Broadleaf Co., Ltd.
(Securities Code: 3673 / TSE 1st)
1Q FY12/2013 Business Results Briefing

May 13, 2013

Contents

1. Our Profile and Growth Strategies
2. FY12/2013 Financial Forecasts and Quarterly
Performances
3. Financial Highlights for 1Q FY12/2013
4. Reference

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

2

Our Profile and Growth Strategies

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

1. 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:

Broadleaf Co., Ltd.

President and CEO:Kenji Oyama

Stock Listing:

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

Founded/Established:

December 2005/September 2009

Capital Stock:

6,783,155,000 yen

Business Outline:

Development and sales of business applications, provision of network services,maintenance services, etc. for specific businesses centering on the automotive
aftermarket industry

Head Office Location:

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

Business Offices:

35 offices in Japan

Development Centers:

3 centers in Japan (Sapporo, Tokyo, and Fukuoka)

Number of Employees:

841 (Sales: 579, Development: 169, Administration: 93)(as of March 31, 2013)
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

4

2. 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, maintenancechecks, replacement of parts, and sales and scrapping.

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

5

3. Our Strengths
We connect participants in a very large, divided market with a common network infrastructure
and promote the Industrial Platform to help users improve their operational efficiency and createbusinesses.
Large shares establishedin each industry

Industrial Platform

The database of parts information,
which is essential for the business,has been accumulated for 30
years, creating a high barrier toentry.

CommonInfrastructure

Database
A variety of vehicle
information, partsinformation, accessory
information, indexes, etc.

Manufacturers
Recycling companies, automotive
glass shops, automotive electric
wiring companies, radiator
manufacturers
Recycled parts
marketTrading Companies
Parts dealers, used parts dealers- Common network infrastructure
We develop systems for multiple businesscategories from the industry’s upstream todownstream on a common network
infrastructure, which enables information
sharing.
- Industry-standard database
BL Code, an industry standard code unifying
information on parts, which differs between
parts manufacturers.

Retailers
Maintenance shops, bodywork shops,
retailers of automobile supplies,
gas stations, etc.

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

Car Owners

64. Our Sales Mix
We aim to increase our sales by having our IT services on the Industrial Platform in our effort toincrease the number of users through the expansion of our network services and with thecompetitive edge of our product services.
FY12/2012
Net Sales by Segment

Stock-type
orTransactiontype
Revenue¥3,008 million
19.2%

 Network Service
 Database provision
 Server provision
 Services provided on the Industrial Platform(Services connecting different business categories, Carpod Tab, payment agency service forrecycled parts, etc.)¥1,279 million
8.2%

Flow-type
Revenue(six-year cycle)

Increasing the frequency of use/
Expanding network services

 System Support
 Maintenance of software, maintenance of hardware
 Sales of consumables

 Business Application Software Business application software for specific businesses in theautomotive aftermarket¥11,353 million  Sales to mobile phone sales agents and travel agencies, etc.
 Sales of hardware including PCs as well as systems
72.6%

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Increasing thenumber of users
75. Our Growth Strategies
We accelerate our growth in Japan and overseas as a new type of
information service company with its roots in industry,
which supports the creation of users’ business.
1) Provision of IT services on the Industrial Platform

Enhancement of Network Service
Expansion of the Industrial Platformin the automotive aftermarket

M&A

Expansion of the Platform to otherindustries around the automotive
aftermarket

2) Approach to overseas growth markets

Operation of automotive business by drawing on theexpertise we developed in Japan
Business operation in China

Expansion into ASEAN countries

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8

6. Provision of IT Services on the Industrial Platform (1/3)
We provide IT services that support the businesses of various companies by having informationon the demands of car owners for parts replacement resulting from maintenance, inspections, etc.
shared on our network by companies in the industry’s upstream to downstream.
Recycled Parts
Dealers

Recycling Companies

Recycled Parts
Manufacturers andDistributors

Recycled Parts Market

Recycling Companies

TradingCompanies
Trading Companies/
Retailers, Service Providers
End Users

Cooperation on the Industrial Platform

Recycled Parts
Manufacturers
and Distributors

Services

Payment agency
service for recycledparts

Services connecting
different categories
of business

Carpod Tab

Consideration

Parts Dealers, etc.

