November 6, 2023

Summary of Consolidated Financial Results
for the Second Quarter of Fiscal Year Ending March 31, 2024 (FY2023)(Six Months Ended September 30, 2023)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange
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 8, 2023
Scheduled date of payment of dividend:
December 4, 2023
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, 2023
(April 1, 2023 – September 30, 2023)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Six months ended
17,87911.0
Sep. 30, 2023
Sep. 30, 2022
16,103
7.5
Note: Comprehensive income (Millions of yen)

Net income per share
Six months ended
Sep. 30, 2023
Sep. 30, 2022

Profit attributable toowners of parent

Ordinary profit

Millions of yen

Millions of yen

%

1,996
5.5
2,384
13.9
1,638
1,892
2.2
2,093
7.1
1,414
Six months ended Sep. 30, 2023:
2,140 (up 52.0%)
Six months ended Sep. 30, 2022:
1,408 (down 56.1%)%

Millions of yen

%

15.8
4.3

Diluted net income per
share

Yen

Yen

71.57
60.86

-

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

60,884As of Sep. 30, 2023
As of Mar. 31, 2023
62,498Reference: Shareholders’ equity (Millions of yen)
As of Sep. 30, 2023:

Shareholders’ equity ratio

Millions of yen%

39,29941,35563.7
65.4
40,88438,810

As of Mar. 31, 2023:

2. Dividends
1Q-end2Q-endYen

Dividend per share
3Q-endYear-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2023
20.00
Fiscal year ending Mar. 31, 2024
25.00
Fiscal year ending Mar. 31, 2024 (forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

25.00

45.00

-

25.00

50.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 – March 31, 2024)
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
share%Millions of yen%

Yen

Full year
37,000
5.5
4,600
3.9
4,900
3.5
3,350
4.8
148.40Note: Revisions to the most recently announced consolidated forecast: None
At the Board of Directors meeting held on June 19, 2023, ZUKEN resolved the purchase of its own shares and the repurchasewas completed on October 16, 2023. Net income per share is calculated considering the result of this repurchase of treasury
shares.

* 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, 2023:

23,267,169 shares

As of Mar. 31, 2023:

23,267,169 shares

As of Mar. 31, 2023:

18,611 shares(b) Number of treasury shares at the end of the period
As of Sep. 30, 2023:

909,047 shares(c) Average number of shares outstanding during the period
Six months ended Sep. 30, 2023:

22,897,696 shares

Six months ended Sep. 30, 2022:

23,248,681 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 FY2023

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 ........................................................................................................................................... 8
Subsequent Events............................................................................................................................................... 93.

Supplementary Information ............................................................................................................................... 10(1) Sales and Orders .............................................................................................................................................. 101

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half, although the outlook remains uncertain due to accelerating inflation worldwide, concerns aboutslowing economic growth in China and other events, the economy continued to recover slowly as economic activity
returned to normal after the pandemic. Manufacturers in the electronics, automotive and industrial sectors, which are
the main customers of the Zuken Group, are continuing to make substantial capital expenditures including a large
volume of IT investments.
Net sales in the first half increased 11.0% from one year earlier to 17,879 million yen, a new record for the first halfof a fiscal year. Sales of all solution categories increased significantly. In particular, sales of the core electronic design
system CR-8000 series and E3.series, a wire harness design system, were strong in Japan, Europe and the UnitedStates.
Although expenses increased because of active investment in development and a large volume of sales activities,
earnings were higher because of the big increase in sales. Operating profit increased 5.5% to 1,996 million yen,ordinary profit increased 13.9% to 2,384 million yen and profit attributable to owners of parent increased 15.8% to
1,638 million yen. All three are record highs for the first half of a fiscal year.
(2) Explanation of Financial Position
Total assets at the end of the second quarter of the current fiscal year decreased 1,613 million yen from the end of theprevious fiscal year to 60,884 million yen.
Current assets decreased 1,749 million yen. The main factors include decreases of 1,505 million yen in notes andaccounts receivable-trade and 1,211 million yen in cash and deposits. There was an increase of 618 million yen inother current assets due to an increase in prepaid expenses. Non-current assets increased 136 million yen. The main
factors include an increase of 140 million yen in investments and other assets from the evaluation of investment
securities at market value.
Total liabilities increased 442 million yen from the end of the previous fiscal year to 21,584 million yen. Current
liabilities increased 460 million yen. There was an increase of 1,321 million yen in advances received and decreasesof 401 million yen in income taxes payable and 314 million yen in other current liabilities due to a decrease in accounts
payable-other. Non-current liabilities decreased 17 million yen mainly due to a decrease in retirement benefit liability.
Net assets decreased 2,056 million yen from the end of the previous fiscal year to 39,299 million yen mainly due torepurchase of treasury shares of 3,604 million yen, and the shareholders’ equity ratio was 63.7%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We currently maintain the consolidated forecast for the fiscal year ending March 31, 2024 that was released on May
15, 2023.

