Financial Results Presentation
Fiscal Year Ended March 31, 2023
(FYE Mar. 2023)
May 18, 2023
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"
Nobuo Fuse, Representative Director, President

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"
Nobuo Fuse, Representative Director, President

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

Financial Highlights

１

２Company-wide operating income before goodwill amortization wasapproximately 5.7 billion yen, a second consecutive record high.

Production Services (International) continues to lead the way withan increase of 900 million yen from the previous year.

Net income attributable to owners of the parent increased by 1.1

３billion yen due to the recording of extraordinary income, including
compensation for relocation.

4
Notes in this document (*1-2) are on page 16.

Financial results highlights
・The Company achieved two-digit growth in sales and profit, with net sales,
operating income, and net income reaching their highest values since the listingof the Company.
Net sales

94,147
YoY+13,963（＋17.4％）

Operating income before
goodwill amortization

Operating income(loss)

5,738

3,868

YoY
+607（＋11.8％）

YoY＋451（＋13.2％）

Net profit
attributable to ownersof the parent

3,864

YoY
＋1,134（＋41.6%）（Million Yen）

94,14786,72780,184

5,131

5,738

3,417

3,868

3,864

3,454
2,729

320

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

(1,084)FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

5

Analysis of increase/decrease in Net Sales (YoY)•

Revenue increased in all segments, with Production Services (International)
recording an increase of 12.0 billion yen.
（Million Yen）

Production Services(Overall) ＋12,047

Imaging
Systems &SolutionsContent
Creation

Production
Services(Domestic)

Consolidated
Adjustments

Production
Services(International)

FYE Mar. 2022
ActualFYE Mar. 2023
Actual＋13,9636

Analysis of increase/decrease in Operating Income
before goodwill amortization (YoY)•

Increases: Production Services, 960 million yen; Imaging Systems & Solutions,
340 million yen; consolidated, 600 million yen（Million Yen）

Production Services(Overall) +962

Imaging
Systems &SolutionsContent
Creation

Production
Services(Domestic)

Consolidated
Adjustments

Production
Services(International)

FYE Mar. 2022
ActualFYE Mar. 2023
Actual＋607
7

Financial Results by Segment (FYE Mar. 2021-2023 actual)
Operating income
before goodwill amortization

Net sales
22,486

Content Creation

23,537

19,809

Increase in sales, decrease in profit
770

540

(440)
FYE Mar.
2021

FYE Mar.
2022

FYE Mar.
2023

FYE Mar.
2021

FYE Mar.
2022

54,12846,973(million yen)

3,399

Strong net sales in feature films, TV dramas, and production
projects for video streaming service providers

Continued improvement in gross margin in anime productionTV commercial production struggled due to sluggish orders
from the second half of the year

FYE Mar.
2023

4,361

42,080

Production Services
Increase in sales and profitOverseas: Strong results in E2E services for video streaming
service providers



(818)
FYE Mar.
2021

FYE Mar.
2022

FYE Mar.
2023

FYE Mar.
2021

FYE Mar.
2022

Domestic: Strong results in E2E services, but an increase in
fixed costs associated with site relocationFYE Mar.
2023

Imaging Systems
Increase in sales and profit

21,006



18,93017,639

2,122

2,046
1,776

FYE Mar.
2021

FYE Mar.
2022

FYE Mar.
2023

FYE Mar.
2021

FYE Mar.
2022

High-speed cameras: Recovery in shipments from the second
half of the year due to the easing of semiconductor shortages

Imaging, image processing LSIs, and optical measurement
performed wellFYE Mar.
2023



Broadcast Imaging Systems & Solutions struggled due to lackof orders for projects*For FYE Mar. 2021 to FYE Mar. 2022, adjustments have been made to reflect changes in segment classifications for Content Creation, Production Services, and Imaging Systems & Solutions.

