Third Quarter Financial Results Meeting for the
Fiscal Year Ending March 2022

Wacoal’s Overseas Business
Masaaki Yajima
Corporate Officer in charge of Group International Business;
Director and Corporate Officer and General Manager of
Global Division of Wacoal Corp.
February 10, 20221

Today’s Agenda
1. Overview of overseas business

2. Current business conditions
3. Growth strategies for main companies

2Founder Koichi Tsukamoto
Based on the “One Phase Every Ten Years 50-Year Plan” established after
the first trip to Europe and the US, Wacoal expanded overseas in 1970
(joint ventures were established in S. Korea, Thailand, and Taiwan)

Our VisionWe, the employees and management of
Wacoal, will maintain a refined corporate
culture based on mutual trust and willcontinually strive to make the Company a
global leader in the industry.
First visit to Europe and the US (1956)

3

Overseas business history (Sales trends of overseas businesses)
Achieved first singleyear profitability in
Wacoal America (1995)¥60 billion¥40 billion

Acquired Eveden Group(UK) (currently Wacoal
Europe Ltd.) (2012)

Local newspapers
introducing Wacoal

Joint venture agreementin China terminated,
reorganized as wholly
owned subsidiary(2000)

Launched Wacoal brandin the US (1985)

Transitioned to Wacoal
Holdings Corp. (holding
company system)(2005）
Established a joint
venture in China (1986)

Acquired Intimates
Online (US) (2019)

Established textile
company in Thailand(2016)
Established
Myanmar Wacoal
Co., Ltd. and Wacoal
India（2015）¥20 billion
Established joint
ventures in Thailand, S.
Korea, and Taiwan(1970)

EstablishedIndonesia
Wacoal Co., Ltd.
(1991)
Established
Wacoal Hong
Kong Co., Ltd.
（1983）

EstablishedPhilippine Wacoal
Corp. (1989)

Established Wacoal
Malaysia (2003)
Established Vietnam
Wacoal Corp.
(1997)

Wacoal brand presentation in Europe

4Scale of overseas business sales (FY2020)
Consolidated sales¥186.8 billion

 (Consolidated) Sales by region(Consolidated + Non-consolidated)
Overseas sales ratio

43％(Consolidated)
Domestic sales¥135.3 billion

Asia excluding China¥10.3 billion（20％）

China¥10.3 billion（20％）

Europe (Wacoal Europe UK/European region sales)¥8 billion（15％）(Consolidated)
Overseas sales¥51.5 billion

N. America (Wacoal International, Wacoal Europe N.
American region sales)¥23 billion（45％）(Nonconsolidated)
Overseas sales*¥49.7 billion1 (Non-consolidated) Sales by company*
Malaysia Wacoal
Indonesia Wacoal¥5.3 billion (11％）

Taiwan Wacoal¥10.6 billion (21％）

Shinyoung Wacoal (S. Korea)¥16.6 billion (33％)(Consolidated + Non-consolidated)
Total sales¥236.5 billion

Thai Wacoal¥17.2 billion (35％）*Calculated based on data before adjustment of each company’s financial results

1

5Business model: build a vertically integrated model in each region to meet local needs
Product
planning anddesignProduction

Available brands

MarketingWacoalAmerica

Planning anddesign by ourown designers

Mainly produced byour own factories(Dominican Republic)*Some products arepurchased fromoutsideFocused on the Wacoal brandIndependent
planning

Intimates
OnlinePlanning anddesign by ourown designers
is outsourced

Outsourced

WacoalEuropePlanning anddesign by ourown designers

Mainly produced by ourown factories(Sri Lanka)*Some products arepurchased from outside

Wacoal China

Planning anddesign by ourown designers

Mainly produced by ourown factories (China)*Some products arepurchased from outside

Other Asian
Subsidiaries(excl. factories)*Production
outsourced

LIVELY brand offerings

Independent
planning*Production outsourced
Developing unique marketing
using ambassadors

Sales of innerwear
products supplied by theGroup(Singapore, Hong Kong, Philippines)

Building brand portfolios based on
country characteristics and distribution
channels (multiple brands)

Focused on the Wacoal Brand

Independent
planning*Production
outsourced

Independent
planning*Production
outsourced

Focused on the Wacoal brandIndependent
planning*Production
outsourced

Sales style(Main channel/EC ratio)
・No dispatch of sales associates
・Sales channels: Dept. store (store, EC)
3rd party EC, own EC, directly managed
stores (2 stores)

・EC ratio 43％ (Cumulative 3Q FY2022)
・Sales mainly via own EC
・Sales channels: Own EC, directly managed
stores (4 stores)
wholesale to some clients・EC ratio 82％ (Cumulative 3Q FY2022)

