プレミアアンチエイジング（4934） – FY2022 2Q Results Briefing Material

FY2022 2Q２０２２・３・１４Premier Anti-Aging Co., Ltd.FY2022 2Q ResultsINDEX010203040506EXECUTIVE SUMMARYBUSINESS HIGHLIGHTSSTATUS BY BRANDSTATUS BY SALES CHANNELINITIATIVES FOR 3Q AND BEYONDAPPENDIXCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.2０１ EXECUTIVE SUMMARY*Premier Wellness Science Co., Ltd. established in FY2021 2Q and Beianmei (Shanghai) Cosmetics Company established in FY2021 3Q have been included in the scope of consolidation. Results before FY2021 1Q referenced in this document refer to those of only Premier Anti-Aging Co., Ltd. whilst FY2021 2Q results include those of the abovementioned two companies, and comparisons described herein are between Premier Anti-Agent’s stand-alone figures and consolidated figures. Moreover, sales in China have been calculated based on the following exchange rate: 1 Chinese yuan = 18.13 yen.Executive Summary Factors that led to curtailed ad placement in 1Q were gradually resolved in 2Q, thus we saw strong mail Order/EC sales. DUO’s Wholesale was higher than the same quarter previous year, although it decreased from the previous quarter due to the reaction to the increase in shipments as a result of the product layout change at retail outlets and because the demand for Black Balm has slowed down. Canadel performed well due to new TVCMs that aired from October and coordinated web marketing initiatives. We saw record high Mail Order/EC net sales and monthly sales nearly reached 400 million yen. Net sales was higher than the same quarter previous year, but SG&A temporarily increased (especially Consignment and Others). Operating profit was lower than the same quarter previous year. We will launch a hair care brand (clayence) in March and men’s cosmetics brand (DUO Men) in April 2022. We were ranked 2nd, with a high score of 20.0 among all Japanese cosmetics companies in the Sustainalytics’ ESG Risk Ratings.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.4０２ BUSINESS HIGHLIGHTSBusiness HighlightsP&L Statement (YOY) Net Sales grew YOY in all channels. SG&A increased temporarily, thus the operating profit was lower than the same quarter previous year. FY20211Q-2QFY20221Q-2QIncrease/ DecreaseYOYUnit: Millions of YenNet Sales15,31017,970＋2,659117.4％ＬMail Order/EC10,53712,397＋1,860117.7％4,4363362,4614,9236482,248＋486111.0％＋312192.7％△21391.3％16.1％12.5％△3.6ptOrdinary Profit2,4542,321△13294.6％1,5731,360△21286.5％ＬWholesaleＬOthersOperating ProfitOperating ProfitMarginNet Income for the Quarter Attributable to Owners of the ParentCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.6Business HighlightsSG&A (YOY) Factors that temporarily curtailed ad placement in 1Q were gradually resolved, thus 2Q investments were SG&Astrong. We invested in systems to strengthen our business foundation and ＬConsignmentＬAdvertising & Promotionaccelerated spending for recruiting and training, thus Consignment and Others increased. Investments overseas, including ＬSalaries & AllowancesＬR&Dincrease in SG&A, however, we will rein in future investments until we finalize a new strategy for overseas expansion. FY20211Q-2QFY20221Q-2QUnit: Millions of YenIncrease/ DecreaseYOY9,8885,9132,2262786712,251＋2,362123.9％6,5233,015497194＋610110.3％＋788135.4％＋218178.2％＋127288.3％China, have also contributed to the ＬOthers1,4022,020＋618144.1％Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.7Business HighlightsAdvertising and Promotional Expenses (YOY)(Millions of Yen)20,000YOY117.4%17,970 15,310 Factors that temporarily curtailed ad placement in 1Q were gradually resolved and new customer acquisition costs (CAC) increased against net sales (Net Sales vs CAC was 15.3% in 1Q). Of the Advertising and Promotional Expenses, “Others” rose due to the increase in promotional costs from changes in fixtures, etc. for the new face wash series and investment in ads for overseas businesses. 