『ONWARD VISION 2030』

April 4, 2024
© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

The Onward Group’s Mission Statement

Enriching and Adding Color to People’s
Lives while Caring for the Planet

Copyright © ONWARD HOLDINGS CO., LTD.

Keep moving forward as a “lifestyle and culture
creation company” that contributes to creating
lifestyles with richness and colors in harmony withthe planet through “customer-centric management
leveraging employees’ diverse strengths”© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

1

Results up to the present— Business structure transformation phase■Lifestyle■Apparel200.0Net Sales

168.4(Billion yen)

39.4

50.0

129.0

150.0

146.5

FY2021

FY2023
Previous
VISIONFY2023(Results)(Billion yen)

11.3
4.5

2.4

2.5

6.9

FY2021(Results)

FY2023
Previous
VISIONFY2023(Results)-1.1

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-3.5

Operatingmargin-0.6％(3.5％5.9％

As a result of promoting the global business reforms and OMO
strategy, operating profit in FY2023 was significantly higher thanplanned in the previous vision.

© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

24.47.0(Operatingprofit(43.1((Results)

189.6

Future plans—Growth acceleration phase—Growth phase■Domestic

Net Sales(Billion yen)

OperatingprofitCopyright © ONWARD HOLDINGS CO., LTD.

(Billion yen)

Operatingmargin■Overseas

200.0
20.0

220.0

30.0

22.0

180.0

198.0

FY2024(Plan)

FY2026(Plan)

270.0

FY2030(Plan)

25.0
2.5

12.5
0.3

16.0
1.0

22.5

12.2

15.0

FY2024(Plan)

FY2026(Plan)

FY2030(Plan)

6.3％

7.3％

8.3％

Strengthen the foundation for overseas businesses while accelerating
growth in domestic ones with the aim of achieving the plan for FY2030(300 billion yen in sales and 25 billion yen in operating profit)© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

3

300.0

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© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

4

Financial Strategy

Financial Strategy

Financial Indicators Set as Targets

Action to implement management that is conscious of cost of capital and stock price

1. Profit target (FY2026)
Current net profit

10.0 billion yenor more

Promotion of growth strategy including
active growth investment(DX Strategy, Global Strategy, and M&A Strategy)

2. Capital efficiency (FY2026)
ROE
ROIC

10% or more

Level considerably above the cost of equity

7% or more

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Level broadly surpassing WACC

3. Shareholder return（From FY2024 onwards）
Dividend payout ratio

35% or more → 40% or more

■ROE: Returnon Equity■ROIC: CO.,LTD.
Return on Invested Capital© Copyright 2007-2015
ONWARDHOLDINGS

5Carry out the financial strategy with
importance placed on capital efficiency
through utilization of financial leverageand others

Step up shareholder return by measuresincluding raising the dividend payout ratio■WACC: Weighted Average Cost of CapitalFinancial Strategy

Policy for Utilization of Funds for Growth (Cash Allocation Policy)
Three-financial year cumulative total (Plan for FY2024 to FY2026)

 Create the 40 billion yen level operating
cash flow (Cumulative results for FY2021 to FY2023: 17.5 billion yen)
 Plan growth investment (CAPEX) of a maximum of

the 70 billion yen level(Cumulative results for FY2021 to FY2023: 16.9 billion yen)

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[Operating cash flow]

Create the 40
billion yen level[Shareholder return]
Dividend payout ratioof 40% or higher

Virtuous cycle to generate further© Copyright
2007-2015 ONWARD
HOLDINGS CO.,LTD.
operatingcash flow
6[Growth investment(CAPEX)]

Maximum of the 70
billion yen level
1. Strategic investment in DX(including OMO)
2. Global strategic investment
3. M&A strategic investment[Fund-raising]- Asset divestment- Utilization of interestbearing debt

(Net D/E ratio of a maximum of 0.5 times asthe guideline)■Net D/E ratio: Net interest-bearing
debt ratioCopyright © ONWARD HOLDINGS CO., LTD.

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© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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Business Strategy

Business Strategy

Future Business Strategy
Changes to the post-COVID-19
pandemic business environment

Changes to the lifestyles
and values of customers

Increasing attention to
2 engagement between
companies and people

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Evolution in digital
3technology utilization
Progress in a declining
4 birthrate and aging
population in Japan

Revival and diversification
５ of the market of foreigners
visitingJapan© Copyright
2007-2015
ONWARD HOLDINGS CO.,LTD.

8Diversification of the market is in progress

1The Onward Group’s business strategy(1) Drive diverse brand, product anddistribution strategies in the“fashion field”(2) Accelerate growth in the “wellnessfield” in line with new values ofconsumers(3) Create a contemporary “corporatedesign field”(4) Evolve cutting-edge DX strategies

such as OMO/PLM(5) Strengthen Growth Infrastructure

for Overseas Business(6) Implement appropriate businessrisk management against future
uncertainties

Business Strategy

Drive Business Strategy in Three Business Fields(1) Drive diverse brand, product and distribution strategies in the “fashion field”
Onward Kashiyama Co., Ltd.
Onward Personal Style Co., Ltd., etc.

