Financial Results for the Fiscal
Year Ended March 31, 2021
June 2021

KOKUSAI PULP & PAPER CO., LTD.
Tokyo Stock Exchange 1st Section

9274

Contents

I

Fiscal Year Ended March 2021

II

Forecast for the Fiscal Year Ended
March 2022

III

Outline of Medium and Long-Term Growth
Strategy

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Impact of the COVID-19
Summary⚫ Japan : Demand is expected to exceed the previous year's level for this fiscal
year despite the current severe situation following the third declaration of astate of emergency.
⚫ Overseas : In regions such as Australia and China where COVID-19 has beensuccessfully controlled, sales have been strong. On the other hand, in ASEAN
and Europe, sales were weak, although they are starting to recover.
While the demand for graphic paper such as
flyers was sluggish, sales of comic books
was bullish and educational reference books
was also strong with stay-at-homeconsumption providing a tailwind.

⚫

Folding box board sales was weak due toplummeting inbound demand. Demand forcontainerboard was firm, mainly due to ecommerce consumption.

⚫

The amount of used paper has decreased
due to the fall in paper and paperboard
consumption in Japan. Growing demand forcorrugated cardboard has led to a worldwide
shortage of used paper.

⚫

Demand increased for pulp as a substitutefor used paper in China, the largest market
for pulp, due to a ban on the import of usedpaper. In addition, prices have skyrocketedsince the beginning of 2021 due to ashortage of containers.

⚫ The demand in ASEAN and the UnitedStates was sluggish due to COVID-19
pandemic. On the other hand, demandin China has recovered quickly.
⚫ ANZ 's* sign and display businessperformed well.

Overseas
marketDomestic
market⚫

⚫ In Europe, demand for graphic paperand visual communications was weak,
however, as the number of new
infections of COVID-19 has declined,
demand is recovering. On the other
hand, the demand for packaging paper
has been strong through the last fiscal
year.
⚫ Antalis (France) will contribute fully to
our group from this fiscal year.
* ANZ. Australia/ New Zealand

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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I

Fiscal Year Ended March 2021

Fiscal Year Ended March 2021
Sales
Operating loss

Net profit✓ The revenue increased due to the contribution of acquired subsidiaries such as
Spicers of Australia and Antalis of France.
✓ The operating loss due to provision of allowance for doubtful accounts in Hong
Kong and China✓ The net profit increased due to recording of extraordinary profit such as sales of
fixed assets
Fiscal year ended March
2020

Fiscal year ended March 2021

(Million yen)

Year-on-yearcomparison

Sales ratio

Sales ratio

Variance

Sales

381,397

100.0%

430,404

100.0%+49,007+12.8%

Gross profit

23,708

6.2%

51,91512.1%+28,206+119.0%

SG & A

21,857

5.7%

60,95014.2%+39,093+178.9%Operating profit

1,850

0.5%

(9,035)-(10,885)-

Ordinary profit

2,194

0.6%

(12,041)-(14,236)-

Profit attributable toowners of parent

1,232

0.3%

1,416

0.3%

+184

+15.0%

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Fiscal Year Ended March 2021 (by Segment)✓ The demand for comic books was bullish, and for study reference books was alsostrong due to stay-at-home consumption, but demand for flyers decreased due tocancellation of events.

Domestic
business
Overseasbusiness✓ Sales doubled due to the contribution of Spicers of Australia and Antalis of France.

Real estate leasing
business✓ KPP Yaesu Building, one of the main properties, was fully occupied, and unit rent
increased for some tenants.

