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2Q FY12/2022 Business Results Briefing Material

Broadleaf Co., Ltd (3673)
August 9, 2022
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Contents

1. Overview of 2Q FY12/2022 Business Results
2. Results Forecast for FY12/2022
3. Progress of the Medium-Term Management Plan (2022-2028)
4. Supplemental Information

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |2

1. Overview of 2Q FY12/2022 Business Results

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |3

Overview of 2Q FY12/2022 Business Results

Overview of Consolidated Financial Results
From 2022, the Company has suppressed sales of packaged systems andbegan switching to cloud services which are recorded as monthly sales.
(Millions of yen)

Revenue

FY2022
1H

FY2021
1H

YoY change

6,520

9,937

-3,417

Cloud service

1,046

847

+199

Packaged system-3,615

5,474

9,090

Cost of sales

2,459

2,867

-408

Gross profit

4,061

7,070

-3,009

SG&A expenses, etc.

5,460

5,827

-368

Operating profit *-1,3981,243-2,641

Profit before tax *-1,4581,239-2,697-1,109795-1,904-12.57 yen

9.05 yen-

Profit attributable to owners of the parent *Basic earnings per share**minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |4

Overview of 2Q FY12/2022 Business Results

Quarterly Trends in Sales of Cloud Service
Sales of software services has progressed as planned.
(Millions of yen)

Software service
The number of licenses for “.c Series” has increased

454
417

489

430

517
170

529
163

Marketplace

177
179
170

175

247

255

276

The number of monthly subscription licenses for“.NS Series” has increased→ Users who have multiple lease contracts with different expiration dates
will switch to “c Series” at the timing of the expiration of the last contract.
Until then, for contracts that expire earlier, users will renew the contracts tomonthly subscription license for “.NS Series.”

Sales has decrease due to the impact of a decrease in the transaction
volume in the auto recycled parts market.

312

347

366

Cloud service

1Q

2Q

3Q
FY2021

4Q

1Q

2Q

FY2022
1H

FY2021
1H

YoYchange1,046

847

Marketplace

333

345

+199
-12

Software service

713

503

+211

FY2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |5・Sales of “Software service” has increased due to an increase in the number of licenses for “.cSeries” and an increase in the number of licenses for “.NS Series” in the form of monthly
contracts.
・For “.NS Series,” users with multiple contracts will switch to “.c Series” after all contracts
expire if the expiration dates differ.
・If the user switch to “.c Series” before the expiration of the contract, negative sales will berecorded. Therefore, users will keep using “.NS Series” in the form of monthly contract until
all contracts expire.
・Sales of “Marketplace” has declined due to the impact of a temporary decrease in transaction
volume in the auto recycled parts trading market.

Overview of 2Q FY12/2022 Business Results

Quarterly Trends in Sales of Packaged System
Sales of Packaged system has decreased due to the switch to cloud services.
(Millions of yen)

Software sales

4,789

4,778

Sales has decrease since the Company limited the sales of “.NS Series”
under multi-year lease contracts to some industries* in order to proceedwith switching to cloud services

4,982

4,312

Operation and support
1,820

Sales has increased due to an increase in the usage rate of ancillary
services such as support services for “.NS Series” and sales of supplies.

1,817

1,809
1,795

2,972

2,968

2,737

2,737

1,850

1,870

3,162

FY2022
1H

2,518

Packaged system
887

1Q

2Q

3Q
FY2021

4Q

2Q

YoY
change

5,474

9,090

Operation and support

3,720

3,604

+117

Software sales

1,754

5,486

-3,732867

1Q

FY2021
1H-3,615

FY2022* Industries with no "c Series" lineup (Car dealers, auto electrical equipment shops , radiator shops, auto glass shops, mobile phone shops, machine tool dealers, travel agencies, bus operators)
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |6・Sales of “Packaged system” has decreased because sales of “.NS Series” under multi-yearlease contracts were limited to some industries.
・Sales of “Operation and support,” an ancillary service for users of “.NS Series,” has increased
due to an increase in the adoption rate of support service, etc.

Overview of 2Q FY12/2022 Business Results

Factors Behind Changes in Operating Profit
Profit has decreased due to negative impact of decrease in revenue, partly offset
by reduction in SG&A expenses, etc.
(Millions of yen)

Decrease in costof sales
+408

1,243

FY2021
1H

Decrease inpersonnel expenses+197

Increase inserviceinfrastructure
expense-33

Cost of sales
・Cloud amortization expense has increased in linewith the release of cloud services.

