2022

Integrated Report

Finding Beauty Across the GlobeTo Pioneer an Innovative Beauty
Industry

Decoding Milbon’s present and future
strategies as a global professional hair caremanufacturer

MILBON INTEGRATED REPORT 2022

Beauty knows no boundaries
Hence, beauty has boundless definitions
Behind our dedication to strive alongside
diverse definitions of beauty in the world,
we hold a deep belief: to be beautiful is whatbrings smiles and enrichment to our lives.

MILBON INTEGRATED REPORT 2022

Beauty knows no boundaries, with places aroundthe world for us to deliver beauty.
One way of realizing this is through our dedication to work alongside salons and haircare professionals.
To live our lives to the fullest, we deliver beauty
from hair salons to people, cities, and the world.
Milbon is committed to making a difference byinspiring beauty through haircare professionals
across the globe.
We believe that we can foster sustainable cities
and communities through our dedication andcontribution.

MILBON INTEGRATED REPORT 2022

TOP MESSAGE

Bringing beauty to society and people in accordance with Milbon-ism
Thank you for taking the time to read
our integrated report. Milbon is a cosmetics manufacturer producing andselling salon-exclusive products forhair care, hair coloring, and more. We
are committed to enriching people’s
hearts and society as a whole throughbeauty alongside haircare professionals and hair salons across the globe.
Since our listing, we have achieved
revenue growth in 24 fiscal years, excluding FY2020, when the pandemic
began in Japan. In FY2021, we surpassed 40 billion yen in consolidated
net sales for the first time, returning
to a growth trajectory even during the

COVID-19 era.
This sustained growth is founded on auniversal fact that underpins Milbon's
business model. At any time and inany age, people want to be beautiful.
And it is to the hair salons that customers visit to fulfill that wish. That
has remained unchanged, even during
the pandemic.
Another major factor is that morethan 1,000 employees of Milbon, whowork closely with salons and stylists,carry out their duties with Milbon’s
distinct vision and action guidelines,
The Milbon Way, or Milbon-ism, firmly
in their hearts.

Always challenging ourselves to reach where we want to be in the future
Since its founding, Milbon has upheld thebelief of “creating a solid company that
won't collapse. ” In order to achieve this,
we must constantly respond to changes in the market and our customers.
In other words, we must continuously
innovate and move forward.
In February 2022, we announced our
new medium-term management planfor five years through 2026. I will go
into details about the strategies in
the medium-term management plan
later, but I would like to emphasizethat the strategies are formulated torealize Milbon’s unbounded potential
not only for the next five years, butalso for the next 10 years and beyond.
We will continue to challenge, invest,
and innovate toward future vision of
Milbon, that is, where we want to see
ourselves in the future. In doing so,
we will continue to grow as a trusted
leading company.
Today, more and more people discuss “sustainable society” across theglobe, and I am confident that Milbon'sContinuous Innovation for “Building a Solid Company that Won’t Collapse”
At the heart of Milbon, which has achieved sustainable growth since its founding, is the determination to “build a solid company that won’t collapse.” Greetings from Ryuji Sato, Representative Director, President and CEO, who announced a new medium-term five-year management
plan in February 2022, with his vision to create the future of Milbon and the beauty industry.

4

MILBON INTEGRATED REPORT 2022

5

presence will grow as we continue toachieve sustainable growth.

Ryuji Sato,
Representative Director, President
and CEO, Milbon Co., Ltd.

000
Production Policy for this Integrated Report
In preparing this integrated report, we referred to the “International Integrated Reporting Framework” proposed by the Value Reporting Foundation (VRF). Since 2022
is the year that marks the beginning of a new medium-term management plan, we

INDEX

001

002

have endeavored to compile not only a report on our initiatives in FY 2021 , but also
to communicate to our stakeholders in an easy-to-understand manner the sourcesof our value creation, our management strategy, and our medium-to-long-term outlook for promoting sustainability.
The overall design is based on the themes of “global” and “borderless,” and expresses our company’s goal of becoming the “world’s No. 1 global professional haircare manufacturer,” with a flat design in a square, monotone color scheme that is

ABOUT MILBONSTRATEGY

easy to read and understand.
This is the third integrated report we have published. For the first issue in FY 2019 ,we have created an editorial policy that emphasizes employee understanding so thateach and every employee can deepen communication with stakeholders through

003

004

the integrated report. The second issue in FY 2020 , the year in which COVID- 19
struck, took the form of a letter to the families of our employees to inform them
about the current sittuation. In FY 2021 , the year of the third issue of the report,
we will build on the production policies of previous years and produce the reportwith the aim of deepening understanding of our company among a wider rangeof stakeholders and providing a tool for more active communication with them.
We are still in the trial-and-error stage, so if you have any questions about thecontent, or if you notice anything that we have not done properly, we would be very

SUSTAINABILITY & ESG

PERFORMANCE

grateful for your feedback.
Click on one of the above to jump to the appropriate page.

MILBON INTEGRATED REPORT 2022

001
What we offer

An introduction to the values Milbon
offers as a global professional haircare
manufacturer striving to achieve apeaceful society by enriching culturest h ro u g h c o l l a b o r a t i o n w i t h h a i rc a reprofessionals

Booming beauty
industry worldwide

ABOUT MILBON

G l o b a l d e p l o y m e n t o f s a l e s , p ro d u ction, and development bases in 14
countries and regions, including Japan, to establish a system of local production for local consumption in eachcountry

Three reasons behind
our continuous growth
Covers the following topics: fostering sustainable growth based on The
Milbon Way, a handbook containing
corporate mission and values that ares h a re d a m o n g e m p l o y e e s , o u r p ro p ri e ta ry bu s i ne s s m od el , a n d m ed ium-term five-year management plan

Sustainable businessgrowthSince our IPO in 1996 , the Company
has recorded revenue growth in every fiscal year except FY 2020 , whichm a r k e d t h e o u t b r e a k o f C O V I D - 19
pandemic. Our strength and strategy
to turn adversity into opportunity

Milbon’s sales channel

Providing our products and services
to salons and consumers in Japan anda b ro a d b y e s t a b l i s h i n g p a r t n e r s h i p
with local distributors

Value creation model

Va l u e c re a t i o n m o d e l b a s e d o n T h e
Milbon Way to achieve a peaceful andenriched society by inspiring beauty

Click on one of the above to jump to the appropriate page.

MILBON INTEGRATED REPORT 2022

001

WHO WE ARE

What we offer

ABOUT MILBON

Milbon is a Japan-based global
professional haircare manufacturer

Making a difference by inspiring
beauty through haircare professionals across the globe
Under the corporate slogan of “FindYour Beauty,” our businesses revolvearound the concept of living beautifully.
At the heart of everything we do is theapproach to living beautifully. Milbon
is committed to making a difference
by inspiring beauty through haircare
professionals across the globe.

We have consistently focused on
haircare professionals and salons
for more than half a century since
our establishment in 1960, based on
our belief that salons are essential
to the cultivation of beauty and therealization of an enriched society.
The products we offer include professional-use products such as haircolor dye and hair care products usedby haircare professionals for their cus-

tomers, and consumer products thatare available to purchase only at thesalon. Through the manufacture andsale of these products, we have continued to support salons and meet the
beauty needs of customers. We play aleading role in the domestic market forsalon-exclusive hair cosmetics, andnow that we are expanding globally,
many salons both in Japan and abroad
are carrying our products.

Continuously transforming throughtwo perspectives
Our customers are not only haircare
professionals and salons, but also all
customers who visit salons. Against
this backdrop, we strongly recognizethat the sustainable development ofsalons, which is indispensable for therealization of an enriched society,requires that we listen sincerely tothe voices of all these customers.
For this reason, we continue to pursue and provide beauty services thathaircare professionals and customers
truly see by taking two perspectives
into account: the customer (haircare
professional and salon) perspective,
and the consumer and social per-spective, both of which are basedon the perspective of the customers
who visit hair salons.
For example, we have independently
introduced the Field Person System, asales system designed to work closelywith haircare professional and salons,
and the TAC Product Development
System, a system that develops products in cooperation with top-notch
haircare professionals.
Amidst the restrictions imposed asa result of the pandemic, we begana wide range of initiatives to make iteasier for our customers to access
what they need. In addition to improving customer convenience, weare continuing to develop and expand

services that meet the changing needsof the times, including the launchof milbon:iD, an official online store
where sales are credited to salons,
and the online educational platform
as well as virtual event spaces where
haircare professional can connect
and learn virtually.
Although we are a manufacturer
and seller of cosmetics, we are by nomeans a company that simply provides
pro-ducts. What we are offering isbeauty, self-worth, spiritual enrichment, and life in full color. Furthermore, we believe that a bright andsustainable society can be achievedby those living their lives radiantly
and vibrantly.

Achieving an enriched society
by inspiring beauty

To bebeautiful
To live beautifully. It’s how we approach the world. It’s the one, single idea that drives us. Our hair frames our personal beauty how it’s styled, how it feels, how it ﬂows. It sets the stage for the inner self we radiate. Everyone’s hair is
unique, and everyone’s beauty is, too. Our purpose is to help people ﬁnd, embrace, and express their individuality tohead out into each day conﬁdently and gracefully, and to live vibrantly. For more than 60 years, professional stylists
have been Milbon’s partners: we learn from and inspire each other. What unites us is our passion for transforming
everything we touch into something beautiful.Together, we constantly push the boundaries of the global haircare
industry. Together, we help give people the conﬁdence, sophistication, and grace with which they inspire the world.

10

MILBON INTEGRATED REPORT 2022

To live your liferadiantly

People living beautifully and radiantly are capable ofcreating a peaceful and enriched society.
11

001
ABOUT MILBON

WHO WE ARE

Sustainable business growth

Performance trends and targets in the new medium-term management plan
Consolidated Net Sales (Billions of Yen)
Consolidated Operating Income (Billions of Yen)

2008 Financial Crisis

Great East Japan Earthquake

COVID-19

Although domestic business wasstrong, the impact on our newly
deployed Korean business was sogreat that the option of withdrawing
from the market was raised. However, President Sato himself made aninspection tour of the region anddecided to develop the business on
his own, saying, “We absolutely
have to do it.” Korean business has
now grown into an important pillarof our overseas business.

In addition to a total of 10 million
yen donated to local governmentsthat were severely affected, theCompany also raised approximately
2 million yen internally and provided
ongoing support in collaboration
with various industrial organizations
and hair salons that cooperate inproduct development. There waslittle impact on the business, withsales growth exceeding 20 billion
yen for the first time.

Although the company faced
unprecedented adversity, startingwith the first declaration of a stateof emergency, final consolidated
sales declined only slightly by 1.5%
from the previous year, providing
the strength of its unique businessmodel. We have reaffirmed not only
the strong ties the salon industry
has to people's lives, but also thestrength of our business to overcome uncertainties.

33.4

19.1

3.27

19.7

3.57

20.5

3.79

21.8

23.8

4.30

3.98

25.2

2009

2010

2011

2012

Surpassed 40
billion yen for the
first time

4.45

12

4.72

41.5

36.2

35.7

29.1

7.81

5.11

6.75

10.8

2022-2026
Medium-Term Management Plan

6.39
Change the Stage-18-Month Missions!
“Change the Stage-18-Month Missions!”
implemented in response to COVID-19 (July,
2020 to December, 2021)

5.34
2019-June, 2020
Medium-Term
Management Plan

2015-2018
Medium-Term Management Plan

2013

After the “slight decline” due to the COVID pandemic, the Company achieved record sales
and operating income in FY 2021.
With a track record that exceeds the growth curve planned before the pandemic,
the Company once again proved its strength in turning adversity into opportunity following
the 2008 Financial Crisis and the Great East Japan Earthquake.
grow sustainably in response to changes in society by flexibly responding tonumerous adversities, including therecent COVID-19 pandemic.
The only decrease in revenue and profit was in FY2020, when the pandemic
began in Japan. In April of the same
year, when a state of emergency was
declared for the first time, sales fell to
60% of the previous year’s level, but

27.3

33.8
6.26

2010-2014
Medium-Term Management Plan

MILBON INTEGRATED REPORT 2022

58.0

Medium-term targets for2015 – 2019 achieved one
year ahead of schedule

Recorded revenue growth inevery fiscal year since our IPO
in 1996, with the exception of
the 2020 financial year, when
COVID-19 struck

T h ro u g h d i ff i c u l t i e s , t o w a rd s
dramatic growth
We started out as a specialized manufacturer of professional hair cosmetics
in 1960, and have consistently developed a unique strategy that focuses on
the salon business domain. As a result,
we have recorded revenue growth inevery fiscal year since our IPO throughto FY 2020, and we have continued to

Towards a new goal

the subsequent recovery, proving theindispensability of beauty to people,
allowed the final consolidated sales
to remain slightly down at 98.5% of
the previous year.
After overcoming these difficulties
in FY2021, we were able to overcome
the ongoing adversity of COVID-19
and achieve dramatic growth, with
net sales surpassing 40 billion yen

2014

2015

2016

2017

2018

2019

for the first time at 41.5 billion yen
and operating income exceeding 7
billion yen for the first time at 7.8
billion yen, both of which are significant record highs. The growth rate
was a significant 114.7% comparedto the record-high sales in FY2019,
and the results exceeded the growth
curve planned in the previous medium-term management plan announced
before the outbreak of the COVID-19
pandemic.
S o l i d s t re n g t h e v i d e n t i n o u r
performance
Our robust attitude to grow by transforming the difficulties that stand in
our way into opportunities is one of

2020

2021

2022

2023

our strengths, and this recovery wasno coincidence. This is evident in past
performances. Since the current president, Ryuji Sato, took up his post in
2008, the Company has faced unprecedented obstacles, including not
only the current COVID-19 pandemic,
but also the global financial crisisof 2008, and the Great East Japan
Earthquake in 2011. But even during
such times, growth did not stagnate.
This is due to the corporate philosophy of “building a solid company
that won’t collapse,” which was set
forth by Ichiro Konoike, the Company’s founder, and has been passed
down to all employees to this day. A“company that won’t collapse” is a

13

2024

2025

2026

company that responds to never-endingsocial changes and brings value toour society. If a company is useful tosociety, society will not let it collapse.
Therefore, it is necessary not only torespond to natural disasters and otherevents fraught with uncertainty, butalso to ensure that the demands of a
rapidly developing and changing society
will continue to be met in the future.
We will further accelerate our global
business development and gro-wth
by “going beyond” in three aspects of“beyond Japan,” “beyond hair,” and“beyond an industry-perspective.”WHO WE ARE

001

Booming global beauty industry
and Milbon’s global expansion
Establishing a system of local production
for local consumption by establishing sales,
production, and development bases

ABOUT MILBON

Milbon’s global vision
We aim to become the world’s No. 1 professional haircare manufacturer
through our dedication and educational support towards local beauty industry across the globe.
Responding to people’s universal
desires for beauty by dedicating
to each culture
We began full-scale global expansion
in 2010, and currently have sales,
production, and development basesin 14 countries and regions, including
Japan. Hair salons, which exist almost
everywhere in the world, continue tofunction as an important and indispensable part of the local community.
We are expanding our business in amarket that pursues beauty in strong
partnerships with salons. The desire
to be beautiful is constant and universal throughout the world and we are
driving changes to fulfill this demand.
An important aspect of beauty is that
culture is rooted deeply in the community. Therefore, even if the concept of“beauty” is the same worldwide, what
is perceived as beautiful varies fromperson to person. This is why we are
actively promoting local hiring in our

global expansion, and approximately
90% of our overseas employees were
employed locally.
Our current overseas bases are mainly
sales offices, but in the future we willfurther expand our development andproduction areas to each country andregion. With this, we aim to promote
global expansion rooted in the local
culture in order to establish a systemof local production and local consumption in each country and region.

