Sony Group(SONY) - 2024 Q2 - Quarterly Report

Quarterly Financial Statements (Unaudited) This section presents Sony Group Corporation's unaudited condensed consolidated financial statements, including position, income, comprehensive income, equity changes, and cash flows Condensed Consolidated Statements of Financial Position Sony's financial position as of September 30, 2023, shows increased total assets, liabilities, and equity attributable to stockholders Consolidated Financial Position (Yen in millions) | Metric | March 31, 2023 (Restated) | September 30, 2023 | Change from March 31, 2023 | | :--------------------------------- | :------------------ | :----------------- | :------------------------- | | Total assets | 31,154,095 | 32,968,793 | 1,814,698 | | Total liabilities | 24,496,945 | 25,768,173 | 1,271,228 | | Equity attributable to Sony Group Corporation's stockholders | 6,598,537 | 7,122,456 | 523,919 | | Total equity | 6,657,150 | 7,200,620 | 543,470 | | Key Asset Changes: | | | | | Inventories | 1,468,042 | 2,067,624 | 599,582 | | Trade and other receivables, and contract assets | 1,770,948 | 2,168,756 | 397,808 | | Goodwill | 1,275,112 | 1,443,365 | 168,253 | | Content assets | 1,561,882 | 1,748,713 | 186,831 | | Key Liability Changes: | | | | | Short-term borrowings | 1,914,934 | 2,480,578 | 565,644 | | Trade and other payables | 1,866,101 | 2,314,691 | 448,590 | | Deposits from customers in the banking business | 3,163,237 | 3,429,123 | 265,886 | | Key Equity Changes: | | | | | Retained earnings | 5,092,442 | 5,461,664 | 369,222 | | Accumulated other comprehensive income | (614,570) | (448,712) | 165,858 | Condensed Consolidated Statements of Income (Three months ended September 30) Three-month income statements show increased sales but significant decreases in operating and net income attributable to stockholders Consolidated Statements of Income (Three months ended September 30, Yen in millions) | Metric | 2022 (Restated) | 2023 | Change | | :------------------------------------------ | :-------------- | :--- | :----- | | Total sales and financial services revenue | 2,625,464 | 2,828,623 | 203,159 | | Operating income | 369,403 | 263,009 | (106,394) | | Net income | 285,389 | 201,156 | (84,233) | | Net income attributable to Sony Group Corporation's stockholders | 281,681 | 200,105 | (81,576) | | Basic EPS | 227.76 | 162.21 | (65.55) | | Diluted EPS | 226.54 | 161.74 | (64.80) | Condensed Consolidated Statements of Comprehensive Income (Three months ended September 30) Three-month comprehensive income declined substantially due to decreased net income and negative shifts in other comprehensive income Consolidated Statements of Comprehensive Income (Three months ended September 30, Yen in millions) | Metric | 2022 (Restated) | 2023 | Change | | :------------------------------------------ | :-------------- | :--- | :------- | | Net income | 285,389 | 201,156 | (84,233) | | Total other comprehensive income, net of tax | 42,852 | (57,930) | (100,782) | | Comprehensive income | 328,241 | 143,226 | (185,015) | | Comprehensive income attributable to Sony Group Corporation's stockholders | 323,299 | 141,176 | (182,123) | Condensed Consolidated Statements of Income (Six months ended September 30) Six-month income statements show increased sales but significant reductions in operating and net income attributable to stockholders Consolidated Statements of Income (Six months ended September 30, Yen in millions) | Metric | 2022 (Restated) | 2023 | Change | | :------------------------------------------ | :-------------- | :--- | :------- | | Total sales and financial services revenue | 4,855,224 | 5,792,275 | 937,051 | | Operating income | 734,268 | 516,051 | (218,217) | | Net income | 546,593 | 419,098 | (127,495) | | Net income attributable to Sony Group Corporation's stockholders | 542,775 | 417,650 | (125,125) | | Basic EPS | 438.92 | 338.48 | (100.44) | | Diluted EPS | 436.17 | 337.39 | (98.78) | Condensed Consolidated Statements of Comprehensive Income (Six months ended September 30) Six-month comprehensive income decreased significantly, driven by lower net income, despite a smaller negative impact from other comprehensive income Consolidated Statements of Comprehensive Income (Six months ended September 30, Yen in millions) | Metric | 2022 (Restated) | 2023 | Change | | :------------------------------------------ | :-------------- | :--- | :------- | | Net income | 546,593 | 419,098 | (127,495) | | Total other comprehensive income, net of tax | 224,743 | 169,587 | (55,156) | | Comprehensive income | 771,336 | 588,685 | (182,651) | | Comprehensive income attributable to Sony Group Corporation's stockholders | 762,845 | 584,604 | (178,241) | Condensed Consolidated Statements of Changes in Stockholders' Equity (Six months ended September 30) Stockholders' equity increased by ¥523,919 million, driven by retained earnings and other comprehensive income, partially offset by treasury stock Changes in Stockholders' Equity (Six months ended September 30, Yen in millions) | Metric | March 31, 2023 (Restated) | September 30, 2023 | Change | | :------------------------------------------ | :------------------ | :----------------- | :----- | | Equity attributable to Sony Group Corporation's stockholders | 6,598,537 | 7,122,456 | 523,919 | | Retained earnings | 5,092,442 | 5,461,664 | 369,222 | | Accumulated other comprehensive income | (614,570) | (448,712) | 165,858 | | Treasury stock, at cost | (223,507) | (251,281) | (27,774) | | Total equity | 6,657,150 | 7,200,620 | 543,470 | Condensed Consolidated Statements of Cash Flows (Six months ended September 30) Six-month cash flows show a significant turnaround to operating cash inflow, continued investing outflow, and substantial financing inflow Consolidated Statements of Cash Flows (Six months ended September 30, Yen in millions) | Metric | 2022 (Restated) | 2023 | Change | | :------------------------------------------ | :-------------- | :--- | :------- | | Net cash provided by (used in) operating activities | (383,256) | 115,031 | 498,287 | | Net cash used in investing activities | (639,672) | (335,068) | 304,604 | | Net cash provided by financing activities | 56,357 | 301,820 | 245,463 | | Net increase (decrease) in cash and cash equivalents | (839,884) | 145,614 | 985,498 | | Cash and cash equivalents at end of the period | 1,209,752 | 1,626,514 | 416,762 | Notes to Condensed Consolidated Financial Statements Notes detail segment information, product sales, Financial Services statements, and critical accounting policy changes, including IFRS 17 adoption Business Segment Information This section provides detailed sales and operating income breakdowns across Sony's various business segments and product categories for both three and six-month periods Segment Sales and Financial Services Revenue (Three months ended September 30, Yen in millions) | Segment | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :----- | | Game & Network Services | 720,735 | 954,096 | 233,361 | | Music | 359,319 | 408,716 | 49,397 | | Pictures | 337,468 | 399,636 | 62,168 | | Entertainment, Technology & Services | 677,045 | 613,540 | (63,505) | | Imaging & Sensing Solutions | 398,366 | 406,316 | 7,950 | | Financial Services | 178,063 | 103,915 | (74,148) | | All Other | 20,732 | 24,225 | 3,493 | Segment Operating Income (Loss) (Three months ended September 30, Yen in millions) | Segment | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :------- | | Game & Network Services | 42,132 | 48,902 | 6,770 | | Music | 78,733 | 80,997 | 2,264 | | Pictures | 27,620 | 29,438 | 1,818 | | Entertainment, Technology & Services | 77,840 | 61,033 | (16,807) | | Imaging & Sensing Solutions | 73,987 | 46,361 | (27,626) | | Financial Services | 79,989 | 15,681 | (64,308) | | All Other | 4,848 | 2,069 | (2,779) | Segment Sales and Financial Services Revenue (Six months ended September 30, Yen in millions) | Segment | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :----- | | Game & Network Services | 1,324,851 | 1,725,976 | 401,125 | | Music | 667,389 | 766,945 | 99,556 | | Pictures | 678,845 | 720,002 | 41,157 | | Entertainment, Technology & Services | 1,229,355 | 1,185,323 | (44,032) | | Imaging & Sensing Solutions | 636,208 | 699,056 | 62,848 | | Financial Services | 394,085 | 785,326 | 391,241 | | All Other | 40,066 | 43,718 | 3,652 | Segment Operating Income (Loss) (Six months ended September 30, Yen in millions) | Segment | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :------- | | Game & Network Services | 94,894 | 98,062 | 3,168 | | Music | 139,706 | 154,377 | 14,671 | | Pictures | 78,275 | 45,409 | (32,866) | | Entertainment, Technology & Services | 131,408 | 116,679 | (14,729) | | Imaging & Sensing Solutions | 95,676 | 59,092 | (36,584) | | Financial Services | 219,197 | 70,195 | (149,002) | | All Other | 7,713 | 4,544 | (3,169) | Sales to Customers by Product Category (Three months ended September 30, Yen in millions) | Product Category | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :----- | | G&NS - Digital