Summary of Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending June 30, 2017 (IFRS)
May 12, 2017
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 CEO
Contact for inquiries:
Toshihiro Takahashi, Corporate Officer
General Manager, Group strategy division
Scheduled date for submitting quarterly report
May 15, 2017
Scheduled date for starting delivery of dividend
Creation of supporting documentation for quarterly results:
No
Quarterly results briefing:No

Tel: 044-520-0106

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending June 30, 2017
(From July 1, 2016 to March 31, 2017)(1) Consolidated Results (total cumulative amount)
Revenue

3Q
FY20163Q
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%

59,375

0.2

4,534

0.7

4,492

(2.9)

2,801

(8.2)

2,801

(8.2)

3,013

2.5

59,235

-

4,502

-

4,625

-

3,053

-

3,053

-

2,939

-

Quarterly earnings per share-basic
Yen

Quarterly earnings per share-diluted
Yen

3Q FY2016

168.29168.023Q FY2015

183.22183.04(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%

3Q FY2016

37,78019,916

19,91652.7

FY201535,852

17,741

17,74149.5

2. Dividends
Dividend per share
At end of 1Q

At end of 2Q

FY2015

Yen
--

Yen
13.00

FY2016--15.00

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

At end of 3Q

At end of 4Q

Annual total

Yen
--

Yen
37.40

Yen
50.40

--

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

Millionyen
5,600

Million

%

yen

3.9

5,600

%
2.0

Million
yen
3,500

%

Yen

1.3

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

*Remarks(1) Changes in important subsidiaries during the consolidated cumulative third 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 statements
Changes in accordance with the revision of accounting standards and others: N/AChanges other than above: N/AChanges in accounting estimates: N/A(3) Number of issued shares (common shares)
Number of issued shares (including treasury stock) at the end of each period:
3Q FY2016: 17,560,242
FY2015: 17,560,242
Number of repurchased shares at the end of each period:
3Q FY2016: 938,335
FY2015: 967,732
Average number of issued shares during the fiscal year (excluding treasury stock) (quarterly total)
3Q FY2016: 16,646,961

3Q FY2015: 16,665,237*Earnings summary is not within the scope of the quarterly reviews*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 Third 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 ...........................................................................................................

5

Summary of Quarterly Consolidated Financial Statements ..................................................................................................
(1)
Summary of the quarterly consolidated statement of financial position ....................................................................

6
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. Qualitative Information on the Financial Results for the Third Quarter of the Current Fiscal Year
(1) Business Performance Information
During the consolidated cumulative third quarter of the current fiscal year, although a slow recovery of Japan's economy withimprovements in consumer confidence, there has been a transition in the uncertain situation and as shown by

the rise in the jobs-to-

applicants ratio, it has become increasingly more difficult to maintain the balance of labor supply and demand. Domestic new car sales bydomestic automakers are estimated to pick up reaching 104.1% of the sales achieved during the consolidated cumulative third quarter ofthe previous year (hereafter referred to as "the same period of the previous year") according to the statistics provided by the Japan
Automobile Manufacturers Association. Domestic sales of the used car market is becoming stronger reaching 100.8% when compared tothe same period of the previous year although the export of used cars has remained weak reaching only 94.1% year-on-year.
In view of these facts, our Group has encouraged each segment to implement strategic operating activities to adapt to the changing
market environment, strengthened group synergy in our three business segments to create and deliver value-added services, and promoted
activities (including cost reduction) aimed at strengthening our revenue-management system.


During the current period, our Group achieved revenue of 59,375 million yen (100.2% of that achieved during the same period of theprevious year) and an operating income of 4,534 million yen (100.7% of that achieved during the same period of the previous year).
Furthermore, our Group recorded a profit before tax of 4,492 million yen (97.1% of that achieved during the same period of the previousyear), and the quarterly profit attributable to owners of the parent reached 2,801 million yen (91.8% of that achieved during the same
period of the previous year).


