FY2022 Q3 Financial Results
Ending December 2022

November 11, 2022

Frontier Management Inc.

Table of Contents

Section 1

FY2022 Q3 Financial Results

Section 2

Our Various Progress

Section 3

Corporate Profile

1Section 1

FY2022 Q3 Financial Results

FY2022 Q3 Financial Results

Summary: Full-year consolidated earnings forecasts revised upward- Management consulting and M&A businesses are performing well, and the full-year consolidated earnings forecast is revised upward(detailed in P10).
- Management consulting business remained strong due to the effect of increased staff and an increase in new products- The M&A business remained strong as large-and medium-sized M&A projects were steadily completed.
- Successful measures to strengthen organizational sales and expand cross-selling between management consulting and M&A- The number of employees largely achieved the initial plan for fiscal 2022 (including those who received informal bids)- Increase the dividend payout ratio target from 30% to 40% (announced at the time of 2Q financial results) in order to enhance returns toshareholders and expand the shareholder base
- Strengthen sustainability initiatives (decide and disclose basic policies, materiality, and promotion systems)(JPY Mil.)FY2021
3Q results

Net sales

FY2022
3Q results

YoY change(amount)

YoY change(ratio)FY2022
Forecasts(Feb. 10, 2022)

FY2022
Achievement rate
Revised
Forecast To the Revised Forecast
To the Initial Forecast
Achievement rate

(Nov. 11, 2022)

3,892

5,889

1,997

151%

7,000

84%

8,000

74%

Operating income

76

679

603

893%

800

85%

1,000

68%

Ordinary income

85

696

611

819%

800

87%

1,000

70%

Net Income

49

351

302

716%

500

70%

600

59%
3

FY2022 Q3 Financial Results

Net Sales by Business Segment (Cumulative)- Management consulting business: Maintained strong performance due to the effect of increased staff and an increase in new products- Revitalization support business: Needs for revitalization support do not materialize- M&A advisory business: Strong progress in organizational structure and steady success of large-and medium-sized M&A deals(JPY Mil.)

7,000
Other Business

120

6,000
5,000

2,113
63

4,000

1,066

3,000

294

509
2,000

M&A advisory business(27% of total, 198% YoY)

Revitalization Support Business(13% of total, 58% YoY)

Management Consulting Business

3,361(58% of total, 149% YoY)

2,254

1,000
0

(2% of total, 190% YoY)

(FY)

2021 3Q

2022 3Q

4FY2022 Q3 Financial Results

Quarterly Sales Trends (1/2)- Achieved record-high consolidated net sales for the third quarter following the first and second quarters

2,225

Other
M&A advisory business
Revitalization Support Business
Management Consulting Business

1,747

1,697

1,625

958
576

1,502

659
1,329

1,100

(JPY Mil.)

1,057
953

811

554

(FY)

126

73

819
706

254

121

371

53
64

361

385

374

400

443

1Q

2Q

3Q

4Q

1Q

2015

752
612

392
347

299
102

822

52

374

30

100

61

358

435

629

513

858

416

49

138

65

98

226

298

303

325

373

2Q

3Q

4Q

1Q

447

480

509

2Q

3Q

4Q

2017

574

1Q

451

449

2Q

3Q

4Q

2018

543

335

214
212

203

1Q

440

2Q

529

504

485

3Q

4Q

1Q

2019

2Q

3Q

2020

76

167

896
649

153

129

89

131

315

567

579

1,311
259

104

65

470

472

302

230
99

757

1,253

1,092

859
403

277
40

1,190

41

349

2016

403

359
314

914
534

1,114

1,035

993

983

1,214

1,160 1,174

1,126

933
824

1,916

1,849

715

4Q

631

1Q

1,026

1,137

1,051

1,173

727

2Q

3Q

2021

4Q

1Q

2Q

3Q

2022
5

FY2022 Q3 Financial Results

Quarterly Sales Trends (2/2)- Record-high sales in the third quarter for both the Management Consulting Business and the M&A Advisory business(JPY Mil.)

1,200

Management Consulting Business
Revitalization Support Business

1,000

M&A advisory business

800

600

400

200

Year on year 99%

0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(FY)

2015

2016

2017

2018

2019

2020

2021

2022
6

FY2022 Q3 Financial Results

Weekly changes in the total amount of orders received, which will be net sales for the fiscal year under review- Significantly higher than previous years.
※M&A and other incentive fees reflect fixed or highly definite deals.
(JPY Mil.)

