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

The firm of innovative financing

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

May 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 Two Quarters Business Summary

Revenues soared 91.3% to ¥3,277 million, fueled by opening of Metsä Village and Moominvalley Park.

Began booking revenue from admission fees, pay-per-use facilities, merchandise sales, restaurants, tenant income and parking fees. Moominvalley Park drawing 74,000 visitors over the 16 days between opening and March 31, 2019.

Overall, Metsä site marked milestone on March 26, 2019, when aggregate visitor count hit 500,000.

Investment banking business saw impairment on corporate investment. Asset investments made but did exit.

Made progress in securing stable income from asset management services and Metsä operations, but saw impairment of ¥360 million on investment into fund targeting life science and IT companies. Asset investments made but did not exit. Anticipate recovery in second half. Investment banking business showed revenue decrease.

Gross Profit	Costs on Metsä operation and licensing fees paid by newly consolidated Moomin licensing subsidiary were booked under
cost of revenues from this fiscal year.
	Cost of revenues skyrocketed 213.3%, to ¥2,327 million, reflecting additional newly consolidated subsidiaries and
	impairment loss on corporate investment. Gross profit thus slipped 2.0% year on year to ¥950 million.

Operating Loss

Loss attributable to

owners of parent

Selling, general and administrative expenses rose 53.0%, to ¥2,418 million, mainly owing to higher expenses related to Metsä as well as expenses at subsidiaries, of which the total increased. Operating loss hit ¥1,467 million.

Loss attributable to owners of parent for the first two quarters of fiscal 2019 was ¥1,244 million, owing to ¥339 million loss attributable to non-controlling interests, compared with loss of ¥32 million in the corresponding period a year ago.

No change to year-end forecast.

Before Moominvalley Park opened, first-year annual attendance for the whole Metsä site was projected at 1.37 million people, of which, Moominvalley Park visitors will probably account for 880,000. But attendance is likely to exceed 1.70 million, of which Moominvalley Park visitors account for 1.10 million. Moomin Monogatari has thus raised its target to two million guests in the first year, of which visitors to Moominvalley Park should account for 1.28 million, and is working on improvements to the service and operating structure to meet the needs of a higher guest count. More visitors should boost Metsä results, which will then contribute much more to consolidated performance in the second half.

Although the impairment loss on corporate investment in the investment banking business in the first half had a major impact on performance, demand for services, particularly real estate asset management services and M&A-related services, is moving in a favorable direction. A plan has also be set to exit certain corporate investments and asset investments in the second half.

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Fiscal 2019 First Two Quarters Consolidated Performance

	Fiscal 2018	Fiscal 2019	YOY	YOY	Fiscal 2019	Progress
(Millions of yen)	First Two	First Two	Change	Change	Full Year
toward goal
	Quarters	Quarters	Amount	Ratio	(Forecast)
Revenues	1,713	3,277	1,564	91.3%	11,040	29.7%
Gross profit	970	950	(19)	(2.0)%	6,880	13.8%
Operating	(610)	(1,467)	(857)	－	510	－
income(loss)
Ordinary	(706)	(1,567)	(861)	－	310	－
income(loss)
Profit/(loss)
attributable to	(414)	(1,244)	(830)	－	－	－
owners of the
				（Note）
parent
					Note: Forecast not provided.

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Business Summary by Segment - 1

Unit: Millions of yen

Revenue, gross profit and operating income includes intersegment transactions.

		Fiscal 2018		Fiscal 2019
Reporting Segments			First Two		YOY Change	Key Consolidated Subsidiaries
	First Two Quarters
			Quarters
	Revenue	1,459		1,381		(78)	FinTech Global
Investment Banking
Gross Profit	869		379		(489)	FinTech Asset Management
Business			FinTech Global Trading, FGI Capital Partners
	Operating income	397		(404)		(802)	FinTech M&A Solition,SGI-Group
	Revenue	181		445		264
Public Management	Gross Profit	79		237		157	Public Management Consulting Corporation
Consulting Business			Geoplan Namtech
	Operating income	(20)		76		97
	Revenue	77		1,563		1,486	Moomin Monogatari
Entertainment Service	Gross Profit	24		359		335	Hanno Local Resource Utilization LLC
Business			Rights and Brands Japan
	Operating income	(386)		(691)		(305)	Toranomon Ham
	Revenue	13		21		7
Others	Gross Profit	13		21		7	Adacotech Incorporated
	Operating income	(6)		(3)		2
Adjustment	Revenue	(17)		(133)		(115)
（Elimination of transactions	Gross Profit	(16)		(47)		(31)
among segments and corporate
expenses）	Operating income	(595)		(443)		151
Amount Booked on	Revenue	1,713		3,277		1,564
Consolidated Statement of	Gross Profit	970		950		(19)
Income	Operating income	(610)		(1,467)		(857)

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.
2. Right and Brands Japan fell fell under consolidation in the first quarter of fiscal 2019.
3. The ¥(443) million operating loss for the first two quarters of fiscal 2019, under adjustment, includes intersegment elimination (¥121 million in the first two quarters of fiscal 2019) as well as corporate expenses (¥(565) 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

Operating Income (loss)

(Millions of yen)				(Millions of yen)
4,000
				1,000	13	21
										79
21					24				359
3,000
					1,563
2,000								500	869				237
13			445
181
77
1,000																379
				1,381
1,459
											-47
-17	-133							-16
		0
0
2018/9			2019/9				2018/9				2019/9
			2Q	2Q			2Q				2Q

(Millions of yen)

500

						76
397
0
-386	-	20	-404

- 500 -6

-691

-595-3

- 1,000

-443

• 1,500
• 2,000

2018/9	2019/9
2Q	2Q

1,713	3,277	970	950	-610	-1,467
	Up 91.3％		Down 2.0％

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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