Slide 1: Briefing Materials on Business Results for the Year Ended December 31, 2022 and New Medium-Term Plan
THE PACK CORPORATION Briefing Materials on Business Results for the Year Ended December 31, 2022 and the New Medium-Term Management Plan (FY2023 to FY2025) February 27, 2023
Slide 2: Contents
Contents Topics P. 2 1. Business Results of the Year Ended P. 3 December 31, 2022 2. Forecasts of Business Results P. 17 for the Year Ending December 31, 2023 3. New Medium-Term Management Plan P. 21 (FY2023 to FY2025) 4. Reference Materials P. 32 * The Accounting Standard for Revenue Recognition (A
Slide 3: Topics
Topics Business results ◼ Alongside recovering consumer spending, overall business trends were positive. — Consumer spending increased at brick-and-mortar stores, and tourism and inbound demand also improved ◼ Sales were strong for packages for the e-commerce sector (mainly corrugated boxes and deli
Slide 4: 1. Business Results of the Year Ended December 31, 2022
1. Business Results of the Year Ended December 31, 2022 3
Slide 5: Summary of Business Results
Summary of Business Results Major increase in sales and profits thanks in part to improved consumer spending and economic activity (Million yen) Year ended December Year ended December 31, 2022 31, 2021 Actual Actual YoY change Net sales 79,690 89,060 11.8% Operating profit 4,144 5,972 44.1% Ordinar
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) Increased Higher Higher raw Higher Higher labor Higher Higher other sales average sale material other costs logistics selling, general volumes prices costs
Slide 7: Results by Segment
Results by Segment (Million yen) Year ended December 31, 2021 Year ended December 31, 2022 Actual Share Actual Share YoY change Net sales 79,690 100.0% 89,060 100.0% 11.8% Paper Products 55,498 69.7% 62,932 70.7% 13.4% Paper bags 22,032 27.7% 26,252 29.5% 19.2% Paper cartons 19,497 24.5% 22,283 25.0
Slide 8: Trends by Segment
Trends by Segment Net sales Net sales Net sales Operating profit (Million yen) (Paper Products Business) (Film Packaging Business) (other businesses) 6,924 6,850 8,000 5,972 6,000 4,144 3,275 4,000 100,000 95,502 2,000 93,126 89,060 0 15,512 15,483 78,445 79,690 80,000 14,138 13,574 13,008 19,641 19
Slide 9: Sales Composition
Sales Composition Net sales by business (%) 1.2 2.6 0.4 Year ended December 31, 26.2 15.4 5.1 6.9 5.3 2.1 3.7 3.8 27.2 2021 Year ended December 31, 27.1 16.5 5.0 6.1 4.9 2.13.3 3.4 27.5 2022 Food products Apparel Department stores 1.0 2.8 0.4 Supermarkets and drug stores Convenience stores Pharmaceu
Slide 10: Paper Products Segment
Paper Products Segment Industry environment Trends in net sales and operating profits ◆ Demand for packages at stores is growing as more people (Million yen) venture out following the end of restrictions. Net sales (left axis) Operating profit (right axis) ◆ The e-commerce rate continues to increase
Slide 11: Paper Products Segment (Paper Bags)
Paper Products Segment (Paper Bags) Industry environment Trends in operating profit margins ◆ Demand for takeout paper cartons improving with more people Net sales (left axis) Operating profit (right axis) (Million yen) venturing out 30,000 29,264 6,000 ◆ Growing demand for paper bags thanks to grow
Slide 12: Paper Products Segment (Paper Cartons)
Paper Products Segment (Paper Cartons) Industry environment Trends in operating profit margins Net sales (left axis) Operating profit (right axis) (Million yen) ◆ Growing demand for primary paper cartons for food products thanks to growth in the home meal replacement market and 25,000 5,000 growing
Slide 13: Paper Products Segment (Corrugated Boxes)
Paper Products Segment (Corrugated Boxes) Industry environment Trends in operating profit margins ◆ Slight increase in production in the corrugated box industry (Million yen) overall (up 0.3% YoY)* Net sales (left axis) Operating profit (right axis) → By use, consumption for e-commerce/delivery/movi
Slide 14: Film Packaging Segment
Film Packaging Segment Industry environment Trends in operating profit margins ◆ Declining use of disposable diapers for children. Use of adult diapers (Million yen) is growing as the population continues to age. 19,666 → Overall production in the diaper industry is projected to increase. 20,000 2,0
