Slide 1: Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2023
THE PACK CORPORATION Briefing Materials on Business Results for the Second Quarter of the Year Ending December 31, 2023 September 4, 2023
Slide 2: Contents
Contents Topics P. 2 1. Business Results for the Second P. 3 Quarter of the Year Ending December 31, 2023 2. Forecasts of Business Results for the Year P. 17 Ending December 31, 2023 3. Promoting sustainable management P. 21 4. Progress on the Medium-Term P. 24 Management Plan 5. Reference Materials
Slide 3: Topics
Topics While food-service, leisure, and lodging-related demand showed a recovering trend as COVID-19 restrictions eased, future prospects remained uncertain due to the effects of soaring energy prices, inflation spurred by rising materials costs, and exchange-rate fluctuations. The Pack’s business
Slide 4: 1. Business Results for the Second Quarter of the Year Ending December 31, 2023
1. Business Results for the Second Quarter of the Year Ending December 31, 2023 3
Slide 5: Summary of Business Results
Summary of Business Results Recovering markets combined with higher sales volume and normalization of sales prices to drive large-scale growth in sales and profit. (Million yen) Second quarter of year Second quarter of ended December 31, year ending 2022 December 31, 2023 Actual Actual YoY change Ne
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 sales Higher Higher raw Higher other Higher labor Higher Higher other volumes average sale material manufactur- costs logistics costs selling, pri
Slide 7: Results by Segment
Results by Segment (Million yen) Second quarter of year ended Second quarter of year ending December 31, 2022 December 31, 2023 Actual Share Actual Share YoY change Net sales 39,617 100.0% 44,878 100.0% 13.3% Paper Products 27,998 70.7% 31,734 70.7% 13.3% Paper bags 11,259 28.4% 12,993 29.0% 15.4% P
Slide 8: Trends by Segment (Second Quarter)
Trends by Segment (Second Quarter) Exceeding pre-COVID sales and profit levels Net sales Net sales (Film Packaging Business) Net sales (other businesses) Operating profit (Million yen) (Paper Products Business) 2,976 2,595 3,000 2,044 1,229 1,459 2,000 1,000 50,000 44,878 0 44,284 39,617 6,489 40,00
Slide 9: Sales Composition
Sales Composition Net sales by business 1.1 3.1 0.4 （単位：％） Second quarter of year ended December 31, 25.9 16.3 4.8 6.2 4.7 2.2 3.8 3.2 28.3 2022 Second quarter of year ending December 31, 27.1 15.8 4.8 5.8 1.3 5.0 2.9 2.1 3.8 4.10.4 27.0 2023 Food products Apparel Department stores Supermarkets and
Slide 10: Paper Products Segment
Paper Products Segment Business environment Trends in net sales and operating profits Department store sales were up nationwide for 16 consecutive (Million yen) months (source: Japan Department Stores Association). Domestic Net sales (left axis) Operating profit (right axis) tourism consumption by
Slide 11: Paper Products Segment (Paper Bags)
Paper Products Segment (Paper Bags) Business environment Trends in net sales and operating profits Demand for paper shopping bags is recovering in parallel with Net sales (left axis) Operating profit (right axis) (Million yen) increasing personal consumption, tourism, and inbound demand. Demand
Slide 12: Paper Products Segment (Paper Cartons)
Paper Products Segment (Paper Cartons) Business environment Trends in net sales and operating profits Growing demand for primary paper containers for food products, Net sales (left axis) Operating profit (right axis) (Million yen) convenience stores, and fast food, keeping pace with growth in the
Slide 13: Paper Products Segment (Corrugated Boxes)
Paper Products Segment (Corrugated Boxes) Business environment Trends in net sales and operating profits Decreasing demand for corrugated boxes due to purchase hesitancy as Net sales (left axis) Operating profit (right axis) (Million yen) prices rise and decreased Japanese exports as a result of p
Slide 14: Film Packaging Segment
Film Packaging Segment Business environment Trends in net sales and operating profits Growing environmental consciousness is leading to increasing Net sales (left axis) Operating profit (right axis) (Million yen) requests for proposals for eco-friendly packages such as those 10,000 2,000 using les
Slide 15: Other Businesses
Other Businesses Business environment Trends in net sales and operating profits Demand for in-store supplies and office supplies used in the Net sales (left axis) Operating profit (right axis) (Million yen) department store industry is recovering as department store sales 10,000 2,000 rebound Gi
Slide 16: Balance Sheet
Balance Sheet (Million yen) Year ended Second quarter of year ending December 31, 2022 December 31, 2023 Actual Actual Assets 94,365 93,831 Current assets 61,484 55,565 Non-current assets 32,881 38,266 Property, plant, and equipment 23,729 27,011 Intangible assets 1,044 2,462 Investments and other a
Slide 17: Cash Flow
Cash Flow (Million yen) Second quarter of year ended Second quarter of year ending Main items December 31, 2022 December 31, 2023 Actual Actual Cash flows from operating activities 4,449 5,066 Profit before income taxes 2,060 3,129 Depreciation and impairment losses 1,133 1,014 Cash flows used in in
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 Growing sales and profits by delivering environmental, social, and economic value in response to changing markets (Million yen) Year ended Year ending December 31, 2023 December 31, 2022 Previous forecast Forecast of business Forecast YoY Actual (announced results chang
Slide 20: Trends in Consolidated Business Results
Trends in Consolidated Business Results (Million yen) Revised forecast Year ended Year ended Year ended Year ended for year ending December 31, December 31, December 31, December 31, December 31, 2019 2020 2021 2022 2023 Net sales 95,502 78,445 79,690 89,060 97,000 Operating profit 6,850 3,275 4,144
