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3Q FY12/2022 Business Results Briefing Material

Broadleaf Co., Ltd (3673)
November 9, 2022
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.

Contents

1. Overview of 3Q FY12/2022 Business Results
2. Results Forecast for FY12/2022
3. Progress of the Medium-Term Management Plan (2022-2028)
4. Topics
5. Supplemental Information

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |2

1. Overview of 3Q FY12/2022 Business Results

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |3

Overview of 3Q FY12/2022 Business Results

Summary

Growth in 3Q sales of monthly subscription-type services accelerated compared to 2Q.
・The number of expired contracts for packaged system “.NS Series” increased from June.＊

Explanation

・Average monthly license fee of cloud-based software service “.c Series” increased.
・Sales activities of solution corresponding to Electronic Book Storage Act “Dencho.DX” have fully started from June.

Sales of packaged systems and their ancillary services was steady.
Explanation

・“.NS Series” are sold under multi-year lease contracts to clients who belong to industries which do not have “.c Series.”

The Company has continued to enhance the efficiency of sales activities.
Explanation

・The Company has promoted participation in digital events and penetration of online sales and contracts.

* When clients’ multi-year lease contracts for “.NS Series” expire, “.c Series” will be provided in general.
However, to some clients (A. clients with multiple contracts, B. clients who need specific functions),
monthly contracts of “.NS Series” will be provided for a limited period (A. until last contract expires, B. until necessary functions are equipped).
What clients with expired contracts chose

3Q

Ref.) 1H“.NS Series” (monthly contract)

30％

65％

“.c Series”

70％

35％
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |4・In Q3, as a result of progress in the medium-term management plan, growth of sales ofmonthly subscription-type services accelerated compared to 2Q.
・There are three reasons for the accelerated growth in sales:■The number of expired multi-year lease contracts of packaged system “.NS series”
increased from June.
■Average monthly license fees for cloud-based software service “.c Series,” which theCompany started full-scale provision in 2022, increased.
■Sales activities of solution corresponding to Electronic Book Storage Act “Dencho.DX”
have fully started from June.
・Clients whose contracts of “.NS Series” have expired basically switch to “.c Series.”
・However, in cases where the clients have several contracts with varying expiration dates (dueto addition of licenses in the middle of the period, for example), or in cases where the clientswish to use a particular function, they may use ".NS series" under monthly contracts for alimited period.
・Regarding clients who belong to industries which do not have “.c Series,” “.NS Series” aresold under multi-year lease contracts as in the past.
・These sales were steady, and the same applies to ancillary services.
・At the same time, since the Company anticipates cloud-based software services becoming amainstay product in the future, it also promoted online sales activities and online promotional
activities.

Overview of 3Q FY12/2022 Business Results

Overview of Consolidated Financial Results
From 2022, the Company has limited sales of packaged systems under multi-year lease contracts
to industries with no “.c series,” so revenue and profit has decreased.
(Millions of yen)

Revenue

FY2022
Cumulative 3Q

FY2021
Cumulative 3Q

YoY change

10,067

15,181-5,114Cloud service

1,767

1,302

+465

Packaged system-5,5798,300

13,879

Cost of sales

3,902

4,309

-407

Gross profit

6,165

10,871-4,707

SG&A expenses, etc.

8,028

8,529

-501

Operating profit *-1,863

2,342-4,205

Profit before tax *-1,9142,340-4,254-1,4331,500-2,933-16.23 yen

17.07 yen-

Profit attributable to owners of the parent *Basic earnings per share**minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |5・Revenue was 10,067 million yen, a year-on-year decrease od 5,114 million yen.
・Operating loss was 1,863 million yen, a year-on-year decrease of 4,205 million yen.
・Loss attributable to owners of parent was 1,433 million yen, a year-on-year decrease of 2,933
million yen.

Overview of 3Q FY12/2022 Business Results

Quarterly Trends in Sales of Cloud Service
Growth in sales of software service accelerated in 3Q.
(Millions of yen)

Software service• The number of expired contracts for “.NS Series”
increased from June.

721• Average monthly license fee of “.c Series” increased.
• Sales activities of “Dencho.DX” have fully started from June.

173
489
417

430

170

175

517

529

170

163

347

366

1Q

2Q

454
179

177

548
247

255

276

312

1Q

2Q

3Q

4Q

FY2022
Cumulative
3Q

Cloud service

FY2021

FY2022

3Q

Marketplace
Software service

FY2021
Cumulative
3Q

YoY
change

1,767

1,302

506

524

-18

1,261

778

+483

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

+465

6

・Within Cloud service, growth in the sales of Software service accelerated due to thefollowings.
The number of expired contracts of “.NS Series” increased from June, resulting in an
increase in the number of clients using the monthly subscription-type services.
Average monthly license fee of “.c Series” increased.
Sales activities of “Dencho.DX” started in June.

