Presentation [PDF:247KB]

Q2 FY2021 Consolidated Financial Results

(Three months ended September 30, 2021)

October 28, 2021

Sony Group Corporation

Q2 FY2021 Consolidated Results

			(Bln Yen)
	Q2 FY20	Q2 FY21	Change
Sales*	2,105.1	2,369.4	+264.2 bln yen
			（+13%）
Operating income	315.2	318.5	+3.2 bln yen
Income before income taxes			（+1%）
303.7	283.1	-20.6 bln yen
			（-7%）
Net income attributable to	458.6	213.1	-245.5bln yen
Sony Group Corporationʼs stockholders
			（-54%）
Net income attributable to Sony Group Corporationʼs	367.08 yen	170.26 yen	-196.82yen
stockholders per share of common stock (diluted)
Average Rate
1 US dollar	106.2 yen	110.1 yen
1 Euro	124.1 yen	129.8 yen

* "Sales" is used to mean "sales and financial services revenue" in accordance with International Financial Reporting Standards ("IFRS") (applies to all following pages).

1

Q2 FY2021 Consolidated Results: Year-on-year Change

	Year-on-year	Contributing Factors
	Change	(+) Better／(-) Worse
	+264.2 bln yen	・(+) Significant increases in G&NS, Pictures and Music segments sales
Sales	・(+) Increase in EP&S segment sales
+13 %
	On a constant currency basis*, sales increased approx. 3%
Operating	+3.2 bln yen	・(+) Significant increase in EP&S segment operating income
・(+) Increase in All Other operating income primarily due to an increase in the
income	+1 %	share of profit of the investment in M3, Inc. ("M3")
		・(-) Significant decrease in G&NS segment operating income
Income tax	+226.6 bln yen	・(-) In the same quarter of the previous fiscal year, the reversal of a previous
expense		write-down of a significant portion of the deferred tax
Effective tax rate	assets of the consolidated tax filing group in Japan was recorded
	-52%→24%

* For further details about the impact of foreign exchange rate fluctuations on sales and operating income (loss), see Note on page 22 (applies to all following pages).

2

Adjusted Operating Income (Q2)

	Operating	Adjusted
	Operating		Adjusted Operating Income excludes the following items*
	Income
	Income
				 Gain recorded in connection with a business transfer
				(Music segment: +5.9 billion yen)
Q2 FY20	315.2 bln yen	327.6 bln yen		 Inventory write-downs of certain image sensors for mobile
	products (I&SS segment: -17.5 bln yen)
				 Expenses related to the Sony Global Relief Fund for COVID-19
				(Corporate and elimination: -0.8 bln yen)
				 The share of profit of the investment in M3 related to a gain on a
Q2 FY21	318.5 bln yen	313.4 bln yen		change in M3ʼs equity interest in an affiliated company, resulting
	from the issuance of new shares in connection with the affiliated
				companyʼs public listing
				(All Other: +5.1 bln yen)
Change	+3.2 bln yen	-14.3 bln yen
from FY20		（-4%）

* These monetary amounts are disclosed in the Quarterly Financial Statements, the Presentation Slides and the Quarterly Securities Reports for the relevant quarters.	3
Adjusted operating income is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors.

Adjusted Income Before Income Taxes (Q2)

Income Before	Adjusted Income		Adjusted Income Before Income Taxes excludes the following items*
Income Taxes	Before Income Taxes

				 Gain recorded in connection with a business transfer
				(Music segment: +5.9 billion yen)
Q2 FY20	303.7 bln yen	316.1 bln yen		 Inventory write-downs of certain image sensors for mobile
	products (I&SS segment: -17.5 bln yen)
				 Expenses related to the Sony Global Relief Fund for COVID-19
				(Corporate and elimination: -0.8 bln yen)
				 The share of profit of the investment in M3 related to a gain on
Q2 FY21	283.1 bln yen	278.0 bln yen		a change in M3ʼs equity interest in an affiliated company,
	resulting from the issuance of new shares in connection with the
				affiliated companyʼs public listing (All Other: +5.1 bln yen)
Change	-20.6 bln yen	-38.1 bln yen
from FY20		（-12%）

* These monetary amounts are disclosed in the Quarterly Financial Statements, the Presentation Slides and the Quarterly Securities Reports for the relevant quarters.

Adjusted income before income taxes is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors.	4

Adjusted Net Income Attributable to Sony Group Corporationʼs Stockholders (Q2)

	Net Income	Adjusted Net Income
	Attributable to		Adjusted Net Income Attributable to Sony Group Corporationʼs
	Attributable to Sony
	Sony Group
	Group Corporationʼs		Stockholders excludes the following items*
	Corporationʼs
	Stockholders	Stockholders
				 Gain recorded in connection with a business transfer
				(Music segment: +5.9 billion yen)
				 Inventory write-downs of certain image sensors for mobile
				products (I&SS segment: -17.5 bln yen)
Q2 FY20	458.6 bln yen	254.4 bln yen		 Expenses related to the Sony Global Relief Fund for COVID-19
	(Corporate and elimination: -0.8 bln yen)
				 Tax adjustment with regard to the above three items
				(+2.3 bln yen)
				 Reversal of a previous write-down of a significant portion of
				the deferred tax assets of the consolidated tax filing group in
				Japan (+214.3 bln yen)
				 The share of profit of the investment in M3 related to a gain on
Q2 FY21	213.1 bln yen	209.2 bln yen		a change in M3ʼs equity interest in an affiliated company,
	resulting from the issuance of new shares in connection with
				the affiliated companyʼs public listing (All Other: +5.1 bln yen)
				 Tax adjustment with regard to the above item (-1.2 bln yen)
Change	-245.5bln yen	-45.1 bln yen
from FY20		（-18%）

* These monetary amounts are disclosed in the Quarterly Financial Statements, the Presentation Slides and the Quarterly Securities Reports for the relevant quarters.

