ＩＭＡＧＩＣＡ　ＧＲＯＵＰ（6879） – [Delayed] Financial Results Presentation Fiscal Year Ended March 31, 20222022(FYE Mar. 2022)

Financial Results PresentationFiscal Year Ended March 31, 2022(FYE Mar. 2022)May 17, 2022Stock code: 6879https://www.imagicagroup.co.jp/Contents of Today’s PresentationⅠ Financial Results Summary for FYE Mar. 2022Ⅱ Progress of the Mid-Term Plan “G-EST2025″G-EST means: From four key strategiesG: The “3 Gs,” Growth, Global, and GroupE: E2E and Live Entertainment (global E2E business, live entertainment business)S: System (Imaging Systems & Solutions business)T: Transformation (Transformation business)* Fiscal years in this presentation are abbreviated as follows: Fiscal year ended March 31, 2022 → FYE Mar. 20222Contents of Today’s PresentationⅠ Financial Results Summary for FYE Mar. 2022Ⅱ Progress of the Mid-Term Plan “G-EST2025″G-EST means: From four key strategiesG: The “3 Gs,” Growth, Global, and GroupE: E2E and Live Entertainment (global E2E business, live entertainment business)S: System (Imaging Systems & Solutions business)T: Transformation (Transformation business)* Fiscal years in this presentation are abbreviated as follows: Fiscal year ended March 31, 2022 → FYE Mar. 20223Key Points of Financial Results １２３Company-wide operating income before goodwillamortization was 5.1 billion yen, the highest since the listing.Operating income before goodwill amortization returned to positive in all segmentsNet income decreased by 700 million yen due to the sale of a subsidiary in the previous year4Highlights of Financial ResultsSales decreased mainly due to sales of a subsidiary, etc., but both operating income before goodwill amortization and operating income substantially increased.(Million Yen)Net sales80,184YoY(6,543)94,090 86,727 80,184 Operating income before goodwill amortizationOperating income (loss)Net income attributable to owners of the parent5,131YoY+4,8113,417YoY+4,5012,729YoY(725)5,131 Gain on the sale of SDI shares (¥4,936 million) was posted to extraordinary income3,417 3,454 2,729 2,4561,351 320 664FYE Mar. 2020FYE Mar. 2021 FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021 FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021 FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021 FYE Mar. 20225△ 1,084Analysis of Changes in Net Sales (YoY)Excluding the sale of a subsidiary (SDI) and the impact of accounting standards, sales increased in all segments.Production Services Overall (4,892)Production ServicesOverseas (6,971)12,666 86,727 1,864 2,079 Content CreationProductionServices(Domestic)Increase in sales due to consolidation of Pixelogic, etc.（19,637）1,473 （4,839）（147）Decrease in sales due to the deconsolidation of SDIImaging Systems & SolutionsImpact of accounting standardsOther(Million Yen)80,184FYE Mar. 2021Actual△6,543FYE Mar. 2022Actual6Analysis of Changes in Operating Income before goodwill amortization (YoY)Production Services 4.2bn yen, Content Creation 1.0bn yen, Consolidated: 4.8bn yen income increase(Million Yen)Production ServicesOverall +4,217Production Services (Overseas) +2,3061,779 527 （270）（164）5,131 Contribution to profit from deconsolidation of SDIImaging Systems & SolutionsConsolidation adjustmentsContent Creation1,028 Increase due to consolidation of Pixelogic, etc.1,911 Production Services(Domestic)320 FYE Mar. 2021Actual+4,811FYE Mar. 2022Actual7Analysis of Changes in Operating Income before goodwill amortization (Vs. Initial Plan)Increased by 2 billion yen from the initial plan thanks to recovering orders received, strong E2E services, and the effect of restructuring(Million Yen)・Strong performance of E2E services and post-production services businesses・Reduction of fixed costs through structural reformsStrong performance of E2E services for video streaming service providersConsolidation of the new subsidiaryRecovery in orders for TV commercial production and Live music events860 239 （224）183 3,100 387 ContentcreationProduction Services(Domestic)Production Services(Overseas)Imaging Systems & SolutionsSluggish demand due to the impact of COVID-19Production ServicesOverall 1,099586 5,131 OtherFYE Mar. 2022Initial plan2,031FYE Mar. 2022Actual8Overview by Segment (FYE Mar. 2020-FYE Mar. 2022)Content CreationProductionServ ices l&SoutionsI imagngSystems Net sales26,20519,80921,674Operating incomebefore goodwill amortization(Million