SECURITIES
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 August 2024
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,
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.
|
SONY GROUP CORPORATION
(Registrant)
|
|
|
|
|
By: |
/s/ Hiroki Totoki |
|
|
(Signature) |
|
Hiroki Totoki |
|
President, Chief Operating Officer and |
|
Chief Financial Officer |
Date: August 7, 2024
List of Materials
Documents attached hereto:
Consolidated Financial Summary for the First Quarter Ended June 30,
2024
Consolidated Financial
Summary for the First Quarter Ended June 30, 2024
(In accordance with IFRS® Accounting Standards as issued by the International
Accounting Standards Board (“IFRS Accounting Standards”))
August 7, 2024 |
Company name |
: Sony Group Corporation |
Stock exchange listing |
: Tokyo Stock Exchange (“TSE”) |
Securities code |
: 6758 |
URL |
: https://www.sony.com/en/SonyInfo/IR/ |
Representative |
: Kenichiro Yoshida, Representative Corporate Executive Officer |
Contact person |
: Sadahiko Hayakawa, Senior Vice President |
Telephone |
: +81-3-6748-2111 |
Scheduled date to commence dividend payment |
: - |
Preparation of supplementary materials on financial results |
: Yes |
Holding of financial results briefing |
: Yes (for investors and analysts) |
(Amounts are rounded to the nearest million yen, unless otherwise noted.) |
1. Consolidated financial results for the three months ended June 30,
2024 (from April 1, 2024 to June 30, 2024)
(1) Consolidated operating results (cumulative) |
(Percentages indicate year-on-year changes.) |
Consolidated |
Sales and financial
services revenue |
Operating income |
Income before income
taxes |
Net income |
Net income attributable to
Sony Group Corporation’s
stockholders |
Three months ended |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
June 30, 2024 |
3,011,649 |
1.6 |
279,106 |
10.3 |
316,867 |
14.8 |
235,828 |
8.2 |
231,638 |
6.5 |
June 30, 2023 |
2,963,652 |
32.9 |
253,042 |
-30.6 |
276,034 |
-21.0 |
217,942 |
-16.6 |
217,545 |
-16.7 |
Consolidated |
Total comprehensive
income |
Adjusted OIBDA* |
Adjusted EBITDA* |
Basic earnings
per share |
Diluted earnings
per share |
Three months ended |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen |
Yen |
June 30, 2024 |
377,881 |
-15.2 |
454,682 |
14.8 |
461,256 |
13.5 |
189.90 |
189.43 |
June 30, 2023 |
445,459 |
0.5 |
396,122 |
-19.0 |
406,221 |
-18.2 |
176.26 |
175.67 |
For all segments
excluding Financial
Services* |
Sales and financial
services revenue |
Operating income |
Income before
income taxes |
Net income attributable to
Sony Group Corporation’s
stockholders |
Adjusted OIBDA* |
Adjusted EBITDA* |
Three months ended |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
June 30, 2024 |
2,567,436 |
12.3 |
249,124 |
25.5 |
286,885 |
5.6 |
210,025 |
-8.3 |
417,870 |
24.9 |
424,444 |
7.5 |
June 30, 2023 |
2,285,789 |
13.3 |
198,531 |
-12.0 |
271,559 |
8.0 |
229,126 |
13.0 |
334,696 |
-2.5 |
394,831 |
0.6 |
(2) Consolidated financial position
|
Total assets |
Total equity |
Equity attributable to Sony Group
Corporation’s stockholders |
Ratio of equity attributable to
Sony Group Corporation’s
stockholders to total assets |
As of |
Yen in millions |
Yen in millions |
Yen in millions |
% |
June 30, 2024 |
34,677,809 |
8,148,959 |
7,857,452 |
22.7 |
March 31, 2024 |
34,107,490 |
7,756,105 |
7,587,177 |
22.2 |
2. Dividends
|
Annual dividends per share |
|
First quarter-end |
Second quarter-end |
Third quarter-end |
Year-end |
Total |
|
Yen |
Yen |
Yen |
Yen |
Yen |
Fiscal year ended
March 31, 2024 |
- |
40.00 |
- |
45.00 |
85.00 |
Fiscal year ending
March 31, 2025 |
- |
|
|
|
|
Fiscal year ending
March 31, 2025
(Forecast)*1 |
|
50.00 |
- |
10.00 |
- |
Note: Revisions to the forecast of dividends most recently announced:
No
| *1 | Sony Group Corporation decided at the Board of Directors meeting
held on May 14, 2024 to conduct a stock split, scheduled to be effective on October 1, 2024 with a record date of September 30,
2024. Each share of Sony Group Corporation’s common stock will be split into five (5) shares per share. The above year-end
dividend per share forecast for the fiscal year ending March 31, 2025 is based on a number of shares taking into account the stock
split. The total annual dividend per share forecast for the fiscal year ending March 31, 2025 is not presented because the total
of the interim dividend and the year-end dividend cannot be calculated due to the effect of the stock split. Without taking the stock
split into account, the year-end dividend per share forecast for the fiscal year ending March 31, 2025 would be 50 yen and the total
annual dividend per share forecast for the fiscal year ending March 31, 2025 would be 100 yen. |
3. Forecast for Consolidated Results for the Fiscal Year Ending
March 31, 2025 (from April 1, 2024 to March 31, 2025)
(Percentages indicate year-on-year changes.) |
Fiscal year ending March
31, 2025 |
Sales and financial
services revenue |
Operating income |
Income before
income taxes |
Net income attributable to
Sony Group Corporation’s
stockholders |
Adjusted OIBDA* |
Adjusted EBITDA* |
|
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Yen in millions |
% |
Consolidated |
12,610,000 |
-3.2 |
1,310,000 |
8.4 |
1,335,000 |
5.2 |
980,000 |
1.0 |
1,990,000 |
9.0 |
1,990,000 |
9.5 |
For all segments excluding Financial Services* |
11,700,000 |
3.9 |
1,165,000 |
12.5 |
1,190,000 |
3.9 |
875,000 |
-2.4 |
1,820,000 |
10.7 |
1,820,000 |
7.9 |
Note: Revisions to the forecast for
the fiscal year ending March 31, 2025 most recently announced: Yes
| * | Adjusted OIBDA (Operating Income Before Depreciation and Amortization),
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and figures for all segments excluding Financial Services
are not measures in accordance with IFRS Accounting Standards. However, Sony Group Corporation believes that these disclosures may be
