Q1 FY2024
Earnings Presentation Materials
Aug 2024

2023年5月12日

CONTENTS
01

Q1 FY2024 Financial Overview

P

02

FY2024 Financial Forecast

P 10

03

Market Environment

P 14

04

Mid-term Business Plan AX2024

P 18

05

Dividend Policy

P 31

06

Appendix

P 34

3

2

01． Financial Overview

3

Q1 FY2024 Financial Results
Steady Sales in Packaging Machinery Sales Business

The impact of the reaction to the recording of gains
from the sale of investment securities in the same
period of the previous year

Consolidation of Malaysia printing company,
Kinta Press as a subsidiary（Million JPY）
Y-on-Ychange(%)

Y-on-Ychange(amount)

FY2024
Forecast

ProgressRate

Q1 FY2023
ResultQ1 FY2024
Result10,407

11,067+6.3+660

44,10025.1%

Operating profit

736

777

+5.7

+41

2,650

29.4%

Ordinary profit

798

853

+6.9

+55

2,700

31.6%

Net profit

640

604

△5.5

△35

1,800

33.6%

29.44円

28.41円

△3.5

△1.03

83.31円

34.1%

Sales

attributable to owners of
the Company

Earnings per
Share

4

Analysis of Changes in Operating Profit
Effect of M&A involving Malaysia Company, Kinta

・Strong
performance inPackaging
Machinery Sales
Business
・The revenue
increase effectdue to pricerevisions

・Increase inprocurement of
Packaging
Machinery Sales
Business

Implementationof base salary
increases

・Surge in raw

22 million JPY

Strengtheningof human
resource
development
andrecruitment（Million JPY）

Inflation andother factors

material prices

The increase in revenue and expenses due to the subsidiarization of Malaysia printing company, Kinta

Q1 FY2023
Operating profit

Sales

Cost of Materials/
Purchases andSubcontracting Expense

Personal Expenses

Selling, General, andAdministrative Expense

Manufacturing costs
and others

Q1 FY2024
Operating profit
5Balance Sheet〈Major factors for increase/decrease〉
Increase in short-term interest-bearing debt and decreasein long-term interest-bearing debt due to the transfer oflong-term loans scheduled for repayment within one year

Increase in electronically recorded monetary claims
Decrease in investment securities（Million JYP）

（Million JPY）

AssetsMar. 31, 2024

FY2024 Q1

Y-on-Y Change

Liabilities

Mar. 31, 2024

FY2024 Q1

Y-on-Y Change

28,96929,689+719

Current Liabilities

15,53817,783+2,244

8,944

8,986

+42

Accounts Payable

8,298

8,191

△106

15,856

16,269+412

Short-term Interestbearing Debt

3,730

5,515

+1,784

3,433

3,712

+279

Non-Current Liabilities

18,988

17,101△1,88639,72839,564△164

Long-term Interestbearing Debt

16,32814,259△2,068

Tangible Fixed Assets

30,50830,331△177

Total Liabilities

34,52634,884+357

Intangible Fixed Assets

2,370

2,368

+16

Net Assets

Investments and Other
Assets

6,850

6,846

△3

Total Net Assets

34,17134,369+197

68,69869,253

+555

48.1

47.9

△0.2ptCurrent Assets
Cash and deposit

Account Receivables
Inventories

Non-current Assets

Total Assets

Equity Ratio (%)

6Printed Packaging Materials BusinessThis is our group's main businessWe manufacture and sell products mainly for the pharmaceutical and cosmetics markets〈Points〉
Contribution of the price revisions implemented in the previous fiscal year

Domestic

Decrease in orders following a significant increase in the same period of the previous year due to the post-COVID-19 surge
Decrease in orders due to the document digitization of medical instruction leaflets

Overseas

Contribution from the consolidation of Malaysia printing company, Kinta Press as a subsidiary（Million JPY）

FY2023 Q1

FY2024 Q1

Y-on-Y change

Y-on-Y change(%)(amount)

Sales

9,847

10,166

+3.2%

＋318

Segment
Profit

2,387

2,546

+6.6%

＋158
7

Packaging Machinery Sales BusinessWe provide comprehensive proposal ranging from packaging materials to packaging line,
including processes before and after packaging〈Points〉
Steady orders
Increase in larger projects（Million JPY）

