Continued investment in growth companies and investment recovery

「Revenue for the cumulative third-quarter consolidated period was ¥12,948 million, up 25.0% year on year, due to the smooth recovery of PE investments in business-succession transactions and increased fund formation and product sales for truck operating leases.」

「Revenue from investments in business succession projects increased year on year as realizations progressed for private equity investments related to a large project originated in the previous fiscal year.」

「Realizations of investments by private equity funds investing in business succession projects progressed smoothly. Revenue from private equity investments increased 84.5% year on year to ¥3,637 million, and gross profit increased 111.0% to ¥3,544 million.」

「During the first half of the fiscal year, revenue was ¥6,797 million, up 3.7% year on year, and gross profit was ¥4,294 million, up 11.0%, as realizations of private equity investments in business succession projects progressed smoothly and visitor numbers at Metsä increased 11.1% year on year to 376,000 as a result of various initiatives.」

「In the Investment Banking Business, contracted services revenue from business succession projects and the origination and management of financial products, as well as investment income from realizations of private equity investments, increased from the previous fiscal year.」

「The Company's consolidated subsidiary Connect Tech Co., Ltd. acquired all shares of Picon Home Service Co., Ltd., a residential remodeling company that was the target company in one of the Company's business succession projects, and made it a consolidated subsidiary effective 29 March 2024 because business synergies with the Company's group were expected.」

「New private equity investments and investment realizations also progressed smoothly as a result. However, investment income from private equity investments declined year on year because some realizations will be recognized as revenue from the second quarter onward.」

「In the Investment Banking Business, deal origination under business succession solutions progressed smoothly, private equity investments were executed, and realizations of originated investment projects also advanced.」

「Deal origination under business succession solutions progressed smoothly, new private equity investments increased, and sales of originated investment projects also advanced.」

「In the private equity business, the Company provided a broad range of investment-focused solutions for multiple business succession projects in major metropolitan areas across Japan. Related investment income and contracted services revenue increased, and new investments by funds invested in by the Company to acquire the target companies also progressed smoothly.」

「In the Investment Banking Business, the private equity business provided a broad range of investment-focused solutions for multiple business succession projects in major metropolitan areas across Japan, recording investment income and contracted services revenue. New investments by funds invested in by the Company to acquire the target companies in business succession projects also progressed smoothly.」

「In the Investment Banking Business, demand for private equity investments continued, deal origination, investment execution and investment realizations progressed smoothly, and realizations of asset investments also advanced.」

「In the Investment Banking Business, demand for private equity investments continued, deal origination, investment execution and investment realizations progressed smoothly, and realizations of asset investments also advanced.」

「During the first half of the fiscal year, the Investment Banking Business promoted deal origination to further accelerate private equity investments addressing business succession and related needs, and the number of deals originated and the investment balance increased steadily.」

「During the first quarter of the fiscal year, the Investment Banking Business promoted deal origination to further accelerate private equity investments addressing business succession and related needs. In the Investment Banking Business, mandates for private equity investment projects and investment realizations progressed smoothly, while fee income also increased due to more mandates for other asset management projects. As a result, revenue was ¥1,058 million, up 30.2% year on year, and segment profit was ¥198 million, up 39.6%.」

「In the current consolidated fiscal year, the company advanced project formation under a policy of strengthening private equity investments to address needs related to business succession and other matters in the investment banking business. Revenue was ¥4,061 million, up 60.8% from the previous consolidated fiscal year, and segment profit was ¥1,303 million, up 1,087.0%.」

「In the investment banking business, the company accepted mandates for multiple services related to business succession and other matters, and private equity investments in these projects reached the exit stage.」

「Against a backdrop of growing needs related to business succession and other matters, the company moved in earnest to expand its private equity investments. In the next fiscal year, it will take this further and allocate management resources to the investment banking business, with investments and arrangements as growth drivers.」

「However, because investment exits were delayed, revenue in the investment banking business was ¥1,901 million, down 27.2% year on year.」

「Revenue in the investment banking business was ¥1,404 million, up 1.7% year on year, due to investment exits from asset and corporate investments while outsourced services and aircraft asset management remained solid. Segment loss was ¥35 million, compared with a loss of ¥404 million in the same period of the previous year, as impairment losses and other charges on corporate investments declined from ¥360 million in the first six months of the previous consolidated fiscal year to ¥12 million.」

「In the investment banking business, revenue increased because of investment exits from asset and corporate investments while outsourced services and aircraft asset management remained solid. Gross profit also increased because the impact of valuation losses on corporate investments in the first quarter of the previous fiscal year no longer remained.」

「In corporate investments, the company recorded a valuation loss on operating investment securities because of impairment losses on investments in venture capital funds. In asset investments, which involve the company's own investments and financing in real estate and other assets, there were investment exits, but some projects did not progress toward exits as planned.」

「In investments and financing, there were investment exits from the sale of real estate acquired through special-purpose companies as part of asset investments. However, an impairment loss of ¥360 million also arose from investments in life sciences and IT companies through funds, delaying progress in the investment banking business.」

「In investments and financing, an impairment loss of ¥360 million arose from investments in life sciences and IT companies through funds. Although asset investments were made through investments in special-purpose companies holding real estate, some projects did not reach an investment exit and are expected to be exited in the second half of the fiscal year, resulting in lower revenue in the investment banking business.」

「On 1 October 2018, the company invested in FGT Venture Fund A Investment Limited Partnership for the purpose of corporate investments. As a result, the partnership was included in the scope of consolidation from the first quarter of the current consolidated fiscal year. The partnership qualifies as a specified subsidiary. It was also renamed Metza No. 2 Investment Limited Partnership.」

「New investments in corporate and asset investments, limited to investments and financing recorded in current assets, increased from ¥800 million in the previous consolidated fiscal year to ¥3.6 billion in the nine months ended 31 December of the current fiscal year, indicating progress in investments and financing to generate revenue. In addition, the acquisition through M&A of aircraft asset management companies, including SGI-Aviation Services B.V., as subsidiaries increased gross profit in the investment banking business by ¥491 million.」

「In its fund investments, the company made new investments in a US venture capital fund and domestic companies, but revenue from investment exits was limited.」

「As a new investment, the company invested in a US venture capital fund.」

「Continued new investments in growth companies, including overseas companies.」

「In corporate investments, the company recorded gross profit of ¥228 million from the transfer of monetary claims and the recognition of fund income in its fund investments. It also made a new investment in 1 highly profitable company. Although it made new investments and recorded foreign-exchange gains on foreign-currency-denominated investments, the balance of operating investment securities fell by ¥139 million from the end of the previous consolidated fiscal year to ¥1,151 million because of investment exits.」

「Although the company made new investments and recorded foreign-exchange gains on foreign-currency-denominated investments, the balance of operating investment securities fell by ¥47 million from the end of the previous consolidated fiscal year to ¥1,243 million because of investment exits.」

「In corporate investments, the company recorded gross profit of ¥240 million from the transfer of monetary claims and the recognition of fund income in its fund investments. It also made a new investment in 1 highly profitable company.」

「Continued investment in growth companies and investment exits.」