Summary
Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. The company distributes software titles and add-on content through digital networks; network services related to game, video, and music content; and home and portable game consoles, packaged software, and peripheral devices. It also develops, produces, markets, and distributes recorded music; publishes music; and produces and distributes animation titles, game applications, and various services for music and visual products. In addition, the company produces, acquires, and distributes live-action and animated motion pictures for theatrical release, as well as scripted and animated series, unscripted reality or light entertainment, daytime serials, game shows, television movies, and miniseries and other television programs; operates a visual effects and animation unit; manages a studio facility; and operates television and digital networks, and post-production facilities. Further, it researches, develops, designs, produces, markets, distributes, sells, and services televisions, and video and sound products; interchangeable lens, compact digital, and consumer and professional video cameras; projectors and medical equipment; mobile phones, tablets, accessories, and applications; and metal oxide semiconductor image sensors, charge-coupled devices, integration systems, and other semiconductors. Additionally, it offers Internet broadband network services; recording media, and storage media products; and life and non-life insurance, banking, and other services, as well as creates and distributes content for PCs and mobile phones. The company was formerly known as Sony Corporation and changed its name to Sony Group Corporation in April 2021. Sony Group Corporation was incorporated in 1946 and is headquartered in Tokyo, Japan.
Macro Analysis
Industry overview
Competitor comparison
Company overview
Financials
| Year end date | 3/30/2020 | 3/30/2021 | 3/30/2022 | 3/30/2023 |
|---|---|---|---|---|
| All numbers in thousands of JPY. (¥'000) | ||||
| Revenue | 8,259,885,000 | 8,999,360,000 | 9,921,513,000 | 11,539,837,000 |
| Cost of Revenue | 5,925,049,000 | 6,561,559,000 | 7,219,841,000 | 8,398,931,000 |
| Gross Profit | 2,334,836,000 | 2,437,801,000 | 2,701,672,000 | 3,140,906,000 |
| Operating Expenses: | 1,502,625,000 | 1,469,955,000 | 1,522,979,000 | 1,957,149,000 |
| General & Administrative Expense | 1,502,625,000 | 1,469,955,000 | 1,588,473,000 | 1,969,170,000 |
| Other Operating Expenses | -3,611,000 | - | -65,494,000 | -12,021,000 |
| Operating Income | 832,211,000 | 967,846,000 | 1,178,693,000 | 1,183,757,000 |
| Interest Income | 19,278,000 | 10,457,000 | 19,304,000 | 31,058,000 |
| Interest Expense | 11,090,000 | 12,185,000 | 104,140,000 | 58,951,000 |
| Pretax Income | 799,450,000 | 1,192,370,000 | 1,117,503,000 | 1,180,313,000 |
| Income Tax | 177,190,000 | 995,000 | 229,097,000 | 236,691,000 |
| Net Income | 582,191,000 | 1,171,776,000 | 882,178,000 | 937,126,000 |
| Year end date | 3/30/2020 | 3/30/2021 | 3/30/2022 | 3/30/2023 |
|---|---|---|---|---|
| All numbers in thousands of JPY. (¥'000) | ||||
| Assets: | ||||
| Total Assets | 23,039,343,000 | 26,354,840,000 | 30,480,967,000 | 32,041,222,000 |
| Current Assets: | ||||
| Cash And Cash Equivalents | 1,512,357,000 | 1,786,982,000 | 2,049,636,000 | 1,480,900,000 |
| Other Short Term Investments | 1,847,772,000 | 2,902,438,000 | 509,974,000 | 439,307,000 |
| Receivables | 1,191,026,000 | 1,353,393,000 | 1,628,521,000 | 1,777,939,000 |
| Inventory | 589,969,000 | 637,391,000 | 874,007,000 | 1,468,042,000 |
| Prepaid Assets | 594,021,000 | 538,540,000 | - | - |
| Other Current Assets | - | - | 473,070,000 | 610,330,000 |
