Business Results for FY12/2021
Medium-term Management Plan

Briefing Material
February 9, 2022

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

CONTENTS

1

Overview of FY12/2021 Business Results

2P

2Results Forecast for FY12/2022

11P

3

Medium-term Management Plan (2022-2028)

18P

4

Supplemental Information

38P

NOTE)
・In this document, “.c Series” represents cloud-based software"NS Series" represents conventional software
・Figures are rounded to the nearest unit.

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

1

CHAPTER 1

Overview of FY12/2021 Business Results

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

CHAPTER１ Overview of FY12/2021 Business Results

Summary
Transition of industry-specific software to monthly subscription models
Impact of transition to
subscription-1.654 billion yen

Progressed as planned

In order to realize smooth transition to “.c Series,” cloud-based software, from 2022,
for "NS Series," conventional software, the Company(1) restrained from renewals of a contract before its expiration(2) promoted the transition from multi-year lump-sum contracts to monthly subscription contracts(for some users)
The Company sold cloud-based software only to specific major users※No sales to the general users in 2021

Progressed as planned

Transition to stock revenue
Monthly sales ratio

39.9 %(+3.9pts YoY)

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

Promoted the transition of industry-specific software to monthly subscription models
Monthly subscription (SaaS) sales

858 million (YoY +24.0%)

Strengthened proposals for monthly support service
Monthly support service contract rate

63.4% (+11.1pts YoY)
3

CHAPTER１ Overview of FY12/2021 Business Results

Overview of the Consolidated Business Results(Millions of yen)

Revenue

FY2021

FY2020YoY change

YoY ratio

20,652

21,162

-510

-2.4%

5,753

6,088

-335

-5.5%

14,89815,074

-176

-1.2%

11,503

10,939

+564

+5.2%

Operating profit

3,395

4,135

-740

-17.9%

Profit before tax

3,233

3,820

-588

-15.4%

Profit attributable toowners of the parent

2,173

2,465

-292

-11.9%

24.72 yen

28.16 yenーー

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

Basic earnings per share

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4

CHAPTER１ Overview of FY12/2021 Business Results

Breakdown of Major Changes in Revenue (YoY)(Millions of yen)

+ YoY increase factors- YoY decrease factors

Increase inadditional sales
and unit sales Monthly
amountprice of+638
conventional
software+756

Revenue
21,162

FY2020
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Revenue if transition to
subscription models
had not been conducted

Decline in reaction tolarge-scale orders frommobile phone shops
-243

+978

22,140

Supplies+65
Devices
-316

～
～

SaaS
+166

Revenue
20,652 -510
Transition of
automotive software
to subscription models-1,654～～FY2021

5

CHAPTER１ Overview of FY12/2021 Business Results

Breakdown by Revenue Categories
YoYchangeMajor factors of increase/decrease(Amount)

FY2021

FY2020

Platform

11,47910,692

+786

+7.4%

SaaS

858

692

+166

+24.0% +166

PaaS/IaaS (basic)

7,830

7,555

+275

+3.6%

Lump-sum

2,448

2,365

+83

+3.5% Additional sale of conventional automotive software, etc. +579

Monthly amount

5,382

5,190

+192

+3.7% Increase in the total number of license +192

EDI and settlement

702

692

+10

+1.4% Increase in the number of users of the ordering platform +21(Millions of yen)SupportOthers (DX)
Application
By industry

YoY ratio

Increase in the number of users choosing monthly subscription contracts

Progress in transition to subscription models -496

1,866

1,596

+270

Increase in monthly support services contract ratio +205
+16.9% Increase in sale of supplies +65

222

157

+65

+41.6% Increase in the number of sale of DX Solutions etc. +68

9,173

10,469-1,297-12.4%
Progress in transition to subscription models-1,158
Additional sale of conventional automotive software, etc. +330
-11.3% Decrease in sale of conventional non-automotive software -172

7,868

8,868

-1,000

OTRS

223

204

+20

+9.6% Recovery in demand in manufacturing industry +20

Devices

1,082

1,398

-316

-22.6% Decrease in reaction to large-scale orders from mobile phone shops-243

20,652

21,162

-510

-2.4%

Total

NOTE) SaaS category has been established since FY2021, and the breakdown of Application sales has been changed retroactively to reflect the launch of cloud-based software.
For an explanation of revenue categories, please refer to the supplemental information on page 38.

