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 February 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,
Form 20-F X | Form 40-F __ |
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______
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: February 14, 2024
List of materials
Documents attached hereto:
i) Press release: Quarterly Financial Statements for the Third Quarter Ended December 31, 2023 And Outlook for the Fiscal Year Ending March 31, 2024
Results for Adjusted OIBDA and Adjusted EBITDA for the Three and Nine Months Ended December 31, 2023
Sony has established three-year cumulative Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) as the most important financial performance indicator (Group KPI) in the Fourth Mid-Range Plan for the three fiscal years starting on April 1, 2021 and ending on March 31, 2024. Starting in the three months ended June 30, 2023, Sony has disclosed the actual results for Adjusted EBITDA on a consolidated basis, which is the Group KPI, and Adjusted OIBDA (Operating Income Before Depreciation and Amortization) by segment.
The actual results for Segment Adjusted OIBDA and Consolidated Adjusted EBITDA for the three and nine months ended December 31, 2023 are as follows:
Adjusted OIBDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that these disclosures may be useful information to investors. Please refer to “Supplemental Information” on pages 5 to 11 for more details, including the formulas and reconciliations for Adjusted OIBDA and Adjusted EBITDA (the same applies below).
Three months ended December 31, 2023
(Yen in billions) | ||||||||
Three months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Segment Adjusted OIBDA | ||||||||
Game & Network Services (G&NS) | 139.9 | 113.1 | ||||||
Music | 78.6 | 98.5 | ||||||
Pictures | 38.2 | 54.6 | ||||||
Entertainment, Technology & Services (ET&S) | 105.3 | 103.4 | ||||||
Imaging & Sensing Solutions (I&SS) | 134.7 | 163.7 | ||||||
Financial Services | 53.8 | 84.3 | ||||||
All Other, Corporate and elimination | 11.0 | 10.6 | ||||||
Consolidated Adjusted OIBDA | 561.5 | 628.3 | ||||||
Consolidated Adjusted EBITDA* | 529.5 | 605.0 |
Nine months ended December 31, 2023
(Yen in billions) | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Segment Adjusted OIBDA | ||||||||
Game & Network Services (G&NS) | 274.3 | 272.1 | ||||||
Music | 240.9 | 278.5 | ||||||
Pictures | 140.5 | 125.6 | ||||||
Entertainment, Technology & Services (ET&S) | 284.8 | 271.8 | ||||||
Imaging & Sensing Solutions (I&SS) | 324.2 | 340.9 | ||||||
Financial Services | 263.8 | 168.4 | ||||||
All Other, Corporate and elimination | (0.9 | ) | (7.0 | ) | ||||
Consolidated Adjusted OIBDA | 1,527.5 | 1,450.3 | ||||||
Consolidated Adjusted EBITDA* | 1,513.5 | 1,437.6 |
* The differences between Adjusted EBITDA and Adjusted OIBDA on a consolidated basis represent financial income and financial expenses (excluding interest expenses, net, and gains on revaluation of equity instruments, net) (the same applies below). Adjusted EBITDA by segment is not calculated and disclosed because Sony does not include financial income and financial expenses in its performance evaluations by segment, mainly due to the fact that Sony manages its foreign exchange exposure centrally and globally, except for the Financial Services segment.
- 1 -
Outlook for the Fiscal Year Ending March 31, 2024
The forecast for consolidated results for the fiscal year ending March 31, 2024, as announced on November 9, 2023, has been revised as follows:
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||||||||||||||
March 31, 2023 Results Restated | November Forecast | February Forecast | Change from November Forecast | |||||||||||||||||
Sales *1 | 10,974.4 | 12,400 | 12,300 | -100 bil | -0.8 | % | ||||||||||||||
Operating income | 1,302.4 | 1,170 | 1,180 | +10 bil | +0.9 | % | ||||||||||||||
Income before income taxes | 1,274.5 | 1,160 | 1,190 | +30 bil | +2.6 | % | ||||||||||||||
Net income attributable to Sony Group Corporation’s stockholders | 1,005.3 | 880 | 920 | +40 bil | +4.5 | % | ||||||||||||||
Adjusted OIBDA | 1,816.9 | 1,785 | 1,785 | - | - | |||||||||||||||
Adjusted EBITDA | 1,797.6 | 1,785 | 1,770 | -15 bil | -0.8 | % | ||||||||||||||
For all segments excluding the Financial Services segment *2 | March 31, 2023 Results | November Forecast | February Forecast | Change from August Forecast | ||||||||||||||||
Net cash provided by operating activities | 415.5 | 1,160 | 1,080 | -80 bil | -6.9 | % |
*1 “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).
*2 Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-16 for details about the preparation of the Condensed Statements of Cash Flows.
Assumed foreign exchange rates are the following:
Assumed foreign exchange rates for the three months ending March 31, 2024 | (For your reference) Assumed foreign exchange rates for the fiscal year ending March 31, 2024 at the time of the November forecast | |
1 U.S. dollar | approximately 142 yen | approximately 142 yen |
1 Euro | approximately 153 yen | approximately 152 yen |
Sales are expected to be lower than the November forecast mainly due to lower-than-expected sales in the Game & Network Services segment, partially offset mainly by higher-than-expected sales in the Financial Services segment.
Operating income is expected to be higher than the November forecast due to an expected increase in operating income in the Financial Services segment, partially offset by an expected increase in the operating loss in All Other, Corporate and elimination.
Both income before income taxes and net income attributable to Sony Group Corporation’s stockholders are expected to be higher than the November forecast mainly due to the above-mentioned expected increase in operating income as well as an expected increase in financial income, net, primarily resulting from the recording of unrealized gains on securities.
Adjusted OIBDA is expected to remain unchanged from the November forecast due to an expected increase in Adjusted OIBDA in the Music segment, substantially offset by an expected increase in Adjusted OIBDA loss in All Other, Corporate and elimination. Adjusted EBITDA is expected to be lower than the November forecast mainly due to an expected increase in net foreign exchange losses recorded within financial expenses, net.
- 2 -
The forecast for each business segment for the fiscal year ending March 31, 2024 has been revised as follows:
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
Please refer to “Supplemental Information” on pages 5 to 11 for details of the reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||||||
March 31, 2023 Results Restated | November Forecast | February Forecast | ||||||||||
Game & Network Services (G&NS) | ||||||||||||
Sales | 3,644.6 | 4,360 | 4,150 | |||||||||
Operating income | 250.0 | 270 | 270 | |||||||||
Adjusted OIBDA | 337.0 | 385 | 385 | |||||||||
Music | ||||||||||||
Sales | 1,380.6 | 1,560 | 1,570 | |||||||||
Operating income | 263.1 | 295 | 295 | |||||||||
Adjusted OIBDA | 316.4 | 350 | 360 | |||||||||
Pictures | ||||||||||||
Sales | 1,369.4 | 1,460 | 1,470 | |||||||||
Operating income | 119.3 | 115 | 115 | |||||||||
Adjusted OIBDA | 168.2 | 165 | 165 | |||||||||
Entertainment, Technology & Services (ET&S) | ||||||||||||
Sales | 2,476.0 | 2,440 | 2,430 | |||||||||
Operating income | 179.5 | 180 | 180 | |||||||||
Adjusted OIBDA | 276.9 | 280 | 280 | |||||||||
Imaging & Sensing Solutions (I&SS) | ||||||||||||
Sales | 1,402.2 | 1,590 | 1,590 | |||||||||
Operating income | 212.2 | 195 | 195 | |||||||||
Adjusted OIBDA | 408.9 | 440 | 440 | |||||||||
Financial Services | ||||||||||||
Financial services revenue | 889.1 | 1,210 | 1,300 | |||||||||
Operating income | 318.1 | 155 | 175 | |||||||||
Adjusted OIBDA | 322.4 | 180 | 180 | |||||||||
All Other, Corporate and elimination | ||||||||||||
Operating loss | (39.8 | ) | (40 | ) | (50 | ) | ||||||
Adjusted OIBDA | (12.9 | ) | (15 | ) | (25 | ) | ||||||
Consolidated | ||||||||||||
Sales | 10,974.4 | 12,400 | 12,300 | |||||||||
Operating income | 1,302.4 | 1,170 | 1,180 | |||||||||
Adjusted OIBDA | 1,816.9 | 1,785 | 1,785 | |||||||||
Adjusted EBITDA | 1,797.6 | 1,785 | 1,770 |
- 3 -
Game & Network Services (G&NS)
Sales are expected to be lower than the November forecast, mainly due to an expected decrease in sales of hardware resulting from lower unit sales, partially offset by the impact of foreign exchange rates and an expected increase in sales of non-first-party titles including add-on content. Operating income and Adjusted OIBDA are expected to remain unchanged from the November forecast mainly due to the impact of the above-mentioned increase in sales of non-first-party titles, substantially offset by an expected increase in losses from hardware mainly due to promotions.
Music
Sales are expected to be higher than the November forecast primarily due to the impact of foreign exchange rates. Operating income is expected to remain unchanged from the November forecast primarily due to an improvement in profitability, substantially offset by an increase in depreciation and amortization expenses. Adjusted OIBDA is expected to be higher than the November forecast, mainly due to the same factors affecting operating income, excluding the above-mentioned increase in depreciation and amortization expenses.
Pictures
Sales are expected to be higher than the November forecast, primarily due to the impact of foreign exchange rates. Operating income and Adjusted OIBDA are expected to remain unchanged from the November forecast.
Entertainment, Technology & Services (ET&S)
Sales are expected to be lower than the November forecast due to an expected decrease in sales of televisions resulting from lower unit sales, partially offset by the impact of foreign exchange rates. Operating income and Adjusted OIBDA are expected to remain unchanged from the November forecast mainly due to the impact of the above-mentioned lower unit sales of televisions, substantially offset by expected reductions in operating expenses.
Imaging & Sensing Solutions (I&SS)
Sales are expected to remain unchanged from the November forecast mainly due to the impact of foreign exchange rates, substantially offset by an expected decrease in sales in businesses other than image sensors. Operating income and Adjusted OIBDA are expected to remain unchanged from the November forecast mainly due to the positive impact of foreign exchange rates, substantially offset by an increase in costs and the impact of the above-mentioned expected decrease in sales.
