2Q FY12/2018

Business Results Briefing
Broadleaf Co., Ltd.
TSE 1st Section: 3673

August 3, 2018
Broadleaf Co., Ltd. All rights reserved.

Contents

Executive Summary: General Overview

1

Chapter 1: Overview of 1H Business Results

2

Chapter 2: Results Forecasts

10

Chapter 3: Recent Initiatives

15

Appendix: Corporate Profile, Sales Fields, etc.

20

Note: Under IFRS, figures smaller than the units of display are rounded off. Under
Japanese accounting standards, figures smaller than the units of display are omitted.

Broadleaf Co., Ltd. All rights reserved.

Executive Summary
1General Overview
Actualresults

The consolidated results for the first half of 2018 included
increases in both revenue and profit.
The full-year earnings forecasts were updated to reflect the actual
results for the first half.

Results
Forecasts

Expansion oftarget customers

Expansion of thebusiness field

Revenue
Operating profit
Profit¥21.2 billion¥3.9 billion¥2.5 billion(up 16.5% year on year)(up 29.5% year on year)(up 29.4% year on year)

As the group strategy, full-scale sales were made to maintenance providers of allscales.
- Input of the upgrade version equipped with AI into medium-/large-scale providers (3Q)
- Input of the next-generation system (limited functions) into new small-scale providers (3Q)

The data service operation has begun to be established as a business.
- Recall data matching commenced in cooperation with an auto manufacturer (first half)

Broadleaf Co., Ltd. All rights reserved.

2

Chapter 1 Overview of 1H Business Results

Broadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results
3

PL Summary (Consolidated, IFRS)

Exceeded the initial forecast. Significant increases in both revenue and profit from the same period of theprevious year.
(¥ million)

FY2018FY2017

1H1HFY2018
YoY Change

YoY (Ratio)

InitialForecasts

Revenue

10,0907,926+2,163+27.3%

9,400

Operating profit

1,542

918

+624

+67.9%

950

Profit

998

559

+439

+78.5%

600

EPS(*)¥11.39¥6.31+¥5.08+80.5%¥6.85* Calculated assuming that the stock split (1:2) which took effect on April 1, 2018 was carried out at the beginning of FY12/2017.

Broadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results4Sales by Category (Consolidated, IFRS)Sales of Business Application Software exceeded the initial forecast. Revenue increased in all three areasfrom the same period of the previous year.

(¥ million)

FY2018FY2017(*)

1H

1H

FY2018YoY Change

YoY (Ratio)

InitialForecasts

6,596

4,889

+1,706+34.9%

5,870

System Support

649

612

+37+6.1%

660

Maintenance

291

270

+21+7.6%

280

Provision of Consumables

359

342

+17+4.8%

380

Network Service

2,844

2,425+420+17.3%

2,870

Stock

2,334

1,921+413+21.5%

2,360

453

467-14-3.1%

480PSF

304

318-14-4.4%

330

Order Placement and Acceptance149

150-0-0.2%

150

58

36+22+59.8%

30

10,0907,926+2,163+27.3%

9,400

Business Application SoftwareTransaction

OthersTotal* Sales from Tajima Incorporated, which was consolidated from 3Q of FY12/2017, are not included.

Broadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results
5(Reference) Sales by Category(Non-Consolidated, Japanese Standard)
Significant increase in sales in Broadleaf non-consolidated Business Application Software.
Continued sales growth in Network Service.
(¥（百万円）million)

FY2018FY2017

1H

1H

YoY Change

YoY (Ratio)

5,845

4,940

+905+18.3%

System Support610

610-0-0.0%

Maintenance283

269+13+5.2%

Provision of Consumables

326

340

-14-4.1%

Network Service

2,566

2,424

+142+5.9%

Stock

2,054

1,921

+133+6.9%

452

467

-14-3.1%

PSF

303

317-14-4.4%

Order Placement and Acceptance149

149-0-0.2%

59

35+23+63.9%

9,023

7,975

+1,047+13.1%

Business Application Software

Transaction

Others
Total

Broadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results
6(Reference) Breakdown of Sales in Business Application Software(Non-Consolidated, Japanese Standard)
The strong performance of user renewals, especially user renewals in the automotive sector, was thedriving force.
(¥ million)

