Financial Results Presentation
Fiscal Year Ended March 31, 2022
(FYE Mar. 2022)
May 17, 2022

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

Contents of Today’s Presentation

Ⅰ

Financial Results Summary for FYE Mar. 2022

Ⅱ

Progress of the Mid-Term Plan "G-EST2025"

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, 2022 → FYE Mar. 2022

2

Contents of Today’s Presentation

Ⅰ

Financial Results Summary for FYE Mar. 2022

Ⅱ

Progress of the Mid-Term Plan "G-EST2025"

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, 2022 → FYE Mar. 2022

3

Key Points of Financial Results

１

２

３

Company-wide operating income before goodwill
amortization was 5.1 billion yen, the highest since the listing.

Operating income before goodwill amortization returned
to positive in all segments

Net income decreased by 700 million yen due to the sale ofa subsidiary in the previous year4Highlights of Financial Results
Sales decreased mainly due to sales of a subsidiary, etc., but both operating income
before goodwill amortization and operating income substantially increased.

(Million Yen)

Net sales

Operating income before
goodwill amortization

80,184

5,131(6,543)+4,811

YoY

94,09086,727

YoY

Operating income(loss)Net income attributable toowners of the parent

YoY

YoY

3,417

2,729

+4,501(725)
Gain on the sale of SDI shares(¥4,936 million) was posted to
extraordinary income

80,184
5,131

3,454

3,417

2,729

2,456

1,351
664

320

△ 1,084
FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

5

Analysis of Changes in Net Sales (YoY)
Excluding the sale of a subsidiary (SDI) and the impact of accounting standards, sales
increased in all segments.
(Million Yen)

Production Services
Overall (4,892)
Production Services
Overseas (6,971)

12,666

86,727

1,864
Content
Creation

2,079
Production
Services(Domestic)

Increase insales due toconsolidationof Pixelogic,
etc.

（19,637）

1,473

Decrease insales due to thedeconsolidationof SDI

Imaging
Systems &Solutions80,184（4,839）（147）

Impact ofaccounting
standards

Other

FYE Mar. 2022
ActualFYE Mar. 2021
Actual△6,5436

Analysis of Changes in Operating Income before goodwill
amortization (YoY)
Production Services 4.2bn yen, Content Creation 1.0bn yen, Consolidated: 4.8bn yen
income increase(Million Yen)

Production Services
Overall +4,217
Production Services(Overseas)+2,306527

1,779

Contribution to
profit fromdeconsolidationof SDI

1,911
Content
Creation

Imaging
Systems &Solutions

（164）

5,131

Consolidation
adjustments

Increase due toconsolidation of
Pixelogic, etc.

1,028

320

（270）

Production
Services(Domestic)FYE Mar. 2022
ActualFYE Mar. 2021
Actual+4,8117

Analysis of Changes in Operating Income before goodwill
amortization (Vs. Initial Plan)
Increased by 2 billion yen from the initial plan thanks to recovering orders received,
strong E2E services, and the effect of restructuring
・Strong performance of E2E services andpost-production services businesses
・Reduction of fixed costs throughstructural reforms
Recovery in orders for TV
commercial production and Livemusic events

3,100

860

387

Content
creation

Production
Services(Domestic)(Million Yen)

Strong performance of
E2E services for video
streaming service
providersConsolidation of
the new
subsidiary

（224）

239

Production
Services(Overseas)

Imaging
Systems &Solutions

586

5,131

183
Other

Sluggish demand
due to the impact
of COVID-19

Production Services
Overall 1,099

FYE Mar. 2022
Initial plan

2,031

FYE Mar. 2022
Actual8

Overview by Segment (FYE Mar. 2020-FYE Mar. 2022)
Operating income
before goodwill amortization

Net sales
26,205

Content Creation

19,809(Million Yen)

21,674

Increases in sales and profits587

music events
(359)
FYE Mar. 2020

FYE Mar. 2021

47,723

46,973FYE Mar. 2022

FYE Mar. 2020

(440)
FYE Mar. 2021

Production Services

42,080

Thorough cost management at theater movie and TV
animationFYE Mar. 2022

3,399

718

Recovery in orders for TV commercial production and live

Significant increase in profit despite lower sales
due to sale of SDI

Domestic: Reduced fixed costs due to restructuring andstrong sales of E2E services and game production-related(818)

services (3DCG production and debugging)
FYE Mar. 2020

21,975FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

Overseas: Strong performance of E2E services for video
streaming service providers

21,006

Decrease in sales and profits

Imaging Systems& Solutions

17,639
2,758


2,046

Systems for broadcasting stations : Struggle due tosluggish demand and limitations on sales activities

1,776



High-speed cameras: Struggled in the 1H due to theimpact of COVID-19, but recovered from the 2H onwards

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

*Production Services and Imaging Systems & Solutions in FYE Mar. 2020 and FYE Mar. 2023 are adjusted to reflect the change in segment classification.

9

FYE Mar. 2023 Full-year Forecasts
FYE Mar. 2022

(Million Yen)

ActualFYE Mar. 2023
Forecast

TopicsYoY% YoY

Net sales＋7.8 billion yen (＋9.7%）

80,18488,000

7,816

9.7%

5,131

5,200

69

1.3%

(Margin)

6.4%

5.9%

Operating income

3,417

3,600

(Margin)

4.3%

4.1%

3,934

3,300

Net sales
Operating income
before goodwill
amortization

Ordinary income

TV Commercial production, dramadelivery for OTT, etc.

 Production Services

Continued strong performance foroverseas OTT

 Imaging Systems & Solutions
183

(634)

5.3%

(16.1%)

Improved profitability in systems forbroadcasting stations , etc.

Operating income
Depreciation increased due to thetransfer of the Takeshiba office andNet income
attributableto owners of parent

2,729

Earnings per share
(Yen)

61.49

Dividend per share Content Creation

2,100

(629)

(23.0%)

investment for growth.

Net income

15.0 yen

47.30
15.0 yen(14.19)－(23.0%)－

Forecast a decrease YoY due to adecrease in income taxes (profit)
resulting from tax-effect accounting
10

Contents of Today’s Presentation

Ⅰ

Financial Results Summary for FYE Mar. 2022

Ⅱ

Progress of the Mid-Term Plan "G-EST2025"

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, 2022 → FYE Mar. 202211

(Re-posting) Mid-Term Plan “GｰEST2025”
Become a Group consisted of a balanced, highly profitable businesses that is resilient evenunder 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
12

(Re-posting)
Financial Goals in the Mid-Term Plan "G-EST2025"
Targeting to become a balanced business structure■ Global E2E(billion yen)FYE Mar. 2021 Actual

Net sales

Composition bybusiness segment※

69■ Live Entertainment■ Imaging Systems &SolutionsFYE Mar. 2026 Target

Composition bybusiness segment

100

25%
51%

10%

8

(Before goodwill amortization)※

0.9

2020年度実績

25%

2025年度Operating income

25%

40%

4%
20%

2020年度(調整)■Transformation

100%

25%

35%

30%
10%

2025年度*Net sales and operating income for FYE Mar. 2021 were adjusted for the impact of changes in accounting standards in overseas subsidiaries and the Imaging Systems &Solutions for comparison.

13

Management Indicators for FYE Mar. 2023
Net sales: Aim to exceed the Mid-Term Plan by at least 6%, and to exceed the YoY results
by at least 10%.

(100 million yen)

+6.7%
750

690

801

825

880

900

1,000
ActualPlan
Mid-Term
Plan

Act
ual

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2024

FYE Mar. 2026

Operating income margin: Aim to exceed Mid-Term Plan despite a YoY decline in profit
margin due to investments for growth.

(Before goodwill amortization)

Actual6.4%
4.0%

1.0% Actual
Act
ual

FYE Mar. 2021

FYE Mar. 2022

8.0%

Plan
5.9%

Mid-Term
Plan

6.0%

5.0%

FYE Mar. 2023

FYE Mar. 2024

FYE Mar. 2026

14

Key Points of Performance for FYE Mar. 2023

１

Investment for growth towards 2025 (approx. 3.5 billion
yen)

２

Aiming for sales in Global E2E, Live Entertainment,
and Transformation businesses to exceed plannedtargets in the Mid-Term Plan

３

Aiming for higher sales and profits in Imaging Systems& Solutions business by improving profitability

15

Initiatives by Key Strategy
Become a Group consisted of a balanced, highly profitable businesses that isresilient 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
16

Expand Global E2E Business
In FYE Mar. 2023, we intend to increase sales by 15% YoY, aiming for a level significantly
higher than Mid-Term Plan for FYE Mar. 2026.
Net sales(Billion yen)

+15％

Strategies for FYE Mar. 2023

27.6

24.1
16.7
16.6

23.0
20.0
15.7

 Continue to focus on services
for video streaming service
providers in strong demand

25.0

17.2

Overseas

11.1

5.6
FYE Mar.
2021
Actual Forward-looking investments
for growth(1) Expand capacity(2) Improve productivity andreduce costs

Domestic

7.5

7.6

7.3

7.8

FYE Mar.
2022
ActualFYE Mar.
2022
Plan

FYE Mar.
2024
Mid-Term PlanFYE Mar.
2025
Mid-Term Plan

*Figures for FYE Mar. 2021 are adjusted for the impact of M&A of overseas companies and intersegment sales for comparison.
*Figures for FYE Mar. 2021 through FYE Mar. 2013 are adjusted for intersegment sales.