Financial Services
Financial services revenue is expected to be higher than the November forecast primarily due to an increase in net gains on investment in the separate accounts at Sony Life Insurance Co., Ltd. (“Sony Life”). Operating income is expected to be higher than the November forecast mainly due to the expected recording of a gain from the transfer of a portion of shares of Sony Payment Services Inc. in the three months ending March 31, 2024. Adjusted OIBDA is expected to remain unchanged from the November forecast.
The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future. Accordingly, future market fluctuations could further impact the above forecast.
- 4 -
The above forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances. Actual results may differ materially from those included in this forecast due to a variety of factors. See “Cautionary Statement” below.
Notes about Financial Performance of the Music, Pictures and Financial Services segments
The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.
The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.
The Financial Services segment results include Sony Financial Group Inc. (“SFGI”) and SFGI’s consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. The results discussed in the Financial Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.
Supplemental Information
Regarding Adjusted OIBDA and Adjusted EBITDA
Sony believes that Adjusted OIBDA and Adjusted EBITDA are performance metrics suitable for the long-term management that Sony prioritizes. This is because (i) they represent the sustainable earnings power of the business as they do not include the effects of one-time gains and losses, (ii) they enable management to confirm that all the businesses of the Sony Group, including the Financial Services business, are expanding over the mid- to long-term through cycles of investment and return, and (iii) they are often used to calculate corporate value. Adjusted OIBDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that these disclosures may be useful information to investors. Adjusted OIBDA and Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results in accordance with IFRS.
Adjusted OIBDA (Operating Income Before Depreciation and Amortization) is calculated by the following formula:
Adjusted OIBDA = Operating income + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by the following formula:
Adjusted EBITDA = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense - Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring
- 5 -
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the three months ended December 31, 2022 and 2023, respectively.
As the results for the three months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||
Three months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Game & Network Services (G&NS) | ||||||||
Operating income | 116.2 | 86.1 | ||||||
Depreciation and amortization expense* | 23.7 | 27.0 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 139.9 | 113.1 | ||||||
Music | ||||||||
Operating income | 63.0 | 76.1 | ||||||
Depreciation and amortization expense* | 15.7 | 22.4 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 78.6 | 98.5 | ||||||
Pictures | ||||||||
Operating income | 25.4 | 41.6 | ||||||
Depreciation and amortization expense* | 12.8 | 12.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 38.2 | 54.6 | ||||||
Entertainment, Technology & Services (ET&S) | ||||||||
Operating income | 81.1 | 77.2 | ||||||
Depreciation and amortization expense* | 24.2 | 26.2 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 105.3 | 103.4 | ||||||
Imaging & Sensing Solutions (I&SS) | ||||||||
Operating income | 84.9 | 99.7 | ||||||
Depreciation and amortization expense* | 49.8 | 64.0 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 134.7 | 163.7 | ||||||
Financial Services | ||||||||
Operating income | 47.1 | 77.3 | ||||||
Depreciation and amortization expense* | 6.7 | 7.0 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 53.8 | 84.3 | ||||||
All Other, Corporate and elimination | ||||||||
Operating loss | 3.9 | 5.3 | ||||||
Depreciation and amortization expense* | 7.1 | 5.3 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 11.0 | 10.6 | ||||||
Consolidated | ||||||||
Operating income | 421.6 | 463.3 | ||||||
Depreciation and amortization expense* | 139.9 | 164.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 561.5 | 628.3 |
- 6 -
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the three months ended December 31, 2022 and 2023, respectively.
As the results for the three months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||
Three months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Net income attributable to Sony Group Corporation’s stockholders | 321.5 | 363.9 | ||||||
Net income attributable to noncontrolling interests | 1.7 | 3.5 | ||||||
Income taxes | 68.2 | 91.2 | ||||||
Interest expenses, net, recorded in Financial income and Financial expense | 0.5 | 2.1 | ||||||
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense | (2.3 | ) | (20.6 | ) | ||||
Depreciation and amortization expense* | 139.9 | 164.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted EBITDA | 529.5 | 605.0 |
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** There were no items which Sony deemed non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the three months ended December 31, 2022 and 2023, respectively.
- 7 -
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the nine months ended December 31, 2022 and 2023, respectively.
As the results for the nine months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Game & Network Services (G&NS) | ||||||||
Operating income | 211.1 | 184.2 | ||||||
Depreciation and amortization expense* | 63.2 | 87.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 274.3 | 272.1 | ||||||
Music | ||||||||
Operating income | 202.7 | 230.5 | ||||||
Depreciation and amortization expense* | 43.9 | 54.1 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | (5.7 | ) | (6.0 | ) | ||||
Adjusted OIBDA | 240.9 | 278.5 | ||||||
Pictures | ||||||||
Operating income | 103.7 | 87.0 | ||||||
Depreciation and amortization expense* | 36.7 | 38.5 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 140.5 | 125.6 | ||||||
Entertainment, Technology & Services (ET&S) | ||||||||
Operating income | 212.5 | 193.8 | ||||||
Depreciation and amortization expense* | 72.3 | 78.0 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 284.8 | 271.8 | ||||||
Imaging & Sensing Solutions (I&SS) | ||||||||
Operating income | 180.5 | 158.8 | ||||||
Depreciation and amortization expense* | 143.6 | 182.1 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | 324.2 | 340.9 | ||||||
Financial Services | ||||||||
Operating income | 266.3 | 147.5 | ||||||
Depreciation and amortization expense* | 19.6 | 20.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | (22.1 | ) | - | |||||
Adjusted OIBDA | 263.8 | 168.4 | ||||||
All Other, Corporate and elimination | ||||||||
Operating loss | (21.0 | ) | (22.4 | ) | ||||
Depreciation and amortization expense* | 20.1 | 15.5 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | - | - | ||||||
Adjusted OIBDA | (0.9 | ) | (7.0 | ) | ||||
Consolidated | ||||||||
Operating income | 1,155.8 | 979.4 | ||||||
Depreciation and amortization expense* | 399.4 | 476.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | (27.8 | ) | (6.0 | ) | ||||
Adjusted OIBDA | 1,527.5 | 1,450.3 |
- 8 -
The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the nine months ended December 31, 2022 and 2023, respectively.
As the results for the nine months ended December 31, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the third quarter of the fiscal year ended March 31, 2023.
(Yen in billions) | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Net income attributable to Sony Group Corporation’s stockholders | 864.3 | 781.6 | ||||||
Net income attributable to noncontrolling interests | 5.5 | 4.9 | ||||||
Income taxes | 242.0 | 205.7 | ||||||
Interest expenses, net, recorded in Financial income and Financial expense | 2.7 | 4.7 | ||||||
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense | 27.4 | (30.2 | ) | |||||
Depreciation and amortization expense* | 399.4 | 476.9 | ||||||
(Profit) / loss amount that Sony deems non-recurring** | (27.8 | ) | (6.0 | ) | ||||
Adjusted EBITDA | 1,513.5 | 1,437.6 |
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the nine months ended December 31, 2022 and 2023, respectively.
(Yen in billions) | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
(Profit) / loss amount that Sony deems non-recurring | ||||||||
Impact of litigation settlements, net of expenses, received in relation to lawsuits for Recorded Music and Music Publishing (Music segment) | (5.7 | ) | - | |||||
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the three months ended June 30, 2021 (Financial Services segment) | (22.1 | ) | - | |||||
Remeasurement gain resulting from the consolidation of a company previously accounted for using the equity method (Music segment) | - | (6.0 | ) | |||||
Total | (27.8 | ) | (6.0 | ) |
- 9 -
The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31, 2023.
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
(Yen in billions) | ||||
Fiscal year ended March 31, 2023 | ||||
Restated | ||||
Game & Network Services (G&NS) | ||||
Operating income | 250.0 | |||
Depreciation and amortization expense* | 87.0 | |||
(Profit) / loss amount that Sony deems non-recurring** | - | |||
Adjusted OIBDA | 337.0 | |||
Music | ||||
Operating income | 263.1 | |||
Depreciation and amortization expense* | 59.0 | |||
(Profit) / loss amount that Sony deems non-recurring** | (5.7 | ) | ||
Adjusted OIBDA | 316.4 | |||
Pictures | ||||
Operating income | 119.3 | |||
Depreciation and amortization expense* | 48.9 | |||
(Profit) / loss amount that Sony deems non-recurring** | - | |||
Adjusted OIBDA | 168.2 | |||
Entertainment, Technology & Services (ET&S) | ||||
Operating income | 179.5 | |||
Depreciation and amortization expense* | 97.4 | |||
(Profit) / loss amount that Sony deems non-recurring** | - | |||
Adjusted OIBDA | 276.9 | |||
Imaging & Sensing Solutions (I&SS) | ||||
Operating income | 212.2 | |||
Depreciation and amortization expense* | 196.7 | |||
(Profit) / loss amount that Sony deems non-recurring** | - | |||
Adjusted OIBDA | 408.9 | |||
Financial Services | ||||
Operating income | 318.1 | |||
Depreciation and amortization expense* | 26.3 | |||
(Profit) / loss amount that Sony deems non-recurring** | (22.1 | ) | ||
Adjusted OIBDA | 322.4 | |||
All Other, Corporate and elimination | ||||
Operating loss | (39.8 | ) | ||
Depreciation and amortization expense* | 26.8 | |||
(Profit) / loss amount that Sony deems non-recurring** | - | |||
Adjusted OIBDA | (12.9 | ) | ||
Consolidated | ||||
Operating income | 1,302.4 | |||
Depreciation and amortization expense* | 542.2 | |||
(Profit) / loss amount that Sony deems non-recurring** | (27.8 | ) | ||
Adjusted OIBDA | 1,816.9 |
- 10 -
The following table shows a reconciliation of Adjusted EBITDA from net income attributable to Sony Group Corporation’s stockholders in accordance with IFRS for the fiscal year ended March 31, 2023.