FY2023 Q1

FY2024 Q1

Y-on-Y change

Y-on-Y change(%)(amount)

Sales

434

769

+77.2%+335

Segment
Profit78

120+53.5%+41
8

Other（Staffing Services）
We provide staffing services not only for our group but also for local businesses in the region〈Points〉
Implementation of job consultation meetings throughout Toyama Prefecture
Strengthening transactions with new customers
Increase in staffing needs（Million JPY）

FY2023 Q1

FY2024 Q1

Y-on-Y change

Y-on-Y change(%)(amount)

Sales

125

131

+5.3%

＋6

Segment
Profit

30

32

+6.2%

＋1
9

02. FY2024 Financial Forecast

10

FY2024 Financial Forecast
To improve profitability and aim for the first increase in profit in three years
Domestic

The increase in revenue due to the price revisions implemented in the second
half of FY2023, along with cost reductions from improved production efficiency
through labor-saving and workforce reduction measures

Expected increase inrevenue and profit

Overseas

The contribution of Kinta’s sales to the consolidated P/L starting fromFY2024, following the M&A in October 2023

Expected significant
increase in revenue

FY2023 Results

FY2024 Forecast（Million JPY）
Y-on-Y change(amount)

Y-on-Y change(%)

41,871

44,100＋5.3+2,228

2,030

2,650

＋30.5

+619

4.9

6.0

-

-

Ordinary profit

2,323

2,700

＋16.2

+376

Net profit

1,627

1,800

＋10.6

+172

75.33

83.31

＋10.6

+7.98

Sales
Operating profit
Operating profit margin

attributable to owners of
the Company

Earnings per Share (JPY)11

FY2024 Analysis of Changes in Operating Profit Forecast（Million JPY）

The revenue
increase
effect due toprice revisions

Continuous
increase in the costof raw materials

Increase in labor costs and expenses(base pay raises, inflation, etc.)

and other items(confirmed as ofnow)

The increase in revenue and expenses due to the subsidiarization of Malaysia printing company, Kinta

FY2023Operating profit

Sales

Cost of Materials/
Purchases andSubcontracting Expense

Selling, General, andAdministrative Expense

Manufacturing costs
and others

FY2024
Operating profit(Forecast)
12Factors causing deviations from the mid-term management plan

The sales forecast for FY 2024 is 44.1 billion yen, exceeding the final year target of the mid-term businessplan by 2.1 billion yen. However, the operating profit margin is expected to be 1.0 pt lower, and the ROE
is expected to be 0.7 pt lower than the target.

FY2024
Forecast

target of the midterm business plandifference

Increase in revenue due to the acquisition of Kinta

44,10042,000+2,100Operatingprofit margin

6.0％

7.0％

△1.0pt

ROE

5.3％

Sales

6.0％

△0.7ptRevenue increase effect due to price revisions

The increase in costs for raw materials and energy
exceeds the initial plan
The occurrence of goodwill amortization expenses
due to the acquisition of Kinta

13

0３．Market
Environment

14

Market Share■ Unbiased dealings with lots of clients (About３％ sales of top clients)■ Community and proposal-based sales through a nationwide network of 20 sales office(More than 90% of clients are within 50 km)
15Pharmaceutical Market Forecast
Pharmaceutical Market Trends in Japan
millionJPY
百万円

28,000

Perscription Drug
trillion
兆円JPY

OTC medicine sales

Asahi Printing sales in pharmaceutical market

12億円 JPY
100 million

10,00026,00011

9,000

24,00010

8,000

22,00097,000

FY2018FY2019FY2020

FY2021

FY2022

Our Forecast
Drug use will increase
for the foreseeable
future because of theincrease in the elderly
population, promotion ofgeneric drugs, and anincrease in drug variety.

FY2023Prescription Drug Copyright © 2022 IQVIA. All rights reserved
OTC medicine
Copyright © METI

Pharmaceuticals Medicine
Prescription pharmaceuticals■ The domestic market for prescription drugs is 11 trillion yen.

Steady sales due to the aging of the population and infectious diseases.
■ The sales decrease in medical instruction leaflets was in line with our
expectations due to the government policy.

