May 22, 2018 - Mobile Communications Segment. Sony Corporation Investor Relations. Sony IR Day 2018. 1. Imaging Products
Sony IR Day 2018 Imaging Products & Solutions Segment Mobile Communications Segment May 22, 2018
Shigeki Ishizuka Corporate Executive Officer, Executive Vice President, Officer in charge of Imaging Products & Solutions Business/Mobile Communications Business Sony Corporation Representative Director and President Sony Imaging Products & Solutions Inc.
Imaging Products & Solutions Segment Mobile Communications Segment
Introduction
Shigeki Ishizuka Corporate Executive Officer, Executive Vice President, Sony Corporation Imaging Products & Solutions Segment
Mobile Communications Segment
Sony Imaging Products & Solutions Inc.
Sony Mobile Communications Inc.
Shigeki Ishizuka Representative Director and President
Mitsuya Kishida Representative Director and President
Toru Katsumoto Hiroshi Kawano Representative Director and Deputy President
Sony Network Communications Inc. Hirokazu Takagaki President and Representative Director
Sony IR Day 2018
Imaging Products & Solutions Segment Mobile Communications Segment
Agenda
1.
Imaging Products & Solutions Segment
Ishizuka
2.
Mobile Communications Segment
Ishizuka/Kishida
3.
Reference Materials
Sony IR Day 2018
1. Imaging Products & Solutions Segment
Sony IR Relations Day 2018 Sony Corporation Investor
Imaging Products & Solutions Segment
Organization: Sony Imaging Products & Solutions Inc. Digital Imaging Group
Media
ILC
Lens
Cinema
Visual Simulation
Professional Products Group
Camcorder
FeliCa Business Division
Peripheral Medical Devices
Education Sports
DSC
Medical Business Group
Professional Solutions and Services Group
Network Camera
Broadcasting Professional System Camcorder
Life Science
Display
Surgical Imaging Devices
Imaging Platform: Light to Display Light Source
Lens
Image Processingg
Image Sensor
IP Transmission
Display
Sony IR Day 2018
Imaging Products & Solutions Segment
FY2017 Review
(bln yen)
FY2017 Operating Income (vs FY2016)
Sales
655.9
579.6
Operating Income 47.3
74.9
+27.7
Positive factors 1
Forex impact
2
Recovery from the Kumamoto Earthquakes (insurance income, sales recovery)
3
Increased value-added (shift to higher valueadded models)
Increased Value-Added
Forex Impact
OPEX
Recovery from the Earthquakes
Negative factors 4
Increase in OPEX(due to increase in sales) FY16
Factor
Factor
Factor
1
2
3
Factor
FY17
4
Sales and operating income increased significantly due to the recovery from the Kumamoto Earthquakes and the impact of forex
Digital Imaging: continued shift to higher value-added, especially in the interchangeable lens camera space Professional Solutions: new solutions service business offset by decrease in existing business sales Sony IR Day 2018
Imaging Products & Solutions Segment
FY2018 Forecast
(bln yen)
FY2018 Operating Income (vs FY2017) Red: negative factor
Sales
655.9
Operating Income
74.9
660
75
+0.1
Blue: positive factor 1
Forex impact
2
Improvement in value-added (shift to higher value-added models)
FY17
Forex impact
Improvement in Value-Added
Factor
Factor
1
FY18
2
April forecast
Sony IR Day 2018
Mid-Range Plan: Management Policy
Imaging Products & Solutions Segment
Business Foundation ・ Sony brand(B2B&C)
Strengthen products & services under the SONY brand
Sony Brand(B2B&C)
・ Customerʼs Real-Time Benefit Create customer value with “time”
・ Differentiation by L2D* technology Competitive advantage derived edge from in-house production technology
+
SIPS Strength
Quantitative Target Operating Income Margin: 10% or More * L2D: Light to Display
Differentiation by L2D Technology
Customer Real-Time Benefit
Sony IR Day 2018
Imaging Products & Solutions Segment
Mid-Range Plan: Business Strategy
Strengthen and grow the Solutions Business by delivering Real-Time Benefit Solutions Products
*1
Create strong products based on our differentiated L2D technology
Tech nology PF
Light Source
*1 L2D: Light to Display
Lens
Image Sensor
Image Processing
IP Transmission
Display
*2 PF: Platform
FY2020 Financial Targets
Operating Income:
Sony IR Day 2018
Imaging Products & Solutions Segment
85~105 billion yen ※ Sales Amount (For Reference): 700 billion yen
Maximize profit growth and enterprise value Create strong and differentiated products based on L2D technology, deliver Real-Time Benefit, and strengthen and grow the solutions business
Sony IR Day 2018
Digital Imaging Business: Mid-Range Initiatives
Imaging Products & Solutions Segment
Win in an increasingly competitive market and continue to generate high profit Initiatives