As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
(Yen in billions) | ||||
Fiscal year ended March 31, 2023 | ||||
Restated | ||||
Net income attributable to Sony Group Corporation’s stockholders | 1,005.3 | |||
Net income attributable to noncontrolling interests | 6.5 | |||
Income taxes | 262.7 | |||
Interest expenses, net, recorded in Financial income and Financial expense | 4.0 | |||
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense | 4.6 | |||
Depreciation and amortization expense* | 542.2 | |||
(Profit) / loss amount that Sony deems non-recurring** | (27.8 | ) | ||
Adjusted EBITDA | 1,797.6 |
* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the fiscal year ended March 31, 2023.
(Yen in billions) | ||||
Fiscal year ended March 31, 2023 | ||||
Restated | ||||
(Profit) / loss amount that Sony deems non-recurring | ||||
Impact of litigation settlements, net of expenses, received in relation to lawsuits for Recorded Music and Music Publishing (Music segment) | (5.7 | ) | ||
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the three months ended June 30, 2021 (Financial Services segment) | (22.1 | ) | ||
Total | (27.8 | ) |
- 11 -
Cautionary Statement
Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:
(i) | Sony’s ability to maintain product quality and customer satisfaction with its products and services; |
(ii) | Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing customer preferences; |
(iii) | Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms; |
(iv) | the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives; |
(v) | changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility; |
(vi) | Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity; |
(vii) | Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations; |
(viii) | the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending; |
(ix) | Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade; |
(x) | Sony’s ability to forecast demands, manage timely procurement and control inventories; |
(xi) | foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets, liabilities and operating results are denominated; |
(xii) | Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel; |
(xiii) | Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others; |
(xiv) | the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment; |
(xv) | shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment; |
(xvi) | risks related to catastrophic disasters, geopolitical conflicts, pandemic disease or similar events; |
(xvii) | the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and |
(xviii) | the outcome of pending and/or future legal and/or regulatory proceedings. |
Risks and uncertainties also include the impact of any future events with material adverse impact. The continued impact of developments relating to the situations in Ukraine and Russia and in the Middle East could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
- 12 -
Quarterly Financial Statements
for the Third Quarter Ended December 31, 2023
And
Outlook for the Fiscal Year Ending March 31, 2024
February 14, 2024
Sony Group Corporation
Quarterly Financial Statements (Unaudited) | F-1 |
Condensed Consolidated Statements of Financial Position | F-1 |
Condensed Consolidated Statements of Income (Three months ended December 31) | F-3 |
Condensed Consolidated Statements of Comprehensive Income (Three months ended December 31) | F-4 |
Condensed Consolidated Statements of Income (Nine months ended December 31) | F-5 |
Condensed Consolidated Statements of Comprehensive Income (Nine months ended December 31) | F-6 |
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Nine months ended December 31) | F-7 |
Condensed Consolidated Statements of Cash Flows (Nine months ended December 31) | F-8 |
Notes to Condensed Consolidated Financial Statements | F-10 |
- Business Segment Information | F-10 |
- Going Concern Assumption | F-20 |
- Accounting Policy and Other Information | F-20 |
- Subsequent Events | F-22 |
Results for Adjusted OIBDA and Adjusted EBITDA for the Three and Nine Months Ended December 31, 2023 | 1 |
Outlook for the Fiscal Year Ending March 31, 2024 | 2 |
Supplemental Information | 5 |
Cautionary Statement | 12 |
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”.
Sony has adopted IFRS 17 “Insurance Contracts” (“IFRS 17”) starting in the three months ended June 30, 2023. Figures for the three and nine months ended December 31, 2022 and for the fiscal year ended March 31, 2023, as well as the condensed consolidated statement of financial position as of April 1, 2022, are restated in accordance with IFRS 17. Please refer to “Notes to Condensed Consolidated Financial Statements - Accounting Policy and Other Information (Changes in accounting policies)” on page F-20 for more details.
- 13 -
(Unaudited)
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Position
Yen in millions | ||||||||||||||||
April 1, 2022 Restated | March 31, 2023 Restated | December 31, 2023 | Change from March 31, 2023 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | 2,049,636 | 1,480,900 | 2,019,112 | 538,212 | ||||||||||||
Investments and advances in the Financial Services segment | 360,681 | 328,358 | 455,427 | 127,069 | ||||||||||||
Trade and other receivables, and contract assets | 1,621,629 | 1,770,948 | 2,410,040 | 639,092 | ||||||||||||
Inventories | 874,007 | 1,468,042 | 1,629,886 | 161,844 | ||||||||||||
Other financial assets | 149,301 | 110,950 | 132,235 | 21,285 | ||||||||||||
Other current assets | 428,522 | 563,334 | 722,214 | 158,880 | ||||||||||||
Total current assets | 5,483,776 | 5,722,532 | 7,368,914 | 1,646,382 | ||||||||||||
Non-current assets: | ||||||||||||||||
Investments accounted for using the equity method | 268,513 | 325,220 | 406,024 | 80,804 | ||||||||||||
Investments and advances in the Financial Services segment | 18,251,612 | 18,237,761 | 18,370,584 | 132,823 | ||||||||||||
Property, plant and equipment | 1,113,213 | 1,344,864 | 1,491,920 | 147,056 | ||||||||||||
Right-of-use assets | 413,430 | 478,063 | 470,230 | (7,833 | ) | |||||||||||
Goodwill | 952,895 | 1,275,112 | 1,394,865 | 119,753 | ||||||||||||
Content assets | 1,342,046 | 1,561,882 | 1,807,713 | 245,831 | ||||||||||||
Other intangible assets | 450,103 | 563,842 | 586,812 | 22,970 | ||||||||||||
Deferred tax assets | 300,924 | 393,107 | 462,062 | 68,955 | ||||||||||||
Other financial assets | 696,306 | 832,344 | 825,313 | (7,031 | ) | |||||||||||
Other non-current assets | 379,137 | 419,368 | 459,188 | 39,820 | ||||||||||||
Total non-current assets | 24,168,179 | 25,431,563 | 26,274,711 | 843,148 | ||||||||||||
Total assets | 29,651,955 | 31,154,095 | 33,643,625 | 2,489,530 |
(Continued on the following page.)
F-1
Condensed Consolidated Statements of Financial Position (Continued)
Yen in millions | ||||||||||||||||
April 1, 2022 Restated | March 31, 2023 Restated | December 31, 2023 | Change from March 31, 2023 | |||||||||||||
LIABILITIES | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Short-term borrowings | 1,976,553 | 1,914,934 | 2,374,858 | 459,924 | ||||||||||||
Current portion of long-term debt | 171,409 | 187,942 | 190,671 | 2,729 | ||||||||||||
Trade and other payables | 1,843,338 | 1,866,101 | 2,244,832 | 378,731 | ||||||||||||
Deposits from customers in the banking business | 2,886,361 | 3,163,237 | 3,561,499 | 398,262 | ||||||||||||
Income taxes payables | 105,437 | 154,543 | 134,521 | (20,022 | ) | |||||||||||
Participation and residual liabilities in the Pictures segment | 190,162 | 230,223 | 233,435 | 3,212 | ||||||||||||
Other financial liabilities | 127,079 | 108,049 | 112,429 | 4,380 | ||||||||||||
Other current liabilities | 1,465,326 | 1,693,380 | 1,834,500 | 141,120 | ||||||||||||
Total current liabilities | 8,765,665 | 9,318,409 | 10,686,745 | 1,368,336 | ||||||||||||
Non-current liabilities: | ||||||||||||||||
Long-term debt | 1,203,646 | 1,767,696 | 1,840,067 | 72,371 | ||||||||||||
Defined benefit liabilities | 254,548 | 236,121 | 243,108 | 6,987 | ||||||||||||
Deferred tax liabilities | 120,582 | 117,621 | 133,762 | 16,141 | ||||||||||||
Insurance contract liabilities | 13,042,875 | 12,364,973 | 12,571,220 | 206,247 | ||||||||||||
Participation and residual liabilities in the Pictures segment | 220,113 | 192,952 | 184,953 | (7,999 | ) | |||||||||||
Other financial liabilities | 231,463 | 371,580 | 371,758 | 178 | ||||||||||||
Other non-current liabilities | 106,481 | 127,593 | 143,299 | 15,706 | ||||||||||||
Total non-current liabilities | 15,179,708 | 15,178,536 | 15,488,167 | 309,631 | ||||||||||||
Total liabilities | 23,945,373 | 24,496,945 | 26,174,912 | 1,677,967 | ||||||||||||
EQUITY | ||||||||||||||||
Sony Group Corporation’s stockholders’ equity: | ||||||||||||||||
Common stock | 880,365 | 880,365 | 881,357 | 992 | ||||||||||||
Additional paid-in capital | 1,461,053 | 1,463,807 | 1,482,460 | 18,653 | ||||||||||||
Retained earnings | 4,170,417 | 5,092,442 | 5,775,372 | 682,930 | ||||||||||||
Accumulated other comprehensive income | (677,989 | ) | (614,570 | ) | (548,960 | ) | 65,610 | |||||||||
Treasury stock, at cost | (180,042 | ) | (223,507 | ) | (282,064 | ) | (58,557 | ) | ||||||||
Equity attributable to Sony Group Corporation’s stockholders | 5,653,804 | 6,598,537 | 7,308,165 | 709,628 | ||||||||||||
Noncontrolling interests | 52,778 | 58,613 | 160,548 | 101,935 | ||||||||||||
Total equity | 5,706,582 | 6,657,150 | 7,468,713 | 811,563 | ||||||||||||
Total liabilities and equity | 29,651,955 | 31,154,095 | 33,643,625 | 2,489,530 |
F-2
Condensed Consolidated Statements of Income
Yen in millions | ||||||||||||