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

6

CHAPTER１ Overview of FY12/2021 Business Results

Number of Users and Monthly Sales
Number of users(Companies)

38,006

8,247

・Progress in the transition of conventional software to
subscription models
・Installation of cloud-based software to certain major users
PaaS/IaaS (basic)

858

・Increase in the number of users of conventional software

37,400Monthly sales

7,609(Millions of yen)

SaaS

SaaS

692

Support services and Others

PaaS/IaaS
monthly amount・Monthly support services contract ratio increased
5,190

5,382

・Increase in the number of sale of DX solutions
EDI and settlement
・Increase in the number of users

Support services and Others

1,035

1,305

EDI and settlement

692

702

FY2020

FY2021

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7

CHAPTER１ Overview of FY12/2021 Business Results

Breakdown of Changes in Operating Profit (YoY)(Millions of yen)

Decline incost of sales
Operating +335

+ YoY increase factors- YoY decrease factors

profit4,135
Increase in
update costs
Increase inof the service
OthersOperatingadvertisinginfrastructure-60
profit-244 Increase in expenses
-44
3,395
personnel-740
expenses
Decrease-216
in sales-510
Increase inamortization expenseof cloud services-150

FY2020

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Cost of sales
・Increase in amortization expense of cloud services
・Decrease in purchase cost due to a decline in reaction tolarge-scale orders of devices
SG&A expenses, etc.
・Update of the service infrastructure
Strengthening and expansion of operating infrastructure
in preparation for the launch of cloud-based software
・Personnel expenses
Legal welfare expenses temporarily increased dueto the commencement of stock compensation system
・Advertising expenses
Active creation of online content and holding of webinars

FY20218

CHAPTER１ Overview of FY12/2021 Business Results

Overview of Balance Sheet(Millions of yen)

FY2021Year-end

FY2020Year-end

YoY change

Main breakdown

Current assets

8,405

7,752

Non-current assets

26,071

24,522+1,550 Intangible assets +2,123

34,47632,274+2,202

7,512

6,432

+1,080 Short-term interest-bearing debts +1,732

850

1,239

-389 Long-term interest-bearing debts-450

8,362

7,671

+690

Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total equity
Total liabilities and shareholders’ equity

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+653 Operating and other receivables +496

26,11424,602

Profit attributable to owners of the parent +2,173+1,512 Dividend payout -930

34,47632,274+2,2029

CHAPTER１ Overview of FY12/2021 Business Results

Cash Flow Analysis(Millions of yen)

FY2021

FY2020YoY change

Main breakdown

Profit before tax -588
Changes in operating and other receivables-1,274 (minus shows increase) -984

Cash flow from operating activities

3,783

5,056

Cash flow from investment activities-3,388-2,774-614 Acquisition of intangible assets -801

Cash flow from financing activities-108-2,084

Net changes in short-term loans payable+1,976 (minus shows decrease) +1,802

Free cash flow

395

2,283

-1,888

3,522

3,232

+290

Cash and cash equivalents

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10CHAPTER 2

Results Forecast for FY12/2022

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CHAPTER２ Results Forecast for FY12/2022

Forecast of Consolidated Results(Millions of yen)

Revenue

FY2022Full-year forecast

FY2021
Full-year

FY2022
1H Forecast

YoY change

FY2021
1H

YoY change

12,30020,652-8,352

5,800

9,937

-4,137

Cost of sales

5,500

5,753

-253

2,600

2,867

-267

Gross profit (loss)

6,800

14,898-8,098

3,200

7,070

-3,870

SG&A expenses, etc.

11,60011,503

+97

5,800

5,827

-27

Operating profit (loss)-4,8003,395-8,195-2,6001,243-3,843

Profit (loss) before tax-4,8003,233-8,033-2,6001,239-3,839Profit (loss) attributable toowners of the parent-5,0002,173-7,173-2,700795-3,495-56.62 yen

24.72 yen-

-30.60 yen

9.05 yen-

Basic earnings per share

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

12CHAPTER２ Results Forecast for FY12/2022

Key Points of Revenue
While the business is in good condition, cloud-based software, which is recorded as monthly
sales, becomes the main product, resulting in a significant decrease in sales.
Business Conditions

Changes from 2022

The number of users is trending upward, and will continue to grow in 2022

Change the main product for software sales
Conventional software "NS Series"
Sales recorded as Multi-year lump-sum

Amount of impact
Approx.

