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Sony IR Day 2018
May 22, 2018
Sony Corporation
Game & Network Services(G&NS) 3
Music(SME) 20
Music(SMEJ) 31
Pictures 48
Imaging Products & Solutions(IP&S) 68 Mobile Communication(MC)
Operation & Sales Platform 98 Home Entertainment & Sound(HE&S)
Semiconductors 115
Sony IR Day 2018
Game & Network Services SegmentMay 22, 2018
John (Tsuyoshi) KoderaBusiness Executive, Sony Corporation
President & CEO, Sony Interactive Entertainment
Sony IR Day 2018 3
Game & Network Services SegmentAgenda
1. FY2017 Review
2. Strategy from FY2018
Sony IR Day 2018 4
1. FY2017 Review
Game & Network Services Segment
Sony IR Day 2018 5
Game & Network Services Segment
Further expand PlayStation® user base Enhance game line-up Grow PlayStation®Plus
paid subscribers
PlayStation®479M units
cumulative sales as ofMar 31 2018
80M+ MAUAs of Mar 31 2018
PlayStation™Network
PS4 Game Play800M hrs+/week
As of final week of Dec 2017
246M games soldFY2017 PS4 software unit sales
20.8M
26.4M
34.2M
PlayStation®Plus paid subscribers
E/FY17E/FY16E/FY15
FY2017 Key Achievements
Sony IR Day 2018
Challenges and improvements
6
Game & Network Services Segment
PlayStation®VR PlayStation™Vue ForwardWorks
Market & future business model remains uncertain
VR market growthbelow expectation
Improvements required in spite of steady growthUtilizing these businesses to strengthen user engagement is key
Delays in title developmentStill in investment phase
Sony IR Day 2018
FY2017 Operating Profit Variation from FY2016
7
+18%Sales revenue
1,649.8
① ②③ ④ ⑤135.6
177.5
1,943.8
Game & Network Services Segment
(Bil yen)
*1: Impact of foreign exchange fluctuations is calculated using the sales and costs denominated in each currency in FY2017 and comparing them with the previous fiscal year
FY2016Act
FY2017Act
① Profit improvement from hardware cost down etc.
② Profit growth from software sales and add-on contents including network
③ Network services growth mainly with PS Plus paid subscribers
④ Increase in SGA to support network sales growthand R&D
⑤ Impact of exchange rates*1
Operating income
Sony IR Day 2018 8
2. Strategy from FY2018
Game & Network Services Segment
Sony IR Day 2018
Strategy from FY2018 Game & Network Services Segment
Enrich and utilizeexclusive titles
Leverage install base and active user
Grow and improve recurring revenue
FY13 FY14 FY15 FY16 FY17
PS4 cumulative install base
9
Sony IR Day 2018
Strengthen user engagement
10
Game & Network Services Segment
Variety of game models
IP Franchise
eSports
PS VR
PS Vue
User engagement
Enhancedata analytics
Improveuser experience
Balanced game portfolio
F2P
Sony IR Day 2018
The virtuous cycle of PlayStation
11
Game & Network Services Segment
Utilize catalogExclusivity
Strengthen IP
MAU
Retention
Cash Conversion Cycle
Cash Flow
OUTCOMEリカーリング収益の更なる成長と進化
Attractive servicesRich features
Platform ofChoice
Enrich membershipGrow revenue
PS Plus
25Increase playtimeExpand user base
ImproveEcosystem
Sony IR Day 2018
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Mitigate the impact of platform lifecycle
12
Game & Network Services Segment
• Aim to mitigate the impact of platform lifecycle compared to the past cycle and stabilize profit structure.
• Generate cash flow by effectively utilizing 1 trillion yen network business.
O.P. trend(FY1993〜2018)
190
PlayStation®3launch
PlayStation®4launch
PlayStation®2launch
PlayStation®launch
Free Cash flow trend(FY2013〜2017)
5 years cumulative700 Bil-yen+
(Bil yen)
Sony IR Day 2018
FY2018 Operating Profit Variation from FY2017
13
1,943.8
*1: Impact of foreign exchange fluctuations is calculated using the sales and costs denominated in each currency in FY2018 and comparing them with the previous fiscal year.
1,900① Hardware unit sales decline and cost increase
② Profit growth from game software sales and add-on contents growth including network
③ Network services growth mainly with PS Plus paid subscribers
④ Increase in R&D and SGA etc.
⑤ Impact of exchange rates*1
Game & Network Services Segment
Sales revenue
(Bil yen)
FY2017Act
FY2018Apr Fct
① ②
③ ④ ⑤177.5 190
Operating income
Sony IR Day 2018
FY2020 Target
14
Game & Network Services Segment
Sales revenue (For Reference) 1,800 Bil-yen
Operating Profit 130〜170 Bil-yen
190
130
170
O.P trend(FY1993〜2018, FY2020 Target)
(Bil-yen)
Sony IR Day 2018
We were aiming 1M units. We are aiming 100M MAU. 1994 From now
Sony IR Day 2018
Music SegmentMay 22, 2018
Sony IR Day 2018
Music SegmentSony Music Business Overview
Sony Music Entertainment (“SME”)
Sony/ATV Music Publishing (“S/ATV”)
Sony Music Entertainment Japan (“SMEJ”)
EMI Music Publishing (“EMI”)
Outside Sales (FYE18 ACT)
Recorded Music: 57%
SME:
SMEJ:Music Publishing: 9%
Visual Media & Platform: 34%
SMEJ:
SME:
(Equity Method)
17
Sony IR Day 2018 18
FYE21 Financial Target
Operating Income: 110~130 billion yen
※ Sales Amount (For Reference): 800 billion yen
Music Segment
Sony IR Day 2018
Music Segment (SME)May 22, 2018
Business ExecutiveSony Corporation
Chief Executive OfficerSony Music Entertainment
Rob Stringer
Chief Operating OfficerSony Music Entertainment
Kevin Kelleher
Sony IR Day 2018
