Second Quarter of the Fiscal Year Ending June 30, 2022 (FY2022)

Results of Operations
Explanatory Material

February 14, 2022
HOPE, INC.
[6195]

Group Corporate Philosophy

Providing new value to citizens
through local governments,

and promoting growth of the company
and its people

Copyright (C) 2022 HOPE, INC.

02

Company Overview
Company name

HOPE, INC.

EstablishedFeb. 2005 (fiscal year-end: Jun.)

Representative

Takayasu Tokitsu, CEO

Securities code

6195 (listed on the TSE-Mothers/FSE Q-Board on Jun. 15, 2016)

Employees(consolidated)

163 (as of the end of Dec. 2021, including temporary employees)

Business

Services created specifically for local governments

Head office

MG Yakuin Building 1-14-5, Yakuin, Chuo-ku, Fukuoka, Japan

History(Group companies: JICHITAI AD, INC. (Advertising Business), HOPE ENERGY, INC. (Energy Business),
JICHITAI WORKS, INC. (Jichitai Works Business)

Feb. 2005 Founded
Jun. 2006 Launched SMART RESOURCE SERVICE
Sep. 2013 Launched SMART CREATION SERVICE“Machilet”
Jul. 2014

Launched “Machiiro,” an app that connects
local governments and local residents

Aug. 2014 Started B-to-G solutions business
Jun. 2016 Listed on TSE-Mothers and FSE Q-Board

Nov. 2020

Developed AI for forecasting market pricesof electricity (Energy Business)

Mar. 2021

Announced participation in the private-sector trainee program of
the city of Shijonawate in Osaka prefecture

Jun. 2021

Launched SMART FR CONSULTING SERVICE
Launched the Jichitai Works Free Name Card service

Sep. 2021

Announced actions for ending negative equity

Oct. 2021

Announced launch of corporate version of the hometown tax
payment support service

Dec. 2017 Issued the first edition of“Jichitai Works”

Announced launch of “akisol” comprehensive platform forsolving abandoned house problems

Mar. 2018 Registered as an electricity retailer
and launched “GENEWAT”
May 2020

Started Jichitai Works HAxSH

Oct. 2020

Established a wholly owned
subsidiary HOPE ENERGY, INC.

Started a service using an SMS to assist local governmentswith pandemic safety and response operations
Nov. 2021

Announced the opening of Jichitai Design Consultation office

Dec. 2021 Transitioned to a holding company structure using a divestiture
Copyright (C) 2022 HOPE, INC.

03

Contents

I. 2Q FY2022 Financial Highlights
II. Topics
III. FY2022 Outlook
IV. Business Environment and Growth Strategies
V. 2020 VISION
VI. Appendices

Copyright (C) 2022 HOPE, INC.

04

I. 2Q FY2022 Financial Highlights

Start of consolidated financial statements• Due to the establishment of HOPE ENERGY, INC., which is a wholly owned subsidiary, HOPE, INC. changed from non-consolidated to consolidated financial statements beginning with thesecond quarter of the fiscal year ended in Jun. 2021. In addition, HOPE, INC. established JICHITAI AD, INC. and JICHITAI WORKS, INC. on Dec. 1, 2021. As a result, the consolidated
financial statements for 1H FY2022 include these three companies.
• This presentation has both consolidated and non-consolidated financial information.
• Numbers are rounded down and percentages are rounded up or down to the first decimal place.
• Some documents referenced in the following pages are in Japanese version only.

Copyright (C) 2022 HOPE, INC.

05

Impact of COVID 19

Response to COVID-19
Started a COVID-19 Response Team

Monitors health of employees and makes preparations for responses to outbreaks.

Established a teleworking infrastructure

Created an environment that facilitates teleworking for a broad range of tasks.

Online activities and no outings for businessAs a rule, the internet is used for all meetings with people outside the company.

Effect on business operations
Advertising (JICHITAI AD, INC.) / Jichitai Works Business (JICHITAI WORKS, INC. )No significant effect at this time, but some companies may start to reduce their advertising activities.
There is also a risk that financial difficulties at advertisers may delay payments for some receivables or make it
impossible to collect some receivables.

Energy Business (HOPE ENERGY, INC.)

Although the downturn in the demand for electricity associated with temporary closings of schools and other public-sector
buildings has stopped, the COVID-19 crisis may continue to have effects on electricity demand and the purchases ofelectricity.

Copyright (C) 2022 HOPE, INC.

06

1H FY2022 Financial Summary (July – December 2021)• Transitioned to a holding company structure with three group companies on December 1, 2021

1H FY2022 Results(consolidated)

Sales were up 109.5% from one year earlier to an all-time highOperating profit was ¥(6,982) million■Net sales¥24,546 million (up 109.5% YoY)

■Operating profit¥(6,982) million (¥259 million in 1H FY2021)

Advertising Business

Energy Business

Jichitai Works Business

Aim for higher productivity throughmeasures for the proper size of thisbusiness

Record-high volume of electricity supplied
due to winning bids in FY2021; nosubmission of bids for new contracts in 2Q

Sales and earnings growth due to anincrease in B-to-G solutions orders■Net sales■Net sales■ Net sales■Segment profit■Segment profit■ Segment profit(JICHITAI AD, INC.)¥ 615 million (down 6.5% YoY)
¥53 million (up 138.5% YoY)

(HOPE ENERGY, INC.)¥ 23,785 million (up 116.5% YoY)¥(6,843) million (¥390 million in 1H FY2021)
Copyright (C) 2022 HOPE, INC.

(JICHITAI WORKS, INC. )¥143 million (up 104.2% YoY)
¥ 36 million (up 196.1% YoY)07

1H FY2022 Income Statement Highlights (Vs. 1H FY2021)
1H FY2021 (consolidated)(Millions of yen)

ResultsComp.

1H FY2022 (consolidated)
ResultsComp.

YoY change

Net sales

11,718Gross profit

738

6.3%

(6,441)(26.2)%(972.3)%

SG&A expenses

479

4.1%

540

2.2%

+12.8%

Operating profit

259

2.2%

(6,982)(28.4)%

Ordinary profit

243

2.1%

(7,026)(28.6)%

Profit attributable toowners of parent

158

1.4%

(7,044)(28.7)%

24,546

Copyright (C) 2022 HOPE, INC.

+109.5%08

1H Income Statement Highlights (Vs. Forecasts)• Between October and December 2021, the price of electricity on the Japan Electric Power
Exchange (JEPX) remained high. The sharp increase in the cost of sales had an enormous
negative impact on the 1H results.
1H FY2022 (consolidated)(Millions of yen)

Results

Net sales

24,546Gross profit(6,441)

Initial forecasts (announced on August 11, 2021)

22,126

SG&A expenses

540

Operating profit(6,982)(46)

Ordinary profit(7,026)(82)

Profit attributable toowners of parent(7,044)(95)

Net income per share(738.62)yen(9.72)yen

Copyright (C) 2022 HOPE, INC.

09

Quarterly Sales• In the first quarter, we stopped submitting bids for local government electricity supply
contracts. We are continuing to supply based on existing contracts.
• Sales of the Advertising Business are stable and Jichitai Works Business is on a growth track.

14,00012,97853

Others
12,000(Millions of yen)

11,567

Jichitai Works Business (JICHITAI WORKS, INC. )90

10,370

Energy Business (HOPE ENERGY, INC.)

10,000Up
104.2%
YoY

111

Advertising Business (JICHITAI AD, INC.)

