Fiscal Year Ending March 31, 2021
First Quarter Financial Results
Presentation[U.S. Accounting Standards]

Wacoal Holdings Corp.
July 31, 2020
1

Matters Related to Business Segment Changes, etc.
Starting from the current consolidated first quarter, information on Ai Co., Ltd., which was previously presented
in our “Wacoal Business (Domestic)” segment and “Peach John Business” segment, is now reflected andpresented in our “Other” segment following review of certain management classification of performance within
our group.
The segment information for the previous consolidated cumulative first quarter has been prepared based on thesegments reported after this change.
（Please see slide 57 for an outline of the new business segment)

Outline of business segment changes【Previous segment】

Wacoal Business(Japan)【New segment】
Wacoal Corp.,Wacoal Holdings Corp.,
Other sales companies, Distribution
company, Apparel Manufacturing
Companies etc.

Wacoal Business (Japan)

Ai

Wacoal Business (Overseas)

Wacoal Business (Overseas)

Peach John Business

Other Businesses

Other Businesses（Lecien,Nanasai etc.）2Fiscal Year Ending March 31, 2021
First Quarter results (April – June)

Akira Miyagi
Director and Managing Corporate Officer
Wacoal Holdings Corp.
3

Executive Summary for FY2021 1Q (Apr-Jun)Note: For China only, Jan-Mar

Both Japan and overseas businesses experienced significant declines in sales due to store closuresresulting from the spread of the coronavirus outbreak(As a result of easing lockdowns and the lifting of the state of emergency declaration, as of June,
operations at stores around the world have restarted)Net sales: -40% (Wacoal -47%, US -32%, Europe -53%, China -44%)
Operating loss: -¥4.5 billion (Wacoal business (Japan) -¥3.1 billion, Wacoal business (overseas) -¥1 billion, Others -¥400 million)¥28.6 billion -¥18.8 billion year over year (YoY), (-40%)

Net salesThough Wacoal’s own EC business was strong (+91%), sales declined significantly in the wholesale and retail businesses due to the large
impact of store closures
Overseas, though there were positive effects from the new consolidation of IO Inc., sales decreased significantly in the US, Europe, China,
and other overseas locations due to the impact of store closures

Operating loss-¥4.5 billion -¥8.1 billion YoY

Though efforts to reduce costs were implemented at each company, an operating loss was recorded due to the inability to absorb the dropin sales profit brough about by decreased sales
Domestically, Peach John turned profitable due to EC business growth and contributions from efforts to improve productivity that have been
underway since last year

Losses before income taxes and equity
in net income of affiliated companies-¥2.9 billion -¥4.4 billion YoY

A loss was recorded due to the significant impact of the operating loss
Net valuation gain of ¥800 million was recorded on securities and investments

4

FY2021 1Q: YoY Increase/Decrease in Net Sales

 Net sales: Down ¥18.8 billion(of that, the effect of currency exchange accounted for about ¥250 million)（billion of yen）

Wacoalwholesalebusiness-9.9

FY2020 1Q
results¥47.3
billionRetail busines -1.9
WEB business＋1.1
Wacoal America -2.5
IO Inc. ＋0.9

Wacoal retailand WEB
Wacoal otherbusinesses
businesses-0.8
Deletion ofInterdepartment
transactions-1.1

・Wacoal innerwear -6.1
・Wing innerwear -2.0
・CW-X, others -1.4
・Nightwear -0.5
EC sales through own
platform for the above
products＋0.6

Hong Kong W -0.2
Singapore -0.1
Philippines -0.2
India, Thailand material
companies, etc. -0.2
Other account adjustments, etc.

US
-1.6

Sales decreases at other sales
companies and sewing/logistics
subsidiaries -0.6
Reserves for returned goods
adjustments vs LY-1.1 (account settlement adjustment)

Decrease in construction orders
Europe-1.8

UK -0.8
US -0.5
Europe -0.3

China
-1.3

Other
overseas
corporations-0.9

Department stores -1.2
Other -0.2
Own EC +0.1

FX impacts
-0.3

PJ
-0.05

Nanasai-0.7

Remainedstrong in Japan

Other subsidiaries
and accountadjustments+0.5
Lecien
-0.3

Ai
-0.6

Resort wear -0.5
Innerwear -0.1

FY2021 1Q
results¥28.6
billion5

FY2021 1Q: YoY Increase/Decrease in Operating Income
YoY differences in sales
profit and SG&A expenses

 Operating income: Down ¥8.1 billion
FY2020 1Q
results¥3.6
billionWacoalwholesalebusiness-4.7

Wacoalback office
SG&A
＋1.3

Sales profit drop -1.1
SG&A cost reduction +0.5
US
-1.7

WacoalMajor
Overseas
Subsidiaries
Major Japan
Subsidiaries

Wacoal America -1.2
(Sales profit drop -1.5, SG&A cost reduction +0.3
IO Inc. -0.5
(sales profit +0.6, SG&A -1.1)
Note: IO Inc. is subject to new consolidation

Europe-0.6
Wacoal operating income -3.9
・Decrease in sales profit due to the impact of lower Wacoal sales -6.5
・SG&A expense reduction +2.5 (labor costs +0.4, general expenses +1.9, etc.)

China
-0.3

S, G&A Expenses

FY2021 1Q
FY2020 1Q
results,
results,
Year on Year
3 months
3 months

FY2021 1Q
results,
Year on Year
3 months

14.7

8.2

-6.5

13.3

10.8

-2.5

America

2.7

1.7

-1.0

1.8

2.5

0.7

Europe

2.0

0.9

-1.1

1.6

1.0

-0.6

China

1.9

1.3

-0.6

1.5

1.2

-0.3

Peach John

2.0

1.9

-0.1

2.0

1.7

-0.3

Lecien

0.5

0.3

-0.2

0.6

0.4

-0.2

Nanasai

0.8

0.4

-0.4

0.8

0.6

-0.2

Other（Including intersegment transactions,etc. eliminetions）

2.3

0.6

-1.7

1.7

1.6

-0.1

total

26.9

15.3

-11.6

23.3

19.8

-3.5

・Profit decrease for subsidiaries -1.0
・YoY difference related to reset of retirement benefits cost (other than service
costs)
・Reduction of paid holiday allowance
・YoY difference related to the elimination of P/L transactions accompanying adecrease in intra-Group transactions

FX impacts
+0.02
Other
overseas
corporations-0.3（billion of yen）

Japan +0.4
(Sales profit increase 0.+0.1, SG&A cost reduction +0.3)
Overseas -0.1

Sales profit drop -0.5
SG&A cost reduction +0.2

Wacoal retailand WEBbusinesses-0.4

Sales profut
FY2020 1Q
results,
3 months

PJ+0.3

Nanasai
-0.2

-¥4.5

Lecien±0billionAi-0.1

Profit decline in Hong Kong,
Singapore, Philippines, main
factories, etc.

FY2021 1Q
results

Other
subsidiaries
and accountadjustments-1.3

6

(Reference)
Changes in sales for major companies and business units for the Jan – Jun period (rate of change)
 Sales have been recovering since the lifting of the state of emergency declaration
 For June, the domestic wholesale business had favorable sales on a store basis, but was impacted byinventory control implemented by customers, etc.
(Note: Wacoal store-based sales are noted on slide 50)

Net sales change rate★1
Jan.

Feb.

Mar.

Apr.

May

Jun.

Wholesale Business Div.

- 1.1%- 2.8%- 32.7%- 71.5%- 48.7%- 21.7%Retail and WEB Business Dept.

+4.9%

+2.7%

- 7.5%- 42.7%- 12.8%+17.4%+13.7%+15.4%+21.1%+76.4%+106.1%+84.6%

Wacoal（★２）- 0.9%- 1.8%- 29.2%- 72.1%- 49.8%- 16.3%

Wacoal America, Inc.（★３）(Local Currency Basis USD'000)

+9.1%

+2.6%

- 10.8%- 68.3%- 55.0%- 26.6%+16.7%+34.5%+14.3%- 25.8%+36.7%+30.2%- 9.6%+8.8%- 39.9%- 73.3%- 54.9%- 20.2%- 3.5%- 80.9%- 48.2%- 36.7%+10.6%- 4.6%

Peach John（Japan）+17.5%+20.6%- 14.1%- 19.0%- 6.6%+32.4%Ai+2.4%- 14.1%- 14.8%- 36.1%- 28.8%- 20.7%

Lecien（Japan）- 23.1%- 7.9%- 19.0%- 43.9%- 40.9%- 38.4%

Nanasai- 1.1%- 7.5%- 34.9%- 83.8%- 73.7%- 50.5%* Increase / decrease rate only for in-house EC in WEB business Dept.

* Among Wacoal America, Inc.,the rate of increase/decrease in EC sales including own and other company.