Software and Add-on Content | 332,859 | 423,096 | 90,237 | | G&NS - Hardware and Others | 252,853 | 373,154 | 120,301 | | Music - Recorded Music - Streaming | 151,930 | 173,858 | 21,928 | | Pictures - Television Productions | 114,586 | 173,385 | 58,799 | | ET&S - Televisions | 226,751 | 161,002 | (65,749) | | ET&S - Mobile Communications | 93,227 | 72,774 | (20,453) | Sales to Customers by Product Category (Six months ended September 30, Yen in millions) | Product Category | 2022 (Restated) | 2023 | Change | | :-------------------------------- | :-------------- | :--- | :----- | | G&NS - Digital Software and Add-on Content | 618,704 | 788,442 | 169,738 | | G&NS - Hardware and Others | 448,946 | 638,312 | 189,366 | | Music - Recorded Music - Streaming | 291,041 | 338,745 | 47,704 | | Pictures - Television Productions | 253,747 | 277,616 | 23,869 | | ET&S - Televisions | 368,544 | 296,984 | (71,560) | | ET&S - Mobile Communications | 192,257 | 160,136 | (32,121) | Condensed Financial Services Financial Statements This section presents separate condensed financial statements for the Financial Services segment, offering a distinct view from other Sony segments - Separate financial statements are provided for the Financial Services segment and all other segments combined, as the Financial Services segment differs in nature from Sony's other segments, offering useful comparative presentation for investors[35] Condensed Statements of Financial Position (September 30, 2023, Yen in millions) | Metric | Financial Services | Sony without Financial Services | Consolidated | | :------------------------------------------ | :----------------- | :------------------------------ | :----------- | | Total assets | 19,935,965 | 13,669,697 | 32,968,793 | | Total liabilities | 18,931,170 | 6,885,230 | 25,768,173 | | Total equity | 1,004,795 | 6,784,467 | 7,200,620 | Condensed Statements of Income (Three months ended September 30, 2023, Yen in millions) | Metric | Financial Services | Sony without Financial Services | Consolidated | | :------------------------------------------ | :----------------- | :------------------------------ | :----------- | | Total sales and financial services revenue | 103,915 | 2,728,907 | 2,828,623 | | Operating income | 15,681 | 247,334 | 263,009 | | Net income | 10,832 | 190,328 | 201,156 | Condensed Statements of Income (Six months ended September 30, 2023, Yen in millions) | Metric | Financial Services | Sony without Financial Services | Consolidated | | :------------------------------------------ | :----------------- | :------------------------------ | :----------- | | Total sales and financial services revenue | 785,326 | 5,014,696 | 5,792,275 | | Operating income | 70,195 | 445,865 | 516,051 | | Net income | 49,441 | 419,700 | 419,098 | Condensed Statements of Cash Flows (Six months ended September 30, 2023, Yen in millions) | Metric | Financial Services | Sony without Financial Services | Consolidated | | :------------------------------------------ | :----------------- | :------------------------------ | :----------- | | Net cash provided by (used in) operating activities | 238,753 | (73,745) | 115,031 | | Net cash used in investing activities | (9,531) | (325,547) | (335,068) | | Net cash provided by (used in) financing activities | (55,504) | 307,357 | 301,820 | Going Concern Assumption This section clarifies that the going concern assumption is not applicable to the presented financial statements - The going concern assumption is not applicable[44] Accounting Policy and Other Information This section details accounting policy changes, including the adoption of IFRS 17, and provides computations for earnings per share - Sony adopted IFRS 17 "Insurance Contracts" starting in the three months ended June 30, 2023, and retrospectively applied it, restating comparative periods and the condensed consolidated statement of financial position as of April 1, 2022[44][45] EPS Computation (Three months ended September 30) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Net income attributable to Sony Group Corporation's stockholders | 281,681 | 200,105 | | Weighted-average shares outstanding for basic EPS computation (Thousands) | 1,236,755 | 1,233,588 | | Weighted-average shares for diluted EPS computation (Thousands) | 1,243,505 | 1,237,223 | EPS Computation (Six months ended September 30) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Net income attributable to Sony Group Corporation's stockholders | 542,775 | 417,650 | | Weighted-average shares outstanding