Sony 2012 Annual Report Download

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Table of contents

  • Page 1

  • Page 2

  • Page 3
    ... and CEO Corporate Strategy 36 43 61 68 69 Sony Products, Services and Content CSR Highlights Special Feature I Sony Expands the World of 4K Financial Section Special Feature II A Stacked CMOS Image Sensor That Accelerates the Evolution of Digital Imaging Business Highlights Stock Information...

  • Page 4
    Letter to Stakeholders: A Message from Kazuo Hirai, President and CEO "Sony will change." Sony is reinventing itself to deliver new and exciting experiences to our customers around the world. 2

  • Page 5
    3

  • Page 6
    ... Products & Services, Professional, Device & Solutions and Sony Mobile Communications. Operating Results in Fiscal Year 2011 During the fiscal year ended March 31, 2012 (fiscal year 2011), our operating results, particularly in our electronics business, were negatively affected by the Great East...

  • Page 7
    ..., we must develop groundbreaking products, services and technologies that maximize Sony's distinctive technologies and restore our television business to profitability. We must also accelerate management decision making and make focused and selective investments based on our long-term strategies. In...

  • Page 8
    ... outlined in our new corporate strategy announced on April 12, underpinned by Sony's core strengths: Strengthen core businesses: Digital Imaging, Game, Mobile Turn around the Television business Expand business in emerging markets Create new businesses and accelerate innovation Realign our...

  • Page 9
    ... Device Solutions H. Yoshioka Medical M. Lynton Sony Pictures Entertainment Sony Music Entertainment K. Ihara Sony Financial Holdings Group Headquarters Global Sales & Marketing Corporate R&D, System and Software Technology, Advanced Device Technology UX / Product Strategy / Creative...

  • Page 10
    ..., services and technology, but sound business practices as well. In 2011, in the immediate aftermath of the Great East Japan Earthquake and Thailand floods, the Sony Group came together to provide assistance for relief and recovery efforts, including through employee donations and volunteer programs...

  • Page 11
    ... at this critical point in our history. We stand together in our belief that Sony will change. On behalf of the management and employees of Sony, I thank you, our stakeholders, for your continued support. June 29, 2012 Kazuo Hirai President and CEO Representative Corporate Executive Officer 9

  • Page 12
    Corporate Strategy Key Initiatives to Transform Sony On April 1, 2012, under the leadership of President and CEO Kazuo Hirai, Sony announced "One Sony": an integrated new management approach designed to accelerate decision making across the entire Sony Group. The new approach marks the beginning of...

  • Page 13
    11

  • Page 14
    ... range of professional products, including security, professional-use camera and medical equipment, Sony aims to further expand the scope of the digital imaging business and create attractive and differentiated products. Sony believes that it can maintain its high market share in the digital camera...

  • Page 15
    ... the 100% consolidation of Sony Ericsson (now Sony Mobile Communications AB)-Sony will further accelerate integration of Xperia smartphones, Sony Tablet and VAIO PCs and increase product appeal. Sony will realize a one-platform operating structure for its mobile business Core Business: 2. Game Core...

  • Page 16
    ... truly the hub of the networked entertainment world. As mobile connection speeds increase and cloud computing becomes commonplace, the potential opens up for the development of a diverse array of new business models. In February 2012, Sony Mobile Communications AB became a wholly owned subsidiary of...

  • Page 17
    ... Market Initiatives Strengthen supply chain & operations Products tailored to local needs Consumer AV / IT No. 1 share TV Sony 30% 60% 15% TV Sony 30% 35% 15% Home Audio Sony Promote Group-wide assets Joint promotions with Pictures & Music, etc. Home Audio Sony Notebook Sony Notebook...

  • Page 18
    ... of Executive Deputy President Hiroshi Yoshioka. Sony also plans to enter the medical equipment components business in which its core strengths related to digital imaging technologies offer significant competitive advantages in such applications as endoscopes. Sony is also targeting the life science...

  • Page 19
    ... into a more profitable structure. Sony plans to focus its investments in three core businesses-digital imaging, game and mobile-as well as its new medical business. Other existing business areas will be evaluated to determine the optimum strategy for those businesses, including consideration of...

  • Page 20
    ... more than four times that of Full HD, 4K digital cinema has wowed even the most seasoned creative professionals. Sony's outstanding digital imaging technology is opening up a world of possibilities in entertainment, and is poised to provide consumers with rich, new home theater experiences. 18

  • Page 21
    Sony teamed up with Brazilian television broadcaster TV Globo Internacional to film the Rio de Janeiro Carnival, capturing the excitement of the event in full 4K at 60 frames per second. 19

  • Page 22
    ... 4K home theater projector Sony Leads the Evolution of 4K Sony 's 4K digital cinema initiati ves began in response to the motion picture industry's need for digital technology that could match the texture and quality of conventional film. Utilizing state-of-theart electronic devices is essential to...

