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

Wacoal Holdings Corp.
July 31, 2020
1

[Speakers]
Hironobu Yasuhara
Representative Director, President and Corporate Officer

Tomoyasu Ito
Director, Vice President Corporate Officer; Representative Director, President and Corporate
Officer of Wacoal Corp.

Akira Miyagi
Director and Managing Corporate Officer in charge of Group Finance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

Please see page two.
From the consolidated cumulative first quarter of the current fiscal year, some reportable segments havebeen changed to those based on internal reporting segments based on internal organizations. As a result of
this change, the Ai and PEACH JOHN Segments, which were previously included in the Wacoal Business(Domestic) Segment, have been included in the Other Segment. Segment information for the consolidated
cumulative first quarter of the previous fiscal year has been prepared based on the revised reportablesegments.
Now, let us start the explanation. Thank you in advance.

1

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

Net sales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-¥18.8 billion year over year (YoY), (-40%)

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-¥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

Miyagi: I am Miyagi. I would like to thank you for participating in the financial results briefing of Wacoal
Holdings today despite your busy schedule.
First, I will explain the results for the first quarter of the fiscal year ending March 2021 and the full-year
forecast.
Please see page four. The first quarter of the current fiscal year has been summarized.

2

Net sales for the first quarter of the current fiscal year were JPY28.6 billion. The spread of the new coronavirus
infection has resulted in a loss of approximately 4% compared with the same period in the previous year, due
to the closure of shops in various areas of the world and the low consumption caused by restraint from goingout.
We posted an operating loss of JPY4.5 billion. Although each company worked to reduce costs, it was unable
to absorb the impact of the decline in revenues, resulting in a significant loss.
Net income (loss) before income taxes resulted in a loss of JPY2.9 billion. Net valuation gains (losses) on
securities and investments totaled JPY800 million in the first quarter of the current fiscal year.
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

Please see page five. We explain the factors behind the YoY increase and decrease in sales in the first quarterof the current fiscal year in the waterfall chart.
In the first quarter of the current fiscal year, net sales decreased by JPY18.8 billion from the same period of
the previous fiscal year. As the sequence of red boxes shows, sales in nearly all businesses declined due to theimpact of store closures attributable to the spread of the infectious disease.
Particularly, in the domestic wholesale business, sales fell sharply by JPY9.9 billion, due to store closures andthe impact of restraints by suppliers. Sales of the LIVELY brand of IO, which we acquired last year, totaled
approximately JPY900 million, exceeding our initial target.

3

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

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

-2.5

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

Please see page six. This section explains the factors behind changes in operating income and loss.
Operating income decreased by JPY8.1 billion from the same period of the previous fiscal year. The table on
the upper right shows the amount of decrease in sales profit and the amount of reduction in expenses.
Although net sales profit decreased by JPY11.6 billion, due to a decline in sales, expenses were reduced by
JPY3.5 billion. For IO, which we acquired last year, we recorded a loss of approximately JPY500 million, due toour strategic investment in advertising, but we recognize it as a growth investment and is a strategic plan.
PEACH JOHN’s operating income increased in Japan, due to growth in its Ecommerce Business and a reduction
in various expenses.

4

(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%- 16.3%* Increase / decrease rate only for in-house EC in WEB business Dept.

Wacoal（★２）- 0.9%- 1.8%- 29.2%- 72.1%- 49.8%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%+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%* 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)
Peach John（Japan）★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.

7★3 The figures for Wacoal America only are disclosed. It is not the figures of sales of Wacoal International including Intimates Online Inc.(LIVELY）.

Please see page seven. For reference, net sales of major companies from January to June are shown. Sales fell
sharply in April and May, but recovered in June, when sales resumed at nearly all stores.

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

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

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8Please see page eight. This report presents an overview of results for the first quarter of the current fiscal
year.

5

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 )9Next, please see page nine. Net sales and operating income by segment are presented. From the next page,
we will look back on the first quarter of the current fiscal year by segment.

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

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

While physical stores were closed, Wacoal’s own EC business achieved high growth by capturing demand from those staying at home-¥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
Wholesale Bussines Div.
Retail and WEB
Business Dept.

