This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordancewith Japanese accounting standards and the Financial Instruments and Exchange Act. This document does not contain orconstitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken
based on this document. In the case that there is any discrepancy between the Japanese original and this document, theJapanese original is assumed to be correct.

Consolidated financial results (Japanese Accounting Standards)
for the First Quarter of the fiscal year ending March 31, 2024
Company name:IMAGICA GROUP Inc.

Securities code:

6879

Filing date: August 1, 2023
Stock exchange listing: Tokyo Prime
URL:

https://www.imagicagroup.co.jp/en/

Representative:
Nobuo Fuse, Representative Director, President
Inquiries:
Masakazu Morita, Director and Senior Managing Executive Officer
Quarterly report filing date (as planned):
August 1, 2023
Dividend payment date (as planned):－
Supplemental material of quarterly results:
Yes
Convening briefing of quarterly results:
None

Tel:+81-3-5777-6295(Millions of yen, Rounddown)
1. Consolidated Financial Results for the First Quarter of the fiscal year ending March 31, 2024
(April 1, 2023 – June 30, 2023)(1) Consolidated Operating Results(Percentage represents change from the same period of the previous fiscal year.)Net sales

3 months ended June 30, 2023
3 months ended June 30, 2022
(Note) Comprehensive income:Operating income

Net income attributableto owners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

23,797

19.8

345

27.2

394

28.9

305

474.5

19,861

28.9

271

－

306

－

53

(89.3)

1st quarter ended June 30, 2023: 631 millions of yen / (14.7) %1st quarter ended June 30, 2022: 740 millions of yen / (43.3) %Diluted earnings
per share ofcommon stock

Earnings per share ofcommon stock
Yen

Yen

3 months ended June 30, 2023

6.86

－

3 months ended June 30, 2022

1.20

－

(2) Consolidated Financial Position
Total assets

As of June 30, 2023
As of March 31, 2023
(Reference) Shareholders’ equity:

Net assets

Shareholders' equity
ratio to total assets

Millions of yen

Millions of yen%

76,29738,85247.0

81,88840,30344.1

As of June 30, 2023: 35,860 millions of yen
As of March 31, 2023: 36,106 millions of yen

2. Dividends
Dividend per share
1st quarter- end

2nd quarter- end

3rd quarter- end

Year-end

Annual

yen

yen

yen

yen

yen

Year ended March 31,2023

－

0.00

－

15.00

15.00

Year ending March 31,2024

－
0.00

－

15.00

15.00

Year ending March 31,2024(Forecast)(Note)

Changes in dividends forecast from the latest disclosed information: None

3. Consolidated forecast for the fiscal year ending March 31, 2024
(April 1, 2023 - March 31, 2024)(Percentage represents change from the same period of the previous fiscal year.)Net sales

Fiscal year ending March 31,
2024

Operating income

Net income
attributableto owners of theparentOrdinary income

Earnings per
shareof commonstock

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

yen

100,000

6.2

4,000

3.4

3,500

(3.8)

2,200

(43.1)

49.34(Note) Changes in earnings forecast from the latest disclosed information： None

*Notes:(1) Material changes in subsidiaries during this period (changes in scope of consolidations resulting from change insubsidiaries): None
(2) The application of specific accounting of the consolidated quarterly financial statements: Yes(3) Changes in accounting policies, accounting estimates and retrospective restatement
1) Changes in accounting policies based on revisions of accounting standards: None
2) Changes in accounting policies other than ones based on revisions of accounting standards: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Number of issued and outstanding shares (common stock)1) Number of issued and outstanding shares at the end of fiscal year (including treasury stock)
As of June 30, 2023

44,741,467 shares

As of March 31, 2023

44,741,467 shares

156,042 shares

As of March 31, 2023

156,042 shares

44,585,425 shares

As of June 30, 2022

44,395,529 shares

2) Number of treasury stock at the end of fiscal year
As of June 30, 2023

3) Average number of shares
As of June 30, 2023

*Consolidated quarterly financial results are exempted from quarterly review by a public certified accountant or an
auditing firm.
(Explanation regarding the appropriate usage of financial forecasts and other special instructions)
Forward-looking statements, such as financial forecasts, presented in this document are based on information available andcertain assumptions deemed to be reasonable to the Company at the time of publication, and are not to be read as
guarantees of future performance by the Company.