Unit sales data relating to domestically-distributed cars
Domestic sales

Unit sales

From July 2015 to March 2016

From July 2016 to March 2017

Compared to theprevious year

New cars
Domestic automakers*1

3,622,203

3,770,386

104.1%(Nissan Motor)*1(452,115)(467,587)

103.4%)

Overseas automakers*2

217,777

230,275

105.7%

Registered car*32,831,462

2,879,671

101.7%

Light vehicles*42,295,992

2,288,426

99.7%

5,127,454

5,168,097

100.8%

170,181

167,746

98.6%

From July 2015 to March 2016

From July 2016 to March 2017

3,509,411

3,556,562

Used cars

Total
Cars registered for permanentdeletion*3

Exports
Domestic automakers' new
cars

*1

Compared to theprevious year
101.3%

Used passenger vehicles*5 1,082,430
1,018,358
94.1%*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 isrecorded in the statistics provided by the Japan Automobile Dealers Association  The business performance of each segment is summarized below.
Automobile-related businessNissan Motor Co., Ltd., our Company's main client, recorded domestic sales of 467,587, new cars which is 103.4% of that recorded
during the same period of the previous year) according to the statistics provided by the Japan Automobile Manufacturers Association
but the automobile-related business segment which had suffered a decrease in revenues from transportation of new Nissan cars until
the second quarter of consolidated fiscal year, failed to recover. Although the vehicle transport business section has promoted businessbuilding activities to bring in new clients for the new/used vehicle transport business, the automobile related business segment
suffered a decrease in total sales due to the decline in orders received by the used car export business segment as a result of theslowdown in the used car export market from exchange rate impacts, etc.

Thus, the automobile-related business segment recorded revenue of 44,041 million yen (which is 96.5% of that recorded during thesame period of the previous year) and a segment income of 4, 650 million yen (which is 96.3% of that recorded during the same periodof the previous year).

Human resources businessWith the Japanese economy going through a phase of recovery, the demand for manpower is increasing. Soaring labor costs anddifficulty in finding suitable workers in big cities, however, pose serious problems. Companies have brought in temporary employees
and hired properly-skilled workers to respond to the changing needs for human resource utilization. In the face of the falling birth rate
and the aging population, unique and effective approaches are needed to secure adequate human resources. In view of these facts, andin order to make up for weak business performance in urban areas, our Group has reviewed the target regions for business expansion,and shifted our business stations to rural areas where it is easier to secure the necessary personnel. As a result, the human resourcesbusiness segment recorded revenue of 11,140 million yen (which is 114.0% of that recorded during the same period of the previousyear) and a segment income of 484 million yen (which is 142.9% of that recorded during the same period 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 businesssection successfully developed new business opportunities with existing clients, the general cargo transportation business segment
achieved increased revenue. Thus, the general cargo transportation business segment recorded

revenue of 4,192 million yen (which

is 109.6% of that recorded during the same period of the previous year), and a segment income of 787 million yen (which is 123.5% ofthat recorded during the same period of the previous year) as a result of increased revenue.

The group-wide expenses (expenses related to the Company's management division), which are not presented in the abovementioned segment reports, are reported as "Adjustments" (1,387 million yen) specified under "2. Summary of Quarterly Consolidated
Financial Statements and Important Notes (Segment Information)".



(2)

Information on Financial Position
Financial position relating to assets, liabilities and equity(Assets)
Current assets increased by 1,457 million yen (7.9%) compared to the previous consolidated fiscal year end, up to 19,804 million
yen.

This is mainly due to a 1,273 million-yen decrease in cash and cash equivalents and a 2,480 million-yen increase in trade and otherreceivables.

Non-current assets increased by 469 million yen (2.7%) compared to the previous consolidated fiscal year end, up to 17,976 million
yen.
This is mainly due to a 681 million-yen increase in leased assets (which include property, plant and equipment).
Thus, the total assets increased by 1,927 million yen (5.4%) compared to the previous consolidated fiscal year end, up to 37,780
million yen.

  (Liabilities)
Current liabilities increased by 147 million yen (1.2%) compared to the previous consolidated fiscal year end, up to 12,327 million
yen.
This is mainly due to a 1,236-million-yen decrease in income taxes payable and a 1,573 million-yen increase in trade and otherreceivables.
Non-current liabilities decreased by 395 million yen (6.7%) compared to the previous consolidated fiscal year end, down to 5,536
million yen.
Thus, the total liabilities decreased by 247 million yen (1.4%) compared to the previous consolidated fiscal year end, down to
17,863 million yen.

(Equity)
The total equity increased by 2,175 million yen (12.3%) compared to the previous consolidated fiscal year end, up to 19,916 million
yen.
This is mainly due to a 2,015-million-yen increase in retained earnings due to the incorporation of the profit attributable to ownersof the parent, etc.



