President’s Message

Hello! Hidekuni Kuroda here. Let me tell you about our performance in 2024 and our future plans.

During 2024, the Japanese economy traced a moderate recovery path, with improved corporate earnings, employment situation, and personal income. However, the economic outlook was mired by an economic downturn overseas amid economic uncertainties in China and by other factors such as the soaring costs of energy and raw materials.

Against this backdrop, we continued working on our third medium-term plan, Field Expansion 2024, in which we tweak existing business and expand our business fields as part of our long-term vision, CCC 2030. To expand business fields, we reallocated resources from existing businesses, actively deployed strategic expenditures, and stepped up our global expansion efforts. The business climate had changed dramatically, but we maintained our competitiveness by flexibly adapting to the changing business environment and shifting customer needs.

Net sales reached ¥338.2 billion (up 2.9% 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 ¥132.9 billion (up 4.3% year on year), reflecting sales price revisions, which more than offset the high raw material prices. Gross profit ratio came to 39.3% (up 0.5 points year on year). Selling, general and administrative expenses increased to ¥110.8 billion (up 7.1% year on year), reflecting strategic expenditures and organizational bolstering for expanding the business fields. SG&A ratio came to 32.8% (up 1.3 points year on year).

Reflecting these results, operating income reached ¥22.0 billion (down 7.6% year on year). Ordinary income reached ¥24.4 billion (down 6.1% year on year). Profit attributable to owners of parent reached ¥21.7 billion (up 14.3% year on year). A major component was the recording of \10.2 billion in extraordinary income item, namely gain on sale of investment securities. This gain more than offset a \5.1 billion in extraordinary loss item, namely impairment loss. The impairment occurred in goodwill and other intangible assets in subsidiary Kokuyo Hong Kong Limited (Kokuyo Hong Kong).

The current business year (ending December 2025) is the first year of our fourth medium-term plan, titled Unite for Growth 2027. The plan commits us to growing our existing businesses and expanding the reach of the business fields as part of our long-term vision, CCC 2030.

I look forward to updating you on our progress.