THE PACK CORPORATION

Briefing Materials on
Business Results for
the Second Quarter of
the Year Ending
December 31, 2022
September 2, 2022

Contents

P. 2

Topics
1. Business Results for the Second
Quarter of the Year Ending December
31, 2022

P. 3

2. Forecasts of Business Results for theYear Ending December 31, 2022

P. 17

3. Progress on the Medium-Term
Management Plan

P. 21

4. Reference Materials

P. 33

Copyright© 2022 The Pack Corporation. All Rights Reserved.

1

Topics
Business results◼ Alongside recovering consumer spending, overall business trends were positive.
— Consumer spending increased at brick-and-mortar stores, which had a particularly strong effecton sales of paper bags.
◼ Sales were also strong for packages for the e-commerce sector (mainly corrugated boxes anddelivery bags) and packages for the takeout and delivery foods market (mainly primary foodcontainers).
— Sector growth attributable to changing lifestyles in response to COVID-19 continued.
Market conditions and management policies◼ Continuing shift toward paper and other eco-friendly materials— Trend toward reduced use of plastics and to plastic alternatives◼ Shift from overseas production toward domestic production— To reduce CO2 emissions during transport and optimize supply chains◼ Addressing the Film Packaging Business— Despite declining demand for external packages for disposable diapers, demand for film
packaging for food products and everyday use items trended up.
◼ Addressing the e-commerce sector— Continued sales growth through labor and energy savings and through mechanization
solutions for customers
Medium- to long-term management strategies◼ Formulating a Basic Policy on Sustainable Management Initiatives◼ Plans call for the formulation in FY2022 of a new Medium-Term Management Plan (for the period set
to begin with FY2023)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

2

1. Business Results for
the Second Quarter of
the Year Ending
December 31, 20223

Summary of Business Results
Overall trend toward recovery as consumers go out more and consumer spending recovers(Million yen)

Second quarter of year
ended December 31,
2021

Second quarter ofyear ending
December 31, 2022

ActualActualYoY change

Net sales

36,58939,617

8.3%

Operating profit

1,459

2,044

40.1%

Ordinary profit

1,600

2,298

43.6%

Profit attributable toowners of parent

1,069

1,422

33.0%

◆ As consumers ventured out more often, consumer spending recovered. This recovery also reflected the firstlarge-scale consecutive holiday period in three years without movement restrictions.
◆ Operating profits grew significantly, with surging sales volumes and rising sales prices.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

4

Factors Underlying Changes in Operating Profit
Operating profit grew due to growing sales volumes and rising average sale prices.
Increased
sales
volumes

Higheraverage salepricesLower rawmaterial
costs

+297

+595

+40

Higher other Higher labor
manufacturcosts
ing expenses
-61

-144

Higherlogistics
costs

Lower otherselling,
general andadministrative
expenses

-160

+18

(Million yen)

Second quarter ofyear ended
December 31, 2021

Second quarter ofyear ending
December 31, 2022

OperatingprofitOperatingprofit

1,459

2,044

◆ While sales volumes were down 8.3% for paper cartons and 2.3% for corrugated boxes, they were up by
10.6% for paper bags and 3.0% for plastic bags (including film packaging, which were up by 53.2%).
◆ Average sale prices rose due to changes in product structures and sales of solutions involving high value
added products.
◆ Manufacturing costs rose due mainly to higher utilities and power costs (105 million yen) accompanying rising
electricity charges and heavy oil prices.
◆ Logistics costs increased due mainly to rising warehouse storage costs (75 million yen) and transportation
charges (82 million yen) driven by growth in manufacturing and shipping volumes.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

5

Results by Segment(Million yen)

Second quarter of year ended
December 31, 2021

Second quarter of year ending
December 31, 2022

ActualShare

ActualShare

Net sales
Paper
Products
Paper bags
Papercartons
Corrugatedboxes
Printing

36,589100.0%

39,617100.0%

8.3%

25,31569.2%

27,998

70.7%

10.6%

9,684

26.5%

11,259

28.4%

16.3%

8,806

24.1%

9,728

24.6%

10.5%

5,778

15.8%

5,947

15.0%

2.9%

1,046

2.8%

1,063

2.7%

1.7%

Film Packaging

5,323

14.5%

5,221

13.2%

-1.9%

Others

5,950

16.3%

6,396

16.1%

7.5%

1,459

100.0%

2,044

100.0%

40.1%

1,416

97.0%

1,952

95.5%

37.8%

163

11.2%

197

9.7%

21.0%

Others

378

26.0%

431

21.1%

14.0%

Adjustments-499-34.2%-537-26.3%-

Operating profit
Paper
Products
Film Packaging

YoY change◆ Recovering consumer spending in Japan and strong sales of paper bags at The Pack America Corp. helped drive sales
and profit growth in the Paper Products Business. Other factors included strong sales of paper cartons to the takeout
and delivery markets and strong sales of paper cartons and corrugated boxes to the e-commerce sector.
◆ Despite declining sales of external packages for disposable diapers, strong sales of film packaging for food products
boosted operating profits in the Film Packaging Business.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

6

Trends by Segment (Second Quarter)
Net sales(Paper Products Business)

2,695

Net sales (Film Packaging Business)

Net sales (other businesses)

Operating profit(Million yen)

2,595

3,000

2,044
1,229

2,000

1,459

50,0001,000

42,05440,00030,000

6,865
8,867

44,284039,617

7,073
9,185

36,04636,589

6,048

5,950

6,396
5,221

7,074

5,323

20,00026,321

28,025

Second quarter of year
ended December 31,
2018

Second quarter of year
ended December 31,
2019

22,923

10,00025,31527,9980Second quarter of year
ended December 31,
2020

Second quarter of year
ended December 31,
2021

Copyright© 2022 The Pack Corporation. All Rights Reserved.