Three months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Sales and financial services revenue: | ||||||||||||
Sales | 3,056,183 | 3,438,092 | 381,909 | |||||||||
Financial services revenue | ||||||||||||
Insurance revenue | 138,463 | 146,801 | 8,338 | |||||||||
Other financial services revenue | (116,342 | ) | 162,634 | 278,976 | ||||||||
Total financial services revenue | 22,121 | 309,435 | 287,314 | |||||||||
Total sales and financial services revenue | 3,078,304 | 3,747,527 | 669,223 | |||||||||
Costs and expenses: | ||||||||||||
Cost of sales | 2,161,904 | 2,504,410 | 342,506 | |||||||||
Selling, general and administrative | 529,188 | 554,712 | 25,524 | |||||||||
Financial services expenses | ||||||||||||
Insurance service expenses | 93,721 | 99,375 | 5,654 | |||||||||
Insurance finance expenses (income) | (148,675 | ) | 89,750 | 238,425 | ||||||||
Other financial services expenses | 29,424 | 42,954 | 13,530 | |||||||||
Total financial services expenses | (25,530 | ) | 232,079 | 257,609 | ||||||||
Other operating (income) expense, net | (1,484 | ) | (3,691 | ) | (2,207 | ) | ||||||
Total costs and expenses | 2,664,078 | 3,287,510 | 623,432 | |||||||||
Share of profit (loss) of investments accounted for using the equity method | 7,355 | 3,321 | (4,034 | ) | ||||||||
Operating income | 421,581 | 463,338 | 41,757 | |||||||||
Financial income | 6,943 | 33,959 | 27,016 | |||||||||
Financial expenses | 37,101 | 38,742 | 1,641 | |||||||||
Income before income taxes | 391,423 | 458,555 | 67,132 | |||||||||
Income taxes | 68,205 | 91,184 | 22,979 | |||||||||
Net income | 323,218 | 367,371 | 44,153 | |||||||||
Net income attributable to | ||||||||||||
Sony Group Corporation’s stockholders | 321,521 | 363,918 | 42,397 | |||||||||
Noncontrolling interests | 1,697 | 3,453 | 1,756 |
Yen | ||||||||||||
Three months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Per share data: | ||||||||||||
Net income attributable to Sony Group Corporation’s stockholders | ||||||||||||
- Basic | 260.28 | 295.67 | 35.39 | |||||||||
- Diluted | 259.62 | 294.82 | 35.20 |
F-3
Condensed Consolidated Statements of Comprehensive Income
Yen in millions | ||||||||||||
Three months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Net income | 323,218 | 367,371 | 44,153 | |||||||||
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 | 5,988 | (15,272 | ) | (21,260 | ) | |||||||
Remeasurement of defined benefit pension plans | 10 | (578 | ) | (588 | ) | |||||||
Share of other comprehensive income of investments accounted for using the equity method | (141 | ) | (127 | ) | 14 | |||||||
Items that may be reclassified subsequently to profit or loss | ||||||||||||
Changes in debt instruments measured at fair value through other comprehensive income | (264,054 | ) | 173,013 | 437,067 | ||||||||
Cash flow hedges | 10,128 | 3,825 | (6,303 | ) | ||||||||
Insurance finance income (expenses) | 265,802 | (104,893 | ) | (370,695 | ) | |||||||
Exchange differences on translating foreign operations | (223,403 | ) | (155,748 | ) | 67,655 | |||||||
Share of other comprehensive income of investments accounted for using the equity method | (1,649 | ) | (1,868 | ) | (219 | ) | ||||||
Other | (259 | ) | 136 | 395 | ||||||||
Total other comprehensive income, net of tax | (207,578 | ) | (101,512 | ) | 106,066 | |||||||
Comprehensive income | 115,640 | 265,859 | 150,219 | |||||||||
Comprehensive income attributable to | ||||||||||||
Sony Group Corporation’s stockholders | 116,677 | 262,765 | 146,088 | |||||||||
Noncontrolling interests | (1,037 | ) | 3,094 | 4,131 |
F-4
Condensed Consolidated Statements of Income
Yen in millions | ||||||||||||
Nine months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Sales and financial services revenue: | ||||||||||||
Sales | 7,523,263 | 8,449,647 | 926,384 | |||||||||
Financial services revenue | ||||||||||||
Insurance revenue | 411,376 | 433,228 | 21,852 | |||||||||
Other financial services revenue | (1,111 | ) | 656,927 | 658,038 | ||||||||
Total financial services revenue | 410,265 | 1,090,155 | 679,890 | |||||||||
Total sales and financial services revenue | 7,933,528 | 9,539,802 | 1,606,274 | |||||||||
Costs and expenses: | ||||||||||||
Cost of sales | 5,241,857 | 6,096,395 | 854,538 | |||||||||
Selling, general and administrative | 1,418,411 | 1,548,380 | 129,969 | |||||||||
Financial services expenses | ||||||||||||
Insurance service expenses | 284,609 | 291,961 | 7,352 | |||||||||
Insurance finance expenses (income) | (197,508 | ) | 528,075 | 725,583 | ||||||||
Other financial services expenses | 61,150 | 122,319 | 61,169 | |||||||||
Total financial services expenses | 148,251 | 942,355 | 794,104 | |||||||||
Other operating (income) expense, net | (12,278 | ) | (15,813 | ) | (3,535 | ) | ||||||
Total costs and expenses | 6,796,241 | 8,571,317 | 1,775,076 | |||||||||
Share of profit (loss) of investments accounted for using the equity method | 18,562 | 10,904 | (7,658 | ) | ||||||||
Operating income | 1,155,849 | 979,389 | (176,460 | ) | ||||||||
Financial income | 19,862 | 65,737 | 45,875 | |||||||||
Financial expenses | 63,893 | 52,942 | (10,951 | ) | ||||||||
Income before income taxes | 1,111,818 | 992,184 | (119,634 | ) | ||||||||
Income taxes | 242,007 | 205,715 | (36,292 | ) | ||||||||
Net income | 869,811 | 786,469 | (83,342 | ) | ||||||||
Net income attributable to | ||||||||||||
Sony Group Corporation’s stockholders | 864,296 | 781,568 | (82,728 | ) | ||||||||
Noncontrolling interests | 5,515 | 4,901 | (614 | ) |
Yen | ||||||||||||
Nine months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Per share data: | ||||||||||||
Net income attributable to Sony Group Corporation’s stockholders | ||||||||||||
- Basic | 699.17 | 633.94 | (65.23 | ) | ||||||||
- Diluted | 695.64 | 631.93 | (63.71 | ) |
F-5
Condensed Consolidated Statements of Comprehensive Income
Yen in millions | ||||||||||||
Nine months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Net income | 869,811 | 786,469 | (83,342 | ) | ||||||||
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 | (9,520 | ) | (33,276 | ) | (23,756 | ) | ||||||
Remeasurement of defined benefit pension plans | 39 | (1,030 | ) | (1,069 | ) | |||||||
Share of other comprehensive income of investments accounted for using the equity method | 131 | 190 | 59 | |||||||||
Items that may be reclassified subsequently to profit or loss | ||||||||||||
Changes in debt instruments measured at fair value through other comprehensive income | (1,190,706 | ) | (522,959 | ) | 667,747 | |||||||
Cash flow hedges | 17,719 | 3,523 | (14,196 | ) | ||||||||
Insurance finance income (expenses) | 1,056,526 | 411,886 | (644,640 | ) | ||||||||
Exchange differences on translating foreign operations | 140,581 | 207,677 | 67,096 | |||||||||
Share of other comprehensive income of investments accounted for using the equity method | 2,792 | 2,270 | (522 | ) | ||||||||
Other | (397 | ) | (206 | ) | 191 | |||||||
Total other comprehensive income, net of tax | 17,165 | 68,075 | 50,910 | |||||||||
Comprehensive income | 886,976 | 854,544 | (32,432 | ) | ||||||||
Comprehensive income attributable to | ||||||||||||
Sony Group Corporation’s stockholders | 879,522 | 847,369 | (32,153 | ) | ||||||||
Noncontrolling interests | 7,454 | 7,175 | (279 | ) |
F-6
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, 2022 | 880,365 | 1,461,053 | 3,760,763 | 1,222,332 | (180,042 | ) | 7,144,471 | 52,778 | 7,197,249 | |||||||||||||||||||||||
Cumulative effects of the application of new accounting standards | - | - | 409,654 | (1,900,321 | ) | - | (1,490,667 | ) | - | (1,490,667 | ) | |||||||||||||||||||||
Restated balance at April 1, 2022 | 880,365 | 1,461,053 | 4,170,417 | (677,989 | ) | (180,042 | ) | 5,653,804 | 52,778 | 5,706,582 | ||||||||||||||||||||||
Comprehensive income (restated): | ||||||||||||||||||||||||||||||||
Net income | 864,296 | 864,296 | 5,515 | 869,811 | ||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 15,226 | 15,226 | 1,939 | 17,165 | ||||||||||||||||||||||||||||
Total comprehensive income (restated) | 864,296 | 15,226 | 879,522 | 7,454 | 886,976 | |||||||||||||||||||||||||||
Transfer to retained earnings | (52 | ) | 52 | - | - | |||||||||||||||||||||||||||
Transactions with stockholders and other: | ||||||||||||||||||||||||||||||||
Exercise of stock acquisition rights | (6 | ) | (859 | ) | 5,696 | 4,831 | 4,831 | |||||||||||||||||||||||||
Conversion of convertible bonds | (2,588 | ) | (13,858 | ) | 42,993 | 26,547 | 26,547 | |||||||||||||||||||||||||
Stock-based compensation | 7,413 | 7,413 | 7,413 | |||||||||||||||||||||||||||||
Dividends declared | (86,635 | ) | (86,635 | ) | (5,470 | ) | (92,105 | ) | ||||||||||||||||||||||||
Purchase of treasury stock | (91,307 | ) | (91,307 | ) | (91,307 | ) | ||||||||||||||||||||||||||
Reissuance of treasury stock | 1,234 | 2,400 | 3,634 | 3,634 | ||||||||||||||||||||||||||||
Transactions with noncontrolling interests shareholders and other | (8,898 | ) | (8,898 | ) | 2,295 | (6,603 | ) | |||||||||||||||||||||||||
Restated balance at December 31, 2022 | 880,365 | 1,458,208 | 4,933,309 | (662,711 | ) | (220,260 | ) | 6,388,911 | 57,057 | 6,445,968 |
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 | 781,568 | 781,568 | 4,901 | 786,469 | ||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 65,801 | 65,801 | 2,274 | 68,075 | ||||||||||||||||||||||||||||
Total comprehensive income | 781,568 | 65,801 | 847,369 | 7,175 | 854,544 | |||||||||||||||||||||||||||
Transfer to retained earnings | 191 | (191 | ) | - | - | |||||||||||||||||||||||||||
