Broadleaf Co., Ltd.
(Securities Code: 3673 / TSE 1st section)
Briefing on FY12/2013 Business Resultsand Mid-term Business Plan

February 18, 2014

Contents

1. FY12/2013 Business Results
2. Initial Forecasts for FY12/2014
3. Mid-Term Business Plan1

1. FY12/2013 Business Results

Summary of FY12/2013 Results In comparison with FY12/2012 results:
A considerable growth in net sales and incomes was attained as sales in Business
Application Software and Network Service grew.
 In comparison with FY12/2013 forecasts:
Although we met the forecast level in net sales, we fell short in incomes because ofcost increases following changes in individual system specifications.
(¥ million)
FY12/2013
Full-year results

Net sales

18,024

Operatingincome3,740

Ordinary
income3,653

Net income

1,914

YoY change

Compared toinitialforecasts+2,383

+173

15.2%

1.0%

+1,626

-302

76.9%

-7.5%

+1,618

-299

79.5%

-7.6%

+1,099-175

134.8%-8.4%

FY12/2012
Full-year results

FY12/2013
Initial forecasts

15,641

17,851

2,114

4,042

2,035

3,952

815

2,089
3

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Sales Trends by Category(¥ million)
FY12/2013

FY12/2012

YoY change

Full-year

Full-year

AmountBusiness Application Software

13,357

11,353+2,004

System Support

1,284

1,279

+5

Maintenance

612

603

+9

Provision of consumables

672

676

-4

3,382

3,008

+374

Network Service

 Business Application Software: Net sales were up with greater demand forrenewals of lease contracts (six years) than in FY12/2012.
 System Support: Both the maintenance and provision of consumables remained
firm.
 Network Service: Stock-type services expanded with the rising proportion of
network-type licenses.
4
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Changes in Ratio of Network-Type Licenses
 The ratio of network systems, which serve as the infrastructure of our Network Service,
has been increasing steadily.
Ratio of network system licenses
50.5%
44.2%
38.9%
32.0%
27.1%
20.0%
16.7%
13.0%
9.6%
4.6%

FY endFY12/2008

6.0%

1H endFY endFY12/2009

1H endFY endFY12/2010

1H endFY endFY12/2011

1H endFY endFY12/2012

1H endFY endFY12/2013

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Balance Sheets at the End of FY12/2013
 Achieving stronger balance sheets
End of
FY12/201314,037
9,229
13,006End of
FY12/2012
8,761
3,604
13,857(¥ million)
YoY change
Amount+5,276+5,625
-851

481

520

-39

11,791
10,66912,475
11,368

-684
-699

733

860

-127

27,044

22,619+4,425Current liabilities
Loans payableNoncurrent liabilities
Long-term loans payable
Total liabilities

6,133
1,500
948
750
7,082

5,169
1,500
2,431
2,250
7,600

+964
0
-1,483-1,500-518

Total net assets
Total liabilities and net assets

19,961
27,04415,01822,619+4,943+4,425Current assets
Cash and deposits
Noncurrent assets
Property, plant andequipment
Intangible assets
Goodwill
Investments and otherassetsTotal assets

Cash and deposits- Increased with the issuing of newshares at the time of listing- Increased with the posting ofincomes
Goodwill- Goodwill arising at the time of
MBO amortized steadily(Amortized over 20 years since
FY12/2010)

Loans payable- Repaid steadily

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Statements of Cash Flows for FY12/2013
 Ample cash flows(¥ million)

FY12/2013
Full-year

FY12/2012
Full-year

YoY change
AmountNet cash provided by (used in) operating activities

4,586

3,237

+1,349Net cash provided by (used in) investing activities

-451

-760

+309

Net cash provided by (used in) financing activities

1,490-1,796+3,286

Net increase (decrease) in cash and cash equivalents

5,624

681

+4,943

Cash and cash equivalents at end of period

9,229

3,604

+5,625

Free cash flows (FCF)

4,135

2,477

+1,658* FCF = CF from operating activities + CF from investing activities

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2. Initial Forecasts for FY12/2014