2

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2022(As of Mar. 31, 2023)(Thousands of yen)
Second quarter of FY2023(As of Sep. 30, 2023)

AssetsCurrent assets
Cash and deposits

28,506,871

27,295,499

Notes and accounts receivable-trade

6,688,912

5,183,881

Securities

6,700,000

6,700,000

Merchandise and finished goods

593,209740,681Work in process

101,238

324,842

Raw materials and supplies

1,768

1,605

Other

5,439,189

6,057,412

Allowance for doubtful accounts(37,623)(60,319)

47,993,566

46,243,603

Buildings and structures, net

2,577,438

2,560,888

Land

3,009,821

3,009,821

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

Other, net

732,346

763,344

6,319,606

6,334,054

Goodwill

147,863

133,603

Other

854,403

850,076

Total property, plant and equipment
Intangible assets

Total intangible assets

1,002,267

983,680

Investments and other assets

7,182,731

7,323,375

Total non-current assets

14,504,605

14,641,110

62,498,172

60,884,713

Total assets

3

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023

FY2022(As of Mar. 31, 2023)(Thousands of yen)
Second quarter of FY2023(As of Sep. 30, 2023)

Liabilities
Current liabilities
Accounts payable-trade751,939653,213

Income taxes payable

826,012424,525

Advances received

11,469,101

12,790,215

Provision for bonuses

1,150,839

1,159,924

Other provisions

111,544

56,488Other

2,613,485

2,298,794

Total current liabilities

16,922,923

17,383,161

3,982,222

3,962,084

237,108

239,683

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

4,219,330

4,201,768

21,142,254

21,584,929

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,662,477

8,662,477

Retained earnings

20,096,025

21,153,600

Treasury shares
Total shareholders’ equity(19,737)(3,623,748)

38,855,831

36,309,394

1,622,185

1,768,021

417,293741,646

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans(11,251)(8,611)

Total accumulated other comprehensive income

2,028,227

2,501,056

471,859489,333

41,355,918

39,299,784

62,498,172

60,884,713

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

4

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)

Net sales

16,103,629

17,879,632

Cost of sales

5,019,356

5,671,721

Gross profit

11,084,272

12,207,911

Selling, general and administrative expenses

9,192,223

10,211,691

Operating profit

1,892,049

1,996,219

Interest income

8,587

24,153

Dividend income

21,27820,875Non-operating income

Foreign exchange gains
Share of profit of entities accounted for using equity
methodSubsidy income-

83,133

128,599

191,327

53,85052,969Other

18,957

27,417

Total non-operating income

231,272

399,877

1,253

3,379

-

7,206

27,756-

Non-operating expenses
Interest expenses
Commission for purchase of treasury shares
Foreign exchange losses
Other

1,098

599

Total non-operating expenses

30,108

11,184

2,093,213

2,384,912

Gain on sale of non-current assets

5,050

4,416

Total extraordinary income

5,050

4,416

Loss on disposal of non-current assets

5,169

4,845

Total extraordinary losses

5,169

4,845

Ordinary profit
Extraordinary income

Extraordinary losses

Profit before income taxes

2,093,094

2,384,483

Income taxes-current

487,964

630,612

Income taxes-deferred

154,894

86,372

Total income taxes

642,859

716,984

1,450,234

1,667,498

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

535,25528,7091,414,979

1,638,788

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)

