FinTech Global Incorporated : Results for First Two Quarters of Fiscal 2023, ending September 30, 2023

The firm of innovative financing

Results for First Two Quarters of

Fiscal 2023, ending September 30, 2023

May 2023

FinTech Global Incorporated

TSE Standard Market Stock Code: 8789 https://www.fgi.co.jp/en/

• 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.

Index

Summary ・・・・・・・・・・・・・・・・・・ 2

Consolidated Performance ・・・・・・・・・・・ 3

Quarterly Changes in Consolidated Performance ・・ 4 Business Summary by Segment ・・・・・・・・・ 5

Investment Banking Business・・・・・・・・・・ 7

Public Management Business・・・・・・・・・・ 11

Entertainment Service Business ・・・・・・・・・13

Consolidated Financial Statements・・・・・・・・17

Changes in Key Financial Data ・・・・・・・・・ 20

Corporate Data ・・・・・・・・・・・・・・・21

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Summary

Marked brisk demand for private equity services that provide solutions, hinging on investment, to companies experiencing business succession issues. This underpinned an increase in revenues and helped FGI return to an income position.

Management looks forward to steady progress in the third quarter and beyond.

Have booked or will book ¥800 million in revenues and income over second and third quarters through investment in business succession projects and arrangement transaction services

• Recognize potential for ¥800 million in revenues, operating income and ordinary profit, respectively, thanks to investment income and income on arrangement transaction services for solutions used in several business succession projects.
• Of the abovementioned ¥800 million, ¥300 million was booked in the second quarter, and remaining ¥500 million will be booked in third quarter.

Favorable shift in new investment activity. Fund procurement for acquisition funds (into which FGI contributes capital to acquire target companies) grew to 89% of fiscal 2022 full-year amount

• Fund procurement (≒ investment) for acquisition funds formed to invest in target companies of business succession projects reached a cumulative ¥13.4 billion in the first two quarters of fiscal 2023. Anticipating investment exits from third quarter onward.

Balance of assets under management reached ¥65.1 billion, up 15.9% from end of fiscal 2022

Marked increase in assets entrusted by overseas investors for residence and logistics facility investment.

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Consolidated Performance

								(Millions of yen)
	Fiscal 2022		Fiscal 2023		YOY Change	YOY Change	Fiscal 2023	Progress
	First Two		First Two		Full Year
			(Amount)	(Percentage)	toward goal
	Quarters		Quarters		(Forecast)
Revenues	4,421		4,530		109	+2.5%	10,100	44.9%
Gross profit	1,609		2,381		772	+48.0%	－	－
Operating income	(39)		645		685	－	1,400	46.1%
Ordinary profit	(51)		628		680	－	1,400	44.9%
Profit attributable	(203)		477		680	－	1,000	47.7%
to owners of the parent
EBITDA	262		880		617	+235.1%	－	－

Revenues

Gross profit

Operating income

Consolidated

performance forecast

Note: EBITDA is calculated by returning depreciation costs and amortization of goodwill included in cost of revenue and selling, general and administrative expenses back to operating income.

In private equity operations, investment income and income on arrangement transaction services increased significantly, as business succession projects utilized private equity opportunities.

Aircraft asset management also showed growth. And despite exclusion of Rights and Brands Japan from scope of consolidation, revenues were up.

Huge increase, owing to higher revenues from business succession projects with high gross margin.

Although selling, general and administrative expenses rose 5.2% year on year, paralleling business expansion, operating income increased significantly, thanks to higher gross profit.

FGI continues to receive inquiries for solutions that utilize private equity to address business succession issues, and management expects this to translate into brisk project formation going forward as well. Taking a comprehensive view that includes anticipated investment exits on projects formed through to the end of the second quarter of fiscal 2023, management sees steady progress toward achievement of full-year performance targets. Therefore, no changes will be made to the existing performance forecast.

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Quarterly Changes in Consolidated Performance

(Millions of yen)

			Fiscal 2022				Fiscal 2023		YOY Q2	YOY Q2 YTD
	Q1	Q2	First two	Q3	Q4	Full year	Q1	Q2	First two	¥ change	¥ change
	quarters	quarters	% change	% change
Revenues	2,272	2,148	4,421	2,328	2,552	9,301	2,716	1,814	4,530	(334)	109
(15.6%)	2.5%
Gross profit	897	712	1,609	1,071	1,309	3,990	1,597	783	2,381	71	772
10.0%	48.0%
Operating	62	(102)	(39)	190	437	587	720	(74)	645	28	685
income(loss)	－	－
Ordinary profit(loss)	39	(91)	(51)	165	426	540	699	(71)	628	19	680
－	－
Profit/(loss) attributable	(47)	(155)	(203)	62	316	176	503	(25)	477	129	680
to owners of the parent	－	－
	213	49	262	313	577	1,153	836	44	880	(5)	617
EBITDA	(10.3%)	235.1%

Note: EBITDA is calculated by returning depreciation costs and amortization of goodwill included in cost of revenue and selling, general and administrative expenses back to segment income/(loss).

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