Avant : Presentation for the first quarter of the fiscal year ending June 30, 2024

3836 TSE Prime

Avant Group Corporation

Financial Results Briefing

for the first quarter of Fiscal Year June 2024

October 31,2023

©AVANT GROUP CORPORATION. All Rights Reserved.

Executive Summary

• Summary of financial results for the first quarter of FY June 2024
• • Net sales increased by 12.3% year-on-year to ¥ 5,646 million, as the significant growth of the Digital Transformation Promotion business contributed to the increase in sales.
  • Operating profit increased by 10.8% year-on-year to ¥ 681 million, mainly due to a decrease in one-off costs incurred in the previous year as a result of the Group's reorganisation and the effect of increased revenues from the digital transformation promotion business, despite an increase in fixed personnel costs due to an increase in headcount and a continued high level of subcontract processing costs in response to an increase in orders.
  • The previous method of classifying business segments was reviewed, the reportable segments were changed from "Group Governance Business", "Digital Transformation Promotion Business" and "Outsourcing Business" to, the new reportable segments are "Consolidated Financial Disclosure Business", "Digital Transformation Promotion Business" and "Management Solutions Business".
• Earnings and Dividend Forecasts
• • No changes are made to the forecast for the current financial year, which is expected to achieve sales of ¥ 24,000 million and operating profit of ¥ 3,850 million.
  • The year-end dividend per share for FY2024 is expected to be 19 yen per share, with the aim of achieving the 8% ratio of dividends to net assets, which is the target for the period of the new medium-term management plan.
• 'BE GLOBAL 2028' Actions to realise
• • DIVA releases TRINITY BOARD (alpha version) to promote DX for Japanese boards of directors.
  • DIVA and Ernst & Young ShinNihon LLC commercialise a jointly developed solution to improve efficiency in handling consolidated audits.
  • AVANT updates its business management system AVANT Cruise. Standard package functionality for performance management

(budget, actual and forecast)

©AVANT GROUP CORPORATION. All Rights Reserved.

2

【Reference】 Segment Reorganization

Before

After

Old Segments

Corporation

ID

Group Governance

Former DIVA

Digital

TransformationZEAL

Promotion

Main Business

Disclosure Net

Consolidated

Accounts Software

Consolidated Accounts Consulting & Operations

Management Solutions

Business

(Software & consulting)

CPM*

BI＆Data Platforms

Main BusinessCorporation

Disclosure Net

ID

Consolidated

Accounts Software

DIVA

Outsourcing

Consolidated Accounts

Consulting & Operations

Management Solutions

BusinessAVANT (Software & consulting)

CPM

New Segments

Consolidated

Financial Disclosure

Business

Management

Solutions Business

OutsourcingFIERTEOutsourcing

※CPM：Corporate Performance Management

BI＆Data Platforms

ZEAL

Digital Transformation

Promotion Business

©AVANT GROUP CORPORATION. All Rights Reserved.

3

【Reference】 New business segments

「Consolidated Financial Disclosure Business」

In addition to the development and maintenance of our own packaged software "DivaSystem" for consolidated management support and consolidated accounting, we also provide outsourcing of consolidated and non-consolidated financial statements using this software, supporting value creation through corporate information disclosure. As for our position within our group, we aim to establish a business model that combines the software business and outsourcing business.

The consolidated financial statement disclosure service also includes an information search service for disclosure documents provided by Internet Disclosure Co., Ltd. primarily for auditing firms.

「Digital Transformation Promotion Business」

Through consulting and system development, we provide AI and BI solutions that analyze, predict, and visualize data from a data platform that utilizes all kinds of data surrounding companies, and support companies in promoting digital transformation and data-driven management. From major cloud vendors to multi-cloud compatible software, you will learn about the latest information utilization methods and generation AI specializing in data utilization, as well as train engineers and develop your own data utilization platform products. We also aim to expand our group's products.

「Management Solutions Business」

Focusing on group management, consolidated accounting, and business management, we aim to visualize and maximize a company's "invisible value," and provide one-stop support from consulting to system planning, construction, implementation, operation, and maintenance. In addition to in-house development, it is also possible to develop in combination with software developed by other companies. In this segment, we will continue to create solutions that make the most of the group's assets and provide solutions that provide management information that will improve corporate value.

INDEX

Ⅰ . Summary of financial results for the first quarter of FY June 2024 Ⅱ. Earnings and Dividend Forecast

Ⅲ. 'BE GLOBAL 2028' Actions to realise

• Figures in this presentation are rounded down to the unit of display.