17Forward-looking Investments for Growth
Continue to secure competitive advantage through “Expand capacity" and “Raise
productivity and reduce costs "Expand Capacity
Raise productivity andreduce costs•

Expand LA office and London office
Expand audio-related facilities and creative services•

Relocate Egypt office
Expand audio-related facilities through the transfer of a new office,improving the security level•

Invest in a digital cinema distribution company
Use partnerships with MetaMedia, which provides distribution services to theaters•

Make additional investment in pHelix, our proprietary IT system
Further streamlining of E2E-related operations by promoting development•

Acquire excellent human resources in Egypt
Achieve low-cost operations and 24-hour response to customers•

Expand the English service team in South Africa
Low-cost translation of subtitled/dubbed English files bynative South African English speakers

LA Office

New Egypt office18

Establish a new live entertainment business
We operate businesses in 3 domains. In FYE Mar. 2023, we aim for sales to exceed the
Mid-Term Plan.
Net sales

10.0(Billion yen)

4.6

4.0 billion yen
Mid-term Plan(+0.6 billion yen)

6.0

3.2 billion yen(+1.3 billion yen)

4.6

1.0

1.2

2.3

5.4

0.5

2.4
FYE Mar.
2021
Actual3.5

3.4

FYE Mar.
2022
ActualFYE Mar.
2022
Plan

3.7

FYE Mar.
2024
Mid-term PlanFYE Mar.
2025
Mid-term Plan

Existing entertainment business

2.9

4.5

New entertainment
business

Mid-term Plan

Strategies for FYE Mar. 2023

 Hybrid live, high-definition live
viewing・Strengthen alliances with prime
customer companies
 Experiential theme park (Metaverse)
・Produce e-sports contents
・Cooperate in the development of avirtual live platform for "PIACORPORATION"*Figures for FYE Mar. 2021 to FYE Mar. 2026 are adjusted for intersegment sales.

19

Produce Virtual Spaces
Leveraging the visualization technology cultivated through live entertainment in the
metaverse world
Hybrid Live

Experiential theme park

Live streaming in collaboration
with NTT DoCoMo

Combining physical and virtual experience
E-sports theme park
Content production

Music live in the VR
space provided by PIA

High-definition live viewing
Three-screen high-definition
video in collaboration withpartners companies

Priority fields
Entertainment Metaverse
Urban Space Metaverse

20Generate Additional Business Value in the Imaging Systems &Solutions business
In FYE Mar 2023, we are aiming for a 15% increase in net sales YoY and a 11% range inoperating income margin.
Net sales and operating income margin(before goodwill amortization)(Billion yen)

Strategies for FYE Mar. 2023

FYE Mar. 2023 PlanFYE Mar. 2022
Actual

10.6%

●

●

+15％

14.4

11%
●

18.5

25.0
22.0

 Expand and secure earnings in niche top
businesses(Business that are targeting niche markets but have highmarket share and profitability)(1) High-speed camera (Market share: Approx. 25%)

16.1

(2) Online delivery system for TV commercials(Market share: Approx. 30%)
(3) Video network system for cardiovascular systems(Market share: Approx. 30% share) Improve profitability in systems forbroadcasting stations
 Expand optical measurement businessFYE Mar.
2021
ActualFYE Mar.
2022
ActualFYE Mar.
2022
Plan

FYE Mar.
FYE Mar.
2024
2025
Mid-Term PlanMid-Term Plan

*Figures for FYE Mar. 2021 were adjusted for the effect of accounting standards changes and intersegment sales for comparison.
*Figures for FYE Mar. 2021 through FYE Mar. 2013 were adjusted for intersegment sales.

