6-K 1 a53509002.htm SONY GROUP CORPORATION 6-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of AUGUST 2023
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: August 9, 2023

List of materials

Documents attached hereto:
 
i) Press release: Quarterly Financial Statements for the First Quarter Ended June 30, 2023 and Outlook for the Fiscal Year Ending March 31, 2024

Quarterly Financial Statements
for the First Quarter Ended June 30, 2023
And
Outlook for the Fiscal Year Ending March 31, 2024

August 9, 2023
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 June 30)
F-3
Condensed Consolidated Statements of Comprehensive Income (Three months ended June 30)
F-4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Three months ended June 30)
F-5
Condensed Consolidated Statements of Cash Flows (Three months ended June 30)
F-6
Notes to Condensed Consolidated Financial Statements
F-8
-      Business Segment Information
F-8
-      Going Concern Assumption
F-14
-      Accounting Policy and Other Information
F-14
   
Results for Adjusted OIBDA and Adjusted EBITDA for the Three Months Ended June 30, 2023
1
   
Outlook for the Fiscal Year Ending March 31, 2024
2
   
Supplemental Information
5
   
Cautionary Statement
10

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 months ended June 30, 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-14 for more details.

(Unaudited)
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Position

   
Yen in millions
  
   
April 1,
2022
Restated
    
March 31,
2023
Restated
    
June 30,
2023
    
Change from
March 31, 2023
  
ASSETS
                        
Current assets:
                        
Cash and cash equivalents
    
2,049,636
      
1,480,900
      
1,532,099
      
51,199
  
Investments and advances in the Financial Services segment
    
360,681
      
328,358
      
356,329
      
27,971
  
Trade and other receivables, and contract assets
    
1,621,629
      
1,770,948
      
1,891,298
      
120,350
  
Inventories
    
874,007
      
1,468,042
      
1,829,510
      
361,468
  
Other financial assets
    
149,301
      
110,950
      
197,196
      
86,246
  
Other current assets
    
428,522
      
563,334
      
669,220
      
105,886
  
Total current assets
    
5,483,776
      
5,722,532
      
6,475,652
      
753,120
  
Non-current assets:
                                
Investments accounted for using the equity method
    
268,513
      
325,220
      
359,223
      
34,003
  
Investments and advances in the Financial Services segment
    
18,251,612
      
18,237,761
      
18,669,354
      
431,593
  
Property, plant and equipment
    
1,113,213
      
1,344,864
      
1,378,300
      
33,436
  
Right-of-use assets
    
413,430
      
478,063
      
483,823
      
5,760
  
Goodwill
    
952,895
      
1,275,112
      
1,400,107
      
124,995
  
Content assets
    
1,342,046
      
1,561,882
      
1,758,548
      
196,666
  
Other intangible assets
    
450,103
      
563,842
      
580,101
      
16,259
  
Deferred tax assets
    
300,924
      
393,107
      
439,790
      
46,683
  
Other financial assets
    
696,306
      
832,344
      
864,815
      
32,471
  
Other non-current assets
    
379,137
      
419,368
      
450,304
      
30,936
  
Total non-current assets
    
24,168,179
      
25,431,563
      
26,384,365
      
952,802
  
Total assets
    
29,651,955
      
31,154,095
      
32,860,017
      
1,705,922
  
(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
    
June 30,
2023
    
Change from
March 31, 2023
  
LIABILITIES
                        
Current liabilities:
                        
Short-term borrowings
    
1,976,553
      
1,914,934
      
2,166,112
      
251,178
  
Current portion of long-term debt
    
171,409
      
187,942
      
179,629
      
(8,313
)
Trade and other payables
    
1,843,338
      
1,866,101
      
2,122,057
      
255,956
  
Deposits from customers in the banking business
    
2,886,361
      
3,163,237
      
3,297,378
      
134,141
  
Income taxes payables
    
105,437
      
154,543
      
142,510
      
(12,033
)
Participation and residual liabilities in the Pictures segment
    
190,162
      
230,223
      
248,500
      
18,277
  
Other financial liabilities
    
127,079
      
108,049
      
146,398
      
38,349
  
Other current liabilities
    
1,465,326
      
1,693,380
      
1,651,835
      
(41,545
)
Total current liabilities
    
8,765,665
      
9,318,409
      
9,954,419
      
636,010
  
Non-current liabilities:
                                
Long-term debt
    
1,203,646
      
1,767,696
      
1,807,171
      
39,475
  
Defined benefit liabilities
    
254,548
      
236,121
      
242,620
      
6,499
  
Deferred tax liabilities
    
120,582
      
117,621
      
138,210
      
20,589
  
Insurance contract liabilities
    
13,042,875
      
12,364,973
      
12,888,235
      
523,262
  
Participation and residual liabilities in the Pictures segment
    
220,113
      
192,952
      
206,077
      
13,125
  
Other financial liabilities
    
231,463
      
371,580
      
397,418
      
25,838
  
Other non-current liabilities
    
106,481
      
127,593
      
147,289
      
19,696
  
Total non-current liabilities
    
15,179,708
      
15,178,536
      
15,827,020
      
648,484
  
Total liabilities
    
23,945,373
      
24,496,945
      
25,781,439
      
1,284,494
  
EQUITY
                                
Sony Group Corporation’s stockholders’ equity:
                                
Common stock
    
880,365
      
880,365
      
880,365
      
-
  
Additional paid-in capital
    
1,461,053
      
1,463,807
      
1,479,902
      
16,095
  
Retained earnings
    
4,170,417
      
5,092,442
      
5,261,615
      
169,173
  
Accumulated other comprehensive income
    
(677,989
)
    
(614,570
)
    
(389,839
)
    
224,731
  
Treasury stock, at cost
    
(180,042
)
    
(223,507
)
    
(229,055
)
    
(5,548
)
Equity attributable to Sony Group Corporation’s stockholders
    
5,653,804
      
6,598,537
      
7,002,988
      
404,451
  
Noncontrolling interests
    
52,778
      
58,613
      
75,590
      
16,977
  
Total equity
    
5,706,582
      
6,657,150
      
7,078,578
      
421,428
  
Total liabilities and equity
    
29,651,955
      
31,154,095
      
32,860,017
      
1,705,922
  

F-2
Condensed Consolidated Statements of Income


   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
    
Change
  
Sales and financial services revenue:
                  
