FinTech Global Incorporated : Results for First Two Quarters of Fiscal 2024, ending September 30, 2024

The firm of innovative financing

Results for First Two Quarters of

Fiscal 2024, ending September 30, 2024

May 2024

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

Revisions to Consolidated Performance Forecast・・・・・・・・・4

Quarterly Changes in Consolidated Performance ・・・・・・・・・5

Business Summary by Segment・・・・・・・・・・・・・・・・ 6

Investment Banking Business ・・・・・・・・・・・・・・・・ 8

Public Management Business ・・・・・・・・・・・・・・・・ 12

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

Financial Statements ・・・・・・・・・・・・・・・・・・・・16

Repurchase of Own Shares・・・・・・・・・・・・・・・・・・19

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

Corporate Data ・・・・・・・・・・・・・・・・・・・・・・ 21

Copyright© FinTech Global Incorporated

1

Summary

Investment banking business, especially services related to business succession, continued to grow, fueling steady increases in revenues and income. Upwardly revised full-year performance forecast.

Demand for business succession solution services remained high

• Formation of new business succession projects and investment exits shifted into high gear.
• Investment into acquisition fund to facilitate business succession projects totaled ¥33.0 billion over first two quarters. Already at 246% of full-year amount in previous fiscal year.

Balance of assets under management reached ¥151.9 billion, up 13.3% from the end of the first quarter

• Increase in balance of assets under management reflects management of assets invested in residences by overseas institutional investors.

Favorable aircraft asset management activity continued, with revenues jumping 32.5%

Metsä guest count decreased but higher spending per guest and lower costs led to improvement in loss position

• Guest count was down 5.3% compared with corresponding first two-quarter total a year ago, but extended time spent on site to enjoy evening events and a review in prices translated into higher spending per guest.
• Segment revenues were on a year-on-year par. Progress in reducing costs contributed to a lighter shade of operating red.
• Began upgrades to existing facilities through new investment as well as introduction of new permanent contents.

Upwardly revised full-year performance forecast

• Driven by favorable demand for business succession solution services, upwardly revised revenues by ¥1.4 billion, operating income by ¥400 million, ordinary income by ¥400 million and profit attributable to owners of the parent by ¥200 million.

Repurchased treasury shares in second quarter, and set new parameters on May 10 for repurchase

• Repurchased treasury stock worth ¥150 million in second quarter.
• Set new acquisition parameters with upper limits of 1,650,000 shares and ¥150 million.

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2

Consolidated Performance

(Millions of yen)

Fiscal 2023

Fiscal 2024

YOY Change

YOY Change

First Two

First Two

(Amount)

(Percentage)

Quarters

Quarters

Revenues

4,530

6,555

+2,024

+44.7%

Gross profit

2,381

3,868

+1,487

+62.4%

Operating income

645

1,646

+1,000

+154.9%

Ordinary profit

628

1,588

+959

+152.7%

Profit attributable

477

1,117

+640

+134.1%

to owners of the parent

EBITDA

880

1,888

+1,008

+114.5%

EPS (yen）

2.37

5.56

+3.19

－

ROE

14.0%

25.5%

+11.6 pt

－

EBITDA: Operating income + Depreciation costs and amortization of goodwill included in cost of revenue and selling, general and administrative expenses

ROE (annualized): Calculated by multiplying quarterly profit attributable to owners of the parent by two

Revenues

Gross profit

Operating income

Solid increase in revenues, reflecting favorable demand for business succession solution services. All other investment banking business services also generated higher revenues.

Gross profit was up as well, underpinned by increase in revenues from investment banking business services with high gross profit margin.

Despite 28.0% year-on-year increase in selling, general and administrative expenses, mainly due to higher personnel costs and payment fees, the rise in gross profit buoyed operating income, ordinary profit and profit attributable to owners of the parent.

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3

Revisions to Consolidated Performance Forecast (Announced May 10, 2024)

Upwardly revised full-year performance forecast given brisk progress on business succession projects

								(Millions of yen)
			Fiscal 2024				Fiscal 2024	First Two
	Fiscal 2024			YOY Change	YOY Change	First Two	Fiscal 2023
		Revised		Quarters
	Initial Forecast			Amount	Percentage	Quarters	Progress toward	Actual
		Forecast
						Actual	Revised Forecast
Revenues	10,000		11,400		+1,400	+14.0%	6,555	57.5%	9,302
Operating income	1,800		2,200		+400	+22.2%	1,646	74.8%	1,343
Ordinary profit	1,600		2,000		+400	+25.0%	1,588	79.4%	1,277
Profit attributable	1,200		1,400		+200	+16.7%	1,117	79.8%	1,603
to owners of the parent

Performance forecasts and other forward-looking statements are based on certain reasonable assumptions and information currently available to management of the Company. A number of factors could cause actual results to differ greatly from stated expectations.

