Summary of Financial Statements for the First Quarter of theYear Ending December 31, 2018 (J-GAAP) (Consolidated）
May 14, 2018
Stock Exchange: Tokyo Stock Exchange
Company Name: Segue Group Co., Ltd.
Code Number:3968
URL: http://segue-g.jp/
Representative: Yasuyuki Aisu, President and CEO
Contact:
Yasuhiro Fukuda, Director, Manager of Administration Department
Tel.: +81-3-6228-3822
Scheduled date of filing quarterly securities report: May 14, 2018
Scheduled date of dividend payment: ―Explanatory documents supplement to the abridged quarterly financial statements: NoneBriefing for summary of quarterly financial results: None
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Year Ending December 31, 2018(from January 1, 2018, to March 31, 2018)(Percentages indicate year-over-year changes)(1) Consolidated Results of Operations (for three months)
Net sales

Operating income

million yen%million yen%million yen

Q1 FY 2018
2,772
25.5
288
9.6
2,209263
Q1 FY 2017――
Note: Comprehensive income (million yen) Q1 FY 2018: 173 (-3.3%)
Net income per share

Profit attributable toowners of parent

Ordinary income%million yen

298
10.3
270―
Q1 FY 2017: 179 (― %)

211
193%

8.9―

Diluted net income per shareYenYen

Q1 FY 2018
37.21
36.05
35.07
33.13
Q1 FY 2017
Notes: 1. Because the Company did not prepare quarterly consolidated financial statements for the first quarter of FY 2016,
comparisons of changes in earnings with the first quarter of FY 2017 are not presented.
2. Basic earnings per share and diluted earnings per share for the quarter have been calculated taking into account acommon stock split executed at the ratio of two shares for one on April 1, 2017, and a common stock split executedat the ratio of two shares for one on October 1, 2017. For the purposes of the said calculations, all stock splits
mentioned are assumed to have occurred at the beginning of the fiscal year ended December 31, 2017.
(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

million yen

million yen%

Q1 FY 2018
5,422
FY 2017
5,154
Reference: Shareholders' equity (million yen)

2,498
2,320

46.1
45.0Q1 FY 2018: 2,498

FY 2017: 2,320

2. Dividends
Annual dividends
End of Q1

End of Q2
Yen

End of Q3
Yen―
FY 2017
0.00―
FY 2018
FY 2018 (forecast)
0.00
Note: Revision of the latest published dividend forecast: None―

End of fiscal year

Yen―

TotalYen

Yen

0.00

0.00

0.00

0.00

3. Forecast for the Year Ending December 31, 2018 (from January 1, 2018, to December 31, 2018)(Percentages indicate year-over-year changes)

Net sales
Full year

million yen

Operating income% million yen

Ordinary income% million yen8,4368.3458
19.9Note: Revision of the latest published earnings forecast: None459

Profit attributable toowners of parent% million yen

4.9362

Net income pershare%Yen

13.563.90

* Explanatory notes(1) Changes in major subsidiaries during the fiscal quarter(changes in specified subsidiaries in conjunction with change in the scope of consolidation): None
(2) Application of accounting procedures specific to creation of quarterly consolidated financial statements: None
(3) Change of accounting policies; change or restatement of accounting estimates(i) Change of accounting policies caused by revision of accounting standards : None(ii) Change of accounting policies other than stated in (i): None(iii) Change of accounting estimates(iv) Restatement: None: None(4) Issued shares (common stock)(i) Number of issued shares at end of period
Q1 FY 2018
5,680,000 shares FY 2017
5,668,800 shares(including treasury shares)
Q1 FY 201841 shares FY 2017
- shares(ii) Number of Treasury shares at end of period
Q1 FY 2018
5,675,059 shares Q1 FY 2017
5,529,500 shares(iii) Average number of shares outstanding during the period(cumulative quarterly statistics)
Notes: The number of common shares issued and outstanding has been calculated taking into account a common stock split
executed at the ratio of two shares for one on April 1, 2017, and a common stock split executed at the ratio of two sharesfor one on October 1, 2017. For the purposes of the said calculations, all stock splits mentioned are assumed to haveoccurred at the beginning of the fiscal year ended December 31, 2017.

