Slides
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For the First 9 Months of the Fiscal Year Ending January 2025 Financial Results Briefing December 2024 Japan Eyewear Holdings Co., Ltd. Securities code : 5889
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Contents 01 Overview of FY2025 Q3 Results 02 JEH Group's Business Model and Growth Strategies
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2| 01 Overview of FY2025 Q3 Results
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3| FY2024/1 Original Plan Revised Plan Original plan vs. Revised plan Original plan vs. FY2024/1 Revenue 13,528 14,960 16,090 7.6% 18.9% Operating Profit 3,700 4,300 5,000 16.3% 35.1% OP margin 27.4% 28.7% 31.1% EBITDA 5,181 5,900 6,650 12.7% 28.3% Income before income taxes 3,295 3,900 4,570 17.2% 38.7% Profit attributable to owners of parent 2,217 2,680 3,090 15.3% 39.4% Earnings per share ¥110.05 ¥111.93 ¥128.76 Annual dividends per share ¥19 ¥44 ¥51 Revision of Full-Year Earnings Guidance for FY2025/1 In light of sales going strong and better-than-expected profit margins, the full-year earnings guidance has been revised upward as follows. In conjunction, the forecast has also been revised for year-end dividend to 29 yen per share. The forecast for annual dividend, which was 44 yen before, is now 51 yen. 01 Overview of FY2025 Q3 Results (million yen）
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4| Executive Summary Consolidated (IFRS） Non-consolidated Store sales continued to perform well in the first nine months, as it did in the first six months, with revenue for the nine-month period increasing 24.8% YoY to 12.0 billion yen. Although growth rate is gradually slowing as the hurdles of the previous year become higher toward the end of the year, the growth rate still remains high. Backed by strong sales, the operating profit margin also maintained a high level at 32.4％. This resulted in operating profit for the nine-month period increasing 46.4％ YoY to 3.9 billion yen. 01 Overview of FY2025 Q3 Results Revenue Gross Margin(% of sales) SG&A (vs. sales 46.5％) VS.FY2024/1Q3 124.8% VS.FY2024/1Q3 +1.5 pt VS.FY2024/1Q3 116.9% Operating Profit Net Income Adjusted EBITDA (vs. sales 32.4％) (vs. sales 20.0％) (vs. sales 42.9％) VS.FY2024/1Q3 146.4% VS.FY2024/1Q3 156.8% VS.FY2024/1Q3 134.5% Kaneko Optical Same Store Sales (YoY) Four Nines Same Store Sales (YoY) Q1 - Q3 (9 months) ％ Q1 - Q3 (9 months) ％ Q3 (3 months) ％ Q3 (3 months) ％109.8 108.9 JPY12.0bn JPY3.9 bn 78.9 % JPY5.1 bn JPY5.6 bn JPY2.4 bn 117.1 116.1
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5| FY2024/1 Q3 FY2025/1 Q3 Variance % YoY Revenue 9,689 12,095 2,406 124.8% COGs 2,191 2,550 358 116.4% Gross Margin 7,497 9,545 2,047 127.3% SG&A 4,816 5,630 813 116.9% Other Income/Other Expense 0 8 9 (1,116,6%) Operating Profit 2,680 3,923 1,243 146.4% EBITDA 3,769 5,154 1,384 136.7% Adjusted EBITDA 3,857 5,188 1,330 134.5% Financing Costs (314) (343) (29) 109.3% Income before income taxes 2,365 3,579 1,214 151.3% Income Taxes 819 1,156 336 141.1% Net Profit 1,546 2,423 877 156.8% Adjusted Net Profit 1,603 2,447 843 152.6% Gross margin (% of sales) 77.4% 78.9% OP margin 27.7% 32.4% EBITDA margin 38.9% 42.6% Consolidated P/L (Q1-Q3 9months) (million yen） (IFRS） Notes: 1. EBITDA = Operating profit + Depreciation + Amortization of identifiable assets 2. Adjusted EBITDA = EBITDA + IPO related cots (Note 3) + M&A related costs (Note 4) 3. One-time costs for IPO preparation, advisory fee for IFRS introduction, consultation fees, etc. 4. M&A related costs for the acquisition of Taiho in FY2025 Q1. 01 Overview of FY2025 Q3 Results
