Slide 1: Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2024
THE PACK CORPORATION Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2024 September 2, 2024
Slide 2: Contents
Contents Topics P. 2 1. Business Results for the Second P. 3 Quarter of the Year Ending December 31, 2024 2. Forecasts of Business Results for the Year P. 18 Ending December 31, 2024 3. Progress on Sustainable Management P. 22 4. Progress on the Medium-Term P. 27 Management Plan 5. Reference Materia
Slide 3: Topics
Topics Recovering domestic consumption, robust capital investments, and strong spending by foreign visitors have been key factors supporting the Japanese economy. However, the outlook for consumer consumption remains uncertain for several reasons, including soaring energy costs, the rising cost of
Slide 4: 1. Business Results for the Second Quarter of the Year Ending December 31, 2024
1. Business Results for the Second Quarter of the Year Ending December 31, 2024 3
Slide 5: Summary of Business Results
Summary of Business Results Net sales, operating profit, ordinary profit, and profit all achieved record highs. (Million yen) Second quarter of Second quarter of year ended year ending December 31, 2023 December 31, 2024 Actual Actual YoY change Net sales 44,878 46,617 3.9% Operating profit 2,976 3,
Slide 6: Results by Segment
Results by Segment (Million yen) Second quarter of year ended Second quarter of year ending December 31, 2023 December 31, 2024 Actual Share Actual Share YoY change Net sales 44,878 100.0% 46,617 100.0% 3.9% Paper Products 31,734 70.7% 33,322 71.5% 5.0% Paper bags 12,993 29.0% 14,279 30.6% 9.9% Pape
Slide 7: Factors Underlying Changes in Operating Profit
Factors Underlying Changes in Operating Profit Sales volumes grew due to rising average sales prices (Million yen) Semi-annual Semi-annual Lower sales Higher Higher raw Higher other Lower labor Higher Lower other period of year period of year volumes average sales material costs manufactur- costs lo
Slide 8: Trends by Segment
Trends by Segment Net sales and operating profit reached record highs (compared to the semi-annual period of the preceding fiscal year) (Million yen) Net sales (Paper Products segment) Net sales (Film Packaging segment) Net sales (other segments) Operating profit 3,525 2,595 2,976 4,000 2,044 3,000
Slide 9: Sales Composition
Sales Composition Net sales by business Second quarter 1.3 2.9 0.4 (Million yen) of year ended December 31, 27.1 15.8 4.8 5.8 5.0 2.1 3.8 4.1 27.0 2023 Second quarter of year ending December 31, 28.3 16.3 4.9 5.4 4.7 2.3 2.8 3.8 26.5 2024 0.3 1.3 3.5 Food products Apparel Department stores Supermark
Slide 10: Paper Products Segment
Paper Products Segment Business environment Trends in net sales and operating profits By the end of the semi-annual period, department store sales had (Million yen) climbed nationwide for 28 consecutive months. Net sales (left axis) Operating profit (right axis) Sales for inbound tourists (tax-fre
Slide 11: Paper Products Segment (Paper Bags)
Paper Products Segment (Paper Bags) Business environment Trends in net sales and operating profits Intensifying competition within the industry and fears of declining Net sales (left axis) Operating profit (right axis) (Million yen) consumer confidence have highlighted the need for value 15,000 14
Slide 12: [Reference] Examples of Types of Paper Bag
[Reference] Examples of Types of Paper Bag Paper tote bag (with foldover) Bag with upper edges folded inside. The folded edges add strength to the bag, making reuse more likely. Paper tote bag (without foldover) Bag with its serrated upper edges. These highly cost-efficient bags are ideal for ma
Slide 13: Paper Products Segment (Paper Cartons)
Paper Products Segment (Paper Cartons) Business environment Trends in net sales and operating profits The food service industry, including fast food restaurants, is showing Net sales (left axis) Operating profit (right axis) (Million yen) strong performance following the full recovery of everyday
Slide 14: Paper Products Segment (Corrugated Boxes)
Paper Products Segment (Corrugated Boxes) Business environment Trends in net sales and operating profits Although demand for corrugated boxes, particularly those for food Net sales (left axis) Operating profit (right axis) (Million yen) products has increased due to the rise in everyday activities
Slide 15: Film Packaging Segment
Film Packaging Segment Business environment Trends in net sales and operating profits As societal demand for eco-friendly products grows stronger, the Net sales (left axis) Operating profit (right axis) (Million yen) shopping bags used to transport purchases are increasingly 10,000 2,000 becoming
Slide 16: Other Sectors
Other Sectors Business environment Trends in net sales and operating profits Demand for gift-wrapping materials and sales-promotion Net sales (left axis) Operating profit (right axis) (Million yen) materials is increasing. 10,000 2,000 Due to growing environmental consciousness, the introduction
Slide 17: Balance Sheet
Balance Sheet (Million yen) Year ended Second quarter of year ending December 31, 2023 December 31, 2024 Actual Actual Assets 98,847 98,723 Current assets 59,080 57,186 Non-current assets 39,766 41,537 Property, plant, and equipment 27,401 28,488 Intangible assets 2,679 3,290 Investments and other a
Slide 18: Cash Flow
Cash Flow (Million yen) Second quarter of year ended Second quarter of year ending December 31, 2023 December 31, 2024 Main items Actual Actual Cash flows from operating activities 5,066 6,301 Profit before income taxes 3,129 4,381 Depreciation 1,014 1,006 Cash flows used in investment activities -5
Slide 19: 2. Forecast of Business Results for the Year Ending December 31, 2024
2. Forecast of Business Results for the Year Ending December 31, 2024 (no revisions) 18
Slide 20: Forecasts of Business Results
Forecasts of Business Results The highest-ever year-end net sales and profit are forecast (Million yen) Year ended Year ending December 31, 2024 December 31, 2023 Forecasts of Actual Forecast YoY change Business Results Net sales 97,714 101,000 3.4% Operating profit 7,743 8,100 4.6% Ordinary profit
Slide 21: Trends in Consolidated Business Results
Trends in Consolidated Business Results (Million yen) Year ended Year ended Year ended Year ended Forecast for year December 31, December 31, December 31, December 31, ending December 2020 2021 2022 2023 31, 2024 Net sales 78,445 79,690 89,060 97,714 101,000 Operating profit 3,275 4,144 5,972 7,743
Slide 22: Major Factors Underlying Projected Changes in Operating Profit
Major Factors Underlying Projected Changes in Operating Profit Efforts to strengthen sales of paper products are expected to boost profits. (Million yen) Increased Higher average Lower raw Lower other Lower labor Lower Lower other Year ended Year ending sales sales prices material costs manufactur-
Slide 23: 3. Progress on Sustainable Management
3. Progress on Sustainable Management 22
Slide 24: Progress on Sustainable Management
Progress on Sustainable Management Materiality KPIs Five KPIs were established with a goal of achieving these KPIs by FY2030. The following shows action plans and actual results for the past four years: Materiality KPIs and action plans Targets for FY2030 and actual results for the past four years
Slide 25: Progress on Sustainable Management
Progress on Sustainable Management Materiality KPIs Materiality KPIs and action plans Targets for FY2030 and actual results for the past four years Contributing to Increasing the number of The Pack Forest® Number of activities per year KPI environmental Environment Fund activities per year to 15 2
Slide 26: Progress on Sustainable Management
Progress on Sustainable Management Materiality KPIs Materiality KPIs and action plans Targets for the fiscal year ending March 31, 2030 and actual results for the past four years KPI Co-creating Increasing the number of companies*2 (Companies) 300 brand value with supporting The Pack Forest? Envir
Slide 27: Progress on Sustainable Management
Progress on Sustainable Management Initiatives to enhance engagement of stakeholders Publishing Integrated Report 2024 (in July 2024) We have edited this report to communicate the value creation story of The Pack Group to a wide range of stakeholders, including shareholders and investors. The comp
Slide 28: 4. Progress on the Medium-Term Management Plan
4. Progress on the Medium-Term Management Plan 27
Slide 29: Quantitative Progress on the Medium-Term Management Plan
Quantitative Progress on the Medium-Term Management Plan Slogan Evolution—Start of purpose-based management and Sustainable Management FY2025 targets Consolidated net sales: 107.0 billion yen; operating profit: 8.3 billion yen *Revised upward in February 2024 ROE: 8% or higher; ROIC: 8% or higher Ne
Slide 30: Quantitative Progress on the Medium-Term Management Plan
Quantitative Progress on the Medium-Term Management Plan Actual results have been favorably progressing toward the planned figures for FY2024 The growth of paper bags and paper cartons and in the food products market contributed to the Overview results of the semi-annual period under review. Whi
Slide 31: Progress on Growth Strategies in the Food Products Market
Progress on Growth Strategies in the Food Products Market Quantitative progress Overview of Progress (Million yen) FY2023 FY2024 All figures are trending up due to favorable progress on initiatives. FY2025 semi-annual, Semi-annual, Full-year target The number of orders received has increased foll
Slide 32: Progress on Growth Strategies in the e-commerce, Mail Order, and Logistics Industries
Progress on Growth Strategies in the e-commerce, Mail Order, and Logistics Industries Quantitative progress Overview of Progress (Million yen) FY2023 FY2024 We have received significant orders for delivery bags, a product area in which we have special FY2025 strengths. This has been a driving forc
Slide 33: Progress on Growth Strategies in the General Distribution, Retail, and Other Sectors
Progress on Growth Strategies in the General Distribution Sector, the Retail Sector, and Other Sectors Quantitative progress Overview of Progress (Million yen) FY2023 FY2024 Sales strategies and supply systems have met the challenges posed by changing market FY2025 environments. semi-annual, actua
Slide 34: Progress on Human Capital Strategy
Progress on Human Capital Strategy We have taken initiatives to secure and draw the maximum value from human resources that support Company growth. Overview Revised systems and wage increases have improved employment conditions. We enhanced existing human resources development programs and add
Slide 35: Progress with Financial Strategies
Progress with Financial Strategies We have taken various initiatives to enhance growth potential and corporate value. We have made steady progress with facility reinforcement plans centering on paper bags and Overview paper cartons for the food products market. We are purchasing treasury share
Slide 36: 5. Reference Materials
5. Reference Materials ® THE PACK CORPORATION 35
Slide 37: Corporate Overview
Corporate Overview Name THE PACK CORPORATION Founded May 1952 (shares listed September 1991; listed on TSE Prime Market April 2022) Headquarters 9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, Osaka Prefecture Lines of Planning, manufacturing and sale of paper bags, folding paper cartons, corrugate
Slide 38: The Pack Group (Eight Consolidated Subsidiaries)
The Pack Group (Eight Consolidated Subsidiaries) The Pack Corporation Headquarters Tokyo Head Office Osaka Plant Nara Plant Tokyo Plant Ibaraki Plant (Osaka) Building (All sites have earned ISO 9001 and ISO 14001 certification.) Domestic subsidiaries Keihin Tokushu Nikko Print Corporation Pack Takey
Slide 39: Trends in Net Sales and Ordinary Profit from Founding through 2023
Trends in Net Sales and Ordinary Profit (Consolidated) from the Company’s Founding (1952) through 2023 (Million yen) 100,000 10,000 Net sales (left axis) Ordinary profit (right axis) 90,000 9,000 80,000 8,000 70,000 7,000 60,000 6,000 50,000 5,000 40,000 4,000 30,000 3,000 20,000 2,000 10,000 1,000
Slide 40: Distribution Structure for Major Products
Distribution Structure for Major Products Consumers Main buyers Department Convenience Supermarkets Pharmaceuticals Home electronics e-commerce stores stores and drug stores Apparel and cosmetics Sundries Food products and home (mail order) installations etc. Raw materials makers Other parts and Pap
Slide 41: The Pack's Strengths (1)
The Pack’s Strengths (1) Strength Specifics (As of June 30, 2024) 1. A wide-ranging Transaction counterparties: approx. 14,000 companies customer base Food products, department stores, specialty stores, large retailers, general retailers, convenience stores, fast food, apparel, home electronics ma
Slide 42: The Pack's Strengths (2) Total packaging solutions
The Pack’s Strengths (2) Strength Specifics 2. A total packaging (Full support structure) Solutions proposed by joint efforts of the sales, research and planning, solutions provider engineering, and design sections (Thorough expertise and access to large body of information) Operating one of Jap
Slide 43: The Pack's Strengths (2)
The Pack’s Strengths (2) The Packaging Laboratories We operate three permanent showrooms—Tokyo, Osaka, and Fukuoka—which each feature a focus on packages. Exhibiting collections of packages from around the world, these showrooms help visitors grasp packaging trends and determine the specifications
Slide 44: The Pack's Strengths (3)
The Pack’s Strengths (3) Strength Specifics 3. Integrated manufacturing, sales, and The Pack Group Manufacturing logistics structure Printing plant Paper bag plant Direct sales structure Hokkaido Branch Aomori Sales Office Film packaging Paper cartons Niigata Sales Office plant plant Keihin Tokushu
Slide 45: The Pack's Strengths (4) (5)
The Pack’s Strengths (4) (5) Strength Specifics 4. Quality control Groupwide quality management systems are ISO 9001-certified. structure The Tokyo and Osaka plants have earned FSSC 22000 international food-safety management system certification. Based on a policy of improving customer satisfa
Slide 46: ESG Initiatives (1)
ESG Initiatives (1) Initiatives Specifics 1. Shift to paper (Example of the shift to paper packaging) packaging Received the Toiletry Packaging Award in the Japan Packaging Contest 2023 for “Paper Conversion of Bottle Set Package” (Unilever Japan Service K.K.) Plastic bags in bottle set packaging
Slide 47: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics 2. Environmental All plants and sites in Japan had earned ISO 14001 certification as of 2006. Continuing to reduce the use of materials appearing on the Pollutant Release and Transfer initiatives Register (PRTR) and in industrial waste Developing and e
Slide 48: ESG Initiatives (3)
ESG Initiatives (3) Initiatives Specifics In 2000, we established an independent The Pack Forest® Environment Fund and launched 3. Activities of The Pack volunteer activities to plant and thin forested areas. Currently we have nine planting sites across ® Forest Environment Japan. We contribute
Slide 49: ESG Initiatives (4) Wage structure
ESG Initiatives (4) Initiatives Specifics 4. Human Resource In accordance with our Company Motto, “Passionate and Dedicated to Our Partnerships,” and our Corporate Philosophy, “We Value and Nurture People,” we are implementing Development and initiatives to contribute to employee welfare, includin
Slide 50: ESG Initiatives (5)
ESG Initiatives (5) Initiatives Specifics 5. Social contribution As part of our environmental education initiatives, in cooperation with the city of Higashi- Osaka, we organize hands-on manufacturing classes at elementary schools. activities Supporting the Kansai Philharmonic Orchestra Donatio
Slide 51: Note
Note This document is intended to provide information on management policies and business results for the second quarter of the year ending December 31, 2024. It is not intended to solicit investment in securities issued by the Company. In addition, this document was prepared based on data as of the