Q1 2022 Sony Corp Earnings Presentation
And.
And my name.
Is ocado all in charge of corporate communications I shall be serving.
C N C. Today.
No this session.
Is being held for a generalist analyst and institutional investors to whom we have sent out invitations in advance and this is being live webcast through our Investor Relations website. Today first we have a yorkie jokey executive Deputy President and CFO to present to you.
And the 'twenty fiscal 2021 consolidated results and also the consolidated results forecast for fiscal 'twenty 'twenty..1 and then we will have a Q&A session. The duration is about 17 minutes and Mississippi Oki. Please.
Thank you very much and I'd like to talk about these 2 topics today.
We have changed our accounting standards to I F. EIS from the current fiscal year. So the results for the current quarter.
Our forecast for the current fiscal year and the results for the previous fiscal year, which I will explain today are all based on I S. R. S.
Fiscal 'twenty, 1 first quarter consolidated sales increased 15% compared to the same quarter of the previous fiscal year, 222, and $256.8 billion and consolidated operating income increased a significant $58.3 billion yen year on year to $280.1 billion both record highs.
And for the first quarter.
Income before income taxes increased $14.6 billion yen year on year to $283.2 billion and.
And net income attributable to Sony Group Corporation shareholders increased $18.2 billion to $211.8 billion yen.
This slide shows the results by segment for the fiscal 'twenty, 1 first quarter next I wish all of the consolidated results forecast for fiscal 'twenty..1 all consolidated sales forecast remains unchanged from the previous forecast.
Our operating income forecast has increased 50 billion yen from our previous forecast to 980 billion yen, primarily reflecting the results of fiscal 'twenty..1 first quarter. You have also upwardly revised our forecast for income before income taxes, 2.955 billion yen.
And our forecast for net income attributable to Sony group progression shareholders to several hundred billion yen forecast for consolidated operating cash flow. Excluding the financial services segment has decreased 20 billion from the previous forecast to 890 billion yen, although forecasted to operating cash flow will benefit from that for a revision in the fall.
Cash flow profit.
We project an increase in acquisition of content assets, such as music catalogs, which are included in operating cash flow under Ifr S. This slide shows our forecast by segment for fiscal 'twenty 1.
And now explained the situation and each of our business segments.
Chris is a game and network services segment.
Fiscal 'twenty, 1 first quarter sales increased 2% year on year to $615.8 billion yen, primarily due to an increase and our hardware sales and resulting from the launch of Playstation 5 and impact of foreign exchange rates, partially offset by lower software sales all.
Operating income decreased a significant 46 billion year on year to $83.3 billion, primarily due to the impact of the decrease and software sales, a deterioration and hardware profit and an increase and selling general and administrative expenses.
Our fiscal 'twenty, 1 and forecast remaining remains unchanged from the previous forecast.
And there's no change to this fiscal year's target of selling more than 14.8 million units of Playstation 5 which was a number of units we sold of Playstation 4 and the fiscal year after its launch.
Yeah.
Fiscal 'twenty, 1 and first quarter software and network services revenue decreased 15% compared to the same quarter of the previous fiscal year when stay at home demand was high around the world primarily due to a decrease and software add on revenue from third party titles.
And with less software sales increased 38% compared to the same quarter of the fiscal year ended March 31, 2020 that is fiscal 2019.
Which it must before the COVID-19 pandemic and we believe that the game market has expanded significantly over the last 2 years. Similarly, total grain and game play time of Playstation users and fiscal 'twenty, 1 and first quarter decreased to 32% year on year, but increased 18% compared to the same quarter all fiscal 2019.
Showing continued steady growth.
Sales of first party software decreased compared to the same quarter of the previous fiscal year. When the last of US part 2 was a big hit but sales of all the table. So it and we have released during the quarter, including Ratchet and Clank apart and MLB the show 21.
We exceeded our expectations.
Thanks in part to a store.
Add on sales and it'll be the show 21 and contributed significantly to sales and profit during the quarter. We have begun to release, our first party titles on platforms other than Playstation and and that'll be the show 21 was 1 such title, which followed upon initial success, we had with a P. C versions.
Of Horizons, there, Don and days and gone.
Playstation and studios, which oversees our first party software production on a global basis is accelerating investments to strengthen its production capabilities in June we announced the acquisition of house, Mark which is the 13th and studio under Playstation Studios.
Hello smoke is a Finnish studio from Finland, and that has been successful for more than 20 years due to its superb technological capability and creativity and he has received extremely high praise for return all which are developed and released exclusively on P. S..5 in fiscal 'twenty 1.