Fiscal year
ended March
2020(Million yen)
Wholesale pulp
and paper,
Domestic locations
Wholesale pulp
and paper,
Overseas locations

Real estate leasing

Year-on-yearcomparison

Variance

290,738

252,104(38,634)(13.3%)

Segment profit

4,088

3,710

(377)

(9.2%)

Profit ratio

1.4%

1.5%

+0.1P

-

89,446

177,052+87,606+97.9%

179(10,557)(10,736)-

Profit ratio

0.2%

-

-

-

Sales

1,212

1,247

+35

+2.9%

590

629

+38

+6.6%

48.7%

50.4%

+1.7P

-

381,397

430,404+49,007+12.8%

Segment profit

4,858(6217)(11,075)-

Adjustments(3007)(2817)+189-

Operating profit

1,850(9035)(10,885)-

Profit ratio

0.5%

-

-

-

Sales

Sales
Segment profit

Segment profit
Profit ratio
Sales

Total

Fiscal year ended March 2021

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Sales and Operating Profit by Segment(Million yen)

(Million yen)+35

Impact oflower sales+87,606

Effect of acquisition
of Spicers andAntalisEffect ofallowance for
doubtful accounts

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Current Financial Condition⚫ Total assets increased due to acquisition of Antalis. Net assets decreased due to provision for doubtful
accounts in Hong Kong and China businesses. Equity ratio declined significantly (from 24.9% to 15.8%)⚫ From this fiscal year onward, KPP aims to quickly recover its capital adequacy ratio through constantprofit recognition due to recovery of business performance, efficient asset management and cash
management (15.8% → 25% target).

Balance Sheet Summary(as of March 31, 2020)

Balance Sheet Summary(as of March 31, 2021)(Million yen)

Assets
189,317

Liabilities
142,040

Assets275,119

Equity47,277
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

Liabilities
231,537

Equity43,5817

II

Forecast for the Fiscal Year Ended March 31 2022

Forecast for the Fiscal Year Ended March 2022
Sales
Operating
ProfitNet Profit✓ In addition to the recovery of existing businesses, Antalis' performance willcontribute throughout the year
✓ Reach a record high due to the completion of provision of allowance for doubtful
accounts✓ Operating profit and ordinary profit are expected to return to black,and net profit is expected to increase.

Forecast for the fiscal Year ended March2022

Fiscal year ended March
2021(Million yen)

Sales ratio

Sales ratio

Year-on-Year

Variance

Sales

430,404

100.0%

534,000

100.0%+103,596+24.1%

Operating profit(9,035)

-

4,900

0.9%

+13,935-

Ordinary profit(12,041)

-

3,400

0.6%

+15,441

-

1,416

0.3%

2,300

0.4%

+884

+62.4%

19.7 yen-

32.03 yen-+ 12.33 yen-

Profit attributable toowners of parent
Basic earnings per
share* As the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29) has been applied from the beginning of the
fiscal year ended March 31, 2022, the above earnings forecast is the amount after the application of the said accounting standard.

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Forecast by Segment for Fiscal Year Ended March 2022
Domestic
business
Overseasbusiness✓ Assume increased demand for paper and paperboard due to economic recovery
and stable pulp prices✓ In addition to the full year contribution of Antalis, we expect to restructure ourbusinesses in China.

(Million yen)
Wholesale pulp andpaper, domestic
locations
Wholesale pulp andpaper, overseas
locations

Variance

244,300(7,804)(3.1%)

Segment profit

3,710

4,000

+290

+7.8%

Profit ratio

1.5%

1.6%

+0.1P

-

Sales

177,052

288,500+111,447+62.9%

Segment profit(10,557)

3,500+14,057

-

-

1.2%

-

-

1,247

1,200

△ 47

(3.8%)

629

100

(529)

(84.1%)

50.4%

8.3%

△ 42.1P-

Sales

430,404

534,000+103,596+24.1%

Segment profit(6,217)

7,600+13,817-

Adjustments(2,817)(2,700)+117-

Operating profit(9,035)4,900+13,935

-

-

0.9%

-

-

Profit ratio

Segment profit
Profit ratio

Total

Year-on-yearcomparison

252,104

Sales

Sales

Real estate leasing

Forecast for the fiscal year
ended March 2022

Fiscal Year
ended March
2021

Profit Ratio

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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III

