Consolidated Financial Highlights for
the Second Quarter of the fiscal year ending
September 30, 2021

IMAGICA GROUP Inc.
Code：6879

October 30, 2020

Highlights of Financial Results for the First Half
Net sales decreased by 11.5 billion yen.
An operating loss of 2.6 billion yen was posted.

(Million Yen)

Net sales

EBITDA

Operating income (loss)

35,835(1,025)(2,628)(11,587)(2,951)(2,903)

YoY

YoY

YoY

Net profit (loss)
attributable to ownersof the parent(1,952)
YoY(2,817)

1,926

47,42235,835865275(1,025)(1,952)(2,628)2Q
FYE Mar. 2020

2Q
FYE Mar. 2021

2Q
FYE Mar. 2020

2Q
FYE Mar. 2021

2Q
FYE Mar. 2020

2Q
FYE Mar. 2021

2Q
FYE Mar. 2020

* EBITDA includes: Operating income, depreciation and amortization, goodwill amortization and intangible fixed assets amortization
including trademarks

2Q
FYE Mar. 2021

2Second Quarter Results (July 1 to September 30)
Both net sales and losses improved in the second quarter, comparedto the first quarter.
1Q(Million Yen)

Actual

2Q(July 1 to September 30)

1H% Change from 1Q/Change from 1Q

ActualActualNet sales

16,85518,98012.6%

35,835

Operating loss

(1,868)(760)

1,108(2,628)

Ordinary loss

(1,942)

(986)

956

(2,928)Net loss attributableto owners of parent(1,213)

(739)

474

(1,952)

EBITDA (Reference)(1,063)37

1,101(1,025)3

First Half Financial Results by Segment
Imaging Systems & Solutions earned a profit.
1H
FYE Mar. 2020

(Million Yen)

ActualContent Creation(8,263)(53.5%)

Operating loss

(26)
ー
23,743(712)ー
20,719(685)

ー(3,024)(12.7%)(2,224)
ー8,495(1,473)

ーNet sales( 751)
ー
8,955(459)(5.1%)

Operating income

1,250558(691)(55.3%)

14.0%

6.6%

Net sales

(730)

(569)

160

ー

Operating loss

(197)

(250)

(53)

ー

47,42235,835(11,587)(24.4%)

275(2,628)(2,903)ーOperating loss

(Operating margin)

Consolidated total

YoY ratio

7,190(Operating margin)

OthersYoY

15,454

Net sales

Imaging Systems &Solutions

ActualNet sales(Operating margin)

Production Services

1H
FYE Mar. 2021

Net sales
Operating income(loss)

4

Content Creation (Quarterly Performance)
Performance bottomed out in the first quarter and both net sales andthe operating loss improved in the second quarter.
(Million Yen)

Net sales

Operating income
4,258

2,932

1Q

(469)

2Q

1Q

(243)

2Q

 Some feature film productions were released at the end of the second quarter, butother film productions were postponed to the third quarter or later.

 Shooting of TV commercials resumed.
 Suspension or postponements of live-music performance recordings continued.
 The number of TV animation series produced decreased and changes in television
broadcasting schedules occurred.

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Production Services (Quarterly Performance)
Signs of a rebound were seen in the domestic market, while conditions
remained difficult in overseas localization.
(Million Yen)

Net sales

Operating income

10,578

10,141

International

International

Domestic

Domestic

1Q

2Q

International
Domestic(1,369)

1Q

International
Domestic(855)2Q

 Media and post-production services saw a rebound in orders for post-production for
TV programs and TV commercials, digital cinema services, video streaming, andarchiving services.

 International media services (localization) saw a decline in orders due to thelockdowns in various countries in Europe and North America.

 Human talent services secured orders on par with the second quarter of last year

due to the shift to remote operation for the production of Game 3DCG, and despite
the difficult conditions in the creative talent dispatch and referral business.
6Imaging Systems & Solutions (Quarterly Performance)
The online delivery system for TV commercials was strong and sales inthe Asia region rebounded.
(Million Yen)

Net sales

Operating income
4,973

3,522

55

1Q

2Q

1Q

503

2Q

 The online delivery system for TV commercials was strong and sales rebounded tothe same level as last year.

 Recognition of sales from projects for TV broadcasters was postponed to the thirdquarter or later.

 Conditions were tough for high-speed cameras in Japan, Europe, and the U.S.,
while sales showed signs of rebounding in the Asian region.