-8 billion

Cloud software “.c Series”
Sales recorded on a monthly basis

yenTransition of users of conventional software to cloud-based software will be sequentially
implemented in line with the expiration of previous lease contracts (5-6 years)
Lease expiration

User

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Lease contracts forconventional software(5-6 years)

Contracts for cloud-based software13

CHAPTER２ Results Forecast for FY12/2022

Forecast by Revenue Categories(Millions of yen)

FY2022Full-year
forecast

FY2021
Full-year

YoY change

YoY ratio

FY2022
1H forecast

FY2021
1H

YoY change

YoY ratio

Platform

9,800

11,479-1,679-14.6%

4,620

5,552

-932

-16.8%

SaaS

1,440

858

+582

+67.8%

470

398

+72

+18.2%

PaaS/IaaS (basic)

5,400

7,830

-2,430-31.0%

2,700

3,793

-1,093-28.8%

EDI and settlement

710

702

+8

+1.1%

340

346

-6

-1.6%

1,830

1,866

-36

-2.0%

920

912

+8

+0.9%

DX

420

222

+198

+89.1%

190

104

+86

+82.2%

Application

2,500

9,173

-6,673-72.7%

1,180

4,385

-3,205-73.1%

1,600

7,868

-6,268-79.7%

750

3,828-3,078-80.4%

OTRS

250

223

+27

+12.0%

120

138

-18

-13.0%

Devices

650

1,082

-432

-39.9%

310

419

-109

-26.1%

12,30020,652-8,352-40.4%

5,800

9,937

-4,137-41.6%

SupportBy industry

Total

NOTE) The breakdown of Application sales has been retroactively changed to reflect the launch of sales of cloud-based software.
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14

CHAPTER２ Results Forecast for FY12/2022

Breakdown of Changes in Operating Profit (Full-Year, YoY)
Decline incost of sales+253

Operatingprofit3,395

Decrease inpersonnel costs+108

Increase in
update costsof the service
infrastructure-104(Millions of yen)

+ YoY increase factors- YoY decrease factors

Cost of sales
・ In line with the release of cloud-based software,amortization expenses of cloud services will increase

Increase in
Othersadvertising-33
expenses-67

・Decrease in purchase of devices

Increase in amortization
expense of cloud services-362

FY2022(Forecast)

FY2021

SG&A expenses, etc.
・Update of the service infrastructure
Strengthening and expansion of operating infrastructure
in line with the release of cloud-based software andnew services
・Personnel expenses
Legal welfare expenses that temporarily occurredin FY2021 will decrease・ Advertising expenses, Others
Will strengthen sales of cloud-based software andDX services

Decrease Operatingin salesprofit -8,195-8,352-4,800

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15

CHAPTER２ Results Forecast for FY12/2022

Key Points of the Balance Sheet
While trade receivables are expected to decrease, advances received are expected to increase,so financial soundness will be secured even if it will result in a net loss.
Expected changes in the balance sheet(Comparison with the end of 2021)
AssetsTrend of total assets is expected
to go downward
No significant change in cash anddeposits (Utilize advances
received and available credit)

Liabilities
Trend in advances received is
expected to go upward (Lease
contracts of cloud-based software)
Trend of borrowings is
expected to go upward(Utilization of available credit)

Trade receivables will be on a
downward trend (Decrease due torecording of monthly sales)

EquityTrend of total shareholders’equity is expected to go
downward.

Intangible assets is expected toincrease (Continue developmentof cloud services)

Retained earnings
is expected to decrease

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In the case of lease contract,
the Company receives a lumpsum payment for 5 years

Supplemental information
・Two patterns of contracts for cloud-based software“5-year lease contract” and “monthly subscription contract"
・Majority are expected to be sold under"5-year lease contract"
・Even if the majority of the contracts consist of monthly
subscription contracts, there is no concerns about working
capital since the Company will utilize existing available
credit16

CHAPTER２ Results Forecast for FY12/2022

Dividend forecast
Dividend per share(Yen)

FY2021

FY2020(Year-end is forecast)

FY2022(Forecast)

FY2021 Year-end dividend・Profit exceeded the forecast

Interim

6.60

4.00

Undecided

Year-end

6.60

4.70

Undecided

Annual

13.20

8.70

Undecided

Dividend
payout
ratio

46.9%

35.2%

ー

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・Year-end dividend increases by 0.7 yen fromthe previous forecast, and the Company plans to
pay 4.7 yen per share
FY2022 Dividends
・Undecided
Plans to announce forecast once a reasonablecalculation becomes possible in light of the
progress of the medium-term management planand the status of retained earnings

17

CHAPTER 3

Medium-term Management Plan (2022-2028)

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CHAPTER３ Medium-term Management Plan (2022-2028)

Background of Formulation of the Plan
Updated the medium-term management policy announced in 2021 and formulated a performanceplan up to 2028 in accordance with the launch of “.c Series,” cloud-based software.
February 2021 Announced the mid-term management policy
Establishment of growth strategies and priority measures under the theme of “2 DX"
DX (1) Promote clients' digital transformation
DX (2) Add values to its service infrastructure as the Data Exchanger

October 2021

Released “.c Series,” cloud-based software

Started offering from 2022. The transition from conventional software is expected to be completed in 2028.

