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Assisting companies to continue and prosper through M&A

15.5.2020

IR ReportFinancial Results Report for FY2019

Year to March 2020 TSE 1st Section ２１２７

The information included in this presentation, such as industry trends and analysis, future plans and forecasts, is based on data available at the time of release. As the operating environment is subject to risks of large changes and uncertainties we make no guarantees regarding future plans or forecasts.

Nihon M&A Center

Copyright©2020 Nihon M&A Center Inc. All rights reserved. 1

Table of contents

Our Vision P02

To Become the Top Global Integrated M&A Company P03

Overview of FY2019 Results P04

Original Forecasts Versus Actual Results P05

Income Statement Key Data P06

Sales and Profit by Business Segment P07

Balance Sheet Key Data P08

Transaction Volumes P09

Number of Transactions Closed P10

Number of Employees P11

Paid-in Stock Options and Performance Targets P12

10-year Results Record P13

Number of Transactions Closed in Q4 １/３-３/３ P14

FEATURE（１）-１ P17

FEATURE（１）-２ P18

FEATURE（２） P19

FEATURE（３） P20

FEATURE（４） P21

Dividend Payments and Market Capitalization P22

Dividend Per Share P23

Share Ownership P24

Forecasts for FY 2020, our response tothe spread of the coronavirus and its impact P25

Company Overview P26

Introduction P27

Corporate Profile (End-March 2020) P28

Corporate History P29

Business Model A Platform for the M&A Market P30

Initiatives to Optimize our Information Network P31

Our Workflow as an M&A Intermediary P32

Becoming an Integrated M&A Company P33

Our Organization Structure （from April 2020） P34

New Organization Structure (１） P35

New Organization Structure（２） P36

Human Resources Training P37

Human Resource Development Plan P38

Sustainability P39

CSR Initiatives P40

Distribution of the Age of Owners & Changes

in the Average Age of Retirement P41

Strong Increase in Succession Outside Family P42

Future Projections for the Numbers of

Companies and Workers P43

M&A Market Potential P44

Lastly P45


Our Vision

Aiming to become the top global integrated M&A companyBecame Japan’s top M&A intermediary companyStart-up phase

1991 2001 2011 2021 (year)

Became Japan’s topM&A intermediary company

TSE Mothers listing in 2006

TSE 1st Section listing in 20071991

founding

「 Aiming to become the

top global integrated

M&A company 」


To Become the Top Global Integrated M&A Company

Top market capitalisation in the M&A sector

Market capitalisationMotivation, personal development, remuneration

Employee satisfaction

Integrated solutionsProviding a full range of services, including PMI, strategic, financial and HR planning, as well as every kind of related activity

Expanding operations from very small customers to large ones (in different space

from investment banks) increasing our global presence

Broad coverage

Eight leading qualities related to M&A that our group

is aiming to achieve

*Our aim is not to gain top rankings in league tables or among investment banks – it is to become the top global integrated company by achieving the eight qualities described above.

Number of mandated projects, number of transactrions closed

Number of projects

Valuation, execution

Quality control

Creating new industry standardsfor M&A

Innovation

Optimal matching and post-merger integration

Customer satisfaction


Overview of FY2019 Results

Full-year

sales and ordinary profit at record highs

FY2019 FY2018 Change (yoy)

Pro

fita

bility

Sales (¥mn) 32,009 28,463 + 12.5％

Ordinary profit (¥mn) 14,467 12,533 + 15.4％

Gro

wth

Total number of employees ５８２ 451 + 29.0％

Transactions closed

* Counting sell-side and buy-side mandates separately.

８８５ 770 + 14.9％


Original Forecasts Versus Actual Results

Full-year ordinary profit : +15.4% yoy(For 10 consecutive years we exceeded original forecasts)

13,300

16,880

21,390

26,700

32,400

14,778

19,069

24,625

28,463

32,009

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

当初予想

実績

Sales Ordinary profit

6,710

8,000

10,000

12,50013,500

7,116

9,070

11,670

12,533

14,467

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

当初予想

実績

(¥mn)

Original forecast

Actual result

(¥mn)

Original forecast

Actual result

FY2015 FY2016 FY2017 FY2018 FY2019FY2015 FY2016 FY2017 FY2018 FY2019


Income Statement Key Data

(¥mn, %)

FY2019（Full-year Results） YoY

FY2019（Full-year Forecast）

FY2018（Full-year Results）

Total % % Total % Total %

Sales 32,009 100.0 +12.5％ 32,400 100.0 28,463 100.0

(of which M&A sales) (31,191) (97.4) (27,965) (98.3)

Cost of sales 12,557 39.2 11,351 39.9(of which referral fees and outsourcing expenses) (4,748) (14.8) (4,328) (15.2)

(of which personnel and transportation costs) (7,714) (24.1) (6,857) (24.1)

Gross profit 19,452 60.8 17,111 60.1

SGA expenses 5,204 16.3 4,578 16.1

Operating profit 14,247 44.5 +13.7％ 13,500 41.7 12,533 44.0

Non-operating income 228 0.7 21 0.1

Non-operating expenses 7 0.0 21 0.1

Ordinary profit 14,467 45.2 +15.4％ 13,500 41.7 12,533 44.0

Extraordinary gain 214 0.7 - -

Extraordinary loss 0 0.0 17 0.1

Pretax profit 14,681 45.9 12,515 44.0Tax (corporation tax & other) 4,442 13.9 3,648 12.8

Net profit 10,239 32.0 +15.5％ 9,120 28.1 8,867 31.2

Both sales and profits at record highsFull-year ordinary profit : +15.4% yoy


FY 2016 FY 2017 FY 2018 FY 2019

Total % Total % Y o Y Total % Y o Y Total % Y o Y

Sales ① 19,069 100.0% 24,625 100.0% 129.1% 28,463 100.0% 115.6% 32,009 100.0% 112.5%

Direct costs*1 ② 2,745 14.4% 3,716 15.1% 135.4% 4,493 15.8% 120.9% 4,842 15.1% 107.8%

Gross profit (before unallocated cost of sales}

16,324 85.6% 20,909 84.9% 128.1% 23,969 84.2% 114.6% 27,167 84.9% 113.3%

M&A sales 18,800 100.0% 24,321 100.0% 129.4% 27,965 100.0% 115.0% 31,191 100.0% 111.5%

M&A cost of sales*2 2,604 13.9% 3,578 14.7% 137.4% 4,328 15.5% 121.0% 4,748 15.2% 109.7%

M&A gross profit 16,195 86.1% 20,742 85.3% 128.1% 23,636 84.5% 114.0% 26,442 84.8% 111.9%

