Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSBusiness Results Briefing
2Q FY12/2017
Broadleaf Co., Ltd.
TSE 1st Section: 3673

Copyright (c) Broadleaf Co., Ltd. All rights reserved

August 4, 2017

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Chapter 1

Contents

Overview of 1H Business Resultsfor FY12/2017

2

Chapter 2

9Full-Year Results Forecasts
Chapter 3

Management System and Policiesof the New Group

15

Appendix [Reference]
Corporate Profile, Sales Fields, etc.

Copyright (c) Broadleaf Co., Ltd. All rights reserved

20Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Chapter 1

Overview of 1H Business Results for FY12/2017

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2

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSPL Summary
POINT

While both sales and income declined, income exceeded the initial forecasts (February 14)
by a large margin.
(¥ million)

FY017
YoY
1H ResultschangeNet sales
Operating income
Operating income ratio

Net income
Net income ratioEPS*

FY2016
YoY(Ratio)1H Results

FY2017
Initial 1H
Forecasts

7,926

-238

-2.9%

8,164

8,100

918

-524

-36.3%

1,442

600

11.6%

-6.1%

-

17.7%

7.4%

559

-368

-39.7%

927

390

7.1%

-4.3%

-

11.4%

4.8%

¥12.62-¥6.55-¥19.17¥8.81* EPS in 1H FY12/2016 is based on the assumption that a stock split (1:2) that comes into force on December 17, 2016 was
carried out at the beginning of the fiscal year.
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3

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSSales by Category (1H)
POINT

While Network Service maintained higher sales, the increase was not enough to offset a fallin sales in Business Application Software.
(¥ million)

FY2016FY2017
1H Results
Business Application Software
System Support
Maintenance
Provision of Consumables
Network Service
Stock

Transaction
PSF*1
Order Placement andAcceptance*2
Others
Net sales

YoY change

YoY (Ratio)

1H Results

4,889
612
270
342
2,425
1,921

-376
-21
-19
-2
160
123

-7.1%
-3.3%
-6.6%
-0.6%
7.1%
6.9%

5,266
633
289
344
2,265
1,798

467

21

4.6%

447

318

-4

-1.4%

322

150

25

20.1%

124

36
7,926

16
-238

79.4%
-2.9%

20
8,164

*1: Payment agency service for recycled parts*2: BL Parts Order System and CarpodTab
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4Breakdown of Sales in Business Application Software(1H and 2Q)

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSPOINTThe number of user renewals improved in 2Q due to the full enforcement of renewal control.

(¥ million)

1H Results
Automotive
RenewedNew customers
Non-automotive
RenewedNew customers
Total
RenewedNew customers
OthersBusiness Application
Software total sales

3,599
3,175
424
883
601
282
4,482
3,776
706
408
4,889

FY2017YoY
2Q Resultschange
2,480
-120
2,215
-81
264
-39
449
86
303
91
145
-6
2,929
-34
2,519
10
410
-44
167
-341
-376

3,095

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FY2016YoY
1HchangeResults
128
3,719
148
3,256
-21
463
30
798
11
511
18
287
158
4,517
160
3,767
-2
750
-325
749
-168

5,266

2Q
Results
2,352
2,067
285
419
292
127
2,771
2,359
412
492
3,263
5

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSKey Indicators in Network Service Domain
POINT
Steadily expanding toward the industry standard.

FY2017FY2016

Results at theend of 1H

Results at theend of the year

Results at theend of 1H■Transactions
BL Parts Order System
Number of connections withmaintenance shops
Number of parts dealers
participating in transactions
CarpodTab
Number of contracts

2,097

2,041

1,929

337

335

335

3,177

3,054

2,762

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6

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSBreakdown of Expenses
POINT

While cost of sales declined, personnel expenses and stock-related costs increased.
(¥ million)

FY2017
1H Results

FY2016
YoY change

1H Results

Net sales

7,926

-238

8,164

Cost of sales

2,105

-366

2,472

SG&A expenses

4,907

412

4,495

2,562

221

2,341

R&D Expenses

81

-86

167

OthersOther operating revenue
and expenses
Operating income

2,264

277

1,987

4

-241

245

-524

1,442

2,958

273

2,685

643

-70

713

Personnel Expenses

918
261

Total personnel expenses*
Subcontract cost

* Sum of labor cost (cost of sales) and personnel expenses (SG&A expenses)
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7

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSBS Summary
POINT

Cash and deposits declined due to the payment of dividends and share buyback (~January31) in 1Q. z(¥ million)

FY2017
Change fromEnd of 1H
end of FY2016

End of
FY2016

Major factors forincrease/decrease
Decrease in cash and deposits (-1,331)
Increase in operating receivables (145)