8Full-year financial forecast for the FYE March 2024
The Company aims to achieve net sales of 100 billion yen and a third consecutive
fiscal year of increased profit.
FYE Mar. 2023
(Million yen)

ActualFYE Mar. 2024
Financial Forecast

YoY

% YoY

94,147100,000

5,853

6.2％

5,738

5,900

162

2.8%

(Profit margin)

6.1%

5.9%

4,000

132

3.3%

(Profit margin)

3,868
4.1%

Ordinary income

3,639

3,500

△139

△3.8％

Net income attributable to parent
company shareholders
Net income

3,864

2,200

△1,664△43.0％Net income per share (yen)

86.79

49.34

△37.45△43.1％

Dividend per share (yen)

15.0

15.0

0

0.0％

Net sales
Operating income before
goodwill amortization
Operating income

4.0%

9

Contents of Today’s Presentation

Ⅰ

Financial Results Summary for FYE Mar. 2022

Ⅱ

Progress of the Mid-Term Plan "G-EST2025"
Nobuo Fuse, Representative Director, President

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. 202210

(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.

2.

3.

4.

Expand “Global
E2E” Business

Establish a newLive Entertainment
business

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

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
11

(Re-posting)
Financial Goals in the Mid-Term Plan "G-EST2025"
Targeting to become a balanced business structure■ Global E2E

FYE Mar. 2021 Actual

Net sales(billion yen)

Composition bybusiness segment

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

100

40%

4%
20%

2020年度(調整)

10%

8
25%

(Before goodwill amortization)

0.9

2020年度実績

25%

2025年度Operating income※

Composition bybusiness segment

25%

25%
51%

■Transformation

100%

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.

12

Progress of the Mid-Term PlanIn FY2023, net sales forecasts for the Global E2E business and the Transformation business exceeded the Mid-Term Plan
to reach 100 billion yen. ⇒ Reset of management indicators for FY2025
Net sales

Actual
69.0

Mid-Term Plan
75.0

Actual80.1

Mid-Term Plan
82.5

Actual94.1

35.9

FYE Mar. 2022

Operating income (%)(Before goodwill amortization)

Actual

1.0%

Actual

6.4%

4.0%
●
5.1
3.0

0.9
FYE Mar. 2021

Actual

Mid-Term
Plan

FYE Mar. 2022

37.9

23.0

(billion yen)
Mid-Term Plan
100.0

17.6

22.0

18.5

25.0

39.5

39.0

43.5

40.0

Actual

6.1%
●
5.0%
5.7

FYE Mar. 2024

FYE Mar. 2023

■ TransformationFYE Mar. 2026

6.0%●
●
5.9%

●

Mid-Term Plan

Planned

5.4

5.9
Planned

Mid-TermPlan■ Imaging systems

8.0%

4.1
Actual■ Live entertainment

10.0
5.0

FYE Mar. 2023

■ Global E2E

25.0

6.0

4.1

FYE Mar. 2021

Mid-Term Plan
90.0

Planned100.0

Mid-Term
Plan

FYE Mar. 2024

8.0

Mid-Term
Plan

FYE Mar. 2026

*For FY2022 to FY2023 (Actual and Planned) , total net sales for each strategy do not match the total amount as canceling out for consolidation is not taken into account.

13

Resetting of Mid-Term Plan Key Strategies andManagement Indicators
With the addition of new strategy “Expansion of game-related business” to the four key strategies,
key strategies and management indicators were reset with an emphasis on improving profitability.
EBITDA was also newly added.
Global E2E businessWe aim for transition from rapid growth to stable growth, enhancing profitability andincreasing operating margin to 10% or higher

Live Entertainment
business

We aim to maintain growth in growth business areas while shifting to stock business

Imaging Systems &Solutions business

Steadily advance business model transformation and a shift to new businesses, andmaintain solid growth and high profitability (operating margin: 12%)Game-related business

Position as a new driver of growth in the Group, and aim a goal of net sales of 15 billion
yen and operating margin of 10% or higher (including expansion from M&A)

Transformation businessWork to improve profitability, and ensure an operating margin of 5%

Initial goals

Reset goals

Net sales

100 billion yen

110 billion yen

Operating margin before
goodwill amortization

8%

8%

EBITDA

－

11 billion yen
14Mid-Term Plan: Strategy-specific Portfolio Following Reset
Reset a well-balanced portfolio based on strategy-specific progress
Net salesFYE Mar. 2026

FYE Mar. 2023 Actual

94.1 billion
yen

Initial goal

Reset goals

100 billionyen

110 billion
yen

25%
37%

41%

18%

■ Game-related

27%

32%

40%
10%

20%

25%

■ Live entertainment

7%

8%

8%

6.1%

■ Transformation■ Imaging systems

14%

4%

Operating margin(before goodwill amortization)■ Global E2E

6%
30%

21%

25%

17%

47%
29%

3%

35%

10%

30%

Among the FY2025 reset goals, net sales and operating income of the Transformation businessinclude company-wide expenses and consolidated adjustments.

