Broadleaf : 1Q FY12/2024 Business Results Briefing Material

1Q FY12/2024

Business Results Briefing Material

May 9, 2024

Broadleaf Co., Ltd.

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Table of Content

Business Results for 1Q FY2024

P ３

Earnings forecast for the first half	P11
and full year
Progress of the Medium-Term	P21
Management Plan (2022-28)
Supplement Information	P27

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Business Results for 1Q FY2024

P ３

Earnings forecast for the first half	P11
and full year
Progress of the Medium-Term	P21
Management Plan (2022-28)
Supplement Information	P27

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Information & Consideration

[Basic IR Policy]

If a new risk that causes fluctuations in business results arises, the Company will appropriately disclose the estimated impact on business results.

[Risks and Notes that occurred in the 1Q of the current fiscal year under review]

The sales timing of cloud software for auto parts dealers has been changed from the first half of the initial plan to the third quarter and beyond. The expected impact on business results, which is calculated based on the worst-case scenario (sales commencement at the beginning of 2025) because the start of sales is not yet determined at this time, is included in this document. The Company is implementing measures to avoid fluctuations in business results, but it takes time to rationally calculate the expected effects. Accordingly, the "maximum risk" in this document is a figure that does not take into account the effects of countermeasures.

[Summary]

・1Q results were favorable, 1H forecasts were revised upward, and the probability of achieving the full-year forecasts increased.

・Initiated measures to deal with newly occurring risks, and is currently working to avoid any impact on future results.

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First quarter summary

Business results for 1Q FY2024

・Steady start toward achieving full-year operating profit

・Initiate measures for new risk factors at an early stage to improve the accuracy of plan achievement

Business environment

・Our customers are increasingly interested in DX (Digital Transformation)

・Aggressively reforming businesses for environmental application and diversifying IT requirements

(Response to digital infrastructure, application to supply chain automation, real-time linkage with mission critical systems, etc.)

Priority initiatives

・Cloud penetration: Propose optimal DX to meet the diverse needs of each customer

・Service expansion: Continue additional development aimed at expanding targeted business formats and functions for cloud software

Positive Business Results

・The accumulation of monthly subscription products was in line with expectations, Packaged system settled in excess of expectations

• Increased sales forecast for the 1H by 150 million yen

・Improving Operational Efficiency and Restrain Cost Increases

• Reduced total cost forecast for the 1H by 100 million yen

※Results of the above 2 points

・Upward revision of 1H operating income forecast by

250 million yen

New Risks

・Postpone sales of cloud software for parts merchants

• Risk of up to 150 million yen in sales in the 2H

・Raising costs for IT infrastructure, etc. are rising more than expected

• Total costs in 2H exceed previous forecast by 100 million yen

※Results of the above 2 points

・Revised down 2H operating income forecast by 250 million yen Suppl.) Delay in sales of cloud software for auto parts dealers, Risk

of up to 400 million yen to operating income for the coming

year*

(Decrease in revenues: ¥350 million+Increase in costs: ¥50 million)

*Estimated value when countermeasures are not implemented	5
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Summary of first quarter results

Business results for 1Q FY2024

・Continued double-digit revenue growth as software users increasingly switch to monthly subscriptions

・Promoted measures to improve operational efficiency and absorbed cost increase factors, resulting in significant improvement in profit and loss

（Millions of yen）	FY2024	FY2023	Y o Y change	Y o Y ratio
1Q	1Q
Revenue	4,014	3,629	＋384	+10.6%
Cost of sales	1,409	1,483	-75	-5.0%
Gross profit	2,605	2,146	＋459	＋21.4%
SG&A expenses, etc.	2,715	2,682	＋33	＋1.2%
Operating profit*	-109	-536	＋426	-
Profit before tax*	-42	-541	＋499	-
Profit attributable to owners of the	-35	-405	＋370	-
parent*
Basic earnings per share*	-0.39 yen	-4.58 yen	-	-

