Year-Ended March 31,2009

Annual Business Report
Ｐａｒｔ - １ ： Financial Review
Ｐａｒｔ - ２ ： Changes in business environment & Countermeasures
May 15, 2009
Mitsubishi Paper
Mills Limited

Ｐａｒｔ - １Financial Review for theYear-Ended March 31, 2009

1Key Figures＜Consolidated＞（Unit：100 million yen）

FY2007
AmountSales Ratio（％）

AmountIncrement

Sales Ratio（％）（％）

Amount2,585－

2,531－▲54▲ 2.1

Operating Profit

93

3.6

71

2.8▲22▲23.6

Ordinary Profit

71

2.8

45

1.8▲26▲36.8

Net Profit

371.4

120.5

▲25▲68.0Revenue

Revenue
3,0002,500

FY2008FY

2,347 2,285

Operating Profit

First-Half120

2,585 2,531
2,443

2,000FY

100First-Half

100

9373

1,175

1,1351,185

1,264

40

25500

20002004

2005

2006

2007

2008

60483031333972

71

60

43

1,000

FY

First-Half

80

71

65
1,343

FYNet Profit
9080

1,500

Ordinary Profit

5350

37453040242073

70

1713213121

1210-102004-30-247

2005

2006

2007

2008

02004

2005

2006

2007

2008

2004

2005

2006

2007

2008

2

Segment Information by Product ＜Consolidated＞（Unit：100 million yen/%）

FY2007

Revenue
Operating Profit▲ 2.3342▲

6▲ 1.8231216▲ 15▲ 6.6

Internal Transfer▲265▲ 246

19－Total

2,5852,531▲ 54▲ 2.1

Pulp & Paper6765▲

2▲ 2.2

Photosensitive211▲ 22－Others

75▲

2932,219

Photosensitive

348

Others▲Internal Transfer
Total▲2▲20.0

24－71▲ 22▲23.6

Operating Profit（Unit：100 million yen/）

2,129

2,271

2,219

8073

Pulp & Paper

60

1,971

2,000%▲ 522,271

Pulp & Paper
2,016

Increment

Pulp & Paper

Revenue
2,500FY2008

49（Unit：100 million yen/）

67654540
1,500
1,000500

2120Photosensitive
3443333333483422006

2007

2008-1-20-40

2005

8002004

21-60-38

2004

Photosensitive

200520062007

2008

3

Segment Information by Product ＜Consolidated＞（Unit：100 million yen/%）

FY2007

Increment

Revenue

2,0512,037▲

14▲ 0.7

Europe526475▲

51▲ 9.7

U.S.A.

10381▲

22▲21.8

33－▲

Internal Transfer

▲

9562

2,5852,531▲

54▲ 2.1

Japan8266▲

16▲19.7

Europe60▲

6▲95.7

U.S.A.

21▲

1▲57.5Internal Transfer

341－Total

9371

22▲23.6

Operating Profit

Revenue

Operating Profit （Unit：100 million yen/）90

1,891Japan
1,822

1,950

2,051

2,037

8280
7055

5040Europe
43630
44647752647566

6360
1,500500▲（Unit：100 million yen/）

2,500

1,000%

JapanTotal

2,000FY2008

Japan31

Europe20
107542005

2006

6000

2004

2005

2006

2007

2008

2004

2007

2008

4

Ordinary Profit FY2008 : Analysis of profit and loss
＜Consolidated＞
Comparison of the 1st Half

（Unit：100 million yen）

Comparison of the 2nd Half
2nd Half of FY2007
1st Half of FY2008
Others＋31

1st Half of FY2007＋50
Raw Material &Energy Cost
▲42＋4Cost Reduction＋21(Investment effects, etc.)＋9Raw Material &Sales
Energy Cost
(Quantity・▲44Product mix)
＋12
Sales(Price)
Depreciation＋40
CostLogistics ＆▲3others▲8Cost Reduction(Investment effects, etc.)＋9

