Financial Results Presentation
Second Quarter of the fiscal year ending March 31, 2024
(2Q FY2023)

IMAGICA GROUP Inc.
Securities Code: 6879
November 2, 2023

Contents of Today’s Presentation

Ⅰ Financial Results Summary for 2Q FY2023
Ⅱ Progress of the Mid-Term Plan “G-EST2025”
Nobuo Fuse, Representative Director, President

G-EST means: From five key strategies
G： The “4 Gs,” Growth, Global, Game, and Group
E： E2E and Live Entertainment (global E2E business, live entertainment business)
S： System (Imaging Systems & Solutions business)
T： Transformation (Transformation business)* Fiscal years in this presentation are abbreviated as follows: Fiscal year ending March 31, 2024 → FY2023

2

Highlights of Financial Results
Sales increased for two consecutive years. Operating income decreased due to fixed cost
increase in Production Technology Services (Overseas) by growth investment.

(Million Yen)

Net sales

Operating income
before goodwill andother amortization

OperatingincomeNet income attributable toownersof the parent

46,686

1,918

967

700

YoY
+5,096 (+12.3%)

YoY－371 (－16.2％)

YoY－444 (－31.5％)

YoY－99 (－12.4%)

46,686
41,58933,846

2,289

1,918
1,694
1,411

1,274

967

799

700

431

1H FY2021

1H FY2022

1H FY2023

1H FY2021

1H FY2022

1H FY2023

1H FY2021

1H FY2022

1H FY2023

1H FY2021

1H FY2022

1H FY2023

3

Analysis of increase/decrease of Net sales (YoY)
Sales increased in Content Creation and Production Technology Services (Overseas).
Analysis of increase/decrease(Million Yen)

Production
Technology Services
Overall：1,317

Content Creation (increased sales)
Sales increased significantly with theater andvideo streaming works.

Domestic

Overseas

Content
Creation

Imaging
Systems＆
Solutions

Other

Production Technology Services(increased sales)
Sales of localization services for video
streaming decreased by demand settle
down, but the digital cinema services
remained steady.

Imaging Systems ＆ Solutions(same level as last year)

1H FY2022
Actual＋5,096

1H FY2023
Actual• Sales of high-speed cameras increased
significantly owing to strong order after
settlement of semiconductor shortage.
• Video and image processing LSI sales weresluggish due to market deterioration.
4

Analysis of increase/decrease of Operating income
before goodwill and other amortization (YoY)
Operating income deceased in Production Technology Services (Overseas) but it is goingas planned.
Analysis of increase/decrease（Million Yen）

Production
映像制作技術Technology
サービス（全体）
Services△326:
Overall(326)
Content
CreationContent Creation(increased operating income)Despite a downturn in production for TV-CM,
operating income increased owing partly toorders for high-profit projects such as livemusic production.

Imaging
Systems＆
Solutions

Domestic
Overseas

Production Technology Services(decreased operating income)

Other

Operating income decreased due to fixed
cost increase by growth investment.

Imaging Systems ＆ Solutions(same level as last year)

1H FY2022
Actual(371)

1H FY2023
ActualAlthough high-speed camera sales werestrong, operating income remained at thesame level as the previous year due to therecession in the market environment forvideo and image processing LSI.
5

Performance by segment (YoY and vs. forecast)
Operating income achieved the target for this first half although decreased YoY withdecrease in Production Technology Services and Imaging Systems & Solutions.
1H FY2022
Actual(Million Yen)

Production
Technology
Services

Imaging
Systems &Solutions

OthersYoY

Net Sales

12,7703,724Operating income

46

89

42

Operating income before goodwill
and other amortization

49

91

42

25,596

26,913

1,317

Operating income

1,192

793

(398)

Operating income before goodwill
and other amortization

2,049

1,723

(326)

Net sales

8,212

8,094

(117)

Operating income

712

671

(40)

Operating income before goodwill
and other amortization

730

689

(40)

