Consolidated Financial Highlights for
Fiscal Year Ended March 31, 2020

IMAGICA GROUP Inc.
Code: 6879

June 12, 2020

Financial Highlights for FYE Mar. 2020
Net sales increased by 3.8 billion yen.
Operating income increased by 400 million yen.
Net sales

94,090YoY+3,87890,212

94,090(Million Yen)

Operating income before
amortization of goodwill

Operating income

YoY

YoY

2,456

1,351

(12)

+425

2,469

Net income attributableto owners of the parent

664
YoY

+2,674

2,456
1,351
926

1.65 billion yen gainon sales of non-current
assets posted as
extraordinary income

664

A 2.29 billion yen forthe lump-sum
amortization of OLM
goodwill posted as an
extraordinary loss.
* Operating income before amortization of goodwill＝ Operating income + amortization of goodwill + amortization of other intangible assets, including trademarks(2,010)FYE Mar. 2019

FYE Mar. 2020

FYE Mar. 2019

FYE Mar. 2020

FYE Mar. 2019

FYE Mar. 2020

FYE Mar. 2019

FYE Mar. 20202

Financial Results by Business Segment
The Media Localization business segment saw growth in operating income and the Imaging
Systems & Solutions business segment saw growth in both sales and operating income.
(Million Yen)FYE Mar. 2019

(Million Yen)

ActualNet sales
Content Creation

Media Localization

26,205(Operating margin)

0.2%

−

27,52926,557

(359)

2,776
(402)

11.8%
−

(972)

(3.5%)(245)(36.3%)

677(Operating margin)

2.5%

1.6%

Net sales

24,916

22,660(2,256)(9.1%)

Operating income(1,257)

(768)

489

−

(Operating margin)

−

−

(77)

300

378

−

4,605

28.9%

817

43.1%

Imaging Systems & Solutions Operating income(Operating margin)

Net sales
Operating income
Net sales
Operating income

15,946
1,896

431

YoY

Operating income

Net sales

Consolidated total

23,429Change43

Operating income before goodwill amortization

Others(Consolidated adjustments)

ActualOperating income
Net sales

Production Services

FYE Mar. 2020

20,551

2,714

11.9%

13.2%

(1,609)(1,884)

(274)

−

(433)

(666)

(232)

−

90,212

94,090

3,878

4.3%

926

1,351

425

45.9%
3

Net Sales: YoY Change
Both the Content Creation and Imaging Systems & Solutions business segments saw
sales growth. Overall, net sales increased by 4.3% YoY.

(Million Yen)

Imaging
Systems &SolutionsContent
Creation
Production
Services
Others90,212FYE Mar. 2019(+4.3%)+4,605Media
Localization(2,256)+3,878(972)+2,776

94,090(274)

FYE Mar. 2020
4

Operating Income: YoY Change
Two business segments saw growth in operating income: Imaging Systems & Solutions
and Media Localization.

(Million Yen)

Imaging
Systems &SolutionsContent
Creation

(402)

926

+425

(+45.9%)

+817
Media
Localization

Production
Services(245)

Others

1,351

+489

(232)
FYE Mar. 2019

FYE Mar. 2020
5

Content Creation
Net sales increased due to the expanded scale and increased number of feature film
productions, and an increase in the number of TV commercials and live-music
performance recordings.
FYE Mar. 2019

(Million Yen)

ActualNet sales
Content Creation

Net sales

Actual

23,429Operating income

43(Operating margin)

0.2%+2,776 million YoY

 Expanded scale and increased numberof feature film productions (live action
and anime)FYE Mar. 2020
Change26,205(359)

Operating income

2,776
(402)

YoY

11.8%
−

−

-402 million YoY

 Valuation loss on investment inproduction committees for feature film
production resulted in an operating loss

 Strong performance of TV commercial
productions and live-music
performance recordings (orders
received for a major project)6

Production Services
E2E services* performed well, but human talent services saw a decline in both sales andoperating income.
FYE Mar. 2019

(Million Yen)

ActualNet sales
Production Services

Net sales

Actual

27,529Operating income

677(Operating margin)

2.5%-972 million YoY

 Strong performance in E2E services＊
post-production services for featurefilms and anime Impact from the novel coronavirus anda decline in orders for archiving
services in the 4Q

FYE Mar. 2020
Change26,557
431

YoY

(972)

(3.5%)(245)(36.3%)

1.6%

Operating income-245 million YoY

 Post-production cost control efforts
mitigated the decline in profit
 Investment increased SG&A expenses
for human talent services

 Sales for human talent services
declined due to the sale of one
subsidiary* E2E services: Refers to an integrated end-to-end (E2E) service that covers the entire post-editing process from localization (subtitling/dubbing) to distribution*2 of feature films, TV dramas, and othersource videos.

