New Mid-Term Plan "G-EST 2025" M 2025"
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)

1

Review of the “Integration to 2021” Mid-term Business Strategy(formulated in May 2019)

We developed the “Integration to 2021” Mid-term Business
Strategy based on our business challenges and opportunities.
We will accelerate the Groupʼs structural reform and build a well-balanced
business portfolio with five key strategies.

Key Strategies
1. Develop a new global strategy.
2. Improve profitability of existing
businesses.
3. Transition to a new business model.
4. Create and develop new businesses.

A business portfoliothat provides both
growth andprofitability

5. Develop human resources andpromote workstyle reform.
2

Achievements in the Previous Mid-term Strategy “Integration to2021”
We have achieved a certain degree of progress over the past two years.
“Integration to 2021” Assessment
1. Develop a new global
strategy.

2. Improve profitability ofexisting businesses.

3. Transition to a new
business model.
4. Create and develop new
businesses.
5. Develop human resources
and promote workstylereform.

•Made Pixelogic a consolidated subsidiary, sold SDI MediaGroup, Inc. and established IEMS* to complete building a new
global business structure.

•

Cost management and improvement of ROBOTCOMMUNICATIONS INC. and OLM, Inc. is underway.

•

Implemented structural reform in the Production Services
business in April 2021.

•

Started work on establishing a new business model for the IP
business (Shufunotomo Infos Co., LTD.), digital marketing, cloudservices, etc.

•

Expanded into new businesses by establishing IMAGICA EEXCo., Ltd. (live entertainment), acquiring Photonic Lattice,Inc. (optical measurement), etc.

•

Began developing executive management and global talent.

•Will accelerate workstyle reform and diversity in the future.

* IEMS: Imagica Entertainment Media Services, Inc.

3

Trends in Business Results (FYE Mar. 2018 to FYE Mar. 2022)• An operating loss was recorded in FYE Mar. 2021 due to the large impact fromCOVID-19.
• We expect it will be difficult to achieve the financial goals in the previous midterm business strategy for FYE Mar. 2022.
Net sales

Net sales
Operating income
before goodwill amortization

94.0

Operating margin

91.4

100.0

Integration to 2021 indicators

Operating income(Billion yen)

90.2
Operatingincome86.7(Before goodwill
amortization)

2.6%

3.9

1.0%

2.4

2.5

0.9

6.0%

1.5%

2.5

6.0

0.３

1.4

(1.0)

0.3％

FYE Mar. 2018
ActualFYE Mar. 2019
ActualFYE Mar. 2020
ActualFYE Mar. 2021
ActualIntegration to 2021
(Initial goal)
4Challenges
Following six challenges have been revealed due to the COVID-19 pandemic, in addition
to rapid market changes in the visual media industry.
１. We are just at the starting line in expanding revenues in the global market.

• We have built a new global business structure, but the results in terms of net sales will emerge in
FYE March 2022 and beyond.

２. We are working on domestic growth markets, but the business scale is still small.
• We have entered the live entertainment market and other new markets, but business expansion
will occur from this point onward.

３. We rely on the Imaging Systems & Solutions business for profit.

• We cannot hedge risks with our current business structure amid rapid social changes and need asecond and third pillar of business.

４. Improving the profitability of existing businesses continues to be a significant
challenge.

• Transforming the business structure and entering growth markets are pressing issues amid therapid changes in the market environment.

５. Operational improvements through digital technology and data utilization are
insufficient and not yet established.
６．Further efforts are needed to secure and develop talent.

We have formulated a new mid-term plan
to resolve these challenges.

5Goal of the New Mid-Term Plan "G-EST 2025"

Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances

Make the global E2E business a second pillar of the Group.

Put the live entertainment business on the path to growth.
Leverage the highly profitable
Imaging Systems & Solutions business to an even greater degree.
Stabilize transformational businesses*
and build a structure capable of generating profit.
* Transformational businesses: Production services (feature film shooting and editing, human talent solutions),
anime production, feature film/drama production, TV commercial/video production

6

Key Strategies in the New Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances<Key Strategies>
1.

Expand “Global
E2E” Business2.

Establish a newLive Entertainment
business

3.

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.

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
7

Financial Goals in the New Mid-Term Plan "G-EST 2025"
Targeting to become a balanced businessstructure■ Global E2E ■ Live Entertainment ■ Imaging Systems & Solutions ■Transformation(Billion yen)

Net salesFYE Mar. 2021 Actual
Composition bybusiness segment*

69

FYE Mar. 2026

Composition bybusiness segment

100

25%
51%

40%

4%
20%

2020年度(調整)

10%
25%

2025年度8

Operating income

35%(Before goodwill amortization)

* 0.9

25%

100%

2020年度実績
2025年度* Net sales and operating income
for FYE Mar. 2021 were adjusted for the impact from a change in accounting
policiesin overseas M&A and the Imaging Systems & Solutions business, for purposes of comparison.

