Zenrin : Results for the First 2 Quarters of Fiscal 2024

Securities Code: 9474

Results for

the First 2 Quarters of Fiscal 2024

(Year Ending March 31, 2024)

November 14, 2023

*Note:

This document contains forward-looking statements based on assumptions, forecasts and plans in light of information available to ZENRIN Co., Ltd. as of the preparation date of this document. Actual performance may vary significantly from the forecast figures due to various risks and uncertainties owing to global 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 to the first decimal place. In addition, cases where the percentage of change exceeds 1000% and cases where one or both of the items of comparison are negative are shown as "-."

*Disclaimer:

This document has been translated from the Japanese original for reference purposes only.

In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Result for

the First 2Qs Table of Contents

of FY2024

Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024 Ⅱ. Earnings Forecast for Fiscal 2024

Ⅲ. Business Overview

Ⅳ. Appendix

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Result for

the First 2Qs Table of Contents

of FY2024

Ⅰ ．Overview of Results for the First 2 Quarters of Fiscal 2024

1. Overview of Results
2. Changes in Net Sales, Income and Profit

3-1. Causes for Change in Operating Income [Sales by Business]

3-2. Causes for Change in Operating Income [Cost]

3-3.Sales-increasing Effect of Price Revisions

4. Changes in Cash Flows

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Result for

the First 2Qs

of FY2024

Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024

1. Overview of Results

Key Points of Results for the First 2 Quarters of Fiscal 2024
【 Increase in sales / Decrease in income and profit	】 (Compared to first 2Qs of FY2023)

Sales

Result

• There were more opportunities to provide data for in-car navigation systems thanks to the recovery in automobile production. Orders received from the national and local governments increased, and there were more opportunities to provide residential map data while orders received in the marketing solutions-related business also increased. As a result, sales increased for three consecutive periods.

Expenses

・

Profit and loss

• Increase in cost of sales due to the increase in revenue, as well as an increase in expenses for developing map databases to improve the precision of location data, the effects of the rising cost of living and wage hikes resulted in an increase in operating expenses, such as personnel expenses, compared to the same period of the previous fiscal year. As a result, profits decreased for two consecutive periods.

• These increases in operating expenses have already been incorporated in the forecast for the consolidated results of operations for fiscal 2024.
• It should be noted that while fixed costs such as the expenses for developing map databases are incurred throughout the year, expenses generally precede net sales due to drastic seasonal fluctuations in which net sales tend to be concentrated in the fourth quarter.

(Amounts in million yen)

	First 2Qs of FY2023	First 2Qs of FY2024	Compared to
	First 2Qs of FY2023
				% of Change
Net Sales	25,929	27,153	1,224	+4.7%
Operating Expenses	26,915	28,735	1,820	+6.8%
Operating Income	-985	-1,581	-596	-
Operating Margin	-3.8%	-5.8%	-2.0pt	-
Ordinary Income	-982	-1,626	-643	-
Profit Attributable to	-703	-1,221	-518	-
Owners of Parent

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Result for

the First 2Qs

of FY2024

Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024

2. Changes in Net Sales, Income and Profit

(Amounts in million yen)

40,000										0
30,000	26,803	24,209	25,880	25,929		27,153			-1,000	334-	1,460-	456-	985-	1,581-				-65	1,240-	322-	982-	1,626-				224-	723-	-80	703-	1,221-
20,000
									-2,000
10,000
									-3,000
0
		19/9	20/9	21/9	22/9	23/9		19/9	20/9	21/9	22/9	23/9		19/9	20/9	21/9	22/9	23/9		19/9	20/9	21/9	22/9	23/9
				Net Sales					Operating Income	Ordinary Income	Profit Attributable to
																																	Owners of Parent
Compared to			+1,224 million yen	-596 million yen			-643 million yen			-518 million yen
First 2Qs
of FY2023					(+4.7%)									( - )										( - )										( - )
(% of Changes)

Increase in sales	Decrease in income and profit for 2 consecutive periods
for 3 consecutive periods

*the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. have been applied from the beginning of the first quarter of fiscal 2022.

*Regarding figures for the previous fiscal year (fiscal 2021) and earlier, the increase (decrease) and rates (%) are reference values because the Accounting Standard for Revenue Recognition, etc. are not applied retrospectively (same as the next page and after).

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Result for	Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024
the First 2Qs	3-1. Causes for Change in Operating Income [Sales by Business]
of FY2024

Operating Income (compared to first 2Qs of FY2023)	(Amounts in billion yen)

0.5

0

-0.5 billion yen

◼Recovery in sales of data for in-car navigation systems in + 1.1 conjunction with the recovery in automobile production

◼Expansion of DMs, sales promotion support and consulting services due to the recovery in sales promotion demand

• 0.5
• 1.0
• 1.5

◼Orders received from the national and local governments increased and there were more opportunities to provide residential map data

- 0.9

+ 0.3

- 0.4

◼Reactionary fall of entrusted services ◼Printed residential maps decreased ◼GIS Package products increased

+ 0.2

• 0.1

◼Decrease due to the termination of some services of a subsidiary

◼Increase in cost of sales due to the increase in revenue ◼Increase in expenses for developing map databases to

improve the precision of location data ◼Increase in personnel expenses due to wage hikes

+ 1.8

- 1.5

Operating		Changes in Sales by Business (compared to first 2Qs of FY2023)		Changes in
					Operating Expenses
Income		Public	Marketing
Product	IoT	Automotive	(compared to first
First 2Qs	Solution	Solution	2Qs of FY2023)
of FY2023			+ 1.2			+ 1.8
			billion yen			billion yen

© ZENRIN CO., LTD. All Rights Reserved.

