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, 2022

1

[Speaker]
Masaaki Yajima
Corporate Officer in charge of Group International Business;
Director and Corporate Officer and General Manager of Global Division of Wacoal Corp.

Today’s Agenda
1. Overview of overseas business
2. Current business conditions
3. Growth strategies for main companies

2

Yajima: Hello everyone. My name is Yajima. I used to be located in Hong Kong and China for 12 years. I may have met
some of you when I held a briefing session for investors in Beijing. Thank you for your time and presence today.
Let's start by looking at page two. This will be today's agenda. First, I would like to give an overview of our overseas
business, including our history, business model, and performance characteristics. Then, followed by a presentation on
current business conditions and growth strategies of major companies.
The specific target figures will be explained at the announcement of the new medium-term management planscheduled to be held in June. Today, we would like to deepen your understanding of our overseas business and explain
the direction we are aiming to take over the medium- and long-term, as well as the initiatives we are taking to achieve
this goal.
Also, representatives in the US and China are joining this briefing. In our daily dialogue with our customers, we hearfrom IR that there are many questions about the business environment in both countries. If you have questions, pleaseask us directly during the question-and-answer session.

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

Please see page three. First, let me explain the history of our overseas business. In the early 1950s, shortly after theCompany's founding, the founder Koichi Tsukamoto envisioned global expansion with the aim of becoming the Wacoalof the world, and in 1956 he made his first trip to Europe and the US.
After his overseas inspection, he set up a 50-year management strategy on a huge scale, which he called the "TenYear, One-Section, Fifty-Year Plan," and in line with this strategy, he made inroads into Thailand, Korea, and Taiwan
in 1970. The slide shows our company motto. We define the Wacoal of the world as the Wacoal Group's products andservices, or its efforts to address social issues, that are highly trusted by stakeholders in markets around the world.

Overseas business history (Sales trends of overseas businesses)¥40 billion

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

Achieved first singleyear profitability in
Wacoal America (1995)¥60 billion

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

Please see page four. The slide shows the changes in sales of overseas business since 1970. Initially, the Company
entered the Asian market as a joint venture, so sales in the overseas business didn’t grow until the 1980s, when it
expanded into the US and other countries.
In the US, we have been accumulating know-how one by one through repeated trial and error since 1985 and achieved
our first single-year profitability in 1995. Since then, the Company has grown steadily, gaining the number one shareof the department store market in 2005 and launching EC in 2010.
In addition to growth in US and China, the acquisition of the Eveden Group in 2012, the predecessor of Wacoal Europe,
accelerated growth in Europe, and by FY2016, overseas business sales had grown to exceed JPY50 billion.

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

15

Please see page five. This section summarizes the sales scale of our overseas business. The consolidated net sales do
not include the net sales of joint ventures in Thailand, Taiwan, Korea, etc. Today, I will explain the sales scale of theentire Wacoal Group as a reference figure.
In FY2021, sales in each country temporarily dropped significantly due to the coronavirus, so the figures shown here
are the ones from FY2020, which was less affected by the pandemic.
Overseas sales on the consolidated basis for FY2020 were JPY51.5 billion. The sales scale by region is JPY23 billion in
the US, JPY8 billion in Europe, and JPY20 billion in Asia including China. As for the scale of non-consolidated sales,
Thailand, South Korea, and Taiwan each have a sales scale of over JPY10 billion.
The Group's overseas sales, including those of unconsolidated joint ventures, are now in excess of JPY100 billion,
accounting for more than 40% of total sales. I have not had many opportunities to explain about unconsolidated joint
ventures, so today I took this opportunity to explain for your reference.

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

LIVELY brand offerings
Outsourced

Planning 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(excl. factories)

Independent
planning*Production outsourced
Developing unique marketing
using ambassadors

WacoalEuropeOther Asian
Subsidiaries*Production
outsourced

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

Please see page six. This section describes the business model for our overseas business. Like Wacoal in Japan, we arebuilding the vertically integrated business model in each region, taking care of everything from planning to sales inhouse, in order to manufacture and sell products that meet the needs of consumers in each country and region.
Body shapes vary greatly not only by generation and individual, but also by country and region. In order to provide
products and services that match the culture, customs, and preferences, the Group has established an integrated
manufacturing and sales system that is rooted in the local community, allowing us to respond flexibly to local trends
and customer needs.
As I mentioned earlier, I was in China previously, and I found that Chinese and Japanese people have very different
tastes, even though we are both Asians. The Chinese tend to like red and yellow, and the Japanese tend to like chiccolors. Also, shape of the body and breast are completely different, so I think that our marketing activities tailored toeach region, rather than trying to standardize everything, has played a successful role in Wacoal's campaign to date.
In addition, in terms of sales style, Europe and the US are different from Japan in that they do not have sales staff instore. This is related to the business characteristics that I will explain later.

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

Page seven. Here is the summary of the relationship between countries in charge of supply and production for ourGroup’s production system for your reference. The main plant for US business is in the Dominican Republic, and theplant for the European business is in Sri Lanka. By locating factories not only in China and the ASEAN region, but also
in Dominica, Sri Lanka, and other locations with easy access to US and Europe, we have built a production system thatcan respond quickly to customer needs and provide a stable supply.

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 red
8Please see page eight. This is an explanation of the performance characteristics of each major subsidiary, based on
the level before the pandemic. In this graph, the horizontal axis is net sales and the vertical axis is operating income.
The 45-degree line that runs between the two is the line that indicates an operating margin of 10%. US and Europe,
which are circled in blue in the upper right corner, are characterized by not only a large sales scale but also a relatively
high profitability with an operating margin of about 10%.
The ratio of fixed costs such as labor costs is low since sales staff are not stationed in stores in US and Europe, as I
explained earlier, resulting in high profitability.
Next, Wacoal in China, which is in the middle, has a certain fixed cost burden from stationing sales staff in stores likein Japan. However, the EC business continued to grow and absorbed the burden of fixed cost, that led to maintain aprofit margin of about 8%.
In Other Asia, which is circled in red in the lower left corner, the market for medium-to high-end products is still small,as well as business in each country. However, there are many markets with a large room for growth potential, such as
the Philippines, Vietnam, and India. As for IO, the company is still in the growth investment stage after the acquisitionand continues to incur losses.

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

484

519

FY2015

1061
861

531

498

FY20169.9%

FY20178.5%

FY2018FY2019FY2020

7.4%

8.6%

7.3%

6.8%

5.7%
5.6%

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

3.0%

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

FY2012FY2013

FY2014FY2021

6.3%
7.5%

5.1%

FY2011

414

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

5.9%


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%
FY2021

9

Please see page nine. This page shows the transition of sales and operating income ratio of the overseas business incomparison with the one of domestic. In terms of sales, the domestic business has been experiencing a downward
trend due to changes in distribution channels, while the overseas business has continued in a growth trend by
capturing market expansion and M&A. In terms of profit, we have secured the profit margin that exceeds our domestic
business, backed by high profitability in Europe and US.
On the other hand, from FY2020 onward, the trends in sales and profit margin of overseas business are changing due
to the prior investment in IO and the impact of the coronavirus, so we will explain the current trends on the following
pages.

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
Europe

2.7

China
−0.2

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

Europe
−1.2
China

Asia

−0.4 (other)

FX−0.5 impacts

±0

−1.5

US

FX
Asia
(other)impacts

3Q FY2022
cumulative
Operatingincome−0.1 ＋0.2

＋1.7

＋2.1

*In real terms excluding impacts such as temporary leaveand subsidies (actual result: -¥0.02 billion)

2.0(billion of yen)

10

Please see page 10. Here are the current trends. The waterfall chart from left to right shows the factors behind theincrease in operating income from the third quarter of FY2020, before the spread of coronavirus, to the current third
quarter of FY2021.
First, please take a look at the results for the third quarter of FY2021 in the center. As a result of sluggish performancein each country due to the impact of the coronavirus, operating loss on a real basis was JPY1.5 billion, excluding
furloughs, subsidies, and other government support measures.
On the other hand, the current fiscal year saw a certain recovery from the previous fiscal year, with operating incomeof JPY2 billion, backed by a strong recovery in the US and Europe. However, the level of operation income is half ofthe one in the third quarter of FY2019, due to the operating loss associated with investment in the growth of IO, a
newly consolidated subsidiary, and the decrease in income associated with the struggles of Wacoal China.

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
137

147
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

Please see page 11. In the next two pages, we will explain the current business conditions of our major subsidiaries
and the challenges they face. With a recovery in consumer spending in US after the coronavirus restrictions werelifted, the business in Wacoal America improved significantly, especially at brick-and-mortar stores.
On the other hand, the impact of inflation from high crude oil prices and rising labor costs has been expanding since
October, and we need to pay close attention to future trends.
The business challenge in US is how to maintain the growth of our own e-commerce business while the momentumof the economic recovery slows down. Another factor is to cope with the rising costs associated with soaring raw
material and transportation costs.
IO has seen a slowdown in the pace of growth in the current fiscal year, comparing to the same period of the previous
fiscal year when the aggressive advertising during the pandemic was successful. This is due to soaring advertising costs
associated with the economic recovery and deteriorating marketing efficiency caused by tighter digital privacy
regulations, which brings more challenges in this fiscal year.
Under these circumstances, challenges of IO are to acquire new customers by improving marketing efficiency, toexpand the scale of business and improve profitability by continuing to invest in growth.

