Oji : Summary of Consolidated Financial and Business Results for the First Quarter of the Year Ending March 2024 (1Q/FY2024)

August 7, 2023

Summary of Consolidated Financial and Business Results for the First Quarter of the Year Ending March 2024

（Japanese GAAP）

Company Name:	Oji Holdings Corporation	(Code No. 3861 Tokyo Stock Exchange)
URL:	https://www.ojiholdings.co.jp/
Representative:	Hiroyuki Isono, President & Chief Executive Officer
Contact:	Tadashi Oshima, Corporate Officer
Telephone:	03-3563-1111	[phone](overseas)

(All yen figures are rounded down to the nearest one million yen)

1. Results for the First Quarter of the Year Ending March 31, 2024 (April 1, 2023 - June 30, 2023)

(Unaudited)

(1) Consolidated Business Results

(Figures shown in percentage are ratios compared to the same period of the previous year)

				Net sales	Operating profit			Ordinary profit			Profit attributable to
								owners of parent
			Millions of yen	%	Millions of yen		%	Millions of yen	%	Millions of yen	%
First Quarter of FY2023		420,317	5.3	21,775	39.8		28,949	(12.3)		17,599	(24.4)
First Quarter of FY2022		399,177	16.5	15,578	(44.5)		32,992	(4.6)		23,285	13.0
Note: Comprehensive income		First Quarter of FY2023	28,748 million yen		First Quarter of FY2022		54,644 million yen
			Profit per share	Diluted profit per share
				Yen			Yen
First Quarter of FY2023		17.76		17.75
First Quarter of FY2022		23.51		23.50
(2) Consolidated Financial Condition
				Total assets		Net assets			Shareholders'			Net assets per share
							equity ratio
			Millions of yen		Millions of yen				%			Yen
First Quarter of FY2023		2,318,786	987,963				41.4		967.82
Year ended March 2023		2,296,018	964,564				40.8		945.27
Note: Shareholders' equity		First Quarter of FY2023	959,328 million yen		FY2022	936,949 million yen
2. Cash Dividends
							Dividend per share
		End of 1Q		End of 2Q		End of 3Q			End of FY			Annual
		Yen			Yen		Yen				Yen			Yen
FY2022		－			8.00			－				8.00		16.00
FY2023		－
FY2023 (Forecast)					8.00			－				8.00			16.00

Note : Change in forecast of dividend … None

3. Consolidated Forecasts for the Year Ending March 2024 (April 1, 2023 - March 31, 2024)

(Figures shown in percentage for the full year are ratios compared to the previous year, Figures shown in percentage for the first half are ratios compared to the same period of the previous year)

	Net sales			Operating profit		Ordinary profit	Profit attributable to	Profit per share
				owners of parent
	Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%	Yen
First half	860,000	2.7		45,000	11.4		43,000	(28.6)	28,000	(26.2)	28.25
Full year	1,800,000	5.5		100,000	17.9		100,000	5.3	65,000	15.1	65.58

Note : Change in consolidated forecasts … None

4. Notes

1. Changes in important subsidiaries

(changes regarding specified subsidiaries accompanying changes in the scope of consolidation) : None

1. Application of simple accounting methods and quarterly peculiar accounting methods : None
2. Changes in accounting methods compared with recent consolidated accounting periods

(i)	Changes due to accounting standard changes :	None
(ii)	Changes besides (i) :	None
(iii)	Accounting estimate change :	None
(iv)	Restatement :	None

1. Outstanding balance of issued shares (common stock)
2. 1. Outstanding balance of issued shares at the end of fiscal year (including treasury shares)

First Quarter of FY2023	1,014,381,817	FY2022	1,014,381,817
(ii) Outstanding balance of treasury shares at the end of fiscal year
First Quarter of FY2023	23,160,293	FY2022	23,179,622
(iii) Weighted average number of shares during fiscal year
First Quarter of FY2023	991,212,039	First Quarter of FY2022	990,616,209

NOTICE

・This document is exempt from audit procedures required by Financial Instruments and Exchange Act.

・The statements regarding future mentioned in this document are based on the information currently available and the premise deemed reasonable. The actual results may differ drastically from these forecasts due to various factors that may arise in the future.

