Actions toward Realization of Management Conscious of Cost of Capital and Stock Price
8th August, 2024
Company name: ZERO CO., LTD. Code No: 9028 (Tokyo Stock Exchange Standard Section)
Representative: CEO & President - Toshihiro Takahashi
Contact for Inquiries: General Manager of Corporate Planning Department - Takashi Date
Telephone: 044-520-0106

We hereby announce that our Board of Directors, at a meeting held today, analyzed andevaluated the current situation and resolved specific actions for improvement, with a view torealizing management that is conscious of the cost of capital and stock price.
1. Analysis and Evaluation of Current Status
Our P/B ratio was 0.84x as of June 30, 2024, and we are aware that one of our key
management tasks is to achieve a P/B ratio of 1x or more as soon as possible. On the other
hand, ROE has been above 8.0% (the minimum target that should be exceeded in the ItoReview) continuously since the fiscal year ending June 30, 2020, and we recognize that ROE
is above our cost of equity (equity spread is positive) calculated based on the CAPM, then P/Bratio is theoretically above 1x. However, we believe that our share price has been beingpressured downward mainly by the return to shareholders and the liquidity of the stock, aswell as by the stability and growth of profits.
Regarding return to shareholders, the dividend payout ratio continues to be 25%, and since
we has not repurchased any of our own shares since the fiscal year ended June 30, 2017, its
total return ratio is below the average for listed companies.
Regarding stock liquidity, we recognize that a certain liquidity risk premium exists andaffects our cost of equity because daily trading volume remains at a low level.
Regarding the stability and growth of profits, we recognize that in addition to the continued
failure to increase profits, we have not been able to demonstrate growth potential due in partto a lack of investor relations activities.
FY
2018
90,228FY
201989,501FY
2020
92,171

Unit
Millions ofyen
Millions of
3,305
3,675
5,332
yen
Millions of
3,294
3,679
5,373
yen
Millions of
1,658
2,374
3,626
yen
Millions of23,056
24,86428,280
yen
7.3
9.9
13.6％
Share price atYen
801
8681,284
end of period/ShareP/B ratio
x
0.58
0.58
0.76
P/E ratio
x
8.03
6.10
5.93
※1 Profit attributable to equity shareholders of the company※2 Equity attributable to equity shareholders of the company
― ３ ―
Sales
revenue
OperatingincomeProfit beforetax
Net income※1
Total capital
※2
ROE

FY
2021
107,045

FY
2022
132,861FY
2023
140,751

3,912

5,074

6,222

3,947

5,080

6,227

2,535

3,437

4,150

30,06733,28537,209

8.7
1,044

10.9
1,334

11.8
1,852

0.58
6.92

0.68
6.54

0.84
7.54

2.

Specific actions for improvement(A). Revision of shareholder return policy
Effective from the fiscal year ending June 30, 2025, we will raise the dividend payout ratio
from 25% to 33%. We intend to balance the profit attributable to owners of the parent bydividing it into the three categories of "shareholder return," "investment for growth," and"financial stabilization." Our revised dividend payout ratio will be at the average for listedcompanies.

(B). Improvement of stock liquidity
We will aim to comply with the listing standards and reduce the liquidity risk premium byimplementing measures that contribute to improving the ratio of tradable shares after
considering all possibilities, such as widely inviting corporate shareholders to sell our shares.

(C). Improvement of capital profitability
While maintaining our core business of vehicle transportation, we have built a businessportfolio that does not depend on the vehicle transportation business by expanding ourgeneral cargo, human resource, and overseas-related businesses, In the future, we intend to
improve our corporate value by reviewing our business portfolio and asset holdings, investingin new businesses and acquiring companies.
As we acquired SO-ING Co., Ltd. in November 2023, we will aim to further improve ROE
while effectively utilizing financial leverage.
In the new medium-term management plan starting from the fiscal year ending June 30,
2025, we aim to achieve sales of 150 billion yen or more, operating income of 10 billion yen ormore, and ROE of 14.0% or more by the fiscal year ending June 30, 2027.
(D). Enhancement of IR activities
By increasing opportunities for dialogue with shareholders and investors, we will share ourbusiness environment, future growth strategies, and non-financial information, which willlead to improvement of our stock price and P/B ratio.
Specifically, we will enhance the disclosure of the following information.
・Business environment, profitability, customer trends, competitive landscape, andcompetitive advantages by segment
・Future growth strategies and business portfolio
・Non-financial information― ４ ―