Yen)Increases in sales and profits Recovery in orders for TV commercial production and live 587music events Thorough cost management at theater movie and TV FYE Mar. 2020FYE Mar. 2021FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021FYE Mar. 2022(359)(440)animation47,72346,97342,0803,399 718 (818)Significant increase in profit despite lower sales due to sale of SDI Domestic: Reduced fixed costs due to restructuring and strong sales of E2E services and game production-related services (3DCG production and debugging) Overseas: Strong performance of E2E services for video FYE Mar. 2020FYE Mar. 2021FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021FYE Mar. 2022streaming service providers21,97521,00617,6392,7582,0461,776Decrease in sales and profits Systems for broadcasting stations : Struggle due to sluggish demand and limitations on sales activities High-speed cameras: Struggled in the 1H due to the impact of COVID-19, but recovered from the 2H onwardsFYE Mar. 2020FYE Mar. 2021FYE Mar. 2022FYE Mar. 2020FYE Mar. 2021FYE Mar. 20229*Production Services and Imaging Systems & Solutions in FYE Mar. 2020 and FYE Mar. 2023 are adjusted to reflect the change in segment classification.FYE Mar. 2023 Full-year Forecasts(Million Yen)FYE Mar. 2022FYE Mar. 2023TopicsActualForecastYoY% YoYNet sales80,18488,0007,8169.7%Net sales＋7.8 billion yen (＋9.7%） Content CreationTV Commercial production, drama delivery for OTT, etc. Production ServicesContinued strong performance for overseas OTT Imaging Systems & SolutionsImproved profitability in systems for broadcasting stations , etc.5,1315,200691.3%6.4% 3,4174.3% 3,9345.9%3,6004.1%3,3001835.3%(634)(16.1%)Operating incomeDepreciation increased due to the transfer of the Takeshiba office and 2,7292,100(629)(23.0%)investment for growth.Operating income before goodwill amortizationOperating income(Margin)(Margin)Ordinary incomeNet income attributableto owners of parentEarnings per share(Yen) 61.4947.30(14.19)(23.0%)Dividend per share15.0 yen15.0 yen－－Net incomeForecast a decrease YoY due to a decrease in income taxes (profit) resulting from tax-effect accounting10Contents of Today’s PresentationⅠ Financial Results Summary for FYE Mar. 2022Ⅱ Progress of the Mid-Term Plan “G-EST2025″G-EST means: From four key strategiesG: The “3 Gs,” Growth, Global, and GroupE: E2E and Live Entertainment (global E2E business, live entertainment business)S: System (Imaging Systems & Solutions business)T: Transformation (Transformation business)* Fiscal years in this presentation are abbreviated as follows: Fiscal year ended March 31, 2022 → FYE Mar. 202211(Re-posting) Mid-Term Plan “GｰEST2025”Become a Group consisted of a balanced, highly profitable businesses that is resilient even under adverse circumstances1. Expand “Global E2E” Business2. Establish a new Live Entertainment business3. Generate AdditionalBusiness Value inthe ImagingSystems &Solutions business4. Complete Transformation in the “Transformational business”Achieve company transformation through DXStrengthen R&D capabilitiesSecure & activate talented employeesSDGs initiatives12(Re-posting) Financial Goals in the Mid-Term Plan “G-EST2025″Targeting to become a balanced business structure(billion yen)■ Global E2E■ Live Entertainment■ Imaging Systems &■TransformationSolutionsFYE Mar. 2021 ActualFYE Mar. 2026 TargetComposition by business segment51%25%4%20%Net sales※692020年度(調整)Operating income(Before goodwill amortization) 100%※0.92020年度実績1002025年度8Composition by business segment40%25%10%25%25%30%35%10%*Net sales and operating income for FYE Mar. 2021 were adjusted for the impact of changes in accounting standards in overseas subsidiaries and the Imaging Systems & Solutions for comparison.132025年度Management Indicators for FYE Mar. 2023Net sales: Aim to exceed the Mid-Term Plan by at least 6%, and to exceed the YoY results by at least 10%.(100 million yen)+6.7%8808259001,000 ActualPlanMid-Term Plan690801750ActualFYE Mar. 2021FYE Mar. 2022FYE Mar. 2023FYE Mar. 2024FYE Mar. 2026Operating income margin: Aim to exceed Mid-Term Plan despite a YoY decline in profit margin due to investments for growth.(Before goodwill amortization)6.0%8.0%Mid-Term PlanActual6.4%4.0%Plan5.9%5.0%Actual1.0%ActualFYE Mar. 2021FYE Mar. 2022FYE Mar. 2023FYE Mar. 2024FYE Mar. 202614Key Points of Performance for FYE Mar. 2023１Investment for growth towards 2025 (approx. 