The information contained in this material regarding the business outlook and other forecasts and strategies etc. are forward-looking statements and are determined within the range that could normally be predicted based on the information reasonably available to the Company at the time of preparation of this material. Investors should 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.

©AVANT GROUP CORPORATION. All Rights Reserved.

5

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

©AVANT GROUP CORPORATION. All Rights Reserved.

6

(millions of yen)

Results Highlights

 Net sales increased 12.3% year on year to 5,646 million yen, as the digital transformation promotion business contributed significantly to the increase in sales.

 Fixed personnel costs increased due to an increase in the number of employees, and outsourcing costs remained at a high level due to an increase in orders. On the other hand, one-time expenses associated with group reorganization in the previous fiscal year decreased, and net sales of the digital transformation promotion business increased. As a result, sales amounted to 681 million yen (10.8% increase compared to the same period last year).

		FY6/24			YoY Variance
		Q1		Yr earlier			% chg
	Net Sales		5,646		5,025		12.3%
	Cost of Sales		3,273		2,776		17.9%
	Gross Profit		2,373		2,249		5.5%
	GPM		42.0%		44.8%		▲2.7pt
	SG&A		1,692		1,634		3.5%
	Operating Income		681		614		10.8%
	OPM		12.1%		12.2%		▲0.2pt
	Net Income		482		370		30.2%
	NPM		8.6%		7.4%		1.2pt
	EBITDA		798		709		12.5%
	EBITDA margin		14.1%		14.1%		0.0pt
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Progress to Full-Year Sales Targets

• FY6/24 Q1 cumulative sales reached 23.5% of the full-year plan, which is a high progress rate compared to the last 3 years.

FY24

FY23

FY22

FY21

FY20

0.0%

Q1

23.5%

23.5%

25.7%

26.4%

24.4%

21.6%

25.1%

26.9%

26.3%

22.2%

24.9%

26.3%

26.6%

23.7%	25.6%			25.8%	24.9%
20.0%	40.0%			60.0%	80.0%
	Q1	Q2	Q3	Q4

FY6/24

plan

¥24.0b

12.0%

¥21.4b

14.6%

¥18.7b

15.2%

¥16.2b

3.5%

¥15.6b

100.0%

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8

FY6/24 Q1 Operating Income Bridge (YoY)

• Although profits increased due to the effect of increased sales, the rate of increase in recruitment costs and IT costs due to business expansion exceeded the rate of increase in sales. Other expenses decreased due to a decrease in structural reform costs incurred in the previous fiscal year.
• Investment expenses to realize the software-driven strategy were approximately 100 million yen.

	Higher GP from
（millions of yen）	sales growth

Higher personnel

and recruiting

costs due to

increased hiring

and higher

compensation.

FY6/23 Q1

Operating

Income

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Increase in	M3（Management Solutions Business）	80M
outsourcing costs	M2（Digital Transformation Promotion Business）	13M
to meet demand	M1（Consolidated Financial Disclosure Business） 10M

including hiring	Other
gap.	Investment
	expenses
		expenses

Increase in IT expenses

due to organization

expansion and support

for cloud computing

+1.7b	+27.6％
+0.6b	+10.8％	FY6/24 Q1	FY6/24 Q1
Operating Income
Operating
		(Before investment	Income
		expenses)

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Results by Business Segment

• Although sales increased in all segments, the digital transformation promotion business was the overall driver.
• Regarding operating income, profits increased in the digital transformation promotion business and consolidated financial results disclosure business, but profits decreased in the business management solutions business.

• Orders and order backlog increased year on year in all segments

(millions of yen)

			FY6/24			YoY Variance
			Q1		Yr earlier			% chg
		Net Sales		1,747		1,631		7.1%
	Consolidated Financial	Operating Income		364		358		1.7%
	Disclosure	OPM		20.8%		22.0%		▲1.1pt
	Business
	Orders		1,821		1,697		7.3%
		Order Backlog		4,023		3,482		15.5%
		Net Sales		2,171		1,613		34.6%
	Digital Transformation	Operating Income		348		196		76.9%
	OPM		16.0%		12.2%		3.8pt
	Promotion Business
	Orders		2,026		1,676		20.9%
		Order Backlog		1,560		1,121		39.2%
		Net Sales		1,863		1,851		0.6%
	Management Solutions	Operating Income		148		309		▲52.0%
	OPM		8.0%		16.7%		▲8.7pt
	Business
	Orders		1,623		1,492		8.7%
		Order Backlog		2,873		2,638		8.9%
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