40%

7%

15

５ Key Strategies
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances<Key Strategies>
1.

2.

Expand “Global
E2E” Business

Establish a new
Live
Entertainment
business

3.
Generate Additional
Business Value inthe Imaging
Systems &Solutions business4.

5.

Expansion of
the Game-related
business

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

Global E2E Business (expand globally)• Migrate from rapid growth to stable growth, enhance profitability, and aim
for an operating margin of 10%• Aim for stable growth overseas on a local currency basis
Net sales (JPY)

35.0

37.0

Overseas net sales (USD)(billion yen)

CAGR
3%

35.0

25.0

24.0
28.4

29.5

26.0
17.2

Overseas

16.6

Domestic

7.5

7.5

8.4

9.0

7.8

FYE Mar.
2022
ActualFYE Mar.
2023
ActualFYE Mar.
2024
PlannedFYE Mar.
2026
Reset goals

FYE Mar.
2026
Initial goalFYE Mar.
2022
ActualFYE Mar.
2023
ActualFYE Mar.
2024
PlannedFYE Mar.
2026
Reset goals

FYE Mar.
2026
Initial goal

17

Trends in the Feature Films and Video Streaming Markets••

Feature films market: Revenues are expected to exceed pre-COVID-19 levels due topost-pandemic recovery in audiences
Video streaming market: Despite intensification of competition, overall market growth isexpected to continue

Global feature film
theater revenue

46.4

45.2

48.7

Global Entertainment market trend(billion dollars)

50.7

52.7

Television
38
COVID-19
pandemic

CAGR:

22.8

5.8%

(2023-2026)

Video streaming

12.7

DVD/BD
2019

2020

2021

2022

2023

2024

2025

2026

2017

2018

2019

2020

2021

Source: PwC Global Entertainment & Media Outlook 2022-2026

2022

2023

2024

2025

2026

18

Global E2E Business (expand globally)• Overseas: Aim to secure stable orders by strengthening approaches to customers• Domestic: Established a new digital cinema distribution services company and aim to expand market
share Strengthen approaches to customers
1)

Secure orders for feature film services, a market that is on a recovery trend

2)

Meet the needs of existing video streaming service providers (short delivery times and high security)and continue securing orders

Overseas

3)

Strengthen approaches to video streaming service providers

4)

Acquire orders for localization (subtitling, dubbing) of non-English works (especially Korean andJapanese) Continue efforts to enhance productivity
1)

Make operation more efficient by advancing the development of our in-house “pHelix” IT system, etc.

2)Curb labor costs through expansion of our structure in low-cost countries (Cairo, Cape Town)

 Established a new company for digital cinema distribution services
Domestic(Cinema Connect, Inc.)
Full-scale start of services to digitally distribute theatrical film productions (trailers and feature films) totheaters. Aim for market share expansion
19

Live Entertainment Business• Aim for continued growth in growth business areas and a shift to highly
profitable stock businesses

Net sales(billion yen)

10.0

FYE Mar. 2024 Strategy

8.0
4.6

4.5
1.0

5.0
4.1
1.0

New
Entertainment
Business

3.9

 Acquire highly profitable
stock business
1) Building of business with external partners

2) Participation in urban space design and production
1.83) Joint development of AR content
5.4

3.5

3.1

3.2

FYE Mar.
2022
ActualFYE Mar.
2023
ActualFYE Mar.
2024
Planned4.1

FYE Mar.
2026
Reset goals

Existing
Entertainment
Business4) Examination of business alliances and M&A

FYE Mar.
2026
Initial goal

For FY2020 to FY2025, inter-segment internal net sales have been adjusted.

20

Aim at Acquiring Stock Business

The stock business model the Company aims for
1.

Secure continued orders through business alliances with key partners, etc.

2.

