Medium-term Business Plan
(April 2022 - March 2025)
July 15, 2022

ZUKEN Inc.
Tokyo Stock Exchange, Prime Market
Securities code: 6947

Contents◼ Summary and Basic Policies of the New Mediumterm Business Plan
◼ Sales Plan by Region and Solutions(Reference) Corporate Profile1

Summary and Basic Policies of the
New Medium-term Business Plan

2

New Medium-term Business Plan: Sales and Operating Profit Targets(Millions of yen)

Operating Profit

Sales(Millions of yen)

50,000

CAGR: 8.3%

45,00040,00040,00035,00031,50233,5008,000¥2,100 million increase inoperating profit

7,000

6,000

6,000
5,000

30,00025,0004,000

20,000

3,904

4,100

3,000

15,0002,000

Three-year plan

10,000
5,000

1,000

0

0

FY3/22(Results)

FY3/23(Plan)

FY3/24(Plan)

FY3/25(Plan)

Three-year plan

FY3/22(Results)

FY3/23(Plan)

FY3/24(Plan)

FY3/25(Plan)

Note: Foreign exchange rate assumptions for the Medium-term Business Plan are 120 yen/USD and 130 yen/EUR.

3

Basic Policies of the New Medium-term Business Plan
Growth Strategy (1)More Earning PowerEngineering DX Proposition by
Model-Based Development(MBSE/MBD)

Expedite our Sales DX and Maintain
Decent Pricing Level for Products
and Services

Growth Strategy (2)Reinforce Human Capital

Consulting-Driven Customer
Engagement to Enlarge Business
Scope and Value

Working Style Reforms andReskilling Program for More DXReady Personnel

Strengthen Corporate Governance
Incorporate Dynamic Capabilities and Social Issues in Management Strategies
4Basic Policies of the New Medium-term Business Plan
Growth Strategy (1)More Earning PowerEngineering DX Proposition by
Model-Based Development(MBSE/MBD)

Expedite our Sales DX and Maintain
Decent Pricing Level for Products
and Services

Growth Strategy (2)Reinforce Human Capital

Consulting-Driven Customer
Engagement to Enlarge Business
Scope and Value

Working Style Reforms andReskilling Program for More DXReady Personnel

Strengthen Corporate Governance
Incorporate Dynamic Capabilities and Social Issues in Management Strategies
4Growth Strategy (1)Engineering DX Proposition by Model-Based Development
Business Strategy◼ Establish strong foothold in Japanese
automakers, and deploy to Tier 1,2◼ Prepare and provision of industry-specificsolutions to increase business outside theautomobile industry◼ Broaden solutions scope to covermechanical and control software domain

KFS◼ Strengthen joint development activities
between Zuken Vitech and Zuken◼ Continue to make investments for thetimely development of solutions◼ Increase HR with skills for creating MBSE
proposals and solutions (Consider M&A
and partnerships to accomplish this goal)

5

Sales Associated with Model-based(Millions of yen)
Engineering
2,500

CAGR: 33.4%¥2,000 million

2,000

バイテック、MX、図研のPI売上計
1,500

1,000

¥840 million

5000FY3/22
22年3月期
図研バイテック
Zuken
ZukenVitech
VitechInc.
Inc.

Zuken
Modelinx Inc.
図研モデリンクス

FY3/25
25年3月期
国内MBSE関連
MBSE-related
in Japan

Business Domain Expansion Centered on MBSE Solutions
Product development domains

Plan/Concept

Process

DesignSoftwareMechanical

Production
Current ZUKEN Group businesses + MBSE
Targeted new business domains
6

ZUKEN Group companies and with partners

ElectricalBridging the Chasm between MBSE and EDA
Systemverifications/assessments

Meta-model
Database

Requirement
Behavior
Architecture
Verification
MATLAB Simulink etc.

Systems Engineering (MBSE)*1D Planner

GENESYS-CR Sales have started
Released spring of 2022
*1D Planner

To be released in 2023

GENESYS-E3 I/F
Released first in Europe
E3.functionalArchitecture

Hardwarerequieme
nts

Functional
req’s

Function block

Other
req’s

IssuesVerification
req’s

Verification
items

Hardware demands

GENESYS-E3

E3.topologyAdvance, E3.cable

Circuit Diagram

Hardware designs

Harness designs*1D Planner is a tentative name.

