3836 TSE Prime

Avant Group Corporation
Financial Results Presentation
for the third quarter of Fiscal Year June 2023
April 28, 2023

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Executive Summary Summary of financial results for the third quarter of FY June 2023•

Q3 (3 month) net sales increased YoY in all segments and rose 12.5% YoY overall. On theother hand, operating income declined 1.1% YoY, mainly due to deteriorating profit margins
caused by a decline in gross profit margin.

•

The decline in gross profit margin was mainly due to reorganization costs, an increase inheadcount for growth, and outsourcing costs to meet strong demand.

•

Cumulative Q3 net sales and operating income increased 17.4% and 11.4% YoY, respectively.

 Earnings and Dividend Forecasts•

We expect to maintain the pace of sales growth, but we maintain our earnings forecasts
because we will continue to increase the number of employees needed for growth and conduct
full-scale product strategy reviews and subsequent implementation in Q4, and estimate thetotal amount of expenses associated with these changes to the greatest extent possible.

•

Dividend per share for the fiscal year ending June 2023 is forecast at 15 yen per share, in linewith the target of the Medium Term Management Plan.

 Actions to Realize our Materiality•

Three actions are underway to realize our materiality: business reorganization, upgradinggroup management, and visualization of corporate value mechanisms.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2

INDEX

Ⅰ. Summary of financial results for the third quarter of FY June 2023
Ⅱ. Earnings and Dividend Forecast
Ⅲ. Actions to Realize our Materiality＊ Figures in this presentation are rounded down to the unit of display.

The information contained in this material regarding the business outlook and other forecasts and strategies etc. areforward-looking statements and are determined within the range that could normally be predicted based on the information
reasonably available to the Company at the time of preparation of this material. Investors should be aware of the risks,
however, that actual results may differ from the business prospects described in the material due to the occurrence of
extraordinary circumstances that cannot usually be predicted or the occurrence of results that cannot usually be predicted.
The Company will proactively disclose information that is considered material to investors, but investors should be advised
not to make judgment based entirely on only the business prospects described in this material. This material should not be
copied or transferred for any purpose without permission of the Company.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

3

I. Summary of financial results for the third quarterof FY June 2023

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

4

Results Highlights
 All segments saw strong demand growth, but the third quarter alone with sales up 12.5%
YoY fell short of the 20% growth level. Cumulative sales growth was up 17.4% YoY.
 A decline in the gross profit margin caused by growth related increases in personnel andreorganization costs, led to a decline in gross profit and was only partially offset by a decline
in the ratio of SG&A expenses, leading to a 2.8pt deterioration in operating margins, and a
decline in operating income. While operating income increased on a cumulative basis, theoperating income margin declined.
(Millions of yen)

FY6/23Q3

YoY Variance
Yr earlier

FY6/23

% chg

Q1-Q3

YoY Variance
Yr earlier% chg

Net Sales

5,664

5,035

12.5%

16,187

13,786

17.4%

Cost of Sales

3,174

2,492

27.4%

8,855

7,095

24.8%

Gross Profit

2,489

2,542

-2.1%

7,332

6,690

9.6%

GPM

44.0%

50.5%

-6.5pt

45.3%

48.5%

-3.2pt

SG&A

1,362

1,401

-2.8%

4,411

4,067

8.5%

Operating Income

1,127

1,140

-1.1%

2,920

2,622

11.4%

OPM

19.9%

22.7%

-2.8pt

18.0%

19.0%

-1.0pt

729

706

3.3%

1,871

1,572

19.0%

NPM

12.9%

14.0%

-1.2pt

11.6%

11.4%

0.2pt

EBITDA

1,255

1,254

0.1%

3,244

2,871

13.0%

EBITDA margin

22.2%

24.9%

-2.8pt

20.0%

20.8%

-0.8ptNet Income©2023 AVANT GROUP CORPORATION. All Rights Reserved.