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

- 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■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

Others-3,516ー-2,254

ー

1,262

ー

Wacoal1,321

5.2-2,543ー-3,864ーIntersegment transactions, etc.
eliminetions

653

ー

-515

ー

-1,168Operating income ( loss )

1,974

7.4

-3,058ー-5,032comment% Changeー10Please see page 10.
In the first quarter of the current fiscal year, sales of the Wacoal Business (Domestic) amounted to JPY15.5
billion. In Wacoal’s Ecommerce Business, sales increased by 91% YoY. However, due to the impact of store

6

closures and self-restraint from going out, sales decreased significantly in both the wholesale and retailbusinesses.
We posted an operating loss of JPY3.1 billion. Despite our efforts to reduce costs, Wacoal’s revenues declined.

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)
Year on YearFY2020 1Q
results,
3 months

ratio

FY2021 1Q
results,
3 months

ratio

ChangeWacoal International Corp.
(U.S.)

5,039

37.1

3,404

43.4

-1,635- 32.4% ■US: Local currency basis -31%, ■IO Inc., result of new consolidation +¥900 million

Wacoal Europe Ltd.

3,517

25.9

1,668

21.3

-1,849- 52.6%

Wacoal 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

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

Operating income ( loss )■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
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.)

Intersegment transactions,etc. eliminetionscomment% 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
■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

227

ー

-83

ー

-310

ー

1,862

13.7

-1,027ー-2,889ーーAs a result of the above, Wacoal business (overseas) recorded an operating loss of ¥1 billion

11

Please see page 11.
In the Wacoal Business (Overseas), net sales were JPY7.8 billion. As in Japan, due to store closure and selfrestraint from going out due to the spread of the infectious disease, the brick-and-mortar channels in eachcountry had difficulties.
An operating loss of JPY1 billion was recorded. In addition to cost reductions, the Company made use ofgovernment support measures in some regions, but the impact of the decline in sales was significant andresulted in a loss.

7

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

- 25.1%

Nanasai

1,973

27.7

1,235

23.9

-738

- 37.4% due to the impact of their inventory controls

818

11.5

252

4.9

-566

- 69.2% ■Construction orders were sluggish due to the impact of the cancellation/postponement of

426

ー

154

ー

-272

- 63.8%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

-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

Intersegment transactions,etc. eliminetions

Operating income ( loss )- 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■Sales declined due to a decrease in construction orders from customers

LecienPeach John

comment% Changevarious events and new store openings because of the spread of infectious disease■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%

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

Please see page 12. Other sales were JPY5.2 billion. Sales of PEACH JOHN in Japan increased due to growth inEcommerce sales but decreased due to weak Overseas sales.
For operating income (loss), we had an operating loss of JPY400 million. PEACH JOHN returned to the black,but NANASAI and Ai suffered large operating losses, resulting in a loss in the segment total.
Let’s move on. In this section, I will explain our full-year forecasts.

Full-year Forecasts
for Fiscal Year Ending March 31

13

8

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

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%)

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-¥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

Please see page 14. This is a summary of the full-year outlook.
Net sales are expected to decline by 15% from the previous fiscal year to JPY158 billion. The plan is based on
the assumption that the consumption slump caused by the spread of the infectious disease will continue until
the end of the fiscal year, although it is expected to recover moderately from the second quarter onward.
We expect an operating loss of JPY5 billion. In preparation for the materialization of downside risks, anadjustment of JPY1.2 billion has been included in the plan. Details will be provided later.
As a result of the above, the Company expects to record a loss of JPY3.7 billion for both income (loss) before
income taxes and net income (loss).
This is due to the spread of the infectious disease, but this is the Wacoal’s first loss since its establishment in
1949. We take this very seriously, and we intend to take various measures with a sense of speed to achieve
early profitability.

9

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

3Q 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

15

Please see page 15.
I would like to explain the prerequisites for the formulation of the full-year plan. Despite differences by region,
we expect net sales in each country to decline from the same period of the previous fiscal year due to theimpact of the spread of the infectious disease, at least until the second quarter. Wacoal is expected to finally
recover to the level of normal sales in the fourth quarter, as can be seen from the comparison with the sales
figures of the fiscal year before the previous fiscal year, in which there are a few special factors, such as theconsumption tax hike.
Overseas, we expect Wacoal’s sales in China, where the infectious disease was quickly resolved, and Wacoal’s
sales in the United States, where the ecommerce ratio is rising, to return to the previous fiscal year’s level by
the end of the fiscal year. On the other hand, in Wacoal Europe, the pace of recovery is expected to remain
moderate due to difficulties in the brick-and-mortar sales channel.

