SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of November 2023
Commission File Number: 001-06439

SONY GROUP CORPORATION
(Translation of registrant's name into English)

1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN
(Address of principal executive offices)

The registrant files annual reports under cover of Form 20-F.

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F,
 
Form 20-F  X
Form 40-F __
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______
 
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
SONY GROUP CORPORATION
 
(Registrant)
   
   
 
By:  /s/  Hiroki Totoki
 
                (Signature)
 
Hiroki Totoki
 
President, Chief Operating Officer and Chief Financial Officer
 
Date: November 9, 2023

List of materials

Documents attached hereto:
 
i) Press release: Quarterly Financial Statements for the Second Quarter Ended September 30, 2023 And Outlook for the Fiscal Year Ending March 31, 2024




 
 
Quarterly Financial Statements
for the Second Quarter Ended September 30, 2023
And
Outlook for the Fiscal Year Ending March 31, 2024

November 9, 2023
Sony Group Corporation


Quarterly Financial Statements (Unaudited)
   
F-1
 
         
Condensed Consolidated Statements of Financial Position
   
F-1
 
Condensed Consolidated Statements of Income (Three months ended September 30)
   
F-3
 
Condensed Consolidated Statements of Comprehensive Income (Three months ended September 30)
   
F-4
 
Condensed Consolidated Statements of Income (Six months ended September 30)
   
F-5
 
Condensed Consolidated Statements of Comprehensive Income (Six months ended September 30)
   
F-6
 
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Six months ended September 30)
   
F-7
 
Condensed Consolidated Statements of Cash Flows (Six months ended September 30)
   
F-8
 
Notes to Condensed Consolidated Financial Statements
   
F-10
 
-      Business Segment Information
   
F-10
 
-      Going Concern Assumption
   
F-20
 
-      Accounting Policy and Other Information
   
F-20
 
         
Results for Adjusted OIBDA and Adjusted EBITDA for the Three and Six Months Ended September 30, 2023
   
1
 
         
Outlook for the Fiscal Year Ending March 31, 2024
   
2
 
         
Supplemental Information
   
5
 
         
Cautionary Statement
   
12
 

All financial information is presented on the basis of International Financial Reporting Standards (“IFRS”).

Sony Group Corporation and its consolidated subsidiaries are together referred to as “Sony” or “Sony Group”.

Sony has adopted IFRS 17 “Insurance Contracts” (“IFRS 17”) starting in the three months ended June 30, 2023. Figures for the three and six months ended September 30, 2022 and for the fiscal year ended March 31, 2023, as well as the condensed consolidated statement of financial position as of April 1, 2022, are restated in accordance with IFRS 17. Please refer to “Notes to Condensed Consolidated Financial Statements - Accounting Policy and Other Information (Changes in accounting policies)” on page F-20 for more details.



(Unaudited)
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Position
   
Yen in millions
 
   
April 1,
2022
Restated
   
March 31,
2023
Restated
   
September 30,
2023
   
Change from
March 31, 2023
 
ASSETS
                       
Current assets:
                       
Cash and cash equivalents
   
2,049,636
     
1,480,900
     
1,626,514
     
145,614
 
Investments and advances in the Financial Services segment
   
360,681
     
328,358
     
391,022
     
62,664
 
Trade and other receivables, and contract assets
   
1,621,629
     
1,770,948
     
2,168,756
     
397,808
 
Inventories
   
874,007
     
1,468,042
     
2,067,624
     
599,582
 
Other financial assets
   
149,301
     
110,950
     
129,873
     
18,923
 
Other current assets
   
428,522
     
563,334
     
643,186
     
79,852
 
Total current assets
   
5,483,776
     
5,722,532
     
7,026,975
     
1,304,443
 
Non-current assets:
                               
Investments accounted for using the equity method
   
268,513
     
325,220
     
387,845
     
62,625
 
Investments and advances in the Financial Services segment
   
18,251,612
     
18,237,761
     
17,990,817
     
(246,944
)
Property, plant and equipment
   
1,113,213
     
1,344,864
     
1,430,760
     
85,896
 
Right-of-use assets
   
413,430
     
478,063
     
498,320
     
20,257
 
Goodwill
   
952,895
     
1,275,112
     
1,443,365
     
168,253
 
Content assets
   
1,342,046
     
1,561,882
     
1,748,713
     
186,831
 
Other intangible assets
   
450,103
     
563,842
     
592,803
     
28,961
 
Deferred tax assets
   
300,924
     
393,107
     
525,917
     
132,810
 
Other financial assets
   
696,306
     
832,344
     
859,617
     
27,273
 
Other non-current assets
   
379,137
     
419,368
     
463,661
     
44,293
 
Total non-current assets
   
24,168,179
     
25,431,563
     
25,941,818
     
510,255
 
Total assets
   
29,651,955
     
31,154,095
     
32,968,793
     
1,814,698
 
(Continued on the following page.)
F-1


Condensed Consolidated Statements of Financial Position (Continued)
   
Yen in millions
 
   
April 1,
2022
Restated
   
March 31,
2023
Restated
   
September 30,
2023
   
Change from
March 31, 2023
 
LIABILITIES
                       
Current liabilities:
                       
Short-term borrowings
   
1,976,553
     
1,914,934
     
2,480,578
     
565,644
 
Current portion of long-term debt
   
171,409
     
187,942
     
164,135
     
(23,807
)
Trade and other payables
   
1,843,338
     
1,866,101
     
2,314,691
     
448,590
 
Deposits from customers in the banking business
   
2,886,361
     
3,163,237
     
3,429,123
     
265,886
 
Income taxes payables
   
105,437
     
154,543
     
127,798
     
(26,745
)
Participation and residual liabilities in the Pictures segment
   
190,162
     
230,223
     
257,963
     
27,740
 
Other financial liabilities
   
127,079
     
108,049
     
145,435
     
37,386
 
Other current liabilities
   
1,465,326
     
1,693,380
     
1,683,331
     
(10,049
)
Total current liabilities
   
8,765,665
     
9,318,409
     
10,603,054
     
1,284,645
 
Non-current liabilities:
                               
Long-term debt
   
1,203,646
     
1,767,696
     
1,838,034
     
70,338
 
Defined benefit liabilities
   
254,548
     
236,121
     
243,500
     
7,379
 
Deferred tax liabilities
   
120,582
     
117,621
     
134,130
     
16,509
 
Insurance contract liabilities
   
13,042,875
     
12,364,973
     
12,226,559
     
(138,414
)
Participation and residual liabilities in the Pictures segment
   
220,113
     
192,952
     
203,285
     
10,333
 
Other financial liabilities
   
231,463
     
371,580
     
378,780
     
7,200
 
Other non-current liabilities
   
106,481
     
127,593
     
140,831
     
13,238
 
Total non-current liabilities
   
15,179,708
     
15,178,536
     
15,165,119
     
(13,417
)
Total liabilities
   
23,945,373
     
24,496,945
     
25,768,173
     
1,271,228
 
EQUITY
                               
Sony Group Corporation’s stockholders’ equity:
                               
Common stock
   
880,365
     
880,365
     
880,365
     
-
 
Additional paid-in capital
   
1,461,053
     
1,463,807
     
1,480,420
     
16,613
 
Retained earnings
   
4,170,417
     
5,092,442
     
5,461,664
     
369,222
 
Accumulated other comprehensive income
   
(677,989
)
   
(614,570
)
   
(448,712
)
   
165,858
 
Treasury stock, at cost
   
(180,042
)
   
(223,507
)
   
(251,281
)
   
(27,774
)
Equity attributable to Sony Group Corporation’s stockholders
   
5,653,804
     
6,598,537
     
7,122,456
     
523,919
 
Noncontrolling interests
   
52,778
     
58,613
     
78,164
     
19,551
 
Total equity
   
5,706,582
     
6,657,150
     
7,200,620
     
543,470
 
Total liabilities and equity
   
29,651,955
     
31,154,095
     
32,968,793
     
1,814,698
 
F-2

Condensed Consolidated Statements of Income
   
Yen in millions
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Sales and financial services revenue:
                 
Sales
   
2,451,043
     
2,727,012
     
275,969
 
Financial services revenue
                       
  Insurance revenue
   
137,343
     
143,677
     
6,334
 
  Other financial services revenue
   
37,078
     
(42,066
)
   
(79,144
)
  Total financial services revenue
   
174,421
     
101,611
     
(72,810
)
Total sales and financial services revenue
   
2,625,464
     
2,828,623
     
203,159
 
Costs and expenses:
                       
Cost of sales
   
1,688,286
     
1,967,475
     
279,189
 
Selling, general and administrative
   
482,457
     
518,729
     
36,272
 
Financial services expenses
                       
  Insurance service expenses
   
101,382
     
95,220
     
(6,162
)
  Insurance finance expenses (income)
   
(10,648
)
   
(51,027
)
   
(40,379
)
  Other financial services expenses
   
8,583
     
41,540
     
32,957
 
  Total financial services expenses
   
99,317
     
85,733
     
(13,584
)
Other operating (income) expense, net
   
(8,069
)
   
(3,380
)
   
