Results of Operations for the First Quarter of the … › ir › pdf › 160810_information2.pdfforecast for six months: 61.6% Changes in quarterly results of ordinary income Progress

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. We make no

guarantees regarding future plans or forecasts since the operating environment is subject to

risks and uncertainties, meaning it could change substantially in the future.

http://www.nihon-ma.co.jp/

TSE1st section: 2127

Results of Operations for the First Quarter

of the Fiscal Year Ending Mar 31, 2017 July 29, 2016

Assisting companies to grow and prosper through M&As

Nihon M&A Center Inc.

(ｃ) Nihon M&A Center Inc. https://www.nihon-ma.co.jp/

7,214

10,547

12,227

14,778

16,880

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2013/3期

（実績）

2014/3期

（実績）

2015/3期

（実績）

2016/3期

（実績）

2017/3期

（予想）

3,437

5,496

6,310

7,116

8,000

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2013/3期

（実績）

2014/3期

（実績）

2015/3期

（実績）

2016/3期

（実績）

2017/3期

（予想）

Long-term Changes in Operating Results

Break our highest profits for seven consecutive periods in FY2016

Changes in Sales (¥mn) Changes in Ordinary Income (¥mn)

FY2011 FY2012 FY2013 FY2014 FY2015 FY2012 FY2013 FY2014 FY2015 FY2016 (Forecast)

FY2016 (Forecast)

1


Medium-term Management Objectives Issuance of paid-in stock options whose terms for exercise are linked to operating results

Ratio of exercisable paid-in stock options is

linked to ordinary income achieved

Period Ordinary income (annual) Ratio of exercisable paid-in

stock options

(1) FY2015 or

FY2016

Over 8 billion

yen 30% of all paid-in stock options

allotted

(2) FY2017 Over 9 billion


allotted

(3) FY2018 Over 10 billion


allotted

* However, when ordinary income dips below 6 billion yen even once, between FY2015 and FY2018,

these paid-in stock options cannot be exercised regardless of the abovementioned conditions.

2


5,280

6,500 7,850

11,000

13,300

6,005

7,214

10,547

12,227

14,778

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2012/3期 2013/3期 2014/3期 2015/3期 2016/3期

当初予想

実績

2,200

3,000

3,700

5,750

6,710

2,834 3,437

5,496

6,310

7,116

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012/3期 2013/3期 2014/3期 2015/3期 2016/3期

当初予想

実績

Actual Results and Forecasts

Actual results exceeded forecasts for the sixth consecutive period

Changes in Sales (¥mn) Changes in Ordinary Income (¥mn)

Original forecast

Actual results

FY2015 FY2011 FY2012 FY2013 FY2014

Original forecast

Actual results

FY2015 FY2011 FY2012 FY2013 FY2014

3


733

1,199

1,399

1,959

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2013年3月期 2014年3月期 2015年3月期 2016年3月期 FY2012 FY 2013 FY 2014 FY2015

4

Payout ratio

40.5％

Payout ratio

35.4％ Payout ratio

35.9％

Payout ratio

35.3％

Changes in Total Dividends and Market Capitalization

Changes in Total Dividends (mill. yen) Changes in Market Capitalization (mill. yen)

Long-term Satisfactory Progress

(ｃ) Nihon M&A Center Inc. https://www.nihon-ma.co.jp/ 5

Summary of Income Statement

(Million yen, percent)

FY2016 （1Q Results）

YoY FY2016

（Interim forecasts）

FY2015 （1Q Results）

FY2015 (Full-year Results)

Total % % Total % Total % Total %

Sales 4,351 100.0 125.5 7,808 100.0 3,466 100.0 14,778 100.0

(M&A sales) （4,282）（98.4）（3,412）（98.5） (14,542) (98.4)

Cost of sales 1,334 30.7 1,031 29.8 5,318 36.0

(Referral fees and outsourcing expenses) （524）（12.1）（396）（11.4） (1,996) (13.5)

(Personnel and transportation costs) （764）（17.6）（598）（17.3） (3,208) (21.7)

Gross profit 3,016 69.3 2,434 70.2 9,459 64.0

SGA expenses 738 17.0 550 15.9 2,457 16.6

Operating income 2,277 52.3 120.9 3,700 47.4 1,883 54.3 7,002 47.4

Non-operating income 6 0.2 15 0.5 *115 0.8

Non-operating expenses 5 0.1 3 0.1 0 0.0

Ordinary income 2,278 52.4 120.2 3,700 47.4 1,896 54.7 7,116 48.2

Extraordinary gain - - - - - -

Extraordinary loss - - - - - -

Income before taxes 2,278 52.4 1,896 54.7 7,116 48.2

Corporate tax 763 17.6 687 19.8 2,276 15.4

Net income 1,514 34.8 125.3 2,505 32.1 1,209 34.9 4,840 32.8

The Highest Net Profits for a Quarter, Year-on-year Rate 125.3%

186

*Equity

in e

arn

ings o

f affilia

tes: 5

8

Gain

on in

vestm

ents

in p

artn

ers

hip

: 45


460 1,009 1,205

1,896 2,278 1,066

1,075

1,696

1,773

1,217

1,957

2,097

2,257

692

1,453

1,311

1,188

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2013/3期 2014/3期 2015/3期 2016/3期 2017/3期