Wacoal Europe Ltd.
(Local Currency Basis GBP'000)
Wacoal China Co., Ltd.
(Local Currency Basis CNY'000)★1 The figure before the transfer of internal expenses.Shows year-on-year changes, including internal sales.
★2 In addition to the three businesses listed, the figures include sales of other businesses and eliminations between business divisions.
★3 The figures for Wacoal America only are disclosed. It is not the figures of sales of Wacoal International including Intimates Online Inc.(LIVELY）.

7

FY2021 1Q: Financial Results Overview(Millions of yen)

FY2020 1Q
results,
3 months

Consolidated net sales% Of sales

47,313

FY2021 1Q
results,
3 months

Year on Year
% Of sales

28,551

Change% Change-18,762- 39.7%

Cost of Sales

20,40643.1

13,271

46.5-7,135- 35.0%

Sales profut

26,90756.9

15,28053.5-11,627- 43.2%

S, G&A Expenses

23,26349.2

19,752

69.2-3,511- 15.1%

Operating Income ( loss )

3,644

7.7

-4,472

ー-8,116ー

Other income (expenses)

814

ー

730

ー

-84

- 10.3%-2,938

ー

824

ー

3,762

ー

Income before taxes ( loss )

1,520

3.2

-2,918ー-4,438ー

Net income attributable (loss) to Wacoal
Holdings Corp.

1,192

2.5

-3,195ー-4,387ー

Reference figure:
Income before income taxes and equity in net income of affiliatedcompanies not taking into account A

4,458

9.4

-3,742

ー-8,200ー

A:Valuation gain (loss) on marketablesecurities and investments – net

8

FY2021 1Q: Financial Results Summary (by segment)(Millions of yen)

FY2020 1Q
results,
3 months

ratio

FY2021 1Q
results,
3 months

Year on Year
ratio

Change% Change

Wacoal Business (Japan)

26,583

56.2

15,52954.4-11,054- 41.6%

Wacoal Business (Overseas)

13,597

28.7

7,847

27.5

-5,750- 42.3%

Other Businesses

7,133

15.1

5,175

18.1

-1,958- 27.4%47,313100

28,551

100-18,762- 39.7%

Consolidated net sales

FY2020 1Q
results,
3 months

% Of
sales

FY2021 1Q
results,
3 months

Year on Year
% Of
sales

Change% Change

Wacoal Business (Japan)

1,974

54.2

-3,058ー-5,032ーWacoal Business (Overseas)

1,862

51.1

-1,027ー-2,889ー

Other Businesses

-192

ー

-387

ー

-195

ー

3,644

7.7

-4,472

ー-8,116ーOperating income ( loss )9

FY2021 1Q: Reporting by Segment [Wacoal Business (Japan)]
Sales decreased significantly due to the impact of store closures at directly-managed stores and bycustomers during the state of emergency declaration
Net sales¥15.5 billion

While physical stores were closed, Wacoal’s own EC business achieved high growth by capturing demand from those staying at home

Operating loss
-¥11.1 billion YoY (-42%)-¥3.1 billion-¥5 billion YoY

Wacoal’s sales decreased significantly, and though efforts were made to cut costs, the decrease in sales could not be absorbed(Millions of yen)
FY2020 1Q
results,
3 months

ratio

20,494ー

10,562

ー-9,932

6,326

ー

5,524

ー

-802

Others-1,355ー-2,483ー-1,128Wacoal

25,46595.8

13,603

87.6-11,862

1,118

4.2

1,926

12.4

808

15,529 100.0-11,054

Wholesale Bussines Div.
Retail and WEB
Business Dept.

Intersegment transactions, etc.
eliminetions

Net sales

26,583 100.0

FY2021 1Q
results,
3 months

Year on Year
ratio

Change

4,159

20.3

-526

ー

-4,685

679

10.7

237

4.3

-442

Others-3,516ー-2,254ー

1,262

Wacoal1,321

5.2-2,543ー-3,864

Intersegment transactions, etc.
eliminetions

653

ー

-515

ー

-1,168Operating income ( loss )

1,974

7.4

-3,058ー-5,032Wholesale Bussines Div.
Retail and WEB
Business Dept.

comment% Change- 48.5% ■Wholesale business: In addition to store closures, the business was also affected by customer

inventory controls in June

- 12.7% ■Retail business: Sales decreased significantly due to directly-managed store closures. June store-

based sales recovered to 94% YoY.
■Own EC: Sales were favorable as the business benefited from people showing self-restraint related togoing out (YoY +91%, +¥1.1 billion)- 46.6%
ーAs a result of the above, Wacoal net sales decreased by 46.6%+72.3% ■The reset amount for adjustment reserves for returned goods was a plus as deliveries decreased(+¥1.1 billion YoY)
- 41.6% ーAs a result of the above, Wacoal business (domestic) net sales decreased by 41.6%
ーー ■Wholesale business: Operating loss of ¥500 million due to a significant decrease in sales■Retail business: Despite the decrease in sales, losses were held to about ¥100 million due to cost

- 65.0% cutting and rent reduction contributions■WEB business: Profit increased due to increased sales on our own EC platformーDespite efforts to reduce costs they could not make up for the impact of decreased sales, resulting inan operating loss of ¥2.5 billionー■The total operating loss for domestic sewing factories, logistics companies, and sales companies wasー ¥600 million
ーAs a result of the above, Wacoal business (domestic) posted an operating loss of ¥3.1 billion
ー

ー

10

FY2021 1Q: Reporting by Segment [Wacoal Business (Overseas)]
The spread of the coronavirus outbreak had a negative impact on operations in all countries
and regions where we conduct businessNet sales¥7.8 billion -¥5.8 billion YoY (-42%)
Sales decreased significantly due to lockdown measures in major cites and the impact of store closures and self-restraint from going out(FX impacts -¥250 million)

Operating loss-¥1 billion-¥2.9 billion YoY

Though each company made efforts to reduce costs and made use of government support measures, an operating loss was recorded dueto the significant decline in sales(Millions of yen)
FY2020 1Q
results,
3 months

Wacoal International Corp.
(U.S.)

Year on Year

ratio

FY2021 1Q
results,
3 months

ratio

Change

5,039

37.1

3,404

43.4

-1,635

Wacoal Europe Ltd.

3,517

25.9

1,668

21.3

-1,849Wacoal China Co., Ltd.

3,112

22.9

1,733

22.1

-1,379Intersegment transactions,etc. eliminetions

1,929

ー

1,042

ー

-887

- 46.0%7,847 100.0-5,750- 42.3%ーNet Sales

13,597 100.0- 32.4% ■US: Local currency basis -31%, ■IO Inc., result of new consolidation +¥900 million■W Europe: Local currency basis -50% ■Each region struggled (UK -65%, US -44%, Europe-41%)■China: Local currency basis -42% ■Though stores suffered a significant decrease in sales, EC sales- 52.6%at other companies remained strong (+15%)■Hong Kong -¥200 million, Philippines -¥200 million, Singapore -¥100 million, Thailand (material- 44.3%company) -¥100 million

ーAs a result of the above, Wacoal business (overseas) net sales decreased by 42.3%

Wacoal International Corp.
(U.S.)

868

17.2

-837

ー

-1,705

Wacoal Europe Ltd.

338

9.6

-224

ー

-562

Wacoal China Co., Ltd.

429

13.8

117

ー

-312

Intersegment transactions,etc. eliminetions

227

ー

-83

ー

-310

Operating income ( loss )comment% Change■Wacoal America: Operating loss of ¥370 million ■IO Inc.: operating loss of ¥470 million■Despite cost reductions, the impact of decreased sales was significant, resulting in an operating loss
ー ■As a result of cost cutting and the utilization of government measures, profitability was secured■Hong Kong, Singapore, the Philippines and others, as well as major sewing factories saw decreased- 72.7% profits
ーーAs a result of the above, Wacoal business (overseas) recorded an operating loss of ¥1 billion
1,862

13.7

-1,027ー-2,889ー

11

FY2021 1Q: Reporting by Segment [Wacoal Business (Other)]Supported by the high growth of its own EC business, PEACH JOHN’s sales were strong even in
the COVID-19 environment
Net sales¥5.2 billion -¥2 billion YoY (-27%)
NANASAI (a large decrease in construction orders) and Ai (slumping demand for resort wear) were greatly affected by the spread of the coronavirus
outbreak

