Financial Results for the Fiscal Year Ended December 31, 2025 （956KB）

February 13, 2026

Results for the fiscal year ended December 31, 2025

Company name: KOKUYO Co., Ltd.

Stock listings: Tokyo Stock Exchange (Prime) Stock code: 7984 (URL https://www.kokuyo.com)

Representative: Hidekuni Kuroda (CEO and President)

For further information, please contact: Hitoshi Honda

(Executive Officer, Manager of Finance and Accounting Division)

Telephone: +81-6-6976-1221 (general)

Ordinary General Meeting of Shareholders: March 27, 2026 Commencement date for dividend payments: March 30, 2026 Date for submission of securities report: March 26, 2026 Supplemental material for results: Yes

Briefing about results: Yes (for institutional investors and securities analysts)

(Figures less than ¥1 million have been omitted)

1. Full-period Results (January 1, 2025, to December 31, 2025)

   1. Consolidated operating results

      	Net sales		Operating income		Ordinary income
      	Millions of yen	Year-on-year (%)	Millions of yen	Year-on-year (%)	Millions of yen	Year-on-year (%)
      Fiscal year ended December 31, 2025	359,876	6.2	26,247	16.5	27,222	11.5
      Fiscal year ended December 31, 2024	338,837	−	22,531	−	24,410	(6.1)

      (Note) Comprehensive income:

      Fiscal year ended December 31, 2025 ¥20,928 million [21.6%]

      Fiscal year ended December 31, 2024 ¥17,215 million [(26.8%)]

      	Profit attributable to owners of parent		Earnings per share	Diluted earnings per share	Return on equity	Ordinary income to total assets ratio	Operating income to net sales ratio
      	Millions of yen	Yen	Yen	Yen	%	%
      Fiscal year ended December 31, 2025	21,473	(1.4)	48.30	−	8.4	7.6	7.3
      Fiscal year ended December 31, 2024	21,787	14.3	48.04	−	8.5	6.8	6.6

      (Reference) Equity in net income of affiliates:

      Fiscal year ended December 31, 2025 ¥271 million Fiscal year ended December 31, 2024 ¥237 million

      (Notes) 1. In the period under review, we changed the method for presenting rental income and expenses (and other income and expense items related to real-estate) in some cases. Previously, such items were included in non-operating income and non-operating expenses. Now, they are included in net sales and cost of sales. We have retroactively applied the new method and restated the net sales and operating income items for the comparative period (the fiscal year ended December 31, 2024).

      Accordingly, we have omitted the percentage year-on-year change (%) in net sales and operating income for the said period.

2. On July 1, 2025, we conducted a 4-for-1 split of common stock. Earnings per share for the comparative period (the fiscal year ended December 31, 2024) is stated on the hypothetical basis that the stock split occurred at the start of said period.

1. Consolidated financial position

   	Total asset	Net assets	Equity ratio	Net assets per share
   	Millions of yen	Millions of yen	%	Yen
   December 31, 2025 December 31, 2024	355,048 362,959	255,457 264,062	70.9 71.8	584.97 574.85

   (Reference) Equity:

   December 31, 2025 ¥251,678 million

   December 31, 2024 ¥260,552 million

   (Reference) On July 1, 2025, we conducted a 4-for-1 split of common stock. Net assets per share for the comparative period (the fiscal year ended December 31, 2024) is stated on the hypothetical basis that the stock split occurred at the start of said period.

2. Consolidated cash flows

1. Dividends

   	Dividend per share
   	March 31	June 30	September 30	Year-end dividend	Full-year dividend
   	Yen	Yen	Yen	Yen	Yen
   Fiscal year ended December 31, 2024	−	38.00	−	39.00	77.00
   Fiscal year ended December 31, 2025	−	46.00	−	13.00	−
   Fiscal period ending December 31, 2026, (forecast)	−	12.25	−	12.25	24.50

   	Total annual dividend payments	Consolidated payout ratio	Ratio of dividends to net assets (consolidated)
   	Millions of yen	%	%
   Fiscal year ended December 31, 2024	8,734	40.1	3.4
   Fiscal year ended December 31, 2025	10,749	50.7	4.2
   Fiscal period ending December 31, 2026, (forecast)		51.2

   (Reference) On July 1, 2025, we conducted a 4-for-1 split of common stock. In the above table, the dividend amounts reflect the impact of this stock split. We have omitted the full-year dividend for the year ended December 31, 2025. If the stock split were not taken into account, the year-end dividend would have been 52.00 yen and the full-year dividend would have been 98.00 yen.

2. Consolidated Forecasts for the Fiscal Period Ending December 31, 2026, (January 1 to December 31, 2026)

1. [Have there been any] significant changes in subsidiaries during the period under review: Yes New: 1 company added to scope of consolidation:

   HNI Office India Limited (now known as Kokuyo Workplace India Limited) Removed: 1 company removed from scope of consolidation:

   KOKUYO International Asia Co., Ltd.

2. Changes or restatements in accounting principles, procedures and methods of presentation relating to preparation of the consolidated financial statements

   1. Changes due to revision of accounting standards: Yes

   2. Changes other than those stated above: None

   3. Changes in accounting estimates: None

   4. Restatements: None

      (Note) See 5. Consolidated Financial Statements (5) Notes on the Consolidated Statements: Changes in Presentation Method.

3. Total issued shares (of common stock)

   1. Total issued shares (= outstanding shares + treasury shares) as of the end of… the fiscal year ended December 31, 2025: 440,969,852

      the fiscal year ended December 31, 2024: 462,969,852

   2. Treasury shares as of the end of…

      the fiscal year ended December 31, 2025: 10,729,226 the fiscal year ended December 31, 2024: 9,715,332

   3. Average number of issued shares during…

the fiscal year ended December 31, 2025: 444,612,636 the fiscal year ended December 31, 2024: 453,555,492

(Note) On July 1, 2025, we conducted a 4-for-1 split of common stock. The above figures are stated on the hypothetical basis that the stock split occurred at the start of the previous fiscal year (ended December 31, 2024).