Agencycommission

Retailers andService Providers
Fixed monthly
fees
Volume-based
chargeMaintenance Shops,
Bodywork Shops, etc.
Tablet terminals

Fixed monthly
fees

Big data including user
information andinformation ontransactions between
users

Car Owners

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

97. Provision of IT Services on the Industrial Platform (2/3)
Growth strategies in Japan Focusing more on efforts to spread ofservices into existing users rather thanincreasing business application software
licenses

Replacement of existing users’ systems
with network systems
Spread of network services

Having Network Service used more frequently The market penetration of the following isnecessary to expand our network services:
1) Network systems

Increasing network system users, rather thanstand-alone system users, to reinforce network
services
2) Services connecting different categories ofbusiness(BL. Parts Ordering System)
Increasing users of these services, which
permit the placement and receipt of orders andchecking of inventory on the network
3) Tablet-based services(Carpod Tab)
Spreading tablet-based services to increase
the convenience of network services

Enhancement of Network Service

Increasing the competitive edge of the productservices provided via our systems
over those provided by other companies

Increasing the revenues from sales of Business
Application Software (increasing the number ofusers of our systems)

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

108. Provision of IT Services on the Industrial Platform (3/3)
 The proportion of network systems, which serve as the infrastructure of our Network Service, has been
increasing steadily.
 The proportion of network systems has been growing steadily. It was 38.9% as of the end of 2012 and41.7% as of the end of the 1st quarter. It has been contributing to increasing unit prices in the sales ofBusiness Application Software and increasing the sales of Network Service.

Proportion of licenses of network systems
in the sales of Business Application Software

1Q
2013
1Q of FY13/12

4Q
2012

4Q of FY12/12

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

4Q
2011
4Q of FY11/12

4Q
2010
4Q of FY10/12

4Q
2009
4Q of FY09/12

4Q of FY08/12

4Q
2008

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9. Operation in China andOther Asian Countries (1/2)

1
2
3

China

The automotive aftermarket has
expanded due to the increase in
car ownership. The market size isparticularly large in China.

58.1

576

75.59 million
38.3%

79.5%

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

ThailandMyanmar(vehicles/1,000 people)

Japan

120.89 million

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

Car ownership rate

CCRC Menu Screen(Chinese version ofrecycled parts
registration system)

169.7
11.5 million

000

Vietnam

23.7%

Malaysia

380.4

0.0 million

ASEAN Countries

Indonesia
Number of cars owned

10.74million

00.0%

80.0

61.0%

19.00 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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1210. Operation in China and Other Asian Countries (2/2)
Established the “Beijing Japan-China Automobile Recycling Center” (April 22, 2013)(Registered name in China: Beijing Hua Xia Dong Ying Qi Che Ke Ji You Xian Ze Ren Gong Si)
In Beijing, China, we established a joint venture that provides comprehensive consultations
to automobile recycling companies for providing recycled parts manufacturers
with consultations on factory design and management, technical support,
introduction of IT systems, employee training, and other matters.

 Background
Given the rapid increase in car ownership, the Chinese government has been encouraging the modernizationand standardization of factories for manufacturing recycled parts. To contribute to the development of China’s
automobile recycling industry, we will provide advanced technologies and expertise that we have developed inJapan.
 Our target
 Increasing business opportunities in IT services for China’s automobile recycling industry via the newcompany Investment ratio (capital stock: 5 million yuan)
 Broadleaf Co., Ltd.

