Consolidated Financial Highlights for
the Second Quarter of the fiscal year ending
March 31, 2023
Supplemental Materials

IMAGICA GROUP Inc.
Code: 6879

November 2, 2022

First Half Results Highlights

１

Company-wide operating income before goodwill
amortization was approximately 2.2 billion yen, an
increase of 1.0 billion yen from the previous year.
Production Services continues to be driven by overseas

２demand, with profit increasing by 1.0 billion yen from theprevious year.
Net income decreased by 800 million yen from the previous

３year due to the absence of extraordinary gains recorded inthe previous year and an increase in income taxes, etc.
2Highlights of Financial Results for the First Half
・ The company secured a significant increase in both sales and profits. Net income
declined from the previous year due to the absence of extraordinary gains recorded(Million Yen)in the previous year and an increase in income taxes, etc.
Net sales

41,589YoY+7,743（＋22.9%）
35,835

Operating income (loss)
before goodwill
amortization

Operatingincome(loss)

Net income (loss)
attributable to ownersof the parent

YoY

YoY

YoY

2,289

+1,015（+79.7%)

1,411+980 (+227.0%)799（895）

41,58933,846

2,289
1,274

1,694

1,411

799

431(2,086)
2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021(1,952)(2,628)2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

3

Analysis of increase/Decrease in Net Sales (YoY)
・Sales increased in all segments, especially Production Services (International), inwhich sales increased by 6.5 billion yen.
(Million Yen)

Production Services(Overall:+7,138)
OtherImaging
Systems＆ Solutions

ContentCreation
ProductionServices（Domestic）

2Q FYE Mar. 2022
Actual

ProductionServices（International）

Exchange rate
fluctuations＋1,5612Q FYE Mar. 2023
Actual7,743

4

Analysis of Increase/Decrease in Operating Income before
goodwill amortization (YoY)
・ Profit increased by 1.0 billion yen in Production Services and 200 million in Imaging
Systems & Solutions. On a consolidated basis, profit increased by 1.0 billion yen.
(Million Yen)

Production Services(Overall:+7,138)

OtherImaging
Systems＆ SolutionsContentCreation

Production
ProductionServices
Services （International）（Domestic）

2Q FYE Mar. 2022
ActualExchange rate
fluctuations＋160

2Q FYE Mar. 2023
Actual+1,015
5

Content Creation（First Half)・ Net sales were strong for production of feature films, dramas, and TV
commercials, while the gross margin rate improved for animation works.
Net Sales

Operating income before goodwill
amortization

YoY＋51（+0.6％)
8,993(Million Yen)

YoY＋7

9,045

7,190
4149(712)

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022

2Q FYEMar. 2023

 Net sales of feature films and dramas were strong, despite the postponement of thedelivery of some productions to the third quarter or later.

 In animation productions, the gross margin ratio improved through strict managementof per-production earnings and the streamlining of production.

6

Production Services (First Half)・ Global E2E services *1: Significant increase in revenue and profit thanks tocontinued strength
Operating income before goodwill
amortization
YoY

Net sales
YoY(Million Yen)

(Numbers show the sum ofdomestic plus international.)+1,025(＋100.1%）+7,138（＋38.7%)
25,596
20,276
International
SDI
PPC

Domestic
2Q FYE
Mar. 2021

2,049
18,458International
Pixelogic
PPCInternational
Pixelogic
PPC

Domestic

1,024InternationalInternational
Domestic

Domestic

Domestic

Domestic

International

2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

2Q FYE
Mar. 2021(1,630)2Q FYE
Mar. 2022

2Q FYE
Mar. 2023

 In the domestic market, digital cinema services*2 and post-production services werestrong. However, profit declined due to an increase in fixed costs associated with site
relocation.

 In the international market, sales and profit increased significantly due to strong
demand for localization for video streaming service providers*3.