Transactions with stockholders and other: | ||||||||||||||||||||||||||||||||
Exercise of stock acquisition rights and other | 992 | (1,533 | ) | (144 | ) | 12,858 | 12,173 | 12,173 | ||||||||||||||||||||||||
Stock-based compensation | 9,472 | 9,472 | 9,472 | |||||||||||||||||||||||||||||
Dividends declared | (98,685 | ) | (98,685 | ) | (4,866 | ) | (103,551 | ) | ||||||||||||||||||||||||
Purchase of treasury stock | (74,705 | ) | (74,705 | ) | (74,705 | ) | ||||||||||||||||||||||||||
Reissuance of treasury stock | 1,786 | 3,290 | 5,076 | 5,076 | ||||||||||||||||||||||||||||
Transactions with noncontrolling interests shareholders and other | 8,928 | 8,928 | 99,626 | 108,554 | ||||||||||||||||||||||||||||
Balance at December 31, 2023 | 881,357 | 1,482,460 | 5,775,372 | (548,960 | ) | (282,064 | ) | 7,308,165 | 160,548 | 7,468,713 |
F-7
Condensed Consolidated Statements of Cash Flows
Yen in millions | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Income before income taxes | 1,111,818 | 992,184 | ||||||
Adjustments to reconcile income before income taxes to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization, including amortization of contract costs | 735,642 | 852,030 | ||||||
Other operating (income) expense, net | (12,278 | ) | (15,813 | ) | ||||
(Gain) loss on securities, net (other than Financial Services segment) | 27,154 | (31,340 | ) | |||||
Share of profit of investments accounted for using the equity method, net of dividends | (12,166 | ) | (3,032 | ) | ||||
Changes in assets and liabilities: | ||||||||
Increase in trade receivables and contract assets | (276,956 | ) | (592,206 | ) | ||||
Increase in inventories | (572,541 | ) | (88,517 | ) | ||||
Increase in investments and advances in the Financial Services segment | (660,389 | ) | (988,372 | ) | ||||
Increase in content assets | (477,898 | ) | (358,830 | ) | ||||
Increase in trade payables | 65,799 | 252,967 | ||||||
Increase (decrease) in insurance contract liabilities, net of insurance contract assets | (48,342 | ) | 789,883 | |||||
Increase in deposits from customers in the banking business | 194,976 | 419,223 | ||||||
Increase in borrowings in the life insurance business and the banking business | 100,670 | 72,995 | ||||||
Decrease in taxes payable other than income taxes, net | (34,912 | ) | (16,593 | ) | ||||
Increase in other financial assets and other current assets | (37,164 | ) | (67,033 | ) | ||||
Increase in other financial liabilities and other current liabilities | 101,294 | 12,806 | ||||||
Income taxes paid | (183,097 | ) | (251,431 | ) | ||||
Other | (103,233 | ) | (46,963 | ) | ||||
Net cash provided by (used in) operating activities | (81,623 | ) | 931,958 |
(Continued on the following page.)
F-8
Condensed Consolidated Statements of Cash Flows (Continued)
Yen in millions | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Cash flows from investing activities: | ||||||||
Payments for property, plant and equipment and other intangible assets | (434,748 | ) | (450,017 | ) | ||||
Proceeds from sales of property, plant and equipment and other intangible assets | 9,474 | 10,838 | ||||||
Payments for investments and advances (other than Financial Services segment) | (185,577 | ) | (75,072 | ) | ||||
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment) | 11,740 | 80,476 | ||||||
Payments for purchases of businesses and other | (280,447 | ) | (170,925 | ) | ||||
Proceeds from sales of businesses | 1,221 | - | ||||||
Other | 20,814 | (15,253 | ) | |||||
Net cash used in investing activities | (857,523 | ) | (619,953 | ) | ||||
Cash flows from financing activities: | ||||||||
Increase in short-term borrowings, net | 27,765 | 402,152 | ||||||
Proceeds from issuance of long-term debt | 348,565 | 63,660 | ||||||
Payments of long-term debt | (106,328 | ) | (99,311 | ) | ||||
Dividends paid | (86,383 | ) | (98,424 | ) | ||||
Payments for purchases of treasury stock | (91,307 | ) | (74,705 | ) | ||||
Other | 7,036 | 8,821 | ||||||
Net cash provided by financing activities | 99,348 | 202,193 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 78,142 | 24,014 | ||||||
Net increase (decrease) in cash and cash equivalents | (761,656 | ) | 538,212 | |||||
Cash and cash equivalents at beginning of the fiscal year | 2,049,636 | 1,480,900 | ||||||
Cash and cash equivalents at end of the period | 1,287,980 | 2,019,112 |
F-9
Notes to Condensed Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue
Yen in millions | ||||||||||||
Three months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Sales and financial services revenue: | ||||||||||||
Game & Network Services - | ||||||||||||
Customers | 1,211,617 | 1,428,886 | 217,269 | |||||||||
Intersegment | 34,932 | 15,541 | (19,391 | ) | ||||||||
Total | 1,246,549 | 1,444,427 | 197,878 | |||||||||
Music - | ||||||||||||
Customers | 360,643 | 417,651 | 57,008 | |||||||||
Intersegment | 3,104 | 4,453 | 1,349 | |||||||||
Total | 363,747 | 422,104 | 58,357 | |||||||||
Pictures - | ||||||||||||
Customers | 330,925 | 365,133 | 34,208 | |||||||||
Intersegment | 612 | 1,194 | 582 | |||||||||
Total | 331,537 | 366,327 | 34,790 | |||||||||
Entertainment, Technology & Services - | ||||||||||||
Customers | 742,480 | 725,563 | (16,917 | ) | ||||||||
Intersegment | 10,343 | 10,175 | (168 | ) | ||||||||
Total | 752,823 | 735,738 | (17,085 | ) | ||||||||
Imaging & Sensing Solutions - | ||||||||||||
Customers | 386,400 | 477,513 | 91,113 | |||||||||
Intersegment | 30,751 | 27,645 | (3,106 | ) | ||||||||
Total | 417,151 | 505,158 | 88,007 | |||||||||
Financial Services - | ||||||||||||
Customers | 22,121 | 309,435 | 287,314 | |||||||||
Intersegment | 2,301 | 2,308 | 7 | |||||||||
Total | 24,422 | 311,743 | 287,321 | |||||||||
All Other - | ||||||||||||
Customers | 19,648 | 20,192 | 544 | |||||||||
Intersegment | 5,412 | 3,703 | (1,709 | ) | ||||||||
Total | 25,060 | 23,895 | (1,165 | ) | ||||||||
Corporate and elimination | (82,985 | ) | (61,865 | ) | 21,120 | |||||||
Consolidated total | 3,078,304 | 3,747,527 | 669,223 |
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-10
Segment profit (loss)
Yen in millions | ||||||||||||
Three months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Operating income (loss): | ||||||||||||
Game & Network Services | 116,248 | 86,139 | (30,109 | ) | ||||||||
Music | 62,961 | 76,086 | 13,125 | |||||||||
Pictures | 25,445 | 41,626 | 16,181 | |||||||||
Entertainment, Technology & Services | 81,094 | 77,164 | (3,930 | ) | ||||||||
Imaging & Sensing Solutions | 84,851 | 99,715 | 14,864 | |||||||||
Financial Services | 47,107 | 77,274 | 30,167 | |||||||||
All Other | 9,062 | 2,596 | (6,466 | ) | ||||||||
Total | 426,768 | 460,600 | 33,832 | |||||||||
Corporate and elimination | (5,187 | ) | 2,738 | 7,925 | ||||||||
Consolidated operating income | 421,581 | 463,338 | 41,757 |
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.
F-11
(Business Segments)
Segment sales and financial services revenue
Yen in millions | ||||||||||||
Nine months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Sales and financial services revenue: | ||||||||||||
Game & Network Services - | ||||||||||||
Customers | 2,502,796 | 3,114,026 | 611,230 | |||||||||
Intersegment | 68,604 | 56,377 | (12,227 | ) | ||||||||
Total | 2,571,400 | 3,170,403 | 599,003 | |||||||||
Music - | ||||||||||||
Customers | 1,022,924 | 1,172,767 | 149,843 | |||||||||
Intersegment | 8,212 | 16,282 | 8,070 | |||||||||
Total | 1,031,136 | 1,189,049 | 157,913 | |||||||||
Pictures - | ||||||||||||
Customers | 1,007,752 | 1,082,658 | 74,906 | |||||||||
Intersegment | 2,630 | 3,671 | 1,041 | |||||||||
Total | 1,010,382 | 1,086,329 | 75,947 | |||||||||
Entertainment, Technology & Services - | ||||||||||||
Customers | 1,953,118 | 1,892,069 | (61,049 | ) | ||||||||
Intersegment | 29,060 | 28,992 | (68 | ) | ||||||||
Total | 1,982,178 | 1,921,061 | (61,117 | ) | ||||||||
Imaging & Sensing Solutions - | ||||||||||||
Customers | 975,203 | 1,122,646 | 147,443 | |||||||||
Intersegment | 78,156 | 81,568 | 3,412 | |||||||||
Total | 1,053,359 | 1,204,214 | 150,855 | |||||||||
Financial Services - | ||||||||||||
Customers | 410,265 | 1,090,155 | 679,890 | |||||||||
Intersegment | 8,242 | 6,914 | (1,328 | ) | ||||||||
Total | 418,507 | 1,097,069 | 678,562 | |||||||||
All Other - | ||||||||||||
Customers | 52,848 | 57,012 | 4,164 | |||||||||
Intersegment | 12,278 | 10,601 | (1,677 | ) | ||||||||
Total | 65,126 | 67,613 | 2,487 | |||||||||
Corporate and elimination | (198,560 | ) | (195,936 | ) | 2,624 | |||||||
Consolidated total | 7,933,528 | 9,539,802 | 1,606,274 |
G&NS intersegment amounts primarily consist of transactions with the ET&S segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. 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-12
Segment profit (loss)
Yen in millions | ||||||||||||
Nine months ended December 31 | ||||||||||||
2022 Restated | 2023 | Change | ||||||||||
Operating income (loss): | ||||||||||||
Game & Network Services | 211,142 | 184,201 | (26,941 | ) | ||||||||
Music | 202,667 | 230,463 | 27,796 | |||||||||
Pictures | 103,720 | 87,035 | (16,685 | ) | ||||||||
Entertainment, Technology & Services | 212,502 | 193,843 | (18,659 | ) | ||||||||
Imaging & Sensing Solutions | 180,527 | 158,807 | (21,720 | ) | ||||||||
Financial Services | 266,304 | 147,469 | (118,835 | ) | ||||||||
All Other | 16,775 | 7,140 | (9,635 | ) | ||||||||
Total | 1,193,637 | 1,008,958 | (184,679 | ) | ||||||||
Corporate and elimination | (37,788 | ) | (29,569 | ) | 8,219 | |||||||
Consolidated operating income | 1,155,849 | 979,389 | (176,460 | ) |
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.
