August 5, 2020

Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ending March 31, 2021 (FY2020)(Three Months Ended June 30, 2020)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange, First Section
Stock code:
6947
URL: https://www.zuken.co.jp
Representative:
Jinya Katsube, President and Representative Director
Contact:
Susumu Yoshida, General Manager of Finance Department
Tel: +81-45-942-1511
Scheduled date of filing of Quarterly Report:
August 6, 2020
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
None
Holding of quarterly financial results meeting:None(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2020 (April 1, 2020 – June 30, 2020)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Three months ended
Jun. 30, 2020
5,928
(2.5)
Jun. 30, 2019
6,082
7.8
Note: Comprehensive income (Millions of yen)

Net income per share
Three months ended
Jun. 30, 2020
Jun. 30, 2019

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen

%

91
259

(64.8)
2.3

114 (65.2)
172(50.9)
329
10.9
351
1.6
Three months ended Jun. 30, 2020:
816 (-%)
Three months ended Jun. 30, 2019:(122) (-%)
Diluted net income per
share

Yen

Yen

3.94
11.18

-

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

As of Jun. 30, 2020
51,531
As of Mar. 31, 2020
51,445
Reference: Shareholders’ equity (Millions of yen)
As of Jun. 30, 2020:

Shareholders’ equity ratio

Millions of yen%

35,45835,013

68.1
67.2
34,58335,109As of Mar. 31, 2020:

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2020
14.00
Fiscal year ending Mar. 31, 2021
Fiscal year ending Mar. 31, 2021 (forecast)
15.00
Note: Revisions to the most recently announced dividend forecast: None

-

15.00

29.00

-

15.00

30.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 – March 31, 2021)
Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit% Millions of yen(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillions of yen%

Yen

Full year
29,000(1.0)
2,700 (20.4)
2,800 (19.7)
1,750
Note: Revisions to the most recently announced consolidated forecast: Yes
Only the full-year forecast is shown because Zuken manages performance on a fiscal year basis.

%(32.6)

75.27

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scopeof consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements(a) Changes in accounting policies due to revisions in accounting standards, others:None(b) Changes in accounting policies other than (a) above:None(c) Changes in accounting-based estimates:

None(d) Restatements:

None(4) Number of outstanding shares (common stock)(a) Number of shares outstanding at the end of the period (including treasury shares)
As of Jun. 30, 2020:

23,267,169 shares

As of Mar. 31, 2020:

23,267,169 shares

As of Mar. 31, 2020:

17,680 shares(b) Number of treasury shares at the end of the period
As of Jun. 30, 2020:

17,730 shares(c) Average number of shares outstanding during the period
Three months ended Jun. 30, 2020:

23,249,456 shares

Three months ended Jun. 30, 2019:23,249,686 shares* The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms .
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in this report are based on assumption judged to be valid and information available to theCompany’s management at the time this report was prepared, but are not promises by the Company regarding future performance.
Actual results may differ substantially from the forecasts for a number of reasons. Please refer to “1. Qualitative Information on
Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements”
on page 2 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

Contents of Attachments
1.

Qualitative Information on Quarterly Consolidated Financial Performance ........................................................ 2(1) Explanation of Results of Operations ................................................................................................................ 2(2) Explanation of Financial Position ...................................................................................................................... 2(3) Explanation of Consolidated Forecast and Other Forward-looking Statements ................................................. 2

2.

Quarterly Consolidated Financial Statements and Notes ..................................................................................... 3(1) Quarterly Consolidated Balance Sheet .............................................................................................................. 3(2) Quarterly Consolidated Statements of Income and Comprehensive Income ...................................................... 5
Quarterly Consolidated Statement of Income ...................................................................................................... 5
Quarterly Consolidated Statement of Comprehensive Income ............................................................................. 6(3) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 7
Going Concern Assumption................................................................................................................................. 7
Significant Changes in Shareholders’ Equity....................................................................................................... 7
Segment Information ........................................................................................................................................... 73.

Supplementary Information ................................................................................................................................. 8(1) Sales and Orders ................................................................................................................................................ 8