A part of the huge market controlled by Milbon
The cosmetics market is a huge market with a total global
value of over approximately 46.5 trillion yen. This market can be roughly divided into the “public market” forgeneral consumers and the “professional-use market”
where products and services are provided through specialty stores. Milbon has narrowed down its businessdomain to the “hair salon market,” which is part of the“professional-use market,” and provides products andservices solely via salons to haircare professionals andcustomers who visit salons.
The core products and services offered are “hair cosmetics,” which are the main service of salons. Milbon
manufactures and sells both products for professionaluse, such as colorants used by haircare professionals
on customers, and consumer products sold by salons in
response to customer requests.
The domestic market remains the core of Milbon’s operations, even as we continue to push forward with ourglobal expansion. While accelerating development inoverseas markets, which hold great potential for growth,
it is essential to solidify the groundwork for the domestic market, which will serve as the foundation for suchdevelopment.

Korea

China

Japan
TaiwanVietnamHong Kong

ThailandPhilippines

Malaysia

Indonesia

SingaporeS…… SalesR…… Research & Development

P…… Production

14

MILBON INTEGRATED REPORT 2022

USA

trillion yen

Commercial
marketHair salon
marketPublic market

The unique value of hair salons that remain unchanged around the world
C o m mu n i t y c h a r a c t e r i s t i c s u n i q u e t o s a l ons
Need for in-person visit

Need for freguent revisit

Need for a long-time stay

[Average rate of use in thepast 1 year][Average number of visits
per year][Average time spent per visit]

Men

Turkey46.5* S o u rc e : N a t i o n a l I n s t i t u t e o f Te c h n o l o g y a n d E v a l u a t i o n ( N I T E ) ,“FY 2020 Cosmetics Industry Trend Survey Report”

Women

Germany

Cosmetics
market:Approx.

81.5
34.0

Women

Men

4.12
5.39

times

times

Women

Men

88
54

minutesminutes(Source: “Census of Beauty Industry, First Half of FY 2021 ” (Hair Salons and Barber Shops), Recruit Co., Ltd.)Hair salons: An industry that will
not disappear in the future
The unique community-based characteristics of salons are behind ourdecision to focus our business domain on the hair salon market. Even
now, with the COVID-19 pandemic,
we have found great advantages andpotential in salons. These are foundin their very nature, in which they will
always be “bricks-and-mortar” and“community-based” places that will
never change. No matter how muchdigitization progresses, services suchas hair cutting and hair coloring canonly be provided in person, which at
the same time indicates that hair salonswill continue to be an indispensable
part of people’s lives.
In fact, a survey conducted by Recruit
Co., Ltd. of 13,200 men and women
aged 15 - 69 among urban residents

15

with a population of 200,000 or morethroughout Japan revealed that theabove community-based characteristics are unique to salons. Theseadvantages of in-person interactions
and potential to reach local communities are values that salons possess
and will remain the same regardlessof the country or region. This clearly
indicates the indispensability of hairsalons in society.

WHO WE ARE

001

Milbon’s sales channel

ABOUT MILBON

The strength and potential of the hair salon market
The hair salon market, which is ourbusiness domain, is a market thatneeds “real” interaction, including
cutting and coloring treatment, nomatter how much digitalization has
progressed. In order to receive services

consumers(customers)

at a hair salon, it is basically necessary to visit the salon, and therefore
communication between the haircare
professional and the customer always occurs naturally. Given thesecharacteristics, salons and the hairsalon market are a treasure trove of
possibilities with great potential fordevelopment in the future.

G ro wt h p o t e n t i a l o f t h e s a l o n m a r k e t

Overview of Milbon’ssales channel
In the hair salon market, manufacturers
tipically produce products and provide them to hair salons nationwide
through distributors. Milbon has basically established a similar commercial
distribution system both domesticallyand internationally.

salon

Uniqueness as
a community

From beauty
to health care

Potential for digitaltransformation

The “real” space of a hair

Hair salons have been consid-

The development of digit alsalon has the potential toered a place that deals only

platforms and other measures

become a more valuable andwith “hair,” but in recent years

will enable customers toimpor tant communit y (con-they have also become aapproach their beauty beyond

nection) for customers, theplace for “skin” care andthe time of their visit, andcommunity at large, and soci-product sales, and in thethus may improve the produc-

et y in this age of digitaliza-

futur e, t hey may become ativity of the salon in terms oftion.

space that deals with “beauty

sales and learning.

distributor(manufacturer)

Delivering beauty through strong bonds and trusting partnership with
distributors and salons
In the hair salon market, where we
operate, manufacturers produce
products and provide them to salonsnationwide through distributors. Hairsalons handle a wide range of products, from professional hair coloringproducts and perming solutions forcommercial use at the salon, to athome products for customers who
visit the salon.
This commercial flow is basically thesame in the overseas markets in which
we operate, and we are developing
our business through cooperative
relationships with local distributors.
In some regions, we also provide
products directly to salons, creating aflexible commercial distribution sys-

tem according to the actual situationin each country or region.
In addition, in order to remain close tocustomers who have found it difficult
to visit salons due to COVID-19, and tosupport salons nationwide that havesuffered a decline in sales as a resultof the pandemic, our official online
stores platform “milbon:iD”, which
had been in preparation for sometime, was fully launched in June 2020.
Customers can now purchase our
products unbound by time or place.
However, even in this case, we haveestablished a system whereby member-ship registration is only available
to salons that use the service on adaily basis, and sales are recorded

16

MILBON INTEGRATED REPORT 2022

to the distributors and salons, thus
maintaining our “together with salons” stance. The number of registered
stores and members at the end of FY
2021 had reached approximately 3,200
stores and approximately 170,000
members, far exceeding the initiallyplanned target of 3,000 stores and60,000 members. In addition, while
maintaining commercial distribution,
new possibilities are now blossoming.
As such, the hair salon market is amarket that offers beauty and spiritual enrichment to customers throughthe hands of haircare professionals,
and as a manufacturer in this market,
we are dedicated to contributing tosociety.

and health” in general.

By taking advantage of the essential “real” communication characteristics of hair salons, not only will salons become local beauty
platforms, but also by promoting digital transformation, we canhope for the further growth of the overall market.

17

001
ABOUT MILBON

Being passed down from generation to generation: “Milbon-ism”
The Milbon Way is a handbook containing
the mission and the core values, including
Milbon-ism, essential to being a Milbon
employee. All of our employees carry acopy of The Milbon Way, which offers asummary of action guidelines, our Management Ideology, and our future vision–values that employees are expected toshare. It was compiled by the current
president, Ryuji Sato, in 2012 and has
been revised in line with the times based

WHO WE ARE

Three reasons behind ourcontinuous growth

T h re e re a s o n s b e h i n d o u r c o n t i n u o u s g ro wt h

P ro p r i etar y b u s i n es s mo d el
For more than 60 years since ourfounding in 1960, we have continued
to operate with a unique businessmodel focused on hair cosmetics forsalons. This business model is focused on specific business domains,
and we are able to acquire a deep
understanding of the beauty market

1

The Milbon Way

2

Proprietary business model3

Medium-term five-year management planon the theme of “continuity and change.”
This handbook ensures that the values
are passed on to Milbon employees over
the years. Through a long-term, there
is a continuous education system that
includes three-month Milbon Person
Training, second-and fifth-year annual
training, as well as follow-up training
for promoted employees, all of which
are passed on to all employees. The
medium-term management plan, which
is announced every five years, is also
formulated based on The Milbon Way.

and a certain level of beauty techniques through extensive specialist
training for all employees, from sales
to research. As a result, we are able
to continue grasping the needs ofcustomers (salons), including potential ones, from the standpoint of
haircare professional. These strengths

have led to diversified support forsalons throughout the value chain.
These strengths are the source ofvalue that we truly need to provide:inspiring beauty of all the customers including those beyond haircare
professional, and realizing a society
with enrichment.

1
Everything we do is for the increased
sales and profits of salons

Unique business models such as FP System and TAC Product Development System
Developing specialized beauty experts

Building a stronger bond andt r u s t i n g p a r t n e r s h i p t h ro u g hservices dedicated to increasing
sales and profits of salons
Based on its philosophy “Everything
we do, we do for and with hair professionals,” which remains unchanged
since its founding, Milbon has beenachieving continuous and consistent
growth by focusing its business domainon hair salons and stylists. We havesuccessfully established a numberof unique services that contribute tosalons’ increased sales and profit as aresult of narrowing down our expertiseto the professional hair salon market
instead of the hair care cosmetics market
or the cosmetics market as a whole.
By having all employees embody theslogan, “Don’t sell products, sell concepts,” we have continued to earn the
support and endorsement of salonswith high ambitions for growth andtop-class haircare professionals, building even stronger bond and trusting
partnerships.

2

Achieving clear goals every five
years to realize our vision
We announce a five-year medium-term
management plan based on The
Milbon Way.
As a result, we have been able tosteadily advance our five-year initiatives
to realize our long-term vision, looking
ahead to the latest social trends andsocial changes in five years, and haveconstantly achieved our goals. In theevent that we achieve our goals in
the middle of the five-year mid-term

period, we immediately start a new
medium-term management plan, so
we never allow growth to stagnate.
In addition, the Company has theflexibility to immediately revise its
plans to meet the urgent demandsof society in the wake of the recent
COVID-19 pandemic, and all employees are continuously taking actions
with a constant eye on the medium- tolong-term vision.

3

18

MILBON INTEGRATED REPORT 2022

Products and beauty techniques

Field Person
SystemTAC ProductDevelopment
SystemDelivering
products andbeauty techniques

Success
techniques

Hair salon

Decision to focus on the hair salon market

THE MILBON WAY
Business model recognized by professional organizations

Awarded the Porter Prize for the uniqueness of busi ness strategy
Our unique business model won the 20th
Porter Prize for 2020, sponsored by the
Department of International Corporate
Strategy at Hitotsubashi Business School.
Since our founding in 1960, we haveconsistently focused our business on
haircare professionals and hair salons.
Since our listing in 1996, we have maintained high profitability abd recorded
sales growth for 23 consecutive years
through 2019.
The Selection Committee evaluated
Milbon’s top priority value as helping

salons increase their revenue and profits. Milbon was also recognized for its
efforts to incorporate leading-edge
styling techniques into products andtechnical manuals, and educational support is provided so that many haircare
professional can provide the advanced
services required by customers. The‘Field Person System’ is a system ofsales and education support for salons,in which Milbon employees in chargeof sales and education provide various
services to support the growth of salons.

19WHO WE ARE

001

Three reasons behind ourcontinuous growth

ABOUT MILBON

7 unique qualities
We offer a variety of unique services that are only possible because we specialize in salon-exclusive products. Here, we introduce our unique initiatives
that support sustainable growth.

Medium-term five-year management plan
We cannot talk about our sustainablegrowth without the midium-term management plan, which is formulated andannounced every five years.
To realize our long-term vision of realizing a spiritually rich society throughBeyond Japan

Field Person Systemniques associated with the products. We provide a wide range of support through the collaboration of three parties: Field Marketing Sales, who
identify issues; Field Salon Educators, who specialize in educational support; and Field Cosmetics Educators, who specialize in cosmetics.

In this section, we look back at our
medium-term management plan since2010 and the results we have steadily
accumulated.

2 0 1 0 - 2 0 1 4 M e d i u m- Te r m M a n a g e me n t P l a n(Global operations)This is a unique sales system that contributes to salons by providing not only products but also value-added services such as beauty tech-

beauty, we have constantly thought about“what salons must do” and “what weshould be,” and have steadily promoted
our medium-term management planwith an eye to the latest social trends
and social changes in five years.

Medium-term Vision
Focus on beauty technologies thatlead to customer creation and createa market centered on Asia based inJapanMedium-term Targets
Consolidated sales target: 25 billion yen
Domestic sales: 22 . 4 billion yen
Overseas sales: 2 . 6 billion yen
Overseas sales ratio: 10 . 5 % (consolidated basis)

Performance
As a result of aggressive overseas expansion, mainly in the Asian region, along with educational support activities for salons centeredon hair care in the domestic market, which is experiencing a declining birthrate and aging population, the Company achieved the targetof ¥25 billion in net sales and an overseas sales ratio of 10.4%, almost the same level as the target set in the medium-term management
plan. Although the Great East Japan Earthquake occurred during this period, we recorded steady growth without being affected.

Milbon Person Training
This is a three-month training course for all new employees of all job types, covering a wide range of topics ranging from our history and philosophy to product knowledge and beauty techniques. Subsequently, sales employees undergo about three months of Field Person training and threemonths of on-the-job training, while researchers undergo about six months of developer training (a total of nine months of training), before being
assigned to their respective departments. This allows all personnel to make immediate contributions to the company after completing the training.

2 0 1 5 - 2 0 1 8 M e d i u m- Te r m M a n a g e me n t P l a n
Beyond hair

Strong partnerships with salons
By building strong partnerships with salons through our Field Person System, we are able to jointly develop products with haircare professions,(Lifetime Beauty Care)and build relationships as true partners. For example, each year we receive sales and other management data free of charge from more than 1,000

Medium-term Vision
We aim to become the leading manufacturer in Asia and top 5 in the world
by competing on the global field ofprofessional industry

Medium-term Targets
Consolidated sales target: 35 billion yen
Domestic sales: 28 . 3 billion yen
Overseas sales: 6 . 5 billion yen
Overseas sales ratio: 18 . 6 % (consolidated basis)Target before application of Accounting Standard for
Revenue Recognition

salons as part of our Management Index Survey.

TAC Product Development System
In Milbon’s unique TAC system, we scientifically analyze the know-hows and expertise of highly regarded stylists, harnessing them to develop
innovative products with the slogan “fusion of science and sensibility.” Products developed from this system serve to standardize their advanced techniques, concepts, and ideologies across hairstylists.

Performance
We invested aggressively in growth by expanding the Yumegaoka Factory, which is our core domestic plant; expanding the Central Research Laboratory; establishing new domestic bases, including Ginza; and establishing new overseas bases, including the Philippines,
Korea (Tejon), China (Chengdu), and Germany.We worked to enhance our retail business, including full-fledged efforts in corporate
branding and product branding, and the premium brand contributed significantly to our results. As a result, sales in Japan were particularly robust, and we achieved our FY2019 target of 35 billion yen in consolidated net sales in FY2018, one year ahead of schedule. Not
only did we maintain our No. 1 share of the domestic market, but we also became No. 1 in Asia with an 11% share and No. 7 in the world
with a 3% share. In response to this result, we decided to formulate a new medium-term management plan one year ahead of schedule.

Cutting-edge research system
For years, we have independently conducted research on hair and possess some of the leading research technologies for basic hair researchin Japan. In addition, since 2012 , Milbon engage in research on the molecular level using SPring- 8 , a large-scale synchrotron radiation facility,
owned by the Institute of Physical and Chemical Research. There is no other manufacturer of salon-exclusive products that has established a2019 - 2020 Medium-Term Management Plan & 2020 - 2021 Change the Stage- 18 -Month Missions!

similar research and development system of developing products backed by scientific evidence.

Beyond an industryperspective

Stable production system
The Yumegaoka Factory has established a production system based on the Global Health Organization's (WHO) international standard “GMP.”
In addition to placing the highest priority on the safety and security of our employees, such as obtaining certification under ISO 45001 (Occupational Safety and Health Management System), we have established a system of “high-mix, variable-volume production” that allows us toflexibly change the volume of production without excess or shortage according to demand.

Promotion of DX with milbon: iD, a unique e-commerce platform based on BtoBtoC
This B to B to C online platform, which allows customers to purchase our products online without having to visit a physical salon, gained significant support amid the voluntary restraints on going outside due to the pandemic. Membership registration is available only at salons, and sales
are credited to registered salons, creating benefits for both customers and salons.

