3836 TSE Prime

Avant Group Corporation
Financial Results Presentation
for the second quarter of Fiscal Year June 2023
January 31, 2023

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Executive Summary◼ Summary of financial results for the second quarter of FY June 2023•

Led by the Outsourcing Business, all segments benefited from strong demand, resulting in net
sales growth of 20.2% YoY.

•

Despite stepped up recruitment activities to meet demand, in some areas demand couldn’t be
met necessitating outsourcing.

•

There were expenses at the holding company related to the business reorganization, also
triggered by the reorganization were costs for rationalization of low-profit products andprojects in existing businesses, as well as an increase in business environment improvement
expenses to accelerate the shift to cloud computing, but overall due to the effect of increased
net sales, operating income increased 21.0% YoY.

◼ Earnings and Dividend Forecasts•

We expect to maintain the pace of revenue growth, but maintain our earnings forecast due tothe possibility that more reorganization-related costs will materialize than assumed at the
beginning of the fiscal year.

•

Dividend per share for the fiscal year ending June 2023 is forecast at 15 yen per share, in linewith the target of the Medium-Term Management Plan.

◼ Actions to Realize our Materiality•

Business reorganization implemented on October 1, 2022, to create a prototype for the
expansion and replication process of the software business.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2

INDEX

Ⅰ. Summary of financial results
for the second quarter of FY June 2023
Ⅱ. Earnings and Dividend Forecast

Ⅲ. Actions to Realize our Materiality＊ 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. areforward-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 be aware of the risks,
however, that actual results may differ from the business prospects described in the material due to the occurrence of
extraordinary circumstances that cannot usually be predicted or the occurrence of results that cannot usually be predicted.
The Company will proactively disclose information that is considered material to investors, 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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

3

I. Summary of financial results for the second
quarter of FY June 2023

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

4

Results Highlights◼ All segments benefited from strong demand, resulting in net sales growth of 20.2% YoY.
◼ Operating income increased 21.0% YoY, although operating margin improvement was limited
due to increased headcount for growth and reorganization-related costs.
(Millions of yen)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

5

Progress to Full-Year Sales Forecast◼ FY6/23 Q1 result was strong progress compared to the past 3 years, H1 is also trending onhigh side.

Q1
FY23

23.1%

Full-Year Sales
Forecast

H1¥21.8b

25.2%

16.6%
FY22

21.6%

25.1%

26.9%

¥18.7b

26.3%

15.2%
FY21

22.2%

24.9%

26.3%

¥16.2b

26.6%

3.5%
FY20

23.7%

25.6%

25.8%

¥15.6b

24.9%

11.5%
FY19

22.6%

0%

26.7%

20%

40%
Q1

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

25.8%

60%
Q2

Q3

25.0%

80%

¥14.0b100%

Q46

FY3/23 H1 Operating Income Bridge (YoY)◼ Operating income increased due to sales growth, but the rate of increase in outsourcing andIT expenses was higher than the rate of increase in net sales.
◼ Despite the impact of 380 million yen in reorganization costs realized in the Q2 cumulative
period, the rate of increase in operating income was in line with that of net sales.
Higher personnel andrecruitment costs due toincreased hiring(Millions of yen)

Increase in IT expenses due toorganizational expansion andsupport for cloud computing

Other expenses

Reorganization cost

Increase in outsourcing
costs to meet demand,
including hiring gap

Higher GP fromsales growth+0.6b yen, +46.7%
FY6/22 H1 Operating
Income+0.3b yen +21.0%©2023 AVANT GROUP CORPORATION. All Rights Reserved.

FY6/23 H1
Operating Income(pre-reorganization)

FY6/23 H1
Operating Income7Results by Business Segment◼ Group Governance and Outsourcing businesses increased sales and profits, but profit
margins deteriorated due to increased growth-related costs; Digital Transformation business
led the increase in profit thanks to the effect of increased sales.
(Millions of yen)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

8

Results by Business Segment (Factors)◼ Sales increased in all segments.