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6| Revenue by Channel (Q1-Q3 (9months)) (IFRS） (million yen） Kaneko Optical Four Nines 01 Overview of FY2025 Q3 Results FY2024 Q3 FY2025 Q3 Variance % YoY Store sales 5,600 7,211 1,610 128.8% Wholesale sales (Domestic) 202 238 36 117.8% Wholesale sales (Overseas) 365 442 77 121.2% Others 19 9 (9) 49.9% Sub-total 6,188 7,902 1,714 127.7% FY2024 Q3 FY2025 Q3 Variance % YoY Store sales 1,742 2,270 528 130.3% Wholesale sales (Domestic) 1,143 1,172 29 102.6% Wholesale sales (Overseas) 614 695 81 113.2% Others 1 54 52 3,241.1% Sub-total 3,501 4,192 691 119.8% Total 9,689 12,095 2,406 124.8%
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7| FY2024 Q3 FY2025 Q3 Variance % YoY SG&A 4,816 5,630 813 116.9% vs. Sales 49.7% 46.5% - 3.2Pt - Personnel expenses 1,987 2,180 192 109.7% vs. Sales 20.5% 18.0% - 2.5Pt - Depreciation* 1,053 1,191 137 113.0% vs. Sales 10.9% 9.8% - 1.0Pt - Rent expenses 519 676 157 130.2% vs. Sales 5.4% 5.6% 0.2Pt - Commission fee 264 352 87 133.1% vs. Sales 2.7% 2.9% 0.2Pt - Sales promotion expenses 259 311 51 120.0% vs. Sales 2.7% 2.6% - 0.1Pt - Sales agency expenses 124 209 84 167.5% vs. Sales 1.3% 1.7% 0.4Pt - Advertising expenses 37 48 10 129.1% vs. Sales 0.4% 0.4% 0.0Pt - Other expenses 569 661 91 116.1% vs. Sales 5.9% 5.5% - 0.4Pt - Consolidated SG&A (Q1-Q3 (9months)) (IFRS） (million yen） *Depreciation includes depreciation of right-of-use assets related to store leases. (FY2024 Q3: ¥887 million, FY2025 Q3: ¥1,007 million) 01 Overview of FY2025 Q3 Results
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8| 119 Revenue FY2024 Q3 vs. FY2025 Q3 9,689 12,095 928 220 802 FY2024 Q3 FY2025 Q3 +24.8% (IFRS） 68 224 Domestic Store Sales Q3 +2,070 42 01 Overview of FY2025 Q3 Results (million yen） SSS InboundSSS Japanese customers Wholesale Others New stores*1 Relocation*2 Overseas stores Notes 1. Effect of FY2024 9 new stores, FY2025Q3 5 new stores 2. Effect of FY2024 1 relocation, FY2025Q3 3 relocations
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9| FY2024 Q3 (Aug. - Oct.) FY2025 Q3 (Aug. - Oct.) Variance % YoY Revenue 3,286 3,795 509 115.5% COGs 745 784 39 105.3% Gross Margin 2,540 3,011 470 118.5% SG&A 1,651 1,837 185 111.2% Other Income/Other Expense (3) (4) 0 － Operating Profit 885 1,169 283 132.0% EBITDA 1,258 1,589 330 126.3% Adjusted EBITDA 1,311 1,592 281 121.5% Financing Costs (101) (72) 29 70.8% Income before income taxes 783 1,096 313 140.0% Income Taxes 269 350 81 130.2% Net Profit 514 746 232 145.2% Adjusted Net Profit 548 748 199 136.5% Gross margin (% of sales) 77.3% 79.3% OP margin 26.9% 30.8% EBITDA margin 38.3% 41.9% Consolidated P/L (Q3 (3months)) (million yen） (IFRS） Notes: 1. EBITDA = Operating profit + Depreciation + Amortization of identifiable assets 2. Adjusted EBITDA = EBITDA + IPO related cots (Note 3) + M&A related costs (Note 4) 3. One-time costs for IPO preparation, advisory fee for IFRS introduction, consultation fees, etc. 4. M&A related costs for the acquisition of Taiho in FY2025 Q1. 01 Overview of FY2025 Q3 Results
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10| (IFRS） Kaneko Optical Four Nines Revenue by Channel (Q3 (3months)) (million yen） 01 Overview of FY2025 Q3 Results FY2024 Q3 (Aug. - Oct.) FY2025 Q3 (Aug. - Oct.) Variance % YoY Store sales 1,955 2,359 404 120.7% Wholesale sales (Domestic) 52 64 12 123.8% Wholesale sales (Overseas) 111 114 2 102.6% Others 6 (2) (8) -33.6% Sub-total 2,126 2,537 410 119.3% FY2024 Q3 (Aug. - Oct.) FY2025 Q3 (Aug. - Oct.) Variance % YoY Store sales 591 727 135 122.9% Wholesale sales (Domestic) 374 328 (46) 87.7% Wholesale sales (Overseas) 192 165 (26) 86.2% Others 0 36 35 9,600.5% Sub-total 1,159 1,258 98 108.5% Total 3,286 3,795 509 115.5%
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11| FY2024 Q3 (Aug. - Oct.) FY2025 Q3 (Aug. - Oct.) Variance % YoY SG&A 1,651 1,837 185 111.2% vs. Sales 50.3% 48.4% - 1.9Pt - Personnel expenses 665 725 60 109.0% vs. Sales 20.3% 19.1% - 1.1Pt - Depreciation* 361 407 45 112.6% vs. Sales 11.0% 10.7% - 0.3Pt - Rent expenses 176 211 34 119.8% vs. Sales 5.4% 5.6% 0.2Pt - Commission fee 88 97 8 109.7% vs. Sales 2.7% 2.6% - 0.1Pt - Sales promotion expenses 79 90 10 113.6% vs. Sales 2.4% 2.4% - 0.0Pt - Sales agency expenses 49 69 20 141.1% vs. Sales 1.5% 1.8% 0.3Pt - Advertising expenses 12 20 7 162.6% vs. Sales 0.4% 0.5% 0.2Pt - Other expenses 218 216 (2) 99.0% vs. Sales 6.6% 5.7% - 1.0Pt - Consolidated SG&A (Q3 (3months)) (IFRS） (million yen） *Depreciation includes depreciation of right-of-use assets related to store leases. (FY2024 Q3: ¥305 million, FY2025 Q3: ¥342 million) 01 Overview of FY2025 Q3 Results
