Milbon Co., Ltd.
FY2015 First Half(December 21, 2014 - June 20, 2015)

Financial Results Presentation Materials

July 1, 2015
Copyright © 2015 Milbon. All rights reserved.

Table of Contents
P2

Consolidated Operating Results

P3-6

Consolidated Sales by Product Category

P7

Aujua

P8

Consolidated Balance Sheet (Chart)

P9

Consolidated Statement of Earnings

P10

Consolidated Trends in Capital Expenditures and Others

P11

Trends in Market Related Data, Trends in Fieldpersons

P12-13 Outlook of Milbon Group1
Copyright © 2015 Milbon. All rights reserved.

Consolidated Operating Results (FY 2015 First Half)

Sales in hair care category and overseas market have led to overall sales increase(Unit: million yen)Amount
FY2014First Half

FY2015First Half

Increase/DecreaseYear-on-year
Comparison(%)

Net sales

12,173

13,074901

107.4

Gross profit

8,436

9,138

701

108.3

SG&A expenses

6,292

6,768

476

107.6

Operating income

2,144

2,370

225

110.5

Ordinary income

1,981

2,270

289

114.6

Net income

1,190

1,444

254

121.4
2

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Consolidated Sales by Product Category[Hair Care Product](1)Aging care and leave‐in items containing CMADK have been steadily growing(FY2015 First Half)(Unit: million yen)

FY2014 First Half

FY2015 First Half

6,865

Increase/Decrease

7,655

YOY Comparison (%)

790

111.5

• Activities were focused on enhancing hair designers’ ability to respond to matured women who seek true
professional advice, as well as to younger women in their mid‐20s, whose understanding of beauty is beginning tochange.
• Products containing CMADK, Milbon’s original hair keratin restoring ingredients, and aging care products havecontinuously sold well. Jemile Fran brand was launched targeting at women in their 20s and doing very well.
* Products containing CMADK includes: DEESSE’S Elujuda Emulsion, Aujua Imurise Line series, Jemile Fran, etc.

New Products

PLARMIAREFINING SERIESDEESSE’S
DAYCHARM UV MIST

A new salon menu for simultaneously caring
for both hair and scalp that has changed withage.
(Unit: million yen)

A UV treatment mist that wraps the hair in apleasant fragrance and protects hair color
from sunlight.
(Unit: million yen)

TargetResults

Prog. rate

50013026.0％

Jan 29 Debut

TargetResults

Prog. rate

18010055.8％

Feb 26 Debut
3Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Hair Care Product](2)New Products

Jemile Fran Shampoo & Treatment
A new hair care brand for working women in their 20. Enlightening young women
to hair care, timed to changes in their sense of beauty. Lock moisture into the hair,improve cuticle and make hair tangle-free and bouncy.
(Unit: million yen)

TargetResults

Prog. rate

400

249

62.4%

Apr 21 Debut

4Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Hair Coloring Product]
New color line approach and brand new gray color launch led to a rise in sales(FY2015 First Half)(Unit: million yen)

FY2014 First Half

FY2015 First Half

4,397

Increase/Decrease

4,606

YOY Comparison (%)

209

104.8

• New color line to match Spring/Summer 2015 trend was launched. The educational activities have proactivelycontinued to be focused on supporting hair designers to enhance their abilities to create trend hair color design
to their customer.
• Brand new hair color range Ordeve Crystal was launched in May. This new product made it possible to dye hair
peppered with gray evenly for a clear color from the roots to the tips, and earned a good reputation.

New Products

ORDEVE CRYSTALORDEVE additional color
INNOCENT LINEA hybrid color for matured women whowant to continue enjoying the color,
tone and texture with beautiful finish
from the roots to the tips.

A soft sheen created by achromaticcolor express a color purity(Unit: million yen)

(Unit: million yen)

TargetResults

Prog. rate

50036973.9%

Jan 29 Debut

TargetResults

Prog. rate

740

253

34.3%

May 28 Debut
5Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Permanent Wave Product]
Sales in overseas are in a good shape, yet overall sales have been downward trend(FY2015 First Half)
FY2014 First Half

797

(Unit: million yen)

FY2015 First Half

718

Increase/Decrease- 79

YOY Comparison (%)

90.1

6
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Aujua ［Results and Targets］
Aging care series continued to grow, expanding number of salons and sales
Number of Aujua salons
FY２０１4 year-end

FY２０１5 Q2-end

2,002 salons

2,286 salons

Sales (FY2015 First Half)
FY２０１4First Half

FY２０１5First Half

1,552

1,884

Comparison
with the 2014
year end

127.9％(Unit: million yen)

YOYcomparison

121.4％

What’s new
Aging care series
OATHENAM LINE

Brand concept

Product range

A hair care brand that nurtures
the beauty of Japanese women’s
hair born from the climate, culture
and hair characteristics of Japan

What is Aujua?
A hair care series that responds
to every individual’s hair concerns
by creating and evolving a haircare program just for one
individual. That is Aujua.

