ZOOM Corporation
The Fourth Midterm
Business Plan
2024-2026
February 14, 2024
(Note) The statements in this document that refer to the outlook for the future are based on currently available informationand on a series of assumptions that our Company deems to be reasonable, and are therefore subject to potential risk factors
and uncertainties. Actual results may differ significantly due to different factors.
1Review of the Third Midterm Business Plan
(2021-2023)

2

Review of the Third Midterm Business Plan (2021-2023)

Sales significantly exceeded the target, but operating profit did notreach the target.
Priority Strategies
Brandingenhancement

Some initiatives were launched, including the creation andsales of apparel and other lifestyle goods, to aim for improving
brand awareness through “WE’RE FOR CREATORS.” The
Company will continue them in the future as well because there
is still room for further enhancement and improvement.

Performance Target
Operating profit

Sales
20,0005000

17,901

18,00016,000

Diversification
related to corebusiness

Acquired Mogar (Italy), ZOOM North America (USA), Hookup(Japan) and Sound Service (Germany). Sales in the importagency business accounted for around half of total sales.

Enhancement of
products for
middle-classclientele

The average price of 18 newly launched products during the period
was $199 (retail price in North America). Many of these products,
especially recorders, featured a multilingual menu. Though the 0.1%
product defect rate was not met, the Company continues to aim forthis achievement in the next three years and has taken actions for
improvement to do so.

4500
4000

15,00014,0003500

12,0003000

10,41910,000
8,000
6,000
4,000

Risk
management

The share of procurement from the Asian region other thanChina increased from 5% in 2020 to 13% in 2023. The
Company will continue to promote the diversification of
production countries in the future as well.

2500
Caused by the sluggish business inNorth America in the latter half of FY
2023.
The cumulated operating profit for thethree years achieved 87% of the target.

1,200

0

FY 2020
results
2020実績

1500
1000

755

561

2,000

(million yen)

2000

Targets of Midterm
business
plan
中計目標

500
0

FY 2023実績
2023 results(million yen)

3

The Fourth Midterm Business Plan
(2024-2026)

4

The World ZOOM Aims to Create/Management Vision

In this age of material abundance, we believe that people will be happier when they express their
feelings in any form and interact with each other rather than seek ownership or consumption.
The connection that artists feel when working with other creatives in any place, whether they areon a stage, in front of a PC, or in a living room, will bring more joy and diversity to our culture.
The Company will support this wonderful cycle by developing creative audio instruments andservices and taking on new challenges continuously.

5The World ZOOM Aims to Create / Management Vision
The World ZOOM Aims to Create

Any person can be a Creators

Creator: A figure of selffulfillment doing what they
like in their sincere way,
which contributes to societyManagement Vision of the Fourth Midterm Business Plan for approaching the world
ZOOM aims to create

Supports self-expression as much as possible
through Evolution and Challenge
ZOOM's Key Values

New Code of Conduct: Conduct based on altruistic motivation to provide value with dignity for creators
Five Code of Management
１. Distribute proper profits to all stakeholders
２. Contribute to solving social issues through commitment to SDGs
３. Contribute to improvement in people’s QOL through sound, music andmusical instruments.
４. Aim for a brand that will last for 100 years by following universal
principles
５. Do not get involved in the military industry and nuclear industry

Five Code of Product Development
１. Provide professionals and amateurs with motivation to meet their challenges and continue
their activities respectively.
２. Incorporate something as the “world’s first” in functionality, performance, appearance,
operativity, etc.
３. Create products that make even we ourselves feel like using them from users’ perspective.
４. Design must be connected with functionality.
５. Create a new market with solution-oriented, opportunity-offering products.

6

Numerical Targets
We will continue to promote diversification related to our core business through M&A and focus on the development andsales of attractive products to promote the entire Group’s growth.
Therefore, we will aggressively invest in the new technologies of AI and IoT.
We will also work on the improvement in profitability, distributing the operating cash flow to investment and shareholder
returns in a well-balanced way.

7

Numerical Targets

Add growth through M&A and new technology
Performance targets

2023年予想 Operating profit

Sales
25,000Growth scenario※年平均成長率は2020-2023 USDベース

Average annual
growth of 10% on
dollar basis

22,000Preparingforchallenge

4500

20,000

M&A

5000

Products capitalizingof new technologies

4000

17,903

3500

15,0003000

2,200
10,000Existing
categories

2500
2000
1500

5,000

1000

581

500
0

(million yen)0

FY2023実績
2023 results

Dollar-Yen rate: 140

FY2026目標
2026 targets

Dollar-Yen rate: 130(million yen)

2023

2024

2025

2026
8

Improvement in Profitability and Capital Efficiency

Improve profitability through increased efficiency
Three measures for efficiency
Improvementin profit
margins

Improvementin turnover
ratio

Financial goals

Improve profit margins through standardization and optimization ofdevelopment, as well as cost control with 1 yen in mind, including
efficient sales promotion.

