Financial Results
for the Fiscal Year Ended March 2024
KPP GROUP HOLDINGS CO., LTD.
Tokyo Stock Exchange Prime Market
May 31, 2024

Securities Code ： 9274

１

Summary of Financial Results
for the Fiscal Year Ended March 2024

２

Forecast for the Fiscal YearEnding March 2025 and Other Information

３

Progress in the Third Medium-Term Business Plan

４

Reference Materials

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED

1

１

Summary of Financial Results
for the Fiscal Year Ended March 2024

２

Forecast for the Fiscal YearEnding March 2025 and Other Information

３

Progress in the Third Medium-Term Business Plan

４

Reference Materials

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED

2

Summary of Financial Results for the
Fiscal Year Ended March 2024

Consolidated Financial Summary

Although the footfall has recovered globally, consumption of paper has stagnated due to rising inflation and the recession in China. The Group’s packaging business andvisual communication business expanded through M&A, while in the paper business in Europe, the inflation-driven product price hikes in the previous year reversed andprices fell, resulting in lower revenue and profit.
In the domestic business, sales increased due to the price revision of paper and paperboard. However, demand for graphic paper fell because of structural factors (such as amove to ICT and progress on digitalization) and sales of packaging paper continued to decline reflecting a pullback in consumer spending under inflation. Also, the amount ofrecovered paper generated declined while the cost of imported pulp increased. As a result, profits remained weak.

In the overseas business, performance in the paper sector grew in Australia backed by an increase in market share. In Europe, the paper market weakened sharply despite theexpansion of business through M&A. In China, demand for paper and paperboard stagnated due to the recession, resulting in a decrease in sales and profits.

(JPY million)FYE March 2023
Full-year results

FYE March 2024
earnings forecast

FYE March 2024
Full-year results

year on year

Compared to forecast

Net sales

659,656

650,000

644,435△15,220△2.3%△5,564△0.9％

Gross profit

120,584

112,000

119,899

△685

△0.6%

＋7,899

＋7.1％

SG&A

100,182

95,000104,079＋3,896+3.9%＋9,079＋9.6％

Operating profit

20,401

17,00015,819△4,581△22.5%△1,180△6.9％

Ordinary profit

18,404

13,50012,475△5,929△32.2%△1,024△7.6％

Profit attributable to ownersof parent

15,722

10,50010,613△5,108△32.5%

＋113

＋1.1％

28,856－

24,573△4,282△14.8％－－EBITDA*EBITDA…ordinary profit + depreciation + amortization of goodwill + interest expense, etc.

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3

Summary of Financial Results for the
Fiscal Year Ended March 2024

Results by Segment

Northeast Asia

Sales volumes of graphic paper were lower than the previous year, but sales and profits increased due to the impact of the price revision. In the paperboard business, sales of containerboard fell below
the level of the previous year, but high-grade paperboard remained strong, resulting in higher sales. In terms of paper raw materials, sales and profits declined due to a decrease in the amount ofrecovered paper generated and a slump in market prices. In China, business remained weak against the backdrop of the recession and falling market conditions.

Europe/Americas

Prices in the paper business declined as market conditions weakened reflecting inflows of cheaper goods from Asia and other factors. In addition, inventory reductions were observed in the supply chain
until the second half of the year, resulting in lower sales and profits.In the packaging business, sales declined due to sluggish consumption, but profits improved. The visual communication business saw
an increase in both sales and profits, helped by the acquisition of Integart in Eastern Europe and other factors.

Asia-Pacific

In Oceania, performance grew in the commercial print business as the market share of office paper has increased mainly in Australia. In the packaging business, sales decreased but profits increased. The
visual communication business remained slow. In Southeast Asia and South Asia, the indent business in the Indian paper market performed well, but the stock business (inventory sales business)remained weak affected by the stagnation of the economy in ASEAN.

Real estate leasing

Although vacancies occurred at the KPP Yaesu Building, the KPP Akashi-cho Building, which was completed in February 2023, contributed to an increase in both sales and profits throughout the year.

FYE March 2023
Full-year results(JPY million)

Northeast Asia

Europe/Americas

Asia-PacificReal estate leasing

Net sales

year on year

305,461

304,594

△867

△0.3％

3,432

3,421

△10

△0.3％

303,709285,726△17,983△5.9％

Segment profit

16,453

10,474△5,979△36.3％Net sales

49,26952,593＋3,324＋6.7％

Segment profit

2,186

2,151

△35

△1.6％

Net sales

1,216

1,521

＋305

＋25.1％

115

579

＋463

＋401.3％659,656

644,435△15,220△2.3％

20,401

15,819△4,581△22.5％

Segment profit
Net sales

Segment profit
Net sales

Total

FYE March 2024
Full-year results

Operating profit(after adjustment forcorporate expenses, etc.)※ Corporate expenses, etc.: general administrative expenses in the administrative divisions of the head office that do not belong to the above segments.

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4

Summary of Financial Results for the
Fiscal Year Ended March 2024
(JPY million)

Current assets
Cash and cash equivalents

Change in Balance Sheet (Compared with March 31, 2024)

March 31, 2023

Variance inamountMarch 31, 2024

243,596242,689△907

30,731

26,286△4,445

132,873

141,441＋8,567(JPY million)

Current liabilities

March 31, 2024

Variance inamount207,947

198,235△9,711

97,418100,652＋3,234

Short-term borrowings

62,88450,862△12,022

Accounts payable(Notes and accounts payable - trade,electronically recorded obligations operating)Accounts receivable(Notes and accounts receivable,
electronically recorded monetaryclaims)March 31, 2023

(including commercial paper)

Merchandise andmanufactured goods

72,237

66,126△6,110

Fixed liabilities

54,90564,426＋9,520

Tangible fixed assets

37,063

41,692＋4,628Long-term debt

31,42535,167＋3,741

Right-of-use assets, net

15,706

19,878＋4,172

Total liabilities

262,853

262,662△191

Intangible fixed assets

13,896

18,670＋4,773

Shareholders’ equity

63,857

70,848＋6,990Goodwill

5,330

6,958

＋1,628

Accumulated othercomprehensive income

3,872

10,963＋7,090Investments and otherassets36,10441,510＋5,405

Total net assets

67,80881,900＋14,091

330,662

344,562＋13,900

Total liabilities and net assets

330,662

344,562＋13,900

Total assets(Including bonds)┃ Main factors of change・ 【Merchandise and manufactured goods】 Decreased due to inventory reduction in Europe and Oceania

・ 【Interest-bearing debt (short-term borrowings and long-term borrowings)】
Decreased due to drop in working capital and acquisition of profits

・ 【Right-of-use assets, net】
Increased due to new lease agreements and M&A in association with warehouse restructuring

・ 【Shareholders’ equity】 Increase in profit (+JPY 10,613 million), decrease due to payment ofdividends and repurchase of shares (- JPY 3,683 million)

・ 【Investments and other assets】 Increased due to higher prices of listed stocks

・ 【Accumulated other comprehensive income 】
Increased due to foreign currency translation adjustments of net assets of overseas consolidated
subsidiaries and valuation difference on listed shares┃ Financial strength and profitability indicators (vs. March 31, 2023)
・ Net D/E ratio improved from 0.9times to 0.7times (*D/E ratio: 1.4 times to 1.1 times)

・ Equity ratio increased from 20.5% to 23.7%

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5

Summary of Financial Results for the
Fiscal Year Ended March 2024

Change in Cash Flows (Year-on-Year)FYE March 2023

FYE March 2024

Main breakdowns(JPY million)