Others
+252

・Purchase cost of devices has decreased.
Increase inbusinessconsignment fee-48

SG&A expenses, etc.
FY2022
1H

Increase in amortization
expenses of cloud services-184

・Service infrastructure expense
IT infrastructure expense for providing cloudservices has increased.
・Personnel expenses
Legal welfare expenses which temporarily
occurred in FY2021 has decreased.
・Business operation consignment fee
Business operations were partly outsourced inorder to optimize businesses.

Decrease inrevenue+3,417-1,398

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |7・Due to the release of cloud services, amortization expenses of cloud services has increased.
Due to a decrease in the purchase of devices, etc., overall cost of sales has decreased by 408
million yen.
・SG&A expenses has decreased due to a decrease in legal welfare expenses which temporarily
ocurred in 2021.
・Outsourcing of back-office operations to optimize operations resulted in an increase inbusiness operation consignment fee.
・The Company reduced expenses included in “Other.” However, operating profit declined dueto the significant impact of decrease in sales.

Overview of 2Q FY12/2022 Business Results

Balance Sheet Status
Current assets has decreased due to suppression of sales of packaged systems under multi-yearlease contracts. The Company maintains sound financial position despite dividend payments
and the recording of loss.
(Millions of yen)

FY2022
1H-endFY2021Year-end

ChangeMajor factors of increase/decrease

Cash and cash equivalents -311
Operating and other receivables -1,775

Current assets

6,309

8,405

-2,095

Non-current assets

26,77026,071+699 Intangible assets +654

33,07934,476-1,397

7,691

7,512

+179

637

850

Total liabilities

8,328

8,362

-34

Total equity

24,751

26,114-1,363

Total liabilities andshareholders’equity

33,07934,476-1,397

Total assets
Current liabilities
Non-current liabilities

Operating and other payables -845
Short-term interest-bearing debts +1,509-213 Long-term interest-bearing debts -99

Dividends payout -414
Loss -1,109

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |8・Within current assets, trade receivables has decreased due to a decrease in the number ofpackaged systems sold under lease contracts.
・ Within current liabilities, trade payables has decreased due to a decrease in purchases ofdevices, etc., which is a result of a decrease in the sales volume of packaged systems.

・In addition, due to payment of year-end dividend for FY2021 and loss recorded in the first six
months of FY2022, total equity has decreased, but the Company maintains a sound financial
condition.

Overview of 2Q FY12/2022 Business Results

Cash Flow Status
Cash flow from operating activities has decreased due to a decrease in profit before tax,
but there was no shortage in working capital.
FY2022
1H

FY2021
1H

Cash flow from operating activities

460

1,080

-619

Cash flow from investment activities-1,424-1,564+140 Decrease in purchase of intangible assets +92

Cash flow from financing activities

649

537

+112 Decrease in dividends paid +164

Free cash flow

-964

-485

-479

Cash and cash equivalents

3,212

3,287

-76

(Millions of yen)

YoYchangeMajor factors of increase/decrease

Decrease in income before income taxes-2,697
Decrease in trade and other receivables +1,755

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |9・Operating cash flow has decreased due to a decrease in profit before tax, but there is no
shortage in working capital.

2. Results Forecast for FY12/2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |10Results Forecast for FY12/2022

Consolidated Results Forecasts (Compared with Previous Forecast)
Full-year results forecast has been revised in order to reflect business results for the firstsix months as well as current business condition.
FY2022 Full-year forecast(Millions of yen)
Revised forecast

Revenue
Cost of sales
Gross profit
SG&A expenses, etc.

Previous forecast(May 11)Difference

12,70012,300

+400

5,200

5,200

-

7,500

7,100

+400

11,50011,900-400

Operating profit *-4,000-4,800+800

Profit before tax *-4,100-4,800+700

Profit attributable to owners of theparent *-3,200-5,000+1,800-36.24 yen-56.62 yen-

Basic earnings per share**minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |11・The Company has revised results forecasts based on situations up to the second quarter.
・Sales of cloud-based software services, a key measure of the medium-term management plan,remain unchanged from the initial plan, and are expected to steadily make progress as theCompany continues to focus on acquiring contracts from new clients.

・Annual sales plan has been revised upward since sales of packaged systems went ahead ofschedule in the second quarter.
・Revenues, operating profit, and profit before tax have been revised to reflect the reduction ofoperating expenses, which the Company plans to continue.
・In addition, profit attributable to owners of the parent has been revised upward by 1.8 billion
yen since the Company decided to record a deficit for the period as a deferred tax asset.

Results Forecast for FY12/2022

Consolidated Results Forecasts (YoY)
Revenue will decrease since the Company will restrain sales of packaged software under multiyear lease contracts and sell software services whose sales are recorded on monthly basis from2022.
(Millions of yen)

Revenue
Cost of sales
Gross profit

FY2022Full-year forecast

FY2021
Full-year

YoY change

12,70020,652-7,952

5,200

5,753

-553

7,500

14,898-7,398

11,50011,503-3

Operating profit *-4,0003,395-7,395

Profit before tax *-4,1003,233-7,333

Profit attributable to owners of theparent *-3,2002,173-5,373-36.24 yen

24.72 yen-

SG&A expenses, etc.