(1,265)(1,092)

172

(540)

(587)

(46)

41,58946,686

5,096

Operating income

1,411

967

(444)

Operating income before goodwill
and other amortization

2,289

1,918

(371)

Net sales

Net sales
Operating loss
Net sales

Consolidated
total

vs. forecast

9,045

Net sales

Content Creation

1H FY2023
ActualOperating income before goodwill
and other amortization

6

Contents of Today’s Presentation

Ⅰ Financial Results Summary for 2Q FY2023
Ⅱ Progress of the Mid-Term Plan “G-EST2025”
Nobuo Fuse, Representative Director, President

G-EST means: From five key strategies
G： The “4 Gs,” Growth, Global, Game, and Group
E： E2E and Live Entertainment (global E2E business, live entertainment business)
S： System (Imaging Systems & Solutions business)
T： Transformation (Transformation business)* Fiscal years in this presentation are abbreviated as follows: Fiscal year ending March 31, 2024 → FY2023

7

(Re-posting) Mid-Term Plan “GｰEST2025”
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstance<Key strategies>
1.
Expand “Global
E2E” business

2.

3.

4.

5.

Establish a
new Live
Entertainment
business

Generate additional
business value inthe Imaging
Systems &Solutions business

Expansion of
the Gamerelated
business

Completetransformationin the“Transformatio
nal business”<Strategic measures>
Achieve company
transformation
through DX

Strengthen R&D
capabilities

Secure & activate
talented employees<Resolve social challenges and achieve sustainable growth>

SDGs initiatives
8Key strategies, Policies and Management Indicators
Key strategies and policies

Sales target for
FY2025Global E2E business1• Transition from rapid growth to stable growth• Enhance profitability and increase operating margin to 10% or higher

35 billion yen
250億絵

Management
indicators for FY2025

Net sales

Live Entertainment business

2• Maintain growth in growth business areas• Aim to shift to stock business

8 billion yen

Imaging Systems & Solutions business3• Steadily advance business model transformation and shift to new

businesses• Maintain solid growth and high profitability (operating margin: 12%)22 billion yen• Position as a new driver of growth in the group• Aim a goal of net sales of 15 billion yen and operating margin of 10%
or higher (including expansion from M&A)

5

15 billion yen

Transformation business• Work to improve profitability, and ensure an operating margin of 5%

Operatingmarginbefore goodwill andother amortization

8％

Game-related business

4

110 billion yen

EBITDA

11 billion yen
33 billion yen
9Sales trends by key strategies as of 1H FY2023
There was double-digit growth in the second consecutive quarter due to double-digit
sales increases in Live Entertainment and Transformation businesses.
(Billion Yen)

1H Net sales+12%

1H
FY202246.6

1H
FY2023

YoY

Global E2E

16.7

18.1

1.4 (8.3%)

Live Entertainment

1.8

2.2

0.4 (22.2%)

Imaging Systems& Solutions

7.5

7.3

-0.2 (-2.6%)

Game-related

2.8

3.0

0.2 (7.1%)

Transformation

14.1

17.2

3.1 (21.9%)

Consolidated

41.5

46.6

5.1 (12.2%)

41.5
33.8

18.1
16.7

9.9
1.9
6.5

2.2
1.8
7.5

7.3
3.0

Global E2E
LiveEntertainment
Imaging Systems& Solutions
Game-related

2.8
16.7

FY2021

14.1

FY2022

17.2

Transformation

FY202310

Progress Report for Each Strategy• Report focusing on the progress of three key strategies＜Key Strategies＞

１

Global E2E business２

Live Entertainment business３

Imaging Systems Solutions business４

Game-related business５

Transformation business

11

Global E2E business
Sales of localization services decreased by demand settle down, but the digital cinema
services were strong and sales increased.
Progress of 1H FY2023

1H Net sales(Billion Yen)

１ Net sales

+8%

18.1
16.7

Sales of localization services decreased slightly by demand
settle down for old titles, but strong digital cinema and trailer
production services due to the recovery of feature films led toincreased sales.
Digital cinema,
etc.