 

Cash flow status
Cash and cash equivalents (hereafter referred to as "funds") at the end of the third quarter consolidated fiscal year accounting period
were decreased by 1,273 million yen compared to the previous consolidated fiscal year end, down to 6,650 million yen.
The cash flow status and its underlying factors for the third quarter consolidated fiscal year are summarized below.
(Cash flows from operating activities)
The funds used in operating activities amounted to 832 million yen (as compared to 38.7% during the same period of the previousyear).
Income mainly comes from quarterly profit of 2, 801 million yen and depreciation and amortization of 814 million yen, whereas
expenses mainly come from income taxes paid amounting to 2,658 million yen.


(Cash flows from investing activities)
The funds used in investing activities amounted to 261 million yen (as compared to 383 million yen during the same period of theprevious year).
Income mainly comes from proceeds from sales of property, plant, and equipment which amounted to 71 million yen, whereas
expenses mainly come from payments for property, plant, and equipment amounting to 242 million yen.


(Cash flows from financing activities)
The funds used in financing activities amounted to 1,845 million yen (as compared to 2,039 million yen during the same period of theprevious year).
Expenses mainly come from repayment of long-term borrowings which amounted to 982 million yen and dividends paid amounting
to 869 million yen.

Forecast for the next consolidated fiscal year
No changes have been made to the consolidated performance forecast announced on August 10, 2016.





 

Summary of Quarterly Consolidated Financial Statements and the Important Notes
Summary of the quarterly consolidated statement of financial position(Million yen)End of Fiscal 2015
(June 30, 2016)

End of 3Q Fiscal 2016
(March 31, 2017)

AssetsCurrent assets









Cash and cash equivalents

 



Trade and other receivables   Other financial assets









Inventories



Other current assets

 





  Total current assets 

Non-current assets
Property, plant and equipment





 

Goodwill, Intangible assets  

Investments properties 

Investments accounted for using the equity
methodOther financial assets 

Other non-current assets
Deferred tax assets
Total non-current assets
Total assets



 









 





 

   

 



 

 






Million yenEnd of 3Q Fiscal 2016
(March 31, 2017)




Note
No.

Liabilities and equity

End of Fiscal 2015
(June 30, 2016)Liabilities







Current liabilities







Trade and other payables









Borrowings 

 

Other financial liabilities



 



Income taxes payable  

Other current liabilities 

 

 

Borrowings







Other financial liabilities  

Retirement benefits liabilities







 

Other non-current liabilities





 

Deferred tax liabilities







Total non-current liabilities





  

Total liabilities 



Share capital



Capital surplus 



Treasury stock









Total current liabilities
Non-current liabilities

Equity



 



Other components of equity



Retained earnings











 



 



 



 



 



 

Total equity attributable to owners of the parent
Total equity
Total liabilities and equity





 

 




Summary of quarterly consolidated statements of incomeMillion yen

3Q Fiscal 2015
(From July 1, 2015
to March 31, 2016)

Revenue

3Q Fiscal 2016
(From July 1, 2016
to March 31, 2017)

 

Cost of sales





 



   

 



 



Other income

 





Other expenses



 

 

  





Gross profit
Selling, general and administrative expenses

Operating profit
Finance income
Finance costs
Share of profit (loss) of investments accounted forusing the equity method
Profit before tax
Income tax expense

 





 

  

 



Quarterly 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)



 

Summary of quarterly consolidated statements of comprehensive income
Million yen




Note
No.

3Q Fiscal 2015
(From July 1, 2015
to March 31, 2016)

3Q Fiscal 2016
(From July 1, 2016
to March 31, 2017)

Quarterly profit  

Other comprehensive income







Items that will not be reclassified to profit and loss







Re-measurement of defined benefit pension plans









Total 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




 

Share of other comprehensive income ofinvestments accounted for using the equity
methodTotal items that may be reclassified to profit and
loss


 



 

 






































Other comprehensive income for the year, net of tax
Total quarterly comprehensive income

Total quarterly comprehensive income attributable to:
Owners of the parent  Summary of the quarterly consolidated statement of changes in equity
Consolidated cumulative third quarter of the previous fiscal year (from July 1, 2015 to March 31, 2016
(Million yen)
Total equity attributable to owners of the parent
Other components of equity

Treasurystock


Share capital

Balance at the beginning of
FY2015

FinancialassetsExchangemeasureddifference at fair
s on
value
translation throughof foreignotheroperations comprehensiveincomeCapitalsurplus