(investment ratio: 28%; 1.4 million yuan)

 Beijing Jin Se Heng Ye Zai Sheng Zi Yuan Ji Shu kai fa Co., Ltd. (investment ratio: 52%; 2.6 million yuan)(a company headquartered in Beijing that was established at the initiative of an influential Chinese
automobile recycling company)
 Kokusai Recycle Jigyo Kyokai K.K.
(investment ratio: 20%; 1.0 million yuan)(a company headquartered in Hyogo Prefecture that was established jointly by automobile recycling
companies in Japan)
13
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

FY12/2013 Financial Forecasts
and Quarterly Performances

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

1. FY12/2013 Financial Forecasts
 Net sales are forecast to increase 14.1%
from the previous fiscal year due tobooming replacement demand in
Business Application Software sales andthe growth of Network Service business.
 An increase in net sales of ¥474 million
is anticipated in the Network Service
business, which is expected to grow.

YoY Change

FY12/12ActualFY12/13
Forecasts

AmountRatio

15,641

17,851+2,210

14.1%

Business
Application
Software

11,353

12,982+1,62914.3%

System Support

1,279

1,386

+107

8.4%

Network Service

3,008

3,482

+474

15.8%

Cost of Sales

4,616

4,247

-368

-8%

Gross Profit

11,025

13,604+2,578

23.4%

SG&A Expenses

8,911

9,561

+649

7.3%

Operating Income

2,114

4,042

+1,928

91.2%

815

2,089

+1,27494.2%

EPS¥36.30¥86.12+¥49.82

—

ROE

5.6%

11.9%

—

—

(¥ million)

Net Sales The ratio of sales from this business to total

sales will increase from 19.2% to 19.5%.

 Regarding operating income, because
the amount of costs remains the samelevel as described earlier, any increasein sales is reflected almost directly in an
increase in operating income.

Net Income

 Return on equity (ROE) is forecast to
increase to 11.9% due to record income.

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15

2. Quarterly Performances The amount of net sales increased in the 2nd quarter, and particularly in the 4th quarter, because ourBusiness Application Software business with existing clients concentrated on certain periods.
 The amount of net sales less the amount of fixed costs, which is approx. ¥3.3 billion to ¥3.4 billion, isthe operating income for each quarter. Accordingly, the operating income margin changes from quarterto quarter.
Quarterly Performances(¥ million)(%)

FY12/2013 Financial Forecasts(¥ million)(53.5%)(46.5%)(66.3%)(33.7%)
1Q

2Q

3Q

FY12/201212/12月期
Net Sales

Operating
Income4Q

1Q

FY12/201313/12月期

Net Sales
2nd half

Operating Income

1st half

Operating Income Margin

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16

Financial Highlights for 1Q FY12/2013

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1. Financial Highlights for 1Q FY12/2013
YoY Change
1Q 2012

1Q 2013
Amount(¥ million)

Net Sales

Ratio

3,449

3,743

+293

8.5%

2,404

2,609

+204

8.5%

System Support

326

323

-2

-0.9%

Network Service

718

810

+91

12.7%

1,043

1,083

+40

3.9%

2,406

2,659

+253

10.5%

SG&A Expenses

2,298

2,297

-1

-0.1%

Operating Income

107

362

255

236.0%

Ordinary Income

50

312

262

517.5%Net Income

-52

110

162

—

Business Application
SoftwareCost of Sales
Gross Profit

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18

2. Analysis on Changes in Net Sales
 Business Application Software: Increase of ¥204 million (up 8.5% yoy)
Net sales increased by 8.5% due to growth in sales of network systems, whose unit prices are high.

 System Support: Decrease of ¥2 million (down 0.9% yoy)
Attributed to the slump in sales of consumables (maintenance has remained solid).

 Network Service: Increase of ¥92 million (up 12.7% yoy)Increases in sales from database updating services, server provision, and services connecting different businesscategories contributed to the increase.