for basic EPS computation (Thousands) | 1,236,622 | 1,233,915 | | Weighted-average shares for diluted EPS computation (Thousands) | 1,244,528 | 1,237,874 | Results for Adjusted OIBDA and Adjusted EBITDA This section presents Sony's Adjusted OIBDA and Adjusted EBITDA results for the three and six months ended September 30, 2023, by segment and consolidated - Sony uses three-year cumulative Adjusted EBITDA as the most important financial performance indicator (Group KPI) in its Fourth Mid-Range Plan[51] Segment Adjusted OIBDA and Consolidated Adjusted OIBDA/EBITDA (Three months ended September 30, Yen in billions) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Game & Network Services (G&NS) | 64.2 | 83.1 | | Music | 87.5 | 97.0 | | Pictures | 40.4 | 42.6 | | Entertainment, Technology & Services (ET&S) | 102.6 | 87.6 | | Imaging & Sensing Solutions (I&SS) | 122.2 | 107.1 | | Financial Services | 64.4 | 22.7 | | All Other, Corporate and elimination | (4.1) | (14.1) | | Consolidated Adjusted OIBDA | 477.1 | 425.9 | | Consolidated Adjusted EBITDA | 487.2 | 426.4 | Segment Adjusted OIBDA and Consolidated Adjusted OIBDA/EBITDA (Six months ended September 30, Yen in billions) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Game & Network Services (G&NS) | 134.4 | 158.9 | | Music | 162.3 | 180.0 | | Pictures | 102.2 | 71.0 | | Entertainment, Technology & Services (ET&S) | 179.5 | 168.4 | | Imaging & Sensing Solutions (I&SS) | 189.5 | 177.2 | | Financial Services | 210.0 | 84.1 | | All Other, Corporate and elimination | (11.9) | (17.6) | | Consolidated Adjusted OIBDA | 966.0 | 822.0 | | Consolidated Adjusted EBITDA | 984.0 | 832.6 | Outlook for Fiscal Year Ending March 31, 2024 This section provides Sony's revised consolidated and segment-specific financial forecasts for the fiscal year ending March 31, 2024 Revised Consolidated Forecast for FY2024 (Yen in billions) | Metric | August Forecast | November Forecast | Change from August Forecast | % Change | | :------------------------------------------ | :-------------- | :---------------- | :-------------------------- | :------- | | Sales | 12,200 | 12,400 | +200 | +1.6% | | Operating income | 1,170 | 1,170 | - | - | | Income before income taxes | 1,140 | 1,160 | +20 | +1.8% | | Net income attributable to Sony Group Corporation's stockholders | 860 | 880 | +20 | +2.3% | | Adjusted OIBDA | 1,770 | 1,785 | +15 | +0.8% | | Adjusted EBITDA | 1,750 | 1,785 | +35 | +2.0% | - Sales are expected to be higher than the August forecast, mainly due to higher-than-expected sales in the Game & Network Services, Music, and Imaging & Sensing Solutions segments, partially offset by lower-than-expected sales in the Financial Services segment[57] - Operating income is expected to remain unchanged due to expected increases in operating income in the Music and Imaging & Sensing Solutions segments, substantially offset by expected decreases in operating income in the Financial Services and Pictures segments[58] - Both income before income taxes and net income attributable to Sony Group Corporation's stockholders are expected to be higher than the August forecast due to an expected increase in financial income, net, primarily resulting from a decrease in net foreign exchange losses[58] Revised Segment Forecasts for FY2024 (Yen in billions) | Segment | Sales (Nov Forecast) | Operating Income (Nov Forecast) | Adjusted OIBDA (Nov Forecast) | | :------------------------------------------ | :------------------- | :------------------------------ | :---------------------------- | | Game & Network Services (G&NS) | 4,360 | 270 | 385 | | Music | 1,560 | 295 | 350 | | Pictures | 1,460 | 115 | 165 | | Entertainment, Technology & Services (ET&S) | 2,440 | 180 | 280 | | Imaging & Sensing Solutions (I&SS) | 1,590 | 195 | 440 | | Financial Services (Financial services revenue) | 1,210 | 155 | 180 | - Game & Network Services (G&NS) sales are expected to be higher than the August forecast primarily due to foreign exchange rates and increased sales of non-first-party titles, while operating income remains unchanged due to changes in launch dates for some first-party titles[62] - Music sales, operating income, and Adjusted OIBDA are expected to be higher than the August forecast due to positive foreign exchange impacts, higher sales in mobile game applications (Visual Media & Platform), and increased streaming revenues in Music Publishing[63] - Pictures sales and operating income are expected to be lower than the August forecast, primarily due to the impact of Hollywood