FY2018FY2017

1H

1H

YoY Change

YoY (Ratio)

Automotive

4,407

3,598

+808

+22.5%

Renewed

4,016

3,174+841+26.5%New customers

391

424

-32-7.8%

Non-automotive

995

883

+112+12.7%

Renewed683

601+81+13.6%

New customers

312

281

+30+10.8%

Others442

458-15-3.4%

5,845

4,940+905+18.3%

TotalBroadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results

Breakdown of Increase/Decrease in Operating Profit(Consolidated, IFRS)

7

In addition to the effects of the revenue increase of Broadleaf, Tajima also contributed to the profit increase.
(¥ million)

A rise in sales+1,047

A rise incost of sales-84

A rise inpersonnel
expenses-94
A rise in share-

A rise inother SG&A
expenses-19

related expenses-184

Tajimaoperatingprofit+11OperatingProfit
1,542
Consolidatedadjustment-54

OperatingProfit918

FY2017
1HBroadleaf Non-consolidated
Broadleaf Co., Ltd. All rights reserved.

FY20181H

Chapter 1 Overview of 1H Business Results
8

BS Summary (Consolidated, IFRS)
Decline in cash and cash equivalents due to acquisition of own shares and dividend payout, etc.
(¥ million)

FY2018End of 1H

End ofFY12/2017

YoY Change

Main Factors for
Increase/Decrease

Current Assets

10,286

11,400-1,114Non-current Assets

17,351

16,663+688

Total Assets

27,63728,063-426‒Current Liabilities

7,589

7,478

+111‒

431848-417

Decline in long-term interest-bearing debt (-387)

8,019

8,326

-306

‒

Non-current Liabilities
Total Liabilities

Decrease in cash and cash equivalents (-1,080)

Increase in intangible assets(+714)

Total Shareholders'Equity

19,61819,737-120

Recognition of profit(+998)
Decrease by purchase of treasury shares(-1,005)
Decline due to year-end dividend payout (-487)

Total Liabilities andShareholders' Equity

27,63728,063-426‒

Broadleaf Co., Ltd. All rights reserved.

Chapter 1 Overview of 1H Business Results
9

CF Summary (Consolidated, IFRS)

While expenditure for software development investment and other costs increased, operating cash flow
increased and thus free cash flow increased.
(¥ million)
CF from operating
activities
CF from investing
activities
CF from financing
activities

FCF

Cash and cash
equivalents

FY2018FY2017

1H

1H

YoY Change

Main Factors for
Increase/Decrease

1,516

562+953

Increase in profit before tax-1,008-464-544

Increase in purchase of intangible assets (-551)-1,583-1,424-159

Increase in purchase of treasury shares

508

98+410‒4,8906,407-1,517‒

Broadleaf Co., Ltd. All rights reserved.

(+642)(-475)

10

Chapter 2 Results Forecasts

Broadleaf Co., Ltd. All rights reserved

Chapter 2 Results Forecasts
11Results Forecasts (Consolidated, IFRS)The full-year results forecasts were updated in light of the results for the first half and the recent businesssituation.
(¥ million)

FY2018FY2017Full-year
Forecasts(Aug. 3)Full-year
Results

FY2018YoY
ChangeYoY(Ratio)

InitialForecasts

Revenue

21,20018,195+3,005+16.5%

20,400Operating profit

3,900

3,011+889+29.5%

3,300

Profit

2,500

1,932

+568

+29.4%

2,100

EPS (*)¥28.58¥21.81+¥6.77+31.0%¥24.02* Calculated assuming that the stock split (1:2) which took effect on April 1, 2018 was carried out at the beginning of FY12/2017.

