Summary of Financial Statements for the Second Quarter of theYear Ending December 31, 2018 (J-GAAP) (Consolidated）
August 13, 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: August 13, 2018
Scheduled date of dividend payment: ―Explanatory documents supplement to the abridged quarterly financial statements: YesBriefing for summary of quarterly financial results: Yes (for institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of the Year Ending December 31, 2018(from January 1, 2018, to June 30, 2018)(1) Consolidated Results of Operations (for six months)(Percentages indicate year-over-year changes)
Net sales

Operating income

million yen%million yen%million yen

Q2 FY 2018
4,493
20.1
288
-1.9
3,740
294
Q2 FY 2017――
Note: Comprehensive income (million yen) Q2 FY 2018: 163 (-20.8%)
Net income per share
Yen

Profit attributable toowners of parent

Ordinary income%million yen

294-3.4304―
Q2 FY 2017: 206 (― %)

246
214%

14.8―

Diluted net income per shareYen

Q2 FY 2018
43.46
42.15
38.78
36.70
Q2 FY 2017
Notes: 1. Because the Company did not prepare quarterly consolidated financial statements for the second quarter of FY
2016, comparisons of changes in earnings with the second 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

Q2 FY 2018
5,495
FY 2017
5,154
Reference: Shareholders' equity (million yen)million yen%

2,490
2,320

45.3
45.0

Q2 FY 2018: 2,490

FY 2017: 2,320

2. Dividends
Annual dividends
End of Q1

End of Q2
Yen

End of fiscal year

End of Q3
Yen―
FY 20170.00
0.00―
FY 2018
FY 2018 (forecast)
Note: Revision of the latest published dividend forecast: None

―

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 yen

8,436
8.345819.9
Note: Revision of the latest published earnings forecast: None

459

Profit attributable toowners of parent% million yen

4.9362

Net income pershare%

Yen

13.5

63.90

* Explanatory notes(1) Changes in major subsidiaries during the fiscal quarter(changes in specified subsidiaries in conjunction with change in the scope of consolidation): Yes
One new company (company name) Falcon System Consulting Co., Ltd.

(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)(iii) Change of accounting estimates(iv) Restatement: None: None: None(4) Issued shares (common stock)(i) Number of issued shares at end of period
Q2 FY 2018
5,690,000 shares FY 2017
5,668,800 shares(including treasury shares)
Q2 FY 201841 shares
FY 2017- shares(ii) Number of Treasury shares at end of period
Q2 FY 2018
5,679,359 shares Q2 FY 2017
5,542,500 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. Qualitative
Information 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.
- The Company plans to hold a results briefing for institutional investors and analysts on August 22, 2018. The materials distributed at the resultsmeeting are scheduled to be posted on the Company's website promptly after the meeting.

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 such as US policy actions and risks in the geopolitical sphere.
In the IT industry of the Group, new technologies such as AI and IoT, digital transformation making use of thosetechnologies, work style reform, and other developments are increasingly taking center stage, and the investment
inclination toward IT overall continues. In security reinforcement measures, we expect the importance of investments
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 the revision of theCybersecurity Management Guidelines in November 2017 and enforcement of the General Data Protection Regulation inEurope in May 2018.
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 and the introduction of new educational programs.
As a result of the above, net sales in the Solutions Products Business during the period under review increased by 386,804thousand yen (20.3%) year-over-year to 2,295,304 thousand yen, and in the Solutions Services Business they increased by
366,136 thousand yen (20.0%) to 2,198,155 thousand yen. Consolidated sales thus grew by 752,941 thousand yen (20.1%)
overall to 4,493,460 thousand yen.
Meanwhile, operating income decreased by 5,687 thousand yen (1.9%) year-over-year to 288,336 thousand yen, ordinary
income decreased by 10,379 thousand yen (3.4%) to 294,497 thousand yen, and net income attributable to shareholders ofthe parent company increased by 31,865 thousand yen (14.8%) to 246,804 thousand yen.