Adjusted net income attributable to Sony Group Corporationʼs stockholders is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors.

5

Adjusted Net Income Attributable to Sony Group Corporationʼs Stockholders (Q2)

Q2 FY20				(Bln Yen)
		Income Before		Effective	Net Income
		Taxes	Attributable to Sony
		Income Taxes	Tax Rate	Group Corporationʼs
					Stockholders
	Financial results	303.7	-157.9	-52.0%	458.6
	Adjusted items impacting effective tax rate
	Reversal of a previous write-down of a significant	―	+214.3	―	-214.3
	portion of the deferred tax assets of the consolidated
	tax filing group in Japan
	Subtotal	303.7	56.4	18.6%	244.3
	Other adjusted items *	+12.4	+2.3	18.6%	+10.1
	Adjusted results	316.1	58.7	18.6%	254.4
Q2 FY21
		Income Before		Effective	Net Income
		Taxes	Attributable to Sony
		Income Taxes	Tax Rate	Group Corporationʼs
					Stockholders
	Financial results	283.1	68.7	24.3%	213.1
	Adjusted items impacting effective tax rate	―	―	―	―
	Subtotal	283.1	68.7	24.3%	213.1
	Other adjusted items *	-5.1	-1.2	24.3%	-3.9
	Adjusted results	278.0	67.5	24.3%	209.2

* See page 5 for details regarding adjusted items.6

Adjusted results are not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors.

Q2 FY2021 Results by Segment

							(Bln Yen)
				Q2 FY20	Q2 FY21	Change	FX Impact
		Game & Network Services (G&NS)	Sales	506.6	645.4	+138.8	+20.7
		Operating income	105.4	82.7	-22.7	+3.4
		Music	Sales	230.9	271.6	+40.7	+6.3
		Operating income	54.3	50.6	-3.7
		Pictures	Sales	186.6	260.7	+74.2	+9.1
		Operating income	32.8	31.6	-1.2
		Electronics Products & Solutions	Sales	533.4	581.9	+48.5	+20.0
		(EP&S)	Operating income	53.4	72.7	+19.3	+7.6
		Imaging & Sensing Solutions (I&SS)	Sales	307.1	278.3	-28.8	+8.7
		Operating income	50.8	49.7	-1.0	-0.3
		Financial Services	Revenue	371.1	368.4	-2.7
		Operating income	37.0	43.1	+6.0
		All Other	Sales	22.9	24.5	+1.6
		Operating income	1.5	8.6	+7.1
		Corporate and elimination	Sales	-53.5	-61.4	-8.0
		Operating income	-19.9	-20.5	-0.6
		Consolidated total	Sales	2,105.1	2,369.4	+264.2
		Operating income	315.2	318.5	+3.2

Due to organizational changes as of April 1, 2021, from Q1 FY21, Sony transferred some of the businesses and functions previously included within All Other and Corporate and elimination to the EP&S segment. Sales and operating income (loss) of each segment for FY20 are presented to conform to the organizational structure for FY21 (applies to all following pages).

Sales in each business segment represents sales and revenue recorded before intersegment transactions are eliminated. Operating income in each business segment represents operating income reported before intersegment transactions are eliminated and excludes unallocated corporate expenses (applies to all following pages).

7

1H FY2021 Consolidated Results

			(Bln Yen)
	1H FY20	1H FY21	Change
Sales	4,068.1	4,626.2	+558.1 bln yen
			（+14%）
Operating income	536.9	598.5	+61.6 bln yen
			（+11%）
Income before income taxes	572.3	566.3	-6.0 bln yen
			（-1%）
Net income attributable to Sony Group Corporationʼs	652.2	424.9	-227.2bln yen
stockholders			（-35%）
Net income attributable to Sony Group Corporationʼs	522.51 yen	339.45 yen	-183.06yen
stockholders per share of common stock (diluted)
Average rate
1 US dollar	106.9 yen	109.8 yen
1 Euro	121.3 yen	130.8 yen

8

Adjusted Operating Income (1H)

	Operating	Adjusted
	Operating		Adjusted Operating Income excludes the following items*
	Income	Income
				 Gain on the sale of a portion of shares of Pledis Entertainment
				Co., Ltd. (Music segment: +7.2 bln yen)
				 Gain recorded in connection with a business transfer (Music
1H FY20	536.9 bln yen	545.4 bln yen		segment: +5.9 billion yen)
	 Inventory write-downs of certain image sensors for mobile
				products (I&SS segment: -17.5 bln yen)
				 Expenses related to the Sony Global Relief Fund for COVID-19
				(Corporate and elimination: -4.2 bln yen)
				 One-time loss recorded at a subsidiary of Sony Life
				(Financial Services segment: -16.8 bln yen)
				 The share of profit of the investment in M3 related to a gain on a
1H FY21	598.5 bln yen	604.8 bln yen		change in M3ʼs equity interest in an affiliated company, resulting
	from the issuance of new shares in connection with the affiliated
				companyʼs public listing (All Other: +5.1 bln yen)
				 Settlement gain in connection with the termination of the
				defined benefit pension plan at certain U.S. subsidiaries
				(mainly in Corporate and elimination: +5.5 bln yen)
Change	+61.6 bln yen	+59.3 bln yen
from FY20		（+11%）
* These monetary amounts are disclosed in the Quarterly Financial Statements, the Presentation Slides and the Quarterly Securities Reports for the relevant quarters.	9
Adjusted operating income is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors.