Itoki (TYO: 7972)
Coverage start

Designing tomorrow's 'work'.
Office DX Company

Other Products

Summary◇ Itoki was founded in Osaka in 1890. It is one of the leading office furniture companies
and runs an integration of manufacturing and sales. The company's products are renowned
for their high design quality. With a mission statement of "designing tomorrow's work", thecompany has gone one step beyond providing office furniture to propose the creation ofworking environments that suit customers' working styles. The company advocates Office3.0, the DX of the office, and aims to realise improved office productivity. In the Equipment/ Public business, the company provides logistics-related systems, research facility
equipment, etc. Under the medium-term management reform 'RISE ITOKI 2023', which
ends in 2023, the company aims to become a highly profitable company with a robust
structure and to achieve an operating profit of 6.5 billion yen.
◇ Stock price observation: the company’s share price has risen 95% over the past year,
while TOPIX fell 0.2% during the same period. Its performance stands out compared with its
peers. Various factors are attributable to the stellar performance of the shares, including
the fact that renewal projects have remained strong following the outbreak of COVID-19
and that the company's marketing policy, which emphasises profitability on top of
proposal-based sales, is beginning to produce results. In addition, the company has recently
been focusing on investor relations and has made more shareholder-focused management
decisions. The company's share price has been undervalued compared to its peers for along time, and even at the current share price level, PBR remains at 0.62. Further shareprice correction is reasonably expected if the new growth story progresses and profitability
improves further under the new president, who took office in March 2022.
◇ Workplace business: Having developed from the manufacture and sale of officefurniture, in recent years, the company has provided a range of sales proposals andconsulting services to improve the office's productivity as a 'place of work'. Althoughaffected by the supply of new office buildings, office renewal projects account for morethan half of the recent total. The company advocates Office 3.0, a reform of the way ofworking through IT and DX and aims to offer DX proposals for office furniture that only thecompany can provide. The company's office furniture has been highly regarded for its
superior design. Still, in recent years it has been working to optimise its selling prices tomatch the value it provides, and profitability has improved significantly. Sales in FY12/2022
were 85.9 billion yen, and the operating profit was 2.5 billion yen.
◇ Equipment / Public business: provides logistics solutions such as warehousing andautomated logistics system equipment, equipment for research facilities, andenvironmental and space construction for public facilities. The company has developed
many industry-first products and boasts the No.1 delivery record for shuttle-type
automated warehouses. The logistics-related systems business is expected to expand,driven by e-commerce growth. In FY12/2022, the company booked sales of 35.6 billion yen
and an operating profit of 1.4 billion yen.
◇ Information Technology / Sharing business: this business operates IT and sharing
businesses, including system development and system verification. Office space sharing
business performed well. Sales in FY12/2022 were 1.6 billion yen, and the operating profit
was 0.4 billion yen.
◇Recent financial performance: In FY12/2022, sales and operating profit reached record
highs, with sales of 123.3 billion yen (+6.4% YoY) and operating profit of 4.58 billion(+79.0% YoY). The company recorded an extraordinary gain from the sale of land and otherassets, resulting in a significant increase in profit attributable to owners of parent to 5.29
billion yen, or an increase of 353.9% YoY. It plans to pay a dividend of 37 yen a share for the
performance of FY12/2022, including a special dividend of 20 yen. It forecasts sales of 130
billion yen (+5.4%) and an operating profit of 6.5 billion yen (+41.8%) for FY12/2023 to
overachieve the initial operating profit target of 6 billion yen in the medium-term
management plan.

Itoki| 22/3/2023

As of 22 March, 2023
Share price (3/20)

685 Yen52weeks high/low
Avg Vol (3 month)Market Cap
Enterprise ValuePER (23/3 CE)
PBR (22/3 act)
Dividend Yield (23/3 CE)
ROE (TTM)
Operating margin (TTM)
Beta (5Y Monthly)
Shares Outstanding¥812/333
317.0 thou shrs
¥31.2 bn
¥22.8 bn
8.38 X
0.62 X
3.65 %
10.91 %
3.71 %
0.98
45.664 mn shrs

Listed market

TSE Prime section

Share price performance
Stock pricevs. TOPIX Index (RHS)

800

200
600
400

100

200
0
3/22/22

6/22/22

9/22/22% ofShare prices
Relative share price12/22/22

1mo.
-8.1%
-4.7%

3mo.
20.8%
19.3%

0
3/20/23

12mo.
94.6%
95.1%

Points of interest
The company is characterised by its welldesigned office furniture. It is aiming for
office DX through the fusion of fixtures anddata. Equipment / Public business has
strengths in research and logistics facilities.
The company is working on structuralreforms, and its ROE for FY12/2022 improved
significantly to 11.7%. The company targets
sales of 130 billion yen and an operating
profit of 6.5 billion yen for FY12/2023.
This report (Company note) has been prepared at
the request of Itoki Corporation. For details, pleaserefer to the Disclaimer on the last page.

1

Table of contents
Summary
Key financial data
Company profile
History
Group overview / Production structure / Business diagram
Business overview
Workplace business
Equipment / Public businessInformation Technology / Sharing business
Financial results
Full-year results for FY2022/12
FY2023/12 full-year forecast
Growth strategy
Medium-term management vision
Stock information, etc.
Share Price Trend
Stock price observation
Major shareholders, Shareholding by ownership, Shareholder return policy
Corporate governance and the top management
Sustainability
Financial data

1
2
3
4
6
9
9
15
17
18
18
20
21
21
21
21
23
25
26
29
31

Key financial data

(Unit: ¥mn)

Fiscal Year

2016/122017/122018/122019/122020/122021/122022/12Net sales

101,684

108,684

118,700

122,174

116,210

115,839

123,324

Cost of sales

65,021

69,966

77,43680,49574,322

74,14577,575Gross profit

36,66338,71841,264

41,67941,88841,69445,749

SG&A expenses

33,86235,761

39,33940,77640,08939,15841,167

Operating income

2,800

2,956

1,925

903

1,798

2,536

4,582

Ordinary income

3,087

3,295

2,365

945

1,881

2,437

4,177

Net income

1,850

2,442

1,742

-579

-355

933

5,181

Current assets

52,41058,147

62,143

58,10957,18357,75371,027

Cash and deposits

19,83919,977

16,52917,03018,246

17,451

26,976

Non-current assets

43,27144,07346,55949,95547,912

46,14444,26016,80615,995

15,76017,22916,116

17,612

17,462

Total assets

95,681

102,221108,703108,778

105,096

103,898

115,288

Investments and other asset
Total liabilities

50,27854,894

61,21062,94460,90658,82265,377

Total net assets

45,40247,32647,49245,834

44,18945,07649,910Equity ratio (%)

46.98

45.84

43.10

41.71

41.69

43.25

43.26
5,804

Cash flow from operating activities

5,072

3,565

1,384

3,586

4,561

2,774

Cash flow from investing activities-4,044-2,971-3,094-3,221-1,152-1,170

4,923

Cash flow from financing activities-2,571-706-2,4630-2,267-2,658-1,426

Cash and cash equivalents at end of period

18,483

18,571

14,54015,494

16,697

15,79725,420Source: Omega Investment from company materials

Itoki| 22/3/2023

2

Company profile
Itoki is one of the four largest manufacturers of office furniture in Japan. It is a long-established company witha history of more than 130 years since its foundation in 1890.
With a mission statement of "designing tomorrow's work", the company not only manufactures and sells officefurniture but also provides consulting on working styles and space design, offering the value of creating spaces,
environments, and places for workers. The company has long been committed to designing, and its products
are renowned for design excellence.
The three business segments are.
Workplace business: mainly manufactures and sells office furniture, but as stated in its mission statement, thecompany advocates the creation of 'working environments' tailored to how customers work. In recent years,
the company has actively responded to the needs of a growing number of ways of working, such as working
from home and in dispersed locations, in addition to working "collectively" in an office. Moreover, thecompany provides consulting services and other total solutions.
Main products and services; office furniture (desks and workstations, tables, office and conference chairs,
system storage furniture, lockers), manufacture and sale of construction materials for office spaceconstruction, interior decoration work, office space design, project management for office relocation, etc.,
office repair and maintenance services, telework furniture, study furniture.
Equipment / Public business: provides logistics-related facilities, which have proliferated in recent years, aswell as research facility equipment for pharmaceutical companies, universities and research institutions, andequipment for public facilities.
Main products and services; logistics equipment (shuttle cart automatic storage systems (SAS)), storage
shelves, special doors, office security systems, research facility equipment, powder machinery andequipment, environmental and space construction for public facilities, etc.
Information Technology / Sharing business: system development for promoting DX in companies, support forhuman resource development in organisations, and system verification and office space sharing businesses.
Main products and services; office sharing, office equipment rental and re-use, IT system development,
system verification and packaged software.
The composition of sales by region is as follows: Japan, 112,671 million yen (91.4%); Asia, 10,210 million yen(8.3%); and others, 356 million yen (0.3%), with domestic sales accounting for over 90%.

Sales by Segment

IT / Sharing business1.6 bn. yen（1.3％）

Equipment /Public business35.6 bn. yen（28.9％）

Total net sales

123.3 bn. yen Workplacebusiness（FY2022/12）

85.9 bn. yen（69.7％）

Source: Omega Investment from company materials

Itoki| 22/3/2023

3

History (See the history table on the following page)
1890-1949: from popularising inventions and patents to selling and manufacturing officeequipment.
The company's origins date back to December 1890, when founder Kiichiro Itoh founded Itoh Ki Shoten in
Osaka's Koraibashi district to promote his inventions and patents and to handle imports. In 1903, the company
began importing and selling paper clips and staples. Both are commonly used in offices today but trace their
origins back more than 100 years when the company started to sell them. Later, in 1908, the Itoki Shoten
Engineering Department was established. It started producing office equipment such as hand-carry safes andsimple stationery. In the sense that the company began its business by importing, selling and repairing foreign
products after the opening of Japan to the outside world in the Meiji era, and later took on the challenge ofdomestic production and expanded its business, it has something in common with other Japanesemanufacturing companies that are now world leaders, such as Seiko Group Corporation (Hattori Watch Shop)and Brother Industries (Yasui Sewing Machine Shop).
In 1910, the company began importing and selling English typewriters, thermal bottles, etc. In 1913, it launched
the independently developed ‘Zeni-ai-ki’ (money recording and disbursing machine). In 1925, it began
manufacturing its steel-made furniture, including lockers. In 1937, it expanded into Tokyo, opening a Tokyo
branch in Gofukubashi, Chuo-ku.

1950-1969: Steel furniture creates modern offices. Highly regarded in terms of design.
After the war, demand for office furniture surged as Japan's economy grew rapidly; in 1955, the company
began manufacturing and selling steel desks. The company's steel furniture subsequently paved the way forvarious types of desks. In 1960 it established three major systems for filing, slip accounting and office layout. In
response to the demand for office rationalisation during the period of high economic growth, the company
offered filing and slip accounting systems, as well as 'office layout', a functional arrangement of furniture,
office equipment and supplies centred on desks, thereby establishing the Itoki brand in office systematisation.
Furthermore, in 1962, the company expanded into the field of home and student desks. In 1967, the company
adopted the catchphrase 'Good Design, Good System', establishing its image as a design company.
Meanwhile, as its business expanded, the company listed its shares on the Second Section of the Osaka
Securities Exchange in October 1961 and on the Second Section of the Tokyo Stock Exchange in September
1962.