Basic earnings per share**minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |12・In 2022, sales will decline year-on-year since the Company will restrict sales of packaged
systems under multi-year lease contracts throughout the year, and instead sell software
services whose sales are recorded on a monthly basis.

Results Forecast for FY12/2022

Revenue Forecast by Service Category (Compared with Previous Forecast)
No change in sales plan for software services in FY12/2022.
FY2022 Full-year forecast(Millions of yen)

Cloud service

Revisedforecast

Previous
forecast(May 11)Difference

2,540

2,570

-30

1,860

1,860

-

Marketplace

680

710

-30

Packaged system

10,160

9,730

+430

Software sales

2,830

2,500

+330

Operation and support

7,330

7,230

+100

12,70012,300+400

Software service

Total

Reason for revision

Reflected the decrease of transaction
volume in auto recycled parts market

Updated the number of software sales
for the current fiscal year due to theshortening of business negotiation period
Reflected an increase in the usage rate ofancillary services

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |13・Within “Cloud service,” “Software service” has not changed from the previous forecast.
“Marketplace” has been updated to reflect the decrease in trading volume in the auto recycledparts trading market.
・For “Packaged system,” sales plan of “Software sales” for FY2022 has been revised upward
due to the progress in the shortening of the business negotiation period due to the penetrationof online business negotiations and other factors.
・Sales plan of “Operation and support” has also been updated due to an increase in the
adoption of support service and other ancillary services, as well as steady sales of supplies.

Results Forecast for FY12/2022

Revenue Forecast by Service Category (YoY)
Sales of Software service is expected to increase due to an increased number of users. Salesof Packaged system is expected to decline due to restrained sales under multi-year lease
contracts.
(Millions of yen)

Cloud services

FY2021
Full-year

YoY change

2,540

1,791

+749

1,860

1,090

+770

680

701

-21

10,16018,860-8,700Software sales

2,830

11,620-8,790Operations and support

7,330

7,240

+90

12,70020,652-7,952

Software service
Marketplace
Package system

Total

FY2022Full-year forecast

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |14・For “Cloud services,” sales are expected to increase due to an increase in the number oflicenses for “.c Series” and a new service which corresponds to the Electronic Book Storage
Act (launched in May 2022).
・For “Packaged system,” sales are expected to decline significantly, as sales of “.NS Series”
under multi-year lease contracts will be limited to industries that do not have a lineup of “.cSeries.”・For “Operation and support,” sales are expected to increase due to steady adoption ofancillary services.

Results Forecast for FY12/2022

Factors Behind Changes in Operating Profit
Decrease in cost of sales is expected to be limited due to an increase in amortization expenses
and maintenance costs for cloud services.
(Millions of yen)
Decrease incost of sales
+553

3,395

Decrease inpersonnel expenses+200

Increase inserviceinfrastructure
expense-50

Cost of sales
・Amortization expense is expected to increase due tothe release of cloud services.

Increase in Others-6businessconsignment fee-140

Increase in amortization
expenses of cloud services-362

・Development cost of cloud services at a maintenancephase is expected to increase.
SG&A expenses, etc.

FY2022
Forecast

FY2021

・Service infrastructure expense
IT infrastructure expense for providing cloudservices is expected to increase.
・Personnel expenses
Legal welfare expenses which temporarily
occurred in FY2021 is expected to decrease.
・Business operation consignment fee
Partial outsourcing of business operations for
optimization.
・Others
Active promotion and sales activities for new
services.

Decrease in-4,000revenue-7,952

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |15

・Decrease in cost of sales will be limited due to increase in amortization expenses of cloudservices.
・ Amortization of cloud services is conducted using 10-year fixed-amount method from thetime they are released.

・Service infrastructure expense is a cost necessary for operating and maintaining the IT
infrastructure for providing cloud services.
・Operating expenses are expected to increase due to the deployment of new cloud services andthe strengthening of sales.

Results Forecast for FY12/2022

Dividend Forecast
As announced on June 22, no interim dividend will be paid (0 yen per share).
Year-end dividend is unchanged from the forecast of 1 yen per share
Dividend per share(Yen)

FY2022

FY2021Dividends

Interim dividend-

4.0

Year-end dividend(Forecast)

1.0

4.7

1.0

8.7

-

35.2%

Annual dividend(Forecast)
Consolidated dividend
payout ratio

・Althoughfinancial results for FY12/2022 andFY12/2023 is planned to be a loss, the Company
judged that it is possible to pay a dividend inconsideration of retained earnings, so it announced
annual dividend forecast of 1.0 yen per year for
FY12/2022.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |16

・The dividend for 2022 remains unchanged from the announced forecast, so no interim
dividend will be paid. Meanwhile, year-end dividend is expected to be 1 yen per share.
・In 2022 and 2023, the Company plans to pay a year-end dividend despite the expected loss,
taking into account the recent performance outlook and the status of retained earnings.

