Oji : Integrated Report 2025

‌

OJI GROUP

INTEGRATED REPORT 2025

‌Management Philosophy, Purpose

Management Philosophy

Creation of Innovative Value

Innovation is essential for the Oji Group to make a big leap forward. Changes must take place in the research and technological development leading up to revolutionary new products. At the same time, our organizational systems and the behaviors of each and every employee need to be transformed. We will promote "challenging manufacturing" based on novel ideas and fulfill society's latent needs.

Contribution to the Future and the World

The Oji Group comprises a diverse range of businesses, and we have grown into a global company. The Group will continue to provide innovative value to all countries, regions, and societies and create a new future through proactive global expansion in Asian and other countries.

Harmony with Nature and Society

Resource circulation based on forest resources is the foundation of the Oji Group. We will advance our initiatives such that the business activities themselves contribute to

a sustainable society. The initiatives include using vast areas of the company-owned forests in and outside Japan for multiple purposes and reducing the environmental burden at manufacturing sites.

Purpose

Grow and manage the sustainable forest, Develop and deliver the products from renewable forest

And

Oji will bring this world a brighter future filled with hope

The forest grown and managed sustainably not only absorbs and fixes carbon dioxide, but also mitigates floods, cultivates water sources such as water purification and prevents natural disaster in addition to its contribution to biodiversity, healing and health enhancement of people.

The products derived from wood utilizing forest resources are made of renewable materials and able to substitute for plastic, films and fuel derived from fossil resources.

Oji Group will confront global warming and environmental issues, and bring this world a brighter future filled with hope by growing and managing the sustainable forest and by developing and delivering the products utilizing renewable forest resources.

Renewal of Global Brand Mark and Tagline

We are renewing the OJI Global brand mark and tagline to "Express commitment to transformation" outlined in the Long-term Vision and to "Drive transformation" by fostering a sense of unity across the entire Group.

Behind the letters "OJI" in the mark, there is a vast forest and rich natural landscape, representing the Oji Group's commitment to growing forests and utilizing forest resources to enhance people's lives. In addition, the three colors used express the flexibility and friendliness of diverse personalities shining brightly.

The tagline "Dedicated to Sustainability" is a straightforward expression of the Oji Group's future direction, as stated in the Long-term Vision 2035.

Oji Group Integrated Report 2025 01

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Contents

03 Message from the CEO

08 The Oji Group's Value Creation

Business Overview 33

Industrial Materials Business 34

Household and Consumer Products Business 36

Nature Positive Carbon Neutral Circular Economy

60 Corporate Governance 81

62 Dialogue with the Capital Markets 89

64 Risk Management 90

History of the Oji Group's Value Creation 09

At a Glance 11

Global Expansion 12

13 Medium- to Long-term

Functional Materials Business 38

Forest Resources and Environment 40

Marketing Business

Printing and Communications Media Business 42

Innovation 44

Responsible Raw Materials Procurement 66

Respect for Human Rights 67

Ensuring Workplace 68

Safety and Health

Compliance 91

92 Data Section

Financial Highlights 92

Growth Strategies

Message from the CIO Innovation Strategies

44 69

45

Strengthening Management Foundations

Financial Data 93

Non-financial Data 94

Management Plan Evolution 14

Long-term Vision 17

Medium-term Management Plan 2027 19

Message from the CFO 23

Utilization of Management Resources 26

Logic Tree 27

New Portfolio Domains 28

Sustainable Packaging 29

Forest Biomass Business 31

Intellectual Property Strategies 49

50 Sustainability

Sustainability Governance 51

Material Issues 52

Environmental Action Program 2040 55

The Oji Group Biodiversity 56

Commitment / No Deforestation and

No Conversion Commitment

Sustainable Forest Management 57

Message from the General Manager, 70

Human Resources Division

Human Resource Strategies 71

Digital Transformation Strategies 75

Message from the Chair of 76

the Nomination and

Compensation Committees

Message from Independent 78

Outside Audit &

Supervisory Board Member

Corporate Officers 79

Editorial Policies 95

Corporate Data / Stock Information / 96

External Evaluation

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OJI GROUP

INTEGRATED REPORT 2025

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Cover Design

The arc positioned at the bottom right is the "GLOBAL ARC," the support graphic of our renewed Global brand mark The colored segment forming the arc is part of a larger circle, symbolizing that we are members of the Earth and united as part of the Oji Group, expressing our collective commitment to corporate activities.

Oji Group Integrated Report 2025 02

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CEO

Building a Sustainable Circular Society with Forests

What is needed now more than ever is to create a sustainable circular society together with forests.

We grow forests, utilize their resources, and then grow them again̶continuing the cycle of nurturing and utilization.

Oji will always move forward with forests, striving to realize a sustainable global environment and a truly circular society.

Hiroyuki Isono

Oji Holdings Corporation Representative Director of the Board, President

CEO

Oji Group Integrated Report 2025 03

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CEO

Now that FY2024, the final fiscal year of our previous Medium-term Management Plan, has ended, I am reminded of the difficulty of responding to rapid unexpected changes in the business environment. I became president in April 2022. The Russian invasion of Ukraine began the previous February, but there is still no end to this conflict in sight. The same is true for the subsequent problems in Israel and Gaza. From an economic perspective, there is also increasing uncertainty and existing premises have begun to be shaken, including the faltering Chinese economy, changes to tariff policies in the United States following the start of the second Trump administration this year, and foreign exchange trends.

In the paper market, demand was expected to grow in the domestic paperboard market when I became president, but instead it peaked around mid-2022, and then the situation completely changed as demand stopped growing for corrugated container and other types of paperboard, as it had with printing paper. Overseas, the supply-demand situation has changed considerably from our expectations, including excess supply in Southeast Asia, where we previously operated a steady business, owing to the aggressive entry of Chinese papermakers. Climate disasters have also become increasingly severe, and in February 2023, a major Oji mill in New Zealand sustained flooding damage from cyclone Gabrielle, requiring 18 months for a full recovery.

In terms of business management, our response to these rapid and unexpected changes in the external environment

was insufficient. We must reflect deeply on the fact that we were unable to put sales and profits on a trajectory to achieve our targets in the medium-term plan. I am strongly aware of the need to be strong enough to withstand

changes in the environment, and transform into a company able to respond to change.

On the other hand, there were strong calls from the capital markets for management that is conscious of the stock price. I realized the fact that, owing to our corporate structure, we have overly focused on profit and loss

in internal meetings, and have lacked a balance sheet perspective. I have been acutely aware of the need to completely overhaul our capital structure, slim down our assets, and transform into a corporate structure that works to enhance capital efficiency. While I myself have completely shifted my awareness, we also announced "initiatives to enhance corporate value" at the end of 2023, marking

the shared commitment of the entire management team to switch to business management that boosts capital

efficiency and lifts ROE, and since then, we have focused on these efforts in numerous internal discussions.

In May of this year, we announced our new Medium-term Management Plan starting in FY2025, as an expression of the change in our awareness.

The fact that we have stopped announcing net sales targets represents a major shift. We are no longer in an age where the pursuit of sales will open the path to the next

stage. In addition, because nationality has no bearing on our aim to optimize businesses across the Oji Group as a whole, we have removed the overseas sales ratio from our management indicators.

To enhance ROE, we must increase profitability, while also slimming down our net assets, which have grown substantially over the past few years.

We are not in an age where markets are steadily growing, and so long as we make something, people will buy it.

To increase profit margins, we must build a structure for operating our businesses that is capable of identifying market needs and achieving differentiation. We previously

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CEO

strengthened our organization vertically with the COMPANY system, but now we have shifted from an organizational structure that aims to optimize each Group company

and COMPANY to one that aims to "optimize the whole," through the addition of horizontal functions, and stronger information sharing and mutual cooperation between COMPANIES. The CFO, CSO, COO, CTO, and CIO will

work closely together to operate our businesses, based on an accurate understanding of changes in social and market trends. In this way, I think we will be able to differentiate ourselves by capturing needs that are not yet visible, instead of just developing products to match needs that are already apparent.

On the other hand, we will also endeavor to further reduce costs, while also passing on increased costs to prices, and exit businesses with low profitability. There is no reason to cling to unprofitable businesses. We will clearly distinguish without faltering between growth businesses and those where we will take a different path, including withdrawal or sale, as we work toward our vision of a business structure capable of targeting a Group-wide ROE of 8% by FY2027. Beyond that, we will aim for 10% ROE in the future, with the desire to restore our P/B ratio to more than 1x as part of this process.

