[Translation]
Consolidated Business Results for the Third Quarter of the Fiscal Year Ending March 31, 2023
[IFRS]
February 10, 2023
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:February 14, 2023
Scheduled dividend payment start date:
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.

Third Quarter of the Fiscal Year Ending March 31, 2023 (April 1, 2022 – December 31, 2022)(1)

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

Business
ProfitRevenue
Millions of Yen

Third Quarter
ended December
31, 2022
Third Quarter
ended December
31, 2021%

Profit Before
Income Taxes andEquity in Net
Profit of AffiliatedCompanies

Operating(Loss) Profit

Millions of Yen%

Millions of Yen%

Millions of Yen%(Loss) Profit
Millions of Yen%

143,903 10.7

4,978

(3.1)

(1,810)-252(96.7)(2,368)-

129,989

5,136

-

6,113

-

7,577

-

4,908

-

-

Net (Loss) Profit
Attributable to
Owners of Parent

Total
Comprehensive
IncomeBasic (Loss)
Earnings
per Share

Diluted (Loss)
Earnings per Share

Millions of Yen

Millions of Yen %

Yen

Yen

%

Third Quarter
ended December(2,431)961 (84.5)(40.27)(40.27)31, 2022
Third Quarter
ended December
5,002
6,202
80.13
79.79
31, 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 December 31, 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%

283,266

211,421

208,41473.6

299,177

220,868

217,990

72.9

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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)

Revenue

Business Profit

Operating Loss

Loss Before
Income Taxes
and Equity in
Net Profit ofAffiliatedCompanies

Millions of Yen %Millions of Yen %Millions of Yen %Millions of Yen %Net Loss
Attributable to
Owners of
ParentBasic Loss per
Share

Millions of Yen %YenAnnual
190,000 10.4
2,000 304.9(5,500)(3,000)(4,000)(Note) Revision of forecast of consolidated business results announced during the latest quarter: Yes-2-(66.26)

Notes(1)

Changes in significant subsidiaries in the consolidated cumulative third 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)
Third Quarter ended
December 31, 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 third quarter (third
quarter ended December 31):

Fiscal Year ended
March 31, 2022

64,500,000 shares

65,589,042 shares

5,763,428 shares

4,130,773 shares

60,364,680 shares

62,424,097 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 19 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 Third Quarter – (3) Qualitative Information regarding Forecast of Consolidated Business Results” on page 10 of theattached materials.

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Table of Contents for Attached Materials
1.

Qualitative Information regarding Consolidated Performance during the Third 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 ------------------------------- 10

2.

Condensed Quarterly Consolidated Financial Statements and Accompanying Notes ------------------------ 11(1)

Condensed Quarterly Statement of Financial Position ----------------------------------------------------------- 11(2)

Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly Consolidated
Statement of Comprehensive Income ------------------------------------------------------------------------------ 13(3)

Condensed Quarterly Consolidated Statement of Changes in Equity ------------------------------------------ 15(4)

Condensed Quarterly Consolidated Statement of Cash Flows -------------------------------------------------- 16(5)

Notes to Condensed Quarterly Consolidated Financial Statements -------------------------------------------- 17(Notes on Going Concern) ------------------------------------------------------------------------------------------- 17(Segment Information) ----------------------------------------------------------------------------------------------- 17(First-time Adoption) ------------------------------------------------------------------------------------------------- 18

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1.