Industry Trends
Revitalization of the mirrorless camera market
Competitors becoming more aggressive in the market
Basic
Resolution
Aim to be the top brand in the overall camera market
Strengthen products, especially in the interchangeable lens camera space
Engage the professional market
Expand the lens business
Speed
Expand Lens Lineup
“Camera of the Year” Camera Grand Prix 2018
Expand Pro-Support Worldwide
Sony IR Day 2018
Imaging Products & Solutions Segment
Professional Solutions Business: Sales by Business Media
Sports
B2B Education, theater, visual simulation, etc
Services & Solutions
Broadcasting System
Professional Camcorder Display Network Camera
Sony IR Day 2018
Professional Solutions Business: Mid-Range Growth Targets
Imaging Products & Solutions Segment
enhance solutions that deliver Real-Time Benefit ・ Real-time solutions that leverage IP & cloud ・ Expand in the sports and B2B arena ・ Develop 5G solutions
Sales
enhance differentiation and rebuild a stable profit structure ◆
OP Margin
◆
FY17 Actual
・ Develop products which use our L2D technology ・ Reduce fixed costs in existing businesses
FY20 Target
■︓Product Sales ■︓Solutions Sales ◆︓Professional Solutions Business OP Margin
8K System Camera “UHC-8300”
Full Size Cinema Camera CineAlta “VENICE”
Proprietary Micro LED Crystal LED Sony IR Day 2018
Professional Solutions Business: Mid-Range Initiatives Industry Changes and Understanding of Challenges
Action Plan
■ Changes in the media industry - Rise of the OTT market, industry consolidation and greater reliance on IP and the cloud ⇒ Greater demand for cost reduction and efficiency - Full-scale demand for 4K and 8K (Start of satellite and IPTV 4K broadcasting) - Coming 5G era
■ Growing new market for B2B ■ Improving profitability Remote Integration “REMI” Control Room
Stadium
Imaging Products & Solutions Segment
- Develop 4K & IP products and solutions - Develop technology for the 5G era - Pursue the sports and education markets - Revise our product and business portfolio so as to better adapt to changes in the industry - Continuous cost reduction and operational transformation Learnings Solution “Vision Exchange”
Data Center
Network
Examples of Solutions Businesses
Sony IR Day 2018
Imaging Products & Solutions Segment
Medical Business: Mid-Range Strategy
Profit Margin Life Science Business
Surgical Imaging Device Business Monitor
IP Converter
Printer
(For Research and Clinical)
Peripheral Medical Device Business Transition from single-device business to high value-added business
4K Surgical Endoscope System Surgical Microscope with 4K 3D Capabilities
Operating Income:
Time
Life Science Business (Research)
SOMED & Solutions Business
FY2020 Financial Targets
Transition from research device business to medical device business
Cell Analyzer
Cell Sorter Sony IR Day 2018
Imaging Products & Solutions Segment
85~105 billion yen ※ Sales Amount (For Reference): 700 billion yen
Maximize profit growth and enterprise value Create strong and differentiated products based on L2D technology, deliver Real-Time Benefit, and strengthen and grow the solutions business
Sony IR Day 2018
2. Mobile Communications Segment
Sony IR Relations Day 2018 Sony Corporation Investor
FY2017 Overview
1 Smartphone unit sales decrease (FY16 14.6M → FY17 13.5M units)
Mobile Communications Segment
FY16 Actual
FY17 Actual
Sales
759.1
723.7
Operating Income
10.2
3.7
-6.5
(bln yen)
-27.6
(excluding impairment)
2 Sharp increase in component costs 3 Negative impact of foreign exchange rates 4 Improvements in operational efficiency 5 Impairment 1
2
3
4
5
Operating loss recorded due to impairment charge Negative impact of unit sales decrease and sharp increase in component costs were offset by cost reductions; full-year profit was recorded on an operational basis Sony IR Day 2018
FY2018 Operating Results Forecast
Mobile Communications Segment
FY18 April Forecast
Sales
723.7
640
Operating Income
-27.6
1 Impairment 2 Smartphone unit sales decrease
(bln yen)
FY17 Actual
+12.6
-15
(FY16: 13.5M → FY17 FCT: 10.0M units)
3 Positive impact of foreign exchange rates 4 Improvements in operational efficiency
2
1
3
4
Year-on-year profitability improvement by shifting away from less profitable models and engaging in continuous operating expense reductions Sony IR Day 2018
Recurring Revenue Business: Stable Profit Structure & Next Steps
Mobile Communications Segment
Mid-Term Vision
Going beyond being just an internet service provider Fixed Line Communication Business: Cumulative Subscribers SmartHome
Transportation
Healthcare
CAGR 7% Cloud Devices FY14
