161,688
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|||||||||
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Policyholders’ account in the life insurance business
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4,791,295
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4,799,410
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8,115
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|||||||||
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Participation and residual liabilities in the Pictures segment
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220,113
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241,845
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21,732
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|||||||||
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Other financial liabilities
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211,959
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244,400
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32,441
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|||||||||
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Other non-current liabilities
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106,481
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118,395
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11,914
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|||||||||
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Total non-current liabilities
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14,523,568
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14,534,311
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10,743
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|||||||||
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Total liabilities
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23,283,718
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23,402,668
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118,950
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|||||||||
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EQUITY
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||||||||||||
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Sony Group Corporation’s stockholders’ equity:
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||||||||||||
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Common stock
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880,365
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880,365
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–
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|||||||||
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Additional paid-in capital
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1,461,053
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1,459,138
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(1,915
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)
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||||||||
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Retained earnings
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3,760,763
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3,934,581
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173,818
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|||||||||
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Accumulated other comprehensive income
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1,222,332
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831,906
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(390,426
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)
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||||||||
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Treasury stock, at cost
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(180,042
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)
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(188,127
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)
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(8,085
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)
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||||||
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Equity attributable to Sony Group Corporation’s stockholders
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7,144,471
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6,917,863
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(226,608
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)
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||||||||
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Noncontrolling interests
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52,778
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54,365
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1,587
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|||||||||
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Total equity
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7,197,249
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6,972,228
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(225,021
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)
|
||||||||
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Total liabilities and equity
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30,480,967
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30,374,896
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(106,071
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)
|
||||||||
F-2
Condensed Consolidated Statements of Income
|
Yen in millions
|
||||||||||||
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Three months ended June 30
|
||||||||||||
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2021
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2022
|
Change
|
||||||||||
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Sales and financial services revenue:
|
||||||||||||
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Sales
|
1,844,713
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2,016,037
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171,324
|
|||||||||
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Financial services revenue
|
412,130
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295,457
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(116,673
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)
|
||||||||
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Total sales and financial services revenue
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2,256,843
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2,311,494
|
54,651
|
|||||||||
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Costs and expenses:
|
||||||||||||
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Cost of sales
|
1,248,773
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1,391,667
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142,894
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|||||||||
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Selling, general and administrative
|
345,302
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406,766
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61,464
|
|||||||||
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Financial services expenses
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388,069
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214,100
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(173,969
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)
|
||||||||
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Other operating (income) expense, net
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(1,101
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)
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(2,725
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)
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(1,624
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)
|
||||||
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Total costs and expenses
|
1,981,043
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2,009,808
|
28,765
|
|||||||||
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Share of profit (loss) of investments accounted for using the equity method
|
4,268
|
5,277
|
1,009
|
|||||||||
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Operating income