17,50015,00012,50010,0007,5005,0002,5000Net Sales vs Ad Spend38.6％ ⇒ 36.3％(-2.3pts)Net Sales vs Customer Acquisition Costs26.0％ ⇒ 20.8％(-5.2pts)YOY110.3%6,523 OthersTVCMCACAgainst Net Sales20.8%Against Net Sales36.3%FY20221Q-2Q5,913 OthersTVCMCACAgainst Net Sales38.6%Against Net Sales26.0%FY20211Q-2QNet Sales売上高Ad Spend広告宣伝費Net Sales売上高Ad Spend広告宣伝費Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.8Business HighlightsP&L Statement (QonQ) Mail Order/EC performed well, but QonQ net sales of Wholesale decreased due to sluggish sell-through. Spent the ad budget remaining from 1Q in 2Q. In addition, SG&A such as Consignment temporarily increased, thus the operating profit decreased QonQ. FY20212QFY20213QFY20214QFY20221QFY20222QUnit: Millions of YenNet Sales8,0998,4559,0499,8658,10482.2％Gross Profit*6,6686,8877,1927,9246,57583.0％SG&A5,0954,9216,9405,8496,401109.4％ＬAdvertising and Promotional Costs of the SG&A3,0142,7014,1972,9503,572121.1％Operating Profit1,5731,9662522,0741738.4％((% = comparison against FY2022 1Q)Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.9*In FY2021 we provided Gross Profit – Net figures.Business HighlightsP&L Statement (vs. Business Forecast) New customer acquisition for Mail Order/EC is recovering and the increase in SG&A mainly due to increase in Consignment costs is temporary, thus we expect to finish OperatingProfitthe full year on track. 2Q Results vs. Business Forecast Achievement RateFirst half forecast19.0 bilFull year forecast40.0 bilNet SalesOrdinaryProfitNet Profit17.9 bil44.9%(94.6%)2.2 bil37.5%(86.5%)2.3 bil38.6%(89.0%)1.3 bil39.3%(88.9%)2.6 bil6.0 bil 2.6 bil6.0 bil1.5 bil3.4 bilPercentages shown in ( ) refer to the achievement ()内は上半期業績予想進捗率rate against the first half forecast Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.10Business HighlightsBalance Sheet (Comparison Against End of FY2021) Once again, our fixed assets only amounted to approximately 4% of our total assets, thus we are continuing to practice asset-light management.FY2021FY20222QIncrease/ DecreasePercentage Increase13,07113,689＋618104.7％Unit: Millions of Yen12,47913,055＋575104.6％5916,1685,5915766,9036345,4245,008＋42107.3％△743△58388.0％89.6％416△16072.2％8,265＋1,362119.7％13,07113,689＋618104.7％Total AssetsＬCurrent AssetsＬFixed AssetsTotal liabilitiesＬCurrent LiabilitiesＬFixed LiabilitiesTotal Net AssetsTotal Liabilities and Net AssetsEquity Ratio52.8％60.4％＋7.6ptCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.11０３ STATUS BY BRANDBrand Introduction We currently offer 4 cosmetics brands. Our key and inaugural brand.Pioneer in the cleansing balmmarket and continuesto drive sales. Launched in February 2010. Currently have 27 SKUs.*1 Sales CompositionRatio＊287％ Nurturing as the second brand after DUO. Focuses on shortening time required for skin care to address needs of busy modern women. Launched in April 2019. Currently have 6 SKUs.*1Sales CompositionRatio＊212％ Cosmetic brands for sensitive skin with cica*3 substance in every product. Has been introduced to the Chinese market. Launched September 2020. Currently have 13 SKUs.*1 An SDG-conscious organic cosmetics brand that promotes sustainable development. Launched in October 2020. Currently have 8 SKUs.*1*1: SKU numbers refer to the number of regular products as of end of January 2022. Limited editions, different sizes not included. *2: Calculated based on FY2022-2Q net sales. *3: Cica refers to the substance extracted from the plant, Centella asiatica.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.13DUO Brand Monthly Net Sales(Millions of Yen)3,500DUO Monthly Net SalesMail Order/EC Wholesale Others Mail Order/EC continues to grow strongly, mainly around Black Balm. Sell-through was sluggish for Wholesale due to the reaction to the increase in shipments in 1Q as a result of the product layout change at retail outlets and because the demand for Black Balm has slowed 1,500down.3,0002,5002,0001,0005008910 11 1212345678910 11 1212345678910 11 1211Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2020FY2021FY2022Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.14DUO Cleansing Balm Monthly Shipments(10,000 units)DUO Cleansing Balm Shipments Per ItemCloser look at Mail Order/EC234567891011121706050403020100OriginalClearWhiteBarrierBlackOthers6M moving average Wholesale shipments this quarter decreased due to the reaction to the increase in shipments in 1Q as a result of product layout change at retail outlets. Supported by the subscription business model, total shipments for Mail Order EC remained strong despite changes in the product mix to Black Balm.1601401201008060402008910 11 1212345678910 11 1212345678910 11 1211Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2020FY2021FY2022Note: For accounting reasons, shipments for some transactions and the timing when the relevant sales was booked do not match up.