Operating loss
-¥400 million-¥200 million YoY

PEACH JOHN returned to the black by increasing domestic revenue, controlling SG&A expenses, and reducing rent. Other businesses recorded
operating losses(Millions of yen)
FY2020 1Q
results,
3 months

ratio

FY2021 1Q
results,
3 monthsratio

Peach John

2,587

36.3

2,538

49.0

-49

Lecien

1,329

18.6

996

19.2

-333

Nanasai

1,973

27.7

1,235

23.9

-738

818

11.5

252

4.9

-566

426

ー

154

ー

-272

5,175 100.0-1,958

Ai
Intersegment transactions,etc. eliminetions

Net Sales

Other

7,133 100.0

Year on Year
Change

-42

ー

241

9.5

283

Lecien

-104

ー

-103

ー

1

Nanasai

10

ー

-181

ー

-191

Ai

-67

ー

-189

ー

-122

11

ー

-155

ー

-166

-192

ー

-387

ー

-195

Peach John

Intersegment transactions,etc. eliminetions

Operating income ( loss )comment% Change- 1.9% ■Peach John: Domestically, growth of the company’s own EC business contributed, and sales

increased 3.2% (overseas was sluggish)■Struggled because PB products could not be delivered to mass retailers and specialty stores- 37.4% due to the impact of their inventory controls■Sales declined due to a decrease in construction orders from customers- 69.2% ■Construction orders were sluggish due to the impact of the cancellation/postponement ofvarious events and new store openings because of the spread of infectious disease- 63.8%■Sales at other subsidiaries (temporary staffing companies, etc.) also decreased- 27.4% ーAs a result of the above, net sales at other businesses decreased by 27.4%- 25.1%ー■Peach John: Returned to the black due to increased sales in Japan and contributions from costー cuts and rent reductions■Lecien: Improved due in part to the positive impact of the withdraw from unprofitablebusinesses that was implemented last fiscal year
ー ■Nanasai, Ai: Despite efforts to reduce costs, an operating loss was booked due to thesignificant impact of decreased sales
ー ■Other subsidiaries also experienced significant profit declines as a result of decreased sales
ーAs a result of the above, other businesses recorded an operating loss of ¥400 million
ー

ー

12

Full-year Forecasts
for Fiscal Year Ending March 31

13

FY2021: Full-year Outlook

Though a gradual recovery from consumption slump caused by the spread of the infectious disease will
occur from 2Q onward, the slump is also expected to continue until the end of the fiscal year and thefull-year plan has been set accordinglyNet sales: The impact of closures in 1Q is significant, and a decrease of -15% vs last year’s results has been planned
Operating loss: The loss of sales is significant, and an operating loss of about ¥5 billion has been planned

Net sales¥158 billion

Sales from 2Q onward are projected to decrease 7% vs the previous year
Wacoal business (Japan) -¥14.1 billion, Wacoal business (overseas) -¥9.1 billion, Other -¥5.6 billion

Operating loss- ¥5 billion-¥11.6 billion YoY

Against an expected decrease in sales profit of -¥18.4 billion due to decreased sales, we expected to achieve +¥6.8 billion by controlling SG&A costs
1Q results: -¥4.5 billion, 2Q onward: -¥500 million
Assuming downside risk is materialized (P.19), the budget for adjustments has been set at ¥1.2 billion

Losses before income taxes
and equity in net income ofaffiliated companies

-¥28.8 billion YoY (-15%)-¥3.7 billion-¥8.1 billion YoY

The effects of valuation gains/losses of marketable securities and investments have not been reflected in the plan

Net loss for thecurrent FY-¥3.7 billion-¥7.2 billion YoY
14

FY2021: Prerequisites for formulating the full-year plan Though a gradual recovery from the slump in consumption will occur from 2Q onward, theslump is also expected to continue until the end of the fiscal year
- Japan: Last fiscal year, the demand rush prior to the consumption tax increase and its repercussion greatly impacted the difference with the previous year
(Returning to the sales level in 4Q of the fiscal year before last (FY2019) has been set as one benchmark)- Overseas: We expect a slump in physical store channels, primarily in Europe and the US

FY2021

Quarterly increase/decrease in sales plan (YoY/Comparison with 2 years ago)

2Q target

4Q target

Year on Year

Comparison with
two years ago

Year on Year

Comparison with
two years ago

Year on Year

Comparison with
two years ago

-20%

-10%

+5%

-5%

+10%

±0

America
Wacoal

-15%

-15%

±0

+5%

±0

±0

WacoalEurope

-40%

-25%

-15%

-15%

+5%

-10%

Wacoal
China

-10%

-10%

+5%

±0

+5%

+10%

WacoalOverseas

3Q target

15

FY2021: Net Sales Plan for the Full Year (YoY Comparison) Decreases sales of -15% YoY (-¥28.8 billion) are planned for- Wacoal -¥12.7 billion, Europe/US/China -¥5.8 billion, four domestic subsidiaries -¥5 billion

Wacoal-12.7

FY2020results¥186.8billionWacoal business(domestic) otherbusiness
・Wholesale business -11.3
operations,・Retail business -1.6
account
・WEB business +2.3
adjustments
・Sales from otherdivisions, eliminations
between divisions, etc.
-2.1

Hong Kong W, Singapore, Vietnam,
Thailand material companies, etc.

US/Europe/China-5.8

Ai -1.4-1.4

・Decreased sales at sales subsidiaries -0.3
・Account adjustments -1.1
(differences with the previous year in changes torearrangements for reserves for returned goods
adjustments in line with accounting policies, etc.)

Wacoal business(domestic)-14.1

PJ -0.3
Nanasai -2.1
Lecien -1.2

Other overseas
corporations-2.5

FX impacts-0.8・US -1.2（Wacoal America -2.9, IO Inc +1.7）
・Europe -3.3
・China -1.3

Wacoal business (overseas)-9.1

Peach John, Lecien,
Nanasai, Ai-5.0
Other subsidiaries
and accountadjustments

-0.6

Other
-5.6

FY2021plan¥158.0billion(billion of yen)

16

FY2021: Operating Income (Loss) Plan for the Full Year (YoY Comparison) Operating Income (Loss) Plan: An operating loss of -¥5 billion is expected (-¥11.6 billion YoY)
(1) FY2021: Excluding the budget for adjustments (¥1.2 billion) and employment subsidies (¥2.4 billion), a realized operating loss of -¥6.2 billion(2) FY2020: After eliminating one-time expenses (¥1.4 billion), an operating profit of ¥8 billion in real terms*Difference in real terms [(1) – (2)]: ▲-¥14.2 billion
FY2020results

・Subsidiary profit decreases -1.5

¥6.6
billionMain one-time
expenses booked in
the previous fiscal year
-1.4

Wacoal-6.4

・IO Inc. acquisition cost -0.3
・IO Inc. earnout return ＋0.3
・Material companies'
impairment -1.0
・PJ impairment -0.2
・Lecien temporary expenses-0.2(2) Realized
operating income
results¥8 billion

・Decrease in sales profits due
to decreased sales -9.3
・Controlling SG&A costs +2.9

・Budget for adjustments (riskmanagement) -1.2
・Account adjustments -1.5
-YoY difference related to reset of
retirement benefits cost (otherthan service costs)-YoY difference related to theelimination of P/L transactions
accompanying a decrease in
intra-Group transactions, etc.

Other
subsidiaries’
budget buffer
for accountadjustments-4.2

US -1.4 (gross profit decrease –0.6, SG&A expense increase -0.8)-Wacoal America -1.2 (gross profit decrease -1.9, controlling SG&A expenses +0.7)-IO Inc. +0.1 (gross profit increase +1.4, SG&A expense increase -1.3)-Reverse acquisition costs for the previous fiscal year +0.3
-Reverse the earnout return for the previous fiscal year -0.3
-IO Inc. depreciation increase -0.1, other expense increases, etc.
Europe -1.3 (gross profit decrease -2.2, SG&A expense reduction +0.9)
Chine -0.5 (gross profit decrease -1.0, SG&A expense reduction +0.5)

・Other overseas subsidiaries -1.2
・Reverse impairment for Thailand
material company booked in theprevious fiscal year+1.0

Employment
subsidies+2.4(billion of yen)

US, Europe,
China
-3.1

PJ +0.5-Reverse impairment loss from previous fiscal
year+0.2-Gross profit decrease -0.2, cost control +0.5
Lecien +0.5
-Reverse one-time expense from previous
fiscal year +0.2
-Gross profit decrease -0.2, cost control +0.5
Nanasai -0.7
-Gross profit decrease -1.2,
control SG&A expense +0.5
Ai -0.2-Gross profit decrease -0.8,
control SG&A expense +0.6

Other overseas
corporations -0.2

FX impacts+0.03(1) Realized operating
loss (plan)-¥6.2 billion
FY2021plan-¥5billion

PJ, Lecien, Nanasai, Ai+0.1
Other subsidiaries and account adjustments-0.2

Wacoal busines (domestic) -8.2

Wacoal busines (overseas) -3.3

Other -0.1

17

FY2021: SG&A Plan for the Full Year The cost reduction plan in real terms which excludes temporary expenses is -¥4.2 billion- 1Q cost reduction of -¥3.5 billion, from 2Q onward, IT and brand investment will be prioritized for future growth- Continuous reduction of nonessential expenses (estimated additional reduction of ¥1-¥2 billion (not reflected in plan)(billion of yen)
SG&A expenses and general administrative
expenses

Sales profut
FY2020 1Q
results,
3 months

WacoalAmerica
EuropeChina
Peach John
LecienNanasai

Major Overseas
Subsidiaries
Major Japan
Subsidiaries

Other（Including intersegment transactions, etc. eliminetions）

total

FY2021 1Q
results,
3 months

Year on YearFY2020 1Q
results,
3 months

FY2021 1Q
results,
3 months

Year on Year(reference)
Reduction of
SG&A expenses
and generaladministrative
expenses in 1Q