Second quarter of year
ending December 31,
2022
7

Sales Composition
Net sales by business
0.4

Second quarterof year ended
December 31,
2021

24.6

Second quarterof year ending
December 31,
2022

25.9

14.7

Food products
Convenience storesHome electronics and home installations

4.8

16.3

4.8

ApparelPharmaceuticals and cosmetics
Life care

Second quarter ofyear ended
December 31, 2021
(Million yen)

7.3

ActualShare

1.3 5.4 2.52.2 4.0

4.4

28.3

6.2 1.1 4.7 3.1 2.2 3.8 3.2

28.3

Second quarter ofyear ending
December 31, 2022

ActualShare

YoY change

Food products

9,067

24.6%

10,266

25.9%

13.2%

Apparel

5,425

14.7%

6,442

16.3%

18.7%

Department stores

1,768

4.8%

1,907

4.8%

7.9%

Supermarkets and drug
stores

2,699

7.3%

2,463

6.2%

-8.8%

Convenience stores

486

1.3%

428

1.1%

-12.0%

Pharmaceuticals andcosmetics

1,990

5.4%

1,870

4.7%

-6.1%

e-commerce *

916

2.5%

1,242

3.1%

35.6%

Sundries

814

2.2%

864

2.2%

6.2%

Home electronics andhome installations

1,472

4.0%

1,490

3.8%

1.2%

Life care

1,638

4.4%

1,266

3.2%

-22.7%

Automotive

152

0.4%

158

0.4%

3.8%

10,41028.3%

11,215

28.3％

7.7％

Other

0.4

Department storese-commerce
Automotive

Supermarkets and drug stores
Sundries
Other◆ In the food products segment, in addition to
growth in sales to the takeout and delivery
markets due to COVID-19, sales of packages forthe souvenir market are also recovering.
◆ Sales to the apparel and sundries segments
increased alongside recovering consumer
spending and growth in the share of e-commercein overall sales.
◆ Department store sales show clear signs ofrecovery, with consumers venturing out more.
◆ Supermarket and drug store sales show sluggish
sales due to inflation and declining demand fromconsumers staying home during movement
restrictions.
◆ The volumes used of some of our products in theconvenience store segment (mainly primary paper
containers) decreased due to new productintroductions and the promotion cycle.
◆ The e-commerce sector and e-commerce sales
grew significantly.
◆ Chip shortages constrained sales to the
Automotive and Home electronics/homeinstallations segments, which recorded
minimal/modest sales growth.
◆ In the life care segment, sales of external
packages for disposable diapers continued to
decline; this decline is expected to level off.

* e-commerce refers to the e-commerce platform segment. e-commerce sales on vendor sites are counted as part of theirindividual business segments.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

8

Paper Products Segment
Industry environment
◆
◆

◆

◆

Trends in net sales and operating profits

Demand for paper bags grew alongside growth in consumer
spending.
Due to COVID-19, the share of overall sales accounted for by
e-commerce continues to grow in various industries,
including food products, apparel, and cosmetics.
Demand for paper cartons (mainly primary food containers)
and related items increased due to the growth of the takeout
and delivery foods market.
Thanks to the development of high-performance papermaterials driven by growing environmental awareness, therange of paper package applications continues to expand.

(Million yen)

Net sales (left axis)

30,000◆

Maintaining energetic efforts to propose migration to paper
packages and environmental solutions in the e-commerce
and takeout and delivery foods market
Promoting improvements in packaging material forms andspecifications and labor-saving, energy-saving, andmechanization solutions for automation of operation lines

Paper Products Business

8.7%
6.1%
5.3%

Film Packaging Business

7.1%

25,31522,92320,000

4,000

3.8%

2,028

10,000

1,952

1,194

1,416

0

2,000

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

Other businesses

Paper Products
Business, 7.0%

6.8%

Other businesses,
6.8%

3.6%

Film Packaging
Business, 3.8%

5.5%

6,000

◆ Solutions

Trends in operating profit margins
9.6%

27,99828,025Initiatives◆

Operating profit (right axis)

ExampleFY19/12 4Q

FY20/12 4Q

FY21/12 4Q

FY22/12 4Q▲ Helping to solve issues confronting customers by proposing various solutions,
including the development of machinery and systems

Copyright© 2022 The Pack Corporation. All Rights Reserved.

9

Paper Products Segment (Paper Bags)
Industry environment

Trends in operating profit margins◆ Current trends indicate a transition from plastic topaper bags and to more eco-friendly materials
generally.
◆ Demand for paper bags remains stable due to thesignificant impact they have on buyer satisfaction.
◆ Volumes of paper bags used for delivery are
growing alongside growth in e-commerce.
Initiatives◆ Launching a second consumer survey on paperbags with the goal of proposing better solutions tomeet consumer needs◆ Enhancing initiatives to develop new eco-friendly
materials, processing, and high-performancematerials(Million yen)

Net sales (left axis)

15,000Operating profit (right axis)

3,000

13,627
11,2599,512

10,000

9,684

2,000

1,292
1,087
5,000

709

1,000

730

0

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

◆ Examples of developed productsTrends in sales volumes
2,000
1,500

1,000
500
▲ Mixed paper with used clothes▲ Water-repellent varnish to
replace rain covers

H1 (Jan.-June)
H2 (July-Dec.)
1,733
1,464
1,349
926
797
731

(Million yen)

807

618

667

738

FY19/12

FY20/12

FY21/12

FY22/120

Copyright© 2022 The Pack Corporation. All Rights Reserved.