Outline of Medium and Long Term Growth Strategy

External Environment Surrounding the Group⚫ Packaging paper and sanitary paper are growing markets, accounting for more than 2/3of the world's paper and paperboard production volume. Market growth in this areas is
linked to GDP growth⚫ Japan, Europe and ANZ are expected to turn to positive GDP growth from 2021. China
will continue to grow.
GDP Growth Rate in Japan, Europe,
ANZ and China
Newsprint
paper
Printing andcommunication
paper

Sanitary
paper

Other

Japan

Europe

ANZ

China

8.4%

4.5%
4.4%

Maturemarket2.3%

Growing
market

3.3%

5.6%
3.8%
2.5% 2.8%

Packaging
paper

2020
-2.5%

2021

2022年

（Forecast）（Forecast）-4.8%(Company survey)-6.6%(Source : IMF "World Economic Outlook (WEO) April 2021")

Our business environment is steadily improving.
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Current Business Conditions：Monthly sales - YoY ratio⚫ Demand in Japan and Europe has been sluggish for a long time due to the declaration of a state of
emergency and a number of lockdowns. However, there has been a clear recovery trend.
⚫ Australia performed well due to the early suppression of COVID-19, the recovery of the Australian
dollar and the New Zealand dollar.
⚫ We have changed our business model in China, bringing a significant improvement in performanceby improved earnings and a recovery in market demand.
■Japan■ANZJanuary■Europe and Latin

February

March■ChinaApril

2021* Figures for the China business after application of AccountingStandard for Revenue Recognition (ASBJ Statement No. 29)

The economy has been recoveringin line with rate of vaccination against COVID-19, acceleratedly since March, 2021
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Progress of the Second Medium-Term Business Plan
Fiscal year ended March 2022 (the final year of Our Second Medium-Term Business Plan)

Initial target

Forecast(as of December 5, 2019)(as of May 14, 2021)

Variance

Sales

430 billion yen

534 billion yen+ 104 billion yen

Operating profit

3 billion yen

4.9 billion yen+ 1.9 billion yen

Our company's business performance is expected to substantially exceed theinitial target due to the contribution of Spicers Limited and Antalis S.A.S(Billion yen)

Sales(Left axis）

600
450

(Billion yen)

Operating profit(Right axis)

10

534
385

2

381

5

430
2

5

300

0

150

△5
△9

0
2019/32020/32021/3△ 102022/3（Forecast）

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Our Basic Strategy
Expansion of e-commerce business (IT platform for graphics paper)

Key issues

Expansion of biomass-based products (expansion of packaging business)

Market development after COVID-19①

Portfolio strategy (fourth pillar after paper business, packaging business and VC business)⇒ Environmental businesses②

Regional strategy : Building a sales network on five continents

Acquiring External Resources through M&A :Spicers Limited and Antalis S.A.S
Diversification of business segments
The businesses of Spicers and Antalis
to be in Our Core Business

Increase of overseas market share
We will gain market sharein five continents⚫ Packaging solution⚫ KPP (Northeast Asia)⚫ Visual communication⚫ Spicers (ANZ)⚫ E-commerce (paper business)⚫ Antalis (Europe and South America)⚫ Environmental business⚫ KPP AP (ASEAN + India)⚫ Keishin Paper Industry (China)
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Expanding Businesses in Growing Markets⚫ In the mature markets of Japan, Europe, and ANZ, we will maximise profits throughour portfolio restructures.
⚫ In China (the world's largest market) and rapidly growing ASEAN markets,
we will expand businesses through our group companies reorganization mainly of
Keishin Papers Trade (China) and KPP ASIA-PACIFIC (ASEAN).