3. Progress of the Medium-Term Management Plan (2022-2028)

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |17

Progress of the Medium-Term Management Plan (2022-2028)

Performance Plan
The Company views record-high performance in 2026 as a milestone.
Transition to recurring revenue will progress and revenue will continue to grow.
The Company aims to achieve operating margin of 40% and profit of 8 billion yen in 2028.
(Billions of yen)

FY2022Afterrevision

FY2023

FY2024FY2025

FY2026FY2027

FY2028

Revenue

127

147

185

220

255

290

325

Operating profit *

-40

-27

10

33

67

100

130

Operating margin

-

-

5%

15%

25%

34%

40%

Profit attributable to ownersof the parent *

-32

-29

6

20

42

63

80

Equity attributable to ownersof the parent

200

175

180

Percentage of equity
attributable to owners of theparent

60%

50%

52%

*minus (-) represents loss
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |18

・Record-high performance in 2026 and operating profit of 13 billion yen and an operating
margin of 40% in 2028 is planned.
・Because the marginal profit ratio of cloud services will become higher, the operating margin
is expected to increase in line with the increase in revenue.

Progress of the Medium-Term Management Plan (2022-2028)

Revenue Plan by Service Category
The Company plans to grow the new cloud services while shrinking packaged systems.
Out of cloud service, software service is expected to drive the revenue growth.
(Billions of yen)

Cloud services

FY2022Afterrevision

FY2023

FY2024FY2025

FY2026FY2027

FY2028

25

59

104

152

199

250

291

Software service

19

50

90

136

180

221

250

Marketplace

7

9

14

16

19

29

41

Packaged system*

102

88

81

68

55

40

34

Software sales

28

22

25

26

25

22

20

Operation and support

73

66

56

42

30

18

14

127

147

185

220

255

290

325

Total

* Changed the breakdown of Packaged system to figures in line with actual recording standard
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |19

・The Company plans to shrink the sales of "Packaged system" while growing the sales of the
new "Cloud service“
・Revenue will be driven by “Software service.”・Conventionally, the Company has been providing “.NS Series,” a packaged system, under a6-year contract.
・Starting from 2022, users are switching to “.c Series,” a cloud-based software service, inorder, from users whose contracts expire.
・The Company grasps the planned number of contracts to be switched to “.c Series” per year
from the expiration dates of all users’ contracts.
・Furthermore, the Company simulates sales after assuming the range of functions and services
users will select based on the user’s actual system usage status.
・For these reasons, the sales plan for “Software service" is highly likely to be achieved.

Progress of the Medium-Term Management Plan (2022-2028)

Growth Strategy
The Company will promote “Penetration of cloud-based products” as a Growth Strategy
for “Software service,” and promote “Expansion of services" as a Growth Strategy for"Marketplace."
Penetration of cloud-based products
Measure (1) Starting in 2022, existing users using industry-specific software will gradually switch
to “.c Series,” a cloud-based software service.
Switch at the timing of expiration of contract

Industry-specificsoftwarePackaged system".NS Series"

Cloud-based software services".c Series"

Measure (2) Acquisition of new users
In addition to acquiring users from other companies, the Company will
actively provide “.c Series” to service stations and car dealers that provide
auto maintenance services as well.

Expansion of services
Measure (3) Increase in the number of companies using marketplace-type services
The Company will increase the utilization rate of ordering platform for auto repair parts.
It will also increase the number of companies participating in the auto finance platform.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |20・Growth strategy is “Penetration of cloud-based products" and “Expansion of services.“
・“Penetration of cloud-based products" is a strategy for achieving sales of software services.
・Strategy 1
The Company will switch the contracts of “.NS Series” to those of “.c Series” when theirusage periods expire. It plans to switch all contracts to “.c Series” by 2028.
・Strategy 2
The Company will not only acquire new users of other companies, but also expand the target
industries to service stations and car dealers that provide auto maintenance services as well.
・”Expansion of services” mainly aims to increase the utilization rate of marketplace-typeservices and increase the number of participating companies.
・The Company will realize seamless use of the ordering platform for auto repair parts and theauto finance platform by equipping them as standard functions of “.c Series.”
・The Company will increase the number of participating companies not only on the user sideof products and services, but also on the provider side.

