[Translation]
Consolidated Business Results for the Second Quarter of the Fiscal Year Ending March 31, 2023
[IFRS]
November 11, 2022
Stock Exchange: Tokyo

Listed Company: Wacoal Holdings Corp.
Code Number: 3591
(URL: https://www.wacoalholdings.jp/)
Representative: (Position) Representative Director, President and CEO
For Inquiries: (Position) Corporate Officer, Head of Corporate Planning Dept.

(Name) Hironobu Yasuhara(Name) Katsuya Hirooka
Tel: +81 (075) 682-1010

Scheduled quarterly report submission date:November 14, 2022
Scheduled dividend payment start date:
December 9, 2022
Supplementary materials regarding quarterly business results: Yes
Explanatory meeting regarding quarterly business results:
Yes (for institutional investors, analysts and the press)(Amounts less than 1 million yen have been rounded)

1.

Second Quarter of the Fiscal Year Ending March 31, 2023 (April 1, 2022 – September 30, 2022)(1)

Consolidated Business Results(% indicates increase (decrease) from the corresponding period of the previous fiscal year)

Business
ProfitRevenue
Millions of Yen

Second Quarter
ended September
30, 2022
Second Quarter
ended September
30, 2021%

Profit Before
Income Taxes andEquity in Net
Profit of AffiliatedCompanies

Operating
ProfitMillions of Yen%

Millions of Yen%

Millions of Yen%

ProfitMillions of Yen%

97,506 13.0

4,344

14.7

4,001

(13.3)

5,881

8.0

4,283

25.5

86,286

3,787

-

4,617

-

5,444

-

3,412

-

-

Net Profit
Attributable to
Owners of Parent

Total
Comprehensive
IncomeBasic Earnings
per Share

Diluted Earnings
per Share

Millions of Yen

Millions of Yen %

Yen

Yen

%

Second Quarter
ended September
4,201 22.3
11,412 210.4
68.91
68.62
30, 2022
Second Quarter
ended September
3,435
3,676
55.01
54.78
30, 2021(Note) Business profit is calculated by subtracting cost of sales, and selling, general and administrative
expenses from revenue.
(2)

Consolidated Financial Condition

As of September 30, 2022
As of the end of Fiscal
Year (March 31, 2022)

Total Assets

Total Equity

Equity Attributable to
Owners of Parent

Ratio of Equity
Attributable to
Owners of Parent

Millions of Yen

Millions of Yen

Millions of Yen%

302,426

227,041

224,076

74.1

299,177

220,868

217,990

72.9

-1-

2.

Status of Dividends

End of First
Quarter
Yen

Annual Dividend
End of Second End of Third
Quarter
Quarter
Yen

Yen

Fiscal Year Ended March 31, 2022
–
20.00
–
Fiscal Year Ending March 31, 2023–
40.00
Fiscal Year Ending March 31, 2023–
(Estimates)(Note) Revision of estimated dividends announced during the latest quarter: No
3.

Year-End

Total

Yen

Yen

30.00

50.00

40.00

80.00

Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31,
2023)(% indicates increase (decrease) from the previous fiscal year)

Business Profit Operating Profit

Profit Before
Income Taxes
and Equity in
Net Profit ofAffiliatedCompanies

Net Profit
Attributable to
Owners of
ParentMillions of Yen %Millions of Yen %Millions of Yen %YenAnnual
200,000 16.2
5,000 912.1
8,000 143.1
10,500 157.2
8,000 361.9(Note) Revision of forecast of consolidated business results announced during the latest quarter: Yes

131.22

Revenue

Millions of Yen %Millions of Yen %-2-

Basic Earnings
per ShareNotes(1)

Changes in significant subsidiaries in the consolidated cumulative second quarter of the current fiscal year (i.e.
changes in specified subsidiaries (tokutei kogaisha) which involve change in scope of consolidation): None

(2)

Changes in accounting principles and/or accounting estimates:(i) Changes in accounting principles required by IFRS: None(ii) Changes in accounting principles other than (i) above: None(iii) Changes in accounting estimates: None(3)

Number of Issued Shares (Common Stock)
Second Quarter ended
September 30, 2022
(i)
(ii)
(iii)

Number of issued shares (including
treasury stock) as of the end of:
Number of shares held as treasury
stock as of the end of:
Average number of shares duringconsolidated second quarter (second
quarter ended September 30):

Fiscal Year ended
March 31, 2022

64,500,000 shares

65,589,042 shares

4,523,114 shares

4,130,773 shares

60,965,308 shares

62,438,539 shares*These quarterly financial statements are exempt from the review procedures.
*Cautionary Statement regarding Forecast of Business Results(Implementation of the International Financial Reporting Standards (“IFRS”))
Our group has implemented IFRS starting from the current consolidated fiscal year. The financial figures for thecorresponding period of the previous fiscal year and the previous fiscal year are also presented in accordance with IFRS.
For differences between IFRS and U.S. GAAP in the financial figures, please see “2. Condensed Quarterly Consolidated
Financial Statements and Accompanying Notes – (5) Notes to Condensed Quarterly Consolidated Financial Statements(First-time adoption)” on page 18 of the attached materials.
(Cautionary note on forward-looking statements)
The forecast of business results is based on reasonable information we obtained as of the date hereof and, due to various
risks, uncertainties and other factors arising in the future, actual results in the future may differ largely from the estimates
set out in this document. For notes on conditions used for the forecast of business results and cautionary statements
regarding forecast of business results, please see “1. Qualitative Information regarding Consolidated Performance during
the Second Quarter – (3) Qualitative Information regarding Forecast of Consolidated Business Results” on page 9 of theattached materials.

-3-

Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Second Quarter ------------------- 5(1)

Qualitative Information regarding Consolidated Business Results ---------------------------------------------- 5(2)

Qualitative Information regarding Consolidated Financial Condition ------------------------------------------ 9(3)

Qualitative Information regarding Forecast of Consolidated Business Results ------------------------------- 92.

Condensed Quarterly Consolidated Financial Statements and Accompanying Notes ------------------------ 10(1)

Condensed Quarterly Statement of Financial Position ----------------------------------------------------------- 10(2)

Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated
Statement of Comprehensive Income ------------------------------------------------------------------------------ 12(3)

Condensed Quarterly Consolidated Statement of Changes in Equity ------------------------------------------ 14(4)

Condensed Quarterly Consolidated Statement of Cash Flows -------------------------------------------------- 15(5)

Notes to Condensed Quarterly Consolidated Financial Statements -------------------------------------------- 16(Notes on Going Concern) ------------------------------------------------------------------------------------------- 16(Segment Information) ----------------------------------------------------------------------------------------------- 16(First-time Adoption) ------------------------------------------------------------------------------------------------- 18

-4-

1.

