THE PACK CORPORATION

Briefing Materials on
Business Results for the Year
Ended December 31, 2022 andthe New Medium-Term
Management Plan
(FY2023 to FY2025)
February 27, 2023

Contents

Topics

P. 2

1. Business Results of the Year Ended
December 31, 2022

P. 3

2. Forecasts of Business Results
for the Year Ending December 31,
2023

P. 17

3. New Medium-Term Management Plan P. 21(FY2023 to FY2025)
4. Reference Materials

P. 32* The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29), etc. has been
applied since the beginning of the consolidated fiscal year under review. This standard and theassociated provisions have been applied retroactively to figures for the fiscal year ended
December 31, 2021. They have not been applied to figures for the fiscal year ended December
31, 2020 or preceding fiscal years.
Copyright© 2023 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, and tourism and inbound demand also
improved◼ Sales were strong for packages for the e-commerce sector (mainly corrugated boxes and deliverybags) and packages for the food delivery and takeout market (mainly primary food containers).
— Sector growth attributable to changing lifestyles in response to COVID-19 continued.
Market conditions and management policies◼ Continuing trend toward reduced use of plastics and use of plastic alternatives— Develop and actively propose paper and other eco-friendly materials.
◼ Trend toward modifying packages practices to reduce CO2 emissions and optimizing supply chains— Strengthen proposals to boost transport efficiency.
— Respond to shift from overseas to domestic production.
◼ The downward trend in demand for external packages for disposable diapers is bottoming out.
Demand for film packaging for food products and everyday use items is trending up.
— Cultivate customers through eco-friendly proposals. Examples include waste material utilizationand paper migration. Develop eco-friendly film packaging.
◼ The e-commerce sector continues to expand.
— Increase sales on a sustained basis by formulating solutions and proposals for customers,
including for labor and energy savings, and promote mechanization.

Medium- to long-term management strategies◼ Formulated new Medium-Term Management Plan (FY2023 to FY2025)
Copyright© 2023 The Pack Corporation. All Rights Reserved.

2

1. Business Results of the Year Ended
December 31, 20223

Summary of Business Results
Major increase in sales and profits thanks in part to improved consumer spending and economic activity(Million yen)

Year ended December
31, 2021

Year ended December 31, 2022

ActualActualYoY change

Net sales

79,69089,06011.8%

Operating profit

4,144

5,972

44.1%

Ordinary profit

4,422

6,353

43.6%

Profit attributable toowners of parent

2,824

4,058

43.7%

◆ Consumer spending grew as more people ventured out following the lifting of restrictions.
◆ Sales grew thanks to the development and expanded sales of eco-friendly products, as well as to an increase in orders
driven by solutions proposals.
◆ While costs increased, operating profits recorded major growth thanks to increased sales volumes and higher averagesale prices.
Copyright© 2023 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.
(Million yen)

Increased
Highersales
average salevolumes
prices+2,116+2,895Higher raw
HigherHigher labor Higher
material
other
costs
logistics
costs
manufacturcosts
ing
expenses-1,554

-364

-609

-480

Higher otherselling, generalandadministrative
expenses-177

Year ended
December 31, 2021

Year ended
December 31, 2022

OperatingprofitOperatingprofit

4,144

5,972

◆ Sales volumes grew due to the recovery in consumer spending, centering on paper bags (up 10.5%).
◆ Average sale prices rose due to changes in product structures, efforts to optimize prices, and proposal-based sales forhigh value added products (paper bags up 7.8%, paper cartons up 15.8%, corrugated boxes up 8.8%, plastic bags up
2.1%)◆ Manufacturing costs rose due mainly to higher utilities and power costs (352 million yen) accompanying rising electricity
charges and heavy oil prices.
◆ Logistics costs increased due mainly to rising warehouse storage costs (211 million yen) and transportation charges (265million yen) driven by growth in manufacturing and shipping volumes.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

5

Results by Segment(Million yen)

Year ended December 31, 2021
Net sales
Paper
Products
Paper bags
Papercartons
Corrugatedboxes
Printing
Film
Packaging
OthersOperating profit
Paper
Products
Film
Packaging
OthersAdjustments

Year ended December 31, 2022

ActualShare

ActualShare

YoY change

79,690100.0%

89,060100.0%

11.8%

55,49869.7%

62,932

70.7%

13.4%

22,032

27.7%

26,252

29.5%

19.2%

19,49724.5%

22,283

25.0%

14.3%

11,85014.9%

12,210

13.7%

3.0%

2,117

2.7%

2,186

2.5%

3.2%

11,18414.0%

11,988

13.4%

7.2%

13,0084,144

16.3%
100.0%

14,1385,972

15.9%
100.0%

8.7%
44.1%

3,958

95.5%

5,333

89.3%

34.7%

397

9.6%

583

9.8%

47.0%

882
-1,093

21.3%-26.4%

1,059-1,00417.7%-16.8%

20.0%-◆ The Paper Products Business recorded sales and profit growth thanks to growth in consumer spending and tourism demand as
well as strong sales of paper cartons for delivery and takeout foods and strong sales of paper cartons and corrugated boxes forthe e-commerce sector.
◆ Strong sales of paper bags at overseas Group companies◆ The Film Packaging Business saw higher sales and profits as the result of energetic sales of film packaging for food products,
cultivation of existing customers, and price revisions.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

6

Trends by Segment
Net sales(Paper Products Business)

6,924

Net sales(Film Packaging Business)

Net sales(other businesses)(Million yen)

8,000

6,850

5,972

3,275
100,000

Operating profit

93,126

95,502

15,512

15,483

19,641

19,666

6,000

4,144

4,000
2,000

89,06080,00060,00078,44579,69013,57413,00813,4840

14,138
11,988

11,18440,00057,97260,353

Year ended December
31, 2018

Year ended December
31, 2019

51,38655,49862,93220,0000Year ended December
31, 2020

Year ended December
31, 2021

Copyright© 2023 The Pack Corporation. All Rights Reserved.

