Financial Results Presentation
First Half for FYE Mar. 2023
November 9, 2022

Stock code：6879
https://www.imagicagroup.co.jp/

Contents of Today’s Presentation

Ⅰ First Half Financial Results Summary for FYE Mar. 2023
Ⅱ Progress on Mid-Term Plan "G-EST 2025“
Nobuo Fuse, Representative Director, President

G-EST means: From four key strategies
G: The “3 Gs,” Growth, Global, 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 ended March 31, 2023 → FYE Mar. 2022
2

Key Points of Financial Results

１Company-wide operating income before goodwill
amortization was approximately 2.2 billion yen, an increaseof 1.0 billion yen from the previous year
Production Services continues to be driven by overseas

２demand, with profit increasing by 1.0 billion yen from theprevious year
Net income attributable to owners of the parent decreased by 800

３million yen due to an increase in income taxes and the absence of
extraordinary income recorded in the previous year3Highlights of Financial Results• The company secured a significant increase in both sales and profits. Net
income declined from the previous year due to the absence of extraordinary
gains recorded in the previous year and an increase in income taxes, etc.
Net sales

41,589YoY+7,743（＋22.9%）
35,835(Million Yen)

Operating income (loss)
before goodwill
amortization

Operatingincome(loss)

Net income (loss)
attributable to ownersof the parent

YoY

YoY

YoY

2,289

+1,015（+79.7%)

1,411

799

+980 (+227.0%)(895)

41,58933,846

2,289
1,274

1,694

1,411

799

431

(2,086)2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021(1,952)(2,628)2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

4

Analysis of Increase/Decrease in Net Sales (YoY)• Sales increased in all segments, especially Production Services (International),
in which sales increased by 6.5 billion yen.
(Million Yen)

Production Services(Overall:+7,138)
Other
Imaging
Systems＆ Solutions

Content
Creation
Production
Services（Domestic）

2Q FYE Mar. 2022
Actual

Production
Services（International）

Exchange rate
fluctuations＋1,5612Q FYE Mar. 2023
Actual7,743
5

Analysis of Increase/Decrease in Operating Income
before goodwill amortization (YoY)• Profit increased by 1.0 billion yen in Production Services and 200 million in
Imaging Systems & Solutions. On a consolidated basis, profit increased by 1.0
billion yen.
(Million Yen)
Production Services(Overall:+1,025)

Other
Imaging
Systems＆ Solutions

Content
Creation

Production
Production
Services
Services （International）（Domestic）

2Q FYE Mar. 2022
ActualExchange rate
fluctuations＋160

2Q FYE Mar. 2023
Actual

+1,015
6

Overview by Segment (FYE Mar. 2021-2023 1H actual)
Operating income
before goodwill amortization

Net sales

Content
Creation

7,190

8,993

41

49

9,045

(Unit: million yen)

Increase in sales and profit Robust net sales in feature film, drama, and TV(712)

commercial production
 In anime production, gross profit improved

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2021 FYE Mar. 2022 FYE Mar. 2023

25,596

Production
Services

20,2762,049

18,458

Increase in sales and profitOverseas: Strong results in E2E services for video
streaming service providers

1,024



Domestic: Strong results in E2E services and postproduction services, but fixed costs associated withsite relocation increased(1,630)FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

Increase in sales and profitBroadcast Imaging Systems & Solutions, Image

imagingsystems

Processing LSI, and optical measurement
8,937

FYE Mar. 2021

7,321

FYE Mar. 2022

remained strong

8,212

FYE Mar. 2023

506

504

FYE Mar. 2021

FYE Mar. 2022

730



Orders for high-speed cameras were solid, but
net sales were flat YoY due to reasons including

FYE Mar. 2023

shortages of semiconductors*FYE Mar. 2021 to FYE Mar. 2022 Production Services and Imaging Systems & Solutions have been adjusted to reflect the change in segment classifications.

7

FYE Mar.2023: Full-year forecasts
・The impact of the semiconductor shortage is still unclear, and there was a special
demand in the second half of the previous year, so the full-year forecast remains
unchanged.
FYE Mar.2022(Million yen)

ActualFYE Mar.2023
Financial forecast

YoYchangeYoYchange80,18488,000

7,816

9.7%

5,131

5,200

69

1.3%

6.4%

5.9%

3,417

3,600

183

5.3%

4.3%

4.1%

Ordinary income

3,934

3,300

(634)

(16.1%)Net income attributable to parent company
shareholders

2,729

2,100

(629)

(23.0%)Net income per share (yen)

61.49

47.30

(14.19)(23.0%)Net sales
Operating income before goodwill
amortization(Profit margin)

Operating income(Profit margin)

8

Contents of Today’s Presentation

Ⅰ First Half Financial Results Summary for FYE Mar. 2023
Ⅱ Progress on Mid-Term Plan "G-EST 2025“
Nobuo Fuse, Representative Director, President

G-EST means: From four key strategies
G: The “3 Gs,” Growth, Global, 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 ended March 31, 2023 → FYE Mar. 2022
9

(Re-posting) Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances<Key Strategies>
1.
Expand “Global
E2E” Business2.
Establish a newLive Entertainment
business

3.
Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.
Complete
Transformation inthe“Transformational
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
10(Re-posting) Financial Goals in the Mid-Term Plan "G-EST 2025"
・Targeting to become a balanced business structure■ Global E2E

FYE Mar. 2021 Actual(Billion Yen)

Net sales■ Live Entertainment

Composition bybusiness segment*

69■ Imaging Systems & Solutions

FYE Mar. 2026

100

25%
51%

25%

8
25%

(Before goodwill amortization)

0.9

25%
10%

2025年度Operating income*

Composition bybusiness segment

40%

4%
20%

2020年度(調整)■Transformation

100%*Net sales and operating2020年度実績
income for FYE Mar. 2021 were adjusted for the impact from a change2025年度
in accounting
policies in overseas M&A and the Imaging Systems & Solutions business, for purposes of comparison.

35%

30%
10%

11

FYE Mar. 2023 Highlights and Progress as of 1H
Growth investments for 2025 will be carried out (approx. 3.5 billion yen)

１

Growth investments are progressing according to plan. The expansionof overseas sites in the Global E2E Business is scheduled for completionby the end of the year
For net sales in the Global E2E Business, the live entertainment business and the２

Transformational Business, we aim to exceed levels in the Mid-Term Plan
All businesses are making steady progress toward exceeding thelevels of the Mid-Term Plan
In the Imaging Systems Business, we aim to improve profitability and increase３

sales and profit
1H: 15% increase in sales; 2.2-point increase in operating margin;
8.7% actual12

Expand Global E2E Business
・Strong overseas performance led to a significant YoY increase of +68.6%(billion yen)

1H net sales

FYE Mar. 2023 Progress Report+68.6%

9.9

16.7



Overseas site expansion is proceeding inline with the Mid-Term Plan
(1) Site expansion is scheduled forcompletion within the year

13.0(2) Additional development of in-house IT
systems is also progressing

Overseas


6.4

3.5

3.7

FYE Mar. 2022
ActualFYE Mar. 2023
ActualDomestic

Movements in the video streaming
marketDemand remains strong due to increase in
distribution platforms and increase in nonEnglish speaking productions

13

Pixelogic Progress in site expansion
・Completion of construction expected within FYE Mar. 2023
Details of expansion
U.S.
LA

UnitedKingdomLondon

Egypt
Cairo

 Headquarters and all service function sites
 1st floor expansion and expansion of audio-related
equipment
 Site for sales and all service functions for European
customers
 Expansion of service-related facilities and office space Technology development site for the original IT system ”pHelix”
 In addition to the development site functions, service provision capabilities areunder expansion
 Office relocation and expansion in line with strengthening of service functions