Weekly changes in the total amount of orders that will become net sales (net sales*) for the fiscal year under review

7,000
6,500

FY20226,000

FY20215,500

FY20205,000

FY2019

4,500
4,000
3,500
3,000

2,500
2,000
1,500
1,000
500
0
Fixed

49th week

45th week

41st week

37th week

33rd week

29th week

25th week

21st week

Week 17

13th week

9th week

The fifth week

First week

* Net sales exclude subcontracting costs and introduction fees from net sales.

7

FY2022 Q3 Financial Results

PL Overview- Personnel expenses have increased due to continued active recruitment, but due to the effect of increased sales exceeding this, both net sales,
operating income, ordinary income, and net income have been at the highest level since the listing as a cumulative 3Q.
(JPY Mil.)

2021FY
3Q results
Net sales

2022FY
3Q results

YoY change(ratio)

3,892

5,889

151%

3,816

5,210

137%

Outsourcing costs, etc.

124

254

205%

Personnel expenses

2,805

3,551

127%

Recruitment costs

181

391

216%

Other expenses

705

1,014

144%

76

679

893%

Ordinary income

85

696

819%

Current net income for the quarter before
income taxes and minority interests

85

643

756%

Quarterly income attributable to owners ofparent

49

351

716%

(Internal Selebrain JPY 273 Mil.)

Operating expenses

Operating income(Internal Selebrain JPY 35 Mil.)

Highest 3Q performancesince listing8

FY2022 Q3 Financial Results

BS Overview- Total assets increased due to an increase in cash and deposits, an increase in goodwill following the acquisition of Celebrane stocks, and anincrease in lease and guarantee deposits due to the expansion of the floor space at the head office.
- Total liabilities increased due to borrowings in consideration of the cost of capital when establishing Frontier Capital.
(JPY Mil.)- Total net assets increased due to an increase in quarterly net income attributable to owners of the parent.

End of Dec. 2021

End of September 2022

YoY change (amount)

Current assets

2,998

4,426

+1,428Fixed assets

821

1,287

+466

Total assets

3,819

5,722

+1,903Current liabilities

1,282

2,123

+841

Fixed liabilities

82

789

+707

2,397

2,707

+310

54

101

+47

Total liabilities andnet assets

3,819

5,722

+1,903

Cash and deposits

1,784

3,219

+1,435-

1,312+1,312△1,784△1,907-123

Shareholders' equity
Other net assets

Interest-bearing debt
Net Debt

9

FY2022 Q3 Financial Results

Preannouncement for the whole financial- Investments exceeded expectations due to various measures, but earnings forecasts were revised upward due to strong business growth.

Breakdown of revised full-year forecast (operating income)(JPY Mil.)

+436

1,000

800

-191

Forecast as of Feb.
2022

Investment businessstart-up expenses-45

Office expansion
costs

Increase in revenue
due to business

Revised forecast asof Nov. 2022

10

Section 2

Our Various ProgressOur Various Progress- Continue measures to strengthen recruitment of outstanding human resources to strengthen the organizational foundation- Achieved the initial plan of 330 employees in fiscal 2022
Tokyo Stock
Exchange
Prime

Number of employees at End of Fiscal Year
Frontier Capital

Celebrein

369
10

22

337*

153

159

172

(YoY change rate)

+4%

+8%

(FY)

2014

2015

ssive hiring strategy

24

Tokyo Stock
Exchange First
Section Listing

TSE Mothers
Listing(Number of
employees)

354

177

153

165

-11%

+8%

+7%

+28%

2016

2017

2018

2019

227

255

+12%

+19%

2020

2021

* Number of employees as of November 11, 2022 includes informally announced employees and planned retirements
In the medium-term management plan announced in February 2021, the number of employees at the end of the fiscal year 2023 was 350

2022
As of
Nov. 2022

330
+29%

2022
Plan
As of
Feb. 2022
12

Our Various ProgressContinuous growth of new businesses in the consulting business
Sales of New Businesses(JPY Mil.)

450
400

Cross-border Management Support Dept.
Manufacturing Re-engineering Support Division

350

Digital Strategy Dept.

