Financial Results
for the Six Months Ended September 2023
KPP GROUP HOLDINGS CO., LTD.
Tokyo Stock Exchange Prime Market : 9274

November 30, 2023

1

Summary of Financial Results for the Second Quarterof the Fiscal Year Ending March 20242

Progress in the Third Medium-Term Business Plan

3

Reference Materials

1

1

Summary of Financial Results for the Second Quarterof the Fiscal Year Ending March 20242

Progress in the Third Medium-Term Business Plan

3

Reference Materials

2Consolidated Financial Summary
Sales remained strong due to higher selling prices in Northeast Asia, but profits fell due to the absence of special factors
seen in the previous year.
Net sales
Operating profit• The paper and paperboard wholesale business saw a decline in sales volume due to a decrease in demand, but the visualcommunication business remained steady, resulting in the same level as the previous year.
• In Japan, the sales volume of paper and paperboard declined year-on-year, but profit increased owing to the effect of price revision.
• Overseas, profits fell due to softer demand in the paper wholesale business in Europe and weak market conditions for paper products
in China.

FYE March 2023

FYE March 2022

(JPY million)

Result for the first six
monthsResult for the first six
monthsVariance in amount

Net sales

320,699

320,681(17)(0.0%)

Gross profit

60,02957,905(2,123)(3.5%)

SG&A

47,66850,771＋3,102+6.5%

Operating profit

12,3607,133(5,226)(42.3%)

Ordinary profit

11,128

6,012(5,115)(46.0%)

Profit attributable to owners of parent

9,247

4,710

(4,537)(49.1%)

Variance in %※ There is no revision to the full-year earnings forecast.

3

Results by Segment
Northeast Asia

• Sales and profits rose in Japan owing to the revision of paper and paperboard prices. Sales and profits of recovered paper fell due to a decrease in the volume of recovered
paper generated and a decline in market conditions.
In China, sales volume fell due to lower demand and deteriorating market conditions, resulting in a decrease in sales and profits.

Europe/South America• In Europe, the paper wholesale business saw a decline in product prices and sluggish demand caused by inventory reduction, resulting in weak sales and profits. The packaging
business was flat compared with the previous year due to sluggish demand in the automotive industry and e-commerce. The visual communication business performed steadily,
thanks to more frequent events and exhibitions.
M&A in the visual communication field also contributed to the business results.

Asia-Pacific• In Oceania, both sales and profits improved mainly in the commercial print business. The packaging business remained strong especially in Australia. The
visual communication business also performed steadily in Asia.

Real estate leasing• Sales and profits increased year-on-year boosted by the KPP Akashicho Building completed in February 2023, despite a vacancy period arising from tenant
replacement for the KPP Yaesu Building.

FYE March 2023

FYE March 2022
Result for the first six months

Result for the first six months

147,874

153,571＋5,697＋3.9％

Segment profit

2,887

2,022

(865)

(30.0％)

Profit ratio

2.0%

1.3%

－

(0.6pt)Net sales

149,179

141,768(7,410)(5.0％)

Segment profit

9,216

4,401

(4,815)(52.2％)

Profit ratio

6.2%

3.1%

－

(3.1pt)Net sales

23,053

24,582＋1,529＋6.6％

Segment profit

1,028

820

(208)

(20.2％)

Profit ratio

4.5%

3.3%

－

(1.1pt)Net sales

592

759

＋166

＋28.1％

Segment profit

58

293

＋235

＋405.4％

Profit ratio

9.8%

38.7%

－

＋28.9pt

Net sales

320,699

320,681(17)(0.0％)

12,3607,133(5,226)(42.3％)

3.9%

2.2%

－

(1.6pt)(JPY million)
Net sales

Northeast Asia

Europe/South America

Asia-PacificReal estate leasing

Total

Operating profit*(after adjustment for corporate
expenses, etc.)

Profit ratio*

Variance in amount

Variance in %Corporate expenses, etc.: general administrative expenses in the administrative divisions of the head office that do not belong to the above segments.

4Increase/Decrease Factors in Operating Profits (Year-on-Year)(JPY million)

12,360
10,236

(1)

7,133

(2)

Weaker demand for paper-related products mainly in Europe led to a decrease in gross profit. Higher SG&A expenses, mainly labor costs,
also contributed to a year-on-year decline in profit.
(1) Gross profit (2,123)‐ In Europe and South America, gross profit in the paper and board business fell due to lower sales.
‐ In Japan in Northeast Asia and Australia in Oceania, the paper and board business performed well. The visual communication business in Europe andSouth America also remained solid but failed to offset the overall decline.

(2) SG&A (3,102)‐ Labor costs, depreciation expenses and rent of overseas corporations increased due to inflation (including the effect of foreign exchange translation). The
increase in labor costs was partly attributable to a company we acquired last year.

5Change in Balance Sheet (Compared with March 31, 2023)
March 31, 2023

September 30,
2023

Variance inamountCurrent assets

243,596242,550(1,046)

Cash and cash
equivalents

30,731

21,515(9,216)

132,873

146,567＋13,693

Merchandise andmanufactured goods

72,237

68,917(3,319)Tangible fixed assets

37,063

41,535＋4,471Intangible fixed assets

13,896

15,431＋1,535

5,330

5,290

(39)

36,10440,905＋4,800330,662

340,423＋9,761(JPY million)

Accounts receivable(Notes and accounts receivable,
electronically recorded monetaryclaims)Goodwill

Investments and otherassetsTotal assets

March 31, 2023

September 30,
2023

Variance inamount207,947

211,298＋3,35097,418105,242＋7,82362,884

60,122(2,762)

Fixed liabilities

54,90550,713(4,192)Long-term debt

31,425

24,105(7,320)262,853

262,012(841)

52,62956,533＋3,904

Total net assets

67,80878,410＋10,602

Total liabilities andnet assets

330,662

340,423＋9,761(JPY million)

Current liabilities
Accounts payable(Notes and accounts payable trade, electronically recorded
obligations - operating)

Short-term borrowings(including commercial paper)┃ Main factors of change(Including bonds)

Total liabilities
Retained earnings┃ Financial strength and profitability indicators (vs. March 31, 2023)

・ Cash and cash equivalents:
Decreased, as the increase in cash and deposits from the issuance of bonds at the endof the previous fiscal year was used to repay borrowings.
・ Accounts receivable: Increased in Japan due to holidays at the end of the fiscal year.
・ Tangible fixed assets: Increased in lease agreements (right-of-use assets) due towarehouse restructuring at Spicers.
・ Investments and other assets: Increased due to higher prices of listed stocks.

