Financial Results for the Three Months Ended June 30, 2023
[JGAAP](Consolidated)
August 10, 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: +81-3-3542-9925
Scheduled date of filing quarterly securities report:
August 10, 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 Three Months Ended June 30, 2023 (April 1, 2023 to June 30, 2023)(1) Consolidated Operating Results(Percentages represent year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen

Three months ended
160,710
June 30, 2023
Three months ended
154,845
June 30, 2022
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen

%

3.8

3,922

(26.5)

3,310(31.3)

2,660(30.9)

19.4

5,339

244.1

4,818

168.1

3,848

172.5

Three months ended June 30, 2023: 4,309 million yen (-29.9%)
Three months ended June 30, 2022: 6,151 million yen (231.1%)

Basic earnings per
share
Yen

Three months ended
June 30, 2023
Three months ended
June 30, 2022

Yen

37.10

－

53.57

－

(2) Consolidated Financial Position
Total assets
Three months ended
June 30, 2023
Fiscal year ended
March 31, 2023
(Reference) Equity:

Diluted earnings per
share

Net assets

Equity ratio

Million yen

Million yen%

332,180

71,33021.4

330,662

67,808

20.5

Three months ended June 30, 2023: 71,247 million yen
Fiscal year ended March 31, 2023: 67,730 million yen

2. Dividends
1st quarter-end

2nd quarter-end

Annual dividends
3rd quarter-end

Yen

Yen

Yen

Year-end

Total

Yen

Yen

Fiscal year ended
－
9.00
－
11.00
20.00
March 31, 2023
Fiscal year ending－
March 31, 2024
Fiscal year ending
March 31, 2024
11.00
－
11.00
22.00
(Forecast)(Note) Revision to the forecast for dividends announced most recently: No(Note) Breakdown of interim dividend for the fiscal year ended March 31, 2023: Ordinary dividend: 7.00 yen;
Commemorative dividend: 2.00 yen
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March
31, 2024)(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 (1.5)
17,000 (16.7)
13,500 (26.6)(Note) Revision to the earnings forecast announced most recently: No

Million yen%

Yen

10,500 (33.2)

146.32*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):Three months ended June 30, 2023
73,244,408 sharesFiscal year ended March 31, 2023
73,244,408 shares2) Total number of treasury shares at the end of the period:
Three months ended June 30, 2023
1,516,554 sharesFiscal year ended March 31, 2023
1,552,732 shares
3) Average number of shares during the period:
Three months ended June 30, 2023
Three months ended June 30, 2022

71,700,721 shares
71,835,184 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 aguarantee 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 Three Months Ended June 30, 2023” of the attachments.

○ Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Three Months Ended June 30, 2023 ......... 2(1) Explanation on Operating Results .............................................................................................................. 2(2) Explanation of Financial Position ............................................................................................................... 3(3) Explanation of consolidated financial results forecast and other forward-looking information ................. 3

2.

Quarterly Consolidated Financial Statements and Key Notes ............................................................................ 4(1) Quarterly Consolidated Balance Sheets...................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income.............................................. 6(3) Notes to Consolidated Financial Statements .............................................................................................. 8(Notes on Going Concern Assumption) ...................................................................................................... 8(Notes on Significant Changes in the Amount of Shareholders’ Equity).................................................... 8(Segment Information, Etc.) ....................................................................................................................... 81

1.

Qualitative Information Regarding Settlement of Accounts for the Three Months Ended June 30, 2023

(1) Explanation on Operating Results(a) Status of Operating Results
Net sales for the three months ended June 30, 2023 were 160,710 million yen (up 3.8% year-on-year).
Operating profit was 3,922 million yen (down 26.5% year-on-year), ordinary profit came to 3,310 million yen(down 31.3% year-on-year), and profit attributable to owners of parent was 2,660 million yen (down 30.9%
year-on-year).
Results for the three months ended June 30, 2023 by segment are as follows.
From the third quarter of the previous fiscal year, the category of reportable segments was changed. The yearon-year comparison and analysis is made based on the category after such change.

