Broadleaf : 1Q FY12/2023 Business Results Briefing Material (with Notes)

1Q FY12/2023 Business Results Briefing Material

Broadleaf Co., Ltd (3673)

May 10, 2023

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Table of Contents

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Business Results for 1Q FY12/2023

Earnings Forecast for FY12/2023

Progress of the Medium-Term Management Plan (2022-28)

Topics

Supplemental Information

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1 Business Results for 1Q FY12/2023

1. Earnings Forecast for FY12/2023
2. Progress of the Medium-Term Management Plan (2022-28)
3. Topics
4. Supplemental Information

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Business Results for 1Q FY12/2023

Overview of 1Q FY12/2023

Business Environment

Favorable

・Mobility sector: Demand for cloud services designed for DX has been increasing.

・Non-mobilitysector: IT Investment has recovered compared to the early stage of COVID-19 crisis.

Business results Better than expected

・Cloud-based software for mobility sector

Since sales are recorded on a monthly basis, they grew as planned under favorable business environment.

• Revenue of "Cloud service" in 1Q: 935 million yen (YoY +80.9%)

・Adoption rate of 5-yearlump-sum contracts* for cloud-based software for mobility sector

FY2022: 29% ⇒ FY2023 1Q: 48%

• Cash flow from operating activities in 1Q shifted to an upward trend (YoY +109 million yen)

・Packaged software for non-mobility sector

Since sales for 6-year usage rights are recorded in a lump sum, they exceeded the expectation under favorable business environment.

• Revision of packaged system sales forecast for 1H: 5 billion yen (+400 million yen compared to initial forecast)

Progress of Mid-term Management Plan On track

・Performance plan: Performance largely exceeded initial forecast in FY2022.

The Company made a good start in FY2023 and plans to return to profitability in FY2024.

・Initiatives: The Company is promoting penetration of released cloud-based software as planned, while promoting development of the remaining cloud-based software.

* For cloud-based software, even in the case of a 5-yearlump-sum contract, sales are recorded on a monthly basis.

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・The current business environment continued to be favorable against a backdrop of growing interest in DX in the mobility sector and a recovery in demand from the COVID-19 crisis in the non-mobility sector.

・Regarding packaged software for non-mobility sector, the 6-year license fee is recorded as sales in a lump sum, so it largely influences the Company's financial result. As a result, the performance for 1Q exceeded the Company's expectation, and the earnings forecast for 1H FY2023 was revised upward.

・In the 2H FY2023, the Company will continue promoting sales of packaged software to exceed full-year earnings forecast.

・Regarding its medium-term management plan, the Company changed to a monthly subscription-type business model in 2022 (the first year of the plan), and constructed the base for future growth. On top of this, financial result was above the initial forecast.

・In 2023 (the second year of the plan), the Company continues to promote the penetration of cloud-based software, and succeeded in making a good start toward achieving profitability in 2024.

・Along with the penetration of cloud-based software, the number of clients adopting 5-yearlump-sum contracts for cloud-based software increased, so operating cash flow shifted to an upward trend.

Business Results for 1Q FY12/2023

Overview of Consolidated Financial Results

・Revenue increased and loss decreased by capturing demand for cloud services designed for DX, while conducting upfront investment.

(Millions of yen)	FY2023	FY2022	YoY change	YoY ratio
1Q	1Q
Revenue	3,629	3,254	+375	+11.5%
Cloud service	935	517	+418	+80.9%
Packaged system	2,694	2,737	-43	-1.6%
Cost of sales	1,483	1,195	+288	+24.1%
Gross profit	2,146	2,060	+87	+4.2%
SG&A expenses, etc.	2,682	2,797	-115	-4.1%
Operating profit *	-536	-737	+201	-
Profit before tax *	-541	-646	+105	-
Profit attributable to owners of the parent*	-405	-570	+165	-
Basic earnings per share*	-4.58 yen	-6.48 yen	-	-
*minus (-) represents loss

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・Revenue increased by 11.5% year on year to 3,629 million yen.

・Operating loss was 536 million yen, while loss attributable to owners of the parent was 405 million yen, which both improved year on year.