• •
FY15
FY16
LPWA※
Deep Learning
Technology
FY17
Network quality improvements driving customer satisfaction Deploying NURO services to more regions
Call Centers
Data Centers
*LPWA: Low Power Wide Area
Network Sony IR Day 2018
Smartphone Business: Review (Accomplishments)
Operating Expenses
(billion yen) Forecast from FY15
Mobile Communications Segment
Warranty-Related Costs
Actual -58% (150 using FY16 FX rates)
Accelerated reduction through continuous pursuit of further efficiencies
Significant reductions through quality improvements Sony IR Day 2018
Smartphone Business: Review (Outstanding Issues)
Mobile Communications Segment
Unit Sales (million units) Forecast from FY15 Actual
Issue: not improving product lineup fast enough ⁻ Mid-term product planning and development ⁻ Design and development lead time
Sony IR Day 2018
Smartphone Business: Business Direction
Mobile Communications Segment
Mid-Term Vision
Creating New Value to Customers for the 5G Era FY2018 Business Direction
Lean Transformation for Future Growth
Product
Manufacturing, Procurement, Operations
Sales
Add to strength and efficiency by leveraging the assets, business knowhow and infrastructure of the Sony Group
Reduce operating expenses & lower break-even point Sony IR Day 2018
Smartphone Business: Key Issues
Mobile Communications Segment
Enhance Product Offerings: Fully Utilize Sonyʼs Technological Assets
Design
Audio
Camera
Display
Lens
Sensing
Wireless Data Transmission
Battery
Mechatronics
Product Development Process: Rebuild and Improve Efficiency
Sony IR Day 2018
Strategic Direction for the 5G Era
Mobile Communications Segment
Sony IR Day 2018
Smartphone Business: Business Direction
Mobile Communications Segment
Mid-Term Vision
Creating New Value to Customers for the 5G Era FY2018 Business Direction
Lean Transformation for Future Growth
Product
Sales
Manufacturing, Procurement, Operations
Add to strength and efficiency by leveraging the assets, business knowhow and infrastructure of the Sony Group
Reduce operating expenses & lower break-even point Sony IR Day 2018
Smartphone Business: Sales & Operation Enhancements
Mobile Communications Segment
Manufacturing, Procurement, Operations
Sales Project Europe
Manufacturing
Strategic partnerships with operators while bolstering open channel sales
Higher efficiency realized by automated line introduction Service evolution through quality improvement
Procurement
Key Actions
• Technological collaboration including 5G launch • Realize efficiencies through the integration of Sonyʼs electronics sales operations • Enrich product lineup through entertainment propositions
Create long-term partnerships as “One Sony”
Logistics
Utilize Sonyʼs global network Accelerate blockchain initiatives Sony IR Day 2018
Smartphone Business: Operating Expenses & Break-Even point
Mobile Communications Segment
Transformation into a Lean Business OPEX
Rebuild product development process and significantly improve efficiency -30%
Leverage Sony Group business know-how and infrastructure to bolster design, manufacturing, sales and operations
Sony IR Day 2018
MC Segment: Summary
FY2020 Target:
Mobile Communications Segment
OP: 20~30 billion yen
Sales Level: 670 billion yen (reference only)
Recurring Revenue Business:
Realizing solid growth by leveraging stable customer base
Smartphone Business:
Create a lean, agile business without an excessive focus on revenue and units sold Build a sustainable business structure through ʻOne Sonyʼ initiatives Steadily implement initiatives to bolster and prepare for the future
Creating New Value to Customers for the 5G Era Sony IR Day 2018
Imaging Products & Solutions Segment
Reference Materials
Sony IR Day 2018
IP&S Sales by Business Category and Geographic Area FY2017 Sales by Business Category
Imaging Products & Solutions Segment
FY2017 Sales by Geographic Area Other
Medical Asia
Digital Imaging
Sales 650 bln yen Still and Video Cameras
Japan
Other
China
Sales 650 bln yen U.S.
Professional
Europe
Sony IR Day 2018
Imaging Products & Solutions Segment
IP&S Key Product Market Share (Revenue Basis) FY2017 Still Camera Market
FY2017 Video Camera Market
Market Size: 1,400 bln yen
Market Size: 390 bln yen
Sony
ソニーシェア Sony
20%
ILC (Incl. Lens): 19% (#3) (#1 in Mirrorless Camera)
DSC: 26% (#2)
(#1 in Premium DSC*1)
Source: Sony
29% 29%
Components of Video Camera Pie Chart Video cameras for consumer (POV + Conventional)
Video cameras for business (Pro-sumer + Professional)
*1 Premium DSC = DSC with large (1/1.7 inch and over) image sensors or high zoom (20x and over)
Sony IR Day 2018