Consolidated Financial Results for the Six Months Ended June 20, 2015
[Japanese GAAP]
July 1, 2015
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, First Section
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
TEL: +81-6-6928-2331
Scheduled filing date for quarterly report: July 31, 2015
Scheduled starting date of dividend payments: August 7, 2015
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (For institutional investors and analysts)(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the six months ended June 20, 2015 (December 21, 2014 - June 20, 2015)(1) Consolidated operating results

Six months ended June 20, 2015

Net sales
Million yen
13,074%7.4

12,173

6.5

Six months ended June 20, 2014
(Note) Comprehensive income

2,144

(2.3)

Six months ended June 20, 2015: 1,950 million yen [49.1%]
Net income per share(Percentages show year-on-year changes.)
Ordinary income
Net income
Million yen%
Million yen
%
2,270
14.6
1,444
21.4

Operating income
Million yen
%
2,370
10.5

1,981

(4.0)

1,190

(6.4)

Six months ended June 20, 2014: 1,308 million yen [(26.7)%]

Six months ended June 20, 2015

Yen
88.21

Diluted net income per share
Yen-

Six months ended June 20, 2014

72.68

-

(2) Consolidated financial position
Total assets
Million yen
30,049As of June 20, 2015
As of December 20, 2014
(Reference)

EquityNet assets
Million yen
25,45828,138Equity ratio%
84.7

24,104As of June 20, 2015: 25,458 million yen

85.7

As of December 20, 2014: 24,104 million yen

2. Payment of dividends
Annual dividends
End of 1st quarterEnd of 2nd quarter

Yen

End of 3rd quarter

Year ended December 20, 2014

-

Yen
34.00

Year ending December 20, 2015

-

35.00

End of fiscal year

Yen

Year ending December 20, 2015
(forecast)(Note) Changes to latest dividends forecast: Yes

Total

-

Yen
34.00

Yen
68.00

-

35.00

70.00

3. Consolidated operating forecasts for the fiscal year ending December 20, 2015 (December 21, 2014 - December 20, 2015)(Percentages show year-on-year changes.)
Net sales
Million yen
Year ending December 20, 2015

26,900(Note) Changes to latest performance forecasts: None

Operating income% Million yen
6.6

4,661

Ordinary income% Million yen

4.7

4,369

Net income% Million yen

3.6

2,630

Net income per share
%

Yen

0.3

160.62

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 0 companies (Company name: ): NoneExclude: 0 companies (Company name: )(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: Yes2) Changes in accounting policies other than those in 1) above: None3) Changes in accounting estimates: None4) Retrospective restatements: None(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period As of(including treasury shares)June 20, 2015
2) Number of treasury shares at the end of the period As ofJune 20, 2015
3) Average number of shares during the period
Six months ended(cumulative)
June 20, 2015

16,558,617 shares
185,494 shares
16,373,548 shares

As ofDecember 20, 2014
As ofDecember 20, 2014
Six months ended
June 20, 2014

16,558,617 shares
184,672 shares
16,375,467 shares*Status of execution of quarterly review of financial statements
As these financial statements are not subject to the review of the quarterly financial statements pursuant to the Financial Instruments and Exchange Act,
procedures for said review are not completed at the time of disclosure of this report.
*Explanation on the appropriate use of operating forecasts and other special instructions
Operating forecasts and other statements regarding the future presented in these materials are based on information currently available and certain
assumptions deemed to be reasonable, and actual performance may differ substantially due to various factors.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

Contents of supplementary materials
1. Qualitative Information on Consolidated Results for the Current Period .......................................................................................... 2(1)

Qualitative information on consolidated operating results ............................................................................................................. 2(2)

Qualitative information on consolidated financial position............................................................................................................ 3(3)

Qualitative information on consolidated operating forecasts ......................................................................................................... 3

2. Summary Information (Notes) ........................................................................................................................................................... 4(1)

Significant changes in subsidiaries during the period .................................................................................................................... 4(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements ............................. 4(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements ................................................ 4

3. Quarterly Consolidated Financial Statements ..................................................................................................................................... 5(1)

Quarterly Consolidated Balance Sheets ......................................................................................................................................... 5(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................................... 7(3)

Quarterly Consolidated Statements of Cash Flows ........................................................................................................................ 9(4)

Notes regarding going concern assumption ................................................................................................................................. 10(5)

Segment information .................................................................................................................................................................... 10(6)

Notes in case of any significant changes in shareholders’ equity ................................................................................................. 10-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

