3Q FY2020 Financial Results
Ending December 2020

Frontier Management Inc.
(TSE 1st Section: 7038)
November 12, 2020

Table of Contents
Section 1

3Q FY2020 Financial Results...................................... P. 2

Section 2

Our Various Progress................................................ P.10

Section 3

FY2020 Full-Year Earnings Forecast ........................... P.17

Section 4

Company Profile .................................................... P.22

Section 1

3Q FY2020 Financial Results

Summary Continuous growth in Management Consulting business and significant
growth in Business Revitalization Support business.
 Recorded the highest backlog in Financial Advisory business.
 Net income increased significantly due to the elimination of one-time
expenses relating with the head office relocation in previous fiscal year.
 Increase to 223 employees at the end of third quarter compared to thetarget of 200.

(JPY Mil)2019
3Q results

2020
3Q results

YOY change(amount)

YOY change(percentage)

Forecast(Feb. 13, ʻ20)

Progress rate

Net revenue

3,145

3,495

+349

+ 11%

5,300

66%

Operatingincome

133

116

- 18

- 13%

800

15%

Ordinary
income

143

109

- 35

- 24%

800

14%

Net income

36

71

+ 35

+ 97%

557

13%
3

Revenue by division
 Management Consulting revenue increased number of ongoing andlarge-scale projects.
 Business Revitalization Support increased the number of projects. Unit
revenue increased more than double year-on-year.
 Financial Advisory revenue weakened due to a shortfall in cross-border
M&A by COVID-19, and delayed projects into 4 th Quarter.
(JPY Mil)
4,000
3,500
3,000

43
87
341

731

Others
(1.2% of total, YoY 49.0%)
Business Revitalization(20.9% of total, YoY 214.0%)

2,500
2,000

1,512

1,701

Management Consulting(48.7% of total, YoY 112.5%)

1,205

1,021

Financial Advisory(29.2% of total, YoY 84.7%)

3Q 2019

3Q 2020

1,500
1,000
500
0

4

Quarterly revenue trend (1/3) ~ Management Consulting(JPY Mil)

649
574

565

543
480
447

443
361

385 374

400

529

509
470

451 449

504

487

440

373

349
303

325

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2015

2016

2017

2018

2019

2020
5

Quarterly revenue trend (2/3) ~ Business Revitalization Support(JPY Mil)
298

230

226

203
138

126

121

102

100
73
53

64

61

52
30

99 104

98

41

65
49

65

40

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2015

2016

2017

2018

2019

2020
6

Quarterly revenue trend (3/3) ~ Financial Advisory(JPY Mil)

914
859

629

612
554

534

392

371

359 374

403

314

435

416

358

347
299

513

403 315 302

277

254

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2015

2016

2017

2018

2019

2020
7

P/L overview
Personnel and recruitment expenses increased driven by accelerationof recruitment, and outsourcing expenses trends downward.
(JPY Mil)2019
3Q results

2020
3Q results

PercentagechangeNet revenue

3,145

3,495

+11%

Operating expenses

3,012

3,379

+12%

Outsourcing expenses

237

153

-35%

Personnel expenses

2,002

2,367

+18%

Recruitment expenses

104

174

+67%

Other expenses

667

683

+ 2%

Operating income

133

116

-13%

Ordinary income

143

109

-24%

Profit before tax

100

109

+ 9%

Net income

36

71

+97%

Depreciation and amortization

23

28

+23%

EBITDA

124

139

+12%

Reduction ofoutsourcing expenses

JPY -84Mil

Increase in personnel andrecruitment expenses

JPY +435Mil

8

B/S overview(JPY Mil)End of Dec. 2019
Current assets

End of Sep. 2020

YOY change

2,585

2,290

-295

Non-current assets

683

721

+37

Total assets

3,269

3,012

-257

Current liabilities

1,001

833

-169

Non-current liabilities

82

82

+0

Shareholders' equity

2,173

2,084

-89

12

12

+0

3,269

3,012

-257

1,733

1,581

-152

-

-

-

-1,733-1,581+152

Other net assets
Total liabilities andnet assets
Cash and deposits
Interest-bearing debt
Net Debt

9Section 2

Our Various ProgressRecruitment
Continue to recruit the talents in preparation for the future largescale projects and the increase in revitalization projects.
Number of employee

Achieved target for current FY
240Consultant/Advisory
Corporate

200(number of employees)

153

159

172
153

122

129

144

31

30

28

2014

2015

2016

(Fiscal Year)

165

193

203

177

190

170

163

172

30

31

33

2022

Mar./'20

Jun./'20

Sep./'20

Dec./'20

plan

resultresultresultforecast

133

148

29

32

29

30

2017

2018

2019

2020

124

223

225~
230

plan

・・・

11

Personnel backgroundNew hired with diverse backgrounds. Assigned to business divisions
where required by the market.
Recruited from Jan. to Sep. 2020
BackgroundTrading
firms

Accountants

firms

/ Tax
attorneys
21%

12%
Other financial
institutions

Regeneration

Senior Director

Support/ Director

16%

18%

Financial

Industry

Advisory

analysisbankings

31%

4%

8%

Consultants /Investment
7%

Business

PositionManaging Director

OthersBusiness 12%

17%

Assigned Departments

19%

Consulting
57%

Associate Director/ Associate
78%

12

Listed on the First Section of the Tokyo Stock Exchange
Frontier Management Inc. was transferred from theMothers section to the First Section of the Tokyo Stock
Exchange on Sep. 7, 2020.

13

IR activities
Increased IR activities for both domestic and overseas investors.
Doubled in 1-3Q comparing previous fiscal year.
Number of individual IR meetings with institutional investors
47 times(Times)(38 domestic, 9 overseas)25

For overseas investors

20

For domestic investors

22 times

15(domestic 21 overseas 1)
10

15 reserves
in 4Q

5
0
1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q
(resereve)

2019

2020
14

Webinars
Launched webinars from Sep. 2020 to expand new contacts withcustomers and provide them tips for the resolution of challenges
from various perspectives. 1,142 cumulative viewers (as of Nov. 9,2020).
By industry

By solution

By region

Retail, wholesale,
Restaurants, Services,
Consumer-products,
Industrial-materials,
Infrastructure,
Finance,IT, Medical, etc.

M&A Advisory
Management Consulting
Business Revitalization Support
Management Executive
SupportJapan,
Chinese, Asian,North America,
Europe, etc.

15

Owned media "Frontier Eyes Online“
Started our owned media to raise our brand presence from Feb.
95,000 PVs reached in Oct., compared to the target of 100,000 PVs
in Dec. 2020.

Monthly PV trend“Frontier Eyes Online”(PV)
100,000
80,00060,00040,00020,000https://frontier-eyes.online/

0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug Sep

Oct
16

Section 3

FY2020 Full-Year Earnings Forecast

FY2020 Full-year earnings forecast
Management Consulting and Business Revitalization Support
 Strong upward trend is expected to continue in/after 4 th Quarter.

Financial Advisory

 Revenue temporarily weakened due to COVID-19, but the backlog in 2 nd and 3 rdQuarters reached the highest record.
 Inquiries for carve-out and revitalization-related M&A projects.

SG&A Continues the hiring activities in 4 th Quarter. Expected to be in the range of 225
to 230 employees at the end of this fiscal year.

Full-year Forecast

 Forecasts for net revenue JPY5,300 million and operating income JPY800 million
remain unchanged.
 Planning a medium-term strategy to be disclosed in Feb. 2021.

18

Weekly order trend

Trend exceeding the previous fiscal year due to the increase inlong-term and large-scale projects.

FY2019FY2020FY2018FY2017(JPY Mil)
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Fixed
Fixed
49th Week
49th
week
45th Week
45th
week
41st Week
41st
week
37th Week
37th
week
33rd Week
33rd
week
29th Week
29th
week
25th Week
25th
week
21st Week
21st
week
17th Week
Week
17
13th Week
13thweek
9th Week
9thweek
5th WeekThefifth weekFirst
1st Weekweek

19

Financial Advisory revenue and backlog
Revenue to 3 rd Quarter were sluggish due to COVID-19. Orders
recovering and recorded the highest backlog level. Expected torealize in the 4 th Quarter revenue.
Recorded
Backlog(JPY Mil)
2,500

Backlog (left)(JPY Mil)
1,000

Revenue (right)
2,000

800

1,500

600

1,000

400

500

200

0

0
2018
1Q

2019
2Q

3Q

4Q

1Q

2020
2Q

3Q

4Q

1Q

2Q

3Q

4Q
20

Stock splits
2-for-1 stock split on Jan. 1, 2021 (Record date: December 31, 2020).
Expect to increase the liquidity.

21Section 4

Company Profile

Background of establishment
Representative Director

Representative Director

Shoichiro Onishi

Masahiro Matsuoka• After registering as an attorney, joined thelaw firm of Okuno & Partners Law Office
and appointed as a partner in 1997.
• Engaged in the corporate reorganization
proceedings of Japan Lease, Life Co., Ltd.,and The Taisei Fire & Marine Insurance Co.,
Ltd. as an acting trustee or other capacity.

• After working at Nomura Research Institute,Ltd. and Barclays Bank PLC, joined UBS
Securities Japan Ltd, and was subsequently
appointed concurrently as Head of Equity
Research and Managing Director in 1999.
• Activities as a securities analyst with a focus
on the retail industry more than 10 years.

Established Industrial Revitalization Corporation Japan in 2003
JoinedEngaged in Mitsui Mining Co.ʼs business turnaroundproject as an auditor and Kanebo, Ltd. and The Daiei,
Inc.ʼs turnaround project as a director.

JoinedEngaged in the turnaround projects of Kanebo,
Ltd. and The Daiei, Inc. as a director.

Jointly established the company in 2007

23

Aim
Contribute to enhancing corporate value and building a sustainable society bygathering wisdom from around the world and solving complex corporate
issues as a group of experts with diverse backgrounds
Other Lawyer
2%
2%

Trading firms
5%

Business firms
10%

Accountants /Tax attorneys
17%

Other financial
institutions
15%
Consultants /Investment

Industry analysisbankings

39%

10%

Breakdown of employee backgrounds
As of Sep. 30, 202024

Business
Providing a wide range of services in response to corporate issues at all stages• M&A deal advisory• Business analysis and strategy
formulation• Business due diligence• Medium-Term Management Plan,
Management, Finance, andBusiness Strategy• Post M&A consulting

Management
Consulting• Business succession consulting

M&A
Advisory• PMO management support• Executive support including
CXO dispatch• Support for collaboration
with equity holders• Management reform under
turnaround situations• Support for business andfinancial restructuring

Management
Executive Support

Business
Revitalization• Negotiation and coordination
with stakeholders

25

Customers
Providing services to companies in diverse industries

IT
2%

OthersRetail and11%wholesaleFinance16%8%Infrastructure
7%

Restaurants andservices

Industrial goods

21%

manufacturers
20%

Consumer-products
producers15%
FY2019 results

26

History
FY2007

Establishment

FY2011

Established a Chinese subsidiary (Frontier Management (Shanghai) Inc.)

FY2012Opened a branch in Singapore to strengthen cross-border M&A

FY2014Opened the Nagano and Osaka Branches to realize
community-based management support services

FY2017FY2018FY2019FY2020

New York Branch opened to strengthen cross-border M&A
Launched fund business to provide funding support services to customers
Listed on TSE Mothers section
Investment made in the first project of the fund
Opened the Nagoya Branch to expand the service territory
Relocated to current location (Roppongi, Minato-ku, Tokyo)

Changed to TSE First Section
27Organizational chart

28

Management philosophy
Contributions to the benefit of clients
We work for the benefit of our clients by enhancing corporate value.

Contributions to the benefit of stakeholders
By offering well balanced solutions, we work for the benefit of businessowners and managers, employees, business partners, customers,
creditors, and other stakeholders.

Contributions to society
We contribute to society by raising the value (goods & services)
provided by our client companies.

29

Shareholder return policy
Continue stable shareholder returns.
・ Dividend payout ratio:・ Shareholder incentives:30%
JPY1,000 QUO card twice a year30Company overview
Company Overview

Business

Company Name Frontier Management Inc.

1. Management Consulting

Established

January 4, 2007

ListedFirst Section of the Tokyo Stock Exchange(Code Number : 7038)

Location

Sumitomo Fudosan Roppongi Grand Tower 41F
3-2-1 Roppongi, Minato-ku, Tokyo

TEL/FAX<TEL>+81-3-6862-5180 (general) <FAX>+81-36862-8611

Websitehttps://www.frontier-mgmt.com

Major
shareholder

Shoichiro Onishi
Masahiro Matsuoka

Officers, etc

Co-president
Co-president

Shoichiro Onishi
Masahiro Matsuoka

Director of the Board
Outside Director of the Board

Yoshiaki Takahashi
Kazuhito Osugi

Statutory Auditor
Auditor
AuditorTakeshi Umemoto
Kazuhiko Shimokobe
Nobumichi Hattori

Senior Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Director
Managing Director
Managing Director
Managing Director
Managing Director
Managing Director
223(consolidated)Toshi Mitsuzawa
Sumio Nishizawa
Akinori Nishida
Masaya Yajima
Shinji Hikoe
Hitoshi Kuriyama
Tomohiro Murata
Takashi Abe
Junko Koshino
as of end of
September, 2020

No. ofemployees
BranchOsaka Branch Nagoya Branch Nagano Branch
Singapore Branch New York BranchGroup
Companies

Frontier Management (Shanghai) Inc. (Wholly owned)

AssociatedCompanies

FCD Partners Inc.

2. M&A Advisory
3. Management Executive Support
4. Business Revitalization Support

Makeup of professionals
 The Company has experts in fields associated with business management:
business, finance, accounting, tax practice, and law. (1) attorneys at law,accountants, and tax attorneys, (2) consultants and industry analysts, and (3)persons involved in investment banking and business management, andothers.
 We form the best team of experts in accordance with each companyʼsbusiness challenges and propose solutions from a comprehensive perspective.
Other
Trading firms

Lawyer2%
Legal Counsel
2%

5%

1%

Business firms
10%

Other financial
institutions
15%
Investmentbankings
10%

Accountants
Accountants /and tax
Tax attorneys
accountants
17%
11%
Consultant
Industry
analystConsultants/
32%
Industry analysis
39%

As of end of September
2020

31

Disclaimer
 Forward-looking statements such as earnings forecasts and other projections contained inthis release are based on information available at this time and assumptions thatmanagement believes to me reasonable, and do not constitute guarantees of future
performance. Actual results may differ materially from those expectations due to various
factors.

32