2Q FY12/2023 Business Results Briefing Material

August 10, 2023
Broadleaf Co., Ltd

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Table of Contents

Summary

P3

FY12/2023
2Q Financial Results and Full-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsP22

Supplemental Information

P24

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

2

Summary

P3

FY12/2023
2Q Financial Results and Full-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsP22

Supplemental Information

P24

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

3

Summary

Summary
Progress in the growth strategy is steady and results have exceeded the plan

FY12/2023

Medium-Term Management Plan (2022-28)

1H Business Results

Performance Plan

• Business condition has been favorable amid rising DX demand.

• The performance is expected to exceed the original plan for• As a result, performance further exceeded the revised earnings

2 consecutive fiscal years.
• Accumulation of recurring revenue has been steadily increasing.

forecast.

Full-Year Earnings Forecast

Measure 1 “Cloud Penetration”• Business condition is expected to remain favorable in the 2H.

• Cloud software is expected to be released in line with the plan.

• The Company will continue to invest in development for• The number of users changing to cloud software will increase

expansion of cloud services.

dramatically from FY2024.

• Full-year forecast was revised upward.

Measure 2 “Service Expansion”• Full-scale operation of cloud ordering platform will begin from
4Q of FY2023.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

4

Summary

P3

FY12/2023
2Q Financial Results andFull-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsP22

Supplemental Information

P24

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

5

FY12/2023

Consolidated Financial Results for the 2Q
The Company achieved double-digit growth in revenue. Especially, sales of “Cloud service” on which we focused have doubled.
The loss was also smaller than forecasted and showed improvement compared to the same period of the previous fiscal year.

FY2023
1H(Millions of Yen)
Revenue

FY2022
1H

YoY Change

Forecast

YoY Ratio

Vs. Forecast(May 10)

7,390

6,520

+869

+13.3%

7,100

+290

Cloud service

2,141

1,046

+1,096+104.7%

2,100

+41

Packaged system

5,248

5,474

-226

-4.1%

5,000

+248

Cost of sales

2,985

2,459

+526

+21.4%

2,950+35

Gross profit

4,405

4,061

+343

+8.5%

4,150

+255

SG&A expenses, etc.

5,516

5,460

+56

+1.0%

5,700

-184

Operating profit *-1,111-1,398+287--1,550+439

Profit before tax *-1,102-1,458+356--1,600+498-826-1,109+282--1,400+574-9.33 yen

-12.57 yen---15.80 yen-

Profit attributable to owners of the parent*

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

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

6

FY12/2023

Quarterly Sales by Service Categories
The number of users of software services, which are on a monthly subscription, has continued to increase.
Sales from “Operation and support services” have decreased as users of packaged software switch to monthly subscriptions.

Quarterly Sales of “Cloud Service”(Millions of Yen)

Quarterly Sales of “Packaged System”(Millions of Yen)

Marketplace

Software service

Software sales

1,206
2,737

2,826

2,737

Operation and support service

2,905
2,694

2,554

935
861

831

953

754

887

867

1,850

1,870

1,994

1,952

1,941

1Q

2Q

3Q

4Q

1Q

793

721
517

529

1,048
548

697

775

347

366

170

163

173

164

160

158

1Q

2Q

3Q

4Q

1Q

2Q

FY2022

FY2022

FY2023

1,762

2Q
FY2023

Explanation

Explanation

Software service• The deployment of cloud software to small-to-medium-sized auto maintenance and auto
body shops is advancing steadily.
• Capturing of IT demand for DX investment and compliance to the Electronic Book Storage
Act has increased.
Marketplace• There has been no significant change in the number of service users and the frequency of use.

Software sales• Leasing sales of packaged software for the mobility sector have already finished.
• Demand for packaged software in the non-mobility sector has been strong due torecovery from COVID-19.
Operation and support service• The number of users changing from packaged software to monthly subscriptions has been
trending upward from the 2H of the previous fiscal year.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

7

FY12/2023

Factors behind Changes in Operating Loss
Higher sales absorbed upfront investment costs such as software development and strengthening the infrastructure for providing
services.

Operating Loss

Cost of Sales•(Millions of yen)

FY2023
1H

FY2022
1H•

Increased due to upfront expenses to strengthen IT infrastructure inpreparation for future service expansion.
Increased due to increasing amortization expenses associated with theextension of cloud software functions, etc.

