Financial Results for the Nine Months Ended December 31, 2023 [JGAAP](Consolidated)
February 14, 2024
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:
February 14, 2024
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, 2023 (April 1, 2023 to December
31, 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

Nine months ended
December 31, 2023
483,181Nine months ended
December 31, 2022
493,068(Note) Comprehensive income:%Million yen%

Million yen%

Million yen

%

(2.0)

9,832

(43.1)

7,700(52.2)

5,806(55.6)

20.2
17,268188.0
16,122
152.7
13,093141.8
Nine months ended December 31, 2023 11,725 million yen [(21.4)%]
Nine months ended December 31, 2022 14,919 million yen [71.8%]

Basic earnings per
share

Diluted earnings per
share

Yen

Yen

Nine months ended
December 31, 2023
81.07
Nine months ended
December 31, 2022
182.40(Note) The Company finalized the provisional accounting treatment for business combination as of the end of theprevious fiscal year. Each figure for the third 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
Nine months ended
December 31, 2023
Fiscal year ended
March 31, 2023
(Reference) Equity:

Net assets

Equity ratio

Million yen

Million yen%

337,295

77,27822.9

330,662
67,80820.5
Nine months ended December 31, 2023: 77,195 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
March 31, 2023
9.00
11.00
20.00
Fiscal year ending
March 31, 2024
11.00
Fiscal year ending
March 31, 2024
(forecast)
11.00
22.00
(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%

10,500 (33.2)

Yen

146.32*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(Notes) Antalis Participations has been excluded from the scope of consolidation from the second quarter of the
fiscal year because the company was dissolved as a result of a merger with Antalis S.A.S., the Company’s
consolidated subsidiary, as the 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):
Nine months ended December 31, 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:
Nine months ended December 31, 2023
2,444,955 sharesFiscal year ended March 31, 2023
1,552,732 shares
3) Average number of shares during the period:
Nine months ended December 31, 2023
Nine months ended December 31, 2022

71,624,960 shares
71,783,517 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 Nine Months Ended December 31, 2023” of the attachments.”

○ Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Nine Months Ended December 31, 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) ................................................................................................................. 91

1.

Qualitative Information Regarding Settlement of Accounts for the Nine Months Ended December 31, 2023

(1) Explanation of Operating Results(a) Status of Operating Results
Net sales for the nine months ended December 31, 2023 were 483,181 million yen (down 2.0% year-on-year).
Operating profit was 9,832 million yen (down 43.1% year-on-year), ordinary profit came to 7,700 million yen(down 52.2% year-on-year), and profit attributable to owners of parent was 5,806 million yen (down 55.6%
year-on-year).
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 nine months ended December 31, 2023 by business are as follows.
<Northeast Asia>
In Japan, net sales grew in the paper segment owing to the price revision, though sales volume fell short ofthe level of the previous year as demand for graphic paper continued to decrease. In the paperboard
segment, while sales of corrugated cardboard base paper for beverages were strong, the sales volume ofcorrugated cardboard base paper declined year-on-year due to a decrease in exports, suppressed purchasesby consumers, a decline in food packaging associated with a production review to reduce food losses, and ashift to simplified packaging. 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 decreased due to a weaker demand for paper and paperboard in Japan. In addition,
net sales decreased year-on-year due to a drop in market prices. Sales of commercial pulp fell due toworsening market conditions.
In China, demand for paper and paperboard continued to weaken, causing both sales volume and net sales todecline year-on-year.
As a result, net sales for the nine months ended December 31, 2023 were 231,515 million yen (up 1.2%
year-on-year), and operating profit came to 2,464 million yen (down 6.9% year-on-year).
<Europe/South America>
In Europe, as in previous years, both net sales and profit declined in July and August due to the effects ofthe summer holiday season. In the wholesale paper business, prices and sales volume continued to decline,
and in the packaging business, sales and profit did not reach the expected levels. Meanwhile, in the visualcommunication business, Integart, which was newly added to the KPP Group through M&A, contributed toboth net sales and profit.
In South America, business performance was weak due to the impact of economic stagnation, but in North
America, Lovepac, a new addition to the Group through M&A, contributed to net sales and profit.
As a result, net sales for the nine months ended December 31, 2023 were 211,911 million yen (down 6.7%
year-on-year), and operating profit came to 5,975 million yen (down 57.9% year-on-year).
<Asia Pacific>
As for Oceania, both net sales and profit improved significantly as our market share expanded mainly for
office paper, especially in Australia. The packaging business remained generally strong, but performance in
New Zealand and the visual communication business slowed down.