(¥ million)

8.5% Increase in Net Sales(¥ million)

Breakdown of the Increase/Decrease
204

190

92
90

-2
-10
1Q 2012

1Q 2013

Business
Application
システム販売Software

System Support
システムサポート

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Network Service
ネットワークサービス

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3. Analysis on Changes in Ordinary Income
 Ordinary income for the 1st quarter increased to ¥312 million (517.5% yoy).
 The increase is mainly attributed to growth in sales from Business Application Software and Network
Service.

 Costs have been reduced due to the decrease in payment costs that resulted from the decrease ininterest-bearing debt we took out at the time of MBO.

Breakdown of the Increase(¥ million)(¥ million)

300

200

100

While net sales increased¥294 million, cost of sales
increased ¥40 million.
As a result, our financial
structure features a highincome margin.

The percentage of income
taxes to net income before
taxes is high due to theamortization of goodwill.

Income taxes-99

0
Increasein net sales294
1Q 2012

1Q 2013△-100
100

Increase in costs due
to increase in net sales-40

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Cost reduction
820

4. Topics in 1Q FY12/2013 (January - March 2013) (1/2)
 Expansion of the Industrial Platform in Japan’s automotive aftermarket
1①

Exhibition at the 11th International Auto Aftermarket EXPO (March 2013)


Purpose of the exhibition: To increase the penetration of our network
services on the Industrial Platform (e.g. Carpod Tab and BL. Parts
Ordering System) in the market

Our booth at the International Auto
Aftermarket EXPO

Seminar we held at the International
Auto Aftermarket EXPO

http://www.broadleaf.co.jp/platform/index.html
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21

5. Topics in 1Q FY12/2013 (January - March 2013) (2/2)
 Expansion of the Industrial Platform in Japan’s automotive aftermarket
2①

Development of new menus for Carpod Tab, a strategic tool for enhancing
our network services


Search and placement of orders for recycled partsPrice estimates of light sheet metalsInsurance simulation

Carpod Tab’s screen for
confirming recycled parts

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22

6. Shareholder Return The dividend payout ratio is planned to be around 20%.


We plan to pay a year-end dividend of¥17.5 per share.

 We position the return of profit to our shareholders as an importantmanagement issue.

11.9% ROE for FY12/2013.



We expect to secure

We aim to continue increasing operating income, shareholder return, and ROE.

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23

Reference

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

1. Our Main Products and Services
Business Application Software

Main products and their descriptions

Systems for maintenance shops

Support for the creation of optimal, easy-to-understand proposals for safety inspections and maintenance,
management of the history information of each car owner such as linking between fault diagnosis, future
maintenance schedules, replacement parts, etc.

Systems for bodywork shops

Support for the rapid creation of price estimates for bodywork (repair of cars damaged in an accident,etc.), the provision of easy-to-understand information with 3D images and illustrations, etc. of cars, thehandling of new materials, etc.

Systems for parts wholesalers(parts dealers)

Support for the rapid operation of works such as searching, purchasing, and selling new parts and repair
parts in response to demand from maintenance shops and bodywork shops

Systems for automobile recycling
companies

Analyzing information on transactions (big data) in the Parts Station NET, a recycled parts marketplace, tosupport the optimal production, purchases, and sales of parts

System Support

Main services and their descriptions

Maintenance

Maintenance of software and hardware for customers who have purchased our systems

Provision of consumables

Sales of printers, ledger sheets and other consumables to customers who have purchased our systems

Network Service
Database provision
Server provision

Business support

Main services and their descriptions
Providing parts information, including vehicle information on new cars, mainly via the
network
Server maintenance services for users who utilize network systems through ourserverBusiness support services provided on the platform (network), which are aimed at
helping users to promptly provide car owners with optimal services- Payment agency service for recycled parts (support for transactions between
recycling companies)- BL. Parts Ordering System (support for transactions between commercial
distributions of parts)- Carpod Tab (an application that supports the creation of optimal proposals for car
owners)Copyright (c) Broadleaf Co., Ltd. All rights reserved.

