Financial Results for the Nine Months Ended December 31, 2022 [JGAAP](Consolidated)
February 14, 2023
Company name: KPP GROUP HOLDINGS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 9274
URL: https://www.kpp-gr.com/
Representative: Madoka Tanabe, Representative Director of the Board, Chairman & CEO
Contact: Shojiro Adachi, General Manager of Finance Division
Phone: +81-3-4431-7215
Scheduled date of filing quarterly securities report:
February 14, 2023
Scheduled date of commencing dividend payments:
Availability of supplementary explanatory materials on quarterly financial results:
No
Schedule of quarterly financial results briefing session:
No(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (April 1, 2022 to December
31, 2022)(1) Consolidated Operating Results(Percentages represent year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen

Nine months ended
December 31, 2022
493,068
Nine months ended
December 31, 2021
410,343(Note) Comprehensive income:%Million yen%

Million yen%

Million yen

%

20.2

17,394190.1

16,248154.7

13,196

143.7

5,995
6,379
5,415
Nine months ended December 31, 2022: 15,022 million yen (73.0%)
Nine months ended December 31, 2021: 8,682 million yen (-%)

Basic earnings per
share

-

Diluted earnings per
share

Yen

Yen

Nine months ended
December 31, 2022
183.84
Nine months ended
December 31, 2021
75.40
(Note) Effective from the beginning of the first quarter ended June 30, 2021, the Group has adopted the AccountingStandard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and others. Therefore, eachamount for the nine months ended December 31, 2021 is an amount after the adoption of the said accounting
standard and others, and does not include any year-on-year percentage changes.
(2) Consolidated Financial Position
Total assets
Nine months ended
December 31, 2022
Fiscal year ended
March 31, 2022
(Reference) Equity:

Net assets

Equity ratio

Million yen

Million yen%

343,336

69,753

20.3

290,707
56,374
19.4
Nine months ended December 31, 2022: 69,676 million yen
Fiscal year ended March 31, 2022: 56,291 million yen

2. Dividends
1st quarter-end

2nd quarter-end

Annual dividends
3rd quarter-end

Yen

Yen

Yen

Year-end

Fiscal year ended
March 31, 2022
5.00
Fiscal year ending
March 31, 2023
9.00
Fiscal year ending
March 31, 2023
(Forecast)
Note: Revision to the forecast for dividends announced most recently: No

Total

Yen

Yen

9.00

14.00

11.0

20.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to March
31, 2023)(Percentages represent year-on-year changes.)
Profit attributable to Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parent
per share
Million yen%

Million yen% Million yen%

Full year
650,000 15.4
21,000 123.9
18,500 109.2
Note: Revision to the earnings forecast announced most recently: No

Million yen%

Yen

15,000 100.1

208.77* Notes:(1) Changes in significant subsidiaries during the fiscal year
(Changes in specified subsidiaries resulting in changes in scope of consolidation): No(2) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued and outstanding shares (common shares)
1) Total number of issued and outstanding shares at the end of the period (including treasury shares):
Nine months ended December 31, 2022
73,244,408 sharesFiscal year ended March 31, 2022
73,244,408 shares2) Total number of treasury shares at the end of the period:
Nine months ended December 31, 2022
1,681,732 sharesFiscal year ended March 31, 2022
1,410,953 shares
3) Average number of shares during the period:
Nine months ended December 31, 2022
Nine months ended December 31, 2021

71,783,517 shares
71,820,820 shares* These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or an audit firm.
* Explanation of the proper use of financial results forecast and other notes(Cautionary notes regarding forward-looking statements)
The results forecast and other forward-looking statements contained in this document are based on the information
currently available to the Company and certain assumptions deemed to be reasonable, and are not intended as aguarantee that the Company will achieve them. Actual results may differ significantly due to various factors. For
assumptions for the results forecast and points to consider in utilizing them, please see “(3) Explanation of
consolidated financial results forecast and other forward-looking information” in “1. Qualitative Information
Regarding Settlement of Accounts for the Nine Months Ended December 31, 2022” of the attachments.

○ Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Nine Months Ended December 31, 2022 .. 2
(1) Explanation on Operating Results .............................................................................................................. 2(2) Explanation on Financial Position .............................................................................................................. 3(3) Explanation of consolidated financial results forecast and other forward-looking information ................. 4

2.

Quarterly Consolidated Financial Statements and Key Notes ............................................................................ 5(1) Quarterly Consolidated Balance Sheets...................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income.............................................. 7(3) Notes to Consolidated Financial Statements ............................................................................................ 10(Notes on Going Concern Assumption) .................................................................................................... 10(Notes on significant changes in the amount of shareholders’ equity) ..................................................... 10(Segment Information, etc.) ...................................................................................................................... 101

1.

Qualitative Information Regarding Settlement of Accounts for the Nine Months Ended December 31, 2022

(1) Explanation on Operating Results(a) Status of Operating Results
During the nine months ended December 31, 2022, the world economy saw concerns over an economic
downturn from the continuous globally high inflation caused by rising energy prices prompted by Russia’s
invasion of Ukraine and monetary tightening policies by European and U.S. central banks.
Meanwhile, a full-scale economic resumption is expected with an easing of China’s three years of zeroCOVID policy.
Due to the mixture of strengths and weaknesses, an uncertain economic situation is currently expected tocontinue.
The Japanese economy continued to recover from the impact of COVID-19, mainly in areas ofaccommodation and food services, in which inbound tourism demand can also be expected. Initiatives arealso taken to revise prices in supply chains as a whole, which is expected to create a foothold to overcome
deflation.
As a result, net sales for the nine months ended December 31, 2022 were 493,068 million yen (up 20.2% yearon-year). In terms of operating profit or loss, gross profit increased year-on-year due to the recovery from theprevious year, in which both domestic and overseas locations were significantly affected by the COVID-19
crisis. Operating profit was 17,394 million yen (up 190.1% year-on-year), ordinary profit came to 16,248
million yen (up 154.7% year-on-year), and profit attributable to owners of parent was 13,196 million yen (up143.7% year-on-year).
On October 1, 2022, the Company transitioned to a holding company structure and had its wholly owned
subsidiary, Kokusai Pulp & Paper Split Preparation Company, succeed the pulp and paper wholesaling
business. On the same date, the Company also changed its trade name from Kokusai Pulp & Paper Co., Ltd.
to KPP Group Holdings Co., Ltd., and Kokusai Pulp & Paper Split Preparation Company changed its tradename to Kokusai Pulp & Paper Co., Ltd.
In addition, the category of reportable segments was changed with the organizational restructuring which
followed the transition to the holding company structure. The following year-on-year comparison is madewith figures for the same period of the previous fiscal year after regrouping into the reportable segments after
such change.
(b) Overview by Segment
Results for the nine months ended December 31, 2022 by business are as follows.
<Northeast Asia>Japan
The paper segment saw a moderate recovery trend in the market. Yet, sales volume further declined year-onyear for graphic paper, and the pre-COVID-19 level is still yet to be met. Net sales, however, increased
year-on-year due to sales price revisions.
The paperboard segment also saw sales volume decline year-on-year for corrugated cardboard base paper
due to decreased exports and a decrease in consumption from a rise in prices, despite persistently strong
sales for the e-commerce-driven home delivery business and beverage packaging materials. As for
packaging paperboard, both sales volume and net sales grew year-on-year due to the recovery in tourism
demand.
The paper production material segment saw both sales volume and net sales significantly grow year-on-year
while waste paper generation declined. As for commercial pulp, demand from domestic household paper
manufacturers fell, and sales volume decreased year-on-year. Yet, net sales greatly exceeded the previous
year, helped by increased sales unit prices.
China
2While actual demand was sluggish from the start of the year, demand for paper and paperboard waslackluster, causing both sales volume and net sales to decline year-on-year. This was due to the impact ofChina’s repeated city lockdowns and the tightening of regulations on private companies under its zeroCOVID policy.
As a result, net sales were 228,775 million yen (up 7.4% year-on-year), and operating profit was 2,648
million yen (down 1.6% year-on-year) for the nine months ended December 31, 2022.
<Europe/South America>
Despite the impact of the slowing down of GDP growth and the high inflation rate seen in the third quarter,
performance in the Europe business improved significantly year-on-year thanks to the revival of various
events and tight supply and demand balance through coexistence with COVID-19. The paper business isseeing a decreasing trend in demand due to repeated price revisions. The packaging business was still
supported by strong demand and continued to perform well. As for the visual communication business, thedemand for outdoor advertisements and vehicle graphics continues to be strong.
As a result, net sales were 227,030 million yen (up 34.5% year-on-year) and operating profit was 14,309
million yen (up 305.2% year-on-year) for the nine months ended December 31, 2022, accounting for a large
percentage of the Group’s performance.
<Asia Pacific>
Oceania
Net sales of the Australia business continued to be strong as a result of the acquisition of a local company
and improvement in market conditions in the commercial print sector. The New Zealand business managed
to raise its performance as a whole despite sales opportunity losses owing to supply shortages.
Southeast Asia
Net sales of the Southeast Asia business increased year-on-year mainly due to the contribution made by thevisual communications business to the performance through Singapore investment deals. As for otherexisting businesses, while the respective regions all continue to face severe price competition, improvement
is seen at the operating profit stage due to the business restructuring and integration.
As a result, net sales were 36,388 million yen (up 31.8% year-on-year), and operating profit was 1,697
million yen (up 157.9% year-on-year) for the nine months ended December 31, 2022.
<Real Estate Leasing>
Net sales decreased year-on-year as rent revenue fell mainly due to vacancy periods arising from theredevelopment of rental parking lots and tenant replacement for the KPP Yaesu Building. This was despite
seeing increased sales at some leased building spaces of the Group owing to a management system revamp.
As a result, net sales were 875 million yen (down 5.5% year-on-year), and operating profit was 162 million
yen (up 18.7% year-on-year) for the nine months ended December 31, 2022.
(2) Explanation on Financial Position
Total assets at the end of the third quarter ended December 31, 2022 were 343,336 million yen, up 52,629
million yen from the end of the previous fiscal year. This was due mainly to an increase in trade receivables
and inventory assets.
Liabilities were 273,582 million yen, up 39,250 million yen from the end of the previous fiscal year. Thiswas due mainly to an increase in trade payables and short-term borrowings.