7

Hardware concept
verification

Feasibility study torealize HWGrowth Strategy (2)Consulting-Driven Customer Engagement
Business Strategy◼ Promote design process innovations
through CAE/CAD and PDM/PLM linkage◼ Evangelize the merits of CR-8000
migration for process innovations◼ Promote PDM (DS-E3) to E3.series (wireharness) customers

PDM business sales plan
(Millions of yen)
7,000

CAGR: 10.2%
6,000¥5,300 million
5,000¥3,950 million
4,000

3,000

KFS
◼ Deploy advanced customers casestudies into SMEs (CAE/CAD)◼ Increase PDM sales to SMEs
◼ Increase system engineers andextensive use of on-line sales platform
for more productivity

8

2,000

1,000

0

FY3/22
22年3月期

FY3/25
25年3月期Case Study of PDM/PLM Linkage
to Innovate the Design Environment (Ricoh)◼ Introduction of PLM triggered the shift froman internally developed PDM system
to DS-2◼ Redefined the “to Be” roles of PLM and PDM(DS-2)◼ Adjust their own design process flow basedon standard functions of DS-2

To build sustainable IT infrastructure withflexibility to upcoming changes in thedesign environment
Announced on July 15, 2022

9

To reduce the manpower needed formaintenance/management and to enable
timely CAD updates

Basic Policies of the New Medium-term Business Plan
Growth Strategy (1)More Earning PowerEngineering DX Proposition by
Model-Based Development(MBSE/MBD)

Expedite our Sales DX and Maintain
Decent Pricing Level for Products
and Services

Growth Strategy (2)Reinforce Human Capital

Consulting-Driven Customer
Engagement to Enlarge Business
Scope and Value

Working Style Reforms andReskilling Program for More DXReady Personnel

Strengthen Corporate Governance
Incorporate Dynamic Capabilities and Social Issues in Management Strategies
4Factors to Influence Operating Profit in the 3-year Plan
(Billions of yen)

Sales DX (next page)&
Pricing Optimization

Personnel Expenses
Increase-2.3
Sales Growth+6.0

Other Expenses Increase

-2.1

+0.5
+2.1

3.9
OP margin 12.4%

FY3/2210・ Scrutinize and optimize the pricing forexisting maintenance contracts, TBL prices• Reexamine man month unit cost for service
contracts• Improve maintenance fees by encouraging
customers to migrate to the CR-8000

6.0
OP margin 15.0%

FY3/25 (Plan)

Growth-Profitability Balance Higher efficiency by using the sales DX(Millions of yen)
400

For more added value projects

Deployment of best practices

Reinforce business developmentby properly skilled sales team200

Use on-line sales platform to identify
opportunities increasing efficiency
Investments for sales DX

Sales per Customer(Descending Order)

0

11

Basic Policies of the New Medium-term Business Plan
Growth Strategy (1)More Earning PowerEngineering DX Proposition by
Model-Based Development(MBSE/MBD)

Expedite our Sales DX and Maintain
Decent Pricing Level for Products
and Services

Growth Strategy (2)Reinforce Human Capital

Consulting-Driven Customer
Engagement to Enlarge Business
Scope and Value

Working Style Reforms andReskilling Program for More DXReady Personnel

Strengthen Corporate Governance
Incorporate Dynamic Capabilities and Social Issues in Management Strategies
4Upgrade and Expand Human Resources
Diversity and flexibility for working styles

Workingstyle
diversity

Workforcediversity

Reskilling
programs

More people with DX skills
12➢ Encourage people to use time off forchildcare and consider starting a remote
work program

Increase retention and opportunities for
women, place women in more job
categories, leadership training for women
Reskilling programs➢ Training in specialized areas of technology(training to create a core team of younger
employees) by business unit
➢ Job rotations in different group companies➢ Increase the program for paying for
education to obtain IT certifications

Basic Policies of the New Medium-term Business Plan
Growth Strategy (1)More Earning PowerEngineering DX Proposition by
Model-Based Development(MBSE/MBD)

Expedite our Sales DX and Maintain
Decent Pricing Level for Products
and Services