Sony Music FYE18 Achievements and Highlights
20
Stronger GrowthGlobal Market
(ex Japan)
Stronger GrowthGlobal Market
(ex Japan)
Strong Financial Results
Strong Financial Results
Streaming
+44%Digital Video
+42%Total Market
+10.5%
Revenue OperatingIncome
OperatingMargin
CashFlow
Year over Yearincreases in:
A Global LeaderA Global Leader #2Global Music Company
25.1%Market Share
Sony IR Day 2018 21
Strong Repertoire Performance
P!nk
Rag’n’Bone Man
Harry Styles
Chainsmokers
Chainsmokers
DJ Khaled
Something Just Like This
Closer
I’m The One
Beautiful Trauma
Human
Harry Styles
21 Savage
Childish Gambino
Maluma
Camila Cabello
Kane Brown
Khalid
Sony IR Day 2018
Evolution of Streaming Landscape
Healthy Competition and Consumer Choice
Transition Established and Open Developing Markets to
Paid Subscription
Modernize Product andPlan Offerings
Create greater differentiation between paid and free tiers
Construct new product configurations and content to up-sell subscribers
Expand the use of voice, a driverof music consumption in the home and soon in the car
Launch pre-pay subscription options for developing markets
Increase Revenue Per UserDrive Paid Subscription Around the World
unlimited
Established
Developing
CURRENT FOCUS
1 2Strategies:
LONG-TERM FOCUS
SELL
22
Sony IR Day 2018
Strategic Investment In The Orchard
DISTRIBUTION
VIDEO
TECH
MUSIC
23
Sony IR Day 2018
World Class Analytics Capabilities
24
Talent DiscoveryBreaking Hits
Strengthening Artist RelationshipsOptimizing Revenue
Marketing ROI Increasingly Measurable Advanced
Partner Analytics
Digging Deeper To Find Talent
Earlier
Analytics in the Creative
Process
Real Time Sales
Reporting
Predictive Analytics = Measured
Risk Taking
TargetedMarketing and
Promotion
Transparency in Payments
Sony IR Day 2018
Creative, Artist-Centric Approach
25
ArtistRelationships
StreamingGenreFocus
IncreaseCreative
Workforce
Creative &BusinessServices
Creativity &
MusicalInstinct
Sony IR Day 2018
Human Resources Focus
26
Sony IR Day 2018
$1.8 $2.0 $2.1 $2.1 $2.2
$4.0 $3.8 $3.4 $3.2 $2.6
$3.9 $3.6 $3.2 $2.7$2.1
$1.9 $2.7 $4.5 $6.5 $8.2$11.6 $12.1
$13.2$14.5 $15.1
CY14A CY15A CY16A CY17A CY18 Est
Recorded Music Market Profile ($ in billions; excludes Japan)
Source: IFPINote: Digital Figures Include Digital Radio (SoundExchange)
StreamingOther DigitalPhysicalPublic Performance / Sync
Healthy industry performance overall supports SME growth
Three years of solid market growth
Streaming growth more than offsetting declines in physical and download markets
Streaming represents 45% of total market:
- Paid subscription revenue up 50% year over year
- 176 million premium paid subscribers
Expect market growth in 2018
Continued rapid growth of streaming, reaching 54% of total market
Greater download and physical declines
16% of Total
Market23% of Total
Market
34% of Total
Market
54% of Total
Market
45% of Total
Market
27
+4.0%+9.1%
+10.5%
-2.6%
+4.1%
+29%Audio Streaming
-35%Downloads
+15%Video
Sony IR Day 2018
Sony Music Operating Income: FYE17 Act FYE18 Act
FYE17 Act FYE18 Act
1
2 3 1
2
3
Physical & Download
Streaming
All Other (Investments, SG&A)
(US Dollars)
28
Sony IR Day 2018
Sony Music Operating Income: FYE18 Act FYE19 Forecast
FYE18 Act FYE19 Forecast
1
2 3 1
2
3
Physical & Download
Streaming
FX / All Other (Investments, SG&A)
(US Dollars)
29
Business ExecutiveSony Corporation
Representative DirectorChief Executive Officer
Sony Music Entertainment (Japan) Inc.
Michinori Mizuno
Director of BoardCFO, Corporate EVP
Sony Music Entertainment (Japan) Inc.
Toshihiro Konno
Sony IR Day 2018Music Segment (SMEJ)
May 22, 2018
Sony IR Day 2018 31
Agenda
1.Business Outline
2.Mid-Term Vision
3.FY17 Results / FY18 Forecast
Music Segment (SMEJ)
Sony Corporation Investor Relations 32Sony IR Day 2018
1. Business Outline
32
Sony IR Day 2018
Name: Sony Music Entertainment (Japan) Inc.Established: March, 1968Location: 4-5 Rokubancho, Chiyoda-ku, TokyoRepresentative Director: Michinori MizunoNumber of Subsidiaries: Approximately 20
33
Company Profile
Physical
Digital ArtistManagementMusicPublishing
Mobile Game
Other
FY17
Anime
MusicRevenue Breakdown
Music Segment (SMEJ)
Sony IR Day 2018
50 Year Journey 〜 Business Diversity Starting from CBS/Sony 〜
34
MusicBiz
Est. CBS/Sony Records Inc.Began publishing business
Strengthen Music Business by Vertical Integration Diversify Business by Horizontal Expansion
PackageSolution
Biz
TalentManagem
entBiz
Live Solutions
Biz
AnimeBiz
CharacterBiz
1968
Built record factory
ʼ75 began record warehouse / logistics businessʼ78 built recording studios
ʼ87 in-house jacket design
Artist / Talent management
Began Zepp operations
ʼ97 began consignment sales for other companies
ʼ17 first overseas Zepp
Voice actor management
Began music distribution business
ʻ97 est. SPE VISUAL WORKS
ʼ03 changed name to Aniplex, increased investment
ʻ78 est. Sony Creative Products
ProductionStudio
GlobalDistributi
on
Mobile App
GameBiz
ʼ05 est. US-based company
Managed comedian talent
Began distribution of Fate/Grand Order
Music Segment (SMEJ)
Sony IR Day 2018 35
Business Model
Digital
Live
Real
ContentArtists, songs, recorded
music, anime, video, mobile game, characters,
etc.