Year ended December
31, 2022
7

Sales Composition
Net sales by business
1.2
Year ended
December 31,
2021

26.2

15.4

Year ended
December 31,
2022

27.1

16.5

Food products
Convenience storesHome electronics and home installations

5.1

5.0

ApparelPharmaceuticals and cosmetics
Life careYear ended December 31,
2021

2.6

6.9

5.3

2.1 3.7 3.8

27.2

6.1

4.9

2.13.3 3.4

27.5

Department storese-commerce
Automotive

1.0

Year ended December 31, 2022

ActualShare

ActualShare

YoY change

Food products

20,86926.2%

24,149

27.1%

15.7%

Apparel

12,293

15.4%

14,709

16.5%

19.7%

Department stores

4,060

5.1%

4,449

5.0%

9.6%

Supermarkets and drug
stores

5,484

6.9%

5,390

6.1%

-1.7%

Convenience stores

976

1.2%

890

1.0%

-8.8%

Pharmaceuticals andcosmetics

4,234

5.3%

4,331

4.9%

2.3%

e-commerce *

2,060

2.6%

2,520

2.8%

22.3%

Sundries

1,696

2.1%

1,859

2.1%

9.6%

Home electronics andhome installations

2,961

3.7%

2,982

3.3%

0.7%

Life care

3,035

3.8%

2,985

3.4%

-1.6%

Automotive

312

0.4%

327

0.4%

4.8%

21,70427.2%

24,461

27.5%

10.2%

(Million yen)

Other

(%)

0.4

2.8

0.4

Supermarkets and drug stores
Sundries
Other◆ In the food products segment, sales were strongfor delivery and takeout foods due to the impact ofgrowth in the home meal replacement market andto recovery in sales of packages for the souvenir
market.
◆ Sales related to apparel and sundries grew due tostronger consumer spending after restrictions
were lifted and the increase in e-commerce rates.
◆ Department store sales remained firm, as more
people ventured out and inbound demand
improved.
◆ In the supermarket and drug store segment, salesof items supplied by the Company were sluggish
due to a rebound from special COVID-19-related
demand and higher prices.
◆ 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.
◆ In the life care segment, the decline in sales ofexternal packages for disposable diapers ran its
course.

* e-commerce refers to the e-commerce platform segment. e-commerce sales on vendor sites are counted as part of their individual business segments.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

8

Paper Products Segment
Industry environment

Trends in net sales and operating profits◆ Demand for packages at stores is growing as more people
venture out following the end of restrictions.
◆ The e-commerce rate continues to increase in various
categories, including apparel, food and cosmetics, generating
growing demand for packages for the e-commerce sector.
◆ Demand rose for delivery and takeout food packages
alongside continuing growth in the home meal replacement
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)

Operating profit (right axis)

70,00014,00062,93260,35360,00012,00055,49851,38650,00010,00040,0008,000

Initiatives◆ Ongoing efforts to make proactive proposals involving paper
packages and eco-friendly products for the e-commerce sector
and food delivery and takeout market◆ Promoting improvements in packaging material forms andspecifications and labor-saving, energy-saving, andmechanization solutions for automation of operation lines◆ Strengthening initiatives to develop new eco-friendly materials
and processes and paper materials with advanced functions

30,000

3,958

20,00010,000

2,000

0

0

10.0%
8.0%

9.6%
8.7%

6.0%

5.3%

6.8%

5.5%

4.0%
3.8%

3.6%

FY20/12

FY21/122.0%
FY19/12

FY21/12

FY22/12

4.0%
20.7%

3.8%
21.4%

Printing,3.5%
Corrugatedboxes,19.4%

33.5%

35.1%

Paper
cartons,35.4%

41.8%

39.7%

Paper bags,
41.7%

0%
FY22/12FY19/12
FY20/12
Copyright© 2023 The Pack Corporation. All Rights Reserved.