F-13
(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 December 31 | ||||||||||||
Sales and financial services revenue: | 2022 Restated | 2023 | Change | |||||||||
Game & Network Services | ||||||||||||
Digital Software and Add-on Content | 508,102 | 631,981 | 123,879 | |||||||||
Network Services | 122,201 | 137,182 | 14,981 | |||||||||
Hardware and Others | 581,314 | 659,723 | 78,409 | |||||||||
Total | 1,211,617 | 1,428,886 | 217,269 | |||||||||
Music | ||||||||||||
Recorded Music - Streaming | 159,147 | 186,520 | 27,373 | |||||||||
Recorded Music - Others | 79,901 | 100,021 | 20,120 | |||||||||
Music Publishing | 74,161 | 86,084 | 11,923 | |||||||||
Visual Media and Platform | 47,434 | 45,026 | (2,408 | ) | ||||||||
Total | 360,643 | 417,651 | 57,008 | |||||||||
Pictures | ||||||||||||
Motion Pictures | 113,087 | 130,441 | 17,354 | |||||||||
Television Productions | 123,508 | 130,844 | 7,336 | |||||||||
Media Networks | 94,330 | 103,848 | 9,518 | |||||||||
Total | 330,925 | 365,133 | 34,208 | |||||||||
Entertainment, Technology & Services | ||||||||||||
Televisions | 250,192 | 210,967 | (39,225 | ) | ||||||||
Audio and Video | 122,605 | 133,823 | 11,218 | |||||||||
Still and Video Cameras | 171,146 | 188,609 | 17,463 | |||||||||
Mobile Communications | 93,302 | 76,508 | (16,794 | ) | ||||||||
Other | 105,235 | 115,656 | 10,421 | |||||||||
Total | 742,480 | 725,563 | (16,917 | ) | ||||||||
Imaging & Sensing Solutions | 386,400 | 477,513 | 91,113 | |||||||||
Financial Services | 22,121 | 309,435 | 287,314 | |||||||||
All Other | 19,648 | 20,192 | 544 | |||||||||
Corporate | 4,470 | 3,154 | (1,316 | ) | ||||||||
Consolidated total | 3,078,304 | 3,747,527 | 669,223 |
F-14
Yen in millions | ||||||||||||
Nine months ended December 31 | ||||||||||||
Sales and financial services revenue: | 2022 Restated | 2023 | Change | |||||||||
Game & Network Services | ||||||||||||
Digital Software and Add-on Content | 1,126,806 | 1,420,423 | 293,617 | |||||||||
Network Services | 345,730 | 395,568 | 49,838 | |||||||||
Hardware and Others | 1,030,260 | 1,298,035 | 267,775 | |||||||||
Total | 2,502,796 | 3,114,026 | 611,230 | |||||||||
Music | ||||||||||||
Recorded Music - Streaming | 450,188 | 525,265 | 75,077 | |||||||||
Recorded Music - Others | 212,387 | 252,787 | 40,400 | |||||||||
Music Publishing | 210,707 | 243,948 | 33,241 | |||||||||
Visual Media and Platform | 149,642 | 150,767 | 1,125 | |||||||||
Total | 1,022,924 | 1,172,767 | 149,843 | |||||||||
Pictures | ||||||||||||
Motion Pictures | 360,003 | 385,154 | 25,151 | |||||||||
Television Productions | 377,255 | 408,460 | 31,205 | |||||||||
Media Networks | 270,494 | 289,044 | 18,550 | |||||||||
Total | 1,007,752 | 1,082,658 | 74,906 | |||||||||
Entertainment, Technology & Services | ||||||||||||
Televisions | 618,736 | 507,951 | (110,785 | ) | ||||||||
Audio and Video | 313,552 | 332,072 | 18,520 | |||||||||
Still and Video Cameras | 458,711 | 509,686 | 50,975 | |||||||||
Mobile Communications | 285,559 | 236,644 | (48,915 | ) | ||||||||
Other | 276,560 | 305,716 | 29,156 | |||||||||
Total | 1,953,118 | 1,892,069 | (61,049 | ) | ||||||||
Imaging & Sensing Solutions | 975,203 | 1,122,646 | 147,443 | |||||||||
Financial Services | 410,265 | 1,090,155 | 679,890 | |||||||||
All Other | 52,848 | 57,012 | 4,164 | |||||||||
Corporate | 8,622 | 8,469 | (153 | ) | ||||||||
Consolidated total | 7,933,528 | 9,539,802 | 1,606,274 |
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; 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.
F-15
(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 | ||||||||||||||||||||||||||||||||||
April 1, 2022 Restated | March 31, 2023 Restated | December 31, 2023 | April 1, 2022 Restated | March 31, 2023 Restated | December 31, 2023 | April 1, 2022 Restated | March 31, 2023 Restated | December 31, 2023 | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | ¥ | 889,140 | ¥ | 756,493 | ¥ | 1,042,647 | ¥ | 1,160,496 | ¥ | 724,407 | ¥ | 976,465 | ¥ | 2,049,636 | ¥ | 1,480,900 | ¥ | 2,019,112 | ||||||||||||||||||
Investments and advances in the Financial Services segment | 360,681 | 328,358 | 455,427 | - | - | - | 360,681 | 328,358 | 455,427 | |||||||||||||||||||||||||||
Trade and other receivables, and contract assets | 163,037 | 127,413 | 140,581 | 1,478,620 | 1,668,257 | 2,290,386 | 1,621,629 | 1,770,948 | 2,410,040 | |||||||||||||||||||||||||||
Inventories | - | - | - | 874,007 | 1,468,042 | 1,629,886 | 874,007 | 1,468,042 | 1,629,886 | |||||||||||||||||||||||||||
Other financial assets | 81,174 | 47,044 | 57,829 | 68,124 | 63,906 | 74,405 | 149,301 | 110,950 | 132,235 | |||||||||||||||||||||||||||
Other current assets | 27,893 | 16,029 | 77,412 | 450,953 | 562,442 | 655,724 | 428,522 | 563,334 | 722,214 | |||||||||||||||||||||||||||
Total current assets | 1,521,925 | 1,275,337 | 1,773,896 | 4,032,200 | 4,487,054 | 5,626,866 | 5,483,776 | 5,722,532 | 7,368,914 | |||||||||||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||||||||||||||
Investments accounted for using the equity method | - | - | - | 268,513 | 325,220 | 406,024 | 268,513 | 325,220 | 406,024 | |||||||||||||||||||||||||||
Investments and advances in the Financial Services segment | 18,251,612 | 18,237,761 | 18,370,584 | - | - | - | 18,251,612 | 18,237,761 | 18,370,584 | |||||||||||||||||||||||||||
Investments in Financial Services, at cost | - | - | - | 550,483 | 550,483 | 550,483 | - | - | - | |||||||||||||||||||||||||||
Property, plant and equipment | 18,010 | 15,316 | 14,321 | 1,095,241 | 1,329,219 | 1,477,272 | 1,113,213 | 1,344,864 | 1,491,920 | |||||||||||||||||||||||||||
Right-of-use assets | 73,774 | 84,023 | 78,420 | 339,658 | 395,210 | 392,941 | 413,430 | 478,063 | 470,230 | |||||||||||||||||||||||||||
Goodwill and intangible assets, including content assets | 72,578 | 78,197 | 73,670 | 2,672,466 | 3,322,639 | 3,715,720 | 2,745,044 | 3,400,836 | 3,789,390 | |||||||||||||||||||||||||||
Deferred tax assets | 2,335 | 2,687 | - | 332,330 | 431,533 | 488,288 | 300,924 | 393,107 | 462,062 | |||||||||||||||||||||||||||
Other financial assets | 37,037 | 46,941 | 61,311 | 663,233 | 789,470 | 768,154 | 696,306 | 832,344 | 825,313 | |||||||||||||||||||||||||||
Other non-current assets | 167,744 | 172,565 | 166,290 | 284,834 | 319,306 | 364,857 | 379,137 | 419,368 | 459,188 | |||||||||||||||||||||||||||
Total non-current assets | 18,623,090 | 18,637,490 | 18,764,596 | 6,206,758 | 7,463,080 | 8,163,739 | 24,168,179 | 25,431,563 | 26,274,711 | |||||||||||||||||||||||||||
Total assets | ¥ | 20,145,015 | ¥ | 19,912,827 | ¥ | 20,538,492 | ¥ | 10,238,958 | ¥ | 11,950,134 | ¥ | 13,790,605 | ¥ | 29,651,955 | ¥ | 31,154,095 | ¥ | 33,643,625 | ||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||||||
Short-term borrowings | ¥ | 1,964,776 | ¥ | 1,891,856 | ¥ | 1,929,741 | ¥ | 183,187 | ¥ | 211,020 | ¥ | 635,788 | ¥ | 2,147,962 | ¥ | 2,102,876 | ¥ | 2,565,529 | ||||||||||||||||||
Trade and other payables | 119,017 | 77,703 | 40,905 | 1,744,011 | 1,812,670 | 2,205,379 | 1,843,338 | 1,866,101 | 2,244,832 | |||||||||||||||||||||||||||
Deposits from customers in the banking business | 2,886,361 | 3,163,237 | 3,561,499 | - | - | - | 2,886,361 | 3,163,237 | 3,561,499 | |||||||||||||||||||||||||||
Income taxes payables | 3,789 | 15,213 | 2,922 | 101,648 | 139,330 | 131,599 | 105,437 | 154,543 | 134,521 | |||||||||||||||||||||||||||
Participation and residual liabilities in the Pictures segment | - | - | - | 190,162 | 230,223 | 233,435 | 190,162 | 230,223 | 233,435 | |||||||||||||||||||||||||||
Other financial liabilities | 98,029 | 77,605 | 78,051 | 29,050 | 30,444 | 34,378 | 127,079 | 108,049 | 112,429 | |||||||||||||||||||||||||||
Other current liabilities | 218,865 | 194,174 | 242,393 | 1,297,115 | 1,514,792 | 1,622,515 | 1,465,326 | 1,693,380 | 1,834,500 | |||||||||||||||||||||||||||
Total current liabilities | 5,290,837 | 5,419,788 | 5,855,511 | 3,545,173 | 3,938,479 | 4,863,094 | 8,765,665 | 9,318,409 | 10,686,745 | |||||||||||||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||||||||||||||
Long-term debt | 470,498 | 663,353 | 692,552 | 733,148 | 1,104,344 | 1,147,515 | 1,203,646 | 1,767,696 | 1,840,067 | |||||||||||||||||||||||||||
Defined benefit liabilities | 37,167 | 37,183 | 37,896 | 217,381 | 198,938 | 205,212 | 254,548 | 236,121 | 243,108 | |||||||||||||||||||||||||||