Other sales 269 100.0% 304 100.0% 113.1% 497 100.0% 163.5% 818 100.0% 164.5%

Other cost of sales 140 52.1% 137 45.1% 97.9% 164 33.1% 120.0% 94 11.5% 57.1%

Other gross profit 128 47.9% 167 54.9% 129.6% 332 66.9% 199.2% 724 88.5% 217.6%

Unallocated cost of sales*3 ③

4,233 22.2% 5,413 22.0% 127.9% 6,857 24.1% 126.7% 7,714 24.1% 112.5%

Gross profit（①-②-③） 12,090 63.4% 15,495 62.9% 128.2% 17,111 60.1% 110.4% 19,452 60.8% 113.7%

Sales and Profit by Business Segment

Breakdown of consolidated

sales and gross profit by M&A and other

*1 Direct costs include M&A cost of sales (referral fees, outsourcing expenses) and other cost of sales

*2 M&A cost of sales consists of referral fees and outsourcing expenses

*3 Unallocated cost of sales includes personnel costs, transportation costs, other

(¥mn)


Balance Sheet Key Data

(¥mn, %) End-March 2020 % Change End-March 2019

I Current assets 25,737 58.1 8,249 17,488

Cash and deposits 21,279 48.0 7,783 13,495

Other current assets 4,458 10.1 465 3,992

II Fixed assets *18,558 41.9 408 *18,149

Total assets 44,296 100.0 8,657 35,638

【資産】

(¥mn, %) End-March 2020 % Change End-March 2019

I Current liabilities 7,487 16.9 987 6,499

II Long-term liabilities 865 2.0 -1,008 1,874

Total liabilities 8,353 18.9 -20 8,373

Interest bearing liabilities 1,500 3.4 -1,000 2,500

Net assets 35,943 81.1 8,678 27,264

Retained earnings 35,753 80.7 6,550 29,203

Total liabilities and net assets 44,296 100.0 8,657 35,638

Maintaining a healthy balance sheet

Assets

Liabilities and net assets

*of which

long-term

deposits

14,000


Transaction Volumes

FY2016 FY2017 FY2018 FY2019

Full year

1Q 2Q 3Q 4QFull year

1Q 2Q 3Q 4QFull year

１Q 2Q 3Q 4QFull year

1

Total number of

transactions closed (by

number of companies) *1524 173 207 151 118 649 173 212 220 165 770 234 285 224 １４２ 885

1-1Cumulative total for the

financial year- 173 380 531 649 - 173 385 605 770 - 234 519 743 ８８５ -

2-1Number of sell-side

transactions closed262 83 104 76 60 323 89 106 106 81 382 118 145 114 ７２ 449

2-2Number of buy-side

transactions closed262 90 103 75 58 326 84 106 114 84 388 116 140 110 ７０ 436

2-3

Other transactions

closed

(eg restructuring)

- - - - - - - - - - - - - - - -

3-1 M&A sales (¥mn) 18,800 6,422 6,985 6,343 4,570 24,321 5,867 8,268 8,228 5,601 27,965 7,520 9,814 8,249 ５，６０６ 31,191

3-2M&A sales/transaction

(¥mn) *235.9 37.1 33.7 42.0 38.7 37.5 33.9 39.0 37.4 33.9 36.3 32.1 34.4 36.8 39.4 35.2

4-1Total number of transactions

closed *1267 91 105 76 60 332 89 110 115 88 402 119 145 114 73 451

4-2Cumulative total for the

financial year- 91 196 272 332 - 89 199 314 402 - 119 264 378 451 -

5

Number of sell-side

mandates pending

completion700 710 750 810 880 880 950 1,030 1,070 1,100 1,100 1,300 1,370 1,410 1,450 1,450

6Number of new sell-side

mandates624 760 986 ９１５

(Units:numberof deals,

million yen)

Both full-year transactions closed and sell-side mandates pending completion at record highs

Full-year transactions closed : +14.9% yoy (770 ⇒ 885)

*1 The total number of transactions closed by number of companies represents the sum of the number of completed sell-side and buy-side mandated transactions;the total number of transactions closed represents the number of transactions in which we were involved.

*2 This number represents M&A sales (including retainers and other fees) divided by the number of transactions closed (number of companies)


Number of Transactions Closed

The number of transactions closed has been increasing steadily,

recording a historical high

338

420

524

649

770

885

0

100

200

300

400

500

600

700

800

900

2015/3期 2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

Number of transactions closed

(Unit: transaction volume)

FY2015 FY2016 FY2017 FY2018 FY2019FY2014


End-Mar

2017End-Mar

2018End-Mar

2019End-Mar

20201 May2020

M&A consultants, specialists※1

217 264 328 390 415

Supportstaff ※1

45 55 88 138 178

⚫ Administrationheadquarters,Internal auditoffice

21 18 35 54 41

Total 283 337 451 582 634

283

337

451

582634

0

100

200

300

400

500

600

700

2017/3

期末

2018/3

期末

2019/3

期末

2020/3期

期末

2020年

５月１日

Number of Employees

Number of employees

646

Including number of people

newly hired and yet to start

at May 1

※２

※２

Strong increase in headcount, reaching 634 on May 1+29.0％ yoy （451→582）at Mar 31

➡ Fulfilling medium-term growth plan with buoyant M&A

※1 The definitions of M&A consultants/specialists and Support staff included in the total number of employees is as follows.

M&A consultants, specialists: sales personnel (including at subsidiaries); Mid-cap Support Office members; legal and accounting professionals specialized in M&A transaction support

Support staff: employees in corporate planning department, training department, internal sales, sales support in subsidiaries, IT support, Office of the President

※2 From Q1 FY2020 the cost of staff in IT support and the Office of the President (15 in total as at 1 April) has been included under Cost of Sales rather than SGA and so the headcount now comes under Support staff.

* Seconded employees are not included in the number of employees shown above

Graduate recruitment scheme impact from FY2018.