3

Net assets came to 69,753 million yen, up 13,378 million yen from the end of the previous fiscal year. Thiswas due mainly to the recording of profit attributable to owners of parent. As a result of the above, theequity ratio was 20.3%, up 0.9 points from the end of the previous fiscal year.
(3) Explanation of consolidated financial results forecast and other forward-looking information
The consolidated financial results forecasts for the fiscal year ending March 31, 2023 have remained thesame as the forecast released on November 14, 2022.

4

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
Third Quarter ofCurrent Fiscal Year
(December 31, 2022)

Previous Fiscal Year
(March 31, 2022)
AssetsCurrent assets
Cash and deposits

22,634

19,147

Notes and accounts receivable - trade
Electronically recorded monetary claims - operating

111,168
15,797

126,439
25,377

Merchandise and finished goods
Other

51,27014,83076,672
14,318

Allowance for doubtful accounts(5,177)(7,387)

Total current assets

210,523

254,569

Non-current assets
Property, plant and equipment
Buildings and structures, net

6,333

6,367

Land
Other, net

9,268
18,593

9,218
19,776

Total property, plant and equipment

34,19635,363

Goodwill
Other

4,508
4,739

7,698
5,487

Total intangible assets

9,248

13,186

Investments and other assets
Investment securities

17,02816,926Retirement benefit asset
Other

16,51813,331

15,114
19,369Allowance for doubtful accounts(10,139)(11,193)