Growth Strategy (2)Reinforce Human Capital

Consulting-Driven Customer
Engagement to Enlarge Business
Scope and Value

Working Style Reforms andReskilling Program for More DXReady Personnel

Strengthen Corporate Governance
Incorporate Dynamic Capabilities and Social Issues in Management Strategies
4Strengthen Corporate GovernanceThe basis for corporate governance at ZUKEN is adapting with speed and flexibility totoday’s rapidly changing market conditions and conducting business with outstanding
compliance, suitability and soundness*From the ZUKEN Corporate Governance Code Report◼ Reexamined corporate governanceactivities due to the shift to a TSE Prime
Market listing and confirmed
compliance with all 83 corporate
governance code principles.
◼ Outside directors are at least one-thirdof all directors, started using an
executive officer system, established a
Nomination and Remuneration
Committee, and took other actions
In addition, started using an electronic voting platform forshareholders meetings and are reducing crossshareholdings.

13

Reference: The Sustainability Page of the ZUKEN Website

The new sustainability sectionof the ZUKEN website explains
the vision for sustainability
management, materiality,
sustainability activities andother items.

https://ir.zuken.co.jp/en/policy/sustainability/

14

Policy for Shareholder Distributions
記念配当・特別配当
Commemorative/special dividends
普通配当Ordinary dividend

株主還元策の推移
Consistent
Growth of Dividends （単位：円）(Unit: yen)

5

10
10

5
10

10

10

12

14

14

14

14

14

14

17

20

20

22

26

29

30

32

40

Investments for ◼ Zuken has paid an annual dividend per share of at least 10 yen every year
since its listing in 1987
growthStableshareholder
distributions

Financialsoundness

15◼ The dividend has increased several times since 2008
◼ The annual dividend was 37 yen for FY3/22 with the year-end dividend of 16
yen and special dividend of 5 yen.
◼ Zuken plans to pay an annual dividend of 40 yen for FY3/23◼ We will continue to consider suitable and highly effective methods ofreturning earnings to shareholders by taking into account businessperformance, operating conditions and other factors

Zuken will retain a progressive dividend policy

Sales Plan by Regions and Solutions

16

Overview of the Previous Three Years(Billions of yen)

35

14

31.5
29.3

30

13

28.8

12

26.7

11

00
0010

25

9
20

◼ Sales were down in FY3/21 as projects were suspended inJapan and overseas because of the pandemic. Sales
returned to growth trajectory in FY3/22.
◼ During all three previous fiscal years, customers remainedcommitted to expenditures for development programs(especially for electronic components and automotive
electronics).

8◼ Starting in FY3/21, companies increased investments forprocess reforms, such as for establishing remote work
(Billions6of yen)environments.
7

15

5

10

3.05

3.39

3.90
2.89

5

4
3
2
1

0

0

FY3/19 FY3/20 FY3/21 FY3/22

Sales

Operating profit

CAGR: 5.6%
4,700 million yen increase in sales
850 million yen increase in operating profit

17◼ In FY3/22, orders in the industrial machinery sector
increased (especially in Europe) as investments for
manufacturing increased in the semiconductor, electricvehicle and other market sectors.
◼ Progress of MBSE business:
Joint development activities with Zuken Vitech
Product planning, proof of concept with customers andother activities (especially in Japan)

New Medium-term Sales Plan by Solutions(Billions of yen)

Data Management
Electronic Design
Automation

+2.54

31.5

Wire Harness

+4.02

+1.94

Design Automation◼ Shift customers to the CR8000 by
explaining advantages for CAE links
etc.
◼ Target the demand for MEMS
designs, advanced packaging
designs and other sophisticatedelectronics designs.

18

40.0
FY3/25 (Plan)

FY3/22
Electronic Design
Automation+8.50

Wire Harness Design◼ Increase sales of the new
E3.infinite to automotive OEMs.
◼ Increase sales to new EV
manufacturers◼ Target the demand for smart
factories and increase sales tofactory automation manufacturers
and companies’ factory
engineering departments.