1

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the fiscal year ending on March 31, 2021, the COVID-19 pandemic caused stagnation in the
global economy and the business climate has become extremely challenging. Manufacturers in the electronics,
automotive and industrial equipment sectors are the main customers of the Zuken Group. Although companies inthese sectors still have a strong commitment to making IT investments, capital expenditures overall are lackluster
due to the uncertainty of the economic outlook.
Net sales in the first quarter were 5,928 million yen, 2.5% lower than one year earlier. Sales were down only slightly
from the record-high quarterly sales in the same period a year earlier, although there was the postponement ofdeliveries and acceptance inspections of some products that were originally scheduled for the first quarter to thesecond quarter or later due to sluggish corporate activity.
Earnings decreased due to lower sales and the growth in expenses resulting from the increasing speed of new
product development activities. As a result, ordinary profit was 172 million yen, 50.9% lower than one year earlier,and profit attributable to owners of parent was 91 million yen, 64.8% lower than one year earlier.
(2) Explanation of Financial Position
Total assets at the end of the first quarter of the current fiscal year increased 85 million yen from the end of theprevious fiscal year to 51,531 million yen.
Current assets decreased 746 million yen. The main factors include a decrease of 2,697 million yen in notes andaccounts receivable-trade and an increase of 1,190 million yen in cash and deposits. Non-current assets increased
832 million yen. The main factors include an increase of 976 million yen in investments and other assets primarily
due to an increase in investment securities.
Total liabilities decreased 360 million yen from the end of the previous fiscal year to16,072 million yen. Current
liabilities decreased 672 million yen mainly due to decreases of 643 million yen in income taxes payable, 404
million yen in provision for bonuses and 359 million yen in accounts payable-trade. There was an increase of 1,027
million yen in advances received. Non-current liabilities increased 312 million yen mainly due to an increase indeferred tax liabilities included in other non-current liabilities.
Net assets increased 445 million yen from the end of the previous fiscal year to 35,458 million yen, and theshareholders’ equity ratio was 68.1%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The forecast for the fiscal year ending March 31, 2021 was undecided because of the difficulty of determining areasonable prediction for the impact of the COVID-19 pandemic. At this time, we are announcing a forecast thatuses currently available information based on the performance of client companies.
The forecast is based on the assumption that the second quarter will be challenging because sales activities werepartially limited in the first quarter. Nevertheless, we do not see a significant change in sales in the third and fourth
quarters since the order backlog at the end of the first quarter was higher than the same period a year earlier.
We forecast net sales of 29,000 million yen, ordinary profit of 2,800 million yen, and profit attributable to ownersof parent of 1,750 million yen in the fiscal year ending March 31, 2021.

*These forecasts are based on information available at the time this report was prepared. Actual results may differ
from these forecasts due to a continuation of the spread of COVID-19 and many other reasons.

2

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2019(As of Mar. 31, 2020)(Thousands of yen)First quarter of FY2020(As of Jun. 30, 2020)

AssetsCurrent assets
Cash and deposits

20,574,644

21,764,921

Notes and accounts receivable-trade

6,407,981

3,710,084

Securities

6,700,000

6,700,000

Merchandise and finished goods

403,944

480,088

Work in process

264,482

455,478

1,862

1,947

Other

2,749,149

3,244,262

Allowance for doubtful accounts(29,587)(31,219)

37,072,477

36,325,565

Buildings and structures, net

2,849,901

2,812,136

Land

3,015,103

3,015,103

Raw materials and supplies

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

Other, net

511,651

498,419

6,376,656

6,325,658

Goodwill

913,777

841,837

Other

602,140

580,852

1,515,917

1,422,690

Investment securities

5,385,293

6,438,625

Other

1,095,547

1,018,461

Total investments and other assets

6,480,840

7,457,087

14,373,415

15,205,436

51,445,892

51,531,001

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

3

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

FY2019(As of Mar. 31, 2020)(Thousands of yen)First quarter of FY2020(As of Jun. 30, 2020)

Liabilities
Current liabilities
Accounts payable-trade

1,177,418

817,605

Income taxes payable

716,954

73,622

Advances received

6,783,516

7,811,353

Provision for bonuses

902,008

497,461

Other provisions

136,807

9,830

Other

2,303,253

2,137,160

Total current liabilities

12,019,959

11,347,033

4,192,059

4,192,586

220,565

532,681

Non-current liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

4,412,625

4,725,268

16,432,584

16,072,301

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,023

8,659,023

Retained earnings

14,175,240

13,918,015

Treasury shares(16,778)(16,904)

32,934,550

32,677,200

Valuation difference on available-for-sale securities

2,266,875

2,997,894

Foreign currency translation adjustment(86,604)(78,588)

Total shareholders’ equity
Accumulated other comprehensive income

Remeasurements of defined benefit plans(531,321)(486,554)

Total accumulated other comprehensive income

1,648,949

2,432,751

429,808

348,747

35,013,308

35,458,699

51,445,892

51,531,001

Non-controlling interests
Total net assets
Total liabilities and net assets

4

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)(Thousands of yen)First three months of FY2019 First three months of FY2020(Apr. 1, 2019 – Jun. 30, 2019) (Apr. 1, 2020 – Jun. 30, 2020)
Net sales

6,082,121

5,928,865

Cost of sales

1,705,773

1,687,640

Gross profit

4,376,347

4,241,224

Selling, general and administrative expenses

4,046,821

4,126,573

329,525

114,651

Operating profit
Non-operating income
Interest income

3,832

2,503

Dividend income

41,96539,849Subsidy income

6,286

18,455

Other

10,01010,686

Total non-operating income

62,09371,49540,076

12,884Non-operating expenses
Foreign exchange losses
Other

248

892

40,325

13,777351,293

172,369

Gain on sales of non-current assets

1,676

38

Total extraordinary income

1,676

38

Profit before income taxes

352,970

172,408

Income taxes-current

71,31029,711

Total non-operating expenses
Ordinary profit
Extraordinary income

Income taxes-deferred

39,329110,338

Total income taxes

110,640

140,050

Profit242,330

32,357

Loss attributable to non-controlling interests(17,636)(59,160)

