Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSBusiness Results Briefing
1Q FY12/2017
Broadleaf Co., Ltd.
TSE 1st Section: 3673

Copyright (c) Broadleaf Co., Ltd. All rights reserved

May 12, 2017

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Chapter 1

Overview of 1Q FY12/2017
Business Results

Contents

2

Chapter 2

Acquisition of Tajima Inc.

12

Appendix [Reference]
Corporate Profile, Sales Fields, etc.

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19

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Chapter 1

Overview of 1Q FY12/2017 Business Results

Copyright (c) Broadleaf Co., Ltd. All rights reserved

2

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSPL Summary
POINT

Income declined due to decreased sales and increased stock-related expenses.
(¥ million)

FY2017 1Q
Results
Net sales

YoY change

FY2016 1Q
YoY (Ratio)

Results

3,295

-153

-4.5%

3,448

Operating income

-78

-363

-

285

Net income

-57

-235

-

178

-1.7%

-6.9%

-

5.2%

-¥1.29-¥4.97

Net income ratio

EPS*

¥3.68

• EPS in 1Q FY12/2016 is based on the assumption that a stock split (1:2) that comes into force on December 17, 2016 was
carried out at the beginning of the fiscal year.
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3

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSSales by Category
POINT

Sales in Network Service continued to increase, but were unable to offset a
decrease in Business Application Software.
(¥ million)

FY2017 1Q
Business Application Software
System Support
Maintenance
Provision of Consumables
Network Service
Stock
Transaction

FY2016 1Q

Results
YoY change YoY (Ratio)
1,794
-209
-10.4%
300
-14
-4.5%
135
-10
-6.6%
165
-4
-2.6%
1,201
69
6.1%
957
61
6.8%

Results
2,003
314
145
169
1,131
896

231

11

5.0%

220

159

0

0.3%

158

72

10

17.0%

62

Others13-3-18.3%

16

Net sales

3,295

-153

-4.5%

3,448

PSF*1
Order Placement andAcceptance*2*1: Payment agency service for recycled parts*2: BL Parts Order System and CarpodTab
Copyright (c) Broadleaf Co., Ltd. All rights reserved

4Breakdown of Sales in Business Application Software

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSPOINT

Automotive business application software recorded decreased sales, while salesof non-automotive business application software rose.
(¥ million)

FY2017 1Q
Automotive
RenewedNew customers
Non-automotive
RenewedNew customers
Total
RenewedNew customers
OthersBusiness Application
Software total sales

FY2016 1Q

Results
1,119
960
160
434
298
137
1,553
1,257
296
241

YoY change
-248
-230
-19
55
79
-24
-193
-151
-42
-16

YoY (Ratio)-18.1%-19.3%-10.4%
14.6%
36.2%-14.8%-11.0%-10.7%-12.5%
-6.1%

1,794

-209

-10.4%

Copyright (c) Broadleaf Co., Ltd. All rights reserved

Results
1,367
1,189
178
379
219
160
1,746
1,408
338
257
2,003
5

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSCurrent Status of Contract Renewal with Users
 Image of contract renewal with users(1) Conclusion oflease agreement(6 years)(2) After about 4.5 years have passed, contract
renewal negotiations are commenced with users.

6-year lease contract

Negotiations and renewal(3) Closing before the expiration of the 6-year period

Customer A
Customer B
Customer C

The number of agreements fluctuates depending on the renewal time, andthe unit price fluctuates depending on the remaining lease.

 1Q activities (review of proper level of remaining lease period),
issues and countermeasures
Review of proper level[Activities policy]
Shorten the period of remaining leases
toward annual/monthly billing systems(Thoroughly control and adjust the leases tominimize the influence of the shortening of
the period)[1Q activities & issues]
Control and adjustment for each case did notwork well, so the remaining lease periods
were shorter than expected=> Sales quantity in 1Q decreased

Copyright (c) Broadleaf Co., Ltd. All rights reserved[Countermeasures]
Try to thoroughly enhance the control ofeach project on the initiative of the
Headquarters and increase the unit pricethrough upselling6

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSKey Indicators in Network Service Domain
POINT

Computerized automotive parts ordering service on industry platform steadily
expanded toward the industry standard.

End of 1Q FY2017

End of FY2016

Results

Results

 Transactions
BL Parts Order System
Number of connections withmaintenance shops
Number of parts dealers
participating in transactions

2,079

2,041

335

335

3,129

3,054

CarpodTab
Number of contracts

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7

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSBreakdown of Expenses
POINT

Stock-related costs went up associated with stock splits, shareholder benefits,etc., while purchases decreased.
(¥ million)

FY2017 1Q
Results
Net sales

FY2016 1Q

YoY change

Results

3,295

-153

3,448

947

-103

1,050

2,430

67

2,362

1,188

-14

1,202

47

-93

140

1,195

174

1,021

Other operating revenue

5

-247

252

Other operating expenses

1

-2

3

-78

-363

285

1,376

-20

1,396

255

-119

374

Cost of sales
SG&A expenses
Personnel Expenses
R&D Expenses
OthersOperating income
Total personnel expenses*
Subcontract cost

