This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan inaccordance with Japanese accounting standards and the Financial Instruments and Exchange Act. This
document does not contain or constitute 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, the Japanese original shall prevail.

Consolidated Financial Results for the Third Quarter of
the Fiscal Year Ending March 31, 2024 (J-GAAP)
February 6, 2024
Company name:IMAGICA GROUP Inc.
Stock exchange listing: Tokyo Prime
Securities code:
6879
URL:
https://www.imagicagroup.co.jp/en/
Representative:
Nobuo Fuse, Representative Director, President
Tel: +81-3-5777-6295
Inquiries:
Masakazu Morita, Director and Senior Managing Executive Officer
Planned quarterly report filing date:February 6, 2024
Planned dividend payment date:—
Supplemental material of quarterly results:
Available
Planned quarterly results briefing:
Not available(Millions of yen, rounded down)
1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2024
(April 1, 2023 – December 31, 2023)(1) Consolidated Operating Results
Net sales
Nine months ended
Dec 31, 2023
Nine months ended
Dec 31, 2022

(Percentage represents change from the same period of the previous fiscal year.)
Net income attributable
Operating income
Ordinary income
to owners of parent
Million yen%
Million yen%
Million yen%

Million yen%

71,4584.8

2,224(18.8)

2,003(16.2)

1,434(18.7)

68,200

22.6

2,740

41.4

2,391

(2.3)

1,763

(28.3)(Note) Comprehensive income:Nine months ended December 31, 2023: ¥3,328 million / (28.2)%
Nine months ended December 31, 2022: ¥4,635 million / 54.5%

Basic earnings
per share
Nine months ended
Dec 31, 2023
Nine months ended
Dec 31, 2022

Diluted earnings
per share

Yen

Yen

32.35

—

39.61

—

(2) Consolidated Financial Position
Total assets
As of Dec 31, 2023
As of March 31, 2023
(Reference) Shareholders’ equity:

Net assets

Equity ratio

Million yen

Million yen%

78,142
81,88839,71840,30347.9
44.1

As of December 31, 2023:
As of March 31, 2023:¥37,438 million¥36,106 million

2. Dividends
Dividend per share
SecondThird
quarter-end
quarter-end

Firstquarter-end
Fiscal year ended March 31,
2023
Fiscal year ending March 31,
2024
Fiscal year ending March 31,
2024 (Forecast)Fiscalyear-end

Annual

Yen

Yen

Yen

Yen

Yen

–

0.00

–

15.00

15.00

–

0.00

–
15.00

15.00

(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 income
Operating
Basic earnings
Net sales
Ordinary income
attributable toincomeper shareowners of parent
Full year

Million yen

100,000%

6.2

Million yen

4,000

%

3.4

Million yen

3,500

%

(3.8)

Million yen%

Yen

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 shares issued (common shares)
1) Number of shares issued at the end of the period (including treasury stock)
As of December 31, 2023
44,741,467 shares As of March 31, 2023

44,741,467 shares

2) Number of treasury stock at the end of the period
As of December 31, 2023
541,339 shares As of March 31, 2023

156,042 shares

3) Average number of shares during the period
As of December 31, 2023
44,331,329 shares As of December 31, 2022

44,508,174 shares* These consolidated quarterly financial results are exempted from quarterly review by a certified public
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 and certain assumptions the Company deemed to be reasonable at the time of publication, and theCompany does not guarantee its future performance. Actual results may differ significantly due to various factors.

Table of Contents
1. Qualitative Information on Quarterly Results ....................................................................................... 2(1) Explanation of operating results ........................................................................................................ 2(2) Explanation of financial position ...................................................................................................... 3(3) Explanation of consolidated forecasts and other forward-looking information ................................ 3
2. Quarterly Consolidated Financial Statements ..................................................................................... 4(1) Quarterly Consolidated Balance Sheets ............................................................................................ 4(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income ............. 6(3) Notes to quarterly consolidated financial statements ........................................................................ 8(Notes on ongoing concern assumption) ...................................................................................... 8(Notes in the event of significant changes in shareholders’ equity) ............................................. 8(Special accounting method applied to quarterly consolidated financial statements) .................. 8(Segment information and others) ................................................................................................ 9

