ZERO : Financial Results for the Nine Months of FY2024

May 15, 2025

Company name: ZERO CO., LTD. Stock code: 9028 Representative: President & CEO

Inquiries: General Manager of Corporate Planning Department Scheduled date to commence dividend payments: -

Preparation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results meeting: No

URL: https://http://www.zero-group.co.jp/ Toshihiro Takahashi

Takashi Date

Stock Exchange Listing: Tokyo TEL 044-520-0106

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the third quarter ending of the fiscal year June 30, 2025 (From July 1, 2024 to March 31, 2025)

   1. Consolidated operating results (cumulative)

      (Percentages indicate year-on-year changes)

      	Sales revenue		Operating income		Profit before tax		Quarterly income		Profit attributable to equity shareholders of the company		Total comprehensive income of the quarter
      	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      3Q FY2024/2025	113,023	7.1	7,717	71.4	7,705	70.8	5,471	82.0	5,452	84.2	5,291	55.7
      3Q FY2023/2024	105,570	4.5	4,501	20.0	4,512	20.3	3,005	20.0	2,959	18.4	3,399	31.0

      	Basic quarterly earnings per share	Diluted quarterly earnings per share
      	Yen	Yen
      3Q FY2024/2025	322.03	322.00
      3Q FY2023/2024	175.19	175.18

   2. Consolidated financial position

   	Total assets	Total capital	Equity attributable to equity shareholders of the company	Equity ratio attributable to equity shareholders of the company
   3Q FY2024/2025 FY2023/2024	Millions of yen	Millions of yen	Millions of yen
   	74,380 70,733	41,719 37,873	41,079 37,209	55.2 52.6

2. Cash dividends

   Annual dividends per share

   Total

   Yen

   46.40

6L40

138.40

Yen

(Note) Amendment from the most recently announced dividend forecast: Yes

1. Forecast of consolidated financial results for the year ending June 30, 2025 (From July 1, 2024 to June 30, 2025)

(Percentages indicate year-on-year changes)

(Note) Revisions from the most recently released business forecast: Yes

(Note)

1. Changes in significant subsidiary companies during the current quarter (Changes in the specific subsidiary companies following changes in the scope of consolidation): No

   New - Co. (Company name),

2. Changes in accounting policies, changes in accounting estimates O Changes in the accounting policies required by IFRS

   2 Changes in the accounting policies due to other reasons O Changes in the accounting estimates

3. Number of issued shares (common shares)

fi Total number of issued shares at the end of the period (including treasury shares)

fi Number of treasury shares at the end of the period fi Average number of shares during the period

(total up to this quarter)

Exclusions - Co. (Company name)

No No No

Review of the attached consolidated quarterly financial statements by a certified public accountant or audit firm No Explanation of the proper use of financial results forecast and other notes

The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that the Company considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the major domestic and international markets or exchange rates fluctuation.

Attached Documents - Table of Contents

1. Overview of business results. 2

   1. Overview of Operating Results for the Consolidated Cumulative Period of the Quarter 2

   2. Overview of Financial Position for the Consolidated Cumulative Period of the Quarter 4

   3. Overview of Cash Flows for the Consolidated Cumulative Period of the Quarter 4

   4. Explanation on future forecast information, such as consolidated earnings forecast 5

2. Summary of the quarterly consolidated financial statements and major notes 6

   1. Summary of the quarterly consolidated financial position 6

   2. Summary of the quarterly consolidated profit and loss statement 8

   3. Summary of the quarterly consolidated comprehensive income statement 9

   4. Summary of the quarterly consolidated statement of changes in equity 10

   5. Summary of the quarterly consolidated statement of cash flows 11

   6. Notes regarding summary of the quarterly consolidated financial statements 13

(Notes on going concern assumption) 13

(Changes in Presentation) 13

(Segment information) 13

(Business Combination) 14

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1. Overview of business results

   1. Overview of Operating Results for the Consolidated Cumulative Period of the Quarter

During the third quarter of the consolidated cumulative period, while some regions of Japan's economy showed signs of weakness, the overall trend has been one of gradual recovery or improvement.

In the domestic automobile market, the total number of new vehicles sales increased to 103.5% (statistical data of the Japan Automobile Manufacturers Association) as compared to the consolidated cumulative period of the same quarter from the previous year (hereinafter referred to as the same quarter from the previous year). This increase was driven by the resumption of production for certain vehicle models that had been suspended due to misconduct issues by some automobile manufacturers in the first half of last year, leading to progress in clearing backorders. As a result, the overall domestic sales volume increased. Furthermore, the number of used car registrations and sales also increased to 100.2% compared to the same period of the previous year, as demand for used car exports remained strong.