* Sum of labor cost (cost of sales) and personnel expenses (SG&A expenses)
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Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSBS Summary
POINT

The cash and deposits balance decreased due to the continued acquisition ofown shares from the previous year (to January 31).
(¥ million)

FY2017
Change fromEnd of 1Q
end of FY2016

End of
FY2016

Current Assets

9,748-2,557

12,304Non-current Assets
Total Assets

12,992
22,740-25-2,58213,01825,322Current Liabilities

3,736-1,244

4,980

1,003

-180

4,739

-1,424Non-current
Liabilities
Total Liabilities

Major factors forincrease/decrease
Decrease in cash and deposits (-1,296)
Decrease in operating receivables (-1,366)

Decrease in operating debt (- 681)
Decrease in accrued income taxes (- 601)

1,183 Decrease in long-term loans payable (-180)
6,163

Total Shareholders'Equity18,001-1,15819,159Total Liabilities andShareholders' Equity

22,740-2,582

25,322

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Recognition of net loss (-57)
Decrease by acquisition of own shares(-530)
Decrease by dividend of surplus (-563)

9

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSFY12/2017 Results Forecasts
POINT

There is no change from the results forecast published on February 14.
(¥ million)

FY2017
1H Forecasts
Net sales

FY2016
1H*1

Full-year Forecasts

Full-year

8,100

17,000-16,760Operating income

600

2,000

-

2,953

Profit

390

1,230

-

1,876

EPS

¥8.81

¥27.79-¥39.47

Interim ¥11.0

Year-end ¥11.0

Interim ¥8.75*2

Year-end ¥12.5

DPS（Full-year ¥22.0）（Full-year ¥21.25）*1 1H FY2016 results in IFRS will be disclosed in 2Q FY2017(Reference) 1H FY 2016 results [Japanese standard/Non-consolidated] Net sales ¥8,196 million, Operating income ¥920
million, Net income ¥622 million*2 Assumes that the stock split (1:2) that came into force on December 17, 2016 was made at the beginning of the year
Copyright (c) Broadleaf Co., Ltd. All rights reserved

10Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS(Reference) 1H FY12/2017 Sales Forecasts by Category(¥ million)(Reference: Japanese standard/
Non-consolidated)

FY2017

2Q Estimates* 1H Forecasts
Business Application
Software
System Support
Maintenance
Provision ofConsumables
Network Service
Stock
Transaction
PSF
Order Placement
and Acceptance
Others
Net sales

FY2016
2Q Results 1H Results

3,206

5,000

3,281

5,293

320
165

620
300

319
144

633
289

155

320

174

343

1,279
993

2,480
1,950

1,135
904

2,270
1,803

229

460

226

446

161

320

163

322

68

140

62

124

57
4,805

70
8,100

4
4,736

20
8,196

* FY2017 1H Forecasts － 1Q Results
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Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Chapter 2

Acquisition of Tajima Inc.

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12Overview of Share Acquisition of Tajima Inc.

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSPOINTOn May 12, the Company concluded a share transfer agreement with Tajima Inc. toacquire all its shares and make it a subsidiary.

Company to be acquired:Tajima Inc.

Acquisition price:¥1,670 million (100% acquisition)* Except advisory expenses of ¥110 million

Funds for acquisition:

Cash reserves

Scheduled date of share transfer: July 31

Impact on business results in this fiscal year:
To be disclosed as soon as confirmed(Tajima Inc. will be included in the scope of
consolidation from July 2017.）
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13

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Overview of Tajima Inc.
POINT

This company has advantages in different customer groups from ours. Its Isshin
Tasuke series has won high recognition in the industry.
Sales¥3,370 million
Application

11,000

Customercompanies throughout Japan

Data
Support

Maintenance＆Inspection

Car
sales

Body
Repair&
Painting

1997
Employees 207 persons
Number of offices 35 offices
Established* The above figures are as of September 30, 2016 (Source: Tajima Inc. HP)
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14

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSMarket Conditions
POINT

Among automotive aftermarket operators, a clear trend toward strengthening the links
with car owners centered on vehicle inspections and maintenance has been observed.
The are increasing opportunities to provide our estimate system to various operators.
Total number of operators: More than

200 thousand*Sales market(Number of users: Broadleaf approx.
20,000 + Tajima Inc.11,000)

Possession- Car dealers- Auctioneers- Gas stations- Car accessory
stores- Maintenanceshops- Sheet metals
plants

Sale
Vehicle inspections/MaintenanceDistribution- Parts trading
companies

Automotive aftermarket- Electriccomponent
contractors- Glass dealers- Recycling
companies

Recycling
Vehicle inspection and maintenance service providers for car users are assumed to be the target market
Number of maintenance operators: approx. 92,000 (MLIT), number of gas stations: approx. 49,000 (METI), number of sheet metal plants: approx. 30,000(estimated by Broadleaf), number of car dealers: 83,000 (METI)

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15

Purpose and Effects of the Acquisition

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSPOINTWith the acquisition of Tajima Inc., the second largest company in the industry, we
will be able to implement the mid- and long-term business strategies in more stableconditions as the market leader.
(1) Expansion of the target market & enhancement ofcompetitiveness(2) Acceleration of the industry standardization on thefocusing services(3) Sharing & synergy of knowledge(4) Improved efficiency of facilities and procurement

