FinTech Global Incorporated : Summary of Financial Statements for the First Quarter of Fiscal 2022 (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 the First Quarter of Fiscal 2022

		February 9, 2022
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:	Director, Senior Executive Officer	Name: Takashi Senda

Scheduled date for filing of securities report: February 14, 2022

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

(Rounded down to the nearest million)

1. Consolidated results for the first quarter of fiscal 2022 (October 1, 2021 - December 31, 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	%
First quarter of fiscal 2022		2,272	12.5	62	18.3		39	328.0			(47)	-
First quarter of fiscal 2021		2,020	(8.6)	53	-		9	-		(63)	-
(For reference) Comprehensive income:	8 million yen for the first quarter of fiscal 2022	(－)%
			0 million yen for the first quarter of fiscal 2021	(－)%
		Net income/(loss)		Net income
			per share
		per share
			(diluted)
			Yen			Yen
First quarter of fiscal 2022			(0.24)			-
First quarter of fiscal 2021			(0.31)			-
(2) Consolidated financial position
		Total assets		Net assets			Equity ratio
			Millions of yen		Millions of yen		%
First quarter of fiscal 2022			16,419			7,448			38.4
Fiscal 2021			16,457			7,439			38.5
(For reference) Shareholders' equity:		6,298 million yen for the first quarter of fiscal 2022
			6,328 million yen for fiscal 2021

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2. Dividends
			Dividend per share
	End of	End of	End of	End of	Total
	first quarter	second quarter	third quarter	fiscal year
	Yen	Yen	Yen	Yen	Yen
Fiscal 2021	－	0.00	－	0.00	0.00
Fiscal 2022	－
Fiscal 2022 (Forecast)		0.00	－	0.00	0.00
(Note) Change from the latest dividend forecast: None

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

(Percentages indicate year-on-year changes.)

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

(Notes)

1. Change from the latest consolidated financial forecasts: None

2. 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: 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: Yes

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

(c). Changes in accounting estimates: None

(d). Restatements: None

Note: For details, please refer to "2. Consolidated Financial Statements and Primary Notes (3) Notes to Quarterly Consolidated Financial Statements (Change in accounting policies)".

(4) Number of shares issued (common shares)
1. Number of shares issued (including treasury stock):	201,295,200 shares in the first quarter of fiscal 2022
	201,115,600 shares in fiscal 2021
2. Number of shares of treasury stock:	－ shares for the first quarter of fiscal 2022
	－ shares for fiscal 2021
3. Average number of shares issued during the first quarter:	201,134,050 shares in the first quarter of fiscal 2022
	201,115,013 shares in the first quarter of fiscal 2021

• 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.

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1. Qualitative Information on Business Results and Financial Position

(1) Business Results

In the first quarter-October 1, 2021 to December 31, 2021-of the fiscal 2022 consolidated accounting period for FinTech Global Incorporated (FGI) ending September 30, 2022, the investment banking business pushed forward on the formation of deals to further accelerate private equity investment addressing such issues as business succession. In the entertainment service business, Metsä operations saw guest count rebound over the preceding quarter-fourth quarter of fiscal 2021-once the state of emergency was lifted, and took steps to update the design at Moominvalley Park and reinforce the structure to meet an anticipated increase in guests as society moves into with-COVID and post-COVID stages. In licensing activities, the handling volume of Moomin merchandise by licenses expanded, driving revenues higher.