Market Size
China
110 million tons

Europe97 million tonsJapan
25 million tons

ASEAN
25 million tons
ANZ
4 million tons

(Company survey)

KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Our Organisational Structure
Supporting Global Management Strategy (Image)

パシフィック**Overseas Paper Trading

アジア・Asia Pacific

Europe and
欧州・ラテン
Latin
America

海

A

市

場

S

市

E

A

N

＋

場

イ
ン
デ
ン

国
市
場

ト

U
K

&
E

U

市
場

Latin America

ド

本

中

UK and EU

場

ン

A

外

China

市

イ

Japan

Z

ASEAN and
India

ANZ

N

日

ラ
テ
ン
ア
メ
リ
カ
市
場

KPP-Antalis* Asia Pacific … ASEAN countries such as Indonesia, Singapore, Thailand, Philippines, Vietnam and Malaysia + India
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Domestic BusinessIn charge⚫

Became one of the largest paper trading
companies in Japan through major mergers in1999 (Nichia Co., Ltd.) and 2006 (Hattori
Paper & Board Ltd.)⚫

Acquired paperboard business and pulp /recovered paper business (for packaging)through the acquisition of Sumisho Paper Co.,
Ltd. in 2013⚫

Build a recycling-oriented business by thelargest paper and paperboard sales in Japanand collecting used paper. Clear differentiationfrom other companies in the industry➢

Creating synergies with overseas groupcompanies (package business and VC
business)➢

Expanding the market share of paper andused paper businesses by promoting
comprehensive recycling-oriented businesses➢

Promoting biomass power plant business andexpanding platforms for environment-related
products➢

Significant reduction in costs (SG&A) throughpromotion of DX

Achievement

Plannedmeasures

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ANZ BusinessIn charge

Achievement⚫ Paper wholesale business: expansionof the supply chain and improvementof customer service with KPP group’s
resource⚫ Reformed sign & display business,adhesive products business, and foodpackaging business

Plannedmeasures⚫ Expanded synergies and market sharethrough acquiring Direct Paper(paperboard merchant), Rojo Pacific(industrial sign and display), andBlueprint (visual sign and display)➢ Optimization of paper businessthrough e-commerce➢ Integration of group companies' bases
and optimization of logistics➢ Expansion of environment-related
products and bolt-on M&A
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Europe and Latin BusinessIn charge

Achievement⚫ Improved profitability throughbusiness portfolio reforms⚫ Improvement of financing andrestoration of creditworthinesssupported by KPP Group⚫ Improved asset efficiency byconsolidating bases, optimizing
personnel, and deal with COVID-19

Plannedmeasures➢ Converting paper business to ecommerce (online shopping on thewebsite)➢ Solid expansion of packaging,recovery of VC business andexpansion of market share throughM&A➢ Cost reduction through continuous
promotion of asset efficiency
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China BusinessIn charge

Achievement⚫ Restructured the business model from an Indent business to a direct
sales business for local companies⚫ Optimization of personnel allocationand expansion of sales distribution
bases. Establishment of credit
management and IT systems.

Plannedmeasures➢ Integration with Antalis China andmaximization of synergies➢ Collaboration with Antalis China tomeet a wide range of customer
needs, from high-end tocommodities➢ Aiming to become the largest paper
trading company in China

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Asia Pacific BusinessIn charge

Achievement⚫ Integration of KPP-AP (Asia
Pacific) and Antalis AP⚫ Improvement of supply chain
management⚫ Change in overall management
structure

Plannedmeasures➢ Transfer of former Antalis Asia's
China business to Keishin Paper➢ Reduce costs by consolidatingbases and optimizing personnel
allocation➢ Business expansion throughM&A (paper merchants orprocessing companies)
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Our regional strategy and portfolio
Regional and Business Segment Matrix
Business segment

Area

Paper

Paper
manufacturing
materials(pulp andused paper)Northeast Asia○○

Asia Pacific○○

Europe andSouth America○

North America○

Packaging

Visualcommunication

Chemicals &machinerysales andothers○○○(ANZ market only)(ANZ market only)

○

○

○

○

※ 〇 means that KPP group has already entered the segments. Regarding the field left blank, we plan to develop
the business in the future.
※ Paper business is a wholesale business of paper and paperboard.

