3836 TSE Prime

Avant Group Corporation
Financial Results Briefing
for the second quarter of Fiscal Year June 2024
January 31,2024

This is an unofficial translation. In the event of any discrepancy between the original Japanese
text and this English translation, the Japanese text shall prevail.
©AVANT GROUP CORPORATION. All Rights Reserved.

Executive Summary◼ Summary of financial results for the second quarter of FY June 2024•

Net sales increased 11.6% y-o-y to 11,742 million yen due to strong growth in the digital transformation promotion business andcontinued high growth in the outsourcing business.

•

Operating income increased 5.4% y-o-y to 1,890 million yen due to a decrease in one-time expenses incurred in the previous
fiscal year as a result of group reorganization and the effect of increased revenue from the digital transformation promotion
business, despite higher fixed personnel expenses due to an increase in headcount, outsourced processing expenses to meetincreased orders, and investment-related expenses to realize future growth. As a result, orders received increased 5.4% y-o-y to
1,890 million yen.

•

The previous method of classifying business segments was reviewed, the reportable segments were changed from "Group
Governance Business", "Digital Transformation Promotion Business" and "Outsourcing Business" to, the new reportablesegments are "Consolidated Financial Disclosure Business", "Digital Transformation Promotion Business" and "Management
Solutions Business".

◼ Earnings and Dividend Forecasts•

No changes are made to the forecast for the current financial year, which is expected to achieve sales of ¥ 24,000 million andoperating profit of ¥ 3,850 million.

•

The year-end dividend per share for FY2024 is expected to be 19 yen per share, with the aim of achieving the 8% ratio ofdividends to net assets, which is the target for the period of the new medium-term management plan.

◼ 'BE GLOBAL 2028' Actions to realise•

Avant Group Enters Strategic Partnership with Fluence Technologies•

DIVA Releases Product Version of TRINITY BOARD to Promote DX for Japanese Boards of Directors©AVANT GROUP CORPORATION. All Rights Reserved.

2

【Reference】 Segment Reorganization
BeforeOld Segments

After

Corporation

Main Business

Main BusinessCorporation

ID

Disclosure Net

Disclosure Net

ID

Consolidated
Accounts Software

Consolidated
Accounts SoftwareGroup Governance

DIVA
Former DIVA

DigitalTransformation
Promotion

Outsourcing

Consolidated Accounts
Consulting & Operations

Outsourcing

Management Solutions
Business(Software & consulting)Consolidated Accounts
Consulting & Operations

CPM*

Management Solutions
Business(Software & consulting)

BI＆Data Platforms

CPM

Outsourcing

BI＆Data Platforms

New Segments

Consolidated
Financial Disclosure
Business

AVANT

Management
Solutions Business

ZEAL

Digital Transformation
Promotion BusinessZEAL

FIERTE※CPM：Corporate Performance Management©AVANT GROUP CORPORATION. All Rights Reserved.

3

【Reference】 New business segments「Consolidated Financial Disclosure Business」
In addition to the development and maintenance of our own packaged software "DivaSystem" for consolidated
management support and consolidated accounting, we also provide outsourcing of consolidated and non-consolidated
financial statements using this software, supporting value creation through corporate information disclosure. As for our
position within our group, we aim to establish a business model that combines the software business and outsourcing
business.
The consolidated financial statement disclosure service also includes an information search service for disclosure
documents provided by Internet Disclosure Co., Ltd. primarily for auditing firms.
「Digital Transformation Promotion Business」
Through consulting and system development, we provide AI and BI solutions that analyze, predict, and visualize data froma data platform that utilizes all kinds of data surrounding companies, and support companies in promoting digitaltransformation and data-driven management. From major cloud vendors to multi-cloud compatible software, you willlearn about the latest information utilization methods and generation AI specializing in data utilization, as well as trainengineers and develop your own data utilization platform products. We also aim to expand our group's products.
「Management Solutions Business」
Focusing on group management, consolidated accounting, and business management, we aim to visualize and maximize acompany's "invisible value," and provide one-stop support from consulting to system planning, construction,
implementation, operation, and maintenance. In addition to in-house development, it is also possible to develop in
combination with software developed by other companies. In this segment, we will continue to create solutions that makethe most of the group's assets and provide solutions that provide management information that will improve corporate
value.
4©AVANT GROUP CORPORATION. All Rights Reserved.

INDEX
Ⅰ. Summary of financial results for the second quarter of FY June 2024
Ⅱ. Earnings and Dividend Forecast
Ⅲ. 'BE GLOBAL 2028' Actions to realise＊ Figures in this presentation are rounded down to the unit of display.

The information contained in this material regarding the business outlook and other forecasts and strategies etc. are forward-looking statements and are determined within
the range that could normally be predicted based on the information reasonably available to the Company at the time of preparation of this material. Investors should beaware of the risks, however, that actual results may differ from the business prospects described in the material due to the occurrence of extraordinary circumstances thatcannot usually be predicted or the occurrence of results that cannot usually be predicted. The Company will proactively disclose information that is considered material toinvestors, but investors should be advised not to make judgment based entirely on only the business prospects described in this material. This material should not be
copied or transferred for any purpose without permission of the Company.