  • Page 23
    ... projector. Sony is the only company to develop and manufacture in-house both types of equipment, and also possesses extensive knowhow f rom managing a global enter t ainment business. Hence, Sony's Digital Cinema Solutions Business offers theaters and cinema chains a full product and service lineup...

  • Page 24
    ...the Motion Picture World Ryosuke Hayashi General Manager Products Planning Department Content Creation Solutions Business Division Professional Solutions Group Addressing Three Key Technological Issues To realize the F65 CineAlta camera, which was developed by mobilizing Sony's collective strengths...

  • Page 25
    ... market for the production of high-image-quality content, Sony's goal for 4K is to keep providing audiences worldwide with thrilling experiences based on sublime images and sound. Last year, Sony launched its 4K home theater projector. Although its development was based on the commercial-use digital...

  • Page 26
    ...of Digital Imaging Sony developed a next-generation image sensor that will enable further advances in camera functionality, as well as achieve more compact sizes. Sony's cutting-edge technology-developed with the aims of realizing "Super Reality," which surpasses human vision- continues to drive the...

  • Page 27
    25

  • Page 28
    ... stacked CMOS image sensor (2012) Back-illuminated structure Commercialization of Exmor RTM (2009) On-chip column parallel A/D conversion Commercialization of ExmorTM (2007) High-image-quality pixel technology Commercialization of CCD (1980) 1 0 1 5 1 0 200 200 200 2010 2011 2012 26

  • Page 29
    ...8 2 . 31.5 22.1 25. 4 0 . . . 12.5 13. 1 .3 0 200 2010 2011 2012 2013 201 2015 201 200 2010 2011 2012 2013 201 2015 201 Cellular Digital Camera D-SLR Video Camera Note: Years ended March 31. Security Camera Cellular Digital Camera D-SLR Video Camera Security Camera 27

  • Page 30
    ... core technology for digital products in fields such as security and medical science. Sony's new image sensor also promises to open the way for adoption of image sensors for a wider range of applications with sensing and authentication functions. Sony began developing image sensors in-house almost...

  • Page 31
    Sony Technology Drives the Evolution of Digital Imaging Tetsuo Nomoto General Manager Business Department 2, Image Sensor Business Division Semiconductor Business Group has been underpinned by our unwavering pursuit of high image quality, as well as by cutting-edge MOS technology accumulated in the...

  • Page 32
    Business Highlights - - Consolidated Results â- Consolidated sales decreased year-on-year primarily due to the unfavorable impact of foreign exchange rates, the impact of the Great East Japan Earthquake and the floods in Thailand, and deterioration in market conditions in developed countries. â-...

  • Page 33
    ... Other (1.4%) 14.9% 2012 47.2% Digital Imaging (16.3%) Personal and Mobile Products (23.6%) Game (24.3%) Other (0.5%) Consumer Products & Services Professional, Device & Solutions Pictures Music Financial Services Sony Mobile Communications All Other Corporate Combined total of cash...

  • Page 34
    ...Results by Business Segment Sales and Operating Income by Segment (Yen in billions) Sales * Left: 2011 Right: 2012 3,849.8 3,136.8 1,503.3 1,313.8 600.0 657.7 Consumer Products & Services Professional, Device & Solutions Pictures 470.7 442.8 Music 806.5 871.9 77.7 Financial Services Sony Mobile...

  • Page 35
    ... billions) 1,503.3 1,313.8 27.7 (20.2) 2011 2012 The Pictures segment consists of motion pictures and television production and distribution, and other businesses of Sony Pictures Entertainment Inc. (SPE), which is based in the United States. Pictures Sales Operating income (Yen in billions...

  • Page 36
    ... policy reserves in the current fiscal year, which was recorded in the previous fiscal year due to the Great East Japan Earthquake. Revenue Operating income (Yen in billions) 806.5 871.9 118.8 2011 131.4 2012 * Results for Sony Life are based on generally accepted accounting principles...

  • Page 37
    ...So-net Entertainment Corporation, an Internet-related service business subsidiary operating mainly in Japan. All Other Sales and operating revenue declined 1.2% year-on-year, to ¥442.7 billion. The decrease in sales is due mainly to significantly lower sales in the mobile phone original equipment...

  • Page 38
    ... there is no television at hand. Sales of Handycam® camcorders in fiscal year 2011 totaled 4.4 million units, maintaining Sony's high global market share at 44%. Looking ahead, Sony will continue leveraging its digital imaging technologies to offer customers appealing products that further heighten...

