briefing on results for first 2 quarters of fiscal …13/3 14/3 15/3 16/3 17/3 year-end dividend...

President and CEO Zenshi Takayama

Executive Vice President Junya AmitaExecutive Officer, andHead of Corporate Management Division Masami Matsuo

ZENRIN Co., Ltd.

Briefing on Results for First 2 Quarters ofFiscal 2017 (Year Ending March 31, 2017)

November 11, 2016

Securities Code: 9474

ZENRIN CO., LTD. All Rights Reserved.©

Briefing on Results for First 2Qs of FY2017

2

1. Overview of Results for First 2 Quarters of Fiscal 2017

2. Earnings Forecast for Fiscal 2017

3. Business Summary

4. Appendix

Table of Contents

Note: 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.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 “–.”



3

1. Overview of Results for First 2 Quarters of Fiscal 2017

1) Overview of Results

2) Changes in Net Sales, Income and Profit

3) Causes for Change in Operating Income

4) Net Sales by Business under Medium- to Long-TermBusiness Plan ZGP2020

5) Segment Information

6) Changes in Cash Flows



Key Points of Results for First 2 Quarters of Fiscal 2017

First 2Qs of FY2016Actual

First 2Qs of FY2017Earnings Forecast(May 9)

First 2Qs of FY2017Revised Forecast(Oct. 24)

First 2Qs of FY2017Actual

Compared to First 2Qs of

FY2016

% of Change

Compared to Earnings Forecast(May 9)

% of Change

Compared to Revised Forecast(Oct. 24)

% of Change

Net Sales 24,734 25,000 24,780 24,783 49 0.2 -216 -0.9 3 0.0

Operating Expenses 24,557 25,000 25,160 25,161 604 2.5 161 0.6 1 0.0

Operating IncomeOperating Margin

1760.7%

0―

-380-1.5%

-378-1.5%

-555-2.2pt

－ -378-1.5pt

－ 10.0pt

－

Ordinary Income 422 200 -210 -207 -630 － -407 － 2 －

Profit Attributable to Owners of Parent 119 100 -390 -387 -507 － -487 － 2 －

4

(Amounts in million yen)

*No substantial change from the revised earnings forecast figures announced on October 24.

1-1) Overview of Results

Compared to First 2 Quarters of Fiscal 2016 <increase in sales and decrease in income>■ Robust sales related to GIS utilizing residential map databases■ Sales increased for two years in a row while income at each level decreased due to increases in G&A expenses and

depreciation of Zenrin Integrated Geospatial System

Compared to Earnings Forecast <decrease in sales and decrease in income>■ Sales have been roughly as expected■ Income decreased mainly because some of the expenses that had been expected in 2H arose in 2Q



25,8

49

24,0

10

22,5

56

24,7

34

25,0

00

24,7

83

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

12/9 13/9 14/9 15/9 16/9 16/9

1,16

1

-250

194

119

100

-387

12/9 13/9 14/9 15/9 16/9 16/9

Up 49 (+0.2%) Downturn of 555 (― ) Downturn of 630 (― ) Downturn of 507 (― )

Down 216 (-0.9%) Downturn of 378 (― ) Downturn of 407 (―) Downturn of 487 (―)

Increase in sales for 2 consecutive periods Profit in previous period → Loss

5

2,56

5

39

-308

176

0 -3

78

△1,200

△700

△200

300

800

1,300

1,800

2,300

2,800

3,300

12/9 13/9 14/9 15/9 16/9 16/92,

735

225

-18

422

200

-207

12/9 13/9 14/9 15/9 16/9 16/9

1-2) Changes in Net Sales, Income and Profit


FY2016Compared to

Earnings Forecast

(announced on May 9)


Net Sales Operating Income Ordinary Income Profit Attributable to Owners of Parent

May

9 E

arni

ngs

Fore

cast

Act

ual

*No substantial change from the revised earnings forecast figures announced on October 24.



-0.5

0.0

0.5

1.0

6

+0.3 +0.0

+0.2

+0.6-0.1

-0.3

-0.0

Net SalesCompared to First 2Qs of FY2016: +0.0 bn yen (+0.2％)

0.1

-0.3

Compared to First 2Qs of FY2016: -0.5 bn yen (―)

Decrease in sales from projects commissioned by the local governments

Increase in sales of data for in-car navigation systems

Robust sales of GIS packages

1-3) Causes for Change in Operating Income(Amounts in billion yen)

15/9Actual15/9

ActualPublishing BusinessPublishing Business

GISBusiness

GISBusiness

ICTBusiness

ICTBusiness

Other Business

Other Business

ITSBusiness

ITSBusiness

Global Business

Global Business

Operating ExpensesOperating Expenses

16/9Actual16/9

Actual

Increases including increases in the amortization of the ZENRIN integrated geospatial system were reported, in addition to an increase in selling, general and administrative expenses including personnel expenses.