21

Sales Breakdown by Business Segment and Growth Image for
FYE Mar. 2023
Aiming for more than 20% growth in niche-top businesses and more than 30% growthin systems for broadcasting stations and optical measurement businesses
Net sales
16.1 billion yen

18.5 billion yen
Other
CAD
ICT

+15%

Video and image processing LSIs
Optical measurement

Opticalmeasurement+30% or
more

Systems for broadcastingstations

Systems forbroadcastingstations＋30%

Video network system for
cardiovascular
Online delivery system for
TV commercials

Niche topbusinesses+20% or moreFYE Mar.
2022ActualHigh-speed camera

FYE Mar.
2023Plan

22

Strategies for Niche Top Businesses• Aiming to further expand and secure earnings through new product releases,
expansion of market share, etc.
 Strengthen sales by releasing new products(3 products in year)
High-speed camera(Increase profits)"FASTCAM Nova S20" launched April 5

 Steady growth in market share for automotive crashexperiments due to sales of micro camera heads
Ultra-compact camera head "MH6 ST Camera Head"

Online delivery
system for TV(Secure profits)

Video network
system for
cardiovascular(Secure profits) Strengthen sales capabilities by enhancing human resources tofurther increase market share by 30%
 Continued stable operation for repeat use by existingcustomers
 Provides medical information systems for diagnostic imaging
that specialize in the cardiovascular field, and has been
installed in many hospitals throughout Japan (over 30%
market share).
 Aiming to further expand market shareby launching cloud services, etc.

23

Strategies for systems for broadcasting stations• Improve profitability of "selling products“ business and expand business of "selling
services“ business

Improve
profitability of"selling
products“business

Results for FYE Mar. 2022 struggled due to limited sales activities
caused by the impact of COVID-19. In FYE Mar. 2023, we aim toincrease sales and improve profitability by proposing new services,
strengthening sales force, etc.
 Propose a system that can be operated by a small number of people byautomating the process of managing, editing, and sending out video
material for news programs for broadcasting stations.
 Acquire MEDIA SOLUTIONS.INC to further strengthen sales capabilities
 Providing a new video transmission and production environment for
remote production in a subscription system
Usage example at homeExpansion of"selling
products"
business"Photron Live Cloud Service“・Started sales in January 2022
・Video transmission service available over the general
Internet, low-cost and easy for everyone to use.

 Prepare for deployment of network operation
monitoring services*Service that monitors video equipment and other problems on
the network
24

Strategies for Optical Measurement Business
Developing 2 businesses: Optical Elements and Optical Measurement Equipment

OpticalElement

OpticalMeasurement
EquipmentDesigning and marketing optical elements using"photonic crystals," a cutting-edge light control technology,
to meet customer needs.



Developing in fields such as high-speed optical communications andsemiconductor inspectionProprietary measurement system incorporating polarized light sensors into highspeed camera



Since it can measure invisible minute distortions with polarized light, we will
strengthen sales to overseas film manufacturers as a measurement device inproduction lines for liquid crystal films and other products.

Products

Usage
Customer/Unit price

High-speed
polarization
cameraCRYSTA

Birefringencemeasuring device
KAMAKIRI

For glass film distortion testing forsmartphones (R&D)

For liquid crystal TV film production lines

Glass film manufacturer: @5 million to 10
million yen

Film manufacturer/@30 million to 100
million yen

25

Sales Plan for the Optical Measurement Business
In FYE Mar 2026, We aim for sales scale of 2 billion yen, approximately 2.7 times comparedto FYE Mar. 2022
(100 million yen)

20

Opticalelement

About 2.7x

15

Optical measurement+30％
Or more10

50

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2026

ActualPlan

Mid-term plan
26

Complete Business Transformation
Profitability is steadily improving, we aim for operating income margin in the 4% range in
FYE Mar. 2023
Net sales and operating income margin(before goodwill amortization)
5.0%

●

3.0%
0.0%
△3.0%

5.0%

FYE Mar.
2023 Plan

●

4%
●

●

(100 million yen)●●

Strategies for FYE Mar. 2023●

 Promote the creation of unique IP

●

346

385

Mid-Term Plan

396

390

400

 Expand content production for video
streaming service providers
 Perform thorough cost control intheatrical film, TV drama andanimation productionFYE Mar.
2021
ActualFYE Mar.
2022
ActualFYE Mar.
2023
Plan

FYE Mar.
FYE Mar.
2026
2024
Mid-Term Plan Mid-Term Plan

*Figures for FYE Mar. 2021 through FYE Mar. 2026 are adjusted for intersegment sales.

27

<Complete Business Transformation>

Monetization of Content Creation Business
Create intellectual properties (IP) and expand content production for video streaming
service providers (OTT)
Creation of original IPs• Plan and Create original work
"ODD TAXI", planned/written by P.I.C.S., became
popular on TV and OTT and was made into a movie.