・ Interest-bearing debt (short-term borrowings and long-term borrowings):
Decreased mainly due to the appropriation of bonds issued at the end of the previous
fiscal year to repay borrowings.

・Net D/E ratio improved from 0.9 times to 0.8 times(*D/E ratio: 1.4 times to 1.1 times)
・Equity ratio increased from 20.5% to 23.0%

6

Change in Cash Flows (Year-on-Year)
Result for the firstsix months of FY
March 2023

Result for the first six
months of FY March
2024

Cash flows from operating activities

7,807

7,798

Cash flows from investing activities(5,169)(2,769)Cash flows from financing activities(7,002)(16,881)Translation difference for cash andcash equivalents

2,104

2,637

Increase (decrease) in cash and cash
equivalents(2,259)(9,215)-

Cash and cash equivalents at the
beginning of the period

22,631

30,699-Cash and cash equivalents at the endof the period

20,372

21,484-(JPY million)

Main breakdowns

・Decrease in inventories +8,531
・Income before income taxes +6,223
・Increase in trade payables +4,962
・Depreciation +4,194
・Increase in trade receivables (10,266) ・Income taxes paid (3,046)

・Acquisition of tangible and intangible fixed assets (2,136)
・Payments for acquisition of businesses (1,048)

・Net decrease in long-term borrowings (10,798)
・Repayments of finance lease obligations (2,877)

・Foreign currency translation adjustments of cash, etc.

Basic policy on cash management• Based on the basic policy of the Third Medium-Term Business Plan, cash flows from operating activities are used for M&A and otherinvestment activities. We will maintain this policy.
• Going forward, we will also utilize cash inflows from financing activities for investment depending on the size of the project.
7

Policy on Shareholder Returns (Dividends and Repurchase of Shares)
Basic policy on dividends
Recognizing the return of profits to shareholders as one of the most important management issues, we will pay dividends on a stable and continuous
basis and improve corporate competitiveness and shareholder value by enhancing and effectively utilizing retained earnings.
‐ The Group will pay progressive dividends (maintain or increase the dividend amount) while securing financial resources to promote“In-Organic Growth through Strategic M&A” and “Improvement of Financial Position(improvement of D/E ratio and equity ratio)”
set forth in the Third Medium-Term Business Plan.
‐ After reviewing the status of cash flow acquisition, the Company will consider repurchasing its own shares in the second quarter of the fiscal year
ending March 2024 or later.
(JPY)

24
22
20
18
16
14
12
10
8
6
4
2
0

Change in cash dividends per share

Expected annual
dividend: JPY 22• FYE March 2022

(Dividend to commemorate
the conversion to a holding
company: JPY 2)(Dividend to commemorate
the listing: JPY 2)

As acquisitions of Spicers and Antalis contributed significantly to theGroup’s earnings and solidified the earnings base for the full year, we paid
an interim dividend for the first time.
20

22• FYE March 2023
In addition to the commemorative dividend of JPY 2 for thetransition to a holding company structure, we announced a dividend
increase of JPY 4 reflecting our strong performance. The annual
dividend forecast was raised to JPY 20 from the initial forecast of JPY 15.

14
8

8

FYE March
2018

FYE March
2019

10

10

FYE March
2020

FYE March
2021

FYE March
2022

FYE March
2023

FYE March2024

Repurchase of shares (announced on November 14, 2023)(1) Class of shares to be repurchased:

Shares of common stock of KPP(4) Period of repurchase:

From November 15, 2023 to March 31, 2024

(2) Total number of shares to be repurchased:

3 million shares (maximum)(5) Method of repurchase:Open market purchase through the Tokyo Stock
Exchange(Ratio to the total number of issued shares (excluding treasury shares): 4.2%)(3) Total purchase price for repurchase of shares:

JPY 2,400 million (maximum)

We will continue to provide timely and flexible returns to shareholders in consideration of the balance with investments to improve corporate
value over the medium to long term.

8

1Summary of Financial Results for the Second Quarterof the Fiscal Year Ending March 20242

Progress in the Third Medium-Term Business Plan

3

Reference Materials

9Summary of the Third
Medium-Term Business Plan

Long-Term Vision “GIFT + 1 2024”

The Third Medium-Term Plan is the final stage of the long-term vision “GIFT + 1 2024”- Toward “GIFT 2030” and “NEXT 100” years
The Third Medium-Term Plan Period

Focusing on Overseas Markets

Expansion of raw material
business

NEXT 100

Global Management
Establishing a Comprehensive
Recycling-Oriented Company
Completion toward “NEXT 100”

Investment in growth engines
and overseas expansion
Strengthening profitability

Reorganization of businessportfolio

Antalis became aconsolidated
Spicers became asubsidiaryconsolidated(July 2020)
Newly listed on thesubsidiaryTokyo Stock(July 2019)
Exchange

Current

Transition to a holding company structure
Company name changed to
KPP GROUP HOLDINGS(October 2022)(June 2018)

Business structure reformperiodFYE March
2017

FYE March
2018

FYE March
2019

The First Medium-Term Plan

Business development
periodFYE March
2020

FYE March
2021

FYE March
2022

The Second Medium-Term Plan

Long-Term Vision “GIFT + 1 2024”

Business
completion period

FYE March
2023

FYE March
2024

FYE March
2025

The Third Medium-Term Plan

GIFT 2030
10

Inorganic Growth/Progress of Antalis and Spicers' M&A Strategies
Antalis’ M&A strategy
Enhance Antalis’ presence in the market by acquiring companies that provide customized solutions in growth areas such as
packaging and visual communication to strengthen Antalis’ products and services.

Spicers’ M&A strategy
Build a strong Spicers brand by acquiring companies in the fields that have an affinity with its existing businesses such as
packaging and visual communications. At the same time, aim for further growth by acquiring experienced personnel.