4,689
 
Total costs and expenses
   
2,261,991
     
2,568,557
     
306,566
 
Share of profit (loss) of investments accounted for using the equity method
   
5,930
     
2,943
     
(2,987
)
Operating income
   
369,403
     
263,009
     
(106,394
)
Financial income
   
18,594
     
12,617
     
(5,977
)
Financial expenses
   
16,880
     
18,031
     
1,151
 
Income before income taxes
   
371,117
     
257,595
     
(113,522
)
Income taxes
   
85,728
     
56,439
     
(29,289
)
Net income
   
285,389
     
201,156
     
(84,233
)
                         
Net income attributable to
                       
Sony Group Corporation’s stockholders
   
281,681
     
200,105
     
(81,576
)
Noncontrolling interests
   
3,708
     
1,051
     
(2,657
)

   
Yen
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Per share data:
                 
  Net income attributable to Sony Group Corporation’s stockholders
                 
  - Basic
   
227.76
     
162.21
     
(65.55
)
  - Diluted
   
226.54
     
161.74
     
(64.80
)

F-3



Condensed Consolidated Statements of Comprehensive Income
   
Yen in millions
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
  Net income
   
285,389
     
201,156
     
(84,233
)
  Other comprehensive income, net of tax -
                       
  Items that will not be reclassified to profit or loss
                       
Changes in equity instruments measured at fair value through other comprehensive income
   
(13,390
)
   
(11,087
)
   
2,303
 
Remeasurement of defined benefit pension plans
   
(87
)
   
(27
)
   
60
 
Share of other comprehensive income of investments accounted for using the equity method
   
64
     
178
     
114
 
  Items that may be reclassified subsequently to profit or loss
                       
Changes in debt instruments measured at fair value through other
comprehensive income
   
(354,803
)
   
(623,430
)
   
(268,627
)
Cash flow hedges
   
8,708
     
1,928
     
(6,780
)
Insurance finance income (expenses)
   
284,009
     
496,262
     
212,253
 
Exchange differences on translating foreign operations
   
116,651
     
77,654
     
(38,997
)
Share of other comprehensive income of investments accounted for using the equity method
   
1,762
     
988
     
(774
)
Other
   
(62
)
   
(396
)
   
(334
)
  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
)
  Noncontrolling interests
   
4,942
     
2,050
     
(2,892
)


F-4


Condensed Consolidated Statements of Income
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Sales and financial services revenue:
                 
Sales
   
4,467,080
     
5,011,555
     
544,475
 
Financial services revenue
                       
  Insurance revenue
   
272,913
     
286,427
     
13,514
 
  Other financial services revenue
   
115,231
     
494,293
     
379,062
 
  Total financial services revenue
   
388,144
     
780,720
     
392,576
 
Total sales and financial services revenue
   
4,855,224
     
5,792,275
     
937,051
 
Costs and expenses:
                       
Cost of sales
   
3,079,953
     
3,591,985
     
512,032
 
Selling, general and administrative
   
889,223
     
993,668
     
104,445
 
Financial services expenses
                       
  Insurance service expenses
   
190,888
     
192,586
     
1,698
 
  Insurance finance expenses (income)
   
(48,833
)
   
438,325
     
487,158
 
  Other financial services expenses
   
31,726
     
79,365
     
47,639
 
  Total financial services expenses
   
173,781
     
710,276
     
536,495
 
Other operating (income) expense, net
   
(10,794
)
   
(12,122
)
   
(1,328
)
Total costs and expenses
   
4,132,163
     
5,283,807
     
1,151,644
 
Share of profit (loss) of investments accounted for using the equity method
   
11,207
     
7,583
     
(3,624
)
Operating income
   
734,268
     
516,051
     
(218,217
)
Financial income
   
31,457
     
40,808
     
9,351
 
Financial expenses
   
45,330
     
23,230
     
(22,100
)
Income before income taxes
   
720,395
     
533,629
     
(186,766
)
Income taxes
   
173,802
     
114,531
     
(59,271
)
Net income
   
546,593
     
419,098
     
(127,495
)
                         
Net income attributable to
                       
Sony Group Corporation’s stockholders
   
542,775
     
417,650
     
(125,125
)
Noncontrolling interests
   
3,818
     
1,448
     
(2,370
)

   
Yen
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Per share data:
                 
  Net income attributable to Sony Group Corporation’s stockholders
                 
  - Basic
   
438.92
     
338.48
     
(100.44
)
  - Diluted
   
436.17
     
337.39
     
(98.78
)


F-5


Condensed Consolidated Statements of Comprehensive Income
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
  Net income
   
546,593
     
419,098
     
(127,495
)
  Other comprehensive income, net of tax -
                       
  Items that will not be reclassified to profit or loss
                       
Changes in equity instruments measured at fair value through other comprehensive income
   
(15,508
)
   
(18,004
)
   
(2,496
)
Remeasurement of defined benefit pension plans
   
29
     
(452
)
   
(481
)
Share of other comprehensive income of investments accounted for using the equity method
   
272
     
317
     
45
 
  Items that may be reclassified subsequently to profit or loss
                       
Changes in debt instruments measured at fair value through other
comprehensive income
   
(926,652
)
   
(695,972
)
   
230,680
 
Cash flow hedges
   
7,591
     
(302
)
   
(7,893
)
Insurance finance income (expenses)
   
790,724
     
516,779
     
(273,945
)
Exchange differences on translating foreign operations
   
363,984
     
363,425
     
(559
)
Share of other comprehensive income of investments accounted for using the equity method
   
4,441
     
4,138
     
(303
)
Other
   
(138
)
   
(342
)
   
(204
)
  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
)
  Noncontrolling interests
   
8,491
     
4,081
     
(4,410
)

F-6


Condensed Consolidated Statements of Changes in Stockholders’ Equity

   
Yen in millions
 
   
Common
stock
   
Additional
paid-in
capital
   
Retained
earnings
   
Accumulated
other
comprehensive
income
   
Treasury
stock, at
cost
   
Sony Group
Corporation’s
stockholders’
equity
   
Noncontrolling
interests
   
Total equity
 
Balance at April 1, 2022
   
880,365
     
1,461,053
     
3,760,763
     
1,222,332
     
(180,042
)
   
7,144,471
     
52,778
     
7,197,249
 
Cumulative effects of the application of new accounting standards
   
     
     
409,654
     
(1,900,321
)
   
     
(1,490,667
)
   
     
(1,490,667
)
Restated balance at April 1, 2022
   
880,365
     
1,461,053
     
4,170,417
     
(677,989
)
   
(180,042
)
   
5,653,804
     
52,778
     
5,706,582
 
Comprehensive income (restated):
                                                               
Net income
                   
542,775
                     
542,775
     
3,818
     
546,593
 
Other comprehensive income, net of tax
                           
220,070
             
220,070
     
4,673
     
224,743
 
Total comprehensive income (restated)
                   
542,775
     
220,070
             
762,845
     
8,491
     
771,336
 
Transfer to retained earnings
                   
250
     
(250
)
           
             
 
Transactions with stockholders and other:
                                                               
Exercise of stock acquisition rights
           
(2
)
   
(288
)
           
2,763
     
2,473
             
2,473
 
Conversion of convertible bonds
           
(2,588
)
   
(13,858
)
           
42,993
     
26,547
             
26,547
 
Stock-based compensation
           
4,890
                             
4,890
             
4,890
 
Dividends declared
                   
(43,295
)
                   
(43,295
)
   
(4,555
)
   
(47,850
)
Purchase of treasury stock
                                   
(52,080
)
   
(52,080
)
           
(52,080
)
Reissuance of treasury stock
           
1,231
                     
2,390
     
3,621
             
3,621
 
Transactions with noncontrolling interests shareholders and other
           
(8,147
)
                           
(8,147
)
   
3,653
     
(4,494
)
Restated balance at September 30, 2022
   
880,365
     
1,456,437
     
4,656,001
     
(458,169
)
   
(183,976
)
   
6,350,658
     
60,367
     
6,411,025
 


   
Yen in millions
 
   
Common
stock
   
Additional
paid-in
capital
   
Retained
earnings
   
Accumulated
other
comprehensive
income
   
Treasury
stock, at
cost
   
Sony Group
Corporation’s
stockholders’
equity
   
Noncontrolling
interests
   
Total equity
 
Balance at April 1, 2023
   
880,365
     
1,463,807
     
5,092,442
     
(614,570
)
   
(223,507
)
   
6,598,537
     
58,613
     
6,657,150
 
Comprehensive income:
                                                               
Net income
                   
417,650
                     
417,650
     
1,448
     
419,098
 
Other comprehensive income, net of tax
                           
166,954
             
166,954
     
2,633
     
169,587
 
Total comprehensive income
                   
417,650
     
166,954
             
584,604
     
4,081
     
588,685
 
Transfer to retained earnings
                   
1,096
     
(1,096
)
           
             
 
Transactions with stockholders and other:
                                                               
Exercise of stock acquisition rights
           
(360
)
   
(144
)
           
7,602
     
7,098
             
7,098
 
Stock-based compensation
           
6,684
                             
6,684
             
6,684
 
Dividends declared
                   
(49,380
)
                   