56.5
9.7
7.6
6.7
7.1
1.9
3.3

47.2
9.1
5.4
5.7
6.9
1.7
2.1

-9.3
-0.6
-2.2
-1.0
-0.2
-0.2
-1.2

53.4
9.3
6.3
5.7
7.2
2.2
3.1

50.5
10.1
5.4
5.2
6.7
1.7
2.6

-2.9
0.8
-0.9
-0.5
-0.5
-0.5
-0.5

-2.5
0.7
-0.6
-0.3
-0.3
-0.2
-0.2

9.0

5.3

-3.7

8.0

6.2

-18.0

-0.1

101.8

83.4

-18.4

95.2

88.4

-6.8

-3.5

Temporary expenses for the previous term

1.4

Temporary expenses for this term (planned)（Employment adjustment subsidy）-2.4

Budget to adjust

1.2

93.8

89.6

SG&A expenses excluding temporary expenses

The cost reduction
plan in real terms

4.2 billion-4.2（1Q cost reduction of-¥3.5 billion）

18

FY2021: Upside and Downside Risk Related to Operating Income (Loss) Considering the potential realization of downside risk, the budget for adjustments
has been set at ¥1.2 billion

Upsiderisk

Downsiderisk

 Sales recovery and increased sales profit due to an early resolution of the infectious
disease problem
 Further control of SG&A expenses
 Changes to earnout considerations
Shared Decrease in sales profit due to decreased sales resulting from prolonged
impacts of the infectious disease problem

Japan




Overseas

Possibility of impairment loss on tangible fixed assets of unprofitable stores
Possibility of impairment loss on other tangible fixed assets (real estate, etc.)

 Possibility of impairment loss on IO Inc. and Wacoal Europe’s intangible
fixed assets
 Changes to earnout considerations

Note: It is necessary to re-evaluate impairment losses based on busines performance this fiscal year.
Furthermore, even if it is apparent, it does not lead to a decrease in cash flow, so there will be no impact on capital investment and shareholder returns.

19

【Full-year plan exchange rate】(Reference) FY2021: Full-year Plan Figures

USD

GBP

CNY

108.00yen

134.00 yen

15.30 yen

(Millions of yen)

FY2020results

Consolidated net sales

% Of
sales

FY2021
forecast

Year on Year
% Of
sales

Change% Change

FY2021
1H
forecast

% Of
sales

FY2021
2H
forecast

% Of
sales

186,760ー

158,000

ー-28,760- 15.4%70,500ー

87,500ー

Cost of Sales

84,95945.5

74,60047.2-10,359- 12.2%33,00046.8

41,600

47.5

Sales profut

101,801

54.5

83,40052.8-18,401- 18.1%37,50053.2

45,90052.5

94,69650.7

88,40055.9-6,296- 6.6%

40,70057.7

47,700

54.5

473

ー

-473

ー

6,632

3.6

-5,000ー-11,632ー-3,200ー-1,800ー

Other income (expenses)

1,487

ー

1,300

ー

-187

- 12.6%

700

ー

600

ー

Valuation gain (loss) on marketablesecurities and investments – net-3,760

ー

3,760

ー

Income before taxes ( loss )

4,359

2.3

-3,700ー-8,059ー-2,500ー-1,200ー

Net income attributable (loss) to
Wacoal Holdings Corp.

3,472

1.9

-3,700ー-7,172ー-2,400ー-1,300ー

SG&A Expenses
Impairment charges on goodwill andother intangible assets

Operating Income ( loss )20

(Reference) FY2021: Full-year Plan Figures by Segment【Full-year plan exchange rate】

USD

GBP

CNY

108.00yen

134.00 yen

15.30 yen

(Millions of yen)

FY2020results

Wacoal Business (Japan)

Year on Year

ratio

FY2021
forecast

ratio

Change% Change

106,11256.8

92,00058.2-14,112

Wacoal Business (Overseas)

50,55227.1

41,500

26.3

Other Businesses

30,09616.1

24,500186,760

100 158,000

FY2020results

FY2021
forecast

Net Sales

% Of
sales

FY2021
1H target

ratio

FY2021
2H targetratio- 13.3%39,50056.052,50060.0-9,052- 17.9%18,90026.8

22,60025.8

15.5-5,596- 18.6%

12,10017.2

12,40014.2

100-28,760- 15.4%70,500100

87,500100

Year on Year
% Of
sales

Change% Change

FY2021
1H target

% Of
sales

FY2021
2H target

% Of
sales

Wacoal Business (Japan)

6,121

5.8

-2,100ー-8,221ー-1,500ー-600

ー

Wacoal Business (Overseas)

1,493

3.0

-1,800ー-3,293ー-1,200ー-600

ー

Other Businesses

-982

ー

-1,100

ー

-118

ー

-500

ー

-600

ー

6,632

3.6

-5,000ー-11,632ー-3,200ー-1,800ーOperating income ( loss )21

(Reference) FY2021:
Full-year Plan Figures for Major Subsidiaries【Full-year plan exchange rate】

USD

GBP

CNY

108.00yen

134.00 yen

15.30 yen

(Millions of yen)

Net Sales
FY2020results
WacoalBusiness(Japan)WacoalBusiness(Overseas)

Other
Businesses

FY2021 forecast

Operating income ( loss )Year on Year

1H

2H

Full year

Change% Change

FY2020results

FY2021 forecast
1H

2H

Year on Year

Full year

Change% Change

Wacoal

99,22437,40049,10086,500-12,724- 12.8%3,140-3,000-300-3,300-6,440ー

Wacoal International
Corp. (U.S.)

19,194

8,388

9,468

17,856-1,338- 7.0%

401

-945

-27

-972

-1,373ーWacoal Europe Ltd.

12,988

3,928

5,463

9,391

-3,597- 27.7%

1,007

-384

123

-261

-1,268ーWacoal China Co., Ltd.

11,081

4,272

5,250

9,522

-1,559- 14.1%

923

359

85

444

-479

- 51.9%Peach John

10,480

5,300

4,840

10,140-340- 3.2%

-351

350

-200

150

501

ー

Lecien

5,760

2,130

2,440

4,570

-1,190- 20.7%

-478

-40

30

-10

468

ー

Nanasai

8,717

3,162

3,408

6,570

-2,147- 24.6%

218

-256

-237

-493

-711

ー

Ａｉ

3,597

1,156

1,084

2,240

-1,357- 37.7%

-269

-291

-199

-490

-221

ー

Major Overseas Subsidiaries（ Local Currency Basis ）Wacoal International
Corp. (U.S.)

176,508

77,68887,668 165,336-11,172- 6.3%

3,694-8,751-249-9,000-12,694

ー (USD'000)

Wacoal Europe Ltd.

93,95429,31040,76970,079-23,875- 25.4%7,290-2,862922-1,940-9,230ー (GBP'000)

702,223 279,234 343,133 622,367-79,856- 11.4%58,46823,5005,500

29,000-29,468- 50.4% (CNY'000)

Wacoal China Co., Ltd.

22

【Full-year plan exchange rate】(Reference) FY2021: Outlook for Q2 Onward

USD

GBP

CNY

108.00yen

134.00 yen

15.30 yen

(Millions of yen)

1Q
FY2020results

FY2021
results

2Q～4Q total
Year on Year
Change% Change

FY2020results

FY2021
forecast

Year on Year
Change% Change

Consolidated net sales

47,31328,551-18,762- 39.7%

139,447

129,449-9,998- 7.2%

Sales profut

26,907

15,280-11,627- 43.2%74,894

68,120-6,774- 9.0%

S, G&A Expenses

23,26319,752-3,511- 15.1%

71,43368,648-2,785- 3.9%

ー

473

-473

ー

Impairment charges on goodwill andother intangible assets (A)Operating Income ( loss )3,644-4,472-8,116

ー

2,988

-528

-3,516ー

Reference figure :Operating income (loss)
not taking into account A

3,644-4,472-8,116

ー

3,461

-528

-3,989ー23Basic Policy for Capital Policy in the Current Medium-Term Management Plan
(disclosed June 13, 2019)
Note: In the event of significant fluctuations in business performance or financial demand due to the spread of
infectious disease, we will consider reviewing the policy

While prioritizing investment for future growth, we will also strive to enhance shareholder returns
 Achieve ROE of 6% that exceeds the cost of capital Maintain a total return ratio of 100%
 Reduce cross-shareholdings (Target: 30% reduction)

24

FY2021: Dividend Plan and Repurchase of Treasury Stock Annual dividend forecast: ¥40/share(¥20/share for both mid-year and year-end distributions)- Interim dividend forecast is ¥20/share, a decrease of ¥20 from the previous year
- Year-end dividend forecast is ¥20/share, the same as the previous year
- As the timing of a conclusion to the infectious disease problem cannot be predicted, priority will be given to
securing liquidity on hand

 Regarding the repurchase of treasury stock, determinations will be made after assessing
business conditions going forward
Dividend per share

Total amount ofdividends(Millions of yen)

Payoutratio*

InterimYear-End

Annual

FY3/2020

40円

20円

60円

3,808

58.6%

FY3/2021（revised）

20円

20円

40円

ー

ー

Change from the previous year

▲20円

±0

▲20円

*Payout ratio was calculated from net income in real terms without considering the impairment charges on intangible assets and valuation gain
(loss) on marketable securities and investments.

