Medium-term Management Plan 2026
(April 2023 through March 2026)

May 26, 2023

Hokuetsu Corporation©2023

Contents©2023

Review of Medium-term Management Plan 2023 Results

P. 2-4Long-term Corporate Vision: Vision 2030

P. 5

Medium-term Management Plan 2026 Period andConsolidated Management Indicators

P. 6Factors Affecting Consolidated Operating Profit in FY2025

P. 7

Medium-term Management Plan 2026 Basic Policy

P. 8-14

Medium-term Management Plan 2026 Investment Plan

P. 15Page. 1

Review of Medium-term Management Plan 2023 Results
Medium-term Management Plan Results

Net Sales(100 million yen)3,500

Medium-term Management Plan
C-nextOperating Profit

Medium-term Management Plan 2023

V-DRIVE(100 million yen)250

Net Sales

3,000

Operating Profit (Right Axis)

2,624

2,500

205
2,691

2,758

2,468

2,616

2,284

150

10161

Dubai Crude(USD/bbl)
Printing andCommunication Paper

17

Final Fiscal Year Goals

92112

500

FX (USD/JPY)

150

Final Fiscal Year Results

1,500

200

173

129
114

0

2,800

2,225

2,000

1,000

2,646

3,012

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021111

120109111

111109106113

136

10886474555

6960

457893501009694918784696966

ー100500

FY2022

Domestic Demand** Domestic demand volume of FY2014 serves as baseline of 100©2023

Page. 2

Review of Medium-term Management Plan 2023 Results
Medium-termManagement Plan 2023
Consolidated Management Indicators (FY2022)

FY2020Results

FY2021Results

FY2022
Results

Net Sales¥280 billion¥222.5 billion¥261.6 billion¥301.2 billion

Operating
Profit¥15 billion¥17 billion¥20.5 billion¥17.3 billion

OrdinaryProfit¥20 billion¥9.8 billion¥29.5 billion¥11.5 billion¥15 billion¥14.2 billion¥21.2 billion¥8.3 billion

ROE

7.0%

7.6%

10.3%

3.8%

EBITDA¥35 billion¥24.8 billion¥43.3 billion¥24.3 billion

Net Income
Attributable to owners ofparent company

Plan Assumptions

Results (Fiscal Year Average)

FX*¥108/$1USD¥106/$1USD¥113/$1USD¥136/$1USD

Dubai Crude$50/bbl$45/bbl$78/bbl$93/bbl*USD/JPY

All plan goals met amidst a challenging business environment©2023

Page. 3

Review of Medium-term Management Plan 2023 Results
Basic Policy

FY2022

Expand production-site
warehouses (Canada)
Develop electromagnetic noise suppression sheetAchieve Eco Rail Mark productHalt Niigata Mill No. 2 paper machine
certification
Transfer to the TSE Prime Market
Nominate female director
Revise paper product and liquid

Shift business portfolio
Expand business worldwide
Strengthen business in Japan
Strengthen governancemanagement
Promote SDGs-related
activities

container prices

FY2021

Increase ratio of outside directors

Certified Health & Productivity Management
Outstanding Organization (2020, 2022)
Win Cellulose Society Technology Award
Establish Group Business Investment
Distribute year-end special
Establish Paper Cup Business
Division
dividend

Participate in biomass
power generation business(Aizu Komorebi Power Plant)

Establish Diversity Committee

Achieve ISO45001 (occupationalsafety and health) certification
Formulate Group Basic Sustainability Policy

Install heat recovery system for recovery
boiler (Canada)

Increase ratio of outsidedirectors

Update core business system (Canada, China)

FY2020Participate in paper satellite project

Join “30by30 Alliance for Biodiversity”

Abolish of takeover defense measures

Sign TCFD Proposal

Development Office
Sell non-core businesses andassets

Open relaxation area at headquarter (July 2022)

Launch Southern Ace, fuel-efficient chip carrier
Establish a new Safety, Environment& Quality Management Division
Increase ratio of outside Audit& Supervisory Board Members
Develop containerboardbusiness

Achieve A- on CDP Climate Change (2022)

Establish “Hokuetsu Group Zero CO2 2050”

Establish a new Audit & Supervisory
Board Member Office

Assign Chief Risk Management Officer (CRO)©2023

Page. 4

Long-term Corporate Vision: Vision 2030
Basic Policy
In a business environment that is subject to major changes, the Group and all its
stakeholders will aim for continuous growth by promoting management with effective
governance and compliance, and developing and providing services and products that areboth high quality and cost-competitive through environmentally-friendly business activities.