8,000

5,445

6,000

2,551

2,808

2,100

2,352

386

426

1Q

2Q

1,665
14

1,263

0

32

80

4,000

2,000

6,052

23

6,355
46

5,666

11,134
9,569

4,622

5,721

5,267

5,934

431

742

298

359

372

3Q

4Q

15

12,65138

1Q(non-consolidated)

2Q(consolidated)

FY2020 (non-consolidated)

FY2021

Copyright (C) 2022 HOPE, INC.

3Q

(consolidated)

689

272

342

4Q

1Q

2Q

(consolidated)

FY2022 (consolidated)10Quarterly Operating Profit• Between October and December 2021, the price of electricity on the JEPX remained high,significantly affecting the 2Q Energy Business earnings.
FY2020 (non-consolidated)(Millions of yen)

1Q

2Q

3Q

FY2021

1Q

4Q

2Q

FY2022 (consolidated)

3Q

4Q(non-consolidated)(consolidated)(consolidated)(consolidated)

1Q

2Q

Advertising Business

(4)

13

51

244

(2)

25

59

245

7

46

Energy Business

19

79

149

808

762

(371)

(7,513)197(41)(6,802)

Jichitai Works Business

(2)

2

(3)

42

5

7

1

44

8

27

Others

(2)

(1)

0

(7)

(9)

(8)

(8)

(21)

(23)

(22)

Adjustments

(66)

(76)

(74)

(150)

(68)

(80)

(75)

(85)

(77)

(105)

Total

(56)

16

122

937

686

(427)

(7,535)

381

(126)

(6,856)(JICHITAI AD, INC.)(HOPE ENERGY, INC.)(JICHITAI WORKS, INC.)(corporate expenses)*Standards for the allocation of corporate expenses were revised to more accurately show segment earnings. As a result, segment earnings and corporate expenses have changed
beginning with 1Q FY2020. The new standards have no effect on total earnings.

Copyright (C) 2022 HOPE, INC.

11

Advertising Business

Sales by Segment• Sales were lower but productivity continued to improve because of measures to achieve theproper size of this business; activities were strengthened for development of new services
Others900

SMART CREATION SERVICE

800

SMART RESOURCE SERVICE

700

742

689

94

(Millions of yen)

77
600
500
400

386
73

300

17

426
95
37

431

Down
4.7%
YoY

394

42

298

82

66
3

200

295

293

305

1Q

2Q

3Q

100

254

228

372

359

372

40

82

272

75

35

256

240

342
70

42
21

53

239

209

219

4Q

1Q

2Q

0

4Q

1Q

(non-consolidated)

2Q(consolidated)

FY2020 (non-consolidated)

FY2021

Copyright (C) 2022 HOPE, INC.

3Q

(consolidated)(consolidated)

FY2022 (consolidated)

12

Energy Business

Sales by Segment• The Energy Business has stopped bidding on new contracts to reduce the level of future risk exposure.
• During the beginning of the 2nd quarter (October) and December 31, we had completed roughly 10% ofelectricity supply contracts but the volume of electricity supplied was high because of winter weather.
Up
111.4%
YoY(Millions of yen)

12,00010,0008,000

12,651

6,000

9,569

4,000

4,622

2,000
0

1,263

1Q

2,100

2,352

2Q

3Q

4Q

5,721

1Q

2Q

(consolidated)

FY2020 (non-consolidated)■ Winning Bids
*As of confirmationof result of bids

FY2019FY2020＊
FY2021＊
FY2022＊

5,934

5,267

(non-consolidated)

11,1343Q(consolidated)

4Q

1Q(consolidated)

FY2021

2Q

FY2022 (consolidated)

1Q (Jul.-Sep.)

2Q (Oct.-Dec.)

3Q (Jan.-Mar.)

4Q (Apr.-Jun.)

Total

Not disclosed

Not disclosed

Not disclosed

Not disclosed

142
580
859
39

70
177
39

96
201
0

Copyright (C) 2022 HOPE, INC.

337
426
ー

77
55
ー

13

Jichitai Works Business

Sales by Segment• Consistently high levels of Jichitai Works advertisements and B-to-G solution orders

120Up
135.6%
YoY(Millions of yen)

100

80

60

111
90

80

40

20

14

23

32

53

46

38

15

0

1Q

2Q

3Q

4Q

1Q

(non-consolidated)

2Q(consolidated)

FY2020 (non-consolidated)

3Q(consolidated)

4Q(consolidated)

FY2021

1Q

2Q

FY2022 (consolidated)*The first issue of Jichitai Works magazine was Dec. 22, 2017 and the magazine’s new design and format started in Jun. 2020.
Copyright (C) 2022 HOPE, INC.

14

Balance Sheet Highlights• Negative equity at the end of 2Q FY2022 was ¥8,047 million due to 1H operating loss
• In December 2021, we completed making payments of about ¥6.5 billion for imbalance fee incurred in
January 2021 to electric utilities.
• Beginning 1Q FY2022, prior-quarter comparisons are shown to facilitate comparisons of negative equity.
1Q FY2022 (consolidated)(Millions of yen)

Results

2Q FY2022 (consolidated)

Comp.

Results

Comp.

ChangeCash and deposits

2,542

20.7%

2,144

20.2%

(397)

Trade receivables and contract assets

8,286

67.5%

7,673

72.2%

(612)

321

2.6%

226

2.1%

(95)

11,54594.0%

10,41998.1%(1,126)

733

6.0%

205

1.9%

(528)

12,279100.0%

10,624100.0%(1,654)

Accounts payable-trade

10,92589.0%

16,732157.5%+5,807

Short-term borrowings

950

7.7%

950

8.9%

−

Current portion of long-term borrowings

336

2.7%

316

3.0%

(19)

Inventories

Current assets
Non-current assets
Total assets

13,469109.7%

18,210171.4%+4,740Bonds payable

100

0.8%

100

0.9%

−

Long-term borrowings

410

3.3%

361

3.4%

(49)

Non-current liabilities

511

4.2%

461

4.3%

(49)

Total liabilities

13,980113.9%

18,672

175.7%+4,691

Total net assets(1,701)(13.9)%(8,047)(75.7)%(6,346)

Total liabilities and net assets

12,279100.0%

10,624100.0%(1,654)Current liabilities(Reference) For more information, see the news release dated Dec. 8, 2021 concerning completion of payments for imbalance fee incurred in Jan. 2021 (Japanese version only).
https://ssl4.eir-parts.net/doc/6195/tdnet/2057262/00.pdf
Copyright (C) 2022 HOPE, INC.

15
62

Progress of Plans to End Negative Equity• Many activities are under way to increase equity and improve business operations; goals are toincrease financial soundness and profitability.
■ Third-party allotment of stock and share acquisition rights
On August 27, 2021, HOPE, INC. raised funds by a third-party allotment to sell stock and the 11th share acquisitionrights with an exercise price adjustment clause.

■ Used spinoffs to establish subsidiaries; considering business/capital alliance or other measures
for these businesses
On December 1, 2021, HOPE, INC. established JICHITAI AD, INC. and JICHITAI WORKS, INC. through spinoffs. The
two newly formed companies succeeded our respective businesses. Based on the assumption that we will continue
to operate these businesses, we plan to use business and capital alliances and other forms of partnerships withcompanies that can help these businesses create even more value. These partnerships will also contribute toincreasing the HOPE Group’s equity.

■ Management improvements for stability of earnings(1) Reduce risk in the electricity retail sales business and take actions concerning business risk

• In the electricity retail sales business, HOPE, INC. will not submit bids for selling electricity to local governments until this business has clearly reached the point
where JEPX market risk no longer has a significant effect on the business operations of the HOPE Group. This will reduce the demand for working capital requiredfor purchasing electricity and reduce risk exposure. We have completed roughly 10% as of December 31, 2021 (compared to October 1, 2021) of the electricity
supply contracts and expect to complete 60% by the end of March 2022.
• Based on the current challenging business climates, we recognize the need to carefully consider whether to continue the electricity retail business.