Content for OTT• Production of Original drama
Original drama for Netflix, "Alice in Borderland"
The season 1 was a worldwide hit.
Season 2 is under production and scheduled for
distribution in December 2022.

© P.I.C.S./Kotogawa Kotsu Partners• IP development for paperbacks

OLM, Inc. is animating "Isekai Shokudō" from theInfos Hero Collection. It expanded to season 2 and asequel was produced.

© Junpei Inuzuka, Yutaka, Shufunotomo Infos Co.,LTD./Production
Committee for "Isekai Shokudo 2"*Images are not displayed due to copyrightand other reasons.

© Haro Aso, Shogakukan / ROBOT

28

New Mid-Term Plan “GｰEST2025”
Become a Group consisted of a balanced, highly profitable businesses that isresilient 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
29

<Strategic Measures>Management Reforms through DX
Digital transformation (DX) in both business and management infrastructure(administration) is progressing smoothly and will accelerate in the future.
Remote live production andediting

Business
evolution

Digitization of all animation
production workflows
Automating video processing
and visualizing status

Visualization of businessperformance and theestablishment of a business
management system

Strengthening ofbusiness base

Reduction of clerical manhours through paperless andelectronic operations
Unification of personnel
information data
Strengthening security andexpanding the cloudenvironment• IMAGICA EEX held remote online live with Korean artists• Provision of video sharing cloud service "Photron Live Cloud Service"• Completed full digitization of operation by in-house creators andintroduction of production management system⇒ Expand introduction to external creators in FYE Mar. 2023
• Development of post-production booking and coordination systems• Operation of a communication system with customers• BI-tool "ZEUS Cloud" introduced in the 2H of FYE Mar. 2022
⇒Started initiatives to share management data and upgrade analysis operations• Contributed to streamlining operations by introducing electronic contract systems and AIbased contract checks• Introduction of the "Talent Palette", a talent management system, in the 2H of FYE Mar
2022⇒ Promoting the visualization of human resource information, including the Group's management
personnel• Achieved network-wide integration for 4 integrated management divisions• We will continue to strengthen the ICT environment after FYE Mar 2023.
30

<Strategic Measures>

Strengthen R&D Capabilities and Secure & Activate Talented
Employees
 Completed integration of R&D divisions (83 staff members + 4 new employees)
 Accelerate development by visualizing the Group's technological development
skillsStrengthen
R&D
capabilities Participation in SIGGRAPH Asia 2021 as a Gold Sponsor, led by the Advanced
Research Group, which is responsible for the Group's research and development
・Promote technological capabilities externally, and lead to new collaborations andstronger recruitment

Exhibitionbooths in
SIGGRAPH Asia

Secure &Activate
Talented
Employees

 Creating an environment for securing creative & technology human resources
・Creators: establish flexible employment arrangements such as outsourcing
・Engineers: currently defining requirements for necessary personnel, strengthening
recruitment
 Implementation of training to promote diversity
・Training to foster a mindset that accepts diversity
 Completed introduction of talent management system
・Promoting Visualize and Utilization of Management Human Resources within the
Group

31

SDGs: Promoting Initiatives in Accordance with 3 Topics
2. Creation of a production process that isenvironmentally and people-friendly

PHOTRON LIMITED introduced
Green Power to Head Office

Our Group company PHOTRON LIMITED will begin using
the "Green Power Provision Service" provided to tenants by
Mitsui Fudosan Building Management Co., Ltd., the lessorof the Jimbocho Mitsui Building, which is the tenant, in
April.
By introducing this service, we decided to convert 100% of
the electricity used at our head office to virtually renewableenergy.

3. Development of human resources andpromoting diversity

Opened indoor farms as a new
initiative to diversify employment

IMAGICA DIGITALSCAPE Co.,Ltd., PHOTRON LIMITED, andCosmo Space Co., Ltd. of our group opened an indoor farmin April 2022 using IBUKI, an indoor farm-type employment
support service for people with disabilities.

