ゼンリン（9474） – [Delayed]Rolling Plan for Medium- to Long-Term Business Plan “ZENRIN GROWTH PLAN 2025”

FOR IMMEDIATE RELEASE April 28, 2022 Name of listed company: ZENRIN Co., Ltd. Representative: Zenshi Takayama President and CEO (Securities code: 9474) Contact: Yumiko Toshima Executive Officer, and Head of Corporate Management Division (TEL: +81-93-882-9050) Rolling Plan for Medium- to Long-Term Business Plan “ZENRIN GROWTH PLAN 2025” ZENRIN Co., Ltd. (Head Office: Kitakyushu City, Fukuoka Prefecture, President and CEO: Zenshi Takayama, hereafter “ZENRIN”) announces that, regarding the medium- to long-term business plan “ZENRIN GROWTH PLAN 2025” (hereafter “ZGP25”) , of which ZENRIN is currently in the 1st Stage (from fiscal 2020 through fiscal 2022), the rolling plan for the 2nd Stage (from fiscal 2023 through fiscal 2025) was resolved at the board of directors meeting held today based on the results of the 1st stage as follows. 1. Progress of ZGP25 1st Stage In ZGP25, ZENRIN has set up and worked on the following three basic policies under the theme of “optimization of ‘quality and quantity’ in network society.” 1. To create value from “activities” by connecting usage applications in business activities 2. To promote diversification of “goods” by connecting location information in production activities 3. To develop human capital from “people” by connecting individual wisdom to support business and production activities Positioning the 1st Stage from the fiscal year ending March 31, 2020 through the fiscal year ending March 31, 2022 as the “Business model transformation period,” ZENRIN has been working to enhance values to customers and strengthen the earnings base through the selective use of business models. (Main achievements and issues in the ZGP25 1st Stage) – As the result of efforts to plan and expand sales of packaged products, the shift from flow-type business to stock-type business has steadily progressed. – With the development of the circulation platform, an environment has been created in which various spatial information can be retrieved according to the various functions of the services. This has made it possible to develop applications and provide packaged products for solving business problems of companies. – In addition, ZENRIN has begun to develop a high-precision 3D map database that is indispensable for the realization of automated driving/safe driving support systems (AD/ADAS), drone operation management, smart cities, etc., and has also been actively involved in the alliance business. – ZENRIN also took on the challenge of consumer business fields such as the map design business and tourism-type MaaS, and strengthened individual initiatives for new business areas. – On the other hand, ZENRIN believes that the results were severe in terms of business performance due to the spread of COVID-19 infection and the impact of reduced production and sluggish sales of automobiles. ZENRIN recognizes that the automotive business and marketing solution business are greatly affected by changes in the external environment, and improving profitability through our own services, including stock-type services, is our top priority. 2. Overview of ZGP25 2nd Stage ZENRIN Group’s policy is sustainability management, which aims for sustainable corporate growth by supporting the resolution of social issues through the provision of location information. In the 2nd Stage, which is the three period from the fiscal year ending March 31, 2023 through the fiscal year ending March 31, 2025, ZENRIN will first aim to recover the sluggish business performance due to the COVID-19 pandemic in order to leap to the next growth stage. Furthermore, ZENRIN will work on innovation of location information to create new value by optimizing location and information in circulation for the social issues that have become apparent. (Initiatives to achieve the goal) I. Business policy – ZENRIN will stabilize the profitability of existing businesses by; 1. Expanding stock-type services by launching packaged products and on-demand services that capture market needs 2. Expanding our market share in the existing navigation business. – ZENRIN will promote profit growth by providing solutions for problems in the real estate, logistics, financial industries, etc. – ZENRIN will aim to monetize by establishing business models to support the resolution of regional issues such as smart cities and drone logistics. – ZENRIN will accelerate its efforts in consumer businesses such as tourism-type MaaS and map design products, and continue to invest in commercialization. II. Production policy In order to respond widely to smart cities, DX promotion in overall society, and a diversifying mobility society, ZENRIN will build up a high-precision network database that collects and manages all information related to location and connects it appropriately. ZENRIN will continue to work on improving the accuracy of spatio-temporal information with diversity and expandability so that spatial