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12| Quarterly Trends Revenue Operating Profit 1,000 Unit: ¥MM Unit: ¥MM 2,249 2,872 2,458 3,141 2,918 3,485 3,286 3,839 3,861 4,439 3,795 Q1 Q2 Q3 Q4 FY2023/1 FY2024/1 FY2025/1 267 740 440 777 759 1,035 885 1,019 1,195 1,559 1,169 Q1 Q2 Q3 Q4 FY2023/1 FY2024/1 FY2025/1 01 Overview of FY2025 Q3 Results
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13| As of Jan. 31, 2024 As of Oct.31, 2024 Variance Change from the end of FY2024 Total Assets 34,766 36,890 2,124 106.1% Composition ratio 100.0% 100.0% - - Current Assets 7,240 6,984 (255) 96.5% Composition ratio 20.8% 18.9% - - Non-current Assets 27,526 29,905 2,379 108.6% Composition ratio 79.2% 81.1% - - Current Liabilities 4,293 4,392 98 102.3% Composition ratio 12.3% 11.9% - - Non-current Liabilities 17,202 17,653 (451) 102.6% Composition ratio 49.5% 47.9% - - Total Equity 13,270 14,844 1,574 111.9% Composition ratio 38.2% 40.2% - - Balance of Bank Loans 13,850 13,375 (475) 96.6% Inventories 1,497 1,800 302 120.2% Consolidated B/S (IFRS） (million yen） 01 Overview of FY2025 Q3 Results
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14| Consolidated CF (IFRS） (million yen） 01 Overview of FY2025 Q3 Results FY2024 Q3 FY2025 Q3 Operating Cash Flow(sub-total) 3,639 5,059 Profit before tax ＋3,579 Depreciation ＋1,230 Decrease (Increase) in inventories (232) Income taxes paid (1,251) Purchase of property, plant and equipment (1,240) Purchase of shares of subsidiaries (146) Dividends paid to shareholders (981) Repayments of long-term borrowings (561) Repayments of lease liabilities (1,002) Refinancing cost paid (100) Cash and Cash equivalents 2,526 4,057 at end of period Financing Cash Flow Details 2,215 3,605 (1,371) (2,564) Investing Cash Flow (589) (1,442) Operating Cash Flow
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15| # of stores # of stores # of stores as of Jan. 31, 2024 as of Oct. 31, 2024 as of Jan. 31, 2025 Kaneko Optical 80 7 3 84 7 5 82 KANEKO FRANCE SARL 2 - - 2 - - 2 Kaneko Shanghai 1 2 - 3 2 - 3 JEH Hong Kong 1 - 1 Four Nines 14 1 - 15 1 - 15 FOUR NINES SINGAPORE PTE.LTD. 1 - - 1 - - 1 Total 98 10 3 105 11 5 104 Results for Feb.-Oct. 2024 Full-year plan New Opening Closed / Relocation New Opening Closed / Relocation Stores Opened / Closed Note: *Including openings of existing stores relocated to favorable neighborhood locations. 01 Overview of FY2025 Q3 Results Results for Feb.-Oct. 2024 New Opening* 10 Closed / Relocation 3 # of stores as of Oct.31, 2024 105 Full-year plan New Opening* 11 Closed / Relocation 5 # of stores as of Jan.31, 2025 104
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16| Company Month New / Close Store Name Kaneko Optical Feb. New KANEKO GANKYO-TEN, Narita Airport Feb. Close (relocation) KANEKO OPTICAL, Hirakata T-site Feb. Close (relocation) KANEKO GANKYO-TEN, Abeno Harukas Mar. Close (relocation) KANEKO GANKYO-TEN, Nagoya Mar. New KANEKO GANKYO-TEN, Lumine Omiya Mar. New (relocation) KANEKO GANKYO-TEN, Tennoji Mio Mar. New KANEKO GANKYO-TEN CoCoLo Niigata Apr. New (relocation) KANEKO GANKYO-TEN, Chunichi Bldg. Sep. New (relocation) KANEKO GANKYO-TEN, Hirakata Mall Sep. New KANEKO GANKYO-TEN, Emi Terrace Tokorozawa Four Nines Apr. New 999.9, Narita Airport Kaneko Shanghai Apr. New KANEKO GANKYO-TEN, Sinan Mansions Aug. New KANEKO GANKYO-TEN, ROCKBUND JEH Hong Kong Nov. New KANEKO GANKYO-TEN, Pedder Arcade Kaneko Optical Jan. Close KANEKO OPTICAL MARK IS Fukuoka-momochi Jan. Close KANEKO OPTICAL Aeon Mall Musashi murayama Stores Opened / Closed (details) 01 Overview of FY2025 Q3 Results