Exterior view of the indoor farm

Herb cultivation in an indoor farm32

Progress to FYE Mar. 2023 and Future Growth Plan
Steady progress toward FYE Mar. 2026. We make investment for growth in FYE Mar. 2023.
+6.6％

+6.8％
Net sales

Mid-term Plan

Actual
690
167
29
144
346
FYE Mar. 2021

750

Actual
801

825

Plan
880

215

276

40

46

Mid-term Plan

185

241

32
163

45
161

190

185

370

385

380

396

Operating income
margin (before goodwill
amortization)FYE Mar. 2022

FYE Mar. 2023

Actual

Plan

6.4%
●

Actual4.0%●

FYE Mar. 2021

FYE Mar. 2022

1.0%●(100 million yen)

5.9%
●
5.0%
●

FYE Mar. 2023

Mid-term Plan

900

Mid-term Plan
1,000

230
60

250

■ Global E2E100■ Live Entertainment■ Imaging Systems

220

250

390

400

FYE Mar. 2024

FYE Mar. 2026

■ Transformation

8.0%
●

6.0%
●
●

FYE Mar. 2024

& Solutions

Mid-Term PlanFYE Mar. 2026

*Sales totals by strategy for FYE Mar. 2021(Actual) and (Actual)FYE Mar. 2023(Plan) do not match the totals because consolidation eliminations are not taken into account.

33

Breakdown of Operating Income by Strategy
Significant improvement in profitability and steady progress toward being a well-balanced,
highly profitable company

Operating income(before goodwill amortization)

Significant improvement in profitability
Generating profits in each businessFYE Mar. 2021
ActualFYE Mar. 2023
Plan

FYE Mar. 2026
Mid-term Plan

0.9 billion yen

5.2 billion yen

8 billion yen■ Transformation■ Global E2E

25%

30%

100%

35%
■ Imaging Systems &Solutions10%■ Live Entertainment

34

(Re-posting)FYE Mar. 2023 Full-year Forecasts
FYE Mar. 2022

(Million Yen)

ActualFYE Mar. 2023
Forecast

TopicsYoY% YoY

Net sales＋7.8 billion yen (＋9.7%）

80,18488,000

7,816

9.7%

5,131

5,200

69

1.3%

(Margin)

6.4%

5.9%

Operating income

3,417

3,600

(Margin)

4.3%

4.1%

3,934

3,300

Net sales
Operating income
before goodwill
amortization

Ordinary income

TV Commercial production, dramadelivery for OTT, etc.

 Production Services

Continued strong performance foroverseas OTT

 Imaging Systems & Solutions
183

(634)

5.3%

(16.1%)

Improved profitability in systems forbroadcasting stations, etc.

Operating income
Depreciation increased due to thetransfer of the Takeshiba office andNet income
attributableto owners of parent

2,729

Earnings per share
(Yen)

61.49

Dividend per share Content Creation

2,100

(629)

(23.0%)

investment for growth.

Net income

15.0円

47.30
15.0円

(14.19)－(23.0%)－

Forecast a decrease YoY due to adecrease in income taxes (profit)
resulting from tax-effect accounting
35

Appendix.

36

Consolidated Statements of Income
FYE Mar. 2022

FYE Mar. 2021

(Million yen)

ActualActualYoY% YoY

Net sales

86,72780,184△ 6,543△7.5%

Gross profit

20,582

23,386

2,803

13.6%

23.7%

29.2%

△ 1,084

3,417

4,502

ー

ー

4.3%

△ 1,343

3,934

5,278

ー

ー

4.9%

Extraordinary income

7,138

1,301

△ 5,837△81.8%

Extraordinary loss

2,240

2,037

△ 202

△9.1%

3,554

3,198

△ 356

△10.0%

3,454

2,729

△ 724

△21.0%

320

5,131

4,811

1501.9%(Gross margin)

Operating income (loss)(Operating margin)

Ordinary income (loss)(Ordinary margin)

Net income (loss) before
income tax
Net profit attributable toowners of parent(Ref.) Operating income before
goodwill amortization*Operating income before goodwill amortization includes operating income, amortization of goodwill, amortization
37

Consolidated Balance SheetsFYE Mar.2021

FYE Mar.2022

30,44041,066

10,625

6,908

6,420

(488)

Non-current assets

30,00532,3172,312

Of which, goodwill

12,048

11,482(565)

Total Assets

60,44673,384

12,938Current liabilities

22,11732,278

10,161

Of which, short-term loans payable

7,402

4,170

(3,232)

Non-current liabilities

8,495

7,079

(1,415)

Of which, long-term loans payable

5,384

4,019

(1,365)

Total Liabilities

30,61339,358

8,745

Shareholders' equity

27,14929,963

2,814

301

1,185

883

11

-

(11)

2,370

2,876

505

Total Net Assets

29,832

34,025

4,192

Total Liabilities and Net Assets

60,44673,384

12,938(Unit: million yen)