(Reference) Summary of non-consolidated results

1. Full-period Results (January 1, 2025, to December 31, 2025)

   1. Non-consolidated operating results

      	Net sales		Operating income		Ordinary income
      	Millions of yen	Year-on-year (%)	Millions of yen	Year-on-year (%)	Millions of yen	Year-on-year (%)
      Fiscal year ended December 31, 2025	181,208	4.1	14,321	9.5	20,625	2.3
      Fiscal year ended December 31, 2024	174,080	−	13,082	−	20,155	(0.8)

      	Net income		Earnings per share	Diluted earnings per share
      	Millions of yen	Year-on-year (%)	Yen	Yen
      Fiscal year ended December 31, 2025	18,605	(10.7)	41.80	−
      Fiscal year ended December 31, 2024	20,834	25.9	45.89	−

      (Notes) 1. In the period under review, we changed the method for presenting rental income and expenses (and other income and expense items related to real-estate) in some cases. Previously, such items were included in non-operating income and non-operating expenses. Now, they are included in net sales and cost of sales. We have retroactively applied the new method and restated the net sales and operating income items for the comparative period (the previous fiscal year ended December 31, 2024). Accordingly, we have omitted the percentage year-on-year change (%) in net sales and operating income for the said period.

2. On July 1, 2025, we conducted a 4-for-1 split of common stock. Earnings per share for the comparative period (the fiscal year ended December 31, 2024) is stated on the hypothetical basis that the stock split occurred at the start of said period.

1. Non-consolidated financial position

(Reference) Equity

December 31, 2025 ¥222,341 million

December 31, 2024 ¥234,849 million

(Note) On July 1, 2025, we conducted a 4-for-1 split of common stock. Net assets per share for the comparative period (the fiscal year ended December 31, 2024) is stated on the hypothetical basis that the stock split occurred at the start of said period.

• This financial summary is not subject to a review by a certified public accountant or independent auditor.

• Advice relating to appropriate use of financial forecasts and other relevant information Disclaimer on forward-looking statements

This document contains performance forecasts and other forward-looking statements. Such statements are based on information available at the time and, in part, on what are deemed to be reasonable assumptions. They are not guarantees of future performance. Actual results may differ markedly from what the forward-looking statements suggest due to a plethora of variables.

1. Activity Report

   All forward-looking statements in this document are based on assumptions deemed reasonable as of the end of the period under review.

   1. Analysis of Business Results

      1. Business Results in Period Under Review

         (Millions of yen)

         	Fiscal year ended December 31, 2024	Fiscal year ended December 31, 2025	Year-on-year change (%)
         Net sales	338,837	359,876	+6.2
         Operating income	22,531	26,247	+16.5
         Ordinary income	24,410	27,222	+11.5
         Profit attributable to owners of parent	21,787	21,473	(1.4)

         During the fiscal period under review (January 1 to December 31, 2025), the Japanese economy traced a moderate recovery path, with improved corporate earnings, employment situation, and personal income. However, the economic outlook was mired by economic uncertainties in China, US policy, and inflationary pressures.

         Against this backdrop, we made a start on Unite for Growth 2027, our fourth medium-term plan aligned with our long-term vision, CCC 2030. Unite for Growth 2027 sets out a strategy of combining the knowledge assets in each of our businesses with the strengths that our group has cultivated to date to create inter-business synergy, grow our existing businesses, and expand the reach of the business fields.

         The business climate had changed dramatically, but we maintained our competitiveness by flexibly adapting to the changing business conditions and shifting customer needs.

         Net sales reached ¥359.8 billion (up 6.2% year on year). This year-on-year growth reflects the success of the furniture business in capitalizing on the brisk demand for office relocations and office renovations. Gross profit increased to ¥144.4 billion (up 8.3% year on year), reflecting sales price revisions, which more than offset the high raw material prices. Gross profit ratio came to 40.1% (0.8 points up year on year). Selling, general and administrative expenses increased to ¥118.2 billion (up 6.6% year on year), reflecting strategic expenditures and organizational bolstering for expanding the business fields. Expense ratio (selling, general, and administrative expenses to net sales) came to 32.9% (up 0.1 points year on year).

         Reflecting these results, operating income reached ¥26.2 billion (up 16.5% year on year).

         Ordinary income reached ¥27.2 billion (up 11.5% year on year). Profit attributable to owners of parent was

         ¥21.4 billion, down 1.4% year on year; this result was a relative comedown from the bumper result in the previous year, when we recorded gain on sales of non-current assets.

         Segment

         As part of our long-term vision, CCC 2030, we have redefined our role in society as that of a "Work & Life Style Company," and committed to being an organization that creates life-affirming solutions, alongside tangible stationery and furniture, in the domain of work and the domain of learning and daily life. While we changed our two-category structure (workstyle field and lifestyle field) to enable greater flexing of our strengths across the group and to maximize the sharing of knowledge assets between businesses, the four-segment structure (furniture, business-supply distribution, stationery, interior retail) remains the same.

         The following table shows the segment-specific results for the period under review.

         (Millions of yen)

         		Fiscal year ended December 31, 2024	Fiscal year ended December 31, 2025	Year-on-year change (%)
         Furniture	Net sales	162,415	172,196	+6.0
         	Operating income	23,459	26,175	+11.6
         Business supply distribution	Net sales	98,935	108,369	+9.5
         	Operating income	4,471	5,463	+22.2
         Stationery	Net sales	83,575	83,572	(0.0)
         	Operating income	5,993	7,092	+18.3
         Interior retail	Net sales	21,238	23,678	+11.5
         	Operating income	521	718	+37.7
         Others	Net sales	476	573	+20.2
         	Operating income	(479)	(457)	−
         Reconciliation	Net sales	(27,803)	(28,514)	−
         	Operating income	(11,434)	(12,744)	−
         Total	Net sales	338,837	359,876	+6.2
         	Operating income	22,531	26,247	+16.5

         • Furniture

           For our furniture businesses, we target the burgeoning demand for office renovation driven by the diversification of working styles. We are also channeling our resources in Mainland China and Hong Kong and our Japanese excellence in spatial design to drive business expansion overseas. In this way, the business drives earnings growth for our organization as a whole.

