Progress and Outlook ofMedium-term Business Plan
(April 2019 - March 2022)

July 13, 2021

ZUKEN Inc.
Tokyo Stock Exchange, First Section
Securities code: 6947

Progress in First Two Years andFinal Year Outlook1

Progress in First Two Years and Final Year Outlook (Overview)(1) Minimized the second-year downturns in sales andearnings, the result of global market turmoil andrestrictions on sales activities, due to consistentinvestments by customers for innovations and reinforcing
the environment for design tasks(2) Markets in Japan are beginning to benefit from economicrecoveries that started late in 2020 in North America andChina and performance in the plan’s third year is slowly
returning to the original growth trajectory
Forecast record-high sales and earnings in FY3/22(3) Final preparations during the plan’s final year for the fullscale deployment of the MBSE (model-based systemsengineering) business2

Financial Summary (FY3/02-FY3/22)
Sales and Operating Profit(Billions of yen)

Sales

Operating profit

34.0

31.0
29.3 28.8

29.0

10.5

26.7

24.0

22.0
19.1

19.0

15.2 14.6

16.1 15.7

19.8
17.0

16.7

17.9 18.2 17.8

19.7

21.2

21.9 22.1

9.5

23.500
8.500

7.5

6.5
5.5
(Billions of yen)

14.0
9.0
4.0

2.09 1.92 1.95 2.38
0.10 0.27

3.05 3.39

2.83
1.59

1.46
0.88
-0.37

0.22

0.35 0.63

3.50
2.89

2.02

3.5

1.5
0.5

Plan

Forecast record-high sales and operating profit inFY3/22

4.5

2.5

1.00 0.77-1.003

11.5

0.0
-0.5
-0.5

Capital Expenditures by Manufacturers
Machine Tool Orders (3-month moving average)(Millions of yen)

(Millions of yen)Domestic (Japan) Demand(only for machinery manufacturers)

April

October

April

Orders for machinery
manufacturers in Japan

October

April

October

Overseas DemandApril

October

April

Prior-yearcomparison

October

OverseasdemandApril

OctoberPrior-yearcomparison

Source: Japan Machine Tool Builders' Association (JMTBA)

Monthly overseas demand is up year-on-year since theend of 2020 and demand in Japan since April
4Order Backlog (FY3/17-FY3/21)(Billions of yen)Order backlog by solutions/Client services

10.0
9.0

9.35

Client services (Maintenance)

8.33

Solutions
8.0

7.0

6.69

YoY+12.2%

7.17

7.23

6.0
5.0

3.46

4.0
3.0

2.94
2.07

2.88

2.38

2.0
1.0
0.0

FY3/175

FY3/18

FY3/19FY3/20FY3/21The plan’s final year started with a record-high order backlog+20.0%

By Product Categories
YoYchange(%)

FY3/20FY3/21

YoYchangePrinted Circuit Board
design solutions

812

835

+23+2.9%

Circuit design solutions

1,084

1,430

+345

+31.9%

IT solutions

983

1,190

+206+21.0%

Client services

8,331

9,346+1,015+12.2%

Total

11,211

12,803+1,591+14.2%

Order Backlog(Millions of yen)

The FY3/21 order backlog was higher than in FY3/20 in all solution categories
6By Regions
FY3/20FY3/21

YoY change

YoYchange
(%)

Japan

7,662

8,913+1,250+16.3%

Europe1,685

2,015+330+19.6%

USA

1,424

1,339-84-5.9%

Asia

439

534+94+21.6%

Total

11,211

12,803+1,591+14.2%

Order Backlog(Millions of yen)

The USA order backlog decreased because a large order was received in FY3/20
7

Performance and Outlook
by Business Segment

8Medium-term Sales/Earnings Targets and Results(Millions of yen)

Sales

Operating Profit(Millions of yen)

40,0005,000

32,00035,00030,00029,296

28,81931,000

(+8%)

4,000

3,500

3,391

26,787

YoY(+21%)3,050

25,00020,00015,0003,700

YoY

12,477

13,705

Full
year

3,000

13,071

2,000

2,891
1,778

Full
year

1,299

10,000

1H966

1,000

1H

5,000
00

FY3/19(Results)

FY3/20(Results)

FY3/21(Results)

FY3/22(Plan)

FY3/19(Results)

FY3/20(Results)

FY3/21(Results)

FY3/22(Plan)

Note: Foreign exchange rate assumptions for the Medium-term Business Plan are 103 yen/USD and 125 yen/EUR.