1970-1989: office planning, promoting the New Office.
In the 1970s, the company began technical cooperation with overseas companies and introduced state-of-theart office systems to Japan. Beyond the mere supply of office furniture, the company had come to offer 'officeplanning’. In 1976, 14 of its products were selected for the G-Mark, and the company's reputation for designcontinued to grow. Since then, many products have been awarded the G Mark every year. In 1977, thecompany launched a research equipment and furniture system in cooperation with the Swiss company Vivo.
With this, the company entered the current Equipment / Public business field.
In 1984, local subsidiaries were established in Singapore and the USA. The company also developed its businesswith an eye on overseas markets. In 1985, the company adopted its CI, which is still used today. In 1987, thecompany was listed on the First Section of the Tokyo Stock Exchange and the Osaka Securities Exchange.

1990 to present: over 100 years in business and creating offices for the 21st century.
Even after 100 years in business, the company continues to provide products and services that meet thedemands of the times. In 1994, the company began selling free-access floors to meet the needs of the times. It
also focuses on quality control, and in 1998 it was registered for ISO 9001 certification. In 2001, the company
completed the accreditation of all its offices.
In 2005, the manufacturing division Itoki Crebio and the sales division Itoki merged and changed the company
name to Itoki Corporation. The integration of manufacturing and sales enabled quicker management decisions
and rationalisation of the group in the face of accelerating global trends.
Since then, the company has developed and marketed various new products in response to the demands of thetimes. The company offers ergonomically designed office chairs and office furniture; in 2017, the FLIP FLAP
(chair) won the international design award Red Dot Design Award.
In 2018, offices in the metropolitan area were consolidated in Nihonbashi, and ITOKI TOKYO XORK wasestablished. It advocates a comprehensive work style strategy that maximises workers' abilities and intends to
conduct various demonstrations as a place to practise the next generation of work styles, and to disseminate
the various knowledge and know-how generated from these experiments to society.

Itoki| 22/3/2023

4

year
(e.g. AD) month
1890

Dec.

1903

Launched 'Zeni-ai-ki'(money recording anddisbursing machine) 1913

1910
1950

Apr.

Spun off from Itoki Shoten, Itoki Kosakusho Co., Ltd. was founded in Izuo, Taisho-ku, Osaka.

1952

Jul.

A new Imafuku plant was built in Joto-ku, Osaka.

1954

Dec.

Head office moved to Joto-ku, Osaka.

1961

Jan.

Itoki All Steel Co., Ltd. was established (now a consolidated subsidiary).

Oct.

Shares listed on the Second Section of the Osaka Securities Exchange.

Sep.

Shares listed on the Second Section of the Tokyo Stock Exchange.

Dec.

Home Furniture Sales Divisions opened in Tokyo and Osaka.

1963

May

New Neyagawa plant established in Neyagawa-ku, Osaka.

1968

Nov.

Kyoto Plant established in Yawata City, Kyoto.

1972

Sep.

Shiga Plant was established in Omihachiman City, Shiga Prefecture.

1974

Jun.

Fuji Living Industry Co., Ltd. in Hakusan City, Ishikawa Prefecture became a subsidiary andproduced pipe chairs (currently a consolidated subsidiary).

1984

Aug.

Kyoto Plant No. 2 was established in Yawata City, Kyoto, relocating the Imafuku Plant.

1986

Nov.

An electronic device manufacturing plant was established in Omihachiman City, Shiga.

1987

Jun.

Listed on the First Section of the Tokyo Stock Exchange and Osaka Securities Exchange.

1991

Oct.

A chair manufacturing plant was established in Shiga Omihachiman City, Shiga.

1992

Aug.

Kyoto Plant No. 2 is relocated to Omihachiman City, Shiga.

1999

Aug.

Expansion of the Neyagawa plant in Neyagawa-ku, Osaka.

2000

Oct.

Itoki Technical Service Corporation was established.

2002

Nov.

Established Itoki (Suzhou) Furniture Co., Ltd. in China (now a consolidated subsidiary Novo
Workstyle (China) Limited).

2003

Mar.

Itoki Market Space Inc., was established (now a consolidated subsidiary).

2005

Jun.

Merged with the former Itoki Co., Ltd. and changed its name from Itoki Crebio to Itoki
Corporation.

Nov.

The Shiga Logistics Centre was established in Omihachiman City, Shiga.

2007

Dec.

Acquired shares of Business Jimki Corporation and changed the company name to ItokiHokkaido Co., Ltd. (now a consolidated subsidiary).

2008

Dec.

Kanto Plant is established in Midori-ku, Chiba City, and partially relocating the Kyoto Plant.

2011

Apr.

Included Dalton Corporation and its five subsidiaries under the umbrella as subsidiaries,
producing and selling research equipment and powder machinery (now a consolidated
subsidiary).

2012

Nov.

ITOKI Tokyo Innovation Centre "SYNQA" opened in Chuo-ku, Tokyo.

2015

Mar.

Included Shin Nihon System Technology Corporation into the group as a subsidiary to develop
various systems (now a consolidated subsidiary).

Jul.

Itoki Engineering Centre Co., Ltd., Itoki Osaka Engineering Centre Co., Ltd. and Itoki Technical
Service Co., Ltd. merged and changed their name to Itoki Engineering Service Corporation(now a consolidated subsidiary).

2016

Dec.

Tarkus Interiors Pte Ltd., an interior decoration company based in Singapore, became asubsidiary (now a consolidated subsidiary).

2017

Jul.

Novo Workstyle Asia Limited was established in Hong Kong (now a consolidated subsidiary).

2018

Nov.

The new Tokyo head office "ITOKI TOKYO XORK" (XORK) opened in Chuo-ku, Tokyo.

2020

Jun.

ITOKI CHINA HOLDING Co., Ltd. was established in China (now a consolidated subsidiary).

1962

Steel desk 1955

Establishment of threemajor systems for filing,voucher accounting andoffice layout 1960

Expansion into homefurniture 1962

Launch of the 'vertebra’(chair) 1981

Good Design Gold Awardfor the 'Spina' (chair)2007

New head office
Establishment of ITOKITOKYO XORK 2018

Itoki| 22/3/2023

Itoki Shoten was founded in Higashi-ku, Osaka.
Started import and sale of paper clips and staples.
Itoki Shoten Engineering Department was founded, and the production of office equipment
began.
Import and sale of English typewriters, thermos bottles started.

1908
Itoki Shoten founded 1890

Item

Source: Omega Investment from company materials
5As a recent development, attention should also be paid to the management. The current president, Koji Minato,
joined the company in September 2021 and became president in March 2022. The appointment of an outsider
with experience at a foreign company to the top position may have come as a surprise, which until now has
had a succession of presidents who have come straight from the company's own ranks. However, Mr Minato's
experience makes him ideally suited to the company's future Office 3.0 (see below for details). Mr Minato
joined NTT in 1994 and obtained an MBA from USC. He then worked as general manager of Sun Microsystems
and, following Oracle's acquisition of Sun Microsystems, vice-president of Oracle Japan before moving to Itoki
Corporation.
Companies with long history often give a conservative image, but the fact that Itoki Corporation was founded
130 years ago and is still around today can be attributed to the fact that they have adapted to, or anticipated,the changes of the times rightly. However, the speed of change since the diffusion of the internet has been far
faster than that of the past. It takes some time for an organisation to change, but under the leadership of Mr
Minato, who has extensive experience in high-tech companies in Silicon Valley, various new developments are
beginning to emerge. Employee mindsets are also changing. The share price performance over the past year,
which will be discussed in more detail below, is thought to be a reflection of such new changes at the company.

Group overview
As seen in the history, the company was founded in Osaka, but its current head office is in Chuo-ku, Tokyo(relocated in 2018). The group consists of the company and 35 subsidiaries (see table below). The long historyof the company and its many group companies, as well as the business activities of each company, show how
extensively it has developed its business. Since the 2000s, the company has also actively embarked on overseas
expansion, particularly in Asia, acquiring local companies and establishing subsidiaries and affiliates in various
regions.

Major consolidated subsidiaries
Company nameBusiness activities

Itoki All Steel Co., Ltd.

Manufacture of counters, large top desks, wall storage furniture, desk panels, etc.

Fuji Living Industry Co., Ltd.

Manufacture of meeting and amenity chairs.

Itoki Market Space Inc.

Sales of shop fixtures/store planning

Itoki Engineering Service
Corporation

Project management of office renewal and relocation, management of office furniturelayout delivery, and maintenance and inspection services for various other equipment.

Simasobi Corporation

Processing and sale of office furniture, office supplies and interior decorations, andcontracting of electrical work

Itoki Toko Manufacturing Co.,Ltd.

Manufacture of steel doors, safety deposit boxes, various types of shielding doors, fireresistant walls, nuclear radiation shielding doors, etc.

Itoki Marui Industry Co., Ltd.

Manufacture of steel office machinery and equipment

Sanko Facilities Inc.

Sales of office equipment, furniture, fixtures and incidental goods, construction work,
design management

FMSTAFF Ltd.

Consulting services related to facility management, etc.

Itoki Shared Value Co., Ltd.

Office space sharing business, office furniture rental and reuse business, etc.

Shin Nihon System Technology
Corporation

Provision of IT solution services

Dalton Corporation

Design, manufacture and sale of research and education equipment; design and sale ofpowder processing machinery; design and sale of high-tech plant systems.

Tarkus Interiors Pte Ltd

Singaporean interior decoration company, made a subsidiary in 2016.

Novo Workstyle Asia Limited

Regional business headquarters for Asia, in Hong Kong, established 2017.

ITOKI SYSTEMS(SINGAPORE) PTE., LTD.

Singapore subsidiary, sales of office furniture, proposals and logistics systems

ITOKI CHINA HOLDINGS Co., Ltd.

Holding company for Chinese operations. Under the umbrella of Novo Workstyle Co.
Offices in Beijing, Shanghai, Suzhou, Shenzhen, etc.

17 other companies

Source: Omega Investment from company materials

Itoki| 22/3/2023

6

Production structure

Source: Company materials

Production structure
The company's primary market is domestic (overseas markets account for less than 10% of the sales in
FY12/2022). Office furniture is bulky due to its storage nature, and it is not cost-effective to produce it overseas
and import it at the expense of transport costs. Therefore, although some parts are imported overseas, thecompany manufactures its products in domestic factories.
The current main plant is the Shiga Plant, which manufactures chairs, desks, cabinets, and other products for
the Workplace business. It employs about 300 people. In September 2022, the Assembling Process Centre (APCentre) was opened at the same site, which started full operation in January 2023. The AP Centre is working to
reduce the cost ratios by centrally managing the company's products' storage, assembly, and shipping. The
centre will also relocate the production line for the system streamer SAR-R, whose demand is increasing rapidly
in the logistics market, to meet growing demand. The Neyagawa plant, one of the company's main plants formany years, was closed in 2022, with its production consolidated at the Shiga plant. The company sold the idle
land of the plant for 6.5 billion yen and is working on improving asset efficiency. Part of the proceeds from thesale will be returned to shareholders as a special dividend for the performance in FY12/2022.
Business diagram
See the next page for a diagram of the business structure. The company and its group companies are involvedin manufacturing, sales, construction, interior decoration, installation, and maintenance services.
Overseas office furniture manufacturers often specialise only in manufacturing and sales and rarely provide
interior design, construction, or workplace design. In Japan, consulting companies and office design firms are
generally engaged between the office furniture provider and the client for large-scale projects to provide work
style design and workplace design. However, in recent years, office furniture manufacturers have also started
to offer a comprehensive service from upstream to construction and delivery of office furniture, starting withsmall and medium-sized projects, to obtain fees commensurate with the proposal's value.