Total investments and other assets

36,73840,21780,18388,767

290,707343,336

Intangible assets

Total non-current assets
Total assets

5

(Million yen)
Third Quarter ofCurrent Fiscal Year
(December 31, 2022)

Previous Fiscal Year
(March 31, 2022)
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating

90,743
3,760

107,819
5,301

Short-term borrowings
Commercial papers

26,615
11,00054,352
13,000

Income taxes payable
Provisions

1,264
4,359

3,223
4,219

Other

32,42137,425

Total current liabilities

170,164

225,340

Long-term borrowings
Retirement benefit liability

42,622
4,616

21,719
3,782

Provisions
Other

569
16,359732
22,006

Non-current liabilities

Total non-current liabilities

64,167

48,241

234,332

273,582

Shareholders’ equity
Capital stock

4,723

4,723

Capital surplus
Retained earnings

7,292
38,225

7,292
50,103

Total liabilities
Net assets

Treasury shares

(535)

(853)

Total shareholders’ equity

49,70561,266

3,480

3,303

Deferred gains or losses on hedges
Foreign currency translation adjustment

(112)
(782)

142
3,394

Remeasurements of defined benefit plans

4,000

1,568

Total accumulated other comprehensive income

6,586

8,409

82

77

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests
Total net assets
Total liabilities and net assets

6

56,37469,753

290,707343,336(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31, 2022
Cumulative Third
Quarter of the Previous
Fiscal Year
(From April 1, 2021 to
December 31, 2021)
410,343(Million yen)
Cumulative Third
Quarter of the Current
Fiscal Year
(From April 1, 2022 to
December 31, 2022)
493,068

Cost of sales

343,985

402,218

Gross profit

66,35890,850

Selling, general and administrative expenses

60,36273,455

Operating profit

5,995

17,394

Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains

32
349

42
404

111

47

593

-

Reversal of allowance for doubtful accounts
Other

904
375

1,049
489

2,367

2,033

1,214

1,474

11
-

528
707

Net sales

Non-operating income

Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of trade receivables
Foreign exchange losses
Other

757

468

1,983

3,180

Ordinary profit

6,379

16,248Extraordinary income
Gain on sales of non-current assets

Total non-operating expenses

1,123

883

Gain on sales of investment securities
Gain on reversal of impairment loss

265
188

48
-

Penalty income
Other

164
13

-

Total extraordinary income

1,755

931

Extraordinary losses
Business restructuring expenses

331-

Loss on retirement of non-current assets
Loss on sales of non-current assets

44
0

27
0

Reversal of foreign currency translation adjustment
Loss on valuation of investment securities

556

12
7

2
-

0

935

47

Profit before income taxes

7,199

17,132

Income taxes–current

1,600

3,317

Loss on sales of investment securities
Other
Total extraordinary losses

Income taxes–deferred

169

615

Total income taxes

1,770

3,932

Profit5,429

13,19914

2

Profit attributable to non-controlling interests

7

Profit attributable to owners of parent

Cumulative Third
Quarter of the Previous
Fiscal Year
(From April 1, 2021 to
December 31, 2021)
5,415

8

(Million yen)
Cumulative Third
Quarter of the Current
Fiscal Year
(From April 1, 2022 to
December 31, 2022)
13,196

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31, 2022
Cumulative Third
Quarter of the Previous
Fiscal Year
(From April 1, 2021 to
December 31, 2021)
5,429(Million yen)
Cumulative Third
Quarter of the Current
Fiscal Year
(From April 1, 2022 to
December 31, 2022)
13,199Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(409)
21

(177)
255

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

(54)
3,674

4,078
(2,432)

20

99

ProfitOther comprehensive income

3,252

1,823

Comprehensive income

8,682

15,022Comprehensive income attributable to
Owners of parent

8,668

15,020142

Non-controlling interests9(3) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.

