Consolidated Financial Highlights for
the First Quarter of the fiscal year ending March 31, 2021

IMAGICA GROUP Inc.
Code: 6879

August 4, 2020

Highlights of Financial Results
Net sales decreased by 4.8 billion yen.
An operating loss of 1.8 billion yen was posted.

(Million Yen)

Net sales

Operating loss before
goodwill amortization

Operating loss

16,855(1,590)(1,868)(4,892)(1,189)(1,187)

YoY

21,747

YoY

YoY

Net profit (loss)
attributable to owners ofthe parent(1,213)
YoY(1,800)586* Operating loss before goodwill amortization includes
the operating loss and amortization of goodwill andintangible fixed assets, including trademarks

16,855(401)(681)(1,213)(1,590)1Q
FYE Mar. 2020

1Q
FYE Mar. 2021

1Q
FYE Mar. 2020

1Q
FYE Mar. 2021

(1,868)1Q
FYE Mar. 2020

1Q
FYE Mar. 2021

1Q
FYE Mar. 2020

1Q
FYE Mar. 20212

(For Reference) Changes in Reportable Segments
The Production Services business segment and Media Localization business segment
were integrated.

Previous Segments (FYE Mar. 2017 to 2020)

New Business Segments (FYE Mar. 2021 ₋)Content Creation

Content CreationProduction Services

Production Services

Media Localization

Imaging Systems & Solutions

Imaging Systems & Solutions

3

Financial Results by Segment
Increase in sales for the Imaging Systems & Solutions segment.
Decrease in both sales and operating income for the Content Creation and Production
Services segments.
1Q
FYE Mar.2020(Million Yen)

ActualOthers
Consolidated total

YoY ratio(4,898)(62.6%)

(31)

(469)

(438)

ーーー

11,04910,578(470)(4.3%)(786)(1,369)

(582)

ーーー

Operating loss before
goodwill amortization(506)(1,091)(584)

ーNet sales

3,154

3,522368

11.7%

Operating income160

55(105)(65.5%)(Operating margin)

5.1%

1.6%

Net sales

(285)

(178)

107

ー

(24)

(85)

(60)

ー

21,747

16,855(4,892)(22.5%)(681)(1,868)(1,187)ーOperating loss

Net sales

Imaging Systems &Solutions

YoY

2,932

(Operating margin)

Production Services

Actual7,830

Net sales

Content Creation

1Q
FYE Mar.2021

Operating loss
(Operating margin)

Operating loss
Net sales
Operating loss

4

Content Creation
Release of feature film productions were postponed, and shooting of TV commercials
and live music performances were also suspended or postponed. This resulted in adecrease in sales and expansion of the operating loss.
1Q
FYE Mar.2020(Million Yen)

ActualNet sales

Content Creation

Operating loss
(Operating margin)

Net sales-4,898 million YoY

 Release of feature film productions (liveaction and anime) postponed, causing
sales to be posted in a later period
 Shooting of TV commercials and live
music performances also suspended or
postponed

1Q
FYE Mar.2021
ActualYoY

YoY ratio

7,830

2,932

(4,898)(62.6%)

(31)

(469)

(438)

ーーー

Operating loss

-438 million YoY

 Decrease in gross profit from decline innet sales
 Reduction in activity expenses and othercosts

 Decrease in the number of projects andchanges in broadcasting schedules of TV
animation
5Production Services
The decline in orders for feature film post-production, digital cinema, shooting, and otherservices resulted in a decrease in sales and expansion of the operating loss.
1Q
FYE Mar.2020(Million Yen)

ActualNet sales

Production Services

Operating loss
(Operating margin)
Operating loss before
goodwill amortization

Net sales-470 million YoY

 Orders for post-production services for TVprograms remains firm, while orders forpost-production for feature films and TV
commercials, digital cinema, shooting andother services fell
 Net sales from creative talent dispatch on
par with the previous quarter due to thetransition to telecommuting, while talentreferrals suffered

1Q
FYE Mar.2021
ActualYoYYoY ratio

11,049(786)ー

10,578(1,369)
ー

(470)
(582)

(4.3%)
ー(506)(1,091)(584)

ーOperating loss

-582 million YoY Performance of International media
services reflected results for January
through March, so the impact from thenovel coronavirus was minimal and fixed
costs were reduced further Decline in orders for post-production forfeature films and TV commercials, digital
cinema, shooting and other services
resulted in an expansion of the operating
loss for the segment overall
6Imaging Systems & Solutions
Orders from TV broadcasters were delayed to the second quarter and later, and sales ofhigh-speed cameras slumped, resulting in a decrease in operating income.
1Q
FYE Mar.2020(Million Yen)

ActualImaging Systems &Solutions

Net sales

1Q
FYE Mar.2021
ActualYoY

YoY ratio

3,154

3,522368

11.7%

Operating income

16055(105)(65.5%)(Operating margin)

5.1%

1.6%

Net sales+368 million YoY

 Orders from TV broadcasters weredelayed to the second quarter and later,while sales of high-speed cameras
slumped in Asia, Europe, and the U.S. andwere delayed to the second quarter andlater in Japan

Operating income-105 million YoY

 Slump in sales of highly profitable projects
for TV broadcasters and high-speed
cameras resulted in a decrease inoperating income Firm sales in mobile solutions area due toincreased domestic demand for mobiledata communications

7

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.