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

Qualitative Information regarding Consolidated Business Results(i)Performance Overview of the Nine Months ended December 31, 2022
(Millions of Yen)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Business profit
Other income
Other expenses
Operating (loss) 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 (loss) profit attributable to owners of parent

Previous Consolidated
Cumulative Third
Quarter(From April 1, 2021 to
December 31, 2021)
Amount129,989
56,351
73,63868,502
5,136
1,316
339
6,113
1,271
226
419

Current Consolidated
Cumulative Third
Quarter(From April 1, 2022 to
December 31, 2022)
Amount143,90362,24681,65776,6794,978
5,019
11,807(1,810)
1,285
684
1,461

Increased/(Decreased) fromprevious consolidated
cumulative
third quarter
Amount+13,914+5,895+8,019+8,177(158)+3,703+11,468(7,923)+14+458+1,042

%
+10.7
+10.5
+10.9
+11.9
(3.1)
+281.4+1.1+202.7+248.7

7,577

252(7,325)(96.7)

5,002(2,431)(7,433)-(Our group voluntarily implements the International Financial Reporting Standards (“IFRS”) starting from the
beginning of the current cumulative third quarter, and the results for the previous cumulative third quarter have been
reclassified to conform to IFRS.)Business environment surrounding our group during the current consolidated cumulative third quarter (April
1, 2022 - December 31, 2022) were severely affected by weak sales in major countries and the consequential impactof our clients’ restraint of procurement. Despite relaxation of restrictions related to the coronavirus pandemic(“COVID-19”), recovery in sales from our group’s domestic business has been gradual as a result of the number ofcustomers visiting our retail stores remained low, due to the negative impact on consumer spending arising frominflation concerns in the second half of the year. Our business environment in the United States remained sluggish
due to the slowdown in consumer spending as well as the impact of inventory adjustments by suppliers. Our businessin China also remained challenging due to the implementation of strict COVID-19 restrictions. Our business in
Europe, on the other hand, maintained its strong sales despite the continuing inflation. In addition, our business inother Asian countries showed signs of recovery as relaxation of COVID-19 restrictions took place.
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- tolong-term 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 ourcustomers database and merger between online and offline activities to improve value of our customer experience,and strengthening 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-5-entering into the 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 capital efficiency while conducting active investments for growth.
As a result of the above, for the current consolidated cumulative third quarter, consolidated revenue was
143.90 billion yen (an increase of 10.7% as compared to the corresponding period of the previous fiscal year), and theconsolidated business profit was 4.98 billion yen (a decrease of 3.1% as compared to the corresponding period of theprevious fiscal year). We recorded a consolidated operating loss of 1.81 billion yen (as compared to a consolidated
operating profit of 6.11 billion yen for the corresponding period of the previous fiscal year) as a result of theimpairment charges of 10.11 billion yen recorded on goodwill and intangible assets related to Wacoal International
Corp. (U.S.).
In 2019, Wacoal International Corp. (U.S.), our consolidated subsidiary, acquired Intimates Online, Inc.
(“Intimates Online”), which distributes the “LIVELY” brand, to create growth opportunities and strengthen
competitiveness in the e-commerce market. However, in light of the changes in the external environment factors,
including the tighter data privacy regulations on digital marketing and the recent slowdown in consumer spending,
we reassessed the recoverable amount by Wacoal International Corp. (U.S.), and recorded an impairment charge of
10.11 billion yen.
Consolidated profit before income taxes and equity in net profit of affiliated companies were 0.25 billion yen(a decrease of 96.7% as compared to the corresponding period of the previous fiscal year), and consolidated net loss
attributable to owners of parent was 2.43 billion yen (a consolidated net profit of 5.00 billion yen for thecorresponding period of the previous fiscal year).
The key exchange rates used for the current consolidated cumulative third quarter (the corresponding periodof the previous fiscal year) were: 136.51 yen (111.10 yen) to the U.S. dollar; 163.91 yen (152.76 yen) to the Sterlingpound; and 19.88 yen (17.25 yen) to the Chinese yuan.
(ii)

Business Overview of Our Reportable Segments(Millions of Yen)
Previous Cumulative
Third Quarter(from April 1, 2021 to
December 31, 2021)
AmountTotal Revenue
Wacoal Business (Domestic)
Wacoal Business (Overseas)
Peach John Business
Other

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

129,989
67,34044,4809,141
9,028

Current Cumulative
Third Quarter(from April 1, 2022 to
December 31, 2022)