◼ Lower profit growth in Group Governance on reorganization triggered costs for productrationalization and business environment improvements, and Outsourcing due to recruitment,high profit growth in Digital Transformation on sales growth.
(Millions of yen)

Net Sales Variance(Millions of yen)

2,500

12,00010,000

8,000

1,816
1,466

YoY +350m
・Outsourcing continues

YoY +62m
・Increased costs due toto grow

recruitment for growth,
office space expansion

2,000

418

YoY +570m

3,940
6,000

Operating Income Variance

3,370

・Data Platform, BI, bothstrong・Large projects
contribute to sales growth

YoY +166m
・High profit growth on sales

356

1,500

718

growth

552
1,000

4,000

2,000

4,279

5,151

0
FY6/22
H1
FY22上期

YoY +872m
・Service sales growth・Not just Consolidated
Accounting, Group Business
Management/Business
Management areas also
drove growth

FY6/23 H1
FY23上期■Group Governance©2023 AVANT GROUP CORPORATION. All Rights Reserved.

500

1,020

885

0
FY6/22
H1
FY22上期■Digital Transformation

YoY +135m
・Sales growth・Costs for productrationalization due toreorganization andbusiness environment
improvement

FY6/23
H1
FY23上期■Outsourcing
9Group Cost Structure◼ Recruitment expenses increased due to active recruitment activities, but outsourcing
expenses also increasing in areas where headcount still did not meet demand.
◼ IT expenses increased due to increase in headcount and cloud computing (for customers
and internal environment)(Millions of yen)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

10Quarterly GPP (Net Sales Growth + OPM) Trends◼ The contribution from sales growth and OPM varies, but for FY6/23 GPP is close to the 40%
target.
50.0%
45.0%
40.0%

40.5%
37.0%

38.2%

Target 40%

36.3%

36.4%

38.3%

33.6%

35.0%

30.6%

30.0%

26.3%

25.0%

26.3%

25.8%

21.4%

20.0%

25.3%

26.3%
23.8%

20.7%

15.8%
10.2%

15.0%
10.0%
5.0%
0.0%

FY6/19Q1

Q2

Q3

FY6/20
Q4

Q1

Q2

Q3

FY6/21
Q4

Q1

Sales
Growthrate rate
Net Sales
GrowthQ2

FY6/22

Q3

Q4

Q1

Q2

Q3

FY6/23
Q4

Q1

Q2

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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

11

Quarterly Net Sales by Segment◼ The growth rate from Q1 to Q2 is lower than usual, but this is due to the fact that Q1 did not
decline from the previous quarter and remained strong.
(Millions of yen)
6,000
930

5,000

786

4,000

3,000

402

489
416

430

541

504

527

1,161

1,353 1,206 1,429

662

637

1,441 1,510 1,385
1,382

791

886

710

569

380
1,268

609

755

1,637
1,495 1,734
1,564

1,806

1,902 1,741 1,916

2,023

2,000

1,000

2,526 2,566 2,409 2,741
2,322
2,242 2,165 2,154
2,225 2,008 2,017
2,223
2,096 2,040
1,957
1,922
1,801
1,783

0
FY6/19Q1

Q2

Q3

FY6/20Q4Q1Q2Group GovernanceQ3

FY6/21

Q4

Q1

Q2

Q3

Digital Transformation

FY6/22

Q4

Q1

Q2

Q3

FY6/23Q4

Q1

Q2

Outsourcing

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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

12

Quarterly Margin Trends◼ As usual Q2 recovering from Q1, when profit margins tend to decline on a lower
compensated utilization ratio due to factors such as being prior to full-scale deployment of
new graduates.
(％)

60.0
50.0

48.6

44.3

43.3

42.5

45.1

47.8

47.3

42.1

47.6

48.3

44.5

40.0
32.3

32.3

31.7

28.3

27.0

30.0
16.9

20.0

16.3

12.0

13.8

30.8

14.3

33.0

14.8

32.2

15.1

33.4

31.2

49.5

47.9

50.5

44.9

45.4

44.8

33.5

32.7

32.5

27.4

27.9

27.8

27.8

20.3

20.4

21.7

22.7

25.7
21.4

14.5

13.3

47.2

12.7

11.4

10.2

12.2

10.0
0.0

FY6/19Q1

Q2

Q3

FY6/20Q4

Q1Q2

FY6/21

Q3

Q4

Q1

Q2

FY6/22

Q3

Q4

Q1

Q2

Q3

FY6/23
Q4

Q1

Q2

-10.0
GPM

SG&A ratio

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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