|
280,068
|
306,963
|
26,895
|
|||||||||
|
Financial income
|
11,685
|
14,382
|
2,697
|
|||||||||
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Financial expenses
|
8,543
|
29,969
|
21,426
|
|||||||||
|
Income before income taxes
|
283,210
|
291,376
|
8,166
|
|||||||||
|
Income taxes
|
70,095
|
73,070
|
2,975
|
|||||||||
|
Net income
|
213,115
|
218,306
|
5,191
|
|||||||||
|
Net income attributable to
|
||||||||||||
|
Sony Group Corporation’s stockholders
|
211,829
|
218,196
|
6,367
|
|||||||||
|
Noncontrolling interests
|
1,286
|
110
|
(1,176
|
)
|
||||||||
|
Yen
|
||||||||||||
|
Three months ended June 30
|
||||||||||||
|
2021
|
2022
|
Change
|
||||||||||
|
Per share data:
|
||||||||||||
|
Net income attributable to Sony Group Corporation’s stockholders
|
||||||||||||
|
- Basic
|
170.95
|
176.46
|
5.51
|
|||||||||
|
- Diluted
|
169.22
|
175.21
|
5.99
|
|||||||||
F-3
Condensed Consolidated Statements of Comprehensive Income
|
Yen in millions
|
||||||||||||
|
Three months ended June 30
|
||||||||||||
|
2021
|
2022
|
Change
|
||||||||||
|
Net income
|
213,115
|
218,306
|
5,191
|
|||||||||
|
Other comprehensive income, net of tax -
|
||||||||||||
|
Items that will not be reclassified to profit or loss
|
||||||||||||
|
Changes in equity instruments measured at fair value through other comprehensive income
|
26,370
|
(2,118
|
)
|
(28,488
|
)
|
|||||||
|
Remeasurement of defined benefit pension plans
|
(1,697
|
)
|
116
|
1,813
|
||||||||
|
Share of other comprehensive income of investments accounted for using the equity method
|
(14
|
)
|
208
|
222
|
||||||||
|
Items that may be reclassified subsequently to profit or loss
|
||||||||||||
|
Changes in debt instruments measured at fair value through other comprehensive income
|
34,994
|
(634,493
|
)
|
(669,487
|
)
|
|||||||
|
Cash flow hedges
|
(198
|
)
|
(1,117
|
)
|
(919
|
)
|
||||||
|
Insurance contract valuation adjustments
|
285
|
521
|
236
|
|||||||||
|
Exchange differences on translating foreign operations
|
7,184
|
247,333
|
240,149
|
|||||||||
|
Share of other comprehensive income of investments accounted for using the equity method
|
(31
|
)
|
2,679
|
2,710
|
||||||||
|
Total other comprehensive income, net of tax
|
66,893
|
(386,871
|
)
|
(453,764
|
)
|
|||||||
|
Comprehensive income
|
280,008
|
(168,565
|
)
|
(448,573
|
)
|
|||||||
|
Comprehensive income attributable to
|
||||||||||||
|
Sony Group Corporation’s stockholders
|
278,349
|
(172,114
|
)
|
(450,463
|
)
|
|||||||
|
Noncontrolling interests
|
1,659
|
3,549
|
1,890
|
|||||||||
F-4
Condensed Consolidated Statements of Changes in Stockholders’ Equity
|
Yen in millions
|
||||||||||||||||||||||||||||||||
|
Common
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Accumulated
other
comprehensive
income
|
Treasury
stock, at
cost
|
Sony Group
Corporation’s
stockholders’
equity
|
Noncontrolling
interests
|
Total equity
|
|||||||||||||||||||||||||
|
Balance at April 1, 2021
|
880,214
|
1,489,597
|
2,914,503
|
1,520,257
|
(124,228
|
)
|
6,680,343
|
43,996
|
6,724,339
|
|||||||||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||||||||||||||
|
Net income
|
211,829
|
211,829
|
1,286
|
213,115
|
||||||||||||||||||||||||||||
|
Other comprehensive income, net of tax
|
66,520
|
66,520
|
373
|
66,893
|
||||||||||||||||||||||||||||
|
Total comprehensive income
|
211,829
|
66,520
|
278,349
|
1,659
|
280,008
|
|||||||||||||||||||||||||||
|
Transfer to retained earnings
|
(1,698
|
)
|
1,698
|
–
|
–
|
|||||||||||||||||||||||||||
|
Transactions with stockholders and other:
|
||||||||||||||||||||||||||||||||
|
Exercise of stock acquisition rights
|
(1
|
)
|
(70
|
)
|
1,450
|
1,379
|
1,379
|
|||||||||||||||||||||||||
|
Conversion of convertible bonds
|
(109
|
)
|
(293
|
)
|
2,626
|
2,224
|
2,224
|
|||||||||||||||||||||||||
|
Stock-based compensation
|
1,447
|
1,447
|
1,447
|
|||||||||||||||||||||||||||||
|
Dividends declared
|
(37,177
|
)
|
(37,177
|
)
|
(2,029
|
)
|
(39,206
|
)
|
||||||||||||||||||||||||
|
Purchase of treasury stock
|
(7,548
|
)
|
(7,548
|
)
|
(7,548
|
)
|
||||||||||||||||||||||||||
|
Reissuance of treasury stock
|
1
|
1
|
2
|
2
|
||||||||||||||||||||||||||||
|
Transactions with noncontrolling interests shareholders and other
|
(15,823
|
)
|
(15,823
|
)
|
2,188
|
(13,635
|
)
|
|||||||||||||||||||||||||
|
Balance at June 30, 2021
|
880,214
|
1,475,112
|
3,087,094
|
1,588,475
|
(127,699
|
)
|
6,903,196
|
45,814
|
6,949,010
|
|||||||||||||||||||||||
|
Yen in millions
|
||||||||||||||||||||||||||||||||
|
Common
stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Accumulated
other
comprehensive
income
|
Treasury
stock, at
cost
|
Sony Group
Corporation’s
stockholders’
equity
|
Noncontrolling
interests
|
Total equity
|
|||||||||||||||||||||||||
|
Balance at April 1, 2022
|
880,365
|
1,461,053
|
3,760,763
|
1,222,332
|
(180,042
|
)
|
7,144,471
|
52,778
|
7,197,249
|
|||||||||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||||||||||||||
|
Net income
|
218,196
|
218,196
|
110
|
218,306
|
||||||||||||||||||||||||||||
|
Other comprehensive income, net of tax
|
(390,310
|
)
|
(390,310
|
)
|
3,439
|
(386,871
|
)
|
|||||||||||||||||||||||||
|
Total comprehensive income
|
218,196
|
(390,310
|
)
|
(172,114
|
)
|
3,549
|
(168,565
|
)
|
||||||||||||||||||||||||
|
Transfer to retained earnings
|
116
|
(116
|
)
|
–
|
–
|
|||||||||||||||||||||||||||
|
Transactions with stockholders and other:
|
||||||||||||||||||||||||||||||||
|
Exercise of stock acquisition rights
|
(1
|
)
|
(8
|
)
|
943
|
934
|
934
|
|||||||||||||||||||||||||
|
Conversion of convertible bonds
|
(125
|
)
|
(1,191
|
)
|
3,775
|
2,459
|
2,459
|
|||||||||||||||||||||||||
|
Stock-based compensation
|
2,493
|
2,493
|
2,493
|
|||||||||||||||||||||||||||||
|
Dividends declared
|
(43,295
|
)
|
(43,295
|
)
|
(4,219
|
)
|
(47,514
|
)
|
||||||||||||||||||||||||
|
Purchase of treasury stock
|
(12,805
|
)
|
(12,805
|
)
|
(12,805
|
)
|
||||||||||||||||||||||||||
|
Reissuance of treasury stock
|
1
|
2
|
3
|
3
|
||||||||||||||||||||||||||||
|
Transactions with noncontrolling interests shareholders and other
|
(4,283
|
)
|
(4,283
|
)
|
2,257
|
(2,026
|
)
|
|||||||||||||||||||||||||
|
Balance at June 30, 2022
|
880,365
|
1,459,138
|
3,934,581
|
831,906
|
(188,127
|
)
|
6,917,863
|
54,365
|
6,972,228
|
|||||||||||||||||||||||
F-5
Condensed Consolidated Statements of Cash Flows
|
Yen in millions
|
||||||||
|
Three months ended June 30
|
||||||||
|
2021
|
2022
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Income before income taxes
|
283,210
|
291,376
|
||||||
|
Adjustments to reconcile income before income taxes to net cash provided by (used in) operating activities:
|
||||||||
|
Depreciation and amortization, including amortization of contract costs
|
177,922
|
245,471
|
||||||
|
Amortization of deferred insurance acquisition costs
|
15,042
|
26,826
|
||||||
|
Other operating (income) expense, net
|
(1,101
|
)
|
(2,725
|
)
|
||||
|
(Gain) loss on securities, net (other than Financial Services segment)
|
(742
|
)
|
21,197
|
|||||
|
Share of (profit) loss of investments accounted for using the equity method, net of dividends
|
2,250
|
(145
|
)
|
|||||
|
Change in future insurance policy benefits and other
|
95,162
|
167,968
|
||||||
|
Change in policyholders’ account in the life insurance business, less cash impact
|
104,840
|
(63,509
|
)
|
|||||
|
Net cash impact of policyholders’ account in the life insurance business
|
35,427
|
71,406
|
||||||
|
Changes in assets and liabilities:
|
||||||||
|
Increase in trade receivables and contract assets
|
(74,204
|
)
|
(37,200
|
)
|
||||
|
Increase in inventories
|
(120,542
|
)
|
(176,257
|
)
|
||||
|
Increase in investments and advances in the Financial Services segment
|
(317,798
|
)
|
(439,608
|
)
|
||||
|
Increase in content assets
|
(132,147
|
)
|
(110,459
|
)
|
||||
|
Increase in deferred insurance acquisition costs
|
(26,203
|
)
|
(36,652
|
)
|
||||
|
Increase in trade payables
|
55,195
|
3,467
|
||||||
|
Increase in deposits from customers in the banking business
|
38,039
|
83,965
|
||||||
|
Increase (decrease) in borrowings in the life insurance business and the banking business
|
241,847
|
(102,932
|
)
|
|||||
|
Decrease in other financial assets and other current assets
|
8,252
|
1,748
|
||||||
|
Decrease in other financial liabilities and other current liabilities
|
(134,060
|
)
|
(173,117
|
)
|
||||
|
Income taxes paid
|
(65,753
|
)
|
(65,398
|
)
|
||||
|
Other
|
14,098
|
(135,440
|
)
|
|||||
|
Net cash provided by (used in) operating activities
|
198,734
|
(430,018
|
)
|
|||||
(Continued on the following page.)