Cash flows from operating activities

Cash flows from investing activities

10,308△8,53019,817・ Income before income taxes +13,697 ・ Decrease in inventories +13,321
・ Depreciation +9,057 ・ Income taxes paid △5,586
・ Increase in allowance for doubtful accounts △4,747
・ Interest expenses △2,082 ・ Other △4,859△5,508・ Purchase of property, plant and equipment and intangible assets △4,147
・ Payments for acquisition of businesses △1,100
・ Proceeds from sale of property, plant and equipment and intangible assets +1,926
・ Proceeds from sale of investment securities +1,396
・ Other △3,663
・ Net decrease in Long-term and short-term borrowings △23,176
・ Repayments of finance lease obligations △5,515
・ Purchase of treasury shares △2,072 ・ Dividends paid △1,611
・ Issuing of bonds +10,000

Cash flows from financing activities

4,205

Translation difference for cash and cash
equivalents

2,085

Increase (decrease) in cash and cash
equivalents

8,068△4,454－

Cash and cash equivalents at the
beginning of the period

22,631

30,699－Cash and cash equivalents at theend of the period

30,69926,244－△22,375

3,610 ・ Foreign currency translation adjustments of cash, etc.

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１

Summary of Financial Results
for the Fiscal Year Ended March 2024

２

Forecast for the Fiscal YearEnding March 2025 and Other Information

３

Progress in the Third Medium-Term Business Plan

４

Reference Materials

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED

7

Forecast for the Fiscal Year Ending
March 2025

Consolidated Earnings Forecast

In the paper business, demand for graphic paper is expected to decrease in each segment, but a certain level of profit will be secured by maintaining the selling price.
In the packaging business and the visual communication business in Europe, the Americas and Oceania, the performance of operating companies acquired throughM&A will contribute.It is also expected to cover the downturn in the paper business by capturing new demand.
Assumed exchange rates for earnings forecasts: JPY 150/EUR, JPY 90/AUD, JPY 135/USD, JPY 19/RMB【 Consolidated Earnings 】【 Segment 】(JPY million)FYE March 2024
Full-year results

FYE March 2025
earnings forecast

Net sales

644,435

655,000＋10,564＋1.6%

Gross profit

119,899

123,500＋3,600＋3.0%

FYE March 2024
Full-year results

FYE March 2025
earnings forecast

304,594

304,500

△94

△0.0％

3,421

3,900

＋478

＋14.0％

285,726

297,000＋11,273＋3.9％

Segment profit

10,474

10,800

＋325

＋3.1％

Net sales

52,59352,000

△593

△1.1％

Segment profit

2,151

2,100

△51

△2.4％

Net sales

1,521

1,500

△21

△1.4％

579

600

＋20

＋3.5％

644,435

655,000＋10,564＋1.6％

15,81916,500

＋680

＋4.3％

year on year
(JPY million)

Net sales

Northeast Asia
Segment profit

SG&A
Operating profit
Ordinary profit
Profit attributableto owners of parent

Net sales

Europe/Americas

104,079

107,000＋2,920＋2.8%

15,81916,500

＋680

＋4.3%

12,475

13,500＋1,024Asia-Pacific＋8.2%
Real estate leasing

10,613

11,000＋386

Segment profit＋3.6%

Net sales

EBITDA

year on year

24,57327,000＋2,426＋9.9％*EBITDA…ordinary profit + depreciation + amortization of goodwill + interest expense, etc.

Total

Operating profit(after adjustment forcorporate expenses, etc.)※ Corporate expenses, etc.: general administrative expenses in the administrative divisions of the head office that do notbelong to the above segments.

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Forecast for the Fiscal Year Ending
March 2025

Consolidated Earnings Forecast (by Segment)

FYE March 2019 （Before acquisition of Spicers and Antalis）
Real Estate
Lease
0.3%

Chemical products
5.2%

Net sales

Forecast for the FYE March 2025

Secondaryprocessed
paper
Pulp/waste
8.2%
paper
12.3%

3.0%

2.9%

0.2%

7.4%
7.4%
Paper
54.2%

Paperboard
19.8%

51.2%

17.0%

10.9%

Chemical products
5.5%

Real Estate Lease
2.8%

Secondaryprocessed paper
8.6%

Gross profit

0.9% 0.3%
4.0% 1.0%

11.7%
Paper
47.4%

Pulp/waste
paper
23.8%
Paper
board
11.9%

Paper
Paperboard
Packaging
Visual communication
Pulp/waste paper
Secondary processed paper
Chemical products
Real Estate Lease

51.9%
27.3%

Paper
Paperboard
Packaging
Visual communication
Pulp/waste paper
Secondary processed paper
Chemical products
Real Estate Lease

2.9%

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9

Measures to realize management with capital costs and stock prices in mind
We will continue to achieve a high return on capital (ROE, ROIC) that exceeds the cost of capital (Cost of shareholders’ equity: 5.0% to 8.0%, Cost ofcapital (WACC): 2.5% to 3.5%) to create sustainable shareholder value. Enhance shareholder returns with progressive dividends and other measures,
aiming to exceed 1× PBR.
*See the next page for “Policy on Shareholder Returns.”

ROE

Cost of shareholders’ equity

ROIC

30%

Cost of capital (WACC)

10%

25.4%

8.6%

9%

25%
8%
7%

20%

15.0%
+17.6%

15%

+8.3%

6%

14.2%

12.8% (Forecast for this term)
+8.2%

10%

5%

6.7%

7.8%

6.0%

5%

+5.4%

4.4%
+2.8%

4%

+1.8%

3%

2.6%

Cost of shareholders’ equity

6.0%

５.0％～8.0％

5.8% (Forecast for this term)

Cost of capital (WACC)

3.2%

3.2%

FYE March 2023

FYE March 2024

2.5％～3.5％

2%
1%
0%

0%
FYE March 2022

FYE March 2023

FYE March 2024

FYE March 2025

The Third Medium-Term Business Plan Period

FYE March 2022

FYE March 2025

The Third Medium-Term Business Plan Period

Cost of shareholders’ equity ... Calculated using capital asset pricing model (CAPM)* ROIC has been introduced as an indicator of performance-linked share-based compensation for directors,

etc. with the aim of increasing their willingness to contribute to the KPP Group’s medium- to long-term
performance and enhancement of corporate value.

Policies and measures to improve ROE and ROIC and to reduce capital costs
Expanding high-margin businesses、investing in businesses that exceed the cost of capital、restructuring our business portfolio、Reduction of cross-shareholdings, promotionof sustainability and ESG management, enhancement of information disclosure, etc.

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 10

Policy on Shareholder Returns
Basic policy on dividends
Recognizing the return of profits to shareholders as one of the most important management issues, we will pay dividends on a stable and continuous basis and improve
corporate competitiveness and shareholder value by enhancing and effectively utilizing retained earnings.
‐ The Group will pay progressive dividends (maintain or increase the dividend amount) to enhance shareholder returns and improve capital efficiency while securing financial resources topromote “In-Organic Growth through Strategic M&A” and “Improvement of Financial Position(improvement of D/E ratio and equity ratio)” set forth in the Third Medium-Term Business Plan.
Expected annual
dividend: JPY 28

Change in cash dividends per share(Dividend to commemorate
100th anniversary: JPY 5)

FYE March 2022

As acquisitions of Spicers and Antalis contributed significantly to the Group’s earnings andsolidified the earnings base for the full year, we paid an interim dividend for the first time.

