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※ 億円未満を切捨てています。
そのため内訳と合計及び差額が一致しない場合があります。

20© 2021 KOKUYO Co., Ltd.

Strategic Context

Workstyle reform and digitalization are transforming ways of working and learning.

Initial projections

Spatial Value
Domain• The supply of new office buildings inGreater Tokyo Area will peter out in2020.

• Amid the pandemic, working patternschanged and demand for officerenovation skyrocketed.

• Although companies will actively invest
in offices amid workstyle reform,
competition may intensify.

• With the renovation market filling gaps
in demand, market competition eased.

• Changes in purchase processes will
drive further growth in the market for
e-commerce/mail-order office supplies.

• The pandemic encouraged remote
working, leading to more online
shopping.

creating a harsher business landscape.

• New shopping behavior fueled market
competition.

Business Supplies
Domain• Distribution costs will continue to rise,

Global Stationery
DomainAfter spread of Covid-19• The Japanese market will mature amid
digitalization.
• Our targeted overseas markets, China andIndia, will continue to grow.

• The pandemic drove digitalization andaccelerated the maturation of the B2B
market.
• India saw a severe and protracted wave
of infections.

21© 2021 KOKUYO Co., Ltd.

Quantitative Targets and Results

Although the effects of the pandemic meant we missed our initial targets,
we managed to stabilize earnings by improving profitability and efficiency.

Initial/revised 2021 targets, latest forecasts(Billion yen)

2021
Revised target
Initial target(target in revised
medium-term plan,announced Q3/20)

Full-year
forecast

Change frominitial target

Change fromrevised target

Net sales> 346.0> 305.0

322.0

-24.0

+17.0

Gross profit> 127.8> 109.3

116.7

-11.1

+7.4

(%)

37.0%

> 35.8%36.2%-0.8pt+0.4ptOperating income> 21.5> 13.0

20.2

-1.3

+7.2

(%)

> 6.2%> 4.3%

6.3%+0.1pt+2.0pt* The full-year forecasts are those we announced when disclosing the results for the cumulative second quarter (first half).

22© 2021 KOKUYO Co., Ltd.

Evaluating the Performance of each Domain

Despite the impact of the business environment,each domain performed fairly consistently with initial expectations.
2021

Spatial Value
DomainBusiness Supplies
DomainGlobal Stationery
Domain(Billion yen)

Initial target

RevisedtargetFull-year
forecast

Net sales> 162.0> 139.0

157.0

Operatingincome> 19.0> 12.518.2(%)> 11.7%> 9.0%

11.6%

Net sales> 124.0> 117.0

117.9

Operatingincome

> 3.5

> 2.6

2.9

(%)

> 2.9%> 2.2%

2.5%

Net sales> 94.0> 75.074.6

Operatingincome

> 9.0

> 5.3

6.1

(%)

> 9.6%> 7.1%

8.2%

Evaluation• Riding the business tailwinds, the domainincreased its competitiveness andachieved business growth.

• The domain made headway in its
migration strategy, boosting efficiency
and enhancing business sustainability.

• In Japan: The domain improved its
profitability, but not enough to offset theCovid-driven changes in the businesslandscape.
• Overseas: The domain grew a newaudience for stationery (schoolgirls in
China). Progress surpassed expectations.

23© 2021 KOKUYO Co., Ltd.

※ 億円未満を切捨てています。
そのため内訳と合計及び差額が一致しない場合があります。

24© 2021 KOKUYO Co., Ltd.

Goal of the Third Medium-Term Plan

By expanding each field, we will achieve in 2024
¥360 billion in net sales with an operating margin of 7.6%.
This will put us on course for sustainable growth by 2030.
(Billion yen)
Growth rate: Average annual growthrate (2021-2024)

2022 - 2024: Field Expansion 2024

* Adjusted to account for impact of
new revenue recognition standard

500.0

+45.7

+20.0

360.0

Net sales

322.0

Gross profit
(%)

116.7
(36.3%)

114.6(39.0%)

143.7(39.9%)

Operatingincome(%)

20.2(6.3%)

20.1(6.8%)

27.5(7.6%)

294.2

変更前 2021 2021*

Non-adjusted

2025 - 2030

Adjusted*

Existing既存
businesses:
Tweak business

Existing
拡張businesses:
Expand fields

2024
2024

2030
2030
25
© 2021 KOKUYO Co., Ltd.