3.5 billion yen)２Aiming for sales in Global E2E, Live Entertainment, and Transformation businesses to exceed planned targets in the Mid-Term Plan３Aiming for higher sales and profits in Imaging Systems & Solutions business by improving profitability15Initiatives by Key StrategyBecome a Group consisted of a balanced, highly profitable businesses that is resilient even under adverse circumstances1. Expand “Global E2E” Business2. Establish a new Live Entertainment business3. Generate AdditionalBusiness Value inthe ImagingSystems &Solutions business4. Complete Transformation in the “Transformational business”Achieve company transformation through DXStrengthen R&D capabilitiesSecure & activate talented employeesSDGs initiatives16Expand Global E2E BusinessIn FYE Mar. 2023, we intend to increase sales by 15% YoY, aiming for a level significantly higher than Mid-Term Plan for FYE Mar. 2026.(Billion yen)Net sales+15％24.127.625.023.020.016.615.7Overseas17.2Strategies for FYE Mar. 2023 Continue to focus on services for video streaming service providers in strong demand Forward-looking investments for growth(1) Expand capacity(2) Improve productivity and reduce costs7.57.67.37.8DomesticFYE Mar. 2021ActualFYE Mar. 2022ActualFYE Mar. 2022PlanFYE Mar. 2024Mid-Term PlanFYE Mar. 2025Mid-Term Plan*Figures for FYE Mar. 2021 are adjusted for the impact of M&A of overseas companies and intersegment sales for comparison.*Figures for FYE Mar. 2021 through FYE Mar. 2013 are adjusted for intersegment sales.1716.711.15.6Forward-looking Investments for GrowthContinue to secure competitive advantage through “Expand capacity” and “Raise productivity and reduce costs “Expand Capacity••reduce costsRaise productivity and Expand LA office and London officeExpand audio-related facilities and creative servicesLA Office• Relocate Egypt officeExpand audio-related facilities through the transfer of a new office, improving the security levelInvest in a digital cinema distribution companyUse partnerships with MetaMedia, which provides distribution services to theaters• Make additional investment in pHelix, our proprietary IT systemFurther streamlining of E2E-related operations by promoting development• Acquire excellent human resources in EgyptNew Egypt officeAchieve low-cost operations and 24-hour response to customers•Expand the English service team in South AfricaLow-cost translation of subtitled/dubbed English files bynative South African English speakers18Establish a new live entertainment businessWe operate businesses in 3 domains. In FYE Mar. 2023, we aim for sales to exceed the Mid-Term Plan.Net sales(Billion yen)10.0Strategies for FYE Mar. 2023Mid-term Plan4.0 billion yen(+0.6 billion yen)4.6viewing Hybrid live, high-definition live Mid-term Plan3.2 billion yen(+1.3 billion yen)4.51.04.61.26.02.32.90.52.43.53.43.75.4FYE Mar. 2021ActualFYE Mar. 2022ActualFYE Mar. 2022PlanFYE Mar. 2024Mid-term PlanFYE Mar. 2025Mid-term PlanbusinessNew entertanment iExisting entertanment businessi・Strengthen alliances with prime customer companies Experiential theme park (Metaverse)・Produce e-sports contents・Cooperate in the development of a virtual live platform for “PIA CORPORATION”*Figures for FYE Mar. 2021 to FYE Mar. 2026 are adjusted for intersegment sales.19Produce Virtual SpacesLeveraging the visualization technology cultivated through live entertainment in the metaverse worldHybrid LiveExperiential theme parkLive streaming in collaborationwith NTT DoCoMoCombining physical and virtual experienceE-sports theme parkContent productionMusic live in the VR space provided by PIAHigh-definition live viewingThree-screen high-definition video in collaboration with partners companiesPriority fieldsEntertainment MetaverseUrban Space Metaverse20Generate Additional Business Value in the Imaging Systems & Solutions businessIn FYE Mar 2023, we are aiming for a 15% increase in net sales YoY and a 11% range in operating income margin.Net sales and operating income margin (before goodwill amortization)(Billion yen)FYE Mar. 2023 Plan11%●FYE Mar. 2022Actual10.6%●●+15％18.522.016.114.4Strategies for FYE Mar. 2023 25.0 Expand and secure earnings in niche top businesses(Business that are targeting niche markets but have high market share and profitability)(1) High-speed camera (Market share: Approx. 