Overview of 3Q FY12/2022 Business Results

Quarterly Trends in Sales of Packaged System
Sales have decreased since sales of packaged systems under multi-year lease contracts havebeen limited to industries with no “.c Series.”(Millions of yen)

Operation and support
Usage rates of ancillary services for “.NS Series” increased.

4,789

4,778

4,982

Software sales

1,820

Sales of “.NS Series” under multi-year lease contracts have been
limited to industries with no “.c Series.”*

4,312
1,817

1,809
1,795

2,968

1Q

2,518

2Q
FY2021

2,972

3Q

3,162

4Q

2,737

2,737

2,826

1,850

1,870

1,994
FY2022
Cumulative
3Q

887

867

831

1Q

2Q

3Q

FY2022

Packaged system

FY2021
Cumulative
3Q

YoY
change8,300

13,879 -5,579

Operation and support

5,714

5,420

Software sales

2,586

8,458 -5,873+294* Industries with no "c Series" (Car dealers, auto electrical equipment shops , radiator shops, auto glass shops, mobile phone shops, machine tool dealers, travel agencies, bus operators)
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |7・Factors behind the decrease in revenue of Packaged system were that sales of “.NS Series”
under multi-year lease contracts were limited to industries where “.c Series” are not sold.
・On the other hand, sales of “Operation and support,” which consist of ancillary services forusers of “.NS Series,” increased due to rising usage rate of ancillary services.

Overview of 3Q FY12/2022 Business Results

Factors Behind Changes in Operating Profit
Operating loss was recorded due to negative impact of decrease in revenue, partly
offset by reduction in SG&A expenses, etc.
(Millions of yen)

Decrease in costof sales
+407

1,243

FY2021
Cumulative
3Q

Decrease inpersonnel expenses+246

Increase inserviceinfrastructure
expense-40

Cost of sales
Others+355

・Cloud amortization expense increased in linewith the release of cloud services.

Increase inbusiness operationconsignment fee-60

・Purchase cost of devices decreased.
SG&A expenses, etc.

FY2022
Cumulative
3Q

Increase in amortization
expenses of cloud services-287

・Service infrastructure expense
IT infrastructure expense for providing cloudservices increased.
・Personnel expenses
Legal welfare expense which temporarily
occurred in FY2021 decreased.
・Business operation consignment fee
Business operations were partly outsourced for
optimization.

Decreasein sales-5,114-1,863・ Others
Operating expenses were reduced.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |8・Amortization expenses of cloud services increased due to the release of cloud services.
On the other hand, due to a decrease in the purchase of devices, the overall cost of sales
decreased by 407 million yen.
・SG&A expenses decreased due to a decrease in legal welfare expenses which temporarily
ocurred in 2021.
・Business operation consignment fee increased due to progress in the outsourcing of backoffice business operation in order to optimize operations.
・Operating loss of 1,863 million yen was recorded due to the impact of the decrease in sales,
despite efforts in reduction of operating costs, etc.

Overview of 3Q FY12/2022 Business Results

Balance Sheet Status
Current assets decreased due to limited sales of packaged systems under multi-year lease
contracts to industries with no “.c Series.” The Company maintains sound financial position
despite dividend payments and the recording of loss.
(Millions of yen)

FY2022End of 3Q

FY2021Year-end

ChangeMajor factors of increase/decrease

Cash and cash equivalents -369
Operating and other receivables -1,676

Current assets

6,240

8,405

-2,164Non-current assets

27,22326,071+1,151 Intangible assets +948

33,463

34,476-1,013

8,234

7,512

+722

664

850

Total liabilities

8,898

8,362

+537

Total equity

24,565

26,114-1,549Total liabilities andshareholders’equity

33,463

34,476-1,013

Total assets
Current liabilities
Non-current liabilities

Operating and other payables -922
Short-term interest-bearing debts +2,188-185 Long-term interest-bearing debts -79

Dividends payout -414
Loss -1,433

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |9・ Within current assets, operating receivables decreased due to the limited sales of packaged
systems under multi-year lease contracts to industries with no “.c Series.”
・Within current liabilities, operating payables decreased due to a decrease in purchases ofdevices, which is a result of a decrease in sales volume of packaged system.

・Total equity decreased due to payment of year-end dividend for FY2021 and recording of loss
in the third quarter of FY2022, but the Company maintains a sound financial condition.

Overview of 3Q FY12/2022 Business Results

Cash Flow Status
Cash flow from operating activities decreased due to an increase in contract ratio ofmonthly subscription-type services, but there was no shortage in working capital.
FY2022
1H

FY2021
1H

Cash flow from operating activities

644

1,413

-769

Cash flow from investment activities-2,173-2,329+156 Decrease in purchase of intangible assets +226

Cash flow from financing activities

1,157

711

+446 Decrease in dividends paid +516

Free cash flow

-1,529-916-614

Cash and cash equivalents

3,153

3,029

+124

(Millions of yen)

YoYchangeMajor factors of increase/decrease

Decrease in profit before tax -4,254
Decrease in trade and other receivables +2,437

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |10・Operating cash flow decreased due to the rising contract rate of monthly subscription services,
but there was no shortage in working capital.