©AVANT GROUP CORPORATION. All Rights Reserved.

5

I. Summary of financial results for the second quarter of FY June 2024

©AVANT GROUP CORPORATION. All Rights Reserved.

6

Results Highlights◼ Net sales increased 11.6% y-o-y to 11,742 million yen due to strong growth in the digital transformation promotion business andcontinued high growth in the outsourcing business.
◼ Operating income increased 5.4% y-o-y to 1,890 million yen due to a decrease in one-time expenses incurred in the previous fiscal
year as a result of group reorganization and the effect of increased revenue from the digital transformation promotion business,despite higher fixed personnel expenses due to an increase in headcount, outsourced processing expenses to meet increasedorders, and investment-related expenses to realize future growth.
YoY Variance

FY6/24(Millions of yen)

Q2

Yr earlier

FY6/24 Q2
cumulative total% chg

YoY Variance
Yr earlier% chg

Net Sales

6,096

5,497

10.9%

11,743

10,523

11.6%

Cost of Sales

3,296

2,904

13.5%

6,570

5,681

15.7%

Gross Profit

2,799

2,592

8.0%

5,173

4,842

6.8%

GPM

45.9%

47.2%

▲1.2pt

44.1%

46.0%

-2.0pt

SG&A

1,590

1,414

12.4%

3,283

3,049

7.7%

Operating Income

1,209

1,178

2.6%

1,890

1,793

5.4%

OPM

19.8%

21.4%

▲1.6pt

16.1%

17.0%

-0.9pt

733

771

-4.8%

1,217

1,142

6.5%

NPM

12.0%

14.0%

▲2.0pt

10.4%

10.9%

-0.5ptEBITDA

1,328

1,279

3.8%

2,127

1,989

6.9%

EBITDA margin

21.8%

23.3%

▲1.5pt

18.1%

18.9%

-0.8ptNet Income©AVANT GROUP CORPORATION. All Rights Reserved.

7

Progress to Full-Year Sales Targets◼ FY24 Q2 sales are 48.9% of full-year sales, which is high progress among the trends of the past three years.

¥15.6bNet Sales＋3.5%¥16.2b

＋15.2%¥18.7b

＋14.6%¥21.4b＋12.0%¥24.0b※Plan

100.0%

80.0%

60.0%

¥11.7b
¥7.7b

40.0%

¥7.6b

25.6%

24.9%

¥10.5b

¥8.7b
25.1%

25.7%

Q2 cum.

25.4%
Q1

20.0%

23.7%

22.2%

21.6%

23.5%

23.5%

FY20

FY21

FY22

FY23

FY24

0.0%

Q1

Q2

©AVANT GROUP CORPORATION. All Rights Reserved.

Q3

Q4

8

FY6/24 Q2 Operating Income Bridge (YoY)）
Personnel and recruiting expenses
FY6/23 Q2Operating Income

Active recruiting activities are underway to achieve sustainable growth, and personnel andrecruiting expenses increased at a level exceeding the rate of revenue growth, albeit within
the framework of the revenue growth effect..

1,793

Outsourcing expenses
Higher GP fromsales growth+1,220

Personnel andrecruiting expenses▲658

Outsourcing
expenses

▲108
▲139

IT expenses
Other
expenses
FY24 Q2 Cumulative
Operating Income before
Allowance for Investment
Expenses

+12
2,119

▲229
1,890
（ Millions of yen ）©AVANT GROUP CORPORATION. All Rights Reserved.

IT expenses
IT expenses increased due to an increase in headcount and cloud computing (for customers
and internal environment).

Other Expenses (Office expenses + Other expenses in P.14 Group Cost Structure)
Office expenses decreased due to the office review. Despite a decrease in restructuring
expenses, other expenses increased slightly due to expenses for the introduction of the RS
Trust and an increase in fees paid related to the Materiality Realization Office.

Investment cost: 230 million yen

Investment
cost
FY24 Q2 Results
Cumulative Operating
IncomeAlthough subcontracting expenses in the consolidated financial disclosure, which were
temporarily incurred as restructuring costs, decreased, subcontracting expenses increasedin DX in order to meet strong demand.

M3 (Business Management Solution) 150M
M1 (Consolidated financial disclosure) 38M
M2 (DX propulsion) 28M
Company-wide 13M
Software development and procurement, andmost occur in M3, which is undergoing a businessmodel transformation.
Development costs for the TRNITY BOARD wereincurred by the MI Office, which is responsible for
the R&D function of the entire group, andtherefore the entire company also incurred suchcosts.

