The Pack Corporation (3950): FY2025 Results Summary — Record Net Sales, Lower Profits on Upfront Investment

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

The Pack Corporation, a packaging maker that plans, manufactures and sells paper bags, folding paper cartons, corrugated boxes and film packaging, has a fiscal year ending December 31. For the year ended December 31, 2025, net sales reached a new record high of 103,125 million yen (up 1.6% year on year), driven by the Paper Products segment. However, operating profit fell 10.0% to 7,207 million yen and profit attributable to owners of parent declined 4.6% to 6,024 million yen, as the company made prior investments in manufacturing facilities, backbone systems and human resources to strengthen its business foundations. Dividends per share increased by 2 yen, and a new Medium-Term Management Plan (2026-2030) was formulated.

Consolidated Results (Full-Year Actual)

Net sales rose 1.6% to 103,125 million yen from 101,461 million yen, setting a new record as sales of paper products remained strong. Operating profit decreased 10.0% to 7,207 million yen, ordinary profit decreased 9.1% to 7,532 million yen, and profit attributable to owners of parent decreased 4.6% to 6,024 million yen. Basic earnings per share were 107.13 yen (down 3.6%). The company summarizes the year as follows: despite a new record high in net sales, active investments in facilities and human resources resulted in lower profits. Per-share figures assume that the 3-for-1 stock split of common shares implemented effective July 1, 2025 took place at the start of the year ended December 31, 2024.

Item (Million yen)	Year ended Dec. 31, 2025	Year ended Dec. 31, 2024	YoY change
Net sales	103,125	101,461	1.6%
Operating profit	7,207	8,009	-10.0%
Ordinary profit	7,532	8,285	-9.1%
Profit attributable to owners of parent	6,024	6,316	-4.6%
Basic earnings per share (yen)	107.13	111.17	-3.6%
Dividend per share (yen)	41.33	39.33	5.1%

The company explains that higher sales volumes (+313 million yen) and higher average sale prices (+336 million yen) of paper products contributed positively, but the effects were lower than initially expected. Shifting to appropriate pricing and selling more high value-added products raised the average sale prices of paper bags, paper cartons and corrugated boxes by 0.8%, 0.6% and 1.4%, respectively. On the cost side, higher raw material costs (-180 million yen), higher other manufacturing expenses (-360 million yen, mainly depreciation of machinery investments to increase supply capacity and productivity), higher labor costs (-351 million yen), higher logistics costs (-276 million yen, mainly a contract for external warehouses to enhance logistics functions) and higher other SG&A expenses (-284 million yen, mainly depreciation related to the backbone system renovation) reduced operating profit from 8,009 million yen to 7,207 million yen.

Factors in operating profit change (Million yen)	Amount
Operating profit, year ended Dec. 31, 2024	8,009
Higher sales volumes	313
Higher average sale prices	336
Higher raw material costs	-180
Higher manufacturing expenses, other	-360
Higher labor costs	-351
Higher logistics costs	-276
Higher other selling, general and administrative expenses	-284
Operating profit, year ended Dec. 31, 2025	7,207

On the balance sheet, total assets were 104,212 million yen (103,292 million yen a year earlier), liabilities were 27,214 million yen (28,806 million yen) and net assets were 76,997 million yen (74,485 million yen). Cash flows from operating activities were 6,862 million yen (7,101 million yen), with depreciation and impairment losses rising to 2,940 million yen from 2,416 million yen due to active capital investments in manufacturing facilities and backbone system renovations. Cash flows from investing activities were 3,514 million yen (-5,436 million yen in the prior year), including proceeds from sales of investment securities of 1,777 million yen as the company sold cross-held shares. Cash dividends paid were -2,329 million yen, and cash and cash equivalents at the end of the period stood at 23,551 million yen.

Segment Results

The Paper Products segment drove overall performance, with net sales up 3.6% to 75,754 million yen (73.5% of total). Within it, paper cartons grew 4.0% to 26,916 million yen and corrugated boxes grew 13.2% to 14,743 million yen, while paper bags edged down 0.5% to 32,044 million yen. Film Packaging sales declined 1.3% to 13,322 million yen, and Others fell 5.4% to 14,048 million yen owing to a decline in sales of supplies for the PAS system. Higher SG&A costs from investments in facilities and human resources reduced operating profit in every segment: Paper Products 6,567 million yen (-8.4%), Film Packaging 829 million yen (-11.2%) and Others 1,199 million yen (-4.9%).

