Financial Results Briefing Report for 1Q, FY2023
CREEMA LTD. (TSE Growth Market: 4017)
July 15, 2022

Copyright © 2022 CREEMA LTD.

PAGE

1

Review of the previous fiscal year results and policy of the current fiscal year

In the fiscal year ended February 2022, the GMV of the handmade marketplace "Creema" hit the record high of 16 billion yen andestablished a strong position as one of the market’s largest platforms in Japan and Asia.
• Due to the spread of COVID-19, mask-related products and stay-at-home consumption increased exceptionally in the previous fiscal year.
• Excluding mask-related products, GMV grew strongly by 118% YoY in the fiscal year ended February 2022 (104% YoY including mask-related
products).
• As a result, this year's GMV hit the record high of 16 billion yen.
Strong financial results for the fiscal year ended February 2022. Both sales and profits hit record highs.
• Sales hit a record high of 2,294 million yen, 111% YoY.
• Operating profit hit a record high of 322 million yen, 143% YoY.
• Ordinary profit hit a record high of 363 million yen, 177% YoY.
• Net income hit a record high of 230 million yen, 129% YoY.
The fiscal year ending February 2023 is positioned as a phase of upfront investment from the perspective of medium-to-long-term growth.
We aim to further expand the "Creema economic zone" by large-scale investment in three areas; "strengthening promotions forincreasing awareness of markets and services”, "expanding and strengthening new services," and "large-scale investment in systems
and infrastructure."

In 1Q of this year, the company is gradually increasing its investment in promotions and new services
but has yet to implement them on a large scale.
While offline consumption recovered rapidly from March 2022 as COVID-19 infections partially subsided,
E-commerce-related sectors including "Creema" are facing a backlash.

Copyright © 2022 CREEMA LTD.

PAGE

2

[Company-wide] 1Q Results
Sales reached 593 million yen, 98% YoY. On the other hand, due to up-front investments for medium-to-long-term
growth, costs were up slightly compared to the previous year based on the current term plan and operating profit was
19 million yen, 13% of the same period last year.
1Q Results
Unit: million yen

Results

YoY

Sales

593

98%

Sales Cost

123

1602%

Gross profit

470

79%

SG&A

450

100%

Operatingprofit19

13%

Ordinary profit

18

13%

Net income

33

26%

Copyright © 2022 CREEMA LTD.

(Ref.) Annual earnings forecast progress rate
Sales down slightly due to resultsof marketplace and external
advertising services describedlater.

Unit : million yen

Increased YoY as part of SG&A
was entered into sales cost fromthis FY due to the new revenue
recognition standard.
Due to the new revenue
recognition standard, part of SG&A
was entered into sales cost, so
there was no change YoY.
However, as growth investment
gradually increased, total cost has
increased YoY.

Sales

Progress Annual Budget : 2,872
rate
1Q Results : 593
21%

OperatingprofitProgress Annual budget : - 447
rate
1Q Results : 19-%Net
incomeProgress Annual budget : - 376
rate
1Q Results : 33-%

As a result, profits in operating
profit and below are lower YoY, asplanned.

In FY23, the initial plancalls for a loss due tolarge-scale TVcommercials and new
business developmentfrom 2Q.

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3

[Company-wide] Trends in consolidated sales
With the COVID-19 pandemic under a degree of control, sales growth in the marketplace service was limited to a slightincrease, due to the significant decrease in stay-at-home consumption from March, compared to the previous year.
Also, there was no delivery of a large external advertising project in 1Q (as planned), unlike in FY22, so 1Q sales were
98% YoY. Moreover, the three-year CAGR from before the pandemic was 118%.
Unit: million yen

CAGR:118%

YoY:98%
606

365

386

1Q
FY20

2Q

523

514

485

1Q
FY21

2Q

3Q

448

539

503

628

593

4Q

1Q
FY23

557

317

3Q

4Q

4Q

1Q
FY22

Delivery of a large projectin external advertising in
FY22.

Copyright © 2022 CREEMA LTD.

2Q

3Q

(1) Marketplace service sales growth was only slightly
higher YoY due to a significant decline in stay-at-homeconsumption.
(2) No delivery of large-scale projects in external
advertising, unlike in FY22 (however, full-year results
are as planned).
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4

[Company-wide] Changes in consolidated SG&A expenses
SG&A costs are the same as last year as settlement commissions included in "Other" were transferred to sales costs
due to the application of the new revenue recognition standard from this fiscal year. Under the same standard as theprevious fiscal year, the total real costs have increased. However, this investment is within the plan of "up-front
investment intended for medium-to-long-term growth" mentioned previously.
Unit: million yen

YoY:100%:Other:Promotion expenses

263:Personnel expenses

201
173

175

161

201

248

110

108

186

249
117

124

131

79

96

81

96

93

103

101

103

110

122

104

130

118

128

133

3Q

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

2Q

3Q

4Q

1Q
FY23

90

84

67

73

84

1Q
FY20

2Q

Copyright © 2022 CREEMA LTD.

168

202

228

255

222

Application of the newrevenue recognition
standard caused somecosts to be included in sales
costs.

Growth-related costs haveincreased YoY in line with
the initial plan.