useful information to investors. Adjusted OIBDA and Adjusted EBITDA are calculated by the following formulas, respectively. For the reconciliations
for Adjusted OIBDA and Adjusted EBITDA, please refer to “Q1 FY2024 Consolidated Financial Results” (the presentation material
for the earnings announcement) disclosed on the same date as this document on the Timely Disclosure Network (“TDnet”) of
the TSE, the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system of the U.S. Securities and Exchange Commission
(“SEC”) and the website of Sony Group Corporation. |
| | 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 = 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. |
| | For details about the preparation of the Financial Statements
for all segments excluding Financial Services, please refer to page 12 of the Appendix. |
* Notes
(1) |
Significant changes in scope of consolidation during the period |
: No |
|
|
(2) |
Changes in accounting policies and changes in accounting estimates: |
|
|
(i) |
Changes in accounting policies required by IFRS Accounting Standards |
: Yes |
|
(ii) |
Changes in accounting policies due to other reasons |
: No |
|
(iii) |
Changes in accounting estimates |
: No |
(3) |
Number of issued shares (common stock): |
|
|
|
|
|
(i) |
Total number of issued shares at the end of the period (including treasury stock) |
As of June 30, 2024 |
1,248,619,589 |
shares |
As of March 31, 2024 |
1,261,231,889 |
shares |
| (ii) | Number of shares of treasury stock at the end of the period |
As of June 30, 2024 |
30,868,630 |
shares |
As of March 31, 2024 |
39,783,003 |
shares |
| (iii) | Average number of shares outstanding during the period (cumulative
from the beginning of the fiscal year) |
Three months ended June 30, 2024 |
1,219,769,683 |
shares |
Three months ended June 30, 2023 |
1,234,242,212 |
shares |
|
Note: |
Please refer to “Notes to Condensed Quarterly Consolidated Financial Statements - 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)” for number of shares used as basis for calculating consolidated per share data. |
| * | Review of the attached condensed quarterly consolidated financial
statements by certified public accountants or an audit firm: No |
| * | Proper use of earnings forecasts, and other special matters: |
| | Please refer to “Cautionary Statement” on page 17
of the Appendix for assumptions and other matters related to the forecast of financial results. |
| | Supplementary materials on financial results including the presentation
material for the earnings announcement are available on Sony Group Corporation’s website along with this document. |
(Appendix)
Table of Contents for Appendix
Condensed Quarterly Consolidated Financial Statements (Unaudited) |
2 |
|
|
Condensed Quarterly Consolidated Statements of Financial Position |
2 |
Condensed Quarterly Consolidated Statements of Income (Three months ended June 30) |
4 |
Condensed Quarterly Consolidated Statements of Comprehensive Income (Three months ended June 30) |
5 |
Condensed Quarterly Consolidated Statements of Changes in Stockholders’ Equity (Three months ended June 30) |
6 |
Condensed Quarterly Consolidated Statements of Cash Flows (Three months ended June 30) |
7 |
Notes to Condensed Quarterly Consolidated Financial Statements |
9 |
- Business Segment Information |
9 |
- Going Concern Assumption |
15 |
- Accounting Policy and Other Information |
15 |
|
|
Overview of Operating Results |
17 |
|
|
Cautionary Statement |
17 |
All financial information is presented on the basis of IFRS Accounting
Standards.
Sony Group Corporation and its consolidated subsidiaries are together
referred to as “Sony” or “Sony Group.”
(Unaudited)
Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statements of Financial Position
| |
Yen in millions | |
| |
March 31, 2024 | | |
June 30, 2024 | | |
Change from March 31, 2024 | |
ASSETS | |
| | | |
| | | |
| | |
Current assets: | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
| 1,907,113 | | |
| 1,477,098 | | |
| (430,015 | ) |
Investments and advances in the Financial Services segment | |
| 398,153 | | |
| 412,275 | | |
| 14,122 | |
Trade and other receivables, and contract assets | |
| 2,158,196 | | |
| 2,080,143 | | |
| (78,053 | ) |
Inventories | |
| 1,518,644 | | |
| 1,692,709 | | |
| 174,065 | |
Other financial assets | |
| 125,365 | | |
| 127,656 | | |
| 2,291 | |
Other current assets | |
| 669,335 | | |
| 765,856 | | |
| 96,521 | |
Total current assets | |
| 6,776,806 | | |
| 6,555,737 | | |
| (221,069 | ) |
Non-current assets: | |
| | | |
| | | |
| | |
Investments accounted for using the equity method | |
| 423,744 | | |
| 429,128 | | |
| 5,384 | |
Investments and advances in the Financial Services segment | |
| 18,939,794 | | |
| 18,959,272 | | |
| 19,478 | |
Property, plant and equipment | |
| 1,522,640 | | |
| 1,596,690 | | |
| 74,050 | |
Right-of-use assets | |
| 503,395 | | |
| 576,710 | | |
| 73,315 | |
Goodwill | |
| 1,487,100 | | |
| 1,583,088 | | |
| 95,988 | |
Content assets | |
| 1,928,113 | | |
| 2,317,397 | | |
| 389,284 | |
Other intangible assets | |
| 615,602 | | |
| 663,731 | | |
| 48,129 | |
Deferred tax assets | |
| 499,550 | | |
| 507,971 | | |
| 8,421 | |
Other financial assets | |
| 897,341 | | |
| 945,587 | | |
| 48,246 | |
Other non-current assets | |
| 513,405 | | |
| 542,498 | | |
| 29,093 | |
Total non-current assets | |
| 27,330,684 | | |
| 28,122,072 | | |
| 791,388 | |
Total assets | |
| 34,107,490 | | |
| 34,677,809 | | |
| 570,319 | |
(Continued on the following page.)
Condensed Quarterly Consolidated Statements of Financial Position
(Continued)
| |
Yen in millions | |
| |
March 31, 2024 | | |
June 30, 2024 | | |
Change from March 31, 2024 | |
LIABILITIES | |
| | | |
| | | |
| | |
Current liabilities: | |
| | | |
| | | |
| | |
Short-term borrowings | |
| 1,812,605 | | |
| 1,823,419 | | |
| 10,814 | |
Current portion of long-term debt | |
| 217,711 | | |
| 214,847 | | |
| (2,864 | ) |
Trade and other payables | |
| 2,064,905 | | |
| 2,252,860 | | |