F-6
Condensed Consolidated Statements of Cash Flows (Continued)
|
Yen in millions
|
||||||||
|
Three months ended June 30
|
||||||||
|
2021
|
2022
|
|||||||
|
Cash flows from investing activities:
|
||||||||
|
Payments for property, plant and equipment and other intangible assets
|
(93,521
|
)
|
(106,968
|
)
|
||||
|
Proceeds from sales of property, plant and equipment and other intangible assets
|
1,356
|
2,372
|
||||||
|
Payments for investments and advances (other than Financial Services segment)
|
(32,045
|
)
|
(146,838
|
)
|
||||
|
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
|
9,328
|
3,645
|
||||||
|
Payments for purchases of businesses
|
(76,155
|
)
|
(44,605
|
)
|
||||
|
Proceeds from sales of businesses
|
6,012
|
–
|
||||||
|
Other
|
(6,212
|
)
|
(22,663
|
)
|
||||
|
Net cash used in investing activities
|
(191,237
|
)
|
(315,057
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Increase (decrease) in short-term borrowings, net
|
(4,415
|
)
|
48,013
|
|||||
|
Proceeds from issuance of long-term debt
|
6,102
|
5,955
|
||||||
|
Payments of long-term debt
|
(23,703
|
)
|
(25,382
|
)
|
||||
|
Dividends paid
|
(36,849
|
)
|
(42,932
|
)
|
||||
|
Payments for purchases of treasury stock
|
(7,548
|
)
|
(12,805
|
)
|
||||
|
Other
|
(1,029
|
)
|
(2,826
|
)
|
||||
|
Net cash used in financing activities
|
(67,442
|
)
|
(29,977
|
)
|
||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(1,819
|
)
|
97,283
|
|||||
|
Net decrease in cash and cash equivalents
|
(61,764
|
)
|
(677,769
|
)
|
||||
|
Cash and cash equivalents at beginning of the fiscal year
|
1,786,982
|
2,049,636
|
||||||
|
Cash and cash equivalents at end of the period
|
1,725,218
|
1,371,867
|
||||||
F-7
Notes to Condensed Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue
|
Yen in millions
|
||||||||||||
|
Three months ended June 30
|
||||||||||||
|
2021
|
2022
|
Change
|
||||||||||
|
Sales and financial services revenue:
|
||||||||||||
|
Game & Network Services -
|
||||||||||||
|
Customers
|
602,158
|
588,461
|
(13,697
|
)
|
||||||||
|
Intersegment
|
13,652
|
15,655
|
2,003
|
|||||||||
|
Total
|
615,810
|
604,116
|
(11,694
|
)
|
||||||||
|
Music -
|
||||||||||||
|
Customers
|
252,222
|
305,353
|
53,131
|
|||||||||
|
Intersegment
|
2,651
|
2,717
|
66
|
|||||||||
|
Total
|
254,873
|
308,070
|
53,197
|
|||||||||
|
Pictures -
|
||||||||||||
|
Customers
|
204,378
|
341,247
|
136,869
|
|||||||||
|
Intersegment
|
358
|
130
|
(228
|
)
|
||||||||
|
Total
|
204,736
|
341,377
|
136,641
|
|||||||||
|
Entertainment, Technology & Services -
|
||||||||||||
|
Customers
|
566,519
|
543,906
|
(22,613
|
)
|
||||||||
|
Intersegment
|
9,749
|
8,404
|
(1,345
|
)
|
||||||||
|
Total
|
576,268
|
552,310
|
(23,958
|
)
|
||||||||
|
Imaging & Sensing Solutions -
|
||||||||||||
|
Customers
|
197,885
|
219,223
|
21,338
|
|||||||||
|
Intersegment
|
20,172
|
18,619
|
(1,553
|
)
|
||||||||
|
Total
|
218,057
|
237,842
|
19,785
|
|||||||||
|
Financial Services -
|
||||||||||||
|
Customers
|
412,130
|
295,457
|
(116,673
|
)
|
||||||||
|
Intersegment
|
2,255
|
2,299
|
44
|
|||||||||
|
Total
|
414,385
|
297,756
|
(116,629
|
)
|
||||||||
|
All Other -
|
||||||||||||
|
Customers
|
18,217
|
15,557
|
(2,660
|
)
|
||||||||
|
Intersegment
|
3,769
|
3,777
|
8
|
|||||||||
|
Total
|
21,986
|
19,334
|
(2,652
|
)
|
||||||||
|
Corporate and elimination
|
(49,272
|
)
|
(49,311
|
)
|
(39
|
)
|
||||||
|
Consolidated total
|
2,256,843
|
2,311,494
|
54,651
|
|||||||||
Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with the Entertainment, Technology & Services (“ET&S”)
segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. Imaging & Sensing Solutions (“I&SS”) intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S
segment. Corporate and elimination includes certain brand and patent royalty income.