7Media Localization
Optimization of costs improved the loss at the operating income level.
FYE Mar. 2019

(Million Yen)

ActualMedia Localization

ActualChangeYoY

Net sales

24,916

22,660(2,256)(9.1%)

Operating income(1,257)

(768)

489

−

(Operating margin)

−

−

(77)

300

378

−

Operating income before goodwill amortization

Net salesFYE Mar. 2020

-2,256 million YoY

Operating income+489 million YoY

 Decline in net sales from the sale oftwo consolidated subsidiaries

 Changes in production structure to
optimize fixed costs

 Sluggish orders for localization of TV
programs (in Europe) Orders for high-margin production
projects (feature film trailer production& localization, etc.)

SDI Media Group, Inc. and its subsidiaries have afiscal year-end of December 31, so theperformance of this business segment reflects
results from January 1 to December 31, 2019 in
the performance for consolidated fiscal year ended
March 31, 2020.

8

Imaging Systems & Solutions
Both video systems and imaging (high-speed camera) saw growth in net sales andoperating income.
FYE Mar. 2019

(Million Yen)

ActualNet sales

15,946

Imaging Systems & Solutions Operating income

1,896(Operating margin)

11.9%

Net sales+4,605 million YoY

 Smooth progress on completion anddelivery in the video systems businessarea

FYE Mar. 2020
ActualChange20,551

2,714

YoY

4,605

28.9%

817

43.1%

13.2%

Operating income+817 million YoY

 Increase in orders for large, highmargin projects and other projects
substantially boosted gross profit.

 Strong sales of new high-speed camera
products, mainly in Europe and the U.S.
 Steady growth in TV commercials via
the online delivery system

9Consolidated Forecast for Fiscal Year Ending March 31, 2021

The financial forecast for the fiscal year ending March 2021 has
not yet been determined because the impact from the spread of
the novel coronavirus makes it difficult to calculate a reasonable
forecast. The financial forecast will be disclosed once it becomes
possible to calculate it.

10

Appendix

Consolidated Statements of Income
FYE Mar. 2019

(Million Yen)FYE Mar. 2020

ActualActualChangeYoY

Net sales

90,212

94,090

3,878

4.3%

Gross profit

23,617

23,769

151

0.6%

26.2%

25.3%

926

1,351

425

45.9%

1.0%

1.4%

789

416

(372)

(47.2%)

0.9%

0.4%

Extraordinary income

391

1,688

1,297

331.5%

Extraordinary losses

2,876

358

(2,517)(87.5%)Net income (loss) before taxes(1,695)

1,746

3,442

−

Net income (loss) attributable toowners of the parent(2,010)

664

2,674

−

(Ref.) Operating income before
goodwill amortization

2,469

2,456

(12)

(0.5%)(Gross margin)

Operating income(Operating margin)

Ordinary income(Ordinary margin)*Operating income before goodwill amortization= Operating income + amortization of goodwill + amortization of other intangible assets, including trademarks

12Consolidated Balance Sheets(Million Yen)

AssetsFYE Mar. 2020

ChangeMain factor (YoY)

40,11935,295

Cash and deposits

6,079

7,339

Non-current assets

24,606

26,859Goodwill

3,769

3,167

Total Assets

64,72562,154Current liabilities

26,712

25,762

5,375

5,004

10,115

8,913

6,169

5,510

Total Liabilities

36,82834,676

Shareholders’ equity

24,85725,428

Accumulated othercomprehensive income

292

(361)

(653) As of March 31, 2019: 25,150 (38.9%)

Stock acquisition rights−

11

11 As of March 31, 2020: 25,066 (40.3%)

2,747

2,400

(347)

Total Net Assets

27,89727,478(418)