Table of Contents
1.

Qualitative Information on Results in this Quarter ................................................................................................................................. 2(1)

Explanation of operating results.............................................................................................................. 2(2)

Explanation of financial position ............................................................................................................. 4(3)

Explanation of consolidated forecasts and other forward-looking information .......................................................... 4

2.

Quarterly Consolidated Financial Statements ........................................................................................................................................ 5(1)

Quarterly Consolidated Balance Sheets ..................................................................................................... 5(2)

Quarterly Consolidated Statements of Income and Statements of Comprehensive Income ............................................ 7(3)

Notes related to quarterly consolidated financial statements ............................................................................. 9(Notes regarding ongoing concern assumption) ............................................................................................... 9(Notes in the event of significant changes in shareholders' equity) .......................................................................... 9(The application of specific accounting of the consolidated quarterly financial statements) .............................................. 9(Segment information and others) .............................................................................................................10(Significant subsequent events) .................................................................................................................121

1. Qualitative Information on Results in this Quarter(1) Explanation of operating results① Overview of the first quarter of the consolidated fiscal year ending March 31, 2024
In the first quarter of the consolidated fiscal year, the legal status of the COVID-19 was downgraded to “Class 5,” in Japan andJapanese economic and social activities began to recover gradually though the outlook is still uncertain.
As we enter the third year of our G-EST 2025 Mid-Term Plan set in FY2021, the Group has reaffirmed that improvement of
profitability is an important issue to realize our vision of becoming a "highly profitable group" in FY2025. Accordingly, the Grouphas revised its four key strategies and has added "Expansion of game-related business" as a new strategy. In FY2023, we will
undertake a variety of measures to achieve net sales of 110 billion yen, operating margin of 8% before amortization of goodwill,etc., and EBITDA of 11 billion yen in FY2025, following our policy "FY2023 is the year to get on growth path after establishment ofbasis for growth."
Under these circumstances, the Group's performance in the first quarter of the consolidated fiscal year was as follows: Net sales
were 23,797 million yen (up 19.8% year on year), operating income was 345 million yen (up 27.2%), and ordinary income was 394
million yen (up 28.9%). Net income attributable to owners of the parent was 305 million yen (up 474.5%) because of decrease of
extraordinary losses and increase of extraordinary income.
② Performance by business segment
Financial results by business segment are as follows.
Effective from the first quarter of the consolidated fiscal year, the name of the reportable segment "Production Services
business" has been changed to "Production Technology Services business." This represents a change in segment name only andhas no impact on the segment Information.
1) Content Creation businessIn the first quarter of the consolidated fiscal year, the segment reported sales of 7,166 million yen (up 72.7% year on year) andoperating income of 49 million yen (compared to operating loss of 193 million yen in the same period of the previous fiscal year).
Sales of feature films and dramas significantly increased owing to release of major works for theater and video streaming service,including the feature film "Rohan au Louvre" released on May 26 and the Netflix feature film "Zombie 100: Bucket List of the Dead"scheduled for worldwide exclusive streaming from August 3. Sales of animation works increased owing to steady orders for TV
series. Sales of the publishing business increased. The new 13th volume of the light novel "The Apothecary Diaries" was publishedin February and sales of the novel were stronger than expected with the news of its coming TV animated series. On the other hand,sales of commercial production decreased due to weak orders.
As a result, sales and operating income increased in the segment.