1

1. Qualitative Information on Quarterly Results(1) Explanation of operating results① Overview of the first nine months of the fiscal year
In the first nine months of the fiscal year ending March 31, 2024 (the “fiscal year” or “FY2023”),
although the Japanese economy is slowly recovering, the outlook remains uncertain due to rising prices,intensifying conflict in the Middle East, and the prolonged situation in Ukraine.
IMAGICA GROUP Inc. (the “Company”) and its subsidiaries (collectively, the “Group”) have reaffirmedthat improvement of profitability is an important issue to realize its vision of becoming a “highly profitablegroup” in FY2025, as we move forward with the third year of our G-EST 2025 Mid-Term Plan set in FY2021.
Accordingly, the Group has revised its four key strategies and has added “Expansion of game-related business”
as a new strategy. In FY2023, we are striving to achieve net sales of 110 billion yen, operating margin of 8%(before goodwill and other amortization), and EBITDA of 11 billion yen in FY2025, following our policy“FY2023 is the year to get on growth path after establishment of basis for growth.”
Under these circumstances, the Group’s performance in the first nine months of the fiscal year was asfollows: Net sales were 71,458 million yen (up 4.8% year on year), operating income was 2,224 million yen(down 18.8%), ordinary income was 2,003 million yen (down 16.2%), and net income attributable to owners ofparent was 1,434 million yen (down 18.7%).
② Performance by business segment
Financial results by business segment are as follows.
Effective from the first quarter of the fiscal year, the reportable segment “Production Services” has beenrenamed “Production Technology Services.” This change is merely nominal and has no impact on the details ofsegment information.
1) Content Creation businessIn the first nine months of the fiscal year, the segment reported sales of 19,630 million yen (up 10.7% year
on year) and operating income of 540 million yen (up 89.0%).
Sales of feature films and dramas remained at the same level as the previous fiscal year owing to thefeature films "Rohan au Louvre" released in May and “Godzilla Minus One” released in November, the Netflix
series “YuYu Hakusho,” which began streaming in December, and other major works. Sales of animation
works significantly increased owing to CG animation works and TV series with strong orders. Sales in the
publishing business increased owing to strong sales of books including the light novel “The Apothecary
Diaries,” whose TV animated series started in October. Sales of commercial production increased in web
commercials owing to high number of orders although sluggish performance in TV commercials due to weakorders.
As a result, sales and operating income increased in the segment.
2) Production Technology Services businessIn the first nine months of the fiscal year, the segment reported sales of 40,639 million yen (up 2.5% year
on year) and operating income of 1,403 million yen (down 34.6%).
In domestic E2E services*1, sales and operating income increased mainly owing to solid sales of digital
cinema services and localization services. In overseas E2E services, sales increased owing to the growth indigital cinema services and trailer production services supported by an increase in new theatrical releases aswell as the impact of foreign exchange rates, although the demand for localization of older works for video
streaming service settled down and pushed down sales. However, operating income decreased due to a rise inpersonnel costs, depreciation expenses and the other costs brought on by expanding bases globally. In thegame-related business*2, sales increased as Game 3DCG production remained solid, among other factors. In
post-production services for TV, sales and operating income declined due to weak orders.
As a result, sales increased, but operating income decreased in the segment.
2*1 E2E services: End-to-end services. This is a general term for one-stop services ranging from postproduction in the production of video content such as movies, dramas, and animation to media services forthe localization (dubbing and subtitling) and distribution through movie theaters, TV, and the Internet.
Meantime, the closing date for overseas E2E services is December 31, and therefore the results fromJanuary 1, 2023 to September 30, 2023 are reflected in those for the first nine months of the fiscal year.
*2 Game-related business: 2D/3DCG production, debugging and software testing, creative talent dispatch andreferral, etc. for games
3) Imaging Systems & Solutions businessIn the first nine months of the fiscal year, the segment reported sales of 12,783 million yen (up 1.2% year
on year) and operating income of 1,144 million yen (down 3.3%).
Sales of high-speed cameras significantly increased as orders remained strong. On the other hand, sales ofbroadcast imaging systems & solutions decreased due to weak orders. Sales and operating income of video andimage processing LSIs continued to decline mainly due to deteriorating market environments, although sales of
optical measurement slightly increased.
As a result, sales increased, but operating income decreased in the segment.