(2) Use of a spinoff and absorption to transfer the electricity retail sales business to a subsidiary• On September 28, 2021, shareholders approved this spinoff and the spinoff took place on December 1, 2021.

(3) Profitability of existing and new businesses• 1H FY2022 earnings of the existing Advertising and Jichitai Works businesses were as planned.
• Continuing activities for the launch of new businesses to create more sources of earnings.

(Reference) For more information, see the news release dated Oct. 26, 2021 concerning the company split (simple spinoff) of the Advertising and Jichitai Works businesses and establishment of subsidiaries(Japanese version only) (https://ssl4.eir-parts.net/doc/6195/tdnet/2035126/00.pdf) and the Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending Jun. 30, 2022, dated Feb. 14, 2022.
Copyright (C) 2022 HOPE, INC.

16

II. Topics

Copyright (C) 2022 HOPE, INC.

17

Topics 1. Corporate Version of Hometown Tax Payment Support Service• This service raises awareness among companies of the hometown tax payment system andsubmits proposals to companies for these payments (donations) based on outsourcing
agreements with local governments■ Purpose• This service creates ties between local governments and companies and promotes donations that have benefits for local governments
and companies. The aim is to create more
opportunities for public-private sector collaboration and to help energize communities andregions throughout Japan.

Hometown tax payment support
service for companies
Started■ Advantages• We use skills acquired over many years forselling products and services for companies tocontact companies about using the hometown
tax payment system on behalf of local governments that asked HOPE, INC. for this service.
• Enable to conduct sales activities based on
links between company’s businesses and alocal government.

(Reference) For more information, see the news release dated Oct. 11, 2021 concerning this service (Japanese version only). https://ssl4.eir-parts.net/doc/6195/tdnet/2031095/00.pdf

Copyright (C) 2022 HOPE, INC.

18

Topics 2. “akisol” Comprehensive Platform for Solving Abandoned House Problems• “akisol” is a matching service for owners of abandoned houses who contact HOPE, INC. directly orafter receiving information about this service from a local government. Homeowners can use“akisol” to identify issues and locate a suitable private-sector company for resolving these issues.
■ Purpose• We are using its expertise as a hub for public-private sector collaboration for the provision of a nationwide service for owners ofabandoned houses in order to identify individual issues and determine ideas for actions forresolving these issues.

■ Advantages• “akisol” is capable of determining solutions forowners of abandoned houses even for difficult
situations that cannot be solved by using
Japan’s Abandoned House Bank system orgovernment demolition subsidies.

“akisol” comprehensive platform for solving
abandoned house problems in Japan(Reference) For more information, see the news release dated Oct. 17, 2021 concerning this service (Japanese version only).

Copyright (C) 2022 HOPE, INC.

https://ssl4.eir-parts.net/doc/6195/tdnet/2035615/00.pdf

19

Topics 3. Service Using an SMS for Pandemic Safety and Response Operations• This service uses an SMS (see note) to send to people who are staying at home with minor
COVID-19 symptoms or because of close contact with an infected individual a URL forreporting information about their health.
• The use of phone calls for reporting health information is also possible. Using this reporting
system can reduce the volume of work needed for monitoring infected people who have only
minor symptoms.
■ Purpose• This service reduces the volume of workrequired by local governments involving the
COVID-19 pandemic.

■ Advantages• A SMS can be used for many other government services, such as sending messages toremind people about tax payments and healthcheckups.
• This service is compatible with LGWAN (Local
Government Wide Area Network), which isused exclusively by local governments.
• This service is provided by using alliances withmedia4u inc. and CENTRIC Co., Ltd.

◯◯市役
所保健局
です。本
日の 定 期健
康 観 察を行いますので、U R L
よりご 回
答
お願いし
ます。
h tt p s ://x x x .l g.j pService for local
governments using an SMS
for monitoring COVID-19
casesHome recuperators,
etc.

Q4.健
康
えてく 状態を教ださい。

Use cooperation with media4u inc. and
CENTRIC to assist work needed forQ5.本日
教えて の体温をください。

monitoring health of people who are

Q6.外出
教えて の有無をください。

staying at home with COVID-19 symptoms
Operator*A short message service (SMS) is a service for exchanging brief text messages between smartphones and other mobile devices.
(Reference) For more information, see the news release dated Oct. 28, 2021 concerning this service (Japanese version only). https://ssl4.eir-parts.net/doc/6195/tdnet/2036511/00.pdf
Copyright (C) 2022 HOPE, INC.

20

Topics 4. Jichitai Design Consultation Office• A fixed-price design consultation and production service for better quality publications of local
governments■ Purpose• Many local governments have difficulty determining ways to produce publications for theirresidents by using a format that makes information easy to see and understand. There arevery few services that can meet this need.
• Offering a fixed-price consulting service forpublications for residents allows local governments to quickly complete tasks required
when there is a sudden need for a publication
for residents.

Solving problems
related to publications

A fixed-price design consultation andproduction service

Jichitai
DesignConsultation
Office■ Advantages• This service, which has started on a trial basis,
uses our expertise in the Advertising Businessto provide a service structured to help local
governments solve their advertising issues.

(Reference) For more information, see the news release dated Oct. 11, 2021 concerning this service (Japanese version only). https://ssl4.eir-parts.net/doc/6195/tdnet/2031095/00.pdf

Copyright (C) 2022 HOPE, INC.

21

Topics 5. Monthly Disclosure of Energy Business Data
• Started monthly summary of Energy Business results (preliminary) operated by our subsidiary HOPE
ENERGY, INC.
■ Reason for monthly announcements• HOPE, INC. is reducing risk exposure in this business by suspending the submission of bids for new contracts and downsizing this business. In FY2022, the Energy Business is expected to continue to account for a significant percentage of
total sales due to contractual obligations to current customers. Monthly announcements will be made to provide detailed
and timely information.
FY2022

Forecast for avg. cost ofpurchasing electricity(Yen/kWh)

Actual avg. cost ofpurchasing electricity(Yen/kWh)

Avg. selling price ofelectricity(Yen/kWh)Electricity supplied(approx.)(million kWh)Jul. 2021

9.82

9.38

15.70

360

Aug. 2021

10.69

10.17

15.75

350

Sep. 2021

9.50

9.20

15.92

320

Oct. 2021

8.09

14.60

15.28

290

Nov. 2021

8.30

21.64

15.34

270

Dec. 2021

9.84

20.34

15.13

300

Jan. 2022

11.07

26.81

14.94

310

Feb. 2022

8.39

-

-

-

Mar. 2022

7.47

-

-

-

Apr. 2022

7.28

-

-

-

May 2022

7.65

-

-

-

Jun. 2022

7.75

-

-

-

(Reference) For more information, see the news release dated Feb. 10, 2022 concerning Monthly Summary of Energy Business Results for Jan. (Preliminary Report) (Japanese version only).
https://ssl4.eir-parts.net/doc/6195/tdnet/2083828/00.pdf

Copyright (C) 2022 HOPE, INC.

22

Topics 6. Change of the Fiscal Year End• We plan to change the fiscal year end from June 30 to March 31, subject to the approval for partial
amendments to the Articles of Incorporation at an extraordinary shareholders meeting to be heldon March 24, 2022
■ Purpose• Increase the efficiency of business operations by improving the HOPE Group’s management and administrative activities• Promote to establish an infrastructure for strengthening business activities and the management of business operations. To operate our businesses more effectively, we should change the fiscal year for consistency of our business management and groupbudgeting and oversight with the activities and budgeting and operation cycles of local governments in Japan. Furthermore, thischange will result in the conformity of employee evaluation and other internal systems.

■ Outlook• FY2022 will include nine months from July 1, 2021 to March 31, 2022
• The consolidated earnings forecast (nine-month period) for the fiscal year ending March 31, 2022 will be announced promptly
when it is calculated after the approval of resolution at an extraordinary shareholders meeting and a close examination of the
impact of the change in fiscal year-end.
• If shareholders approve the proposal at the extraordinary shareholders meeting, we believe that the probation period for delisting
our stock due to negative equity will be extended to March 31, 2023, which is the last day of the first fiscal year following thechange in the fiscal year.

(Reference) For more information, see the news release dated Jan. 31, 2022 concerning a change of the fiscal year end, partial amendments to the Articles of Incorporation, and establishment of arecord date for convocation of an extraordinary shareholders meeting (Japanese version only). https://ssl4.eir-parts.net/doc/6195/tdnet/2073827/00.pdf
Copyright (C) 2022 HOPE, INC.

23

III. FY2022 Outlook

Copyright (C) 2022 HOPE, INC.

24

FY2022 Plan (Income Statement)• There are no earnings forecasts at this time because the rapid increase in JEPX market pricesthat started in October 2021 makes it difficult to determine a reliable estimate.
• The consolidated earnings forecast for FY3/2022 will be announced promptly when it iscalculated after the approval of resolution at the March 24 extraordinary shareholders meeting
and a close examination of the impact of the change in fiscal year-end.
FY2020(Millions of yen)

FY2021(non-consolidated)(consolidated)

Results

Results

Net sales

12,47028,444Gross profit

2,261(5,841)

SG&A expenses

1,240

1,053

Operating profit

1,020(6,895)

Ordinary profit

1,012(6,935)

Profit attributableto owners of parent

665(6,978)117.97yen＊(1,109.09) yen

Net income per share

FY2022 (consolidated)Plan

34,850YoY change+22.5%(Reference) For more information, see the news release dated Aug. 24, 2021 concerning corrections to consolidated financial results for the fiscal year ended June 30, 2021 (https://ssl4.eirparts.net/doc/6195/tdnet/2022430/00.pdf) and the news release dated Nov. 15, 2021 concerning the FY2022 forecast for consolidated sales and earnings (https://ssl4.eirparts.net/doc/6195/tdnet/2050565/00.pdf) (Japanese version only).
* Net income per share is adjusted to reflect the 1-to-4 stock split effective on Jan. 1, 2020.
Copyright (C) 2022 HOPE, INC.

25

Assumptions Used for the FY2022 Plan
• For the FY2022 earnings forecast, out estimates for major variable items in the Energy Businessare as follows.
Estimated regional composition of energy to be supplied
Hokkaido

Tohoku

Tokyo

Chubu

Hokuriku

Kansai

Chugoku

Shikoku

KyushuTotal

12.34%

4.32%

26.48%

35.30%

1.51%

7.33%

8.91%

2.62%

1.19%

100.00%1 Cost of open market purchases of electricity■• Forecast for cost of electricity purchased on the JEPX (as of August 2021)
These estimates are weighted averages using the expected electricity prices and amount purchased bycustomers of the HOPE Group in each region
Market priceforecast(Yen/including tax)

2021

2022

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

9.82

10.69

9.50

8.09

8.30

9.84

11.07

8.39

7.47

7.28

7.65

7.75

2 Fuel cost adjustment■• Forecast for the fuel cost adjustment
These estimates are weighted averages using the expected electricity prices and amount supplied tocustomers of the HOPE Group in each region*The fuel cost adjustment allows revising electricity rates paid by customers in order to reflect an increase or decrease in the cost of imported fuel used at thermal power plants.
The adjustment is based on the difference between the average price of fuel (using 3-month trade statistics for prices of crude oil, LNG and coal) and reference fuel prices.

Weighted
average fuelcost adjustment(Yen/including tax)

2021

2022

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

(2.73)(2.65)(2.57)(2.46)(2.38)(2.29)(2.21)(2.13)(2.06)(1.91)(1.92)(1.91)(Reference) For more information, see the news release dated Oct. 7, 2021 concerning monthly summary of Energy Business results (preliminary) for FY2022 (Japanese version only).
https://ssl4.eir-parts.net/doc/6195/tdnet/2030462/00.pdf
Copyright (C) 2022 HOPE, INC.

26

Consistent Sales Growth
40,00034,85035,00028,44425,00020,00015,00012,47010,000

5,000

512

695

635

1,142

1,592

1,774

2,269

3,654

Non-consolidated

FY
2
(P 02
la 2
n)

20
21
FY

20
20
FY

20
19
FY

8
01
FY
2

17
20
FY

20
16
FY

5
01
FY
2

20
14
FY

01
3
FY
2

20

12

0

FY

(Millions of yen)

30,000Consolidated(Reference) For more information, see the news release dated Aug. 24, 2021 concerning corrections to consolidated financial results for the fiscal year ended June 30, 2021.
https://ssl4.eir-parts.net/doc/6195/tdnet/2022430/00.pdf* FY2014 was an irregular nine-month period because of a change in fiscal year-end.

Copyright (C) 2022 HOPE, INC.

27

FY2022 Business Segment Sales Plan

Jichitai Works Business (JICHITAI WORKS, INC. )40

Energy Business (HOPE ENERGY, INC.)
Advertising Business (JICHITAI AD, INC.)

35

Approx. ¥28.4 billion

Approx. ¥34.8 billion
Approx. ¥0.43 billion〈34.6〉

30(Billions of yen)

Approx. ¥0.22 billion
25

20

Approx. ¥32.87 billion
15

Approx. ¥26.49 billion〈32.66〉10

50

Approx. ¥1.71 billion

Approx. ¥1.53 billion

FY2021

FY2022(Plan)* 〈 〉 is figures using the gross recognition method.

Copyright (C) 2022 HOPE, INC.

28

IV. Business Environment and
Growth Strategies

Copyright (C) 2022 HOPE, INC.

29

Advertising Business

Market Summary• HOPE, INC. created a new market with its Advertising Business, the company’s original activity,and has provided advertising services to local governments for about 16 years.
• HOPE, INC.’s share of this market is about 10.8%.
The advertising market in Japan

Approx. ¥5.3 trillion *1
Approx. ¥13.8 billion *2
Approx. ¥1.5 billion *3

Target market
About 10.8%of the target market*1 Source: Total sales in 2020 (preliminary for Nov. 2021) from Survey of Selected Service Industries,
Ministry of Economy, Trade and Industry*2 Market size is estimated by HOPE, INC. using current advertising rates received and based on theassumption that SR/SC services will be used at a level reflecting the populations of municipalities.
*3 FY2021 Advertising Business sales (excluding contract production of public info publications)

Copyright (C) 2022 HOPE, INC.

30

Advertising Business

Goals for FY2022• Improve profitability by positioning this business as a profit-generation business and achieving theproper size of this business• Aim for consistent earnings by raising productivity per employee while holding sales steady at an
appropriate level■ Gross profit per person in the Advertising BusinessNet sales *1

Gross profit per person *2

2,500■ HOPE, INC. already has more than 10% of

15,0002,188

the local government ad market in Japan

2,051

with annual revenue of about ¥13.8 billion.

2,000

1,810

→ The goal is a higher proﬁt margin rather■ Reduce the seasonality of this business tobuild a stronger proﬁt structure by cutting
expenses and raising eﬃciency.