The targets for the plan’s final year have been lowered, but still aiming
for big increases in sales and operating profit
9Change in Operating Profit and Outlook for FY3/22
Higher gross Higher personnel expenses
profit margin
and R&D expenses(Billions of yen)

+0.4
Higher sales+1.5

Lower sales
Lower gross Lower other-0.34
profit margin expenses

-0.5
-0.8
Higher otherexpenses

-0.39

+0.47
-0.24
Higher personnel expenses
and R&D expenses

3.39

3.50
2.89

+0.61

-0.5

FY3/2010

FY3/21

FY3/22 (Plan)Reference: Sales by Solutions

Sales (Millions of yen)

FY3/20FY3/21

YoY change

Printed Circuit Board
design solutions

4,782

4,248-534

Circuit design solutions

7,361

5,926-1,435

IT solutions

6,193

7,042+849

Data Management

Client services

10,95911,602+643

Total

29,296

28,819-477

Client services aredivided into theabove twocategories

11

Design Automation

Reference: Product Category
Major products of each product category
Product Categories Used in Earnings Releases

Printed Circuit Board
design solutions

Major ProductsDesign Automation
Printed circuit board

Circuit design solutions
Wire harness

Data Management

IT solutions

CR-8000 Design Force
CR-8000 DFM Center
CR-5000 Board Designer

CR-8000 Design Gateway
CR-8000 System Planner
E3.series
Cabling Designer
Harness Designer
DS-2, visualBOM
Knowledge Explorer
Fortigate (NW Security)

Divided among the above categories

Client services and others

12(Maintenance services for products)

Sales by Product Category vs. FY3/20

Product Category

FY3/20FY3/21

YoY change

19,447

17,730-1,717-8.8%(5,463)(4,908)-555-10.2%

Data Management Solutions

9,848

11,089+1,240+12.6%

Total Sales

29,296

28,819-477-1.6%(Millions of yen)

Design Automation(of which WH Design)

13Changes in Sales by Product Category(Billions of yen)

Electronic Design
Automation

-1.16

29.3

Wire Harness

Data Management

-0.55

+1.24

Design Automation

FY3/20Electronic Design Automation
 Sales recovered somewhat in Q4
but were held down during theentire FY as project executions
have slowed down due to theuncertain business climate.
 Steady volume of investments
for innovations, mainly in theautomobile and electroniccomponents sectors

14-0.4828.8
FY3/21Wire Harness Design

Data Management

 A bigger impact of market
instability because of a larger
pct. of small/midsize users
than in the EDA category
 Good prospects for growth inthe factory DX solutions
market, but currently nosigns of a significant recovery

 The COVID-19 crisis has
increased demand for PDM
products and security solutions(provided by a Zuken affiliate) Increasing recognition of theimportance of strengthening
infrastructure for digitalengineeringOverseas Business Sales

Average exchange rates in FY3/20 were 109 yen/USD and 121 yen/EUR.
Average exchange rates in FY3/21 were 106 yen/USD and 124 yen/EUR.

(Billions of yen)Japan+0.02+0.1%

Overseas
Foreign exchange
Business
impact
-0.51

-0.48

+0.01

-5.9%
29.3
Japan 20.6
Europe 4.6
USA
2.1
Asia
2.0

FY3/201528.8
FY3/21

Changes in Sales by Region

Average exchange rates in FY3/20 were 109 yen/USD and 121 yen/EUR.
Average exchange rates in FY3/21 were 106 yen/USD and 124 yen/EUR.