Distribution
Ratio (%)
100.0
51.8
34.2
7.0
7.0

Amount143,903
74,68349,792
9,049
10,379Distribution
Ratio (%)
100.0
51.9
34.6
6.3
7.2

Increased/(Decreased) fromprevious cumulative
third quarter
Amount%+13,914+7,343+5,312(92)+1,351

+10.7
+10.9
+11.9
(1.0)
+15.0

Previous Cumulative
Third Quarter(from April 1, 2021 to
December 31, 2021)

Current Cumulative
Third Quarter(from April 1, 2022 to
December 31, 2022)

Increased/(Decreased) fromprevious cumulative
third quarter

Amount% to Sales

Amount% to Sales

Amount

%

4.7
5.1
4.1
16.3
-

(1,810)
5,053(8,044)
896
285

6.8
9.9
2.7

(7,923)+1,620(9,850)
(598)
+905

+47.2
(40.0)
-

6,113
3,433
1,806
1,494
(620)

-6-

a.

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 third quarter, sales from our existing member customers both online (oure-commerce website) and offline remained strong as a result of our successful efforts to strengthen the retention
marketing as a part of our CX strategy. Sales from non-member customers including new customers, however, did
not result in success, as we could not come up with effective marketing measures which would lead consumers tovisit our stores or to purchase our products. Sales from third-party e-commerce websites have achieved a highgrowth as a result of our efforts to improve purchase rates by strengthening initiatives with major e-commerce
vendors.
As a result of the above, revenue attributable to our “Wacoal Business (Domestic)” segment was 74.68
billion yen (an increase of 10.9% as compared to such revenue for the corresponding period of the previous fiscal
year). While the gross profit rate fell due to an increase in procurement costs associated with the rapid depreciationof the Japanese yen, operating profit was 5.05 billion yen (an increase of 47.2% as compared to such operating profit
for the corresponding period of the previous fiscal year), attributable to a gain from sale of fixed assets (3.02 billion
yen) related to our former business office in Osaka, in addition to increased revenue.
Starting in the current fiscal year, we have changed the presentation of net sales from Wacoal Corp. related totransactions with department stores to be based on storefront prices, but we have not made retroactive revisions. Thischange in presentation has no impact on operating profit because this change resulted in increases in both revenue
and selling, general and administrative expenses of the same amount (4.16 billion yen) respectively.
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 strong sales from our specialty
stores, which account for approximately half of the sales of Wacoal Europe, in addition to strong sales fromdepartment stores in the United Kingdom. Sales from swimwear products continued to be strong, and our products
under “Elomi” brand achieved a high growth against the backdrop of the growing body-positive trend. Sales from
Wacoal International Corp. (U.S.) were sluggish due to the 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 inthe wake of the growing inflation. Sales from Wacoal America, Inc., on a local currency basis, decreased due to sales
from physical stores, our e-commerce website and third-party e-commerce websites all falling below the level of thecorresponding period of the previous fiscal year and the corresponding negative impact on our major clients’procurement. In light of the recent deterioration in the marketing environment, Intimates Online, which distributes
the “LIVELY” brand, reformed its management structure in August and made efforts to improve profitability.
However, as a result of significant reduction in advertising expenses, the number of customers visiting its stores
struggled to increase. Sales from Wacoal China Co., Ltd. (“Wacoal China”) significantly decreased due to temporary
closings of commercial facilities and a decrease in the number of customers visiting stores resulting from the impactof the strict restrictions on activities under the zero-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 major
currencies, sales revenues attributable to our “Wacoal Business (Overseas)” segment on a Japanese yen basis were
49.79 billion yen (an increase of 11.9% as compared to such sales revenues for the corresponding period of theprevious fiscal year). We recorded an operating loss of 8.04 billion yen (an operating profit of 1.81 billion yen for thecorresponding period of the previous fiscal year) due to an impairment charge of 10.11 billion yen recorded at
Wacoal International Corp. (U.S.), in addition to operating loss recorded at Wacoal China resulting from the negative
impact of the spread of COVID-19.
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.