           In Japan, we continue seeing brisk demand for new office builds (office relocations) and office renovations. To capitalizing on this demand, we are working to build up a track record of performance and improve profitability by tailoring workstyle solutions to customers' strategic issues more effectively and by streamlining workflows.

           In China, the market remained sluggish amid the economic slowdown.

           In ASEAN, we stepped up marketing efforts among middle-and high-market segments, winning a number of contracts.

           Under such circumstances, the segment's net sales increased to ¥172.1 billion (up 6.0% year on year). Operating income increased to ¥26.1 billion (up 11.6% year on year).

           In the fiscal year under review, we changed our presentation method. See 5. Consolidated Financial Statements (5) Notes on the Consolidated Statements: Changes in Presentation Method.

         • Business supply distribution

           In this business area, we use technological innovation to deliver personalized shopping experiences through Benri Net, a platform for purchase-management services.

           During the period under review, we made progress in implementing our solutions system for large-scale corporate clients. During the fourth quarter (October-December), a distribution and IT system within the industry was disrupted, prompting a spike in demand for an alternative system. As part of the social infrastructure, we acted to fulfill our responsibility for ensuring supply continuity. Specifically, we ensured that effective distribution flows were in place and increased our inventory so that we could accommodate the spike in demand.

           Under such circumstances, the segment's net sales increased to ¥108.3 billion (up 9.5% year on year). Operating income increased to ¥5.4 billion (up 22.2% year on year), with revenue growth more than offsetting the fact that our distribution costs increased with the surge in trade volume and the fact that we experienced higher amortization expenses in connection with system investments.

         • Stationery

           We are positioning the Campus as a brand whose value proposition centers on learning styles as part of an effort to transition the stationery business globally into a business that will inspire people to embrace challenges.

           In Japan, we revised sales prices, rebranded Campus, and made headway in expanding our B2C ecommerce business. The B2C channel benefitted from the aforementioned demand for an alternative system (prompted by a stoppage in a distribution and IT system within the industry). The effect was an increase in sales of profitable national-brand products, culminating in period-end results that surpassed expectations.

           In China, the market remained sluggish amid the economic malaise, but we achieved success with our strategy focusing on stationery demand among secondary school girls, launched more products, opened more retail outlets in conjunction with these product launches, expanded our e-commerce business, and attracted more fans.

           While performance in India was adversely affected by inflation and intensifying competition, we continued expanding the range of new products and launched value-added products.

           Under these circumstances, the segment's net sales amounted to ¥83.5 billion (largely the same as in the previous fiscal year). Operating income increased to ¥7 billion (up 18.3% year on year).

         • Interior retail

         In the interior retail businesses, we are building a network of offline and online stores, channeling the customer connections and marketing prowess developed in our existing interior retail businesses. We are also working closer with partners to expand our business reach in the B2B sector as part of a business portfolio shift that will contribute to long-term growth.

         During the period under review, we made steady progress in in-store and online sales. We also increased orders in the B2B sector. Under these circumstances, the segment's net sales came to ¥23.6 billion (up 11.5% year on year). Operating income increased to ¥0.7 billion (up 37.7% year on year).

      2. Outlook for Fiscal 2026

      (Millions of yen)

      	FY2025 (full-year) result	FY2026 (full-year) forecast	Year-on-year change (%)
      Net sales	359,876	390,000	+8.4
      Operating income	26,247	27,000	+2.9
      Ordinary income	27,222	26,800	(1.6)
      Profit attributable to owners of parent	21,473	20,300	(5.5)

      Segment

      (Millions of yen)

      		FY2025 (full-year) result	FY2026 (full-year) forecast	Year-on-year change (%)
      Furniture	Net sales	172,196	191,000	+10.9
      	Operating income	26,175	30,700	+17.3
      Business supply distribution	Net sales	108,369	118,300	+9.2
      	Operating income	5,463	4,400	(19.5)
      Stationery	Net sales	83,572	84,900	+1.6
      	Operating income	7,092	7,100	+0.1
      Interior retail	Net sales	23,678	24,100	+1.8
      	Operating income	718	1,050	+46.4
      Others	Net sales	573	1,000	+74.8
      	Operating income	(457)	(500)	−
      Reconciliation	Net sales	(28,514)	(29,300)	−
      	Operating income	(12,744)	(15,750)	−
      Total	Net sales	359,876	390,000	+8.4
      	Operating income	26,247	27,000	+2.9

   2. Qualitative and Other Information Related to Consolidated Financial Position

      1. Assets, liabilities, and net assets

         As of December 31, 2025, total assets amounted to ¥355.0 billion, down ¥7.9 billion from December 31, 2024, (the end of the previous fiscal year).

         Current assets decreased by ¥9.9 billion to ¥242.8 billion. The main factors were an increase of ¥6.7 billion in notes and accounts receivable and contract assets, an increase of ¥2.3 billion in merchandise and finished goods, and ¥1.9 billion in increase in real estate for sale in progress, partially offset by a decrease of ¥21.4 billion in cash and deposits.

         Non-current assets increased by ¥2.0 billion to ¥112.1 billion. The main factors were an increase of 2.3 billion in property, plant and equipment, an increase of ¥2.1 billion in intangible assets, and an increase of ¥1.4 billion in increase in retirement benefit asset, partially offset by a decrease of ¥4.3 billion in investment securities.

         As of December 31, 2025, liabilities amounted to ¥99.5 billion, up ¥0.6 billion from December 31, 2024. The main factor was an increase of ¥3.9 billion in notes and accounts payable - trade, partially offset by a decrease of ¥4.5 billion in income taxes payable.