Current assets
Of which, cash and deposits

AssetsLiabilities
Net Assets

Accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests

YoY

38

Consolidated Statements of Cash Flow
(Million Yen)FYE Mar. 2021

FYE Mar. 2022

Net income (Loss) before income tax

3,554

3,198

Depreciation and amortization

2,757

2,059

871

1,406

－

△ 414

△ 4,936△ 417

Decrease (increase) in trade receivables and contract assets△ 52△ 1,992

Decrease (Increase) in inventories

2,741△ 6,770

26

2,431

Increase (decrease) in agreement liabilities△ 1,635

5,393

Income taxes paid

△ 1,868△ 389

Other, net△ 2,051

2,911

△ 592

7,414

△ 1,500△ 3,996

△ 709

△ 612

5

944

5,859

417

△ 23

△ 546

Other, net△ 4,995△ 134

Cash flows from investing activities△ 1,364△ 3,928

Net increase (decrease) in short-term loans payable

3,596△ 2,023

Proceeds from long-term loans payable

4,939

－

Repayment of long-term loans payable△ 4,048△ 1,974

Other, net△ 3,018

△ 186

1,469

△ 4,183

2

211

△ 485

△ 486

14

48

6,856

6,419

Amortization of goodwill
Loss (gain) on sale of investment securities
Loss (gain) on sale of shares of subsidiaries and associates

Decrease (Increase) in notes and accounts payable-trade

Cash flows from operating activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of investment securities
Gain on sales of subsidiary stock accompanying a change inthe scope of consolidation
Payments of leasehold and guarantee deposits

Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
accompanying change in the scope of consolidation
Cash and cash equivalents at end of period

39

Financial Results by Segment
FYE Mar. 2021

(Million Yen)

Content Creation

Solutions% YoY

19,80921,674

1,864

9.4%

Operating income (loss)

△ 440

582

1,023

ー

ー

2.7%

goodwill amortization

△ 440

587

1,028

ー

Net sales

46,97342,080△ 4,892△10.4%△ 2,223

1,726

3,949

ー

ー

4.1%

goodwill amortization

△ 818

3,399

4,217

ー

Net sales

21,006

17,639△ 3,366△16.0%

2,046

1,740

△ 305

△14.9%

9.7%

9.9%

2,046

1,776

△ 270

△13.2%△ 1,063△ 1,211

△ 147

ー

△ 466

△ 631

△ 164

ー

86,72780,184△ 6,543△7.5%△ 1,084

3,417

4,502

ー

320

5,131

4,811

1501.9%(Operating margin)

Operating income (loss)(Operating margin)

Operating income(Operating margin)

Operating income before
goodwill amortization
Net sales

Other
Operating loss
Net sales

Consolidated total

YoY

Net sales

Operating income (loss) before

Imaging Systems &ActualActualOperating income (loss) before

Production Services

FYE Mar. 2022

Operating income (loss)
Operating income before goodwill
amortization40

Major Topics for April to July 2021
Apr. 5, 2021
P.I.C.S.

May 26, 2021
PhotronThe TV animation "ODD TAXI,"
planned and written by P.I.C.S.,
aired from April to June 2021 in TV
Tokyo's late-night slot. Currently
available on Amazon Prime Video!

Launched a new version of thelearning video sharing platform"CLEVAS" for educational andtraining institutions that supports
Zoom integration.

*As of July 2021

Jun. 1, 2021

Jul. 7, 2021

IMAGICA Entertainment
Media services

IMAGICA Entertainment
Media Services, IMAGICA Lab.

Absorbed IMAGICA SDI Studio andcommenced operations as
Shiodome Sound Studio

Received awards at the 25th JPPA
AWARDS 2021, a competition forvideo and audio technology

Jun. 29, 2021
IMAGICA GROUP

Jun. 30, 2021
Imagica Digital Scape

Jul. 15, 2021
ROBOT

Participated as the Gold Sponsor in
the International Conference
SIGGRAPH Asia 2021 on CGs andinteractive technologies. Plan to
introduce a number of examples of
the Group's latest technologies andapplications to the industrial field

The company has been certified asa Silver Partner by an international
certification group (ISTQB) for its
software testing.
Aiming to expand test operations
such as games, web, and apps

Started airing the new ABEMA
original-series drama "Sakeguse 50"
directed by Yuki Kobayashi at
ROBOTAnimation
Produced by
P.I.C.S.×OLM© P.I.C.S./Odogawa Kotsu Partners

Jul. 22, 2021

IMAGICA Entertainment
Media Services

First in Japan! Introduced DTS: X
system in the preview room torealize surround sound thatenhances immersive feelingMajor Topics for August to October 2021
Aug. 11, 2021
IMAGICA EEXAug. 19, 2021
IMAGICA EEXAug. 20, 2021
COSMO SPACE

Aug. 20, 2021
IMAGICA Entertainment

Joint development with W TOKYOof "Virtual TGC (beta version)," anapplication that allows visitors toexperience Tokyo Girls Collection in
a VR space

Launched "Freelance Support"
service to support freelancers suchas games, videos, and the web
creators

Produced promotional video andcurriculum video for"Gochisousama Cooking School,"an online cooking school forchildren run by chef Shinpei
Kurihara.

