February 6, 2020

Summary of Consolidated Financial Results
for the Third Quarter of Fiscal Year Ending March 31, 2020 (FY2019)(Nine Months Ended December 31, 2019)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange, First Section
Stock code:
6947
URL: https://www.zuken.co.jp
Representative:
Makoto Kaneko, President and Representative Director
Contact:
Susumu Yoshida, General Manager of Finance Department
Tel: +81-45-942-1511
Scheduled date of filing of Quarterly Report:
February 7, 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 Third Quarter Ended December 31, 2019
(April 1, 2019 – December 31, 2019)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Nine months ended
Dec. 31, 2019
20,606
9.0
Dec. 31, 2018
18,89916.8
Note: Comprehensive income (Millions of yen)

Net income per share
Nine months ended
Dec. 31, 2019Dec. 31, 2018

Profit attributable toowners of parent

Ordinary profit

Millions of yen

Millions of yen

%

2,230
17.5
2,332
16.7
1,729
1,898
145.4
1,999
130.2
1,397
Nine months ended Dec. 31, 2019:
2,740 (up 52.4%)
Nine months ended Dec. 31, 2018:
1,798 (up 49.5%)%

Millions of yen

%

23.8
191.4

Diluted net income pershareYen

Yen

74.40
60.10-(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

As of Dec. 31, 201949,601
As of Mar. 31, 201947,190
Reference: Shareholders’ equity (Millions of yen)
As of Dec. 31, 2019:

Millions of yen%

35,12033,05070.0
69.1
32,607

34,701

As of Mar. 31, 2019:

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

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2019
12.00
Fiscal year ending Mar. 31, 2020
14.00
Fiscal year ending Mar. 31, 2020 (forecast)
Note: Revisions to the most recently announced dividend forecast: None-14.00

26.00

15.00

29.00

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)
Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit(Percentages represent year-on-year changes)
Profit attributable toNet income perowners of parent
share% Millions of yen%

Millions of yen%

Yen

Full year
28,300
5.6
3,100
1.6
3,200
Note: Revisions to the most recently announced consolidated forecast: None

0.3

2,250

6.5

96.78

* 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 Dec. 31, 2019:23,267,169 shares

As of Mar. 31, 2019:23,267,169 shares

As of Mar. 31, 2019:17,480 shares(b) Number of treasury shares at the end of the period
As of Dec. 31, 2019:17,630 shares(c) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2019:23,249,607 shares

Nine months ended Dec. 31, 2018:23,250,040 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 Third Quarter of FY2019

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 ................................................................................................................................................ 81

ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the fiscal year ending on March 31, 2020, gradual economic recoveries continued to takeplace in Japan and the United States. However, the outlook remained uncertain because of concerns about U.S.-China
trade friction, the BREXIT issue and other reasons. In the electronic equipment, automotive and industrial equipment
manufacturing sectors that are the main customer segments of the Zuken Group, a cautious attitude toward capital
investment was evident due to concerns about the prospects for the future, while the positive sentiment towards
investment continued in the IT sector.
Net sales in the first nine months were 20,606 million yen, 9.0% higher than one year earlier. This was a record-highsales following similar stellar performance in the first and second quarters. Sales of our E3.series wire harness design
systems and our domestic subsidiaries’ 3D solutions for the construction industry were strong and made significant
increase in sales of Circuit design solutions. In addition, there was steady growth in sales centered on our core CR8000 Design Force, electronics system design solution series, that resulted in higher sales of our Printed Circuit Board
design solutions and contributed to overall sales growth as well.
Earnings rose to new heights, benefiting from sales growth. As a result, ordinary profit was 2,332 million yen, 16.7%
higher than one year earlier, and profit attributable to owners of parent was 1,729 million yen, 23.8% higher than oneyear earlier.
(2) Explanation of Financial Position
Total assets at the end of the third quarter of the current fiscal year increased 2,410 million yen from the end of theprevious fiscal year to 49,601 million yen.
Current assets increased 428 million yen. The main factors include increases of 1,136 million yen in cash and deposits,
405 million yen in other current assets due to an increase in prepaid expenses and 358 million yen in work in process,while there was a decrease of 1,536 million yen in notes and accounts receivable-trade. Non-current assets increased
1,982 million yen. The main factors include increases of 1,513 million yen in investment securities and 489 million
yen in goodwill.
Total liabilities increased 340 million yen from the end of the previous fiscal year to 14,481 million yen. Current
liabilities decreased 233 million yen mainly due to decreases of 445 million yen in income taxes payable, 309 million
yen in other current liabilities due to a decrease in accounts payable-other, and 188 million yen in provision forbonuses, while there was an increase of 657 million yen in advances received. Non-current liabilities increased 573
million yen mainly due to an increase in deferred tax liabilities included in other non-current liabilities.
Net assets increased 2,070 million yen from the end of the previous fiscal year to 35,120 million yen, and theshareholders’ equity ratio was 70.0%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We currently maintain the consolidated forecast for the fiscal year ending March 31, 2020 that was released on
November 11, 2019.