10

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

-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

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

US/Europe/China-5.8

PJ -0.3
Nanasai -2.1
Lecien -1.2
Ai -1.4

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

Please see page 16. I will explain the factors behind the changes in net sales from the previous fiscal year.
Net sales are expected to decline by JPY28.8 billion from the previous fiscal year. Specifically, we expect lower
revenues at JPY12.7 billion for Wacoal, JPY5.8 billion for three countries in Europe and America, and JPY5
billion for four domestic subsidiaries.

11

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

Please see page 17. This section explains the factors behind the changes in operating income and loss fromthe previous fiscal year.
Operating income is expected to decrease by JPY11.6 billion from the previous fiscal year. We expect that
employment subsidies related to the infectious disease will contribute JPY2.4 billion to earnings as thesesubsidies will result in a reversal of operating expenses since we adopt US GAAP.
Excluding one-time expenses such as impairment losses, operating income in real terms for the previous fiscal
year was JPY8 billion. On the other hand, the current operating loss in real terms was JPY6.2 billion, after
eliminating JPY2.4 billion of the employment subsidies and JPY1.2 billion of the adjustment budget in
preparation for the materialization of downside risk. As a result, we expect a decline in real terms to be
JPY14.2 billion.

12

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

56.5
9.7
7.6
6.7
7.1
1.9
3.3

FY2021 1Q
results,
3 months

47.2
9.1
5.4
5.7
6.9
1.7
2.1

Year on Year

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

FY2020 1Q
results,
3 months

53.4
9.3
6.3
5.7
7.2
2.2
3.1

FY2021 1Q
results,
3 months

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

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

Please see page 18. I would like to explain the full-year plan for SG&A expenses.
The reduction in selling, general and administrative expenses planned for the current fiscal year isapproximately JPY6.8 billion, but the reduction in real terms, excluding temporary expenses, subsidies, andthe adjustment budget, is JPY4.2 billion. We have already implemented cost reductions of JPY3.5 billion in thefirst quarter, so cost reductions from the second quarter onward will be limited to JPY700 million. The reasonsfor this are that we will prioritize marketing activities for future growth from the second quarter onward, andthat the cost reductions that we implemented in the fourth quarter of last year will be reversed.
We plan to continue to reduce expenses, which have a low contribution to earnings. Although this has notbeen reflected in the plan, we would like to reduce SG&A expenses by an additional JPY1 billion to JPY2 billion
in addition to the reduction target shown on this page.

13

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

Overseas 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

Please see page 19. I would like to explain the upside and downside risks in the forecast for operating income
and loss for the current fiscal year.
In terms of upside risks, we expect a sharp recovery in sales accompanying the early resolution of theinfectious disease and further reductions in selling, SG&A expenses. On the other hand, downside risks include
a decline in sales and profits due to the prolonged infectious disease, and impairment losses on tangible andintangible assets due to worsening profitability.

14

【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

Year on YearFY2021
forecast

% 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

Please see page 20. This is an overview of the forecast for the current fiscal year.

(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)

Year on YearFY2020results

ratio

FY2021
forecast

ratio

Change% Change

Wacoal Business (Japan)

106,11256.8

92,00058.2-14,112

Wacoal Business (Overseas)

50,55227.1

41,500

26.3

Other Businesses

30,09616.1

24,500100 158,000

Net Sales

186,760
FY2020results

% Of
sales

FY2021
forecast

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

Next, page 21. Net sales and operating income and loss by segment are presented.

15

(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

Next, please see page 22. The full-year forecasts for major subsidiaries are presented, so we would like you
to see more details later.

16

【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

Please see page 23. These forecasts are for the second quarter and beyond.
Net sales from the second quarter to the fourth quarter are expected to improve due to a gradual recovery inconsumer spending from the first quarter but decline by 7% YoY. In conjunction with the decline in sales, thecompany expects to post a cumulative operating loss of JPY500 million from the second quarter to the fourth
quarter.

17

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

Please see page 24. I would like to explain our capital policy and shareholder returns.
This is the basic capital policy in the current medium-term management plan announced in June 2019. There
are no changes to the basic policy at this point in time, but in the event of further changes in businessperformance or capital demand due to the spread of the infectious disease, the Company will consider
reviewing the basic policy.

