Nihon M&A Center Holdings Inc.

Thank you very much for joining us today. We would like to begin the financial results presentation for the first quarter of the fiscal year ending March 2027. Today, we are broadcasting this presentation with simultaneous interpretation to audience of the entire world. I believe that there are some people who are listening to this presentation early in the morning or at midnight. Thank you very much for joining this session despite time difference. Please present our resume for the session. Nihon M&A Center Holdings has a purpose. It's to bring best-in-class M&A ever closer. We have been running our business with this purpose. Many investors, I believe, are already Thank you for joining us. We implemented improvement measures and we have recovered. And in the fiscal year that ended in March 2026, we had our record sales and ordinary profit. We achieved record high in both of them. A full-fledged recovery was made, we believe. And finally, starting from the current fiscal year, We are founding our company once again, and we are starting Vision 300 next to Genesis. And the first quarter that we are announcing our result today is the very first quarter under this new Vision 300. That's why the first quarter has been a very important quarter for us. So we are announcing and explaining the results of that very important first quarter for us. Starting with the overall summary, I believe that the results this time was very satisfactory for us. Three reasons for that. The first reason, we had very solid growth in sales and profit. And the second reason is the other pillar, which is the fund business. We recorded enough and solid gains from the fund business. And the third one is the most important one. This is related to leading indicators. Leading indicators that shows the prospect for Q2 to Q4. We had very strong leading indicators. These are the three factors that have led to the satisfactory results in Q1. Starting with sales. 9.1 billion, up 0.9% year-on-year. And 180 H transactions were closed. This count was down by 11.3%, but ordinary profit was 2.252 billion yen, down by 11.1% year-on-year, and free tax profit was 3,156,000,000, up by 24.6% year-on-year. However, We sold an investment target from ATG Capital, which is our fund business, and that was $780 million, almost $800 million. And this gain on sale of investment was recorded as extraordinary gain. And we had to handle this as extraordinary gain due to accounting principles. But as a business, this is almost equal to recording sales, additional sales. If we could have recorded this as part of our total sales, then the actual sales, $9.1 billion, would have been $9.891 billion, up by 9.7%. And the ordinary profit was $3,390 billion, up by 20%, and free tax profit would have been and many more. and our intermediate holding company. And there's a contribution from this fund sector, more specifically from J Capital. This has been the, or the ATG Capital that makes investment mainly in overseas projects and that generated a profit of about 800 million yen. And I believe that the fund business made quite a big contribution this time that captures people's attention. And the third factor, once again, is leading indicators that were solid this time, starting with new sell-side mandates. That was 347, up by 20.1% compared to the same time last year. This, as the first quarter, was the best in our history, and of which mid-cap mandates were 76. The 76 mid-cap mandates acquired was up by 31% year-on-year. So, keeping M&A sales per deal, I believe, is quite possible at a solid level. And also, we have transactions under negotiation, and that stock is at a record high level. As of the end of June, such stock for the negotiations or the transactions under negotiation was 17% up compared to the same month last year. 17% increase. And in the first quarter, we had entering fee received, and entering fee received in Q1 was 17% higher compared to the same time last year. So transactions under negotiations are the transactions that are experienced in negotiations that are in pipeline. These are the transactions that are going to be closed and will be impacting our sales and profit. And so we will have the second quarter up to September and the third quarter up to December. We believe that this solid number of transactions under negotiations are going to lead to solid results in Q2 and Q3. And new sales side mandates that I've mentioned at the beginning of this session So for the third quarter results to December and the fourth quarter results to March, I believe that these two quarters are going to benefit significantly from the new sales side mandates. And we have had really good leading indicators. And that's the summary. In the previous fiscal year, we had the record high sales and profit. So In March, we have kind of felt that we have done all the best we could because we had best-in-class sales and profit. But I believe that putting ourselves in a good business cycle in the previous fiscal year didn't drag us in the first quarter this time. We believe that we made good preparation for achieving our target this fiscal year because we have enough pipelines and enough mandates. So we're going to use them fully so we can leave good results in the second and the third quarter, and we're going to reach a peak in progress acceleration. And this is how we plan to get us back to the customary cycle of performance achievement. Now, we'll move on to balance sheet and income statement. And I will hand over to Mr. Naraki for the explanation. Hello, this is Naraki. I'm going to first touch on income statement, more specifically sales. As was mentioned by Mr. Miyake, we have all the figures listed on this page. And as you can see, increasing M&A sales per transaction and decreasing number of transactions closed are the two major points. But in the second row, you can see the number of transactions closed, and I have to talk about this. There was a postponement of the closure timing. Therefore, the number of transactions under negotiation at the end of June was at record high level. And according to our internal document, Transactions under negotiations that are big to a certain extent grew by 17% compared to the same time last year. And in the first quarter, we received interim fee and that was $1,358,000,000 compared to $112,000,000 recorded last year There was an increase of 17%, so we have that many active mandates this time. And you can find the same detail in our attention report. Next page, please. Now, on to expense and profit. Starting with personnel cost. So, personnel cost has Part of cost of sales, this is the personnel fee for M&A consultants and front office staff, that was 2.2 billion, up by 6.5% year-on-year. And in the second box, there is a different type of personnel cost. This includes support people, that includes sales staff, and that was down by 3% at 1 billion, 51 million yen. and as you can see at the top about referral fees and outsourcing expenses, compared to the same time last year, this was down by 16.1%. So ratio of direct mandates out of total transactions closed increased. Therefore, referral fee ratio out of sales went down by 2.2 points. Thank you for your attention. You may feel that this is quite a big increase year on year. However, compared to the budget, these are actually on pace with our budget. And also you can see ordinary profit of 2,252,000,000 yen. As we explained, we have the ATG capital related contribution of 787,000,000 yen. Thank you very much. from the company that we fully own. So we have to treat this as extraordinary gain. And about P&L summary, this is going to be a repetition of what I've explained already, so I'm going to skip this page. And finally, on balance sheet, we've been keeping healthy balance sheet. In the top row, we have asset data as of the end of the first quarter. Thank you for the explanation. Now, we will move on to the topic about which we receive a lot of Questions from investors. And this is about leading indicators. These are important to understand or estimate our future results. And as we've explained before, along the flow of our deal process, we're going to take you through our leading indicators, starting with the number of new sell-side mandates. That was 347, up by 20.1%, and of which mid-cap mandates were 76%. Up by 31% year-on-year. And new buy-side mandates. The count was 351, up by 4.8%. And of sell-side mandates, there were mandates in central areas More urban areas. And the central area ratio was 61%. I believe this is a favorable trend for us. And even after we acquire mandates, if we cannot do enough pre-due diligence for those mandates, we cannot do good matching. So our company could focus on solid pre-due diligence in what we call a preparatory phase. So we have to do preparation before matching. and the process of preparation used to take 90 days previously, but we shortened that to, or we have been trying to shorten that to 60 days. This has been a major project for us. And as a result, our preparatory phase is less than 60 days at 56 days. Lead time is now shorter, which means that we can handle more transactions, more mandates now. So the number of transactions closed and other financial performance will improve with the shortened lead time. The next point is on the number of transactions closed and the number of mandates acquired. At the bottom, we have the number of new suicide mandates. Please pay attention to this number. In the first quarter, from March 2024, and then 289. And this time, this first quarter, we acquired 347 new sales side mandates. So this 347 was the record high as the first quarter results. For the second, third, and the fourth quarter, I believe that we made good preparation. And there's another important leading indicator, which is the number of employees. M&A consultants. We had 626 consultants at the end of the previous fiscal year and the most recent number is 635. There was an increase and also there are people who already joined our company after the number of people who accepted our offer and those people are 55 in count and going forward we're going to accelerate our recruiting efforts and Please pay attention to corporate staff. From 201 to 236, there was an increase in corporate staff. In the past few years, we reduced corporate staff and we had a project of improving direct and indirect divisions. Despite such project, we had an increase in corporate staff count. And I have to explain this. This is because we used to do operation management that was done by M&A support department previously, and this team is now escalated to an operation management department, and this is now included in the corporate segment. And we have more than 20 people that do the work, so that led to the meaningful increase in corporate staff. and to explain what this work is about. For the past few years, we started to take more responsibility about our results to what we do, outcome of generating best-in-class M&A that has been the focus of our management, focus of our target of accountability. It's because Lucien, MJG and other similar inappropriate Thank you very much. is to do enough examination at the time of accepting mandates. And after that, there is negotiation process. And in that negotiation process, we decided to do more confirmation of whether we have done enough due diligence and whether we have taken enough processes and enough steps. We also started to examine more about the scheme, etc., and we also have been checking more thoroughly about whether seller owner's guarantee is released, etc. These work are done by the people of the operation management and these people are going to be part of the headquarter going forward.

