Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending June 30, 2017 (IFRS)
February 09, 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 reportFebruary 13, 2017
Scheduled date for starting delivery of dividend
March 10, 2017
Creation of supporting documentation for quarterly results:
N/A
Quarterly results briefing:
Yes, for the analyst

Tel: 044-520-0106

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

2Q
FY20162Q
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%

38,088

(1.4)

2,677

2.7

2,664

(0.2)

1,595

(8.4)

1,595

(8.4)

1,615

(0.3)

38,611

-

2,608

-

2,670

-

1,741

-

1,741

-

1,620

-

Quarterly earnings per share-basic
Yen

Quarterly earnings per share-diluted
Yen

2Q FY2016

95.83

95.73

2Q FY2015

104.29104.25(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%

2Q FY2016

36,032

18,75718,75752.1

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

Million
yen
5,600

%

Million

3.9

yen
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 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:
2Q FY2016: 17,560,242
FY2015: 17,560,242②Number of repurchased shares at the end of each period:
2Q FY2016: 938,291
FY2015: 967,732③Average number of issued shares during the fiscal year (excluding treasury stock) (quarterly total)
2Q FY2016: 16,646,982

2Q FY2015: 16,701,206*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 Second 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 second quarter of the current fiscal year ......

4(2)

Changes in accounting policies or accounting estimates ..............................................................................................

4

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

5(1)

Summary of the quarterly consolidated statement of financial position ......................................................................

5(2)

Summary of quarterly consolidated statements of income ...................................................................... ....................

7(3)

Summary of quarterly consolidated statements of comprehensive income .................................................................

8(4)

Summary of the quarterly consolidated statement of changes in equity ......................................................................

9(5)

Summary of quarterly consolidated statements of cash flows .....................................................................................

10

(6)

Notes on Summary of Quarterly Consolidated Financial Statements ..........................................................................

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

12(Segment information) ...................................................................................... .............................................................

12

－

1 －

1. Qualitative Information on the Financial Results for the Second Quarter of the Current Fiscal Year
(1) Business Performance Information
During the consolidated cumulative second quarter of the current fiscal year, Japan's economy was slowly recovering withimprovements in consumer confidence. On the other hand, there has been a transition in the uncertain situation and although there has
been a 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 by domestic automakers are estimated to pick up reaching 102.0 of the sales achieved during the consolidated
cumulative second quarter of the previous year (hereafter referred to as "the same

period of the previous year") according to thestatistics provided by the Japan Automobile Manufacturers Association, although the used car market is showing signs of a downturn
reaching only 93.3% when compared to the same period of the previous year. The export of used cars has remained weak due to theeffects of the strong yen.
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. However, in the automobile related segment(which is our Group's major segment), despite of the increase of used cars transportation and maintenance business, a decrease in sales of
new cars suffered by Nissan Motor Co., Ltd, the main client of our automobile-related business segment, had an impact on our revenues,
which decreased compared to the same period of the previous year.
During the current period, our Group achieved a revenue of 38,088 million yen (98.6% of that achieved during the same period of
the previous year) and an operating income of 2,677 million yen (102.7% of that achieved during the same period of the previous year).
Furthermore, our Group recorded a profit before tax of 2,664 million yen (99.8% of that achieved during the same period of the previousyear), and the quarterly profit attributable to owners of the parent reached 1,595 million yen (91.6% 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 December 2015

From July 2016 to December 2016

Compared to theprevious year

New cars
Domestic automakers*12,229,020

2,273,298

102.0%(Nissan Motor)*1(262,189)(254,561)（97.1%)