10Paper Products Segment (Paper Cartons)
Industry environment◆◆

Trends in operating profit margins

Growing demand for primary paper containers keeping pacewith growth in the takeout and delivery foods market
Leisure- and travel-related consumption, which had steadily
declined due to COVID-19 restrictions, shows signs ofrecovery.
→ Sales of packages for the souvenir market are also
recovering.

(Million yen)

15,000Net sales (left axis)

10,000Initiatives◆◆◆

Maintaining energetic efforts to propose migration to paper
packages and environmental solutions in the e-commerce
and takeout and delivery foods market, where continuing
growth is expected
Proceeding with capital investments to strengthen sales ofprimary food containers
Enhancing initiatives to develop new eco-friendly materials,
processing and high-performance materials

3,000Operating profit (right axis)

9,728

8,308

8,806

2,000

7,470

5,000

1,000
540

451

348

334

0

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

Trends and forecasts of the scale of the paper carton market and
The Pack's market share◆ Examples of developed products

Sales figures

Sales figures (forecasts)

The Pack's market share(Million yen)

600,000

4.0%

3.5%
3.2%
585,000

2.9%

588,000

3.0%
583,100

578,300
570,000

3.0%

575,400

570,500

2.0%

564,600
560,200

555,000▲ Kome-kami TP-FS, a paperboard
made with waste rice, developed
jointly with Papal Co., Ltd.

▲ Molded tray packages sealed withpaper lids

1.0%

540,000

0.0%
2018

2019

2020

2021
(projected)

2022(forecast)

2023(forecast)2024(forecast)

Reference: Fuji Chimera Research Institute, Inc., Current States and Future Prospects of Packaging Materials

Copyright© 2022 The Pack Corporation. All Rights Reserved.

11

Paper Products Segment (Corrugated Boxes)
Industry environment

Trends in operating profit margins◆ Growing demand for corrugated boxes for the foodproducts and apparel markets alongside growth in the
e-commerce sector→ Consumers are using e-commerce in ways specificto their own lifestyles, reflecting diversifying ways forreceiving deliveries, including delivery to lockers andconvenience stores.
◆ The e-commerce gift market also shows signs ofgrowth.

(Million yen)

10,0002,000
Net sales (left axis)

Operating profit (right axis)

5,778
5,049
5,000

5,947

4,919

1,000

Initiatives◆ Proposing eco-friendly packages solutions and products
to meet consumer needs in the e-commerce sector,
which is expected to continue growing◆ Proposing labor-saving, energy-saving, andmechanization solutions for customers

184

300

292

104

0

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

◆ Examples of developed products▲ Eco Rack
corrugated containers▲ Extra-large corrugated boxes—among thelargest corrugated products in Japan▲ CC-PACK cushioned packages
featuring flexibility and cushioning
achieved using thicker materials

Copyright© 2022 The Pack Corporation. All Rights Reserved.

▲ WOW BOX, an entertaining
delivery box with a pop-up feature
exposed when the box is opened

12Film Packaging Segment
Industry environment◆◆◆

Trends in operating profit margins

Domestic disposable diaper manufacturers are facing declining
exports due to the emergence of local disposable diaper
manufacturers in overseas markets.
Demand for products suitable for microwave oven use andlong-term storage is growing alongside the home meal
replacement market. The need for materials with barrierfeatures is also growing.
Demand for paper film packaging is growing alongside growthin environmental awareness.

Initiatives◆◆◆

Net sales (left axis)

10,000Operating profit (right axis)(Million yen)

1,000

9,185
7,074
5,323

5,000

Focusing on combined sales of film packaging, paper cartons,
and corrugated boxes to the food products, beverages, and ecommerce sectors, for which continuing growth is expected
Plans call for the adoption of the latest 10-color flexographic
printers this October→ Growing sales by leveraging eco-friendly multicolor printing
Developing paper film packaging and other eco-friendly
products

5,221

500

410
246
163

197

0

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

◆ Examples of developed productsTrends in sales of film packaging
H1 (Jan.-June)

1,500

1,000

1,316
715

H2 (July-Dec.)

1,144
629

1,371
787

500
▲ Craft Bio Marine oceanbiodegradable paperbased flexible packaging▲ Biomass film packaging
containing eggshells▲ Water-resistant paper Craft
Pouch suitable for boiling(Million yen)

601

515

584

796

FY19/12

FY20/12

FY21/12

FY22/120

Copyright© 2022 The Pack Corporation. All Rights Reserved.

13

Other Businesses
Industry environment

Trends in operating profit margins◆ Slowing demand for in-store supplies and office supplies
in the department store industry as stores close andconsolidate→ Recovering from COVID-19 sales downturns◆ Growing demand for reusable soft bags (made usingmaterials such as cotton, polyester, and nonwovens)◆ Progress on migration to eco-friendly materials for gift
wrapping as wellInitiatives(Million yen)

10,0002,000

Net sales (left axis)

Operating profit (right axis)

7,073
6,048

5,950

6,396

5,000

◆ Review of transaction details and products, andstreamlining efforts, in the Pack Assortment Service
System (PAS)◆ Solution sales of accessories such as price tags andlabels and sales promotion materials suited to market
needs◆ Enhancing initiatives to develop food trays and othernew products using eco-friendly materials

1,000
585
378

260
0

0
FY19/12 FY20/12 FY21/12 FY22/12
2Q
2Q
2Q
2Q

◆ PAS system◆ Examples of developed products

431

Ordering data

Customers,
stores

Delivery, invoices

Delivery vendor

Bulk
delivery▲ ecoKARA™ tray, a biomass tray
containing eggshells▲ Recycled Tetron Cotton, a material madeby recycling materials such as cotton andpolyester scraps from factories

Office supplies
Vouchers, cash register materials,
office automation equipment,
stationery, seals

Delivery

Miscellaneous items
Price tags, POP materials, pricecards, sanitary supplies, etc.