Sales
    
2,016,037
      
2,284,543
      
268,506
  
Financial services revenue
                        
  Insurance revenue
    
135,570
      
142,750
      
7,180
  
  Other financial services revenue
    
78,153
      
536,359
      
458,206
  
  Total financial services revenue
    
213,723
      
679,109
      
465,386
  
Total sales and financial services revenue
    
2,229,760
      
2,963,652
      
733,892
  
Costs and expenses:
                        
Cost of sales
    
1,391,667
      
1,624,510
      
232,843
  
Selling, general and administrative
    
406,766
      
474,939
      
68,173
  
Financial services expenses
                        
  Insurance service expenses
    
89,506
      
97,366
      
7,860
  
  Insurance finance expenses (income)
    
(38,185
)
    
489,352
      
527,537
  
  Other financial services expenses
    
23,143
      
37,825
      
14,682
  
  Total financial services expenses
    
74,464
      
624,543
      
550,079
  
Other operating (income) expense, net
    
(2,725
)
    
(8,742
)
    
(6,017
)
Total costs and expenses
    
1,870,172
      
2,715,250
      
845,078
  
Share of profit (loss) of investments accounted for using the equity method
    
5,277
      
4,640
      
(637
)
Operating income
    
364,865
      
253,042
      
(111,823
)
Financial income
    
14,382
      
31,912
      
17,530
  
Financial expenses
    
29,969
      
8,920
      
(21,049
)
Income before income taxes
    
349,278
      
276,034
      
(73,244
)
Income taxes
    
88,074
      
58,092
      
(29,982
)
Net income
    
261,204
      
217,942
      
(43,262
)
                         
Net income attributable to
                        
Sony Group Corporation’s stockholders
    
261,094
      
217,545
      
(43,549
)
Noncontrolling interests
    
110
      
397
      
287
  

   
Yen
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
    
Change
  
Per share data:
                  
  Net income attributable to Sony Group Corporation’s stockholders
                  
  - Basic
    
211.16
      
176.26
      
(34.90
)
  - Diluted
    
209.66
      
175.67
      
(33.99
)

F-3
Condensed Consolidated Statements of Comprehensive Income

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
    
Change
  
  Net income
    
261,204
      
217,942
      
(43,262
)
  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
    
(2,118
)
    
(6,917
)
    
(4,799
)
Remeasurement of defined benefit pension plans
    
116
      
(425
)
    
(541
)
Share of other comprehensive income of investments accounted for using the equity method
    
208
      
139
      
(69
)
  Items that may be reclassified subsequently to profit or loss
                        
Changes in debt instruments measured at fair value through other comprehensive income
    
(571,849
)
    
(72,542
)
    
499,307
  
Cash flow hedges
    
(1,117
)
    
(2,230
)
    
(1,113
)
Insurance finance income (expenses)
    
506,715
      
20,517
      
(486,198
)
Exchange differences on translating foreign operations
    
247,333
      
285,771
      
38,438
  
Share of other comprehensive income of investments accounted for using the equity method
    
2,679
      
3,150
      
471
  
Other
    
(76
)
    
54
      
130
  
  Total other comprehensive income, net of tax
    
181,891
      
227,517
      
45,626
  
  Comprehensive income
    
443,095
      
445,459
      
2,364
  
                         
  Comprehensive income attributable to
                        
  Sony Group Corporation’s stockholders
    
439,546
      
443,428
      
3,882
  
  Noncontrolling interests
    
3,549
      
2,031
      
(1,518
)

F-4
Condensed Consolidated Statements of Changes in Stockholders’ Equity

   
Yen in millions
  
   
Common
stock
    
Additional
paid-in
capital
    
Retained
earnings
    
Accumulated
other
comprehensive
income
    
Treasury
stock, at
cost
    
Sony Group
Corporation’s
stockholders’
equity
    
Noncontrolling
interests
    
Total equity
  
Balance at April 1, 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
              
261,094
                
261,094
    
110
    
261,204
  
Other comprehensive income, net of tax
                    
178,452
          
178,452
    
3,439
    
181,891
  
Total comprehensive income (restated)
              
261,094
    
178,452
          
439,546
    
3,549
    
443,095
  
Transfer to retained earnings
              
116
    
(116
)
        
–
          
–
  
Transactions with stockholders and other:
                                                
Exercise of stock acquisition rights
        
(1
)
  
(8
)
        
943
    
934
          
934
  
Conversion of convertible bonds
        
(125
)
  
(1,191
)
        
3,775
    
2,459
          
2,459
  
Stock-based compensation
        
2,493
                      
2,493
          
2,493
  
Dividends declared
              
(43,295
)
              
(43,295
)
  
(4,219
)
  
(47,514
)
Purchase of treasury stock
                          
(12,805
)
  
(12,805
)
        
(12,805
)
Reissuance of treasury stock
        
1
                
2
    
3
          
3
  
Transactions with noncontrolling interests shareholders and other
        
(4,283
)
                    
(4,283
)
  
2,257
    
(2,026
)
Restated balance at June 30, 2022
  
880,365
    
1,459,138
    
4,387,133
    
(499,653
)
  
(188,127
)
  
6,038,856
    
54,365
    
6,093,221
  

   
Yen in millions
  
   
Common
stock
    
Additional
paid-in
capital
    
Retained
earnings
    
Accumulated
other
comprehensive
income
    
Treasury
stock, at
cost
    
Sony Group
Corporation’s
stockholders’
equity
    
Noncontrolling
interests
    
Total equity
  
Balance at April 1, 2023
  
880,365
    
1,463,807
    
5,092,442
    
(614,570
)
  
(223,507
)
  
6,598,537
    
58,613
    
6,657,150
  
Comprehensive income:
                                                
Net income
              
217,545
                
217,545
    
397
    
217,942
  
Other comprehensive income, net of tax
                    
225,883
          
225,883
    
1,634
    
227,517
  
Total comprehensive income
              
217,545
    
225,883
          
443,428
    
2,031
    
445,459
  
Transfer to retained earnings
              
1,152
    
(1,152
)
        
–
          
–
  
Transactions with stockholders and other:
                                                
Exercise of stock acquisition rights
        
(1
)
  
(144
)
        
4,600
    
4,455
          
4,455
  
Stock-based compensation
        
3,127
                      
3,127
          
3,127
  
Dividends declared
              
(49,380
)
              