| 187,955 | |
Deposits from customers in the banking business | |
| 3,670,567 | | |
| 3,690,958 | | |
| 20,391 | |
Income taxes payables | |
| 152,074 | | |
| 91,243 | | |
| (60,831 | ) |
Participation and residual liabilities in the Pictures segment | |
| 251,743 | | |
| 264,049 | | |
| 12,306 | |
Other financial liabilities | |
| 116,044 | | |
| 130,321 | | |
| 14,277 | |
Other current liabilities | |
| 1,906,396 | | |
| 1,899,211 | | |
| (7,185 | ) |
Total current liabilities | |
| 10,192,045 | | |
| 10,366,908 | | |
| 174,863 | |
Non-current liabilities: | |
| | | |
| | | |
| | |
Long-term debt | |
| 2,058,117 | | |
| 2,134,844 | | |
| 76,727 | |
Defined benefit liabilities | |
| 247,583 | | |
| 252,354 | | |
| 4,771 | |
Deferred tax liabilities | |
| 166,424 | | |
| 179,817 | | |
| 13,393 | |
Insurance contract liabilities | |
| 12,931,995 | | |
| 12,776,766 | | |
| (155,229 | ) |
Participation and residual liabilities in the Pictures segment | |
| 206,081 | | |
| 220,842 | | |
| 14,761 | |
Other financial liabilities | |
| 386,761 | | |
| 415,208 | | |
| 28,447 | |
Other non-current liabilities | |
| 162,379 | | |
| 182,111 | | |
| 19,732 | |
Total non-current liabilities | |
| 16,159,340 | | |
| 16,161,942 | | |
| 2,602 | |
Total liabilities | |
| 26,351,385 | | |
| 26,528,850 | | |
| 177,465 | |
EQUITY | |
| | | |
| | | |
| | |
Sony Group Corporation’s stockholders’ equity: | |
| | | |
| | | |
| | |
Common stock | |
| 881,357 | | |
| 881,357 | | |
| - | |
Additional paid-in capital | |
| 1,483,410 | | |
| 1,484,449 | | |
| 1,039 | |
Retained earnings | |
| 6,002,407 | | |
| 6,025,362 | | |
| 22,955 | |
Accumulated other comprehensive income | |
| (376,063 | ) | |
| (209,524 | ) | |
| 166,539 | |
Treasury stock, at cost | |
| (403,934 | ) | |
| (324,192 | ) | |
| 79,742 | |
Equity attributable to Sony Group Corporation’s stockholders | |
| 7,587,177 | | |
| 7,857,452 | | |
| 270,275 | |
Noncontrolling interests | |
| 168,928 | | |
| 291,507 | | |
| 122,579 | |
Total equity | |
| 7,756,105 | | |
| 8,148,959 | | |
| 392,854 | |
Total liabilities and equity | |
| 34,107,490 | | |
| 34,677,809 | | |
| 570,319 | |
Condensed Quarterly Consolidated Statements of Income
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | | |
Change | |
Sales and financial services revenue: | |
| | | |
| | | |
| | |
Sales | |
| 2,284,543 | | |
| 2,565,361 | | |
| 280,818 | |
Financial services revenue | |
| | | |
| | | |
| | |
Insurance revenue | |
| 142,750 | | |
| 152,912 | | |
| 10,162 | |
Other financial services revenue | |
| 536,359 | | |
| 293,376 | | |
| (242,983 | ) |
Total financial services revenue | |
| 679,109 | | |
| 446,288 | | |
| (232,821 | ) |
Total sales and financial services revenue | |
| 2,963,652 | | |
| 3,011,649 | | |
| 47,997 | |
Costs and expenses: | |
| | | |
| | | |
| | |
Cost of sales | |
| 1,624,510 | | |
| 1,784,389 | | |
| 159,879 | |
Selling, general and administrative | |
| 474,939 | | |
| 543,414 | | |
| 68,475 | |
Financial services expenses | |
| | | |
| | | |
| | |
Insurance service expenses | |
| 97,366 | | |
| 110,813 | | |
| 13,447 | |
Insurance finance expenses (income) | |
| 489,352 | | |
| 261,480 | | |
| (227,872 | ) |
Other financial services expenses | |
| 37,825 | | |
| 43,961 | | |
| 6,136 | |
Total financial services expenses | |
| 624,543 | | |
| 416,254 | | |
| (208,289 | ) |
Other operating (income) expense, net | |
| (8,742 | ) | |
| (9,820 | ) | |
| (1,078 | ) |
Total costs and expenses | |
| 2,715,250 | | |
| 2,734,237 | | |
| 18,987 | |
Share of profit (loss) of investments accounted for using the equity method | |
| 4,640 | | |
| 1,694 | | |
| (2,946 | ) |
Operating income | |
| 253,042 | | |
| 279,106 | | |
| 26,064 | |
Financial income | |
| 31,912 | | |
| 53,230 | | |
| 21,318 | |
Financial expenses | |
| 8,920 | | |
| 15,469 | | |
| 6,549 | |
Income before income taxes | |
| 276,034 | | |
| 316,867 | | |
| 40,833 | |
Income taxes | |
| 58,092 | | |
| 81,039 | | |
| 22,947 | |
Net income | |
| 217,942 | | |
| 235,828 | | |
| 17,886 | |
| |
| | | |
| | | |
| | |
Net income attributable to | |
| | | |
| | | |
| | |
Sony Group Corporation’s stockholders | |
| 217,545 | | |
| 231,638 | | |
| 14,093 | |
Noncontrolling interests | |
| 397 | | |
| 4,190 | | |
| 3,793 | |
| |
Yen | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | | |
Change | |
Per share data: | |
| | |
| | |
| |
Net income attributable to Sony Group Corporation’s stockholders | |
| | | |
| | | |
| | |
- Basic | |
| 176.26 | | |
| 189.90 | | |
| 13.64 | |
- Diluted | |
| 175.67 | | |
| 189.43 | | |
| 13.76 | |
Condensed Quarterly Consolidated Statements of Comprehensive Income
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | | |
Change | |
Net income | |
| 217,942 | | |
| 235,828 | | |
| 17,886 | |
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 | |
| (6,917 | ) | |
| (15,062 | ) | |
| (8,145 | ) |
Remeasurement of defined benefit pension plans | |
| (425 | ) | |
| (787 | ) | |
| (362 | ) |
Share of other comprehensive income of investments accounted for using the equity method | |
| 139 | | |
| (1,140 | ) | |
| (1,279 | ) |
Items that may be reclassified subsequently to profit or loss | |
| | | |
| | | |
| | |
Changes in debt instruments measured at fair value through other comprehensive income | |
| (72,542 | ) | |
| (432,256 | ) | |
| (359,714 | ) |
Cash flow hedges | |
| (2,230 | ) | |
| (2,277 | ) | |
| (47 | ) |
Insurance finance income (expenses) | |
| 20,517 | | |
| 350,402 | | |
| 329,885 | |
Exchange differences on translating foreign operations | |
| 285,771 | | |
| 239,701 | | |
| (46,070 | ) |
Share of other comprehensive income of investments accounted for using the equity method | |
| 3,150 | | |
| 3,811 | | |
| 661 | |
Other | |
| 54 | | |
| (339 | ) | |
| (393 | ) |
Total other comprehensive income, net of tax | |
| 227,517 | | |
| 142,053 | | |
| (85,464 | ) |
Comprehensive income | |
| 445,459 | | |
| 377,881 | | |
| (67,578 | ) |