2

As for the ASEAN area, while the visual communication business in Singapore continued to be favorable,
performance remained weak due to the continuing price competition mainly in general paper on top of thedeclining demand caused by economic stagnation.
As a result, net sales of the Asia Pacific business were 38,615 million yen (up 6.1% year-on-year), andoperating profit came to 1,537 million yen (down 9.4% year-on-year) for the nine months ended December
31, 2023.
<Real Estate Leasing>In the Real Estate Leasing segment, 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 1,139 million yen (up 30.1% year-on-year),and operating profit amounted to 435 million yen (up 167.7% year-on-year) for the nine months ended
December 31, 2023.
(2) Explanation of Financial Position
Total assets at the end of the third quarter ended December 31, 2023 were 337,295 million yen, up 6,633
million yen from the end of the previous fiscal year. This was due mainly to an increase in trade receivables
and non-current assets.
Liabilities were 260,016 million yen, down 2,837 million yen from the end of the previous fiscal year. Thiswas due mainly to a decrease in borrowings and income taxes payable.
Net assets came to 77,278 million yen, up 9,470 million yen from the end of the previous fiscal year. Thiswas due mainly to recording of profit attributable to owners of parent and foreign currency translation
adjustment. As a result of the above, the equity ratio was 22.9%, up 2.4 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
Previous Fiscal Year
(March 31, 2023)(Million yen)
Third Quarter of Current
Fiscal Year
(December 31, 2023)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims operating
Merchandise and finished goods
Other

30,731

14,115

113,384

121,236

19,48925,437

72,237
14,65567,78914,877

Allowance for doubtful accounts(6,901)(6,126)

Total current assets

243,596

237,329

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

8,163

9,297

Land
Other, net

9,189
19,711

9,234
24,758

Total property, plant and equipment

37,06343,290Intangible assets
Goodwill

5,330

7,893

Customer-related assets
Other

2,277
6,288

2,594
7,518

Total intangible assets

13,89618,005Investment securities
Retirement benefit asset

17,971
9,554

21,778
9,480

Other
Allowance for doubtful accounts

18,989(10,411)15,704(8,294)

Total investments and other assets

36,104

38,66887,06599,965

330,662

337,295

Investments and other assets

Total non-current assets
Total assets

4

Previous Fiscal Year
(March 31, 2023)(Million yen)
Third Quarter of Current
Fiscal Year
(December 31, 2023)

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations operating
Short-term borrowings
Commercial papers

93,570104,389

3,848

5,271

52,88410,00040,086
11,000

Income taxes payable
Provision for bonuses

4,034
4,324

3,079
3,433

Provisions
Other

1,645
37,6391,280
39,236

Total current liabilities

207,947

207,776

10,00010,000Long-term borrowings
Retirement benefit liability

21,425
2,111

14,076
1,923

Provisions
Other

706
20,662

1,028
25,211

Total non-current liabilities

54,90552,239262,853

260,016

Shareholders’ equity
Capital stock

4,723

4,723

Capital surplus
Retained earnings

7,292
52,6297,292
56,824

Treasury shares(788)(1,431)

Total shareholders’ equity

63,85767,409

4,056

6,692

Non-current liabilities
Bonds payable

Total liabilities
Net assets

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

33

23

Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests

1,405(1,623)

7,014(3,944)

3,872

9,785

77

83

Total net assets

67,80877,278

330,662

337,295

Total liabilities and net assets5(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31, 2023