第４四半期

第３四半期

第２四半期

第１四半期

FY2012 FY 2013 FY 2014 FY2015 FY2016

6

Changes in Quarterly Results of Ordinary Income

3,700

1,896

2,278

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

当第2四半期

累計期間（半

期）の業績予

想

前年同四半

期の実績

当第1四半期

の業績

Ordinary income growing steadily, reached record high for a quarter

YoY change ＋20.2%

Progress compared to

the operating results

forecast for six

months: 61.6%

Changes in quarterly results

of ordinary income

Progress compared to ordinary

results forecast for first half

(Unit: ¥mn) (Unit: ¥mn)

Ordinary income forecast for the

first half of FY2016

Ordinary income for 1Q of FY2016

Ordinary income for 1Q of FY2015

4Q

3Q

2Q

1Q


(Reference) Sales and Profits by Business

FY2013 FY 2014 FY 2015 1Q FY 2015 FY 2016 1Q

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

Sales 10,547 100.0% 12,227 100.0% 115.9% 3,466 100.0% 142.3% 14,778 100.0% 120.9% 4,351 100.0% 125.5%

Direct costs*1 1,419 13.5% 1,625 13.3% 114.5% 433 12.5% 120.4% 2,110 14.3% 129.8% 570 13.1% 131.8%

Direct profit 9,128 86.5% 10,601 86.7% 116.1% 3,033 87.5% 146.1% 12,667 85.7% 119.5% 3,780 86.9% 124.6%

M&A sales 10,361 100.0% 12,009 100.0% 115.9% 3,412 100.0% 143.2% 14,542 100.0% 121.1% 4,282 100.0% 125.5%

M&A cost of sales*2 1,365 13.2% 1,537 12.8% 112.6% 396 11.6% 117.1% 1,996 13.7% 129.8% 524 12.3% 132.3%

M&A gross profit 8,995 86.8% 10,471 87.2% 116.4% 3,016 88.4% 147.5% 12,545 86.3% 119.8% 3,757 87.7% 124.6%

Other sales 186 100.0% 218 100.0% 117.0% 53 100.0% 102.2% 235 100.0% 108.0% 68 100.0% 128.2%

Cost of other sales 53 28.7% 87 40.2% 164.2% 36 68.3% 174.7% 114 48.4% 130.0% 45 67.0% 125.8%

Other gross profit 133 71.3% 130 59.8% 98.1% 16 31.7% 54.0% 121 51.6% 93.2% 22 33.0% 133.3%

Non-allocable cost of sales*3

2,071 19.6% 2,461 20.1% 118.8% 598 17.3% 133.5% 3,208 21.7% 130.3% 764 17.6% 127.7%

Gross profit 7,056 66.9% 8,140 66.6% 115.4% 2,434 70.2% 149.6% 9,459 64.0% 116.2% 3,016 69.3% 123.9%

Breakdown of consolidated sales into M&A sales

and other sales

(yen, mn)

*1 Direct cost includes M&A cost of sales (referral fees and outsourcing expenses) and cost of other sales. *2 M&A cost of sales consists of referral fees and outsourcing expenses.

*3 Non-allocable cost of sales includes personnel costs, transportation costs, etc.


Number of Deals Closed

127 Deals = Record Highest for a quarter, Year-on-year Rate + 17.6%

FY2013 FY2014 FY2015 FY

2016

1Q FY

Total 1Q 2Q 3Ｑ 4Q

FY

Total 1Q 2Q 3Q 4Q

FY

Total 1Q

Total deals (individual) *1 43 256 65 85 101 87 338 108 101 118 93 420 127

Cumulative total in the

same fiscal year 43 - 65 150 251 338 - 108 209 327 420 - 127

Sell side 21 126 33 42 50 44 169 54 53 59 46 212 63

Buy side 22 128 32 43 51 43 169 54 48 59 47 208 64

Other deals closed (e.g., reorganization) - 2 - - - - - - - - - - -

M&A sales 1,992 10,361 2,383 3,018 3,622 2,985 12,009 3,412 3,343 4,356 3,430 14,542 4,282

M&A sales per deal *2 46.3 40.5 36.7 35.5 35.9 34.3 35.5 31.6 33.1 36.9 36.9 34.6 33.7

Total deals (transactions) *1 22 131 34 43 52 44 173 57 53 61 49 220 64

Cumulative total in the same fiscal year 22 - 34 77 129 173 - 57 110 171 220 - 64

(Number of cases, yen, mn)

*1 Total deals (individual) is the number of sell-side deals added to the number of buy-side deals (based on contingent fees).

Total deals (transactions) is the total number of transactions.

*2 M&A sales divided by the number of total deals; includes retainer fees.


