Financial Results Presentation
Fiscal Year Ended March 31, 2020
(FYE Mar. 2020)

June 24, 2020

Contents of Today’s Presentation

I. FYE Mar. 2020 Financial Results Summary and FYE Mar. 2021 Financial
Forecast
1.
2.
3.
4.

Consolidated Financial Highlights
Operating Income: YoY Comparison
Financial Results by Segment
FYE Mar. 2021 Forecast

II. Progress on Mid-term Business Strategy & Priority Measures for FYE
Mar. 2021—Focus on the Living with COVID-19 and Post-COVID-19
Environments
1.
2.
3.
4.
5.

Integration to 2021—Disclosed by IMAGICA GROUP in May 2019Market & Social Changes
Promoting Transformation
Progress on Five Key Strategies
Conclusion* The notation for fiscal years in this presentation is abbreviated as follows: Fiscal year ended March 31, 2020 → FYE Mar. 2020

2I.

FYE Mar. 2020 Financial Results Summary
and FYE Mar. 2021 Financial Forecast

3I. FYE Mar. 2020 Financial Results Summary and FYE Mar. 2021 Financial Forecast

1. Consolidated Financial Highlights• Net sales, operating income and net income (loss) attributable to owners of the parent all
recorded substantial YoY growth.
(Millions of yen)

Net sales

94,090

million yen

YoY+3,878 million yen (+4.3%)

90,212

Net income (loss)
attributable to ownersof the parent

Operatingincome1,351

million yen

YoY+425 million yen (+45.9%)

94,090664

YoY+2,674 million yen

664

1,351
+3,878(+4.3%)

926

million yen+425(+45.9%)+2,674-2,010FYE Mar. 2019 FYE Mar. 2020

FYE Mar. 2019 FYE Mar. 2020

FYE Mar. 2019 FYE Mar. 2020

4

I. FYE Mar. 2020 Financial Results Summary and FYE Mar. 2021 Financial Forecast

2. Operating Income: YoY Comparison• Operating income increased overall as the reduction in the operating loss in Media Localizationand profit increase in Imaging Systems & Solutions covered for the decline in operating income inContent Creation and Production Services.

(Millions of yen)

-232

1,351

817

+425

926
-402
489
-245

FYE Mar. 2019
Full-year results

Content
Creation

Production
Services

Media
Localization

Imaging Systems Consolidated FYE Mar. 2020
& Solutions
adjustments Full-year results

5I. FYE Mar. 2020 Financial Results Summary and FYE Mar. 2021 Financial Forecast

3. Financial Results by Segment

FYE Mar. 2019
Net sales
Operating income

Content Creation

Imaging Systems& Solutions
Consolidated
adjustments
Total
Consolidated

YoY

% YoY

23,42926,205

2,776

11.8%

 Net sales increased due to the expanded
scale and increased number of feature film
productions, and an increase in the numberof TV commercials and live-music
performance recordings.
 A valuation loss on investment in production
committees for feature film production
resulted in an operating loss.

(3.5%)

 Performance was strong in E2E services andpost-production services for feature films andanime.
 Post-production cost control efforts mitigatedthe decline in profit.
 Human talent services saw a decline in bothsales and profit.

(9.1%)

 Changes in production structure to optimize
fixed costs and orders for high-margin
production projects reduced the operatingloss.
 The sale of two consolidated subsidiaries
caused a decline in net sales.
 Orders for localization of TV programs (inEurope) were sluggish.

28.9%

 Both video systems (major projects forbroadcasting stations, online delivery systemfor commercials, etc.) and imaging (highspeed camera, etc.) saw growth in net sales
and operating income.