Copyright© FinTech Global Incorporated

4

Quarterly Changes in Consolidated Performance

(Millions of yen)

			Fiscal 2023				Fiscal 2024		YOY Q2	YOY Q2
							YTD
	Q1	Q2	First Two	Q3	Q4	Full year	Q1	Q2	First Two	¥ change	¥ change
	Quarters	Quarters	% change	% change
Revenues	2,716	1,814	4,530	2,380	2,391	9,302	3,434	3,120	6,555	1,306	2,024
72.0%	44.7%
Gross profit	1,597	783	2,381	1,457	1,272	5,111	2,102	1,765	3,868	981	1,487
125.3%	62.4%
Operating income	720	(74)	645	496	201	1,343	976	670	1,646	744	1,000
(loss)		154.9%
									－
Ordinary profit	699	(71)	628	456	192	1,277	953	634	1,588	705	959
(loss)		152.7%
									－
Profit/(loss)										554	640
attributable to
503	(25)	477	304	821	1,603	589	528	1,117
owners of the		134.1%
									－
parent
EBITDA	836	44	880	612	318	1,811	1,095	793	1,888	749	1,008
1,698.2%	114.5%

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).

Copyright© FinTech Global Incorporated

5

Business Summary by Segment (1)

• Investment banking business marked favorable shift in all services, especially business succession solution services. Segment revenues leaped 61.9%, to ¥5,316 million. Selling, general and administrative expenses grew 29.6%, to ¥1,305 million, but segment income still soared 89.0%, to ¥2,254 million.
• Public management consulting business capitalized on increase in demand for public facilities management support services, posting higher revenues. Was able to reverse out of loss position into black.
• In entertainment service business, progress on shift toward profit structure based on cost reduction underpinned improvement in gross profit.

(Millions of yen)

				Fiscal 2023				Fiscal 2024		YOY Q2	YOY Q2
Reporting Segments				First two						First two	YTD
	Q1	Q2	Q3	Q4	Full year	Q1	Q2	change
		quarters	quarters	change
	Revenue	1,989	1,295	3,284	1,796	1,837	6,919	2,673	2,642	5,316	1,347	2,031
Investment Banking	Gross Profit	1,446	753	2,200	1,340	1,200	4,742	1,857	1,703	3,560	949	1,359
Business
	Segment income	933	259	1,193	755	555	2,504	1,191	1,063	2,254	803	1,061
Public Management	Revenue	90	92	182	65	119	367	119	119	238	27	55
Gross Profit	48	46	95	41	74	211	73	75	148	28	53
Consulting Business
Segment income/(loss)	(7)	(10)	(17)	(24)	7	(34)	5	6	12	16	30
Entertainment Service	Revenue	713	498	1,211	584	515	2,311	713	494	1,208	(3)	(3)
Gross Profit	134	13	148	110	46	305	210	52	262	38	114
Business
Segment income/(loss)	(18)	(140)	(158)	(66)	(139)	(364)	1	(143)	(142)	(3)	16
Adjustment	Revenue	(77)	(71)	(148)	(65)	(81)	(296)	(71)	(136)	(208)	(65)	(59)
（Elimination of	Gross Profit	(32)	(30)	(62)	(35)	(49)	(147)	(37)	(65)	(103)	(34)	(40)
transactions among
segments and corporate	Segment income/(loss)	(187)	(183)	(371)	(168)	(223)	(762)	(222)	(255)	(478)	(71)	(107)
expenses）
Amount Booked on	Revenue	2,716	1,814	4,530	2,380	2,391	9,302	3,434	3,120	6,555	1,306	2,024
Consolidated Statement	Gross Profit	1,597	783	2,381	1,457	1,272	5,111	2,102	1,765	3,868	981	1,487
of Income	Operating income/(loss)	720	(74)	645	496	201	1,343	976	670	1,646	744	1,000
		Eighth
		wave of
Related issues		COVID-19
	RBJ excluded
		from scope of
		consolidation

1. Revenue for each segment includes intersegment revenue and transfers.
2. The ¥(478) million operating income for the first two quarters of fiscal 2024, under adjustment, includes intersegment elimination (¥156 million in the first two quarters of fiscal 2024) as well as corporate expenses (¥(635) 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.	6
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Business Summary by Segment (2)