18

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

Please see page 25. I will explain the year-end dividend for the current fiscal year.
Our basic policy is to pay stable dividends, while taking into account consolidated results. Nevertheless, theimpact of the spread of the infectious disease is enormous and securing liquidity on hand is an urgent issue
when the timing of convergence is uncertain.
From the perspective of the current earnings forecast, financial stability, and stable dividends to shareholders,the interim dividend forecast is JPY20 per share, a decrease of JPY20 from the previous fiscal year, and theyear-end dividend forecast is JPY20 per share, the same as the previous fiscal year. As a result, the annual
dividend forecast is JPY40 per share.
Regarding the repurchase of treasury stock, we will decide to resume the repurchase after examining our
future business conditions.

19

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

Please see page 26. I would like to explain the investment plan for the current fiscal year.
We plan to invest approximately JPY5 billion for the current fiscal year. Regarding non-urgent newinvestments, although we will reconsider the timing of implementation, we will invest in future developments,
including the cost of introducing 3D body scanners into stores, IT-related costs related to the development of
our omni-channel strategy, and the expansion of distribution warehouses in line with the strengthening of inhouse EC.
We borrowed JPY40 billion from financial institutions to ensure the liquidity on hand of group companies. We
will steadily implement initiatives for future growth while ensuring the stability of our financial base.

20

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

plan

detailamount

Net income attributable to
Wacoal Holdings Corp.★

-3.8

2.7

31.0 or more

0.7

depreciation 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)
Major investments and investment
amount in the FY2021 1Q

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

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

0

13.6

0%

68%

1

13

20.0

total

1.5

27

Please see page 27. This is the last page. This is the investment results for the first quarter of the current fiscal
year and the progress of the plan to sell the cross-shareholdings during the current medium-term
management plan period. As there is no significant progress in this first quarter, I will not provide an
explanation.
That’s all from me, so I would like to finish my explanation. This is an extremely challenging year, but we willcontinue to work to recover to sustainable growth as quickly as possible. Thank you very much for yourattention.

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

21

Yasuhara: I am Yasuhara. Thank you for taking time out of your busy schedule to participate in our financial
results briefing today.
In the first quarter, the spread of the infectious disease worldwide resulted in extremely severe results. The
outlook for the fiscal year ending March 2021 is also very difficult. While the scale of the challenges we faceis enormous, we must calmly take the outcomes of the pandemic and accelerate our transformation to realize
our long-term vision. Today, I would like to explain the Group’s initiatives for the new era.

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

Please see page 29. First, I would like to talk about the impact of the infectious disease.
I have been involved in management for many years, but this is my first time seeing the impact on thebusinesses that we operate in all countries and regions in the world. In addition, as conditions differ greatly
from region to region, there are no clear scenarios for convergence.
The fight against the new coronavirus will certainly be a long-term battle. It may take at least a year and a half,
or if it is long, it may take about three years until the world returns to normal.
We should consider the business environment after corona based on the assumption that everything will
never be reverted to its original state. We recognize the need to change greatly, 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 structure.

22

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 utilization

30

Please see page 30.
The most important item in order to survive in the face of severe environmental changes is described. It is a“self-reformation skill.” The impact of the infectious disease may have led to changes in Wacoal’s assets andvalues, so it is necessary to thoroughly inspect and update the value chain.
Fortunately, over the past few years, we have pursued the omni-channel strategy that integrates online andoffline channels. In addition to the introduction of 3D body scanners and Ai customer service at stores, theuse of RFID has begun. By combining the strengths that Wacoal has cultivated over a long period of time, suchas its research capabilities and sales capabilities, with digital products, Wacoal will strive to evolve its
organizational capabilities so that it can create the value demanded by the new era.

23

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

Page 31 presents our basic policies in light of the spread of the infectious disease. I talked about this in detailin May, so I will omit the explanation today. The next page will explain how we will implement the reforms
we have set out in this section, aiming to create a highly profitable management structure.