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.15Canadel Monthly Net Sales(Millions of Yen)600CANADEL Monthly Net SalesMail Order/ECWholesaleOthers Canadel performed well due to new TVCMs that aired from October and coordinated web marketing initiatives. We saw record high Mail Order/EC net sales and monthly sales nearly reached 400 million yen. 50040030020010008910 11 1212345678910 11 1212345678910 11 1211Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2020FY2021FY2022Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.16０４ STATUS BY SALES CHANNELNet Sales by Channel(Millions of Yen)12,000 Factors that curtailed new customer 10,000acquisition efforts in 1Q were gradually resolved in 2Q, thus Mail Order/EC performed well. Sell-through was sluggish for Wholesale due to the reaction to the increase in shipments in 1Q as a result of the product layout change at retail outlets and because the demand for Black Balm has slowed down.8,0006,0004,000Trends in Net Sales by ChannelMail Order/ECWholesaleOthers (including sales by overseas subsidiary)35%25%18%27%33%71%64%70%62%78%lWhoesaelMail Order/EC32%21%76%67%23%18%17%22%2,00013%13%82%76%81%75%21%76%85%85%0Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.181Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2019FY2020FY2021FY2022Trends in Customers Who Subscribe to MoreThan 2 Products and the Relevant Ratio(People)100,000(Left axis)(Right axis)Customers who subscribe to moreRatio of customers who subscribe to morethan 2 productsthan 2 productsStatus by Sales ChannelMail Order/EC (Promoting Cross Selling Initiatives) With the recovery of new customer acquisition, we saw an increase in customers who subscribe to more than 2 products as well as a ratio of customers who subscribe to more than 2 products. Product appeal90,00080,00070,00060,00050,00040,00030,00020,00010,000014.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%Sales capabilityNew brand launchAreas we will strengthen to improve cross selling89 10 11 12 123456789 10 11 12 123456789 10 11 12 11Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2021* Customers who subscribe to more than two products refer to customers who have subscribed to products in more than two categories (balm and beauty essence, etc.) FY2022FY2020Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.19Total Number of MembersStatus by Sales ChannelMail Order/EC (Total Number of Members) The impact from the change in advertising laws that led us to curtail new customer acquisition in 1Q gradually dissipated in 2Q, thus total number of members grew strongly. (People)3,500,0003,000,0002,500,0002,000,0001,500,0001,000,000500,000011110008910 11 1212345678910 11 1212345678910 11 1211Q2Q3Q4Q1Q2Q3Q4Q1Q2QFY2020FY2021FY2022Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.20Stores that Carry Our Products* & Number of Items Shipped per Store1～3SKUs4～6SKUs7SKUs or more1SKUs2SKUs3SKUs4SKUs or moreStatus by Sales ChannelWholesale (Shipments) Shipments of DUO’s face wash series increased in 1Q, and the DUO line-up grew to more than 7 SKUs, however in 2Q shipments mainly focused on cleansing balm. TVCMs contributed to the increase in number of stores that carried more than 2 SKUs of Canadel. Initiatives to drive sales are steadily making headway. (Stores)18,00016,00014,00012,00010,0008,0006,0004,0002,0000(Stores)18,00016,00014,00012,00010,0008,0006,0004,0002,00002Q3Q4Q1Q2Q2Q3Q4Q1Q2QFY2021FY2022FY2021FY2022*Until FY2021, we counted the number of stores that are selling these products within the relevant period. Above data represents the number of stores to which we shipped our products within each quarter. *Only regular products, limited editions excluded.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.21ESG Initiatives We were ranked 2nd, with a high score of 20.0 among all Japanese companies in the cosmetics industry by Sustainalytics’ ESG Risk Ratings. Sustainalytics’ ESG Risk Ratings for Japanese Cosmetics CompaniesプレミアアンチエイジングPremier Anti-AgingA社Company AB社Company BC社Company CD社Company DE社Company EF社Company FG社Company GH社Company HI社Company I17.020.026.826.927.732.633.334.037.741.10.05.010.015.020.025.030.035.040.045.0*The industry was defined by SPEEDA and has been extracted based on Consumer Goods → Personal Care → Cosmetics and Retail → Mail Order/Door-to-Door Sales → Mail Order/Door-to-Door Sales (Cosmetics).Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.22０５ INITIATIVES FOR 3Q AND BEYONDInitiatives for 3Q andBeyond03ESG Initiatives02Strategies for 3 New Key Categories 01Canadel’s Promotional InitiativesCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.24Initiatives for 3Q andBeyondCanadel Promotional Initiatives Canadel is well recognized in the market, but the level or recognition varies depending on the region. We will continue to expand our presence by focusing on the main target, the metropolitan area, and adding other regions to our target. Canadel’s Recognition by Region1位Region 2位AwarenessKinkiKantoHokkaidoChubuTohokuChugokuKyushuShikoku43.0%41.0％40.4%37.1％36.8%32.0%31.0%10.6％TargetTVCMs＆01Canadel has potential to grow outside the metropolitan areaRetail Promotions(Ito-Yokado Shinyurigaoka store)Macromill “CANADEL February 2022 TVCM Research Summary”; 30-59 year-old women nationwide who took part in the web survey (women x by region x not working in non-relevant sectors)Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.25Initiatives for 3Q andBeyondCanadel Promotional Initiatives We will launch the Canadel “Premier Barrier Fix” as a whitening x wrinkle care quasi-drug in April 2022. Because it is a quasi-drug, we will be able to use expressions that directly make references to the effect of the product. Appeal how dipotassium glycyrrhizinate suppresses inflammation and promotes prevention of rough skinFurther strengthen both our product appeal and ability to make proposalsAppeal how niacinamide whitens and improves wrinklesAll-in-one product with a mixture of 2 active substances01CosmeticsQuasi-drugExpressions regardingwrinkle improvement・Makes skin supple ・Makes tiny creases due to dryness less visible▶ ・Improve wrinklesExpressions regardingwhitening・Transparency▶・Whitening・Prevents blemishesCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.26Initiatives for 3Q andBeyondStrategies for 3 New Key Categories Brand launch in late AprilBrand launch on March 22 Drawing on our know-how of nurturing new brands proven with Canadel (Canadel sales grew to 4 billion yen in size in 2 years) we will launch 3 new key categories one after the other. 02Men’s CategoryHair Care CategoryCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.27Coming SoonBrand name: To be unveiled immediately before launchConcept: To be unveiled immediately before launchCore substance: CBD(Cannabidiol)Co-developed with: Showa UniversityWellness, a Rapidly Growing MarketWhile staying true to DUO’s brand concept -“Beauty is reborn from skin care” – we took a close look at skin problems and damage men are experiencing from an ecological, bioscience point of view. We want to offer effective skin care that only involves a few easy steps so men who lead busy lives can continue skin care in an enjoyable Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～DUO MEN～ We will launch a new men’s cosmetics category by capitalizing on DUO’s high brand awareness. With this new line, we will way.help solve men’s skin problems with a few easy steps, so that men who lead busy lives can continue skin care in an enjoyable way. 02Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.28Men’s Cosmetics Market Trends1,608 1,389➔1,60816%UP(2017-2022)1,506 Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～DUO MEN～ The men‘s cosmetics market is estimated to grow to 160.8 billion yen in 2022, growing 16% in comparison to 2017. This market is expected to grow further. (100 Million Yen)1,6501,6001,5501,5001,4501,4001,3501,3001,2501,389 0220172018201920202021(Expected)2022(Forecast)Source: Fuji Keizai “Cosmetics Marketing Handbook 2021 No.2”. Men’s cosmetics market includes: men’s shampoo/conditioner, men’s styling products, men’s scalp care, men’s shaving products, men’s face wash, men’s skin conditioner, men’s body care products. 2021 figure is the expected market size, 2022 figure is the forecasted market size. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.29Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～DUO MEN～ Men are hesitant to use cosmetics because they “Don’t know what to do”, “Skin care is tedious”, or they “Don’t feel the need”. Key reasons why men hesitate using cosmeticsWomen’s view of men with clogged pores Many men do not feel the need however, many women want men to take better care of their skin. Skin care is tediousDon’t know what to doDon’t feel the needClogged pores leave a negative impression92%02Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.3092% of women answered that clogged pores leave a negative impressionSource: Based on our research. Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～DUO MEN～ DUO cleansing balm is multi-functional. Drawing on this feature, we will target men who “Don’t know what to do”, who feel “Skin care is tedious”. Brand positioning of the men’s cosmetics marketCleansing BalmLowpriceBHigh priceAll-in-One LotionMulti-functionACDESingle functionCleansingTreatmentMassageExfoliatingFace washMoisturizerEssenceShiny skinTransparencyConditioning02Source: Based on our independent research. 1. Price mapping is based on research of the sales prices of other companies’ products. 2. Mapping of functions is based on research of other companies’ product functions. 3. Size of circles are based on other brands’ sales data. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.31Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～clayence～ With our unique clay spa method, we developed a clay spa inspired new hair care brand that allows people to enjoy coloring their hair while treating their hair and scalp. Dying gray hair is thought to be something that “older people do”. We want to transform this perception to something positive and offer hair care that people can feel positive about even from within. 02Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.32By combining the power of clay and cutting-edge science, we created a clay spa inspired hair care brand that provides hair and scalp treatment and colors gray hair. In addition to carefully selected clay and beauty substances, the calming aroma will transform tedious hair care into luxurious time at the spa. Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～clayence～ There are many concerns about scalp and hair care, however gray hair is number one amongst all 30 and above age groups. 69% of respondents said that they would like to dye hair as part of their day-to-day hair care. And the household hair color market is expected to be 90.3 billion yen in 2021. 02Future concerns about scalp and hair*1Want to dye hair during day-to-day hair care*1#12位#2Hair lossGray hair3位#3Damaged hairGray hairHair lossThin hairGray hairDry hairHair lossGray hairThin hairNo volumeGray hairThin hairNo volumeGray hairNo volumeThin hair20s30s40s50s60s70sWant to dye hair during day-to-day hair care69%Household hair color market90.3 bil yen (2021, expected)*2Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.33Sources: *1. Based on our research on dying gray hair (n=449). *2. Fuji Keizai “Cosmetics Marketing Handbook 2021 No.2”Ratio of people who have gray hair, but have not colored their hair*1Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～clayence～ Since many believe coloring gray hair is for “older people”, they don’t begin dying their hair until later. All-in-one cosmetics were thought of as something for senior people, but Canadel made them popular among younger consumers. Drawing on this know-how, we will target a new audience with hair care. (%)3020100Reasons why they don’t want to use off-the-shelf coloring products*2For older peopleUsing fashionable hair dyeDon’t know which products are good27％22％21％02*1. Source: Based on our research on dying gray hair (n=449). Calculated the ratio of people who have gray hair but have not used hair coloring based on when they first found a gray hair and their age when they started using hair coloring for gray hair. *2. Source: Hoyu research “Gray Hair Awareness Research”. Research overview: Internet survey conducted by Neo Marketing Inc. from September 26 to 28, 2017 nationwide. 600 participants total from 20 to 59 years old. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.34Initiatives for 3Q andBeyondStrategies for 3 New Key Categories ～Wellness Market～ CBD has a broad range of efficacy from beauty to health and may be used to develop many food and cosmetics products. By conducting literature research on market size, consumer trends, and efficacy and by defining market entry criteria including difficulty of commercialization we will start developing products that have high profitability. We have cleared various test conducted by third-party testing institutions and since we also have exclusive agency rights for a high quality, key ingredient, we are already in conversation with multiple large corporations.03Possible product categoriesStressdepressionSleephealth Cosmetology appearanceOthersNeverpainInternalhealthMindcareSleepcareScalp healthHair growthBeautiful hairBeauty careBeautifulskinScalpcareSkincareFemcareBody careGynecological diseaseMenstrual pain reliefInnerhealthExternal beautyPainreliefLaunch of the first product this fiscal yearAnti-oxidationGene regulation sirtuinAnti-inflammatoryEffective for:Sleep regulationAnti-glycationImmuno-regulationGumdiseaseAesthetic appearance審美外見OthersOthersAGAAGAMen’s heath男性健康OralcareMen’scareMen’s beautyOthersCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.35Initiatives for 3Q andBeyondESG Initiatives As an initiative to realize one of the 17 SDGs, “Achieve gender equality and empower all women and girls”, we showed our support to the International Women’s Day by donating a part of our proceeds. By organizing both external and internal events, we will promote “diversity and inclusion” and “encourage communication”. 