Slide 1: Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2022
THE PACK CORPORATION Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2022 September 2, 2022
Slide 2: Contents
Contents Topics P. 2 1. Business Results for the Second P. 3 Quarter of the Year Ending December 31, 2022 2. Forecasts of Business Results for the P. 17 Year Ending December 31, 2022 3. Progress on the Medium-Term P. 21 Management Plan 4. Reference Materials P. 33 Copyright© 2022 The Pack Corporatio
Slide 3: Topics
Topics Business results ◼ Alongside recovering consumer spending, overall business trends were positive. — Consumer spending increased at brick-and-mortar stores, which had a particularly strong effect on sales of paper bags. ◼ Sales were also strong for packages for the e-commerce sector (mainly co
Slide 4: 1. Business Results for the Second Quarter of the Year Ending December 31, 2022
1. Business Results for the Second Quarter of the Year Ending December 31, 2022 3
Slide 5: Summary of Business Results
Summary of Business Results Overall trend toward recovery as consumers go out more and consumer spending recovers (Million yen) Second quarter of year Second quarter of ended December 31, year ending 2021 December 31, 2022 Actual Actual YoY change Net sales 36,589 39,617 8.3% Operating profit 1,459
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. Increased Higher Lower raw Higher other Higher labor Higher Lower other (Million yen) sales average sale material manufactur- costs logistics selling, volumes prices cost
Slide 7: Results by Segment
Results by Segment (Million yen) Second quarter of year ended Second quarter of year ending December 31, 2021 December 31, 2022 Actual Share Actual Share YoY change Net sales 36,589 100.0% 39,617 100.0% 8.3% Paper 25,315 69.2% 27,998 70.7% 10.6% Products Paper bags 9,684 26.5% 11,259 28.4% 16.3% Pap
Slide 8: Trends by Segment (Second Quarter)
Trends by Segment (Second Quarter) Net sales Net sales (Film Packaging Business) Net sales (other businesses) Operating profit (Million yen) (Paper Products Business) 2,695 2,595 3,000 2,044 1,459 2,000 1,229 50,000 1,000 44,284 42,054 0 7,073 39,617 40,000 6,865 36,046 36,589 6,396 9,185 6,048 5,95
Slide 9: Sales Composition
Sales Composition Net sales by business 0.4 Second quarter of year ended December 31, 24.6 14.7 4.8 7.3 1.3 5.4 2.52.2 4.0 4.4 28.3 2021 Second quarter of year ending December 31, 25.9 16.3 4.8 6.2 1.1 4.7 3.1 2.2 3.8 3.2 28.3 2022 0.4 Food products Apparel Department stores Supermarkets and drug st
Slide 10: Paper Products Segment
Paper Products Segment Industry environment Trends in net sales and operating profits ◆ Demand for paper bags grew alongside growth in consumer (Million yen) spending. ◆ Due to COVID-19, the share of overall sales accounted for by Net sales (left axis) Operating profit (right axis) e-commerce contin
Slide 11: Paper Products Segment (Paper Bags)
Paper Products Segment (Paper Bags) Industry environment Trends in operating profit margins ◆ Current trends indicate a transition from plastic to (Million yen) Net sales (left axis) Operating profit (right axis) paper bags and to more eco-friendly materials 15,000 3,000 generally. 13,627 ◆ Demand f
Slide 12: Paper Products Segment (Paper Cartons)
Paper Products Segment (Paper Cartons) Industry environment Trends in operating profit margins ◆ Growing demand for primary paper containers keeping pace (Million yen) with growth in the takeout and delivery foods market 15,000 3,000 ◆ Leisure- and travel-related consumption, which had steadily Net
Slide 13: Paper Products Segment (Corrugated Boxes)
Paper Products Segment (Corrugated Boxes) Industry environment Trends in operating profit margins ◆ Growing demand for corrugated boxes for the food (Million yen) products and apparel markets alongside growth in the 10,000 2,000 e-commerce sector → Consumers are using e-commerce in ways specific Net
Slide 14: Film Packaging Segment
Film Packaging Segment Industry environment Trends in operating profit margins ◆ Domestic disposable diaper manufacturers are facing declining Net sales (left axis) Operating profit (right axis) (Million yen) exports due to the emergence of local disposable diaper manufacturers in overseas markets.