Operating Income / YoY Growth

Before inclusion of investment
expenses＋¥330m / 18.2％UP
After inclusion of
investment expenses＋¥97m / 5.4％UP
9Results by Business Segment◼ Sales remained flat for Business Management Solutions, but the DX Promotion Business drove overall sales.
◼ Operating income increased in the DX Promotion Business and the Consolidated Financial Results Disclosure Business but decreasedin the Business Management Solutions Business.
◼ While order backlogs increased YoY in all segments, the value of orders received decreased in the consolidated financial disclosurebusiness due to the impact of intra-group transactions.
(単位：百万円)
YoY Variance

FY6/24(Millions of yen)

Promotion Business

3,606

3,414

5.6%

493

426

15.7%

857

784

9.3%

OPM

26.5%

23.9%

2.6pt

23.8%

23.0%

0.8pt

Orders

1,739

1,906

▲8.8%

3,561

3,604

▲1.2%

Order Backlog

3,904

3,606

8.3%

3,904

3,606

8.3%

Net Sales

2,193

1,774

23.6%

4,365

3,387

28.8%

410

360

14.0%

758

557

36.2%

OPM

18.7%

20.3%

▲1.6pt

17.4%

16.4%

0.9pt

Orders

2,078

1,812

14.7%

4,105

3,488

17.7%

Order Backlog

1,445

1,159

24.7%

1,445

1,159

24.7%

Net Sales

2,155

2,160

▲0.2%

4,018

4,011

0.2%

427

475

▲10.0%

576

785▲26.6%

OPM

19.8%

22.0%

▲2.2pt

14.3%

19.6%

▲5.2ptOrders

1,995

1,933

3.2%

3,618

3,425

5.6%

Order Backlog

2,713

2,411

12.5%

2,713

2,411

12.5%

Operating Income
Management Solutions
Business©AVANT GROUP CORPORATION. All Rights Reserved.

% chg

Yr earlier

4.3%

Operating Income
Digital Transformation

Q2 Total

% chg

1,782

Operating Income
Disclosure BusinessYr earlier
1,858

Net Sales

Consolidated Financial

Q2

YoY Variance

FY6/2410

Results by Business Segment (Factors)◼ The DX Promotion Business drove the increase in profit due to the effect of higher sales. In the Consolidated Financial Disclosure
Business, revenue increased due to strong performance in the outsourcing business, but profit growth was limited because thesoftware business is still in the process of improving. In the Business Management Solutions business, the impact of certain
restrictions on sales activities due to business restructuring is subsiding, but the effect of revenue growth was limited due to a lack ofpipeline and investments to shift to the software business, resulting in lower earnings.
（Millions of yen）

Net Sales Variance

14,00012,00010,000

4,018
4,011

8,000

6,000

4,365
3,387

4,000

2,000

3,414

3,606

0
FY06/23 Q2
FY06/24 Q2
Management Solutions Business（Millions of yen）
+6M YoY
Sales were flat due to a lack of pie plan,although the impact of certain restrictions
on sales activities caused by thereorganization are subsiding.
The CPM Solutions business offset the
decline in service sales of theConsolidated Settlement of Accounts
business, which saw a decrease in large
projects.
+977M YoY
Sales increased significantly due tostrong demand, an increase in largescale projects, and the continued
expansion of ongoing projects.
+191M YoY
The outsourcing business continued tomaintain a high growth rate.
Although the software business
improved and grew at a higher rate,
sales declined due to the impact ofstrategically downsized intra-groupcontracted development.

Operating Income
Variance

2,500

2,000

576
785

1,500
758
1,000

557

500
784

857

FY06/23 Q2

FY06/24 Q2

0Management Solutions Business

Digital Transformation Promotion Business

Digital Transformation Promotion Business

Consolidated Financial Disclosure Business

Consolidated Financial Disclosure Business©AVANT GROUP CORPORATION. All Rights Reserved.

▲208M YoY
The increase in sales was also limited due
to a slight increase in sales.
Profit decreased due to the reinforcementof the system to shift to the software
business and an increase in amortization
expenses from software procurement.
+201M YoY
Despite higher personnel andsubcontracting costs associated withbusiness expansion, the increase in sales
led to a significant increase in profit.

＋72M YoY
The increase in revenue from the outsourcing
business drove the increase in profit.
The effects of the pricing strategy in thesoftware business are also becoming
apparent, but profit growth was limited due tothe strategic downsizing of the group's
contracted development.

11

Results by Business Segment (Consolidated financial disclosure business )◼ Excluding the impact of Internet Disclosure, which is included in the consolidated financial disclosure
segment, and the strategic reduction of intra-group contract development, the company has achieved
solid growth and improved profits.

2Q
Non-consolidated

2Q
Total

＋13.8％＋12.9％

Operating profit ratio

Stock sales ratio

Sales Growth Rate

2Q
Non-consolidated

2Q
Total

＋89.9％＋90.8％

2Q

21.3％

Non-consolidated

2Q
Total

25.8％

＋4.6pts

21.2％

22.6％

＋1.4pts*All exclude the impact of ID and intra-group contract sales.

©AVANT GROUP CORPORATION. All Rights Reserved.

