November 9, 2020

Summary of Consolidated Financial Results
for the Second Quarter of Fiscal Year Ending March 31, 2021 (FY2020)(Six Months Ended September 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:
November 11, 2020
Scheduled date of payment of dividend:
December 2, 2020
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 Second Quarter Ended September 30, 2020
(April 1, 2020 – September 30, 2020)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Six months ended
Sep. 30, 2020
13,071(4.6)
Sep. 30, 201913,7059.8
Note: Comprehensive income (Millions of yen)

Net income per share
Six months ended
Sep. 30, 2020
Sep. 30, 2019

Profit attributable toowners of parent

Ordinary profit

Millions of yen

Millions of yen%

966 (45.7)
1,068 (41.5)
702
1,778
36.8
1,826
30.9
1,419
Six months ended Sep. 30, 2020:
2,022 (up 13.1%)
Six months ended Sep. 30, 2019:
1,788 (down 17.2%)%

Millions of yen%(50.5)
44.2

Diluted net income per
share

Yen

Yen

30.22
61.04

-

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

As of Sep. 30, 2020
52,462As of Mar. 31, 2020
51,445
Reference: Shareholders’ equity (Millions of yen)
As of Sep. 30, 2020:

Shareholders’ equity ratio

Millions of yen%

36,64635,013

69.2
67.2
34,58336,328

As 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
15.00
Fiscal year ending Mar. 31, 2021 (forecast)
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(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
share% Millions of yen%

Millions of yen%

Yen

Full year
29,000(1.0)
2,700 (20.4)
2,800
Note: Revisions to the most recently announced consolidated forecast: None

(19.7)

1,750(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 Sep. 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 Sep. 30, 2020:

17,855 shares(c) Average number of shares outstanding during the period
Six months ended Sep. 30, 2020:

23,249,402 shares

Six months ended Sep. 30, 2019:23,249,634 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 Second 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) Quarterly Consolidated Statement of Cash Flows ............................................................................................. 7(4) Notes to Quarterly Consolidated Financial Statements ...................................................................................... 8
Going Concern Assumption................................................................................................................................. 8
Significant Changes in Shareholders’ Equity....................................................................................................... 8
Segment Information ........................................................................................................................................... 83.

Supplementary Information ................................................................................................................................. 9(1) Sales and Orders ................................................................................................................................................ 9

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

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of the fiscal year ending on March 31, 2021, stagnation in the global economy continued due to the
COVID-19 pandemic. Although signs of improvement appeared late in the second quarter the overall situation
remained challenging. Manufacturers in the electronics, automotive and industrial equipment sectors are the main
customers of the Zuken Group. Even though companies in these sectors still have a strong commitment to making
IT investments, they continue to take a conservative stance on capital expenditures overall due to the uncertaintyof the economic outlook.
Net sales decreased 4.6% year on year to 13,071 million yen in the first half of the current fiscal year. Although net
sales were short of the record sales in the same period a year earlier, sales of IT solutions, primarily network -related
products, were firm, second only to the record set in the same period of the previous fiscal year. The order backlog
reached an all-time high at the end of the first half as orders from companies with strong commitment to IT
investments increased and contributed to building up the backlog.
As a result, ordinary profit was 1,068 million yen, 41.5% lower than one year earlier, and profit attributable toowners of parent was 702 million yen, 50.5% lower than one year earlier. Earnings decreased due to lower sales
and an increase in investment for future growth, including new product development activities.
(2) Explanation of Financial Position
Total assets at the end of the second quarter of the current fiscal year increased 1,016 million yen from the end of
the previous fiscal year to 52,462 million yen.
Current assets decreased 520 million yen. The main factors include a decrease of 2,470 million yen in notes andaccounts receivable-trade and an increase of 1,281 million yen in cash and deposits. Non-current assets increased
1,536 million yen. The main factors include an increase of 1,755 million yen in investments and other assets
primarily due to an increase in investment securities.
Total liabilities decreased 616 million yen from the end of the previous fiscal year to 15,815 million yen. Current
liabilities decreased 1,241 million yen. There were decreases of 726 million yen in other current liabilities due toa decrease in accounts payable-other, 447 million yen in accounts payable-trade and 447 million yen in income
taxes payable, and an increase of 484 million yen in advances received. Non-current liabilities increased 624 million
yen mainly due to an increase in deferred tax liabilities included in other non-current liabilities.
Net assets increased 1,633 million yen from the end of the previous fiscal year to 36,646 million yen, and theshareholders’ equity ratio was 69.2%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We currently maintain the consolidated forecast for the fiscal year ending March 31, 202 1 that was released on
August 5, 2020. Many of the Zuken Group’s customers use a fiscal year that ends in March. As a result, a large
percentage of the deliveries and final acceptances of our products occur in March each year. Consequently, sales
and profits tend to be disproportionately concentrated in the fourth quarter in each fiscal year.

