Consolidated Financial Highlights for
the Third Quarter of the fiscal year ending
December 31, 2021

IMAGICA GROUP Inc.
Code：6879

February 4, 2021

Highlights of Financial Results for the First Three Quarters
Net sales decreased by 8.7 billion yen.
An operating loss of 2.3 billion yen was posted.

(Million Yen)

Net sales

EBITDA

Operating income (loss)

58,6708(2,369)(2,839)(2,727)

YoY(8,735)67,40558,670YoY

YoY

Net profit (loss)
attributable to owners ofthe parent(663)
YoY(1,478)2,848815
8357

(663)

(2,369)
1Q-3Q
1Q-3Q
FYE Mar. 2020 FYE Mar. 2021

1Q-3Q
1Q-3Q
FYE Mar. 2020 FYE Mar. 2021

1Q-3Q
1Q-3Q
FYE Mar. 2020 FYE Mar. 2021

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

1Q-3Q
1Q-3Q
FYE Mar. 2020 FYE Mar. 2021

2

Third Quarter Results (October 1 to December 31)
Both net sales and profit improved in the third quarter, compared to the secondquarter.
3Q(October 1 to December 31)

1Q-3Q(Apr. 1 to Dec. 31)

1Q

2Q

ActualActualActualNet sales

16,85518,98022,835

20.3％

58,670Operating income(loss)(1,868)

(760)

259

1,019(2,369)

Ordinary income(loss)(1,942)

(986)

199

1,185(2,729)

Net profit (loss)
attributable toowners of the parent(1,213)

(739)

1,289

2,028(663)

EBITDA (Reference)(1,063)

37

1,034

997

8(Million Yen)

% Change from 2Q/
Change from 2Q

Actual3

Content Creation (Quarterly Performance)
Performance bottomed out in the first quarter and both net sales and theoperating income (loss) improved gradually from the second quarter onward.
(Million Yen)

Net sales

Operating income (loss)
6,698

2,932

150

4,258(469)

1Q

2Q

3Q

1Q(243)
2Q

3Q

 Live action films and anime feature film productions, which had been postponed, were released.
 OTT streaming of dramas began (Alice in Borderland, an original Netflix series planned and produced by
ROBOT COMMUNICATIONS, INC.)

 Orders increased for live streaming of live music performance recordings and other events
without audiences.

 The number of new orders for TV commercials and other advertisements did not rebound.
 The number of TV animation series produced continued to decline and changes in delivery andTV program broadcasting schedules continued to occur.

4Production Services (Quarterly Performance)
In the domestic market, orders showed signs of a rebound and operating income
moved into the black in the third quarter.
(Million Yen)

Net sales

Operating income (loss)

Domestic

Domestic

10,578

10,141

International

International

Domestic

1Q

12,024

Domestic

International

International(1,369)Domestic

Domestic

2Q

3Q

1Q

InternationalInternational(855)

2Q

(84)

3Q

 Media and post-production services: This segment continued to secure post-production orders
for TV programs. Orders for post-production services for TV commercials and animation andencoding and other services for OTT projects also increased.

 Video shooting, streaming, and archiving services: The resumption of sports events and shift oflive music performances to online streaming resulted in an increase in orders.

 International media services (localization) saw continued severe conditions in various countries
in the Americas and orders declined, despite the resumption of operations at dubbing studios.

 Human talent services saw an increase in new orders for debugging business and orders forGame 3DCG production also remained firm, despite the difficult conditions in the creative talentdispatch and referral business.

5Imaging Systems & Solutions (Quarterly Performance)
Online delivery system sales for TV commercials continued to expand and sales inthe Asian region were also firm.
(Million Yen)

Net sales

Operating income
4,973

3,522

4,502
503
55

1Q

2Q

3Q

1Q

2Q

284
3Q

 The online delivery system for TV commercials saw an increase in the number of TV commercialsdelivered due to expanding market needs, securing growth in sales.