(49,380
)
   
(2,110
)
   
(51,490
)
Purchase of treasury stock
                                   
(38,664
)
   
(38,664
)
           
(38,664
)
Reissuance of treasury stock
           
1,784
                     
3,288
     
5,072
             
5,072
 
Transactions with noncontrolling interests shareholders and other
           
8,505
                             
8,505
     
17,580
     
26,085
 
Balance at September 30, 2023
   
880,365
     
1,480,420
     
5,461,664
     
(448,712
)
   
(251,281
)
   
7,122,456
     
78,164
     
7,200,620
 

F-7


Condensed Consolidated Statements of Cash Flows
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
Cash flows from operating activities:
           
  Income before income taxes
   
720,395
     
533,629
 
  Adjustments to reconcile income before income taxes to net cash provided by (used in)
      operating activities:
               
Depreciation and amortization, including amortization of contract costs
   
487,613
     
570,466
 
Other operating (income) expense, net
   
(10,794
)
   
(12,122
)
(Gain) loss on securities, net (other than Financial Services segment)
   
27,994
     
(10,816
)
Share of profit of investments accounted for using the equity method, net of dividends
   
(5,205
)
   
(333
)
Changes in assets and liabilities:
               
Increase in trade receivables and contract assets
   
(140,586
)
   
(253,983
)
Increase in inventories
   
(470,440
)
   
(494,463
)
Increase in investments and advances in the Financial Services segment
   
(721,544
)
   
(780,169
)
Increase in content assets
   
(303,903
)
   
(264,387
)
Increase in trade payables
   
134,301
     
304,499
 
Increase in insurance contract liabilities, net of insurance contract assets
   
67,622
     
588,156
 
Increase in deposits from customers in the banking business
   
141,028
     
284,045
 
Increase in borrowings in the life insurance business and the banking business
   
32,962
     
108,667
 
Decrease in taxes payable other than income taxes, net
   
(68,811
)
   
(43,042
)
Increase in other financial assets and other current assets
   
(19,819
)
   
(67,148
)
Decrease in other financial liabilities and other current liabilities
   
(9,135
)
   
(80,846
)
  Income taxes paid
   
(69,292
)
   
(154,830
)
  Other
   
(175,642
)
   
(112,292
)
 Net cash provided by (used in) operating activities
   
(383,256
)
   
115,031
 
(Continued on the following page.)

F-8


Condensed Consolidated Statements of Cash Flows (Continued)
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
  Cash flows from investing activities:
           
Payments for property, plant and equipment and other intangible assets
   
(229,105
)
   
(306,074
)
Proceeds from sales of property, plant and equipment and other intangible assets
   
6,401
     
7,412
 
Payments for investments and advances (other than Financial Services segment)
   
(169,582
)
   
(48,891
)
Proceeds from sales or return of investments and collections of advances
    (other than Financial Services segment)
   
8,301
     
76,374
 
Payments for purchases of businesses
   
(242,479
)
   
(67,273
)
Other
   
(13,208
)
   
3,384
 
Net cash used in investing activities
   
(639,672
)
   
(335,068
)
  Cash flows from financing activities:
               
Increase in short-term borrowings, net
   
131,190
     
447,839
 
Proceeds from issuance of long-term debt
   
90,490
     
9,769
 
Payments of long-term debt
   
(69,389
)
   
(70,834
)
Dividends paid
   
(43,236
)
   
(49,333
)
Payments for purchases of treasury stock
   
(52,080
)
   
(38,664
)
Other
   
(618
)
   
3,043
 
Net cash provided by financing activities
   
56,357
     
301,820
 
  Effect of exchange rate changes on cash and cash equivalents
   
126,687
     
63,831
 
  Net increase (decrease) in cash and cash equivalents
   
(839,884
)
   
145,614
 
  Cash and cash equivalents at beginning of the fiscal year
   
2,049,636
     
1,480,900
 
  Cash and cash equivalents at end of the period
   
1,209,752
     
1,626,514
 

F-9


Notes to Condensed Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue
   
Yen in millions
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Sales and financial services revenue:
                 
Game & Network Services -
                 
Customers
   
702,718
     
930,137
     
227,419
 
Intersegment
   
18,017
     
23,959
     
5,942
 
Total
   
720,735
     
954,096
     
233,361
 
Music -
                       
Customers
   
356,928
     
399,360
     
42,432
 
Intersegment
   
2,391
     
9,356
     
6,965
 
Total
   
359,319
     
408,716
     
49,397
 
Pictures -
                       
Customers
   
335,580
     
397,347
     
61,767
 
Intersegment
   
1,888
     
2,289
     
401
 
Total
   
337,468
     
399,636
     
62,168
 
Entertainment, Technology & Services -
                       
Customers
   
666,732
     
603,214
     
(63,518
)
Intersegment
   
10,313
     
10,326
     
13
 
Total
   
677,045
     
613,540
     
(63,505
)
Imaging & Sensing Solutions -
                       
Customers
   
369,580
     
374,657
     
5,077
 
Intersegment
   
28,786
     
31,659
     
2,873
 
Total
   
398,366
     
406,316
     
7,950
 
Financial Services -
                       
Customers
   
174,421
     
101,611
     
(72,810
)
Intersegment
   
3,642
     
2,304
     
(1,338
)
Total
   
178,063
     
103,915
     
(74,148
)
All Other -
                       
Customers
   
17,643
     
20,418
     
2,775
 
Intersegment
   
3,089
     
3,807
     
718
 
Total
   
20,732
     
24,225
     
3,493
 
Corporate and elimination
   
(66,264
)
   
(81,821
)
   
(15,557
)
Consolidated total
   
2,625,464
     
2,828,623
     
203,159
 

  Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with the Entertainment, Technology & Services (“ET&S”) segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. Imaging & Sensing Solutions (“I&SS”) intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S segment. Corporate and elimination includes certain brand and patent royalty income.
F-10


Segment profit (loss)
   
Yen in millions
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Operating income (loss):
                 
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
)
Total
   
385,149
     
284,481
     
(100,668
)
Corporate and elimination
   
(15,746
)
   
(21,472
)
   
(5,726
)
Consolidated operating income
   
369,403
     
263,009
     
(106,394
)

  Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.
F-11


(Business Segments)
Segment sales and financial services revenue
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Sales and financial services revenue:
                 
Game & Network Services -
                 
Customers
   
1,291,179
     
1,685,140
     
393,961
 
Intersegment
   
33,672
     
40,836
     
7,164
 
Total
   
1,324,851
     
1,725,976
     
401,125
 
Music -
                       
Customers
   
662,281
     
755,116
     
92,835
 
Intersegment
   
5,108
     
11,829
     
6,721
 
Total
   
667,389
     
766,945
     
99,556
 
Pictures -
                       
Customers
   
676,827
     
717,525
     
40,698
 
Intersegment
   
2,018
     
2,477
     
459
 
Total
   
678,845
     
720,002
     
41,157
 
Entertainment, Technology & Services -
                       
Customers
   
1,210,638
     
1,166,506
     
(44,132
)
Intersegment
   
18,717
     
18,817
     
100
 
Total
   
1,229,355
     
1,185,323
     
(44,032
)
Imaging & Sensing Solutions -
                       
Customers
   
588,803
     
645,133
     
56,330
 
Intersegment
   
47,405
     
53,923
     
6,518
 
Total
   
636,208
     
699,056
     
62,848
 
Financial Services -
                       
Customers
   
388,144
     
780,720
     
392,576
 
Intersegment
   
5,941
     
4,606
     
(1,335
)
Total
   
394,085
     
785,326
     
391,241
 
All Other -
                       
Customers
   
33,200
     
36,820
     
3,620
 
Intersegment
   
6,866
     
6,898
     
32
 
Total
   
40,066
     
43,718
     
3,652
 
Corporate and elimination
   
(115,575
)
   
(134,071
)
   
(18,496
)
Consolidated total
   
4,855,224
     
5,792,275
     
937,051
 

  G&NS intersegment amounts primarily consist of transactions with the ET&S segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. I&SS intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S segment. Corporate and elimination includes certain brand and patent royalty income.
F-12


Segment profit (loss)
   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
   
Change
 
Operating income (loss):
                 
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
)
Total
   
766,869
     
548,358
     
(218,511
)
Corporate and elimination
   
(32,601
)
   
(32,307
)
   
294
 
Consolidated operating income
   
734,268
     
516,051
     
(218,217
)

  Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.
F-13

(Sales to Customers by Product Category)

  The following table is a breakdown of sales and financial services revenue to external customers by product category for each segment.  Sony management views each segment as a single operating segment.
   
