Summary of Financial Statements for the Third Quarter of the Fiscal Year Ending December 31, 2021 [IFRS] (Consolidated)

The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English translation is for your convenience only. If there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

Summary of Financial Statements for the Third Quarter of the

Fiscal Year Ending December 31, 2021 [IFRS] (Consolidated)

		November 8, 2021
Broadleaf Co., Ltd
Stock listing:	Tokyo Stock Exchange 1st Section
Representative:	Kenji Oyama, Representative Director and President
Scheduled Commencement Date of Dividend Payout:	-
Earnings Supplementary Explanatory Documents:	Yes
Earnings Results Briefing:		Yes (For institutional investors and analysts)

(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the First Nine Months of FY2021 (From January 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results (Cumulative)

(Percentage below represents increase (decrease) from the same period of previous year)

		Revenue			Operating profit	Profit before tax			Profit		Profit attributable to	Total comprehensive
							owners of the parent	income
		Millions of		%	Millions of	%	Millions of	%	Millions of		%	Millions of	%	Millions of		%
		yen				yen			yen				yen			yen			yen
3Q FY2021	15,181		-2.3	2,342	-18.2	2,340	-16.9			1,501		-19.5	1,500	-19.6	1,566		-10.1
3Q FY2020	15,544		-7.7	2,864	-19.5	2,815	-20.1			1,866		-19.5	1,867	-19.5	1,741		-21.7
		Basic earnings per share	Diluted earnings per share
						Yen				Yen
3Q FY2021				17.07				16.78
3Q FY2020				21.33				20.98
(2) Consolidated Financial Position
													Equity attributable to owners			Percentage of equity
		Total assets			Total equity				attributable to owners of the
							of the parent
																	parent
				Millions of yen			Millions of yen				Millions of yen						%
End of 3Q FY2021				33,888					25,405						25,405						75.0
End of FY2020				32,274					24,602						24,600						76.2
2. Dividend Status
										Dividend per share
		End of 1Q					Interim			End of 3Q			Year-end			Total
				Yen			Yen					Yen					Yen				Yen
FY2020					-				6.60					-					6.60				13.20
FY2021					-				4.00					-
FY2021 (forecast)																			4.00				8.00

(NOTE) Revisions to the latest announced dividend forecasts: None

3. Consolidated Earnings Forecasts for FY2021 (From January 1, 2021 to December 31, 2021)

(Percentage below represents increase (decrease) from the same period of previous year)

	Revenue		Operating profit	Profit before tax	Profit attributable to	Basic earnings per share
		owners of the parent
	Millions of		%	Millions of	%	Millions of	%	Millions of	%	Yen
	yen		yen	yen	yen
FY2021	20,350		-3.8	2,600	-37.1	2,580	-32.5	1,640	-33.5	18.66

(NOTE)Revisions to the latest announced earnings forecasts: None

* Notes

(1) Changes in significant subsidiaries during the current period (changes in specified subsidiaries with changes in the scope of

consolidation): None
(2) Changes in accounting policies and changes in accounting estimates
1.	Changes in accounting policies required by IFRS: None
2.	Other changes in accounting policies: None
3.	Changes in accounting estimates: None
(3) Number of shares outstanding (common stock)
1.	Number of shares outstanding (including
3Q FY2021	97,896,800	Shares	FY2020	97,896,800 Shares
	treasury shares)
2.	Number of shares of treasury shares
3Q FY2021	9,901,018	Shares	FY2020	10,313,058 Shares
3.	Average number of shares outstanding
3Q FY2021	87,873,220	Shares	3Q FY2020	87,511,414 Shares
	(during the period)
* Summary of financial statements is outside the scope of audit procedures by certified public accountants and audit firm.
* Comments regarding appropriate usage of earnings forecasts, and other special notes

(Notes on forward-looking statements)

The forward-looking statements such as earnings forecasts contained in this document are based on the information currently available to the Company and certain assumptions which are regarded as legitimate. The Company makes no warranty as to the achievability of what is described in the statements. Actual results may differ from these forecasts due to various factors.

(Availability of earnings supplementary explanatory documents and information on earnings results briefings)

The Company plans to hold an earnings results briefing for institutional investors and analysts on November 8, 2021, in the form of a telephone conference. The materials used at the meeting will be posted on its website.

○Table of Contents of Attached Material
1. Qualitative Information on Operating Results, etc. for the First Nine Months Ended September 30, 2021 ............................	2
(1)	Qualitative information on financial results ........................................................................................................................	2
(2)	Qualitative information on financial position ............................................................................... ......................................	3
(3)	Qualitative information on consolidated earnings forecasts ...............................................................................................	3
2. Consolidated Financial Statements and Major Notes ...............................................................................................................	4
(1)	Consolidated statements of financial position ............................................................................................ .........................	4
(2)	Consolidated statements of income ............................................................................................................................. ........	5
(3)	Consolidated statements of comprehensive income ............................................................................................................	6
(4)	Consolidated statements of changes in equity .............................................................................................. .......................	7
(5)	Consolidated statements of cash flows ............................................................................................................................. ...	9
(6)	Notes regarding consolidated financial statements .............................................................................................................	11
	(Notes on going concern) ........................................................................................................................................... .......	11
	(Segment information) ....................................................................................................... ...............................................	11

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1.Qualitative Information on Results for the First Nine Months Ended September 30, 2021

(1) Qualitative information on financial results

During the first nine months of the current fiscal year (from January 1, 2021 to September 30, 2021), even though the situation remained severe due to the impact of COVID-19, the Japanese economy showed signs of recovery partly due to the improvements in overseas economies and influences of various policies including the thorough infection control and promotion of vaccination. However, the situation remains unpredictable due to the impact of future infectious trends on domestic and overseas economies and the need to closely monitor changes in financial and capital markets.