(49,380
)
  
(1,604
)
  
(50,984
)
Purchase of treasury stock
                          
(10,150
)
  
(10,150
)
        
(10,150
)
Reissuance of treasury stock
        
1
                
2
    
3
          
3
  
Transactions with noncontrolling interests shareholders and other
        
12,968
                      
12,968
    
16,550
    
29,518
  
Balance at June 30, 2023
  
880,365
    
1,479,902
    
5,261,615
    
(389,839
)
  
(229,055
)
  
7,002,988
    
75,590
    
7,078,578
  

F-5
Condensed Consolidated Statements of Cash Flows

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
Cash flows from operating activities:
            
  Income before income taxes
    
349,278
      
276,034
  
  Adjustments to reconcile income before income taxes to net cash used in operating activities:
                
  Depreciation and amortization, including amortization of contract costs
    
245,471
      
251,767
  
  Other operating (income) expense, net
    
(2,725
)
    
(8,742
)
  (Gain) loss on securities, net (other than Financial Services segment)
    
21,197
      
(14,189
)
  Share of (profit) loss of investments accounted for using the equity method, net of dividends
    
(145
)
    
2,275
  
  Changes in assets and liabilities:
                
Increase in trade receivables and contract assets
    
(37,107
)
    
(11,342
)
Increase in inventories
    
(176,257
)
    
(283,152
)
Increase in investments and advances in the Financial Services segment
    
(338,551
)
    
(560,038
)
Increase in content assets
    
(125,595
)
    
(137,465
)
Increase (decrease) in trade payables
    
(6,828
)
    
174,512
  
Increase in insurance contract liabilities, net of insurance contract assets
    
9,181
      
561,732
  
Increase in deposits from customers in the banking business
    
83,965
      
144,119
  
Decrease in borrowings in the life insurance business and the banking business
    
(102,932
)
    
(54,691
)
Increase (decrease) in taxes payable other than income taxes, net
    
(19,219
)
    
20,014
  
(Increase) decrease in other financial assets and other current assets
    
1,358
      
(34,283
)
Decrease in other financial liabilities and other current liabilities
    
(169,890
)
    
(130,303
)
  Income taxes paid
    
(65,398
)
    
(121,147
)
  Other
    
(95,821
)
    
(87,770
)
 Net cash used in operating activities
    
(430,018
)
    
(12,669
)
(Continued on the following page.)

F-6
Condensed Consolidated Statements of Cash Flows (Continued)

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
  Cash flows from investing activities:
            
Payments for property, plant and equipment and other intangible assets
    
(106,968
)
    
(130,501
)
Proceeds from sales of property, plant and equipment and other intangible assets
    
2,372
      
6,235
  
Payments for investments and advances (other than Financial Services segment)
    
(146,838
)
    
(21,319
)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
    
3,645
      
4,410
  
Payments for purchases of businesses
    
(44,605
)
    
(59,480
)
Other
    
(22,663
)
    
2,008
  
Net cash used in investing activities
    
(315,057
)
    
(198,647
)
  Cash flows from financing activities:
                
Increase in short-term borrowings, net
    
48,013
      
294,039
  
Proceeds from issuance of long-term debt
    
5,955
      
5,599
  
Payments of long-term debt
    
(25,382
)
    
(28,414
)
Dividends paid
    
(42,932
)
    
(48,955
)
Payments for purchases of treasury stock
    
(12,805
)
    
(10,150
)
Other
    
(2,826
)
    
1,748
  
Net cash provided by (used in) financing activities
    
(29,977
)
    
213,867
  
  Effect of exchange rate changes on cash and cash equivalents
    
97,283
      
48,648
  
  Net increase (decrease) in cash and cash equivalents
    
(677,769
)
    
51,199
  
  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
    
1,371,867
      
1,532,099
  

F-7
Notes to Condensed Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
    
Change
  
Sales and financial services revenue:
                  
Game & Network Services -
                  
Customers
    
588,461
      
755,003
      
166,542
  
Intersegment
    
15,655
      
16,877
      
1,222
  
Total
    
604,116
      
771,880
      
167,764
  
Music -
                        
Customers
    
305,353
      
355,756
      
50,403
  
Intersegment
    
2,717
      
2,473
      
(244
)
Total
    
308,070
      
358,229
      
50,159
  
Pictures -
                        
Customers
    
341,247
      
320,178
      
(21,069
)
Intersegment
    
130
      
188
      
58
  
Total
    
341,377
      
320,366
      
(21,011
)
Entertainment, Technology & Services -
                        
Customers
    
543,906
      
563,292
      
19,386
  
Intersegment
    
8,404
      
8,491
      
87
  
Total
    
552,310
      
571,783
      
19,473
  
Imaging & Sensing Solutions -
                        
Customers
    
219,223
      
270,476
      
51,253
  
Intersegment
    
18,619
      
22,264
      
3,645
  
Total
    
237,842
      
292,740
      
54,898
  
Financial Services -
                        
Customers
    
213,723
      
679,109
      
465,386
  
Intersegment
    
2,299
      
2,302
      
3
  
Total
    
216,022
      
681,411
      
465,389
  
All Other -
                        
Customers
    
15,557
      
16,402
      
845
  
Intersegment
    
3,777
      
3,091
      
(686
)
Total
    
19,334
      
19,493
      
159
  
Corporate and elimination
    
(49,311
)
    
(52,250
)
    
(2,939
)
Consolidated total
    
2,229,760
      
2,963,652
      
733,892
  

Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with the Entertainment, Technology & Services (“ET&S”) segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. Imaging & Sensing Solutions (“I&SS”) intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S segment. Corporate and elimination includes certain brand and patent royalty income.

F-8
Segment profit (loss)

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
    
Change
  
Operating income (loss):
                  
Game & Network Services
    
52,762
      
49,160
      
(3,602
)
Music
    
60,973
      
73,380
      
12,407
  
Pictures
    
50,655
      
15,971
      
(34,684
)
Entertainment, Technology & Services
    
53,568
      
55,646
      
2,078
  
Imaging & Sensing Solutions
    
21,689
      
12,731
      
(8,958
)
Financial Services
    
139,208
      
54,514
      
(84,694
)
All Other
    
2,865
      
2,475
      
(390
)
Total
    
381,720
      
263,877
      
(117,843
)
Corporate and elimination
    
(16,855
)
    
(10,835
)
    
6,020
  
Consolidated operating income
    
364,865
      
253,042
      
(111,823
)

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-9
(Sales to Customers by Product Category)

　　The following table is a breakdown of sales and financial services revenue to external customers by product category for each segment.  Sony management views each segment as a single operating segment.

