Results of Operations for the
Fiscal Year Ended March 31, 2021

Tokushu Tokai Paper Co., Ltd.

I. Financial Information
FY3/21 Financial Summary≫Consolidated Financial Results≫Components of Changes in Earnings≫Segment Information

FY3/22 Consolidated Forecast≫Consolidated Forecast≫Components of Changes in
Operating Income

II. The Fifth Medium-termManagement Plan
≫Positioning of the Fifth Plan within theLong-term Plan
≫Business Environment≫Plan for Improving Performance and
Growth≫Sustainability-Activities for a Sustainable Society-

III. Business Foundation Reinforcement/
Growth Strategy
Business Foundation Reinforcement≫Industrial Materials Business andHousehold Products Business≫ Specialty Materials Business
Growth Strategy (1)- Creating New Sources of Demand forPaper Products≫The New Added Value Strategy≫The Added Value Package Strategy≫Accomplishments at TOKYO PACK 2021
≫Establishment of MOLDEA≫Development of Environmentally
Responsible Products
Growth Strategy (2)- - New Businesses Other Than
Paper Products≫Environment Related BusinessIII. Business Foundation
Reinforcement/Growth
Strategy

・FY3/21 Financial Summary

・Positioning of the Fifth
Plan

・Business Foundation
Reinforcement

・FY3/22 Consolidated
Forecast

・Business Environment
・Plan for Improving
Performance and Growth・Sustainability▼

II. The Fifth Mediumterm Management
Plan▼

I. Financial Information

・Growth Strategy (1)-Creating New Sources of Demand forPaper Products-

・Growth Strategy (2)-New Businesses Other Than Paper
Products-

I. Financial Information

FY3/21 Financial Summary
 Consolidated Financial Results(Millions of yen)

FY3/20FY3/21

ChangeNet sales

80,60376,403-4,200Operating income

2,870

3,227

357

Ordinary income

5,389

5,970

581

3,694

5,594

1,900

3.6%

4.2%

-

Profit attributable toowners of parent
Operating income to
net sales4I. Financial Information

FY3/21 Financial Summary
 Components of Changes in Earnings (vs. FY3/20)(Millions of yen)

Ordinary
income5,970

Ordinary
income5,389

Non-operating
income+2,743Non-operating
income+2,519+306+48

Operatingincome2,870

FY3/20results-1,873-239+265

Operatingincome+1,8503,227
Sales
activities

Materials

Factory
efficiency

Fixed cost,
etc.

営業利益
+357 前年同期比+357
vs. FY3/20

Inventories

OthersFY3/21
results5

I. Financial Information

FY3/21 Financial Summary Segment Information(Millions of yen)

FY3/20FY3/21

ChangeNet sales
Industrial
Materials Business Operating income

39,15937,130-2,029

1,209

1,177

-32

Net sales
Specialty
Materials Business Operating income

21,911

18,746-3,165

1,118

1,302

184

17,86016,584-1,276

Operating income

528

833

305

Net sales

6,759

8,773

2,014

Operating income

120

70

-50

Net sales(5,087)(4,831)

256

Operating income

(106)

(156)

-50

Net sales

80,60376,403-4,200Operating income

2,870

3,227

357

HouseholdProducts
Business
Environment
RelatedBusiness
Elimination/
adjustment
Total

Net sales* Beginning in 1Q FY3/21, the method for determining business segment profit or loss has been revised due to a reexamination of thestandards for allocating corporate expenses. Prior year operating income has been adjusted to reflect this revision.

6

I. Financial Information

FY3/22 Consolidated Forecast
 Consolidated Forecast(Millions of yen)

FY3/21 results

FY3/22 forecasts

ChangeNet sales

76,40381,0004,597

Operating income

3,227

3,600

373

Ordinary income

5,970

5,000

-970

5,594

3,600

-1,994

4.2%

4.4%

-

Profit attributable toowners of parent
Operating income to
net sales*Assumptions: Foreign exchange rate: 1H: ¥105/US$; 2H: ¥105/US$
Crude oil price (Dubai) 1H: $55/B; 2H: $55/B

7

I. Financial Information

FY3/22 Consolidated Forecast Components of Changes in Operating Income (vs. FY3/21)
-953
-90

+1,685+12(Millions of yen)

-281

Operating
IncomeOperating
Income

3,600

3,227
Sales
activities

FY3/21
results

Materials

Factory
efficiency

Fixed costs,
etc.

