Kokuyo : Summary of Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 （1,669KB）

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

Ending December 31, 2022

November 14, 2022

KOKUYO Co., Ltd.

© 2022 KOKUYO Co.,Ltd.

Contents

1. Third Quarter FY2022 Results
2. Full-YearFY2022 Forecasts
3. Shareholder Returns
4. Topics and trends

* 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.
• The new revenue standard has been retroactively applied to the results for FY2021.

Executive Summary

Third Quarter FY2022 Results

• For the year as a whole, we expect year-on-year decline in new office orders in FN, but this should be offset by orders for office renovations.
• Over the first three quarters, earnings decreased year on year. The main reasons were the missing of our target for office renovations, high raw material costs that exceeded expectations, and the Shanghai lockdown's impact on the Overseas ST in Q2.
• We gained many leads for office renovations, but changes in economic conditions meant that we converted fewer leads than we had initially expected.
• Overseas ST: The Chinese ST rapidly recovered from effects of Shanghai lockdown. The Indian ST recovered beyond expectations.
• We implemented a planned sales hike to pass on the higher costs of raw materials. Progress was made in rolling out the price hikes.
• Ordinary income and net profit increased year on year and exceeded forecast. Factors: 1) a bounce-back from the recording, in the previous fiscal year, of ¥5.0

billion following impairment in equity-method affiliate Pentel Co., Ltd., 2) an upswing in non-operating income thanks to foreign exchange gains amid the weak yen, 3) an upswing in extraordinary income with a before-scheduled sale of shares held under a cross-holding arrangement.

Full-year Targets for FY2022

• FN made some progress in securing leads for office renewals, but this was insufficient to compensate for the segment missing the shortfall in the first three quarters. Accordingly, we decided to downgrade the full-year forecasts for net sales and operating income.
• We decided to upgrade the full-year forecasts for net profit after recording gain on sales of investment securities from selling shares in Pentel, and because the sale meant that we were permitted to pay no income tax on the holdings (whereas we were not permitted this when we recorded a write-down of the holdings last year).
• For the year-end dividend, we will pay the targeted figure of 29 yen, higher than the amount we paid last year. We will keep reviewing our dividend policy,

taking into account financial strategy.	3
© 2022 KOKUYO Co., Ltd.

1. Third Quarter FY2022 Results

4

Third Quarter FY2022 Results: Year on Year Comparisons

Year on year, net sales increased, operating income decreased because of higher SG&A expenses,

and profit increased.

						(Billions of yen)
	Jan-Sep	Jan-Sep		Jul-Sep	Jul-Sep
	2021	2022	YoY change	2021	2022	YoY change
	result	result		result	result
Net sales	223.3	224.8	+0.7%	68.0	68.4	+0.6%
Gross profit	87.9	87.2	-0.8%	26.0	26.0	+0.0%
(ratio)	39.4%	38.8%		38.2%	38.0%
SG&A expenses	69.5	72.2	+3.9%	22.3	23.7	+6.6%
(ratio)	31.2%	32.1%		32.8%	34.8%
Operating income	18.3	14.9	-18.4%	3.6	2.2	-39.6%
(ratio)	8.2%	6.7%		5.4%	3.3%
Ordinary income	14.5	17.5	+20.7%	4.0	2.9	-27.8%
(ratio)	6.5%	7.8%		6.0%	4.3%
Profit	11.5	13.0	+13.5%	3.1	2.2	-30.4%
(ratio)	5.2%	5.8%		4.7%	3.2%

5

© 2022 KOKUYO Co., Ltd.