South
AfricaCape Town

South
Korea

 Site for production of English master files that are the base for subtitling/dubbing
 In addition to English-related services, capabilities for provision of other services
are being expanded. Office relocation and expansion in line with strengthening of
personnel and service functions
 Acquisition of local dubbing studio in May 2022 to strengthen dubbing services
 Office relocation and expansion to strengthen subtitling and dubbing service
capabilities

Construction
progress

90%
Completion
December:
Scheduled forcompletion

November:
Scheduled forcompletion

December:
Scheduled forcompletion

In progress
14Movements in the global video streaming market• Demand continues to grow due to an increase in the number of distribution platforms andthe number of non-English works
1. Increase in distribution platforms
Since 2020, own-brand distribution platforms for
major Hollywood studios have increased andcompetition has intensified
Start ofdistribution

2007

Production and distribution of non-English speaking
films by Disney, Netflix, and others have increased

Distribution
Platform

Brand
⇒

2006

2. Increased production and distribution of
non-English speaking works

Citation from Nihon Keizai Shimbun electronic edition(September 10, 2022)

Increased investment in content worldwide,
connected through locally produced works

－

2008

⇒

2019

⇒

2020

⇒

2020

⇒

2021

⇒

(Previous text omitted)
Competition for users is intensifying and content investment isincreasing. Netflix invested $17.7 billion worldwide in FY2021.
Disney CEO Bob Chapek also said the company is increasing content
investment. While a general comparison is not possible, in FY2021,
TBS' production expenses increased 9% from the previous fiscal
year to 96.1 billion yen, while NHK's expenses were 307 billion yen.
Companies are pinning their hopes on locally produced works suchas the hit South Korean drama "Squid Game" to help retain users.
Netflix plans to distribute 15 original live action films from Japan by2022. Disney has set a goal of independently producing anddistributing over 50 works in the Asia-Pacific region by 2023.
(Subsequent text omitted)

15

Establish a new Live Entertainment business・Net sales decreased, due to the reactionary decline from the special event
demand of the previous year
(billion yen)

1H net sales

1.9
0.2

1.8
0.3

Existing
Entertainment
business

FYE Mar. 2023 Progress Report New initiatives(1) Demonstration experiment for new 3D space
production

1.7

1.5

New
Entertainment
business(2) Participation in the Toranomon Hills Joint Project Toward further business expansion
Strengthening of alliances with major companies
is underway

FYE Mar. 2022
ActualFYE Mar. 2023
Actual16

New initiatives for business model construction
High-definition live viewing
on wide screen
 Demonstration experiment of live viewing
using vertical imaging and state-of-the-art
transparency screens Cooperation from Digital Innovation City
Council (Tokyo) and Mori Building

Toward joint business development with theTokyo Metropolitan Government, Mori Building,
local governments, and major companies

Experiential theme park
Join in projects through a consortium of 11
companies to create and communicate newurban experiences and content

Toward the realization of an Urban
Space Metaverse
17Generate Additional Business Value in the Imaging Systems &Solutions business・Net sales increased by 15% YoY; operating margin increased by 2.2 points to
8.7% YoY
1H net sales and operating margin(before goodwill amortization)(billion yen)FYE Mar. 2023 Progress Report

FYE Mar.
2023 actual

8.7%

FYE Mar.
2022 actual



6.5%

6.5

+15%

7.5

Niche Top Business: High-speed cameras(1) Orders for two new products are strong(2) Stabilization of semiconductor supply will
require timeOptical Measurement Business(1) Optical elements: Orders for 5G are expanding(2) Optical measurement: Recovery in businesstargeting the U.S. and China


Systems for broadcasting stations

Two new services are under proposal anddevelopment(1) Automatic Broadcasting Control System(2) Virtual broadcasting system
FYE Mar. 2022
ActualFYE Mar. 2023
Actual18

Imaging Systems & Solutions Business:
Sales breakdown by business (1H,actual)• Sales increased in Systems for broadcasting stations, Optical Measurement, andImage Processing due to robust orders