300

Corporate Value Strategy Department (IR/SR)

250

GRC (Governance/Risk/Compliance) Office

200
150
100
50
0
(FY)

2021 1Q

2022 1Q
2Q

3Q

4Q

2Q

3Q
13

Our Various Progress

Number of large-and medium-sized projects recorded as sales in the M&A advisory business- Steady acquisition of large-and medium-sized projects and execution of projects aimed at further booking sales
Number of projects booked as sales
Number of medium-sized projects (from ¥50 million to ¥100 million)
Number of large-scale projects (¥100 million or more)

1～3Q
Cumulative
total

11

6

(Number)

(FY)

6

10

3

5

3

3

2015

2016

10
7

2
2017

4

2018

* Net sales exclude subcontracting costs and project introduction fees from net sales.

5

2019

5
1

1

2020

2021

2022 3Q
14

Our Various Progress

Order backlog in M&A advisory business- Order backlog reached a record high for 3Q following 1Q and 2Q(JPY Mil.)

M&A Advisory Business Year-end Order Backlog

3,000

2,500

2,000

1,500

1,000

500

0
(FY)

2018
1Q

2019
2Q

3Q

4Q

1Q

2020
2Q

3Q

4Q

1Q

2021
2Q

3Q

4Q

1Q

※"Order backlog" is calculated for projects with a high degree of certainty, but there are cases where contracts do not result.

2022
2Q

3Q

4Q

1Q

2Q

3Q
15

Our Various Progress

Composition of M&A Advisory Business Projects- Promoting the Establishment of a System that Can Acquire Highly Difficult Projects

Composition Ratio of Mandates Acquired Projects by Scale (Value Basis)
2021FY

2022FY
Small-scale
projects(Less than JPY50 Mil.)

Large andmedium-sized
projects(JPY50 Mil. or more)

Small-scale
projects(Less than JPY50 Mil.)

Large and medium-sized
projects(JPY50 Mil. or more)

FY2022: 1 to 3Q
16

Our Various Progress

Revitalization: External environment- The number of bankruptcies and the amount of total debt in Japan has been on a downward trend since around 2000

Trends in number of bankruptcies of Japanese enterprises and total liabilities(Number)

25,000(JPY Tri.)30

Amount of debt (right scale)24

20,000

Number (left scale)

19,16425*In 2022
Jan-Sep Cumulative

15,000

17
14

14

14

14

8

9

7

8

15

12

12

10,000

5,000

20

8

6

0

7

6

6

7

7

10

6,030

4

4

*4,645

3

2

2

2

3
1

1

1

1

2

5
0

Years

Source: Prepared by Frontier Management from Tokyo Shoko Research, Ltd. HP data

17

Our Various Progress

Progress of Frontier Capital- Final adjustment phase with multiple financial institutions for investment financing at present- Steadily Strengthening the Organizational Foundation of the Personnel System as an Investment Company- In FY2022, we will make upfront investment to strengthen the management system, resulting in a deficit of JPY190 Mil.

Strengthen personnel structure as an investment company

End of Sep. 2022

End of Dec. 2022
Plan

Managing Director

8

8

Staff

4

5

Managing Director

4

5

Staff

3

4

19

22

Divisions

Position

Front
Management(Number of
Personnel)

Total

Including concurrent staff

18

Our Various Progress

Initiatives for Sustainability- From this fiscal year, we plan to regularly disseminate Frontier Management's sustainability initiatives.
In 2022
Sep.

Oct.

Nov.

Dec.

In 2023
Jan.

Feb.

Mar.

Initiatives

Sustainability

Establishment of Sustainability Promotion Committee
Project Management

Basic Policy
Promotion Organization
Materiality
Determined after the Board of Directors

Incorporation into the Code of Conduct, Guidelines, andEvaluation System

Roppongi Head Office
Switched to renewable energy

TCFD response

In HP

Publication

Considering joining TCFD Forum

Human capital

・Women Empowerment
・LGBT
・Difficulties, Others

・DE&I Promotion Committee established・To consider joining related organizations

Establishment after identification of materiality
Incorporation into and improvement of the Code of
Conduct, Guidelines, and Evaluation System

Disclosed
in CG
ReportReview and improvement of internal systems, etc.

19

Our Various Progress

Initiatives for Sustainability
Frontier Management Sustainability Policy
Since its foundation, the Frontier Management Group has operated under the management philosophy of "Contributions tothe benefit of clients" "Contributions to the benefit of stakeholders" and "Contributions to society"
Our Group will contribute to a rich global environment and a sustainable society by gathering the wisdom of our diverse
professionals and helping our customers solve their management issues. At the same time, we will realize the sustainablegrowth and development of our Group.