PAGE

5

[Ref.] Total cost and SG&A transition
Looking at the total of cost and SG&A, the investment in promotion and development costs (personnel andoutsourcing costs) was carried out as planned. As a result, costs increased by 126% YoY.
Pre-application of new revenue recognition standard

Post-application

Unit: million yen

YoY:126%:Sales cost1

:Other:Promotion expenses

263:Personnel expenses

37
173

37

34
2
175

161

168

0
201

0
202

32

7

1

228

222

248

110

108

1
201

34

255

186

249

117

124

67

79

96

81

96

90

84

73

84

93

103

101

103

110

122

104

130

118

128

1Q
FY20

2Q

3Q

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

2Q

3Q

4Q

Copyright © 2022 CREEMA LTD.

123

By applying the newrevenue recognition
standard from FY23,
part of SG&A has
been included in cost.
→ See Appendix

131

133
1Q
FY23

PAGE

6

[Company-wide] Changes in consolidated operating profit
In sales, although at the same level as the previous year, up-front investment for medium-to-long-term growth asplanned at the beginning of the period was carried out. As a result, operating profit in 1Q was 19 million yen, 13% YoY.

YoY:13%

Unit: million yen

148
122

125
85

75
58
39

49
19

6
1Q
FY20

2Q

3Q

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

2Q

3Q

4Q

1Q
FY23

-98

Copyright © 2022 CREEMA LTD.

PAGE

7

[Company-wide] Changes in consolidated ordinary profit
Ordinary profit was almost the same as operating profit because there were no major changes in non-operating profit
and expenses.

YoY:13%

Unit: million yen

147
120

131

121

64

61

36

48
18

2
1Q
FY20

2Q

3Q

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

2Q

3Q

4Q

1Q
FY23

-102

Copyright © 2022 CREEMA LTD.

PAGE

8

[Company-wide] Changes in consolidated net income
Net income reached 33 million yen, 26% from the previous year. Net income are higher than ordinary profit because oftax effect accounting.

YoY:26%

Unit: million yen

120

129
116

57

0.6
1Q
FY20

2Q

17

12
3Q

4Q
-9

1Q
FY21

2Q

3Q

26

4Q

1Q
FY22

2Q

3Q

4Q

33

1Q
FY23

-70

Copyright © 2022 CREEMA LTD.

PAGE

9

[Company-wide] Balance sheet status
The financial base remains stable.
Changes in balance sheet
Subject (Unit: Million Yen)

Balance sheet structure as of 1Q of FY23

1Q FY2022

1Q FY2023

YoY

Total assets

3,735

3,919

105%

Current assets

3,531

3,603

Cash and cash equivalents

2,924

Accounts receivable

Current assets 3,603

Current liabilities 2,228

102%• Cash and cash equivalents 2,920

2,920

100%

• Withholdings / Funds payable andamounts due to creators 1,680

584

633

108%

• Accounts receivable 633• Other current assets 49

Other current assets

22

49

221%

Non-current assets

203

315

155%

Total liabilities

2,524

2,564

102%

Current liabilities

2,227

2,228

100%

1,648

1,680

102%

277

184

67%

Other current liabilities

301

363

120%

Non-current liabilities

296

335

113%

Long-term liabilities

286

330

116%

Other non-current liabilities

9

4

50%

1,211

1,354

112%

Withholdings / Funds payable
and amounts due to creators
Loans payable within one
year

Total net assets

Copyright © 2022 CREEMA LTD.

• Loans payable within one year 184• Other current liabilities 363

Non-current
liabilities 335• Long-term liabilities
330• Other non-current liabilities 4

Net assets 1,354

Non-current assets 315
PAGE 10

Business structure and "Creema economic zone"
We are developing a creator empowerment business with Japan's largest handmade marketplace, Creema, as the main
axis. From the next slide onward, we will cover the latest trends in each service, starting with the marketplace service.
Creator empowerment business(1) Marketplace service (Japan/Taiwan/Hong Kong)• KPIs of our business model− Registered creators 230 thousand people− Registered works
14 million items− App downloads
12 million DL− GMV
16 billion/year(2) Platform services• Internal advertising(Advertising for
creators)• External advertising (Advertising forcompanies and local governments)• Membership services(Daily remittanceservice, etc.)

Copyright © 2022 CREEMA LTD.

(Work listing)

Creators(Sellers)

Transaction
Revenue(Purchase)
Payment

Users(Buyers)

Transactionfees(3) Event and store services• Events− HandMade In Japan Fes'
(Tokyo Big Sight), etc.
• Store− Creema Store(4) New service group• Crowdfunding service− Creema SPRINGS• Lesson video platform− FANTIST• Other new services in preparation, etc.

PAGE 11

(1) Marketplace service: Creema GMV trends
With the COVID-19 pandemic under a degree of control, out-of-home activities resumed in earnest, and stay-at-homedemands that had occurred until the previous year decreased significantly from March. As a result, GMV in 1Q roseslightly to 4.2 billion yen, 102% YoY. Excluding the impact of increased demand for mask-related products due to the
spread of COVID-19, the GMV growth in 1Q was 106% YoY.
Main initiatives• Various special features,
merchandising, and campaign
measures are being developed tocatch trends such as Mother's
Day and Golden Week.

Creema GMV (overall)
Unit: million yen

YoY:102%

4,256
3,740

• The "Creema" product was
improved with the aim of
improving the convenience forusers and creators, including theenhancement of optional
functions used by creators whenexhibiting their works.