12

Results by Business Segment (Business management solutions )◼ Although the impact of certain periodic restrictions on sales activities due to the business restructuring was mitigated,the flow order backlog, excluding stock, declined due to insufficient pipeline accumulation.This is due to the fact that
we are in the process of a qualitative shift in sales activities, and we will strengthen the pipeline accumulation byadding an approach to the CIO as well as to the CFO.
( billions of yen )Orders received and backlog
3.00
2.50

1.20

1.06
0.98

0.95

1.00

0.89

2.00

0.80

0.69

1.50

0.60

1.00

0.40
1.55

1.38

0.50

1.47

1.51

1.60
0.20

0.00

0.00
FY06/23 Q2

FY06/23 Q3

Orders received(Flow)©AVANT GROUP CORPORATION. All Rights Reserved.

FY06/23 Q4

Orders received(Stock)

FY06/24 Q1

FY06/24 Q2

Orders backlog(Flow)
13

Group Cost Structure◼ Recruitment costs have increased due to active recruitment activities, but outsourcing costs have also increased due to the gap
between demand and the number of employees alone.
◼ IT expenses increased due to an increase in headcount and cloud computing (for customers and internal environment).
◼ Despite a decrease in restructuring costs, other expenses increased slightly in the Q2 accumulation due to expenses for the
introduction of the RS Trust and an increase in fees paid related to the Materiality Realization Office.
YoY Variance

FY6/24( Millions of yen )Q2

Yr earlier

FY6/24
Q2 Total% chg

YoY Variance
Yr earlier% chg

Net Sales

6,096

5,497

10.9%

11,742

10,523

11.6%

Personnel expenses

2,846

2,505

13.6%

5,730

5,023

12.0%

Recruitment expenses

102

119

▲14.4%

233

210

11.1%

Outsourcing expenses

981

929

5.7%

2,007

1,791

12.0%

IT expenses

309

211

46.4%

623

433

44.1%

Office expenses

216

234

▲7.5%

428

456

▲6.1%

Other expenses

430

319

34.6%

831

816

1.8%

Total expenses

4,886

4,318

13.2%

9,852

8,729

14.1%

Operating Income

1,209

1,178

2.6%

1,890

1,793

5.4%

OPM

19.8%

21.4%

▲1.6pt

16.1%

17.0%

▲0.9pt©AVANT GROUP CORPORATION. All Rights Reserved.

14

Quarterly GPP (Net Sales Growth + OPM) Trends◼ GPP has been on a downward trend since the Q3 of the previous fiscal year, but is on an upward trend in
the current fiscal year due to a recovery in sales growth in the Q1 and an improvement in the operating
profit margin in the Q2.
50.0%
45.0%

40.5%
38.3%

38.2%

40.0%

36.4%

35.0%

32.4%

30.6%
30.0%

26.3%

25.0%

26.3%

25.8%

21.4%

25.3%

30.7%

26.3%
24.4%

23.8%

20.7%

20.0%

13.5%

10.2%

15.0%
10.0%

5.0%
0.0%
Q1

Q2

Q3

FY6/20

Q4

Q1

Q2

Q3

Q4

Q1

Q2

FY6/21

Q3

FY6/22Net Sales Growth Rate

Q4

Q1

Q2

Q3

FY6/23Q4

Q1

Q2

FY6/24

OPM

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.

©AVANT GROUP CORPORATION. All Rights Reserved.

15

Quarterly Net Sales by Segment◼ Although there are some transitory effects from business restructuring in Q4 of the previous fiscal year
and Q1 of the current fiscal year in Business Management Solutions, profitability usually tends toincrease in Q2 and Q3.
( Billions of yen )( Billions of yen )Net Sales

7.0

1.40

6.0

1.20
0.43

5.0

2.1

2.2
4.0

1.9

1.8

2.2

1.9

0.48

1.00

0.40

0.80

0.15
0.31

3.0
1.6

2.0

1.8

1.9

2.2

2.2

1.6

1.8

1.8

1.7

1.9

1.7

0.20

0.41
0.36

0.60
0.40

2.0
1.0

Operating Income

0.42

0.14

0.35

0.15

0.20

0.36

0.43

0.41

0.39

0.36

Q1

Q2

Q3

Q4

Q1

0.49

0.00

0.0
Q1

Q2

Q3

Q4

Q1

FY6/23

Q2
FY6/24

FY6/23

Q2
FY6/24

Management Solutions Business

Management Solutions Business

Digital Transformation Promotion Busines

Digital Transformation Promotion Busines

Consolidated Financial Disclosure Business

Consolidated Financial Disclosure Business©AVANT GROUP CORPORATION. All Rights Reserved.

16

Quarterly Margin Trends◼ In the Q4 of the previous fiscal year, the gross profit margin declined, partly due to a certain period of restrictions on sales activities
related to business management solutions as a result of business restructuring, but in the current fiscal year, sales grew and the grossprofit margin is on a recovery trend, and the operating profit margin also recovered.
(％)

60.0

47.8

50.0

45.1

47.6

47.3

48.3

50.5
45.4

44.9

44.5

42.1

49.5

47.9

44.8

47.2

45.9

44.0

42.0
39.4

40.0

30.8
30.0

33.0

32.2

33.4

31.2

28.3

27.4
20.3

20.0

13.8

14.3

14.8

15.1

33.5

27.9
20.4

32.7
27.8

27.8

21.7

22.7

14.5

13.3

32.4
25.7
21.4

12.7

11.4

32.5

30.0

30.0

24.1
19.9

19.8

12.2

12.1
7.0

10.0

0.0
Q1

Q2

Q3

FY6/20

Q4

Q1

Q2

Q3

Q4

FY6/21Q1

Q2

Q3

FY6/22GPM

SG&A ratio

Q4

Q1

Q2

Q3

FY6/23Q4

Q1

Q2

FY6/24

OPM

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.