+373 vs.
FY3/21
営業利益
前年同期比+357

Growthstrategy

FY3/22
forecast
8

III. Business Foundation
Reinforcement/Growth
Strategy

・FY3/21 Financial Summary

・Positioning of the Fifth
Plan

・Business Foundation
Reinforcement

・FY3/22 Consolidated
Forecast

・Business Environment
・Plan for Improving
Performance and Growth・Sustainability▼

II. The Fifth Mediumterm Management
Plan▼

I. Financial Information

・Growth Strategy (1)-Creating New Sources of Demand forPaper Products-

・Growth Strategy (2)-New Businesses Other Than Paper
Products-

II. The Fifth Medium-term Management Plan

Positioning of the Fifth Plan within the Long-term Plan
Start full-scale activities targeting
growing market sectors where
activities started following theidentification of these sectors during
the fourth plan

The Fifth Medium-termManagement Plan

2023

Jump Forward To Next 10

2020
2017

The Fourth Medium-termManagement Plan
Next 10

第5次中計最終年度

FY3/23 targets

Longterm goals
長期目標

売上高
Net
sales

825億円
¥82.5
billion1,200億円¥120 billion

営業利益
OperatingincomeOperatingmargin
営業利益率

45億円
¥4.5
billion

100億円¥10 billion

5.5%

8.3%

ROE

6.5%

8.0%

Final yearof Fifth Medium-term Plan
2023年3月期目標

10

II. The Fifth Medium-term Management Plan

Business Environment Market conditions are expected to become even more challenging for existing productcategories and other sectors of the papermaking business. But social demands for reducing
the use of fossil fuels, plastic and other materials to protect the environment may create
additional demand for paper products.
Negative effects

Positive effects

Political and social
factors

Slow global economic growth, Japan’s declining
population, increasing speed of the downturn in useof paper as an information communication medium

Activities to shift to a sustainable society

Market factors

Market saturation in Japan, weak performance of the
publishing industry, higher cost of logistics

Increasing awareness of the importance of hygiene
Increasing demand in Japan associated with foreign
tourists

The paper industry
factors

More machinery and oversupply for cardboard,household paper products and other paper products
Price- based competition for printing paper, paper for
IT applications and other types of paper

Demand for reducing the use of fossil fuels andplastics

 For more growth, we are realigning the business portfolio bycreating new sources of demand for paper products and starting

new businesses other than paper products
 Management resources will be focused on products involving the environmentand hygiene.

11

II. The Fifth Medium-term Management Plan

Plan for Improving Performance and Growth(Millions of yen) To grow as the demand for paper products changes rapidly, we will maintainsuitable inventories and selling prices, cut the cost of production, and take otheractions to strengthen existing business operations.
 Build a framework for consistentNewearnings during the “new normal”
Business
after the COVID- 19 pandemic ends.
+100 +1,600

4,500

2,900
FY3/20Industrial
Materials+200

HouseholdProducts+100

SpecialMaterials+400

Environment
Related+800

FY3/23

Expected improvements

FY3/23Long-term goals

Suitable selling prices¥260 million¥300 million

Review of business processes¥270 million¥400 million

Other¥60 million¥220 million

Total¥590 million¥920 million
12II. The Fifth Medium-term Management Plan

Sustainability - Activities for a Sustainable Society The Tokushu Tokai Paper SDG Project started in February 2021
Planned activities(1) Post data for the entire group, mainly involving the environment, on the corporate website.
(2) Conduct a comprehensive review of the group’s activities in prior years involving the SDGs.
(3) Plan to issue a sustainability report at the end of FY3/22 with information about activities, issues and targets.

 Reference: Energy Composition (FY3/20) and CO2 Emissions from Fossil energy
Refuse paper,
plastic, etc.