3,133• Strengthening of systems andsupport structure to provide asafer and more securepurchasing experience.

1,122

3,956

3,136
3,187

1Q
FY21

604
2Q

3,643

3,466

3,759

YoY:106%

4,303 4,266

4,172

3,985
3,522

3,948

3,867

4,231

4,205

279

196

187

120

80

71

60

3Q

4Q

1Q
FY22

2Q

3Q

4Q

1Q
FY23

Mask-related GMV

Copyright © 2022 CREEMA LTD.

Creema GMV (excluding mask-related sales)

3,133

3,136

3,187

1Q
FY21

2Q

3Q

3,759

3,985

4Q

1Q
FY22

3,522

2Q

3,867

3Q

4,231

4,205

4Q

1Q
FY23

Other GMVPAGE 12

(1) Marketplace service: Three-year CAGR of GMV
The three-year CAGR of GMV starting from before the COVID-19 pandemic was 124%, continuing strong growth.

Unit : million yen

CAGR:124%

4,256
3,740

2,224

2,075

2,182

1Q
20FY

2Q

3Q

Copyright © 2022 CREEMA LTD.

3,956

4,172
3,643

3,466

4,303

4,266

4Q

1Q
FY23

3,948

2,515

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

2Q

3Q

PAGE 13

(1) Marketplace service: Trends in marketplace-related KPIs
Both the number of listings and app downloads have been steady. Transaction unit prices are also steadily rising,hitting new records.
Number of listings

App DL

Unit: ten thousand

Average transaction unit price (Japan)

Unit: ten thousand

1,348

Unit: yen

1,253

1,401

1,285
5,086

1,120

1,131

Transaction unit price hit arecord high due to a decrease in
the percentage of mask GMV

5,255

5,285

FY22

1Q
FY23

5,110

4,948

973
837

866
654

694
529

4,410
Unit price temporarily fell due to anincrease in volume of low-priced
mask sales

FY18

FY19

FY20

Copyright © 2022 CREEMA LTD.

FY21

FY22

1Q
FY23

FY18

FY19

FY20

FY21

FY22

1Q
FY23

FY18

FY19

FY20

FY21

PAGE 14

[Ref.] Example measures for users
By developing various special features that capture trends such as Mother's Day and Golden Week, we are focusing
on sharing the diverse and deep charm of creators' works with users.
Mother's Day
By introducing products available on Creema and making
suggestions related to Mother’s Day gift needs, we help users
convey their feelings to their mothers.

Copyright © 2022 CREEMA LTD.

Golden Week
We implemented points measures as well as showcasing Creema items
perfect for activities that can be enjoyed during Golden Week.

PAGE 15

[Ref.] Example of product modification (setting inventory for each product type)
By allowing creators to set their inventory for each of their products, it has become easier for creators to set productvariations, such as size and color, and to set inventory for each product. At the same time, it has also improved
product searchability for buyers.

Copyright © 2022 CREEMA LTD.

PAGE 16

(1) Marketplace: Sales trends
Sales in the marketplace service were 431 million yen, 102% YoY. Excluding the impact of increased demand for maskrelated products due to the spread of COVID-19, sales grew 106% YoY in 1Q.

Sales in the marketplace service
Unit : million yen

YoY:102%

416
387

312

104
1Q
FY21

2Q

YoY:106%
414

431

407

424

384

420

314

364

402

28

20

18

12

8

7

6

3Q

4Q

1Q
FY22

2Q

3Q

4Q

1Q
FY23

364

342

323

64

Sales excluding mask-related sales

Mask-related sales

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351

378

369

312

323

314

1Q
FY21

2Q

3Q

364

4Q

402

1Q
FY22

351

369

2Q

3Q

407

424

4Q

1Q
FY23

Other sales

PAGE 17

(1) Marketplace: 3-year CAGR of sales
The three-year CAGR of Sales starting from before the COVID-19 pandemic was 126%, continuing strong growth.

Unit : million yen

CAGR:126%
416

387

384

420

342

213

213

213

1Q
FY20

2Q

3Q

Copyright © 2022 CREEMA LTD.

364

378

2Q

3Q

414

431

4Q

1Q
FY23

246

4Q

1Q
FY21

2Q

3Q

4Q

1Q
FY22

PAGE 18

Reposted: Business structure and "Creema economic zone"
Recent trends in platform services are covered from the next slide onward.
Creator empowerment business(1) Marketplace service (Japan/Taiwan/Hong Kong)• KPIs of our business model− Registered creators 230 thousand people− Registered works
14 million items− App downloads
12 million DL− GMV
16 billion/year(2) Platform services• Internal advertising(Advertising for
creators)• External advertising (Advertising forcompanies and local governments)• Membership services(Daily remittanceservice, etc.)

Copyright © 2022 CREEMA LTD.

(Work listing)

Creators(Sellers)

Transaction
Revenue(Purchase)
Payment

Users(Buyers)

Transactionfees(3) Event and store services• Events− HandMade In Japan Fes'
(Tokyo Big Sight), etc.
• Store− Creema Store(4) New service group• Crowdfunding service− Creema SPRINGS• Lesson video platform− FANTIST• Other new services in preparation, etc.