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

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

AssetsCurrent assets
Cash and deposits

20,574,644

21,855,752

Notes and accounts receivable-trade

6,407,981

3,937,219

Securities

6,700,000

6,700,000

Merchandise and finished goods

403,944406,197

Work in process

264,482

428,810

1,862

7,876

Other

2,749,149

3,255,744

Allowance for doubtful accounts(29,587)(39,529)

37,072,477

36,552,072

Buildings and structures, net

2,849,901

2,775,147

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

495,064

6,376,656

6,285,315

Goodwill

913,777

778,840

Other

602,140

609,060

1,515,917

1,387,900

Investment securities

5,385,293

7,154,901

Other1,095,547

1,081,908

Total investments and other assets

6,480,840

8,236,809

14,373,415

15,910,025

51,445,892

52,462,098

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

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

FY2019(As of Mar. 31, 2020)(Thousands of yen)
Second quarter of FY2020(As of Sep. 30, 2020)

Liabilities
Current liabilities
Accounts payable-trade

1,177,418

730,186

Income taxes payable

716,954269,217

Advances received

6,783,516

7,268,246

Provision for bonuses

902,008

905,633

Other provisions

136,80728,189Other

2,303,253

1,577,065

Total current liabilities

12,019,959

10,778,539

4,192,059

4,227,078

220,565

810,164

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

4,412,625

5,037,242

16,432,584

15,815,782

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,023

8,662,477

Retained earnings

14,175,240

14,529,129

Treasury shares(16,778)(17,259)

32,934,550

33,291,412

Valuation difference on available-for-sale securities

2,266,875

3,494,990

Foreign currency translation adjustment(86,604)

808

Total shareholders’ equity
Accumulated other comprehensive income

Remeasurements of defined benefit plans(531,321)(459,163)

Total accumulated other comprehensive income

1,648,949

3,036,635

429,808

318,268

35,013,308

36,646,316

51,445,892

52,462,098

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

4

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2020(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)(Thousands of yen)First six months of FY2019First six months of FY2020(Apr. 1, 2019 – Sep. 30, 2019) (Apr. 1, 2020 – Sep. 30, 2020)
Net sales

13,705,971

13,071,338

Cost of sales

3,742,744

3,903,443

Gross profit

9,963,227

9,167,894

Selling, general and administrative expenses

8,184,443

8,201,826

Operating profit

1,778,784

966,067

Non-operating income
Interest income

6,943

4,117

Dividend income

41,96539,849Subsidy income

21,86640,145

Other

29,49735,704

Total non-operating income

100,272

119,818

51,373

15,168Non-operating expenses
Foreign exchange losses
Other

1,004

2,212

Total non-operating expenses

52,37817,3801,826,677

1,068,505

1,715

932

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Transfer of rights income

137,219-

Total extraordinary income

138,934

932

Loss on disposal of non-current assets

2,678

302

Total extraordinary losses

2,678

302

1,962,933

1,069,135

Income taxes-current

479,100

318,227

Income taxes-deferred

64,550115,678

Extraordinary losses

Profit before income taxes

Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

5543,650433,905

1,419,282

635,229

215(67,402)

1,419,067

702,631ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2020

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)(Thousands of yen)First six months of FY2019First six months of FY2020(Apr. 1, 2019 – Sep. 30, 2019) (Apr. 1, 2020 – Sep. 30, 2020)
Profit1,419,282

635,229

420,115

1,228,115(165,472)

87,412Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

114,418

72,158

Total other comprehensive income

369,061

1,387,685

1,788,343

2,022,915

1,788,128

2,090,317

215(67,402)

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

6

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2020(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)(Thousands of yen)First six months of FY2020(Apr. 1, 2020 – Sep. 30, 2020)

1,962,933

1,069,135

Depreciation

326,956

347,224

Amortization of goodwill

77,234

134,145

Cash flows from operating activities
Profit before income taxes

Transfer of rights income(137,219)-

Decrease (increase) in trade receivables

1,559,699

2,476,260

Decrease (increase) in inventories(192,832)(172,458)

Increase (decrease) in trade payables(643,186)(924,535)

Increase (decrease) in accrued consumption taxes(140,789)(177,213)