February 2022 Announced medium-term management plan (2022-2028)
Updated the medium-term management policy announced in 2021 and formulated a performance plan up to 2028

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19

CHAPTER１ Overview of FY12/2021 Business Results

Growth strategy

Growth strategy ①

Growth strategy ②

Cloud penetration

Expansion of services

Software services
Auto
parts
... dealer

Auto
body

Software users

Auto
Maintenance

Auto maintenance shops
and auto parts dealers, etc.

Platform Services...

Logistics
MaaS

Finance

Consumer

3rd party

Ordering

API/SDK
Digital Transformation

Database

Finance companies,
system companies, etc.
(Service Provider)

Consumer

Data Exchanger
Transaction data

Broadleaf Cloud Platform
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Master data

20

CHAPTER３ Medium-term Management Plan (2022-2028)

Consolidated Performance Plan
Record-high performance in 2026 is a milestone, continuing to grow as transition to stock revenue
continues. The Company aims to achieve operating margin of 40% and profit of 8 billion yen in 2028.
FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028

Revenue

12.3

14.7

18.5

22.0

25.5

29.0

32.5

Operating profit (loss)

-4.8

-2.7

1.0

3.3

6.7

10.0

13.0

ー

ー

5%

15%

25%

34%

40%

Profit (loss) attributableto owners of the parent

-5.0

-2.9

0.6

2.0

4.2

6.3

8.0

Equity attributable toowners of the parent

20.0

17.5

18.0

Percentage of equity
attributable to ownersof the parent

60%

50%

52%

(Billions of yen)

Operating margin

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21

CHAPTER３ Medium-term Management Plan (2022-2028)

Revenue Plan by Business Categories(Billions of yen)

Cloud business

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028

2.6

5.9

10.4

15.2

20.0

25.0

29.1

Platform services

0.7

0.9

1.4

1.6

1.9

2.9

4.1

Software service

1.9

5.0

9.0

13.6

18.0

22.1

25.0

9.7

8.8

8.1

6.8

5.5

4.0

3.4

License sale

1.9

1.6

1.6

1.6

1.6

1.5

1.5

Ancillary services

6.5

6.0

5.2

3.8

2.7

1.5

1.2

Device sale, etc.

1.3

1.2

1.3

1.4

1.3

1.1

0.7

12.3

14.7

18.5

22.0

25.5

29.0

32.5

Conventional businessTotal Revenue

NOTE)Please refer to page 39 for a comparison between the breakdown of FY2022 sales forecasts and sales forecasts by revenue category.
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22

CHAPTER３ Medium-term Management Plan (2022-2028)

Revenue Trend in Cloud Business(Billions of yen)

Cloud business drives revenue growth
Revenue categories

New platform services

4.1※NOT included in theperformance plan

Auto finance, logistics MaaS, etc.

2.9

Platform services

EDI and settlement

Ordering platform

1.9

Software service

SaaS

Cloud-based software, DX solutions

DX

1.6
25.0
22.1
1.4

18.0

13.6
0.9
0.7
1.9

5.0

FY2022

FY2023Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

9.0

FY2024FY2025

FY2026FY2027

FY202823

CHAPTER３ Medium-term Management Plan (2022-2028)

Revenue Trend in Previous Business(Billions of yen)

As cloud business progresses, revenue of conventional business is expected to shrink.
Revenuecategories
By industry

License sale
License fees for conventional software

Ancillary services
Network usage fees and support services fee
for conventional software

Device sales and OtherOTRS
PaaS/IaaS (basic)
Support Support services
Support Supply

Devices , forms, etc.