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Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Future Schedule
POINT

Currently in preparation for consolidation from 3Q 2017

Sales synergy
Cost synergy
Shared conditions
Effects of the acquisition
March 6, 2017
Basic Agreement
concluded

Transfer Agreement negotiation(completed)May 12
Share Transfer
Agreement concluded

July 31
Shares to betransferred

Pre-PMI

Guidance including Tajima(early August) to be publishedin 2Q Business Results)

Post-PMI

Scrutiny of the impact on the results for this year
(to early August)Initiatives for acquiring Tajima Inc. and making it a subsidiary
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17

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS(Reference) Future Image of Broadleaf[Expansion of target markets][Evolution of services][Markets and customers]

AppliedApplication of advanced technologies
technology- Application of VR/AR, AI, etc.
(Collaboration with other industries)
servicesAutomanufacturers
Services

Distribution

MobileManufacturingservices

Tourism

Machine tools

Automotive aftermarket
business operators

Bus

Information PF

Distribution PF

Information PF

Finance

Big data & analytics
Information- Auto safety and security support services
services(Collaboration with auto manufacturers)[Services]z
Cloud service & software- Business applications- Work efficiency analysis tool (OTRS)

Industry-specificsystems

Business Applications(Web Ver.)

Network/ Web services- EC sites (Buhin MAX)- B2B ordering service (BLP/CPT)[IT infrastructure]

Vehicles

GCP

Components

Information network

Histories
Internet

Auto parts distribution andsettlement services- Recycled parts market (PSN)

Platform

Overseas (components distribution
network & platform)

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18Appendix [Reference Information]

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19Appendix 1

Corporate Name

Corporate Profile

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSBroadleaf Co., Ltd.

Representative Director, President and CEO
Kenji Oyama

Listed on

Listed on the First Section of the Tokyo Stock Exchange on March 22, 2013(3673)

Founded/Established

December 2005/September 2009

Capital StockJPY 7,147 million

Business Outline

IT network system to support automotive aftermarket operators and provisionof services on the platform(Business applications, platforms for cooperation with different industries,
recycled parts marketplace, development of car-related contents, etc.)

Head Office Address

Floor 8, Glass Cube Shinagawa, 4-13-14 Higashi-Shinagawa, Shinagawa-ku,
Tokyo

Sales Offices

33 offices in Japan

Development Centers

3 centers in Japan (Sapporo, Tokyo and Fukuoka)

Employee

764 persons(as of December, 31, 2016)

Copyright (c) Broadleaf Co., Ltd. All rights reserved

20Appendix 2

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSSales Fields
Although the Company is in a single segment of IT services businesses,
we have adopted the following classifications by business area

Major
category

Classification
MediumSmall category
category

Detailed businesses- Development and sale of industry-specific business applications- Development and sale of operation analysis/optimization software- Purchase and sale of PC bodies, printers, etc.

Business Application Software

Maintenance- Business application maintenance service to the Company’s Business
Application Software customers and provision of hardware maintenanceservices

Provision of consumables- Purchase and sale of exclusive forms and OA supply goods to be used for thebusiness applications

System
Support

Database provision services- Provision of database of car-related vehicle information and parts-related
information that is updated daily

Server provision services- Consideration for server maintenance required for the use of network-typesystems

Recycled parts settlement
agency services- Operation of recycled parts distribution network “Parts Station NET” thatshares inventory information on recycled parts
Collecting fees as transaction amount settlement agency for parts dealing

Stock

Network
Services
Transactions

Computerized ordering- Provision of computerized ordering system for automotive parts
system for parts, tablet-type - Provision of tablet-type operation terminals to maintenance business
operation support tools, etc.
operators, etc.
Others- Products and services other then the above

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21

Appendix 3

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONSBroadleaf Group(Domestic) Tajima Inc.

* After the share transfer
on July 31, 2017

100%

Development and sale of systems

 SpiralMind Co., Ltd.

100%

Research and development of technologies(Overseas)
Broadleaf Co., Ltd.
Development and sale of systems

 博楽得信息科技（合肥）有限100%

Development and sale of systems

 北京盛源博乐信息科技有限公司

100%

Development of systems

 Broadleaf I.T. Solutions Inc.

100%

Development and management of database

 BLISAM TRADING CORP

50%

Import and sale of automotive parts

: Consolidated subsidiary, : Companies accounted for using the equity method%: Percentage of voting rights owned
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22

Broadleaf Co., Ltd.
Q1 2017
INVESTOR RELATIONS

Disclaimer
Results forecasts and future predictions provided in this document are theCompany’s judgment based on the information available as of the time of
preparation of the document and contain potential risks and uncertainties.
Accordingly, please understand that the actual results may differ from the results
forecasts provided here.

[Contact Information]
Broadleaf Co., Ltd.
Corporate Communications (IR/PR) Department
E-Mail: broadleaf-ir@broadleaf.co.jp

Copyright (c) Broadleaf Co., Ltd. All rights reserved