Music Segment (SMEJ)
Sony Corporation Investor Relations 36Sony IR Day 2018
2. Mid-Term Vision
36
Sony IR Day 2018 37
Mid-term Vision
Road to General Entertainment Company
◆ Creating and Maximizing Hits✓ Strengthen music and anime IP✓ Leverage IP
Music Segment (SMEJ)
Sony IR Day 2018 38
Creating and Maximizing Hits 〜 Strengthen Music and Anime IP 〜
©2016 川原 礫/KADOKAWA アスキー・メディアワークス刊/SAO MOVIE Project
© 2018 Peanuts Worldwide LLC
Music Segment (SMEJ)
Sony IR Day 2018 39
Creating and Maximizing Hits 〜 Leverage IP 〜
Mobile GameTheatrical
TV Broadcast
©TYPE-MOON / FGO PROJECT©TYPE-MOON・ufotable・FSNPC
©TYPE-MOON/Marvelous, Aniplex, Notes, SHAFT
Visual Package MediaMusic
EventIP
Expand Business Domain(Example: Fate Series)
Music Segment (SMEJ)
Sony IR Day 2018 40
Creating and Maximizing Hits 〜 Leverage IP 〜
✔ Fate/Grand Order Retention Initiatives
©TYPE-MOON / FGO PROJECT
©Magica Quartet/Aniplex・Magia Record Partners
✔ New Hit IP-Based Products
Sustainable Growth in Mobile Game Business
©Seed&Flower LLC/Y&N Brothers Inc. ©enish,Inc.
ⓒ乃⽊坂46LLC
Music Segment (SMEJ)
Sony IR Day 2018 41
Mid-term Vision
Road to General Entertainment Company
◆ Overseas Expansion
◆ New Businesses
Music Segment (SMEJ)
Sony IR Day 2018 42
Overseas Expansion - countries/regions
Germany
France China (Shanghai) Representative
Office
Australia
US (LA) Based Company
Live Venues in Asia
New Taipei
Singapore
Kuala Lumpur
Music Segment (SMEJ)
Sony IR Day 2018
New Businesses
43
Sports Event
AI VR
©Sony Music Entertainment(Japan)Inc. ©Intelligent Machines Amazes You Inc. ©Aisii Inc.
Music Segment (SMEJ)
Sony Corporation Investor Relations 44Sony IR Day 2018
3. FY17 Results / FY18 Forecast
44
Sony IR Day 2018 45
FY17 Operating Profit Variance from FY16
FY16 FY17* FY17(Excludes One-Time Factor)
OperatingIncome
Music/AnimeMobile
Game
Other
Gain on Sale of Real
Estate
Music Segment (SMEJ)
Sony IR Day 2018 46
FY18 Operating Profit Forecast Variance from FY17
OperatingIncome
FY18Forecast
Other
FY17*
Music/Anime
Mobile Game
(Excludes One-Time Factor)
Music Segment (SMEJ)
Sony IR Day 2018
Pictures SegmentMay 22, 2018
Business ExecutiveSony Corporation
Chairman and CEOSony Pictures Entertainment Inc.
Tony Vinciquerra
CHAIRMAN & CEO,SONY PICTURESENTERTAINMENT
Sony IR DAY 2018 TOKYO
TO N Y V I N C I Q U E R R A
48
SPE FYE18 Review
$280
$376
FYE17 Actual FYE18 Actual
($ in millions)
SALES
OPERATING INCOME
$8,292 $9,133
REVENUE GREW 10% TO OVER $9 BILLION; OI GREW 34% TO $376 MILLION
1 2 3
1Increase in Motion Pictures’ OI driven by stronger slate in FYE18 (e.g., Jumanji, Spider‐Man: Homecoming, Baby Driver, Peter Rabbit) compared to prior year
4 One‐off charges due to reductions in centralized costs and executive restructuring
3 Media Networks had loss from Ten Sports, a newly acquired business
2In Television Productions, higher licensing revenues for U.S. TV series offset by lower television licensing revenues on catalog product in current year
4
Note: FYE = Fiscal Year Ended (e.g., FYE17 = Fiscal Year Ended March 2017)Source: Pictures Segment Supplemental Data, March 31, 2018* FYE17 operating income excludes the $962 million goodwill impairment write‐down
+10.1%
*
49
Sony IR DAY 2018 TOKYO
52
“GENUINE CINEMATIC CRAFT AND TECHNIQUE” New York Times
“MOST FUN YOU'LL HAVE AT THE MOVIES ALL SUMMER” Rolling Stones
“PURE MOVIE MAGIC” Associated Press
53
56
THEME PARKS + LBE
CONSUMER PRODUCTS
STRENGTHEN LABELS
Four Strategic Objectives
COLUMBIA PICTURES
TRISTAR PICTURES
SONY PICTURES ANIMATION
SCREEN GEMS
SONY PICTURES CLASSICS
AFFIRM FILMS
SONY PICTURES INTERNATIONAL PRODUCTIONS
CONTROL IP FINANCIAL DISCIPLINE
GLOBAL FOCUS
IP
FILM
TV SHOWS
GAMES NEW TECH (VR)
57
TRANSITION TO DIGITAL MARKETING
“THEATRICALITY”TIGHTENWINDOWS
“THE OPPORTUNITY OF URGENCY”
RESHAPING THE ORGANIZATION
58
59
$376$400
FYE18Actual
FYE19Forecast
$9,133 $9,210*+0.8%
ASSUMPTIONS FOR FYE19:
1 Our current projections for the Motion Pictures’ FYE19 slate are lower than FYE18’s very high‐performing slate, and we expect higher unreleased marketing costs
4 Change to GAAP rules and other
3Media Networks growth primarily from Ten Sports, GSN and the Latin America region with general growth across most of the rest of the portfolio
2 Television Productions is forecasting a reduction in OI based on assumptions regarding several series ending, partially offset by new series launching; also planning for higher development spend
Source: Pictures Segment Supplemental Data, March 31, 2018 and SPE Management* FYE19 sales forecast converted at 105 JPY/USD and rounded down to the nearest 10 billion yen to ¥960 billion** FYE19 Operating Income represents best estimate under new GAAP
**
SPE FYE19 Forecast($ in millions)
SALES
OPERATING INCOME
1 2 3 4
64
Operating Income:
Revenue: ¥1,050 Billion ($10 Billion)(For Reference)
¥58 – ¥68 billion($550 – $650 million)
Implied Margin %: 5.5% – 6.5%
SPE FYE 21 Financial Target
*$1 = ¥105
65
66
Sony IR Day 2018
Imaging Products & Solutions SegmentMobile Communications Segment
May 22, 2018
Shigeki IshizukaCorporate Executive Officer, Executive Vice President,
Officer in charge of Imaging Products & Solutions Business/Mobile Communications BusinessSony Corporation
Representative Director and PresidentSony Imaging Products & Solutions Inc.
