Consolidated Financial Statements for the Three Months Ended March 31, 2020 (IFRS)
These financial statements have been prepared for reference only.
May 14, 2020
Link and Motivation Inc.
Stock exchange listing: Tokyo, First Section
http://www.lmi.ne.jp/english
Code number: 2170
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Ohno Shunichi, Director andManager of Group Design Office
Phone: +81-3-6779-9494
Filing of Quarterly Report (Shihanki Hokokusho) (scheduled):
May 14, 2020
Start of distribution of dividends (scheduled):
June 25, 2020
Supplementary documents for quarterly results:
No
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

1. Consolidated Results for the Three Months Ended March 31, 2020
(January 1, 2020 - March 31, 2020)(1) Revenues and Income
Revenues(¥ million)
Three months ended
March 31, 2020Three months ended
March 31, 2019

Three months ended
March 31, 2020Three months ended
March 31, 2019

(Percentages represent change compared with the same quarter of the previous year.)
IncomeOperatingNet
ChangeChangebeforeChangeChangeincomeincome(%)(%)
income taxes(%)(%)(¥ million)(¥ million)(¥ million)

9,345

1.7

613

44.4

573

42.1

403

104.1

9,189

(4.7)

424

(50.7)

403(52.7)

197(63.0)Net income
attributable toowners of theparent(¥ million)

Change(%)

Comprehensive
income(¥ million)

Change(%)

Basic earnings
per share (¥)

Dilutedearnings per
share (¥)

370

84.4

(36)

(108.4)

3.53

3.53

200

(63.5)

433

15.9

1.90

1.88

(2) Financial Position

As of March 31, 2020
As of December 31, 2019

Total assets(¥ million)

Total equity(¥ million)

45,80844,787

7,867
7,033

Equity attributableto owners of theparent(¥ million)
6,748
7,043

Ratio of equity
attributable to ownersof the parent to total
assets (%)
14.7
15.7

2. Dividends
1st Qtr.
1.80
1.80

2nd Qtr.
1.80

Dividends per share
3rd Qtr.
Year-end
1.80
1.80

Total
7.20

1.80

7.20

2019
2020
2020 (est.)
1.80
1.80
Note: Revisions since the most recently announced dividend forecast: No

3. Forecast of Consolidated Results for 2020 (January 1, 2020 - December 31, 2020)(Percentages represent change compared with the previous fiscal year.)
Net income
Basic
OperatingNet
Revenues
attributable toearnings
incomeincomeowners of the parent
per share(¥ million)(%) (¥ million) (%) (¥ million)(%)(¥ million)(%)(¥)
Full-year
—
—
—
—
—
—
—
—
—
Note: Revisions since the most recently announced forecast of results: Yes
Regarding the forecast of results for the fiscal year ending December 31, 2020, as stated in “NoticeConcerning Revision of the Forecast of Results” announced today, because there is no end in sight for the outbreakof the novel coronavirus and it is impossible for the Company to objectively and reasonably recalculate its full-year
forecast for 2020, the forecast of results announced on February 13, 2020 is temporarily withdrawn and remains
undetermined. The Company will make an announcement promptly as soon as a calculation of the forecast becomes
possible.

Notes(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Due to Change in Scopeof Consolidation): Yes
Added: 1 company (Name: OpenWork Inc.)(2) Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No(3) Number of Shares Issued and Outstanding (Common Stock)(a) Number of shares at the end of the period (including treasury stock)Three months ended March 31, 2020: 113,068,000; Year ended December 31, 2019: 113,068,000(b) Number of treasury shares at the end of the period:
Three months ended March 31, 2020: 8,145,796; Year ended December 31, 2019: 8,145,796(c) Average number of shares outstanding (cumulative with earlier quarters):
Three months ended March 31, 2020: 104,922,204; Three months ended March 31, 2019: 105,622,243* These Financial Statements Are Not Subject to Review by a Certified Public Accountant or Auditing Firm
* Explanation of the Proper Use of Performance Forecasts and Other Special Instructions
Consolidated forecasts and other statements regarding the future contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Actual performance may differ substantially
due to numerous factors.