Participate in the planning stage of urban space design and secure stable orders as apoint of contact for operations

Building of businesses with key partners
December 8, 2022 Release
Start of comprehensive joint study on
expression and staging techniques forfused real/cyber spaces
Continuously secure orders from NTT’s R&D business

May 17, 2023 Release
Launch of UN-SCALABLE VISION service,a transformable imaging solution that
adapts to any environment regardless ofscale

Aiming for continued and stable orders for various
large projects in collaboration with the Dentsu Group

Participation in urban space design andproduction
Toranomon Hills Station Tower scheduled toopen in the fall of 2023
Selected as the designatedmanagement company forthe theater and hall. In addition,
participated in stages from designand delivery of imaging-related
equipment to event production

Joint development of AR content
Joint development of the “XR City” content by NTT QONOQ
The first release is “LOST ANIMALPLANET,” AR content that bringsback extinct creatures.

21

Imaging Systems & Solutions Business (create new value)• Steadily promote business model reform and shift to new businesses, and maintainsolid growth and high profitability

Net sales and operating margin（before goodwill amortization）(billion yen)

11.7%

11.8%

10.6%

16.1

25.0
22.0

17.6

FYE Mar. 2024 Strategy

Goal 12%18.5

 Increased production and acceleration ofsales of high-speed cameras
1) Recovery and increase production
2) Acquisition of large project (vehicle crash test) Expansion of Optical Measurementbusiness

 Improvement of earnings in the
Broadcast Imaging Systems & Solutions
Business model reform (new service development)
FYE Mar.
2022
ActualFYE Mar.
2023
ActualFYE Mar.
2024
PlannedFYE Mar.
FYE Mar.
2026
2026
InitialReset
Mid-Term Plan Mid-Term Plan

*For FY2021 to FY2025, inter-segment internal net sales have been adjusted.

22

High-Speed Cameras
1.5-fold increase in production
compared to FY2021

Large project order for vehicle crash tests

 The production system recovered from the second half of
FY2022; in the current fiscal year, we will increase
production to meet steady orders Following two new models last year, new models arescheduled for release in 2023
New models launched in 2022
FASTCAM Nova S20
FASTCAM Nova R5-4K, R3-4K

High-speed cameras: Annual production, units

1.5-fold

Last year, an order for a large project from a domestic
automobile manufacturer was received

A large number of cameras for shooting from multiple angles
were delivered

+27%


+24%

We will continue to aim for orders from domestic andoversea manufacturers

Start of new services for the automotive
development market
Launching of a new outsourced service utilizing 3D video
through proprietary technology (scheduled for June)FYE Mar. 2022 Actual FYE Mar. 2023 Actual

FYE Mar. 2024 Plan

*Patent pending
23

Optical Measurement Business• Aim to expand business in new areas and expand overseas
sales channels
Optical elements

Net sales

1.3 billion yen+18% New entry into the element laser
processing field

1.1 billion yen
Opticalmeasurement
equipment+144%

Expand in fields including semiconductor inspection andhigh-speed optical communications using photonic crystals,
a state-of-the-art optical control technology

1) At the stage of introducing prototypes to domestic laser
processing manufacturers, and studying mass production2) Start of approach to overseas laser processing manufacturers
3) Aim to pioneer new markets for difficult-to-process materials,
etc., add new areas to telecommunications devices, andexpand sales

Optical measurement equipment

450 million yen

Expansion of optical measurement systems incorporating
proprietary optical elements into applications including LCD
film production and inspection

Opticalelements
FYE Mar. 2022
ActualFYE Mar. 2023
ActualFYE Mar. 2024
Planned Strengthening of sales in Europe and the U.S.
in cooperation with overseas subsidiaries of
PHOTRON LIMITED
1) Exhibit at trade shows in Europe and the U.S. and start online businessdiscussions
2) Target is manufacturers of glass, VR lenses, semiconductor wafers, etc.

24Broadcast Imaging Systems & Solutions
Current state of the broadcast equipment market① Broadcasters in general continue to curb capital investments ② Orders for large projects are
decreasing due to the shift to cloud computing in Imaging Systems & Solutions

Aim to improve profitability through business model reform(new services development)
Expand virtual broadcasting system

A system that creates virtual spaces through CG, without the need for sets instudios. Enables imaging production not possible on actual studio sets, withapplicability to weather forecasting, news, sports programs, etc.
Sales of systems for regional TV stations started in FY2021 and haveremained strong.
Evening news programs on key stations also began “full virtual”
programs without studio sets in April.