Increase inrevenue+869

Abolishment ofshareholders
benefits+255-1,398

Increase incost of sales-526 Increase inoperating Increase inactivities outsourcing
expensesrelated-119
expenses

SG&A Expenses, etc.

•
Others-93-1,111•

Expenses related to operating activities rose due to higher travel andsocial expenses associated with intensified sales activities andpromotions.
Outsourcing expenses increased due to the outsourcing of back-officebusiness operations, etc.

-99
Increase in amortization expense ofcloud services -98
Increase in development costs -260

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

8

FY12/2023

Balance Sheet Status
Non-current assets increased due to capitalization of software development and office leasing fees.
Current liabilities increased due to the implementation of borrowings, as well as an increase in contract liabilities resulting
from increasing number of long-term contracts for cloud software.

(Millions of Yen)FY2023End of 1H

FY2022Year-EndYoY Change

Major Breakdown of Increase/Decrease

Current assets

6,690

6,555

+135

Operating and other receivables +104

Non-current assets

29,03826,980+2,058Intangible assets +1,034
Property, plant and equipment +592

Total assets

35,72833,535+2,192Current liabilities

9,265

6,583

+2,683

Non-current liabilities

3,373

3,291

+82

Total liabilities

12,6389,873+2,765

Total equity

23,09023,662-573

Total liabilities and equity

35,72833,535+2,192

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Short-term interest-bearing debts +1,747
Contract liabilities +911

Long-term interest-bearing debts +79

Loss -844
Dividends payout -88

9

FY12/2023

Cash Flows Status
Operating cash flow is trending upward due to an increase in contract liabilities resulting from the increasing number of longterm contracts for cloud software.

FY2023
1H(Millions of Yen)FY2022
1H

YoY Change

Major Breakdown of Increase/Decrease

Cash flow from operating activities

1,126

460

+666

Increase in operating and other receivables -1,895
Increase in operating and other payables +905
Increase in contract liabilities +953

Cash flow from investment activities-1,917-1,424-493

Increase in payments for acquisition of intangible assets -395

Cash flow from financing activities

717

649

+68

Decrease in cash dividends paid +325
Increase in short-term loans payable +179
Repayment of long-term loans payable -438

Free cash flow

-791

-964

+173

Cash and cash equivalents at end of the period

3,386

3,212

+174

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

10

FY12/2023

Consolidated Earnings Forecast (Full-year)
The forecast was revised for both revenue and loss, taking into account the financial results for the first half of FY2023 and thecurrent business environment.

FY2023Full-Year Forecast(Millions of Yen)FY2022Full-Year

YoY Change

Previous Forecast(May 10)

YoY Ratio

Vs. Forecast

Revenue

15,30013,833+1,467+10.6%

15,000+300

Cost of sales

6,100

5,346

+754

+14.1%

6,100±0Gross profit

9,200

8,487

+713

+8.4%

8,900

+300

SG&A expenses, etc.

11,40011,384+16+0.1%

11,600-200

Operating profit *-2,200-2,897+697--2,700+500

Profit before tax *-2,300-3,005+705--2,800+500

Profit attributable to owners of the parent *-1,900-2,431+531--2,400+500-21.42 yen-27.54 yen---27.07 yen-

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

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

11

FY12/2023

Full-Year Sales Forecast by Service Categories
Sales forecast for “Cloud service”remains unchanged since the number of users is expected to grow as planned.
Sales forecast for “Packaged system” was revised upward, taking into account business conditions in non-mobility sector.

FY2023Full-Year Forecast(Millions of Yen)FY2022Full-Year

YoY Change

YoY Ratio

Previous Forecast(Feb. 10)

Vs. Forecast

5,900

2,628

+3,272+124.5%

5,900

±0

5,250

1,958

+3,292+168.2%5,250±0Marketplace

650

670

-20

-3.0%

650

±0

Packaged system

9,400

11,205-1,805-16.1%

9,100

+300

Software sales

2,500

3,539

-1,039-29.3%

2,200

+300

Operation and support service

6,900

7,666

-766

-10.0%

6,900±015,30013,833+1,467+10.6%

15,000+300

Cloud service

Software service

Total

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

12

FY12/2023

Breakdown of Changes in Full-Year Operating Loss Forecast
Increase in revenue will absorb the cost of prior investment in preparation for further revenue growth and higher operating
expenses.