Current Assets

11,130-1,174

12,304Non-current Assets
Total Assets

13,15524,285137-1,03713,01825,322Current Liabilities

4,786

-194

4,980

Increase in operating debt (-89)
Decrease in accrued income taxes (-253)

855

-328

1,183

Decrease in long-term loans payable (-342)

5,641

-522

6,163

Non-current
Liabilities
Total Liabilities
Total Shareholders'Equity18,644-515

19,159Total Liabilities andShareholders' Equity

24,285-1,03725,322

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Recognition of net income (559)
Decrease by acquisition of own shares(-530)
Decrease by dividend of surplus (-563)

8

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Chapter 2

Full-Year Results Forecasts

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9Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Full-Year Results Forecasts
POINT

Initial results forecasts for FY12/2017 have been revised in consideration of the conversion of
Tajima Inc. to a consolidated subsidiary, etc.
[Background to results announced this time and supplementary explanation]■■

The transfer of Tajima’s shares was completed on July 25.
In FY12/2017, results of Tajima from August to December will be consolidated.

■

Forecasts of Broadleaf excluding Tajima take into account progress in the first half, etc. (page 11).

Net sales

Initial results forecasts(Feb. 14)
Revised results
forecasts (Aug. 4)
Amount of change
Rate of change
Results in the previous
fiscal year

OperatingincomeProfit before
tax

ProfitEPS (yen)

17,000

2,000

1,960

1,230

27.79

17,800

2,100

2,050

1,240

28.00

800

100

90

10

0.21

4.7%

5.0%

4.6%

0.8%

0.8%

16,760

2,953

2,921

1,876

39.47

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10Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSSales Forecasts by Category
POINT

The impact of the consolidation of Tajima on sales is ¥1.3 billion.
(¥ million)
FY2017(Consolidation of
Tajima)

FY2016(Excluding Tajima)

Revised forecasts Revised forecasts

Initial forecasts

Results

Business Application Software

11,30010,35010,70010,894

System Support

1,250

1,200

1,250

1,243

Maintenance

550

550

600

570

Provision of Consumables

700

650

650

673

Network Service

5,250

4,950

5,050

4,623

Stock

4,200

3,900

3,900

3,663

950

950

950

918

650

650

650

657

300

300

300

261

Others

100

100

200

43

Net sales

17,80016,50017,00016,760Transaction
PSF
Order Placement
and Acceptance

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11

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS.NS2 Series
POINT.NS2, which adopts a hybrid tariff structure, was launched (July 14) as a bridge model until the
injection of a cloud model.

Old .NS Series

Car maintenance network system(1) Lump-sum license for 6 years (lease contract)+(2) Network utilization charge (monthly fee)
…
y1

y2

y3

y6

Car bodywork estimate network system

New .NS Series
Giving consideration to needs for the addition of options during the lease period
Higher unit pricefor a 6-year period

Automobile sales network system(1) Basic fee (lease contract)+(2) Option of functions (monthly fee)+…

(3) Network utilization charge (monthly fee)y1

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y2

y3

y6

12

Factors for Changes in Operating Income (Year on Year)
POINT

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Enhance the allocation of expenses to human resources to ensure growth overthe medium and long terms.
The profit contribution of Tajima is expected to be offset by expenses incurred.
A fall in costof sales+662

Operatingincome2,953(¥ million)

A fall in
sales
-260

Personnel
expenses-730

Acquisition
expenses ofTajima-160

Stock-related
expenses-200

Tajima+50

Operatingincome2,100

Others-215

Note: Positive signs show factors for an increase in income, and negative signs
show factors for a decrease in income.

Increases and decreases in operating income of the Group excluding Tajima

FY12/2016 (IFRS)FY12/2017(Forecast)13

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSDividends
POINT

The dividend forecast for FY12/2017 remains unchanged.

Annual dividend(Payout ratio)¥22.00(78.6%)¥21.25*1(53.8%)¥12.50*1(31.2%)
YearendYearend¥12.50Interim¥8.75 *2

¥11.00(Forecast)Interim¥11.00(Fixed)¥6.25*1

Interim ¥6.25*1

FY12/2015

Yearend

FY12/2016*1

FY12/2017(Forecast)*1 Amount adjusted for the share split (1:2) with the effective date on December 17, 2016
*2 The interim dividend in FY12/2016 is the sum of the ordinary dividend of ¥6.25 (share split-adjusted) andcommemorative dividend of ¥2.5 celebrating the 10th anniversary (share split-adjusted).