   
Yen in millions
  
   
Three months ended June 30
  
Sales and financial services revenue:
  
2022
Restated
    
2023
    
Change
  
Game & Network Services
                  
Digital Software and Add-on Content
    
285,845
      
365,346
      
79,501
  
Network Services
    
106,523
      
124,499
      
17,976
  
Hardware and Others
    
196,093
      
265,158
      
69,065
  
Total
    
588,461
      
755,003
      
166,542
  
Music
                        
Recorded Music - Streaming
    
139,111
      
164,887
      
25,776
  
Recorded Music - Others
    
60,456
      
72,885
      
12,429
  
Music Publishing
    
63,057
      
75,139
      
12,082
  
Visual Media and Platform
    
42,729
      
42,845
      
116
  
Total
    
305,353
      
355,756
      
50,403
  
Pictures
                        
Motion Pictures
    
123,125
      
125,504
      
2,379
  
Television Productions
    
139,161
      
104,231
      
(34,930
)
Media Networks
    
78,961
      
90,443
      
11,482
  
Total
    
341,247
      
320,178
      
(21,069
)
Entertainment, Technology & Services
                        
Televisions
    
141,793
      
135,982
      
(5,811
)
Audio and Video
    
91,060
      
89,149
      
(1,911
)
Still and Video Cameras
    
139,703
      
161,874
      
22,171
  
Mobile Communications
    
99,030
      
87,362
      
(11,668
)
Other
    
72,320
      
88,925
      
16,605
  
Total
    
543,906
      
563,292
      
19,386
  
Imaging & Sensing Solutions
    
219,223
      
270,476
      
51,253
  
Financial Services
    
213,723
      
679,109
      
465,386
  
All Other
    
15,557
      
16,402
      
845
  
Corporate
    
2,290
      
3,436
      
1,146
  
Consolidated total
    
2,229,760
      
2,963,652
      
733,892
  

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-10
(Condensed Financial Services Financial Statements)
　　The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not in accordance with IFRS, which is used by Sony to prepare its condensed consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s condensed consolidated financial statements. Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment. The figures shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of each. The condensed consolidated financial statements column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.

Condensed Statements of Financial Position

   
Yen in millions
  
   
Financial Services
  
Sony without
Financial Services
  
Consolidated
  
   
April 1,
2022
Restated
  
March 31,
2023
Restated
  
June 30,
2023
  
April 1,
2022
Restated
  
March 31,
2023
Restated
  
June 30,
2023
  
April 1,
2022
Restated
  
March 31,
2023
Restated
  
June 30,
2023
  
  ASSETS
                                      
Current assets:
                                      
Cash and cash equivalents
  
¥
889,140
  
¥
756,493
  
¥
816,248
  
¥
1,160,496
  
¥
724,407
  
¥
715,851
  
¥
2,049,636
  
¥
1,480,900
  
¥
1,532,099
  
Investments and advances in the Financial Services segment
    
360,681
    
328,358
    
356,329
    
–
    
–
    
–
    
360,681
    
328,358
    
356,329
  
Trade and other receivables, and contract assets
    
163,037
    
127,413
    
149,325
    
1,478,620
    
1,668,257
    
1,763,614
    
1,621,629
    
1,770,948
    
1,891,298
  
Inventories
    
–
    
–
    
–
    
874,007
    
1,468,042
    
1,829,510
    
874,007
    
1,468,042
    
1,829,510
  
Other financial assets
    
81,174
    
47,044
    
60,339
    
68,124
    
63,906
    
136,855
    
149,301
    
110,950
    
197,196
  
Other current assets
    
27,893
    
16,029
    
37,587
    
450,953
    
562,442
    
650,681
    
428,522
    
563,334
    
669,220
  
  Total current assets
    
1,521,925
    
1,275,337
    
1,419,828
    
4,032,200
    
4,487,054
    
5,096,511
    
5,483,776
    
5,722,532
    
6,475,652
  
Non-current assets:
                                                        
Investments accounted for using the equity method
    
–
    
–
    
–
    
268,513
    
325,220
    
359,223
    
268,513
    
325,220
    
359,223
  
Investments and advances in the Financial Services segment
    
18,251,612
    
18,237,761
    
18,669,354
    
–
    
–
    
–
    
18,251,612
    
18,237,761
    
18,669,354
  
Investments in Financial Services, at cost
    
–
    
–
    
–
    
550,483
    
550,483
    
550,483
    
–
    
–
    
-
  
Property, plant and equipment
    
18,010
    
15,316
    
15,160
    
1,095,241
    
1,329,219
    
1,362,812
    
1,113,213
    
1,344,864
    
1,378,300
  
Right-of-use assets
    
73,774
    
84,023
    
82,030
    
339,658
    
395,210
    
402,964
    
413,430
    
478,063
    
483,823
  
Goodwill and intangible assets, including content assets
    
72,578
    
78,197
    
76,193
    
2,672,466
    
3,322,639
    
3,662,563
    
2,745,044
    
3,400,836
    
3,738,756
  
Deferred tax assets
    
2,335
    
2,687
    
–
    
332,330
    
431,533
    
467,360
    
300,924
    
393,107
    
439,790
  
Other financial assets
    
37,037
    
46,941
    
56,370
    
663,233
    
789,470
    
812,528
    
696,306
    
832,344
    
864,815
  
Other non-current assets
    
167,744
    
172,565
    
169,387
    
284,834
    
319,306
    
353,238
    
379,137
    
419,368
    
450,304
  
  Total non-current assets
    
18,623,090
    
18,637,490
    
19,068,494
    
6,206,758
    
7,463,080
    
7,971,171
    
24,168,179
    
25,431,563
    
26,384,365
  
  Total assets
  
¥
20,145,015
  
¥
19,912,827
  
¥
20,488,322
  
¥
10,238,958
  
¥
11,950,134
  
¥
13,067,682
  
¥
29,651,955
  
¥
31,154,095
  
¥
32,860,017
  
                                                         
  LIABILITIES AND EQUITY
                                                        
Current liabilities:
                                                        
