ＦＰＧ（7148） – FPG Consolidated Financial Results First Quarter of the Fiscal Year Ending September 30, 2022

FPG Consolidated Financial ResultsFirst Quarter of the Fiscal Year Ending September 30, 2022(October 1, 2021 – December 31, 2021)Financial Products Group Co., Ltd.（First Section of TSE, Code: 7148）HighlightsResult for The 1stQuarterSignificant year-on-year increase in sales and profit.✓ In the Leasing Fund Business, sales and profit significantly increased due to enhanced profitability.✓ In the Real Estate Fund Business, sales and profit significantly increased due to continued strong sales.OutlookUpward revision to the earnings forecast and dividend forecast.✓ The forecast for the 1st half of the fiscal year ending September 30, 2022, has been revised upward due to the remarkable recovery from the effects of COVID-19 in the Leasing Fund Business and the continued expansion of the Real Estate Fund Business. The full year forecast has also been revised upward.✓ Upward revision to dividend forecast for FY2022, from 22.0 yen per share to 32.0 yen per shareReceived a mandate for the largest project ever related “Transition Finance” ✓ We have received the mandate for a large-scale project (18 container ships) with a total value of approximately JPY 250 billion, which is the most significant mandate we have ever received. This project is part of our “Transition Finance” program, which aids the transition to a decarbonized society in the Leasing Fund Business. We are planning arrangement and sale sequentially from summer 2022.TopicsDecided the affiliation of the new market segment✓ As of April 4, 2022, FPG will belong to the “Prime Market,” which is a new market segment.© 2022 Financial Products Group Co., Ltd.1Highlight of 1st quarter of FY2022Net sales1.5x✓ The Leasing Fund Business and the Real Estate Fund Business were driving the growth.10.64（JPY billion）Operating income15.673.5x✓ Significant increase due to higher sales and improved gross profit margin（JPY billion）3.400.98FY2021※FY2022FY2021FY2022※ Due to the application of the “Accounting Standard for Revenue Recognition,” the Real Estate Fund Business sales have been reclassified using the gross amount method for comparison purposes.Ordinary income5.1x✓ Substantial increase due to increase in operating income and absence of temporary factors (net cost of JPY 0.5 billion due to bankruptcy of Air Mauritius recorded in non-operating income and expenses) in the previous fiscal year.© 2022 Financial Products Group Co., Ltd.（JPY billion）Profit※ （JPY billion）3.559.2x✓ Substantial increase due to increase in ordinary income and absence of temporary factors (JPY 0.24 billion recorded as an extraordinary loss) in the previous fiscal year.0.692.51 0.27FY2021FY2022FY2021FY2022※Profit attributable to owners of parent21Q financial results and 1H/full-year forecasts for FY2022◼ Revised the 1H forecast upward due to the remarkable recovery from the effects of COVID-19 in the Leasing Fund Business and the continued expansion of the Real Estate Fund Business. The full year forecast has also been revised upward.◼ Revised the dividend forecast for FY2022 upward from 22.0 yen per share to 32.0 yen per share.※※ For the purpose of comparison with the current fiscal year, net sales of the Real Estate Fund Business have been reclassified using the gross amount method.© 2022 Financial Products Group Co., Ltd.3Previous YearResultsChangeInitialForecastRevisedForecastChangeInitialForecastRevisedForecastChangeNet sales10.6415.67+47.3%24.2227.00+11.5%41.0044.00+7.3%Leasing Fund Businesss2.914.00+37.4%3.605.50+52.8%9.4111.35+20.6%Real Estate Fund Business7.4811.37+52.1%19.9820.85+4.4%30.3031.35+3.5%Other Business0.240.29+17.0%0.640.65+0.8%1.291.30+0.8%Operating income0.983.40+245.9%2.074.40+112.6%5.407.80+44.4%Ordinary income0.693.55+412.5%2.124.50+112.3%5.608.00+42.9%Profit attributable toowners of parent0.272.51+823.7%1.403.10+121.4%3.705.40+45.9%Operating income marginon sales9.2%21.7%+12.5%8.5%16.3%+7.8%13.2%17.7%+4.6%Profit margin on sales*2.6%16.1%+13.5%5.8%11.5%+5.7%9.0%12.3%+3.2%Dividend per share (yen)–‐–‐22.032.0+10.0yenJPY billionFY2022 Full yearFY2022 1QFY2022 1st HalfLeasing Fund Business (1) Sales◼ Reached JPY 17.0 billion in equity placements sales and progressing as expected with adequate inventory.Trends in sales amount（JPY billion）4Q3Q2Q1Q143.631.735.745.830.2156.747.138.549.821.1Full year forecast80.094.826.611.532.923.794.59.130.427.926.9FY2018FY2019FY2020FY2021© 2022 Financial Products Group Co., Ltd.17.0FY20224Leasing Fund Business (2) Arrangement◼ Reached JPY 50.2 billion for the total amount of assets arranged in the 1st quarter, and made a well start with regard to ◼ As a result of our policy of aggressive arrangement of ships and marine containers, marine containers progressed in thethe annual budget of JPY 200 billion.1st quarter.