03Donation and Sponsorship of HAPPY WOMAN®Organization of Internal EventsOUTERINNERPromote “Diversity and Inclusion”, one of the themes of our SDG Project. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.36０６ ＡＰＰＥＮＤＩＸCompanyProfileNamePremier Anti-Aging Co., Ltd.EstablishedDecember 2009HQToranomon Hills Mori Tower, Toranomon 1-23-1, Minato-ku, TokyoBoard MembersPresident and CEO Kiyoshi MatsuuraManaging Executive Officer Koji KawabataManaging Executive Officer Takahiro ToyaIndependent Outside Director Takuyuki FukumotoIndependent Outside Director Sakiko SakaiAudit & Supervisory Board Member Motoyasu IshiharaAudit & Supervisory Board Member Akira IdeAudit & Supervisory Board Member Yosuke KondoExecutive Officer Keigo UemuraEmployees196 (As of January 31, 2022) Business DescriptionPlanning, development, import/export, mail order/EC, wholesale, and retail business of cosmetics and health food products. Group CompaniesPremier Wellness Science Co., Ltd. Premier Anti-Aging (Shanghai) Co., Ltd. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.38BusinessPhilosophyTime is fleeting, and it passes equally, whether you are young or old. Unleashing TimeHours become days, days become the future. We want to be an integral part of people’s time. By offering an exceptionally “unique value”,we want to enrich people’s lives and change the future.Let us unleash your future. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.39沿革2009・－－ Dec：The company was Company established (Toranomon , Minato-ku) 2010・－－ Feb：Began sales of cosmetic products. Launch of DUO: Began selling The Cleansing Balm through mail order service－ Nov：The Cleansing Balm won the first prize for the first time in Other Cleansers category at @cosme, Japan’s largest cosmetics and beauty review website2011・－－ Oct：Signed agency contracts with cosmetics wholesalers and began selling the products to retail shops mainly including variety stores2012・－－ Jul：Relocated the head office to Keyakizaka Terrace, Roppongi, Minato-ku, Tokyo2016・－－ May：Cumulative sales of the balm series exceeded 1 million units2018・－－ Sept：Started airing TV commercials (KinKi Kids) 2019・－－ Apr：Launch of a sister brand CANADEL－ Oct： Cumulative sales of the balm series exceeded 10 million units2020・－－ Mar：Relocated the head office to Toranomon Hills, Toranomon, Minato-ku, Tokyo－ Sept：Launch the new brand, “sitrana”. － Sept：Started airing the first round of TV commercials (Ms. Ryoko Yonekura) － Oct：Launched the new brand, “immuno”. － Oct：Became listed on the Tokyo Stock Exchange Mothers.－ Dec：Established Premier Wellness Science Co., Ltd. 2021・－－ Feb：Established Premier Anti-Aging (Shanghai) Co., Ltd. － Sep：Cumulative sales of the balm series exceeded 30 million unitsCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.40Situation by Brand DUO Key brand since our foundation. Continues to drive sales as a pioneer in the cleansing balm market. Key best cosmetics awards we have received in the first half of 2021MORE Aug2021 First Half MORE Best CosmeBest Cosme for Office Ladies in their 20s for Self Improvement2021 First Half Treatment for Unstable Skin No. 1MAQUIA SepNo.1 in the Face Wash DivisionBest Cosmetics Chosen by MAQUIA Readers in the fist half of 2021+24 awardsWe have combined natural ingredients that are kind to the skin, body, and nature and advanced science based on dermatology to develop highly effective products. DUO is an aging care brand with “nourishing the skin from its foundation” as its concept. We currently have 27 SKUs*, mainly focusing on cleansing balm. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.41※SKU numbers refer to the number of regular products as of January 2022. Limited editions, different sizes not included. Situation by Brand CANADEL Nurturing as a second key brand. CANADEL focuses on modern women’s needs to save time spent on skin care. Key best cosmetics awards we have received in the first half of 2021LEE AugBright Skin and Spirit!