(b) Overview by Segment
Results for the three months ended June 30, 2023 by business are as follows.
<Northeast Asia>
In Japan, net sales grew owing to the price revision in the paper field, but sales volume fell short of theprevious year due to a structural decrease in graphic paper. In the paperboard segment, the beverage
paperboard segment was sluggish due to the unseasonable weather in the first half of the period, but turned
toward a recovery due to the summer heat in the latter half of the period. In addition, the paperboard
segment saw sales volume decline year-on-year as flows of people recovered after COVID-19 and demand
for at-home consumption, including consumption via e-commerce, shrank. As for packaging paperboard,sales volume fell year-on-year due to limited recovery of inbound demand, but sales of high-end paperboard
such as trading cards remained strong.
The paper production material segment saw sales volume remained unchanged due to focusing on in-housecollection despite a decline in waste paper generation in Japan, but net sales declined year-on-year due to adecrease in market prices. As for commercial pulp, a decrease in demand from household paper
manufacturers was offset by exports to China. As a result, sales volume remained unchanged year-on-year
but net sales exceeded the previous year.
In China, actual demand for paper and paperboard at home and abroad was sluggish, but there were certain
products with excessive supply due to an enhancement of production facilities. Moreover, due to a
prolonged market slump, both sales volume and net sales fell year-on-year.
As a result, net sales of the Northeast Asia business were 76,242 million yen (up 3.5% year-on-year), andoperating profit was 1,317 million yen (down 1.6% year-on-year) for the three months ended June 30, 2023.
<Europe/South America>
As for Europe, demand was sluggish due to the recession and excessive inventories in the whole market. In
addition, due to a decline in prices of some products, the paper business performed weakly. Demand at the
packaging business was also sluggish amid the recession. Yet, net sales exceeded the previous year, helpedby the steady demand for fiber-base packaging material. The visual communication business performed
steadily, thanks to strong demand for car wrapping-related and digital printing-related products.
The South America business performed as planned, although paper prices continued declining due to entries
of low-priced products.
As a result, net sales of the Europe business and the South America business were 72,088 million yen (up3.1% year-on-year), and operating profit was 2,488 million yen (down 34.2% year-on-year) for the threemonths ended June 30, 2023.
<Asia Pacific>
As for Oceania, the performance of the commercial printing business improved as sales prices of paper,
which rose from the end of the previous year, remained at high levels this year. In addition, net sales
2increased owing to the effect of M&As executed in the past and sales expansion of office paper sales, but
profit decreased due mainly to the one-time amortization of goodwill arising from an M&A transaction
executed during the first quarter of the current fiscal year.
As for the ASEAN area, the paper business performed sluggishly amid intensifying price competition with
China, along with slowed demand due to economic stagnation. On the other hand, M&A in the visualcommunication business in Singapore contributed to the performance.
As a result, net sales of the Asia Pacific business were 11,999 million yen (up 9.4% year-on-year), andoperating profit came to 198 million yen (down 64.3% year-on-year) for the three months ended June 30,2023.
<Real Estate Leasing>
Net sales and profit increased year-on-year boosted by the KPP Akashicho Building completed in February
2023, despite a vacancy period arising from occupant replacement for the KPP Yaesu Building.
As a result, net sales of the Real Estate Leasing business were 380 million yen (up 23.9% year-on-year), andoperating profit amounted to 150 million yen (up 201.0% year-on-year) for the three months ended June 30,2023.
(2) Explanation of Financial Position
Total assets at the end of the first quarter ended June 30, 2023 were 332,180 million yen, up 1,518 million
yen from the end of the previous fiscal year. This was due mainly to an increase in trade receivables.
Liabilities were 260,850 million yen, down 2,002 million yen from the end of the previous fiscal year. Thiswas due mainly to a decrease in short-term borrowings.
Net assets came to 71,330 million yen, up 3,521 million yen from the end of the previous fiscal year. Thiswas due mainly to recording of profit attributable to owners of parent. As a result of the above, the equity
ratio was 21.4%, 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 forecasts for the fiscal year ending March 2024 are unchanged from thoseannounced on May 15, 2023.

3

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)First Quarter of Current
Fiscal Year
(June 30, 2023)

Previous Fiscal Year
(March 31, 2023)
AssetsCurrent assets
Cash and deposits

30,731

25,210Notes and accounts receivable - trade113,384

116,705

Electronically recorded monetary claims - operating

19,48921,337

Merchandise and finished goods

72,237

70,195

Other

14,655

15,273

Allowance for doubtful accounts(6,901)(7,064)

Total current assets

243,596

241,657

Buildings and structures, net

8,163

8,389

Land

9,189

9,211

Other, net

19,711

20,036

Total property, plant and equipment

37,06337,636

Goodwill

5,330

5,209

Customer-related assets

2,277

2,548

Other

6,288

6,834

Total intangible assets

13,896

14,592

17,971

19,397Retirement benefit asset

9,554

10,740Other

18,98918,592

Allowance for doubtful accounts(10,411)(10,435)