4.0 3.8 3.6 3.7 3.4 3.3

4.1 4.4

4.6

5.3

5.9 5.6

6.8 6.7

5.7 5.5 5.4 5.5

5.9

4.9 5.3 5.3 5.4 5.6

1.6

1.0 1.1 1.2 1.3 1.1

3.1 2.9

2.1

3.5 3.4 3.4

0

2

4

6

8

12/913/914/915/916/916/9 12/913/914/915/916/916/9 12/913/914/915/916/916/9 12/913/914/915/916/916/9 12/913/914/915/916/916/9 12/913/914/915/916/916/9

-0.3(-10.0％)

-0.3(-10.0％)

+0.3(6.4％)+0.3(6.4％)

+0.0(0.1％)+0.0(0.1％)

+0.2(5.1％)+0.2(5.1％)

-0.1(-9.0％)-0.1

(-9.0％)-0.1

(-2.4％)-0.1

(-2.4％)

7

Publishing ＧＩＳＩＣＴＩＴＳ Global Other

1-4) Net Sales by Business under ZGP2020(Amounts in billion yen)

Com

pare

d to

Fi

rst 2

Qs

of

FY20

16

May

9 E

arni

ngs

Fore

cast

Actu

al

* Net sales for the first 2 quarters of fiscal 2013 (period ended September 2012) and first 2 quarters of fiscal 2014 (period ended September 2013), which are the outlined open bars on the bar graph, are net sales compiled based on the business composition under ZGP2015.



83.4%

6.7%

9.9%

8

1-5) Segment Information

SalesComposition

1. Map Database SegmentMain Items: Printed residential maps,

residential map databases, map data for Japanese and overseas in-car navigation systems, services for smartphones, map data provision, etc. for various media/devices

2. General Printing SegmentMain Items: Commercial printing

3. OtherMain Items: Purchased products,

digital signage, direct mail delivery services, in-ship advertising



■ Robust sales related to GIS-utilizing residential map databases.■ increases including increases in the amortization of the ZENRIN integrated geospatial system were reported,

in addition to an increase in selling, general and administrative expenses including personnel expenses.

Up 162 (+0.8％) Downturn of 487 (―)

9

20,506 20,668

0

5,000

10,000

15,000

20,000

25,000

15/9 16/9

102

-385 △500

0

500

15/9 16/9

1-5) Map Database Segment

Net Sales Operating Income(Amounts in million yen)


FY2016



Down 30 (-1.2％) Down 30 (-46.4％)

その他

Down 83 (-4.8％) Downturn of 34 (―)

10

-36

-71 △100

△50

0

50

15/9 16/9

1,738 1,655

0

1,000

2,000

3,000

15/9 16/9

2,489 2,459

0

1,000

2,000

3,000

15/9 16/9

65

35

0

30

60

90

120

15/9 16/9

Gen

eral

Prin

ting

Seg

men

tO

ther

1-5) General Printing Segment, and Other(Amounts in million yen)

Net Sales Operating IncomeCompared to First 2Qs of

FY2016


FY2016



-2,0

47

-4,0

28 -2

,047

-2,5

35

-2,9

54

12/9 13/9 14/9 15/9 16/9

Inflows down 148 Outflows up 419 Inflows down 567 Outflows down 2,263

11

3,77

2

332

2,49

2

3,78

4

3,63

6

△ 5,000

△ 4,000

△ 3,000

△ 2,000

△ 1,000

0

1,000

2,000

3,000

4,000

5,000

12/9 13/9 14/9 15/9 16/9

1,72

4

-3,6

96

444 1,

248

681

12/9 13/9 14/9 15/9 16/9

-1,1

06 -462

-2,4

59

-3,1

72

-908

12/9 13/9 14/9 15/9 16/9

Free cash flows 681Financing cash flows - 908Effect of exchange rate - 152Net decrease incash and cash equivalents - 380Cash and cash equivalentsat beginning of period 5,099Cash and cash equivalentsat end of period 4,719

1-6) Changes in Cash Flows(Amounts in million yen)

Operating Cash Flows Financing Cash FlowsFree Cash FlowsInvesting Cash FlowsCompared to First 2Qs of

FY2016

Remodeling and expansion of ZENRIN-owned property



12

2. Earnings Forecast for Fiscal 2017

1) Overview of Earnings Forecast for Fiscal 2017(No change from the figures announced on May 9)