When looking ahead to our long-term future, it will be important not just to extend current trends into the future but also to forecast the future with non-continuous

thinking, taking megatrends into consideration, then work backward from there to think about the present. Considering the example of the move away from digital textbooks overseas, I think the value of paper will remain important

as a medium for transmitting information, but we will slim down our operations in this area in the future, in line with the global transition toward digital devices. On the other hand, looking at global trends, if we take economic policies in the United States as an example, their direction could change substantially depending on whether Democrats or Republicans come into power every four years.

This year, I exchanged views with business leaders from around the world at the World Economic Forum Annual Meeting in Davos. I was reminded of the fact that climate change remains a major global issue. While debate continues in various forms, there is no change to the megatrend of pursuing sustainability across society.

Start of business portfolio transformation

When thinking about businesses that will play a core role in the Company's future, they all involve creating products that use sustainable forest resources, namely sustainable packaging and the forest biomass business. Based on megatrends, we firmly believe that these markets will continue to grow, and we have thus actively invested in them for growth. In sustainable packaging, we have laid the foundations for an integrated packaging business in the future, including making the Adampak Group, which operates a label business in Southeast Asia, part of the Oji Group, as well as the acquisition of Walki Holding Oy and

IPI S.r.l. in Europe. In the forest biomass business, we have been preparing for commercialization, including bringing

a wood-derived sugar solution pilot plant and ethanol pilot plant online in December 2024 and March 2025,

respectively. The scale of equipment in these pilot plants is close to that of commercial plants. Most products that have conventionally been made with fossil resources can be made with wood-derived sugar solution and ethanol. Accordingly, we will continue R&D, while also overcoming cost issues,

as we pursue the potential of these materials as sustainable alternates for fossil resources, in applications from SAF (sustainable aviation fuel), of course, through tires, fibers, plastic, fertilizer and agrochemicals, food and feed, and even biopharmaceuticals. At the same time, we plan* to acquire an advanced biorefinery company in Europe, and will work to quickly make this potential a reality.

In both sustainable packaging and the forest biomass business, we will create high-value-added products that differ from commodity products. The growth of these businesses will also contribute to higher profitability across the entire business portfolio.

In our Purpose, we set forth the following: "Grow and manage sustainable forests, develop and deliver products from renewable forests, and Oji will bring this world a brighter future filled with hope." The continued use of products derived from fossil resources will not contribute to a sustainable society. I believe that a sustainable society will be

*In September 2025, we entered into a share transfer agreement to acquire all shares of AustroCel Hallein GmbH. AustroCel is based in Austria, and operates a business producing and selling dissolving pulp and bioethanol.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CEO

created when we utilize renewable forest resources to make sustainable products based on those materials, and replace products derived from fossil resources. I truly believe that contributing to the sustainability of the Earth and society is exactly what drives the maximization of our corporate value.

Based on "Environmental Vision 2050," we have established the Environmental Action Program that sets forth targets to achieve by 2030 and 2040 in relation to environmental issues. Under these programs, we are taking action on climate change, contributing to a nature-positive world, promoting a circular economy, reducing pollutants, and engaging with stakeholders. Among these, regarding the expansion of nature positive and initiatives for the healthy growth and conservation of forests in particular, we are participating in the International Sustainable Forestry Coalition (ISFC) (P.96)

, a global coalition of forest-related organizations. As part of these activities, we are creating rules for natural capital accounting (PP.60-61) and pursuing nature-based solutions. In particular, the 30th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP30) is to be held in November of this year, in Belém, Brazil, in the Amazon basin. We consider this an opportunity to provide solid information on the multi-faceted functions of forests and the value of nature-based solutions.

Forests perform various functions, including carbon dioxide absorption, the conservation of biodiversity, water resource

cultivation, and landslide prevention. When rain falls, it eventually reaches the foot of the mountains after passing through the ground and forests. In this way, nature purifies the water, but if we do not properly manage forests, we will not have clean water at the foot of the mountains.

For more than a century, the Oji Group has believed that "those who use trees are responsible for planting them," and we have earnestly continued our efforts to manage and maintain forests. We already manage company-owned

forests covering 636,000 ha around the world, equivalent to approximately three times the area of Tokyo.

In March 2025, we partnered with New Forests (Australia) to launch a forest fund aimed at expanding production forests in Southeast Asia, North America, Latin America, and Africa. The expansion of production forests will also contribute to the absorption and fixing of CO2by forests.

I also feel strongly that forest conservation efforts have a substantial impact from the perspective of the conservation of biodiversity, as orangutans, a critically endangered species, have been confirmed in company-owned forests in Indonesia, along with a wide variety of species of plants and animals in Brazil. In Brazil, we are also creating ecological corridors to restore wasteland and connect the fragmented habitats of wild animals.

These efforts to contribute to nature positive are an important activity that we have long been engaged in, as the operator of businesses rooted in forest resources. We

think that nature positive, in which we grow our own trees to provide materials for our businesses while maintaining and managing nature, and perform reforestation after logging,

is important. These values have been our corporate culture with roots that stretch back over a century, and I firmly

believe that they will not change at all even over the next century.

Building solid management foundations

Human resources are the most important aspect of our management foundations. Last fiscal year, I spoke directly with more than 300 employees at town hall meetings (P.72).

As we are rapidly changing our production structure at production sites in Japan in particular, the meetings have reminded me of issues associated with

the change and brought many things to our attention. We are reflecting actual feedback from frontline workers and promoting digital transformation while also automating mills. At the same time, we are also making operations more efficient in management and support divisions through automation and labor-saving measures.

Town hall meeting (August 2024, at the Oji Paper Yonago Mill)

‌Message from the CEO

Corporate culture is a reflection of human capital. I am constantly focusing on the cultivation of a corporate culture with high psychological safety and ensuring that all employees can feel fulfilled at work in a comfortable workplace environment. In particular, the objective of our organizational changes is to foster a sense of unity as a group, by further stimulating information sharing, not just vertically but also horizontally. Accordingly, we intend

to focus on cultivating an open corporate culture that encourages healthy dialogue and cooperation in particular.

As mentioned, we have also made organizational changes aimed at optimizing governance across the Oji Group as a

whole. We have promoted separation between management supervisory and executive functions, having already slimmed down our Board of Directors.

At the same time as the initiation of our new Medium-term Management Plan, we also revised performance-linked and stock-based compensation for Directors of the Board. Previously, the performance-linked component of director compensation was linked only to earnings standards. When formulating our Medium-term Management Plan, however, we focused more on the perspective of shareholders than before. We added balance sheet items related to ROE

as financial indicators, as well as non-financial indicators such as the environment and employee engagement survey scores. We believe that clarifying the link between director compensation and share value will further enhance managementʼs awareness of the share price (P.87).

We also determined that the Nomination Committee and the Compensation Committee will consist only of Outside Directors of the Board (PP.76-77).

Yet efforts to enhance governance are still only halfway there. We will continue considering the structure of Outside Officers, as well as the selection of the Chairman of the Board.

We have also executed numerous M&A deals through growth investment and are taking steps to strengthen global risk management and internal controls. As part of PMI, we communicate our governance standards, including approval authority at Oji Holdings, to acquired companies on the

first day after the acquisition is completed and require that they adhere to these standards. We also properly share governance-related rules with human resources who are assigned or seconded to new Group companies, thus strengthening both global governance and Group governance.

To our stakeholders

I believe that today, we stand at a major crossroads in its long history. This is because we are in a business conversion phase, including the shift in businesses that

previously generated earnings from paper as an information transmission media, toward the forest biomass business and packaging from trees, not just paper.

Reading the memoirs of our founder, Eiichi Shibusawa, he describes how he established this business with the strong will not to give up and to accomplish his goal, whatever it takes, based on his belief that by transmitting information, paper plays an extremely important role in the development of Japanʼs economy and culture. This spirit is also important to us today. If I may borrow Eiichi Shibusawaʼs words to express myself, I have a strong desire to accomplish the transformation of our business portfolio.

In February 2023, I had a conversation with Mr. Ken Shibusawa, the great-great-grandson of Eiichi Shibusawa and CEO of Shibusawa & Company. During our dialogue, we reflected on the question: ʻIf Eiichi Shibusawa were alive in this era, what would he strive to accomplish?ʼ Mr.

Shibusawa suggested that he would likely say, ʻWe must act to solve the global environmental crisis.ʼ I wholeheartedly agree.

While maintaining Eiichi Shibusawaʼs strong will from his time, we will look toward the future as we continue to

operate and develop businesses rooted in forest resources and transform our business portfolio. We will work to enhance ROE and achieve sustainable growth for the Oji Group, while also achieving sustainability in society.