▲ Streamlining logistics via bulk delivery also helps reduce CO2 emissions.

Copyright© 2022 The Pack Corporation. All Rights Reserved.

14

Balance Sheet(Million yen)

Year ended
December 31, 2021

Second quarter of year
ending December 31, 2022

ActualActual

87,422

86,565Current assets

55,43856,219Non-current assets

31,98430,34522,65822,781

643

841

8,682

6,722

25,39023,241

Current liabilities

22,27920,329Non-current liabilities

3,110

2,911

62,032

63,323

Shareholders’ equity

60,654

61,641

Accumulated other comprehensive
income

1,300

1,621

Share acquisition rights

63

46

Non-controlling interests

13

14

AssetsProperty, plant, and equipment
Intangible assets

Investments and other assets
Liabilities

Net assets

Copyright© 2022 The Pack Corporation. All Rights Reserved.

15

Cash Flow
(Million yen)

Second quarter of year
ended December 31, 2021

Second quarter of year
ending December 31, 2022

ActualActualCash flows from operating activities

6,143

4,449

Profit before income taxes

1,595

2,060

Depreciation and impairment losses

1,007

1,133

Cash flows used in investment activities-2,764-2,065Purchase of property, plant, andequipment-1,801-1,323Purchase of intangible assets

-434

-184

Purchase of investment securities

-42

-154

Proceeds from sales of investment
securities

760

Cash flows used in financing activities

-523

-514

-569

-473

18,151

20,101Main items

Cash dividends paid
Cash and cash equivalents at end of period◆ Depreciation and impairment losses include 188 million yen in impairment loss on fixed assets at the Tokyo Plant.
◆ Purchases of investment securities increased due to investments in long-term investment bonds and investors’ organizations.
◆ The elimination of cross-shareholdings led to losses recorded on sales of investment securities; proceeds from sales ofinvestment securities increased.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

16

2. Forecasts of BusinessResults for the YearEnding December 31,
2022

17

Forecasts of Business Results
Growth in sales and profit driven by eco-friendly solutions that respond to a changing market(Million yen)

Year ended
December 31, 2021
ActualYear ending
December 31, 2022
Forecast of business results

Forecast YoY change

Net sales

79,69083,000

4.2%

Operating profit

4,144

4,700

13.4%

Ordinary profit

4,422

5,000

13.1%

Profit ttributableto owners ofparent

2,824

3,500

23.9%

◆ Continuing recovery is expected in consumer spending, which had slowed due to COVID-19.
◆ Continuing growth is expected in the e-commerce and food takeout and delivery markets. Steady trends are projected
for related products.
◆ We will target sales and profit growth backed by proactive proposals and expanded sales of eco-friendly materials withhigh value added.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

18

Trends in Consolidated Business Results(Million yen)

Year ended
December 31,
2019

Year ended
December 31,
2020

Year ended
December 31,
2021

Year ending
December 31,
2022 (forecast)

Net sales

95,50278,44579,69083,000Operating profit

6,850

3,275

4,144

4,700

<Net sales>

100,000<Operating profit>(Million yen)

150,000(Million yen)

10,0006,850

95,50278,44579,69083,000
4,700

5,000

4,144
3,275

50,00000FY19/12

FY20/12

FY21/12

FY22/12(forecast)

FY19/12

FY20/12

Copyright© 2022 The Pack Corporation. All Rights Reserved.

FY21/12

FY22/12(forecast)19

Major Factors Underlying Projected Changes in Operating Profit
Growth in profit due to growth in sales volumes of paper products and stronger sales ofhigh value added products(Million yen)

Increased
sales
volumes

Higheraverage salepricesLower rawmaterial
costs

+440

+1,300-650

Higher other Higher labor
manufacturcosts
ing expenses

-110

-10

Higherlogistics
costs

Lower otherselling,
general andadministrative
expenses

-180

-234

Year ended
December 31, 2021

Year ending
December 31, 2022

OperatingprofitOperatingprofit(forecast)

4,144

4,700

◆ Growth in sales volumes of paper bags due to growth in purchases at brick-and-mortar stores due to easing of
COVID-19 restrictions and increased environmental awareness of use of paper products◆ Growth in sales volumes of corrugated boxes and paper cartons to the continually growing e-commerce sector and thefood takeout and delivery markets◆ Higher average sale prices achieved through proactive proposals of product solutions based on eco-friendly materials,
including paper, and price normalization◆ Responding to anticipated increases in raw material prices by cutting logistics and other costs and shifting higher prices
to sale prices through proposals to change item specifications, etc.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

20

3. Progress on
the Medium-Term
Management Plan

21

Medium-Term Management Plan Slogan:
2020-2022 (Three years)

Management Focused on Environmental
Responsiveness“Environmental responsiveness” refers to being responsive not just to thenatural environment, but to needs across a wide range of areas, including
the social environment and workplace environments.”

Growth strategies⚫

Initiatives to switch to paper packaging⚫

Enhancing sales of paper cartons⚫

Growing sales to the food products, pharmaceuticals and cosmetics,
and e-commerce markets⚫

Expanding business domains⚫

Promoting productivity improvements and workstyle reforms
Copyright© 2022 The Pack Corporation. All Rights Reserved.