Slide 21: Major Factors Underlying Projected Changes in Operating Profit
Major Factors Underlying Projected Changes in Operating Profit Increased profits due to higher sales volumes, mainly of paper products, and improved earnings Increased Higher average Higher raw Higher other Higher labor Higher Higher other (Million yen) sales sale prices material costs manufactur- c
Slide 22: 3. Promoting sustainable management
3. Promoting sustainable management 21
Slide 23: The Pack Group's management policy
The Pack Group’s management policy In 2023, we formulated a new management policy reflecting the social and business environment, establishing the purpose of our existence and our Basic Policy on Sustainable Management. Mission to bolster social prosperity and creating satisfaction Purpose of our ex
Slide 24: Promoting sustainable management
Promoting sustainable management Basic policy Identifying five themes and 12 materiality items As is expressed in The Pack Group’s corporate motto, we are Five themes 12 materiality items passionate and dedicated to our partnership in all our activities. Promoting eco-friendly product planning and
Slide 25: 4. Progress on the Medium-Term Management Plan
4. Progress on the Medium-Term Management Plan 24
Slide 26: Overview of the Medium-Term Management Plan (FY2023-2025)
Overview of the Medium-Term Management Plan (FY2023-2025) Slogan Evolution—Start of purpose-based management and Sustainable Management Consolidated net sales: 107.0 billion yen; operating profit: 7.0 billion yen FY2025 targets ROE: 8% or higher; ROIC: 8% or higher New Medium-Term Management Plan (F
Slide 27: Progress on growth strategies in the food products market
Progress on growth strategies in the food products market Progress on quantitative targets Evaluation of efforts in progress (100 million yen) Expanding sales of primary containers for food products ◎ FY2023 Developing materials and processes to contribute to lessening environmental impact, ◎ FY20
Slide 28: 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 Progress on quantitative targets Evaluation of efforts in progress (100 million yen) FY2022 FY2023 FY2025 Enhancing sales of delivery bags to contribute to improved shipping efficiency by customers ○ Full-year re
Slide 29: Progress on growth strategies in the general distribution, retail, and other markets
Progress on growth strategies in the general distribution, retail, and other markets Progress on quantitative targets Evaluation of efforts in progress (100 million yen) Further solutions sales to grow our market share in paper bags and promote the shift to paper FY2023 ◎ FY2022 FY2025 use results
Slide 30: Progress on human capital strategy and financial strategies
Progress on human capital strategy and financial strategies Human capital strategy Financial strategies Diverse human Emphasis on career hiring Promoting allocation of funds to investment in growth resources Promotion of women in the workplace (percentages of Investment in 1. Capital investmen
Slide 31: 5. Reference Materials
5. Reference Materials @® THE PACK CORPORATION 30
Slide 32: 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 *Moved May 2023 Lines of Planning, manufacturing and sale of paper bags, folding paper ca
Slide 33: New head office building
New head office building New address 9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, Osaka Prefecture Site area: 1,689.89 m2 Coverage/capacity ratio: 60/300 Overview of Building area: 1,066.05 m2 Total floor area: 5,514.55 m2 new building Structure, size: steel frame, seven floors ZEB certification
Slide 34: 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 35: 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 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 36: 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 37: The Pack's Strengths (1)
The Pack’s Strengths (1) Strength Specifics Second quarter of year ending December 31, 2023 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, ap
Slide 38: The Pack's Strengths (2)
The Pack’s Strengths (2) Strength Specifics 2. A total packaging (Full support structure) solutions provider Solutions proposed by joint efforts of the sales, research and planning, engineering, and design sections (Thorough expertise and access to large body of information) Operating one of Jap
Slide 39: 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 40: 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 41: 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 initiatives and waste volumes and to develop eco-friendly products. W
Slide 42: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics In 2000, we established an independent The Pack Forest® Environment Fund and launched 2. Activities of The Pack volunteer activities to plant and thin forested areas. Forest® Environment We contribute a portion of the sales from eco-friendly products to
Slide 43: ESG Initiatives (2)
ESG Initiatives (2) Initiatives Specifics 2. Activities of The Pack The Pack Forest No. 9 in Fujimi, Nagano Prefecture was launched in 2023 Forest® Environment In support of Nagano Prefecture’s forest fostering project, we designated a 1.8 ha site in Fujimi, Suwa-gun, Nagano Prefecture as “The Pac
Slide 44: 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 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 Higashi- 4. Social contribution Osaka, we organize hands-on manufacturing classes at elementary schools. activities Supporting the Kansai Philharmonic Orchestra Donatio
Slide 46: 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, 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