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YA-MAN LTD.Results of Operations for the First Half of Fiscal 2012

(Six months ended October 31, 2011)

Kimiyo Yamazaki, President and Representative DirectorDecember 16, 2011

Copyright © YA-MAN LTD. All Rights Reserved.

Contents

Financial Highlights of 1H FY4/12 and Earnings Forecasts …………………2First Section

g g g

Second SectionHighlights of Business Operations and Progress Report for the “Challenge 300” Medium-term Management Plan …………………13

1Copyright © YA-MAN LTD. All Rights Reserved.

First Section

Fi i l Hi hli ht f 1H FY4/12 d E i F tFinancial Highlights of 1H FY4/12 and Earnings Forecasts

Financial Highlights (1)First Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

Sales and earnings were higher as hair removal devices and cosmetics posted solid sales increasesPerformance vs. prior year and plan

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Sales and earnings were higher as hair removal devices and cosmetics posted solid sales increases, and introductions of new products like Facercise UP and Acetino Cerby were successful. Earnings at all levels were higher than the plan due to a strong performance by direct sales.

1H FY4/12 YoY Major componentsVs Plan

(Millions of yen)

Results YoY

Net sales10,639

+573( +5.7% )

Major components

Sales were higher in all distribution channels with growth backed mainly by the spring selling season for the no!no!hair series of hair removal devices

Vs. Plan

-419( -3.8％ )

SG&A expenses5,373

+217( +4.2% )

hair removal devices.

Advertising expenses increased ¥242 million because of extensive TV commercials and magazine ads to support brand strategies.

+4( +0.1% )

Operating income1,162

+265( +29.6% )

Gross profit up ¥483 million along with sales growth but operating income up ¥265 million due to higher SG&A expenses of ¥218 million resulting from growth in advertising expenses.

+85( +7.9% )

Ordinary income1,187

+279( +30.8% )

Increased ¥279 million due in part to lower interest expenses as interest-bearing debt was reduced.

+151( +14.6% )


Net income670

+166( +33.2% )

Expenses were higher, but net income increased ¥166 million as gross profit increased along with growth in sales.

+75( +12.7% )

First Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

Sales by Product Category (1)Beauty care appliances made a big contribution to sales growth, and cosmetics performed well, too.

y g y ( )

(Millions of yen)

1H FY4/12Remarks

Amount Composition ratio

YA-MAN’s core product category that is centered onBeauty care appliances 6,007 56.4%

YA MAN s core product category that is centered on home esthetique devices no!no!hair series of hair removal devices made a big contribution to sales growth

Steady sales; this category is mainly wholesaleWellness appliances and fitness devices 1,054 9.9%

Steady sales; this category is mainly wholesale sales of fitness equipment and lifestyle appliances to mail-order retailers

Cosmetics and A big increase in sales due to strong sales of OnlyCosmetics and variety goods 2,343 22.0%

A big increase in sales due to strong sales of Only Minerals cosmetics in the store sales channel and repeat sales in the direct sales channel

Includes wholesale sales of apparel products in theOthers 1,235 11.7% Includes wholesale sales of apparel products in the mail-order channel and other products

Total 10,639 100.0%



Sales by Product Category (2)

Hair removal devices Cosmetics

y g y ( )

5,000 2,000

no!no!hair series Only Minerals line of cosmetics(Millions of yen) (Millions of yen)

3,000

4,000

1,500

0

1,000

2,0001,000

01H FY4/10 2H FY4/10 1H FY4/11 2H FY4/11 1H FY4/12

5001H FY4/10 2H FY4/10 1H FY4/11 2H FY4/11 1H FY4/12

A core spring and summer product Consistent growth backed in part by repeat sales

Note: Figures based on shipments Note: Figures based on shipments

Started a “support course” in the current fiscal year Sales are increasing at

directly operated stores too


yIntroducing expendable products directly operated stores, too

Sales by Distribution Channel (1)First Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