Qualitative Information regarding Consolidated Performance during the Second Quarter(1)

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Six Months ended September 30, 2022
(Millions of Yen)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Business profit
Other income
Other expenses
Operating profit
Finance income
Finance expense
Share of profit of investments accounted for using
equity method
Profit before income taxes and equity in net profit ofaffiliated companies
Net profit attributable to owners of parent

Previous Consolidated
Cumulative Second
Quarter(From April 1, 2021 toSeptember 30, 2021)
Amount86,28637,27049,01645,229
3,787
943
113
4,617
766
218
279

Current Consolidated
Cumulative Second
Quarter(From April 1, 2022 toSeptember 30, 2022)
Amount97,506
41,341
56,16551,821
4,344
1,036
1,379
4,001
1,055
552
1,377

Increased/(Decreased) fromprevious consolidated
cumulative
second quarter
Amount+11,220+4,071+7,149+6,592+557+93+1,266
(616)
+289
+334
+1,098

%
+13.0
+10.9
+14.6
+14.6
+14.7
+9.9
(13.3)+37.7+153.2+393.5

5,444

5,881

+437

+8.0

3,435

4,201

+766

+22.3

(Our group voluntarily implements the International Financial Reporting Standards (“IFRS”) starting from the
beginning of the current cumulative second quarter, and the results for the previous cumulative second quarter havebeen reclassified to conform to IFRS.)
During the current consolidated cumulative second quarter (April 1, 2022 - September 30, 2022), our group’s
domestic business environment continued to remain challenging as the number of customers visiting our retail storesstill had a weak bounce back, despite relaxation of restrictions related to the coronavirus pandemic (“COVID-19”).
The outlook is challenging due to price inflation of raw materials and energy as well as the recent rapid depreciationof the Japanese yen. Our business environment in the United States remained sluggish due to weaker consumer
confidence as a result of the continuing inflation and higher interest rates to control such inflation. Our business in
China also remained challenging due to the continuing implementation of strict COVID-19 restrictions. Our
business in Europe, on the other hand, maintained its strong sales despite the continuing inflation. In addition, ourbusiness in other Asian countries showed signs of recovery as relaxation of COVID-19 restrictions took place andfoot traffic increased.
Under such circumstances, our group is moving forward with our initiatives to address increasingly complex
and diverse social issues as an opportunity for future growth, and to enhance our corporate value by promoting“sustainable management”, a management approach that balances resolving social issues on one hand andsustainable growth on the other hand through our business activities, under the ‘VISION 2030”, our medium- to-longterm strategy framework which we announced in June 2022. In addition, our new mid-term business plan for the next
three years, which starts in the current fiscal year, is designed to lay the foundation to realize our new vision
formulated under “VISION 2030”, which is “to evolve and grow” as “Wacoal Group of the World” by providing
both physical and emotional beauty and richness to individuals through high sensitivity and premium quality”, and topromote initiatives for transforming into a highly profitable company capable of sustainable growth.
In our domestic business, we will continue promoting our unique CX strategy including the utilization of ourcustomer database and merger between online and offline activities to improve value of our customer experience, andstrengthening our efforts to improve profitability, aiming “to transform ourselves into a resilient corporate structure”.
In our overseas business, we will seek further expansion by expanding our e-commerce business and entering into the-5-emerging markets, in addition to expanding solid sales growth in the existing areas where we conduct our business.
On the financial strategies side, we will work to improve our return on equity by improving profitability and capitalefficiency while conducting active investments for growth.
As a result of the above, for the current consolidated cumulative second quarter, consolidated revenue was
97.51 billion yen (an increase of 13.0% as compared to the corresponding period of the previous fiscal year),consolidated business profit was 4.34 billion yen (an increase of 14.7% as compared to the corresponding period of
the previous fiscal year), consolidated operating profit was 4.00 billion yen (a decrease of 13.3% as compared to thecorresponding period of the previous fiscal year), consolidated profit before income taxes and equity in net profit ofaffiliated companies were 5.88 billion yen (an increase of 8.0% as compared to the corresponding period of theprevious fiscal year), and consolidated net profit attributable to owners of parent was 4.20 billion yen (an increase of
22.3% as compared to the corresponding period of the previous fiscal year). The key exchange rates used for thecurrent consolidated cumulative second quarter (the corresponding period of the previous fiscal year) were: 133.97
yen (109.80 yen) to the U.S. dollar; 162.89 yen (152.50 yen) to the Sterling pound; and 19.88 yen (16.99 yen) to theChinese yuan.
(ii)

Business Overview of Our Operating Segments(Millions of Yen)
Previous Cumulative
Second Quarter(from April 1, 2021 toSeptember 30, 2021)
AmountTotal Revenue
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

Operating Profit/(Loss)
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

a.

86,28642,93531,2996,106
5,946

Current Cumulative
Second Quarter(from April 1, 2022 toSeptember 30, 2022)

Distribution
Ratio (%)
100.0
49.7
36.3
7.1
6.9

Amount97,506
48,86535,086
6,023
7,532

Distribution
Ratio (%)
100.0
50.1
36.0
6.2
7.7

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%+11,220+5,930+3,787(83)+1,586

+13.0
+13.8
+12.1
(1.4)
+26.7

Previous Cumulative
Second Quarter(from April 1, 2021 toSeptember 30, 2021)

Current Cumulative
Second Quarter(from April 1, 2022 toSeptember 30, 2022)

Increased/(Decreased) fromprevious cumulative
second quarter

Amount% to Sales

Amount% to Sales

Amount

%

5.4
3.6
7.3
17.7
-

4,001
1,570
1,552
830
49

4.1
3.2
4.4
13.8
0.7

(616)
+45
(726)
(249)
+314

(13.3)+3.0(31.9)(23.1)
-

4,617
1,525
2,278
1,079
(265)

