3836 TSE PrimeAvant Group Corporation
Financial Results Briefing
for the first quarter of Fiscal Year June 2023
October 31, 2022

This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English
translation, Japanese text shall prevail©2022 AVANT GROUP CORPORATION. All Rights Reserved.

INDEX
Ⅰ. Summary of financial results
for the first quarter of FY June 2023
Ⅱ. Earnings and Dividend Forecast＊Figures in this material are rounded down to the unit of display

The information contained in this material regarding the business outlook and other forecasts and strategies etc. are forward-looking statements and are determinedwithin 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 thatis 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.

©2022 AVANT GROUP CORPORATION. All Rights Reserved.

2

I. Summary of financial results
for the first quarter of FY June 2023

©2022 AVANT GROUP CORPORATION. All Rights Reserved.

3

Results Highlights
Accelerated pace of revenue growth on the back of strong demand was partially offset by higher
personnel and HoldCo expensesNet sales increased 24.2% YoY, capturing strong demand growth in all segments, particularly led by the Digital
Transformation Business.
Fixed labor costs due to increased headcount and outsourcing expenses grew at a high rate. The HoldCo expenses related
to the restructuring also increased, resulting in only a modest improvement in the operating margin.

(millions of yen)

FY22/06

FY23/06

Year-on-Year

Q1<YtD>

Q1<YtD>

Variance

Net Sales

4,047

5,025+ 978+ 24.2%

Cost of Revenue

2,227

2,776+ 548+ 24.6%

SG&A expenses

1,357

1,634+ 276+ 20.4%

Operating Income

461

614+ 153+ 33.2%

OP Margin

11.4%

12.2%

-+ 0.8 point

Ordinary Income

441

601+ 159+ 36.1%

Net Income

262

370+ 108+ 41.5%

EBITDA

519

709+ 190+ 36.7%©2022 AVANT GROUP CORPORATION. All Rights Reserved.

%CHG

4

Results by Business Segment
G. Governance and DX Businesses increased revenues and absorbed increase in expenses, while
Outsourcing Business continues rapid growthThe Group Governance Business improved its profit margin as increased revenues partially offset increased outsourcing
and labor expenses. The DX Business also posted a significant increase in profit, as increased revenues offset increased
costs. The Outsourcing Business continues to grow steadily with high growth in both sales and profits.
(millions of yen)Group GovernanceDigitalTransformationOutsourcing©2022 AVANT GROUP CORPORATION. All Rights Reserved.

Year-on-Year

FY22/06

FY23/06

Q1<YtD>

Q1<YtD>

Variance

Net Sales

1,957

2,409+ 451+ 23.1%

Operating Income

286393+ 106+ 37.3%

OP Margin

14.6%

16.3%

-+ 1.7 point

Net Sales

1,564

1,916+ 352+ 22.5%

Operating Income

187287+ 100+ 53.9%

OP Margin

12.0%

15.0%

-+ 3.1 point

Net Sales

710

886+ 175+ 24.7%

Operating Income

161

198+ 37+ 23.2%

OP Margin

22.7%

22.4%

-△ 0.3 point

%CHG

5

Group Governance BusinessProfit increased thanks to the absence of increased expenses in the previous fiscal year,
while the pace of revenue growth accelerated

Steady expansion of customer needs continued, resulting in a significant increase in revenues over the same period of theprevious year. While the adoption of cloud-based consolidated accounting software is progressing, growth in groupmanagement solutions had a significant impact on revenue growth.
The operating income margin improved by 1.7 percentage points from the previous year, as the increased revenue offset
higher labor and outsourced processing costs, on top of better comparison of upfront investment costs to strengthen
product development and consulting sales capabilities launched in the previous year.

(millions of yen)

Year-on-Year

Consolidated

FY22/06

FY23/06

Accounting

Q1<YtD>

Q1<YtD>

Variance

Net Sales

1,957

2,409+ 451+ 23.1%

Operating income286393+ 106+ 37.3%

Operating Margin

14.6%

16.3%

New Orders

1,886

2,589+ 702+ 37.2%

Outstanding Orders

2,278

3,313+ 1,034+ 45.4%©2022 AVANT GROUP CORPORATION. All Rights Reserved.