FY12/2014 Initial Forecasts
 Net Sales: Growth in Business Application Software and Network Service is
expected.
 Incomes: Income growth will slow down temporarily as up-front costs for medium tolong-term growth are posted.
(¥ million)
FY12/2014 Initial Forecasts
1st half

YoY change

Full-year+532
Net sales
OperatingincomeOrdinary
incomeNet income

9,000

FY12/2013 Results
YoY change

6.3%

5.4%

+11

+260
4,000

0.7%

7.0%

+67

+297

1,530

3,950
4.6%

8.1%

+23

+186

750

2,100
3.2%

Full-year+976
19,0001,550

1st half

8,468

18,024

1,539

3,740

1,463

3,653

727

1,914

9.7%
9

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Initial Forecasts in Sales by Category(¥ million)
FY12/2014 Initial forecasts
1st half

FY12/2013 Results
1st half

YoY change

Full-year

YoY change

6,500

+313

13,700

+343

6,187

13,357

System Support

650

+6

1,300

+16

644

1,284

Maintenance

310

+4

630

+18

306

612

Provision of consumables

340

+2

670

-2

338

672

1,850

+214

4,000

+618

1,636

3,382

Business Application Software

Network Service

Full-year Business Application Software: Net sales are set to rise on demand for the renewalof lease contracts (six years) and the acquisition of new customers.
 System Support: Both the maintenance and provision of consumables will staynearly flat.
 Network Service: Net sales are forecast to increase both in stock-type services andin transaction (or billing) services.
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3. Mid-term Business Plan

Changes in Business Environment

Car owners’ needs and lifestyles are diversifying.

Competition is intensifying in theautomotive aftermarket.
With advances in information technologies,
large IT firms are entering the automobile-related industry.
The telematics market is expanding.

Under rapidly changing circumstances, we will execute ourstrategies swiftly from the perspective of the end user, car owners.
12
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Mid-term Business Plan (2014-2016):
Management Policy

Evolving into a comprehensive service
provider by supporting fulfilled car life
Fulfilleded car life for car owners
Besides safety and reassurance,joy, convenience and other aspects in car life

Continuously offering new B2B2C services
13
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Evolving into a Comprehensive Service Provider

MarketAuto Parts Manufacturers

Service Flow

Recycling Companies

Maintenance
Shops

Leisure Businesses
E-Commerce
Operators, etc.

- Offering marketing
information

NewGeneration
BroadLeaf
Cloud

Auto Parts Dealers

Bodywork Shops- Sales of businessapplications specificto business types- Offering network
services- Operation, customer
attraction andmanagement
support services- Offering diverse
information
14
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Mid-term Business Plan (2014-2016):Numerical Targets(¥ million)

Net sales

FY12/2013

FY12/2014

FY12/2016

Results

Forecasts

Target18,02419,00022,500Business Application Software

13,357

13,70014,500

System Support

1,284

1,300

1,500

Network Service / New Services

3,382

4,000

6,500

Operating income

3,740

4,000

7,000

Operating income margin

20.8%

21.1%

31.1%

Net sales

25,00020,000¥ million
22,50018,02419,00010,0008,000

15,000

6,000

10,000

4,000

5,000

2,000

0
2013

Operating income

2014

2016

Forecasts

Target¥ million

7,000

3,740

4,000

0
2013

2014

2016

Forecasts

TargetUp-front costs spent for FY12/2014 will start producing
outcomes mainly in Network Service from FY12/2016.
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15

Management Indicators
 We will focus on boosting profitability in the medium run to continuously increase
the operating income margin.
 We will emphasize capital efficiency to further improve ROE.
Trend in Operating Income Margin
35%

Trend in ROE
15

%

31.1
30

10.9

~

25

20.8

10

21.1

20

5.6
15

5

13.5
11.6

10

8.0
0

5
2010

2011

2012

2013

2014

2016

InitialForecasts

Target in Mid-term
Business Plan

2012

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2013

16

Mid-term Business Plan (2014-2016): Main Strategies
Core Strategies

Core Initiatives
Marketing Measures

1

Expand network services toboost profitability

Promote a new service brand of
Car-uncelor in Your Town
New Technology Development