‌The Oji Group's Value Creation

09 History of the Oji Group's Value Creation

1. At a Glance

2. Glance Expansion

‌History of the Oji Group's Value Creation

Since its foundation in 1873, the Oji Group has achieved steady growth through the expansion of its business fields over 150 years. We have accurately grasped the changes of the times and flexibly transformed our business structure while sincerely addressing the social needs demanded in each stage. In recent years, aiming for contribution to the attainment of a sustainable society, we have been actively rolling out the technologies cultivated in our domestic business to the global market.

Period of Foundation 1873-1909

Period of Establishment 1910-1945

Period of Development 1946-1972

Period of Great Change 1973-1999

Birth of the Modern Paper Manufacturing Industry Establishment of a Domestic Supply Structure Efforts toward New Technologies Paper Diversification and Response to Environment

The origin of the Oji Group dates back to the establishment of Shoshi Kaisha, a paper manufacturing company, advocated by Eiichi Shibusawa, the founder of the modern Japanese economy. Shoshi Kaisha was established in 1873, based

on Shibusawa's belief that the "paper and printing businesses are the source of civilization."

This company would eventually become Oji Paper and would underpin the

growth of industry throughout Eiichi Shibusawa

To meet burgeoning demand for paper, we ventured to Hokkaido in search of the forests, water, and the vast land resources needed for paper manufacturing. We brought together

the best technologies and opened the Tomakomai Mill in 1910. We

thus established a domestic supply structure for newsprint, breaking free from reliance on imports.

Amid Japan's postwar reconstruction, with a view to producing high-quality paper quickly and in large quantities, we turned to a continuous digester, which was unproven at that time but highly productive. We introduced the equipment at the Kasugai Mill in 1951. Furthermore,

in 1957, we developed technology for removing ink from old newspaper, opening up major paths for the use of

The growing abundance of people's lives brought major changes in their lifestyles. In line with the growing expectations of paper, we developed new products, such as boxboard, thermal paper, and household paper. We also began expanding globally in search of raw

materials for paper manufacturing and new markets while placing efforts into countermeasures against pollution at our paper mills.

Events in the Oji Group

1873 Shoshi Kaisha is established 1933 Merges with Fuji Paper and Karafuto Industries

An era of Great Oji

1949 Splits into three companies

(Tomakomai Paper, Jujo Paper, and Honshu Paper)

1960 Trade name changes to Oji Paper

1979 Merges with Nippon Pulp Industries

1989 Merges with Toyo Pulp

the whole of Japan.

(from the collection of the

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Shibusawa Memorial Museum)

Tomakomai Mill

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(from the collection of the Paper Museum)

recovered paper.

Kasugai Mill in the 1960s Sales of toilet rolls, tissue paper,

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and paper towels began in the 1970s

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Events in Society

1868 Japan's Westernization era

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1894 Sino-Japanese war

Production volume 2 Trends in Oji Group paper, paperboard, and pulp output in Japan and overseas

(Million tons)

• Paper output (domestic) ■ Paperboard output (domestic)

Production of woodfree paper starts

Production of coated paper and kraft paper starts

Production of corrugated

containers starts

Thermal paper production starts (former Kanzaki Paper Manufacturing) High-grade boxboard production starts (former Nippon Pulp Industries)

Production of household paper (tissue paper and toilet rolls) starts

Production of non-woven fabric

(Oji Kinocloth) starts

0

1873 1874 1875

1910 1911 1912

1931

1935 1936 1946

1950

1955

1960

1965

1970

1975

1979 (FY)

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1904 Russo-Japanese War

1918 End of World War I 1930-1931 Showa Depression 1945 End of World War II

1955 Postwar economic reconstruction

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1964 Tokyo Olympics

1973-1974 1973 Oil Crisis

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1978-1982 1978 Oil Crisis

Message from the CEO The Oji Groupʼs Value Creation

History of the Oji Group's Value Creation

Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Period of Reform 2000-present

Period of Creation

Shift in the Business Structure and Further Global Deployment

Paper production volume has exhibited a downward trend since 2008. Amid the ongoing contraction of the domestic market, we accelerated our overseas expansion, focusing on Southeast Asia.

In recent years, we have further strengthened the global expansion of our sustainable packaging business by acquiring Italian company IPI S.r.l., which operates in the liquid packaging carton business, in May 2023, and Finland's Walki Holding Oy, which possesses advanced technologies in the plastic-reducing packaging field, in April 2024.

Furthermore, we are enhancing the functionality of forests, the core of our business, while also focusing on the development of new wood-derived materials that maximize the core technologies we have cultivated over many years. We are working to develop the forest biomass business as a next-generation core business. As part of this effort, we leveraged the infrastructure at Oji Paper's Yonago Mill to launch Japan's largest pilot plant for wood-derived sugar solution in December 2024 and for wood-derived ethanol in March 2025.

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Sustainable Packaging P.29 Industrial Materials Business P.35 Forest Biomass Business P.31

Events in the Oji Group

1991 Acquires Pan Pac Forest Products

1993 New Oji Paper (merges with Kanzaki Paper Manufacturing) 1993 Albany Plantation Forest Company of Australia is established 1994 Quy Nhon Plantation Forest Company of Vietnam is established 1996 Oji Paper (merges with Honshu Paper)

2001 Oji Materia and Oji Container are founded

2004 Oji F-Tex is founded

2005 Acquires Morishigyo Group 2012 Acquires Celulose Nipo-Brasileira (Brazil)

2007 Jiangsu Oji Paper is established (China) 2014 Acquires Oji Fibre Solutions (New Zealand and Australia)

2010 Acquires GSPP Group (Malaysia) 2020 Oji Pharma is established 2011 Acquires Oji Papéis Especiais (Brazil) 2022 Acquires Adampak Group 2011 Acquires Harta Group 2023 Acquires IPI

2012 Transitions to a pure holding company structure 2024 Acquires Walki

2012 Oji Imaging Media is founded

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Events in Society

1991-1993 Bursting of the Bubble Economy

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1997 Kyoto Protocol

2008 Global Financial Crisis

2016 Paris Agreement comes into effect 2020-2023 Global COVID-19 pandemic 2021~ Russia-Ukraine crisis

(Million tons)

• Paper output (domestic) ■ Paperboard output (domestic)

• Paper output (overseas) ■ Paperboard output (overseas) ■ Pulp output (overseas)

Full-scale overseas forest plantation business starts Production of disposable diapers starts

0

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Production volume 10

Trends in Oji Group paper, paperboard, and pulp output in Japan and overseas

1980

1985

1990

1995

2000

2005

2010

2015

2020

2024 (FY)

Message from the CEO The Oji Groupʼs Value Creation

At a Glance

Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Start of business

Number of Group Companies

Number of employees of the

Percentage of

Oji Group Businesses in Figures

(Consolidated)

consolidated Group

overseas employees

• Household and industrial materials

25.8%

Share of domestic

Domestic

No. 1

94 123

Domestic Overseas

production volume of paperboard

1873

companies companies

39,136 58.5%

(2024) Source: Japan Paper Association

Domestic

No. 2

22.3%

Share of domestic

Net sales (consolidated)

¥ 1,849.3 billion

Overseas sales ratio

40.8%

Company-owned forest area

Operating profit (consolidated)

¥ 67.7 billion

Dividend payout ratio

50.7%

(Dividend per share ¥24)

Percentage of female managers

(16 companies in Japan)

production volume of corrugated container

(FY2022) Source: Yano Research Institute Ltd.

• Functional materials

  Share of domestic

  sales volume of thermal paper

  Approx. 30%

  (FY2024) Source: In-house research

  
  
  
  
  
  

  One of Japan's largest private forest owners

  • Forest resources and Global

    Domestic Overseas

    Total

    environment marketing No. 9

    Market pulp

    188,000 ha 448,000 ha 636,000ha 4.9%

    production capacity

    (FY2024) Source: In-house research

    
    
    
    
    
    

    Forest certification acquisition rate

    Recovered paper utilization ratio (Japan)

    Domestic pulp and paper company sales

    Major global pulp and paper companies' sales

    
    
    
    
    
    

    (2023)

• Printing and communications media

Share of domestic production volume

Domestic Overseas

Newsprint Printing and

Approx. 30%

100% 96% 67.4%

No. 1

Source: Japan Paper Association

No. 5

Source: Paper 360°

communication paper Approx. 20%

(2024) Source: Japan Paper Association

Note: Data for FY2024 (as of March 31, 2025), unless otherwise specified.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

At a Glance

Global Expansion

The Oji Group maintains 99 production sites in Japan and 106 sites in 24 countries overseas, and is developing a wide variety of products for the global market.