Itoki| 22/3/2023

7

Business diagram
Workplace business
Goods, products, construction, interior decoration, installation, maintenance services[Sales]Simasobi Corporation
Sanko Facilities Inc.
NOVO WORKSTYLE CO., LTD.
ITOKI SYSTEMS(SINGAPORE)PTE,. LTD.

11 other companies. A total of 24 companies.

Equipment / Public business
Goods, products, construction[Sales]
Itoki Market Space Inc.
Dalton Corporation

ClientItoki Corporation[Manufacturing]
Itoki All Steel Co., Ltd.
Fuji Living Industry Co., Ltd.
Itoki Marui Industry Co., Ltd.

[Others]
Itoki Engineering Service Corporation
FMSTAFF Ltd.
Tarkus Interiors Pte LTD
Novo Workstyle Asia Limited
ITOKI CHINA HOLDINGS Co., Ltd.

[Manufacturing]
Itoki Toko Manufacturing Co., Ltd.
5 other companies. A total of 8 companies.

Information Technology / Sharing business
Software development, fixture rental
Itoki Shared Value Co., Ltd.
Shin Nihon System Technology Corporation
A total of 2 companies.

Itoki| 22/3/2023

8

Business overview
Workplace businessA core business accounting for 70% of the consolidated sales: focus on proposal-based marketing
to improve profitability.
The company's Workplace business generated sales of 85,945 million yen in FY12/2022 (+6.7% YoY), an
operating profit of 2,579 million yen (+34.7%) and an operating profit margin of 3.0%. Sales by region were
75,592 million yen (88.0% of the total) in Japan, 10,093 million yen (11.7%) in Asia and 259 million yen (0.3%) inothers to expand markets outside Japan in the future. In addition to the office-related business, the overseas
office equipment-related business and other businesses have been incorporated into the Workplace business,increasing sales in this segment.
Since the launch of steel desks in 1955, the company's office furniture business has successively developed andprovided products to meet office needs in line with Japan's economic growth and corporate businessexpansion. The company has made a significant contribution to developing the Japanese economy.
In the Workplace business, the aim is not just to sell office furniture but to provide higher added value by
proposing workplace design and obtaining commensurate value. In the past, it was challenging to differentiate
office furniture on a stand-alone basis, leading to price competition, which in turn led to significant discounts
together with non-office fixtures and fittings, which sometimes resulted in a decline in profitability. Although
the company's office furniture was originally well-designed and had won many G Marks (see figure above, nextpage), it could be said that the company needed to receive more compensation commensurate with the value
it provided. Recently, the company has been focusing on reviewing its sales structure and corporate culture(from a focus on sales to a focus on profit), generating revenue commensurate with the value it provides, andselling higher value-added products and services.

Workplace business revenue and profit trends
Financial year
Net sales (Corporate-wide)
YoY

2015/12106,516
3.4%

2016/12
101,684-4.5%

2017/12
108,684
6.9%

2018/12
118,700
9.2%

2019/12122,174
2.9%

2020/12116,210-4.9%2021/12
115,839-0.3%

2022/12
123,324
6.5%

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

83,032–
71.4%

80,561

85,945

-3.0%
69.5%

6.7%
69.7%

Former segment
Office-related businesses
YoY
Composition of sales

55,002
5.7%
51.6%

55,1750.3%
54.3%

55,3240.3%
50.9%

61,75911.6%
52.0%

64,6594.7%
52.9%

64,633
0.0%
55.6%

–
–
–

–
–
–

Operating profit (Corporate-wide)
YoY
Operating profit margin

4,306
74.2%
4.0%

2,800
-35.0%
2.8%

2,956
5.6%
2.7%

1,925
-34.9%
1.6%

903-53.1%
0.7%

1,798
99.1%
1.5%

2,536
41.0%
2.2%

4,582
80.7%
3.7%

Current segment
Workplace business
YoY
Segment profit margin

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

1,273
–
1.5%

1,914
50.4%
2.4%

2,579
34.7%
3.0%

Former segment
Office-related businesses
YoY
Segment profit margin

3,176
58.6%
5.8%

3,041
-4.3%
5.5%

2,655
-12.7%
4.8%

2,125-20.0%
3.4%

703-66.9%
1.1%

1,035
47.2%
1.6%

–
–
–

–
–
–

3,333
–

3,349
–

3,910
–

4,102
–

4,151
–

4,062
–

1,623
98,175–32,088
2,389
–
1,020

1,636
95,681–
32,238
2,534
–
1,257

2,028
102,221–36,386
2,316
–
1,071

2,320
108,703–46,353
2,329
–
1,270

2,261
108,778–
45,575
3,168
–
2,006

2,162
105,096–
47,930
3,431
–
2,222

3,973
2,535
–

–
–
–

103,898
57,711–

115,288
56,992
–

3,181
2,263
–

2,828
1,905
–

Current segment
Workplace business
YoY
Composition of sales

No. of employees (all company, persons)Workplace business
Office-related businesses
Asset (Corporate-wide)
Workplace business
Office-related businesses
Depreciation expenses (Corporate-wide)
Workplace business
Office-related businesses

Source: Omega Investment from company materials

Itoki| 22/3/2023

9

2007

2012

2017

2020

2021

2022

9 point

9 point

7 point

6 point

9 point

8 pontSpina

cacomii+ meeting
furniture series

vertebra03

crossaADDCELL

LINEA

Wan

Note: Examples are mainly Good Design Best 100 award-winning products. The company has received a total of 86 Good DesignAwards since 2005

Source: Omega Investment from company materials

The office furniture market could add value as new ways of working evolve.
Japan's office furniture market: market size of 600-700 billion yen, with stable growth.
Japan Office Institutional Furniture Association (JOIFA), of which 109 office furniture-related companies are
members, carries out various activities as an industry association and publishes statistics and surveys as
appropriate. It is assumed that JOIFA also understands the size of the office furniture market in Japan, but it
does not publish data to the public. The figure below is a rough idea of the size of the market, based on
segment information for the four major office furniture companies, including Itoki Corporation (however, thedefinition of segments differs from company to company, and there is no clear definition of the extent towhich public-related or consulting services are included, so the figure is for reference only). Looking at eachcompany's share in this four-company total, in 2022, the company's share was 20%, Kokuyo 32%, Okamura 36%
and Uchida Yoko 12%. Kokuyo and Okamura each hold almost 1/3 of the market share, with the company inthird place and Uchida Yoko in fourth place, a positioning that has long been established. In addition, themarket appears to be growing almost steadily (3-4%). When the sales of companies other than the four are
included, the market is estimated to be worth around 600-700 billion yen annually. Office furniture alone isworth approximately 400 billion yen, the rest including consultancy and construction. (Omega Investment
estimate based on the sales of JOIFA member companies, etc.).

Office furniture business sales of the four major office furniture companies(100 mn. Yen)

4,204
UCHIDA
YOKO

4,000

3,000

2,984

OKAMURA2,000
KOKUYO

1,000
Itoki

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Itoki

2021/2022 Workplace business segment: 'Creatingworking-environments' office furniture manufacturing andsales, office space design, etc. 2012 to 2010: Office-related
segment. No continuity between 2020 and 2021 due tosegment changes.

KOKUYOFY12/2022: Workstyle domain (furniture business): spacedesign and consultation, manufacture, purchase, sale, andinstallation of office furniture. FY 12/2019 – FY12/2021:
Spatial Value domain; FY12/2012 – FY12/2018: Furnituresales.

OKAMURA

Office Environmental business segment: manufacture andsale of office furniture, furniture for public facilities,
security products, etc.

UCHIDA
YOKO

Office-related business segment: development, manufactureand sale of office-related furniture, space design, design andconstruction, etc.

Source: Prepared by Omega Investment from the annual reports of the companies.

Itoki| 22/3/2023

10

Office supply and demand for office space in seven major cities(1,000 tsubo)(1,000 tsubo)
1,000

東京
Tokyo
札幌
Sapporo

大阪
Osaka
仙台
Sendai

Nagoya名古屋
福岡
Fukuoka

Yokohama
横浜

15,000Demand area
(7-City total, right-hand scale)800

12,000

600

9,000

400

6,000

200

3,000

0

0
2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

Source: Prepared by Omega Investment based on Miki Shoji's Office Market Data.

Office building market outlook: new supply is declining, but demand for office space is increasing
steadily.
Demand for office furniture tends to be influenced by the supply of new office buildings, economic trends,
and corporate performance. See the chart above on the next page for office supplies in the seven major cities
in Japan. Although there are considerable annual fluctuations due to the completion of large-scale
developments, a comparison of the average supply area between 2000-2010 and 2011-2022 shows that thelatter has fallen by approximately 5%. On the other hand, the demand area (i.e., rental area minus vacant area)
has been increasing relatively steadily. However, most recently, where an ample supply was made available inTokyo in 2020, the introduction of remote working due to the economic recession and the outbreak of COVID19 has led to a decline in demand (particularly in large cities with high rates of teleworking). According to Mori
Building's forecasts, the supply of large-scale office buildings in Tokyo's 23 wards in 2023 and 2025 is expected
to be positive for office furniture demand.

Recent developments in the office furniture market: new business opportunities due to theincreasing sophistication of office needs.
In recent years, office needs have undergone a significant transformation. The office's role has changed fromthe past, partly due to the introduction of remote working due to COVID-19, and this could mean new business
opportunities for office furniture companies. Background includes.
a) Reform of work style: the Japanese economy has been stagnant for a long time. As the era of high growth,when productivity could be increased mainly in the manufacturing sector, ended and the proportion of
tertiary industry increased, it became difficult to increase productivity, particularly among white-collar
workers. Against this backdrop, there are indications that productivity should be improved through reforms
in how people work. To achieve this, the internal organisation of Japanese companies needs to change, andthe composition of corporate offices is undergoing a significant transformation from the old fixed-seatbased office environment (see figure, next page).
b) Advances in IT and networking: the way work is carried out in a company has changed significantly overthe last 10-20 years due to IT development. The office must respond to the evolution of hardware,
software, networks, etc. The change has been within the scope of Itoki’s Office 2.0, which the company has
advocated. In the future, Office 3.0, or the DX orientation of the office, will determine competition forsuperiority between companies.
c) The office as a place for new value creation: as indicated in a), how people work will change significantly.
The pandemic disease has triggered the introduction of remote work, but at the same time, it is still
essential to have places where people meet face-to-face and communicate with each other. In the future, itwill be crucial to maximise workers' abilities by combining the central office as a place to share experienceswith remote work, which is a flexible way of working at a high level.

Itoki| 22/3/2023

11

The changing role required of offices
Office furniture and proposal capabilities that are compatible with the design ofspaces as more creative, productive, and innovative workplaces are required.
Reforming theway people
work

Progress in IT
andnetworking

Offices asplaces for newvalue creation
Fixed seats
Symbolic of the old Japanesecompany structure.

Acquisition ofhigh-valueadded humanresources

Source: Omega Investment from company materialsd) Attracting high value-added human resources: human resources are the biggest asset for future growth inall companies, but IT and other creative personnel need more supply. To retain such talented people, it isessential to have a great office environment and space.

