Sony 1997 Annual Report Download - page 4

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2
We are pleased to report that Sony celebrated its 50th anniversary during the fiscal year by posting
record sales and earnings. Determined to build on this momentum over the next fifty years, we are
taking steps to change ourselves by bringing about a Re-Generation from within the company.
Sony has consistently introduced audiovisual equipment that brings new meaning to the word
“fun” in consumer electronics. The company has also continued to provide excitement through music
and filmed entertainment. Today, the markets for entertainment hardware and software are being
redefined by the forces of digital and networking technologies. Moreover, the advent of digital
satellite broadcasting and other types of electronic distribution is enhancing the value of all types of
entertainment software.
Sony’s course of action is clear. We are emphasizing information technology as a key element in
the company’s future business development. We will continue to promote the incorporation of
digital technology in our hardware and software businesses. Information technology will also add
value to our vast store of music and filmed entertainment assets. As this process unfolds, we
believe it is critical that we extend our business domain to encompass broadcasting and other
forms of electronic distribution.
Record-Setting Performance
In the fiscal year ended March 31, 1997, consolidated sales and operating revenue rose to an all-time
high of ¥5,663 billion ($45,670 million). This was the result of higher sales in all business segments
—Electronics, Entertainment, and Insurance and Financing—combined with the progressive weakening
of the yen. In the field of audiovisual equipment, sales of digital camcorders, MiniDisc systems, and
other digital products climbed sharply. Our home video game business continued to expand worldwide
and made a significant contribution to consolidated results. Falling sales prices impacted the perfor-
mance of personal computer-related semiconductors and CD-ROM drives. In the entertainment field,
highly successful releases included Celine Dion’s hit album
Falling Into You
, and
Jerry Maguire
, a
blockbuster movie starring Tom Cruise.
Consolidated operating income was ¥370 billion ($2,987 million), income before income taxes was
¥312 billion ($2,520 million), and net income was ¥139 billion ($1,125 million)—each representing a
record high. We will continue to work toward achieving even better profitability.
New Management Structure
In light of the ongoing diversification and globalization of Sony’s operations, management decided in
May 1997 to reform the Board of Directors and to create the new position of corporate executive of-
ficer. This new system provides a clear division between individuals responsible for policy-making and
oversight and those responsible for operational management. Our objective is to ensure that Sony has
the solid management base necessary to support sustained growth. Regarding the Board of Directors,
we plan to increase the number of outside directors and to promote candid and meaningful discussions
To Our Shareholders
Sony Corporation Annual Report 1997