©AVANT GROUP CORPORATION. All Rights Reserved.

17

Quarterly Recurring Sales and Recurring Sales Ratio◼ The ratio of stock sales is increasing, and the absolute amount of stock sales is steadily increasing(Millions of yen)
2,500

38.5%
38.6%

2,000

32.7% 33.4% 32.3%

35.5% 34.9% 35.7%

34.5%

38.0%

36.9%

36.0% 35.5%
33.1% 32.9%

45.0%

40.0%

36.5%

33.8% 34.2%

35.0%
30.0%

1,500
25.0%

2,349
1,000

1,488 1,542 1,492 1,554
1,342 1,307 1,346 1,388 1,432
1,214

1,658

1,769

1,783

1,739

1,816

1,878 2,062

20.0%
15.0%
10.0%

500

5.0%
0

0.0%
Q1

Q2

Q3

FY6/20

Q4

Q1

Q2

Q3

Q4

Q1

FY6/21Q2

Q3Q4

FY6/22
Recurring Sales

Q1

Q2

Q3

FY6/23Q4

Q1

Q2

FY6/24

Recurring Sales Ratio

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©AVANT GROUP CORPORATION. All Rights Reserved.

18

ROE Trends◼ ROE* has recently been on a downward trend due to the impact of the build-up of net assets but improved in the Q1of the current year due to dividend payments and share buy-backs. In Q2, it declined again due to the buildup of net
assets.
◼ We aim to maintain an average of at least 20% through adherence to the Group's management principles, by further
enhancing profitability and managing assets more efficiently.
(millions of yen)

Net Asset

ROE ※

(%)

14,00030%

12,00025%

18.2%

10,000

20%

8,000
15%
6,000
10%

4,000

5%

2,000
-

0%
Q1

Q2

Q3

FY06/20

Q4

Q1

Q2

Q3

FY06/21

Q4

Q1

Q2

Q3

FY06/22

Q4

Q1

Q2

Q3

FY06/23

Q4

Q1

Q2

FY06/24※Figures are calculated based on the past four quarters.
Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others have been applied.
©AVANT GROUP CORPORATION. All Rights Reserved.

19

Number of Group Employees◼ Headcount is increasing to achieve sustainable growth, but has remained flat in recent years.
(person)
1600

1,415
1,389 1,414
1400

1,263 1,270
1,226 1,240
1,139
1,107 1,123 1,128

1200

1,055 1,030 1,030 1,047
1000

950

965

963

Q1

Q2

Q3

800

600

400

200
FY06/20©AVANT GROUP CORPORATION. All Rights Reserved.

Q4

Q1

Q2

Q3

FY06/21

Q4

Q1

Q2

Q3

FY06/22

Q4

Q1

Q2

Q3

FY06/23

Q4

Q1

Q2

FY06/23

20

Financial Condition Trends◼ While notes, accounts receivable and contract assets increased by 762 million yen and prepaid expenses increased by 252 million yen,cash and deposits decreased by 917 million yen, resulting in a decrease in total assets.
◼ Net assets increased 258 million yen from the end of the previous period to 12,587 million yen due to the posting of 1,216 million yen
in net income attributable to parent company shareholders, the purchase of 449 million yen in treasury stock, and the payment of 564
million yen in dividends from retained earnings.
◼ The capital adequacy ratio has remained at a high level.
Net Assets and Equity Ratio

Total Assets(Millions of yen)
19,000(Millions of yen)(％)

14,00018,705
18,55718,50063.8

65.9
12,32867.8
12,587

12,00070.0
60.0

10,59718,00010,000

50.0

8,000

40.0

6,000

30.0

16,500

4,000

20.0

16,000

2,000

10.0

17,50017,00016,617

15,5000
FY6/22©AVANT GROUP CORPORATION. All Rights Reserved.

FY6/23

FY6/24 Q2

0.0
FY6/22

FY6/23

FY6/24 Q2

Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition"(ASBJ Statement No. 29, March 31, 2020) and others have been applied.

