2Q FY12/2015
Business Results Briefing

Broadleaf Co., Ltd.
TSE 1st Section: 3673

2014年11月11日
July 31, 2015

Chapter 1

Overview of 2Q FY12/2015
Business Results

Contents

3

Chapter 2

Results Forecasts for FY12/2015

10

Chapter 3

Core Initiatives for FY12/2015

Appendix

Basic Information on the Company
2Q Topics, etc.

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

16

25

1

Chapter 1
Overview of 2Q FY12/2015
Business Results

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

2

Chapter 1

Overview of 2Q FY12/2015 Business Results[Year-on-year Comparison] PL Summary(1H FY12/2015)
POINT

Both sales and income declined due to a year-on-year fall in thesales in Business Application Software and rise in total costs.

(¥ million)

1H FY12/2015
Results

1H FY12/2014

YoY Change

YoY (Ratio)

Results

Net Sales

8,325

-758

-8.3%

9,083

Operating Income

1,008

-842

-45.5%

1,850

Ordinary Income

996

-830

-45.5%

1,827

Net Income

476

-467

-49.5%

943

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

3

Chapter 1

Overview of 2Q FY12/2015 Business Results[Year-on-year Comparison] Sales by Category(1H FY12/2015)
POINT

Sales in Network Services, a key category, increased.
For details on the major causes of the sales decline in
Business Application Software, see page 6.

(¥ million)

1H FY12/2015
Results

1H FY12/2014

YoY Change

YoY (Ratio)

5,644

-928

-14.1%

6,572

System Support

634

-32

-4.8%

667

Maintenance

300

-10

-3.4%

311

Provision of Consumables

334

-21

-6.1%

355

2,046

202

11.0%

1,843

1,624

171

11.8％

1,452

421

30

7.9%

391

PSF*1

328

-10

-3.0%

338

Order Placing and Acceptance, etc.*2

93

40

77.9%

52

8,325

-758

-8.3%

9,083

Business Application Software

Network Service
Stock
Transaction

Total

Results*1: Payment agency service for recycled parts*2: BL Parts Order System, Carpod Tab, etc.
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4

Chapter 1

Overview of 2Q FY12/2015 Business Results[Comparison with Forecasts] Sales by Category(1H FY12/2015)
POINT

Delay in the progress of Business Application Software
affected the stock, etc. of Network Service.

(¥ million)

1H FY12/2015
Results

1H FY12/2015

Differences

Achievement

5,644

-755

88.2%

6,400

System Support

634

-65

90.7%

700

Maintenance

300

-49

85.9%

350

Provision of Consumables

334

-15

95.5%

350

2,046

-53

97.4%

2,100

1,624

-25

98.5%

1,650

421

-28

93.7%

450

PSF

328

-21

93.9%

350

Order Placing and Acceptance, etc.

93

-6

93.2%

100

8,325

-874

90.5%

9,200

Business Application Software

Network Service
Stock
Transaction

Total

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Forecasts*

5

Chapter 1

Overview of 2Q FY12/2015 Business Results

Causes of failure to reach forecasted targets
in Business Application Software
POINT

6,572
New

The progress of user renewals was largely in line with the forecast/plan.
The delay in the acquisition of new customers and the supply of new
products affected sales.

[Forecast/Plan]
Decrease in user renewals
Increase in new customers
Launch new
products/services

6,400
New

(¥ million)[Results]
User renewal was asforecasted.
Acquisition of new customers
was sluggish.
Launch of new products, etc.
was delayed(new OTRS*, etc.)

5,644
New

1Q

1Q
Existing

Existing

Existing
User renewals exceeded
the forecast in the 2Q.

2Q

Sales in
1H FY12/2014

Sales forecast for1H FY12/2015

2Q

Sales in
1H FY12/2015* Work analysis/operation optimization software
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6

Chapter 1

Overview of 2Q FY12/2015 Business Results[Year-on-year Comparison] Breakdown of Expenses(1H FY12/2015)
POINT

Continued development for growth and improvement to support theimplementation of core strategies.
Total cost increased due to additional investment in quality assurance.