End ofFY2016

1 May2020

End ofFY2017

End ofFY2018

End ofFY2019

(Unit: Number of people)

＋12

SGA expenses

Cost of sales


PeriodConditions on ordinary profit

(annual)

Ratio of exercisable paid-in stock options

Notes on ordinary income

1. FY2018Over

11.5 billion yen

¥12.53 bn With (1) and (2)

30％ of all paid-in stock

options allotted2. FY2019

Over

12.5 billion yen ¥14.46 bn

3. FY2020Over

13.5 billion yen

30% of all paid-in stock options allotted

4. FY2021Over

15 billion yen

40% of all paid-in stock options allotted

Paid-in Stock Options and Performance Targets

Achieved FY2020 ordinary profit target (￥13.5 billion) in FY2019

➡ Aiming for early achievement of ￥15 billion target

FY2018 result

FY2019 result

* The maximum share issuance from paid-in stock options is equivalent to 2.7% of outstanding shares, exercisable on or after 1 July 2022

* In the event that ordinary income dips below 9 billion yen at any time between FY2018 and FY2021 the paid-in stock options cannot be exercised (regardless of other conditions)


3,655 5,008

6,005 7,214

10,547

12,227

14,778

19,069

24,625

28,463

32,009

1,376 2,171 2,834 3,437

5,496 6,310

7,116

9,070

11,670 12,533

14,467

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2010/3期 2011/3期 2012/3期 2013/3期 2014/3期 2015/3期 2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

売上高

経常利益

10-year Results Record

10th consecutive period of higher sales and profit

Reach ¥5 bn

(¥mn)

Sales

Ordinary profit

Reach ¥10 bn

FY2018FY2016FY2015FY2014FY2013FY2012FY2011 FY2017FY2009 FY2010 FY2019


Number of Transactions Closed in Q4 (1/3)