Wacoal Business (Domestic)In our “Wacoal Business (Domestic)” segment, we promoted our unique CX strategy to improve value of ourcustomer experience, and continue to make efforts on cost structure reform, in order to achieve the core strategy
aiming “to transform ourselves into a resilient corporate structure” under our mid-term business plan.
During the current cumulative second quarter, sales from our existing member customers both offline andonline (our e-commerce website) remained strong as a result of our successful efforts to strengthen the retention
marketing aimed at our existing member customers. Sales from non-member customers, including new customers,
however, continued to be sluggish and fell significantly below our expectation as we could not implement marketingmeasures aimed at increasing store visits. In addition, delay in the normalization of the production at our factory in
Vietnam caused delays in the delivery schedule of our products under our core brands, which resulted in a loss ofsales opportunities.
As a result of the above, revenue attributable to our “Wacoal Business (Domestic)” segment was 48.87
billion yen (an increase of 13.8% as compared to such revenue for the corresponding period of the previous fiscal-6-year). Operating profit was 1.57 billion yen (an increase of 3.0% as compared to such operating profit for thecorresponding period of the previous fiscal year) due to the reduction of fixed costs as a part of our cost structurereform, in addition to increased revenue, offsetting the increase in costs related to the expansion of our Moriyama
Distribution Center. Starting in the current fiscal year, we have changed the presentation of net sales from Wacoal
Corp. related to transactions with department stores to be based on storefront prices, but we have not made retroactive
revisions. This change in presentation has no impact on operating profit because this change resulted in increased inboth revenue and selling, general and administrative expenses of the same amount (2.61 billion yen).
b.

Wacoal Business (Overseas)

In order to “accelerate global growth” which is one of our core strategies under the mid-term business planwith respect to our “Wacoal Business (Overseas)” segment, we continue to make efforts to acquire new customers bystrengthening digital marketing and to convert existing customers to loyal customers by utilizing data andstrengthening CRM.
Sales from Wacoal Europe Ltd. (“Wacoal Europe”) increased as a result of expansion of sales of our products
under “Elomi” brand against the backdrop of the growing body-neutral trend (accepting your body for what it is), in
addition to the strong sales from swimwear products supported by the relaxation of COVID-19 restrictions in the
United Kingdom and Europe. On the other hand, sales from Wacoal International Corp. (U.S.) were sluggish due tothe absence of the recovery from the impact of COVID-19 seen during the corresponding period of the previous fiscal
year, as well as deterioration in consumer confidence in the wake of the inflation and the rise in interest rates tocontrol such inflation. Sales from Wacoal America, Inc. on a local currency basis, decreased due to the impact of ourmajor clients’ restraint of procurement, as well as weak sales from our physical stores. In addition, sales from
Intimates Online, Inc. (“Intimates Online”), which distributes the “LIVELY” brand significantly decreased as ourefforts to reassess media mix to attract new customers failed to produce results. Sales from Wacoal China Co., Ltd.
(“Wacoal China”) significantly decreased due to the impact of the strict restrictions on activities under thezero-COVID policy, in addition to the weak e-commerce sales.
As a result of the above-described factors and the recent rapid depreciation of the Japanese yen against key
currencies, sales revenues attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis were
35.09 billion yen (an increase of 12.1% as compared to such sales revenues for the corresponding period of theprevious fiscal year). Operating profit was 1.55 billion yen (a decrease of 31.9% as compared to such operating profit
for the corresponding period of the previous fiscal year) due to negative impact of operating loss recorded at Wacoal
China and Intimates Online, as well as one-time loss recorded at Wacoal Europe.
c.

Peach John BusinessIn our Peach John Business, we aim to achieve a high profit level by promoting product development that
captures consumer needs and by developing effective marketing strategies.
During the current cumulative second quarter, sales from our directly-managed stores exceeded the level forthe corresponding period of the previous fiscal year due to the absence of negative impact of the closings of physicalstores following the spread of COVID-19 seen during the corresponding period of the previous fiscal year, as well as
our marketing measures which contributed to an increase in the number of customers visiting physical stores. On theother hand, although some of our marketing measures, including the casting of a popular male artist as our model andthe collaboration project with the movie “ONE PIECE FILM RED”, gained a certain level of publicity, oure-commerce sales fell below the level of the corresponding period of the previous fiscal year as the overall
effectiveness of our marketing measures did not reach the expected level.
As a result of the above, revenue and operating profit attributable to our “Peach John Business” segment
were 6.02 billion yen (a decrease of 1.4% as compared to such revenue for the corresponding period of the previous
fiscal year) and 0.83 billion yen (a decrease of 23.1% as compared to such operating profit for the corresponding
period of the previous fiscal year), respectively. Although operating profit decreased from the corresponding periodof the previous fiscal year due to sharp increases in raw material prices and an increase in sales promotion expenses,
we maintained a high level of profit.
d.

Other

In our “Other” business segment, we are building a system that can continue to steadily generate profits byactively addressing unprofitable businesses and reassessing fixed costs, in order to achieve the core strategy aiming“to transform ourselves into a resilient corporate structure” under our mid-term business plan.

-7-

During the current cumulative second quarter, revenue from Lecien Corporation increased as a result of arecovery in sales of its own brand products, despite the weak sales of our private products sold by major apparel
supply chain companies. In addition, revenue from Nanasai Co., Ltd. and Ai Co., Ltd. significantly increased on theback of a recovery in demand following the relaxation of COVID-19 restrictions.
As a result of the above, revenue and operating profit attributable to our “Other” business segment were 7.53
billion yen (an increase of 26.7% as compared to such revenue for the corresponding period of the previous fiscal
year) and 0.05 billion yen (as compared to an operating loss of 0.27 billion yen for the corresponding period of theprevious fiscal year). We recorded profit due to increased revenue and an improvement in profit structure resulting
from a progress in reassessment of operations by each business entity, despite the expenses incurred in connection
with the liquidation of a subsidiary of Lecien Corporation.
(Reference) Revenue and Operating Profit/ (Loss) of Major Subsidiaries(Millions of Yen)

Revenue

Previous Cumulative
Second Quarter(from April 1, 2021 toSeptember 30, 2021)
AmountWacoal Corp.
Wacoal International Corp. (U.S)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

38,826
14,445
8,596
5,550
6,106
1,748
2,515

Current Cumulative
Second Quarter(from April 1, 2022 toSeptember 30, 2022)

Distribution
Ratio (%)
45.0
16.7
10.0
6.4
7.1
2.0
2.9

Amount46,01815,537
10,069
4,796
6,023
1,848
3,248

Distribution
Ratio (%)
47.2
15.9
10.3
4.9
6.2
1.9
3.3

Increased/(Decreased) fromprevious cumulative
second quarter
Amount%+7,192+1,092+1,473
(754)
(83)
+100
+733

+18.5
+7.6
+17.1
(13.6)
(1.4)
+5.7
+29.1

*Revenue from external customers only
(Millions of Yen)

Operating Profit/(Loss)

Wacoal Corp.
Wacoal International Corp. (U.S.)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

Previous Cumulative
Second Quarter(from April 1, 2021 toSeptember 30, 2021)