(Billions of yen)

-0.25

8.7
Europe 4.6
USA2.1Asia
2.0

Europe

-0.5

-0.06
-0.2

USA

Asia
(including direct sales in China)

-5.4%

-2.7%

-10.1%+0.01
Foreignexchange
impact8.2

Sales in local currencies

FY3/21

FY3/20EuropeUSA

 Sales recovered somewhat
late in FY3/21 but many
projects were suspended ordelayed
 Sales activities for neworders in the industrial
machinery sector weresuspended

 Sluggish new orders but
stable earnings due to time
based license growth Unable to cover the decline
following the receipt of alarge order in FY3/20
 Newly acquired Vitech
contributed to sales

16Asia Sales activities decreasedeverywhere except Taiwan; thebusiness climate is especiallydifficult in India
 Sales started recovering late in
FY3/21 because of theresumption of economic activity
in China, South Korea, Taiwan
and other countries

Outlook for Business Categories
 Anticipate a recovery at major customers globally in thevolume of investments to upgrade and optimize design
operations →Design Automation
 Expect the acceleration of digitalization demand tocontinue because of the digital transformation trends
including working style reforms under current circumstance→IT Solution
 The planned full-scale start of MBSE solution sales in Japanand the launch of new automotive E/E (electronics andelectrical) design solutions to be a key for the next medium
term growth
17Policy for Shareholder Distributions
Consistent株主還元策の推移
Growth of Dividends(Unit: yen)
（単位：円）

Commemorative/special
dividends
記念配当・特別…
普通配当
Ordinary dividend

1010510101012141414141414

1720

20

2226

2930

32

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 The dividend has increased several times since 2008 and the annual dividend
was 30 yen for FY3/21 with the year-end dividend of 15 yen Zuken plans to pay an annual dividend of 32 yen for FY3/22
 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
18

Corporate Profile

The Zuken Group’s digital transformation special web pagehttps://www.zuken.co.jp/dx/

Digital transformation of the Zuken Group19Corporate Profile
ZUKEN Inc.
Established:
Capital:Employees:

December 17, 1976
10,117,065,000 yen
426 (non-consolidated)
1,445 (consolidated) (As of Mar. 31, 2021)
Tokyo Stock Exchange, First Section
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 financialposition) In-house development of technologies along with the use ofalliances, M&A and other measures to acquire new technologies
quickly as needed20

History
December 1976

Established as Zukei Shori Gijutsu Kenkyusho Inc.

June 2009

June 1978

Developed Japan's first CAD/CAM system "Create 2000" forthe design of printed circuit boards.

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

May 2010

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

June 2011

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

January 2011

Announced worldwide the release of the "CR-8000," a newgeneration electronic device design platform.

September 2013

Established "Zuken SOZO Center" in Silicon Valley, NorthAmerica.

August 2014

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

December 2014

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

February 2015

Established DiverSync Corporation.

March 2015

Established ZUKEN INDIA Pte. Ltd. in India.

July 2015

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

November 1983

Established ZUKEN AMERICA Inc. (now ZUKEN USA Inc.) inthe United States.

January 1988

Developed a new CAD system "CR-3000."

October 1991

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

January 1992

Established ZUKEN EUROPE GmbH (now ZUKEN GmbH) inGermany.

January 1992

Established ZUKEN KOREA Inc. in Seoul.

August 1992

Established ZUKEN SINGAPORE Pte. Ltd. in Singapore.

April 1994

Developed EDA vertical integration solution "CR-5000."

June 1994

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

September 1994

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

March 2000

Acquired all the shares of INCASES Engineering GmbH.

March 2002

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

June 2002

Established Shanghai Technical Center in Shanghai.

April 2016

The PreSight Division was spun off as Zuken PreSight Inc.

February 2004

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

December 2017

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

August 2005

Established ZUKEN TAIWAN Inc. in Taiwan.

August 2019

May 2006

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

October 2019

Acquired all the shares of Vitech Corporation (now ZukenVitech Inc.) of USA.
Established ZUKEN Modelinx Inc.

June 2007

Released "V54EE" based on "Catia V5."

21

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., and one other company)

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

AMERICAS

KoreaJapanChina:Sales OfficeTaiwan

Asia

India

Singapore

22

Zuken Group
Zuken Tec
Overseas subsidiaries
EuropeNorth America
Asia

Technology services(including support for modelbased development activities)

Design/manufacturing link
Knowledge/AI

23

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 forfuture results of operations. These figures are goals that the Zuken Group will attempt toreach by implementing its business strategies.

24

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