Medium-Term Management Plan
“VG1000 ver2.0”

2022. 10. 14

Looking Back on the Medium-Term Management Plan VG1000 (FY21-25)
FY20

FY22

FY25

(At time of formulation)(Year 2 of Plan)(Final year of plan)

GMV (Gross merchandises value)

37.5 billion yen

64.5 billion yen

120 billion yen

Auction consignment ratio

3.5％

9.5％

50%

Overseas sales ratio

8.3％

23.4％

20%

86

164

270

Buying offices (domestic/overseas)

FY20
Formulating a mediumterm management plan
VG1000 based on theassumptions of postpandemic situation.

FY21

FY22Despite growth in sales and profits for two consecutive
periods, delays in progress against the medium-termtargets due to investment made as planned under theprolonged impact of COVID-19.

FY23~
Reviewed the assumptions ofmedium-term plan and set“VG1000 ver2.0”
Set up a Valuence Group Purpose
on longer-term perspectives.

Ⓒ 2022 Valuence Holdings Inc.

2

PURPOSE
Our purpose

Circular Designfor the Earth and UsⒸ 2022 Valuence Holdings Inc.

3

MISSION
Our mission

To Encourage More People
to Focus on What is Most Importantin Their LivesⒸ 2022 Valuence Holdings Inc.

4

Circular Design Company - The Goal for FY30

Establishing a world where things circulate around Valuence throughcustomers and partners relationships.

CustomersPartners

Creating new earning opportunities by offering a broad range of choices and promoting circularuse of the things not only owned by us but also owned by customers and partners.

Ⓒ 2022 Valuence Holdings Inc.

5

Business Model

Channels
Services

Merchandiseflows

In-house services
provided to vendors

Generalconsumers

Reusevendors

Investment domains

Retail enhancements

Business expansion

Value-added services◼ ALLU stores◼ Global e-commerce◼ Real estate brokage◼ Vehicle purchasing◼ Sports related businessetc.

◼ Inspection, data entry◼ Maintenance, cleaning◼ Posting photos◼ Merchandise management,warehousing◼ Consignment merchandiselisting◼ Delivery, etc.

Service enhancements
and expansion◼ Watch/bag repairs◼ ALLU Auction◼ toC platforms

Fulfillment
services
Full listing
services

Profit contribution from existing businesses
CashCow

Engagement

Overseas vendors

Engagement

toB businesses

Domestic vendors

Overseas
customers

toC businesses

Domesticcustomers

CtoBtoB
PurchasingAuctions◼ Buying offices ◼ Delivery◼ In home◼ Online◼ STAR BUYERS AUCTION◼ THE EIGHT AUCTION

Other sales channelsⒸ 2022 Valuence Holdings Inc.

6

Enhancing Engagement with General Consumers◼ Channels, services

Customer flows

BeforeAfter

One-way relationshipTwo-way communication◼ Repair services

Buying, repair
Existing services

Nanboya

New services◼ Purchasing at Offices◼ Purchasing at Offices◼ Real estate brokage◼ In-home purchase◼ In-home purchase◼ Vehicle purchasing◼ Delivery purchase◼ ALLU buying*◼ Online purchase* Buying service provided by ALLU

◼ Retail stores◼ ALLU Auction◼ e-commerce◼ toC platforms◼ Watch repairs◼ Bag repairs◼ Delivery purchase◼ Online purchase◼ Watch repairs

RetailGeneral consumers

General consumers

Hakkoudo

Consultation

Proposals
ChoiceALLU◼ Retail stores◼ e-commerceⒸ 2022 Valuence Holdings Inc.

7

Enhancing Engagement with Partners

Merchandise flows

BeforeProcesses, functions

Fulfillment

After

Relationship as trading partner

Enhancing engagement by increasing platform value
Full listing services

Fulfillment

Retail consignment

DeliverySalesGeneralconsumers

Partners

Delivery

Merchandise
sold at auction

MerchandisestorageSuccessful
bids

Merchandise
storage

Auction listing management

Partners

Inventory management,
auction preparations

Posting photos

Valuence

Maintenance, cleaning

Partners

Inspection, data entry

DeliverySuccessful
bids

Merchandise storage

Auction listing management

Posting photos

Maintenance, cleaning

Partners

Inventory management,
auction preparations

Inspection, data entry

Valuence

Listing

Partners can sell merchandise stored by
Valuence on consignment through ALLU.

Providing full listing services to reduce partner workloads.

Ⓒ 2022 Valuence Holdings Inc.

8Achieving the Status of a Global Reuse Platform ProviderLargest number ofbuying offices globally

toB

toC

Auctions

Retail stores, e-commerce• Directly operated offices inJapan and abroad• Overseas partner offices

ALLU USALLU Singapore
ALLU UK
ALLU France･･･

Consignments fromcustomers and vendors
around the world

No. of auction partners
in 32 countries, reachedto 2,024 and now still
growing!