■ To increase proﬁtability, improve productivity with measures targeting the new perfor-(Millions of yen)than sales growth.

1,546

●

1,500

●
●

1,000

6,893

●

9,510

10,912

12,000

●

1,400

9,000

8,166

6,942

6,000

(Thousands of yen)

Strategies for a Mature Market

3,000

500

mance indicator of gross proﬁt per person

0*1 Advertising business sales (excluding contract production of public information publications)*2 Number of advertising employees is the average for every year and excludes advertisement designers

Copyright (C) 2022 HOPE, INC.

FY2018FY2019FY2020

FY2021

FY2022031

Energy Business

Market Summary• Rapid growth since the launch of this business in 2018 that used HOPE, INC.’s expertise involving
bidding on public-sector contracts• Expect electricity supplied to reach a record high in FY2022, but have stopped bidding on new
contacts (see page 33 for more information)
Japan’s electricity market

Approx. ¥15 trillion *1
Electricity sales to local govts.

Approx. ¥1 trillion *2

Target market
HOPE, INC. serves approx.

Approx. ¥54.0 billion *3 5.4% of the target market*1 Source: Electricity and Gas Market Surveillance Commission*2 HOPE, INC. estimates using "Statistics on Energy Consumption” by Agency for Natural Resources
and Energy*3 Expected total sales of energy supplied for contracts received in FY2021(Includes one-year of multi-year contracts and excludes fuel adjustments and renewable energy fees)

Copyright (C) 2022 HOPE, INC.

32

Energy Business

Goals for FY2022• Downsize operations to reduce business risk exposure■ Assumptions

1) Electricity prices are usually low in the spring and fall but in 2021, JEPX prices were higher than expected.
2) HOPE, INC. was unable to purchase the expected volume of electricity by using direct one-to-one transactions
because payment terms did not match the HOPE Group’s desired terms.
3) The Energy Business is facing a challenging business climate even now although we stopped submitting bids

■ Continuation of the suspension of submitting bids

The Energy Business is a large percentage of consolidated sales. Due to the substantial market risk in this business,
HOPE, INC. will not submit bids in the electricity retail sales business for new electricity supply contracts with local
governments in order to improve the soundness of business operations. This suspension will continue until it becomes
clear that this market risk will no longer have a significant effect on the Group’s business operations.

■ Purpose of the spinoff of the electricity retail sales business to HOPE ENERGY, INC.

• The electricity retail sales business will continue at HOPE ENERGY, INC. and actions will be taken to reduce risk exposure by
downsizing this business in a manner that reflects the business climate.
• The shift to a group management structure with more speed and flexibility will better facilitate the timely and proper
management of risk and the best possible allocation of the HOPE Group’s resources.

■ Business continuity• We recognize the need to carefully consider whether to continue the electricity retail business.

(Reference) For more information, see the news release dated Aug. 11, 2021 concerning the absorption-type company split (https://ssl4.eir-parts.net/doc/6195/tdnet/2014535/00.pdf) (Japanese versiononly) and the Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2022 dated Feb. 14, 2022.

Copyright (C) 2022 HOPE, INC.

33

Jichitai Works Business

Market Summary• Substantial public-sector demand and still considerable growth potential
The market for promotions targeting local governments still has
much more potential, including public-private sector matching
and measures to become more competitive
Market for promotions
targeting local govts.

15.2 billion

Local govt.

Approx. ¥Public-sector demand(except national govt., construction)

Companies

Approx. ¥ 8.68 trillion * 1
Approx. ¥1.52 trillion * 2

Approx.

¥0.22 billion*3

1%

Potential market

Portion for companies operating nationwide
Assumes about 1% is used for promotional activities(market for promotions targeting local governments.)

Approx. ¥ 15.2 billion*1 Calculated by HOPE, INC. using Summary of Guide to Contracts in the Public Sector – FY2018,
The Small and Medium Enterprise Agency*2 HOPE, INC. estimates based on FY2018 Administrative Project Review, Ministry of Internal Affairs andCommunications*3 FY2021 Jichitai Works Business sales

Copyright (C) 2022 HOPE, INC.

34

Jichitai Works Business

Goals for FY2022

Become a link for public-private sector collaboration and ties
among local governments based on the concept of energizing“experiences and people” at local governments.

Monitor/collect info
Local govt.

Monitor･ Social issues･ Need for the useof private sector
partners

Contribute tomarket growth

Jichitai Works

Need for ways
to contact local
governments

Companies

Provide many types of services• Broad range of activities using the Jichitai Works brand• More matching by using the internet, telemarketing and other methods

Copyright (C) 2022 HOPE, INC.

35

Jichitai Works BusinessBusiness Strategy

Business strengthening, support and creation made possible by the local government database

Local govt.

Information

Sales

Jichitai Works

The Jichitai Works Free
Name Card service

Companies

Information

Jichitai Works Web

Jichitai Works

Machiiro

Sales

B-to-G solutions
Partnerships
with regional
banks

Partnerships
with local
govts.

Jichitai Clip

Open data

Collect and store data
Establish and enlarge local govt. databases
Individuals

Organizations• Budgets• Issues, needs• Information about local govt.
and national govt. employees

Copyright (C) 2022 HOPE, INC.

36

Jichitai Works BusinessBusiness Strategy• The government employee platform concept :Enlarge business operations to cover the government employee sector in order to become theleader in businesses and services for local governments.
• The government employee sector will be a growing market for the Jichitai Works Business.

Current core competence(local govt. relations)・・・

Local govt.

Govt. employees

Local govt.

Govt. employees

Local govt.

Govt. employees

The govt. employee platform concept

Core competence enlargement
Copyright (C) 2022 HOPE, INC.

・・・
Market sectors
covered by the
Jichitai WorksBusiness37

FY2022 Investor Relations Activities• Plan to continue increasing the number of meetings with institutional investors by using online
meetings and expanding English-language disclosure activities.
• Also plan to hold meetings during FY2022 when requested.

■ Number of institutional investor meetings
240
220
200
180
160
140
120

233

100
80
60

82

40
20
0

9

6

FY2018FY2019Goal:
15

FY2020

FY202130meetings

FY2022*Includes online meetings and telephone calls

Copyright (C) 2022 HOPE, INC.

38

V. 2020 VISION

Copyright (C) 2022 HOPE, INC.

39

Expansion of Core Competence• Enlarge local government relations, HOPE, INC.’s core competence, to encompass the entire
government employee sector.

Current core competence(local govt. relations)・・・

Local govt.

Local govt.

Local govt.

Govt. employees

Govt. employees

Govt. employees・・・The govt. employee platform concept

Core competence enlargement
Copyright (C) 2022 HOPE, INC.

40

Expansion of Core Competence

Business domain
expansion

Govt. employees

Local govt.

Use the enlargement of the corecompetence for the diversificationof business activities in a domain
expanded to include thegovernment employee sector

Business domain
expansion

Become the leader in businesses andservices for local governments
Copyright (C) 2022 HOPE, INC.

41

2020 VISIONF Y2030
Net sales
Operating profit
Services¥

100 billion¥ 10 billion
10 services

Copyright (C) 2022
2020
2021 HOPE, INC.

42

2020 VISION Initiatives• Start and implement initiatives for accomplishing the FY2030 goals of the 2020
VISION: Sales of ¥100 billion, operating profit of ¥10 billion and a business portfoliowith at least 10 services.

Advertising Energy

100

JichitaiWorks
Newbusiness¥¥28.4
billionNew
businessbillionNew
business

ActionsNewbusinessNewbusiness

FY2021

FY20303 services

More than 10 services

Copyright (C) 2022 HOPE, INC.

