Results of Operations for the
Fiscal Year Ended March 31, 2023
Tokushu Tokai Paper Co., Ltd. (TSE Prime, 3708)

Consolidated Financial SummaryHigh prices of raw materials and fuel created a challenging business climate.



Although the benefits of price revisions began to emerge, sales increased but earnings were lower.

FY3/22

FY3/23YoY

Net sales

80,711000

84,130000+3,419000+4.2%000

Operating income

4,231000

1,640000-2,591000-61.2%0.0

Ordinary income

5,733000

4,058000-1,675000-29.2%000

Profit attributable toowners of parent

5,251000

4,130000-1,121000-21.3%0002Components of Changes in Earnings(Millions of yen)
Non-operating
income/expenses+916

Ordinary income

5,733

Ordinary income

4,058
Operating income

4,231

Operating income

1,640

FY3/22

Sales

Materials

Factory efficiency

Fixed cost, etc.

Inventories

Others+869+4,276

+132

+296

+179

+209

FY3/23

3

Segment Information

Sales increased in the industrial materials and household products segments but were down in the specialty materials
segment because of a decline in the sales volume.

Environment-related sales and earnings increased as growth continues in this segment.

FY3/22

Industrial Materials
Business

Specialty Materials
Business
Household Products
Business

Environment Related
Business

Elimination/
adjustment

FY3/23YoY

Net sales

39,375000

43,493000+4,118000

Operating income

1,154000

977000-177000

Net sales

21,275000

20,661000-614000

Operating income

2,390000

615000-1,775000

Net sales

16,859000

17,358000+499000

Operating income

574000(139)000-713000

Net sales

8,174000

8,502000+328000

2000

84000

+82000Net sales(4,974)000(5,884)000-910000

Operating income

109000101000-8000

Net sales

80,711000

84,130000+3,419000

Operating income

4,231000

1,640000-2,591000

Operating income

Total

4

FY3/24 Forecasts

Forecast a V-shaped recovery in FY3/24 due to the benefits of price revisions in all three paper segments.

FY3/23

FY3/24YoY

Net sales

84,130000

90,000000+5,870000+7.0%000

Operating income

1,640000

3,000000+1,360000+82.8%0.0

Ordinary income

4,058000

6,000000+1,942000+47.8%000

Profit attributable toowners of parent

4,130000

4,000000-130000-3.2%000

5Components in Change in FY3/24 Earnings(Millions of yen)
Non-operating
income/expenses+582

Ordinary income

6,000

Ordinary income

4,058

Operating income

3,000
Operating income

1,640

FY3/23

Sales

Materials

Factory efficiency

Fixed cost, etc.

Inventories

Others+4,271-1,962

+26

-661

-360

+46

FY3/24

6

6

Summary of the th Medium-termManagement Plan
Tokushu Tokai Paper Co., Ltd. (TSE Prime, 3708)* For details, please see “The 6th Medium-term Management Plan” released the same day.

Long-term Vision

Medium/long-term growth at the TTP Group of

Corporate Value=Contributions to a sustainable society

In the past
In the future

To help create a society where resources are reused, we are concentrating on the environment
related business in order to expand to new business domains other than the core paper business.
We are dedicated to playing a role in achieving a sustainable society.
New Business Domains

Expansion to Environment
Related Business

A Stronger Infrastructurefor Business Operations

Growth of the Three Paper
Businesses

8Long-term Vision

Actions for the growth of corporate value

Business Portfolio Realignment and Innovation

Recycling businesses
Synthetic fibers(Aramid Paper)Core business

Environmentally
responsible
products

Environment
RelatedBusiness

WhiskyThree Paper Businesses
New activities

FiblicPackage9Medium and Long-term Vision

Realignment and Innovation ＝Shift from the shrinking paper/pulp business to the recycling sector,
where more growth is expected