         As of December 31, 2025, net assets totaled ¥255.4 billion, down ¥8.6 billion from December 31, 2024. The main factor was an increase associated with the recording of ¥21.6 billion in profit attributable to owners of parent, partially offset by a decrease of ¥20.0 billion associated with the purchase of treasury shares and a decrease of ¥9.5 billion associated with dividends of surplus.

      2. Cash Flows

      As of December 31,, 2025, consolidated cash and cash equivalents (hereafter referred to as cash) totaled

      ¥110.6 billion, a decrease of ¥21.4 billion from December 31, 2024.

      Cas h flows from operating activities

      Net cash provided by operating activities was ¥14.3 billion (down ¥2.0 billion year on year). Inflows included the recording of ¥31.2 billion in profit before income taxes, adjustment for non-financial gain/loss (e.g. ¥8.1 billion in depreciation), and ¥3.5 billion in increase in notes and accounts payable - trade. Outflows included

      ¥14.1 billion in income taxes paid, ¥5.4 billion in increase in notes and accounts receivable - trade, ¥2.2 billion in increase in inventories, ¥1.9 billion in increase in real estate for sale in progress, ¥3.4 billion in gain on sales of investment securities not included in cash flows from operating activities, and ¥1.0 billion in gain on sales of non-current assets.

      Cas h flows from inves ting activities

      Net cash used in investing activities was ¥4.6 billion (compared to ¥12.2 billion earned in the previous fiscal year). The main positive cash flows were ¥5.7 billion in proceeds from sales and redemption of investment securities and ¥2.0 billion in proceeds from sales of property, plant and equipment. The main negative cash flow were ¥11.2 billion in capital expenditure and ¥0.8 billion in purchase of shares in subsidiaries resulting in changes in scope of consolidation.

      Cas h flows from financing activities

      Net cash used in financing activities was ¥31.6 billion (up ¥16.0 billion year on year).

      Outflows included ¥20.0 billion in purchase of treasury shares, ¥9.5 billion in cash dividends paid, and ¥1.2 billion in repayments of lease obligations.

      Trends in cash flow indices for the Kokuyo Group are shown below.

      	Fiscal year ended December 31, 2021	Fiscal year ended December 31, 2022	Fiscal year ended December 31, 2023	Fiscal year ended December 31, 2024	Fiscal year ended December 31, 2025
      Equity ratio (%)	70.3	70.4	70.3	71.8	70.9
      Equity ratio (%) (market capitalization basis)	61.2	63.6	73.0	87.3	106.1
      Ratio of operating cash flow to interest-bearing debt (year)	0.7	1.6	0.4	0.6	0.6
      Interest coverage ratio (times)	134.9	41.4	174.5	71.9	90.6

      (Notes) Equity ratio: Total shareholders' equity / total assets

      Equity ratio (market capitalization basis): Market capitalization / total assets

      Ratio of operating cash flow to interest-bearing debt: Interest-bearing debt / operating cash flow Interest coverage ratio: Operating cash flow / interest payments

      • All indices are calculated using consolidated financial data.

      • Market capitalization is calculated by multiplying Kokuyo's closing share price at year-end by the number of shares issued and outstanding at term-end (excluding treasury stock).

      • Operating cash flow refers to cash flows from operating activities as shown in the consolidated cash flow statements. Interest-bearing debt is the sum of all debt upon which interest must be paid as shown in the consolidated balance sheets. Interest payments are interest paid as shown in the consolidated statements of cash flows.

   3. Basic Policy on the Distribution of Profits

   < Dividends for the Current and Following Fiscal Years >

   Committed to long-term value creation, we work to deliver sustained business growth and an increasing dividend for shareholders. The fourth medium-term plan sets out, as the shareholder returns policy, the principle of delivering an increasing dividend, meaning an annual dividend (excluding any special dividend) that is at least as high as the previous year's dividend, with a consolidated payout ratio of 50%.

   Under this policy, the dividend per share for the fiscal year ended December 2025 will be ¥24.50 (interim dividend of ¥11.50 and the fiscal year-end dividend of ¥13.00), which is ¥5.25 higher than that for the previous year. The dividend payout ratio will be 50.7%.

   For the fiscal year ending December 2026, we plan to offer a dividend per share of ¥24.50 (¥12.25 interim and ¥12.25 year-end), which is the same as that for the fiscal year ended December 2025. The payout ratio will be 51.2%.

   Consolidated dividend regulations apply at the Company.

   (Note) On July 1, 2025, we conducted a 4-for-1 split of common stock. The dividend figures stated above are based on the post-split stock.

2. Corporate Group

   The corporate group (the Company and companies related to the company) comprises the Company, along with 38 subsidiaries and 9 associate companies.

   Our business operations are broadly divided into furniture, business supply distribution, stationery, and interior retail. The furniture businesses manufacture and sell office and public furniture and construct office spaces, among other things, in Japan and abroad. The business supply distribution business engages in office supply wholesaling and runs e-commerce/mail-order businesses for office supplies. In the stationery businesses, we manufacture and sell office supplies in Japan and abroad. Our interior retail business is Actus, which manages a chain of interior retail stores.

3. Management Policies

   1. Basic Management Policies

      Our long-term vision for 2030, titled CCC 2030, commits us to building a sustainable, farsighted business model that we have dubbed the Forest-Like Management Model, and to becoming a "Work & Life Style Company." Accordingly, we are working to become an organization that creates life-affirming solutions in the field of work and in the field of learning and daily life.

      Central to our approach to business growth is a wow-factor creation cycle. In this cycle, we pitch visionary and highly customer-oriented ideas for the near future. We also use assets such as live offices, directly run outlets, and our online community to spark inspiration and emotional resonance among staff and customers, generating new and exciting experience value, as opposed to just tangible products.