2) Dividends



Earnings Forecast for Fiscal 2017

13

FY2016Actual

FY2017Forecast Compared to

FY2016 % of Change

Net Sales 54,970 57,000 2,029 3.7Operating Expenses 51,931 53,600 1,668 3.2

Operating IncomeOperating Margin

3,0385.5％

3,4006.0%

3610.5pt

11.9－

Ordinary Income 3,427 3,700 272 7.9Profit Attributable to Owners of Parent 1,610 2,200 589 36.6

2-1) Overview of Earnings Forecast for Fiscal 2017


Given that the actual results through 2Q have been roughly in line with the forecast, the earnings forecast for fiscal 2016 is left unchanged from that announced on May 9, 2016 for now.

Compared to Fiscal 2016 <increase in sales and decrease in income>■Securing of earnings from GIS Business■ Reduction of fixed cost ratio through productivity reform■ Stable operation of Zenrin Integrated Geospatial System and product development



（予定）

FY2017 Dividend (Compared to FY2016)

Interim 17.00 yen (+1.50 yen)

Year-end(Planned)

17.00 yen (± 0 yen)

Annual(Planned)

34.00 yen (+1.50 yen)

14

15.00 15.00 15.00 15.50 17.00

15.00 15.00 16.00 17.0017.00

0.00

10.00

20.00

30.00

40.00

13/3 14/3 15/3 16/3 17/3

Year-end dividend Interim dividend

(Planned)

32.5030.00 30.00

31.00

34.00(Planned)

yen

2-2) Dividends

Basic Policy

Return income to shareholders derived from income growth based on the medium- to long-term business plan, while taking into account maintaining an adequate amount of internal reserves

Target dividend on equity (DOE) on a consolidated basis of 3% or higher

~ Maintain DOE of 3% or higher ~



15

3. Business Overview

1) Net Sales by Business under Medium- to Long-TermBusiness Plan ZGP2020

2) ZGP2020 Business Strategy・Net sales by Business (Actual/Forecast/ ZGP2020 Targets)・Primary Initiatives



16

PublishingPublishing ＧＩＳＧＩＳＩＣＴＩＣＴＩＴＳＩＴＳ GlobalGlobal OtherOther

-0.3（-3.7%）

-0.3（-3.7%）

+1.4（12.4%）

+1.4（12.4%）

+0.3（3.2%）

+0.3（3.2%）

+0.4（3.6%）

+0.4（3.6%）

+0.2（7.8%）

+0.2（7.8%）

-0.1（-1.8%）

-0.1（-1.8%）

予想

実績

予想

実績

9.0 9.49.0

9.3

11.0 11.0

12.0

13.5 13.5

15.5

12.011.4

11.8

14.0

17.5

11.2 11.612.0 12.0

13.5

2.7 2.93.1 3.5

4.5

6.2

7.57.3

7.7 8.0

0

5

10

15

20

15/3 16/3 17/3 18/3 20/3 15/3 16/3 17/3 18/3 20/3 15/3 16/3 17/3 18/3 20/3 15/3 16/3 17/3 18/3 20/3 15/3 16/3 17/3 18/3 20/3 15/3 16/3 17/3 18/3 20/3

3-1) Net Sales by Business under ZGP2020(Amounts in billion yen)

Fore

cast

ZGP

202

0 Ta

rget

ZGP

202

0 Ta

rget

Com

pare

d to

FY

2016

(For

ecas

t)



17

(Amounts in billion yen)

3-2) ZGP2020 Business Strategy -Publishing Business-

Now available also from our own website in addition to convenience stores all over Japan

・Map stationery“mati mati” series:Product line with 10 areas/4 items

・A license agreement was concluded for the use of Tokyo Olympics andParalympics symbols as well as the names of venues/athleticcompetition on our products. We plan to sell various map productsbased on this agreement.

The business model to be reconsidered as a result of feasibility studies in multiple districtsValidation of the sales style to be continued

<Second Quarter Progress>Sales declined due to the effect of projects commissioned by local governments and a

decrease in sales of printed residential maps

Pursuit of the “solutions” of print media

3.7 3.3

5.6 5.7

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

9.4 9.0 9.311.0

(Forecast)1H = Actual

(ZGP 2020 Target)

■ 1H ■ 2H

(Actual)

Shift from flow-type models to stock-type models

Enrichment of easily-accessible on-demand service

Enrichment of proposal-based productsevolved from order-based products

★

FY2017 Net Sales ForecastCompared to FY2016: -0.3 bn yen （-3.7%）

★

Sapporo/Sendai/Marunouchi/Omotesando/Kichijoji/Yokohama/Kyoto/Umeda/Kobe/Fukuoka Tenjin