Requirements for Expanding the Fields

To expand the fields,
we need a fresh growth model, with the following elements:

26© 2021 KOKUYO Co., Ltd.

Dynamic Investment

Over the 2022–2024 period,
we will invest dynamically in businesses with bright growth prospects.

New needs:
Nurturebusinessideas

Capex budget, investment categories

Who isresponsible?

R&D share: Increased from 0.6% to 1.0%

The chief
Strategy Officer(¥1.7 bn to ¥3.6 bn / year)

Growth CapEx: ¥30 bn
Existing
businesses:
Expand fields

Existing
businesses:
Tweakbusiness

Workstyle Field: ¥20 bn• Expand office space lineup- Woodcraft items, digital, interior
design, green, art• Higher growth in overseas
businesses - Functions, brands

Lifestyle Field: ¥10 bn• Larger lineup of lifestyle products- Value-added products, daily
necessities• Higher growth in overseas
businesses - Functions, brands

The executive incharge of thebusiness• Stronger e-commerce

Regular/maintenance CapEx: ¥20 bn• IT systems: Customer relations management (CRM), data/analytics
infrastructure• PP&E: Production assets

The executive incharge of thebusiness
27© 2021 KOKUYO Co., Ltd.

Empowered TalentBusiness growth and employee growth require a diverse, empowered workplace.
Accordingly, we will increase employee mobility and cultivate business leaders.
2022 - 2024

2025 - 2027

2028 - 2030

Increase employee mobility tocreate opportunities for
professional growth

Increase diversity tofacilitate innovation

Be a powerhouse oftransformative leadership• Make core posts fluid within 3–5-years• Promote 30 employees to leadership
positionsInternal moonlighting
based on the 20% Challenge• Turn organization into talentmagnet• Build a 100-strong body oftransformative leaders

A program in practical entrepreneurialism
at the Marketing University28© 2021 KOKUYO Co., Ltd.

Active Innovation

Harnessing our culture of experimentation,
we will accelerate business incubation to expand each of our target fields.
2022 - 2024

2025 - 2027

2028 - 2030

Establish prototyping processes
and infrastructure

Accelerate innovation

Market innovation process• Launch 15 startups• Build 500-strong team of innovation
experts (20–25% of total workforce)• Establish the Kokuyo model ofinnovation

A space for open innovation

The Campus at Shinagawa office serves as an open lab

A “secret product-planning conference” for Shukudai Yaruki
Pen—using crowdfunding to call for public participation in the
product-planning process29© 2021 KOKUYO Co., Ltd.

Social Value and Business Value

Employees will experience social/environmental issues first-hand and develop
ideas for products and services that resonate. In this way, we will encourage
greater individual and corporate engagement in the creation of social value.

Yuimori
Wooden furniture that contributes tosustainable forestry

Kaunet initiative for a circular
economyKamiyama Marugoto technicalcollege(details to be confirmed)

Recycling paper cartons

Exploring new ways of learning andregenerating regional communities

Co.S.M.O concept

Genderless resume form

Convenience store of the future*

Furniture that reduces waste andincreases choice

Responding to the rise in diversity
and individuality

A place where locals and visitors meet

Provide fund for building social value (1% of ordinary income, c. ¥200 mn) andfund for ESG initiatives* Production, creative direction: Kito Design Holdings. Construction, interior design: Kokuyo, Gen Architects30© 2021 KOKUYO Co., Ltd.

© 2021 KOKUYO Co., Ltd.

Workstyle Field: Long-Term Trends (–2030)

The pandemic has hastened the shift to the dispersed workplace anddiverse working patterns, generating new needs.
Dispersed workplace

Diverse working patterns

Hybrid work

More employees with second jobs /multitrack careers

Providing for hybrid work

Managing a dispersed
workplace

Providing attractive working
options

Employers want to make their offices
more attractive to employees, withdecent amenities and digital tools.

The rise of office-as-a-service isreshaping facility management andpurchasing operations.

Employers need to provide personal
and team growth and employee
wellbeing.

Growth in remote work market(2020–2030)*1

Growth in CAGR in shared officespace (2011-2021)*2

Growth in HR-Tech Cloud market(2019–2025)*3+13.5% / year

+25.5% / year

+30.8% / year

Sources: *1. JEITA. *2. Xymax Corporation. *3. MIC Research Institute.