Overseas automakers*2

140,857

149,613106.2%

Registered car*31,770,011

1,795,479

101.4%

Light vehicles*4

1,373,044

1,135,801

82.7%

3,143,055

2,931,280

93.3%

103,300

95,84992.8%

From July 2015 to December 2015

From July 2016 to December 2016

*1

2,400,441

2,445,235

101.9%*5

699,628

641,643

91.7%

Used cars

Total
Cars registered forpermanent deletion*3

Exports
Domestic automakers' newcars
Used passenger vehicles

Compared to theprevious year

*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.
①Automobile-related businessNissan Motor Co., Ltd., our Company's main client, recorded domestic sales of 254,561 new cars (which is 97.1% of that recorded
during the same period 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 from transportation 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 27,850 million yen (which is 94.4% of that recorded during
the same period of the previous year) and a segment income of 2,756 million yen (which is 100.0% of that recorded during the same
period of the previous year).
② 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. As a result 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 a revenue of 7,415 million yen (which is 114.5% of that recorded during the same period of the previousyear) and a segment income of 296 million yen (which is 129.3% 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 a revenue of 2,822 million yen (which
is 106.8% of that recorded during the same period of the previous year), and a segment income of 561 million yen (which is 115.6% 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" (936 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 132 million yen (0.7%) compared to the previous consolidated fiscal year end, down to 18,214 million
yen.
This is mainly due to a 708million-yen decrease in cash and cash equivalents and 273 million yen decrease in inventory assets,
despite a 817 million-yen increase in trade and other receivables.
Non-current assets increased by 311 million yen (1.8%) compared to the previous consolidated fiscal year end, up to 17,817 million
yen.
This is mainly due to a 420 million-yen increase in leased assets (which include property, plant and equipment).
Thus, the total assets increased by 179 million yen (0.5%) compared to the previous consolidated fiscal year end, up to 36,032
million yen.
(Liabilities)
Current liabilities decreased by 519 million yen (4.3%) compared to the previous consolidated fiscal year end, down to 11,660
million yen.
This is mainly due to a 752-million-yen decrease in income taxes payable despite the 152-million-yen increase in debts payable.
Non-current liabilities decreased by 318 million yen (5.4%) compared to the previous consolidated fiscal year end, down to 5,613
million yen.
Thus, the total liabilities decreased by 837 million yen (4.6%) compared to the previous consolidated fiscal year end, down to
17,274 million yen.
(Equity)
The total equity increased by 1,016 million yen (5.7%) compared to the previous consolidated fiscal year end, up to 18,757 million
yen.
This is mainly due to a 1,053-million-yen increase in retained earnings due to the incorporation of the profit attributable to ownersof the parent, etc.

－

3 －

②Cash flow status
Cash and cash equivalents (hereafter referred to as "funds") at the end of the second quarter consolidated fiscal year accounting period
were decreased by 708 million yen compared to the previous consolidated fiscal year end, down to 7,215 million yen.
The cash flow status and its underlying factors for the second quarter consolidated fiscal year are summarized below.
(Cash flows from operating activities)
The funds used in operating activities amounted to 656 million yen (as compared to 56.1 million yen during the same term of theprevious year).
Income mainly comes from a quarterly profit of 1,595 million yen and depreciation and amortization of 529 million yen, whereas
expenses mainly come from income taxes paid amounting to 1,546 million yen.
(Cash flows from investing activities)
The funds used in investing activities amounted to 163 million yen (as compared to 291 million yen during the same term of theprevious year).
Income mainly comes from proceeds from sales of property, plant, and equipment which amounted to 62 million yen, whereas expenses
mainly come from payments for intangible assets amounting to 189 million yen.
(Cash flows from financing activities)
The funds used in financing activities amounted to 121 million yen (as compared to 1,549 million yen during the same term of theprevious year).
Expenses mainly come from repayment of long-term borrowings which amounted to 629 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 second quarter of the current fiscal year
Not applicable(2) Changes in accounting policies or accounting estimates
Not applicable－4 －3. Summary of Quarterly Consolidated Financial Statements(1) Summary of the quarterly consolidated statement of financial position(Million yen)
Note
No.

End of 2Q Fiscal 2016
(December 31, 2016)

End of Fiscal 2015
(June 30, 2016)

AssetsCurrent assets
Cash and cash equivalents

7,924

7,215

Trade and other receivables

9,036

9,853

Other financial assets

167

194

Inventories

779

506

Other current assets

438

443

18,346

18,214

Property, plant and equipment

8,447

8,984

Goodwill, Intangible assets

2,232

2,492

Investments properties

3,791

3,691

973

863

Other financial assets

1,393

1,469

Other non-current assets

115

83

Deferred tax assets

552

233

Total non-current assets

17,506

17,817

Total assets

35,852

36,032

Total current assets
Non-current assets

Investments accounted for using the equity
method－5 －（Million yen）
Note
No.