Operating profit margin:6.7％

10％ or more

Decrease lead time by reducing the delivery time of components andunifying destination countries.

ROE： 5.7％

10％ or more

Always optimize inventory by accelerating communication with overseas
sales subsidiaries further.

ROIC：6.8％

10％ or more

PBR：0.8 times
Improvementin
productivity

1 or more times

Concentrate human capital on evolution and challenge by establishingbusiness operation using AI and DX.( Digital Transformation)

9

Investment and Return

Distribute operating cash flow in a well-balanced way
Distribution of operating cash flow (for 3 years)

Usual investment: 1.2 billion yen
Investment

3.2 billion

Investment in growth: 2 billion yen

Return to
stakeholders

Payment of cumulative dividends with no reduction
with the target of the payout ratio at over 30%

yen

Operating cashflow

4.6 billion yen

・Molds for new products and other capital investments

0.5 billion yen

Financial
improvement

0.9 billion
yen・Technological investment in the fields of AI and IoT・Promoting the diversification related to core business・Make up for shortfalls by financing

Introduction of a shareholder special benefit plan

Reduction of interest-bearing debt to strengthen
its financial status
10

Opportunity and Uncertainty Surrounding
the Company
The circumstances after the COVID-19 pandemic and the rise of generative AI are changing
the value and behavior of people.
And we think that there are opportunities in those circumstances.
However, we should also prepare for growing uncertainty.

11

Opportunities and Threats

Increased interest in self-expression is our greatest opportunity
Opportunity

Threats

Widened anddiversified selfexpression

It is a time when all people in the world, regardless ofwhether their countries are developed or not, cantransmit their own expression, which boosts interaction
among them. The key is “their own style.”

Uncertainty inbusiness
confidence

Particularly among young people in North America,
disposable income has decreased because of inflation
and rising interest rates. Though inflation is slowing
worldwide, the economy's downside risk still remains.

Development ofa creator
economyEconomic activities in which creators transmit their own
expression by themselves and earn revenue are developing.
It is forecast that the market size will reach 68 trillion yen($480 billion)* in 2027. As of 2023, hundreds of millions ofcreators are active in the world.

Labor shortage

The jobs-to-applicants ratio is 1.3, which is as high asthat during the economic bubble. The population ofworking age is steadily decreasing.

Risinggenerative AI

AI is lowering the barrier to becoming a creator, Improving
work efficiency, and creating new opportunities for business
improvement.

Geopolitical risk

In the event of a contingency involving Taiwan, if theworst case where a wide range of import to/export from
China are banned because of an economic sanction
occurs, there would be a significant impact on ourpurchases.

Improvement insemiconductor
shortage

The supply of semiconductors has significantly improved,
which has eliminated impact on production time. Costs havebeen lowered due to the reduced need to make one-time
purchases of semiconductors. The cost of components,
particularly memory, is also decreasing.

Competitors

While competitors’ entry in the business domain of ourCompany would revitalize the market, there may be arisk of losing our market share.

* Goldman Sachs Research(2023) The creator economy could approach half-a-trillion dollars by 2027

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Opportunities and Threats: Action Plan

Strengthen internal cooperation and implement manifold actions
Actions for opportunities

Actions against threats
Uncertainty inbusiness
confidence

Utilize efficiency in product development to increase thenumber of new products with reasonable prices and highprofit margins, and functions that users require and expect.

Form a task force comprising cross-sectional members inorder to grasp the latest trend of the creative area andapproach new creators.

Labor shortage

Increase contacts with students, as well as expanding thescope of new graduate hiring. At the same time, improve theskills of employees by dispatching them to graduate
schools, introducing job rotation, and other measures.

Risinggenerative AI

While evolving current products with consideration for the
impact of generative AI on creators, develop new products
and services using AI.

Geopolitical risk

Improvement insemiconductor
shortage

Enhance actions for reducing costs of components wepresently use. For the development of new products,
strengthen the relationship with suppliers by consolidating
major components to balance cost reduction and stablesupply.

Widened anddiversified selfexpression

Develop products through which more people can recognize
the fun of self-expression, and deliver products that are easy
for beginners to use and reasonably priced to more regions
widely.

Development ofa creator
economyIncrease the production of new products in Southeast Asia

to at least 30%. In addition, develop a business model otherthan that for hardware sales.

Pursue overwhelming differentiation from competitors byCompetitors

grasping the technical and manufacturing trend of latest
equipment, including one other than sound devices, andincorporating the world-first elements into all products on
an ongoing basis.

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Philosophy of Growth Strategies
Theat the center of our logo

represents infinity (∞).

We aim to connect two circles that can often conflict with each other in order to create
harmonious growth.
We will achieve our sustainable growth by enhancing our strength further and making it more
distinctive through the infinity cycles.

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Growth Strategies: Three Infinity Cycles (i)Connect the cycle of deepening knowledge and that of exploringknowledge
Integrating the cycle of "exploitation of knowledge," by constantly evolving our main business, and the cycle of"exploration of knowledge," by taking on the challenge of new technologies, enables us to develop new fields by
combining both existing and new technologies.

Development of
new fields byboth existing andnew technologies

Continued improvement of core business・Pursuit of quality
・Pursuit of cost-effectiveness・Speedy development

Experimental trial and action for new business・Introduction of the latest technologies (AI and IoT)
・Development of software service
・Approach to areas we have not entered before

15Growth Strategies: Three Infinity Cycles (ii)Connect the cycle of product-centric thinking and that of marketcentric thinking
While product-based proposals have the potential to create new value, they can also create complacency. Conversely, proposing products thattackle specific market issues makes it difficult to differentiate one’s products from those of other companies.
Integrating these two cycles enables us to come up with challenging and innovative product planning that captures the essence of creators' needs.

Aggressive
product planningthat captures theneeds ofcreators

Product-centric thinking
Taking on a challenge for discovering newneeds by capitalizing on the musician spiritsof employees
Planning products that are differentiated fromthose of competitors

Market-centric thinking
Discovering challenges together with creators based ontechnical thinking
Providing ZOOM-specific solutions
16

Growth Strategies: Three Infinity Cycles (iii)

Connect the cycle of strategies as a market leader and that as amarket nicher
Integrating the two cycles that encapsulate the double nature of
our Company, a top player in the field of recording equipment for creators and a challenger in areas other than recording equipment, puts us in
the unique position of a top player always taking on challenges and of a niche player expanding the market.

Uniquepositioning byaccumulated
know-how

Strategies as a market leader
Preparing lineups that realize the maintenanceand expansion of our market share, as well as
the expansion of the entire market, as theleading company of recording devices forcreators (HAR/PFR)

Strategies as a market nicher
Product development that meets the needs of users orcreate new needs
Increase in profitability by acquiring a unique position
through continued challenges
17Growth Strategies: Sales and Marketing

While promoting the expansion of sales areas and channels,
strengthen the investment in branding
Products in the existing categories

Mature market

・Fostering a community

Open a global forum to build close touch points with customers.

・Establishment of a product ecosystem

Products in new categories

・Improvement of the brand value

Improve the brand value by entering middle/high-end markets throughcreation of new value.

Develop service that maximizes the potential of products.

・Global market research

Collaborate with artists and apparel brands that are greatly supported bycreators.

・Strengthening of connection with new creators

・Limited sale of collaboration models in the ZOOM Store・Strengthening of sales at physical stores

Emerging market

・Strengthening of marketing/sales in the Asian region
Appoint a regional manager to strengthen market analysis and sales
promotion.
・Strengthening of brand management
Build a consistent brand image globally while adapting to regional
characteristics.
・Expansion of multi-channel distribution
Expand the measures for distribution via two channels of MI(MusicalInstruments) and CE(Consumer Electronics) in one country.

Assign specialized personnel locally in order to capture the market trends ofmajor countries as fast as possible.
Actively try to approach creators whom we have not reached yet to co-create
value.

・Grasping challenges creators in emerging countries have
Elicit potential needs that cannot be seen in mature countries to lead to thecreation of new ideas.

・Development of a top brand image

Instill the image of a top brand in the relevant region through differentiatedhigh-quality products and marketing strategies that meet the needs of theregion.

・Strengthening of online sales

18

Strengthening of Our Business BaseOur shared vision will reaffirm our strength and make our management base stronger.

19

Strengthening of Our Business Base: Development of Products and Human Resources

Growth of core competencies through qualitative and quantitative
expansion of product development
Product development
Strengtheningof adevelopment
system

Improvement in
the efficiency of
product
development

Increase the number of product development projects

through proactive hiring of new employees and midcareer employees, development of outsourcing
partners, development of ODM products, M&A, andother initiatives.