Contents of Attachments
1. Overview of Results of Operations and Other Information ............................................................................ 2(1) Overview of Results of Operations for the Three Months Ended March 31, 2020 ................................. 2(2) Overview of Financial Position for the Three Months Ended March 31, 2020 ....................................... 7(3) Overview of Cash Flow for the Three Months Ended March 31, 2020 ................................................... 7(4) Forecast ......................................................................................................................................................... 7(5) Important Information Regarding Assumption of Going Concern ......................................................... 8
2. Condensed Consolidated Financial Statements and Main Notes ................................................................... 9(1) Condensed Consolidated Statements of Financial Position ..................................................................... 9(2) Condensed Consolidated Statements of Operations and Comprehensive Income ............................... 11(3) Condensed Consolidated Statements of Changes in Equity.................................................................... 13(4) Condensed Consolidated Statements of Cash Flow ................................................................................. 14(5) Notes to Condensed Consolidated Financial Statements ....................................................................... 15
Changes in Accounting Policies ............................................................................................................15
Notes Regarding Assumption of Going Concern ............................................................................... 15
Significant Subsequent Events ............................................................................................................ 15

1

1. Overview of Results of Operations and Other Information(1) Overview of Results of Operations for the Three Months Ended March 31, 2020
The Link and Motivation Group (the “Group”) supports the transformation of numerous companies and individuals
using “Motivation Engineering,” which is the Group’s core technology, backed by psychology, behavioral economics,social systems theory and other disciplines, under its corporate philosophy: “Through Motivation Engineering, we
provide opportunities to transform organizations and individuals and create a more meaningful society.” In industries
related to the Group, the market grew moderately as demand increased for facilitation of higher labor productivity andpersonnel recruiting associated with the promotion of work style reform. However, since February 2020, the economic
outlook has become uncertain due to the novel coronavirus (“COVID-19”) pandemic. A variety of budgetary cutbacks
have begun to emerge among the Group’s customer companies, mainly at small and medium-sized companies.
In this economic environment, the Group’s revenues were ¥9,345 million (a 1.7% increase compared with the same
period of the previous year), gross profit was ¥4,007 million (a 14.1% increase), operating income was ¥613 million (a44.4% increase) and net income attributable to owners of the parent was ¥370 million (an 84.4% increase).
The segment and business classifications of the Group are as shown below, and an overview of the three months
ended March 31, 2020 (the “first quarter of 2020”) by segment and business follows.
As of the first quarter of 2020, business classifications have changed due to the inclusion of OpenWork Inc. in thescope of consolidation. Figures for the same period of the previous year have been restated for the purpose of comparison.

Link and
Motivation Group

Organizational
Development Division

Individual
Development Division

Matching Division

Cloud Business

Career School Business

GlobalPersonnel Placement &Temp Staff Business

Link and Motivation Inc.

Link Academy Inc.

Link Interac Inc.

Link Global Solution Inc.

Dean Morgan K.K.

Link Japan Careers Inc.

Event & Media Business

Cram School Business

Domestic
Personnel Placement &Temp Staff Business

Link Corporate
Communications Inc.

Motivation Academia Inc.

Link Staffing Inc.

Consulting &Link Event Produce Inc.

Link-i Inc.

a2media Corporation

OpenWork Inc.

2

Organizational Development Division
The Organizational Development Division offers corporate customers services that provide support for building andstrengthening relationships with a company’s stakeholders (employees, job applicants, customers, shareholders) using“Motivation Engineering,” which is the core technology of the Group.
In this segment, segment revenues in the first quarter of 2020 were ¥2,491 million (a 2.5% decrease), and segment
income was ¥1,747 million (a 1.4% decrease), both decreasing slightly compared with the same period of the previous
year. An overview of operating results by business for the first quarter of 2020 is as follows.
Consulting & Cloud Business
The Consulting & Cloud business acts under the concept of creating numerous “Motivation Companies” in which
employee motivation is the growth engine of an organization. As its method of providing services, the business diagnoses
employee engagement based on its original diagnostic framework and offers one-stop solutions for innovations related toorganizations and personnel, including hiring, training, systems and culture.
In this business, revenues in the first quarter of 2020 were ¥2,029 million (a 0.5% increase) and gross profit was¥1,586 million (a 1.3% decrease). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Consulting & Cloud Business
Consulting
Cloud