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

Wacoal Europe FY2022 sales

Vs FY2021
Vs FY2020

Wacoal China FY2022 sales

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

224

107

100

164

97

142
131

131

102

121

May

Jun

Jul

Aug

Sep

Oct



85
86

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

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

Apr

May

Jun

Jul

81

79

79

72

72

【Business challenges】



77

110

【Business conditions】


84

86
132

99

100

101

88

130

123

105

100
Apr

136
113

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

Please see page 12. Wacoal in Europe has improved significantly with a strong recovery in consumer spending in theUK, the US and Europe, our major regions. In addition to the physical stores, we are also seeing steady growth in our
e-commerce business in the UK.
As for business challenges, we need to continue working with some countries like Germany, where we see a lot ofroom to grow but the sales are still small. Another example is the enhancement of offline and online collaboration
through the improvement of digital marketing capabilities.
As for the business situation of Wacoal in China, it remained sluggish at physical stores due to the tighter coronavirus
restrictions since July. As for the EC, it also continued to struggle as emerging brands increased their presence. In thissituation, the business challenges for Wacoal in China will be to achieve renewed growth in EC by expanding brandrecognition and to strengthen its brand strategy to capture the expanding middle class.
As for the performance of major subsidiaries against the plan for the current fiscal year, Wacoal America and Europe
are performing above the plan, while IO and Wacoal in China are performing below the plan.

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.

13

Please see page 13. This section summarizes the direction of medium- to long-term initiatives to address issues in theoverseas business. The first is to accelerate DX on a global scale. By developing our unique services that integrate
offline and online, we will improve the customer experience by differentiating ourselves from our competitors andincrease the recognition of our brand in each country's market.
We will also strive to improve the LTV of our customers in each country and region by working to strengthen our
digital-based marketing to attract new customers and turn existing customers into loyal customers. In addition, weare targeting 50% of EC sales for the entire overseas business.
The second is to deepen the existing Asian markets and improve profitability. We will achieve sales expansion andprofitability improvement by redeveloping the sales system and expanding EC reflecting the characteristics of the
Asian market, as well as striving to improve the efficiency of our business. We will also strengthen our productdevelopment in order to attract middle-class customers.
The third is to develop new markets. The size of our business tends to be proportional to the size of the middle class
population in the market. Like Germany and East India, there are markets where the middle-class population is large,
but our sales scale is still small. These markets are having a lot of room to grow for future sales expansion. We will
aim to grow in these markets, including through M&A.

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.

14

Please see page 14. I will now explain the strategies of each of our major subsidiaries, along with market trends andsuch.

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

15

Please see page 15. First, let me explain about Wacoal in Europe. The women's innerwear market in Europe is about
three times the size of the Japanese market, especially in the Western European region, and has been growing at therate of about 1% annually until the spread of the coronavirus. In addition, there are many small manufacturers present
without a big brand in Europe. The market share of each company is smaller compared to the other markets worldwide.
In terms of sales channel trends, the market has become more intense and competitive, not only by bankruptcies indepartment stores one after another but also an accelerated shift to EC and online service in tandem with retail stores.
One of the points that I would like to strengthen in the future is the promotion of CX strategy using our own EC and3D smart & try developed in Japan. Last year, we conducted a test marketing campaign for 3D smart & try in the UK
and got a great response. In the European region, where people rarely measure their own body shape, we plan to
introduce an automatic body measurement service to expand the recognition of our brand.
As for 3D smart & try, we are planning to introduce it in our company-owned stores in the UK in 2022. We plan to roll
it out in other countries accordingly. At the same time, we will continue to develop the German market, which haslarge room for growth.

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

16

Please see page 16. Mr. Kawanishi and Mr. Tsujimoto will explain the business strategies for the US and China. First,
let's look at the strategy for the two US companies. Please, Mr. Kawanishi.
Kawanishi: Good morning, everyone. My name is Kawanishi. I will now explain our business in the US. First of all, thewomen’s innerwear market in the US is about three times larger than the Japanese and was growing at about 3% peryear until the spread of coronavirus.
Victoria's Secret was the dominant player in this market for a long time, but in the past few years, trends shifted into
body positivity and body neutrality. With the trend shift, we see change in customer sympathy, and we are working
to respond to it.
In terms of sales channels, there has been the trend of shrinking in physical retail shops and expanding in e-commerce
for some time. This trend is accelerating in the wake of the coronavirus. We assume that the market share of the
Wacoal brand in the US is about 3%. Our in-store market share in the department store, where we have built ourbrand position over the years, is as high as 20%. We see that our brand values of best fit and high quality are supported
by many customers.
We have also been able to catch up with the shift to e-commerce early on, with launching our own EC in 2010, as
mentioned earlier. Because of this, we have been able to respond to the current rapid acceleration of the shift to ecommerce.
The future enhancement point of Wacoal America is to realize the growth of own EC by strengthening digitalmarketing. By aggressively investing in digital marketing, we will aim to grow mainly through e-commerce.
To strengthen our EC, we introduced mybraFit, a digital fitting app, in May last year. With this app, we can provide
the products that are the most suitable to customers’ needs through body measurements on smartphones.
In addition to the decrease in the number of store visits due to the coronavirus, it is not common to have an in-person
service to figure out one’s body shape and sizes of underwear while shopping at retail stores in the US, so we believethat an enhancement of this app will improve customer satisfaction.
We will keep improving the accuracy of the app as we see the number of visitors to our EC site and the average ordervalue tend to increase after the launch of the app. As we continue with these efforts, we hope to increase our ecommerce ratio from the current 40% to 70% in the long term.