First quarter 7 of our 13 studios have been acquired and have produced numerous hits and compelling IP such as the last of a series the horizon and series and go so Shimon.
In July we announced the acquisition of Nixes, a Dutch software development company that has excellent technology for reported in game software between different platforms, such as P. CS.
And we expect that mixes and will offer a technological support to all our studios and our horizontal manner.
Going forward and we intend to continue to proactively make strategic investments with the aim of developing new IP and supporting our multi platform strategy and strengthening our service offerings, including through.
Add on content next day music segment fiscal 'twenty, 1 and Q1 sales increased a significant 44% year on year to $254.9 billion yen sales increased in all categories, driven primarily by growth and streaming.
Yeah.
Sales of products related to demons player commits and Oh, Yeah, you buy the movie Luke and train were the primary driver of the increase and sales of visual media and platform primarily due to the benefit of day increase in sales operating income increased significantly to $55.4 billion yen.
$19.7 billion higher than the same quarter of the previous fiscal year, and which a 7.2 billion yen and 1 time gain was recorded for the transfer of an equity stake and a third party.
Fiscal 'twenty 1 sales are expected to increase 50 billion yen compared to our previous focus to 1 trillion 40 billion and fiscal 'twenty, 1 and operating income is expected to increase 28 billion compared to our previous focus to 190 billion yen. The previous fiscal years operating income included 1 time gains.
$13.2 billion, mainly from the transfer of vehicles, a day strikes and the historic blockbuster hit demonstrate Nevertheless, we expect operating income this fiscal year to exceed that of last fiscal year because of the strong current momentum streaming and revenue, which is the largest growth driver and this business grew considerably due to strong paid streaming and a recovery.
And the other part is saying.
Advertising supported streaming which was negatively impacted.
By the COVID-19 pandemic during the quarter streaming revenue increased significantly and 53% year on year and recorded music and 70% here and here in music publishing.
We are steadily improving our ability to generate hits by discovering and nurturing new artists.
And this quarter as well we had an average of 36 songs and Spotify is global top 100 songs and tracking and debut of songs from our new artists are increasing and it's hit cracking.
And the area of strategic investment we completed the acquisition of the D. I Y artist service business April and May.
This acquisition.
We will strategically complement the Org chart, and the growing India market, enabling us to provide service to artist and various stages of their careers.
In June we announced the acquisition of something else a measure of British podcast production company and Alamo Rockers and music label focused on hip hop and the U S.
And in July we announced an alliance with the rapidly growing online game platform roblox.
The alliance provides artists the opportunity to connect with the roadblocks community through virtual events and other means and it creates revenue generating opportunities that go beyond music.
Through proactive strategic investments and partnerships such as these we aim to further grow our business and generate higher profitability than our competitors.
Next is the pictures segment FY 'twenty, 1 and Q1 sales increased 17% year on year to $204.7 billion yen, mainly due to an increase and sales of media networks and motion pictures, partially offset by a decrease and sales of television production and.
Operating income decreased $1.7 billion year and year on year to 220.
$25.4 billion yen.
Mainly due to the decrease in sales and increase and production cost and TV productions.
Fiscal 'twenty 1 sales are expected to decrease 20 billion yen compared to our previous forecast of 1 trillion 120 billion yen primarily due to later than originally anticipated theatrical release of motion pictures product and deliveries of television programming products.
Fiscal 'twenty, 1 and operating income is expected to increase 7 billion compared to our previous focus to 90 billion yen, mainly due to an increase and licensing revenue, partially offset by the impact of day decrease in sales and motion pictures, while U S box office revenue has recovered to about 40% or 50% of what it was price.
And to a COVID-19, it remains uncertain when the situation will return to normal due to a resurgence of COVID-19.
Given these circumstances, we are taking a flexible approach to our release strategy for films that are ready to be introduced to the market. So as to maximize long term value of those works.
For example, while we decided to further postponed a theatrical release of measure films like Venom and hotel Transylvania transfer menu, we decided to license to video streaming services. The film Cinderella and vivo, which were originally scheduled for theatrical release.
Meanwhile, demand for content from video streaming services remains strong and the increase and licensing revenue from new releases and catalog product has exceeded the decrease in revenue caused by the lack of major theatrical releases and the previous fiscal year.
And media networks, our video of direct to consumer services and increasing their customer base significantly with paid subscribers since June 'twenty, and 'twenty, increasing approximately 80% of anime DTC services and emission.