(Dividend to commemorate
the conversion to a holding
company: JPY 2)

FYE March 2023

8
FYE March
201810

FYE March
2020

14

10

FYE March 2025

FYE March
2021

Repurchase of shares

Repurchase of shares

22

20
10

FYE March
2019

In addition to the commemorative dividend of JPY 2 for the transition to a holding company
structure, we announced a dividend increase of JPY 4 reflecting our strong performance. The
annual dividend forecast was raised to JPY 20 from the initial forecast of JPY 15.

28(Dividend to commemorate
the listing: JPY 2)

FYE March
2022

1

FYE March
2023

FYE March
2024

FYE March2025

Repurchase of shares

2

Repurchase of shares1

In addition to the commemorative dividend of JPY 5 for our 100th year anniversary, we plan
to make a dividend increase of JPY 1. The annual dividend forecast was raised to JPY 28
from the previous fiscal year’s JPY 22.

2•

Class of repurchased shares: Shares of common stock of KPP•

Class of repurchased shares: Shares of common stock of KPP•

Total number of repurchased shares: 1.4 million•

Total number of repurchased shares: 3 million•

Total purchase price: JPY 389 million•

Total purchase price: JPY 2,072 million•

Period of repurchase: February 17, 2020, to June 30, 2020•

Period of repurchase: November 15, 2023, to March 22, 2024

(Ratio to the total number of issued shares (excluding treasury shares): 2.0%)(Ratio to the total number of issued shares (excluding treasury shares): 4.2%)*The total return ratio for the fiscal year ended March 2024, including the repurchase of shares and dividends, was about 35%.

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 11

１

Summary of Financial Results
for the Fiscal Year Ended March 2024

２

Forecast for the Fiscal YearEnding March 2025 and Other Information

３

Progress in the Third Medium-Term Business Plan

４

Reference Materials

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 12

Long-Term Vision
The fiscal year ending March 2025 is the final year of the long-term management vision “GIFT +1 2024.” New long-term management vision “GIFT2030” is being formulated.

Focusing on Overseas Markets

Expansion of raw material
business

Investment in growth engines
and overseas expansion

Reorganization of business portfolio

Strengthening profitability

AntalisSpicers
became a
Newly listed on became athe Tokyo Stock consolidated consolidated
subsidiary
Exchange
subsidiary(June 2018)(July 2019)(July 2020)

Global Management
Establishing a Comprehensive
Recycling-Oriented Company

Becoming a Global Number One Company

Toward the next stage with
GX, DX, SX and Startup as our coreCompletion toward “GIFT
2030”

Transition to a holding
company structure
Company name changed to
KPP GROUP HOLDINGS(October 2022)

Long-Term Vision “GIFT + 1 2024”

FYE March
2017

FYE March
2018

FYE March
2019

The First MediumTerm PlanFYE March
2020

FYE March
2021

FYE March
2022

The Second MediumTerm PlanFYE March
2023

GIFT 2030

FYE March
2024

FYE March
2025

The Third MediumTerm PlanFYE March
2026

FYE March
2027

FYE March
2028

The Fourth MediumTerm PlanFYE March
2029

FYE March
2030

FYE March
2031

The Fifth MediumTerm PlanCOPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 13

Antalis & Spicers, M&A Results during the Third Medium-Term Business Plan
Our M&A strategy in the Third Medium-Term Business Plan is steadily being advanced.
We are advancing in the Americas and expanding the packaging and visual communications businesses.
M&A Results during the Third Medium-Term Business Plan： 13companies in total （packaging business: 9、visual communication business: 3、paper business: 1）

Company A
Business: Visualcommunication
Location: Switzerland

Company B
Business: Visualcommunication
Location: Poland,
Czech RepublicCompany C
Business: Packaging
Location: Latvia

Company M
Business: Packaging

Company D

Location: Canada,
MexicoBusiness: Packaging
Location: Germany

Company E
Business: Packaging
Location: Spain

Company I
Business: Visualcommunication
Location: Singapore

Company F

Company G

Company H

Business: Packaging

Business: Packaging

Business: Packaging

Location: Spain

Location: Portugal

Location: Italia

Company J

Company K

Company L

Business: Packaging

Business: Sales of
paper-related products
Location: Australia

Business: Packaging(food packaging)
Location: Australia(industrial packaging)
Location: Australia

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Ordinary Profit and EBITDA
Steady growth in EBITDA (ordinary profit + depreciation + amortization of goodwill + interest expense, etc.), excluding amortization of goodwill andcustomer-related assets, increased by M&A. The spread between ordinary profit and EBITDA continues to widen, improving cash earning capacity.

Ordinary profit

Spread between EBITDA and ordinary profit

EBITDA(JPY million)(JPY million)

28,85630,00027,000（Forecast forthis term)

24,57325,00016,00013,500（Forecast forthis term)

14,00012,09812,00020,00018,115

18,404
13,50015,00010,00010,00012,475（Forecast forthis term)

10,451
9,271

8,000

6,000

8,844

4,000
5,000
0

2,000
FYE March
2022

FYE March
2023

FYE March
2024

FYE March
2025

The Third Medium-Term Plan

0FYE March
2022

FYE March
2023

FYE March
2024

FYE March
2025

The Third Medium-Term PlanCOPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 15Acquisition of Canada/M Company and expansion into North America
In August 2023, Antalis acquired all the shares of the company that processes and sells packaging products, and made it a subsidiary.
This is Antalis’ first foray into North America.

Overview of Canada/M Company

Purpose and Future• Based in Canada (Montreal, Quebec) and Mexico, Lovepac Inc.
manufactures, processes and sells custom-made packaging products.

• Antalis is developing a packaging business in Europe. Lovepac’s
technology and know-how can be shared also in Europe.

• Excelling in design and manufacture of industrial packaging products inparticular, it has developed unique specialized technologies in the fields ofaircraft parts, pharmaceuticals, medical products, foods, and high-tech
products for more than 20 years.

• Antalis will continue to leverage Lovepac’s management
resources when it launches in North America in the future.

• It operates the packaging converter (processing) function completely inhouse and carries out packaging product design, prototyping, andmanufacture and sale of products according to customers’ needs.

Full launchin North America

Products (example)

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Spicers E-commerce Drive with the Acquisition of Australia/Company L
In April 2024, an operating company under Spicers acquired all shares of the company, which is engaged mainly in the wholesale of products related
to industrial packaging, and made it a subsidiary. Enhancing the e-commerce capabilities of the Spicers Group.

Overview of Australia/Company L

Purpose and Future Plans

Spicers Business Portfolio Ratio （Net sales）• Engaged in the wholesale of products related toindustrial packaging, manufacture and sale of stretch
films, and others. Strong in e-commerce capabilities.

• The Spicers Group will take advantage of thecompany’s strong e-commerce capabilities andfurther strengthen the Group’s overall e-commercecapabilities.

Prior to the acquisition of Australia/L Company
Before acquisition * FYE March 2024

• It has warehouses and distribution centers acrossAustralia and a distribution network that delivers morethan 5,500 products throughout Australia.
• Operating as a supplier to a large number ofcustomers in a wide range of industries.

• It will work on streamlining logistics such as
warehouses and distribution centers and creatingsynergies including expanding the customer base.

Packaging

7.2%

Visualcommunication
18.6%

Paper
74.2%

The company's EC site

Townsville

After acquiring Australia/L Company * Forecast for this term
Brisbane

PerthSydneyMelbourne

Packaging

22.5%

Visualcommunication
16.4%

Paper
61.1%

head office
Warehouse and distribution center

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Landscape of Antalis’ E-business
Antalis’ e-business strategy and initiatives✓

Accelerating consistent e-business through online visibility, sales and delivery.