(2) Explanatory information concerning financial position[Assets]
Total assets at the end of the period under review came to 5,495,247 thousand yen, an increase of 341,225 thousand yen
from the previous fiscal year. Current assets were 4,371,802 thousand yen, an increase of 292,845 thousand yen from theprevious fiscal year. Non-current assets were 1,123,444 thousand yen, an increase of 48,379 thousand yen from theprevious fiscal year.
The main factor behind the rise in current assets was an increase in cash and deposits. The main factor behind the rise in
non-current assets was an increase in tools, furniture and fixtures, and goodwill.
[Liabilities]
Total liabilities at the end of the period under review came to 3,004,634 thousand yen, an increase of 171,336 thousand yen
from the previous fiscal year. Current liabilities were 2,721,111 thousand yen, an increase of 200,834 thousand yen fromthe previous fiscal year. Non-current liabilities were 283,522 thousand yen, a decrease of 29,497 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 2,490,613 thousand yen, an increase of 169,889 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-2. 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
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating

Securities
Inventories
Advance payments - trade
Accounts receivable - other
Deferred tax assets
OtherAllowance for doubtful accounts
Total current assets
Non-current assets

Q2 FY 2018(as of June 30, 2018)

1,469,381

2,016,259

1,102,032
14,41699,990768,834
317,612
225,939
22,60558,286-143

939,561
29,060―612,200
450,974
196,41442,60984,903‐181

4,078,956

4,371,802

Property, plant and equipment
Buildings and structures
Accumulated depreciation

39,24442,974-26,138‐27,084

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

13,105
748,421-596,381

15,889800,423

Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation

152,040
639
5,170-5,117183,098
639―

Leased assets, net
Total property, plant and equipment
Intangible assets
Goodwill
Other

52
165,838―

6,700
27,91777,518

Total intangible assets
Investments and other assets
Investment securities
Long-term guarantee deposits
Deferred tax assets

34,618145,319705,105
77,118
10,429578,675
76,423
42,63764,516

Insurance funds
Other64,924
17,031
874,608
1,075,065
5,154,021

Total investments and other assets
Total non-current assets
Total assets-2-‐617,325―
199,627
67,801

16,244
778,497
1,123,444
5,495,247

(units: 1,000 yen)
FY 2017(as of December 31, 2017)
Liabilities
Current liabilities
Accounts payable - trade
Current portion of bonds

Q2 FY 2018(as of June 30, 2018)

92,302

638,683―――
82,462
211,578
152,897
42,1591,166
1,538,610
53,5522,520,277

2,721,111

114,549
131,873
66,59876,307
140,617
66,598

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus

313,020
2,833,298

283,522

Retained earnings
Treasury shares

1,142,981―

856,368
20,000Current portion of long-term loans payable
Lease obligations

38,73255

Accounts payable - otherAccrued expenses

103,942
128,417

Income taxes payable
Accrued consumption taxes

105,958
64,249Provision for bonuses
Advances received―
1,110,251

Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Net defined benefit liability
Long-term accounts payable - other498,306
270,806

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

Deferred gains or losses on hedges‐79
2,165,498

421,293-12,663

331,439

5,154,021-3-

501,645
274,145
1,389,786

1,912,094

408,629
2,320,723

Accumulated other comprehensive income
Total net assets
Total liabilities and net assets

3,004,634‐6,324
325,1142,490,613
5,495,247

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

Net sales
Cost of sales

Q2 FY 2017 (from January 1,2017, to June 30, 2017)
3,740,518
2,720,332(units: 1,000 yen)
Q2 FY 2018 (from January 1,2018, to June 30, 2018)
4,493,460
3,389,891

1,020,185
726,161

1,103,568
815,231

294,024

288,336

70
2,887
4,090
5,465

78
―
12,093
2,058

12,513

14,231

1,181

152
7,605

Gross margin on sales
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income
Foreign exchange gains
Surrender value of insurance
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses―
479

Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Profit before income taxes
Income taxes - current
Income taxes - deferred

312

1,661

8,070

304,876

294,497―

66,368―304,876
117,648

66,368360,866
139,132‐27,710‐25,069

Total income taxes

89,937

114,062

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

214,939

246,804―
214,939―
246,804-4-Consolidated statement of comprehensive income
Second quarter

ProfitOther comprehensive income(units: 1,000 yen)
Q2 FY 2017 (from January 1,2017, to June 30, 2017)
214,939Q2 FY 2018 (from January 1,2018, to June 30, 2018)
246,804102‐8,789‐89,853
6,339‐8,686206,252‐83,514163,290

206,252

163,290――

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Accumulated other comprehensive income

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