7

Imaging Systems & Solutions (First Half)・Broadcast Imaging Systems & Solutions, Image Processing LSI, and opticalmeasurement remained strong.
Operating income before goodwill
amortization

Net sales

YoY

YoY

+226（+44.8%)+891（＋12.1%）
8,937

(*)

7,321

2Q FYE
Mar. 2021

2Q FYE
Mar. 2022(Million Yen)

8,212

2Q FYE
Mar. 2023

5065042Q FYE
Mar. 2021

2Q FYE
Mar. 2022

730

2Q FYE
Mar. 2023

 Image Processing LSI sales remained strong in Japan and Asia.
 In optical measurement, orders remained solid in line with a recovery in capital
investment.

 Orders for high-speed cameras were strong, but net sales were flat YoY due to theshortage of semiconductors.

*Impact of change in accounting standards: Impact of mobile communication line sales being booked as net figure

8

FYE Mar.2023: Full-year forecasts
・The impact of the semiconductor shortage is still unclear, and there was a special
demand in the second half of the previous year, so the full-year forecast remains
unchanged.
FYE Mar.2022(Million yen)Actual

FYE Mar.2023
Financial forecast

YoYchangeYoYchange80,18488,000

7,816

9.7%

5,131

5,200

69

1.3%

6.4%

5.9%

3,417

3,600

183

5.3%

4.3%

4.1%

Ordinary income

3,934

3,300(634)(16.1%)Net income attributable to parent company
shareholders

2,729

2,100(629)(23.0%)Net income per share (yen)61.49

47.30(14.19)(23.0%)Net sales
Operating income before goodwill
amortization(Profit margin)

Operating income(Profit margin)

9Year-end dividend forecast
Dividend policy
The Group considers the return of profits to shareholders as an important management objective.
Our basic policy is to distribute earnings in line with consolidated results. We target a consolidated
payout ratio of 30% and aim to maintain stable dividends while increasing their level.
If any special factor, such as an extraordinary gain or loss, significantly impacts the net income of agiven fiscal year, our general policy is to take the special factor into consideration in determining
dividends, after consideration of all aspects, including provision of stable dividends to shareholders,
future business development, and retained earnings.

Based on the above policy, the dividend forecast for FYE Mar.2023 is 15 yen.
Net income
Per share
attributable to parent Net income attributable
Dividend forecastcompany
to parent company
Net income
Net income
Expected for FYE
Mar.2023

2,100 mn yen

47.30 yen

15.0 yen

Dividend payout
ratio

31.7%
10

Appendix.

Reference:

Progress of the G-EST2025 Mid-Term Plan
・Global E2E business saw a significant increase in sales, while other businesses
also progressed as plan.
■ Global E2E services

First Half Net Sales
22.9%

33.8

41.5

16.7

(Billion Yen)

■ Live Entertainment Business


9.9
1.9

1.8

6.5

7.5

16.7

17.0

2Q FYE Mar.2023

Sales declined from the level created by event-related
special demand in the previous year, but newinitiatives aimed at business model creation areunderway.

■ Imaging Systems & Solutions BusinessDespite the impact of the shortage of semiconductors
for high-speed cameras, sales progressed favorably
and increased overall.

■ Transformation Business

2Q FYE Mar.2022

Overseas, recording for video streaming service
providers remained strong, with a significant 68.6%
increase in sales from the previous year.

Feature film productions and drama productions
remained strong. Sales increased for animation
productions, with gross margin ratio also improving.

*The sales for individuals strategies do not add up to the total because canceling out for consolidation is not taken into account.