Virtual broadcasting system (example image)

Offer new imaging production cloud services in a subscription format
Examples of services
 Photron Live Cloud Service: Easy imaging transmission/sharing between sites by anyone over the general Internet
 C.M.HARBOR: Television commercial online delivery service
 Photron Remote Access Gateway: Application developed in-house that allows remote access tocompany servers
 TASKEE: Specialized cloud service dedicated to imaging and video files
Offering a lineup of diverse services and applications to broadcasters, production companies,
agencies, etc.
25Game-related Business (expansion of business)
・Aim for net sales of 15.0 billion yen and operating margin of 10% including M&A
Net sales and operating margin(before goodwill amortization)FYE Mar. 2024 Strategy(billion yen)

10%

●

15.0
2-fold or
greater

5.0

NewbusinessEstablishment of new company through spinoff of game-related business

Expansion of existing business (game designand quality control)Expansion into new business areas throughM&A and capital alliances

6.9

10.0

FYE Mar. 2024
PlannedExisting
business

Growth of existing businesses + expansion into
new business areas
Toward 15.0 billion-yen scale in 2025

FYE Mar. 2026
Reset Mid-Term Plan

26

About the Games Market Trend
・In the global entertainment market, the games market is the largest andthe fastest growing.
Entertainment market trend(billion dollars)
350

Games
300

CAGR:

7.7%

(2023-2026)

250

Television
200

150

CAGR:

100

5.8%

Video
streaming• Games feature the largest market
size and growth rate

• The trend is toward increased
outsourcing needs as gamecontent becomes more complex• The game vendor market is notoligopolistic.

(2023-2026)

50

0

Our business environment

Films
DVD/BD2016

2026

The market is positioned as a growtharea in which we aim to expand
business

Source: PWC Global Entertainment & Media Outlook 2022-2026

27

About New Company for Game-related BusinessBackgroundEstablishment of a new company through a spin-off of the game-related business,to turn it into a growth business of the GroupIMAGICA GEEQ (pronounced ‘jeek’)

IMAGICA DIGITAL SCAPE Co.
Game-related businessGame-related business

Imaging/Online Human
Resources business

3DCG
production

Animation business(Webtoons, etc.)

2DCG
Illustration
production

FY2023 net sales(planned)

6.9 billion yen
Debugging
Qualityverification

Creativetalentdispatchandplacement

Three Strengths

Provision ofhigh quality
andhigh added
value

×

Stable supply
to majorgamingcustomers in
Japan

Group
resources

×Video production
know-how and IP
Overseas
operations

28

Vision and Key Strategies for FY2025
Vision for FY2025

Global Game E2E Company, capable of driving the growth of the GroupKey strategies
Expansion of existing businesses

2D/3DCG production
Debugging and software testingGame creative talent dispatch
and placement＋

Expansion into
new business areas

Overseas expansion throughM&A and capital alliances Gamedevelopment, localization, etc.

Our target business area = Games: End to End
Game
production
processes

Gamedevelopment

Game design

Quality control

Localization

Marketing29

Transformation Business (Complete Transformation)・Work to improve profitability, and aim for an operating margin of 5%
Net sales and operating margin(before goodwill amortization)(billion yen)

5.0%

●
3.5%

FYE Mar. 2024 Strategy
40.0

36.6
33.0



Increased revenue through the creation of IPEnforcement of further cost control in featurefilms, TV dramas, and animation production

Entry into the comic adaptation area, e.g.
WebtoonsAdvertising Production: Strengthening thedigital advertising domain

FYE Mar. 2024
PlannedFYE Mar. 2026
Reset Mid-Term PlanFYE Mar. 2026
Initial Mid-Term Plan

*FY2025 net sales exclude company-wide expenses and canceling out for consolidation.

30

Increased Revenue Through the Creation of IP
・Two works for TV animation has been decided, in addition to entry into the
comic adaptation area, e.g. Webtoons
TV animation of major “light novel” works
Major works with over 21 million copies in print
The TV animation of “The Apothecary Diaries” will
be broadcast in 2023
We expect an increase in net sales of original
paperbacks and comics after the TV broadcast, as wellas tie-up projects with companies

TV animation of original projects
Original projects and works
TV animation of “Bullbuster”
will be broadcast in 2023
We expect an increase in sales ofthe original novel after the TV
broadcast, as well as expanded
initiatives in collaboration with thecity of Kitakyushu, where it was set
Volumes 1 and 2 of the novel now
on sale from KADOKAWA©P.I.C.S. ・Published by KADOKAWA /Namidome Kogyo Video Production Dept.