Broadleaf Co., Ltd. All rights reserved.

Chapter 2 Results Forecasts

Sales Forecasts by Category (Consolidated, IFRS)

12The sales forecasts for Business Application Software were updated in light of the progress in the first half.
FY2018FY2017Full-year Forecasts

Full-year Results

Business ApplicationSoftware

13,96011,737+2,223

13,130System Support

1,310

1,264+461,340

Maintenance580

556+24580

Provision ofConsumables

730

708+22760

Network Service

5,930

5,194+7365,930

Stock4,820

4,177+643

4,820

960

939+211,010

PSF

650

642+8680

Order Placement andAcceptance310

296+14330

Others150

78+72100

21,20018,195+3,005

20,400(¥ million)

Transaction

Total

FY2018Broadleaf Co., Ltd. All rights reserved.

YoY Change

InitialForecasts

Chapter 2 Results Forecasts

Breakdown of Increase/Decrease in Operating Profit(Consolidated, IFRS)

13In addition to the effects of the revenue increase of Broadleaf, Tajima also contributed to the profit increase.
(¥ million)

A rise in sales+1,580A rise incost of sales-274

Operating
Profit3,011

FY2017Full-year

A rise inpersonnel A rise in shareexpenses
A rise inrelated-199
otherexpenses
SG&A-210
expenses-146

Broadleaf Non-consolidated

Tajimaoperatingprofit+182

Operating
Profit3,900
Consolidated
adjustment-44

FY2018Full-year Forecasts(Aug. 3)

Broadleaf Co., Ltd. All rights reserved.

Chapter 2 Results Forecasts
14Dividends

The year-end dividend forecast was revised to ¥6.50, an increase of ¥1.00 per share from the previously
announced forecast.
Together with an interim dividend of ¥5.50, the annual dividend is ¥12.00, an increase of ¥1.00 year on year.
Annual dividend(Payout ratio)¥11.00（50.4%)¥10.625(53.8%)

Year-end

Year-end¥6.25

Interim¥4.375FY2016¥12.00（42.0%)

Year-end¥6.50(Forecast)Interim¥5.50(Fixed)¥5.50

Interim¥5.50

FY2017FY2018(Forecast)

Note: Amount after adjustment for the stock split (1:2) on the effective dates of December 17, 2016 and April 1, 2018

Broadleaf Co., Ltd. All rights reserved.

15

Chapter 3 Recent Initiatives

Broadleaf Co., Ltd. All rights reserved

Chapter 3 Recent Initiatives
16

Product Development - AI Input of “.NS3Ai” for medium- to large-scale maintenance providers in 3Q

Search/display

Data analysis

Extraction

BIG DATA×Extension BL code

DATA analysis

Analysis of big data

Based on the relevance and frequency

AI for conforming parts

Discovery of relevance/regularity

Display of the best results

which Broadleaf possesses

The more use, the more convenience due to the learning effects,
which increases with the use by each user

Broadleaf Co., Ltd. All rights reserved.

Chapter 3 Recent Initiatives

Measures for Expansion of Transactions

17The system link with NGP Group (*) will start from the second half.

PSF

This link will make it possible to cover about half of the market of recycled parts.
Toward an increase in the volume handled at the platform for transactions of recycled parts of the Company(Parts Station NET)

Significant extension of the digit number of the BL code

BLP

It becomes possible to identify products in detail under the BL parts order systemToward an increase in the rate of use and the number of users of the BL parts order system (such as theplacement and receipt of orders)* NGP Japan Automobile Recycling Business Cooperative

Broadleaf Co., Ltd. All rights reserved.