Number of deals closed for 1Q（Apr.-Jun.） 1/2

Record highest for a quarter, 127 deals were closed

Sellers Buyers Transaction scheme Business outline Region Business outline Region

1 Engineering works Kanto Engineering works Tokai, Hokuriku Stock transfer

2 Telecommunications construction Kyushu, Okinawa General trading company Kyushu, Okinawa Stock transfer

3 Paper articles production Kyushu, Okinawa Packaging material production Kansai Stock transfer

4 Offset printing Kanto Industrial machinery/tool wholesaling Tokai, Hokuriku Stock transfer

5 Offset printing Kanto Clothing material production Kansai Stock transfer

6 Metalworking Kanto Production contract Kanto Stock transfer

7 Mold parts production Koushinetsu Electric machine/appliance production Kansai Stock transfer

8 Entrusted development software Kansai Entrusted development software Kanto Stock transfer

9 Food retailing Kanto Food retailing Kanto Stock transfer

10 Dispensing pharmacy Hokkaido, Tohoku Dispensing pharmacy Kansai Stock transfer

11 Dispensing pharmacy Kanto Dispensing pharmacy Kansai Business transfer

12 Dispensing pharmacy Kansai Medicine retail Kansai Stock transfer

13 Dispensing pharmacy Kanto Medicine retail Kansai Stock transfer

14 Food retailing Kyushu, Okinawa Restaurants Kyushu, Okinawa Company split

15 Estate management Kanto Estate management Chugoku, Shikoku Company split

16 Relaxation Kanto Health club Kanto Stock transfer

17 Home nursing Kanto Building maintenance Kanto Stock transfer

18 housing construction Kanto housing construction Kanto Stock transfer

19 Special printing Kanto Electronics-applied equipment production Kanto Stock transfer

20 Machine tool production Kansai Knives for machinery production Kansai Stock transfer

21 Agricultural material production Hokkaido, Tohoku Sailcloth products production Tokai, Hokuriku Stock transfer

22 Information processing service Kanto Event planning Kanto Stock transfer

23 Information service Kanto Entrusted development software Kanto Stock transfer

24 Making /selling of funeral-related article Tokai, Hokuriku Funeral Tokai, Hokuriku Stock transfer

25 Making and selling of food Hokkaido, Tohoku Food processing/producing Hokkaido, Tohoku Stock transfer

26 Architectural design Tokai, Hokuriku Architectural design Tokai, Hokuriku Stock transfer

27 Restaurants Kanto Restaurants Kanto Stock transfer

28 Nursing at day care/short stay Kanto Elderly welfare/healthcare Kanto Business transfer

29 Communication Kanto Machinery manufacturing Kanto Stock transfer

30 Construction work Hokkaido, Tohoku Construction Hokkaido, Tohoku Stock transfer

(cont’d on next page)


Number of deals closed for 1Q（Apr.-Jun.） 2/2

31 Construction work Chugoku, Shikoku Fuel retailing Chugoku, Shikoku Stock transfer

32 Earthwork/Concrete construction Kanto Engineering works Hokkaido, Tohoku Stock transfer

33 Electrical work Kanto Telecommunications construction Kansai Stock transfer

34 Equipment installation work Chugoku, Shikoku Canning sheet metal Chugoku, Shikoku Stock transfer

35 Steel manufacture Tokai, Hokuriku Hardware production Kansai Stock transfer

36 Steel tube production Koushinetsu Metal wire goods production Kanto Stock transfer

37 Semiconductor making equipment production Kanto Commodity inspection Kanto Company split

38 Wiring devices/accessories production Kansai Electric wire production Kansai Stock transfer

39 Electronics-applied equipment production Kanto Electric machine/appliance wholesaling Kanto Stock transfer

40 Entrusted development software Kanto General printing Kanto Stock transfer

41 Entrusted development software Kanto Entrusted development software Kanto Stock transfer

42 Animation production Kanto Game software Kanto Stock transfer

43 General motor truck transportation Kansai General motor truck transportation Kansai Stock transfer

44 Food wholesaling Chugoku, Shikoku Food wholesaling Kyushu, Okinawa Stock transfer

45 Paint wholesaling Koushinetsu Architectural material wholesaling Kanto Stock transfer

46 Chemicals wholesaling Kanto Various products wholesaling Kanto Stock transfer

47 Transportation machinery/tools wholesaling Kansai Distribution/transportation equipment production Kansai Stock transfer

48 Food retailing Tokai, Hokuriku Retailing of sake Tokai, Hokuriku Stock transfer

49 Dispensing pharmacy Kansai Dispensing pharmacy Kanto Stock transfer

50 Dispensing pharmacy Kanto Dispensing pharmacy Hokkaido, Tohoku Business transfer

51 Dispensing pharmacy Kansai Dispensing pharmacy Kansai Stock transfer

52 Dispensing pharmacy Kanto Dispensing pharmacy Kanto Stock transfer

53 Fuel retailing Kanto Fuel wholesaling Kanto Stock transfer

54 Mail‐order business Kansai Consumer products production Kanto Stock transfer

55 Industrial machinery leasing Kanto Builder's plant and machinery leasing Chugoku, Shikoku Stock transfer

56 Survey work Kansai Architectural design Tokai, Hokuriku Stock transfer

57 Restaurants Kanto Real estate buying and selling Hokkaido, Tohoku Stock transfer

58 Cosmetics Kanto Management consulting Kanto Stock transfer

59 Cosmetics Kyushu, Okinawa Clothing industry Kanto Stock transfer

60 Regular hospital Kanto Geriatric health services facility Kanto Business transfer

61 Intensive care home for the elderly Kanto Private residential home Kyushu, Okinawa Stock transfer

62 Group home Tokai, Hokuriku Wooden architecture construction Tokai, Hokuriku Stock transfer

63 Industrial waste disposal Tokai, Hokuriku Iron scrap wholesale Kansai Stock transfer

64 Employment placement Kanto Employment placement Kanto Business transfer

(cont’d from previous page)


中小企業の経営者年齢の分布（年代別） Fig.1

0

5

10

15

20

25

30歳～ 45歳～ 60歳～ 75歳

（10 thousand people）

Age distribution of SME owners (by generation)

40’s 60’s 75 years old

1995

2000

2005

The peak changed from 47 to 66 years old in 20

years.