* Quarterly summary of financial statements is outside the scope of the quarterly review by certified public accountant
or audit firm.
* Explanation and other explanatory notes regarding the appropriate use of financial forecasts- These materials contain forward-looking statements including forecasts of the Company’s business performance, which are based on certain
assumptions made in accordance with information currently available and judged to be reasonable and are not intended as a guarantee that the Company
will achieve these targets. In addition, actual results may differ materially from these forecasts as a result of various factors, including actual businessperformance. For explanatory notes on the assumptions for these forecasts and the use of the financial forecasts, please refer to "1. QualitativeInformation Concerning the Account Closing for the Period under Review (3) Explanatory information concerning future estimates including
consolidated financial results projections" on page 1 of the attached materials.

Segue Group Co. Ltd. (3968) Summary of Financial Statements
for the First Quarter of the Year Ending December 31, 2018

1. Qualitative Information Concerning the Account Closing for the Period under Review(1) Explanatory information concerning business results
The Japanese economy in the period under review has proceeded on a moderate recovery track amid continuing
improvements in corporate earnings and employment. The recovery trend has been holding up also in the global economy
despite remaining risks mainly in the geopolitical sphere.
In the IT industry of the Group, new technologies such as AI and IoT are increasingly taking center stage and theinvestment inclination toward IT overall continues. In security reinforcement measures, we expect the importance ofinvestments addressing not only external threats such as increasingly diverse and complex cyber attacks but also internal
threats relating to access control and vulnerability management to detect abnormalities to increase, due in part to therevision of the Cybersecurity Management Guidelines in November 2017.
Under this environment, the Group expanded sales of products, services and solutions that combine products and services
as we did the previous year through aggressive sales activities. We have also landed large-scale projects and continue to
steadily increase sales of maintenance services. At the same time, personnel expenses have increased as a result ofaggressive hiring.
As a result of the above, net sales in the Solutions Products Business during the period under review increased by 214,414
thousand yen (16.6%) year-over-year to 1,507,695 thousand yen, and in the Solutions Services Business they increased by
348,906 thousand yen (38.1%) to 1,264,782 thousand yen. Consolidated sales thus grew by 563,320 thousand yen (25.5%)
overall to 2,772,478 thousand yen.
Meanwhile, operating income increased by 25,394 thousand yen (9.6%) year-over-year to 288,736 thousand yen, ordinary
income increased by 27,745 thousand yen (10.3%) to 298,334 thousand yen, and net income attributable to shareholders of
the parent company increased by 17,257 thousand yen (8.9%) to 211,150 thousand yen.

(2) Explanatory information concerning financial position[Assets]
Total assets at the end of the period under review came to 5,422,095 thousand yen, an increase of 268,074 thousand yen
from the previous fiscal year. Current assets were 4,323,651 thousand yen, an increase of 244,694 thousand yen from theprevious fiscal year. Non-current assets were 1,098,444 thousand yen, an increase of 23,379 thousand yen from theprevious fiscal year.
The main factor behind the rise in current assets was an increase in cash and deposits and accounts receivable - other. Themain factor behind the rise in non-current assets was an increase in tools, furniture and fixtures.
[Liabilities]
Total liabilities at the end of the period under review came to 2,923,174 thousand yen, an increase of 89,876 thousand yen
from the previous fiscal year. Current liabilities were 2,620,399 thousand yen, an increase of 100,122 thousand yen fromthe previous fiscal year. Non-current liabilities were 302,775 thousand yen, a decrease of 10,245 thousand yen from theprevious fiscal year.
The main factor behind the rise in current liabilities was an increase in advances received. The main factor behind the fallin non-current liabilities was a decrease in deferred tax liabilities.
[Net assets]
Net assets at the end of the period under review came to 2,498,921 thousand yen, an increase of 178,197 thousand yen fromthe previous fiscal year. The main factors behind this result were increases in retained earnings.

(3) Explanatory information concerning future estimates including consolidated financial results projections
At this time, there are no changes to the full-year financial forecasts published on February 13, 2018. If any revisions are
deemed necessary in the future, they will be disclosed immediately.