1H FY4/11 1H FY4/12

Sales were higher in all three major channels: Mail-order sales, wholesale store sales and direct sales

y ( )

(Millions of yen)1H FY4/11 1H FY4/12

RemarksAmount Composition

ratio Amount Composition ratio

Sales were higher due to consistent volume of sales on TV shopping

Wholesa

Mail-order sales 3,399 33.8% 3,664 34.4%

volume of sales on TV shopping channels and solid growth in sales of Acetino Cerby, a new product, on terrestrial TV shopping programsSales of no!no!hair series of hair ale

Store sales 3,571 35.5% 3,710 34.9%removal devices were higher at home appliance stores while strong sales of Only Minerals cosmetics seen at variety shops

Direct sales 2,911 28.9% 3,176 29.9%

Sales growth was backed by extensive advertising expenditures for infomercials, newspaper inserts, magazine ads and other activities as well as by repeat sales of Only Mineralscosmetics

Overseas, others 184 1.8% 87 0.8% Focusing on preparations to start

operations in China


Total 10,066 100.0% 10,639 100.0%


Sales by Distribution Channel (2)Store sales

y ( )

Home appliance stores prominently display YA MAN products


Home appliance stores prominently display YA-MAN products


Sales by Distribution Channel (3)

Direct sales: Repeat-sales ratio is increasing

y ( )

50.0%

60.0%

30 0%

40.0%

20.0%

30.0%リピート購入人数割合

リピート購入金額割合

Repeat sales as pct. of no. of customersRepeat sales as pct. of total sales

0.0%

10.0%

0.0%

2008

.520

08.6

2008

.720

08.8

2008

.920

08.1

020

08.1

120

08.1

220

09.1

2009

.220

09.3

2009

.420

09.5

2009

.620

09.7

2009

.820

09.9

2009

.10

2009

.11

2009

.12

2010

.120

10.2

2010

.320

10.4

2010

.520

10.6

2010

.720

10.8

2010

.920

10.1

020

10.1

120

10.1

220

11.1

2011

.220

11.3

2011

.420

11.5

2011

.620

11.7

2011

.820

11.9

2011

.10

A sound base for sales due to growth in repeat buyers

May

200

8Ju

n 20

08Ju

l 200

8Au

g 20

08Se

p 20

08O

ct 2

008

Nov

200

8D

ec 2

008

Jan

2009

Feb

2009

Mar

200

9Ap

r 200

9M

ay 2

009

Jun

2009

Jul 2

009

Aug

2009

Sep

2009

Oct

200

9N

ov 2

009

Dec

200

9Ja

n 20

10Fe

b 20

10M

ar 2

010

Apr 2

010

May

201

0Ju

n 20

10Ju

l 201

0Au

g 20

10Se

p 20

10O

ct 2

010

Nov

201

0D

ec 2

010

Jan

2011

Feb

2011

Mar

201

1Ap

r 201

1M

ay 2

011

Jun

2011

Jul 2

011

Aug

2011

Sep

2011

Oct

201

1


A sound base for sales due to growth in repeat buyers

Components of Change in Operating IncomeFirst Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

Operating income increased ¥265 million as sales growth raised gross profit by ¥483 million and SG&A expenses rose ¥217 million mainly because of higher advertising expenses.

p g p g

Positive PositiveHigher cost Negative

p y g g p

(Millions of yen)

Positive effect of

higher sales

Positive effect of

lower cost of sales ratio

Higher cost of sales due

to sales growth

Negative effect of higher SG&A

expenses

+573 -229+139 -217

+265

1 162

+265

8971,162


1H FY4/11 1H FY4/12

Balance SheetsFirst Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

Strengthened the balance sheet by using operating cash flows to reduce bonds and loans