End of 2Q Fiscal 2016
(December 31, 2016)

End of Fiscal 2015
(June 30, 2016)

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

5,647

5,729

Borrowings

2,235

2,387

Other financial liabilities

496

562

Income taxes payable

1,594

842

Other current liabilities

2,205

2,138

12,17911,660768

546

Other financial liabilities

1,943

2,390

Retirement benefits liabilities

2,476

2,293

Other non-current liabilities

741

381

2

1

Total non-current liabilities

5,932

5,613

Total liabilities

18,111

17,274

Share capital

3,390

3,390

Capital surplus

3,249

3,254

Treasury stock

△561

△544

21

△36

11,64012,693

Total equity attributable to owners of the parent

17,741

18,757

Total equity

17,741

18,757

Total liabilities and equity

35,852

36,032

Total current liabilities
Non-current liabilities
Borrowings

Deferred tax liabilities

EquityOther components of equity
Retained earnings－

6 －(2) Summary of quarterly consolidated statements of income（Million yen）
Note
No.

2Q Fiscal 2015
(From July 1, 2015
to December 31, 2015)

2Q Fiscal 2016
(From July 1, 2016
to December 31, 2016)

38,611

38,088

Cost of sales△32,484△31,612Gross profit

6,126

6,476

△3,623△4,008Other income

122

266

Other expenses

△17

△56

2,608

2,677

Finance income

30

22

Finance costs

△35

△36

67

△0

Profit before tax

2,670

2,664

Income tax expense△928△1,068

Quarterly profit

1,741

1,595

1,741

1,595

Basic quarterly earnings per share (yen)104.2995.83

Diluted quarterly earnings per share (yen)104.25

95.73

Revenue

Selling, general and administrative expenses

Operating profit

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

Quarterly profit attributable to:
Owners of the parent
Quarterly earnings per share attributable to owners of
the parent－

7 －(3) Summary of quarterly consolidated statements of comprehensive income(Million yen)
Note
No.

2Q Fiscal 2015
(From July 1, 2015
to December 31, 2015)

Quarterly profit

2Q Fiscal 2016
(From July 1, 2016
to December 31, 2016)

1,741

1,595

Re-measurement of defined benefit pension plans

△52

78

Total items that will not be reclassified to profit
and loss△52

78

Assets measured at fair value through othercomprehensive income

△11

50

Share of other comprehensive income ofinvestments accounted for using the equity
method△58△109

Total items that may be reclassified to profit and
loss

△69

△58

Other comprehensive income for the year, net of tax

△121

20

1,620

1,615

1,620

1,615

Other comprehensive income

Items that will not be reclassified to profit and loss

Items that may be reclassified to profit and loss

Total quarterly comprehensive income

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

8 －(4) Summary of the quarterly consolidated statement of changes in equity
Consolidated cumulative second quarter of the previous fiscal year (from July 1, 2015 to December 31, 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

Exchangedifferences ontranslationof foreign
operations

Financialassetsmeasured
at fairvaluethroughothercomprehensiveincomeRemeasurem
ent ofdefinedbenefitpensionplans

Total othercomponents ofequityRetainedearnings

68

54

-

123

9,066

15,603

15,603

1,741

1,741

1,741

△121

△121

1,620

1,620

△409

△409

△333

△333

16

16

Quarterly profit
Other comprehensive income
Total quarterlycomprehensive income

-

-

-

△58

△10

△52

△121

△58

△10

△52

△121

1,741

△409

Acquisition of treasury stock
Dividends△333

Stock benefit contribution

16

Reclassification from othercomponents of equity toretained earnings
Total comprehensive
income for the year
attribute to owners of theparentBalance at the end of 2Q FY2015

Total equity
Total Equity
attributableto owners of
the parent

52

52

△52

-

-

-

16

△409

-

-

52

52

△385

△725

△725

3,390

3,192

△561

9

43

-

53

10,422

16,49816,498

Consolidated cumulative second quarter of the current fiscal year (from July 1, 2016 to December 31, 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

Exchangedifferences ontranslationof foreign
operations

Financialassetsmeasured
at fairvaluethroughothercomprehensiveincomeRemeasurement ofdefinedbenefitpensionplans