Progress of the Medium-Term Management Plan (2022-2028)

KPI
The Company has set four KPIs to show the progress of “Penetration of cloud-based products,”
which is one of the growth strategies.

KPI Targets for the End of 2024
Cloud transition rate: 40%
Definition: Number of “c Series” user companies / Number of industry-specific software
users (target industries switching to “.c Series”*)
Standard version of “.c Series”
Number of licenses: 24,000 licenses
Definition: Number of chargeable licenses in the target month
Average monthly license fee: 23,000 yen /monthDefinition: Sales in the target month ÷ Number of charge licenses in the target month
Churn rate: less than 1%
Definition: 12-month average of <the number of cancelled licenses in the target month÷ the number of chargeable licenses in one month before the target month>* Users in auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shops
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |21

・The Company determined four KPIs to show the progress of the growth strategy “Penetrationof cloud-based products.“
・“Cloud transition rate": KPI that measures user penetration
・"Number of licenses" and "Average monthly license fee":
KPIs that measure whether progresses are being made in accordance with the sales plan interms of number and unit price
・The monthly unit price of “.c Series” varies depending on the type of licenses, since there arelicenses for multiple industries and jobs. Therefore, the Company closely monitors theaverage amount.

Progress of the Medium-Term Management Plan (2022-2028)

Understanding of Cloud Transition Rate (1)Switching to “.c Series” will not proceed at a constant speed.
The number at an early stage will be small, but will increase in the middle stage.

Understanding of cloud transition rate
100%
Middle stage
Larger number of users
will switch to “.c Series”

Late stage
Smaller number of users
will switch to “.c Series”

Early stage
Smaller number of users
will switch to “.c Series”
40%

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |22

・The cloud transition rate does not progress at a constant pace for the first three year from2022. In 2022 and 2023, the number of users who switch to “.c Series” is expected to be small.
In 2024 and after, more users will switch to “.c Series.”
・Since the majority of users will switch to “.c Series” by 2027, the number of target users will
be small in 2028.

Progress of the Medium-Term Management Plan (2022-2028)

Understanding of Cloud Transition Rate (2)One reason the number of users switching to “.c Series” is small at an early stage is that the
number of contracts renewed six years ago was small.
Target users switching to “.c Series”
1)Users in auto maintenance shops, auto body shops, auto parts dealers, and recycling shops whose contracts
for “.NS Series” is about to expire→ Users who signed contracts for “.NS Series” six years ago
In FY2016-17, which is six years prior to the early stage of switching to “.c Series” (FY2022-23),
the number of contracts to be renewed was small, so there are relatively few users whose contracts
expire in FY2022-23.
Reference: Sales trend from FY2016(Millions of yen)
22,586
21,285

21,162

20,652

FY2020

FY2021

18,195
16,760FY2016FY2017FY2018FY2019* Tajima Inc. became consolidated subsidiary of Broadleaf Group from 3Q FY2017.
Note) “.c Series” for auto parts dealers and recycling shops have not yet been provided.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |23

・There are two reasons why the number of users who switch to “.c Series” is small in the earlystages (2022-2023).
・The first reason is that the number of users who concluded the contract 6 years ago is small.
・ Target users who switch to “.c Series” are those whose contracts for “.NS Series” have
expired.
・Since “.NS Series” is sold under a 6-year contract, users who signed up 6 years ago are
eligible to switch to “.c Series”.
・Since the number of users who signed the contracts in 2016 and 2017 was small, 2022 and2023 is a period with little users eligible for switching to “.c Series.”

Progress of the Medium-Term Management Plan (2022-2028)

Understanding of Cloud Transition Rate (3)Another reason the number of users switching to “.c Series” is small at an early stage is thatusers with multiple contracts switch to “.c Series” when all contracts expire.
Target users switching to “.c Series”
2) Users who have multiple lease contracts of “.NS Series” for multiple industries switch when all contracts expire→Switching to “.c Series” when contracts period is remaining will result in negative sales*
Example: Company A①6-year contract for “.NS Series (for auto maintenance shop)" concluded in January 2016 → expires in January 2022
②6-year contract for “.NS Series (for auto body shop)” concluded in January 2017 → expires in January 2023
→In this case, in order to adjust the expiration date of ① with ②, the user will renew the contract to ①’ monthly
subscription contract of “.NS Series (for auto maintenance shop)” for one year when the contract of ① expires.
After contract of ② expires, the company will switch to “.c Series.”
Upon expiration of ②, Company A
will conclude new contracts for “.cSeries (for auto maintenance shop)”and “.c Series (for auto body shop)”■Understanding on how the sales is recorded".NS Series"".NS Series“(for auto maintenance shop) (for auto body shop)(6-year lump sum)
(6-year lump sum)①②

January 2016

January 2017".c Series"".NS Series"(monthly amount)(for auto maintenance shop)(monthly amount for one year) Expiration of
Expiration
contract forof Contract for ①①' ①' ・・・ ①‘ and ②

January 2022 From February 2022

January 2023 From February 2023

* Please refer to supplemental information for details
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |24

・The second reason is that users who have contracts for multiple licenses for different
industries will switch at the timing when all contracts expire.
・If the users switch to “.c Series” before the expiration of the 6-year contract for “.NS Series,”
the sales equivalent to remaining contract period becomes negative sales.