“Best Cosme” for Me Summer 2021Useful Cosme Grand Prize, Care Shortening Cosme CategoryLIPS June 1LIPS Best Cosme 2021 First HalfAll-in-One Category No. 2Based on the concept to “continuously pursue beauty, to be true to oneself, and enjoy life”, we launched this highly advanced aging care brand in April 2019 to address the changing skin care needs of mature consumers. Bearing in mind the busy lifestyles of modern women, we currently offer 4 types of all-in-one creams and eye cream. We currently have 5 SKUs* focusing mainly on all-in-one cosmetics. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.42※SKU numbers refer to the number of regular products as of January 2022. Limited editions, different sizes not included. With a unique anti-pollution capability, these products protect the skin from external stimuli that cause skin irritation such as dryness, skin pollution, and dirt/grime. Our original blend of cica substances*1 will help condition damaged skin and help users attain the ideal skin. We currently have 13 SKUs*2. Situation by Brand Sitrana Cosmetics brand for sensitive skin with cicasubstance*1 in every product.Key best cosmetics awards we have received in the first half of 2021BAILA MarchEspecially for Women in their 30sExcellent Petite Price Best CosmeExcellent Petite PriceSpecial Skin Care CategorySheet Mask Grand Prize&ROSY Aug2021 First Half Best Cosme&ROSY Editing Team’s ChoicePiques Interest of Beauty Savvy UsersAmazing Products+2 awards*1: Cica refers to the substance extracted from the plant, Centella asiatica. ※SKU numbers refer to the number of regular products as of January 2022. Limited editions, different sizes not included. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.43Situation by BrandImmuno Organic cosmetics brand that takes SDGs into consideration and promotes sustainable development. Key best cosmetics awards we have received in the first half of 2021MAQUIA May【MAQUIA Brightening/ UV Grand Prize 2021】Sensitive Skin Category1位LEE AugBright Skin and Spirit!“Best Cosme” for Me Summer 2021Perfected Brightening Grand Prize+4 awardsThese products reflect the comfort, aroma, and eco-conscious of organic products. They not only “seem great”, they are also backed by scientific evidence and deliver “desired results for skin”. User sense that these functional aging care products are “good for the skin,” and “feel the difference”. We currently have 8 SKUs*2. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.44※SKU numbers refer to the number of regular products as of January 2022. Limited editions, different sizes not included. Market Trends (Cosmetics Overall) SupplementMake UpMake up The domestic cleansing market including balms in 2020 was 128.2 billion yen. CosmeticsSkin CareCleansingBalmFace WashPowderFoamSolid SoapCosmeticsMoisturizerAll-in-oneMoisturizingWhiteningUV WhiteningEmulsionBoosterWhiteningMoisturizingEssenceCosmetics Market¥2.7502 tril(of which the men’s market is 150.6 bil yen)Skin Care Market¥1.2651 trilCleansing Market¥128.2 bil*Face WashMarket ¥120.6 bilAll-in-One Market¥131.2 bilHair CareShampooConditionerScalp CareHair care/hair make up market576.7 bil yenCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.45Note: Gray=market, red=products we offer. Source: *1. Fuji Keizai “Cosmetics Marketing Handbook 2021Environmental initiatives We are actively promoting eco-conscious initiatives. DUOCANADELsitranaimmunoCANADELWe are using FSC® certified packaging materials for all of our brands.We won the GP Eco Award again, but this year we won the Grand Prix!FSC® certification is a system through which products made of wood from well-managed forests and other low-risk sources can be marked with the FSC® label and sold as certified. The GP mark certifies that every activity from printing materials and manufacturing process undertaken by a printing company is eco-conscious. DUOWe have implemented green nano technologies to cleansing balm products and are currently testing stability so that we will be able to apply it to other products.immunoimmuno’s proactive sustainable initiativesGreen nano technologies refers to the addition of green nano substances to reduce CO2 emitted when these materials are burned by approximately 60%. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.46・Taking part in the Plastics Smart Campaign(Ministry of the Environment) by reducingmicroplastic waste. ・Proactively using recycled plasticsand bio plastics. ・Proactively using bagasse paper and FSC® certified materials. ・Proactively using recycled and biodegradable materials.Domestic Cleansing Market Size(Millions of Yen) ￥120.7➔￥147.5 bil22％UP(2014-2019)COVID-19Outbreak The domestic cleansing Domestic Cleansing Market Size￥128.2 bil13％DOWN(2019-2020)market expanded in 2014 as a result of inbound demand, however, due to the COVID-19 pandemic, the market has contracted. 1,5001,4001,3001,2001,1001,000900800201120122013201420152016201720182019202020212022(Expected) (Forecast) 2023(Forecast) Source: Fuji Keizai “Cosmetics Marketing Handbook 2022 Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.47Cosmetics and Skin Care Domestic Market Size Until 2019 the domestic cosmetics market had continued to grow gradually, but post pandemic, it has significantly contracted. 25,00022,944 20,00015,00010,0005,0000(Millions of Yen) 30,000Cosmetics and Skin Care Domestic Market SizeSkin careNon skin care cosmetics28,149 COVID-19Outbreak25,948 Non skin care cosmetics market CAGR 1.93%(2010-2019) Skin care marketCAGR 2.75%(2010-2019) 20102011201220132014201520162017201820192020(Forecast) Source: Fuji Keizai “Cosmetics Marketing Handbook 2022 Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.48Increase in Propensity to Shop Online EC in the skin care market has experienced a tailwind since people have been spending more time at home during the COVID-19 pandemic. Increase in Propensity to Shop OnlineCosmetic Sales in Japan by Channel2%2%5%6%Increase inPropensity to Shop Online65%27%30%Where did you buy cosmetics during the “self-quarantine” period? Cosmetic ECDrug StoresGeneral ECBrands’ EC SitesOtherVariety ShopsDepartment Store EC28%2%Will you continue to buy cosmetics online even when you are free to go out? Will continue to shop onlineOnly want to shop offlineWill continue to shop online98%TotalMail Order/ECDrug StoresDepartment StoresDoor to Door SalesCosmetic Stores…GMSDirect by ManufacturersOthersVariety ShopsCVSB2BSource: Cosmetics EC platform, NOIN, “Awareness research on purchasing cosmetics before and after self quarantine”*1. Participants: Users registered on cosmetics EC platform, NOIN. 2. Method: Survey within app. 3. Region: Nationwide. 4.Period: May 28 – June 3, 2020. 5. Responses: 2,350Source: Fuji Keizai “Cosmetics Marketing Handbook 2022 Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.492021(Expected)201805,00010,00015,000(Millions of Yen) Organizational Characteristics We have created an organization that specializes in the core operations. This has realized excellent productivity and mobility. １. Fabless ManagementWe select the optimal OEM for each product from among the nationwide network of OEM manufacturers we have built. By outsourcing production, we can maintain a flexible production system that can adapt to environmental changes. ２. Net Sales Per EmployeeWe will focus on core operations such as product development and marketing and outsource logistics, manufacturing, and most of the call center operations, etc. By doing so, the fixed asset ratio can be kept low, and the net sales per employee higher than that of competitors. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.50Disclaimer Regarding Forecasts and Projections The document and information provided as part of our results announcement include forward-looking statements, which reflect our current expectations and assumptions about forecasts and risks. Our actual results may materially differ from those described in the forecast due to unknown risks and uncertainties. These risks and uncertainties include domestic and international economic, conditions such as general industry and market conditions, interest, and currency exchange rate fluctuations. Cosmetics mail order/EC market trends may prove to be a major risk factor that impacts our growth and execution of business plans, but through active promotions and application of our understanding of customers’ potential needs to product planning, we will do our utmost to mitigate such risks and hone our competitive edge. For other types of risks, please refer to the “Business Risks, etc.” as highlighted in our Securities Report. The company does not undertake any obligation to revise or update these forward-looking statements to reflect new information or future events. Contact: Corporate Planning Departmentmail：ir@p-antiaging.co.jpCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.51