Total Liabilities and Net Assets

64,72562,154(2,570)Net Cash(5,465)(3,175)Current assets

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

FYE Mar. 2019

Long-term loans payableNon-controlling interests(4,824) Cash and deposits: +1,260

Notes and accounts receivable- trade: (2,434)
Inventories: (1,618)
1,260 Other: (2,039)
Land: (1,238)

2,253 Goodwill: (601)

Investment securities: (484)(601) Stocks of subsidiaries and affiliates: +2,384
Deferred tax asset: +445

(2,570)
Income taxes payable: +857

(950) Notes and accounts payable- trade: (596)
Short-term loans payable: (370)
Advance payments: (796)(370) Accounts payable: (660)(1,201) Long-term loans payable: (658)Deferred tax liabilities: (210)(658) Long-term accounts payable-other: (142)(2,151)570 (Reference)Shareholders’ equity)

2,290 (Cash and deposits - long-term loans payable)

13

Consolidated Statements of Cash Flow
(Million Yen)

Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020

(1,695)

1,746

Depreciation and amortization

2,887

2,777

Amortization of goodwill

3,220

576

(Increase) Decrease in accounts receivable-trade

(976)

2,248

(3,399)1,528

Net income before taxes(Increase) Decrease in inventories

949

(480)

Increase (Decrease) in advance payments

2,474

(482)

Change in net consumption taxes receivable/payable

(879)

1,115

Income taxes paid

(1,197)(1,337)

Other(1,266)

(719)

117

6,974

(609)

(15)

Increase (Decrease) in notes and accounts payable-trade

Cash flows from operating activities
Disbursements for short-term loans receivable
Proceeds from collection of short-term loans receivable−583

Disbursements for long-term loans receivable−(1,791)(1,177)(1,468)

309

2,674

(147)

(2,975)204(1,304)(1,420)(4,297)471

245(2,490)(2,473)−

1,090

Expenditures for acquisition of treasury stock

(512)

−

Dividend payments

(445)

(220)

Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Expenditure for acquisition of stock of subsidiaries and affiliates
Other

Cash flows from investing activities
Net increase (decrease) in short-term loans payable
Expenditures for redemption of long-term loans payable
Proceeds from long-term loans payable

(783)

66

Cash flows from financing activities(3,760)(1,291)

Net increase (decrease) in cash and cash equivalents(5,064)

1,260

6,067

7,327

Other

Cash and cash equivalents at end of period

14

January-March 2020: Main Group Topics
January 2020
IMAGICA DIGITALSCAPE

February 2020
PHOTRON

February 2020
IMAGICA SDI StudioFebruary 2020
IMAGICA DIGITALSCAPE

Launched Zuno CAD 3D V2, a 3D
CAD software support tool for
manufacturing in Japan. Eliminates
data interruption in manufacturing!

IMAGICA Lab. and SDI MediaGroup established IMAGICA SDIStudio, Inc. as a dubbing studio inJapan.

Launched Infinite Pixel Viewer,
an interactive viewer that enables
expansion and viewing of ultrahigh-resolution images in real time.
Targeted for use in art museums,
other museums, healthcare, andeducation.

March 2020
PHOTRON

March 2020
IMAGICA DIGITALSCAPE

March 2020
IMAGICA GROUP

Launched a model of the PhotronMobile Video Creator that is
equipped with a translation
function to help foreign workers
understand their work.

Began offering Online Company
Presentations via KURI HAKU Navifor students scheduled to graduate
in March 2021.

The IMAGICA GROUP participatedin planning the highly realistic live
viewing of NTT Docomo’s
Shintaikan Live CONNECT special
event.

Debut in Niigata
Decided to open a new location
due to the expansion of the
debugging business.

2020
Record of Feature Film
Productions Released

Higanbana in the Rain,released on January 17thFirst Love,
released on February 28

15
15

October-December 2019: Main Group Topics
October 2019IMAGICA LIVE

November 2019
ROBOT

November 2019
ROBOT

November 2019IMAGICA Lab.

Embarked on innovative visualcontent streaming with WSC
Sports and J.LEAGUE Media
Promotion, Inc. (now, J.LEAGUE,
Inc.), which are global leaders in
AI sport imaging technology.

Released Momomachi, withcharacter content from ROBOT,
Shochiku, and PIA, in collaboration
with Okayama Prefecture.