Cost of sales

Operating Loss•

(Millions of yen)

FY2022

FY2023
Forecast

Increase inrevenue+1,467-2,897

Abolition ofshareholder
benefits+256
Increase incost of sales Increase in Increase inpersonnel-754
operatingexpenses
activities related-167
expenses-119•

Others+14

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Development costs will increase due to the development of new
cloud services.

SG&A expenses, etc.
-2,200•••

Increase in amortization expense of cloud services -118
Increase in development costs -378

Amortization expenses of cloud services will increase in line withthe launch of cloud services.

•

In addition to the strengthening of recruitment activities, expenses
related to share-based compensation are expected to increase.
Expenses related to sales activities and strengthening ofpromotions are expected to increase.
Various infrastructure expenses necessary for strengthening theoperation of cloud services are expected to increase.
As a result of the abolishment of the shareholder benefit programin FY2022, its related expenses in FY2023 are expected todecrease.

13

FY12/2023

Dividend Forecast
Year-end dividend forecast for FY2023 remains unchanged from 1.00 yen per share.

Dividend per share

Explanation

•
(Yen)

FY2023(Forecast)

FY2022•

Interim dividend

0.00 yen

0.00 yen

Year-end dividend

1.00 yen

1.00 yen

1.00 yen

1.00 yen--

Annual dividend
Consolidated dividend
payout ratio

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Although financial results for FY12/2022 and FY12/2023 is planned to
be a loss, the Company judged that it is possible to paya dividend inconsideration of retained earnings.
Annual dividend forecast for FY2023 is 1.00 yen per share(interim dividend :0.00 yen, year-end dividend: 1.00 yen).

14

Summary

P3

FY12/2023
2Q Financial Results and Full-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsP22

Supplemental Information

P24

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

15

Medium-Term Management Plan (2022-28)

Medium-Term Management Plan (2022-28): Growth Strategy
In order to evolve into a unique platformer in the mobility industry, we are advancing our growth strategies of “Cloud
Penetration” and “Service Expansion.”
Positioning of Our Services

Growth Strategy ①
Automaintenanceshops, etc.

Cloud penetration

Auto bodyshops

Cloud software+ DX solutions
Other goods

Used cars

Used carsdealers

Radiator shops

Solution compliant with theElectronic Book Storage Act

Growth Strategy ②

Service Expansion
Replacement
ServiceAutoelectricalequipment
shops

Cloud
business support
software

New parts

Auto parts
dealers
Used parts

Groupware

Auto glass
shops

Website creation tool

Auto recycle shops

Digital Transformation
Data Exchanger:

Data circulates on the shared IT infrastructure→Generates high-value-added data, etc.

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16

Medium-Term Management Plan (2022-28)

Medium-Term Management Plan (2022-28): Performance Plan
Financial results are expected to exceed the plan for 2 consecutive fiscal years.
Revenue (Billions of yen)

+0.6 billion
yen+1.5 billion
yen

32.5
29

Main factor for
exceeding the plan

25.5
22
18.5
12.3

13.8

Recovery in demand of

15.3

14.7

packaged software for nonmobility sector

FY2022（Plan）FY2022（Result）

FY2023（Plan）FY2023（Forecast）*

FY2024（Plan）FY2025（Plan）FY2026（Plan）FY2027（Plan）FY2028（Plan）

Operating Profit/Loss (Billions of yen)

+1.9 billion
yen+0.5 billion
yen

13
10
6.7
3.3
*

-2.9

-2.7

Main factor for
exceeding the plan1

Improving efficiency ofoperating activities andback-office business operations

-2.2

-4.8
*Announced on Aug.10

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17

Medium-Term Management Plan (2022-28)

Cloud Penetration: Progress of Cloud Indicators
Considering the types and functions of currently released cloud software, the current level of indicators is as planned.
Cloud Transition Rate

Number of Licenses (Standard Edition)(license)
10.7%

8.6%

24,000

40%

6.5%
4.6%

4,441
3,490

2.9%
2,523
1.2%

1,790
995

End of 1Q End of 2Q End of 3Q End of 4Q End of 1Q End of 2Q
FY2022

FY2023End of
FY2024
TargetAverage Monthly License Sales (Standard Edition)307
End of 1Q End of 2Q End of 3Q End of 4Q End of 1Q End of 2Q