Segment (Million yen)	Metric	Year ended Dec. 31, 2025	Year ended Dec. 31, 2024	YoY change
Paper Products	Net sales	75,754	73,114	3.6%
Paper bags	Net sales	32,044	32,214	-0.5%
Paper cartons	Net sales	26,916	25,882	4.0%
Corrugated boxes	Net sales	14,743	13,027	13.2%
Printing	Net sales	2,049	1,990	3.0%
Film Packaging	Net sales	13,322	13,499	-1.3%
Others	Net sales	14,048	14,846	-5.4%
Paper Products	Operating profit	6,567	7,168	-8.4%
Film Packaging	Operating profit	829	933	-11.2%
Others	Operating profit	1,199	1,261	-4.9%
Adjustments	Operating profit	-1,388	-1,354	–

By customer market, sales to the food products market rose 5.1% to 30,639 million yen (29.7% of the total), supported by packages for the souvenir market, takeout packages for the food service industry and food containers for the home meal replacement market. Sales to the e-commerce market increased 12.8% to 4,131 million yen as production systems for paper delivery bags and other delivery packages were reinforced, and convenience stores rose 13.2% to 1,311 million yen. In contrast, sales to supermarkets and drug stores fell 23.0% to 3,917 million yen due to specific contractual terms amid an industry reshuffle, and sales to department stores declined 2.9% to 4,956 million yen due to stagnant domestic spending and store remodeling.

In paper bags, demand fell because of declining consumer confidence amid domestic inflation and lower inbound demand, although sales volumes of materials for overseas markets trended up. In paper cartons, the addition of Hikari Packs Ishikawa Co., Ltd. to the Group enhanced the lineup and grew the company’s share of the souvenir market, and the company is expanding primary paper containers for the food products market in response to PFAS regulations. In corrugated boxes, market share rose as the company met growing demand for e-commerce and shipping packaging. In Film Packaging, flexible packaging sales were steady, while the company notes intensified cost competition overseas for paper sanitary products for babies.

Forecast for the Year Ending December 31, 2026

For the year ending December 31, 2026, the company forecasts net sales of 106,000 million yen (up 2.8%), operating profit of 7,500 million yen (up 4.1%), ordinary profit of 7,700 million yen (up 2.2%) and profit attributable to owners of parent of 5,300 million yen (down 12.0%). The theme is accelerating cross sales with a focus on paper products. Revenue is expected to grow alongside increased market share in growth domains centered on paper products, and despite pressure from rising raw material prices, the company expects price normalization and productivity gains from investments made through the previous period.

Item (Million yen)	Forecast: Year ending Dec. 31, 2026	Actual: Year ended Dec. 31, 2025	Forecast YoY change
Net sales	106,000	103,125	2.8%
Operating profit	7,500	7,207	4.1%
Ordinary profit	7,700	7,532	2.2%
Profit attributable to owners of parent	5,300	6,024	-12.0%
Basic earnings per share (yen)	95.35	107.13	-11.0%
Dividend per share (yen)	42.00	41.33	1.6%

In its operating profit bridge for 2026, the company projects contributions from higher sales volumes (+483 million yen) and higher average sale prices (+1,750 million yen), offset by higher raw material costs (-1,500 million yen), higher other manufacturing expenses (-200 million yen), higher labor costs (-90 million yen), higher logistics costs (-70 million yen) and higher other SG&A expenses (-80 million yen), taking operating profit from 7,207 million yen to 7,500 million yen. The company plans to normalize prices by leveraging strengths in high value-added solutions and cross-selling, and expects increased supply capacity and productivity from investment in machinery and equipment to contribute to growth in market share and profit.

Shareholder Returns

Dividend per share for the year ended December 31, 2025 was 41.33 yen, up from 39.33 yen (an increase of 2 yen, or 5.1%), under the company’s policy of stable growth in dividends; these figures assume the July 1, 2025 3-for-1 stock split took place at the start of the year ended December 31, 2024. For the year ending December 31, 2026, the company forecasts a dividend per share of 42.00 yen. Focusing on the total payout ratio, the company plans to revise the dividend payout ratio and acquire treasury shares.

Topics: New Medium-Term Plan and Sustainability Progress

The company formulated a new Medium-Term Management Plan (2026-2030); its details cannot be confirmed from the materials. Other topics during the year included making Hikari Packs Ishikawa Co., Ltd. a subsidiary to enhance the paper cartons lineup, and an absorption-type merger with Nikko Print Corporation effective January 1, 2026. As of December 31, 2025, the Group consisted of nine consolidated subsidiaries in Japan, the United States and China.

Under its materiality KPIs for FY2030, the company aims to raise the proportion of net sales of FSC-certified products (paper bags, paper cartons and corrugated boxes) to 50% or more, and to reduce CO2 emissions (Scopes 1+2) by 46% from the FY2018 level of 16,662 tons to 8,997 tons. In FY2025, CO2 emissions intensity at its four plants in Japan was 1.66 g-CO2/yen of processing volume (-2.35% year on year), and the percentage of women among university graduate recruits for April 2025 was 41.2%, compared with the action-plan aim of increasing it to 35% or more. The number of companies supporting The Pack Forest Environment Fund reached a record 177 at the end of 2025.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.