Vendorsaround the world&Consumers worldwide

Building a global e-commerce platform
with inventories linked all over the world.

Ⓒ 2022 Valuence Holdings Inc.

9Positioning of the Medium-Term Management Plan “VG1000 ver2.0”◼ Building an attractive platform serving as a one-stop provider of various services for pre-owned luxury

products to a broad range of customers. Laying the foundation for the realization of a world where things
circulate around Valuence.
-FY30

-FY20
Expansion period

FY21-25
Transformation period (investment period)

Growth period (investment recovery period)

Realizing a
Circular Design Company“VG1000 ver2.0”
Implementing and enhancing various
functions to build a circular economy◼ Active expansion of thebuying offices network.

◼ Growth in the No. of auction
partners.

Accelerating the global development of acircular economy◼ Proactive investment with a view toward business growth.
Quantitative
Investment

Qualitative
Investment

Human Capital
Investment

DomainExpansion◼ Helping to develop a circular economy by maximizing
GMV in luxury reuse business.

Globalization

Planet: Promoting a circular economy to help build a sustainable world

People: Helping to build a fair and inclusive society

Transparency : A more reliable, trustworthy, and transparent companyⒸ 2022 Valuence Holdings Inc.

10

“VG1000 ver2.0” Investment Priority◼ Development of fulfillment services.
◼ Construction and development offoundations for customer data.
◼ Commence development of AI
appraisals.

FY26-30
Toward thenext stage

DomainExpansion

FY24

Qualitative
Investment◼ Rapid expansion of the domestic
office network through M&A.
◼ Aggressive launch of operations
at overseas offices.
Quantitative
Investment

FY21

FY22
FY25
Globalization

FY23
Human Capital
Investment◼ Enhancing staffing in accordance with strategies.
◼ Support for obtaining and maintaining specialized qualifications.
◼ Setting up wide-ranging training programs.
◼ Promoting diversity.

Ⓒ 2022 Valuence Holdings Inc.

11Quantitative
InvestmentGlobalization

Initiatives to Expand Purchasing◼ Re-acceleration of new office openings in preparation of post-pandemic situation.
◼ Attracting customers via optimized marketing measures.

Expanding the network ofbuying offices

Synergistic effects of marketingmeasures and CRM enhancements toattract customer traffic.
WEBTV

Expandingpurchasing◼ Opening new buying offices.
Domestics

Overseas◼ Enhancing alliances with otherindustries.
◼ Primarily opening partner
offices.

◼ Attracting customers more efficiently by focusing
on web marketing, including SEO, andstrengthened brand recognition.
◼ Strengthening web marketing overseas byleveraging the knowledge accumulated in Japan.
◼ Making progress on securing repeat customers
through CRM enhancements.
Ⓒ 2022 Valuence Holdings Inc.

12

Qualitative Investment

Globalization

Initiatives to Expand Sales◼ Further enhancing strengths as toB platform.
◼ Investing with a focus on toC services, including global services

Building a more attractive
platform for business partners.
◼ Developing fulfillment services.

Boosting customer engagement
by increasing touchpoints.
Salesexpansion◼ Developing global e-commerce services.

◼ Offering full listing services.

◼ Enhancing toC services.

◼ Partners expansion worldwide.

◼ Retail enhancement including opening
new stores.

Maximizing profits by generating Group synergies.
Ⓒ 2022 Valuence Holdings Inc.

13

Domain Expansion

Expanding Business Domains-Revenue Maximization◼ Increasing customer LTV by providing one-stop solutions to issues related to real assets.
LTV: Size of the secondary market

Early 20s
Late 30s

Buy luxury items using
first paycheck

Children;buy first homeTeens
Buy clothing
using money frompart-time job

Early 30s

Art60
billion yen

Apparel,accessories
186.9

Motorcycle
179.5
billion yen

Marriage;
buy car for family

Housing

4.0 trillion yen

Vehicle2.7 trillion yen

Luxury branditems
240.1
billion yen

billion yen

Now
Further growth in existing domains

Developing future revenue sources

Market size sources: Apparel, accessories, luxury brand items, motorized bikes: Secondhand Market Databook (2018), the Japan Journal of Remodeling;
Art objects: Japanese Art Industry Market Research Survey 2016, Art Tokyo Association;
Automobiles: Used-Car Distribution Market in Japan: Key Research Findings 2017 (press release), Yano Research Institute; Housing: Basic Plan and Estimate on Housing(Japanese Nationwide Plan), Ministry of Land, Infrastructure, Transport and TourismⒸ 2022 Valuence Holdings Inc.

14

Domain Expansion

Expanding Other Businesses◼ Increasing corporate value by creating a new circular economy that connects things and ideas.