・This document is an excerpt translation of the Japanese original and is only for reference purposes. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

1. Qualitative Information Concerning Business Performance

Business Performance for the First Quarter of FY2023 (April 1, 2023 - June 30, 2023)

	Net Sales	Operating Profit	Ordinary Profit	Profit Attributable to	Profit Per Share
	Owners of Parent
	Billions of yen	Billions of yen	Billions of yen	Billions of yen	Yen
1st Quarter of
FY2023	420.3	21.8	28.9	17.6	17.76
1st Quarter of
FY2022	399.2	15.6	33.0	23.3	23.51
Increase (Decrease)	21.1	6.2	(4.0)	(5.7)
Increase (Decrease)	5.3%	39.8%	(12.3%)	(24.4%)

The Oji Group has set the basic policy of "Toward Further Growth and Evolution" as the Long-term Vision for 2030, and is promoting "Initiatives for Environmental Issues -Sustainability-", "Initiatives for Profitability Improvement -Profitability-" and "Initiatives for Product Development -GreenInnovation-". As the milestones of the Long-term vision, we have set FY2022-2024Medium-term Management Plan, which aims to achieve the consolidated operating profit of ¥150.0 billion or more by FY2024 and stably maintain consolidated profit attributable to owners of parent of ¥100.0 billion or more.

Specifically, we will continue our efforts on environmental issues by promoting greenhouse gas reduction and expanding net CO2 absorption by forests, as countermeasures against climate change. At the same time, we will enhance the value of our business by deepening the existing businesses through the establishment of an optimal production system, and expanding the highly-expected businesses including overseas packaging business and eco-friendly products. Furthermore, we will develop and quickly commercialize new wood-derived products and materials such as eco-friendly materials and products, based on a range of core technologies we have cultivated through paper manufacturing and forestation. We will continue to contribute to society as a company that "grows and manages the sustainable forest, develops and delivers the products from renewable forest and brings this world a brighter future filled with hope".

Consolidated net sales for the first quarter of FY2023 increased by ¥21.1 billion to ¥420.3 billion (year-on-year increase of 5.3%) due to the price revision exercise in response to the rise in raw material and fuel prices.

Consolidated operating profit increased by ¥6.2 billion to ¥21.8 billion (year-on-year increase of 39.8%) due to the price revision and cost reduction exercise. Ordinary profit decreased by ¥4.0 billion to ¥28.9 billion (year-on-year decrease of 12.3%)due to a decrease in foreign exchange gains from revaluation of foreign currency-denominated receivables and payables. Profit before taxes decreased by ¥5.1 billion to ¥27.9 billion (year-on-year decrease of 15.6%), and profit attributable to owners of parent decreased by ¥5.7 billion to ¥17.6 billion (year-on-year decrease of 24.4%) .

Overseas sales ratio decreased by 3.3 points from the previous year to 33.6%.

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Overview of Business Performance for the First Quarter of FY2023 by Segment
(I) Business Performance by Segment				(Unit: Billions of yen)
				Net Sales		Operating Profit（Loss）
			1st Quarter of	1st Quarter of	Increase	1st Quarter of	1st Quarter of	Increase
			FY2022	FY2023	(Decrease)	FY2022	FY2023	(Decrease)
	Reporting	Household &	187.1	197.6	5.6%	(0.3)	1.0	-
	Segment	Industrial Materials
		Functional Materials	52.5	55.4	5.7%	3.7	2.7	(28.7%)
		Forest Resources &	93.5	91.6	(2.0%)	13.1	14.3	9.2%
		Environment Marketing
		Printing &	63.7	74.3	16.7%	(1.6)	2.0	-
		Communications Media
		Total	396.8	418.9	5.6%	15.0	20.0	33.6%
	Others		79.2	78.2	(1.2%)	2.1	2.1	(0.8%)
	Total		476.0	497.2	4.5%	17.0	22.0	29.4%
	Adjustment (*)	(76.8)	(76.9)		(1.4)	(0.2)
	Consolidated total	399.2	420.3	5.3%	15.6	21.8	39.8%

*Adjustment is mainly those concerning internal transactions.