13

Quarterly Recurring Sales and Recurring Sales Ratio◼ Due in part to the growth of Service sales the Recurring Sales Ratio has declined, but theabsolute value of Recurring Sales is growing solidly.
(Millions of yen)
38.6%

2,000
1,800

33.7%

32.9%

32.7% 33.4% 32.3%

35.5% 34.9%

34.5%

35.7%

40.0%

36.9%

36.0% 35.5%
33.1% 32.9%

35.0%
33.8%

30.6%

1,600

28.8%

30.0%

1,400
25.0%

1,200
1,000
800
600

1,046 1,080 1,110

1,183 1,215

1,342 1,308 1,347 1,389

1,433

1,489 1,542 1,493 1,554

1,659

1,769

1,783 1,860

20.0%
15.0%
10.0%

400
5.0%

200
0

FY6/19Q1

Q2

Q3

FY6/20
Q4

Q1

Q2

Q3

FY6/21
Q4

Recurring Sales

Q1

Q2

Q3

FY6/22
Q4

Q1

Q2

Q3

FY6/23
Q4

Q1

0.0%

Q2

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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

14

ROE Trends◼ ROE* had been on a declining trend due in part to an increase in net assets, but has recently
levelled off.
◼ 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
Assets
純資産

ROE
株主資本利益率(ROE)

12,00030%

22.5%

10,000

25%

8,000

20%

6,000

15%

4,000

10%

2,000

5%

-

0%

1Q Q2
2Q
Q1

3Q
Q3

4Q
Q4

2019年6月期
FY6/19

1Q Q2
2Q
Q1

3Q
Q3

2020年6月期
FY6/20

4Q
Q4

1Q Q2
2Q
Q1

3Q
Q3

2021年6月期
FY6/21

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

2022年6月期
FY6/22

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

4Q
Q4

2023年6月期
FY6/23Figures 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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

15

Number of Group Employees◼ Growing headcount to achieve sustainable growth（People）
1,400
1,226 1,240
1,200

1,000
832

855

874

Q2
2Q

Q3
3Q

938

950

965

963

Q4
4Q

1Q
Q1

2Q
Q2

3Q
Q3

1,055

1,030 1,030 1,047

4Q
Q4

1Q
Q1

1,107 1,123

1,128 1,139

4Q
Q4

2Q
Q2

1,263

800

600

400

200

Q1
1Q

2019年6月期
FY6/19©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2020年6月期
FY6/20

2Q
Q2

3Q
Q3

2021年6月期
FY6/21

1Q
Q1

3Q
Q3

2022年6月期
FY6/22

4Q
Q4

1Q
Q1

2Q
Q2

3Q
Q3

4Q
Q4

2023年6月期
FY6/2316

Financial Condition Trends◼ Cash and cash equivalents decreased mainly due to performance bonuses, increase in working capital
due to higher sales, expansion of office space, and purchase of source code, leaving total assets flat.
◼ On the other hand, liabilities decreased in response to the decrease in cash and deposits, and the equity
ratio increased because net assets increased by almost the same amount as net income.

(Millions of yen)

Net Assets and Equity Ratio

Total Assets(Millions of yen)

20,00015,00016,617

15,000

(％)

70.8
63.0

15,937
10,597

13,956

10,00070

63.8
11,288

60
50

8,787

40

10,000

30
5,000
20

5,000

10
0

0
FY21末
FY6/21

FY22末
FY6/22FY23Q2末FY6/23 Q2

0
FY21末FY6/21

FY22末
FY6/22FY23Q2末FY6/23
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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

17

Cashflow Trends◼ Operating cash flow was negative in the first half mainly due to an increase in performancebonuses and an increase in working capital associated with higher sales.
◼ Investment cashflow investments also increased due to the purchase of source code from
Metapraxis and office expansion (acquisition of fixed assets and increase in rent deposits).
(Millions of yen)

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.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

18

Ⅱ. Earnings and Dividend Forecast©2023 AVANT GROUP CORPORATION. All Rights Reserved.