FY2022

FY2023End of
FY2024
TargetUser Retention Rate(yen/month)
99.6%

99.6%

99%
23,00017,308March

19,148June

21,27921,165

21,424September December

March

June

21,047

FY2022

FY2023Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

End of
FY2024
TargetNone(disclosed from FY2023)*Weighted average monthly user retention rate
for the cumulative periods up to full-year

or more(annually)

1Q*

1H*

FY2023End of
FY2024
Target18

Medium-Term Management Plan (2022-28)

Cloud Penetration: Roadmap for Cloud Software Release and Functional Enhancements
There are three key approaches to accelerate the growth of cloud indicators to meet our end-of-FY2024 targets.

FY2022

FY2023

FY2024

Auto maintenanceshops
Auto body shops① FY2023 4QRelease of cloud software
for auto recycle shops①

Auto parts dealers
Used car dealers

FY2027

FY2028①

Glass dealer
Supplementary information:
Cloud ordering platform (see P.20) is
also planned to start operation at thistimingFY2026② FY2024 1QFunctional enhancementsof cloud software for auto
maintenance shops②

Recycle shops

FY2025③③ FY2024 2QRelease of cloud software
for auto parts dealers

Auto electricalequipment shops
Radiator shops

Reference: Indicators for packaged software (comparison by industry)
Number of licenses per company(as of the end of 2022)
Average monthly amount sales(average of 2015-2020*)
Number of companies(as of the end of 2022)

Auto parts dealers and auto recycle shops
About 2.5 times more

When compared with auto maintenanceand auto body shops
About 1.1 times more
Auto maintenance and auto body shops:
29,182 companies

2,944 companies*Since monthly contracts and multi-year lease contracts are mixed from 2021 onward, comparisons are made using figures prior to 2020

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

19

Medium-Term Management Plan (2022-28)

Cloud Penetration: DX Solutions
The number of licenses for DX solutions is generally on the rise.

DX Solutions(license)

Dencho.DX

Future Outlook
Solution compliant with
the Electronic Book Storage Act(“Dencho.DX”)

BL.Homepage
Google Workspace™
(Premium edition )
2,694

2,358
2,189

2,145

Grace period will be abolishedat the end of December 2023,
so we anticipate a surge in lastminute demand.

1,924

Website creation tool(“BL.Hompage”)

1,724
1,459

1,449

1,078
864

553

1Q

890

920 912225 589

634

2Q

3Q
FY2022

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

958

683

4Q

978

976

718

707

1Q

2Q

With the tailwind of DX demand,
we anticipate a gradual increase
will continue in the futureGroupware(Google WorkspaceTM)

Driven by DX demand andbranding power, we anticipate
continued growth in the future.

FY202320

Medium-Term Management Plan (2022-28)

Service Expansion: Scalability of the Platform Service
The range of available services, including ordering platform, expands as items on either horizontal or vertical axis are implemented.

ExpansionSpecialized Service, etc.

General-purpose
software

Other service

AI function

Electricalequipment Mobile phone Machineand radiator
shop
tool dealers
shops

In-house
softwareTravelagenciesand bus
operators

Other company's services

Automaintenanceshops

Auto body
shops

Used cardealers

Auto parts
dealers

Auto recycle
shops

Auto glass
shops

Open EDI

1

2

2

1

2

2

2

EC

2

2

2

1

1

2

2

Solution for the ElectronicBook Storage Act

2

2

2

2

2

2

2

3

3

3

3

Website creation tool

1

1

3

3

3

1

3

3

3

3

3

Work analysis software

3

3

3

3

3

3

3

3

3

3

1

Settlement agency

2

2

2

1

1

2

2

3

3

3

3

Data analysis

3

3

3

3

3

3

3

Employee benefits

1

1

1

1

1

1

1

Operational assistance

2

2

2

2

2

2

2

3

Generative AI

2

2

2

2

2

2

2

3

Fraud detection

2

2

2

2

2

2

2

3

Loan

2

2

2

3

3

3

3

3

2

Insurance

3

3

3

3

3

3

3

3

3

General-Purpose Service, etc.
Ordering
platform

In-house packaged software(for non-mobility sector)