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2018(As of Mar. 31, 2019)(Thousands of yen)Third quarter of FY2019(As of Dec. 31, 2019)

AssetsCurrent assets
Cash and deposits

18,523,202

19,659,879

Notes and accounts receivable-trade

5,870,720

4,334,417

Securities

6,700,000

6,700,000

Merchandise and finished goods

345,764

409,464Work in process

109,325

467,702

3,761

2,713

Other

2,336,168

2,741,696

Allowance for doubtful accounts(25,786)(24,705)

33,863,156

34,291,168

Buildings and structures, net

2,782,237

2,788,071

Land

3,015,103

3,015,103

Raw materials and supplies

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

Other, net

447,471

581,1096,244,812

6,384,283

Goodwill

492,088

982,084

Other

628,999589,734

1,121,088

1,571,818

Investment securities

4,919,667

6,433,365

Other

1,042,243

921,183

Total investments and other assets

5,961,910

7,354,549

13,327,811

15,310,652

47,190,967

49,601,821

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 Third Quarter of FY2019

FY2018(As of Mar. 31, 2019)(Thousands of yen)
Third quarter of FY2019(As of Dec. 31, 2019)

Liabilities
Current liabilities
Accounts payable-trade827,244914,034

Income taxes payable

630,106

184,806

Advances received

5,455,151

6,112,468

Provision for bonuses

846,582

657,993

Other provisions

84,53350,384Other

2,273,360

1,963,767

Total current liabilities

10,116,979

9,883,455

3,842,064

3,944,390

181,867

653,452

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

4,023,931

4,597,842

14,140,911

14,481,298

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,016

8,659,023

Retained earnings

12,230,462

13,309,235

Treasury shares
Total shareholders’ equity(16,365)(16,649)

30,990,177

32,068,674

2,022,397

2,994,236

22,984(50,484)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans(428,220)(310,555)

Total accumulated other comprehensive income

1,617,162

2,633,196

442,715

418,651

33,050,055

35,120,522

47,190,967

49,601,821

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

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)

Net sales

18,899,838

20,606,832

Cost of sales

5,290,019

5,746,021

Gross profit

13,609,818

14,860,810

Selling, general and administrative expenses

11,711,585

12,630,225

Operating profit

1,898,233

2,230,584

Non-operating income
Interest income

5,264

9,048

Dividend income

34,707

66,278

Subsidy income

10,087

28,778

Other82,73436,972

Total non-operating income

132,793

141,078

29,626

36,615Non-operating expenses
Foreign exchange losses
Other

1,732

2,183

Total non-operating expenses

31,35938,7991,999,668

2,332,863

327

2,159Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Transfer of rights income-137,269

Gain on liquidation of subsidiaries

23,321-

Total extraordinary income

23,648

139,429

3,799

4,749

Extraordinary losses
Loss on disposal of non-current assets
Total extraordinary losses

3,799

4,749

2,019,517

2,467,544

Income taxes-current

476,323594,108

Income taxes-deferred

152,647

148,753

Total income taxes

628,971742,861

1,390,546

1,724,682

Profit before income taxes

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

5(6,834)(5,080)1,397,381

1,729,762

ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)

1,390,546

1,724,682

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

304,898

971,839

Foreign currency translation adjustment(50,038)(73,469)

Remeasurements of defined benefit plans, net of tax

153,196

117,664

Total other comprehensive income

408,056

1,016,034

1,798,602

2,740,716

1,805,437

2,745,796(6,834)(5,080)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 Third Quarter of FY2019(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment Information
I. First nine months of FY2018 (Apr. 1, 2018 – Dec. 31, 2018)
Information about reportable segment net sales and profit or loss
Reportable segment
JapanEurope

Americas

Asia

Total

12,991,160

3,587,951

1,232,980

1,087,745 18,899,838

890,397

674,577

28,656

13,881,557

4,262,528

1,261,637(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total-18,899,838

1,655,939 (1,655,939)-

1,150,053 20,555,777 (1,655,939)

18,899,838

62,308Segment profit
1,386,122
180,621
18,283327,226 1,912,255(14,021)
1,898,233
Notes: 1. Adjustment amount in segment profit includes amount of -14,021 thousand yen eliminated for intersegment
transactions.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statement of income.

II. First nine months of FY2019 (Apr. 1, 2019 – Dec. 31, 2019)
Information about reportable segment net sales and profit or loss
Reportable segment
JapanEurope

AmericasAsia

Total14,744,980

3,473,889

1,409,661

978,301 20,606,832

808,687

666,448

41,772

15,553,667

4,140,337

1,451,434(Thousands of yen)
Appropriated amount
Adjustmentin the quarterly
amountconsolidated(Note 1) statement of income(Note 2)

Net sales
Sales to third parties
Intersegment sales ortransfers
Total

-

20,606,832

1,581,172 (1,581,172)-

1,042,565 22,188,005 (1,581,172)

20,606,832

64,263

Segment profit
1,748,033
124,01262,631
287,845 2,222,521
8,062
2,230,584
Notes: 1. Adjustment amount in segment profit includes amount of 8,062 thousand yen eliminated for intersegment transactions.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statement of income.

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019

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

First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
AmountComposition (%)(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)
AmountComposition (%)

Japan

12,991,160

68.7

14,744,980

71.6

Europe3,587,951

19.0

3,473,889

16.9

Americas1,232,980

6.5

1,409,661

6.8

Asia

1,087,745

5.8

978,301

4.7

18,899,838

100.0

20,606,832

100.0

Total
(b) Orders received and order backlog
Segment

First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
Orders received
Order backlog

Japan

14,343,441

EuropeAmericas
Asia
Total

(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)
Orders received
Order backlog

7,554,920

16,268,015

8,313,909

2,778,755

839,706

2,863,502

1,010,307

1,215,228

1,083,809

1,115,724

1,050,699

883,464

409,610

896,810265,274

19,220,889

9,888,046

21,144,053

10,640,191

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

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ZUKEN Inc. (6947) Financial Results for the Third Quarter of FY2019(Reference) Results by product category are as follows.
(a) SalesFirst nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
Product categoryAmountComposition (%)(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)
AmountComposition (%)

Printed Circuit Board design solutions

2,974,448

15.7

3,237,737

15.7

Circuit design solutions

4,137,811

21.9

5,151,313

25.0

IT solutions

3,901,330

20.6

4,078,347

19.8

Client services

7,882,316

41.8

8,137,471

39.5

Others
Total

3,930

0.0

1,962

0.0

18,899,838

100.0

20,606,832

100.0(b) Orders received and order backlog
Product category

First nine months of FY2018(Apr. 1, 2018 – Dec. 31, 2018)
Orders received
Order backlog(Thousands of yen)First nine months of FY2019(Apr. 1, 2019 – Dec. 31, 2019)
Orders received
Order backlog

Printed Circuit Board design solutions

3,029,287

731,741

3,437,586

888,724

Circuit design solutions

4,856,943

1,577,944

5,517,436

1,549,422

IT solutions

4,680,411

1,631,408

4,436,830

1,409,310

Client services

6,646,305

5,942,774

7,748,488

6,789,941

7,941

4,176

3,711

2,791

19,220,889

9,888,046

21,144,053

10,640,191

OthersTotalNotes: 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 Centersolutions
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-5000 System Designer
CR-8000 System PlannerArchitecture 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

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

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