2. Results Forecast for FY12/2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |11

Results Forecast for FY12/2022

Consolidated Results Forecasts
Full-year results forecasts was revised in order to reflect business results for the first ninemonths as well as current business condition.
FY2022 Full-year forecast(Millions of yen)
Revised forecast

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

Previous forecast(August 9)

FY2021
Full-year

Difference

13,30012,700+600

20,652

5,400

5,200

+200

5,753

7,900

7,500

+400

14,898

11,10011,500-400

11,503Operating profit *-3,200-4,000

+800

3,395

Profit before tax *-3,400-4,100

+700

3,233

Profit attributable to owners of
the parent *-2,700-3,200

+500

2,173

-30.58 yen-36.24 yen-

24.72 yen

Basic earnings per share**minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |12・Results forecasts was revised based on situations up to the 3Q.
・In addition to expected demand for monthly subscription-type services such as “.c Series,”
sales of “.NS series” under multi-year lease contracts, which are sold to industries with no “.cSeries,” are expected to exceed the plan.

・In addition, since the Company will continue the reduction of operating expenses, it revised
revenue, operating profit, profit before tax, and profit attributable to owners of the parent.

Results Forecast for FY12/2022

Revenue Forecast by Service Category
No change in sales plan for cloud services in FY12/2022. Revenue forecast for packaged
system was revised since both sales and support services are expected to exceed the plan.
FY2022 Full-year forecast(Millions of yen)

Cloud service
Software service
Marketplace
Packaged system
Software sales
Operation and support
Total

Revised forecast

Previous forecast(August 9)

FY2021
Full-year

Difference

2,540

2,540

-

1,791

1,860

1,860

-

1,090

680

680

-

701

10,76010,160+600

18,860

3,250

2,830

+420

11,620

7,510

7,330

+180

7,240

13,30012,700+600

20,652

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |13

・Revenue forecast of Cloud service is unchanged from the previous forecast.
・Within Packaged system, sales of Software sales was revised upward due to steady sales of“.NS Series” under multi-year lease contracts.
・The Company updated revenue forecast of “Operation and support” in light of rising usage
rates of ancillary services.

Results Forecast for FY12/2022

Factors Behind Changes in Operating Profit
Decrease in cost of sales is expected to be limited due to an increase in amortization expenses
and maintenance costs for cloud services.
(Millions of yen)

3,395

Decrease incost of sales+353

Decrease inpersonnel expenses+200

Increase inserviceinfrastructure
expense-69

Others+413

Cost of sales
・Amortization expense is expected to increase due tothe release of cloud services.

Increase inbusiness operationconsignment fee-140・Maintenance cost of cloud services is expected toincrease.
SG&A expenses, etc.

Increase in amortization
expenses of cloud services-362

FY2022
Forecast

FY2021

・Service infrastructure expense
Strengtheningand extension of operational
infrastructure cloud services, etc.
・Personnel expenses
Legal welfare expenses which temporarily
occurred in FY2021 is expected to decrease.
・Business operation consignment fee
Partial outsourcing of business operations for
optimization.
・Others
Reduction of operating expenses.

Decreasein sales-7,352-3,200

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |14・Decrease in cost of sales is expected to be limited due to an increase in amortization expenses
of cloud services.
・Amortization of cloud services is conducted using 10-year fixed-amount method starting fromthe time of release.

・Within SG&A expenses, service infrastructure expenses, which are expected to increase yearon-year, are expenses necessary for the operation and maintenance of IT infrastructure forproviding cloud services.
・Operating expenses are expected to decrease due to the reduction of operating expenses byimproving the efficiency of sales activities.

Results Forecast for FY12/2022

Dividend Forecast
Year-end dividend is unchanged from the forecast of 1 yen per share.

Dividend per share(Yen)

FY2022

FY2021Dividend

Interim dividend-

4.0

Year-end dividend(Forecast)

1.0

4.7

1.0

8.7

-

35.2%

Annual dividend(Forecast)
Consolidated dividend
payout ratio

・Althoughfinancial results for FY12/2022 andFY12/2023 is planned to be a loss, the Company
judged that it is possible to pay a dividend inconsideration of retained earnings.
・The Company announced annual dividend
forecast of 1.0 yen per share for FY12/2022.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |・Dividends for 2022 is unchanged from previous forecast.

15

3. Progress of the Medium-Term Management Plan (2022-2028)

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |16

Progress of the Medium-Term Management Plan (2022-2028)

KPI
Since market penetration of the core product “.c Series” is the key factor for achieving
the mid-term performance plan, the Company has set four KPIs to manage their progresses.