Revenues

(Millions of yen) 8,000

					6,555
6,000	4,530		1,208
	238
4,000	1,211
	182
					5,316
2,000
3,284
	(148)	(208)
0
	2023/9		2024/9
	Q2 YTD	Q2 YTD

Gross Profit

(Millions of yen)			3,868
4,000
						148	262
3,000
2,381
2,000	95	148
			3,560
1,000	2,200
			(62)	(103)
0
	2023/9			2024/9
	Q2 YTD			Q2 YTD

Operating Income

(Millions of yen)

3,000

12

(Public)

2,000	1,646

1,000
645
(Public)	1,193	2,254
(17)
0
(158)		(142)
(371)	(478)

(1,000)

2023/9	2024/9
Q2 YTD	Q2 YTD

				Up ¥1,487 million, or 62.4%
	Up ¥2,024 million, or 44.7%				Up ¥1,000 million, or 154.9%

Note: Segment breakdown uses non-eliminated values.

Investment	Public Management	Entertainment Service Business	Corporate expenses and
Banking Business	eliminated transactions
Consulting Business

7

Investment Banking Business-Revenues and gross profit by service

Brisk formation of business succession projects and favorable demand for aircraft asset management underpinned 61.9% increase in segment sales and 61.8% increase in gross profit

• Arrangement transaction services: Higher revenues, buoyed by upfront fees on various arrangements as well as management fees and performance fees during term.
• Private equity investment: Brisk progress in exit activity from acquisition fund investments, with some generating fee income on the books. Expect to recognize investment income in third quarter onward. Gross profit decreased due to impairment losses on start-up investment and other investment categories.
• Asset investment: Increase in sale of small-lot products utilizing real estate trust beneficiary rights. Also increase in revenue from aircraft operating lease and sales activities, which began in second quarter. Gross profit lackluster, reflecting accounting losses incurred on Metsä-related asset exchange between Group companies.
• Aircraft asset management: Subsidiary SGI enjoyed wider demand for technical services and aircraft registration services. Aircraft remarketing contracts also up. Subsidiary aviner brokered sales of leased engines owned by investors in Japan to investors overseas. Higher sales and income.

		Revenues					Gross Profit
(Millions of yen)				(Millions of yen)
6,000						4,000
				5,316				3,560
			22						21
			(Other)						(Other)
								1,030
					1,915
4,000
								2,200
3,284								631 (Metsä Village)
25			858	2,000		25		26
			736
1,445	180					70
2,000					521					（Asset investment）
							843
855				(Metsä Village)	1,779
171			1,817		8
			42
217					543
568				(Asset investment)
0						0
	FY2023			FY2024
							FY2023		FY2024
		Q2 YTD			Q2 YTD				Q2 YTD		Q2 YTD
		Up ¥2,031 million, or 61.9%			Up ¥1,359 million, or 61.8%

Other

Aircraft asset management

Private equity investment (Investment targets include business succession products and start-up companies)

Metsä Village (Includes tenant rental income, parking fees, event space usage fees)

Asset investment (Includes real estate sales/rental, aircraft sales/leasing

Arrangement transaction services (Includes arrangements, asset management, real estate brokerage)

Note: Intersegment transactions use

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non-eliminated values.

8

Trends in Balance of Investments and Loans

Balance of investments and loans rose 7.7% from end of first quarter, reflecting new investments into business succession projects

(Factors of change in second quarter of fiscal 2024)

• Principle investment: Steady exit activity but additional increase in new investment opportunities.

Balance at end of second quarter grew ¥447 million over balance at end of first quarter.

Total Investments and Loans (including investments in subsidiaries)

(Millions of yen)
8,620		8,397
7,815
7,713	7,796

Principal investment

(includes business succession projects)

Total of operational investment securities, investments in securities, equity in affiliated companies, and investments in capital to affiliated companies but excluding investments into venture capital funds.

3,131				3,235
	2,840		2,788
	2,720
128				129
845	146	147	124
509
	314	291	365

4,515

4,515

4,554

4,517

4,523

2023.3

2023.6

2023.9

2023.12

2024.3

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Venture capital funds

(Investment into two funds.)

Corporate loans

Total of business loans and short-term loans to subsidiaries. Does not include receivables provided for in allowance for doubtful accounts, but all subsidiary loans are booked.

Real estate (Metsä business)

Real estate for Metsä. Metsä Village real estate booked under real estate for sale in progress and real estate for sale. Moominvalley Park land, while legally transferred to local special purpose company, is included in this amount because on an accounting basis it is booked under FGI's noncurrent assets.

Notes: 1. Total investments and loans comprise amounts for FGI and aviner.

2. Does not include contribution or loans between FGI, aviner

9