Sony IR Day 2018
Introduction Imaging Products & Solutions SegmentMobile Communications Segment
Shigeki IshizukaCorporate Executive Officer, Executive Vice President,
Sony Corporation
Sony Imaging Products & Solutions Inc.
Shigeki IshizukaRepresentative Director and President
Mobile Communications SegmentImaging Products & Solutions Segment
Toru KatsumotoHiroshi Kawano
Representative Director and Deputy President
Sony Mobile Communications Inc.
Mitsuya KishidaRepresentative Director and President
Sony Network Communications Inc.
Hirokazu TakagakiPresident and
Representative Director
68
Sony IR Day 2018
Agenda
1. Imaging Products & Solutions Segment
2. Mobile Communications Segment
3. Reference Materials
Ishizuka
Ishizuka/Kishida
Imaging Products & Solutions SegmentMobile Communications Segment
69
Sony Corporation Investor Relations 70Sony IR Day 2018 70
1. Imaging Products & Solutions Segment
Sony IR Day 2018 71
Organization: Sony Imaging Products & Solutions Inc.
Digital Imaging Group Professional Solutions and Services Group
Medical Business Group
Professional Products Group
Imaging Platform: Light to DisplayLight Source DisplayLens Image Sensor g
Image Processing
IPTransmission
FeliCaBusinessDivision
DSC
ILC
Camcorder
LensMedia
SportsEducation
Cinema
Visual Simulation
NetworkCamera
DisplayBroadcastingSystem
Peripheral Medical Devices
Life Science
Surgical Imaging Devices
ProfessionalCamcorder
Imaging Products & Solutions Segment
Sony IR Day 2018 72
FY2017 Review
Sales and operating income increased significantly due to therecovery from the Kumamoto Earthquakes and the impact of forex
Digital Imaging: continued shift to higher value-added, especially in the interchangeable lens camera spaceProfessional Solutions: new solutions service business offset by decrease in existing business sales
OperatingIncome
Sales 579.6
47.3 74.9+27.7655.9
Factor1 2 4
Positive factorsForex impact
Recovery from the Kumamoto Earthquakes(insurance income, sales recovery)Increased value-added (shift to higher value-added models)
Negative factors
FY2017 Operating Income (vs FY2016)
FY16 FY17
(bln yen)
1
2
3
3
Increased Value-Added
Recovery from the
Earthquakes
4 Increase in OPEX(due to increase in sales)
Forex Impact
OPEX
Imaging Products & Solutions Segment
Factor Factor Factor
Sony IR Day 2018 73
FY2018 Forecast
OperatingIncome
Sales 655.9
(bln yen)
74.9 75+0.1
660
FY17 FY18April forecast
Red: negative factorBlue: positive factor
Forex impactImprovement in value-added (shift to higher value-added models)
FY2018 Operating Income (vs FY2017)
1
2 Improvement in Value-Added
Foreximpact
Imaging Products & Solutions Segment
Factor21
Factor
Sony IR Day 2018 74
Mid-Range Plan: Management Policy
Business Foundation・ Sony brand(B2B&C)
Strengthen products & services under the SONY brand
・ Customerʼs Real-Time BenefitCreate customer value with “time”
・ Differentiation by L2D technologyCompetitive advantage derived edge from in-houseproduction technology
Customer Real-Time Benefit
Differentiation byL2D Technology
+SIPS
Strength
Sony Brand(B2B&C)
Quantitative Target
Operating Income Margin: 10% or More
* L2D: Light to Display
*
Imaging Products & Solutions Segment
Sony IR Day 2018
ProductsSolutions
Mid-Range Plan: Business StrategyTech
nologyPF
Create strong products based on our differentiated L2D technology
Strengthen and grow the Solutions Business by delivering Real-Time Benefit
*1 L2D: Light to Display
*1
*2 PF: Platform
Imaging Products & Solutions Segment
Light Source
DisplayLensImage Sensor
Image Processing
IP Transmission
75
Sony IR Day 2018 76
FY2020 Financial Targets
Operating Income: 85~105 billion yen
Maximize profit growth and enterprise valueCreate strong and differentiated products based on L2D technology, deliver Real-Time Benefit, and strengthen and grow the solutions business
※ Sales Amount (For Reference): 700 billion yen
Imaging Products & Solutions Segment
Sony IR Day 2018 77
Digital Imaging Business: Mid-Range Initiatives
Industry Trends Initiatives
Win in an increasingly competitive market and continue to generate high profit
Aim to be the top brand in the overall camera market Strengthen products, especially in the
interchangeable lens camera space Engage the professional market Expand the lens business
Revitalization of the mirrorless camera market
Competitors becoming more aggressive in the market
Expand Lens Lineup Expand Pro-Support Worldwide
Speed
“Camera of the Year” Camera Grand Prix
2018
Basic Resolution
Imaging Products & Solutions Segment
Sony IR Day 2018
Professional Solutions Business: Sales by Business
Broadcasting System
Professional Camcorder
NetworkCamera
Display
Services &Solutions
Media
Sports
B2BEducation, theater,
visual simulation, etc
Imaging Products & Solutions Segment
78
Sony IR Day 2018 79
◆
FY17Actual
◆
FY20Target
・ Develop products which use our L2D technology・ Reduce fixed costs in existing businesses
<Solutions>enhance solutions that deliver Real-Time Benefit
<Products>enhance differentiation and rebuild a stable
profit structure
Sales
OP Margin
■︓Product Sales ■︓Solutions Sales◆︓Professional Solutions Business OP Margin
Full Size Cinema CameraCineAlta “VENICE”
・ Real-time solutions that leverage IP & cloud・ Expand in the sports and B2B arena・ Develop 5G solutions
8K System Camera“UHC-8300”
Proprietary Micro LEDCrystal LED
Imaging Products & Solutions SegmentProfessional Solutions Business: Mid-Range Growth Targets
Sony IR Day 2018 80
Industry Changes andUnderstanding of Challenges Action Plan
■ Changes in the media industry- Rise of the OTT market, industry consolidation and
greater reliance on IP and the cloud ⇒ Greater demand for cost reduction and efficiency
- Full-scale demand for 4K and 8K(Start of satellite and IPTV 4K broadcasting)
- Coming 5G era
■ Growing new market for B2B■ Improving profitability
- Develop 4K & IP products and solutions- Develop technology for the 5G era - Pursue the sports and education markets- Revise our product and business portfolio so
as to better adapt to changes in the industry- Continuous cost reduction and operational
transformation
Examples of Solutions Businesses
Remote Integration “REMI” Learnings Solution “Vision Exchange”
Imaging Products & Solutions SegmentProfessional Solutions Business: Mid-Range Initiatives
Stadium Data CenterControl Room
Network
Sony IR Day 2018
Time
Profit Margin
Life ScienceBusiness
(Research)
Surgical ImagingDevice Business
Life ScienceBusiness
(For Research and Clinical)
Transition from single-device business to high value-added business
Transition from single-device business to high value-added business
Transition from research device business to medical device business
Transition from research device business to medical device business
Printer
Monitor
IP Converter
Cell Analyzer Cell Sorter4K Surgical Endoscope System
Surgical Microscope with 4K 3D Capabilities
Peripheral MedicalDevice Business
SOMED &SolutionsBusiness
Imaging Products & Solutions SegmentMedical Business: Mid-Range Strategy
81
Sony IR Day 2018 82
Reference Materials
Imaging Products & Solutions Segment
Sony IR Day 2018 83
FY2017 Sales by Business Category
Sales650
bln yen
FY2017 Sales by Geographic Area
Sales650
bln yen
Still and Video Cameras
Other
Digital Imaging
Professional
Medical
Imaging Products & Solutions SegmentIP&S Sales by Business Category and Geographic Area
China
Asia
Other
Japan
U.S.