・ No dispatch of sales associates
・Sales channels: specialty store, dept. store
3rd party EC, own EC, directly managed
stores (14 stores)

・EC ratio 25％ (Cumulative 3Q FY2022)

・Dispatch sales associates todept. stores, etc.
・Sales channels: Dept. store, directly
managed store, 3rd party EC, own EC

・EC ratio 22％ (Cumulative 3Q FY2022)
・Dispatch sales associates to dept.
store
・Sales channel: mainly dept. store
・EC is available, but ratio is low (1-5%)

6

Production structure: Using globally located factories, build a production structure
capable of providing a stable supply*Japanese factories not listed
・Main production is carried out
at Sri Lankan factories
・Some products are fromASEAN factories

・Main production is carriedout at Dominican factories
・Some products are fromASEAN factories

Chinese factories(Dalian, Guangdong)

Wacoal Europe
Markets: UK, Europe,
US

Wacoal America
Markets: US, Canada,
Brazil, etc.

・Production in China, ASEAN

・Production in
Japan, China,
ASEAN

Wacoal(Japan)WacoalChina

Dominican
factories(Wacoal Dominica)

Sri Lankan
factories(Wacoal Sri Lanka)
Sales
offices in
ASEAN

Produced in ASEAN

ASEAN factories(Vietnam, Myanmar,
Thailand, Indonesia)

7Performance characteristics (pre-COVID level)

Wacoal America
Low fixed cost ratio and high profitability, due
to sales associates not being assigned tostores, etc.

【Operating Income】

Wacoal Europe¥2 billion

Wacoal America¥1.5 billion

Low fixed cost ratio and high profitability, due
to sales associates not being assigned tostores, etc.

Wacoal China
Wacoal Europe¥1 billion

Wacoal China¥0.5 billion

Asia (other) (Hong Kong, Singapore, Philippines, India, etc.)

Asia (Other)¥5 billion¥10 billion¥15 billion【Sales】
Intimates Online

Though fixed costs such as rents and personnel
expenses for sales associates are high, a certain
level of profitability is secured through sales
growth¥20 billion

Mid- and high-price-range markets are still
small, as is the scale of business in each country,
however, there are many regions that have a
lot of room to grow, such as the Philippines,
Vietnam, and India

Intimates Online
In the post M&A growth investment stage,
growth potential is high, but still in the red8Performance comparison with domestic business (upper: sales, lower: operating profit margin)(Unit: ¥100 million)

1109

1159

1157

1206

1122

436
200

214

231



FY2011FY2012FY2013

FY2014

Wacoal（Overseas)

481

1161

9.3%
7.1%
6.7%

7.3%
6.2%

7.9%

519

FY2015FY2016

1061
861

484

519

531

498

9.9%

FY2017FY2018FY2019FY2020

8.5%

7.4%
6.3%

7.5%

7.3%

6.8%

5.9%

5.7%
5.6%

Japan: High fixed costs, and gradual decline in profitability as sales decrease

FY2012FY2013

FY2014FY2021

8.6%

3.0%

Impact of COVID-19 pandemic,
and upfront investments in IO Inc.

FY2011

414

Overseas: High profitability in Europe and the US drives profit margins to a high level

5.1%


1134

Overseas: Growth trend due to market expansion, M&A,
etc.



6.6%

1184

Japan: Gradual decline in sales due to market contraction caused by the closure of existing distribution channels, etc.



Wacoal（Japan）

1181

FY2015FY2016FY2017FY2018FY2019FY20200.7%

FY20219

Current business conditions(Wacoal business (overseas) performance by segment, cumulative through 3Q FY2022)
Half the level of the cumulative operating income of about ¥4 billion for 3Q FY2019
 Wacoal America and Wacoal Europe exceeded the results of 3Q FY2019
 Due to continued growth investment, IO Inc. recorded an operating loss (3Q FY2022 results: -$9.6 mil)Wacoal business(overseas) segment
3Q FY2020
cumulative operating
income*IO Inc. newly consolidated from Aug 2019

 Wacoal China saw decreased profits due to a decline in sales (difference vs 3Q FY2019: -¥0.7 billion）

US
FX
Asia
Europe China (other) impacts

2.7

−0.2

−2.1
3Q FY2021
cumulative
operating loss
（real basis)

Europe−1.2

US

3Q FY2022
cumulative
Operatingincome−0.1 ＋0.2

＋1.7

2.0

China

Asia
−0.4 (other)

FX−0.5 impacts

±0

−1.5

＋2.1

*In real terms excluding impacts such as temporary leaveand subsidies (actual result: -¥0.02 billion)(billion of yen)10Current business conditions, challenges for each company (1)Vs FY2021
Vs FY2020