◼ Received the mandate for a large-scale project with a total value of approximately JPY 250 billion, which is the most significant mandate we have ever received. This project is part of our “Transition Finance” program, which aids the transition to a decarbonized society. We are planning arrangement and sale sequentially from summer 2022.Trends in arrangement amount（JPY billion）AircraftShipsMarine containers428.1261.791.774.5FY2018538.1284.9180.872.3FY2019Received the mandate for a large-scale project with total value of approx. JPY 250 bin.Plan to be arrangement and sale sequentially from the summer of 2022Full year forecast200.0￥50.216.134.1FY2022(1Q)158.4158.794.035.728.757.357.543.7© 2022 Financial Products Group Co., Ltd.FY2020FY20215Leasing Fund Business (3) Inventory◼ Increased inventory compared to the end of the previous year, due to the favorable arrangement of projects in the 1st quarter.Trends in inventory amount（JPY billion）AircraftShipsMarine containers54.327.724.81.7FY201894.569.020.74.7FY201973.657.09.27.3FY202039.425.64.79.0FY202147.726.421.3FY2022(1Q)© 2022 Financial Products Group Co., Ltd.6Leasing Fund Business (4) Transition FinanceInitiatives in the airline and shipping industries toward realizing a decarbonized society.International Air Transport Association（IATA）International Maritime Organization（IMO）◼ Adopted the following target in October 2021.✓ Reduce emissions of greenhouse gases to effectively zero by 2050.◼ Adopted the following targets in April 2018.✓ Emissions of CO2 from international shipping:1. Reduce CO2 emissions by 40% by 2030*2. Reduce CO2 emissions by 70% by 2050*3. Zero CO2 emissions as early as possible in this century* Per unit transported, compared to 2008In the future, the airline and shipping industries will accelerate the replacement of aircraft and ships with the latest fuel-efficient models.Demand is increasing for “Transition Finance,” which provides funding for efforts to transition to a decarbonized society.We are contributing to the transition of the airline and shipping industries to decarbonization through the Leasing Fund Business.Received the mandate for a leasing fund project (total value: approximately JPY 250 billion) for 18 new container ships with state-of-the-art energy-saving technologies.7© 2022 Financial Products Group Co., Ltd.Real Estate Fund Business (1) Sales◼ The 1st quarter results are up more than 50% year-on-year due to the expansion of sales channels and increased product recognition.Trends in sales amount*1 （JPY billion）20.815.0*28.05.3FY2018FY2019FY2020FY2021*1 Total for real estate fractional ownership investment products and development projects.Sales amount of real estate fractional ownership investment products = [10 million yen/trust beneficially right] × [number of units]*2 Including the development projects© 2022 Financial Products Group Co., Ltd.8Full year forecast 31.0￥11.3FY2022(1Q)Real Estate Fund Business（2）Arrangement◼ Arrange aggressively, including the acquisition of large-scale properties from the 2nd quarter, in light of the favorable sales environment.Trends in arrangement amount*（JPY billion）34.813.03.14.0FY2018FY2019FY2020FY2021*Total for the real estate fractional ownership investment products and development project.© 2022 Financial Products Group Co., Ltd.Acquired commercial real estate in Nakasu, Hakata-ku, Fukuoka in the 2nd quarterFY2022(1Q)9Real Estate Fund Business（3）Inventory◼ Almost sold out, except for development projects and properties with rising value.Trends in inventory amount（JPY billion）19.2Acquired commercial real estate in Nakasu, Hakata-ku, Fukuoka in the 2nd quarter7.23.32.2FY2018FY2019FY2020FY20219.4FY2022(1Q)© 2022 Financial Products Group Co., Ltd.10Appendix© 2022 Financial Products Group Co., Ltd.11Consolidated Income Statement Summary① Cost of salesIncludes the real estate acquisition cost, arrangement cost for Leasing Fund Business and commission paid for customer refers. In FY2021, include the valuation loss related to the bankruptcy of Air Mauritius.② Non-operating incomeIncludes interest that we collect from investors when we sell equity to them and gain on investments in money held in trust in the Leasing FundBusiness.③ Non-operating expensesIncludes interest paid on commission fees and interest expenses related to fund-procurement.In FY2021, include the cost of JPY 0.54 billion due to the bankruptcy of Air Mauritius※ For the purpose of comparison with the current fiscal year, net sales of the Real Estate Fund Business have been reclassified using the gross amount method.© 2022 Financial Products Group Co., Ltd.12JPY billionFY2021(1Q)*FY2022(1Q)ChangeNet sales10.6415.67+47.3%　① Cost of sales7.9710.59+32.9%Gross profit2.675.07+90.0%SG&A Cost1.681.67▲0.9%Operating income0.983.40+245.9%　② Non-operating income0.660.41▲36.8%　③ Non-operating expenses0.950.26▲72.1%Ordinary income0.693.55+412.5%Income before incme taxes0.443.55+696.6%Total income taxes0.191.01+413.5%Profit attributable toowners of parent0.272.51+823.7%Consolidated Balance Sheet Summary（JPY billion）① Equity underwrittenTemporary advances in Leasing Fund Business prior to selling to equity investors② Money held in trustTemporary stock of trust beneficiary right of operating lease for aircraft using a trust function③ Real estate for arrangement Stock of the real estate fractional ownership investment products④ Advances received/Contract liabilityIncluding advances of commission fees related to Leasing Fund Business.Recorded as advances received until the fiscal year ended September 30, 2021, butwith the application of the Accounting Standard for Revenue Recognition, will be recorded as a contract liability from the fiscalyear ending September 30, 2022.