 Some projects for TV broadcasters decreased in number or shrank in size and others werepostponed.

 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 of video and image processing LSI for Taiwan and China continued to remain firm.
6Financial Results by Segment (1Q-3Q)
The Imaging Systems & Solutions segment has continued to earn a profit since
the first quarter.
1Q-3Q
FYE Mar. 2020

(Million Yen)

1Q-3Q
FYE Mar. 2021

Actual(6,149)(30.7%)

(203)

(562)

(359)

ーーー

35,66332,743(2,919)(8.2%)(550)(2,308)(1,757)ーーー

12,784

12,997212

1.7%Operating income (loss)

1,478

842(636)(43.0%)(Operating margin)

11.6%

6.5%

(1,080)

(959)

120

ー

(367)

(340)

26

ー

67,40558,670(8,735)(13.0%)

357(2,369)(2,727)ーOperating income (loss)

Net sales
Operating income (loss)(Operating margin)

Net sales
Imaging Systems &Solutions

OthersConsolidated total% YoY

13,888(Operating margin)

Production Services

YoY

20,038Net sales
Content Creation

ActualNet sales
Operating income (loss)
Net sales
Operating income (loss)

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Consolidated Forecast for Fiscal Year Ending March 31, 2021
The forecast for the full year remains unchanged.
FYE Mar. 2020

FYE Mar. 2021

(Million Yen)

YoY
(Full year)% YoY(Full year)

84,000(10,090)(10.7)%(2,727)(2,200)(3,551)

－(-)

-(-)

-

416

(2,729)(2,418)(2,650)(3,066)－Net profit (loss)
attributable to owners ofparent664(663)(1,478)(1,150)(1,814)－Earnings (Loss) per share
(Yen)

15.05

(14.96)(33.45)(25.91)(40.96)－EBITDA (Reference)

4,706

8(2,839)

1,255(3,451)(73.3%)

Actual

1Q-3Q

YoY

94,09058,670(8,735)1,351(2,369)(1.0%)

Ordinary income(loss)Net sales
Operating income(loss)(Operating margin）

Full year forecast* EBITDA includes: Operating income, depreciation and amortization, goodwill amortization andintangible fixed assets amortization including trademarks

8Group Reorganization
Announced January 22
Establishment of new subsidiaries, structural reform of Production
Services, and Group business reorganization
Two new subsidiaries were established to improve Group growth andprofitability.
(1) Imagica Entertainment Media Services, Inc.
(2) IMAGICA Lab. Inc.

See next page for details

9Supplemental Materials on Establishment of New Subsidiaries,
Structural Reform of Production Services,and Group Business Reorganization

January 22, 2021

Mid-term Business Strategy
Development of global strategy and pursuit of video production reform
through structural reform of Production Services and Group Reorganization
aimed at achieving the Integration to 2021 Mid-term Business Strategy
Key Strategies

Priority Measures
in FYE Mar. 2021

1. Develop a new global strategy

Develop a new global strategy

2. Improve profitability of existing
businesses• Expand global E2E services.

Propose new ways to provide
entertainment

3. Transition to a new businessmodel
4. Create and develop newbusinesses
5. Develop human resources andpromote workstyle reform

Innovate in the video
production processes• Improve productivity throughworkstyle innovation.
• Put the entire production process
on the cloud.

Utilize imaging
in the industrial world11

Specific Measures

Develop a new
global strategy

Innovate in the video
production processes

1Split off IMAGICA Lab. Entertainment businessas an independent business.
Strengthen alliance with Pixelogic and expand global E2E services.
Aim for a highly profitable structure that serves
as the engine for Group growth.

2

Split off IMAGICA Lab. TV/CM post-production businessas an independent business.
Create a new business model through the switch to cloud-based
services, remote production, etc.
Build a strong profit structure and transform the business.

3

Clearly specify the core businesses of subsidiaries.
Reorganize and consolidate the shooting, video production, andgame-related businesses of IMAGICA Lab. and optimize andmaximize business expansion.