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17| Capital Allocation Adopting a basic policy of maintaining stable dividend payouts while securing internal reserves necessary for future business expansion and strengthening the management structure, the policy is to pay out dividends at an annual payout ratio target of 40%. FY2025/1 Annual dividend per share: Plan of ¥44 revised to ¥51 Year-end dividend per share: Plan of ¥22 revised to ¥29 Interim dividend per share: ¥22 (as initially planned) ◆ Investment in stores in Japan and abroad ◆ Investment in strengthening manufacturing capabilities ◆ Loan repayment ◆ Active return to shareholders Generation of Ample Operating Cash Flow Dividend Policy Return to shareholders, loan repayment and growth investment will be implemented with an appropriate balance using ample cash generated as the source of funds. 01 Overview of FY2025 Q3 Results
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18| FY2025 Q3 Initiatives 01 Overview of FY2025 Q3 Results 2nd & 3rd stores in China Sales to inbound tourists ¥2.4 bn Opened 8 new stores in Japan (including 3 relocations） 8 new stores in Japan Further price increase Opened 2nd and 3rd Chinese direct stores in April and August 2024 Achieved ¥2.4 bn in sales to inbound tourists via recovery of inbound demand Conducted price increases for both brands May 2024: Made Taiho Co., Ltd., a Sabae-based eyewear manufacturer, a subsidiary July 2024: Reduced interest burden by refinancing bank loans November 2024: Opened 1st store in Hong Kong
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19| New Stores March 2024 Kaneko, Tennoji MIO 01 Overview of FY2025 Q3 Results Kaneko, LUMINE OmiyaMarch 2024 999.9, Narita Airport April 2024 Kaneko, Chunichi Bldg.April 2024 September 2024 Kaneko, Hirakata mall September 2024 Kaneko, Emi Terrace Tokorozawa
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20| Capture of Inbound Demand from Increase in Foreign Visitors thousand yen JEH Sales to Inbound Tourists(1) Sales to inbound tourists has remained strong. With the full recovery of inbound tourists from China, sales are expected to further increase JEH Sales to Inbound Tourists China China Others Others FY2020/01 (Q1-Q3)9months FY2025/01 (Q1-Q3)9months Note: 1. Sales from inbound tourists in directly managed stores (excl. sales via wholesalers) 26.2% 0% 10% 20% 30% 0 200,000 400,000 600,000 800,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2023/1 2024/1 2025/1 01 Overview of FY2025 Q3 Results
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21| 72,107 73,489 72,313 72,927 74,611 78,708 81,445 0 65,000 70,000 75,000 80,000 2019/1 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 Q3 62,070 65,803 67,187 69,157 69,872 72,862 76,920 0 60,000 65,000 70,000 75,000 2019/1 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 Q3 Consistent Increase in Unit Price (1) Further Increase in Unit Price, Driven By Branding as a Luxury Eyewear Company Created in Japan Owning 2 brands with high presence in the domestic eyewear market allows further expansion of the brands as a group, via product offering of luxury eyewear products across various categories. As a result, JEH has been realizing growth at existing stores through continuous increase in unit price vs. 2019/1 +23.9% vs. 2019/1 +13.0% Note: 1. Unit price refers to aggregated price of eyewear frames and lenses. Aggregated every fiscal year, from February 1st to January 31st Mar.&Sep.2021 Mar.2022 Oct. 2023 Mar.&Apr.2024 Feb.2023 Feb.2024 Change in Price Change in Price yen yen Kaneko Optical Four Nines 01 Overview of FY2025 Q3 Results