22

● Initiatives to Switch to Paper Packaging/Enhancing
Sales of Paper Cartons
Net sales by item
Paper Products Business

500

Other businesses

400

70

300

91

Paper carton sales results

Film Packaging Business(100 million yen)

60
70

63
52

61
53

200
100

280

229

279

253

H1 (Jan.-June)

H2 (July-Dec.)(100 million yen)

300
200

183

106

114

74

88

97

FY20/12

FY21/12

FY22/12

100

98

83
FY19/12

100

194

172

Projected
211

00FY19/122Q

FY20/122Q

FY21/122Q

FY22/122Q

Strategy

Progress

Initiatives to switch to paper packaging◆ Efforts to promote the Sustainable Development
Goals (SDGs)
Enhancing sales of readily recyclable paper
packages
Increasing demand for eco-friendly products◆ Achieving positive sales trends based on proposals of ecofriendly paper packaging solutions featuring high value added

Enhancing sales of paper cartons◆ Continued growth in sales of paper cartons backed by newmarket development and recovering consumer spending◆ Proposal-based sales
Solution sales leveraging our engineering, design,
and information strengths◆ For food products
Enhancing sales of primary paper containers◆ Since FY2019, thanks to stronger sales of paper cartons andthe recovery in sales of paper bags, the Paper Products
Business's share of net sales has risen by 7.4 percentage
points (FY2019: 63.3% → FY2022: 70.7%).

◆ Also up compared to FY2019 thanks to stronger sales in thegrowing e-commerce sector and food takeout and delivery
sectors and through proposals of high value added ecofriendly product solutions

Copyright© 2022 The Pack Corporation. All Rights Reserved.

23

● Growing Sales to the Food Products, Pharmaceuticals
and Cosmetics, and E-commerce Markets
400

Sales trends (food products) (100 million yen)
H1 (Jan.-June)

228

208

187

200

H1 (Jan.-June)
Projected
227

42
40

118

125

98

79

90

102

FY19/12

FY20/12

FY21/12

FY22/12

H2 (July-Dec.)

42

37

23

108

130

60

H2 (July-Dec.)

300

Sales trends(pharmaceuticals/cosmetics) (100 million yen)

19

Projected
45

23

27

20

100
0

19

18

19

18

FY19/12

FY20/12

FY21/12

FY22/120

Progress

Strategy◆ Food products
Enhancing sales of food product packaging
In addition to packages for Japanese and western snacks,a priority to date, expanding sales channels to encompass
the home meal replacement market, including lunch anddeli dishes, and to the food service market (including
takeout), including convenience stores and fast food◆ Steady growth in sales of paper cartons and film
packaging thanks to recovering consumer spending
and new customer development◆ Strong sales of primary paper packages for foodproducts (paper cartons)◆ Pharmaceuticals, cosmetics, and health food
Focusing on markets in which demand is projected to
grow as the population ages
Stable growth projected with growing health orientation
Focusing on the general consumer pharmaceuticals,
cosmetics, and health food markets◆ Sales of supplies for medical care facility use are
growing in Japan.
◆ In China, sales of cosmetics packages declined
dramatically due to lockdowns.

Copyright© 2022 The Pack Corporation. All Rights Reserved.

24

● Expanding Business Domains/Promoting Productivity
Improvements and Workstyle Reforms
Strategy

Progress

Expanding business domains◆ Sales of e-commerce products grew thanks to expanded
orders by major e-commerce firms in the China market.

◆ Overseas expansion
Sales growth in the China market◆ We plan to resume our study of the idea of venturing into
ASEAN markets, which is currently suspended, after the
COVID-19 pandemic is under control.

Venturing into ASEAN markets

Promoting productivity improvements
and workstyle reforms◆ Developing backbone systems to
improve operational efficiency◆ Staff assignments based on
consideration for work-life balance andnormalization of working hours◆ Labor-saving, energy-saving, andmechanization measures for
manufacturing lines◆ Operational efficiency has improved thanks to theadoption of a customer management / sales support
system, an expense settlement system, and an EDI
system for accounts payable billing.
◆ An environment for remote working has been developedby switching from faxed order forms to e-orders andadopting computer systems for communication tools.
◆ Progress has been made on shifting to online meetings(web conferencing and videoconferencing) to eliminatetransit times to meetings; on improving operational
efficiency; on normalizing working hours; andaccommodating more diverse work styles.
◆ Operation of automated materials conveyor equipment
has begun in the manufacture of paper cartons.

Copyright© 2022 The Pack Corporation. All Rights Reserved.

25

Progress on Investment Plans (1)Three-year plan
1. Enhancing paper carton manufacturing capacity (7 billion yen)
Increasing production capacity by expanding the plants capable of producing primary paper
containers and increasing orders received for paper cartons To date, 2.16 billion yen has been invested to expand the adoption of new equipment for paper
cartons.
Adoption and operation of new equipment are delayed due in part to the impact of COVID-19.
Efforts to expand the facilities continue alongside efforts to rebuild the Osaka Plant.

2. Investments in new businesses (6 billion yen)
Expanding product lineups and sales domains
 Continuing to consider M&A and business-alliance projects with a focus on domestic markets

3. Investments in computer system renovations (2 billion yen)
Developing backbone systems to improve operational efficiency
 Plans call for bringing the new backbone systems online in FY2023 alongside the implementationof the business innovation project.