１．Name of the Vision:
２．Period:

Vision 2030

April 1, 2020 through March 31, 2030 (10 years)

３．Target Image of the Group in 2030
■ A business group that contributes to sustainable social development based on environmentalmanagement■ A business group that makes use of diverse human resources and the latest technology tochallenge ourselves in new business fields in step with the times■ A business group made up of people working proactively with dreams, hopes and pride

Current Plan

Previous Plan
2023.4.1

2026.3.31

2030.3.31

The current medium-term management plan is a critical period to achieve the goals of Vision 2030
©2023Page. 5

Medium-term Management Plan 2026 Period andConsolidated Management Indicators

称
Name: Medium-term名Management
Plan 2026
2023年4月1日～2026年3月31日（3年間）

Period: April 1, 2023 through March 31, 2026 (3 years)
Consolidated management indicators (FY2025)
Net Sales¥330 billion
Operating Profit¥20 billion

Ordinary Profit¥24 billion
億円
２４０Net Income

Attributable to Owners of Parent Company¥20 billion

ROEEBITDA

8.0%¥39 billion

Calculation assumptions: FX: ¥135/$1USD Dubai Crude: USD90/bbl©2023

Page. 6

Factors Affecting Consolidated Operating Profit in FY2025
FY2022 Results ¥17.3 billion ⇒ FY2025 Plan ¥20 billion: Difference = +¥2.7 billion(Billion yen)
1. Volume, Price

Positive Factors (+¥14.2 billion)
2023年4月1日～2026年3月31日（3年間）

Negative Factors (-¥11.5 billion)(+１００)+10¥10 billion-¥10 billion

2. Raw material
Fuel Price

Decreased domestic paper sales volume
Recovery in paper pulp sales volume
Stability of domestic paper sales prices(-１００)-10Further increases
in fuel prices

3. Domestic Demand(+１５)+1.5¥3 billion-¥1.5 billion
Increased depreciation
expenses

Improved efficiency,cost reduction¥1.2 billion

4. Sales Management (+１２)+1.2
Expenses, etc.

▲120FY2022 (Actual)
FX: ¥136/$1USD
Dubai Crude: $93/bbl.

©2023

Improved logistics▲70▲203080

FY2022 (Estimate)
FX: ¥135/$1USD
Dubai Crude: $90/bbl.

Page. 7

Medium-term Management Plan 2026 Basic Policy
In an environment of continued uncertainty, we will strengthen the foundation of our business toincrease profitability, continuing the steady progress made throughout the Medium-termManagement Plan 2023.
Changing Business Environment
Politics

Enhanced environmental regulations,energy policy, TPP expansion, child-raising
support, etc.

EconomyInflation, rising interest rates,
foreign exchange changes,
rising fuel costs, etc.

Society

Changing demand structure for paper, lowchildbirth and aging society, increasing
population in developing countries,
human capital management, etc.

Technology

Environment technology, expanding pulp
use, AI, IoT integration, information
security, etc.

Environment

Climate change policy, increased
renewable energy use, increased timber
supply, etc.

Uncertainty
Factors

Russia and Ukraine Conflict©2023

Medium-termManagement Plan 2026
Basic Policy

Hokuetsu Group Strengths
World-leading Zero-CO2 energy ratio
Close location to major metropolitan consumption center andfavorable location for exports to Asia (Niigata Mill)

Shift Business
Portfolio

Global business expansion(Overseas sales ratio approx. 40%)
Global annual pulp production capacityof 1.5 million tons

Strengthen
CompetitivenessHigh value added performance products such as battery
separators and entry into containerboard business
Integrated capacity to supply from raw materials topackaging (ex-Plastic)
Abundant global timberland resources of 6.41 million
hectares (Company-owned forests, profit-sharing forests,management contract forests)

PromoteSustainability (ESG)
Activities

The only Japanese producer of high-growth,
ex-plastic materials such as vulcanized fiber and
PASCO (rigid fiberboard)