20

MILBON INTEGRATED REPORT 2022

(Perspectives of society
and customers)

Medium-term Vision
We aim to become the leading manu-facturer in Asia and top 5 in the world by
elevating the value of industry professionals in the eyes of consumers
and society at large

Medium-term Targets
Consolidated sales target: 48.5 billion yen
Domestic sales: 40 billion yen
Overseas sales: 8 . 5 billion yen
Overseas sales ratio: 17 . 5 % (consolidated basis)
FY 2023 target as of 2019

Performance
At first, we were developing our midium-term management plan for FY2019-2023, but we decided to shift our course torespond to changes in people’s behavioral patterns and values that accompanied the pandemic.This was the “Change
the Stage-18-Month Missions!” In order to accelerate the response to the need for DX adoption by salon management,
which has rapidly surfaced, the Company has successively opened official online stores “milbon:iD,” “Education iD,” anonline learning tool for haircare professional, and “Milbon Digital Arena,” a virtual event space. In R&D, we expanded our
first overseas R&D base in North America, and in China and Thailand we are now ready to begin operations. In production
systems, we were able to expand our Thai factory and establish a plant in China at a faster pace than expected. In 2021,
we recorded results that exceeded our original growth trajectory.

21

WHO WE ARE

001

Value creation model

Va lueCre at i on
Pro cess

ABOUT MILBON

Main Management Resources

Business Model and Growth Strategy

Most Recent Accomplishments and Goals

FP System

Economic ValueSound and stable financial position

Financial
CapitalEquity ratio:

Net assets:

40.19

83.3

billion yen

A system centered on
educational support that
contributes to salons byutilizing real and digital
resources%*Fiscal year ending December 31, 2021

Manufacturing
CapitalProduction bases in Japanand overseas
Three bases in Japan(production of GMP-compliant cosmetics),
Thailand and China*Fiscal year ending December 31, 2021

Human
CapitalThe Milbon Way,
specialized beauty experts
Number of consolidated
employees:

1,038

Education and training
expenses:

103,773yen(per employee in FY2021)*Fiscal year ending December 31, 2021

Intellectual
CapitalR&D that integrates
sensibility and science

1.74

billion yen

231

34

in Japan,

12,435

We develop new products
and new in-salon
techniques through thelearnings from successful
stylists and their clientswith our B2B2C
approach.

A production system thatenables same-day
shipment and flexible
adaptation of production
volumes according to
demand.

Medium-Term Five-year
Management Plan

overseas

Connection with society
through beauty
Number of salons withwhich we regularly
exchange information:

High-mix variable
volume production
systemStrategy to Create Continuous Value*Fiscal year ending December 31, 2021

SocialCapitalTAC ProductDevelopment
System

INPUT

Number of patent applications:R&D expenses:

Salon-based Social Innovation×
Sustainability Commitment

Number of milbon:iD(Milbon’s official online
store) registered users:

231,149*As of April, 2022

NaturalCapitalEfficient use of resources to meetsustainability commitments

Promotion of DX

Water
consumption:

milbon:iD Education iD

Energyconsumption:

VALUE

Based on the management philosophy of “narrowing down” and “deciding what not to do,” our business domain has consistently been providing products and services to society through salons and haircare professionals since our foundation. Withfocused capital investment, a medium-term five-year management plan, and DX promotion as driving forces, we are creating
continuous value and contributing to the spiritual richness of society through beauty.

CO2
emissions:

2,249KL 47,219㎥ 4,129t-CO2

Digital Arena Field Activities DX*FY2021 (only water consumption is based on
actual results at our production factories)

FY2021

FY2026 Target

Net sales:

41.58 billion yen

58.0 billion yen

Operatingincome:7.81billion yen

10.8 billion yen

ROE

13.4%

13.9%

ROIC

12.9％

13.6％

Dividend
payout ratio

43.3%

50.0%

OUT
PUT

The Five Key Challenges for Achievinga Sustainable Society
Achieving both sustainablebusiness growth andsolving social issues

1

2
4
Construct a fairand flexible
management
structure

Enrich people’s
hearts throughbeautyFoundation for theCompany’s sustainablebusiness growth

Achieving a sustainable society
through our collaboration withhaircare professionals.

OUT
COME

Social Value

Promote recycling
in manufacturing
and consumption
activities

Realization of spiritualrichness through beauty

Fostering sustainable cities andcommunities through our dedicationand contribution to fulfill a beautiful
way of living.

Practice
people-friendly
procurement

3
5
Realize work
environments withenhanced job
satisfaction

Re t u r n o f M a n a g e m e n t Re s o u r c e s

TH E M I LBON WAY /22

MILBON INTEGRATED REPORT 2022

Fo u n d i n g p h i l os o p hy of “c r e a t i n g a s o l i d c o m p a ny t h a t wo n’ t c o l l a p s e”

23In pursuit of beauty we can enrich ourlives to the fullest.
In pursuit of beauty we can radiate thestreets with colors.
Our desire for beauty is what creates
the future of people and cities.

MILBON INTEGRATED REPORT 2022

002

Looking back at 2021

Consolidated sales exceeded 40 billion
for the first time as a result of “Change theStage 18 -Month Missions!” in response to
the COVID- 19 pandemic

STRATEGY-CEO INTERVIEWMilbon’s Strategy

Overview and key strategies of the new medium-term managementplan“ 7 Regions” as a global strategy to establish a system of local production for
local consumption. “Salon-based Social
Innovation” as a domestic strategy tobring about the new form and function ofsalons in the name of “Beauty Platform”

Social background to beconsidered and the new
medium-term management plan
Transformation of the beauty industry
we aim to drive in the new medium-term
management plan, derived from rapidchanges and risks at home and abroad,and challenges in the beauty industry

Milbon’s vision
for 2026
Striving to become the leading hair caremanufacturer in Asia and join the top fivein the world with the slogan, “Stage for
the Future” to pioneer the beauty industry

Click on one of the above to jump to the appropriate page.

MILBON INTEGRATED REPORT 2022

002

CEO INTERVIEW

Looking back at 2021

CEO INTERVIEW

Social background to be considered and the new
medium-term management plan
In an Unknown Business Environment in the “New Normal” Age

STRATEGY

A New Medium-Term FiveYear Management Plan as a
Growth Strategy to Navigate
Through Uncertain Times

Ryuji Sato, President and CEO, will provide an overview of Milbon’s medium-term five-year management plan announced
in February 2022. In order to achieve sustainable growth even in times when it is difficult to foresee the future, Milbon will
create the future of the beauty industry from a global perspective while transforming itself.

Entering a New Stage of Growth through DX
Our missions in the 18 months ofthe pandemic
I would like to begin by reiterating that
Milbon achieved consolidated sales of
41.5 billion yen in FY2021, surpassing
the 40 billion yen mark for the first time,
despite still being in the midst of the
COVID-19 pandemic.
This outstanding performance is theresult of the efforts of haircare professionals and distributors. I would also
like to extend my gratitude to our consumers, shareholders, and all of our
stakeholders, including our employees,
without whom we would not have beenable to achieve this success. I would
like to take this opportunity to express
my deepest appreciation.
If I were to give another reason for thissuccess, it would be that in June 2020,
in response to the unprecedented situation of the COVID-19 pandemic, we
suspended the medium-term five-year
management plan that had begun in2018 and steered the company towarda growth strategy for a new era, entitled“Change the Stage 18-Month Missions.”

This is an initiative to accelerate thespeed of various changes and reforms
that Milbon has been working on in ashorter period of 18 months in order to
respond to the major changes acrossthe world that have emerged one after
another since the pandemic. The cruxof the mission was to promote DX invarious aspects of the business in one
fell swoop.
Specifically, we launched “milbon:iD,”an official online store that connectswith each and every customer withoutchanging the business flow; “Education
iD,” an online self-development platform
for haircare professionals, unbound bytime or place; the “Digital Arena,” a virtual event space that connects haircare
professionals around the world with the
future of beauty; and the promotion ofdigital marketing, which had been lagging behind other industries.
T h e c o m b i n a t i o n o f M i l b o n ’s
initiatives and shift in people's
awareness yielded great results
I would like to mention here that,

28

MILBON INTEGRATED REPORT 2022

except for the “Digital Arena,” westarted all these projects before theonset of the COVID-19 pandemic.
In particular, the official online store
platform “milbon:iD,” an innovation
for the beauty industry, is an evolution of what has been tried and tested
since the days of home delivery services some 20 years ago. Since its
launch in 2019, it is now beginning
to attract attention in a way that is
consistent with people’s changing
attitudes toward going out due to thepandemic. As for the “Education iD”
and digital marketing, our efforts overthe past 18 months have finally begun
to produce tangible results in line withcurrent trends.
The FY2021 was a year in which thefoundations for DX were laid for ourcompany. Due to the “Change theStage―18-Month Missions,” Milbon is now on the threshold of anothergrowth stage for the post-COVID era.

In light of rapid changes at home
and abroad and the many risks
In February 2022, we announced our
medium-term five-year management
plan that will run to 2026 (hereinafterreferred to as the “new medium-term
management plan”). The main strategies will be described one by one on
the next page, but in order to understand them, it is necessary to touch on
how Milbon perceives today's society
and the beauty industry.
The COVID-19 pandemic has transformed the way people behave
and their sense of values, and theso-called “new normal” era has begun.
The shift from material consumption
to value-oriented consumption, thegrowing trend toward local consumption, and the increasing awareness of
self-care are all changes that we cannot afford to ignore.
In addition, Japan’s population isshrinking at an unthinkable rate. No
one can stop the trends toward urbanchange, so-called “smart cities”, andsmall commercial areas.
Looking at global trends from a moredetached perspective, the tide is certainly turning.
The first point that can be raisedis the reemergence of geopoliticalrisks. Conflicts due to social systems
and ideologies, as well as the Taiwan
Strait crisis, directly affect Milbon asa global company in a variety of ways.
While Russia’s invasion of Ukraine has
not directly damaged us so far as we
do not carry out business in the area,
we assume that the conflict will affectus in regard to the procurement ofmaterials and energy if it is prolonged.
Climate change and carbon neutrality are also important and pressing
issues that can no longer be separated from all business activities
around the world.
No one knows what will happen to
the world in the future. However, one
thing is certain: we are exposed to abusiness environment unlike any wehave ever experienced before, andall this takes place in a “new normal” world where the future is almost
impossible to predict.
Even if we focus on the beauty industry in which Milbon operates, there
are still many challenges lying ahead.
They can be broadly categorized into
structural and industry-specific challenges in the beauty industry.
Structural challenges relate precisely to the population decline andsmaller commercial areas mentioned
earlier. Industry-specific challenges
are those related to productivity andlabor issues for hair salons and hairstylists. Hair salons that have to rely
on technical services have no choice
but to increase the number of customers to improve sales. But there
are always limits to this. In the caseof hair salons, which is a world of artisans, the balance between education
and working hours has always beena concern.

29

Hair salons and the beauty industry
are now being forced to change theway they operate.
As described above, it must be said
that challenges are piling up, whether
we look at society as a whole or justfocus on the beauty industry. But there
is also a great deal of potential andopportunity there.
What kind of management strategy
is needed to grow as a truly global
company in this uncertain “new normal” era? Moreover, what approaches
can be taken to transform the beauty
industry, which faces both structuraland industry-specific challenges?
Our new medium-term management
plan divides the overall strategy into
three parts: a global strategy, a strategy for the domestic beauty industry,
and a sustainability initiative that isthe premise for all business activities, with specific goals and initiatives
for each.

CEO INTERVIEW

002

Overview and key strategies of the
new medium-term management
plan

Domestic Strategy: “Salon-based Social Innovation”

Salon-based Social Innovation
Beauty Platform Plan

STRATEGY

Sustainability
Commitment: Five Key
Challenges

Global Strategy: “Seven Regions”
Japan

Korea

Aiming to acquire
a 30% share

Aiming to acquire
the status of the true industry
leader and make an IPO・Beauty Platform Plan
・Smart Salon Strategy
・Lifetime Beauty Care Strategy
・Promotion of DX Strategy

・Develop executive talent・Become the top foreign
firm (to reach 15%
market share)

North America

Chinesecultural sphere
Aiming to become
the top foreign firm
・Improve production system
・Accelerate growth・Become the No.2 in the Chinese
cultural sphere (to reach 5%
market share)EU

Aiming to expand to
India and Oceania

Two Major
Strategies:

Smart Salon
Strategy

Lifetime Beauty
Care Strategy

Foundation
for theStrategy

Milbon's DX pivotal
in building a stronger
bond with customers

Evolving customeroriented TAC ProductDevelopment System
for B2B2C

Middle East

Aiming to expand to
major areas in the EU
and then to Africa

Aiming to expand to
the Middle East

Long-term vision of expansion

・Operate a distributor network(14 distributors, 200 people)
・Accelerate growth (hair color& hair care)・Build raison d'etre through FP
activities (direct sales)

・Bolster presence throughgrowth in the market

Key themes in the new
medium-term management planpriority to local conditions.
Not only is it effective in contributing to the local beauty industry acrossthe globe, but also a vital way to avoid
as much of the geopolitical risks mentioned earlier. Even today, different
countries and regions have different
laws and trade regulations, and it is
impossible to predict how these willchange in the future climate. However,
if we can establish a system of local
production and consumption, we canminimize the risks that change brings.
In 2021, we completed our second
overseas factory in China. Rather
than to manufacture products for thedomestic market in Japan, this factoryis designed to achieve local production and consumption in the Chinese
cultural sphere. Similarly, we are preparing to set up R&D and production
sites in other regions in the future.
To w a rd a l o n g - t e r m v i s i o n o f
expansion in each region
In addition, since Milbon’s current posi-

30

1・Build relationships with
distributors
・Bolster growth andpresence in the market

Aiming to expand to
Latin America andSouth America

Avoiding geopolitical risks whileremaining close to each country
and region
First, let me start with Milbon’s global
strategy.
At the root of how we define beauty is
the notion that beauty is culture itself,rooted deeply in the local community.
The concept of beauty is universal
worldwide, but the definition of beauty
varies from region to region, no matter how much globalization is talked
about. On top of embracing our culture(s), each one of us is blessed with
our own unique hair texture, skin tone,
and more. Milbon is determined to
explore and realize the unique beautyof each local community by staying
close with our customers and throughcollaboration with salons.
With that in mind, the global strategy
in our new medium-term management
plan is to divide the overall global
market, including Japan, into sevenregions, and to promote local production for local consumption while giving

MILBON INTEGRATED REPORT 2022

ASEAN

tion differs in each region, as shown inthe diagram above, we have establisheda vision of the long-term expansion ofeach region and key themes in the new
medium-term management plan.
For example, in South Korea, where
sales and recognition are already growing, we “aim to acquire the status of
the true industry leader and make an
IPO,” and to achieve this, we need todevelop executive personnel. In the
Chinese cultural sphere, where thebeauty market is expanding rapidly,
we “aim to become the top overseas
beauty product manufacturer” and willachieve accelerated growth by developing a production system.
Milbon is also moving to establish afoothold in India, Oceania, Latin America, and South America, where it has notbeen able to expand, using neighboring
regions as bases.
With our global strategy of sevenregions, Milbon aim to become the No.1
manufacturer in Asia and top 5 in theworld by 2026.

2

3

4

5

*Five Key Challenges include: 1 ) Enrich people’s hearts through beauty, 2 ) Promote recycling in manufacturing and consumption activities, 3 )Practice people-friendly procurement, 4 ) Construct a fair and flexible management structure, 5 ) Realize work environments with enhanced job
satisfaction. See P 38 -, SUSTAINABILITY & ESG for details.

To establish a new form and function of hair salons
The diagram above shows the overall
picture of our strategy in Japan, so
explaining how this diagram cameto be will also serve as an overview
of the domestic strategy.
“Salon-based Social Innovation,”
which is at the top and encompassing the entire diagram, is Milbon’s
salon reform initiatives that aims totransform the salons themselves,
which are plagued by structural andindustrial challenges.
As a measure to realize the reform,
the “Beauty Platform Concept” occupies a wide left side. The concept is
to develop hair salons into a beauty
platform that brings affluence tolocal people through beauty, rather
than just a place to visit for hairstyling.