FY21/12

FY22/12Film Packaging Business

100%

Paper Products
Business,8.5%

80%
60%

7.1%
6.1%

FY20/12

Trends in the Paper Products Business’s share of net sales

Trends in operating profit margins
Paper Products Business
Other businesses

4,000

3,124

FY19/1212.0%

5,333 6,000

5,265

Other
businesses,7.5%

40%

Film Packaging
Business,4.9%

20%

3.7%
17.4%
30.4%

48.5%

9

Paper Products Segment (Paper Bags)
Industry environment

Trends in operating profit margins◆ Demand for takeout paper cartons improving with more people
venturing out◆ Growing demand for paper bags thanks to growing
environmental awareness→ Increasing cases of customers changing from conventional
materials to more eco-friendly materials◆ Growing use of delivery bags with the expanding e-commercemarketNet sales (left axis)
30,000Operating profit (right axis)

29,2646,000
26,25225,0005,000
21,471

22,03220,000

4,000
3,239

Initiatives◆ Developing new shapes, centering on delivery bags, andformulating proposals to allow customers to achieve labor andenergy savings and implement mechanization◆ Strengthening proposals for high value added products
centering on eco-friendly products→ Making proposals in line with the businesses and needs ofcustomers, including effective use of waste materials
generated in customers’ product manufacturing processes

3,019

15,000

3,000
2,092

10,000

2,000

1,713

5,000

1,000

0

0
FY19/12◆ Examples of developed products(Million yen)

FY20/12

FY21/12

FY22/12

Trends in sales volumes(Million yen)

2,000

1,733
1,349

1,464

0
▲ Paper delivery bag compatible with
FY19/12
FY20/12
automatic packaging machines
Copyright© 2023 The Pack Corporation. All Rights Reserved.

FY21/12

1,500

1,618

1,000
500
▲ Mixed paper with used clothes

FY22/1210

Paper Products Segment (Paper Cartons)
Industry environment

Trends in operating profit margins◆ Growing demand for primary paper cartons for food products
thanks to growth in the home meal replacement market andgrowing environmental awareness◆ Recovery in consumer spending for travel and leisure after
decline due to COVID-19 restrictions; inbound demand also
improving→ Strong sales of paper cartons for the souvenir market

Net sales (left axis)

Operating profit (right axis)

25,0005,000
22,28320,00019,49718,361

4,000

17,237

15,000Initiatives◆ Strengthening capital investment and new productdevelopment initiatives to bolster sales of primary paper
containers for food products◆ Strengthening proposals for paper carton engineering anddesign, and molded carton shapes via 3D printers, 3Dcomputer graphics, and other technologies

3,000

10,000

1,574
1,237

864

5,000

2,000

1,079
1,000

0

0

FY19/12

FY20/12

FY21/12

FY22/12◆ Examples of technologies used inproposals◆ Examples of developed products▲ Kome-kami TP-FS, a paperboard
made with waste rice, developed
jointly with Papal Co., Ltd.

(Million yen)

▲ Molded tray packages sealed withpaper lids

▲Tapered paper trays▲ Design/shape proposal tool
using 3D computer graphics

Copyright© 2023 The Pack Corporation. All Rights Reserved.

▲3D printer11

Paper Products Segment (Corrugated Boxes)
Industry environment◆ Slight increase in production in the corrugated box industry
overall (up 0.3% YoY)*→ By use, consumption for e-commerce/delivery/moving was
up 2.6% YoY.*◆ Growing demand for corrugated boxes for delivery with growthin e-commerce market→ Growing need for delivery boxes that fit inside mailboxes
and delivery boxes with simple packaging, opening, anddisposal→ Expanding e-commerce gift market

Trends in operating profit margins
Net sales (left axis)

Operating profit (right axis)

15,000(Million yen)

3,000

12,21011,85010,514

10,625

10,0002,000*Reference: “Corrugated Box Statistics,” Japan Corrugated Case Association

Initiatives◆ Proposing added value based on special reinforced corrugatedbox materials, large-format printers, decorative printers, anddesign capabilities→ Numbers of patent and design applications for corrugated
box-related materials: 7 patents, 5 designs (cumulative
2019-2022)

5,000

557

1,000

711

678

FY21/12

FY22/12451

00FY19/12

FY20/12◆ Examples of developed products▲ Eco Rack
corrugated containers▲ Extra-large corrugated boxes—among thelargest corrugated products in Japan▲ CC-PACK cushioned packages featuringflexibility and cushioning achieved using
thicker materials

Copyright© 2023 The Pack Corporation. All Rights Reserved.

▲ OK!BOX is easily opened
without a cutter

12Film Packaging Segment
Industry environment

Trends in operating profit margins◆ Declining use of disposable diapers for children. Use of adult diapers
is growing as the population continues to age.
→ Overall production in the diaper industry is projected to increase.
◆ Growing demand for microwavable food and food products with longshelf life
→ Growing need for high-performance materials (with barrier
properties, etc.)◆ Growing numbers of requests for proposals related to ecofriendliness(Recycling of factory scraps, eco-friendly materials, CO2 reductions,etc.)

Initiatives◆ Making energetic proposals involving eco-friendly film packaging for
food, beverage, and e-commerce markets focusing on combined
sales of paper cartons and corrugated boxes◆ Growing sales by leveraging eco-friendly multicolor printing with thelatest 10-color flexographic printers (introduced in FY2022)◆ Developing paper film packaging and other eco-friendly products(Million yen)

20,00019,6662,000
Net sales (left axis)

15,000Operating profit (right axis)

1,500

13,484
11,184

11,9881,042
10,000

1,000

583

511
5,000

500

397

0

0
FY19/12◆ Examples of developed products

FY20/12

FY21/12

FY22/12

Trends in sales of film packaging(Million yen)

2,000

1,500

1,830
1,371

1,316
1,144

1,000

500
▲ Craft Clear, see-throughpaper film packaging▲ Craft VM Barrier, paper film
packaging with light shielding
and high barrier properties▲ Water-resistant paper Craft
Pouch suitable for boiling0
FY19/12

Copyright© 2023 The Pack Corporation. All Rights Reserved.