Managing the Nankatsu SC
professional soccer team.
Promoting global IP businessdevelopment via Captain Tsubasa IP
asset.

* D.LEAGUE is a professional dance league originated in Japan.

Operating HATTRICK
sports auctions.
Creating a new sport culture byattracting new fans and generating
revenue for teams and athletes.

Participation in D.LEAGUE*
22-23 SEASON.
Formed Valuence INFINITIES andjoined from this season. Expecting toraise awareness while generatingsynergies with the group business.

Ⓒ 2022 Valuence Holdings Inc.

15

Human Capital
Investment

Maximizing the Value of Human Resources◼ Creating a foundation to support the promotion of management strategies and measures from a medium- tolong-term perspective.

Quantitative
Investment

Qualitative
Investment

DomainExpansion

Globalization

Human Capital
Investment

Specialization
Human Resource
Development

CareerDevelopment
SupportDiversity
Management
Enhancement

Health and Safety
Management

Diversity
Management

Organizational
Culture FosteringⒸ 2022 Valuence Holdings Inc.

16

Examples of Luxury Brand Earning Results◼ Luxury brands' performance rebounded well above pre-COVID levels.

LVMH(Billion euro)

KERINGHERMESNet sales (second half)
Operating profit (second half)

642.1
Net sales (first half)
Operating profit (first half)

536.7

468.2

446.5

367.2
176.4

158.8
136.6

131.0

89.8

99.3

171.2
99.6

FY18
FY1859.6

114.5

102.2

83.2

FY19
FY19

FY20
FY2039.1

FY21
FY21

* Prepared by Valuence based on each company's financial data.

FY22
FY22

FY18FY1863.850.147.7

FY20FY20FY21
FY2154.735.928.231.3

FY19FY1968.8

FY22FY2220.823.620.5

FY18FY18FY19FY19FY20FY20FY21
FY2123.7
FY22FY22Ⓒ 2022 Valuence Holdings Inc.

17

Secondhand Market Size and Overseas Expansion

Overseas pre-owned Products Market

Global market for pre-owned luxury
products expected to continue to grow.

75% of global market for
pre-owned luxury products
is in Europe and the U.S.

CAGR8%€ 21B€ 31B

To a Large Market.

(Approx.
4.0 trillion yen)

Aiming to Achieve Medium-(Approx.
2.7 trillion yen)

Term Management Plan.
2020年
20202025年
2025(Projection)*1 Subject products: watches, jewelry.
*2 Prepared by Valuence based on the Boston Consulting Group “The Secondhand Opportunity in Hard Luxury (2020) ”.

Ⓒ 2022 Valuence Holdings Inc.

18

“VG1000 ver2.0” Key Performance Indicators“VG1000 ver2.0”

FY20

FY22

FY25

FY25

(At time of formulation)(Year 2 of Plan)(Targets at time of formulation)(Target update)

Net sales

37.9 billion yen

63.3 billion yen

100 billion yen

100 billion yen

No. of Domestic offices

84130

170170No. of Overseas offices

23430

100

No. of Overseas partners

109511More thanOverseas ratio of sales

8.3%

23.4%

50020％

1,00030%Ⓒ 2022 Valuence Holdings Inc.

19

“VG1000 ver2.0” Important Financial Goals

GrowthProfitability

Shareholder returns

Operating profit
growth rate

Return on equity

Dividend payout ratio

FY22-

CAGR 40%

FY2520%30%

or betterⒸ 2022 Valuence Holdings Inc.

20

Sustainability

Themes Addressed through Business Activities
PlanetPeople

Transparency

Realizing a sustainable planet andcircular economy

Establishing a fair andinclusive society

Toward a transparent,secure and trusted organization◼ Ascertaining ecological footprints of products
handled.

◼ Increasing customer satisfaction.

◼ Enhancing corporate governance.

◼ Improving employee engagement.

◼ Enhancing data privacy and security.

◼ Encouraging waste reductions and recycling.

◼ Promoting diversity and inclusion.

◼ Implementing efforts to address climatechange.

◼ Promoting human resource development.

◼ Implementing measures to combat money
laundering.

◼ Practicing responsible procurement.

◼ Promoting responsible business activities.

◼ Promoting culture and education.
◼ Developing future leaders.

Planet / World
Stakeholders
Employees

Customers

Trading
partners

Investors

Futuregeneration

LocalcommunitiesⒸ 2022 Valuence Holdings Inc.

22

Commitment to Sustainability◼ Set specific goals for E (Planet), S (People), and G (Transparency) to contribute to a sustainable society andachieve our sustainable growth.

PlanetPeopleTransparency

By FY30

By FY25

By FY30

Employee engagement score

Ratio of female Directors

4.2

30％

Carbon neutralityⒸ 2022 Valuence Holdings Inc.