strikes leading to release date changes and delays in series deliveries, partially offset by foreign exchange rates[64] - Financial Services revenue, operating income, and Adjusted OIBDA are expected to be lower than the August forecast primarily due to a decrease in net gains on investments and a deterioration in net gains and losses related to market fluctuations for variable life insurance products at Sony Life[67] Supplemental Information This section provides additional details on segment financial performance and comprehensive reconciliations for Adjusted OIBDA and EBITDA Notes about Financial Performance of Segments This section clarifies the reporting basis for the Music, Pictures, and Financial Services segments, noting their specific consolidation and translation methods - Music segment results include yen-based Sony Music Entertainment (Japan) Inc. and yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate worldwide subsidiaries on a U.S. dollar basis[70] - Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates worldwide subsidiaries on a U.S. dollar basis[71] - Financial Services segment results include Sony Financial Group Inc. and its consolidated subsidiaries, which differ from their separate Japanese statutory disclosures[72] Regarding Adjusted OIBDA and Adjusted EBITDA This section defines Adjusted OIBDA and Adjusted EBITDA, explains their rationale as key performance indicators, and provides detailed reconciliations Definitions and Rationale This section defines Adjusted OIBDA and Adjusted EBITDA, outlining their calculation methods and strategic importance as long-term performance indicators - Adjusted OIBDA and Adjusted EBITDA are considered suitable for long-term management as they represent sustainable earnings power, confirm business expansion, and are often used to calculate corporate value[73] - Adjusted OIBDA is calculated as: Operating income + Depreciation and amortization expense (excluding amortization for film costs, broadcasting rights, internally developed game content, and master recordings) - non-recurring profit/loss[74] - Adjusted EBITDA is calculated as: Net income attributable to Sony Group Corporation's stockholders + Net income attributable to noncontrolling interests + Income taxes + Net interest expenses - Net gain on revaluation of equity instruments + Depreciation and amortization expense (excluding amortization for film costs, broadcasting rights, internally developed game content, and master recordings) - non-recurring profit/loss[74] Reconciliation for Three Months Ended September 30 This section provides detailed reconciliations of Adjusted OIBDA from operating income and Adjusted EBITDA from net income for the three-month period Reconciliation of Adjusted OIBDA from Operating Income (Three months ended September 30, Yen in billions) | Segment | Operating Income (2023) | Depreciation & Amortization (2023) | Non-recurring P/L (2023) | Adjusted OIBDA (2023) | | :------------------------------------------ | :---------------------- | :--------------------------------- | :----------------------- | :-------------------- | | Game & Network Services (G&NS) | 48.9 | 34.2 | - | 83.1 | | Music | 81.0 | 16.0 | - | 97.0 | | Pictures | 29.4 | 13.1 | - | 42.6 | | Entertainment, Technology & Services (ET&S) | 61.0 | 26.5 | - | 87.6 | | Imaging & Sensing Solutions (I&SS) | 46.4 | 60.8 | - | 107.1 | | Financial Services | 15.7 | 7.0 | - | 22.7 | | All Other, Corporate and elimination | (19.4) | 5.3 | - | (14.1) | | Consolidated | 263.0 | 162.9 | - | 425.9 | Reconciliation of Adjusted EBITDA from Net Income (Three months ended September 30, Yen in billions) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Net income attributable to Sony Group Corporation's stockholders | 281.7 | 200.1 | | Net income attributable to noncontrolling interests | 3.7 | 1.1 | | Income taxes | 85.7 | 56.4 | | Interest expenses, net | 1.4 | 2.1 | | (Gain) / loss on revaluation of equity instruments, net | 6.9 | 3.7 | | Depreciation and amortization expense* | 135.5 | 162.9 | | (Profit) / loss amount that Sony deems non-recurring** | (27.8) | - | | Adjusted EBITDA | 487.2 | 426.4 | Details of Non-recurring Profit/Loss (Three months ended September 30, Yen in billions) | Item | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Impact of litigation settlements (Music segment) | (5.7) | - | | Recovery of unauthorized withdrawal (Financial Services segment) | (22.1) | - | | Total | (27.8) | - | Reconciliation for Six Months Ended September 30 This section provides