Starting with the commencement of pulp production in Brazil and New Zealand in the 1970s, we have advanced our overseas operations and grown into a global company with an overseas sales ratio of 40.8%.

We will continue to expand production, sales, and services, particularly in our priority regions of India and Southeast Asia.

China

Production sites 9

1

Industrial materials 6

Production sites of major Group Companies

North America

Production sites 1

Household and consumer products

Functional materials 1

Functional materials 2

1

1

Forest resources and environment marketing

Japan

Production sites 99

Europe

Production sites 19

Printing and communications media

Industrial materials 63

6

Household and consumer products

Functional materials 9

16

Forest resources and environment marketing

Printing and 5

South America

Production sites 4

3

Functional materials 1

Industrial materials 18

Functional materials 1

Other Asia

Production sites 57

2

Industrial materials 40

communications media

North America

¥57.5 billion

Oceania

¥79.8 billion

Europe

¥137.9 billion

South America

¥30.5 billion

Others

¥9.5 billion

Forest resources and environment marketing

Household and consumer products

Functional materials 11

3

Forest resources and environment marketing

China

¥177.7 billion

FY2024

Net sales

¥1,849.3

Others 1

Oceania

Production sites 16

Industrial materials 9

Other Asia

¥261.5 billion

billion

(Overseas sales ratio: 40.8%)

Japan

7

Forest resources and environment marketing

Net sales by region for FY2024

(Sales are based on end customer location)

¥1,094.8 billion

*1 As of June 30, 2025, excluding sales companies. Production sites engaged in multiple businesses are duplicated in the breakdown of the number of production sites by business.

*2 Scope of compilation: Domestic: major consolidated subsidiaries; Overseas: consolidated and non-consolidated subsidiaries and equity-method affiliates.

Oji Forests all over the world P.57

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Medium- to Long-term Growth Strategies

14 Management Plan Evolution

17 Long-term Vision

19 Medium-term Management Plan 2027

23 Message from the CFO

26 Utilization of Management Resources

27 Logic Tree

28 New Portfolio Domains

29 Sustainable Packaging

31 Forest Biomass Business

33 Business Overview

34 Industrial Materials Business

36 Household and Consumer Products Business

38 Functional Materials Business

40 Forest Resources and Environment Marketing Business

42 Printing and Communications Media Business

44 Innovation

44 Message from the CIO

45 Innovation Strategies

49 Intellectual Property Strategies

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Management Plan Evolution FY2013-2021

(¥ billion)

• Consolidated operating profit (¥ billion)

  ROE (%)
  Overseas sales ratio (%) （％
  
  

  0 0

  30

  60

  90

  120

  150

  31.0

  27.8

  28.2

  32.0

  110.2

  29.9

  106.1

  29.3

  33.5

  120.1

  35

  30

  25

  20.3

  22.8

  72.0

  84.8

  20

  70.2

  70.8

  57.3

  43.9

  10.9

  15

  10

  5.9

  6.7

  2.6

  5.6

  7.7

  8.5

  6.9

  2.1

  5

  2013

  2014 2015

  2016

  2017 2018

  2019

  2020 2021

  (FY)

  Key KPIs	Targets	Results			Targets	Results			Targets	Results
  	Consolidated operating profit ¥90.0 billion Overseas sales ratio 26.0% ROE 7.0% Interest-bearing debt ¥700.0 billion	¥72.0 billion 27.8% 2.1% ¥777.7 billion		Consolidated operating profit ¥100.0 billion Overseas sales ratio 35.0% ROE 8.0% Interest-bearing debt ¥700.0 billion		¥110.2 billion 32.0% 7.7% ¥620.6 billion		Consolidated operating profit ¥150.0 billion or more Overseas sales ratio 40.0% ROE 10.0% Net D/E ratio 0.7 times maintained		¥120.1 billion 33.5% 10.9% 0.7 times
  Basic Policies	Drive Group-wide transformation to adapt to changes in the business environment, aiming to become an "innovative value-creating company"			Expand business and promote selection and concentration to build a diverse portfolio and achieve sustainable growth				Aim to become a global corporate group that consistently earns more than ¥100 billion in annual consolidated operating profit through "contribution to a sustainable society."
  Review	high-value-added new materials and expanding new businesses, including our dissolving pulp (DP) and energy business.

  • Deepening of the core businesses

  • Development of new businesses and products

  • Further expansion of overseas businesses

  • Expansion of overseas businesses

  • Concentration/advancement of domestic businesses

  • Enhancement of financial foundation

  • Profitability improvement of domestic businesses

  • Expansion of overseas businesses

  • Promotion of innovation

  • Contribution to a sustainable society

  • Operating profit for FY2015 increased significantly by ¥28.5 billion compared with FY2012. However, due to rising raw material and fuel prices and impairment charges on certain overseas businesses, targets for operating profit and ROE were not met.

  • We promoted business structure reform following the transition to a holding company structure in October 2012. In particular, the Company actively expanded its overseas business, with the overseas sales ratio increasing by 11.1 percentage points from 16.7% in FY2012 to 27.8% in FY2015.

  • In Japan, we focused on enhancing profitability through cost reductions and restructuring our production systems, as well as developing

  • Operating profit for FY2018 achieved the target of ¥100 billion. The target to reduce interest-bearing debt to ¥700 billion was achieved.

  • Focusing on the packaging business, we expanded overseas manufacturing sites and increased production capacity and efficiency, raising the overseas sales ratio from 27.8% in FY2015 to 32.0% in FY2018, an increase of 4.2 percentage points.

  • In Japan, we continued to focus on enhancing profitability through cost reductions and restructuring our production systems, as well as developing high-value-added new materials and expanding new businesses, including the cellulose nanofiber (CNF) and water treatment business.

  • Due to the effects of the COVID-19 pandemic (e.g., delay of capital investments and subsequent effects) as well as soaring fuel and raw material prices, we failed to reach our target for operating profit in FY2021, yet achieved record-high profits.

  • We strengthened and expanded our growth businesses in Japan (corrugated container, household paper, and renewable energy businesses) and overseas businesses.

  • We proactively developed our themes for innovation: "Environmentally friendly materials and products," "entry into the medical field," and "total solutions."

  • We formulated our Environmental Vision 2050 and Environmental Action Program 2030.

  
  
  
  
  
  
  
  
  

  Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

  Management Plan Evolution FY2022-2024

  Major Initiatives and Results of the FY2022-2024 Medium-term Management Plan Key KPI Targets and Results

  In FY2022-2024, we made progress in the shift to a promising business portfolio and streamlined production systems to align with demand trends, while expanding business activities that consider the global environment more than ever before.

  During the period of the previous Medium-term Management Plan, we advanced business expansion in growth markets centered on Southeast Asia and India, while also focusing on promoting our highly profitable and high-growth sustainable packaging business. We also advanced initiatives to create economic value from the public benefit functions of forests and develop new materials utilizing wood resources, working to cultivate future core businesses based on forests.

  We had set operating profit of ¥150 billion as a numerical management target. However, due to changes in the business environment, including sharp increases in raw material and fuel prices and labor and logistics costs, despite our sales efforts and cost-cutting initiatives, operating profit for FY2024 fell short of the target by more than ¥80 billion. (Business Overview PP.33-43)

  
  
  

  Meanwhile, we advanced our overseas business expansion and achieved our target of 40% for the overseas sales ratio. In addition, we maintained financial soundness, keeping the net D/E ratio at 0.7.

  Numerical management targets for FY2024

  Stable at 8% or more, 10% or more in the future

ROE target (Announced in December 2023)

FY2024 results

• Consolidated operating profit (¥ billion)

  ROE (%)
  Overseas sales ratio (right scale)
  
  

Main factors behind not meeting targets

(¥ billion)

150

2022 2023

1,500

0

30

60

90

120

37.6

40.8

40

34.9

84.8

30

72.6

67.7

20

10

5.1

4.3

0

6.3

Medium-term Management Plan

2024

（％

50

(FY)

• Global cost increases and economic downturn (labor costs, logistics costs, raw material and fuel prices)

• Insufficient price pass-through

• Decline in overseas prices (pulp, Southeast Asia)

• Impact of disasters (Pan Pac in New Zealand and others)

In FY2022-2024, the business environment for which the medium-term management plan was formulated changed significantly. Earnings deteriorated as various costs increased, including labor costs, raw material and fuel prices, and logistic service expenses, while we were not successful in passing these costs through to product prices. Furthermore, overseas businesses faced weakening pulp market conditions and sluggish demand due to economic slumps and delayed recovery, compounded by the impact of disasters such as that caused by a cyclone striking New Zealand.