1. Qualitative Information on Consolidated Results for the Current Period(1)

Qualitative information on consolidated operating results
During the six month period ended June 20, 2015, the Japanese economy continued its moderate recovery trend, including a
recovery in domestic investment activity supported by the improvement in corporate earnings, as well as signs of a pickup in
personal consumption against a backdrop of improving household income and a stronger employment situation. In the beauty
industry, despite the fact that demographics are making it tough for salons to bring in customers and hire new staff, it appears that
consumers are no longer refraining from purchasing, as evidenced by the pickup in the cycle of customer visits following theconsumption tax rate hike in April 2014.
Amid this environment, the Milbon Group believes that it is important to respond to the needs of women in their 40s, the corecustomers of salons, as well as women in their mid-20s, whose understanding of beauty is beginning to change. Efforts are being
focused on salons with the goal of “raising the level of expertise of professionals and supporting higher productivity in order to
respond to women, who continue to shine in society, from those awakening to beauty to those with heightened beauty needs.”
Consolidated net sales during the six month period ended June 20, 2015 increased to 13,074 million yen (up 7.4% year-on-year).
In the hair care product category, this increase was primarily due to steady growth in sales of the system hair care brand Aujua, as
well as solid sales of hair care products containing Milbon’s original keratin restoring ingredient CMADK, including jemile fran,a new hair care brand launched in May which enlightens working women in their 20s about hair care. In the hair coloring productcategory, Ordeve crystal, the hair coloring product line specialized for gray hair which launched in June and allows women withlong hair to beautifully color their hair, was received well by the market and sales got off to a solid start. Favorable sales growthof the overseas subsidiaries thanks to the proactive educational activities conducted in the salons was another factor for theincrease.
Operating income was 2,370 million yen (up 10.5% year-on-year), ordinary income was 2,270 million yen (up 14.6%
year-on-year) and net income was 1,444 million yen (up 21.4% year-on-year).

Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below:[Breakdown of consolidated net sales by product category]
Product category(Unit: Million yen)Six months ended
June 20, 2014
AmountRatio (%)

Six months ended
June 20, 2015
AmountRatio (%)

Increase(decrease)amountYear-on-yearchange (%)

Hair care products

6,865

56.4

7,655

58.6

790

11.5

Hair coloring products

4,397

36.1

4,606

35.2

209

4.8

Permanent wave products

797

6.6

718

5.5

(79)

(9.9)

Others

113

0.9

94

0.7

(18)

(16.5)

Total

12,173100.0

13,074

100.0

901

7.4

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Six months ended
June 20, 2014
AmountRatio (%)

Six months ended
June 20, 2015
AmountRatio (%)

Increase(decrease)amountYear-on-yearchange (%)

Domestic sales

10,95990.0

11,441

87.5

482

4.4

Overseas sales

1,213

10.0

1,633

12.5

419

34.6

Total

12,173100.0

13,074

100.0

901

7.4

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

(2)

Qualitative information on consolidated financial position

1) Assets, liabilities and net assets
Total assets at the end of the six month period ended June 20, 2015 increased by 1,910 million yen compared to the end of theprevious fiscal year to 30,049 million yen.
Current assets increased by 727 million yen compared to the end of the previous fiscal year to 15,034 million yen. This was
mainly due to the 2,999 million yen increase in securities (jointly managed designated money trusts, etc.), the 570 million yen
increase in merchandise and finished goods, and the 2,957 million yen decline in cash and deposits.
Non-current assets increased by 1,182 million yen compared to the end of the previous fiscal year to 15,014 million yen. This wasdue mainly to the 413 million yen increase in land in conjunction with the purchase of land adjacent to the Yumegaoka Plant andan increase of 539 million yen in investment securities attributable to factors such as higher prices of listed stocks.
Current liabilities increased by 399 million yen compared to the end of the previous fiscal year to 4,268 million yen. This was due
mainly to increases in accounts payable - trade and accounts payable - other by 275 million yen and 233 million yen, respectively.
There were no significant changes in non-current liabilities from the end of the previous fiscal year.
Net assets increased by 1,354 million yen compared to the end of the previous fiscal year to 25,458 million yen. This was due
mainly to the increase of 851 million yen in retained earnings and the 348 million yen increase in valuation difference on
available-for-sale securities attributable to factors such as higher prices of listed stocks and the 164 million yen increase in foreign
currency translation adjustment due to the weakening of the yen.
As a result, the equity ratio changed from 85.7% at the end of the previous fiscal year to 84.7%. Net assets per share based on the
total outstanding shares as of the end of the period under review increased from 1,472.10 yen per share at the end of the previous
fiscal year to 1,554.89 yen per share.
2) Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the six month period ended June 20, 2015 decreased by 57 million
yen compared to the end of the previous fiscal year to 7,089 million yen, as a result of using the net cash provided by operating
activities for the payment of income taxes and the payment of dividends.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 1,676 million yen. This was mainly the result of posting 2,259 million yen
in income before income taxes and minority interests, depreciation of 499 million yen, the 257 million yen increase in notes andaccounts payable - trade, the 573 million yen increase in inventories and 756 million yen in income taxes paid.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 1,209 million yen. This was mainly due to the purchase of property, plant andequipment of 1,013 million yen and payments into time deposits of 92 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 559 million yen. This was mainly due to the cash dividends paid to shareholdersof 556 million yen.

(3)

Qualitative information on consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced on
January 21, 2015.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20152.