・14 line ・90 items

xxx(Unit: million yen)(Unit: million yen)

400

Aging care series
Hair care series
Scalp care series
Climatic care series

Aging care series
IMMURISE Jell Stemrizer

Enhances the strength and damage
resistance of hair that has become brittlewith aging from coloring and perming
TargetA wide-ranging line-upthat fits the hair texture ofeach customers
・4 series

Results

91

TargetProg. rate

22.9％

Jan 30 Debut

100

Results

24Prog. rate

24.4％

Apr 1 Debut
7

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Consolidated Balance Sheet(Unit: million yen)

AssetsLiabilities and Net Assets
30,04930,04928,13828,138Cash & deposit
Notes & A/R
Inventories

7,386
3,427
3,076

PP&E
Intangible
Inv. & others

1,182

10,530448
2,851

December 20, 2014

Cash & deposit
Notes & A/R
Securities
Inventories

15,014
PP&E
Intangible
Inv. & others

4,034
Current
Noncurrent

3,869
165

555

4,268
321

4,429
3,406
2,999
3,705

11,179411
3,423

June 20, 2015

Net Assets

Noncurrent Assets

13,831

727

Liabilities

Current Asset

15,03414,307

4,590
Current
Noncurrent

24,104

1,354

25,458

Capital stock
2,000
R/E
21,655Comp. income
784

Capital stock
2,000R/E
22,507
Comp. income 1,290

December 20, 2014

June 20, 2015
8Copyright © 2015 Milbon. All rights reserved.

Consolidated Statement of Earnings(FY 2015 First Half)(Unit: million yen)Amount
FY2014First Half

FY2015First Half

Increase/Decrease

YOYcomparison
(%)

Sales

12,173

13,074901

107.4

Cost of sales

3,736

3,935

199

105.3

Gross profit

8,436

9,138

701

Others94(-18)13,074

Fluctuation Factor(+901)＜Increase in SG&A expenses＞• Salaries due to increase the numberof personnel• Sales promotional tools• Rental for newly opened Ginza Branch

Perms
718(-79)
9,138

Colors4,606(+209)-3,935

Hair cares
7,655(＋790)

2,370

Net sales

6,292

6,768

476

107.6

Operatingincome

2,144

2,370

225

110.5

Ordinary
incomeNet income

1,981
1,190

2,270
1,444

289
254

114.6
121.4

1,444-815

108.3

SG&A
expenses

2,270-6,768
Cost ofsales

Grossprofit

SG&A
OperatingincomeOrdinary
incomeIncometaxes

NetincomeBreakdown of net sales by product category
Ratio
(%)

YOYchange

YOYcomparison (%)FY2014First Half

FY2015First Half

Hair care products

6,865

7,655

58.6

790

111.5

Hair coloring product

4,397

4,606

35.2

209

104.8

Permanent wave
products

797718

5.5

- 79

90.1

Others

113

94

0.7

- 18

83.5

9
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Trends in Capital Expenditures and Others(Unit: million yen)

Category

FY2011FY2012FY2013

FY2014FY2015Jan.-Jun.

Plan for
FY2015

Total Expenditures

528

840

1,680

1,028

1,036

2,652

Depreciation andamortization

1,011

947

878

1,004

497

1,062

R&D expenses

870873

969

1,168

573

1,211

R&D exp. to sales ratio

4.3%

4.1%

4.2%

4.8%

4.6%

4.7%

FY2015 First Half CAPEX Main Items• Purchase of land adjacent to Yumegaoka Plant• Initial expenditure for Tokyo Ginza Branch• Relocation of Sapporo Sales Office

10Copyright © 2015 Milbon. All rights reserved.

Trends in Market Related Data, Trends in FPs
Market trends (Japan)
Number of salons(Unit: Number of Salons: Salons / Number of hair dresser: people / Number of beauty customer)

2010

2011

2012

2013

2014

223,286

228,429

231,134

234 089

2015—

Number ofhairdressers

456,872

471,161479,509

487 636—

Beauty customer
population

39,812

39,64039,076

38,46837,8472013

2014

Remarks——

37,741(As of Jan.1)

Ministry of Health, Labor and Welfare Public Health Administration Report
Number of beauty salon facilities/number of employees (year-end)

Statistics Bureau, Ministry of Internal Affairs and Communications:
population statistics as of October 1st each year
Population statistics for females aged 15 to 64

Fieldpersons trends (by country)
2011

2012

2015 Q2

203

221

230

238

241

Milbon Co., Ltd.