The two strategies we have prepared for this concept are the “Smart
Salon Strategy” and the “Lifetime
Beauty Care Strategy” below. The
Smart Salon Strategy is to collaborate with salons to create a new form
and function of hair salons that combines real and digital services, andto deploy it throughout Japan. The
beauty life care strategy is to cover
not only hair care but also skin careand beauty health care, so that hairsalons can be a place that accompanies customers throughout their lives
to help them achieve their beauty.
The text in the light-colored frames
at the bottom of the two strategies isa strategy that supports each strategy and clearly states the changes
that need to be made within Milbon,
such as the shift to DX and a reviewof the product development system.

31

Taking company-wide initiatives
toward the realization of a sustainable society
Along with the Beauty Platform Plan,
the “Sustainability Commitment”
on the right-hand side is a pillar of
measures for Salon-based Social Innovation. This means that Salon-based
Social Innovation cannot be achieved
without incorporating the company-wide initiatives toward realizationof a sustainable society.
Under the Sustainability Commitment, there are five key challenges,
and Milbon positions 1 “Enrich people’s hearts through beauty,” as thehighest priority, and 2 through 5 as
those that support this commitment.
The arrow pointing to the left from thegreen area indicates that the realization of a sustainable society is what
supports the Beauty Platform Plan.

002

CEO INTERVIEW

Overview and key strategies of the
new medium-term management
plan

Make Sustainability Company-Wide Responsibilities

The key challenges for achieving bothsustainable business growth andsolving social issues

STRATEGY

Unleashing a New Form of Salon: “Smart Salon Strategy”

Overview of Expo 2025 Osaka, Kansai
Theme：Designing Future Society for Our Lives
Exhibition ：Osaka Pavilion, REBORN Area
Period：April - October, 2025
Venue
：Yumeshima, Osaka
No. of projected visitors：Approx. 28 million

Provided By：Japan Association for the 2025 World Exposition

Collaborating with salons tocreate a new era of beauty spots
The Smart Salon Strategy proposes theconcept of the “Smart Salon,” a completely new salon space providing a fullrange of beauty services for an innovative customer experience throughthe fusion of digital and reality. We will
expand Smart Salons across Japan incollaboration with partner salons thatshare the same aspiration.
We will execute this strategy in twophases. In phase 1 we will develop
model salons in collaboration with
our partner salons in iconic spots incommercial areas, where we will try
out, verify and create new customer
experiences.
In the subsequent Phase 2, smart
salons will be launched in major cities throughout Japan. The target is toopen 500 to 1,000 salons in 100 cities,
and Milbon's knowledge-based product sales* management method andeducation system will be rolled out at
the same time.
The Smart Salon Strategy will create
a new era of beauty spots with highproductivity and customer satisfaction, and will present a new form andfunction of salons.
Smart Salon will be exhibited at
Expo 2025 Osaka, Kansai, where many
people will be able to experience theinnovative model of salons, and will
be widely communicated to society,customers, and people in Japan andabroad.
*Knowledge-based product sales: A sales method
where products are sold alongside valuable information founded in the knowledge and insightsof hairstylists.

Beyond Hair: “Lifetime Beauty Care Strategy”
Expanding business fields withpartners
While hair remains at the heart of Milbon, we continue to push boundaries
to broaden the potential of salonswith our determination to expand“beyond hair” into other fields related
to beauty.
The first phase, which got underway
in 2019, is the cosmetics business.
“iMPREA,” the salon-exclusive
cosmetics brand born from join development with KOSÉ, leverages bothcompanies’ strengths and pioneers a
new culture of purchasing cosmetics
at hair salons.
Next, we are preparing to enter thefield of beauty health care. This is ahealth support business centered onoral products that lead to beauty, andour first product is currently underdevelopment with Kao as our partner.
We will provide services that address
customers' daily changes by utilizing
our unique technologies and evidence,such as aging care and sebum RNA
that monitors lifestyle habits andother factors.

Lifetime Beauty
Care Strategy

32

MILBON INTEGRATED REPORT 2022

These products sold through knowledge-based product sales are ameasure to greatly improve the profit
margin of salons, which rely on technical services for a large portion of
their sales, and will still be an effective means of reforming the way hairsalons are run.

Hair care

Hair care in a broader sense, whichrefers to haircare services in general

Skin care

Skin care in a broader sense
including makeup

BeautyHealth Care

Health support that leads to abeautiful way of living, centeredon oral supplements

Promote recycling in
manufacturing andconsumption activities

2
4

Construct a fairand flexible
management structure

13
5

Enrich people's hearts
through beauty

The key challenges at the foundation of
the Company’s sustainable business growth

Realizing a sustainable society
by addressing the key challenges
First of all, as a premise, the concept
of contributing to society throughbusiness activities is not new at all, as
Milbon, where the belief that “If a company is useful to society, society will
not let it collapse” has been handed
down since the company was founded.
For example, in terms of what is now
called “diversity and inclusion,” forover 15 years our own factory in Mie
Prefecture has been working with localorganizations to support the independence of people with disabilities
through its own initiatives. This eventually spread throughout the region andis now known as the “M.I.E. Model,”attracting attention from all over thecountry.
With this corporate spirit in place, andwith the realization of a sustainable
society being talked about everywhere,
we have reiterated our basic policy of
Sustainability Commitment in orderto further clarify what we should do.
We are committed to achieving asustainable society through our collaboration with haircare professionals.
Based on this basic policy, we haveidentified five key challenges as presented above. Although there are
initiatives necessary to realize a sustainable society in all directions, when
we consider that Milbon should first
focus on what we can do through its
business activities, the top priority
inevitably becomes “Enrich people’s
hearts through beauty.” See the next
chapter, “SUSTAINABILITY & ESG,”

33

Practice
people-friendly
procurement

Realize work
environmentswith enhanced
job satisfaction

for more information on our efforts toaddress these five key challenges ofutmost importance.
A town where people can live
vibrantly is a town where they
can continue to live.
I would also like to emphasize once
again that in our new medium-term
management plan, we have positioned
this Sustainability Commitment at thecore of our strategy to achieve Salonbased Social Innovation (i.e., reforming
the way hair salons are run).
Milbon is undertaking various initiatives to transform the salon intoa “Beauty Platform” that serves as acommunity of beauty and soul in thelocal community. The “Beauty Platform” will play an important role in thedevelopment of a town where people can continue to live vibrantly. In
other words, we recognize that this is
an initiative that will also lead to thesustainability of each city and to SDG
Goal 11, Sustainable cities and communities.

CEO INTERVIEW

002

Milbon’s vision for 2026

STRATEGY

Numerical Targets Beyond Achieving Sustainable Growth

We aim to become the leading global manufacturer that elevates
the value of industry professionals in the eyes of consumers andsociety at large. Our vision is to become

1

No.

top

in Asia

medium-term management plan. The
catchphrase accompanying the new
medium-term management plan is“Stage for the Future.” Milbon is now
on the stage of creating the future of
the beauty industry.
So, what is Milbon’s situation at theend of its five-year run?

Milbon creates the future of thebeauty industry while achieving
growthUp to this point I have only presented a brief summary, but Milbon
has already begun to move toward
its ideal state in 2026 based on
the strategies outlined in the new

Medium-term five-year management plan for the future andbeyondin theworld

As stated above, our new medium-term management plan is to“become the leading manufacturer
in Asia and top 5 in the world by
elevating the value of industry professionals in the eyes of consumers
and society at large.”
Milbon is by no means setting thisSales target

Operating income target

Consolidated sales target

Consolidated sales target

58

¥

10.8

¥

billion(CAGR 7.3%)

Product
shipment value

64

Operatingmarginbillion34

In addition, with an overseas sales
ratio of 24.7%, Milbon in five years'
time will be a corporate entity thatdelivers value to people in a wider
area of the world as a global company
through measures applied in each of
the seven regions.
Other financial numerical targets
are also listed here, so please takea look at them. While keeping an eye
on the overall balance, we will always
invest proactively for growth. From a

corporate management perspective,
it stands to reason that growth is only
possible through continued investment, and Milbon's growth to datebears this out.
Of course, we are not only looking
five years into the future. The new
medium-term management plan I
have explained so far is based on Milbon’s global vision: “To become theworld’s No.1 professional hair caremanufacturer through our dedicationand educational support toward local
beauty industries across the globe.”
Behind the challenges and risks
lie opportunities for growth
It is certain that it will become increasingly difficult to stay ahead of thetimes. It is expected that changes inpeople’s values, fluctuating economic
conditions, and social unrest will be
constantly present. And these risks
will likely continue to confront Milbon
in various ways.
But behind the risks, there are always
opportunities. When we look calmly at
the reality of change, fluctuation, andinstability, there will surely be new roles
and opportunities for Milbon and thebeauty industry.
As a group of consumers living in thisera, Milbon will continue to grow as anorganization of people who aspire tocreate the future of the beauty industry, turning risks into opportunities.
This is clearly stated in our midium-term management plan: “Milbon
strive to achieve a sustainable com-

Cash position

¥

18.3

munity and society for people to live
beautifully, through collaboration withsalons.”Please look forward with great expectations to Milbon’s sustainable growth
and the future it will create.

Return on equity( ROE )

Equity ratio

85.5

billion

%

13.9

%

Me dium -Te r m
Fina nc ia l Ta rge ts
billion18.6 %● Domestic operating income target: ¥8.2 billion● Overseas operating income target: ¥2.6 billion● Domestic sales target: ¥43.7 billion / Domestic market share: 19.2%● Overseas sales target: ¥14.3 billion / Overseas sales ratio: 24.7%

MILBON INTEGRATED REPORT 2022

5

simply as a goal to strive for. We
believe that if all of our employees
have a firm understanding of thestrategies of our new medium-term
management plan and carry out what
they need to do in their respective
positions with The Milbon Way inmind, we will surely be able to achieve
our goals.
Milbon is also looking ahead to concrete figures beyond the imagined
growth curve.
The Company has set a numericaltarget of 58 billion yen in consolidated
sales (43.7 billion yen in domestic
sales and 14.3 billion yen in overseas sales) for the coming 2026. The
domestic market share is 19.2%,
which will solidify our leading position. These are figures that Milbon,
which has achieved its goals andsustained growth to date, can makea reality.

(as of the end of
FY2026 financial year)

Return on Invested Capital( ROIC )Dividend payout ratio

13.6

50.0

%

35

%

Total Amount ofMedium-Term Investment

23¥

billionNe w Produc ts

MILBON INTEGRATED REPORT 2022

003

Milbon’s sustainability
overview

Initiatives for the five key
challenges

Toward the realization of a sustainable
society by establishing KPIs for five key
challenges centered on “beauty”

Current status and approaches to KPIs
as described by employees responsible
for promoting each of the five key challenges

Sustainability highlights

M.I.E. Model is widely attracting attention as aunique employment systemfor people with disabilities

SUSTAINABILITY & ESG
Milbon and Social Issues

Introducing our activities and initiatives
related to sustainability from 2021 to
2022 in four categories: “Environment,”“Society,” “Governance,” and “Education
and Promotion.”

A unique collaboration between the
Yumegaoka Factory and a social welfare corporation, Iga Kouiku Kai, formore than 15 years. Efforts in the M.I.E
Model (also known as the Mie Inclusive
Employment project) are attracting nationwide attention.

Click on one of the above to jump to the appropriate page.

MILBON INTEGRATED REPORT 2022

COMMITMENT

003

Milbon’s sustainability overview

KPIs re vise d in line with the me dium-te r m ma na gement plan
Priority themes

KPI [Medium- to
Long-term Theme]

2026 Target

2030 Target

Issue 1: Enrich people’s hearts through beauty
From cultivating stylists of true dedication to fostering sustainable cities and communities

Bringing the world together in a spiritually rich and sustainable society

SUSTAINABILITY & ESG

The five key challenges for achieving a sustainable society

Co-creating value
with stakeholders: “Creating
Communities ofBeauty and Soul”
as the key issue
in the beauty
industry

Toward solving social problems, achieving sustainable business growth, andbuilding an internal foundation2
4Construct a fairand flexible
management
structure

1
Enrich people’s hearts
through beauty

Fo u n d a t i o n o f t h e C o m p a n y 'ss u s t a i n a b l e b u s i n e s s g r ow t hLifetime beauty partnertraining

Establishment of acarbon-neutral
production system

3

Practice
people-friendly
procurement

Number of registeredmilbon:iD members

1 million milbon:iD members
registered

Number of cities where
Milbon’s “knowledge sales”
method is deployedthroughout Japan

100 major cities in Japan

Total number of annual usersof studio, event, andeducational videos

335,000

Number of registered
Education iD members

100,000

Issue 2: Promote recycling in manufacturing and consumption activities
Carbon neutrality as a response to the climate change crisis

A c h i ev i n g b o t h s u s t a i n a b l e b u s i n e s s
g r ow t h a n d s o l v i n g s o c i a l i s s u e s

Promote recycling
in manufacturing
and consumption
activities

Establishment of knowledge-based product sales
business utilizing both the“real” and the digital

The key challenges for achieving
both sustainablebusiness growthand solving social
issues5

Sustainable container andpackaging design

75% reduction (*compared to 2019) of
CO2 emissions at Yumegaoka Factory

Achieve carbon
neutrality

Reduction rate ofpetroleum-derived virginplastic (*compared to 2020,
per unit sales)

15% reduction in the use of
petroleum-derived virgin plastic

30% reduction in
the use of petroleum-derived
virgin plastic

Issue 3: Practice people-friendly procurement
Fair supply chain and responsible raw material procurement

Sustainable palm oil
procurement

Respect for human rights
in the supply chain

Realize work
environments withenhanced job
satisfaction

CO2 emissions reduction rate
at Yumegaoka Factory

RSPO certified palm oil
adoption rate (MB +B&C)

Number of human rights
violations

RSPO certified palm oil adoption rate
(MB +B&C) 50%

Zero human rights violations wherever
possible

RSPO certified
palm oil adoption rate (MB+B&C) 100%

Zero humanrights violations
wherever possible
through due diligence

Issue 4: Construct a fair and flexible management structure
Fair and flexible management structure

Developing sustainability as thecore of our strategy
Milbon is committed to fostering abusiness, in keeping with our Basic
Guideline for Sustainability, to fulfill
our promises to all stakeholders and toprovide lasting value in society. Basedon this policy, we also endorse andsign the Global Compact proposed by
the United Nations to demonstrate ourwillingness to work together with hairsalons and haircare professionals toresolve social issues.
The UNGC is a voluntary initiative toencourage businesses worldwide to
adopt sustainable and socially responsible policies. As a signatory working toresolve social issues alongside salonsand hairstylists based on the Milbon
Basic Guideline for Sustainability, we
contribute to creating a sustainable
society by adhering to 10 UNGC principles related to human rights, labor,
environment, and anti-corruption.
To achieve sustainability, we havearranged a series of specific issues
into an ESG/SDGs Matrix. We conduct
annual reviews of the progress toward
each goal and disclose the results ofthese to the public. Among these, wehave re-evaluated issues listed that arehighly relevant to our business activities
and for which our stakeholders have highexpectations. In this re-evaluation, we

40

MILBON INTEGRATED REPORT 2022

selected five key challenges from three
topics: solving social issues, achieving
sustainable business growth, building
an internal foundation. We have established KPIs for each and are taking priority action toward these.
In addition, in our medium-term management plan announced in February2022, we have placed greater priority
on our sustainability commitment morethan ever and positioned it at the coreof realizing our most important initiative, “Salon-based Social Innovation.”
Accordingly, KPIs for each issue havebeen revised to more effective indicators, with specific numerical targets
and timelines for realization.