Selling company Acquiring companyTransaction type

Industry classification Region Industry classification Region

1 Metal parts wholesale Kansai Metal parts wholesale Kanto Stock transfer

2 Manpower dispatching Kansai Manpower dispatching Kanto Stock transfer

3 Truck transportation Chugoku, Shikoku Truck transportation Kyushu, Okinawa Stock transfer

4 Electric components manufacturing Kanto Electric components manufacturing Kanto Business transfer

5 Hospital Hokkaido, Tohoku Hospital Hokkaido, Tohoku Equity scheme

6 Packaging materials wholesale Kanto Packaging materials wholesale Kanto Stock transfer

7 Printing Kanto Printing Kanto Stock transfer

8 Clinic Kansai Clinic Kansai Business transfer

9 Customised software development Tokai, Hokuriku Customised software development Kanto Stock transfer

10 Civil engineering contractor Kansai Other construction work Chugoku, Shikoku Stock transfer

11 Property related services Hokkaido, Tohoku Property development / sales Kanto Stock transfer

12 Restaurants Kanto Restaurants Kanto Stock transfer

13 Nursing and welfare Kanto Manpower dispatching Kanto Stock transfer

14 Web marketing Kanto Warehousing Kanto Other

15 Manpower dispatching Kansai Manpower dispatching Kansai Stock transfer

16 Restaurants Kansai Restaurants Kansai Stock transfer

17 Corporate services Chugoku, Shikoku Truck transportation Hokkaido, Tohoku Stock transfer

18 Metals product wholesale Kanto Metals product processing Kansai Stock transfer

19 Mold manufacturing Kanto Printing Kanto Stock transfer

20 Plant engineering Kanto Pipe contractor Kanto Stock transfer

21 Pharmaceutical related Kanto Food manufacture Kansai Stock transfer

22 Pharmacy / drugstore Hokkaido, Tohoku Pharmacy / drugstore Kanto Stock transfer

23 Education Kyushu, Okinawa Education Kanto Stock transfer

24 Pharmacy / drugstore Chugoku, Shikoku Pharmacy / drugstore Kansai Business transfer

25 Hospital Hokkaido, Tohoku Hospital Kanto Equity scheme

73 transactions closed, 142 by number of companies




26 Construction materials wholesale Kyushu, Okinawa Construction materials wholesale Kyushu, Okinawa Stock transfer

27 Plant engineering Kansai Civil engineering contractor Kanto Stock transfer

28 Truck transportation Kansai Truck transportation Tokai, Hokuriku Stock transfer

29 Sales promotion KantoDaily goods manufacturing /

wholesaleKoshinetsu Stock transfer

30 Printing Tokai, Hokuriku Printing Tokai, Hokuriku Stock transfer

31 Civil engineering contractor Chugoku, Shikoku Property management / sale Chugoku, Shikoku Stock transfer

32Daily goods manufacturing /

wholesaleTokai, Hokuriku Furniture wholesale Tokai, Hokuriku Stock transfer

33 Construction rental / leasing Tokai, Hokuriku Construction rental / leasing Kanto Stock transfer

34 Civil engineering contractor Koshinetsu Civil engineering contractor Hokkaido, Tohoku Stock transfer

35 Education Kyushu, Okinawa Education Kyushu, Okinawa Stock transfer

36 Building construction Kanto Property development / sales Kanto Stock transfer

37 Daily goods manufacturing Kanto Metals product processing Kanto Stock transfer

38 Food wholesale Tokai, Hokuriku Food wholesale Kanto Stock transfer

39 Restaurants Kanto Food retail Kansai Stock transfer

40 Pharmacy / drugstore Tokai, Hokuriku Pharmacy / drugstore Kanto Stock transfer

41 Customised software development Kanto Customised software development Kansai Stock transfer

42 Pharmacy / drugstore Chugoku, Shikoku Pharmacy / drugstore Kansai Stock transfer

43 Daily goods wholesale Kanto Chemical manufacturing Hokkaido, Tohoku Stock transfer

44 Can sheet metal Kyushu, Okinawa Slaes promotion Kyushu, Okinawa Stock transfer

45 Pharmacy / drugstore Kyushu, Okinawa Pharmacy / drugstore Kyushu, Okinawa Stock transfer

46 Exterior finish work Kanto Building construction Tokai, Hokuriku Stock transfer

47 Electrical and telecoms contractor Kansai Electrical and telecoms contractor Kansai Stock transfer

48 Truck transportation Tokai, Hokuriku Truck transportation Kanto Stock transfer

49 Warehousing Kansai Warehousing Kansai Stock transfer

50 Cosmetics manufacturing Kanto Cosmetics manufacturing Kanto Stock transfer





51 Hospital Tokai, Hokuriku Hospital Kanto Equity scheme

52 Building construction Chugoku, Shikoku Building construction Kyushu, Okinawa Stock transfer

53 Recycling business Tokai, Hokuriku Other retails Kansai Stock transfer

54 Interior finish work Koshinetsu Interior finish work Koshinetsu Stock transfer

55 Automotive retail Kanto Automotive retail Tokai, Hokuriku Stock transfer

56 Construction related services Koshinetsu Construction related services Kanto Stock transfer

57 Plant engineering Tokai, Hokuriku Pipe contractor Kanto Stock transfer

58 Agricultural product manufacturing Kyushu, Okinawa Other wholesale Kyushu, Okinawa Stock transfer

59 Pipe contractor Hokkaido, Tohoku Pipe contractor Hokkaido, Tohoku Stock transfer

60 Beauty salon Kansai Beauty salon Kansai Stock transfer

61 Resin parts processing Kansai Resin parts processing Kansai Stock transfer

62 Proprietary software development Tokai, Hokuriku Customised software development Koshinetsu Stock transfer

63Daily goods manufacturing /

wholesaleKansai

Daily goods manufacturing / wholesale

Kansai Stock transfer

64 Civil engineering contractor Hokkaido, Tohoku Civil engineering contractor Kanto Stock transfer

65 Civil engineering contractor Hokkaido, Tohoku Civil engineering contractor Hokkaido, Tohoku Stock transfer

66 Electric components manufacturing Kanto Electric components manufacturing Kansai Stock transfer

67 Printing Kanto Printing Kanto Stock transfer

68Daily miscellaneous goods

manufacturingChugoku, Shikoku Furniture wholesale Kansai Stock transfer

69 Electrical and telecoms contractor Tokai, Hokuriku Electrical and telecoms contractor Tokai, Hokuriku Stock transfer

70 Civil engineering contractor Koshinetsu Civil engineering contractor Koshinetsu Stock transfer

71 Pharmacy / drugstore Kanto Pharmacy / drugstore Hokkaido, Tohoku Business transfer

72 Property management / sale Hokkaido, Tohoku Property management / sale Hokkaido, Tohoku Stock transfer

73 Architect Kanto Architect Kanto Stock transfer



To revitalize regional economies it is important to ensure:Continuity of local SMEs and maintenance of employment through succession planning

Establishment of great companies to attract the younger working population

FEATURE（１）-1

Helping to revitalize regional economies

Revitalizing regional economies

Japan Investment Fund

Supporting growth

TOKYO PRO MarketSponsoring listing

Enhance trust through IPO

Creatingwinners

Attractingworkers

Businesssuccession

Maintainingemployment

Strategy

1

Strategy

2

Tw

o s

trate

gie

s


FEATURE （１）-2

TOKYO PRO Market listing sponsorship

Complete first IPO as J-Adviser

Company Name Agent Inc.<7098>

Industry Staffing services

Increasing opportunities for new M&A projects through creatingsustainable relationships with mid-cap companies

Our actual results of listing support J-Adviser contracts progress

◼ 23 December 2019

One of our sponsored companies promoted to TSE Mothers

◼ 28 April 2020 First company IPO

In 7 months since our launch

23J-Adviser mandates secured

➡ Preparing for IPOs

We wish to help invigorate TOKYO PRO Market, supporting companies to aspire to growth as they progress to other stock markets, expand overseas and launch new businesses

J-Adviser target “To reach 100 mandates” （by March 2023）

Company Nameglobal bridge HOLDINGS Co., Ltd.<6557>

Industry Childcare, Nursing care, ICTTPM： Launched in 2009.

34 companies are now on the TPM section as of May 15, 2020.


5070

110

192

352

0

50

100

150

200

250

300

350

400

16/3期末 17/3期末 18/3期末 19/3期末 20/3期末

2,538 2,709

7,039

24,436

42,834

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

16/3期末 17/3期末 18/3期末 19/3期末 20/3期末

FEATURE （2）

Promoting training for M&A support specialists and greater knowledge of M&A → Target large increase in transactions completed

User registrations Transactions completed

Strong increase in the cumulative number of registered users and

transactions completed. The total number of companies for sale has

exceeded 2,000 for the first time.

TransactionsPeople

End-Mar2016

End-Mar2017

End-Mar2018

End-Mar2019

End-Mar2020

End-Mar2016

End-Mar2017

End-Mar2018

End-Mar2019

End-Mar2020


FEATURE （3）

Opening of Shin-Nihonbashi office

New head office for our subsidiary Corporate Value Laboratory Inc. and office for ISR （internal sales division）

⚫ Support for family time（childcare, nursing）

System for working at home, paid leave for nursing children, extension of period for part-time work

⚫ Work-life balance supportSystem for flexible work times

⚫ Female employee ratio ９１．7％（end-March 2020)

Example of Improving Employment Practices(Corporate Value Laboratory Inc.)

Enabling us to increase staff and diversify working practices as we expand our fields of business

▲ CEO Kyoko Yonezawa


What size sellers does Nihon M&A Center support ？

90% is composed of companies with sales of 2 billion yen or less.

We offer different services according to a company’s size.

➡ The focus is on M&A support for small- and medium-sized companies.

There are numerous potential clients.

Sales in a seller Number of employees in a seller

More than 5 to 10

employees, 20.2％

5 employees or less, 11.5％

More than 20 to 30

employees, 10.8％

More than 30 to

50 employees,

15.0％

100 m yen or less,

7.5％

More than 100 m to

200 m yen,

18.1％

More than 200 m to

300 m yen,

16.0％

More than 300 m to 400 m yen,

9.9％

Calculated from deals closed in FY 2019


14.4％

More than 50 to

100 employees,

8.1％

Average : 785 million yen, Median : 392 million yen

FEATURE （4）

More than 1 bn

to 2 bn yen,

9.6％


8.5％

More than 700 m to

1 bn yen,

7.7％

More than 2 bn yen,

8.3％

Average : 30 employees, Median : 16 employees

More than 10 to 20

employees, 29.7％

More than 100 employees,

7.6％


1,000

2,000

3,000

4,000

5,000

6,000

7,000

1,959

2,481

3,295

3,699

4,239

40.5 40.2 40.3

41.741.1

30

32

34

36

38

40

42

44

46

48

50

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

（％）

配当総額

配当性向

Dividend Payments and Market Capitalization

Aiming for sustained long-term growth

Dividends and the pay-out ratio Market capitalization（From end-Apr 2015)

※To be determined at the general meeting of stockholders.

※ (¥bn)(¥mn)

DividendsPay-out Ratio

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019


9.75

13.5

17.00

22.00

23.00

4.75

6.75

8.50

11.00 11.00

0.00

5.00

10.00

15.00

20.00

25.00

2016/3期 2017/3期 2018/3期 2019/3期 2020/3期

（予想）

Unit:¥

中間配当実績

期末配当実績

当初年間配当予想

当初中間配当予想

Year-end dividend （forecast）

26.00

Dividend Per Share

Dividend forecast at start of year

Dividend paidPay-out

ratio

(%)Dividend Breakdown Dividend Breakdown

FY 2019

(forecast)23.00 yen

Interim １１.00 yen

Year-end 12.00 yen

Interim 11.00 yen

Year-end 15.00 yen41.1%

FY 2018 22.00 yen11.00 yen

11.00 yen23.00 yen

11.00 yen

12.00 yen41.7％

FY 2017 17.00 yen8.50 yen

8.50 yen20.50 yen

8.50 yen

12.00 yen40.3％

FY 2016

13.50 yen6.75 yen

6.75 yen15.50 yen

6.75 yen

8.75 yen40.2％

FY 2015

9.75 yen4.75 yen

5.00 yen12.25 yen

4.75 yen

7.50 yen40.5％

Year-end dividend

12.25

Year-end dividend

15.50

Year-end dividend

20.50

Year-end dividend

23.00

An increased dividend than original forecast for FY2019 has been announcedConsolidated payout-ratio : 41%