• Improve profitability ofexisting businesses• Develop new businesses• Use all existing businesses
as a base for new businesses• M&A• Financial and investment
strategies

43VI. Appendices

Copyright (C) 2022 HOPE, INC.

44

Business Segments and Services

Advertising Business
SMARE RESOURCE SERVICESMART CREATION SERVICE

Ads in public info publications,banner ads, etc.

Machiletetc.

Energy Business

Jichitai Works Business

Jichitai Works
The Jichitai Works Free
Name Card service

Jichitai Works Web

B-to-G Solutions

Jichitai Works

Jichitai Clip

Machiiro*Beginning with FY2020, Machiiro has been moved from the Jichitai Works segment to others.

Copyright (C) 2022 HOPE, INC.

45

Positioning of Business Units• Enlarge every business domain and increase actions for the expansion of HOPE, INC.’s corecompetence.
Measures for providing value
Additional
local govt. revenue

Enlargement of targeted domains

Local
govt.

Ads in public info
publications, banner ads, etc
Machilet

SMART FR CONSULTING

Public-private sector
collaboration

B-to-G
Solutions

Local govt. DX…

Jichitai Works

Jichitai Clip

Machiiro

Jichitai Works

Jichitai Works Web

Govt.
employees

The Jichitai Works Free Name Card service

The govt. employee platform concept

Copyright (C) 2022 HOPE, INC.

46

Advertising Business (JICHITAI AD, INC.)
Group Corporate Philosophy

Local govt.
assetsProviding new value to citizens
through local governments

Utilization•Public info publications,
local government websites

Additional
local govt. revenue•Use of media space•Information distributed to residents■ Value provided
Local gov t.

•Free joint publications by local
governments and HOPE, INC.

A sourceof revenue

Opportunities
for PR

Companies

JICHITAI AD

Copyright (C) 2022 HOPE, INC.

47

A new source of revenue for local governments
Local governments sell ad spacein their publications■ Business model

広報

この文章はダミーコピーです
本来の文言とは全く違った内

く す る た め 使 用 し て い ま す︒
容を記載しています︒

お 読 み に な ら な い で 下 さ い︒
この文章はダミーコピーです

構成を分かりやすくするため
使 用 し て い ま す︒本 来 の 文 言
お 読 み に な ら な い で 下 さ い︒
使 用 し て い ま す︒本 来 の 文 言

構成を分かりやすくするためとは全く違った内容を記載しとは全く違った内容を記載しコピーですお読みにならないて い ま す︒こ の 文 章 は ダ ミ ーて い ま す︒こ の 文 章 は ダ ミ ー
で 下 さ い︒こ の 文 章 は ダ ミ ー
コピーですお読みにならない

コピーですお読みにならないで 下 さ い︒構 成 を 分 か り や すで 下 さ い︒こ の 文 章 は ダ ミ ー
で 下 さ い︒構 成 を 分 か り や す

コピーですお読みにならない
く す る た め 使 用 し て い ま す︒

く す る た め 使 用 し て い ま す︒
容を記載しています︒
本来の文言とは全く違った内

本来の文言とは全く違った内
この文章はダミーコピーです

で 下 さ い︒こ の 文 章 は ダ ミ ー

コピーですお読みにならないて い ま す︒こ の 文 章 は ダ ミ ーて い ま す︒こ の 文 章 は ダ ミ ーとは全く違った内容を記載し

使 用 し て い ま す︒本 来 の 文 言

構成を分かりやすくするため

お 読 み に な ら な い で 下 さ い︒

この文章はダミーコピーです

容を記載しています︒

お 読 み に な ら な い で 下 さ い︒
構成を分かりやすくするため
使 用 し て い ま す︒本 来 の 文 言

コピーですお読みにならないとは全く違った内容を記載しで 下 さ い︒構 成 を 分 か り や すXXXX容を記載しています︒

この文章はダミーコピーです

この文章はダミーコピーです

お 読 み に な ら な い で 下 さ い︒

お 読 み に な ら な い で 下 さ い︒

構成を分かりやすくするため構成を分かりやすくするため

使 用 し て い ま す︒本 来 の 文 言

使 用 し て い ま す︒本 来 の 文 言とは全く違った内容を記載しとは全く違った内容を記載しこの文章はダミーコピーです

容を記載しています︒て い ま す︒こ の 文 章 は ダ ミ ーて い ま す︒こ の 文 章 は ダ ミ ー

この文章はダミーコピーです

コピーですお読みにならない

コピーですお読みにならない

お 読 み に な ら な い で 下 さ い︒

で 下 さ い︒こ の 文 章 は ダ ミ ー

お 読 み に な ら な い で 下 さ い︒

構成を分かりやすくするためコピーですお読みにならない

構成を分かりやすくするため

使 用 し て い ま す︒本 来 の 文 言

で 下 さ い︒構 成 を 分 か り や すで 下 さ い︒こ の 文 章 は ダ ミ ーとは全く違った内容を記載し

使 用 し て い ま す︒本 来 の 文 言て い ま す︒こ の 文 章 は ダ ミ ー

く す る た め 使 用 し て い ま す︒

コピーですお読みにならない

コピーですお読みにならない

本来の文言とは全く違った内で 下 さ い︒構 成 を 分 か り や すで 下 さ い︒こ の 文 章 は ダ ミ ーとは全く違った内容を記載しコピーですお読みにならない

く す る た め 使 用 し て い ま す︒

で 下 さ い︒構 成 を 分 か り や すて い ま す︒こ の 文 章 は ダ ミ ー

く す る た め 使 用 し て い ま す︒
容を記載しています︒

本来の文言とは全く違った内コピーですお読みにならない

コピーですお読みに本来の文言とは全く違った内た内容を記載しています。この文章はダミー

で 下 さ い︒こ の 文 章 は ダ ミ ー

ないで下さい。構成を分かりやすくするた

コピーですお読みにならない

この文章はダミーコピーですお読みにならで 下 さ い︒構 成 を 分 か り や す

コピーですお読みにならないで下さい。

く す る た め 使 用 し て い ま す︒

め使用しています。本来の文言とは全く違っ

本来の文言とは全く違った内ないで下さい。構成を分かりやすくするた容を記載しています︒

48
Copyright (C) 2022 HOPE, INC.

Ad
Othersた内容を記載しています。この文章はダミー

株式会社◯◯◯■■■■■■■■■■■■■■■■■■

2021

この文章はダミーコピーですお読みになら☎000-000-0000

Ad

Payment
for ad space
Payment
for ad space

SMART
RESOURCESERVICE
Local gov t.

11■ Ad in a public info publication■ Examples of media

Companies

Saleof ad space
Purchaseof ad space

め使用しています。本来の文言とは全く違っ

Payslips forgovernment employees
WebsitebannerPublic info
publications

SMART RESOURCE SERVICE
Advertising Business 1

Advertising Business 2

SMART CREATION SERVICE (Machilet)

Production and supply of local government
pamphlets for various fields with space for ads

Local gov t.

Free joint production of pamphlets
with even more useful info

Agreement■ Business model
Production
and supplyof pamphlets■ Examples of pamphlets

SMART
CREATIONSERVICE

Empty houses

Companies

Payment
for ad space■ Ad in a pamphlet (child care information)
Content(child careinformation)

Child careSaleof ad space

Senior care

Advertisement(monetize space)

My ending
OthersCopyright (C) 2022 HOPE, INC.