And approximately 700% Sony Liv.
Video and DTC service and in India.
Okay.
Kill Flex, which we acquired last fiscal year has also increased its paying subscribers quickly, reaching a number today, though with all at that time, because it shouldn't it would take another year to achieve.
Okay.
Next is electronics products and solutions segment.
Mainly due to an increasing and it sales of televisions and digital cameras as well the same fact before and exchange rates. So for the quarter increased significantly to 576.3 billion yen and 59% increase compared to the same quarter of the previous fiscal year, which will severity and negatively.
And like COVID-19, operating income increased a significant 86 billion yen to $71.8 billion again, yeah, and yeah, primarily due to the benefit of the increase in sales and an improvement in the product mix.
Fiscal 'twenty, 1 and sales expected to increase 60 billion yen compared to the previous forecast to 2 trillion and 320 billion yen and operating income is expected to increase 22 billion 200, and some people union to fit the results of fiscal 'twenty, 1 first quarter in the TV business the market.
Well, hi, and value added and ice cream products, which is our focus remains strong, but we are beginning to see a decline in the stay at home demand full.
Coke and our focus.
And the stay at home demand that has continued since last fiscal year in the market with low price small and medium sized products or the supply of TV panels is stake we have maintained price and.
Yeah.
Shifting our focus to higher value added models, resulting in average selling price.
Rising a significant 38% young yet and the digital camera and business, which suffered a significant contraction in demand around the world due to COVID-19 sales assumed in Sydney.
And in all regions due to recovery in demand and a shift to.
Shift.
And in the market to high performance.
And high spec products as well as our strong product competitiveness at the same time. The recent resurgence of COVID-19 in Southeast Asia has caused the government to place restrictions on personal and corporate activity and we have had to reduce operations at our factories in Malaysia from the end of me, there's a risk that up.
All of our component supply chain could also be negatively impacted.
Full year 'twenty, 1 forecast incorporates it incorporates these emerging supply side risk as well as demand side risks such as those stay at home demand from the second half of the fiscal year.
Next is the imaging and sensing solutions.
Fiscal 'twenty, 1 first quarter sales increased 6% year on year to $218.1 billion and operating income increased $4.3 billion yen year on year to 35 billion and physically.
Fiscal year 'twenty, 1 sales are expected to decrease 30 billion compared to our previous focus to 1.3 and 100 million, but our operating income forecast remains unchanged from the previous forecast in the mobile sensor business shipments to Chinese manufacturers have slowed since.
May primarily due to the definition of the Chinese smartphone market and inventory adjustments. However, since we have incorporated this level of demand to some extent into a forecast we recorded sales and profit for the quarter that was essentially in line with expectations.
We were able to offset.
Yeah and decrease.
Decrease in shipments to a certain Chinese customer and generate overall segment sales and profit that exceeded the same quarter of the previous fiscal year because of a steady increase and shipments to imaging non Chinese customer and they recover and demand for image sensors for additional cameras regarding their fleets and we have made to expand our customer.
All of these adoptions of our image sensors by Chinese smartphone manufacturers is progressing smoothly and we have made strides in recovering our market share on a volume basis. So far this fiscal year.
In addition, we have gotten off to a good start when it comes to getting a high Buddy other image sensors design into a flagship models that many smartphone.
Manufacturer.
Planned to launch in the school in the first half of 2022 on the other hands. We are concerned about the high end smartphone market in China, which is snacking momentum because there are no big hit products that zone.
And that had been sold in 2019 and 2020 by the Chinese manufacturer and previously.
Previously mentioned since the situation could have an impact on the speed of which all mobile sensor business profitability expected to recover from the next fiscal year and monitoring the situation is with us and recover the Chinese smartphone market and the short term losses, our financial services segment fiscal 'twenty, 1 first quarter financial services revenue.
3.6% year on year to $414.4 billion yen, so all right.
Due to the decrease in net gains on investments and a separate accounts at Sony Life Insurance Company limited.
And income decrease 2 billion in year on year to 24 billion yen, mainly due to the impact of a 1 time loss recorded other consolidated subsidiary of Sunday Night, I supposed to announce today, but it's from the United in May of this year, we discovered and.
And also as was true of approximately 17 billion yen out of the bank accounts in the name of its 8 reinsurance Ltd and overseas consolidated subsidiary of Sunday Night.
And as a result, we recorded a loss equal to the amount of the restore in first quarter. After making this discovery Sony life immediately took action, including reporting the mother to the relevant authorities and has continued to work with altered all sorties investigating the matter to recover the funds and game for accounting.