FY20/12

FY21/12

FY22/1213

Other Businesses
Industry environment◆ Declining demand for in-store supplies and office supplies
due to changing formats in the department store industry→ Recovering from COVID-19 sales downturns◆ Growing demand for reusable soft bags (made usingmaterials such as cotton, polyester, and nonwovens)◆ Growing need for eco-friendly migration of plastic
packaging (food trays, etc.)

Trends in operating profit margins(Million yen)

20,0004,000

Net sales (left axis)

Operating profit (right axis)

15,48315,00014,138

13,5743,000

13,008Initiatives◆ 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◆ Strengthening new product development initiatives,
including food trays made of eco-friendly materials andsoft bags with recycled materials

10,000

2,000
1,492
1,059

5,000

748

1,000

0

0
FY19/12◆ Examples of developed products

882

FY20/12

FY21/12

FY22/12◆ PAS (Pack Assortment Service System)
Ordering data

Customers,
stores

Delivery, invoices▲ ecoKARA™ tray, a biomass tray
containing eggshells

Delivery vendor

Bulk
delivery▲ Recycled Tetron Cotton, a material made byrecycling materials such as cotton and polyester
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© 2023 The Pack Corporation. All Rights Reserved.

14

Balance Sheet(Million yen)

Year ended
December 31, 2021

Year ended December 31, 2022

ActualActual

87,422

94,365Current assets

55,43861,484Non-current assets

31,98432,881

22,65823,729

643

1,044

8,682

8,106

25,39028,994

22,27926,054

3,110

2,939

62,03265,371

Shareholders’ equity

60,654

63,713

Accumulated other comprehensive
income

1,300

1,611

Share acquisition rights

63

46

Non-controlling interests

13-

AssetsProperty, plant, and equipment

Intangible assets
Investments and other assets
Liabilities
Current liabilities
Non-current liabilities
Net assets

Copyright© 2023 The Pack Corporation. All Rights Reserved.

15

Cash Flow
(Million yen)

Year ended
December 31, 2021

Year ended December 31, 2022

ActualActualCash flows from operating activities

7,217

5,380

Profit before income taxes

4,214

5,925

Depreciation and impairment losses

2,138

2,315

Cash flows used in investment activities-3,460-3,762

Purchase of property, plant, andequipment-3,219-3,109Purchase of intangible assets

-514

-433

Purchase of investment securities-136-2,357

Proceeds from sales of investment
securities

135

204

Cash flows used in financing activities-1,029-1,124-1,045-1,04318,067

18,653Main items

Cash dividends paid
Cash and cash equivalents at end of
period◆ Depreciation and impairment losses include 323 million yen in impairment losses on fixed assets at the Tokyo Plant
and The Pack (Changshu) Co., Ltd.
◆ Purchases of investment securities increased, including investments in long-term investment bonds and renewableenergy funds.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

16

2. Forecasts of BusinessResults for the YearEnding December 31, 2023

17

Forecasts of Business Results
Growth in sales and profit driven by providing value to the environment, society and economy in response to changing markets(Million yen)

Year ended
December 31, 2022

Year ending
December 31, 2023

ActualForecast of businessresults

Forecast YoY change

Net sales

89,06094,0005.5%

Operating profit

5,972

6,400

7.2%

Ordinary profit

6,353

6,800

7.0%

Profit ttributable toowners of parent

4,058

4,400

8.4%

◆ In FY2023, economic activity is expected to proceed alongside the COVID-19 pandemic, whose impact is expected to persist.
◆ Continuing growth is expected in the e-commerce and food takeout and delivery markets. Steady trends are projected for related
products.
◆ As a total packaging solutions company, we will target sales and profit growth by energetically formulating and proposing proposals
for eco-friendly packaging as well as labor and energy savings and mechanization to solve issues facing customers and society.
Copyright© 2023 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 ended
December 31,
2022

Year ending
December 31,
2023 (forecast)

Net sales

95,50278,44579,69089,06094,000Operatingprofit

6,850

3,275

4,144

5,972

6,400

Trends in net sales

Trends in operating profit(Million yen)

(Million yen)

10,000150,000

6,850
100,000

95,502
89,06078,4456,400

94,0005,972

79,690
5,000

4,144
3,275

50,00000FY19/12

FY20/12

FY21/12

FY22/12

FY23/12(forecast)

FY19/12

FY20/12

Copyright© 2023 The Pack Corporation. All Rights Reserved.