1.9Devices

1.6

1.6

1.6

6.5

6.0

5.2

3.8

1.3

1.2
FY2023

1.3

1.4

1.6
2.7
1.3

FY2024FY2025

FY2026FY2022
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1.5
1.2
0.7

1.5
1.5
1.1
FY2027

FY202824

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ① Penetration of cloud-based products (1)Key to achieving the performance target is the penetration of “.c Series,” cloud-based software

Key Factors for Success
Progress

Cloud-based
software sales

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= Cloud transition rate (Rate of transition to cloud-based software)= Number of licenses × Average monthly license fee × (1 - churn rate)
Total number of licenses
for cloud-based software

Monthly sales per license
for cloud-based software

Average churn rate per
year for cloud-based
software25

CHAPTER１ Overview of FY12/2021 Business Results

Growth Strategy ① Penetration of cloud-based products (2)Cloud transition rate

40%

Users of conventional software will gradually transit to cloud-based
software over the next 6 years(End of 2024)

Client base
Number of users *Repeat rate **33,000 companies

95% or more

Product
Fully remodeled

Cloud-based software
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

* Auto maintenance shops, auto body shops, auto parts dealers, and recycle shops are covered.
** Repeat rate of conventional software26

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ① Penetration of cloud-based products (3)Number of licenses

Average monthly license fee

24,000 × 23,000(End of 2024)

yen/month

In addition to expanding the market through high scalability,
license system is changed to an easy-to-introduce system(2024)

Market expansion
Number of Companies *More than

100,000 companies

Car dealers (16,000 companies) becomes the new market
due to easier customization of the software

Change in the license system
Number of personnel *More than

500,000 people

From industry-specific to job-specific license*Number of companies and personnel in auto maintenance shops, auto body shops, auto parts dealers, and recycle shops
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27

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ① Penetration of cloud-based products (4)Role license
based on each industry and job category

Terminal freesince the software is running on the Web

・Role licenses * subdivided by job categories is set
in addition to basic licenses for each industry

・Real-time integrated management of information andsystems of each base is available at the headquarter.
・Portability that enables usage in any location"NS Series," conventional software
Use industry license by turns“.c Series,” cloud-based software

Each person uses role license based on their job categories
Basic

Head Office

Mechanic
Industry licenseManagerFront・・*Available functions are set based on each account ID
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28

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ① Penetration of cloud-based products (5)Churn rate
Less than1

Cloud-based software is essential for business operations%(Average per year)

API
Provided as a
total management system

Real-time linkage with other systems

Data Analysis
Achieve client success

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Support knowledge management

29

CHAPTER１ Overview of FY12/2021 Business Results

Growth Strategy ① Penetration of cloud-based products (6)Single sign-on
・Login to other systems with the samecloud-based software account ID“.NS Series,” conventional software= Administrative processing system

Issuance of estimates and invoices,client management, etc.

Real-time linkage

Analysis and sharing

by using the APIof the knowledge

・Function linkage and data linkage

・Support knowledge management
based on the usage conditions, etc.

“.c Series,” cloud-based software= Total management system

Accounting & tax
API

Sales & inventory
control

CRM
API

API
API

Human resources& laborKnowledge sharing
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API

Groupware30

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ② Expansion of Services (1)API linkage with other systems

Customizable bydevelopment vendors

Constructed with a
combination of micromodules

Development vendor

Other systems

Broadleaf software

Broadleaf software

Broadleaf software

Software service

Data
conversion

Service development by 3rd party

Service
ProviderService
ProviderMicromodules

Database

Platform Services

Broadleaf Cloud Platform
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31

CHAPTER１ Overview of FY12/2021 Business Results

Growth Strategy ② Expansion of Services (2)Establish industry standards
with the Ordering platform

CAGR

Aims to penetrate the ordering platform by incorporating the ordering platform into
cloud-based software as a standard function (100% adopted)

30% or more
Compliance with theElectronic Book Storage
Act will be a tailwind

Auto repair partstransaction market
New parts

Recycled parts

850 billion yen 200 billion yen Equipped as
Usage level of electronic traderemains low

standard(100% adopted)

EDI adoption rate *28.4%

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Introduced to vehicle
examination chainswith high transaction
volumes, etc.

Introduced toparts dealers andrecycle shops

Promote usage in small-tomedium-sized auto maintenanceshops and auto body shops*Rate of adoption of the ordering platform by the Company’s software users (auto maintenance shops)

Industry standard

32

CHAPTER３ Medium-term Management Plan (2022-2028)

Growth Strategy ② Expansion of Services (3)Development of Auto Finance Platform
Auto Finance Platform
Finance businesses

Software users

Consumer(Car Owners, etc.)