M&A activities conducted by Antalis and Spicers
2019
Spicers
Business: Sales of
paper-related products
Location: Australia,
New Zealand

2020

2021

Company A

Company B

Company D

Business: Visualcommunication
Location: Australia

Business: Packaging(industrial packaging)
Location: New ZealandBusiness: Sales of
paper-related products
Location: Australia

2022

2023

Company G
Business: Packaging
Location: Germanyz

AntalisCompany C

Company E

Company H

Business: Sales of
paper-related products
Location France (Paris)

Business: Visualcommunication
Location: New ZealandBusiness: Visualcommunication
Location: Switzerland

Business: Packaging(food packaging)
Location: Australia

Company F
Business: Visualcommunication
Location: Singapore

Company I
Business: Packaging
Location: Spain

Company J

Company M

Business: Sales of
paper-related products
Location: Australia

Business: Packaging
Location: Canada,
MexicoCompany K
Business: Packaging
Location: Spain

Company L
Business: Visualcommunication
Location: Poland,
Czech Republic... M&As by Spicers: 7 companies in total (paper business: 2, packaging business: 2, visual communication business: 3)... M&As by Antalis: 6 companies in total (packaging business: 4, visual communication business: 2)11Acquisition of Lovepac Inc. (Packaging Business)
In August 2023, Antalis acquired all the shares of Lovepac Inc., a packaging company processing and selling packaging products, and madeit a subsidiary.This is Antalis’ first foray into North America.

Overview of Lovepac Inc.

Purpose and Future• Based in Canada (Montreal, Quebec) and Mexico, Lovepac Inc.
manufactures, processes and sells custom-made packaging products.

• Antalis is developing a packaging business in Europe. Lovepac’s
technology and know-how can be shared also in Europe.

• Excelling in design and manufacture of industrial packaging productsin particular, it has developed unique specialized technologies in thefields of aircraft parts, pharmaceuticals, medical products, foods, andhigh-tech products for more than 20 years.

• Antalis will continue to leverage Lovepac’s management resources
when it launches in North America in the future.

• It operates the packaging converter (processing) function completely
in-house and carries out packaging product design, prototyping, andmanufacture and sale of products according to customers’ needs.

Products (example)

North America

Full launchin North America
EuropeSouth America

12Acquisition of Integart Group (Visual Communication Business)
In July 2023, Antalis acquired all the shares of Integart Group, a visual communication company operating in Poland and the Czech
Republic, and made it a subsidiary.

Overview of Integart Group

Purpose and Future• Headquartered in southwestern Poland, near the borders with Germany
and the Czech Republic, Integart Group has 16 offices throughout
Poland, two offices in the Czech Republic, and one office in Slovakia.

• The acquisition increases Antalis’ presence in the visualcommunication business in the Polish market and enhances its
handling of hardware.

• It offers technology and materials for advertising, decoration andpackaging, building materials and industrial digital printing technology.

• It also helps further strengthen the relationships with strategic
suppliers.

• The main products are LFP (large-format inkjet printers), hardware, andplastic sheets. In the Poland market, it is the second-largest in LFP and
handles the largest volume of hardware, which has made it a leading
company in the market.

13Initiatives in Environment-related Business -1Aiming to build a second pillar of business in place of the KPP Group’s core business, we are actively promoting R&D, business alliances and investments
in new products and services handled by “Oji Fiber,” “AmicaTerra” and “BMecomo.” Based on a sales distributor agreement with “Ranpak,” a leading
company in the field of paper cushioning material, we provide packaging solutions by selling paper protective packaging materials and leasing packaging
equipment in Japan.

Oji Fiber

AmicaTerra

Because the main raw material
comes from plants, it is completely
biodegraded in soil and water
including the ocean

Lightweight and excellent inmoisture absorption and release,
toughness, deodorization,
dyeability and biodegradability

No special mold is required formolding, and products can be
manufactured using general plastic
molding machines

Wide range of applications
including artificial grass, apparel,socks and daily necessities➢ Artificial turf made of 100% paper yarn is used in the playroom of Nakamuraminami Sports
Exchange Center in Nerima City, Tokyo➢ Business deals with the restaurant industry are on the rise.
➢ Exhibited at FOOD Exhibition 2023, the 19th Food System Solution Exhibition. (September 20 to 22, 2023)

https://www.kpp-gr.com/ja/news/news/news-908554080068572220807.html➢ Exhibited at the 14th Fashion World Tokyo Sustainable Fashion Expo.
(October 10 to 12, 2023)* Nakamuraminami Sports Exchange Center in
Nerima City

* View of the exhibition* View of the exhibition

14

Initiatives in Environment-related Business -2Ranpak

BMecomoSwitching from plastic to paper protective packaging
makes it possible to decrease environmental impact,significantly reduce time required for packaging,standardize packaging operations, and cope with busy
seasons.The Company anticipates growing demand for
paper cushioning materials in Japan, particularly in the
EC industry.

Paper cushioning

BMecomo supports daily operations and business
management by gathering and analyzing all dataobtained from biomass power plants, utilizing thelatest technology and providing visualization,
thereby helping maximize the profits of biomass
power plants

Gap filling➢ Held a joint webinar with Ranpak, “Ranpak Seminar for Future Logistics Solutions,” to raise brandawareness of Ranpak including the features and benefits of its products.
➢ Exhibited at Logis-Tech Tokyo 2023, the 3rd INNOVATION EXPO. (September 13 to 15, 2023)➢ Business alliance with Kett Electric Laboratory Co., Ltd. Launched a solution thatuses data of in-line NIR moisture analyzer➢ Participation in the project to develop a fully non-feed-in-tariff (NON-FIT)
decarbonized power supply with hybrid fuel of wood and manufacturing by-products*[Rendering image of POWER AID MIE Shin-Biomass™ Matsusaka Power Plant
in Woodpia Matsusaka]*A fully non-feed-in-tariff (non-FIT) power
generation project to establish the Internal Carbon
Circulation System, which generates electricity
mainly from by-products emitted in the production
process from manufacturers, and sells back theenergy to the emitting manufacturers as green
electricity➢ BMecomo already procures wood waste and food-related difficult-to-treat biomass as fuel frombusiness sites of KPP Group’s existing customers. The project is expected to supply tens of
thousands of tons of biomass fuel annually.
➢ This project utilizes by-products to generate electricity, rather than treating them as waste, andreturns the necessary electricity to the emitting companies. Through this initiative, we will further
contribute to the realization of a circular economy and a comprehensive recycling-oriented society.
* View of the exhibition

Initiatives of Green Biz Project•

We work on initiatives such as “promoting the resolution of issues throughout KPP to increase orders and sales of environment-related products,” “activating the resolution of issues byappointing personnel with knowledge of environmental issues,” and “collaborating with the Marketing Office to closely monitor market trends and deepen product knowledge.”•

Training sessions on solution sales and sales methods of environment-related products are held regularly for sales employees in order to expand the environment-related business. In
addition, we share training contents throughout the company to promote standardization of business operations and build a system to enhance reproducibility.