PAGE 19

(2) Platform services: Main initiatives and sales trends
Although the number of users of internal advertising was steady, there was no delivery of large-scale advertisement
projects in external advertising as there was in the same period last year (however, this is as planned). As a result,sales of the platform service was 146 million yen in 1Q, 88% YoY.
Main initiatives• In external advertising, collaboration
projects with a variety of companies
including major commercial facilities, aswell as orders and deliveries for PR
projects by local governments, etc. werecarried out smoothly.
✓ However, there was a decrease
compared to the previous year due
to the delivery of large-scale
projects in the same period of theprevious year.
• In internal advertising, various campaign
measures were developed to promote theuse of advertisement services, and an
operation support file function was
released to further improve theeffectiveness of advertisements.

Copyright © 2022 CREEMA LTD.

Sales trends
A large project wasdelivered in external
advertising in FY22.

Unit: million yen

YoY: 88%

No large-scale
projects weredelivered in Q1.

165
130

118

113
90
52

1Q
FY20

2Q

84

90

95

4Q

1Q
FY21

2Q

146

146

4Q

1Q
FY23

129

60

3Q

3Q

4Q

1Q
FY22

2Q

3Q

PAGE 20

[Ref.] A Journey into Fukushima handicrafts -vol. 2We support efforts to expand sales channels for traditional crafts and local products in Fukushima Prefecture, which
has many unique, traditional crafts and local products including Izugahara Washi, which was used as paper by the
Aizu clan, Aizu lacquerware, cotton, and Akabeko.

Copyright © 2022 CREEMA LTD.

PAGE 21

Reposted: Business structure and "Creema economic zone"
Recent trends in the event and store services are covered from the next slide onward.
Creator empowerment business(1) Marketplace service (Japan/Taiwan/Hong Kong)• KPIs of our business model− Registered creators 230 thousand people− Registered works
14 million items− App downloads
12 million DL− GMV
16 billion/year(2) Platform services• Internal advertising(Advertising for
creators)• External advertising (Advertising forcompanies and local governments)• Membership services(Daily remittanceservice, etc.)

Copyright © 2022 CREEMA LTD.

(Work listing)

Creators(Sellers)

Transaction
Revenue(Purchase)
Payment

Users(Buyers)

Transactionfees(3) Event and store services• Events− HandMade In Japan Fes'
(Tokyo Big Sight), etc.
• Store− Creema Store(4) New service group• Crowdfunding service− Creema SPRINGS• Lesson video platform− FANTIST• Other new services in preparation, etc.

PAGE 22

(3) Event and store services: Main initiatives and sales trends
Along with a reduction of COVID-19 infections, a recovery trend was seen in the store service which was weak in theprevious fiscal year. However, due to the operation of one fewer store than last year, 1Q sales were 12 million yen, 92%
YoY. No major events were held in 1Q.
Main initiatives• With the COVID-19 pandemic undercontrol, the store area, which was
sluggish in the previous fiscal year, isrecovering.
• Currently, there is only one store,"Creema Store Sapporo", but it continues
to grow steadily by implementing various
merchandising measures based on trends
and improving customer service skills.

Sales trends

Unit: million yen

118

116

This year, it was reduced
to one store in Sapporo.

YoY:92%
62

59• No major events were held in 1Q, and thefirst event is scheduled for July 23 and24, 2022.

43

41
26

24

14

1Q
FY20

Copyright © 2022 CREEMA LTD.

Here, the company had
two stores, in Shinjuku
and Sapporo.

2Q

3Q

4Q

1Q
FY21

2Q

3Q

19

4Q

13

13

1Q
FY22

2Q

12
3Q

4Q

1Q
FY23

PAGE 23

[Ref.] HandMade In Japan Fes 2022
"Handmade In Japan Fes 2022" is scheduled At Tokyo Big Sight on July 23 and 24, which is 2Q of FY2023. Compared to theevent held during the pre-emergency measures in January this year, we expect visitor numbers to increase significantly.

Copyright © 2022 CREEMA LTD.

PAGE 24

Reposted: Business structure and “Creema economic zone”
Recent trends in the new service group are covered from the next slide onward.
Creator empowerment business(1) Marketplace service (Japan/Taiwan/Hong Kong)• KPIs of our business model− Registered creators 230 thousand people− Registered works
14 million items− App downloads
12 million DL− GMV
16 billion/year(2) Platform services• Internal advertising(Advertising for creators)• External advertising (Advertising forcompanies and local governments)• Membership services(Daily remittance service, etc.)

Copyright © 2022 CREEMA LTD.

(Work listing)

Creators(Sellers)

Transaction
Revenue(Purchase)
Payment

Users(Buyers)

Transactionfees(3) Event and store services• Events− HandMade In Japan Fes’
(Tokyo Big Sight), etc.
• Store− Creema Store(4) New service group• Crowdfunding service− Creema SPRINGS• Lesson video platform− FANTIST• Other new services in preparation, etc.

PAGE 25

(4) New service group: "Creema SPRINGS" & "FANTIST"In the new service group, In the new service group, various projects have been drafted for the crowdfunding service"Creema SPRINGS" as in the previous year, many of which have achieved the target amount of support. Also, in thelesson video platform "FANTIST", the number of lesson videos has exceeded 1,500 and is growing steadily.
Crowdfunding: Creema SPRINGS

Lesson video platform: FANTISTThe crowdfunding service "Creema SPRINGS" is expanding its
diverse and attractive projects while linking its customer base with thehandmade marketplace "Creema".