5

Progress to Full-Year Sales Targets
 FY6/23 3Q cumulative sales reached 74.2% of the full-year plan, which is a high progress
rate compared to the last 3 years.
Q1

Q2

FY6/23plan

Q3 cum.
74.2%

FY6/23

23.1%

25.2%

¥21.8b

26.0%

73.7%
FY6/22

21.6%

25.1%

26.9%

¥18.7b

26.3%

15.2%

73.4%
FY6/21

22.2%

24.9%

26.3%

¥16.2b

26.6%

3.5%

75.1%
FY6/20

23.7%

25.6%

25.8%

¥15.6b

24.9%

11.5%

75.0%
FY6/19

22.6%

0%

26.7%

20%

40%
1Q

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

25.8%

2Q

3Q

¥14.0b

25.0%

60%

80%

16.6%

100%

4Q
6

FY6/23 Q1-Q3 Operating Income Bridge (YoY) Revenue growth drove operating income growth, but the rate of increase in outsourcing and IT
expenses was higher than the rate of increase in net sales
 Operating income in Q3 cumulative period increased, but due to the realization of ¥0.45b inreorganization costs the rate of increase was less than the increase in net sales.
(Millions of yen)

Higher GP
from sales
growthHigher personnel
and recruiting
costs due toincreased hiringand higher
compensation.

Increase in IT
expenses due toorganization
expansion andsupport for cloudcomputingOther
expenses

Reorganization cost

Increase inoutsourcing costs
to meet demand
including hiring gap.

+0.7b+28.8%

FY6/22 Q1-Q3

Operating
Income©2023 AVANT GROUP CORPORATION. All Rights Reserved.

+0.3b+11.4％

FY6/23 Q1-Q3
Operating Income(pre-reorganization)

FY6/23 Q1-Q3
Operating Income7Results by Business Segment
 Group Governance and Outsourcing both saw revenue growth, but Q3 (3month) profit was
down on growth related costs. Digital Transformation saw earnings growth on the back ofrevenue growth.
(millions of yen)YoY Variance

FY6/23
Q3
Net SalesGroup
GovernanceDigitalOutsourcing

% chg

Q1-Q3

Yr earlier

% chg

2,673

2,526

5.8%

7,824

6,806

15.0%

497

669

-25.7%

1,517

1,554

-2.4%

OPM

18.6%

26.5%

-7.9pt

19.4%

22.8%

-3.4ptOrders

1,784

2,298

-22.4%

7,217

6,814

5.9%

Order Backlog

2,529

2,358

7.3%

2,529

2,358

7.3%

Net Sales

2,233

1,902

17.4%

6,174

5,273

17.1%

522

428

22.0%

1,241

981

26.5%

23.4%

22.5%

0.8pt

20.1%

18.6%

1.5pt

Orders

2,185

1,464

49.2%

6,397

4,838

32.2%

Order Backlog

1,354

809

67.4%

1,354

809

67.4%

Net Sales

956

786

21.6%

2,773

2,252

23.1%

Operating Income

210

221

-5.0%

629

578

8.8%

OPM

22.0%

28.2%

-6.2pt

22.7%

25.7%

-3.0ptOrders

629

565

11.3%

2,022

2,511

-19.5%

1,695

1,716

-1.2%

1,695

1,716

-1.2%

Operating Income

Operating Income

Transformation OPM(DX)

Yr earlier

YoY Variance

FY6/23

Order Backlog©2023 AVANT GROUP CORPORATION. All Rights Reserved.

8

Results by Business Segment (Factors)
 Sales increased in all segments.
 Profit decline in Group Governance, in addition to personnel and outsourcing costs,
reorganization triggered costs for product rationalization and business environment
improvements, limited earnings growth in Outsourcing due to recruitment and office
expansion, high profit growth in Digital Transformation on sales growth.
Net Sales Variance(Millions of yen)
18,00016,0002,773(Millions of yen)

+520m YoY
・Outsourcing
continues to grow

14,0002,252
12,000
6,174
10,000

5,273

8,000
6,000
4,000

6,806

7,824

2,000
0
FY6/22 Q1-Q3

FY6/23 Q1-Q3

Operating Income Variance

4,000
3,500

+900m YoY
・Data Platform
and BI both strong
・Large projects
contribute to sales
growth3,000+1,018m YoY
・Service sales growth・ Not just Consolidated
Accounting, Group
Business
Management/Business
Management areas also
drove growth

1,500

629
578

2,500
2,000

981

1,000
1,554

1,517

FY6/22 Q1-Q3

FY6/23 Q1-Q3

5000■Group Governance ■Digital Transformation ■Outsourcing©2023 AVANT GROUP CORPORATION. All Rights Reserved.