49

Advertising BusinessContracts with Local Governments
and Number of Publications Issued

SMART RESOURCE SERVICESMART CREATION SERVICE (Machilet)(Contracts)(Publications)

1,000

462

500

839
800

400

309

280

300

694

685

572

600

258

Plan
491

400

200

58

100
0

94

200

(Issued in 1H)

20
22
2Q

FY

21
20
FY

20
20
FY

19
20

FY

2Q

FY

18
20

20
22
FY

20
21
FY

20
20
FY

20
19
FY

FY

20
18

0

*For two or more different contracts with the same local government, each contract is counted separately.
*The SMART CREATION SERVICE includes conventional pamphlets (Machilet) as well as Clear File and other special publications issued in each fiscal year.
A revised definition is used for the actual number of these publications from FY2018 and these figures have been revised accordingly.

SMART FR CONSULTING SERVICE

Two local governments are using this new service that was launched in July 2021.
(Reference) For more information, see the news release dated Jul. 29, 2021 concerning the start of providing this new consulting service for Fukuoka city (Japanese version only).
https://ssl4.eir-parts.net/doc/6195/tdnet/2005240/00.pdf

Copyright (C) 2022 HOPE, INC.

50

Advertising Business

Main Business Characteristics

SMART RESOURCE SERVICESMART CREATION SERVICE (Machilet)

1 Bids used to purchase products

1 Most production and sales at the sametime of the year

•Big swings in bids (cost of purchases)•Risk of inability to purchase a sufficient volume due to

The production and sales period starts after signing contracts

bids of other companies, etc.

2 Seasonal nature of purchases andinventory risk

with local governments

2 Large pct. of sales in the fourth quarter
About 70% of publications are issued between Apr. and Jun.

▶ Most sales and cost of sales are recorded in the fourth quarter•Most SMART RESOURCE SERVICE purchases are

single transactions for an entire year (Apr. to Mar.),resulting in risk for holding large inventories

3 Effect on the next fiscal year
•Most purchases using bids submitted during thepeak season for government contract bids will havean effect on the next fiscal year all the way to Mar.

250

Publications issued in FY2021

200

Production and sales period

150
100
50

0

Jul. Aug. Sep. Oct.
2020

Copyright (C) 2022 HOPE, INC.

Nov. Dec. Jan. Feb.

Mar. Apr. May. Jun.
2021

51

Energy Business (HOPE ENERGY, INC.)
Group Corporate Philosophy

Local govt.
electricity use

Providing new value to citizens
through local governments

New electricity
service

Lower cost ofelectricity■ Value provided
Local gov t.

Cost reduction

Copyright (C) 2022 HOPE, INC.

52

Energy Business

Services

Electricity sales businessSupport local governments for reducing costs

Electricity• Sale of electricity*Business does not include

generation and distribution

Local govt.

■ Business model
Payments■ GENEWAT users(mainly local governments)

Hospitals• HOPE, INC. posts sales/cost of sales
based on monthly utilization

SewageplantsCopyright (C) 2022 HOPE, INC.

Schools

City halls

•••

53

Energy Business

1

Main Business Characteristics

Contracts are received by submitting bids
• Business may be lost to competing bids of other companies when new bidding takes
place every year

2

Vulnerability to the economy and weather• Electricity sales may vary depending on the health of the economy, unseasonable
summer or winter weather, and other weather events• Wholesale prices of electricity may vary depending on the cost of buying electricity, thecost of fuel, and the balance between the supply and demand of electricity

3

A low-cost business• When determining bids, the Energy Business utilizes bidding expertise acquired overmany years in the Advertising Business

Copyright (C) 2022 HOPE, INC.

54

Jichitai Works Business (JICHITAI WORKS, INC.)
Providing new value to citizens
through local governments

Group Corporate Philosophy

Local govt.

Use the private sector
to solve issues
Jichitai Works

Opportunity
to collaborate
with public sector

Companies

Public-private sector collaboration
Copyright (C) 2022 HOPE, INC.

55

A Government Magazine
Jichitai Works Business 1
with New Info and Ideas

Jichitai Works• Use of advertisements to monetize publications• Starting in FY2022, increased to three the types of publications with all advertisements by a single
advertiser; selling these publications as a B-to-G solution
A HOPE, INC. publication
with useful info and ideas

Local gov t.

Collect
information

Jichitai Works

Interaction
with local govt.

Companies

for the jobs of local
government employees

Provideinformation■ Issued six times every year 《Standard Jichitai Works》
1 One of the largest circulations in Japan

A comprehensive info magazine for local government
employees; circulation of up to 70,000, one of the largest inJapan in this category

2 Extensive coverage
Distributed at no charge to 1,788 municipalities and all 47
prefectural governments

3 Upgrading sharing of knowledge
Magazines include examples of innovative ideas, a variety ofknow-how and other content for improving government
services throughout Japan

Copyright (C) 2022 HOPE, INC.

Payment
for ad space■ Issued as needed《 Additional issues／PICKS／INFO》

Publications with a single advertiser
Layout created specifically for eachadvertiser; three types depending on thenumber of pages■ Jichitai Works Web
Articles in the printed editionof Jichitai Works magazine arealso posted on the internet.

56

Jichitai Works Business

Jichitai Works Magazine Issues• In FY2022, we are increasing the staff of the Jichitai Works Business with the goal of raising thenumber of magazines issued while maintaining the high quality of these publications.
11(Issue)
12

10

8

6

•Tourism/Foreign Tourist
Edition Vol. 2•Disaster Readiness/Crisis
Management Edition Vol. 2•Education and ICT Editionof which issued(（内1Q実績
in 4Q:
2Q: 4
2：1）)

2

Special editions•Tourism/Foreign Tourist
Edition Vol. 3

Topic-specific editions•Disaster Readiness/Crisis
Management Edition Vol. 3Standard editions

5

(

5

)

of which issued（内1Q実績
in 4Q:
2Q: 1
2：1）

1

4

2

Others4

4

FY2020

FY2021•Special edition forgovernment employees

3of which issued(（内1Q実績
in 4Q:
2Q: 2：1）)

3

0

2Q FY2022* Number of Jichitai Works magazine issued as owned media; Excludes exclusive advertising projects which are included in the B-to-G solutions menu.

Copyright (C) 2022 HOPE, INC.

57

Jichitai Works Business 2

B-to-G Solutions• In the B-to-G solutions, local government relationships are used for surveys to identify needs
and for holding seminars, and other activities.
In addition, sales promotion and other promotion fees from companies and a revenue sharing
model will be used for monetization.
Support for marketingand promotional
activities of companies
with products andservices for local
governments

Data collection

Local gov t.

Reports, other info

B-to-G
solutions
Seminars, needs surveys,
other services

Companies

Requests for assistance■ Contracted service orders received• Seminars for local government employees and other service
Use database
to attract customers• Direct mail marketing(including Jichitai Works INFO and PICKS)• Telemarketing• Others

Identify needs* B-to-G solutions has two components: (1) B-to-G promotions (formerly B-to-G marketing), which receives orders that generate promotion fees, and (2) B-to-G comprehensive support,
which receives orders with a revenue sharing structure.

Copyright (C) 2022 HOPE, INC.

58

Jichitai Works

Jichitai Works Business 3

Jichitai Works HAxSH• A platform for supporting public-private sector collaboration to provide one-stop access toall services for local governments from searching for information on services to request for
documents.

Jichitai Works

Companies
providing services

Register their own
services

Service searches andexaminations

Sharing of informationof person who
downloaded their
documents

Download
documents about
services of interest

Local govt.
personnel

Payment of fees

Register contact
and other
information

Collaboration with local
governments creates newopportunities

Solve problems byusing private-sector
services
Copyright (C) 2022 HOPE, INC.

59

An App Linking Local
Jichitai Works Business 4
Governments and Residents

Machiiro• The app provides the latest info from registered local governments by giving users access topublic info publications of local governments nationwide.
• Distribution of content for local governments and regions

Local govt.