Yen in millions
 
   
Three months ended September 30
 
Sales and financial services revenue:
 
2022
Restated
   
2023
   
Change
 
Game & Network Services
                 
Digital Software and Add-on Content
   
332,859
     
423,096
     
90,237
 
Network Services
   
117,006
     
133,887
     
16,881
 
Hardware and Others
   
252,853
     
373,154
     
120,301
 
Total
   
702,718
     
930,137
     
227,419
 
Music
                       
Recorded Music - Streaming
   
151,930
     
173,858
     
21,928
 
Recorded Music - Others
   
72,030
     
79,881
     
7,851
 
Music Publishing
   
73,489
     
82,725
     
9,236
 
Visual Media and Platform
   
59,479
     
62,896
     
3,417
 
Total
   
356,928
     
399,360
     
42,432
 
Pictures
                       
Motion Pictures
   
123,791
     
129,209
     
5,418
 
Television Productions
   
114,586
     
173,385
     
58,799
 
Media Networks
   
97,203
     
94,753
     
(2,450
)
Total
   
335,580
     
397,347
     
61,767
 
Entertainment, Technology & Services
                       
Televisions
   
226,751
     
161,002
     
(65,749
)
Audio and Video
   
99,887
     
109,100
     
9,213
 
Still and Video Cameras
   
147,862
     
159,203
     
11,341
 
Mobile Communications
   
93,227
     
72,774
     
(20,453
)
Other
   
99,005
     
101,135
     
2,130
 
Total
   
666,732
     
603,214
     
(63,518
)
Imaging & Sensing Solutions
   
369,580
     
374,657
     
5,077
 
Financial Services
   
174,421
     
101,611
     
(72,810
)
All Other
   
17,643
     
20,418
     
2,775
 
Corporate
   
1,862
     
1,879
     
17
 
Consolidated total
   
2,625,464
     
2,828,623
     
203,159
 


F-14


   
Yen in millions
 
   
Six months ended September 30
 
Sales and financial services revenue:
 
2022
Restated
   
2023
   
Change
 
Game & Network Services
                 
Digital Software and Add-on Content
   
618,704
     
788,442
     
169,738
 
Network Services
   
223,529
     
258,386
     
34,857
 
Hardware and Others
   
448,946
     
638,312
     
189,366
 
Total
   
1,291,179
     
1,685,140
     
393,961
 
Music
                       
Recorded Music - Streaming
   
291,041
     
338,745
     
47,704
 
Recorded Music - Others
   
132,486
     
152,766
     
20,280
 
Music Publishing
   
136,546
     
157,864
     
21,318
 
Visual Media and Platform
   
102,208
     
105,741
     
3,533
 
Total
   
662,281
     
755,116
     
92,835
 
Pictures
                       
Motion Pictures
   
246,916
     
254,713
     
7,797
 
Television Productions
   
253,747
     
277,616
     
23,869
 
Media Networks
   
176,164
     
185,196
     
9,032
 
Total
   
676,827
     
717,525
     
40,698
 
Entertainment, Technology & Services
                       
Televisions
   
368,544
     
296,984
     
(71,560
)
Audio and Video
   
190,947
     
198,249
     
7,302
 
Still and Video Cameras
   
287,565
     
321,077
     
33,512
 
Mobile Communications
   
192,257
     
160,136
     
(32,121
)
Other
   
171,325
     
190,060
     
18,735
 
Total
   
1,210,638
     
1,166,506
     
(44,132
)
Imaging & Sensing Solutions
   
588,803
     
645,133
     
56,330
 
Financial Services
   
388,144
     
780,720
     
392,576
 
All Other
   
33,200
     
36,820
     
3,620
 
Corporate
   
4,152
     
5,315
     
1,163
 
Consolidated total
   
4,855,224
     
5,792,275
     
937,051
 

  In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through the network; Network Services includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software, game software sold bundled with home gaming consoles, peripheral devices and first-party software for third-party platforms. In the Music segment, Recorded Music - Streaming includes the distribution of digital recorded music by streaming; Recorded Music - Others includes the distribution of recorded music by physical media and digital download as well as revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes the production and distribution of animation titles and game applications, and various service offerings for music and visual products.  In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of live-action and animated motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television networks and direct-to-consumer streaming services worldwide. In the ET&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.
F-15

(Condensed Financial Services Financial Statements)
  The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not in accordance with IFRS, which is used by Sony to prepare its condensed consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s condensed consolidated financial statements. Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment. The figures shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of each. The condensed consolidated financial statements column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.

Condensed Statements of Financial Position
   
Yen in millions
 
   
Financial Services
   
Sony without
Financial Services
   
Consolidated
 
   
April 1,
2022
Restated
   
March 31,
2023
Restated
   
September 30,
2023
   
April 1,
2022
Restated
   
March 31,
2023
Restated
   
September 30,
2023
   
April 1,
2022
Restated
   
March 31,
2023
Restated
   
September 30,
2023
 
  ASSETS
                                                     
Current assets:
                                                     
Cash and cash equivalents
 
¥
889,140
   
¥
756,493
   
¥
930,211
   
¥
1,160,496
   
¥
724,407
   
¥
696,303
   
¥
2,049,636
   
¥
1,480,900
   
¥
1,626,514
 
Investments and advances in the Financial Services segment
   
360,681
     
328,358
     
391,022
     
     
     
     
360,681
     
328,358
     
391,022
 
Trade and other receivables, and contract assets
   
163,037
     
127,413
     
127,273
     
1,478,620
     
1,668,257
     
2,058,962
     
1,621,629
     
1,770,948
     
2,168,756
 
Inventories
   
     
     
     
874,007
     
1,468,042
     
2,067,624
     
874,007
     
1,468,042
     
2,067,624
 
Other financial assets
   
81,174
     
47,044
     
65,245
     
68,124
     
63,906
     
64,629
     
149,301
     
110,950
     
129,873
 
Other current assets
   
27,893
     
16,029
     
25,232
     
450,953
     
562,442
     
623,941
     
428,522
     
563,334
     
643,186
 
  Total current assets
   
1,521,925
     
1,275,337
     
1,538,983
     
4,032,200
     
4,487,054
     
5,511,459
     
5,483,776
     
5,722,532
     
7,026,975
 
Non-current assets:
                                                                       
Investments accounted for using the equity method
   
     
     
     
268,513
     
325,220
     
387,845
     
268,513
     
325,220
     
387,845
 
Investments and advances in the Financial Services segment
   
18,251,612
     
18,237,761
     
17,990,817
     
     
     
     
18,251,612
     
18,237,761
     
17,990,817
 
Investments in Financial Services, at cost
   
     
     
     
550,483
     
550,483
     
550,483
     
     
     
 
Property, plant and equipment
   
18,010
     
15,316
     
14,804
     
1,095,241
     
1,329,219
     
1,415,628
     
1,113,213
     
1,344,864
     
1,430,760
 
Right-of-use assets
   
73,774
     
84,023
     
80,528
     
339,658
     
395,210
     
418,936
     
413,430
     
478,063
     
498,320
 
Goodwill and intangible assets, including content assets
   
72,578
     
78,197
     
76,570
     
2,672,466
     
3,322,639
     
3,708,311
     
2,745,044
     
3,400,836
     
3,784,881
 
Deferred tax assets
   
2,335
     
2,687
     
3,503
     
332,330
     
431,533
     
508,222
     
300,924
     
393,107
     
525,917
 
Other financial assets
   
37,037
     
46,941
     
58,695
     
663,233
     
789,470
     
805,071
     
696,306
     
832,344
     
859,617
 
Other non-current assets
   
167,744
     
172,565
     
172,065
     
284,834
     
319,306
     
363,742
     
379,137
     
419,368
     
463,661
 
  Total non-current assets
   
18,623,090
     
18,637,490
     
18,396,982
     
6,206,758
     
7,463,080
     
8,158,238
     
24,168,179
     
25,431,563
     
25,941,818
 
  Total assets
 
¥
20,145,015
   
¥
19,912,827
   
¥
19,935,965
   
¥
10,238,958
   
¥
11,950,134
   
¥
13,669,697
   
¥
29,651,955
   
¥
31,154,095
   
¥
32,968,793
 
                                                                         
  LIABILITIES AND EQUITY
                                                                       
Current liabilities:
                                                                       
Short-term borrowings
 
¥
1,964,776
   
¥
1,891,856
   
¥
1,987,519
   
¥
183,187
   
¥
211,020
   
¥
657,194
   
¥
2,147,962
   
¥
2,102,876
   
¥
2,644,713
 
Trade and other payables
   
119,017
     
77,703
     
70,437
     
1,744,011
     
1,812,670
     
2,261,454
     
1,843,338
     
1,866,101
     
2,314,691
 
Deposits from customers in the banking business
   
2,886,361
     
3,163,237
     
3,429,123
     
     
     
     
2,886,361
     
3,163,237
     
3,429,123
 
Income taxes payables
   
3,789
     
15,213
     
6,513
     
101,648
     
139,330
     
121,285
     
105,437
     
154,543
     
127,798
 
Participation and residual liabilities in the Pictures segment
   
     
     
     
190,162
     
230,223
     
257,963
     
190,162
     
230,223
     
257,963
 
Other financial liabilities
   
98,029
     
77,605
     
91,549
     
29,050
     
30,444
     
53,886
     
127,079
     
108,049
     
145,435
 
Other current liabilities
   
218,865
     
194,174
     
197,485
     
1,297,115
     
1,514,792
     
1,492,125
     
1,465,326
     
1,693,380
     
1,683,331
 
  Total current liabilities
   
5,290,837
     
5,419,788
     
5,782,626
     
3,545,173
     
3,938,479
     
4,843,907
     
8,765,665
     
9,318,409
     
10,603,054
 
Non-current liabilities:
                                                                       
