Wacoal : FY2023 First Quarter Business Presentation

FY2023 First Quarter

Business Results

Presentation

August 10, 2022

Wacoal Holdings Corp.

(Supplementary material) Changes From the Same Period of the Previous Year

1. Implementation of International Financial Reporting Standards (IFRS)
2. • IFRS has been applied on a voluntary basis from 1Q 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 in 1Q of the previous year are also disclosed according to IFRS
3. The Impact of the Change in Revenue Recognition at Wacoal
4. • 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 1Q sales revenue by approximately JPY1.4 billion (main

2	factor of boost in sales revenue and SG&A expenses).

Executive Summary for FY2023 1Q Accounting Period (Apr-Jun)

		Revenue			At the planned level due to continuing strong performance in
				Europe and improved domestic sales
		49.0 billion yen
					The number of customers returning to Wacoal's stores are low and the revenue is only slowly recovering.
						In addition to poor performance in China, revenue in the U.S. has slowed down. Meanwhile, revenue in Europe
		＜YoY＞ +¥6.6 billion（+15%）				has been strong while the continuing depreciation of the yen against key currencies also contributed
＜planning difference＞ +¥0.03 billion（+0.1%		）	Despite their struggling EC sales, Peach John performed about the same as the same period of the previous year
						with store expansions and sales of Nanasai and Ai improving

Business Profit

2.4 billion yen

＜YoY＞ +¥0.4 billion（+21%）

＜planning difference＞ +¥0.6 billion（+34%）

Exceeded the plan due to improved domestic sales and SG&A expenses control

• Exceeded the amount of the same period of the previous year thanks to the reduction in fixed costs as part of the restructuring of Wacoal's earnings structure
• Decreased due to losses from Intimates Online, Inc. (IO)'s operations in China and the U.S.
• Peach John maintained a high level of profit, although profits were reduced due to increased sales promotion expenses and other factors

Operating Profit

2.5 billion yen

＜YoY＞ +¥0.01 billion（+1%）

＜planning difference＞ +¥0.6 billion（+36%）

About the same as 1Q of the previous year due to the inclusion of restructuring costs.

• Other expenses include restructuring costs incurred by the subsidiary, Lecien Corporation.

3

Revenue and for FY2023 1Q Accounting Period

While progress is being made in domestic structural reform, both the U.S.'s poor percent in return on sales and SG&A ratio, have worsen.

Revenue YoY	（billions of yen）
Wacoal		+5.0
Wacoal Europe Ltd.		+0.9
Nanasai・Lecien・Ai		+0.6
Other overseas Corporations		+0.6
Peach John		Same as
	previous period
Wacoal International Corp. (U.S.)	ー 0.5
Wacoal China Co., Ltd.		ー 1.2
FX Impacts		+2.3

Sales margin	FY2023 1Q	FY2022 1Q
Wacoal	59.2%	60.6%
(Without the effect of settlement adjustments)	56.5%	56.8%
Peach John Domestic only	67.6%	68.2%
Wacoal International Corp. (U.S.)	54.4%	57.1%
Wacoal Europe Ltd.	57.5%	57.6%
Wacoal China Co., Ltd.	68.5%	68.0%

SGA ratio	FY2023 1Q	FY2022 1Q
Wacoal	56.4%	63.2%
Peach John Domestic only	51.8%	49.3%
Wacoal International Corp. (U.S.)	48.5%	42.4%
Wacoal Europe Ltd.	44.1%	41.8%
Wacoal China Co., Ltd.	83.8%	64.8%

Note: Wacoal Europe is calculated excluding brand amortization cost

Business Profit YoY	（billions of yen）
Wacoal		+1.2
Other overseas Corporations	+0.1

Cost of sales

	20.3	Sales Profit ratio
49.0	58.5%
		（ー0.1%）
vs FY2022 1Q
＋6.6 (＋15％)
		28.7

	Nanasai・Lecien・Ai	+0.2
SGA ratio	WEL	Same as
previous period
Peach John	-0.1
53.7％
Wacoal China Co., Ltd.	-0.4
（ー0.3%）
WIC	-0.7
販管費
FX Impacts	+0.1
26.3

Effect of change in	vs FY2023 1Q
revenue recognition to	＋3.8 (＋15％)
Wacoal sales revenue
is JPY 1.4 billion
FY2023 1Q	FY2023 1Q
Revenue	Sales margin

VS FY2022 1Q ＋3.4 (＋15％)

Effect of change in revenue recognition to Wacoal SG&A expenses is JPY 1.4 billion

Business Profit ratio

4.9％（+0.3pt）

2.4

FY2023 1Q

Business Profit

4

FY2023 1Q Profit impact items

Operating income is similar to the same period of the previous year due to restructuring costs (other expenses) being included

Temporary expenses from restructuring are included and consist of:

• Recording of expenses in relation to the liquidation of a subsidiary of Lecian Corporation.
  ・Loss on sales of noncurrent assets, etc.

Increase in finance income (foreign exchange gains and revaluation of marketable securities gains and losses) and investment gains and losses by the equity method

Finance income

and expenses

Corporate income

tax expenses

（billions of yen）

		Other income and		1.11	1.11
		expenses				3.58
							vsFY2022
		0.09
					1Q
							vsFY2022
2.38			vsFY2022	2.47		＋0.67
			1Q
		（＋149％）
		1Q	＋0.68
vsFY2022	-0.4		vsFY2022			（＋23％）
	（-82％）
1Q		1Q
＋0.42				＋0.01
（＋21％）				（＋1％）

FY2023 1Q	FY2023 1Q	FY2023 1Q
Business Profit	Operating Profit	Profit before income taxes
		and equity in net profit of

		Non-controlling
			interest
		0.06
2.47		2.40
vsFY2022				vsFY2022
1Q				1Q
＋0.83				＋0.78
（＋51％）			（＋48％）

FY2023 1Q	FY2023 1Q
Profit	Net Profit Attributable
	to Owners of Parent

5

affiliated companies