| |
| | | |
| | | |
| | |
Comprehensive income attributable to | |
| | | |
| | | |
| | |
Sony Group Corporation’s stockholders | |
| 443,428 | | |
| 372,839 | | |
| (70,589 | ) |
Noncontrolling interests | |
| 2,031 | | |
| 5,042 | | |
| 3,011 | |
Condensed Quarterly 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, 2023 | |
| 880,365 | | |
| 1,463,807 | | |
| 5,092,442 | | |
| (614,570 | ) | |
| (223,507 | ) | |
| 6,598,537 | | |
| 58,613 | | |
| 6,657,150 | |
Comprehensive income: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| | | |
| | | |
| 217,545 | | |
| | | |
| | | |
| 217,545 | | |
| 397 | | |
| 217,942 | |
Other comprehensive income, net of tax | |
| | | |
| | | |
| | | |
| 225,883 | | |
| | | |
| 225,883 | | |
| 1,634 | | |
| 227,517 | |
Total comprehensive income | |
| | | |
| | | |
| 217,545 | | |
| 225,883 | | |
| | | |
| 443,428 | | |
| 2,031 | | |
| 445,459 | |
Transfer to retained earnings | |
| | | |
| | | |
| 1,152 | | |
| (1,152 | ) | |
| | | |
| - | | |
| | | |
| - | |
Transactions with stockholders and other: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Exercise of stock acquisition rights | |
| | | |
| (1 | ) | |
| (144 | ) | |
| | | |
| 4,600 | | |
| 4,455 | | |
| | | |
| 4,455 | |
Stock-based compensation | |
| | | |
| 3,127 | | |
| | | |
| | | |
| | | |
| 3,127 | | |
| | | |
| 3,127 | |
Dividends declared | |
| | | |
| | | |
| (49,380 | ) | |
| | | |
| | | |
| (49,380 | ) | |
| (1,604 | ) | |
| (50,984 | ) |
Purchase of treasury stock | |
| | | |
| | | |
| | | |
| | | |
| (10,150 | ) | |
| (10,150 | ) | |
| | | |
| (10,150 | ) |
Reissuance of treasury stock | |
| | | |
| 1 | | |
| | | |
| | | |
| 2 | | |
| 3 | | |
| | | |
| 3 | |
Transactions with noncontrolling interests shareholders and other | |
| | | |
| 12,968 | | |
| | | |
| | | |
| | | |
| 12,968 | | |
| 16,550 | | |
| 29,518 | |
Balance at June 30, 2023 | |
| 880,365 | | |
| 1,479,902 | | |
| 5,261,615 | | |
| (389,839 | ) | |
| (229,055 | ) | |
| 7,002,988 | | |
| 75,590 | | |
| 7,078,578 | |
| |
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, 2024 | |
| 881,357 | | |
| 1,483,410 | | |
| 6,002,407 | | |
| (376,063 | ) | |
| (403,934 | ) | |
| 7,587,177 | | |
| 168,928 | | |
| 7,756,105 | |
Comprehensive income: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| | | |
| | | |
| 231,638 | | |
| | | |
| | | |
| 231,638 | | |
| 4,190 | | |
| 235,828 | |
Other comprehensive income, net of tax | |
| | | |
| | | |
| | | |
| 141,201 | | |
| | | |
| 141,201 | | |
| 852 | | |
| 142,053 | |
Total comprehensive income | |
| | | |
| | | |
| 231,638 | | |
| 141,201 | | |
| | | |
| 372,839 | | |
| 5,042 | | |
| 377,881 | |
Transfer to retained earnings | |
| | | |
| | | |
| (25,338 | ) | |
| 25,338 | | |
| | | |
| - | | |
| | | |
| - | |
Transactions with stockholders and other: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Exercise of stock acquisition rights and other | |
| | | |
| (1 | ) | |
| (642 | ) | |
| | | |
| 2,417 | | |
| 1,774 | | |
| | | |
| 1,774 | |
Stock-based compensation | |
| | | |
| 5,504 | | |
| | | |
| | | |
| | | |
| 5,504 | | |
| | | |
| 5,504 | |
Dividends declared | |
| | | |
| | | |
| (54,965 | ) | |
| | | |
| | | |
| (54,965 | ) | |
| (2,076 | ) | |
| (57,041 | ) |
Purchase of treasury stock | |
| | | |
| | | |
| | | |
| | | |
| (51,255 | ) | |
| (51,255 | ) | |
| | | |
| (51,255 | ) |
Reissuance of treasury stock | |
| | | |
| 1 | | |
| | | |
| | | |
| 3 | | |
| 4 | | |
| | | |
| 4 | |
Cancellation of treasury stock | |
| | | |
| (839 | ) | |
| (127,738 | ) | |
| | | |
| 128,577 | | |
| - | | |
| | | |
| - | |
Transactions with noncontrolling interests shareholders and other | |
| | | |
| (3,626 | ) | |
| | | |
| | | |
| | | |
| (3,626 | ) | |
| 119,613 | | |
| 115,987 | |
Balance at June 30, 2024 | |
| 881,357 | | |
| 1,484,449 | | |
| 6,025,362 | | |
| (209,524 | ) | |
| (324,192 | ) | |
| 7,857,452 | | |
| 291,507 | | |
| 8,148,959 | |
Condensed Quarterly Consolidated Statements of Cash Flows
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | |
Cash flows from operating activities: | |
| | | |
| | |
Income before income taxes | |
| 276,034 | | |
| 316,867 | |
Adjustments to reconcile income before income taxes to net cash used in operating activities: | |
| | | |
| | |
Depreciation and amortization, including amortization of contract costs | |
| 251,767 | | |
| 268,504 | |
Other operating (income) expense, net | |
| (8,742 | ) | |
| (9,820 | ) |
Gain on securities, net (other than Financial Services segment) | |
| (14,189 | ) | |
| (31,406 | ) |
Share of loss of investments accounted for using the equity method, net of dividends | |
| 2,275 | | |
| 5,122 | |
Changes in assets and liabilities: | |
| | | |
| | |
(Increase) decrease in trade receivables and contract assets | |
| (11,342 | ) | |
| 165,792 | |
Increase in inventories | |
| (283,152 | ) | |
| (123,840 | ) |
Increase in investments and advances in the Financial Services segment | |
| (560,038 | ) | |
| (633,041 | ) |
Increase in content assets | |
| (137,465 | ) | |
| (257,588 | ) |
Increase in trade payables | |
| 174,512 | | |
| 132,780 | |
Increase in insurance contract liabilities, net of insurance contract assets | |
| 561,732 | | |
| 341,752 | |
Increase in deposits from customers in the banking business | |
| 144,119 | | |
| 35,540 | |
Decrease in borrowings in the life insurance business and the banking business | |
| (54,691 | ) | |
| (41,126 | ) |
Increase (decrease) in taxes payable other than income taxes, net | |
| 20,014 | | |
| (3,893 | ) |
Increase in other financial assets and other current assets | |
| (34,283 | ) | |
| (41,010 | ) |
Decrease in other financial liabilities and other current liabilities | |
| (130,303 | ) | |
| (113,984 | ) |
Income taxes paid | |
| (121,147 | ) | |
| (109,918 | ) |
Other | |
| (87,770 | ) | |
| (27,016 | ) |
Net cash used in operating activities | |
| (12,669 | ) | |
| (126,285 | ) |
(Continued on the following page.)