In-house cloud software (for mobility sector)

3

OthersFinancesystem

Accounting
systemOther
System

3
3

3
1

1

1

3

3

3

3

2

2

1

Finance function

2

Operating environment

IT infrastructure2

Development environment

Expansion

1

Conventional service range

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

+2

New service range+

3

Range where services can be further expanded

21

Summary

P3

FY12/2023
2Q Financial Results and Full-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsSupplemental Information

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

P22
P24

22

Topics

Fraud Detection Service(with Broadleaf AI)
We have developed a function that automatically detect business defects and fraud using cloud software to prevent fraud

Diagram illustrating a car owner requesting a quote from a mobility sector company*
Mobility sector companies(Auto maintenance shops,
auto body shops, used car sales, etc.

Car owners

Broadleaf

1. Request for a quote
Detect defect and fraud
from a neutral standpoint
5. Present the quote

2. Prepare a quote

Defect and fraud detection function

Database

Large Language Models

4. Revise the quote in line with
the improvement proposal
3. Implement a diagnosis for the possibility of defect and fraud
from the stage of preparation of the quote.

If defect or fraud are detected, the system will automaticallynotify and propose improvements.

*In addition to quotes, we plan to expand the functionality to detect anomalies and fraud in various contracts (such as car purchase, car insurance, auto repair part purchase),electronic business information between companies, and auto maintenance record information.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

23

Summary

P3

FY12/2023
2Q Financial Results and Full-year Results Forecast

P5

Medium-Term Management Plan (2022-28)
Progress and Future Outlook

P15

TopicsSupplemental Information

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

P22

P24

24

Supplemental Information

List of Indicators ①
FY2022

FY2023(Millions of yen)
1Q

1H

Cumulative 3Q

Full-year

1Q

1H

Recurring revenue

2,367

4,766

7,481

10,294

2,876

5,844

Recurring revenue ratio (%)

73%

73%

74%

74%

79%

79%

FY2022

FY2023End of 2024

(companies)
End of 1Q

End of 2Q

End of 3Q

End of 4Q

End of 1Q

End of 2Q

Target39,771

ー

38,09838,35438,54939,34539,547

Mobility sector *36,37336,65036,85837,64337,85538,095ー

Non-Mobility sector *

1,725

1,704

1,691

1,702

1,692

1,676

ー

33,57833,85334,06634,357

34,61834,887

ー

395

991

1,557

2,231

2,973

3,744

ー

274

867

1,433

2,099

2,831

3,604

ー

Existing client

118

405

721

1,094

1,492

1,937

ー

New client

156

462

712

1,005

1,339

1,667

ー

Specific edition

121

124

124

132

142

140

ー

Number of packaged software companies

33,18332,86232,50932,126

31,64531,143

ー

4,520

4,501

4,483

4,988

4,929

4,884

ー

1.2%

2.9%

4.6%

6.5%

8.6%

10.7%

40%

Number of companies using business support software

Target companies for cloud software**Number of cloud software companies
Standard edition

Non-target companies for cloud software
Cloud transition rate

*Mobility sector: auto maintenance shops (& service stations), auto body shops, auto parts dealers, auto recycle shops, used car dealers, auto electrical equipment shops, radiator shops
Non-mobility sector: 13 industries: Mobile phone shops, machine tools dealers, travel agencies, and bus operators**Of the 13 industries, the industries targeted for cloud software in the medium-term management plan are auto maintenance shops (& service stations), auto body shops, auto parts dealers, and auto recycle shops

FY2022
1Q

1H

FY2023Cumulative 3Q

Full-year

1Q

1H

Upon expiration of packaged software lease contracts*
Transition ratio to cloud software

ー

35%

45%

44%

76%

78%

Transition ratio to packaged software (monthly contracts)

ー

65%

55%

56%

24%

22%

*The denominator is the industry in which the cloud software has been released (e.g., auto maintenance auto body shops).