24

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”



FY 2022: Complete structural reforms with a focus on the next three years (formulate measures for new medium-term plan)(2) Start reforms once the direction becomes clear⇒Complete constitutional changes and structural reform, and aim to return to sustainable growth from FY2023

Process going forward
Current MTMP: 2 nd 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

Please see page 32. This section explains the initiatives in the current medium-term management plan.
First, for the current fiscal year, we will make it a period for us to consolidate what we need to do and what
we need to stop looking at after corona. As I have explained earlier, we are making progress in our digitalreform initiatives, which are essential for future growth. Due to the impact of the spread of the infectious
disease, the period for verifying the effects has been extended, but we will steadily proceed without ceasing.
On the other hand, we have been reforming the earnings structure of the Wacoal Group since the previous
fiscal year, but it has also been taking time to verify it due to the impact of the spread of the infectious disease.
We will face the reality, identify future demand, and clarify what needs to be done.
The next fiscal year, which means the fiscal year ending March 2022, will be the final year of the structuralreforms that take the next three years into account. We will complete structural reforms for a leanmanagement structure by resolutely liquidating unprofitable businesses while continuing to invest in growth.
In order to return to a growth trajectory and ensure the creation of sustainable profits over the next three
years, the remaining year and a half will be an important period, so we will work with no compromise.

25

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 Group

33

Please see page 33.
By segment, we have organized what we are already doing, what we will do in the current fiscal year, andwhat we will do by the end of the next fiscal year. With this plan, we will identify future demand, review theroles and modalities of each subsidiary and business within the Group from the perspective of total
optimization, and reorganize and separate businesses, as necessary. Next, Wacoal Corp.’s initiatives will be
explained by President Ito.
Despite an extremely challenging business environment, we plan to complete reforms during the period of
the current medium-term management plan with a view to achieving regrowth and sustainable profit
generation over the next three years. We will report the progress to you as needed, but I would be grateful if
you could give me some advice through dialogue.
That’s all from me. Thank you very much for your attention.

26

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

Ito: I would like to explain Wacoal Corp.’s initiatives. Thank you in advance. Page 35.
The spread of the infectious disease has had a variety of impacts, and the sense of values has greatly changed.
This means that there have been major changes in the direct business model that we excel in, which is thepurchase and sale of products based on our stores.

27

For example, looking at the current situation for people’s gathering places, people’s flow is shifting to rural
areas or suburban areas rather than urban areas, and problems within the commercial facilities themselves,and problems with the structures of shops are also changing.
Moreover, this is also our case, but the EC purchasing structure online has greatly increased at the same time.
I think these are big changes.
What we should accelerate now is to think of how to increase profits and maintain points of contact, including
the current real store structures and environments themselves to improve, and how to make digital
investments in EC and stores, in which we have been investing. How we link and integrate them and createcustomers taking these two points into account will be the key.
Another is the improvement of profitability, in particular, including the fixed cost, which remains high. I thinkthat how to improve this through our internal and external collaborations will be the key.
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

Please see page 36. This means that we will build deep, broad, and long-term relationships over the threeyear period of the current medium-term management plan.
Over the past several years, we have been able to manage our customers directly. Approximately 3 million
people have made Wacoal’s purchases over the past five years, and we regard this as 3 million customers ofthe directly managed EC and department stores. In reality, while using other media, more than five years onpurchasing, but in terms of the list, we have additional 2.5 million people, so to some extent, we understandthat we have about 5.5 million customers. In my opinion, the key points are to increase the number of contact
points with loyal customers, and how we acquire new customers under the pyramid and expand them.
As explained by Yasuhara, for the left part of this diagram, we will work on increasing the speed of our businessthrough digital investment, and for the top part, we have been improving the value of our stores by redefining
the value of [inaudible] stores themselves and offline stores. For the bottom part regarding collaboration withother companies, I will explain later, but in such contexts, I think the key point is how to create contact points
with areas that are not traditional Wacoal’s business areas.

28With respect to the right part, it is about how to change our profit structure including such DX. I believe that
we will center on brand restructuring particularly through [inaudible] of unprofitable offline stores, including
the elimination and consolidation of stores.
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

Please see page 37, especially the middle part that I just talked about. I would like to briefly explain theimportance of collaboration and cooperation between offline and online, and the transition in the context ofthe self-managed business.

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

Please see page 38.