The company's approach: multiplying Office 1.0, 2.0 and 3.0 to increase corporate value.
The company's answer to the changes in the office furniture and office space market described above is shownin the diagram below: in Office 2.0, the company has added value through office design and construction in
addition to manufacturing and selling office furniture. Office 3.0 will further promote office DX. Data iscollected by attaching sensors to office furniture and various parts of the office. By analysing this big data, itwill be possible to provide customers with higher value-added services. The company has set up an advanced
research institute to realise this. It is also oriented towards the data business, such as the realisation of runningfee revenues rather than just selling off fixtures and fittings. Office 3.0 has only just begun, and progress is still
to be made, but the company is a step ahead of its competitors in that it has set out a concrete policy for DX in
office space.

The company's proposed Office 3.0 concept
Customer

Office 3.0 Office DX
Office 2.0
Office design and construction
Office 1.0
Office furniture manufacturing and sales

Office 2.0
Office design and construction

Office 1.0
Office furniture manufacturing and sales

Office 1.0
Office furniture manufacturing and sales

Expand the domain to Office 2.0 and 3.0 based on Office 1.0

Source: Company materials
As a place to put Office 3.0 into practice, the company consolidated its Tokyo headquarters in Nihonbashi in2018 and opened ITOKI TOKYO XORK, which also serves as a showroom. For more information, see the next
page.

Itoki| 22/3/2023

12

Reception

Creating spaces for mental andphysical healthSpace for communication andindividual work

Work areas with a variety of space
options to suit the activity

Collaboration space where
people come and go

The company consolidated its metropolitan offices in Nihonbashi in the autumn of 2018. The
new head office, ITOKI TOKYO XORK, was opened. With W of work written as X, the office isnamed XORK to signify the evolution of the conventional way of working to the next level. XORK
will serve as a showroom for Itoki's new way of working, an office to realise it, and a place where
Itoki employees can personally embody their ideas.

The happiness of society as a
whole
Corporate HappinessTrying and changing
on one’s own

Ensuring stable growth in society.
To be achieved by maximisingproductivity and creativity as anorganisation, creating innovative
innovations and providing significant
added value to society.

X

Happiness of workers
Achieving one’s unique form ofhappiness.
To be achieved by maintaining goodmental and physical health, working
with high vitality and enthusiasm,
improving the quality of life in society
and enhancing one's lifestyle as awhole.

ABW
Activity Based Working
https://www.itoki.jp/xork/
Source: Company materials

Itoki| 22/3/2023

13

Peer competition：
As seen in the office furniture market, the four major players in this market - the company, Kokuyo (TSEP:
7984), Okamura (TSEP: 7994) and Uchida Yoko (TSEP: 8057) - hold 60% of the market. The table below
compares each company's most recent figures and other data. All but Okamura have a history of more than
100 years, while Okamura also has a long track record of more than 70 years. Regarding the companies'businesses, most sales for Itoki Corporation and Okamura come from office furniture, fixtures, and fittings forcommercial facilities. Kokuyo, on the other hand, as is well known, also generates a large proportion of its sales
from stationery-related products. For Uchida Yoko, public-related (e.g., education-related ICT) and informationrelated (e.g., software licensing) sales account for 80% of its sales.
The graph on the next page compares the profitability of each company's office furniture business; as notedon page 10, the definition of each company's segment is not necessarily the same, but it should give a roughindication. Kokuyo and Okamura, which have high market shares, deliver high profit margins. Kokuyo has been
increasing its profit margin by more than 10% in recent years by focusing on proposal-based marketing andprojects for which it can charge a design fee. While Uchida Yoko has achieved high profit margins in its nonoffice-related businesses, it has been spoilt by low profit margins in its office-related businesses.

Comparison of four major office furniture companies
Code
Company nameFinancial year

7972

7984

7994

8057

Itoki

KOKUYOOKAMURAUCHIDA YOKO

December, 2022

December, 2022

March, 2022 (LTM)

July, 2022 (LTM)

Establishment
Head office location
Number of consolidated
subsidiaries
Financial data
Net sales

1890

1905

1945

1910

Chuo-ku, Tokyo

Higashinari-ku, Osaka City

Nishi-ku, Yokohama City

Chuo-ku, Tokyo

33

26

33

17

123,324

300,929

261,275

229,606

Five-year growth rate

2.6%

-0.9%

2.7%

6.4%

4,582

19,321

3,995

7,419

Five-year growth rate

29.2%

1.9%

2.1%

20.3%

Operating profit margin
Office furniture-relatedsales
Five-year growth rate

3.7%

6.4%

5.3%

3.2%

80,594

132,702140,599

48,394

–

–

2.5%

1.3%

Operating profit

2,579

16,716

13,782

4,284

3.0%

12.4%

9.8%

1.0%

Operating profit

Operating profit margin

IT / Sharing business

Composition of sales
Equipment /Publicbusiness

Other

Lifestyle area
(interior retail)

Office-related
Workplacebusiness

Lifestyle area
(stationery)Workstylearea(Furniture)

Workstyle area(business supply
distribution)

Office furniture-related
sales
Number of employees at
end of term
Sales per Employee(thousand yen)

Next-generation officeconcept

その他

Logistics system

Business
environment

Officeenvironment

Information-…
Public sectorrelated

69.7%

44.1%

53.8%

21.8%

3,793

6,825

3,946

3,212

32,51344,092

66,212

71,483•Office 3.0•Smart office•Office DX•Activity Based Working(ABW)• Support for hybrid work
• Operation ofdecentralised
workplaces.
• Ways of working that
attract talent• RIGHT-SIZING• Base for one• Base for team

• Telework support• The revitalisation ofinternal communication• Strengthening of humanresources recruitment• ABW• Improved productivityof meetings

Source: Omega Investment from each company materials

Itoki| 22/3/2023

14

Four office furniture companies, operating profit margin trends in office furniture-related businesses.
（％）

15
KOKUYO

10
OKAMURA

5
Itoki
UCHIDA
YOKO

0
2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

-5
Source: Prepared by Omega Investment from the annual reports of the companies.

On the other hand, Itoki Corporation earned a profit margin of nearly 5% in 2012, but its profit margin has sincedeclined. When competing with the top two companies, the profit margin appears to have lowered due toprice discounts and other measures to secure sales rather than profit margins. The company has recognised the
problem and is working to improve profit margins by optimising sales prices in line with its value,
strengthening and expanding its consulting services, and monetising services such as delivery and design fees.
These have started to show results in recent years.

Equipment / Public business
Logistics-related facilities, research facility equipment and other unique products.
In FY12/2022, the company's Equipment / Public business generated sales of 35,667 million yen (+6.5% YoY), an
operating profit of 1,482 million yen (+52.2%) and delivered an operating profit margin of 4.2%. In terms ofsales by region, the domestic market is the primary source of sales, with Japan 35,454 million yen (99.4% of
total sales), Asia 117 million yen (0.3%) and others 96 million yen (0.3%). From 2021, the reporting segments
were revised in line with the business segments in the medium-term management plan. If the sales of former
Equipment-related business in 2020 are reclassified to the current segment for comparison, the sales in 2020
on a current segment basis will be 17,350 million less than the sales of the old segment. The profitability of thisbusiness is not necessarily high, with a segment profit margin of -0.1% to 2.5% until 2020. Since thesegmentation change, there has been an improving trend of 2.9%-4.2%.

Equipment product range

Source: Company materials

Itoki| 22/3/2023

15

Equipment / Public business revenue and profit trends
Financial year
Net sales (Corporate-wide)
YoY

2015/12106,516
3.4%

2016/12
101,684-4.5%

2017/12
108,684
6.9%

2018/12
118,700
9.2%

2019/12122,174
2.9%

2020/12116,210-4.9%2021/12
115,839-0.3%

2022/12
123,324
6.5%

Current segment
Equipment / Public business
YoY
Composition of sales

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

31,602–27.2%

33,48835,667

6.0%
28.9%

6.5%
28.9%

Former segment
Equipment-related business
YoY
Composition of sales

48,5403.2%
45.6%

43,427-10.5%
42.7%

50,531
16.4%
46.5%

54,1587.2%
45.6%

55,0241.6%
45.0%

48,952-11.0%
42.1%

–
–
–

–
–
–

Operating profit (Corporate-wide)
YoY
Operating profit margin

4,306
74.2%
4.0%

2,800
-35.0%
2.8%

2,956
5.6%
2.7%

1,925
-34.9%
1.6%

903-53.1%
0.7%

1,798
99.1%
1.5%

2,536
41.0%
2.2%

4,582
80.7%
3.7%

Current segment
Equipment / Public business
YoY
Segment profit margin

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

1,225
–
3.9%

974
-20.5%
2.9%

1,482
52.2%
4.2%

Former segment
Equipment-related business
YoY
Segment profit margin

1,222
207.0%
2.5%-58-104.7%-0.1%

569-1081.0%
1.1%

115-79.8%
0.2%

435
278.3%
0.8%

686
57.7%
1.4%

–
–
–

–
–
–

3,333
–

3,349
–

3,910
–

4,102
–

4,151
–

4,062
–

1,392
98,175–33,148
2,389
–
903

1,377
95,681–30,925
2,534
–
860

1,544
102,221–
37,415
2,316
–
849

1,421
108,703–37,748
2,329
–
801

1,452
108,778–
37,203
3,168
–
833

1,485
105,096–
33,636
3,431
–
853

3,973
1,106
–

–
–
–

103,898
24,691–

115,288
26,816
–

3,181
460
–

2,828
456
–

No. of employees (all company, persons)Equipment / Public business
Equipment-related business
Asset (Corporate-wide)
Equipment / Public business
Equipment-related business
Depreciation expenses (Corporate-wide)
Equipment / Public business
Equipment-related business

Source: Omega Investment from company materials

The Equipment / Public business dates to 1914, when the company began selling vent-type safes. Since then,the company has manufactured and sold a variety of warehouse-related fixtures and fittings and, since the1980s, has been an industry pioneer in developing and supplying a range of automated warehouse equipment.
Based on its experience producing safe doors, the company also produced and launched special large doors fornuclear power facilities. The company has continued developing numerous industry firsts, including developing
secure locking systems. In recent years, there has been an extreme need for automation equipment for
warehouse and distribution systems.
The main customers for logistics equipment are the automotive industry and equipment manufacturers. The
main customers for public facilities products are museums, art galleries and libraries. Sales of logistics
equipment depend on economic trends and corporate earnings. Still, they are expected to grow, as reducing
logistics costs is an ongoing and vital management issue in the manufacturing industry. On the other hand,sales of public facilities are affected by budget execution by public offices and local authorities.
In the same segment, research equipment is another product to note. Dalton Corporation, which the company
invested in in 2011 and became a wholly owned subsidiary in 2016, manufactures and sells these products.
Dalton Corporation was founded in 1939 as a manufacturer and distributor of scientific instruments andglassware for analysis (the company was called San-Ei Seisakusho when it was founded). It established ascientific research facilities division, which developed and sold products used in various research facilities; in
1996, it acquired a powder and granular equipment manufacturer and expanded into powder machinery; in2014, it introduced the Uni-X Lab Series of draft chambers and laboratory tables.