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

25

Supplemental Information

List of Indicators ②
FY2022

FY2023End of 2024

(license)
End of 1Q

End of 2Q

End of 3Q

End of 4Q

End of 1Q

End of 2Q

Target

1,306

2,056

2,857

3,620

4,656

5,649

ー

307

995

1,790

2,523

3,490

4,441

24,000Existing client

136

483

950

1,381

1,970

2,552

ー

New client

171

512

840

1,142

1,520

1,889

ー

999

1,061

1,067

1,097

1,166

1,208

ー

Number of cloud software licenses
Standard edition

Specific edition

FY2022

FY2023End of 2024

(yen/month)
March

June

September

December

March

June

Target

ー

ー

ー

ー

ー

ー

17,30819,14821,047

21,27921,165

21,42423,000Existing client

18,80821,15023,326

24,074

23,837

24,324ーNew client

16,115

17,261

18,47017,90017,701

17,507

ー

ー

ー

ー

ー

ー

ー

ー

Average monthly license sales
Standard edition

Specific edition

FY2022

FY2023End of 4Q
Cloud software user retention rate **Number of cloud software users (companies)

1Qー

End of 2024
1H

Target

-

99.6%

99.6%

99% or more

2,099

-

-

-

**Cloud software user retention rate: Weighted average monthly user retention rate for the cumulative periods up to full-year
Monthly user retention rate: 1-{number of monthly cancellations/ (number of cloud software users at the end of the previous fiscal year + number of newly acquired companies}

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

26

Supplemental Information

Sales by Service Categories (FY2023 2Q)

FY2023
1H(Millions of yen)

Cloud service

FY2022
1H

YoY Change

YoY Ratio

Forecast(May 10)

Vs. Forecast

2,141

1,046

+1,096+104.7%

2,100

+41

1,824

713

+1,110+155.7%

1,800

+24

Marketplace

318

333

-15

-4.5%

300

+18

Packaged system

5,248

5,474

-226

-4.1%

5,000

+248

Software sales

1,546

1,754

-208

-11.9%

1,300

+246

Operation and support service

3,702

3,720

-18

-0.5%

3,700

+2

7,390

6,520

+869

+13.3%

7,100

+290

Software service

Total

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

27

Supplemental Information

Medium-Term Management Plan (2022-28): Performance Plan
・The Company will achieve record-high performance in FY2026, with a target of operating margin of 40% and profit of 8 billion yen in FY2028.
・Performance in FY2022 exceeded the initial forecast, and performance in FY2023 is also expected to exceed the initial forecast for 1H FY2023.

FY2022
Plan(Billions of yen)
Revenue

FY2022
ResultFY2023
Forecast

FY2023Plan

FY2024
Plan(Aug. 10)

FY2025Plan

FY2026Plan

FY2027Plan

FY2028
Plan

12.3

13.8

14.7

15.3

18.5

22.0

25.5

29.0

32.5

Cloud service

2.6

2.6

5.9

5.9

10.4

15.2

19.9

25.0

29.1

Packaged system

9.7

11.2

8.8

9.4

8.1

6.8

5.5

4.0

3.4

Operating profit *

-4.8

-2.9

-2.7

-2.2

1.0

3.3

6.7

10.0

13.0

Operating margin

-

-

-

-

5%

15%

25%

34%

40%

-5.0

-2.4

-2.9

-1.9

0.6

2.0

4.2

6.3

8.0

Profit attributable to ownersof the parent**Minus (-) represents loss

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

28

Supplemental Information

Medium-Term Management Plan (2022-28): Sales Plan by Service Categories
・Within “Cloud services,” “Software service” is expected to drive the revenue growth.
・”Packaged system” is expected to shrink as conventional software are changed to cloud services.

FY2022Plan

FY2022
ResultFY2023
Plan

2.6

2.6

5.9

Software service

1.9

2.0

Marketplace

0.7

Packaged system

FY2023
Forecast

FY2024Plan

FY2025Plan

FY2026Plan

FY2027Plan

FY2028
Plan

5.9

10.4

15.2

19.9

25.0

29.1

5.0

5.3

9.0

13.6

18.0

22.1

25.0

0.7

0.9

0.7

1.4

1.6

1.9

2.9

4.1

9.7

11.2

8.8

9.4

8.1

6.8

5.5

4.0

3.4

Software sales

3.2

3.5

2.2

2.5

2.5

2.6

2.5

2.2

2.0

Operation and support service

6.5

7.7

6.6

6.9

5.6

4.2

3.0

1.8

1.4

Revenue

12.3

13.8

14.7

15.3

18.5

22.0

25.5

29.0

32.5

(Reference) Recurring revenue ratio*

80%

74%

85%

84%

86%

88%

90%

92%

94%

(Billions of yen)
Cloud service(Aug. 10)*Recurring revenue ratio: (Software service, Marketplace, and Operation and support service) / Revenue