(¥ million)

1H FY12/2015

1H FY12/2014
Remarks

Results

YoY Change

Results

Net Sales

8,325

-758

9,083 -

Total Cost

7,317

84

7,233 -

Total Personnel
Expenses*

2,747

-107

R&D Expenses

247

157

90 services

Advertising Expenses

205

38

167 Exhibiting at events, etc.

4,118

-3

4,122 -

1,008

-842

1,850 -

Other

Operating Income

2,854 Performance-linked bonuses, etc.
Development of new functions and* Sum of labor cost included in production cost and personnel cost included in SG&A expenses
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7

Chapter 1

Overview of 2Q FY12/2015 Business Results[Year-on-year Comparison] Sales by Category(2Q [April – June])
POINT

Sales increased significantly during the 2Q of FY12/2015, primarily in Business
Application Software, in response to the termination of support for Windows XPthat affected the results in the 2Q of FY12/2014.

(¥ million)

2Q FY12/2015
Results

2Q FY12/2014

YoY Change

YoY (Ratio)

3,505

953

37.4％

2,551

System Support

317

12

4.0%

305

Maintenance

150

-6

-4.1%

156

Provision of Consumables

167

17

11.9%

149

1,035

103

11.1%

931

Stock

820

86

11.8%

733

Transaction

214

16

8.2%

198

PSF

165

-6

-3.7%

172

Order Placing and Acceptance, etc.

49

22

85.8%

27

4,857

1,069

28.2%

3,788

Business Application Software

Network Service

Total

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Results8

Chapter 1

Overview of 2Q FY12/2015 Business Results

BS Summary(End of 2Q FY12/2015)
POINT

Carried out TOB (November 2014) and retirement (April 2015) of treasury stock.

(¥ million)

End of
FY12/2014

End of 2Q FY12/2015
Results

Change fromend of FY2014

Remarks

Results

Current Assets

14,305-1,235

15,541

Decrease in cash and deposits (-1,422)

Non-current
Assets12,638-164

12,802

Decrease in goodwill (-334)

26,944-1,39928,343-Current Liabilities

4,978-1,757

6,736

Non-current
Liabilities

2,150

1,837

313

Total Liabilities

7,129

79

7,049

Total Net Assets
Total Liabilities andNet Assets

19,814-1,47921,294Retirement of treasury stock (1,430)

26,944-1,39928,343-

Total Assets

Current portion of long-term loans payable (-126)
Decrease in income taxes payable (-1,132)

Increase in long-term loans payable (+1,857)-

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9

Chapter 2
Results Forecasts for FY12/2015

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10Chapter 2

Results Forecasts for FY12/2015[Year-on-year Comparison] PL Summary(FY12/2015)
POINT

Highest priority is placed on quality assurance in the development of new
products and functions.
Forecasts have been revised, taking into account the effects of sales and costs.

(¥ million)

FY12/2015

FY12/2014

Forecasts*

YoY Change

YoY (Ratio)

Results

Net Sales

17,700-1,194-6.3%

18,894

Operating Income

2,500-1,665-40.0%

4,165

Ordinary Income

2,450-1,648-40.2%

4,098

Net Income

1,200

-993

-45.3%

2,193* Announced on July 9, 2015

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11

Chapter 2

Results Forecasts for FY12/2015[Year-on-year Comparison] Sales by Category(FY12/2015)
POINT

Sales in Network Service are expected to grow despite the remaining impactof quality assurance, particularly in Business Application Software.