Itoki| 22/3/2023

16

Dalton Corporation research facility equipment

Draft chamberlaboratory furniture

Powder equipment

CustomerPharmaceutical companies,
university research institutions

CustomerPharmaceutical companies,
university research institutions

Customer
Manufacturers, research
centres

Semiconductor manufacturing
equipment
Customersemiconductor manufacturer

Source: Omega Investment from company materials
Customers of laboratory equipment include pharmaceutical companies, universities and research institutions,and the sales are affected by trends in R&D expenditure/capital investment by pharmaceutical companies andscientific research funding by universities. Pharmaceutical companies, the largest customers, actively invest in
R&D expenditure to develop new drugs. In FY2022/3, Takeda spent 526.1 billion yen (up 15.4% YoY), Daiichi
Sankyo 260.2 billion yen (up 14.5%) and Astellas 246 billion yen (up 9.6%). Of the 34 companies that havedisclosed their R&D expenditure, 20 have seen double-digit increases. On the other hand, while there areconcerns that research budgets at Japanese universities continue to be cut, major pharmaceutical customers'
robust research investment budgets are expected to continue. Hence, the sales of the company's researchfacility equipment should grow.

Information Technology / Sharing business
Provides system development, system verification projects and office sharing.
The Information Technology / Sharing business includes system-related and sharing businesses that do notbelong to Workplace business, Equipment / Public business. In FY12/2022, sales were 1,624 million yen (-7.6%
YoY), operating profit was 449 million yen (operating loss of 385 million yen in FY12/2022), and operating profit
margin was 23.1%. All sales are generated in the domestic market. The business accounts for 1.3% of total sales
and is expected to grow steadily.

Itoki| 22/3/2023

17

Financial results
Full year consolidated sales / operating profit trend
Operating profit andprofit margin

Net sales(100 mn. Yen)

(100 mn. Yen)

1400

70

1,300
1,187

1200

1,221

（％）

1,162

1,086

1,158
IT/ Sharing business

5.0

60

Equipment /Public business

1000

2.7

29

30

Workplace business

400

Operating profit
margin (RHS)
1.5
0.7

2.0

25

17

1.0

Operatingprofit

9

10

0

3.0

2.2

1.6

19

20

200

4.0

3.7

40

600

5.0

45

50

800

6.0

65

1,266

0.0

0

-1.0

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2023/12

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2023/12(Forecast)(Forecast)

Source: Omega Investment from company materials

FY12/2022 financial results
Summary: Record sales and profits achieved. A special dividend was paid, bringing the year-end
dividend to 37 yen a share.
Sales remained strong, mainly due to office relocation and renewal projects. In addition to the revision of
selling prices, cost-cutting efforts were successful, and operating profit reached a record high. Improving asset
efficiency also resulted in an extraordinary gain (6.9 billion yen) from selling the former Neyagawa plant siteand other assets. A special dividend of 20 yen was decided to be paid out of the profit from the sale. Thus, thecompany is committed to rewarding its shareholders.

FY12/2022 results: 6% YoY increase in sales, 79% rise in operating profit.
The company's full-year results for FY12/2022 show that Workplace and Equipment / Public businesses
performed well. Sales for each business increased by 6.7% and 6.5%, respectively, YoY. Segment profits
increased significantly by 34.7% and 52.2%, respectively. In addition, Information Technology / Sharing
business achieved an operating profit despite a 7.6% decline in sales. As a result, consolidated sales registered
123,324 million yen or +6.4% YoY, and operating profit was 4,582 million yen rising 79.0% YoY. As mentioned
above, extraordinary gains were recorded on the sale of non-business assets, resulting in profit attributable toowners of parent of 5,294 million, a significant increase of 353.9% over the previous year. Including the special
dividend of 20 yen per share, the company plans to pay a full-year dividend of 37 yen, with a payout ratio of
31.6%.

JPY, mn, %Net sales

YoY
%

Oper.
profitYoY%

Ord.
profitYoY%Profit
ATOP

YoY
%

EPS
(¥)

DPS
(¥)

2018/12

118,700

9.2

1,927

-34.8

2,367

-28.1

1,725

-28.2

37.84

13.00

2019/12122,174

2.9

903

-53.1

945

-60.1

-550

–

-12.0813.00

2020/12116,210

-4.9

1,798

99.1

1,881

99.0

-235

–

-5.18

13.00

2021/12

115,839

-0.3

2,536

41.0

2,437

29.5

1,166

–

25.82

15.00

2022/12

123,324

6.4

4,582

79.0

4,177

71.4

5,294

353.9

116.9937.00

2023/12 (CE)130,000

5.4

6,500

41.8

6,500

55.6

3,700

-30.1

81.70

25.00

Itoki| 22/3/2023

18

Factors contributing to changes in operating profit
Improved gross profit margin•Revision of catalogue prices andoptimisation of selling prices•Improvement in Itoki's non-consolidated
gross operating income (36.2% → 37.4%)
due to structural reform PJ

Decrease in logistics costs•Strengthening the
profitability of logistics
services through structuralreform PJ

Profit increase according to sales rise•Workplace business: +5.3 billion yen•Equipment / Public business: +2.1 billion yen

FY2021/12

Increase in selling expenses (strategic
spending)•Increase in personnel costs to strengthen
the organisation in line with increased
sales and hiring of mid-career personnel:+1.4 billion yen•Strengthening IT infrastructure to promote
DX: +0.6 billion yen•Relocation and refurbishment of
showrooms to strengthen sales
capabilities: +300 million yen

FY2022/12

Source: Omega Investment from company materials
The chart above deciphers the changes in operating profit. In addition to increased profits due to higher sales,
an improved gross margin due to progress on structural reform projects and lower logistics costs muted theincrease in strategic expenditure, resulting in a significant profit increase.

Segments trend
Workplace business: sales rose 6.7%, a significant increase in segment profit of +34.7%.
In the aftermath of the outbreak of pandemic disease and the response to the so-called New Normal, salesof large-scale office relocation and renewal projects in line with new ways of working were strong, resulting inthe segment’s sales of 85,945 million yen and profit of 2,579 million yen. The profit margin improved by 0.6
percentage points YoY. Regarding Itoki's non-consolidated sales, renewal projects accounted for 46.3% of total
sales in 2020, but in 2022 they accounted for more than half, at 53.8%. Upfront investments include
participation in the international office furniture exhibition ORGATEC TOKYO and the renewal of ITOKI TOKYOXORK, the head office and showroom. Despite the recent rise in raw material prices, the company increased
sales and profit thanks to higher sales, efforts to reduce logistics costs through structural reform projects, andincreased value of its products.

Equipment / Public business: +6.5% increase in sales and a substantial increase in segment profitof +52.2% YoY.
Sales and segment profit were 35,667 million yen and 1,482 million yen, respectively, achieving significant
increases. The segment profit margin improved by 1.2 percentage points YoY. Large-scale business negotiations
for research facilities (science parks) for which orders were received in the previous year were recorded as
sales in FY12/2022, contributing to the performance. Demand for logistics facilities was also strong andremained robust. Despite the impact of the sharp rise in raw material prices, the company achieved an increasein sales and profit, mainly because of higher sales and the improved value of its offerings.

Information Technology / Sharing business: achieved operating profit by divesting from
unprofitable businesses.
Sales were 1,624 million yen (-7.6%), and the segment profit was 449 million yen (an operating loss of 385
million yen in the previous year). In addition to system development, the system verification business, which
has been promoted in recent years, performed well. The office space-sharing business also performed well.
The company withdrew from the GlobalTreehouse business, which had been unwell partly due to COVID-19.
This had a positive effect, and the business returned to profitability.

Topics: structural reform project initiatives
The company has stated that one of the goals of its medium-term management plan "RISE ITOKI 2023 (FY20212023)", is to become a "highly profitable company" with a strong structure. As seen in the four-company
comparison on page 15, the company is below the profitability of the top two companies, which is a vital areafor improvement first. The company has identified three concrete measures for its structural reform project.

Itoki| 22/3/2023

19

ーInitiatives related to sales reform.
・Fair selling price in line with the value provided.
・Consulting services and the strengthening and expansion of proposal value-added capabilities.
・Monetisation of services that were not previously recoverable as sales, such as delivery and design costs.
These have helped to improve the operating margin of the Workplace business by 0.6 percentage points, as
shown above.
ーInitiatives related to production and supply.
・The AP Centre, a new assembly production base, was completed and put into operation at the Shiga Plant. Cost
reductions have become possible by purchasing parts and assembling them at the AP Centre into products, whereas
previously finished products were purchased.
ーInitiatives to improve asset efficiency.
・Sales of non-purpose-built fixed assets, etc. (As previously reported, selling the former Neyagawa plant site for 6.5 billion
yen helped significantly improve cash flow).
・In addition, further facility disposals and efficiency improvements are well underway.

FY12/2023 forecast: sales of 130 billion yen. The operating profit estimate of 6.5 billion yen is
above the mid-term target.
The company's forecasts for FY12/2023 are sales of 130 billion yen (+5.4% YoY), operating profit of 6.5 billion
yen (+41.8% YoY) and profit attributable to owners of parent of 3.7 billion yen (-30.1% YoY). While sales are
expected to fall slightly short of the mid-term target of 133 billion yen, operating profit is forecast to exceed
the target of 6 billion yen. Profit attributable to owners of parent will decline in the absence of an
extraordinary gain of approximately 6.8 billion yen recorded in FY12/2022 on the land sale, as alreadymentioned. Excluding the gain on the land sale, the bottom-line profit grows YoY. By segment, the Workplacebusiness is expected to see sales increase by 7.9% and operating profit by a substantial 75.6%. A significant
increase in the supply of new office space in the centre of Tokyo is expected in 2023, with steady growth in
Osaka, Fukuoka and elsewhere. Office relocation and renovation projects are also likely to remain strong.
Against this backdrop, the company plans to continue to focus its sales activities on value propositions, as it didin the previous year, to secure profit margins. In Equipment / Public business, sales and profits are expected to
decline YoY in the absence of large projects recorded in FY12/2022. However, logistics-related needs are strong,and sales to e-commerce, automotive (EV) and refrigerated warehouses are expected to be firm. Judging fromthe progress in business negotiations, the booking of large projects will likely be concentrated in the second
half of the year, so the financial results are expected to be biased towards the 2H. Overall, the company
expects to post slight declines in sales and profit.

