Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending June 30, 2017 (IFRS)
November 10, 2016
Tokyo Stock Exchange (Second Section)
Company name: ZERO CO., LTD.
Code No: 9028
URL http://www.zero-group.co.jp/
Representative:
Takeo Kitamura, President and COO
Contact for inquiries:
Toshihiro Takahashi, Corporate Officer
General Manager, Group strategy division
Scheduled date for submitting quarterly report
November 11, 2016
Scheduled date for starting delivery of dividend
Creation of supporting documentation for quarterly results:
N/A
Quarterly results briefing:
N/A

Tel: 044-520-0106

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending June 30, 2017
(From July 1, 2016 to September 30, 2016)(1) Consolidated Results (total cumulative amount)
Revenue

1Q
FY20161Q
FY2015(Figures less than one million yen are rounded down.)

Percentages shown below are the rates of increase or decrease compared with the same quarter of the previous year.
Quarterly profit
Total
Quarterly
Operating income
Profit before tax
attributable tocomprehensive
earnings
owners of the parent
quarterly income

Millionyen%

Millionyen%

Millionyen%

Millionyen%

Millionyen%

Millionyen%

18,528

(4.1)

1,201

(12.3)

1,238(11.7)

688(27.2)

688(27.2)

607(35.5)

19,311

-

1,370

-

1,403

-

945

-

945

-

942

-

Quarterly earnings per share-basic
Yen

Quarterly earnings per share-diluted
Yen

1Q FY2016

41.49

41.33

1Q FY2015

56.26

-

(2)Consolidated Financial condition
Total assets

Equity attributable toowners of the parent

Total equity

Percentage of equity attributableto owners of the parent

Million yen

Million yen

Million yen%

1Q FY2016

35,327

17,73917,73950.2

FY201535,852

17,741

17,74149.5

2. Dividends
Dividend per share
At end of 1Q

At end of 2Q

FY2015Yen--

FY2016--

Forecast for FY2016(Note) Revision from most recently announced dividend forecast: None

At end of 3Q

At end of 4Q

Annual total

Yen
13.00

Yen
--

Yen
37.40

Yen
50.40

15.00

--

37.70

52.70

3. Consolidated Forecasts for FY2016 (From July 1, 2016 to June 30, 2017)
Percentages shown below are the rates of increase or decrease compared with the previous year.
Profit attributable toOperating income
Profit before tax
Earnings per share-basic
owners of the parent

Revenue
Millionyen
Whole FY2016

80,000%
2.8

Million
yen
5,600

%

Million

3.9

yen
5,600

%
2.0

Million
yen
3,500

%

Yen

1.3

210.94(Note) Revision from most recently announced earnings forecast: None

*Remarks(1) Changes in important subsidiaries during the consolidated cumulative first quarter of the current fiscal year (transfer of aparticular subsidiary which involves a change in the scope of consolidation): N/A
Included company name:, Excluded company name:(2) Changes in accounting policies, procedure or notation method for documenting consolidated financial statements①Changes in accordance with the revision of accounting standards and others: N/A②Changes other than above: N/A③Changes in accounting estimates: N/A(3) Number of issued shares (common shares)①Number of issued shares (including treasury stock) at the end of each period:
1Q FY2016: 17,560,242
FY2015: 17,560,242②Number of repurchased shares at the end of each period:
1Q FY2016: 967,732
FY2015: 967,732③Average number of issued shares during the fiscal year (excluding treasury stock) (quarterly total)
1Q FY2016: 16,592,510

1Q FY2015: 16,809,901*Information regarding the implementation of quarterly review proceduresThis Summary of Quarterly Financial Results is exempt from the quarterly review procedures stipulated by the Financial
Instruments and Exchange Act. The review of quarterly consolidated financial statements stipulated by the Financial Instruments
and Exchange Act will not have been completed by the time this Summary of Quarterly Financial Results is published.
*Information regarding the proper use of the earnings forecast and other special notes
The financial outlook and other forward-looking statements presented in this document are based on information currently available
to the Company and certain assumptions that are believed to be reasonable, and are not intended to be construed as guaranteeing
certain business performance outcomes. The actual business performance can vary significantly depending on various factors,
including the economic conditions in the primary markets both inside and outside the country and fluctuations in the exchange rates.