FY12/2015(¥ million)

FY12/2014

Forecasts*

YoY Change

YoY (Ratio)

Business Application Software

12,150-1,668-12.1%

13,818System Support

1,250

-40

-3.1%

1,290

Maintenance

600

-14

-2.4%

614

Provision of Consumables

650

-25

-3.8%

675

4,300

514

13.6%

3,785

3,350

366

12.3%

2,983

950

148

18.5%

801

PSF

650

-30

-4.4%

680

Order Placing and Acceptance, etc.

300

178

146.4%

121

17,700-1,194-6.3%

18,894

Network Service
Stock
Transaction

Total

Results* Announced on July 31, 2015
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12

Chapter 2

Results Forecasts for FY12/2015[Comparison with Previous Forecasts] Sales by Category(FY12/2015)
POINT

The forecast for sales in Network Service, which was initially expectedto accelerate in the 2H of FY12/2015, has been revised due to thepostponed release of new functions.
FY12/2015(¥ million)

Forecasts

Differences

Differences(Ratio)Previous Forecasts*

Business Application Software

12,150‐1,550-11.3%

13,700

System Support

1,250

-150

-10.7%

1,400

Maintenance

600

-100

-14.3%

700

Provision of Consumables

650

-50

-7.1%

700

4,300

-200

-4.4%

4,500

3,350

-50

-1.5%

3,400

950

-150

-13.6%

1,100

PSF

650

-50

-7.1%

700

Order Placing and Acceptance, etc.

300

-100

-25.0%

400

17,700-1,900-9.7%

19,600

Network Service
Stock
Transaction

Total* Announced on February 12, 2015

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13

Chapter 2

Results Forecasts for FY12/2015[Year-on-year Comparison] Breakdown of Expenses(FY12/2015)
POINT

While expenses for quality assurance will increase, reduction ofsundry expenses will be promoted.

(¥ million)

FY12/2015

FY12/2014
Remarks

Forecasts

YoY Change

Results

Net Sales

17,700-1,19418,894 -Total Cost

15,200472

14,728 -Total Personnel
Expenses*

5,500

-177

5,677 Performance-linked bonuses

R&D Expenses

1,000

649

350 services

400

16

383 -

8,300

-18

8,318 -

2,500

-1,665

4,165 -

Advertising Expenses
Other

Operating Income

Development of new functions and

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14

Chapter 2

Results Forecasts for FY12/2015

Dividends per SharePOINT

The payment of an interim dividend of 12.5 yen per share for
FY12/2015 was decided as initially planned.

25 yen(52.1%)
Annual Dividend(Payout ratio)

20 yen(26.0%)

20 yen(23.8%)
Year10 yen
end

Year12.5 yen (Forecast)end

Year20 yen
endInterim 10 yen

FY12/20132013/12期

FY12/20142014/12期

Interim 12.5 yen (Final)

FY12/2015
2015/12期(Forecast)

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15

Chapter 3
Core Initiatives for FY12/2015

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16

Chapter 3

Core Initiatives for FY12/2015

Acquisition of Treasury Stock
POINT

Decision to acquire treasury stock was made for the purpose ofincreasing capital efficiency and providing returns to shareholders.

(1) Type of stock to be acquired: Common stock(2) Total number of shares available for acquisition: Up to 760,000(percentage in total number of shares outstanding (excluding treasury stock): 3.04%)(3) Total value of shares to be acquired: Up to 1,000,000,000 yen(4) Period of acquisition: August 3, 2015 – December 30, 2015
(Ref.) Treasury stock held as of June 30, 2015
Total number of shares outstanding (excl. treasury stock):Number of shares of treasury stock:

24,948,416
285,784* The number of shares of treasury stock includes the Company’s shares (83,200) held as an exclusive trust for the
Broadleaf employee shareholding association.

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17

Chapter 3

Core Initiatives for FY12/2015

Basic Strategies to Achieve Growth
POINT

Phase I (increase in order transactions) is underway as one of
the core initiatives for FY12/2015.

