ブロードリーフ（3673） – [Delayed] 1Q FY12/2022 Business Results Briefing Material

Becoming the TopSaaS company in Japan1Q FY12/2022 Business Results Briefing MaterialBroadleaf Co., Ltd (3673)May 11, 2022Copyright©2022 Broadleaf Co.,Ltd. All rights reserved.Contents1234Outline of the Mid-Term Management Plan (2022-2028)Overview of 1Q FY12/2022 Business ResultsResults Forecasts for FY12/2022Supplemental InformationCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |21Outline of the Mid-Term Management Plan (2022-2028)Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |3Performance Plan for the Mid-Term Management Plan (2022-2028)Outline of the Mid-Term Management Plan (2022-2028)The Company views record-high performance in 2026 as a milestone. Transition to recurring revenue will progress and revenue will continue to grow.The Company aims to achieve operating margin of 40% and profit of 8 billion yen in 2028.(Billions of yen)FY2022FY2023FY2024FY2025FY2026FY2027FY2028Revenue12.314.718.522.025.529.032.5Operating profit-4.8-2.71.03.36.710.013.0Operating margin–5%15%25%34%40%-5.0-2.90.62.04.26.38.0Profit attributableTo owners of the parentEquity attributable toowners of the parentPercentage of equity attributable toowners of the parent20.017.518.060%50%52%Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |4Revenue Plan by Service CategoriesOutline of the Mid-Term Management Plan (2022-2028)The Company plans to grow the new cloud services while shrinking packaged systems.Out of cloud service, software service is expected to drive the revenue growth.(Billions of yen)FY2022FY2023FY2024FY2025FY2026FY2027FY2028Cloud service10.415.219.925.029.1Software serviceMarketplacePackaged systemSoftware saleOperation and supportTotal2.61.90.79.73.26.55.95.00.98.82.86.09.01.48.13.05.213.618.022.125.01.66.83.03.81.95.52.92.72.94.02.51.54.13.42.21.212.314.718.522.025.529.032.5Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |5Positioning as a SaaS companyOutline of the Mid-Term Management Plan (2022-2028)The Company will become the top SaaS company in Japan.SecuritiesCodeCompany NameMarket capitalization(Millions of yen)Revenue(Millions of yen)Revenuegrowth rate4443Sansan, Inc.139,55316,18421.1%3994Money Forward, Inc.192,97015,63238.1%3923RAKUS Co., Ltd.237,57415,38732.6%4478freee K.K178,94310,25848.8%2492Infomart Corporation130,4949,83512.1%The Company’s revenue of software service in 202618,000 million yenNOTE) Major SaaS providing companies that the Company refer to (made by the Company)Calculation of market capitalization is based on closing price on May 9, 2022, revenue is based on the most recent fiscal year, and growth rate is compared to the previous fiscal year.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |6Growth StrategyOutline of the Mid-Term Management Plan (2022-2028)The Company will switch existing users whose contract of “.NS Series,” a packaged software, has expired, to “.c Series,” a cloud-based software service, in order.Measures (1)Switch existing users (33,000 companies) to “.c Series”The Company will switch users of “.NS Series,” to “.c Series” during 2022-2028, in line with their expiration date.CloudpenetrationMeasures (2)Acquire new usersIn addition to acquiring users from other companies, the Company will become active in providing the products to service stations and car dealers.Expansionof servicesMeasures (3)Increase the number of companies using marketplace-based servicesThe Company will increase the use rate of ordering platform for auto repair parts.It will also increase the number of companies participating in the auto finance platform.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |7KPIOutline of the Mid-Term Management Plan (2022-2028)The Company established indicators that measure the penetration of “.c Series,” which is the core of software service sales.Cloud installation status＝ Cloud conversion rate（Number of user-companies of cloud-based software ÷ Total number of user-companies*）End of 2024Cloud conversion rate40%Cloud penetrationSales of standard version of “.c Series,” a cloud-based software service **= Number of licenses × Average monthly license fee × (1 – Churn rate)Number of licenses 24,000 licensesEnd of 2024Average monthly license fee 23,000 yen/monthChurn rateLess than 1% (per year)* Four industries (auto maintenance shops , auto repair shops, auto parts dealers, and recycling shops) are included.