Interim report
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February 10, 2025 （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, Executive Officer Telephone: 03-3563-1111 +81-3-3563-1111(overseas) (All yen figures are rounded down to the nearest one million yen) 1. Results for the Third Quarter of the Year Ending March 31, 2025 (April 1, 2024 - December 31, 2024) (Unaudited) (1) Consolidated Business Results (Figures shown in percentage are ratios compared to the same period of the previous year) Millions of yen % Millions of yen % Millions of yen % Millions of yen % First Nine Months of FY2024 First Nine Months of FY2023 Note: Comprehensive income First Nine Months of FY2024 46,933 million yen [(61.1)%] First Nine Months of FY2023 120,733 million yen [(13.7)%] First Nine Months of FY2024 First Nine Months of FY2023 (2) Consolidated Financial Condition First Nine Months of FY2024 Year ended March 2024 Note: Shareholders' equity First Nine Months of FY2024 1,079,356 million yen Year ended March 2024 1,066,449 million yen 2. Cash Dividends FY2023 FY2024 FY2024 (Forecast) Note : Change in forecast of dividend … None 3. Consolidated Forecasts for the Year Ending March 2025 (April 1, 2024 - March 31, 2025) (Figures shown in percentage are ratios compared to the previous year) Millions of yen % Millions of yen % Millions of yen % Millions of yen % Full year Note : Change in consolidated forecasts … None Summary of Consolidated Financial and Business Results for the Third Quarter of the Year Ending March 2025 65,446 (4.5) 42,330 8.2 Profit per share Diluted profit per share Net sales Operating profit Ordinary profit Profit attributable to owners of parent 1,383,731 7.1 57,109 1.3 63,082 (3.6) 50,292 18.8 Yen Yen 51.20 51.19 42.70 42.69 1,292,397 (0.3) 56,363 (5.3) Dividend per share End of 1Q End of 2Q End of 3Q Yen Operating profit Ordinary profit Profit attributable to owners of parent Profit per share － Net sales Total assets Net assets Shareholders' equity ratio Net assets per share Millions of yen Millions of yen % 12.00 End of FY Total － 8.00 － 8.00 16.00 Yen 2,602,913 1,109,237 41.5 1,123.28 2,442,482 1,095,597 43.7 1,877,000 1,083.13 Yen Yen Yen Yen Yen 10.7 70,000 (3.6) 73,000 (15.1) 57,000 12.2 57.89 － 12.00 24.00
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4. Notes (1) Significant changes in the scope of consolidation during the period: Yes Newly included:21 companies (Walki Holding Oy and its 20 affiliated companies) (2) Application of simple accounting methods and quarterly peculiar accounting methods : None (3) Changes in accounting methods compared with recent consolidated accounting periods (i) Changes due to accounting standard changes : Yes (ii) Changes besides (i) : None (iii) Accounting estimate change : None (iv) Restatement : None (4) Outstanding balance of issued shares (common stock) (i) Outstanding balance of issued shares at the end of fiscal year (including treasury shares) First Nine Months of FY2024 1,014,381,817 FY2023 1,014,381,817 (ii) Outstanding balance of treasury shares at the end of fiscal year First Nine Months of FY2024 53,483,931 FY2023 29,784,280 (iii) Weighted average number of shares during fiscal year First Nine Months of FY2024 982,260,977 First Nine Months of FY2023 991,234,026 NOTICE ・Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None ・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. (Note)Please refer to “Consolidated Quarterly Financial Statements and Notes (Changes in accounting policies)” on page 8 of the attached document for more details.