Chapter 3 Recent Initiatives
18

Expansion of Customer Market by Utilizing Data
For customers from various industry types, including manufacturers of finished automobiles
Aim to provide a data service of high added value

Finished
automobiles/parts
manufacturers

Insurancecompany- Telematics- Recall and repair- Recall prediction

Automotiveparts dealers- Optimization ofpurchased stock

Maintenance/
bodywork- Recommend

Car owners &users- Notification
service

DATA BASE

Accumulated vehicle data equivalent to approx.
one in every four vehicles owned in Japan(Passenger) vehicles owned in Japan:
Number of vehicles distributed
through Broadleaf systems:

61.40 million
16.82 million

Broadleaf Co., Ltd. All rights reserved.

Cooperation withother different
industry types

Chapter 3 Recent Initiatives
19

Start of Data Service for Recall and Repair

Beginning coordination between finished vehicle manufacturers and maintenance shops to resolve thesocial issue of recall problems（百万円) Data matching of recalled and repaired vehicles (Extract from March 12, 2018 press release)
Auto Makers
Broadleaf

List of unrecalled
vehiclesMatching of carname and model+
Frame number

Broadleaf
Database

ConsentForm

List of unrecalled
vehiclesList ofvehicles tobe recalled

Notification Report

Private Sector
Maintenance Providers

Notification

Car intake
history forms

Broadleaf Co., Ltd. All rights reserved.

20

Appendix
Corporate Profile, etc.

Broadleaf Co., Ltd. All rights reserved

Appendix 1

Corporate Profile

Corporate Name

21Broadleaf Co., Ltd.

Representative Director, President and CEO
Kenji Oyama
Listed on

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

Founded/Established

December 2005/September 2009

Capital StockJPY 7,147 million

Business Outline

IT network system to support automotive aftermarket operators and provisionof services on the platform(Business applications, platforms for cooperation with different industries,
recycled parts marketplace, development of car-related contents, etc.)

Head Office Address

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

Sales Offices

31 offices in Japan (as of July, 31, 2018)

Development Centers

3 centers in Japan (Sapporo, Tokyo and Fukuoka)

Broadleaf Co., Ltd. All rights reserved.

Appendix 222Sales Fields
Although the Company is in a single segment of IT services businesses,
we have adopted the following classifications by business area
Classification
Major
category

Mediumcategory

Smallcategory- Development and sale of industry-specific business applications- Development and sale of operation analysis/optimization software- Purchase and sale of PC bodies, printers, etc.

Business Application Software

Maintenance- Business application maintenance service to the Company’s Business Application
Software customers and provision of hardware maintenance services

Provision of consumables- Purchase and sale of exclusive forms and OA supply goods to be used for thebusiness applications

Stock- Provision of database of car-related vehicle information and parts-related
information that is updated daily- Consideration for server maintenance required for the use of network-type systems

SystemSupport

NetworkServices

Detailed businesses

PSF- Operation of recycled parts distribution network “Parts Station NET” that sharesinventory information on recycled parts
Collecting fees as transaction amount settlement agency for parts dealing

OrderPlacement andAcceptance- Provision of computerized ordering system “BL Parts Order System” for automotiveparts- Provision of tablet-type operation terminals “CarpodTab” to maintenance business
operators, etc.

Transactions

Others- Products and services other then the above

Broadleaf Co., Ltd. All rights reserved.

Appendix 3

Business Application Software User Renewals

23

 Image of User Renewals

Term of Lease Agreement
6 years (standard)Company sales
fluctuate based onremaining lease status

Remaining LeaseUsersAgreement

Begin negotiations overrenewal (after about
4.5 years have passed)

Agreement
RenewalStart ofrenewed lease

Broadleaf Co., Ltd. All rights reserved.

Disclaimer
Results forecasts and future predictions provided in this document are theCompany’s judgment based on the information available as of the time of
preparation of the document and contain potential risks and uncertainties.
Accordingly, please understand that the actual results may differ from the results
forecasts provided here.

[Contact Information]
Broadleaf Co., Ltd.
Corporate Communications (IR/PR) Department
E-Mail: broadleaf-ir@broadleaf.co.jp

Broadleaf Co., Ltd. All rights reserved.