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During the current cumulative third quarter, sales from our directly-managed stores exceeded the level of thecorresponding period of the previous fiscal year due to the absence of negative impact of COVID-19 seen during theprevious fiscal year, as well as the strong sales of our core products under “NICE BODY” series. On the other hand,
our e-commerce sales fell below the level of the corresponding period of the previous fiscal year as our continuing
efforts to focus on contents marketing measures did not lead to increased sales.
As a result of the above, revenue attributable to our “Peach John Business” segment were 9.05 billion yen (adecrease of 1.0% as compared to such revenue for the corresponding period of the previous fiscal year). Despite ourefforts to reduce advertising expenses, operating profit decreased to 0.90 billion yen (a decrease of 40.0% ascompared to such operating profit for the corresponding period of the previous fiscal year) due to the depreciation of
the Japanese yen leading to increases in raw material costs, in addition to the impact of decreased revenue.
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.
During the current cumulative third quarter, sales from Lecien Corporation increased as a result of a recovery
in sales from its own brand products and sales from delivery to new partner companies, despite the weak sales of its
private brand products sold by major apparel supply chain companies. In addition, revenue from Nanasai Co., Ltd.
and Ai Co., Ltd. increased on the back 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
10.38 billion yen (an increase of 15.0% as compared to such revenue for the corresponding period of the previous
fiscal year) and 0.29 billion yen (as compared to an operating loss of 0.62 billion yen for the corresponding period of
the previous fiscal year), respectively. We were able to record profit due to the increased revenue and an
improvement in profit structure resulting from a progress in reassessment of operations by each business entity as
well as the compensation received from vacating a factory site of a subsidiary of Lecien Corporation.
(Reference) Revenue and Operating Profit/ (Loss) of Major Subsidiaries(Millions of Yen)

Revenue

Previous Cumulative
Third Quarter(from April 1, 2021 to
December 31, 2021)
AmountWacoal Corp.
Wacoal International Corp. (U.S)
Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Peach John Co., Ltd.
Lecien Corporation
Nanasai Co., Ltd.

61,766
19,331
11,937
8,894
9,141
2,460
4,157

Current Cumulative
Third Quarter(from April 1, 2022 to
December 31, 2022)

Distribution
Ratio (%)
47.5
14.9
9.2
6.8
7.0
1.9
3.2

*Revenue from external customers only

-8-

Amount
70,397
21,491
14,013
7,333
9,049
2,494
4,703

Distribution
Ratio (%)
48.9
14.9
9.7
5.1
6.3
1.7
3.3

Increased/(Decreased) fromprevious cumulative
third quarter
Amount%+8,631+2,160+2,076(1,561)
(92)
+34
+546

+14.0
+11.2
+17.4
(17.6)
(1.0)
+1.4
+13.1

(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.

(2)Previous Cumulative
Third Quarter(from April 1, 2021 to
December 31, 2021)

Current Cumulative
Third Quarter(from April 1, 2022 to
December 31, 2022)

Increased/(Decreased) fromprevious cumulative
third quarter

Amount% to Sales

Amount% to Sales

Amount

%

4.1
2.7
11.3
16.3
-

5,160
(9,587)
955
(668)
896
90
32

7.3
6.8
9.9
3.6
0.7

+2,632(10,105)
(396)
(635)
(598)
+506
+98

+104.1(29.3)(40.0)
-

2,528
518
1,351
(33)
1,494
(416)
(66)

Qualitative Information regarding Consolidated Financial Condition(i)