Wacoal America FY2022 sales

IO Inc. FY2022 Sales

Vs FY2021
Vs FY2020

271
247

252

156
147
137

129

122
112

200

125

168

114

123

125

105

100

121

106

161
93

97
84
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

【Business conditions】


Business conditions (especially for physical stores) improved significantlywith the recovery in consumer spending following the relaxing of COVID-19
restrictions in the US
Growing impact of inflation resulting from high crude oil prices and risinglabor costs【Business challenges】


Slowdown in economic recovery momentum, realizing growth for
own EC platform
Cost increase due to soaring raw material prices and transportation
costs

169

147

153

152

120

94

100

Dec

181

167

98
Apr

May

Jun

Jul

Aug

90
Sep

Oct

99
Nov

Dec

【 Business conditions】


Aggressive advertising against the backdrop of the COVID-19 pandemic
was successful, resulting in significant growth in the previous year
Growth of own EC slowed in FY2022 due to soaring advertising costs
and deteriorating marketing efficiency caused by tighter digital privacy
regulations【Business challenges】


Acquire new customers by improving marketing efficiency
Realize both business scale expansion and profitability
improvement

11Current business conditions, challenges for each company (2)Vs FY2021
Vs FY2020

Wacoal Europe FY2022 sales

Vs FY2021
Vs FY2020

Wacoal China FY2022 sales

224

126
121

*For Dec, due to the temporary impactof financial results adjustments, the realbase is below the level of the previous
year and the year before that

122

107

100

164

97

142
131

131

121

100
May

Jun

Jul

110

Aug

Sep

Oct



Nov

Dec

Significant improvement in business conditions against the backdrop ofa strong recovery in consumer spending following the easing of COVID19 restrictions in major regions (UK, US, Europe)
Own EC in the UK is growing steadily【Business challenges】



85
86

Develop regions in Europe that have a small sales scale
Improve digital marketing (strengthen collaboration between
offline and online)

Apr

79

May

Jun

Jul

81

79
72

72

【Business conditions】


77

99

100

101

84

86
132

105

88

130

123

113

102

Apr

136

97

90

Aug

Sep

Octr

Nov

Dec

【Business conditions】


Store sales have been sluggish since July due to tightened restrictions
related to the COVID-19 pandemic
EC continues to struggle due to intensified competition from emerging
brands【Business challenges】


Realize EC growth once again by increasing brand awarenessStrengthen brand strategy (product development) for acquiring
middle-class customers

12Initiatives aimed at resolving issues
Globally accelerate digital transformation（Promotion of CX strategy) Improve the customer experience through store and online
integration
 Acquire new customers by strengthening digital marketing Develop loyal customers by strengthening data utilization and
CRM

Further cultivation of existing Asian market andprofitability improvement Realize further cultivation of the existing Asianmarket and improved profitability
・Rebuild Asian sales structure
・Expand EC in each market
・Acquire new customers (China, etc.)

Develop new markets
 Develop markets that have room for sales growth(Germany, India, etc.)

Overseas businessEC sales ratio after 10 years

Over 50％
Including client EC, specialized EC, and own EC sales)(excl. non-consolidated operating companies)*Specific figures, achievement timing, and three-year
strategy and plan figures will be disclosed when themedium-term management plan in announced in June.

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Strategies of major companies*Specific figures, achievement timing, and three-year
strategy and plan figures will be disclosed when themedium-term management plan in announced in June.

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Wacoal Europe

Trends in the
Women’s Innerwear MarketWacoal Europe
OverviewThe market size of Western Europe is about three times that of Japan. Pre-COVID, the growth rate was about
1% annually
The COVID-19 pandemic accelerated the closure of department and specialty stores
The number of retailers offering online services is increasing. Price competition is increasing in the EC market
Compared to other areas, there are many small manufacturers. As a result, each company’s market sharetends to be low.

Market share in each country is less than 1%.
Pre-COVID, growth was at the same level as the market
In addition to the economic recovery, as a result of people also using the online service of main channels(specialty stores, department stores), FY2022 sales have recovered to pre-COVID levels
Future issues include the development of our own EC channel in each region, and the development of regions
where the scale of sales is low

UK: Promotion of CX strategy using our own EC platform and 3D smart & tryStart rollout of automated measurements services in the UKImprove the customer experience in physical stores through new services and aim toincrease brand recognition and grow our own EC platform by strengthening offline
collaboration
Start rolling out directly managed stores in the UK in 2022Europe: Strengthen development of the German market, which has a lot of room for growth

Areas ofEnhancement
Going Forward

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Wacoal America


Trends in the
Women’s InnerwearMarketWacoal America
OverviewThe size of the market is more than three times that of Japan. Pre-COVID, the growth rate was about 3%
annually
The COVID-19 pandemic accelerated the shrinking of the physical store channel and accelerated the EC
expansion trend
The “body-positive movement” is changing the business structure of competitors(Decline in “Victoria’s Secret” market share, rise of D2C brands

Wacoal brand’s share of the US market is about 3%
Department store in-store share is about 20%
In 2010, Wacoal launched its own EC platform in the US. Since then, stable growth has been achieved
Also exporting to retailers in Brazil, Mexico, etc.

