TOKYO--(BUSINESS WIRE)--
Sony Corporation
1-7-1 Konan, Minato-ku
Tokyo
News & Information
No.13-065E
May 22, 2013
Sony Corporate Strategy Meeting FY2013
Implementation of Consistent Corporate Strategy and Acceleration of Transformation Initiatives to Enhance Overall Sony Group’s Corporate Value
Tokyo, May 22, 2013 – Sony Corporation (“Sony” or “the Company”) has been accelerating initiatives to revitalize and grow its electronics business based on the corporate strategy announced on April 12, 2012, while further growing the Entertainment and Financial Services businesses that have been contributing stable profit, in order to enhance the entire Sony Group’s ability to heighten corporate value.
Following the appointment of the current management team in April 2012, the Company implemented a series of measures focused on rapidly transforming Sony. Achievements resulting from these measures during the fiscal year ending March 31, 2013 (“FY12”) include the following:
Sony Group Key Achievements in FY12
- Continued growth of sales and profit in the Entertainment and Financial Services businesses
- Strategic investment and foundation-building for new business creation and strengthening core electronics businesses
- Enhancement of financial foundations and management structure through business portfolio realignment, asset sales and structural reform
- Significant improvement in TV business on path to profitability
- Reinforced Sony’s sales and marketing operations in emerging markets
- High value-added products developed and launched in core electronics businesses
As a result of these achievements, the Company was able to accomplish its target set at the beginning of FY12 of returning net income attributable to Sony’s stockholders to profit. The target of returning the electronics business to profit remains an ongoing challenge that Sony will continue to address in the fiscal year ended March 31, 2014 (“FY13”).
In FY13, within the electronics business, Sony is continuing to implement the five key initiatives announced in April 2012, and taking into account changes in the business environment, is updating its strategies for the three core electronics businesses. In the entertainment and financial services businesses, Sony will seek to further strengthen profitability. In addition, the Company is continuing to strengthen the overall financial foundations of the Sony Group.
Sony Group FY13 Key Strategies
1. Reinforce the Electronics Business
- Accelerate execution of updated strategies in the three core businesses (Mobile, Imaging and Game)
- Return the TV business to profitability
- Accelerate the execution of growth strategies in emerging markets that leverage the overall strength of the Sony Group
- Reinforce new businesses (such as Medical and Security) to deliver sustained growth
- Further realign Sony’s business portfolio
2. Further strengthen profitability in the Entertainment and Financial Services businesses
3. Continue to reinforce Sony’s financial foundations
Specific measures to accelerate the execution of updated strategies in the three core electronics businesses and the TV business’ return to profit are as follows.
Mobile Business
In the smartphone and tablet businesses, where
continued market growth is anticipated, Sony will aim to achieve further
business growth while also enhancing profitability. The Company also
intends to accelerate the speed with which it develops and rapidly
delivers compelling products to customers that incorporate the best of
Sony’s technologies, and to further elevate the mobile “Watch,” “Listen”
and “Create” experiences. The Company also aims to execute the timely
launch of new and highly competitive products that build on the success
of XperiaTM Z, which has been enthusiastically received
across markets worldwide. By further strengthening relations with major
operators globally and expanding sales channels, Sony is seeking to
secure a leading position in each of its focus markets around the globe.
As a result of these measures, Sony aims to achieve sales of 1.5
trillion yen and operating income margin of 4% in its mobile business,
comprising smartphones and tablets, by the fiscal year ending March 31,
2015 (“FY14”). Regarding PCs, in view of the changes the market and
business environment have undergone in the past year, the Company is
implementing a strategic realignment that initially prioritizes
profitability improvement over sales expansion with the aim of returning
the business to profit in FY13.
Imaging Businesses
Placing image sensors, a particularly strong
category for Sony, at its core, Sony is concentrating the focus of its
imaging businesses on creating value-added products, while aggressively
exploring new applications for its imaging technologies in both the
consumer and professional markets. In terms of image sensors, the
Company will continue to commercialize new sensor technologies capable
of differentiating finished products, for use in a range of consumer and
professional applications. The Company also plans to engage in
aggressive capital investment in order to meet the robust demand for
these components. At the same time, Sony is also developing technologies
that further expand the range of sensor applications, including sensors
capable of sensing beyond the visible light spectrum, and sensors
capable of detecting and categorizing different types of information.
For the professional market, Sony will continue to reinforce its
professional camera lineup centering on 4K-compatible cameras, as well
as cameras for cinematography. The Company will also target further
business growth by extending the scope of its digital imaging
technologies to new business areas such as security, sports and medical,
and will reallocate resources accordingly. In the consumer market, where
business conditions continue to shift rapidly, Sony aims to expand sales
of value-added compact digital still cameras by introducing models that
leverage Sony’s image sensor technologies to further enhance image
quality, and also incorporate feature enhancements such as reduced size
and weight, and higher-powered zoom. Sony will also seek to firmly
maintain its number one global market share in the growing mirrorless
lens camera category. Through these measures, Sony will target sales of
1.3 trillion yen and an operating profit margin of more than 10% across
the image sensor, professional, and consumer categories by FY14.
Game Business
“PlayStation 3” continues to deliver stable hardware
and software sales, and Sony will continue to reinforce the business’
position as a stable source of profit. In particular, the Company will
seek to grow sales of content and services through PlayStation Store and
contribute to profit. For “PlayStation Vita” (“PS Vita”), the Company
will aim to secure further sales and profit through various hardware
sales initiatives and the introduction of compelling software titles.