9.9

13.0

14.2

6.5

２ Profitability
3.7

3.9

FY2021

FY2022

FY202314.2

13.0
billionyen

3.4

FY2023

FY2022billionyen

Overseas
breakdown

Localization• Gross margin remained at the same level as the previous year
owing to growth in highly profitable digital cinema.
• Operating income decreased due to increased fixed costs
associated with growth investment.
12Initiatives to achieve stable growth and enhance profitability
Strengthen approach to customers
for stable growth

Optimally allocate human resources
to enhance productivity

1 Continue to secure orders from major
existing customers

Expand bases in low-cost countries
and reallocate talentContinue to secure orders by responding to theneeds (short delivery times and high security) ofmajor existing customers such as major
Hollywood studios and video streaming service
providers.

• Expand bases and introduce service equipment

in Cairo and Cape Town.
• Increase the number of human resources at thesame locations, while curbing unit labor costs.
Trends in the number of Pixelogic employees by location
Seoul (S. Korea)

2 Strengthen sales to expand market share

Cairo (Egypt)

We are strengthening sales to expand our sharein each customer such as a video streaming
service provider, making progress in acquiring
orders.

Cape Town (S. Africa)

Increased
personnel

London (U.K.)
Decreased
personnel

Los Angeles (U.S.)

As of Jun. 30,
2022

As of Jun. 30,
2023

13

Expansion of the Game-related business
Owing to increased operating income from 3DCG production, sales increased by 7% compared tothe previous year, and expansion into new business areas progressed smoothly.
Progress of 1H FY2023

1H Net sales(Billion Yen)

Entire Game-related
business

3DCG
production

+7%
+29%

2.8

3.0
1.0

FY2023

FY2022(+29%) owing to increased orders.
• Relocation of 3DCG and QA bases to increase floor
space and expand business.
Floor
increase rate

Location

3DCG
production

Approx.
2 timesHanzomon

QA

Approx.
2.3 times

Iidabashi◀Building that houses our 3DCG production base

2 Expand into new business areas• Consider M&A and alliances to expand business areas.
• We are promoting business alliances with game

0.8

FY2022

1 Growth of existing businesses• 3DCG production sales increased significantly

FY2023

QA/localization companies.

14

Roadmap for expanding new business areas
We are expanding new business areas by promoting both
(1) M&A and (2) capital/business alliances.
Planning

Net sales
target for 2025
(Billion Yen)

Sales/
Operation

Production/Service

Approx.
2 timesdevelopment

process

Planning/
Development
Planning

Development

2D/3DCG
production

Localization

Qualityassurance

5.0

New businesses

Game

10.0

Existing businesses

15.0
Marketing

Existing
businesses

Projects under considerationNewbusinesses(1) M&A(2) Capital/businessalliances

Domestic Company

Domestic Company

6.9

Domestic Company

Overseas Company

Overseas Company
FY2023
PlannedFY2025
Target15

Transformation business
Sales increased owing to strong animation production, while TV-CM were sluggish.
Progress of 1H FY2023

1H Net sales

１ Theater and video streaming works(Billion Yen)
Sales decreased due tothe effect of spinning off
the game-related
business

16.7• Feature film “Godzilla Minus One”

+21%

• Netflix feature film "Zombie 100: Bucket List of the Dead"17.2

2 Animation production performed well
• IP creation progressed: TV animation based on two groupcompany original works have been broadcasted since
October.
• Margin in animation production has improved owing todigitalization, etc.
• We expanded the base for post-production services foranimation in May and have received strong orders.