Current Cumulative
Second Quarter(from April 1, 2022 toSeptember 30, 2022)

Increased/(Decreased) fromprevious cumulative
second quarter

Amount% to Sales

Amount% to Sales

Amount

%

2.3
7.9
12.9
17.7
-

1,967
596
409
(656)
830
(185)
20

4.3
3.8
4.1
13.8
0.6

+1,059
(540)
(699)
(503)
(249)
(113)
+131

+116.6(47.5)(63.1)(23.1)
-

908
1,136
1,108
(153)
1,079
(72)
(111)

-8-

(2)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated second quarter were 302,426 million yen, an
increase of 3,249 million yen from the end of the previous fiscal year, mainly due to the increases in inventories andan increase in goodwill attributable to the depreciation of the Japanese yen, and an increase in investments accounted
for using equity method, despite a decreased in cash and cash equivalents due to payments for purchase of treasury
stock and repayment of borrowings.
Our total liabilities were 75,385 million yen, a decrease of 2,924 million yen from the end of the previous
fiscal year, mainly due to a decrease in borrowings.
Equity attributable to owners of parent was 224,076 million yen, an increase of 6,086 million yen from theend of the previous fiscal year, mainly due to an increase in exchange differences on translation of foreign operations
due to the effect of the depreciation of the Japanese yen.
As a result of the above, ratio of equity attributable to owners of parent as of the end of the current
consolidated second quarter was 74.1%, an increase of 1.2% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the current consolidated second quarter were 30,000 million yen,a decrease of 7,485 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 4,854 million yen, an decrease of 5,631 million yen ascompared to the corresponding period of the previous fiscal year, after adjustments for changes in assets andliabilities to our profit of 4,283 million yen plus adjustments for depreciation and amortization expenses and income
taxes payable.
(Cash Flow Used in Investing Activities)
Cash flow used in investing activities was 1,117 million yen, a decrease of 1,785 million yen as compared tothe corresponding period of the previous fiscal year, due to purchase of property, plant and equipment and intangible
assets.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 12,512 million yen, a decrease of 12,148 million yen as comparedto the corresponding period of the previous fiscal year, due to repayment of borrowings, payments made fordividends and payments for purchase of treasury stock.
(3)

Qualitative Information regarding Forecast of Consolidated Business Results
We have revised our forecast of consolidated business results for the fiscal year ending March 31, 2023

which we announced on May 13, 2022. For details, please see “Announcement of Revisions to the Forecast ofConsolidated Business Results (IFRS)” which we announced today.

-9-

2.

Condensed Quarterly Consolidated Financial Statements and Accompanying Notes(1)

Condensed Quarterly Statement of Financial Position(Millions of Yen)
Accounts

Date of Transition(April 1, 2021)

Previous
Consolidated
Fiscal Year as ofMarch 31, 2022

Current Consolidated
Second Quarter
as of
September 30, 2022

63,987
18,6572,238
43,402
7,067
135,351

37,48520,706
1,795
45,926
2,923
108,835

30,00021,178
1,894
52,686
4,947
110,705

44,973
12,967
21,16915,343
3,126
17,89856,334
9,434
1,641
979

48,602
13,986
22,945
15,666
2,725
18,23952,24913,2801,680
970

48,164
13,12225,37914,965
2,722
20,25250,771
13,291
2,011
1,044

183,864
319,215

190,342
299,177

191,721302,426

AssetsCurrent assets:
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets:
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Investment property
Investments accounted for using equity method
Other financial assets
Retirement benefit assets
Deferred income taxes
Other non-current assets
Total non-current assets
Total assets- 10 -

(Millions of Yen)
Accounts

Date of Transition(April 1, 2021)

Previous
Consolidated
Fiscal Year as ofMarch 31, 2022

Current Consolidated
Second Quarter
as of
September 30, 2022

40,707
3,657
15,0582,365879
14,132
76,798

10,227
5,197
16,7381,661
1,363
14,08049,266

5,336
4,747
16,011
2,145
1,125
16,21945,583

1,498
8,676
1,639
2,089
12,065
1,516

1,626
8,254
820
3,466
13,607
1,270

3,321
7,894
－
3,432
13,891
1,264

27,483
104,281

29,04378,30929,80275,385

13,26029,120156,143
22,381(8,876)
212,028
2,906

13,26029,077
158,940
27,571(10,858)
217,990
2,878

13,26029,000158,676
34,358(11,218)

214,934

220,868

227,041

319,215

299,177

302,426

Liabilities and Equity
Liabilities
Current liabilities:
Borrowings
Lease liabilities
Trade and other payables
Other financial liabilities
Income taxes payable
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Other financial liabilities
Retirement benefit liability
Deferred income taxes
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityCommon stock
Additional paid-in capital
Retained earnings
Other components of equity
Treasury stock, at cost
Total equity attributable to owners of parent
Noncontrolling interests
Total equity
Total liabilities and equity- 11 -

224,076
2,965

(2)

Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated
Statement of Comprehensive Income(Condensed Quarterly Consolidated Statement of Profit or Loss)(Millions of Yen)
Accounts

Previous Consolidated
Cumulative Second Quarter(From April 1, 2021
to September 30, 2021)

Current Consolidated
Cumulative Second Quarter(From April 1, 2022
to September 30, 2022)%

Revenue
Cost of sales
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments accounted for using
equity method
Profit before tax
Income tax expense%

86,286(37,270)(45,229)
943
(113)
4,617
766
(218)

100.0
(43.2)(52.4)
1.1
(0.1)
5.4
0.9
(0.3)

97,506(41,341)(51,821)
1,036(1,379)
4,001
1,055
(552)

100.0
(42.4)(53.1)
1.0
(1.4)
4.1
1.1
(0.6)

279

0.3

1,377

1.4

5,444
(2,032)
3,412

6.3
(2.3)

5,881
(1,598)

6.0
(1.6)

4.0

4,283

4.4

Profit attributable to:
Owners of parent
Noncontrolling interests
Profit

3,435
(23)
3,412

4.0
(0.0)
4.0

4,201
82
4,283

4.3
0.1
4.4

Earnings per share:
Basic earnings per share (yen)Diluted earnings per share (yen)

55.01
54.78

Profit- 12 -

68.91
68.62

(Condensed Quarterly Consolidated Statement of Comprehensive Income)Previous Consolidated
Cumulative Second Quarter(From April 1, 2021
to September 30, 2021)(Millions of Yen)
Current Consolidated
Cumulative Second Quarter(From April 1, 2022
to September 30, 2022)

3,412

4,283

202

(187)

－

(45)

(17)

32

185

(200)

