IMAGICA GROUP Inc. Code 6879 October 31, 2019 Highlight of - PowerPoint PPT Presentation

Consolidated Financial Highlights for FY2019 2Q IMAGICA GROUP Inc. Code ： 6879 October 31, 2019

Highlight of Financial Results ２ Q Net sales increased 5.5 billion yen YoY . Operating income increased by 980 million yen and regained profitability. （ Reference ） （ Million Yen ） Operating income Net profit attributable to Net sales before goodwill Operating income owners of the parent amortization 47,422 834 275 865 YoY YoY YoY YoY ＋ 5,517 ＋ 774 ＋ 986 ＋ 1,029 865 47,422 834 41,904 275 60 We recorded 1,650 -164 million yen as gain on sales of non- current assets at extraordinary income Operating income before goodwill -710 amortization includes operating income, goodwill amortization and intangible fixed assets amortization FY2018 2Q FY2019 2Q FY2018 2Q FY2019 2Q FY2018 2Q FY2019 2Q FY2018 2Q FY2019 2Q 2

Financial Results by Segment Content Creation significantly increased sales. Imaging Systems & Solutions increased sales and profit. FY2018 2Q FY2019 2Q （ Million Yen ） Actual Actual YoY YoY ratio 15,454 10,697 4,756 44.5% Net sales - 26 - 329 303 ー Content Creation Operating income ー ー （ OP ratio ） 12,676 13,266 - 590 - 4.4% Net sales - 57 - 28 - 29 ー Production Services Operating income ー ー （ OP ratio ） 11,120 12,143 - 1,022 - 8.4% Net sales - 692 - 828 136 ー Operating income Media Localization ー ー （ OP ratio ） - 151 - 239 Operating income before 88 ー goodwill amortization 8,955 6,704 2,250 33.6% Net sales Imaging Systems & 1,250 671 579 86.3% Operating income Solutions 10.0% 14.0% （ OP ratio ） ー - 783 Net sales - 906 122 Adjustments ー - 198 Operating income - 195 - 3 47,422 13.2% 41,904 5,517 Net sales Consolidated 275 ー - 710 986 Operating income 3

Content Creation Sales grew, as feature film production expanded in size and number and as TV commercial and recordings of live-music performances increased. FY2018 2Q FY2019 2Q （ Million Yen ） Actual Actual YoY YoY ratio 10,697 15,454 4,756 Net sales +44.5% - 329 - 26 303 Content Creation Operating income ー ー ー （ OP ratio ） YoY ＋ 4,756 million YoY ＋ 303 million Net sales Operating income  More and bigger feature films (live-  Higher gross margin from bigger action and anime) sales  Additional sales from TV episodes  Lower goodwill amortization cost  Strong TV commercials production  Lower TV anime production cost and live-music recordings (major orders received) 4

Production Services The digital cinema service was successful, yet the human resources service lost sales and profit. FY2018 2Q FY2019 2Q （ Million yen ） Actual Actual YoY YoY ratio 13,266 12,676 - 590 Net sales - 4.4% - 28 - 57 - 29 Production Services Operating income ー ー ー （ OP ratio ） YoY - 590 million YoY - 29 million Net sales Operating income  Improved post-production profit  Healthy growth for digital cinema  Robust post-production for from effective cost reduction  Carried out an investment in the feature films and anime  Sales drop for human resources human resources service field (expansion of digital content business due to disposal of a business and such). consolidated subsidiary SG & A expenses increased. 5

Media Localization Fixed cost reduction measures improved operational income. FY2018 2Q FY2019 2Q （ Million Yen ） Actual Actual YoY YoY ratio 11,120 12,143 - 1,022 - 8.4% Net sales - 692 - 828 136 ― Operating income Media Localization ― ― （ OP ratio ） - 151 - 239 Operating income before 88 ― goodwill amortization YoY - 1,022 million YoY ＋ 136 million Operating income Net sales  Lower sales due to disposal of two  Progress in fixed cost reduction consolidated subsidiaries measures by reviewing  Slow business in Europe production system  Potential new orders for OTT in 2H  Growing high-margin orders from SDI and PXL collaboration (feature film trailer production and localization) 6

Imaging Systems & Solutions Both video systems and imaging systems businesses achieved sales and profit growth. FY2018 2Q FY2019 2Q （ Million Yen ） Actual Actual YoY YoY ratio 6,704 8,955 2,250 Net sales +33.6% Imaging Systems & 671 1,250 579 Operating income +86.3% Solutions 10.0% 14.0% （ OP ratio ） YoY ＋ 2,250 million YoY ＋ 579 million Net sales Operating income  Delivered major broadcasting  Improved gross margin from project increasing major, high-margin  Steadily growing on-line orders commercial transmissions  Successful sales of new high- speed camera in Europe and America 7

Consolidated Forecast for FY2019 No change in consolidated forecast disclosed on May 14 FY2017 FY2018 FY2019 （ Million Yen ） Forecast Actual Actual YoY YoY ratio （ May 14 ） 95,000 91,351 90,212 Net sales 4,788 5.3% 1,680 2,424 926 Operating income 754 81.4% （ OP ratio ） (2.7%) (1.8%) (1.0%) 1,200 2,424 789 Ordinary income 411 52.0% Net income(loss) 1,800 2,937 -2,010 3,810 － attributable to owners of the parent Earnings (loss) per share 40.86 65.98 -45.55 86.41 － of common stock (Yen) 8

Appendix.