KPI Targets for the End of 2024
Cloud transition rate: 40%
Definition: Number of “c Series” user companies ÷ Number of industry-specific software user
companies (target industries of “.c Series”*)
Standard version of “.c Series”
Number of licenses: 24,000 licenses
Definition: Number of chargeable licenses in the target month
Average monthly license fee: 23,000 yen /monthDefinition: Sales in the target month ÷ Number of charge licenses in the target month
Churn rate: Less than 1%
Definition: 12-month average of <the number of cancelled licenses in the target month÷ the number of chargeable licenses in one month before the target month>* Clients in auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shops
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |17・Market penetration of “.c Series,” which are the Company’s core product, is the key forachieving the mid-term performance plan, so it uses four KPIs to manage the progresses.
・KPI for measuring penetration into clients is the "cloud transition rate."
Cloud transition rate of 40% is the KPI target as of the end of 2024.

・“Number of licenses” and “Average monthly license fee” are KPIs for measuring the progressof number of licenses and unit price based on the sales plan.
24,000 licenses and average monthly license fee of 23,000 yen are the KPI targets as of theend of 2024.
・The monthly unit price of “.c Series” varies depending on the type of licenses, since there arelicenses for multiple industries and jobs. Therefore, the Company closely monitors theaverage amount.
・"Churn rate" is also set as a KPI, and the KPI target is less than 1%.

Progress of the Medium-Term Management Plan (2022-2028)

Total Number of Clients of Industry-Specific Software
Total number of clients* increased due to the progress in acquisition of new clients in target
industries of “.c Series.”
Clients in auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shops (target industries of ”.c Series”)
Clients in other industries **38,00938,09838,35438,549(companies)

Clients in target industries of “.c Series”
・Competitiveness has further improved due to the launchof “.c Series,” and the acquisition of clients of othercompanies’s products progressed.

33,47033,57833,85334,066

・Target clients has expanded since “.c Series” havea broad price structure.

Reference:
Difference between the number of clients at the end of FY2021 andthose at the end of FY2020: +606 companies

4,539

4,520

4,501

4,483

End of 4Q

End of 1Q

End of 2Q

End of 3Q

FY2021

FY2022* Number of user companies of cloud-based software service ”.c Series” + packaged system “.NS Series”** Car dealers, auto electrical equipment shops , radiator shops, auto glass shops, mobile phone shops, machine tool dealers, travel agencies, bus operators
Note) “.c Series” for auto parts dealers and recycling shops have not yet been provided.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |18

・The graph shows trend in the total number of user companies of the Company’s industryspecific software.
・The number of clients is the total number of companies using “.c Series” or “.NS Series.”
・The new product “.c Series” are highly evaluated, and the number of inquiries increased.
Therefore, acquisition of new clients progressed and the total number of user compnaies
increased.

Progress of the Medium-Term Management Plan (2022-2028)

Switching to “.c Series”
Cloud transition rate at the end of 3Q is 4.6%.
User companies of “c Series”
Cloud transition rate

User companies of “.NS Series” (Target industries of “.c Series”*)

4.6%
2.9%
1.2%
Cloud transition rate
・Inthe early stage, the transition will proceed moderately.
33,57833,85334,066

395

991

1,557

(companies)

User companies of “.c Series”
・Since the number of expired contracts of “.NS Series”
increased from June, the number of user companies of“.c Series” increased linearly.

33,18332,86232,509End of 1Q

End of 2Q

End of 3Q

・ Among 1,557 companies, clients using monthly contractsof “.NS Series” for a limited period are not included.

Definition of cloud transition rate“.c Series” user companies ÷User companies in target industries of “.c Series”

FY2022* Auto maintenance shops, service stations, auto body shops, auto parts dealers, and recycling shopsNote) “.c Series” for auto parts dealers and recycling shops have not yet been provided.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |19

・Cloud transition rate as of the end of 3Q was 4.6%
・The number of the user companies of ”.c Series” is 1,557 companies.
This figure does not include clients who are using monthly contracts of “.NS Series” for alimited period after the contracts of “.NS series” have expired.

・These clients are scheduled to switch to “.c Series” as the functions of “.c Series” are fulfilled.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of “.c Series" User Companies(Standard Version/Specific Major Companies)
The increased number of “.c Series" user companies in 3Q are using the standard version of“.c Series.”
Number of user companies of the standard version of “.c Series”
Number of user companies of "c Series" for specific major companies and service stations(companies)

1,557

991
1,433

395

Standard version
・The Company started full-scale provision from 2022.
・Since the number of expired contracts of “.NS Series”
increased from June, the number of user companies of“.c Series” increased linearly.
Specific major companies and service stations
・Early installation started from 2021.
・The pace of growth is not constant because of they are
installed to multiple stores in bulk for each project.