25

FY2021: Investment Plan

Investments (acquisition of intangible/tangible fixed assets) of approximately ¥5 billion are planned
Concerning, non-urgent new investments, we will reconsider the timing of implementation
We will carry out investments aimed at future growth, such as costs of introducing 3D body scanners into stores, ITrelated costs related to omni-channel strategic construction, and expanding logistics companies due to thestrengthening of our own EC business

FY2021 investment planamountIT-related investment ,etc (wacoal）

1.4

Interior finish work for directly retail stores,etc（wacoal）

0.3

Building renovation, etc（wacoal）

1.3

Domestic Subsidiaries

0.4

Overseas Subsidiaries

1.6

total

5.0

Note: In order to secure liquidity on hand at Group companies, at the end of July we borrowed ¥40 billion from financial institutions (Japan only)26

FY2021 1Q: Capital Policy and Shareholder Returns

Concerning cross-shareholdings, only one issue was sold in FY2021 1Q
Note: Calculated at the book value as of March 31, 2019
FY2021 1Q
results,
3 months

Cashgeneration

Medium-Term
Management Plan Period（FY2020-FY2022）(Billions of yen)
Medium-Term
Management Plan Period（FY2020-FY2022）

total

Major investments and investment
amount in the FY2021 1Q

plan

detailamount0.7

Net income attributable to
Wacoal Holdings Corp.★

-3.8

2.7

31.0 or moredepreciation costs

1.5

7.5

19.0 or more

Sales of strategically-held shares

0.0

15.3

20.0 or more

IT-related investment ,etc
(wacoal）
Interior finish work fordirectly
Building renovation, etc（wacoal）

-2.3

25.5

70.0 or more

Domestic Subsidiaries

0.1

Overseas Subsidiaries

0.5

合計

★Net income was calculated without consideration for valuation gain (loss) on marketable securities and investments.

Used Cash(Billions of yen)

Growth investment,
Capital expenditures

1.5

17.7

Dividend payment

1.2

6.2

Purchase of treasury stock0

7.7（Number of shares acquired）

0(2,797thousand shares)

2.7

31.6

0

13.6

0%

68%

1

13

total

0.1
0.1

68.5 or more・Dividend/Reasury stock:\31billion or more・Investmen in existing business t/Growthinvestment: \21billion or more・Additional returns or investment in new
business: \16.5billion or more

■Major KPI
Status of sales of Sale amountstrategically-held
Progress toward target
shares(Wacoal Corp.)
Number of strategic stocks sold completely

20.0

total

1.5

27

Wacoal Group initiatives focused on
the “with” and “after”
novel coronavirus periods
Hironobu Yasuhara
Representative Director, President, andCorporate Officer
Wacoal Holdings Corp.
28

The Impact of COVID-19

We expect the fight against COVID-19 to be a long-term battle







We expect it to take about one and a half to three years for normalcy to return
As conditions differ greatly from region to region, there are no clear scenarios for convergence.
It will take more time before a reasonable judgment can be made regarding the extent
COVID-19 will affect the market environment and business performance over the medium- tolong-term.
Customers’ awareness and values are changing, however, the future following such change isstill unclear.
Based on the premise of considering the “with” and “after” coronavirus business environment,“there will be no return to how things once were”
It is necessary to make major changes, not only in terms of the products in demand,
how they are sold, and touch points with customers, but also in terms of Wacoal’s
corporate structure29

In Order to Win in the “With” and “After” Coronavirus Age

What is being called into question is the “Power of Self-reformation”

The impact of COVID-19 will change what Wacoal itself perceives as assets and values

Challenge 1: Evolve our unique “organization capacity” that has been cultivated over a long period of time, and improve productivityChallenge 2: Deal with unprofitable businesses and establish new growth businesses to improve corporate value over the medium to long term

Smart factory

Live commerce
Remote work

Customer data utilization

Researchcapability

Unique“organizational
capacity”

Production andquality-control
capabilities

Digitalization of logistics
warehouse tasks
Cross-industry collaboration

DX

Digitaltransformation

Implementing
self-reformation
with customers as
the starting point

Evolve ourunique“organization
Capacity”

Fusing and blending offline and online
Consulting via chat
3D body scannerー
Planning and development
capability

Sales capability

Remote customer service
AI customer service
Labor saving through RFID utilization30

Basic Policies in light of the Medium-term Management Plan (MTMP) and Spread of COVID-19(announced May 20,2020)

Face reality, ascertain future demand, and then boldly implement reform[Basic policy]

Give top priority to the “health and safety” of customers, employees, and business partners.
(*We recognize that the balance between maintaining such services as trial fitting and consideration of health and safety is especially important.)[Short-term policy]

Thoroughly reduce costs and ensure the stability of the Company's financial base with thedeteriorating business conditions in mind
1. Carry out a bold review of the measures and expenditure plans that have been implemented so far across all business domains
2. Strengthen liquidity on hand in preparation for the prolongation of the infectious disease
3. Adjust production for avoiding excess inventory caused by a decline in sales[Medium- to long-term policies]

Thoroughly inspect the value chain and implement reforms: A turning point toward a highly
profitable management structure
1. Review the current cost structure (Promote initiatives to reduce fixed costs)
2. Accelerate our digital transformation efforts both in Japan and overseas
3. Review and reorganize touch points with customers (to respond to the changes in major channels)
4. Develop products and services that customers expect in new lifestyles, and strengthen our ability to respond to new customer
needs and sales styles
31Current Medium-term Management Plan (MTMP): Initiative Going Forward
With an eye on the next three-year plan, decisively implement “profit structure reform” during thecurrent MTMP period

FY 2021: (1) Ascertain future demand, and determine what to “change” and what to “discontinue”(2) Start reforms once the direction becomes clear


FY 2022: Complete structural reforms with a focus on the next three years (formulate measures for new medium-term plan)⇒Complete constitutional changes and structural reform, and aim to return to sustainable growth from FY2023

Process going forward
Current MTMP: 2nd fiscal year
（FY2021）

Current MTMP: final fiscal year
（FY2022）

Decisively implement profit structure reform(build a foundation for the next MTMP)

Ascertain future demand, anddetermine what to “change” and whatto “discontinue”
Implement reform without hesitation
once direction is clear
Ascertain changes in consumers andmarkets
Start organizational reform focusing onchanges at handComplete structural reform aimed atrealizing a highly profitable
management structureDeal with unprofitable businesses(abolish, consolidate, etc.)
Continue strategic investment
Formulate next three-year plan

New MTM（FY2023 – FY2025）
Start as the “reborn Wacoal”
Start the new three-year plan with a“lean” corporate structureEstablish highly
profitable
management
structure

Further increase productivity
Accumulate non-financial assets(strengthen human and intellectual
assets)Investment for discontinuous growth32

Details of Initiatives in Each Segment (FY2021 – FY2022)
With an eye on the next three-year plan, decisively implement “profit structure reform” during the current MTMP period

FY2021
Already underway

To be implemented this FY

Initiatives for FY2022

Details of Wacoal Corp’s efforts are explained separately starting on slide 34

Wacoalbusiness(Japan)【Overall】 …Review spending plan

【Overall】…Review spending plan

【Directly operated sewing factories in Japan】…Adjust production for fall/winter products…Discuss future role for factories in Japan【Sales companies】…Consider role within the Group and ideal form

【Logistics companies】…Prepare initiatives for deliveries to individuals【Sales companies】…Reorganize as needed【Directly operated sewing factories in Japan】…strengthen competitiveness (reorganize as needed)

Wacoalbusiness(Overseas)【Overall】…Review spending plan
【Europe, US, China】…Continue to strengthen EC business…Integrate IO Inc.’s logistics operations【China】…Continue to collaborate with Japanon products【Overall】 …Review spending plan

Other

【Peach John, Lecien】…Verify results of reforms implemented up to
the previous FY…（PJ）Strengthen offline/online cooperation【US】…Maintain IO Inc.’s high growth【Asia, excluding China】…Discuss and ascertain regional strategy(Hong Kong, etc.)…Stat developing EC business【Europe】…Strengthen development in Europe【Overseas production factories】…(for Japan) expand ASEAN production ratio【Material companies (Thailand)】…Strengthen competitiveness, start supplying
to Group【Unprofitable subsidiaries】…Ascertain future demand from an overall
optimization perspective…Consider role within the Group and ideal form
【Overseas businesses/production factories】…Ascertain future demand and regional
strategies【Unprofitable subsidiaries】…Withdraw, cut loose, reorganize【Asia, excluding China】…Reorganize as needed【Overseas businesses/production factories】…Reorganize as needed…Strengthen competitiveness and coordination
within the Group33