Long-term debt
   
470,498
     
663,353
     
672,639
     
733,148
     
1,104,344
     
1,165,395
     
1,203,646
     
1,767,696
     
1,838,034
 
Defined benefit liabilities
   
37,167
     
37,183
     
37,791
     
217,381
     
198,938
     
205,709
     
254,548
     
236,121
     
243,500
 
Deferred tax liabilities
   
58,666
     
60,554
     
500
     
110,715
     
112,938
     
134,196
     
120,582
     
117,621
     
134,130
 
Insurance contract liabilities
   
13,042,875
     
12,364,973
     
12,226,559
     
     
     
     
13,042,875
     
12,364,973
     
12,226,559
 
Participation and residual liabilities in the Pictures segment
   
     
     
     
220,113
     
192,952
     
203,285
     
220,113
     
192,952
     
203,285
 
Other financial liabilities
   
147,712
     
175,026
     
203,541
     
86,391
     
199,327
     
178,113
     
231,463
     
371,580
     
378,780
 
Other non-current liabilities
   
5,864
     
7,225
     
7,514
     
121,558
     
142,096
     
154,625
     
106,481
     
127,593
     
140,831
 
  Total non-current liabilities
   
13,762,782
     
13,308,314
     
13,148,544
     
1,489,306
     
1,950,595
     
2,041,323
     
15,179,708
     
15,178,536
     
15,165,119
 
  Total liabilities
   
19,053,619
     
18,728,102
     
18,931,170
     
5,034,479
     
5,889,074
     
6,885,230
     
23,945,373
     
24,496,945
     
25,768,173
 
Equity:
                                                                       
Stockholders’ equity of Financial Services
   
1,087,948
     
1,180,905
     
1,000,677
     
     
     
     
     
     
 
Stockholders’ equity of Sony without Financial Services
   
     
     
     
5,155,149
     
6,006,267
     
6,710,421
     
     
     
 
Sony Group Corporation’s stockholders’ equity
   
     
     
     
     
     
     
5,653,804
     
6,598,537
     
7,122,456
 
Noncontrolling interests
   
3,448
     
3,820
     
4,118
     
49,330
     
54,793
     
74,046
     
52,778
     
58,613
     
78,164
 
  Total equity
   
1,091,396
     
1,184,725
     
1,004,795
     
5,204,479
     
6,061,060
     
6,784,467
     
5,706,582
     
6,657,150
     
7,200,620
 
  Total liabilities and equity
 
¥
20,145,015
   
¥
19,912,827
   
¥
19,935,965
   
¥
10,238,958
   
¥
11,950,134
   
¥
13,669,697
   
¥
29,651,955
   
¥
31,154,095
   
¥
32,968,793
 

F-16



Condensed Statements of Income
   
Yen in millions
 
   
Three months ended September 30
 
   
Financial Services
   
Sony without
Financial Services
   
Consolidated
 
   
2022
Restated
   
2023
   
2022
Restated
   
2023
   
2022
Restated
   
2023
 
                                     
Sales
 
¥
   
¥
   
¥
2,452,607
   
¥
2,728,907
   
¥
2,451,043
   
¥
2,727,012
 
Financial services revenue
   
178,063
     
103,915
     
     
     
174,421
     
101,611
 
Total sales and financial services revenue
   
178,063
     
103,915
     
2,452,607
     
2,728,907
     
2,625,464
     
2,828,623
 
                                                 
Cost of sales
   
     
     
1,691,296
     
1,970,844
     
1,688,286
     
1,967,475
 
Selling, general and administrative
   
     
     
479,669
     
517,250
     
482,457
     
518,729
 
Financial services expenses
   
102,959
     
88,036
     
     
     
99,317
     
85,733
 
Other operating (income) expense, net
   
(4,885
)
   
198
     
(878
)
   
(3,578
)
   
(8,069
)
   
(3,380
)
Total costs and expenses
   
98,074
     
88,234
     
2,170,087
     
2,484,516
     
2,261,991
     
2,568,557
 
                                                 
Share of profit (loss) of investments accounted for using the equity method
   
     
     
5,930
     
2,943
     
5,930
     
2,943
 
                                                 
Operating income
   
79,989
     
15,681
     
288,450
     
247,334
     
369,403
     
263,009
 
                                                 
Financial income (expenses), net
   
     
     
1,713
     
(5,416
)
   
1,714
     
(5,414
)
                                                 
Income before income taxes
   
79,989
     
15,681
     
290,163
     
241,918
     
371,117
     
257,595
 
                                                 
Income taxes
   
21,660
     
4,849
     
63,797
     
51,590
     
85,728
     
56,439
 
                                                 
Net income
   
58,329
     
10,832
     
226,366
     
190,328
     
285,389
     
201,156
 
                                                 
      Net income of Financial Services
 
¥
58,215
   
¥
10,686
   
¥
   
¥
   
¥
   
¥
 
                                                 
      Net income of Sony without Financial Services
 
¥
   
¥
   
¥
222,772
   
¥
189,422
   
¥
   
¥
 
                                                 
      Net income attributable to Sony Group Corporation’s
      stockholders
 
¥
   
¥
   
¥
   
¥
   
¥
281,681
   
¥
200,105
 
                                                 
      Net income attributable to noncontrolling interests
 
¥
114
   
¥
146
   
¥
3,594
   
¥
906
   
¥
3,708
   
¥
1,051
 
F-17


Condensed Statements of Income
   
Yen in millions
 
   
Six months ended September 30
 
   
Financial Services
   
Sony without
Financial Services
   
Consolidated
 
   
2022
Restated
   
2023
   
2022
Restated
   
2023
   
2022
Restated
   
2023
 
                                     
Sales
 
¥
   
¥
   
¥
4,470,190
   
¥
5,014,696
   
¥
4,467,080
   
¥
5,011,555
 
Financial services revenue
   
394,085
     
785,326
     
-
     
-
     
388,144
     
780,720
 
Total sales and financial services revenue
   
394,085
     
785,326
     
4,470,190
     
5,014,696
     
4,855,224
     
5,792,275
 
                                                 
Cost of sales
   
     
     
3,085,861
     
3,598,406
     
3,079,953
     
3,591,985
 
Selling, general and administrative
   
     
     
885,079
     
990,379
     
889,223
     
993,668
 
Financial services expenses
   
179,722
     
714,882
     
-
     
-
     
173,781
     
710,276
 
Other operating (income) expense, net
   
(4,834
)
   
249
     
(3,654
)
   
(12,371
)
   
(10,794
)
   
(12,122
)
Total costs and expenses
   
174,888
     
715,131
     
3,967,286
     
4,576,414
     
4,132,163
     
5,283,807
 
                                                 
Share of profit (loss) of investments accounted for using the equity method
   
     
     
11,207
     
7,583
     
11,207
     
7,583
 
                                                 
Operating income
   
219,197
     
70,195
     
514,111
     
445,865
     
734,268
     
516,051
 
                                                 
Financial income (expenses), net
   
     
     
27,460
     
67,612
     
(13,873
)
   
17,578
 
                                                 
Income before income taxes
   
219,197
     
70,195
     
541,571
     
513,477
     
720,395
     
533,629
 
                                                 
Income taxes
   
61,097
     
20,754
     
112,406
     
93,777
     
173,802
     
114,531
 
                                                 
Net income
   
158,100
     
49,441
     
429,165
     
419,700
     
546,593
     
419,098
 
                                                 
      Net income of Financial Services
 
¥
157,879
   
¥
49,144
   
¥
   
¥
   
¥
   
¥
 
                                                 
      Net income of Sony without Financial Services
 
¥
   
¥
   
¥
425,568
   
¥
418,548
   
¥
   
¥
 
                                                 
      Net income attributable to Sony Group Corporation’s
      stockholders
 
¥
   
¥
   
¥
   
¥
   
¥
542,775
   
¥
417,650
 
                                                 
      Net income attributable to noncontrolling interests
 
¥
221
   
¥
297
   
¥
3,597
   
¥
1,152
   
¥
3,818
   
¥
1,448
 
                                                 
F-18

Condensed Statements of Cash Flows
   
Yen in millions
 
   
Six months ended September 30
 
   
Financial Services
   
Sony without
Financial Services
   
Consolidated
 
   
2022
Restated
   
2023
   
2022
   
2023
   
2022
Restated
   
2023
 
Cash flows from operating activities:
                                   
Income (loss) before income taxes
 
¥
219,197
   
¥
70,195
   
¥
541,571
   
¥
513,477
   
¥
720,395
   
¥
533,629
 
Adjustments to reconcile income (loss) before income
    taxes to net cash provided by (used in) operating
    activities:
                                               
Depreciation and amortization, including
    amortization of contract costs
   
12,918
     
13,905
     
474,695
     
556,561
     
487,613
     
570,466
 
Other operating (income) expense, net
   
(4,834
)
   
249
     
(3,654
)
   
(12,371
)
   
(10,794
)
   
