プレミアアンチエイジング（4934） – FY2022 3Q Results Briefing Material

FY2022 3QJune 13, 2022Premier Anti-Aging Co., Ltd. Tokyo Stock Exchange 4934FY2022 3Q ResultsINDEX01BUSINESS HIGHLIGHTS02FY2022 FORECAST REVISION03BUSINESS OVERVIEW04INITIATIVES GOING FORWARD05CLOSING REMARKS06APPENDIXCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.201 BUSINESS HIGHLIGHTSBusiness HighlightsP&L Statement (YOY) Core brand DUO sales, especially in high-margin Wholesale, declined due to slower-than-expected growth. DUO’s profit was lower than expected, and operating profit declined as it could not absorb higher SG&A expenses such as advertising and system investments to strengthen growth in CANADEL and clayence.FY20211Q-3QFY20221Q-3QIncrease/ DecreaseYOYUnit: Millions of YenNet Sales23,76625,896＋2,130109.0％ＬMail Order/EC15,94017,868＋1,928112.1％7,2246004,4287,116911△10898.5％＋310151.7％1,957△2,47044.2％18.6％7.6％△11.1ptOrdinary Profit4,4162,141△2,27448.5％2,8271,222△1,60543.2％ＬWholesaleＬOthersOperating ProfitOperating ProfitMarginProfit attributable to Owners of the ParentCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.4Business HighlightsSG&A (YOY) Advertising expenses increased due to new customer acquisition SG&Acosts for mail-order sales and TV commercials. Consignment expenses increased due to variable costs linked to mail-order sales, which accounted for about half of the increase. The rest increased mainly due to system investment and overseas investment from 1Q to 2Q.ＬAdvertising & PromotionＬConsignmentＬSalaries & AllowancesＬR&DＬOthersFY20211Q-3QFY20221Q-3QIncrease/DecreaseYOYUnit: Millions of Yen14,80918,704＋3,894126.3％8,6143,39945311810,201＋1,586118.4％4,399＋999129.4％799310＋346176.4％＋192262.7％2,2232,993＋770134.6％Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.5Business HighlightsAdvertising and Promotion Expenses (YOY) Ad expense against net sales increased since factors that temporarily curtailed ad placement in 1Q were resolved and ads were actively placed in 2Q and beyond.(Net Sales vs CAC: 15.3% (as of 1Q)). Aggressive investment in advertising and promotion has brought the number of new customer acquisitions in April close to a record high level.25,00022,50020,00017,50015,00012,50010,0007,5005,0002,5000(Millions of Yen)27,50023,766 YOY109.0%25,896 Net Sales vs Ad Expense36.3％ ⇒ 39.4％(+3.2pts)Net Sales vs Customer AcquisitionCosts23.7％ ⇒ 23.6％(-0.1pts)YOY118.4%10,201 OthersTVCMCACAgainst Net Sales23.6%8,614 OthersTVCMCACAgainst Net Sales23.7%Against Net Sales36.3%FY20211Q-3QAgainst Net Sales39.4%FY20221Q-3QNet Sales売上高Ad Expense広告宣伝費Net Sales売上高Ad Expense広告宣伝費Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.6slower than expected growth in Gross Profit*6,8877,1927,9246,5756,16293.7％FY20213QFY20214QFY20221QFY20222QFY20223QUnit: Millions of YenNet Sales8,4559,0499,8658,1047,92697.8％SG&A4,9216,9405,8496,4016,453100.8％ＬAdvertising and Promotion2,7014,1972,9503,5723,678103.0％Operating Profit1,9662522,074173△290―Business HighlightsP&L Statement (QonQ) Net sales were almost the same as in the second quarter due to the DUO. CANADEL and clayenceperformed well, and we believed the timing was right to push for new customer acquisitions and accelerated our investment in advertising, resulting in a temporary deterioration in profit/loss.(Comparison against FY2022 2Q)* Net gross profit is shown in FY2021.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.702 FY2022 FORECAST REVISIONBusiness ForecastP&L Statement Taking the current situation into consideration, we have revised the business forecast for the fiscal year. FY2022(Initial Forecast)FY2022(Revised Forecast)Increase/DecreaseIncrease/Decrease %FY2021(Actual)Increase/DecreaseUnit: Millions of YenIncrease/Decrease %Net Sales40,00034,000 △6,000 △15.0%32,815+1,185+3.6%6,0002,300 △3,700 △61.7%4,680 △2,380 △50.9%Operating ProfitOperating Profit MarginOrdinary ProfitProfit attributable to Owners of the Parent15.0%6.8%-△8.2%14.3%-△7.5%6,0202,500 △3,520 △58.5%4,653 △2,153 △46.3%3,4601,380 △2,080 △60.1%2,793 △1,413 △50.6%Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.903 BUSINESS OVERVIEWBrand Introduction We have an enhanced line-up: 4 skin care brands, 1 hair care brand, 1 men’s category brand. CANADEL’s sales composition increased. clayence and DUO MEN joined the line-up, so we are steadily making headway towards establishing a business structure supported by multiple brands. Skin care brandHair care brand Our key and inaugural brand. Pioneer in the cleansing balm market and continues to drive sales. Launched in February 2010. Currently have 33 SKUs*1Sales Composition Ratio*284％ Applied brand nurturing know-how gained through DUO and CANADEL. Home hair care brand that focuses on “young generation with graying hair”. Launched in March 2022 Currently have 5 SKUs*1 Nurturing as the second brand after DUO. Focuses on shortening time required for skin care to address needs of busy modern women. Sales Composition Ratio*215％ Launched in April 2019. Currently have 7 SKUs*1 Utilizing DUO brand’s high awareness and launched new products to enter the fast-growing men’s cosmetics market. Launched in April 2022. Currently have 2 SKUs*1*1: SKU numbers refer to the number of regular products as of end of April 2022. Limited editions, different sizes not included. *2: Calculated based on FY2022 3Q net sales. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.11We also offer 2 additional brandsMen’s brandDUOMonthly Net Sales Trend(Millions of Yen)3,500DUO Monthly Net SalesMail Order Wholesale Other Black Balm expanded in 1Q, but growth slowed in 2Q and beyond due to increased competition. Aiming to maximize investment efficiency, DUO’s investment style is more focused on CPO. 3,0002,5002,0001,5001,00050089 10 11 12 123456789 10 11 12 123456789 10 11 12 12341Q2Q3Q4Q1Q2Q3Q4Q1QFY2020FY20212QFY20223QCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.12CANADEL Monthly Net Sales Trend(Millions of Yen)800CANADEL Monthly Net SalesMail Order Wholesale Other By introducing unique products such as the “Premier Zero” and “Premier Barrier Fix”, Mail Order/EC and Wholesale are trending up, surpassing 700 million yen in monthly sales in April. New customer acquisition is also on the rise. Dipotassium glycyrrhizinate lessens inflammation and alleviates skin issuesAppeal whitening*2 and wrinkle smoothing effect by niacinamide7006005004003002001000All-in-one cream with 2 active ingredientsCANADEL Premier Barrier Fix※*1Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.1389 10 11 12 123456789 10 11 12 123456789 10 11 12 12341Q2Q3Q4Q1Q2Q3Q4Q1QFY2020FY20212QFY20223Q*1 Product name: Medicinal P Barrier Fix Quasi Drug. *2 Suppresses production of melanin and prevents spots and freckles.Number of delivery stores* and number of items delivered per store1～3SKU4～6SKU more than 7SKU1SKU 2SKU 3SKU more than 4SKUNumber of delivery stores and items TVCMs and the launch of Premier Barrier Fix contributed to increase in numbers of stores that carried more than 4SKUs of CANADEL. Efforts to expand sales are steadily underway.(Stores)18,00016,00014,00012,00010,0008,0006,0004,0002,0000(Stores)18,00016,00014,00012,00010,0008,0006,0004,0002,00002Q3Q4Q1Q2Q3Q2Q3Q4Q1Q2Q3QFY2021FY2022FY2021FY2022*Until FY2021, the number of stores where merchandise was sold was counted in each period. The above data counts the number of stores that shipped products in each quarter. *Excluding limited items for standard items only.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.14Weekly Acquisition Comparison Post clayence and CANADEL LaunchCANADEL surpassed weekly acquisition of 10,000 78 weeks after launch. Start of TVCMClayence Weekly Acquisitions Clayence launched in March and has been accepted by the market quicker than DUO or CANADEL. 10,000units10,000 10,000 new units acquired per week in the first week after brand launch.16,00014,00012,0008,0006,0004,0002,0000W1-W0W1W2W3W4W5W6W7W8W9W01W11W21W31W41W51W61W71W81W91W02W12W22W32W42W52W62W72W82W92W03W13W23W33W43W53W63W73W83W93W04W14W24W34W44W54W64W74W84W94W05W15W25W35W45W55W65W75W85W95W06W16W26W36W46W56W66W76W86W96W07W17W27W37W47W57W67W77W87Pre-saleCANADELclayenceCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.15Trends in Customers Who Subscribe to More Than 2 Products and the Relevant Ratio(Left axis) Customers who subscribe to more than 2 products(Right axis) Ratio of customers who subscribe to more than 2 productsNumber of cross-selling customers Number of customers who subscribe to more than 2 products has increased especially due to clayence. Expect to increase sales and profit from 4Q onward due to higher unit prices and cost reductions in delivery and other expenses as a result of an increase in the number of cross-selling customers.