867
Definitions of standard version andspecific major companies and service stations

274
121

124

124

End of1Q

End of 2Q

End of 3Q

FY2022Standard version:
Clients using “.c series” with standard specification
Specific major companies and service stations:
Clients using “.c series” with special specifications such as licensing
system, etc.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |20・ Standard version of “.c Series” and “.c Series” for specific major companies and service
stations are distinguished based on differences in license system, etc.
・”.c Series” for specific major companies are installed to multiple stores in bulk for eachproject, so it takes about 1-2 years to preparation, which is the reason the pace of increase
varies.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of User Companies of Standard Version of “.c Series"(Existing/New Clients)
Growth in the number of existing clients accelerated compared to 2Q.

Existing client: Number of user companies of the standard version of “.c Series” who switched from “.NS Series”
New client: Number of user companies of the standard version of “.c Series” who newly become the users

1,433(companies)

Existing clients・Since the number of expired contracts increased from
June, the pace of growth in the number of existing clients
accelerated a little compared to 2Q.

721
867

・Acquisition of new clients remained steady due to thestrong market reputation of “.c Series.”

405
274
118

New clients

712

Definitions of new clients and existing clients
Existing client: Clients who switched from “.NS Series” to “.c Series”
New client: Clients who became a new user

462

156
End of 1Q

End of 2Q

End of 3Q

FY2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |21

・The number of user companies of the standard version of “.c Series” was steady, regarding
both switching of existing clients and acquisition of new clients.
・Since the number of expired contracts of “.NS Series” increased from June, the number ofexisting clients who switched to “.c Series” increased as well.

・Reputation of “.c Series” was strong, so the acquisition of new clients was steady.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of “.c Series" Licenses (Standard Version/Specific Major Companies)
The majority of licenses of “.c Series” that increased in 3Q consists of standard version.

Number of licenses of the standard version of “.c Series”
Number of licenses of “.c Series” provided to specific major companies and service stations

2,857

2,056
1,790
1,306

(license)

Standard version
・The growth in the number of licenses increased comparedto 2Q since they were installed not only to small-sizedcompanies but also to middle-sized companies to someextent.

995
Definitions of standard version and those for specific major companies
and service stations

307

Standard version:
Clients using “.c series” with standard specification

999

1,061

1,067

End of 1Q

End of 2Q

End of 3Q

Specific major companies and service stations:
Clients using “.c series” with special specifications such as licensing
system, etc.

FY2022

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |22

・The number of licenses of “.c Series” for specific major companies increased slightly because
clients who have already installed it made additional purchase of licenses.

Progress of the Medium-Term Management Plan (2022-2028)

Breakdown of Licenses for Standard Version of “.c Series” (Existing/New Clients)
The number of licenses of “.c Series” at the end of 3Q was 1,790 licenses.

Existing client: Number of user companies of the standard version of “.c Series” switched from “.NS Series”
New client: Number of user companies of the standard version of “.c Series” who newly became a user

1,790

950

(license)

Existing clients
・The growth in the number of licenses of “.c Series”
increased compared to 2Q since they were installed
not only to small-sized companies but also to middle-sizedcompanies to some extent.

995
New clients
483
840

307
136
171

512

End of 1Q

End of 2Q

・Since many of new clients are small-sized companies,
the licenses per company is slightly lower compared toexisting clients, but the number steadily increased.

Definitions of new clients and existing clients

FY2022End of 3Q

Existing client: Clients who switched from “.NS Series” to “.c Series”
New client: Clients who newly became a user

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |23

・The number of licenses for “.c Series” as of the end of 3Q was 1,790 licenses.
・Regarding existing clients, the pace of growth in licenses accelerated more than those of thenumber of user companies since “.c Series” are being installed not only to small-sizedcompanies but also to middle-sized companies.

・Regarding new clients, “.c Series” are being installed from relatively small-sized companies,
so the number of licenses per company tends to be small compared to existing clients.

Progress of the Medium-Term Management Plan (2022-2028)

Average Monthly License Fee for Standard Version of “.c Series”
Average monthly license fee at the end of 3Q was 21,047 yen/month.

Average monthly license fee for standard version of ”.c Series”
Existing client: Average monthly license fee of standard version of “.c Series” used by clients who switched from “.NS Series”
New client: Average monthly license fee of standard version of “.c Series”used by clients who newly became a user

(Yen/month)

25,00021,04720,000Existing clients
・Average monthly license fee in September exceeded
the KPI target of 23,000 yen/month due to the progress ininstallation of “.c Series” to middle-sized clients.

19,14817,308New clients

15,00010,00018,80821,15023,3265,000
0・New clients tend to start with minimum plan since
the percentage of small-sized clients is relatively high.

Definitions of new clients and existing clients

16,115
March*

17,261June

18,470Existing client: Clients who switched from “.NS Series” to “.c Series”
New client: Clients who newly became a user

September

FY2022*For 1Q, monthly fee was calculated using the 3-month average, but it has been changed
based on the judgment that average monthly fee at the latest month is appropriate.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |24

・Average monthly license fee for the standard version of “.c Series” as of the end of 3Q was
21,047 yen/month.
・Regarding existing clients, average monthly fees in September exceeded KPI target of 23,000
yen/month because they are being installed to middle-sized companies, not only small-sizedcompanies.
・Since the percentage of small-sized companies is high among new clients, new clients tend to
start with the minimum plan.