“FANTIST” is a lesson video platform offering lesson videos focusedon arts, handicrafts and beauty. There are over 1,500 videos, andnow offers course videos provided by creators as well as the
FANTIST official course developed independently by FANTIST Co.,Ltd..

Copyright © 2022 CREEMA LTD.

PAGE 26

FY23 growth strategy

Copyright © 2022 CREEMA LTD.

PAGE 27

Creema's challenges for further growth
Now when both the GMV of Creema and the financial performance of the entire company have reached record highs, twostrategic challenges for further growth will be increasing awareness of the handmade marketplace market and Creema andstrengthening the Creema economic zone by creating new services.

Current
condition• Since the company's foundation, we have led the market as a pioneer of the industry with our core service Creema,
Japan's first online handmade marketplace.
• In the FY22, the GMV of Creema exceeded 16 billion yen, a record high, further strengthening its position in thedomestic market.
• In addition, a variety of other services that support creators' activities have also grown, and both sales and profits havereached record highs.
• We recognize that two strategic challenges for our future growth are increasing awareness of the handmade
market/services and strengthening the Creema economic zone by creating new services.

Strategic
challenges forfurther growth‒ A Increasing awareness of the handmade market/services✓ According to our recent survey, the market awareness of the handmade marketplace is far below that of fashion
e-commerce websites, flea market apps, etc.
✓ Creema itself is only about 55% as well-known in Japan as its major handmade marketplace peers.
✓ Despite this, Creema's GMV is one of the largest handmade marketplaces in Japan.
✓ To put it another way, if market and service awareness improve, we can realize our huge growth potential.
‒ B Strengthening the Creema economic zone by creating new services✓ We offer a wide range of services, from an online marketplace to advertising, the event and store services, andthe lesson video platform.
✓ We have linked a variety of services organically to enhance the convenience of the Creema economic zone as awhole and to establish the value and superiority of the business.
✓ In order to achieve non-continuous growth in the future, it is necessary to continue to create new services byutilizing our abundant strategic assets.

Copyright © 2022 CREEMA LTD.

PAGE 28

FY23 strategic policy
In order to respond to strategic challenges, we aim to further expand the Creema economic zone by simultaneously
implementing the further refinement of existing businesses, while focusing on both large-scale promotional
investments centered on TV commercials and the expansion and strengthening of the new service group.
Strategic challenges

FY23 strategic policy

Overview

Large-scale promotional investments
centered on TV commercials• In order to raise market and service awareness, a total of 1.09 billion yen, an
increase of 630 million yen YoY, will be invested in a large-scale promotion
centered on TV commercials.
• By expanding recognition through these measures, we will expand thehandmade marketplace market and gain market share in other e-commercemarkets.

1

A
Increasing awareness ofthe handmade marketplaceand services

B

2

Strengthening the Creema economic
zone by creating new services

Expansion and strengthening of the
new service group• We will continue to invest in the already-released Creema SPRINGS andFANTIST to expand the business in earnest.
• In addition to the above, we will accelerate investment in the development of
the new service group using our resources, and launch new services
sequentially in FY23 and beyond.

+3

Further refinement of existing
services

Copyright © 2022 CREEMA LTD.

• Major investments will be made in systems and the infrastructure base in
FY23 to further improve the user experience for the medium-to-long-term
growth of our core service “Creema".
• Including the above, we will continue to refine the three services that are
already the core of our business: marketplace, platform, and event and store
services (as mentioned later).
• The combination of increased awareness and the expansion of new services
will increase the value of customers in the Creema economic zone as awhole and further strengthen the value and superiority of the business.
PAGE 29

1 Large-scale promotional investments centered on TV commercials - TAM

The current market size of the domestic handmade marketplace is 40 billion yen. The potential market size isestimated to be about 303 billion yen, so it still seems feasible to expand. It is also possible to capture a wide range of
peripheral markets such as handmade materials, related media, and lesson fields.
Domestic creator empowerment market
Creator empowerment market(including advertising, crowdfunding, etc.)

Approx. 1.9 trillion yen
Hobby market, including handmade(sales of materials for production of works,
skills classes, media, events, etc.)

Handmade marketplace (potential)
Handmade marketplace (current)

Approx. 303 billion yen
Approx. 40 billion yen

Note: The creator empowerment market consists of business groups that provide necessary functions and services to achieve a society in which talented people in all genres, not only handmade creators, can play an active role. The market size of thehandmade marketplace (current) is calculated based on the GMV of Creema and minne from January to December 2021, assuming that the combined GMV share thereof is 80% of the total. As the value of the market size of the handmade marketplace
reported in the Hobby White Paper 2018 published by the Hobby Association of Japan approximates the total GMV of Creema and minne, these two services are considered to account for the majority of the market. However, since there are similar types ofmultiple businesses, we conservatively assume that the total GMV of these two services is 80% of the market. The market size of the handmade marketplace (potential) is calculated by multiplying the GMV per person of Etsy, a global handmade
marketplace founded in 2005 (calculated by the U.S. population of 332 million divided by the GMV of $6.95 billion in the U.S. in 2021) and the population of Japan. The figure was 303 billion yen (assuming $1 = 115 yen). The TAM is larger than that
disclosed at the time of listing, but this is because the GMV scale of domestic businesses and Etsy has grown significantly in response to the spread of COVID-19, supported by mask-related demand and stay-at-home consumption, and the growth rate of
the entire handmade marketplace market has increased as a result. The market size of the hobby market, including handmade products, was taken from the Hobby White Paper 2019.
Source: GMO Pepabo financial materials, Etsy financial materials, Hobby White Paper 2018 and 2019

Copyright © 2022 CREEMA LTD.