30%
10%

25%
8

Key Strategies in the New Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances<Key Strategies>
1.

Expand “Global
E2E” Business2.

Establish a newLive Entertainment
business

3.

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.

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
9

<Key Strategies> 1. Expand “Global E2E” Business

Vision for the Global E2E Business
Expand the business domain globally by integrating operation of Pixelogic andImagica Entertainment Media Services, Inc.
Net sales(Billion yen)

16.6

25.0
Pursue a global
E2E service structure
17.2

International• Increase orders for E2E services received
from video streaming service providers.

11.1

5.6
FYE Mar. 2021 *• Strengthen efforts to expand thebusiness to the Asian market.
7.8

DomesticFYE Mar. 2026

* FYE Mar. 2021 results reflect full-year sales of Pixelogic.

• Share domestic and internationalcustomer bases• Improve productivity by sharing systems.
10

<Key Strategies> 1. Expand “Global E2E” Business

Global Client Needs
Worldwide Simultaneous release requires implementing complex tasks in a secureenvironment over a short period of time.

E2E services (rapid delivery)
Localization(subtitling/dubbing)(Example)
Decision to distribute thebiggest hit Sci-Fi filmin 25 languages

・ Translation into
25 languages(from English into French, Spanish,
Japanese, etc.)

・ Subtitling

Editing the translated text andadding subtitles to the film

・ Dubbing

Adding voice data recorded byvoice actors in a studio to thefilm

Distribution(file production/streaming)
Producing files by format
・ By language

25 languages

・ By subtitling & dubbing

2 formats

・ By media format

multiple formats

・ By video format

multiple formats

・ By voice format

multiple formats(TV, PC, smartphone)(SD, HD,４K, etc.)(2ch, 5.1ch, etc.)

Worldwide
Simultaneous releasein 25 languages

25 ×２× No. of media formats
× No. of video formats
× No. of voice formats＝ several hundred
formats
11

<Key Strategies> 1. Expand “Global E2E” Business

Competitive Environment Surrounding Pixelogic
Pixelogic is one of the few E2E service providers capable of providing seamlesslocalization and distribution, even on a global basis.
Competitive environment
Global E2E

Video streaming
service providers

Major studios(few companies)
Mainlylocalization

Mainlydistribution

Several dozen
companies

Several dozen
companies<Strengths of Pixelogic>
Uses a proprietary IT
system to respond to thehigh quality requirementsof customers in a shorttimeframeVideostreaming

Theater

BD/DVD12

<Key Strategies> 1. Expand “Global E2E” Business

Competitive Advantage of Pixelogic
Achieve a high growth rate (double-digit CAGR or higher) and high profitability
through competitive superiority on the following points.
(Billion yen)High growth rate

<Pixelogic>
Net Sales Trend
Double-digit CAGR
or higher

98

ActualHigh productivity, low-cost
High profitability

FYE Mar.
2018

47

FYE Mar.
2019
ActualFYE Mar.
2020
ActualUses the proprietary pHelix IT system to provide
secure, high-quality, seamless service
that supports the requirements for a shortdelivery timeframe, many languages, andmany file formats.

Strong trust from customers

65
44

Provide secure, high-quality service
only possible through E2E

FYE Mar.
2021
ActualFYE Mar.
2026
Goal

Uses the proprietarily developed IT system
to automate tasks(IT system developed at a location in Egypt)
Minimum necessary owned studios
Network of translators and dubbing studios(production of English files in South Africa, etc.)

High gross margin13

<Key Strategies> 1. Expand “Global E2E” Business

Services Structure of the Global E2E Business
Increase productivity, expand the scope of services provided, and expand thebusiness through integrated operation of Pixelogic and Imagica Entertainment
Media Services, Inc.

Build the structure for global E2E services
through integrated operation

Sharecustomer bases

Enter
the Asian market↓↓

Expandmarket share

Expandbusiness scale

Share systems↓
Improveproductivity

14

Key Strategies in the New Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances

1.

Expand “Global
E2E” Business2.

Establish a newLive Entertainment
business

3.

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.