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22| 1st Store in Hong Kong Following on from the store openings in mainland China, opened our 1st store in Hong Kong in November 2024. ■KANEKO GANKYO-TEN, Pedder Arcade Pedder Building, where the store has opened, is a historic commercial building located along Pedder Street in the Central District of Hong Kong. This building built in 1924 is marked by its Beaux-Arts architecture and is one of the few surviving pre-World War II buildings in Hong Kong, thus its listing as a Grade I Historic Building by the Hong Kong Government in 2020. Housing internationally renowned galleries, it has an iconic presence in also the art scene. This is a store that offers the experience of enjoying choosing glasses relaxed in art surroundings. 01 Overview of FY2025 Q3 Results
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23| 02 JEH Group's Business Model and Growth Strategies
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24| We produce the highest-quality eyewear with original designs in an experienced-based craftsmanship process created in the unique and world renowned eyewear production region of Sabae, Fukui Prefecture, sold via our network of luxury retail boutiques(1) Since 1958 Revenue JPY8.6 bn（FY2024） About 90% sold via directly managed stores Stores Directly managed stores: 84 in Japan, 2 in France, 3 in China (as of Oct. 31, 2024) Unit Price(2) Approx. JPY77,000 Since 1995 Revenue JPY4.9 bn（FY2024） Approx. 50% sold via directly managed stores and 50% via wholesalers Stores Directly managed stores: 15 in Japan, 1 in Singapore (as of Oct. 31, 2024) Unit Price(2) Approx. JPY81,000 Luxury Eyewear Brand that Realizes Supreme Quality, Beautiful Form and Refined Function Trend Leader in Domestic Eyewear Industry Originating in Renowned Eyewear Production Hub of Sabae, Fukui Prefecture SPIVVY ISSEY MIYAKE EYES Four Nines Portfolio of Japanese Luxury Eyewear Brands 02 JEH Group's Business Model and Growth Strategies 999.9 999.9 feelsun FN/ FOURNINES PLAIDe Notes: 1. Four Nines sales include product sales other than from directly managed stores 2. Unit price refers to aggregated price of eyewear frames and lenses based on actual prices during FY2025/1 Q2. Kaneko Optical CRAFTSMAN SERIES Kaneko Optical
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25| World’s Renowned “Sabae” Brand Sabae has established a solid position as one of the world's three largest producers of eyewear. Through creation of employment and production of environmentally-friendly and sustainable luxury products, we seek to revitalize the community. Production of High-quality Eyeglass Frames in Sabae, One of the World’s Largest Production Centers Sabae is one of the three major eyeglass frame production centers with a history of over 100 years COOL JAPAN AWARD is an award sponsored by The Cool Japan Association and backed by Ministry of Economy, Trade and Industry, etc. “Sabae Glasses” was among the winners of the 1st COOL JAPAN AWARD along with Toyota’s hydrogen fuel cell vehicle “Sabae Glasses,” the winner of the 1st COOL JAPAN AWARD Market share Sabae, JPN Shenzhen / Dongguan, etc., CHN Belluno, ITA Cost effectiveness Design / Brand Skills / Processing Location Start of production 1980s～ 1870s～ 1905～ Strong points Mass production In-house integrated system Specialized production Production style Three Major Eyeglass Frame Production Centers Community Support in Sabae (Part of ESG Initiatives) ） BASEMENT GLASSWORKS BACKSTAGE Add innovation to inheritance of Sabae’s traditions and hand them down to following generations Manufacturing in Sabae with an aim to “inherit and develop time-honored artisanship” at Sabae Succeeding traditional materials and artisanship, combined with enterprising spirit for innovative technologies 2009 Built its own factory “BACKSTAGE” for integrated production of plastic eyeglass frames 2016 Built its own factory “GLASSWORKS” for specialized production of metal eyeglass frames 2019 Built its own factory “BASEMENT” to enhance innovation, in which state- of-the-art robotics are installed in parts of the frame cutting and polishing processes History of Establishment of Production Sites in Sabae Global Production Domestic Production Sabae 20％ Others 80％ Others ５％ Sabae 95％ Source: Sabae City PR website, Nikkei Value Search 02 JEH Group's Business Model and Growth Strategies