1,241+50m YoY
・Sales growth・Increased costs
due to growth
driven recruitment
and office
expansion+259m YoY
・High profit growth onsales growth-37m YoY
・Despite sales growth
profit decline on costs forhiring for growth andoutsourcing to meet strong
demand.
・Reorganization related
rationalization andbusiness environment
improvement costs also afactor.
9

Group Cost Structure Recruitment expenses increased due to active recruitment activities, but outsourcing
expenses also increasing in areas where headcount still did not meet demand.
 IT expenses increased due to increase in headcount and cloud computing (for customers
and internal environment)(Millions of yen)YoY Variance

FY6/23Q3

Yr earlier

FY6/23

% chg

Q1-Q3

YoY Variance
Yr earlier% chg

Net Sales

5,664

5,035

12.5%

16,187

13,786

17.4%

Personnel expenses

2,488

2,217

12.2%

7,511

6,741

11.4%

Recruitment expenses

88

90

-2.2%

298

223

33.6%

Outsourcing expenses

1,004

778

29.0%

2,794

2,020

38.3%

IT expenses

248

163

52.1%

681

473

44.0%

Office expenses

233

254

-8.3%

689

689

0.0%

Other expenses

476

392

21.4%

1,293

1,017

27.1%

Total expenses

4,537

3,894

16.5%

13,266

11,163

18.8%

Operating Income

1,127

1,140

-1.1%

2,920

2,622

11.4%

OPM

19.9%

22.6%

-2.7pt

18.0%

19.0%

-1.0pt©2023 AVANT GROUP CORPORATION. All Rights Reserved.

10Quarterly GPP (Net Sales Growth + OPM) Trends
 The current year has been close to GPP 40 target, but the deviation from the target has
increased due to the downward trend in sales growth rate.
50%
45%
40%
35%
30%

37.0%

40.5%

Target 40％

36.3%

38.2%
33.6%

25%

26.3%26.3%
21.4%

15%

25.8%
20.7%

15.8%

10%

36.4%
32.4%,

25.3%

30.6%

20%

38.3%

26.3%

23.8%

10.2%

5%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY6/19FY6/20FY6/21Net Sales Growth Rate

FY6/22

FY6/23

OPM

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

11

Quarterly Net Sales by Segment
 As has been the trend in the past, sales increased with each successive quarter through Q3.

(Millions of yen)

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

12

Quarterly Margin Trends
 Gross margin is trending lower due to growth related headcount increases andreorganization costs. SG&A to sales ratio is at the lowest level in the past 5 years, andoperating margin while lower than in the same period of the previous year, overall not a low
level compared to the last 5 years.
(%)

60.0

50.0

48.6
44.3

43.3

42.5

45.1

47.8

47.3

42.1

47.6

48.3

49.5

47.9

44.5

50.5

44.9

45.4

44.8

33.5

32.7

32.5

47.2
44.0

40.0
32.3

32.3

31.7

30.0

28.3

27.0

30.8

33.0

32.2

33.4

31.2
27.4

20.0
20.3
16.9

10.0

16.3

12.0

13.8

14.3

14.8

Q1

Q2

Q3

15.1

27.9

27.8

27.8

22.7

20.4

21.4

21.7
14.5

13.3

25.7

11.4

10.2

12.7

12.2

Q4

Q1

24.1

19.9

0.0

Q1

Q2

Q3

Q4

FY6/19Q4

FY6/20

Q1

Q2

Q3

Q4

FY6/21GPM

SG&A ratio

Q1

Q2

Q3

FY6/22

Q2

Q3

FY6/23

OPM

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

13

Quarterly Recurring Sales and Recurring Sales Ratio Due in part to the growth of Service sales the Recurring Sales Ratio is flat but theabsolute value of Recurring Sales is growing solidly.
(Millions of yen)

