Strengthening Overseas Expansion and Globalization

「The number exceeds 25, but half are European deals led by Antalis.」

「Fortuna Digital Holding, Club Groupe S.A.S, Digital Printing France S.A.S, Texo Group B.V. and other acquisitions have resulted in 19 companies being included in the scope of consolidation.」

「As Antalis S.A.S. acquired all shares of Fortuna Digital Holding (formerly Fortuna Komers d.o.o), Fortuna Digital Holding and its subsidiaries Fortuna Digital Austria, Fortuna Digital BIH, Fortuna Digital Croatia, Fortuna Digital Hungary, Fortuna Digital Serbia and Fortuna Digital Slovenia have been included in the scope of consolidation from the current consolidated fiscal year. Acquisition voting rights: 100%. 31 October 2025」

「The overseas sales ratio accounted for 61.7% of consolidated revenue in the current consolidated fiscal year. During this period of transformation in the pulp and paper industry, the Group will steadily advance its regional and business portfolio strategies and seek synergies among its operating companies to strengthen the Group's overall capabilities.」

「As Antalis S.A.S. acquired all shares of Tecnoprimaf S.r.l. (formerly Tpf Srl), the company has been included in the scope of consolidation from the current interim consolidated accounting period. As ANTALIS PORTUGAL, S.A., an operating company of Antalis S.A.S., acquired all shares of 100 METROS - SOLUCOES DE EMBALAGEM, UNIPESSOAL, LDA, the company has been included in the scope of consolidation from the current interim consolidated accounting period. As AS ANTALIS, an operating company of Antalis S.A.S., acquired all shares of SIA PAKELLA, SIA PAKELLA and its subsidiaries UAB PAKELLA and PAKELLA OU have been included in the scope of consolidation. As DAIEI AUSTRALASIA PTY LTD, an operating company of Spicers Limited, acquired all shares of Signet Pty Ltd, the company has been included in the scope of consolidation from the current interim consolidated accounting period.」

「The Group has become a multinational enterprise operating in 45 countries worldwide.」

「In Europe, revenue and profit were both sluggish in July and August, as usual, partly due to the summer holiday season. In the paper wholesale business, declining prices and lower sales volume continued, while the packaging business also failed to reach expected levels for either revenue or profit. In contrast, Integart, which joined the Group through M&A, contributed to both revenue and profit in the visual communications business. Performance was sluggish in South America due to economic stagnation, while Lovepac, which joined the Group through M&A, contributed to revenue and profit in North America.」

「In Oceania, the Group significantly improved performance in both revenue and profit by expanding market share, primarily in commercial printing. The packaging business also remained strong, particularly in Australia, while the visual communications business remained solid. In the ASEAN region, the paper wholesale business underperformed amid weak demand due to economic stagnation and intensifying price competition caused by low-priced offerings from China, while the M&A transaction in Singapore’s visual communications business contributed to performance.」

「In Oceania, paper selling prices, which had risen from the previous year, remained high in the current fiscal year, improving performance in commercial printing. Revenue also increased due to the effects of M&A transactions completed to date and expanded sales of office paper.」

「Although the European business was affected in the 3rd quarter by slowing GDP growth and high inflation, performance significantly exceeded the previous year due to the revival of various events under the “with-COVID” environment and tight supply and demand. As a result, revenue for the 3rd quarter cumulative consolidated period was ¥227.030 billion, up 34.5% year on year, and operating profit was ¥14.309 billion, up 305.2%, accounting for a significant proportion of the Group’s performance. As a result, revenue was ¥36.388 billion, up 31.8% year on year, and operating profit was ¥1.697 billion, up 157.9%.」

「On 29 April 2022, ANTALIS GmbH, an operating company of the Company’s consolidated subsidiary Antalis S.A.S., acquired all shares of BB Pack GmbH, Cr8packaging GmbH, a subsidiary of BB Pack, and Printmate GmbH, collectively the “BB Pack Group,” and included them within the scope of consolidation. On 30 June 2022, the Company’s consolidated subsidiary Antalis S.A.S. acquired all shares of Autoaddhesivos Coha, S.A. and Garalmi, S.A., and included them within the scope of consolidation. As a result, overseas revenue for the 2nd quarter cumulative consolidated period was ¥186.431 billion, up 28.9% year on year, and operating profit was ¥10.287 billion, up 273.8%. Overseas revenue accounted for 58.1%.」

「The Australia and New Zealand business exceeded the previous year in both revenue and operating profit, supported by the boost from a series of M&A transactions and the recovery in demand for printing and packaging. As a result, overseas revenue for the 1st quarter cumulative consolidated period was ¥88.032 billion, up 28.5% year on year, and operating profit was ¥4.414 billion, up 326.5%. Overseas revenue accounted for 56.9%.」

「The Group successively acquired leading companies in the paper-related industries in Australia in 2019 and Europe in 2020, transforming itself into a global company whose overseas business accounts for 55% of Group revenue and whose overseas operations span 133 cities.」

「In the overseas paper, pulp and related wholesale business, regional strategies and business portfolio and profit structure reforms proved effective, with both revenue and profit significantly exceeding the previous year and driving the performance of the Group as a whole. As a result, revenue for the 3rd quarter cumulative consolidated period was ¥218.105 billion, and operating profit was ¥4.156 billion, compared with an operating loss of ¥11.456 billion in the same period of the previous year.」