(12,122
)
(Gain) loss on securities, net (other than Financial
    Services segment)
   
     
     
27,994
     
(10,816
)
   
27,994
     
(10,816
)
Changes in assets and liabilities:
                                               
(Increase) decrease in trade receivables and contract
    assets
   
48,507
     
143
     
(190,051
)
   
(246,880
)
   
(140,586
)
   
(253,983
)
(Increase) decrease in inventories
   
     
     
(470,440
)
   
(494,463
)
   
(470,440
)
   
(494,463
)
(Increase) decrease in investments and advances in
    the Financial Services segment
   
(721,544
)
   
(780,169
)
   
-
     
-
     
(721,544
)
   
(780,169
)
(Increase) decrease in content assets
   
-
     
-
     
(303,903
)
   
(264,387
)
   
(303,903
)
   
(264,387
)
Increase (decrease) in trade payables
   
(52,776
)
   
(4,668
)
   
187,974
     
302,093
     
134,301
     
304,499
 
Increase (decrease) in insurance contract liabilities,
    net of insurance contract assets
   
67,622
     
588,156
     
     
     
67,622
     
588,156
 
Increase (decrease) in deposits from customers in the
    banking business
   
141,028
     
284,045
     
     
     
141,028
     
284,045
 
Increase (decrease) in borrowings in the life
    insurance business and the banking business
   
32,962
     
108,667
     
     
     
32,962
     
108,667
 
Increase (decrease) in taxes payable other than
    income taxes, net
   
266
     
893
     
(69,077
)
   
(43,935
)
   
(68,811
)
   
(43,042
)
Other
   
(32,616
)
   
(42,663
)
   
(245,411
)
   
(373,024
)
   
(279,093
)
   
(415,449
)
  Net cash provided by (used in) operating activities
   
(289,270
)
   
238,753
     
(50,302
)
   
(73,745
)
   
(383,256
)
   
115,031
 
                                                 
Cash flows from investing activities:
                                               
Payments for property, plant and equipment and other
    intangible assets
   
(11,869
)
   
(9,518
)
   
(217,302
)
   
(296,566
)
   
(229,105
)
   
(306,074
)
Payments for investments and advances (other than
    Financial Services segment)
   
     
     
(169,582
)
   
(48,891
)
   
(169,582
)
   
(48,891
)
Proceeds from sales or return of investments and
    collections of advances (other than Financial Services
    segment)
   
     
     
8,301
     
76,374
     
8,301
     
76,374
 
Other
   
     
(13
)
   
(251,569
)
   
(56,464
)
   
(249,286
)
   
(56,477
)
  Net cash provided by (used in) investing activities
   
(11,869
)
   
(9,531
)
   
(630,152
)
   
(325,547
)
   
(639,672
)
   
(335,068
)
                                                 
Cash flows from financing activities:
                                               
Increase (decrease) in borrowings, net
   
4,527
     
(5,725
)
   
147,764
     
392,499
     
152,291
     
386,774
 
Dividends paid
   
(41,335
)
   
(50,037
)
   
(43,237
)
   
(49,333
)
   
(43,236
)
   
(49,333
)
Other
   
(1
)
   
258
     
(52,696
)
   
(35,809
)
   
(52,698
)
   
(35,621
)
  Net cash provided by (used in) financing activities
   
(36,809
)
   
(55,504
)
   
51,831
     
307,357
     
56,357
     
301,820
 
                                                 
Effect of exchange rate changes on cash and cash equivalents
   
     
     
126,687
     
63,831
     
126,687
     
63,831
 
                                                 
Net increase (decrease) in cash and cash equivalents
   
(337,948
)
   
173,718
     
(501,936
)
   
(28,104
)
   
(839,884
)
   
145,614
 
Cash and cash equivalents at beginning of the fiscal year
   
889,140
     
756,493
     
1,160,496
     
724,407
     
2,049,636
     
1,480,900
 
Cash and cash equivalents at end of the period
 
¥
551,192
   
¥
930,211
   
¥
658,560
   
¥
696,303
   
¥
1,209,752
   
¥
1,626,514
 


F-19

Going Concern Assumption
  Not Applicable
Accounting Policy and Other Information
(Changes in accounting policies)
  Sony newly adopted the following accounting standards and interpretations from the fiscal year ending March 31, 2024:

IFRS 17 “Insurance Contracts”
  The IASB issued IFRS 17 “Insurance Contracts” (“IFRS 17”) in May 2017 and Amendments to IFRS 17 in June 2020 and December 2021. IFRS 17 replaces IFRS 4 “Insurance Contracts” and sets out principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of IFRS 17. IFRS 17 provides a general model, supplemented by a specific approach for contracts with direct participation features (the variable fee approach), and a simplified approach (the premium allocation approach) mainly for short-duration contracts.
  IFRS 17 was effective for Sony as of April 1, 2023. Sony has retrospectively applied changes in accounting policies resulting from the adoption of IFRS 17 unless it was impracticable. Sony applied the modified retrospective approach, which uses reasonable and supportable information, or the fair value approach, which uses the fair value as of April 1, 2022, the transition date for IFRS 17, to identify, recognize and measure certain groups of insurance contracts as of the transition date for IFRS 17, for which it was impracticable to apply the full retrospective approach. Therefore, Sony has restated the condensed consolidated financial statements for comparative periods and the condensed consolidated statement of financial position as of April 1, 2022 on the basis of the retrospective application of IFRS 17. The effects of the retrospective application of IFRS 17 on Sony’s total equity as of April 1, 2022 are presented in the condensed consolidated statements of changes in stockholders’ equity.
F-20

(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

   
Yen in millions
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
 
Net income attributable to Sony Group Corporation’s stockholders
   
281,681
     
200,105
 
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
               
Zero coupon convertible bonds
   
20
     
 
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS
computation
   
281,701
     
200,105
 
                 
   
Thousands of shares
 
   
Three months ended September 30
 
     
2022
     
2023
 
Weighted-average shares outstanding for basic EPS computation
   
1,236,755
     
1,233,588
 
Effect of dilutive securities:
               
Stock options and other
   
3,618
     
3,635
 
Zero coupon convertible bonds
   
3,132
     
 
Weighted-average shares for diluted EPS computation
   
1,243,505
     
1,237,223
 

   
Yen in millions
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
Net income attributable to Sony Group Corporation’s stockholders
   
542,775
     
417,650
 
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
               
Zero coupon convertible bonds
   
51
     
 
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS
computation
   
542,826
     
417,650
 
                 
   
Thousands of shares
 
   
Six months ended September 30
 
     
2022
     
2023
 
Weighted-average shares outstanding for basic EPS computation
   
1,236,622
     
1,233,915
 
Effect of dilutive securities:
               
Stock options and other
   
3,847
     
3,959
 
Zero coupon convertible bonds
   
4,059
     
 
Weighted-average shares for diluted EPS computation
   
1,244,528
     
1,237,874
 
F-21

(Segmentation)
  The G&NS segment includes the network services businesses, the manufacture and sales of home gaming products and the production and sales of software. The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The ET&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and the internet-related service business. The I&SS segment includes the image sensors business. The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and the banking business in Japan. All Other consists of various operating activities, including the disc manufacturing and recording media businesses. Sony’s products and services are generally unique to a single operating segment.

(Change in presentation)
Condensed Consolidated Statements of Cash Flows
  Certain reclassifications of the condensed consolidated statements of cash flows for the six months ended September 30, 2022 have been made to conform to the presentation for the six months ended September 30, 2023.

 
F-22


Results for Adjusted OIBDA and Adjusted EBITDA for the Three and Six Months Ended September 30, 2023

Sony has established three-year cumulative Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) as the most important financial performance indicator (Group KPI) in the Fourth Mid-Range Plan for the three fiscal years starting on April 1, 2021 and ending on March 31, 2024. Starting in the three months ended June 30, 2023, Sony has disclosed the actual results for Adjusted EBITDA on a consolidated basis, which is the Group KPI, and Adjusted OIBDA (Operating Income Before Depreciation and Amortization) by segment.

The actual results for Segment Adjusted OIBDA and Consolidated Adjusted EBITDA for the three and six months ended September 30, 2023 are as follows:

Adjusted OIBDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that these disclosures may be useful information to investors. Please refer to “Supplemental Information” on pages 5 to 11 for more details, including the formulas and reconciliations for Adjusted OIBDA and Adjusted EBITDA (the same applies below).

Three months ended September 30, 2023
   
(Yen in billions)
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
 
Segment Adjusted OIBDA
 
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
 

Six months ended September 30, 2023
   
(Yen in billions)
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
Segment Adjusted OIBDA
 
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
 

* The differences between Adjusted EBITDA and Adjusted OIBDA on a consolidated basis represent financial income and financial expenses (excluding interest expenses, net, and gains on revaluation of equity instruments, net) (the same applies below). Adjusted EBITDA by segment is not calculated and disclosed because Sony does not include financial income and financial expenses in its performance evaluations by segment, mainly due to the fact that Sony manages its foreign exchange exposure centrally and globally, except for the Financial Services segment.
- 1 -

Outlook for the Fiscal Year Ending March 31, 2024

The forecast for consolidated results for the fiscal year ending March 31, 2024, as announced on August 9, 2023, has been revised as follows:

As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.