Deferred tax liabilities | 58,666 | 60,554 | 42,156 | 110,715 | 112,938 | 132,589 | 120,582 | 117,621 | 133,762 | |||||||||||||||||||||||||||
Insurance contract liabilities | 13,042,875 | 12,364,973 | 12,571,220 | - | - | - | 13,042,875 | 12,364,973 | 12,571,220 | |||||||||||||||||||||||||||
Participation and residual liabilities in the Pictures segment | - | - | - | 220,113 | 192,952 | 184,953 | 220,113 | 192,952 | 184,953 | |||||||||||||||||||||||||||
Other financial liabilities | 147,712 | 175,026 | 205,036 | 86,391 | 199,327 | 169,618 | 231,463 | 371,580 | 371,758 | |||||||||||||||||||||||||||
Other non-current liabilities | 5,864 | 7,225 | 7,551 | 121,558 | 142,096 | 156,835 | 106,481 | 127,593 | 143,299 | |||||||||||||||||||||||||||
Total non-current liabilities | 13,762,782 | 13,308,314 | 13,556,411 | 1,489,306 | 1,950,595 | 1,996,722 | 15,179,708 | 15,178,536 | 15,488,167 | |||||||||||||||||||||||||||
Total liabilities | 19,053,619 | 18,728,102 | 19,411,922 | 5,034,479 | 5,889,074 | 6,859,816 | 23,945,373 | 24,496,945 | 26,174,912 | |||||||||||||||||||||||||||
Equity: | ||||||||||||||||||||||||||||||||||||
Stockholders’ equity of Financial Services | 1,087,948 | 1,180,905 | 1,124,448 | - | - | - | - | - | - | |||||||||||||||||||||||||||
Stockholders’ equity of Sony without Financial Services | - | - | - | 5,155,149 | 6,006,267 | 6,772,363 | - | - | - | |||||||||||||||||||||||||||
Sony Group Corporation’s stockholders’ equity | - | - | - | - | - | - | 5,653,804 | 6,598,537 | 7,308,165 | |||||||||||||||||||||||||||
Noncontrolling interests | 3,448 | 3,820 | 2,122 | 49,330 | 54,793 | 158,426 | 52,778 | 58,613 | 160,548 | |||||||||||||||||||||||||||
Total equity | 1,091,396 | 1,184,725 | 1,126,570 | 5,204,479 | 6,061,060 | 6,930,789 | 5,706,582 | 6,657,150 | 7,468,713 | |||||||||||||||||||||||||||
Total liabilities and equity | ¥ | 20,145,015 | ¥ | 19,912,827 | ¥ | 20,538,492 | ¥ | 10,238,958 | ¥ | 11,950,134 | ¥ | 13,790,605 | ¥ | 29,651,955 | ¥ | 31,154,095 | ¥ | 33,643,625 |
F-16
Condensed Statements of Income
Yen in millions | ||||||||||||||||||||||||
Three months ended December 31 | ||||||||||||||||||||||||
Financial Services | Sony without Financial Services | Consolidated | ||||||||||||||||||||||
2022 Restated | 2023 | 2022 Restated | 2023 | 2022 Restated | 2023 | |||||||||||||||||||
Sales | ¥ | - | ¥ | - | ¥ | 3,057,441 | ¥ | 3,439,360 | ¥ | 3,056,183 | ¥ | 3,438,092 | ||||||||||||
Financial services revenue | 24,422 | 311,743 | - | - | 22,121 | 309,435 | ||||||||||||||||||
Total sales and financial services revenue | 24,422 | 311,743 | 3,057,441 | 3,439,360 | 3,078,304 | 3,747,527 | ||||||||||||||||||
Cost of sales | - | - | 2,164,926 | 2,508,021 | 2,161,904 | 2,504,410 | ||||||||||||||||||
Selling, general and administrative | - | - | 527,428 | 552,365 | 529,188 | 554,712 | ||||||||||||||||||
Financial services expenses | (23,229 | ) | 234,387 | - | - | (25,530 | ) | 232,079 | ||||||||||||||||
Other operating (income) expense, net | 544 | 82 | (2,027 | ) | (3,773 | ) | (1,484 | ) | (3,691 | ) | ||||||||||||||
Total costs and expenses | (22,685 | ) | 234,469 | 2,690,327 | 3,056,613 | 2,664,078 | 3,287,510 | |||||||||||||||||
Share of profit (loss) of investments accounted for using the equity method | - | - | 7,355 | 3,321 | 7,355 | 3,321 | ||||||||||||||||||
Operating income | 47,107 | 77,274 | 374,469 | 386,068 | 421,581 | 463,338 | ||||||||||||||||||
Financial income (expenses), net | - | - | (30,159 | ) | (4,784 | ) | (30,158 | ) | (4,783 | ) | ||||||||||||||
Income before income taxes | 47,107 | 77,274 | 344,310 | 381,284 | 391,423 | 458,555 | ||||||||||||||||||
Income taxes | 12,450 | 22,121 | 55,756 | 69,063 | 68,205 | 91,184 | ||||||||||||||||||
Net income | 34,657 | 55,153 | 288,554 | 312,221 | 323,218 | 367,371 | ||||||||||||||||||
Net income of Financial Services | ¥ | 34,644 | ¥ | 54,999 | ¥ | - | ¥ | - | ¥ | - | ¥ | - | ||||||||||||
Net income of Sony without Financial Services | ¥ | - | ¥ | - | ¥ | 286,870 | ¥ | 308,923 | ¥ | - | ¥ | - | ||||||||||||
Net income attributable to Sony Group Corporation’s stockholders | ¥ | - | ¥ | - | ¥ | - | ¥ | - | ¥ | 321,521 | ¥ | 363,918 | ||||||||||||
Net income attributable to noncontrolling interests | ¥ | 13 | ¥ | 154 | ¥ | 1,684 | ¥ | 3,298 | ¥ | 1,697 | ¥ | 3,453 |
F-17
Condensed Statements of Income
Yen in millions | ||||||||||||||||||||||||
Nine months ended December 31 | ||||||||||||||||||||||||
Financial Services | Sony without Financial Services | Consolidated | ||||||||||||||||||||||
2022 Restated | 2023 | 2022 Restated | 2023 | 2022 Restated | 2023 | |||||||||||||||||||
Sales | ¥ | - | ¥ | - | ¥ | 7,527,631 | ¥ | 8,454,056 | ¥ | 7,523,263 | ¥ | 8,449,647 | ||||||||||||
Financial services revenue | 418,507 | 1,097,069 | - | - | 410,265 | 1,090,155 | ||||||||||||||||||
Total sales and financial services revenue | 418,507 | 1,097,069 | 7,527,631 | 8,454,056 | 7,933,528 | 9,539,802 | ||||||||||||||||||
Cost of sales | - | - | 5,250,787 | 6,106,427 | 5,241,857 | 6,096,395 | ||||||||||||||||||
Selling, general and administrative | - | - | 1,412,507 | 1,542,744 | 1,418,411 | 1,548,380 | ||||||||||||||||||
Financial services expenses | 156,493 | 949,269 | - | - | 148,251 | 942,355 | ||||||||||||||||||
Other operating (income) expense, net | (4,290 | ) | 331 | (5,681 | ) | (16,144 | ) | (12,278 | ) | (15,813 | ) | |||||||||||||
Total costs and expenses | 152,203 | 949,600 | 6,657,613 | 7,633,027 | 6,796,241 | 8,571,317 | ||||||||||||||||||
Share of profit (loss) of investments accounted for using the equity method | - | - | 18,562 | 10,904 | 18,562 | 10,904 | ||||||||||||||||||
Operating income | 266,304 | 147,469 | 888,580 | 831,933 | 1,155,849 | 979,389 | ||||||||||||||||||
Financial income (expenses), net | - | - | (2,699 | ) | 62,828 | (44,031 | ) | 12,795 | ||||||||||||||||
Income before income taxes | 266,304 | 147,469 | 885,881 | 894,761 | 1,111,818 | 992,184 | ||||||||||||||||||
Income taxes | 73,547 | 42,875 | 168,162 | 162,840 | 242,007 | 205,715 | ||||||||||||||||||
Net income | 192,757 | 104,594 | 717,719 | 731,921 | 869,811 | 786,469 | ||||||||||||||||||
Net income of Financial Services | ¥ | 192,523 | ¥ | 104,143 | ¥ | - | ¥ | - | ¥ | - | ¥ | - | ||||||||||||
Net income of Sony without Financial Services | ¥ | - | ¥ | - | ¥ | 712,438 | ¥ | 727,471 | ¥ | - | ¥ | - | ||||||||||||
Net income attributable to Sony Group Corporation’s stockholders | ¥ | - | ¥ | - | ¥ | - | ¥ | - | ¥ | 864,296 | ¥ | 781,568 | ||||||||||||
Net income attributable to noncontrolling interests | ¥ | 234 | ¥ | 451 | ¥ | 5,281 | ¥ | 4,450 | ¥ | 5,515 | ¥ | 4,901 |
F-18
Condensed Statements of Cash Flows
Yen in millions | ||||||||||||||||||||||||
Nine months ended December 31 | ||||||||||||||||||||||||
Financial Services | Sony without Financial Services | Consolidated | ||||||||||||||||||||||
2022 Restated | 2023 | 2022 | 2023 | 2022 Restated | 2023 | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Income (loss) before income taxes | ¥ | 266,304 | ¥ | 147,469 | ¥ | 885,881 | ¥ | 894,761 | ¥ | 1,111,818 | ¥ | 992,184 | ||||||||||||
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 | 19,583 | 20,926 | 716,059 | 831,104 | 735,642 | 852,030 | ||||||||||||||||||
Other operating (income) expense, net | (4,290 | ) | 331 | (5,681 | ) | (16,144 | ) | (12,278 | ) | (15,813 | ) | |||||||||||||
(Gain) loss on securities, net (other than Financial Services segment) | - | - | 27,154 | (31,340 | ) | 27,154 | (31,340 | ) | ||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||||||
(Increase) decrease in trade receivables and contract assets | 15,421 | (38,263 | ) | (298,206 | ) | (550,147 | ) | (276,956 | ) | (592,206 | ) | |||||||||||||
(Increase) decrease in inventories | - | - | (572,541 | ) | (88,517 | ) | (572,541 | ) | (88,517 | ) | ||||||||||||||
(Increase) decrease in investments and advances in the Financial Services segment | (660,389 | ) | (988,372 | ) | - | - | (660,389 | ) | (988,372 | ) | ||||||||||||||
(Increase) decrease in content assets | - | - | (477,898 | ) | (358,830 | ) | (477,898 | ) | (358,830 | ) | ||||||||||||||
Increase (decrease) in trade payables | (43,868 | ) | 7,637 | 115,280 | 241,635 | 65,799 | 252,967 | |||||||||||||||||
Increase (decrease) in insurance contract liabilities, net of insurance contract assets | (48,342 | ) | 789,883 | - | - | (48,342 | ) | 789,883 | ||||||||||||||||