Generic drugs■Estimated market expansion of 30% in 2023 compared to 2018.
■Biosimilars and authorized GE products to be doubled in number.
■Anticipated supply chain disruptions and product shortages.

OTC Medicine■Although sales continued to decline in 2020 and 2021
due to the impact of infectious diseases, sales ofgastrointestinal drugs and drinks, which had declined,
recovered due to the revision of infection control
measures and the lifting of behavioral restrictions. In
addition, sales of common cold remedies recovered due
to inbound demand and are expected to increase fromthe second half of 2022. Significant Increase in 2023
■Expected increase in switching of prescription drugs in
OTC status, with the support of government policy. Self
medication is also expected to become pervasive, and thesales of OCT medicine will increase accordingly
16Cosmetics Market Forecast
Cosmetics market sales in Japan and Asahi Printing
Cosmetics Market

Cosmetics market sales of Asahi Printing（100 million JPY）

Increase in inbounddemand due tolifting of movement
restrictions
MADE IN JAPAN
Recovery of makeup
Brand value
products with the
improvement
ease of mask(Return to domestic
Marketproduction)
wearing rule

Environment

Expansion ofcross-border
E-commercebusiness incosmetics market（Million JPY）

30,0009,000

20,0007,000

10,0005,000

0Further increase inenvironmental
awareness

3,000

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023Copyright ©Fuji Economic Group, Domestic Cosmetics Market Research

Return to domestic production, demandfor cosmetics is recovering
17

0４．Mid-term Business Plan

AX2024
AX2024 Slogan
Embracing the spirit of “‘tsu tsu mu ko ko ro’ – theheartfelt hospitality” and taking a new first step18

Strategies
Under our slogan, “Embracing the spirit of ‘tsu tsu mu ko ko ro – the heartfelt hospitality’ and taking a new first step,”
we will strive to create unwavering added value in packaging for our customers and enhance the corporate value of theentire Asahi Printing Group by implementing the following five business strategies.

19

Initiatives of AX2024

Market Penetration

Added-valueWorkand expansion

Optimization

Engagement

Overseas Business

Management

Development

Resources Utilization20

Factory Reorganization

Factory Reorganization in the Toyama Area
Background
04

03

02

01

Digitalization of
Medical Package Inserts

Creating Core
Businesses

Increase in Orders

Decrease in
Workforce Population

Decrease in Orders for
Package Inserts

Promoting the LabelBusiness

Promotion of Lead
Time Optimization

Labor Shortages andHiring Difficulties

Establishment of an Increased
Production System

Labor-Savings andAutomation

Addressing the External Environment
Surrounding the Printing Business

Established the Factory Reorganization Promotion Office in April 2024
21

Overview of Factory Reorganization
STEP １ （ To be Implemented in FY2024 ）Review of Manufacturing Areas Due to the Digitalization of Medical Package Inserts【Target Factories】

Toyama South
Factory（ Medical package inserts ）Toyama Second
Factory

Toyama Third
Factory（ pharmaceutical packages ）【Review Details】
・Package Inserts … Reduction of（ label ）【Effect】

Manufacturing Area
Improvement of Production Capacityfor Pharmaceutical Packages

Expansion of・Pharmaceutical… Manufacturing Area
Packages

・Labels… Expansion of
Manufacturing Area

Introduction of Labor-Saving and Automation
Machinery in Expanded Areas

Investment
Amount: OverJPY 2 billion

Promotion of In-House Production ofLabelsPromotion of Labor-Savings andAutomation
22

Overview of the Factory Reorganization
NEXT STEP
ＳＴＥＰ（今後の展望）NEXT（FutureOutlook）

In addition to STEP 1, we will consider the reorganization of all factories in the Toyama area,
including Toyama Factory and Toyama East Factory.
Factory Reorganization Vision
Toyama Factory

Toyama East Factory

・Addressing external environmental changes
・Building an increased production system
・Promoting labor-savings and automation

・Improving productivity
to enhance work engagement
Toyama South Factory / Toyama 2nd Factory/ Toyama 3rd Factory

STEP2

STEP1
March 2025

・Advancing carbon offset initiatives

STEP3

Achieving sustainable growth andestablishing a permanent and stable supply system
23