Assets, Liabilities and Total Shareholders’ Equity

Our total assets as of the end of the current consolidated third quarter were 283,266 million yen, a decrease of
15,911 million yen from the end of the previous fiscal year, mainly due to impairment charges on goodwill andintangible assets, in addition to a decrease in cash and cash equivalents due to payments for purchase of treasury
stock and repayment of borrowings.
Our total liabilities were 71,845 million yen, a decrease of 6,464 million yen from the end of the previous
fiscal year, mainly due to decreases in borrowings and lease liabilities.
Equity attributable to owners of parent was 208,414 million yen, a decrease of 9,576 million yen from theend of the previous fiscal year, mainly due to a decrease in retained earnings and an increase in treasury stock.
As a result of the above, ratio of equity attributable to owners of parent as of the end of the current
consolidated third quarter was 73.6%, an increase of 0.7% from the end of the previous fiscal year.
(ii)

Cash Flows

Cash and cash equivalents as of the end of the current consolidated third quarter were 30,669 million yen, adecrease of 6,816 million yen from the end of the previous fiscal year.
(Cash Flow Provided by Operating Activities)
Cash flow provided by operating activities was 6,235 million yen, an decrease of 8,643 million yen ascompared to the corresponding period of the previous fiscal year, after adjustments for changes in assets andliabilities to our loss of 2,368 million yen plus adjustments for impairment charges.
(Cash Flow Provided by Investing Activities)
Cash flow provided by investing activities was 5,174 million yen, as compared to 4,484 million yen of cash
outflow for the corresponding period of the previous fiscal year, due to sales of investment securities and property,
plant and equipment.
(Cash Flow Used in Financing Activities)
Cash flow used in financing activities was 18,434 million yen, a decrease of 14,178 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.

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(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 November 11, 2022. For details, please see “Announcement of Revisions to the Forecast ofConsolidated Business Results and Recognition of Impairment Charges (IFRS)” which we announced today.

- 10 -

2.

Condensed Quarterly Consolidated Financial Statements and Accompanying Notes(1)

Condensed Quarterly Statement of Financial Position

Accounts

Date of Transition(April 1, 2021)

Previous
Consolidated
Fiscal Year as ofMarch 31, 2022

(Millions of Yen)
Current Consolidated
Third Quarter
as ofDecember 31, 2022

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

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

30,66920,143
1,780
51,866
3,562
108,020

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

46,87911,45015,874
13,3502,959
19,691
48,396
13,292
2,343
1,012

183,864
319,215

190,342
299,177

175,246
283,266

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- 11 -

(Millions of Yen)
Accounts

Date of Transition(April 1, 2021)

Previous
Consolidated
Fiscal Year as ofMarch 31, 2022

Current Consolidated
Third Quarter
as ofDecember 31, 2022

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

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

6,084
4,172
14,811
1,417
2,209
14,504
43,197

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

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

3,067
7,348
－
3,369
13,608
1,256

27,483
104,281

29,04378,30928,64871,845

13,26029,120156,143
22,381(8,876)

13,26029,077
158,940
27,571(10,858)

13,26029,030151,241
29,024(14,141)

212,028
2,906

217,990
2,878

208,414
3,007

214,934

220,868

211,421319,215

299,177

283,266

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- 12 -

(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 Third Quarter(From April 1, 2021
to December 31, 2021)

Current Consolidated
Cumulative Third Quarter(From April 1, 2022
to December 31, 2022)%

Revenue
Cost of sales
Selling, general and administrative expenses
Other income
Other expenses
Operating (loss) profit
Finance income
Finance costs
Share of profit of investments accounted for using
equity method
Profit before tax
Income tax expense(Loss) profit(Loss) profit attributable to:
Owners of parent
Noncontrolling interests(Loss) profit(Loss) earnings per share:
Basic (loss) earnings per share (yen)Diluted (loss) earnings per share (yen)%129,989(56,351)(68,502)
1,316
(339)
6,113
1,271
(226)

100.0
(43.3)(52.7)
1.0(0.3)

143,903(62,246)(76,679)
5,019(11,807)100.0(43.3)(53.3)
3.5
(8.2)

4.7
1.0
(0.2)