(People)120,000100,00080,00060,00040,00020,000014.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%89 10 11 12 123456789 10 11 12 123456789 10 11 12 12341Q2Q3Q4Q1Q2Q3Q4Q1QFY2020FY2021*: 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.) 2QFY20223QCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.1604 INITIATIVES GOING FORWARDInitiatives Going Forward Promote growth initiatives for DUO, CANADEL, and clayence, as well as launch new products in new categories. Widen reach with add-on purchase Reinforcement of Barrier Fix balms. Reach generation Z with new collaboration products such as HELLOW KITTY and DISNEY. Online (Web) x offline (stores) x mass advertising.production system Online x offline x mass advertising focusing on the high-end product, “Premier Zero”. Strengthen repeat purchases by introducing refills.DUOCANADELclayenceNew Categories Expansion into retail sales Expansion of mass advertising Premier Wellness Science (PWS) plans to launch a brand with cannabidiol as a core ingredient by the end of this fiscal year.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.18Initiatives Going ForwardESG Initiatives We will continue to focus on environmentally conscious initiatives for the future.Streamlining of delivery forms reduces CO2 emissions by about 50%.Development of special spatulas employing the world’s first ”wood flow molding processing technology”.Ongoing In-house SDG activitiesCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.1905 CLOSING REMARKSClosing RemarksCPO and Number of New Customer Acquisitions in Mail Order/EC140000120000 CPO has declined due to more 10000080000600004000020000competitive advertising environment. New customer acquisition bottomed out in November last year and is on a rising trend, marking record high levels. First half of this fiscal year, we acquired new customers mainly for DUO, but we have increased investments for CANADEL and clayence, contributing to the diversification of our brand portfolio.CPO and Number of New Customer Acquisitions in Mail OrderCPOと獲得件数の推移ClayenceCANADELDUOOthersCPO14,00012,00010,0008,0006,0004,0002,0000891Q101112122QFY20220433QCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.21Closing RemarksCANADEL Sales Trends Continue to aim for No. 1 brand share in the all-in-one cosmetics market.2019Brand ABrand BBrand CBrand DBrand EBrand F2020Brand ABrand BBrand EBrand CBrand FBrand GBrand DBrand HBrand IBrand GBrand IBrand H2022CANADELY 20 billionY10 billionY 5 billionY 3 billion2021Brand ABrand BBrand EBrand CBrand FBrand DCANADELBrand GBrand IBrand HCANADELCANADELSource: Fuji Keizai, “Cosmetics Marketing Handbook 2021.Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.22Closing RemarksTransitioning to an Anti-Aging Company Our strength is a business model that combines product planning and development and marketing capabilities with a subscription sales model. We will continue to refine our brands and create and nurture multiple No. 1 brands in overwhelming categories to solidify our growth in the next fiscal year and beyond. Steady progress toward becoming an anti-aging company.Strengthen foundations for sustainable business growthBecoming the Anti-Aging CompanyEstablished core competence・Created the DUO brand –nurtured into a profitable brandInvestmentPhase3PresentInvestment2019Phase2Phase1Founding～2019・Skin care brandApplication of core competence to other brands・Developed the CANADEL brand・Developed hair care brand, clayence・Created Men’s brand, “DUO MEN”Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.2306 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 UemuraExecutive Officer Kiyoshi IwakawaExecutive Officer Yuka UeharaEmployees226 (As of April 30, 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.25BusinessPhilosophyTime 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.26History－ 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 service2009・－2012・2019・－ Jul：Relocated the head office to Keyakizaka Terrace, Roppongi, Minato-ku, Tokyo2018・－－ Sept：Started airing TV commercials (KinKi Kids) － 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 units2022・－ March: Launched hair care brand, “clayence”.