Covering major regions of the world withdiversified businesses (products)
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Sales and Operating Profit Growth
by Overseas Business Expansion and Portfolio Restructures
Sales growth picture（Fiscal years ended March 31）(100 million yen)

Second Medium-Term Business
Plan Period

3,849

3,813

2019/32020/34,304
2021/35,340
2022(Forecast)< Third Medium-TermBusiness Plan >2025(100thAnniversary)

Operating profit growth picture（Fiscal years ended March 31）(100 million yen)

Second Medium-Term Business
Plan Period
23

49

19

< Third Medium-TermBusiness Plan >△ 90
2019/32020/32021/32022(Forecast)

2025(100thAnniversary)

Pursuing rapid growth with both business and regional strategies
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Free Cash Flow and Interest Bearing Debt
(100 million yen) ■ Operating cash flow ■ Investment cash flow ■ Free cash flow

100

Cash Flows

50
0

Growth of Free Cash Flow

165
37

42

* Excluding the impact of sales of fixed assets

49

29
△ 28

△5
△ 77

△ 50

△ 35

△ 64

△ 100
(100 million yen)

1,000
800

■ Cash and deposits■ Interest-bearing debt ■ Net interest-bearing debt

Reduction of Interest Bearing Debts

Interest Bearing Debt
165

600

832

400
200
0

28

413

385

77

Fiscal Year Ended
March 31, 2019

478

Fiscal Year Ended
March 31, 2020

■ Growth of free cash flow
✓
✓
✓

527

400

Shortening collection cycles and extending payment terms
Reduction of product inventory and increase of stock turn
Effective use of idle real estate305
Fiscal Year Ended
March 31, 2021

Fiscal Year Ended March 31, 2025
(100th Anniversary)

Main Measures■ Reduction of interest bearing debt
✓
✓
✓

✓

Efficient management of funds
Sale of fixed assets and cross-shareholdings
Collection of non-performing loans(loans recorded as allowance for doubtful accounts
in the previous period)
Consolidation and efficient operation of overseas distribution bases

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Dividend Policy
Dividends per share (past 10 fiscal years)
12
10
Listing Commemorative Dividend 2 yen

8
6

Plan

4
2
0
FY 2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2025
(100th Anniversary)■ Stable and continuous dividends with a target payout ratio of 30%➣Plans to pay a dividend of 10 yen for the fiscal year ended March 31, 2021

Aiming to increase dividends as a result of profit growth
while considering a balance between investments andshareholder returns
KOKUSAI PULP&PAPER CO.,LTD. ALL RIGHTS RESERVED 2021

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Medium & Long-Term Growth Image :Growth Roadmap toward Our 100th Anniversary
Earning power(Profit margin)

Business structure reform periodBusiness development periodBusiness completion period

Focusing on Overseas Markets

Global Management
Establishing a Total Recycling
Company

Investment in growth engines
and overseas expansion

Enhancing profitability

FY2024FY2022Business portfolio
restructure

FY2019Putting the finishing touches on
our 100th Anniversary

FY2016

Expansion of business areas(Sales)First

SecondThird

Medium-Term Business Plan (1st to 3rd)
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Disclaimer⚫ This document contains forward-looking statements, future plans, and managementtargets 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 accordancewith accounting 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 contains information on solicitation of offers to acquire, offer to sell, oroffer to buy any securities (hereinafter referred to as "solicitation"). It is not intended toconstitute conduct solicitation activities, nor can it be the basis for any contract orobligation.

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Contact
Corporate Planning Division
KOKUSAI PULP & PAPER CO., LTD.
Phone +81 (0)3-4431-7215✉ kpp_ir@kpp-gr.com

A Paper Trail for Creating the Future.
KPP Group