      Since the start of the fiscal year ended December 2025, we have been progressing with our fourth medium-term plan, titled Unite for Growth 2027, which is aligned with our long-term, CCC 2030. Our initiatives under this plan include growing our existing businesses and expanding the reach of the business fields. We will combine the expertise we have developed with the knowledge assets in each of our businesses to create more inter-business synergy, grow our existing businesses, and expand the reach of our business fields. By doing this in a way that meets the needs of our customers, we will become a forest-like ecosystem of businesses that deliver sustained business growth, with ¥500 billion yen in annual net sales.

   2. Target Management Indicators

      The fourth medium-term plan sets out the following targets for the final year of the plan, ending December 2027: ¥430 billion in net sales, 20% of total sales made overseas, ¥43.0 billion in EBITDA, and at least 9% in ROE.

      (Billions of yen)

      		FY2024	FY2027
      		Result	Target	Change from FY2024
      KPIs	Net sales	338.8	430.0	+26.9%
      	% of net sales from overseas	13%	20%	+7pt
      	EBITDA (%)	31.4 (9.3%)	43.0 (10%)	+36.5% (+0.7pt)
      	ROE	8.5%	≥9%	+0.5pt
      Referential indicator	Operating income (%)	22.5 (6.6%)	30.0 (approx. 7%)	+33.1% (+0.4pt)

      (Note) EBITDA = Operating income + Depreciation expense + Goodwill amortization + Other depreciation

      In the period under review, we changed the method for presenting rental income and expenses (and other income and expense items related to real-estate) in some cases. Previously, such items were included in non-operating income and non-operating expenses. Now, they are included in net sales and cost of sales. We have retroactively applied the new method and restated the net sales, EBITDA, and operating income items for the comparative period (the fiscal year ended December 2024).

   3. Medium- and Long-Term Management Strategy, Business and Financial Priorities

      Aligned with the long-term vision, CCC 2030, Unite for Growth 2027 sets out a strategy of combining the expertise we have developed with the knowledge assets in each of our businesses to create more inter-business synergy, grow our existing businesses, and expand the reach of the business fields.

      • General strategies

   Unite for Growth 2027 is outlined below.

   1. Establishing a framework that prioritizes cash flow

      Establish a framework that prioritizes the cashflow (≈EBITDA) necessary to support profit growth and our overall value over the medium and long term. Guided by this framework and the Forest-Like Management Model, commit to gaining a top share in our target markets in Asia by 2030 and, in the long run, in our target markets around the world, and to maximizing our overall value.

   2. Strategy to expand the reach of our experience value

      Mount a strategy to expand the reach of our experience value by leveraging our forte in the wow-factor creation cycle. Use strategic and disciplined investment to drive organic growth (building up existing businesses) and inorganic growth (M&A) in Japan and overseas and build sustained EBITDA growth.

   3. Bolstering strategic assets

      Build up talent and knowledge to increase replicability of business success. Bolster strategic assets to reduce risks (capital costs) and facilitate sustained growth over the medium and long term

      • Business strategy

   Outlined below are the strategies for each business set out in Unite for Growth 2027.

   1. Furniture business

      Capitalize on the brisk office demand created by workstyle reform. Use our resources in Mainland China and Hong Kong and our interior design expertise in Japan to drive business growth overseas, creating momentum to lead organization-wide business growth.

   2. Business-supplies distribution

      Use technological innovation to deliver personalized shopping experiences through Benri Net (platform for purchase-management services).

   3. Stationery business

      Shift to a strategy that involves capitalizing on the global momentum for positive study/learning experiences. To this end, position Campus brand as a brand that delivers value in study/learning.

   4. Interior retail business

      Build a network of offline and online stores, channeling the customer connections and marketing prowess developed in our existing interior retail businesses. Work closer with partners to expand our business reach in the B2B sector as part of a business portfolio shift that will contribute to long-term growth.

      • Financial and capital strategies

   Summarized below are the financial and capital strategies set out in Unite for Growth 2027.

   1. Balance sheet management

      We will strike a balance between EBITDA growth and capital efficiency to achieve ROE targets (≥9 % in 2027,

      ≥10% in 2030). We will offload cross-held shares and other non-business assets and improve our capital structure.

   2. Capital allocations

      From among the cash flows, cash on hand, and proceeds from sale of non-business assets recorded during the 4th medium-term plan, ¥89 billion will be reinvested in our businesses (¥70 billion as growth CapEx and

      ¥19 billion as maintenance CapEx) while ¥64 billion will be returned to shareholders (through dividends with a consolidated payout ratio of 50% and through a ¥35 billion buyback program).

   3. Shareholder returns

   Our policy on shareholder returns is as follows.

   We will deliver a steadily increasing dividend, meaning an annual dividend that is no smaller than the previous year's one (in all instances, this excludes any commemorative dividend), with a consolidated payout ratio of around 50%, the benchmark set out in the fourth medium-term plan. We may, however, exempt the consolidated payout ratio from this rule if any one-off losses and gains are of such a nature as to warrant such an exemption.

   During the 3-year period of the 4th medium-term plan, we will buy back ¥35 billion in shares. To dispel dilution concerns, we will also reduce our treasury shares by selling them off to the extent that they represent less than 2% of total issued shares.

4. Basic Approach to Selection of Accounting Standards

   The Group's policy for the time being is to prepare its consolidated financial statements based on the Japanese Accounting Standard after taking into account the comparability of the consolidated financial statements between terms and with other companies.

   The Group plans to respond appropriately to the application of the International Financial Reporting Standards (IFRS) by considering the situation prevailing in Japan and abroad.

5. Consolidated Financial Statements

(1) Consolidated Balance Sheets

(Millions of yen)

As of December 31, 2024 As of December 31, 2025

(Millions of yen)

As of December 31, 2024 As of December 31, 2025

method

subsidiaries and associates

associates

(3) Consolidated Statement of Changes in Shareholders' Equity

Fiscal year ended December 31, 2024

(Millions of yen)

Fiscal year ended December 2025

(Millions of yen)

(Millions of yen)

Fiscal year ended December 31, 2024

Fiscal year ended December 31, 2025

(5) Notes on the Consolidated Statements

None

1. Scope of Consolidation

   1. Number of consolidated subsidiaries 28

      Names of major subsidiaries KOKUYO Logitem Co., Ltd. Actus Co., Ltd.

      KOKUYO (Malaysia) Sdn. Bhd.

      KOKUYO International (Malaysia) Sdn. Bhd. KOKUYO Design Consultants (Shanghai) Co., Ltd. KOKUYO Furniture (China) Co., Ltd.

      Kaunet Co., Ltd.

      KOKUYO Marketing Co., Ltd. KOKUYO Product Shiga Co., Ltd. KOKUYO MVP Co., Ltd.

      KOKUYO Commerce (Shanghai) Co., Ltd. KOKUYO VIETNAM Co., Ltd.

      KOKUYO VIETNAM Trading Co., Ltd. KOKUYO CAMLIN Ltd.

      KOKUYO Supply Logistics Co., Ltd. KOKUYO & Partners Co.,Ltd.

      KOKUYO Finance Co., Ltd. LmD International Co., Ltd

      KOKUYO (Shanghai) Management Co., Ltd. Kokuyo Hong Kong Limited

      Dongguan Lamex Furniture Co., Ltd. Origin Co., Ltd.

      Estic Corporation

      KOKUYO-IK (THAILAND) Co., Ltd.

      KOKUYO International Thailand Co., Ltd. Kokuyo Workplace India Limited

      In the period under review, the following company was added to the scope of consolidation after we acquired them by means of stock purchase: HNI Office India Limited (now known as Kokuyo Workplace India Limited)

      KOKUYO International Asia Co., Ltd., and two other companies were removed from the scope of consolidation because they were absorbed by Kokuyo Hong Kong Limited, a consolidated subsidiary, and other companies.

   2. Names of major non-consolidated subsidiaries

      The above non-consolidated subsidiaries are excluded from the scope of consolidation because, due to their small scale, the Company's consolidated financial statements are scarcely affected by their total assets, net sales, net profit attributable to the Company, or by their retained earnings attributable to the Company.

2. Application of Equity Method

   1. Number of affiliates accounted for using the equity method 8

      Names of equity-method affiliates KOKUYO Hokkaido Sales Co., Ltd. KOKUYO Tohoku Sales Co., Ltd.

      KOKUYO Kitakanto Sales Co., Ltd. KOKUYO Hokuriku-Niigata Sales Co., Ltd. KOKUYO Tokai Sales Co., Ltd.

      KOKUYO Sanyo-Shikoku Sales Co., Ltd. KISPA Inc.

      Nikkan Co., Ltd.

   2. Names of major non-consolidated subsidiaries or major affiliates not accounted for by equity method (Major non-consolidated subsidiaries) Iwami Kami Kogyo

      The above non-consolidated subsidiary is excluded from the scope of equity-method affiliation

      because the Company's consolidated financial statements are scarcely affected by the subsidiary's net profit attributable to the Company or its retained earnings attributable to the Company, and because it has minimal overall importance to the Company.

   3. When an equity-method affiliate has a different fiscal year-end from that of the Company, its financial statements are consolidated as of the equity-method affiliate's fiscal year-end, with necessary adjustments made if any major transactions occurred between then and the consolidated fiscal year-end.

3. Accounting Period Used by Consolidated Subsidiaries

   November 30 is the fiscal year-end of Actus Co., Ltd., Origin Co., Ltd., and Estic Corporation. March 31 is the fiscal year-end of Kokuyo Camlin Ltd. and Kokuyo Workplace India Limited.

   Actus Co., Ltd., Origin Co., Ltd., and Estic Corporation's financial statements are consolidated as of November 30, with necessary adjustments made if any major transactions occurred between then and the consolidated fiscal year-end. Kokuyo Camlin Ltd. and Kokuyo Workplace India Limited's financial statements are consolidated on the hypothetical basis that the consolidated fiscal-year end (December 31) is the fiscal-year end of these companies.

4. Accounting Policies

   1. Method and procedure for valuating major assets

      Securities

      Securities not held to maturity

      Stocks (or other holdings) with market value

      Carried at fair value, with any valuation difference reflected in the shareholders' equity section of the balance sheet and cost of sales calculated using the moving average formula.

      Stocks (or other holdings) with no market value

      Stated at cost as determined by the moving-average formula.

      Equity in limited partnerships

      Initial investment is stated at cost. Equity is reported as income (or loss, if negative) on the consolidated financial statements, reflecting the amount stated in the latest available financial statements as of the fiscal year-end for the limited partnership in question. If a limited partnership owns other securities and they differ in valuation, the portion of equity attributable to the valuation difference is stated as valuation difference on available-for-sale securities.

      Derivatives

      Carried at fair value

      Investment trusts

      Carried at fair value

      Inventories

      Stated at cost as determined (primarily) by the first-in first-out method (with incremental reductions in profitability reflected in balance sheet write-downs)

   2. Depreciation method for major assets

      Non-leased property, plant, and equipment

      The following methods are used for such assets of the Company and consolidated subsidiaries:

      The straight-line method is used for…

      • Buildings (but not fixtures) acquired on or after April 1, 2007

      • Buildings and fixtures acquired on or after April 1, 2016

        The old straight-line method is used for…

      • Buildings (but not fixtures) acquired between April 1, 1998, and March 31, 2007

        The old declining-average method is used for…

      • Buildings acquired before March 31, 1998

      • Non-building, non-leased property, plant, and equipment acquired before March 31, 2007

        The declining-average method used for…

      • Non-leased property, plant, and equipment other than the above.

      For property, plant, and equipment acquired before March 31, 2007, depreciation is averaged over the five-year period beginning in the year after the depreciation ceiling is reached.

      For consolidated subsidiaries outside Japan, the straight-line method used in most cases. Buildings and other structures usually have a useful life of 7 to 50 years.

      Machinery, equipment, and vehicles usually have a useful life of 4 to 13 years.

      Non-leased intangible assets

      Such assets are depreciated on a straight-line basis.

      Sales software is depreciated over the expected useful life (three years). Software for internal use is depreciated on a straight-line basis over the period in which the software remains useful for internal use (which is usually five years).

      Patents are depreciated over a five-year period. Client assets are depreciated over an 11- to 19-year period. Trademarks are depreciated over a 20-year period (trademarks of overseas subsidiaries are not depreciated if their useful life is uncertain).

      Leased assets

      Leased assets held under finance-leasing agreements that do not involve a transfer of ownership: These assets are depreciated on a straight-line basis on the assumption that the useful life is equal to the lease period and that the residual value is zero.

   3. Criteria for major allowances and provisions

      Allowance for doubtful accounts

      The following applies to the Company and its consolidated subsidiaries: For outstanding accounts receivable in general, the allowance reflects the percentage of such accounts that will become uncollectible in light of past trends. When an outstanding account is particularly likely to become uncollectible, an allowance is recognized for that account, reflecting the account's recoverability.

      Provision for bonuses

      The following applies to the Company and its consolidated subsidiaries in Japan: A provision is recognized in the liabilities section of the consolidated balance sheets to cover the amount of bonuses expected to be paid to employees.

      Provision for loss on business of subsidiaries and associates

      The following applies to the Company: A provision is made to reflect any liability the Company may incur from the business of a subsidiary or associate beyond the Company's initial investment in the business or any monetary claims related to it.

   4. Accounting Policies for Retirement Benefits

      1. Attributing retirement benefits

         A benefit attribution model is used to determine the retirement benefit obligations attributable to employees as of the end of the consolidated fiscal year under review.

      2. Expensing actuarial differences

         Actuarial differences are expensed evenly, and on a straight-line basis, across a future period of time no longer than the average remaining years of service of an employee as of the fiscal year of occurrence (this time is usually 12 years).

      3. Simplified accounting for small companies

         For some consolidated subsidiaries, a simplified form of accounting is applied to retirement benefit obligations and retirement benefit expenses. This method involves including in retirement benefit obligations end-of-year payouts of retirement obligations in cases of voluntary resignations.

   5. Criteria for recognizing major income and expenses

      Outlined below are the performance obligations provided, together with the time when these obligations are fulfilled (the points in time when revenue is recognized), in the main businesses in which the Company and its consolidated subsidiaries obtain revenue from contracts with customers.

      1. Sale of goods and finished products

         The sale of goods and finished products subjected to the alternative dispensation provided for in Article 98 of the ASBJ Accounting Standard for Revenue Recognition. Under this dispensation, revenue is recognized at the time of shipment in cases where there is a normal period of time between shipment and the transfer of the promised product, or transfer of control over that product, to the customer. The amount of consideration is received within a month from the time the performance obligation was fulfilled. The receipt of consideration contains no significant financing components.

      2. Construction contracts

         Revenue is recognized using the percentage-of-completion method. This method is used because performance obligations in construction contracts can take a long time to be fulfilled, as such contracts involve the sale of goods and the delivery of services such as fixture installation and interior furnishing. Under this method, percentage of performance obligation fulfilled is expressed as the percentage of the total cost estimate that has been actually incurred as of the end of the reporting year in question. Short-term contracts are subjected to the alternative dispensation provided for in Article 95 of the ASBJ Accounting Standard for Revenue Recognition. Under this dispensation, revenue is recognized when the customer had inspected the finished work, instead of being recognized incrementally over a period of time. Consideration is received incrementally. The receipt of consideration contains no significant financing components.

   6. Significant hedge accounting methods

      1. Hedge accounting method

         Generally, gains and losses are deferred.

      2. Hedging instruments, hedged items

         In the consolidated year under review, forward exchange contracts were used to hedge import-related accounts payable and forecast transactions denominated in foreign currencies.

      3. Policy on hedging

         Hedging instruments are used to hedge against the risk of adverse fluctuations in the currency market. All hedging is done in accordance with internal rules on derivates, which specify who is permitted to engage in hedging and the maximum transaction volume that may be hedged.

      4. Method of assessing hedge effectiveness

         Hedges are assessed semiannually by comparing the cumulative changes in the hedging instrument's cash flows (or changes in its fair value) with the equivalent changes in the hedged item.

         Forward exchange contracts are not assessed for effectiveness because, being generally based on a future purchase amount, they are highly likely to be implemented.

   7. Method for amortizing goodwill, period of amortization

      Goodwill is usually amortized on a straight-line basis over a period that is no more than 20 years and that reflects the estimated payback period for the investment in question. However, one-time impairment is recognized if the investment is unimportant.

   8. Cash and cash equivalents included in consolidated statements of cash flows The following items are recorded in consolidated statements of cash flows:

      • Cash on hand

      • On-demand deposits

      • Short-term investments (redeemed within three months of transaction date) that are liquid and unlikely to fluctuate in value

   9. Other important elements considered when preparing consolidated financial statements

      1. Accounting treatment for non-deductible consumption tax

         Non-deductible consumption tax on assets is reported as an expense in the consolidated financial statements for the consolidated fiscal year under review.

      2. Application of Japanese system of corporate-group tax relief This system is applied.

Application of Accounting Standard for Current Income Taxes

As of the start of the consolidated period under review, Kokuyo now applies ASBJ Statement No. 27 (October 28, 2022), titled Accounting Standard for Current Income Taxes.

In adopting the new accounting categories for current income taxes (taxes on other comprehensive income), we follow the transitional dispensation provided for in a proviso for Article 20-3 in ASBJ Statement No. 27 and the transitional dispensation provided for in a proviso for Article 65-2-2 in ASBJ Guidance No. 28 (October 28, 2022), titled Guidance on Accounting Standard for Tax Effect Accounting. This change in accounting policy has no impact on the consolidated financial statements.