Short-term borrowings
  
¥
1,964,776
  
¥
1,891,856
  
¥
1,830,328
  
¥
183,187
  
¥
211,020
  
¥
515,413
  
¥
2,147,962
  
¥
2,102,876
  
¥
2,345,741
  
Trade and other payables
    
119,017
    
77,703
    
71,093
    
1,744,011
    
1,812,670
    
2,072,273
    
1,843,338
    
1,866,101
    
2,122,057
  
Deposits from customers in the banking business
    
2,886,361
    
3,163,237
    
3,297,378
    
–
    
–
    
–
    
2,886,361
    
3,163,237
    
3,297,378
  
Income taxes payables
    
3,789
    
15,213
    
180
    
101,648
    
139,330
    
142,330
    
105,437
    
154,543
    
142,510
  
Participation and residual liabilities in the Pictures segment
    
–
    
–
    
–
    
190,162
    
230,223
    
248,500
    
190,162
    
230,223
    
248,500
  
Other financial liabilities
    
98,029
    
77,605
    
98,675
    
29,050
    
30,444
    
47,727
    
127,079
    
108,049
    
146,398
  
Other current liabilities
    
218,865
    
194,174
    
230,579
    
1,297,115
    
1,514,792
    
1,440,648
    
1,465,326
    
1,693,380
    
1,651,835
  
  Total current liabilities
    
5,290,837
    
5,419,788
    
5,528,233
    
3,545,173
    
3,938,479
    
4,466,891
    
8,765,665
    
9,318,409
    
9,954,419
  
Non-current liabilities:
                                                        
Long-term debt
    
470,498
    
663,353
    
668,285
    
733,148
    
1,104,344
    
1,138,886
    
1,203,646
    
1,767,696
    
1,807,171
  
Defined benefit liabilities
    
37,167
    
37,183
    
37,638
    
217,381
    
198,938
    
204,982
    
254,548
    
236,121
    
242,620
  
Deferred tax liabilities
    
58,666
    
60,554
    
50,113
    
110,715
    
112,938
    
130,425
    
120,582
    
117,621
    
138,210
  
Insurance contract liabilities
    
13,042,875
    
12,364,973
    
12,888,235
    
–
    
–
    
–
    
13,042,875
    
12,364,973
    
12,888,235
  
Participation and residual liabilities in the Pictures segment
    
–
    
–
    
–
    
220,113
    
192,952
    
206,077
    
220,113
    
192,952
    
206,077
  
Other financial liabilities
    
147,712
    
175,026
    
186,923
    
86,391
    
199,327
    
213,285
    
231,463
    
371,580
    
397,418
  
Other non-current liabilities
    
5,864
    
7,225
    
7,449
    
121,558
    
142,096
    
161,366
    
106,481
    
127,593
    
147,289
  
  Total non-current liabilities
    
13,762,782
    
13,308,314
    
13,838,643
    
1,489,306
    
1,950,595
    
2,055,021
    
15,179,708
    
15,178,536
    
15,827,020
  
  Total liabilities
    
19,053,619
    
18,728,102
    
19,366,876
    
5,034,479
    
5,889,074
    
6,521,912
    
23,945,373
    
24,496,945
    
25,781,439
  
Equity:
                                                        
Stockholders’ equity of Financial Services
    
1,087,948
    
1,180,905
    
1,117,475
    
–
    
–
    
–
    
–
    
–
    
–
  
Stockholders’ equity of Sony without Financial Services
    
–
    
–
    
–
    
5,155,149
    
6,006,267
    
6,474,151
    
–
    
–
    
–
  
Sony Group Corporation’s stockholders’ equity
    
–
    
–
    
–
    
–
    
–
    
–
    
5,653,804
    
6,598,537
    
7,002,988
  
Noncontrolling interests
    
3,448
    
3,820
    
3,971
    
49,330
    
54,793
    
71,619
    
52,778
    
58,613
    
75,590
  
  Total equity
    
1,091,396
    
1,184,725
    
1,121,446
    
5,204,479
    
6,061,060
    
6,545,770
    
5,706,582
    
6,657,150
    
7,078,578
  
  Total liabilities and equity
  
¥
20,145,015
  
¥
19,912,827
  
¥
20,488,322
  
¥
10,238,958
  
¥
11,950,134
  
¥
13,067,682
  
¥
29,651,955
  
¥
31,154,095
  
¥
32,860,017
  

F-11
Condensed Statements of Income

   
Yen in millions
  
   
Three months ended June 30
  
   
Financial Services
    
Sony without
Financial Services
    
Consolidated
  
   
2022
Restated
    
2023
    
2022
Restated
    
2023
    
2022
Restated
    
2023
  
                                     
Sales
  
¥
-
    
¥
-
    
¥
2,017,583
    
¥
2,285,789
    
¥
2,016,037
    
¥
2,284,543
  
Financial services revenue
    
216,022
      
681,411
      
-
      
-
      
213,723
      
679,109
  
Total sales and financial services revenue
    
216,022
      
681,411
      
2,017,583
      
2,285,789
      
2,229,760
      
2,963,652
  
                                                 
Cost of sales
    
-
      
-
      
1,394,565
      
1,627,562
      
1,391,667
      
1,624,510
  
Selling, general and administrative
    
-
      
-
      
405,410
      
473,129
      
406,766
      
474,939
  
Financial services expenses
    
76,763
      
626,846
      
-
      
-
      
74,464
      
624,543
  
Other operating (income) expense, net
    
51
      
51
      
(2,776
)
    
(8,793
)
    
(2,725
)
    
(8,742
)
Total costs and expenses
    
76,814
      
626,897
      
1,797,199
      
2,091,898
      
1,870,172
      
2,715,250
  
                                                 
Share of profit (loss) of investments accounted for using the equity method
    
-
      
-
      
5,277
      
4,640
      
5,277
      
4,640
  
                                                 
Operating income
    
139,208
      
54,514
      
225,661
      
198,531
      
364,865
      
253,042
  
                                                 
Financial income (expenses), net
    
-
      
-
      
25,747
      
73,028
      
(15,587
)
    