Data Management◼ Increasing demand for design
process innovation (including theMBSE/MBD business) because of
the need for the DX at customers◼ Increase activities to provide
customers with ideas for ways to
add more value by combining data
management with CAD.
◼ Continuation of significant demand
for network security solution

New Medium-term Sales Plan by Regions
Japan Market Overview(Billions of yen)Overseas
marketJapanmarket

+2.63
+8.50

+5.87

31.5

Japan
◼

◼

FY3/22(Results)

Strong demand backed bytechnological innovation, mainlyin the automobile and electronic
component industries
Increasing need for the DX, suchas improvements to productdevelopment processes(enterprise IT system updates willbe the trigger)

40.0

FY3/25(Plan)

Note: Foreign exchange rate assumptions for the Medium-term Business Planare 120 yen/USD and 130 yen/EUR.

19

New Medium-term Sales Plan by Regions
Overseas Market Overview(Billions of yen)

Europe

USA

+0.70

+0.81

Asia
(including direct sales in China)

+1.11

9.3

12.0

FY3/22

FY3/25 (Plan)

EuropeUSA◼ Market conditions are currently
favorable in the automotive
electronics and industrial
machinery sectors, which are theprimary sources of business in
Europe.
◼ Increase activities to submit data
management proposals to current
EDA/WH customers (especially wire
harness customers).

◼ Stable earnings because most sales
are TBL projects; new orders arerecovering.
◼ Investments by aircraft
manufacturers are slowly starting
to recover.
◼ Increase sales by using Zuken
Vitech/Zuken USA collaboration.

20

+2.63

Asia
◼ Market growth is likely involving
new EV manufacturers and theadvanced PKG/PCB sector.
◼ In China, aiming to expand the local
customer base to cover moremarket sectors.
◼ The manufacturing sector in India isrecovering from pandemic.

(Reference) New Medium-term Sales Plan by Solutions

Solutions Category

FY3/22

FY3/25

Change

CAGR

19,26323,745+4,482+7.2%(5,893)(7,835)+1,941+10.0%

Data Management

12,23916,254+4,015+9.9%

Total Sales

31,50240,000+8,497+8.3%(Millions of yen)

Design Automation(of which WH Design)21

(Reference) Comparison with Disclosure Information for Product Categories
Product Categories Used in Earnings Releases

Major Products

Printed Circuit Board Design Automation
design solutions
Printed Circuit Board

CR-8000 Design Force
CR-8000 DFM Center
CR-8000 Design Gateway

Circuit design solutions

Wire harness

Data Management

IT solutions
Client services and others*E3.series/E3.infinite
Cabling Designer series
DS-2 series
GENESYS
FortiGate
PreSight/visual BOM

Divided among the above categories*Client services are recurring revenue from the maintenance and updates of licenses.

22

(Reference) New Medium-term Sales Plan By Region

RegionFY3/22

FY3/25

Change

CAGR

Japan

22,14328,008+5,865+8.1%

Europe

5,400

6,511

+1,111

+6.4%

USA

2,246

3,064

+817

+10.9%

Asia

1,711

2,414

+703

+12.2%

Total

31,50240,000+8,497+8.3%(Millions of yen)23

Corporate Profile

24

Corporate Profile
ZUKEN Inc.
Established:
Capital:Employees:

December 17, 1976
10,117,065,000 yen
427 (non-consolidated)
1,476 (consolidated) (As of Mar. 31, 2022)
Tokyo Stock Exchange, Prime Market
Securities code: 6947
⚫ A Japanese engineering software vendor with global presence⚫ More than 40 years of experience in the electronic design
automation industry (Backed by a consistently sound financial
position)⚫ In-house development of technologies along with the use ofalliances, M&A and other measures to acquire new technologies
quickly as needed25

History
December 1976

Established as Zukei Shori Gijutsu Kenkyusho Inc.

June 2009

Announced the release of “PreSight,” a new product of PLM Solutions.

June 1978

Developed Japan's first CAD/CAM system "Create 2000" for the design ofprinted circuit boards.

May 2010

Concluded an equity alliance with Lattice Technology Co., Ltd., making Zuken
the second-largest shareholder after Toyota.

November 1983

Established ZUKEN AMERICA Inc. (now ZUKEN USA Inc.) in the United States.

June 2011

Announced the release of "visual BOM" that integrated bill of materials
technology with the ultra lightweight 3D format XVL.