・For example, a user who are using “.NS Series” for auto maintenance shops and auto body
shops may have different contract starting dates.
・In that case, the user will switch to ".c Series" after all contracts expire.
・Contracts which expired before all contracts expire will be switched to monthly contracts of".NS Series" until all contracts expire.
・The user will switch to “.c Series” when all contracts expire.
・Due to these two reasons, the number of users who are eligible to switch to “.c Series” in
2022 and 2023 will be small. Taking this into account, performance plan and the cloudtransition rate are set.

Progress of the Medium-Term Management Plan (2022-2028)

Total Number of Users of Industry-Specific Software
Acquisition of new users has progressed, and the total number of users of industry-specificsoftware* has increased
Clients in auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shops (target industries switching to ”.c Series”)** Clients in other industries+89
38,009+256
38,09838,354(companies)

Acquisition of new users progresses mainly in auto
maintenance shops.
・Competitiveness has further improved due to the launchof “.c Series,” and the acquisition of users from othercompanies has progressed.

33,47033,85333,578・Target clients has expanded due to the launch of “.cSeries,” which has a broad price structure
Reference: Difference between the number of users at the end of
FY2021 and those at the end of FY2020:+606 companies

4,539

4,520

4,501

End of 4Q

End of 1Q

End of 2Q

FY2021

FY2022* Number of users of cloud-based software service ”.c Series” + packaged system “.NS Series”** Car dealers, auto electrical equipment shops , radiator shops, auto glass shops, mobile phone shops, machine tool dealers, travel agencies, bus operators
Note) “.c Series” for auto parts dealers and recycling shops have not yet been provided.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |25

・The graph shows trends in the total number of users of the Company’s industry-specificsoftware.
・The number of users is the total of companies in using “.c Series” and companies using “.NS
Series.”・The number of users has increased against the backdrop of increase in inquiries frompotential clients due to high evaluation of the new “.c Series.”
・Out of the total users, the total number of users of “.c Series” and users planning to switch in
the future was 33,853 companies at the end of the 2Q.

Progress of the Medium-Term Management Plan (2022-2028)

Switching to “.c Series”
Switching to “.c Series” has progressed as planned.

Cloud transition rate
Users of “c Series”
Users of “.NS Series” (Target industries switching to “.c Series”*)

2.9%

1.2%

The cloud transition rate progressed within the scopeof the plan.

33,85333,578991

395(companies)

・Existing users are switchingin order as the contract
expires.
・For medium-sized-to large-sized users with multiple
contracts* whose expiration dates differ, they switch to ".cSeries" at the timing when all contracts expire.

33,18332,862Cloud transition rate
= ".c Series" users÷ Target users in target industries switching to “.c Series”

End of 1Q

End of 2Q
FY2022* Auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shopsNote) “.c Series” for auto parts dealers and recycling shops have not yet been provided.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |26

・Cloud transition rate at the end of 2Q was 2.9%, generally in progress as planned.
・Existing clients gradually switch to “.c Series” upon the expiration of the contract.
・Timing of switching for users with multiple contracts is when all contracts expire.

・Four target industries switching to “.c Series” are auto maintenance shops, auto body shops,
auto parts dealers, and recycling shops.
・Currently, “.c Series” for auto maintenance shops and auto body shops have been launched.
・Launch dates of “.c Series” for auto parts dealers and recycling shops will be announced
when the services are released.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of “.c Series" Users (Standard Version/Specific Major Companies)
The number of “.c Series" users progressed as planned.

Number of users of the standard version of “.c Series”
Number of Users of "c Series" in specific major companies and service stations(companies)

991

867

395

The number of users has steadily increased asplanned・The Company started full-scale provision of thestandard version of “.c Series” to auto
maintenance shopsand auto body shopsin 2022
・Regarding specific major companies and service
stations, “.c Series” are installed to multiple storesin bulk for each project.
Early installation started from 2021.

274
121

124

End of 1Q

End of 2Q
FY2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |27

・The number of users has increased as planned.
・Due to differences in license system, etc., the Company established a classification ofstandard version of “.c Series”and “.c Series” for specific major companies and service
stations.