22,992
  
                                                 
Income before income taxes
    
139,208
      
54,514
      
251,408
      
271,559
      
349,278
      
276,034
  
                                                 
Income taxes
    
39,437
      
15,905
      
48,609
      
42,187
      
88,074
      
58,092
  
                                                 
Net income
    
99,771
      
38,609
      
202,799
      
229,372
      
261,204
      
217,942
  
                                                 
      Net income of Financial Services
  
¥
99,664
    
¥
38,458
    
¥
-
    
¥
-
    
¥
-
    
¥
-
  
                                                 
      Net income of Sony without Financial Services
  
¥
-
    
¥
-
    
¥
202,796
    
¥
229,126
    
¥
-
    
¥
-
  
                                                 
      Net income attributable to Sony Group Corporation’s stockholders
  
¥
-
    
¥
-
    
¥
-
    
¥
-
    
¥
261,094
    
¥
217,545
  
                                                 
      Net income attributable to noncontrolling interests
  
¥
107
    
¥
151
    
¥
3
    
¥
246
    
¥
110
    
¥
397
  

F-12
Condensed Statements of Cash Flows

   
Yen in millions
  
   
Three months ended June 30
  
   
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
  
¥
139,208
    
¥
54,514
    
¥
251,408
    
¥
271,559
    
¥
349,278
    
¥
276,034
  
Adjustments to reconcile income (loss) before income taxes to net cash provided by (used in) operating activities:
                                                
Depreciation and amortization, including amortization of contract costs
    
6,377
      
6,915
      
239,094
      
244,852
      
245,471
      
251,767
  
Other operating (income) expense, net
    
51
      
51
      
(2,776
)
    
(8,793
)
    
(2,725
)
    
(8,742
)
(Gain) loss on securities, net (other than Financial Services segment)
    
–
      
–
      
21,197
      
(14,189
)
    
21,197
      
(14,189
)
Changes in assets and liabilities:
                                                
(Increase) decrease in trade receivables and contract assets
    
(7,090
)
    
(21,911
)
    
(33,625
)
    
13,650
      
(37,107
)
    
(11,342
)
(Increase) decrease in inventories
    
–
      
–
      
(176,257
)
    
(283,152
)
    
(176,257
)
    
(283,152
)
(Increase) decrease in investments and advances in the Financial Services segment
    
(338,551
)
    
(560,038
)
    
–
      
–
      
(338,551
)
    
(560,038
)
(Increase) decrease in content assets
    
–
      
–
      
(125,595
)
    
(137,465
)
    
(125,595
)
    
(137,465
)
Increase (decrease) in trade payables
    
(15,854
)
    
(3,391
)
    
12,505
      
174,965
      
(6,828
)
    
174,512
  
Increase (decrease) in insurance contract liabilities, net of insurance contract assets
    
9,181
      
561,732
      
–
      
–
      
9,181
      
561,732
  
Increase (decrease) in deposits from customers in the banking business
    
83,965
      
144,119
      
–
      
–
      
83,965
      
144,119
  
Increase (decrease) in borrowings in the life insurance business and the banking business
    
(102,932
)
    
(54,691
)
    
–
      
–
      
(102,932
)
    
(54,691
)
Increase (decrease) in taxes payable other than income taxes, net
    
14,333
      
27,995
      
(33,552
)
    
(7,981
)
    
(19,219
)
    
20,014
  
Other
    
(9,847
)
    
(37,230
)
    
(319,841
)
    
(334,115
)
    
(329,896
)
    
(371,228
)
  Net cash provided by (used in) operating activities
    
(221,159
)
    
118,065
      
(167,442
)
    
(80,669
)
    
(430,018
)
    
(12,669
)
                                                 
Cash flows from investing activities:
                                                
Payments for property, plant and equipment and other intangible assets
    
(7,121
)
    
(5,602
)
    
(99,929
)
    
(124,929
)
    
(106,968
)
    
(130,501
)
Payments for investments and advances (other than Financial Services segment)
    
–
      
–
      
(146,838
)
    
(21,319
)
    
(146,838
)
    
(21,319
)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
    
–
      
–
      
3,645
      
4,410
      
3,645
      
4,410
  
Other
    
–
      
1
      
(64,896
)
    
(51,238
)
    
(64,896
)
    
(51,237
)
  Net cash provided by (used in) investing activities
    
(7,121
)
    
(5,601
)
    
(308,018
)
    
(193,076
)
    
(315,057
)
    
(198,647
)
                                                 
Cash flows from financing activities:
                                                
Increase (decrease) in borrowings, net
    
(2,757
)
    
(2,671
)
    
31,343
      
273,895
      
28,586
      
271,224
  
Dividends paid
    
(41,335
)
    
(50,037
)
    
(42,932
)
    
(48,955
)
    
(42,932
)
    
(48,955
)
Other
    
(1
)
    
(1
)
    
(15,630
)
    
(8,399
)
    
(15,631
)
    
(8,402
)
  Net cash provided by (used in) financing activities
    
(44,093
)
    
(52,709
)
    
(27,219
)
    
216,541
      
(29,977
)
    
213,867
  
                                                 
Effect of exchange rate changes on cash and cash equivalents
    
–
      
–
      
97,283
      
48,648
      
97,283
      
48,648
  
                                                 
Net increase (decrease) in cash and cash equivalents
    
(272,373
)
    
59,755
      
(405,396
)
    
(8,556
)
    
(677,769
)
    
51,199
  
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
  
¥
616,767
    
¥
816,248
    
¥
755,100
    
¥
715,851
    
¥
1,371,867
    
¥
1,532,099
  

F-13
Going Concern Assumption
　　Not Applicable

Accounting Policy and Other Information
(Changes in accounting policies)
　　Sony newly adopted the following accounting standards and interpretations from the fiscal year ending March 31, 2024:

IFRS 17 “Insurance Contracts”
　　The IASB issued IFRS 17 “Insurance Contracts” (“IFRS 17”) in May 2017 and Amendments to IFRS 17 in June 2020 and December 2021. IFRS 17 replaces IFRS 4 “Insurance Contracts” and sets out principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of IFRS 17. IFRS 17 provides a general model, supplemented by a specific approach for contracts with direct participation features (the variable fee approach), and a simplified approach (the premium allocation approach) mainly for short-duration contracts.
　　IFRS 17 was effective for Sony as of April 1, 2023. Sony has retrospectively applied changes in accounting policies resulting from the adoption of IFRS 17 unless it was impracticable. Sony applied the modified retrospective approach, which uses reasonable and supportable information, or the fair value approach, which uses the fair value as of April 1, 2022, the transition date for IFRS 17, to identify, recognize and measure certain groups of insurance contracts as of the transition date for IFRS 17, for which it was impracticable to apply the full retrospective approach. Therefore, Sony has restated the condensed consolidated financial statements for comparative periods and the condensed consolidated statement of financial position as of April 1, 2022 on the basis of the retrospective application of IFRS 17. The effects of the retrospective application of IFRS 17 on Sony’s total equity as of April 1, 2022 are presented in the condensed consolidated statements of changes in stockholders’ equity.