Net sales
Cost of sales

Cumulative Third Quarterof the Previous Fiscal Year
(From April 1, 2022 to
December 31, 2022)
493,068
402,337(Million yen)
Cumulative Third Quarterof the Current Fiscal Year
(From April 1, 2023 to
December 31, 2023)
483,181395,931

Gross profit

90,731

87,250

Selling, general and administrative expenses

73,462

77,417

Operating profit

17,268

9,832

42

110

Dividend income
Share of profit of entities accounted for using
equity method
Gain on valuation of derivatives

404

425

47

21

-

458

Reversal of allowance for doubtful accounts
Other

1,049
489

206
440

Total non-operating income

2,033

1,663

1,474
528

1,502
959

707
468

684
649

Non-operating income
Interest income

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

3,180

3,796

16,122

7,700

883
48

21
328

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Other

-

0

931

350

Loss on retirement of non-current assets
Loss on sales of non-current assets
Reversal of foreign currency translation
adjustment
Loss on valuation of investment securities

27
0

3
3

12

-

7

-

Loss on sales of investment securities
Other

0

0
0

Total extraordinary losses

47

7

Profit before income taxes

17,005

8,044

Income taxes–current

3,317

2,579

Total extraordinary income
Extraordinary losses

Income taxes–deferred

592

(347)

Total income taxes

3,909

2,232

Profit13,096

5,812

2

5

13,093

5,806

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

6

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31, 2023

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income

Cumulative Third Quarterof the Previous Fiscal
Year(From April 1, 2022 to
December 31, 2022)
13,096(Million yen)
Cumulative Third Quarterof the Current Fiscal
Year(From April 1, 2023 to
December 31, 2023)
5,812

(177)

2,636

255

(10)

4,078

5,545

(2,432)(2,321)

99

63

1,823

5,912

14,91911,725

14,916
2

11,7195Comprehensive 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)
The Company repurchased 1,012,500 shares of its common stock pursuant to a resolution reached at themeeting of the Board of Directors on November 14, 2023. As a result of the repurchase among other factors,
treasury shares increased 643 million yen during the nine months ended December 31, 2023, and amounted
to 1,431 million yen at the end of the third quarter of the fiscal year under review.
(Segment Information, etc.)[Segment Information]
I

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

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

2.
3.

Europe/South
Asia Pacific
America

Real Estate
Leasing

Total

Adjustment(Note 1)

Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

228,775

227,030

36,388875

493,068-

493,068

1,367

53

13

123

1,557

(1,557)-230,1422,648

227,083
14,18236,402
1,697

998
162

494,626
18,691(1,557)(1,423)493,068
17,268The 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.
The Company finalized the provisional accounting treatment for business combination as of the end of
the previous fiscal year. The segment information for the nine months ended December 31, 2022 reflects
this review.

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

8

II

Nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
1. Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment
Northeast
Asia

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

2.

Europe/South
Asia Pacific
America

Real Estate
Leasing

Total

Adjustment(Note 1)

Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

231,515

211,911

38,615

1,139

483,181-

483,181

1,423

-

32

327

1,783

(1,783)-232,9382,464

211,911
5,975

38,648
1,537

1,467
435

484,965
10,413(1,783)(580)

