Consolidated Financial Highlights for FY2019 3Q

IMAGICA GROUP Inc.
Code: 6879

February 5, 2020

FY2019 3Q Financial Highlights
Net sales increased by 4.0 billion yen
Operating income increased by 1.0 billion yen
Net sales

67,405
YoY＋4,017
63,387(Million Yen)

Operating income before
goodwill amortization

Operating income

YoY

YoY

1,186357＋716＋1,04867,405815
YoY＋1,122

1,186815

469

Operating income before goodwill amortization
includes: operating income, goodwill amortizationand intangible fixed assets amortization including
trademarks

FY2018/3Q FY2019/3Q

Net income attributable toowners of the parent

FY2018/3Q FY2019/3Q

357

Recorded 1,650 million yen
gain on sales of noncurrent assets inextraordinary income

(307)
(691)
FY2018/3Q FY2019/3Q

FY2018/3Q FY2019/3Q

2

Financial Results by Business Segment
Profit growth in Media Localization
Sales and profit growth in Imaging Systems & Solutions
FY2018 3Q(Million Yen)

Net sales
Content Creation

Operating income (loss)[Ratio]Net sales

Production Services

Operating income[Ratio]Net salesMedia Localization

Operating income (loss)[Ratio]Operating income (loss) before
goodwill amortization
Net sales

Imaging Systems & Solutions

Operating income[Ratio]Others(Consolidated adjustments)

Consolidated total

FY2019 3Q

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

ActualChangeYoY

16,334(149)
ー
20,070170

20,038(203)
ー
19,249183

3,704+22.7%

(53)

ー

(820)

(4.1%)

12+7.5%

18,240(1,211)
ー(322)
10,035822

16,516(729)ー72
12,784
1,478(1,723)(9.5%)

481

ー

395

ー

2,749

+27.4%

656+79.8%(1,292)(1,182)

109

ー

(323)

(371)

(48)

ー

63,38767,405

4,017

+6.3%

(691)

357

1,048

ー

0.9%

8.2%

1.0%

11.6%

3

Content Creation
Growth in revenue due to the expanded scale and increased number of feature film
productions, TV commercials and live-music performance recordings
FY2018 3Q
Actual(Million Yen)

Content Creation

Net sales
Operating income(loss)[Ratio]Net sales+ 3,704 million YoY

16,334

Actual

FY2019 3Q
ChangeYoY

20,0383,704+22.7%

(149)

(203)

(53)

ーーー

Operating loss

- 53 million YoY

 Expanded scale and increased number offeature film productions (live action andanime)

 Higher gross margin from increased sales
in TV commercial productions, live-music
performance recordings

 Sales posted for the production of a largescale special TV drama Reduction of goodwill amortization costs

 Favorable growth in TV commercialproductions, live-music performancerecordings (major orders received)

 Largely impacted by the valuation loss ofinvestment in production committees forfeature film productions
4

Production Services
Steady growth in the E2E services business area, but a decline in sales and profit in thehuman talent services business area
FY2018 3Q
Actual(Million Yen)

Net sales
Production Services

Operating income[Ratio]Net sales- 820 million YoY

20,070170
0.9%Actual

FY2019 3Q
Change19,249183

Operating income

1.0%

(820)
12YoY
(4.1%)+7.5%+ 12 million YoY

 Steady growth in the E2E services*business area

 Increased profits in the E2E services*business area

 Solid demand in post-production services
for feature films and anime Improved profits in post-production owing
to effective cost control

 Sales impacted by the selling of one of theconsolidated subsidiaries in the humantalent services business area SG&A expenses increased due toinvestment in the human talent services
business area

*E2E services: Refers to an integrated service that covers the entire post-editing process from localization (subtitling/dubbing) to distribution of feature films and other source video .

5Media Localization
Improved operating income through fixed cost reduction measures
FY2018 3Q
Actual(Million Yen)

Net salesMedia Localization

Operating income (loss)[Ratio]Operating income (loss) before
goodwill amortization

Net sales- 1,723 million YoY

 Decreased sales due to the selling of twoconsolidated subsidiaries
 Orders for localization of TV programs in
Europe remained stagnant

18,240(1,211)
ー(322)

Actual

FY2019 3Q
Change16,516(729)ー72Operating income(1,723)
481

YoY(9.5%)

395ーー+ 481 million YoY

 Progress shown in the cost reduction byoptimizing fixed costs
 Orders received for high gross margin
production projects (feature film trailer
productions, localization, etc.)