Europe
Sony IR Day 2018
ILC (Incl. Lens): 19% (#3)(#1 in Mirrorless Camera)
DSC: 26% (#2)(#1 in Premium DSC*1)
84
Sony20%
FY2017 Still Camera Market FY2017 Video Camera MarketMarket Size: 1,400 bln yen
ソニーシェア29%
Market Size: 390 bln yen
*1 Premium DSC = DSC with large (1/1.7 inch and over) image sensors or high zoom (20x and over)Source: Sony
Components of Video Camera Pie ChartVideo cameras for consumer(POV + Conventional)
Video cameras for business(Pro-sumer + Professional)
Imaging Products & Solutions SegmentIP&S Key Product Market Share (Revenue Basis)
Sony29%
Sony Corporation Investor Relations 85Sony IR Day 2018
2. Mobile Communications Segment
85
Sony IR Day 2018
Operating loss recorded due to impairment chargeNegative impact of unit sales decrease and sharp increase in component costs were offset by cost reductions; full-year profit was recorded on an operational basis
2
3
4
Smartphone unit sales decrease1(FY16 14.6M → FY17 13.5M units)
Sharp increase in component costs
Improvements in operational efficiency
Negative impact of foreign exchange rates
5 Impairment
FY16 Actual
OperatingIncome
Sales
2 4
-6.5 3.7(excluding
impairment)
1 3
759.110.2
5
-27.6
723.7
FY17 Actual
FY2017 Overview Mobile Communications Segment
(bln yen)
86
Sony IR Day 2018
FY17Actual
OperatingIncome
Sales
2 4
+12.6 -15
1
Smartphone unit sales decrease
3
723.7
-27.6
(FY16: 13.5M → FY17 FCT: 10.0M units)
Improvements in operational efficiency
Positive impact of foreign exchange rates
640
FY18 April Forecast
Impairment
FY2018 Operating Results Forecast
2
3
4
1
Year-on-year profitability improvement by shifting away from less profitable modelsand engaging in continuous operating expense reductions
Mobile Communications Segment
(bln yen)
87
Sony IR Day 2018
Recurring Revenue Business: Stable Profit Structure & Next Steps
FY14 FY15 FY16 FY17
CAGR 7%
• Network quality improvements driving customer satisfaction
• Deploying NURO services to more regions
Devices
SmartHome Healthcare Transportation
Fixed Line Communication Business: Cumulative Subscribers
Going beyond being just an internet service providerMid-Term Vision
Call Centers Data Centers Network*LPWA: Low Power Wide Area
Mobile Communications Segment
CloudLPWA※
Deep Learning
Technology
88
Sony IR Day 2018
Smartphone Business: Review (Accomplishments)
Operating Expenses (billion yen) Warranty-Related CostsForecast from FY15
Actual
-58%
Accelerated reduction through continuous pursuit of further efficiencies
(150 using
FY16 FX rates)
Significant reductions through quality improvements
Mobile Communications Segment
89
Sony IR Day 2018
Smartphone Business: Review (Outstanding Issues)
Issue: not improving product lineup fast enough⁻ Mid-term product planning
and development⁻ Design and development lead
time
Unit Sales (million units)
Mobile Communications Segment
Forecast from FY15
Actual
90
Sony IR Day 2018
FY2018 Business DirectionLean Transformation for Future Growth
FY2018 Business DirectionLean Transformation for Future Growth
Reduce operating expenses & lower break-even point
Smartphone Business: Business Direction
Product SalesManufacturing, Procurement,
Operations
Add to strength and efficiency by leveraging the assets, business know-how and infrastructure of the Sony Group
Mobile Communications Segment
Mid-Term VisionCreating New Value to Customers for the 5G Era
91
Sony IR Day 2018
Smartphone Business: Key Issues
Product Development Process: Rebuild and Improve EfficiencyProduct Development Process: Rebuild and Improve Efficiency
Enhance Product Offerings: Fully Utilize Sonyʼs Technological AssetsEnhance Product Offerings: Fully Utilize Sonyʼs Technological Assets
Design Sensing Battery
Audio Display Wireless Data Transmission Mechatronics
Camera Lens
Mobile Communications Segment
Sony IR Day 2018
Strategic Direction for the 5G Era Mobile Communications Segment
Sony IR Day 2018
Smartphone Business: Sales & Operation Enhancements
Project Europe
Strategic partnerships with operatorswhile bolstering open channel sales
Key Actions• Technological collaboration including
5G launch• Realize efficiencies through the
integration of Sonyʼs electronics sales operations
• Enrich product lineup through entertainment propositions
ManufacturingHigher efficiency realized by automated line introduction
Service evolution through quality improvement
ProcurementCreate long-term partnerships
as “One Sony”
LogisticsUtilize Sonyʼs global network
Accelerate blockchain initiatives
SalesSales Manufacturing, Procurement, Operations
Manufacturing, Procurement, Operations
Mobile Communications Segment
94
Sony IR Day 2018
Smartphone Business: Operating Expenses & Break-Even point
Rebuild product development process and significantly improve efficiency
Leverage Sony Group business know-how and infrastructure to bolster design, manufacturing, sales and operations
-30%
Transformation into a Lean BusinessTransformation into a Lean Business
OPEX
Mobile Communications Segment
95
Sony IR Day 2018
MC Segment: Summary
Recurring Revenue Business: Realizing solid growth by leveraging stable customer base
Smartphone Business: Create a lean, agile business without an excessive focus on revenue and
units sold Build a sustainable business structure through ʻOne Sonyʼ initiatives Steadily implement initiatives to bolster and prepare for the future
Creating New Value to Customers for the 5G EraCreating New Value to Customers for the 5G Era
FY2020 Target: OP: 20~30 billion yenSales Level: 670 billion yen (reference only)
Mobile Communications Segment
96
Sony IR Day 2018
Operation & Sales PlatformHome Entertainment & Sound Segment
May 22, 2018
Ichiro TakagiCorporate Executive Officer, Executive Vice President
Officer in charge of Home Entertainment & Sound Business,In charge of Consumer AV Sales & Marketing, Manufacturing, Logistics, Procurement
Sony Corporation
Representative Director & PresidentSony Visual Products Inc.