 Aim for EC-driven growth through active investment in “digital marketing” and “own EC platform”
・Improve CX through the utilization of “digital fitting” apps

Areas ofEnhancement
Going Forward
Measurement app

Questions about body shape

Product suggestions

・Increase EC sales ratio (medium- to long-term target: 70%) by improving website convenience and strengthening logistics

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Intimates Online (IO Inc.)
About IO Inc.

IO Inc.
Overview

Plans and sells innerwear and other products under the LIVELY brand nameAcquired in July 2019 with the aim of growing in the US market and capturing millennial customers
Develops products with a unique world view and distinctive digital marketing utilizing social media



Substantial growth in FY2021 due to the success of aggressive advertising investment against the backdrop of
the COVID-19 pandemic
Growth of own EC slowed in FY2022 due to soaring advertising costs and deteriorating marketing efficiency
caused by tighter digital privacy regulations
Started dealings with major retailer Target Corporation in February 2021







Areas ofEnhancement
Going Forward

Increase the number of ambassadors and customers by enhancing brand power through better marketing(Start establishing new advertising and promotional methods early to replace targeted advertising)
Aiming to achieve sales of $100 million, continue with aggressive investment to increase brand awareness forthe time being, while working to improve profitability in areas such as production, logistics, and inventory
management
Expect to break-even in March 2024, one year later than originally planned

Directly operated
LIVELY store（currently 4 stores)

Target, with whom operations
were started last year
(currently 400 stores)

17

Wacoal China
Trends in the
Women’s Innerwear
MarketWacoal China
Overview

Areas ofEnhancement
Going ForwardThe largest market in the world, about five times larger than the market size of Japan
Against the backdrop of an expanding middle class, market growth was over 5% annually prior to the COVID19 pandemic
A characteristic is the difference between the EC and physical store customer bases. In EC, emerging Chinese
domestic brands are gaining the support of the middle class through affordable products and strong marketing.

Market share is less than 1%
The share of the department store market is under 20%. There are several competitors, including local brands
In EC, which has been driving growth, positioning has declined due to the rise of emerging brands(Tmall accounts for about 90% of total 3 rd party EC sales)Strengthen development of brands and products that match the characteristics of customers and distribution
channels, and coordinate with CRM activities
Increase customers by strengthening the development of high-value-added products and enhancing thelinkage between physical stores and ECFoster loyalty among existing customers by strengthening CRM and data utilization
Implement a new product strategy to capture the middle class in the EC business
Regarding physical stores, strengthen directly managed stores by opening in malls and other locations inaddition to department stores

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Medium- to long-term vision (image 10 years form now)
【Operating income】¥3 billion

Business image
10 years hence

WacoalEuropeFY2022 forecast¥2 billion

Pre-COVID level

WacoalAmerica

Position businesses in Europe and the US as
growth drivers, aim for:
Sales for “Overseas Business”(excl. non-consolidated)
Sales of ¥100 billion and operating
profit margin of 10%(1) Wacoal America, IO Inc., and Wacoal Europe, aregrowing as corporate entities capable of generating
operating profit margins in excess of 10%, and serveas drivers for the overall overseas business¥1 billion

WacoalChina(2) Even Wacoal China, which has been struggling, willachieve renewed growth by making new efforts todevelop new customers for both its own and 3rd party
EC platforms

Asia(other)¥10 billion【Sales】
Intimates
Online¥20 billion¥30 billion(3) Work to re-expand the Indian market, which has
stagnated due to the spread of COVID-19, and to
expand our own EC presence in Asian countries toachieve growth*Specific figures, achievement timing, and three-year strategy andplan figures will be disclosed when the medium-term management
plan in announced in June.

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Information within this document with respect to future business performance
figures is based on Wacoal’s assumptions in the light of the information currently
available, but in no way guarantees or promises actualization or achievements
thereof. Furthermore, the information is subject to change without notice. Although
the information is published with the greatest care, our company will not take any
responsibility whatsoever regarding any error in the published information.

20