%CHG+1.7point

6

Digital Transformation Business
Significant increase in profit due to higher revenues
 In addition to data platform construction projects, for which demand has been strong recently, there wasa large increase in BI solution implementation projects, and sales of business performance management(CPM) tool projects also increased, resulting in a high level of revenue growth, up 22.5% YoY. Orders andbacklogs also continued to grow at a high level.
 Although labor and subcontracted processing costs increased due to higher sales, this was offset by theeffect of higher sales, resulting in a significant increase in operating income.
(millions of yen)

Year-on-Year

FY22/06

FY23/06

Q1<YtD>

Q1<YtD>

Variance

Net Sales

1,564

1,916+ 352+ 22.5%

Operating income

187287+ 100+ 53.9%

Operating Margin

12.0%

15.0%

New Orders

1,296

2,099+ 803+ 62.0%

Outstanding Orders

975

1,314+ 338+ 34.6%

Business Intelligence©2022 AVANT GROUP CORPORATION. All Rights Reserved.

%CHG+3.1point7Outsourcing Business
Strong orders led to increased sales, resulting in high profitability Recurring sales growth slowed slightly but remained strong, increasing approximately 20% YoY.
Installation and consulting services associated with new orders contributed to revenue growth, resulting
in a high level of sales growth.
 Operating profit margin remained at the same level, absorbing cost increases due to increased officespace in conjunction with increased headcount. Orders and order backlogs also grew strongly due to anincrease in new orders.
(millions of yen)

Year-on-Year

FY22/06

FY23/06

Q1<YtD>

Q1<YtD>

Variance

Net Sales

710

886+ 175+ 24.7%

Operating income

161

198+ 37+ 23.2%

Operating Margin

22.7%

22.4%

New Orders

722

832+ 109+ 15.2%

Outstanding Orders

1,469

2,392+ 922+ 62.8%

Outsourcing©2022 AVANT GROUP CORPORATION. All Rights Reserved.

%CHG△0.3point8Group Cost Structure
Outsourcing expenses increased due to accelerating revenue growth, personnel costs
increased in line with our expectation


Fixed labor costs and other expenses increased due to an increase in personnel to strengthen product development andconsulting sales but are within the expected range. Outsourcing expenses increased in the G Governance and DX
Businesses due to the accelerated pace of revenue growth. Other expenses increased at the holding company due to therecording of expenses related to the reorganization.
Operating margins improved slightly as higher revenues partially offset higher fixed costs.

Net Sales
Personnel expenses
Basic compensation
Performance-relatedOutsourcing expenses
Office expenses
OthersTotal expenses
Operating income
Operating income

FY22/06

FY23/06

Q1<YtD>
4,047
2,242
1,672
569
568
213
560
3,585
461
11.4%

Q1<YtD>
5,025
2,506
1,895
610
860
221
821
4,411
614
12.2%

Year-on-Year
Variance%CHG+978+24.2%+264+11.8%+223+13.4%+41+7.2%+291+51.3%+8+3.8%+260+46.5%+825+23.0%+153+33.2%+ 0.8 point(Note) Expense items are shown on an incurred basis, and adjustments in cost of sales calculations are included in "Others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

(millions of yen)9Selected Quarterly Financial Data

Outsourcing expenses increased due to accelerated rate of revenue growth, but personnel cost increase was within
expectations(millions of yen)

1Q

FY19/06

2Q

3Q

4Q

1Q

FY20/06

2Q

3Q

4Q

1Q

FY21/06

2Q

3Q

4Q

1Q

FY22/06

2Q

3Q

4Q

1Q

Net Sales

3,180 3,752 3,631 3,512 3,714 4,019 4,050 3,906 3,601 4,036 4,271 4,326 4,047 4,703 5,035 4,916 5,025

Cost of Revenue1,772 1,929 2,057 2,020 2,149 2,205 2,113 2,056 1,997 2,113 2,208 2,252 2,227 2,375 2,492 2,686 2,776

Gross Profit

1,408 1,823 1,574 1,492 1,565 1,814 1,936 1,849 1,603 1,922 2,063 2,074 1,819 2,328 2,542 2,230 2,249