And what could we sincerely apologize for closing concern, but this has no impact on the insurance contracts that the customers all Sony life of entered into.
Yeah.
Our fiscal year, 'twenty, 1 and forecast for financial services revenue remains unchanged from the previous forecast.
Operating income is expected to decrease 17 billion yen compared to the previous forecast of 153 billion yen.
At the other all day held in May we explained our strategy to maximize the value of the financial services business.
Drinks and group management to sustainably grow the business in a profitable way to demonstrate our progress in language discharge and he from this earnings announcement, we have decided to disclose 2 important indicators, while assessing the corporate body of Sony life market, consistent and budgets, but at M. C.
Z and near policy, but it's in our supplemental information document every quarter.
We also increased the dividend at the financial services and stage at the end of the previous fiscal year by 'twenty and push it to 90 and per share. The business is expected to make additional contributions to the Sony groups through the stable dividend increases. This concludes my remarks. Thank you.
And that was you don't get to Turkey, executive Deputy President and CFO.
And now at the 425 P M, Japan time there'll be a.
Session with our media people, and then there'll be and questions and answer session with investors and analysts at the 450 P M and the duration of the Q&A session will be 20 minutes. Each so if you have kind of signed up are in advance.
Please.
Call into the number that has been designated and advance and if you have not signed up and advance you'll be able to listen to the Q&A session over the webcast.
So please wait until we start the Q&A session and thank you.
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Ladies and gentlemen will be used.
Setting, arguing day session with C media people. So please wait for a short while before restart.
Ladies and gentlemen, and thank you for waiting and we'd like to now start our Q&A session I was a journalist.
And responses will be made by executive Deputy President and CFO, He don't get to Turkey, and senior Executive Vice President in charge of communications. They should all come back and senior Vice President in charge of corporate planning and control financing ire Naomi Matsuoka. If you have a question. Please press the asterisk followed by the number 1.
And when and if your turn to ask a question I will call out your name. So please state your affiliation and name and before you pose your question. Please.
And please limit the number of questions to 2 per person in order to prevent all your feedback.
Please make sure that your 2 and off the volume of any peripheral devices. Thank you for your cooperation.
And if there's a connection problem.
And you got disconnected due to time constraints and we will be moving on to the next person to ask the question. So please accept now if you'd like to cancel your request for questions. Please press and number 2 after the asterisk.
And I would like to start the Q&A session. So if you have a question. Please press asterisk on your phone and then that's number 1.
Okay.
Okay.
And at least in Armada and from NHK is the first person to ask a question.
Mr. You know Matt that.
I Hope you can hear me I am INO myself from NH game Bank.
Thank you.
I have 2 questions regarding the shortage of semiconductors.
So Playstation 5 and electronics is doing favorable.
So currently what is the impact of the shortage of semiconductors, and what do you expect going forward.
And the second question.
All once again about the shortage of semiconductors, Taiwan T. S N S C.
And you'd be building a factory in Japan, and I do hear about our partnership with Sony.
And so is there anything that you can comment on about the this so TSMC issue.
Thank you for the question number 1 question was regarding the impact on the shortage of semiconductors.
And number 2 was.
And the media reports about here's N C and our potential partnership with them all.
And when they build a factory and Japan, where those are 2 questions I would like to respond.
And the shortage of semiconductors have impacts in various areas.
And so various measures we have been taking some actions for P. S 5 and.
This year the number of units to be sold today and 2 this year and has been set the target has been set and we have secured and a number of chips that's necessary to achieve that and.
And have you got enough supply of semiconductors and are concerned.
And also for consumer electronics segment.
We do use a lot of semiconductors and very serious so some availability of our parts and components is a source of concern, but we do have access to a second sources.
And for parts and components, we have some strategic inventory as well.
So we have been taking various measures. So that are the production and sales will not be impeded.
For now and the time being we have been able to control the situation, but going forward and we cannot remain complacent. So we would like to have access to good information. So that we will be able to smoothly and continue to produce and sell our products regarding and the new media reports that you have mentioned.
We have not send out the information so as of now there is nothing that we can and say about this but as was mentioned by Mr. Yoshida. The C E O in the past and in general the logic chips supply.
Is something that.
It's very critical and if you look at the Japanese industry as a whole in order to maintain and international competitiveness logic chips, all very critical that as they and of Microsoft and my response. Thank you.
Next person please.
From Nikkei newspaper bumps some.
