Milbon Co., Ltd.
FY2015 First Quarter (3 months ended March 20, 2015)

Financial Results Presentation Materials

March 27, 2015
Copyright © 2015 Milbon. All rights reserved.

Table of Contents
P2

Consolidated Operating Results

P3-5

Consolidated Sales by Product Category

P6Aujua

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 Group1Copyright © 2015 Milbon. All rights reserved.

Consolidated Operating Results (FY 2015 3 months)

Sales in overseas markets and hair care category have led to overall sales increase(Unit: million yen)Amount
FY20143 months

FY20153 months

Increase/Decrease

Year-on-year
Comparison(%)

Net sales

5,798

6,083

284

104.9

Gross profit

4,026

4,282

255

106.3

SG&A expenses

3,082

3,284

202

106.6

Operating income

94499753

105.7

Ordinary income

849

980

130

115.3

Net income

500635

134

126.9
2

Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category [Hair Care Product]
Sales of aging care and CMADK products have been steadily growing(FY2015 3 months)(Unit: million yen)

FY2014 3 months

FY2015 3 months

3,099

Increase/Decrease

3,537

YOY Comparison (%)

437

114.1

• Activities were focused on enhancing hair designers’ ability to respond to matured woman who seek true
professional advice. Aging care related products that earned a good reputation last year and have continued tosell well.
• Products containing CMADK, Milbon’s original ingredients, were well established in last year, and has
continuously sold well.

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)

TargetResultsAchievement. rate

500

102

20.5％

Jan 29 Debut

TargetResultsAchievement. rate

180

68

38.0％

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

Consolidated Sales by Product Category [Hair Coloring Product]
Although efforts were made on promoting new additional color, yet sales have been on a downward trend(FY2015 3 months)(Unit: million yen)

FY2014 3 months

FY2015 3 months

2,268

2,172

Increase/Decrease- 96

YOY Comparison (%)

95.7• New color line to match Spring/Summer 2015 trend was launched. Overall sales in hair coloring category havebeen gradually decreasing due to the accelerated market competition although activities were focused on
supporting hair designers to enhance their abilities to create trend hair color to their customer.

New Products

ORDEVE additional color
INNOCENT LINEA soft sheen created by achromaticcolor express a color purity(Unit: million yen)

TargetResultsAchievement. rate

500

182

36.6％

Jan 29 Debut4Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Permanent Wave Product]
Hair straightening, core products have kept in good standing, yet sales by category have decreased(FY2015 3 months)
FY2014(Unit: million yen)

FY2015

379

Increase/Decrease331- 47

YOY Comparison (%)

87.5

5
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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 Q1-end

Comparison
with the 2014
year end

2,002 salons

2,127 salons

106.2％

Sales (FY2015 3 months)
FY２０１43 months

FY２０１53 months

695852

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(Unit: million yen)
to every individual’s hair concerns
YOYby creating and evolving a haircare program just for one
comparison
individual. That is Aujua.

122.6％

A wide-ranging line-upthat fits the hair texture ofeach customers
・4 series
Aging care series
Hair care series
Scalp care series
Climatic care series

・14 line ・89 items

What’s new
Aging care series
OATHENAM LINE
Enhances the strength and damage
resistance of hair that has become brittle
with aging from coloring and perming(Unit: million yen)

Target400

Results

49

Achievement. rate

12.5％

Jan 30 Debut
6

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This page is intentionally left blank7

Consolidated Balance Sheet(Unit: million yen)

AssetsLiabilities and Net Assets
28,33528,138Current
Noncurrent

Cash & deposit
Notes & A/R
Inventories

7,386
3,427
3,076

PP&E
Intangible
Inv. & others

922

10,530448
2,851

December 20, 2014

Cash & deposit
Notes & A/R
Inventories

6,505
3,067
3,560

14,754
PP&E
Intangible
Inv. & others

11,260412
3,080

March 20, 2015

Net Assets

Noncurrent Assets

13,831

-726

3,869
165

-139

Current
Noncurrent

3,714
181

Liabilities

Current Asset

13,581

14,30728,335
3,895

28,138
4,034

24,104336

24,440Capital stock
2,000
R/E
21,655Comp. income784

Capital stock
2,000R/E
21,698Comp. income 1,079

December 20, 2014

March 20, 2015
8

Copyright © 2015 Milbon. All rights reserved.

Consolidated Statement of Earnings(FY 2015 3 months)(Unit: million yen)Amount
FY20143 months

FY20153 months

Increase/Decrease

YOYcomparison
(%)

Sales

5,798

6,083

284

104.9

Cost of sales

1,771

1,800

29101.7

Gross profit

4,026

4,282

255

Others41(-8)

6,083• Salaries due to increase the numberof personnel• Sales promotional tools
4,282

Colors2,172(-96)--1,800

Hair cares3,537(＋437)

997

3,284

202

106.6

Operatingincome944

997

53105.7

Ordinary
income849980130

115.3

Net income

500635

134

126.9

980

-3,284635-344

Net sales

3,082＜Increase in SG&A expenses＞

Perms
331(-47)

106.3

SG&A
expenses

Fluctuation Factor(＋284)

Cost ofsales

Grossprofit

SG&A
OperatingincomeOrdinary
incomeIncometaxes

Net
incomeBreakdown of net sales by product category
FY20143 months

FY20153 months

YOYchange

YOYcomparison(%)

Hair care products

3,099

3,537437

114.1

Hair coloring product

2,268

2,172

△ 9695.7Permanent wave products

379

331

△ 4787.5Others

5041△882.3

9Copyright © 2015 Milbon. All rights reserved.