Promoting diversity
among the Board of
Directors

Foundation of theCompany’s sustainable businessgrowthImproving theEffectiveness of theBoard of Directors

Appointment of outside
directors

Active promotion of female
directors
Secure diverse skills,
including internationality

Selection of key issues andprogress in improvement
activities through third-party
evaluation

Continuous appointment of outside
directors with a consistent minimum
ratio of one-third of total
Continuous promotion of female
directors
Secure diverse skills, includinginternationality

Continuous improvement activities forsetting annual issues

Issue 5: Realize work environment with enhanced job satisfaction
Establishment of a human resource system that facilitates diverse working styles
Achieving systems
a n d p ro g r a m s t h a t
encourage workers tokeep working

Turnover rate of young
employees (new graduates
to 3rd year)

Turnover rate 9%

Turnover rate 6%

Paid leave utilization rate

70% paid leave utilization rate

80% paid leave
utilization rate

Engagement Survey

41

System design in 2022, target setting in
2023

003
SUSTAINABILITY & ESG

1

COMMITMENT

Initiatives for the five key
challenges
Current status and approaches to KPIs
as described by employees responsible for dealing with each of the five key
challenges

Enrich people’s hearts through beauty

Target 1 : 1 million registered milbon:iD members
Establish an environment wherestylists can closely serve theircustomers
milbon:iD was the first online stores
platform in the industry to go fully operational in June 2020. It allows more salons to offer products, beauty information, and new communication to morecustomers, free from the stresses of region, time, and other factors throughthe fusion of the “real” and the digital.
By introducing milbon:iD in many salons, haircare professionals will be able
to serve their customers (consumers) intheir daily lives more closely than ever before, and as a result, hair salons will become a “community of beauty and spirit.”

Toward the achievement of two
top priorities
We are working with our distributors
to spread milbon:iD to other areas
so that it can be used by even more
stylists and customers. As of the endof March 2022, 3,696 salons and approximately 210,000 customers had
registered, and we aim to have 400,000
registered by the end of the year.
While we are the first district in ourefforts to promote sustainability, we
will continue to be responsible forpromoting milbon:iD, the first districtin DX promotion.

FP Division, Ginza Sales Office,Tokyo Ginza Branch

be rolled out in Korea and Taiwan within
this fiscal year, and we will contributeto the spreading of spiritual richness
beyond Japan.

recycling in manufacturing and consump2 Promotetion activities
Target 1 : Establishment of a carbon neutral
production system by 2030
Toward a carbon neutral production system
In the midst of recent times of sustainability, the development of low-energy
manufacturing methods at production
factories has led to a high level of interestin energy and environmental initiatives.
In order to reduce CO2 emissions at manufacturing factories in 26th, in 21st we
began considering the use of renewableenergy, and in April 22, we began using
RE100 standards for all power used at
manufacturing factories. In addition to
the introduction of photovoltaic power
generation, we have also switched someof our company cars to EV and hybridcars, making significant progress toward

a 75% reduction in FY2014.
Looking ahead to Milbon’s 100%carbon neutrality

If we accelerate these initiatives andestablish a carbon neutral system forour production plants by 2030, I think we
can also take on the challenge of carbon
neutral for the entire millcarbon next.
In addition, we believe that starting to
identify and calculate Scope3 should
also contribute to reducing emissions
throughout the supply chain. To this end,
we will first work in friendly competition
with neighboring companies to create
attractive plants that can lead the region
as a leading carbon neutral company.

Formulation Technology Development,
Technology Development Group, Production Engineering Department, Production Headquarters

Tetsuya Matsushita

Target 2 : Reduce use of virgin plastic by 30 %by 2030(training up to 335 , 000 people per year, 100 , 000 Education iD members)

fosters life-time beauty partners, is oneof the most prominent types of content.
This is already adopted by many haircare
professionals as a “brick-and-mortar ×
digital” mechanism to learn knowledge
and receive real tests on-line.
In this way, by further enhancing the
educational environment for haircare
professionals through the use of digital,and nurturing lifetime beauty partners
who can continue to meet customers
for their lifetime, the occupation of
haircare professionals not only becomes a lifelong occupation, but also
leads customers to remain beautiful

42

MILBON INTEGRATED REPORT 2022

With more appealing content
As of June 22, the number of registeredusers of Education iD is 16,238. In or-

der to create content that can be usedby as many haircare professionals as
possible, we anticipate launching video
content and strengthening communications through bulletin board functions, as well as expanding the Beauty
Sommelier System itself. The Beauty
Sommelier Provide is also planned to

Teruhiko Kai

Target 2: Lifetime Beauty Partner training
To be able to continue haircare
professionals as a lifelong occupation
Education iD is an online educational
tool developed to help haircare professionals learn more effectively andefficiently for further growth. This not
only promotes DX, which has obviously become an urgent necessity due
to the Corona pandemic, but is also
capable of demonstrating maximum
educational effect even in the current
situation where fundamental correctionof the labor environment is required.
The Beauty Sommelier System, whichand spiritually enriched for a longtime. I believe that this will truly leadto the realization of spiritual richness
through beauty.

Educational Practice Group, Educational Planning Department

Masaki Nishikawa

On reducing petroleum-derived
virgin platforms, centered on 4R
To reduce the use of virgin plastics
derived from petroleum, we are working to achieve our goals through theso-called 4R methods of “reducing,”“replacing,” “reusing,” and “recycling.”
In February 22, we began to reduce theamount of platters used in hair color
caps by 54% compared to previous
versions. We are also working to stop
the use of aluminum and paper labelson pouch products to make them easierto recycle, and have decided to begin
production under these specificationsin 2023. In 2021, usage of such labels
fell by 3.7% from the previous year,
and we will accelerate this trend toachieve a 30% reduction by 2030. In

2021, usage of such labels fell by 3.7%
from the previous year, and we will
accelerate this trend to achieve a 30%
reduction by 2030.
Becoming a society that also
recycles cosmetics as a matterof course
It is our desire that reuse of cosmetic
containers, such as beverage PET
bottles and food trays, which areconventionally recycled, will become
an ordinary world. At present, Kobe
Plastic Next, which is cooperating with
Kobe City, realizes the importance ofinitiatives in industry, government,
and academia. Going forward, we
will continue to realize a society that
we should aim for while deepening

43

Package Design Development Office 1,
Packaging Design Group, Product Development Department, Development
Headquarters

Yosuke Nishikawa
cooperation not only with our own
company but also with other companies and organizations.

COMMITMENT

003

Initiatives for the five key
challenges
Current status and approaches to KPIs
as described by employees responsible for dealing with each of the five key
challenges

SUSTAINABILITY & ESG

3 Practice people-friendly procurement

International Pharmaceutical Affairs Office, Pharmaceutical Affairs Group, Research and Development Department,
Development Headquarters

Atsushi Maeda
ability and society-wide throughout
the supply chain.

Target 2 : Zero human rights violations wherever
possible through human rights due diligence
Updated human rights awarenesswith the development of humanrights policies
For many companies, when considering
the issue of human rights, I think thatin the past the focus would have been
narrowed down to incidents that haveoccurred within a company, or evenamong employees in Japan only. In modern times, however, human rights andbusiness are regarded as being closely
related and inseparable. This is an era
in which we must take into account allkinds of human rights infringements

throughout the global value chain, suchas the production and procurement of
raw materials, manufacturing, sales, anddisposal, beyond our previous scope ofperception limited to intra-company anddomestic realms. To demonstrate ourwill, the Milbon Group’s Human Rights
Policy was formulated and announced
on April 1, 2022 with the approval of
the Board of Directors.
Developing human rights due
diligence
Currently, in order to further deepen

44

MILBON INTEGRATED REPORT 2022

that resonates with all stakeholders,
including customers who come to haircare professionals and beauty salons.

4 Construct a fair and flexible management structure
Target 1 : Continuous appointment of outside
directors, amounting to at least one-third

Target 3 : Ensure a diversity of skills, includinginternationalization(new products and products with formulation changes)

Take a step forward from the supply
chain certification of production
plantsOnce we have acquired supply chain
certification at our manufacturing plants,
we will need to cooperate with our
suppliers to establish a system forprocuring RSPO certified raw materials. If we can create successful cases
domestically, I think it will be possible to expand them to the Thai factory and the Chinese factory thereafter.
Ultimately, we hope that the promotion of RSPO will provide an opportunity for people inside and outside
the company to think about sustain-

the biggest challenge for the future is
how to build this system. While cooperating with our suppliers to identify
risks, we intend to expand a variety
of initiatives, including the formulation of procurement policies and theestablishment of external hotlines. In
addition, we will create a supply chain

Target 2 : Continuous promotion of female directors and executive officers

Target 1 : 100 % adoption rate of RSPO-certified
palm oilWith initiatives that accurately
capture global trends
Although we have been aggressively promoting RSPO certification worldwide, I
feel that the Japanese cosmetics industry is still one step behind schedule. We
joined RSPO in 2019 to ensure that weare able to capture these international
trends without delay, joined JaSPON in
2020, and made certain milbon products branded RSPO in the manner ofBook & Claims (B&C) in 2021. We planto acquire supply chain certification at
our production plants in 22, and aremaking every effort together with our
production divisions.

the understanding of employees andupdate their awareness of human rights,
we are also conducting executive study
meetings and disseminating information
through in-house publications. Humanrights due diligence must be promotedin accordance with the aforementioned
human rights policy. We recognize that

Sustainability Management,Corporate Strategy Development

Fumihiko Aoyagi

Fulfilling our mission as a company that chose the Prime Market
The company selected to list on thePrime Market in the market segmentof the Tokyo Stock Exchange, which
was reorganized in April, 2022. Thiswas probably no surprise to many,
regardless of their position within or
outside the company, given that thecompany meets the criteria for listingon the Prime Market and has a proventrack record of continuously working
to improve corporate value and produce results.
On the other hand, choosing the Prime
Market also means that a highly effective corporate governance system isrequired to be more stringent. As adivision in charge of corporate communications with stakeholders, we haveconfirmed to the management team ourreadiness to strengthen our corporate
governance system in order to ensurethat the communications expected fromthe market are promoted, and we arecontinuing to work to this end.
Toward promoting governancethrough discussion and deliberation
In order to make management moreaware of the importance of strengthening
the governance system, we have been
advancing discussions centered on
the corporate governance code, which
was revised in June 21. New elements

have been added in the revision code,such as the “Diversity of Core Human
Resources” and the response to the“TCFD (Climate-Related Financial Disclosure Task Force),” and we support
proactive discussions while holding
workshops for executives.
There are new elements as describedabove. With regard to “at least onethird of outside directors” and “appointment of female directors andexecutive officers,” both of which are
KPIs, we are making steady progress.
For example, two female executive
officers were appointed in January 22
and two outside directors, including
one woman, were added in March of
the same year, bringing the total to
five outside directors.
These efforts have led to further initiatives, and we have begun responding
to the changing times with a sense ofurgency. This includes setting targets
for the number of females in management positions as part of promoting
diversity of core human resources andselecting directors in charge of TCFD
compliance.
Although these are not matters that
employees are directly responsible
for promoting, unlike the other four
key challenges, we will continue towork toward the realization of a fairand flexible management structurefrom the standpoint of the Corporate
Communications Group by ensuring

45

Corporate Communications Group,
Corporate Administration

Yuko Takahashi

S R / E S G P ro m o t i o n , C o r p o r a t e C o m munications Group, Corporate Administration

Hirohide Andothat the voices of our stakeholders
are heard within the company.

003
SUSTAINABILITY & ESG

5

COMMITMENT

Initiatives for the five key
challenges
Current status and approaches to KPIs
as described by employees responsible for dealing with each of the five key
challenges

Realize work environments with enhanced job
satisfaction

2021
Jan

Jun
Jul

Target 3 : Engagement Survey System designin 2022 , target setting in 2023

Nov
Dec

46

2022

Jan

Human Resource Support, Human Resource
Training and Development Group-Osaka,
Corporate Administration Department

Nozomi Nagasaka

Completed third-party evaluation and assessment of Board
effectiveness in FY2021

Launched Education iD, an online
learning tool for hairstylists

May

Apr

Launched the milbon Premium
Position Line (milbon Luxury Line
in USA), RSPO-certified credit
products

Published Vol. 1 of internal web
magazine, Yomu Milbon 2021,
with the aim to support voluntary employee actions towardsustainability
Yomu Milbon is publishedbimonthly since the publicationof Vol. 1 in 2021

2021: Participated in Kobe
Plastic Next: Joining Forces to
Recycle Refill Packs (plastic
recycling)

Began activities to acquire RSPO
Supply Chain Certification within
2022“Villa Lodola COLOR Interval
Re:Care " won the Jury's Awardat the Sustainable Cosmetics
Award 2021, and Milbon Co.,
Ltd. won the InternationalAward in the corporate category for its efforts to promote
SDGs

Developed a system to predictthe result of alternative methods
to animal testing on eye irritation
sing the HSP method
Launched a new hair color line
ENOG with smaller cap of haircolor tubes to reduce the plastic
usage

Published our Corporate Governance Report in accordancewith the revisions made to
Japan’s Corporate GovernanceLaunched a joint project with
Kao to establish beauty healthcare services at salons
Released the 2021-2022 special
brand film “Words I Encountered at the Salon”

Recorded 3,696 registeredsalons and 210,000 registeredmembers of milbon:iD
Made the decision to sponsor
the Osaka Pavilion at the 2025
World Expo Osaka, Kansai
Resoluted to donate 100,000
euro to the Office of the United
Nations High Commissioner
for Refugees to provide
humanitarian assistance tovictims of the military conflictin Ukraine and neighboring
regions.
Recognized as "2022 CertifiedHealth and Productivity
Management Organization

Appointed two female executive officers for the first time

Announced a new medium-term
management plan
Completed third-party evaluation and assessment of Board
effectiveness in FY2022 withsustainability commitment at
the core of our strategy

Appointed a new female outside
director

Published the year’ s first issueof our internal web magazine,
Yomu Milbon 2022

Appointed two new outside
directors, bringing the total
number of directors to five

Recorded 13,326 registeredusers of Education iD
Fo rm ul a te d a nd a nno unc e dMilbon Group Human Rights
PolicyMay

Koji Tanaka
We believe that if the efforts of eachand every one of us expand as shownin such a tree diagram, we can realize
a better society.

Launched Milbon Digital Arena

Released the 2021 Milbon
Sustainability promotional
video in-house

Began a series of lectures under“Beauty and Cosmetology”
endowed by Kansai University

Adopted renewable energy at
Yumegaoka Factory

Human Resource, Human Resource
Training and Development Group-Tokyo,
Corporate Administration Department

Appointed a female outside
director and achieved theBoard consisting of one-third
outside directors

Installed new pure water equipment to reduce water consumption

Feb

Mar

Sustainability educationand promotion

Began installing FEMS at
Yumegaoka Factory to visualize energy consumption

Apr

Oct

Foster and pass on a common
set of values
The average turnover rate of young
employees over the past five years has
been 12%, which is not an outstandingly
high turnover rate. However, in orderto achieve a low turnover rate of 9%,
or even 6%, we feel that it is essential
not only to design a program but also
to collaborate with the hiring team andeach workplace. We will also conduct
surveys of young employees after joining the company, as well as periodic
interviews, and will promote further
initiatives while repeatedly hypothesizing and verifying.
At the same time, we are introducing an
engagement survey as set forth in Target 3. Originally, we had set up related
items in the compliance awareness survey, but we would like to contribute toimproving job satisfaction while more
appropriately grasping engagement andmeasuring the effectiveness of various
personnel measures.
Each and every Milbon employee
works with a sense of fulfillment andinteracts with stakeholders, and haircare professionals enrich the lives of
the customers they serve so closely.

Governance

Recognized as “Certified Health& Productivity Management
Outstanding Organizations”

Sep

to changes in diverse values.