2010

2015

(FYI)

Distribution of the Ages of owners & Changes in the Average Age of Retirement

Changes in the owner’s average age of retirement

Fig.2

The source: Session for revitalization plans focusing on succession of a business (1st session) by Small and Medium Enterprise Agency

The peak in the age distribution of SME owners became 66 years old (Fig.1), which is close to the average age of retirement (Fig.2).

11

30’s

Small enterprises

Medium enterprises

Age

More than 30 years ago

20-30 years ago

10-19 years ago

5-9 years ago

0-4 years ago

Timing of succession


(FYI) Rapid Increase of Succession by Non - relatives

26.7%

45.5%

57.0%

66.9%

73.0%

75.5%

82.5%

83.5%

7.6%

9.5%

14.5%

9.3%

12.4%

9.6%

7.4%

9.2%

26.4%

24.4%

17.6%

12.1%

9.1%

11.7%

6.5%

3.7%

39.3%

20.6%

10.9%

11.7%

5.5%

3.2%

3.7%

3.7%

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

0年以上5年未満








息子・娘息子・娘以外の親族親族以外の役員・従業員社外の第三者 Children Directors/employees not relatives

35 - nmt 40 years

30 - nmt 35 years

25 – nmt 30 years

20 –nmt 25 years

10 – nmt 15 years

5 – nmt 10 years

0 – nmt 5 years

The ratio of succession by non-relatives increased to over 65%

Relationship between the current and previous president by term of office

Relatives Non-relatives

12

65.7％ The source: Session for revitalization plans focusing on succession of a business (1st session) by Small and Medium Enterprise Agency

Relatives not children Outsiders

15 – nmt 20 years


Balance Sheet Summary

Assets End of FY2016 1Q % Change

End of FY2015

I Current assets 11,560 58.6 -390 11,951

(Cash and deposits) （8,684）（44.0） -383 (9,068)

(Other current assets) （2,876）（14.6） -6 (2,882)

II Fixed assets *8,162 41.4 -27 *8,190

Total assets 19,723 100.0 -418 20,141

Liabilities

and net assets End of

FY2016 1Q % Change End of FY2015

I Current liabilities 2,161 11.0 -745 2,907

II Fixed liabilities 482 2.4 11 470

Total liabilities 2,643 13.4 -734 3,378

(Interest bearing liabilities) （100）（0.5）（-） (100)

Net assets 17,079 86.6 316 16,763

(Retained earnings) （15,077）（76.4）（315） (14,762)

Total liabilities and net assets

19,723 100.0 -418 20,141

(yen, mn, %)

*Long-term deposit

6,100

Maintaining a sound balance sheet


Employee Numbers

End of

FY2010

End of

FY2011

End of

FY2012

End of

FY2013

End of

FY2014

End of

FY2015

End of 1Q FY2016

Cost of

sales

Consultants 74 87 95 115 146 188 195※b

Non-consultants 5 6 7 9 11 28 36※c

SGA

expenses Non-consultants 10 11 13 14 16 18 19

Total 89 104 115 138 173 234 250

(Average number of consultants) *a 72.5 80.5 91 105 130.5 167 -

Number of consultants increased by 7 compared to the end of FY2015 (from 188 to 195).

The Company will continue to actively hire mid-career consultants in FY 2016.

*a Average number of consultants = (number of consultants at start of year + number at end of year) / 2

*b Four consultants have joined the Company and five more have accepted informal job offers as of July 29.

*c Consists of sales support members from the sales planning division, sales support division, etc. including the experts from

Corporate Value Laboratory Inc.

* Seconded persons are not included in the number of staff members shown above.

(No. of employees)


TOPICS（1）

15

Award name Award-winning bank in

fourth awards ceremony

Bank of the Year The Hokuriku Bank, Ltd

Banker of the Year

The Chugoku Bank, Ltd

Finance sales Dept,

Mr. Kazunori Imamura

Deal of the Year East The Gunma Bank, Ltd.

West The Hokkoku Bank, Ltd.

Special Award East The Hokuetsu Bank, Ltd.

West The Ogaki Kyoritsu Bank Ltd.

Regional Contribution

Award

East The Toho Bank, Ltd.

West The Iyo Bank, Ltd.

Information

Development Award

East The Chiba Kogyo Bank, Ltd.

West The Shiga Bank, Ltd.

Best Planning Award East The Musashino Bank, Ltd.

West The Juroku Bank, Ltd.

Activation Award

East The Ashikaga Bank, Ltd.

The Hachijuni Bank, Ltd.

West The Shiga Bank, Ltd.

The Hyakujushi Bank, Ltd.

The Hokuriku Bank, Ltd （Toyama Prefecture）

Information on status of activities of each bank was shared by

participating banks to promote more proactive activities

Fourth Bank of the Year Awards Ceremony held Attended by 105 people from 44 regional banks

The Company gives awards once a year to

banks with excellent track records of M&A.

In the fourth awards ceremony, a total of

16 banks received eight awards.

The awards ceremony was characterized

by the proactive participation of a number

of officers of regional banks.