25%)(2) Online delivery system for TV commercials (Market share: Approx. 30%)(3) Video network system for cardiovascular systems (Market share: Approx. 30% share) Improve profitability in systems for broadcasting stations Expand optical measurement businessFYE Mar. 2021ActualFYE Mar. 2022ActualFYE Mar. 2022PlanFYE Mar. 2024Mid-Term PlanFYE Mar. 2025Mid-Term Plan*Figures for FYE Mar. 2021 were adjusted for the effect of accounting standards changes and intersegment sales for comparison.*Figures for FYE Mar. 2021 through FYE Mar. 2013 were adjusted for intersegment sales.21Sales Breakdown by Business Segment and Growth Image for FYE Mar. 2023Aiming for more than 20% growth in niche-top businesses and more than 30% growth in systems for broadcasting stations and optical measurement businessesNet sales18.5 billion yen16.1 billion yen+15%Optical measurement+30% or moreSystems for broadcasting stations＋30%Niche top businesses+20% or moreOtherCADICTVideo and image processing LSIsOptical measurementSystems for broadcastingstationsVideo network system for cardiovascularOnline delivery system forTV commercialsHigh-speed cameraFYE Mar. 2022ActualFYE Mar. 2023Plan22Strategies for Niche Top Businesses• Aiming to further expand and secure earnings through new product releases, expansion of market share, etc. Strengthen sales by releasing new products High-speed camera(Increase profits)(3 products in year)”FASTCAM Nova S20” launched April 5 Steady growth in market share for automotive crash experiments due to sales of micro camera headsUltra-compact camera head “MH6 ST Camera Head” Strengthen sales capabilities by enhancing human resources to Online delivery system for TV(Secure profits)further increase market share by 30% Continued stable operation for repeat use by existing customers Provides medical information systems for diagnostic imaging that specialize in the cardiovascular field, and has been installed in many hospitals throughout Japan (over 30% market share).Video network system for cardiovascular(Secure profits) Aiming to further expand market share 23by launching cloud services, etc.Strategies for systems for broadcasting stations• Improve profitability of “selling products“ business and expand business of “selling services“ businessImprove profitability of “selling products“ businessResults for FYE Mar. 2022 struggled due to limited sales activities caused by the impact of COVID-19. In FYE Mar. 2023, we aim to increase sales and improve profitability by proposing new services, strengthening sales force, etc. Propose a system that can be operated by a small number of people by automating the process of managing, editing, and sending out video material for news programs for broadcasting stations. Acquire MEDIA SOLUTIONS.INC to further strengthen sales capabilities Providing a new video transmission and production environment for remote production in a subscription systemUsage example at homeExpansion of “selling products” business”Photron Live Cloud Service“・Started sales in January 2022・Video transmission service available over the general Internet, low-cost and easy for everyone to use. Prepare for deployment of network operation monitoring services*Service that monitors video equipment and other problems on the network24Strategies for Optical Measurement BusinessDeveloping 2 businesses: Optical Elements and Optical Measurement Equipment Optical Element Designing and marketing optical elements using “photonic crystals,” a cutting-edge light control technology, to meet customer needs. Developing in fields such as high-speed optical communications and semiconductor inspection Proprietary measurement system incorporating polarized light sensors into high-speed camera Since it can measure invisible minute distortions with polarized light, we will strengthen sales to overseas film manufacturers as a measurement device in production lines for liquid crystal films and other products.Optical Measurement EquipmentProductsHigh-speed polarization cameraCRYSTABirefringence measuring device KAMAKIRIUsageFor glass film distortion testing for smartphones (R&D)For liquid crystal TV film production linesCustomer/Unit priceGlass film manufacturer: @5 million to 10 million yenFilm manufacturer/@30 million to 100 million yen25Sales Plan for the Optical Measurement BusinessIn FYE Mar 2026, We aim for sales scale of 2 billion