As of the start of the consolidated period under review, Kokuyo now follows ASBJ Guidance No. 27 in applying new treatments to the consolidated financial statements in the case of tax-purpose deferrals of gains or losses on the sale of shares in subsidiaries between consolidated companies. We have retroactively applied the changes in accounting policy to previous periods. Thus, the changes apply to the consolidated statements for the previous fiscal year. This change in accounting policy has no impact on the consolidated financial statements for the previous fiscal year.

Previously, we included key items of rent income in "real estate rent" under non-operating income and key items of rent expenses in "rent expenses on real estate" under non-operating expenses. Since the start of the year ended December 2025, rent income is in some cases now included in net sales and rent expenses is now included in some cases in cost of sales.

In February 2021, we unveiled our long-term vision, CCC 2030, redefined our role as that of a Work & Life Style Company, and committed to expanding the reach of our fields beyond tangible products such as stationery and furniture. In fiscal 2025, we embarked on our fourth medium-term plan, Unite for Growth 2027. Under this plan, we are leveraging our strengths in furniture business to expand the reach of our fields and generate more synergies between our existing businesses. The value proposition of our furniture business has centered on office fixtures and fittings. Recently, however, we started considering ways of utilizing some of our real-estate assets, and we transferred some rental properties to the furniture business at the start of the year ended December 2025, necessitating the above changes.

This change in presentation has been retroactively applied as follows to the consolidated financial statements for the previous consolidated fiscal year.

The ¥609 million in real estate rent previously included in non-operating income is now included in net sales instead. The ¥107 million in rent expenses on real estate, previously included in non-operating expenses, is now included in cost of sales instead. With these restatements, operating income in the comparative period is now ¥502 million higher than it was before the restatements, but this change has no impact on ordinary income or profit before income taxes.

Note 1.(cross-referenced with *1 in the consolidated balance sheets)

Shown below are the portions of "notes and accounts receivable and contract assets" that pertain to contracts with customers.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Notes receivable ¥8,663 million ¥8,825 million

Accounts receivable ¥64,016 million ¥70,597 million

Contract assets ¥2,702 million ¥2,693 million

Note 2. (cross-referenced with *2 in the consolidated balance sheets) Accumulated depreciation in tangible fixed assets:

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

¥116,940 million ¥119,267 million

Note 3. (cross-referenced with *3 in the consolidated balance sheets)

Shown below is the portion of "investment securities" that pertains to shares in non-consolidated subsidiaries and affiliates.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Investment securities: Stocks ¥5,304 million ¥5,214 million

Note 4. (cross-referenced with *4 in the consolidated balance sheets)

Shown below is the portion of "current liabilities: other" that pertains to contract liabilities.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Contract liabilities ¥3,859 million ¥4,053 million

Note 5. (cross-referenced with *5 in the consolidated balance sheets) Pledged assets and secured liabilities

Shown below are the pledged assets and secured liabilities

Pledged assets

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Property, plant and equipment, Other, net

− ¥71 million

Software − ¥5 million

Total − ¥2,341 million

Liabilities pertaining to pledged assets None

Note 6. Guarantee obligations

Shown below are the Company's guarantee obligations for bank loans taken out by entities other than consolidated subsidiaries.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Kokuyo Riddhi Paper Products Private Ltd.

PT. KOKUYO FURNITURE INDONESIA

¥260 million ¥184 million

− ¥84 million

Total ¥260 million ¥269 million

(Note) Guarantee obligations denominated in a foreign currency are translated to yen on the basis of the rate that applied on the settlement date.

Note 7. Shown below is the balance of unexercised committed credit (the Company uses committed credit lines to meet its working capital needs).

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Total commitment amount ¥13,000 million ¥13,000 million

Amount exercised − −

Closing balance ¥13,000 million ¥13,000 million

Note 8. (cross-referenced with *8 in the consolidated balance sheets)

Accounting treatment for notes and accounts that mature on the fiscal year-end date

Such notes and accounts are recorded on the clearance date. Because the fiscal year-end in the consolidated fiscal year under review fell on a bank holiday, the following notes and accounts are included in the closing balance.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Notes and accounts receivable ¥1,004 million ¥1,393 million

Notes and accounts payable ¥190 million ¥103 million

Note 1.(cross-referenced with *1 in the consolidated statements of income) Revenue from contracts with customers

The net sales data does not group income from contracts with customers separately from other

income. Income from contracts with customers is disclosed in Information Related to the Accounting Standard for Revenue Recognition: 1.Breakdown of revenue from contracts with customers.

Note 2.(cross-referenced with *2 in the consolidated statements of income) Selling, general and administrative expenses

Shown below are the main components of "selling, general and administrative expenses" together

with the amounts.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Packing and transportation ¥26,885 million ¥28,135 million

Salary and other allowances ¥34,816 million ¥36,477 million

Retirement benefit expenses ¥875 million ¥929 million

Provision for bonuses ¥816 million ¥843 million

Note 3.(cross-referenced with *3 in the consolidated statements of income)

Shown below is the portion of "selling, general and administrative expenses" that pertains to R&D expenditure.

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

¥1,699 million ¥1,540 million

Note 4.(cross-referenced with *4 in the consolidated statements of income) Shown are the components of "gain on sales of non-current assets."

Previous consolidated fiscal year (ended Dec 31, 2024)

Consolidated fiscal year under review (ended Dec 31, 2025)

Land ¥4,863 million ¥1,004 million

Total ¥4,863 million ¥1,004 million

Note 5.(cross-referenced with *5 in the consolidated statements of income) Impairment loss

Shown below are the impairment losses by asset group in the Company and its consolidated

subsidiaries.

Previous consolidated fiscal year (ended Dec 31, 2024)

(Millions of yen)

In general, business assets are grouped into operating segments of operating companies (such segments representing the lowest level of identifiable cash flows). In the case of Actus (a consolidated subsidiary), they are grouped by retail store (the lowest level of identifiable cash flows for Actus). In

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