F-8
Segment profit (loss)
|
Yen in millions
|
||||||||||||
|
Three months ended June 30
|
||||||||||||
|
2021
|
2022
|
Change
|
||||||||||
|
Operating income (loss):
|
||||||||||||
|
Game & Network Services
|
83,259
|
52,762
|
(30,497
|
)
|
||||||||
|
Music
|
55,380
|
60,973
|
5,593
|
|||||||||
|
Pictures
|
25,354
|
50,655
|
25,301
|
|||||||||
|
Entertainment, Technology & Services
|
71,751
|
53,568
|
(18,183
|
)
|
||||||||
|
Imaging & Sensing Solutions
|
30,479
|
21,689
|
(8,790
|
)
|
||||||||
|
Financial Services
|
24,013
|
81,306
|
57,293
|
|||||||||
|
All Other
|
4,154
|
2,865
|
(1,289
|
)
|
||||||||
|
Total
|
294,390
|
323,818
|
29,428
|
|||||||||
|
Corporate and elimination
|
(14,322
|
)
|
(16,855
|
)
|
(2,533
|
)
|
||||||
|
Consolidated operating income
|
280,068
|
306,963
|
26,895
|
|||||||||
Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.
The former Electronics Products & Solutions (“EP&S”) segment has been renamed the ET&S segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.
F-9
(Sales to Customers by Product Category)
The following table is a breakdown of sales and financial services revenue to external customers by product category for each segment. Sony management views each segment as a single operating segment.
|
Yen in millions
|
||||||||||||
|
Three months ended June 30
|
||||||||||||
|
Sales and financial services revenue:
|
2021
|
2022
|
Change
|
|||||||||
|
Game & Network Services
|
||||||||||||
|
Digital Software and Add-on Content
|
320,436
|
285,845
|
(34,591
|
)
|
||||||||
|
Network Services
|
101,986
|
106,523
|
4,537
|
|||||||||
|
Hardware and Others
|
179,736
|
196,093
|
16,357
|
|||||||||
|
Total
|
602,158
|
588,461
|
(13,697
|
)
|
||||||||
|
Music
|
||||||||||||
|
Recorded Music - Streaming
|
109,109
|
139,111
|
30,002
|
|||||||||
|
Recorded Music - Others
|
42,780
|
60,456
|
17,676
|
|||||||||
|
Music Publishing
|
47,132
|
63,057
|
15,925
|
|||||||||
|
Visual Media and Platform
|
53,201
|
42,729
|
(10,472
|
)
|
||||||||
|
Total
|
252,222
|
305,353
|
53,131
|
|||||||||
|
Pictures
|
||||||||||||
|
Motion Pictures
|
79,503
|
123,125
|
43,622
|
|||||||||
|
Television Productions
|
61,288
|
139,161
|
77,873
|
|||||||||
|
Media Networks
|
63,587
|
78,961
|
15,374
|
|||||||||
|
Total
|
204,378
|
341,247
|
136,869
|
|||||||||
|
Entertainment, Technology & Services
|
||||||||||||
|
Televisions
|
221,021
|
141,793
|
(79,228
|
)
|
||||||||
|
Audio and Video
|
73,089
|
91,060
|
17,971
|
|||||||||
|
Still and Video Cameras
|
116,410
|
139,703
|
23,293
|
|||||||||
|
Mobile Communications
|
81,413
|
99,030
|
17,617
|
|||||||||
|
Other
|
74,586
|
72,320
|
(2,266
|
)
|
||||||||
|
Total
|
566,519
|
543,906
|
(22,613
|
)
|
||||||||
|
Imaging & Sensing Solutions
|
197,885
|
219,223
|
21,338
|
|||||||||
|
Financial Services
|
412,130
|
295,457
|
(116,673
|
)
|
||||||||
|
All Other
|
18,217
|
15,557
|
(2,660
|
)
|
||||||||
|
Corporate
|
3,334
|
2,290
|
(1,044
|
)
|
||||||||
|
Consolidated total
|
2,256,843
|
2,311,494
|
54,651
|
|||||||||
In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through the network by Sony Interactive
Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software, peripheral devices and first-party software for third-party platforms.
In the Music segment, Recorded Music - Streaming includes the distribution of digital recorded music by streaming; Recorded Music - Others includes the distribution of recorded music by physical media and digital download as well as revenue
derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes the production and distribution of animation titles and game applications, and
various service offerings for music and visual products. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of live-action and animated motion pictures; Television Productions includes
the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. In the ET&S segment, Televisions includes LCD and OLED televisions; Audio and
Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video
cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.
F-10
(Condensed Financial Services Financial Statements)
The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not in accordance with
IFRS, which is used by Sony to prepare its condensed consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be
useful in understanding and analyzing Sony’s condensed consolidated financial statements. Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment. The figures
shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of
each. The condensed consolidated financial statements column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.