Initiatives of AX2024

Market penetration

Added-valueWorkand expansion

Optimization

Engagement

Overseas Business

Management

Development

Resources Utilization24

1. Acquisition of Malaysian Printing Company
In October 2023, we acquired 65% of the shares of Kinta Press & Packaging (M) Sdn.Bhd.
High-end Market Focus: Cosmetics and food packaging
Kinta's main market is Malaysia, where it has established a solid position and strong customer basewith reliable relationships.
Point.01

Differentiation through advanced
technology and manufacturing knowledge
Point.02

Provision of comprehensive solutions
through advanced machine technology
Point.03

Achievement of high profit margins bytargeting the premium segment

https://www.kintapress.my25Creating synergy
Pharmaceuticals

Cosmetics

sales proposal
activities

quality control
standards

Japan

Malaysia

Southern

Sharing
Technology

Collaboration

Northern
キンタ社

Establishing a system to supply pharmaceuticaland cosmetic packaging throughout Malaysia

Using Malaysia as a base to secure market sharein the ASEAN pharmaceutical and cosmetic packaging markets
26

2. Construction Plan for Malaysia Subsidiary

Construction Plan for Malaysia Subsidiary, Shin-Nippon

Trends01

02

Environment

03

Strategy

Performance

Malaysia is expected to achieve
particularly stable growth within
the continuously expanding
ASEAN region

Promotion of the "Overseas
Business Expansion" strategy in
AX2024

Steady growth since becoming
a subsidiary

Many companies are currently
investing in Malaysia

Strong promotion will continue inthe next fiscal year and beyond

Strong order forecast going forward

Mission : Building a strategic manufacturing base that will serve as the core for ASEAN business expansion
27

Overview of the Construction Plan
Overview

Location of i-Tech Valley
・22 km from Shin-Nippon

・16 km from Tanjung Pelepas Port・27 km from Senai Airport

Shin-Nippon

Construction Site ：i-Tech Valley（Malaysia）
Total Floor Area：Approximately 12,000 ㎡
Total Investment ：Over JPY 2 billion
M a in Produc t s ：Pharmaceutical Packaging,
Medical Device Packaging
Operation：Scheduled for early 2026
28

Overview of the Constriction Plan
Plan

Concept

A factory that can meet the demands of
the ASEAN market

０1

・Expand production capacity
・Strengthen the quality control system
02

Achieve further differentiation in the ASEAN region
Improve customer satisfaction

Acquire new customers

Introduction of new technologies and equipment

Sales compared to
FY202475％ increase・Introduce high-efficiency technologies
・Implement labor-saving and automation machinery
・Adopt the latest color management systems
03

Enhancement of work engagement

・Establish a better working environment

FY2024FY203229

05．Shareholder
Returns

30

Shareholder Returns
Dividend
Policy・Continuation of stable dividends and distribution of results according to performance.
・Implementing dividends with a consolidated payout ratio of 40% or more.

Investment in labor-saving and manpower reduction for sustainable growth
Growth investments in the label business and overseas business

Dividend per Share Trend

Ensuring financial soundness
40.5

Enhancing shareholder returns
31.5

Consolidated payout ratio

40% or more

・For the Year ended March 31,2024 46.5％
・For the Year ended March 31,2025 45.6％ (Forecast)
Total Shareholder Return Ratio
for the Year Ended March 31,2024 76.1％
For the Year Ended March 31,2025
Annual dividend per share: ¥38 (¥3 increase planned)

43.1
35

44.7

46.5

35

35

（JPY，％）

45.6
38

30

21

20

20

20

15

15

15

20

20
11
18

10

10

FYE MarFYE MarFYE MarFYE MarFYE MarFYE Mar

2020

2021

2022

2023

2024

2025

InterimYear-End

Payout Ratio（Forecast）
31

ASAHI PRINTING CO., LTD.

Thank you！
＜Inquiry＞ ASAHI PRINTING CO., LTD.
Business Management Department
Corporate Division
TEL：076-491-6137
MAIL：home@asahi-pp.co.jp
HP URL：https://www.asahi-pp.co.jp/■The forecasts and outlooks contained in this handout are based on
information available to the Group at the time this document was prepared.
These forecasts are based on information currently available to the Groupand are subjected to the influence of uncertainties in the economic
environment and other factors. Actual results may differ materially fromthose projected in this document.

