FinTech Global Incorporated : Summary of Financial Statements for the First Quarter of Fiscal 2021 (under Japanese GAAP) (Update to Completed Version on Feb. 17, 2021)

UNOFFICIAL TRANSLATION

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

Summary of Financial Statements for the First Quarter of Fiscal 2021

Company Name:FinTech Global Incorporated (URL:http://www.fgi.co.jp/english/)Representative: President and Chief Executive Officer

Contact: Executive Vice President, Senior Executive Officer Scheduled date for filing of securities report: February 12, 2021 Scheduled date of commencement of dividend payment: － Preparation of explanatory materials for quarterly financial results: Yes Information meetings arranged related to quarterly financial results: None

1. Consolidated results for the first quarter of fiscal 2021

(October 1, 2020 - December 31, 2020)

(1) Consolidated operating results

(Code Number: 8789 TSE 2nd Section)

TEL: [phone]

Name: Nobumitsu Tamai Name: Seigo Washimoto

February 9, 2021

(Rounded down to the nearest million)

（Percentages indicate year-on-year changes.）

Revenues	Operating income/(loss)	Ordinary profit/(loss)	Profit/(loss) attributable to owners of the parent
First quarter of fiscal 2021 First quarter of fiscal 2020	Millions of yen % 2,020 (8.6) 2,209 116.6	Millions of yen % 53 (258) - -	Millions of yen % 9 (297) - -	Millions of yen % (63) (284) - -

Profit/(loss) attributable to

(For reference) Comprehensive income:

0 million yen for the first quarter of fiscal 2021 (－)%

(313) million yen for the first quarter of fiscal 2020

Net income/(loss) per share	Net income/(loss) per share (diluted)
First quarter of fiscal 2021 First quarter of fiscal 2020	Yen (0.31) (1.42)	Yen - -

(2) Consolidated financial position

Total assets	Net assets	Equity ratio
First quarter of fiscal 2021 Fiscal 2020	Millions of yen 16,759 16,583	Millions of yen 7,199 7,304	% 36.5 37.7

(For reference) Shareholders' equity:

6,112 million yen for the first quarter of fiscal 2021 6,258 million yen for fiscal 2020

(－)%

2. Dividends

Dividend per share
End of first quarter	End of second quarter	End of third quarter	End of fiscal year	Total
Fiscal 2020	Yen －	Yen 0.00	Yen －	Yen 0.00	Yen 0.00
Fiscal 2021	－
Fiscal 2021 (Forecast)	0.00	－	0.00	0.00

(Note) Change from the latest dividend forecast: None

3. Consolidated financial forecasts for fiscal 2021 (October 1, 2020 - September 30, 2021)

year changes.)

(Percentages indicate year-on-year changes.)
Revenues	Operating income	Ordinary profit	Profit/(loss) attributable to owners of the parent	E.P.S.
Fiscal 2021	Millions of yen 9,000 % 31.6	Millions of yen % 540 -	Millions of yen % 370 -	Millions of yen % 250 -	Yen 1.24

en

(Note) Change from the latest consolidated financial forecasts: None

Forecast for the first two quarters of fiscal year ending September 30, 2021 has not been made.

*Notes

• (1) Changes in significant subsidiaries during the period: None

• (2) Adoption of specific accounting policies for quarterly consolidated financial statements: None

• (3) 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

• (4) Number of shares issued (common shares)

1. Number of shares issued (including treasury stock):	201,115,600 shares in the first quarter of fiscal 2021
201,114,600 shares in fiscal 2020
2. Number of shares of treasury stock:	－ shares for the first quarter of fiscal 2021
－ shares for fiscal 2020
3. Average number of shares issued during the first quarter:	201,115,013 shares in the first quarter of fiscal 2021
201,111,709 shares in the first quarter of fiscal 2020

* This summary of financial statements is exempt from the review 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.

1. Qualitative Information on Business Results and Financial Position (1) Business Results

In the first quarter-October 1, 2020 to December 31, 2020-of the fiscal 2021 consolidated accounting period for FinTech Global Incorporated (FGI) ending September 30, 2021, the investment banking business pursued arrangement activities, with an emphasis on private equity investments to address such issues as business succession. In the Metsä business, the focus was on an account-balancing strategy based on cost reduction to offset the impact of fewer guests due to the COVID-19 pandemic. Once measures were in place to prevent the spread of COVID-19, Metsä endeavored to attract guests by presenting appealing events and offering ways to better enjoy the site. These efforts helped push the guest count in a positive direction. In the licensing-related business, branding was the key to wider market interest in access to Moomin character use.