95929595

ーUSA910121210

MILBON USA, Inc.

39353640ー

CHINA

1115161717

Milbon Trading (Shanghai) Co.,
Ltd.

11121725ーKOREA

1113181720

Milbon Korea Co., Ltd.

30343964ー--

36668ーJAPANTHAI
Milbon (Thailand) Co., Ltd.

Others

438

11

1195

13555

50

ー

Upper column：
Number of FPs (unit: persons)Lower column：
Sales per FP (unit: million yen)

*31 FPs are under training (as of Jun. 20, 2015)(not included in the left chart)

11Copyright © 2015 Milbon. All rights reserved.

Outlook of Milbon Group (FY2015 First Half)
Overseas market mainly in Asia contributed to the sales increase of the Milbon Group
Number ofemployees

Sales (million yen)

Number of FPs

JAPAN
Milbon Co., Ltd.

USA241

CHINA

23

Milbon Korea Co., Ltd.

THAI
Milbon(Thailand)Co., Ltd.

Forex rates

FY2014First Half

FY2015First Half

10,95911,441

104.4

1960

--230

301

130.7

2004

1$=
101.5

116.71

200

279

139.8

2009

1 yuan =
16.63

19.06

487

670

137.4

2009

1 won =
0.09510.1071

23

47

206.3

2013

1 baht =
3.15

3.56

271

333

122.7

---

1410

KOREA

Start
operations

FY2014FY2015573MILBON USA, Inc.

Milbon Trading(Shanghai) Co., Ltd.

YOYcomparison

1730
2049611

Others *1

11*1: Taiwan, Hong-Kong, Vietnam, Malaysia, Turkey, Indonesia, Philippine and others
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12Outlook of Milbon Group (FY2015 First Half)JAPAN (Milbon Co., Ltd.)New gray color products, Ordeve Crystal and Villa Lodola Color, were launched and well received under a competitive market condition.
In addition to expanding product lineups for matured women, new hair care brand Jemile Fran shampoo and treatment, targeted at workingwomen in their 20s, were launched to enlighten them to hair care. Efforts are being made to create customers for life, introducing theprofessional designs and cares when young women are awakening to beauty.

USA (MILBON USA, INC.)
Milbon USA expanded its sales area to 7 states in east coast after our contracted distributor acquired another one. Proactive educational activities
conducted by Milbon USA and sales rep from distributor contributed to the sales increase. Sales volume at the beginning of the quarter decreased
due to the backlash following the price increase in January. However, Plarmia Hair Serum, launched in February got a reputation and its sales weredoubled than the target two month after the launch.

CHINA (Milbon Trading (Shanghai) Co., Ltd.)
Milbon Shanghai held a policy announcement and management seminars for top hair salons. Activities are being focused on enhancing educationand creative skills for salon staffs, resulting in strengthening a close relationship with distributors. Sales of hair coloring category have been goingwell through the promotion activities for Ordeve additional color, targeting beauty‐conscious women in their 20s to 30s. Sales of hair care
category are also increasing thanks to in‐salon treatment products growth.

KOREA (Milbon Korea Co., Ltd.)
Ordeve additional colors Mermaid Line and High Color Saturation Red Series, product line limited to Asia, were launched in February. A large
number of educational activities, such as introducing new color lines together with the seasonal trend information at the group seminar or at anindividual salon, as well as promotion campaign with original related goods were well‐received by hair salons. Three new sales staffs joined thecompany and started OJT to gain necessary skill set as a Fieldperson. Milbon Kroea’s sales structure has been steadily built up to reinforce
company’s educational system.

Thailand (Milbon (Thailand) Co., Ltd.)As for the Sales Dept., an event of Elujuda Emulsion for Thai media which was held in Osaka went well, leading to continued growth in sales.
Milbon Thailand has been expanding its market and now is on the way to establish a leading position that can deliver latest trend in Japan. TheCompany invited popular hair designers from Japan to hold Spring/Summer trend color seminars, and further, the Innocent Line was released at
the same time it went on sale in Japan. Production Dept., the export values have been substantially growing since January, after main exporting
country Korea obtained their import certificate. Orders from other countries has also steadily increasing.

13
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Statements concerning the future such as the earnings forecasts given in this document
are based on information currently in the possession of the Company and on
assumptions that the Company considers reasonable.

Copyright © 2015 Milbon. All rights reserved.