Three months ended
March 31, 2019
2,019
[1,608]1,501
517

Three months ended
March 31, 2020
2,029
[1,586]
1,352
676

YoY change
(%)
0.5
(1.3)
(9.9)
30.8

In the first quarter of 2020, although results had been steady due to a focus at the end of 2019 on orders for 2020,
from March 2020 onward group training activities began to be postponed or cancelled in connection with requests tovoluntarily refrain from holding events as a result of the impact of the COVID-19 pandemic, and first-quarter revenues
increased slightly and gross profit decreased slightly. Going forward, the business will provide solutions fororganizational transformation that can be implemented under conditions such as online training, which has already beendeveloped.
On the other hand, revenues increased substantially compared with the same period of the previous year for the
Motivation Cloud series of cloud-based organizational improvement services, which are part of the Cloud category andare priority services for the Group. Progress in the number of deliveries and monthly fee revenue was as follows. As of
the first quarter of 2020, figures disclosed include Motivation Company Club, which is also a subscription-model service.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2019
2020
March
June
September
December
March
Number of deliveries
872
889
900
921
906
Monthly fee revenue (¥ thousand)
145,271
158,286
172,027
197,101
203,789
The Motivation Cloud series is a group of cloud-based services in the field of HR Tech (human resources combinedwith technology) for managing employee engagement (mutual understanding, empathy and commitment between
companies and employees). The business began providing these subscription-model products in July 2016.
The recent environmental change of shifting to adapt to the labor market to target human resources, both employees
and job applicants, is a management issue for many companies. Amid these circumstances, improving employee
engagement through corporate organizational activities is a key management theme. However, the absence of a“yardstick” for visualizing the state of the organization and of a PDCA cycle for truly achieving organizational
improvements has been an issue for many organizational activities. Successfully capturing such companies’ needs fororganizational transformation has led to steady growth, with total monthly fee revenue of ¥203,789 thousand for the
Motivation Cloud and Motivation Company Club subscription-model services for the month of March 2020.

3

Event & Media Business
The Event & Media business produces events and media for various types of communication associated with businessactivities to support the “creation of Motivation Companies” at corporations. In its event production, the business assists
in stimulating the interest and promoting the understanding of stakeholders through support for creation of forums such asanniversary events, recruiting presentations, promotional events and shareholders’ meetings. In its media production, thebusiness is involved in printed media such as company newsletters, corporate brochures and annual reports forshareholders, as well as web-based media such as corporate websites and investor relations (IR) sites and visual media
such as videos that explain products and webcasts of shareholders’ meetings.
In this business, revenues in the first quarter of 2020 were ¥646 million (an 11.9% decrease) and gross profit was¥245 million (a 4.1% decrease). Results by product in the Event & Media business were as follows.
Table 3. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Event & Media Business
Event
Media

Three months ended
March 31, 2019
733
[255]
306
426

Three months ended
March 31, 2020
646
[245]
162
483

YoY change(%)(11.9)(4.1)(46.9)
13.3

In the first quarter of 2020, segment revenues decreased substantially and gross profit decreased compared with thesame period of the previous year due to a significant decline in revenues from the Event business as a result of requests tovoluntarily refrain from holding events.
In the Media business, in addition to efforts to stabilize operations by focusing on IR-related media, which has low
sensitivity to economic conditions, as in the previous fiscal year, streaming video services for financial results briefingsand other purposes have been performing strongly due to growth in demand for online services.
The business will support the transformation of its customers by hosting events online and working to integrate eventsand media using its video production capabilities.