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
15

<Key Strategies> 2. Establish a new Live Entertainment business

Vision for the Live Entertainment Business
Establish a new business model through cross-organizational Group efforts andexpand business.
Net sales(Billion yen)

10.0
Establish a new business model
4.6

2.9
0.5

5.4

New
entertainment
business

Existing
entertainment
business

2.4
FYE Mar. 2021

FYE Mar. 2026

• Enter the digital event area(planning and producing online live
streaming)• Establish a business with a revenuesharing business model throughcooperation with streaming service
providers and talent agencies.
• Launch a sports tech business thatprovides a new spectator experienceand imaging solutions for sports
events.
27

<Key Strategies> 2. Establish a new Live Entertainment businessLive Entertainment Industry Undergoing Major Changes
The business scale shrank temporarily due to the COVID-19 pandemic, but a new
online live market emerged and grew rapidly.
Domestic Live Entertainment Market Scale(Billion yen)

+8%

586.2
501.5

Online live market that emerged during
the COVID-19 pandemic

Forecast at 98.4 billion yen
in 2024*

629.5

Forecast digital live entertainment market sizein 2020―2024

515.1

98.4
71.5
49.2
31.4
14.0

130.6

2020

2016

2017

2018

2019

2020

20XX

* Created based on a survey by Pia Research Institute

2021

2022

2023

2024

* From CyberZ, Inc., OEN, and Digital InFact surveys.

Copyright © CyberAgent, Inc. All Rights Reserved.

17

<Key Strategies> 2. Establish a new Live Entertainment business

New Business Opportunities from the Emergence of Online LiveEntertainment Business
Opportunity to enter the live entertainment market as a digital event producer.

Hybrid Live Market

Existing live market
The players in directing, shooting, etc. andthe business flow are entrenched.
(little opportunity for entrance)(Use of both real & online)

Switched to revenue-sharing based businessmodel for online events, in collaboration with
communications carriers and streaming service
providers.
(more room for entrance)
Talent agenciesStage
directors

Technologies

Shooting

Communications
carriers
Streaming service
providers

IMAGICA Group(Digital event producers)

Talent agencies

Promoters

Advertising& promotionStage
directors
Shooting

VenuesTicketingAdvertising& promotion

Technologies

Provide planning and directing usingstate-of-the-art technologies unique toonline live through cross-organizational
Group efforts and expand business.

18

<Key Strategies> 2. Establish a new Live Entertainment businessSuccessful case study in the Digital Event Production
NEXT VISION JAPAN 2021 XR LIVE
Online live employing two-way communication and XR direction
Each company in the Group manifested its strengths in online live event production.

Planning &production

Video, shooting,and VFX

Stage creation(progress, lighting,and sound)

Direction
through two-way
communication

Imagingtechnology

Distribution

19

<Key Strategies> 2. Establish a new Live Entertainment business

Establish New Business Models
Enter the live market as a digital event producer.

High-definition
live viewing

Experiential
theme park

Hybrid live

(Use of both real & online)

Establish a revenue-sharing business model for production of various
kinds of events through collaboration with many partners.

Stage
direction

Talent agencies

Communications
carriers & streaming
service providers

IMAGICA Group

Advertising& promotion(Digital event producer)
Shooting

Technologies

Provide planning and directing using state-of-the-art technologies
through cross-organizational Group efforts and expand business.

31

Key Strategies in the New Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances

1.

Expand “Global
E2E” Business2.

Establish a newLive Entertainment
business

3.

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.

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
21

<Key Strategies> 3. Generate Additional Business Value in the Imaging Systems & Solutions business

Imaging Systems & Solutions Business: From Selling Products to Selling Services
Switch to a “Service-Selling” business (Subscription SaaS, and Solutions)

25.0* FYE Mar. 2021: Numbers adjusted for change in accounting standards

OpticalMeasurement

FYE Mar. 2026

Business domain
expansionFYE Mar. 2021*

High-speed Camera

14.4

Imaging Systems &Solutions(Billion yen)

Business model transformation

Net sales

Continue to expand provision of imaging
systems (equipment).

+• Cloud-based production workflow service(subscription or SaaS model)• Imaging network monitoring business
Expand business solutions for vehicle crashsafety tests, etc.

• Overseas expansion of polarization testing
equipment(E.g.: Smartphone liquid crystal film testing devices, etc.)• Provide polarizer components to the highspeed communications market
22

＜Key Strategies＞ 4. Complete Transformation in the “Transformational business”

Transformational Business: Improved Profitability and Stabilized Profit
Generation

Target an operating income of 5% or higher through business expansion in highgrowth industries.
• Acquire production projects in Japan and overseas bystrengthening relationships with streaming service
providers.

Net sales(Billion yen)

34.6

Content Creation

40.0<Actual example>

Alice in Borderland
An original Netflix series planned and produced
by ROBOT COMMUNICATIONS, INC.
December 10, 2020, exclusive global rights• Make a greater effort to pursue acquisition and create
intellectual property (IP).
Obtain copyrights through active involvement inproduction committees.
Create IP by animating original works of Group companies.