✓

Establish a high-value-added business and lead to profitable sales.

✓

Take a data-driven approach to turning prospects into new customers. Reinvigorate transactions withcustomers who are no longer active.
https://www.antalis.co.uk/home.html

E-order ratio

46.9%
50%

42.2%

44.0%

E-sales ratio

27.5%（+2.9Pt YoY）

46.9%

40%

E-customer ratio

31.7%（+4.3Pt YoY）

50%

50%

40%

40%

27.5%

30%

30%

20%

20%

20%

10%

10%

10%

0%

22.4%

23.2%

0%
FYE March 2022

FYE March 2023

FYE March 2024

*E-order ratio ... (Number of orders received via Web
business/EDI in the stock business (inventory sales
business)) / (Total orders received in the stock business)30%（+3.1Pt YoY）

31.7%
25.8%

28.6%

0%
FYE March 2022

FYE March 2023

FYE March 2024

E-sales ratio ... (Sales of Web business/EDI in the stockbusiness (inventory sales business)) / (Total sales in thestock business)FYE March 2022

FYE March 2023

FYE March 2024

*E-customer ratio ... Number of E-business customers / total customers

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Changes in Business Portfolios of KPP, Antalis and Spicers (Net Sales)
Growth in high-margin packaging and visual communication businesses.

Northeast Asia

Europe/Americas

Asia-PacificFYE March 2013

FYE March 2011

FYE March 2017

*At the start of business portfolio reform*At the start of business portfolio reform*At the completion of reorganization

Paper
紙

FYE March 2024

Paper

Paper

FYE March 2024

Paper

Paper

FYE March 2024

Paper

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 19

Second and Third Medium-Term Business Plans: Comparison of Cumulative Results
The cumulative results of the Third Medium-Term Plan are expected to significantly exceed the Second Medium-Term Plan especially in terms of profit.

Second and Third Medium-Term Business Plans
Comparison of results for cumulative periods

Second and Third Medium-Term Business Plans
Comparison of results for cumulative periods

Net sales (JPY million)

Net income (JPY million)+42.5%

1,375,216

1,959,092+268.0%11,000655,000（Forecast for this term)（FYE March 2025）（Forecast for this term)

10,613

563,414（FYE March 2022）

37,335644,435（FYE March 2024）

10,146

430,404（FYE March 2021）

659,656
381,397（FYE March 2023）（FYE March 2020）

The second Medium-Term Plan

The Third Medium-Term Plan

7,497

15,722

1,416
1,232

The second Medium-Term Plan

The Third Medium-Term Plan

• In the Second Medium-Term Business Plan period, we
worked to acquire overseas companies in line with ourinorganic strategy and implemented business portfolio
reforms. As a result, the packaging and visual communication
businesses were added to the portfolio, and the profit ratio
was improved.
• In FYE March 2023, there was a paper shortage due to supply
chain fragmentation, which boosted each stage of profit in
the income statement (i.e., gross profit, operating profit,
ordinary profit, profit before tax and net profit).

• The results for the FYE March 2024 are, and forecasts for FYEMarch 2025 are expected to be, lower than the results for theFYE March 2023, when one-time profits were generated, buthigher than the initial targets of the Third Medium-TermBusiness Plan. Also, the cumulative results of the Third
Medium-Term Plan are expected to significantly exceed theSecond Medium-Term Plan in terms of profit.
• We will continue to expand our operating area and increase
the consolidated gross margin ratio through M&As in highmargin businesses (such as packaging and visualcommunication businesses) while expanding to North
America and India.

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 20

Equity Ratio and Net D/E Ratio
Although total assets increased through M&As, financial stability was ensured, backed by an increase in net assets in association with profits and areduction in interest-bearing liabilities.
Trend of Equity Ratio
Total assets

Total net assets(Left axis)

Net D/E ratio of Equity Ratio
Equity Ratio(Left axis)

Net interest-bearing debt

(Right axis)(JPY million)(Left axis)

Net D/E ratio(Right axis)(JPY million)

400,000

25.2%

350,000

300,000

Total net assets(Left axis)

23.7%
19.4%

30.0%

90,00080,000（Forecast for this term)

1.2

1.00
0.90

25.0%
70,000

20.5%
20.0%

250,000

1.0

81,90060,00067,808

0.70

0.70

0.8

（Forecast for this term)

50,000200,000

150,000

15.0%

290,707

40,000344,562

330,66210.0%

100,000

56,37467,80881,90030,0000.6

56,37458,002

65,22061,3720.4

20,0005.0%

50,0000.2
10,0000

0.0%
FYE March 2022

FYE March 2023

FYE March 2024

FYE March 2025

The Third Medium-Term Plan00.0
FYE March 2022

FYE March 2023

FYE March 2024

FYE March 2025

The Third Medium-Term Plan

• Equity ratio increased to 23.7% from 19.4% due to an increase in
net assets• Net D/E ratio improved to 0.7 times from 1.0 time due to profit
acquisition and a decrease in working capital

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 21

Our Business Portfolio vs. Similar Companies (The Two Largest in the World)Like the two largest companies in the world, we will transform our business portfolio as the market changes.

KPPGHDPaper

U.S. Company A

Packaging

Paperboard
Pulp

Packaging

Visual communication

Pulp/Recovered paper

Chemical products

Secondary processed paper

U.S. Company B

Paper

Packaging

TissueFacility
Solutions

Wood
Products

MetalsBusiness
PapersSpecialty
PapersPrint
Solutions（Paper）

Real Estate Lease

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 22

Initiatives in Domestic Environment-related Businesses (Artificial Turf Made of OJO+ paper)
In the field of artificial turf, the environmental impact of microplastics has become a serious problem. The KPP Group aims to solve this problem byproposing artificial turf using OJO+ paper yarn in Japan.
Features of Artificial Turf Made of OJO+ paper• The use of paper, which is a natural material and an
environmentally friendly product, helps reduce CO2
emissions and solve marine microplastics problems.
• Taking advantage of paper—its lightness, firmness,elasticity, and breathability

Market size *Survey of the Company• Current artificial turf market- Worldwide: JPY 500 billion- Japan: JPY 17 billion (for sports competition: 12 billion, for exterior: 5 billion)• Target market for OJO+ paper artificial turf
- Carpet market: JPY 190 billion- Plastic flooring materials market: JPY 64.5 billion- Proposal of a paper-made artificial turf area inside public facilities, etc.: JPY 30
billion- For sports competition 100 fields: JPY 12 billion- For exhibition venues: JPY 3.5 billion

Current initiatives and achievements•

Proposing artificial turf as a solution for marine microplastics
problems and advertising the functionality unique to paper(breathability, quick-drying nature, etc.), we have alreadyreceived many inquiries from government agencies andcompanies.

