FinTech Global Incorporated : Summary of Financial Statements for Fiscal 2021Update to Completed Version on Nov. 18, 2020) (under Japanese GAAP)

UNOFFICIAL TRANSLATION

The following is a translation, for convenience only, of the original document issued in Japanese.

Summary of Financial Statements for Fiscal 2021

		November 8, 2021
Company Name:	FinTech Global Incorporated	(Code Number: 8789 TSE 2nd Section)
	(URL:http://www.fgi.co.jp/ english)	TEL: [phone]
Representative:	President and Chief Executive Officer	Name: Nobumitsu Tamai
Contact:	Executive Vice President, Senior Executive Officer	Name: Seigo Washimoto

Scheduled date of General Shareholders' Meeting: December 21, 2021

Scheduled date to submit securities report: December 22, 2021

(Rounded down to the nearest million)

1. Consolidated Operating Results, Financial Position and Cash-Flows for fiscal 2021 (October 1, 2020- September 30, 2021)

(1) Consolidated operating results				（Percentages	indicate year-on-year changes.）
	Revenues		Operating income	Ordinary profit		Profit/(loss) attributable to
			owners of the parent
	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%
Fiscal 2021	8,107	18.5	178	－	115		－	130	－
Fiscal 2020	6,841	(25.4)	(992)	－	(1,135)		－	(1,186)	－

(For reference) Comprehensive income:

75 million yen for fiscal 2021

(－%)

(1,517) million yen for fiscal 2020

(－%)

Net income/(loss)

Net income/(loss)

Return on equity

Return on assets

Return on sales

per share

per share

(ROE)

(ROA)

(ROS)

(diluted)

Yen

Yen

%

%

%

Fiscal 2021

0.65

0.65

2.1

0.7

2.2

Fiscal 2020

(5.90)

－

(17.3)

(6.4)

(14.5)

(For reference) Share of profit(loss) of entities accounted for using equity method

6 million yen for fiscal 2021

(27) million yen for fiscal 2020

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets

per share

Millions of yen

Millions of yen

%

Yen

Fiscal 2021

16,457

7,439

38.5

31.47

Fiscal 2020

16,583

7,304

37.7

31.12

(For reference) Shareholders' equity:

6,328 million yen for fiscal 2021

6,258 million yen for fiscal 2020

(3) Consolidated cash flows

(Unit: Millions of yen)

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents

operating activities

investing activities

financing activities

at the end of the period

Fiscal 2021

747

(173)

(360)

2,379

Fiscal 2020

680

(282)

(767)

2,142

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2. Dividends

		Dividends per share			Total		Dividends on
	End of	End of	End of	End of		Payout ratio	equity
		dividends
	first	second	third	fiscal	Total	(Consolidated)	(DOE)
	(Annual)
	quarter	quarter	quarter	year			(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of	%	%
						yen
Fiscal 2020	－	0.00	－	0.00	0.00	-	－	－
Fiscal 2021	－	0.00	－	0.00	0.00	-	－	－
Fiscal 2022	－	0.00	－	0.00	0.00		－
(Forecast)

3. Consolidated financial forecasts for fiscal 2022 (October 1, 2021 - September 30, 2022)

(Percentages indicate year-on-year changes.)

							Profit/(loss) attributable
	Revenues		Operating income	Ordinary profit	to		E.P.S.
							owners of the parent
	Millions of	%	Millions of	%	Millions of	%	Millions of yen	%	Yen
	yen	yen	yen
Fiscal 2022	8,000	(1.3)	450	152.7	300	159.0	100	(23.6)	0.50

(Note) Forecast for the first two quarters of fiscal year ending September 30, 2022 has not been made.

*Notes

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries accompanying change in scope of consolidation): None
2. Changes in accounting policies, changes in accounting estimates, and restatements:

(a). Changes in accounting policies required by accounting standard: None

(b). Changes other than those in (a) above: None

(c). Changes in accounting estimates: None

(d). Restatements: None

(3) Number of shares issued (common shares)
1. Number of shares issued (including treasury stock):	201,115,600 shares for fiscal 2021
	201,114,600 shares for fiscal 2020
2. Number of shares of treasury stock:	- shares for fiscal 2021
	- shares for fiscal 2020
3. Average number of shares issued during the period	201,115,452 shares for fiscal 2021
	201,113,873 shares for fiscal 2020

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(For reference) Summary of non-consolidated operating results and financial position

1. Non-consolidated operating results and financial position for fiscal 2021 (October 1, 2020 - September 30, 2021)

(1) Non-consolidated operating results

(Percentages indicate year-on-year changes.)

Revenues

Operating income

Ordinary profit

Net income/(loss)

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Fiscal 2021

1,782

62.2

321

－

134

－

(238)

－

Fiscal 2020

1,098

(5.2)

(524)

－

(517)

－

(2,152)

－

Net income/(loss)

Net income

per share

per share

(diluted)

Yen

Yen

Fiscal 2021

(1.19)

－

Fiscal 2020

(10.70)

－

(2) Non-consolidated financial position

Total assets

Net assets

Equity ratio

Net assets

per share

Millions of yen

Millions of yen

%

Yen

Fiscal 2021

8,575

5,812

67.0

28.59

Fiscal 2020

8,669

6,025

68.9

29.72

(For reference) Shareholders' equity:

5,749 million yen for fiscal 2021, and 5,977 million yen for fiscal 2020

• This summary of financial statements is exempt from the audit procedures.
• Explanation of the appropriate use of performance forecasts and other related items.

The forward-looking statements included in this summary of financial statements are based on the assumptions, forecasts, and plans of the Company as of the date on which this document is made public. The Company's actual results may differ substantially from such statements due to various risks and uncertainties.