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

14

ROE Trends
 ROE had been on a declining trend due in part to an increase in net assets.
 We aim to maintain an average of at least 20% through adherence to the Group's
management principles, by further enhancing profitability and managing assets more
efficiently.
(※)（Millions of yen）

Net Assets

ROE

14,00030%

12,00021.2%

10,000

25%
20%

8,000
15%
6,000
10%

4,000

5%

2,000
-

0%
Q1

Q2

Q3

Q4

FY6/19Q1

Q2

Q3

FY6/20

Q4

Q1

Q2

Q3

FY6/21

Q4

Q1

Q2

Q3

FY6/22

Q4

Q1

Q2

Q3

Q4

FY6/23※Figures are calculated based on the past four quarters.
Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

15

Number of Group Employees Growing headcount to achieve sustainable growth（People）
1,400
1,226 1,240
1,200

1,000
832

855

874

Q2

Q3

938

950

965

963

Q4

Q1

Q2

Q3

1,263 1,270

1,128 1,139
1,107 1,123

1,055

1,030 1,030 1,047

Q4

Q1

800

600

400

200
Q1

FY6/19©2023 AVANT GROUP CORPORATION. All Rights Reserved.

FY6/20Q2

Q3

FY6/21

Q4

Q1

Q2

Q3

FY6/22

Q4

Q1

Q2

Q3

FY6/2316

Financial Condition Trends
 Cash and cash equivalents decreased mainly due to performance bonuses, increase inworking capital due to higher sales, expansion of office space, and purchase of source code,leaving total assets flat.
 On the other hand, liabilities decreased in response to the decrease in cash and deposits,
while net assets increased due in part to the increase in net income, the net asset ratio rosesignificantly because the increase in net assets exceeded the decrease in liabilities.

Total Assets(Millions of yen)

17,00016,617(Millions of yen)

16,69916,50014,000Net Assets and Equity Ratio
72.2
63.0

12,00010,00015,00014,50014,00013,956

13,50013,00012,500FY6/21

FY6/22

FY6/23 Q3

70.0
12,064

10,597

16,00015,500

63.8

(%)

60.0
50.0

8,787

8,000

40.0

6,000

30.0

4,000

20.0

2,000

10.0

0

0.0
FY6/21

FY6/22

FY6/23 Q3Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

17

Cashflow Trends
 Q3 operating cash flow was positive on a 3month basis, but mainly due to an increase inperformance bonuses, an increase in working capital associated with higher sales, and anincrease in income tax payments still negative on a Q1-Q3 cumulative basis.
 Investment cashflow investments also increased due to the purchase of source code from
Metapraxis and office expansion (acquisition of fixed assets and increase in rent deposits).

(Millions of yen)YoY Variance

FY6/23Q3

Yr earlier

FY6/23

% chg

Q1-Q3

YoY Variance
Yr earlier% chg

Operating CF

624

1,099

-475

-93

1,384

-1,477

Investment CF

-51

-59

7

-674

-313

-360

Free CF

572

1,040

-467

-767

1,070

-1,837

Financial CF

-3

-6

3

-502

-428

-74

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

18

Ⅱ. Earnings and Dividend Forecast©2023 AVANT GROUP CORPORATION. All Rights Reserved.

19

Earnings forecast for the fiscal year ending June 30, 2023
 FY6/23 Q1-Q3 saw both sales and profit growth, and we expect sales growth for the full year,
but we maintain our earnings forecasts, because we will continue to increase the number of
employees needed for growth, and conduct full-scale product strategy reviews andsubsequent implementation in Q4, and estimate the total amount of expenses associatedwith these changes to the greatest extent possible.
 Regarding the reorganization costs, the SG&A increase is below expectations, but asdescribed above, costs related to the full-scale review of product strategies and subsequent
implementation may exceed initial expectations.