1H net sales(billion yen)

6.5

+15%

7.5

Other
ICT
Video network systems for
cardiovascular equipment
CAD

Online delivery system for TV commercials
High speed cameras

Image processing LSI
Optical measurement

Increase in sales

Systems forbroadcasting stations
FYE Mar.2022

FYE Mar.2023

19

High-speed cameras: New products launched• Released two new products in two years (since FYE Mar. 2021); orders are steadily
being received
Compact Lightweight
Launched April 5: FASTCAM Nova S20

Industry-leading shooting speed

1.1 million frames/second
Lightweight model

1/3 of weight of past models
Shock-resistant sealed enclosure

High-resolution
Launched August 4:

・Easy to carry; enables high-speed outdoor
shooting
Applications: electrodewelding experiments for EV
rechargeable batteries, etc.
Customers: Automobile
manufacturers
Picture: Electrode welding experiment

・ Enables high-quality shooting with a highangle of view

FASTCAM Nova R5-4K, R3-4K
Compared to past products

2.3x enhanced resolution→ Achieves 4K resolution
Shooting speed at 4K resolution

1,250 frames/second

Applications: Airflow analysis
for aircraft wings, etc.
Customers: Aircraft
manufacturers
Picture: Airflow analysis using helicopter rotors

20

Optical measurement business• Net sales of both optical elements and optical measurement equipment
increased significantly due to recovery in capital investments.
Optical elements

1H net sales

490

million yen

Expansion in fields including high-speed optical communications and semiconductor
inspection, using state-of-the-art photonic crystal optical control technology

 Orders recovered due to selection as elements for devices for 5G
optical communications
 Promotion of sales activities to develop new markets(1) Start of promotion for 6G optical communications

3.7x

Opticalmeasurement
equipment(2) Introduction of prototypes with a view for entering
the laser processing market

Optical measurement equipment
Expansion of optical measurement systems incorporating proprietary opticalelements into applications including LCD film production and inspection

130

million yen

 Robust sales for applications including inspection of plastic lenses
for smartphones in the U.S. and China
Opticalelements

 Future Prospects
1) Expansion into new fields such as autonomous

Polarization measurement
equipment PA/WPA

driving-related parts inspectionFYE Mar. 2022 1H

FYE Mar. 2023 1H

2) Strengthening of sales in Europe and the U.S.

21

Systems for broadcasting stations• Two new services for broadcasting stations are under development
Automatic Broadcasting Control System A system that automates the management,
editing, and sending of news program
imaging materials
Virtual broad-casting system A system that creates a CG-based virtual
space without the need for sets in studios
 Enables imaging direction not possible on
actual studio sets, with applicability toweather forecasting, news, sports
programs, etc.
Virtual broadcasting system (example image)

Pilot operation is underway for
packaged programs such as news

 Local broadcasters are increasingly
adopting the system
 Planned 2023 net sales are to be 3
times the net sales of 2021
Net sales to local
broadcasters

FYE Mar. 2022
Actual3 times

FYE Mar. 2023
Forecast

FYE Mar. 2024
Forecast

22

Complete Business Transformation
・Operating margin increased by 0.6 points to 3.0% due to improvement ofgross margin in anime production, etc.
1H net sales and operating margin(before goodwill amortization)(billion yen)FYE Mar.
FYE Mar.
2022, actual:

2.4%●2023, actual:

3.0%●

FYE Mar. 2023 Progress Report Improvement of gross margin in the
Anime Production Business Promotion of creation of original IPs

16.7

17.0

FYE Mar. 2022
ActualFYE Mar. 2023
Actual Content production for video streaming
service providers

23

Improvement of gross margin in the Anime Production Business• Gross margin has improved significantly since bottoming out in FYE Mar.
2020 (COVID-19 pandemic)
With the TV Anime Production BusinessFYE Mar. 2019 gross margin as 1, thegraph shows a comparison of the increases
and decreases in profit for each fiscal year
3.9