Develop new brands and products that meetmarket diversification and create a variety ofcustomer touchpoints that fuse online and offline(2) Accelerate growth in the “wellness field” in line with new values of consumers
Yamato Co., Ltd., Chacott Co., Ltd.,Creative Yoko Co., Ltd., KOKOBUY Co., Ltd., etc.

Copyright © ONWARD HOLDINGS CO., LTD.

Speed up growth in the business field that assists
consumers in realizing a fulfilling life with mental andphysical wellbeing such as gifts, pets and beauty(3) Create a contemporary “corporate design field”
Onward Corporate Design Co., Ltd., etc.

Expand the business field that proposes total designfor company activities, aimed at creating new© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.engagement between companies and people

9Business Strategy(4) Evolve cutting-edge DX strategies such as OMO/PLM

Copyright © ONWARD HOLDINGS CO., LTD.

Thoroughly implement DX strategies in all fields of Groupbusinesses to build a highly productive corporate organizationthat quickly responds to the market
Customer strategyBroaden the customer base of Onward Members and strengthencommunication

Improvement in sales
and service

Evolve Online Merges with Offline (OMO) Store

Higher efficiency inplanning and production

Adopt and utilize Product Lifecycle Management (PLM) System

Higher efficiency incorporate operations

Update backbone core, business processing, and information
systems continuously

ONWARD membership target

FY2023 results: 5.3 million members⇒ FY2030 plan: 10 million members

EC sales target

FY2023 results: 48 billion yen ⇒ FY2030 plan: 100 billion yen© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

10(Maintain Group’s own EC ratio of 90%)

Business Strategy(5) Strengthen Growth Infrastructure for Overseas Business
European region
Speed up growth in the JOSEPH business, acontemporary designer brand from London, the U.K.
American region
Speed up growth in the J.PRESS business, atraditional brand from the East Coast of the U.S. withmore than 120 years of history

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Asian region
Expand business in both production and sales in the
Asian market, including rapidly growing ASEAN
Overseas business sales targets
FY2023 results: 20 billion yen ⇒ FY2030 plan:© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

1130 billion yen or more

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Human CapitalManagement Strategy

Human Capital Management Strategy

Promotion of Organizational and Human Resource Platform
Transformation
1

6Fair, multi-faceted
evaluations andperformance-based
compensation

Transfer authority
to the job site

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Achieve a flatorganization

Offer multiple career
paths and personnel
development

4

3Diversify
workstyles

Promote theactivities of diversepersonnel(achieve 50% womenin leadership positions
by FY2030,and other goals)

Carry out organization and HR platform transformation with the aim of driving
the business strategy that responds to diversifying market changes and realize“customer-centric management leveraging employees’ diverse strengths”© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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Organizationaland HRplatform
reform2

Human Capital Management Strategy

Promotion of Organizational and Human Resource Platform
Transformation
1
Fair, multi-faceted
evaluations andperformancebased
compensation

Realize attractive and competitive wage levels
 Achieve and sustain the industry’s highest level in all of the job descriptions(career track, sales job, and technical job). The average salary hike rate by the newpersonnel system of FY2024 [Sales job] 10% (2,451 employees are eligible)

Engage in human resource development that supports
employee growth in each career path2
Offer multiple
career paths andpersonneldevelopment

 BEST SHOP AWARD has been held monthly since 2022, where an effort is made to
upgrade skills by sharing accomplishments with each other.
 Engage in the reskilling of employees through measuresincluding sending them to an outside business school, thereby
driving the development of human resources for corporate
management.

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 Introduce e-learning that all employees can take Introduce a “Meister System” in which employees who reachretirement age receive appropriate treatment, continue to workover the long term and pass down their skills
3
Diversify
workstyles

Promote the creation of an employee-friendly organization fullof diversity

 Onward Holdings was recognized for its initiatives such as
women empowerment and support in balancing work, childrearing and nursing-care, and was certified as the “BestWorkplace,” the highest rank, in the “D&I AWARD 2023.”© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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Human Capital Management Strategy

Promotion of Organizational and Human Resource Platform
Transformation
Advance the creation of an organization that enables each individual to play anactive role by using their uniqueness in response to various changes to the market
456

Promote theactivities of diverse
personnel

Achieve a flatorganization

Transfer authority
to the job site(achieve 50% womenin leadership positions
by FY2030,and other goals)

Copyright © ONWARD HOLDINGS CO., LTD.