yen, approximately 2.7 times compared to FYE Mar. 2022(100 million yen)About 2.7x+30％Or more20151050leementOptical Optical measurementFYE Mar. 2022ActualFYE Mar. 2023PlanFYE Mar. 2026Mid-term plan26Complete Business TransformationProfitability is steadily improving, we aim for operating income margin in the 4% range in FYE Mar. 2023Net sales and operating income margin (before goodwill amortization)(100 million yen)5.0%3.0%0.0%△3.0%●346FYE Mar. 2023 Plan 4%●●●●●5.0%●● Mid-Term PlanStrategies for FYE Mar. 2023 Promote the creation of unique IP385396390400 Expand content production for video streaming service providers Perform thorough cost control in theatrical film, TV drama and animation productionFYE Mar. 2021ActualFYE Mar. 2022ActualFYE Mar. 2023PlanFYE Mar. 2024Mid-Term PlanFYE Mar. 2026Mid-Term Plan*Figures for FYE Mar. 2021 through FYE Mar. 2026 are adjusted for intersegment sales.27Monetization of Content Creation BusinessCreate intellectual properties (IP) and expand content production for video streaming service providers (OTT)Creation of original IPsContent for OTT• Plan and Create original work• Production of Original drama”ODD TAXI”, planned/written by P.I.C.S., became popular on TV and OTT and was made into a movie.Original drama for Netflix, “Alice in Borderland” The season 1 was a worldwide hit.Season 2 is under production and scheduled for distribution in December 2022.© P.I.C.S./Kotogawa Kotsu Partners• IP development for paperbacksOLM, Inc. is animating “Isekai Shokudō” from the Infos Hero Collection. It expanded to season 2 and a sequel was produced.*Images are not displayed due to copyright and other reasons.© Junpei Inuzuka, Yutaka, Shufunotomo Infos Co.,LTD./Production Committee for “Isekai Shokudo 2″© Haro Aso, Shogakukan / ROBOT28New Mid-Term Plan “GｰEST2025”Become a Group consisted of a balanced, highly profitable businesses that is resilient even under adverse circumstances1. Expand “Global E2E” Business2. Establish a new Live Entertainment business3.Generate Additional Business Value in the Imaging Systems & Solutions business4. Complete Transformation in the “Transformational business”Achieve company transformation through DXStrengthen R&D capabilitiesSecure & activate talented employeesSDGs initiatives29Management Reforms through DXDigital transformation (DX) in both business and management infrastructure (administration) is progressing smoothly and will accelerate in the future.Remote live production and editing• IMAGICA EEX held remote online live with Korean artists• Provision of video sharing cloud service “Photron Live Cloud Service”Digitization of all animation production workflows• Completed full digitization of operation by in-house creators and introduction of production management system⇒ Expand introduction to external creators in FYE Mar. 2023 Automating video processing and visualizing status• Development of post-production booking and coordination systems• Operation of a communication system with customersVisualization of business performance and the establishment of a business management systemReduction of clerical man-hours through paperless and electronic operations• BI-tool “ZEUS Cloud” introduced in the 2H of FYE Mar. 2022⇒Started initiatives to share management data and upgrade analysis operations• Contributed to streamlining operations by introducing electronic contract systems and AI-based contract checks•Introduction of the “Talent Palette”, a talent management system, in the 2H of FYE Mar 2022⇒ Promoting the visualization of human resource information, including the Group’s management Unification of personnel information datapersonnelStrengthening security and expanding the cloud environment• Achieved network-wide integration for 4 integrated management divisions• We will continue to strengthen the ICT environment after FYE Mar 2023.30levoutionBusiness business baseStrengthenng of iStrengthen R&D Capabilities and Secure & Activate Talented Employees Completed integration of R&D divisions (83 staff members + 4 new employees) Accelerate development by visualizing the Group’s technological development skills Participation in SIGGRAPH Asia 2021 as a Gold Sponsor, led by the Advanced Research Group, which is responsible for the Group’s research and development・Promote technological capabilities externally, and lead to new collaborations and stronger