   
(Yen in billions)
             
   
March 31, 2023
Results
Restated
   
August
Forecast
   
November
Forecast
   
Change from
August Forecast
 
Sales *1
   
10,974.4
     
12,200
     
12,400
   
+200 bil
     
+1.6
%
Operating income
   
1,302.4
     
1,170
     
1,170
     
-
     
-
 
Income before income taxes
   
1,274.5
     
1,140
     
1,160
   
+20 bil
     
+1.8
%
Net income attributable to Sony Group Corporation’s stockholders
   
1,005.3
     
860
     
880
   
+20 bil
     
+2.3
%
                                         
Adjusted OIBDA
   
1,816.9
     
1,770
     
1,785
   
+15 bil
     
+0.8
%
Adjusted EBITDA
   
1,797.6
     
1,750
     
1,785
   
+35 bil
     
+2.0
%
                                         
For all segments excluding the Financial Services segment *2
 
March 31, 2023
Results
   
August
Forecast
   
November
Forecast
   
Change from
August Forecast
 
Net cash provided by operating activities
   
415.5
     
1,250
     
1,160
   
-90 bil
     
-7.2
%

*1 “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).
*2 Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-16 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates are the following:
 
Assumed foreign exchange rates for the
second half of the fiscal year ending
March 31, 2024
(For your reference)
Assumed foreign exchange rates for the fiscal
year ending March 31, 2024 at the time of the
August forecast
1 U.S. dollar
approximately 142 yen
approximately 135 yen
1 Euro
approximately 152 yen
approximately 146 yen

Sales are expected to be higher than the August forecast mainly due to higher-than-expected sales in the Game & Network Services (“G&NS”), Music and Imaging & Sensing Solutions (“I&SS”) segments, partially offset mainly by lower-than-expected sales in the Financial Services segment.

Operating income is expected to remain unchanged due to expected increases in operating income in the Music and I&SS segments, substantially offset by expected decreases in operating income in the Financial Services and Pictures segments.

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.

Adjusted OIBDA is expected to be higher than the August forecast due to expected increases in Adjusted OIBDA in the Music, I&SS and G&NS segments, partially offset by an expected decrease in Adjusted OIBDA in the Financial Services segment. Adjusted EBITDA is expected to be higher than the August forecast due to the above-mentioned expected increase in financial income, net, and the same factors affecting Adjusted OIBDA.
- 2 -

The forecast for each business segment for the fiscal year ending March 31, 2024 has been revised as follows:

As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.
Please refer to “Supplemental Information” on pages 5 to 11 for details of the reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
March 31, 2023
Results
Restated
   
August
Forecast
   
November
Forecast
 
Game & Network Services (G&NS)
 
Sales
   
3,644.6
     
4,170
     
4,360
 
Operating income
   
250.0
     
270
     
270
 
Adjusted OIBDA
   
337.0
     
375
     
385
 
Music
 
Sales
   
1,380.6
     
1,490
     
1,560
 
Operating income
   
263.1
     
280
     
295
 
Adjusted OIBDA
   
316.4
     
335
     
350
 
Pictures
 
Sales
   
1,369.4
     
1,470
     
1,460
 
Operating income
   
119.3
     
120
     
115
 
Adjusted OIBDA
   
168.2
     
165
     
165
 
Entertainment, Technology & Services (ET&S)
 
Sales
   
2,476.0
     
2,430
     
2,440
 
Operating income
   
179.5
     
180
     
180
 
Adjusted OIBDA
   
276.9
     
280
     
280
 
Imaging & Sensing Solutions (I&SS)
 
Sales
   
1,402.2
     
1,560
     
1,590
 
Operating income
   
212.2
     
180
     
195
 
Adjusted OIBDA
   
408.9
     
425
     
440
 
Financial Services
 
Financial services revenue
   
889.1
     
1,320
     
1,210
 
Operating income
   
318.1
     
180
     
155
 
Adjusted OIBDA
   
322.4
     
205
     
180
 
All Other, Corporate and elimination
 
Operating loss
   
(39.8
)
   
(40
)
   
(40
)
Adjusted OIBDA
   
(12.9
)
   
(15
)
   
(15
)
Consolidated
 
Sales
   
10,974.4
     
12,200
     
12,400
 
Operating income
   
1,302.4
     
1,170
     
1,170
 
Adjusted OIBDA
   
1,816.9
     
1,770
     
1,785
 
Adjusted EBITDA
   
1,797.6
     
1,750
     
1,785
 
- 3 -

Game & Network Services (G&NS)
Sales are expected to be higher than the August forecast primarily due to the impact of foreign exchange rates and an expected increase in sales of non-first-party titles including add-on content. Operating income is expected to remain unchanged from the August forecast mainly due to the impact of the above-mentioned increase in sales of non-first-party titles, substantially offset primarily by the impact of changes in the launch dates of a portion of first-party titles. Adjusted OIBDA is expected to be higher than the August forecast mainly due to the same factors affecting operating income.

Music
Sales are expected to be higher than the August forecast primarily due to the impact of foreign exchange rates as well as higher sales in mobile game applications in Visual Media & Platform and an increase in revenues from streaming services in Music Publishing. Operating income and Adjusted OIBDA are expected to be higher than the August forecast due to the positive impact of foreign exchange rates and the impact of the above-mentioned increase in sales.

Pictures
Sales and operating income are expected to be lower than the August forecast, primarily due to the impact of the strikes in Hollywood, which is expected to lead to lower revenues mainly due to the impact of release date changes for some theatrical releases and restrictions on promotional activities in Motion Pictures and delays in series deliveries in Television Productions, partially offset by the impact of foreign exchange rates. Adjusted OIBDA remains unchanged from the August forecast, mainly due to the same factors affecting operating income.

Entertainment, Technology & Services (ET&S)
Sales are expected to be higher than the August forecast due to the impact of foreign exchange rates, partially offset by a decrease in sales of televisions and smartphones resulting from lower unit sales. The forecasts for operating income and Adjusted OIBDA remain unchanged from the August forecast due to the positive impact of foreign exchange rates, substantially offset by the impact of the above-mentioned decrease in sales of televisions.

Imaging & Sensing Solutions (I&SS)
Sales are expected to be higher than the August forecast mainly due to the impact of foreign exchange rates, partially offset by an expected decrease in sales of image sensors for automotive and for industrial and social infrastructure. Operating income and Adjusted OIBDA are expected to be higher than the August forecast mainly due to the positive impact of foreign exchange rates and cost reductions, partially offset by the impact of the above-mentioned expected decrease in sales.

Financial Services
Financial services revenue is expected to be lower than the August forecast primarily due to a decrease in net gains on investments in both the general account and the separate accounts at Sony Life Insurance Co., Ltd. (“Sony Life”). Operating income and Adjusted OIBDA are expected to be lower than the August forecast primarily due to a deterioration in net gains and losses related to market fluctuations for variable life insurance and other products at Sony Life.

The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future. Accordingly, future market fluctuations could further impact the above forecast.
- 4 -

The above forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances. Actual results may differ materially from those included in this forecast due to a variety of factors. See “Cautionary Statement” below.

Notes about Financial Performance of the Music, Pictures and Financial Services segments
The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.

The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

The Financial Services segment results include Sony Financial Group Inc. (“SFGI”) and SFGI’s consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. The results discussed in the Financial Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.

Supplemental Information

Regarding Adjusted OIBDA and Adjusted EBITDA

Sony believes that Adjusted OIBDA and Adjusted EBITDA are performance metrics suitable for the long-term management that Sony prioritizes. This is because (i) they represent the sustainable earnings power of the business as they do not include the effects of one-time gains and losses, (ii) they enable management to confirm that all the businesses of the Sony Group, including the Financial Services business, are expanding over the mid- to long-term through cycles of investment and return, and (iii) they are often used to calculate corporate value. Adjusted OIBDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that these disclosures may be useful information to investors. Adjusted OIBDA and Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results in accordance with IFRS.

  Adjusted OIBDA (Operating Income Before Depreciation and Amortization) is calculated by the following formula:

Adjusted OIBDA = Operating income + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring

  Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by the following formula:

Adjusted EBITDA = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense - Gain on revaluation of equity instruments, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets - the profit and loss amount that Sony deems non-recurring
- 5 -

The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the three months ended September 30, 2022 and 2023, respectively.