4Individual Development Division
The Individual Development Division applies “Motivation Engineering,” which is the core technology of the Group,
to businesses in areas including career schools and cram schools, to offer individual customers “career navigation”
services, which provide total support for independent and autonomous career creation.
In this segment, segment revenues in the first quarter of 2020 were ¥1,826 million (a 3.6% decrease) and segment
income was ¥648 million (a 2.4% increase). An overview of operating results by business for the first quarter of 2020 is
as follows.
Career School Business
The Career School business defines human resources who act independently and autonomously, without dependingon an organization, as “i-Companies” and supports the production of numerous i-Companies. As for specific services, thebusiness provides one-stop services for individual career advancement, targeting mainly university students and working
adults, under the six service brands of “Aviva” personal computer schools, “Daiei” qualification schools, “Aviva Pro”
programming schools, and “Rosetta Stone Learning Center,” “Rosetta Stone Premium Club” and “Hummingbird” foreign
language schools.
In this business, revenues in the first quarter of 2020 were ¥1,664 million (a 3.8% decrease) and gross profit was ¥577
million (a 0.7% increase). Results by product in the Career School business were as follows.
Table 4. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Career School BusinessIT
Qualifications
English conversation

Three months ended
March 31, 2019

Three months ended
March 31, 2020

YoY change
(%)

1,731
[573]
995
594
140

1,664
[577]
949
534
181

(3.8)
0.7
(4.7)
(10.2)
29.3

During the first quarter of 2020, due to declines in class attendance and new enrollees from the impact of voluntary
restraint by individuals in going out, revenues decreased while gross profit increased slightly. On the other hand, revenues
from English conversation courses have increased due to rising needs for global human resources.
This business will continue to support opportunities for ongoing learning by proactively promoting online classes.
Cram School Business
Unlike typical cram schools, the Cram School business operates under the business concept of producing numerous“i-Companies” in addition to improving the academic ability of its students. Its services consist of operating “Motivation
Academia” cram schools for junior high and high school students to provide a place where students can not only prepare
for school entrance exams but also develop skills to play a role in society. The business also operates “SS-1,” anindividualized instruction school for students preparing for junior high school entrance exams. The Cram School businesswill utilize its assets in programming education and English conversation education to provide a place for students fromelementary school straight through to high school to develop skills that will be of use in society.
In this business, revenues in the first quarter of 2020 were ¥162 million (a 0.6% decrease) and gross profit was ¥72
million (an 18.5% increase).
During the first quarter of 2020, revenues decreased slightly compared with the same period of the previous year due
to a decline in the number of new inquiries as a result of the impact of the COVID-19 pandemic. This business has only
one product.
By proactively promoting online classes and consultations, and applying the know-how in training adults that has
been cultivated in the Consulting & Cloud business, this business aims to achieve one-stop services unattainable byconventional cram schools, ranging from elementary to high school students and adults.