Representative Director & PresidentSony Video & Sound Products Inc.
Sony IR Day 2018 98
Agenda
1. End-to-End Operations1. Manufacturing / Procurement / Logistics
2. Sales
2. HE&S Segment1. FY2017 Review
2. FY2018 Action Plan
• TV Business
• Video & Sound Business
• Financial Forecast
3. FY2020 Financial Targets
3. Reference Materials
Sony Corporation Investor Relations 99Sony IR Day 2018 99
1. End-to-End Operations
Sony IR Day 2018 100
Operation PlatformManufacturing /
Procurement / LogisticsSales PlatformBusiness Unit
Product Planning / Design
From April 2015 through March 2018
Operation PlatformManufacturing /
Procurement / LogisticsSales PlatformBusiness Unit
Product Planning / Design
From April 2018, Greater Efficiency of the Value Chain
Room for Improvement
Potential Upside
Operation PlatformManufacturing /
Procurement / LogisticsSales PlatformBusiness Unit
Product Planning / Design
Until March 2015
Collaboration between Business Units and Sales Platform Saved 5 to 15 billion yen of Costs
End-to-End Operations
Sony IR Day 2018 101
Manufacturing
• Align manufacturing strategy with our business strategy while improving efficiency.
• Enhance manufacturing technology, including automation, to support our product strategy.
Procurement
• Leverage key partners to rebuild our procurement strategy to better align with our business
and product strategy.
• Ensure seamless procurement and optimal component costs through One Sony sourcing.
Logistics
• Expand direct shipping and enhance logistical efficiencies based on our sales channel strategy.
• Quickly change transportation methods to adapt to changes in the market environment.
Manufacturing / Procurement / Logistics
Sony IR Day 2018 102
FY16 FY17 FY18
Asia Pacific, Middles East, Latin America, Other
Japan, U.S., Europe
(bln yen)Sonyʼs Sales (by Geographic Region)
FY20
Sales strategy focused on select regions and product categories
Asian Pacific (including China), Middle East, Latin America, Other
Invest primarily in growth areas such as audio
Augment sales operations
Japan, U.S., Europe
Maintain market position
Manage downside risk(Reduce costs and increase profit through better forecasting of market demand and improved supply chain communication)
Sales
Sony Corporation Investor Relations103
Sony IR Day 2018 103
2. HE&S Segment
Sony IR Day 2018 104
Home Entertainment & Sound Segment
FY16 FY17
OperatingIncome
1,222.7
85.8
Sales 1,039.0
(bln yen)ResultsTV Business• Introduction of OLED TVs secured our brand position in the
premium segment of the market.• Profitability improved due to high value-added product strategy
focused on OLED, 4K and large-sized TVs.• Incremental margins improved due to enhanced supply chain
management and better control over inventory in response to changes in the market environment.
Video & Sound Business• Grew sales primarily in the growth area of Audio.• Improved profitability as a result of high value-added products.• Improved branding.
IssuesTV Business• Can improve how we adapt to changes in panel prices.
Video & Sound Business• Can improve operations further.• Can improve collaboration with sales channels.
Operating Income Analysis
58.5
Exchange Rates*1
Cost IncreasePrice
ErosionModel Mix
ImprovementVolume Increase
FY2017 Review
*1: Impact of foreign exchange fluctuations is calculated using the sales and costs denominated in each currency in FY2017 and comparing them with the previous fiscal year.
Sony IR Day 2018
g gyMaintain a stable business by pursuing
a high-value added strategy◆Product Competitiveness
Deliver the best customer experience through our
proprietary technology.
Continue investing in technological innovation for the future.
◆Cost CompetitivenessManage expenses and streamline component procurement.
◆Operational CompetitivenessContinue improving our end-to-end operations (from
production to sales) so as to adapt to changes in the
market.
FY17(実績)
FY18(最新⾒通し)
4K TVs
Sonyʼs TV Sales
Ratio of 4K TVs*(Volume Basis)
35% 45% (Market)
*Source: Sony
2K TVs
105
Average Inch Size*44 inches 45 inches (Market)
46 inches 47 inches (Sony)
Home Entertainment & Sound SegmentTV Business: Strategy and Priorities
Actual Forecast
Sony IR Day 2018 106
Drive expansion of the premium 4K marketBest
Picture/Sound Quality
Unique Design Ease of Use
Home Entertainment & Sound SegmentTV Business: Product Concept
Sony IR Day 2018
FY16 FY17 FY18 FY20
p g gConsistently grow sales and profits through greater product
competitiveness in growth categories Enhance competitiveness of products in
growth categories (e.g. headphones, wireless speakers)
Invest in technological innovation for future growth (acoustics which make you feel like you are there)
Strengthen operations
Enhance collaboration with sales platform
1.9 Tril Yen2.2 Tril Yen
FY16 FY17 FY18 FY20
49%61%56%
Audio Market
58%68%65%
CAGR (FY16-18) +5%
Sonyʼs Sales CAGR (FY16-18) +10%
107
Audio Growth Categories
Other Audio
Audio Growth Categories
Other Audio
Home Entertainment & Sound SegmentVideo & Sound Business
Sony IR Day 2018 108
(bln yen) TV BusinessOperating Income Analysis
Video & Sound Business Enhance product competitiveness in audio growth categories.
Strengthen operations.