As the results for the three months ended September 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the second quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
 
Game & Network Services (G&NS)
           
Operating income
   
42.1
     
48.9
 
Depreciation and amortization expense*
   
22.0
     
34.2
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
64.2
     
83.1
 
Music
               
Operating income
   
78.7
     
81.0
 
Depreciation and amortization expense*
   
14.5
     
16.0
 
(Profit) / loss amount that Sony deems non-recurring**
   
(5.7
)
   
-
 
Adjusted OIBDA
   
87.5
     
97.0
 
Pictures
               
Operating income
   
27.6
     
29.4
 
Depreciation and amortization expense*
   
12.8
     
13.1
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
40.4
     
42.6
 
Entertainment, Technology & Services (ET&S)
               
Operating income
   
77.8
     
61.0
 
Depreciation and amortization expense*
   
24.8
     
26.5
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
102.6
     
87.6
 
Imaging & Sensing Solutions (I&SS)
               
Operating income
   
74.0
     
46.4
 
Depreciation and amortization expense*
   
48.2
     
60.8
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
122.2
     
107.1
 
Financial Services
               
Operating income
   
80.0
     
15.7
 
Depreciation and amortization expense*
   
6.5
     
7.0
 
(Profit) / loss amount that Sony deems non-recurring**
   
(22.1
)
   
-
 
Adjusted OIBDA
   
64.4
     
22.7
 
All Other, Corporate and elimination
               
Operating loss
   
(10.9
)
   
(19.4
)
Depreciation and amortization expense*
   
6.8
     
5.3
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
(4.1
)
   
(14.1
)
Consolidated
               
Operating income
   
369.4
     
263.0
 
Depreciation and amortization expense*
   
135.5
     
162.9
 
(Profit) / loss amount that Sony deems non-recurring**
   
(27.8
)
   
-
 
Adjusted OIBDA
   
477.1
     
425.9
 
- 6 -

The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the three months ended September 30, 2022 and 2023, respectively.

As the results for the three months ended September 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the second quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Three months ended September 30
 
   
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, recorded in Financial income and Financial expense
   
1.4
     
2.1
 
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
   
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
 

* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the three months ended September 30, 2022 and 2023, respectively.

   
(Yen in billions)
 
   
Three months ended September 30
 
   
2022
Restated
   
2023
 
(Profit) / loss amount that Sony deems non-recurring
           
Impact of litigation settlements, net of expenses, received in relation to lawsuits for Recorded Music and Music Publishing (Music segment)
   
(5.7
)
   
-
 
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the three months ended June 30, 2021 (Financial Services segment)
   
(22.1
)
   
-
 
Total
   
(27.8
)
   
-
 

- 7 -


The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the six months ended September 30, 2022 and 2023, respectively.

As the results for the six months ended September 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the second quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
Game & Network Services (G&NS)
           
Operating income
   
94.9
     
98.1
 
Depreciation and amortization expense*
   
39.5
     
60.9
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
134.4
     
158.9
 
Music
               
Operating income
   
139.7
     
154.4
 
Depreciation and amortization expense*
   
28.3
     
31.6
 
(Profit) / loss amount that Sony deems non-recurring**
   
(5.7
)
   
(6.0
)
Adjusted OIBDA
   
162.3
     
180.0
 
Pictures
               
Operating income
   
78.3
     
45.4
 
Depreciation and amortization expense*
   
23.9
     
25.6
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
102.2
     
71.0
 
Entertainment, Technology & Services (ET&S)
               
Operating income
   
131.4
     
116.7
 
Depreciation and amortization expense*
   
48.1
     
51.8
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
179.5
     
168.4
 
Imaging & Sensing Solutions (I&SS)
               
Operating income
   
95.7
     
59.1
 
Depreciation and amortization expense*
   
93.8
     
118.1
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
189.5
     
177.2
 
Financial Services
               
Operating income
   
219.2
     
70.2
 
Depreciation and amortization expense*
   
12.9
     
13.9
 
(Profit) / loss amount that Sony deems non-recurring**
   
(22.1
)
   
-
 
Adjusted OIBDA
   
210.0
     
84.1
 
All Other, Corporate and elimination
               
Operating loss
   
(24.9
)
   
(27.8
)
Depreciation and amortization expense*
   
13.0
     
10.2
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
     
-
 
Adjusted OIBDA
   
(11.9
)
   
(17.6
)
Consolidated
               
Operating income
   
734.3
     
516.1
 
Depreciation and amortization expense*
   
259.5
     
312.0
 
(Profit) / loss amount that Sony deems non-recurring**
   
(27.8
)
   
(6.0
)
Adjusted OIBDA
   
966.0
     
822.0
 

- 8 -

The following table shows a reconciliation of net income attributable to Sony Group Corporation’s stockholders reported in accordance with IFRS to Adjusted EBITDA for the six months ended September 30, 2022 and 2023, respectively.

As the results for the six months ended September 30, 2022 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the second quarter of the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Six months ended September 30
 
   
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, recorded in Financial income and Financial expense
   
2.2
     
2.6
 
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
   
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
 

* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the six months ended September 30, 2022 and 2023, respectively.

   
(Yen in billions)
 
   
Six months ended September 30
 
   
2022
Restated
   
2023
 
(Profit) / loss amount that Sony deems non-recurring
           
Impact of litigation settlements, net of expenses, received in relation to lawsuits for Recorded Music and Music Publishing (Music segment)
   
(5.7
)
   
-
 
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the three months ended June 30, 2021 (Financial Services segment)
   
(22.1
)
   
-
 
Remeasurement gain resulting from the consolidation of a company previously accounted for using the equity method (Music segment)
   
-
     
(6.0
)
Total
   
(27.8
)
   
(6.0
)

- 9 -

The following table shows a reconciliation of Adjusted OIBDA from operating income in accordance with IFRS for the fiscal year ended March 31, 2023.

As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Fiscal year ended
March 31, 2023
 
   
Restated
 
Game & Network Services (G&NS)
     
Operating income
   
250.0
 
Depreciation and amortization expense*
   
87.0
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
 
Adjusted OIBDA
   
337.0
 
Music
       
Operating income
   
263.1
 
Depreciation and amortization expense*
   
59.0
 
(Profit) / loss amount that Sony deems non-recurring**
   
(5.7
)
Adjusted OIBDA
   
316.4
 
Pictures
       
Operating income
   
119.3
 
Depreciation and amortization expense*
   
48.9
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
 
Adjusted OIBDA
   
168.2
 
Entertainment, Technology & Services (ET&S)
       
Operating income
   
179.5
 
Depreciation and amortization expense*
   
97.4
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
 
Adjusted OIBDA
   
276.9
 
Imaging & Sensing Solutions (I&SS)
       
Operating income
   
212.2
 
Depreciation and amortization expense*
   
196.7
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
 
Adjusted OIBDA
   
408.9
 
Financial Services
       
Operating income
   
318.1
 
Depreciation and amortization expense*
   
26.3
 
(Profit) / loss amount that Sony deems non-recurring**
   
(22.1
)
Adjusted OIBDA
   
322.4
 
All Other, Corporate and elimination
       
Operating loss
   
(39.8
)
Depreciation and amortization expense*
   
26.8
 
(Profit) / loss amount that Sony deems non-recurring**
   
-
 
Adjusted OIBDA
   
(12.9
)
Consolidated
       
Operating income
   
1,302.4
 
Depreciation and amortization expense*
   
542.2
 
(Profit) / loss amount that Sony deems non-recurring**
   
(27.8
)
Adjusted OIBDA
   
1,816.9
 

- 10 -

The following table shows a reconciliation of Adjusted EBITDA from net income attributable to Sony Group Corporation’s stockholders in accordance with IFRS for the fiscal year ended March 31, 2023.

As the results for the fiscal year ended March 31, 2023 are restated in accordance with IFRS 17, they differ from those disclosed in the earnings release for the fiscal year ended March 31, 2023.

   
(Yen in billions)
 
   
Fiscal year ended
March 31, 2023
 
   
Restated
 
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, recorded in Financial income and Financial expense
   
4.0
 
(Gain) / loss on revaluation of equity instruments, net, recorded in Financial income and Financial expense
   
4.6
 
Depreciation and amortization expense*
   
542.2
 
(Profit) / loss amount that Sony deems non-recurring**
   
(27.8
)
Adjusted EBITDA
   
1,797.6
 

* Depreciation and amortization expense excludes amortization for film costs and broadcasting rights, as well as for internally developed game content and master recordings included in Content assets.
** The following table shows the details of the profit and loss amount that Sony deems non-recurring in calculating Adjusted OIBDA and Adjusted EBITDA for the fiscal year ended March 2023.

   
(Yen in billions)
 
   
Fiscal year ended
March 31, 2023
 
   
Restated
 
(Profit) / loss amount that Sony deems non-recurring
     
Impact of litigation settlements, net of expenses, received in relation to lawsuits for Recorded Music and Music Publishing (Music segment)
   
(5.7
)
Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life which occurred in the three months ended June 30, 2021 (Financial Services segment)
   
(22.1
)
Total
   
(27.8
)

- 11 -

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:
(i)
Sony’s ability to maintain product quality and customer satisfaction with its products and services;
(ii)
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;
(iii)
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;
(iv)
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;
(v)
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;
(vi)
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;
(vii)
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;
(viii)
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;
(ix)
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;
(x)
Sony’s ability to forecast demands, manage timely procurement and control inventories;
(xi)
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;
(xii)
Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;
(xiii)
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;
(xiv)
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;
(xv)
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;
(xvi)
risks related to catastrophic disasters, geopolitical conflicts, pandemic disease or similar events;
(xvii)
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
(xviii)
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 developments relating to the situations in Ukraine and Russia and in Israel and Palestine could heighten many of the risks and uncertainties 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.



- 12 -

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