* Minus(-) shown loss

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Revenue by service category

Business results for 1Q FY2024

・The increase in software service revenue exceeded the decrease in operation and support service revenue due to the shift to monthly subscriptions

（Millions of yen）	FY2024	FY2023	Y o Y change	Y o Y ratio
1Q	1Q
Cloud service	1,676	935	+741	+79.3%
Software service	1,529	775	+753	+97.2%
Marketplace	148	160	-12	-7.6%
Package system	2,337	2,694	-357	-13.2%
software sales	619	754	-135	-17.9%
Operation and support service	1,719	1,941	-222	-11.4%
Total	4,014	3,629	+384	+10.6%
Recurring revenue*	3,395	2,876	+519	+18.1%
Recurring revenue ratio	85％	79%	-	-

* Total of Cloud service and Operation and support

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Business results for 1Q FY2024

Factors behind changes in Operating profit Y to Y

・While fixed costs are on the rise, the Company is promoting variable cost optimization and consumption control

		Operating loss			Cost of sales
（Millions of yen）		＋：Profit increase factors	・ Decrease in development costs to
			ー：Profit decrease factors	expand cloud service menu
			Increase in IT		・ Increase in amortization expenses
				due to expansion of the scope of
	Decrease in	Decrease in	infrastructure
		functions provided by cloud services
	procurement
FY2023	cost of	operating
cost	FY2024
production	cost	・ Increase in cost of services
1Q	+43	-40	1Q
	+139

Increase in		Increase in
revenue	Increase in		SG&A expenses, etc.
+384	amortization	personnel	-109
	expense of	expenses	Others
	cloud	-24	・ Decrease in operating-related
		-39
	software			expenses such as transportation
	-40			expenses
				・ Increase in personnel costs due to
				increase in personnel, etc

・ Increase in IT infrastructure

-536procurement costs for providing cloud services

・ Increase in administrative outsourcing costs, etc

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Business results for 1Q FY2024

Balance sheet status

・Cash and cash equivalents increased due to increases in borrowings and contract liabilities, etc.

・Intangible assets increased due to continued investment in cloud service development

（Millions of yen）	FY2024	FY2023	Y o Y change	Major breakdown of
End of 1Q	Year-end	increase/decrease
Current assets	8,450	7,053	＋1,397	Cash and cash equivalent
				＋1,310
Non-current assets	30,156	29,696	＋460	Intangible assets+596
Total assets	38,606	36,750	＋1,857
Current liabilities	10,228	11,079	-851	Short-terminterest-bearing
debt -1,062
				Contract liabilities ＋596
Non-current liabilities	5,845	3,184	＋2,661	long-terminterest-bearing
				debt +2,669
Total liabilities	16,073	14,263	＋1,810
Total equity	22,533	22,487	＋47	Dividend payout -91
Total liabilities and equity	38,606	36,750	＋1,857

Supplement)

This is mainly due to advances received under a 5-year package (5-yearlump-sum payment) cloud software contract for contracted debt. Sales are booked on a pro rata basis over the period. Accordingly, an increase in contractual liabilities is a positive indicator of cash flow. Furthermore, it has the effect of suppressing the "ease of cancellation", which is the weak point of monthly subscriptions. And it also helps improve customer retention.

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Business results for 1Q FY2024

Cash flows status

・Operating cash flow increased due to increased revenue due to stock sales and decreased purchasing amount.

（百万円）	FY2024	FY2023	Y o Y	Major breakdown of
1Q	1Q	change	increase/decrease
				Improvement in loss before-tax＋499
Cash flow from operating activities	806	136	＋670	Decrease in operating and other payable
				-218
				Increase in contract liabilities +159
				Increase in payments for acquisition
Cash flow from investment activities	-889	-854	-35	of intangible assets -258
				Proceeds from sales and redemptions
				of investments ＋331
Cash flow from financing activities	1,391	561	＋829	Decrease in short-term debts -3,820
				Proceeds from long-term +4,700
Free Cash flow	-83	-718	＋635

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