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We thank you for your continued support in us.

In the first half of this fiscal year, earnings decreased compared with the same period last year; however, this decrease is due to a change in the accounting method for deducting items (which were handled as expenses before), from sales in overseas consolidated subsidiaries that were consolidated under financial statements conforming to the International Financial Reporting Standards from this fiscal year. Therefore, earnings will actually increase by 2.1% from the same period last year if business performance in the same period last year was calculated based on the current standards. In addition, profits at all stages increased and both operating income and ordinary income marked their highest records ever.

Concerning net sales in Japan, the women's brand, Bifesta, grew in addition to strong sales of summer season products of GATSBY thanks to the impact of severe heat in July and after. Net sales in Indonesia faced difficulties due to falling sales of a core brand, GATSBY, in items other than styling pomade. In other overseas countries, sales of both GATSBY and Bifesta were steady and resulted in an overall sales increase.

As for overall income, it increased mainly due to the impact of increased income in Japan and other overseas countries and changes in the payment time of part of the sales expenses.

We have positioned the 12th Middle Range Planning (MP-12) that started in the previous term (FYE March 2018) as the Corporate Infrastructure Development Period for Realizing VISION 2027. This is defined as the basic policy outlining the promotion of category strategies and thorough implementation of activities, the improvement of growth in overseas operations focusing on Indonesia, and the building of a group operation system and improving productivity per unit. In doing so we thereby started a variety of activities to ensure rapid growth along with the growth in the Asia region, which is the place of the most expected growth in the future.

In the second half of this fiscal year, in addition to proactive investment for strengthening brands, mainly GATSBY and Bifesta, we will continue to develop our foundation, for example by building a global management platform with the aim of becoming a true global company, and we will continue to achieve our goals for the current term.

We appreciate your continued support.

Motonobu Nishimura

President Executive Officer & Director