Sony Group Corporation (NYSE:SONY) Q1 2023 Earnings Call Transcript

Unidentified Analyst: I have two questions. And first question is that, as was already mentioned, the 3 areas of segments of entertainment, the total, the income, the exceeds are 54%, the 3 segments combined. It is still very high. And so you talked about next MLP, what are the percentage you would like to reach for the total — the income of those 3 segments? And so now the China slowdown, and you have already mentioned in I&SS. And for other segment, what is the impact? For instance, the consumer spending has been quite weak in China. So what is the impact on overall business of Sony Group?

Unidentified Company Representative: Thank you very much for your question. And so I would like to answer the 2 questions. And as for entertainment, 3 segments combined, the operating income, what is our plan to reach the certain percentage? That — and we do not have any target in terms of the percentage. But 3 segments: Entertainment, the segments combined, and also I&SS where the growth is expected. So comprehensively, I believe that the percentage or the portion of the profit earned by those segments will increase. And the second question is other than I&SS, what is the slowdown of Chinese economy on other segments? And for the consumer spending, the ET&S will be affected. The TV and smartphones are areas where — which is severely impacted.

But currently, as far as FY ’23 is concerned, the slowdown in China since there is a great concern about that, so our plan is made quite conservatively. And therefore, management itself has been going quite well. But on the other hand, as for the camera, the market, which is quite — performing quite well, and under COVID, the activities have been restricted in the past. But there is a very good demand in this area. So we would like to reap the profit as early as possible in this area. That’s all.

Unidentified Company Representative: Now we’d like to move on to the next question [indiscernible] from Industry Delhi.

Unidentified Analyst: I’m Abe from Industry Delhi [indiscernible]. Can you hear me?

Unidentified Company Representative: Yes, I can. Thank you.

Unidentified Analyst: Related to the question asked earlier, ET&S segment. Digital camera is the area that I have a question. The sales unit increased, which relatively increased profit. By regions, can you explain, for example, year-on-year basis growth rate? Can you enlighten me? In addition, in this area, Chinese market, you said that there is a robust market demand in China. Going forward, do you expect robust demand will continue in the Chinese market? What is your view of the Chinese market and the demand in the market in China?

Unidentified Company Representative: Thank you very much for your question. ET&S segment, digital camera increased in the number of units sold, and what is the breakdown by regions was your question. In the first quarter, camera body and lens both are doing well. By regions, China and Asia, the sales has been very robust. And Europe and U.S., full on, the competition with others is getting more severe. So in some areas, there is some slight decline in share. But we are making additional investments such as sales promotion, and we are expecting our share to increase. Going forward, we should not be optimistic, and we have to be prepared for the possible slowdown of the market. And we have to invest for new products, and also we’ll be controlled in both production and sales.

Unidentified Company Representative: We’d like to entertain next question. Kyodo Tsushinsha, , please.

Unidentified Analyst: Endo from Kyodo Tsushinsha, I hope you can hear me. I have one question about camera. The sales are going up because after the COVID-19, there’s some maybe the repercussion after the — that for the people troubling again, that they like to use more digital camera. Is that the new demand? Linked to the COVID-19 and the pandemic, how the demand is increasing after the COVID-19 pandemic?