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

29

Supplemental Information

Sales Trend of Cloud Service Expected in the Future

Sales plan of “Cloud service”（Billions of yen）

New platform services※Not included inAuto financing, logistics MaaS, etc. the performance plan
Marketplace
Ordering platform

4.1

Software service
Cloud software and DX solutions

2.9

1.9

1.6

25.0
22.1

1.4

18.0
13.6

0.7
9.0
0.7

5.3

2.0

FY2022(Result)

FY2023(Forecast)*

FY2024(Plan)FY2025(Plan)FY2026(Plan)FY2027(Plan)FY2028(Plan)*Announced on Aug.10

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

30

Supplemental Information

Medium-Term Management Plan (2022-28): Measures
・In order to penetrate the cloud services, the Company implements the following measures and manages the progress using the following KPIs.

1. Cloud transition

2. Market expansion

In 2022, the Company started transition

Cloud software, which has evolved into a

In addition to the various optional services

to cloud-based software when existing

total management system, is deployed notof cloud software, the Company provides

clients’ 6-year contracts for packaged

only in existing markets but also in new

various software services, including

software expires. The transition ismarkets such as car shop chains, cargroupware, solutions that comply withscheduled to be completed in 2028.

dealers that provide auto maintenance

law and regulation, and website creation

services, and service stations.

tools.

Related KPI

Related KPI・Cloud software licenses
・User retention rate of cloud-based software

・Cloud transition rate

Related indicators
・Total number of users
・Retention rate of packaged software users
・The number of cloud software users
Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

3. Menu expansion

Related KPI・Average license monthly sales ofcloud software
Related indicators
・Number of licenses for major software services31Supplemental Information

Expansion of Broadleaf’s Service Area
“Seller” and “buyer” groups thatcan be matched by digitization ofordering businessAccounting system

Electronic book storage act

Website creation tool
Mobile phone shops

Ordering of parts
Electronic book storage act

Groupware(GWS)

Auto body shops

Travel agencies

Non-mobility sector

Mobility sector

Broadleaf’sServices

Bus operators
Work analysis
software (OTRS)Human resources system

Website creation tool
Auto maintenance shops
Service stations

Machine tool dealers

Ordering of vehicles

Radiator shops
Groupware(GWS)

Auto electricalequipment shops

Auto recycle shops
Car dealers

Auto glass shops

Financial system

Auto parts dealersetc

Ordering of services
Work analysis
software (OTRS)

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

etc
etc

32

Supplemental Information

Service Structure (Cloud Software)
Job license

Company license

Additional Employee
Account

Select the required licenses and options
according to the business size and contents
Select a plan according
to the business size
(mandatory)＋

Select a license
according to the job
type of an employee
経営者

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 thenumber of users. There are also other service menus
such as database and client support.

＋

Added when
multiple people use
the functions ofcompany license andjob license
アカウント①

Start plan

Corporate manager

Account-1

Standard plan

Front desk

Account-2

Total plan

Mechanic

Account-3＋

OptionOnline reservation
Vehicle examinationline linkage

Select required
functions

Database

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

Insurance linkage

ClientsupportSlip
issuance
33

Supplemental Information

Understanding of Cloud Transition Rate
・Switching to cloud-based software will not proceed at a constant pace.
・Clients switch when 6-years contracts expire, so the number of switching users depends on the number of deals 6 years ago.

Understanding of cloud transition rate

Reference: Revenue from FY2016(Millions of yen)

Early stage
Smaller numberof users
will switch to
cloud software

Middlestage
中期
Largernumber『.cシリーズ』
of users
切り替え対象
will switch to
ユーザー数が多い
cloud software

Late stage
Smaller numberof users
will switch to
cloud software
22,586
21,285100%

21,162

20,652

FY2020

FY2021

18,195
16,76040%

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028FY2016FY2017*FY2018FY2019* Tajima Inc. became consolidated subsidiary of Broadleaf Group from 3Q FY2017.
Note) cloud software for auto parts dealers and auto recycle shops have not yet been provided.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

34

Supplemental Information

Understanding of Changes in Software Sales due to Cloud Transition(The Case of Auto Maintenance Shops and Auto Body Shops)

If the Company continues to sell packaged software in 2022 and beyond

If the Company starts selling cloud software (Green) from 2022

About 1/6 of user companies renew their contracts each year,
but there is a wave in the number of contract renewals depending on the year.