(2) Explanation of financial position① Assets
Current assets decreased by 3,945 million yen (8.8%) from the end of the previous fiscal year to 41,025
million yen. This was mainly due to decreases in cash and deposits, notes and accounts receivable - trade, andcontract assets, while inventories increased.
Non-current assets increased by 200 million yen (0.5%) from the end of the previous fiscal year to 37,117
million yen. This was mainly due to increases in buildings and structures and in “other” in property, plant andequipment, while construction in progress and deferred tax assets decreased.
As a result, total assets decreased by 3,745 million yen (4.6%) from the end of the previous fiscal year to78,142 million yen.
② Liabilities
Current liabilities decreased by 2,376 million yen (7.2%) from the end of the previous fiscal year to30,828 million yen. This was mainly due to decreases in contract liabilities and notes and accounts payable trade.
Non-current liabilities decreased by 783 million yen (9.3%) from the end of the previous fiscal year to7,595 million yen. This was mainly due to a decrease in long-term borrowings.
As a result, total liabilities decreased by 3,160 million yen (7.6%) from the end of the previous fiscal year
to 38,424 million yen.
③ Net assets
Net assets decreased by 585 million yen (1.5%) from the end of the previous fiscal year to 39,718 million
yen. This was mainly due to a decrease in non-controlling interests, while foreign currency translation
adjustment increased.

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

3

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Accumulated impairment
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Accumulated impairment
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Accumulated impairment
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Accumulated impairment
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and affiliates
Leasehold and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

December 31, 2023

7,813,769

4,377,280

21,937,480

19,138,472

12,460,112
2,868,953(109,328)
44,970,987

13,552,625
4,067,750(111,113)
41,025,014

12,213,112(7,584,337)(619,501)
4,009,273
6,210,738(5,525,748)(139,607)
545,383
921,3635,991,152(871,877)(121,127)
4,998,147
1,711,600
7,801,738(5,377,680)(135,685)
2,288,372
14,474,140

13,105,399(8,038,995)(612,405)
4,453,998
6,143,471(5,477,994)(137,211)
528,265
921,363
6,061,501(949,533)(89,060)
5,022,907
1,272,217
9,065,841(6,287,991)(140,079)
2,637,771
14,836,523

11,780,285
2,460,007
14,240,292

11,933,678
2,564,776
14,498,454

2,876,524
514,0422,048,952
2,420,133
490,206(147,088)
8,202,771
36,917,204
81,888,191

2,847,833
449,7122,027,344
2,209,181
403,809(155,234)
7,782,646
37,117,624
78,142,639

(Thousands of yen)March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Lease liabilities
Accounts payable
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for loss on orders received
Provision for loss on litigation
Asset retirement obligations
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease liabilities
Long-term accounts payable
Deferred tax liabilities
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

5

December 31, 2023

7,133,738
6,432,680
881,977
1,769,403
1,172,785
7,591,449
1,281,691
1,100
630,660
23,181
6,286,605
33,205,274

6,374,307
7,163,188960,136
1,949,884
575,171
6,097,137
643,658500——
7,064,384
30,828,368

1,366,665
4,498,102
252,767
196,598
1,241,071
653,518
170,257
8,378,982
41,584,257

686,434
4,492,725
168,224
205,416
1,278,036
664,248
100,7627,595,847
38,424,215

3,306,002
13,020,018
16,982,736(158,530)
33,150,226

3,306,002
12,155,677
17,747,716(411,349)
32,798,047

713,553

852,137

20,740(17,933)
2,237,081
2,828

29,101(17,933)
3,775,626
1,872

2,956,270

4,640,805

4,197,436
40,303,934
81,888,191

2,279,569
39,718,423
78,142,639

(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(Thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Administrative expenses for investment
partnerships
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sale of shares of subsidiaries andaffiliates
Reversal of provision for loss on litigation
Compensation for forced relocation
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Loss on valuation of shares of subsidiaries andaffiliates
Office transfer related expenses
Extra retirement payments
Other
Total extraordinary losses
Net income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