「In Europe, the results of Antalis S.A.S., acquired in July of the previous year, contributed to substantial year-on-year increases in both sales volume and revenue. In China, Keishin Paper began developing a stock business at 6 locations, while the strong Chinese economy and sharp rises in market prices led to a rapid recovery in performance. As a result, revenue for the 2nd quarter cumulative consolidated period was ¥144.647 billion, and operating profit was ¥2.752 billion, compared with an operating loss of ¥8.202 billion in the same period of the previous year.」

「The results of Antalis, acquired in July of the previous year, were added and made a significant contribution to earnings, resulting in a substantial year-on-year increase in sales volume and revenue. In Europe, sales volume in the paper business declined and the visual communications business also weakened due to lockdowns and other measures accompanying the resurgence of COVID-19 infections from the beginning of the year. However, as economic activity recovered with the spread of vaccines and other factors, the visual communications business recovered and revenue in the paper business trended upward, supported by higher selling prices. As a result, revenue for the 1st quarter cumulative consolidated period was ¥68.489 billion, and operating profit was ¥1.035 billion, compared with an operating loss of ¥2.710 billion in the same period of the previous year.」

「Following Spicers Limited in Australia the previous year, the Group made Antalis S.A.S. a wholly owned subsidiary in fiscal 2020. Both companies are developing packaging and visual communications businesses as post-paper businesses, while transforming the graphic paper business model through e-commerce to maximize profit.」

「Business combination date: 5 November 2020 (deemed acquisition date: 30 September 2020). Antalis S.A. was made a wholly owned subsidiary of the Company through the acquisition carried out by means of a tender offer and squeeze-out.」

「Following the acquisition of shares in Antalis S.A. on 21 July 2020, the Company included Antalis and its 73 subsidiaries within the scope of consolidation.」

「In Australia, both sales volume and revenue significantly exceeded the previous year due to the effects of the acquisition of Spicers Limited. Revenue also exceeded the previous year in China and South Korea. Although intense price competition continued in Southeast Asia, overall profit increased as the results of Spicers Limited were incorporated. As a result, revenue for the 3rd quarter cumulative consolidated period increased 20.4% year on year to ¥62.664 billion, and operating profit increased 1,553.7% to ¥113 million.」

「Following the acquisition of Spicers Limited’s shares on 16 July 2019, the Company included Spicers and its 9 subsidiaries within the scope of consolidation.」

「On the SOA implementation date of 16 July 2019, the Company acquired 100% of Spicers’ issued shares and made it a wholly owned subsidiary.」

「In fiscal 2019, the Group plans to acquire 100% of the issued shares of Spicers Limited, a company listed on the Australian Securities Exchange that operates wholesale businesses in paper, packaging materials and paper-related products, and make it a wholly owned subsidiary.」

「The Second Three-Year Plan beginning in fiscal 2019 defines the period as a “business development phase,” with the overseas business centered on accelerating business expansion in the Asia-Pacific region and pursuing an aggressive M&A strategy. This transaction is positioned as the first step in that strategy.」

「In the United States, performance remained solid, supported by relatively strong imports and exports of paper and paperboard, as well as the launch of a new wastepaper export business.」

「Sales increased in Asia, mainly due to higher prices. Although profit levels declined at some locations compared with the previous year, China, where prices remained high, more than offset the decline and drove up overall profit. As a result, revenue increased 1.8% year on year to ¥17.832 billion, and operating profit was ¥64 million, compared with an operating loss of zero in the same quarter of the previous year.」

「The Group views expansion into China, Southeast Asia and India, all growth markets, as a challenge and is working to localize its operations and expand its business. Given expectations for resilient demand for packaging accompanying economic growth, it is focusing on the total packaging field, covering paper and paperboard as well as chemical products and finished products. It has already invested in a flexible packaging printing business in China and is strengthening its competitiveness by introducing advanced Japanese technologies that address the country’s environmental regulations. It is also preparing to establish a new company to restructure its India business.」

「In East Asia, sales of coated paper, paperboard and other products increased across the board in Hong Kong, while sales of fine paper, coated paper and paperboard expanded in China. As a result, revenue increased 30.8% year on year to ¥49.194 billion, and the operating loss was ¥30 million, compared with an operating loss of ¥624 million in the same period of the previous year.」

「In China, in addition to strong sales of fine paper, coated paper, paperboard and specialty paper, the Group began selling film to an investment company. As a result, revenue increased 31.6% year on year to ¥33.461 billion, and operating profit was ¥7 million, compared with an operating loss of ¥166 million in the same period of the previous year.」

「Sales were strong at almost all locations, accompanied by improved profit. Performance improved particularly significantly in China, where market conditions recovered, and in the United States, where both exports and imports were strong, as well as in Hong Kong, Australia and elsewhere. As a result, revenue increased 30.9% year on year to ¥17.521 billion, and the operating loss was zero, compared with an operating loss of ¥90 million in the same quarter of the previous year.」

「“Globalization” is a particular focus of the long-term management vision “GIFT+1 2024.” “Going forward, we will actively expand our overseas business by targeting growth markets around the world, including India and the ASEAN countries.”」