(Millions of yen)

FY6/22

FY6/23(Actual)(Forecast)

Variance

Chg

Net Sales

18,70321,800+3,096

16.6%

Operating Income

3,247

3,100

-147

-4.5%

OPM

17.4%

14.2%

-

-

Net Income

2,045

2,030

-15

-0.7%

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

20

Shareholder Returns
 The dividend per share for the fiscal year ending June 30, 2023 is forecast as 15 yen, as
targeted in our Medium Term Management Plan.
 DOE for the fiscal year ended June 30, 2022 was 5.0%, well above the TSE-listed company
average (12 months) of 3.1%.
(yen/share)
16.0

13.0

14.0

10.0

6.0

7.5

8%
7%

11.0

12.0

8.0

15.0

6%

9.0

5%

5.0%

4%

6.0

3%

4.0

2%

2.0

1%

0.0

0%
2018

2019

2020

2021

Dividends per share
一株配当（株式分割考慮後）(Split adjusted)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2022

2023

(Forecast)
(予想)
DOE

＜Our shareholder return policy＞



Dividends are an important part of ourshareholder return policy

Avant aims to maintain if not grow thedividend by focusing on indicators such as
dividend on equity (DoE) which is less
impacted by fluctuations in annual earnings.



Avant’s DOE is above the average of allcompanies listed on the Tokyo Stock
Exchange, and over the long term Avant aims
to reach 8%, which is the average of the top
10% of companies in terms of DOE.

21

Ⅲ. Actions to Realize our Materiality©2023 AVANT GROUP CORPORATION. All Rights Reserved.

22

Management View of Current “BE GLOBAL 2023” Plan We believe that the failure to achieve the strategic KPIs was due to the fact that the management teamsof each operating company were not sufficiently involved in the difficult and important management taskof converting to a recurring-type business, nor were they able to connect it to activities on the ground.

FY6/19FY6/20FY6/21

FY6/22
Actual

FY6/23
TargetNet Sales
(¥b)

14.07

15.69

16.23

18.70

18.0～22.0

Operating Income
(¥b)

1.96

2.27

2.79

3.24

3.1～3.8

Recurring Sales
Ratio (%)

31.4

32.6

36.0

34.6

70

Sales Growth +OPM (Points)

30.2

26.0

20.7

32.6

40 or more

ROE（%）

24.6

23.5

23.6

21.1

20 or more

Dividend（yen）

7.5

9.0

11.0

13.0

15 or more

ActualOperational
KPI

Strategic
KPI

Financial
KPI©2023 AVANT GROUP CORPORATION. All Rights Reserved.

ActualActual23

Establishment of Strategic Materiality and 3 Actions
 To realize the Group's vision "BE GLOBAL," we have set our strategic materiality as"Becoming a Software Company that Contributes to Enhancing Corporate Value”.
 This materiality setting facilitates a variety of actions.

[Strategic Materiality]

Becoming a Software Company that Contributes to Enchancing Corporate Value
What our core business model should be

What we contribute to through Management DX

ACTIONS
01

Business Reorganization

Maximizing the Group’s potential to contribute to ourcustomers

02 Upgrading Group Management

To create and implement group strategies from a
medium- to long-term perspective.

03

To achieve our common goal, each company, department, andemployee should have indicators to be aware of, and conduct"management by all".

Visualization of Corporate Value Mechanism©2023 AVANT GROUP CORPORATION. All Rights Reserved.

24

01

Business Reorganization

 Established a structure to realize Management DX by organizing operating companies bysolution domains that enhance corporate value rather than by business model

DIVA Corporation

AVANT Corporation

DX for Dialog

DX for Action

Development of
information environment
for creative dialog

Development of
information
environment for value
creation activities

ZEAL Corporation

DX for Information
Utilization
Development of information
environment for data driven
management

AVANT GROUP©2023 AVANT GROUP CORPORATION. All Rights Reserved.

25

02

Upgrading Group Management

 To facilitate implementation of our strategy, which is our biggest challenge, by splitting theroles of group management among management members who have built up a track record in
the management of each company.
Changed from a company with auditors to acompany with an audit committee to focus
on monitoring from a medium-to-long-term
perspective.