PAGE 30

1 Large-scale promotional investments centered on TV commercials - TAM expansion

The superior design, rarity, and originality of the creators' works give Creema a competitive advantage, and if Creema
owns a category of work, it can access all categories and markets, including fashion e-commerce, interior, and ecommerce for sundries, etc., and may gain market share.
Creema user type classification
User typeFeaturesHandmade lovers• Users who like to purchase creators'
works• Purchase various works from multiple
creators

Fan bases of specificcreators• Prefer the style of a specific creator, andcontinuously purchase works fromseveral creators

Neutral layer• Purchased a creator's work because it
was the best product after checking
various shops• The deciding factors behind purchasing
are qualities found in creators' works but
not mass-produced products, such as
excellent design, rarity, and originality→ These features mean that Creema is
not limited to the handmade market,
but can access a wider range ofmarkets and categories

Concept image of market expansibility of creators' works
Categories offered by
CreemaAccessible market

Clothing and clothing
accessories, etc.
CreemaFood, beverages, andalcoholic beverages

CreemaHousehold goods, furniture,and interior
Creema• By improving the value
provided, aim to further
increase participating
creators and registeredworks from the current
230 thousand and 14
million, respectively.
• Also raise awareness bycontinuing PR planningand promotional
measures.
• Through these efforts,
encourage customers tothink of Creema when
they consider purchasing
products in all categories
offered by Creema, anduse the value provided bycreators' works to expand
our market share.

In order to maximize the market potential of creators’ works, it is necessary to expand the awareness of the handmade marketplace Creema,
and we believe that large-scale promotional investments, including mass advertising centered on TV commercials, are essential.

Copyright © 2022 CREEMA LTD.

PAGE 31

1 Large-scale promotional investments centered on TV commercials - large investments to expand TAM

By making large-scale promotional investments centered on TV commercials, the company aims to expand thehandmade marketplace market itself and increase the service awareness of Creema, thereby further capturing
peripheral markets by leveraging the high customer value and expanded awareness of creators' works.
Large-scale promotions centered on TV commercials• High quality works that are produced by professional and semiprofessional creators have an appeal beyond handmade lovers.
• We intend to expand the handmade marketplace market and ourmarket share in other peripheral markets by investing heavily inadvertising centered on TV commercials.

Increase in promotion expenses• The company plans to spend a total of 1.09 billion yen, mainly on
TV commercials, by increasing promotion expenses by 630 million
YoY. This major investment will further accelerate the growth of thebusiness.
Unit: million yen

Copyright © 2022 CREEMA LTD.

PAGE 32

2 Expansion and strengthening of the new service group - Investment policy for new services

In parallel with the promotion strengthening, we will proceed from areas synergistic with the platform built through thecreator empowerment business. After that, the competitive advantage will be further strengthened by the cooperation
between old and new services, and the Creema economic zone will be expanded.
"Creema economic zone" expansion process

Business expansion
through the high customer
value

Build a solid platform and afinancial base throughbusiness expansion

Expanding the Creema
economic zone
≈ Strengthening thecompetitive advantage
Improving customer value
throughout the "Creema
economic zone" bystrengthening acollaboration between old
and new services

Copyright © 2022 CREEMA LTD.

Sequential launch of newservices utilizing theplatform

Creema platform infrastructure and new services① Creator base centered on professionals andsemi-professionals② A huge user base of over 20-30 million visits
per month, mainly by women in their 20s to
40s③ A website / app as a medium withtransmission power and community base that
goes beyond "just an EC website"④ Business development ability that has createdvarious services by utilizing the platform

Utilizing a highly original platform, we will actively
develop new services in other areas while
focusing on areas related to creator activity
support.

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2 Expansion and strengthening of the new service group - Strengthening policy

While strengthening the already-released crowdfunding service Creema SPRINGS and the lesson video platform
FANTIST, preparations will be made to utilize our assets in creating the new service group sequentially in FY23 andbeyond.
Strengthening already-released new services
Crowdfunding: Creema SPRINGS

Further creation of new services

Lesson video platform:FANTIST• Strengthen the sales structure to ensure astable supply of high-quality projects on theplatform.

• At the end of 2021, we began offeringcourse lesson videos that systematicallyteach users the necessary skills.

• Development and examination of various
new services with high synergy with
Creema is underway.

• In addition, we will flexibly make use of
Creema to expand the number of users inorder to ensure funding for the project
owners.

• We will continue to expand the number of
one-off and course lesson videos, and aim
to achieve a platform that attracts the mostcreative lesson videos in Japan.

• We will continue to invest in launching newservices sequentially in FY23 and beyond.

Copyright © 2022 CREEMA LTD.

