Medium-Term Vision, Vision120

Executive Summary

Since our founding in 1909, we have laid our business foundation by focusing on the manufacturing and sales of corrugated materials. Starting around the year 2000, we have diversified our business with "packaging" as the key focus, which includes strengthening our overseas business expansion while establishing the Rengo Group’s Hexagon Management. By providing a wide range of essential packaging materials both domestically and internationally, we contribute to society.

Our group has consistently strived to establish a production system with minimal environmental impact. In addition to supplying environmentally friendly cellulose-derived products, such as our main product, corrugated packaging, we have also focused on developing environmentally conscious petrochemical-based packaging. Through these efforts, we have been strongly committed to addressing socially relevant issues, including global environmental issues.

Building on this history and aiming for new evolution, we have formulated our medium-term vision "Vision120 (Vision One-Twenty)" to provide a framework for strengthening the value creation foundation, addressing materiality (key issues), and promoting the evolution and extension of group management over the five-year period leading up to our 120th anniversary in the fiscal year ending March 2030.

Leveraging our meaningfully expanded business scale, we aim to enhance the quality of our business operations to foster value creation and the generation of new value from a long-term perspective. Through this vision, we strive to achieve sustainable growth and enhance our societal value, thereby meeting the expectations of our stakeholders.

Fiscal Year Ending
March 2030
Key Financial
Indicators

Main Theme for the Five-Year Period (April 2025 - March 2030)

Fundamental Philosophy
Core Values

Packaging is essential for delivering products to consumers. We contribute to society by dressing, wrapping, and protecting our customers' products.

This vision is based on the fundamental philosophy of a human-capital approach in people-centric management at the core of our framework. While consistently leading the industry in environmental management, we aim to provide comprehensive solutions for all packaging needs, support global logistics and people's lives, and create a bright future.

Business Model

Value Creation Foundation
Hexagon Management

Our group, under the banner of "General Packaging Industry (GPI) Rengo," positions itself as a "packaging provider" that offers solutions to fulfill all the packaging needs of a wide array of industries. We refer to our structure, which is centered on six core business fields, as Hexagon Management. By further strengthening each core business that forms the hexagon and enhancing horizontal and vertical collaboration between these businesses, we aim to seize all packaging-related business opportunities. We are working on establishing a sustainable value chain and enhancing our value creation capabilities.

Value Creation Foundation
Value Chain

Our group has established an integrated system that covers from containerboard to corrugated board, corrugated boxes, and folding cartons. Additionally, in flexible packaging, our business foundation is built on a value chain that connects upstream to downstream, from film raw materials to packaging products. Over the next five years, we aim to further refine our advanced recycling system for corrugated packaging in Japan, while also striving to achieve a similar circular economy in the film sector. Overseas, we will accelerate the construction and strengthening of our value chain to expand our business operations.

Key Themes
Further Strengthening Our Core Competencies

To realize our vision and achieve medium- to long-term growth, we have positioned "Addressing Materiality (Key Issues)" and "Evolution/Extension of Group Management" as key themes. We are united in our work to strengthen our value creation foundation to maximize the comprehensive capabilities of our group. We aim to achieve sustainable growth by balancing business strength with care for the environment and society.

• Initiatives for Each Business
• Addressing Materiality
• Evolution/Extension of Group Management

Initiatives for Each Business

The five business segments of Paperboard and Packaging^*, Flexible Packaging, Heavy Duty Packaging, Overseas, and Others will leverage their respective strengths to maximize profitability and enhance value creation capabilities.

*The "Paperboard and Packaging" business segment collectively refers to the paperboard, corrugated packaging, and folding cartons businesses under Hexagon Management.

Addressing Materiality

Creating New Value as a "Packaging Provider"

Coexisting with the Global Environment

Our group positions climate change measures as the top priority in our management and reduces greenhouse gas emissions throughout the entire product lifecycle based on a roadmap toward achieving carbon neutrality. Additionally, we contribute to the expansion of the circular economy through our business activities, while working to conserve and restore biodiversity and striving to maintain and enhance natural capital.

Key Objectives (FY3/2031)

People-Centric Management

We are committed to "People-Centric Management," which places a human-centered approach at the core of our company management. With respect for human rights as a fundamental principle, we aim to achieve sustainable growth and improve productivity through creating a safe and healthy working environment, fostering well-being and fulfillment, and promoting Diversity, Equity, and Inclusion (DEI).

Key Objectives (FY3/2031)

Strengthening the Management Base for Sustainable Growth

We will strengthen our management foundation by enhancing group governance and promoting Digital Transformation (DX). Additionally, we will work to strengthen partnerships with business partners and ensure the quality and safety of our products. Through these four initiatives, we aim to solidify the foundation for sustainable growth across the entire group.

Key Objectives (FY3/2031)

Evolution/Extension of Group Management

Evolution/Extension of Integrated Systems Group management initiatives in the Flexible Packaging-Related Business

Evolution/Extension of Global Management

Management Indicators

Cash Allocation

Over the cumulative period of this Vision120 (FY3/2026 to FY3/2030), we plan to achieve a free cash flow of 80 billion yen (cumulative sales of 5.4 trillion yen, FCF margin of 1.5%). For capital investment and M&A, we plan to allocate 55% to foundational investments, 10% to sustainability investments, 20% to growth investments, and 15% to relocation and renewal. Additionally, we aim to implement a progressive dividend policy targeting a dividend payout ratio of 30% by the end of FY3/2030, and we will proceed with the sale of cross-shareholdings to reduce their ratio to below 10% of net assets.

Financial Indicators

Our group aims to maintain a sound financial foundation with a net debt-to-EBITDA ratio of 2.6 times by the final year of our vision, FY3/2030. We will strive to improve profitability and efficiency, targeting an ordinary profit margin of 6% and an ROE of 8.5%. With the full strength of the entire group, we will vigorously conduct initiatives to achieve sustainable growth and become a company trusted by all our stakeholders.