Avant Group Boardof Directors
Group Management
Committee
Advisory Board

An Advisory Board wasestablished to incorporate
external knowledge.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

To strengthen the Group’s management
capabilities from a medium-to-long-term
perspective, strengthen the Group CxO
system and establish an executive process
for Group CxOs.
Avant Board of
Directors

Avant Executive
Board

Zeal Board of
Directors

Zeal Executive
Board

Diva Board of
Directors

Diva Executive
Board

To link the Group’s strategy with thestrategies and plans of eachcompany, the Board of Directors of
the operating companies waschanged to a monitoring board withthe participation of all Group CxOs.

Strengthen the corporate officestructure at each company, they will
be responsible for everything fromstrategy and planning to execution.
26

03

Visualization of Corporate Value Mechanism

 Efforts to visualize mechanisms to increase overall corporate value by linking the activities ofthe entire group to the business divisions of each company.

Group Value Tree

Operating Company Value Tree

NSR (Net shareholder return) = TSR(Total shareholder return)－Cost of equity

EBITDA
GrowthBusiness
Strategy

CapitalGain

Sales ofinhouseproducts

Sales

Maximize
EBITDA
Multiple

TSR

IncomeGain

Sales of 3rd
party
products

IRStrategy

Value addandproductivityDividend
Financial
Strategy

B/S management
Minimize

Sales by
Solution

Capitalstructure(funding)）

EBITDA
MarginProduct
GPM

Sales perpersonCompensat
ion per
personStrategic
cost

Cost of
EquityTalentInvestment

Product
Investment

SG&A ratio

Investment(management)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Investment
Strategy

Operating
costs

27

Operating Companies and Market Environment under New Structure
Business

ディーバ

アバント

ジール

Market environment

In addition to developing the DivaSystem LCA
consolidated accounting system and related products suchas DivaSystem, Dx3-Advance, and DivaSystem FBX, we
are engaged in outsourcing services for consolidated andnon-consolidated accounting operations using DivaSystemand provide comprehensive support for corporate value
creation processes through information disclosure.

Efficiency improvement, industry reorganization, andoverseas expansion are making group management
inevitable for Japanese companies. Due to the need forfaster settlement of accounts and improved disclosure,the consolidated accounting system market grows at
around 6%. Systems are rapidly becoming cloud-based,
and cloud systems are expected to grow at around 20%.
On the other hand, we expect the outsourcing market togrow by 20–25%, supported by needs such as DX reform,
combating individual over-dependence, work-stylereform, and stronger governanceSupporting the creation of corporate value through the
installation and maintenance of the DivaSystem
consolidated accounting system and related products, thedevelopment of Group management support systems suchas AVANT SMD, AVANT Compass, and AVANT Chart, andalso based on customer needs developing andimplementing systems that may incorporate softwaredeveloped by other companies.



The Corporate Governance Code requires companies tomake decisive management decisions based on
management information and to realize improvements incorporate value. Companies need solutions (DX forManagement) to integrate and analyze various types of
information and to make management decisions, executeand report. The DX solution consulting market is
expected to grow by 30%.

Under the auspice of Digital Transformation, throughconsulting and system development, supports thedevelopment of a data-platform and BI solutions fororganizing and integrating internal and external data,
making it “visible” through analysis, reports and graphs,
and providing useful information for management
decision-making. The company has also developed its own
cloud-based analytical platform “ZEUSCloud” and elearning service “ZEAL DX Learning Room.”Advanced companies, which regard management reformby DX as the key to competitiveness, are actively inintroducing systems. In the future, due to the spread ofDX, the DX system integration market is expected to
grow by 30%.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

28

Assumptions for Formulating the next Medium Term Management Plan
 Contribute to clients seeking to enhance their corporate value through“DX for Management".

Strategy

Growth andProfitability

 Clarify the direction of operating companies, reorganize low-profit
products, and actively recruit to facilitate the development of future
core products and strengthen the implementation consulting business.
 Strengthen relationships with 1,400, mainly listed company customers,
and by grasping customer needs provide products and services
without a bias to in-house products. Accelerate the shift to the cloud
and aim to accelerate top-line growth by increasing sales per
customer and the number of customers.