19

Earnings forecast for the fiscal year ending June 30, 2023
◼ H1 saw both sales and profit growth, and we expect sales growth for the full year, but as it ispossible that reorganization costs may exceed initial expectations, we maintain our forecast
for profit decline.
◼ We expect to see increasing sales in all segments, but profit margins are expected todeteriorate due to increased personnel costs associated with aggressive hiring.
◼ Regarding the reorganization, the SG&A increase is within expectations, but as costs fromthe rationalization of low margin products and projects in existing businesses, and businessenvironment improvements costs to accelerate the shift to cloud computing may exceed
expectations, we forecast a profit decline.
(Millions of yen)

FY6/22

FY6/23(Actual)(Forecast)

Variance

Chg

Net Sales

18,70321,800+3,096

16.6%

Operating Income

3,247

3,100

-147

-4.5%

OPM

17.4%

14.2%

-

-

Net Income

2,045

2,030

-15

-0.7%

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

20

Shareholder Returns◼ The dividend per share for the fiscal year ending June 30, 2023 is forecast as 15 yen, as
targeted in our Medium-Term Management Plan.
◼ DOE for the fiscal year ended June 30, 2022 was 5.0%, well above the TSE-listed company
average (12 months) of 3.1%.
(yen/share)
16.0

13.0

14.0

6%

9.0

10.0

8%
7%

11.0

12.0

8.0

15.0

5.0%

6.0

4%

6.0

3%

4.0

2%

2.0

1%

0.0

0%
2019

2020

2021

2022

2023

(Forecast)(予想)
Shaare Dividends
一株配当（株式分割考慮後）(After Split)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

▪

5%

7.5

2018

＜Our shareholder return policy＞

DOE

▪

▪

Dividends are an important part of ourshareholder return policy
Avant aims to maintain if not grow the dividendby focusing on indicators such as dividend on
equity (DoE) which is less impacted byfluctuations in annual earnings.
Avant’s DOE is above the average of allcompanies listed on the Tokyo Stock Exchange,and over the long term Avant aims to reach 8%,
which is the average of the top 10% of companies
in terms of DOE.

21

Ⅲ. Actions to Realize our Materiality©2023 AVANT GROUP CORPORATION. All Rights Reserved.

22

Management View of Current “BE GLOBAL 2023” Plan
◼ We believe that the failure to achieve the strategic KPIs was due to the fact that the management teamsof each operating company were not sufficiently involved in the difficult and important management taskof converting to a recurring-type business, nor was it connected to activities on the ground.
◼ In order to realize the Group's vision of "BE GLOBAL," we have identified our strategic materiality as"Becoming a Software Company that Contributes to Enhancing Corporate Value," and in October 2022, we
implemented a business reorganization.

Operational
KPI

Strategic
KPI

FY6/19FY6/20FY6/21

FY6/22

ActualActualActualActual

FY6/23
TargetNet Sales
(¥b)

14.07

15.69

16.23

18.70

18.0～22.0

Operating Income
(¥b)

1.96

2.27

2.79

3.24

3.1～3.8

Recurring Sales
Ratio (%)

31.4

32.6

36.0

34.6

70

Sales Growth +OPM (Points)

30.2

26.0

20.7

32.6

40 or more

ROE（%）

24.6

23.5

23.6

21.1

20 or more

Dividend（yen）

7.5

9.0

11.0

13.0

15 or moreFinancial
KPI©2023 AVANT GROUP CORPORATION. All Rights Reserved.

23

Business Reorganization to Realize our Materiality◼ Position "Software as a BPO*“ in the upper right as the ultimate business model, in whichhigh value-added productivity is achieved through standardized products and aim to expand
the scale of the software business by clarifying the position of each group company andcreating a state in which the business can be expanded and replicated.

Software Business Expansion and Replication

Positioning of Each Company in the Expansion
and Replication Process

Value-added Productivity: High

Value-added Productivity: High

Software businessscale expansion

Softwareas a BPO

New Diva

Software-based
BPO

Product creation
through consulting
SoftwareService(Specific)

SI/Consulting

Product(Standardized)

Service（Specific）

New AvantProduct(Standardized)

New Zeal
Exploring new
business themes

Value-added Productivity: Low

Value-added Productivity: Low※BPO: Business Process Outsourcing©2023 AVANT GROUP CORPORATION. All Rights Reserved.