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

FY2015 Plan forJan.-Mar. FY2015

Category

FY2011FY2012FY2013

FY2014

Total Expenditures

528

840

1,680

1,028

839

2,652

Depreciation andamortization

1,011

947

878

1,004

238

1,062

R&D expenses

870873

969

1,168

277

1,211

R&D exp. to sales ratio

4.3%

4.1%

4.2%

4.8%

4.8%

4.7%

FY2015 3 months CAPEX Main Items• Purchase of land adjacent to Yumegaoka Plant• Initial expenditure for Tokyo Ginza Branch

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)

2009

2010

2011

2012

2013

2014

223,645

223,286

228,429

231,134

234 089

Remarks—

Number ofhairdressers

453,371456,872

471,161479,509487 636—

Beauty customer
population

39,72039,812

39,64039,076

38,46837,8472013

2014

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)
20112012

2015 Q1

203

221

230

238241

Milbon Co., Ltd.

95929595ーUSA

910121212

MILBON USA, Inc.

39353640ーCHINA

1115161719

Milbon Trading (Shanghai) Co.,
Ltd.

11121725ーKOREA

1113181720

Milbon Korea Co., Ltd.

30343964ー--

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

Others438111395

135

55

50

ー

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

11Copyright © 2015 Milbon. All rights reserved.

Outlook of Milbon Group (FY2015 3 months)
Overseas market mainly in Asia contributed to the sales increase of the Milbon Group
Number ofemployees

Sales (million yen)

Number of FPs

JAPANMilbon Co., Ltd.

USA

23THAI
Milbon(Thailand)Co., Ltd.

FY20153 months

5,203

5,276

101.4

1960--114

162142.32004

1$=
100.25114.23

91

113

124.9

2009

1 yuan =
16.67

18.81

233

327

140.5

2009

1 won =
0.09360.10601124216.4

2013

1 baht =
3.16

3.49

145

177

122.6

---

16CHINAMilbon Korea Co., Ltd.

Forex rates

FY20143 months

241

12

KOREA

Start
operations

FY2014FY2015531

MILBON USA, Inc.

Milbon Trading(Shanghai) Co., Ltd.

YOY
comparison

1930
20
49
6
13

Others *1

13*1: Vietnam, Malaysia, Turkey, Indonesia and others
Copyright © 2015 Milbon. All rights reserved.

12Outlook of Milbon Group (FY2015 3 months)JAPAN (Milbon Co., Ltd.)
While the hair color category has continued to see downward trend in sales due to an intensifying competition, our hair care category has showedsteady growth with the rising demand for aging hair care products. We also have made a variety of preparations for advancing onto a new stage
for growth, including acquiring land adjacent to Yumegaoka Plant, our main production site, in March and establishing a branch in Ginza, Tokyo’s
high‐class shopping district.

USA (MILBON USA, INC.)
We now are ready to start distributor system in a total of seven East Coast states since our current distributor, started dealing with us last year,acquired another distributor, trading in other states. We have also been faring well in our development of new partner salons as the consequenceof our focusing on product study sessions about Plarmia, a range we launched last August, while sales of in‐salon treatment products have beensteadily increasing. We increased our product prices in January 2015, which caused a rush of demand, resulting in sales far exceeding thoseforecast.

CHINA (Milbon Trading (Shanghai) Co., Ltd.)In addition to providing them with opportunities for training and suggestions, we invited renowned guest instructors from Japan to held beauty
seminars for our distributors and top salons. These initiatives have been received favorably by not only top management but also by their seniorand other staff members, and have led to solid business results, such as increased adoption of our products and number of new partner salons.
Sales of hair color products have been going well, due to our matching color design suggestions, which specially target beauty‐conscious people intheir 20s and 30s. At the same time, demand for in‐salon treatment products has also been growing as local consumers have been increasingly
looking to improve their hair, resulting in steady sales of these products as well.

KOREA (Milbon Korea Co., Ltd.)We held the first DA Korea in October, a new event for designer development, which attracted 110 entries and an audience of 1,300 people. Theevent was highly thought of by the participating designers. Against this backdrop, Elujuda Emulsion was released in November and has been
receiving rave reviews that state it gives users a real feel how effective the CMADK ingredient is. This substantially contributed to first quarter
sales.

Thailand (Milbon (Thailand) Co., Ltd.)Our sales division started doing business with our first Thai distributor that deals exclusively in our products. As this makes it easier for us to reachmedium‐size salons, our partner salons have been increasing steadily. In addition, we released an Emulsion in the Elujuda range, which had
already been doing well in Thailand’s leave‐in treatment market—which is quite a large market—and has been selling well.
The production division has been in full operation for a year now, becoming increasingly organized, and has been doing well also in terms of hiring
as well as in other areas. The company has also commenced fully‐fledged exports to a variety of countries, although import permits have still beenin process in some countries.

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.