Results for the Three Months ended June 30, 2020
Sales decreased 11.0 billion yen, a 6% decrease year-on-year (an approximate 4% decrease on a U.S. dollar basis), to 175.1 billion yen. The decrease in sales on a U.S. dollar basis was due to lower sales for Motion Pictures and Media Networks,
partially offset by higher sales for Television Productions. The decrease in sales for Motion Pictures was primarily due to the absence of theatrical releases in the current quarter due to the impact of theater closures as a result of COVID-19. The lower sales for Media Networks were primarily due to lower advertising revenues due to the impact of COVID-19. The higher sales for Television Productions were
primarily due to higher licensing revenues for U.S. television catalog product and the series The Boys. Operating income increased 24.4 billion yen
year-on-year to 24.7 billion yen. The significant increase in operating income was primarily due to lower marketing costs in Motion Pictures from the absence of
theatrical releases caused by COVID-19, partially offset by the above-mentioned lower sales.
Current View Regarding the Impact on the Business from the Spread of COVID-19
Although some movie theaters are reopening around the world, a large number are still closed or must limit
the number of patrons, leading to box office revenue around the world being impacted. For this reason, Sony generally has not been able to release its already completed films in theaters. Due to restrictions on peoples movement, the production
schedules of new motion pictures and television shows by Sony are significantly delayed around the world, especially in the U.S. As a result, in Motion Pictures, theatrical revenues and revenues generated after theatrical release, including home
entertainment and television licensing sales, are expected to decrease. On the other hand, digital rental and sell-through revenues for films which Sony released theatrically prior to the spread of COVID-19
have been strong. In Television Productions, revenues are beginning to be impacted by delays in the delivery of shows to TV networks and digital distribution services. Due to a global reduction in advertising spending, advertising revenue in Media
Networks is decreasing significantly, especially in India.
Electronics Products & Solutions (EP&S)
Results for the Three Months ended June 30, 2020
Sales decreased 152.1 billion yen
year-on-year to 331.8 billion yen. This significant decrease in sales was mainly due to a decrease in unit sales of digital cameras, televisions and Audio and
Video, resulting primarily from the impact of COVID-19. An operating loss of 9.1 billion yen was recorded, compared to operating income of 25.1 billion yen recorded in the same quarter of the
previous fiscal year, primarily due to the above-mentioned impact of the decrease in sales, partially offset by reductions in operating costs in each of the businesses.
Current View Regarding the Impact on the Business from the Spread of COVID-19
The four major in-house and outsourcing manufacturing sites for
Sonys TV business, as well as the factories owned by Sony in China and Thailand that make digital cameras and smartphones, are currently operating as usual. Retail sales have decreased significantly due to the closure of retail stores
globally, the impact of which is continuing to affect markets like Asia and Latin America. Conversely, in Japan, Europe, North America and China, retail stores are gradually reopening. In addition, although sales and profit from digital cameras were
significantly impacted by a substantial slowdown in demand around the world, this business is beginning to show signs of recovery, albeit at a relatively slower pace compared to other product categories.
Imaging & Sensing Solutions (I&SS)
Results for the Three Months ended June 30, 2020
Sales decreased 24.5 billion yen
year-on-year to 206.2 billion yen. This significant decrease in sales was mainly due to a decrease in sales of image sensors resulting from decreases in unit sales
for digital cameras and for mobile products, as well as a significant decrease in sales in businesses other than image sensors, such as analog LSIs (large-scale integration systems) and display devices. These negative factors were primarily a result
of the impact of COVID-19. Operating income decreased 24.1 billion yen year-on-year to 25.4 billion yen. This
significant decrease was mainly due to an increase in depreciation and amortization expenses as well as research and development expenses and the impact of the above-mentioned decrease in sales.
Current View Regarding the Impact on the Business from the Spread of COVID-19
There has been no major impact on Sonys manufacturing plants in Japan, which are operating as usual.
Sony also understands that factory operations and supply chains at most of its major mobile customers, to whom it sells its image sensors, have been recovering. On the other hand, image sensor sales are decreasing primarily due to a slowdown in the
smartphone market, which is the final outlet for Sonys products, and a change in the overall composition of sales in that market resulting from a shift from high-end to
mid-range and moderately priced models.
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