The Sakana-kun and Secret Lab in
Sunshine Aquarium special exhibit
ran from November 1 to January
13, 2020. Planned and produced
by ROBOT, this exhibit provided
hands-on entertainment.

Launched Japan’s first color
grading and digital cinema package(DCP) mastering and projection
service for Dolby Cinema™.

November 2019IMAGICA Lab. / PHOTRON

November 2019IMAGICA Lab.

December 2019
Three Group Companies

IMAGICA Lab. opened StudioNEXT at a new location on Shibuya
Koen-Dori. It has an MA room
equipped for 22.2ch.

Joint development by Weather
Map,
OLM Digital, and IMAGICA GROUP

November 2019
PHOTRON
Spider Rec network camera
recording system was installed at
Toho University.

Exhibited at Inter BEE 2019(international exhibition of video
and communications equipment)
and proposed the latest services
using cloud technology, which iscentral to next-generation video
production flow.

Partnered with the Saruwatari Lab
in the Graduate School ofInformation Science andTechnology, at The University ofTokyo on the joint development of
Virtual Morita-san, a real-time
voice synthesis system that
replicates the voice of the weather
newscaster Masamitsu Morita.

16

July-October 2019: Main Group Topics
July 2019IMAGICA Lab.

August 5, 2019
Photron M&E Solutions

September 1, 2019IMAGICA GROUP

September 11, 2019
PHOTRON

Participated as a general
cooperating partner in the projects
to commemorate Mekong-Japan
Exchange Year 2019 (exchange
and cooperation projects in theimaging field). Also digitally
restored the very first film coproduced by Japan and Myanmar(in 1935).

Launched Kada-OR, a surgery video
recording and streaming system,
andKada-Live, a video recording andstreaming system for
cardiovascular departments.

Formulated the Corporate
Governance Guidelines, which
describes the Group’s basic stanceon corporate management andgovernance.

Released Zuno RAPID PRO 20 and
Zuno RAPID 20, the latest in the
2D CAD software series produced
in Japan.

October 2019
ROBOT・P.I.C.S

October 2019IMAGICA Lab.

Held a youth-oriented event forkids at Yebisu Garden Place as theplan for the local cultural event,Ebisu Cultural Festival 2019.

Supporting sponsor of the 32nd
Tokyo International Film Festival

2019
Record of Feature Film Productions Released

Little Love Song, released May 24
WE ARE LITTLE ZOMBIES, released June 14
MONGOL800 -message-, released July 5
Pokémon: Mewtwo Strikes Back! – EVOLUTION,
released July 12
The Great War of Archimedes, released July 26
DRAGON QUEST Your Story, released August 2
NI NO KUNI, released August 23
The Witness, released September 20
Ninkyogakuen, released September 27
One Night, released November 817April-June 2019: Main Group Topics
April 1, 2019IMAGICA Lab.
IMAGICA IRIS, the first digital
imaging company in the Groupventure system, opened forbusiness.

April 1, 2019IMAGICA GROUP

April 2019
PHOTRON

June 2019IMAGICA Lab.

Acquired shares in the U.S. media
and entertainment services
company, Pixelogic Holdings, LLC
through a new share subscription.

Launched the FASTCAM Mini
CX100, a high-speed camera forvehicle crash safety tests.

Built a structure for collaboration
with Realize Mobile
Communications Corp. fordomestic marketing of 3D
hologram generation technology.

March 24, 2019IMAGICA GROUP / ROBOT

June 2019
ROBOT

June 2019IMAGICA Lab.

World’s first: Put on VISIONS SUPER LIVE VIEWING supported by LDH, afuturistic live viewing of a 12K-wide synchronized video and lighting
display, a state-of-the-art live spectacular event.

Received the Grand Award and the
top corporate advertising award
for the special movie, Okuru
FUKUSHIMA-MINPO (Sending the
FUKUSHIMA MINPO NEWS).

Received the METI Minister’sAward for Every Day a Good Day,in the 23rd JPPA AWARDS 2019
(Japan Post Production
Association).

18

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 this document areformulated based on the plans and prospects of the Group as of the date on which these materials were disclosed.
Actual performance may differ from numerical forecasts due to the uncertainties inherent in the judgments andassumptions made, as well as possibility of future changes that may occur in business management and internaland external circumstances.