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26| Kaneko’s Integrated Business Model that Realizes New Design / Trends In-house planning, production and distribution are the source of brand value. Seek to increase internal production and direct store sales of 999.9 as part of the benefit of integration into the JEH Group Sales at our directly managed storesIn-house productionIn-house design • Planning of fashionable eyewear reflecting ideas incubated in the production process as well as market data • Procurement of frame materials, lenses, etc., from manufacturers mainly in Sabae • Conduct all (1) production and manufacturing processes in-house • Combination of traditional craftsmanship and manufacture by machines to produce products with a unique surface finish • Elaborately designed stores at prime locations in respective commercial districts • Strengthened marketing and store operation through utilization of customer data and effective human resources. Integrating in-house processes from production to distribution allows us to pursue both “craftsmanship / high quality” and “profitability / efficiency” Outsourcing to external craftsmen Sales either through direct store or wholesale Utilization of Kaneko’s factories Strengthening of direct store opening leveraging Kaneko’s know-hows Planning/designing In-house production Store sales In-house design Notes: 1. Excludes molding, pressing and metal frame special processing 02 JEH Group's Business Model and Growth Strategies Kaneko Optical
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27| BACKSTAGE GLASSWORKS In-house Production to Realize High Quality Products We strive to produce ideal luxury eyewear at our three in-house factories, manufacturing around 100,000 pairs per year in the city of Sabae, one of the world's three largest producers of eyewear BASEMENT Producing plastic frames Producing metal frames For metal and plastic frames New Company Building/New Factory Completed in 2024 • Respond to mass production globally • Implement in-house production of 999.9 products 02 JEH Group's Business Model and Growth Strategies
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28| New Company Building / New Factory The construction of a new company building and new factory that was underway using the funds procured by way of capital increase through public offering upon the IPO in November 2023 was completed in November 2024. The aim is to have the factory come on stream by spring of 2025. 02 JEH Group's Business Model and Growth Strategies
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29| Selected Store Location and Store Designs Nurture luxury brand image that attract customers by opening stores in prime locations with sophisticated store designs Opening Stores in Prime Locations with Designs that Attract Customers and Enhances the Brand Image 999.9, Kyoto Gion Kaneko, Azabudai Hills Opened in 2023 Opened in 2023 02 JEH Group's Business Model and Growth Strategies
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30| 1 Steady Growth Through Selected New Store Openings by Kaneko and 999.9 in Japan 2 Group Synergies Achieved Through Integration of Kaneko and 999.9 3 Continuous Growth of Existing Stores Driven by Brand Strength Capture of Inbound Demand from the Recovery of Foreign Visitors 4 Further Growth Potential Realized Through Acceleration of Rollout of Global Store Network and Partnerships Growth Strategies 02 JEH Group's Business Model and Growth Strategies