4. Rebuilding the headquarters building (1.6 billion yen)
Enhancing the co-creation capabilities of sales and development sections while promoting
renewable energy
 Slated for completion in March 2023, the new headquarters building will take advantage of naturallighting and ventilation and reflect consideration for health, renewable energy, energy conservation,and reduced CO2 emissions.
Selected by MLIT as a leading project for sustainable buildings (energy conservation and reduced
CO2 emissions)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

26

Progress on Investment Plans (2)Five-year plan
5. Rebuilding the Osaka Plant (Higashi-Osaka, Osaka Prefecture)
Together with a scrap-and-build project to rebuild the plant on the current site, partial transfer of
production functions to nearby site under consideration
Currently, a basic construction plan is being formulated with outside consultants.
We will commence demolition work after selecting a general contractor and applying for andobtaining the necessary permits.
We plan to disclose information on matters such as construction timetables, amounts invested, andpotential impact on future business results as soon as they are finalized.
This project will lessen our environmental impact and improve production efficiency through laborsaving, energy saving, and mechanization.

6. Renovation of the Nara Plant (Yamatokoriyama, Nara Prefecture)
Multiple renovation plans have been drawn up.
We are reviewing the specifics, including facilities adopted and potential returns on investment.

Copyright© 2022 The Pack Corporation. All Rights Reserved.

27

Returns to Shareholders

Maintaining a dividend payout ratio of 25% or better<Payout ratio>

(%)

60.0

47.6

40.0
33.6

32.6

2021

2022
(Forecast)

22.6

20.0

0.0
2019

2020

◆ We plan to pay annual dividends of 60 yen in 2022, seeking to strike a balance
between returns to shareholders and strategic investment in growth.
Copyright© 2022 The Pack Corporation. All Rights Reserved.

28

Sustainable Development Goals (SDGs) Initiatives (1)1. Enhancing sales of The Pack Forest® products
Striving to protect the global environment alongside our customers by contributing a
portion of sales to The Pack Forest Environment Fund

2. Enhancing sales of Forest Stewardship Council® (FSC®)-certified products
Contributing to forest conservation
25<Sales of The Pack Forest® products> (100 million yen)
H1 (Jan.-June)
H2 (July-Dec.)

20
15
10

16

15

13
9

Projected
18

FY19/12H1 (Jan.-June)
H2 (July-Dec.)

Initialtarget

48

11

18

4

5

FY20/12

FY21/1240

80
FY22/12

FY22/12targetProjected
75
66

10

5
0

<Sales of FSC-certified products> (100 million yen)

80

9
6

120

28
17
11

38

Initialtarget28

37

32

FY21/12

FY22/12

FY22/12target38

30
18

FY19/12 FY20/12(FSC® C020517)◆ Sales of The Pack Forest® products are trending higher thanks to efforts to promote eco-friendly materials.
◆ Boosted by growing environmental awareness among consumers and growing recognition of the
FSC-certified logo, sales of FSC-certified products have trended significantly better than the initial 2020
target (3.2 billion yen).
Copyright© 2022 The Pack Corporation. All Rights Reserved.

29

Sustainable Development Goals (SDGs) Initiatives (2)3. CO2 emissions reduction initiatives
A new headquarters building whose design reflects consideration of measures to conserve
energy and reduce CO2 emissions is slated for completion in 2023.
In rebuilding the Osaka Plant, we will make progress on the use of renewable energy aspart of efforts to reduce our environmental impact.

4. Action plan for promoting women in the workplace① Increasing the percentage of permanent full-time employees who are women to 25% or
more② Increasing the percentage of managerial personnel (managers and above) who are
women to 10% or more
400

200

<Proportion of women among
permanent full-time employees>

267
persons
21.0%

264
persons
21.2%

262
persons
21.9%

40

299
persons
25.0%<Proportion of women among
managerial personnel>

20
16
persons
5.7%

22
persons
7.6%

21
persons
8.0%

FY20/12

FY21/1229
persons
10.0%

00
FY19/12

FY20/12

FY21/12

FY22/12targetFY19/12

FY22/12target◆ Actual results in the period ended June 2022 show gains in both numbers and percentages (number
and percentage of women among permanent full-time employees: 265, 22.3%; number andpercentage of women among managerial personnel: 25, 9.2%)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

30

ESG Initiatives
1. Establishing the new Sustainable Business Team
Formulating a basic policy on sustainable management and a list of priority
topics (materiality)
With regard to TCFD recommendations, during FY2022, we also plan toestablish a promotion structure; carry out scenario analysis (review andidentification of anticipated climate change risks and opportunities andassessment of their importance); and formulate GHG reduction targets and
KPIs.

2. Investments in ESG
Promoting investments in ESG projects related to our management policies
and core businesses as part of sustainable management initiatives
2022 results: Japan Student Services Organization (social bonds)
Z Energy (carbon-neutrality fund)

3. Enhancing governance
Developing a governance structure as required under the Corporate
Governance Code, in accordance with our migration to the TSE Prime Market
Increasing the ratio of outside directors to one in three by increasing thenumber of directors by one
Copyright© 2022 The Pack Corporation. All Rights Reserved.

31

About the New Medium-Term Management Plan

Plans call for formulating a new Medium-Term
Management Plan during FY2022 to take effectbeginning FY2023. This plan will be linked to ourbasic policy on sustainable management.

Copyright© 2022 The Pack Corporation. All Rights Reserved.

32

4. Reference
Materials

33

Corporate Overview
Name

THE PACK CORPORATIONFoundedMay 1952 (shares listed September 1991; listed on TSE Prime Market April 2022)

Headquarters

OAP Tower 20F, 1-8-30 Temmabashi, Kita-ku, Osaka City, Osaka 530-6020, Japan

Lines ofbusiness

Planning, manufacturing and sale of paper bags, folding paper cartons, corrugated boxes,
film packaging, etc.