In addition to strengthening the marketing side, we are also strengthening other systems such as logistics that will
support future e-commerce growth.

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)

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Please see page 17. Next, I would like to explain about Intimate Online, Inc. Lively is IO’s brand, which is mainly
supported by Generation Z and millennials for its unique product lineup and distinctive digital marketing using social
network services.
We acquired IO in July 2019 with the aim of achieving sustainable growth in the US and attracting customers from
Generation Z and Millennials. Since the acquisition, we have been able to achieve high growth despite in the pandemic,
by investing in advertisement aggressively.
However, in the current fiscal year, we have entered to the adjusting stage, as the growth speed of our EC has slowed
down, partly due to soaring advertising costs and deteriorating marketing efficiency caused by tighter digital privacy
regulations.
As for the points to work on for the future, we will continue to invest aggressively in marketing to enhance our brandpower, and work to expand sales by acquiring new customers. At the same time, we will strive to improve
management efficiency by demonstrating synergy with Wacoal America, in terms of production, logistics, etc.
We are currently examining new methods of advertising sales promotion to replace targeted advertising, and planningto establish it as soon as possible. Due to the decline in marketing efficiency, we plan to achieve break-even in FY2024,
one year later than originally planned, but we will continue to steadily evolve our business.
In the next three-fiscal year plan, one of the goals is to achieve USD100 million in sales, and after that, we plan toswitch its marketing focus from acquisition to retention in order to improve profitability significantly. This is the endof my presentation on the US business.

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

18

Tsujimoto: Now, I will explain about the situation in China. Please see page 18. First, the women's inner wear market
in China is the world's largest market, about five times the size of the Japanese market. With the expansion of the
middle class and other factors, the market growth rate continues to be high, exceeding 5% per year.
One of the characteristics of the market is that the customer base is different between physical stores such as indepartment stores and e-commerce. Also in the EC market, emerging Chinese domestic brands are rapidly increasing
their presence amidst the pandemic, with affordable prices and strong marketing.
In such a market, although Wacoal in China has a certain share of about 20% in department stores, the overall market
share is less than 1% in China, and our brand recognition is low. In addition, we recognize that our positioning in EC,
where the core of purchasing is from the middle-class people, is gradually declining, and we recognize this as achallenge.
The key point for future enhancement will be to strengthen the development of brands and products that meet thecharacteristics of customers and distribution channels. We will continue to strengthen the development of high valueadded products, which is one of our strengths, and at the same time, we will work to acquire new customers and turn
existing customers into loyal customers by collaborating online and offline and strengthening our CRM strategy.
In addition, we will aim for renewed growth by developing a new product strategy based on customer characteristics
to capture the middle-class. As for retail stores, we plan to strengthen in opening of company-owned stores at malls
and such, in order to expand our contact with the middle-class, not only department stores which mainly target
wealthy people. That was my presentation about our business in China.

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.

19

Yajima: Now let's go to the last page, page 19. Finally, this is our vision for the 10-year range for each business overseas,in comparison with the current situation. The filled circles are the pre-pandemic levels. The white circles are theprojected levels for the current year, and the white squares are our image of 10 years in the future.
We have set a long-term target of JPY100 billion in sales and an operating margin of 10% for our overseas business asa whole, and we are continuing to lead the growth of the Wacoal Group. For Wacoal America and Wacoal Europe, wewould like to maintain operation margin of 10% as standard, and we hope to achieve top-line growth while using EC
growth as a driver, which is enhanced with digital marketing.
For IO, we are also targeting an operating margin level of 10% in the medium to long term. As for Wacoal in China,
which continues to struggle at present, we will achieve renewed growth and improved profitability by working todevelop prospective customers in our own EC and as well as with others. In other Asian regions, in addition todeveloping the East Indian market, we will strive to expand our own EC in the area. The specific figures and timing ofachievement, as well as the strategies and plans for the next three years, will be disclosed in June, when the mediumterm management plan will be announced. Thank you very much for your attention.
Komatsubara: That's all for our presentation.

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.

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