43

(359)

(402)

27,529677

26,557431(2.5%)(1.6%)

24,916(1,257)

22,660(768)(---%)(---%)

15,946

20,551

Operating income

1,896

2,714

(Operating margin)(11.9%)(13.2%)

Adjustment tooperating income

(433)

(666)

(232)

90,212926

94,090
1,351

3,878
425

(1.0%)(1.4%)

Operating income(Operating margin)

Net sales

Media
Localization

Actual(---%)Net sales

Operating income(Operating margin)

Net sales

Net sales
Operating income(Operating margin)

Summary

Actual

(0.2%)(Operating margin)

Production
ServicesFYE Mar. 2020

(972)
(245)

(2,256)
489

4,605
817

4.3%
45.9%
6

I. FYE Mar. 2020 Financial Results Summary and FYE Mar. 2021 Financial Forecast

4. FYE Mar. 2021 Forecast

IMAGICA GROUP businesses suffered the following impacts from the spread of
the novel coronavirus (COVID-19):• Suspension of some TV commercial projects• Delayed delivery of productions due to postponement of theater releases inJapan and overseas• Postponement of post-production and localization services
The Declaration of a State of Emergency has been rescinded in all areas ofJapan, but we think it will take some time for economic activity to return to theprevious level.
The financial forecast for the fiscal year ending March 2021 has not yet been
determined because the impact from the spread of the novel coronavirus
makes it difficult to calculate a reasonable forecast.
The financial forecast will be disclosed once it becomes possible to calculate it.

7II. Progress on Mid-term Business Strategy & Priority Measures
for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments8II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

1. Integration to 2021—Disclosed by IMAGICA GROUP in May 2019

We have developed a new mid-term business strategy“Integration to 2021”
based on our business challenges and opportunities
We will accelerate the Group’s structural reform and build a well-balanced businessportfolio with the five key strategies below:

Key Strategies

1. Develop a new global strategy
2. Improve profitability of existing
businesses
3. Transition to a new business model

A business portfolio thatprovides both growthand profitability

4. Create and develop new businesses
5. Develop human resources andpromote workstyle reform9II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

2. Market & Social Changes

Changing Market
Environment
Avoiding the three closeconditions
Minimizing contact and faceto-face communication as
much as possible•

Promoting communicationthat uses telecommunications
technology

Promote business
transformation

Showing films with limited
seating
Holding live sports eventswith restrictions•

Expansion in demand forvideo streaming
Events planned without
spectators

Propose new ways
to provide
entertainment•

Revise the production
structure(filming location & postproduction)•

Remote production
environment and workflow•

Restrictions on commuting
to work, meeting clients,
going to kindergarten andschool, and other types of
movement and congregation•

Recommendation to work
remotely
Promotion of online
education, telemedicine, etc.

•

Social challenges••

Entertainment

Consumption•

Production

Socialenvironment

Expanding Needs••

Innovate in thevideo production
processes

Utilize imaging in
the industrial world10II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

3. Promoting Transformation

Accelerating “Integration to 2021”

Key Strategies

Promoting Business Transformation

1. Develop a new global strategy

Propose new ways to provide
entertainment

2. Improve profitability of existing
businesses

Create new visual and user experiences throughthe latest technologies.

3. Transition to a new business
model

Innovate in the video production processes

4. Create and develop new
businesses
5. Develop human resources andpromote workstyle reform

Create a production flow via remote work andcontactless work.

Utilize imaging in the industrial world
Support remote environments for educationand healthcare services.
Expand business domain in the testing device
and telecommunication technologies.
11II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

1. Develop a new global strategy

4. Progress on Five Key Strategies

Global Expansion of E2E Services⃝ Establish global one-stop service.
⃝ Expand and shift service domains.
⃝ Improve operating efficiency.