15

Overview and Future Initiatives by Area (Segment)

Consolidated
Summary⚫ The year-on-year slowdown in the European economy has become clearer, China hasremained stagnant since the lifting of COVID-19 restrictions, and geopolitical risks
have become apparent.
⚫ The pulp and paper industry is also in a challenging environment, but the Group is
steadily advancing the regional strategy and portfolio reforms and proceeding with theThird Medium-Term Business Plan without delay.

16Overview and Future Initiatives by Area (Segment) -1-<Japan>⚫ The shift to paper solutions as an environmental material isslow, but steadily expanding. Focusing on textiles andartificial turf, we are expanding the “Kami no ito (paper yarn)
OJO+” business.
⚫ As a company contributing to a sustainable society, we aremaking efforts such as incorporating the biomass power
generation business (BMecomo) and considering entering
the livestock feed business (sorghum cultivation).

Northeast
Asia(Japan, China, etc.)<China>⚫ Amid the slow recovery in demand for printing and communication paper in China,
we implement structural changes and strengthen the highly profitable fine paper(specialty paper, functional paper) business to bolster our foundation.

Artron Antalis Creative Paper Gallery

17Overview and Future Initiatives by Area (Segment) -2-⚫ Paper and packaging businesses have been affected by the recession.
⚫ Business matching between Japanese companies operating in Europe and local
subsidiaries of Antalis is taking shape.
⚫ With acquisition of companies based in Eastern Europe, the visual communication
business is moving its position in Europe up a notch.

Europe/South
America18

Overview and Future Initiatives by Area (Segment) -3-⚫ Australia, our key region, remained strong from the previous
year partly due to new orders for office copy paper.

⚫ In New Zealand, we aim to become the region’s number one
player through M&A. In the ASEAN region, while the tradebusiness is still on a recovery path, the visualcommunication business is beginning to contribute toperformance as a new segment.

Asia-Pacific(Oceania/
Southeast Asia andIndia)⚫ We finally have a full product lineup of fine paper and expect
the performance to recover in the second half of the fiscal
year.

19

1

Summary of Financial Results for the Second Quarterof the Fiscal Year Ending March 20242

Progress in the Third Medium-Term Business Plan

3

Reference Materials

20Summary of the Third
Medium-Term Business Plan

Themes of the Third Medium-Term Plan

Theme
Achieving the Long-Term Vision “GIFT + 1 2024” andfor the 100th Anniversary of the Company

Messages
Contributing to a sustainable society through recycling-enhancing business andincreasing corporate value through business portfolio reform

Strengthen global group management

Establish and deepen profit base

• Maximize profits of each operatingcompany• Promote strategic alliances and M&A• Pursue global synergies• Promote DX (Digital Transformation)✕• Realization of ESG management• Establish a global operations system• Strengthen group communication• Appropriate allocation of management
resources21

Summary of the Third
Medium-Term Business Plan

Reform of KPP GROUP WAY

The KPP Group’s management philosophy “KPP GROUP WAY” has been reformed along with our startwith the holding company structure- Introduced the concept of “Purpose Management.” Aim to be a company that contributes to the creation of a sustainable society based on the new KPP GROUP WAY.

Corporate Message

A Paper Trail for Creating The Future
MISSION

G lobalization
Leveraging our global network to become a leading pulp and paper company.

Contributing
to the realization
ペーパーイノベーションでof a recycling-oriented society
循環型社会の実現に貢献する
VISION

GIFT
Globalization Innovation Function Trust

I nnovation
Developing the potential of paper through a creative mind anda recycling-oriented business model.

F unction
Promote e-commerce and take on the challenges of new business domains.

T rustContinue being a sincere company trusted by stakeholders.

VALUES・ Pioneering The Future with “Paper Innovation”
・ Cultivate Autonomous Human Resources
・ Open-minded Organization

KPP Group Charter
Paper Innovation
DNA Supporting The Organization

22

Summary of the Third
Medium-Term Business Plan

Sustainability and ESG Management

KPP Group’s Basic Sustainability Policy
We, the KPP Group, will contribute to the realization of a sustainable society through the development of comprehensive recycling-oriented
management based on the basic principles of the “KPP GROUP WAY.”
We also consider the environment, society and governance as important management issues, identify material issues related to our businessactivities, and work to resolve these issues.

Material Issues of the KPP Group
Global Expansion

Response to DX

Implementation of Green Business• Expansion of • Development of
e-commerce
new systems• Solving the marine plastic
pollution problem

Climate Change Countermeasures

Diversity & Inclusion

Enhancement of Governance• Development of solutions toprevent global warming• Ensuring diversity• Creation of groupsynergies• Inner communication• Reduction of
CO2 Emissions• Utilization of diverse • Compliance
personnel• Recycling and waste reduction• Information security • Risk management

ESG Management Initiatives (For details, please refer to “Integrated Report 2022” https://www.kpp-gr.com/en/ir/report.html)[Issues]• Creation of a recyclingoriented society[Measures]• Establishment of a paper
recovery network andselling raw materials forrecovered paper• Endorsement of TCFD anddisclosure of information
related to climate change
countermeasures• Development anddistribution of products
and services with reduced
environmental impact• Response to climatechange• Spread of renewableenergy[Issues]• Human resource
development[Measures][Issues][Measures]• Introduction of fair personnel
system and implementation ofevaluation• Education (e-learning andtraining by rank)• Enhancement ofcorporate governance• Strengthening the global
governance structure• Diverse work systems• Development of an
employee-friendly work
environment• Diversity & Inclusion• Promotion of Green Biz
Project• Prevention of harassment• Response to long working
hours• Improvement of work-lifebalance• Promotion of women’s careeradvancement• Diversification of hiring practices• Forest conservation andreforestation• Raise awareness of paper
culture and book culture• Dissemination of information on
paper culture and book culture• Utilization of managed
forest resources• Reduction of poverty
and hunger• Various types of support• Disaster and incident
response• BCP• Evacuation drills
Safety confirmation drills• Diversity & Inclusion• Reinforcement of Groupwide security