Profit attributable to owners of parent

259,966

91,517

5

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)(Thousands of yen)First three months of FY2020(Apr. 1, 2020 – Jun. 30, 2020)

242,330

32,357

Valuation difference on available-for-sale securities(376,213)

731,019

Foreign currency translation adjustment(55,866)

8,015

ProfitOther comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

67,02644,766(365,053)

783,802(122,723)

816,159(105,086)

875,319(17,636)(59,160)

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment Information
I. First three months of FY2019 (Apr. 1, 2019 – Jun. 30, 2019)
Information about reportable segment net sales and profit or loss
Reportable segment

Japan

Europe4,232,449

1,134,123

273,897
4,506,346

Americas(Thousands of yen)
Appropriatedamount in the
Adjustment
quarterly
amountconsolidated(Note 1)statement of income(Note 2)

Asia

Total

439,699

275,849

6,082,121-

6,082,121

210,753

10,22918,888513,768(513,768)-

1,344,876

449,928

294,737

6,595,889(513,768)

6,082,121

Net sales
Sales to third parties
Intersegment sales ortransfers
Total

Segment profit (loss)
265,294(6,425)
8,246
69,468336,584(7,059)329,525
Notes: 1. Adjustment amount in segment profit (loss) includes amount of -7,059 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income .

II. First three months of FY2020 (Apr. 1, 2020 – Jun. 30, 2020)
Information about reportable segment net sales and profit or loss
Reportable segment

Japan

Europe4,203,508

1,001,157

250,484
4,453,993

Americas(Thousands of yen)
Appropriatedamount in the
Adjustment
quarterly
amountconsolidated(Note 1)statement of income(Note 2)

Asia

Total

475,153

249,046

5,928,865-

5,928,865

218,108

11,30627,548507,448(507,448)-

1,219,265

486,460

276,594

6,436,314(507,448)

5,928,865

Net sales
Sales to third parties
Intersegment sales ortransfers
Total

Segment profit (loss)
133,222(86,386)
1,368
68,687
116,890(2,239)114,651
Notes: 1. Adjustment amount in segment profit (loss) includes amount of -2,239 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income.

7

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020

3. Supplementary Information(1) Sales and Orders(a) Sales
Segment

First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
AmountComposition (%)(Thousands of yen)First three months of FY2020(Apr. 1, 2020 – Jun. 30, 2020)
AmountComposition (%)

Japan4,232,449

69.6

4,203,50870.9

Europe1,134,123

18.6

1,001,157

16.9

Americas439,6997.2

475,153

8.0

Asia

275,849

4.6

249,046

4.2

6,082,121

100.0

5,928,865

100.0

Total
(b) Orders received and order backlog
Segment

First three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
Orders received
Order backlog(Thousands of yen)First three months of FY2020(Apr. 1, 2020 – Jun. 30, 2020)
Orders received
Order backlog

Japan

6,204,370

8,762,795

6,216,406

9,675,653

Europe906,487

1,394,468

799,875

1,497,646

Americas193,546

1,086,266

345,660

1,280,661

Asia

401,762

470,198

293,744469,8447,706,166

11,713,729

7,655,687

12,923,805

Total

Notes: 1. Intersegment transactions have been eliminated.
2. The above amounts are based on selling prices and the amounts do not include consumption taxes.

8

ZUKEN Inc. (6947) Financial Results for the First Quarter of FY2020(Reference) Results by product category are as follows.
(a) SalesFirst three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
Product category
AmountComposition (%)
Printed Circuit Board design solutions(Thousands of yen)First three months of FY2020(Apr. 1, 2020 – Jun. 30, 2020)
AmountComposition (%)

883,73814.5

805,368

13.6

Circuit design solutions

1,326,130

21.8

1,254,997

21.2

IT solutions

1,203,189

19.8

1,109,699

18.7

Client services

2,668,010

43.9

2,758,799

46.5

Others
Total

1,051

0.0

0

0.0

6,082,121

100.0

5,928,865

100.0(b) Orders received and order backlog
Product category
Printed Circuit Board design
solutions
Circuit design solutionsFirst three months of FY2019(Apr. 1, 2019 – Jun. 30, 2019)
Orders received
Order backlog(Thousands of yen)First three months of FY2020(Apr. 1, 2020 – Jun. 30, 2020)
Orders received
Order backlog

1,081,650

884,308

891,025

892,683

1,839,768

1,694,060

1,589,617

1,418,200

IT solutions

1,502,747

1,349,390

1,798,775

1,673,289

Client services

3,281,584

7,785,561

3,376,240

8,939,262

Others
Total

416

407

28

368

7,706,166

11,713,729

7,655,687

12,923,805

Notes: 1. The above amounts are based on selling prices and the amounts do not include consumption taxes.
2. Name of major products by product category are as follows.
CR-8000 Design Force
CR-5000 Board Designer
Major products of Printed Circuit Board design CR-8000 DFM Center
solutions
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-5000 System Designer
CR-8000 System Planner
Major products of Circuit design solutions
E3.series
Cabling Designer
Harness Designer
PreSight visual BOM
DS-CR
Major products of IT solutions
DS-2 Expresso
DS-E3
GENESYSThis financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

9