Consolidated Financial Highlights for FY2019 2Q

IMAGICA GROUP Inc.
Code：6879

October 31, 2019

Highlight of Financial Results ２Q
Net sales increased 5.5 billion yen YoY.
Operating income increased by 980 million yen and regained profitability.
（Reference）（Million Yen）

Net sales

47,422

Operating income
before goodwill
amortization

Operating income

YoY

YoY

YoY

＋5,517
41,90447,422834

275＋774＋986

Net profit attributable toowners of the parent

865
YoY

＋1,029865

83427560-164

Operating income before goodwill
amortization includes operating income,goodwill amortization and intangible fixedassets amortization

FY2018 2Q FY2019 2Q

FY2018 2Q FY2019 2Q-710

FY2018 2Q FY2019 2Q

We recorded 1,650
million yen as gainon sales of noncurrent assets atextraordinary
incomeFY2018 2Q FY2019 2Q2

Financial Results by Segment
Content Creation significantly increased sales.
Imaging Systems & Solutions increased sales and profit.
FY2018 2Q（Million Yen）

ActualNet sales
Content Creation

Operating income（OP ratio）

Consolidated

44.5%

303ーー- 4.4%

- 29ー

12,143- 828

11,120- 692- 1,022- 8.4%

136ー- 239
6,704671

88ー

2,250

33.6%

579

86.3%

（OP ratio）

10.0%

- 151
8,955
1,250

Net sales

- 906

- 783

122ー

Operating income

- 195

- 198

-3ー

41,90447,422

5,517

13.2%

- 710

275986ーOperating income

Operating income（OP ratio）
Operating income before
goodwill amortization

Adjustments

4,756

YoY ratio- 590

Net sales

Imaging Systems &Solutions

15,454- 26

YoY

12,676- 57（OP ratio）

Media Localizationー

FY2019 2Q

13,266- 28

Net sales
Production Services

10,697- 329

ActualNet sales
Operating income

Net sales
Operating incomeーーーー

14.0%

3

Content Creation
Sales grew, as feature film production expanded in size and number andas TV commercial and recordings of live-music performances increased.
FY2018 2Q（Million Yen）

ActualNet sales
Content Creation

ActualYoYYoY ratio

10,69715,4544,756+44.5%- 329- 26303ーーー

Operating income（OP ratio）

Net sales YoY

FY2019 2Q＋4,756 million

 More and bigger feature films (liveaction and anime) Additional sales from TV episodes
 Strong TV commercials production
and live-music recordings (majororders received)

Operating incomeYoY ＋303 million

 Higher gross margin from biggersales
 Lower goodwill amortization cost
 Lower TV anime production cost4

Production Services
The digital cinema service was successful, yet the human resources
service lost sales and profit.
FY2018 2Q（Million yen）

ActualNet sales
Production Services

FY2019 2Q

Operating income（OP ratio）

Net sales YoY -590 million

 Healthy growth for digital cinema
 Robust post-production forfeature films and anime
 Sales drop for human resourcesbusiness due to disposal of aconsolidated subsidiary

ActualYoYYoY ratio

13,26612,676- 590- 4.4%- 28- 57- 29ーーー

Operating income

YoY - 29 million

 Improved post-production profit
from effective cost reduction
 Carried out an investment in thehuman resources service field(expansion of digital content
business and such).
SG & A expenses increased.
5Media Localization
Fixed cost reduction measures improved operational income.
FY2018 2Q（Million Yen）

ActualNet salesMedia Localization

Operating income

12,143- 828（OP ratio）
Operating income before
goodwill amortization

Net sales YoY-1,022 million

 Lower sales due to disposal of twoconsolidated subsidiaries
 Slow business in Europe Potential new orders for OTT in 2Hfrom SDI and PXL collaboration―- 239FY2019 2Q

Actual11,120- 692

YoY- 1,022

YoY ratio- 8.4%

136―88――- 151

Operating income

YoY ＋136 million

 Progress in fixed cost reduction
measures by reviewing
production system Growing high-margin orders(feature film trailer productionand localization)
6

Imaging Systems & Solutions
Both video systems and imaging systems businesses achieved sales andprofit growth.
FY2018 2Q（Million Yen）

ActualNet sales YoY

ActualYoY

YoY ratio

6,704

8,955

2,250+33.6%

Operating income

671

1,250579+86.3%（OP ratio）

10.0%

14.0%

Net sales
Imaging Systems &Solutions

FY2019 2Q＋2,250 million

 Delivered major broadcasting
project
 Steadily growing on-line
commercial transmissions
 Successful sales of new highspeed camera in Europe andAmerica

Operating income

YoY ＋579 million

 Improved gross margin fromincreasing major, high-marginorders7

Consolidated Forecast for FY2019
No change in consolidated forecast disclosed on May 14FY2017

FY2018ActualActual

91,35190,212

95,000

4,788

5.3%

2,424926

1,680754

81.4%(2.7%)(1.0%)(1.8%)

Ordinary income

2,424789

1,200411

52.0%

Net income(loss)
attributableto owners of the parent

2,937-2,010

1,800

3,810

－

Earnings (loss) per shareof common stock (Yen)

65.98-45.55

40.86

86.41

－（Million Yen）

Net sales
Operating income（OP ratio）

FY2019Forecast（May 14）

YoY

YoY ratio8Appendix.