Entry into the comic adaptation area,
e.g. Webtoons Through Group reorganization, IMAGICA DIGITALSCAPE Co., Ltd. merged its animation andWebtoon businesses into Imagica Infos Co., Ltd.
 Promote the development of comics adaptations©Hyuuga Natsu, illustrated by Touco Shino/IMAGICA infos©Hyuuga Natsu, IMAGICA infos/”The Apothecary Diaries”Projectand imaging inside and outside the Group, as wellas Group IP

31About Strategic measures and SDGs initiatives
Become a Group consisted of a balanced, highly profitable businesses that is resilient evenunder adverse circumstances<Key Strategies>
1.
Expand“Global E2E”
Business

2.
Establish a
new Live
Entertainment
business

3.
Generate Additional
Business Value inthe Imaging
Systems &Solutions business4.
Expansion of
the Gamerelated
business

5.
Complete
Transformationin the“Transformatio
nal 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
32

Progress of Strategic Measures
Three measures are being progressed Promotion of shift to online for post-production services work management
Through DX,
companytransformation
Business/manage
ment foundation

system to enhance productivity

 Promotion of digitalization of animation production (completion of in-housesystem → digitalization by cooperating contractors)
 Strengthening of Group-wide security measures

 Promotion of R&D for the manufacturing industry (measurement, analysis,
Strengthening oftechnologicaldevelopment
capability

Digital Twins, etc.)
 Investment of R&D in networks, AI, CG, VR, etc.
 Promotion of joint research with companies, research institutes, and universities
outside the Group Securing of technology talent (personnel system reform, strengthening ofrecruitment through industry-academia collaboration)

Greater efforts
for securing andutilizing talent Strengthening of talent recruitment and training (joint recruitment of new graduatesby the Group, joint training for young employees)
 Utilization of talent management system (information aggregation and talent utilization

for Group managerial talent and engineering/creator talent)33

Promotion of Sustainability

Developing SDGs initiatives to promoteoverall sustainability activities
We will establish a new Sustainability Committee chaired by the President,
to formulate key policies and initiatives related to sustainability and reflect
these in management strategies.

We will continue to work comprehensively and across the board on activities related
to human asset management, climate change response, risk management,
SDGs, and sustainability overall.

34

About ROE Levels for the Enhancement of Corporate Value
The current ROE level does not exceed the cost of shareholders’ equity* The Company recognizes the cost of shareholders’ equity costs as 7% to 8%
The Company’s ROE

Toward ROE 8% or higher

12.6%
10.7%
8.8%

5.0%

8.0%

2.7%

6.0%

3.0%

-1.0%

ROE on net income excluding extraordinary gains/losses-8.0%

FYE Mar. 2019

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2024

FYE Mar. 2025

FYE Mar. 2026

Aim for ROE of 8% or higher, exceeding the cost of shareholders’ equity,
by achieving an operating margin before goodwill amortization of 8% andgreater soundness and efficiency in B/S35

FY2023 Plan and Mid-Term Plan
Place focus on enhancement of profitability based on the five key strategies andaim for operating margin of 8% in FY2025(billion yen)

Net sales

75.0

69.0

80.1

94.1

82.5

100.0

Actual

110.0

Plan

90.0

Mid-Term PlanActual
FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

Operating margin(Before goodwill amortization)
Actual

6.4%
4.0%

Actual

6.1%

5.0%

FYE Mar. 2024

Plan

FYE Mar. 2026

8.0%

6.0%
5.9%

Actual/Plan
Mid-Term Plan

Actual1.0%
FYE Mar. 2021

FYE Mar. 2022

FYE Mar. 2023

FYE Mar. 2024

FYE Mar. 2026

36

Appendix.