•

Installation examples- ECORU Togoshi, Environmental Learning Exchange Facility
in Shinagawa, Tokyo- Nakamuraminami Sports Exchange Center in Nerima, Tokyo

Potential market of about JPY 300 billion
Before installation

Installation inprogressplaygroundgardenCOPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 23

Totally Recycling-oriented Business Model (Town ecomo)
Material recycling
Contributing to the realization of a circular economy throughrecycling-oriented business

Town ecomo✓ More than 400 units are being
installed in 45 prefectures（ Point-reward type recovered paper collection box ）… 15店舗以上•

Utilizing the collection network of recovered paper
wholesalers throughout Japan.Collected recovered paper isdelivered to paper manufacturers as raw materials for paper(recycling material)•

Town ecomo and other measures to collect recovered paper
from stores•

Provision of the ecomo Closed Recycling Service, which
visualizes resource emissions, recycling routes, and recycling
volumes… 5店舗以上… 1～5店舗

Forests

Pulp
manufacturers

https://www.kpp-gr.com/kpp/ja/ecomo/town-1.html
Distribution
Collection

Paper
manufacturers

Material
recycling

Distribution

Consumers•“Town ecomo” is a system to collect recovered paper
such as old newspapers and magazines generated athome in collection boxes installed at retail stores, etc.
Points are given according to the weight, and people canuse their points for shopping.

•

Recovered paper can be disposed of at any time even inareas where a collection service is not so frequently
provided by the local government. With this system,
Recovered paper accumulated in households would not
be incinerated but used as recycled raw material.

Printing/
Processing
companies

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 24

１

Summary of Financial Results
for the Fiscal Year Ended March 2024

２

Forecast for the Fiscal YearEnding March 2025 and Other Information

３

Progress in the Third Medium-Term Business Plan

４

Reference Materials

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 25

Summary of the Third
Medium-Term Business Plan

Themes of the Third Medium-Term Plan

Theme

Achieving the Long-Term Vision “GIFT + 1 2024” andfor the 100th Anniversary of the Company

Messages

Contributing to a sustainable society through recycling-enhancing business andincreasing corporate value through business portfolio reform
Strengthen global group management

Establish and deepen profit base

• Maximize profits of each operatingcompany• Promote strategic alliances and M&A• Pursue global synergies• Promote DX (Digital Transformation)✕• Realization of ESG management• Establish a global operations system• Strengthen group communication• Appropriate allocation of management
resources

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 26

Summary of the Third
Medium-Term Business Plan

Reform of KPP GROUP WAY

The KPP Group’s management philosophy “KPP GROUP WAY” has been reformed along with our startwith the holding company structure- Introduced the concept of “Purpose Management.” Aim to be a company that contributes to the creation of a sustainable society based on the new KPP GROUP WAY.

Corporate Message

A Paper Trail for Creating The Future
G lobalization

MISSION

Contributing
to the realization
ペーパーイノベーションでof a recycling-oriented society
循環型社会の実現に貢献する

Leveraging our global network to become a leading pulp and paper company.

I nnovation
Developing the potential of paper through a creative mind anda recycling-oriented business model.

F unction

VISION

Promote e-commerce and take on the challenges of new business domains.

GIFT

Globalization Innovation Function Trust

T rustContinue being a sincere company trusted by stakeholders.

VALUES・ Pioneering The Future with “Paper Innovation”
・ Cultivate Autonomous Human Resources
・ Open-minded Organization

KPP Group Charter
Paper Innovation
DNA Supporting The Organization

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 27

Summary of the Third
Medium-Term Business Plan

Sustainability and ESG Management

KPP Group’s Basic Sustainability Policy

We, the KPP Group, will contribute to the realization of a sustainable society through the development of comprehensive recycling-oriented
management based on the basic principles of the “KPP GROUP WAY.”
We also consider the environment, society and governance as important management issues, identify material issues related to our businessactivities, and work to resolve these issues.

Material Issues of the KPP Group
Global Expansion

Response to DX

Implementation of Green Business• Creation of group • Inner communication
synergies• Expansion of
e-commerce• Solving the marine plastic
pollution problem

Climate Change Countermeasures

Diversity & Inclusion• Development of solutions to • Reduction of
prevent global warming
CO2 Emissions• Ensuring diversity• Development of
new systems• Recycling and waste reduction

Enhancement of Governance• Utilization of diverse • Compliance
personnel• Information security • Risk management

ESG Management Initiatives (For details, please refer to “Integrated Report 2022” https://www.kpp-gr.com/en/ir/report.html)[Issues]• Creation of a recyclingoriented society• Response to climatechange[Measures]• Establishment of a paper
recovery network andselling raw materials forrecovered paper• Endorsement of TCFD anddisclosure of information
related to climate change
countermeasures• Development anddistribution of products
and services with reduced
environmental impact• Spread of renewableenergy[Issues]• Human resource
development[Measures][Issues][Measures]• Introduction of fair personnel
system and implementation ofevaluation• Education (e-learning andtraining by rank)• Enhancement ofcorporate governance• Strengthening the
global governancestructure• Diverse work systems• Development of an
employee-friendly work
environment• Diversity & Inclusion• Promotion of Green Biz
Project• Prevention of harassment• Response to long working
hours• Improvement of work-lifebalance• Promotion of women’s careeradvancement• Diversification of hiring practices• Forest conservation andreforestation• Raise awareness of paper
culture and book culture• Dissemination of information on
paper culture and book culture• Utilization of managed
forest resources• Reduction of poverty
and hunger• Various types of support• Disaster and incident
response• BCP• Evacuation drills
Safety confirmation
drills• Diversity & Inclusion• Reinforcement of Groupwide security

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 28

Summary of the Third
Medium-Term Business Plan

Transition to a Holding Company Structure

Transition to a holding company structure was completed on October 1, 2022 Three core operating companies(Kokusai Pulp & Paper Co., Ltd., Antalis and Spicers) come under the holding company’s umbrella

KPP GROUP HOLDINGSBusiness area

Business area

Northeast Asia

Business area

Europe / Americas

Asia-Pacific(Oceania / Southeast Asia and India)

Kokusai Pulp & Paper

AntalisSpicers(Japan)(France)(Australia)• Number of employees:
Around 1,000• Number of employees:
Around 4,150• Number of employees:
Around 450[Consolidated Net Sales Ratio] * FYE March 2024
Asia-Pacific8.2%

Europe/Americas44.4%

Northeast
Asia

47.4%

* Approximation,
excluding real estate(Kokusai Pulp & Paper)[Consolidated Operating Profit Ratio] * FYE March 2024
Asia-Pacific13.4%Northeast
Asia

21.3%

Europe/Americas65.3%* Approximation,
excluding real estate

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 29

Summary of the Third
Medium-Term Business Plan

Benefits of Becoming a Holding Company (Creating Synergies)✓ Strategy: Share strategies, tactics, and management
methods across regions✓ Human Resources: Optimizing global staffing✓ Functions: Eliminating duplicated functions throughshared services, etc.

✓ Sales: Business matching within the group.
Sharing know-how, skill information and salesorganizations/channels✓ SCM: Global sharing of distribution networks
and product inventories✓ Funding: Utilization of surplus funds✓ Credit: Utilization of credit✓ Taxation: Development of Global
Governance System

Management
Synergies

Financial
Synergies✓ Procurement: Achieving economies of scale
through joint procurement of products✓ Brand: Brand awareness and brand strength

Business
Synergies

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 30

Summary of the Third
Medium-Term Business Plan

Promoting Inorganic Growth (M&A/Alliance)

Aim for medium- to long-term growth by promoting inorganic growth (growth through acquisition of
external resources) as well as organic growth (growth through internal resources)

Organic Growth

Inorganic Growth

Expansion of recycling-based
business models

Expanding business domains
by acquiring external management resources
Total amount: JPY• Further expansion of recycling-oriented
businesses by balancing Recovered paper
business with product sales• Strengthen pulp business, including raw
materials for sanitary paper• Maximize profits by expanding the share of thepaper and paperboard wholesale business, andpromoting e-commerce, while reducing
expenses• Expansion of solution businesses

20 billion (in three years)• Target business for M&A
Visualcommunication
business

Packagingbusiness

Other processing
businesses• Management resources to be acquired
Portfolio

Human
resources

Management
know-how

Offices andfacilities

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 31

Summary of the Third
Medium-Term Business Plan

Net Sales and Gross Profit
by Business Segment* From the Third Medium-Term Management Planannounced on June 13, 2022

Continue to promote business portfolio reforms under the Third Medium-Term Plan
Final year of the Second
Medium-Term Plan

Final year of the Third MediumTerm Plan (targets)FYE March 2022

FYE March 2025

JPY 650 billion
455

JPY 563.4 billion
Chemical products &Machinery, etc.
Visual communication

309

Packaging

776

Paper raw material

439

Board

605

650

500

1,300
JPY 92.9 billion

93

520
29

486

Net sales

382
47
30

3,006

Gross profit

JPY 108 billion
25
183

975

244
Paper

+79.7%+67.6%

52
45

2,600
393
Net sales

Gross profit

Ratio of visual communications and packaging businesses with higher gross margins to rise
COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 32

Summary of the Third
Medium-Term Business Plan

Regional Strategy Summary* From the Third Medium-Term Management Planannounced on June 13, 2022

Overseeing the global operations with the three pillars: KPP, Antalis and Spicers “North and South America”
and “Southeast Asia and India” start to fully expand businesses from the Third Medium-Term Plan.
Company inchargeKokusai Pulp &
Paper
(KPP)

Area in charge

Final year of the Third
Medium-Term Plan

Sales Target

Strategy Overview

JPY 320 billion

・ Expand sales of paper and board by reviewing marketing methods focusing
on e-commerce while ensuring sales share and profits.
・ Promote comprehensive recycling-oriented business.
・ In China, increase both sales and profit by expanding sales volume in linewith market expansion.

EuropeJPY 250 billion

・ For paper & board, maintain the number 1 position in the region,and secure revenue and profit growth.
・ Packaging and visual communication businesses will make good useof the inorganic strategy to expand while capturing market expansion.
・ Promote e-commerce in all three businesses for further improvementof profit margin ratio.

North and SouthAmerica

JPY 20 billion

・ Consider full-scale entry into North America and implement inorganic strategy.

JPY 35 billion

・ Increase profitability by maintaining the market share in paper and board
in the region and promoting e-commerce.
・ Utilize inorganic strategy for packaging and visual communicationand pursue M&A actively.
・ Further promote adhesive labels as a product segment.

JPY 25 billion

・ Complete organizational restructuring. Promote business by utilizing know-how
under the control of Spicers.
・ Aim for growth by capturing market expansion in the area of paper and board,packaging and visual communication.

Northeast Asia

AntalisOceania
Spicers
Southeast Asia
and India

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 33

Summary of the Third
Medium-Term Business Plan

Targets for the Final Year 2025 of
the Third Medium-Term Plan

* From the Third Medium-Term Management Planannounced on June 13, 2022

Aiming to increase both sales and profits with more profitability(JPY million)FYE March 2022

FYE March 2025

Growth rate

Net sales

563,414650,000+15.4%

Operating profit

9,379

14,500+54.6%

Operating margin

1.7%

2.2%

+0.5ptNet profit

7,497

9,000

+20.0%

ROE

15.0%

12.0% or more

-

ROA

2.7%

2.5% or more-

Measures to achieve targets
・ Improvement in profitability: Increase in sales
and operating profit ratio, etc.

・ Improvement of asset efficiency: Group business
management through ROIC, etc.

Targets for improving financial position

DE ratio*1

Capital adequacy ratio

FYE March 2022

FYE March 2025

1.4 times

1.0 time or less

19.4%

25.0% or more

*1. DE ratio: Interest-bearing debt / net assets

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 34

Summary of the Third
Medium-Term Business Plan

Cash Flow Allocation* From the Third Medium-Term Management Planannounced on June 13, 2022

Increasing corporate value by growth investment within operating cash flow
Improving our financial position by accumulating retained earnings
Maintaining a net debt-to-equity ratio of less than 1× and increase equity ratio to 25% or more

Shareholder returns are based on an appropriate amount of retained earnings

Cash inflow

Cash outflow

Sale of fixed assets andcross-shareholdings
Cash and +Return of fund management
deposits
Collection of doubtful debt

Repayment of interest-bearing
debt

Operating cash flow
Three-year cumulative amountJPY

36.0billion(free cash flow)

JPY

23.0billion

Use of external funds

Growth Investments
Investment amount used forinorganic strategy (M&A, etc.)
approximately JPY

20.0billion

Retained earnings

Shareholder returns (dividends)

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 35

Reference
Materials

Company Profile

A group of paper merchants with a 99-year history
Company Name
Established

November 1924

Representative
Head Office
Address
Capital
Employees

KPP GROUP HOLDINGS CO., LTD.

Madoka Tanabe, Chairman & Chief Executive Officer
Tadashi Kurihara, President
6-24 Akashi-cho, Chuo-ku, Tokyo
JPY 4,723 million
5,624 (consolidated)*

As of March 31, 2024

■ Number of Countries

47■ Number of Cities

182■ Number of Bases

187* As of March 31, 2024

Status of shareholders*

treasury stock

As of March 31, 2024

Oji Holdings Corporation
The Master Trust Bank of Japan, Ltd. (trust account)
Nippon Paper Industries Co., Ltd.
Custody Bank of Japan, Ltd.

Principal
shareholders

KPP Group Holdings(Employee Stock Ownership Association)
Mitsui Sumitomo Insurance Company, Limited
Custody Bank of Japan, Ltd. (trust account)
The Master Trust Bank of Japan, Ltd.
(Executive Compensation BIP ｔrust account)
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Norinchukin Bank

18.1%
9.1%
7.5%
3.2%
3.2%

2.6%
2.4%
2.0%
1.6%
1.5%
1.5%
1.5%

4.10%

Foreigncorporations, etc.

8.35%

Other
corporations

Trust banks

12.25%

31.91%

Share ownershipratio
by owner

Financial
institutions

18.26%

Individuals
and others

25.13%COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 36

Reference
Materials

Paper and Paperboard Business (Domestic)

Paper
Deals in newsprint, printing paper, and information-related paper.
There is a wide range of paper types, and we make proposals that match the properties
and characteristics of each type of paper depending on the application.

Paperboard
Paperboard is mainly classified into “container board” and “folding box board” and is widely used
for packaging.
“Container board” is the base paper used to make corrugated boxes, and accounts for about 80%
of all paperboard.
“Folding box board” is the base paper for paper boxes such as candy, tissues, cards, etc.

Paper manufacturers

Users

Paper
Merchant

Kokusai Pulp &Paper（Secondary trading）

Printing companies,
newspaper companies,
publishers,
stationery manufacturers,
wrapping paper manufacturers,
packaging paper manufacturers,
etc.

Consumers
Product• Independent common distributors- Primary paper distribution is mainly classified into paper manufacturer affiliates, general trading company affiliates,
and independent common distributors

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 37

Reference
Materials

Domestic and Overseas Business Models in the Paper BusinessHybrid and global deployment of three business models in different regions

Paper Trading type

Paper Distribution type

Paper Merchant type

Overseas business model

Domestic business modelBusiness models in Europe and America

MissionMissionMissionTrading business utilizing global
network in paper, paperboard
and paper materials

Paper-related wholesale businesscombining indent business(consignment sales) with stockbusiness (inventory sales)

High-value-added business through cutting
and processing and sales of own-brandproducts with large-scale logistics
and delivery functions

Gross margin* ratio

Gross margin* ratio

Gross margin* ratio

approx. 3%

approx. 6%

approx. 25%

Maximizing profitability and efficiency by developing various businessmodels appropriate for each region*Gross margin ratio in normal times

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 38

Reference
Materials

Adhesive Label Business**Adhesive Labels Business ... Paper Business

Adhesive Label Business in Oceania
Providing services in all fields, including daily necessities, food and beverage, medical andpharmaceutical, logistics and distribution, and industrial-related fields.
- Propose to customers the best combination of surface materials, adhesives,
release paper and release film for various applications.
- Wide range of supply sources, especially in Asia and Europe- A large selection of approx. 100 different products.
- In-house slitting process provides added value, responding flexibly to customer specifications.
Daily Necessities

Logistics

Food & Beverage

OthersMedical CareCOPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 39

Reference
Materials

Packaging Business (Customized Solutions)Customized solutions (Antalis)
Experts who provide customized solutions that meet customer needs for a wide range of packaging material Providing services
in a wide range of industrial fields, including automobiles, electronics, high-tech, machinery, metals, food, chemicals and so on.
ExpertInquiries from Customers✓ What protection does the product need?
✓ What are the transportation modes androutes, and the situation of on-site
inventory?
✓ What do your internal logistics look like?
✓ What about the disposal after use?

We have products that need
protection, but we can’t find astandard packaging solution to meet
our needs.

・ Carefully consider customers unique cases and develop a solution that meets their requirements
・ Procurement of the highest quality packaging materials at competitive prices through a broad network of suppliers and manufacturers
Packaging Design Center

Providing a variety of packaging materials (examples)

Corrugatedcardboard

FoamcushionAir
cushionPaper
cushionHoneycomb panel

Gap filling buffermaterial

Firm
packagingmaterial

Bag-type air
cushioning
material

Corrugated
foam

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 40

Reference
Materials

Visual Communication BusinessWe provide solutions and products ranging from large-format inkjet printers to inks and other consumables,and materials for indoor and outdoor signage, displays, and car wrapping- Experienced marketing teams provide high-level user support
Examples of indoor and outdoor signage, display, wrapping, etc.

* Examples of projects in which products of Antalis’ visual communication series were delivered in collaboration with architects, interior
designers, printers and advertising agencies.

Coala Air Board

1

COALA STICKY
WALL S

2

COALA ROLL-UP
ECO

3 COALA ROLL-

5

COALA INTERIOR
FILM

6STADUR SIGNEASYPRINT BLACK

7UP PET S

COALA FLOOR &WALL R

4

COALA ORGANZA8DIBONDCOPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 41

Reference
Materials

Paper Raw Materials Business (domestic)

Paper raw material (pulp and Recovered paper)
Currently, approximately 40% of the raw material consumed by the entire paper industry is pulp,
and the remaining 60% is Recovered paper.
We use our domestic and international network to procure pulp and Recovered paper,and to sell them to paper manufacturers.

Artery Business（ Product Sales ）Secondary wholesaler/user

Users

Paper・Paperboard

Annual sales results
approx.

Products

1.8million tons

Pulp

Paper and
paperboard
business

paper manufacturer

Recovered Paper

Annual collection
results
approx.

1.1million tons

Wholesaler of Recovered paper paper
Recovered Paper

Collection

Paper rawmaterials
business

Vein Business（ Collecting Recovered paper ）• Recycling industry through recycling of Recovered paper- Japan’s paper industry is characterized by the recycling of recovered paper.
- Kokusai Pulp & Paper plays an important function in this process and has been working for many
years toward the realization of a sustainable society.

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 42

Reference
Materials

Comprehensive Recycling-Oriented Business Model in Japan

Aiming for management with an eye to a circular economy, we promote the material recycling business that supplies recovered paper andother recycled resources; develop and offer biomass power plant operation support systems; and advance the power generation business thatuses by-products emitted from factories as the main fuel.
Material recycling

Reduction of GHG Emissions

Contributing to the realization of a circular economy
through recycling-oriented business⚫

⚫

⚫

Town ecomo

Contributing to reducing greenhouse gas emissions throughprojects to support biomass power generation

Utilizing the collection network of recovered paper
wholesalers throughout Japan. Collected recovered paper isdelivered to paper manufacturers as raw materials for paper(recycling material)⚫

⚫

Town ecomo and other measures to collect recovered paper
from stores
Provision of the ecomo Closed Recycling Service,
which visualizes resource emissions, recycling routes,
and recycling volumes

Collection bins for recovered paper are installed at
supermarkets and other retail stores. Old newspapers andmagazines are brought from home for recycling. Points are
given according to the weight.

Development of BMecomo, an operation support
system for biomass power plants using AI and IoTtechnologies
Contributing to the realization of a circular economy
and a decarbonized society through Power Purchase
Agreements (PPA) in which by-products from factories
are used as fuel.

Sawmills/
Construction sites
Forests

Pulp
manufacturers

BM ecomo
Forests
Distribution

Distribution
Collection

Offices/Households

Paper
manufacturers

Material
recycling

Distribution
Printing/
Processing
companies

Reductionof GHG
Emissions

https://bmecomo.com/
Consumers

BM ecomo supports daily operations and business
management by gathering and analyzing all data obtained
from biomass power plants, utilizing the latest technology
and providing visualization, thereby helping maximize theprofits of biomass power plants.
Purchase waste wood from construction material
manufacturers and supply it to biomass power plants.

Power
Stations
Supporting
operation

COPYRIGHT©KPP GROUP HOLDINGS CO., LTD. ALL RIGHTS RESERVED 43

Reference
Materials

KPP RISANET Network and Recovered Paper Collection (Japan)

KPP RISANET is …

An association founded in 2013 to promote mutual friendship among its members,
conduct the recovered paper collection business based on sound management,
and contribute to the development of the industry.

2013

2023

(At the time ofestablishment)(At present)

Number ofmembers

17 companies

31 companies

Recoveredpapercollection

approx. 3 million tons

approx. 7 million tons

(Annual)Paper and paperboard
consumption in Japan

23.15 million tons* (2021)
Recovered paper collectionin JapanEquivalent to about 40% ofrecovered paper collected in Japan

18.39 million tons* (2021)

Utilize the KPP RISANET Network and contribute to
the realization of a comprehensive recycling-oriented society*

Source: Fastmarkets RISI Annual review of global pulp & paper statistics, 2021

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Materials

Example of ESG Management Green Products / Green Solutions

KPP Group’s Green Products
Due to the marine plastic pollution problem, moves to restrict disposable plastic are accelerating in countries around the globe, anddemand for paper as an alternative material is rising.
In recent years, research and development has been progressed mainly by paper manufacturers, and there has been an increase inexamples of food packaging and daily necessities.
Examples: Cutlery, clear folders, face covers, hangers, paper packaging, cushioning, packaging, etc.

Promotion of
paper solutions

These products reduce the use of petroleum-derived plastic by innovating manufacturing technologies and mixing in biomass-derived pulp
and paper to an extent that does not detract from plastic’s characteristics such as barrier properties and processing suitability.
Examples: Paper-made cold insulation box, paper + film packaging materials, waterproof & oilproof paper, etc.

Reduction ofplastic use

As it is often difficult to switch plastic to other materials due to its various characteristics,
research is being conducted with the aim of reducing the environmental impact. Biomass plastic manufactured using biomass materials
and biodegradable plastic that is broken down
by microorganisms are some examples.
Examples: In-store point of purchase (POP) advertising, fishing equipment, cutlery, etc.

Biomass materials

Green solutions

Paper-based clear folders

Try-on face cover for clothes shop

Reduced plastic cutlery

Artificial grass made of paper yarn

Town ecomo

A system to collect recovered paper generated at home in collection boxes installed at retail stores and grant points according to their weight. This paper isrecycled as raw materials for paper.

Office ecomo

A system to safely collect confidential documents generated in offices in special boxes and recycle them as raw materials for paper.

ecomo Closed Recycling
SystemBMecoomo

A solution service that enables our client companies to visualize their recycling loop by centrally managing the process from the supply of paper to the collection
and recycling of recovered paper.
A system that helps optimize the operation of biomass power plants by utilizing the latest technologies such as big data analysis, AI and the IoT.

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Reference
Materials“Green Products & Solutions” Catalog and Sample Kits

We created a catalog introducing products and solutions that help reduce environmental impact. Six samplesof paper solutions and reduction of plastic use are enclosed.
Products and solutions are presented in three categories: Retail/Restaurant/Office, Manufacturers, and Logistics Warehouse
Six samples of environmentally friendly products, such as paper solutions and reduction of plastic use, are enclosed.

Sample Kit request form https://shifton.kpp-gr.com/catalogue_form.html[Kami no ito (paper yarn) OJO+][modo-cell®]• Made from 100% “OJO +,” paper threads derived from Japanesewashi paper made from natural materials (Manila hemp)• The texture is smooth, and it is hard to believe that it was madeof paper• Main raw materials are plant fiber, starch and plantbased resin• Various molding methods can be applied[Paper packaging materials][Paper face cover]• Paper face cover made mainly from pulp
Used in fitting rooms in a clothes shop
• Reduces plastic use by about 70% compared with petroleumbased nonwoven fabrics[Coala Air Board]• Antalis’ brand, Koala Air Board, is a sustainable material madeof 100% recyclable paper• Used for panels and fixtures in exhibitions• Consists of “pure white paper, polyethylene (PE),aluminum vacuum metallizing PET (VMPET), PE, andlinear low-density (LL) polyethylene film”• Paper packaging materials that can have “Paper Mark,”
an identification mark requested by laws and regulations,applied to them

[Paper clear file]• Paper clear file bound with eco-press binder• Very eco-friendly stationery that is manufactured without
the use of glue, heat or staples

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Materials

Digital Marketing Initiatives

Service site “SHIFT ON”- Part of our digital marketing initiatives. The goal is to create customer contacts and prospects.
At the same time, we will introduce marketing automation (MA) tools to sophisticate marketing.
Environmental and newfunctional materials solutions
Packaging solution

https://shifton.kpp-gr.com/

Comprehensive support for the planning and implementation ofenvironmental projects, including SDGs and carbon neutrality.
Helping customers solve their management issues through thedevelopment of packaging materials and original packaging.

Total solution for sales promotion

Comprehensive support for the policies of sales promotion tools
installed inside and outside stores, from material selection to supply.

Analyze the potential needs of customers from the three perspectives of “environment/functional materials,” “packaging,” and “sales promotion,”
thereby providing solutions that can be realized with materials and systems- Solve important management issues such as improving operational efficiency, reducing costs, reforming work styles, and improving corporate value

Customer concerns and issues
Improving
operational efficiency

Standardizi
ng of
operation

Sales are slow because of limited daily shipments
Packing is a bottleneck and shipping is not progressing smoothly
Too much cushioning
Different workers put in different amounts of cushioning material.
Quality of service is not standardized.
The speed of the packing work is different from line to line,
complicating management
Want to improve the packing skills of temporary workers
hired during the busy season
Do not know what to start with in terms of environmental initiatives

Greenefforts

Packing is a bottleneck and shipping is not progressing smoothly
Looking for alternative packaging that can contribute to SDGs

Operational improvement proposal
Improving operational
efficiency and leveling
operations through theintroduction of automatedmachines for packaging

Green material proposal
Achieve plastic-free
operations by changing someof the packaging materials
from petroleum-derived
materials to paper

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Materials

PAPER MALL (EC Site for Paper-Related Products)

https://www.kpps.jp/papermall/Our website “Paper Mall” offers approx. 1,000 types of general paper, specialty paper
and paper products, which can be purchased from a single sheet of paper.
Samples and sample books can be ordered free of charge, and we also offer a processing service
to cut general paper into desired sizes to meet a wide range of customer needs.
We have strengthened the lineup of our “Green Products” series of environmentally friendly
products (see below) to help all stakeholders who are working on SDGs.
This is a comprehensive paper-related website that makes the most of the strengths ofour company, a paper specialist, such as the ability to make prompt deliveries through the
network of KOKUSAI PULP & PAPER CO., LTD., the ability to check the latest paper-related
information such as paper industry news, and the ability to receive questions and consultations
about paper.

■ Green Products: Environmentally friendly products

・ Promotion of paper solutions
Microplastics are a cause of marine pollution. There is a need to develop materials
that can replace plastic.
We are working to change to paper, i.e., switching to products made from paper.

・ Plastic Reduction
We will reduce the amount of plastic used by mixing in other materials while maintaining
the properties of the plastic.
We are developing materials and products to reduce the amount of plastic used.

・ Bioplastics
https://www.kpps.jp/papermall/greenproducts/

Plastics that return to the soil as compost and do not remain after being decomposed by
microorganisms and other natural elements.
We are developing materials and products in search of the possibilities of biodegradable plastics
and biomass plastics.

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Materials

Key Communication Tools
Integrated Report

TSUNAGU(Public relations magazine)

SNS
YouTubeX (formerly Twitter)

Instagram

The report has been published since 2016 in order toprovide comprehensive and integrated financial andnon-financial information on our activities.
https://www.kpp-gr.com/ja/ir/library/integrated.html

The magazine is distributed as a communication toolthat acts as a bridge between stakeholders and the KPP
Group. It provides the latest KPP news while highlighting
the various potential and attractive qualities of paper.

To our stakeholders, we provide a wide range of
information on our initiatives from various angles with amixture of video and images through these social media
accounts as needed.

https://www.kpp-gr.com/ja/tsunagu.html

Contact

Corporate Communications Office
TEL:03-3542-4169
https://www.kpp-gr.com/en/contact/contact3.html

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Disclaimer

This document contains forward-looking statements, future plans, and management targets related to
the Company.These forward-looking statements are based on current assumptions regarding future
events and trends and are not guaranteed to be accurate.
Actual results may differ materially from those presented herein due to various factors.

Unless otherwise stated, the financial data presented herein are presented in accordance withaccounting principles generally accepted in Japan.
The Company does not necessarily make any revisions to the forward-looking statements it has made,regardless of the occurrence of future events, etc., except when required by the Disclosure Rules.
Information relating to other companies is based on publicly known information.
This document does not constitute solicitation of offers to acquire, offer to sell, or offer to buy any
securities (hereinafter referred to as “solicitation”). It is not intended for solicitation activities, nor can it
be the basis for any contract or obligation.
This English document is just a translation of the Japanese document. Therefore, please use this English
document only for convenience and refer to the original Japanese document as appropriate.

Contact
KPP GROUP HOLDINGS CO., LTD. Investor Relations Contact
https://www.kpp-gr.com/en/contact/contact3.html

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