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31| 57 61 63 67 74 80 12 11 14 2019/1 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 Kaneko 999.9 Steady Growth Through Selected New Store Openings by Kaneko and 999.9 in Japan Number of Directly Managed Stores in Japan(1) Seek to conduct sustainable new store opening for both Kaneko and 999.9 whilst strictly selecting the location without damaging the brand image Establishment of JEH • Utilize know-how of Kaneko to strengthen direct store openings • Seek to first open stores in urban areas with high sensitivity • Continuously seek to open stores in prime locations such as street level stores as well as in department stores and commercial facilities • Seek to strengthen store openings in regional areas of Japan where the brand has penetrated Steadily open 5-10 new stores per year for both Kaneko and 999.9(2) (net increase will be fewer stores as it includes relocations to better locations) Target Number of New Stores After Fiscal Year Ended January 2024 1 Notes: 1. Number of stores as of each fiscal year end. Number of stores for 999.9 is counted after the establishment of JEH 2. Including relocations of existing stores to favorable neighborhood locations 02 JEH Group's Business Model and Growth Strategies
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32| Further Growth Potential Realized Through Acceleration of Rollout of Global Store Network and Partnerships Seek to further expand its store network in fast-growing Asian countries, whilst nurturing brand image Target Area Strategy on Store Opening Store Format Status Quo / Short-Term Medium- to Long-Term Mainly in China Seek to enhance brand awareness by opening directly managed stores at locations where brand image can be nurtured Open directly managed stores (approx. several stores) Promote Sabae, Japan-born luxury eyewear brand to luxury-oriented overseas customersOverview of Global Strategy Greater China and other Asian countries Accelerate store opening at prime locations in major cities at a timing where brand image has penetrated Consider wide ranging partnerships with global and local companies in addition to directly managed stores (approx. several dozen stores) 2 02 JEH Group's Business Model and Growth Strategies
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33| Synergies of Owning Both Kaneko and 999.9 Group Synergies Achieved Through Integration of Kaneko and 999.9 999.9 seeks further upside by utilizing know-how from Kaneko and realizing synergies. Planning to improve profit margin by driving sales at stores with higher profitability for 999.9, which has high wholesale sales ratio Sales Share of Kaneko and 999.9 (1) Comparison of EBITDA Margins (1) of Kaneko and 999.9 • Accelerate new store opening of directly managed stores in Japan by leveraging new store opening know- how of Kaneko Sales Growth Acceleration of Store Opening in Japan Change in Unit Price • Conduct consistent change in price whilst appealing its branding to customers, which has not been aggressively implemented before • Take advantage of scale merit by shifting outsourced products to in- house, producing products as a whole JEH group Profitability Improvement Decrease in COGS Decrease in SG&A • Decrease in cost related to management division and management / infrastructure integration Sustainable Supply Chain • Enhance sustainable product supply chain by shifting production to in- house factories Store Wholesale and other 90.8% 49.0% 3 Notes: 1. As of latest fiscal year end (FY2024 results) 45.7% 34.7% 02 JEH Group's Business Model and Growth Strategies Kaneko Optical Four Nines