4. Topics

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |25

Topics

Shareholder benefits
The shareholder special benefit plan will be abolished from the fiscal year ending
December 31, 2022.

Reasons for the abolition of the shareholder benefit program
After careful consideration from the perspective of how to fairly return profits to its
shareholders, the Company has decided to abolish the shareholder benefit program andconcentrate on returning profits to shareholders through dividends, etc.

Date of abolition of the shareholder benefit program
The shareholder special benefit program will be abolished upon delivery to shareholders
holding 5 units (500 shares) or more as recorded in the Company's shareholder registry
as of the end of December 2021.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |26

・After careful consideration from the perspective of how to fairly return profits to its
shareholders, the Company decided to abolish the shareholder benefit program andconcentrate on returning profits to shareholders through dividends, etc.

Topics

AI / Metaverse

Broadleaf agreed to jointly develop with Fujitsu in AI field
Broadleaf Co., Ltd. and Fujitsu Ltd. agreed to jointly develop to largely reduce the operationalburden of “OTRS,” an operation analysis and optimization solution, by equipping operational
segmentation AI technology.
→Link to the press release (October 19, 2022) *Japanese onlyGroup Company SpiralMind is promoting the establishment of metaverse space
Taku Kamata, the Representative of SpiralMind Co., Ltd. (Broadleaf Group), will participate
as an advisor in the creation of a metaverse space in Tokyo Information Design Professional
University, which will open next spring.
He is also in charge of open campus lectures in the field of metaverse.
→Link to the press release (September. 7, 2022) *Japanese only

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |27

・As an IT company, the Company is implementing a variety of initiatives related to cuttingedge technologies.
・In AI field, for example, an agreement was made in October 2022 to incorporate Fujitsu‘s AI
technology into one of the products offered by Broadleaf and jointly develop them with
Fujitsu Ltd. with the aim to largely reduce the operational burden of the product users.
・Inside the Company, it is also using AI in its database to in order to enhance learning
effectiveness on issues such as proposals related to various auto parts and priority on theusage of parts.
・Spiral Mind (Broadleaf Group) is promoting the establishment of metaverse space.
Kamata, the representative, will participate as an advisor in the creation of metaverse spaceat Tokyo Information Design Professional University, which will open next spring.
・The Company will continue to contribute to clients‘ business development by actively
incorporating cutting-edge technologies into its businesses.

5. Supplemental Information

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |28

Supplemental Information

KPI Related Data (Cloud Transition Rate/Breakdown of User Companies)(companies)
FY2022End of 1Q

End of 2Q

End of 2024
End of 3Q(KPI target)

Cloud transition rate*

1.2%

2.9%

4.6%

40%

Total number of user company

38,09838,35438,549-Target user company of “.c Series”*

33,57833,85334,066-“.c Series” user company*

395

991

1,557

-

274

867

1,433

-

Existing client

118

405

721

-

New client

156

462

712

-

Specific major company

121

124

124

-

33,18332,86232,509

-

4,520

4,501

4,483

-

Standard version“.NS Series” user company
Non-target user company of “.c Series”*Cloud transition rate = ".c Series" users ÷ Users in target industries of “.c Series”

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |29

Supplemental Information

KPI Related Data (Number of Licenses/Average Monthly Fee)(license)
FY2022End of 1Q
The number of “.c Series” license

End of 2024

End of 2Q

End of 3Q(KPI Target)

1,306

2,056

2,857

-

307

995

1,790

24,000Existing client

136

483

950

-

New client

171

512

840

-

Specific major company

999

1,061

1,067

-

Standard version(Yen/month)
2022
March
Average monthly fee of “.c Series”

End of 2024

June

September(KPI Target)

-

-

-

17,30819,14821,04723,000Existing client

18,80821,15023,326-

New client

16,115

17,261

18,470

-

-

-

-

-

Standard version

Specific major company-

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |30

Supplemental Information

Medium-Term Management Plan (2022-2028)
Performance Plan

(Billions of yen)

FY2022Afterrevision

FY2023

FY2024FY2025

FY2026FY2027

FY2028

Revenue

13.3

14.7

18.5

22.0

25.5

29.0

32.5

Operating profit *

-3.2

-2.7

1.0

3.3

6.7

10.0

13.0

-

-

5%

15%

25%

34%

40%

Profit attributable to ownersof the parent *

-3.4

-2.9

6

2.0

4.2

6.3

8.0

Equity attributable to ownersof the parent

20.0

17.5

18.0

Percentage of equity
attributable to owners of theparent

60%

50%

52%

Operating margin*minus (-) represents loss

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |31

Supplemental Information

Medium-Term Management Plan (2022-2028)
Revenue Plan by Service Category(Billions of yen)

