Sony Group Corporation (SONY) Q4 2022 Earnings Call Transcript

For the period ending March 31, 2023

April 28, 2023 3:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

The time has come to begin the announcement of Consolidated Financial Results of Sony Group Corporation. I'll be serving as Master of Ceremonies Okada of Corporate Communications.

First, Mr. Totoki, President and COO and CFO will explain to you the FY22 consolidated results and FY'23 consolidated results forecast, followed by Q&A We are scheduled to have a total of 70 minutes now.

Mr. Totoki, please.

Hiroki Totoki - Executive Deputy President and CFO, Representative Corporate Executive Officer

Today, I will explain the following, consolidated sales for FY'22 were ¥11,539.8 billion, and consolidated operating income was ¥1,208.2 billion both reaching record heights. Income before income taxes was ¥1,180.3 billion and net income attributable to Sony Group Corporation stockholders was ¥937.1 billion. Consolidated operating cash flow excluding the financial services segment was ¥415.5 billion primarily due to an increase in working capital.

Results for FY'22 by segment are shown on this slide. The cash flow results by segment are shown here.

Next, I will explain the full year consolidated results forecast for FY'23. We have decided to disclose the actual results and forecast for adjusted EBITDA on a consolidated basis, which is a group KPI for the current mid-range plan and adjusted all IBDA by segment, which is a metric that adds back a portion of depreciation and amortization expenses to adjusted operating income. Please see Page 24 of the material for the methods of calculating these metrics.

For FY'23, we forecast sales of ¥11,500 billion, operating income of ¥1,170 billion and adjusted EBITDA of ¥1,750 billion. The consolidated operating cash flow forecast excluding the financial service segment is expected to increase significantly year on year to ¥1,250 billion mainly as a result of a decrease in working capital. The FY'23 results forecast by segment is shown here.

Now, I will move to an overview of each business segment. First is the Game and Network Services segment. FY'22 sales were ¥3,644.6 billion, mainly due to the impact of foreign exchange rates and increased sales of PlayStation 5 hardware. Operating income was ¥250 billion, primarily due to an increase in software development expenses, and the recording of acquisition related expenses, despite the impact of increased sales of first party software and improved profitability of hardware. For FY'23, we forecast sales to be ¥3,900 billion, operating income to be ¥270 billion, and adjusted OIBDA forecast to be ¥365 billion.