14

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Chapter 3

Management System and Policies of the New Group

Copyright (c) Broadleaf Co., Ltd. All rights reserved

15

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSBroadleaf GroupPOINT

The market coverage of the existing businesses in Japan has expanded due to the acquisition of
Tajima.
The Group system has been strengthened for the transformation of the earnings structure and thecreation of new markets (Japan and overseas).
Japan Tajima Inc.
Broadleaf Co., Ltd.

 SpiralMind Co., Ltd.

100%

100%

【海外】
Overseas(China)(The Philippines)

 Broadleaf I.T.Solutions Inc.
 BLISAM TRADING CORP

100%

 博楽得信息科技 (合肥)有限

100%

50%

 北京盛源博乐信息科技有限公司

100%

: Consolidated subsidiaries. : Equity-method affiliates%: Percentage of voting rights owned
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Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

Performance Targets for FY2018
POINT

Sales target for FY2018 is within range, but we plan to review the income target because
careful examination is necessary, given cost burdens and cost reduction effects, etc.

Targets for FY2018

Impact of theacquisition of Tajima[Business performance]

Net sales¥19.0 billion

Within range

Operating income¥3.2 billion(Operating income margin 16.8%)

Carefully examining

Announced on February 14, 2017

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17Key Factors of the Future Management Plan of the Group

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

POINT
Further expand the customer base, leveraging the comprehensive strength of the Group andthe injection of overwhelming next-generation systems.
Build the Group management system in anticipation of the introduction of a new tariff structure.
Key factors of the management strategies of the Group from FY2018

Rebuilding of
the sales system
Rebuilding ofdevelopment

1

Rebuilding of the
support function

Seven perspectives forformulating theGroup’s strategies

Rebuilding of
personnel affairs
and organizations

Governance

Creation of
new businesses• Phased and planned shift to a subscription model

2

Strengthening ofproducts and services

Injection of next-generation business applications

Building of the slimmer management system of
the Group• Integration and collaboration of facility, procurement and sales
functions and indirect functions

3

Generation of income from new services• Auto parts distribution and settlement, the utilization of data, and theapplication of advanced technologies (VR/MR,AI)

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18

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS(Reference) Future Image of Broadleaf[Expansion of target markets][Evolution of services][Markets and customers]

AppliedApplication of advanced technologies
technology- Application of VR/AR, AI, etc.
(Collaboration with other industries)
servicesAutomanufacturers
Services

Distribution

MobileManufacturingservices

Tourism

Machine tools

Automotive aftermarket
business operators

Bus

Information PF

Distribution PF

Information PF

Finance

Big data & analytics
Information- Auto safety and security support services
services(Collaboration with auto manufacturers)[Services]z
Cloud service & software- Business applications- Work efficiency analysis tool (OTRS)

Industry-specificsystems

Business Applications(Web Ver.)

Network/ Web services- EC sites (Buhin MAX)- B2B ordering service (BLP/CPT)[IT infrastructure]

Vehicles

GCP

Components

Information network

Histories
Internet

Auto parts distribution andsettlement services- Recycled parts market (PSN)

Platform

Overseas (components distribution
network & platform)

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19Appendix [Reference Information]

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20Appendix 1

Corporate Name

Corporate Profile

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSBroadleaf Co., Ltd.

Representative Director, President and CEO
Kenji Oyama
Listed on

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

Founded/Established

December 2005/September 2009

Capital StockJPY 7,147 million

Business Outline

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

Head Office Address

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

Sales Offices

33 offices in Japan

Development Centers

3 centers in Japan (Sapporo, Tokyo and Fukuoka)

Employee

764 persons(as of December, 31, 2016)

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21

Appendix 2

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONSSales Fields
Although the Company is in a single segment of IT services businesses,
we have adopted the following classifications by business area

Major
category

Classification
MediumSmall category
category

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

Business Application Software

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

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

System
Support

Database provision services- Provision of database of car-related vehicle information and parts-related
information that is updated daily

Server provision services- Consideration for server maintenance required for the use of network-typesystems

Recycled parts settlement
agency services- Operation of recycled parts distribution network “Parts Station NET” thatshares inventory information on recycled parts
Collecting fees as transaction amount settlement agency for parts dealing

Stock

Network
Services
Transactions

Computerized ordering- Provision of computerized ordering system for automotive parts
system for parts, tablet-type - Provision of tablet-type operation terminals to maintenance business
operation support tools, etc.
operators, etc.
Others- Products and services other then the above

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22

Broadleaf Co., Ltd.
Q2 2017
INVESTOR RELATIONS

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

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

Copyright (c) Broadleaf Co., Ltd. All rights reserved