Operating

Income

First 2Qs

of FY2024

6

Result for	Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024
the First 2Qs	3-2. Causes for Change in Operating Income [Cost]
of FY2024

Operating Income (compared to first 2Qs of FY2023)	(Amounts in billion yen)

0.5

0

• 0.5
• 1.0
• 1.5

- 0.9

Operating

Income

First 2Qs

of FY2023

Effect of

Increased Sales

from Price

Revisions

Increased sales

mainly in automotive-

related business

Changes in Sales

(compared to first 2Qs of FY2023)

+ 1.2

billion yen

-0.5 billion yen

Increase in costof

sales due to

increasedsales

Personnelexpenses*

*Including impact of

base-pay up

Development

expensesof map

databases

Other expenses

◼Rising cost of living and increase in expenses for activities

◼Increase in research and development costs

◼Increase in operating and depreciation expenses for the service platform

Changes in Operating Expenses

(compared to first 2Qs of FY2023)

+ 1.8

billion yen

- 1.5

Operating

Income

First1Q 2Qsof ofFY2024

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Result for

the First 2Qs

of FY2024

Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024

3-3.Sales-increasing Effect of Price Revisions

The sales-increasing effect of price revisions for FY2024 will be limited.

• Price revisions are being implemented one by one for each product and service in and after April 2023.
• For annual and multi-year contracts, under which new prices will be applicable upon the next contract renewal, we are currently notifying and negotiating price revisions with customers. For this reason, we expect the sales-increasing effect of price revisions to fully materialize only in and after the next fiscal year.

< Progress status of price revisions for each product and service >

Main products and	Progress status in and after 2023
services
Printed residential maps	New prices apply to those published
in and after April 2023
GIS package	New prices apply to new contracts
Online residential map and	concluded and existing contracts
other data services (stock)	renewed in and after August 2023
	New prices will take effect in April 2024
Provision of residential	New price estimates are currently
presented and negotiated.
map data (flow)
New prices will apply to existing
	contracts upon the next contract renewal.
Map data for in-car	New price estimates are currently
presented and negotiated for the next
navigation systems
model to be released

< Schematic illustration of new price application to existing contracts >

Case of price revision in August 2023

Price

Revision

New

Conventional prices

Contract

Conventional prices

Contract

New prices

contract

renewal

renewal

New

Contract

Contract

Conventional prices

New prices

New prices

contract

renewal

renewal

22/7

22/8

23/7

23/8

24/7

24/8

< Schematic illustration of sales-increasing effect of price revisions>

		Negotiationforpricerevisionsstartedin April2023
	Scale ofrevenueincrease	(forthereleaseof the next model scheduledwithin a few years)			Map data for in-car
due topricerevision	Negotiationforpricerevisionsstartedin April2023			navigation systems
		The timing of the impact
	Residential map data
	is undetermined.
	GIS Packages
			Online residential map services
			('23/4~)
		Printed Residential Maps
			('23/4~)
		23/4	FY2024	24/4	FY2025	25/4

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Result for	Ⅰ . Overview of Results for the First 2 Quarters of Fiscal 2024
the First 2Qs	4. Changes in Cash Flows
of FY2024

6,000

4,000

2,000

0

-2,000

-4,000

-6,000

3,834

3,040

4,774

1,830

3,744

Proceeds from sale of real estate, etc.

Free cash flows

1,158

1,397-

Financing cash flows

-2,819

2,160-

2,443-

3,349-

2,585-

Effect of exchange rate

95

Net decrease in cash and

-1,565

cash equivalents

Cash and cash equivalents

13,965

at beginning of period

Cash and cash equivalents

12,400

at end of period

19/9

20/9

21/9

22/9

23/9

19/9

20/9

21/9

22/9

23/9

1,674	597	1,425	433	1,158

19/9 20/9 21/9 22/9 23/9

(Amounts in million yen)

2,493
Proceeds from disposal
	of treasury stock through
	third-party allotment, etc.

-1,082		-2,027
	-3,411	-2,819

19/9 20/9 21/9 22/9 23/9

		Operating Cash Flows	Investing Cash Flows	Free Cash Flows	Financing Cash Flows
	First 2Qs of	3,744 million yen	-2,585 million yen	1,158 million yen	-2,819 million yen
	FY2024
	Compared to	Inflows up	Outflows up	Inflows up	Outflows down
	first 2Qs of
	1,913 million yen	1,188 million yen	725 million yen	791 million yen
	FY2023

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Result for

the First 2Qs

of FY2024

Table of Contents

Ⅱ. Earnings Forecast for Fiscal 2024

1. Earnings Forecast for Fiscal 2024
2. Changes in Net Sales by business

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