465

7,049

(386)

280

79
264

7,329
7,129

Comprehensive income

3,676

11,412Comprehensive income attributable to:
Owners of parent
Noncontrolling interests

3,744
(68)

11,230182

3,676

11,412

Accounts
ProfitOther comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value throughother comprehensive income
Remeasurement of defined benefit plans
Share of other comprehensive (loss) income ofinvestments accounted for using equity method
Total
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translation of foreign
operations
Share of other comprehensive income ofinvestments accounted for using equity method
Total
Total other comprehensive income

Comprehensive income- 13 -

(3)Condensed Quarterly Consolidated Statement of Changes in Equity
Previous Consolidated Cumulative Second Quarter (From April 1, 2021 to September 30, 2021)(Millions of Yen)
Equity attributable to owners of parent
Item
Share capital

Balance at April 1, 2021

13,260Capitalsurplus29,120Retainedearnings

Other
componentsof equity

Treasurystock

156,143

22,381(8,876)

ProfitTotal comprehensive income

3,435

－

309

Repurchase of treasury stock

Total equity

2,906

214,934

3,435

(23)

3,412

309

(45)

264

－

3,744

(68)

3,676

(0)

(0)

(0)

309
－

Total

212,028

3,435

Other comprehensive income

Noncontrollinginterests

Disposal of treasury stock

(0)

0

0

0

Share-based payment transactions

(73)

101

28

28

Dividends(1,248)(1,248)(82)(1,330)－55

55Equity transactions with noncontrollinginterests
Transfer from other components of equity toretained earnings

39

(39)

－

－

Total transactions with owners

－

(73)

(1,209)(39)

101(1,220)(27)(1,247)

Balance at September 30, 2021

13,26029,047

158,369

22,651(8,775)

214,552

2,811

217,363

Current Consolidated Cumulative Second Quarter (From April 1, 2022 to September 30, 2022)(Millions of Yen)
Equity attributable to owners of parent
Item
Share capital

Balance at April 1, 2022

13,260Capitalsurplus29,077

Treasury
stock

Total

158,940

27,571(10,858)

217,990

2,878

220,868

4,201

82

4,283

7,029

100

7,129

－

11,230182

11,412(3,335)(3,335)(3,335)

2,863

－

－

112

35

35

4,201

Other comprehensive income

7,029
－

4,201

－

7,029

Repurchase of treasury stock
Cancellation of treasury stock(2,863)

Share-based payment transactions(77)

Dividends

Total equity

Other
componentsof equity

ProfitTotal comprehensive income

Noncontrollinginterests

Retainedearnings(1,844)

Transfer from other components of equity toretained earnings(1,844)

242

(242)

(95)

－

(1,939)－Total transactions with owners

－

(77)

(4,465)

(242)

(360)

(5,144)(95)(5,239)Balance at September 30, 2022

13,26029,000158,676

34,358(11,218)

224,076

2,965

227,041- 14 -

(4)Condensed Quarterly Consolidated Statement of Cash Flows

Accounts

Previous Consolidated
Cumulative Second Quarter(From April 1, 2021
to September 30, 2021)(Millions of Yen)
Current Consolidated
Cumulative Second Quarter(From April 1, 2022
to September 30, 2022)

3,412
4,909
(766)
218

4,283
5,018
(1,055)552(279)(1,377)

2,032
(126)
945
(1,129)(657)(2,475)

1,598
137
553
(4,477)(568)(1,850)

62

(74)

145
(507)
5,784
36
955
(116)
3,826
10,485

2,771
(958)
4,553
38
1,218
(106)
(849)
4,854

367
(817)
(3,268)271(1,522)
(2)

293
(84)
(1,447)243(1,051)
(33)

2,039

986

30
(2,902)(24)(1,117)20,0004,896(25)(2,092)55(0)(1,248)(82)(1,268)(24,660)

1,340－(2,975)－(3,335)(1,844)(95)(707)(12,512)

131

1,290

16,946
63,98747,041

7,485
37,48530,000Operating activities
ProfitDepreciation and amortization
Finance income
Finance costs
Share of (profit) of investments accounted for using
equity method
Income tax expense
Loss (gain) on sale of fixed assets
Increase in trade and other receivables
Increase in inventories
Increase in other assets
Decrease in trade and other payables(Decrease) increase in retirement benefit asset or
liability
Increase in other liabilities
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes (paid) received
Net cash provided by operating activities
Investing activities
Proceeds from withdrawal of time deposits
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of other financial assets
Proceeds from sale or amortization of other financial
assetsOther
Net cash used in investing activities
Financing activities
Net decrease in short-term bank loans with original
maturities of three months or lessProceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Capital contribution from noncontrolling interests
Payments for purchase of treasury stock
Dividends paid to owners of parent
Dividends paid to noncontrolling interests
Contingent consideration payment
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 15 -

(5)Notes to Condensed Quarterly Consolidated Financial Statements(Notes on Going Concern)
Not applicable.
(Segment Information)(i)

Reportable Segment Information

Previous Consolidated Cumulative Second Quarter (From April 1, 2021 to September 30, 2021)(Millions of Yen)
Reportable Segment
Other(Note) 1

Adjustments

Consolidated

80,3405,946－

86,286

178

4,877

1,911

(6,788)－35,613

6,284

85,217

7,857(6,788)86,286

2,278

1,079

4,882

(265)

－

4,617

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

42,93531,299

6,106

385

4,314

Total

43,320

Segment profit (loss)(Note) 2

1,525

Total

Revenue
External customers
Intersegment

Current Consolidated Cumulative Second Quarter (From April 1, 2022 to September 30, 2022)(Millions of Yen)
Reportable Segment
Other(Note) 1

Adjustments

Consolidated

89,974

7,532－

97,506

146

8,094

1,983

(10,077)－

42,505

6,169

98,068

9,515(10,077)

97,506

1,552

830

3,952

49

－

4,001

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

48,86535,086

6,023

529

7,419

49,394
1,570

Total

Revenue
External customers
Intersegment
Total
Segment profit(Note) 2(Note)

1.
2.
3.

The “Other” category includes Lecien business, Nanasai business, and other business segments which are not included in theoperating segment.
The sum of the segment profit (loss) agrees to the operating profit on the condensed quarterly consolidated statement of profit orloss. For a reconciliation from operating profit (loss) to profit before income taxes and equity in net profit of affiliatedcompanies, please see the condensed quarterly consolidated statement of profit or loss.
The Company accounts for intersegment sales and transfers at cost plus an interest.