Executives

Hideaki Yamashita, President and CEO, eight other directors (including three outside
directors), and four auditors (including two outside auditors)

Number of
employees

1,186 consolidated, 838 nonconsolidatedGroup
companies

Eight consolidated subsidiaries (in Japan, the United States, and China)

Main banks

MUFG Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Trust and Banking
Corporation, Sumitomo Mitsui Trust Bank, Mizuho Bank

Main
shareholders

Morita Memorial Welfare Foundation 10.95%, BBH for Fidelity Low-Priced Stock Fund(principle all-sector sub-portfolio) 7.77%, The Master Trust Bank of Japan (trust account)
7.19%, partner companies’ stock ownership program 6.52%, Custody Bank of Japan (trust
account) 4.89%, Custody Bank of Japan (trust account 4) 4.63%, Custody Bank of Japan(Resona re-trust account/Hokuetsu Corporation retirement benefits trust account) 3.27%,
Daio Paper Corporation 3.02%, MUFG Bank 2.60%, Shichijo Paper Trading 2.50%(As of the end of June 2022)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

34

The Pack Group (Eight Consolidated Subsidiaries)
The Pack Corporation
Headquarters(Osaka)Tokyo Head
Office Building

Osaka Plant

Nara Plant

Tokyo Plant

Ibaraki Plant(All sites have earned ISO 9001 and ISO 14001 certification.)
Domestic subsidiaries
Keihin Tokushu
Printing Corp.

Nikko Print
Corporation

Pack Takeyama Co.,Ltd.

Nishinihon Printing
Co., Ltd.

Kannaru Printing
Co., Ltd.

Offset printing machine

Overseas subsidiaries
Consolidated subsidiaries in China
The Pack (Changshu) Co., Ltd.

The Pack(Shanghai)
Corporation

U.S. consolidated
subsidiary

The Pack
America
Corporation(As of June 2022)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

35

Trends in Net Sales and Ordinary Profit (Consolidated) fromthe Company’s Founding (1952) through 2021
(Million yen)
100,000

10,000Net sales (left axis)

Ordinary profit (right axis)

90,0009,000

80,0008,000

70,0007,000

60,0006,000

50,0005,000

40,0004,000

30,0003,000

20,0002,000

10,0001,000

001952 1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

Copyright© 2022 The Pack Corporation. All Rights Reserved.

2005

2010

2015

2021

36

Distribution Structure for Major Products
Consumers
Main buyers

Department
storesConvenience
storesSupermarkets
and drug stores

ApparelPharmaceuticals
and cosmetics

Sundries

Food productsHome electronics
and home
installations

e-commerce(mail order)etc.

Raw materials makers

Paper, fabric, plastic film

Ink

Adhesive

Other
parts andmaterials

Copyright© 2022 The Pack Corporation. All Rights Reserved.

etc.

37

The Pack’s Strengths (1)Strength

1. A wide-ranging
customer baseSpecifics◆ Transaction counterparties:
approx. 14,000 companies
Food products, department stores,
specialty stores, large retailers, generalretailers, convenience stores, fast food,apparel, home electronics manufacturers,
e-commerce, etc.

Second quarter of year ending
December 31, 2022

 A customer base resistant to thenegative effects of downturns
 Food products
in specific industries
 Convenience stores Home electronics andhome installations

 Apparel Pharmaceuticals
and cosmetics
 Life care

 Department  Supermarkets
storesand drug stores e-commerce  Sundries(mail order)
 Automotive Other

Apparel and other goods

e-commerce

Food products
Copyright© 2022 The Pack Corporation. All Rights Reserved.

Consumer industries
38

The Pack’s Strengths (2)Strength

2. A total packaging
solutions provider

Specifics◆ (Full support structure)
Solutions proposed by joint efforts of the sales, research and planning,
engineering, and design sections◆ (Thorough expertise and access to large body of information)
Operating one of Japan’s largest packaging labs
 Delivering consulting-based solutions in response to thewide-ranging needs of customers

Packaging lab
Copyright© 2022 The Pack Corporation. All Rights Reserved.

39

The Pack’s Strengths (3)Strength

Specifics

3. Integrated manufacturing, sales, andlogistics structure

The Pack Group

Manufacturing

Printing plant

Paper bag plant

Film packaging
plant

Paper cartonsplant

Direct sales structure
Hokkaido Branch
Aomori Sales OfficeNiigata Sales Office

Keihin Tokushu Printing Corp.

Headquarters, division
Branch, sales officeSubsidiary

Matsumoto Sales Office
Tohoku Branch

Kanazawa Sales Office
Kyoto BranchTokyo Plant
Tokyo Head Office Building

Kobe Branch
Yonago Sales Office

Ibaraki Plant
Kanto Branch
Yokohama Branch

Okayama Branch
Hiroshima Branch

Shizuoka Sales Office
Nagoya Branch

Fukuoka Branch

Pack Takeyama Co., Ltd.

Nishinihon Printing Co., Ltd.
Nagasaki Sales Office
Kumamoto Sales Office
Kagoshima Sales Office

Okinawa
Sales OfficeCorrugated board plant

Takamatsu
Sales Office
Shikoku Branch
Oita Sales OfficeOsaka Plant
Nikko Print Corporation
Kannaru Printing Co., Ltd.
Nara Plant
Headquarters (HQ)

Teamwork among our four domestic plants, Group
companies, and subcontractor plants also helps manage
the risk of disasters and accidents.