Purchased
electricity

Fossil energy
24%
Heavy oil,

(Kltons-CO2)

281
253

etc.

Gas

FY3/16
Wood

Black liquor

171

170

163

FY3/18

FY3/19FY3/20FY3/17CO2 emission intensity is about half the industry average*1. Includes four companies subject to the Act on the Rational Use of Energy.
*2. CO2 emissions are calculated by Tokushu Tokai Paper based on the Act on the Rational Use of Energy and basic emission coefficients of individual electricity providers.
*3. The industry average is an estimate by Tokushu Tokai Paper.

13II. The Fifth Medium-term Management Plan

Sustainability - Activities for a Sustainable Society
 Reference: Basic Policy for Procuring Wood
Basic Philosophy
Tokushu Tokai Paper is dedicated to procuring wood used as raw
materials in an environmentally responsible manner in order tooperate in harmony with the environment as prescribed in theEnvironmental Charter.

Procurement Policy and Activities
１. We do not purchase or supply the following types of wood.
・Wood harvested illegally・Wood harvested by violating traditional rights or civil rights
・Wood harvested from forests there is a risk to the high valueof preserving these forests due to administrative activities
・Wood harvested from planted forests (plantations) or fromforests that are to be converted to a different use
・Wood harvested from forests that include geneticallymodified trees

 In accordance with this basic policy for procuring
wood, we purchase raw materials fromsustainable sources that contribute to progressconcerning environmental and social issues.
 The Shimada Mill, which manufactures kraft pulp,
uses only wood chips that satisfy the Forest
Stewardship Council requirements for wood andother materials that have been properly managed.

２. Suppliers of all wood raw materials used are contacted toconfirm compliance with all items in the preceding section as
well as the characteristics of the region where the wood was
harvested.
３. All procurement activities comply with the raw material
procurement standards of the Act on Promotion of Use andDistribution of Legally-Harvested Wood and Wood Products(known as the Green Wood Act).
(Company’ HP: https://www.tt- paper.co.jp/csr/environment/symbiosis/lumber/)

The chip storage area of the Shimada MillFSC License Code: FSC- C131179 Tokushu Tokai Paper Co., Ltd. Industrial Material Business Division14

III. Business Foundation
Reinforcement/Growth
Strategy

・FY3/21 Financial Summary

・Positioning of the Fifth
Plan

・Business Foundation
Reinforcement

・FY3/22 Consolidated
Forecast

・Business Environment
・Plan for Improving
Performance and Growth・Sustainability▼

II. The Fifth Mediumterm Management
Plan▼

I. Financial Information

・Growth Strategy (1)-Creating New Sources of Demand forPaper Products-

・Growth Strategy (2)-New Businesses Other Than Paper
Products-

Business Foundation
Reinforcement

III. Business Foundation Reinforcement/Growth Strategy - Business Foundation Reinforcement

Industrial Materials Business/Household Products Business
Fifth Medium-term Management Plan:

Reinforce the current profit structure primarily by building a stronger foundation for
operations

 Industrial Materials Business
Hold down the pct. of energy from fossil
fuels at the Shimada Mill of Shin Tokai
Paper to maintain the superiority of thismill as a low-carbon factory.
The recycled kraft paper development
project is near the commercialization stage.
Plan to start developing products that canreplace plastic in many applications.

 Household Products Business
Demand for laminated paper is recovering
for some food products.
The paper towel business alliance with
Nippon Paper Crecia is progressing asplanned. In FY3/21, a new productwas launched that enables paper toreplace wrapping film.

Shimada Mill Fossil Energy CO2 Emission Intensity

Tons CO2
emissions per
ton of paper

FY3/16
FY3/16

FY3/17

FY3/18

FY3/19FY3/20

Outlook for the Household Products Business (Major activities)

Laminated products

Products forcosmetics boxes
and tourism
souvenirs

Moved above the minimum level▶ but market conditions are stillchallenging

Food packaging▶

Increasing demand for takeout
items and in other categories▶

Demand is increasing

Paper towels

17III. Business Foundation Reinforcement/Growth Strategy - Business Foundation Reinforcement

Specialty Materials Business
Fifth Medium-term Management Plan:

Aiming for big increases in sales and earnings by building on the accomplishments of the
fourth plan.
 Glass interleaving paper
Continue to aim for a higher market share by further differentiating products from competing products.

 Research and Development
Use new and existing technologies to develop environmentally responsible products.
Examples: Process paper that can replace film used in manufacturing processes
Specialty paper used as a substrate for electronic devices

In the synthetic fiber sheet business, we will continue toupgrade the quality of current products and develop and sell
new paper for building materials (floors, walls, etc.) and othernew products. The goal is sales of ¥740 million in FY3/23.

Heat resistance and electrical insulation
make this paper ideal for motors

Example of fiber product: TT-TOKRON
Characteristics: TT-TOKRON is a meta- aramid fiber sheet thatcan withstand heat, has high tensile strength and is anelectrical insulator.
Applications: Electrical transformers, motors, etc.
18

Growth Strategy (1)-Creating New Sources of Demandfor Paper Products-

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (1)Creating New Sources ofDemand for Paper Products

The New Added Value Strategy

 Tokushu Tokai Paper has started a value- added package business for using expertise
involving high- performance paper to create products that enable replacing many typesof materials with paper- based products.

The Added Value Package Strategy
Anticounterfeiting
technology- Consolidation and fusion of high- performancetechnologies (Joint creation) -Protection
storagetechnology

Hazardous gas
absorption
Oxygen/humidity
technology
barriertechnology
Innovativetechnologies
Humidity control
technology

Develop materials for highperformance packages

Alliance/M&A

Liquid absorption
fineness retention
Cushioning
technology
material processing
Aluminum vapor
technology
deposition film
technology
Lamination technology
Liner/core/kraft
wrapping paper
technology

Packaging converters
Create new markets

Brandedmaterials

Pharmaceuticals
Cosmetics

Users of packages

Highendmaterials

Tea
Sweets20

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (1)The Added Value Package Strategy

Creating New Sources ofDemand for Paper Products Launching the package business is one of the highest priorities of the first year of
the Fifth Medium-term Management Plan. We are positioning packages as a new
business category and will take actions for the growth of this business.

» Target new needs
New needs involving packages areconstantly emerging, such as forenvironmentally responsible packages. We
will use a broad range of materials andprocessing machinery to supply many typesof packaging paper in order to meet theseneeds.

» 3D innovations

We have established a new company called
MOLDEA with Ueroku Printing Co., Ltd. andNagoya Mould Co., Ltd. By using thestrengths of its three owners, the newcompany fabricates molds with new forms ofvalue by handling every step from basic
materials to finished products.

The silky mold

» Direct ties with end users
This business will use a B-to-B ecommerce and other marketing activities
to supply more products directly to end
users.
21

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (1)Accomplishments at TOKYO PACK 2021

Creating New Sources ofDemand for Paper Products Interest in our products and new ideas was stronger than anticipated at the TOKYOPACK 2021 international packaging show. In particular, the high level of interest amongplanning and design firms bodes well for sales growth.
 Accomplishment 1: Relationships withnew users
This trade show resulted in more relationships
with new users than in prior years at this show.
We will continue to promote the use of our
products to these users.

Interest in our products
Sample requests

45 companies

Meeting requests

101 companies

The Tokushu Tokai Paper booth Accomplishment 2: Used the TT-PACKAGE
display to target customers’ needs
As expected, there was very strong interest in new
products for food. Many people asked for
information about our innovative cushioning
materials and water soluble laminates.

New productTakeout food packaging demand×Resistant to water/oil and absorbs
water/oil×
Alternatives for plastic packaging

22

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (1)Creating New Sources ofDemand for Paper Products

Establishment of MOLDEA
Nagoya Mould
Specialty design package
紙の風合いを活かした
using the texture of
特殊デザインパッケージ
paper
Designs
and fabrication
自社によるof molds
デザイン設計金型製作

Ueroku Printing

Tokushu Tokai Paper

Integrated operations「アッセンブリ」までの高品質な特殊紙製造のproductionof high-

Expertise for the

includingassembly
一貫工程

ノウハウpaper
quality specialty

Techniques for many

Ideasニーズに応える
for raw materials
for 原材料の提案
specific needs

多彩な「加飾」技術
types of decorations“MOLD” × “IDEA”

 Preparations under way for the start of operations
STEP1
Studies concerning profitability,
採算可能性や設備導入のrequired equipment and othersubjects needed to start business
検討など事業化の準備
operations

STEP2

STEP3

Start operating equipment,
設備立ち上げ・サンプル

Establish framework for selling
ウェットモウルドの販売

supply samples and begin salesof general-purpose products
提供・汎用型の販売開始

wet molds and start operating thisbusiness
体制を確立、本格参入

 Sample shipments and other sales activities are under way for visitors to the company’s boothat the TOKYO PACK 2021 international packaging show. The goal is to increase sales starting in
June and studies are progressing for the addition of another group of products.

23

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (1)Development of Environmentally Responsible Products

Creating New Sources ofDemand for Paper Products

 The research activities of the processed products business of Try- Fu Co., Ltd. arecontributing to progress with environmental products, which is a research theme of theFifth Medium-term Management Plan.
NatuLami – A processed paper with a low environmental
impact by using plant-derived resins and biodegradable resins Add new value by combining NatuLami and Milax with the products of otherbusiness units.
Example: TT- BARRIER DERI using Milax

TT- BARRIER DERI is available in 10
variations

Food packaging products were exhibited at TOKYO PACK
2021 jointly with the package business

24

Growth Strategy (2)-New Businesses Other Than Paper
Products-

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (2)New Businesses Other Than
Paper Products

Environment Related Business
Fifth Medium-term Management Plan:

Channel substantial resources to this businessfor growth

Practical-Use of Natural Environment Div.
 In the first year of the Fifth Plan, thisdivision focused on starting to operate
the Ikawa Distillery. (Full- scale
operation started in November 2020.)
 Accomplishment 1: Average of 632 litersof unblended whisky per production run(goal was 500 liters)

Above left: Sherry and bourbon barrels filled with unblended whisky
Above right: Whisky ages for many years at an altitude of 1,200 meters Accomplishment 2: Received highest of four
rankings in the unblended whisky quality
examination by the National Tax Agency
 Continuing to focus on consistent production
activities in order to increase the variations ofunblended whisky
26

III. Business Foundation Reinforcement/Growth Strategy - Growth Strategy (2)Environment Related Business

New Businesses Other Than
Paper Products

Fifth Medium-term Management Plan:

Channel substantial resources to this business for growth

Resource Reuse Div.
 Increase the production of refuse paper/plastic fuel (RPF) at REX Co.,
Ltd. and increase the breadth of activities of the recycling business.
REX
Nagaizumi Mill

Raisedproduction to 1,100
２直体制で1,100t/月を達成。
tons/month with two shifts

Shimada Mill
Improved pulverizer is expected to raise
破砕機改造効果で今期中2,400t/月
monthly output from 2,400 tons to⇒2,500t/月の増産を見込む。
2,500 tons during FY3/22▼▼

SurugaService
SurugaServiceIndustry

Making a consistent contribution to
着実に当社グループへ利益貢献。
consolidated
earnings▼

When preparations are finished, plan to Plan to use an investment in the
準備ができ次第３直体制に移行、コンベア投資によりさらに
system to add another 50 tons
increase to three shifts to raise output さ conveyor
らに＋400t/月の増産を計画。
＋50t/月の増産を計画。
to monthly
outputby 400tons/monthPlan to increase earnings by reducing
最終処分に係る外注費削減
expensesfor outsourced services involving
施策により利益の向上狙う。
the final
disposal of waste materials▼▼

Use more efficient
production operations to raise internally produced RPF to 70%
生産効率化により三島・島田工場で使用する
of all RPFRPF内製化率を70％⇒中長期的には100％を目指す。
used at the Mishima Mill and Shimada Mill – The medium/long- term
goal is 100%

Goal is the horizontal expansion of waste
産業廃棄物処理業の横展開を目指す。
material processing operations

27

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.