PAGE 34

2 Expansion and strengthening of the new service group - Concept image of enhancement

In FY22, we made our much-awaited entry into the EdTech field. In FY23 and beyond, at least one new service will be
released in each fiscal year, and the value of the Creema economic zone as a whole will be enhanced through theintroduction of multi-layer services.
Past
Before FY20
Starting with the C2C
marketplace, formed thebasis of the creator
empowerment business.

Future

FY21

FY22

FY23

After FY24

Released the crowdfunding
service Creema SPRINGS
to help creators get funding.

Entered the EdTech fieldwith the acquisition of thelesson video platform
FANTIST.

Planning to release a newservice utilizing our strategic
assets.

Planning to release a largescale service to support
creators.
New Service (2)New Service (1)New Service (1)Lesson video platform
Lesson video platform
Crowdfunding
Crowdfunding
Crowdfunding
Ad network(Internal advertising)Media (External advertising)

Ad network(Internal advertising)Media (External advertising)

Ad network(Internal advertising)Media (External advertising)

Offline Biz (Event and store
services)

Offline Biz (Event and store
services)

Offline Biz (Event and store
services)

C to C Marketplace

C to C Marketplace

C to C Marketplace

Copyright © 2022 CREEMA LTD.

Ad network(Internal advertising)

Lesson video platform
Crowdfunding
Ad network(Internal advertising)Media (External advertising)Media (External advertising)

Offline Biz (Event and store
services)

Offline Biz (Event and store
services)

C to C Marketplace

C to C Marketplace

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3 Further refinement of existing services

While focusing on the aforementioned large-scale promotional investments centered on TV commercials and the
expansion and strengthening of the new service group, we will also invest in large-scale systems and infrastructure tofurther improve the user experience, and aim for further growth by refining services in the three existing fields.
Marketplace service

Platform services

Event and store services• Increase awareness and strengthen the userbase through large promotions, including the
aforementioned TV commercials.

• For external advertising, we will strengthen
receiving orders for projects to revitalize
regional economies, which continue to growyear by year, and for collaboration projects
that only we can implement.

• For the store service, we will rebuild Creema
Store Sapporo in light of the easing of the
COVID-19 pandemic.

• Maximize user satisfaction through productrefinement, including improved searchfunctions and UI.
• Implement large-scale system andinfrastructure investments to ensure stable
service operations and improve user
experience over the medium to long term.
Copyright © 2022 CREEMA LTD.

• For internal advertising, we will achieve further
growth by expanding the number of users andimproving the effectiveness through refining
the UI and logic.

• For events, this year's HandMade In Japan
Fes' and Creema YAMABIKO FES will be
returned to their normal scale. At the sametime, we will continue to stimulate excitementin the Japanese creative scene with a view tolaunching more new events.

PAGE 36

FY23 earnings forecasts

Copyright © 2022 CREEMA LTD.

PAGE 37

Summary of FY23 earnings forecast
We aim to achieve FY23 sales of 2.8 billion yen, which is 125% YoY. In line with the implementation of large-scale
strategic investments, all profit items below the operating profit for the next fiscal year will be temporarily in the red.
Through the large-scale growth investments, we hope to gain a foothold in further growth in the future.
Company-wide earnings forecasts
Unit: million yen

Sales

Sales forecasts by major services(Ref.) FY22

FY23

YoY

2,294

2,872

125%

Sales cost

74

663

887%

Gross profit

2,219

2,208

99%

SG&A

1,897

2,655

140%

Operating profit

322

-447

-769

Ordinary profit

363

-454

-818

Net income

230

-376

-606

Unit: million yen

Marketplace

1,867
YoY:118%

Platform

676
YoY:120%

Event and store

252
YoY:190%

New service
group

75
YoY:329%

Application of newrevenue recognition
standard

Strengthening
upfront investment
for future growth

We plan to accelerate large-scale promotional investments, including mass advertising, mainly TV commercials, from 2Q of this fiscal year.
Copyright © 2022 CREEMA LTD.

PAGE 38

Forecast of consolidated SG&A expenses for FY23
In addition to large-scale promotion investment, including mass advertising, and temporary expansion of system andinfrastructure investment for medium- to long-term growth, personnel and outsourcing expenses for creating new
businesses for the purpose of multi-layer services will increase.
Unit: million yen

2,655:Other:Promotion expenses:Outsourcing expenses:Personnel expenses

649

1,831

1,897

789

864

1,090

522

460

275

322
67

79

91

355

439

481

FY20
(Results)

FY21(Results)

FY22(Results)

1,357

Large-scale promotional investments centered on TV
commercials led to a significant YoY increase in promotion
expenses.

611

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638

FY23
(Forecast)Partial temporary increases in outsourcing and personnel
expenses due to the expansion and strengthening of the newservice group and an increase in investment in existing systems
and infrastructure for medium- to long-term growth.

FY24(Forecast)

FY25(Forecast)

PAGE 39

Forecast of consolidated operating profit for FY23
For FY23, operating profit will be 144% YoY, or 465 million yen, if investment is kept at the normal level. However, in order tomake major investments in the aforementioned large-scale promotion, development investment, new business development,
etc., we plan to land at -447 million yen. We aim to maximize medium- to long-term growth and cash flow generation capacity
by making major investment during this period.
Major investments to grow existing businesses, including Creema.
• Temporary increase in advertising expenses, including TV
commercials• Temporary increase in large-scale system and infrastructure
investments to ensure stable service operations and improveuser experience over the medium to long term

YoY:144%

Unit: million yen

YoY:143%

465
322
226
602

FY21 (Results)

FY22 (Results)

FY23 (Forecast)
Before reflecting theinvestment amountIf the normal level of investment is maintained,
operating profit for the FY23 will grow 144% YoY at
465 million yen.