 Hold education and seminars for the management team,superiors, and particular employees (a mentor system, etc.) inorder to aim at having 50% of leadership positions held bywomen by FY2030* Appoint two female executive officers during FY2024
 The Group adopted an interval system that incorporates acertain interval between work days in FY2022 to help employees
secure enough time for rest and continue working while
maintaining a work-life balance. *Interval system: Secures abreak of 11 hours before employees start working again on thefollowing day.
 Hold seminars for psychological safety for the management
team in order to advance a flat organizational culture andcommunication
 Encourage male employees to take childcare leave in order tofacilitate their effort for child-rearing* Results in FY2023: The ratio of the leave taken was 66.7%. The
averagedurationof theleave taken
was over four months.
© Copyright
2007-2015
ONWARDHOLDINGS
CO.,LTD.
15

Ratio of women in leadership
positions(Onward Kashiyama)
50%

40%
29.4%
18.8%FY2018
2018(Result)

Beginning2024
FY2024(Result)

FY20262026(Target)(Targets)

FY20302030(Target)(Targets)Copyright © ONWARD HOLDINGS CO., LTD.

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© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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Sustainable
Management Strategy

Sustainable Management Strategy

Deepening Sustainable Management Strategy (Green Onward）(1) Recycling activity of the Group’s own clothing
Extend the activities of reuse, recycling and remaking
through the “Onward Green Campaign” launched in FY2009※ Target rate of recycling the Group’s own clothing for FY2030: 20% (Result for FY2023: 9.2%)※ Through more than 10 years of engagement with the Japanese Red Cross Society, blankets and work

gloves produced from some of the collected clothing are used to support developing countries anddisaster-stricken areas.

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(2) Advance a production system that avoids excessive production

Further reduce overproduction through the expansion of made-to-orderproduction※ Increase volumes of made-to-order production for FY2030 fourfold (from FY2023)(3) Enhance traceability

Evolve traceability in the supply chain through the visualization of PLM
system-assisted production.

※ Partners collaborating in PLM that is centered on ONWARD : 25 companies will start adopting the© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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system in May 2024.

Copyright © ONWARD HOLDINGS CO., LTD.

Ａｐｐｅｎｄｉｘ© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

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Appendix

Toward Enhancing Corporate Value(Analysis of Current Status and Specific Measures)
Aim at improving ROE and PER primarily by improving profitability, raising asset efficiency,
utilizing financial leverage, and strengthening shareholder returns
Analysis of current status

ROE 8.6%
FY2023

PBR

Specific measures
Profitability 3.5%
Net profit/Sales(ONWARD VISION 2030)

FY2023*Level above the cost ofshareholders’ equity

Asset efficiency 1.1 times

Net profit

FY2023

Shareholders’ equity

Financial leverage 2.2times

Sales/Total assets

Total assets/Shareholders’ equity

Stock priceImprove profitability

Raise asset efficiency(Reduction of crossshareholdings, etc.)

Capital policy(Effective utilization of debts, etc.)

FY2023

Net assets per share

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Business growth potential
PER

Strengthen shareholder returns

Stock priceNet profit

PBR: Price-to-book ratio
ROE: Return on equity
PER: Price earnings ratio
PBR=ROE×PER© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

19(Cash allocation, etc.)(Dividend policy, etc.)

Non-financial strategy(Human capital, sustainability, etc.)

Step up IR activities

Appendix

Cross-Shareholdings Policy
Divest holdings unless the rationale of holding such stocks is recognized from theperspective of capital efficiency and others
Reduce the ratio of the amount of cross-shareholdings to consolidated net
assets to less than 10% within three years(Percentage)(Number of issues)
25

20.8%

25.0%

2020.0%1515.0%1023companies

12.4%

10.0%

Less than 10%

8companies

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50FY2020

FY2023

Listed stocks© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

20

5.0%

FY2026

Ratio to consolidated net assets (%)

0.0%

Appendix

Balance Sheet Strategic Policy• Make effective use of interest-bearing debt with the aim of aggressive growth investment
and capital structure optimization• Further seek higher asset efficiency, including reduction of cross-shareholdings
FY2021

FY2026 (Plan)

FY2023Total assets

Total assets

171.4 bil yen

157.7 bil yen
Current assets

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60.5 bil yen

Non-current
assets97.2 bil yenCurrent assets

80.5 bil yen

73.4 bil yen(Interest-bearingdebt)
38.5 bil yen

Non-current
assetsNet assets

98 bil yen

77.2 bil yen

100 bil yen

86.4 bil yen(Interestbearing debt)
40.5 bil yen

Non-current
assetsNet assets

110 bil yen

85 bil yen

Shareholders’ equity ratio 47%(Shareholders’ equity)
Net D/E ratio 0.3 times

 Ratioof cross-shareholdings to net
158.3billion
assets 12%© Copyright 2007-2015 ONWARD HOLDINGS CO.,LTD.

21Current
assetsLiabilities

Liabilities

Shareholders’ equity ratio 42%
Net D/E ratio 0.3 times
 Ratio of cross-shareholdings to net
assets 15%

210 bil yen

Total assets

Liabilities

115 bil yen(Interestbearing debt)
60 bil yen

Net assets

95 bil yen

Shareholders’ equity ratio 45%
Net D/E ratio 0.5 times or so Ratio of cross-shareholdings to net
assets Less than 10%