The next generation platform, “PlayStation 4” (“PS4”) will launch this
year-end holiday season. PS4 will deliver a quality gaming experience
only possible through a dedicated gaming system, and will also enable
smartphone and tablet users to share in the enjoyment of PS4, even
without owning one themselves. Furthermore, customers who own both PS4
and PS Vita will be able to experience new services and game
entertainment. Sales of digital downloads are increasing rapidly as the
delivery of game content transitions from disc media to sales over the
network. The Company is also working towards streaming PlayStation games
by leveraging the cloud technologies of Gaikai Inc., acquired last year.
This would enable the PlayStation experience to be enjoyed across a wide
range of products, providing significant opportunities for further
business expansion. As a result of these measures, Sony will target
sales of 1 trillion yen and operating income margin of 2% in the game
business in FY14. Going forward, Sony aims to significantly expand its
business model around PS4, to transition the business to further growth
in the fiscal year ending March 31, 2016 (“FY15”) and beyond.
The mobile, imaging and game businesses will continue to be the core businesses that drive Sony’s electronics business growth. Sony is projecting that approximately 65% of total sales and approximately 80% of operating income for the entire electronics business will be generated by these three businesses by FY14.
TV Business
Within the TV business, Sony is continuing to enhance
product strength in order to increase sales and product value. By
incorporating unique, Sony-developed features such as the “X-Reality
PRO” image processing engine and “Triluminos Display” wide color
displays, Sony will continue to enhance the image and audio quality of
its Full HD TV models, while also expanding its 4K LCD TV lineup. In
addition, in emerging markets where continued growth is expected, Sony
will launch models tailored to meet local needs in order to increase
sales volumes, while also continuing to reduce fixed and operational
costs in order to return the business to profit in FY13.
Sony will execute the initiatives outlined above, together with its existing strategy of expanding business in emerging markets, creating new businesses and accelerating innovation, as well as realigning the business portfolio.
In the Entertainment businesses, the Pictures segment is aiming to focus on the production of motion picture titles with high profit potential, including globally popular franchises, and will seek to further develop its television production and television network businesses, which are areas where continued growth is anticipated, as stable sources of profit. In the television network business, the Company will target further business expansion in rapidly growing markets such as India. In the Music segment, the Company aims to increase market share by unearthing and nurturing exciting new talent, and also exploring various growth opportunities such as leveraging its music content for use across increasingly popular online music service platforms, in order to achieve further business growth. In the music publishing business, which manages music publishing rights, Sony/ATV Music Publishing LLC began administering EMI Music Publishing’s world-class global music catalog, starting in June of 2012. The Company plans to solidify its position as the top player in the industry through efficient management and strong creative decisions.
The Financial Services business will continue striving to deliver highly dependable services in order to maintain its high customer satisfaction ratings, and by doing so will seek to achieve steady profit growth.
As a result of these measures, by FY14 Sony aims to achieve the financial targets announced on April 12, 2012, which are sales of 8.5 trillion yen, operating income margin of more than 5%, and return on equity ("ROE") of 10% for the Sony Group overall, and sales of 6 trillion yen and operating income margin of 5% in its electronics business.
Sony will continue to implement rapid decision-making processes based on a unified “One Sony” approach that encompasses its electronics, entertainment and financial services businesses, so that it can continue to provide a range of products, services and content that inspires and fulfills curiosity, and delivers exciting experiences to customers around the world.
<For reference> Overview of Sony Corporate Strategy announced on April
12, 2012
By implementing a rapid decision-making approach that draws on the strengths of the entire Sony Group as "One Sony", Sony aims to revitalize and grow the electronics business to generate new value, while further growing the Entertainment and Financial Services businesses that have been contributing stable profit.
Key initiatives to transform the electronics business:
1. Strengthening core businesses (Digital Imaging, Game, Mobile)
2. Turning around the television business
3. Expanding business in emerging markets
4. Creating new businesses and accelerating innovation
5. Realigning the business portfolio and optimizing resources
FY14 Financial Targets
- Sony Group overall: Sales of 8.5 trillion yen, operating income margin of more than 5%, and ROE of 10%
- Electronics business: Sales of 6 trillion yen and operating income margin of 5%
- Digital Imaging business (consumer, professional and image sensors): Sales of 1.5 trillion yen and double-digit operating income margin
- Game business: Sales of one trillion yen and operating income margin of 8%
- Mobile business (smartphones, tablets and PCs): Sales of 1.8 trillion yen and significant profitability improvement
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 you 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 you should
not place undue reliance on them. You 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) the global economic
environment in which Sony operates and the economic conditions in Sony’s
markets, particularly levels of consumer spending; (ii) 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 and liabilities are
denominated; (iii) 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 televisions, game platforms, and
smart phones, 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 consumer preferences; (iv) Sony’s ability and timing to
recoup large-scale investments required for technology development and
production capacity; (v) Sony’s ability to implement successful business
restructuring and transformation efforts under changing market
conditions; (vi) Sony’s ability to implement successful hardware,
software, and content integration strategies for all segments excluding
the Financial Services segment, and to develop and implement successful
sales and distribution strategies in light of the Internet and other
technological developments; (vii) Sony’s continued ability to devote
sufficient resources to research and development and, with respect to
capital expenditures, to prioritize investments correctly (particularly
in the electronics businesses); (viii) Sony’s ability to maintain
product quality; (ix) the effectiveness of Sony’s strategies and their
execution, including but not limited to the success of Sony's
acquisitions, joint ventures and other strategic investments; (x) Sony’s
ability to forecast demands, manage timely procurement and control
inventories; (xi) the outcome of pending and/or future legal and/or
regulatory proceedings; (xii) 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; (xiii)the
impact of 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; and
(xiv) risks related to catastrophic disasters or similar events. Risks
and uncertainties also include the impact of any future events with
material adverse impact.