Growth Centered on the Environment Related BusinessLong-term goals

Sixth Medium-termManagement Plan Goals

Prior year results
Operating income:¥1.6 billion

Ordinary income:¥4.0 billion

ROE

5.7%

Paper Businesses

Environment
RelatedBusiness¥5.0 billion
Ordinary income: ¥8.0 billion
ROE
7.0%

Operating income:¥10.0 billion

Ordinary income:¥13.0 billion

ROE

8.0%

Operating income:Environment
RelatedBusiness

Paper Businesses

Business portfolio

long-term vision

The past

10

The Sixth Medium-term Management Plan

Slogan of the Sixth Medium-term Plan based on our long-term vision

Selections, Challenges and Innovations
Selections
Selections for assembling a new business portfolio
Selections
New Business Domains (Environment Related Business)

Growth of the Paper Businesses

Challenges

Growth of the Resource
Reuse businesses

Natural Environment Business
Effective use of TTP forests

Make the paper
businesses stronger

Innovations

Operate a diversified
recycling business

Make this business a
profit center

Create new satellite businesses

Investments for growth
Total of ¥8.7 billion¥

4.8 billion (55%)¥

0.4 billion (5%)¥

3.5 billion (40%)
11The Sixth Medium-term Management Plan

Selection

1

New Business Domains (Environment Related Business)

The challenge to expand theresource reuse business
Innovation
Use R&D concerning advanced recycling technologies tocreate a diversified recycling business
Thermal recycling

Material recycling

Three Paper
Businesses

SurugaService K.K.

Toei Co., Ltd.

Materials

Other
companies

Thermal materials

Sixth Medium-term Plan goal for the resource
reuse business

REX Co., Ltd.

RPF

Mishima mill

RPF
Wood chips

Shimada millCompared with the final year of the Fifth Medium-term Plan

operating income growth + ¥600

million12

The Sixth Medium-term Management Plan

New Business Domains (Environment Related Business)

Due to large investments during the Fifth Medium-term Plan, the resource reuse business

Thermal energy from waste materials =Reached stage 2 of recycling

Established REX Co., Ltd. in 2000

Started production of
RPF (refuse paper andplastic fuel)

Today

▶▶▶

Used for about 70% of fuel at TTP mills

Second stage ofrecyclingFirst stage ofrecycling

Thermal energy
from wastematerials

Recycling of paper

13

The Sixth Medium-term Management Plan

New Business Domains (Environment Related Business)

Acquired Suruga Service K.K. in 2020

Equity investment in Total Environmental
Innovation Co., Ltd. (Toei)
Acquired Suruga Service in 2020

Forth stage of recycling

Enlargement of recycling operations▶▶▶

Sustainable waste material
processing and energy use

Able to collect even more waste materials

Third stage of recycling
Today

More advanced recycling
techniques

Industrial and general waste materials

Waste material collection andtransport capabilities
Home appliances, glass, etc.

Technologies for reuse as
resources

Taking the resource reuse business to theMaterial Recycling Stage

Going beyond recycling

Knowledge encompassing
many fields
14

The Sixth Medium-term Management Plan

New Business Domains (Environment Related Business)

The additions of REX, Suruga Service and Toei

Greatly strengthen the TTP Group’s resource
recycling infrastructure
Sources of waste materials

Users of waste materials

Papermaking companies(Manufacturing)

Recycling of used paper(Material recycling companies)

Users of waste materials

Recyclers of waste materials

Biomass boilers(Thermal recovery of waste materials)

Intermediate processing/RPF production(Waste material processing/recycling
companies)

Complete coverage of resource recycling within the TTP GroupTTP will continue to use its resources to help create a society where materials are recycled

15

The Sixth Medium-term Management Plan

Selection

2

New Business Domains (Environment Related Business)

The challenge of creating businesses
that utilize nature, including theeffective use of TTP’s forests

Innovation
Make this business a profit center

16

The Sixth Medium-term Management Plan

New Business Domains (Environment Related Business)