Please.
Bugs and Mr. Pan from Nikkei newspaper are you there.
Hello.
Yes, we hear you. Please go ahead.
Mr Ban.
All your stuff that you hear us.
This up on I'm sorry.
Since the line has been disrupted and disconnected we would like to proceed to the next person.
From financial times, and AGA caisson. Please.
Do you hear me, yes, we hear you. Please thank you very much from financial times My name is saying that rocky.
I would like to ask you about your camera business.
This is not directly related to the financial or was that sorry from Tokyo Olympics and Paralympics, a games mirrorless cameras of Sony is being used more widely from consumer market to the professional mirror all of this market.
It will help but is your evaluation and this.
Thank you very much for your question about the camera business.
I am very sorry, because of the sponsorship mutter.
We are not all allowed to speak on anything related to the.
Ongoing sports event.
And for camera business about the camera business itself.
From last year because of the pandemic.
People are staying home and lacking and shooting go opportunities. So last fiscal year. The situation was fairly difficult for cameras. However, it seems that the situation is improving from this fiscal year.
This business is going smoothly and going forward and this trend.
As expected to continue.
And as a general rule.
All of our professional or of a Dutch market share is increasing and improving thank you very much.
Thank you and I have to take on the next question.
And this initiative I flew out to a border.
Thank you I hope I'm being HUD Cuddy, yes.
Okay.
I have 2 questions. Please the first question is about the game business.
You stated.
That that has fees from deterioration of the predictability of the hardware.
Are you, saying that hardware.
Contribution of profitability.
Is it to happen.
All rather that is a question of balance between the software and hardware can you elaborate a little more the second is all net of tricks camera you've stated this injury.
All things are doing very well is a good business.
For the.
The camera electronics.
Do you think that you have reached a point, where the camera or China and continued to contribute to your earnings all.
And do things that it will take a little more time before it can be a true contributor to your earnings. Thank you. The first question is about the game business.
And the deterioration of profitability of the hardware what did I mean by that statement.
And the second is about the camera business.
All oval electronics business a future.
Earnings contribution I think you're asking about the trend or the prohibit it at all how air products business will contribute I would like to accommodate all cover those 2 questions.
Yeah.
This is in comparison with a P S..4.
So.
The P S fights for stability.
And then in April we have put together a focus for this period and the assumption and our focus remain unchanged things are progressing as we have plant and its going home and very smoothly.
The overall electronics business.
We have improved the structure the fabric and we have entered into many structural reform.
Through such efforts I think we are more robust and.
And Richard in terms of management.
Of course, it is subject the demand changes and.
And we have to take more actions natus to withstand those changes, but personally I believe that they can continue to contribute to our onyx. They have improved our business. So that they are a genuine contributor to our business. Thank you.
All right.
Thank you. The next question please.
And most of the songs from Nikkei. Please.
And mess it up from and U K here I Hope you can hear me, yes, I can hear you and <unk>.
I have first question related to an earlier question.
So this year.
And the stay at home demand for gaming has come down, but the electronics and also and music.
Is it favorable so you have upwardly revised and their projections and so in various segments.
You know some people are saying that that and they should be sold off but you are now having a structure that is very resilient to changes.
So how do you assess your transformation efforts.
Question number 2 P.
P S 5 or.
Our gaming business.
So currently the number of units to be sold and all.
And so there are number of active users on a monthly basis.
And I think on a quarterly basis is coming down slightly it seems so youre looking for a long term growth.
But the currently you are seeing some decline so how do you assess the situation.
Thank you for the question you.
And you had 2 questions.
The first 1.
It was a we have diversity of our businesses and.
And Oh and resilient and you know how was the result of the transformation and restructuring of the company.
And number 2 is related to game business.
And so the monthly active users on a quarterly basis seems to be coming down as a chance. So how do you how do we assess and they don't and growth.
So regarding your first question.
Well the restructuring had taken place, but in addition to that.
We have a lot of a different game and it.
Titles or games.
And I think that each of the businesses have been able to transform the structure and the strength of their businesses and I think that has been a major achievement.
So the level of a corporate management capabilities have been increased.
So there are some very positive momentum.
Momentum there was some negative asps.
Aspects as well, but the each business had been able to respond to the situations and now we are able to now have devised a strategy to seek a long term growth.
And regarding the game business, yes, it's true if you look at it on a quarterly basis.
Well no.
Our fifth goal.
All Twenty-twenty first quarter.
There was a biggest impact on the stay at home demand. So if you compare that yes. It does seem like there is a decline.