Consolidated Statements of Income
FY2018 2Q（Million Yen）

FY2019 2Q

ActualActual

YoY

YoY ratio

Net sales

41,90447,422

5,517

13.2%

Gross profit

10,49911,357

857

8.2%

25.1%

23.9%

- 710

275

986ー

ー

0.6%

Non-operating expenses

233

171

- 61

ー

Non-operating expenses＊

171

639

467

272.4%

- 649

- 192

456ー

ー

ー

Extraordinary income

371

1,658

1,286

346.6%

Extraordinary losses

6730- 37-54.9%

Net profit (loss) before taxes

- 346

1,435

1,781

ー

Net profit (loss) attributable toowners of parent

- 164

865

1,029

ー

774

1290.0%(Ratio)Operating income(Ratio)Ordinary income(Ratiio)＊:FY2019２Q non-operating expenses Interest expenses 169／Equity in losses of affiliates 280／Foreign exchange losses 106／Other(Reference)
Operating income before goodwill
amortization

60834※Operating income before goodwill amortization includes operating income, goodwill amortization and intangible fixed assets

10Consolidated Balance Sheets（Million Yen）

As of March 31,2019

As of October
31, 2019

YoY

40,11933,901- 6,217

24,60625,353

747

64,72526,712

59,25523,336- 5,469

10,1158,274- 1,840

31,61025,508- 65
112,189
27,64459,255- 5,217

Total liabilities and Net Assets

36,82824,857292
0
2,747
27,89764,725Net Cash*（Cash and deposits－Long and short loans- 5,465- 5,452

Current Assets
Cash and deposits
Non-current Assets
Goodwill
Total Assets
Current liabilities
Short-term loans payableNon-current liabilities
Long-term loans payable
Total Liabilities
Shareholder’s equity
Accumulated other comprehensive income
Stock acquisition rightNon-controlling interests
Total Net Assets

6,079
3,769

5,375
6,169

5,278
3,377

5,918
4,812

- 801
- 391
- 3,376542- 1,357650- 357
11- 558- 252- 5,4691311Consolidated Cash Flows Sheets（Million Yen）

Income before income taxs
Depreciation and Amortization
Amortization of goodwill
Increase(decrease) in notes and accounts receivable -trade
Decrease(Increase) in inventories
Decrease(Increase) in notes and accounts payable -trade
Income taxes paid
OthersCash flows from operating activities
Payments of short-term loans receivableCollection of short-term loans receivable
Proceeds from sales of property, plant and equipment
Purchase of stocks of subsidiaries and affiliates
OthersCash flows from investing activities
Net increase in short-term loans payable
Repayments of long-term loans payable
Purchase of treasury stock
Cash dividends paid
OthersCash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the end of period

FY2018 2Q

- 346
1,416
463
3,639
- 1,947
122
- 566
158
2,940
ーー
2- 69
- 474
- 541
371
- 1,244
- 512
- 445
- 53
- 1,883

FY2019 2Q

1,435
1,359
291
4,056
825
- 1,154- 860- 3,088
2,865- 1,650555
2,673- 3,000- 1,118- 2,541
601- 1,240
ー
- 220
- 158
- 1,018

535

- 800

11,667

5,266
12

The Group’s Major Topics from July 20192019/7IMAGICA Lab.

2019/8/5
Photron M&E Solutions“Mekong-Japan Exchange Year2019” Anniversary Project
Participating as general
cooperation company forexchange and cooperation in
the areas of filmmaking,including the digital revival of
the first Myanmar-Japan coproduced feature film in 1935.

New Projects
Launched Kada OR for recording
and streaming surgery footage
and Kada Live for recording andstreaming for the cardiology
department

2019/10ROBOT・P.I.C.S

2019/10IMAGICA Lab.

Ebisu Cultural Festival 2019
Held an event for children at
this local culture event in Ebisu
Garden Place.

2019/9/1
IMAGICA GROUP
Corporate Governance
Guideline
Established to show theGroup’s principal philosophy ofbusiness and corporate
governance.

2019/9/11
Photron
New Products
Launched Zuno RAPIDPRO 20
and Zuno RAPID 20, the latest
editions of a domestic twodimentional CAD softwareseries.

The 32nd Tokyo InternationalFilm Festival
Festival Supporter.

13

For more information, please contact/visit us at
Planning Dept., IMAGICA GROUP INC.
11th Floor, Uchisaiwaicho Tokyu Bldg.,
Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011
ＴＥＬ：+81-3-6741-5742

ＦＡＸ：+81-3-6741-5752

Email：ir@imagicagroup.co.jp
URL：https://www.imagicagroup.co.jp/

Disclaimer:This document includes the Group’s business plan and future outlook in line with its forecasts.
The future outlook is formulated from information currently available to the Group and theoutlook is susceptible to future economical environment, competitive landscape, success orfailure of new services and other uncertain factors. Thus, the Group asks you for yourunderstanding that the actual performance may differ from the future outlook stated in thisdocument. Additionally, our Group shall not bear any responsibility to update the outlook after
the disclosure of this document.