ＩＭＡＧＩＣＡ　ＧＲＯＵＰ（6879） – [Delayed]Consolidated Financial Highlights for Fiscal year ending March 31, 2022 Supplemental Materials

Consolidated Financial Highlights forFiscal year ending March 31, 2022Supplemental MaterialsIMAGICA GROUP Inc.Code：6879May 13, 2022Key points of financial results１２３Company-wide operating income before goodwill amortization was 5.1bn yen, the highest since listingOperating income before goodwill amortization turned positive in all segmentsNet income decreased by 700 million yen in part due to the impact of capital gains booked last year from the sale of a subsidiaryNotes in this document (* 1-5) are on p18. 2Financial results highlightsSales declined due to sale of subsidiary, but both operating income and operating income before goodwill amortization rose sharply(Unit: million yen)Net salesOperating income before goodwill amortizationOperating income (loss)Net income attributable to parent company shareholders80,184Change(6,543)5,131Change+4,8113,417Change+4,5012,729Change(725)94,090 86,727 80,184 5,131 Capital gains from the sale of SDI stock (4,936 million yen) were booked with extraordinary income3,417 3,454 2,729 2,4561,351 320 664FYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.20223(1,084)Analysis of increase/decrease in sales (YoY)Sales, excluding the sale of subsidiary SDI and the accounting standards change impact, increased in all segments(Unit: million yen)Production ServicesOverall (4,892)Production ServicesOverseas (6,971)12,666 86,727 1,864 2,079 ContentcreationProduction Services(domestic)Profit increase from consolidation of Pixelogic(19,637)1,473 (4,839)(147)OtherImaging systemsAccounting standards changeimpactSales decrease from removal of SDI from consolidation80,184FYE Mar.2021Actual(6,543)FYE Mar.2022Actual4Analysis of increase/decrease in operating income before goodwill amortization (YoY)Production Services 4.2bn yen, Content Creation 1.0bn yen, Consolidated: 4.8bn yen income increase(Unit: million yen)Production Services(Overall) +4,217Production Services (overseas) +2,3061,779 527 (270)(164)5,131 Imaging systemsConsolidated adjustments1,911 Income contribution from removal of SDI from consolidationContentcreation1,028 Profit increase from consolidation of PixelogicProduction Services(domestic)320 FYE Mar.2021Actual+4,811FYE Mar.2022Actual5Content CreationNet salesYoY＋1,864 (+9.4%)26,205 19,809 21,674 Profitability increased due to recovery of TV commercial production orders and strong live music events: profits up 1bn yen year-on-yearOperating income before goodwill amortization(Unit: million yen)YoY＋1,027587(359)(440)FYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.2022 Profitability of TV commercial production improved as orders recovered Solid sales thanks to movies, TV, animation, and dramas for video streaming service providers Strong orders for live music events thanks to online distribution as well as recovery of live events6Production Services businessSharp increase in profit due to ongoing strength in global E2E service *1 and structural reform* 2Operating income before goodwill amortization(Unit: million yen)Figures are sum of domestic and overseasNet salesYoY (4,892)46,973OverseasSDI PPC47,723OverseasSDI DomesticDomesticDomestic42,080OverseasPixelogicPPC718YoY +4,217DomesticOverseas(818)3,399OverseasDomesticFYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.2022 In Japan, services for video streaming service providers *3 remained strong. Digital cinema services improved significantly due to an increase in movies released in theaters. Post-production was also strong. Together with restructuring effects, profit increased sharply. Overseas, Pixelogic’s localization for video streaming service providers continued to perform well. As movie theaters reopened in the US and Europe, digital cinema service sales increased, and profits surged.7*Due to segment changes of subsidiaries, IMAGICA LIVE Co., Ltd. is added to the sales and operating income of the “Production Services Business” for FYE Mar.2020 and FYE Mar.2021.Production Services (overseas) Quarterly resultsA