And a significant basis, but if you compare it with fiscal 2019 as I mentioned in my speech.
And there is an increase.
Over the 2 years ago. So I think on a long term there is and a growing trend and I think and their growth is here to stay so for us.
We are going to provide better services and better experiences to our users. So that we will be able to capture the opportunity to further grow this market. Thank you.
Okay.
And I since time is running out. The next question will be the last 1 from Bloomberg and photo cover some fees.
Okay.
Critical all from Bloomberg and can you hear me, yes, we can hear you.
Thank you.
Yes.
About semiconductors.
I have a question.
And July.
And Costa the Kumamoto factory, you applied for our acquisition of the law and to applaud the holiday Cmos.
Sensor.
285 billion yen was when it was decided to invest and Cmos and with that amount have you already.
Half that and ton is it is this blood go into every day seamless factory or is it a joint venture of tea with T. S. M. C. That's the first question Seth.
Second question about game.
Business in May.
About the profitability of P. S 5.
There was this view that the breakeven point will be reached in June is it part is it apart and the positive range from July onwards, or is it still and the negative range.
Thank you very much.
For your questions.
About the I N S as far as the about the Atlanta acquisition and Kumamoto.
Yeah.
Is it to and good with it and good at and this fiscal years, our Capex plan and the plot acquisition is not a short term matter and it is a long time.
Investment.
So to a certain extent always it's included in the investment funds and that says it was included.
Can safely say that.
Now this is a the plot deserts and 2 Kumamoto Tec, we applied for the acquisition of the plant, but for more details I, let me refrain from making any further comment.
But the profitability of P S 5 and.
And there was this view of reaching breakeven point in June but P. S..5.
Break even point for standard edition.
More correctly on standout edition and that's how we explained our situation and it's been progressing according to the plan.
Over all hardware profitability.
And tariff all rose.
Hardware profitability, including parents, all us and we have been saying is proceeding smoothly. Thank you very much.
Thank you.
And I'm afraid the time has come for us to close this session.
All of the media members.
Okay.
The other session will begin from 50 minutes past the hour since there will be some change all the.
The members, who will be responding to the questions.
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Oh, well, yeah about the begin decision for investors and analysts.
We seek for you all for the patients indulgence. Thank you Sir.
And will start shortly.
Ladies and gentlemen, we would like to begin the sessions for analysts and investors I am hayakawa in charge of IR.
From Sony and Mr. Total game, you don't get other gay the CFO and.
And.
And Ms Nuomi and Matsuoka senior Vice President in charge of corporate planning and control finance and IR and Mr. Hirai.
And he could another senior vice president in charge of accounting all be answering to your question those who have the questions. Please push the asterix.
And.
It should be followed by number 1 well.
And what we're designate and call. Your name if you could please start asking questions. We ask you to limit the number of questions to 2.
To avoid any audio feedback when you're asking questions. Please turn off all.
And all.
The the sound of the peripheral equipment and.
Should there be any discontinuation of the communication and the interest of time.
Have to move on to the next question. If you are going to cancel your request for question. Please push too after aspects.
No.
If you have a question.
We used to push the ethics for all.
And by numerous number 1.
From JP Morgan.
And Mr.
I got that.
Thank you Aida from JP Morgan I have 2 questions.
The first question.
Is E P M S.
Assessment and evaluation for the first quarter.
And I may be repeating myself T V and the camera the average selling price must have gone up.
That contributed to the rise.
Is an improvement of the product mix.
And the substantive improvement and also it may be affected by supply and demand situation in the market and you elaborate on those factors and you can make just a conservative statement rather than quantitative statement and also.
And the inventory into distribution and the market.
Bearing that in mind.
What other potential or the probability of the price is going up in the second quarter. The second question is all I S and us and I am asking this question many times.
The capacity.
And of the first quarter and the number of wafers for the first quarter.
And your prospects for the second quarter.
And wafer.
And also second quarter and beyond what are your projections on the unit price all wafer and would there be any meaningful changes.
Thank you very much for your questions. Your first question.
Is about and the assessment of variation of E and S and the second question has to do with Ey and assess I don't like to respond to those questions.
ASP, yes.
Ah indeed going up.
Is it attributable to the betterment of the product mix all.
To the supply and demand situation is difficult to really break down into those factors I can only make some sort of qualitative statement for T V. Both factors were at play.
<unk> strategy large screens Tvs were promoted.
And.
Oh, we are intentionally shifting to that and of the product. So the beginning of the first quarter. Some other.