FY21/12

FY22/12

FY23/12(forecast)19

Major Factors Underlying Projected Changes in Operating Profit
Growth in profit mainly from increased paper product sales volumes and improved sales(Million yen)

Increased
sales
volumes

Higher averagesale prices

Higher raw
material costs

Higher othermanufacturing expenses

Higher labor
costs

Higherlogistics
costs

Higher otherselling, generaland administrative
expenses+1,900+2,200-2,000

-500

-500

-400

-272

Year ended
December 31,
2022

Year ending
December 31,
2023

OperatingprofitOperatingprofit (forecast)

5,972

6,400

◆ Growth in sales volumes centering on paper bags and paper cartons thanks to recovering consumer spending associated with
inbound demand and in connection with leisure and travel◆ Increased sales volumes for corrugated boxes, paper cartons, and related products for the e-commerce market and food delivery
market, which continue to grow◆ Higher sale prices achieved through proactive proposals involving eco-friendly products and high value added products, startingwith paper materials, as well as price optimization◆ Responding to increases in raw material prices by cutting logistics and other costs and shifting higher prices to sale prices throughproposals to change item specifications, etc.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

20

3. New Medium-Term Management Plan
(FY2023 to FY2025)

21

Review of Previous Medium-Term Management Plan
(FY2020 to FY2022)
Assessment

StrategyPapercartons◆ Strengthen sales of paper cartons.
From brick-and-mortar stores toaccommodating e-commerce
Promote proposal-based sales
activities.

◆ Initiatives related to the migration
to paperIncrease sales of easy-to-recycle
Paper bags
products.
Increase sales of Forest® and
FSC® products.
Corrugated
boxes

Other

◎
●Markets of special
interest
Food products market
Pharmaceutical market
Cosmetics market
Health foods market
E-commerce market〇◆ Strengthen sales.
From brick-and-mortar stores toaccommodating e-commerce
Promote proposal-based sales.

◎◆ Expand business domains.
Initiatives for new businesses
Enter ASEAN markets, increase sales in Chinese market.

△◆ Increase productivity.
Backbone systems + manufacturing line labor and energy
savings△◆ Shareholder returns
Target dividend payout ratio of 25% or higher〇◆ Growth investment
Increase paper manufacturing
System renovations (1.5capacity (7.0 billion yen)billion yen)
New businesses (6.0 billion yen) (5-year plan)
Rebuild headquarters building
Rebuild Osaka Plant(1.6 billion yen)
Augment Nara Plant△

Results◆ Sales growth in the food products
market, a market of special interest◆ Sales growth through acquiring newcustomers and initiatives for new
demand◆ Increased new orders through paper
migration◆ Increased development and sales of
eco-friendly products◆ Growth in orders of paper delivery bagsfor e-commerce and expanded sales ofrelated supplies◆ Increases orders through solutions
proposals◆ Maintained dividend payout ratio of 25%
or higher◆ Investment-related
 Investments to augment paper carton
capacity (2.5 billion yen)
 Completed construction of new
headquarters building, March 2023
 New system launch, scheduled forJuly 2024
 Introduced automated conveyancesystem for products/semifinishedproducts (100 million yen)

Copyright© 2023 The Pack Corporation. All Rights Reserved.

22

Review of Previous Medium-Term Management Plan
(FY2020 to FY2022)
Trends in operating profit margins
Net sales (left axis)
1,000

955
784

800

68

600

32

400

◆ The Company was affected by declining resultsin the distribution and retail industry, a major(100 million yen)customer base, due to the impact of state ofOperating profit (right axis)
emergency declarations and stay-at-home
100
890
requests during the COVID-19 pandemic.
796
Current results are steadily recovering
80
alongside the gradual resumption of economic
59
activity.
60◆
Product sales to new markets in line with41
lifestyle changes and business growth through40
solution proposals contributed to results.

200

20

0

0
FY2019FY2020

FY2021

Net sales by product type

Sales to the pharmaceutical and cosmetics markets(100 million yen)

292

300
200

183 172194

222

214220262

42
105 106118 122
13 11 13 18

Paper cartons

Paper bags

FY2019FY2020(100 million yen)

60
37

40

100
0

FY2022

Note: The targets for consolidated net sales, operating profit, EBITDA and
ROE, which were among the targets for the fiscal year ended
December 31, 2022 in the previous Medium-Term Management Plan,
were rescinded by the Board of Directors at the meeting held on
August 30, 2021.

Corrugated boxes
FY2021

Film packaging

42

43

FY2021

FY202220

0FY2019FY2020

FY2022

Sales to the food products market

Sales of eco-friendly materials(100 million yen)(100 million yen)

300

228
187

200

208

241

100
0

FY2019FY2020

FY2021

FY2022

100
75
50
25
0

94
66
48
15

12

16

21

Forest® products
FY2019FY2020

Copyright© 2023 The Pack Corporation. All Rights Reserved.

28

FSC® products
FY2021
FY202223

The Pack Group’s Management Policy
In 2023, the Company established its Purpose and Basic Policy on Sustainable Management and established a new management policy thatreflects the social and business environment.

PurposeManagement
Philosophy

Basic Policy on
Sustainable
Management

Materiality(Proprietary
topics)Mission of bolstering social prosperity and creating satisfaction
through packaging◆ Value people, nurture people.
◆ Accommodate every change in society.
◆ Fulfill social responsibilities, including initiatives to address global environmental problems.
◆ Contribute to the development and prosperity of society as a company that provides total packaging
solutions.
◆ Establish and administer the
Sustainable Committee.
◆ Response to materiality (proprietary
topics)◆ Resolve environmental issues through businessactivities.
◆ Value people, nurture people.
◆ Build and deepen trust with suppliers and customers.
◆ Contribute to the development and prosperity ofsociety.
◆ Strengthen management foundations.