Condensed
Quarterly Consolidated Statements of Cash Flows (Continued)
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | |
Cash flows from investing activities: | |
| | | |
| | |
Payments for property, plant and equipment and other intangible assets | |
| (130,501 | ) | |
| (211,780 | ) |
Proceeds from sales of property, plant and equipment and other intangible assets | |
| 6,235 | | |
| 5,619 | |
Payments for investments and advances (other than Financial Services segment) | |
| (21,319 | ) | |
| (15,747 | ) |
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment) | |
| 4,410 | | |
| 30,896 | |
Payments for purchases of businesses and other | |
| (59,480 | ) | |
| (169,794 | ) |
Proceeds from sales of businesses | |
| - | | |
| 1,609 | |
Other | |
| 2,008 | | |
| 75 | |
Net cash used in investing activities | |
| (198,647 | ) | |
| (359,122 | ) |
Cash flows from financing activities: | |
| | | |
| | |
Increase in short-term borrowings, net | |
| 294,039 | | |
| 24,983 | |
Proceeds from issuance of long-term debt | |
| 5,599 | | |
| 6,276 | |
Payments of long-term debt | |
| (28,414 | ) | |
| (30,091 | ) |
Dividends paid | |
| (48,955 | ) | |
| (54,451 | ) |
Payments for purchases of treasury stock | |
| (10,150 | ) | |
| (51,255 | ) |
Capital contribution from non-controlling interests | |
| - | | |
| 109,527 | |
Other | |
| 1,748 | | |
| (3,457 | ) |
Net cash provided by financing activities | |
| 213,867 | | |
| 1,532 | |
Effect of exchange rate changes on cash and cash equivalents | |
| 48,648 | | |
| 53,860 | |
Net increase (decrease) in cash and cash equivalents | |
| 51,199 | | |
| (430,015 | ) |
Cash and cash equivalents at beginning of the fiscal year | |
| 1,480,900 | | |
| 1,907,113 | |
Cash and cash equivalents at end of the period | |
| 1,532,099 | | |
| 1,477,098 | |
Notes to Condensed Quarterly Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | | |
Change | |
Sales and financial services revenue: | |
| | | |
| | | |
| | |
Game & Network Services - | |
| | | |
| | | |
| | |
Customers | |
| 755,003 | | |
| 844,288 | | |
| 89,285 | |
Intersegment | |
| 16,877 | | |
| 20,623 | | |
| 3,746 | |
Total | |
| 771,880 | | |
| 864,911 | | |
| 93,031 | |
Music - | |
| | | |
| | | |
| | |
Customers | |
| 355,756 | | |
| 435,726 | | |
| 79,970 | |
Intersegment | |
| 2,473 | | |
| 6,296 | | |
| 3,823 | |
Total | |
| 358,229 | | |
| 442,022 | | |
| 83,793 | |
Pictures - | |
| | | |
| | | |
| | |
Customers | |
| 320,178 | | |
| 336,556 | | |
| 16,378 | |
Intersegment | |
| 188 | | |
| 790 | | |
| 602 | |
Total | |
| 320,366 | | |
| 337,346 | | |
| 16,980 | |
Entertainment, Technology & Services - | |
| | | |
| | | |
| | |
Customers | |
| 563,292 | | |
| 594,179 | | |
| 30,887 | |
Intersegment | |
| 8,491 | | |
| 6,736 | | |
| (1,755 | ) |
Total | |
| 571,783 | | |
| 600,915 | | |
| 29,132 | |
Imaging & Sensing Solutions - | |
| | | |
| | | |
| | |
Customers | |
| 270,476 | | |
| 333,308 | | |
| 62,832 | |
Intersegment | |
| 22,264 | | |
| 20,172 | | |
| (2,092 | ) |
Total | |
| 292,740 | | |
| 353,480 | | |
| 60,740 | |
Financial Services - | |
| | | |
| | | |
| | |
Customers | |
| 679,109 | | |
| 446,288 | | |
| (232,821 | ) |
Intersegment | |
| 2,302 | | |
| 2,307 | | |
| 5 | |
Total | |
| 681,411 | | |
| 448,595 | | |
| (232,816 | ) |
All Other - | |
| | | |
| | | |
| | |
Customers | |
| 16,402 | | |
| 18,933 | | |
| 2,531 | |
Intersegment | |
| 3,091 | | |
| 2,157 | | |
| (934 | ) |
Total | |
| 19,493 | | |
| 21,090 | | |
| 1,597 | |
Corporate and elimination | |
| (52,250 | ) | |
| (56,710 | ) | |
| (4,460 | ) |
Consolidated total | |
| 2,963,652 | | |
| 3,011,649 | | |
| 47,997 | |
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.
Segment profit (loss)
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | | |
Change | |
Operating income (loss): | |
| | | |
| | | |
| | |
Game & Network Services | |
| 49,160 | | |
| 65,209 | | |
| 16,049 | |
Music | |
| 73,380 | | |
| 85,893 | | |
| 12,513 | |
Pictures | |
| 15,971 | | |
| 11,308 | | |
| (4,663 | ) |
Entertainment, Technology & Services | |
| 55,646 | | |
| 64,083 | | |
| 8,437 | |
Imaging & Sensing Solutions | |
| 12,731 | | |
| 36,647 | | |
| 23,916 | |
Financial Services | |
| 54,514 | | |
| 29,985 | | |
| (24,529 | ) |
All Other | |
| 2,475 | | |
| 1,275 | | |
| (1,200 | ) |
Total | |
| 263,877 | | |
| 294,400 | | |
| 30,523 | |
Corporate and elimination | |
| (10,835 | ) | |
| (15,294 | ) | |
| (4,459 | ) |
Consolidated operating income | |
| 253,042 | | |
| 279,106 | | |
| 26,064 | |
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.
(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: | |
2023 | | |
2024 | | |
Change | |
Game & Network Services | |
| | | |
| | | |
| | |
Digital Software and Add-on Content | |
| 365,346 | | |
| 432,752 | | |
| 67,406 | |
Network Services | |
| 124,499 | | |
| 159,346 | | |
| 34,847 | |
Hardware and Others | |
| 265,158 | | |
| 252,190 | | |
| (12,968 | ) |
Total | |
| 755,003 | | |
| 844,288 | | |
| 89,285 | |
Music | |
| | | |
| | | |
| | |
Recorded Music - Streaming | |
| 164,887 | | |
| 196,663 | | |
| 31,776 | |
Recorded Music - Others | |
| 72,885 | | |
| 102,616 | | |
| 29,731 | |
Music Publishing | |
| 75,139 | | |
| 96,676 | | |
| 21,537 | |
Visual Media and Platform | |
| 42,845 | | |
| 39,771 | | |
| (3,074 | ) |
Total | |
| 355,756 | | |
| 435,726 | | |
| 79,970 | |
Pictures | |
| | | |
| | | |
| | |
Motion Pictures | |
| 125,504 | | |
| 133,034 | | |
| 7,530 | |
Television Productions | |
| 104,231 | | |
| 94,285 | | |
| (9,946 | ) |
Media Networks | |
| 90,443 | | |
| 109,237 | | |
| 18,794 | |
Total | |
| 320,178 | | |
| 336,556 | | |
| 16,378 | |
Entertainment, Technology & Services | |
| | | |
| | | |
| | |
Televisions | |
| 135,982 | | |
| 129,124 | | |
| (6,858 | ) |
Audio and Video | |
| 89,149 | | |
| 97,321 | | |
| 8,172 | |
Still and Video Cameras | |
| 161,874 | | |
| 192,453 | | |
| 30,579 | |
Mobile Communications | |
| 87,362 | | |
| 81,041 | | |
| (6,321 | ) |
Other | |
| 88,925 | | |
| 94,240 | | |
| 5,315 | |
Total | |
| 563,292 | | |
| 594,179 | | |
| 30,887 | |
Imaging & Sensing Solutions | |
| 270,476 | | |
| 333,308 | | |
| 62,832 | |
Financial Services | |
| 679,109 | | |
| 446,288 | | |
| (232,821 | ) |
All Other | |
| 16,402 | | |
| 18,933 | | |
| 2,531 | |
Corporate | |
| 3,436 | | |
| 2,371 | | |
| (1,065 | ) |
Consolidated total | |
| 2,963,652 | | |
| 3,011,649 | | |
| 47,997 | |
In the G&NS segment,
Digital Software and Add-on Content includes distribution of software titles and add-on content through the network; Network Services
includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software,
game software sold bundled with home gaming consoles, 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
and merchandising; 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 networks and direct-to-consumer streaming services 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.
(Condensed Quarterly Financial Services
Financial Statements)
The following schedules
show unaudited condensed quarterly financial statements for the Financial Services segment and all other segments excluding
Financial Services. These presentations are not in accordance with IFRS Accounting Standards, which is used by Sony to prepare its
condensed quarterly 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 quarterly 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 consolidated column is presented net of
the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.