Clear files/masking tapes/notepads/sticky tags

Creation of markets by innovating new map concepts



18

3-2) ZGP2020 Business Strategy -GIS Business-

Enrichment of concept products

5.3 5.6

6.7 7.8

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

13.5 13.515.5

12.0

■ 1H ■ 2H

<Second Quarter Progress>Number of GIS package contracts increased and

a new GIS marketing subsidiary contributed

(ZGP 2020 Target)(Forecast)1H = Actual

FY2017 Net Sales ForecastCompared to FY2016: +1.4 bn yen （+12.4%）

Planning/development of a sales support system for small business

Business model planning/validation with 3 business partners

Release of Package products featuring a clear map-themed concept

Release of entry models for expanding utilization of GIS

Establishment of local government platform

Establishment of data-circulation-type business model

★

Development/validation of a new product (GIS Selection)

Building of the ZENRIN GIS brand through release of products resulting from development of applications and through

introduction of new pricing★

(Actual)




ZENRIN CO., LTD. All Rights Reserved.© 19

3-2) ZGP2020 Business Strategy -GIS Business- (Building of GIS Brand)

(Progress)Planning/development of a sales support system for small business

(New) Service provisionthrough developmentof applications

(New) Service provisionthrough developmentof applications

SolutionSolution

SelectionSelection

PackagePackage

Government agencies/local governments Sales

11.5 billion yen (+0.7)

Provision of residential map data for dedicated systems・Fire department/police (emergency command system, etc.)・Financial sector (collateral valuation, customer management,

etc.)・Door-to-Door delivery (delivery, GPS fleet management, etc.)

Utilization of residential map data and other information・Real estate brokerage (property management, transactions)・Local government, real estate brokerage (vacant houses,

vacant land)・Infrastructure industry (facility management)・For enterprises (facility management, sales support,

marketing, etc.)

1.5 billion yen (+0.4)GIS packages (4 titles)Real estate, construction, real estate appraiser, tax accountant

*Figures are sales volume for fiscal 2017

(Compared to FY 2016)

0.5 billion yen (+0.3)GIS marketing

★

(New) Data-circulation-type business (New) Data-circulation-type business

(New) For local governments(New) For local governments

Marketing Operation

(Progress)Development/validation of Selection products targeting real estate business

upse

lling

★

★

Large enterprises Small- and medium-sized enterprises




3-2) ZGP2020 Business Strategy -GIS Business- (GIS Selection)

Business flow

Business activities

Challenge

Information collection Property research

・Collection of real estate (land/building) information・Selection/management of information (accumulation)

・Select potential properties・Conduct detailed research on potential properties・Ascertain land regulation information・ Conduct research on the surrounding environment (on-site inspection, statistics)

①Tracking of collected information

②Selection of potentialproperties

(Research on surrounding environment)

Sales

・Negotiation with the owner・Negotiation to acquire adjacent land・Analysis of the surrounding environment・Management of sales negotiation status

③Management of sales negotiation

records

① Land purchase

Major category Product name

Base map Residential map data

Contents

Zoning dataPublished land price/land price research dataInheritance tax/property tax roadside land price

Property/land information

management function

Sales information

management functionGIS

Selection

② Condo sales

(Addition of the property/land information management function and the sales information management function + 10,000 yen/month)

20,000 yen/month for each license

・Sales to show house visitors・Explanation of the surrounding environment

③ Marketing & promotion

・Promotion activities (posting)・Negotiation with the owner

Research on surrounding environment

Management of negotiation records

GIS package

＋＋ Respond to customer needs by adding contents/functions

Development/validation of GIS Selection products targeting real estate business

[Future expansion]




3-2) ZGP2020 Business Strategy -GIS Business- (GIS Marketing)

Advertising targeting business that leverages SNS

Advertisement sponsor

Advertisement posting

Provision of contentsAdvertisement posting tool

Web browser Smartphones and tablets

End users(SNS users) SNS

Ad posting and displaying

Current service

Age, sex, posting/browsing

information

SNS information onlySetting targets

based on building profiles

Targeting based on how they live and in what house they live in in addition to age, sex, region, hobby, interest

Effective utilization of GIS marketing

Map＋

Statistical data

・Rich urban center dwellers・Rich suburban dwellers・Commuters & Near city

suburban・Near city suburban dwellers・Mid-size city dwellers・Company dormitory dwellers・Local city/rural dwellers, etc




3-2) ZGP2020 Business Strategy -GIS Business-(a sales support system for small business )

Planning/development of a sales support system for small business (cloud based service)

GPS fleet managementLocation information

management

Transportation support

Accurate guide

Its-mo NAVI Multi

Zenrin Residential Map

→In-car, train, pedestrian navigation

→Door-to-door guide

Guide to the final destination(Last One Mile)

→Visualize on the map→Real-time

Sales support function →Confirm where to visit

→Progress/reporting

Customer/business information

●●

●●

●

Field sales

Administrator PC

Terminals equipped with apps.