22) Production Technology Services businessIn the first quarter of the consolidated fiscal year, the segment reported sales of 13,200 million yen (up 10.4% year on year) andoperating income of 321 million yen (down 9.6%).
In domestic E2E services*1, sales remained at the same level as the previous year, with solid sales of digital cinema services.
In overseas E2E services*1, sales increased in the digital cinema services and trailer production service, supported by increase of
new theatrical releases.
In the game-related business*2, sales increased as orders for Game 3DCG production, debugging, etc. remained strong.
On the other hand, in post-production services for TV, sales declined due to weak orders for TV commercials.
As a result, sales increased, however operating income decreased in the segment. Significant decline of operating income ofpost-production services for TV commercials was not covered with increase of operating income in E2E services.
*1 E2E services: End-to-end services. This is a general term for one-stop services ranging from post-production in the productionof video content such as movies, dramas, and animation to media services for the localization (dubbing and subtitling) anddistribution required for the distribution of said content through movie theaters, TV, and the Internet. Please note as the closing
date for overseas E2E services is December 31, the results from January 1, 2023 to March 31, 2023 were reflected in the firstquarter of the consolidated fiscal year.
*2 Game-related business: 2D/3DCG production, debugging and software testing, creative talent dispatch and referral, etc. for
games3) Imaging Systems & Solutions businessIn the first quarter of the consolidated fiscal year, the segment reported sales of 3,883 million yen (down 8.1% year on year) andoperating income of 256 million yen (down 21.2%).
Sales of high-speed cameras increased owing to recovery in production by settlement of semiconductor shortage and strong
orders. On the other hand, sales of the broadcast imaging systems & solutions business decreased as it had sales of large projects
in the previous year. Sales of the optical measurement business declined due to lower orders than expected in optical elements.
Sales of video and image processing LSIs declined due to deteriorating world market conditions.
As a result, sales and operating income decreased in the segment.

3(2) Explanation of financial position① Assets
Current assets decreased by 5,153 million yen (11.5%) from the end of the previous consolidated fiscal year to 39,817 million
yen. This was mainly due to decrease in notes, accounts receivable and contract assets and in cash and deposits.
Non-current assets decreased by 437 million yen (1.2%) from the end of the previous consolidated fiscal year to 36,480 million
yen. This was mainly due to increase in buildings and structures, while goodwill and construction in progress decreased.
As a result, total assets decreased by 5,590 million yen (6.8%) from the end of the previous consolidated fiscal year to 76,297
million yen.
② Liabilities
Current liabilities decreased by 3,868 million yen (11.6%) from the end of the previous consolidated fiscal year to 29,336 million
yen. This was mainly due to decrease in notes and accounts payable and in contract liabilities.
Non-current liabilities decreased by 270 million yen (3.2%) from the end of the previous consolidated fiscal year to 8,108 million
yen. This was mainly due to decrease in long-term loans payable and in lease liabilities.
As a result, total liabilities decreased by 4,138 million yen (10.0%) from the end of the previous consolidated fiscal year to37,445 million yen.
③ Net assets
Net assets decreased by 1,451 million yen (3.6%) from the end of the previous consolidated fiscal year to 38,852 million yen.
This was mainly due to decrease in non-controlling interests.

(3) Explanation of consolidated forecasts and other forward-looking information
There are no revisions to the full-year forecasts for the consolidated fiscal year ending March 31, 2024, from the forecasts
announced on May 11, 2023.

4

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)March 31, 2023

June 30, 2023

AssetsCurrent assets
Cash and deposits

7,813,769

6,534,501

Notes, accounts receivable - trade and contract assets

21,937,480

17,478,746

Inventories

12,460,112

12,150,735

Other

2,868,953

3,758,418

Allowance for doubtful accounts(109,328)(104,829)

Total current assets

44,970,987

39,817,573

4,009,273

4,274,669

545,383

567,695

Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Land921,363921,363

Lease Assets

4,998,147

4,960,214

Construction in progress

1,711,600

1,443,652

Other

2,288,372

2,377,087

Total Property, plant and equipment

14,474,140

14,544,683

Goodwill

11,780,285

11,455,388

Other

2,460,007

2,423,180

Total Intangible assets

14,240,292

13,878,569

2,876,524

2,899,675

514,042494,657

Lease and guarantee deposits

2,048,952

2,061,465

Deferred tax asset

2,420,133

2,368,417

490,206

387,124

Intangible assets

Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates

Other
Allowance for doubtful accounts(147,088)(154,435)