  • Page 39
    .... In addition to fortifying its sales activities in the increasingly competitive PC markets of developed countries, Sony plans to continue addressing the challenge of bolstering its sales in promising emerging economies. With plans to introduce models in fiscal year 2012 that will run on the Windows...

  • Page 40
    ...of expanding the scope of mobile entertainment from music. Head Mounted Displays HMZ-T1 "Personal 3D Viewer" In line with its goal of offering innovative styles for viewing 3D content, in August 2011 Sony announced the launch of the HMZ-T1 "Personal 3D Viewer," the world's first consumer-use device...

  • Page 41
    ...deliver an evolved entertainment experience. In fiscal year 2011, Sony began to shift the focus of its mobile phone business exclusively to smartphones. Smar tphone sales for the period accounted for a 60-percentage point higher share of Sony's total mobile phone sales than in fiscal year 2010, with...

  • Page 42
    Pictures Men in Blackâ„¢ 3 In Men in Blackâ„¢ 3, Agents J (Will Smith) and K (Tommy Lee Jones) are back...in time. J has seen some inexplicable things in his 15 years with the Men in Black, but nothing, not even aliens, perplexes him as much as his wry, reticent partner. But when K's life and the ...

  • Page 43
    ...2012 (RCA Records). Usher has been ranked by the RIAA as one of the best-selling artists in American music histor y, having sold more than 43 million albums worldwide. He has won numerous awards, including seven GRAMMY® Awards, and was recently named the No. 1 Hot 100 artist of the 2000s. Billboard...

  • Page 44
    ... in Japan. Sony Bank has established a low-cost business structure unique to Internet banks. Leveraging the advantages of the Internet, Sony Bank responds to the asset management needs of individual customers with a lineup of highly convenient, high-quality financial products and services, earning...

  • Page 45
    ... section of this report reviews key CSR activities related directly to Sony's business activities and certain other topics of interest to stakeholders. 44 46 48 50 52 54 58 Corporate Governance Compliance Human Resources Responsible Sourcing Quality and Services Environment Community 43

  • Page 46
    ... each of the Corporate Executive Officers is responsible and delegates to them decision-making authority to manage the business, thereby promoting the prompt and efficient management of the Sony Group. Governance Structure Sony Corporation is governed by its Board of Directors, which is appointed...

  • Page 47
    ... Corporate Executive Officer, Executive Vice President Officer in charge of PC Business, Mobile Business and UX, Product Strategy and Creative Platform • Carry out business operations within designated areas, including business units, headquarters functions, and/or research and development...

  • Page 48
    ...Gifts and Entertainment 3-11 Recording and Reporting of Information 4. Ethical Personal Conduct 4-1 Insider Trading 4-2 Personal Conï¬,icts of Interest 4-3 Corporate Assets 4-4 Media Relations and Public Statements Sony Group Code of Conduct and Internal Hotline System In May 2003, Sony adopted the...

  • Page 49
    ... and Personal Information Management Sony has established an Information Security and Privacy organization headed by a Chief Information Security Officer (CISO) reporting directly to a Sony Corporation Corporate Executive Officer. Sony also has established the Sony Global Information Security Policy...

  • Page 50
    ... Global Business Leaders In 2000, Sony established Sony University, an educational program for Sony employees designed to help cultivate global leaders for the Company. In 2012, a branch of Sony University was opened in Singapore. The Singapore campus offers a wide range of development programs...

  • Page 51
    ... survey is utilized for planning human resources measures and making actions to identified issues by giving feedback to management of each organizations. In fiscal year 2011, the response rate for the survey was approximately 90%. To facilitate open communication with employees, Sony holds town hall...

  • Page 52
    ... is committed to fulfilling its responsibility to society as a corporate citizen, including managing its supply chain in a responsible manner. To achieve this goal, Sony is working with its business partners, suppliers and subcontractors to help ensure that they adhere to the same high standards as...

  • Page 53
    ...products) Sony Sales Retail OEM Production standard for management of chemical substances that Sony specifies are certified as "Green Partner." By procuring parts and products only from certified suppliers, Sony realizes consistent chemical substance management globally. Addressing Issues Related...

  • Page 54
    .... Utilizing Customer Feedback Customers Inquiries about purchases Inquiries about use Inquiries about repairs Customer Information Centers Customer Service-related Departments Management • Quality Officers and Customer Service Officers from around the world meet to promote quality-related...