－－ April: Launched men’s skin care brand, “DUO MEN”. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.27Business HighlightsBalance Sheet (Comparison with the end of the previous fiscal year) The ratio of non-current assets to total assets continues to be kept at about 6%, and asset-light management continues.FY2021FY20223QIncrease/DecreaseTotal Assets13,07112,75512,47911,928Unit: Millions of YenPercentage△316△55197.6％95.6％ＬCurrent AssetsＬNon-current AssetsTotal LiabilitiesＬCurrent LiabilitiesＬNon-current LiabilitiesTotal Net AssetsTotal Liabilities and Net Assets5916,1685,5915766,903826235139.7％4,612△1,55574.8％4,242△1,34975.9％370△20564.3％8,142＋1,239118.0％13,07112,755△31697.6％Equity Ratio52.8％63.8％＋11.0ptCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.28Mail Order only7060504030201008 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4DUO Cleansing Balm Monthly Shipment Trends(10,000 units)160DUO Cleansing Balm Shipments Per ItemOriginalClearWhiteBarrierBlackOther6M Moving Average The monthly shipments have declined after peaking last September but have recently become stable. Aim to secure stable sales by continuing to refine the DUO brand, which boasts an overwhelming No. 1 position with a 23% category share, to further increase recognition.1401201008060402008910 11 1212345678910 11 1212345678910 11 1212341Q2Q3Q4Q1Q2Q3Q4Q1QFY2020FY20212QFY20223QNote: 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.29Net Sales by Channel(Millions of Yen)12,000Net Sales by ChannelMail Order WholesaleOthers (including overseas subsidiaries) Sales, which had been growing 10,000steadily until FY2022 1Q driven by the core brand DUO, slowed down 8,000from 2Q due to unexpectedly fierce competition. Mail-order sales declined in the third quarter due to the lack of subscription sales customer accumulation caused by the difficulty 6,0004,00032%21%76%67%23%18%17%22%21%76%35%25%27%33%18%28%71%64%70%62%78%69%lWhoesaelMail Orderin acquiring new customers in the 2,00013%13%82%76%81%75%first half of the year and the absence 85%85%of one-time sales due to year-end 0and New Year’s sales.1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3QFY2019FY2020FY2021FY2022Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.30Total number of mail order customersTotal number of mail order customers New customer acquisitions are on a growth trend and total number of 2,500,000customers is steadily increasing due to successful investment in advertising in conjunction with the launch of new CANADEL products “Premier Barrier Fix” and new clayence products.(People)3,500,0003,000,0002,000,0001,500,0001,000,000500,0000111100089 10 11 12 123456789 10 11 12 123456789 10 11 12 12341Q2Q3Q4Q1Q2Q3Q4Q1QFY2020FY20212QFY20223QCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.31Utilize strong IP portfolio gained through global partnerships to develop new businesses and products PWS has been employing efforts to secure engineering prowess and to build a supply chain that will ensure long term growth. This includes stable procurement of CBD raw materials, physical property optimization technology for poorly water-soluble compounds utilizing DehydraTECH™’s patent license, and joint research with research institutions, which will ultimately enable us to enhance safety, stability, and efficacy of products containing cannabidiol being developed by PWS. We will release a series of products that utilize the above. Signed exclusive license agreement with DehydraTECH™Drug delivery systemDrug delivery techPhysical property optimization techSecured patent license for CBD cannabidiol, an ingredient difficult to deliver due to low bioavailability. Using DehydraTECH™ we can realize safe delivery and absorption.ApplicationsStressdepressionSleephealthExteriorbeautyOthersNervepainInnerhealthMindcareSleepcareScalphealthHair growth,restorationBeautifulhairScalpcareSkin careFemale careBody careBeautyBeautifulskinPainreliefInnerhealthExteriorbeautyGynecologic diseasesMenstrual cramp reliefGumdiseaseAestheticappearanceOthersAGAMen’s healthOralcareMalecareMen’s beautyOthersBy applying these technologies to products containing cannabidiol by PWS, we can further enhance our product and make it more difficult to imitate. For more information: https://p-wellnessscience.co.jp/info/144/Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.32Situation 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 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+50 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 33 SKUs*, mainly focusing on cleansing balm. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.33*SKU numbers refer to the number of regular products as of April 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 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 7 SKUs* focusing mainly on all-in-one cosmetics. +5 awards*SKU numbers refer to the number of regular products as of April 2022. Limited editions, different sizes not included. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.34Situation by Brand sitrana Cosmetics brand for sensitive skin with cicasubstance*1 in every product.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 14 SKUs*. Key best cosmetics awards we have received in 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+9 awards*1: Cica refers to the substance extracted from the plant, Centella asiatica. *2: SKU numbers refer to the number of regular products as of April 2022. Limited editions, different sizes not included. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.35Situation by Brandimmuno Organic cosmetics brand that takes SDGs into consideration and promotes sustainable development. Key best cosmetics awards we have received in 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 PrizeThese 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 9 SKUs*. +7 awards*SKU numbers refer to the number of regular products as of April 2022. Limited editions, different sizes not included. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.36Situation by Brand clayence Applied brand nurturing know-how gained through DUO and CANADEL. Home hair care brand that focuses on “young generation with graying hair”.By 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. We currently have 5 SKUs*. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.37*SKU numbers refer to the number of regular products as of April 2022. Limited editions, different sizes not included. Situation by BrandDUO MEN Utilizing Duo brand’s high awareness and launched new products to enter the fast-growing men’s cosmetics market. While 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 way.We currently have 2 SKUs*2. Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.38*SKU numbers refer to the number of regular products as of April 2022. Limited editions, different sizes not included. SupplementMake UpMake upMarket Trends (Cosmetics Overall) 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 bilFace 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.39Note: Gray=market, red=products we offer. Source: Fuji Keizai “Cosmetics Marketing Handbook 2021Domestic Cleansing Market Size(Millions of Yen) ￥120.7 bil➔￥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 2021 No. 1Copyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.40Cosmetics 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.41Increase in Propensity to Shop OnlineCosmetic Sales in Japan by ChannelIncrease 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. 2%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%TotalMail Order/ECDrug StoresDepartment StoresDoor to Door SalesCosmetic Stores…GMSDirect by ManufacturersOthersVariety ShopsCVSB2BWill 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%Source: 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.422021(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.43Environmental 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.44・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.Disclaimer 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: orporate Communication Divisionmail：ir@p-antiaging.co.jpCopyright©2022 PREMIER ANTI-AGING Co., Ltd. All Rights Reserved.45