Address differences in geographic regions through greater collaboration with sales channels.
Further increase added value of products through proprietary technologies for high picture and sound quality, and excellent design and usability.
Customize product and sales strategy to each geographic region.
Further improve operations that adapt quickly to changes in the market environment.
FY17 FY18April Forecast
OperatingIncome
1,150Sales 1,222.7
85.8 86
Cost Reduction
Model Mix ImprovementExchange
Rates*1 Price Erosion
Volume Decrease
Home Entertainment & Sound SegmentFY2018 Forecast
・ The FY2018 forecasts for the segments have been calculated using the assumed foreign currency rates of approx. 105 yen to the U.S. dollar and approx. 125 yen to the euro.*1: Forecasted impact of foreign exchange fluctuations is calculated using the sales and costs denominated in each currency in the FY2018 business plan and comparing them with the previous fiscal year.
Sony IR Day 2018 109
Operating Income: 75 to 105 Billion Yen
Continue to generate stable cash flow through enhanced product competitiveness centered on high value-added products
and enhanced end-to-end operations
Home Entertainment & Sound SegmentFY2020 Financial Targets
※ Sales Amount (For Reference): 1,200 billion yen
Sony Corporation Investor Relations110
Sony IR Day 2018
3. Reference Materials
110
Sony IR Day 2018
4K TVs2K TVs
Sales by Product Type Sales by Region
111
Sales864.8bln yen
Japan
U.S.
EuropeChina
Asia Pacific
Other
Sales864.8bln yen
1位#5 #3
LCD TV Unit Share by Manufacturer LCD TV Revenue Share by Manufacturer
(Source: Sony / For the most recent year)
Home Entertainment & Sound SegmentTV Business: FY2017 Sales by Product Type & Region / Unit and Revenue Share
(Source: Sony / For the most recent year)
Sony IR Day 2018
Audio Growth
Category
AudioOthers
Video
Other
Sales by Product Type
Sales357.9bln yen
Japan
U.S.
Europe
China
Asia Pacific
Other
Sales by Region
Sales357.9bln yen
Sound Bars
Headphones
System Stereos
*1
Home Video
112
Wireless Speakers
Digital Music Players
WALKMAN
Audio Components
Home Entertainment & Sound SegmentVideo & Sound Business: FY2017 Sales by Product Type & Region
*1: ”Audio Growth Category” includes Headphones, Sound Bars and Wireless Speakers as its main products.
Sony IR Day 2018
Headphones Wireless Speakers
※ Japan
#1*1
1位#1※ Japan
Blu-ray Players/Recorders
2位※ ⽇⽶EU3
113
Digital Music Players (WALKMAN)
Sound Bars
※ Japan /U.S. / EU3
#3*2
#1 in Japan#1 in Japan
*2
#3※ Japan / U.S. / EU9
Home Entertainment & Sound SegmentVideo & Sound Business: Key Productsʼ Market Share (Revenue Basis)
※ Source: SonyFor the most recent year
*1 EU9: UK, France, Germany, Italy, Spain, Netherlands, Sweden, Poland, Czech*2 EU3: UK, France, Germany
#2※ Japan /U.S. / EU3
Sony IR Day 2018
Semiconductors SegmentMay 22, 2018
Terushi ShimizuBusiness ExecutiveSony Corporation
Representative Director and PresidentSony Semiconductor Solutions Corporation
Semiconductors Segment
Sony IR Day 2018 115
Agenda Semiconductors Segment
1. FY2017 Review2. FY2018 Action Plan3. FY2018 – FY2020 Mid-Range Plan
Sony Corporation Investor Relations116
Sony IR Day 2018 116
1. FY2017 Review
Semiconductors Segment
Sony IR Day 2018 117
FY2017 Review
Achievements
Increased image sensor sales and profitSteady customer expansion for automotive image sensorsImproved operating results in the non-image sensor businesses
Ability to respond to fluctuations in demand from Chinese smartphone manufacturersOptimization of inventory levelHigh currency sensitivity
Achieved record high profit for the Semiconductors businessOperating Income Analysis (bln yen)
Issues
Semiconductors Segment
OperatingIncome
850.0Sales 773.1
Exchange Rates
Earthquake
MobileSensor
MobileModule
Others
Image Sensors649.4
Image Sensors548.6
1 USD = 108.4 yen 110.9 yen
▲7.8
164.0
Sony Corporation Investor Relations118
Sony IR Day 2018 118
2. FY2018 Action Plan
Semiconductors Segment
Sony IR Day 2018
11 12 13 14 15 16 17 18 19 20
119
Our View of the Image Sensor MarketMobile application growth led by dual lens and sensing.
Growth in new areas expected.Trend in World Wide Image Sensor Shipment Amount
*Source: Sony
Semiconductors Segment
Mobile Area• Market expansion from
dual lens and mobile sensing
AV Area• Expansion of high-end sensor market
New Area• Automotive: Rise of the ADAS market• Factory Automation: Market expansion due to
smart manufacturing• Security: Market expansion due to
automatic monitoring using AI technology
CY
New AreaMobile SensingMobile Dual Lens (Sub Camera)
AVMobile Front + Rear
Sony IR Day 2018 120
Activities for Mobile
Evolution of Mobile Sensors
Present Future ~
Evolve in plane, time and space to deliver “KANDO” in addition to achieving DSLR camera-like image quality.
PlaneWide Angle / Enlargement
TimeSuper Slow
SpaceDepth / Focus
Semiconductors Segment
Reproduce kando as is
Image QualityHigh Dynamic Range /
High Sensitivity / Low Noise
Sharpness even in dark places
No blocked up shadows
Three-Dimensional / Immersive
Free from Structure
Free fromShutter
Sony IR Day 2018 121
Activities for Sensing
Development of ToF Sensor Use Cases of ToF Sensor
Succeeded in developing back-illuminated high-resolution ToF* sensor capable of distance measurement. Anticipate deployment to a wide range of use cases.
aibo
Semiconductors Segment
Drone
FA
Automotive
Back-illuminated ToF Sensor
Front-illuminated ToF Sensor
Present
Future
Mobile*ToF: Time of Flight
Sony IR Day 2018 122
Activities for AutomotiveCompleted commercialization of stacked image sensor for ADAS.