SocialMar

Target 2 : 80 % paid leave utilization rate

Having a sense of fulfillment andworth is important
The in-house group that provides humanresource support is divided into Tokyo
and Osaka, and we are working together
in the east and the west to “realizea rewarding working environment.”
Until now, teams working to grow thepaid leave acquisition rate have madeit easier to obtain planned paid leavein two installments up to six days ayear, and also conducted centralized
management. Although the average
number of acquisition days in 21 was
9.8 days (59.2%) , further promotion isrequired for 80% in 2030.
For this reason, we are implementing
measures such as providing more visibility
by informing employees of their acquisition rates via e-mail at the beginningof each month during FY2022. I would
also like to work to foster awarenessso that we can fundamentally change
the perception that “if we take the minimum number of days defined by law,that's fine.” I feel that the time spent
at work in one’s life is so large that it isextremely important for each and every
person. That's why I want to realize awork environment in which employees
who want to continue working at Milbon
can continue working while responding

Environment

Feb

Aug

Target 1 : 6 % turnover rate of young employees(new graduates and third-year employees)

MILBON INTEGRATED REPORT 2022

2021 - 22 Susta ina bility H ighlights

Set a target of 20% ratio of female
in management positions by 2030
in order to secure
diversity of core human resources

Jun

47

Establishment of a new Management Committee led by executive officers to promote theseparation of the Board of Directors from execution to management
Conducted Human Rights Training for directors and executive
officers.
Published Vol. 3 of our internal
web magazine, Yomu Milbon
2022

003
SUSTAINABILITY & ESG

COMMITMENT

M.I.E. Model widely attracting attention as a unique employ-ment system for people
with disabilities

003

Rewarding workplaces and fruitful jobs
for all people
Even before SDGs were widely advocated, Milbon has been valuing the creation of rewarding jobs that enhance employees’ satisfaction. As part of thiseffort, for more than 15 years we have been accepting people with disabilities
from the employment support facilities operated by Iga Kouiku Kai and entrusting them with part of our product manufacturing at the Yumegaoka Factory in
Mie Prefecture. We had the honor to interview Ms. Okunishi, the representativeof the organization, and talk in detail about the activities and the prospects forthe future.

For our employees, regardless ofability or disability, to be able to
do work that contributes to profits
My first encounter with Milbon dates
back about 30 years ago. At the time,
I had just opened a small workshop to
support people with disabilities, andwe took on the job of putting labels on
cosmetic boxes for Milbon products.
The turning point came around 2006 ,when the law was revised and momentum grew to support the independence and employment of people withdisabilities. I asked Milbon to establish a special subsidiary company withthe sole intention of creating a place
for them to work. The reply I received
was, “Making a special subsidiarywould be different from what you truly
want to do, isn’t it?”Special subsidiary companies wereoriginally established to promote theemployment of people with disabilities. However, we learned, at the time,that some special subsidiaries havethe sole aim of achieving a certain
employment rate for people with disabilities, with work often unrelated tothe company’s core business, such as
shredding documents or cleaning facilities. Taking this situation into consideration, Milbon told us, “As long as
they are working for us, we want themto do work that contributes to profits,
regardless of their ability or disability.”

Subsequent discussions resulted in
the acceptance of people as part ofthe vocational training program forpersons with disabilities. Currently,
about 20 persons with disabilities areworking at the Yumegaoka Factory.
Efforts to employ people with disabilities through collaboration between
companies and welfare corporations
are rare, and this unique approach is
now called the M.I.E Model, and has
attracted attention nationwide.
Fostering a workplace where all
employees can determine their own
lives proactively and independently
People at our facility working for Milbon strongly feel that they are making contributions. Some even say, “I
don’t take time off because Milbon
products cannot be manufactured if
I don’t come to work.” We are truly
grateful to Milbon for having people
with disabilities who have completed
their training at work outside the facilities successively switched to direct
employment, and also for raising theirsalaries according to their abilities.
Recently, we often hear the words “jobsatisfaction,” “diversity and inclusion,” and "SDGs" used in a variety ofcontexts, and I have witnessed Milbon’s efforts to address these issues
from a long time ago. In fact, it could
be said that the SDGs are a perfect fit

48

MILBON INTEGRATED REPORT 2022

for what Milbon has been valuing forsome time. In the future, we will workwith Milbon to promote initiatives thatenable persons with disabilities tomore proactively determine their own
lives and expand their career possibilities. Rather than simply “doing workfor the sake of working,” I want people to spend money to create better
lives and lead better lives. I will continue to strive to support employment
without changing my point of origin.

Ms. Toshie Okunishi

Representative of Iga Kouiku Kai, a social welfare corporation She has been consistently
involved in the welfare field for more than 30
years and further promotes the M.I.E. Model
together with Milbon. In 2021 , she was awarded
the Blue Ribbon Medal, which is given to those
who have contributed to the public interest.

SUSTAINABILITY & ESG-POINT OF GOVERNANCEMilbon’s Management StructurePOINT OF GOVERNANCE

003

Initiatives to strengthen
corporate governance

SUSTAINABILITY & ESG

Endless reform of
the management
structure to realize
our belief in “creating a solid company
that won’t collapse”
We consider the strengthening of corporate governance (CG) as one of theimportant demands from society, whichis indispensable to realizing our beliefof “creating a solid company that won’t
collapse.” As mentioned above, one of
our key sustainability challenges also
addresses the “construction of a fairand flexible management structure.”
In this section, Masahiro Murai, Managing Executive Director, will explain
our ongoing efforts to strengthen andenhance CG in our company.

Masahiro Murai

Managing Executive Director
In charge of Corporate Administration, Internal
Audit, Finance, and Sustainability Promotion

Improving transparency, fairness,and efficiency
We aim to continuously improve ourcorporate value by enhancing thetransparency, fairness, and efficiencyof management. One of our key sustainability challenges is to “construct
a fair and flexible management structure,” and we are promoting initiatives to achieve this goal. Adapting tobest practices such as the Corporate
Gover nance Code (hereinafter referred to as the “CG Code”) and gaining the support of society at large
overlaps with our belief in “creating asolid company that won’t collapse,”and is thus an essential part of our
focus.
Clear awareness of CG as a specifickeyword began within the company
back in 2019 , but I have to admit thatat first we did not really have a cluethat there were issues regarding theeffectiveness of the Board of Directors. In fact, any matters that needed
to be resolved were resolved without delay, and on the surface there
seemed to be no problem. However,as we continued to discuss and deliberate on governance, we gained50

MILBON INTEGRATED REPORT 2022

the perspective that “continuing topass resolutions without delay” mayitself be a problem. Furthermore, itm a d e u s a w a re o f i s s u e s s u c h a swhether the Board of Directors isfulfilling its role as a forum for discussing management strategies fromdiverse perspectives, and whether
the requisite structure is in place toenable such discussions.
Board Meetings to be a place of
not only “resolution,” but also
“discussion”
Subsequently, in accordance with the

CG Code, we have been working tosecure at least one-third of Outside
Board Directors and promote female
Board Directors and Executive Officers, and in the FY 2021 , Tsuneko Murata, our first female Board Director,
was appointed as an Outside Board
Director. Ms. Murata has actively commented on each agenda item drawing
on her legal expertise, and this has
led to changes such as a greater exchange of opinions between other
Board Directors.
Furthermore, the addition of a new“deliberation agenda” to the Board of
Directors, which previously consisted
only of resolutions and reports, is another important step toward improving the effectiveness of the Board of
Directors. Here, we mainly discuss
responses to the revised CG Code,and as we prepare for the release of
the CG Report containing the three urgent issues of ( 1 ) promoting enhanced
sustainability, ( 2 ) addressing climatechange, and ( 3 ) ensuring diversity, therole of “discussing” before “making
resolutions” is being strengthened.
I n a d d i t i o n , i n o rd e r t o m a k e t h e
Board of Directors more of a forum for
management-related deliberations,a “Management Meeting” consistingof Executive Officers has been newly
established to deliberate on businessexecution-level agenda items. At
Management Meeting, the Executive
Officers, who are the heads of eachdepartment, also gain a deep understanding of the matters to be resolved,
and this helps to facilitate correctunderstanding and communication
among each employee in the field.
We also hope that the practice of active discussion at management meetings will have a positive impact on the
Board of Directors in the future whenpeople are appointed from Executive
Officers to Board Directors.
Promoting the active participationof women and strengthening risk
management
In promoting the active participationof women, we have set a target of
20 % women in management positions by 2030 , and there is no doubtthat the Board of Directors recognizes the importance of this. This is by
no means an easy goal to achieve,
but considering that more than halfof new hires and more than 40 % of

Various initiatives
to strengthen
corporate
governanceConducting study
workshops on
governance andhuman rights

Increase in thenumber of Outside
Board Directors

Active promotionof female Board
Directors andExecutive Officers

Discussion on
climate change
response

Adding a“Deliberation
Agenda” to theBoard of Directors

Establishment of“Management
Meeting”
consisting of
Executive Officers

Set a target of 20%
women inmanagement
positions by 2030

Establishment of a
“Risk Management
Committee”

all employees are women, we believethat this ratio should naturally be reflected in the future.
Promoting these reforms has madeus aware of some new issues, one ofwhich is the need to strengthen risk
management. We have a flexible system and culture to respond to unforeseen circumstances as evidenced byour responses to the 2008 financial
crisis, the Great East Japan Earthq u a k e , a n d t h e r e c e n t C O V I D - 19
pandemic, but it would be true tosay that we have never been sufficient in understanding and preparing
for possible future risks in advance.
Therefore, in addition to the newly
established Management Meeting,a Risk Management Committee has
been formed to establish a system toprepare for unforeseen situations inaddition to our existing ability to respond without delay.
To g a i n s u p p o r t f o r M i l b o n ’s
unique way
We believe that the accurate andreliable functioning of CG is indispensable for the sustainable growtho f a c o m p a n y. T h e r e f o r e , w h i l e I
am repeating myself, it is essential
to keep moving in response to the
CG code and other social changes.

51

O n t h e o t h e r h a n d , h o w e v e r, w ealso believe that we should not
simply accept such changes without fully understanding them, andthat we should sometimes expressa d i ff e re n t i n t e n t i o n b a s e d o n a nessential understanding of the situation within the company. In doingso, however, it is also important toproperly explain the situation to allinternal and external stakeholders
to gain their understanding, and we
recognize that we must continue tos e e k a n d e x p re s s o u r c o m p a n y ' s
own way of doing things and strive
to ensure that it is understood andsupported.
CG is a means, not an end, andwill never be completed in a few
years, and will continue to changewith current trends. Therefore,
we must not only improve issues,
but also continue to enhance ands t re n g t h e n e v e n t h o s e t h a t o n c eseemed complete through continuous trial and error. We will continue
to establish a system that ensuresthat we can meet the expectationsof society, and thus realize a “company that will not callapse.”POINT OF GOVERNANCE

003

Board of Directors

SUSTAINABILITY & ESG

From the center of the right pageRyuji Sato, Representative Director, President & CEO
From the center of the left page

Yasufumi Takeda, Board of Director

Masahiro Murai, Managing Executive Director

Junji Morimoto, Board of Director

Kazunobu Konoike, Board of Director

Hidenori Sakashita, Board of Director

Shoichiro Takahata, Outside Board of Director

Mitsuru Oshio, Standing Audit & Supervisory
Board Member

Taizo Hamaguchi, Outside Board of Director

Keisuke Endo, Outside Audit & Supervisory
Board Member

Tsuneko Murata, Outside Board of Director
Etsuhiro Takato, Outside Board of Director

Yoshihiko Okuda, Outside Audit & Supervisory
Board Member

Chisa Hayakawa, Outside Board of Director

Areas of expectation for Board Directors and Audit & Supervisory Board
Members (use of skills matrix)
In order to continuously improve the Board of Directors’ required supervisory functions, we have created a matrix of the various
skills possessed by Board Directors and Audit & Supervisory Board Members, and are using this matrix as a criterion for determining candidates.
Name

Business

Finance/
Management Accounting
Legal/Risk

GlobalESG/SDGs

R&D

Production/
Logistics

Sales/
Marketing

IT/Digital

HR/Labor

Qualifications

Ryuji Sato

Board Directors and Audit & Supervisory Board Members shallunderstand and take the initiative in practicing The Milbon
Way, the action guideline for all employees of the Company,
and thereby contribute to the development of a sustainable
beauty market.

Corporate Governance Structure
Quick Reference Table (as of March 31, 2022)

Skill Selection
The skills considered necessary for our Board of Directors
were reviewed and selected by the same Board of Directors
in October 2021, taking into account the opinions of eachboard member.

Masahiro Murai

Yasufumi Takeda

Kazunobu Konoike
Board
Director

Common standards for all Board Directors and Audit & Supervisory Board
Members

Junji Morimoto

Hidenori Sakashita

Taizo Hamaguchi (Outside)
Shoichiro Takahata (Outside)

Certified Public
Accountant

Tsuneko Murata (Outside)

Skill Plotting Criteria for Each Board Director
The skill plot of each Board Director was determined based on
the extent of work experience in the relevant skill area.

Institutional Design Company

Company with an Audit &Supervisory Board system

Term of office of Board Directors

2 years

Adoption of Executive Officer
systemYes

Voluntary Committeeof the Board of Directors

Established Nominations andCompensation Committees

Accounting Auditor

GYOSEI & CO.

Etsuhiro Takato (Outside)

Chisa Hayakawa (Outside)
Audit &
Supervisory
Board
MemberTax Accountant

Mitsuru Oshio

Keisuke Endo (Outside)

LawyerYoshihiko Okuda (Outside)Tax Accountant

Expertise and experience details

Corporate Management: Experience in corporate management / Finance and Accounting: Expertise and experience in corporate finance and accounting / Legal and Risk: Expertise andexperience in corporate legal affairs, risk management, BCP, etc. / Global: Overseas experience / ESG/SDGs: Expertise in general sustainability and ESG issues including environmental, socialand governance issues / R&D: Expertise and experience in R&D and product development in the cosmetics industry / Production and Logistics: Expertise and experience in manufacturing,production and logistics management in Japan and abroad / Sales and Marketing: Expertise and experience in sales activities and market marketing / IT and Digital: Expertise and experiencein IT utilization, DX promotion, and information security / HR and Labor: Expertise and experience in human resources development, HR strategy, and improving job satisfaction

52

MILBON INTEGRATED REPORT 2022

See Corporate Governance Report for details.
https://www.milbon.com/ja/ir/uploads/docs/ 20220331 _corporate-governance-code.pdf

53

POINT OF GOVERNANCE

003

Assessment of Board of
Directors Effectiveness

GeneralMeeting of
Shareholders

SUSTAINABILITY & ESG

reportDirectors

Performance-linked coefficient

Audit & Supervisory
Board Members
3

Auditing,
eporting

11(incl. 5 outside directors)

Providing agenda items for
BoD resolution, business
reporting

Reporting・Corporate Administration
Department

Auditing

Reporting,recommendation

President and CEO

Internal Audit
Department

Board ofDirectors

Auditing, evaluation,and guidanceOversight, direction

Over 105%,less than 110%

Over 100%,less than 105%Over 95%,
less than 100%

Over 90%,less than 95%

Less than 90%

Performance-linked
coefficient

200%

175%

150%

125%

100%

80%

50%

0%

Number of persons
Board Directors(including Outside Board Directors)
Audit & Supervisory Board Members(including Outside Audit & Supervisory Board Members)

10
（3）
4
（2）

Total amount of compensation,
Fixed compensationetc.(thousand yen)

427,639（27,522）50,679（16,008）

228,114（27,522）50,679（16,008）

Performance-linked
compensation

149,407（ー）

Total (monetary)

Restricted stockcompensation

Total (stock)377,52150,118（ー）

50,118* 1. The amount of compensation paid to directors includes the amount of compensation paid to one Board Director who retired at the conclusion of the 61st Ordinary General Meeting of Shareholders held on
March 30, 2021, during his/her term of office.
2. The amount of compensation, etc. of Audit & Supervisory Board Members includes the amount of compensation, etc. during the term of office of one Audit & Supervisory Board Member who retired at theconclusion of the 61st Ordinary General Meeting of Shareholders held on March 30, 2021.
3. The performance-linked compensation for the current fiscal year includes the performance-linked compensation for the 61st fiscal year (the previous fiscal year) and the performance-linked compensation forthe 62nd fiscal year (the current fiscal year). This is due to a change in the timing of recording performance-linked compensation from the current fiscal year, as we believe that it is appropriate to record compensation linked to the performance of each fiscal year during the relevant period.

