KOKUYO CO., LTD.

Business Details

The segment's main businesses are space design & consultation, and the manufacturing, procurement, sale, and installation of office furniture. Domestically, it captures demand for new office relocations and renovations, strengthening work-style proposals tailored to clients' strategic challenges. Overseas, it leverages resources in China and Hong Kong together with Japan's space design capabilities, while also promoting business expansion in ASEAN and India. External sales of ¥56,723 million in Q1 FY2026 (ending March 2026) account for approximately 52.5% of the group's total, making this a core business.

Recent Overview

Robust domestic demand and the new consolidation in India drove a 6.4% year-on-year increase in revenue.

In Q1 FY2026 (ending March 2026), revenue was ¥57,257 million (+6.4% year on year) and operating profit was ¥12,721 million (+1.4% year on year). Domestically, demand for new office relocations and renovations remained strong, and sales growth and profitability improvement progressed through strengthened work-style proposals and support for business process efficiency. The newly consolidated Kokuyo Workplace India Limited contributed to increased revenue and profit. Meanwhile, market sluggishness in China continued due to the economic slowdown, and performance progress in ASEAN was delayed.

Key Products

Growth Drivers

• Continued strong demand for new office relocations and office renovations domestically
• Strengthening of work-style proposals tailored to clients' strategic challenges and support for business process efficiency
• Full-scale entry into the Indian market and contribution to increased revenue and profit through the newly consolidated Kokuyo Workplace India Limited
• Promotion of overseas business growth by combining resources in China and Hong Kong with Japan's space design capabilities
• Promotion of deal acquisition through strengthened proposals to mid-to-high-segment clients in ASEAN
• Strengthening the competitiveness of the domestic BtoB business through the full consolidation of six domestic sales companies as subsidiaries and their merger into KOKUYO Marketing

Risks

• Continued market sluggishness in China due to the economic slowdown
• Risk of delayed performance progress and intensifying competition in ASEAN
• Impact of rising raw material prices and Middle East tensions on logistics costs, etc. (impact amount currently being assessed)
• Risk of declining profitability in the China/Hong Kong business
• Foreign exchange risk (increasing impact accompanying overseas business expansion)
• Risk of integration costs and business disruption during the process of making domestic sales companies wholly owned subsidiaries and merging them

Business Details

Composed of three companies: Kaunet Co., Ltd., KOKUYO Marketing Co., Ltd., and KOKUYO Supply Logistics Co., Ltd. The main business is the procurement, logistics, and sale of office supplies, and the company aims to realize a personalized purchasing experience for customers using technology, based on the platform-type procurement management system "Benrinet." It targets the domestic BtoB market as its primary focus and concentrates on providing solutions to large corporate clients.

Recent Overview

Revenue increased but a large-scale sale caused a temporary decline in profitability, delaying performance progress

Revenue in Q1 FY2026 (ending March 2026) was ¥29,912 million (+12.7% year on year), securing an increase in sales. While the expansion of "Benrinet" progressed smoothly, the e-commerce site "Kaunet" ran large-scale sales in response to intensifying competition as the industry normalized from the prior-year logistics and system disruptions, resulting in a temporary decline in profitability. As a result, operating profit decreased to ¥1,306 million (-3.0% year on year), and performance progress has been delayed.

Key Products

Growth Drivers

• Continued expansion of the solution system for large clients (Benrinet)
• Increasing trend in customer numbers on the "Kaunet" e-commerce site
• Capturing demand through a stable supply system as social infrastructure (securing delivery capacity, expanding inventory)
• Absorbing increased logistics costs and depreciation expenses through the effect of increased revenue

Risks

• Decline in profitability due to intensifying competition and large-scale sales as competitors' logistics and system environments normalize
• Increase in logistics-related costs due to rapid increase in volume
• Continued increase in depreciation expenses due to system investment
• Risk of a reactionary decline from the prior-year inflow of substitute demand (a temporary factor)
• Intensifying competition within the office mail-order industry and changes in the logistics and system environment

Business Details

A segment engaged in the manufacturing, procurement, and sale of office supplies and stationery both domestically and overseas. Composed of KOKUYO Co., Ltd., KOKUYO Industrial Shiga Co., Ltd., KOKUYO MVP Co., Ltd., KOKUYO (Shanghai) Commercial Co., Ltd., KOKUYO Vietnam Co., Ltd., KOKUYO Camlin Limited, and others. Through the Campus brand, which places "how to learn" at the center of its value proposition, the segment aims to transform into a business that promotes positive learning challenges globally. It operates in Japan, China, India, ASEAN, and elsewhere, with both BtoB and BtoC channels.