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1. Qualitative Information Concerning Business Performance Business Performance for the First Nine Months of FY2024 (April 1, 2024 - December 31, 2024) 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 -Green Innovation-". Specifically, we will continue our efforts on environmental issues, such as promoting greenhouse gas reduction by increasing the usage of renewable energy and expanding net CO2 absorption by planting fast-growing trees, in addition to expanding plantations, 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. In April 2024, as part of "Initiatives for Profitability Improvement -Profitability-", we have completed acquisition of Walki Holding Oy (Head Office: Finland), a leading company with advanced technologies in material conversion especially for paper-based sustainable solutions. The purpose of the acquisition is to build and expand a platform for our packaging business in Europe, where plastic packaging regulations are progressing ahead of the rest of the world. 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 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". In addition, in December 2023, we announced our "Initiatives to Enhance Corporate Value". Regarding initiatives for shareholder returns, in order to further improve capital efficiency and enhance shareholder returns in addition to maintain stable dividends in line with our profitability with a minimum annual dividend of 24 yen per share and a target payout ratio of 30%, in December 2024, we decided a policy of acquiring 100 billion yen of its treasury shares by the end of FY2026. As part of this policy, we also decided to acquire 50 billion yen of its treasury shares by December 2025 and we acquired 13.3 billion yen in December 2024. We will continue to improve return on capital, promote initiatives that lead to sustainable growth, and strengthen information dissemination in order to enhance long-term corporate value and fulfil our social mission based on our Purpose. Consolidated net sales for the first nine months of FY2024 increased by ¥91.3 billion to ¥1,383.7 billion (year-on-year increase of 7.1%) mainly due to new consolidation of Walki Holding Oy, and the progress in the recovery at Pan Pac Forest Products Ltd. in New Zealand, which had been shut down due to cyclone damage. Pan Pac completed its recovery at the end of November 2024. Consolidated operating profit increased by ¥0.7 billion to ¥57.1 billion (year-on-year increase of 1.3%) mainly due to a rise in overseas pulp market and an increase in sales volume despite cost increase such as distribution and personnel. Ordinary profit decreased by ¥2.4 billion to ¥63.1 billion (year-on-year decrease of 3.6%)due to a decrease in foreign exchange gains from revaluation of foreign currency-denominated receivables and payables. Profit before taxes increased by ¥17.2 billion to ¥83.9 billion (year-on-year increase of 25.7%) due to gains on the sale of investment securities and return of assets from retirement benefits trust in line with an initiative for reducing shareholdings , and profit attributable to owners of parent increased by ¥8.0 billion to ¥50.3 billion (year-on-year increase of 18.8%). Overseas sales ratio increased by 5.0 points from the same periods in the previous year to 39.5%. Net Sales Operating Profit Ordinary Profit Profit Attributable to Owners of Parent Profit Per Share Billions of yen Billions of yen Billions of yen Billions of yen Yen First Nine Months of FY2024 1,383.7 57.1 63.1 50.3 51.20 First Nine Months of FY2023 1,292.4 56.4 65.4 42.3 42.70 Increase (Decrease) 91.3 0.7 (2.4) 8.0 Increase (Decrease) 7.1% 1.3% (3.6%) 18.8% 1 / 9
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Overview of Business Performance for the First Nine Months of FY2024 by Segment (I) Business Performance by Segment (Unit: Billions of yen) Household and Industrial Materials 612.4 631.8 3.2% 15.5 8.1 (48.1%) Functional Materials 173.9 177.2 1.9% 7.0 9.3 33.3% Forest Resources and Environment Marketing 271.2 293.1 8.1% 17.1 24.4 42.7% Printing and Communications Media 226.5 219.4 (3.1%) 12.1 7.6 (37.2%) Total 1,283.9 1,321.5 2.9% 51.7 49.4 (4.5%) Others 237.6 310.3 30.6% 4.7 7.0 49.3% Total 1,521.5 1,631.8 7.2% 56.4 56.4 0.0% Adjustment (*) (229.1) (248.0) (0.0) 0.7 Consolidated total 1,292.4 1,383.7 7.1% 56.4 57.1 1.3% *Adjustment is mainly those concerning internal transactions. (II) Overview of Business Performance by Segment 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, environmentally friendly packaging, logistics, engineering, real estate, liquid packaging cartons, etc. Net Sales Operating Profit（Loss） First Nine Months of FY2023 First Nine Months of FY2024 Increase (Decrease) First Nine Months of FY2023 First Nine Months of FY2024 Increase (Decrease) Reporting 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, and markets in which products are sold or 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". 2 / 9