Slide 15: Other Businesses
Other Businesses Industry environment Trends in operating profit margins ◆ Declining demand for in-store supplies and office supplies (Million yen) due to changing formats in the department store industry 20,000 4,000 → Recovering from COVID-19 sales downturns Net sales (left axis) Operating profit
Slide 16: Balance Sheet
Balance Sheet (Million yen) Year ended Year ended December 31, 2022 December 31, 2021 Actual Actual Assets 87,422 94,365 Current assets 55,438 61,484 Non-current assets 31,984 32,881 Property, plant, and equipment 22,658 23,729 Intangible assets 643 1,044 Investments and other assets 8,682 8,106 Lia
Slide 17: Cash Flow
Cash Flow (Million yen) Year ended Year ended December 31, 2022 Main items December 31, 2021 Actual Actual Cash flows from operating activities 7,217 5,380 Profit before income taxes 4,214 5,925 Depreciation and impairment losses 2,138 2,315 Cash flows used in investment activities -3,460 -3,762 Pur
Slide 18: 2. Forecasts of Business Results for the Year Ending December 31, 2023
2. Forecasts of Business Results for the Year Ending December 31, 2023 17
Slide 19: Forecasts of Business Results
Forecasts of Business Results Growth in sales and profit driven by providing value to the environment, society and economy in response to changing markets (Million yen) Year ended Year ending December 31, 2022 December 31, 2023 Forecast of business Actual Forecast YoY change results Net sales 89,060
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, 2019 2020 2021 2022 2023 (forecast) Net sales 95,502 78,445 79,690 89,060 94,000 Operating 6,850 3,275 4,144 5,972 6,400 prof
Slide 21: Major Factors Underlying Projected Changes in Operating Profit
Major Factors Underlying Projected Changes in Operating Profit Growth in profit mainly from increased paper product sales volumes and improved sales (Million yen) Increased Higher average Higher raw Higher other Higher labor Higher Higher other sales sale prices material costs manufactur- costs logi
Slide 22: 3. New Medium-Term Management Plan (FY2023 to FY2025)
3. New Medium-Term Management Plan (FY2023 to FY2025) 21
Slide 23: Review of Previous Medium-Term Management Plan (FY2020 to FY2022)
Review of Previous Medium-Term Management Plan (FY2020 to FY2022) Strategy Assessment Results ◆ Strengthen sales of paper cartons. ◆ Sales growth in the food products Paper From brick-and-mortar stores to market, a market of special interest accommodating e-commerce ◎ cartons Promote proposal-based
Slide 24: Review of Previous Medium-Term Management Plan (FY2020 to FY2022)
Review of Previous Medium-Term Management Plan (FY2020 to FY2022) Trends in operating profit margins ◆ The Company was affected by declining results in the distribution and retail industry, a major Net sales (left axis) Operating profit (right axis) (100 million yen) customer base, due to the impact
Slide 25: The Pack Group's Management Policy
The Pack Group’s Management Policy In 2023, the Company established its Purpose and Basic Policy on Sustainable Management and established a new management policy that reflects the social and business environment. Mission of bolstering social prosperity and creating satisfaction Purpose through pack
Slide 26: Promotion of Sustainable Management
Promotion of Sustainable Management Basic Policy on Sustainable Response to Materiality (Priority Topics) Management Based on its Company Motto—Passionate and Dedicated to Our Partnerships—the Group will practice sustainable management and has Environment established an official Purpose: Mission of
Slide 27: Summary of New Medium-Term Management Plan (FY2023 to FY2025)
Summary of New Medium-Term Management Plan (FY2023 to FY2025) Slogan Evolution: Start of Purpose-Based Management and Sustainable Management Consolidated net sales: 10.7 billion yen FY2025 Targets Operating profits: 7.0 billion yen ROE: 8% or higher ROIC: 8% or higher New Medium-Term Management Plan
Slide 28: Growth Strategies: Food Products Market
Growth Strategies Food products market (including convenience stores and fast food) ◆ Increase sales of primary food containers. ◆ Develop materials and processes that help reduce environmental impact; increase sales of FSC® products (FSC® C020517). ◆ Combined sales of paper bags and paper cartons w
