Kokuyo : Summary of Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2023 （1,201KB）

Summary of Financial Results for the Second Quarter of the Fiscal Year

Ending December 31, 2023

August 1, 2023

KOKUYO Co., Ltd.

© 2023 KOKUYO Co.,Ltd.

Contents

1. Second Quarter FY2023 Results
2. Update on Third Medium-Term Plan (2022-2024): Field Expansion 2024
3. Full-YearFY2023 Forecasts
4. Reference Materials

* The business segments are as follows:

Furniture Businesses: FN

Business Supply Distribution:

BS Stationery Businesses:

ST Interior Retail Businesses: IR

• Unless otherwise indicated, monetary figures are rounded down to the nearest hundred million yen. As such, the sum of the figures in a breakdown may not match the stated total.

© 2023 KOKUYO Co.,Ltd.

Executive Summary

Second Quarter FY2023 Results

✔Net sales, while falling short of the initial forecast, grew year on year thanks to a steady increase in orders in the furniture business.

✔Operating income grew year on year and far exceeded our initial forecast. Factors included better profitability in the furniture business, better margins in the Indian stationery business, and a postponement of SG&A expenditures.

Update on Third Medium-Term Plan

✔Reaching the halfway point in our third medium-term plan (2022-2024), we reviewed progress and noted that we're on track with our four priority tasks and business strategies for field expansion.

✔Of the priority tasks, we made huge progress in dynamic investment by enacting M&As. We made progress in the task of balancing social value and business value by launching diversity and circular economy initiatives that are highly relevant to our businesses.

✔Progress in each field: To expand the Workstyle field, we drove forward a global business expansion while expanding our office space lineup in Japan. For the Lifestyle field, we expanded our stationery brands in China and India.

Full-Year FY2023 Forecasts

✔We've upgraded full-yearperformance forecasts in view of recent performance and expenditures.

✔Net sales forecast: Huge growth is expected with Kokuyo Hong Kong contributing to full-year earnings and with recovered growth in the Chinese and Indian stationery businesses.

✔Operating income forecast: Despite higher strategic expenditures, growth is expected in view of good business progress such as the continued winning of orders in the furniture business.

✔Net income forecast: Net income is expected to rise to an all-timehigh with the sale of cross-shareholdings more than offsetting a post-bounce dip from last year's recording of gain on sale of equity-method investment (in Pentel's shares).

✔Dividends: Committed to a stable increase in dividend with a payout ratio of at least 40%, we're going to pay a dividend of ¥65 (interim dividend:

¥32.5), ¥8 more than the initial forecast.

✔Capital policy: We continued identifying and discussing medium- and long-term strategic challenges. We decided to repurchase ¥5.0 billion worth of shares by the end of 2024, for a total return ratio of 50%, gradually reduce our cross-shareholdings,and to retire treasury stock in excess of 5% of 3 our total issued shares.

© 2023 KOKUYO Co.,Ltd.

1. Second Quarter FY2023 Results

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© 2023 KOKUYO Co.,Ltd.

Second Quarter FY2023 Results: Year on Year

Net sales and operating income increased YoY.

Net income decreased YoY. The decrease is a comedown from the recorded gain on sales of investment

securities in FY2022.

Jan-Jun FY2022

result

Jan-Jun FY2023	Jan-Jun FY2023
forecast	result

YoY change

Divergence from

forecast

(Millions of yen)

Net sales	156,424	176,100	173,585	+11.0%	-1.4%
Gross profit	61,219	68,800	68,010	+11.1%	-1.1%
(ratio)	39.1%	39.1%	39.2%
SG&A expenses	48,487	55,600	52,236	+7.7%	-6.1%
(ratio)	31.0%	31.6%	30.1%
Operating income	12,731	13,200	15,773	+23.9%	+19.5%
(ratio)	8.1%	7.5%	9.1%
Ordinary income	14,614	14,000	17,266	+18.1%	+23.3%
(ratio)	9.3%	8.0%	9.9%
Net income attributable	10,845	9,600	11,747	+8.3%	+22.4%
to owners of parent
(ratio)	6.9%	5.5%	6.8%

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© 2023 KOKUYO Co.,Ltd.