SG&A expenses

1,027 1,188

982 1,133 1,050 1,239 1,338 1,258 1,125 1,104 1,192 1,445 1,357 1,308 1,401 1,606 1,634

Operating Income

380592OP Margin

12.0 16.9 16.3 10.2 13.8 14.3 14.8 15.1 13.3 20.3 20.4 14.5 11.4 21.7 22.7 12.7 12.2

Ordinary Income

380633

593

364

520

573

598

589

482

823

880

622

441

995 1,128423

601

Net Income

237

403

389

286

334

339

344

519

303

520

546

517

262

603

706

472

370

EBITDA

417

673

634

408

557

621

658

669

537

880

926

695

519 1,097 1,254

711

709

634

358

514

574

598

591

478

817

871

629

461 1,020 1,140624

FY23/06

2Q

3Q

4Q

614

EBITDA Margin (%) 13.1 17.9 17.5 11.6 15.0 15.5 16.3 17.1 14.9 21.8 21.7 16.1 12.8 23.3 24.9 14.5 14.1
Effective from the beginning of the first quarter of 2022, the Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

10Quarterly Trends in Major KPIs

Effective from the beginning of the first quarter of 2022, the Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

11

Selected Quarterly Segment Data(millions of yen)

FY June 20191Q

Outstanding

Income

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY June 2022
4Q

1Q

2Q

3Q

FY June 2023
4Q

1Q

1,611 1,890 1,693 2,579 1,893 2,008 1,944 2,466 1,721 1,945 1,912 2,930 1,886 2,629 2,298 3,340 2,589

Digital Transformation

1,235 1,223 1,439 1,365 1,565 1,347 1,191 1,313 1,379 2,083 1,650 1,526 1,296 2,078 1,464 2,063 2,099
439

319

363

685

599

468

505

586

651

586

765

983

722 1,223

565 1,521

832(Elimination of inter-segment transaction)-201-115-92-266

-102

-201

-64

-164

-149

-201

-223

-161

-238

-172

-170

New Orders

3,085 3,317 3,404 4,363 3,955 3,623 3,576 4,202 3,602 4,413 4,105 5,279 3,667 5,766 4,154 6,483 5,350

Group Governance2,261 1,927 1,611 2,173 2,143 1,910 1,689 1,999 1,920 1,769 1,642 2,349 2,278 2,586 2,358 3,132 3,313

Digital Transformation

1,004

958 1,044 1,204 1,340 1,245926

854

Outsourcing

734

650

597

852

948

928891

950 1,031 1,008 1,112 1,457 1,469 1,937 1,716 2,446 2,392(Elimination of inter-segment transaction)

-260

-232

-177

-303

-264

-312

-209

-208

Orders Outstanding

3,739 3,304 3,076 3,927 4,168 3,771 3,298 3,595 3,596 3,974 3,807 4,761 4,381 5,444 4,563 6,131 6,455

Group Governance

1,783 2,225 2,008 2,017 1,922 2,242 2,165 2,154 1,801 2,096 2,040 2,223 1,957 2,322 2,526 2,566 2,409

Digital Transformation

1,161 1,268 1,353 1,206 1,429 1,441 1,510 1,385 1,382 1,495 1,734 1,637 1,564 1,806 1,902 1,741 1,916

Net Sales Outsourcing

Operating

3Q

FY June 2021

Group Governance
New Orders Outsourcing

Orders2Q

FY June 2020

850 1,438 1,354 1,244-206-242

-300

-290

-164

975 1,247-343

-327

-442

2Q

3Q

4Q

809 1,131 1,314-319

-578

-563

380

402

416

430

504

489

541

527

569

609

662

637

710

755

786

791

886

(Intra-segment elimination)

-144

-143

-147

-141

-141

-153

-167

-161

-152

-165

-165

-171

-185

-180

-180

-183

-186

Net Sales

3,180 3,752 3,631 3,512 3,714 4,019 4,050 3,906 3,601 4,036 4,271 4,326 4,047 4,703 5,035 4,916 5,025

