FinTech Global Incorporated : Results for First Three Quarters of Fiscal 2019, ending September 30, 2019

The firm of innovative financing

Results for First Three Quarters of Fiscal 2019, ending September 30, 2019

August 2019

FinTech Global Incorporated

Mothers Stock Code: 8789

http://www.fgi.co.jp/english/

• FinTech, in katakana script and English letters (registration 5113746), FinTech Global, in English letters (registration 5811521) and in katakana script (registration 5811522), and FGI (registration 5113748) are registered trademarks of FinTech Global Incorporated.

Fiscal 2019 First Three Quarters: Consolidated Business Summary

Revenues significantly higher, reflecting opening of Moominvalley Park.

Although FGI showed cumulative loss over first three quarters of fiscal 2019, owing to impact of expenses in preparation for opening of Moominvalley Park and a ¥ 365 million impairment loss on corporate investment, the Company showed improvement in the third quarter (April - June 2019), posting final profit of ¥ 34 million.

• Metsä site fully open (Metsä Village in November 2018 and Moominvalley Park in March 2019). Actively rolled out various strategies, including events to attract visitors. Capitalized on high travel and leisure activity demand during spring vacation and Golden Week (skipping-stone holidays at end of April and early May) and recorded one-millionth visitor on July 26, based on cumulative guest count from November 2018.
• Increase in asset investment exits.
• Shares in Adacotech Incorporated, a subsidiary in FGI's investment portfolio, were picked up by a venture capital fund under a third-party allocation of shares. As an FGI affiliate accounted for by the equity method, Adacotech's change in status led to booking of ¥120 million in extraordinary profit (gain on change in equity) on a consolidated basis.

Fiscal year-end performance forecast being closely examined

• In investment banking business, progress on performance front delayed mainly by impairment loss on corporate investment.
• In entertainment service business, burden of expenses during preparation for opening of Metsä site was heavy but segment loss is quickly improving since full-scale opening of site. Fueling business results on a consolidated basis.

(Measures to meet fiscal year-end targets)

• In investment banking business, emphasis will be on arrangement transaction services, including M&A-related services, sales of subdivided real estate investment products and investment exits.
• In entertainment service business, focus on measures to attract all types of guests to Metsâ.

Management will carefully track progress of these segments, and if changes to performance forecast are thought to be necessary, management will immediately issue an update.

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Fiscal 2019 First Three Quarters: Consolidated Performance

	Fiscal 2018		Fiscal 2019		YOY	YOY	Fiscal 2019	Progress
(Millions of yen)	First Three					Change	Change	Full Year
１Q	２Q	３Q	First Three	toward goal
	Quarters	Amount	Ratio	(Forecast)
				Quarters
Revenues	2,286	1,020	2,257	3,411	6,689	4,402	192.5%	11,040	60.6%
Gross profit	1,319	455	495	1,324	2,275	955	72.4%	6,880	33.1%
Operating	(1,095)	(747)	(720)	160	(1,307)	(211)	－	510	－
income(loss)
Ordinary	(1,197)	(804)	(762)	121	(1,445)	(247)	－	310	－
income(loss)
Profit/(loss)
attributable to	(874)	(599)	(645)	34	(1,210)	(335)	－	－	－
owners of the parent								Note1
EBITDA	(1,024)	(679)	(568)	416	(831)	192	－	－	－

Note1: Forecast not provided.

Note2: EBITDA is calculated by adding depreciation and amortization of goodwill to operating profit

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Business Summary by Segment - 1

						Unit: Millions of yen
						Revenue, gross profit and operating income include intersegment transactions.
		Fiscal 2018		Fiscal 2019
Reporting Segments		First Two							YOY Change	Key Consolidated Subsidiaries
	1Q	2Q		3Q	First Three
		Quarters
			Quarters
	Revenue	1,921	405	975		1,230	2,611		690	FinTech Global
Investment Banking	Gross Priofit	1,186	249	130		466	846		(340)	FinTech Asset Management
Business			FinTech Global Trading, FGI Capital Partners
	Operating income	401	(128)	(276)		26	(378)		(779)	FinTech M&A Solition,SGI-Group
	Revenue	294	182	263		148	593		298
Public Management	Gross Priofit	128	88	149		78	316		187	Public Management Consulting Corporation
Consulting Business			Geoplan Namtech
	Operating income	(59)	10	65		(3)	72		132
	Revenue	103	484	1,078		2,122	3,685		3,582	Moomin Monogatari
Entertainment Service	Gross Profit	36	131	228		808	1,168		1,132	Hanno Local Resource Utilization LLC
Business			Rights and Brands Japan
	Operating income	(639)	(392)	(299)		346	(345)		294	Toranomon Ham
	Revenue	13	7	13		3	24		10
Others	Gross Profit	13	7	13		3	24		10	Adacotech Incorporated
	Operating income	(14)	(4)	0		(8)	(12)		1
Adjustment	Revenue	(46)	(60)	(73)		(93)	(226)		(180)
（Elimination of transactions	Gross Profit	(45)	(21)	(26)		(32)	(80)		(35)
among segements and
corporate expenses）	Operating income	(783)	(232)	(210)		(201)	(644)		138
Amount Booked on	Revenue	2,286	1,020	2,257		3,411	6,689		4,402
Consolidated	Gross Profit	1,319	455	495		1,324	2,275		955
Statement of Income	Operating income	(1,095)	(747)	(720)		160	(1,307)		(211)

1. SGI-GroupB.V. and the subsidiaries fell under consolidation in the second quarter of fiscal 2018, and FinTech M&A Solution, Inc., and Geoplan Namtech Inc. fell under consolidation in the third quarter of fiscal 2018. Plan to remove Geoplan Namtech from scope of consolidation in fourth quarter of fiscal 2019.
2. Rights and Brands Japan fell under consolidation in the first quarter of fiscal 2019.
3. Adacotech removed from scope of consolidation at end of third quarter of fiscal 2019.
4. The ¥644 million operating loss for the first three quarters of fiscal 2019, under adjustment, includes intersegment elimination (¥182 million in the first three quarters of fiscal 2019) as well as corporate expenses (¥827 million in the same period) that are not allocated to any reporting segment. Corporate expenses are general and administrative expenses not associated with any reporting segment, mainly because it is difficult to justifiably allocate such expenses to any particular reporting segment.

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Business Summary by Segment - 2

		Revenues			Gross Profit
(Millions of yen)		(Millions of yen)
7,000
	24	2,500

Operating Income (loss)

(Millions of yen)

500

6,000
5,000	3,685

4,000
3,000	593

13

2,000 294

103

1,000									2,611
	1,921
0		-46	-226
		2018/9				2019/9
					3Q	3Q
				2,286				6,689

Up 192.5％

24

2,000

1,168

1,500

1. 128

1,000316

500		1,186
					846
				-45	-80
0
		2018/9			2019/9
			3Q			3Q
		1,319			2,275

Up 72.4％

72

401

0

- 59 - 378

- 639

- 500- 345

- 14 -12

- 1,000- 644

- 783

• 1,500
• 2,000

2018/9	2019/9
3Q	3Q
-1,095	-1,307

Note: Segment breakdown uses non-eliminated values.

		Investment		Public Management		Entertainment Service Business		Other		Corporate expenses and
		Banking Business		Consulting Business				eliminated transactions
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