Due to insufficient adaptation to these changes in the business environment, consolidated operating profit and profit attributable to owners of parent fell short of targets. Furthermore, while we continued to make proactive investments, asset efficiency deteriorated due to factors such as delays in achieving investment returns, resulting in a significant decline in ROE and failure to meet our target.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Management Plan Evolution FY2022-2024

Value Provided and Challenges Based on the Groupʼs Basic Policy

Investment and Cash Allocation (Three-Year Period of FY2022-2024)

Medium-term Management Plan

Cash In Cash Out

Dividends

¥50.0

billion

Results

Cash In Cash Out

Dividends

Strategic investments and upkeep CAPEX

¥486.4 billion

¥50.5

billion

Treasury stock buyback

¥29.3

billion

Regarding cash in, while cash flows from operating activities decreased significantly below plan due to factors such as reduced profits, the overall decrease was limited to ¥33.8 billion due to factors including the reduction of equity investments and an increase in interest-bearing debt.

As for cash out, we actively executed investments necessary for creating and expanding new core businesses, including the wood biomass and sustainable packaging businesses, as well as the domestic and international corrugated container businesses and the high-performance film business. Moreover, we invested in environmental initiatives, including the expansion of forest plantations, and advanced initiatives related to our vision, Dedicated to Sustainability. Furthermore, in addition to maintaining stable dividends, we have endeavored to enhance shareholder returns through treasury stock buyback.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Long-term Vision

The Oji Group has been developing business operations rooted in forest resources for more than 150 years. In recent years, addressing social issues such as global warming and other aspects of climate change, loss of biodiversity, and environmental pollution has become increasingly important.

By cultivating and preserving healthy forests, we not only produce renewable forest resources but also contribute to enhancing the multifaceted functions of forests. In addition, through products that utilize forest resources, we are able to replace fossil resource-derived materials and products, while supporting and enriching the lives of people around the world.

On the other hand, demand for paper is expected to shrink in Japan as the population declines. To enhance corporate value, it is essential to review the business portfolio in response to changes in demand structure, not bound by existing business models, and to enter new fields aligned with the

times. A strong business foundation is necessary to respond to such changes and drive initiatives forward. The Company prioritizes improving capital efficiency as the cornerstone supporting its business foundation, aiming to build a corporate structure that pursues environmental, social, and economic sustainability while effectively utilizing limited resources.

In this way, realizing a circular economy, expanding nature positive initiatives, and promoting a carbon-neutral society through business operations rooted in forest resources are the very essence of the Companyʼs Purpose. Based on the above considerations, we have established three basic policies: Improving Capital Efficiency, Portfolio Transformation, and Promoting Sustainability. Through these policies, we are Dedicated to Sustainability.

Initiatives aimed at solving social issues

Goals

Centralization of the Forest Biomass Business

Transform Portfolio

Expansion of the sustainable packaging business

Improve Capital Efficiency

Long-term Vision 2035

Realization of a circular economy

Expansion of nature positive

Maximizing corporate value

Dedicated to Sustainability

Strive to realize a sustainable society based on forests as a sustainable resource

Promote Sustainability

Promotion of carbon neutral

Healthy forest growth and conservation

Business activities rooted in forest resources

Social issues and megatrends

Climate change issues Intensification of natural disasters

Biodiversity loss

Environmental pollution (atmosphere, water, soil)

Population and food issues

International social and

economic divisions

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Long-term Vision

Portfolio Aimed for in the Long-term Vision

The Group will continue to steadily advance businesses that utilize renewable resources derived from forests. We will achieve differentiation and drive the sustainable growth of the entire Group through the development of products and businesses that accurately capture social needs. Furthermore,

through these initiatives, we will advance the transformation of our business portfolio, further strengthening and expanding our forest biomass business and sustainable packaging business as core businesses of the Company.

Resources from forests

Note: Forest resources are "sustainable" and "carbon-neutral" resources that can be renewable by forest plantation.

Business portfolio of the Oji Group (current to the future)

Oji will grow by Differentiation

Public benefit functions of forests

• Pharmaceuticals, Bioethanol,

Biomass plastics, films, Biomass photoresist etc.

Forest Biomass Business

Forest Biomass

Business

Other resources

Pulp

Pulp

• Added-value (DP, development of special use)

• Expansion to downstream businesses

• Renewable energy

• Water treatment

• Forest utilization service

Forest resources & environment marketing

Recycle

Packaging

Recovered paper

Specialty paper, functional materials

• Global business expansion in sustainable packaging that reduces plastic use,

  especially paper-based materials

• Expansion of the recycling business → Adding value to paper packaging

• To be the global top in niche markets by adding values and differentiation

• Capacitor film

Sustainable

Packaging

Household products

• Expansion in the healthcare area

Newsprint, printing paper ● Reallocation of resources due to declining demand

2025 2035

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Medium-term Management Plan 2027

Significance and Positioning of the Medium-term Management Plan 2027

Based on the roadmap toward the goal in our Long-term Vision, the Medium-term Management Plan 2027 is positioned as the preparation phase for strengthening our foundation. During this period,

we will prioritize management focused on capital efficiency improvement and continue these efforts beyond FY2028. Furthermore, we will enhance the profitability of existing businesses to expand

sustainable packaging and establish the forest biomass business (PP.31-32)

as a core business. This will initiate the transformation of our business portfolio while also implementing R&D investments for future evolution, thereby realizing our vision: Dedicated to Sustainability.

Medium-term Management Plan 2027 Briefing Session Materials

Preparation (Strengthening foundation)

Promotion (Transforming business portfolio)

Establishment (Achieving outcomes)

Backcasting

Focusing on capital efficiency improvement

Ongoing initiatives

Expansion of

Sustainable Packaging

Further expansion of

Business for Sustainability

Forest Biomass Business

Increasing profitability in as a core business

Profitability enhancement

of existing business

India and SE Asia

Business portfolio transformation

Commercialization of Forest Biomass Business

Biomass pharmaceuticals (for human)

Bioethanol

Further Evolution

R&D investment for

evolution

Sustainable packaging

Biomass pharmaceuticals (for animals)

Biomass plastic

Biomass photoresist

Dedicated to

Sustainability

Toward evolution

2027

2030

2035

CNF composite

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Medium-term Management Plan 2027

Medium-term Management Plan 2027 Outline and Numerical Targets Cash allocation

Through initiatives to strengthen profitability, we plan to generate cash flow from operations, aiming to

Over the three-year period starting in FY2025, we will conduct management focused on capital efficiency improvement as a preparation phase based on the basic policies of Long-term Vision 2035: Improving Capital Efficiency, Portfolio Transformation, and Promoting Sustainability. By solidifying our business foundation, we will enhance corporate value and achieve an ROE of 8%. In the future, we aim to achieve a 10% ROE through further improvements in capital efficiency.

create ¥500.0 billion over three years. In addition, as part of asset slimming, we will promote the disposal of holding shares and the sale of lease properties. Furthermore, while considering financial soundness, we will expand the net D/E ratio to 1.0 or less and utilize debt. We will invest the funds obtained through these measures in growth investments and shareholder returns. Specifically, we plan to invest a total of

¥320.0 billion in R&D and growth investments to create new businesses in the future and expand existing businesses with high growth potential. We will also work to enhance shareholder returns.

Long-term Vision 2035 Basic Policies

• Management focusing on capital efficiency

• Asset slimming

• Restructuring of capital composition

• Expansion and exploration of new/promising businesses

• Restructuring of low profitability businesses

• Promotion of carbon neutral

• Expansion of nature positive

• Realization of a circular economy

R&D

investment

Growth investment

Strengthen shareholder returns

• Treasury stock buyback

  ¥120.0 billion

  (¥150.0 billion in total planned in FY2024-2027)

• Dividend payout ratio

50%

Profitability enhancement

• ROE

  8.0%

  Generate stable cash flow

• Operating CF

¥500.0 billion

Carefully select and execute

• Upkeep CAPEX

¥220.0 billion

Investment for new businesses (including R&D) and existing businesses with high growth potential

• R&D investment

  ¥50.0 billion

• Growth investment

¥270.0 billion

Promote disposal of holding shares and sales of lease property

• Sales of

  cross-shareholdings:

  ¥45.0 billion

  （FY2024-2030:

  ¥85 billion in total）

• Sales of shares contributed to retirement benefit trust

  ¥21.0 billion

  （FY2024-2027:

  ¥35 billion in total）

• Sales of lease property

Cash allocation for FY2025-2027

Net D/E ratio

1.0 times or less

(Consider credit ratings and interest rate risk)

Sustainability PP.50-68

Cash In Cash Out

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Medium-term Management Plan 2027

Medium-term Management Plan 2027 Financial Strategy Shareholder returns policy

We will focus on achieving an ROE of 8% and aim to control shareholdersʼ equity through treasury

To maximize corporate value, we will strengthen asset management and restructure our capital

composition. This will enable us to secure ongoing funding for growth investments and R&D while simultaneously enhancing shareholder returns. (CFO Message PP.23-25)

Sale of non-core assets

We will increase the amount of shares sold by conducting stricter reviews of the rationale for holding shares such as strategic shareholdings and shares contributed to the retirement benefit trust.