(Premium National M&A Conference for

Financial Institutions)

Participants from award-winning banks

(At Imperial Hotel Tokyo on May 26, 2016)


TOPICS（2）

Deploying 4 members at the overseas support office,

we will support the future needs of overseas.

As many as 250 people participated in the Singapore Office Opening Seminar

Activities of the overseas support office 1. Support Japanese companies in selling their local subsidiaries

2. Support Japanese companies in buying foreign companies

3. EXIT support for local private/equity/funds

4. Expand pipelines through networking business partners like financial institutions

Commemorative ceremony for the opening of Singapore Office

Date and time: Thursday, June 16, 2016

Venue：Hilton Singapore


TOPICS（3） 2,500 People Joined the Opening Ceremony & Seminar of Fukuoka Business Office

Seminars in Kyushu, Okinawa, and Yamaguchi

Total 1,800 applications (held in July 2016)

＜Seminar＞ in Hakata

A lot of media covered the opening (part of the media published)

<Ceremony> Scholarship presentation ceremony to high school students, victims of Kumamoto quake – Mr. Ono, Vice governor of Kumamoto Prefecture (right in the photo)

Date Medium Title

Jul. 2, 2016 Nishinippon Shimbun Kyushu economy - Person = Helped with succession issues

Jul. 6, 2016 Yamaguchi Shimbun Hints on M&A, 50 people learned at Seminar in Shimonoseki

Jul. 6, 2016 Ryukyu Shimpo Chances for growth by succession through M&A

Jul. 7, 2016 Minaminihon Shimbun M&A seminar for enterprise owners

Jul. 8, 2016 Oita Godo Shimbun Visited our company on July 7

Jul. 8, 2016 Miyazaki Telecasting Mezamashi TV - M&A seminar for enterprise owners

Jul. 9, 2016 Miyazaki Nichinichi Shimbun Flow of company transfer - M&A seminar in Miyazaki city

Jul. 13, 2016 Kumamoto Nichinichi Shimbun Learned the flow of company transfer

Jul. 15, 2016 Nagasaki Broadcasting NNN Straight News – M&A seminar for the lack of successor issue

Jul. 15, 2016 Nagasaki Shimbun “Method of M&A growth” – Seminar at the largest company in industry, Nagasaki

Jul. 20, 2016 Kyushu Asahi Broadcasting Backing M&A ,Kyushu – Demands exists due to a lack of successor

Jul. 21, 2016 Saga Shimbun Notes on M&A – Introduced former owners at the seminar

Jul. 20 2016 Okinawa Times Support business succession, focus on Okinawa, Head of Japan M&A

<Ceremony> Directors from business partners including regional banks / accounting firms attended.


TOPICS（4）

M&A proposals based on strategy

M&A intermediary service PMI support from the

accounting/organizationa

l merging perspectives

The flow of

M&A service

Our current major

services

Mid-cap support office

(Support for project

development transfer cases)

PMI support office

(Support for integration

after closing deals)


Study on Fair value

18

Established a New Company to Support Succession of a Business (Joint corporation with Aoyama Zaisan Networks co.ltd.)

Business succession navigator Inc.

Total consulting services for business successions & asset management

NEW

will be established on

Aug. 4 2016

Comprehensively advise on business successions (Inheritance problems, selection & development of successor, M&A proposal, etc.)

Newly established on Apr 1, 2016 Newly established on Apr 1, 2016

Business started on Apr 1, 2016


TOPICS（5）

19

Applicable standard JIS Q 27001:2014（ISO/IEC 27001:2013）

Registration classification Information security management system

Registration number JUSE-IR-369 Registration date May 25, 2016

Registered organization

Nihon M&A Center Inc. Tokyo HQ, Osaka branch, Nagoya branch, Sapporo business office, Fukuoka business office *Note that “&Biz” division is excluded from each base

Scope of registration

M&A intermediary Valuation of business enterprise MBO support Corporate revitalization support Corporate advisory services Advice on capital policy / management plan Corporate reorganization support

Registration agency Union of Japanese Scientists and Engineers(JUSE)

Acquired ISO27001 ⇒Strengthen the information management system to earn further trust


Dividends and Stock Splits

16.620

32 39

54

8.3 10

1619

27

¥0.0

¥10.0

¥20.0

¥30.0

¥40.0

¥50.0

¥60.0

2013/3期 2014/3期 2015/3期 2016/3期 2017/3期

期末配当実績中間配当実績当初年間配当予想当初中間配当予想

49

35

18.3

30

＜State of Share Split＞

（予想）

Oct, 1, 2016 Split shares into two (plan)

Apr. 1, 2014 Split shares into three

Apr. 1, 2012 Split shares into 200

Increased Consolidated Payout Ratio to 40% to Increase Shareholder Returns ⇒To raise the liquidity of shares, split shares into two

(After considering to split the shares into three as of Apr.1,2014 /

Before considering to split the shares into two as of Oct.1,2016)

(Original) forecasts Results Actual

payout

ratio Amount Dividend

breakdown Amount

Dividend breakdown

FY2016

（forecast） ¥54 Interim ¥27

FYE ¥27 ¥- Interim ¥-

FYE ¥-

40.3％（forecast）

FY2015 ¥39 Interim ¥19

FYE ¥20 ¥49

Interim ¥19

FYE ¥30 40.5%


FYE ¥16 ¥35

Interim ¥16

FYE ¥19 35.4%


FYE ¥10 ¥30

Interim ¥10

FYE ¥20 35.9%

FY2012 ¥16.6 Interim ¥8.3

FYE ¥8.3 ¥18.3

Interim ¥8.3

FYE ¥10 35.3%

Trends in dividend per share

Annual dividend (actual results)

FYE dividend (results)

Interim dividend (results)

Original forecast for FYE annual dividend Original forecast for interim dividend

FY2016 FY2012 FY2013 FY2014 FY2015

(forecast)

Unit: yen


Appendix

Company Overview

21


Introduction

Nihon M&A Center Inc. specializes in providing M&A

intermediary services between small- and medium-sized

companies, among which competition is not significant.