FYE Mar. 2026

Production Services

FYE Mar. 2021

• Expand business and net sales by rolling out E2E
services to the game industry.
(1) contracts for 3DCG production.
(2) game creators dispatching.
(3) contracts for game debugging (quality assurance).

• Improve productivity by promoting DX in post-production
business.
23

Strategic Measures in the New Mid-Term Plan "G-EST 2025"
Become a Group consisted of a balanced, highly profitable businesses
that is resilient even under adverse circumstances<Key Strategies>
1.

Expand “Global
E2E” Business2.

Establish a newLive Entertainment
business

3.

Generate Additional
Business Value inthe Imaging
Systems &Solutions business

4.

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
24

<Strategic Measures>

Achieve company transformation through DX
Pursue DX in both business and management foundation (management) andcreate new value in the entire Group.

Create new value through digital technology
Business evolution

Extract the Group from reliance on equipment, location,and physical media.
Automate simple creator tasks.
Move relay productionand editing work toremote work.

Go all digital in the
anime production
workflow.

Automate image
processing andvisualize status.

Strengthen the
management foundation

Make swift management judgments and decision-making based on data.
Improve efficiency of management and administrative work through digital technology.
Build a flexible ICT platform that is capable of responding even in uncertain times.
Visualize management
performance andforecast information
and build a business
management system.

Reduce the number ofhours spent on
administrative work by
going paperless anddigitalization.

Create a centralized
database of talent
information.

Strengthen security
and expand the cloudenvironment.

25

<Strategic Measures>

Strengthen R&D capabilities
Make technological development capabilities the engine of growth for the entire
Group.
Integration & connection oftechnological development capabilities

A dvanced
R esearch
G roupEstablish a Group R&D
organization.
Collaborate with overseas Group companies.

Fuse creativity and technology.

Build a global imaging network with Pixelogic.

Provide live streaming, recording, real time
synthesis, and other solutions.

Develop products for research institutions
and the manufacturing industry.

Use technology to transform theproduction business.

Provide imaging products and analysis, design, and drawing
management solutions for research, development, andquality control.

Provide a broad range of proposals for production
and streaming equipment, cloud service, etc.
26

<Strategic Measures>

Secure & activate talented employees
Improve ability to secure and develop the talent to support business growth.
Secure talentpossessing bothcreativity andknowledge oftechnology

Utilize talent throughtalent management

Build a personnel
system that provides
job satisfaction

Promote diversity•

Secure talent to lead new businesses and centralize hiring activities.

•

Establish an employment format that makes it easy for creators to work.

•

Introduce a career development system for talent skilled in technology.

•

Centralize information on the next generation of management, global
talent, etc. and use it strategically.

•

Introduce a job rotation system in which Group talent can take onchallenges.
Develop multi-talented personnel who specialize in multiple areas andpursue integrated strengths.

•

•
•
•

Promote advancement of female leaders.
Encourage promotion of foreign nationals and transform the workplace
into an inclusive workplace.
Utilize veteran talent.
27

< Resolve Social Challenges and Achieve Sustainable Growth >SDGs Initiatives
Establish Group SDGs initiatives based on the three themes from the management
philosophy and business model.

１

２

３

Use “imaging” to resolve social challenges inmany areas.

Initiatives that use“imaging” to contributeto society

Example:Produce a “creator preparatory school” incooperation with local governments (ROBOTCOMMUNICATIONS INC.)

Pursue ecological activities and services that
support new workstyles in video production
workplaces and offices.

Creation of a production
process that isenvironmentally andpeople-friendly

Example:Pursue full digitalization of the animation production
process.

Build an environment in which many different kindsof talent who work for “imaging” industry to be
active and pursue talent development.

Development of humanresources and promoting
diversity

Resolve social challenges

Example:Establish an environment where people withdisabilities can actively contribute.
Implement programs to develop the next generation(entire Group).

+

Achieve sustained growth28

Goal of the New Mid-Term Plan "G-EST 2025"
Strive for a balanced, highly profitable structure by implementing the Key Strategies.

Imaging Systems &Solutions business
Leverage to an evengreater degree

Global E2E business
Make it the second
pillar of the GroupNet sales

Net sales

25 billion yen

25 billion yen

Net sales

30%

35%

Percentage
of profit

10%

Transformational
business
Create a structure
capable of generating
stable profit
Net sales

40 billion yen

25%Group with a balanced, highly
profitable structure that is resilienteven under adverse circumstances

Live Entertainment
business
Put on the path to
growth100 billion yen

Operating income(Before goodwill amortization)

8 billion yen

Net sales

10 billion yen
29