recruitmentStrengthen R&D capabilitiesExhibition booths in SIGGRAPH Asia Creating an environment for securing creative & technology human resources・Creators: establish flexible employment arrangements such as outsourcing・Engineers: currently defining requirements for necessary personnel, strengthening Secure & Activate Talented Employeesrecruitment Implementation of training to promote diversity・Training to foster a mindset that accepts diversity Completed introduction of talent management system・Promoting Visualize and Utilization of Management Human Resources within the 31GroupSDGs: Promoting Initiatives in Accordance with 3 Topics2. Creation of a production process that isenvironmentally and people-friendly3. Development of human resources and promoting diversityPHOTRON LIMITED introduced Green Power to Head Office Opened indoor farms as a new initiative to diversify employmentOur Group company PHOTRON LIMITED will begin using the “Green Power Provision Service” provided to tenants by Mitsui Fudosan Building Management Co., Ltd., the lessor of the Jimbocho Mitsui Building, which is the tenant, in April.By introducing this service, we decided to convert 100% of the electricity used at our head office to virtually renewable energy.IMAGICA DIGITALSCAPE Co.,Ltd., PHOTRON LIMITED, and Cosmo Space Co., Ltd. of our group opened an indoor farm in April 2022 using IBUKI, an indoor farm-type employment support service for people with disabilities.Exterior view of the indoor farmHerb cultivation in an indoor farm32Progress to FYE Mar. 2023 and Future Growth PlanSteady progress toward FYE Mar. 2026. We make investment for growth in FYE Mar. 2023.Net saeslamortization)margni (before goodwill Operating income +6.8％Mid-term Plan750Actual8011853216324145161+6.6％Mid-term Plan825Plan8802154019027646185370385380396Actual69016729144346Actual6.4%●4.0%●Plan5.9%●5.0%●Actual1.0%●FYE Mar. 2021Mid-term Plan900230602203906.0%●(100 million yen)Mid-term Plan1,000250100250400■ Global E2E■ Live Entertainment ■ Imaging Systems & Solutions■ Transformation8.0%●● Mid-Term PlanFYE Mar. 2021FYE Mar. 2022FYE Mar. 2023FYE Mar. 2024FYE Mar. 2026FYE Mar. 2022FYE Mar. 2023FYE Mar. 2024FYE Mar. 202633*Sales totals by strategy for FYE Mar. 2021(Actual) and (Actual)FYE Mar. 2023(Plan) do not match the totals because consolidation eliminations are not taken into account.Breakdown of Operating Income by StrategySignificant improvement in profitability and steady progress toward being a well-balanced, highly profitable companyOperating income(before goodwill amortization)Significant improvement in profitabilityGenerating profits in each businessFYE Mar. 2021Actual0.9 billion yen100%FYE Mar. 2023Plan5.2 billion yen■ Transformation■ Global E2E■ Imaging Systems &Solutions■ Live EntertainmentFYE Mar. 2026Mid-term Plan8 billion yen25%30%35%10%34(Re-posting)FYE Mar. 2023 Full-year Forecasts(Million Yen)FYE Mar. 2022FYE Mar. 2023TopicsActualForecastYoY% YoYNet sales80,18488,0007,8169.7%Net sales＋7.8 billion yen (＋9.7%） Content CreationTV Commercial production, drama delivery for OTT, etc. Production ServicesContinued strong performance for overseas OTT Imaging Systems & SolutionsImproved profitability in systems for broadcasting stations, etc.5,1315,200691.3%6.4% 3,4174.3% 3,9345.9%3,6004.1%3,3001835.3%(634)(16.1%)Operating incomeDepreciation increased due to the transfer of the Takeshiba office and 2,7292,100(629)(23.0%)investment for growth.Operating income before goodwill amortizationOperating income(Margin)(Margin)Ordinary incomeNet income attributableto owners of parentEarnings per share(Yen) 61.4947.30(14.19)(23.0%)Dividend per share15.0円15.0円－－Net incomeForecast a decrease YoY due to a decrease in income taxes (profit) resulting from tax-effect accounting35Appendix.36Consolidated Statements of IncomeFYE Mar. 2021FYE Mar. 2022ActualActualYoY% YoY86,72720,58223.7%△ 1,084ー△ 1,343ー7,1382,2403,5543,45480,18423,38629.2%3,4174.3%3,9344.9%1,3012,0373,1982,729△ 6,5432,803△7.5%13.6%4,5025,278ーー△ 5,837△81.8%△ 202△9.1%△ 356△10.0%△ 724△21.0%(Million yen)Net salesGross profit(Gross margin)Operating income (loss)(Operating margin)Ordinary income (loss)(Ordinary margin)Extraordinary incomeExtraordinary lossNet income (loss) beforeincome taxNet profit attributable toowners of parent(Ref.) Operating income beforegoodwill amortization　*Operating