Presentation Slides [PDF:1.40MB]

EP&S Business Briefing

August 21, 2020

Vice Chairman, Representative Corporate Executive Officer, Sony Corporation

Representative Director, President and CEO, Sony Electronics Corporation

S h i g e k i I s h i z u k a

Sony Electronics Corporation (SEC)

Sony Imaging Products &		Sony Mobile Communications (SOMC)		Sony Home Entertainment &
Solutions (SIPS)		Sony Network Communications (SNC)		Sound Products (SHES)

Consumer & Professional

MobileTelevision

Network Services	Video & Sound
Medical
Sales & Marketing Platform Manufacturing / Logistics /	Engineering Platform
Procurement Platform

1

FY20 Earnings Forecast

Recovery in Revenue Beyond Q2

Expect Profitability in the Mobile Business for the Full Fiscal Year

Reductions in Operating Costs

Revenue
Operating Income
4,839
	3,318
251	△91
FY19.1Q	FY20.1Q

Q1 Results

19,913	18,700
873
	600
	(Oku Yen)
FY19	FY20
	(August Forecast)

Fiscal Year Forecast

2

History of Adaptation to an Ever-Changing Environment

Change in the Business Portfolio	High Value-Added Products Strategy
Focusing on Mirrorless and Lens Businesses	End-to-End Operation

		COVID-19
FY06	FY13	FY19

Digital Imaging

・Digital Imaging includes still and video camera product groups that are different from what is being disclosed externally ・Television revenue includes intersegment sales and may be different from the television revenue that is disclosed

・Scale is different for Digital Imaging and Television charts

		Revenue
		Operating Income
		COVID-19
FY06	FY13	FY19
	Television
		3

Smartphone Business Structural Reform

Completed Structural Reform in 2019

Significant Decrease in Operating Costs and Overall Costs

Expect Profitability in 2020

		Overall Cost						Overall Cost ▲72%
One Time Transformation Cost
Impairment
Other Cost							OPEX ▲64%
After Service / Patent etc					▲50%

▲45%

OPEX

FY17

FY18

FY19

FY20

4

First Quarter and Recent Topics

Market expansion and	Favorable sales in Japan	Top revenue share in China
increase in market share
(stay-at-home demand)		New model launch

5

Sony Electronics' Vision

Continue to deliver Kando and Anshin to

people and society across the world

through the pursuit of technology and new

challenges

Anshin is a Japanese word with various meanings such as peace of mind, reassurance, reliability and trust

6

Mid-Range Strategy

Sony Electronics:

Achieve Business Growth and Maximize Corporate Value

Expand Business Growth Areas

Undertake Portfolio Management-Driven Structural Reform

7

Synergies Between Constituent Entities

SIPS

Sony Imaging Products & Solutions

SEC

Sony Electronics Corporation

SHES	SOMC/SNC
Sony Home Entertainment	Sony Mobile Communications
& Sound Products	Sony Network Communications

8

Expanding Remote Solutions Business for Video Content

Delivering New Value to Customers Through

Large-Sized Displays

Strengthening "Anshin " Domains

Medial Business / Network Services Business / Sustainability

Anshin is a Japanese word with various meanings such as peace of mind, reassurance, reliability and trust

11

Exploring Opportunitiesざin the Medical Business

as Sony Electronics

Expanding Network Services Business

ざ

Delivering "Anshin " Through Connectivity

Promoting Sustainability as a Member of the Society

Reducing use of virgin plastic /Eliminating plastic wrapping in blister packages

14

Pursuing "Business Exploration"

15

Creating New Sports Entertainment

ざ

Expanding Solution Service Business by Utilizing Video and Data

Applying Virtual Reality Technology to

ざ

Video Content Production

Established Virtual Production Laboratory

Sony Innovation Studios virtual production demo at CES 2020 in Las Vegas, Nevada.

Sony Electronics' Vision

Continue to deliver Kando and Anshin to

people and society across the world

through the pursuit of technology and new

challenges

Anshin is a Japanese word with various meanings such as peace of mind, reassurance, reliability and trust

18

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:

1. Sony's ability to maintain product quality and customer satisfaction with its products and services;
2. 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;
3. 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;
4. 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;
5. 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;
6. 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;
7. 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;
8. 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;
9. 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;
10. Sony's ability to forecast demands, manage timely procurement and control inventories;
11. 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;
12. Sony's ability to recruit, retain and maintain productive relations with highly skilled personnel;
13. 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;
14. 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;
15. 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;
16. risks related to catastrophic disasters, pandemic disease or similar events;
17. 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
18. 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 COVID-19 could heighten many of the risks and uncertainties	19
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.