5Matching Division
The Matching Division provides services under the concept of matching organizations with hiring needs andindividuals who want to advance their careers through “motivation matching,” which applies “Motivation Engineering,”
the core technology of the Group, to personnel placement and temp staff dispatch.
In this segment, segment revenues in the first quarter of 2020 were ¥5,310 million (a 5.6% increase) and segment
income was ¥1,856 million (a 35.5% increase), with segment revenues increasing and segment income increasing
substantially compared with the same period of the previous year. An overview of operating results by business for the
first quarter of 2020 is as follows.
Global Personnel Placement & Temp Staff Business
The Global Personnel Placement & Temp Staff business dispatches foreign assistant language teachers (ALTs) of
foreign languages to elementary, junior high and high schools throughout Japan and provides English-language
instruction services on contract. In this business, where barriers to entry are extremely high due to the importance placedon relationships of trust with customers and a company’s track record, the Group has established the predominant
number-one share among private companies. The business is also capturing needs for employment of foreigners byconducting a business that provides one-stop foreigner recruiting, training and labor support to companies seeking to hirethem.
The market for English education in Japan continues to grow along with the expansion of English education being
promoted by the Ministry of Education, Culture, Sports, Science and Technology (MEXT).
In this business, revenues in the first quarter of 2020 were ¥3,119 million (a 0.3% decrease) and gross profit was¥1,007 million (an 11.5% increase).
During the first quarter of 2020, revenues decreased only slightly despite the impact of a decrease in the number of
ALTs working due to the closure of elementary, junior high and high schools nationwide, and gross profit increased
substantially. This business has only one product.
An increasing number of local governments have extended the period of school closures due to the impact of the
COVID-19 pandemic. However, many ALTs are working in areas such as providing content for online lessons as
learning support for students during school closures.
The business will continue working to retain foreign teachers and raise their quality with a view toward further
expanding English education in Japan.
Domestic Personnel Placement & Temp Staff Business
The Domestic Personnel Placement & Temp Staff business provides solutions in the form of referrals and temp
staffing of the human resources an organization needs to grow. The main businesses include a new graduate recruiting
and referral business that connects university students looking for employment with company orientation meetings andinterviews, a mid-career referral business that matches working adults looking to change jobs with companies, and a temp
staff business that dispatches personnel for sales, clerical work, and other fields. In addition, OpenWork Inc. was added tothe scope of consolidation as of the first quarter of 2020. OpenWork Inc. operates OpenWork, one of Japan’s largest
employee online review platforms for job seekers, and its main source of income is from referrals to employment
agencies.
In this business, revenues in the first quarter of 2020 were ¥2,200 million (a 15.7% increase) and gross profit was¥858 million (an 83.5% increase). Results by product in the Domestic Personnel Placement & Temp Staff business wereas follows.
Table 5. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Domestic Personnel Placement & Temp Staff
Business
Temp staff dispatch
Personnel placement

Three months ended
March 31, 2019
1,902
[468]
1,644
258

6

Three months ended
March 31, 2020
2,200
[858]
1,563
636

YoY change
(%)
15.7
83.5
(4.9)
146.5

During the first quarter of 2020, although Temp staff dispatch revenues were weak due to a continuing trend toward
full-time employment from the previous fiscal year and cutbacks in corporate hiring due to the impact of the COVID-19
pandemic, Personnel placement revenues grew significantly with the addition of OpenWork Inc. to the scope of
consolidation, and overall revenues and gross profit both increased substantially.
Venture Incubation
In addition to its divisions, the Group conducts venture incubation. In venture incubation, the Group provides its
know-how in organizational and personnel consulting in addition to funding, as well as support for growing venturecompanies on an organizational level with the aim of listing their stock. The two main criteria for selection of investees
are (1) sympathy with creating a “Motivation Company” and (2) aim to list stock. Gains on sales and other results
generated from venture incubation are recorded as other components of equity on the statements of financial position.
(2) Overview of Financial Position for the Three Months Ended March 31, 2020
Total assets as of March 31, 2020 were ¥45,808 million, an increase of ¥1,021 million from the end of the previous
year. This was mainly due to factors including a ¥2,263 million decrease in investments in associates in connection withmaking OpenWork Inc. a consolidated subsidiary, offset by a ¥2,741 million increase in cash and cash equivalents as aresult of securing working capital and making OpenWork Inc. a consolidated subsidiary.
Total liabilities as of March 31, 2020 were ¥37,941 million, an increase of ¥186 million from the end of the previous
year. This was mainly due to factors including a ¥1,229 million increase in interest-bearing and other financial liabilities
to secure working capital, offset by decreases of ¥416 million in trade and other payables and ¥610 million in income tax
payable, among other factors.
Total equity as of March 31, 2020 was ¥7,867 million, an increase of ¥834 million from the end of the previous year.
This was mainly due to factors including an increase in non-controlling interests in connection with making OpenWork
Inc. a consolidated subsidiary.
(3) Overview of Cash Flow for the Three Months Ended March 31, 2020
Cash and cash equivalents (“cash”) as of March 31, 2020 were ¥4,901 million, an increase of ¥2,741 million during
the period.
Cash flow during the three months ended March 31, 2020 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥119 million, a decrease of ¥278 million compared with the same
period of the previous year. The principal factors increasing net cash were increases of ¥170 million in income before
income taxes and ¥500 million in trade and other payables compared with the same period of the previous year, while theprincipal factors decreasing net cash were decreases of ¥117 million in income taxes paid and ¥190 million in trade andother receivables compared with the same period of the previous year.
Cash Flow from Investing Activities
Net cash provided by investing activities was ¥2,064 million (in the same period of the previous year, investing
activities used net cash totaling ¥342 million). Principal factors included a ¥2,290 million increase in cash and cash
equivalents in connection with making OpenWork Inc. a consolidated subsidiary.
Cash Flow from Financing Activities
Net cash provided by financing activities was ¥557 million (in the same period of the previous year, financing
activities used net cash totaling ¥685 million). Principal factors included a ¥1,600 million net increase in short-term
financial liabilities.
(4) Forecast
In light of the COVID-19 pandemic, the Organizational Development Division will work to maintain contracts
through measures including providing online training and offering existing Motivation Cloud customers some features of
its communication promotion services free of charge. The Individual Development Division has started to provide online
services for processes from trial courses and enrollment to course attendance, and the temp staff business of the Matching
7