Succession Plan

Percentage of Outside Board Directors
on the Board of Directors

OutsideBoard Directors

Male

Female45

Nominations andCompensation
Committees(Chair: Outside Board Director)

Audit &
Supervisory Board

14
(

83

%

Ratio of Female
Board Directors

total of Board of Directors andAudit & Supervisory Board

%

)

%

Percentage of
Outside Board Directors
on Nominations andCompensation Committees

The Company’s Board of Directors conducts an annual survey and analysis on the effectiveness of the Board of Directors, shares
the results with the Board of Directors, and discusses measures for improvement, etc. Please refer to the Corporate Governance
Report for a summary of the FY2022.

54

MILBON INTEGRATED REPORT 2022

Over 110%,less than 115%

(4) Total amount and number of Board Directors’ and Audit & Supervisory Board Members’ compensation, etc.
for the fiscal year ending December 31, 2021

Business divisions

Internal
Board Directors

Over 115%,
less than 120%

(3) Ratio of each type of compensation, etc.

Corporate Governance Structure
Committee
composition

Over 120%

The ratio of each type of compensation, etc. for Board Directors (excluding Outside Board Directors) is as follows
Basic compensation: Performance-linked compensation = 70% : 30% / Stock-based compensation = (Basic compensation + Performance-linked
compensation) x 20%.

Management Meeting(Secretariat of Compliance and Risk Management)
Auditing, guidance,
supportReporting

ReportingTarget achievement

3) Stock-based compensation
Stock-based compensation is granted once a year (around May) with a restriction on transfer until retirement of the Company’s shares equivalent tothe amount obtained by multiplying the base compensation plus the performance-linked compensation by 20%.

Accounting
auditing

報告(Chair: President and CEO)

(Chair: Managing Executive Director)

Accounting
Auditor(incl. 2 outside audit &supervisory board
members)

Election, dismissal,
oversightAuditing

・Risk Management Committee
・Sustainability Committee

1) Basic compensation
The amount of basic compensation is determined in accordance with the Board Director’s position and paid in cash.
2) Performance-linked compensation
In order to raise awareness of the need to improve the Company’s performance in each fiscal year, performance-linked compensation is calculated
by adding up the percentage of achievement of each performance indicator target multiplied by the weighting ratio, and then multiplying the performance-linked coefficient corresponding to the percentage of achievement of the target by the performance-linked standard amount corresponding to theposition, and is paid in cash. The performance indicators, performance-linked coefficients and actual performance-linked compensation are as follows.
＜Performance indicator> Consolidated net sales: Weight 60% / Consolidated operating income: Weight 30%/ Consolidated profit: Weight 10%

Audit & Supervisory Board

6 (5 outside directors)

Business Execution
Structure(2) Method of calculating compensation for Board Directors (excluding Outside Board Directors)

Election, dismissal, anddetermination ofcompensation limit

Board of Directors

Nominations
andCompensation
Committees(1) (i) Basic policy for Board Director compensation

・Compensation for Board Directors (excluding Outside Board Directors) shall consist of base compensation, performance-linked compensation,and stock-based compensation as an incentive to continuously increase corporate value, in order to encourage each Board Director to perform
his/her duties with an awareness of business performance and sustainable improvement of corporate value.
・The Board of Directors consults the Nominations and Compensation Committees, which are comprised mainly of Outside Board Directors, on
proposed compensation amounts, and determines individual compensation amounts after obtaining advice as necessary.
・Outside Board Directors and Audit & Supervisory Board Members shall receive only base compensation, as they are independent from the executionof business operations, and compensation linked to performance is not appropriate for them.

Election,dismissal

Election, dismissal, anddetermination ofcompensation limit

Consultation
requestReportingBoard Directors' Compensation System

MILBON CORPORATE UNIVERSITY (MCU)(Next Management Leadership Development Program)

The Company considers succession planning for the CEO
as one of its most important management strategies, andsince 2015, the Company has been conducting its own
succession planning program for the next CEO. Under thisprogram, 42 candidates are divided into 4-year programsof 2 years each, starting in turn since 2015, to develop andselect the next management executives. Members of theBoard of Directors participate in this program as lecturers
in their respective jurisdictions and areas of expertise, andthe Board of Directors actively participates in and supervises this program.
This program was completed in 2019, and the selectedcandidates are currently in charge of business divisions, etc.
We are in the process of further narrowing down the poolof candidates and formulating a training plan for the nextstage of the program, and will continue to select the CEO.

Objective: To provide growth opportunities for the next generation of
executives through sessions with board members, etc., frompassing on Milbon-ism to cultivating future visionary skills.
Topic: Succession and Conversion
Development topics: philosophy and ism penetration,
self-awareness, future orientation, foresight,
decisiveness, and execution
Period: 2 years per term (2015-2019
Medium-term Management = 1st to 4th
term)

Final
examination
Mock formulation of
medium-term management plan

2nd year
Discussion of topics related to future vision,formation of organizational culture

1st year
Mastery of 10 internal courses(History and ism, organizational personnel and human resource development,
marketing, finance, leadership qualities and mission, etc.)

55

003
SUSTAINABILITY & ESG

D i s c u s s i o n f ro m a “ c u s t o m e r
perspective” based on field experience
I believe that my past experience as asalesperson in the field allows me to discuss management strategies througha “customer perspective” by grasping
market trends and shifts. A “solid company that won’t collapse,” which is thestarting point of Milbon, implies a company that is indispensable to society.
If a company is useful to society, society will not let it collapse. Keeping thisfirmly in my mind, we will continue to
implement high-quality business strategies with the belief that our contribution
to the development of beauty industry
will also lead to the Company’s growth.
To become a company loved bypeople and salons around the world
We have been listening to the voices ofthe frontlines every day to contribute

A company with hope and a future
through a series of new innovations
Since serving as General Manager of the
Corporate Strategy Development Department, I have been working on medium-term
management plans and new businesses
from a Company-wide perspective. I amaware that I am expected to create thefuture from a more Company-wide perspective by assuming the position ofBoard Director. I believe that Milbon iswhat it is today as a result of continuous innovation over the 20 years since I
joined the Company, and I will continue tocommit to expanding the Company filledwith hope and a brilliant future througha series of new innovations.
C re a t i n g n e w m a r k e t s f ro m a“consumer perspective”
We will create new markets from a“consumer perspective” without be-

POINT OF GOVERNANCE

POINT OF GOVERNANCE

Accomplishing high-quality businessstrategies to further develop new markets and global markets

Enhancing our social and economic value
Strengthening Milbon’s presence in the stock market

Messages from Newly-Appointed
Board Directors

to the increase in sales and profits ofsalons through the activities of our “FP
positions,” which are sales positions.
And now, in order to respond to thosevoices, we are working toward the realization of the “Beauty Platform Concept”
from the consumer’s perspective andsociety’s perspective.
To achieve this, the “Smart Salon Strategy” and the “Lifetime Beauty Care Strategy,” two major strategies that integrate
real and digital elements, are extremely
important in that they will support a
new form and function of salons. We
can realize this goal by advancing theevolution and construction of a systemof activities tailored and personalized
for each salon.
We will steadily build a foundation to
become the “world's No. 1 professional
hair care manufacturer” loved by people
and supported by haircare professionals
and salons all around the world.

ing confined by the boundaries of thebeauty industry, by working closely with
consumers in each region through salons. In addition, we will establish newmarkets by creating a new purchaseexperience using digital technology
to increase the unit price of productpurchases and the rate of repeatedpurchases, and by developing a service
that allows consumers who have neverpurchased products at a hair salon tohave an enjoyable shopping experience.
Our goal is to become “the world’s
most sought-after company with theNo. 1 support rate among haircare
professionals” in the global market.
We will strive to further enhance ourcorporate value by strengthening ourmarket presence and by upgrading thebusiness model we have cultivated todate while respecting the culture andcustoms of each country and region.

56

MILBON INTEGRATED REPORT 2022

Junji Morimoto

Joined the Company in 1992 . After serving as
General Manager of Tokyo and Osaka Branch,
he became Executive Officer (Deputy Directorof FP Headquarters and General Manager ofTokyo Aoyama Branch) in 2019 , Executive Officer (Director of FP Headquarters) in 2021 , andBoard Director (Director of FP Headquarters,
and in charge of Global Sales and Marketing,
Education Planning) in 2022 .

Hidenori Sakashita

Joined the Company in 2001 . After working in theSales Section of Tokyo Branch, Product Planning
Section of Marketing Department, and Corporate
Planning Department, he became the President of
MILBON USA, INC. He has served as the General
Manager of the Corporate Strategy Development
Department since 2018 and became Board Director (in charge of Corporate Strategy Development
Department, ICT Strategies Department, and Cosmetics Business Planning Department) in 2022 .

Messages from Newly-Appointed
Outside Board Directors

Professional advice from an objective standpoint
As a member of society, a company isrequired to fulfill its social responsibilities, such as ensuring managementtransparency, clarity of business strategy,
and legal compliance in its corporate
activities. In recent years, management
measures to enhance social value, suchas from the perspective of SDGs, havebecome increasingly important, and I
would like to contribute to the enhancement of both social and economic value
by providing expert opinions and advice
from my objective position as an Outside
Director to ensure the implementationof such measures.
Making good use of overseas
business experience for overseas
strategies
I have worked for a food company fora long time and have been involved in

Recommendations from an institutional investor’s perspective
In addition to my professional knowledge
as a securities analyst and tax accountant, I feel it is my responsibility to apply
my institutional investor’s perspective
gained from many years of dialogue withinstitutional investors and my experience
as a finance and accounting manager
to Milbon’s important decision-making and recommendations. In addition,
I would like to fulfill my role as an Outside
Director by actively discussing “diversity and inclusion,” something that has
been strongly demanded by society inrecent years.
Improving our reputation in thestock market
Since I first encountered Milbon during
my time at a securities company, I was
surprised at the high rate of encountersoverseas business and organizational
management. I believe that such experience will be put to good use to realize
consumers’ happiness through beauty andhealth, and to realize Milbon’s management
challenge, which is the importance ofoverseas business in its growth strategy.
Milbon understands the importance ofhuman resource development and theimprovement of technical skills in orderto realize the happiness of consumers
through beauty and health. We are working
to improve the skills and work environmentof haircare professionals in salons whoshare the same aspirations as Milbon, andwe are focusing on product development
in collaboration with salons, backed byfundamental research on hair.
This is truly a leading company in the
pursuit of beauty and health, and I will
make every effort possible based on mypast experience and my perspective asa third party.

with Milbon products in salons, which
made me realize that Milbon products
are trusted and supported by many
hairstylists, from major chains to individual salons.
Milbon’s strengths lie in its capabilities to develop and create high-quality
products and its strong relationships
with salons. The company’s performancesince going public has been remarkable,
and I am confident that we can hopefor sustainable growth in the future byfurther penetrating the domestic market
and cultivating overseas markets.
However, I feel that these strengths andcapabilities are not sufficiently evaluatedby the stock market. I would like to makeappropriate recommendations, including
further enhancement of financial andnon-financial information, to ensure that
Milbon's commendable strengths areproperly assessed.

57

Etsuhiro Takato(Advisor to Ajinomoto Co., Ltd.) After joining
Ajinomoto Co., Inc., he served as President andDirector of overseas subsidiaries in Indonesia, Brazil, Thailand, etc., President of ASEAN
Regional Management Company, and Execu t i v e O ff i c e r & S e n i o r V i c e P re s i d e n t , a n d
Representative Director of Ajinomoto Co., Inc.
and is currently an advisor to the company.

Chisa Hayakawa

She was in charge of public offering operations
at Calbee, Inc. and two other companies. She
later served as Executive Officer and General
Manager of the Corporate Planning & Investor Relations Department and the Financial &Accounting Department before assuming her
current position. She is a certified analyst with
the Securities Analysts Association of Japanand a certified tax accountant.

004

Financial Highlights

F i n a n c i a l s u m m a r y o f o p e r a t i n g results, per share information, and financial indicators for the 11 -year period
2011 to 2021

Non-Financial
Highlights
Quantitative data over the triennium of
2019 to 2021 from the perspectives of“people and society,” “environment,”
and “governance”

PERFORMANCE
Milbon’s Performance Data

Company Overview
and Stock Information
Company overview and stock information, including principal stockholders,
stockholding ratios by type of shareholder, share price and trading volume,
etc.

External Assessments
and Participating
Organizations, etc.
Collaboration with the inter national
community through external assessments such as being recognized as a
“ 2022 Certified Health & Productivity
Management Outstanding Organizations” and signing the United Nations
Global Compact

Click on one of the above to jump to the appropriate page.

MILBON INTEGRATED REPORT 2022

004
PERFORMANCEINFORMATION

Financial Highlights
Financial summary of operating results, financial indicators, etc. for the
11 -year period from 2011 to 2021

2011

2012

2013

2014

2015

2016

2017 *1

2018 *2

2019

2020

2021

Net Sales

20,526

21,887

23,82925,22627,377

29,13433,45633,88236,26635,72541,582Gross profit

13,62014,833

16,174

17,281

18,681

20,10022,79722,18923,711

23,38527,498Operating income

3,792

3,986

4,302

4,451

4,727

5,113

5,345

6,260

6,751

6,394

7,817

Ordinary income

3,545

3,735

4,059

4,218

4,427

4,733

4,997

5,811

6,231

5,791

7,158

Profit attributable to owners of parent

2,304

2,128

2,516

2,621

2,950

3,069

3,817

4,495

4,517

4,204

5,109

Net assets

19,05920,367

22,14924,104

26,212

27,706

31,10333,15135,88236,30840,197

Total assets

22,592

23,662

26,321

28,13830,79932,44437,642

39,634

41,91243,07548,238Cash flows from operating activities

3,157△ 1,198△ 1,236△ 2,834△ 4,366△ 1,919

6,487

101

△ 1,506

4,346

Cash flows from investing activities△ 1,202△ 2,777

1,014

952

882

1,008

1,038

1,083

1,278

1,380

1,493

Operating results (million yen)

△ 836

Cash flows from financing activities
Depreciation

2,977

△ 910

3,511

△ 1,387

2,766△ 1,052

3,895△ 1,135

3,355△ 1,262△ 1,317△ 1,639

4,486

6,548

6,636

△ 161

△ 3,995

1,609

1,777

△ 1,869△ 3,416△ 1,919

528

840

1,680

1,028

2,779

4,262

1,570

1,149

1,605

1,917

4,644

Earnings per share

69.68

64.35

63.69

80.03

90.10

93.73

116.58137.31137.99129.24157.17

Net assets per share

576.26615.84563.48736.05800.51846.16949.991,012.58

1,096.02

1,117.10

1,236.41

Dividends per share

26.67

27.50

28.33

34.00

37.00

39.00

46.00

54.00

56.00

56.00

68.00

Equity ratio

84.4

86.1

84.1

85.7

85.1

85.4

82.6

83.6

85.6

84.3

83.3

Return on equity (ROE)

12.5

10.8

11.8

11.3

11.7

11.4

13.0

14.0

13.1

11.6

13.4

Return on assets (ROA)

10.6

9.2

10.1

9.6

10.0

9.7

10.9

11.6

11.1

9.9

11.2

Gross profit margin

66.4

67.8

67.9

68.5

68.2

69.0

68.1

65.5

65.4

65.5

66.1

Operating margin

18.5

18.2

18.1

17.6

17.3

17.6

16.0

18.5

18.6

17.9

18.8

Ordinary margin

17.3

17.1

17.0

16.7

16.2

16.2

14.9

17.2

17.2

16.2

17.2

Capital expenditure
Per-share information*3

Financial Indicators (%)

Net profit margin

11.2

9.7

10.6

10.4

10.8

10.5

11.4

13.3

12.5

11.8

12.3

Dividend payout ratio (Consolidated)

38.3

42.7

37.1

42.5

39.3

41.6

39.5

39.3

40.6

43.3

43.3

*1: FY2017 was irregularly closed, and the financial figures are for the 12 months and 11 days from December 21, 2016 to December 31, 2017. In addition, upon consolidation, the figures for overseas consolidated subsidiaries are based on the non-consolidated financial figures for the 15-month period from
October 1, 2016 to December 31, 2017.
*2: Effective from the beginning of FY2019, the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 30, 2018) and the Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 30, 2018) were adopted early,
and FY2018 amounts were retrospectively applied.
*3: Earnings per share and net assets per share have been retroactively adjusted for the three stock splits during the above period. The relevant stock splits are as follows (1) 1.1 for 1 stock split on December 21, 2010; (2)1.2 for 1 stock split on December 21, 2013; and (3) 2 for 1 stock split on January 1, 2018."