Next, let us move into our mid-term management plan. This fiscal year's first half and second half When you look at the sales balance, it's 45% against 55%. First half, we want to overachieve this in terms of performance. Fortunately, pipeline, we have many deals that are currently in discussion, so we will continue to properly manage our business. Last fiscal year, The Midterm Management Plan of the Fiscal Year 27. You're able to achieve $19 billion ordinary profit against the original target of $17 billion in Fiscal Year 25. With that momentum, in Fiscal Year 2026, we aim to deliver upside results in a very solid manner. And NextGenesis Vision 300 To achieve ordinary profits of 30 billion in fiscal year 2032. In order to achieve that, we will continue to accelerate our efforts. Now, what exactly is NextGenesis? I would like to explain this. Our company, from this fiscal year, we have started our second founding. Our second founding is means two things. One, it is about succession, passing on things to the next generation. But the larger meaning and significance, our company has reached a 35th anniversary in this year, we are celebrating our 35th anniversary. Compared against 35 years ago, or even compared against five years ago, ten years ago, the world has greatly changed. M&A has transformed from a B2B job. It's now transferring into a B2C type job. M&A is not being that special. And we are now moving into an age of A.I. We are trying to properly handle this and create a new business model. This is Vision 300, NextGenesis, and our second founding. Now, in order to achieve this, the entire company needs to unite together, and in order to do that, we have started a trust-type stock compensation plan. Shareholders, investors, and management and employees. We all get on the same ship. We all make efforts towards the same purpose. That is what we want to achieve. And as a symbol of that, we will also relocate our head office. We are planning to relocate our head office. This current head office is split up across four different floors. It is difficult To have real physical communication with each other. We are now planning to relocate to a building where a single floor is very wide.

And the consultant team, the sales team, will be consolidated into one single floor.