End of FY4/11 End of 1H FY4/12

Cash and deposits 3,119 3,813 Increased due to higher operating cash flows

(Millions of yen)

p , ,

Notes and accounts receivable-trade 3,127 2,591

Inventories 3,863 4,251

operating cash flows

Increased inventories due to strong sales of Only Minerals cosmetics

Other assets 1,271 1,279

Total assets 11,381 11,936

Minerals cosmetics

Notes and accounts payable-trade 1,348 1,847

Bonds and loans payable 2,296 1,739 Reduced interest-bearing

debtOther liabilities 2,032 2,087

Net assets 5,702 6,265

Total liabilities and net 11 381 11 936


assets 11,381 11,936

Cash FlowsFirst Section: Financial Highlights of 1H FY4/12 and Earnings Forecasts

Higher operating cash flows were used to reduce debt in order to further improve financial soundness

1H FY4/12 Remarks

(Millions of yen)

Net cash provided by (used in) operating activities 1,404 Due to higher earnings and steady collection of accounts receivable-trade

Net cash provided by (used in) investing activities -35p y ( ) g

Net cash provided by (used in) financing activities -673 Used cash to reduce interest-bearing debt

Effect of exchange rate change on cash and cash equivalents -0

Net increase (decrease) in cash and cash equivalents 694equivalents

Cash and cash equivalents at beginning of period 2,524


Cash and cash equivalents at end of period 3,218


Earnings Forecasts for FY4/12

Forecast growth in sales and earnings due to outlook for more growth in sales in all channels for current hit products like the no!no!hair series and Only Minerals cosmetics and for contributions from the la nch of ne prod cts like steamers and tapping rollers in the facial care sector

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FY4/11 FY4/12 (fct.)A t Composition Y Y A t Composition Y Y

the launch of new products like steamers and tapping rollers in the facial care sector.

(Millions of yen)

Amount Composition ratio YoY Amount Composition

ratio YoY

Net sales 19,668 100.0 +2.9% 22,020 100.0 +12.0%

Operating income 1,724 8.8 +3.2% 2,017 9.2 +16.9%

Ordinary income 1,699 8.6 +11.1% 1,939 8.8 +14.1%

Net income 941 4.8 +10.4% 1,113 5.1 +18.3%

Dividend per share (yen) 30 - +30.4% 36 - +20.0%

Payout ratio (%) 18.6% - - 18.9% - -

Forecast increase in dividend per share to ¥36 in FY4/12


Forecast increase in dividend per share to ¥36 in FY4/12

Highlights of Business Operations and Progress Report

Second Sectiong g p g p

for the “Challenge 300” Medium-term Management Plan


Highlights of Business OperationsSecond Section: Highlights of Business Operations and Progress Report for the “Challenge 300” Medium-term Management Plan

g g p

(1) The pioneer in using professional beauty care expertise to create beauty care appliances for consumersYA-MAN – The professional-grade esthetic products company

(2) The market for beauty care appliances is still in the early stage of growth

(3) YA-MAN is creating the concept of at-home esthetic care in Japan and other countries, and establishing brands in this p gmarket sector


(1)-1 The pioneer in using professional beauty care expertise to create beauty care appliances for consumers

Second Section: Highlights of Business Operations and Progress Report for the “Challenge 300” Medium-term Management Plan

y pp

YA-MAN – The professional-grade esthetic products company

Hi t

Dedicated to supplying products with a “heart” that are backed by advanced technologies to provide support for the desire of customers for beauty and a healthy life

History

1978 Company established

1985 Developed the Body Fat Scale

1998 Started wholesale distribution of products directly to mail-order companiesp

2001 Started wholesale distribution of products directly to home appliance stores

2007 Started a direct sales business using infomercials

Launched sales of “Platinum Germa Roller”

2008

2007

2007 Started a direct sales business using infomercials

2009 Shares listed on the JASDAQ Securities Exchange

Sh li t d th S d S ti f th T k St k

2009

Launched sales of “Only Minerals”

Launched sales of “no!no!hair”