Large-scale investment to expand and strengthen
the new service group.
• Temporary increase in personnel andoutsourcing expenses

310

FY23 (Forecast)
After reflecting theinvestment amount-447

In order to maximize medium- to long-term growth and cash flow generation
capacity, operating profit for FY23 will be set at a deficit of 447 million yen due tomajor investments.

Copyright © 2022 CREEMA LTD.

PAGE 40

Examples of our ESG initiatives
We invited the creators of "selvedge (cloth edges)" to produce works using upcycled items, an industrial waste
produced in the weaving process in Enshu textile, a local industry in Enshu region, Shizuoka Prefecture, andcommercialized 25 Creema works. We will continue to aim to realize a sustainable world by creating new value in
waste materials through the power of producing goods.

Appendix

Copyright © 2022 CREEMA LTD.

PAGE 41Effect of the application of new revenue recognition standard
Beginning in FY23, we will incorporate a portion of SG&A expenses into sales and sales cost due to the application of the new revenue
recognition standard. As a result, the sales cost will explode, but it will only shift from SG&A expenses as follows, with no effectwhatsoever on our business profitability.
Major changes due to the application of new revenue recognition standard

SG&A• Part of the transfer fee, which was previously treated as negative
processing of the payment fee, is included in sales as aconsideration for our provision of services.
• Settlement and payment fees are included in the cost.
• As a result, SG&A decreased by 492 million yen compared to the
pre-application

Sales• The negative processing of the payment fee for SG&A is included insales.
• As a result, sales increased by 37 million yen compared to before
the application.

Sales cost

• Settlement and payment fees for SG&A are included in the cost.
• As a result, cost increased by 529 million yen compared to before
the application.

Gross profit• Gross profit decreased by 492 million yen compared to before theapplication due to an increase of 37 million yen in sales and anincrease of 529 million yen in costs.

Copyright © 2022 CREEMA LTD.

Effect of application on financial figures

PAGE 42

Take rate trends
In FY21, GMV increased due to the spread of COVID-19, but the sales of the event and store services fell sharply,
resulting in a significant decrease in the take rate. FY22 is on a recovery trend with continued stable platform growthand some recovery for the event and store services. In FY23 and beyond, the take rate will gradually improve as the
new service group is added sequentially in addition to the stable growth of platform and the event and store services.
16.9%
14.6%
14.3%
13.4%
12.4%
The take rate was temporarily
fetched down due to a significant
decline in sales of the event andstore services and a significant
growth in GMV.

FY18
(Results)

FY19(Results)

FY20(Results)

FY21(Results)

As the effects of COVID-19 gradually ease,
the take rate has been increasingly
improving to the level it should be.

FY22(Results)

FY23(Forecast)

FY24(Forecast)

Note: The take rate is calculated using the GMV of the marketplace service as the denominator and the sales of all services as the numerator.

Copyright © 2022 CREEMA LTD.

PAGE 43

Our policy on ESG
We will continue to work on various ESG issues in order to realize a fair society in which talents and abilities are duly
evaluated and people can live and work in their own way.
Bring about a fair society where talented people
and hard workers are justly appreciated• The word "Creema" was created from the term "Creators' New Market" in pursuitof the mission to build a fair world where genuinely good products will not go
unnoticed.
• Creema is making trailblazing efforts to bring about a fair society where thetalents and abilities of people are justly evaluated and people can be living andworking in their own way in a world of creation where talent and hard work do notdirectly lead to opportunities and appreciation.

Copyright © 2022 CREEMA LTD.

Regional revitalization and development through producing goods• Collaboration between quality materials and creators with unique creativity fromacross the country "Nationwide Discovery of Fantastic Goods" is ongoing with theaim of regional revitalization by introducing the attractions of places via thecraftworks of creators.
• Additionally, we are working on regional revitalization and development pivoting
on producing goods through measures such as Creema Craft Caravan, in which
we visit towns with the theme of producing goods across the country and open amarket with local citizens.

PAGE 44

Case studies on ESG initiatives
We commercialized 25 upcycled items by inviting Creema creators to come up with craftworks using selvedge (clothedges), which is industrial waste from the weaving process of Enshu textile, a local industry of the Enshu region,
Shizuoka Prefecture. Going forward, we will remain determined to bring about a sustainable world where the power of
producing goods creates new value from waste.

Copyright © 2022 CREEMA LTD.

PAGE 45

Changes in the number of employees (including part-time employees)
There has been no significant change in the number of employees in the past year.

Unit: people

75

1Q
FY20

98

101

3Q

4Q

95

93

94

95

96

1Q
FY21

2Q

3Q

4Q

1Q
FY22

100

102

2Q

3Q

96

97

4Q

1Q
FY23

79

2Q

Note: The number is the total number of permanent, contract, and part-time employees, excluding executives.

Copyright © 2022 CREEMA LTD.

PAGE 46