TTP’s Ikawa Forest covers 24,430 hectares

The forest will be preserved as a central elementof TTP’s identity
Theme

Return the value of the Ikawa Forest to society

CO₂
Preserve biodiversity

Absorption, fixation and storage of CO2

 The forest prevents landslides

 The forest helps combat global warming The forest collects and retains water

17

The Sixth Medium-term Management Plan

New Business Domains (Environment Related Business)

Using the value of the Ikawa Forest for

Growth of the Whisky Business
Theme

A whisky brand backed by nature and manufacturing artisans Whisky produced and aged over time amid nature including
an abundance of alpine plants.
 Manufacturing expertise and craftsmanship acquired overmany years of papermaking underpins an uncompromisingcommitment to quality (fabrication of a highly distinctive
whisky).
 Production uses hydroelectric power, which generates no CO2.

Whisky business goal of the Sixth Medium-term Plan

 Increase the value of the Ikawa Forest as a businessresource of the TTP Group.
 Use the sale of whisky as one way to return thevalue of the forest to society.

Contribute to earnings
18

Measures for the Sixth Medium-term Management Plan

Selection

3

Growth of the Paper Businesses

The challenge of altering thepaper business product portfolio

Innovation
Create new satellite businesses

19Measures for the Sixth Medium-term Management Plan

Growth of the Paper Businesses

Closure of the Gifu Mill (Announced May 12)

Consolidation of fancy paper production
The Mishima Mill will produce
all specialty paper in order tomake manufacturing operations
even more efficient.

Also plan to relocate theGifu Mill’s moldproduction machinery to
the Mishima Mill➡ Expected to provide an evenmore stable supply of
products➡ Continuation of moldproduction

Reason for closure

Declining size of the fancy paper market(Tons/year)

About

40,000t

About

90年
1990

00年
2000

About

7,000t8,000t20年
2020

22年(直近)
2022
(now)

10年
2010

*TTP fancy paper sales volume. Volume before 2010 includes the Yokoi Mill.

20

Measures for The Sixth Medium-term Management Plan

Growth of the Paper Businesses

Use R&D and new market development activities toCreate new paper industry satellite businesses New applications and sales growth inJapan and other countries
Recyclingbusinesses

Environmentally
responsible
products

Core businessAP

Environme
nt Related
Business

WhiskyThree Paper
Businesses

New activities

 Develop products that replace plastics andlower CO2 emissions

Fiblic Submit ideas for new products directly tocustomers

Package Develop packaging that differs fromcompetitors’ products

 Considering an increase in production capacity

Sixth Medium-term Plan goal for Fiblic, synthetic fibers and othersatellite businesses

Compared with the final year of the Fifth Medium-term Plan

operating income growth of ¥600 million
21

Measures for The Sixth Medium-term Management Plan

Growth of the Paper Businesses

Studies and Actions
Applications for aramid paper

Studies are under way to devise
new uses for aramid (aromaticpolyamide) fiber, which has
outstanding thermal and electricalresistance and dimensional
stability.

Applications for value-added packaging

HITOTOKI brand stationery
products of King Jim Co., Ltd. uses
TTP molds.

MD Note of Designphil Inc. is madeusing a mold fabricated with the cofiring of waste materials.

Aiming to continue creating new satellite businesses by using marketing and research activities to
identify opportunities for new businesses that can create new forms of value from the standpoint of customers

22

The Sixth Medium-term Management Plan

Selections for assembling a new business portfolio
Selections

New Business Domains (Environment Related Business) Growth of the Paper Businesses

Challenges

Growth of the Resource
Reuse businesses

Natural Environment Business
Effective use of TTP forests

Make the paper
businesses stronger

Innovations

Operate a diversified

Make this business a
profit center

Create new satellite
businesses

Sixth
Mediumterm Plan
Goals

recycling businessCompared with the final year of the Fifth
Medium-term Plan

operating income growth+¥

600 million

Become profitable(improvement of ¥200 million)

Compared with the final year of the Fifth
Medium-term Plan

operating income growth+¥

600 million

23

Management Items in the Sixth Medium-Term Management Plan

To achieve the goals of the medium-term plan, even more actions forManaging businesses based on the cost of capitaland return on capital

Return on assets (ROA target) > Weighted average cost of capital (WACC)
Emphasis on profitability by using the ROA target as the hurdle for investment decisions

Efficiency

Business unit return on assets (ROA)= Earnings contribution after taxes* / Total assets of business unit
*Business unit operating income before corporate expenses

Investment decisions

Return on investments (ROI) ＞ Return on assets (ROA target)

This is consistent with the demands of the Tokyo Stock Exchange as explained in theexchange’s March 31, 2023 press release “Request for Measures for Management with
Emphasis on the Cost of Capital and Stock Prices.”24Capital Policy and PBR Improvement Measures in the Sixth Medium-Term Management Plan

Flexible decisions reflecting current conditions for dividend hikes and repurchasing stock

Improve the PBR and other indicators
Dividend

Stock repurchases

The basic policy is a stable and consistent dividend using apayout ratio of about 30% as the guideline.

About ¥7.4 billion of stock was repurchased during the Fifth Medium-term
Plan. Furthermore, based on the policy for holding treasury stock, anumber of shares equal to about 10% of all shares issued have beenretired.

Higher earnings from new business growth and othermeasures for

Based on the current stock price and other factors

Decisions that may include a higher
dividend based on the dividend policy

Stock repurchases are expected tocontinue in a timely manner

Performance Indicators
ROE (%)PBR (times)
0.89

7.8
%

7.2
%

0.84

7.0

0.54

%

0.48
5.7

5.3

%

%

20/3
FY3/2021/3
FY3/21

22/3
FY3/22

23/3
FY3/23*Calculated using the stock closing price at the end of each fiscal year.

20/3
FY3/2021/3
FY3/21

22/3
FY3/22

23/3
FY3/23

6次目標
Sixth Medium-

term Plan

25

Topics: Actions for growth of corporate value

Due to the new biomass boiler at Shin Tokai Paper (planned for FY3/27) and other actions

The target for the year ending March 2031 is within reachIn 2021, TTP’s fossil fuel energy CO2 emission intensity declined to 1/4 of the average for the paper industry.

Base year

Actions for achieving the FY3/31 target(FY3/14)

New biomass boiler to reduce purchases ofelectricity
Reduce use of heavy oil as a combustion
improver in boilers
Energy conservation measures at paper mills
Down 31%(FY3/22)

Target is down 38%(FY3/31)

Achieve carbon neutrality(FY3/51)

26

Topics: Actions for growth of corporate value

Changing to a new corporate governance system as one step for strengthening management

A shift to a Board of Directors that monitors management
Current: Company with the Audit & Supervisory Board

After change: Company with Audit & Supervisory Committee

The Board of Directors will have five internal directors and six outside directors,
including outside directors who are members of the Supervisory Committee.

* Subject to approval at the 16th Annual General Meeting of Shareholders to be held in June 2023.

27

Long-term Vision

Medium/long-term growth at the TTP Group of

Corporate Value=Contributions to a sustainable society

In the past
In the future

To help create a society where resources are reused, we are concentrating on the environment
related business in order to expand to new business domains other than the core paper business.
We are dedicated to playing a role in achieving a sustainable society.
New Business Domains

Expansion to Environment
Related Business

A Stronger Infrastructurefor Business Operations

Growth of the Three Paper Businesses

28

Contact

Inquiries:
TEKKO BUILDING 11F, 1-8-2 Marunouchi,
Chiyoda-ku, Tokyo
Tel: +81-3-5219-1816* Plans, actions and other statements in this presentation are based on management decisions using information that wasavailable 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 this presentation.