The M&A market has high growth potential due to the succession problem becoming more serious and the spread of industry restructuring.

The company can efficiently obtain M&A-related

information by drawing upon its M&A information

network,* one of the largest in Japan.

* Through business alliances with 658 accounting firms, 294 regional financial institutions,

and other organizations throughout Japan (as of the end of June, 2016)

Long-term profit growth can be expected.

22


Corporate Profile (As of the end-June 2016)

Company name

Established

Business outline

Offices

Representatives

Nihon M&A Center Inc.

April 1991

M&A intermediary services (specializing in M&A between small- and medium-sized companies); M&A-related businesses: corporate revitalization support, company reorganization, MBOs, etc.

Tokyo Headquarters, Osaka Branch, Nagoya Branch,

Sapporo Office, Fukuoka Office, Singapore Office

Chairman and Founder Yasuhiro Wakebayashi President Suguru Miyake

Sales Headquarters: 231(incl. 195 consultants) Administration Headquarters: 19

No. of employees (consolidated)

250 (excluding 6 full-time directors)

Breakdown of

employee numbers

2127 Market listings Stock code Tokyo Stock Exchange

1st section

Paid-in capital ¥1 billion 39,988,800 shares Number of

shares issued

23


Corporate History

Nihon M&A Center Inc. was established by prominent CPAs and tax accountants nationwide. Accounting offices throughout the country were organized into a network of regional M&A centers. (658regional M&A centers as of the end-June 2016)

We established a nationwide M&A workshop to expand our network with regional banks (98 tie-ups with regional banks as of the end-June 2016). We also established a business alliance with Shinkin Central Bank, followed by similar alliances with its subsidiary Shinkin Capital and Shinkin banks throughout Japan (196 tie-ups with Shinkin banks as of the end-June 2016).

We established Japan Private Equity Co., Ltd. jointly with Japan Asia Investment as an MBO fund business (paid-in capital=¥60 mn, investment ratio = 36.1%, fund amount = around ¥20 bn).

April 1991

May 2000

October 2000

Company established

Entry into MBO funds

Network of regional financial

institutions

October 2006 TSE Mothers listing

Current Chairman and Founder Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan selling computers to accounting firms and regional financial institutions throughout Japan. The current M&A network is based on the network cultivated at that time.

- Before establishment

December 2007 TSE 1st section listing

Shares were listed on the TSE Mothers Stock Exchange on October 10, 2006. It was the first listing of a company in Japan specializing in intermediary M&A services for small- and medium-sized companies.

The company's stock was transferred from TSE Mothers to 1st Section on December 10,

2007 (a year and two months from the listing on the TSE Mothers, which is the fourth fastest

transfer), meaning the company became the first M&A intermediary firm to list on the TSE

1st Section.

24


Se

lle

r

Bu

ye

r

Japan Private Equity Co., Ltd. MBO fund business joint venture

(Management of eight funds and a total assets of ¥20 bn, both on a cumulative basis) Paid-in capital ¥60 mn (Equity interest ratio: 36.1% for Nihon M&A Center and 35.6% for DBJ)

MPI

Wholly owned subsidiary

(Management Planning Consulting etc.)

Paid-in capital ¥20 mn

Nih

on

M&

A C

en

ter

M&A info

network

Info Info Info Info

M&A info

network

Seminar

Website Info Info

Direct information Direct information

Direct mail

Info Info

Business Model Platform for M&A market

Accounting firms Regional M&A centers About 658 nationwide

Regional financial institutions

About 294 nationwide

Chambers of commerce

Tokyo, Osaka, Nagoya, etc.

Securities firms, consultancies, venture capital

Seminar

Website

Direct mail

Accounting firms Regional M&A centers About 658 nationwide


About 294 nationwide

Chambers of commerce

Tokyo, Osaka, Nagoya, etc.

Securities firms, consultancies, venture capital


Wholly owned subsidiary

(valuation of business etc.)

Paid-in capital ¥10 mn

25


Organizational Chart General Shareholders

Meeting

Board of Directors

Chairman and Founder

President

Sales Headquarters

Accounting Office

channel

Financial channel

Corporate channel

Internal Audit Office

Administration Headquarters

Medical

Nursing Care

Support

Office

&biz Business

Office

Human Resources & General Affairs Dept.

Accounting Dept.

Board of Executive Officers

Corporate Strategic channel

Corporate Advisor Office

Special Service

Promotion channel

Sales Support Dept.

Industry Realignm

ent channel

Overseas M&A

Support Office

General Planning Headquarters

Sales Planning Dept.

Corporate Planning

Dept.