Division is working to dispatch staff to supermarkets and call centers, where demand is expected, and to secure stable
employers.
On the other hand, the outlook is expected to remain unclear due to growing uncertainties such as the timing of theend of the COVID-19 pandemic and consumer trends following the cancellation of the state of emergency declaration,and consequently the Group assumes that the impact on its business activities will persist in the second quarter andthereafter. In the Organizational Development Division, there has been an increase in postponements and cancellations ofgroup training activities as well as an increasing number of suspensions and cancellations of Motivation Cloud, mainly by
SMEs and venture companies due to the uncertain economic environment, and major companies are also starting tosuspend or cancel membership. In the Individual Development Division, we expect some classrooms to remain closed foran extended period, depending on the term of the state of emergency declaration. Moreover, the Matching Division
expects a decrease in the number of personnel placements due to corporate cutbacks in hiring as well as decrease in temp
staff dispatched as a result of closures by employers.
Based on these circumstances, the Group has concluded that it is impossible to reasonably recalculate its consolidated
forecast of financial results at present due to numerous uncertainties that will impact its business results. Accordingly, theGroup’s outlook is undetermined. While keeping an eye on trends in COVID-19, the Group will disclose its forecast
promptly as soon as a calculation becomes possible.
(5) Important Information Regarding Assumption of Going Concern
None applicable82. Condensed Consolidated Financial Statements and Main Notes(1) Condensed Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments in associates
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

9

As of
December 31, 2019

As ofMarch 31, 2020

2,160
4,114
256
17
4,905
11,454

4,901
3,988
268
0
814
9,974

17,400
5,927
2,095
2,788
4,033
839
248
33,33344,787

17,546
10,902
2,146
525
3,647
809
256
35,83445,808(Millions of yen, rounded down to the nearest million)

LIABILITIES AND EQUITY
LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Interest-bearing and other financial liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing and other financial liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to owners of the parent
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

10

As of
December 31, 2019

As ofMarch 31, 2020

2,397
1,760
5,943
865
21
1,843
12,831

1,980
1,816
7,798
254
11
1,841
13,70324,092462
218
148
24,92237,754

23,467475
150
143
24,23737,941

1,380
1,987(1,733)
5,440
(31)
7,043
(10)
7,033
44,7871,380
1,950(1,733)
5,622
(470)
6,748
1,118
7,867
45,808

(2) Condensed Consolidated Statements of Operations and Comprehensive Income
Condensed Consolidated Statements of Operations(Millions of yen, rounded down to the nearest million)

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Equity in earnings of associates
Income before income taxes
Income taxes
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

Three months ended
March 31, 2019

Three months ended
March 31, 2020

9,189
5,675
3,513
3,066
3
24
424
2
43
19
403
206
197

9,345
5,338
4,007
3,375
0
19
613
1
46
4
573
170
403

200
(3)
197

370
32
403
(Yen)

Earnings per share attributable to owners of the parent
Basic earnings per share
Diluted earnings per share

1.90
1.88

11

3.53
3.53

Consolidated Statements of Comprehensive Income(Millions of yen, rounded down to the nearest million)