2

Create new services for
medium to long-term growth３

Step up business expansion
in Asia

４

Solidify the managementfoundation

Develop a new-generation
BroadLeaf Cloud17
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1. Expand network services to boost profitability
Promote Car-unselor in Your Town
Car-unselor in Your Town is a service brand we launched in the fall of 2013 for the purpose of helping
attract customers to maintenance shops.
Services

Services
Car Owners
Solutions

1) Simple explanations
2) A short waiting time3) A broad array of parts tochoose from
4) Reassuring technical skills5) Reasonable fees

Training
Customer Attraction
Support
Provision of Tools
Consulting

Maintenance Shops

Services

Advancing from package development and sales
to provision of comprehensive services
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18

1. Expand network services to boost profitability
Promote Car-unselor in Your Town
Purposes and Effects

Increase sales per customer
 Boosting network sales
Acquire new customers
 Boosting sales of Business Application Software
Accumulate big data Creating new services

19
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2. Create new services for medium to long-term growth
Create a new-generation BroadLeaf Cloud
We will construct a system foundation for the cloud data infrastructure with enhanced availability and scalability, and withreal-time processing capabilities in order to support the expansion of our business domains.

Overview

TelematicsRelated Data
Business
System Data

Log Files

SensorData

Websites
Blogs

Maintenance Shops &Bodywork Shops

G

Customer
Data

New-Generation BroadLeaf CloudSupporting operation,customer attraction
and management

SocialMedia

Offering various
information necessary
for an enriched car life

Car Owners

Big Data

Offering marketing
information

High-speed
processing with theuse of external
technologies

For Businesses

Creating new services from the perspective of car owners to expand business
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

20

2. Create new services for medium to long-term growth
Continuously create new services on the basis of data flows
New-Generation BroadLeaf Cloud

Remodeled
Network
SeriesData
Services Specific to
Business Types

Common Services

Utility
Services to be added
as appropriate
ImportSlip issuance

Data Circulation

Customermanagement

Daily reportCarmanagement

Real time
analysis
Remittancemanagement

New Services

Settlement
Billingmanagement

Text output

Higher Speed

Data links withexisting services

Connection
API

Higher unit prices

Existing Services

Maintenance Shops
and Bodywork Shops
Services

Car Owners
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3. Step up business expansion in Asia.
2014

Medium to Long-Term Target

Create a circulation market for recycledparts in China

Full-scale operation of online
auto parts businessStart distribution and transactions of recycled parts on a trial basis

Increase parts distribution between parts dealers
and maintenance and bodywork shops

The Chinese versionof the system forrecycling companies

China

Recycling Company

Start oftransactions
betweenrecycling
companies

Billing

Parts Station
NET CHINA(tentatively named)

Southeast
Asia- Construct a platform for parts distribution and transactions.
- Start trial sales.
- Acquire and expand market players.

The Chinese version of thesystem for maintenanceand bodywork shops

Maintenance & Bodywork Shop

Recycling Company

Launch operations in Southeast Asia

Parts Dealer

Carry out full-scale expansion throughout
Southeast Asia
Expand business from a specific country as a
hub for other Southeast Asian countries.

Expanding business in Chinese and Southeast Asia markets
by utilizing expertise developed in Japan
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

22

4. Solidify the management foundation

We will endeavor to solidify our management foundation in a bid to carry out corebusiness strategies swiftly and surely.

Create an organizational structure fordeveloping new products and services
Recruit and develop human resources
playing key roles in growth strategies

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Mid-term Business Plan (2014-2016): Capital Policy

Investment Policy
We will invest actively with a view towards medium to long-term growth. As ameans for investment, we will consider mergers and acquisitions mainly in thefollowing areas.
(1) Companies offering services related to business support for clients(2) Companies possessing advanced development technologies andplanning expertise(3) Companies conducting overseas automobile-related business centeredaround Asia

24
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Mid-term Business Plan (2014-2016): Capital Policy