32© 2021 KOKUYO Co., Ltd.

Workstyle Field: Growth Strategy, 2024 Goal

To expand this field, we will capture growth opportunities in the shifting needsfor office spaces and office goods associated with the rise of hybrid work.

Dispersed workplace,diverse working patterns
Office management

Human capital+¥34.6 bn
Net sales¥230.9 bn

Operatingmargin9.0%+¥9.4 bn

¥275.0 bn

Hybrid workplace
Providing for hybrid work

Furniture businesses

+0.9p

9.9%

Business
supplydistribution

2021*
2021*

Furniturebusinesses
FN事業

Business
supply
B流通事業
distribution

2024
2024

*The 2021 forecast is adjusted to account for the impact of the new revenue standard.

33© 2021 KOKUYO Co., Ltd.

Furniture Businesses: 2019–2024 Trends/Outlook

While the outlook is ambiguous given the unstable supply of new office stock,
it is likely that office renovation demand will remain brisk amid changing
working patterns.

Outlook for office relocation demand

FYI: 6-year trend in large office stock(#0,000 m2)*

• Supply of new office stock in Tokyo has dipped
following Olympics.
• The supply will dip further in 2022 but should pickup in 2023, driving demand for office relocation.

Outlook for office renovation demand• Renovation demand is on the rise in anticipation of
the post-Covid landscape.

*Source: Mori Building Co., Ltd. survey• Demand should remain brisk until the end of 2023.

34© 2021 KOKUYO Co., Ltd.

Furniture Businesses: Strategy for 2021–2024 Period

By improving pitching and expanding products/services for hybrid work solutions,
we will capture the demand for office renovations, driving earnings forthe organization as a whole.
Existing businesses• Cultivate office renovation market to gain larger market share• Improve productivity in the pitch process, overhaul supply
chain management¥170.0 bn+¥34.6 bn
Net sales ¥135.3 bn

Expand fields• Expand office space lineup
Woodcraft items, digital, interior design, green, art

Operatingmargin• Expand overseas businesses

13.0%

+0.8p

13.8%

Functions, brands

Workpod: A private booth forvideoconferencing

X-Stadium:
Adjustable furniture

2021*
2021*

2024

*The 2021 forecast is adjusted to account for the impact of the new revenue standard.

35© 2021 KOKUYO Co., Ltd.

Business Supply Distribution: 2019–2024 Trends/Outlook

The rise of hybrid working will drive further growth in e-commerce and mail-ordermarkets and create more opportunities for pitching new purchasing solutions.

Projected market growth for
e-commerce/mail-order business supplies

Demand outlook• Remote work will hasten the growth of e-commerce,
driving continued growth in the e-commerce/mailorder market.
• Business supplies outside office settings are
increasingly purchased online; this trend will continue.

Changes in needs• The rise of remote work will create more
opportunities for pitching solutions for increasingly
complex purchasing management.
• We also expect new demand for products and

2021

2022

2023

2024

services related to changing working patterns.

*Source: Our own estimates.

36© 2021 KOKUYO Co., Ltd.

Business Supply Distribution: Strategy for 2021–2024 Period

With more effective e-commerce marketing, we will target new forms ofpurchasing management and other changes associated with hybrid work tocapitalize on growth opportunities in e-commerce.
Existing business: E-commerce/mail-order, Kaunet• Target large-scale clients- Pitch digital solutions for purchasing management- Coordinate better with sales and marketing teams
in furniture businesses• Target small- and medium-scale clients¥105.0 bn
Net sales¥95.5 bn

Operatingmargin3.3%+¥9.4 bn

- Improve customer relationship management- Cultivate non-office markets

Foldable furniture for remote workspaces:
Simple partition for offices:
Living room / workspace desk
Foldable booth for quiet concentration

2021*
2021*

+0.4p

3.6%

2024

* The 2021 forecast is adjusted to account for the impact of the new revenue standard.

37© 2021 KOKUYO Co., Ltd.

38
© 2021 KOKUYO Co., Ltd.

Lifestyle Field: Long-Term Trends (–2030)

Consumers want to live more authentic lives, and they are more sociallyconscious. As a result, learning styles and daily routines are growing morediverse, and new needs are emerging.
Seeking a more authentic life

Social consciousness

Lifestyles and values are diversifying.
Incomes are rising in emerging powers.