8

2Q Trends in the Business Environment While the severe environment will persist through the first half, the 2Q is showing signsof improvement compared to the 1Q.
 Group SG&A expenses will be reduced and capital investments that are not necessary orurgent will be reviewed and postponed.
Segments

Trend(vs. 1Q)

Comments
Content
Creation

SlightimprovementProductionServicesImaging
Systems &Solutions

Japan: Slight
improvement
Overseas: SevereImprovement

Decision made to gradually release feature film productions in the 2Q
and beyond
Shooting of TV commercials is beginning gradually, but the operating
rate will still be insufficient
The status of live-music performance recordings and staging of otherevents still unclear
Post-production services for feature films and dramas for OTT stillsevere, but signs of a rebound seen in digital cinema services and postproduction services for TV commercials and TV programs
International media services (localization) will show the results forApril-June, which is the 2Q for overseas subsidiaries, so the impact
from the novel coronavirus will be large. Dubbing studios resumed workin May, but concerns over a second wave in both Europe and the U.S.
means that the severe conditions will continue.
The demand for high-speed cameras in Europe and the U.S. is still
unclear, and projects for TV broadcasters are remaining firm withgrowth in maintenance services.
A reduction in R&D expenses, activity expenses, and other costs willcontribute to the bottom line.
9Appendix.

Consolidated Statements of Income
1Q FYE Mar. 2020

(Million Yen)

1Q FYE Mar. 2021

ActualActual

YoY% YoY

Net sales

21,747

16,855(4,892)(22.5%)

Gross profit

4,894

3,357

(1,536)(31.4%)

22.5%

19.9%

(681)

(1,868)(1,187)

ーーー

(841)

(1,942)(1,101)ーーー

Extraordinary income

1,6550(1,654)(100.0%)Extraordinary losses

99081882.5%

Net profit (loss) before taxes

805(2,031)(2,836)ーNet profit (loss) attributable toowners of parent

586(1,213)(1,800)ー(Reference) Operating loss before
goodwill amortization(401)(1,590)(1,189)ー(Gross margin)

Operating loss
(Operating margin)

Ordinary loss
(Ordinary margin)*Operating loss before goodwill amortization includes the operating loss and amortization of goodwill and intangible fixed assets,
including trademarks

11Consolidated Balance Sheets

Liabilities / Net Assets

Assets(Million Yen)

As of March
31,2020

As of June30, 2020

YoY

Main factor

Current assets

35,29530,969Cash and deposits

7,339

6,007

Non-current assets

26,85926,953

Goodwill

3,167

3,038

Total Assets

62,15457,922(4,231)

Current liabilities

25,762

23,421

Short-term loans payable

5,004

4,690

(2,340) Notes and accounts payable-trade: (2,150)
Short-term loans payable: (314)(314) Income taxes payable: (1,253)
Advances received: +2,225

Non-current liabilities

8,913

8,705

(208)

Long-term loans payable

5,510

5,120(390)

Total Liabilities

34,67632,126(2,549)

Shareholders’ equity

25,42823,993(1,434) (Reference)Shareholders' equity

Accumulated othercomprehensive income(361)(292)

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

Stock acquisition rights

1111

ー As of June 30, 2020: 23,701 (40.9%)

Non-controlling interests

2,400

2,083

(316)

Total Net Assets

27,47825,796(1,682)

Total Liabilities and Net Assets

62,15457,922(4,231)Net Cash(3,175)(3,803)(627)(4,326) Cash and deposits: (1,332)
Notes and accounts receivable-trade: (5,102)
Inventories:+1,254(1,332)Other: +853
94 Shares of subsidiaries and affiliates: (149)
Investment securities: +230(129) Deferred tax asset: +489

Long-term loans payable: (390)(Cash and deposits－long and short loanspayable)

12

(For Reference) Results for Fiscal Year Ended March 31, 2020
(New Business Segments After Change)
FYE Mar. 2020 Results by Segment for New Segments After Integration(Million Yen)

Others(Consolidatedadjustments)
Consolidated Total

Full Year

ActualActualActualActual20,03826,205

(31)

(26)

(203)

(359)

ーーーー

11,04923,74335,66349,091(786)(751)(550)

(348)

ーーーー

Operating income before
goodwill amortization

(506)

(192)

278

756

Net sales

3,154

8,955

12,784

20,551

Operating income

160

1,250

1,478

2,714

(Operating margin)

5.1%

14.0%

11.6%

13.2%

(285)

(730)

(1,080)(1,758)

(24)

(197)

(367)

(655)

21,74747,422

67,40594,090

(681)

275

357

1,351

Operating loss

Net sales

Imaging Systems &Solutions

1Q-3Q

15,454(Operating margin)

Production Services

1H

7,830

Net sales

Content Creation

1Q

Operating loss
(Operating margin)

Net sales
Operating loss
Net sales
Operating income (loss)＊The figures for the Production Services business segment include adjustments for intersegment transactions.

13Business segment list of consolidated subsidiaries
Content CreationProduction Services

Imaging Systems& Solutions

ROBOT COMMUNICATIONS INC.

IMAGICA Lab. Inc.

PHOTRON LIMITED

P.I.C.S. Co., Ltd.

SDI Media Group, Inc.

PHOTRON M&E Solutions Inc.

OLM, Inc.

IMAGICA DIGITAL SCAPE Co., Ltd

PHOTRON USA,INC.

OLM Digital, Inc.

IMAGICA LIVE Corp.

PHOTRON EUROPE LIMITEDOLM Ventures Inc.

COSMO SPACE Co., Ltd.

i-Chips Technology Inc.

Sprite Animation Studios

IMAGICA SDI Studio, Inc.

IPmotion Inc.

PPC Creative Limited
Weather Map Co., Ltd
IMAGICA ALOBASE Co., Ltd.
Shonan Hi-tech Planning Co.,Ltd.

14

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.