23


3-2) ZGP2020 Business Strategy -ICT Business-

・Adoption of signage at commercial facilities, transportation and accommodation facilities

・Adoption of multi-language map data, tourism contents and indoor information data

Pursuit of IT media “solutions”

5.5 5.5

5.8 6.2

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

11.4 11.814.0

17.5■ 1H ■ 2H

(Actual)

・Establishment of the business model for drone business(further coordination with the gov't/private sector)

・ Commissioned validation experiment project

Enhancement of map DB utility value through provision of Zenrin Integrated Geospatial contents

Launch of sharing model for advertising revenuein web business

Digital signage market penetration through provision of Zenrin Integrated Geospatial Database

Launch of 3D solutions through expansion of scope of utilization of 3D data

<Second Quarter Progress>Decrease in the number of subscribers for services

for smartphones/adoption of map data for web services resulted in an increase

(ZGP 2020 Target)

★

★



Expansion of location information business in “tourism” backed by sector’s growth potential

Actual case: Canal City Hakata



24


3-2) ZGP2020 Business Strategy -ITS Business-

・Proposal of our own map solution (ZGM Auto)・Coordination with IoT under study・Investment to establish a new company Dynamic MapPlanning Co., Ltd.⇒2016/10/10-10/14 Exhibition booth at 2016 Melbourne

World Congress on Intelligent Transport Systems

“Communications-linked navigation” and “high precision maps”

5.3 5.6

6.3 6.4

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

11.6 12.013.5

12.0

■ 1H ■ 2H

(Actual)

Enhancement of map DB utility valuethrough provision of Zenrin Integrated Geospatial contents

<Second Quarter Progress>New adoptions of “communications-linked navigation” and adoptions of entry models

contributed to the increase Proposal of comprehensive servicesthat combine map DB and applications

Attracting overseas manufacturers through 3D map licensing and authoring contracts

Establishment of technologies and promotion ofProduct planning for high precision maps

(ZGP 2020 Target)

★






3-2) ZGP2020 Business Strategy -ITS Business- (ADAS Initiatives)

Map solutions under studyTo cover 28,000 km of expressways and their

connecting roads all over Japan before 2020

Coordination with IoT under study

Generation of dynamic information using probe dataCollection of map changing

point triggers

Establishment in June 2016Dynamic Map Planning Co., Ltd.

Source: Extract from the exhibition booth material at 2016 Melbourne World Congress on Intelligenttransport Systems



26


3-2) ZGP2020 Business Strategy -Global Business-

Building of business base in emerging markets

1.2 1.11.6 2.0

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

4.52.9 3.1 3.5

■ 1H ■ 2H

(Actual)

Expansion of business in India

Launch of business in ASEAN

Global expansion of navigation apps andsecuring of authoring contracts

Commencement of business feasibility testing for launch of overseas high precision business

<Second Quarter Progress>Sales decreased due to the replacement of the in-

car navigation model (North America)

(ZGP 2020 Target)(Forecast)1H = Actual


Launch of oversea GIS business

September 2016: Acquisition of Abalta Technologies (U.S.)- Provision of software to enable smartphone apps to

coordinate with on-vehicle equipment- Provision of an environment to realize connected vehicles

that can perform data communication using smartphonesas gateways

- Provision of flexible solutions in emerging markets

★



27

3-3) ZGP2020 Business Strategy -Global Business-(Abalta’s Services)

WebLink

Enables smartphone apps to be displayed on the on-vehicle terminal and operated from on-vehicle equipment

SmartLink

Provides an environment to realize connected vehicles that can perform data communication using smartphones as gateways・Enables vehicles to be connected with the network・Realizes data updates and big data management using vehicle diagnostic information from the cloud

(Application examples)・Updates through communication using the embedded software・Updates through map data communication ・Downloads of vehicle diagnostic data・Infotainment

(Application examples)・Integration with smartphone contents・Can be customized for each auto manufacturers・Can be provided under proprietary brands of auto manufacturers to prevent leakage of vehicle information to external parties