New-generation BL Cloud
Network-based
operation system(.NS series)

Group of BL Applications
BL Cloud Platform
Recommend
Automobile
dataAuto parts
data

Authentication

Super-highspeed searchPhase I

Phase II
New services

Data business

Alliance partners

Auto-parts dealer

Increase in ordertransactions

Car owners
Maintenance shops

Financial service/insurance/lease/travel/IT
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18

Chapter 3

Core Initiatives for FY12/2015

Top Priority Activities in the 2H of FY12/2015
POINT

Top priority is placed on the quality assurance for BL Parts Order System.
This system forms the basis for the increase in order transactions.
March 2015

June 2015

4Q 2015

Small error occurred when
implementing acceleration.

Postponed shipment ofmultiple simultaneousinquiry function.

Plan to start trial release.

2H

1H

FY2016

Add functions and improve performance of BL Parts Order System
Phase I
Increase in ordertransactions

Increase speed

Multiple simultaneoustransmission function

Improve function to promote its use

Develop new products that target maintenance shops.

Develop new-generation BL Cloud Platform.

Phase II
Create new
businesses

R&D for auto parts and services for car owners
Promote alliances for the use of data.
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19

Chapter 3

Core Initiatives for FY12/2015

Quality Improvement in Product Development
POINT

Development process will be improved and shipping standards will betightened to develop high-quality products and increase productivity.

Reform I

Strengthen system design team

Organize system design professionals to strengthen the review system.
=> Reduce rework, to increase productivity and reduce development period and cost.

Reform II

Tighten quality control standards

Implement stricter quality inspection, including third party examination by an outside
party, before shipping products.
=> Ensure quality at the time of shipping to also reduce selling expenses.

Reform III

Use new development infrastructure for new productdevelopment

Standardize new product development (use GCP) and use common modules.
=> This change leads to a temporary increase in expenses, but reduces maintenanceexpenses in the medium term.
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20

Chapter 3

Core Initiatives for FY12/2015

Efforts to Achieve Growth
POINT

Growth strategies, focusing on changing the profit structure,
have been implemented on an ongoing basis.
Ongoing
Action I

Increase in order transactions

Increase the number of BLP connections that become the basis for an increase inorder transactions.
Promote sales of the strategic product “Carpod Tab.”

Ongoing
Action II

Develop and launch new products

Reform the work analysis/operation optimization software “OTRS”(Adjust the timing of the release based on when the patent is acquired, etc.)
Develop new products that target maintenance shops to expand the customer
base.

Ongoing
Action III

R&D to create new services

Continue examination and research to promote the use of automobile-related data.

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

21

Chapter 3

Core Initiatives for FY12/2015

Strategy to Increase Order Transactions
The BL Parts Order System continues to steadily penetrate the auto parts
distribution market.

POINT

Parts dealers / maintenance shops

Number of connections with maintenance shops
Number of parts dealers participating in transactions

493

111

514

559

112

679

121

Carpod Tab

999

1,113

1,265

797
662

144

161

205

1,679

Number of Carpod Tab contracts

735

879

1,377

1,015

249

2013/12end 2014/3
end 2014/6
end 2014/9
end 2014/12
end 2015/3末
2015/3 end 2015/6
end
2013/12末
2014/3末
2014/6末
2014/9末
2014/12末
2015/6末

2013/12end 2014/3末
2014/3 end 2014/6末
2014/6 end 2014/9
end 2014/12末
2014/12 end 2015/3末
2015/3 end 2015/6末
2015/6 end
2013/12末
2014/9末

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22

Chapter 3

Core Initiatives for FY12/2015

Reform of Work Analysis/
Operation Optimization Software “OTRS”
POINT(Operational analysis)

Renewal of OTRS (work analysis and operation optimization software)using industrial engineering (IE) is scheduled.
(Comparative analysis)(Simulation)[Examples of companies that have installed the software] Japanese automakers, information equipment manufacturers (Canon and Murata Manufacturing), food and beveragecompanies (Calbee, Asahi Breweries, and Ajinomoto Bakery), stationery manufacturers (Max), aircraft parts manufacturers (Toyo Koku Denshi), academic institutions (Nihon
Automobile College, Chiba Institute of Technology, and Kyoto Institute of Technology), and incorporated foundations (Monodzukuri Research Organization).

