Wacoal : FY2024 Second Quarter Business Presentation (Transcription)

1. Review of Medium-term Management Plan

• The changes in the external environment were quicker than expected, and weaknesses in our supply chain management have become apparent
• Under the new management system, we will thoroughly review the strategies of the medium-term management plan
• In order to shift to a structure that can steadily generate cash, we will start business model reforms

■Policies of Revised Medium-Term Management Plan

Period：FY2024～FY2026 （The previous medium-term management plan will be postponed by one year.）

3. Introducing ROIC management that supports measures to enhance profitability and the effectiveness of strategies

Please see page 3. Firstly, I will explain our revised medium-term management plan.

As announced on May 19, we have reviewed the medium-term management plan due to the results for the previous year, the first year of the medium-term plan, falling substantially short of the plan. In order to shift to a structure that can secure high cash generation ability even in the midst of drastic changes in the external environment, we repeated discussions under the new management system and drastically revised our current strategies.

Under the new medium-term management plan, we will implement business model reforms to improve profitability, growth strategies to achieve VISION2030, implement ROIC management, and reduce assets. We will steadily improve profitability, capital efficiency, and the effectiveness of our strategies by promoting business model reforms and strengthening management systems. Please check the separate explanatory materials for the revised medium-term management plan on our website. A video explaining the aforementioned materials will be posted on the Company's website on November 21.

1. Implementation of Structural Reforms and Temporary Recording of Structural Reform Expenses

• As part of the medium-term management plan (revised), Wacoal will implement cost structure reforms to improve profitability and achieve sustainable growth
• Temporary structural reform expenses (approximately ¥6 billion) expected to be recorded in FY2024

■Summary of Major Cost Structure Reform

Please see page 4.

This page describes the main items of the structural reforms of Wacoal Corp. to be implemented as part of the revised medium-term management plan. You can also view this section on our website.

We concluded that we need to implement very tough reforms in order to restore Wacoal's profitability, which continues to suffer from sluggish sales. In particular, in the new medium-term management plan period, we will steadily carry out the structural reforms described above and shift to a profit structure that enables us to continue investing for growth toward achieving "VISION2030." In relation to the implementation of structural reforms, temporary structural reform costs of approximately 6 billion, including inventory disposal and voluntary retirement, will be recorded in the current financial year's results.

1. Impairment Loss on Goodwill Related to Wacoal International (U.S.)

• Decision of the withdrawal from the LIVELY business of Intimates Online, Inc., Wacoal International (U.S.)'s subsidiary, and liquidation of the company
• ¥ 7.43 billion of impairment loss on goodwill was recorded in the second quarter results for FY2024

■Summary

Please see page 5.

Next, I will explain the recording of impairment losses related to our U.S. business. In the process of forming the revised medium-term management plan, we have discussed the issue of dealing with unprofitable businesses. As a result, we have decided and resolved to withdraw from the LIVELY business owned by Intimates Online (hereinafter, "IO"), a subsidiary of Wacoal International that is responsible for the U.S. business, and liquidate the Company. We recorded an impairment loss in our U.S. business last year for the second year in a row.

IO is a company acquired by Wacoal International in 2019 to grow the Group's EC business in the U.S. and strengthen its competitiveness. Since the acquisition, we have worked to achieve business growth by using the Group's business foundation and strengthening IO' s digital marketing expertise. However, the business environment worsened more than expected due to the entry of competitors into the digital market and tightening of regulations on targeted advertising due to heightened restrictions on the use of personal information, and performance was significantly lower than expected at the time of the acquisition. Under these circumstances, we have considered various possibilities for future business development. However, we have determined that it will be difficult to improve our business performance in the future, and have decided to withdraw from the business. As a result of the withdrawal from this business, approximately 7.4 billion was recorded in the second quarter results including impairment losses on goodwill.

1. Revision of Consolidated Earnings Forecasts for FY2024 and Target Values for Medium-Term Management Plan (Revised)

• Revision of earnings forecasts disclosed on May 12 due to the impact of structural reform expenses and impairment losses associated with the withdrawal of subsidiaries, in addition to sluggish sales in all major regions
• Through the implementation of the medium-term management plan (revised), we aim to improve the

effectiveness of management and recover business performance

Please see page 6.

We will revise down our full-year earnings forecast announced on May 12 significantly, reflecting the impact of structural reforms in accordance with the revised medium-term management plan and the recording of impairment losses due to the withdrawal of our U.S. business, in addition to sluggish sales in major regions. As a result, we expect to record a loss for the second consecutive fiscal year. We have caused a great deal of concern to our shareholders and other stakeholders, and we take this matter very seriously. We apologize for that.

In forming the revised medium-term management plan, we discussed with newly appointed outside directors and external consulting services to consider measures to improve earnings without establishing sanctuaries. We will focus on rebuilding management by speeding up reforms without being bound by past constraints.

In accordance with the revision of the medium-term management plan, we have set the final year of the plan to FY2026, postponed by one year from the original plan. The numerical targets for the final fiscal year are shown in the table in the bottom right. In light of the harsh external environment, sales revenue and profit items are below the initial plan. However, we aim to achieve the ROE target of 7%, which is higher than the initial plan, by advancing initiatives to improve capital efficiency and profitability.

We expect our cost of equity to be in the 6% level, as detailed in the revised medium- term management material. By achieving the ROE target described above, we will resolve our long-term issue of less than 1x PBR during the revised period of the medium-term management plan.

Executive Summary for FY2024 2Q (Jul-Sep)

Please see page 8. These are the results for the three months of the second quarter.

In addition to the continued harsh business environment in Japan and overseas over the past three months, the temporary suspension of shipments due to the unauthorized access that occurred in Wacoal Europe also added to the decline in sales. As a result, sales revenue decreased 4.4% YoY to 46.3 billion. Business profit decreased 26.5% YoY to

• 1.4 billion due to the impact of lower sales and higher cost of sales ratio. The operating loss was 6.1 billion due to lower business profits and the aforementioned impairment loss on the U.S. business as a result of the withdrawal from IO and liquidation of the company. The three-month trends in major countries will be explained on the following pages.

FY2024 2Q(Jul-Sep): Business Conditions at Major Subsidiaries（Japan）

9

Please see page 9. This page describes the business conditions of major subsidiaries over the last three months.

First one is Wacoal and Peach John in Japan. While EC sales increased both in Wacoal and at other companies, the physical store channel, which was expected to recover, declined due to increased selective consumption due to rising prices, and sales of mainstay products such as "Wacoal" and "Wing" declined. Brand sales remained sluggish, and cumulative sales revenue for three months was lower YoY.

Peach John sales remained sluggish as in the first quarter due to sluggish sales of new products and sluggish growth in the number of visitors to the EC site.

FY2024 2Q(Jul-Sep): Business Conditions at Major Subsidiaries（US)

10

Please see page 10. Next, I will talk about the business conditions of Wacoal and IO. Sales at Wacoal in the U.S. declined due to sluggish sales in the mainstay wholesale channel due to continued purchasing control by business partners.

At IO, as a result of limited sales promotion investments to improve profitability, the number of visitors declined significantly, resulting in a significant decline in revenue.