Message from the President

This fiscal year marks the final year of our OVOL Medium-term Business Plan 2026, a three-year period positioned as a time for creating bold and innovative mechanisms and measures to realize OVOL Vision 2030.

Unfortunately, the current economic environment remains uncertain. In addition to the ongoing Russia–Ukraine conflict, supply chain disruptions stemming from instability in the Middle East and rising energy and raw material costs have created further challenges. Against this backdrop, many advanced economies are experiencing declining (or slowing) population growth and rapid digitization, resulting in a significant contraction in paper demand.

Under such conditions, our Non-Japan Wholesaling segment faced considerable difficulties. The recovery of the German paper distribution company that our group acquired at the end of 2024 lagged far behind expectations, forcing us to record a substantial ordinary loss in fiscal 2025. Several other subsidiaries outside of Japan also fell significantly short of plan or posted ordinary losses, leading the segment as a whole to report an ordinary loss.

At the same time, we have already begun taking decisive actions. We implemented price revisions for our main product lines in many of our key markets from spring onward, carried out two large-scale business restructuring initiatives at the above-mentioned German company, and initiated fundamental measures and growth investments at several subsidiaries outside of Japan whose performance has stagnated amid rapidly changing market conditions. As a result of these initiatives, we expect a significant recovery in earnings in the Non-Japan Wholesaling segment in fiscal 2026.

In recent years, we have been proactively and swiftly undertaking strategic and complementary acquisitions outside of Japan. These acquisitions equate to indispensable mechanisms and measures for realizing our OVOL Vision 2030 goal of becoming “the world’s leading paper distribution group.” From this fiscal year onward, we will focus on finalizing our initiatives.

Meanwhile, under our financial capital strategy, which we are vigorously advancing alongside the three fundamental principles of OVOL Medium-term Business Plan 2026, we are striving to enhance capital efficiency while maintaining a sound financial base by reducing cross-shareholdings and reviewing our own real estate assets, and we are enhancing shareholder returns through dividend increases and share buybacks. Through these efforts, we aim to maintain a stable PBR of at least 1.0 and pursue further improvement.

As part of our commitment to sustainable management, we are accelerating investments in human capital and digital transformation. These initiatives will drive operational efficiency, productivity gains, strengthened competitiveness, and clear differentiation. By significantly enhancing employee engagement, we will advance toward both the realization of our goal of becoming “the world’s leading paper distribution group” and the ultimate qualitative goal of OVOL Vision 2030: becoming “a group that strives to be considered a trustworthy and engaging partner both within and beyond the paper industry.”

We will continue to pursue the creation of bold mechanisms and measures, and we respectfully ask our shareholders and all other stakeholders for their continued understanding and support for our efforts to realize OVOL Vision 2030.

Akihiko Watanabe
Representative Director, President & CEO
June 2026