Recent Overview

Growth in overseas business drove strong results, with revenue up 8.8% and operating profit up 18.1% year on year

In Q1 FY2026 (ending March 2026), revenue was ¥23,727 million (+8.8% year on year) and operating profit was ¥2,509 million (+18.1% year on year), representing an increase in both revenue and profit. In Japan, the Campus brand strategy progressed smoothly and the BtoC segment expanded, while the company also made active expenditures. In China, the impact of the economic slowdown continued, but the girls' stationery strategy was successful. In India, the company made progress as planned despite the impact of intensifying competition. Overseas revenue expanded to ¥10,523 million (versus ¥8,304 million in the same period of the prior year).

Key Products

Growth Drivers

• Expansion of the BtoC segment through the promotion of the Campus brand strategy in Japan
• Creation of new customer value by combining stationery with learning methods centered on "Manabi Recipe"
• Success of the girls' stationery strategy targeting female middle and high school students in China (new product launches, store development, e-commerce expansion, fan acquisition)
• Market penetration in India through new product expansion and the introduction of value-added products
• Expansion of overseas sales through the promotion of global expansion (Vietnam, Thailand, India, China, etc.)

Risks

• Risk of continued market sluggishness due to the economic slowdown in China
• Risk of profit pressure due to intensifying competition in India
• Risk of rising manufacturing costs due to soaring raw material prices
• Foreign exchange risk associated with global expansion
• Impact of Middle East tensions on raw material and logistics costs (specific impact amount currently being assessed)

Business Details

A business centered on ACTUS Co., Ltd. that procures and sells interior goods and household items. It operates both physical stores and e-commerce, while also promoting the expansion of the corporate business domain through strengthened partner collaboration. Leveraging customer service and proposal capabilities as its strength to deliver customer experiences, it aims for sustainable growth through transformation of its business portfolio in the "learning and living" domain. Within the KOKUYO Group, this is the only segment focused on interior retail for consumers.

Recent Overview

Sales promotion activities were successful, driving revenue growth, but operating profit declined 9.6% year on year

In Q1 FY2026 (ending March 2026) (January to March 2026), sales promotion activities such as year-end and New Year sales at stores and via e-commerce were successful, and revenue progressed as planned, up 2.7% year on year to ¥5,533 million. Meanwhile, operating profit decreased 9.6% year on year to ¥138 million, as the increase in costs outweighed the effect of higher revenue, leading to lower profitability. The company evaluates this as progress in line with the plan.

Key Products

Growth Drivers

• Sales growth through the use of sales promotion activities (sales, etc.) at stores and via e-commerce
• Expansion of sales opportunities through growth of the e-commerce channel
• Expansion of the business domain through strengthened partner collaboration in the corporate business
• Enhancement of customer experience value leveraging customer service and proposal capabilities
• Realization of sustainable growth through transformation of the business portfolio

Risks

• Operating margin remains at a low level of 2.5% (Q1 FY2026, ending March 2026), leaving the profit base fragile
• Despite increased revenue, operating profit declined 9.6% year on year, making cost control a challenge
• Risk of intensifying competition and fluctuating consumer demand in the interior retail market
• Risk of earnings volatility due to store fixed cost burden (some stores have recorded impairment losses in the past)
• Risk regarding the effectiveness and continuity of partner collaboration for corporate business expansion
• Impact of Middle East tensions, etc. on raw material and logistics costs (impact amount currently being assessed)

Business Details

The "Other" segment is a complementary and supportive category that includes Antenna Shops, etc. businesses not attributable to the four reporting segments of Furniture, Business Supply Distribution, Stationery, and Interior Retail. Sales volume is small, and the segment plays a supporting role in generating synergies across the group's businesses and facilitating internal transactions. It structurally records an operating loss, and its direct contribution to the group's overall performance is limited.

Recent Overview

Both revenue and operating loss worsened year on year, with the loss widening

In Q1 FY2026 (ending March 2026), revenue from external customers in the "Other" segment was ¥73 million (¥90 million in the same period of the prior year, -18.9% year on year), and total revenue including inter-segment transactions was ¥145 million (¥153 million in the same period of the prior year, -5.4% year on year), representing a decline. The operating loss widened to ¥108 million (compared with a loss of ¥74 million in the same period of the prior year). There were no significant changes to the scope of consolidation, and no major changes were observed in the business structure.

Key Products

Growth Drivers

• Expansion of internal transactions accompanying the creation of synergies across the group's businesses
• Strengthening of sales promotion activities at Antenna Shops, etc.

Risks

• Structural operating loss profile (Q1 FY2026, ending March 2026: -¥108 million, a widening loss year on year)
• Revenue from external customers is extremely small at ¥73 million, limiting room for profitability improvement
• Limited disclosure of the segment's business content and strategy, making performance evaluation difficult for investors
• Relatively large loss amount compared to revenue scale, posing a risk of dragging down the group's overall profitability