information that is the basis of network databases and information in circulation in the world can be connected agilely and utilized flexibly. III. Organizational and personnel policies ZENRIN aims to be a corporate group that is trusted by stakeholders, in which diverse human capital vigorously playing active roles in a vibrant organization. In the ZENRIN Group, we consider that fostering human capital who can respond to management strategies and changing business environments is the material for value creation, and by introducing and operating various systems that contribute to improving the level of employee engagement, ZENRIN will continue to work on “reform of job satisfaction”. Furthermore, with the aim of reducing the environmental burden, ZENRIN will work to reduce greenhouse gas emissions in our business activities. IV. Financial policy While maintaining a sound financial base by securing profits and improving asset efficiency, ZENRIN will continue to invest in the location information business field in order to strengthen our business base and return profits to shareholders based on profit growth. (Performance Targets) In ZGP25 2nd Stage, ZENRIN will work on recovering investments and improving operating profit margin as a priority issue by expanding stock-type services, creating various services and solutions from the circulation platform, and embodying business models. Consolidated Net Sales Consolidated Operating Income Consolidated Operating Margin ROE DOE (Basic Policy of Shareholder Return) (Amounts in billion yen) FY2023 (Forecast) 60.5 3.0 5.0% 5.3% 3% or higher FY2024 (Target) 62.3 4.0 6.4% 5.1% 3% or higher FY2025 (Target) 63.8 5.8 9.1% 7.3% 3% or higher Concerning income distribution, positioning the returning of income to shareholders as a top priority, the ZENRIN Group adopts a basic policy of implementing stable, uninterrupted payments of dividends derived from income growth based on the medium- to long-term business plan on a consolidated basis. In line with this policy, the ZENRIN Group will set dividend on equity (DOE) on a consolidated basis of 3% or higher as the target. By continuing to consider purchasing treasury shares and other undertakings with the aim of ensuring an agile capital policy and enhancing capital efficiency, the ZENRIN Group will return income to shareholders in accordance with the level of income, while taking into account the maintaining of an adequate amount of internal reserves. The internal reserves will be used for capital investment, research and development investment and other expenditures that are indispensable for business development in the future in order to keep pace with the rapid market changes. Please refer to the attachment for the details ZGP25. [Disclaimer] Any forward-looking statements contained in this document reflect the judgment of ZENRIN Co., Ltd. based on information currently available to ZENRIN Co., Ltd., and involve current or future risks and uncertainties. Actual results may vary significantly from these statements due to changes in various factors. The potential risks and uncertainties underlying such include, but are not limited to, changes in economic conditions, changes in legal regulations, delays in the development of new products, changes in customers, and natural disasters. Rolling Plan for Medium- to Long-Term Business PlanZENRIN GROWTH PLAN 2025ZGP25 2nd Stage (FY2023 to FY2025)Securities Code: 9474April 28, 20220Table of Contents1. Progress of ZGP25 1st Stage2. Overview of ZGP25 2nd StageAppendix．Basic Policy of ZGP25Note: This document contains forward-looking statements based on assumptions, forecasts and plans in light of information available to ZENRIN Co., Ltd. as ofthe preparation date of this document. Actual performance may vary significantly from the forecast figures due to various risks and uncertainties owing toglobal economic trends, market demand, status of competition, exchange fluctuations and other factors.The information that appears in this document rounds down fractions to the nearest specified unit and rounds off decimals in the percentage of change tothe first decimal place.©ZENRIN CO., LTD. All Rights Reserved.1１．Progress of ZGP25 1st Stage１) Basic Policy２) Basic Policy (ZIP as Business Platform)３) Scope and Structure of ZGP25４) Major Results and Challenges of ZGP25 1st Stage５) Net Sales by Business under the ZGP25 1st Stage©ZENRIN CO., LTD. All Rights Reserved.21.-1) Basic PolicyOptimization of “quantity and quality” in network society〜 Create values through the optimization of location information and information in circulation 〜Business(Activities)Real networkI. Create value from “activities” byconnecting usage applicationsProduction(Goods)LocationnetworkII. Promote diversification of “goods” by connecting location informationFunction(People)HumannetworkIII. Develop human capital from“people” by connecting wisdom ofindividualsExcerpts from ZGP25 presentation materials (released on April 26, 2019)©ZENRIN CO., LTD. All Rights Reserved.31.