23

Summary of the Third
Medium-Term Business Plan

Transition to a Holding Company Structure

Transition to a holding company structure was completed on October 1, 2022
Three core operating companies (Kokusai Pulp & Paper Co., Ltd., Antalis and Spicers) come under theholding company’s umbrella

KPP GROUP HOLDINGSBusiness area

Business area

Northeast Asia

Business area

Europe / North andSouth America

Asia-Pacific(Oceania / Southeast Asia and India)

Kokusai Pulp & Paper

AntalisSpicers(Japan)(France)(Australia)• Consolidated subsidiaries: 18• Number of employees:
Around 1,000• Head office: Japan (Tokyo)*• Consolidated subsidiaries: 57• Number of employees:
Around 4,000• Head office: France (Paris)• Consolidated subsidiaries: 16• Number of employees:
Around 450• Head office: Australia (near Melbourne)

Both the number of consolidated subsidiaries and the number of employees are as of March 31, 2023. Spicers includes KPP-AP.

[Consolidated Net Sales Ratio] * FYE March 2023
Asia-Pacific

7.5%

EuropeNorth America

Europe/SouthAmerica

Northeast
Asia

46.1%

46.4%

Northeast
Asia* Approximation,
excluding real estate(Kokusai Pulp &Paper)(Antalis)[Consolidated Operating Profit Ratio]

Southeast Asia
and India* FYE March 2023
Asia-PacificNortheast
Asia

9.9%

15.6%

South America
Oceania(Spicers)* Northeast Asia: Japan, China, Taiwan, Hong Kong and South Korea

Europe/South America

74.5%* Approximation,
excluding realestate24

Summary of the Third
Medium-Term Business Plan

Benefits of Becoming a Holding Company (Creating Synergies)✓ Strategy: Share strategies, tactics, and management
methods across regions✓ Human Resources: Optimizing global staffing✓ Functions: Eliminating duplicated functions throughshared services, etc.

✓ Sales: Business matching within the group.
Sharing know-how, skill information and salesorganizations/channels✓ SCM: Global sharing of distribution networks
and product inventories✓ Funding: Utilization of surplus funds✓ Credit: Utilization of credit✓ Taxation: Development of Global
Governance System

Management
Synergies

Financial
Synergies✓ Procurement: Achieving economies of scale
through joint procurement of products✓ Brand: Brand awareness and brand strength

Business
Synergies

25

Summary of the Third
Medium-Term Business Plan

Promoting Inorganic Growth (M&A/Alliance)

Aim for medium- to long-term growth by promoting inorganic growth (growth through acquisition of
external resources) as well as organic growth (growth through internal resources)

Organic Growth

Inorganic Growth

Expansion of recycling-based
business models

Expanding business domains
by acquiring external management resources
Total amount: JPY• Further expansion of recycling-oriented
businesses by balancing used paper businesswith product sales• Strengthen pulp business, including raw
materials for sanitary paper• Maximize profits by expanding the share of thepaper and paperboard wholesale business,and promoting e-commerce, while reducing
expenses• Expansion of solution businesses

20 billion (in three years)• Target business for M&A
Visualcommunication
business

Packagingbusiness

Other processing
businesses• Management resources to be acquired
Portfolio

Human
resources

Management
know-how

Offices andfacilities

26

Summary of the Third
Medium-Term Business Plan

Net Sales and Gross Profit
by Business Segment* From the Third Medium-Term Management Planannounced on June 13, 2022

Continue to promote business portfolio reforms under the Third Medium-Term Plan
Final year of the Second
Medium-Term Plan

Final year of the Third MediumTerm Plan (targets)FYE March 2022

FYE March 2025
JPY 650 billion
455

JPY 563.4 billion
Chemical products &Machinery, etc.
Visual communication

309

Packaging

776

Paper raw material

439

Board

605

650

500

+79.7%
1,300

JPY 92.9 billion

93

29

520
975

244
Paper

JPY 108 billion
25
183+67.6%
382

47
30

3,006

52
45

2,600
486
393

Net sales

Gross profit

Net sales

Gross profit

Ratio of visual communications and packaging businesses with higher gross margins to rise27

Summary of the Third
Medium-Term Business Plan

Regional Strategy Summary* From the Third Medium-Term Management Planannounced on June 13, 2022

Overseeing the global operations with the three pillars: KPP, Antalis and Spicers “North and South America”
and “Southeast Asia and India” start to fully expand businesses from the Third Medium-Term Plan.
Company inchargeKokusai Pulp &Paper

Area in charge

Final year of the Third
Medium-Term Plan

Sales Target

Strategy Overview

JPY 320 billion

・ Expand sales of paper and board by reviewing marketing methods focusing
on e-commerce while ensuring sales share and profits.
・ Promote comprehensive recycling-oriented business.
・ In China, increase both sales and profit by expanding sales volume in linewith market expansion.

EuropeJPY 250 billion

・ For paper & board, maintain the number 1 position in the region,and secure revenue and profit growth.
・ Packaging and visual communication businesses will make good useof the inorganic strategy to expand while capturing market expansion.
・ Promote e-commerce in all three businesses for further improvementof profit margin ratio.

North and SouthAmerica

JPY 20 billion

・ Consider full-scale entry into North America and implement inorganic strategy.

JPY 35 billion

・ Increase profitability by maintaining the market share in paper and board
in the region and promoting e-commerce.
・ Utilize inorganic strategy for packaging and visual communicationand pursue M&A actively.
・ Further promote adhesive labels as a product segment.

JPY 25 billion

・ Complete organizational restructuring. Promote business by utilizing know-how
under the control of Spicers.
・ Aim for growth by capturing market expansion in the area of paper and board,packaging and visual communication.

Northeast Asia

(KPP)

AntalisOceania
Spicers
Southeast Asia
and India

28

Summary of the Third
Medium-Term Business Plan

Targets for the Final Year 2025 of
the Third Medium-Term Plan

* From the Third Medium-Term Management Planannounced on June 13, 2022

Aiming to increase both sales and profits with more profitability(JPY million)FYE March 2022

FYE March 2025

Growth rate

Net sales

563,414650,000+15.4%

Operating profit

9,379

14,500+54.6%

Operating margin

1.7%

2.2%

+0.5ptNet profit

7,497

9,000

+20.0%

ROE

15.0%

12.0% or more

-

ROA

2.7%

2.5% or more-

Measures to achieve targets
・ Improvement in profitability: Increase in sales
and operating profit ratio, etc.