24

Reorganization to Realize the Group’s Strategic Materiality

BeforeGroup Governance Business

Digital Transformation
Business

Outsourcing Business

Software implementation consulting business specializing in consolidated accounting andgroup management

BPO business specializing in consolidated financial
statements and disclosure

SI business specializing in BI and datautilization

•
•
•

•

Data platform ⑥
Business Intelligence ⑦
CPM ⑧

Consolidated disclosure support system ①
Group management support systems ②
Timely Disclosure Information Search Service

③

•

DIVA

Internet Disclosure Co. Ltd.

Non-consolidated and consolidated financial closing
operations BPO ④
Cash Management Solution BPO ⑤

FIERTE

Split ①

Split ⑧Change oftrade name

Change oftrade name

Receive ①

Internet Disclosure Co. Ltd.

DIVA

After

•

Disclosure support system ①
Non-consolidated and consolidated financial closing operations ④, cash management solutions
and other BPO ⑤.
Timely Disclosure Information Search Service ③

ZEAL

Implementation and operation of management content to help
increase corporate value
Group management support ②, CPM ⑧, etc.
System implementation consulting ⑨

Avant Group(TSE Prime listed company)©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Receive ⑧

AVANT

Consolidated accounting and disclosure software and BPO to support creative disclosure
•
•

ZEAL

Development and operation ofmanagement information DX
infrastructure
Data platform ⑥
Business Intelligence ⑦Group companies are wholly owned subsidiaries of
the holding company

25

Operating Companies and Market Environment under New Structure
Business

ディーバ

アバント

ジール

Market environment

In addition to developing the DivaSystem LCA
consolidated accounting system and related products suchas DivaSystem, Dx3-Advance, and DivaSystem FBX, we
are engaged in outsourcing services for consolidated andnon-consolidated accounting operations using DivaSystemand provide comprehensive support for corporate value
creation processes through information disclosure.

◼

Efficiency improvement, industry reorganization, andoverseas expansion are making group management
inevitable for Japanese companies. Due to the need forfaster settlement of accounts and improved disclosure,the consolidated accounting system market grows at
around 6%. Systems are rapidly becoming cloud-based,
and cloud systems are expected to grow at around20%. On the other hand, we expect the outsourcing
market to grow by 20–25%, supported by needs such as
DX reform, combating individual over-dependence, workstyle reform, and stronger governanceSupporting the creation of corporate value through the
installation and maintenance of the DivaSystem
consolidated accounting system and related products, thedevelopment of Group management support systems suchas AVANT SMD, AVANT Compass, and AVANT Chart, andalso based on customer needs developing andimplementing systems that may incorporate softwaredeveloped by other companies.

◼

The Corporate Governance Code requires companies tomake decisive management decisions based on
management information and to realize improvements
in corporate value. Companies need solutions (DX forManagement) to integrate and analyze various types of
information and to make management decisions, executeand report. The DX solution consulting market is
expected to grow by 30%.

Under the auspice of Digital Transformation, throughconsulting and system development, supports thedevelopment of a data-platform and BI solutions fororganizing and integrating internal and external data,
making it “visible” through analysis, reports and graphs,
and providing useful information for management
decision-making. The company has also developed its own
cloud-based analytical platform “ZEUSCloud” and elearning service “ZEAL DX Learning Room.”◼

Advanced companies, which regard management reformby DX as the key to competitiveness, are actively inintroducing systems. In the future, due to the spread ofDX, the DX system integration market is expected to
grow by 30%.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

26

Assumptions for Formulating the next Medium Term Management Plan
◼ Contribute to clients seeking to enhance their corporate value through“DX for Management".

Strategy

Growth andProfitability◼ Clarify the direction of operating companies, reorganize low-profit
products, and actively recruit to facilitate the development of future
core products and strengthen the implementation consulting business.
◼ Strengthen relationships with 1,400, mainly listed company customers,
and by grasping customer needs provide products and services
without a bias to in-house products. Accelerate the shift to the cloud
and aim to accelerate top-line growth by increasing sales per
customer and the number of customers.