Specifically, regarding the targeted sales amount, which was previously set at ¥70.0 billion, we will raise it by ¥66.0 billion over the three-year period of this Medium-term Management Plan to a total of

¥120.0 billion by 2030, including the portion already implemented in FY2024. We will also promote

the sale of lease real estate. By accelerating the sale of these non-core assets, we will improve capital

stock buyback and increasing the dividend payout ratio. The specific shareholder returns policy is

shown in the figure below.

(Yen) ■ Dividend per share (Yen per share)

Dividend payout ratio (%)

efficiency while concentrating management resources on our core businesses. 50

45

90%

40

80%

25

50%

50%

20

40%

15

30%

10

20%

5

10%

0

0%

Reduction of shareholdings

100%

Forecast

FY2024 completed

FY2025-2027 scheduled

Shares contributed to retirement benefit trust

FY2024 completed

Strategic shareholding

¥70.0 billion

40.0

29.0

30.0

21.0

14.0

¥120.0 billion

Setting hurdle rate

We have established a hurdle rate that reflects the Companyʼs cost of capital as a criterion for investment decisions. By applying this hurdle rate to each investment opportunity, we will rigorously screen investment projects and ensure the efficient allocation of capital. With this approach, we aim for sustainable growth by controlling investment risk while concentrating investments on high-growth opportunities. Furthermore, setting the hurdle rate will clarify the investment evaluation process and enhance the transparency and quality of decision-making.

16 17 18 19 20 21 22 23 24 25 27

Debt utilization

Considering interest rate risk and financial soundness, we will expand the net D/E ratio from the previous target of 0.7 to within 1.0 and proactively utilize debt to reduce the cost of capital.

(FY)

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Medium-term Management Plan 2027

Medium-term Management Plan 2027 Business Strategy Start of business portfolio transformation

Adhering to management focused on capital efficiency improvement, we will strengthen the profitability of existing businesses and build a solid earnings foundation for future evolution.

Profitability enhancement of existing business

We will implement price increases to cover past cost increases that have not been passed through to product prices. Furthermore, we will maintain and strengthen profitability by promptly and steadily reflecting future cost increases in product prices.

In addition, the Oji Group has established a new cross-Group sales organization to promote sales activities that achieve overall optimization, with the aim of strengthening competitiveness through product differentiation and a transition toward high-value-added products. Each business aggregates and utilizes customer needs and market information gathered from customers, and formulates marketing and sales strategies within the same organization. Based on this strategy, we will plan

and develop products, optimize operating conditions, and launch products into the market while simultaneously continuing to identify new needs.

We will implement restructuring by identifying low profitability businesses based on internal criteria that take into account EBITDA, ROIC, operating profit margin, and other factors across all operations. Specifically, we will formulate reconstruction plans for selected businesses and regularly monitor them to confirm and evaluate progress.

If it is determined that the reconstruction plan is unlikely to succeed, we will consider withdrawal (closure or sale).

Through these initiatives, we will accelerate management decisions regarding business continuity.

Monitoring process for low profitability businesses

By establishing this cycle, we will advance the shift toward a higher-value product portfolio across the whole Group, strengthening our competitiveness and revenue base. We will also accurately capture not only apparent needs but also latent and future needs, thereby expanding into new businesses.

On the other hand, we will also continue to allocate management resources to strategic businesses and areas. We position our sustainable packaging business, centered on the shift to paper packaging, as a strategic initiative. Through a Group-wide sales structure (left figure), we will strengthen marketing and advance R&D and product innovation to promote the transition from plastic to paper packaging. (P.29)

We will also continue to focus on India and Southeast Asia as strategic areas, where strong economic growth is expected, and expand investment in highly profitable areas. At the same time, we will consider withdrawing from low-profit businesses and mills in these areas in a timely manner, while confirming capital efficiency.

R&D investment for evolution

We will also actively implement R&D investment to establish the future forest biomass business

INPUT

Needs, information

OUTPUT

Value creation

Markets and customers

New Business Development Dept.

New

Sales departments of each company

Sales strategy

(New business)

New

Market and customer needs aggregation

Group Technology Division Innovation Promotion Division

Marketing strategy

Operational conditions confirmation for developed products

Product planning and development

n

o

i

s

i

v

i

D

n

o

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t

a

r

e

p

O

n

o

i

s

i

v

i

D

y

g

e

t

a

r

t

S

&

g

n

i

t

e

k

r

a

M

as a core business.

Forest Biomass Business PP.31-32 Innovation Strategies PP.44-49

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CFO

Shifting to balance sheet-focused management and steadily achieving an 8% ROE by the end of FY2027

On assuming the position of CFO

to prices to secure appropriate profits, even if it means sacrificing some volume. Furthermore, under these

I am Tadashi Oshima, appointed as CFO in April 2025. Since joining the Company in 1983, I have built my career primarily in administrative departments. Having recently assumed the role of CFO, I recognize that a CFOʼs ultimate mission is to enhance corporate value while undertaking practical initiatives such as fundraising, asset efficiency, capital efficiency, and optimizing capital structure. I am determined to do my best.

Looking back on FY2024

FY2024 marked the final year of our Medium-term Management Plan launched in FY2022 and spanning three years. However, operating profit, profit attributable to owners of parent, and ROE fell significantly short of our initial targets, resulting in an underwhelming outcome.

Looking back on these results, my greatest concern is the significant shift in the global environment characterized

by rising prices for raw materials and fuel, labor costs, logistics expenses, and other factors, coupled with the emergence of a world with meaningful interest rates. I am convinced that the trend of rising costs will become the norm for the long term. Amid such a business environment, it is essential to pass those costs through

circumstances, sustainable corporate growth cannot be expected simply by focusing on the value and volume of sales as in the past. Going forward, I believe it is essential to prioritize "ratios," by which I mean qualitative indicators such as capital efficiency and profit margins, in every situation. In my view, we must advance the transformation toward a truly profitable management structure, not overly concerned with the magnitude of sales.

In addition, external factors affecting our business performance include international pulp market conditions and exchange rate trends. We also need to continue efforts to reduce costs to absorb volatility in pulp prices.

In terms of exchange rates, fluctuations in not only the U.S. dollar and euro but also the Brazilian real and

New Zealand dollar have an impact, so in terms of risk diversification, we view appropriate hedging through forward exchange contracts as one option.

While deeply reflecting on our delayed response to environmental changes, the Company must transform into a robust organization with the resilience to withstand shifts in the business environment and the capacity to adapt to change.

We will therefore undertake a thorough review of our capital structure, pursue asset slimming, and transform our business portfolio to stay one step ahead of environmental changes, while making a Company-wide drive to enhance ROE.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CFO

In the new Medium-term Management Plan announced in May 2025, covering the period up to FY2027, we fundamentally reviewed our previous PL-focused management approach and placed emphasis on the improvement of capital efficiency. Therefore, we removed sales from the KPIs and set the most important KPI as achieving an 8% ROE by the end of FY2027. We aim to reach 10% ROE in the long term.

To raise the ROE from 4.3% as of the end of March 2025 to a level of 8%, we will simultaneously pursue profit growth and management of shareholdersʼ equity.

The operating profit target for FY2027 is ¥120.0 billion, and the target for profit attributable to owners of parent is ¥80.0 billion. To achieve profit growth, we will focus on price pass-through, restructuring of low profitability businesses, a shift to high-value-added

products and reinforcement of the Group sales structure, and stable operations and cost reduction. To ensure steady execution, we introduced the CxO system in April 2025. This organizational enhancement builds upon our existing vertical structure to establish a cross-functional framework. Personally, I have already gained increased access to new information previously unavailable to me, and I can feel the tangible impact of enhanced cross-functional collaboration contributing to our revenue growth.

On the other hand, the key factor regarding equity, the denominator of ROE, is shareholder returns, which include

¥120.0 billion in treasury stock buybacks by FY2027 and a 50% dividend payout ratio. We will steadily achieve

an 8% ROE by controlling shareholdersʼ equity even when operating profit fluctuates. Furthermore, the Group comprises more than 300 companies, with more than 200 included in the consolidated financial statements. We will also conduct more thorough exhaustive reviews of the balance sheets of our Group companies, accelerate the sale of non-core assets, implement asset slimming, vigorously reduce inventory, and work to reduce working capital. On the other hand, while considering interest rate risk and financial soundness, we will proactively utilize debt while applying leverage to reduce capital costs.

For the net D/E ratio, a key indicator of financial soundness, we will raise the target to within 1.0 by applying leverage, up from 0.7 in the previous Medium-term Management Plan. While we actively utilize debt, we now live in a world of meaningful interest rates. Therefore, while maintaining our current credit ratings, we intend to proceed flexibly by carefully balancing cash inflows from asset sales rather than simply increasing debt, and selecting the most advantageous financing methods and terms at the time.

I am keenly aware that the Companyʼs PBR is currently below 1x. First, I believe firmly achieving an ROE of 8% will serve as the starting point for PBR recovery.

Approach to shareholder returns

Regarding the dividend payout ratio as part of shareholder returns, while maintaining stable dividends

as the foundation, we have reviewed our capital structure and considered the appropriate level of shareholdersʼ equity. As a result, we have determined that a payout ratio of 50% is appropriate at this juncture. Future

profit growth and the reduction in the number of shares outstanding through the purchase of ¥120.0 billion in treasury stocks by FY2027 will enable us to increase the dividend per share. Regarding shareholder returns, I believe stable returns are pivotal and do not intend to make changes lightly in response to temporary declines in performance.

Cash allocation

In terms of financial strategy, it is important to continuously secure funding for growth investments and R&D while reviewing the capital structure and distributing cash in a manner that enhances shareholder returns.

Cash flows from operating activities are projected to reach approximately ¥500.0 billion over the three-year period of the new Medium-term Management Plan. Other cash inflows anticipated include the sale of

strategic shareholdings for ¥45.0 billion, the sale of shares contributed to retirement benefit trust for ¥21.0 billion, and the sale of lease properties and borrowing.

Using these funds as a source, we plan to allocate

¥50.0 billion to R&D investment and ¥270.0 billion to growth investment over three years. For shareholder returns, we plan to allocate ¥120.0 billion to share buybacks to strengthen our position while maintaining the

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Message from the CFO

aforementioned 50% dividend payout ratio. In addition, we plan to allocate ¥220.0 billion to upkeep capex by carefully selecting targets.

Regarding R&D investment, we recognize that greater investment than before is necessary in the areas of sustainable packaging and wood biomass as we work toward transformation of the business portfolio for the future. While the previous three-year Medium-term Management Plan allocated approximately ¥33.0 billion for R&D investment, the new plan targets ¥50.0 billion. Should this prove to be insufficient, we will firmly advance investments while keeping in mind the potential for further increasing R&D investment tailored to future business.

Furthermore, regarding growth investments, we will invest intensively in developing new businesses, including through M&A, with a strong conviction that halting investment would put our future growth at risk. This

¥270.0 billion growth investment also includes funding to acquire forests and to gradually convert coal-fired boilers to LNG fuel starting in FY2027, in line with the previously announced Environmental Action Program (P.55).

Regarding our business portfolio, we monitor it based on clear internal standards incorporating metrics such as EBITDA, ROIC, and operating profit margin. For businesses that fall below our low profitability criteria, we

monitor the progress of reconstruction plan formulation and execution before determining the direction of the business̶that is, whether to continue, withdraw, sell, or close it. We will transform into a lean and efficient management structure by divesting from low-profitability

businesses and allocating management resources toward growth investments.

We make decisions based on strict hurdle rates regarding investment and exit criteria. The generation of ROIC exceeding WACC is a minimum standard.

Regarding the cost of shareholdersʼ equity, we announced it to be approximately 6%-7% in December 2023 (in a presentation called "Initiatives to Enhance Corporate Value").

However, while we calculate WACC and segment ROIC internally, we do not disclose these figures externally.

I, as CFO, will provide input on all investment decisions. We will thoroughly identify investment risks, carefully distinguish between areas where we take risks and

those where we avoid them, rigorously assess whether investments are commensurate with their risks, and pursue a balance between "offensive governance" and "defensive governance."

In making decisions on overseas investments, which we have positioned as future growth drivers, we basically make the same decisions as we do in Japan, based on whether we can earn a return. In our key focus markets of India and Southeast Asia, we will also consider reviewing our current operations, taking into account country risk, to determine whether the existing hurdle

rate is appropriate compared to its contribution to ROE going forward.

Message to stakeholders

I value very much the opportunity to engage with institutional investors and other stakeholders. All requests and opinions from our stakeholders are shared throughout the Company, including with top management.

The newly announced Medium-term Management Plan advocates management focused on capital efficiency improvement, which represents a departure from previous strategies. As CFO, I remain committed to strengthening trust with our stakeholders through transparent disclosure and proactive dialogue. I sincerely appreciate your ongoing support.

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Utilization of Management Resources

The Oji Group will realize value creation by leveraging its strengths, including sustainable forest management, the circular use of renewable resources, the application of fundamental paper manufacturing technologies, the development of new materials derived from wood, and its global production bases and sales network. In addition, we will work to resolve the challenges that we need to address in each type of management capital and further pursue our strengths.

Natural Capital

• Sustainable Forest Management The Oji Group owns and manages extensive forests in Japan and overseas. In addition

to cultivating renewable resources, we are

working to take full advantage of the multifunctionality of forests while providing society with ecological services by practicing sustainable forest management that is conscious of environmental, social, and economic concerns.

Multiple functions of forests

- Material production

- Global environmental conservation (CO2 absorption, other)

- Biodiversity conservation

- Water resource cultivation

- Soil conservation

- Culture

- Recreational, etc.

Manufactured Capital

• Circular Use of Renewable Resources The Oji Group is actively engaged in the cultivation, procurement, and cascading use of

  renewable forest resources. We also promote

  the recycling of paper that is used repeatedly as recovered paper to make effective use of valuable resources generated in the market. At the same time, we are putting in place a system to reduce the amount of water used by circulating and reusing water that is essential to paper manufacturing.

• Application of Fundamental Paper Manufacturing Technologies

  Utilizing the fundamental technologies we have cultivated in our paper manufacturing business, we aim to expand our businesses in various fields that will help reduce our environmental burden. This includes developing our renewable energy business with a focus on hydroelectric power generation and wood biomass power generation, industrial water production, and industrial wastewater treatment businesses.

  Intellectual Capital

• Development of New Materials Derived from Wood

  The Oji Group is working to resolve a variety of social issues through the creation of new value. To this end, we are engaging in the R&D of cellulose nanofibers (CNF), where we are in turn undertaking the search for new applications while promoting practical use; wood-derived sugar solutions and ethanol, which are key substances in biomanufacturing; and pharmaceuticals that use sulfated hemicellulose, a by-product of pulp manufacturing.

• Holds a broad portfolio of intellectual property rights related to environmentally conscious technologies both in Japan and overseas

• More than 150 years of knowledge and a wide variety of core technologies (including production and operations, forest management and plantations)

• Robust R&D system and facilities located at the mills of Group companies in Japan

  Social and Relationship Capital

• Global Network and Sales

  We are proactively developing our businesses on a global level, including our packaging business, which engages in the integrated manufacturing of folding cartons and corrugated containers from base paper, as well as our household paper, thermal paper, pulp, and other businesses. We will respond to the growing needs of overseas markets and create synergies with newly acquired companies within the Group.