Auto loans
Company A
Auto insurance

Business operator B

Warranty
・・Business operator C
Propose multiple financing services
to consumers

Broadleaf Cloud Platform
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33

CHAPTER３ Medium-term Management Plan (2022-2028)

Policy for Allocating Management Resources

Concentrate all management resources on growth strategies of “Penetration of cloud-based
products" and “Expansion of services"
Portfolio management
Implementation of portfolio management to realize optimal allocation of management resources
Economic value(ROIC, sales growth rate, etc.)+

Market attractiveness andthe Company’s strengths and advantages(Market growth rate, market share, etc.)

Investment in human capital andintellectual property
Recognize human resources and intellectual property as the core assets for realizing the Company’s growthstrategy, and make active investments in maximizing human capital and IP resources

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

34

CHAPTER３ Medium-term Management Plan (2022-2028)

Environmental changes and their impact on the Company’s business～Automobility Industry ～Sophistication of maintenance・Increasing demand for IT systems that support maintenance of EV and sophisticated vehicle

EV shift・Increasing demand for accumulation and sharing of knowledge

・In the case of large-scale business there is increasing demand for DX investment in order toimprove management efficiency→Introduced cloud-based software in the market

Sophistication ofvehiclePolarization of business operators
・The number of companies tends to decrease while the number of cars tends to increase・Demand for maintenance such as preventive inspection is increasing→Changed the market from the number of companies to the number of employees

DX inadministrations
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Response to computerization due to changes in the legal system
・Increasing demand for electronic storage of documents

35

CHAPTER３ Medium-term Management Plan (2022-2028)

Sustainability Policy
The Company aims to "realize a sustainable society" and “enhance its corporate value" throughthe practice of the ideas embodied in the "Corporate Philosophy" and "Origin of Company
Name" of Broadleaf

Basic Policy

From a long-term perspective, the Company will strive to expand direct and indirect positive impacts (value
creation) and reduce negative impacts (social responsibility) to various stakeholders by addressing priority issues,

materiality, within "sustainability."

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

36

CHAPTER３ Medium-term Management Plan (2022-2028)

Relationship between the Company’s business and SDGs
Theme of resolution

Corporate activities that lead to the resolution of issues

Related SDGs

・Provision of IT system for proper vehicle inspections and maintenanceRealization of a safe,
secure, and comfortablemobility society

・Promote the popularization of EVs and sophistication of vehicle

・Provision of ordering platforms for recycled auto parts
Promotion of recycle-oriented
usage of resources

・Promotion of home and remote work (establishment of systems andinfrastructure)
Realization of a comfortableworking society
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

・Selected as one of “Telework Pioneer 100 company in Japan”

37Supplemental Information

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

Supplemental Information

Correspondence Table between Business Categories and Revenue Categories
Breakdown of FY2022 revenue forecast(Billions of yen)

Business category
Cloud business

Revenue category
26

Platform services

7

Platform

EDI and settlement

7

Software service

19

Platform

SaaS

14

DX

4

By industry

16

OTRS

3

PaaS/IaaS (basic)

54

Support Support services

11

Platform

Support Supplies

6

Application

Devices7

Conventional business

97

License sale

19

Ancillary services

Device sale, etc.

Total revenue

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

65

13

123

Application

Platform

123

39

Supplemental Information

Details of Revenue Categories
Category
Major category

Mediumcategory

・Provision of ".c Series," cloud-based software
・Provision of ".NS Series" in a monthly subscription contract
・Provision of "CarpodTab (CPT)," a tablet-type business terminal

SaaS

PaaS/IaaS(basic)Platform
EDI andsettlement

Details

Small category

PaaS lump sum

・Provision of basic software and common functions of ".NS Series"

PaaS monthly

・Provision of database for ".NS Series" (auto parts, vehicles, and index information, tourist spot data, etc.)

IaaS monthly

・Provision of network server function required for the use of ".NS Series"

PSF

・Provision of settlement agency services for “Parts Station NET,” a network specialized in the transaction of recycled auto parts

BLP

・Provision of “BL Parts Order System,” an ordering platform for auto parts

Support services ・Provision of support service and hardware maintenance service for clients using ".NS Series"
SupportSupplies

・Sale of exclusive forms and OA supplies

Others (DX)・Provision of DX solutions such as website creation tools and groupware, etc.

By industry

・Sale of ".NS Series" (excluding basic software)(Automotive category: auto maintenance shops, auto body shops, car dealers, auto parts dealers, auto glass shops, auto electricalequipment shops, recycling shops, etc.)(Non-automotive category: machine tool dealers, mobile phone distributers, travel agencies, sightseeing bus operators, etc.)

OTRS

・Sale of "OTRS", a work analysis and business optimization software

Devices・Sale of devices such as PCs, printers, and peripheral devices, etc.