Total Investments and other assets

8,202,771

8,056,904

Total non-current assets

36,917,204

36,480,157

81,888,191

76,297,730

Total assets5

(Thousands of yen)March 31, 2023

June 30, 2023

Liabilities
Current liabilities
Notes and accounts payable- trade

7,133,738

5,666,818

Short-term loans payable

6,432,680

5,687,826

Lease Liabilities

881,977904,671

Accounts payable

1,769,403

1,420,516

Income taxes payable

1,172,785

596,452

Contract liabilities

7,591,449

6,350,070

Provision for bonuses

1,281,691

671,619

1,100

1,600

Provision for loss on litigation

630,660

683,865

Asset retirement obligations

23,181－

Other

6,286,605

7,353,551

Total current liabilities

33,205,274

29,336,994

Long-term loans payable

1,366,665

1,139,582

Lease Liabilities

Provision for loss on order received

Non-current liabilities
4,498,102

4,423,404

Long-term accounts payable-other252,767

273,657

Deferred tax liabilities

196,598

199,149

Net defined benefit liabilities

1,241,071

1,249,260

Asset retirement obligations

653,518

656,198

Other

170,257

167,074

Total non-current liabilities

8,378,982

8,108,327

41,584,257

37,445,321

Capital stock

3,306,002

3,306,002

Total Liabilities
Net assets
Shareholders’ equity
Capital surplus

13,020,018

13,017,093

Retained earnings

16,982,736

16,619,236

Treasury stock(158,530)(158,530)

Total shareholders’ equity

33,150,226

32,783,802

713,553

882,196

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

20,74038,389

Revaluation reserve for land

(17,933)(17,933)

Foreign currency translation adjustment

2,237,081

2,171,100

Re-measurements of defined benefit plans

2,828

2,509

2,956,270

3,076,263

Non-controlling Interests

4,197,436

2,992,342

Total net assets

40,303,934

38,852,408

Total liabilities and net assets

81,888,191

76,297,730

Total accumulated other comprehensive income6(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income
Quarterly Consolidated Statements of Income
3 months ended
June 30, 2022

(Thousands of yen)

3 months ended
June 30, 2023

Net sales

19,861,611

23,797,342

Cost of sales

14,366,860

17,586,453

Gross profit

5,494,751

6,210,888

Selling, general and administrative expenses

5,223,393

5,865,674

271,357

345,213Interest income

278

2,391

Dividend income

16,006

21,266

Foreign exchange gains

85,038170,071

Other

55,352

39,113

Total non-operating income

156,675

232,843

Interest expenses

50,20389,428Equity in losses of affiliates

4,649

2,370

－

42,438

Other

66,872

49,035

Total non-operating expenses

121,725

183,272

Ordinary income

306,307394,784

Operating income
Non-operating income

Non-operating expenses

Administrative expenses for investment partnerships

Extraordinary income
Gain on sales of non-current assets

2,923

93

Gain on sales of investment securities－

280,984

Compensation for forced relocation

138,685－

Total extraordinary income

141,609

281,077

1,640

1,277

Extra retirement payments

170,228－

Other

47,685－

Total extraordinary losses

219,554

1,277

Net income before income tax

228,362

674,583

Income taxes

145,385

161,553

Net income

82,976

513,029

Net income attributable to non-controlling interests

29,746207,244

Net income attributable to owners of the parent

53,230305,784

Extraordinary losses
Loss on retirement of non-current assets

7

Quarterly Consolidated Statements of Comprehensive Income
3 months ended
June 30, 2022

(Thousands of yen)
Net income

3 months ended
June 30, 2023

82,976

513,029

2,900

168,642－

17,649Foreign currency translation adjustment

654,645(67,861)

Re-measurements of defined benefit plans

(377)

(318)