Slide 15: Other Businesses
Other Businesses Industry environment Trends in operating profit margins ◆ Slowing demand for in-store supplies and office supplies (Million yen) in the department store industry as stores close and consolidate 10,000 2,000 → Recovering from COVID-19 sales downturns Net sales (left axis) Operating p
Slide 16: Balance Sheet
Balance Sheet (Million yen) Year ended Second quarter of year December 31, 2021 ending December 31, 2022 Actual Actual Assets 87,422 86,565 Current assets 55,438 56,219 Non-current assets 31,984 30,345 Property, plant, and equipment 22,658 22,781 Intangible assets 643 841 Investments and other asset
Slide 17: Cash Flow
Cash Flow (Million yen) Second quarter of year Second quarter of year ended December 31, 2021 ending December 31, 2022 Main items Actual Actual Cash flows from operating activities 6,143 4,449 Profit before income taxes 1,595 2,060 Depreciation and impairment losses 1,007 1,133 Cash flows used in in
Slide 18: 2. Forecasts of Business Results for the Year Ending December 31, 2022
2. Forecasts of Business Results for the Year Ending December 31, 2022 17
Slide 19: Forecasts of Business Results
Forecasts of Business Results Growth in sales and profit driven by eco-friendly solutions that respond to a changing market (Million yen) Year ended Year ending December 31, 2021 December 31, 2022 Actual Forecast of business results Forecast YoY change Net sales 79,690 83,000 4.2% Operating profit 4
Slide 20: Trends in Consolidated Business Results
Trends in Consolidated Business Results (Million yen) Year ended Year ended Year ended Year ending December 31, December 31, December 31, December 31, 2019 2020 2021 2022 (forecast) Net sales 95,502 78,445 79,690 83,000 Operating profit 6,850 3,275 4,144 4,700 <Net sales> (Million yen) <Operating pr
Slide 21: Major Factors Underlying Projected Changes in Operating Profit
Major Factors Underlying Projected Changes in Operating Profit Growth in profit due to growth in sales volumes of paper products and stronger sales of high value added products (Million yen) Increased Higher Lower raw Higher other Higher labor Higher Lower other sales average sale material manufactu
Slide 22: 3. Progress on the Medium-Term Management Plan
3. Progress on the Medium-Term Management Plan 21
Slide 23: Management Focused on Environmental Responsiveness
Medium-Term Management Plan Slogan: 2020-2022 (Three years) Management Focused on Environmental Responsiveness “Environmental responsiveness” refers to being responsive not just to the natural environment, but to needs across a wide range of areas, including the social environment and workplace envi
Slide 24: Initiatives to Switch to Paper Packaging/Enhancing Sales of Paper Cartons
● Initiatives to Switch to Paper Packaging/Enhancing Sales of Paper Cartons Net sales by item Paper carton sales results Paper Products Business Film Packaging Business H1 (Jan.-June) H2 (July-Dec.) Other businesses (100 million yen) (100 million yen) 500 300 Projected 400 70 211 63 200 183 194 91 6
Slide 25: Growing Sales to the Food Products, Pharmaceuticals and Cosmetics, and E-commerce Markets
● Growing Sales to the Food Products, Pharmaceuticals and Cosmetics, and E-commerce Markets Sales trends (food products) (100 million yen) Sales trends 400 60 (pharmaceuticals/cosmetics) (100 million yen) H1 (Jan.-June) H2 (July-Dec.) H1 (Jan.-June) H2 (July-Dec.) Projected 45 300 Projected 42 42 40
Slide 26: Expanding Business Domains/Promoting Productivity Improvements and Workstyle Reforms
● Expanding Business Domains/Promoting Productivity Improvements and Workstyle Reforms Strategy Progress Expanding business domains ◆ Overseas expansion ◆ Sales of e-commerce products grew thanks to expanded Sales growth in the China market orders by major e-commerce firms in the China market. Ventu
Slide 27: Progress on Investment Plans (1)
Progress on Investment Plans (1) Three-year plan 1. Enhancing paper carton manufacturing capacity (7 billion yen) Increasing production capacity by expanding the plants capable of producing primary paper containers and increasing orders received for paper cartons To date, 2.16 billion yen has been
Slide 28: Progress on Investment Plans (2)