60

MILBON INTEGRATED REPORT 2022

61

004
PERFORMANCEINFORMATION

Non-Financial Highlights

Number of employees *Permanent employees
Ratio of male/female employees (%) *Permanent employees
Number of employees(Non-Consolidated) *Permanent employees
Ratio of male/female employees (Non-Consolidated)(%) *Permanent employees
Average length of service (years)
Average age (years old)
Number of hires *Permanent employees
Ratio of male/female hires (%) *Permanent employees
Employee turnover among new graduates within 3 years (%)
Ratio of new graduate/mid-career hires (%)
Turnover rate for administrative and non-administrative employees (%)
Turnover rate for total employees (%)
Ratio of female employees in administrative positions (%)
Ratio of non-Japanese employees in administrative positions (%)
Ratio of mid-career employees in administrative positions (%)
Annual working hours (average hours/employee)
Official working hours (average hours/employee)

910
56.4％/43.6％
735
60.3％/39.7％
11.4
35.3
62
38.7%/61.3%
11%84.7%/15.3%
0%/2.4%
2.1%
6.7%
5.6%
10.8%
2,177
1,900

People and society

58.6%
0%/100%-/100%
20
158
0
2.62%
18
5
0
0
97.6%
95.0%
123,522

Ratio of paid leave taken (%)
Proportion of employees who took childcare leave (male/female) (%)
Return rate following childcare leave (male/female) (%)
Number of employees working shortened hours for childcare
Number of employees taking paid leave for family care
Number of employees working shortened hours for family care
Ratio of employees with disabilities (%)
Number of employees with disabilities
Number of rehired employees
Number of occupational accidents <lost time injuries>
Number of occupational accidents <fatal accidents>
Ratio of employees participating in health checks (%)
Ratio of employees participating in stress checks (%)
Education and training expenses per employee (yen)91.3

Education and training hours per employee (hours)

1,100
27,936-

Number of educational support events and seminars held
Number of participants in educational support events and seminars
Number of registered users on education iD
Number of registered users on Digital Arena

Donation activities (thousands of yen)

1,804
123
876
1,500
49,471
5,000
2,800
165

Save the Children Japan
JHD&C (NPO)
Ashinaga Foundation
Kansai University (Educational Corporation)
Iga Koikukai (Social Welfare Corporation)
Japan Platform (Specified Nonprofit Corporation)
KIDS EARTH FUND (NPO)
Other donations including research and development grants
Other

62

59.4%
12.5%/100%
100%/100%
23
153
0
2.34%
20
8
0
0
98.0%
95.7%
84,742
103.8

523
8,862
1,118
99
696
1,500
1,000
1,100
30

1,038
53.3％/46.7％
810
58.1％/41.9％
10.3
35.2
62
35.5%/64.5%
10%84.8%/15.2%
0%/3.0%
2.5%
9.0%
5.4%
9.2%
2,152
1,900

59.2%
19.3%/100%
100%/100%
23
145
0
2.13%
20
6
1
0
99.6%
93.4%
103,773

Target Company
Milbon Group
Milbon Group
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.

CO2 emissions *Total emissions

4,399

3,912

4,129

Milbon Co., Ltd.

CO2 emissions* Within total emissions "Scope 1" (t-CO²)

1,248

1,205

1,300

Milbon Co., Ltd.

CO2 emissions* Within total emissions "Scope 2" (t-CO²)

3,151

2,707

2,829

Milbon Co., Ltd.

Electricity consumption - Total ('000 kWh)

6,442

6,190

6,518

Milbon Co., Ltd.

Electricity consumption - Purchased electricity ('000 kWh)

6,442

6,190

6,466

Milbon Co., Ltd.

Electricity consumption - In-house power generation ('000 kWh)

0

0

51.8

Milbon Co., Ltd.

Electricity consumption - Renewable energy ('000 kWh)

0

0

0

Milbon Co., Ltd.

Total energy consumption (KL: crude oil equivalent)

2,215

2,134

2,249

Milbon Co., Ltd.

Total energy consumption - Intensity (KL: million yen)

0.073

0.071

0.067

Milbon Co., Ltd.

City gas consumption (km³)

237

240

264

Milbon Co., Ltd.

Gasoline consumption (kL)

303.34288.57307.12

Milbon Co., Ltd.

Heavy oil consumption (kL)

0

0

0

Milbon Co., Ltd. Factory

Light oil consumption (kL)

0.972

0.425

0.069

Milbon Co., Ltd. Factory

0

0

0

Milbon Co., Ltd. Factory

Milbon Co., Ltd. Factory

Kerosene consumption (kL)

Air emissions
NOx(t)---

SOx(t)

0

0

0
523.0

Milbon Co., Ltd. Factory

Water intake（m³）

41,76740,44547,219Milbon Co., Ltd. Factory

Milbon Co., Ltd.

Water consumption（m³）

41,76740,44547,219Milbon Co., Ltd. Factory

Milbon Co., Ltd.

Water consumption - Intensity（m³/million yen）
Water discharge - Total（m³）

1.354

1.404

Milbon Co., Ltd. Factory

Milbon Co., Ltd.

1.374
22,40623,454

26,214

Milbon Co., Ltd. Factory

Milbon Co., Ltd.

Milbon Co., Ltd.

Pollution load

Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.

BOD(t)

28.5

4.7

5.9

Milbon Co., Ltd. Factory

SS(t)

7.5

2.2

6.2

Milbon Co., Ltd. Factory

5

1.9

1.4

Milbon Co., Ltd. Factory

-

940

1,054

Milbon Co., Ltd. Factoryn-HEX(t)Milbon Co., Ltd.
Milbon Co., Ltd.

Plastic

Milbon Co., Ltd.

Consumption (t)Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.

FY 2019

Milbon Co., Ltd.

Board of Directors

Milbon Co., Ltd.

Ratio of Outside Board Directors (%)

Milbon Co., Ltd.
Milbon Co., Ltd.

86.1

Milbon Co., Ltd.

Attendance rate at Board of Directors meetings (%)

893
18,236
8,786

Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.

Milbon Co., Ltd.

Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.
Milbon Co., Ltd.

2

Number of Outside Board Directors

Milbon Co., Ltd.

FY 2020

8

Number of Internal Board Directors

Milbon Co., Ltd.

Number of Board of Directors meetings

2,299
50
30

408.1

Milbon Co., Ltd. Factory
Production Headquarters
Milbon Co., Ltd. Factory

Water resources

Milbon Co., Ltd.

Milbon Co., Ltd.

1,043
117
813
1,500
-

400.6

Waste volume (t)Milbon Co., Ltd.

Ratio of female Board Directors (%)

6,321

Target Company

FY 2021

Waste

Milbon Co., Ltd.

Governance

Educational Support for Hairstylists

975
54.2％/45.8％
780
59.1％/40.9％
10.8
35.3
63
36.5%/63.5%
14%84.3%/15.7%
3.0%/2.0%
2.0%
9.5%
5.4%
11.1%
2,116
1,900

FY 2021

Environment

Diversity & Inclusion

FY 2020

FY 2020

EnergyQuantitative data for 2019 - 21 from an
ESG perspective
FY 2019

MILBON INTEGRATED REPORT 2022

FY 2019

Audit & Supervisory Board
Number of Standing Audit & Supervisory Board Members

22%

15

13

Number of Audit & Supervisory Board meetings

Nominations and Compensation Committees
Ratio of Outside Board Directors (%)

Milbon Co., Ltd.
Milbon Co., Ltd.

96%

99%

99%

Milbon Co., Ltd.

1

1

1

Milbon Co., Ltd.

8

8

8

1

Number of Nominations and Compensation Committee meetings

33%

Milbon Co., Ltd.

11%

100%

Attendance rate at Audit & Supervisory Board meetings

6

3

0%

2

Number of Outside Audit & Supervisory Board Members

7

2

20%
0%

Target Company

FY 2021

2
100%
1

14

2

Milbon Co., Ltd.
Milbon Co., Ltd.

Milbon Co., Ltd.
Milbon Co., Ltd.

100%

Milbon Co., Ltd.

2

Milbon Co., Ltd.

66%

66%

75%

Milbon Co., Ltd.

0

0

0

Milbon Co., Ltd.

0

0

0

Compliance
Number of whistleblowing reports

2

Number of harassment reports
Number of legal actions for corruption and bribery

Milbon Co., Ltd.

Other compliance

Milbon Co., Ltd.

Company-wide compliance awareness survey response rate (%)

95.9%

63

3

96.1%

3

93.6%

Milbon Co., Ltd.
Milbon Co., Ltd.

Milbon GroupINFORMATION

004

Company Overview and Stock
Information

Company Overview

Trading Name : Milbon Co., Ltd.
Established : July 1960
Capital: 2.0 billion yen

Number of: Non-consolidated - 810

Employees

Consolidated - 1,038

Head Office : Kyobashi Edogrand, 2-2-1 Kyobashi,
Chuo-ku, Tokyo
CentralStock Information
Listed Stock Exchange: Prime Market,
Tokyo Stock Exchange
Stock code: 4919
Total number of shares authorized:
120,408,000
Number of shares outstanding: 33,117,234
Number of shareholders: 13,411: 2-3-35 Zengenji-cho, Miyakojima-ku,

Branches

Shareholding Ratio by Type of
Shareholder
Foreign Institutions
and Individuals

Individuals
and Others

25.41%

26.45%

Financial
Instruments
Business
Operators

0.71%

Other
Companies

12.52%

Financial
Institutions

34.92%

Research Institute Osaka-shi, Osaka: Saitama / Tokyo Aoyama / Tokyo
Ginza /Nagoya / Osaka / Hiroshima /Fukuoka
Sales Offices : Sapporo / Sendai / Niigata / Jingumae/ Yokohama / Kanazawa / Shizuoka /Kyoto / Kobe / Okayama / Matsuyama/ Kumamoto
Factories: Yumegaoka Factory / Thailand Factory/ China Factory

Subsidiaries : MILBON USA, INC.
Milbon Trading（Shanghai）Co., Ltd.
Milbon Korea Co., Ltd.
MILBON（THAILAND）CO., LTD.
MILBON MALAYSIA SDN. BHD.
MILBON VIETNAM CO., LTD.
MILBON SINGAPORE PTE. LTD.
Milbon（Zhejiang） Cosmetics Co.,
Affiliated: Ltd.

Company

Kose Milbon Cosmetics Co., Ltd

Representative :Offices

Principal Shareholders (Top 10)
Shareholder
The Master Trust Bank of Japan, Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT
Konoike Asset Management Company
Custody Bank of Japan, Ltd. (Trust account 9)
Custody Bank of Japan, Ltd. (Trust account)
SMBC Trust Bank Ltd. Designated Securities Trust
MILBON Cooperating Companies Shareholding
Association
Sumitomo Mitsui Trust Bank, Limited
Kazunobu Konoike
J.P. MORGAN BANK LUXEMBOURG S.A. 384513

Number ofshares held

Shareholding ratio

4,120,000
2,389,347
1,920,000
1,380,400
1,328,800
1,328,000
991,456

12.67%
7.35%
5.91%
4.25%
4.09%
4.08%
3.05%

934,400
864,253
692,910

2.87%
2.66%
2.13%

Taiwan / Hong Kong / Turkey / Indonesia
Philippines / Germany* Becoming a
subsidiary in April 2022

Share Price and Trading Volume
(yen)
7000

External Assessments and Participating
Organizations, etc.
External Assessments

As of December 31, 2021

PERFORMANCEINFORMATION

Share price(Number of shares)

Trading volume

6,000,000

Our unique business model wins
the Porter Prize
Milbon was awarded the Porter Prize
2020, a program sponsored by the Schoolof International Corporate Strategy, Hitotsubashi University Business School.
Since our establishment in 1960, we havebeen consistently focused on stylists andsalons. Revenues have increased for 24
consecutive years since the Company’s
listing to 2019, and Milbon has been recognized for the uniqueness of its business strategy which supports this level ofgrowth and maintains high profitability.
Going forward, we will continue to use abusiness model focused on stylists andsalons and contribute to the realizationof a rich society through beauty.
Recognized as an “Excellent HealthManagement Corporation 2022”
Milbon has been recognized as a “2022
Certified Health & Productivity Management Outstanding Organization”
by the Ministry of Economy, Trade andIndustry and the Nippon Kenko Kaigi.
In 2020, Milbon adopted the Milbon
Health Declaration, which aims to createa workplace environment where eachand every employee can continue towork in good physical and mental healthand achieve both “job satisfaction” and“purpose in life.” We have also identified “realize work environments withenhanced job satisfaction” as one of
the five topics that we place particularemphasis on in order to realize a sustainable society, and we are promoting
the creation of an environment thatencourages the health and engagementof our employees. We will continue topromote health management that leads
to employee vitality and job satisfaction.

Cooperation with Society
Joined the United Nations Global
Compact
Milbon endorsed the United Nations
Global Compact (UNGC) proposed by
the United Nations and signed it in May
2020. UNGC is a voluntary initiative inwhich companies and organizations
participate in the creation of a global
framework for sustainable growth byacting as good members of society
through responsible leadership. Basedon its own basic sustainability policy, Milbon supports the UNGC's 10
principles related to “human rights,”“labor,” “environment,” and “anti-corruption” as a participating company
that works with salons and haircare

professionals to solve social issues,
thereby contributing to the realizationof a sustainable society.
Recognized as a full member ofthe RSPOIn March 2022, Milbon was approved
as a full member of the Roundtable on
Sustainable Palm Oil (RSPO), which
was established by related organizations including the World Wide Fund for
Nature (WWF). Palm oil is a vegetableoil used worldwide for a wide variety of
purposes, some of which include use
as a raw material for cosmetics. On theother hand, environmental issues suchas the destruction of tropical rainfor-

ests and human rights issues such aslabor have been cited in connection
with the development of these plantations. In February of the same year,
Milbon announced its Mid-Term FiveYear Management Plan, setting a goal of
100% adoption of RSPO-certified palm
oil by 2030, and the entire company
is working to achieve this. In January
2020, we joined JaSPON (Japan Sustainable Palm Oil Network), a Japanese
network for sustainable palm oil, toexchange information.
* Check out our progress at www.rspo.org

6000
4,800,000

5000

Milbon Co., Ltd. 2022 Integrated Report
Total Direction

4000

3,600,000

Edit

Art Direction

2,400,000

Design2000

Direction

1,200,000

Photo
Produce

2017

MILBON INTEGRATED REPORT 2022

2018

2019

2020

2021

2022

: Atsushi Hino（ Kuchibue Shoten）, Shun Ohmi (Kuchibue
Shoten）, Misa Dobashi（Kuchibue Shoten）

Creative Direction : Toshinori Matsuura（Steve* inc.）

3000

1000

: Hirohide Ando（MILBON）

4 - 1421 - 22 - 100 - 01

: Jun Goto（Steve* inc.）: Jun Goto（ Steve* inc.）, Ayae Nakamura（ Steve* inc.）, Emiri
Hirotani（Steve* inc.）: Mitsunari Oyamada（Steve* inc.）, Masato Kato（Steve* inc.）: Takayuki Taneko, Kouhei Kurokawa: Ryohei Akita（MILBON）, Sakurako Kikuchi（MILBON）,

Chihiro lkeyama（GREAT WORKS）, Sayaka Nemoto（GREATWORKS）

In consideration of the global
environment, this report is printed
on paper certified by the Forest
S t e w a rd s h i p C o u n c i l ® ( F S C ® )using vegetable oil inks.

MILBON INTEGRATED REPORT 2022