Remeasurem
ent ofdefinedbenefitpensionplans

Total
othercomponents ofequity



 











Total equity
Total Equity
Retained attributableearnings to owners of
the parent    

   

Quarterly profit











Other comprehensive income







 















Total quarterlycomprehensive income







 









 





Acquisition of treasury stock





 











 

 

Dividends





















Stock benefit contribution















Reclassification from othercomponents of equity toretained earnings















Total comprehensive
income for the year
attribute to owners of theparent





 

















Balance at the end of 3Q FY2015



































 





    

Consolidated cumulative third quarter of the current fiscal year (from July 1, 2016 to March 31, 2017)(Million yen)
Total equity attributable to owners of the parentTreasurystock



Other components of equity

FinancialassetsExchangemeasureddifference at fair
s on
value
translation throughof foreignotheroperations comprehensiveincomeCapitalShare capital
surplus

Balance at the beginning of
FY2016
Quarterly profit 







Total
other
components ofequity



 

















Total equity
Retained attributable Total Equity
earnings to owners of
the parent





     

Other comprehensive income









 











Total quarterlycomprehensive income









 





 





Acquisition of treasury stock





















Dividends















Stock benefit contribution



 

 















Reclassification from othercomponents of equity toretained earnings











 

 







Total comprehensive
income for the year
attribute to owners of theparent



 

 





 

 





  

  



 



 





  Balance at the end of 3Q FY2016 

Remeasurem
ent ofdefinedbenefitpensionplans













  













(5) Summary of quarterly consolidated statements of cash flows(Million yen)




3Q Fiscal 2015
(From July 1, 2015
to March 31, 2016)

3Q Fiscal 2016
(From July 1, 2016
to March 31, 2017)

Cash flows from operating activities:  

Depreciation and amortization

 

 

Interest income and dividends











 

Quarterly profit

Interest expenses
Share of (profit) loss of investments accounted forusing the equity method
Income tax expense(Increase) decrease in trade receivables (indicates increase)(Increase) decrease in inventories ( indicatesincrease)
Increase (decrease) in trader payables ( indicatesdecrease)
Increase (decrease) in retirement benefit liabilities( indicates decrease)Other
Sub total 

 

 

 





 

 

 

  





 





 

 

Interest received
Interest paid
Income taxes paid 

Net cash provided by (used in) operating activities 













 

Cash flows from investing activities:
Payments for property, plant and equipment





Proceeds from sales of property, plant andequipment
Payments for intangible assets





 

 

Proceeds from collection of loans receivable

 



Payments for loans receivable





Other



 

 

 

Net cash provided by (used in) investing activities  (Million yen)




3Q Fiscal 2015
(From July 1, 2015
to March 31, 2016)

3Q Fiscal 2016
(From July 1, 2016
to March 31, 2017)

Cash flows from financing activities

Increase (decrease) in short-term borrowings, net (△indicates decrease)







Proceeds from long-term borrowings

 

 

Repayment of long-term borrowings

 

Repayment of finance lease liabilities



  

Dividends paid

Payment for treasury stocks 

Net cash provided by (used in) financing activities








Increase (decrease) in cash and cash equivalents, net(△ indicates decrease)

 Cash and cash equivalents at the beginning of the year





 

Cash and cash equivalents at the end of the quarter







  (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 third quarter of the previous fiscal year (from July 1, 2015 to March 31, 2016)



Automobile-relatedbusinessHumanresourcesbusinessTotal













  

 

 







 

  



Total      

(Operating profit)

  



 

  

 

Revenue
Revenue to external customersInter-segment revenue or transfers

Segment income

General cargotransportation
business(Million yen)
Summary ofquarterly
Adjustments
consolidated(Note)
statements
of incomeNote. The adjustment amount of (1,302) million yen in segment income included group-wide expenses of (1,302) 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 third quarter of the current fiscal year (from July 1, 2016 to March 31, 2017)

Automobile-relatedbusiness

Segment income (Operating profit)

Adjustments(Note )Total





 

 







 







 

   

















  

Inter-segment Revenue or transfers
Total

General cargotransportation
business

Revenue
Revenue to external customers

Humanresourcesbusiness















(Million yen)
Summary ofquarterly
consolidated
statements
of income






Note. The adjustment amount of (1,387) million yen in segment income included group-wide expenses of (1,387) 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.
  