- 16 -

(ii)Segment Information by Region
Revenue – external customers(Millions of Yen)
Previous Consolidated Cumulative Second Quarter(From April 1, 2021 to September 30, 2021)

Current Consolidated Cumulative Second Quarter(From April 1, 2022 to September 30, 2022)

Japan

54,233

61,797

Asia and Oceania

9,856

10,973

Americas and Europe

22,197

24,736

Total

86,286

97,506(Note)

1.
2.

Countries or areas are classified according to locations of consolidated companies.
Of “Americas and Europe” category, revenue in the United States for the previous consolidated cumulative second quarter andcurrent consolidated cumulative second quarter were 17,082 million yen and 18,199 million yen, respectively.

- 17 -

(First-time Adoption)
Starting from the current consolidated first quarter, our group began preparing our condensed quarterly
consolidated financial statements in accordance with IFRS. Previously, our group prepared the financial consolidated
statements for the fiscal year ended March 31, 2022 in accordance with U.S. GAAP. The date of transition to IFRS is April
1, 2021.
(1）IFRS 1 – Exemptions
In principle, IFRS requires companies that adopt IFRS for the first time (a “first-time adopter”) to apply IFRS
standards retrospectively. IFRS 1 First-time Adoption of International Financial Reporting Standards (“IFRS 1”),
however, outlines certain mandatory and discretionary exemptions from retrospective application of IFRS standards. The
effect of the application of these exceptions and exemptions is adjusted in retained earnings and/or other components ofequity at the date of transition to IFRS. The exemptions adopted by our group upon transition from U.S. GAAP to IFRS
are as follows:- Business combinations
A first-time adopter may choose not to apply IFRS 3 Business Combinations (“IFRS 3”) retrospectively tobusiness combinations for which the acquisition date occurs prior to the date of transition to IFRS. Our group has appliedsuch exemption and chosen not to apply retrospectively to business combinations that occurred prior to the date oftransition. As a result, the amount of goodwill arising from business combinations prior to the date of transition is based on
the carrying amount as of the transition date in accordance with U.S. GAAP.
Goodwill is tested for impairment as of the transition date, regardless of whether there is any indication of
impairment.
- Deemed cost
IFRS 1 permits the use of fair value as of the date of transition to IFRS for property, plant and equipment,
investment property and intangible assets as deemed cost as of that date. Our group uses fair value as of the date oftransition for certain intangible assets as deemed cost under IFRS.
- Exchange differences on translation of foreign operations
IFRS 1 permits a first-time adopter to choose to deem the cumulative amount of the exchange differences ontranslation of foreign operations to be zero as of the date of transition to IFRS. Our group has chosen to deem thecumulative amount of the exchange differences on translation of foreign operations to be zero as of the date of transition to
IFRS.
- Leases
Under IFRS 1, a first-time adopter may determine whether an arrangement contains a lease as of the date oftransition to IFRS based on the facts and circumstances at the date of transition. It also permits to measure the leaseliability at the present value of the remaining lease payments discounted at the lessee’s additional borrowing rate as of thedate of transition, and the right-of use asset at the same amount as the lease liability. Leases ending within 12 months fromthe date of transition and leases with small underlying assets may be recognized as expenses.
Our group has applied such exemption, and recognized and measured leases.
- Designation of previously recognized financial instruments
IFRS 1 permits classification in IFRS 9 Financial Instruments (“IFRS 9”) to be based on facts and circumstances
as of the date of transition, rather than on facts and circumstances existing at the time of recognition. In addition, it ispermitted to designate equity financial assets as financial assets at fair value through other comprehensive income based on
facts and circumstances existing as of the date of transition.
Our group has chosen the classification in IFRS 9 based on facts and circumstances existing as of the date oftransition, and has designated certain equity financial assets as financial assets at fair value through other comprehensive
income based on facts and circumstances existing as of the date of transition.
- Fair value measurement of financial instruments at initial recognition
Our group has elected to apply prospectively the provisions of IFRS 9 on fair value measurement and recognitionof gains or losses on initial recognition of financial assets and liabilities.

- 18 -

(2）IFRS 1 – Mandatory Exceptions
IFRS 1 prohibits retrospective application regarding “estimates”, “derecognition of financial assets and financial
liabilities”, “hedge accounting”, “noncontrolling interests” and “classification and measurement of financial instruments”.
Our group has applied prospectively these items from the date of transition.
(3）Reconciliations
The reconciliations required to be disclosed under IFRS upon first-time adoption are as follows.
The reconciliations include items which may not impact the retained earnings and comprehensive income under“reclassification”, and items which may impact the retained earnings and comprehensive income under “recognition andmeasurement differences”.
For reconciliations of equity as at the date of transition to IFRS (April 1, 2021) and as at the end of the previous
consolidated fiscal year (March 31, 2022), as well as reconciliations of statement of profit or loss and statement ofcomprehensive income for the previous consolidated fiscal year (from April 1, 2021 to March 31, 2022), please see “2.
Condensed Quarterly Consolidated Financial Statements and Accompanying Notes – (5) Notes to Condensed Quarterly
Consolidated Financial Statements (First-time adoption)” on page 18 of “Consolidated Business Results for the First
Quarter of the Fiscal Year Ending March 31, 2023” disclosed on August 10, 2022.

- 19 -

Reconciliation of Equity as at the end of the previous consolidated second quarter (September 30, 2021)(Millions of Yen)
Presentation
under U.S. GAAP
(Assets)
Current Assets
Cash and cash equivalents
Time deposits
Notes and accounts
receivable
Allowance for doubtfulreceivables
Inventories
Return assets
Other current assets
Total current assets
Property, Plant andEquipment
Land
Buildings and building
improvements
Machinery and equipment
Construction in progress
Accumulated depreciation
Net property, plant andequipment
Other assets
Operating leases
right-of-use assets
Investments
Goodwill
Other intangible assets
Investments in affiliatedcompanies
Prepaid pension expense
Deferred income taxes
Other
Total other assets
Total Assets

U.S.
GAAP

Recognition and
Reclassification
measurement
differences

IFRS

Note

46,797
1,913－(1,913)244－

47,041－

18,425201(759)

17,867

(291)

291

－

－

－
44,176719
3,556
115,295

2,365
－
(719)
(102)
123

(14)
463
－
(239)
(305)

2,351
44,639－3,215
115,113

Presentation under IFRS
AssetsCurrent Assets
Cash and cash equivalents
Trade and otherreceivables

A

Other financial assets
Inventories
Other current assets
Total current assets
Non-current Assets

20,559－－－73,353－－－

19,722
3,711
117,345(65,845)

－
－
－
－

－
－
－
－

－
－
－
－

51,500(4,372)(462)