Workplace business

Equipment / Public business(100 mn. Yen) Sales

1,200(100 mn. Yen)

6.0%

Operating profit
(RHS)

400

Sales

6.0%

Operating profit
(RHS)

355

356
4.9%

1,000

5.0%

927

3.9%

4.0%
3.0%

603.0%
2.4%

3.9%
Operatingprofit margin(100 mn. Yen)

600
Operatingprofit margin

203.0%
14

14

12

402.0%
100

19(100 mn. Yen)

200

45

1.5%

2.0%
9

10

201.0%

25

0 0.0%

0

4.0%

2.9%

25

200

4.2%

805

800

400

5.0%

316

300

859

805

334

FY2020/12 FY2021/12 FY2022/12 FY2023/12(Forecast)

1.0%

0 0.0%

0
FY2020/12 FY2021/12

FY2022/12 FY2023/12(Forecast)

Note: FY2020/12 figures are shown for reference.
Source: Omega Investment from company materials

Itoki| 22/3/2023

20

Growth strategy
Medium-term management plan "RISE ITOKI 2023"
In February 2021, the company formulated a medium-term management plan ending in 2023. The planaddresses various issues that have come to light amidst the uncertainty surrounding the pandemic diseases. It
sets out the direction of management based on the so-called 'New Normal'.
First, the company's goals were to lead the creation of a post-COVID working environment and to become ahighly profitable company with a robust constitution. The pandemic disease has led to the rapid introduction of
remote working, and it is said that changes that usually take three to four years have progressed in one to two
years. The company sees the diversification of workplaces triggered by COVID-19 as a business opportunity andwill provide new products, services and solutions for all 'working environments'.
The goal of becoming a 'highly profitable company' with a strong constitution shows a serious commitment toimproving profitability, which has been a longstanding proposition for the company. As mentioned above, it
was difficult to differentiate office furniture on a stand-alone basis in the past, and there was a tendency
towards price competition. The company has formulated a theme for initiatives to overcome this situation:even though it has many in-house designers and has developed office furniture and fixtures with high design
quality, it has yet to generate profitability commensurate with the value of its products. The structural reformproject addresses six themes, including building a new sales structure incorporating DX, reducing the cost ratio
by restructuring group factories, introducing the assembly method of residence, and improving the efficiencyof group-wide assets. The financial results for FY12/2022 show that the effects of these efforts are steadily
bearing fruit.
In addition, as a manufacturing company, the company faces the major challenge of reducing CO2 emissions
generated in the production process of its products. As discussed in the Sustainability section, implementing
ESG management is also one of the key policies in this medium-term plan.
The medium-term management plan rolls over the initial FY12/2023 targets of 133 billion in sales and 6 billion
yen in operating profit. In particular, the operating profit target was raised to 6.5 billion yen. Each measure is
being steadily implemented, and, as seen in the forecast for FY12/2023, these numerical targets are likely to belargely met.
It will be interesting to see how Itoki presents itself in the next medium-term management plan under the newpresident and whether the company will further create corporate value by enhancing its earnings structure.

Stock information, etc.
Stock price trends
The shares soared, driven by positive expectations of growth and profitability.
The company’s share price has risen 95% over the past year, while TOPIX fell 0.2% during the same period. Its
performance stands out compared with its peers. The share price is 2.7 times higher than the recent bottom of
250 yen on 13 March 2020. Various factors are attributable to the stellar performance of the shares, including
the fact that renewal projects have remained strong following the outbreak of COVID-19 and that thecompany’s marketing policy, which emphasises profitability on top of proposal-based sales, is beginning to
produce results. In addition, the company has recently been focusing on investor relations and has made moreshareholder-focused management decisions. The company’s share price has been undervalued compared to its
peers for a long time, and even at the current share price level, PBR remains at 0.62. The new president Minato,
who assumed office in March 2022, has a different background and track record from the office furniturebusiness joining from a foreign IT company. He is the right person to develop a strategy to create new added
value, as symbolised by Office 3.0, from the conventional sales of furniture and fixtures. Further share pricecorrection is reasonably expected if the new growth story progresses and profitability improves further under
the new president, who took office in March 2022.

Itoki| 22/3/2023

21

7972：5-year stock price move
(Yen)

Moving average (13 weeks)Moving average (26 weeks)Moving average (52 weeks)(mn. Shares)

Share price compared to TOPIX (last three years)
Itoki（7294）

TOPIX

7972: Historical PBR of Itoki and the three competitors (LTM, last five years)
UCHIDA YOKO
(8057)OKAMURA(7994)KOKUYO(7984)

average=0.44

0.62

Itoki
(7972)

Itoki| 22/3/2023

22

Valuations
The financial data of the company and its peers Kokuyo (TSEP: 7984), Okamura (TSEP: 7994) and Uchida Yoko
(TSEP: 8057) are compared in the charts and tables below.
The ROE trend shows that Kokuyo and Okamura are generating stable returns. By contrast, Itoki Corporation
recorded net losses in FY12/2019 and FY12/2020, and the company's ROE is inferior to that of its competitors
in other periods. In FY12/2022, it recorded an extraordinary gain, which led to a higher return. But the ROE netof this extraordinary gain was still below its competitors. A breakdown of ROE shows that this is due to thecompany's low profit margins vis-a-vis its peers and will need to continue improving its profit margins toachieve higher ROE. Regarding Uchida Yoko, the proportion of office-related business to total sales is low, so
earnings can fluctuate significantly depending on successful bids for large education-related projects in the
public sector. The outstanding performance of Uchida Yoko in 2020 (FY7/2021) was due to a 40% YoY increasein sales and a 70% increase in net profit on orders for large public-related projects.

ROE transition（％）

ROE analysis

16.00
UCHIDA YOKOROE

Net profit
margin on
sales

Asset
turnoverFinancialleverage

Itoki

11.17

4.29

1.13

2.31

KOKUYO

7.88

6.11

0.91

1.42

OKAMURA

11.47

5.94

1.15

1.65

UCHIDA
YOKO

10.10

2.03

1.15

2.55

14.00
12.00
10.00

OKAMURA

8.00
6.00
KOKUYO
4.00
2.00

Estimate
excluding
extraordinary
gains

Itoki

0.00
2016 2017 2018 2019 2020 2021 2022
-2.00

Source: Omega Investment based on financial data from companies.
The following chart plots PBR vs ROE. The company's improvement is significant, but there is still scope forfurther improvement. If investors expect the improvements to be realised, the share price will be revised
upwards.

PBR vs ROE
1.4

Listed company
average

1.2
UCHIDA YOKOPBR (X)

1
0.8

KOKUYO

Estimate
excluding
extraordinary
gains

OKAMURA

0.6
Itoki

2021

0.4

2022

0.2
0
0

5

ROE (%)

10

15

Source: Omega Investment based on financial data from various companies.

Itoki| 22/3/2023

23

Share price and financial data of four office furniture companies
Code
Company nameFinancial year
Share price (3/20)
Market cap. (milion yen)
PER (x)PBR (x)Dividend yield (%)
Share price increase since thebeginning of the year
Yearly highYearly low
10-year high10-year low
Financial indicators (%)
ROE
ROA
ROIC
Equity Ratio
Per Share Indicators
Number of shares outstanding at endof period (thousand shares)
EPS (yen, Plan)
BPS (yen, Act)DPS (yen, Plan)
Dividend payout ratio
Financial data
Net sales
Five-year growth rate
Gross profit
Gross profit margin
Operating profit
Five-year growth rate
Operating profit margin
Net profit attributable to owners of
the parent
Five-year growth rate
Net profit margin
Number of employees at end of term

7972

7984

7994

8057

Itoki

KOKUYOOKAMURAUCHIDA YOKO

December, 2022

December, 2022

March, 2022 (LTM)

July, 2022 (LTM)

685
35,280
8.38
0.62
3.65

1,817
233,925
13.45
0.88
3.19

1,328
133,625
8.32
0.88
3.31

4,780
49,805
9.79
1.02
3.14

16.7%

-2.2%

-6.7%

2.1%

812(2/16)
572(1/6)
978(25/11/15)
250(13/3/20)

1,948(3/9)
1,753(1/12)
2,244(9/4/18)
623(7/6/13)

1,446(1/18)
1,272(2/6)
1,771(15/5/18)
676(5/8/20)

5,230(3/8)
4,435(1/6)
8,530(16/12/19)
623(7/6/13)

11.17%
4.83%
2.04%
43.2%

7.88%
5.55%
5.85%
70.6%

11.47%
6.83%
4.22%
60.7%

10.10%
3.95%
8.04%
39.1%

45,664

128,742

100,621

10,41981.70
1,100.33
25.00
30.6%

135.052,059.21
58.00
42.9%

159.61
1,482.00
44.00
27.6%

488.074,460.15
150.0030.7%

123,324
2.6%
45,749
37.1%
4,582
9.2%
3.7%

300,929-0.9%
116,67138.8%
19,321
1.9%
6.4%

275,939
2.7%
86,71931.4
14,613
2.1%
5.3%

229,606
8.7%
42,674
18.6%
7,419
20.3%
2.0%

5,294

18,375

16,394

4,655

17.1%
4.3%
3,793

4.1%
6.1%
6,825

8.7%
5.9%
3,946

20.5%
2.0%
3,212

Sales per Employee (thousand yen)

32,51344,092

66,212

71,483

EBITDAEBITDA margin
Statements of Cash Flows
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow

7,821
6.3%

26,2298.7%

20,791
7.5%

9,273
4.0%

5,804
4,923
-1,426
10,727

9,577-3,320-8,991
6,257

5,328-2,264-8,601
3,064-5,414-2,198-8,632-7,612

Source: Omega Investment from each company materials

Itoki| 22/3/2023

24

Major shareholders
Ratio of the number of shares
Number of owned to the total number ofshares owned issued shares (%)
5,079
11.21
2,225
4.91
1,754
3.87
1,609
3.55
1,356
2.99
1,341
2.96
1,121
2.47
1,106
2.44
1,069
2.36
963
2.12
17,62338.88
45,664Name
The Master Trust Bank of Japan, Ltd.
Nippon Life Insurance Company
Itoki Crebio Business Association
K.K. Ashisuto
Shichiro Ito
Custody Bank of Japan
Mizuho Bank, Ltd.
Itoki Crebio Employee Stock Ownership Plan
Sumitomo Mitsui Banking Corporation
Fumiko Ito
Total
Number of shares issued and outstanding

Note: The company holds 381,659 treasury shares but is excluded from the above major shareholders. The percentage of shares
held to the total number of shares issued (%) excludes treasury shares.
Source: The company's convocation notices for shareholders’ meeting (27 February 2023).

The combined shareholding of Shichiro Ito and Fumiko Ito of the Ito family, the founding family, is 5.11%.
Shareholding by ownership is as follows.

Shareholding by ownership
FY2021/12

45.4%

13.8%

FY2020/12

44.2%

13.3%

0%

10%

20%

30%

40%

50%

Individuals & others
Other Japanese corporations

13.2%

26.6%

1.3%

12.5%
60%

1.0%

28.7%
70%

80%

90%

100%

Foreign institutions & individuals
Securities firms

Source: Omega Investment from company materials

Shareholder return policy
The company recognises the distribution of profits as one of its key management policies. Its essential policy is
to pay a continuous and stable dividend to shareholders once a year as a year-end dividend, considering thecompany's earnings situation, the enhancement of internal reserves, future business development and otherfactors in a comprehensive and long-term manner. In FY12/2022, the company will pay a dividend of 37 yen
per share, an uplift of 2 yen from the initial forecast of 15 yen, plus a special dividend of 20 yen. In the future,
the company intends to implement a dividend policy aiming for a payout ratio of at least 20%, considering
consolidated results and the record of stable dividends paid in the past.

Dividends
Year-end dividend

(Yen)

50

Special dividend

Dividend payout ratio (RHS)

58.1

34.4

31.6

60

18.2

40

37.0

0

30

20.0

-60

20
10
0

25.0
13.0

13.0

13.0

FY2018/12

FY2019/12

FY2020/12

17.0

-120
-180

15.0

15.0

FY2021/12

FY2022/12

FY2022/12

FY2023/12(Initial forecast)(Revision)(Plan)

Source: Omega Investment from company materials

Itoki| 22/3/2023

(%)
30.6

-240

25

Corporate governance and top management
The company has a board of auditors with one full-time auditor. Eight directors were elected at the Annual
General Meeting of Shareholders in March 2011, 3 of whom are outside directors and designated as
independent directors. Considering that five years ago, the board of directors consisted of six directors, two ofwhom were outside directors, it is fair to say that the structure has been strengthened. Of the current total of
11 directors and auditors, ten are male and one female. All nationalities are Japanese (see next page,references). The new corporate governance code requires diversity in terms of gender and internationality as aprerequisite for ensuring the effectiveness of the board of directors and board of auditors. More than 90% of
the company's sales are in Japan, and its overseas subsidiaries, etc., are mainly in Asia, so it is imagined thatthe number of overseas employees is limited as a percentage of the total workforce. However, the company's
medium-term management plan states that it intends to increase earnings through full-scale expansion of its
overseas operations in the future. Depending on the company's overseas operations progress, themanagement team will need to be even more diverse from a corporate governance perspective.
The company has also adopted an executive officer system to separate management oversight and businessexecution. Currently, there are 26 executive officers, including two who serve as directors. Of these, one is awoman.
As is well known, women's participation in society is much more advanced than in the past. Female employees
account for 31.0% of the company's workforce, and the proportion of women in management positions is 8.9%
(respectively, at end-December 2021). Although the proportion of women in management positions has risen
from 5.8% over the past five years, it is expected to be utilised at more senior management levels.