(II) Overview of Business Performance by Segment

The Oji Group's four reporting segments are: "Household and Industrial Materials", "Functional Materials", "Forest Resources and Environment Marketing", and "Printing and Communications Media". Each of the reporting segment consists of units that are recognized to be similar in terms of economic characteristics, manufacturing methods or processes of products, markets in which products are sold, and types of customers, among the constituent units of the Oji Group.

Business segments that are not included in the reporting segments are classified as "Others".

From the first half of FY2022, some businesses that had been classified under "Household and Industrial Materials" and "Others" have been reclassified into "Forest Resources and Environment Marketing". Year-on-year comparisons are made with the previous year figures under the reclassified segments.

Major business lineup for the segments are as follows.

- Household and Industrial Materials:

Containerboard/corrugated containers, boxboard/folding cartons, packing paper/paper bags, household paper, disposable diapers, etc.

- Functional Materials:

Specialty paper, thermal paper, adhesive materials, film, etc.

- Forest Resources and Environment Marketing:

Pulp, energy, forest plantation/lumber processing, etc.

- Printing and Communications Media:

Newsprint, printing/publication/communication paper, etc.

- Others:

Trading business, logistics, engineering, real estate etc.

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○Household and Industrial Materials

In the first quarter of FY2023, net sales amounted to ¥197.6 billion (year-on-year increase of 5.6%), and operating profit was ¥1.0 billion (year-on-year increase of ¥1.3 billion).

Regarding domestic business, although sales volumes of containerboard, corrugated container, packing paper, and household paper decreased from the previous year due to consumption restraint caused by inflation, net sales increased as a result of the price revision exercise. As for disposable diapers, net sales almost remained unchanged from the previous year.

Regarding overseas business, in line with our strategy to further expand business in Southeast Asia and Oceania, the sales volume of containerboard in Southeast Asia increased due to improved operating rate of the new containerboard machine started in October 2021, and sales volume of corrugated container also increased in Australia. On the other hand, net sales decreased from the previous year due to sluggish demand for corrugated container mainly in Malaysia and deteriorating market conditions for containerboard in Oceania.

○Functional Materials

In the first quarter of FY2023, net sales amounted to ¥55.4 billion (year-on-year increase of 5.7%), and operating profit was ¥ 2.7 billion (year-on-year decrease of 28.7%).

Regarding domestic business, sales volume of specialty paper decreased from the previous year due to decrease in release paper and its base paper in response to sluggish demand for electronic devices, despite increase in strategic products such as interleaving paper for glass and heat-sealable paper for major online retailers. On the other hand, net sales increased due to the price revision exercise. As for thermal paper, both sales volume and net sales decreased from the previous year as demand declined from the second half of FY2022 in reaction to customers' inventory buildup in the first half of FY2022 due to the global logistics turmoil.

Regarding overseas business, sales volume of thermal paper decreased from the previous year due to inventory reduction caused by rising interest rates, but net sales increased due to the price revision exercise.

○Forest Resources and Environment Marketing

In the first quarter of FY2023, net sales amounted to ¥91.6 billion (year-on-year decrease of 2.0%), and operating profit was ¥ 14.3 billion (year-on-year increase of 9.2%).

Regarding domestic business, net sales of pulp business almost remained unchanged from the previous year. Net sales of energy business increased compared to the previous year due to the start of operation of a new biomass power plant in Tokushima Prefecture from December 2022 as a part of investment in growing areas towards decarbonization.

Regarding overseas business, net sales of pulp business and lumber business decreased from the previous year as Pan Pac Forest Products Ltd. in New Zealand was damaged by a cyclone in February 2023 and its manufacturing facilities are still under restoration.

○Printing and Communications Media

In the first quarter of FY2023, net sales amounted to ¥74.3 billion (year-on-year increase of 16.7%), and operating profit was ¥2.0 billion (year-on-year increase of ¥3.6 billion).

Regarding domestic business, net sales of newsprint, printing and communication paper increased from the previous year due to the price revision exercise, although demand continued to decline.

Regarding overseas business, net sales at Jiangsu Oji Paper Co., Ltd., increased from the previous year as prices improved due to a recovery in economic activity with the end of the Zero-COVID policy, despite a decline in sales volume.

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