Wacoal Corp. initiatives focused on
the “with” and “after” novel
coronavirus periods
Tomoyasu Ito
Director, Vice President Corporate Officer
Wacoal Holdings Corp.
Representative Director, President and Corporate Officer
Wacoal Corp.
34

Awareness of Changes in the Market Environment Due to the Pandemic

The traditional business model has stalled, touchpoint replacements accelerated
Impact of
spreadinginfectious
diseaseAs the number of opportunities for going out decreases, each person’s “sense of values” is rapidlychanging
 In line with lifestyle and workstyle changes, consumption behavior and “Places people gather”
are changing
 Online positioning becomes more important⇒It is necessary to speed up actions aimed at establishing a competitive advantage for the
medium to long termPrepare a foundation for a return to growth over the next three years
Using the pandemic as an opportunity, accelerate business structural reform
What should be
implemented inan accelerated
manner during
the current
MTMP







Ascertain future demand with an eye on the “with” and “after” coronavirus periods
In line with channel reform, transition to a “self-managed business (directly managed stores,
own EC)
Fuse and blend store and EC operations (improve customer experience)
Develop and evolve a unique business model via efficient use of customer data
Accelerate initiatives aimed at improving profitability (decrease the fixed cost ratio which remains
high)

35

Accelerate a Transformation of the Business Model Based on “Customer Data Utilization”
Improve store value
Improve customer
experience via DX

Work style reform via DX(RFID utilization, etc.)
Workforce planning
management

Customerdata

About 3 million people
Online store members
Shop members
Department store
customers, etc.

Online and offline
collaboration

Increase averagecustomer spending,
Increase purchasefrequency(set new KPIs)

Nurtureloyal customers

Brand
reorganization

Increase no. of
new customers

Omnichannel strategy＝Improve LTV (lifetime value)

Strengthen EC
Collaboration with othercompanies (open innovation)

Return to domestic growthEstablish highly profitable
management structure

Scrap-and-build
unprofitable
stores36

Strengthen Online Collaboration and Transition to a Self-managed Business

Rapidly changing market environment due to COVID-19

Fusing and blending off/online operations becomes even more importantTransition to a “self-managed business based on customer data utilization”(Note: self-managed business: a business model wherein we manage and administer stores, inventory, and customer data ourselves)

Further strengthen EC collaboration and realize an improved customer experience～Improve LTV (lifetime value)～37

Image of Business Model for FY2025
Have online operations account for 25% of net sales, and have directly managed stores accountfor 40% of the offline portion Raise the portion of the business we directly manage ourselves (directly-managed stores, own EC) to about 50%
 Maintain/strengthen relationships with customers by considering and opening tenant positions in the department store channel
 More thorough management of store profit and loss (implement optimal staffing)

Ratio

Business
model

FY2020 FY2025
OnlineOffline

about

about

15%

25%

about

about

85%

75%

Selfmanaged
business
OfflinechannelRatio
FY2020 FY2025

Directly managed store

about

about

（Including tenant store openings
in department stores）

20%

40%

about

about

80%

60%

Department Stores

Wholesalebusiness

GMS
Supermarket
Specialty StoresNote: Calculated excluding the Spiral business, Remamma business, sales to the Wacoal Group, etc. 38

Topics: Logistics Reform
Unify logistics and warehouse operations to strengthen our own EC business growth and improve theefficiency of shipping operations
 Expand the Moriyama distribution center, aiming to start operations in the fall of 2022
 Insource the currently outsourced operations that deliver product to individuals
 Build a system that not only realizes efficient logistics operations, but also flexibly responds to changes in the retail
environment going forward Total investment of ¥4.7 billion (FY2020 about ¥1 billion, FY2021 about ¥3.3 billion, FY2022 about ¥400 million)
Existing warehouse
Extended warehouse

Newly built parking lot

39

Customer Data Utilization
Rapidly changing market environment due to COVID-19

Fusing and blending off/online operations becomes even more importantTransition to a “self-managed business based on customer data utilization”(Note: self-managed business: a business model wherein we manage and administer stores, inventory, and customer data ourselves)

Further strengthen EC collaboration and realize an improved customer experience～Improve LTV (lifetime value)～

Customer Data Utilization
40

Customer Data Held by Wacoal
Leverage our customer data ～transform all activities, using customer data as the starting point～

Purchase DataStore members/Own EC members
Dept. Store customer data, etc.
About 3 million people

Bodymeasurement
data
Accumulated measurement data for
about 45,000 people
People who have continually had theirmeasurements taken (every 5 years): about 1,000
people3D bodymeasurement
data
For about 20,000 people41

Develop a Vertically Integrated Business Model
Customer data × sales × manufacturing ～Develop a unique vertical business model～
 Along with implementing relationship marketing utilizing the customer data of about 3 million
people, develop a value chain that integrates Wacoal’s strengths, from manufacturing to sales.
Traditional Wacoal flow (manufacturing and sales based on research)
Research

Planning

Procurement

Manufacturing

Sales

Customer

Wacoal flow going forward (manufacturing and sales based on customer data)
Research

Procurement

Manufacturing

In addition to supporting brand quality, support the implementation of “manufacturing based on customers”

Human science research
institute

Technology & Production
Div.

Quality test center

Directly managed factory(Japan and overseas)

Customer center

Sales

Purchasedata New tech

3D bodydata

CustomerPlanning

Cooperation
Body
measurement
data

Material manufacturer
Trading company, etc.
(external)

42

Open Innovation with Other Companies/Industries
Utilize big data and new technologies in open innovation ～create new business opportunities～

Wacoal’s human and intellectual assets
Accumulated
measurement data for
about 45,000 people

Precise measuring
technology

People who have continually
had their measurements taken(every 5 years): about 1,000
peopleFor about 20,000
peopleBodymeasurementdata

3D bodymeasurement
data

Open Innovation

New business creation
Ex. Match Palette at the Isetan Shinjuku Store (released July 2020)
43

Initiatives Aimed at Realizing a Highly Profitable Management Structure
Improve management efficiency by thoroughly inspecting the value chain(1) Review low-profit businesses

Dept. store business: review the sales floor environment and terms and conditions, and optimize the number of sales staff
Other low-profit businesses: ascertain future demand, and decide “businesses that should be terminated” and execute
accordingly(2) Reorganize the brand and optimize inventory in line with touchpoint changesReduce the number of brands/groups (start from autumn and winter of 2021. Decided to reduce about 30%)
Examine the role and positioning of products other than innerwear, and implement further consolidation(3) Reduce fixed costs by optimizing personnel deployment


The total personnel expense ratio to sales exceeds 30% due to the decline in the top line (including labor cost for
manufacturing personnel)
Implement planning management for personnel (optimize personnel allocation by taking stock of operations and adjust
hiring accordingly)⇒Aim to bring the total personnel cost ratio down to below 25% (plan) over the span of the next three-year plan (FY2023-2025)

While strengthening profitability, build an organizational structure that can
respond to changes in the business environment (spring 2021)

44

Details of Wacoal Corp. Initiatives (FY2021 – FY2022)
FY2021
Already underway
Overallmanagement

Growth strategy(omnichannel
strategy)【Coronavirus measures】【Organizational structure】【Organizational structure】…Analyze/share the impact of COVID-19…Reduce costs, secure liquidity at hand
…Adjust production to avoid overstocking…Reorganize to facilitate response to environmental
changes【Medium- to long-term strategy】【Medium- to long-term strategy】【Omnichannel strategy】【 On/offline cooperation】【On/offline cooperation】…Verify effectiveness at stores with installed 3D
system…Continue customer database integration and analysis…Mutually send customers between directly managed
stores and EC…Raise the EC ratio of the retail business to over 15%…Review the sales staff evaluation system…Build collaboration between own EC and wholesalecustomers…Mutually send customers between physical storesand EC…Strengthen own EC business【On/offline cooperation】…Link marketing between directly managed storesand own EC【Department store measures】

Business
structure reform(value chain
inspection)

ESG

To be implemented this FY

Initiatives for FY2022…Department store project launched…Examine store staff and P&L management method【Brand positioning and inventory
optimization】…Verify new organizational structure, bring on track…Create next three-year plan, set KPIs

…Strategic discussion eyeing the next three years【Department store measures】…Review the sales floor environment and terms andconditions【Brand positioning and inventory
optimization】【3D body scanner】…Create efficient operations and accelerate installation【Department store measures】…review the sales floor environment and terms andconditions【Brand positioning and inventory
optimization】…Determine brands/groups to consolidate…Ascertain touchpoint changes…Reclassify product weighting in response to changes…Develop new brand strategy…Optimize entire inventory【Personnel planning management】【Personnel planning management】【Unprofitable businesses】…Withdraw as needed【Personnel planning management】…Take stock of operations and discuss appropriate
personnel allocation…Control hiring, primarily sales staff…Appropriately allocate personnel in anticipation of
new organization…Develop new roles, control hiring【 Coronavirus measures】【Environment】【HR】…Develop/maintain remote work environment…Support “health and safety” of customers/employees…Led by the supply chain environment project, reduce
waste and develop environmentally friendly materials…Revise work styles and the evaluation system basedon remote work, and consider introducing a system toimprove job satisfaction…Switch to new roles, control hiring

45

Reference46

【Exchange rate】

FY2021 1Q: Results for Major Subsidiaries

USD

GBP

CNY

107.62yen

133.52yen

15.60 yen

(Millions of yen)

Net Sales
FY2020 1Q
results,
3 months
WacoalBusiness(Japan)WacoalBusiness(Overseas)

Other
Businesses

FY2021 1Q
results,
3 months

Operating income ( loss )Year on Year

Change% Change

FY2020 1Q
results,
3 months

FY2021 1Q
results,
3 months

Year on Year
Change% Change

25,465

13,603-11,862- 46.6%

1,322-2,543-3,865ーWacoal International Corp.
(U.S.)