21

Cashflow Trends◼ Operating cash flow increased mainly due to income before income taxes and minority interests of 1,893 million yen
and refund of income taxes of 539 million yen, while it decreased mainly due to increase/decrease of accounts
receivable and contract assets of 762 million yen, increase/decrease of contract liabilities of 359 million yen,increase/decrease of allowance for bonuses of 253 million yen, and income taxes The main factors of the decrease
were 762 million yen in trade receivables and contract assets, 359 million yen in contract liabilities, 253 million yen inprovision for bonuses, and 671 million yen in income taxes paid.
◼ The main components of financial cash flow outflows were the purchase of treasury stock of 449 million yen following
the introduction of the RS Trust as an incentive program for future stock price hikes, and dividend payments of 564
million yen, resulting in an increase of 499 million yen used versus the same period last year.
YoY Variance

FY6/24(Millions of yen)

Q2

Yr earlier

YoY Variance

FY6/24 Q2
cumulative total% chg

Yr earlier% chg

Operating CF

478

△ 225

703

349

△ 717

1,067

Investment CF

△ 145

△ 510

364

△ 239

△ 622

382

Free CF

332

△ 736

1,068

110

△ 1,339

1,449

Financial CF

△5

△5

0

△ 1,025

△ 499

△ 525

©AVANT GROUP CORPORATION. All Rights Reserved.

22

Ⅱ. Earnings and Dividend Forecast©AVANT GROUP CORPORATION. All Rights Reserved.

23

Earnings forecast for the fiscal year ending June 30, 2024
◼ For the fiscal year ending June 2024, sales are expected to increase by 12% year-on-year to 24,000
million yen. Operating income and net income are expected to increase at a rate greater than the rate ofincrease in sales due to the effect of increased sales and the reduction of the burden of restructuringcosts incurred in the fiscal year ending June 2023.

(Millions of yen)

FY6/23

FY6/24（Actual）（Forecast）

Variance

Chg

Net Sales

21,42424,000

2,576

12.0%

Operating Income

3,289

3,850

561

17.1%

OPM

15.4%

16.0%

-

-

Net Income

2,094

2,500

406

19.4%

©AVANT GROUP CORPORATION. All Rights Reserved.

24

Shareholder Returns◼ In line with the policy of continuing to pay a stable dividend, the dividend per share for the year ending
30 June 2024 is expected to be 19 yen per share.
◼ DOE for the fiscal year ended June 30, 2023 was 4.9%, well above the TSE-listed company average (12months) of 3.1%.
(yen/share)

19.0

20.0
18.0

4.9%
15.0

16.0

5.00%

4.00%

11.0

12.0

8.0

5.3%

＜Our shareholder return policy＞▪

Dividends are an important part of our shareholder
return policy▪

Avant aims to maintain if not grow the dividend by
focusing on indicators such as dividend on equity(DoE) which is less impacted by fluctuations in annual
earnings.

▪

The Company’s DOE will always exceed the averageof all companies listed on the Tokyo Stock Exchange,
and will aim to achieve 8% within the period of the
new medium-term management plan.

13.0

14.0

10.0

6.00%

9.0

3.00%

7.5

2.00%

6.0
4.0

1.00%

2.0
0.0

0.00%
2019

2020

2021

2022

2023

2024
(Forecast)

Dividends per share…

©AVANT GROUP CORPORATION. All Rights Reserved.

DOE

25

Ⅲ. 'BE GLOBAL 2028' Actions to realise©AVANT GROUP CORPORATION. All Rights Reserved.

26

BG28 Outlook◼ Increase corporate value by improving fundamentals through net income growth (3x) and byincreasing future cashflow through a shift to a software focus

Most importantcritical successfactor (CSF) for
promotion ofgroup strategy©AVANT GROUP CORPORATION. All Rights Reserved.

27

BG28 Focus Markets◼ Position self in management DX market for companies where enhancing corporate value isseriousissue Market) andNew segment
TAM a(TotalAddressable
Consolidated Financial
namepositioning of each market

Know-how
ServiceHigh

Investor Perspective Next
Generation Management
Information Platform Market

M1
Deepen existing
marketFY6/23

Latent SAM¥6.7bn¥272bnBI, Data Infrastructure& DX Market

M3¥690bn-¥720bn

Service Available Market

（

M2

M2
Capture growth market

Consolidated
Financial Disclosure
Market¥112.3bn

M1

Capture growthmarketClient base
SoftwareDeepen existing
marketLow
Realization risk

High

Management DX market©AVANT GROUP CORPORATION. All Rights Reserved.

FY6/23Creation of newmarket

CAGR
17.3％

FY6/28¥14bn
OPM
19.5％→27.2%
Digital Transformation Promotion Business

CAGR
17.8％

FY6/28¥16.3bn¥7.2bnNew segment
name

M3

）

Low

New segment
name

Creation of new market

Disclosure Business

FY23¥7.9bnOPM
15.0％→19.9%
Management Solutions Business

CAGR
13.2％

FY28

¥14.7bn
OPM
16.7％→28.7%
28Capital Allocation• Assuming ¥20bn for growth investments and ¥5bn for shareholder returns (dividends) overthe 5-year period of the medium-term management plan.

First Growth Investment Direction
Internal investment = Human capital investment

¥1.0b
¥3.5b
¥0.5b

©AVANT GROUP CORPORATION. All Rights Reserved.

•

Conduct R&D that contributes to theachievement of the business plan•

Developing functions that produce economies ofscale

Business Growth Asset Procurement
Investment•

Minority-funded•

Software Purchase

Reserve Funds• VC investment, etc.