(1,810)
1,285
(684)

(1.3)
0.9
(0.4)

419

0.3

1,461

1.0

7,577
(2,669)

5.8
(2.0)

4,908

3.8

252
(2,620)(2,368)

0.2
(1.8)
(1.6)

5,002
(94)

3.8
(0.0)

4,908

3.8

(2,431)63(2,368)

(1.7)
0.1
(1.6)

80.13
79.79

- 13 -(40.27)(40.27)

(Condensed Quarterly Consolidated Statement of Comprehensive Income)Previous Consolidated
Cumulative Third Quarter(From April 1, 2021
to December 31, 2021)

Accounts(Loss) profit(Millions of Yen)
Current Consolidated
Cumulative Third Quarter(From April 1, 2022
to December 31, 2022)

4,908(2,368)(1,067)

615

－

(45)

54

176

(1,013)

746

2,368

2,302

(61)

281

2,307
1,294

2,583
3,329

Comprehensive income

6,202

961

Comprehensive income attributable to:
Owners of parent
Noncontrolling interests

6,291
(89)

860
101

6,202

961

Other 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 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- 14 -

(3)Condensed Quarterly Consolidated Statement of Changes in Equity
Previous Consolidated Cumulative Third Quarter (From April 1, 2021 to December 31, 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)

Profit (loss)

Total comprehensive income

5,002

－

1,289

Repurchase of treasury stock

Total equity

2,906

214,934

5,002

(94)

4,908

1,289

5

1,294

－

6,291

(89)

6,202

(589)

(589)

(589)

1,289
－

Total

212,028

5,002

Other comprehensive income

Noncontrollinginterests

Disposal of treasury stock

(0)

0

0

0

Share-based payment transactions

(56)

101

45

45

Dividends(2,498)(2,498)(82)(2,580)

－

112

112

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

132

(132)

－

－

Total transactions with owners

－

(56)

(2,366)

(132)

(488)

(3,042)30(3,012)

Balance at December 31, 2021

13,26029,064

158,779

23,538(9,364)215,277

2,847

218,124

Current Consolidated Cumulative Third Quarter (From April 1, 2022 to December 31, 2022)(Millions of Yen)
Equity attributable to owners of parent
Item
Share capital

Balance at April 1, 2022

13,260Capitalsurplus29,077

Profit (loss)

Treasury
stock

Total

158,940

27,571(10,858)

217,990

2,878

220,868(2,431)63(2,368)

3,291

38

3,329

－

860

101

961

(6,248)(6,248)(6,248)

2,863

－

－

102

55

55

(2,431)
3,291－－(2,431)

3,291

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

Share-based payment transactions(47)

Dividends

Total equity

Other
componentsof equity

Other comprehensive income
Total comprehensive income

Noncontrollinginterests

Retainedearnings(4,243)Equity transactions with noncontrollinginterests
Transfer from other components of equity toretained earnings

1,838(1,838)(4,243)(95)(4,338)

－

123

123

－

－

Total transactions with owners

－

(47)

(5,268)(1,838)(3,283)(10,436)

28(10,408)

Balance at December 31, 2022

13,26029,030151,241

29,024(14,141)

208,414

3,007

211,421- 15 -

(4)Condensed Quarterly Consolidated Statement of Cash Flows

Accounts

Previous Consolidated
Cumulative Third Quarter(From April 1, 2021
to December 31, 2021)

Operating activities(Loss) profit
Depreciation and amortization
Impairment charges
Finance income
Finance costs
Share of (profit) of investments accounted for using
equity method
Income tax expense
Gain on sale and disposal of property, plant andequipment-net
Decrease (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 provided by (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- 16 -(Millions of Yen)
Current Consolidated
Cumulative Third Quarter(From April 1, 2022
to December 31, 2022)

4,908
7,682
24
(1,271)226(2,368)
8,059
10,109(1,285)684(419)(1,461)

2,669

2,620

(98)

(2,758)