Overseas clients

Major
studios

OTT
providersBusiness alliance

Domesticclients

Joint proposal of E2E

IMAGICA SDI Studio commenced
operations(February 17, 2020)

Direct localization orders* E2E (End-to-End) Service:
Integrated services encompassing localization (subtitling, dubbing) and distribution provided after the original production ofa feature film, etc. is completed

12II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

4. Progress on Five Key Strategies

2. Improve profitability of existing businesses

Anime
production⃝ Developed a stable production structure by obtaining multiple orders for long-term
projects.
⃝ Began direct transactions with major studios overseas.
Innovate in the
video
production⃝ Strictly managed production project costs.
processes⃝ Promoted offshore production in Malaysia.

Commercial& filmproduction⃝ Strictly managed production project costs and strengthened the cost management
system.
⃝ Tightened the standards for managing production projects invested in. Innovate in thevideo production⃝ Strengthened relationships with OTT providers.
processes⃝ Produced and released short films via a completely remote process.

Post-production

Human talentsolutions⃝ Revised the work process and shortened working hours throughautomation.
⃝ Pursued working remotely.
⃝ Expanded E2E services through alliances with overseas affiliates.

Innovate in thevideo production
processes⃝ Improved debugging (particularly games)→ Opened new office in Niigata prefecture (March 2020).
⃝ Novel coronavirus increased the demand for IT engineers→ Shonan Hi-tech Planning Co.,Ltd joined the Group (June 2020).
⃝ Strengthened dispatch of human talent to clients that are pursuing DX.
13

II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

4. Progress on Five Key Strategies

1

3. Transition to a new business model

Secure & use IP to expand business

Propose new ways toprovide entertainment⃝ Shufunotomo Infos Co., LTD. joined the Group•••“Kusuriya no Hitorigoto” : Sold 6 million copies in total“Restaurant to Another World” made into a comic and anime
Pursued expansion of media asset based on light novels andvoice actors

Expand to multiple
media channels⃝ “Bullbuster”, original robot project planned and produced by
P.I.C.S. made into a novel•

Volume 1 & 2 is on sale from KADOKAWA.

©P.I.C.S.
14

II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

3. Transition to a new business model

4. Progress on Five Key Strategies

2

Innovate in the video
production processes

Innovate in the video production processes (1)⃝ Provide all production processes on the cloud••

Make progress in the platform business concept.
Expand number of cloud services supporting media production anddistribution processes.

NEW
NEW

PharosIntegrated management of media
materials & other data

Image & video file management
Cloud storage

Automated transcription

NEW

PhotronLive Cloud Service
Remote editing & preview function

Production
management

Distribution
supportSecure, high-speed
image transmission
service

Cloud platform

15

II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

4. Progress on Five Key Strategies

2

3. Transition to a new business model

Innovate in the video production processes (2)Innovate in the video
production processes⃝ Transition to a new business model•

Move away from the conventional business model through active use of cloud systems.

Conventional
business model

System sales

Switch to a subscription
New
formatbusiness model

Operation in an
crowded environment
such as an editing
studioArchiving on media

Improve efficiency
through automationof remote production

Implement
remote editingof cloud archive16

II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

3. Transition to a new business model

4. Progress on Five Key Strategies

3

Utilize imaging in theindustrial world

Taking on challenges in the imaging systems area

⃝ Transition to new business models in the areas of education and healthcare•

Supporting remote education sites required by under the “new normal” environment

Record class at home
Educational video
sharing platform

Uploads content

Teacher

ViewerDesktop recorder
Manager•• Uploads video• Sets viewing
permissions• Analyzes viewing
history• Edits video• Tests• Surveys

Cloud support in the healthcare environment: Study session videos, explanatory videos for
medical devices, etc. used by healthcare providers
Cloud platform (data center in Japan)

Distribution
for viewing

Classroom
Recording

SINET 5
Video viewing
deviceClosedconnection

Recording & video
streaming
Communication for
management

IP camera

IP converter

Device formanagement

Communication
for maintenance17II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

4. Progress on Five Key Strategies

1

4. Create and develop new businesses

Expand the live entertainment business

Propose new ways toprovide entertainment⃝ Established IMAGICA EEX, a new entertainment technology company (July 3, 2020)
Created opportunities for new visual experiences in the “new normal” environment by fusing
creativity and technology.