 Sales were also steady for video and image processing LSI for Taiwan and China.
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Consolidated Forecast for Fiscal Year Ending
March 31, 2021
Continued improvement is anticipated in the third quarter onward.
FYE Mar. 2020

FYE Mar. 2021

(Million Yen)

Actual1H

YoY

Full Year Forecast

YoY

YoY ratio

94,09035,835(11,587)

84,000(10,090)(10.7%)

1,351(2,628)(2,903)(2,200)(3,551)－(1.0%)

(-)

-(-)

-

Ordinary income

416(2,928)(2,736)(2,650)(3,066)－

Net profit (loss)
attributable to owners ofparent

664(1,952)(2,817)(1,150)(1,814)－

Earnings (Loss) per share
(Yen)

15.05

(44.05)(63.69)(25.91)(40.96)－

EBITDA (Reference)

4,706(1,025)(2,952)

1,255(3,451)(73.3%)Net sales
Operating income(Operating margin)* EBITDA includes: Operating income, depreciation and amortization, goodwill amortization and intangible fixed assets amortization including trademarks

8Trend in Quarterly Consolidated Performance
Improvement in both net sales and operating income to the samelevel as last year is anticipated in the fourth quarter.
(Million Yen)

Net sales

16,855

Operating income

18,980(760)(1,868)

1Q Results

2Q Results

3Q Forecast

4Q Forecast

1Q Results

2Q Results

3Q Forecast

4Q Forecast

9Business Environment by Segment in the ThirdQuarter Onward
Further improvement in the business environment is expected in thethird quarter onward.
Segments

Trend(vs. 1H)Comments(Positive) Release of feature film productions will be scheduled in the thirdquarter onward.

Content Creation

ProductionServices

Improvement(Positive) Resumption in shooting of TV commercials will continue.

Domestic:
Improvement(Positive) Digital cinema services will rebound as theaters reopen.

Overseas:
Slightimprovement(Neutral) It is still unclear whether there will be large live-music
performance projects, but online streaming of performanceswith no audience will proceed.

(Positive) J.LEAGUE resumed in the second quarter and other sports will
also resume.
(Neutral) International media services (localization) will struggle in theU.S. and various countries in Europe due to the spread ofCOVID-19. Asia will rebound.
(Positive) Orders from TV broadcasters are expected in the fourth quarterand maintenance services will increase.

Imaging Systems& Solutions

Improvement(Positive) Online delivery system demand will increase amid the remote
production environment.
(Neutral) The demand for high-speed cameras will be strong in Asia, but
it is still unclear what conditions in Europe and the U.S. will be.
10Year-end Dividend Forecast
Dividend policy
The Group considers the return of profits to shareholders as an importantmanagement objective. Our basic policy is to distribute earnings in line withconsolidated results. We target a consolidated payout ratio of 30% and aim to
maintain stable dividends and increase the level of dividends.

Forecast for
fiscal year ending
March 31, 2021

Net loss attributable toowners of the parent

Net loss per share

Dividend forecast

Dividend payout
ratio(1,150) million yen(25.91) yen

0 yen－%

We project a net loss attributable to owners of the parent for this fiscal year. We havetherefore decided to declare zero year-end dividends based on the basic policy statedabove.

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Appendix.

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Consolidated Statements of Income
1H FYE Mar. 2020(Million Yen)

1H FYE Mar. 2021

ActualActualYoY

YoY ratio

Net sales

47,42235,835(11,587)(24.4%)

Gross profit

11,357

7,621(3,736)(32.9%)

23.9%

21.3%

275

( 2,628)(2,903)

ー

0.6%ー

(192)

(2,928)(2,736)ーーーExtraordinary income

1,658

123(1,534)(92.6%)

Extraordinary losses

30118

88287.2%

Net profit (loss) before taxes

1,435(2,924)(4,359)ーNet profit (loss) attributable toowners of parent

865(1,952)(2,817)

ー1,926(1,025)(2,951)ー(Gross margin)

Operating income (loss)(Operating margin)

Ordinary loss
(Ordinary margin)

EBITDA (Reference)* EBITDA includes: Operating income, depreciation and amortization, goodwill amortization and intangible fixed assets amortization including trademarks

13Consolidated Balance Sheets(Million Yen)

Assets

As of Sep. 30, 2020

YoY

Main Factors(4,634) Cash and deposits: (1,468)

35,29530,661

Cash and deposits

7,339

5,871Non-current assets

26,85926,296

Goodwill

3,167

2,864

Total Assets

62,15456,957(5,197)