Consolidated Income Statements
FYE Mar. 2022

(Million Yen)

ActualFYE Mar. 2023
ActualYoY%YoY

Net sales

80,184

94,147

13,963

17.4%

Gross profit

23,386

26,723

3,336

14.3%

29.2%

28.4%

ー

ー

3,417

3,868

451

13.2%

4.3%

4.1%

ー

ー

3,934

3,638

(295)

(7.5%)

4.9%

3.9%

ー

ー

Extraordinary income

1,301

5,327

4,026

309.4%

Extraordinary losses

2,037

1,445

(591)

(29.0%)Net income before income tax

3,198

7,519

4,321

135.1%Net profit attributable to owners ofparent

2,729

3,864

1,134

41.6%

(Reference) Operating income before goodwill
amortization

5,131

5,738

606

11.8%

(Gross margin)

Operating income(Operating margin)

Ordinary income(Ordinary margin)

Operating income before goodwill amortization = operating income + goodwill amortization + amortization of intangible fixed assets
including trademarks

38Consolidated Balance Sheets(Million Yen)

As of Mar. 2022

YoY

41,06644,9703,904Cash and deposits

6,420

7,813

1,393

Non-current assets

32,31736,917

4,599

11,482

11,780297

Total Assets

73,38481,888

8,503

Current liabilities

32,27833,205

926

4,170

6,432

2,262

7,079

8,378

1,298

4,019

1,366

(2,653)39,35841,5842,225

29,96333,1503,186

Accumulated other comprehensive income

1,185

2,956

1,770

Non-controlling interests

2,876

4,197

1,321

Total Net Assets

34,02540,303

6,278

Total Liabilities and Net Assets

73,38481,8888,503

Net Cash(1,769)14

1,784

Current assets

AssetsFYE Mar. 2023

Goodwill

Short-term loans payableNon-current liabilities
Long-term loans payable

Total Liabilities

Liabilities
Shareholders' equity
Net Assets

39

Consolidated Statements of Cash Flow(million yen)

Income before income taxes (loss)
Depreciation and amortization
Amortization of goodwill
Gain/loss on sales of investment securitiesFYE Mar. 2022

FYE Mar. 2023
3,198
2,059
1,406
(414)

7,519
2,596
1,558
(1,576)

Increase (Decrease) in trade receivables and contract assets(1,992)(2,179)

Increase (Decrease) in inventory(6,770)

1,172

2,431

(2,007)

5,393
(389)
2,493
7,414
(3,996)
(612)
944
(264)
(3,928)(2,023)(1,974)－(876)(2,189)2,091
6,109(2,853)
(655)
1,642
(514)
(2,380)280(1,334)
(665)

(43)

(442)

(142)
(4,183)(423)(2,585)

211

250

(486)

1,393

48

－

6,419

7,812

Decrease (Increase) in notes and accounts payable-trade
Increase (Decrease) in contract liabilities
Income taxes paid
Others, net
Cash flow from operating activities
Purchase of property, plant and equipment
Purchase of intangible assets
Income from the sale of investment securities
Others, net
Net cash used in investing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Purchase of investments in subsidiaries do not result in change inscope of consolidation
Others, net
Cash flow from financing activities
Effect of exchange rate change on cash and cash equivalents
Increase (Decrease) in cash and cash equivalents
Increase (Decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of period

40

Financial Results by Segment
FYE Mar. 2022

（Million Yen）

ActualNet sales

Content Creation

Production Services

Imaging Systems &Solutions

OthersConsolidated total

FYE Mar. 2023
Actual

YoY%YoY

22,48623,537

1,050

4.7%

Operating income

765

535

(230)

(30.1%)(Operating margin)

3.4%

2.3%

ー

ー

Operating income before goodwill
amortization

770

540

(230)

(29.9%)Net sales

42,08054,12812,047

28.6%

Operating income

1,726

2,532

806

46.7%

(Operating margin)

4.1%

4.7%

ー

ー

Operating income before goodwill
amortization

3,399

4,361

962

28.3%

Net sales

17,63918,930

1,290

7.3%

Operating income

1,740

2,086

346

19.9%

(Operating margin)

9.9%

11.0%

ー

ー

Operating income before goodwill
amortization

1,776

2,122

346

19.5%

(2,023)(2,448)

(424)

ー

(814)

(1,286)(471)

ーNet sales

80,184

94,147

13,963

17.4%

Operating income

3,417

3,868

451

13.2%

Net sales before goodwill amortization

5,131

5,738

606

11.8%

Net sales
Operating loss

41
※子会社のセグメント変更により、2022年3月期のNet sales・のれん償却前利益は修正しております。

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/en/

Twitter：https://twitter.com/IMAGICAGROUPDISCLAIMER:
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.