46,666

12,019857

850,01621,186
14,910－(50,016)
－
403
3,110

－
－
(330)
－

－
21,186
14,983
3,110

C, c
B

21,590－(3,865)

17,725

d

－
9,906
1,764
5,749
137,140－
303,935

54,762－－(4,862)
－
－
5

(11)
(516)
3
137
－
－
(5,341)54,751
9,390
1,767
1,024
－
183,486
298,599- 20 -b12,884 D, E, jkProperty, plant andequipment
Right-of-use assets
Goodwill
Intangible assets
Investment property
Investments accounted forusing equity method
Other financial assets
Retirement benefit assets
Deferred income taxes
Other non-current assets
Total non-current assets
Total Assets

(Millions of Yen)
Presentation
under U.S. GAAP
(Liabilities)
Current Liabilities
Short-term bank loans
Notes and accounts payable
Trade notes payable
Trade accounts payable
Other payables

Recognition and
Reclassification
measurement
differences

U.S.
GAAP

IFRS

Note

Presentation under IFRS
Liabilities and Equity
Liabilities
Current Liabilities
Borrowings
Lease liabilities
Trade and other payables

20,663
－
－
666
8,365
3,822
－

10
4,196
12,853(666)(8,365)(3,822)
1,954

－
125
(317)
－
－
－
－

20,673
4,321
12,536
－
－
－
1,954

6,232

(6,232)

－

－

1,507
2,297

－
(2,297)

(497)
－

1,010
－

4,196

(4,196)

－

－

895

(895)

－

－

5,968
54,611

8,129
669

46
(643)

14,14354,637

1,511
－
－

－
8,043
745

－
(58)
－

1,511
7,985
745

Liabilities for termination
and retirement benefit

1,958

143

－

2,101

Deferred income taxes

13,363－(659)

12,7048,043(8,043)

－

－

745

(745)

－

－

Other long-term liabilities

2,243

(807)

117

1,553

Total long-term liabilities

27,863

(664)

(600)

26,59982,474

5(1,243)

81,236

Other non-current
liabilities
Total non-current
liabilities
Total liabilities

13,26029,047183,081－－－－－(24,712)

13,26029,047
158,369l

EquityCommon stock
Additional paid-in capital
Retained earnings

－

1,802

20,84922,651

f, g

2,791

(2,791)

－

－

(989)

989

－

－

(8,775)－－(8,775)

218,415－(3,863)

214,552

3,046
221,461
303,935

－
－
5

(235)
(4,098)(5,341)

2,811
217,363
298,599

Accrued payroll andbonuses
Income taxes payable
Refund liabilities
Short-term operating leaseliabilities
Contingent consideration(short-term)
Other current liabilities
Total current liabilities

Long-term liabilities
Long-term debt

Long-term operating leaseliabilities
Contingent consideration(long-term)

Total liabilities(Equity)Common stock
Additional paid-in capital
Retained earnings
Accumulated othercomprehensive income(loss)
Foreign currencytranslation adjustments
Pension liability
adjustments
Treasury stock, at cost
Total Wacoal Holdings
Corp. shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity- 21 -D, jhG

Other financial liabilities
Income taxes payable

F, i

D, j
G

Other current liabilities
Total current liabilities

Non-current liabilities
Borrowings
Lease liabilities
Other financial liabilitieskRetirement benefit
liability
Deferred income taxesiOther components ofequityTreasury stock, at cost
Total equity attributable toowners of parent
Noncontrolling interests
Total equity
Total liabilities and equity

Reconciliation of Statement of Profit or Loss and Statement of Comprehensive Income for the previous
consolidated cumulative second quarter (From April 1, 2021 to September 30, 2021)(Millions of Yen)
Presentation
under U.S. GAAPNet sales

U.S.
GAAP
87,419

Recognition and
Reclassification
measurement
differences
7(1,140)

IFRS

Note

86,286

Presentation under IFRSRevenue

Operating expenses
Cost of sales
Selling, general andadministrative expenses(37,805)

(19)

554

(37,270)f, i(45,638)

(634)

1,043

(45,229)

f, i

－

943

－

943

H

Cost of sales
Selling, general andadministrative expenses
Other income

－

(115)

2

(113)

H

Other expenses

3,976

182

459

4,617

Interest income

39

(39)

－

－

Interest expense

(37)

37

－

－

Dividend income
Valuation loss onmarketable securities andinvestments – net
Other – net

639

(639)

－

－

198

94

(292)

－

685

(263)

(422)

－

－

767

(1)

766

H

Finance income

－

(139)

(79)

(218)

H

－

117

162

279

Finance costs
Share of profit ofinvestments accounted forusing equity method

5,500

117

(173)

5,444

(2,617)－585(2,032)

2,883

－

－

－

117

(117)

－

－

3,000

－

412

3,412

Operating income

Operating profit

Other income (expenses)

Income before income taxes
and equity in net income ofaffiliated companies
Income taxes
Income before equity in net
income of affiliatedcompanies
Equity in net income ofaffiliated companies
Net income

Profit before tax
kIncome tax expense

ProfitProfit attributable to:

Net income attributable to
Wacoal Holdings Corp.
Net income attributable tononcontrolling interests

2,983

－

452

3,435

Owners of parent

17

－

(40)

(23)

Noncontrolling interests- 22 -

(Millions of Yen)
Presentation
under U.S. GAAPNet income
Other comprehensive income(net of tax)

Pension liability
adjustments

Foreign currencytranslation adjustments

Total of othercomprehensive income
Comprehensive income

U.S.
GAAP
3,000

Recognition and
Reclassification
measurement
differences
412
－

IFRS

Note

3,412

－

－

202

202

a

19

－

(19)

－

f

－

－

(17)

(17)

1,073

(316)

(292)

465

－

316

(702)

(386)

1,092

－

(828)

264

4,092

－

(416)

3,676

Presentation under IFRSProfitOther comprehensive
incomeItems that will not bereclassified to profit or
loss
Financial assets
measured at fair value
through othercomprehensive income
Remeasurement ofdefined benefit plans
Share of othercomprehensive incomeof investments
accounted for using
equity method
Items that may bereclassified to profit orloss
Exchange differenceson translation of foreign
operations
Share of othercomprehensive incomeof investments
accounted for using
equity method
Total other comprehensive
incomeComprehensive income
Comprehensive income
attributable to:Comprehensive income
attributable to Wacoal
Holdings Corp.
Comprehensive income
attributable to noncontrollinginterests

4,023

－

(279)

3,744

Owners of parent

69

－

(137)

(68)