Increase (decrease) in advances received

788,138

484,511

Decrease (increase) in prepaid expenses(382,559)(433,289)

139,755

85,532Other, net(167,574)(323,262)

Subtotal

3,190,557

2,566,050

47,90045,413

Increase (decrease) in retirement benefit liability

Interest and dividends received
Interest paid

(185)

(1,138)

Income taxes paid

(730,119)(753,268)

Net cash provided by (used in) operating activities

2,508,152

1,857,057

56,160-Purchase of property, plant and equipment(187,966)(104,684)

Purchase of intangible assets(115,590)(154,075)

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from transfer of rights(100,800)-(432,557)-

137,219-

16,719(21,259)(626,816)(280,019)

Repayments of short-term borrowings(79,443)-

Repayments of long-term borrowings(25,797)-

Dividends paid

(325,495)(348,742)

Cash flows from investing activities
Decrease (increase) in time deposits

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Other, net(25,385)(41,864)(456,123)(390,606)(225,192)

97,652

1,200,020

1,284,085

Cash and cash equivalents at beginning of period

18,137,895

20,306,950

Cash and cash equivalents at end of period

19,337,916

21,591,035

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

7

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2020(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment Information
I. First six months of FY2019 (Apr. 1, 2019 – Sep. 30, 2019)
1. Information about reportable segment net sales and profit or loss
Reportable segment

Japan

EuropeAmericas

Asia

Total

9,930,905

2,238,767

875,373

660,924 13,705,971

542,606

482,707

30,63043,545

10,473,512

2,721,475

906,003(Thousands of yen)
Appropriatedamount in the
Adjustment
quarterly
amountconsolidated(Note 1)statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total-

13,705,971

1,099,490 (1,099,490)-

704,470 14,805,462 (1,099,490)

13,705,971

Segment profit
1,459,144
90,05740,543
188,915 1,778,660
123
Notes: 1. Adjustment amount in segment profit includes amount of 123 thousand yen eliminated for intersegment
transactions.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statement of income.

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

Japan

EuropeAmericas

Asia

Total

9,438,578

2,090,753

930,416

611,589 13,071,338

496,608

432,962

21,344

52,834

9,935,187

2,523,716

951,760

1,778,784(Thousands of yen)
Appropriatedamount in the
Adjustment
quarterly
amountconsolidated(Note 1)statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total-

13,071,338

1,003,750 (1,003,750)-

664,423 14,075,088 (1,003,750)

13,071,338

Segment profit (loss)
816,756(36,024)
2,839
181,561
965,133934
966,067
Notes: 1. Adjustment amount in segment profit (loss) includes amount of 934 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income.

8

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

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

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

Japan

9,930,905

72.5

9,438,578

72.2

Europe2,238,767

16.3

2,090,753

16.0

Americas875,373

6.4

930,416

7.1

Asia

660,924

4.8

611,589

4.7

13,705,971

100.0

13,071,338

100.0

Total
(b) Orders received and order backlog
Segment

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

Japan

11,398,264

8,258,232

11,336,049

9,560,225

Europe2,005,449

1,335,413

1,606,941

1,252,597

Americas393,002

978,141

725,566

1,182,976

Asia

679,572

354,206

637,295

460,206

14,476,288

10,925,994

14,305,853

12,456,006

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.

9

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2020(Reference) Results by product category are as follows.
(a) SalesFirst six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
Product category
AmountComposition (%)(Thousands of yen)First six months of FY2020(Apr. 1, 2020 – Sep. 30, 2020)
AmountComposition (%)

Printed Circuit Board design solutions

2,297,586

16.8

1,843,258

14.1

Circuit design solutions

3,325,286

24.3

2,674,703

20.5

IT solutions

2,719,102

19.8

2,922,876

22.4

Client services

5,362,158

39.1

5,630,131

43.0

Others
Total

1,836

0.0

368

0.0

13,705,971

100.0

13,071,338

100.0(b) Orders received and order backlog
Product category(Thousands of yen)First six months of FY2020(Apr. 1, 2020 – Sep. 30, 2020)
Orders received
Order backlog

First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
Orders received
Order backlog

Printed Circuit Board design solutions

2,512,169

892,748

2,140,604

1,110,040

Circuit design solutions

3,547,152

1,437,472

3,017,943

1,426,713

IT solutions

3,088,424

1,417,038

3,588,374

1,650,105

Client services

5,327,718

7,178,705

5,557,251

8,267,495

823

29

1,679

1,650

14,476,288

10,925,994

14,305,853

12,456,006

Others
Total

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.

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