** Sales of products for specific major companies and service stations are excluded.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |8Progress (end of 1Q FY2022)Outline of the Mid-Term Management Plan (2022-2028)Cloud penetration has progressed as planned.Acquisition of new users has progressed ahead of the plan.Cloud installation status 【Progressed as planned】End of 1Q FY2022DescriptionCloud conversionrate1.2%・Switching of existing users began in earnest in the second half of March・Switching has a seasonal factor because it is linked to the number of contracts 6 years ago (many deals are in June and December)Sales of the standard version of “.c Series” 【Progressed as planned】Number of licensesEnd of 1Q FY2022307 licensesExisting users 136 / New users 171Description・Number of licenses acquired from new users has exceeded the plan.・Regarding existing users, it has been installed from small users as planned.16,131yen/monthExisting 18,588yen/monthNew 14,830yen/monthAverage monthly license fee ・There is greater demand than anticipated for new users with a small business scale, which lead to and increase in installation of low-priced licenses.Sales of “.c Series” for specific major clients 【Progressed as planned】・Prior installation started from 2020, which completed in 2021 as planned.・Other deals are also planned to be installed in order.NOTE）Churn rate is not disclosed at the timing due to insufficient number of data for calculation.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |92Overview of 1Q FY12/2022 Business ResultsCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |10SummaryOverview of FY12/2022 1Q Business ResultsEven though actual business status is good, business results declined year-on-year sincethe Company mainly sold “.c Series,” a cloud-based software service, which is recorded as monthly sales.”.c Series” is highly evaluated in the market, and the pace of acquisition of new users is faster than expected. Existing users are also switching to “.c Series” at an expected rate, so the actual business status is favorable.Actual business statusBusiness resultsRevenue decreased year-on-year.From 2022, the Company limited the sales of “.NS Series,” a packaged system with multi-year lump-sum sales, to particular industries that do not have a lineup of “.c Series,” a cloud-based software service.Despite a decrease in SG & A and other expenses as a result of cost reductions, profit decreased year-on-year since it was not enough to offset the impact of the decrease in sales due to the cost structure ofhigh fixed cost ratio.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |11Overview of Consolidated Business ResultsOverview of FY12/2022 1Q Business ResultsSales decreased since the Company started provision of “.c Series,” a cloud-basedsoftware service, which is recorded as monthly sales.FY20221QFY20211QYoY change(Millions of yen)RevenueCost of salesGross profitSG&A expenses, etc.Operating profit (loss)Profit (loss) before tax3,2541,1952,0602,797-737-646-5705,1951,5303,6652,993672669426-1,941-335-1,605-197-1,409-1,315-996-Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |12Profit (loss) attributable to owners of the parentBasic earnings (losses) per share-6.48 yen4.86 yenRevenues by Service CategoriesOverview of FY12/2022 1Q Business ResultsRegarding cloud service, recurring revenue increased due to acquisition of users and switching to “.c Series.” Meanwhile, revenue of packaged system declined since theCompany limited the sale to certain clients.(Millions of yen)Cloud serviceSoftware serviceFY20221QFY20211QYoY changeFactors of increase/decrease417+100517347247+100software service・Increase in the number of licenses of Marketplace170170・Increase in the number of users・Decrease in transaction volume of -0recycled parts marketPackaged system2,7374,778-2,040Software sale8872,968-2,081・Limited sale of “.NS Series,” a packaged software, to certain industriesOperation and support1,8501,809+41 ・Increase in the number of “.NS Series” usersTotal3,2545,195-1,941Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |13Factors Behind Changes in Operating ProfitOverview of FY12/2022 1Q Business ResultsEven though the Company reduced SG&A expenses, etc., operating profit decreased due to the significant negative impact of decrease in sales.Decrease in cost of sales +335Decrease in personnel expenses +77Others +92Decrease in advertising expenses +46Increase in update cost for service infrastructure-18Increase in amortization expenses of cloud services-80672FY20221Q(Millions of yen)Cost of sales・Increase in amortization expensesof cloud services in association with the release of cloud services・Decrease in purchase of devicesFY20221QSG&A expenses, etc.