Results of Operations for the First Half of theFiscal Year Ending March 31, 2022

Tokushu Tokai Paper Co., Ltd.

I. Financial Information

II. Business Foundation
Reinforcement/GrowthStrategy

The Fifth Medium-term
1H FY3/22 Financial Summary
Management Plan
≫Consolidated Financial Results≫Components of Changes in Earnings ≫Positioning of the Fifth Medium≫Segment Information
term Management Plan
≫Fifth Medium-term Management
Plan Progress
FY3/22 Consolidated Forecast
Business Foundation Reinforcement≫Consolidated Forecast≫Industrial Materials≫Components of Changes in≫Household Products
Operating Income≫Specialty Materials
Growth Strategy≫The Added Value Package Strategy≫TT‐PACKAGE≫MOLDEA≫Sheet Products Surpassing Paper≫Fiblic Business≫Environment Related BusinessIII. For More Growthof Corporate Value≫Issues for Change of Listing tothe Prime Market≫Dedicated to the Creation ofa Sustainable Society≫A Road Map for Achieving
Carbon Neutrality

・FY3/22 Consolidated
Forecast▼

・1H FY3/22 Financial
Summary・The Fifth Medium-termManagement Plan
・Business Foundation
Reinforcement
・Growth Strategy▼

II. Business Foundation
Reinforcement/GrowthStrategyI. Financial Information

III. For More Growth ofCorporate Value

1H FY3/22

Financial Summary

1H FY3/22 Financial Summary(Millions of yen)

1H FY3/21results

1H FY3/22
results

Change36,66338,8392,176

Operating income

864

2,236

1,372

Ordinary income

2,177

3,140963

3,057

3,455

398

2.4%

5.8%

-Net sales

Profit attributable toowners of parent
Operating income tonet sales

51H FY3/22 Components of Changes in Operating Income(Millions of yen)

Ordinary
income
経常利益

3,140
Non-operating
営業外損益
incomeOrdinary
income
経常利益+904

2,177-158

Non-operating
income
営業外損益+106+206+95+112+1,313

Operatingincome
営業利益+1,011

2,236
Operatingincome
営業利益

864

1H FY3/21
前2Ｑ実績
results

Sales
営業Materials
資材Factory
工場能率
efficiency

Fixed cost,
固定費等
etc.

+1,372
vs 1H FY3/21
営業利益
前年同期比+357
対前年同期比+1,372

Inventories
在庫Others
その他

1H FY3/22
当2Ｑ実績
results

6

1H FY3/22 Segment Information(Millions of yen)

Change1H FY3/21 results

1H FY3/22 results

18,34819,199

851

516

605

89

8,414

10,406

1,992

Operating income

175

1,526

1,351

Household Products Net sales
Business
Operating income

8,243

8,246

3318349

31

Environment Related Net salesBusiness
Operating income

4,024

3,424-600

(81)

(180)

-99(2,366)(2,437)

-71

(63)

(64)

-1

36,66338,839

2,176

864

2,236

1,372

Industrial Materials
BusinessNet sales

Specialty Materials
Business

Net sales

Elimination/
adjustment
Total

Operating income

Net sales
Operating income
Net sales
Operating income

7FY3/22

Consolidated Forecast

FY3/22 Consolidated Forecast(Millions of yen)

FY3/21
results

FY3/22
forecasts

ChangeNet sales

76,40381,0004,597

Operating income

3,227

3,600373

Ordinary income

5,970

5,000-970

Profit attributable toowners of parent

5,594

3,600-1,994

Operating income
to net sales

4.2%

4.4%

-*Assumptions: Foreign exchange rate: 1H: ¥105/US$; 2H: ¥110/US$
Crude oil price (Dubai) 1H: $55/B; 2H: $70/B

9FY3/22 Consolidated Forecast
Components of Changes in Operating Income (vs. FY3/21)
5,000
5,000

4,000
4,000

3,000
3,000

2,000
2,000

Ordinary
income
営業利益+1,685+1,685-953▲953-90▲90+12⇓⇓⇓⇓⇓⇓+1,327+1,327-1,218▲1,218▲22-22+271+271+270+270-255▲255

営業Sales

資材Materials

Factory
工場能率efficiency▲281-281

3,227
3,227

Operating
営業利益
income

3,600

1,000
1,000

FY3/21
21/3実績
results

Fixed cost, Inventories
固定費等
在庫要因
etc.

+373
vs FY3/21
営業利益
前年同期比+357
対21/3実績比+373

成長戦略
GrowthStrategy

FY3/22
22/3予想forecast

10

Cross-shareholdings/ROE
Periodic review of stock holdings• Every year, the Board of Directors reviews stock held as cross-shareholdings.
• The benefits of owning the stock are compared with the cost of ownership, which is derived from the cost of capital.
Industry trends and many other factors are also considered. The directors then reach a decision about retaining or sellingeach stock holding.
More actions are planned to increase the liquidity of Tokushu Tokai Paper stock

Table: Cross-shareholdings as pct. of net assets
FY3/18
Consolidated netassets ACross-shareholdings
B
Ratio B/A

FY3/19FY3/20FY3/21

1H FY3/22

72,76775,71377,67880,28682,31917,635

15,366

14,444

10,99011,273

24.2%

20.3%

18.6%

13.7%

13.7%

Five-year ROE Summary
FY3/18

FY3/19FY3/20FY3/22*forecast

FY3/21

Profit(millions of yen)

2,193

4,2123,694

5,594

3,600

Shareholders’ equity(millions of yen)

66,34569,04270,90873,429

-3.3%

6.1%

5.2%

7.6%

5.0%

ROE (%)

11

・FY3/22 Consolidated
Forecast▼

・1H FY3/22 Financial
Summary・The Fifth Medium-termManagement Plan
・Business Foundation
Reinforcement
・Growth Strategy▼

II. Business Foundation
Reinforcement/Growth
Strategy

I. Financial Information

III. For More Growth ofCorporate Value

The Fifth Medium-termManagement PlanPositioning of the Fifth Medium-term Management Plan
Start full-scale activities targeting

growing market sectors

2023
The Fifth Medium-termManagement Plan

where activities started following
the identification of these sectors
during the fourth plan

Jump Forward To Next 102020
2017

The Fourth Medium-termManagement Plan
Next 10Targeting growing
market sectors

Explore growth opportunities
and start activities
Business foundation
reinforcement and reforms
FY3/23 targets
Final year of Fifth Medium-term Plan

Long- term goals

Net sales￥82.5 billion￥120 billion

Operating income￥4.5 billion￥10 billion

Operating margin

5.5%

8.3%

ROE

6.5%

8.0%

14

Fifth Medium-term Management Plan Progress
Benefits of actions to strengthen business operations are emerging despite thechallenging business climate caused by the pandemic. The challenging operating income target of¥4.5 billion is within our reach.
5,000

Full-year
forecast

4,000

3,600

3,000

Target
2,000

2,870

3,227

1,000

Final yearof the Fourth Medium-termManagement Plan

4,500
1H result

2,236First year

Second year
(FY3/22)

Final year

The Fifth Medium-termManagement Plan
Jump Forward To Next 1015

Business Foundation
Reinforcement

Activities for Strengthening Core Businesses
Continuing to streamline the three papermaking
businesses as the pandemic impacts market conditions
The three papermaking
businesses

Industrial Material

HouseholdProducts

Special Material

Business FoundationReinforcement

Paper demand for information media is declining, but

we are building a business structure that can continue to grow17

Industrial MaterialFirst halfsummary

Sales in Japan are recovering from thepandemic downturn and factory production
volume was higher than one year earlier.

Reference: Output of the Shimada Mill(Tons of cardboard and kraft paper)• Sales in Japan were strong for industrial products andin other sectors as demand recovers from thedownturn caused by the pandemic.
• Output of cardboard and kraft paper at the Shimada
Mill were higher than one year earlier because of thestrong sales recovery. (see graph on right)• There are concerns about the negative effects of thehigher cost of fuel oil and other types of fuel and of raw
materials.

Issues andactions

19年度上期
1H FY3/20

20年度上期
1H FY3/21

21年度上期
1H FY3/22

 More progress with the efficiency and stabilization of production
 Develop new products ➡ Quickly identifying needs of users
Starting to study ways to meet the need for lighter
liners and thinner kraft paper18

Household ProductsFirst halfsummary

Restrictions on outings reduced the use of paper products at
restaurants and other businesses, but the demand for

Reference: Orders at the Fuji Mill (㎥)paper towels continued to increase.
• Using cross-selling and other activities to maximize the benefitsof the Nippon Paper Crecia business alliance• Toilet paper demand is steady but the commercial-use market
remains challenging.
• For laminated products, the recovery of decorative
product demand is slow but total orders increased partly
because of new business, such as products used forpackaging food. (see graph on right)

Issues andactions

前上期
1H FY3/21
Food

当上期
1H FY3/22

Decorative materials

Other Maintain competitive advantage as new competitors emerge in thehousehold paper products market➡ Started selling the industry’s first paper packaging product, an environmentally
responsible type of paper towel packaging, that can replace polypropylene packaging
and conducted marketing activities to raise awareness of this product.

19Special MaterialFirst halfsummary

To adapt to a shift in the structure of demand,using production system innovations for cost
cutting and a proper level of selling prices

Reference (1): Operating Income in theSpecialty Materials Business
1H FY3/21

1H FY3/22¥175 million¥1,526 million

in order to make the specialty materials business stronger.
• Demand in the commercial printing, tourist souvenirs and otherapplications was higher than one year earlier but the negative
effects of the downturns in various events and in travel continued.
As a result, sales did not reach the 1H FY3/20 level.
• Sales of glass interleaving paper remained high because ofstrong sales of flat-panel televisions. Sales also benefited fromone-time demand involving regional economic revitalization
activities. As a result, specialty functional paper supported theoverall performance of specialty materials.

Reference (2): Sales of Products (Million of yen)

1H FY3/21

1H FY3/22

Specialty functional paper
Specialty printing paper

Issues andactions

 More activities to cut costs and achieve a suitable level of selling prices
 Further differentiation of paper for industrial processes and a larger
market share

20Growth Strategy

Components of the Growth Strategy
Continue to realize the full potential of the need for paper as market
conditions remain challenging and continue channeling resources to businessdomains other than paper products.
Growth Strategy

Creating New Sourcesof Demand for Paper
Products・・・ Sheet products with better
performance than paper
Use unmatched technologies forways to reduce the use and needfor plastic packaging

New Businesses OtherThan Paper Products・Fiblic
・ Reuse of various resources
・ Practical ways to utilize thenatural environment
Expand to new business domains
by effectively using the Tokushu
Tokai Paper Group’s resources

22Creating New Sourcesof Demand for Paper
Products・・・ Sheet products with better
performance than paper

Use unmatched technologies forways to reduce the use and needfor plastic packaging

The Added Value Package Strategy
Theme

New ideas for package users by using the materials/3D dual approach
Target new needs created by social change, such as increasing concerns about environmental
issues, and use these needs for ideas for new products in the package business.

…
…

Using materials for new ideas

👤…

Users of packages

Using 3D for new ideas

Goal

Create new markets by matching the product-out approach with end user needs
24

TT-PACKAGE
Features

Uses communications using positions close to end users

Product development and new ideas begin with user feedback

👤Restaurant user👤

I want containers for takeout items, but they are all
the same. Isn’t there
anything different?

TT-BARRIER DERI
Absorbs water and oil,
resistant to water and oil
and available in manycolor variations

TT-CUSHION
I want attractive paperwith creativity that can beused for gifts.

Interior design user

A cushioning material
that protects packaged
items along with many
innovations such as anon-slip coating

Next theme

Enlarge the TT-PACKAGE lineup by using trade shows and e-commercesites for marketing activities that identify new needs

25

MOLDEAFeatures

Progress toward becoming an integrated manufacturer all the way tofinished products
STEP1

STEP2

STEP3

STEP4

Studies concerning
profitability, required
equipment and othersubjects needed tostart business
operations

Start operating
equipment, supply
samples and begin
sales of generalpurpose products

Establish frameworkfor selling wet molds

Start operating thisbusiness＝＝＝Completed

Completed

Completed in 1H FY3/22Samples are generating a
positive response

Next theme

Establish a product development capability that can quickly use
technologies for meeting newly identified user needs
26Sheet Products Surpassing Paper
Meta-aramid fiber sheet• Used expertise for manufacturing electrical insulating
sheets to create a high-performance heat-resistantelectrical insulating sheet ＝TT-TOKRON• Heat resistant, high tensile strength, outstanding
dimensional stability• Strict quality assurance for production, managementand distribution in order to precisely match every
user’s requirements

Heat resistance and electrical insulation make thispaper ideal for motors

Plan to introduce a fleece wallpaper
Conventional wallpaper:

Only the surface layer is removed when replacing the wallpaper,
resulting in the accumulation of old paper underneath the new paper.

Fleece wallpaper:

The surface and back layers can both be peeled off, leaving no paperon the wall.

Next theme

Constantly improve the quality of current products and development newproducts and increase sales of these products
27New Businesses Other
Than Paper Products
Fiblic・・ Reuse of various resources
・ Practical ways to utilize thenatural environment
Expand to new business domains
by effectively using the Tokushu
Tokai Paper Group’s resourcesFiblicSummary

Plan to start sales in FY3/22 of a cellulose separator for LIB under development
Easy to process and modify
Functions can be added easily byusing the same process (filmformation process) rather than aseparate process (coating process).

Reference: Permeability test using propylene
carbonate-based liquid electrolyte
Film separator

Cellulose
separator

Liquid remains on
the surface and isnot absorbed

Liquid quickly soaks into andpermeates the separator

Excellent resistance to heat
Much better safety than with film
separators because Fiblic does not
melt even at high temperatures.

Electrolyte with high permeability(see diagram on right)
Lower electrical resistance andshorter takt time than with film
separators

Plan on single-year profitability in the second yearof commercialization

29

Resource Reuse Division
Summary

Operating income was higher than planned at REX Co., Ltd. and Suruga Service
Industry in August, Suruga Service absorbed Shonan Shoji, which was a nonconsolidated subsidiary.
• The volume of materials collected was as planned despite the small
volume of industrial waste generated because the pandemic reduced
industrial activity and the low volume of construction and demolition
activity.
• Replacement of the pulverizer and conveyor system at the REX Shimada
Mill raised refuse paper/plastic fuel (RPF) production capacity by about
150 tons/month as planned. The Nagaizumi Mill started 24-hour
operations in the second half of FY3/22.

Trees from the July 2021 Atami
landslide that were processedby Suruga Service

Issues and actions

Establish production system at REX, increase earnings at Suruga Service(1) Insufficient raw materials storage
capacity at the REX Nagaizumi Mill➡ Work has started to enlarge storage space(2) Rising cost of processing outsourced ➡ Considering installation of equipment for betterby Suruga Service
sorting of mixed refuse

30Practical-Use of Natural Environment Div.: JUZAN’s Whiskey Business
Summary

Production operating as planned for single-malt whisky with long aging
Stable production

Received “Excellent” rating from National Tax Agency
Quality Assessment

Extra and unusualvalue
A joint program with the community where JUZAN is locatedstarted the Barrel Project, a trial for making whisky aging
barrels from mizunara trees in the Tokushu Tokai Paper
Group’s Ikawa Forest.

A local TV station is reporting on progress with the Barrel Project andthis project is also in Yahoo! News.

GoalHigher value of the Tokushu Tokai Paper Group by using
trees in the Ikawa Forest, which is owned by the group31

・FY3/22 Consolidated
Forecast▼

・1H FY3/22 Financial
Summary・The Fifth Medium-termManagement Plan
・Business Foundation
Reinforcement
・Growth Strategy▼II. Business Foundation
Reinforcement/GrowthStrategyI. Financial Information

III. For More Growth ofCorporate Value

Issues for Change of Listing to the Prime MarketMeasures to strengthen governance for more growth of corporate value
Shareholder rights and equality• Further reduce shareholdings for business relationships (eliminate cross-shareholdings)• More frequent and thorough constructive dialogues with shareholders

More prominent roles for outside directors• Rethinking the roles of outside directors and the number of these directors• Considering the selection of outside directors based on skills involving management

Proper disclosure of useful information• Increase the provision of non-financial information, such as the skill matrix for directors
and executives• Disclose information about sustainability

An Integrated Report is to be issued in March 2022
Plan to start the disclosure of information based on the Task Force on
Climate-Related Financial Disclosures (TCFD) guidelines in June 2022.
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.
33

Dedicated to the Creation of a Sustainable Society
WAVERON
Medical packaging materials
Hand wipe paper

Non-woven fabric
Offset master backing
Tile paper
Paper towels

Red rope

Playing card paper

Oiled umbrella paper

Tire wrapping
paper

Granite-patterned paper

Passbook
coversLeather
texture paper
Glass interleaving
paper

Industrial Materials

Use of paper

Household Products(a biomass material)

Specialty Materials

Technology & Trust
Fusion of distinctive
technologies

Replace/reduce plastics
Meet needs of end users

・・・・

Hydropower
generation

FiblicEnvironment
Use of resources of theRelated
Minami Alps

Pulp black liquor
recovery boiler

Effective reuse of waste materials(biomass energy and other ways)
Biomass boiler

A firm commitment to making a contribution to thecreation of a sustainable society34

A Road Map for Achieving Carbon Neutrality
Started using biomass boilers and other low-carbon measures years ago
Reference: CO2 emissions per ton of production at thefour primary group manufacturing companies

FY3/06
0.66 t-CO2/t

FY3/140.28 t-CO2/t

FY3/200.22 t-CO2/t

FY3/31 forecast
0.18 t-CO2/t

2030

2050

Activities to become carbon neutral
FY3/31 target: 38% reduction vs. FY3/14
Achieve carbon neutrality in 2050
(Ref. value: 72% reduction vs. FY3/06)

Install systems for generating electricity
from renewable energy sourcesSwitch from FIT sales of biomass-generated electricity
to internal use of this electricity

Increase use ofrenewableenergyDevelop new types of fuelStart using new technologies for papermaking and energy
Operate boilers more efficiently

Energyconservation

More progress with conserving energy (avg. annual reduction of at least 1%)

Activities to contribute to achieving a carbon neutral society

CO2 absorption
by trees

Responsible management and preservation of company-owned forests

Development ofenvironmentally
responsible materials

Develop materials that can replace plastic to lower greenhouse gas emissions ofclient companies

35Inquiries:
Finance & IR Div.
Sumitomo Fudosan Yaesu Building
2- 4- 1 Yaesu, Chuo- ku, Tokyo
Tel: +81- 3- 3281- 8581
Fax: +81- 3- 3281- 8591
E- mail: ttp.ir@s.tt- paper.co.jp* Plans, actions and other statements in this presentation are based on management decisions using
information that was available as of the date of this presentation. As these statements include numerous
risk factors and other uncertainties, actual results of operations may differ from the information in thispresentation.