-2) Basic Policy (ZIP as Business Platform)©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)41.-3) Scope and Structure of ZGP251st Stage (3 terms)FY2020FY2021FY2022Business model transformation periodEnhance values to customers and strengthen the earnings base through the selective use of business models2nd Stage (3 terms)FY2023 ~ FY2025Becoming what we want to beCreate values through the optimization of location information and information in circulation©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)51.-4) Major Results and Challenges of ZGP25 1st StageZGP2020FY2019(Actual)ZGP25 1st StageFY2020(Actual)FY2021(Actual)FY2022(Actual)63.7 bn yen59.7 bn yen57.2 bn yen59.0 bn yen5.8 bn yen(9.1％)3.3 bn yen(5.5％)1.4 bn yen(2.5％)2.6 bn yen(4.5％)8.1％3.3％6.6％3.4％3.0％3.4％8.1％3.5％ConsolidatedNet SalesConsolidated Operating Income (Margin)ROE(Return on equity)DOE(Dividend on equity on a consolidated bases) Steady progress in conversion from flow-type business to stock-type business through planning and sales expansion of Providing application development and packaged products for solving business problems of companies by developing packaged products.information in circulation (“ZIPS”). Strengthen active initiatives for consumer businesses such as Map Design business and tourism-type MaaS services. In the Automotive business and Marketing Solution businesses, the tendency for changes in the external environment to affect business performance has not changed, and improving profitability through in-house services such as stock-type services is a top priority.ResultsChallenges©ZENRIN CO., LTD. All Rights Reserved.615.615.01514.714.42010501.-5) Net Sales by Business under the ZGP25 1st Stage(Amounts in billion yen)18.615.814.614.514.214.114.213.67.7 7.47.06.78.06.65.95.5ZGP251st StageZGP202019/3 20/3 21/3 22/3ProductProduct1.2 1.2 0.9 1.1PublicPublicSolutionSolutionMap DesignMap DesignAutomotiveAutomotiveIoTIoTMarketingMarketingSolutionSolution©ZENRIN CO., LTD. All Rights Reserved.7２．Overview of ZGP25 2nd Stage１) Scope and Structure of ZGP25 2nd Stage２) Numerical Target for ZGP25 2nd Stage ３) Business Plan for ZGP25 2nd Stage４) Net Sales target by Business under ZGP25 2nd Stage ©ZENRIN CO., LTD. All Rights Reserved.82.-1) Scope and Structure of ZGP25 2nd Stage1st Stage (3 terms)2nd Stage (3 terms)FY2020FY2021FY2022FY2023FY2024FY2025Business model transformation periodEnhance values to customersand strengthen the earnings base through the selective use of business modelsEmbody the business modelCreate values through the optimization of location information and information in circulationStrengthen the business foundationBuilding an information platform that can meet the diverse needs of societyStrengthen the management baseFoster human capital who can respond to changes in the environment and build an organization for such purpose©ZENRIN CO., LTD. All Rights Reserved.92.-2) Numerical Target for ZGP25 2nd Stage 1st YearFY2023(Forecast)2nd Stage2nd YearFY2024(Target)3rd YearFY2025(Target)60.5 bn yen62.3 bn yen63.8 bn yen3.0 bn yen(5.0％)4.0 bn yen(6.4％)5.8 bn yen(9.1％)5.3%5.1%7.3%3% or higher3% or higher3% or higherConsolidatedNet SalesConsolidatedOperating Income(Margin)ROE(Return on equity)DOE(Dividend on equity on a consolidated bases)©ZENRIN CO., LTD. All Rights Reserved.102.-2) Numerical Target for ZGP25 2nd Stage70.0Consolidated Net Sales(Amounts in billion yen)(Amounts in billion yen)ConsolidatedOperating Income63.763.85.862.360.560.059.759.057.25.8 4.0 3.33.0 2.6 1.4 50.0ZGP2020ActualActualActualForecastTargetTargetZGP2020ActualActualActualForecastTargetTarget19/3 20/3 21/3 22/3 23/3 24/3 25/319/3 20/3 21/3 22/3 23/3 24/3 25/31st Stage2nd Stage1st Stage2nd Stage86420©ZENRIN CO., LTD. All Rights Reserved.112.-3) Business Plan for ZGP25 2nd StageDivide the business portfolio into 5 businessesProductPublic SolutionBusiness that mainly provides products and services developed in-house to companiesBusiness that mainly provides products and services developed in-house to government agenciesMarketing SolutionBusiness that supports customer marketing and sales promotion activities by utilizing map information technologyIoTBusiness that provides convenience of various information by utilizing digital mapsAutomotiveBusiness that provides navigation maps, etc. for automobile-related companiesContribution to solving social issues- Create a safe and secure city- Co-create advanced mobility society- Construct industrial infrastructure- Solve local community issues- Promote education and cultureresources- Consider environment and ©ZENRIN CO., LTD. All Rights Reserved.122.-3) Business Plan for ZGP25 2nd StageProductIncrease profits by expanding stock-type business and stabilizing flow-type businessPublic SolutionExpand sales by converting from flow-type business to stock-type business and building up entrusted business solutionsMarketing SolutionCreate a new market by solving sales promotion issues by utilizing map information technologyIoTPlan solutions to support industry DX and strengthen alliance businessAutomotiveStabilize existing navigation business and establish smart mobility business©ZENRIN CO., LTD. All Rights Reserved.132.