Management

benchmark

Corporate strategy

Marketing

Seminar

PR/IR

Web

CS

Secretary

Education/training

Information system

Data analysis

Management of M&A-relevant

qualifications

Support for business succession

Internet

strategy

for small

business

= Newly established in April 2016 Established independent organizations for Mid-cap/PMI supports to improve the structure project development large-scale transfers.

Develop-

ment of

information

on accoun-

ting office

Develop-

ment of

information

on financial

institu-tions

Search for

potential

buyers

Service for

listed

companies

Speciali-zing

in industry

which is

faced with

large-scale

realignment

Fund

Mid-cap

Overseas

M&A

Medical

care and

nursing

care

Support by

lawyer, CPA,

tax accoun-

tant and

judicial

scrivener

Mid-cap

Support

Office

Direct

Marketing

Channel

PMI

Support

Office

PMI support Support by

Mid-cap

specialized

CPA

Direct

Marketing

26


Shift to a Company with Audit and supervisory Committees

27

Shift to a company with audit and supervisory committees to enhance the governance

Stockholders’ general meeting

Risk management committee

Administration division

Internal auditing section

President and representative director

Sales HQ/General Planning HQ

Audit C

orpo

ration

Audit and supervisory committees

Board of directors

Execution of Business

Supervision

Governance

Audit

Appointment/Dismissal Appointment/Dismissal

Audit

Internal audit

Appointment Report

Appointment/Dismissal

Conference


Position of the Company

Growing entrustment through strengthening the cooperation with major securities companies

Size of deal (small)

Nationwide and all

industrial sectors

service type

Size of deal (large)

Major financial institutions

（Securities companies, Mega banks etc）

Small-and medium-sized M&A boutique

firms

M&A boutique

firms

Area- and industrial sector-

dedicated type


× Nihon M&A Center

×

Collaboration

Difficulties in establishing

networks with other firms

Nationwide operation,

which is difficult to achieve alone,

can be realized through

collaboration

with us

Insufficient knowledge about M&As for SMEs

Strengthen large-scale and cross-border cases

M&A cases for small and medium-sized enterprises

introduced by the major securities companies

Collaboration

28


The domestic markets we are targeting

Coverage not only of SMEs, which are our specialty, but also of medium-sized enterprises and micro enterprises

②PMI support

Established PMI support office in April 2016

to support integration after closing deals.

Full-time staff for PMI support assists with

respect to accounting and organizational

merging.

①Support for project development for Mid-

cap cases

CPAs specialized in Mid-cap cases handle

the deal in project development these cases.

Strengthen the ability to make proposals for

medium-sized enterprises.

Micro-cap (small-scale micro enterprises with

annual sales of less than 100mn yen)

Small-cap (SME with annual sales of

100mn to 2bn yen)

Mega

Mid-cap (medium-sized

enterprises)

Toward the fully fledged start of "a system providing

support for business continuity from anywhere"

We are aiming to respond efficiently to the needs of small-scale

and micro enterprises through a system utilizing the Internet.

(2) Responding to the realignment of industries

We are placing full-time staff in each industry sector in which industry realignment is expected to accelerate, such as dispensing pharmacies, various retail businesses, various wholesalers, and auto-parts manufacturers, and we are advancing projects in these sectors.

(1) Strengthening direct marketing

In addition to the conventional method of referrals from our network, we are also strengthening our acquisition of contracts through a management method of making direct proposals.

29


Potential Size of Business Succession M&A Market

Major

and listed

companies

Very small companies

(less than 10 employees)

All companies approx. 2.5 mn

SME approx. 600,000

Profitable approx. 180,000

Successor undecided approx. 120,000

companies

We close more than 200 M&A

deals per year as intermediary =>

Potential market size is larger

Note: The figures above are estimates calculated by Nihon M&A Center based on data from sources such

as the National Tax Agency, Ministry of Internal Affairs and Communications and Teikoku Databank,

Ltd.

x 30% x 24% x 65% =

As many as 120,000profit-making companies

will be our targets under

M&A for business successions

30


Change in the reasons for Business Transfer through M&A

Business successions

10 years ago,

the succession problem

accounted for about 90% of

the reasons for transfer.

Non-business successions The succession problem still is the major reason

for transfer, however, the cases due to other reasons

or a combination of succession and other reasons are

showing an increasing trend.

Ages of seller owners (young)

Ages of seller owners(old)

Other reasons

Growing number of transfers due to the reasons other than the succession problem / Expanding age-groups of the owners of sellers

NEW

・Industry reorganization ・Growth strategy ・Change in policy/regulations ・Labor shortage ・Uncertainty in business environment

31


M&A Intermediary Workflow Seller Buyer

Delivery, settlement, and disclosure

Individual consultation

Signing of advisory agreement

Business valuation

Executive summary preparation (name not disclosed)

Explanation of executive summary (name not disclosed)

Signing of confidentiality agreement

Explanation of executive summary (detailed, name disclosed)

Signing of advisory agreement

CEO interviews, company visits

Negotiation of conditions such as price

Signing of basic agreement

Due diligence

Negotiation of final terms

Signing of final agreement

Contingent fee

Retainer fee Nih

on

M&

A C

en

ter

Contingent fee

Executive summary preparation (detailed, name disclosed)