Condensed Quarterly Statements of Financial Position
| |
Yen in millions | |
| |
Financial Services | | |
Sony without Financial Services | | |
Consolidated | |
| |
March 31, 2024 | | |
June 30, 2024 | | |
March 31, 2024 | | |
June 30, 2024 | | |
March 31, 2024 | | |
June 30, 2024 | |
ASSETS | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Current assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
¥ | 913,815 | | |
¥ | 630,317 | | |
¥ | 993,298 | | |
¥ | 846,781 | | |
¥ | 1,907,113 | | |
¥ | 1,477,098 | |
Investments and advances in the Financial Services segment | |
| 398,153 | | |
| 412,275 | | |
| - | | |
| - | | |
| 398,153 | | |
| 412,275 | |
Trade and other receivables, and contract assets | |
| 127,016 | | |
| 148,274 | | |
| 2,033,170 | | |
| 1,934,878 | | |
| 2,158,196 | | |
| 2,080,143 | |
Inventories | |
| - | | |
| - | | |
| 1,518,644 | | |
| 1,692,709 | | |
| 1,518,644 | | |
| 1,692,709 | |
Other financial assets | |
| 57,254 | | |
| 51,275 | | |
| 68,111 | | |
| 76,382 | | |
| 125,365 | | |
| 127,656 | |
Other current assets | |
| 50,487 | | |
| 64,444 | | |
| 625,539 | | |
| 709,232 | | |
| 669,335 | | |
| 765,856 | |
Total current assets | |
| 1,546,725 | | |
| 1,306,585 | | |
| 5,238,762 | | |
| 5,259,982 | | |
| 6,776,806 | | |
| 6,555,737 | |
Non-current assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Investments accounted for using the equity method | |
| 4,905 | | |
| 4,943 | | |
| 418,839 | | |
| 424,185 | | |
| 423,744 | | |
| 429,128 | |
Investments and advances in the Financial Services segment | |
| 18,939,794 | | |
| 18,959,272 | | |
| - | | |
| - | | |
| 18,939,794 | | |
| 18,959,272 | |
Investments in Financial Services, at cost | |
| - | | |
| - | | |
| 550,483 | | |
| 550,483 | | |
| - | | |
| - | |
Property, plant and equipment | |
| 14,162 | | |
| 13,898 | | |
| 1,508,151 | | |
| 1,582,466 | | |
| 1,522,640 | | |
| 1,596,690 | |
Right-of-use assets | |
| 76,288 | | |
| 78,259 | | |
| 428,224 | | |
| 499,555 | | |
| 503,395 | | |
| 576,710 | |
Goodwill and intangible assets, including content assets | |
| 77,323 | | |
| 76,924 | | |
| 3,953,492 | | |
| 4,487,292 | | |
| 4,030,815 | | |
| 4,564,216 | |
Deferred tax assets | |
| - | | |
| - | | |
| 520,613 | | |
| 511,748 | | |
| 499,550 | | |
| 507,971 | |
Other financial assets | |
| 52,882 | | |
| 53,981 | | |
| 848,599 | | |
| 895,754 | | |
| 897,341 | | |
| 945,587 | |
Other non-current assets | |
| 165,049 | | |
| 165,158 | | |
| 421,258 | | |
| 450,075 | | |
| 513,405 | | |
| 542,498 | |
Total non-current assets | |
| 19,330,403 | | |
| 19,352,435 | | |
| 8,649,659 | | |
| 9,401,558 | | |
| 27,330,684 | | |
| 28,122,072 | |
Total assets | |
¥ | 20,877,128 | | |
¥ | 20,659,020 | | |
¥ | 13,888,421 | | |
¥ | 14,661,540 | | |
¥ | 34,107,490 | | |
¥ | 34,677,809 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
LIABILITIES AND EQUITY | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Current liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Short-term borrowings | |
¥ | 1,802,337 | | |
¥ | 1,774,775 | | |
¥ | 227,979 | | |
¥ | 263,491 | | |
¥ | 2,030,316 | | |
¥ | 2,038,266 | |
Trade and other payables | |
| 61,153 | | |
| 78,329 | | |
| 2,005,112 | | |
| 2,177,276 | | |
| 2,064,905 | | |
| 2,252,860 | |
Deposits from customers in the banking business | |
| 3,670,567 | | |
| 3,690,958 | | |
| - | | |
| - | | |
| 3,670,567 | | |
| 3,690,958 | |
Income taxes payables | |
| 10,050 | | |
| 2,973 | | |
| 142,024 | | |
| 88,270 | | |
| 152,074 | | |
| 91,243 | |
Participation and residual liabilities in the Pictures segment | |
| - | | |
| - | | |
| 251,743 | | |
| 264,049 | | |
| 251,743 | | |
| 264,049 | |
Other financial liabilities | |
| 77,523 | | |
| 79,926 | | |
| 38,522 | | |
| 50,395 | | |
| 116,044 | | |
| 130,321 | |
Other current liabilities | |
| 209,555 | | |
| 216,797 | | |
| 1,704,158 | | |
| 1,690,500 | | |
| 1,906,396 | | |
| 1,899,211 | |
Total current liabilities | |
| 5,831,185 | | |
| 5,843,758 | | |
| 4,369,538 | | |
| 4,533,981 | | |
| 10,192,045 | | |
| 10,366,908 | |
Non-current liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term debt | |
| 703,106 | | |
| 691,697 | | |
| 1,355,011 | | |
| 1,443,147 | | |
| 2,058,117 | | |
| 2,134,844 | |
Defined benefit liabilities | |
| 39,284 | | |
| 39,221 | | |
| 208,299 | | |
| 213,133 | | |
| 247,583 | | |
| 252,354 | |
Deferred tax liabilities | |
| 36,368 | | |
| 18,599 | | |
| 165,877 | | |
| 179,880 | | |
| 166,424 | | |
| 179,817 | |
Insurance contract liabilities | |
| 12,931,995 | | |
| 12,776,766 | | |
| - | | |
| - | | |
| 12,931,995 | | |
| 12,776,766 | |
Participation and residual liabilities in the Pictures segment | |
| - | | |
| - | | |
| 206,081 | | |
| 220,842 | | |
| 206,081 | | |
| 220,842 | |
Other financial liabilities | |
| 214,414 | | |
| 228,456 | | |
| 175,263 | | |
| 189,688 | | |
| 386,761 | | |
| 415,208 | |
Other non-current liabilities | |
| 7,607 | | |
| 7,557 | | |
| 176,767 | | |
| 196,356 | | |
| 162,379 | | |
| 182,111 | |
Total non-current liabilities | |
| 13,932,774 | | |
| 13,762,296 | | |
| 2,287,298 | | |
| 2,443,046 | | |
| 16,159,340 | | |
| 16,161,942 | |
Total liabilities | |
| 19,763,959 | | |
| 19,606,054 | | |
| 6,656,836 | | |
| 6,977,027 | | |
| 26,351,385 | | |
| 26,528,850 | |
Equity: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stockholders’ equity of Financial Services | |
| 1,113,169 | | |
| 1,052,966 | | |
| - | | |
| - | | |
| - | | |
| - | |
Stockholders’ equity of Sony without Financial Services | |
| - | | |
| - | | |
| 7,062,657 | | |
| 7,393,006 | | |
| - | | |
| - | |
Sony Group Corporation’s stockholders’ equity | |
| - | | |
| - | | |
| - | | |
| - | | |
| 7,587,177 | | |
| 7,857,452 | |
Noncontrolling interests | |
| - | | |
| - | | |
| 168,928 | | |
| 291,507 | | |
| 168,928 | | |
| 291,507 | |
Total equity | |
| 1,113,169 | | |
| 1,052,966 | | |
| 7,231,585 | | |
| 7,684,513 | | |
| 7,756,105 | | |
| 8,148,959 | |
Total liabilities and equity | |
¥ | 20,877,128 | | |
¥ | 20,659,020 | | |
¥ | 13,888,421 | | |
¥ | 14,661,540 | | |
¥ | 34,107,490 | | |
¥ | 34,677,809 | |
Condensed Quarterly Statements of Income
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
Financial Services | | |
Sony without Financial Services | | |
Consolidated | |
| |
2023 | | |
2024 | | |
2023 | | |
2024 | | |
2023 | | |
2024 | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Sales | |
¥ | - | | |
¥ | - | | |
¥ | 2,285,789 | | |
¥ | 2,567,436 | | |
¥ | 2,284,543 | | |
¥ | 2,565,361 | |
Financial services revenue | |
| 681,411 | | |
| 448,595 | | |
| - | | |
| - | | |
| 679,109 | | |
| 446,288 | |
Total sales and financial services revenue | |
| 681,411 | | |
| 448,595 | | |
| 2,285,789 | | |
| 2,567,436 | | |
| 2,963,652 | | |