・ Improvement of asset efficiency: Group business
management through ROIC, etc.

Targets for improving financial position

DE ratio*1

Capital adequacy ratio

FYE March 2022

FYE March 2025

1.4 times

1.0 time or less

19.4%

25.0% or more

*1. DE ratio: Interest-bearing debt / net assets

29Summary of the Third
Medium-Term Business Plan

* From the Third Medium-Term Management Plan

Cash Flow Allocation

announced on June 13, 2022

Increasing corporate value by growth investment within operating cash flow
Improving our financial position by accumulating retained earnings
Maintaining a net debt-to-equity ratio of less than 1× and increase equity ratio to 25% or more

Shareholder returns are based on an appropriate amount of retained earnings

Cash inflow

Cash outflow

Sale of fixed assets andcross-shareholdings
Cash and +Return of fund management
deposits
Collection of doubtful debt

Repayment of interest-bearing debt

Operating cash flow
Three-year cumulative amountJPY

36.0billion

Growth Investments
Investment amount used forinorganic strategy (M&A, etc.)
approximately JPY

20.0billion(free cash flow)

JPY

23.0billion

Retained earnings

Shareholder returns (dividends)
Use of external funds
30Reference
Materials

Company Profile

A group of paper merchants with a 99-year history
Company Name
Established
Representative
Head Office
AddressKPP GROUP HOLDINGS CO., LTD.
November 1924

Madoka Tanabe, Chairman & Chief Executive Officer
Tadashi Kurihara, President
6-24 Akashi-cho, Chuo-ku, Tokyo

CapitalJPY 4,723 million

Employees

5,457 (consolidated)*

As of March 31, 2023

■ Number of Countries

43■ Number of Cities

134■ Number of Bases

151* As of March 31, 2023

Status of shareholders*

Foreigncorporations, etc.

As of September 30, 2023

Oji Holdings Corporation

17.3%

The Master Trust Bank of Japan, Ltd. (trust account)

7.8%

Nippon Paper Industries Co., Ltd.

7.1%

KPP Group Holdings(Employee Stock Ownership Association)

3.1%

Principal
Custody Bank of Japan, Ltd.
shareholders Mizuho Bank, Ltd.

5.81%

Trust banks

3.1%
2.5%

Mitsui Sumitomo Insurance Company, Limited

2.4%

MUFG Bank, Ltd.

2.3%

Sumitomo Mitsui Banking Corporation

2.3%

The Norinchukin Bank

2.3%

Other
corporations

15.78%

Financial
institutions

Shareownership ratio
by owner

32.53%

17.89%
Individuals
and others

27.98%

31

Reference
Materials

Paper and Paperboard Business (Domestic)

Paper
Deals in newsprint, printing paper, and information-related paper.
There is a wide range of paper types, and we make proposals that match the properties
and characteristics of each type of paper depending on the application.

Paperboard
Paperboard is mainly classified into “container board” and “folding box board” and is widely used
for packaging.
“Container board” is the base paper used to make corrugated boxes, and accounts for about
80% of all paperboard.
“Folding box board” is the base paper for paper boxes such as candy, tissues, cards, etc.

Paper manufacturers

Users

Paper
Merchant（Secondary trading）

Printing companies,
newspaper companies,
publishers,
stationery manufacturers,
wrapping paper manufacturers,
packaging paper manufacturers,
etc.

Consumers
Product

Kokusai Pulp &Paper• Independent common distributors- Primary paper distribution is mainly classified into paper manufacturer affiliates, general trading company affiliates,
and independent common distributors
32

Reference
Materials

Domestic and Overseas Business Models in the Paper BusinessHybrid and global deployment of three business models in different regions

Paper Trading type

Paper Distribution type

Paper Merchant type

Overseas business model

Domestic business modelBusiness models in Europe and America

MissionMissionMissionTrading business utilizing global
network in paper, paperboard
and paper materials

Paper-related wholesale businesscombining indent business(consignment sales) with stockbusiness (inventory sales)

High-value-added business through cutting
and processing and sales of own-brandproducts with large-scale logistics
and delivery functions

Gross margin* ratio

Gross margin* ratio

Gross margin* ratio

approx. 3%

approx. 6%

approx. 25%*Gross margin ratio in normal times

Maximizing profitability and efficiency by developing various businessmodels appropriate for each region33

Reference
Materials

Adhesive Label Business**Adhesive Labels Business ... Paper Business

Adhesive Label Business in Oceania
Providing services in all fields, including daily necessities, food and beverage, medical andpharmaceutical, logistics and distribution, and industrial-related fields.
- Propose to customers the best combination of surface materials, adhesives,
release paper and release film for various applications.
- Wide range of supply sources, especially in Asia and Europe- A large selection of approx. 100 different products.
- In-house slitting process provides added value, responding flexibly to customer specifications.
Daily Necessities

Logistics

Food & Beverage

OthersMedical Care

34

Reference
Materials

Packaging Business (Customized Solutions)Customized solutions (Antalis)
Experts who provide customized solutions that meet customer needs for a wide range of packaging material Providing services
in a wide range of industrial fields, including automobiles, electronics, high-tech, machinery, metals, food, chemicals and so on.
ExpertInquiries from Customers✓ What protection does the product need?
✓ What are the transportation modes androutes, and the situation of on-site
inventory?
✓ What do your internal logistics look like?
✓ What about the disposal after use?

We have products that need
protection, but we can’t find astandard packaging solution to meet
our needs.

・Carefully consider customers unique cases and develop a solution that meets their requirements
・Procurement of the highest quality packaging materials at competitive prices through a broad network of suppliers and manufacturers
Packaging Design Center

Providing a variety of packaging materials (examples)

Corrugatedcardboard

FoamcushionAir
cushionPaper
cushionHoneycomb panel

Gap filling buffermaterial

Firm
packagingmaterial

Bag-type air
cushioning
material

Corrugated
foam

35

Reference
Materials

Visual Communication BusinessWe provide solutions and products ranging from large-format inkjet printers to inks and other consumables,and materials for indoor and outdoor signage, displays, and car wrapping- Experienced marketing teams provide high-level user support
Examples of indoor and outdoor signage, display, wrapping, etc.