14.1

3 Web-CM strong, while TV-CM sluggish
FY2021

FY2022

FY2023• TV-CM (production and post-production) were sluggish.
• Orders for web-based videos linked to various social media
were strong.
16Primary IP (Animation) currently in operation
Three works as our primary IP (animation) are currently in operation in a range of media.
“The Apothecary Diaries”“Bullbuster”“Odd Taxi”

A thrilling mystery, set in a palace cloister in the
middle ages, of a young poison tester who solves
one difficult mystery after anotherAn “economically accurate” robot herotale

Comical yet biting, pop yet mysterious...an original
animation series in a genre of its own“Odd Taxi — Diamonds Can’t Be Hurt” play

©P.I.C.S. / Butai Odogawa Kotsu Partners©Hyuuga Natsu, IMAGICA Infos/”The Apothecary Diaries”
Project

・Over 24 million paperbacks and comics sold・Broadcast on Nippon TV affiliate stations startingin October©P.I.C.S.・Published by KADOKAWA /Namidome Kogyo Video Production Dept.

・Volume 3 of paperback now on sale from
KADOKAWA・Broadcast on TOKYO MX, Kansai TV, and otherstations starting in October・In addition to being broadcast on TV Tokyo andother stations, it is being streamed on Amazon Prime,
and adapted as a comic and as a movie. It isscheduled to be replayed in November with a new cast.

17

Ongoing creation of IP
We are continuing to create and expand our IP using two approaches.
1. In-house development
Group companies develop new original works, which areadapted for various media
Products developed in-house by P.I.C.S. (comics, novels)“Odd Taxi”“Bullbuster”©P.I.C.S. / Odogawa Kotsu
Partners©P.I.C.S.・Published by
KADOKAWA / Namidome
Kogyo Video Production
Dept.

2. Discovering works
New original works are discovered from paperback series
published by group companies and adapted for various
media
Works adapted for animation from Hero Bunko
published by IMAGICA Infos“The Apothecary
Diaries”“Restaurant to
Another World”©Hyuuga Natsu,
illustrated by Touco
Shino/IMAGICA Infos©Written by: Junpei
Inuzuka, Illustrated by:
Katsumi Enami/IMAGICA Infos“Harem in the
Labyrinth ofAnother World””Cheat Magician from
Another World”

🄫Written by: Shachi
Written by: Takeru Uchida,
Sogano, Illustrated by:
Illustrated by:
Shikidouji/IMAGICA Infos Nardack/IMAGICA Infos

18

Diversifying Revenue Sources through IP“The Apothecary Diaries” case example: We have secured diverse revenue sources byadapting the source material for various media.
Revenue(2) Comics

Royalty revenue
from comicalization(3) TV animation broadcasting, etc.
１. Fund allocation revenue fromthe production committee
2. Royalty revenue from usage rights
for the original material(1) Novels

Paperbacksales revenue

In addition to thebroadcasting of the
TV animation, there
is also revenue from:・Video streaming
・DVDs/BDs
・Character sales

2017-

2011-

©Hyuuga Natsu, IMAGICA Infos/”The Apothecary Diaries”
Project

2023-

Time

©Hyuuga Natsu, illustrated by Touco Shino/IMAGICA Infos

19

Animation production services offered by our group
We are a one-stop provider of animation production services, covering everything fromIP creation to streaming.

ServicesIP
creation• Original IP planningand development• Publishing

Production

Postproduction• Animation production • Video and audio
editing

Subtitling/Dubbing• Japanesesubtitling/dubbing of
foreign works• Foreign language
subtitling/dubbing ofJapanese works

Distribution• Creation of files fordifferent viewing
formats (feature films,
TV, streaming, etc.)

Company
responsible

20

Establish a new Live Entertainment business
Sales increased owing to acquisition of stock-based projects and strong orders for live
music performances, making steady progress.
(Billion Yen)

1H Net sales

Progress of 1H FY2023+22%

1 Sales are progressing steadily, up 22% vs. theprevious year

2.2
1.9

1.8

0.5

New
businesses

0.2

2 Results of new businesses• Urban space design and production.

0.3

1.7

FY2021

1.5

FY2022• Acquisition of stock-based projects.
• Strong orders for recording live performances and music videos
for Nogizaka 46, etc.