| Total Current Assets | 5,735,145,000 | 7,218,744,000 | 5,535,208,000 | 5,776,518,000 |
| Non-Current Assets: | ||||
| Net PPE | 1,301,254,000 | 1,362,528,000 | 1,526,643,000 | 1,822,927,000 |
| Goodwill | 783,888,000 | 827,149,000 | 952,895,000 | 1,275,112,000 |
| Other Intangible Assets | 906,310,000 | 996,305,000 | 450,103,000 | 563,842,000 |
| Other Non Current Assets | 767,341,000 | 821,229,000 | 1,631,096,000 | 1,883,828,000 |
| Total Non-Current Assets | 17,304,198,000 | 19,136,096,000 | 24,945,759,000 | 26,264,704,000 |
| Liabilities: | ||||
| Total Liabilities | 18,242,041,000 | 20,725,185,000 | 23,283,718,000 | 24,752,900,000 |
| Current Liabilities: | ||||
| Payables | 2,157,003,000 | 2,521,808,000 | 1,949,334,000 | 2,018,693,000 |
| Current Debt | 839,983,000 | 1,319,567,000 | 2,147,962,000 | 2,102,876,000 |
| Current Deferred Revenue | 2,440,783,000 | 2,773,885,000 | 2,886,361,000 | 3,163,237,000 |
| Other Current Liabilities | 733,732,000 | 1,126,802,000 | 1,776,493,000 | 2,024,130,000 |
| Total Current Liabilities | 6,240,443,000 | 7,815,424,000 | 8,760,150,000 | 9,308,936,000 |
| Non-Current Liabilities: | ||||
| Long Term Debt | 634,966,000 | 773,294,000 | 1,203,646,000 | 1,767,696,000 |
| Long Term Capital Lease Obligation | 314,836,000 | 290,259,000 | 220,113,000 | 192,952,000 |
| Non Current Deferred Liabilities | 549,538,000 | 366,761,000 | 696,492,000 | 356,324,000 |
| Employee Benefits | 324,655,000 | 254,103,000 | 254,548,000 | 236,121,000 |
| Other Non-Current Liabilities | 10,177,603,000 | 11,225,344,000 | 12,368,882,000 | 12,890,871,000 |
| Total Non-Current Liabilities | 12,001,598,000 | 12,909,761,000 | 14,523,568,000 | 15,443,964,000 |
| Equity: | ||||
| Common Stock | 880,214,000 | 880,214,000 | 880,365,000 | 880,365,000 |
| Additional Paid in Capital | 1,289,719,000 | 1,486,721,000 | 1,461,053,000 | 1,463,807,000 |
| Retained Earnings | 2,768,856,000 | 3,857,152,000 | 3,760,763,000 | 4,614,637,000 |
| Treasury Stock | 232,503,000 | 124,228,000 | 180,042,000 | 223,507,000 |
| Minority Interest | 671,996,000 | 53,816,000 | 52,778,000 | 58,613,000 |
| Total Equity | 4,797,302,000 | 5,629,655,000 | 7,197,249,000 | 7,288,322,000 |
| Year end date | 3/30/2020 | 3/30/2021 | 3/30/2022 | 3/30/2023 |
|---|---|---|---|---|
| All numbers in thousands of JPY. (¥'000) | ||||
| Operating Cash Flow | ||||
| Net Income from Operating Activities | 622,260,000 | 1,191,375,000 | 1,117,503,000 | 1,180,313,000 |
| Operating Gains/Losses | 96,922,000 | -526,205,000 | 46,468,000 | -13,227,000 |
| Depreciation & Amortisation | 746,451,000 | 663,737,000 | 835,233,000 | 1,004,590,000 |
| Deferred Income Tax | 4,799,000 | -153,427,000 | - | 4,183,000 |
| Other Non-Cash Items | 16,329,000 | -102,215,000 | 695,571,000 | 608,009,000 |
| Change in Working Capital | -157,193,000 | 523,918,000 | -1,191,247,000 | -2,167,113,000 |
| Net Cash Flows from Operating Activities | 1,349,745,000 | 1,350,150,000 | 1,233,643,000 | 314,691,000 |
| Investing Cash Flow | ||||
| Purchase of Property, Plant and Equipment | -439,761,000 | -512,239,000 | -441,096,000 | -613,635,000 |
| Sale of Property, Plant and Equipment | 18,758,000 | 15,823,000 | 11,409,000 | 11,595,000 |
| Purchase of Business | 0 | 0 | -277,618,000 | -283,402,000 |
| Sale of Business | 93,173,000 | 3,151,000 | 64,609,000 | 1,221,000 |
| Purchase of Investment | -1,367,915,000 | -1,734,160,000 | -91,082,000 | -191,129,000 |
| Sale of Investment | 358,196,000 | 469,390,000 | 16,081,000 | 13,548,000 |
| Other Investing Charges | -14,729,000 | -23,481,000 | -11,083,000 | 9,138,000 |
| Net Cash Flows from Investing Activities | -1,352,278,000 | -1,781,516,000 | -728,780,000 | -1,052,664,000 |
| Financing Cash Flow | ||||