Condensed Statements of Financial Position
|
Yen in millions
|
||||||||||||||||||||||||
|
Financial Services
|
Sony without
Financial Services
|
Consolidated
|
||||||||||||||||||||||
|
March 31,
2022
|
June 30,
2022
|
March 31,
2022
|
June 30,
2022
|
March 31,
2022
|
June 30,
2022
|
|||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||||
|
Current assets:
|
||||||||||||||||||||||||
|
Cash and cash equivalents
|
¥
|
889,140
|
¥
|
616,767
|
¥
|
1,160,496
|
¥
|
755,100
|
¥
|
2,049,636
|
¥
|
1,371,867
|
||||||||||||
|
Investments and advances in the Financial Services segment
|
360,673
|
332,422
|
–
|
–
|
360,673
|
332,422
|
||||||||||||||||||
|
Trade and other receivables, and contract assets
|
169,929
|
177,112
|
1,478,620
|
1,622,041
|
1,628,521
|
1,775,516
|
||||||||||||||||||
|
Inventories
|
–
|
–
|
874,007
|
1,093,667
|
874,007
|
1,093,667
|
||||||||||||||||||
|
Other financial assets
|
81,174
|
51,413
|
68,124
|
95,647
|
149,301
|
147,070
|
||||||||||||||||||
|
Other current assets
|
72,441
|
68,805
|
450,953
|
561,746
|
473,070
|
563,979
|
||||||||||||||||||
|
Total current assets
|
1,573,357
|
1,246,519
|
4,032,200
|
4,128,201
|
5,535,208
|
5,284,521
|
||||||||||||||||||
|
Non-current assets:
|
||||||||||||||||||||||||
|
Investments accounted for using the equity method
|
–
|
–
|
268,513
|
281,927
|
268,513
|
281,927
|
||||||||||||||||||
|
Investments and advances in the Financial Services segment
|
18,445,088
|
18,024,195
|
–
|
–
|
18,445,088
|
18,024,195
|
||||||||||||||||||
|
Investments in Financial Services, at cost
|
–
|
–
|
550,483
|
550,483
|
–
|
–
|
||||||||||||||||||
|
Property, plant and equipment
|
18,010
|
16,187
|
1,095,241
|
1,138,886
|
1,113,213
|
1,155,401
|
||||||||||||||||||
|
Right-of-use assets
|
73,774
|
79,001
|
339,658
|
352,630
|
413,430
|
431,243
|
||||||||||||||||||
|
Goodwill and intangible assets, including content assets
|
72,578
|
71,609
|
2,672,466
|
2,939,811
|
2,745,044
|
3,011,420
|
||||||||||||||||||
|
Deferred insurance acquisition costs
|
676,526
|
688,780
|
–
|
–
|
676,526
|
688,780
|
||||||||||||||||||
|
Deferred tax assets
|
–
|
–
|
332,330
|
337,855
|
298,589
|
321,064
|
||||||||||||||||||
|
Other financial assets
|
37,037
|
48,277
|
663,233
|
838,997
|
696,306
|
883,179
|
||||||||||||||||||
|
Other non-current assets
|
77,657
|
76,464
|
284,834
|
289,067
|
289,050
|
293,166
|
||||||||||||||||||
|
Total non-current assets
|
19,400,670
|
19,004,513
|
6,206,758
|
6,729,656
|
24,945,759
|
25,090,375
|
||||||||||||||||||
|
Total assets
|
¥
|
20,974,027
|
¥
|
20,251,032
|
¥
|
10,238,958
|
¥
|
10,857,857
|
¥
|
30,480,967
|
¥
|
30,374,896
|
||||||||||||
|
LIABILITIES AND EQUITY
|
||||||||||||||||||||||||
|
Current liabilities:
|
||||||||||||||||||||||||
|
Short-term borrowings
|
¥
|
1,964,776
|
¥
|
1,900,698
|
¥
|
183,187
|
¥
|
233,525
|
¥
|
2,147,962
|
¥
|
2,134,223
|
||||||||||||
|
Trade and other payables
|
118,921
|
98,623
|
1,744,011
|
1,886,390
|
1,843,242
|
1,961,784
|
||||||||||||||||||
|
Deposits from customers in the banking business
|
2,886,361
|
2,955,103
|
-
|
-
|
2,886,361
|
2,955,103
|
||||||||||||||||||
|
Income taxes payables
|
4,444
|
3,508
|
101,648
|
124,769
|
106,092
|
128,277
|
||||||||||||||||||
|
Participation and residual liabilities in the Pictures segment
|
–
|
–
|
190,162
|
215,970
|
190,162
|
215,970
|
||||||||||||||||||
|
Other financial liabilities
|
68,793
|
46,633
|
29,050
|
39,659
|
97,843
|
86,292
|
||||||||||||||||||
|
Other current liabilities
|
242,937
|
268,749
|
1,296,205
|
1,184,010
|
1,488,488
|
1,386,708
|
||||||||||||||||||
|
Total current liabilities
|
5,286,232
|
5,273,314
|
3,544,263
|
3,684,323
|
8,760,150
|
8,868,357
|
||||||||||||||||||
|
Non-current liabilities:
|
||||||||||||||||||||||||
|
Long-term debt
|
470,498
|
435,219
|
733,148
|
762,864
|
1,203,646
|
1,198,083
|
||||||||||||||||||
|
Defined benefit liabilities
|
37,167
|
37,493
|
217,381
|
218,040
|
254,548
|
255,533
|
||||||||||||||||||
|
Deferred tax liabilities
|
634,576
|
391,987
|
110,715
|
115,756
|
696,492
|
475,923
|
||||||||||||||||||
|
Future insurance policy benefits and other
|
7,039,034
|
7,200,722
|
–
|
–
|
7,039,034
|
7,200,722
|
||||||||||||||||||
|
Policyholders’ account in the life insurance business
|
4,791,295
|
4,799,410
|
–
|
–
|
4,791,295
|
4,799,410
|
||||||||||||||||||
|
Participation and residual liabilities in the Pictures segment
|
–
|
–
|
220,113
|
241,845
|
220,113
|
241,845
|
||||||||||||||||||
|
Other financial liabilities
|
128,208
|
142,656
|
86,391
|
104,465
|
211,959
|
244,400
|
||||||||||||||||||
|
Other non-current liabilities
|
5,864
|
6,434
|
121,558
|
132,809
|
106,481
|
118,395
|
||||||||||||||||||
|
Total non-current liabilities
|
13,106,642
|
13,013,921
|
1,489,306
|
1,575,779
|
14,523,568
|
14,534,311
|
||||||||||||||||||
|
Total liabilities
|
18,392,874
|
18,287,235
|
5,033,569
|
5,260,102
|
23,283,718
|
23,402,668
|
||||||||||||||||||
|
Equity:
|
||||||||||||||||||||||||
|
Stockholders’ equity of Financial Services
|
2,577,705
|
1,960,242
|
–
|
–
|
–
|
–
|
||||||||||||||||||
|
Stockholders’ equity of Sony without Financial Services
|
–
|
–
|
5,156,059
|
5,546,945
|
–
|
–
|
||||||||||||||||||
|
Sony Group Corporation’s stockholders’ equity
|
–
|
–
|
–
|
–
|
7,144,471
|
6,917,863
|
||||||||||||||||||
|
Noncontrolling interests
|
3,448
|
3,555
|
49,330
|
50,810
|
52,778
|
54,365
|
||||||||||||||||||
|
Total equity
|
2,581,153