Factors behind improvementin gross margin Strict management of per-production
earnings

2.6

 Improvement of efficiency of anime
production sites
Through full digitalization of anime production,etc., promotion of efficiency at production sites

 Reduction of fixed costs
Reduction in floor space through establishmentof remote work systems and digitalization of
document management

0.2
-0.5
FYE Mar.2020

FYE Mar.2021

FYE Mar.2022

FYE Mar.2023 1H

24Strengthening of earnings base through expansion of original IPs• We aim to develop varied original IPs and strengthen our earnings base
"ODD TAXI"
April 2021 TV anime broadcast
April 2021 Distribution on Amazon Prime(Currently being distributed on otherplatforms)
April 2022 Feature film production

Following feedback to TV anime
broadcasts, we are expanding
operations of feature film
production, events, exhibitions,stage productions, etc.
©P.I.C.S./Odogawa Transportation Partners"The Apothecary Diaries"
・Hero Bunko published by Shufunotomo
Infos Co., Ltd.
・From 2017: Comic book adaptation andlicensing out
・Series cumulative total: 18 million
copies*Includes comics and paperbacks

Further development isbeing planned(Written by Natsu Hinata, illustrated by Touko Shino,published by Shufunotomo Infos Co., Ltd.)"Restaurant to
Another World""BULLBUSTER"

・Hero Bunko published by Shufunotomo
An original project developed solely by
P.I.C.S. Co., Ltd.; two novelization
volumes from KADOKAWA are available

Infos Co., Ltd.
・2016: Comic book adaptation andlicensing out
2021: TV anime second series aired
through OLM production©P.I.C.S.

Further development
is being planned

Further development isbeing planned(Written by Junpei Inuzuka, illustrated by Katsumi Enami,
published by Shufunotomo Infos Co., Ltd.)

25

SDGs: Advancing initiatives aligned with three themes• Group-wide SDG-related activity: Hands-on classes for children
 Start of a group-wide project offered together with local communities to provide hands-onclasses for children to learn independently through curiosity and inquisitiveness via imaging,and to nurture the ability of children to think and create on their own
 We will continuously promote the project under the project name “CREDUCATION®
ACADEMY”

Together with local communities, hands-on classes to nurture the abilityof children to think and create on their own"Imaging culture"×"Hands-on education"

×"Communities"* "CREDUCATION ACADEMY": A term combining "Creative" and "Education". "CREDUCATION" is a registered trademark of IMAGICA GROUP.

26

Progress rate by Key Strategy (net sales)・Overall progress rate of 47% with respect to full-year plan; all businesses
progressing according to plan
(Progress rate: 60.5%)■Global E2E Business
Services for video streaming service providers continues
to do well; site expansion is scheduled for completion by
the end of the year, with the aim of expanding orders

16.7■Transformation
Progress is underway toward achievement of plans,
including improvement of anime earnings and productionof content for video streaming

Full-year plan
4.6 billion yen

1.8(Progress rate: 40.5%)■ Imaging Systems
Stabilization of semiconductor supply for high-speed
cameras will take time, but progress is steady overall

Full-year plan
27.6 billion yen(Progress rate: 39.1%)■Live Entertainment Business
Strengthening of alliances with major companies(billion yen)

Full-year plan
18.5 billion yen

7.5(Progress rate: 42.9%)

17.8

Full-year plan
39.6 billion yen

27Contact for inquiries:
IMAGICA GROUP Inc.
Corporate Management Department
1-14-2 Kaigan, Minato-ku, Tokyo, 105-0022, Japan
Email：ir@imagicagroup.co.jp
URL：https://www.imagicagroup.co.jp/
DISCLAIMER:
The forward-looking statements for the current and future business periods described in thisdocument are formulated 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 and assumptions made, as wellas possibility of future changes that may occur in business management and internal andexternal circumstances.
28