Consolidated results for the first quarter of fiscal 2022 were driven by a strong contribution from the investment banking business, which offset the impact of a short closure at Moominvalley Park for design updates, leading to revenues of ¥2,272 million, up 12.5% year on year, and gross profit of ¥897 million, up 8.6% year on year. Selling, general and administrative expenses rose 8.0%, to ¥834 million, mainly due to an increase in staffing to match business expansion as well as greater outsourcing of some business activities. Nevertheless, operating income climbed 18.3% year on year, to ¥62 million, and ordinary income soared 328.0%, to ¥39 million over the corresponding quarter a year ago. Quarterly loss attributable to owners of the parent improved, settling at ¥47 million compared with ¥63 million a year ago, reflecting ¥60 million in quarterly profit attributable to non-controlling interests. Of note, revenues and cost of revenues each decreased by ¥20 million, compared with the previously applied accounting treatment method due to the application of "Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan

Statement No.29, March 31, 2020), but gross profit, operating income, ordinary income and quarterly profit before taxes have not been affected by the change in accounting treatment.

(Unit: Millions of yen)

	First Quarter of Fiscal 2021	First Quarter of Fiscal 2022	YOY Change
Revenues	2,020	2,272	252
Investment banking business	812	1,058	245
Public management consulting business	62	108	46
Entertainment service business	1,223	1,181	(41)
Elimination	(78)	(76)	1
Gross profit	825	897	71
Investment banking business	499	574	74
Public management consulting business	38	54	15
Entertainment service business	327	301	(25)
Elimination	(39)	(32)	7
Operating income	53	62	9
〔Segment income/ (loss)〕
Investment banking business	142	198	56
Public management consulting business	(2)	8	11
Entertainment service business	47	36	(11)
Elimination or corporate expenses	(134)	(180)	(46)
Ordinary income	9	39	30
Income before income taxes	11	38	27
Income/ (Loss) attributable to owners of parent	(63)	(47)	15

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

a. Investment Banking Business

The investment banking business marked favorable progress on transaction services for private equity investment deals and investment exits, and saw an increase in fee income through an increase in services for other asset management transactions. In addition, in aircraft asset management services, requests for aircraft inspections and technical services that accompany return of aircraft and other situations remained brisk as a consequence of the pandemic. Reliance on outsourcing grew to address increasing inquiries and meet demand.

As a result, segment revenues jumped 30.2% year on year, to ¥1,058 million, and segment income surged 39.6%, to ¥198 million.

b. Public Management Consulting Business

In the public management consulting business, which hinges on Public Management Consulting Corporation, the marketing push begun in fiscal 2021 to help large local governments in particular with preparation of financial documents continued, with the number of requests for contract services from prefectures to create financial documents and build better fixed asset ledgers increasing by four, to seven, in the current fiscal year for prefectures that runs from April 2021 through March 2022 compared with the local governments' previous fiscal year (April 2020-March 2021). In addition, the Ministry of Internal Affairs and Communications asked local governments in January 2021 to execute a review of general management plans for public facilities, and Public Management Consulting vigorously pushed ahead on marketing activities related to services that would help local governments execute these reviews. This emphasis led to a significant increase in contracted services, and inquiry activity continues.

The segment thus saw a 74.2% year-on-year surge in revenues, to ¥108 million, and reversed its loss position-¥2 million in the first quarter of fiscal 2021-with income of ¥8 million.

c. Entertainment Service Business

In Metsâ operations, remodeling work under a new theme-"Well-being"-commenced in late-November and early-December 2021 to reimagine content and services geared to the needs of guests to Moominvalley Park. Through this, the site switched to an operating format matched to the needs of guests seeking a place of nature, healing and relaxation, and shifted to a fee structure that is easier-to-understand, with ticket prices based exclusively on a one-day pass. The Metsä guest count rebounded 33.9% over the preceding quarter- the fourth quarter of fiscal 2021-to 220,000 people, once the state of emergency was lifted. The guest count dropped year on year, a reactionary effect due to the absence of the Go To Travel campaign that was in effect for most of the first quarter of fiscal 2021 and also due to the 11-day closure of the site for remodeling work. But daily guest counts in December 2021, post-remodeling, were up about 20% over the level recorded in December 2020. Reflecting challenges, however, Metsä-related revenues were down 18.8% year on year, to ¥690 million.