Execute Important Strategies

Medium-Term
Management
Plan

Growth strategy

The Social and Business Environment of the Company(1) Growing uncertainty(2) Accelerating initiatives for ESG and the SDGs
(3) Growing difficulty in securing human resources(4) New demand generated by market changes(5) Accelerating digitalization(6) Expectations for business development in new domains(7) Expectations for safety and security(8) Expectations and obligations related to the disclosure ofnonfinancial information

Enhance and Effectively Utilize Management Resources

25 sales offices in Japan

Human capital strategy

Four plants in Japan

Domestic/
overseas supply chain

Financial strategy

Three overseas Group
companies

Five domestic Group
companies

Total production capability
Extensive know-how

Environmental response
capability

Professional packaging group

Comprehensive productlineupCopyright© 2023 The Pack Corporation. All Rights Reserved.

24

Promotion of Sustainable Management
Basic Policy on Sustainable
Management
Based on its Company Motto—Passionate and Dedicated to Our
Partnerships—the Group will practice sustainable management and has
established an official Purpose: Mission of bolstering social prosperity andcreating satisfaction through packaging. As a total packaging solutions
company, for the sake of the environment, society, and the economy, we
will create new value for packaging to solve the various issues of
stakeholders and to contribute to a more prosperous society that is bothsustainable and full of smiles. To this end, we will maintain systems thatallow us to accommodate any changes in society and grow in a sustainable
manner to provide value unique to the Group.

Sustainable Committee Establishment
and Administration
The Sustainable Committee (chairedby the president & CEO) has been
Board of Directors
established to promote sustainable
management at the Group. The
Consult
Respondcommittee will deliberate and makedecisions on the formulation of
Sustainable Committee
Chairman: President & CEO
policies related to the execution andpromotion of sustainable
management and important themes,
Sustainable Committee
progress management for initiatives,
Secretariat
and incorporation into the MediumTerm Management Plan. The
committee’s secretariat will
coordinate with each division and
Coordinate
Group company to promote actionplans and manage key performance
Divisions, Group companies
indicators, etc.

Response to Materiality (Priority Topics)
Environment
Solve environmental issues through businessactivities.
◆Plan products and develop technologies that reflect
environmental awareness.
◆Reduce overall environmental impact of business activities.
◆Contribute to nature protection and environmental
preservation.

SocialValue people, nurture people.
◆Promote employee health and ensure their safety.
◆Nurture and cultivate total packaging solutions capabilities.
◆Promote diverse work styles that allow employees to thrive.

Build and deepen trust with suppliers andcustomers.
◆Co-create brand value with customers.
◆Maintain and improve quality through collaboration with
suppliers.

Contribute to the development and prosperity ofsociety.
◆Contribute to the development of the next generation andraise awareness of the environment.
◆Solve diversifying social issues.

Governance
Strengthen management foundations.
◆Maintain management soundness, transparency, andefficiency.
◆Promote supply chain risk management.

Copyright© 2023 The Pack Corporation. All Rights Reserved.

25

Summary of New Medium-Term Management Plan
(FY2023 to FY2025)
SloganEvolution: Start of Purpose-Based Management and Sustainable Management

FY2025 Targets

Consolidated net sales: 10.7 billion yen
Operating profits: 7.0 billion yen ROE: 8% or higher ROIC: 8% or higher
New Medium-Term Management Plan Targets (FY2023 – FY2025)
Consolidated net sales (left axis)(100 million yen)

Operating profit (right axis)

1,200
1,000

955
784

800

940

890

796

68

600

70

67

80
60

41

32

400

100
64

59

120

1,070

1,000

40

200

20

0

0
FY2019FY2020

FY2021

FY2022

FY2023

FY2024FY2025(100 million yen)

FY2022
ResultFY2025 Target

Food products(*)

250

E-commerce, mailorder, logistics
General distribution,
retail, etc.

Total

FY2022Difference

FY2022
Change

320

+ 70

28.0%

140

180

+ 40

28.6%

500

570

+ 70

14.0%

890

1,070

+ 180

20.2%

FY2022 Result

FY2025 Target

ROE

6.4%

8% or higher

ROIC

6.4%

8% or higher(100 million yen)

FY2022
ResultFY2025 Target

262
222

Corrugated
boxes
Film
packaging
Other

Paper bags
Paper cartons

Total

FY2022Difference

FY2022
Change

315
270

+ 53
+ 48

20.2%
21.6%

122

150

+ 28

23.0%

119

145

+ 26

21.8%

162
890

190
1,070

+ 28
+180

17.3%
20.2%

* The food products category includes packages for food products atconvenience stores, supermarkets, etc.

Copyright© 2023 The Pack Corporation. All Rights Reserved.

26

Growth Strategies
Food products market (including convenience stores and fast food)◆ Increase sales of primary food containers.
◆ Develop materials and processes that help reduce environmental impact; increase sales of FSC®
products (FSC® C020517).
◆ Combined sales of paper bags and paper cartons with labels, films (film packaging), etc.
◆ Promote solution proposals that contribute to labor savings, streamlining, and automation atcustomers.
◆ Expand lineup of paper carton products.
◆ Initiatives for trays and molded containers, etc.