Three months ended
March 31, 2019
Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through other comprehensive income
Total of items that will not be reclassified to profit or loss

Three months ended
March 31, 2020

197

403

235
235

(439)
(439)

Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Total comprehensive income

0
0
236
433

(0)
(0)
(439)
(36)

(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

437
(3)
433

(69)
32
(36)

12

(3) Condensed Consolidated Statements of Changes in Equity
Three months ended March 31, 2019
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2019
Impact of change inaccounting policy
Balance at beginning of
period after reflectingchange in accounting
policyNet income
Other comprehensive
incomeTotal comprehensive
incomeDividends fromsurplusTransfer from othercomponents of equity toretained earnings
Total transactions withthe owners
March 31, 2019

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

936

7,696

(15)

7,681

(640)

—

(640)

—

(640)

(1,373)
—

4,122
200

936
—

7,055
200

(15)
(3)

7,040
197

—

—

—

236

236

—

236

—

—

—

200

236

437

(3)

433

—

—

—

(179)

—

(179)

—

(179)

—

—

—

(56)

56

—

—

—

—
1,380

—
1,989

—
(1,373)

(235)
4,087

56
1,229

(179)
7,313

—
(18)

(179)
7,295

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

1,380

1,989

(1,373)

4,763

—

—

—

1,380
—

1,989
—

—

Other
componentsof equity

Three months ended March 31, 2020
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2020
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange due to businesscombination
Dividends fromsurplus
Exercise of share options
Total transactions withthe owners
March 31, 2020

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

(31)
—

7,043
370

(10)
32

7,033
403

—

(439)

(439)

—

(439)

—

370

(439)

(69)

32

(36)

—

—

—

—

—

1,050

1,050

—
—

—
(37)

—
—

(188)
—

—
—

(188)
(37)

—
45

(188)
8

—
1,380

(37)
1,950

—
(1,733)

(188)
5,622

—
(470)

(226)
6,748

1,096
1,118

870
7,867

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

1,380
—

1,987
—

(1,733)
—

5,440
370

—

—

—

—

—

—

13

(4) Condensed Consolidated Statements of Cash Flow
(Millions of yen, rounded down to the nearest million)

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Financial revenues and financial expenses
Equity in losses (earnings) of associates
Decrease (increase) in trade and other receivables
Loss (gain) on step acquisitions
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other
SubtotalInterest and dividends received
Interest paid
Income tax refund
Income taxes paid
Net cash provided by operating activities
Cash flow from investing activities
Payments for acquisition of property, plant and equipment
Payments for acquisition of intangible assets
Proceeds from acquisition of subsidiary stock associatedwith change in scope of consolidation
Payments for security deposits and guarantees
Proceeds from refund of security deposits and guarantees
Other
Net cash used in investing activities
Cash flow from financing activities
Net increase (decrease) in short-term financial liabilities
Proceeds from long-term financial liabilities
Repayment of long-term financial liabilities
Payments of cash dividends
Repayment of lease liabilities
Payments from non-controlling interests
Net cash used in financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of quarter
Cash and cash equivalents at end of quarter

14

Three months ended
March 31, 2019

Three months ended
March 31, 2020

403
639
1
40
(19)
469
—
(51)
(65)
(12)
1,405
0
(36)
—
(971)
397

573
634
0
44
(4)
279
16
(12)
(566)
47
1,013
0
(44)
4
(853)
119

(113)
(176)

(60)
(166)

—
(66)
29
(15)
(342)

2,290
(19)
16
3
2,064

200
300
(489)
(179)
(516)
—
(685)
0
(630)
1,979
1,349

1,800
—
(570)
(189)
(490)
8
557
(0)
2,741
2,160
4,901

(5) Notes to Condensed Consolidated Financial Statements(Changes in Accounting Policies)
The significant accounting policies applied in these condensed consolidated financial statements are the same as those
applied in the consolidated financial statements for the previous fiscal year.
Income taxes expense for the three months ended March 31, 2020 was calculated using the estimated average annual
effective tax rate.
(Notes Regarding Assumption of Going Concern)
None applicable(Significant Subsequent Events)
None applicable15