| Net Long Term Debt Issuance | -79,608,000 | 308,723,000 | -163,104,000 | 229,578,000 |
| Net Short Term Debt Issuance | 193,332,000 | 355,536,000 | 408,000 | 32,391,000 |
| Common Stock Payments | -200,211,000 | -366,000 | -88,624,000 | -99,248,000 |
| Dividend Payments | -49,574,000 | -61,288,000 | -74,342,000 | -86,568,000 |
| Net Other Financing Charges | 201,719,000 | 64,362,000 | -10,916,000 | 8,147,000 |
| Net Cash Flows from Financing Activities | 65,658,000 | 666,967,000 | -336,578,000 | 84,300,000 |
| Other | ||||
| Beginning Cash Position | 1,473,813,000 | 1,515,295,000 | 1,786,982,000 | 2,049,636,000 |
| Changes in Cash | 63,125,000 | 235,601,000 | 168,285,000 | -653,673,000 |
| Effect of Exchange Rate Changes | -21,643,000 | 36,668,000 | 94,369,000 | 84,937,000 |
| End Cash Position | 1,512,357,000 | 1,786,982,000 | 2,049,636,000 | 1,480,900,000 |
| Capital Expenditure | -439,761,000 | -512,239,000 | -441,096,000 | -613,635,000 |
| Issuance of Debt | 118,447,000 | 1,158,893,000 | 31,866,000 | 394,167,000 |
| Repayment of Debt | -198,055,000 | -494,634,000 | -194,562,000 | -132,198,000 |
| Repurchase of Capital Stock | -200,211,000 | -366,000 | -88,624,000 | -99,248,000 |
| Free Cash Flow | 909,984,000 | 837,911,000 | 792,547,000 | -298,944,000 |
| Year end date | 3/30/2020 | 3/30/2021 | 3/30/2022 | 3/30/2023 |
|---|---|---|---|---|
Valuation
Technical Analysis
Catalysts
Risk
Introduction
Sony Group Corporation is a world leader in consumer electronics, the company has been a well-established presence in the global market for decades and has built a diverse business portfolio engaging in six major business segments (Games & Network Services, Music, Pictures, Entertainment Technology & Services, Imaging & Sensing Solutions and Financial Services).
As with any investment, it is crucial to recognise the inherent risks associated with investing in the stock market. This section aims to provide an analysis of the potential risks that may impact the company's performance, and should be considered when making a decision to invest.
R&D Investment Risks
Sony continuously strives to remain competitive through its technological innovations, and the company invests heavily in research and development. These investments however, hold a risk to the company if R&D is unsuccessful in producing the results needed to meet ever-changing consumer demands and match competitors who may offer better prices. This may impact Sony's ability to produce new and competitive products and services in a timely manner.
In the Gaming & Network Services segment, gaming platforms including streaming have been a significant factor driving sales and profitability, and this success is affected by the ability to provide customers with attractive software line-ups and online services. However, there is no assurance that third-party software developers and publishers, will continue to develop and release software.
Foreign Exchange Rate Fluctuations
Sony's operations and financial state may be affected by any fluctuations in foreign exchange rates due to the company's global sales. Sony’s electronics businesses, research and development and headquarters overhead costs are incurred mainly in Yen. Manufacturing and material costs are incurred mainly in USD and Yen. Thus if the Yen’s value weakens against USD, operation costs will become more expensive and affect Sony's long term stability.
The majority of sales are recorded in Yen, USD, Euros, Chinese Yuan. If the Yen strengthens significantly against these foreign currencies it may have an adverse impact on Sony's equity capital, as the incomes from all of its subsidiaries are prepared by translating the local currency of the operating country into Yen.