▲ Craft Clear, seethrough paper film
packaging▲ Craft VM Barrier, paper
film packaging with lightshielding and high barrier
properties▲ Water-resistant paper Craft
Pouch suitable for boiling

Copyright© 2023 The Pack Corporation. All Rights Reserved.

▲Trays for food products27

Growth Strategies
E-commerce, mail order market, logistics industry◆ Strengthen sales of delivery bags that increase transport efficiency for customers.
◆ Strengthen proposal-based sales that can help reduce labor requirements at customer facilities.

• Proposals for product designs that reduce work hours• Proposals for solutions for automating work processes◆ Develop materials and processes for automatic packaging and increase related sales.
◆ Further increase sales of reinforced corrugated boxes for heavy objects.

▲Delivery bags for e-commerce▲ Paper delivery bag compatible with
automatic packaging machines;
automatic packaging machine

Copyright© 2023 The Pack Corporation. All Rights Reserved.

▲ Reinforced corrugated box forheavy objects

28

Growth Strategies
General distribution and retail market, other markets◆ Increase paper bag share and continue pursuing proposal-based sales to promote paper migration.

◆ Along with product sales, combined sales with assembly and setup work
◆ Develop sales channels in ASEAN region.
◆ Product sales aligned with the 3 Rs (reduce, reuse, recycle)• Increase sales of eco paper, upcycled materials, and FSC® paper.
• Increase sales of eco bags and mono-material products.
• Develop original paper and films with 100% recycled materials.
◆ Promote social contributions with customers.
• Apply a portion of sales proceeds from eco-friendly products to promote forest conservation via
The Pack Forest Environment Fund and an NPO.

▲Eco paper, upcycled materials (Mixed Paper with used clothes)▲Flowchart for The Pack Forest Environment Fund

Copyright© 2023 The Pack Corporation. All Rights Reserved.

29

Human Capital Strategy
Growth and vitalization of individuals and the company
Secure diverse human resources.

◆ Strengthen mid-career hiring.
◆ Promote active participation of women (full-time employee andmanager ratios).
◆ Expand employment of people with disabilities.

Develop human resources.

◆ Enhance training programs.
◆ Support for self-initiated skill improvement and retraining

Optimize personnel assignments.

◆ Make effective use of the talent management system.
◆ Expand hiring opportunities (referrals, re-hires).

Develop optimal working environments. ◆ Diverse work formats and program enhancements◆ Well-being (promote health and productivity management)
Maximize employee engagement.

◆ Appropriate wage structure, enhancements to benefits◆ Raise management participation awareness by joining stock
ownership association.
◆ Energize employee interactions and communications.
◆ Conduct engagement surveys.

Personnel Plan (consolidated)
FY2022 result

FY2025 plan

30.0%
21.2%

1,797

22.2%

25.0%

20.0%

* Including full-time employees, contract
employees, and part-time employees

1,920 (+123)

21.9%

7.6%

10.0%

8.0%

9.6%

10.0%

0.0%
Proportion of women among permanent full- Proportion of women among managerial
time employees
personnel (manager and above)
FY2020
FY2021
FY2022
FY2025 target
Copyright© 2023 The Pack Corporation. All Rights Reserved.

30

Financial Strategy
Supporting efficient, continuous growth through optimal fundusage planning◆Nara Plant rebuild• Plan to acquire new land in Nara
Prefecture and build corrugated box
plant◆Priority allocation of funds for growth investment
Growthinvestment(1) Capital investment (2) Investment in new businesses(3) Human investment (4) Investment for system upgrading(5) R&D◆Osaka Plant rebuild

Shareholder ◆Maintain dividend payout ratio of 30% or higher
returns◆Flexible share buybacks• Plan to rebuild through scrap-andbuild on the current Osaka Plant site

Fund usage plan (FY2023 – FY2025 total)
Cash outflows

Cash inflows

Cash on hand

Capital investment
6.5 billion yen

Augment paper carton manufacturing capacity
2.0 billion yen
Augment paper bag manufacturing capacity 3.0 billion yen
Rationalization, labor savings
1.1 billion yen
Energy savings, resource savings
200 million yen
Other
200 million yen

Operating cash flow
Strategy investment
14.0 billion yen

20.0 billion yen

M&A
Backbone system upgrades
Human investment

10.0 billion yen
2.0 billion yen
2.0 billion yen

Shareholder returns
4.0 billion yen
Copyright© 2023 The Pack Corporation. All Rights Reserved.

31

4. Reference Materials

32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, 835 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%, The Master Trust Bank of Japan (trust account)
7.85%, BBH for Fidelity Low-Priced Stock Fund (principle all-sector sub-portfolio) 6.60%,
partner companies’ stock ownership program 6.56%, Custody Bank of Japan (trust account)
4.61%, Custody Bank of Japan (trust account) 4.61%, Custody Bank of Japan (Resona re-trust
account/Hokuetsu Corporation retirement benefits trust account) 3.28%, Daio Paper
Corporation 3.02%, MUFG Bank 2.60%, Shichijo Paper Trading 2.49%(As of the end of December 2022)
Copyright© 2023 The Pack Corporation. All Rights Reserved.