Cloud services

FY2022Afterrevision

FY2023

FY2024FY2025

FY2026FY2027

FY2028

2.5

5.9

10.4

15.2

19.9

25.0

29.1

Software service

1.9

5.0

9.0

13.6

18.0

22.1

25.0

Marketplace

0.7

0.9

1.4

1.6

1.9

2.9

4.1

Packaged system*

10.8

8.8

8.1

6.8

5.5

4.0

3.4

Software sales

3.3

2.2

2.5

2.6

2.5

2.2

2.0

Operation and support

7.5

6.6

5.6

4.2

3.0

1.8

1.4

13.3

14.7

18.5

22.0

25.5

29.0

32.5

Total

* Changed the breakdown of Packaged system to figures in line with actual recording standard
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |32

Supplemental Information

Medium-Term Management Plan (2022-2028)
Revenue Trend of Cloud Service in the Future

New platform services※Not included in
the performance plan

Auto finance, logistics MaaS, etc.

Marketplace
Ordering platform
4.1

Software service

2.9

Cloud-based software and DX solutions
1.9
1.6
25
22.1
1.4

18
13.6

0.9
0.7
1.9

5

FY2022

FY20239

FY2024FY2025

FY2026FY2027

FY2028

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |33

Supplemental Information

Medium-Term Management Plan (2022-2028)
Growth Strategy
The Company will promote “Penetration of cloud-based products” as a Growth Strategy
for “Software service,” and promote “Expansion of services" as a Growth Strategy for"Marketplace."
Growth Strategy (1) Penetration of cloud-based products
Measure (1) Starting in 2022, existing clients using industry-specific software will graduallyswitch to “.c Series,” a cloud-based software service.
Industry-specificsoftwarePackaged system ".NS Series“【Multi-year (basically 6 years)
lump-sum lease contract】

Cloud-based software services ".c Series“【Monthly subscription contract】

Switch at the timing of expiration of contract

Measure (2) Acquisition of new clients
In addition to acquiring clients from other companies, the Company will actively provide“.c Series” to service stations and car manufacturer-affiliated car dealers that provide auto
maintenance services.

Growth Strategy (2) Expansion of services
Measure (3) Increase in the number of companies using marketplace-type services
The Company will increase the utilization rate of ordering platform for auto repair parts.
It will also increase the number of companies participating in the auto finance platform.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |34

Supplemental Information

Medium-Term Management Plan (2022-2028)
Understanding of Cloud Transition Rate (1)Switching to “.c Series” will not proceed at a constant pace. Clients switch when 6-years
contracts expire, so the number of switching users depends on the number of deals 6 years ago.
Understanding of cloud transition rate

100%

Early stage
Smaller number of users
will switch to “.c Series”

Medium term
Larger number of users
will switch to “.c Series”

Late stage
Smaller number of users
will switch to “.c Series”

40%

FY2022

FY2023

FY2024FY2025

FY2026

21,285FY2016FY2028(Millions of yen)

Reference: Revenue from FY2016

16,760

FY2027

22,58621,162

20,652

FY2020

FY2021

18,195FY2017*FY2018FY2019* Tajima Inc. became consolidated subsidiary of Broadleaf Group from 3Q FY2017.
Note) “.c Series” for auto parts dealers and recycling shops have not yet been provided.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |35

Supplemental Information

Medium-Term Management Plan (2022-2028)
Understanding of Cloud Transition Rate (2)Since some clients will keep using “.NS Series” under monthly contracts for a limited period,
the number of clients switching to “.c Series” is relatively small at the beginning of the plan.
Case (1): Clients with multiple lease agreements
Example: Client with 6-year contract “.NS Series (for auto maintenance shop)” in 2016 and “.NS Series (for auto body shop)” in 2017".NS series (Maintenance)" monthly contract".NS Series (Maintenance)" 6-year contract".c Series (Maintenance/Autobody)" monthly contract".NS Series (Auto body)" 6-year contract

January 2016
January 2017

January 2022
January 2023

Switch after expirationof both contracts

Case (2): Clients who wish to use a specific function
Example: Client whose contract of “.NS Series” will expire in 2022, but the desired function is not implemented at the time.
“.NS Series” monthly contract“.NS Series” 6-year contract for
January 2016“.c Series” monthly contract
January 2022

Switch after desired
function is implemented
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |36

Supplemental Information

Reason for Switching to “.c Series” at the Expiration of Previous Contract
If existing clients who have lease contracts of “.NS Series” for 6 years switch to “.c Series” before
the expiration of the contract, negative sales will be recorded.
Contract concluded
six years ago

Usage fees - trade-inrecorded as sales

In the case of“.c Series”*

Usage
fee for
6 years

Fifth year of thecontract

If the contract was changed at
this timing, usage fee will bemonthly while trade-in will be
one year, so trade-in becomeslarger than usage fee, resulting inrecording of a negative sales
Monthly
usage fee

TradeinTrade-inIn the case of “.NS Series”
with multi-year lease
contract

Usage
fee for
6 years
Trade-inRenewal ofcontract before
expiration

Expiration ofcontract

Switch to “.c Series”
upon expiration ofcontract
Monthly ・・
usage fee

+Additional license+Volume charge
Sales
recorded(monthly)

Usage
fee for
6 years
Trade-in*The same applies when selling “.NS Series” under a monthly subscription contract

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |37

Supplemental Information

Difference between “.NS Series” and “.c Series”“.c Series” go beyond the scope of estimation preparation and client management.
It contributes to improvement of users’ operational efficiencies in wider range.