◼ Sales growth 20% or more (5-year CAGR)◼ GPP 40 points or more (from FY6/28)
GPP=Net Sales Growth Rate + EBITDA Margin

Capital strategy©2023 AVANT GROUP CORPORATION. All Rights Reserved.

◼ ROE 20% or more
◼ DOE over 8%27Assumptions for Formulating the next Medium Term Management Plan
◼ Aiming for 20% sales growth and expanding margins
Net sales

GPP*：31.8 points
Sales CAGR：12.4％
Average EBITDA margin 16.4％

29.7

GPP

34.4

31.4
27.4
22.2

218
187

162

157

141

121

EBITDA

17

21

25

30

35

FY18

FY19

FY20

FY21

FY22

BE GLOBAL 2023

FY23

FY24

FY25

FY26

FY27

FY28

Next Medium Term Plan

※GPP: Growth Profit Points＝ Sales Growth Rate + EBITDA margin. In the U.S., SaaS companies often use this indicator to measure their financial
health, and while generally a score of 40 points or more is the target, we do not anticipate posting negative EBITDA margins.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

28

Reference: Company overview©2023 AVANT GROUP CORPORATION. All Rights Reserved.

29

About Avant Group• Name: Avant Group Corporation• Founded: May 26, 1997
• Representative: Tetsuji Morikawa,
President and Group CEO• Market Cap: ¥55b (TSE Prime 3836)
Holding Co.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

Four Operating Cos.

1. Focused on niche and highly

Core
Value

specialized business areas
2. Close ties with quality customers
3. Business model that brings inrecurring sales

Three Business Segments (FY6/2022)

30

The Avant Group and the Next Ten Years
Mandatory consolidated
reporting/JSOX

DIVA founded

1997

Expansion of groupmanagement

Be GLOBAL

IPO on former
HerculesMoved to TSE 1st
section (Now Prime)

2007

2018

Rebranded

Joined Group in 2012

The Company was founded as
DIVA CORPORATION in 1997.
On the back of a series ofregulatory change in disclosure,
the Company quickly
established itself as leading
developer of consolidated
accounting software in Japan.
©2023 AVANT GROUP CORPORATION. All Rights Reserved.

2022

Joined Group in 2009

Founded in 2017

In order to maintain growth
momentum in the Group, theCompany made a series ofacquisition, and shifted to aholding company in 2013 topractice excellence in groupmanagement.

The Group set long term
strategy “BE GLOBAL” acompany-wide drive to
become a world-classsoftware company. In 2022,
Avant Group marked its 25th
anniversary with a newGroup structure and new
branding.
31

Consolidated Accounting System User Trend
DivaSystem has accumulated solid customer base as disclosure requirement evolved.
1,400
Corporate
Governance Code

1,200

Over 1,100 cos

Optional
reporting of
IFRS accounts

1,000
J-SOX

800
Quarterly
reporting

600
Mandatory reporting of
consolidated accounting

400

200

0

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

32

DivaSystem Client Base◼
◼
◼

Sold to over 1,100 companies１
Leading market share of 43.2％２ in FY2021. More than half of TSE listed top 100 companies
Offers financial and managerial accounting, governance solutions

26 out of
Top 5054 out of Top100

95 out of Top 200

3,800 listed companies inJapanToyota Motor Corporation
Nippon Telegraph and Telephone
KDDI Corporation
Daikin Industries, Ltd.
Hitachi Group
Chugai Pharmaceutical Co., Ltd.
Denso Corporation
Seven & i Holdings Co., Ltd.
Astellas Pharma Inc.
Fujifilm Holdings
Bridgestone Corporation
Mitsui Fudosan Co,. Ltd.
Mitsubishi Estate Co., Ltd.
Panasonic Corporation
Kao Corporation, etc. (June-2022 Market Cap.)

1.23 million private companies

１ As of December 2020
２ Fuji-Keizai Management “2021 Software Business New Market” Consolidated Accounting Software (Package) Market Share©2023 AVANT GROUP CORPORATION. All Rights Reserved.