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1. Qualitative Information on Consolidated Operating Results and Financial Position

(1) Consolidated Operating Results

In fiscal 2021-the consolidated accounting period for FinTech Global Incorporated (FGI), ended September 30, 2021-the investment banking business pursued arrangement activities, driven by a strategy to reinforce private equity investment geared to such issues as business succession. In the entertainment service business, licensing-related operations benefited from stronger branding capabilities, which fueled expansion in domestic demand for Moomin products. However, the guest count at Metsä ran sluggish after a second state of emergency was called in January 2021, due to a resurgence in COVID-19 cases. Consequently, the segment remained focused on an account-balancing strategy designed to reduce costs.

Consolidated business performance was good, underpinned by the investment banking business, which enjoyed brisk private equity deal formation and exit activity and favorable demand for aircraft asset management services and thus offset sluggish results by the Metsä business. Revenues climbed 18.5% year on year, to ¥8,107 million, and gross profit jumped 45.7% year on year, to ¥3,370 million, reflecting revenue growth, particularly from arrangement services on investment banking deals which have low cost of revenue. Selling, general and administrative expenses dropped 3.4% year on year, to ¥3,192 million, thanks to sustained progress since the previous fiscal year on cost reduction at Metsä. Consequently, FGI rebounded out of the red zone, reversing from the operating loss of ¥992 million in fiscal 2020 to operating income of ¥178 million in fiscal 2021, replacing the ordinary loss of ¥1,135 million in the previous fiscal year with ordinary income of ¥115 million, and showing income attributable to owners of the parent, at ¥130 million, instead of a loss, at ¥1,186 million, in fiscal 2020.

		(Unit: Millions of yen)
	Fiscal 2020	Fiscal 2021	YOY
	Change
Revenues	6,841	8,107	1,266
Investment banking business	2,525	4,061	1,536
Public management consulting	253	242	(11)
business
Entertainment service business	4,304	4,106	(197)
Elimination	(242)	(303)	(60)
Gross profit	2,313	3,370	1,057
Investment banking business	1,482	2,725	1,243
Public management consulting	151	148	(2)
business
Entertainment service business	797	632	(165)
Elimination	(118)	(136)	(18)
Operating income/ (loss)	(992)	178	1,171
[Segment income/ (loss)]
Investment banking business	109	1,303	1,193
Public management consulting	(15)	(3)	11
business
Entertainment service business	(515)	(501)	14
Elimination or corporate expenses	(571)	(619)	48
Ordinary profit / (loss)	(1,135	115	1,251
Income (Loss) before income taxes	(1,444)	118	1,562
Profit/ (Loss) attributable to owners of	(1,186)	130	1,316
the parent

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A breakdown of performance by business segment is presented below. Revenues include inter- segment revenues and transfers.

a. Investment Banking Business

The investment banking business was involved in several arrangements, mostly related to business succession, and the associated private equity investments reached a point for exit. In aircraft asset management operations, the COVID-19 pandemic led to an increase in requests from financial institutions and owners (lessors) for technical services, such as aircraft inspection and aircraft returns. This pushed revenues upward.

As a result, the investment banking business generated ¥4,061 million in revenues, soaring 60.8% year on year. Segment income skyrocketed 1,087.0%, to ¥1,303 million.

b. Public Management Consulting Business

In the public management consulting business, the public accounting business directed efforts into marketing activities to promote consultations for creating financial documents based on unified standards for local governments as well as contract services, including preparation of financial analysis reports, introduction of public enterprise accounting and the formation of management strategies for public enterprises, with a particular emphasis on large local governments and authorities. As the segment was pursuing this focus, in January 2021, the Ministry of Internal Affairs and Communications asked local government offices to conduct a review of their respective public facility management plans, based on individual facilities plans, by March 2022. The segment therefore actively pushed ahead on marketing activities related to services to help local governments execute these reviews.

Meanwhile, the regional revitalization business focused on contract services, including discussions pursuant to the introduction of public-private partnership/public financial initiative techniques, for which demand is expected to grow.

The segment saw revenues slip 4.5% year on year, to ¥242 million, and while a loss of ¥3 million was recorded, it was an improvement over the ¥15 million loss booked a year ago.

c. Entertainment Service Business

Moomin Monogatari's Moominvalley Park and Rights and Brands Japan's Moomin character licensing business are the two wheels of the entertainment service business cart. The basic strategy for the segment hinged on expanding licensing fees by reinforcing Moomin branding activities to drive demand in Japan.

In Metsä operations, which include Moominvalley Park, Moomin Monogatari, Ltd., implemented thorough measures to prevent the spread of COVID-19 and then worked to draw guests to the site with efforts emphasizing improved event content, more appealing presentations that make use of the surrounding environment, and more ways to get to Metsä. The guest count at Metsä charted an upward trajectory in the first quarter of fiscal 2021, compared with the immediately preceding fourth quarter of fiscal 2020, rising 37.2%, to 240,000 people. However, from the second quarter onward, the guest count trended low, mainly due to the declaration of additional states of emergency, which led to a 4.0% year-on-year drop in annual attendance, to 740,000 people. As a result, Metsä-related revenues fell 18.4%, to ¥2,346 million.

In the licensing-related business, Rights and Brands Japan handles all Moomin character licensing in Japan, excluding rights to translation/publication of books, theme park operation and theatrical productions. While the pandemic created marketing challenges, overall licensing revenues grew. The company threw itself into PR activities to boost the brand value of Moomin characters and joined licensees in various plans to attract market attention. As a result, licensees were able to capture stay-at-home demand for everyday items during the pandemic as well as

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