 Sales growth 20% or more (5-year CAGR) GPP 40 points or more (from FY6/28)
GPP=Net Sales Growth Rate + EBITDA Margin

Capital strategy©2023 AVANT GROUP CORPORATION. All Rights Reserved.

 ROE 20% or more
 DOE over 8%29Assumptions for Formulating the next Medium Term Management Plan Aiming for 20% sales growth and expanding margins
Net sales

GPP*：31.8 points
Sales CAGR：12.4％
Average EBITDA margin 16.4％
29.7

GPP

34.4

31.4
27.4
22.2

218

187

162

157

141

121

EBITDA

17

21

25

30

35

FY18

FY19

FY20

FY21

FY22

BE GLOBAL 2023

FY23

FY24

FY25

FY26

FY27

FY28

Next Medium Term Plan

※GPP: Growth Profit Points＝ Sales Growth Rate + EBITDA margin. In the U.S., SaaS companies often use this indicator to measure their financial
health, and while generally a score of 40 points or more is the target, we do not anticipate posting negative EBITDA margins.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

30

Reference: Company overview©2023 AVANT GROUP CORPORATION. All Rights Reserved.

31

About Avant Group• Name: Avant Group Corporation• Founded: May 26, 1997
• Representative: Tetsuji Morikawa,
President and Group CEO• Market Cap: ¥55b (TSE Prime 3836)
Holding Co.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Four Operating Cos.

1. Focused on niche and highly

Core
Value

specialized business areas
2. Close ties with quality customers
3. Business model that brings inrecurring sales

Three Business Segments (FY6/2022)

32

The Avant Group and the Next Ten Years
Mandatory consolidated
reporting/JSOX

DIVA founded

1997

Expansion of groupmanagement

Be GLOBAL

IPO on former
HerculesMoved to TSE 1st
section (Now Prime)

2007

2018

Rebranded

Joined Group in 2012

The Company was founded as
DIVA CORPORATION in 1997.
On the back of a series ofregulatory change in disclosure,
the Company quickly
established itself as leading
developer of consolidated
accounting software in Japan.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2022

Joined Group in 2009

Founded in 2017

In order to maintain growth
momentum in the Group, theCompany made a series ofacquisition, and shifted to aholding company in 2013 topractice excellence in groupmanagement.

The Group set long term
strategy “BE GLOBAL” acompany-wide drive to
become a world-classsoftware company. In 2022,
Avant Group marked its 25th
anniversary with a newGroup structure and new
branding.
33

Consolidated Accounting System User Trend
DivaSystem has accumulated solid customer base as disclosure requirement evolved.
1,400
Corporate
Governance Code

1,200

Optional
reporting of
IFRS accounts

1,000
J-SOX

800
Quarterly
reporting

600

400

Over 1,100 cos

Mandatory reporting of
consolidated accounting

200

0©2023 AVANT GROUP CORPORATION. All Rights Reserved.

34

DivaSystem Client Base

Sold to over 1,100 companies１
Leading market share of 43.2％２ in FY2021. More than half of TSE listed top 100 companies
Offers financial and managerial accounting, governance solutions

26 out of
Top 5054 out of Top100

95 out of Top 200

3,800 listed companies inJapanToyota Motor Corporation
Nippon Telegraph and Telephone
KDDI Corporation
Daikin Industries, Ltd.
Hitachi Group
Chugai Pharmaceutical Co., Ltd.
Denso Corporation
Seven & i Holdings Co., Ltd.
Astellas Pharma Inc.
Fujifilm Holdings
Bridgestone Corporation
Mitsui Fudosan Co,. Ltd.
Mitsubishi Estate Co., Ltd.
Panasonic Corporation
Kao Corporation, etc. (June-2022 Market Cap.)

1.23 million private companies

１ As of December 2020
２ Fuji-Keizai Management “2021 Software Business New Market” Consolidated Accounting Software (Package) Market Share©2023 AVANT GROUP CORPORATION. All Rights Reserved.