※1 Adjusted for two-for-one share splits on 1 Oct 2016 and 1 Apr 2018

26.00 yen

※２ To be determined at the general meeting of stockholders

※2 ※2

※2

Actual FYE dividends

Actual interim dividends

Original forecasts for annual dividends

Original forecasts for interim dividends

FY2015 FY2016 FY2017 FY2018 FY2019(forecast)

※2


Share Ownership

Foreign share ownership has now risen to 51.6%

Number of shareholders : 17,823

number of shares issued : 166,022,800

Foreign

51.6％ Financial institutions

24.8％

Individuals19.5％

Other Corporations2.3％

Treasury stock1.8％Other Corporations

2.7％

Treasury stock1.8％

Foreign

46.8％ Financial institutions

26.4％

Individuals22.3％

31 March 202030 September 2019

（of which trust banks and

life insurance companies circa 26％）

Number of shareholders : 16,229

number of shares issued : 166,065,200

（of which trust banks and

life insurance companies circa 24％）


Forecasts for FY 2020, our response tothe spread of the coronavirus and its impact

Forecast for year to March 20211

Principal responses to problems arising from the coronavirus 2

Impact of the coronavirus3

Meaningful calculations about the impact of the coronavirus are currently difficult. We shall announce full year forecasts as soon as there is sufficient certainty for doing so.

The priority is to ensure the wellbeing of our stakeholders. We are conducting our business in a way to minimise any risk of infection for our clients, partners and employees.

（We remain flexible to consider new measures depending on changing circumstances)

⚫ Postponement or cancellation of M&A seminars ⇒ Preparing webinars

⚫ Implementation of remote working

We encourage discussions with clients and contact with partner firms through methods such as video meetings and telephone conference calls.

We encourage use of cloud storage and virtual data rooms to exchange confidential documents and conduct due diligence.

⚫ Commencing preparations for increase in corporate restructuring projects

⚫ In April there was a growth yoy in the number of new mandates from buyers and sellers

⚫ With uncertainty over reduction in the coronavirus infection rate, however, from May onwards it is unclear how many transactions will be completed and new mandates gained

Company Overview


Introduction

Nihon M&A Center established as the leading M&A intermediary

firm between small and mid-cap companies

Enable long-term growthAchieve high

profitability

Help revitalize

regional economies

External environment

Business succession planning becomes a

chronic concern

Rising pace of industries restructuring

Wider understanding of growth strategies

M&A needs will intensifyin the future.

Rising concerns about employment

and socio-economic impacts*

The use of a unique M&A information network

Over 400 professional M&A consultants

A database with many years of accumulated information

Efficient collection of information for transactions

Strong ability to find appropriate partners

Strong ability to find appropriate partners

* According to Ministry of Economy, Trade and Industry (METI), ignoring business succession issues will lead to corporate failures such that in the space of a decade there could be the loss of 6.5 million jobs and a ¥22 trillion reduction in GDP

Rising of social needs.


Company name Nihon M&A Center Inc.

Established April 1991

Business outline M&A support for small and medium-sized enterprises (SMEs)

RepresentativesChairman and founder Yasuhiro WakebayashiPresident Suguru Miyake

Offices

Domestic 7：Tokyo headquarters, Osaka branch, Nagoya branch, Fukuoka branch, Sapporo sales office, Hiroshima sales office, Okinawa sales office

Overseas 3：Singapore office, Indonesia representative office, Nihon M&A Center Vietnam co., LTD

Paid-in capital ¥2.5 billionNumber of

shares issued 166,065,200

Market listingTokyo Stock Exchange

1st sectionStock code 2127

No. of employees(consolidated)

582（excluding 6 full-time directors）

Breakdown ofemployees by type

Consultants 390Other 192

Corporate Profile (End-March 2020)

Leading company in M&A intermediary services with a track record of over 5,000 completed transactions


Corporate History

2016年 4月

TPM（TOKYO PRO Market）

sponsor license

Createoverseasoffices

TSE 1st section

listing

TSE Motherslisting

Network of

regional financial

institutions

⚫ Chairman Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan. They had responsibility for sales of computers nationally to accounting firms and regional financial institutions. The current M&A network has evolved from their network at that time.

⚫ We established a nationwide M&A study group to expand our network with regional banks

⚫ formed a business alliance with Shinkin Central Bank, followed by a roll out of similar alliances with its subsidiary Shinkin Capital and shinkin banks throughout Japan

⚫ Nihon M&A Center Inc. was founded with eminent certified public accountants and tax accountants nationwide at the core. Accounting offices throughout the country were organized into a network of regional M&A centers.

⚫ Shares were listed on the TSE Mothers Stock Exchange on 10 October 2006.

⚫ The company's stock was transferred from TSE Mothers to 1st Section on 10 December 2007 (a year and two months from listing on TSE Mothers, the fourth fastest such transfer) We were

May 2000

October 2006

April 1991

899 regional M&A centers as at end-March 2020

Alliances with 98 regional banks and 215 shinkin banks as at end-March 2020.

This was the first listing of a company in Japan specializing

in M&A intermediary services for SMEs.

⚫ Start first overseas office in Singapore

⚫ Open Indonesia representative office （October 2019）

⚫ Form company in Vietnam （February 2020）

⚫ Commence IPO support service

December 2007

2019年 7月

★We have been profitable since the second year ofour history and have continuously paid a dividend

Company

founded

Prior to our

founding

1st inJapan

1st inJapan We were the first M&A intermediary services firm to list on the

TSE 1st Section.