* Examples of projects in which products of Antalis’ visual communication series were delivered in collaboration with architects, interior designers, printers
and advertising agencies.

Coala Air Board

1

COALA STICKY
WALL S

2

COALA ROLL-UP
ECO

3

COALA
ROLL-UP
PET S

4

COALA
ORGANZA

5COALA
INTERIOR FILM

6

STADUR SIGNEASYPRINTBLACK7COALA FLOOR& WALL R

8

DIBOND36

Reference
Materials

Paper Raw Materials Business (domestic)

Paper raw material (pulp and used paper)
Currently, approximately 40% of the raw material consumed by the entire paper industry is pulp,
and the remaining 60% is used paper.
We use our domestic and international network to procure pulp and used paper,and to sell them to paper manufacturers.

Artery Business

Secondary wholesaler/user

users（ Product Sales ）Annual sales results
approx.

Products
Paper・
Paperboard

1.8million tons

Paper and
paperboard
business

Final users（Companies, homes, etc.）

製紙メーカー

Used Paper

Annual collection
results
approx.

Used Paper

Wholesaler of used paper

1.1million tons

Collection

Paper rawmaterials
business

Vein Business（ Collecting used paper ）• Recycling industry through recycling of used paper- Japan’s paper industry is characterized by the recycling of used paper.
- Kokusai Pulp & Paper plays an important function in this process and has been working for many
years toward the realization of a sustainable society.
37Reference
Materials

Comprehensive Recycling-Oriented Business Model in Japan

Aiming for management with an eye to a circular economy, we promote the material recycling business that supplies recovered paper andother recycled resources; develop and offer biomass power plant operation support systems; and advance the power generation business thatuses by-products emitted from factories as the main fuel.
Material recycling

Reduction of GHG Emissions

Contributing to the realization of a circular economy
through recycling-oriented business⚫

Town ecomo

Contributing to reducing greenhouse gas emissions
through projects to support biomass power generation

Utilizing the collection network of used paper wholesalersthroughout Japan.Collected used paper is delivered to paper
manufacturers as raw materials for paper (recycling
material)

⚫

⚫
⚫

⚫

Town ecomo and other measures to collect recovered paper
from stores
Provision of the ecomo Closed Recycling Service,
which visualizes resource emissions, recycling routes,
and recycling volumes

Development of BMecomo, an operation support
system for biomass power plants using AI and IoTtechnologies
Contributing to the realization of a circular economy
and a decarbonized society through Power Purchase
Agreements (PPA) in which by-products from factories
are used as fuel.

Collection bins for used paper are installed at supermarkets
and other retail stores. Old newspapers and magazines arebrought from home for recycling. Points are given according
to the weight.
Sawmills/
Construction sites

Forests

Pulp
manufacturers

BM ecomo
Forests
Distribution

Distribution

Collection

Offices/Households

Paper
manufacturers

Material
recycling

Distribution
Printing/
Processing
companies

Reductionof GHG
Emissions

https://bmecomo.com/
Consumers

BM ecomo supports daily operations and business
management by gathering and analyzing all data obtained
from biomass power plants, utilizing the latest technology
and providing visualization, thereby helping maximize theprofits of biomass power plants.
Purchase waste wood from construction material
manufacturers and supply it to biomass power plants.

Power
Stations
Supporting
operation

38

Reference
Materials

KPP RISANET Network and Recovered Paper Collection (Japan)

KPP RISANET

An association founded in 2013 to promote mutual friendship among its members,
is … conduct the recovered paper collection business based on sound management,
and contribute to the development of the industry.

2013

2023

(At the time of establishment)(At present)

Number ofmembers

17 companies

31 companies

Recoveredpapercollection

approx. 3 million tons

approx. 7 million tons

(Annual)Paper and paperboard
consumption in Japan

23.15 million tons* (2021)

Equivalent to about 40% ofrecovered paper collected in Japan
Recovered paper collectionin Japan

18.39 million tons* (2021)
Utilize the KPP RISANET Network and contribute to
the realization of a comprehensive recycling-oriented society*

Source: Fastmarkets RISI Annual review of global pulp & paper statistics, 2021

39

Reference
Materials

Example of ESG Management Green Products / Green Solutions

KPP Group’s Green Products
Promotion of
paper solutions

Due to the marine plastic pollution problem, moves to restrict disposable plastic are accelerating in countries around the globe, and demandfor paper as an alternative material is rising.
In recent years, research and development has been progressed mainly by paper manufacturers, and there has been an increase inexamples of food packaging and daily necessities.
Examples: Cutlery, clear folders, face covers, hangers, paper packaging, cushioning, packaging, etc.

Reduction ofplastic use

These products reduce the use of petroleum-derived plastic by innovating manufacturing technologies and mixing in biomass-derived pulp
and paper to an extent that does not detract from plastic’s characteristics such as barrier properties and processing suitability.
Examples: Paper-made cold insulation box, paper + film packaging materials, waterproof & oilproof paper, etc.

Biomass
materials

As it is often difficult to switch plastic to other materials due to its various characteristics,
research is being conducted with the aim of reducing the environmental impact. Biomass plastic manufactured using biomass materials andbiodegradable plastic that is broken down
by microorganisms are some examples.
Examples: In-store point of purchase (POP) advertising, fishing equipment, cutlery, etc.

Green solutions

Paper-based clear folders

Try-on face cover for clothes shop

Reduced plastic cutlery

Artificial grass made of paper yarn

Town ecomo

A system to collect recovered paper generated at home in collection boxes installed at retail stores and grant points according to their weight. This paper isrecycled as raw materials for paper.

Office ecomo

A system to safely collect confidential documents generated in offices in special boxes and recycle them as raw materials for paper.

ecomo Closed
Recycling System
BMecoomo

A solution service that enables our client companies to visualize their recycling loop by centrally managing the process from the supply of paper to the collection
and recycling of recovered paper.
A system that helps optimize the operation of biomass power plants by utilizing the latest technologies such as big data analysis, AI and the IoT.

40

Reference
Materials“Green Products & Solutions” Catalog and Sample Kits

We created a catalog introducing products and solutions that help reduce environmental impact. Six samplesof paper solutions and reduction of plastic use are enclosed.
Products and solutions are presented in three categories: Retail/Restaurant/Office, Manufacturers, and Logistics Warehouse
Six samples of environmentally friendly products, such as paper solutions and reduction of plastic use, are enclosed.