Slide 29: Growth Strategies: E-commerce, Mail Order, Logistics
Growth Strategies E-commerce, mail order market, logistics industry ◆ Strengthen sales of delivery bags that increase transport efficiency for customers. ◆ Strengthen proposal-based sales that can help reduce labor requirements at customer facilities. • Proposals for product designs that reduce work
Slide 30: Growth Strategies: General Distribution and Retail
Growth Strategies General distribution and retail market, other markets ◆ Increase paper bag share and continue pursuing proposal-based sales to promote paper migration. ◆ Along with product sales, combined sales with assembly and setup work ◆ Develop sales channels in ASEAN region. ◆ Product sales
Slide 31: Human Capital Strategy
Human Capital Strategy Growth and vitalization of individuals and the company Secure diverse human resources. ◆ Strengthen mid-career hiring. ◆ Promote active participation of women (full-time employee and manager ratios). ◆ Expand employment of people with disabilities. Develop human resources. ◆ E
Slide 32: Financial Strategy
Financial Strategy Supporting efficient, continuous growth through optimal fund usage planning ◆Nara Plant rebuild • Plan to acquire new land in Nara ◆Priority allocation of funds for growth investment Prefecture and build corrugated box Growth (1) Capital investment (2) Investment in new businesses
Slide 33: 4. Reference Materials
4. Reference Materials ® THE PACK CORPORATION 32
Slide 34: Corporate Overview
Corporate Overview Name THE PACK CORPORATION Founded May 1952 (shares listed September 1991; listed on TSE Prime Market April 2022) Headquarters OAP Tower 20F, 1-8-30 Temmabashi, Kita-ku, Osaka City, Osaka 530-6020, Japan Lines of Planning, manufacturing and sale of paper bags, folding paper cartons
Slide 35: 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 * Relocating to new building in May 2023 (All sites have earned ISO 9001 and ISO 14001 certification.) Domestic subsidiaries Keihin T
Slide 36: Trends in Net Sales and Ordinary Profit from Founding (1952) through 2022
Trends in Net Sales and Ordinary Profit (Consolidated) from the Company’s Founding (1952) through 2022 (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 37: 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 38: The Pack's Strengths (1)
The Pack’s Strengths (1) Strength Specifics 1. A wide-ranging ◆ Transaction counterparties: Year ended December 31, 2022 customer base approx. 14,000 companies 27.5% 27.1% Food products, department stores, specialty stores, large retailers, general retailers, convenience stores, fast food, apparel,
Slide 39: The Pack's Strengths (2)
The Pack’s Strengths (1) 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 40: 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 41: 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 42: ESG Initiatives (1)
ESG Initiatives (1) Initiatives Specifics 1. Environmental ◆ All plants and sites in Japan had earned ISO 14001 certification as of 2006. ◆ We are implementing a wide range of initiatives, including measures to cut Initiatives CO2 emissions and waste volumes and to develop eco-friendly products. ◆ W
Slide 43: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics 2. Activities of The Pack ◆ In 2000, we established an independent Forest Environment Fund and launched volunteer activities to plant and thin forested areas. Forest Environment ◆ We contribute a portion of the sales from eco-friendly products to the Forest
Slide 44: ESG Initiatives (3)
ESG Initiatives (3) Initiatives Specifics ◆ In accordance with our Company Motto, “Passionate and Dedicated to Our Partnerships,” 3. Human Resource and our Corporate Philosophy, “We Value and Nurture People,” we are implementing Development and initiatives to contribute to employee welfare, includin
Slide 45: ESG Initiatives (4)
ESG Initiatives (4) Initiatives Specifics ◆ As part of our environmental education initiatives, in cooperation with the city of 4. Social Contribution Higashi-Osaka, we organize hands-on manufacturing classes at elementary Activities schools. ◆ Sponsorship of the Kansai Philharmonic Orchestra ◆ Supp
Slide 46: 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, 2022. 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