UploadAgreement

Residents

Machiiro

Distribution of
governments
information
using an app*Machiiro screen sample

776,155

cumulative downloads

947 cumulative

local government contracts

Local governments
share of about

53.0%*Total as of Dec. 31, 2021

Copyright (C) 2022 HOPE, INC.

60

Additional Local Government Revenue

Since HOPE, INC.’s inception, the Advertising Businesshas generated revenue of about ¥8.98 billion for clients•SMART RESOURCE SERVICE has paid local governments
about ¥ 8.09 billion•Machilet has reduced local government costs byabout ¥ 0.89 billion(From HOPE, INC.’s inception through 2Q FY2022)

32.8

Cost reduction of about ¥billionsince the start of the Energy Business(Estimated cost reduction during the entire length of all current contracts; total for the period from the start of the service to 1Q FY2022)

Copyright (C) 2022 HOPE, INC.

61

Main Shareholders■ Number of shares and shareholders■ Top 10 shareholders

Number ofshares held

Total number of authorized shares

27,950,000 shares

No.

Number of shares issued

11,236,700 shares

1

E.T. Co., Ltd.

1,340,000 shares

Number of shareholders(with voting rights)

7,714

2

Takayasu Tokitsu

1,027,400 shares

3

MACQUARIE BANK LIMITEDDBU AC

300,000 shares

4

Individual shareholder

247,800 shares

5

Custody Bank of Japan, Ltd.
(Trust Account)

236,200 shares

6

Individual shareholder

235,900 shares

7

BNY GCM CLIENT ACCOUNTJPRD AC ISG (FE-AC)

198,552 shares

8

Individual shareholder

190,800 shares

9

Individual shareholder

185,800 shares

10

Individual shareholder

177,900 shares■ Shareholder distribution by category
Other Japaneseentities

2.6%

Overseas entities

7.6%

Company
executives*

Financial
institutions/securities
companies

22.4%

3.8%

Individuals,
others63.6%

Name of shareholders(As of Dec. 31, 2021)* Includes their private asset managers

Copyright (C) 2022 HOPE, INC.

62

Stock Information
PeriodJun. 15, 2016 to Dec. 30, 2021

IPO price¥350

Initial price¥805 (Jun. 15, 2016)

Highest price since IPO*

¥7,910 (Nov. 11, 2020)

Lowest price since IPO*

¥205 (Nov. 18, 2021)

ROE

FY2015FY2016FY2017FY2018FY2019FY2020

23.7%

23.9%

3.2%

(25.4)%

15.7%

75.4%

FY2016FY2017FY2018FY2019FY202027.9x116.3x

32.3x

30.5x

PER*

* Including stock prices during trading hours.
* Stock prices are adjusted to reflect a 1-to-4 stock split.

FY2021

FY2021* Calculated based on the stock price at the end of each fiscal year.

■ Stock price (Jul. 1, 2018 to Dec. 30, 2021)
(yen)
9,000

Nov. 5
Announcement of AI for forecasting market prices of electricity

8,000

May 26
Announcement of Jichitai Works HAxSH

7,000

Dec. 10
Announcement of
1-to-4 stock split

6,000
5,000
4,000
3,000
2,000

Mar. 26
Announcement of participation in the private-sector
trainee program of the city of Shijonawate

May 17
Announcement of the 3rd shareholder benefits
Aug. 9Earnings announcement
Sep. 3
Changed names ofbusiness segments and services

Jun. 29
Renewal of
Jichitai Works

Sep. 26
Renewal of
corporatelogoJul. 27
Announcementof upward
earnings forecast

Feb. 6
Commemorative
Aug. 11
dividend
Earnings and medium-term
management plan announcement

1,000
0

FY2019FY2020Jun. 30, 2019

Jul. 1The Media Business was renamed
the Jichitai Works BusinessAug. 11
Announcement ofabsorption-type company split

May 13
Announcement of
upward earnings forecast

Aug. 8
Earnings
announcement
May 27
Announcementof upward
earnings
forecast

May 21
Announcement ofpurchase of treasury shares

Apr. 30
Issued the Ninth Share Acquisition Rights andunsecured bonds through a third party allotment

Sep. 27
Announcement of actions
for ending negative equity

Sep. 14
Announcementof establishmentof a subsidiary

Dec. 23
A private-public sector allianceagreement with the city of Ogori (Fukuoka prefecture)

FY2021
Jun. 30, 2020

Copyright (C) 2022 HOPE, INC.

Dec. 1
Transitioned to a holding
company structure using
a divestiture

FY2022
Jun. 30, 2021

Dec. 30, 2021

63

HOPE, INC. Major Media Exposure
Date

Summary

Date

Summary

Jun. 7, 2016

Investment Information – New IPO Stocks,
Nihon Keizai Shimbun

Aug. 7, 2017

Information about HOPE, INC. in Japan Digest,
Nihon Keizai Shimbun

Sep. 1, 2016

Included in an article in the Oct.
issue of Project Design magazine

Jan. 18, 2018

Information about HOPE, INC’s electricity sales businessin the economy section of the Yomiuri Shimbun

Sep. 25, 2016

Information about HOPE, INC. on the TBS TV
program Gacchiri Monday!

Feb. 15, 2018

Information about the Machiiro app forchecking how much money is coming,
Nonstop TV program of Fuji TelevisionNov. 7, 2016

Interview with the HOPE, INC. president inMichishirube, Nihon Keizai Shimbun

Apr. 23, 2018

Information about HOPE, INC. on the TV Asahi
Bakumon Fund! Money Success Graph

Jan. 10, 2017

Interview with the HOPE, INC. president in
Dash Venture, Nihon Sangyo Shimbun

May 21, 2018

HOPE, INC. president featured in a daily column on
business executives in the Nihon Keizai Shimbun

Jan. 16, 2017

Interview with the HOPE, INC. president inFuji Sankei Business i.

Oct. 31, 2018

Information about a HOPE, INC.’s Halloween event on
NHK TV programs Rokuichi! Fukuoka, NHK News 7,
News Watch 9, and News 11

Feb. 23, 2017

Interview with the HOPE, INC. president in
God of Happiness Diary, Kabushiki Shimbun

Dec. 1, 2019

Information about HOPE, INC. in an article
about innovative companies in Nikkei Veritas

Mar. 24, 2017

Included in The First Companies 2017,an article about newly listed companies

Jan. 31, 2020

Information about the condolence guidebookof HOPE, INC’s Machilet, Chunichi Shimbun

May 12, 2017

Included in Gatchiri Monday! The Secret of
Making Money on 40 Little Known Companies

Sep. 4, 2020

Interview with the HOPE, INC. president on the Nikkei
CNBC program Hiru Express

Aug. 3, 2017

Interview with the HOPE, INC. president in CEOs Explain
Management Strategies, Nikkei Sangyo Shimbun

Copyright (C) 2022 HOPE, INC.

64

Disclaimer
Information in this presentation includes forward-looking statements that are based on thecurrent outlook, forecasts and assumptions vulnerable to risk factors. As a result, thisinformation incorporates uncertainties that may cause actual performance to differ from thesestatements.

Risk factors and uncertainties include economic trends in Japan and other countries, such aschanges in industries and markets, interest rates, and foreign exchange rates.

HOPE, INC. has no obligation to update or revise for ward-looking statements in thispresentation even in the event of new information or events.

- IR contact HOPE, INC.

E-Mail: ir@zaigenkakuho.com
URL: https://www.zaigenkakuho.com/en/ir

Copyright (C) 2022 HOPE, INC.

65