Strengthen business in emerging markets through the provision of solutions combining on-vehicle software



3.5 3.4

3.9 3.9

0.0

4.0

8.0

12.0

16.0

20.0

16/3 17/3 18/3 20/3

7.7 8.07.5 7.3

28

■ 1H ■ 2H

(Actual) (ZGP2020 target)

FY2017 Net Sales ForecastCompared to FY2016: -0.1 bn yen (-1.8%)


3-2) ZGP2020 Business Strategy -Other Business-(General printing, In-Ship, etc. Advertising)

Reexamination of Group synergies

Stability of general printing business

Expansion of in-ship advertising business

Sales expansionthrough synergy with location information business




1) Overview of Results for First 2 Quarters of Fiscal 2017Amount of Capital Investment, Depreciation and R&D CostsChanges in Composition of Net Sales by Quarter

2) Overview of Earnings Forecast for Fiscal 2017(Excerpt from Briefing on Results for Fiscal 2016 presentation materials)Changes in Net Sales, Income and ProfitSegment InformationAmount of Capital Investment, Depreciation and R&D Costs

3) Medium- to Long-Term Business Plan ZGP2020 (From the announcement on 8 May, 2015)

Numerical TargetsNet sales by Business

4) Business Topics

29

4. Appendix



112 1,023

526 91 221

1,719

2,197

2,127

1,946 1,782

476

253 816

469 924

8

30

0

1,000

2,000

3,000

4,000

5,000

12/9 13/9 14/9 15/9 16/9

Intangible leased assetsTangible leased assetsIntangible assetsProperty, plant and equipment

160225

284191 166

0

100

200

300

400

500

12/9 13/9 14/9 15/9 16/9

211 311 505 338 241

1,278 1,462 1,609 1,756 2,086

323 389

384 382 380 5

3 2 1 6

0

1,000

2,000

3,000

4,000

5,000

12/9 13/9 14/9 15/9 16/9

Depreciation of intangible leasedassetsDepreciation of tangible leasedassetsDepreciation of intangible assets

Depreciation of property, plantand equipment

2,309

1,819

3,482

2,167

4-1) Overview of Results for First 2 Quarters of Fiscal 2017(Amount of Capital Investment, Depreciation and R&D Costs)

2,500

3,470

2,506

2,478

30

2,958

2,714

Amount of Capital InvestmentAmount of Capital Investment R & D CostR & D Cost

DepreciationDepreciation


Remodeling and expansion with aging of ZENRIN-owned building

Introduction of printing machines



4-1) Overview of Results for First 2 Quarters of Fiscal 2017(Changes in Composition of Net Sales by Quarter)

21.9%

21.1%

19.8%

20.4%

19.6%

25.1%

23.7%

23.3%

24.6%

23.9%

23.3%

24.2%

24.5%

22.3%

29.7%

31.0%

32.4%

32.7%

56.5%

0% 25% 50% 75% 100%

13/3

14/3

15/3

16/3

17/3

1Q 2Q 3Q 4Q

31



4-2) Overview of Earnings Forecast for Fiscal 2017(Changes in Net Sales, Income and Profit)

32

54,9

91

53,5

89

52,2

86

54,9

70

57,0

00

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

13/3 14/3 15/3 16/3 17/3

Increase in sales for two consecutive periods/Record high

Increase in income for two consecutive

periods

Net Sales Operating Income Ordinary Income Profit Attributable to Owners of Parent

Increase in profit for three consecutive

periods

Fore

cast

Res

ult

Increase in income for two consecutive

periods

5,5

85

3,1

80

2,3

89 3,0

38

3,4

00

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

13/3 14/3 15/3 16/3 17/35,0

76

3,6

63

2,7

51 3,4

27

3,7

00

13/3 14/3 15/3 16/3 17/3

1,8

35

1,2

72

1,4

64

1,6

10

2,2

00

13/3 14/3 15/3 16/3 17/3




84.3%

6.2%

9.5%

4-2) Overview of Earnings Forecast for Fiscal 2017(Segment Information)

33

１. Map Database SegmentMain Items: Printed residential maps, residential map

databases, map data for Japanese and overseas in-car navigation systems, services for smartphones, map data provision, etc. for various media/devices