income before goodwill amortization includes operating income, amortization of goodwill, amortization373205,1314,8111501.9%Consolidated Balance Sheets(Unit: million yen)FYE Mar.2021FYE Mar.2022YoYCurrent assetsOf which, cash and depositsAssetsNon-current assetsOf which, goodwillTotal AssetsCurrent liabilitiesOf which, short-term loans payableNon-current liabilitiesOf which, long-term loans payableLiabilitiesNet AssetsTotal LiabilitiesShareholders’ equityAccumulated other comprehensive incomeStock acquisition rightsNon-controlling interestsTotal Net AssetsTotal Liabilities and Net Assets30,44041,06610,6256,9086,42030,00532,31712,04811,4824,170(3,232)7,079(1,415)4,019(1,365)60,44622,1177,4028,4955,38430,61327,149301112,37029,83260,44673,38432,27839,35829,9631,185-2,87634,02573,384(488)2,312(565)12,93810,1618,7452,814883(11)5054,19212,93838Consolidated Statements of Cash Flow(Million Yen)FYE Mar. 2021FYE Mar. 2022Net income (Loss) before income taxDepreciation and amortization Amortization of goodwillLoss (gain) on sale of investment securitiesLoss (gain) on sale of shares of subsidiaries and associates△ 4,936Decrease (increase) in trade receivables and contract assetsDecrease (Increase) in inventoriesDecrease (Increase) in notes and accounts payable-tradeIncrease (decrease) in agreement liabilities3,5542,757871－△ 522,74126△ 1,635△ 1,868△ 2,051△ 592△ 1,500△ 70955,859△ 23△ 4,995△ 1,3643,5964,939△ 4,048△ 3,0181,469△ 4852146,8563,1982,0591,406△ 414△ 417△ 1,992△ 6,7702,4315,393△ 3892,9117,414△ 3,996△ 612944417△ 546△ 134△ 3,928△ 2,023－△ 1,974△ 186△ 4,183211△ 486486,419Income taxes paidOther, netCash flows from operating activitiesPurchase of property, plant and equipmentPurchase of intangible assetsProceeds from sale of investment securitiesGain on sales of subsidiary stock accompanying a change in the scope of consolidationPayments of leasehold and guarantee depositsOther, netCash flows from investing activitiesNet increase (decrease) in short-term loans payableProceeds from long-term loans payableRepayment of long-term loans payableOther, netCash flows from financing activitiesEffect of exchange rate change on cash and cash equivalentsNet increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents accompanying change in the scope of consolidationCash and cash equivalents at end of period39(Million Yen)FYE Mar. 2021ActualFYE Mar. 2022ActualYoY% YoYFinancial Results by SegmentContent Creation(Operating margin)Production Services(Operating margin)Imaging Systems &SolutionsOtherNet salesOperating income (loss)Operating income (loss) before goodwill amortizationNet salesOperating income (loss)Operating income (loss) before goodwill amortizationNet salesOperating income(Operating margin)Operating income before goodwill amortizationNet salesOperating lossNet salesConsolidated totalOperating income (loss)Operating income before goodwill amortization19,809△ 440ー△ 44046,973△ 2,223ー△ 81821,0062,0469.7%2,046△ 1,063△ 46686,727△ 1,08432021,6745822.7%58742,0801,7264.1%3,39917,6391,7409.9%1,776△ 1,211△ 63180,1843,4175,131△ 4,892△10.4%△ 3,366△16.0%△ 305△14.9%△ 270△13.2%1,8641,0231,0283,9494,217△ 147△ 1644,5029.4%ーーーーーーー△ 6,543△7.5%4,8111501.9%40Major Topics for April to July 2021Apr. 5, 2021P.I.C.S.May 26, 2021PhotronJun. 1, 2021IMAGICA EntertainmentMedia servicesJul. 7, 2021IMAGICA EntertainmentMedia Services, IMAGICA Lab.The TV animation “ODD TAXI,” planned and written by P.I.C.S., aired from April to June 2021 in TV Tokyo’s late-night slot. Currently available on Amazon Prime Video!Launched a new version of the learning video sharing platform “CLEVAS” for educational and training institutions that supports Zoom integration.Absorbed IMAGICA SDI Studio and commenced operations as Shiodome Sound StudioReceived awards at the 25th JPPA AWARDS 2021, a competition for video and audio technology*As of July 2021AnimationProduced by P.I.C.S.×OLM© P.I.C.S./Odogawa Kotsu PartnersJul. 22, 2021IMAGICA EntertainmentMedia ServicesFirst in Japan! Introduced DTS: X system in the preview room to realize surround sound that enhances immersive feelingJun. 29, 2021IMAGICA GROUPJun. 30, 2021Imagica Digital ScapeJul. 