Dividend Policy
While securing the retained earnings necessary to expand our futurebusiness and strengthen our management structure, we will continue to pay
stable dividends. We will maintain our current basic policy announced on
April 30, 2013, setting the payout ratio target at around 20% and will begin
paying interim dividends from FY12/2014.
Actual Dividends for FY12/2013
20 yen per share (up 2.5 yen from the initial forecast)(Payout Ratio: 26.0%)
Dividend Forecast for FY12/2014
20 yen per share (10 yen as interim dividend and10 yen as year-end dividend)(Payout Ratio: 24.9%)25
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

ReferenceOur Profile

Corporate Philosophy
Gratitude and Satisfaction: These are the underlying principles
that drive our creation of new corporate value
as we develop enterprise solutions for our partner-clients.
Corporate Name:
President and CEO:
Stock Listing:Founded/Established:
Capital Stock:
Business Outline:

Head Office Location:
Business Offices:
Development Centers:
Number of Employees:

Broadleaf Co., Ltd.
Kenji Oyama
The First Section of the Tokyo Stock Exchange
Securities Code: 3673 (Listed on March 22, 2013)
December 2005/September 2009
¥7,127 million
Provision of services on an IT platform that supports the business ofplayers in the automotive aftermarket (e.g. development of businessapplications and automotive content, platform for collaboration between
different business sectors, marketplace for recycled auto parts)
Floor 8, Glass Cube Shinagawa, 4-13-14, Higashi-Shinagawa,Shinagawa-ku, Tokyo
35 offices in Japan
3 centers in Japan (Sapporo, Tokyo and Fukuoka)821(as of December 31, 2013)27
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

Automotive Aftermarket
The automotive aftermarket refers to a market of products and services to be used by car owners
after purchase of their vehicles, including gasoline, accessories, safety inspections,maintenance checks, replacement of parts, and sales and scrapping.

28
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Overseas: Approach to Growth Markets
The automotive aftermarket has
expanded due to the increase in
car ownership. The market size isparticularly large in China.

1
2
3

The recycled parts market is being
formed due to the increase indemand for repairs that has
resulted from the spread of cars.

CCRC Menu Screen(Chinese version of
the system forrecycling
companies

China
58.1

Japan

576

120.89 million
75.59 million
38.3%
79.5%

The Internet infrastructure,
which is the basis of ourservices, is being developed.

Thailand
169.7
Myanmar11.5 million

Vietnam

Car ownership rate(vehicles/1,000 people)

000

23.7%

Malaysia00.0 million
Number of cars owned

380.4

ASEAN Countries

Indonesia
10.74 million

80.0

61.0%

00.0%

19.0 million
Internet penetration rate

Sources:
Car ownership rate:
Automotive Yearbook
Number of cars owned: Automotive Yearbook;
National Bureau of Statistics of China, 2012
Internet penetration rate: ITU, Percentage of individuals using the Internet (excel)

18.0%

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CSR Activities
Basic Policy on CSR
We will contribute to the revitalization of the automotive aftermarket and growtogether with customers in accordance with our corporate philosophy focusing on
Gratitude and Satisfaction. As a company associated with the automobile industry,
we will seek to contribute to the sustainable development of society throughenvironmental conservation and other activities.
Environmental Conservation Activities
Grow Leaf Project
Tree Planting Activities (since 2008)
Under the theme of contributing to the global environment,
we engage in the Grow Leaf Project activities.
Our goal is to plant 30,000 trees on land in need of reforestation.
Sponsorship of Musical:
The Fall of Freddie the Leaf: A Story of Life for All Ages (since 2008)
We have been co-sponsoring and promoting this musical for children.
Through the musical, we are conveying the importance of life and theenvironment to future generations.

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Cautionary Note

Forward-looking statements contained in this material such as results forecasts and future prospects are
forecasts and estimates made by Broadleaf based on information available at the time of the preparation of
the material, and are subject to potential risks and uncertainties. Please note that actual results may differ
from the statements contained in this material due to various factors.

For inquiries, please contact
Planning Department (Investor Relations)
Broadleaf Co., Ltd.
E-mail: broadleaf-ir@broadleaf.co.jp
31
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