2nd Half ofFY2008＋14Others

Comparison of FY2007

Sales(Quantity・Sales(Price)
Product mix)
▲43＋45
Depreciation
Cost＋1 Logistics ＆others＋2▲8FY2007＋71

Raw Material &Energy Cost
▲86Others▲4Cost Reduction(Investment effects, etc.)＋18

FY2008＋45

Sales(Price)
+85

Sales
(Quantity・Product mix) Depreciation
Logistics ＆Cost▲31others▲2▲6Others: Extraordinary expenses/income and others

5Balance Sheet ＜Consolidated＞（Unit：100 million yen/%）

FY2007
AmountFY2008%

AmountIncrement%

Amount

3,031

100.0

2,943

100.0▲ 88

Current Assets

1,162

38.3

1,166

39.6

4

Fixed Assets

1,869

61.7

1,777

60.4

▲ 92

Tangibles

1,346

44.4

1,362

46.3

16

Intangibles

210.7

140.5

▲

Investment andOthers

502

16.6

401

13.6

▲1012,234

73.7

2,238

76.1

4

1,605

52.9

1,588

54.0

▲ 17629

20.8

650

22.1

21797

26.370523.9▲ 92

1,530－1,635－

105

AssetsLiabilities
Current Liabilities
Long-Term Liabilities
Net Assets
Interest Bearing Debts ＊7＊Note: As of the reporting term ended March 2009, lease obligations are included in the scope of interest-

bearing debt due to a change in accounting standards. Consequently, an increase of ¥3.7 billion was posted
compared to the previous accounting standards.

6

Statement of Cash Flow ＜Consolidated＞（Unit：100 million yen）

FY2007

FY2008

Increment

AmountAmountAmountCash Flow from Operating Activities

18842▲146

Cash Flow from Investing Activities▲177▲12354

Cash Flow from Financing Activities

▲ 90

81

171

Effect of Exchange Rate Fluctuation
on Cash & Cash Equivalents

01212Net Increase/Decrease in Cash andCash Equivalents

▲ 79

1291

Cash and Cash Equivalents at theBeginning of the Year

102

23

▲79

Cash and Cash Equivalents at the Endof the Year

2335

127

Key Indices＜Consolidated＞（Unit：100 million yen）

FY2007
Interest Bearing
Debts ＊

FY2008FY2009（Forecast）

1,530

1,635

1,680

Depreciation

127

129

134

Investments

181

155

80

Number ofEmployees

4,574

4,597

4,470

＊Note: As of the reporting term ended March 2009, lease obligations are included in the scope of interestbearing debt due to a change in accounting standards. Consequently, an increase of ¥3.7 billion was posted
compared to the previous accounting standards.

8Key Indices＜Non-Consolidated＞（Unit： ‘000tons ・100 million yen）

FY2007
1st Half

Sales Data

FY2008
1st-Half

Fiscal Year

Fiscal YearSales Qty Sales Amt. Sales Qty. Sales Amt. Sales Qty. Sales Amt. Sales Qty. Sales Amt.

Paper

Uncoated (Wood-free, etc.)
Coated ( Coated & IJ Paper,etc.)
Business Communication
Paper (Thermal, CarbonlessPaper, etc.)
White Card Board
Others (Leaf Paper,Hygiene Paper, Non-WovenFabric, etc.)

Total

8495

17720692113

179

221

319

400

649

821

328

446616

826

48

10095

203

47

105

87

202

2426485324274553

1053

19105

950

1798

485

674

988

1,388

500

741

944

1,400

FY2007
Exchange Rate
Annual Usage of Woodchips(Import Ratio)
Annual Usage of Purchased Pulp
(Purchase Ratio)
Annual Usage of Oil
Annual Usage of Coal
Purchase Electric Power（Self-Generation Ratio）

FY2008¥113.80/US$
1,162 Tｔ
（68％）
104 Tｔ（13％）
49 Tｋｌ303 Tｔ
215MWH（86％）¥100.62/US$
1,217 Tｔ
（66％）
71 Tｔ
（9％）
47 Tｋｌ
301 Tｔ276MWH（80％）

RE：The raw materials & energy usage quantities are included Kitakami High Tech Paper Usage.

9

Forecast for FY200910

Forecast（Unit：100 million yen/%）

FY2008

1st Half

2nd Half

Forecast of FY2009

FY2008

Increment

1st Half（Forecast）

2nd Half（Forecast）

FY2009（Forecast）

1st Half

2nd Half

FYAmt%Amt%

Amt%

Revenue

1,343

1,188

2,531

1,150

1,250

2,400

▲193

▲14.362

5.2▲131▲5.2Pulp &Paper

1,1891,030

2,219990

1,080

2,070

▲199

▲16.7504.9▲149▲6.7

Photosensitive

174168342170180350▲ 4▲ 2.3

127.182.3

Others114102216100

110210▲ 14▲12.387.8▲ 6▲2.8

InternalTransfer▲134▲112

▲246

▲110

▲120▲23024－▲8－16－

OperatingProfit

393271205070▲19▲48.2

1854.5▲1▲1.6

OrdinaryProfit

31144553540▲26▲83.721140.7▲5▲11.1

Net Profit32▲2012▲102515▲42－45－328.4

Ａｓｓｕｍｐｔｉｏｎ ： ¥100/US$ 、 ¥130/€ 、 Dubai crude oil $55/barrel11Ordinary Profit FY2009 (Forecast)＜Consolidated＞: Analysis of profit and loss
Comparison of the 1st Half （Forecast） （Unit：100 million yen）

Comparison of the 2nd Half（Forecast）
Extraordinary
expenses/income＋3Cost

1st Half of FY2008

＋31
Sales
(Quantity・Product mix)
＋50

Fixed Cost
Etc
▲8＋14＋5Cost ▲7Reduction＋4Raw Material &Energy Cost
＋27＋35

Reduction＋5

2nd Half of FY2008

1st Half ofExtraordinary
expenses/income FY2009

2nd Half ofFY2009

Sales(Price)▲13Raw Material &Energy Cost
＋33

Fixed Cost
Sales
Etc
(Quantity・▲9Product mix)
＋2Sales(Price)＋8

Comparison of FY2008 and FY2009（Forecast）

FY2008＋45

Sales(Price)▲5Extraordinary
expenses/income

CostReduction＋9Sales(Quantity・Product mix)
▲48

▲4FY2009＋40

Raw Material &Energy Cost
＋60

Fixed Cost Etc▲1712

Part-2

Changes in business environment
andCountermeasures13

Changes in environment since 2008
and countermeasures
Hard environment ofthe customer

Drastic drop
in demands

Tighter purchase policy
Delay of raw material andenergy cost reduction

Strong Yen
Lowered competitivenessin export
Severe MarketCompetition

Trends of re-increase in oil prices etc.

Printing andCommunication paper

German Operation

Digital Imaging

Inventory Buildup

Continuous Profit
Deterioration

Plunge in revenue

Drastic production
cutoffFundamental
Restructuring

Strengthen businessconstitution

14１

Printing and Communication paper(Hachinohe Mill)
Production Cutoff

Further production curtailment
ofPrinting and Communication Paper
Fiscal Year
08 3Q

08 4Q

09 1Q

09 2Q

30%Totalcurtailment
volume

10%
cut

15%
cut

25,000 t

33,000 t

1st Half 20% cut
10%64,000 t
April

24,000 t

shut down of major machines

Maytotal mill closure for 10days（use of Japanese Golden week holidays period）
June
total mill closure for 14days（use of scheduled annual maintenance shut down）■ Build up profitable constitution under low capacity utilization
Production planning and operation fit to the Sales15１Printing and Communication paper(Hachinohe Mill)

Expansion of FSC
Certified ProductPortfolio

1. Sales volume of FSC Certified Paper （as of customer delivery volume)
Sales 販売数量[t/月]
volume [t/month]

12,000FY 2008 Actual 7,000t/month(+85% from previous year)

10,000
8,000
6,000
4,000
2,000

Target FY2010 10,000t/month02003 2004 2005 2006 2007 2008 2009 2010年度
FiscalYear■ Leading supplier of FSC Paper

2. Copy paper complied with the “New standard for Green Purchase Law”
・Launch of 2 grades containing over 70% of recycled fiber
・Sales volume now : 500 t/month → future : 2,000 t/month3.

Promotion of “The Morino Chonai-Kai (Forest NeighborhoodAssociation)” Project～Enrichment of domestic forest by utilizing the forest thinning materials ～・Paper is sold with forest thinning promoting fee and this fee is given to the forest owner・Today we sell approx. 360 t/year (4 times of the previous year) of such printing paperincluding “Morino Chonai-Kai matte coated paper”
・”Morino Chonai-Kai copy paper” was newly developed (launched this April)(contains more than 10 % long fiber and more than 70 % recycled fiber）
16

２

Reconstruction of German Operation

Fundamental Restructuring
・Severe competition and over-capacity in the business communication
paper market (e.g. Carbonless and Thermal paper)・Continuation of high cost e.g. natural gas and paper chemicals
・Low profitability of export to outside EU

1.
2.
3.
4.
5.

Shut down No.1 Paper Machine（→consolidation to No.3 Paper machine）
Shut down of 4 cast coater machines
150 personnel cuts
（121 employees were already notified）
Review product portfolio, improve Product mix
Drastic organization reform, consolidation (MPF & MPB)
① Improvement of sales, purchase and logisticorganization② Consolidation and improvement of productdevelopment organization③ Consolidation of management and controllingorganizations

Target 2009

Profit Improvement
1.5 billion Yen

17

３Strengthen the Digital Imaging
Business and others

Consolidation of Digital Imaging division and Speciality Material
Development division, introduction of internal company system
Mitsubishi Paper Mills

Mitsubishi Paper Mills

Printing & Communication
Paper Division

Printing & Communication
Paper Division

Digital Imaging Division

I&D Company

Speciality Material
Development Division

Incl. Kyoto MillKitakami HiTec Paper
Kyoto Research* I&D: Imaging & Development■■

Both “Digital Imaging business” and “Speciality Material
Development business” are Development Intensive business
Organization and resource input in accordance with thechanges in business environment

Strengthen Marketing
Swift decision making andClear responsibility■ High profit businessintegrating R&D, Productionand Sales■ Quick profit recovery
Target : 2 billion Yen18３Strengthen the Digital Imaging
Business and others(Organization Chart)【 I & D Company 】 Imaging and Development company
President

VP Sales Imaging

VP Specialty ProductDevelopment

VP Planning

New Business
Development Unit
IJ &Photo
Sales

Graphic
System SalesJapan

Oversea

DiamicPictorico
Asahi Diazo

MII
MPI-MPJ
MPG

Sales
Promoting

Kyoto Mill
Planning

Marketing

Kitakami
HiTec Paper

Kyoto R&D

Oversea

MFZ-MHL

VP: Vice President
19Keep the Target of Post Phoenix Plan unchanged

Building solid foundation
Targetted position in our Industry

Business Portfolio

Obtain the highest Profitability in ourindustry through establishing the uniqueposition of MPM as “High Grade andInformation Media”

Business group with balanced growth of3 business areas i.e. Printing &Communication Paper, DI Media, andNew Products

Basic Target
Sales

300 Bill Yen

Ordinary Profit

15.0 Bill Yen

ROS

5%20

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This material has been prepared based upon information webelieved to be reliable, but no representation or warranty, expressor implied, is made as to the consistency of future results or eventswith any estimate, forecast, projection or opinion, and no relianceshould be placed on, the fairness, accuracy, completeness orreliability of the contents of this material.
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