Slide 1: Briefing Materials on Business Results for the Year Ended December 31, 2023
THE PACK CORPORATION Briefing Materials on Business Results for the Year Ended December 31, 2023 February 29, 2024
Slide 2: Contents
Contents Topics P. 2 1. Business Results for the Year Ended December 31, 2023 P. 3 2. Forecasts of Business Results for the Year Ending December 31, 2024 P. 17 3. Promotion of Sustainable Management P. 21 4. Progress on the Medium-Term Management Plan P. 25 5. Reference Materials P. 34 Copyright© 20
Slide 3: Topics
Topics Demand for dining and accommodations grew as COVID-19 restrictions were relaxed. Despite an economic recovery driven by factors including recovering inbound tourism demand and rising wages, the lingering effects of high energy prices and exchange rate fluctuations appear to be spurring infl
Slide 4: 1. Business Results for the Year Ended December 31, 2023
1. Business Results for the Year Ended December 31, 2023 3
Slide 5: Summary of Business Results
Summary of Business Results Record highs in net sales, operating profit, ordinary profit, and profit attributable to owners of parent (Million yen) Year ended December Year ended December 31, 2023 31, 2022 Actual Actual YoY change Net sales 89,060 97,714 9.7% Operating profit 5,972 7,743 29.7% Ordin
Slide 6: Factors Underlying Changes in Operating Profit
Factors Underlying Changes in Operating Profit Operating profit grew due to growing sales volumes and rising average sale prices. (Million yen) Year ended Increased Higher Higher raw Higher other Higher labor Higher Higher other Year ended December 31, sales average sale material manufactur- costs l
Slide 7: Results by Segment
Results by Segment (Million yen) Year ended December 31, 2022 Year ended December 31, 2023 Actual Share Actual Share YoY change Net sales 89,060 100.0% 97,714 100.0% 9.7% Paper Products 62,932 70.7% 69,399 71.0% 10.3% Paper bags 26,252 29.5% 29,653 30.3% 13.0% Paper cartons 22,283 25.0% 25,000 25.6%
Slide 8: Trends by Segment
Trends by Segment Record-high sales and operating profit for paper products Net sales Net sales Net sales Operating profit (Million yen) (Paper Products Business) (Film Packaging Business) (other businesses) 6,850 8,000 5,972 7,743 6,000 4,144 3,275 4,000 97,714 2,000 100,000 95,502 89,060 0 15,483
Slide 9: Sales Composition
Sales Composition Net sales by business 1.0 2.8 0.4 (%) Year ended December 31, 27.1 16.5 5.0 6.1 4.9 2.13.3 3.4 27.5 2022 Year ended December 31, 28.1 16.6 5.0 5.6 4.9 2.03.0 3.8 26.6 2023 1.2 2.9 0.3 Food products Apparel Department stores Supermarkets and drug stores Convenience stores Pharmaceut
Slide 10: Paper Products Segment
Paper Products Segment Industry environment Trends in net sales and operating profits (Million yen) Department store sales were up for the 22nd consecutive Net sales (left axis) Operating profit (right axis) month, including double-digit YoY growth for accessories, 69,399 sundries, and cosmetics,
Slide 11: Paper Products Segment (Paper Bags)
Paper Products Segment (Paper Bags) Industry environment Trends in operating profit margins Recovering demand for takeout paper cartons in response to Net sales (left axis) Operating profit (right axis) (Million yen) growing brick-and-mortar store consumption and resumption of 29,653 various event
Slide 12: Paper Products Segment (Paper Cartons)
Paper Products Segment (Paper Cartons) Industry environment Trends in operating profit margins Growing demand for paper cartons in markets for souvenirs Net sales (left axis) Operating profit (right axis) (Million yen) and food products due to recovering consumption 25,000 Growing demand for hig
Slide 13: Paper Products Segment (Corrugated Boxes)
Paper Products Segment (Corrugated Boxes) Industry environment Trends in operating profit margins Declining corrugated box demand due to slowing purchases of (Million yen) Net sales (left axis) Operating profit (right axis) major home appliances, etc. in response to higher prices and 15,000 3,000
Slide 14: Film Packaging Segment
Film Packaging Segment Industry environment Trends in operating profit margins (Million yen) Growing demand for proposals for and development of eco- friendly packages using thinner films, recycled materials, 20,000 2,000 biomass materials, etc. Net sales (left axis) Operating profit (right axis)
Slide 15: Other Businesses
Other Businesses Industry environment Trends in operating profit margins Renewal of gift wrapping materials is underway in response to (Million yen) recovering consumption at brick-and-mortar stores 20,000 4,000 Net sales (left axis) Operating profit (right axis) Growing introduction of reusable
Slide 16: Balance Sheet
Balance Sheet (Million yen) Year ended Year ended December 31, 2023 December 31, 2022 Actual Actual Assets 94,365 98,847 Current assets 61,484 59,080 Non-current assets 32,881 39,766 Property, plant, and equipment 23,729 27,401 Intangible assets 1,044 2,679 Investments and other assets 8,106 9,685 L
Slide 17: Cash Flow
Cash Flow (Million yen) Year ended Year ended December 31, 2023 Main items December 31, 2022 Actual Actual Cash flows from operating activities 5,380 4,443 Profit before income taxes 5,925 7,941 Depreciation and impairment losses 2,315 2,082 Cash flows used in investment activities -3,762 -3,962 Pur
Slide 18: 2. Forecasts of Business Results for the Year Ending December 31, 2024
2. Forecasts of Business Results for the Year Ending December 31, 2024 17
Slide 19: Forecasts of Business Results
Forecasts of Business Results Toward new record highs in sales and profit (Million yen) Year ended Year ending December 31, 2023 December 31, 2024 Forecast of business Actual Forecast YoY change results Net sales 97,714 101,000 3.4% Operating profit 7,743 8,100 4.6% Ordinary profit 8,063 8,400 4.2%
Slide 20: Trends in Consolidated Business Results
Trends in Consolidated Business Results (Million yen) Year ended Year ended Year ended Year ended Year ending December 31, December 31, December 31, December 31, December 31, 2020 2021 2022 2023 2024 (forecast) Net sales 78,445 79,690 89,060 97,714 101,000 Operating 3,275 4,144 5,972 7,743 8,100 pro
Slide 21: Major Factors Underlying Projected Changes in Operating Profit
Major Factors Underlying Projected Changes in Operating Profit Profit growth driven mainly by growing sales of paper products (Million yen) Year ended Year ending December 31, Increased Higher average Higher raw Higher other Higher labor Higher Higher other December 31, 2023 sales sale prices materi
Slide 22: 3. Promotion of Sustainable Management
3. Promotion of Sustainable Management 21
Slide 23: Promotion of Sustainable Management
Promotion of Sustainable Management Setting 12 materialities in five themes Major themes Materialities (Important Issues) Promoting eco-friendly product planning and technological development Delivering solutions to environmental Environment Reducing environmental impact throughout our business
Slide 24: Promotion of Sustainable Management
Promotion of Sustainable Management Construction began in March 2023 on the headquarters building at the site where the Company was founded. Plans for the facility emphasize high environmental performance to contribute to a decarbonized society, consideration for local residents, and comfortable w
Slide 25: Promotion of Sustainable Management
Promotion of Sustainable Management HR measures based on the corporate philosophy, “We value and nurture people.” We’re implementing various HR measures to support diverse employee workstyles and increase motivation and engagement with the goal of increasing corporate value over the long term. Ado
Slide 26: 4. Progress on the Medium-Term Management Plan
4. Progress on the Medium-Term Management Plan 25
Slide 27: Upward Revision of Figures Set for the Medium-Term Management Plan
Upward Revision of Figures Set for the Medium-Term Management Plan Achievement in the year ended December 2023 of the operating profit target for the year ending December Background of 2025 through the following efforts: High profitability achieved by executing the strategies and measures specif
Slide 28: Progress toward Numerical Targets under the Medium-Term Management Plan
Progress toward Numerical Targets under the Medium-Term Management Plan Sales growth was up YoY for all markets and products in the first fiscal year of the Medium-Term Management Plan. Overview Sales in the food products and general distribution and retail markets expand beyond the full-year fo
Slide 29: Progress of Growth Strategies in the Food Products Market
Progress of Growth Strategies in the Food Products Market Progress toward quantitative targets Overview of progress (100 million yen) FY2022 FY2023 Sales have grown achieved primarily through new developments related to product development YoY change result result and proposal capabilities in resp
Slide 30: Progress of Growth Strategies in the E-commerce and Mail Order Market and the Logistics Industry
Progress of Growth Strategies in the E-commerce and Mail Order Market and the Logistics Industry Progress toward quantitative targets Overview of progress (100 million yen) FY2022 FY2023 Sales of various products and services have grown in response to increasingly diverse demand. YoY change result
Slide 31: Progress of Growth Strategies in Various Markets, Including General Distribution and Retail Market
Progress of Growth Strategies in Various Markets, Including General Distribution and Retail Market Progress toward quantitative targets Overview of progress (100 million yen) FY2022 FY2023 Proposal-based sales in response to growing demand in the market and changing business YoY change result resu
Slide 32: Progress on Human Capital Strategy
Progress on Human Capital Strategy Implementing various measures to secure human resources to support growth and maximize value Overview Linked to materialities (important issues) and KPIs Using stress checks and engagement surveys Secure diverse human resources. Develop optimal working enviro
Slide 33: Progress on Financial Strategy (1): Proactive Investment
Progress on Financial Strategy (1): Proactive Investment Implementing measures to increase growth and corporate value Overview Facilities enhancements centered on paper cartons and paper bags Investment in increasing corporate value Capital investment M&A (100 million yen) • Research and study
Slide 34: Progress on Financial Strategy (2): Further Enhancements in Shareholder Returns
Progress on Financial Strategy (2): Further Enhancements in Shareholder Returns Strengthening corporate value through dialogue with investors and shareholders and continuous consideration by the Board of Directors and other bodies Overview Alongside efforts to maintain ROE and ROIC of 8% or high
Slide 35: 5. Reference Materials
5. Reference Materials ® THE PACK CORPORATION 34
Slide 36: Corporate Overview
Corporate Overview Name THE PACK CORPORATION Founded May 1952 (shares listed September 1991; listed on TSE Prime Market April 2022) 2-9-3 Higashiobase, Higashinari-ku, Osaka City, Osaka Headquarters * Relocated in May 2023. Lines of Planning, manufacturing and sale of paper bags, folding paper carto
Slide 37: The Pack Group (Eight Consolidated Subsidiaries)
The Pack Group (Eight Consolidated Subsidiaries) The Pack Corporation Headquarters (Osaka) Tokyo Head Office Osaka Plant Nara Plant Tokyo Plant Ibaraki Plant Building (All sites have earned ISO 9001 and ISO 14001 certification.) Domestic subsidiaries Keihin Tokushu Printing Nikko Print Corporation P
Slide 38: Trends in Net Sales and Ordinary Profit (Consolidated) from the Company's Founding
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) Operating 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 39: Distribution Structure for Major Products
Distribution Structure for Major Products Consumers Main buyers Department Convenience Supermarkets Pharmaceuticals Home electronics e-commerce Apparel Sundries Food products and home stores stores and drug stores and cosmetics installations (mail order) etc. Raw materials makers Other parts and mat
Slide 40: The Pack's Strengths (1)
The Pack’s Strengths (1) Strength Specifics 1. A wide-ranging Transaction counterparties: Year ended December 31, 2023 customer base approx. 14,000 companies （％） Food products, department stores, specialty stores, large retailers, general retailers, convenience stores, fast food, apparel, home ele
Slide 41: The Pack's Strengths (2)
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 42: 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 Niigata Sales Office Film packaging plant Paper cartons plant Keihin Tokushu
Slide 43: The Pack's Strengths (4)
The Pack’s Strengths (4) 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 satisfacti
Slide 44: ESG Initiatives (1)
ESG Initiatives (1) Initiatives Specifics All plants and sites in Japan had earned ISO 14001 certification as of 2006. 1. Environmental We are implementing a wide range of initiatives, including measures to cut CO2 emissions and Initiatives waste volumes and to develop eco-friendly products. W
Slide 45: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics In 2000, we established an independent Forest® Environment Fund and launched volunteer 2. Activities of The Pack activities to plant and thin forested areas. Currently, trees are being planted on nine sites Forest® Environment nationwide. We contribute a
Slide 46: ESG Initiatives (2)
ESG Initiatives (2) Initiative Details 2. The Pack Forest® Activities at The Pack Forest No. 9 in Fujimi, Nagano Prefecture began in 2023 Environment Fund To support Nagano Prefecture’s “Forest Foster Parent Promotion” project, we designated a 1.8 ha site in Fujimi, Suwa-gun, Nagano Prefecture as
Slide 47: ESG Initiatives (3)
ESG Initiatives (3) Initiatives Specifics 3. Human Resource In accordance with our Company Motto, “Passionate and Dedicated to Our Partnerships,” and our Corporate Philosophy, “We Value and Nurture People,” we Development and implement initiatives to contribute to employee welfare, including human
Slide 48: ESG Initiatives (4)
ESG Initiatives (4) Initiatives Specifics 4. 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 Activities schools. Sponsorship of the Kansai Philharmonic Orchestra Dona
Slide 49: Note
Note This document is intended to provide information on management policies and business results for the second quarter of the year ended December 31, 2023. 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