| 3,011,649 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cost of sales | |
| - | | |
| - | | |
| 1,627,562 | | |
| 1,786,603 | | |
| 1,624,510 | | |
| 1,784,389 | |
Selling, general and administrative | |
| - | | |
| - | | |
| 473,129 | | |
| 543,274 | | |
| 474,939 | | |
| 543,414 | |
Financial services expenses | |
| 626,846 | | |
| 418,561 | | |
| - | | |
| - | | |
| 624,543 | | |
| 416,254 | |
Other operating (income) expense, net | |
| 51 | | |
| 87 | | |
| (8,793 | ) | |
| (9,909 | ) | |
| (8,742 | ) | |
| (9,820 | ) |
Total costs and expenses | |
| 626,897 | | |
| 418,648 | | |
| 2,091,898 | | |
| 2,319,968 | | |
| 2,715,250 | | |
| 2,734,237 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Share of profit (loss) of investments accounted for using the equity method | |
| - | | |
| 38 | | |
| 4,640 | | |
| 1,656 | | |
| 4,640 | | |
| 1,694 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating income | |
| 54,514 | | |
| 29,985 | | |
| 198,531 | | |
| 249,124 | | |
| 253,042 | | |
| 279,106 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Financial income (expenses), net | |
| - | | |
| - | | |
| 73,028 | | |
| 37,761 | | |
| 22,992 | | |
| 37,761 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income before income taxes | |
| 54,514 | | |
| 29,985 | | |
| 271,559 | | |
| 286,885 | | |
| 276,034 | | |
| 316,867 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income taxes | |
| 15,905 | | |
| 8,500 | | |
| 42,187 | | |
| 72,670 | | |
| 58,092 | | |
| 81,039 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| 38,609 | | |
| 21,485 | | |
| 229,372 | | |
| 214,215 | | |
| 217,942 | | |
| 235,828 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income of Financial Services | |
¥ | 38,458 | | |
¥ | 21,485 | | |
¥ | - | | |
¥ | - | | |
¥ | - | | |
¥ | - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income of Sony without Financial Services | |
¥ | - | | |
¥ | - | | |
¥ | 229,126 | | |
¥ | 210,025 | | |
¥ | - | | |
¥ | - | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
income attributable to Sony Group Corporation’s stockholders | |
¥ | - | | |
¥ | - | | |
¥ | - | | |
¥ | - | | |
¥ | 217,545 | | |
¥ | 231,638 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income attributable to noncontrolling interests | |
¥ | 151 | | |
¥ | - | | |
¥ | 246 | | |
¥ | 4,190 | | |
¥ | 397 | | |
¥ | 4,190 | |
Condensed Quarterly Statements of Cash Flows
| |
Yen in millions | |
| |
Three months ended June 30 | |
| |
Financial Services | | |
Sony without Financial Services | | |
Consolidated | |
| |
2023 | | |
2024 | | |
2023 | | |
2024 | | |
2023 | | |
2024 | |
Cash flows from operating activities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income (loss) before income taxes | |
¥ | 54,514 | | |
¥ | 29,985 | | |
¥ | 271,559 | | |
¥ | 286,885 | | |
¥ | 276,034 | | |
¥ | 316,867 | |
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 | |
| 6,915 | | |
| 6,830 | | |
| 244,852 | | |
| 261,674 | | |
| 251,767 | | |
| 268,504 | |
Other operating (income) expense, net | |
| 51 | | |
| 87 | | |
| (8,793 | ) | |
| (9,909 | ) | |
| (8,742 | ) | |
| (9,820 | ) |
(Gain) loss on securities, net (other than Financial Services segment) | |
| - | | |
| - | | |
| (14,189 | ) | |
| (31,406 | ) | |
| (14,189 | ) | |
| (31,406 | ) |
Changes in assets and liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
(Increase) decrease in trade receivables and contract assets | |
| (21,911 | ) | |
| (21,258 | ) | |
| 13,650 | | |
| 186,030 | | |
| (11,342 | ) | |
| 165,792 | |
(Increase) decrease in inventories | |
| - | | |
| - | | |
| (283,152 | ) | |
| (123,840 | ) | |
| (283,152 | ) | |
| (123,840 | ) |
(Increase) decrease in investments and advances in the Financial Services segment | |
| (560,038 | ) | |
| (633,041 | ) | |
| - | | |
| - | | |
| (560,038 | ) | |
| (633,041 | ) |
(Increase) decrease in content assets | |
| - | | |
| - | | |
| (137,465 | ) | |
| (257,588 | ) | |
| (137,465 | ) | |
| (257,588 | ) |
Increase (decrease) in trade payables | |
| (3,391 | ) | |
| 21,238 | | |
| 174,965 | | |
| 112,972 | | |
| 174,512 | | |
| 132,780 | |
Increase (decrease) in insurance contract liabilities, net of insurance contract assets | |
| 561,732 | | |
| 341,752 | | |
| - | | |
| - | | |
| 561,732 | | |
| 341,752 | |
Increase (decrease) in deposits from customers in the banking business | |
| 144,119 | | |
| 35,540 | | |
| - | | |
| - | | |
| 144,119 | | |
| 35,540 | |
Increase (decrease) in borrowings in the life insurance business and the banking business | |
| (54,691 | ) | |
| (41,126 | ) | |
| - | | |
| - | | |
| (54,691 | ) | |
| (41,126 | ) |
Increase (decrease) in taxes payable other than income taxes, net | |
| 27,995 | | |
| 73 | | |
| (7,981 | ) | |
| (3,966 | ) | |
| 20,014 | | |
| (3,893 | ) |
Other | |
| (37,230 | ) | |
| (13,287 | ) | |
| (334,115 | ) | |
| (273,888 | ) | |
| (371,228 | ) | |
| (286,806 | ) |
Net cash provided by (used in) operating activities | |
| 118,065 | | |
| (273,207 | ) | |
| (80,669 | ) | |
| 146,964 | | |
| (12,669 | ) | |
| (126,285 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Payments for property, plant and equipment and other intangible assets | |
| (5,602 | ) | |
| (7,613 | ) | |
| (124,929 | ) | |
| (204,212 | ) | |
| (130,501 | ) | |
| (211,780 | ) |
Payments for investments and advances (other than Financial Services segment) | |
| - | | |
| - | | |
| (21,319 | ) | |
| (15,747 | ) | |
| (21,319 | ) | |
| (15,747 | ) |
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment) | |
| - | | |
| - | | |
| 4,410 | | |
| 30,896 | | |
| 4,410 | | |
| 30,896 | |
Other | |
| 1 | | |
| (182 | ) | |
| (51,238 | ) | |
| (162,309 | ) | |
| (51,237 | ) | |
| (162,491 | ) |
Net cash provided by (used in) investing activities | |
| (5,601 | ) | |
| (7,795 | ) | |
| (193,076 | ) | |
| (351,372 | ) | |
| (198,647 | ) | |
| (359,122 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Increase (decrease) in borrowings, net | |
| (2,671 | ) | |
| (2,614 | ) | |
| 273,895 | | |
| 3,783 | | |
| 271,224 | | |
| 1,168 | |
Dividends paid | |
| (50,037 | ) | |
| - | | |
| (48,955 | ) | |
| (54,451 | ) | |
| (48,955 | ) | |
| (54,451 | ) |
Other | |
| (1 | ) | |
| 118 | | |
| (8,399 | ) | |
| 54,699 | | |
| (8,402 | ) | |
| 54,815 | |
Net cash provided by (used in) financing activities | |
| (52,709 | ) | |
| (2,496 | ) | |
| 216,541 | | |
| 4,031 | | |
| 213,867 | | |
| 1,532 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Effect of exchange rate changes on cash and cash equivalents | |
| - | | |
| - | | |
| 48,648 | | |
| 53,860 | | |
| 48,648 | | |
| 53,860 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net increase (decrease) in cash and cash equivalents | |
| 59,755 | | |