２. General Printing SegmentMain Items: Commercial printing

３. OtherMain Items: Purchased products, digital signage,

direct mail delivery services, in-ship advertising

Sales Composition



34

Net Sales Operating IncomeCompared to

FY2016 Up 1,892 （4.1%） Up 373 （14.5%）

46,140

48,033

30,000

40,000

50,000

16/3 Actual 17/3 Forecast

2,571 2,945

0

1,000

2,000

3,000

4,000

5,000






35

82

1 0

100

200

300

400


Net Sales Operating IncomeCompared to

FY2016

Compared toFY2016

Gen

eral

Prin

ting

Seg

men

tO

ther

Up 255 （4.9%） Up 74 （25.3%）

Down 118 （-3.2%） Down 80 （-97.7%）

3,649 3,531

0

3,000

6,000

16/3 実績 17/3 予想

294

368

0

200

400



5,179 5,435

0

3,000

6,000






36

1,050 2,735

733 222 436

4,502

5,093

4,860 4,314 4,622

1,078

468

925 1,011

1,254

17

27

0

2,000

4,000

6,000

8,000

10,000

12,000

13/3 14/3 15/3 16/3 17/3 Forecast

Intangible leased assetsTangible leased assetsIntangible assetsProperty, plant and equipment

511 606 647

400

694

0

200

400

600

800

1,000

13/3 14/3 15/3 16/3 17/3 Forecast

456 750 946 691 532

2,600 3,002 3,279 3,703 4,523

680 784

774 781 757

9 6

4 5 8

0

2,000

4,000

6,000

8,000

13/3 14/3 15/3 16/3 17/3 Forecast

Depreciation of intangibleleased assetsDepreciation of tangible leasedassetsDepreciation of intangibleassetsDepreciation of property, plantand equipment

3,746

8,314

4,544

Remodeling and expansion with aging of ZENRIN-owned building

R & D CostR & D CostAmount of Capital InvestmentAmount of Capital Investment

DepreciationDepreciation

Introduction of printing machines

6,631 6,519

5,005

5,575 6,312

5,1815,822

4-2) Overview of Earnings Forecast for Fiscal 2017(Amount of Capital Investment, Depreciation and R&D Costs)




4-3) ZGP2020 Numerical Targets (From the announcement on 8 May 2015)

37

FY2015Actual

FY2016Forecast

FY2018Target

FY2020Target

Consolidated Net Sales 52.2 bn yen 55.5 bn yen 60.0 bn yen 70.0 bn yen

Consolidated Operating Income(Margin)

2.3 bn yen(4.6%)

2.5 bn yen(4.5%)

5.0 bn yen(8.3%)

10.0 bn yen(14.2%)

ＲＯＥ(Return on equity) 3.9% 4% 8% 12% or higher

ＤＯＥ(Dividend on equity on a consolidated basis)

3.0% 3% or higher 3% or higher 3% or higher



38

4-3) Net Sales by Business under ZGP2020(From the announcement on 8 May 2015)


8.9

9.1 9.3

11.011.4

12.113.5

15.5

12.4

12.414.0

17.5

10.9

11.312.0

13.5

2.2

2.9 3.54.5 6.1

7.47.7 8.0

0

5.0

10.0

15.0

20.0

FY20

15 A

ctua

l

FY20

16 F

orec

ast

FY20

18 T

arge

t

FY20

20 T

arge

t

Publishing GIS ICT ITS Global Other

+2.0(22.8%)

+2.0(22.8%)

+4.0(35.7%)

+4.0(35.7%)

+5.0(40.3%)

+5.0(40.3%)

+2.5(23.0%)

+2.5(23.0%)

+2.2(99.6%)

+2.2(99.6%)

+1.8(29.1%)

+1.8(29.1%)C

ompa

red

to

FY20

15

* Net sales for fiscal 2015 are net sales compiled based on the business composition under ZGP2015.



39

4-4) Business Topics

Global

Launched new items and new design areas (6 areas) as the original line-up that started selling in January 2016 gained popularity

◆Line-up (4 items in total)・TRAVEL TAG FUSEN (sticky tags) ：480 yen 《New》・3LAYER mati FILE (clear file) ：380 yen・MAP WRAP NOTEPAD (note pad) ：380 yen・STREET MEMO TAPE (masking tape) ：430 yen

◆Map design areas (9 areas in total)Kyoto, Umeda, Kobe, Yokohama, Sendai, Sapporo 《New》Marunouchi, Omotesando, Kichijoji, Fukuoka Tenjin

◆Distribution network・Our official online-shop: ZENRIN Store・Loft (shops in Hokkaido, Tohoku, the Tokyo metropolitan area,

Kansai, Kyushu and other areas)・Omni 7

■Acquired 75% of the shares in Abalta Technologies(September 12, 2016)

■The map stationery “mati mati” line-up expanded(July 20 and September 2, 2016)

◆Purpose of the acquisitionAims to strengthen business particularly in overseas markets through the provision of solutions combining on-vehicle software in addition to our knowhow for map data development and contents development for in-car navigation that we had accumulated through our experience in both Japanese and overseas markets.<Reference>

Global business consolidated sales: 4.5 billion yen (FY2020 target)

◆ Outline of Abalta Technologies

Publication

Company name Abalta Technologies, Inc.