Domestic

July of 2023 to March of 2024

July of 2024 to March of Compared to the 2025 previous year

4,887,919

4,895,544

100.2%

Total number of registered used vehicles and sales

Number of units related to domestic distribution of automobiles Units: vehicles

*1 Calculated from Japan Automobile Industry Association Statistics *2 Calculated from Japan Automobile Importers' Association statistics *3 Calculated from Japan Automobile Dealers Association statistics

*4 Calculated from Japan Mini Vehicles Association statistics*5 Trial calculated from the number of export deleted registered vehicles in the Japan Automobile Dealers Association statistics

Against this market backdrop, the performance of our group resulted in revenue of 113,023 million yen (107.1% compared to the same period of the previous year) and operating profit of 7,717 million yen (171.4% compared to the same period of the previous year). Also, profit before tax was 7,705 million yen (170.8% compared to the same quarter from the previous year), and the quarterly profit attributable to shareholders of the parent company was 5,452 million yen (184.2% compared to the same quarter from the previous year).

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The segment business results are as follows.

Q1 Domestic automotive related businesses

In our core vehicle transportation business, despite the enforcement of crew working hour regulations under the 2024 Logistics Issue, we were able to ensure our transportation capacity by promoting a division-of-labor system for crew members, strengthening crew recruitment, and increasing payment rates to partner companies. As a result, we increased the number of units for transportation contracts. However, we also faced cost increases due to compliance with the 2024 regulations, rising recruitment and labor costs driven by the Consumer Price Index and minimum wage hikes, as well as higher vehicle and maintenance costs for carrier trucks. Under these circumstances, (l) we focused on gross profit-oriented sales activities, such as acquiring return loads to reduce empty return trips and make effective use of limited transportation capacity; (2) the strong performance of Zero Plus BHS Co., Ltd. and Zero Plus IKEDA Co., Ltd., along with the consolidation of SO-ING Co., Ltd. as a subsidiary, contributed positively; and (3) we gradually raised transportation fees for new and used vehicles starting in January 2024. As a result of these efforts, both revenue and segment profit in the domestic automobile-related business increased year over year.

As a result, the domestic automobile-related business reported revenue of 51,784 million yen (111.1% compared to the same quarter from the previous year) and segment profit of 7,195 million yen (162.5% compared to the same quarter from the previous year).

In the vehicle transportation business, under the medium-term management plan through the fiscal year ending June 2027, we are focusing on the theme of"Returning to the Fundamentals of Quality" We are advancing initiatives such as "Further Responses to the '2024 Logistics Problem'-Reviewing the Role and Operations of Logistics Centers, Securing Transport Capacity," "Reducing and Addressing Accidents and Complaints," and "Promoting Digitalization."

Q2 Human resource businesses

In the shuttle service business, revenue increased as a result of implementing fare revisions at low-profitability locations and improving driver recruitment methods, which enabled successful hiring. This allowed us to secure new contracts and expand vehicle fleets for our Mobility as a Service (MaaS) business. In the human resources services business, revenue also increased due to a rise in the number of dispatched drivers.

As a result of the increased revenue in each business, segment profit also increased.

As a result, the Human Resources business recorded revenue of 17,227 million yen (106.8% compared to the same quarter from the previous year) and segment profit of 691 million yen (112.1% compared to the same quarter from the previous year).

fi General cargo business

In the transportation and warehousing business, revenue decreased due to a decline in cargo volume from major customers and a reduction in subcontracted carriers as a result of the "2024 logistics problem." However, in the port cargo handling business, revenue increased due to a rise in cargo handling volume for certain customers. As a result, overall revenue in the general cargo business saw a slight increase.

Segment profit rose in the port cargo handling business due to the revenue increase. In the transportation and warehousing business, profit also increased due to factors such as identifying and withdrawing from unprofitable transportation operations, launching new warehouse handling projects, and acquiring new customers, which led to higher warehouse space utilization. Additionally, in the same period of the previous year, we recorded a loss related to a fire at our Kawasaki Complex Logistics Center. As such, overall segment profit in the general cargo business increased.

As a result, the general cargo business reported revenue of 4,854 million yen (100.7% compared to the same quarter from the previous year) and segment profit of 1,098 million yen (228.5% compared to the same quarter of the previous year).

Q4 Overseas Related Businesses

In the used car export business, revenue increased due to the issuance of used car import permits in Malaysia, which enabled the shipment of vehicles that had been held up in Japan. On the other hand, in China, the vehicle transportation

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