Business Model A Platform for the M&A Market

Se

lle

rs

Info

rmatio

n

Bu

ye

rs

Regional financial institutions

Accounting firms

Seminars, websites, direct mail

Large financial institutions,venture capital,

private equity and consultancies


313 nationwide

⚫ 90% of regional banks and 80% of shinkin banks

899 regional

M&A centers nationwide

Dire

ct in

fo

rmatio

n

Info

rmatio

nD

irect in

fo

rmatio

n

Nihon M&A Center

Top M&A information network

Large financial institutions,venture capital,

private equity and consultancies



313 nationwide

⚫ 90% of regional banks and 80% of shinkin banks

Accounting firms

899 regional

M&A centers nationwide

Seminars, websites, direct mail

Collaboration agreement figures as of end-March 2020


Initiatives to Optimise our Information Network

Collaboration agreements

with 98 (out of a total of 102)

899 Regional M&A centers

Large financial institutions

⚫ Nationwide M&A workshops for top tier regional banks

⚫ Bank of the Year award system

⚫ Branch manager training

⚫ Seminars for customers

⚫ M&A senior specialists training school

⚫ Monthly emails on projects

⚫ Secondment to us (circa 300 up to now)and vice versa

⚫ M&A newsletter

Accounting firms

Regional banks Shinkin banks

Lawyers,

accountants,

experts

Management consultants

Venture capitalPrivate equity funds

⚫ Business alliance with Shinkin Central Bank (Shinkin Capital)

⚫ Developing joint projects with Shinkin Capital

⚫ Events for information exchange branded “Shinkinbank family”

⚫ Award system

⚫ Seminars for customers

⚫ M&A senior specialists training school

⚫ Receiving seconded employees

⚫ M&A newsletter

Collaboration agreements

with 215 (out of a total of 255)

⚫ Secondment programme⚫ Head office senior management motivational discussions⚫ Training for branch managers

⚫ Merger and Acquisition Association of Japan membership benefits⚫ Support for future members

⚫ Mutual secondment programme

⚫ M&A senior expert training school

Collaboration agreement figures as of end-March 2020

⚫ Promotional materials for branch employees⚫ Seminars for customers⚫ Regular events to exchange information

⚫ Award system⚫ M&A senior specialists training school ⚫ M&A newsletter

• Regular meetings (international, management level, regional)

• Variety of workshops (future leadership; sales; corporate succession strategy)

• Publication of M&A news and journals

• Support for holding seminars

• Distribution of posters and pamphlets

Nihon M&A Center


Our Workflow as an M&A Intermediary

BuyerSeller

Presenting investment memorandum

Signing of confidentiality agreement

Explanation of teaser (anonymous)

Signing of advisory agreement

Provision of detailed information

Due diligence

Signing of letter of intent

Negotiation of price & terms

Management meeting, site visits

Negotiation of final terms

Signing of definitive agreement

Completion, settlement, announcement

Preparation of investment memorandum

Preparation of teaser (anonymous)

Company analysis, sector research, selection of potential buyers

Valuation

Provision of materials

Signing of advisory agreement

Consultation

Retainer

fee

Interim

fee

Retainer

fee

Success

fee

Success

fee

Nihon M&A Center


Becoming an Integrated M&A Company

Nihon M&A Center becoming a hub for specialized high quality group companies

M&A support services

Internet

matching

Private equityfunds

Nihon M&A Center

Batonz Co., Ltd.

Yano Research Institute Ltd.

Corporate Value Laboratory Inc.

Japan PMI consulting Inc.

Japan Private

Equity Co., Ltd.

Japan Investment

Fund Inc.

Full M&A support services

PMI consulting services

Internet matching service for micro enterprises

Private equity fund supporting business

succession

Private equity fund to support growth strategy

PMINegotiation,

closing

Introductions, dialogue with

principalsCompany valuation

Start ofproject

Market researchSuccession and asset consulting

ZUUM-A

Media

platform

operator

Information services

Corporate valuation

Launched July 2019

Business succession,

growth strategy consulting

market research

(Joint venture

with ZUU)

（Joint venture with

Kyodo News Group）(Joint venture with

Aoyama Zaisan Networks)

(joint venture with Development Bank of Japan)

(joint venture with Development Bank of Japan)

Business Succession Navigator Inc.


AdministrationH.Q.

Board of Executive Officers

ITS

olu

tion

sD

ep

t.

Co

rpo

rate

Ad

vis

ory

Offic

e

Me

dic

al

&N

urs

ing

Care

De

pt.

Ind

ustria

lR

estru

ctu

ring

De

pt.

Le

gal

Ad

vis

ory

Offic

e

Dire

ct

Mark

etin

gD

ep

t.

Co

rpo

ratio

ns

De

pt.

Chairman

Board of Directors

IRO

ffice

AccountingCh.

StrategyMgmt. Div.

ＴＰＭDiv.

Co

rpo

rate

Pla

nn

ing

Offic

e

Tra

nsactio

nM

gm

t.S

ec.

Mid

-Cap

Su

pp

ort

Se

c.

Law

ye

r / Ju

dic

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criv

en

er

Stre

ng

the

nin

g o

f m

atc

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CP

As /

Tax a

cco

un

tan

ts

Fo

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ind

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org

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Me

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are

Dire

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ote

ntia

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Dire

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ark

etin

g

Ne

two

rk s

earc

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r p

ote

ntia

l bu

ye

rs

Priv

ate

eq

uity

M&

A

Pro

mo

tion

of M

&A

g

row

th s

trate

gy

Co

ord

inatio

n w

ith la

rge

fin

an

cia

l institu

tion

s

Co

ord

inatio

n w

ith

acco

un

ting

offic

es

Co

ord

inatio

n w

ith re

gio

nal

finan

cia

l institu

tion

s

Cu

sto

me

r satis

factio

n,

sale

s p

rom

otio

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R

Info

rmatio

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ms,

IT d

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mark

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⚫IP

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po

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IPO

pro

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⚫B

us. d

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me

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⚫A

SE

AN

pro

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⚫O

utb

ou

nd

M&

A p

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otio

n

StrategyPromotion

Mgmt.Div.

HR FirstMgmt.Div.

AllianceMgmt. Div.

RegionalFinancial

InstitutionsCh.

LargeFinancial

InstitutionsDiv.

General Planning H.Q.

Acco

un

tan

tsD

ep

t.

Re

gio

nal

Fin

an

cia

lIn

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tion

sD

ep

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Larg

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Acco

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Stra

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Eq

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De

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ep

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Allia

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sD

ep

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ISR

Offic

e

Pro

ject

Activ

atio

nS

ec.

Sales H.Q.

IndustryFocusDiv.

CorporateAdvisory

Mgmt. Div.

Hu

man

Re

so

urc

es

De

pt.

Ge

ne

ral

Affa

irsD

ep

t.

Acco

un

ting

De

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Related GroupCompanies

H.Q.

InternationalDiv.

IR

、ESG

Pro

mo

tion

for

ne

w m

an

date

s

Insid

e s

ale

s

Exam

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ss

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Activ

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id-c

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an

ies

Our Organization Structure （from April 2020）

⚫S

trate

gy P

rom

otio

n⚫

Co

rpo

rate

Bra

nd

ing

⚫H

R s

trate

gy

⚫D

eve

lop

me

nt S

up

po

rt

Shareholders Annual General Meeting

Audit and other committees

President

Internal Audit Office

President Mgmt. H.Q.

Transaction Mgmt. Div.

Matc

hin

gM

gm

t.S

ec.

Sale

sP

lan

nin

gD

ep

t.