1,450,234

1,667,498(225,382)

131,184

Foreign currency translation adjustment

193,241

324,353

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method(10,286)

2,639

267

14,650Total other comprehensive income(42,159)

472,828

1,408,075

2,140,326

1,372,819

2,111,617

35,25528,709ProfitOther comprehensive income
Valuation difference on available-for-sale securities

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 FY2023(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)

2,093,094

2,384,483

Depreciation

354,299407,249

Amortization of goodwill
Share of loss (profit) of entities accounted for using
equity method
Decrease (increase) in trade receivables

23,461

25,941(128,599)(191,327)

Cash flows from operating activities
Profit before income taxes

1,227,930

1,693,718

Decrease (increase) in inventories

67,503(370,505)

Increase (decrease) in trade payables(785,215)(362,119)

Increase (decrease) in accrued consumption taxes(100,740)(102,708)

Increase (decrease) in advances received

1,320,687

979,605

Decrease (increase) in prepaid expenses(546,113)(580,402)

Increase (decrease) in retirement benefit liability

31,422(72,219)

Other, net(324,625)(253,570)

Subtotal

3,233,104

3,558,146

Interest and dividends received

91,660160,513Interest paid

(1,253)(3,379)(2,678,599)(1,029,112)

644,9112,686,168

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits

204,400

22,560Purchase of property, plant and equipment(301,374)(205,431)

Purchase of intangible assets(207,676)(168,342)(8,296)

17,172(312,947)(334,041)-(3,611,217)

Dividends paid

(488,222)(581,213)

Other, net(40,579)(36,769)

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(528,802)(4,229,200)

438,928

684,628

242,091(1,192,445)

Cash and cash equivalents at beginning of period

26,900,029

28,399,343

Cash and cash equivalents at end of period

27,142,120

27,206,897

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

7

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023(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 FY2022 (Apr. 1, 2022 – Sep. 30, 2022)
Information about reportable segment net sales and profit or loss, and breakdown of revenue
Reportable segment(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)Japan

EuropeAmericas

Asia

Total

Solutions

6,459,669

1,574,363

664,113

227,965

8,926,111-

8,926,111

Client services

4,595,664

1,480,466

645,690455,695

7,177,517-

7,177,517

Sales to third parties
Intersegment sales ortransfers
Total

11,055,333

3,054,830

1,309,803

683,661 16,103,629-

16,103,629

637,102525,315

42,343

1,258,190 (1,258,190)-

11,692,435

3,580,146

1,352,146

737,090 17,361,819 (1,258,190)

16,103,629

Net sales

53,429Segment profit (loss)
1,381,763
308,535(10,511)
181,478 1,861,265
30,784
1,892,049
Notes: 1. Adjustment amount in segment profit (loss) includes amount of 30,784 thousand yen eliminated for intersegment
transactions.
2. Segment profit (loss) is adjusted with operating profit in the quarterly consolidated statement of income.

II. First six months of FY2023 (Apr. 1, 2023 – Sep. 30, 2023)
Information about reportable segment net sales and profit or loss, and breakdown of revenue
Reportable segment
Asia

Total

(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)Japan

EuropeAmericas

Solutions

6,949,473

1,828,336

841,244

422,171 10,041,225-

10,041,225

Client services

5,190,931

1,519,292

622,251

505,931

7,838,407-

7,838,407

Sales to third parties
Intersegment sales ortransfers

12,140,405

3,347,629

1,463,495

928,102 17,879,632-

17,879,632

730,836

603,349

50,441

1,440,457 (1,440,457)

-

Total

12,871,241

3,950,9781,513,937

983,933 19,320,090 (1,440,457)

17,879,632

Net sales

55,830

Segment profit (loss)
1,630,989
170,574(98,681)274,580 1,977,463
18,755
1,996,219
Notes: 1. Adjustment amount in segment profit (loss) includes amount of 18,755 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 FY2023