Business partners

Service corresponding toElectronic Book Storage Act

Car owners

Electronic ordering service
for auto repair parts

SNS linkage".c Series"
Customer management
Attracting customers
Sales representative".NS Series"

Preparation of estimate and invoice
Customer management

Auto maintenance shops, etc.

GroupwareInternal communications

Sales management
Preparation of slips
Accountant

Operation management
Preparation of estimate
Mechanic

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |38

Supplemental Information

Service Structure (Cloud-based Software Service)

Select the required licenses and options
according to the business size and contents
Job license

Company license＋

Additional Employee
Account

OptionSelect required functions＋

Select a plan according to thebusiness size (mandatory)

Select a license according to
the job type of an employee

Added when multiple people
use the functions of company
license and job license

Start plan

Corporate manager

Account-1＋

Online reservation

Standard plan

Front desk

Account-2

Vehicle examination line
linkage

Total plan

Mechanic

Account-3

Insurance linkage

・
・

・
・

・
・

・
・

+ Database / Client support / Slip issuance, etc.

Clients will select a plan from the company license menu and select necessary job licenses in addition. When multiple people use
the functions of company license and job license, purchase of additional employee account is necessary according to the number ofusers. There are also other service menus such as database and client support.
Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |39

Supplemental Information

Expansion of Service
The Company will promote diversification of services through business alliances withvarious companies in addition to in-house services, starting from “.c Series.”
Business area expansion
Data utilization service

Mobility-relatedindustry

AdvertisingElectronic ordering /EC

Mobility industry
Parts transaction

Insurance
Logistics...

Software service
Mobility industry
Software

Electronic
book storage“.c Series”

Personnel
Affairs

Settlement(SALES GO)

SNS

Accounting

Ordering of
repair parts

Inside sales(LINE)

Digital Transformation

Human resource
development andrecruiting

Finance(Toyota Finance)

Data exchange

Diversificationof services

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |40

Supplemental Information

Explanation of Sales by Service Category

Category Name

Description

Cloud services
Software service

・".c Series," a cloud-based software service
・Software services with monthly subscription contracts, etc.

Marketplace・Ordering platform for auto repair parts, etc.

Packaged system
Software sales

・Sales of ".NS Series," a packaged system, with lease contracts
・Sales of "OTRS," a work analysis software

Operation and support

・Ancillary services of “.NS Series” such as support services
・Sales of supplies such as forms and toners

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |41

Supplemental Information

Revenue by Service Category (FY2021)(Millions of yen)

Cloud services

FY2021
1Q

FY2021
1H

FY2021
Cumulative 3Q

FY2021
Full-year

417

847

1,302

1,791

Software service

247

503

778

1,090

Marketplace

170

345

524

701

Packaged system

4,778

9,090

13,87918,860Software sales

2,968

5,486

8,458

11,620Operation and support

1,809

3,604

5,420

7,240

5,195

9,937

15,181

20,652Total

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |42

Supplemental Information

Company Profile

Company nameBroadleaf Co., Ltd

Representative

Kenji Oyama, Representative Director and President

Listed on

Prime Market of Tokyo Stock Exchange (3673)

SectorInformation and telecommunication

Founded/Established December 2005/September 2009
Capital stock

7.148 billion yen (consolidated)

Fiscal year

From January 1 to December 31

Business outline

Using proprietary "Broadleaf Cloud Platform" as its infrastructure, the Company
provides SaaS cloud services, marketplace-type services, and partner programs thatenable functional and service collaboration with various players.
These services are utilized as IT solutions that lead environmental changes, which are
occurring in various industries including mobility industry, to business opportunities.

Head office location Floor 8, Glasscube Shinagawa, 4-13-14 Higashi-Shinagawa, Shinagawa-ku, Tokyo
Domestic offices

27 business offices and 3 development centers in Japan

Major subsidiaries Tajima Inc.

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |43

Disclaimer

The results forecasts and forward-looking statements contained in this document are forecasts made by theCompany based on information available at the time of preparation of the document and include potential risks
and uncertainties.
Therefore, please be aware that actual results may differ from these results forecasts due to various factors.

Contact Information
Broadleaf Co., Ltd
Corporate Communication Department
E-mail:bl-ir@broadleaf.co.jp

Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |44