November 11, 2019

Summary of Consolidated Financial Results
for the Second Quarter of Fiscal Year Ending March 31, 2020 (FY2019)(Six Months Ended September 30, 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:
November 13, 2019
Scheduled date of payment of dividend:
December 3, 2019
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, 2019
(April 1, 2019 – September 30, 2019)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Six months ended
Sep. 30, 201913,705
9.8
Sep. 30, 2018
12,47719.3
Note: Comprehensive income (Millions of yen)

Net income per share
Six months ended
Sep. 30, 2019
Sep. 30, 2018

Profit attributable toowners of parent

Ordinary profit

Millions of yen

Millions of yen

%

1,778
36.8
1,826
30.9
1,419
1,299
165.4
1,395
151.4
984
Six months ended Sep. 30, 2019:
1,788 (down 17.2%)
Six months ended Sep. 30, 2018:
2,159 (up 236.5%)%

Millions of yen

%

44.2
192.2

Diluted net income per
share

Yen

Yen

61.04
42.34

-

(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

As of Sep. 30, 2019
48,440
As of Mar. 31, 201947,190
Reference: Shareholders’ equity (Millions of yen)
As of Sep. 30, 2019:

Millions of yen%

34,49333,05070.3
69.1
32,60734,069As of Mar. 31, 2019:

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

Fiscal year ended Mar. 31, 2019
Fiscal year ending Mar. 31, 2020
Fiscal year ending Mar. 31, 2020 (forecast)
Note: Revisions to the most recently announced dividend forecast: Yes

Year-end

Total

Yen

Yen

Yen

Yen

12.00
14.00

-

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 to
Net 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: Yes

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 Sep. 30, 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 Sep. 30, 2019:17,590 shares(c) Average number of shares outstanding during the period
Six months ended Sep. 30, 2019:23,249,634 shares

Six months ended Sep. 30, 2018:23,250,069 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 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) 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 FY2019

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, 2020, gradual economic recoveries continued to take place inJapan and the United States. However, the outlook remained uncertain because of concerns about a protracted 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 overall due to wariness about the prospects for the future, while the positive sentimenttowards investment continued in the IT sector.
Net sales in the first half were 13,705 million yen, 9.8% higher than one year earlier. This was the third consecutive
fiscal year of record-high sales for the first half. There was steady growth worldwide in sales of our core CR-8000
Design Force, electronics system design solution series, that resulted in higher sales of our Printed Circuit Board
design solutions. In addition, as sales of our E3.series wire harness design systems and our domestic subsidiaries’ 3D
solutions for the construction industry saw growth, and made significant increase in sales of Circuit design solutions,that contributed to overall sales growth as well.
Earnings rose to new heights, benefiting from sales growth. As a result, ordinary profit was 1,826 million yen, 30.9%
higher than one year earlier, and profit attributable to owners of parent was 1,419 million yen, 44.2% higher than one
year earlier.
(2) Explanation of Financial Position
Total assets at the end of the second quarter of the current fiscal year increased 1,249 million yen from the end of theprevious fiscal year to 48,440 million yen.
Current assets increased 56 million yen. The main factors include increases of 1,109 million yen in cash and deposits,
173 million yen in work in process and 359 million yen in other current assets due to an increase in prepaid expenses,
while there was a decrease of 1,609 million yen in notes and accounts receivable-trade. Non-current assets increased
1,192 million yen. The main factors include increases of 718 million yen in investment securities and 549 million yen
in goodwill.
Total liabilities decreased 194 million yen from the end of the previous fiscal year to 13,946 million yen. Current
liabilities decreased 368 million yen mainly due to decreases of 710 million yen in other current liabilities due to adecrease in accounts payable-other, 263 million yen in income taxes payable and 164 million yen in accounts payabletrade, while there was an increase of 782 million yen in advances received. Non-current liabilities increased 174
million yen mainly due to an increase in deferred tax liabilities included in other non-current liabilities.
Net assets increased 1,443 million yen from the end of the previous fiscal year to 34,493 million yen, and theshareholders’ equity ratio was 70.3%.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
We have reviewed the current performance trends and revised the earnings and dividend forecasts for the fiscal year
ending March 31, 2020 that were announced on May 13, 2019. For more information, please refer to “Revisions to
Earnings and Dividend Forecasts” (Japanese version only) that was announced today (November 11, 2019).

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

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2018(As of Mar. 31, 2019)(Thousands of yen)
Second quarter of FY2019(As of Sep. 30, 2019)

AssetsCurrent assets
Cash and deposits

18,523,202

19,632,590

Notes and accounts receivable-trade

5,870,720

4,260,924

Securities

6,700,000

6,700,000

Merchandise and finished goods

345,764

365,396

Work in process

109,325

282,730

3,761

3,014

Other

2,336,168

2,695,526

Allowance for doubtful accounts(25,786)(20,113)33,863,156

33,920,069

Buildings and structures, net

2,782,237

2,812,792

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

486,151

6,244,812

6,314,046

Goodwill

492,088

1,041,937

Other

628,999594,267

1,121,088

1,636,204

Investment securities

4,919,667

5,638,373

Other

1,042,243

931,961

Total investments and other assets

5,961,910

6,570,335

13,327,811

14,520,586

47,190,967

48,440,655

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 FY2019

FY2018(As of Mar. 31, 2019)(Thousands of yen)
Second quarter of FY2019(As of Sep. 30, 2019)

Liabilities
Current liabilities
Accounts payable-trade827,244663,223

Income taxes payable

630,106

366,332

Advances received

5,455,151

6,238,099

Provision for bonuses

846,582

877,567

Other provisions

84,53340,413Other

2,273,360

1,563,012

Total current liabilities

10,116,979

9,748,648

3,842,064

3,840,635

181,867

357,613

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

4,023,931

4,198,248

14,140,911

13,946,896

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,016

8,659,034

Retained earnings

12,230,462

13,324,033

Treasury shares
Total shareholders’ equity(16,365)(16,560)

30,990,177

32,083,573

2,022,397

2,442,512

22,984(142,487)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans(428,220)(313,801)

Total accumulated other comprehensive income

1,617,162

1,986,223

442,715423,962

33,050,055

34,493,759

47,190,967

48,440,655

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

4

ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2019(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)

Net sales

12,477,423

13,705,971

Cost of sales

3,489,379

3,742,744

Gross profit

8,988,044

9,963,227

Selling, general and administrative expenses

7,688,094

8,184,443

Operating profit

1,299,950

1,778,784

Non-operating income
Interest income

3,123

6,943

Dividend income

17,54041,965

Subsidy income

6,969

21,866

Foreign exchange gains

22,828-Other

46,561

29,497

Total non-operating income

97,023

100,272

Non-operating expenses
Foreign exchange losses-

51,373

Other

1,392

1,004

Total non-operating expenses

1,392

52,3781,395,580

1,826,677

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

24

1,715

Transfer of rights income-

137,219

Gain on liquidation of subsidiaries

23,321-

Total extraordinary income

23,345

138,934

Loss on disposal of non-current assets

861

2,678

Total extraordinary losses

861

2,678

1,418,064

1,962,933

Income taxes-current

385,140

479,100

Income taxes-deferred

40,20064,550Total income taxes

425,341

543,650

Profit992,722

1,419,282

8,387

215

984,335

1,419,067

Extraordinary losses

Profit before income taxes

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

5

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

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)992,722

1,419,282

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

1,083,588

420,115

3,161(165,472)

80,408114,418

1,167,158

369,061

2,159,881

1,788,343

2,151,494

1,788,128

8,387

215

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 FY2019(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)

1,418,064

1,962,933

Cash flows from operating activities
Profit before income taxes
Depreciation

337,130

326,956-(137,219)

Decrease (increase) in trade receivables

978,030

1,559,699

Increase (decrease) in trade payables(147,630)(643,186)

Transfer of rights income

Increase (decrease) in retirement benefit liability

173,057

139,755

Other, net(165,924)(18,382)

Subtotal

2,592,727

3,190,557

Interest and dividends received

21,30347,900Interest paid

(183)

(185)

Income taxes paid

(560,817)(730,119)Net cash provided by (used in) operating activities

2,053,030

2,508,152

Cash flows from investing activities
Decrease (increase) in time deposits(77,140)

56,160Purchase of property, plant and equipment(182,408)(187,966)

Purchase of intangible assets(92,138)(115,590)

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from transfer of rights(549,000)(100,800)-(432,557)

Other, net
Net cash provided by (used in) investing activities-

137,219

23,884

16,719(876,802)(626,816)-(79,443)

Cash flows from financing activities
Repayments of short-term borrowings
Repayments of long-term borrowings
Dividends paid-

(25,797)(279,001)(325,495)

Other, net(23,177)(25,385)

Net cash provided by (used in) financing activities(302,178)(456,123)

Effect of exchange rate change on cash and cash
equivalents

30,283(225,192)

Net increase (decrease) in cash and cash equivalents

904,332

1,200,020

Cash and cash equivalents at beginning of period

16,609,271

18,137,895

Cash and cash equivalents at end of period

17,513,603

19,337,916

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ZUKEN Inc. (6947) Financial Results for the Second Quarter of FY2019(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 FY2018 (Apr. 1, 2018 – Sep. 30, 2018)
Information about reportable segment net sales and profit or loss
Reportable segment
Japan

EuropeAmericas

Asia

Total

8,696,092

2,281,628

746,670753,032 12,477,423

602,947

427,140

18,661

38,142

9,299,040

2,708,768

765,332(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-

12,477,423

1,086,892 (1,086,892)-

791,175 13,564,316 (1,086,892)

12,477,423

Segment profit (loss)
1,038,064
70,209(23,335)
228,530 1,313,469(13,519)
1,299,950
Notes: 1. Adjustment amount in segment profit (loss) includes amount of -13,519 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 FY2019 (Apr. 1, 2019 – Sep. 30, 2019)
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)
Appropriated amount
Adjustmentin the 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
1,778,784
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.

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

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

First six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)
AmountComposition (%)(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
AmountComposition (%)

Japan

8,696,092

69.7

9,930,90572.5

Europe2,281,628

18.3

2,238,767

16.3

Americas746,670

6.0

875,3736.4

Asia

753,032

6.0

660,924

4.8

12,477,423

100.0

13,705,971

100.0

Total
(b) Orders received and order backlog
Segment

First six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)
Orders received
Order backlog(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
Orders received
Order backlog

Japan

10,177,154

7,683,701

11,398,264

8,258,232

Europe2,023,764

1,438,969

2,005,449

1,335,413

Americas421,678

792,294

393,002

978,141

Asia

662,878

517,861

679,572

354,206

13,285,475

10,432,826

14,476,288

10,925,994

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 FY2019(Reference) Results by product category are as follows.
(a) SalesFirst six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)
Product category
AmountComposition (%)(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
AmountComposition (%)

Printed Circuit Board design solutions

1,881,795

15.1

2,297,586

16.8

Circuit design solutions

2,702,065

21.7

3,325,286

24.3

IT solutions

2,662,380

21.3

2,719,102

19.8

Client services

5,228,072

41.9

5,362,158

39.1

3,109

0.0

1,836

0.0

12,477,423

100.0

13,705,971

100.0

OthersTotal(b) Orders received and order backlog
Product category

First six months of FY2018(Apr. 1, 2018 – Sep. 30, 2018)
Orders received
Order backlog(Thousands of yen)First six months of FY2019(Apr. 1, 2019 – Sep. 30, 2019)
Orders received
Order backlog

Printed Circuit Board design solutions

2,095,057

897,7072,512,169

892,748

Circuit design solutions

3,080,355

1,247,473

3,547,152

1,437,472

IT solutions

3,260,124

1,453,758

3,088,424

1,417,038

Client services

4,845,641

6,832,533

5,327,718

7,178,705

4,297

1,353

823

29

13,285,475

10,432,826

14,476,288

10,925,994

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 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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