483,181
9,832

The adjustment to segment profit of (580) million yen consists of intersegment eliminations of 653
million yen and corporate expenses of (1,233) 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.
(Significant Subsequent Events)(Business combination through share acquisition)
1. Acquisition of shares of Signet Pty Ltd
At a meeting of the Board of Directors on January 23, 2024, the Company resolved that DAIEIAUSTRALASIA PTY LTD, the operating company of Spicers Limited (location: Melbourne,
Australia; hereinafter referred to as “Spicers”; a company with a fiscal year ending December 31),
the Company’s consolidated subsidiary, would acquire all of the shares of Signet Pty Ltd (location:
Brisbane, Australia) and make it a subsidiary. A share purchase agreement was concluded as ofFebruary 5, 2024.
(1) Overview of business combinationa) Name of the acquired company and the details of its business
Name of the acquired company:
Signet Pty Ltd
Details of business:
Wholesale business of industrial packaging-related
products, etc.
b) Reason for the business combination
Signet has warehouses and distribution centers located throughout Australia, and is engaged
primarily in the wholesale of industrial-packaging-related products and the manufacture andsale of stretch film. It operates its business as a supplier that provides products to a numberof customers in a wide range of industrial sectors.
The acquisition of Signet strengthens the industrial packaging business and e-commerce
functions of the Spicers Group, which operates in Australia, and is expected to createsynergies such as streamlining logistics and expanding the customer base. As such, we haveconcluded the share purchase agreement.
c) Date of business combination:
Early April 2024 (plan)d) Legal form of business combination:
Acquisition of shares in consideration of cashe) Name of the combined entity:
No change
9

f)
g)

Percentage of voting rights to be acquired:
100%
Main rationale for determining the acquirer:
The Company’s consolidated subsidiary is to acquire shares in exchange for cash.

(2) Cost for acquisition of the acquired company and type of consideration
Consideration for acquisition
Cash7,270 million yen (AUD 75 million)
Acquisition cost
7,270 million yen (AUD 75 million)* Acquisition cost and consideration are adjusted based on changes in working capital and net
debt as of the transaction completion date.
(3) Amount of goodwill arising, cause of goodwill, method of amortization, and amortization period
Goodwill is not confirmed at this time.
2.

Acquisition of shares of Tpf Srl
At a meeting of the Board of Directors on January 23, 2024, the Company resolved that its
consolidated subsidiary Antalis S.A.S. (location: Paris, France; hereinafter referred to as “Antalis”; acompany with a fiscal year ending December 31) would acquire all of the shares of Tpf Srl (location:
San Cesario sul Panaro, Italy; hereinafter referred to as “Tpf”) and make it a subsidiary. A sharepurchase agreement was concluded as of January 30, 2024.
(1) Overview of business combinationa) Name of the acquired company and the details of its business
Name of the acquired company: Tpf Srl
Details of business:
Processing and sale of wood packaging products, etc.
b) Reason for the business combination
Tpf is based in Italy and is engaged in the processing and sale of custom-made wooden
packaging products. The company also engages in the wholesale business of VCI products(VCI film, VCI paper, etc.) and operates its own VCI brand “VCI Force.”
While Antalis Italy is mainly engaged in the packaging business, incorporating the target
company will enable Antalis to diversify its products and establish a foothold in the industrial
area of northern Italy (Emilia-Romagna region) as it strives to further expand its businessdomain going forward. As such, the acquisition of shares has been implemented.
c) Date of business combination:
January 31, 2024d) Legal form of business combination:
Acquisition of shares in consideration of cashe) Name of the combined entity:
No changef) Percentage of voting rights to be acquired:
100%g) Main rationale for determining the acquirer:
The Company’s consolidated subsidiary acquired the shares in exchange for cash.
(2) Cost for acquisition of the acquired company and type of consideration
Consideration for acquisitionCash4,477 million yen (EUR 28.5 million)
Acquisition cost
4,477 million yen (EUR 28.5 million)(3) Amount of goodwill arising, cause of goodwill, method of amortization, and amortization period
Goodwill is not confirmed at this time.

10(Issuance of bonds)
At a meeting of the Board of Directors on February 14, 2024, the Company passed the following
comprehensive resolution regarding the issuance of domestic unsecured straight bonds.
1.
2.
3.
4.
5.
6.
7.

Total issuance amount
Scheduled issuance period
Amount to be paid in
Maximum interest rate
Redemption deadline
Redemption method
Use of funds

Can be issued multiple times within a range of up to 10,000 million yen
From March 1, 2024 to September 30, 2024
100 yen per 100 yen of each bond
Up to 2.0% per annum
Within five years
Lump-sum redemption at maturity
Use the funds for investment and lending, capital spending, working
capital, and loan repayment11