・Personnel expensesReduction in legal welfare expenses which temporarilyocurred in FY2021・Advertising expensesStopped participating in large-scale exhibitions-737Decrease in sales-1,941Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |14Balance Sheet StatusOverview of FY12/2022 1Q Business ResultsCurrent assets decreased due to limited sale of “.NS Series” by lease contracts, which is recorded as multi-year lump-sum sales. Despite dividend payout and booking of loss, there is no shortage in equity capital.(Millions of yen)YoY changeFactors of increase/decreaseFY20221QFY2021Year-endCurrent assets6,3628,405-2,043Cash and cash equivalents -164Operating and other receivables -1,882Non-current assets26,49126,071+419Intangible assets +409Total assets32,85334,476-1,623Current liabilities6,9447,512-568Operating and other payables -1,007Short-term interest-bearing debts +1,188Non-current liabilities723850-127 Long-term interest-bearing debts -38Total liabilities7,6678,362Total equity25,18626,114-695-928Dividend payout -414Loss -570Total liabilities and equity32,85334,476-1,623Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |153Results Forecasts for FY12/2022Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |16Consolidated Results Forecasts（Compared to Beginning of the Term）Results Forecasts for FY12/2022In light of progress up to 1Q, the Company updated full-year forecast for cost of sales and SG&A expenses, etc. It also updated 1H forecast since part of lump-sum sales was recorded ahead of plan.(Millions of yen)RevenueCost of salesGross profitFY2022Full-year ForecastAfter revisionBeginning of the term12,30012,3005,2007,1005,5006,800FY20221H ForecastDifferenceDifferenceAfter revisionBeginning of the term6,0002,3003,7005,8005,8002,6003,2005,800+200-300+500-+500+600-300+300+300—–SG&A expenses, etc.11,90011,600Operating profit (loss)-4,800-4,800-2,100-2,600Profit (loss) before tax-4,800-4,800-2,000-2,600Profit (loss) attributable to owners of the parentBasic earnings (losses) per share-5,000-5,000-2,100-2,700+600-56.62 yen-56.62 yen-23.80 yen-30.60 yenCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |-17Consolidated Results Forecasts (YoY)Results Forecasts for FY12/2022Revenue will decrease since the Company will continue switching to “.c Series,” a cloud-based software service, which is recorded as monthly sales.(Millions of yen)RevenueCost of salesGross profitFY2022Full-year forecastFY2021Full-yearYoY changeFY20221H ForecastFY20211HYoY change12,30020,652-8,3525,2007,1005,753-55314,898-7,7986,0002,3003,7005,8009,9372,8677,0705,827-3,937-567-3,370-27SG&A expenses, etc.11,90011,503+397Operating profit (loss)-4,8003,395-8,195-2,1001,243-3,343Profit (loss) before tax-4,8003,233-8,033-2,0001,239-3,239Profit (loss) attributable to owners of the parentBasic earnings (losses) per share-5,0002,173-7,173-2,100795-2,895-56.62 yen24.72 yen–23.80 yen9.05 yen-Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |181H Revenue Forecast by Service Categories (Compared to Beginning of the Term)Results Forecasts for FY12/20221H forecast for packaged system has been updated since the software sale progressed ahead of the plan. No change to the full-year forecast.FY2022 1H ForecastAfter revisionBeginning of the termDifference(Millions of yen)Cloud serviceSoftware serviceMarketplacePackaged systemSoftware saleOperation and supportTotal1,0507103404,9501,3303,6206,0001,0507103404,7501,1303,6205,800—-+200+200+200Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |19Revenue Forecast by Service Categories (YoY)Results Forecasts for FY12/2022Revenue growth will accelerate in the second half of FY12/2022 since the monthly sales will grow steadily as the number of orders increase in the second half of the fiscal year.