| (283,498 | ) | |
| (8,556 | ) | |
| (146,517 | ) | |
| 51,199 | | |
| (430,015 | ) |
Cash and cash equivalents at beginning of the fiscal year | |
| 756,493 | | |
| 913,815 | | |
| 724,407 | | |
| 993,298 | | |
| 1,480,900 | | |
| 1,907,113 | |
Cash and cash equivalents at end of the period | |
¥ | 816,248 | | |
¥ | 630,317 | | |
¥ | 715,851 | | |
¥ | 846,781 | | |
¥ | 1,532,099 | | |
¥ | 1,477,098 | |
Going Concern Assumption
Not Applicable
Accounting Policy and Other Information
(Changes in accounting policies)
Sony newly adopted
the following accounting standards from the fiscal year ending March 31, 2025:
Amendments to IAS 1 “Presentation
of Financial Statements”
In January 2020,
the International Accounting Standards Board (“IASB”) issued “Classification of Liabilities as Current or Non-current
(Amendments to IAS 1).” The amendments clarify the right of a company to defer settlement of a liability, which is one of the existing
requirements when classifying a liability to current or non-current. In addition, in October 2022, the IASB issued “A Non-current
Liability with Covenants (Amendments to IAS 1).” The amendments require companies to disclose information about covenants in order
for investors to understand the risk that such non-current debt with covenants could become repayable within twelve months. Both of these
amendments were effective for Sony as of April 1, 2024. The adoption of these amendments has no material impact on Sony’s results
of operations and financial position.
Amendments to IAS 7 “Statement
of Cash Flows” and IFRS 7 “Financial Instruments: Disclosures”
In May 2023,
the IASB issued “Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7).” These amendments require companies to disclose
information about supplier finance arrangements and were effective for Sony as of April 1, 2024. Since these amendments only affect
disclosures, they have no impact on Sony’s results of operations and financial position.
(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 | |
| |
2023 | | |
2024 | |
Net income attributable to Sony Group Corporation’s stockholders for basic and diluted EPS computation | |
| 217,545 | | |
| 231,638 | |
| |
Thousands of shares | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | |
Weighted-average shares outstanding for basic EPS computation | |
| 1,234,242 | | |
| 1,219,770 | |
Effect of dilutive securities: | |
| | | |
| | |
Stock options | |
| 3,909 | | |
| 2,787 | |
Restricted stock units | |
| 212 | | |
| 249 | |
Weighted-average shares for diluted EPS computation | |
| 1,238,363 | | |
| 1,222,806 | |
(Segmentation)
The G&NS segment
includes the network services businesses, the manufacture and sales of home gaming products and the production and sales of digital software
and add-on content. 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 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.
(Supplemental cash flow information)
During the three months ended June 30,
2024, Sony established a new joint venture in the Music segment with a third party partner, which acquired interests in companies that
own certain music and other assets (the “target companies”), and Sony also acquired music assets directly from other rights
holders. Sony consolidated the joint venture through Sony’s majority interest and reflected the consideration of 133,064 million
yen for the acquisition of the interests in the target companies in cash flows from investing activities as “Payments for purchases
of businesses and other.” Sony primarily recognized 116,289 million yen of content assets (music catalogs) and 11,501 million yen
of other intangible assets from the acquisition of the interests in the target companies. The acquisition of the interests in the target
companies is accounted for as an acquisition of a group of assets that does not constitute a business. The content assets (music catalogs)
directly acquired from other rights holders were recorded in cash flows from operating activities as “Increase in content assets.”
(Stock Split)
Sony
Group Corporation approved the implementation of a stock split of its common stock as follows at the meeting of its Board of Directors
held on May 14, 2024.
1.
Method of Stock Split
Each
share of Sony Group Corporation’s common stock owned by shareholders whose names appear on the register of shareholders as
of the close of the record date of September 30, 2024, will be split into five (5) shares per share.
2. Number of shares
to be increased by Stock Split
(i) Total number of issued shares before stock split: |
1,248,619,589 shares |
|
(ii) Number of shares to be increased by stock split: |
4,994,478,356 shares |
|
(iii) Total number of issued shares following stock split: |
6,243,097,945 shares |
|
(iv) Total number of authorized shares following stock split: |
18,000,000,000 shares |
|
| * | Total number of issued shares shown above is based on the total
number of issued shares as of July 31, 2024, and may increase by the record date of the stock split due to the exercise of stock
acquisition rights. |
3. Schedule of
Stock Split
(i) Public notice of record date: |
September 13, 2024 |
|
(ii) Record date: |
September 30, 2024 |
|
(iii) Effective date: |
October 1, 2024 |
|
4. Partial Amendment to Articles of
Incorporation
Sony Group Corporation plans to amend
its Articles of Incorporation to increase the total number of shares authorized to be issued by Sony Group Corporation from 3.6 billion
to 18.0 billion, in accordance with Article 184, Paragraph 2 of the Companies Act of Japan, effective on October 1, 2024, which
is the effective date of the stock split.
5. Impact on per
share information
Per share information assuming that
the stock split was implemented at the beginning of the three months ended June 30, 2023, would be as follows.
| |
Yen | |
| |
Three months ended June 30 | |
| |
2023 | | |
2024 | |
Basic net income attributable to Sony Group Corporation’s stockholders per share | |
| 35.25 | | |
| 37.98 | |
Diluted net income attributable to Sony Group Corporation’s stockholders per share | |
| 35.13 | | |
| 37.89 | |
Overview of Operating Results
For the overview of operating
results for the three months ended June 30, 2024, including the forecast for the fiscal year ending March 31, 2025, please refer
to “Q1 FY2024 Consolidated Financial Results” (the presentation material for the earnings announcement) disclosed on the same
date as this document on the TDnet of the TSE, the EDGAR system of the U.S. SEC and the website of Sony Group Corporation.
Cautionary Statement
Statements made in this material 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 equity and bond
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.
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