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4
Letter to Shareholders: A Message from Howard Stringer, CEO
I am pleased to report the results of fi scal year 2007, ended March 31,
2008, and outline our growth prospects and strategies for the future.
As I wrote in my letter to you one year ago, fi scal year 2007 represented
the culmination of our three-year restructuring initiative. I would like to
report that we achieved nearly every goal that we had set for ourselves
three years ago. We successfully re-engineered our company by dramati-
cally reducing operating costs, streamlining our operations, and reducing
headcount and the number of our product categories—all of which
contributed to a signifi cant improvement in operating results. As a result,
on an annual basis and compared to three years prior, sales and operating
revenue rose 23% to nearly ¥9 trillion, and both operating income and
net income more than doubled to ¥375 billion and ¥369 billion,
respectively.
Success was achieved across many of our businesses. Notably, Sony
Group worked together to successfully make Blu-ray Disc™ the de facto
standard for high defi nition recording and playback. To date, more than
15 million Blu-ray Disc players, recorders and Blu-ray Disc-enabled
PLAYSTATION®3 (PS3™) systems have been sold.
In the Electronics segment, which represents approximately two-thirds
of our consolidated sales, operating income rose from approximately zero
three years ago to more than ¥350 billion in the most recent fi scal year.
The operating profi t margin achieved in fi scal year 2007 was 5.4%, far
exceeding the 4% goal which we had established in 2005. From a product
perspective, Sony’s LCD television business has moved from having a
limited presence three years ago to being one of the market leaders
today on the strength of the BRAVIA brand, and it is in a position to
strive for signifi cantly improved profi tability. In addition, we were the fi rst
to market with the next generation television—the organic light-emitting
diode, or OLED, TV—which is a sleek 3 millimeters in thickness. These
are but a few examples of the successes achieved.
In the Game segment, over the past three years we have benefi ted from
the continued strength of the PlayStation®2 platform and a resurgence
in sales of the PSP® (PlayStation®Portable) platform, as well as the launch
of the PS3™ platform. While the segment recorded a loss for the most
recent fi scal year, it was an improvement of more than ¥100 billion versus
the previous fi scal year, and we are expecting further improvements. With
50 million users of network-enabled PSP® and PS3™ units worldwide,
we have an enormous global base upon which we can build a video
delivery service.
Our Pictures segment recorded more than ¥50 billion of operating income
in the most recent fi scal year, benefi ting from the strength of the home
entertainment releases of a number of successful titles and the continued
vitality of our television business. Over the past three years Sony Pictures
08SonyE_P1_P13_0804.indd 408SonyE_P1_P13_0804.indd 4 08.8.7 2:17:38 PM08.8.7 2:17:38 PM