Accompanying Materials – Contents
1. Qualitative Information on the Financial Results for the First Quarter of the Current Fiscal Year .......................................

2(1) Business Performance Information ............................................................................................................................. .....

2(2) Information on Financial Position ...................................................................................................................................

3(3) Forecast for the next consolidated fiscal year .................................................................................................................

4

2. Matters Relating to Summary Information (Precautions) .....................................................................................................

4(1) Changes in important subsidiaries during the consolidated cumulative first quarter of the current fiscal year ..............

4(2) Changes in accounting policies or accounting estimates .................................................................................................

4

3. Summary of Quarterly Consolidated Financial Statements ..................................................................................................

6(1) Summary of the quarterly consolidated statement of financial position .........................................................................

6(2) Summary of quarterly consolidated statements of income ..............................................................................................

8(3) Summary of quarterly consolidated statements of comprehensive income ....................................................................

9(4) Summary of the quarterly consolidated statement of changes in equity .........................................................................

10(5) Summary of quarterly consolidated statements of cash flows ........................................................................................

11(6) Notes on Summary of Quarterly Consolidated Financial Statements .............................................................................

13(Notes on the going concern assumption) .....................................................................................................................

13(Segment information) ............................................................................................................................. ......................

13

－

1 －

1. Qualitative Information on the Financial Results for the First Quarter of the Current Fiscal Year
(1) Business Performance Information
During the consolidated cumulative first quarter of the current fiscal year, although Japan's economy was affected by aneconomic slowdown in developing countries, there has been an upward trend in business confidence, with improvements
in consumer confidence. On the other hand, it has become increasingly more difficult to maintain the balance of labor
supply and demand. Domestic new car sales by domestic automakers have remained weak, reaching only 99.5% of thesales achieved during the consolidated cumulative first quarter of the previous year (hereafter referred to as "the samequarter of the previous year"), according to the statistics provided by the Japan Automobile Manufacturers Association.
Although the used car market is showing signs of recovery when compared to the same quarter of the previous year, theexport of used cars has remained weak due to the effects of the strong yen.
In view of these facts, our Group has encouraged each segment to implement strategic operating activities to adapt to thechanging market environment, strengthened group synergy in our three business segments to create and deliver valueadded services, and promoted activities (including cost reduction) aimed at strengthening our revenue-management
system. However, a decrease in sales of new cars suffered by Nissan Motor Co., Ltd, the main client of our automobilerelated business segment (which is our Group's major segment), had a significant adverse impact on our revenues, which
decreased compared to the same quarter of the previous year.
During the current period, our Group achieved a revenue of 18,528 million yen (95.9% of that achieved during the samequarter of the previous year) and an operating income of 1,201 million yen (87.7% of that achieved during the samequarter of the previous year). Furthermore, our Group recorded a profit before tax of 1,238 million yen (88.3% of that
achieved during the same quarter of the previous year), and the quarterly profit attributable to owners of the parent
reached 688 million yen (72.8% of that achieved during the same quarter of the previous year).

Unit sales data relating to domestically-distributed cars
Domestic sales

Unit sales

From July 2015 to September 2015 From July 2016 to September 2016

Compared to theprevious year

New cars
Domestic automakers*1

1,158,919

1,152,842

99.5%(Nissan Motor)*1(144,314)(121,303)(84.1%)

Overseas automakers*272,59576,195105.0%

Registered car*3864,692

893,924103.4%

Light vehicles*4673,010675,307100.3%

1,537,702

1,569,231

102.1%

51,13446,786

91.5%

From July 2015 to September 2015 From July 2016 to September 2016

Compared to theprevious year

Used cars

Total
Cars registered forpermanent deletion*3

Exports
Domestic automakers'
new cars*1

1,157,234

1,175,938

101.6%

Used passenger vehicles*5354,709331,82293.5%*1 Calculated based on the statistics provided by the Japan Automobile Manufacturers Association*2 Calculated based on the statistics provided by the Japan Automobile Importers Association*3 Calculated based on the statistics provided by the Japan Automobile Dealers Association*4 Calculated based on the statistics provided by the Japan Light Motor Vehicle and Motorcycle Association*5 Estimated based on the number of used cars to be exported which have been registered for deletion, which is recorded in the statistics provided
by the Japan Automobile Dealers Association－