Date of establishment 2003

Location (head office) Torrance, California

Location (development facilities)

San Diego, CaliforniaSofia, Bulgaria

Representative Michael O’Shea

Business Licensing and contracted development for on-vehicle software solution and location information software・Provision of WebLink and SmartLinkWebLink: Software to display smartphone applications on on-

vehicle equipment and to enable operation of smartphone applications from on-vehicle equipment

SmartLink: An environment that is necessary for the realization of connected vehicles that can perform data

communication using smartphones as gateway.・Development of various on-vehicle software development kits inthe area of on-vehicle infotainment system and software related to location information utilizing maps.



40


ＩＣＴ

■“Multi-Language Map Plus” released (September 14, 2016)

ZENRIN’s consolidated subsidiary, Will Smart Co. Ltd. released a multi-language map service called “Multi-Language Map Plus,” which can use digital signage from tablet devices.

A packaged service incorporating the web service that can display information such as map, details of various locations on the map, and route guide on the browser in five languages of four countries with a CMS that enables the registration of original landmarks and a cloud server.

◆Japanese, English, Korean, Chinese (simplified), Chinese (original)*Thai will be added.

■The “Multi-Language Map” started to accommodate Thai(September 13, 2016)

The “Multi-Language Map” service provided by ZENRIN’s consolidated subsidiary, ZENRIN DataCom Co., Ltd. for corporate customers now accommodates six languages of five countries.

(Sample screen image in Thai)

◆Can be incorporated into various services・Its-mo NAVI API・Store guide package service・Area Cutter

■“Its-mo NAVI” series version upgrades with added features

“Its-mo NAVI” series offered by ZENRIN’s consolidated subsidiary, ZENRIN DataCom Co., Ltd., have been upgraded with added features

◆“Its-mo NAVI API/CGI”: A map service for corporate and commercial use(July 21, 2016)

Started to offer the multi-modal route search service “Door-to-Door Search” and the nearest bus station search service using “Norikae Annai Biz API” and “All Japan Bus Station Data,” proprietary services offered by JorudanCo., Ltd.

◆PC website “ZENRIN Its-mo NAVI [Multi]” (September 16, 2016)Three paid maps added for use in different situationsNow the maps can be expanded to fit the large screen on the PC site asappropriate in different uses/situations (sightseeing map, landmark map, rain cloud radar)

◆“ZENRIN Its-mo NAVI [Drive]” (September 16, 2016)Upgraded to accommodate “Spin n’ Click,” an application program thatassist the use of a smartphone with remote operation, and the “KKP”smartphone remote commander developed by Denso Corporation.

ＩＣＴ

The map can be scrolled and scaled.

◆Japanese, English, Korean, Chinese(simplified), Chinese (original), Thai



41


■Held an exhibition booth at 2016 Melbourne World Congress on Intelligent Transport Systems (October 10-14, 2016)

ＩＴＳ

<Exhibition contents>①The automatic driving map solution “ZGM Auto”

“ZGM Auto” is an advanced map solution consisting of a 3D high precisionspace database and road network data that is being developed by ZENRINfor the realization of an automatic driving functionIntroduced map solution initiatives to realize automatic driving function by 2020

②Research and development toward the realization of the generation of dynamic information and timely updatesof map dataTo realize an automatic driving function, the realization of a function to incorporate dynamic information reflecting the ever-changing situation on the road into the map database and timely updates and provision of map changing point information is expected.At the exhibition, we introduced our R&D initiative to aggregate, analyze, and utilize car running data (probe information) using an IoT*2 solution for the automobile industry based on IBM Cloud with the cooperation of IBM Japan, Limited.

③Introduced the initiatives of Dynamic Map Planning Co., Ltd., which was established jointly by 15 companiesincluding ZENRIN, Mitsubishi Electric and PASCO.

*1 ADAS : Advanced Driver Assistance System*2 IoT : Internet of Things: A mechanism in which various things connected to the Internet control each other through information exchange

◆Introduced the map solution initiatives to realize dynamic maps and an ADAS*1 automatic driving function

ZENRIN CO.,LTD. http://www.zenrin.co.jpCorporate Management Division, Management Control & IR Department

IR contact email: [email protected]

briefing on results for first 2 quarters of fiscal …13/3 14/3 15/3 16/3 17/3 year-end dividend...

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