Application

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

40

Supplemental Information

Changes in Revenue Categories
Before establishing the SaaS category

After establishing the SaaS category
Platform

Platform

SaaS

Basic

PaaS/SaaSEDI andsettlement

PSF

IaaS
BLP

CPT

CPT

SaaS
PaaS/IaaS(basic)
EDI andsettlement

SupportSupportOthers (DX)

Others (DX)

Application
By industry

Automotive

Non-automotive

Monthly
subscriptions(SaaS)

PaaS
PSF

IaaS
BLP

Application
By industry

Automotive

Non-automotive

Lump-sum

OTRS

OTRS

Devices

Devices

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

41

Supplemental Information

Breakdown of Details by Revenue Categories (Full Year)(Millions of yen)

FY2021

FY2020YoY change

YoY ratio

Platform
SaaS
PaaS/IaaS (basic)
PaaS (basic software/lump-sum)
PaaS (database/monthly)
IaaS (monthly)
EDI and settlement
PSF
BLP
SupportSupport services
Supplies
Others (DX)11,479
858
7,830
2,448
2,965
2,417
702
543
159
1,866
1,083
784
222

10,692
692
7,555
2,365
2,939
2,251
692
554
138
1,596
878
719
157

+786
+166
+275
+83
+26
+166
+10
-11
+21
+270
+205
+65
+65

+7.4%
+24.0%
+3.6%
+3.5%
+0.9%
+7.4%
+1.4%
-2.0%
+15.3%+16.9%+23.3%+9.1%+41.6%

Application
By industry
Automotive
Non-automotive
OTRS
Devices
Total

9,173
7,868
6,779
1,089
223
1,082
20,652

10,469
8,868
7,607
1,261
204
1,398
21,162-1,297-1,000
-828
-172
+20
-316
-510

-12.4%-11.3%-10.9%-13.6%+9.6%-22.6%-2.4%

NOTE) The breakdown of Application sales has been retroactively changed in line with the launch of cloud-based software sales.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

42

Supplemental Information

Sales Recognition in Lease Contract
Previous software ".NS Series" (for 6-year contracts)
Most clients choose lease contracts. Prior to the expiration of the software rights purchase period (= lease period),
the Company may trade in the remaining lease balance.
(Millions of yen)

Sales recorded 1.5

Sales recorded 2
Initial contract2

2

Next contract minus
trade-inBroadleaf
Trade-in-0.5
Lump-sum

Lump-sum
Finance lease

Leasing company
72 monthly payments
Initial contract(2 million yen)

ClientNOTE)Amount is an example.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Trade-in(1.5 years worth)

Renewal ofcontract before
6 years elapses
Next contract(2 million yen)

Expiration of thefirst contract

72 monthly payments
Expiration of thenext contract43

Supplemental Information

Impact of Transition to Cloud-based Software
In the case where existing users with 6-year contract change to “.c Series” of cloud-based software(regardless of the type of contract)

Sales
recorded
1.5

2(Millions of yen)

Sales that would have beenrecorded if the contract
had been made in lump-sum

Lump-sum contract(6 years worth)

Sales
recorded150

Influence ②
Sales is recorded on amonthly basis, so the annual
sales will be 1/6 to 1/72

2*0.33 ・・
Tradein-0.5

Tradein

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

In 2021
Timing of conventional
contract renewal

Sales(monthly amount)

Sales recorded
0.33(annually)-0.5

Impact ①
During this period, theCompany is waiting forcontracts to expire, so thenumber of deals will
If the contract was changed temporarily decrease.
at this timing
*
0.33
Sales
recorded-0.5NOTE)Amount is an example-0.17* If sales for 12 months were recorded

In 2017
Contract renewal+Additional license+Measured-rate charge

In 2023
Upon expiration of
the contract, contract
for clouds-based
software starts

Trade-in< (Lump-sum)44

Supplemental Information

Reasons for the Decline in Revenue in 2022
Breakdown of Annual
Acquisitions
6-year lease contract for conventional software(single-year lump-sum)

6-year lease contracts for conventional software(single-year lump-sum)Monthly subscription contracts for conventional software(multi-year monthly)
Annual6-year lease contracts for conventional software

Contracts for cloud-based software(multi-year monthly)

20.7

Number of acquisition × 6 years' worth of usage fees

Changes from 2021 to 2022

-8.4

(Recorded in lump-sum in a single-year)★ Sales centered on cloud-based software
AnnualMonthly subscription contracts for conventional
softwareContracts for cloud-based software

12.3→The ratio of acquired 6-year lease contracts forconventional software and the ratio of acquired
cloud-based software contracts will reverse→Sales of 6-year lease contracts will decrease(-8.7 billion yen)

Number of acquisitions × monthly usage fee
× 1 to 12 months (average 6 months)

vs.