Increase (decrease) in deposits from customers in the banking business | 194,976 | 419,223 | - | - | 194,976 | 419,223 | ||||||||||||||||||
Increase (decrease) in borrowings in the life insurance business and the banking business | 100,670 | 72,995 | - | - | 100,670 | 72,995 | ||||||||||||||||||
Increase (decrease) in taxes payable other than income taxes, net | 830 | 782 | (35,742 | ) | (17,375 | ) | (34,912 | ) | (16,593 | ) | ||||||||||||||
Other | (68,068 | ) | (69,134 | ) | (164,643 | ) | (286,665 | ) | (234,366 | ) | (355,653 | ) | ||||||||||||
Net cash provided by (used in) operating activities | (227,173 | ) | 363,477 | 189,663 | 618,482 | (81,623 | ) | 931,958 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Payments for property, plant and equipment and other intangible assets | (19,642 | ) | (13,281 | ) | (415,597 | ) | (436,772 | ) | (434,748 | ) | (450,017 | ) | ||||||||||||
Payments for investments and advances (other than Financial Services segment) | - | - | (185,577 | ) | (75,072 | ) | (185,577 | ) | (75,072 | ) | ||||||||||||||
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment) | - | - | 11,740 | 80,476 | 11,740 | 80,476 | ||||||||||||||||||
Other | 416 | (3,603 | ) | (251,640 | ) | (171,737 | ) | (248,938 | ) | (175,340 | ) | |||||||||||||
Net cash provided by (used in) investing activities | (19,226 | ) | (16,884 | ) | (841,074 | ) | (603,105 | ) | (857,523 | ) | (619,953 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Increase (decrease) in borrowings, net | (8,514 | ) | (8,609 | ) | 278,516 | 375,110 | 270,002 | 366,501 | ||||||||||||||||
Dividends paid | (41,335 | ) | (50,037 | ) | (86,384 | ) | (98,424 | ) | (86,383 | ) | (98,424 | ) | ||||||||||||
Other | (3 | ) | (1,793 | ) | (84,268 | ) | (64,019 | ) | (84,271 | ) | (65,884 | ) | ||||||||||||
Net cash provided by (used in) financing activities | (49,852 | ) | (60,439 | ) | 107,864 | 212,667 | 99,348 | 202,193 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | - | - | 78,142 | 24,014 | 78,142 | 24,014 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (296,251 | ) | 286,154 | (465,405 | ) | 252,058 | (761,656 | ) | 538,212 | |||||||||||||||
Cash and cash equivalents at beginning of the fiscal year | 889,140 | 756,493 | 1,160,496 | 724,407 | 2,049,636 | 1,480,900 | ||||||||||||||||||
Cash and cash equivalents at end of the period | ¥ | 592,889 | ¥ | 1,042,647 | ¥ | 695,091 | ¥ | 976,465 | ¥ | 1,287,980 | ¥ | 2,019,112 |
F-19
Going Concern Assumption
Not Applicable
Accounting Policy and Other Information
(Changes in accounting policies)
Sony newly adopted the following accounting standards and interpretations from the fiscal year ending March 31, 2024:
IFRS 17 “Insurance Contracts”
The IASB issued IFRS 17 “Insurance Contracts” (“IFRS 17”) in May 2017 and Amendments to IFRS 17 in June 2020 and December 2021. IFRS 17 replaces IFRS 4 “Insurance Contracts” and sets out principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of IFRS 17. IFRS 17 provides a general model, supplemented by a specific approach for contracts with direct participation features (the variable fee approach), and a simplified approach (the premium allocation approach) mainly for short-duration contracts.
IFRS 17 was effective for Sony as of April 1, 2023. Sony has retrospectively applied changes in accounting policies resulting from the adoption of IFRS 17 unless it was impracticable. Sony applied the modified retrospective approach, which uses reasonable and supportable information, or the fair value approach, which uses the fair value as of April 1, 2022, the transition date for IFRS 17, to identify, recognize and measure certain groups of insurance contracts as of the transition date for IFRS 17, for which it was impracticable to apply the full retrospective approach. Therefore, Sony has restated the condensed consolidated financial statements for comparative periods and the condensed consolidated statement of financial position as of April 1, 2022 on the basis of the retrospective application of IFRS 17. The effects of the retrospective application of IFRS 17 on Sony’s total equity as of April 1, 2022 are presented in the condensed consolidated statements of changes in stockholders’ equity.
F-20
(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)
Yen in millions | ||||||||
Three months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Net income attributable to Sony Group Corporation’s stockholders for basic and diluted EPS computation | 321,521 | 363,918 |
Thousands of shares | ||||||||
Three months ended December 31 | ||||||||
2022 | 2023 | |||||||
Weighted-average shares outstanding for basic EPS computation | 1,235,285 | 1,230,805 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and other | 3,128 | 3,553 | ||||||
Weighted-average shares for diluted EPS computation | 1,238,413 | 1,234,358 |
Yen in millions | ||||||||
Nine months ended December 31 | ||||||||
2022 Restated | 2023 | |||||||
Net income attributable to Sony Group Corporation’s stockholders | 864,296 | 781,568 | ||||||
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation | ||||||||
Zero coupon convertible bonds | 51 | - | ||||||
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation | 864,347 | 781,568 |
Thousands of shares | ||||||||
Nine months ended December 31 | ||||||||
2022 | 2023 | |||||||
Weighted-average shares outstanding for basic EPS computation | 1,236,176 | 1,232,879 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and other | 3,632 | 3,922 | ||||||
Zero coupon convertible bonds | 2,706 | - | ||||||
Weighted-average shares for diluted EPS computation | 1,242,514 | 1,236,801 |
F-21
(Segmentation)
The G&NS segment includes the network services businesses, the manufacture and sales of home gaming products and the production and sales of software. The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The ET&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and the internet-related service business. The I&SS segment includes the image sensors business. The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and the banking business in Japan. All Other consists of various operating activities, including the disc manufacturing and recording media businesses. Sony’s products and services are generally unique to a single operating segment.
(Change in presentation)
Condensed Consolidated Statements of Cash Flows
Certain reclassifications of the condensed consolidated statements of cash flows for the nine months ended December 31, 2022 have been made to conform to the presentation for the nine months ended December 31, 2023.
Subsequent Events
Transfer of a portion of shares of Sony Payment Services Inc.
On January 31, 2024, Sony Bank Inc. (“Sony Bank”), a wholly-owned subsidiary of Sony, transferred a portion of its shares of Sony Payment Services Inc. (“Sony Payment Services”), a consolidated subsidiary of Sony Bank, to a special purpose company established by private equity funds which are managed by Blackstone Inc. and its affiliates. Upon the transfer, Sony Payment Services became an affiliate of Sony accounted for using the equity method and Sony expects to record a total of approximately 20 billion yen as operating income for the fiscal year ending March 31, 2024, reflecting both a realized gain for the shares transferred and a remeasurement gain based on the fair value of the shares Sony will continue to hold after the transfer. The amounts of assets and liabilities of Sony Payment Services to be derecognized as a result of the transfer are not material.
Commencement of Preparations for Partial Spin-off of Financial Services Business
On February 14, 2024, Sony Group Corporation decided to begin concrete preparations for the execution of a partial spin-off (the “Spin-off”) of Sony Financial Group Inc. (“SFGI”), its wholly-owned subsidiary, which operates the Financial Services business, and the listing of the shares of SFGI.
The impact of the execution of the Spin-off on Sony’s results of operations and financial positions has not been determined at this time. However, prior to the execution of the Spin-off, the Financial Services business will be presented separately as a discontinued operation in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations.” And upon the execution of the Spin-off, Sony will apply accounting for the loss of control of the Financial Services business in accordance with IFRS 10 “Consolidated Financial Statements.”
F-22