In the information technology services industry to which the Group belongs, corporate investment in DX (Digital Transformation) is expanding toward the realization of "new working styles" which include telework and contactless work, so the DX-related market continues to be favorable. On the other hand, against the backdrop of uncertain economic outlook, there is a cautious stance toward new investments in non-strategic areas, so IT investment demand varies according to the area. In addition, due to the tight supply-demand balance of semiconductors caused by COVID-19 and its impact on the supply chain, supply of some hardware including PCs has become unstable, so the situation needs to be closely monitored.

Under such environment, the Group continues its activities to contribute to the business continuity and business creation of its clients based on the spirit of "Gratitude and Happiness," which is its corporate philosophy. In the first nine months of the current fiscal year, in addition to sales of business software, the Group expanded DX solutions such as groupware to support its clients' DX. The Group also sought to encourage more clients to adopt its business software by transition of business software sales to monthly subscription contracts and improvement of convenience at the time of installation.

The transition to monthly subscription contracts will not only stabilize the Group's revenue but will also provide medium to long term growth. However, the first nine months of the current fiscal year were in the early stages of transition, so it led to a decline in revenue. On the other hand, since the Group strengthened its proposal capabilities to support its clients' DX, DX solution sales and other various monthly sales including network usage fees and support service fees, which are supplementary services for business software, increased. In terms of costs, the Group continued to invest in the development of next-generation business software, and actively conducted online promotions such as webinars.

As a result, in the first nine months of the current fiscal year (from January 1 to September 30, 2021), the Group posted revenue of 15,181 million yen (down 2.3% year-on-year), operating profit of 2,342 million (down 18.2% year-on-year), profit before tax of 2,340 million yen (down 16.9% year-on-year), profit attributable to owners of the parent of 1,500 million yen (down 19.6% year-on-year).

The Group has a single business segment which consists of IT services. A breakdown of revenue by categories is shown in the table below.

			(Millions of yen)
	First nine months of FY2020	First nine months of FY2021
Category	(From January 1, 2020	(From January 1, 2021	YoY ratio
	to September 30, 2020)	to September 30, 2021)
Platform	7,747	8,493	9.6%
Application	7,797	6,687	-14.2%
Total	15,544	15,181	-2.3%

(NOTE) In the first nine months of the current fiscal year, the Group changed revenue categories in order to clarify the progress of its growth strategy in launching the new cloud-based model, ".c Series." Figures for the first nine months of the previous fiscal year have also been recomposed.

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1. Qualitative information on consolidated financial position
2. 1. Analysis of financial condition

(Assets)

Assets at the end of the third quarter of the current fiscal year increased by 1,614 million yen from the end of previous consolidated fiscal year to 33,888 million yen. Current assets increased by 312 million yen to 8,064 million yen, and non- current assets increased by 1,302 million yen to 25,824 million yen. The increase in current assets was mainly due to an increase of operating and other receivables 676 million yen, despite decreases of 203 million yen in cash and cash equivalents and 197 million yen in inventories. The increase in non-current assets was mainly due to an increase of 1,519 million yen in intangible assets.

(Liabilities)

Liabilities at the end of the third quarter of the current fiscal year increased by 811 million yen from the end of previous consolidated fiscal year to 8,483 million yen. Current liabilities increased by 1,045 million yen to 7,478 million yen, while non-current liabilities decreased by 234 million yen to 1,005 million yen. Current liabilities increased mainly due to an increase of 2,394 million yen in short-terminterest-bearing debts, despite decreases of 508 million yen in income taxes payable, 425 million yen in other current liabilities, and 224 million yen in contract liabilities. The decrease in non-current liabilities was mainly due to a decrease of 312 million in long-terminterest-bearing debts, despite an increase of 42 million in other non- current liabilities and 25 million in deferred tax liabilities.

(Equity)

At the end of the third quarter of the current fiscal year, equity increased by 803 million yen from the end of previous consolidated fiscal year to 25,405 million yen. The increase in equity was mainly due to an increase of 578 million yen in retained earnings and a decrease of 118 million yen in treasury shares.

1. Analysis of cash flows
   Cash and cash equivalents ("cash") at the end of the third quarter of the current fiscal year decreased by 203 million yen from

the end of previous consolidated fiscal year period to 3,029 million yen.

The status of each cash flow and its factors in the first nine months of the current fiscal year are as follows.

(Cash flow from operating activities)

Cash from operating activities was 1,413 million yen (down 33.2% year-on-year). This was mainly due to profit before tax of 2,340 million and depreciation and amortization expense of 1,695 million, despite income taxes paid of 1,339 million and an increase of 685 million in operating and other receivables.

(Cash flow from investment activities)

Cash used in investing activities was 2,329 million yen (up 20.1% year-on-year). This was mainly due to acquisition of intangible assets of 2,462 million yen.

(Cash flow from financing activities)

Cash from financing activities was 711 million yen (cash flow used in financing activities was 441 million yen in the same period of the previous fiscal year). This was mainly due to a net increase of 2,401 million yen in short-term loans payable, despite cash dividends paid of 930 million yen and repayments of lease obligations of 670 million yen.

(3) Qualitative information on consolidated earnings forecasts

There is no change in consolidated earnings forecasts from the earnings forecasts announced in the "Notice of Revisions to Consolidated Earnings Forecasts and Dividend Forecasts " on July 28, 2021.

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