Total othercomponents ofequityRetainedearnings

△53

75

-

21

11,64017,741

17,741

1,595

1,595

1,595

20

20

1,615

1,615

△0

△0

△620

△620

21

21

Quarterly profit
Other comprehensive income
Total quarterlycomprehensive income

-

-

-

△109

50

78

20

△109

50

78

20

△0

Acquisition of treasury stock
Dividends△620

Stock benefit contribution

4

17

Reclassification from othercomponents of equity toretained earnings
Total comprehensive
income for the year
attribute to owners of theparentBalance at the end of 2Q FY2016

1,595

Total equity
Total Equity
attributableto owners of
the parent

△78

△78

78

-

-

-

4

17

-

-

△78

△78

△542

△598

△598

3,390

3,254

△544

△163

126

-

△36

12,69318,75718,757－9 －(5) Summary of quarterly consolidated statements of cash flows

Notenumber(Million yen)
2Q Fiscal 2016
(From July 1, 2016
to December 31, 2016)

2Q Fiscal 2015
(From July 1, 2015
to December 31, 2015)

Cash flows from operating activities:
Quarterly profit

1,741

1,595

Depreciation and amortization

465

529

Interest income and dividends△2△8Interest expenses

34

32

Share of (profit) loss of investments accounted forusing the equity method△67

0Income tax expense

928

1,068

△419

△799

△22

274

△121

△3

△71

△57

Other

△403

△405

Sub total

2,062

2,227

2

8

Interest paid

△34

△32

Income taxes paid

△806

△1,546

Net cash provided by (used in) operating activities

1,170

656

Payments for property, plant and equipment

△268

△189

Proceeds from sales of property, plant andequipment

2

62

Payments for intangible assets

△90

△161

Payments for loans receivable

△27

△9

Proceeds from collection of loans receivable

39

19

Other

52

115

△291

△163

(Increase) decrease in trade receivables (△ indicatesincrease)(Increase) decrease in inventories (△ indicatesincrease)
Increase (decrease) in trader payables (△ indicatesdecrease)
Increase (decrease) in retirement benefit liabilities(△ indicates decrease)

Interest received

Cash flows from investing activities:

Net cash provided by (used in) investing activities

－

10 －

Note
number(Million yen)
2Q Fiscal 2016
(From July 1, 2016
to December 31, 2016)

2Q Fiscal 2015
(From July 1, 2015
to December 31, 2015)

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

20

280

Proceeds from long-term borrowings

110

50

Repayment of long-term borrowings

△721

△629

Repayment of finance lease liabilities

△215

△281

Dividends paid

△333

△620

Payment for treasury stocks

△409

△0

Net cash provided by (used in) financing activities△1,549△1,201

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

△671

△708

Cash and cash equivalents at the beginning of the year

5,856

7,924

Cash and cash equivalents at the end of the quarter

5,185

7,215

－

11 －

(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 second quarter of the previous fiscal year (from July 1, 2015 to December 31, 2015)(Million yen)
Summary ofquarterly
consolidated
statements
of incomeAutomobilerelated
business

Human
resourcesbusiness

General cargotransportation
business

29,490

6,479

2,642

38,611-

38,611

30

180

40

251

△251

-

29,520

6,659

2,682

38,863△251

38,611

2,755

229

486

3,470

△862

2,608

Total

Adjustments(Note)

Revenue
Revenue to external customers
Inter-segment revenue or transfers
Total
Segment income (Operating profit)

Note. The adjustment amount of (862) million yen in segment income included group-wide expenses of (862) 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 second quarter of the current fiscal year (from July 1, 2016 to December 31, 2016)(Million yen)
Summary ofquarterly
consolidated
statements
of incomeAutomobilerelated
business

Human
resourcesbusiness

General cargotransportation
business

27,850

7,415

2,822

38,088－38,088

41

275

56

372

△372

－

27,891

7,691

2,878

38,461△372

38,088

2,756

296

561

3,614

△936

2,677

Total

Adjustments(Note )

Revenue
Revenue to external customers
Inter-segment Revenue or transfers
Total
Segment income (Operating profit)

Note. The adjustment amount of (936) million yen in segment income included group-wide expenses of (936) 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.

－

12 －