Greater concern for society and theenvironment

Rising desire for personalized
living spaces and furniture

Greater demand for promoting
self-driven learning

Desire for a society that lets you
decide where and how you live

Growth in Asian homeware market(2020–2025)*1

Growth in EduTech market(2019–2025)*2

Growth in Japan’s freelancer
population (2015–2021)*3+7.6% / year

+16.3% / year

+9.1% / year

Sources: *1. Euromonitor International. *2. HolonIQ estimates. *3. Lancers survey.

39© 2021 KOKUYO Co., Ltd.

Lifestyle Field: Growth Strategy, 2024 Goal

To expand this field, we will target the growing demand for value-added living
space and furniture solutions and enhance the customer interface to expand
into the lifestyle market.
Seeking a more authentic life,social consciousness
Self-driven learning

Co-living

Lifestyle tools+¥19.4 bn
Net sales¥93.2 bn

Operatingmargin7.4%+¥3.2 bn

¥116.0 bn

Desire for personalized living spaces
and furniture

Stationery businesses

+1.4p

8.8%

Interior
retailbusinesses

2021*
2021*

Stationery IInterior retailbusinesses
ST事業 businesses
IR事業

2024
2024

*The 2021 forecast is adjusted to account for the impact of the new revenue standard.

40© 2021 KOKUYO Co., Ltd.

Stationery Businesses: 2019–2024 Trends/Outlook

The market for value-added stationery will expand amid the growth of
emerging powers and the strong desire for self-expression on social-media.
Stationery market outlook
in targeted countries
Sales growth

Demand outlook

Japan -1.8%

The market will continue to shrink post
Covid

India +5.8%

The market will recover from the Covid
slump in mid-2022

China +5.5%

Demand for value-added stationery willremain brisk

Changes in shopping behavior

2021

2022

2023

2024

*Source: Our own estimates based on data from Euromonitor International.

• The global proliferation of social media
will expose latent demand for valueadded products.
41© 2021 KOKUYO Co., Ltd.

Stationery Businesses: Strategy for 2021–2024 Period

To capture the global demand for added-value products, we will improve digitalmarketing so that we connect better with customers, and expand product/services lineup.
Existing businesses• JapanDevelop more global products, expand sales

Shorten development cycle, strengthen small-lot
production• India• China¥95.0 bn

Improve productivity, cultivate markets for valueadded products
Expand lineup and area for products marketed toschoolgirls+¥19.4 bn
Net sales¥75.5 bn

Expand fields
Operatingmargin• Expand lineup of lifestyle products

8.0%

+1.2p

9.3%

value-added products, daily necessities• Higher growth in overseas
businesses
Functions, brands• Stronger e-commerceLive commerce streaming
session (China)

2021**
2021

2024
2024

* The 2021 forecast is adjusted to account for the impact of the new revenue standard.

42© 2021 KOKUYO Co., Ltd.

Interior Retail Businesses: 2019–2024 Trends/Outlook

Demand for value-added solutions in the living space will continue to grow amid
the Covid-driven diversification of lifestyles and the proliferation of e-commerce.

Domestic furniture, interior market
Growth in market size and e-commerce share

E-commerce
share
22.5% 23.3%

Demand outlook• In 2020, the market expanded to an all-time high of¥1.5 trillion* amid stay-at-home demand.
• The demand should remain brisk with newlifestyles (e.g. working from home) taking root.

26.0%¥1.5 trillion

Changes in shopping behavior• In 2020, online sales accounted for 26%* of all
furniture and interior sales. The e-commerce sharewill continue to rise.

Market size

• The proliferation of social media will expose latentdemand for value-added products.

2018 2019 2020 2021

…

2024

*Source: Teikoku Databank estimates, METI survey, and our own estimates.

43© 2021 KOKUYO Co., Ltd.

Interior Retail Businesses: Strategy for 2021–2024 Period

We will integrate online store with stores more effectively
to improve customer experience and capture brisk demand for
added-value solutions in the living space.
Existing businesses: Actus• Merge online with offline (OMO: “online-merge-offline”)*
Improve online store so that it attracts online
customers to offline stores and vice-versa.
Communicate better with customers to win loyal
customers for life.