• Detailed communication response to product safety inquiries, including the provision of survey reports and product information sheets

• The brand power exemplified by "nepia" and the ability to understand customer needs

• Various social contribution activities outside and inside Japan

  Human Capital

• Capabilities at all sites, including procurement, manufacturing, and sales

• Diverse human resources, including global bases (inclusion and diversity)

• A corporate culture that respects, fosters, and accepts other cultures and attributes

• Human resources with high ethical standards based on the Companyʼs founding spirit and the relevant training system

• Depth of technical human resources engaged in R&D and training systems that lead to new businesses

  Financial Capital

• Stable profitability through diversified businesses from upstream to downstream

• Financial soundness

  R&I Issuer Rating A+ [Positive] Net D/E ratio within 1.0 times (from FY2025 onward)

• Stable dividend policy Dividend payout ratio 50% (from FY2025 onward)

  • Securing stable and long-term resources through the expansion of forest plantation areas

  • Quantitatively evaluating natural capital and enhancing its value, introducing natural capital accounting in financial statements

  • Effectively utilizing company-owned forests in Japan

  • Increased CO2 absorption and resource expansion through improved growth

• Utilizing excess production capacity and optimizing production systems

• Transition to the biorefinery business

• Improving production efficiency through automation and promotion of DX

• Expanding the use of non-fossil energy sources for the transition to a decarbonized society

  • Enhancement of various training programs and systems

  • Transfer of knowledge and expertise related to various operations

  • Formulation and execution of intellectual property portfolio strategy for business portfolio transformation

  • Participation in and initiatives with external consortiums, including industry, government, and academia, in the new wood-derived materials business

  • Collaboration with the International Sustainable Forestry Coalition (ISFC) and other industry organizations

  • Consideration of human rights in the supply chain through human rights due diligence

• Creating an environment for human resources development to achieve the Medium-term Management Plan

• Recruitment of diverse human resources

• Strengthening employee engagement

• Ensuring safety and health in the workplace

  • Profitability enhancement of existing business

  • Transformation of the business portfolio

  • Improvement of capital efficiency

    Input

    Outcome

• Oji Forests (conservation forests):

  636,000 ha (164,000 ha)

• Water withdrawal: 686,547 thousand m3

• Overseas manufacturing sites:

  106 sites in 24 countries

• Capital investment: ¥153.4 billion

• R&D expenses: ¥13.5 billion

  (No. 1 in Japan in the paper and paperboard industry, according to WDB Inc.)

• Number of patents, utility models, and design patent applications

Japan: 314, Overseas: 150

• Oji Group companies*1: 373 in the world

• Supplier Sustainability Surveys Number of companies surveyed: 955

• Social contribution activity expenses:

¥0.4 billion

• Number of employees of the consolidated

  Group: 39,136

• Percentage of overseas employees: 58.5%

• Mid-career hires: 62 (FY2024)

• Shareholdersʼ equity: ¥816.1 billion

• Interest-bearing debt: ¥903.4 billion

• Estimated economic value of public utility

  functions of company-owned forests in Japan: ¥550.0 billion/year

• Forest certification acquisition rate: 98% (Japan 100%, Overseas 96%)

• Forest carbon stocks: 142,020 kt-CO2

• Reduction of water intake intensity compared with FY2018: 22.2% reduction

• Reduction of GHG emissions compared with

  FY2018 (Scope 1, Scope 2): 34.2%

  reduction

• Percentage of renewable energy use: 56.4%

• Recovered paper utilization rate (Japan): 67.4%

• Number of published patents in Japan in

  2024: 286

  (top rank in the pulp and paper industry: Survey by Patent Result Co., Ltd.)

• Number of patents, utility models, and design patents/trademarks held Japan: 2,784/1,039

Overseas: 944/1,160

• Pulp and paper-related sales: Ranked 5th

  globally and 1st in Japan (FY2023)

• Overseas sales ratio: 40.8%, Number of countries where products are sold: 130

• Rate of sustainability survey implementation at all major suppliers: 100%

• Employee engagement score*2

  Engagement related to work: 61.0%

  Engagement with the organization (Willingness to work long term): 65.8%

• Percentage of female managers*3: 4.9%

• Operating profit: ¥67.7 billion

• ROE：4.3％

• Free cash flows: -¥60.5 billion

• Dividend per share: ¥24

• Employment rate of people with disabilities* : 2.55%

• Lost time injury frequency rate: 0.81 (2024)

4

*1 Subsidiaries and affiliates *2 Percentage of positive responses *3 16 domestic Group companies *4 6 domestic Group companies

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

Logic Tree

The Oji Groupʼs logic tree is a schematic representation of how the Groupʼs management issues and strategies are linked to increases in corporate value. We will pursue the enhancement of environmental and social value for society as a whole by simultaneously striving to increase economic value through sustainable corporate growth and promoting sustainability in various ways while leveraging our business foundation based on forest resources.

Medium-term Management Challenges Main Measures

Economic value

Improving capital efficiency

Enhancement of corporate value

Portfolio transformation

Environmental and social value

Promoting sustainability

• Realization of a circular economy

  • Effective utilization of waste and recovered paper (e.g., paper cup recycling)

  • Promotion of replacement of plastic packaging with paper

    • Strengthening management foundations

(Enhancing the governance structure)

(Human capital and DX strategy)

• Streamlining of the Board of Directors and CxO structure for overall optimal management

• Director compensation system linked to the Medium-term Management Plan

• Comfortable workplaces and improved productivity utilizing DX

• Enhancement of human resources programs

  Oji Group Integrated Report 2025 27

  
  
  
  
  
  
  
  
  
  
  
  

  Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

  New Portfolio Domains - Portfolio Transformation Applying the Strengths of the Oji Group

  Against the backdrop of a sharp decline in domestic paper demand since 2008, the Oji Group has been transforming its business by stepping up its overseas expansion and bolstering the manufacturing and sales of paperboard and pulp. In 2020, the Japanese government declared its goal of achieving a carbon-neutral society (reducing greenhouse gas emissions to net zero including through absorption) by 2050, heightening expectations for biomass materials as alternatives to fossil-derived resources. By utilizing abundant forest resources and the technologies and facilities cultivated through paper manufacturing and forestation, we have positioned sustainable packaging and the forest biomass business resources as pillars of growth, and are promoting commercialization through aggressive capital investment and M&A in both fields.

  Background

  Strengths of the Oji Group

  Demand for paper and paperboard (domestic)

  
  
  

  (Million tons) ■ Total paper ■ Total paperboard

  35

  • Decrease in domestic paper demand

  • Measures for achieving a carbon-neutral society

    ＝Growing expectations for biomass materials

  • Abundant forest resources nurtured in the Oji Forests

  • Pulp manufacturing infrastructure to support new material development

    30

    25

    20

    15

    10

    5

    0

  • Core technologies cultivated through paper manufacturing and forestation

Development of carbon-neutral materials and wood-derived products to contribute to the realization of a sustainable society

2000

2005 2010 2015 2020 2021 2022 2023 2024

(FY)

Source: Japan Paper Association

Initiatives for the sustainable growth of the Oji Group

Dedicated to Sustainability

Circular Economy

Nature Positive

Carbon Neutral

1

Sustainable Packaging Drive business with the eye on problem solving

• Replacing packaging materials derived from fossil resources with environmentally friendly paper materials

（P.29）

Sustainable Packaging

Household materials functional materials, other

Forest Biomass Business

Future

2

Forest Biomass Business

• Manufacturing high-value-added chemical materials from forest resources

• Development of new environmentally friendly materials

（P.31）

Medium term

Pulp, other

Corrugated box other

Existing businesses

Short term

Resources from forests

Message from the CEO The Oji Groupʼs Value Creation Medium- to Long-term Growth Strategies Sustainability Strengthening Management Foundations Data Section

New Portfolio Domains - Sustainable Packaging

Amid heightening awareness for the environment, demand for sustainable packaging materials is rapidly expanding as an alternative to conventional disposable packaging made from fossil-based plastics.

Paper packaging materials play a pivotal role in achieving a sustainable society by significantly contributing to reducing plastic usage and CO2emissions. We will continue to enhance our lineup of sustainable packaging that meets customer needs by introducing new paper and pulp-based packaging to the market, incorporating essential functions such as barrier performance, durability, and processability. This will strengthen business competitiveness across the Group.

In addition to reducing the amount of plastic used, paper sustainable packaging contributes to reducing waste and environmental burdens due to the high recyclability of paper and flexibility to incorporate a variety of materials in the manufacturing process (i.e., the adaptability to mixed-fiber paper).

With a view to the sustainable packaging market not only in Japan but also globally, we aim to achieve further growth by developing and launching products that anticipate stricter environmental regulations in each country and changes in consumer awareness.

Plastic reduction achieved through replacement with sustainable packaging*

FY2024 Result

Approx. 3,000 t

Target by FY2030

approx. 5,000 t

Expand sales to

Paper packaging

60%

reduction

Impact of paper packaging on

reducing CO2 emissions (in Japanese only)

*Includes some non-wrapping plastic alternative paper products

Wood-derived packaging solutions

Fossil-based packaging materials to be replaced

Main strategies and developed products

Examples of main products