In licensing-related operations, handling volume of licensed Moomin merchandise, particularly fashion items, expanded. As a result, revenues from licensing-related operations jumped 31.8% over the first quarter of fiscal 2021, to ¥491 million. In addition, efforts were directed toward promoting a strategy linked to the "One-Moomin" global strategy. As part of this strategy, preparations moved along to launch an official online shop-operated by Moomin Monogatari with revenues and expenses booked under Metsä-relatedoperations-in Japan in cooperation with Moomin Characters Ltd., which is headquartered in the Moomin homeland of Finland. To test the market, a pre-launch took place December 1-20, 2021. But traffic was so heavy on the first day of the pre-launch that the server was overwhelmed and users had trouble accessing the online shop. For the grand opening in March 2022, the selection of licensed merchandise will be expanded, with product content three to four times that offered during pre-launch.

All told, the entertainment service business saw a 3.4% decrease in revenues, to ¥1,181 million, and a

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24.9% drop in income, to ¥36 million, compared with the first quarter of fiscal 2021. Note that revenues were impacted by application of the accounting standard on revenue recognition. The decrease was ¥20 million.

1. Consolidated Financial Position Assets
   Total assets at the end of the first quarter of fiscal 2022 stood at ¥16,419 million, dipping 0.2% from the end of fiscal 2021 on September 30, 2021. The change largely reflects decreases of ¥274 million in cash and time deposits, ¥83 million in investments in securities, trade, mainly due to progress on the sale of real estate trust beneficiary rights, and ¥123 million in property, plant and equipment, due to depreciation and amortization on Moominvalley Park buildings and interior and exterior fixtures, which together offset an increase of ¥374 million in accounts receivable, trade, and contract assets (listed as accounts receivable, trade in the previous fiscal year).

Liabilities

Total liabilities settled at ¥8,970 million at the end of the first quarter of fiscal 2022, inching down 0.5% from the end of fiscal 2021 on September 30, 2021. The change is primarily due to decreases of ¥92 million in short-term loans payable, ¥41 million in accrued employee bonuses and ¥58 million in lease obligations on noncurrent liabilities, which overshadowed increase of ¥239 million in accounts payable, trade.

Net assets

Net assets at the end of the first quarter of fiscal 2022 amounted to ¥7,448 million, up just 0.1% from the end of fiscal 2021 on September 30, 2021. The change is mainly due to an increase of ¥57 million in non- controlling interests, which offset a decrease of ¥47 million in retained earnings due to the booking of a quarterly loss attributable to owners of the parent.

1. Information on Forward-Looking Statements, including Consolidated Performance Forecasts
   (Unit: Millions of yen)

	Fiscal 2022	Fiscal 2022 Full Year	Progress toward goal
	First Quarter (Actual)	(Forecast)
Revenues	2,272	8,000	28.4％
Operating income	62	450	14.0％
Ordinary income	39	300	13.2％
Profit/(loss) attributable to	(47)	100	－
owners of the parent

The consolidated performance forecast for fiscal 2022, ending September 30, 2022, is as presented in the table above. It is unchanged from the outlook presented in the summary of financial statements for fiscal 2021 released on November 8, 2021.

Private equity investment and aircraft asset management, in particular, shifted in a positive direction in the first quarter of fiscal 2022. In Metsä operations, management sees signs of recovery following the remodeling work, highlighted by a 20% year-on-year increase in daily Metsä guest counts in December

2021. Although the path ahead is unclear, obscured by such issues as the rapid spread of a new COVID-19 variant of concern as the second quarter began, the remodeling work at Moominvalley Park has reinforced the Metsä operating structure in anticipation of a rising guest count as the world moves into with-COVID and post-COVID stages. Management expects Metsä operations to contribute to consolidated results going forward.

Note that the consolidated performance forecast is based on information currently available to management and certain assumptions deemed reasonable. Actual results may differ substantially from expectations for a variety of reasons.

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