¥21.0 bn
Net sales

Offline store+¥3.2 bn
¥17.7 bn

Online store

OMO

Operatingmargin* Online-merge-offline (OMO) refers to the merging of online (online store)
with offline (brick-and-mortar stores).

4.5%

2021*
2021*

+2.2p

6.7%

2024

* The 2021 forecast is adjusted to account for the impact of the new revenue standard.

44© 2021 KOKUYO Co., Ltd.

Capital Policy

We will allocate capital effectively, investing actively toward the expansionof each field. We will work toward the goal of 8% ROE in 2024.
Effective capital allocation,
greater efficiency

Shareholder returns• Strike optimal balance between• Aim for a stable dividend increase with areinvestment and shareholder returns
dividend payout ratio of 40%• Enhance efficiency of business assets• Fulfill responsibility to explain our corporate
growth story• Keep capital cost in mind when vetting
prospective investments and evaluating
Achievingexisting investments.

8%
ROE
Investment strategy for building sustainable enterprise value• Growth CapEx of ¥30 bn on top of regular/maintenance CapEx of ¥20 bn• Provide fund for building social value (1% of ordinary income, c. ¥200 mn) and fundfor ESG initiatives- Investment department and sustainability department to coordinate efforts acrossorganization45© 2021 KOKUYO Co., Ltd.

FYI: Reorganization of Reportable Segments

To expand our fields as a WORK & LIFE STYLE Company,
we have reorganized our three reportable segments into two.
We will also disclose information on four businesses.
2019 - 2021

2022 - 2024
Workstyle Field

Spatial Value Domain
Furniture businesses

Business supply
distribution• Domestic furniture businesses• Overseas furniture businesses• E-commerce/mail-order,
Kaunet• Wholesaling

Business Supplies Domain

Lifestyle Field

Global Stationery Domain

Stationery
businesses• Domestic stationery businesses• Overseas stationery businesses

Interior Retail
Businesses•ActusActus

46© 2021 KOKUYO Co., Ltd.

FYI: Targets/Forecasts for New Reportable Segments

For the fiscal year ending December 31, 2021, we included a set of forecasts
adjusted to account for the impact of the new standard for recognizing
revenue, which will take effect next year.
(Billion yen)

FY2021/12 forecast
Non-adjusted

Net sales

Workstyle Field

Operating income(%)
Net sales

Furniture businesses
Business supply
distribution

Lifestyle Field

Operating income(%)
Net sales
Operating income(%)
Net sales
Operating income(%)
Net sales

Stationery businesses

Operating income(%)
Net salesInterior retail businesses

Operating income(%)
Net sales

Other

Operating income(%)
Net sales

Reconciliation

Operating income(%)
Net sales

Total

Operating income

(%)

260.5
20.7
8.0%
138.8
17.5
12.7%
121.6
3.1
2.6%
94.2
6.9
7.4%
76.1
6.1
8.1%
18.0
0.7
4.4%
0.4
-0.0
-33.1
-7.3
322.0
20.2
6.3%

Adjusted
230.9
20.6
9.0%
135.3
17.5
13.0%
95.5
3.1
3.3%
93.2
6.8
7.4%
75.5
6.0
8.0%
17.7
0.7
4.5%
0.4
-0.0
-30.3
-7.3
294.2
20.1
6.8%

FY2024/12(target)
275.0
27.2
9.9%
170.0
23.4
13.8%
105.0
3.8
3.6%
116.0
10.2
8.8%
95.0
8.8
9.3%
21.0
1.4
6.7%
0.6
-0.0
-31.6
-9.8
360.0
27.5
7.6%

Change+44.0+6.5+0.9pt+34.6+5.8+0.8pt+9.4+0.6+0.4pt+22.7+3.3+1.4pt+19.4+2.7+1.2pt+3.2+0.6+2.2pt
+0.1
+0.0
-1.3
-2.5
+65.7
+7.3
+0.8pt% change+19.1%+31.6%+25.6%+33.2%+9.9%+22.3%+24.4%+48.5%+25.8%+44.9%+18.2%+76.4%+35.3%+22.3%+36.5%-

47© 2021 KOKUYO Co., Ltd.

* Business forecasts and other forward-looking statements herein are based on expectations and judgments deemed
reasonable in light of business information available as of the time of publication. They are not guarantees of future
performance. Various uncertainties may cause actual results to differ from what these statements suggest.

48© 2021 KOKUYO Co., Ltd.