Revised Medium-Term Management Plan Overview and StrategyPolicies of the Revised Medium-Term Management PlanRevised Medium-Term Management Plan StrategyIn order to improve the probability of achieving VISION 2030,we will shift to a structure that can steadily generate cashRecognizingthe CurrentSituationEnvironmentalAwarenessThe speed of changes in the external environment was quicker than expected, and weaknesses in oursupply chain management have become apparent● With diversifying customer needs, we recognize that conventional advertising, product planning, and productionsystems are not enough to respond to market changes, causing deterioration in profitability and excessive inventory(especially with the existing product planning and development lead time [LT], which takes more than one year tomarket, and improvements are urgently needed).
● As for the harmful effects of functional organizations, various coordinated tasks and complicated profit and lossmanagement hinder prompt decision-making.
● The responsibility for the management strategy is not clear, and the unity of the effectiveness of the strategy is notimproving. In addition, the holding company’s supervisory function over its subsidiaries is insufficient, andimprovements are needed.

Opportunities● Diversifying need to “be yourself”● Increasing need for health and comfort● Social inculcation of sustainability awareness● Developing markets with significant growthpotentialRevisedMedium-TermManagementPlan







BusinessModelReformsGrowthStrategyIntroducingROICManagementPromotingAssetReductionSupply chain management reformBusiness ModelReformsWith the use of digital technology to build SCM linked to demand from the customer’spoint of view, thoroughly selecting and focusing to optimize the cost structureCost structure reformRisks● Increasing procurement costs due to changes in the externalenvironment● Declining domestic demand due to population decline● Lack of competitiveness due to slow innovation● Declining corporate attractiveness and a serious shortage of staffWe plan to improve the sales profit ratio by 3 pts to 4 pts and SG&A expenses by 4 pts to5 pts by FY2026 (compared to FY2023)Personalized body andmind databaseResearch/knowledge ofvarious body types/lifestagesManufacturing technologyfor products that suiteach customerOrganizational ability tomeet individual needs andembody servicesStrive to improve and enhance profitability and capital efficiency and transform ourselves into a company that cancontinue to invest in the growth necessary to sustainably increase corporate value and return profits to our stakeholders.
1. Business model reforms to improve profitabilityImplementing business model reforms (supply chain management reforms and cost structure reforms) to restorebasic profitability2. Growth strategy to achieve VISION 2030Carrying out brand strategy and customer strategy, utilizing the power of digital resources and our Company’sstrengths to lead to further growth3. Introducing ROIC managementIntroducing ROIC management as business management infrastructure that supports measures to enhanceprofitability and the effectiveness of strategies4. Promoting asset reductionImproving capital efficiency by reducing inventories, cross-shareholdings, and streamlining real estate holdingsRevisedmedium-termmanagementplanP. 20▶

Wacoal Corp.

Strengthen responsiveness tochanges in customer needsTo meet diversifying customer needs, we will contribute to the “beauty, comfort, andhealth of each customer”Overseas businessStrengthen responsiveness tochanges in customer needsAmid an uncertain business environment, we will first work to improve our managementinfrastructure and execute growth strategies for the next medium-term management plan

Introducing ROICManagementP. 36▶

P. 41▶

Introducing ROIC management to improve capital efficiency and achieve arobust corporate structureIn addition to portfolio management, it is also used as a means of performancemanagement to accurately measure results, and quantitatively link improvement activitieson the ground with improvements in profitability and capital efficiency expected byinvestors and other stakeholdersP. 50▶

Growth investmentsand stakeholder returns1. Improving profitability through business model reforms and growth strategies as a top priority, we will reduce inventoriesand cross-shareholdings, and streamline real estate holdings to improve capital efficiency and increase ROE2. While prioritizing investments for future growth, we will actively return profits to shareholders to improve capital efficiency23 ■ WACOAL HOLDINGSImprove earning powerExamine the future ideal state of each business and determine an action plan for thecontinuation, sale, or withdrawal of each businessImproving profitabilityand capital efficiencyFinancial StrategyP. 35▶