Pursue efficiency in product planning and proactive design
standardization by setting up a working group for productplanning in order to improve efficiency in productdevelopment.
In addition to the development team for regular products,

Prior art
development

Accesible
UI

establish a project team devoted to prior art development.
Develop new products adopting the latest technologies,
such as AI and cloud computing, and launch them into themarket.

Incorporate UI that is easy to use for anyone, including
those who need visual aids and the elderly, into new
products to be launched in and after 2024, such as a voice
guidance function and a function for changing a font size.

Personnel development
Flexibledevelopment
systemEstablish a hybrid development system combining a
project-oriented one and a matrix-oriented one. Push ahead
with the optimization of operation to balance the speed-up
of development and the offering of attractive product value.

Enhancement ofstrength

In order to enhance our strength of our employees who are
creators as well, participate in the creative field actively tostrengthen a sense of togetherness with people who are
active in the field. Improve the essential quality of products.

Creation ofleaders in a newgeneration

The key to product development is the existence of newleaders in a new generation who can share value withcreators. Foster such leaders continuously through internal
development programs and external programs, such asdispatching candidates to graduate schools.

Disseminationof philosophy

In order to disseminate the vision of the Fourth Midterm
Business Plan, Evolution and Challenge, and empower
every employee to contribute to this vision, we will
implement internal training and an interview with the top
management.

20

Strengthening of Our Business Base: Strengthening Supply Chains and Business Management System

Promote the optimization of the whole corporate group and soundcorporate management
Strengthening of governance

Strengthening of supply chains
Strengtheningof production
capacity

Improve productivity by enhancing cost improvement
through using a new EMS in Asia to create a competitive
relationship with existing EMS plants. In addition, makelogistics efficient and speedy by introducing a global HUB
warehouse in Asia.

Improvement in
the quality of
production

Continue to aim for a defect rate of less than 0.1%. Adopt a new
EMS with the ability of high quality board mounting and that willallow for a future increase in production throughout Asia.
Continuously refine the quality improvement cycle based upon
the manufacturing priority management manual.

Strengtheningof component
procurement

Improve the ability of procurement by narrowing down
components strategically according to the standardization ofelectronic components and proposals by the procurement
division, and strengthening partnership with suppliers
through intensive purchase.

Riskmanagement

Decentralize the production site in Asia with an eye on
geopolitical risks, and at the same time, avoid future risks oflabor shortage by reducing man-hours for assembly
through improving design and automating inspection.

Business
continuity plan
(BCP)

In order to formulate a BCP for ensuring the production
and the supply of products for customers while protecting
employees and their families in the event of a large-scaledisaster, set up a committee to take the necessary actions
promptly for that.

Business
succession

Development of candidates for CEOs who will be responsible
for the next generation in each group company so that theentire Group can grow sustainably. Formulate a successor
development plan based on the current situation of eachgroup company, and the implementation of the plan shall bemonitored.

Diversity

Recognizing once again that ensuring diversity in humanresources is important for the sustainable growth of theCompany, establish an environment where every employee canplay an active role, irrespective of gender or nationality, by theappointment of female directors, job rotation including overseas
subsidiaries, and the promotion of personnel exchanges.

Promotion of DX
Utilization of AI

Reduce the operational burden and pursue efficiency throughfurther DX of back-office operations (attendance management,
personnel labor management, financial affairs, IR) and theutilization of AI for customer support and manual creation inorder to improve the operational productivity of employees andmanagement efficiency.

21

Sustainability

・ZOOM Group Foundation for the Promotion of Science
The ZOOM Group Foundation for the Promotion of Science established on July 1, 2022, wastransformed into a public interest incorporated foundation as the public interest corporation
authorization was granted by the Cabinet Office in September 13, 2023. In order to give subsidies
to universities and public research institutions that contribute to Japanese manufacturing related
to sound, music, and musical instruments, the Foundation provides financial donations
continuously. [15 million yen in total/three years]

・Accessibility

In 2024, The Company released three new recorders with accessibility features for Blind, Visually
impaired users can navigate these products menus with audible descriptions through the built-in
speaker or headphones. The Company has also developed applications that support text-tospeach and VoiceOver. We will continue to develop products with accessibility so that all
Creators can use ZOOM's technologies equally.

・Environmental friendliness

The Company will continue to work on the reduction of CO2 emissions in transporting products andthe design of eco-friendly packages that are conscious of going paperless etc. and discuss thereuse of products, such as the collection of end-of-life products and the direct sales of slightly
imperfect products certified by the Company.

22