2011 Shares listed on the Second Section of the Tokyo Stock Exchange

(1)-2 Strengths of the YA-MAN Business ModelSecond Section: Highlights of Business Operations and Progress Report for the “Challenge 300” Medium-term Management Plan

Excellence in

YA-MAN – The professional-grade esthetic products company

Accurately targets customers’ needsMany patented technologiesEsthetique salon equipment expertise

Excellence in manufacturing

A diverse lineup of beauty care products

One-stop beauty

Activities cover all major distribution channels

Sales capabilities

Call center Face-to-face sales at stores

Confidence

q q p p

InfoProduct development

Id f d t

Direct sales

Follow-up Counseling

Cosmetics and variety goods

Beauty care

appliances

Ideas for new products

Store sales Mail-order sales

CounselingWellness appliances

Fitness devices

Feedback


Become the de facto standard in the beauty care and health device industry

(2)-1 The market for beauty care appliances is still in the early stage of growth


stage of growth

Beauty Care Appliance Market

47,030

45 000

50,000

(Millions of yen)

29,05032,760

38,15040,990

30 000

35,000

40,000

45,000

15 000

20,000

25,000

30,000

0

5,000

10,000

15,000

02006 2007 2008 2009 2010

Th b t li k t h b di idl i t

Note: Shipment data according to March-2011 Survey of Fuji Keizai Co., Ltd.,


The beauty care appliance market has been expanding rapidly in recent years



g g

Facial Care Market

2,50050,000

+24.2%+17.9%

(Millions of yen) (Thousands of units)

1,500

2,000

30,000

40,00024.2%

500

1,000

10,000

20,000

+21.6%+17.7%

002009 2010 2011 (est.)

Shipment amount (millions of yen, left scale)Shipment volume (thousands of units, right scale)

Note 1. Facial care excludes products for eyelashes and eyebrowsNote 2. The estimation is as of December 2011

In Japan’s facial care market, 2010 shipment volume increased by an estimated 24.2% to 1.95 million units and the monetary value of shipments increased by an estimated 21.6% to ¥29.3 billion. The forecast for 2011 is for increases of 17.9% to 2.3 million units and 17.7% to ¥34.5 billion. Companies are introducing many types of facial care devices, including roller and mist/steamer products, which indicates that the facial care market is expanding.


Furthermore, growth of the facial care market is expected to continue as alliances are formed with cosmetics makers that werepreviously competitors and cosmetics companies start selling facial care devices.

Source: 2012 Self-care Health Device Market and Outlook, Yano Research Institute, Ltd.



stage of growth

Beauty Care Appliance Market

This market has 11 categories based on body locations, benefits and other parameters

Beauty care appliance categories

Currently moisturizing products are the primary source of growth in the beauty care appliance market

Market size of more than ¥10 billionMarket size of ¥5 billion to ¥10 billionMarket size of less than ¥5 billion

Benefits/Functions

Tightening/ Cleansing/ Eyelash, eyebrow Moisturizing

steamers

Benefits/Functions

Moisturizing Tightening Cleansing Hair styling

Face slimming

Scalp care

follicle care and vellus care

Hair irons

Moisturizing facial care devices

High-performance dryers

Body loca

Face

Hair

¥41 billion

Features moisturizing benefits

Tightening/slimming Cuticle care Hair removal

(for women)

ation

S NRI I t t i b t li d hild i (N b 2010)

Whole body

¥50 billion

¥31 billion

Features moisturizing benefits


Source: NRI Internet survey concerning beauty care appliances and childcare services (November 2010)Estimates from Fuji Keizai Co., Ltd. “Cosmetics Marketing Overview”

¥31 billion



stage of growth

Hair Removal Devices Market

9,000

(Millions of yen)