2 －The business performance of each segment is summarized below.
① Automobile-related businessNissan Motor Co., Ltd., our Company's main client, recorded domestic sales of 121,303 new cars (which is 84.1% ofthat recorded during the same quarter of the previous year) according to the statistics provided by the Japan Automobile
Manufacturers Association. Due to this, our automobile-related business segment suffered a decrease in revenues fromtransportation or maintenance of new Nissan cars. Although the vehicle transport business section has promoted
business building activities to bring in new clients for the new/used vehicle transport business, the used car export
business suffered a decrease in orders received due to exchange rate impacts, etc. Consequently, the automobile-related
business segment suffered a decrease in total sales.
Thus, the automobile-related business segment recorded a revenue of 13,529 million yen (which is 91.3% of thatrecorded during the same quarter of the previous year) and a segment income of 1,303 million yen (which is 90.4% ofthat recorded during the same quarter of the previous year).
② Human resources businessWith the Japanese economy going through a phase of recovery, the demand for manpower is increasing. Soaring laborcosts and difficulty in finding suitable workers in big cities, however, pose serious problems. Companies have broughtin temporary employees and hired properly-skilled workers to respond to the changing needs for human resource
utilization. In the face of a shrinking labor force as a result of the falling birth rate and the aging population, unique andeffective approaches are needed to secure adequate human resources. In view of these facts, and in order to make up for
weak business performance in urban areas, our Group has reviewed the target regions for business expansion, andshifted our business stations to rural areas where it is easier to secure the necessary personnel. As a result, the humanresources business segment recorded a revenue of 3,651 million yen (which is 114.9% of that recorded during the samequarter of the previous year) and a segment income of 121 million yen (which is 113.7% of that recorded during thesame quarter of the previous year).
③ General cargo transportation business
Due to steady performance of the harbor loading and unloading business, and because the storage and transportation
business section successfully developed new business opportunities with existing clients, the general cargotransportation business segment achieved increased revenue. Thus, the general cargo transportation business segment
recorded a revenue of 1,348 million yen (which is 102.5% of that recorded during the same quarter of the previousyear), and a segment income of 261 million yen (which is 101.1% of that recorded during the same quarter of theprevious year) as a result of increased revenue.
The group-wide expenses (expenses related to the Company's management division), which are not presented in theabove-mentioned segment reports, are reported as "Adjustments" (484 million yen) specified under "3. Summary of
Quarterly Consolidated Financial Statements (Segment Information)".
(2) Information on Financial Position①Financial position relating to assets, liabilities and equity(Assets)
Current assets decreased by 677 million yen (3.7%) compared to the previous consolidated fiscal year end, down to
17,669 million yen.
This is mainly due to a 1,608-million-yen decrease in cash and cash equivalents the 963-million-yen increase intrade and other receivables.
Non-current assets increased by 152 million yen (0.9%) compared to the previous consolidated fiscal year end, up to
17,658 million yen.
This is mainly due to a 161-million-yen increase in leased assets (which include property, plant and equipment).
Thus, the total assets decreased by 525 million yen (1.5%) compared to the previous consolidated fiscal year end,
down to 35,327 million yen.
(Liabilities)
Current liabilities decreased by 69 million yen (0.6%) compared to the previous consolidated fiscal year end, down to
12,109 million yen.
This is mainly due to a 1,093-million-yen decrease in income taxes payable despite the 725-million-yen increase intrade and other payables.
Non-current liabilities decreased by 453 million yen (7.7%) compared to the previous consolidated fiscal year end,－

3 －

down to 5,478 million yen.
Thus, the total liabilities decreased by 523 million yen (2.9%) compared to the previous consolidated fiscal year end,
down to 17,587 million yen.
(Equity)
The total equity decreased by 1 million yen (0.0%) compared to the previous consolidated fiscal year end, down to
17,739 million yen.
This is mainly due to a 98-million-yen decrease in exchange differences on translation of foreign operations due toexchange-rate fluctuations, despite the 75-million-yen increase in retained earnings due to the incorporation of the
profit attributable to owners of the parent, etc.