  • Page 55
    ... platforms to communicate frequently and directly with customers. To ensure timely access to easy-to-understand product and service information, Sony works to enhance the content of its websites, which includes information on ways to enjoy Sony products, downloads of manuals and software updates...

  • Page 56
    ...-across all product life cycle stages. To achieve these targets, Sony will leverage its comprehensive global environmental management system, which integrates the Company's corporate headquarters with its business divisions and sites worldwide. In addition, the Group has obtained integrated...

  • Page 57
    .... Beginning with the screen frame component of three BRAVIA™ LCD television models launched in spring 2011, Sony has expanded its category of products using SoRPlas to include 3D Handycam® camcorders and Cyber-shot™ compact digital cameras, among others. * Based on Sony research as of February...

  • Page 58
    ... and deployment of an internal training program for the Company's energy conservation experts. For example, Sony Pictures Entertainment released the film Think Like a Man in 2011, which was the industry's first-ever production filmed entirely with LED lighting. Sony is also aggressively pursuing...

  • Page 59
    ... power per luminance than previous models*. For these projectors, Sony also developed a lamp with a maximum 5,000-hour replacement time, thereby realizing a substantial reduction in resources. * VPL-CW125 BDV-N790W 3D Blu-ray Home Theater System This system employs speakers that use magnetic fluids...

  • Page 60
    ... to the advancement of Sony's business activities. In fiscal year 2011, the Sony Group spent approximately 4.3 billion yen*2 on community engagement initiatives, while a total of 180,000 Sony Group employees*3 participated in a Sony Science Program Science education for children has always been...

  • Page 61
    ... recording binoculars DEV-3 and other products, as well as technological assistance to help spread awareness of the current situation on the island. In April 2012, Sony launched an initiative whereby a portion of the proceeds from sales of digital books sold through its "Reader Store" in Japan...

  • Page 62
    ... event, sales of a charity single and photo book and donations of "Sony Points" by customers in Japan. Activities supported by the fund include a Sony Science Program designed to support children at a number of earthquake-affected schools. The fund has also supported a digital photography project...

  • Page 63
    Financial Section 62 63 64 66 Five-Year Summary of Selected Financial Data Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Cash Flows 61

  • Page 64
    ...Research and development costs ...AT YEAR-END Net working capital (deficit)** ...Long-term debt ...Sony Corporation's stockholders' equity ...Common stock...Total assets** ...Number of shares issued at fiscal year-end (thousands of shares of common stock) ...Sony Corporation's stockholders' equity...

  • Page 65
    Consolidated Statements of Income Sony Corporation and Consolidated Subsidiaries Years ended March 31 Yen in millions 2010 2011 2012 Sales and operating revenue: Net sales ...Financial services revenue ...Other operating revenue ...Costs and expenses: Cost of sales ...Selling, general and ...

  • Page 66
    ... Balance Sheets Sony Corporation and Consolidated Subsidiaries As of March 31 Yen in millions 2011 2012 ASSETS Current assets: Cash and cash equivalents ...Marketable securities ...Notes and accounts receivable, trade ...Allowance for doubtful accounts and sales returns ...Inventories ...Other...

  • Page 67
    ... income taxes ...Future insurance policy benefits and other ...Policyholders' account in the life insurance business ...Other** ...Total liabilities** ...Redeemable noncontrolling interest ...EQUITY Sony Corporation's stockholders' equity: Common stock, no par value- 2011-Shares authorized 3,600,000...

  • Page 68
    ...notes and accounts payable, trade ...Increase (decrease) in accrued income and other taxes** ...Increase in future insurance policy benefits and other ...Increase in deferred insurance acquisition costs ...Increase in marketable securities held in the financial services business for trading purposes...

  • Page 69
    ... 2010 2011 2012 Cash flows from investing activities: Payments for purchases of fixed assets ...Proceeds from sales of fixed assets ...Payments for investments and advances by financial services business Payments for investments and advances (other than financial services business)...Proceeds...

  • Page 70
    ... of daily closing prices for each day of every month on the Tokyo Stock Exchange. Years ended March 31 2008 2009 2010 2011 2012 Stock price (Yen) At year-end ...High ...Low ...Annual increase/decrease ...Number of shares outstanding at year-end (Thousands of shares)...Market capitalization at year...

  • Page 71
    ... EC3A 8NP Phone: 44-(0)20-7426-8696 SONY ON THE INTERNET Sony's Investor Relations Home Pages on the World Wide Web offer a wealth of corporate information, including the latest annual report and financial results. http://www.sony.net/IR/ ORDINARY GENERAL MEETING OF SHAREHOLDERS The Ordinary General...

  • Page 72
    Annual Report 2012 Year Ended March 31, 2012 Sony Corporation