Interim fee

Retainer fee

Material provision

Company analysis, industrial sector

research and the selection of

prospective buyers

Provision of detailed individual materials

32


Initiatives to Revitalize the Network 658 regional M&A centers

Activities to support robust M&A information network

Tie

-up

s w

ith

98

(am

on

g a

to

tal

of

1

05

ban

ks

in

op

era

tio

n)

Nihon M&A Center

• International M&A meetings • M&A senior expert training school • Executive Membership of Nihon M&A

Center • E-mail about projects sent each week • M&A News issued • Seminars for clients • Distribution of posters and pamphlets

• All-Japan finance M&A research meetings (first-tier regional banks)

• Branch manager training • Seminars for clients • M&A senior expert training school • E-mail about projects sent each month • 100 staffs (cumulative) have temporarily

been transferred to the company • M&A News issued

• Business alliance with Shinkin Central Bank (Shinkin capital)

• Joint project development with Shinkin capital • Events to exchange information in areas

where shinkin banks operate • Seminars for clients • M&A senior expert training school • M&A News issued

• Raising awareness among managers and general managers at head office

• Training for branch managers • Seminars for clients • Regular events to exchange

information • Accompanying to clients • M&A News issued

Securities firms, investment and consultation companies, JAFCO, Japan Asia Investment, etc.

All business alliance numbers are as of End-June, 2016.

Tie

-up

s w

ith

196

(am

on

g a

to

tal

of

265 S

hin

kin

Ban

ks i

n o

pera

tio

n)

"Information Program for Qualified Professionals"

33


• Corporate/ industry analysis

• Valuation of businesses and deal making

• Deal review • Drafting of long lists • Support including drafting

of agreements • Accompanied interview • M&A solutions proposal • Due diligence, holding

signing ceremonies • "Brother" system • Marketing method

• 3KM • KJ Method • 7 Habits • Drucker Study • Dale Carnegie Study • Customer Satisfaction • Logical thinking • Management • Overseas visits

• Bookkeeping • Financial statement

analysis • Valuation of businesses • M&A workflow • Company interviews and

executive summary preparation

• Legal documents • Reinforcement of sales

capabilities • Training on operation of

deals database

Annual training

• Case studies of success & failure

• Compliance • Basic practical business

course

OJT

• Corporate law • Tax law • Company reorganization

methods • New accounting standards • Closing package • Various role-playing

activities • Advanced valuation of

businesses • Coping with due diligence • Presentations • M&A senior expert training

school

Step-up training Monthly training

Training curriculum was improved and made more practical

by education specialists (M&A consultants at the Company until last year)

under the direct control of Managing Director, Chief Director of General Planning

-Education training system for developing inexperienced people into M&A players quickly -Education system for training M&A players to advance to the higher grade

The entire M&A process takes six months to a year. However, the Company has a number of M&A deals underway at any given time, enabling its human resources to gain a great deal of practical experience in a short period of time.

Systematize

processes by

brush-up and

advance training

Human Resource Development and Knowledge Sharing

Initial training

Training for each rank

• Management - case study -

• Leadership

• Coaching, among others

Improving

organizational

strengths by using

training for leaders

and next-generation

leaders

Educational expense subsidies

• Accounting

• Graduate school

• Study for qualifying tests

(Tax accountant; FP; small and medium

enterprise management consultant, etc.)

• Purchase of specialized books

34


個人, 30%

金融機関,

28%

外国法人

等, 38%

金融商品

取引業者,

1%

その他の

法人等, 3%

個人, 30%

金融機関,

27%

外国法人

等, 39%

金融商品

取引業者,

1%

その他の

法人等, 3%

Shareholders

Trend of distribution by category of shareholder: The percentage held by foreign corporations stands at about 38%

(Of those, trust banks and life insurance 26.9%)

Number of shareholders: 6,898; Number of shares issued: 39,988,800

(Of those, trust banks and life insurance 28%)

Number of shareholders: 6,385; Number of shares issued: 39,988,800

September 30, 2015 March 31, 2016

Financial

Instruments

Dealers, 1%

Other

Corporations, 3%

Individuals,

30%

Financial

Institutions,

27%

Foreign

Corporations,

39%

Financial

Instruments

Dealers, 1%

Other

Corporations, 3%

Individuals,

30%

Financial

Institutions,

28%

Foreign

Corporations,

38%

35

Available period Target number of shares The percentage of the shares to all-issued stocks

June 30, 2016 – June 29, 2017 MAX: 489,000 shares MAX: 1.2％

June 30, 2017 – June 29, 2018 Shares not exercised in the previous year -

The number of shares to be

allocated as stock options

for 2012 is 978,000


Finally

I. Management principles Management principles Contribute to the continuation and growth of companies

through the M&A business

Company goal Focus on strict compliance and corporate social responsibility

II. Purpose of listing M&As are a public institution Increase social trust and create an M&A market platform

Human resources and funds Acquire talented staff and strengthen main and related businesses

III. To investors Increase corporate value We aim to increase corporate value through high

profitability and growth

Return profits to shareholders Increases in corporate value and stable growth in the payout ratio

IR contact

Kazuhiro Iino

Senior Executive Officer

General Manager, Corporate Planning Office

Contact: https://www.nihon-ma.co.jp/action/contact/

IR page URL: https://www.nihon-ma.co.jp/ir/

36

Documents

Results of Operations for the First Quarter of the … › ir › pdf › 160810_information2.pdfforecast for six months: 61.6% Changes in quarterly results of ordinary income Progress