Main customers
Users who haveintroduced
network systems

Users in theautomotive
aftermarket who
have introduced
network systems

25

2. Net Sales by Category and Changes in Revenues
 Our sales consist of sales from Business Application Software, System Support, and Network Service
as a high-growth business FY12/2013 net sales are forecast to be ¥17,851 million (up 14.1% yoy), and operating income isforecast to be ¥4,042 million (up 91.2% yoy).
 It is expected that the ratio of sales from Network Service will be higher, and that the effective operating
income margin will rise to 26.4%.
(¥ million)

Net Sales by Category andChanges in Real Operating Income Margin

FY12/07

FY12/08

Network Service

FY12/09

FY12/10

System Support

Real operating income
expected to reach a newrecord high

FY12/11

FY12/12Business
Application
SoftwareCopyright (c) Broadleaf Co., Ltd. All rights reserved.
* Real Operating Income Margin= (Operating Income + Amortization of Goodwill) / Net Sales

Real operating
income margin（%）

FY12/13(Forecast)

Real Operating
Income Margin26

3. Cost Structure and Ability to Create Cash
 Because our real total expenses remain the same level at ¥13 billion, our PL has a structure in which
an increase in net sales leads directly to an increase in profits.
 Our FCF has been increasing due to the growth of Network Service in addition to the stable user base.
Net Sales and Real Total Expenses

Changes in Cash Flows(¥ million)(¥ million)

6,000

5,489

3,944

4,000

2,000

0
FY12/07 FY12/08 FY12/09 FY12/10 FY12/11 FY12/12 FY12/13(Forecast)

Real Total Expenses

Net Sales* Real Total Expenses = Cost of Sales + SG&A Expenses – Amortization of goodwill

FY12/07

FY12/08

EBITDAFY12/09

FY12/10

FY12/11

FY12/12FY12/13(Forecast)

FCF* FCF = CF from Operating Activities + CF from Investing Activities

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27

4. Goodwill
 Background of Occurrence of Goodwill
Carlyle PL after Amortization of Goodwill
Amortization of goodwill (¥669 million) is a corporate accounting
process under JGAAP. It is not a cash cost.



It is expected that there will no longer be amortization of goodwill on
the P/L once we have shifted to IFRS in the future.

Management

Purchaser(SPC)

Joint Venture= Current Broadleaf

Occurrence of goodwill
at the time ofacquisition of Broadleaf by SPC

P/L for FY12/2012(¥ million)

After
Amortization of
Goodwill

BeforeAmortization of
Goodwill

Net Sales

15,642

15,642

5,687

5,687

11,063

11,063

Depreciation andAmortization

161

161

Amortization of Goodwill

669

0

Other SG&A Expenses

8,119

8,119

Operating Income

2,114

2,783

Ordinary Income

2,036

2,732

Income before Taxes

2,036

2,705

Taxes

1,220

1,220

Net Income

815

1,484

Cost of Sales
Gross Profit

Broadleaf

Goodwill arose at the time of MBO in 2009.



The amount of goodwill of ¥13.3 billion is a premium to the amountof net assets of Broadleaf paid by the SPC (Special Purpose
Company), which is the purchaser, to shareholders of Broadleaf.



There was no outflow of cash from Broadleaf at the time of theoccurrence of goodwill.
It is permitted by the auditing firm to amortize the amount of
goodwill evenly over 20 years in light of the stable profitability of
Broadleaf.

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28

Cautionary Note
No information in this material is intended to solicit the purchase or sale of shares in Broadleaf.
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 preparationof 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.
Broadleaf and the information provider accept no liability whatsoever for any damage arising from any
action taken by a user based on the information contained in this material.

For inquiries, please contact:
Planning Section
Planning Department
Broadleaf Co., Ltd.
E-mail: broadleaf-ir@broadleaf.co.jp

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29