strong trend continued as sales and profits increased more than expected in 4QOperating income before goodwill amortization(Unit: million yen)FYE Mar.2022FYE Mar.2022Net sales6,0005,0004,0003,0002,0001,00008006004002000△ 2001Q Actual 2Q Actual 3Q Actual 4Q Actual 1Q Actual 2Q Actual 3Q Actual 4Q Actual Services for video streaming service providers remained strong in 4Q (local: Oct-Dec) Digital cinema services were also strong as movie theater releases normalized in the US and Europe8Imaging Systems & Solutions businessSales increased by 1.4bn yen excluding the impact of change in accounting standards *4, but profit decreased as systems for broadcasting stations struggledOperating income before goodwill amortization(Unit: million yen)Net salesYoY(3,367)Excluding impact of change in accounting standards+1,47221,97521,006YoY(270)Accounting standardimpact4,83917,6392,758 2,046 1,776 FYE Mar.2020 FYE Mar.2021 FYE Mar.2022FYE Mar.2020 FYE Mar.2021 FYE Mar.2022 Domestic sales of high-speed cameras recovered from 2H, and sales in Asia, US, and Europe remained strong Sales of online delivery system for TV commercials *5 remained strong due to expanding market needs Sales of video/image processing LSI were strong in Japan and overseas (especially in Asia) Systems for broadcasting stations struggled due to sluggish demand and restrictions on sales activities9*Impact of change in accounting standards: Impact of mobile communication line sales being booked as net figure*Due to segment changes of subsidiaries, IMAGICA LIVE Co., Ltd. is added to the sales and operating income of the “Imaging Systems & Solutions Business” for FYE Mar.2020 and FYE Mar.2021.FYE Mar.2023: Full-year forecasts- Sales expected to increase 7.8bn yen, but operating income increase 180mn yen because of higher depreciation from investment in growth- Net income expected to decrease in part because last fiscal year corporate taxes declined due to tax effect accounting(One million yen)Net salesOperating incomeOrdinary incomeOperating income before goodwill amortization(Profit margin)(Profit margin)Net income attributable to parent company shareholdersNet income per share (yen)FYE Mar.2022FYE Mar.2023ActualFinancial forecastYoYchangeYoYchange80,18488,0007,8169.7%5,1316.4% 3,4174.3% 3,9342,72961.495,2005.9%3,6004.1%3,300691.3%1835.3%(634)(16.1%)2,100(629)(23.0%)47.30(14.19)(23.0%)10Year-end dividend forecastDividend policyThe 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 a given 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 attributable to parent companyNet incomePer shareNet income attributable to parent companyNet incomeDividend forecastDividend payout ratioExpected for FYE Mar.20232,100 mn yen47.30 yen15.0 yen31.7%11Appendix.12Consolidated Statements of IncomeOperating income before goodwill amortization = operating income + goodwill amortization + amortization of intangible fixed assets including trademarks13FYE Mar.2021ActualActualChangeYoYNet sales86,72780,184(6,543)(7.5%)Gross profit20,58223,3862,80313.60%(Gross profit margin)23.70%29.20%Operating income (loss)(1,084)3,4174,502-(Operating profit margin)-4.30%Ordinary income (loss)(1,343)3,9345,278-(Recurring profit margin)-4.90%Extraordinary income7,1381,301(5,837)(81.8%)Extraordinary losses2,2402,037(202)(9.1%)Income before income taxes (loss)3,5543,198(356)(10.0%)Net profit attributable to shareholders of parentcompany3,4542,729(724)(21.0%)(Reference) Operating income before goodwillamortization3205,1314,8111501.90%(Unit: million yen)FYE Mar.2022Consolidated Balance Sheets14FYE Mar.2021FYE Mar.2022YoYCurrent assets30,44041,06610,625Of which, cash and deposits6,9086,420(488)Non-current assets30,00532,3172,312Of which, goodwill12,04811,482(565)Total Assets60,44673,38412,938Current liabilities22,11732,27810,161Of which, short-term loans payable7,4024,170(3,232)Non-current liabilities8,4957,079(1,415)Of which, long-term loans payable5,3844,019(1,365)Total Liabilities30,61339,3588,745Shareholders’ equity27,14929,9632,814Accumulated other comprehensive income3011,185883Stock acquisition rights11-(11)Non-controlling