35

DIVA Corporation Dx for Dialog
In addition to developing the DivaSystem LCA consolidated accounting system and related products such as DivaSystem Dx3Advance and DivaSystem FBX, we are engaged in outsourcing services for consolidated and non-consolidated accounting
operations using DivaSystem and provide comprehensive support for the company’s value creation process through information
disclosure.
An accounting system that improves the efficiency of consolidated accounting andconsolidated financial reporting. In response to changes in the disclosure regime, such as
the accounting “Big Bang” and the introduction of J-SOX, the number of companies thathave introduced it has increased to approximately 1,200.

Product

By making journal entry details and balance data of Group subsidiaries visible at the
Head Office, we will promote actions by the Head Office and at the same time bringdiscipline to the behavior of subsidiaries to strengthen Group governance.

A web-based application that collects and reports data required for group management
operations such as group budget management and forecast management

Services

Consolidation process outsourcing

By contracting out the business processes necessary for consolidated accounting and disclosure(settlement of accounts of subsidiaries, data collection, consolidation processing, preparation ofreporting materials, and disclosure), customers can reduce their workload and shift to more valueadded business such as numerical analysis and factor analysis.

Global fund management advanced
support service

This system serves as a platform for fund management and financing activities across theentire Group. By using TMS, the Head Office can obtain detailed information of the entire
group in real time and online on TMS instead of using past information posted in a
spreadsheet.

Accounting consulting services

Utilizing the investment experience gained from supporting the accounting and settlement
operations of many listed companies, members with expertise and experience, including
certified public accountants, contribute to the creation of “structures, operations andsystems.”©2023 AVANT GROUP CORPORATION. All Rights Reserved.

。

36

AVANT Corporation DX for Action
Based on the pillars of group management, consolidated accounting, and business management, we develop software to provide thesesolutions in-house, and provide one stop support for customers’ “realization of visualization and maximization of invisible corporate value”
from consulting to system planning and construction, installation support, and operation and maintenance. We also support thedevelopment and introduction of systems that combine our poducts with software developed by other companies.

Group
Management

We provide management dashboards and business portfolio management software and consulting
services to organize information of societal value such as financial information and non-financial
information, to visualize corporate value and clarify the mechanisms that constitutes corporate value,
and to utilize these in management decisions

Consolidated
Accounting

Through the introduction and operation of DivaSystem LCA, we focus on consulting and SI services fordisclosure and consolidated accounting, and we support clients’ consolidated accounting operations bysupporting global operations through compliance with IFRS, and the governance of overseas bases

Business
Management

Based on our track record of developing the latest data platforms in a wide range of areas, we will
support the improvement of business earning power by developing business management processes tomaximize business performance using various EPM/CPM software, not limited to our own products.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

37

ZEAL Corporation DX for Information Utilization
Through system development and consulting, promotes corporate Digital Transformation anddata driven management by organizing and integrating internal and external data with AI and BI
solutions that analyze, forecast, and visualize data. Other services include ZEUSCloud, an inhouse developed cloud-based data-analysis platform; ZEAL DX-Learning Room, an e-learning
service that supports the development of human resources for DX; and CO-ODE, a service that
distributes and provides user-friendly processed open data.

Data Platform

Business Intelligence

An analysis platform for extracting, processing,and analyzing various management information(customer, sales, inventory, production data,etc.) as appropriate, collected and accumulated
both internally and externallyThis system enables quick management
decisions by displaying information organizedon a data platform in an easy-to-understandform.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

38

Cautionary Statement Concerning Forward-Looking Statements
The information in this document regarding business forecasts and other future projections andstrategies is based on judgments made by the Company based on information reasonably available to it
at the time this document was prepared and within the scope of what is normally expected. However,actual results may differ materially from those discussed in the forward-looking statements due to theoccurrence of extraordinary circumstances or unforeseeable results that could not be foreseen in thenormal course of events. While we endeavor to actively disclose information that we believe is important
to investors, we urge you not to base your decisions solely on the earnings forecasts contained in thisdocument. Please do not reproduce or transmit this material for any purpose without permission.

■Contact

Avant Group Corporation, IR Office
ir@avantgroup.com©2023 AVANT GROUP CORPORATION. All Rights Reserved.

39