6

Nine months ended
December 31, 2022
68,200,306
49,003,240
19,197,066
16,456,158
2,740,907

Nine months ended
December 31, 2023
71,458,362
50,950,328
20,508,033
18,283,545
2,224,488

1,433
26,117—
139,921
167,473

7,449
34,747
102,672
121,129
265,999

191,203
6,572

285,034
8,200—

104,778

160,660
158,478
516,915
2,391,464—
88,590486,604
2,003,882

7,070
28,0002,644
290,067

132,878

145,943—
416,055
1,909
585,913234,162—
12,372685,189

3,785
13,935

1,523
18,327—

41,94061,862
170,228
5,221
255,032
2,722,345
838,911
1,883,433
120,321
1,763,112——
14,34376,1352,612,936
969,963
1,642,973
208,708
1,434,264

Quarterly Consolidated Statements of Comprehensive Income(Thousands of yen)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

7

Nine months ended
December 31, 2022
1,883,433

Nine months ended
December 31, 2023
1,642,973(42,791)

142,899—
2,794,869

8,361
1,535,242

(284)

(956)

2,751,793
4,635,227

1,685,548
3,328,521

4,493,223

3,118,799

142,003

209,721

(3) Notes to quarterly consolidated financial statements(Notes on 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.
(Special accounting method applied to quarterly consolidated financial statements)(Calculation of tax expenses)
Tax expenses are calculated by reasonably estimating the effective tax rate after tax effect accounting on
net income before income taxes for the fiscal year that includes the third quarter and multiplying net income
before income taxes for the quarter by the estimated effective tax rate.
However, if using this estimated effective tax rate results in extremely unreasonable tax expenses, thestatutory effective tax rate is used after adjusting net income (loss) before income taxes for material differencesthat are not temporary.

8

(Segment information and others)[Segment information]
I.

For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
1. Information regarding net sales and income (loss) by reportable segment(Thousands of yen)

Net sales
Sales to external customers
Inter-segment sales ortransfers
Total
Segment income

Content
Creation

Production
Technology
Services

Imaging
Systems &Solutions

Sub total

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements ofIncome(Note 2)

17,627,671

38,473,727

12,087,135

68,188,534

11,772

68,200,306

104,249

1,171,442

547,877

1,823,569(1,823,569)—

17,731,921
285,810

39,645,169
2,147,007

12,635,012
1,184,033

70,012,103
3,616,851(1,811,796)(875,944)

68,200,306
2,740,907(Notes) 1. Adjustment to segment income of (875,944) thousand yen consists of income (loss) related to theCompany of 1,192,718 thousand yen and elimination of inter-segment transactions of (2,068,662)
thousand yen.
2. Segment income is adjusted against operating income on the quarterly consolidated financial statements.

II.

For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
1. Information regarding net sales and income (loss) by reportable segment(Thousands of yen)

Net sales
Sales to external customers
Inter-segment sales ortransfers
Total
Segment income

Content
Creation

Production
Technology
Services

Imaging
Systems &Solutions

Sub total

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements ofIncome(Note 2)

19,572,583

39,619,450

12,259,674

71,451,708

6,653

71,458,362

57,8201,020,188524,070

1,602,079(1,602,079)—

19,630,403
540,123

40,639,639
1,403,073

12,783,745
1,144,530

73,053,788
3,087,726(1,595,426)(863,238)

71,458,362
2,224,488(Notes) 1. Adjustment to segment income of (863,238) thousand yen consists of income (loss) related to theCompany of 923,088 thousand yen and elimination of inter-segment transactions of (1,786,326)
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 fiscal year, the reportable segment “Production Services” hasbeen renamed “Production Technology Services.” This change is merely nominal and has no impact on thedetails of segment information.
Segment information for the nine months ended December 31, 2022 is presented using the new name.

9