Important Themes and Materiality

Key Sustainability Theme

Materiality①Deepening diversity and acceptanceDiversity of Human Resources
and Establishment of Expertise②Continued investment in human capital③Development and production of management personnel④Contributing to a society where people make the most of their individuality

Contributing to thetransformation of society andbusiness⑤Fostering business ethics

Strengthening corporate growthpotential and resilience⑧Enhancing the long-term value of client companies⑥Promoting the Transition to a Carbon-Decarbon, Recycling-Oriented Society⑦Contributing to Regional Revitalization⑨Pursuit of a Sound Governance System

Sustainability Promotion
Organization
Board of Directors
Representative Director
Sustainability Promotion
Committee
Chairman: Masahiro Matsuoka(Representative Director)
Members: Heads of Major
Organizations

20

Our Various Progress

TCFD Initiatives
Switching the power used at the head office to renewableenergy sources
Frontier Management Domestic
SitesSeparateCO2Emissions

12.7

Osaka Branch (left scale)

Mobile communications business

10.0

Nagano Branch (left scale)

Ad Agencies

4.4

General Electric

9.6

General trading company

9.0

Automobiles (passenger cars)

7.1

100.0

Banks (city banks)

2.5

Consulting firm (Scpe-1,2)

1.5

Frontier Management (Scpe-1,2)0.4(t-CO2 per person)

Per employee (right scale)
2.3

96.5

2.2

105.9

0.6

2.8

0.5

2.6

80.0

0.5

0.4

0.4

60.0
40.0

t-CO2 per employee (industryaverage)

IndustryComprehensive construction

Total(t-CO2)Average t-CO2 per employee (reference)

Shift to
Green 0.3
power
Sep. 0.2
2022

100.9

91.6

20.0

0.1

0.0

0.0

2020

2021

(FY)

Source: Only companies that have disclosed Nikkei Value Search/company HP, compiled by FrontierManagement from the most recently disclosed materials

Frontier Management's Carbon Emissions KPI
KPI

Fiscal 2020
Results

Fiscal 2021
Results

Targets forfiscal 2030

Scope1,2
t CO2

96.5

105.9

-

0.4

Compared to
FY 202150% reduction

Scope1,2
t CO2
従業員一人当たり0.5

FY2050Targets

Virtually zero21© 2022 Frontier Management Inc.

Section 3

Corporate Profile

Corporate Profile

Background of Establishment
Representative Director

Representative Director

Shoichiro Onishi

Masahiro Matsuoka•After registering as an attorney with the Tokyo Bar
Association in 1992 (44th term), joined the law firm of
Okuno & Partners and was appointed as a partner in
1997.
•Engaged in the corporate reorganization proceedingsof Japan Lease, Life Co., Ltd., and The Taisei Fire &Marine Insurance Co., Ltd. as an acting trustee orother capacity.

•After working at Nomura Research Institute, Ltd. andBarclays Bank PLC, joined UBS Securities Japan Ltd,and was subsequently appointed concurrently as
Head of Equity Research and Managing Director in
1999.
•Engaged as an equity analyst with the retail industry
for a total of 10 years.

JoinedJoinedIndustrial Revitalization Corporation Japan
OnishiEngaged in turnaround projects as an auditor in Mitsui Mining
Co., and a director in Kanebo, Ltd. and The Daiei, Inc.

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

Jointly established in 200724

Corporate Profile

Business
Management Consulting

M&A Advisory◆ Business analysis and strategy formulation◆ Business due diligence (BDD)◆ Medium-term business plans andmanagement, finance, and business strategies◆ Support for drafting/reform of DX strategy◆ Support for corporate value improvement✓ SR/IR strategy and responses to activist shareholders✓ ESG/SDGs strategies and climate change actions✓ Promotion of diversity and inclusion (D&I)◆ Support in implementing plans◆ Support for governance, compliance and risk
management

Management Executive Support◆ Management execution support including
dispatch of CxO◆ Domestic and overseas PMI support based on
hands-on approach◆ Support for management reforms for business
revitalization◆ M&A deal advisory (including cross-border
M&As)✓ Drafting of strategies, preparation of longlists, andapproach of target companies✓ Corporate valuation

Management
Consulting

M&A
Advisory

Management
Executive
SupportBusiness
Revitalization✓ Support for contract negotiations and closing◆ Post M&A consulting (PMI)◆ Business succession consulting

Business Revitalization◆ Support for rehabilitation procedures◆ Emergency PMO management support◆ Support for business and financial restructuring◆ Support for the adjustment of interests among
stakeholders

25

Corporate Profile

Customer Segments
Providing services to diverse industries.