5,039

3,404

-1,635- 32.4%868-837-1,705ーWacoal Europe Ltd.

3,517

1,668

-1,849- 52.6%

338

-224

-562

ー

Wacoal China Co., Ltd.

3,112

1,733

-1,379- 44.3%

429

117

-312

- 72.7%Peach John

2,587

2,538

-49

- 1.9%

-42

241

283

ー

Lecien

1,329

996

-333

- 25.1%

-104

-103

1

ー

Nanasai

1,973

1,235

-738

- 37.4%

10

-181

-191

ー

818

252

-566

- 69.2%

-67

-189

-122

ー

WacoalＡｉ

Major Overseas Subsidiaries（ Local Currency Basis ）Wacoal International Corp.
(U.S.)

45,85531,629-14,226- 31.0%7,894-7,778-15,672ー (USD'000)

Wacoal Europe Ltd.

24,914

12,495-12,419- 49.8%2,827-1,215-4,042ー (GBP'000)

190,567

111,096-79,471- 41.7%

26,341

7,449-18,892- 71.7% (CNY'000)

Wacoal China Co., Ltd.

47

FY2021 1Q: Overview of Wacoal (1): Net Sales and Operating Income for Major Business Units
Seizing upon significant changes in consumer behavior and mindset, our EC business experienced highgrowth. However, due to store closures, the wholesale and retail businesses slumped.

¥13.6 billion

Net sales-¥11.9 billion year over year (YoY), (-47%)

Of the -¥11.9 billion decrease in sales, -¥9.9 billion was due to the decrease in the wholesale business resulting from department store and massretailer closures
Meanwhile, our EC business grew +91% YoY (+¥1.1 billion)▲-¥2.5 billion

Operating loss-¥3.9 billion YoY

Due to the decrease in net sales, the sales profit amount decreased by -¥6.5 billion YoY
Though cost-cutting efforts were undertaken (-¥2.5 billion), the impact of lower sales was significant, and an operating loss was booked(Millions of yen)

Year on YearFY2020 1Q results,
3 months

FY2021 1Q results,
3 months

Wholesale Business Div.

20,494

10,562-9,932- 48.5%Retail and WEB Business Department

6,326

5,524

-802

- 12.7%

Others-1,355-2,483-1,128ーNet sales total（Including internal sales）

25,817

13,848-11,969- 46.4%

Net sales total（External customers only）

25,465

13,603-11,862- 46.6%Wholesale Business Div.

4,159

-526

-4,685

ー

679

237

-442

- 65.1%Others(Intersegment transactions,etc.)-3,516-2,254

1,262

ー

Wacoal Operating income ( loss )1,321-2,543-3,864ーRetail and WEB Business Department

Change% Change48

FY2021 1Q: Overview of Wacoal (2) Status of Wholesale Business

Due to store closures, sales of mainstay Wacoal and Wing innerwear decreased by -¥8 billion

Despite a trend toward recovery in June, wholesale business sales slumped due to client inventory control
Sales of each business in Wholesale Business Division of Wacoal Corp.

(Millions of yen)

FY20201Q

FY2021 1Q
results,
3 months

FY2021

2Q

3Q

4Q

1Q

ChangeWacoal

-4%

+11%

-15%

-18%

-57%

4,676

-6,120

Wing

+11%

+8%

-3%

-7%

-44%

2,551

-1,965

Wacoal

-10%

+6%

-18%

-25%

-33%

927

-463

Wing

-38%

-10%

-26%

+18%

-6%

123

-7

Family wear Business

Wacoal

-17%

-6%

-26%

+21%

-48%

411

-381

Good Age Business

Wacoal

-2%

-8%

-10%

-56%

-41%

255

ー

Hosiery Business

Wacoal

-3%

-2%

-27%

-23%

-62%

98

ー

Men's inner Business

Wacoal

-9%

+2%

-13%

-10%

-33%

312

ー

ー

ー

ー

ー

665

-493

-8%

+3%

-25%

-27%

-63%

401

-685

ー

ー

ー

ー

ー

808

182

-2%

+8%

-13%

-15%

-48%

10,562-9,932

Innerwear Business

Personal Business

Above 3 businesses total
Wellness Business

CW-X、Wacoal

OthersWholesale Business Div. total

49

FY2021 1Q: Overview of Wacoal (3) Status (increase/decrease) of store-based sales

Status of store-based sales for June: Temporary recovery to the level for the same month last year (department
stores 89%, mass retailers over 100%)
Though suburban mass retailers performed well, department stores in urban centers continued to struggle toattract customers

Quarterly change in sales at storesby sales channel of Wacoal Corp.

Wholesale

RetailFY2020
1Q

2Q

FY2021
3Q

4Q

1Q

Department store

-6%

+8%

-14%

-23%

-57%

GMS,Supermarket （Wacoal Brand）

-4%

+15%

-18%

-16%

-36%

GMS,Supermarket （Wing Brand）

+4%

+19%

-5%

-11%

-32%

Specialty Stores

+4%

+6%

-6%

-11%

-45%

Sports Chains

-11%

+11%

-22%

-28%

-56%

Third Party EC Sites

-7%

+5%

-8%

-3%

+13%

Directly Managed Stores

+6%

+6%

+0%

-2%

-44%

Wacoal’s Own EC Site

+18%

+24%

+11%

+17%

+91%

Catalog mail-order

+10%

+6%

-13%

-13%

-3%
50

FY2021 1Q: Overview of Wacoal International Corp. (US)The brand LIVELY being unrolled by IO Inc. has maintained high growth due to the success of active
advertising investment¥3.4 billion

Net sales-¥1.6 billion year over year (YoY), (-32%)(Note: YoY change in local currency -31%)

Wacoal America: Physical store channel -83%, EC channel +13% (Breakdown: Dept. Store EC -32%, Specialty store EC +6%, own EC +62%)
IO Inc: ＋¥900 million, result of new consolidation. (Reference: +74% YoY sales increase (Note: Not subject to consolidation in same period last year))Operating loss-¥800 million-¥1.7 billion YoY (Note: YoY change in local currency base -$16 million)

Wacoal America: -$3.5 million local currency base, IO Inc: -$4.3 million local currency baseAiming for early growth of the LIVELY brand, IO Inc. is making strategic growth investmentsPerformance of major subsidiaries (USD'000)◆Quarterly change in sales in major channels and regions (in local currency)
FY20201Q

Department store

EC

4Q

1Q

ratio

Net sales

-9%

-4%

-6%

-83%

-23%

-30%

-11%

-22%

-98%

Store sales total

-12%

-10%

-4%

-6%

-83%

（Year on Year）

Department store EC site

-2%

+19%

+62%

+9%

-32%

Sales by brand

Third Party EC site

-2%

+5%

+25%

+19%

+6%

+17%

+33%

+24%

+35%

+62%

+4%

+19%

+36%

+22%

+13%

America

-7%

-2%

+7%

+3%

-47%

98%

Canada

+2%

-5%

+2%

+0%

-85%

Other area

+1%

-16%

+6%

-47%

-91%

Wacoal’s Own EC Site
EC sales total

Area

3Q

-12%

Store Outlet・Directly Managed Store

Channel2Q

Wacoal America,Inc.