Strengthen cooperation with key players.Cooperation with Key Players*
Semiconductors Segment
Conventional Product
Development Product
Capable of capturing a sharp image of signs 160 meters away
Realization of “Safety Cocoon”
Commercialization of High Resolution Stacked Sensor for Automotive Cameras
*Logos are arranged in alphabetical order
Sony IR Day 2018 123
Activities for Factory AutomationThe market is expanding due to industrial automation.
Transition from CCD to CMOS sensor proceeds.Evolution of FA Sensors
Transition from CCD
Present Future ~
Semiconductors Segment
Sugar
Automation of Production Line
High Speed and High Resolution Inspection
Invisible Light Inspection
Low Error Rate Increase Throughput
*GS: Global Shutter
Back-illuminated CMOS GS
Front-illuminated CMOS GS*CCD Stacked
CMOS GS
Infrared Sensor
Salt
Sony IR Day 2018 124
Activities for SecurityThe security market is expanding due to the penetration of
automatic monitoring using AI technology.Evolution of Security Sensors
Present Future ~
FHD 5M5M
Semiconductors Segment
Low Noise Miniaturization
Wider Area Image Capturing in Outdoors
Full Color Image Capturing at Night
High-definition Image Capturing in Wider Area
Optimization for AI monitoring
Data Capacity Reduction
High SensitivityBack-illuminated CMOS Stacked
Region Control
Sony IR Day 2018 125
Activities for Technology Development (1)Proceed with technology development that creates added value
responding to market needs.Direction of Technology Development
Present Future ~
Semiconductors Segment
PerformanceEvolution
FunctionExpansion
PerformanceExpansion
Technology Development
for New Sensing Market
Back-illuminated Sensitivity Improvement
Stacked Miniaturization and High Functionality
Cu-Cu* Connection Productivity Improvement and Space Saving
Pixel-Parallel ADC Image Distortion Cancellation
Region Control Data Capacity Reduction
Polarization Distortion and Scratch Detection
Infrared Invisible Light Inspection
Event Driven Power Consumption 1/100
ToF Distance Information Detection
*Cu-Cu: Copper to Copper
Sony IR Day 2018 126
Activities for Technology Development (2)
Image of Sensor
Developed event-driven stacked CMOS image sensorrealizing 1/100 power consumption.
Image of Motion Detection
Realized by stacked structure with Cu-Cu connection
Motion Detection &Automatic Switching
Semiconductors Segment
Sony IR Day 2018 127
Activities for Technology Development (3)Movie
Semiconductors Segment
Sony IR Day 2018 128
FY2018 Forecast
Increase Capital Investment and R&D to Accelerate “Preparation“
Semiconductors Segment
Environment
Advancement of dual lens for smartphonesRise of sensing and automotive marketAppreciation of the yen and sluggish smartphone
market growth are risks
OperatingIncome
870Sales 850.0
Operating Income Analysis (bln yen)
Basic Policy
Increase capital investment and R&D to accelerate “Preparation“
Maximize profitability of mobile and AV fields which are the leading profit drivers
Foster new areas such as sensing and automotiveContinue activities to reduce manufacturing cost of
sensors
One Time Items
Depreciation/R&D Expenses
Inventory Change
Exchange Rates
Quantity Increase/Product Mix
Improvement/Cost Reduction
Image Sensors690
Image Sensors649.4
1 USD = 110.9 yen 105 yen
164.0
100
(Apr. Fct)
Sony Corporation Investor Relations129
Sony IR Day 2018 129
3. FY2018 – FY2020Mid-Range Plan
Semiconductors Segment
Sony IR Day 2018 130
Financial Target for FY2020
Financial Target for FY2020 Operating Income 160 - 200 billion yen
*1 USD = 105 yen
Sales Amount (For Reference): 1,100 billion yen
Mid-Range Plan for FY2020 Maximize mobile sensor profit by enhancing response to
environmental changes Aim for profit contribution by new areas including sensing and
automotive business Promote technology development including function and
performance expansion
Semiconductors Segment
Sony IR Day 2018 131
Operating Income Targets for FY2020
Game & Network Services (“G&NS”) Segment 130 〜 170
Music Segment 110 〜 130
Pictures Segment 58 〜 68
Home Entertainment & Sound (“HE&S”) Segment 75 〜 105
Imaging Products & Solutions (“IP&S”) Segment 85 〜 105
Mobile Communications (“MC”) Segment 20 〜 30
Semiconductors Segment 160 〜 200
( billion yen )
Assumed foreign currency exchange rates 1 US dollar : Approx. 105 yen 1 Euro : Approx. 115 yen
(For your reference) Branded Hardware* 180 〜 240*The sum of HE&S, IP&S and MC segments
Statements made in this presentation with respect to Sonyʼs 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 inconnection 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 inother materials released to the public. These statements are based on managementʼs assumptions, judgments and beliefs in light of the information currently available to it. Sonycautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, andtherefore 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, whetheras 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) the global economic and political environment in which Sony operates and the economic and political conditions in Sonyʼs markets, particularly levels of consumerspending;
(ii) 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 Sonyʼs assets and liabilities are denominated;
(iii) Sonyʼs ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including imagesensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition andcontinual new product and service introductions, rapid development in technology and subjective and changing customer preferences;
(iv) Sonyʼs ability and timing to recoup large-scale investments required for technology development and production capacity;(v) Sonyʼs ability to implement successful business restructuring and transformation efforts under changing market and regulatory conditions;(vi) changes in laws, regulations and government policies in the markets in which Sony operates, including those related to taxation and corporate social responsibility;(vii) Sonyʼs 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;(viii) Sonyʼs continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to prioritize investments correctly
(particularly in the electronics businesses);(ix) Sonyʼs ability to maintain product quality and customer satisfaction with its products and services;(x) the effectiveness of Sonyʼs strategies and their execution, including but not limited to the success of Sonyʼs acquisitions, joint ventures and other strategic investments;(xi) significant volatility and disruption in the global financial markets or a ratings downgrade;(xii) Sonyʼs ability to forecast demands, manage timely procurement and control inventories;(xiii) 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, supply and distribution of its products, and its other business operations;(xiv) the outcome of pending and/or future legal and/or regulatory proceedings;(xv) shifts in customer demand for financial services such as life insurance and Sonyʼs ability to conduct successful asset liability management in the Financial Services
segment;(xvi) 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;(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 Sonyʼs
business information, potential business disruptions or financial losses; and(xviii) risks related to catastrophic disasters or similar events.
Risks and uncertainties also include the impact of any future events with material adverse impact.
Cautionary Statement
132
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