OTRS is already commonly used as a workplace improvement tool by predominantly
manufacturing companies.
It is used also to support the transfer of skills and R&D based on industry-academia
partnerships. Based on these reasons, further sales growth is expected.
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23

Chapter 3

Core Initiatives for FY12/2015

DOCOMO Automobile Business Solution Summit 2015
Google Atmosphere Tokyo 2015
POINT

POINT

(“Future of the Automotive Aftermarket”)
Kenji Oyama participated in the panel discussion that examined
the theme of “Changes in automobile maintenance anddistribution brought about by data.”

Kenji Oyama participated as a panelist in the discussion
on R&D involving the application of telematics tocompany cars equipped with Google Map.

Continue R&D, etc. to create future next-generation services.
In addition, actively interact with companies in other industries.

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24Appendix [Reference Material]

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25

Appendix 1

Basic Information on the Company

Our Profile
Under our principle of maintaining a spirit of gratitude and happiness, we will continue
to grow as an integrated service provider that supports enriched car lives and people’s
lives by contributing to the automotive aftermarket with the power of IT and people.
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:¥7,147 million

Business Outline:

Provision of services on an IT network system that supports the business of the players in
the automotive aftermarket(E.g. development of business applications, platform for collaboration between different
business sectors, marketplace for recycled auto parts, and automotive content）

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: 816(as of December 31, 2014)
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

26

Basic Information on the Company

Appendix 2

Sales Domain
We have a single business segment, which consists of IT services,
but sales are classified into the areas below.
Large
Classification

Category
MiddleClassification

Small
Classification

Type of Business- Development and sales of business application software for specific businesses.
- Development and sales of package software, such as information security.
- Purchase and sales of PCs and printers, etc., and others

Business Application Software

Maintenance- Provision of maintenance services for business application software and hardware tocustomers to which we sold business application software.

Provision of Consumables- Purchase and sales of special ledger sheets and OA supplies used in businessapplication software.

System Support

Database Provisioning
Service- Provision of automobile-related information and a database of parts-related
information updated daily.

Server Provisioning
Service- Receipt of consideration for server maintenance necessary for the use of network
systems.

Payment Agency Service
for Recycled Parts- Operation of “Parts Station NET,” a distribution network for recycled parts that sharesinformation on the inventories of recycled parts.
Providing payment agency services when selling and purchasing recycled parts andcollecting commissions.

Stock

Network Service
Transaction

Electronic parts order placing
and acceptance system,- Provision of an electronic order placing and acceptance system for auto parts.
tablet-based business- Provision of tablet-based business terminals to maintenance shops, etc., and others
support tools and others

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27

Appendix 3

2Q Topics

Exhibition at the 34th Auto Service Show 2015
From June 19 to 21, 2015

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28

Appendix 4

Others

Efforts of “Car-unselor in Your Town”
1) Easy-to-understand explanations
2) Short waiting time3) Abundant selection of parts toselect from4) Dependable technical capabilities
5) Convincing priceCar owners

188 Shops
160
140

Services

Maintenance shops
64
Solutions
Training
Advertising support
Provision of tools
Consulting

24

Jun
2014
Copyright (c) Broadleaf Co., Ltd. All rights reserved.

Sep

Dec

Mar

Jun

2015
29

Disclaimer
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 thematerial, and are subject to potential risks and uncertainties. Please note that
actual results may differ from the statements contained in this material due tovarious factors.
For inquiries, please contact
Planning Department (Investor Relations)
Broadleaf Co., Ltd.
E-mail: broadleaf-ir@broadleaf.co.jp
URL: http://www.broadleaf.co.jp/english/

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