Total other comprehensive income

657,167

118,112Comprehensive income

740,144

631,141

Comprehensive income attributable to owners of parent

708,553425,777

Comprehensive income attributable to non-controllinginterests

31,591

205,364

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(Breakdown)8(3) Notes related to quarterly consolidated financial statements(Notes regarding ongoing concern assumption)
No relevant matters to be noted.
(Notes in the event of significant changes in shareholders' equity)
No relevant matters to be noted.
(The application of specific accounting of the consolidated quarterly financial statements)(Calculation of tax expenses)
Tax expenses are calculated by rationally estimating the effective tax rate after applying tax effect accounting to net income
before income tax for the consolidated fiscal year that includes the current first quarter and multiplying net income before
income taxes for the quarter by the estimated effective tax rate.
However, if the calculation of tax expenses using this estimated effective tax rate leads to obviously irrational results, thestatutory effective tax rate is used after adjusting income/loss before income taxes for material differences that do not fallunder temporary differences.

9

(Segment information and others)
I.

[Segment Information]
For the 3 months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
1. Information regarding net sales and income (loss) by reportable segment(Thousands of yen)Content Creation

Production
Technology Services

Imaging Systems &Solutions

Sub total

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers

4,145,021

11,648,297

4,060,900

19,854,219

4,672

307,413164,138

476,224

Total

4,149,693

11,955,710

4,225,039

20,330,443

Segment Income(loss)(193,668)

355,187

325,674

487,192

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements of Income(Note 2)

Net sales

7,391

19,861,611(476,224)

－

Total

(468,832)

19,861,611

Segment Income(loss)(215,835)

271,357

Sales to externalcustomers
Inter-segment sales
or transfers

Notes:
1.
The segment income (loss) adjustment of (215,835) thousand yen consists of income/loss related to the Company of 1,502,576
thousand yen and elimination of inter-segment transactions of (1,718,411) thousand yen.
2.
Segment income (loss) is adjusted against operating income on the quarterly consolidated financial statements.

10

II.

For the 3 months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
1. Information regarding net sales and income (loss) by reportable segment(Thousands of yen)Content Creation

Production
Technology Services

Imaging Systems &Solutions

Sub total

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers
Total
Segment income

7,151,041

12,918,776

3,725,318

23,795,136

15,772281,228

158,188455,189

7,166,814

13,200,005

3,883,507

24,250,326

49,989321,173

256,490627,653

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements of Income(Note 2)

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers

2,205

23,797,342(455,189)

－

Total

(452,984)

23,797,342

Segment income(282,439)

345,213

Notes:
1.
Adjustment of segment income of (282,439) thousand yen consists of income/loss related to the Company of 1,332,343 thousand
yen and elimination of inter-segment transactions of (1,614,783) thousand yen.
2.
Segment income is adjusted against operating income on the quarterly consolidated financial statements.
2. Information regarding changes in reportable segments
Effective from the first quarter of the consolidated fiscal year, the name of the reportable segment "Production Services
business" has been changed to "Production Technology Services business." This represents a change in segment name only andhas no impact on the segment Information.
The segment Information for the first quarter of the previous fiscal year is presented with the new segment name.

11

(Significant subsequent events)(Acquisition of Treasury Stock)
The Company resolved acquisition of treasury stock at the Board of Directors on June 27, 2023, pursuant to Article 156 of
the Companies Act of Japan, which applies pursuant to Article 165, Paragraph 3 of that law and acquired as follows.
As referred in “3. Result of acquisition”, the Company has completed the acquisition resolved at the Board of Directors on
June 27, 2023.
1.

Reason for acquisition of treasury stock
The intent of the acquisition of treasury stock is to enhance capital efficiency and to prepare for an agile capital strategy inthe future.
2. Details of acquisition(1) Type of shares to be acquired:(2) Total number of shares acquired:(3) Total acquisition cost of shares:(4) Acquisition period :(5) Method of acquisition:

Common stock of the Company
500,000 shares (maximum)(Percentage of outstanding shares (excluding treasury shares): 1.1%)
JPY 400,000,000 yen (maximum)
June 28, 2023 to September 30, 2023
Market purchase on the Tokyo Stock Exchange(Any trading method by securities companies)

3.

Result of acquisition
As a result of market purchase, the Company acquired 500,000 shares (JPY 339,978,600) of common stock of the Company
during July 1 2023 to July 12, 2023.

12