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○Household and Industrial Materials ○Functional Materials ○Forest Resources and Environment Marketing ○Printing and Communications Media Regarding domestic business, net sales decreased from the previous year due to a decrease in the amount of electricity sold in the energy business, despite the improvement of dissolving pulp market and yen's depreciation. In the first nine months of FY2024, net sales amounted to ¥631.8 billion (year-on-year increase of 3.2%), and operating profit was ¥8.1 billion (year-on-year decrease of 48.1%). Regarding domestic business, net sales increased from the previous year, due to the recovery in demand for boxboard and packaging paper. As for disposable diapers, net sales of those for babies decreased from the previous year due to the withdrawal from the domestic business in September 2024, while net sales of those for adults increased from the previous year due to an increase in sales volumes as a result of new customer acquisition. Regarding overseas business, net sales of containerboard increased from the previous year due to foreign exchange impact, and net sales of corrugated containers also increased due to the launch of the new corrugated container plant in Vietnam as part of our strategy to expand business further in Southeast Asia. As for disposable diapers, net sales increased due to sales expansion in Malaysia. In the first nine months of FY2024, net sales amounted to ¥177.2 billion (year-on-year increase of 1.9%), and operating profit was ¥9.3 billion (year-on-year increase of 33.3%). Regarding domestic business, as for specialty paper, net sales increased from the previous year due to sales expansion of strategic products, such as heat-sealable paper for major online retailers and non-fluorine oil-resistant paper, and the recovery in demand for semiconductor. As for thermal paper, net sales increased from the previous year due to steady demand. Regarding overseas business, net sales decreased from the previous year due to declining prices despite the gradual recovery in demand in some areas. In the first nine months of FY2024, net sales amounted to ¥293.1 billion (year-on-year increase of 8.1%), and operating profit was ¥24.4 billion (year-on-year increase of 42.7%). Regarding overseas business, net sales increased from the previous year due to the progress in the recovery at Pan Pac Forest Products Ltd. in New Zealand, which had been shut down due to cyclone damage. In the first nine months of FY2024, net sales amounted to ¥219.4 billion (year-on-year decrease of 3.1%), and operating profit was ¥7.6 billion (year-on-year decrease of 37.2%). Regarding domestic business, net sales of newsprint, printing and communication paper decreased from the previous year as demand continued to decline. Regarding overseas business, net sales at Jiangsu Oji Paper Co., Ltd., increased from the previous year due to an increase in production volume as a result of improved production efficiency. 3 / 9
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2. Consolidated Quarterly Financial Statements and Notes (1)Consolidated quarterly balance sheets (Unit : Millions of yen) FY2023 First Nine Months / FY2024 Mar 31,2024 Dec 31,2024 Assets Current assets Cash and deposits 58,088 19,377 Notes and accounts receivable - trade, and contract assets 370,908 421,591 Securities 4,772 8,615 Merchandise and finished goods 124,625 131,693 Work in process 24,637 27,749 Raw materials and supplies 136,181 151,981 Other 56,902 51,827 Allowance for doubtful accounts (2,828) (2,839) Total current assets 773,287 809,996 Non-current assets Property, plant and equipment Buildings and structures, net 222,446 241,656 Machinery, equipment and vehicles, net 428,951 446,561 Land 246,198 246,057 Other, net 375,907 420,520 Total property, plant and equipment 1,273,504 1,354,795 Intangible assets Goodwill 18,081 77,881 Other 16,373 24,760 Total intangible assets 34,455 102,641 Investments and other assets Investment securities 217,870 202,973 Other 145,203 134,290 Allowance for doubtful accounts (1,838) (1,784) Total investments and other assets 361,235 335,479 Total non-current assets 1,669,195 1,792,916 Total assets 2,442,482 2,602,913 4 / 9