|
1,963,797
|
5,205,389
|
5,597,755
|
7,197,249
|
6,972,228
|
||||||||||||||||||
|
Total liabilities and equity
|
¥
|
20,974,027
|
¥
|
20,251,032
|
¥
|
10,238,958
|
¥
|
10,857,857
|
¥
|
30,480,967
|
¥
|
30,374,896
|
||||||||||||
F-11
Condensed Statements of Income
|
Yen in millions
|
||||||||||||||||||||||||
|
Three months ended June 30
|
||||||||||||||||||||||||
|
Financial Services
|
Sony without
Financial Services
|
Consolidated
|
||||||||||||||||||||||
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
|||||||||||||||||||
|
Sales
|
¥
|
–
|
¥
|
–
|
¥
|
1,845,785
|
¥
|
2,017,583
|
¥
|
1,844,713
|
¥
|
2,016,037
|
||||||||||||
|
Financial services revenue
|
414,385
|
297,756
|
–
|
–
|
412,130
|
295,457
|
||||||||||||||||||
|
Total sales and financial services revenue
|
414,385
|
297,756
|
1,845,785
|
2,017,583
|
2,256,843
|
2,311,494
|
||||||||||||||||||
|
Cost of sales
|
–
|
–
|
1,251,199
|
1,394,565
|
1,248,773
|
1,391,667
|
||||||||||||||||||
|
Selling, general and administrative
|
–
|
–
|
343,948
|
405,410
|
345,302
|
406,766
|
||||||||||||||||||
|
Financial services expenses
|
390,324
|
216,399
|
–
|
–
|
388,069
|
214,100
|
||||||||||||||||||
|
Other operating (income) expense, net
|
48
|
51
|
(1,149
|
)
|
(2,776
|
)
|
(1,101
|
)
|
(2,725
|
)
|
||||||||||||||
|
Total costs and expenses
|
390,372
|
216,450
|
1,593,998
|
1,797,199
|
1,981,043
|
2,009,808
|
||||||||||||||||||
|
Share of profit (loss) of investments accounted for using the equity method
|
–
|
–
|
4,268
|
5,277
|
4,268
|
5,277
|
||||||||||||||||||
|
Operating income
|
24,013
|
81,306
|
256,055
|
225,661
|
280,068
|
306,963
|
||||||||||||||||||
|
Financial income (expenses), net
|
–
|
–
|
42,300
|
25,747
|
3,142
|
(15,587
|
)
|
|||||||||||||||||
|
Income before income taxes
|
24,013
|
81,306
|
298,355
|
251,408
|
283,210
|
291,376
|
||||||||||||||||||
|
Income taxes
|
3,740
|
22,985
|
66,354
|
50,057
|
70,095
|
73,070
|
||||||||||||||||||
|
Net income
|
20,273
|
58,321
|
232,001
|
201,351
|
213,115
|
218,306
|
||||||||||||||||||
|
Net income of Financial Services
|
¥
|
20,152
|
¥
|
58,214
|
¥
|
–
|
¥
|
–
|
¥
|
–
|
¥
|
–
|
||||||||||||
|
Net income of Sony without Financial Services
|
¥
|
–
|
¥
|
–
|
¥
|
230,836
|
¥
|
201,348
|
¥
|
–
|
¥
|
–
|
||||||||||||
|
Net income attributable to Sony Group Corporation’s stockholders
|
¥
|
–
|
¥
|
–
|
¥
|
–
|
¥
|
–
|
¥
|
211,829
|
¥
|
218,196
|
||||||||||||
|
Net income attributable to noncontrolling interests
|
¥
|
121
|
¥
|
107
|
¥
|
1,165
|
¥
|
3
|
¥
|
1,286
|
¥
|
110
|
||||||||||||
F-12
Condensed Statements of Cash Flows
|
Yen in millions
|
||||||||||||||||||||||||
|
Three months ended June 30
|
||||||||||||||||||||||||
|
Financial Services
|
Sony without
Financial Services
|
Consolidated
|
||||||||||||||||||||||
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
|||||||||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||||||||||
|
Income (loss) before income taxes
|
¥
|
24,013
|
¥
|
81,306
|
¥
|
298,355
|
¥
|
251,408
|
¥
|
283,210
|
¥
|
291,376
|
||||||||||||
|
Adjustments to reconcile income (loss) before income taxes to net cash provided by (used in) operating activities:
|
||||||||||||||||||||||||
|
Depreciation and amortization, including amortization of contract costs
|
6,243
|
6,377
|
171,679
|
239,094
|
177,922
|
245,471
|
||||||||||||||||||
|
Amortization of deferred insurance acquisition costs
|
15,042
|
26,826
|
–
|
–
|
15,042
|
26,826
|
||||||||||||||||||
|
Other operating (income) expense, net
|
48
|
51
|
(1,149
|
)
|
(2,776
|
)
|
(1,101
|
)
|
(2,725
|
)
|
||||||||||||||
|
(Gain) loss on securities, net (other than Financial Services segment)
|
–
|
–
|
(742
|
)
|
21,197
|
(742
|
)
|
21,197
|
||||||||||||||||
|
Change in future insurance policy benefits and other
|
95,162
|
167,968
|
–
|
–
|
95,162
|
167,968
|
||||||||||||||||||
|
Change in policyholders’ account in the life insurance business, less cash impact
|
104,840
|
(63,509
|
)
|
–
|
–
|
104,840
|
(63,509
|
)
|
||||||||||||||||
|
Net cash impact of policyholders’ account in the life insurance business
|
35,427
|
71,406
|
–
|
–
|
35,427
|
71,406
|
||||||||||||||||||
|
Changes in assets and liabilities:
|
||||||||||||||||||||||||
|
(Increase) decrease in trade receivables and contract assets
|
(11,256
|
)
|
(7,183
|
)
|
(60,778
|
)
|
(33,625
|
)
|
(74,204
|
)
|
(37,200
|
)
|
||||||||||||
|
(Increase) decrease in inventories
|
–
|
–
|
(120,542
|
)
|
(176,257
|
)
|
(120,542
|
)
|
(176,257
|
)
|
||||||||||||||
|
(Increase) decrease in investments and advances in the Financial Services segment
|
(317,798
|
)
|
(439,608
|
)
|
–
|
–
|
(317,798
|
)
|
(439,608
|
)
|
||||||||||||||
|
(Increase) decrease in content assets
|
–
|
–
|
(132,147
|
)
|
(110,459
|
)
|
(132,147
|
)
|
(110,459
|
)
|
||||||||||||||
|
(Increase) decrease in deferred insurance acquisition costs
|
(26,203
|
)
|
(36,652
|
)
|
–
|
–
|
(26,203
|
)
|
(36,652
|
)
|
||||||||||||||
|
Increase (decrease) in trade payables
|
(27,252
|
)
|
(16,047
|
)
|
80,632
|
22,993
|
55,195
|
3,467
|
||||||||||||||||
|
Increase (decrease) in deposits from customers in the banking business
|
38,039
|
83,965
|
–
|
–
|
38,039
|
83,965
|
||||||||||||||||||
|
Increase (decrease) in borrowings in the life insurance business and the banking business
|
241,847
|
(102,932
|
)
|
–
|
–
|
241,847
|
(102,932
|
)
|
||||||||||||||||
|
Other
|
33,734
|
6,873
|
(209,134
|
)
|
(379,017
|
)
|
(175,213
|
)
|
(372,352