(Segment Information, etc.)[Segment Information]
I

Nine months ended December 31, 2021 (from April 1 to December 31, 2021)
1. Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment

Northeast Asia

Europe/South
America

Asia
Pacific

Real estateleasing

Total

Amountrecorded in
Quarterly
Adjustment
Consolidated(Note 1)
Statements ofIncome(Note 2)

Net sales
Net sales to externalcustomers
Intersegment net sales
or transfers

212,964

168,849

27,604926

410,343-

410,343

1,206

32

30

20

1,289

(1,289)-Total

214,170

168,881

27,634947

411,633(1,289)410,343

Segment profit

2,691

3,531

658

136

7,018

(1,022)

5,995(Notes) 1.

2.

The adjustment to segment profit of (1,022) million yen consists of intersegment eliminations of (12)million yen and corporate expenses of (1,010) million yen. Corporate expenses are mainly general andadministrative expenses at administrative divisions of the head office that are not attributable to any
reportable segment.
Segment profit is adjusted with operating profit in the Quarterly Consolidated Statements of Income.

2. Information on impairment loss on non-current assets and goodwill by reportable segment
Not applicable.

10

II

Nine months ended December 31, 2022 (from April 1 to December 31, 2022)
1. Information on net sales and profit (loss) by reportable segment(Million yen)

Adjustment(Note 1)

Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

Reportable segment

Northeast Asia

Europe/South
America

Asia
Pacific

Real estateleasing

Total

Net sales
Net sales to externalcustomers
Intersegment net sales
or transfers

228,775

227,030

36,388875

493,068-

493,068

1,367

53

13

123

1,557

(1,557)-

Total

230,142

227,083

36,402

998

494,626(1,557)493,068

Segment profit

2,648

14,3091,697

162

18,818(1,423)

17,394(Notes) 1.

2.

The adjustment to segment profit of (1,423) million yen consists of intersegment eliminations of (30)
million yen and corporate expenses of (1,392) million yen. Corporate expenses are mainly general andadministrative expenses at administrative divisions of the head office that are not attributable to any
reportable segment.
Segment profit is adjusted with operating profit in the Quarterly Consolidated Statements of Income.

2. Information on impairment loss on non-current assets and goodwill by reportable segment
Not applicable.

113. Matters regarding changes, etc. in reportable segments(Change in segments)
On October 1, 2022, the Company transitioned to a holding company structure to strengthen global
governance in line with the expansion of its business scale, reform its portfolio, expand new businesses,
and promote sustainability management.
The organization was restructured as a result of the transition, through which managerial decisionmaking, performance evaluation, and others are conducted under a structure with three affiliated core
operating companies, namely Kokusai Pulp & Paper, Antalis, and Spicers, each operating business inNortheast Asia, Europe/South America, and Asia Pacific regions.
Against this backdrop, to provide an appropriate explanation of the Company’s businesses toshareholders and stakeholders, and from a perspective of management approach, reportable segments
have been changed by area to “Northeast Asia,” “Europe/South America,” and “Asia Pacific” from theprevious “wholesale pulp and paper, domestic locations” and “wholesale pulp and paper, overseas
locations” from the third quarter of the fiscal year under review.
Details of business and major countries or regions of each reportable segment are as follows:・Northeast Asia
Paper, paperboard, pulp, waste paper, and other paper-related materials are sold in Japan, China,
Taiwan, Hong Kong, South Korea, and other countries.
・Europe/South America
Paper, paperboard, and other paper-related materials are sold in France, the United Kingdom,
Germany, Switzerland, Chile, and other countries.
・Asia PacificPaper, paperboard, pulp, waste paper, and other paper-related materials are sold in Australia, New
Zealand, Singapore, and other countries.
・Real estate leasing
Real estate is leased in Japan.
Segment information for the nine months ended December 31, 2021 is presented under the segmentcategory after such change.

12