1.7

FY2023

Existing
businesses“TOKYO NODE” Toranomon Hills Station Tower opened on
October 6.
• Comprehensive joint studies with NTT rolled out new
performance at Paris Collection on September 26

TOKYO NODEANREALAGE SPRING/SUMMER Paris
Collection 2024 performance21

Generate additional business value in the Imaging Systems &Solutions businessAlthough video and image processing LSI sales were sluggish, high-speed camera sales
were strong, and overall the segment performed well.
1H Net sales/Operating margin before
goodwill and other amortization(Billion Yen)

OperatingmarginOperatingmargin

80

6.5%
●

70

6.5
65

Operatingmargin

8.7%
●

7.8%
●

7.5

7.3
73

Progress of 1H FY2023
1 Overall status• Both sales and operating income of high-speed cameras
increased owing to the recovery of production after
settlement of semiconductor shortage and strong orders.
• Both sales and operating income of video and image
processing LSI declined due to deteriorating market
environments, so the overall operating margin decreased.

60

2 Launch of measurement service for airbag
development

50

40• We internally developed new technologies for creating 3Dmodel videos in super-slow space and for playing backthe videos and performing measurement. We launched aservice using these technologies in July.

30
20
10

• This service is being provided to automotive and airbag
manufacturers.

0
FY2021

FY2022

FY202322

The 1H results and progress towards 2025 targets
The 1H results have been in line with our initial forecasts. In 2H we will steadily
implement our five key strategies and aim to achieve our Mid-Term Plan targets.
Net sales

Left: 1H Right: Full year

100.0

94.1

110.0
(Billion Yen)

80.1

46.6

41.5

33.8

計画

Plan

MidTerm
Plan

ActualFY2021

FY2022

FY2023Operating margin before goodwill and otheramortization
Left: 1H Right: Full year

FY2025

8.0%
●

6.4%
●
3.7%
●

5.5%
●

6.1%
●

4.1%
●

5.9%
●

23

Enhancing Our Corporate Value
To raise our PBR to 1.0 or greater, we tackle to improve our ROE and increase our PER.

PBR
（Price-to-book ratio）
As of
Mar 31, 2024
（Forecast）

0.7

Measures forachieving targets

As of
Mar 31, 2026
(Target)＝ROE（Return on equity)

×

PER（Price-to-earnings ratio)

5.9%

12.1

Profitability improvement= ROE improvement

Foster growth expectations=improve PER

Achieve Mid-Term Plan
targets

Growth investment in new
business areas

Operating margin before goodwill
and other amortization: 8%
EBITDA: 11.0 billion yen(See page 9)

Invest in growth areas through our five key
strategies (See page 9)

Promote greater understanding ofour business
Improve communications to make themclearer and easier to understand ourbusiness

1.0
24

Appendix.

25

Key strategies and services/Net sales of each segment

1

2

3

• live-music performances direction• live-viewing• metaverse• Sports Broadcasting• Video Archiving Business

0.8

1.4

• high-speed cameras• Broadcast imaging systems &solutions

Imaging Systems &Solutions business

7.3

Game-related business

•

•

5

Transformation business

Total

Production feature film,
TV drama, Animation• Publishing

Total

18.1

18.1

•

4

Imaging Systems& Solutions business• Subtitling, dubbing• Streaming

Global E2E businessLive Entertainment
business

Production Technology
Services

Content Creation

Net sales（1H FY2023）(Billion yen)

3DCG production, Quality
Assurance
Human resource consulting service

2.2

7.3
3.0

3.0

Postproduction for TV,
Commercials• Human resource consulting service

•

12.1

5.1

12.7

26.9

17.2

8.1

46.6

*Total of net sales by strategy do not match the total because consolidation eliminations are not taken into account.

26