FY2021

23,753

8,163

-50%

ー

-3,477-4,344ーー（Year on Year）

21%

Operatingprofit and loss

IO

Brand

FY2020 1Q

ratio

WACOAL-51%

69%

B.tempt'd

-50%

4%

1%

CW-X

+41%

1%

1%

LIVELY

ー

26%

79%

51

FY2021 1Q: Overview of Wacoal Europe
Significant decrease in sales due to lockdown measures in major cities resulting from the spread of infectious disease¥1.7 billion

Net sales

-¥1.8 billion year over year (YoY), (-53%)

UK -65% decrease, N. America -44% decrease, Europe -41% decrease (Physical dept. stores and specialty stores slumped)
As of the end of June, physical stores resumed operations (some dept. stores have shortened business hours to prevent the spread of
infectious disease)
Our own EC channel started last fiscal year exceed plan targets-¥200 million

Operating loss



(Note: YoY change in local currency -50%)-¥600 million YoY (Note: YoY change in local currency -£4 million)

Though we utilized government support measures and made efforts to reduce overhead costs, we were unable to make up for the decline insales◆(Europe) Quarterly change in sales in major channels and brands (in local currency)
FY2020
1Q

Channel

store

3Q

4Q

1Q

Sales by region

ratio

Department store

-27%

+7%

+0%

-14%

-83%

7%

Specialty store

-5%

+10%

+2%

-19%

-52%

49%

Directly Managed Store

-15%

-6%

-1%

-3%

+3%

13%

+19%

+29%

+4%

-9%

-32%

31%

Fantasie

-5%

+20%

-2%

-17%

-63%

Freya

-17%

+1%

-8%

-18%

Goddess

-13%

+3%

-2%

Elomi

+6%

+15%

Wacoal-8%

B.Tempted-16%

EC sites Third party EC site/other

Brand

2Q

FY2021Area

FY2020 1Q

ratio

UK

-65%

25%

Europe

-41%

29%

25%

North America

-44%

36%

-49%

27%

other

-38%

10%

-1%

-29%

8%

+16%

-7%

-42%

28%

+8%

+10%

-24%

-44%

11%

-17%

-17%

-29%

-63%

1%

52

FY2021 1Q: (Jan – Mar) Overview of Wacoal China
Though sales at physical store decreased due to the spread of infectious disease, EC maintained high growth
Net sales¥1.7 billion
Operatingprofit-¥1.4 billion year over year (YoY), (-44%)

EC sales were strong due to strengthened collaboration with EC mall operators
Targeting millennials, sales of the Japanese brand AMPHI, which was released last year, were strong¥100 million(Note: YoY change in local currency -42%)-73% YoY(Note: YoY change in local currency -72%)

Profitability was maintained by reducing SG&A expense (-¥300 million vs last year) and utilizing government support
measures, etc.

◆(China) Quarterly change in sales in major channels and brands (in local currency)
FY2020
1Q

2Q

FY2021
3Q

4Q

1Q

ratio

Department store

+2%

-3%

-4%

+1%

-52%

66%

Third party EC site

+22%

+26%

+17%

+7%

+1%

34%

Wacoal

+6%

+11%

+1%

+5%

-41%

84%

Salute

-11%

-16%

-15%

-7%

-50%

8%

LA ROSABELLE

-42%

-19%

-74%

-92%

+0%

0%

ー

ー

ー

ー

+278%

2%

+3%

-38%

-28%

-28%

-47%

6%

Channel

Brand

ANPHI
Peach John

53

FY2021 1Q: Overview of other Asian Businesses

Figures include sales from Hong Kong Wacoal, Wacoal International Hong Kong, Wacoal Singapore,
Philippine Wacoal, Wacoal India, (the following are factories), Dalian Wacoal, Guangdong Wacoal,
Vietnam Wacoal, Myanmar Wacoal, A Tech, G Tech, and one other company, and account adjustments
for Wacoal Business (overseas)

The impact of infectious disease spreading globally directly impacted operations ofbusinesses in Asia (other than China) as well
¥1 billion

Net sales-¥900 million year over year (YoY), (-46%)

Hong Kong: Struggled due to the impact of the spread of infectious disease and overlapping political instability
Singapore, Philippines: As these businesses have yet to develop EC, sales were down significantly YoY
Thai material companies (A Tech, G Tech) slumped due to reduced orders resulting from customer excess inventory-¥100 million

Operating loss

-¥300 million YoY

Although each company worked to reduce expenses, these efforts could not absorb the impact of decrease sales, and resulted inoperating losses◆(Other Asia/sales companies ）Quarterly change in sales in major channels and brands (in local currency)
FY2020
1Q

2Q

FY2021
3Q

4Q

1Q

Wacoal Hong Kong

-24%

+23%

-49%

-16%

-37%

Singapore

+2%

-13%

+8%

-18%

-83%

Philippines

+15%

-24%

+37%

-29%

-88%

India

+57%

+113%

+75%

+71%

-86%

54

FY2021 1Q: Overview of Four Domestic Subsidiaries (1) (Peach John and Ai)
Peach John: Domestic sales increased due to strong sales of mainstay products through the company’s own EC channel.
Cost cutting also contributed, resulting in profitability
Net sales¥2.5 billion-¥50 million year over year (YoY), (-2%)
1Q

FY2021

2Q

3Q

4Q

ratio

1Q

Mail-order

-13%

-3%

-11%

+14%

+68%

74%

Store

-3%

+10%

+4%

-1%

-54%

26%

FY2020◆Peach John Salesby overseas business・Quarterly change

Overseas★★

+¥300 million YoY

FY2020◆Peach John Salesby domestic business・Quarterly changeJapan¥200 million

Operating profit

1Q

FY2021

2Q

3Q

4Q

1Q

Hong Kong

-24%

-31%

-36%

-23%

-53%

Taiwan（stores＋EC）

+5%

+2%

+0%

+30%

-12%

Shanghai・Beijing etc（Directly Managed Store）

-19%

-24%

-23%

-23%

-62%

Shanghai・Beijing etc（Third party EC site）

+9%

-48%

-23%

-33%

-44%

-2%

-41%

-23%

-30%

-50%

Shanghai・Beijing etc total★★Change rate based on local currency. The rate of increase or decrease in sales at retail stores and EC sites in each region .
（The figures for" Shanghai・Beijing etc" are from January to June.）

Ai: In addition to store closures due to the spread of infectious disease and people refraining from going out, decreased
resort wear demand also impacted the businessNet sales¥300 million -¥600 million year over year (YoY), (-69%)◆Ai Sales by division・Quarterly change

Operating loss-¥200 million
FY2021

FY2020

1Q

2Q

Resort wear
（A former name of Swimwear）

-12%

-21%

Innerwear

+0%

+0%

-¥100 million YoY

3Q

4Q

1Q

ratio

+3%

-27%

-80%

40%

-2%

-1%

-37%

60%

55

FY2021 1Q: Overview of Four Domestic Subsidiaries (2) (Lecien and Nanasai)
Lecien: Though business withdrawals implanted last FY were effective, the decrease in revenue due to sluggish sales
because of customer inventory controls etc. was impactful
Net sales¥1 billion-¥300 million year over year (YoY), (-25%)◆Lecien Salesby division・Quarterly change

Operating loss-¥100 million

same as last year

FY2020
1Q

2Q

FY2021
3Q

4Q

1Q

ratio

Manufacturing business（A former name of Innerwear,Apparel Div.）

+3%

+3%

+13%

-10%

Innerwear

-25%

78%

Material business（A former name of Material,Art Hobby Div.）

-9%

-3%

-19%

-14%

Embroidery

+2%

10%

EC planning and sales business（Wacoal’s Own EC Site・Third party EC site)

+20%

+24%

+16%

+22%

Lace

-54%

12%

Nanasai: Construction orders decreased due to a reduction in customer new store openings and events because of the
spread of infectious disease
Net sales¥1.2 billion -¥700 million year over year (YoY), (-37%)◆Nanasai Salesby division・Quarterly change

Operating loss-¥200 million
FY2021

FY2020

1Q

2Q-¥200 million YoY

3Q

4Q

1Q

ratio

Rental and lease

-13%

-8%

-10%

-17%

-43%

23%

Production sales

-21%

-21%

-16%

-32%

-39%

19%

Construction

-27%

+33%

-7%

-13%

-41%

58%

56

Overview of New Business Segments

segment

Major company

Business content

Wacoal Corp.

Wacoal Business(Japan)Wacoal Holdings Corp.

A segment centered on the business of Wacoal Corp.

Apparel Manufacturing
Companies(factory),Distribution company

Sales Companies（Unenana Cool Corp. etc）

other
Wacoal International Corp.
Wacoal Europe Ltd.

Wacoal Business(Overseas)

A segment centered on the business of Wacoal
International Corp., Wacoal China Co., Ltd., Wacoal
Europe Ltd.(became subsidiary in 2012, UK).

Wacoal China Co., Ltd.
Apparel Manufacturing Companies
Sales Companies
other
Peach John Co., Ltd.

Other

Lecien Corp.
A segment centered on the business of Peach John
(became subsidiary in 2008), Nanasai Co., Ltd. (became
Nanasai Co., Ltd.
subsidiary in 1987), Lecien Corporation (became
Ai Co., Ltd.
subsidiary in 2009).
other

57

Information within this document with respect to future business performance
figures is based on Wacoal’s assumptions in the light of the information currently
available, but in no way guarantees or promises actualization or achievements
thereof. Furthermore, the information is subject to change without notice. Although
the information is published with the greatest care, our company will not take any
responsibility whatsoever regarding any error in the published information.

58