(Millions of yen)FY2022Full-year forecastFY2021Full-yearYoY changeFY20221H ForecastFY20211HYoY changeCloud service2,5701,791+7791,050847+203Software service1,8601,090+770503+207Marketplace710701+9345-5710340Packaged system 9,73018,860-9,1304,9509,090-4,140Software sale2,50011,620-9,1201,3305,486-4,156Operation and support7,2307,240-103,6203,604+16Total12,30020,652-8,3526,0009,937-3,937Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |20Factors Behind Changes in Operating ProfitResults Forecasts for FY12/2022Decrease in cost of sales will be limited due to increase in amortization expenses of cloud services.Decrease in cost of sales +553Increase in personnel expenses +1083,395Increase in update cost for service infrastructure-104Increase in advertising expenses -67Others -333(Millions of yen)Increase in amortization expenses of cloud services-362FY2021FY2022ForecastSG&A expenses, etc.Cost of sales・Increase in amortization expensesof cloud services in association with the release of cloud services・Decrease in purchase of devices・Update of service infrastructureStrengthening and expansion ofoperational infrastructure for the cloud-based software, etc.・Personnel expensesDecrease in legal welfare expenses which temporarilyoccurred in FY2021Decrease in sales-8,352-4,800Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |21Dividend ForecastResults Forecasts for FY12/2022In light of the progress of the mid-term management plan and the status of retainedearnings, the Company plans to announce forecasts when it becomes possible to make reasonable calculations.Dividends per share(Yen)FY2022FY2021Interim dividendUndecidedYear-end dividendUndecidedAnnual dividendUndecided4.004.708.70Consolidateddividend payout ratio-35.2%Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |224Supplemental InformationCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |23Description of Revenue by Service CategoriesSupplemental InformationCategoryDescriptionSoftware service・”.c Series,” a cloud-base software service ・Software services with subscription contracts, etc.Marketplace・Ordering platform for auto repair parts, etc.Cloud servicePackaged systemSoftware sale・Sale of “.NS Series,” a packaged system, with lease contracts・Sale of “OTRS,” a work analysis software Operation and support・Ancillary services of “.NS Series”Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |24Revenue by Service Categories (2021)Supplemental Information(Millions of yen)Cloud serviceSoftware serviceMarketplaceFY20211QFY20211HFY2021Cumulative 3QFY2021Full-year4172471708475033451,3021,7917785241,090701Package system sale4,7789,09013,87918,860Software sale2,9685,4868,45811,620Operation and support1,8093,6045,4207,240Total5,1959,93715,18120,652Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |25Fee System (Cloud-based Software Service)Supplemental InformationCompany license fee+Essential for each companyBasic (Company)Job license fee(role license)Add licenses fornecessary job functionsEmployee ID feeAllocated to each employeeIDIDIDIDIDIDManagementMechanicsFront desk・・Support service fee+Data usage feeOption usage feeSlips issuance (based on the number of slips) and other feesCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |26Company ProfileSupplemental InformationCompany nameBroadleaf Co., LtdRepresentativeKenji Oyama, Representative Director and PresidentListed onSectorListed on Prime Market of Tokyo Stock Exchange (3673) Information and telecommunicationFounded/EstablishedDecember 2005/September 2009Capital stockFiscal yearBusiness outline7.148 billion yen (consolidated)From January 1 to December 31Using proprietary “Broadleaf Cloud Platform” as its infrastructure, the Companyprovides SaaS cloud services, marketplace-type services, and partner programs that enable functional and service collaboration with various players. These services are utilized as IT solutions that lead environmental changes, which are occurring in various industries including mobility industry, to business opportunities.Head office locationFloor 8, Glasscube Shinagawa, 4-13-14 Higashi-Shinagawa, Shinagawa-ku, Tokyo Domestic offices28 business offices and 3 development centers in JapanMajor subsidiariesTajima Inc.Copyright©2022 Broadleaf Co.,Ltd. All rights reserved. |27DisclaimerThe results forecasts and forward-looking statements contained in this document are forecasts made by the Company based on information available at the time of preparation of the document, so they include potential risks and uncertainties.Therefore, please be aware that actual results may differ from these forecasts due to various factors.Contact InformationBroadleaf Co., LtdCorporate Communications DeparmtnentE-mail: bl-ir@broadleaf.co.jpCopyright©2022 Broadleaf Co.,Ltd. All rights reserved. |28