・Installation of the standard version began in 2022.
Installation of “.c Series” for specific major companies started in advance from 2021.
・Since “.c Series” for specific major companies needs developments of add-ons such as
customization, the service is installed on a case-by-case basis after preparation of around one
to two years. Therefore, the pace of increase in the number of “.c Series” for specific major
companies is not constant.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of Users of Standard Version of “.c Series" (Existing/New Clients)
Users of standard version of “.c Series” has progressed as planned.
There were more inquiries from new clients than expected
Existing client: Number of users of the standard version of “.c Series” that was switched from “.NS Series”
New client: Number of users of the standard version of “.c Series” who newly become the users(companies)

867

Existing clients・Switched users in order from those whose
contracts for “.NS Series” expire.
New clients

405

・High reputation of “.c Series” in the market
increased new clients switching from othercompanies’ system, etc.
・Target clients have expanded due to wideranging price system.

274
462

118
156

End of 1Q

End of 2Q
FY2022

Definitions of new clients and existing clients
Existing client: Client who switched from packaged system to cloud-based software service
New client: Client who newly became users of cloud-based software services
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |28

・The number of users for the standard version has increased as planned.
・Especially, the number of new clients increased more than anticipated due to the highreputation of “.c Series” in the market.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of “.c Series" Licenses (Standard Version/Specific Major Companies)“.c Series” licenses has progressed as planned.

Number of licenses of the standard version of “.c Series”
Number of licenses of “.c Series” provided to specific major companies and service stations

2,056(license)

Standard version
・Number of installed licenses per company: 1.1(End of 2Q FY2022)

995

1,306

・The number of licenses has increased along with theincrease in the number of user companies.
Certain major companies and service stations

307

・Number of installed licenses per company: 8.6(End of 2Q FY2022)
1,061

999

End of 1Q

・This is because there are many large-sized users.

End of 2Q
FY2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |29

・Number of licenses has increased as planned.
・The standard version is installed from relatively small users, both for existing clients and newclients, so the number of installed licenses per company is 1.1 licenses.
・For “.c Series” for specific major companies, the number of installed licenses per company is
8.6 licenses. This is because these users operate multiple stores and have a large number ofworkers per a store.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of Licenses for Standard Version of “.c Series” (Existing/New Clients)
Licenses for standard version of “.c Series” have progressed as planned.
For both existing and new clients, licenses progressed almost in conjunction with the increasein the number of companies.
Number of licenses of the standard version of “.c Series” used by existing clients
Number of licenses of the standard version of “.c Series” used by new clients(license)

995

Existing clients
・Number of installed licenses per company: 1.2(End of 2Q FY2022)
・Started installation from small-sized users

483

New clients
・Number of installed licenses per company: 1.1(End of FY2022 2Q)

307
512

136
171

End of 1Q

End of 2Q
FY2022

・The current number of licenses per company is few due toan increase in small-sized users that were not users in thepast.
→In the initial stage of installation, users tend to install
multiple licenses on a trial basis, and then cancel some ofthem in accordance with the use situation.

Definitions of new clients and existing clients
Existing client: Client who switched from packaged system to cloud-based software service
New client: Client who newly became users of cloud-based software services
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |30

・The number of licenses for the standard version of “.c Series” has increased as planned.
・The number of installed licenses per company is 1.2 licenses for existing clients and 1.1
licenses for new clients, as they are installed from relatively small users.
・As explained in the cloud transition rate, existing clients who switched to “.c Series” wererelatively small users who do not have multiple contracts.

Progress of the Medium-Term Management Plan (2022-2028)

Average Monthly License Fee for Standard Version of “.c Series”
Average monthly license fee has progressed as planned.
Average monthly license fee has increased due to progress in installation to existing users.
Average monthly license fee for standard version of ”.c Series”
Average monthly license fee of standard version of “.c Series” used by existing clients
Average monthly license fee of standard version of “.c Series” used by new clients(Yen/month)

24,000・Average monthly license fee has rose steadily.

19,14820,000Existing clients

・Installed from relatively small-sized users.

17,30816,000New clients
12,000・Although the percentage of small-sized users who were notseen as target before is high at the moment, averagemonthly license fee is rising steadily.