－

4 －

②Cash flow status
Cash and cash equivalents (hereafter referred to as "funds") at the end of the first quarter consolidated fiscal year
accounting period were decreased by 1,608 million yen compared to the previous consolidated fiscal year end, down to6,316 billion yen.
The cash flow status and its underlying factors for the first quarter

consolidated fiscal year are summarized below.

(Cash flows from operating activities)
The funds used in operating activities amounted to 805 million yen (as compared to 315 million yen during the same
term of the previous year).
Income mainly comes from a quarterly profit of 688 million yen and depreciation and amortization of 254 million
yen, whereas expenses mainly come from income taxes paid amounting to 1,613 million yen.
(Cash flows from investing activities)
The funds used in investing activities amounted to 144 million yen (as compared to 142 million yen during the same
term of the previous year).
Income mainly comes from proceeds from sales of property, plant, and equipment which amounted to 57 million yen,whereas expenses mainly come from payments for intangible assets amounting to 89 million yen.
(Cash flows from financing activities)
The funds used in financing activities amounted to 659 million yen (as compared to 1,170 million yen during the same
term of the previous year).
Expenses mainly come from repayment of long-term borrowings which amounted to 305 million yen and dividends
paid amounting to 620 million yen.
(3) Forecast for the next consolidated fiscal year
No changes have been made to the consolidated performance forecast announced on August 10, 2016.

2. Matters Relating to Summary Information (Precautions)(1) Changes in important subsidiaries during the consolidated cumulative first quarter of the current fiscal year
N/A
(2) Changes in accounting policies or accounting estimates
N/A

－

5 －

3. Summary of Quarterly Consolidated Financial Statements(1) Summary of the quarterly consolidated statement of financial position(Million yen)
End of Fiscal 2015
(June 30, 2016)

End of 1Q Fiscal 2016
(September 30, 2016)

AssetsCurrent assets
Cash and cash equivalents

7,924

6,316

Trade and other receivables

9,036

9,999

Other financial assets

167

170

Inventories

779

688

Other current assets

438

493

18,346

17,669Property, plant and equipment

8,447

8,630

Goodwill, Intangible assets

2,232

2,265

Investments properties

3,791

3,717

973

912

Other financial assets

1,393

1,473

Other non-current assets

115

140

Deferred tax assets

552

518

Total non-current assets

17,506

17,658

Total assets

35,85235,327

Total current assets
Non-current assets

Investments accounted for using the equity
method－6 －(Million yen)
End of Fiscal 2015
(June 30,2016)

End of 1Q Fiscal 2016
(September 30,2016)

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

5,647

6,372

Borrowings

2,235

2,522

Other financial liabilities

496

525

Income taxes payable

1,594

500

Other current liabilities

2,205

2,188

12,17912,109768

575

Other financial liabilities

1,943

2,117

Retirement benefits liabilities

2,476

2,448

Other non-current liabilities

741

331

2

4

5,932

5,478

18,111

17,587

Share capital

3,390

3,390

Capital surplus

3,249

3,261

Treasury stock

(561)

(561)

21

(66)

Retained earnings

11,64011,716

Total equity attributable to owners of the parent

17,741

17,739Total equity

17,741

17,739Total liabilities and equity

35,85235,327

Total current liabilities
Non-current liabilities
Borrowings

Deferred tax liabilities
Total non-current liabilities
Total liabilities
EquityOther components of equity－

7 －(2) Summary of quarterly consolidated statements of income(Million yen)
1Q Fiscal 2015
(From July 1, 2015
to September 30, 2015)
Revenue

1Q Fiscal 2016
(From July 1, 2016
to September 30, 2016)

19,311

18,528(16,191)(15,406)