Group Governance

244

362

346

339

330

379

378

528

323

520

530

561

286

599

669

507

393

Digital Transformation

102

210

233

89

180

171

209

130

115

226

319

150

187

365

428

263

287

Outsourcing

101

100

79

37

118

116

133

-4

130

165

165

62

161

195

221

82

198

(Elimination of inter-segment transaction)

-68

-39

-67

-106

-114

-93

-122

-63

-90

-94

-151

-136

-173

-139

-178

-216

-264

Opertating Income

380

634

592

358

514

574

598

591

478

817

862

637

461 1,020 1,140

636

614

Effective from the beginning of the first quarter of 2022, the Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

12

Total Number of Group Employees©2022 AVANT GROUP CORPORATION. All Rights Reserved.

13

Financial Condition & Cash Flows
Financial Status

Sep 2022

Total Liabilities
Total Assets
15.9

billion yen

5.4（millions of yen)

Operating CF
Investment CF

billion yen
Net Assets
10.4

Free CF
Financial CF

FY23/06

Q1

Q1

(173)

(491)

(351)
(417)

(%)

(111)
(603)(493)44.4

50 53.3
4030

FY22/06(177)7060billion yen
Cash Flows

Equity Ratios

47.7

43.7

48.2

49.4

52.9

54.4

56.6

61.1

63.0

63.8

65.7

39.3

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23Sep

Key Factors for change(millions of yen)・ Profit before income taxes
・ Depreciation
・ Decrease in provision for bonuses
・ Increase in deposits received
・ Decrease in unearned revenue
・ Increase in A/P - other and accrued expenses
・ Income taxes paid

601
101(712)691(133)
128
(893)

・ Payments of leasehold and guarantee deposits
・ Proceeds from redemption of marketable securities

(120)
90

・ Dividend payments(489)

Effective from the beginning of the first quarter of 2022, the Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

14

Return on Equity (ROE) trends
Our goal is to maintain over 20% on average in the mid- to long-term
 We aim to improve ROE, while maintaining the Group’s management principles, by enhancing profitability
further and managing assets more efficiently

Figures are calculated based on the past four quarters.
Effective from the beginning of the first quarter of 2022, the Company adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.
©2022 AVANT GROUP CORPORATION. All Rights Reserved.

15

Ⅱ. Earnings and Dividend Forecast©2022 AVANT GROUP CORPORATION. All Rights Reserved.

16

Earnings forecast for the fiscal year ending June 30, 2023
Expect to maintain the pace of revenue growth, but maintain the forecast for profit decline
due to upfront investments
 The company positions the fiscal year ending June 30, 2023 as a preparation for the start of the next
medium-term management plan, and the upfront investment phase will continue.
 However, we expect a decrease in profit due to an increase in personnel expenses resulting fromaggressive hiring, an increase in expenses accompanying organizational restructuring, and expenses toprepare the environment for accelerating the shift to cloud computing in existing businesses, such as theliquidation of low-profit products and projects.
(millions of yen)2022
June(Actual)2023
June(Forecast)

Variance% CHG

Net Sales

18,70321,800+ 3,096+ 16.6%

Operating Income

3,247

3,100

△ 147

△ 4.5%OP Margin

17.4%

14.2%

――Net Income

2,045

2,030

△ 15

△ 0.7%©2022 AVANT GROUP CORPORATION. All Rights Reserved.

17

Dividend Forecasts
Dividend forecast for the fiscal year ending June 30, 2023 is 15 yen per share The dividend per share for the fiscal year ending June 30, 2023 will be 15 yen, as targeted in the mid-term
management plan.
 DOE for the fiscal year ended June 30, 2022 was 5.1%, well above the TSE-listed company average (12months) of 3.0%.
＜AVANT’s shareholder return policy＞
 Cash dividends are an important part ofshareholder return policy
 AVANT plans to maintain sustainable growth individends, and rely on dividends on equities (DoE)rather than cash income which could fluctuate
and unpredictable AVANT's ratio of dividends to net assets should
be higher than the average of all companies listedon the Tokyo Stock Exchange, and over the longterm, AVANT aims to reach 8%, which is theaverage of the top 10% of companies in terms ofthe ratio of dividends to net assets.

©2022 AVANT GROUP CORPORATION. All Rights Reserved.

18