Consolidated results for the first quarter of fiscal 2021 were mixed. Despite a favorable trend in advisory services related to private equity investment and demand for aircraft asset management, a 21.0% year-on-year drop in the number of visitors to Metsä over the corresponding period a year ago limited revenue potential. Consequently, revenues fell 8.6% year on year, to ¥2,020 million. But gross profit climbed 18.6%, to ¥825 million, reflecting higher revenues, mainly from arrangement services with low cost of revenue ratio in the investment banking business. Selling, general and administrative expenses decreased 19.1%, to ¥772 million, owing to progress in cost reduction groupwide, especially at Metsä, that began in fiscal 2020. Consequently, FGI recorded operating income, at ¥53 million, compared with an operating loss of ¥297 million a year ago. In addition, while the Company posted a quarterly loss attributable to owners of the parent, at ¥63 million, this was a much lighter shade of red than in the first quarter of fiscal 2020, when the loss was ¥284 million. The quarterly loss of fiscal 2020 is due to ¥52 million in quarterly profit attributable to non-controlling interests.

(Unit: Millions of yen)

First Quarter of Fiscal 2020	First Quarter of Fiscal 2021	YOY Change
Revenues	2,209	2,020	(189)
Investment banking business	555	812	257
Public management consulting business	64	62	(1)
Entertainment service business	1,647	1,223	(423)
Elimination	(57)	(78)	(20)
Gross profit	696	825	129
Investment banking business	316	499	183
Public management consulting business	33	38	5
Entertainment service business	376	327	(49)
Elimination	(29)	(39)	(9)
Operating income/ (loss) 〔Segment income/ (loss)〕	(258)	53	312
Investment banking business	(71)	142	213
Public management consulting business	(7)	(2)	4
Entertainment service business	(18)	47	66
Elimination or corporate expenses	(161)	(134)	26
Ordinary income/ (loss)	(297)	9	306
Income /(Loss) before income taxes	(294)	11	305
Income/ (Loss) attributable to owners of parent	(284)	(63)	221

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

a. Investment Banking Business

In the investment banking business, revenue increased, paralleling higher demand for advisory and fundformation services to facilitate business succession projects as well as requests from financial institutions and owners (lessors) for technical services, such as aircraft inspection and aircraft returns, which arose as a consequence of the COVID-19 pandemic. Selling, general and administrative expenses decreased, reflecting efforts to build on the cost-cutting success achieved in fiscal 2020, especially in the area of personnel costs.

As a result, the investment banking business generated ¥812 million in revenue, soaring 46.4% year on year. In addition, the segment returned to profitability, with income of ˙¥142 million, compared with a loss of ¥71 million a year ago.

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.

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 3.1% year on year, to ¥62 million, and while a loss of ¥2 million was recorded, it was an improvement over the ¥7 million loss booked a year ago.

c. Entertainment Service Business

Moomin Monogatari's Moominvalley Park and Rights and Brands' 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 through wider demand in Japan through enhanced Moomin branding.

At Metsä, which includes Moominvalley Park, thorough measures to prevent the spread of COVID-19 were put in place, and then the push was on to draw crowds through various events and enhanced services. An autumn event was Moominvalley Park Harvest, which ran from September 12, 2020 through November 8, 2020. Winter events included Winter Wonderland, which opened on November 21, 2020 and continues through March 7, 2021, and Adventure Walk, an experience-style nighttime attraction. The appeal of these events brought 240,000 people to the site during the first quarter of fiscal 2021, up 37.2% over the immediately preceding fourth quarter of fiscal 2020. However, the first-quarter guest count was 21.0% less than in the first quarter of fiscal 2020, when the pandemic was not an influencing factor. Challenging conditions continue to affect operations. Consequently, Metsä-related revenues stalled at ¥850 million, down 33.1% year on year.

In the licensing business, growth was temporarily dulled in fiscal 2020 when the government called a state of emergency that forced many events to cancel and large commercial facilities, which are a key sales channel for licensees to market their merchandise, to close in April and May 2020. Later, when the economy reopened, signs of recovery emerged. As part of the effort to reinforce the Moomin brand, the licensing business is involved in "Moomin: The Art and the Story," a selection of original Moomin artwork that began touring Japan in April 2019. The exhibit was held in Sapporo and Kumamoto during the first quarter of fiscal 2021, and in Shizuoka from January 2021. Although the pandemic precluded events and activities, Rights and Brands worked with licensees to hammer out various plans to keep the Moomin profile high. As a result, the licensing business posted revenues of ¥373 million, down 0.8% year on year, rebounding close to the pre-pandemic level.

All told, the entertainment service business saw revenues drop 25.7% year on year, to ¥1,223 million. On a positive note, the segment turned a profit, at ¥47 million, compared with a loss of ¥18 million a year ago. This reflects a rally in Metsä guest count and efforts to balance accounts at the operating profit stage cost-cutting measures as well as a favorable shift in the licensing business.