12

Consolidated Income Statements
2Q FYE Mar. 2022

(Million Yen)

Actual2Q FYE Mar. 2023
ActualYoY%YoY

Net sales

33,846

41,589

7,743

22.9%

Groos profit

9,858

12,092

2,233

22.7%

29.1%

29.1%

431

1,411

980

227.0%

1.3%

3.4%

999

1,336

337

33.7%

3.0%

3.2%

Extraordinary income

793318(475)(59.9%)

Extraordinary losses

237234(2)(1.1%)Net income before income tax

1,555

1,420(135)(8.7%)Net profit attributable toowners of parent

1,694

799(894)(52.8%)(Reference) Operating income before
goodwill amortization

1,274

2,289

1,015

79.7%

(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

13Consolidated Balance Sheets
As ofMar.31,2022(Million Yen)

YoY

41,06644,5103,443

Cash and deposits

6,420

4,752

(1,668)Non-current assets

32,31739,372

7,055

Goodwill

11,482

12,9591,476

Total Assets

73,384

83,883

10,499Current liabilities

32,27836,815

4,536

4,170

5,495

1,324

7,079

11,142

4,062

4,019

3,683

(336)

39,35847,958

8,599

29,96330,085

121

Accumulated other comprehensive income

1,185

3,046

1,861

Non-controlling interests

2,876

2,792(83)

Total Net Assets

34,02535,925

1,899

Total Liabilities and Net Assets

73,384

83,883

10,499Net Cash(1,769)(4,426)(2,656)

Current assets

Assets

As ofSep.30,2022

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

Liabilities
Net Assets Shareholders' equity

Net Cash : (Cash and deposits －long-term and short-term loans payable)

14

Consolidated Statements of Cash Flow
(Unit: million yen)

2Q FYE Mar. 2022

2Q FYE Mar. 2023

1,555

1,420

Depreciation and amortization

939

1,210

Amortization of goodwill

690

729

Increase (Decrease) in provision for bonuses

(88)

(779)

2,938

2,364

(4,508)(5,323)

Income before income taxes (loss)

Increase (Decrease) in trade receivables and contract assets
Increase (Decrease) in inventory

600(2,142)

2,626

5,715

(90)

(1,320)(1,986)

(661)

2,679

1,213

(1,373)(1,354)Purchase of intangible assets

(402)

(292)

Expenditures due to security and compensation deposits

(526)

(92)

Others, net

1,232

(208)

(1,069)(1,947)

(897)

747

(1,346)(667)－(665)

(4)

(442)

80

(278)

(2,169)(1,306)66372(492)(1,668)

48－

6,413

4,750

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

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 inchange in scope 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
from change in scope of consolidation
Cash and cash equivalents at end of period

15

Financial Results by Segment
2Q FYE Mar. 2022

（Million Yen）

Actual0.6%

719.0%

4149

717.9%

18,458202

25,596
1,192

7,138

38.7%

990

489.7%

1,024

2,049

1,025

100.1%

7,321
486

891

12.2%

226

46.6%

(Operating margin)

6.6%

8,212
712

Operating income before goodwill
amortization

504

730

226

44.9%

Net sales(926)(1,265)(338)

ーOperating loss

(296)

(540)

(244)

ー

Operating income(Operating margin)

Operating income(Operating margin)

Operating income before goodwill
amortization

Net sales

OthersConsolidated total

%YoY

51

Net sales

Imaging Systems &Solutions

YoY

9,045
46

Operating income before goodwill
amortization

Production Services

Actual8,993
39

Net sales
Content Creation

2Q FYE Mar. 2023

Operating income

Net sales
Operating income before goodwill
amortization
Operating income before goodwill
amortization

0.4%

1.1%

0.5%

4.7%

8.7%

33,846

41,589

7,743

22.9%

431

1,411980

227.0%

1,274

2,2891,015

79.7%
16

Notes*1 Global E2E services
Refers to an integrated end-to-end (E2E) service that covers the entire post-production process forfeature films, TV dramas, animation, and other audio/video content up to media services for
localization (subtitling/dubbing) and distribution of these through all kinds of media, including
theaters, TV, and video streaming via the Internet.
*2 Digital cinema services
Refers to services for DCP (Digital Cinema Package) production and DCP delivery for digital showing
in movie theaters, KDM distribution, and other services (KDM: An abbreviation of Key Delivery
Message, the key for unlocking DCP encryption).
*3

Video streaming service providers
Refers to companies that provide video streaming services on a platform through the Internet.

17

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/
DISCLAIMER:
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.