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34| 72,107 73,489 72,313 72,927 74,611 78,708 81,445 0 65,000 70,000 75,000 80,000 2019/1 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 Q3 62,070 65,803 67,187 69,157 69,872 72,862 76,920 0 60,000 65,000 70,000 75,000 2019/1 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 Q3 Consistent Increase in Unit Price (1) Continuous Growth of Existing Stores Driven by Brand Strength Owning 2 brands with high presence in the domestic eyewear market allows further expansion of the brands as a group, via product offering of luxury eyewear products across various categories. As a result, JEH has been realizing growth at existing stores through continuous increases in unit price vs. 2019/1 +23.9% vs. 2019/1 +13.0% 4 Mar.&Sep.2021 Mar. 2022 Oct. 2023 2024, Mar. Apr Feb.2023 Feb.2024 Change in Price Change in Price 02 JEH Group's Business Model and Growth Strategies yen yen Notes: 1. Unit price refers to aggregate price of eyewear frames and lenses. Aggregated every fiscal year, from February 1st to January 31st Kaneko Optical Four Nines
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35| 26.2% 0% 10% 20% 30% 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 Capture of Inbound Demand from the Recovery of Foreign Visitors thousand yen JEH Sales to Inbound Tourists(1) Inbound demand has recovered to the pre-COVID-19 level. With the full recovery of inbound tourists from China, sales are expected to further increase. JEH Sales to Inbound Tourists by Region China China Others Others FY2020/01 (Q1-Q3)9months FY2025/01 (Q1-Q3)9months 4 Notes: 1. Sales to inbound tourists at directly managed (excl. sales via wholesalers) 2020/1 2021/1 2022/1 2023/1 2024/1 2025/1 02 JEH Group's Business Model and Growth Strategies
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36| Appendix
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37| Key Financials million yen million yen % Sales margin million yen % Sales margin EBITDA (2) Net Profit million yen % Sales margin Gross Profit Operating Profit ROE (3) Revenue million yen % Sales margin 7,073 10,722 13,528 16,090 2022/1 2023/1 2024/1 2025/1 5,482 8,213 10,485 12,610 77.5% 76.6% 77.5% 78.4% 74.0% 75.0% 76.0% 77.0% 78.0% 79.0% 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2022/1 2023/1 2024/1 2025/1 1,130 2,226 3,700 5,000 16.0% 20.8% 27.4% 31.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 0 1,000 2,000 3,000 4,000 5,000 6,000 2022/1 2023/1 2024/1 2025/1 2,286 3,627 5,181 6,650 32.3% 33.8% 38.3% 41.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2022/1 2023/1 2024/1 2025/1 186 591 2,362 3,090 2.6% 5.5% 17.5% 19.2% -3.0% 2.0% 7.0% 12.0% 17.0% 22.0% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2022/1 2023/1 2024/1 2025/1 4.3% 12.7% 17.9% 2022/1 2023/1 2024/1 Appendix Notes: 1. Based on IFRS 2. EBITDA = Operating profit + Depreciation + Amortization of identifiable assets 3. ROE = Net profit / (Common stock + Capital surplus + Retained earnings) (as of fiscal year end)
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38| Our Philosophy Through eyewear, to inspire the world, to add to the world's cultural richness, and to share our prosperity with all our contributors.
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39| Disclaimer This document is prepared for general publication of information concerning Japan Eyewear Holdings Co., Ltd. (“JEH”) and will not constitute an offer to sell or a solicitation of an offer to buy shares of JEH’s common stock or any other securities issued by it. Any information related to market trends, economic conditions, or industries mentioned in this document is based on information available at present, and JEH does not guarantee that this information is accurate or complete. JEH disclaims any obligation to update any information contained herein. Any plan, estimation, calculation, quotation, evaluation, prediction, expectation or other forward-looking information in this document is based on the current assumptions and beliefs of JEH in light of the information currently available to it, and involves known and unknown risks, uncertainties, and other factors. Such risks, uncertainties and other factors include, without limitation: economic conditions, trends in the market for eyewear industry, shifts in customer preferences and fluctuations in the price of raw materials. This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.