Financial Results for the Six Months Ended September 30, 2023 [JGAAP](Consolidated)
November 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: +81-3-3542-9925
Scheduled date of filing quarterly securities report:
November 14, 2023
Scheduled date of commencing dividend payments:
December 4, 2023
Availability of supplementary explanatory materials on quarterly financial results:
Yes
Schedule of quarterly financial results briefing session:
Yes (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September
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

Six months ended
320,681
September 30, 2023
Six months ended
320,699
September 30, 2022
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen

%

(0.0)

7,133

(42.3)

6,012(46.0)

4,710(49.1)

19.2

12,360223.4

11,128

164.6

9,247

165.3

Six months ended September 30, 2023: 11,347 million yen (-5.7%)
Six months ended September 30, 2022: 12,029 million yen (78.8%)

Basic earnings per
share

Diluted earnings per
share

Yen

Yen

Six months ended
65.65
September 30, 2023
Six months ended
128.72September 30, 2022
(Note) The Company finalized the provisional accounting treatment for business combination as of the end of theprevious fiscal year. Each figure for the second quarter of the fiscal year ended March 31, 2023 is the figurereflecting the finalization of the provisional accounting treatment.
(2) Consolidated Financial Position
Total assets
Six months ended
September 30, 2023
Fiscal year ended
March 31, 2023
(Reference) Equity:

Net assets

Equity ratio

Million yen

Million yen%

340,423

78,41023.0

330,662

67,80820.5

Six months ended September 30, 2023: 78,329 million yen
Fiscal year ended March 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
11.00
March 31, 2024
Fiscal year ending
March 31, 2024
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% 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%

10,500 (33.2)*Notes:(1) Changes in significant subsidiaries during the fiscal year
(Changes in specified subsidiaries resulting in changes in scope of consolidation): Yes
Excluded subsidiary: Antalis Participations(Note) Antalis Participations has been excluded from the scope of consolidation from the second quarter of thecurrent fiscal year because the company was dissolved as a result of merger with Antalis S.A.S., theCompany’s consolidated subsidiary, as a surviving corporation.
(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):Six months ended September 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:
Six months ended September 30, 2023
1,432,455 sharesFiscal year ended March 31, 2023
1,552,732 shares
3) Average number of shares during the period:
Six months ended September 30, 2023
Six months ended September 30, 2022

71,748,392 shares
71,844,209 shares

Yen

146.32

* 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 Six Months Ended September 30, 2023” of the attachments.
(How to obtain supplementary explanatory materials on quarterly financial results)
The Company will hold a briefing meeting for institutional investors and analysts on Thursday, November 30,
2023. Financial results materials to be distributed at the briefing meeting will be posted on our official website
swiftly after it.

○ Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Six Months Ended September 30, 2023 .... 2(1) Explanation of 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.) ........................................................................................................................ 8(Significant Subsequent Events) ............................................................................................................... 101

1.

Qualitative Information Regarding Settlement of Accounts for the Six Months Ended September 30, 2023

(1) Explanation of Operating Results(a) Status of Operating Results
Net sales for the six months ended September 30, 2023 were 320,681 million yen (down 0.0% year-on-year).
Operating profit was 7,133 million yen (down 42.3% year-on-year), ordinary profit came to 6,012 million yen(down 46.0% year-on-year), and profit attributable to owners of parent was 4,710 million yen (down 49.1%
year-on-year).
Results for the six months ended September 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.
The Company applied provisional accounting treatment for business combination for the second quarter ofthe previous fiscal year and finalized the accounting treatment as of the end of the previous fiscal year.
Accordingly, for the purpose of quarter-on-quarter comparison and analysis, the Company used the reviewed
figures based on the finalized provisional accounting treatment.
(b) Overview by Segment
Results for the six months ended September 30, 2023 by business are as follows.
<Northeast Asia>
In Japan, net sales grew in the paper field owing to the price revision, though sales volume fell short of theprevious year due to a continued decrease in graphic paper. In the paperboard segment, while sales ofcorrugated cardboard base paper for beverages were strong, corrugated cardboard base paper saw sales
volume decline year-on-year as flows of people recovered after COVID-19 and demand for at-homeconsumption, including consumption via e-commerce, shrank, in addition to decreased exports andconsumers’ reluctance to buy. As for packaging paperboard, despite a limited recovery of inbound demand,sales volume and net sales exceeded the previous fiscal year due to robust sales of high-end paperboard
such as trading cards. The paper production material segment saw sales volume decline year-on-year as
waste paper generation continued to decrease due to sluggish demand for paper and paperboard in Japan. As
a result, net sales declined year-on-year due to a decrease in market prices. Sales of commercial pulp fell
due to worsening market conditions.
In China, as paper manufacturers continue enhancing their production facilities despite sluggish actual paper
and paperboard demand in and outside the country, the paper and paperboard market is still unlikely torecover. This meant our sales volume and net sales fell from the previous year. our sales volume and net
sales fell from the previous year.
As a result, net sales for the six months ended September 30, 2023 were 153,571 million yen (up 3.9% yearon-year), and operating profit came to 2,022 million yen (down 30.0% year-on-year).
<Europe/South America>
In Europe, amid a market slump due to the above-mentioned economic environment, the wholesale business
saw a decline in demand due to a decrease in product prices and inventory reduction, resulting in sluggish
net sales and profit. Sales of the packaging business were unchanged year-on-year due to sluggish demand
for automotive and e-commerce industries. On the other hand, the visual communication businessperformed steadily, thanks to more frequent events and exhibitions.
Sales of the South America business were mostly unchanged year-on-year, although product prices
decreased due to more products being imported from Asia.
As a result, net sales for the six months ended September 30, 2023 were 141,768 million yen (down 5.0%
year-on-year), and operating profit came to 4,401 million yen (down 52.2% year-on-year).