interests2,3702,876505Total Net Assets29,83234,0254,192Total Liabilities and Net Assets60,44673,38412,938(Unit: million yen)AssetsLiabilitiesNet AssetsConsolidated Statements of Cash Flow154Q FYE Mar.20214Q FYE Mar.2022Income before income taxes (loss)3,5543,198Depreciation and amortization2,7572,059Amortization of goodwill8711,406Gain/loss on sales of investment securities－(414)Gain/loss on sale of shares of subsidiaries and affiliates(4,936)(417)Increase/decrease in trade receivables and contract assets(52)(1,992)Increase/decrease in inventory2,741(6,770)Decrease (Increase) in notes and accounts payable-trade262,431Increase/decrease in contract liabilities(1,635)5,393Income taxes paid(1,868)(389)Other(2,051)2,911Cash flow from operating activities(592)7,414Purchase of property, plant and equipment(1,500)(3,996)Purchase of intangible assets(709)(612)Income from the sale of investment securities5944Proceeds from sale of shares of subsidiaries resulting in change in scope of consolidation5,859417Expenditure by depositing security deposit and compensation(23)(546)Other(4,995)(134)Net cash used in investing activities(1,364)(3,928)Net increase (decrease) in short-term loans payable3,596(2,023)Proceeds from long-term loans payable4,939－Repayment of long-term loans payable(4,048)(1,974)Other(3,018)(186)Cash flow from financing activities1,469(4,183)Effect of exchange rate change on cash and cash equivalents2211Increase/decrease in cash and cash equivalents(485)(486)Increase/decrease in cash and cash equivalents resulting from change in scope ofconsolidation1448Cash and cash equivalents at end of period6,8566,419(Unit: million yen)Financial Results by Segment*Due to segment changes of subsidiaries, , the FYE Mar.2021 figures for “Production Services business,” “Imaging Systems,” and “Other” have been changed.16FYE Mar.2021ActualActualYoY change% YoYNet sales19,80921,6741,8649.40%Operating income (loss)(440)5821,023-(Operating profit margin)-2.70%Operating income (loss) before goodwill amortization(440)5871,028-Net sales46,97342,080(4,892)(10.4%)Operating income (loss)(2,223)1,7263,949-(Operating profit margin)-4.10%Operating income (loss) before goodwill amortization(818)3,3994,217-Net sales21,00617,639(3,366)(16.0%)Operating income2,0461,740(305)(14.9%)(Operating profit margin)9.70%9.90%Operating income before goodwill amortization2,0461,776(270)(13.2%)Net sales(1,063)(1,211)(147)-operating loss(466)(631)(164)-Net sales86,72780,184(6,543)(7.5%)Operating income (loss)(1,084)3,4174,502-Operating income before goodwill amortization3205,1314,8111501.90%OtherConsolidated total(Unit: million yen)FYE Mar.2022Content CreationProduction ServicesbusinessImaging Systems &Solutions businessNotes*1 Global E2E servicesRefers to an integrated end-to-end (E2E) service that covers the entire post-production process for feature 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 Structural reformThe structural reform discussed in this document refers to the voluntary retirement implemented in the Production Services business segment to achieve sustainable growth and a rebound in financial performance of the IMAGICA GROUP, as stated ”Notice of Establishment of New Subsidiaries, Structural Reform of Production Services, and Group Business Reorganization” disclosed on January 22, 2021 (posted in English on February 9, 2021).*3 Video streaming service providersRefers to companies that provide video streaming services on a platform through the Internet.*4 Impact from a change in accounting standardThis refers to the impact from the change in accounting standard in the Imaging Systems & Solutionsbusiness segment, which resulted in posting the net amount for mobile communication line sales.*5 Online delivery system for TV commercialsRefers to the service for online delivery of TV commercial source materials, etc. (service provided byPHOTRON: C.M. HARBOR).17Contact for inquiries:IMAGICA GROUP Inc. Corporate Management Department1-14-2 Kaigan, Minato-ku, Tokyo 105-0022, JapanEmail：ir@imagicagroup.co.jpURL：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.18