(128)
(172)
(560)
(1,906)980(5,255)(589)(2,130)

91

(123)

226
(373)
10,899
50
1,364
(174)
2,739
14,8781,055(1,418)
6,120
81
1,675
(191)
(1,450)6,235

369(1,364)(4,658)548(2,192)
(3)

293
(95)
(2,146)
4,525(1,841)
(37)

2,442

4,344

374

131

(4,484)

5,174(25,000)(4,110)－(35)(3,237)112(589)(2,498)(82)(1,283)(32,612)1,365－(4,506)123(6,248)(4,243)(95)(720)(18,434)590

209(21,628)
63,98742,359(6,816)37,48530,669(5)Notes to Condensed Quarterly Consolidated Financial Statements(Notes on Going Concern)
Not applicable.
(Segment Information)(i)

Reportable Segment Information

Previous Consolidated Cumulative Third Quarter (From April 1, 2021 to December 31, 2021)(Millions of Yen)
Reportable Segment
Other(Note) 1

Adjustments

Consolidated

120,961

9,028－

129,989

279

6,936

2,726

(9,662)－50,5159,420

127,897

11,754(9,662)

129,989

1,806

1,494

6,733

(620)

－

6,113

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

67,34044,480

9,141

622

6,035

Total

67,962

Segment profit (loss)(Note) 2

3,433

Total

Revenue
External customers
Intersegment

Current Consolidated Cumulative Third Quarter (From April 1, 2022 to December 31, 2022)(Millions of Yen)
Reportable Segment
Other(Note) 1

Adjustments

Consolidated

133,524

10,379－143,903205

11,416

3,206(14,622)－9,254

144,940

13,585(14,622)

143,903

WacoalBusiness(Domestic)

WacoalBusiness(Overseas)

Peach John
Business

74,68349,792

9,049

839

10,37275,52260,164

Total

Revenue
External customers
Intersegment
Total

Segment profit (loss)
5,053(8,044)896(2,095)285－(1,810)(Note) 2(Note) 1. The “Other” category includes Lecien business, Nanasai business, and other business segments which are not included in theoperating segment.
2. The sum of the segment profit (loss) agrees to the operating profit (loss) on the condensed quarterly consolidated statement of
profit or loss. 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.
3. The Company accounts for intersegment sales and transfers at cost plus an interest.

- 17 -

(ii)Segment Information by Region
Revenue – external customers(Millions of Yen)
Previous Consolidated Cumulative Third Quarter(From April 1, 2021 to December 31, 2021)

Current Consolidated Cumulative Third Quarter(From April 1, 2022 to December 31, 2022)

Japan

84,58993,188Asia and Oceania

15,135

16,490Americas and Europe

30,26534,225

Total

129,989

143,903(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 third quarter andcurrent consolidated cumulative third quarter were 22,825 million yen and 25,133 million yen, respectively.

- 18 -

(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.

- 19 -

(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.

- 20 -

Reconciliation of Equity as at the end of the previous consolidated third quarter (December 31, 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

42,5692,425－(2,425)(210)－

42,359－18,590224

388

19,202

(302)

302

－

－

－
44,573716
3,716
112,287

2,925
－
(716)
(194)
116

42
(273)
－
422
369

2,967
44,300－3,944
112,772

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

20,360－－－73,653－－－

20,151
3,732
117,896(66,251)

－
－
－
－

－
－
－
－

－
－
－
－

51,645(3,982)(319)

47,344

11,207852

330

12,389 D, E, j

47,845
21,81315,081－(47,845)
－
403
2,727

－
－
(349)
－

－
21,813
15,135
2,727

C, c
B

21,782－(3,296)18,486d－
10,081
1,799
5,419
135,027－
298,959

52,250－－(4,521)
－
－
－

－
(724)
(128)
155
－
－
(3,962)