Total investments and other assets

36,10438,29487,06590,523

330,662

332,180

Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets
Investment securities

Total non-current assets
Total assets

4

(Million yen)First Quarter of Current
Fiscal Year
(June 30, 2023)

Previous Fiscal Year
(March 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable - trade93,570Electronically recorded obligations - operating

3,848

95,562
3,680

Short-term borrowings

52,88442,327

Commercial papers

10,00010,000

Income taxes payable

4,034

2,986

Provisions

5,970

5,475

Other

37,63939,897

Total current liabilities

207,947

199,929

Bonds payable

10,00010,000Long-term borrowings

21,42527,772Retirement benefit liability

2,111

1,933

Provisions

706

753

Other

20,662

20,461

Total non-current liabilities

54,90560,920262,853

260,850

Capital stock

4,723

4,723

Capital surplus

7,292

7,292

Retained earnings

52,62954,483

Treasury shares

(788)

(769)

Total shareholders’ equity

63,85765,730

4,056

4,988

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

33

(252)

Foreign currency translation adjustment

1,405

1,888

Remeasurements of defined benefit plans(1,623)(1,107)

Total accumulated other comprehensive income

3,872

5,517

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

5

77

82

67,80871,330330,662

332,180

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30, 2023
Cumulative First Quarterof the Previous Fiscal Year
(From April 1, 2022 toJune 30, 2022)
154,845(Million yen)
Cumulative First Quarterof the Current Fiscal Year
(From April 1, 2023 toJune 30, 2023)
160,710

Cost of sales

126,727

131,576

Gross profit

28,11829,134

Selling, general and administrative expenses

22,77925,211

Operating profit

5,339

3,922

2

9

211

205

19

7

－
15

413

Net sales

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Reversal of allowance for doubtful accounts

1

Other

95

118

Total non-operating income

344

756

Interest expenses

413

477

Loss on sales of trade receivables

133

289

Foreign exchange losses

37

Loss on valuation of derivatives

139

－
390

Other

140

212

Total non-operating expenses

864

1,368

4,818

3,310

Gain on sales of non-current assets

44Gain on sales of investment securities

－

24

Other

－

0

Total extraordinary income

429

Loss on retirement of non-current assets

1

3

Loss on sales of non-current assets

00

Impairment loss

0

Other

0

－
0

Total extraordinary losses

23

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses

Profit before income taxes

4,820

3,336

Income taxes–current

863

788

Income taxes–deferred

108

(117)

Total income taxes

971

671

3,849

2,664

1

4

3,848

2,660

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30, 2023
Cumulative First Quarterof the Previous Fiscal Year
(From April 1, 2022 toJune 30, 2022)
3,849(Million yen)
Cumulative First Quarterof the Current Fiscal Year
(From April 1, 2023 toJune 30, 2023)
2,664

(39)

931

Deferred gains or losses on hedges

(64)

(285)

Foreign currency translation adjustment

2,224

464

130

515

51

17

2,301

1,644

6,151

4,309

6,149

4,304

1

4

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests7(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

Three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
1. Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment

Net sales
Net sales to externalcustomers
Intersegment net sales
or transfers
Total
Segment profit(Notes) 1.

2.

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

Northeast
Asia

Europe/SouthAmerica

Asia PacificReal Estate
Leasing

73,64569,91910,971

307

154,845－

154,845

515

20

2

6

545

(545)

－

74,162
1,338

69,940
3,783

10,974556

313
49

155,391
5,728

(545)
(388)

154,845
5,339

Total

The adjustment to segment profit of (388) million yen consists of intersegment eliminations of (7)million yen and corporate expenses of (381) 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.

8

II

Three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
1. Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment

Net sales
Net sales to externalcustomers
Intersegment net sales
or transfers
Total
Segment profit(Notes) 1.

2.

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

Northeast
Asia

Europe/SouthAmerica

Asia PacificReal Estate
Leasing

76,242

72,088

11,999380

160,710－

160,710

372

－

4

111

488

(488)

－

76,614
1,317

72,0882,488

12,003
198

492
150

161,199
4,155

(488)
(232)

160,710
3,922

Total

The adjustment to segment profit of (232) million yen consists of intersegment eliminations of 188
million yen and corporate expenses of (420) 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.

93. Matters regarding changes, etc. in reportable segments(Change in segment)
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 in the
Northeast Asia, Europe/South America, and Asia Pacific regions respectively.
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 previous fiscal year.
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 three months ended June 30, 2022 is presented under the segment category
after such change.

10