Current liabilities

25,762

26,356594

Short-term loans payable

5,004

7,055

2,051

Non-current liabilities

8,913

8,574

(339)

Long-term loans payable

5,510

5,047

(463)

Total Liabilities

34,67634,931

255

Shareholders’ equity

25,42821,063

Accumulated othercomprehensive income(361)(234)

Stock acquisition rights

1111

2,400

1,186

(1,214)

Total Net Assets

27,47822,026(5,452)

Total Liabilities and Net Assets

62,15456,957(5,197)

Net Cash(3,175)(6,232)(3,056) payable)

Current assets

Liabilities / Net Assets

As of Mar. 31, 2020

Non-controlling interests(1,468)Notes and accounts receivable-trade: (4,947)
Inventories: +1,082
Other: +699

(563) Investment securities: +320

Shares of subsidiaries and affiliates: (253)(303) Deferred tax asset:+322

Notes and accounts payable-trade: (1,819)
Short-term loans payable: +2,051
Income taxes payable: (1,228)
Advances received:+2,206
Long-term loans payable: (463)(4,364) (Reference) Shareholders' equity
126 As of March 31, 2020: 25,066 (40.3%)
ー As of September 30, 2020: 20,828 (36.6%)(Cash and deposits － long and short loans

14Consolidated Statements of Cash Flow
(Million Yen)

2Q FYE Mar. 31, 2020

2Q FYE Mar. 31, 2021

Income before income taxes (loss)

1,435(2,924)

Depreciation and amortization

1,359

1,308291

293

4,056

4,871

Amortization of goodwill
Decrease (increase) in notes and accounts receivable-trade825(1,098)Decrease (increase) in notes and accounts payable-trade(1,154)(1,755)

Increase (Decrease) in advanced payment(2,684)2,217

828(835)(860)(1,466)

Decrease (increase) in inventories

Increase (decrease) in consumption taxes payable or receivable
Increase (decrease) in account payable(1,232)(711)

Net cash provided by operating activities

2,865

(98)

Payments of short-term loans receivable(1,650)－

Collection of short-term loans receivable

555－

Purchase of property, plant and equipment

(390)

(606)

Proceeds from sales of property, plant and equipment

2,673

1Other, net(3,000)

(100)

(728)

(530)

(2,541)(1,235)

601

2,677

Repayment of long-term loans payable(1,240)(1,230)

Proceeds from long-term loans payable

－434

(220)

(221)

－(1,500)

(158)

(240)

Purchase of investments in affiliates
Other, net
Net cash used in investing activities
Net increase (decrease) in short-term loans payable

Cash dividends paid
Purchase of investments in subsidiaries do not result in change inscope of consolidation
Other, net(1,018)(79)

Net increase (decrease) in cash and cash equivalents(800)(1,468)Cash and cash equivalents at end of period5,266

5,859

Net cash used in financing activities

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Business segment list of consolidated subsidiaries
Content Creation

Production Services

ROBOT COMMUNICATIONS INC. IMAGICA Lab. Inc.

Imaging Systems& Solutions
PHOTRON LIMITED

P.I.C.S. Co., Ltd.

IMAGICA LIVE Corp.

PHOTRON M&E Solutions Inc.

OLM, Inc.

COSMO SPACE Co., Ltd.

PHOTRON USA, INC.

OLM Digital, Inc.

IMAGICA SDI Studio, Inc.

PHOTRON EUROPE LIMITEDOLM Ventures Inc.

SDI Media Group, Inc.

i-Chips Technology Inc.

Sprite Animation Studios

PPC Creative Limited

IPmotion Inc.

IMAGICA DIGITAL SCAPE Co., Ltd.
IMAGICA ALOBASE Co., Ltd.
Shonan Hi-tech Planning Co.,Ltd.
Weather Map Co., Ltd.
※Pixelogic Holdings, LLC added from 4Q

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Contact for inquiries:
IMAGICA GROUP Inc.
Corporate Management Department
11th Floor, Uchisaiwaicho Tokyu Building 1-3-2 Uchisaiwaicho,
Chiyoda-ku, Tokyo 100-0011, Japan
TEL: +81-3-6741-5742

FAX: +81-3-6741-5752

Email: ir@imagicagroup.co.jp
URL: https://www.imagicagroup.co.jp/en/
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 whichthese materials were disclosed. Actual performance may differ from numerical forecasts due to theuncertainties inherent in the judgments and assumptions made, as well as possibility of futurechanges that may occur in business management and internal and external circumstances.

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