The company's corporate governance structure
General meeting of shareholders
Appointment/
Dismissal

Board of Directors
Managementmonitoring/
Supervision

Appointment/
Dismissal

Audit & Supervisory(8 directors (including 3 external directors))

Appointment/
Dismissal

Appointment/
Dismissal

Audit(Attendance/opinion)(3 auditors, including 2 external auditors)
Report/AdviceDiscussion/
ReportReport(Cooperation)

ReportAccounting
AuditorBusiness execution
Representative
director

Audit
Report/AdviceInternal audit
sectionBoard of managing
directors

Risk Management Committee(Full-time auditors inattendance)

Executive officers'
meeting
Executive officer

Compliance Committee
and others
Risk information

Each division

Audit
Financial audit

Source: Company materials
See the next page for the company's top management; a new management structure will be implemented
after the Annual General Meeting of Shareholders on 23 March 2023.

Itoki| 22/3/2023

26

Top management (New structure after 23 March 2023)
Chairman：Masamichi Yamada
Born in 1940
Apr. 1964 Joined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)
Jun. 1991 Director, The Mitsubishi Bank, Ltd.
Jun. 2000 Senior Managing Director, The Bank ofTokyo-Mitsubishi, Ltd.
Sep. 2002 Representative Director and Chairman,
Mitsubishi Securities Co., Ltd. (currently Mitsubishi
UFJ Morgan Stanley Securities Co., Ltd.)
Jun. 2004 Full-Time Corporate Auditor, TOKYUCORPORATION
Jun. 2005 Director of the Company
Jun. 2007 Chairman of the Company (current)

Director, Managing Executive Officer：Yoshiaki Moriya
Born in 1965
Apr. 1982 Joined The Dai-Ichi Kangyo Bank, Limited (currently Mizuho
Bank, Ltd.)
Jul. 1988 Seconded to The Export-Import Bank of Japan (currently
Japan Bank for International Cooperation)
Apr. 2007 General Manager, Personal Planning Department ofMizuho Bank, Ltd.
Jan. 2011 Joined ITOKI CORPORATION; Executive Officer and Deputy
General Manager, Administration Division
Jan. 2012 Executive Officer and General Manager, Administration
Division of the Company
Jan. 2015 Managing Executive Officer and General Manager,
Administration Division of the Company
Mar. 2021 Director, Managing Executive Officer and General
Manager, Administration Division of the Company (current)

Director：Junsei Shinada
Born in 1961
Apr. 1985 Joined the former ITOKI Co., Ltd. (“former ITOKI”)
Jul. 2006 General Manager, Minato Branch, Tokyo-Higashi Sales
Department of the Company
Jan. 2014 General Manager, Higashi-Nihon Branch Office of theCompany
Jan. 2016 Executive Officer and General Manager, Corporate Customer
Sales Management Department of the Company
Jan. 2018 Executive Officer and General Manager, Corporate Customer
Sales Management Department, and General Manager, Customer
Value Management Department of the Company
Jul. 2021 Executive Officer and General Manager, Engineering
Management Department of the Company
Jan. 2023 Managing Executive Officer and General Manager, Planning
Division of the Company (current)

Director (outside director): Shiro Nitanai
Born in 1958
Apr. 1984 Joined The Ministry of Posts andTelecommunications
Apr. 2005 General Manager, Businesses Development
Department, Corporate Planning Division, Japan Post
(currently Japan Post Holdings Co., Ltd.)
Oct. 2009 General Manager, Real Estate Planning
Department, Real Estate Division, Japan Post Holdings
Co., Ltd.
May 2019 Representative, Facility Design Lab (current)
Visiting Professor, University of Tsukuba (current)
Adjunct Instructor, Toyo University (current)
Mar. 2020 External Director of the Company (current)

Auditor (full-time auditor): Atsushi Fukuhara
Born in 1948
Apr. 1984 Joined the former Itoki Kosakusho Co., Ltd.
Mar. 2009 Director of the Central Research InstituteJan. 2012 Director of the Human Resources Management
Department, Corporate Officer Planning Division
Jan. 2016 Director of the Risk Management Control
Department of the Company's Executive Officer
Administration Division
Mar. 2016 Appointed full-time auditor of the Company(current)

President and Representative Director: Koji Minato
Born in 1970
Apr. 1994 Joined NIPPON TELEGRAPH AND TELEPHONECORPORATION (NTT)Jul. 2008 Joined Sun Microsystems Japan
Jun. 2010 Senior Manager for Customer Support, Oracle
Corporation Japan (Business integration with Sun
Microsystems)
Jun. 2015 Operating Officer, Chief of Staff, CEO Office, Oracle
Corporation Japan
Aug. 2018 Corporate Executive Officer, Executive Deputy
President & COO, Oracle Corporation Japan
Aug. 2019 Director, Member of the Board, Corporate
Executive Officer, Executive Deputy President & COO,
Oracle Corporation Japan
Sep. 2021 Joined ITOKI CORPORATION; Senior Advisor
Mar. 2022 President of the Company (current)

Director：Naoki Kaze
Born in 1962
Apr. 1986 Joined the former ITOKI Co., Ltd. (“former ITOKI”)
Jan. 2007 General Manager, Tokyo-Nishi Branch of the Company
Jan. 2010 General Manager, Tokyo-Nishi Branch Office of theCompany
Jan. 2013 Executive Officer and General Manager, Tokyo-Nishi Branch
Office of the Company
Jan. 2016 Executive Officer and General Manager, Tokyo Branch
Office of the Company
Jan. 2018 Executive Officer and General Manager, Knoll Business
Management Department of the Company and President, Knoll
Japan Inc.
Jan. 2021 Managing Executive Officer and General Manager, Sales
Division of the Company (current)

Director (outside director): Hiroshi Nagata
Born in 1941
Apr. 1970 Joined MITSUI & CO., France
Jun. 1996 Director, MITSUI & CO., LTD. (“MITSUI”)
Jun. 1999 Managing Director, MITSUI President, MITSUI & CO.
EUROPE PLC
Apr. 2002 Representative Director, Executive Vice President
and Chemicals Group President, MITSUI
Apr. 2005 Visiting Professor at Waseda University Graduate
School of Commerce (MBA Course)
Mar. 2008 External Director of the Company (current)
Oct. 2018 President and Representative Director, CLEA
Holdings Co., Ltd. (current)
Dec. 2021 Outside Director, CLEA Japan, Inc. (current)

Director (outside director): Mariko Bando
Born in 1946
Jul. 1969 Entered the Prime Minister’s Office
Jul. 1989 Director, Consumer Statistics Division, Statistics Bureau of theManagement and Coordination Agency
Apr. 1995 Vice-Governor, Saitama Prefecture
Jun. 1998 Consul General of Japan in Brisbane, Australia
Jan. 2001 Director General, Gender Equality Bureau, Cabinet Office
Oct. 2003 Member, The Board of Trustees, Showa Women’s University
Jul. 2016 Chancellor (Socho), Showa Women’s University (current)
Jun. 2017 Outside Director, MS&AD Insurance Group Holdings, Inc.
(current)
Dec. 2019 Outside Director, Mitsubishi Research Institute, Inc. (current)

Auditor (outside auditor)：Osamu Ishihara
Born in 1960
Apr. 1987 Registered as Attorney-at-law in Tokyo Bar
Association Joined Nishimura and Sanada
Oct. 1990 Joined TMI Associates
Apr. 1997 Partner, TMI Associates (current)
Mar. 2010 External Auditor, Odawara Engineering Co., Ltd.
(current)
Apri.2012 Executive Governor, Japan Federation of Bar
Associations Vice-President, Tokyo Bar Association
Apr. 2015 Vice-President, Kanto Federation of Bar
Associations

Auditor (Outside auditor)：Hisashi Shirahata
Born in 1962
Sep. 1985 Joined Aoyama Audit Corporation
Jul. 1988 Registered as Certified Public Accountant
Jul. 1999 Joined Aoyama Audit Corporation
Jul. 2000 Admitted as Partner (Shain) of ChuoAoyama Audit
Corporation
Jul. 2002 Representative Partner (Daihyo-Shain) of
ChuoAoyama Audit Corporation
Sep. 2006 Representative Partner (Daihyo-Shain) of PwC
Aarata (currently PricewaterhouseCoopers Aarata LLC)
Jul. 2022 Outside Director, Information Development Co., Ltd.
(current)

Note: The company and the corporation in the biographies of each
officer above refer to the relevant company or corporation.
"The Company" refers to Itoki Corporation.

Source: Company materials

Itoki| 22/3/2023

27

Skills matrix of the Board of Directors’ Members
Legal affairs
Production Human resources
Risk
Internationality Marketing
R&D
development
management Accounting management
Corporate

Masamichi
YamadaKoji
MinatoYoshiakiMoriyaNaoki
Kaze
JunseiShinadaHiroshiNagataShiro
NitanaiMarikoBandoAtsushi
Fukuhara
Osamu
Ishihara
HisashiShirahata

Finance

●

●

●
●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

DX

●

●

●
●

●

●

●
●

ESG

●
●

●

●
●

●

Executive officer structure
Position

Name

Position

Name

Director, Managing
Executive Officer

Yoshiaki Moriya

Executive Officer

Akifumi Kakeda

Director, Managing
Executive Officer

Naoki Kaze

Executive Officer

Akihiro TagashiraDirector, Managing
Executive Officer

Junsei Shinada

Executive Officer

Masahiko Fujisawa

Managing Executive Officer

Makoto Ichikawa

Executive Officer

Katsuya Matsuda

Managing Executive Officer

Takeshi Otsuki

Executive Officer

Masayoshi Kawamoto

Managing Executive Officer

Kazuyoshi Nagao

Executive Officer

Naoyuki Okada

Managing Executive Officer

Tadashi Sawada

Executive Officer

Masashi Kinaka

Managing Executive Officer

Yoshihito Yamamura

Executive Officer

Hideki NakasujiManaging Executive Officer

Nobuyuki Hirao

Executive Officer

Yasuhiro Miyamoto

Executive Officer

Toshiya Shimizu

Executive Officer

Ichiro Washio

Executive Officer

Toshihiko Oda

Executive Officer

Satoshi Suga

Executive Officer

Takashi Kokyuryo

Executive Officer

Keiichiro Hirano

Executive Officer

Takeshi Ueda

Executive Officer

Yoshiko Yagi

Source: Company materials

Itoki| 22/3/2023

28

Sustainability
As the company is a manufacturing company, CO2 emissions are inevitable in office furniture and logistics
equipment production. Therefore, the company is highly aware of the SDGs and ESGs and has prepared an
integrated report since 2021. In addition, the ESGDATA BOOK was published in 2022. It details the company's
evaluation of its materiality, KPI performance and other information.
Particularly noteworthy is that it has developed a medium-term environmental plan regarding theenvironment, which communicates concrete and quantitative progress for each year. For greenhouse gas
emissions, the plan sets out reduction targets not only for Scope 1 and 2 but also for Scope 3. Besides CO2
emissions, the plan also includes quantitative analyses of the introduction of renewable energy, carbon offsets,biodiversity, environmental accounting, etc.
About the SDGs, the following materialities have been defined. As noted before, there is scope for
improvement in terms of diversity, but as per corporate governance, risk management and compliancesystems are in place.