2

<Asia Pacific>
As for Oceania, both net sales and profit improved significantly as our market share expanded mainly in thecommercial printing business. The packaging business remained strong especially in Australia and thevisual communication business also performed steadily.
As for the ASEAN area, the wholesale paper business performed sluggishly amid intensifying pricecompetition with China, along with slowed demand due to economic stagnation. On the other hand, M&A
in the visual communication area in Singapore contributed to the performance.
As a result, net sales of the Asia Pacific business were 24,582 million yen (up 6.6% year-on-year), andoperating profit came to 820 million yen (down 20.2% year-on-year) for the six months ended September
30, 2023.
<Real Estate Leasing>
While the average vacancy rate of offices in major cities across Japan is improving gradually, the outlook
for office demand is uncertain amid a trend to review the way of working stemming from COVID-19.
Rents were generally weak due to rent adjustments intended to secure tenants, among other factors.
The Group’s 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 759 million yen (up 28.1% year-on-year), andoperating profit amounted to 293 million yen (up 405.4% year-on-year) for the six months ended September
30, 2023.
(2) Explanation of Financial Position
Total assets at the end of the second quarter ended September 30, 2023, were 340,423 million yen, up 9,761
million yen from the end of the previous fiscal year. This was due mainly to an increase in trade receivables.
Liabilities were 262,012 million yen, down 841 million yen from the end of the previous fiscal year. Thiswas due mainly to a decrease in long-term borrowings.
Net assets came to 78,410 million yen, up 10,602 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 23.0%, up 2.5 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)
Second Quarter of Current
Fiscal Year
(September 30, 2023)

Previous Fiscal Year
(March 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade30,731
113,384

21,515
120,979

Electronically recorded monetary claims - operating
Merchandise and finished goods

19,48972,23725,587
68,917

Other
Allowance for doubtful accounts

14,655(6,901)

12,991(7,440)Total current assets

243,596242,550

Buildings and structures, net
Land

8,163
9,189

9,152
9,247

Other, net

19,711

23,135

Total property, plant and equipment

37,063

41,535

Goodwill
Customer-related assets

5,330
2,277

5,290
2,674

Other

6,288

7,466

Non-current assets
Property, plant and equipment

Intangible assets

Total intangible assets

13,896

15,431

Investments and other assets
Investment securities

17,971

21,743Retirement benefit asset
Other

9,554
18,989

9,957
20,359Allowance for doubtful accounts(10,411)(11,155)

Total investments and other assets

36,10440,905

Total non-current assets
Total assets

487,06597,872

330,662

340,423

(Million yen)
Second Quarter of Current
Fiscal Year
(September 30, 2023)

Previous Fiscal Year
(March 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable - trade93,570100,005

Electronically recorded obligations - operating
Short-term borrowings

3,848
52,884

5,236
48,122

Commercial papers
Income taxes payable

10,000
4,034

12,0003,074

Provision for bonuses
Provisions

4,324
1,645

3,600
1,491

Other

37,63937,768

Total current liabilities

207,947

211,298

Bonds payable
Long-term borrowings

10,00021,425

10,00014,105Retirement benefit liability
Provisions

2,111
706

2,031
779

Other

20,662

23,797

Non-current liabilities

Total non-current liabilities

54,90550,713262,853

262,012

Capital stock
Capital surplus

4,723
7,292

4,723
7,292

Retained earnings
Treasury shares

52,629(788)

56,533(727)

Total shareholders’ equity

63,857

67,823

4,056

6,636

Deferred gains or losses on hedges
Foreign currency translation adjustment

33
1,405

(181)
7,189

Remeasurements of defined benefit plans(1,623)(3,137)