|
)
|
||||||||||||||
|
Net cash provided by (used in) operating activities
|
211,886
|
(221,159
|
)
|
26,174
|
(167,442
|
)
|
198,734
|
(430,018
|
)
|
|||||||||||||||
|
Cash flows from investing activities:
|
||||||||||||||||||||||||
|
Payments for property, plant and equipment and other intangible assets
|
(5,580
|
)
|
(7,121
|
)
|
(87,941
|
)
|
(99,929
|
)
|
(93,521
|
)
|
(106,968
|
)
|
||||||||||||
|
Payments for investments and advances (other than Financial Services segment)
|
–
|
–
|
(32,045
|
)
|
(146,838
|
)
|
(32,045
|
)
|
(146,838
|
)
|
||||||||||||||
|
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
|
–
|
–
|
9,328
|
3,645
|
9,328
|
3,645
|
||||||||||||||||||
|
Other
|
–
|
–
|
(74,999
|
)
|
(64,896
|
)
|
(74,999
|
)
|
(64,896
|
)
|
||||||||||||||
|
Net cash provided by (used in) investing activities
|
(5,580
|
)
|
(7,121
|
)
|
(185,657
|
)
|
(308,018
|
)
|
(191,237
|
)
|
(315,057
|
)
|
||||||||||||
|
Cash flows from financing activities:
|
||||||||||||||||||||||||
|
Increase (decrease) in borrowings, net
|
(2,605
|
)
|
(2,757
|
)
|
(19,412
|
)
|
31,343
|
(22,016
|
)
|
28,586
|
||||||||||||||
|
Dividends paid
|
(39,159
|
)
|
(41,335
|
)
|
(36,849
|
)
|
(42,932
|
)
|
(36,849
|
)
|
(42,932
|
)
|
||||||||||||
|
Other
|
(170
|
)
|
(1
|
)
|
(8,573
|
)
|
(15,630
|
)
|
(8,577
|
)
|
(15,631
|
)
|
||||||||||||
|
Net cash provided by (used in) financing activities
|
(41,934
|
)
|
(44,093
|
)
|
(64,834
|
)
|
(27,219
|
)
|
(67,442
|
)
|
(29,977
|
)
|
||||||||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
–
|
–
|
(1,819
|
)
|
97,283
|
(1,819
|
)
|
97,283
|
||||||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
164,372
|
(272,373
|
)
|
(226,136
|
)
|
(405,396
|
)
|
(61,764
|
)
|
(677,769
|
)
|
|||||||||||||
|
Cash and cash equivalents at beginning of the fiscal year
|
497,218
|
889,140
|
1,289,764
|
1,160,496
|
1,786,982
|
2,049,636
|
||||||||||||||||||
|
Cash and cash equivalents at end of the period
|
¥
|
661,590
|
¥
|
616,767
|
¥
|
1,063,628
|
¥
|
755,100
|
¥
|
1,725,218
|
¥
|
1,371,867
|
||||||||||||
F-13
Going Concern Assumption
Not Applicable
Accounting Policy and Other Information
(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 June 30
|
||||||||
|
2021
|
2022
|
|||||||
|
Net income attributable to Sony Group Corporation’s stockholders
|
211,829
|
218,196
|
||||||
|
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
|
||||||||
|
Zero coupon convertible bonds
|
51
|
31
|
||||||
|
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
|
211,880
|
218,227
|
||||||
|
Thousands of shares
|
||||||||
|
Weighted-average shares outstanding for basic EPS computation
|
1,239,162
|
1,236,489
|
||||||
|
Effect of dilutive securities:
|
||||||||
|
Stock acquisition rights
|
4,914
|
4,005
|
||||||
|
Zero coupon convertible bonds
|
8,046
|
4,992
|
||||||
|
Weighted-average shares for diluted EPS computation
|
1,252,122
|
1,245,486
|
||||||
(Segmentation)
The former EP&S segment has been renamed the ET&S segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.
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 three months ended June 30, 2021 have been made to conform to the presentation for the three months ended June 30, 2022.
F-14
Subsequent Event
Acquisition of Bungie, Inc.
On July 15, 2022, Sony Interactive Entertainment LLC, a wholly-owned subsidiary of Sony, completed the acquisition of 100%
of the shares of Bungie, Inc. (“Bungie”), an independent videogame developer in the United States. As a result of this acquisition, Bungie has become a wholly-owned subsidiary of Sony.
The total consideration of this transaction, which was determined after customary working capital and other adjustments, was approximately 514 billion yen (approximately 3.7 billion U.S.
dollars), inclusive of the purchase price and committed employee incentives.
Due to the limited time since the acquisition closing date, past restrictions on access to Bungie’s information arising from antitrust
considerations and the size and complexity of the transaction, the initial accounting for the business combination was not yet completed at the time the condensed consolidated financial statements were authorized. Therefore, we have not
disclosed detailed information regarding the accounting treatment of the business combination.
F-15
Outlook for the Fiscal Year Ending March 31, 2023
The forecast for consolidated results for the fiscal year ending March 31, 2023, as announced on May 10, 2022, has been revised as follows:
|
(Billions of yen)
|
|||||||||||||||||
|
March 31, 2022
Results
|
May
Forecast
|
July
Forecast
|
Change from
May Forecast
|
||||||||||||||
|
Sales *1
|
¥
|
9,921.5
|
¥
|
11,400
|
¥
|
11,500
|
+ ¥100 bil
|
+ 0.9
|
%
|
||||||||
|
Operating income
|
1,202.3
|
1,160
|
1,110
|
- 50 bil
|
- 4.3
|
%
|
|||||||||||
|
Income before income taxes
|
1,117.5
|
1,130
|
1,070
|
- 60 bil
|
- 5.3
|
%
|
|||||||||||
|
Net income attributable to Sony
Group Corporation’s stockholders
|
882.2
|
830
|
800
|
- 30 bil
|
- 3.6
|
%
|
|||||||||||
|
For all segments excluding the
Financial Services segment *2
|
March 31, 2022
Results
|
May
Forecast
|
July
Forecast
|
Change from
May Forecast
|
|||||||||||||
|
Net cash provided by operating
activities
|
¥
|
813.3
|
¥
|
1,050
|
¥
|
820
|
- 230 bil
|
- 21.9
|
%
|
||||||||
*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-11 for details about the preparation of the Condensed Statements of Cash Flows.