4

Establish a Group technology development divisionin PHOTRON LIMITED.
Integrate IMAGICA Lab. and IMAGICA DIGITALSCAPE technicaltalent into PHOTRON.
Accelerate innovation in video production.
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Group Business Reorganization[After Reorganization][Current]

April 1, 2021 onward
Entertainment business, etc.
(Note)(Absorption-type split)

IMAGICA Lab. Inc.

TV program and TV
commercial postproduction services(Absorption-type split)

Shooting technology andvideo production services(Absorption-type split)：New company

Imagica Entertainment Media
Services, Inc.
(Name change to the trade name shown abovescheduled on April 1)

IMAGICA Lab. Inc.
(Name change to the trade name shown abovescheduled on April 1)* The name of the current IMAGICA Lab. will be inherited.

Subsidiary

COSMO SPACE Co., Ltd.
Games and graphics
related services(Absorption-type split)
Technology development
divisionand functions other thanthose noted above(Absorption-type merger)

IMAGICA DIGITALSCAPE Co., Ltd.
Digital Reality Lab team(Absorption-type split)

PHOTRON LIMITED

Note: Entertainment business, etc.: Feature film, dramas, anime, and other source video production and distribution-related technical services(Distribution, streaming, packaging, localization, etc.), and film-related services

13Appendix.

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Consolidated Statements of Income
1Q-3Q
FYE Mar. 2020

(Million Yen)

1Q-3Q
FYE Mar. 2021

ActualActual

YoY% YoY

Net sales

67,40558,670(8,735)(13.0%)

Gross profit (loss)

16,91912,932(3,987)(23.6%)

25.1%

22.0%

357

(2,369)(2,727)

ー

0.5%

ー

(310)

(2,729)(2,418)ーーーExtraordinary income

1,688

2,216

528

31.3%

Extraordinary losses

59154

94

158.3%

1,317(667)(1,985)ー815(663)(1,478)ー

2,848

8(2,839)(99.7%)(Gross margin)

Operating income (loss)(Operating margin)

Ordinary profit (loss)(Ordinary margin)

Net profit (loss) before taxes
Net profit (loss) attributable to owners ofparent
EBITDA(Reference)* EBITDA includes: Operating income, depreciation and amortization, goodwill amortization and intangible fixed assets
amortization including trademarks

15

Consolidated Balance Sheets(Million Yen)

Assets

As of Dec. 31, 2021

YoY

Main Factors(224) Cash and deposits: +302

35,29535,070Cash and deposits

7,339

7,641

Non-current assets

26,85936,317

9,457 Investment securities: +372

Goodwill

3,167

15,48012,312 Deferred tax asset:(2)Total Assets

62,154

71,387

9,232

Current liabilities

25,762

32,347

6,584 Notes and accounts payable-trade: (1,116)

5,004

14,002

8,998 Income taxes payable: (1,365)

8,913

14,394

5,480

5,510

10,278

4,767

Total Liabilities

34,676

46,741

12,065

Shareholders’ equity

25,42822,352(3,075) (Reference) Equity capital

Accumulated othercomprehensive income

(361)

(252)

Stock acquisition rights

1111

2,400

2,534

134

Total Net Assets

27,47824,645(2,832)

Total Liabilities and NetAssets

62,154

71,387

9,232

Net Cash(3,175)(16,638)

Current assets

Short-term loans payableNon-current liabilities
Liabilities / Net Assets

As of Mar. 31, 2020

Long-term loans payableNon-controlling interests

Notes and accounts receivable-trade: (977)

302 Inventories: (768) Other: +1,265

Shares of subsidiaries and affiliates: (1,624)

Short-term loans payable: +8,998
Advances received:(501)

Long-term loans payable: +4,767

108 As of March 31, 2020: 25,066 (40.3%)
ー As of December 31, 2020: 22,099 (31.0%)(13,463) (Cash and deposits －long and short loans payable)

16

Business segment list of consolidated subsidiaries

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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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