2,870

6,000

7,000

8,000 Without YA-MAN

5,480 5,310 4,635 3 940

3,200 3,000

4,000

5,000

YA-MAN

290 365 210 1,350

3,940

0

1,000

2,000

2006 2007 2008 2009 2010

YA MAN

2010 market share: 66.7%

Note: Shipment data according to March-2011 Survey of Fuji Keizai Co., Ltd.,


YA-MAN is driving growth as the leader in this market sector



Uruoi Station

stage of growth

A 24-hour moisturizing station for daytime and nighttime use


(3)-1 YA-MAN is creating the concept of at-home esthetic care in Japan and other countries, and establishing brands in this market sector


, g

November 9 11 2011November 9-11, 2011YA-MAN at Cosmoprof Asia 2011, an international beauty care trade show at the Hong Kong Convention & Exhibition Centre

YA-MAN participates in international trade shows as one of the most innovative companies in the


beauty care industry.



Sales of YA-MAN products begin at a Hong Kong department store

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Sales of YA MAN products begin at a Hong Kong department storeWindsor House

A department store in Hong Kong that sells high-end merchandise has started selling YA-MAN


products.



Introduce products in new categories by using patents and development expertise

, g

Invest aggressively in fields where YA-MAN can be first to introduceInvest aggressively in fields where YA MAN can be first to introduce household beauty care and health appliances

New medical device categories Medical device categoriesNew medical device categories in Japan

Medical device categories in overseas markets

Esthetique devices

Medical care

devices


Establish two pillars of growth

Targets of the “Challenge 300” Medium-term Management Plan


g g g

(Millions of yen)

FY4/11 Results FY4/12 Plan FY4/13 Plan FY4/14 Plan

Net sales 19,668 22,020 25,000 30,000

Operating income 1 724 2 017 2 400 3 100Operating income 1,724 2,017 2,400 3,100

Ordinary income 1,699 1,939 2,300 3,000

Net income 941 1,113 1,300 1,700, , ,

Major indicators (1) FY4/11 Results FY4/14 Targets Goal

Sales growth rate +2.9% ¥30bn in net sales Annual growth of 10% to 20%Sales growth rate g

Ordinary income ratio 8.6% 10%

Improve profitability while maintaining sufficient investments in R&D and advertising/marketing

Major indicators (2) FY4/11 Results FY4/12 Plan Goal

Dividend per share (yen) 30 36 Increase dividend along with growth in

earnings


Medium-term Management Plan Progress ReportSecond Section: Highlights of Business Operations and Progress Report for the “Challenge 300” Medium-term Management Plan

FY4/10 FY4/11 1H FY4/12(Millions of yen)

FY4/10Total sales

FY4/11Total sales

1H FY4/121H results + 2H plan

4Q 5,216 5,15810,960 (fct.)

3Q 4,396 4,4432Q 4 395 4 793 4 9652Q 4,395 4,793 4,9651Q 5,106 5,272 5,674

Total 19,115 19,668

250

Net sales(100 millions of yen)

150

200

0

50

100

FY4/10 FY4/11 FY4/12 (1H lt 2H l )


FY4/10 FY4/11 FY4/12 (1H results + 2H plan)

1Q 2Q 3Q 4Q Plan

Thank you for attending today’s presentation.y g y p

Contact

YA-MAN LTD. Finance Department,

Administration Division

Tel

E-mail [email protected]

+81 (0) 3-5665-7330

This presentation material was prepared for the purpose of providing information about the Company to investors and is notintended as a solicitation for an investment.

Forward-looking statements in this presentation material are based on targets and forecasts and are not assurances orguarantees concerning performance in the future. Investors should be aware that actual results of operations may differ fromthe Company’s current forecasts.

Statements concerning the industry and market of beauty care and health appliances and other related subjects are based ondata that the Company believes are reliable. However, the Company does not guarantee that this information is accurate orcomplete.

This presentation material as prepared on the premise that sers ill ass me f ll responsibilit for an decisions the reach


This presentation material was prepared on the premise that users will assume full responsibility for any decisions they reachregardless of the purpose of using this information. The Company assumes no responsibility whatsoever for the results of anyof these decisions.

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