15, 2021ROBOTParticipated as the Gold Sponsor in the International Conference SIGGRAPH Asia 2021 on CGs and interactive technologies. Plan to introduce a number of examples of the Group’s latest technologies and applications to the industrial fieldThe company has been certified as a Silver Partner by an international certification group (ISTQB) for its software testing.Aiming to expand test operations such as games, web, and appsStarted airing the new ABEMA original-series drama “Sakeguse 50” directed by Yuki Kobayashi at ROBOTMajor Topics for August to October 2021Aug. 11, 2021IMAGICA EEXAug. 19, 2021IMAGICA EEXAug. 20, 2021COSMO SPACEAug. 20, 2021IMAGICA EntertainmentJoint development with W TOKYO of “Virtual TGC (beta version),” an application that allows visitors to experience Tokyo Girls Collection in a VR spaceLaunched “Freelance Support” service to support freelancers such as games, videos, and the web creatorsProduced promotional video and curriculum video for “Gochisousama Cooking School,” an online cooking school for children run by chef Shinpei Kurihara.Film process staff won the 50th (FYE Mar 2021) Excellent Production Technology Award (formerly Shibata Award) sponsored by the Japan Association of Film Television Technologies.Aug. 23, 2021IMAGICA EntertainmentSep. 27, 2021PhotronSep. 28, 2021COSMO SPACEOct. 12, 2021ROBOTLaunched on-line sales of “Cine Keep 2TM”, an ammonium acid gas absorption agent that is effective in preventing film from being storedJapanese 2D CAD Software “Zu-Nan RAPIDPRO21” and “Zu-Nan RAPID21” were released on October 27th for all people involved in drawingsPhotography and content direction for MIYAVI Virtual Live 6.0 in Kyoto Kiyomizu Temple “MIYAVI in KIYOMIZU”.Netflix original series “Alice in Borderland” received the Best Creative Beyond Border Award at the Asian Contents AwardsMajor Topics for October to December 2021Oct. 25, 2021IMAGICA EEXCOSMO SPACECreated a fashion show in the Metaverse era at Tokyo Girls Collection with its spatial presentation and cutting-edge video technology!Nov. 1, 2021PhotronNov. 1, 2021IMAGICA EEXNov. 24, 2021IMAGICA GROUPAcquired all shares of ISLWARE Co., LtdImplemented a new form of online live distribution with NTT DoCoMo with the aim of expanding the live businessNotice of Investment and Business Alliance in Tokyo e-Sports Gate Co., Ltd.(C)Mynavi TOKYO GIRLS COLLECTION 2021 AUTUMNWINTERDec. 3, 2021ROBOTDec. 12, 2021IMAGICA GROUPDec. 28, 2021ROBOTROBOT’s artist Yujin creates animation for NHK’s Minna no Uta “Shin-kokyu” was broadcast from December 2021 to January 2022.IMAGICA GROUP “Sustainability Site” is newly established – Aiming to realize an affluent and sustainable society with “visual” at its core.NHK’s SDGs campaign characters, “Ao to Kii,” a short animation featuring Ao, the water fairy, and Kii, the light fairy, was broadcast on NHK E-television.Dec. 29, 2021IMAGICA Lab.COSMO SPACEIMAGICA Lab. and COSMO SPACE provide technical cooperation for the MIYAVI Virtual Live 6.0 in Kyoto Kiyomizu Temple “MIYAVI in KIYOMIZU”, a reenactment of the legendary live performance in a VR space.Major Topics for January to March 2022Jan. 31, 2022PhotronFeb. 8, 2022COSMO SPACEFeb. 15, 2022Imagica Digital ScapeFeb. 17, 2022PhotronStarted offering Photron Live Cloud Service to transmit/share images with high quality and low delaysProduced “NEC Networks SII Digital×Town” 5G Lab ContentsImagica Digital Scape sponsored e-sports Grand “REALFIGHT” online tournament for amateur gamers on Feb. 26 (Sat.)Launched SQ CAD, a new 3D CAD software for the production engineering fieldMar. 14, 2022IMAGICA EEXMar. 17, 2022IMAGICA EEXMar. 25, 2022Imagica Digital ScapeMar. 31, 2022PhotronLaunched Virtual TGC, the official TGC metaverse that fully recreates the world of Tokyo Girls Collection!Produce cutting-edge XR arena with large 4-sided LED panels and full-scale XRImaging Systems & Solutions!Announced the production of the animated film “Tenjin”. Participated in the “Anime no Tane 2022” project commissioned by the Agency for Cultural Affairs.Launched FASTCAM Nova S20, a high-end compact high-speed cameraContact 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/Twitter：https://twitter.com/IMAGICAGROUPDISCLAIMER: 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 on which these materials were disclosed. Actual performance may differ from numerical forecasts due to the uncertainties inherent in the judgments and assumptions made, as well as possibility of futurechanges that may occur in business management and internal and external circumstances.45