■The purpose of this document is to provide information to investors ingeneral and is not intended as a solicitation or recommendation to buy orsell our stock or other securities.

32

6．Appendix

33

Corporate Profile
With over 150 years of experience,
we are a leading company
in the pharmaceutical and cosmetic industries
Company

ASAHI PRINTING Co., Ltd.

Location

Toyama-shi, Toyama

Foundation

1872

EstablishedMay 1946

Stock Market

Tokyo Stock Exchange Standard Section (Code: 3951)

CapitalCore Business

2,228 Million JPY
Production and Sales of Printed Packaging Materials
Sales of Packaging Machinery・Staffing Services
Representative Director
and President

Shigenori Asahi
34

History
1872:

Founded Asahi’s Forerunner, Ozawa Printing Workshop (Privately held), in Uozu-shi, Toyama.

1946:

Established Asahi Printing and Packaging Co., Ltd. in Toyama-shi, Toyama.

➤ Latter half of the 1950s:

Shifted the core business to pharmaceutical packaging materials.

1964:

Opened Tokyo Sales Office (Current Tokyo Branch).

1969:

Opened Osaka Sales Office (Current Osaka Branch).

➤ Latter half of the 1970s:

Expanded its business in cosmetics packaging materials.

1989:

Completed Toyama Plant.

1993:

Listed stock on Japan Securities Dealers Association.

2002:

Listed stock on the 2nd Section of Tokyo Stock Exchange.

2003:

Completed Toyama 2nd plant within the premises of Toyama Plant.

2008:

Completed Toyama East Plant.

2010:

Completed Toyama South Plant.

2015:

Completed Kyoto Creative Park.

2018:

Completed SCM Center.

2019:

Harleigh (Malaysia) Sdn. Bhd. and Shin-Nippon Industries Sdn. Bhd. became subsidiaries.

2020:

Completed Kyoto Creative Park (West Building).

2023:

Kinta Press & Packaging (M) Sdn. Bhd. became a subsidiary (Malaysia).

License of copyright issued in 1875

35

Asahi Group Operation Bases■ 20 Sales Offices in Japan■■ Toyama Plant (1989)■ Plantsndrd■and 3(2003)
Plants (2003)■ Toyama 2nd Plant■ Toyama East Plant (2008)■■ Toyama South Plant (2010)■■ Kyoto Creative Park (2015)■

Kinta Press & Packaging(M)
Sdn.Bhd.
Sdn.
Bhd.
36

Total Solution Service
One-Stop Solution Service
We, Asahi Group, offer the integrated service from packaging engineeringand design to production/packaging for pharmaceuticals and cosmetics.

Initiation

Plan
DesignPlate
Making

Proof

Printing

Coating

Inspection
Delivery

Packaging＋ Machinery

Entry Barriers
Pharmaceutical packaging■ A part of pharmaceutical product which indirectly relates to human life.
It requires Expert Knowledge in Labelling and productions that conforms with the “Pharmaceuticals andMedical Devices Law” and “GMP.” (Pharmaceutical Affairs Law)
■ Know-How accumulated over many years.
Established a robust quality management and assurance systems.
Deliver high Quality Products

Cosmetics packaging■ A variety of machines that caters various printing and processing demands
Deliver High quality, Value-Added Products

37

Outstanding Production Network
Business Continuity Plan (BCP)◆ We offer stable supply to our customers even during the spread of COVID-19 within Japan.
◆ Challenges: Re-assessment and improvement of supply chain within its group.

■ Plants in Japan■ Toyama Plant■ Toyama 2nd■ Toyama East Plant■ Toyama South Plant■ Kyoto Creative Park

■ Sakamoto Printing (Cartons)■ Subsidiaries

Kyoto Creative Park■

Nippo (Leaflets)■

Kyowa Carton (Cartons)

Toyama Plant

Sakamoto Printing

Nippo
38

Commitment to the SDGs through the Printing and Packaging Materials BusinessSocial Contributions◆Stable employment◆Local professional sports clubsponsorship◆Donation, etc.
Local professional sports club sponsorship

Donation39

2024年3月期 第1四半期
決算説明会資料
2023年8月9日