Progress on Investment Plans (2) Five-year plan 5. Rebuilding the Osaka Plant (Higashi-Osaka, Osaka Prefecture) Together with a scrap-and-build project to rebuild the plant on the current site, partial transfer of production functions to nearby site under consideration Currently, a basic constructio
Slide 29: Returns to Shareholders
Returns to Shareholders Maintaining a dividend payout ratio of 25% or better <Payout ratio> (%) 60.0 47.6 40.0 33.6 32.6 22.6 20.0 0.0 2019 2020 2021 2022 (Forecast) ◆ We plan to pay annual dividends of 60 yen in 2022, seeking to strike a balance between returns to shareholders and strategic investm
Slide 30: Sustainable Development Goals (SDGs) Initiatives (1)
Sustainable Development Goals (SDGs) Initiatives (1) 1. Enhancing sales of The Pack Forest® products Striving to protect the global environment alongside our customers by contributing a portion of sales to The Pack Forest Environment Fund 2. Enhancing sales of Forest Stewardship Council® (FSC®)-cert
Slide 31: Sustainable Development Goals (SDGs) Initiatives (2)
Sustainable Development Goals (SDGs) Initiatives (2) 3. CO2 emissions reduction initiatives A new headquarters building whose design reflects consideration of measures to conserve energy and reduce CO2 emissions is slated for completion in 2023. In rebuilding the Osaka Plant, we will make progress o
Slide 32: ESG Initiatives
ESG Initiatives 1. Establishing the new Sustainable Business Team Formulating a basic policy on sustainable management and a list of priority topics (materiality) With regard to TCFD recommendations, during FY2022, we also plan to establish a promotion structure; carry out scenario analysis (review
Slide 33: About the New Medium-Term Management Plan
About the New Medium-Term Management Plan Plans call for formulating a new Medium-Term Management Plan during FY2022 to take effect beginning FY2023. This plan will be linked to our basic policy on sustainable management. Copyright© 2022 The Pack Corporation. All Rights Reserved. 32
Slide 34: 4. Reference Materials
® THE PACK CORPORATION 4. Reference Materials 33
Slide 35: 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 36: The Pack Group (Eight Consolidated Subsidiaries)
The Pack Group (Eight Consolidated Subsidiaries) The Pack Corporation Headquarters Tokyo Head Osaka Plant Nara Plant Tokyo Plant Ibaraki Plant (Osaka) Office Building (All sites have earned ISO 9001 and ISO 14001 certification.) Domestic subsidiaries Keihin Tokushu Nikko Print Pack Takeyama Co., Nis
Slide 37: Trends in Net Sales and Ordinary Profit from Founding through 2021
Trends in Net Sales and Ordinary Profit (Consolidated) from the Company’s Founding (1952) through 2021 (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 38: 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 etc. stores stores and drug stores and cosmetics installations (mail order) Raw materials makers Other parts and mat
Slide 39: The Pack's Strengths (1)
The Pack’s Strengths (1) Strength Specifics Second quarter of year ending 1. A wide-ranging ◆ Transaction counterparties: December 31, 2022 customer base approx. 14,000 companies Food products, department stores, specialty stores, large retailers, general retailers, convenience stores, fast food, ap
Slide 40: 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 41: 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 42: 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 satisfactio
Slide 43: 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 initiatives CO2 emissions and waste volumes and to develop eco-friendly products. ◆ W
Slide 44: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics ◆ In 2000, we established an independent Forest Environment Fund and launched 2. Activities of The volunteer activities to plant and thin forested areas. Pack Forest ◆ We contribute a portion of the sales from eco-friendly products to the Forest Environment
Slide 45: 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 initiatives to contribute to employee welfare, including human resource
Slide 46: ESG Initiatives (4)
ESG Initiatives (4) Initiatives Specifics 4. Environmental ◆ As part of our environmental education initiatives, in cooperation with the city of Higashi-Osaka, we organize hands-on manufacturing classes at education elementary schools. Relationship to the SDGs 5. Community ◆ We’re developing a struc
Slide 47: 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, 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