Total accumulated other comprehensive income

3,872

10,506

77

81

Total liabilities
Net assets
Shareholders’ equity

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

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

567,80878,410330,662

340,423

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30, 2023

Net sales
Cost of sales

Cumulative Second Quarterof the Previous Fiscal Year
(From April 1, 2022 toSeptember 30, 2022)
320,699
260,670(Million yen)
Cumulative Second Quarterof the Current Fiscal Year
(From April 1, 2023 to
September 30, 2023)
320,681262,776

Gross profit

60,02957,905

Selling, general and administrative expenses

47,66850,771

Operating profit

12,3607,133Interest income
Dividend income
Share of profit of entities accounted for using equity
methodGain on valuation of derivatives

18
258

56
263

30

-

-

458

Reversal of allowance for doubtful accounts
Other

65
382

200
372

Total non-operating income

754

1,350

Interest expenses
Loss on sale of trade receivables

915
318

989
611

Foreign exchange losses
Share of loss of entities accounted for using equity
method
Other

381

438

-

19

371

413

1,987

2,471

11,128

6,012

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets

624

11

-

202
0

624

214

24

3

Loss on sale of non-current assets
Loss on valuation of investment securities

0
7

0
-

Other

12

0

44

3

Profit before income taxes

Total extraordinary losses

11,708

6,223

Income taxes–current
Income taxes–deferred

2,635
(174)

2,194
(684)

Total income taxes

2,461

1,510

Profit

9,246

4,713

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

6

(0)

3

9,247

4,710

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30, 2023
Cumulative Second Quarterof the Previous Fiscal Year
(From April 1, 2022 toSeptember 30, 2022)
9,246(Million yen)
Cumulative Second Quarterof the Current Fiscal Year
(From April 1, 2023 to
September 30, 2023)
4,713

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(199)
(0)

2,579
(215)

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

4,073(1,190)5,742(1,514)

99

40

ProfitOther comprehensive income

2,782

6,633

Comprehensive income

12,02911,347

Comprehensive income attributable to
Owners of parent

12,03011,344(0)3

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

Six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
1. Information on net sales and profit (loss) by reportable segment

Reportable segment
Northeast
Asia

Europe/South
Asia Pacific
America

Real Estate
Leasing

Adjustment(Note 1)

Total

(Million yen)Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

Net sales
Net sales to externalcustomers
Intersegment net sales ortransfers

147,874

149,179

23,053592

320,699-

320,699

896

35

14

13

960

(960)

-

Total

148,770

149,21423,067606

321,659(960)

320,699

Segment profit

2,887

9,216

1,028

58

13,191(830)

12,360(Note) 1.

2.
3.

The adjustment to segment profit of (830) million yen consists of intersegment eliminations of (18)
million yen and corporate expenses of (811) 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.
The Company finalized the provisional accounting treatment for business combination as of the end of
the previous fiscal year. The segment information for the second quarter of the previous fiscal year
reflects this review.

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

8

II

Six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023)
1. Information on net sales and profit (loss) by reportable segment

Reportable segment
Northeast
Asia
Net sales
Net sales to externalcustomers
Intersegment net sales
or transfers
Total
Segment profit(Note) 1.

2.

Europe/South
Asia Pacific
America

Real Estate
Leasing

Total

Adjustment(Note 1)

(Million yen)Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

153,571

141,768

24,582

759

320,681-

320,681

749

-

12

218

980

(980)

-

154,3202,022

141,768
4,401

24,595
820

977
293

321,661
7,538

(980)
(404)

320,681
7,133

The adjustment to segment profit of (404) million yen consists of intersegment eliminations of (429)
million yen and corporate expenses of (834) 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 six months ended September 30, 2022 is presented under the segmentcategory after such change.
(Significant Subsequent Events)(Repurchase of Shares of Common Stock)
We hereby inform you that KPP GROUP HOLDINGS CO., LTD. (“KPP”) resolved at a meeting of theBoard of Directors held on November 14, 2023, to repurchase shares of its common stock pursuant to
Article 156 of the Companies Act of Japan (the “Companies Act”) as applied pursuant to Article 165,
Paragraph 3 of the Companies Act.
1. Reason for repurchasing shares
KPP has decided to repurchase its own shares to improve its shareholder return and capital efficiency,
and enable the implementation of flexible capital policy in response to changes in the management
environment.
10

2. Details of matters resolved at the Board of Directors relating to repurchase(1) Class of shares to be repurchased

Shares of common stock of KPP(2) Total number of shares to be repurchased

3 million shares (maximum)(3) Total purchase price for repurchase of shares

2,400 million yen (maximum)(4) Period of repurchase

From November 15, 2023, to March 31, 2024

(5) Method of repurchase

Open market purchase through the Tokyo Stock
Exchange11