January 1988

Developed a new CAD system "CR-3000."

January 2011

Announced worldwide the release of the "CR-8000," a new generationelectronic device design platform.

October 1991

Registered in the Second Section of the Tokyo Stock Exchange as a first EDA corporation.

September 2013

Established "Zuken SOZO Center" in Silicon Valley, North America.

January 1992

Established ZUKEN EUROPE GmbH (now ZUKEN GmbH) in Germany.

August 2014

Established Global Automotive and Transportation Competence Center in
Erlangen, Germany.

January 1992

Established ZUKEN KOREA Inc. in Seoul.

December 2014

Concluded a capital and business alliance with Toyo Business Engineering
Corporation (now Business Engineering Corporation).

August 1992

Established ZUKEN SINGAPORE Pte. Ltd. in Singapore.

March 2015

Established ZUKEN INDIA Pte. Ltd. in India.

April 1994

Developed EDA vertical integration solution "CR-5000."

July 2015

Took over YDC Corporation's CADVANCE business (CAD and PDM operations).

June 1994

Acquired all the shares of Racal-Redac Group (11 companies) of the United Kingdom.

April 2016

September 1994

Moved up to the First Section of the Tokyo Stock Exchange.

December 2017

Acquired all the shares of Alfatech Inc. (now Zuken Alfatech Inc.).

March 2000

Acquired all the shares of INCASES Engineering GmbH.

August 2019

Acquired all the shares of Vitech Corporation (now Zuken Vitech Inc.) of USA.

March 2002

Started provision of a wire harness design environment for the automotive
industry.

October 2019

Established ZUKEN Modelinx Inc.

June 2002

Established Shanghai Technical Center in Shanghai.

November 2021

Business Engineering Corporation became an equity-method affiliate
following an additional investment by ZUKEN

February 2004

E& Announced the release of "ePLM Platform DS-2," a PLM solution speciallydesigned for the electrical and electronics industries.

April 2022

Stock listing was moved to the Prime Market because of the restructuring of
the Tokyo Stock Exchange into new market segments

August 2005

Established ZUKEN TAIWAN Inc. in Taiwan.

May 2006

Acquired CIM-TEAM (now ZUKEN E3 GmbH) of Germany.

June 2007

Released "V54EE" based on "Catia V5."

26

The PreSight Division was spun off as Zuken PreSight Inc.

Global Locations and Affiliates in Japan
Head Office/Central Research Facility: Tsuzuki-ku, Yokohama
Locations in Japan:

Yokohama, Osaka and Nagoya

Overseas Locations:

5 countries in Asia, 8 countries in Europe andthe United States
7 (Zuken Tec Inc., Zuken Netwave Inc., Zuken Elmic Inc., Zuken PreSight Inc.,

Domestic Affiliates:

Zuken Alfatech Inc., Zuken Modelinx Inc., Business Engineering Corporation)

EUROPEUK, Germany, Switzerland,
France, Italy, Netherland, Poland

AMERICAS

Korea

Japan
China

:Sales OfficeTaiwanAsia

India
Singapore27

Zuken Group
Zuken Tec
Overseas subsidiaries
EuropeNorth America
Asia

Technology services(including support for modelbased development activities)

Design/manufacturing link
Knowledge/AI

28

3D mechanicaldesigns
BIM

Security

Telecommunications

Storage

Embedded softwarePrecautions
Information in this presentation includes forward-looking statements about results ofoperations and other items. These statements are judgments of the Zuken Group basedon information available when this presentation was prepared and include potential risks
and uncertainties. Therefore, actual results of operations and other aspects of future
performance may differ greatly from these forward-looking statements. Risk factors that
may affect the Zuken Group’s performance include, but are not limited to, changes in theeconomies of various countries, capital expenditures of the group’s customers, changes
in the demand for the group’s products, progress with the development of new products,
competition with other companies, and foreign exchange rate movements.
The performance targets in this presentation are not forecasts or current outlooks for
future results of operations. These figures are goals that the Zuken Group will attempt toreach by implementing its business strategies.

29

Contact

ZUKEN Inc.
Corporate Marketing Division
2-25-1, Edahigashi Tsuzuki-ku, Yokohama
Tel: +81-45-942-1511