8,000

4,000

16,11518,80817,261

21,1500March *June
FY2022*Until 1Q, monthly license fee was calculated using the 3-month average, but it has been changed
based on the judgment that average monthly license fee at the latest month is appropriate.
Definitions of new clients and existing clients
Existing client: Client who switched from packaged system to cloud-based software service
New client: Client who newly became users of cloud-based software services

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |31

・Average monthly license fee for the standard version of “.c Series” is in line with the plan.
・Average monthly license fee has been increasing from March to June since the number of
installation to existing clients has gradually increased.
・The average monthly license fee is expected to rise further after the launch of “.c Series” forauto parts dealers and recycling shops, which are currently under development.
・On the other hand, inquiries from new clients, who were not users in auto maintenance shops
and auto body shops, exceeded the Company’s expectations.
・Since this is an opportunity to increase the number of users in the auto maintenance shops andauto body shops, the Company gives priority to developments of additional functions andservices for auto maintenance shops and auto body shops.
End4. Supplemental Information

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |32

Supplemental Information

Explanation of Sales by Service Category

Category Name

Description

Cloud services
Software service

・".c Series," a cloud-based software service
・Software services with monthly subscription contracts, etc.

Marketplace・Ordering platform for auto repair parts, etc.

Packaged system
Software sales

・Sales of ".NS Series," a packaged system, with lease contracts
・Sales of "OTRS," a work analysis software

Operation and support

・Ancillary services of “.NS Series” such as support services
・Sales of supplies such as forms and toners

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |33

Supplemental Information

Revenue by Service Category (FY2021)(Millions of yen)

Cloud services

FY2021
1Q

FY2021
1H

FY2021
Cumulative 3Q

FY2021
Full-year

417

847

1,302

1,791

Software service

247

503

778

1,090

Marketplace

170

345

524

701

Packaged system

4,778

9,090

13,87918,860Software sales

2,968

5,486

8,458

11,620Operation and support

1,809

3,604

5,420

7,240

5,195

9,937

15,181

20,652Total

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |34

Supplemental Information

Service Structure (Cloud-based Software Service)

Select the required licenses and options
according to the business size and contents
Job license

Company license＋

Additional Employee
Account

OptionSelect required functions＋

Select a plan according to thebusiness size (mandatory)

Select a license according to
the job type of an employee

Added when multiple people
use the functions of company
license and job license

Start plan

Corporate manager

Account-1＋

Online reservation

Standard plan

Front desk

Account-2

Vehicle examination line
linkage

Total plan

Mechanic

Account-3

Insurance linkage

・
・

・
・

・
・

・
・

+ Database / Client support / Slip issuance, etc.

Clients will select a plan from the company license menu and select necessary job licenses in addition. When multiple people use
the functions of company license and job license, purchase of additional employee account is necessary according to the number ofusers. There are also other service menus such as database and client support.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |35

Supplemental Information

Reasons for Switching to “.c Series” at the Expiration of Previous Contract
If existing users who have lease contracts of “.NS Series” for 6 years switch to “.c Series” before
the expiration of the contract, negative sales will be recorded.
Contract concluded
six years ago

The amount of usage
fees minus trade-in arerecorded as sales

In the case of“.c Series”*

Usage
fee for
6 years

Fifth year of thecontract

If the contract was changed at
this timing, usage fee will bemonthly while trade-in will be
one year, so trade-in becomeslarger than usage fee, resulting inrecording of a negative sales
Monthly
usage fee

TradeinTrade-inIn the case of “.NS Series”
with multi-year lease
contract

Usage
fee for
6 years
Trade-inRenewal ofcontract before
expiration

Expiration ofcontract

Switch to “.c Series”
upon expiration ofcontract
Monthly
・・
usage fee

+Additional license+Volume charge
Sales
recorded(monthly)

Usage
fee for
6 years
Trade-in*The same applies when selling “.NS Series” under a monthly subscription contract

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |36

Supplemental Information

Company Profile

Company nameBroadleaf Co., Ltd

Representative

Kenji Oyama, Representative Director and President

Listed on

Prime Market of Tokyo Stock Exchange (3673)

SectorInformation and telecommunication

Founded/Established December 2005/September 2009
Capital stock

7.148 billion yen (consolidated)

Fiscal year

From January 1 to December 31

Business outline

Using proprietary "Broadleaf Cloud Platform" as its infrastructure, the Company
provides SaaS cloud services, marketplace-type services, and partner programs thatenable functional and service collaboration with various players.
These services are utilized as IT solutions that lead environmental changes, which are
occurring in various industries including mobility industry, to business opportunities.

Head office location Floor 8, Glasscube Shinagawa, 4-13-14 Higashi-Shinagawa, Shinagawa-ku, Tokyo
Domestic offices

27 business offices and 3 development centers in Japan

Major subsidiaries Tajima Inc.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |37

Disclaimer

The results forecasts and forward-looking statements contained in this document are forecasts made by theCompany based on information available at the time of preparation of the document and include potential risks
and uncertainties.
Therefore, please be aware that actual results may differ from these results forecasts due to various factors.

Contact Information
Broadleaf Co., Ltd
Corporate Communication Department
E-mail:bl-ir@broadleaf.co.jp

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |38