Results of Operations for theFiscal Year Ended March 31, 2022
Tokushu Tokai Paper Co., Ltd. (TSE, Prime section: 3708)

Contents
Financial Information

Business Strategy

FY3/22 Financial Summary

The Fifth Medium-termManagement Plan

FY3/23 Consolidated Forecast
Shareholder Returns

Financial Summary and Earnings
Business Climate
Goals for the Final Year

For More Growth ofCorporate Value
Listing to the Prime Market
Increase the percentage of tradable
sharesReduce cross-shareholdings
Activities for sustainability

Business Foundation Reinforcement
Industrial Materials
Household Products
Specialty Materials

Growth Strategy
Package Business
Synthetic Fiber Sheet Business
FiblicEnvironment Related Business

1

Financial Information
FY3/22 Financial Summary

FY3/23 Consolidated Forecast
Shareholder Returns

2

Business Strategy
The Fifth Medium-term Management Plan
Business Foundation Reinforcement
Growth Strategy

3

For More Growth of Corporate Value

Financial Results(Millions of yen)

FY3/21
results

FY3/22
results

ChangeNet sales

76,40380,711+4,308Operating income

3,227

4,231+1,004

Ordinary income

5,970

5,733-237

Profit attributable toowners of parent

5,594

5,251-343

Operating income tonet sales

4.2%

5.2%-4Components of Changes in Earnings (vs. FY3/21)
Equity in earnings of affiliates(Millions of yen)

-1,208
Ordinary
incomeOrdinary
income

5,733
5,970

OperatingincomeOperatingincome

3,227

Sales

Materials

Factory
efficiency+1,343-1,527+34

Fixed cost,
Inventories
etc.
+608+316

4,231
Others+230+1,004

FY3/21 results

FY3/22 results5Segment Information(Millions of yen)

Industrial Materials
Business
Specialty Materials
Business
Household Products
Business
Environment
Related BusinessElimination/adjustment

FY3/21 results

FY3/22 results

ChangeNet sales

37,13039,375+2,245

Operating income

1,177

1,154-23

Net sales

18,746

21,275+2,529

Operating income

1,302

2,643

+1,341

Net sales

16,584

16,859+275

Operating income

833

574-259

Net sales

8,773

8,174-599

702-68Net sales(4,831)(4,974)-143

Operating income

(156)

(143)

+13

Net sales

76,40380,711+4,308Operating income

3,227

4,231+1,004

Operating income

Total6

FY3/23 Consolidated Forecast(Millions of yen)

FY3/22
results

FY3/23
forecasts

ChangeNet sales

80,71187,000+6,289

Operating income

4,231

3,100-1,131

Ordinary income5,733

4,000-1,733

Profit attributable toowners of parent

5,251

3,900-1,351

Operating income to
net sales

5.2%

3.6%

-

*Assumptions: Foreign exchange rate: FY ¥125/US$
Crude oil price (Dubai) FY $100/B

7Components of Changes in Operating Income(Millions of yen)

Assumptions
Crude oil price : $100

Materials

Foreign exchange rate: ¥125

-2,243

Sales

Fixed cost, etc.

Steep upturn in the costof materials and fuel

+339

-614

+1,536

FY3/22
results

4,231

Inventories, etc.
-149

3,714

Assumptions

FY3/23
forecast

3,100

Crude oil price : $85
Foreign exchange rate: ¥120-1,1318

Shareholder Distributions
Dividend per Share and Consolidated Payout Ratio■ Dividends (Yen)― Consolidated payout ratio (%)

30.5%

～

125.0Forecast

40%

100.030%

75.0

20%
50.0

Plan to maintain aconsolidated payout ratioof at least 30％

10%
25.0

500.0

50505075507575

100 120

1000%

91

Financial Information
FY3/22 Financial Summary

FY3/23 Consolidated Forecast
Shareholder Returns

2Business Strategy
The Fifth Medium-term Management PlanBusiness Foundation Reinforcement
Growth Strategy

3For More Growth of Corporate Value

Financial Summary of the Fifth Medium-term Management Plan

(Millions of yen)

FY3/21

FY3/22

FY3/23 ForecastGoals

Net sales

76,40380,71187,00082,500Operating income

3,227

4,231

3,100

4,500

Ordinary income

5,970

5,733

4,000-

Profit

5,594

5,251

3,900-

Operating income
to net sales

4.2%

5.2%

3.6%

5.5%

ROE

7.8%

7.2%

5.3%

6.5%
11

Medium-term Management Plan Earnings
Average of Third Medium-term Plan
Operating income:Ordinary income:
Profit:ROE:¥3,645 million¥3,921 million¥2,185 million

3.3%

Average of Fourth Medium-term Plan
Operating income:Ordinary income:
Profit:ROE:¥3,366 million

4.9%

Operating income:Ordinary income:
Profit:ROE:

Fourth Medium-term Plan

Third Medium-term Plan

(Millions of yen)

¥3,294 million¥4,648 million

Average of Fifth Medium-term Plan
¥3,519 million¥5,234 million¥4,915 million
6.7%

Fifth Medium-term Plan

6,000

9.0%
¥5,234 million

4,000

6.0%

2,000

3.0%

00.0%
FY3/15

FY3/16■ Operating income

FY3/17■ Ordinary income

FY3/18■ Profit

FY3/19― ROE

FY3/20FY3/21

FY3/22

FY3/23➡ Average ordinary income during each medium-term management plan 12

Business Climate for the Final Year of the Current Medium-termManagement Plan
Fuel oil ($/barrel) and exchange rate (yen/dollar)■ Fuel oil
120■ Exchange rate

Tokushu Tokai
Paper assumptions

130＝

Fuel oil Russia’s invasion of Ukraine Rapid depreciation of the yen$100/B

Exchange rate ¥125/$
12080

Ukraine crisis

40110

The steep upturn in thecost of materials and fuelhas severely impactedearnings.

1000May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr.
2021 2021 2021 2021 2021 2021 2021 2021 2022 2022 2022 2022
*Estimate by Tokushu Tokai Paper13

Goals for the Final Year of the Fifth Medium-term Management Plan

Actions in response to a challenging business climate
Do everything possible to achieve the goals of the Fifth Medium-term Management Plan

Quick actions ingrowing market
sectors✓Quickly start selling new products✓Identify and meet needs of customers

Initiatives
involving keyissues
Business foundation
reinforcement✓Determine the best actions to use✓Aim to resolve these issues even faster✓Expand measures to sell products at proper prices✓Make factories more cost competitive14

1Financial Information
FY3/22 Financial Summary

FY3/23 Consolidated Forecast
Shareholder Returns

2

Business Strategy
The Fifth Medium-term Management Plan
Business Foundation Reinforcement
Growth Strategy

3

For More Growth of Corporate ValueIndustrial Materials (Shin Tokai Paper ) A consistent supply of products
after establishing the alliance with
Nippon Paper Industries Co., Ltd.

Output of the Shimada Mill (Tons/year)■ Cardboard580000― Kraft paper

Joint venturestarted operating

90000

in Oct. 2016

 Plan to complete the shift of Kraft
paper production from the Kushiro
Mill to the Shamada Mill soon

51000060000

44000030000

A stronger production
infrastructure
Use manufacturing strengths to support
operations of sales companies

370000Make the Shimada Mill an even more importantpart of Japan’s paper industry
3000000FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/2216

Household Products (Paper Towels)
Paper Towel Sales in Japan (Tons/year)➡ Positive factor➡ Negative factor

250

 Growth of the paper towel
market is continuing200 Currently an oversupply of paper
towels due to higher production
and new competitors

About up 6% YoY
150

Aiming for synergies
from the alliance with100Higherproduction, manynew competitors

50

Nippon Paper Crecia Co., Ltd.
Using cross-selling for higher sales and warehouses in
big cities for more efficient logistics; aiming toincrease sales in household products sales channels

0’16

’17

’18

’19

’20’21*Tokushu Tokai Paper estimates using Ministry of Economy, Tradeand Industry manufacturing surveys (Jan.-Dec.)

17

Household Products (Laminated Paper)
Orders Received at the Shimada Mill (Square meters/year)■ Wrapping materials

150000■ Industrial materials■Food Total industry output capacity has
decreased; orders received at theShimada Mill exceed its outputcapacity
 Increasing pressure for making
operations even moreenvironmentally responsible

Up 57%
YoY

120000For higher production and logistics efficiency for laminatedpaper at the Shimada Mill:

90000

60000

Consider alliances withother companies

30000

For more environmentally responsible operations, use
the Fuji laminated paper technologies in thepackaging materials business.

0Helps reduce/eliminate theuse of plastics

FY3/21

FY3/2218

Special Materials
Operating Income in the Specialty Materials Business(Billions of yen)

Up 102%YoY

 Demand for fancy paper is recovering Firm demand for paper for industrial
processes
 Measures to strengthen operations
produced benefits

2.6

Activities to cut costs andsell products at suitablepricesContinue to build a stronger framework for business
operations and work on developing new functional
materials, such as new types of paper that areenvironmentally responsible.

FY3/18

FY3/19FY3/20FY3/21

FY3/2219

Special Materials: Examples of Cost Reduction Measures
Activities
Broke down the work flow for changing types ofproducts made on a production line, which is a time
consuming process, in order to examine individual
elements of this task.
How about transporting
materials in a differentway?

🔍Do you have to carry
three at once?

Raised efficiency by reexamining work practices
that had not changed for many years Reduced man-hours in every
section of the Mishima Mill Improvement measures raisedlabor productivity* 7.5%

Continuing activities for manufacturing
products more efficiently for morecost reductions
Shorter time for tasks＝ Lowered personnel

expenses*Labor productivity = Production volume / Man-hours

20

1Financial Information
FY3/22 Financial Summary

FY3/23 Consolidated Forecast
Shareholder Returns

2

Business Strategy
The Fifth Medium-term Management Plan
Business Foundation Reinforcement
Growth Strategy

3

For More Growth of Corporate ValuePackage BusinessIn the second year after establishing the Package
Business Headquarters, the number ofprospective customers isincreasing steadily.
Second year

Third year (goal)

Up 50% vs. first year Up 3 times vs. first year Participated in eight exhibitions anddistributed e-magazines 13 times
 Many types of marketing activities
produced results

Continuing activities close to customers for
submitting proposals and identifying new needs forsales growth
Goal for FY3/23: ¥100 million

22

Package Business: Use of Paper for Accessories
Use of TT-SPARKLE as a backing paper for accessories (from Tokushu Tokai Paper website)

Product application

Used by Hashimoto Necoaccessories
Brand producer and accessory designer is
Hashimoto Neco

Customerfeedback
お客様の声

Using paper embossing makes the pattern appear to jump out and theappearance changes with the viewing angle. This is a perfect match withour brand image.
We appreciate the speedy responses and ability to purchase paper in small quantities!

23

Package Business: Examples of Product Applications

The number ofapplications for TTPACKAGE and molded
products are increasing
steadily.
24

Synthetic Fiber Sheet Business TT-TOKRON is increasing
the number of customers

Features: Electrical insulation, heat
resistance Plan to start selling fleece
wallpaper during FY3/23

Aiming for growth as thesesheets are used in many
applications
Features: Easy to install, easy for
remodeling

Goal for the synthetic fiber
sheet business
FY3/23 Goal

Long-term goal

¥408 million¥3,000 million
25

Fiblic

Three features of cellulose
separators
Easy toprocess

HeatresistanceHigh electrolyte
permeability

Competitive advantage
in the film separator market

 Started full-scale productionin December 2021
 Sales activities started in thesecond half of FY3/23

This business is
expected to become
profitable during theFifth Medium-termManagement Plan26

Natural Environment Business (Whisky Business)

Stability of production and quality
Received highest rating for two consecutiveyears in the National Tax Agency
unblended whisky quality examinations

Upgrading technologies whileremaining committed to thefundamental policy of long-term aging

Submitting new-makespirit* for evaluations
Raising the value of Ikawa’s forest land
Completed the “trial production of barrels”
using wood grown in this forest

27*An alcoholic liquid aged less than 3 years that has not yet become whisky

Resource Reuse Business

Our Vision
Tokushu Tokai Paper is one of the very few companies able to use the perspectives of both a manufacturer and a recycling/reusecompany for directly assessing progress concerning the processing and recycling of waste materials. Our goal is growth that differsfrom that of big companies specializing in handling waste materials by aiming to significantly enlarge the breadth of resource
recycling/reuse activities.
We are increasing the number of partners nationwide and moving even faster with the goal ofestablishing a clean corporate infrastructure that combines communities, paper mills and recycling
plants.

We are here
today!

First stage ofrecycling
Recycling of paper

Second stage ofrecycling
Thermal energy fromwaste materials

Use of heat from internally produced
sludge, etc.
Use of heat from waste
plastics/construction waste
Use of used paper (use of substances)
Recovery of chemicals (use of substances)
Use of black liquor fuel (thermal recovery)

Third stage of recycling
More advanced
recycling techniques

Use of materials in internally produced
incinerator ash
Use of substances/heat using advanced
sorting techniques

Forth stage of recycling

Sustainable wastematerial processing
and energy use

Processing that includes returningmaterials to nature (landfills, etc.)
Green electricity/electric car business28

1Financial Information
FY3/22 Financial Summary

FY3/23 Consolidated Forecast
Shareholder Returns

2

Business Strategy
The Fifth Medium-term Management Plan
Business Foundation Reinforcement
Growth Strategy

3

For More Growth of Corporate ValuePrime Market Listing Requirements
Major issues

Progress

At least one-third of the board
must be independent, outsidedirectors

 Start of the new market segmentsof the Tokyo Stock Exchange Prime Market listed companies
must meet high standards forcorporate governanceDiversity of key management
personnelImproving

Increase the percentage oftradable sharesStrengthen corporategovernanceReduce cross-shareholdings

Activities for sustainability

Continuing

We are dedicated to complying with the revised
Corporate Governance Code as well as to making
progress with other issues for the purpose ofachieving medium and long-term growth ofcorporate value.
30

Increase the Percentage of Tradeable Shares
Number of tradeable shares■Tradeable shares－Pct. of tradable shares

60.0%

7,000,000.0

Secondary offeringin Feb. 2022

At preliminary
market category
listing assessment

March 31, 2022

40.6%

45.0%

50.0%
6,000,000.0

40.0%
5,000,000.0

30.0%
4,000,000.0

20.0%

3,000,000.0

10.0%

Continuing to take actions
to raise the percentage oftradable shares

0.0%

2,000,000.0

FY3/18

FY3/19FY3/20FY3/21

FY3/2231

Reduce Cross-shareholdings
Cross-shareholdings(Billions of yen)

■Number of shares classified as cross-shareholdings－Cross-shareholdings as pct. of net assets

20.0%

18.0
180

About 15.0%

 The board of directors periodicallyexamines the policy for holding
stock of other companies
 Sales of some cross-shareholdings
are planned during 2022
(An announcement has been made)

9%

12.0
120

10.0%

60
6.015.414.4

11.0

11.3

No more than 10%

8.2
5.0%

We plan to meet the Glass Lewis andother standards for cross-shareholdings
as a percentage of net assets

0.0%0
FY3/19FY3/20FY3/21

FY3/22

FY3/23(Forecast)32

Activities for Sustainability (1)The challenge foradding new
business domains
Environmental businesses
Utilization of the Minami Alps
Effective reuse of wastematerials (biomass energy,etc.)

Replace current
materials with paper(use as a biomassmaterial)
Industrial materials
Specialty materials
Household products

Fusion of distinctivetechnologies

More progress
Stop using plastics with the threepapermaking
Reduce use ofplastics
businesses

A resolute commitment
to contributing to thecreation of a sustainablesociety

A stronger
foundation
for managing
business
operations

Activities for upgrading employees’skills and increasing diversity
Upgrade and firmly establish corporate
governanceTechnologies we have createdPaper for
Handbook
Leather-like
Playing card
paper towels cover paper
paper
paper
Tile laying
Paper with
Offset master support
paperglass
Hand towel
MedicalNonwoven
Marblepaper
fabricpattern paper packaging
UmbrellaUepron
Red rope Tire wrapping
paperpaper*Tokushu Tokai has created many other innovative technologies in addition to theseexamples.

Equipment that helps protect
the environment
Boilers for theBiomass boilers
recovery of black
liquorSolar power
Hydroelectric power
equipment
equipment

33

Activities for Sustainability (2)CO2 emissions (thousand tons) and emission intensity (tons/production)
TargetDown 38% from

Effectiveemissions

2013(Unit emissions: 0.18)

02030

2050

0.66

487
2005

0.28

0.22

219

152

2013

2020

Down 68%from 2005

Start using electricity produced from renewable energy
Shift of biomass electricity to internal use
Develop new types of fuelCarbon neutrality forenergy use

Start using new technologies
Operate boilers more efficiently
Continue energy conservation measures (1% reduction every year)
Lower GHG emissions of customers by developing products that reduce the volumeof waste plastics
Conservation measures for Tokushu Tokai Paper Group Energy forests

Carbon neutrality forother than energy use
219
Information disclosure schedule152

94

Feb: Announcement of agreement with TCFD➡

Mar.: Release of Integrated Report➡

Jun.: Start of disclosures on TCFD basis

34*CO2 emissions involving fossil fuel energy used for manufacturing operations of
the four Tokushu Tokai Paper Group manufacturing companies.

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.