Assumed foreign exchange rates are the following:
|
Assumed foreign currency exchange rates for
the nine months ending March 31, 2023
|
(For your reference)
Assumed foreign currency exchange rates for the
fiscal year ending March 31, 2023 at the time of
the May forecast
|
|
|
1 U.S. dollar
|
approximately 130 yen
|
approximately 123 yen
|
|
1 Euro
|
approximately 138 yen
|
approximately 135 yen
|
Sales are expected to be higher than the May forecast due to higher-than-expected sales in the Pictures, Entertainment, Technology & Services* and Music segments, partially offset by lower-than-expected
sales in the Game & Network Services (“G&NS”) and Imaging & Sensing Solutions segments.
Operating income is expected to be lower than the May forecast due to an expected decrease in operating income in the G&NS segment.
Both income before income taxes and net income attributable to Sony Group Corporation’s stockholders are expected to be lower than the May forecast mainly due to the above-mentioned expected decrease in
operating income.
* The former Electronics Products & Solutions segment has been renamed the Entertainment, Technology & Services (ET&S) segment effective from April 2022.
This change has not resulted in any reclassification of businesses across segments.
- 1 -
The forecast for each business segment for the fiscal year ending March 31, 2023 has been revised as follows:
|
(Billions of yen)
|
||||||||||||
|
March 31, 2022
Results
|
May Forecast
|
July
Forecast
|
||||||||||
|
Game & Network Services (G&NS)
|
||||||||||||
|
Sales
|
¥
|
2,739.8
|
¥
|
3,660
|
¥
|
3,620
|
||||||
|
Operating income
|
346.1
|
305
|
255
|
|||||||||
|
Music
|
||||||||||||
|
Sales
|
1,116.9
|
1,240
|
1,280
|
|||||||||
|
Operating income
|
210.9
|
230
|
230
|
|||||||||
|
Pictures
|
||||||||||||
|
Sales
|
1,238.9
|
1,330
|
1,380
|
|||||||||
|
Operating income
|
217.4
|
100
|
100
|
|||||||||
|
Entertainment, Technology & Services (ET&S)
|
||||||||||||
|
Sales
|
2,339.2
|
2,400
|
2,450
|
|||||||||
|
Operating income
|
212.9
|
180
|
180
|
|||||||||
|
Imaging & Sensing Solutions (I&SS)
|
||||||||||||
|
Sales
|
1,076.4
|
1,470
|
1,440
|
|||||||||
|
Operating income
|
155.6
|
200
|
200
|
|||||||||
|
Financial Services
|
||||||||||||
|
Financial services revenue
|
1,533.8
|
1,440
|
1,440
|
|||||||||
|
Operating income
|
150.1
|
220
|
220
|
|||||||||
|
All Other, Corporate and elimination
|
||||||||||||
|
Operating loss
|
(90.7
|
)
|
(75
|
)
|
(75
|
)
|
||||||
|
Consolidated
|
||||||||||||
|
Sales
|
9,921.5
|
11,400
|
11,500
|
|||||||||
|
Operating income
|
1,202.3
|
1,160
|
1,110
|
|||||||||
Game & Network Services (G&NS)
Sales are expected to be lower than the May forecast due to an expected decrease in sales of non-first-party titles including add-on content, partially offset by the impact of foreign exchange rates.
Operating income is expected to be lower than the May forecast due to the impact of the above-mentioned decrease in sales of non-first-party titles and the negative impact of foreign exchange rates, as well as an expected approximately 13 billion yen
increase in expenses* associated with acquisitions, from approximately 44 billion yen to approximately 57 billion yen. This expected increase is mainly due to the acquisition of Bungie, Inc. being completed earlier than the assumed timing.
* Regarding expenses associated with acquisitions completed within the current fiscal year, Sony has included the estimated impact of these acquisitions based on certain assumptions in the forecast for the
current fiscal year. However, the actual amount of expenses to be recorded in the current fiscal year is subject to change depending on factors such as the accounting treatment to be finalized after the closing dates.
Music
Sales are expected to be higher than the May forecast primarily due to the impact of foreign exchange rates. The forecast for operating income remains unchanged from the May forecast.
Pictures
Sales are expected to be higher than the May forecast primarily due to the impact of foreign exchange rates. The
forecast for operating income remains unchanged from the May forecast.
Entertainment, Technology & Services (ET&S)
Sales are expected to be higher than the May forecast due to the impact of foreign exchange rates. The forecast for operating income remains unchanged from the May forecast due to the impact of higher unit
sales of digital cameras, substantially offset by the impact of lower unit sales of televisions.
- 2 -
Imaging & Sensing Solutions (I&SS)
Sales are expected to be lower than the May forecast due to lower-than-expected sales of image sensors for mobile products resulting from a decrease in unit sales, partially offset by an improvement in the
product mix, as well as lower-than-expected sales of image sensors for industrial equipment and security cameras. These decreases in sales are expected to be partially offset by the impact of foreign exchange rates. The forecast for operating income
remains unchanged from the May forecast mainly due to the positive impact of foreign exchange rates, substantially offset by the impact of the above-mentioned expected decrease in sales of image sensors for industrial equipment and security cameras.
Financial Services
The forecasts for financial services revenue and operating income remain unchanged from the May 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 Insurance Co., Ltd., Sony Assurance Inc. and Sony Bank Inc. The
results discussed in the Financial Services segment differ from the results that SFGI discloses separately on a Japanese statutory basis.
- 3 -
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 COVID-19 and developments relating to the situation in Ukraine and Russia 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.
- 4 -
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