Consolidated Statements of Income FY2018 2Q FY2019 2Q （ Million Yen ） Actual Actual YoY YoY ratio 41,904 47,422 5,517 Net sales 13.2% 10,499 11,357 857 Gross profit 8.2% (Ratio) 25.1% 23.9% - 710 275 986 Operating income ー (Ratio) ー 0.6% 233 171 - 61 Non-operating expenses ー 171 639 467 Non-operating expenses ＊ 272.4% - 649 - 192 456 Ordinary income ー (Ratiio) ー ー 371 1,658 1,286 Extraordinary income 346.6% 67 30 - 37 Extraordinary losses -54.9% - 346 1,435 1,781 Net profit (loss) before taxes ー Net profit (loss) attributable to - 164 865 1,029 ー owners of parent ＊ :FY2019 ２ Q non-operating expenses Interest expenses 169 ／ Equity in losses of affiliates 280 ／ Foreign exchange losses 106 ／ Other (Reference) 60 834 774 1290.0% Operating income before goodwill amortization ※Operating income before goodwill amortization includes operating income, goodwill amortization and intangible fixed assets 10

Consolidated Balance Sheets As of October As of March 31,2019 YoY （ Million Yen ） 31, 2019 40,119 33,901 Current Assets - 6,217 Cash and deposits 6,079 5,278 - 801 24,606 25,353 Non-current Assets 747 Goodwill 3,769 3,377 - 391 64,725 59,255 Total Assets - 5,469 26,712 23,336 Current liabilities - 3,376 Short-term loans payable 5,375 5,918 542 10,115 8,274 Non-current liabilities - 1,840 Long-term loans payable 6,169 4,812 - 1,357 36,828 31,610 Total Liabilities - 5,217 24,857 25,508 Shareholder’s equity 650 292 - 65 Accumulated other comprehensive income - 357 0 11 Stock acquisition right 11 2,747 2,189 Non-controlling interests - 558 27,897 27,644 Total Net Assets - 252 64,725 59,255 Total liabilities and Net Assets - 5,469 Net Cash* - 5,465 - 5,452 13 （ Cash and deposits － Long and short loans 11

Consolidated Cash Flows Sheets FY2018 2Q FY2019 2Q （ Million Yen ） - 346 1,435 Income before income taxs 1,416 1,359 Depreciation and Amortization 463 291 Amortization of goodwill 3,639 4,056 Increase(decrease) in notes and accounts receivable -trade - 1,947 825 Decrease(Increase) in inventories 122 - 1,154 Decrease(Increase) in notes and accounts payable -trade - 566 - 860 Income taxes paid 158 - 3,088 Others 2,940 2,865 Cash flows from operating activities ー - 1,650 Payments of short-term loans receivable ー 555 Collection of short-term loans receivable 2 2,673 Proceeds from sales of property, plant and equipment - 69 - 3,000 Purchase of stocks of subsidiaries and affiliates - 474 - 1,118 Others - 541 - 2,541 Cash flows from investing activities 371 601 Net increase in short-term loans payable - 1,244 - 1,240 Repayments of long-term loans payable - 512 ー Purchase of treasury stock - 445 - 220 Cash dividends paid - 53 - 158 Others - 1,883 - 1,018 Cash flows from financing activities 535 - 800 Net increase (decrease) in cash and cash equivalents 11,667 5,266 Cash and cash equivalents at the end of period 12

The Group’s Major Topics from July 2019 2019/7 2019/8/5 2019/9/1 2019/9/11 IMAGICA Lab. Photron M&E Solutions IMAGICA GROUP Photron “Mekong- Japan Exchange Year New Projects Corporate Governance New Products 2019” Anniversary Project Launched Kada OR for recording Guideline Participating as general and streaming surgery footage Launched Zuno RAPIDPRO 20 cooperation company for and Kada Live for recording and Established to show the and Zuno RAPID 20, the latest exchange and cooperation in streaming for the cardiology Group’s principal philosophy of editions of a domestic two- the areas of filmmaking, department business and corporate dimentional CAD software including the digital revival of governance. series. the first Myanmar- Japan co - produced feature film in 1935. 2019/10 2019/10 ROBOT ・ P .I.C.S IMAGICA Lab. Ebisu Cultural Festival 2019 The 32nd Tokyo International Film Festival Held an event for children at this local culture event in Ebisu Festival Supporter. Garden Place. 13