23

Measuring Scope 3 Emissions in Addition to Scopes 1 and 2◼ FY21 CO2 emissions measurements and approaches to achieve reductions.

FY21 emissions (t-CO 2 )Scope 1

265

Scope 2

1,161

Scope 3

22,589Approaches toward FY30
◼ Review of fuel consumption of company
vehicles and conversion to electric vehicles.
◼ Introduction of renewable energy for electricity
used in stores and offices.

Transportation: 8,156◼ Reduction of the weight of packing materials.
◼ Conversion to low-carbon transportation.

Procurement: 12,170◼ Identification of supplier emissions.
◼ Preferential selection of low-carbon suppliers.

Others: 2,263Total◼ Repurchasing of products sold.
◼ Recommendation of low-carbon means oftransportation for business trips.

24,015 t-CO2

Scope 1: Greenhouse gas emissions from air conditioning and commercial vehicles used in stores, offices, and warehouses
Scope 2: Greenhouse gas emissions from electricity used in stores, offices, and warehouses
Scope 3: Greenhouse gas emissions from product transportation and procurement (purchased products, advertising, etc.)Ⓒ 2022 Valuence Holdings Inc.

24

Support for International Initiatives◼ Promoting approaches toward carbon neutrality.

TCFD(Task Force on Climate-Related Financial Disclosures)

An international initiative that encourages corporations todisclose climate-related information affecting their finances.

Endorsed the TCFD and joined the TCFD
Consortium to promote disclosure ofgovernance, strategy, risk management, andindicators and targets related to climate changerisks and opportunities based on the TCFD
recommendations.

SBT (Science Based Targets)
Initiative
An international initiative promoting the setting of reduction
targets consistent with scientific knowledge committed to thegoal of keeping global average temperature increase to no
more than 1.5C relative to pre-Industrial Revolution level.

Submitted a letter of commitment to the SBT
Initiative to obtain SBT certification.

Ⓒ 2022 Valuence Holdings Inc.

25

Applying for B Corp Certification◼ Aiming to be a better company for society and the environment.

B CorpOperated by B Lab, a US-based nonprofit, B Corp is a program thatcertifies companies that make significant contributions to the public interest
based on due consideration for environmental and societal issues.
Companies are awarded B Corp certification if they are judged to satisfy
certain standards, including assessments of activities intended to have apositive impact on employees, customers, suppliers, communities, andthe environment.

A company that expresses and acts in waysthat are better for society and the environment.
By obtaining "B Corp" certification, which is increasingly being obtained not
only in the U.S. but also around the world, to demonstrate our commitment tosociety and the environment.

Ⓒ 2022 Valuence Holdings Inc.

26

Human Capital Investments◼ Drafting and executing strategies to strengthen the organization and human resources.

Sustainableimprovement
in corporate
value

Business Growth
Organizational capability

Human Resources Growth

Recruitment and job
assignment

Accelerating pace of
globalization

Compensation anddevelopment

Increasing corporate value
Promoting diversity andinclusion

Management
capable ofadapting tochange

Individual
growth andsuccess

RetentionⒸ 2022 Valuence Holdings Inc.

27

Director Structure

Name

Shinsuke
Sakimoto

SusumuMuguruma

Shinichiro
Sato

Ryoji
FukayaKenta
Takami

HirokiTomiyama

Yoshihiko
TakuboKenji
Fuma

Masahide
KamachiTakashi
Goto

Emi
Omura

Title

Representative
Director

Director

Director

Director

Full-time
Audit andSupervisory
Committee

Director

Director

Director

Audit andSupervisory
Committee

Audit andSupervisory
Committee

Audit andSupervisory
Committee

Internal

Internal

Internal

Internal

Internal

External

External

External

External

External

External

Independent

Independent

Independent

Independent

Independent

Male

Male

Male

MaleFemale

◆◆

◆

◆

Attributes

Internal/external
Independence
GenderMale

Male

Corporatemanagement◆◆

Finance,accounting

MaleMale◆

MaleMale◆

◆

Skill

Legal affairs, risk
management
Personnel Affairs◆

International
business
Sustainability

◆◆◆◆◆

◆

Technology◆

Marketing◆◆◆◆◆*1 The skills that Company particularly expect are marked with ◆.
*2 Above director structure is tentative and will be in place after the conclusion of the Eleventh Regular General Meeting of Shareholders scheduled for November 25, 2022.

Ⓒ 2022 Valuence Holdings Inc.

28

“VG1000 ver2.0” ESG Targets
Acquiring SBT certification.
Formulating and implementing a greenhouse gas emissions
plan to achieve carbon neutrality by FY30.

PlanetPeople

Increasing employee engagement score to 4.2 by FY25.

Transparency

Complying all items with revised Corporate Governance
Code with Prime market criteria.

Ⓒ 2022 Valuence Holdings Inc.

29