Sample Kit request form https://shifton.kpp-gr.com/catalogue_form.html[Kami no ito (paper yarn) OJO+][modo-cell®]• Made from 100% “OJO +,” paper threads derived from Japanesewashi paper made from natural materials (Manila hemp)• Main raw materials are plant fiber, starch and plantbased resin• The texture is smooth, and it is hard to believe that it was madeof paper• Various molding methods can be applied[Paper face cover]• Paper face cover made mainly from pulp
Used in fitting rooms in a clothes shop
• Reduces plastic use by about 70% compared with petroleumbased nonwoven fabrics[Coala Air Board]• Antalis’ brand, Koala Air Board, is a sustainable material madeof 100% recyclable paper• Used for panels and fixtures in exhibitions[Paper packaging materials]• Consists of “pure white paper, polyethylene (PE),aluminum vacuum metallizing PET (VMPET), PE, andlinear low-density (LL) polyethylene film”• Paper packaging materials that can have “Paper Mark,”
an identification mark requested by laws and regulations,applied to them

[Paper clear file]• Paper clear file bound with eco-press binder• Very eco-friendly stationery that is manufactured without
the use of glue, heat or staples

41

Reference
Materials

Digital Marketing Initiatives

Service site “SHIFT ON”- Part of our digital marketing initiatives. The goal is to create customer contacts and prospects.
At the same time, we will introduce marketing automation (MA) tools to sophisticate marketing.

https://shifton.kpp-gr.com/

Environmental and newfunctional materials solutions
Comprehensive support for the planning and implementation ofenvironmental projects, including SDGs and carbon neutrality.
Packaging solution
Helping customers solve their management issues through thedevelopment of packaging materials and original packaging.
Total solution for sales promotion
Comprehensive support for the policies of sales promotion tools
installed inside and outside stores, from material selection to supply.

Analyze the potential needs of customers from the three perspectives of “environment/functional materials,” “packaging,” and “sales promotion,”
thereby providing solutions that can be realized with materials and systems- Solve important management issues such as improving operational efficiency, reducing costs, reforming work styles, and improving corporate value

Customer concerns and issues
Sales are slow because of limited daily shipments
Improving
operational
efficiency

Packing is a bottleneck and shipping is not progressing smoothly
Too much cushioning

Standardiz
ing ofoperation

Different workers put in different amounts of cushioning material.
Quality of service is not standardized.
The speed of the packing work is different from line to line,
complicating management
Want to improve the packing skills of temporary workers
hired during the busy season
Do not know what to start with in terms of environmental initiatives

Greenefforts

Packing is a bottleneck and shipping is not progressing smoothly
Looking for alternative packaging that can contribute to SDGs

Operational improvement proposal
Improving operational
efficiency and leveling
operations through theintroduction of automatedmachines for packaging

Green material proposal
Achieve plastic-free
operations by changing someof the packaging materials
from petroleum-derived
materials to paper

42Reference
Materials

PAPER MALL (EC Site for Paper-Related Products)

https://www.kpps.jp/papermall/Our website “Paper Mall” offers approx. 1,000 types of general paper, specialty paper
and paper products, which can be purchased from a single sheet of paper.
Samples and sample books can be ordered free of charge, and we also offer a processing
service to cut general paper into desired sizes to meet a wide range of customer needs.
We have strengthened the lineup of our “Green Products” series of environmentally friendly
products (see below) to help all stakeholders who are working on SDGs.
This is a comprehensive paper-related website that makes the most of the strengths ofour company, a paper specialist, such as the ability to make prompt deliveries through the
network of KOKUSAI PULP & PAPER CO., LTD., the ability to check the latest paper-related
information such as paper industry news, and the ability to receive questions and consultations
about paper.

■ Green Products: Environmentally friendly products

・ Promotion of paper solutions
Microplastics are a cause of marine pollution. There is a need to develop materials
that can replace plastic.
We are working to change to paper, i.e., switching to products made from paper.

・ Plastic Reduction
We will reduce the amount of plastic used by mixing in other materials while maintaining
the properties of the plastic.
We are developing materials and products to reduce the amount of plastic used.

・ Bioplastics
https://www.kpps.jp/papermall/greenproducts/

Plastics that return to the soil as compost and do not remain after being decomposed by
microorganisms and other natural elements.
We are developing materials and products in search of the possibilities of biodegradable plastics
and biomass plastics.

43

Reference
Materials

Key Communication Tools
Integrated Report

TSUNAGU(Public relations magazine)

SNS
YouTubeX (formerly Twitter)

Instagram

The report has been published since 2016 in order toprovide comprehensive and integrated financial and nonfinancial information on our activities.

The magazine is distributed as a communication toolthat acts as a bridge between stakeholders and the KPP
Group. It provides the latest KPP news while highlighting
the various potential and attractive qualities of paper.

https://www.kpp-gr.com/ja/ir/library/integrated.html

https://www.kpp-gr.com/ja/tsunagu.html

To our stakeholders, we provide a wide range of
information on our initiatives from various angles with amixture of video and images through these social media
accounts as needed.

Contact
Corporate Communications Office
TEL:03-3542-4169
https://www.kpp-gr.com/en/contact/contact3.html

44Disclaimer

This document contains forward-looking statements, future plans, and management targets related to
the Company.These forward-looking statements are based on current assumptions regarding future
events and trends and are not guaranteed to be accurate.
Actual results may differ materially from those presented herein due to various factors.

Unless otherwise stated, the financial data presented herein are presented in accordance withaccounting principles generally accepted in Japan.
The Company does not necessarily make any revisions to the forward-looking statements it has made,regardless of the occurrence of future events, etc., except when required by the Disclosure Rules.
Information relating to other companies is based on publicly known information.
This document does not constitute solicitation of offers to acquire, offer to sell, or offer to buy any
securities (hereinafter referred to as “solicitation”). It is not intended for solicitation activities, nor can it
be the basis for any contract or obligation.
This English document is just a translation of the Japanese document. Therefore, please use thisEnglish document only for convenience and refer to the original Japanese document as appropriate.

Contact
KPP GROUP HOLDINGS CO., LTD. Investor Relations Contact
https://www.kpp-gr.com/en/contact/contact3.html

45

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