-1-

Segue Group Co. Ltd. (3968) Summary of Financial Statements
for the First Quarter of the Year Ending December 31, 2018

1. Consolidated financial statements and major explanatory notes(1) Consolidated balance sheets(units: 1,000 yen)
FY 2017(as of December 31, 2017)
AssetsCurrent assets
Cash and deposits

Q1 FY 2018(as of March 31, 2018)

1,469,381

1,614,308

1,102,032
14,416

1,214,835
26,910

Securities
Inventories

99,990768,834―
454,267

Advance payments - trade
Accounts receivable - other317,612
225,939424,885
463,597

Deferred tax assets
Other

22,60558,286

36,66588,306

Notes and accounts receivable - trade
Electronically recorded monetary claims - operating

Allowance for doubtful accounts

-143

-126

4,078,956

4,323,651

39,244

39,244

Accumulated depreciation-26,138-26,585

Buildings and structures, net
Tools, furniture and fixtures
Accumulated depreciation

13,105
748,421-596,381

12,658811,854-612,216

152,040

199,637639
5,170-5,117639
1,100-1,061

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Total property, plant and equipment
Intangible assets
Goodwill

52

39

165,838

212,975

6,700

4,050

27,91751,73834,61855,788705,105

661,847

Long-term guarantee deposits
Deferred tax assets

77,118
10,42976,842
11,064

Insurance funds
Other64,924
17,031

63,284
16,640Total investments and other assets

874,608

829,679

1,075,065
5,154,021

1,098,444
5,422,095

Other
Total intangible assets
Investments and other assets
Investment securities

Total non-current assets
Total assets-2-Segue Group Co. Ltd. (3968) Summary of Financial Statements
for the First Quarter of the Year Ending December 31, 2018

(units: 1,000 yen)
FY 2017(as of December 31, 2017)

Q1 FY 2018(as of March 31, 2018)

Liabilities
Current liabilities
Accounts payable - trade
Current portion of bonds

856,368
20,000851,780―

Current portion of long-term loans payable
Lease obligations

38,732
55

17,481
13

Accounts payable - otherAccrued expenses

103,942
128,417

68,342
128,512

Income taxes payable
Accrued consumption taxes

105,958
64,249117,124
58,495―
1,110,251

54,8401,259,717

92,30264,0912,520,277

2,620,399

114,549

100,507

131,873
66,598135,669
66,598Provision for bonuses
Advances received
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Net defined benefit liability
Long-term accounts payable - other

313,020

302,775

Total liabilities
Net assets
Shareholders' equity

2,833,298

2,923,174

Capital stock
Capital surplus

498,306
270,806

500,619
273,119

Retained earnings
Treasury shares

1,142,981―

1,354,131-79

1,912,094

2,127,791

421,293-12,663408,629
2,320,723

390,773-19,643
371,1292,498,921

5,154,021

5,422,095

Total non-current liabilities

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Deferred gains or losses on hedges
Accumulated other comprehensive income
Total net assets
Total liabilities and net assets-3-Segue Group Co. Ltd. (3968) Summary of Financial Statements
for the First Quarter of the Year Ending December 31, 2018

(2) Consolidated statements of income and comprehensive income
Consolidated statement of income
First quarter

Net sales
Cost of sales

FY 2017 (from January 1,2017, to December 31, 2017)
2,209,157
1,596,016(units: 1,000 yen)
FY 2018 (from January 1,
2018, to December 31, 2018)
2,772,478
2,091,086

Gross margin on sales

613,141

Selling, general and administrative expenses
Operating income

349,798
263,342

681,392
392,655
288,736

Non-operating income
Interest and dividend income

6371

Foreign exchange gains
Surrender value of insurance

3,091
3,817

―
12,087

Other

1,450

394

Total non-operating income
Non-operating expenses
Interest expenses

8,423

12,554874

119

Foreign exchange losses
Other―
302
1,177
270,588

2,676
160
2,957
298,334―

9,198

Total extraordinary income
Profit before income taxes―
270,588

9,198
307,533

Income taxes - current
Income taxes - deferred

87,930109,467

Total income taxes
Profit-11,233
76,696
193,892-13,084
96,383
211,150

Profit attributable to non-controlling interests
Profit attributable to owners of parent―
193,892―
211,150

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities-4-Segue Group Co. Ltd. (3968) Summary of Financial Statements
for the First Quarter of the Year Ending December 31, 2018

Consolidated statement of comprehensive income
First quarterProfitOther comprehensive income(units: 1,000 yen)
FY 2017 (from January 1,2017, to December 31, 2017)
193,892

FY 2018 (from January 1,2018, to December 31, 2018)
211,150

Valuation difference on available-for-sale securities

383-30,519

Deferred gains or losses on hedges-14,754-6,979

Accumulated other comprehensive income-14,370
179,521-37,499
173,650

179,521―

173,650―

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income related to non-controlling interests-5-