Business Portfolio Transformation and New Business Launches

「Packaging and visual communications have together reached 27% of sales, just over one-quarter, but account for 46% of total operating profit, surpassing the paper business at 43% as the segments have grown.」

「The Group has generated stable cash flow from its core paper and paperboard business, but, in anticipation of the future business environment, will allocate management resources to fields with higher growth and profitability. It will transform its business portfolio through bolt-on M&A that complements its established overseas packaging and visual communications businesses, as well as strategic transactions that bring fundamental changes to its business structure.」

「This acquisition forms part of a diversification strategy aligned with the fourth medium-term management plan, promoting the transformation of Antalis' business portfolio, namely accelerating the shift from paper to visual communications and expanding into new product areas within visual communications. The European textile digital printing market is said to be a field expected to achieve high growth, with a projected CAGR of approximately 7% to 10% through 2030. Acquisition voting rights: 100%.」

「The Group operates globally, centered on its paper, packaging and visual communications businesses. It is advancing business portfolio restructuring with the aim of making packaging and visual communications new core businesses through an inorganic growth strategy.」

「Tpf is based in Italy and processes and sells customized wooden packaging products. It also operates a wholesale business in VCI products, including VCI film and VCI paper, and handles its proprietary VCI brand, VCIForce. Antalis Italy primarily operates a packaging business, but decided to acquire the company because incorporating it would diversify its products and strengthen its business base in the industrial region of northern Italy, Emilia-Romagna, as it expands into additional business areas.」

「The Group will pursue M&A in packaging and visual communications to expand the scale of these businesses while accelerating expansion into new regions, including the North American market.」

「In the visual communications business, Integart, which recently joined the Group through M&A, contributed to both revenue and profit. In North America, Lovepac, which recently joined the Group through M&A, contributed to revenue and profit.」

「In Oceania, the Group expanded its market share, mainly in commercial printing, and both revenue and profit improved significantly. The packaging business also remained strong, particularly in Australia, while the visual communications business remained solid. M&A in Singapore's visual communications sector contributed to performance.」

「In Europe, demand was sluggish because the economy stagnated amid recession and the market as a whole held excess inventory. Performance in the paper business was also weak because prices declined in some areas. Although demand in the packaging business was weak because of the recession, demand for fiber-based packaging remained firm and revenue exceeded the previous year. The visual communications business remained solid, supported by strong demand for vehicle wrapping and digital printing products.」

「Revenue exceeded the previous year, partly because an investment in the visual communications business in Singapore contributed to performance. Other existing businesses continued to face intense price competition in each region, but operating income improved as the benefits of business reorganization and integration took effect.」

「BB Pack Group has a customer base centered on e-commerce and provides custom solutions for packaging in that field. This is expected to lead to the acquisition of new users and expansion of its product lineup, as well as further growth in its packaging business and consolidated profit through packaging materials, design and customized printing solutions.」

「Developing brand owners through the know-how and synergies of overseas subsidiaries. The Group will promote its e-commerce business and seek to further improve margins.」

「In Oceania, centered on Australia, the economy was affected by lockdowns in major cities amid concerns over the spread of the Delta variant, but Spicers Limited, acquired in 2019, significantly expanded its core packaging and sign and display businesses through M&A. In its paper business as well, it leveraged the advantages of a recurring-revenue business and achieved rapid growth in performance.」

「Both companies are developing packaging and visual communications businesses as post-paper businesses, while transforming the business model of the graphic paper business through e-commerce to maximize profits. In the Japanese market as well, the Group will develop these businesses in line with market characteristics and generate synergies. In Asia, the Group will integrate Antalis S.A.S.'s Asian operations with its existing wholesale business in paper, pulp and related products in the region and generate synergies through regional reorganization.」

「Antalis S.A. has become a wholly owned subsidiary of the Group through the acquisition of shares by means of a tender offer and squeeze-out.」

「Having determined that cooperation with Antalis would create synergies through product development and brand building, among other initiatives, we entered into the agreement to reserve the transfer of shares and the share transfer agreement. We also determined that bringing the company under the Group's umbrella would further strengthen competitiveness through the Group's trading business overseas and Antalis' paper merchant business.」

「By acquiring this business, we expect to diversify Spicers' business portfolio and further strengthen its presence in the Australian market by bringing in the packaging sector, where growth is expected. These considerations led to the execution of the business transfer agreement.」

「We are confident that this acquisition will not only significantly strengthen our position in the ANZ market but also provide us with a diverse product portfolio, making a major contribution to deepening our global operations and strengthening our paper raw materials and total packaging businesses.」

「The Group positions its new solutions business as an area that will expand business opportunities by offering proposals designed to solve customers' issues and will contribute to sustainable growth going forward.」

「The first three-year plan, covering fiscal 2016 through fiscal 2018, was positioned as a period of business structure transformation, during which the Group worked to restructure its business portfolio and strengthen its management foundation. The second three-year plan, beginning in fiscal 2019, is positioned as a period of business development. In overseas operations, it places the acceleration of business expansion in the Asia-Pacific region and the pursuit of an active M&A strategy at the center of its efforts.」

「To become a company that continues to create value in the coming new society through the use of AI, IoT and robotics, among other technologies, the Group is pursuing entry into the software services sector based on systems development as its next growth strategy and is currently advancing 3 projects. The first is the Temperature-Controlled Logistics Solution Business, which aims to develop temperature-sensitive sensors that can be printed on labels and other materials. The second is the Biomass Power Generation Optimization System Solution Business, which involves developing software to optimize combustion efficiency and commercializing it. The third is the Community-Based Integrated Care System Solution Business, which was launched in April last year.」

「Business portfolio transformation through expansion overseas and the launch of new businesses」