Improvedmatching

Industry segment specialisation

Direct contact with corporates

Collaboration with securities firms/ large banks/other financial

institutions

Collaboration with accountants/regional financial institutions

Sales Headquarters

Alliance Management Division

Strategy Management Division

Industry Focus Division

Added valuecreation

Generation of many first classmandates from our network

New Organization Structure (１）

Large FinancialInstitutions Division

Team for large financial institutions becomesone of 4 sales divisions

Strengthening of origination, the core growth driver

Independent sales division from FY 2020

⚫ Accountants

⚫ Accountants Information Development

⚫ Regional Financial Institutions

⚫ Large Financial Institutions

⚫ Corporations

⚫ Alliances

⚫ GrowthStrategy

⚫ Private

Equity

⚫ Industry Strategy

⚫ Direct Marketing

⚫ Industrial Restructuring

⚫ Medical and Nursing Care


New organisation structure（２）

⚫ Reduction of lead times in our mandates through greater accuracy of preparation phase and matching efficiency

⚫ Review of slow-moving projects

⚫ Strengthening of operational structure

⚫ Promoting mid-cap marketing

⚫ Increasing pipeline of opportunities

⚫ Building more local contact

New sales methodsOutbound M&A

promotion

Human resourceoptimization

Impeccable execution

TPM Division International Division

Human Resources FirstManagement Division

TransactionManagement Division

⚫ Strategic recruitment

⚫ Improved mentoring

⚫ Nurturing corporate

culture and identity

⚫ Evaluation of support

staff

⚫ Female work practices

⚫ Promotion of diversity


Human Resources Training

It takes 6-12 months to get an overall understanding of M&A, but we always have several M&A transactions on the go, enabling employees to gain a lot of practical experience in a short space of time

Subsidy system for training of new recruits and further development of key employees

Internal training External training

Training for new recruits Improvement for every level Regular training

⚫ Understanding of our company and management principals of our chairman

⚫ M&A project flow

⚫ Creating company profiles

⚫ Company valuation

⚫ Matching of companies

⚫ Use of databases for projects

⚫ Role playing

⚫ Success and failure analysis

⚫ M&A special structures

⚫ M&A by industry type （when required）

⚫ M&A related tax/legal regulation change

⚫ Sales technique

⚫ Off-sites with senior management

⚫ Future generation leadership

⚫ Leaders training

⚫ Presentations and public speaking.

Monthly training⚫ Compliance

⚫ Information security systems

Annual training⚫ Overseas visits（high performers）

⚫ Management principals explanation meeting・Training for all employees

⚫ Dale Carnegie course

⚫ Management training

⚫ Coaching

⚫ Ritsumeikan University Saionji leadership course

⚫ Lee Kuan Yew School of Public Policy short graduate programme

Education

subsidies

Training inexperienced employees to develop quickly into M&A specialists

Training M&A specialists to reach a more senior level

⚫ Bookkeeping Level 2⚫ Business succession,

M&A expert qualifications

⚫ Public accountant, tax accountant,social security officer,SME advisor and equivalents

⚫ Contribution to cost of purchase of specialist textbooks

⚫ English conversation


Human Resource Development Plan

A layered approach for thoroughness. We aim to achieve fast results from the training

layer

０

layer

1

layer

2

layer

3

layer

4Creating and implementing growth strategies for our company.

General managers and above.

Voluntary applicants and selected employees from fourth year of entry to assistant general manager level.

Reiwa trainingGaining knowledge through collaboration

between colleagues throughout the firm

Gaining practical knowledge and developing a

high-level perspective by vision sharing with

senior executives and management

Senior executives

Management

Future leaders

Selected new recruits

All new recruits

For

Goal

Senior executive officers and above.

Deepening awareness of future leadership responsibilities.

For

Goal

For

Goal

Developing a high-level perspective and receiving the education necessary to carryout one's role as a top-class businessperson.

Gaining management skills.

For

Goal

30 selected front office consultants with up to three years of experience at the company

To understand fully and put into practice our corporate knowledge culture, maximizing the performance of each individual

Core to strengthened training plan

Evaluation

Management interviews

Senior level offsites

Future leader offsites

（次世代管理職研修）We now provide training for newly appointed

administrative staff members internally rather than outsourcing – enabling to be tailored

to the company needs.

Selection of group leadersGaining management skills as group leader.

training for future administrators

Executive offsites

Management meetings

Gaining knowledge through collaboration between colleagues throughout the firm

“Challenge-Reiwa” training(Encourage refreshment of skills outside office hours)

For

Goal

Front office consultants with up to three years of experience at the company

Gaining ability to get advisory mandates from potential clients


Sustainability

Environmental Social and Governance (ESG) practice

Important topics Our main policiesEn

v

Society orientatedtowards recycling

Decreasing the environmental burden ⚫ Use of public transport, promoting use of IT, reduction of unnecessary printing

So

cia

l

Employment practices

Employee satisfaction

⚫ Employee reviews（twice per year), “secret letter” to CEO system、ranked fourth in the category of employee satisfaction in the 2018 Fisco institutional investor and analyst industrial research award（published on 18 February 2019)

Respect for human rights and promotion of diversity

Discrimination prohibited; promotion of activities by females; medium-term target of 30% for female employees across the group

System for increasing motivation ⚫ Stock option plan

Promotion of communication ⚫ Subsidies for events including tennis, basketball, 5-a-side football and running

Health and safetyCreation of a safe and healthy workplace

⚫ Health and stress checks, subsidies for spouse health checks, vaccinations to prevent influenza, health advice from occupational health and safety specialist

Human development Education system ⚫ （See pages 37-38 of this document）

Go

ve

rnan

ce

Corporate governance

Corporate governance systemRatio of 1:3 of non-executive directors, corporate governance system（ https://www.nihon-ma.co.jp/corporate/businessbase.html ）, establishment of committees for audit and other

Internal control systemEstablishment of internal regulatory system （ https://www.nihon-ma.co.jp/ir/pdf/report_governance1906.pdf ), strict scrutiny of M&A projects

10 guiding principals for compliance behaviour

⚫ Periodic training for all employees in the 10 selected guiding principals for compliant behaviour

Internal communication system ⚫ Employee communication protocols codified

Risk managementRisk management committee ⚫ Creation of risk management committee

Response to incidents⚫ Objectives （１）No highly serious incidents to occur （２）Strive to prevent

occurrence of incidents

Information securityInformation security maintained andISO27001accredition

⚫ Implementation of information security systems and oversight policies

⚫ Information security policy created （https://www.nihon-ma.co.jp/corporate/security_policy.html）