3,120

3,121

(1,827)(1,990)

Other income

80

77

Other expenses

(2)

(7)

1,370

1,201

Finance income

16

14

Finance costs

(18)

(14)

Share of profit (loss) of investments accounted forusing the equity method

35

37

Profit before tax

1,403

1,238

Income tax expense

(458)

(550)

Quarterly profit

945

688

945

688

56.26

41.49

-

41.33

Cost of sales
Gross profit
Selling, general and administrative expenses

Operating profit

Quarterly profit attributable to:
Owners of the parent
Quarterly earnings per share attributable to owners of
the parent
Basic quarterly earnings per share (yen)Diluted quarterly earnings per share (yen)－8 －(3) Summary of quarterly consolidated statements of comprehensive income(Million yen)
1Q Fiscal 2015
(From July 1, 2015
to September 30, 2015)
Quarterly profit

1Q Fiscal 2016
(From July 1, 2016
to September 30, 2016)
945

688

Remeasurement of defined benefit pension plans

5

7

Total items that will not be reclassified to profit and
loss

5

7

(17)

9

Share of other comprehensive income ofinvestments accounted for using the equity method

8

(98)

Total items that may be reclassified to profit and
loss

(8)

(88)

Other comprehensive income for the year, net of tax

(3)

(80)

942

607

942

607

Other comprehensive income
Items that will not be reclassified to profit and loss

Items that may be reclassified to profit and loss
Assets measured at fair value through othercomprehensive income

Total quarterly comprehensive income

Total quarterly comprehensive income attributable to:
Owners of the parent－

9 －(4) Summary of the quarterly consolidated statement of changes in equity
Consolidated cumulative first quarter of the previous fiscal year (from July 1, 2015 to September 30, 2015)(Million yen)
Total equity attributable to owners of the parent
Other components of equity
NotenumberBalance at the beginning of
FY2015

Share capital

CapitalsurplusTreasury
stock

3,390

3,176

(152)

Financial
Exchange
assetsRemeasurem
differences measured at
ent ofTotal otheronfair value
definedcomponents
translation of throughbenefitof equity
foreignotherpensionoperations comprehensi
plans
ve income
68

54

-

Quarterly profit
Other comprehensive income
Total quarterlycomprehensive income--

Acquisition of treasury stock

-

9,066

15,603

15,603

-

945

945

945

(3)

(3)

942

942

(409)

(409)

(16)

5

(3)

7

(16)

5

(3)

945

-

Dividends
Reclassification from othercomponents of equity to retained
earnings

Total equity Total Equity
attributableto owners of
the parent

123

7

(409)

Retainedearnings

-

(333)

(333)

(333)

(5)

(5)

5

-

-

Total comprehensive income
for the year attribute toowners of the parent

-

-

(409)

-

-

(5)

(5)

(328)

(742)

(742)

Balance at the end of 1Q FY2015

3,390

3,176

(561)

76

38

-

114

9,684

15,80315,803

Consolidated cumulative first quarter of the current fiscal year (from July 1, 2016 to September 30, 2016)(Million yen)
Total equity attributable to owners of the parent
Other components of equity
NotenumberBalance at the beginning of
FY2016

Share capital

CapitalsurplusTreasury
stock

3,390

3,249

(561)

Financial
Exchange
assetsRemeasurem
differences measured at
ent ofTotal otheronfair value
definedcomponents
translation of throughbenefitof equity
foreignotherpensionoperations comprehensi
plans
ve income
(53)

75

-

Quarterly profit
Other comprehensive income
Total quarterlycomprehensive income

-

-

-

11,64017,741

17,741

-

688

688

688

(80)

(80)

607

607

-

-

(620)

(620)

11

11

(98)

9

7

(80)

(98)

9

7

(80)
-

Dividends

11

688

(620)

-

Reclassification from othercomponents of equity toretained earnings

Total equity Total Equity
attributableto owners of
the parent

21

Acquisition of treasury stock

Stock benefit contribution

Retainedearnings

(7)

(7)

7

-

-

Total comprehensive income
for the year attribute toowners of the parent

-

11

-

-

-

(7)