detailed reconciliations of Adjusted OIBDA from operating income and Adjusted EBITDA from net income for the six-month period Reconciliation of Adjusted OIBDA from Operating Income (Six months ended September 30, Yen in billions) | Segment | Operating Income (2023) | Depreciation & Amortization (2023) | Non-recurring P/L (2023) | Adjusted OIBDA (2023) | | :------------------------------------------ | :---------------------- | :--------------------------------- | :----------------------- | :-------------------- | | Game & Network Services (G&NS) | 98.1 | 60.9 | - | 158.9 | | Music | 154.4 | 31.6 | (6.0) | 180.0 | | Pictures | 45.4 | 25.6 | - | 71.0 | | Entertainment, Technology & Services (ET&S) | 116.7 | 51.8 | - | 168.4 | | Imaging & Sensing Solutions (I&SS) | 59.1 | 118.1 | - | 177.2 | | Financial Services | 70.2 | 13.9 | - | 84.1 | | All Other, Corporate and elimination | (27.8) | 10.2 | - | (17.6) | | Consolidated | 516.1 | 312.0 | (6.0) | 822.0 | Reconciliation of Adjusted EBITDA from Net Income (Six months ended September 30, Yen in billions) | Metric | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Net income attributable to Sony Group Corporation's stockholders | 542.8 | 417.7 | | Net income attributable to noncontrolling interests | 3.8 | 1.4 | | Income taxes | 173.8 | 114.5 | | Interest expenses, net | 2.2 | 2.6 | | (Gain) / loss on revaluation of equity instruments, net | 29.7 | (9.6) | | Depreciation and amortization expense* | 259.5 | 312.0 | | (Profit) / loss amount that Sony deems non-recurring** | (27.8) | (6.0) | | Adjusted EBITDA | 984.0 | 832.6 | Details of Non-recurring Profit/Loss (Six months ended September 30, Yen in billions) | Item | 2022 (Restated) | 2023 | | :------------------------------------------ | :-------------- | :--- | | Impact of litigation settlements (Music segment) | (5.7) | - | | Recovery of unauthorized withdrawal (Financial Services segment) | (22.1) | - | | Remeasurement gain from consolidation (Music segment) | - | (6.0) | | Total | (27.8) | (6.0) | Reconciliation for Fiscal Year Ended March 31, 2023 This section provides detailed reconciliations of Adjusted OIBDA from operating income and Adjusted EBITDA from net income for the fiscal year Reconciliation of Adjusted OIBDA from Operating Income (Fiscal Year Ended March 31, 2023, Yen in billions) | Segment | Operating Income | Depreciation & Amortization | Non-recurring P/L | Adjusted OIBDA | | :------------------------------------------ | :--------------- | :-------------------------- | :---------------- | :------------- | | Game & Network Services (G&NS) | 250.0 | 87.0 | - | 337.0 | | Music | 263.1 | 59.0 | (5.7) | 316.4 | | Pictures | 119.3 | 48.9 | - | 168.2 | | Entertainment, Technology & Services (ET&S) | 179.5 | 97.4 | - | 276.9 | | Imaging & Sensing Solutions (I&SS) | 212.2 | 196.7 | - | 408.9 | | Financial Services | 318.1 | 26.3 | (22.1) | 322.4 | | All Other, Corporate and elimination | (39.8) | 26.8 | - | (12.9) | | Consolidated | 1,302.4 | 542.2 | (27.8) | 1,816.9 | Reconciliation of Adjusted EBITDA from Net Income (Fiscal Year Ended March 31, 2023, Yen in billions) | Metric | Amount | | :------------------------------------------ | :----- | | 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 | 4.0 | | (Gain) / loss on revaluation of equity instruments, net | 4.6 | | Depreciation and amortization expense* | 542.2 | | (Profit) / loss amount that Sony deems non-recurring** | (27.8) | | Adjusted EBITDA | 1,797.6 | Details of Non-recurring Profit/Loss (Fiscal Year Ended March 31, 2023, Yen in billions) | Item | Amount | | :------------------------------------------ | :----- | | Impact of litigation settlements (Music segment) | (5.7) | | Recovery of unauthorized withdrawal (Financial Services segment) | (22.1) | | Total | (27.8) | Cautionary Statement This statement highlights that future performance projections are subject to significant risks and uncertainties that could cause actual results to differ - Statements regarding Sony's future performance are forward-looking and subject to important risks and uncertainties that could cause actual results to differ materially[93] - Key risks include maintaining product quality and customer satisfaction, ability to design and develop new products in competitive markets, effectiveness of strategies (including acquisitions), changes in laws/regulations, reliance on external business partners, global economic and political environment, foreign exchange rates, cybersecurity risks, and geopolitical conflicts[93][95][96]