Nationwide direct sales structure
Logistics

Products

Customers across Japan

Copyright© 2022 The Pack Corporation. All Rights Reserved.

40

The Pack’s Strengths (4)Strength

4. Quality control
structure

Specifics◆ Groupwide quality management systems are ISO 9001-certified.
◆ The Tokyo and Osaka plants have earned FSSC 22000

international food-safety management system
certification.
◆ Based on a policy of improving customer satisfaction through enhanced
quality, we strive to earn customer trust by delivering safe, reliable products.
◆ Delivering packaging materials, supplies, and other products as anintegrated service
 Streamlined logistics based on bulk deliveries also

helps cut CO2 emissions.
Example ofordering services◆ Offering Pack-Web web-ordering
services

Customerheadquarters

Packagingmaterials

Product
registration andrevision
Order lists

Customer stores

Officematerials
Supplies⇒ Streamlining customers’(Internet)

Store Aordering operations

Items handled

5. IT-driven customer
networks

Ordering
instructions

Customerorder(Internet)

Store B

Our logistics center

Our system
Ordermanagement

Store C

Delivery toeach store

Copyright© 2022 The Pack Corporation. All Rights Reserved.

Our production plans

Status of order receipt
Restocking management

and purchasing sections

41

ESG Initiatives (1)Initiatives

1. Environmental
initiatives

Specifics◆ All plants and sites in Japan had earned ISO 14001 certification as of 2006.
◆ We are implementing a wide range of initiatives, including measures to cut
CO2 emissions and waste volumes and to develop eco-friendly products.
◆ We fulfill our obligations as a core member of the Japan Clean Ocean
Material Alliance, which promotes activities across the economy to develop
and promote innovative substitutes based on public-private partnerships toreduce ocean plastic waste.

Relationshipto the SDGs

* 2021 figures
Copyright© 2022 The Pack Corporation. All Rights Reserved.

42

ESG Initiatives (2)Initiatives

2. Activities of The
Pack Forest
Environment Fund(forestconservation
activities)

Specifics◆ In 2000, we established an independent Forest Environment Fund and launchedvolunteer activities to plant and thin forested areas.
◆ We contribute a portion of the sales from eco-friendly products to the Forest
Environment Fund.
◆ Operation of the Fund is subcontracted to the nonprofit Eco Future Fund (EFF).
◆ We carry out forest conservation activities with the participation of not just The
Pack employees, but customers and the general public.

The Pack Forest
Mark

Relationshipto the SDGs

Eco Future Fund

Funds contributed
Trees planted
Total participants
Planted land area

CO2 emissions absorbed(Activities)
Copyright© 2022 The Pack Corporation. All Rights Reserved.

171 million yen
20,465
6,907
21.8 Ha
1,702.08 t(Totals as of the end of June 2022)
43

ESG Initiatives (3)Initiatives

3. Human Resource
Development andWorkplace
Development

Specifics◆◆

In accordance with our Company Motto, “Passionate and Dedicated to Our Partnerships,”and our Corporate Philosophy, “We Value and Nurture People,” we are implementing
initiatives to contribute to employee welfare, including human resource development,
support for childcare and long-term care, and employment stability.
We are enhancing our human resource development structure in various ways, including
training that accounts for year of employment, training by position,and training to enhance abilities in the workplace.
Recognized as a 2022 Certified Health & Productivity Management
Outstanding Organization
We strive to maintain and improve employee health and raise
individual health consciousness

Educational structural diagram
Training by yearof employment

Training by position

Manager training

Relationshipto the SDGs

Skills improvement

Senior supervisor
training

Third-year training
On-the-job trainer
training

Follow-up training

Follow-up training
one year after
joining theCompany

Training for
women employees

New hires

Second year

Fourth year

Training for new
hiresManager ability
training

Seniormanagement
training

Sales/
manufacturing
human resource
exchange training
Internal educationalcourses(Basic courses)

Fifth and later years Senior supervisors

Book reports(Fifth through seventh years)

Managers

Department managers,
general managers

Training to enhance workplace
abilities(Manufacturing managerial personnel
and candidates for manufacturing
managerial positions)

All employees: Skills improvement training program (languages [English, Chinese], bookkeeping, computer skills, etc.)
Mental health, harassment issues, career training

Copyright© 2022 The Pack Corporation. All Rights Reserved.

44

ESG Initiatives (4)Specifics

Initiatives

4. Environmental
education◆ As part of our environmental education initiatives, in cooperation with the cityof Higashi-Osaka, we organize hands-on manufacturing classes atelementary schools.

Relationshipto the SDGs

5. Community
contribution
activities◆ We’re developing a structure under which individual employees can join theircommunities in making contributions.
◆ Voluntary employee participation increases motivation to contribute to thecommunity and helps strengthen employee abilities.
◆ Cleanup activities near the site

◆ Donating children’s books

Relationshipto the SDGs

Copyright© 2022 The Pack Corporation. All Rights Reserved.

45

Note
This document is intended to provide information on management policies and business results for the second quarter of the year ending
December 31, 2022. It is not intended to solicit investment in securities issued by the Company. In addition, this document was preparedbased on data as of the end of June 2022.
Views, forecasts, and other information contained in this document are based on the Company’s judgments at the time the document was
prepared. No guarantees are made concerning the accuracy or completeness of such information. The contents of this document are

subject to change without notice.

Address IR inquiries to:
IR & Public Relations Department, The Pack Corporation
2-8-4 Tomigaya, Shibuya-ku, Tokyo 151-0063, Japan
Tel.: +81-3-3469-1221; fax: +81-3-3469-1353
E-mail: koho@thepack.co.jp
46