© 2022 Financial Products Group Co., Ltd.13AssetFY2021FY2022(1Q)ChangeCurrent assets85.7880.75▲5.03Cash and deposit20.8118.32▲2.49① Equity underwritten20.8629.46+8.60② Money held in trust18.5318.31▲0.22③ Real estate for arrangement19.229.41▲9.81Non-current assets6.115.91▲0.20Total assets91.8986.67▲5.22Liabilites and Net asstesFY2021FY2022(1Q)ChangeCurrent liabilities47.2743.55▲3.72Short-term debt38.7635.05▲3.71④ Advances received4.72-▲4.72④ Contract liability-4.63+4.63Non-current liabilities15.2212.75▲2.47Long-term debt14.7312.26▲2.47Total liabilities62.5056.31▲6.19Total net assets29.3930.35+0.96Total liabilities and net assets91.8986.67▲5.22Shareholder Return◼ Basic policy: Continue to pay stable dividends while securing the internal reserves necessary formaintaining growth and increasing corporate value◼ Dividend payout ratio：Aim for a consolidated dividend payout ratio of 50%Dividend forecast for the FY2022 (Initial Forecast): 22.00 yen per share (Payout ratio 50.8%)Dividend forecast for the FY2022 (Revised Forecast) : 32.00 yen per share (Payout ratio 50.6%)Dividend per share and consolidated dividend payout ratioDividend Payout Ratio(%)88.6Dividend per share (yen)100.00ー Consolidated dividend payout ratio (%) *42.243.049.446.953.650.645.8049.2553.0035.136.036.335.5024.505.458.679070503010-10-3032.0018.5011.50FY2022(forecast)14FY2013FY2014FY2015FY2016FY2017FY2018FY2019FY2020FY2021* Consolidated account commenced in FY2013© 2022 Financial Products Group Co., Ltd.Dividendper share(yen)120.0080.0060.0040.0020.000.00External Evaluation*＜JPX-Nikkei 400＞The JPX-Nikkei 400 is an index of approximately 3,700 companies listed on the Tokyo Stock Exchange that meet various criteria required by global investment standards, such as efficient use of capital and investor-oriented management. FPG has been selected for five consecutive years since 2016.＜S&P/JPX Carbon Efficient Index＞An index that uses TOPIX, a representative stock price index in the Japanese market, as its universe and determines the weight of its constituent stocks by focusing on the disclosure status of environmental information and the level of carbon efficiency.* As of Dec. 2021© 2022 Financial Products Group Co., Ltd.15Business categories and Net sales◼ Business categories and Net sales by businessFPG’s business is divided into the following 3 categories in this document1. Leasing Fund BusinessThe Leasing Fund Business provides arrangement and management services for operating leases for aircraft, ships and marine containers. It also sells equity interests in the silent partnership “Tokumei Kumiai,” general partnership “Nin-i Kumiai” and trust beneficiary rights for operating leases to investors. Net sales include arrangement fees for arrangement in the operating lease business, sales commissions received on the sale of silent partnership interests to investors, etc. Sales of partnership interests and trust beneficiary rights to investors are not recorded as net sales.Lease Asset“Amount of arrangement”DebtEquity2. Real Estate Fund BusinessSale to investors=Amount of sales= Recorded as Net salesFeeThe Real Estate Fund Business arranges and sells to investors real estate fractional ownership investments, using the trust function of FPG Trust. The total amount of sales to investors, etc. is recorded as net sales.Real Estate“Amount of arrangement”Trust Beneficiary Right Sale to investors=Amount of salesNet sales3. Other Business© 2022 Financial Products Group Co., Ltd.Other Business includes the FinTech Business, Insurance Sales Business, M&A Business, Private Equity Business and Aviation Business.Net sales include fees for commissioned work related to system development and network infrastructure construction in the FinTech Business. And it include commission income in the Insurance Sales Business and M&A Business, proceeds from the sale of private equity funds in the Private Equity Business, and sale of services such as transport in the Aviation Business.16DisclaimerProjected results described in these presentation slides are based on the information available to the Company at the time of preparing, as well as certain assumptions judged by the Company to be reasonable, and, therefore, actual results could be different from these projections because of various risks and uncertain factors.Financial Products Group Co., Ltd.Inquiry：Corporate Planning DepartmentTEL: +81-3-5288-5691E-mail: ir@fpg.jp URL: https://www.fpg.jp/en/info.html© 2022 Financial Products Group Co., Ltd.