Sony Group Corp

Ladies and gentlemen, thank you for joining us today despite short notice. We would like to start the press conference for the announcement of changes to Sony Group's management structure. And today I will be the master of ceremony. My name is Ishii from Corporate Communication Department. Nice to meet you. Now I would like to introduce to you who are on the stage. Mr. Keicho Yoshida, currently Director, Representative, Corporate Executive Officer, Chairman, President-in-Chief, Executive Officer, who will assume Director, Representative, Corporate Executive Officer, Chairman, CEO, as of April 1st this year. and Mr. Hiroki Totoki, Director, Representative, Corporate Executive Officer, Executive Deputy President, and Chief Financial Officer, who will become Director, Representative, Corporate Executive Officer, President, Chief Operating Officer, and Chief Financial Officer. The speeches will be made in the order of Mr. Yoshida and then Mr. Totoki, and we'll take questions afterwards. After the Q&A session, we will have about five minutes for photo session. Overall, we plan to have about 40 minutes for this press conference and then followed by the briefing on the Q3 result. Mr. Yoshida, please take the podium.

Thank you all for coming today despite the short notice. I would like to explain the executive changes announced today. Effective on April 1st, Hiroki Totoki, currently Executive Deputy President and CFO, will be appointed President, COO, and CFO, and I will become Chairman and CEO. These changes are intended to strengthen our group management structure. From April onwards, we will strive for the further evolution and growth of Sony under this new management structure. First, I'd like to touch on the background of these management changes. Sony is engaged in diverse businesses based on our purpose to fill the world with emotion through the power of creativity and technology. Furthermore, in April 2021, we transitioned to a new group architecture and established Sony Group Corporation, which is aligned with all our businesses in an equidistant manner. Our approach to business management is one where the vectors of each business are connected by the social significance of creating and delivering of kando, but also emphasizes the autonomy of individual businesses organizations and employees. On the other hand, in order to enhance the group's overall values over long-term perspectives, it's vital thoroughly implement capital allocation, collaboration between businesses and business portfolio management. And to do this, I concluded that we should strengthen our management structure and proposed to the Nominating Committee and the Board of Directors to promote Mr. Totoki, who has deep understanding of each business operation, to President and appoint him as COO. This proposal was approved today. He will also continue as CFO. This is because the CFO also needs to have a deep understanding of the business, and we believe that this role is closely related to the duties of the COO. For approximately five years since I became CEO in April 2018, he has been a driving force in the implementation of growth strategy for the group, particularly from a financial perspective in his role as CFO. His greatest contribution has been in supporting our investment for growth, primarily in two major areas. One is content IP. While we have made acquisitions in the DTC domain, such as anime distribution company Crunchyroll, we have focused particularly on strengthening content IP. This started from the acquisition of EMI Music Publications in May 2018, just after I was appointed CEO. He led this acquisition, including the negotiation of terms. The other is semiconductors. I regard CMOS image sensors as creation semiconductors that generate candle. He supported our investment in this area while managing risks through in-depth discussions with the business side regarding demand, the competitive environment, and the development roadmaps. His other contributions included setting the ¥2 trillion framework for strategic investment in the current mid-range plan. This investment framework established by him has led to an improvement in the growth mindset of the entire group. Furthermore, there is also the repurchase of our shares, which we have positioned as a part of our strategic investment. While constantly taking investment opportunities and financial conditions into account, we have supported the repurchase of approximately 500 billion yen of Sony shares since fiscal 2018. I have worked with Mr. Totoki since 2005 when I became president of SONNET. I have also learned quite a lot from him with his strategic perspectives encompassing the broader external environment. Furthermore, he has the experience of planning and founding Sony Bank himself and operating it as a representative director. He has accumulated a wide range of experience, including directly leading a large organization as the head of Sony Mobile for more than three years, starting in 2014. Going forward, I am confident that he will make an even greater contribution to enhancing our corporate values as President, COO, and CFO. As part of efforts to strengthen our management structure, we have also decided to appoint Toshimoto Mitomo as the Executive Deputy President and CSO. Mr. Mitomo possesses extensive experience in the intellectual property field, technological expertise, and strategic perspectives. Most recently, he has overseen areas including new business development and corporate venture capital, and is leading discussions across the group in areas such as virtual production and metaverse. At Sony, we operate our business in the Kando value chain of creating and delivering Kando, and he helps an important role in expanding and deepening the scope of this business. I look forward to Mr. Mitomo in collaboration with Hiroaki Kitano, who was appointed CTO last year, further contributing to Sony's evolution as a creative entertainment company with a solid foundation of technologies. Sony's purpose is to fill the world with emotion, and its corporate direction of getting closer to people will remain unchanged. 110,000 employees who share this purpose are driving force of the Sony Group's diverse businesses. The management team will work together as one, along with our employees, to create values from a long-term perspective based on our purpose. That is all from me. Thank you.

Next. I'd like to invite Mr. Totoki. I am Hiroki Totoki, and will be assuming the role of President, COO, and CFO of Sony Group. Thank you for your attendance. I'm grateful to Mr. Yoshida and the Board of Directors for their trust in recommending and appointing me, and at the same time, feel a great sense of responsibility. To introduce myself, I joined Sony in 1987, and after working in finance, including an overseas assignment in London, I left Sony in 2002 to take on the role of representative director of Sony Bank, a company that I led in establishing. While it was on a small scale, the experience of launching and managing a new business with a spirit of startup formed the foundations of my current value perspectives in management. Then, in 2005, I moved to our ISP business, Sonet, where I took on a wide range of roles, including CFO under Mr. Yoshida's leadership. In December 2013, I returned to Sony and following roles, including CEO of Sony Mobile and Corporate Executive Officer and CSO of Sony, I was appointed to my current position of CFO in 2018 when Mr. Yoshida became CEO of Sony. Since then, as a member of the management team led by Mr. Yoshida, I have dedicated myself to enhancing the corporate value of the Sony Group. This fiscal year is the second year of our current fourth mid-range plan. Thanks to the efforts of management at each of our businesses and from each and every employee, we are focusing strong results this fiscal year, including record sales and more than 1 trillion yen in operating income. On the other hand, looking at our current business environment, there is increasing instability due to factors such as the uncertain global economic outlook, geopolitical risks, energy issues, and the natural environment. In addition, I feel an acute sense of urgency that there is a fine line between whether we can channel the rapid evolution of technology with AI as a leading example into further business growth, or conversely, whether our business will be disrupted by it. As a business environment and technology continues to undergo great change, I believe the key to increasing The resilience of the overall Sony group is evolving our diversity. Diversity in our business and talent is part of Sony's DNA, but we must further evolve this diversity. Our goal is to bring together people with various attributes, experience, and expertise from inside and outside the company to co-create the future by unleashing their ideas and creativity and to continue to grow both as individuals and as a company. by leveraging the Sony Group's diversity and continuing to evolve and grow. I would like to create a positive spiral that begins with Sony being chosen by customers, which then energizes our employees, enables us to attract more new talent, increases our corporate value, and ultimately enables us to give back to society. Working together with Mr. Yoshida, the Sony Group's management team, and our employees around the world, I intend to continue to develop through my efforts to the Further evolution and growth of our business based upon our purpose. I look forward to your continued support.