Wacoal : FY2023 Financial Results Presentation Transcription

Consolidated Financial Summary

of the Fiscal Year Ending

March 31, 2023

May 12, 2023

Wacoal Holdings Corp.

Hello, everyone. Thank you very much for joining us today.

I am Akira Miyagi, Director, Vice President, Executive Officer, and CFO of Wacoal Holdings Corp.

Thank you very much for attending this information session.

I will now explain Wacoal Holdings' financial results for Consolidated Financial Summary of the Fiscal Year Ending March 2023.

Changes From the Previous Year

• 1. Implementation of International Financial Reporting Standards (IFRS)
• IFRS has been applied on a voluntary basis from the beginning of FY2023 in order to provide more useful information and improve convenience
• "Business profit," calculated as revenue less cost of sales and selling, general and administrative expenses, is newly disclosed
• Fluctuation risk in net income is reduced as fluctuations in stock market value, except for some stocks, will no longer affect the profit and loss statement
• Results of all subsidiaries are disclosed as if the fiscal year ended in March as required by IFRS accounting standards where the fiscal years of all group companies must be unified
• The figures for the cumulative consolidated term of the previous year are also disclosed according to IFRS
• 1. The Impact of the Change in Revenue Recognition at Wacoal
• Sales of consumption transactions in department store, etc., were changed to an over-the-counter price basis in the period under review
• Because this change will increase sales revenue and SG&A expenses by the same amount, operating income will not be affected
• This change has boosted fiscal year sales revenue by approximately ¥5.4 billion (main factor of boost in sales revenue and
  SG&A expenses).

2

First, as we had also issued in Q3, it states the changes in accounting standards from the previous quarter. Please check back later.

1. FY2023 4Q financial Overview

3

We will now discuss the results for the last three months.

Executive Summary for FY2023 4Q Accounting Period (Jan-Mar)

Revenue

44.7 billion yen

＜YoY＞ +¥2.6 billion（+6%）

＜planning difference※＞ -¥1.4billion（-3%）

Revenue increased but fell below the revised plan*1 due to struggles at Wacoal, China, Intimates Online, Inc., and other companies

Revenue at Major Subsidiaries（billion	previous year	vs FY2023	YoY	FY2023	vs FY2023
of yen）	Results	4Q Results	revised plan*1	revised plan
Wacoal	19.4	20.6	1.2	21.5	-0.9
Wacoal International Corp. (U.S.)	6.0	6.5	0.5	6.8	-0.3
Wacoal Europe Ltd.	4.4	5.2	0.8	5.5	-0.3
Wacoal China Co., Ltd.	2.8	3.0	0.2	3.2	-0.2
Peach John Domestic only	3.1	2.9	-0.2	3.1	-0.2

Business Loss

-0.9 billion yen

＜YoY＞ +¥3.8 billion

＜planning difference※＞ +¥2.1 billion

Business losses occurred due to a slowdown in sales, and the revised plan*1 was surpassed

• While sales were weaker than expected, the impact of the partial revision of Wacoal's flexible retirement system*2 and the reversal of earnout obligations in the United States contributed to profits more than expected, and thus surpassed the revised plan

Business profit at Major Subsidiaries	previous year	vs FY2023	YoY	FY2023	vs FY2023
（billion of yen）	Results	4Q Results	revised plan*1	revised plan
Wacoal	-1.7	-1.4	0.3	-2.8	1.3
Wacoal International Corp. (U.S.)	0	0.1	0.1	-0.4	0.5
Wacoal Europe Ltd.	0.5	0.9	0.4	0.9	0
Wacoal China Co., Ltd.	-0.1	-0	0.1	0.2	-0.2
Peach John Domestic only	0.1	-0	-0.2	-0.1	0

*1 The planned figures are based on the document disclosed on February 10, 2023, "Notice Concerning Revision of Earnings Forecasts and Recording of Impairment Losses" *2 "Results of Special Operation of Flexible Retirement System and Revision of Flexible Retirement System" as of February 10, 2023

4 https://www.wacoalholdings.jp/ir/topics/files/wacoalholdingsnews20230210_2.pdf

See page four.

First, I will explain the results for the last three months, Q4. For Q4, three months of the year, revenue increased 6% over the same period last year.

On the other hand, against the revised plan disclosed on February 10, Wacoal, China, Intimates Online, Inc., and other companies fell short of their expected sales and missed the plan by 3%.

Although the business posted a business loss of JPY900 million, the partial revision of Wacoal's flexible retirement system and the reversal of earnout obligations established at the time of the acquisition of Intimates Online, Inc. had more positive impact on earnings than was expected at the time, and overall cost reductions also progressed, resulting in a business loss that was significantly higher than the revised plan disclosed in February.

The status of major subsidiaries is described on the following pages and thereafter. Please check back later.

FY2023 4Q(Jan-Mar): Business Conditions at Major Subsidiaries（Japan）

Wacoal 4Q sales trend	vs FY2022
	vs FY2020

Peach John 4Q sales trend	vs FY2022
	vs FY2020

Note: The graph shows the monthly figures before the adjustments in settling accounts. （Including internal sales Excluding the impact of change in revenue recognition）

Note: The graph shows the monthly figures PJ (Japan) before the adjustments in settling accounts.（Including internal sales, Excluding receiving shipping charges）

	122
108
	99
	100
88	92

68

【Revenue】（） Excluding the impact of change in revenue recognition

➢ vs FY2022 4Q ＋6％（-1%） vs FY2020 4Q +0％（-6％）

【FY2023 4Q Topics】

• The desire to go out is recovering, but the number of customers visiting our stores is sluggish due to a growing desire to save money

Sales by channel(Japan)

department stores:+5％（vs FY2020 -3％） directly-managed stores:+7％（vs FY2020 -1％）

GMS, Supermarket:Wacoal -2％（vs FY2020 -18％） Wing +1％（vs FY2020 -13％） Own EC： Company's EC sales +8%（vs FY2020 +54%）

5

110		116
	98
		100
100	93
	91

【Revenue】 the performance of PJ (Japan), includes internal sales

➢ vs FY2022 4Q -5％ vs FY2020 4Q ＋8％

【FY2023 4Q Topics】

• The effect of marketing measures for in-housee-commerce was lower than expected, causing some struggles

Sales by channel（Japan）

Mail-order:-11％（vs FY2020 ＋5％）

Retail stores:+4％（vs FY2020 ＋10％）

Other EC :-14％（vs FY2020 ＋16％）

Starting from page five, I will explain the business conditions of our major subsidiaries over the past three months.

First, I will talk about Wacoal and Peach John.

Excluding the impact of the change in revenue recognition, Wacoal's sales were on par with the same period of the previous year. Though opportunities for people to leave their homes increased with the easing of COVID-19 behavioral restrictions, the number of customers visiting our stores was below expectations due to the growing desire among people to save money, resulting in a very difficult three-month period.

With consumer purchasing opportunities at physical stores recovering, sales at Peach John's directly managed stores were up year-over-year on the back of strong sales of mainstay products. On the other hand, results from our own EC platform fell year-over- year due to competition from recovering store sales and marketing measures using a new muse that did not reach expectations.