29

Avant Group Enters Strategic Partnership with Fluence Technologies◼ This strategic partnership is an initiative that is expected to dramatically accelerate and raise the level ofdevelopment of "software that helps improve corporate value" for Japanese customers.
◼ As a result, the company will contribute to software gross profit, the most important CSF for promoting
the Group's strategy.
Purpose of Strategic Partnership

About Fluence Technologies•

This strategic partnership will combine thein-depth expertise that the Minebea Grouphas developed to date in the field of business
management with Fluence Technologies'
innovative software technology.

•

Going forward, we will jointly promote thedevelopment of next-generation business
management solutions for the Japanesemarket.

Fluence Technologies (Canada) puts control in the hands offinance and accounting teams so they can close faster, reportwith confidence, and do more with less. Only the Fluencefinancial close, consolidation, and report management platform
delivers an enterprise-grade, out-of-the-box solution formodern, high-growth companies. Truly cloud-based andfinance-owned, Fluence’s no-code approach means
accelerated time to value and immediate adoption. Welcome to
Fluence where we close early.
https://www.fluencetech.com/

28 November 2023 Press release©AVANT GROUP CORPORATION. All Rights Reserved.

https://www.avantgroup.com/ja/ir/irnews/news20231128.html
30

DIVA Releases Product Version of TRINITY BOARD to Promote DX for Japanese Boards of Directors◼ The sale of this product is the first step in the promotion of the 'Software Driven Strategy' and willcontribute to software gross profit, which is the most important CSF in the promotion of the Group's
strategy.
◼ Aiming to raise the Group's profile among board members, who are responsible for increasing corporate
value, and also to strengthen the customer base.
Development background

What’s••Cloud software to drive DX for the board•

The consolidation of all information relating to the Board of
Directors enables the Board of Directors to enhance
discussion and decision-making, significantly reduce theoperational burden on the departments in charge ofrunning the Board of Directors, and improve efficiency andsecurity.

•

As it can also be applied to the boards of directors of groupcompanies, it can also help to strengthen group governanceby making the status and content of their board meetings
more transparent when applied to major subsidiaries andoverseas subsidiaries.

••

The company and DIVA jointly initiated the developmentof this product to contribute to the DX of the Japaneseboard of directors by solving the problems faced byboards and their operation.
The product was released after it was perfected throughfeedback from board members and operating
departments while actually being used by the company's
board of directors, and after the company itself realised
its effectiveness and was convinced that the productcould contribute to other listed companies.
Alpha version was released on October 11, 2023, andafter repeated testing, it is now available as acommercial version.

31 January 2024 Press release.
©AVANT GROUP CORPORATION. All Rights Reserved.

https://www.diva.co.jp/news/20240131/
31Reference : Company overview©AVANT GROUP CORPORATION. All Rights Reserved.

32

Company Introduction
Name：AVANT GROUP CORPORATION
Inception：May 26, 1997
Representative：Tetsuji Morikawa, President and Group CEO
Market Cap： Approximately 55 billion yen （ TSE Prime, 3836 ）Main SoftwareGroup Companies

Segment Information

Percentage of sales for eachsegment FY23

【Consolidated Financial Disclosure Business】
In addition to developing the consolidated accounting system"DivaSystem LCA" and related products "DivaSystem Dx3-Advance"and "DivaSystem FBX", we are engaged in outsourcing business suchas consolidated and non-consolidated financial settlement operations
using "DivaSystem" to comprehensively support the corporate value
creation process through information disclosure.

【Management Solutions Business】

Third party

With group business management, consolidated accounting, andbusiness management as the pillars, we provide one-stop support forcustomers' "visualization and maximization of invisible corporate
value" from consulting to system planning and construction,
introduction support, operation and maintenance, and develop
software that will be the solution in-house. We also provide systemdevelopment and implementation support that combines softwaredeveloped by other companies with our own products.

Net sales¥21.4 bDigitalTransformation Promotion
Business

Consolidated
Financial
Disclosure
Business

33％

31％

Management
Solutions Business

36％【Digital Transformation Promotion Business】
We support the promotion of digital transformation and data-driven
management of companies by providing data platforms that organize
and integrate internal and external data and AI and BI solutions thatanalyze, predict, and visualize data through consulting and systemdevelopment.

©AVANT GROUP CORPORATION. All Rights Reserved.

33

Avant Group Philosophy©AVANT GROUP CORPORATION. All Rights Reserved.