IT
2%

Others8%

Retail and

Financewholesale24%

9%
Infrastructure
10%

Restaurant andIndustrial goods

services18%
manufacturers
21% Consumer-productproducers8%
Result of FY2021

26

Corporate Profile

History
FY2007FY2011FY2012

Establishment
Established a Chinese subsidiary (Frontier Management (Shanghai) Inc.)
Opened a branch in Singapore to strengthen cross-border M&A

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

FY2017

New York Branch opened to strengthen cross-border M&A
Launched fund business to provide funding support services to customers

FY2018FY2019Listed 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)

FY2020Changed to TSE First Section

FY2022

Capital and business alliance with Celebrain Corporation (Our ownership ratio is 60%)
Established Frontier Capital Inc.
Transitioned to the TSE Prime Market

27

Corporate Profile

Organizational Chart for Directors
Frontier Management Inc.
Corporate Strategy Department
Management Consulting Department
Management Executive Support Department
M&A advisory Department

Representative
Director

Corporate Sales Department
Industry Research Department

Business Development Department
Company Planning and Administration Department

BranchGroup Companies / Associated Companies

Osaka
BranchNagoyaBranchFrontier Management(Shanghai) Inc. (100%subsidiary)Singapore
BranchNew York
BranchCelebrain Corporation

Frontier CapitalInc.
FCD Partners Inc.

(Joint Venture Company with theDevelopment Bank of Japan)

28

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

Management
Philosophy

Contributions to the benefit of stakeholders- By offering well balanced solutions, we work for the benefit of business owners andmanagers, employees, business partners, customers, creditors, and otherstakeholders.

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

29

Corporate Profile

Corporate Information
Company Overview

Business Descriptions

Company Name

Frontier Management Inc.

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)

Websitehttps://www.frontier-mgmt.com

Officers, etc

Representative Director,
Co-President and Executive Officer
Representative Director,
Co-President and Executive Officer

Shoichiro Onishi

Director of the Board
Deputy President and Executive Officer

Tad Komori

1. Management Consulting
2. M&A Advisory<FAX>+81-3-6862-8611

3. Management Executive Support
4. Business Revitalization Support
Professional Composition Ratio

Masahiro Matsuoka

Outside Director of the Board
Outside Director of the Board

Kazuhito Osugi
Keiko Unotoro

Statutory Auditor
Auditor
AuditorTakeshi Umemoto
Kazuhiko Shimokobe
Nobumichi Hattori

Senior Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Toshi Mitsuzawa
Sumio Nishizawa
Akinori Nishida
Masaya Yajima
Shinji Hikoe
Hitoshi Kuriyama
Tomohiro Murata
Hiroaki Hamada

No. of employees

336 (consolidated)

as of end of Sep. 2022

BranchOsaka Branch
Nagoya Branch
Singapore Branch
New York BranchGroup Companies

Frontier Management (Shanghai) Inc.
Frontier Capital Inc.
Celebrain Corporation

AssociatedCompanies

FCD Partners Inc.

Business
Companies
19%

Financials
Institutions
22%

OthersLegal

1%Counsel1%✓ Composed of experts tomanagement such as legal
counsel, CPA, tax accountant,consultants, industry analysts,
Certified Public
and persons involved in banking,Accountant / Tax
enterprises and others.
✓ Form the best team of experts to
Accountant
each customer’s challenge and12%
propose comprehensive
solutions.

Consultant /Analyst45%

As of end of December 2021

30

Handling of this material◆ This material contains forward-looking statements, plans for the future, and management objectives related to us. These forward-looking
statements are based on current assumptions about future events and trends, and there can be no assurance that such assumptions will always
be accurate. A number of factors could cause actual results to differ materially from those described in this document.
◆ Unless otherwise indicated, the financial data presented herein is presented in accordance with accounting principles generally accepted inJapan.
◆ Regardless of the occurrence of future events, we will not necessarily revise the forward-looking statements that have already been made,except as required by disclosure rules.
◆ Information about companies other than ours relies generally on publicly available information.

©2022 Frontier Management Inc. All rights reserved. The copyright of this material belongs to Frontier Management Corporation.

31