About 1/6 of companies using packaged software will switch to cloud
software each year. Average sales are expected to rise after the transition
completes due to different licensing systems

Sales of licenses (6-year usage rights)
Target of each year: Companies who renew the contract for packaged software (About 1/6 )Accounting method: License fee for 6 years is booked in lump-sum as sales
in the year when the contract is renewed.

Sales of operation and support services
Target of each year: All users of packaged software
Accounting method: Monthly sales

FY2021

FY2022

FY2023

FY2024FY2025

FY2026

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

FY2027

FY2028

・For the year in which the contract is switched, the period after the contract isconcluded will be is booked as sales ().
Therefore, sales from the following year onward () will be roughly doubled
because sales for 12 months are fully booked
・Sales of operation and support services are received from users of packaged
software, so it will gradually decline as the transition proceeds.

FY2021

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY202835

Supplemental Information

Cases for Providing a Monthly Contract of Packaged Software
・Some clients will keep using packaged software under monthly contracts for a limited period.

Case (1): Clients with multiple lease contracts
Example: Client with 6-year contract of packaged software for auto
maintenance shop concluded in 2016 and 6-year contract for auto body
shop concluded in 2017

Case (2): Clients who wish to use a specific function
Example: Client whose contract of packaged software will expire in 2022,
but the desired function is not implemented at the time.

Packaged software
monthly contract

Packaged software (Maintenance)monthly contract

Packaged software(Maintenance) 6-year contract

Packaged software
6-year contract

Cloud software(Maintenance/Auto body)monthly contract

Packaged software (Autobody) 6-year contract

Cloud software
monthly contract
Switch after desired function is
implemented

Switch after expiration of both contracts

January January
2016
2017

January January
2022
2023

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

January
2016

January2022

36Supplemental Information

Reason for Switching to Cloud Software when the Previous Contract Expires
・If existing clients who have lease contracts of packaged software for 6 years switch to cloud-based software before the expiration of the contract,
negative sales will be recorded.

In the case of cloud software*

Usage fees - trade-inrecorded as sales

Usage
fee for
6 years

In the case of packaged software with multi-year lease contract

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
in recording of a negative sales+Additional license+Volume charge

Usage
fee for
6 years

Usage
fee for
6 years

Monthly
usage fee

Trade-inTrade-inMonthly
usage fee

Trade-in

下取り
Trade-inContract
concluded six
years ago

Fifth year of
the contract

Expiration ofcontract

Contract
concluded six
years ago

Fifth year of
the contract

Switch tocloud software
upon expiration ofcontract

Sales recorded(monthly)

Expiration ofcontract

Renewal ofcontract before
expiration*The same applies when selling packaged software under a monthly subscription contract
Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

37

Supplemental Information

Explanation of Service Categories

Packaged system

Cloud service

Software service

Software sales

・Provision of cloud software
・Sales of packaged software under monthly contract
・Provision of DX solutions, etc.
・“Dencho.DX,” a solution for Electronic Book Storage Act
・“BL.Homepage,” a website creation tool

Marketplace・Sales of packaged software under lease contract
・Sales of "OTRS," a work analysis software

Operation and support service

・Provision of electronic ordering platform for auto parts
・ “BL Parts Order System,” a transaction system for auto parts
・ “Parts Station NET,” a transaction network for recycled auto parts
・Settlement agency service

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

・Ancillary services of packaged software such as support service
・Sales of supplies such as forms and toners

38

Supplemental Information

Company Profile

Company nameBroadleaf Co., Ltd

Representative

Kenji Oyama, Representative Director, President and CEO

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 that enable 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 sector, 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., SALES GO Inc., etc.

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

39

Disclaimer

The earnings forecast 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
Investor Relations OfficeE-mail: bl-ir@broadleaf.co.jp

Copyright©2023 Broadleaf Co.,Ltd. All rights reserved.

40