33

The Pack Group (Eight Consolidated Subsidiaries)
The Pack Corporation
Headquarters (Osaka)* Relocating to newbuilding in May 2023

Tokyo Head Office
Building

Osaka Plant

Tokyo Plant

Nara 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

Copyright© 2023 The Pack Corporation. All Rights Reserved.

(As of December 2022)

34

Trends in Net Sales and Ordinary Profit (Consolidated) fromthe Company’s Founding (1952) through 2022
(Million yen)

100,000

10,000Net sales (left axis)

Operating 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© 2023 The Pack Corporation. All Rights Reserved.

2005

2010

2015

2022
35

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© 2023 The Pack Corporation. All Rights Reserved.

etc.

36

The Pack’s Strengths (1)Strength

1. A wide-ranging
customer baseSpecifics
Year ended December 31, 2022

◆ Transaction counterparties:
approx. 14,000 companies
27.1%
27.5%
Food products, department stores,
specialty stores, large retailers, generalretailers, convenience stores, fast food,apparel, home electronics manufacturers, 0.4%
3.4%
2.1%
e-commerce, etc.
3.3% 2.8%
16.5%
1.0%
 A customer base resistant to the
4.9%
5.0%
negative effects of downturns
6.1%
 Food products Apparel Department  Supermarkets
in specific industries
 Convenience stores Home electronics andhome installations

 Pharmaceuticals
and cosmetics
 Life carestoresand drug stores e-commerce  Sundries(mail order)
 Automotive Other

Apparel and other goods

e-commerce

Food products
Copyright© 2023 The Pack Corporation. All Rights Reserved.

Consumer industries
37

The Pack’s Strengths (1)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 the wideranging needs of customers
Web Packaging Lab

Images of the packaging lab were captured with a
360-degree 3D camera to generate 3D data. The Web
Packaging Lab is a 3D space that can be exploredvirtually.

Packaging lab
Access to dedicated site

The floor can beselected (1F, 2F).

Tap on the circle
to proceed in that
direction.

Online Package Lab

Streaming our office and packaging lab.
Local staff serve as tour guides in real-time whilefilming.

Real-time streaming

Copyright© 2023 The Pack Corporation. All Rights Reserved.

38

The Pack’s Strengths (3)Strength

Specifics

3. Integrated manufacturing, sales, andlogistics structure

The Pack Group

Manufacturing

Printing plant

Paper bag plant

Direct sales structure
Hokkaido Branch
Aomori Sales OfficeNiigata Sales OfficeFilm packaging plant Paper cartons plant

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© 2023 The Pack Corporation. All Rights Reserved.

39

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 ofCustomerheadquarters

ordering services◆ Offering Pack-Web web-ordering
services

Customer stores

 Streamlining customers’
ordering operations

Packagingmaterials

Product
registration andrevision
Order lists

Officematerials
Supplies

Items handled

5. IT-driven customer
networks(Internet)

Store A

Ordering
instructions

Customerorder(Internet)

Store B

Our logistics center

Our system
Ordermanagement

Store C

Delivery toeach store

Copyright© 2023 The Pack Corporation. All Rights Reserved.

Our production plans

Status of order receipt
Restocking management

and purchasing sections

40

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.
◆ Support the spread and growth of renewable energy through investment inrenewable energy funds.

Paper
bags

Folding
paper
cartons

Relationshipto the SDGs

918,145 thousand[YoY change +3.3%]

1,174,364 thousand[YoY change +9.4%]

Logistics

Film
packaging

Corrugatedbox
products

Customers

1,013,504 thousand[YoY change -34.8%]

96,584 thousand m2[YoY change +6.1%]* Logistics CO2 refers to transportation fromthe Company to customers.

* 2021 figures
Copyright© 2023 The Pack Corporation. All Rights Reserved.

41

ESG Initiatives (2)Initiatives

Specifics

2. Activities of The Pack
Forest Environment
Fund(forest conservation
activities)◆ 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(Activities)

1.77 million yen

Trees planted

21,078

Total participants

7,075

Planted land area
CO2 emissions
absorbed

17.99 Ha
1,838.91 t(Totals as of the end of December 2022)

Copyright© 2023 The Pack Corporation. All Rights Reserved.

42

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© 2023 The Pack Corporation. All Rights Reserved.

43

ESG Initiatives (4)Initiatives

4. Social Contribution
Activities

Specifics◆ As part of our environmental education initiatives, in cooperation with the city ofHigashi-Osaka, we organize hands-on manufacturing classes at elementary
schools.

◆ Sponsorship of the Kansai Philharmonic Orchestra◆ Support for the scholarship program of the Japan Student Services Organization◆ Contributing to human resource◆ Support for the Kids Earth Funddevelopment for the future
Display using kome-kamiTPFS(Mitsui Outlet Park Osaka
Tsurumi)Relationshipto the SDGs

What's this package for?

Shigoto no Tobira

The Kids Earth Fund undertakes support activities
for children around the world who have sufferedpsychological trauma. The Company is registeredas a corporate member. When requested by
Online Social Studies Field Trip
Shigoto no Tobira (Job Door) The packaging mission(Gakken Kids Net)
customers, pictures from the Kids Earth Fund areused in the graphic design of packaging.
Copyright© 2023 The Pack Corporation. All Rights Reserved.

44

Note
This document is intended to provide information on management policies and business results for the second quarter of the year ended
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 December 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
45