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(Unit : Millions of yen) FY2023 First Nine Months / FY2024 Mar 31,2024 Dec 31,2024 Liabilities Current liabilities Notes and accounts payable - trade 274,659 291,036 Short-term borrowings 216,476 280,369 Commercial papers 30,000 71,000 Current portion of bonds payable 10,000 25,000 Income taxes payable 22,017 18,028 Provisions 8,118 7,940 Other 106,912 104,889 Total current liabilities 668,183 798,264 Non-current liabilities Bonds payable 145,000 130,000 Long-term borrowings 335,240 369,389 Provisions 7,589 7,760 Retirement benefit liability 54,394 54,081 Other 136,476 134,179 Total non-current liabilities 678,701 695,411 Total liabilities 1,346,884 1,493,675 Net assets Shareholders' equity Share capital 103,880 103,880 Capital surplus 85,740 86,035 Retained earnings 645,337 675,910 Treasury shares (16,575) (29,802) Total shareholders' equity 818,383 836,024 Accumulated other comprehensive income Valuation difference on available-for-sale securities 64,656 58,252 Deferred gains or losses on hedges 1,524 (1,311) Revaluation reserve for land 5,713 5,707 Foreign currency translation adjustment 124,922 139,463 Remeasurements of defined benefit plans 51,249 41,221 Total accumulated other comprehensive income 248,066 243,332 Share acquisition rights 97 75 Non-controlling interests 29,049 29,805 Total net assets 1,095,597 1,109,237 Total liabilities and net assets 2,442,482 2,602,913 5 / 9
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(2)Consolidated quarterly statements of income and comprehensive income Consolidated quarterly statements of income (Unit : Millions of yen) First Nine Months / FY2023 First Nine Months / FY2024 Apr '23 - Dec '23 Apr '24 - Dec '24 Net sales 1,292,397 1,383,731 Cost of sales 1,045,220 1,118,662 Gross profit 247,176 265,069 Selling, general and administrative expenses Freight and incidental costs 93,511 99,234 Employees' salaries 44,827 47,426 Other 52,473 61,298 Total selling, general and administrative expenses 190,813 207,959 Operating profit 56,363 57,109 Non-operating income Interest income 1,856 1,725 Dividend income 3,324 3,760 Foreign exchange gains 10,225 832 Share of profit of entities accounted for using equity method 2,336 3,602 Other 5,567 8,919 Total non-operating income 23,310 18,840 Non-operating expenses Interest expenses 5,242 5,899 Other 8,984 6,969 Total non-operating expenses 14,227 12,868 Ordinary profit 65,446 63,082 Extraordinary income Gain on sale of investment securities 1,453 19,276 Gain on return of assets from retirement benefits trust 222 8,469 Other 7,799 1,724 Total extraordinary income 9,475 29,470 Extraordinary losses Business restructuring expenses 312 3,785 Loss on disaster 6,297 2,184 Loss on retirement of non-current assets 647 2,137 Other 877 501 Total extraordinary losses 8,133 8,609 Profit before income taxes 66,788 83,942 Income taxes - current 20,544 33,016 Income taxes - deferred 2,437 (758) Total income taxes 22,981 32,258 Profit 43,806 51,684 Profit attributable to non-controlling interests 1,476 1,391 Profit attributable to owners of parent 42,330 50,292 6 / 9
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Consolidated quarterly statements of comprehensive income (Unit : Millions of yen) First Nine Months / FY2023 First Nine Months / FY2024 Apr '23 - Dec '23 Apr '24 - Dec '24 Profit 43,806 51,684 Other comprehensive income Valuation difference on available-for-sale securities 11,141 (6,826) Deferred gains or losses on hedges 703 (2,830) Foreign currency translation adjustment 65,467 14,559 Remeasurements of defined benefit plans, net of tax (1,375) (9,423) Share of other comprehensive income of entities accounted for using equity method 989 (231) Total other comprehensive income 76,927 (4,751) Comprehensive income 120,733 46,933 Comprehensive income attributable to Comprehensive income attributable to owners of parent 117,690 45,578 Comprehensive income attributable to non-controlling interests 3,043 1,354 7 / 9