And itself.
The market for 32 inches and smaller.
And coming down there's a downward trend.
So in that context, I think our product mixed plant proved to be right and I think we were right in perfecting the supply and demand.
And camera I think we have a good product mix too.
And like last year, when there was a COVID-19 impact to each.
Each country has progressed and vaccination.
And the market, particularly the mirrors, whose size merits camera market is recovering.
And so there is a tailwind.
That we enjoy.
The market inventory or distribution and inventory.
At this point of time bids camera or TV.
There are no particular concerns and level does not warrant us all require us to be concerned.
But towards the end of this fiscal year the second half.
I think the panel price would become softer.
How are you going to handle that situation will hold the key.
I and assess.
For some other question.
On the qualitative aspect.
The first quarter at the end of first quarter.
The master process.
It was 130 K per month that all.
Our capacity there has been changes and the mobile mix.
All.
There has been a decline from 141 K the earlier projection at the end of second half.
Expectation is that the figure will be 130.8-K per month.
And the first quarter of juice.
The simple average for 3 months was 137 and Kate.
Last year, the fourth quarter.
At the end of the fourth quarter the average input.
130.8-K.
So again is working at the fullest and it is as we have assumed upfront.
Yeah.
Our fiscal 'twenty, 1 we are shipping 4 new models, so we are accelerating or increasing the capacity utilization.
And the first quarter this fiscal year.
For the 3 year 3 months average it'll be 130, 8-K again as we have projected so that's more of a quantitative.
Net.
Compared to the previous fiscal year, the husband and a decline of 10%.
A certain Chinese customer.
The other thing and the strength.
Moving onto the next question and Afghanistan Mizuho Securities. Please.
And that kind of speaking I hope you can hear me and from Mizuho Securities.
Thank you.
So 2 questions.
Number 1.
The operating income I have been revised.
So there's 1.
Music and pictures and E BNS and those other factors with a revision.
So very roughly.
So there are upsides and the first quarter and.
And.
And also you know what.
Electronics, you know there are some and this is these stabilizing factors and some area. So you know there are some negative factors that could have impacted the upward revision. So so in the 3 categories I can you share with us or your thoughts about the how they were factored and my second question.
And so in a semi macro.
Our view of Turkey sound.
So in the North American market and China.
How about it.
And the demand environment until the end of this year.
You know how do you view or what have you.
How do you think this demand.
Electronics.
And sensors and games and music I think the situation and the Berry.
And so you don't have to talk about all of the segments.
But please talk about the macro environment and that you anticipate towards the end of this year.
And my 2 questions.
Thank you for the question So first question.
And the revision of your operating income and we have made so.
How much is it coming from the first quarter and how much is coming from the rest of the year.
And your second question and see related to.
A very broad question actually.
And our North America, and China and.
How do I assess the demand situation I guess, so you're looking at the overall economic situation of these 2 markets. So regarding the revision of the operating income.
Excluding the financial services, and if I may talk about us and other segments well basically.
And generally speaking.
And the first quarter, especially for E. P N S.
And the first quarter actuals were very strong and the performance was very strong so that really pushed up.
And the expectations.
If you factor and down beyond the second half.
Maybe you would think that the it's not gonna grow not much but beyond the second half.
The demand of T V. You don't know, what's going to happen and.
So and the infection or the resurgence of COVID-19.
And that could have some.
Some impact on and production sales and supply chain and we don't really know what's going to happen and it's hard to anticipate.
So we have factored in and those risks.
And and making our projections.
And.
For music.
First quarter. It was very strong the streaming services and was very favorable and it's growing very well.
And in the past.
We had the advertising supported streaming.
Oh, it was very difficult because of a COVID-19, a subscription was good but not AD supported and ones, but the ads and all.
All kit is now recovering.
So.
And the projection for AD supported streaming what's also included an unreasonable way now for pictures.
Have made a revision.
And based on our predictions and throughout the year based on what we know now.
I think that would be a fair thing to say no.
And regarding the North American market and the Chinese market and what would be the demand situation until the end of the year that is actually very tough question.
Yeah.
So if you look at the current situation.
It's very favorable and I do wish that the favorable condition will continue but all the other hand.
There is a resurgence of COVID-19, and we have to.
Tried to address.
The impact of that the theatrical releases so films.
Hopefully it will be recovered you know that's what we thought 2 months ago, but now.
Uh huh.
We believe that a full schedule relief is going to be really difficult. So force theatrical releases of our pictures.