33

DIVA Corporation Dx for Dialog
In addition to developing the DivaSystem LCA consolidated accounting system and related products such as DivaSystem Dx3Advance and DivaSystem FBX, we are engaged in outsourcing services for consolidated and non-consolidated accounting
operations using DivaSystem and provide comprehensive support for the company’s value creation process through information
disclosure.
An accounting system that improves the efficiency of consolidated accounting andconsolidated financial reporting. In response to changes in the disclosure regime, such as
the accounting “Big Bang” and the introduction of J-SOX, the number of companies thathave introduced it has increased to approximately 1,200.

Product

By making journal entry details and balance data of Group subsidiaries visible at the
Head Office, we will promote actions by the Head Office and at the same time bringdiscipline to the behavior of subsidiaries to strengthen Group governance.

A web-based application that collects and reports data required for group management
operations such as group budget management and forecast management

Services

Consolidation process outsourcing

By contracting out the business processes necessary for consolidated accounting and disclosure(settlement of accounts of subsidiaries, data collection, consolidation processing, preparation ofreporting materials, and disclosure), customers can reduce their workload and shift to more valueadded business such as numerical analysis and factor analysis.

Global fund management advanced
support service

This system serves as a platform for fund management and financing activities across theentire Group. By using TMS, the Head Office can obtain detailed information of the entire
group in real time and online on TMS instead of using past information posted in a
spreadsheet.

Accounting consulting services

Utilizing the investment experience gained from supporting the accounting and settlement
operations of many listed companies, members with expertise and experience, including
certified public accountants, contribute to the creation of “structures, operations andsystems.”©2023 AVANT GROUP CORPORATION. All Rights Reserved.

。

34

AVANT Corporation DX for Action
Based on the pillars of group management, consolidated accounting, and business management, we develop software to provide thesesolutions in-house, and provide one stop support for customers’ “realization of visualization and maximization of invisible corporate value”
from consulting to system planning and construction, installation support, and operation and maintenance. We also support thedevelopment and introduction of systems that combine our poducts with software developed by other companies.

Group
Management

We provide management dashboards and business portfolio management software and consulting
services to organize information of societal value such as financial information and non-financial
information, to visualize corporate value and clarify the mechanisms that constitutes corporate value,
and to utilize these in management decisions

Consolidated
Accounting

Through the introduction and operation of DivaSystem LCA, we focus on consulting and SI services fordisclosure and consolidated accounting, and we support clients’ consolidated accounting operations bysupporting global operations through compliance with IFRS, and the governance of overseas bases

Business
Management

Based on our track record of developing the latest data platforms in a wide range of areas, we will
support the improvement of business earning power by developing business management processes tomaximize business performance using various EPM/CPM software, not limited to our own products.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

35

ZEAL Corporation DX for Information Utilization
Through system development and consulting, promotes corporate Digital Transformation anddata driven management by organizing and integrating internal and external data with AI and BI
solutions that analyze, forecast, and visualize data. Other services include ZEUSCloud, an inhouse developed cloud-based data-analysis platform; ZEAL DX-Learning Room, an e-learning
service that supports the development of human resources for DX; and CO-ODE, a service that
distributes and provides user-friendly processed open data.

Data Platform

Business Intelligence

An analysis platform for extracting, processing,and analyzing various management information(customer, sales, inventory, production data,etc.) as appropriate, collected and accumulated
both internally and externallyThis system enables quick management
decisions by displaying information organizedon a data platform in an easy-to-understandform.

©2023 AVANT GROUP CORPORATION. All Rights Reserved.

36

Cautionary Statement Concerning Forward-Looking Statements
The information in this document regarding business forecasts and other future projections andstrategies is based on judgments made by the Company based on information reasonably available to it
at the time this document 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 theoccurrence of extraordinary circumstances or unforeseeable results that could not be foreseen in thenormal course of events. While we endeavor to actively disclose information that we believe is important
to investors, we urge you not to base your decisions solely on the earnings forecasts contained in thisdocument. Please do not reproduce or transmit this material for any purpose without permission.

■Contact

Avant Group Corporation, IR office
ir@avantgroup.com©2023 AVANT GROUP CORPORATION. All Rights Reserved.

37