(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

   
Yen in millions
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
Net income attributable to Sony Group Corporation’s stockholders
    
261,094
      
217,545
  
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
                
Zero coupon convertible bonds
    
31
      
-
  
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS
computation
    
261,125
      
217,545
  
                 
   
Thousands of shares
  
   
Three months ended June 30
  
   
2022
Restated
      
2023
  
Weighted-average shares outstanding for basic EPS computation
    
1,236,489
      
1,234,242
  
Effect of dilutive securities:
                
Stock options and other
    
4,005
      
4,121
  
Zero coupon convertible bonds
    
4,992
      
-
  
Weighted-average shares for diluted EPS computation
    
1,245,486
      
1,238,363
  
F-14
(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 three months ended June 30, 2022 have been made to conform to the presentation for the three months ended June 30, 2023.


F-15

Results for Adjusted OIBDA and Adjusted EBITDA for the Three Months Ended June 30, 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 decided to disclose 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 months ended June 30, 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 9 for more details, including the formulas and reconciliations for Adjusted OIBDA and Adjusted EBITDA (the same applies below).

   
(Yen in billions)
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
Segment Adjusted OIBDA
  
Game & Network Services (G&NS)
    
70.2
      
75.9
  
Music
    
74.8
      
82.9
  
Pictures
    
61.8
      
28.5
  
Entertainment, Technology & Services (ET&S)
    
76.9
      
80.9
  
Imaging & Sensing Solutions (I&SS)
    
67.3
      
70.0
  
Financial Services
    
145.6
      
61.4
  
All Other, Corporate and elimination
    
(7.8
)
    
(3.5
)
Consolidated Adjusted OIBDA
    
488.9
      
396.1
  
Consolidated Adjusted EBITDA*
    
496.9
      
406.2
  

* 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 April 28, 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
    
April
Forecast
    
August
Forecast
    
Change from
April Forecast
  
Sales *1
    
10,974.4
      
11,500
      
12,200
    
+700 bil
      
+6.1
%
Operating income
    
1,302.4
      
1,170
      
1,170
      
-
      
-
  
Income before income taxes
    
1,274.5
      
1,140
      
1,140
      
-
      
-
  
Net income attributable to Sony Group Corporation’s stockholders
    
1,005.3
      
840
      
860
    
+20 bil
      
+2.4
%
                                         
Adjusted OIBDA
    
1,816.9
      
1,770
      
1,770
      
-
      
-
  
Adjusted EBITDA
    
1,797.6
      
1,750
      
1,750
      
-
      
-
  
                                         
For all segments excluding the Financial Services segment *2
  
March 31, 2023
Results
    
April
Forecast
    
August
Forecast
    
Change from
April Forecast
  
Net cash provided by operating activities
    
415.5
      
1,250
      
1,250
      
-
      
-
  

*1 “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).
*2 Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-11 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates are the following:
 
Assumed foreign exchange rates for the nine
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
April forecast
1 U.S. dollar
approximately 135 yen
approximately 130 yen
1 Euro
approximately 146 yen
approximately 138 yen

Sales are expected to be higher than the April forecast due to higher-than-expected sales in the Financial Services, Game & Network Services (“G&NS”), Music and Entertainment, Technology & Services (“ET&S”) segments, partially offset by lower-than-expected sales in the Pictures and Imaging & Sensing Solutions (“I&SS”) segments.

Operating income is expected to remain unchanged due to an expected increase in operating income in the Music segment, as well as an expected decrease in the operating loss in All Other, Corporate and elimination, substantially offset by an expected decrease in operating income in the I&SS segment.

Income before income taxes is expected to remain unchanged from the April forecast.

Net income attributable to Sony Group Corporation’s stockholders is expected to be higher than the April forecast due to an expected decrease in income tax expense.

Adjusted OIBDA is expected to remain unchanged from the April forecast due to an expected increase in Adjusted OIBDA in the G&NS and Music segments, partially offset by an expected decrease in Adjusted OIBDA in the I&SS segment. Adjusted EBITDA is expected to remain unchanged from the April forecast mainly due to the same factors affecting Adjusted OIBDA.
- 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 9 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
    
April Forecast
    
August
Forecast
  
Game & Network Services (G&NS)
  
Sales
    
3,644.6
      
3,900
      
4,170
  
Operating income
    
250.0
      
270
      
270
  
Adjusted OIBDA
    
337.0
      
365
      
375
  
Music
  
Sales
    
1,380.6
      
1,410
      
1,490
  
Operating income
    
263.1
      
265
      
280
  
Adjusted OIBDA
    
316.4
      
325
      
335
  
Pictures
  
Sales
    
1,369.4
      
1,520
      
1,470
  
Operating income
    
119.3
      
120
      
120
  
Adjusted OIBDA
    
168.2
      
165
      
165
  
Entertainment, Technology & Services (ET&S)
  
Sales
    
2,476.0
      
2,380
      
2,430
  
Operating income
    
179.5
      
180
      
180
  
Adjusted OIBDA
    
276.9
      
280
      
280
  
Imaging & Sensing Solutions (I&SS)
  
Sales
    
1,402.2
      
1,600
      
1,560
  
Operating income
    
212.2
      
200
      
180
  
Adjusted OIBDA
    
408.9
      
445
      
425
  
Financial Services
  
Financial services revenue
    
889.1
      
870
      
1,320
  
Operating income
    
318.1
      
180
      
180
  
Adjusted OIBDA
    
322.4
      
205
      
205
  
All Other, Corporate and elimination
  
Operating loss
    
(39.8
)
    
(45
)
    
(40
)
Adjusted OIBDA
    
(12.9
)
    
(15
)
    
(15
)
Consolidated
  
Sales
    
10,974.4
      
11,500
      
12,200
  
Operating income
    
1,302.4
      
1,170
      
1,170
  
Adjusted OIBDA
    
1,816.9
      
1,770
      
1,770
  
Adjusted EBITDA
    
1,797.6
      
1,750
      
1,750
  

- 3 -
Game & Network Services (G&NS)
Sales are expected to be higher than the April forecast due to an expected increase in sales of non-first-party titles including add-on content and the impact of foreign exchange rates. Operating income is expected to remain unchanged from the April forecast mainly due to the impact of the above-mentioned increase in sales of non-first-party titles and an expected decrease in costs, substantially offset primarily by a deterioration in profitability of PlayStation®5 hardware mainly due to changes in promotions by geographic region and the sales channel mix, as well as the impact of changes in the launch dates of a portion of first-party titles. Adjusted OIBDA is expected to be higher than the April forecast mainly due to the same factors affecting operating income.