Film process staff won the 50th
(FYE Mar 2021) Excellent
Production Technology Award(formerly Shibata Award)
sponsored by the Japan Associationof Film Television Technologies.

Aug. 23, 2021
IMAGICA Entertainment

Sep. 27, 2021
Photron

Sep. 28, 2021
COSMO SPACE

Oct. 12, 2021
ROBOT

Photography and content
direction for MIYAVI Virtual Live
6.0 in Kyoto Kiyomizu Temple"MIYAVI in KIYOMIZU".

Netflix original series "Alice in
Borderland" received the Best
Creative Beyond Border Award at
the Asian Contents Awards

Launched on-line sales of "Cine
Keep 2TM", an ammonium acidgas absorption agent that is
effective in preventing film frombeing stored

Japanese 2D CAD Software "ZuNan RAPIDPRO21" and "Zu-Nan
RAPID21" were released on
October 27th for all people
involved in drawings

Major Topics for October to December 2021
Oct. 25, 2021
IMAGICA EEXCOSMO SPACE
Created a fashion show in the
Metaverse era at Tokyo Girls
Collection with its spatialpresentation and cutting-edge
video technology!

Nov. 1, 2021
PhotronNov. 1, 2021
IMAGICA EEX

Nov. 24, 2021
IMAGICA GROUP

Acquired all shares of ISLWARE Co.,Ltd

Implemented a new form of online
live distribution with NTT DoCoMo
with the aim of expanding the live
business

Notice of Investment and Business
Alliance in Tokyo e-Sports Gate Co.,Ltd.

(C)Mynavi TOKYO GIRLS COLLECTION 2021 AUTUMNWINTER

Dec. 3, 2021
ROBOT

Dec. 12, 2021
IMAGICA GROUP

Dec. 28, 2021
ROBOT

ROBOT's artist Yujin creates
animation for NHK's Minna no Uta"Shin-kokyu" was broadcast from
December 2021 to January 2022.

IMAGICA GROUP "Sustainability
Site" is newly established - Aiming
to realize an affluent andsustainable society with "visual" at
its core.

NHK's SDGs campaign characters,"Ao to Kii," a short animation
featuring Ao, the water fairy, andKii, the light fairy, was broadcast
on NHK E-television.

Dec. 29, 2021
IMAGICA Lab.
COSMO SPACEIMAGICA Lab. and COSMO SPACE
provide technical cooperation for
the MIYAVI Virtual Live 6.0 in
Kyoto Kiyomizu Temple "MIYAVI in
KIYOMIZU", a reenactment of thelegendary live performance in a VR
space.

Major Topics for January to March 2022
Jan. 31, 2022
PhotronStarted offering Photron Live Cloud
Service to transmit/share images
with high quality and low delays

Feb. 8, 2022
COSMO SPACE
Produced "NEC Networks SII
Digital×Town" 5G Lab Contents

Feb. 15, 2022
Imagica Digital Scape
Imagica Digital Scape sponsorede-sports Grand "REALFIGHT"
online tournament for amateur
gamers on Feb. 26 (Sat.)

Feb. 17, 2022
PhotronLaunched SQ CAD, a new 3D CAD
software for the productionengineering field

Mar. 14, 2022
IMAGICA EEXMar. 17, 2022
IMAGICA EEXMar. 25, 2022
Imagica Digital Scape

Mar. 31, 2022
PhotronLaunched Virtual TGC, the official
TGC metaverse that fully recreates
the world of Tokyo Girls Collection!

Produce cutting-edge XR arena withlarge 4-sided LED panels and fullscale XRImaging Systems &Solutions!

Announced the production of theanimated film "Tenjin". Participatedin the "Anime no Tane 2022"
project commissioned by the
Agency for Cultural Affairs.

Launched FASTCAM Nova S20, ahigh-end compact high-speed
camera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/
Twitter：https://twitter.com/IMAGICAGROUPDISCLAIMER:
The forward-looking statements for the current and future business periods described in this document 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 fromnumerical forecasts due to the uncertainties inherent in the judgments and assumptions made, as well as possibility of futurechanges that may occur in business management and internal and external circumstances.

45