34

The Avant Group Moves to the Next Five Years to Realize BE GLOBAL
Established the top share in Japan in the consolidated
accounting business

Introduction of holding company system andexpansion of group management■ Corporate■ Introduction of Internal Control
Governance Code
Reporting System (J-SOX)（Jun.
2015~）（Apr.2008~）■ Voluntary Applicationof Disclosure under IFRS（FY Mar. 2010~）■ Start of reporting inconsolidated accounting（FY Mar. 2000~）■Mandatory quarterly
reporting（FY Apr. 2003~）

Government-led
initiatives

BE GLOBAL(¥mn)■ Publication of Business Restructuring
Practice Guidelines（Jul. 2020～）

Dec. 2018■ DivaSystem clients baseexceeded 1,000 companies

Aug. 2007■ Users of DivaSystem reached 500

25,000■ Group Governance Practice
Guidelines■ Establishment of a study group on（Sep. 2019～）
fair acquisition （2022～）

Oct 2022■Reorganization

21,424Mar. 2018
Change the Market
Listing to the First
Section of the TSE（currently TSE Prime
Market)20,000Feb. 2007
Listed at OSE Hercules(currently TSE GrowthMarket)15,000

Oct.2013■Changed the trade name from DIVACORPORATION to AVANT CORPORATION■Established new DIVA CORPORATION as aresult of the Incorporation-type company split

10,000OI

May 1997
Founding of DIVA Inc.

5,000

Net Sales

12,110

3,289

1,631

0

（FY）

97

98

99

00

01

02

©AVANT GROUP CORPORATION. All Rights Reserved.

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23
35

Segment Reorganization
BeforeOld Segments

Corporation

Main Business

Main BusinessCorporation

ID

Disclosure Net

Disclosure Net

ID

Consolidated
Accounts
SoftwareConsolidated
Accounts
SoftwareConsolidated
Accounts Consulting& Operations

Outsourcing

Management Solutions
Business(Software & consulting)Consolidated
Accounts Consulting& Operations

CPM*

Management Solutions
Business(Software & consulting)

BI＆Data
Platforms

CPM

Outsourcing

BI＆Data
Platforms

Group
Governance
Former DIVA

DigitalTransformation
Promotion

Outsourcing

After

DIVA

Consolidated
Financial
Disclosure
Business

AVANT

Management
Solutions
Business

ZEAL

DigitalTransformation
Promotion BusinessZEAL

FIERTENew Segments※CPM：Corporate Performance Management©AVANT GROUP CORPORATION. All Rights Reserved.

36

Numerical Summary
Net Sales／Sales Growth Rate
25,00025.0%
21,42415,00020.0%

14,077

14.5%15.0%

15.2%
16.2%

11.5%
10.0%

5,000

5.0%
3.5%

0

0.0%

(百万円)

FY6/20FY6/21Net Sales

FY6/22

2,796

10.0%

600

5.0%

400

0.0%
FY6/20FY6/21

FY6/23

FY6/19

17.4%

30.0%

70
24.6%

25.0%

23.5%

23.6%

500

5.0%

0

0.0%
FY6/21

FY6/23

18.3%

20.0%

50.5

53.1

50
40

37.8

38.9

FY6/19FY6/20

15.0%

1,000

FY6/20FY6/22

61.8

60

21.1%

30

10.0%

FY6/19FY6/21Market Cap

15.4%15.0%

14.5%

FY6/20(Billions of yen)

30.0%

20.0%
17.2%

14.0%

FY6/22

0

25.0%

1,966
2,000

938

200
FY6/19

2,278

2,500

1,107

800

15.0%

GPP

3,289

1,226
1,055

1,000

ROE
3,247

1,389

1,400
1,200

20.7%

Sales Growth Rate

3,500

1,500

26.0%

25.0%

FY6/23Operating Income/OPM

3,000

29.9%

20.0%

10,000FY6/19

1,600

32.6%

30.2%

30.0%

16,236(person)

40.0%
35.0%

18,70320,00015,691

Number of employees

GPP（Sales Growth Rate＋OPM）(Millions of yen)

FY6/22

10.0%

20

5.0%

10

FY6/230

0.0%
Operating Income©AVANT GROUP CORPORATION. All Rights Reserved.

OPM

FY6/19FY6/20FY6/21

FY6/22

FY6/23

FY6/21

FY6/22

FY6/2337

Trends in companies that have introduced Avant Group Software Product◼ With the tightening of disclosure regulations, consolidated accounting system LCA leads the number of
introductions.

©AVANT GROUP CORPORATION. All Rights Reserved.

38

Customer base of consolidated accounting system “LCA”◼ More than 1,100 companies have sold ※１◼ FY2023 consolidated accounting software market share is 43.5% ※２◼ From institutional accounting to budget and management accounting, we support thestrengthening of corporate governance※１※２

As of the end of June 2023
Fuji Chimera Research Institute "Software Business New Market 2023 Edition" Consolidated Accounting Management Software Market Share©AVANT GROUP CORPORATION. All Rights Reserved.

39

Cautionary Statement Concerning Forward-Looking Statements
The information in this document regarding business forecasts and other future projections and strategies isbased on judgments made by the Company based on information reasonably available to it at the time thisdocument was prepared and within the scope of what is normally expected. However, actual results may differ
materially from those discussed in the forward-looking statements due to the occurrence of extraordinary
circumstances or unforeseeable results that could not be foreseen in the normal course of events. While weendeavor to actively disclose information that we believe is important to investors, we urge you not to baseyour decisions solely on the earnings forecasts contained in this document. Please do not reproduce ortransmit this material for any purpose without permission.

■Contact

Avant Group Corporation, IR Office
ir@avantgroup.com©AVANT GROUP CORPORATION. All Rights Reserved.

40