Robust finances (Net D/E ratio: 0.38)

Page. 8

Medium-term Management Plan 2026 Basic Policy
Strengthen CompetitivenessWe will further strengthen our competitiveness of “costs,” “the environment” and “safety,” and pursue asafe and stable production system that ensures profitability even within the contraction occurring in thedomestic printing and communication paper market.
Above all else, by further improving our industry-leading environmental competitiveness, we will solidify
our position as the papermaking company group chosen by customers.
Shift Business Portfolio

We will pioneer new corebusinesses to further accelerate
our business portfolio shift, withthe aim of the continuous growthof the Group.
We will strive to expand ourgrowth operations by exploringnew businesses in Japan andoverseas, promoting M&A, anddeveloping new products thatmeet our customers’ needs.

Strengthen Competitiveness
CostEnvironment

Hokuetsu Group
Corporate Philosophy

SafetyShift Business Portfolio
ＥＳＧ

Promote Sustainability (ESG) Activities

Promote Sustainability (ESG) Activities

Long-termManagement Vision

Vision 2030

We will promote responses to climate change, and the development of eco-friendly products.
As a people-oriented company, we will promote diversity and work-style reforms, and build a resilientorganization by promoting human capital management and business activities that respect human rights.
We will strive to enhance our corporate governance, including by strengthening our risk management system.

The second phase of our Long-term Management Vision - Vision 2030
©2023

Page. 9Medium-term Management Plan 2026 Basic Policy

Shift Business Portfolio
We will pioneer new core businesses to further accelerate our business portfolio shift,with the aim of the continuous growth of the Group.
Continue shifting business portfolio to meet changing demand
FY2025

Consolidated Sales Trend
Domestic Printing,Communication Paper

FY2022FY201058%OtherSales¥217 billion

Sales¥301.2 billion

海外売上高比率：8％
Overseas
sales ratio: 8%

海外売上高比率：40％
Overseas sales ratio:40%

Focus on high value added products••

Develop new products and enter new fields
Environmentally-friendly packaging material(high-performance packaging, flexible packaging, etc.)
Electromagnetic noise suppression sheet, etc.

Sales
¥330 billion

Overseas
sales ratio: 43%
海外売上高比率：43％

M&A, New Businesses•

Invest in pulp-related business, which has resilient global demand•

Research and development in specialty paper for manufacturing, etc.

•Paper processing to support the ex-plastic movement, etc.

Develop demand for existing products
PASCO hooks and hangers, food containers, trays
Vulcanized fiber apparel accessories, etc.

Electromagnetic noise
suppression sheet

©2023

28%

33%

Paper-based flexible
packaging

PASCO hooks and hangers

Page.10

Medium-term Management Plan 2026 Basic Policy

Strengthen Competitiveness and Promote Sustainability (ESG) Activities
Strengthen
Competitiveness1) Cost1) CostAgile and Optimized Manufacturing StructureManaged by the newly established Profit ManagementOffice2) Environment (E)3) Safety (S)Diversify Resources and Suppliers
Promote the use of low quality recycled paper, etc.
Achieve favorable purchases and mitigate risk
Optimize Logistics
Promote fair and equitable logistics
Establish distribution warehouses
Invest ¥4 Billion in IT and Systems
Invest in material purchasing system, production
monitoring system, etc.

Governance (G)Promote Sustainability(ESG) Activities©2023

Page.11

Medium-term Management Plan 2026 Basic Policy

Strengthen Competitiveness and Promote Sustainability (ESG) Activities
2) Environment (E)Example Products

Reduce CO2 emissions, increase zero CO2 energy ratio
Identify replacements for heavy oil
Expand solar power generation at the Niigata Mill
Prepare for effective net-zero emissions at the Kanto Mill (Katsuta)
Develop next-generation technology and equipment to reduce CO2emissions, etc.
Hokuetsu Corporation CO2 emissions

1,000Hooks made from vulcanized fiber, plastic
alternatives

Paper cups made fromenvironmentally-friendly PANSE,
paper packaging materials

A suitcase made with vulcanized fiber

2030 Goal:
450,000 tons

500
0Printable white paperboard products
made from recycled paper pulp2005

2013

2021

2030

2050

¥9 billion planned in environmental investments
Invest to reuse waste products
Invest in adopting energy-saving equipment, etc.
Answer the CDP corporate sustainability survey
Achieved an A- in climate change in 2022
Review branding of environmentally friendly products
Acquire sustainable third-party certification and promote thedevelopment of environmentally friendly products
April 2023 - Participate in the GX League
Declared support for the GX League in December 2022
Further improve environmental friendliness through participation©2023

Jiangmen Xinghui Paper Manufacturing Linear
Vacuum Pump (Achieves 37% energy savings
compared to existing equipment)

Niigata Mill solar panels(Planned expansion)

Page.12

Medium-term Management Plan 2026 Basic Policy

Strengthen Competitiveness and Promote Sustainability (ESG) Activities
2) Environment (E)Achieve Net-Zero CO2 Emissions

Zero CO2 2050 Roadmap
Pre-2050

2050

Fuel Transition

Renewable Energy
Introduce new carbon neutral fuels
Invest in renewableenergy power generation

CO2 Fixation
Review CCUS

Utilize renewable energy

Increase CO2 fixation
through the use ofwoodlands

Pre-2030

2030
Fuel Transition
Transition to low-CO2 emitting fuels

Increase use of biomass
power generation

Transition from heavy oil to natural gasfor pulp manufacturing (boilers, kilns)
Stop coal use©2023

Page.13

Medium-term Management Plan 2026 Basic Policy

Strengthen Competitiveness and Promote Sustainability (ESG) Activities
3) Safety (S)Continue safety and health activity “hSA25 (hokuetsu
Safety Action 25)”
Strengthen health and safety management system
Introduce outside consultants

Governance (G)Further enhance corporate governance

Organizational change implemented in April 2023
Adopted a new, function-based organization to better support
major business changes and diversification.

⇒Pursue customer-oriented management to improve
efficiency and achieve enhanced results

Before ReorganizationhSA25 Roadmap

Plan ¥6 billion investment in human resources (with¥1.5 billion for safety measures)

After Reorganization

Invest to improve welfare facilities, workplace environment, etc.

Achieve human capital management

Formulated the Hokuetsu Group Human Rights Policy in April
2023
Promote diversity, expand education and training
Foster a welcoming work environment, expand support systems,
etc.

Ensure product quality and safety

Conduct regular internal product quality audits©2023

Promote our corporation philosophy and strictlyadhere to all laws
Conduct BCP-oriented risk management

Page.14

Medium-term Management Plan 2026 Investment Plan

Total Investment: ¥110 billion
Investment Allocation
Growth & Improvement
Investment¥30 billion

StrategicInvestment

Maintenance & Renewal
Investment¥40 billion

億円¥40 billion(M&A, New Investment)

Growth & improvement and maintenance & renewal investment includes©2023

Environment-related
investment

Human capital
investment

IT & system
investment¥9 billion¥6 billion¥4 billion
Page.15

“People-focused business group” is the expression of our vision for the future,what we want to be come, our goal.

Hokuetsu Group
Corporate Philosophy
As a people focused business group,
we work to improve society globally,by providing socially and environmentally
responsible products through innovative
manufacturing on a global scale.

A business group that values its connection to its stakeholders and the relationshipof trust with them.
A business group that pursues the happiness of its employees.
A business group that respects diversity and empowers its people.

“Socially and environmentally responsible” means to create a sustainable
society in harmonious coexistence with nature, guided by the concept of“minimum impact” to keep all impact on the natural environment to the minimum ateach stage from the procurement of raw materials to the manufacture of end products.

“Products through innovative manufacturing on a global scale” means to
Established April 2018

pursue innovation, to aim at delivering the greatest satisfaction to our customers byenhancing our technological capabilities.
“Socially and environmentally responsible,” “products through innovative
manufacturing on a global scale”: these are the values, the philosophy, that we uphold.
It is the mission of our corporate group, the foundation of our existence,
to “work to improve society globally” through these values.

The goals and statements in this document are based on multiple assumptions at the time of planning and theirfeasibility is not guaranteed. Please use these materials as points of consideration to inform decision making. No liability
is assumed in the event of loses that may occur from investment decisions. The company has no responsibility to revise
these projections based on new information.

©2023

Inquiries regarding these materials
Hokuetsu Corporation,
Corporate Planning Department
03-3245-4579