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(3)Notes to consolidated quarterly financial statements (Notes related to going concern assumption) No applicable items (Notes on occurrence of significant changes to shareholders' equity) No applicable items (Changes in accounting policies) (Application of Accounting Standard for Current Income Taxes, etc.) (Notes on Consolidated Statements of Cash Flows) Depreciation(including amortization of intangible assets other than goodwill) and amortization of goodwill during the First Nine Months of FY2024 (April 1,2024 - December 31, 2024) as follows: (Unit : Millions of yen) First Nine Months / FY2023 First Nine Months / FY2024 Apr '23 - Dec '23 Apr '24 - Dec '24 Depreciation 59,786 62,349 Amortization of goodwill 1,686 4,325 “Accounting Standard for Current Income Taxes” (ASBJ Statement No.27, October 28, 2022. Hereinafter “Revised Accounting Standard 2022”) and related guidelines have been adopted from the beginning of the first quarter. The classification of current income taxes (taxation on other comprehensive income) follows the transitional treatment prescribed in the proviso of paragraph 20-3 of the Revised Accounting Standard 2022 and the transitional treatment prescribed in the proviso (2) of paragraph 65-2 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.28, October 28, 2022. Hereinafter “Revised Implementation Guidance 2022”). This change in accounting policies has no impact on the quarterly consolidated financial statements. For the revised accounting treatment for consolidated financial statements when gains or losses on sale of shares in subsidiaries resulting from transactions between consolidated companies were deferred for tax purposes, the Revised Implementation Guidance 2022 has been adopted from the beginning of the first quarter. This change in accounting policies was applied retrospectively. Hence, the quarterly consolidated financial statements for the same quarter of the prior fiscal year and the consolidated financial statements for the prior fiscal year have been modified retrospectively. The effects of this adoption are immaterial on the quarterly consolidated financial statements for the same quarter of the prior fiscal year and the consolidated financial statements for the prior fiscal year. Quarterly Consolidated Statements of Cash Flows for the First Nine Months of FY2024 (April 1,2024 - December 31, 2024) are not prepared. 8 / 9
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(Segment Information) Ⅰ.For the First Nine Months of FY2023 (April 1,2023 - December 31, 2023) 1.Information on amounts of sales and profit or loss by reporting segment (Unit : Millions of yen) Household and Industrial Materials Functional Materials Forest Resources and Environmental Marketing Printing and Communications Media Total Net Sales Sales to third parties 563,453 163,242 234,005 179,039 1,139,742 152,654 1,292,397 - 1,292,397 Inter-segment sales or transfers 48,922 10,625 37,199 47,447 144,195 84,946 229,141 (229,141) - Total sales 612,376 173,868 271,205 226,487 1,283,937 237,600 1,521,538 (229,141) 1,292,397 Segment profit 15,506 7,001 17,100 12,085 51,693 4,706 56,399 (35) 56,363 Notes 1."Others" is a business segment which is not included in the reporting segments, and included in this segment are trading business, logistics, engineering, real estate, liquid packaging carton and other businesses. 2. Adjustment for segment profit of ¥ (35) million primarily consists of adjustment relating to internal transactions. 3. Adjustment is made between segment profit and operating profit of the consolidated statement of income. Ⅱ.For the First Nine Months of FY2024 (April 1,2024 - December 31, 2024) 1.Information on amounts of sales and profit or loss by reporting segment (Unit : Millions of yen) Household and Industrial Materials Functional Materials Forest Resources and Environmental Marketing Printing and Communications Media Total Net Sales Sales to third parties 578,093 166,191 256,585 170,988 1,171,859 211,872 1,383,731 - 1,383,731 Inter-segment sales or transfers 53,690 11,012 36,487 48,432 149,623 98,410 248,033 (248,033) - Total sales 631,783 177,204 293,073 219,420 1,321,482 310,282 1,631,765 (248,033) 1,383,731 Segment profit 8,050 9,334 24,404 7,592 49,381 7,024 56,406 703 57,109 Notes 1."Others" is a business segment which is not included in the reporting segments, and included in this segment are trading business, environmentally friendly packaging, logistics, engineering, real estate, liquid packaging carton and other businesses. 2. Adjustment for segment profit of ¥ 703 million primarily consists of adjustment relating to internal transactions. 3. Adjustment is made between segment profit and operating profit of the consolidated statement of income. Consolidated amount (Note 3) Reporting segments Others (Note 1) Total Adjustments (Note 2) Consolidated amount (Note 3) Reporting segments Others (Note 1) Total Adjustments (Note 2) 9 / 9