6Imaging Systems & Solutions
Achieved sales and profit growth in both video systems and imaging (high-speedcamera) business areas
FY2018 3Q
Actual(Million Yen)

Imaging Systems &Solutions

Net sales
Operating income[Ratio]Net sales+ 2,749 million YoY

 Steady growth in the video systems
business area
 Sales of new high-speed camera products
remained strong in Europe and the U.S.

10,035822
8.2%

Actual

FY2019 3Q
Change12,784
1,478

Operating income

11.6%

2,749656

YoY+27.4%+79.8%+ 656 million YoY

 Gross profit grew due to increased orders,
including major projects with high profit
margins Steady increase in the demand for theonline delivery system of TV commercials

7Full Year Consolidated Forecast for FY2019
The Imaging Systems & Solutions business segment expected to post sales from a major
project in FY2019 4Q
Content Creation

Due to the carry-over of several feature film productions into the next fiscal year, theimpact of the valuation loss of investment in production committees, and theprospect of TV commercial production profits falling below expectations, it isanticipated that there will be a YoY increase in sales, and decrease in profit for thefull FY.

Production Services

Although sales in the E2E services business area remain brisk, the impact of the sale of ahuman talent services subsidiary and investment spending will continue into the fourthquarter; therefore, it is anticipated that there will be a YoY decrease in sales and profit
for the full FY.

Media Localization

Imaging Systems &Solutions

Despite sales for broadcasters in Europe remaining slow, orders from newly launching
video streaming platforms will be acquired from the fourth quarter, and fixed cost
improvements are likely to continue; therefore, it is anticipated that there will be a
YoY decrease in sales, and increase in profit for the full FY.
In the Imaging Systems & Solutions segment, sales from a major broadcasting station
project is expected to be posted in the fourth quarter, and sales of high-speed cameras
remain robust; therefore, it is anticipated that there will be a YoY increase in sales andprofit for the full FY.
8Consolidated Financial Forecast for FY2019
Revisions to net sales, operating income, ordinary income, net income (loss)
FY2017FY2018ActualActual2019/5/14
Forecast(Million Yen)FY2019
Revised Forecast

Changefrom the previous forecast

Net sales

91,351

90,21295,00093,000(2,000)(2.1%)

Operating income

2,424926

1,680

1,200(480)(28.6%)

2.7%

1.0%

1.8%

1.3%

Ordinary income

2,424789

1,200400(800)(66.7%)Net income (loss)
attributable to ownersof the parent

2,937(2,010)1,800

1,200(600)(33.3%)

Earnings (loss) per
share of common stock(Yen)

65.98(45.55)40.82

27.21(13.61)(33.3%)[Ratio]9Appendix

Consolidated Statements of Income
FY2019 3Q

FY2018 3Q
Actual(Million Yen)

ActualChange63,387
16,25925.7%(691)

67,405
16,91925.1%
357ー

0(685)(310)ーー

Extraordinary income
Extraordinary losses

37284

Net income (loss) before taxes
Net income (loss) attributable toowners of the parent

Net sales
Gross Profit[Ratio]Operating income (loss)[Ratio]Ordinary income (loss)[Ratio](Ref.) Operating income before
goodwill amortization

YoY
4,017
660

+6.3%
+4.1%

1,048ー

374ー

1688
59

1,315-25(397)

1317

1,715

+353.5%(29.5%)
ー

(307)

815

1,122ー469

1,186716+152.7%*Operating income before goodwill amortization includes: operating income, goodwill amortization and intangible fixed assets amortization
including trademarks

11Consolidated Balance Sheets

12

For enquiries, please contact:
IMAGICA GROUP Inc.
Corporate Planning & IR
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
are formulated based on the plans and prospects of the Group as of the date of the announcement of
this material, and may vary from actual performance or operations going forward due to uncertainties
inherent in these determinations and assumptions, as well as due to the possibility of variations causedby changes in business operations, circumstances, and other internal and external factors.