The company's approach to materiality

Source: Company materials

Itoki| 22/3/2023

29

Financial data (quarterly basis)
FY (¥mn)[Statements of income]Net sales
Year-on-year basis (%)
Cost of sales
Gross profit
SG&A expenses
Operating income
Operating profit ratio (%)
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary income
Extraordinary expenses
Income before income taxes
Total income taxes
Net income
Net income ratio (%)[Balance Sheets]
Current assets
Cash and deposits
Notes and accounts receivable trade
Notes and accounts receivable trade, and contract assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Investments and other assets
Total assets
Current liabilities
Short-term borrowings
Non-current liabilities
Long-term borrowings
Total liabilities
Total net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Share acquisition rights
Total liabilities and net assets[Statements of cash flows]
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow
Net increase in cash and cash equiv.
Cash and cash equiv. at beginning of
periodCash and cash equiv. at end of period

2020/12
1Q

2Q

3Q

4Q

2021/12
1Q

2Q

3Q

4Q

2022/12
1Q

2Q

3Q

4Q

37,707
11.2
23,71013,997
10,996
3,001
8.0
154
273
2,882
0
116
2,766
1,039
1,760
4.7

26,997-9.3
17,765
9,232
9,602
-370
-1.4
162
168
-376
6
42
-412
134
-557
-2.1

21,489-24.5
13,811
7,678
9,590-1,912-8.9
251
107-1,768125
55-1,697-195-1,491-6.9

30,017-0.1
19,036
10,981
9,901
1,079
3.6
237
172
1,143
980
1,503
620
654
53
0.2

32,121-14.8
20,101
12,02010,352
1,667
5.2
240
250
1,657
1,255
20
2,893
1,028
1,942
6.0

29,451
9.1
18,72910,722
9,453
1,269
4.3
161
257
1,173
78
456
795
490
348
1.2

22,396
4.2
14,443
7,953
9,203-1,249-5.6
171
101-1,179133
518-1,565-132-1,440-6.4

31,871
6.2
20,872
10,99910,150
849
2.7
122
185
786
88
1,474
-600
-796
316
1.0

35,34510.0
21,483
13,862
9,898
3,964
11.2
125
115
3,974
786
44
4,716
1,381
3,388
9.6

28,411-3.5
18,03010,381
9,973
407
1.4
164
130
442
139
64
516
246
288
1.0

26,20517.0
16,678
9,527
9,812
-285
-1.1
171
177
-291
118
38
-211
-21
-159
-0.6

33,363
11.2
21,384
11,97911,484
496
1.5
96
539
52
6,762
3,465
3,351
1,585
1,777
5.3

69,811
18,186

60,382
21,312

52,463
18,95657,183
18,24665,543
19,50362,17022,112

55,24918,21357,753
17,351

69,45819,19664,096
20,07359,873
17,13871,027
26,876

37,611

27,23020,29826,59932,061

26,596

21,38526,78335,20528,234

24,111

29,316

4,161

3,872

4,372

4,411

49,872
27,612
5,113
2,391
17,146
120,352
55,44915,61618,327
9,475
73,777
46,575
46,1235,294
9,201
31,030-46

49,93327,3505,623
2,207
16,959110,940
46,097
13,28918,2209,574
64,31846,621
46,197
5,294
9,642
30,461-6

120,352

110,940

50,41027,3295,853
2,189
17,227
103,453
40,198
14,23918,0799,453
58,27745,17544,7685,294
9,641
28,884-33
45
103,453

47,912
26,206
5,590
2,093
16,116
105,096
43,646
13,234
17,2598,508
60,90644,18943,812
5,294
9,628
28,950-182
45
105,096

46,92525,184
5,504
2,018
16,236112,469
49,245
13,45817,506
8,711
66,75145,71745,4195,294
9,628
30,306-18245
112,469

46,36924,7795,419
2,016
16,170108,540
45,266
12,061
17,088
8,193
62,354
46,18645,872
5,294
9,632
30,654-161
45
108,540

46,04624,887
4,885
1,407
16,273
101,295
40,307
12,40916,257
7,435
56,56544,73044,454
5,294
9,632
29,213-161
45
101,295

46,144
24,417
4,114
1,317
17,612
103,898
42,544
12,50016,277
7,591
58,82245,07644,931
5,294
9,638
29,530-161
45
103,898

46,647
25,105
4,128
1,214
17,413
116,105
51,83715,014
16,334
7,427
68,17247,93347,837
5,294
9,638
32,477-161
45
116,105

47,39526,042
4,168
1,222
17,184111,492
47,138
11,976
16,0207,174
63,15848,33348,254
5,294
9,638
32,769-134
45
111,492

48,126
26,932
4,145
1,200
17,048108,000
43,655
11,73816,178
7,266
59,83348,166
48,117
5,294
9,638
32,610-13445108,000

44,26024,9781,819
517
17,462
115,288
49,09911,23916,2787,530
65,37749,91049,871
5,294
9,638
34,387-134
45
115,288

5,404-1,442
293
3,962
4,240

-843
290
-2,560-553-3,037

4,577
503-1,4185,080
3,787-1,803-1,673-1,240-3,476-4,687

4,581-1,410
-661
3,171
2,711

1,223
6,333
-765
7,556
6,911

15,494

19,735

16,697

20,485

15,79718,50919,735

16,697

20,485

15,79718,50925,420Source: Omega Investment from company materials

Itoki| 22/3/2023

30

Financial data (full-year basis)
FY (¥mn)[Statements of income]Net sales
Year-on-year basis (%)
Cost of sales
Gross profit
Gross profit ratio (%)
SG&A expenses
Operating income
Operating profit ratio (%)
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary income
Extraordinary expenses
Income before income taxes
Total income taxes
Net income
Net income ratio (%)[Balance Sheets]
Current assets
Cash and deposits
Notes and accounts receivable trade
Notes and accounts receivable trade, and contract assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Investments and other assets
Total assets
Current liabilities
Short-term borrowings
Non-current liabilities
Long-term borrowings
Total liabilities
Total net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Share acquisition rights
Total liabilities and net assets[Statements of cash flows]
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow
Net increase in cash and cash equiv.
Cash and cash equiv. at beginning of
periodCash and cash equiv. at end of period

FY2012/12 FY2013/12 FY2014/12 FY2015/12 FY2016/12 FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12
105,508
14.6
70,02735,481
33.6
32,040
3,441
3.3
813
518
3,735
269
352
3,653
689
2,702
2.6

103,461-1.9
67,11836,34335.1
32,203
4,140
4.0
813
528
4,425
685
238
4,872
876
3,910
3.8

102,993-0.5
66,79736,19635.1
33,723
2,472
2.4
841
495
2,818
615
262
3,171
813
2,160
2.1

106,516
3.4
68,374
38,14235.8
33,836
4,306
4.0
898
605
4,599
171
524
4,246
-385
4,530
4.3

101,684-4.5
65,021
36,66336.1
33,862
2,800
2.8
771
483
3,087
97
267
2,918
1,068
1,907
1.9

108,684
6.9
69,966
38,71835.6
35,761
2,956
2.7
750
412
3,295
228
121
3,401
959
2,402
2.2

118,700
9.2
77,436
41,26434.8
39,339
1,925
1.6
889
448
2,365
919
204
3,081
1,339
1,722
1.5

122,174
2.9
80,49541,67934.1
40,776
903
0.7
677
634
945
27
35
938
1,517
-550
-0.5

116,210-4.9
74,322
41,88836.0
40,089
1,798
1.5
804
720
1,881
1,111
1,716
1,277
1,632
-235
-0.2

115,839-0.3
74,145
41,69436.0
39,158
2,536
2.2
694
793
2,437
1,554
2,468
1,523
590
1,166
1.0

123,324
6.4
77,57545,74937.1
41,167
4,582
3.7
556
961
4,177
7,805
3,611
8,372
3,191
5,294
4.3

49,294
17,441

52,925
19,55355,714
21,211

56,342
21,45652,41019,83958,147
19,977

62,143
16,22958,10917,03057,183
18,24657,753
17,351

71,027
26,87624,93526,24325,965

26,13823,241

26,86933,16028,244

26,59926,78339,961
27,928705
611,32789,25636,455
11,222
14,5604,122
51,01638,24035,9605,277
13,02018,520-1,17842,33528,1931,230
34
12,911
95,26135,35911,473
16,874
5,124
52,23443,026
41,0795,277
13,061
22,073-833

41,007
27,041
1,109
26
12,85796,721
36,677
11,087
16,854
5,089
53,532
43,18941,632
5,277
13,061
23,556-834

41,832
26,3951,313
240
14,12398,175
36,106
10,94014,756
5,171
50,86347,31145,677
5,277
13,222
29,223-3,00043,271
25,322
1,142
208
16,806
95,68135,39011,76014,8885,296
50,27845,402
44,9495,277
13,14030,504-4,70044,07324,426
3,651
2,793
15,995102,22139,683
12,564
15,211
5,328
54,89447,32646,863
5,277
12,40432,315-4,701

46,55926,362
4,437
3,005
15,760108,70345,133
11,721
16,076
5,113
61,21047,492
46,854
5,277
9,786
31,104049,95527,781
4,945
2,413
17,229108,778
47,55915,533
15,385
6,633
62,94445,83445,3705,294
9,201
29,862-46

89,256

95,261

96,721

98,175

95,681

102,221108,703108,778

47,912
26,206
5,590
2,093
16,116
105,096
43,646
13,234
17,2598,508
60,90644,18943,812
5,294
9,628
28,950-182
45
105,096

46,144
24,417
4,114
1,317
17,612
103,898
42,544
12,50016,277
7,591
58,82245,07644,931
5,294
9,638
29,530-161
45
103,898

44,26024,9781,819
517
17,462
115,288
49,09911,23916,2787,530
65,37749,91049,871
5,294
9,638
34,387-134
45
115,2888,259-14-1,652
8,245
6,601

3,162
-1,978
51
1,184
1,944

5,715
-1,742-2,179
3,973
1,814

4,522
-803
-3,807
3,719
184

5,072
-4,044-2,571
1,028-1,6193,565-2,971
-706
594
88

1,384
-3,094-2,463-1,710-4,031

3,586-3,221
0
365
952

4,561
-1,152-2,267
3,409
1,203

2,774
-1,170-2,658
1,604
-900

5,804
4,923
-1,426
10,727
9,622

9,555

16,15618,102

19,918

20,10318,483

18,571

14,54015,494

16,697

15,797

16,15618,102

19,918

20,10318,483

18,571

14,54015,494

16,697

15,79725,42029,316

Source: Omega Investment from company materials

Itoki| 22/3/2023

31

General disclaimer and copyrightThis report was created and displayed based on interviews with the company concerned and financial
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Omega Investment is not responsible for the consequences of using this report.
This report is informed by the target company through interviews with the target company, but the
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