-4) Net Sales target by Business under ZGP25 2nd Stage (Amounts in billion yen)16.215.416.215.715.314.2 14.714.62015105016.7 16.5 16.516.0ActualForecastTargetTarget22/3 23/3 24/3 25/3ProductProduct8.2 8.47.4 7.87.06.56.25.9Public SolutionPublic SolutionMarketing SolutionMarketing SolutionIoTIoTAutomotiveAutomotive＊Sales of the Map Design business for FY2022 are included in the Product business.©ZENRIN CO., LTD. All Rights Reserved.14Appendix. Basic Policy of ZGP25・ Basic Policy (Business)・ Basic Policy (Business model definition)・ Basic Policy (Production)・ Basic Policy (Organization & Personnel Affairs)・ Basic Policy (Finance)©ZENRIN CO., LTD. All Rights Reserved.15Appendix Basic Policy (Business)AppendixVarious sets of collected information are managed and optimized in the “database platform,” and their uses are optimized in the “circulation platform,” bringing about a value chain of services that enhances value to customers in the use of location information.ⅠⅡⅢⅣFlow-type business (ownership)A product business model in which we sell “goods-type services” that contain “activity-type elements” and earn revenue each time we sell them.Stock-type business(regular use)A license business model in which we provide fixed-term, fixed-amount services that customers can use any time without worry to earn recurring revenue.Subscription-type business (on-demand use)An on-demand business model in which we provide services to cater on-demand needs of customers to earn a small amount of revenue each time we provide them.Hybrid-type business (combined use)A business model that combines the business models listed above to provide higher-value services and to earn recurring revenue.©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)16Appendix Basic Policy (Business model definition)Appendix＜Definition of business models in ZGP25＞Hybrid type(Two or more combinations)Subscription typeFlow typeStock typeOptionalAvaillabe range/unitFixedHow to pay by usersOnly OnceContinuous©ZENRIN CO., LTD. All Rights Reserved.Pay at the time of purchaseFlow typeMusic CD(Single/ album)Pay monthly membership feeStock typeAll-you-can-listen to the target music for a fixed monthly feePay on demandSubscription typeBuy only the songs you want to listen to17Appendix Basic Policy (Production)AppendixManage and optimize the “database platform” to connect flexibly sets of collected information with the “circulation platform,” which optimizes the use of various information sets, bringing about location information innovation in network society.ⅠⅡⅢMobility networkConstruction of the strongest network database that 世の中の役に⽴つあらゆる位置情報をネットワーク化するnetworks any and all location information.ことで、最強のデータベースを構築するＱＣＤＤＳinnovationIntelligent technologyTransformation of “diversity and scalability” to enable ネットワーク社会において、「コト」を価値化する用途開the development of applications that is necessary for 開発に必要な革新的な「多様性と拡張性」を生み出すthe creation of value from “activities.”Construction of the strongest technology database that 個の⼒を組織へ最⼤化させることで、puts intellectual technical capabilities of individual into 唯一のデータベースを構築するpractical use.©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)18Appendix Basic Policy (Organization & Personnel Affairs)AppendixBe a corporate group in which a set of people comprising diverse human capital work in a lively atmosphere in a vibrant organization and our stakeholders can have confidence.ⅠⅡProcess relationEnsure the optimal “operation of business management processes” to improve management productivity and maintain a sound financial structure世の中の役に⽴つあらゆる位置情報をネットワーク化することで、最強のデータベースを構築するKnowledge relationDevelop people to consistently create human capital with ネットワーク社会において、「コト」を価値化する用途開“wisdom” always to be able to respond to changes in the 開発に必要な革新的な「多様性と拡張性」を生み出すexternal environmentⅢSocial relationCreate a “work environment in which people can work 個の⼒を組織へ最⼤化させることで、without worry” to realize a vibrant organization唯一のデータベースを構築する©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)19Appendix Basic Policy (Finance)AppendixMaintain a sound financial base through earnings growth and asset efficiency improvement and ensure shareholder returns based on medium- to long-term earnings growthAdopting return on equity (ROE) as one of key management indicators, strive to improve ROE by promoting the efficient use of assets, in addition to improving operating marginⅠⅡⅢROE 8％ or higherOperating margin × Total assets turnover ratio × Financial leverageBalanced investment・Capital investment paying attention to free cash flow ・Optimal allocation of management resources in growth areasShareholder return・Stable and consistent shareholder returns based on earnings growth・Flexible acquisition of own shares©ZENRIN CO., LTD. All Rights Reserved.Excerpts from ZGP25 presentation materials (released on April 26, 2019)2021