IMAGICA GROUP will create completely new forms of entertainment that provide innovative visualexpression, space design, and real event experiences that overcome the limitations of distance, as
we have in the VISIONS initiative we have been pursuing.
Illustrative Example：”VISIONS”* Entertainment Technology:
Refers to the use of life viewing, 5G, video streaming, AR/VR, and other state-of-the-art technologies to provide a moreenjoyable entertainment experience and new innovations in technology or the entire business.
18II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

4. Progress on Five Key Strategies2

4. Create and develop new businesses
Utilize imaging in theindustrial world

Expand Imaging Systems & Solutions areas

Existing areas
High-speed camera
Polarization camera
6D-MARKER

Expand areas of use
Measurement■ FA area

Integration

High-speed monitoring
systemExpand productareas

Analysis

Control■ Vehicle inspection area
• Collision safety performance
testing• Visualization of combustion

Use IoT & AI
■ Optical
measurement area
• Optical film inspection

FASTCAM MH6

Fine tune to the needsof the new area
E.g.:
Ultra compact pencilshaped camera head, highspeed camera equippedwith wireless capability

3

Polarizationinterferometer

Create new businesses via M&A⃝ Continue to search for M&A business opportunities that will contribute to acceleration ofGroup structural reforms.

19

II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

5. Develop human resources and promote workstyle reform

4. Progress on Five Key Strategies

1

Develop human resources⃝ launched training program for the managers who will lead the Group.
• Managers in 5 years:• Managers in 10 years:

Business management preparatory course
Next-generation manager training⃝ Launched programs for global human resource.
• Training for global leader :• Training for basic skills:

2

Next-generation global leader training program
Global mindset training

Workstyle reform⃝ Changing mindsets and improving productivity.
• Changing mindsets:• Improving productivity:

Created concepts and rules that are not encumbered bytraditional work styles.
Further improved employee work-life balance while
simultaneously improving work efficiency.

⃝ Pursuing digital transformation• Improved workflow efficiency through remote production.
• Diversified workstyles through telecommuting, online meetings, etc.

Innovate in the video
production processes
20II. Progress on Mid-term Business Strategy & Priority Measures for FYE Mar. 2021
—Focus on the Living with COVID-19 and Post-COVID-19 Environments

5. Conclusion

Invest in the future, curb unnecessary and non-urgent investment,
and make steady progress toward realizing “Integration to 2021.”
Key Strategies-Areas of investmentin the future-

Priority Measures
in FYE Mar. 2021
Develop a new global strategy

1. Develop a new global strategy
2. Improve profitability of existing
businesses
3. Transition to a new businessmodel
4. Create and develop new
businesses
5. Develop human resources andpromote workstyle reform• Expand global E2E services.

Propose new ways
to provide entertainment• Secure & use IP to expand business.
• Expand the live entertainment business.

Innovate in the video production
processes• Put the entire production process on thecloud.
• Improve productivity through workstyleinnovation.

Utilize imaging
in the industrial world• Expand Imaging Systems & Solutions
business areas.
• Provide cloud support in the areas ofeducation and healthcare.
21

Contact for inquiries:
IMAGICA GROUP Inc.
Corporate Management Department
11th Floor, Uchisaiwaicho Tokyu Building
1-3-2 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011, Japan
TEL: +81-3-6741-5742

FAX: +81-3-6741-5752

Email: ir@imagicagroup.co.jp
URL: https://www.imagicagroup.co.jp/en/

DISCLAIMER:
The forward-looking statements for the current and future business periods described in this document areformulated based on the plans and prospects of the Group as of the date on which these materials were disclosed.
Actual performance may differ from numerical forecasts due to the uncertainties inherent in the judgments andassumptions made, as well as possibility of future changes that may occur in business management and internaland external circumstances.

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