Summary Information (Notes)(1)

Significant changes in subsidiaries during the period
None

(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements
None

(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements(Changes in accounting policies)(Application of the Accounting Standard for Retirement Benefits, etc.)
Regarding the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, March 26, 2015), effective from the first quarter ended
March 20, 2015, the Company has applied the provisions of the main clauses of Paragraph 35 of the Accounting Standard for
Retirement Benefits and Paragraph 67 of Guidance on Accounting Standard for Retirement Benefits, reviewed its calculation
method for retirement benefit obligations and current service costs, and changed its method of attributing expected benefits toperiods from the straight-line basis to the benefit formula basis. In addition, the Company has changed the method for
determining the discount rate from a method based on a period approximate to the expected average remaining working lives of
employees to a method that uses a single weighted average discount rate reflecting the estimated timing and amount of benefit
payments.
Application of the Accounting Standard for Retirement Benefits and Guidance on Accounting Standard for Retirement Benefits
is in line with the transitional measures provided in Paragraph 37 of the Accounting Standard for Retirement Benefits, and theeffect of the revision to the calculation method for retirement benefit obligations and current service costs has been added to or
deducted from retained earnings as of December 21, 2014.
As a result, as of December 21, 2014, net defined benefit asset decreased by 55,973 thousand yen and retained earnings decreased
by 36,103 thousand yen. The effect of the revision on operating income, ordinary income and income before income taxes andminority interests for the six month period ended June 20, 2015 is immaterial.

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20153.

Quarterly Consolidated Financial Statements(1)

Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year(As of December 20, 2014)

Current Second Quarter(As of June 20, 2015)

7,386,867
3,427,276–
2,258,355
22,989795,564
460,762(44,289)
14,307,525

4,429,005
3,406,376
2,999,938
2,828,986
20,642855,398
538,770(44,215)
15,034,902

4,270,850
1,076,672
4,876,552
58,635248,178
10,530,889
448,856

4,382,324
1,063,692
5,290,424
114,131
328,630
11,179,202
411,725

1,908,728
257,649
735,001(49,681)2,851,698
13,831,443
28,138,969

2,448,705
253,499
770,649(49,681)
3,423,172
15,014,099
30,049,002

503,378
1,841,629
769,801
24,43689,198641,2883,869,733

779,217
2,074,934
795,620
24,54894,855
499,774
4,268,949

20,238144,883
165,121
4,034,855

27,523294,198
321,7214,590,671

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for sales returns
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities-5-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015
(Thousand yen)Previous Fiscal Year(As of December 20, 2014)

Current Second Quarter(As of June 20, 2015)

2,000,000
199,599
21,655,660(535,654)
23,319,606

2,000,000
199,729
22,507,120(538,756)
24,168,093

368,519
310,899
105,089784,508
24,104,114
28,138,969

716,804
475,746
97,686
1,290,236
25,458,330
30,049,002

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-6-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Six Months Ended June 20, 2014 and 2015

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Company house defrayment income
Gain on surrender of insurance
Other
Total non-operating income
Non-operating expenses
Sales discounts
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
Income before minority interests
Net income

Six Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)
12,173,175
3,736,266
8,436,908
6,292,582
2,144,326-7-(Thousand yen)
Six Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)
13,074,879
3,935,993
9,138,886
6,768,786
2,370,100

6,717
6,591
–
22,9182,753
4,893
43,8742,531
6,474
26,46329,721
44,0207,140
116,351

195,440
11,311
126
206,877
1,981,322

214,451–
1,442
215,894
2,270,557

811
811

–
–

18,92818,928
1,963,205
775,526(2,417)773,108
1,190,097
1,190,097

10,887
10,8872,259,669
779,348
36,044815,392
1,444,277
1,444,277

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 20, 2014 and 2015

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority
interests

Six Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)
1,190,097-8-(Thousand yen)
Six Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)
1,444,277

57,90360,149–118,053
1,308,150

348,285
164,846(7,402)505,728
1,950,006

1,308,150

1,950,006––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015(3)

Quarterly Consolidated Statements of Cash FlowsSix Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)

Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for retirement benefits
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Decrease (increase) in prepaid pension costs
Interest and dividend income
Foreign exchange losses (gains)
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Other, net
SubtotalInterest and dividend income received
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Payments into time deposits
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-9-(Thousand yen)
Six Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)

1,963,205
479,762
5,395(1,069)(1,528)(39,719)––(26,414)(13,308)
1,929
(811)
18,9282,259,669
499,914
(97)
4,627
112
–
(70,672)
6,299–(9,006)(7,467)–
10,887(424,446)

26,335(755,727)(573,640)

303,486

257,608

99,001
1,608,683
11,510(925,722)
694,470

19,5132,424,082
8,762(756,287)
1,676,557(791,251)
1,047(86,988)(2,930)9,476–(7,080)
4,653
(924)
3,352
(7,469)(878,113)(1,013,504)–(66,578)(1,700)4,467(92,560)(63,102)
24,902(49,584)
51,766(3,738)(1,209,632)(16,033)(477,374)(493,408)(2,972)(556,032)(559,004)

29,211

34,994(647,839)
6,610,371
5,962,531(57,084)
7,147,043
7,089,958

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2015

(4)

Notes regarding going concern assumption
None

(5)

Segment information
The Company omits information on business segments, as it is engaged in the production and distribution of hair-care
products and related merchandise, all of which are deemed to belong to a single business segment.

(6)

Notes in case of any significant changes in shareholders’ equity
None- 10 -