(7)

(612)

(608)

(608)

Balance at the end of 1Q FY2016l

3,390

3,261

(561)

(152)

85

-

(66)

11,716

17,73917,739－10 －(5) Summary of quarterly consolidated statements of cash flows(Million yen)
1Q Fiscal 2015
(From July 1, 2015
to September 30, 2015)

1Q Fiscal 2016
(From July 1, 2016
to September 30, 2016)

Cash flows from operating activities:
Quarterly profit

945

688

Depreciation and amortization

228

254

Interest income and dividends

(1)

(7)

Interest expenses

17

11

Share of (profit) loss of investments accounted forusing the equity method

(35)

(37)

Income tax expense

458

550

(Increase) decrease in trade receivables

(381)

(717)

(Increase) decrease in inventories

24

90

Increase (decrease) in trader payables

110

111

Increase (decrease) in retirement benefit liabilities

(31)

(16)

Other

(700)

(115)

Sub total

634

812

1

7

Interest paid

(18)

(11)

Income taxes paid

(933)

(1,613)

Net cash provided by (used in) operating activities

(315)

(805)

Payments for property, plant and equipment

(110)

(65)

Proceeds from sales of property, plant andequipment

1

57

Payments for intangible assets

(41)

(89)

Increase in loans receivable

(21)

(3)

Proceeds from collection of loans receivable

30

9

Other

(0)

(53)

(142)

(144)

Interest received

Cash flows from investing activities:

Net cash provided by (used in) investing activities

－

11 －

(Million yen)

1Q Fiscal 2015
(From July 1, 2015
to September 30, 2015)

1Q Fiscal 2016
(From July 1, 2016
to September 30, 2016)

Cash flows from financing activities
Increase (decrease) in short-term borrowings, net

(20)

350

Proceeds from long-term borrowings

80

50

Repayment of long-term borrowings

(384)

(305)

Repayment of finance lease liabilities

(103)

(132)

Dividends paid

(333)

(620)

Payment for treasury stocks

(409)

-

(1,170)(659)

Increase (decrease) in cash and cash equivalents, net(1,628)(1,608)Cash and cash equivalents at the beginning of the year

5,856

7,924

Cash and cash equivalents at the end of the quarter

4,227

6,316

Net cash provided by (used in) financing activities

－

12 －

(6) Notes on Summary of Quarterly Consolidated Financial Statements(Notes on the going concern assumption)
N/A(Segment information)
The following summarizes the information on each segment of our Group.
Consolidated cumulative first quarter of the previous fiscal year (from July 1, 2015 to September 30, 2015)
Adjustments(Note )

Summary ofquarterly
consolidated
statements
of income

19,311-

19,311

20

124

(124)

-

3,266

1,335

19,435(124)

19,311

106

258

1,806

(435)

1,370

Automobilerelated
business

Human
resourcesbusiness

General cargotransportation
business

14,817

3,178

1,315

16

87

14,833
1,441

Total

Revenue
Revenue to external customers
Inter-segment Revenue or transfers
Total
Segment income

Note. The adjustment amount of (435) million yen in segment income included group-wide expenses of (435) million yen, andinter-segment eliminations of 0 million yen. Group-wide expenses are expenses related to the Company's management
division that are not attributable to reportable segments.

Consolidated cumulative first quarter of the current fiscal year (from July 1, 2016 to September 30, 2016)
Adjustments(Note )

Summary ofquarterly
consolidated
statements
of income

18,528-18,528

27

144

(144)

-

3,748

1,375

18,672(144)

18,528

121

261

1,685

(484)

1,201

Automobilerelated
business

Human
resourcesbusiness

General cargotransportation
business

13,529

3,651

1,348

19

97

13,549
1,303

Total

Revenue
Revenue to external customers
Inter-segment Revenue or transfers
Total
Segment income

Note. The adjustment amount of (484) million yen in segment income included group-wide expenses of (484) million yen, andinter-segment eliminations of (0) million yen. Group-wide expenses are expenses related to the Company's management
division that are not attributable to reportable segments.

－

13 －