And pictures for families with children and I can say aye.
I don't think we will be able to.
Do very well because people will be reluctant to take their kids to theaters. So they are such concerns and North America now in China in terms of COVID-19 impact.
On a relative basis. It is less concerning that is my view.
<unk>.
But more recently.
And China.
There are some.
Restrictions that have stepped up our 4 major Chinese companies and that is a trend and that is ongoing.
So you cannot assess things from the economic or purely economic.
Standpoint.
So you have to really look at these other developments or trends.
When you look at the Chinese market and thank you.
Okay.
The next person please from S. M D C and Nikko securities cuts at Us and please. Thank you very much can you hear me, yes, we can hear you.
2 questions from me 1.
Well this is related somewhat to the previous question.
The progression of the Chinese platform is what's the impact of such regulations restrictions on them.
Mobile games maybe.
And maybe the direct.
Segment.
Or certain platformers is affected so.
Yeah.
And for entertainment are circumventing the entertainment business, what kind of impact with that regulation in China have all the entertainment business of Sony That's first question second.
Operating income there was an upward revision by 50 billion yen by segment.
And you explained about the situation in Q1, and all words, however, they choose.
Remains unchanged and FX are you are reevaluating the win yen to be weaker.
Theres so much uncertainties.
2.
Well I think it was a in the case of Toyota to.
Hold that target unchanged and the operating income of Sony was upwardly revised.
And what are the reason and so what are the major points to do so thank you.
Thank you for your question.
First question about the regulation show and their Chinese plot for immersion.
What kind of impact would that have to our entertainment business.
Your second question.
Under certain circumstances, so we upwardly revised operating and income forecast so what all the background.
So, but the first question about the regulation.
At this moment.
China is a market.
When we look at the and China is a market. It is not though we depend heavily on that market as an overall picture.
In terms of the percentage of sales it's limited.
And that's what all I can say about that however.
These kind of regulations.
Has been and implement cyclically so far for example censorship issue in China.
And about the films released in China has been restricted and the past.
No.
For us we need to come to grips with the facts and and earliest stage take actions other than that we don't have other options.
More than ever.
We tried to be more sensitive about the situation in China and our response.
Now about the equity participation of investment we did make other investments.
The where the that they are not the level.
Which have and having the impact on the management the timing of the investment.
But we look at it it's.
They don't have any risks.
Of incurring is also.
We are investing for the partnership.
On a long term basis, and we would like to continue this stance.
So this is an uncertain times and our forecast of the operating income.
Basically.
Sales or revenues.
Are some of them.
Some of the and categories increased sales and other declined so.
It seems to me, there's a eh and.
Matter of adjustments.
After the first quarter's results looking at it we just made the adjustments.
So this is and natural accumulation.
It's all about Oh betcha.
Yeah.
It's not that we put.
A big message into it.
We take risks and opportunities into our consideration to come to this forecast.
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Okay.
And the time is limited so we will take the last question.
We apologize, but the next <unk>.
Don will have to be the last question and then ask you to ask only 1 question and.
The interest of time, Mr. All all of Morgan Stanley.
Thank you all know.
On Sunday.
You said 1 question.
Now I believe that our media members all sources question.
And in the supplementary information on things.
And it talks about the monthly active user hundreds of all medium and I think is the number.
And the fourth quarter.
Figure was 109 million and there was some decline and total gifts and explained that it's a seasonality factor. So you are not concerned but now its hundreds and 4 how do you look at the standard and for medium.
Yeah.
And the overall context, the monthly active user and they use.
Yes, she does not refer to home.
1.6 million would this situation impact a lot and Michelle she does it when he used to figure all of them point 6 million. Thank you.
This.
And so those are strong singer 1 day.
Therefore of course is not a strong number.
Okay.
But.
All we're looking at is a declining trend we don't think so.
The first quarter.
And we all are trying to analyze different elements, but there are no co stickier strength that we could catch up.
Maybe this month next month.
And we'll have to continue to watch and do that analysis at the risk of repetition may I say that last yes.
Our need and stay at home demand or such a significant demand.
As a hindsight, so compared to that period last year as a trend.
Of course.
All compared to fiscal 19 and then.
It is an increase.
So we will monitor the situation carefully.
And we will deepen the engagement.
And then Hans.
The platform will make such efforts therefore for this coming all this fiscal year will take some actions to.
Our support this business. Thank you.
You're very much at the time has come to close this session.
To close the earnings announcement for Sony. Thank you very much for your participation.