Noncontrolling interests- 23 -

Notes to the Reconciliations(i) Reclassification
A. Certain financial instruments included in “time deposits” and “other current assets” that were separately presented
under U.S. GAAP have been reclassified and presented as “other financial assets” under IFRS.
B. “Investment property”, which was included in “Property, plant and equipment” under U.S. GAAP, is presented
separately under IFRS.
C. “Painting”, which was included in “Property, plant and equipment” under U.S. GAAP, has been reclassified andpresented in “intangible assets” under IFRS as an asset with an indefinite useful life.
D. Items presented as “operating lease right-of-use assets”, “short-term operating lease liabilities” and “long-term
operating lease liabilities” under U.S. GAAP are presented as “right-of-use assets” and “lease liabilities” under current
liabilities and non-current liabilities, respectively, under IFRS.
E. “Leasehold rights”, which were included in “Other intangible assets” under U.S. GAAP, have been reclassified andpresented as “Right-of-use assets” under IFRS.
F.
“Accrued payroll and bonuses” and “Refund liability”, which were separately presented under U.S. GAAP, havebeen reclassified and presented as “Other current liabilities” under IFRS.
G.“Contingent consideration (short-term)” included in “Notes and accounts payable – Other payables” under Current
Liabilities and “Contingent consideration (long-term)”, which was separated presented under “Long-term liabilities”
under U.S. GAAP have been reclassified and presented as Current Liabilities and as “other financial liabilities” under
Non-current Liabilities”, respectively, under IFRS.
H. Items presented in “Operating costs and expenses”, “Other income (expenses)” under U.S. GAAP are recorded as“Finance income” and “Finance costs” for financial related gains and losses, while other items are presented as “Other
income” and “other expenses” under IFRS.
(ii) Recognition and measurement differences
The following adjustments are prorated to the related noncontrolling interests.
a. Fair value measurement of equity instruments
Valuation gains (losses), gains (losses) on sales, and impairment charges with respect to equity instruments arerecognized in net income or loss under U.S. GAAP, whereas changes in fair value are recognized in othercomprehensive income under IFRS expect for certain issues.
b. Adjustment of recorded amount of property, plant and equipment
Under U.S. GAAP, an impairment charge is recognized only when there is an indication that the total undiscounted
future cash flows expected from the use or eventual disposition of an asset (group) are less than its carrying amount.
On the other hand, under IFRS, if there is an indication of impairment, an impairment charge is recognized when therecoverable amount of an asset (group) is less than its carrying amount.
c. Adjustment of recorded amount of intangible assets
For certain intangible assets, the fair value of the transition date is used as deemed cost.
d. Adjustment of recorded amount of investments accounted for using equity method
Under U.S. GAAP, a loss is recognized when a series of losses or elements of the investee’s investment that indicate
an other-than-temporary decrease in the value of the investment have occurred. On the other hand, under IFRS, an
impairment charge is recognized if there is objective evidence of impairment after the application of the equity
method.

- 24 -

e. Uniformity of reporting periods
Certain consolidated subsidiaries and equity method affiliates that have a different fiscal year-end from that of theCompany have been unified in their reporting periods to match the Company’s fiscal year-end as of the date oftransition.
f. Adjustment related to retirement benefit accounting
Under U.S. GAAP, actuarial gains and losses and prior service cost are recognized in other comprehensive income
when incurred and amortized in subsequent periods. On the other hand, under IFRS, actuarial gains and losses(remeasurement of defined benefit plans) are recognized in other comprehensive income when incurred and
immediately transferred to retained earnings. In addition, past service costs are recognized immediately as part ofretirement benefit expenses.
g. Transfer of exchange differences on translation of foreign operations
Upon first-time adoption, we elected the exemptions provided in IFRS 1 and transferred all cumulative translationdifferences at the date of transition to retained earnings.
h. Adjustment related to recognition of levies
Items corresponding to property tax levies that the Company and certain consolidated subsidiaries are obligated to pay
were recognized over the fiscal year in which they were paid under U.S. GAAP, but are recognized in IFRS on the datethe event giving rise to the obligation occurs. The amount required as of the transition date is recognized as liability in“Trade and other payables” and adjusted to retained earnings as of the date of transition.
i. Adjustment for recognition of other long-term employee benefit obligations
For long-term employee benefit plans adopted by certain consolidated subsidiaries, which were not recognized under
U.S. GAAP, the present value of the projected payments as of the date of transition is included in “Other current
liabilities” and “Other non-current liabilities” as a liability and adjusted to retained earnings on the date of transition.
The net change in such liabilities is recognized as “Selling, general and administrative expenses” and “cost of sales”
under IFRS.
j. Recognition of right-of-use assets and lease liability, adjustment of recorded amount of right-of-use assets
Leases accounted for as “operating leases” under U.S. GAAP were remeasured in accordance with IFRS 16 as of thedate of transition and adjusted to retained earnings on the date of transition.
k. Tax effect adjustments
Changes in deferred tax assets (deferred tax liabilities) occurred due to temporary differences arising (or eliminated)
as a result of IFRS adjustments, etc. In addition, with respect to the tax effects of unrealized intragroup transactions,deferred tax assets are recognized under IFRS at the tax rate of the seller, whereas under U.S. GAAP, the tax expense
was recognized at the source of sale.

- 25 -

l. Adjustment to retained earnings(Millions of Yen)
Previous consolidated
second quarter(September 30, 2021)
a. Fair value measurement of equity instruments(22,516)b. Adjustment of recorded amount of property, plant and equipment(413)

c. Adjustment of recorded amount of intangible assets(138)

d. Adjustment of recorded amount of investments accounted for using equity method
e. Uniformity of reporting periods(3,796)(247)

f. Adjustment related to retirement benefit accounting(1,327)

g. Transfer of exchange differences on translation of foreign operations

2,930

h. Adjustment related to recognition of levies

207

i. Adjustment for recognition of other long-term employee benefit obligations(294)

j. Recognition of right-of-use assets and lease liabilities, adjustment of recorded amount of right-of-use assets

37

Other

(52)
Subtotal(25,609)

k. Tax effect adjustments

662

Adjustment related to noncontrolling interests

235
Total

(24,712)Reconciliation of Consolidated Statement of Cash Flows for the previous consolidated cumulative second
quarter (From April 1, 2021 to September 30, 2021) and the previous consolidated fiscal year (From April 1,
2021 to March 31, 2022)
There are no material differences between the consolidated statement of cash flows disclosed in accordancewith U.S. GAAP and the consolidated statement of cash flows disclosed in accordance with IFRS.

- 26 -