⚫ ISO27001international standard obtained ※All domestic branches, foreign offices excluded

https://www.nihon-ma.co.jp/corporate/businessbase.html

https://www.nihon-ma.co.jp/ir/pdf/report_governance1906.pdf


CSR Initiatives

Our commitment to support amicable M&A contributes to the sustainable growth ofsociety by reinforcing mangement foundations and growth in employment

Other activities contributing to society

・Donations following natural catastrophes・Education support (scholarships) in areas impacted by natural

catastrophes・Cultural sponsorship（support for young artists in film production,

Noh, opera,photography and other)・Protection of designated Cultural Properties

Overview of our group CSR policaies

"Continuously improving our corporate value"

Enhancing the social contributions of our business operations through activities that involve corporate citizens

Clients

Partners

Global environmentEmployees

Shareholders

Business activities

Social issues

Activities with corporate citizens

Creating value

Providing solutions to

social issues

through business activities

Regional communities

¥

After 3 years¥945.5bn

Avoidance of

economic loss

¥338bnEmployment creation

25,310 people

In FY2018 we acted as an

M&A intermediary for 339 companies

After 5 years¥１,522.7bn

In 10 years¥2,801.1bn

FY2018 contribution to avoidance of economic loss ※1

Sell-side advisor for 339 transactions in which combined turnover of companies sold was ¥293.3bn

※1 Source: Yano Research Institute Ltd

“Contributing to sustainable social development"

Developing business operations to solve social

issues


Source: White Paper on Small and Medium Enterprises in Japan (26 April 2019)

Distribution of the Age of Owners & Changes in the Average Age of Retirement

Highest average age category of SME owners has risen to 69 (Figure1)Rising average retirement age (Figure 2)

0

5

10

15

20

25

15～19 20～24 25～29 30～34 35～39 40～44 45～49 50～54 55～59 60～64 65～69 70～74 75～79 80～

（%）

2015年2010年2005年2000年1995年2018年

61.3

66.1

67.5 67.8 67.762.6

68.1

69.870.7 70.5

56

58

60

62

64

66

68

70

72

30年以上前 20～29年前 10～19年前 5～9年前 0～4年前

（事業承継時間）

小規模事業者

中規模企業

The peak in owners average age has risen from 47 to 69 in 23 years

Age distribution of SME owners (in 5-year categories) Changes in owners average retirement age

Source: Small and Medium Enterprise Agency, Discussion forum for corporate revitalization, focus on succession (1st in series)

Data source: Corporate Profile Database (COSMOS 2) by Teikoku Databank, Ltd

Note: Since ages are in 5-year categories the peak on the chart is the same in 2015 and 2018, but underlying data shows the peak to have increased by three years in this period.

(Age)

(Age)

Small companies

Medium-size companies

5-910-1920-29Over30 0-4

Time of succession (number or years ago)


親族内承継

Strong Increase in Succession Outside Family

Succession outside family has increased to over 65%

Source: Small and Medium Enterprise Agency, Discussion forum for corporate revitalization, focus on succession (1st in series)

Relatives Children Relatives who are not children

OtherDirectors/employees who are not relatives

Outsiders

Shift in background of company presidents viewed by length of term of office

9.2

7.4

9.6

12.4

9.3

14.5

9.5

7.6

3.7

6.5

11.7

9.1

12.1

17.6

24.4

26.4

3.7

3.7

3.2

5.5

11.7

10.9

20.6

39.3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Relatives

35 - 40 years

30 - 35 years

25 – 30 years

20 – 25 years

15 – 20 years

10 – 15 years

5 – 10 years

0 – 5 years

Other 65.7％

83.5

82.5

75.5

73

66.9

57

45.5

26.7


Future Projections for the Numbers of Companies and Workers

Number of companies to decrease by 830,000

within the next 10 years

*Basis for calculation: end-2015 = 100%

End-2015End-2020

End-2025

End-2030

End-2035

End-2040

Number of companies

(,000)

4,025 3,607 3,195 3,103 3,014 2,956

100% 90% 79% 77% 75% 73%

Working population

(,000)

58,457 55,054 51,460 49,553 47,693 45,981

100% 96% 89% 86% 83% 80%

Working age

population(,000)

77,282 74,058 71,701 68,754 64,942 59,777

100% 96% 93% 89% 84% 77%50%

60%

70%

80%

90%

100%

2015年 2020年 2025年 2030年 2035年 2040年

企業数

就業人口数

生産年齢人口数

4.03 million companies

in 2015

*Includes individual business proprietors

3.2 million companies

in 2025

Sources : Numbers of companies and workers - Estimates of Future Numbers of Companies and Employees by Region, Yoshiaki Murakami, Naomi Kodama and Yoshio Higuchi, from Financial Review published June 2017 by the Policy Research Institute, Ministry of Finance, JapanWorking age population - Regional Population Projections for Japan“ (statistics from 2018)Estimates of Future Numbers of Companies and Employees by Region - Population Decline and Local Economies, by the Policy Research Institute, Ministry of Finance, Japan

Number of companies

Working age population

Working population

2015 2020 2025 2030 2035 2040


EmployeesNumber ofcompanies

Ratio of companies

with no successor

Number of companies

with no successor

Sales per M&A

transaction

M&A market

sizeOur position/initiative

100～300 48,673 × 48.40％＝ ¥23,558 ¥50 mn

¥23

trillion

New market to developTaking measures to

increase our presence

20～99 535,783 × 63.00％＝￥350,151 ¥30 mn

Established with dominant network

Expanding presence as top brand

1～19 3,003,013 × 75.00％＝￥2,252,260 ¥5 mnMostly domain of

our subsidiary BatonzHigh growth segment

M&A Market Potential

Note： These estimates are based on data from sources including Small and Medium Enterprise Agency, Ministry of Internal Affairs and Communications,

METI、Teikoku Data Bank, as well as Nihon M&A Center completed transactions in April 2016 – September 2019

There is a potential market in excess of ¥20 trillion

Business succession potential market estimate

In addition, M&A arising from restructuring of industries and growth strategies, unrelated to business succession（20% of our sell-side transactions completed in FY2018 were for companies with a CEO under 50 years old）


⚫ Contact ： https://www.nihon-ma.co.jp/action/contact/⚫ IR page URL： https://www.nihon-ma.co.jp/ir/⚫ English website URL ： https://www.nihon-ma.co.jp/en/about/investors/

Lastly

Management principles Company goal

Increase in market value together with stability and growth in dividends

Return profits to shareholdersIncrease market value

Assisting companies to continue and prosper through M&A

We aim to increase market value through high profitability

and growth

Management priority on adherence to compliance and corporate social responsibilityBuilding up higher level governance structure

Ⅰ. Management principles

Ⅱ. To investors

assisting companies to continue and prosper …...assisting companies to continue and prosper...

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