(Recorded in monthly amount for multiple years)

Sales Cloud Software will increase (+600 million yen)Monthly service contract
before the previous year
Total number of contracts × monthly fee
× 12 months(Recorded in monthly amount for multiple years)
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

FY2021

FY2022Composition of annual sales(billions of yen)

NOTE) Composition ratio is not accurate

45

Supplemental Information

Reasons for Continued Revenue Growth since 2023
(Billions of yen)

32.5
In the year following the acquisitionof a contract, sales are recorded for
12 months, so the amount of sales
will be doubled.

Annual6-year lease contracts for conventional software
Number of acquisition × 6 years' worth of usage fees

14.7

★ Revenue in 2023 consists of:Sales of 6-year lease contracts for conventional software

12.3

Sales of cloud-based software acquired in 2023

(Recorded in lump-sum in a single-year )12-month sales of cloud-based software acquired in 2022

AnnualMonthly subscription contracts of the current software
Contracts for cloud-based software

Number of acquisitions × monthly usage fee
× 1 to 12 months (average 6 months)

Sales of monthly services acquired before 2021

(Recorded in monthly amount for multiple years)

Monthly services contracts
before the previous year
Total number of contracts × monthly fee
× 12 months(Recorded in monthly amount for multiple years)

FY2022

FY2023

FY2028
Revenue growth will continue until 2028 as the transition
from 6-year lease contracts for conventional software tocontracts for cloud-based software continues.

NOTE) Some conventional software is not planned to be transit to cloud-based software,and cloud-based software is recorded as monthly sales regardless of the type of contract.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

46

Supplemental Information

Origin of the Corporate Philosophy and Company Name

“Gratitude and Happiness”
Broadleaf is promoting businesses that prosper together with clients, with the importance of the spirit of "gratitude and happiness", which is indispensablefor deep ties between people and companies. When our products and services contribute to our clients' businesses, clients will feel satisfied about having
connection with Broadleaf.
And We believe that the realization of daily growth in our businesses will create a sense of happiness.
With the hearts of clients, we will also be able to create "gratitude and happiness" that will lead to the provision of better products, services, and value tosociety.

Corporate Philosophy
Based on the spirit of "gratitude and happiness," we will develop business applications specializing in a wide range of industries and sectors, and contribute to
the creation of our client' businesses by providing better products and services.

Origin of the company nameBroadleaf means just what it says – a broad leaf.
Broad leaves bathe in sunlight during spring and summer so that they can grow. In winter, the leaves and fruit fall from the tree and return to the ground as nutrients.
This cycle creates a broader field in which a range of different plants and animals can live together.
We chose the name Broadleaf because we wanted to take a single leaf and plant it in the vast field of business, so that we can grow countless more leaves, produce fruitand keep on growing in the future, hand in hand with our customers and everyone else.

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

47

Supplemental Information

Corporate Profile
Company Name

Broadleaf Co., Ltd

Representative

Kenji Oyama, Representative Director and President

Listed on

Listed on the First Section of Tokyo Stock Exchange (3673) *Planning to move to the Prime Market

SectorInformation and telecommunication

Founded/established

December 2005/September 2009

Capital stock

7.148 billion yen (consolidated)

Business Year

From January 1 to December 31

Business Outline

The Company offers a wide range of IT services, including its independently developed business software.
In addition to providing business software that serves as core systems mainly to business operators in the automotive
aftermarket industry, the Company delivers a variety of unique services including an ordering platform for auto parts

and big data analysis as a one-stop service.
Looking ahead to the future evolution of mobility society, the Company is also promoting research and studies
related to the practical use of leading-edge technologies
Head Office Location:

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

Domestic Offices

28 Business Offices and 3 Development Centers in Japan

Major Subsidiaries

Tajima Inc.

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

48

Disclaimer

The statements regarding results forecasts and future forecasts contained in this materials

are forecasts based on information available at the time of preparation of the materials, sothey include potential risks and uncertainties.
Therefore, please be aware that actual results may differ from these results forecasts due tovarious factors.

Contact Information

Broadleaf Co., Ltd
Corporate Communication Department
E-mail:bl-ir@broadleaf.co.jp
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.