29

Currently, the balance between EC sales and store sales is 15% for online and 85% for offline in the fiscal year
ended March 2020. For the fiscal year ending March 2025, we are working to improve our EC technology to
25% online and 75% offline.
Currently, offline stores account for 20% of total sales, while the wholesaling business model, including mainly
department stores, mass retailers, and specialty stores, accounts for 80% of total sales. We are moving
forward and aiming to achieve our targets of 40% for our direct managed stores and 60% for the wholesaling
business by the end of March 2025. Accordingly, we anticipate that the proportion of direct business, including
EC and directly managed stores, will be approximately 50%.

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

Please see page 39.
In terms of sales expansion of EC itself, we originally envisaged a line of JPY7 billion under the current mediumterm management plan, which is a front-line investment of JPY7 billion announced in the previous fiscal year.
However, at this stage, it is probably going to be around JPY7.5 billion in the current fiscal year. To support
this, we are working to expand the Moriyama Distribution Center in the fall of 2022 in order to enhance
individual delivery.

30

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

Please see page 40. The other point is how to deal with customers in the future, how to broaden our customer
base, and build deeper relationships. The key point is the utilization of customer data.

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 people
41

Please see page 41. At present, we have been able to capture the purchasing data of approximately 3 million
people, as I mentioned earlier. Furthermore, we have about 45,000 pieces of data which have been collectedat Human Science Research Center since 1969. In addition, 3D data itself, which was introduced in thepredecessor regulations, totaled approximately 20,000 people. However, our strengths lie not in each of them
being independent, so we would like to utilize a variety of data in relation to the customer purchasing data
and the body data itself through customer management.

31

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

Customer

Sales

Manufacturing

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)

Sales

Purchasedata New tech

3D bodydata

Customer center

CustomerPlanning

Cooperation
Body
measurement
data

Material manufacturer
Trading company, etc.
(external)

42

Please see page 42. As an example, this is a value chain that ranges from manufacturing to sales. The flow of
this business used to involve planning and procurement under various hypotheses based on the body researchdata and deliver products to customers. However, with the customer management system, including the 3D,
we can verify such hypotheses and apply them to our manufacturing as well as to the whole marketing. In
other words, we would like to develop products through a unique perspective on how physical changes canlead to changes in psychology and lead to purchases.

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

Please see page 43.

32

This shop was developed by our 3D Smart & Try in the course of our recent efforts with Isetan. AI analyzes thesizes based on 3D, which was created based on the human science research, and also realizes a story ofcustomer service that has been created at offline stores of our beauty advisors. We did this with Isetan. We
would like to cooperate with the outside world in the form of open innovation for the software part of ourbusiness.
By doing this, we want to connect with the touch points that Wacoal has never had before. We also want tocontribute to expanding the hem of the pyramid.

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

Next, please see page 44. This describes the recovery of profitability or improvement of profitability as theother major pillar. We have listed three points. Basically, what should be done with low-profit businesses.
The first is the Department Store Business. It is not just department stores, but we increase the speed andfocus on the profitability of stores. For example, there are about 400 sales floors in department stores today,
and about one-third of them has been unprofitable. It is expected that this corona situation will increase
inconvenience a little more, and in this situation, how we can create real stores, including a business model.
This is not just department stores but, as explained earlier, while we assess the future demand for the business,
we also want to judge which business to discontinue.
Second, by doing so, we can reduce the right stock or the number of brand groups on which it is based. In
other words, we will reduce SKU by approximately 30% by autumn and winter of 2021, so we will make further
progress in concrete terms. We are also considering modalities of other products other than underwear in
the same manner.
For a major point, we have been increasing productivity by focusing on the portion of total personnel costs aspart of our personnel plans since the previous fiscal year. However, the decline in sales from the second halfof the fourth quarter of the previous fiscal year caused total personnel costs to exceed 30% of manufacturingpersonnel costs, SG&A expenses, and the manufacturing business. We would like to accelerate the process ofbringing such costs to 25% as soon as possible, taking the personnel plan, including the recruiting process,into account. I would like to use this axis to strengthen profitability.

33

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

Initiatives for FY2022

To be implemented this FY…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

Finally, regarding page 45, we have organized what we are already doing, what we will do in the current fiscal
year, and what we will do in the next fiscal year. Since June, which was last month, we have been discussing
our management strategies for the entire company with the specific items described in the current direction,
so I would like to explain this at a new stage.
Thank you very much for your continued support. Thank you for your attention.

34