52,250
9,357
1,671
1,053
－
182,225
294,997- 21 -

bk

Property, 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

15,685
－
－
769
8,083
4,701
－

－
3,990
13,504(769)(8,083)(4,701)
2,020

－
397
(67)
－
－
－
－

15,685
4,387
13,437
－
－
－
2,020

4,926

(4,926)

－

－

1,150
2,498

－
(2,498)

(182)
－

968
－

3,990

(3,990)

－

－

920

(920)

－

－

7,642
50,364

7,033
660

(149)
(1)

14,52651,023

1,545
－
－

－
7,530
765

－
(63)
－

1,545
7,467
765

Liabilities for termination
and retirement benefit

1,956

143

9

2,108

Deferred income taxes

12,819－(435)

12,384

7,530(7,530)

－

－

765

(765)

－

－

Other long-term liabilities

2,178

(803)

206

1,581

Total long-term liabilities

26,793

(660)

(283)

25,85077,157－(284)

76,873

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

13,26029,064
182,341－－－－－(23,562)

13,26029,064
158,779l

EquityCommon stock
Additional paid-in capital
Retained earnings

－

3,440

20,09823,538

f, g

4,416

(4,416)

－

－

(976)

976

－

－

(9,364)－－(9,364)

218,741－(3,464)215,277

3,061
221,802
298,959

－
－
－

(214)
(3,678)(3,962)

2,847
218,124
294,997

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- 22 -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 third quarter (From April 1, 2021 to December 31, 2021)(Millions of Yen)
Presentation
under U.S. GAAPNet sales

U.S.
GAAP
130,187

Recognition and
Reclassification
measurement
differences
10
(208)

IFRS

Note

129,989

Presentation under IFRSRevenue

Operating expenses
Cost of sales
Selling, general andadministrative expenses(56,585)

(29)

263

(56,351)f, i(68,545)

(830)

873

(68,502)

f, i

－

1,315

1

1,316

H

Cost of sales
Selling, general andadministrative expenses
Other income

－

(306)

(33)

(339)

H

Other expenses

5,057

160

896

6,113

Interest income

45

(45)

－

－

Interest expense

(48)

48

－

－

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

1,034(1,034)－－(1,575)

45

1,530

－

1,024

(330)

(694)

－

－

1,246

25

1,271

H

Finance income

－

(90)

(136)

(226)

H

－

487

(68)

419

Finance costs
Share of profit ofinvestments accounted forusing equity method

5,537

487

1,553

7,577

(2,517)－(152)(2,669)

3,020

－

－

－

487

(487)

－

－

3,507

－

1,401

4,908

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

3,493

－

1,509

5,002

Owners of parent

14

－

(108)

(94)

Noncontrolling interests- 23 -

(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
3,507

Recognition and
Reclassification
measurement
differences
－
1,401

IFRS

Note

4,908

－

－

(1,067)(1,067)

a

32

－

(32)

－

f

－

－

54

54

2,659

117

(408)

2,368

－

(117)

56

(61)

2,691

－

(1,397)

1,294

6,198

－

4

6,202

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

6,171

－

120

6,291

Owners of parent

27

－

(116)

(89)

Noncontrolling interests- 24 -

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.

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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.

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l. Adjustment to retained earnings(Millions of Yen)
Previous consolidated
third quarter(December 31, 2021)
a. Fair value measurement of equity instruments(21,226)b. Adjustment of recorded amount of property, plant and equipment(408)

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(4,010)378

f. Adjustment related to retirement benefit accounting(1,881)

g. Transfer of exchange differences on translation of foreign operations

2,930

h. Adjustment related to recognition of levies

636

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

(31)

Other

(39)
Subtotal(24,083)

k. Tax effect adjustments

307

Adjustment related to noncontrolling interests

214
Total

(23,562)

Reconciliation of Consolidated Statement of Cash Flows for the previous consolidated cumulative third quarter(From April 1, 2021 to December 31, 2021) and the previous consolidated fiscal year (From April 1, 2021 toMarch 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.

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