Subsequent Events
Repurchase of treasury shares
At the Board of Directors meeting held on June 19, 2023, ZUKEN resolved the following matters pertaining to thepurchase of its own shares pursuant to Article 156 of the Companies Act which is applicable in lieu of Article 165,
Paragraph 3 of the Companies Act., and implemented the acquisition as follows.
1. Reason for repurchase of shares
Shares are repurchased to improve capital efficiency and return more earnings to shareholders.
2. Details of repurchase(1) Type of shares to be repurchased:

Common stock of ZUKEN(2) Total number of shares to be repurchased:

Up to 1,100,000 shares(4.73% of total number of shares outstanding, excluding treasury
shares)(3) Total value of shares to be repurchased:

Up to 4 billion yen(4) Period for repurchase:

From June 20, 2023 to March 29, 2024

(5) Method of repurchase:

Purchase on the Tokyo Stock Exchange

3. Result of repurchase
As a result of the purchase on the Tokyo Stock Exchange, 998,300 shares of the ZUKEN’s common stock (acquisition
cost: 3,999,917 thousand yen) were repurchased from June 20, 2023 to October 16, 2023 (contract basis).
The repurchase was completed because the authorized total value of the repurchase was reached.

9

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023

3. Supplementary Information(1) Sales and Orders(a) Sales
Segment
Japan
EuropeAmericas
Asia
Total

First six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)
AmountComposition (%)
11,055,333
68.7
3,054,830
19.0
1,309,803
8.1
683,661
4.2
16,103,629
100.0(b) Orders received and order backlog
First six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)
Segment
Orders received
Order backlog
Japan
13,115,746
12,616,973
Europe2,832,199
2,467,443
Americas1,254,397
1,943,497
Asia
571,006
465,123
Total
17,773,350
17,493,037
Note: Intersegment transactions have been eliminated.

10(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)
AmountComposition (%)
12,140,405
67.9
3,347,629
18.7
1,463,495
8.2
928,102
5.2
17,879,632
100.0(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)
Orders received
Order backlog
13,747,368
13,298,642
3,448,537
3,042,993
1,229,694
2,196,727
1,163,456
914,947
19,589,056
19,453,311

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2023(Reference) Results by product category are as follows.
(a) SalesFirst six months of FY2022(Apr. 1, 2022 – Sep. 30, 2022)
Product category
AmountComposition (%)
Printed Circuit Board design solutions
1,939,069
12.0
Circuit design solutions
3,374,679
21.0
IT solutions
3,611,275
22.4
Client services
7,177,517
44.6
Others
1,087
0.0
Total
16,103,629
100.0(Thousands of yen)First six months of FY2023(Apr. 1, 2023 – Sep. 30, 2023)
AmountComposition (%)
2,183,97812.2
3,802,374
21.3
4,053,126
22.7
7,838,407
43.8
1,745
0.0
17,879,632
100.0(b) Orders received and order backlog(Thousands of yen)First six months of FY2022
First six months of FY2023(Apr. 1, 2022 – Sep. 30, 2022)(Apr. 1, 2023 – Sep. 30, 2023)
Product category
Orders received
Order backlog
Orders received
Order backlog
Printed Circuit Board design solutions
2,102,263
1,159,742
3,063,501
1,921,449
Circuit design solutions
3,836,487
2,065,565
4,882,162
2,645,538
IT solutions
4,456,277
2,667,852
4,586,256
2,416,150
Client services
7,375,935
11,598,189
7,053,781
12,466,362
Others
2,387
1,687
3,354
3,809
Total
17,773,350
17,493,037
19,589,056
19,453,311
Note: Name of major products by product category are as follows.
CR-8000 Design Force
CR-8000 Board Designer
Major products of Printed Circuit Board design
CR-8000 DFM Center
solutions
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-8000 System Planner
E3.series
Major products of Circuit design solutions
E3.infinite
Cabling Designer
Harness Designer
DS-CR
DS-2 Expresso
DS-E3
Major products of IT solutions
DS-E3.infinite
GENESYS
PreSight visual BOM

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been preparedin accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer
an English translation.

11