Improve earning powerIn order to restore Wacoal (Japan)’s basic profitability, a radical cost structure reform willbe implemented. Setting reduction target to ¥7 billionGrowth StrategyBasic PolicyImprove earning powerImplementing SCM reforms at Wacoal (Japan) to respond quickly to changes in customerneeds and the market environmentDealing with unprofitable businessesWacoal Group’sStrengthsStrengthen responsiveness tochanges in customer needs

Promoting AssetReductionIn order to improve asset and capital efficiency, the Company’s basic policy is tosell any assets that do not contribute to raising corporate valueWhen selling, we will search for investment opportunities that will contribute to businessgrowth, and determine the businesses that should be invested in from the perspective of ROIC(Inventories, cross-shareholdings, and real estate holdings are subject to review andimplementation)P. 48▶

INTEGRATED REPORT 2023■ 24Revised Medium-Term Management Plan Overview and StrategyQuantitative Targets in the Revised Medium-TermManagement PlanFinancial StrategyIn light of the external environment, initial sales targets have been revised downward. On the other hand, through businessmodel reforms and growth strategies, we will strengthen our ability to respond to customer changes and profitability whilestriving to improve capital efficiency. In addition, we aim to achieve a ROE of 7% and a PBR of 1 time or more.

Strengthen responsiveness tochanges in customer needsImprove profitabilityAchieve a ROE of 7% and a PBR of 1 time or moreFY2026¥203 billionOperating profit¥13 billion¥16.5 billionOperating margin6.4%7.5%ROE7%

6%ROIC6%-7%Earnings per Share(EPS)¥200 or moreImprove capital efficiencyFinancialPolicies1. With improving profitability through business model reforms and growth strategies as a top priority,we will reduce inventories and cross-shareholdings, and streamline real estate holdings to improvecapital efficiency and ROE2. While prioritizing investments for future growth, we will actively return profits to shareholders toimprove capital efficiencyDividendPolicyOur basic policy on profit distribution to shareholders is to make stable distributions based onconsideration of our consolidated performance, while seeking to increase our enterprise valuethrough active investment aimed at higher profitability and to increase net income per share.

FY2025Sales revenue+1 year+1%¥220 billion—P. 45▶

Cash Dividends per Share (yen)100¥200 or moreYear-end

80Interim50

60Our Goals for VISION 2030To evolve and grow as “Wacoal Groupof the World” by providing both physicaland emotional beauty and richness toindividuals through high sensitivity and4030

20VISION 2030 (FY2031)2020205040

40• Achieve global growth• Achieve a high profitability structure and ROE higher than 10%• Deepen the provided value and expanding business fields• An attractive corporate culture in which workerscan fully realize their abilities• Solve material issuespremium quality.

40502020212020222024 (forecast)2023Cash Flow Allocation(¥ billion)FY2026Final year of RevisedMedium Term Management PlanComplete cost structure reformSales revenue:¥270 billionOperating profit:¥27 billionOperating margin:More than 10%FY2023Medium-Term Management PlanEnded the first yearsubstantially underachievingSales revenue:¥203 billionOperating profit:¥13 billionNet income *excluding impairment loss10Depreciation costs *excluding lease liabilities

20Asset reduction and debt utilization (Of this, ¥30 billion is for reducing cross-shareholdings)

80Cash inflowROE: More than 10%ROIC: More than 10%Cash generated during the 3-year periodInvestment in new andexisting businessesOperating margin:More than 6.4%ROE: 7%ROIC: 6-7%FY2024Announce RevisedMedium Term Management PlanComprehensively review strategiesto improve the probability ofachieving VISION 203025 ■ WACOAL HOLDINGSCash outflowReturning dividendsShare repurchase110 billionTotal: ¥▶ Focusing on IT and digital investments for growth▶ Investment in human capital▶ Continuing to pay stable dividends while taking into account our consolidatedfinancial results and the status of asset sales▶ Actively promoting improvements in capital efficiency4015
55INTEGRATED REPORT 2023■ 26