Sony : Statement Regarding the Impact of the Spread of the Novel Coronavirus

Sony extends its condolences to the families of those who have passed away as a result of the coronavirus disease 2019 (COVID-19) ('COVID-19'), and extends its sympathies to all those who have been infected. The Sony Group is primarily focused on ensuring the safety of its employees and their families, as well as its customers and other stakeholders, in addition to preventing the further spread of the virus. Sony is also striving to answer the needs of society and its customers to the best of its ability, and to minimize the impact of the virus on its business. To accomplish these objectives, Sony is working to gather information and swiftly carry out the necessary actions.

The following is a statement regarding the current impact of the spread of COVID-19 on the Sony Group.

1. Conditions at Sony's Offices

• In accordance with mandates from national and local governments, Sony has closed a portion of its offices, mainly in Europe and the U.S., where employees are now working from home. Additionally, at Sony's offices in Japan and other areas, employees must work from home, excluding a small number of essential employees.
• Sony has four manufacturing plants located in China (two in Shanghai, one in Wuxi, Jiangsu, and one in Huizhou, Guangdong). All of these plants were shut down in accordance with government mandates, from the beginning of the spring holidays on January 24, 2020, until February 9. From February 10, all four plants have re-started operations in increments. Supply chain issues remain, but operations are returning to the level they were before the spread of the virus.
• In accordance with a mandate by the local government, Sony has shut down both of its manufacturing plants in Malaysia (Kuala Lumpur and Penang) for the period between March 18 and April 14 (planned).
• Sony has also shut down its manufacturing plant in the U.K. (Wales) for the period between March 26 and April 20 (planned) in accordance with a mandate from the local government.
• Business has been impacted by factors such as restrictions on movement of people across national borders, making it difficult for Sony to send engineers to manufacturing hubs such as China and countries in Southeast Asia for the purpose of helping with new product launches or giving instructions on manufacturing.

2. Impact on Sony's Businesses

Currently, the key impacts on each of Sony's businesses are as follows.

Game & Network Services Segment

• Sony estimates that there will be no material impact on this business for the current fiscal year.
• Although no issues have emerged so far, Sony is carefully monitoring the risk of delays in production schedules for game software titles at both its first-party studios and partner studios, primarily in Europe and the U.S.

Music Segment

• Especially outside of Japan, the business has started to be affected by delays in new music releases, interruptions in supply chains for CDs and other physical music media, and a decrease in music licensing resulting from both lower advertising activity and delays in production for motion pictures and television productions. Concerts and other live events around the world are being cancelled or postponed, including all Sony-sponsored performances and events in Japan.

Pictures Segment

• The motion pictures business as a whole is being affected by shutdowns of movie theaters around the world and various restrictions on people's movement, leading to circumstances including early termination of theatrical runs and delays in release dates.
• Additionally, in alignment with the entire industry, Sony has temporarily shut down all of its film and television production, resulting in future changes in theatrical release dates for some titles.

Electronics Products & Solutions Segment

• In addition to the shutdown of Sony's manufacturing plants in Malaysia, the flow of resources from suppliers in Asia has become unstable, having a wide-ranging impact on the manufacturing of goods in this segment.
• Sales of Sony's products are also being affected by lockdowns around the world and retailer closings.

Imaging & Sensing Solutions Segment

• At this time, there has been no material impact on the production of CMOS image sensors, including any impact on the procurement of materials. However, Sony's primary customers in this segment are smartphone makers who rely on supply chains in China, and although recovery in these supply chains has led to sales gradually returning to normal levels, there is a risk that going forward sales could be impacted by a slowdown in the smartphone market.

Financial Services Segment

• There has been no material impact on the business at this time. However, it is possible that, as has occurred in the past, fluctuations in the financial market could impact the financial results of this segment.

3. Impact on Sony's Consolidated Financial Results

In Sony's Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2020 announced on February 4, 2020, Sony upwardly revised its consolidated results forecast for the fiscal year, but explained at the Earnings Announcement held on the same day that the impact of the spread of infection from COVID-19 was not included in that forecast, and stated that depending on how the situation evolved, that impact could be large enough to eliminate the entire amount of the upward revision. Sony is continuing to evaluate the impact on its financial results for the fiscal year ending March 31, 2020, but currently expects that the scale of the impact will be in line with the above statement. Sony expects that its consolidated financial results will continue to be impacted by the spread of infection from COVID-19 in the fiscal year ending March 31, 2021, which begins in April this year.

Sony plans to announce its consolidated financial results for the fiscal year ending March 31, 2020 on April 30, 2020. However, it is possible that the spread of COVID-19 could lead to delays in account closing procedures and other operations, making it difficult for Sony to proceed with this announcement as planned.

This press release discusses the key impacts of the spread of COVID-19 on the Sony Group based on Sony's current knowledge. Any possible future impact is not limited to the scope of the information contained in this release. Going forward, Sony will announce any material updates in a timely manner.