Music
Sales are expected to be higher than the April forecast mainly due to the impact of foreign exchange rates. Operating income is expected to be higher than the April forecast primarily due to the positive impact of foreign exchange rates as well as a remeasurement gain resulting from the consolidation of a company previously accounted for using the equity method, recorded during the three months ended June 30, 2023. Adjusted OIBDA is expected to be higher than the April forecast mainly due to the positive impact of foreign exchange rates.

Pictures
Sales are expected to be lower than the April forecast, primarily due to the impact of the strikes conducted by the Writers Guild of America (WGA) and Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA), which are expected to lead to lower revenues mainly due to release date changes for some theatrical releases in Motion Pictures and delays in deliveries of television series in Television Productions, partially offset by the impact of foreign exchange rates. The forecasts for operating income and Adjusted OIBDA remain unchanged from the April forecast, primarily due to the impact of the decrease in sales in connection with the above-mentioned strikes, substantially offset by the contribution from strong performances of films released theatrically in the three months ended June 30, 2023 and the positive impact of foreign exchange rates.

Entertainment, Technology & Services (ET&S)
Sales are expected to be higher than the April forecast primarily due to the impact of foreign exchange rates. The forecasts for operating income and Adjusted OIBDA remain unchanged from the April forecast.

Imaging & Sensing Solutions (I&SS)
Sales are expected to be lower than the April forecast mainly due to lower-than-expected unit sales of image sensors for mobile products, as well as image sensors for industrial and social infrastructure. These decreases in sales are expected to be partially offset by the impact of foreign exchange rates. The forecasts for operating income and Adjusted OIBDA are expected to be lower than the April forecast mainly due to the impact of the above-mentioned expected decrease in sales, partially offset by the positive impact of foreign exchange rates.

Financial Services
Financial services revenue is expected to be higher than the April forecast primarily due to an increase in net gains on investments in the separate accounts at Sony Life Insurance Co., Ltd. (“Sony Life”). Operating income and Adjusted OIBDA are expected to remain unchanged from the April 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.

As mentioned above, the figures for the fiscal year ended March 31, 2023 contained in this earnings release have been restated in accordance with IFRS 17. As a result, financial services revenue for the fiscal year ended March 31, 2023 decreased compared to the figures previously disclosed in the earnings release for the fiscal year ended March 31, 2023. This decrease was mainly due to the amounts equivalent to the surrender benefit, etc., which were previously included in insurance premium revenue, being deducted from the revenue. In addition, operating income and Adjusted OIBDA for the fiscal year ended March 31, 2023 increased mainly due to an impact from a decrease in insurance contract liabilities related to variable life insurance in accordance with a revaluation of insurance contract liabilities under IFRS 17 in the life insurance business.

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.
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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
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The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the three months ended June 30, 2022 and 2023, respectively.

As the results for the three months ended June 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the first quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
Game & Network Services (G&NS)
            
Operating income
    
52.8
      
49.2
  
Depreciation and amortization expense*
    
17.5
      
26.7
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
70.2
      
75.9
  
Music
                
Operating income
    
61.0
      
73.4
  
Depreciation and amortization expense*
    
13.8
      
15.6
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
(6.0
)
Adjusted OIBDA
    
74.8
      
82.9
  
Pictures
                
Operating income
    
50.7
      
16.0
  
Depreciation and amortization expense*
    
11.2
      
12.5
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
61.8
      
28.5
  
Entertainment, Technology & Services (ET&S)
                
Operating income
    
53.6
      
55.6
  
Depreciation and amortization expense*
    
23.4
      
25.2
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
76.9
      
80.9
  
Imaging & Sensing Solutions (I&SS)
                
Operating income
    
21.7
      
12.7
  
Depreciation and amortization expense*
    
45.6
      
57.3
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
67.3
      
70.0
  
Financial Services
                
Operating income
    
139.2
      
54.5
  
Depreciation and amortization expense*
    
6.4
      
6.9
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
145.6
      
61.4
  
All Other, Corporate and elimination
                
Operating loss
    
(14.0
)
    
(8.4
)
Depreciation and amortization expense*
    
6.2
      
4.9
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
-
  
Adjusted OIBDA
    
(7.8
)
    
(3.5
)
Consolidated
                
Operating income
    
364.9
      
253.0
  
Depreciation and amortization expense*
    
124.0
      
149.1
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
(6.0
)
Adjusted OIBDA
    
488.9
      
396.1
  
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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 June 30, 2022 and 2023, respectively.

As the results for the three months ended June 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the first quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
  
   
Three months ended June 30
  
   
2022
Restated
    
2023
  
Net income attributable to Sony Group Corporation’s stockholders
    
261.1
      
217.5
  
Net income attributable to noncontrolling interests
    
0.1
      
0.4
  
Income taxes
    
88.1
      
58.1
  
Interest expenses, net, recorded in Financial income and Financial expense
    
0.8
      
0.5
  
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
    
22.7
      
(13.4
)
Depreciation and amortization expense*
    
124.0
      
149.1
  
(Profit) / loss amount that Sony deems non-recurring**
    
-
      
(6.0
)
Adjusted EBITDA
    
496.9
      
406.2
  

* 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 June 30, 2022. 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 three months ended June 30, 2023.

   
(Yen in billions)
  
   
Three months ended June 30, 2023
  
(Profit) / loss amount that Sony deems non-recurring
      
Remeasurement gain resulting from the consolidation of a company previously accounted for using the equity method (Music segment)
    
(6.0
)
Total
    
(6.0
)

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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
  
- 8 -
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 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
)
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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 situation in Ukraine and Russia could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.



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