Financial Results for Q1 of FY2024(Ending December 31,2024)
Milbon Co., Ltd.
(TSE code ： 4919)
May 14, 2024

© Milbon Co., Ltd. All right reserved.

Agenda1. Consolidated Financial Results

P2

2. Financial Results by Region and Outlook

P7

3. Appendix

P16

4. Outline of Milbon

P25This document has been translated from the Japanese original for reference
purposes only. In the event of any discrepancy between this translated
document and the Japanese original, the original shall prevail.
© Milbon Co., Ltd. All right reserved.

2

Today’s Message• Both sales and profits increased, exceeding the initial plan. Despite ongoing challenges with domestic hair coloring products
and the market environment in China, we have made a solid start towards achieving our full-year forecasts.
• The gross profit margin declined due to the impact of raw material price hikes, etc. However, this impact is temporary andexpected to ease gradually.
• Domestic sales and profit increased. Sales of haircare products, including Aujua, continues to be strong. Sales of haircoloring products increased slightly, but effects of sales and educational activities are expected to become apparent from
2Q onward.
• Overseas sales and profit increased. Although sales in all three major countries (South Korea, China, and the USA) exceeded
the plan. However, market conditions remain uncertain in China.
• FY2024 full-year forecasts remain unchanged.

© Milbon Co., Ltd. All right reserved.

3

Consolidated Statement of Earnings
Both sales and profits surpassed the plan.

(Unit: million yen)

FY2023
1Q YTD%
total

FY2024
1Q YTD

%
total

Gap
(%)

Gap

FY2024
1Q YTD plan

Vs. plan（％）

Net Sales

10,340100.0%

11,508100.0%

1,167

11.3%

11,013104.5%

Gross profit

6,750

65.3%

7,246

63.0%

496

7.3%

7,049

102.8%

SG&A expenses

5,555

53.7%

5,909

51.3%

353

6.4%

6,174

95.7%

Operatingincome

1,195

11.6%

1,337

11.6%

142

11.9%

875

152.8%

Ordinary
income

1,167

11.3%

1,390

12.1%

223

19.2%

840

165.6%

882

8.5%

973

8.5%

91

10.3%

629

154.8%

Profit attributableto owners ofparent© Milbon Co., Ltd. All right reserved.

4

Factors in YoY Changes in Consolidated Operating Income
The operating income increased. The higher-than-expected revenue growth haveoffset the decrease in gross profit margin due to higher raw material cost, etc., andhigher expenses.
Increase ingross profit
due tohigher sales

Decrease ingross profit
margin(266)+762(million yen)
Personnel
expenses(146)

Logistics
expenses

R&D
expenses

(54)
1,195

FY’23
1Q
© Milbon Co., Ltd. All right reserved.

(36)<Positive factors>
Decrease in write-downs +56
Forex and other factors +13<Negative factors>
Raw material costs (251)- of which, standard cost setting (184)
Product mix (72)Fixed manufacturing costs (17)

YoY +142
5

Rent
expensesMarketingexpenses

(30)

(27)

Other
expenses

1,337

(61)

FY’24
1Q

Factors in vs. Plan Changes in Consolidated Operating Income
Although a decrease in operating income was anticipated due to the soaring costs of
raw materials, the actual results exceeded expectations with a significant increase insales and cost containment, despite some expense deferrals.
(million yen)

Increase ingross profit
due tohigher sales

Decrease ingross profit
marginDeferral of
SG&A expenses

(120)

+145

Marketingexpenses+67

R&D
expenses

+58

Other
expenses

Logistics
expenses

+45

(50)

1,337

+317
875
<Negative factors>
Write-downs (54)Product mix (48)Raw material costs (18)FY’24 1Q
Plan
© Milbon Co., Ltd. All right reserved.

Vs. Plan +462
6

FY’24 1Q
ResultAgenda© Milbon Co., Ltd. All right reserved.

1. Consolidated Financial Results

P2

2. Financial Results by Region and Outlook

P7

3. Appendix

P16

4. Outline of Milbon

P25

7

Net Sales and Operating Income by Region
Both domestic and overseas income increased above planned.
The weak yen boosted overseas revenue growth rate.
(Unit: million yen)

Net sales
Operating IncomeJapanmargin (%)
Net sales
Operating Income
Overseasmargin (%)
Net sales
South Korea Operating Income
margin (%)
Net sales
Operating Income
Chinamargin (%)
Net sales
Operating IncomeUSAmargin (%)
Net sales*2
Operating Income
Othermargin (%)

FY2023
1Q YTD
7,659
881
11.5%
2,681
313
11.7%
1,100
298
27.1%
588
22
3.8%
340
(39)
(11.5%)
651
32
4.9%

FY2024
1Q YTD
8,371
920
11.0%
3,136
417
13.3%
1,266
369
29.2%
664
95
14.3%
414
(17)
(4.2%)
791(30)(3.8%)*1 Figures are the rates of change in real terms on a local currency basis© Milbon Co., Ltd. All right reserved.

Gap

Gap (%)
712
38
－
455
103
－
165
71
－
75
73
－
74
21
－
139
(62)
－

9.3%
4.3%
－
17.0%
33.1%
－
15.1%
23.9%
－
12.8%
328.0%
－
21.9%
－
－
21.4%
(193.9%)－Actual gap
FY2024*1
rate (%) 1Q YTD plan
9.3%
－
－
9.1%
－
－
6.5%
－
－
4.3%
－
－
8.5%
－
－
18.2%
－
－

Exchange
rate
FY23 1Q

Exchangerate
FY24 1Q

8,158
－
－
601
7.4%
2,854
－
－
273
9.6%
1,141 KRW
KRW
2720.104 yen
0.112 yen
23.9%
618 RMB
RMB
67
19.41 yen
21.00 yen
11.0%
408 USD
USD(34)
133.44 yen
149.88 yen(8.4%)
687－－(32)(4.8%)*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, Philippines, Singapore, Germany

8

Financial Results by Region: Japan
Haircare and cosmetics products are fueling growth. The impact oframped-up sales efforts for hair coloring products will likely become
apparent from 2Q onward.
YoY growth rate of sales by productcategory*
Haircare sales, led by “Aujua”, remainrobust. “IM” brand’s new products
significantly boosted cosmetics sales.

Quarterly net sales (mil. yen)

Despite the seasonal trend of lower sales in
1Q, sales exceeded the plan.

FY2024
Change in sales
1Q
1Q YTD
Haircare
+9.1%
+9.1%
Hair coloring
+0.8%
+0.8%
Cosmetics+197.6% +197.6%% to sales
1Q
1Q YTD
Haircare
61.2%
61.2%
Hair coloring
32.1%
32.1%
Cosmetics
4.1%
4.1%* Based on shipment value© Milbon Co., Ltd. All right reserved.

9

Quarterly operating income (mil. yen)
Although profits tend to be smaller in 1Q due toincreased expenses associated with organizing
events, profits increased due to higher-thanexpected sales and deferral of expenses.

Financial Results by Region: Japan
Key strategies

Progress up to 1Q

Results and outlook
As for “Villa Lodola,” our organic brand, we have strengthened the skills andknowledge of 350 Field Persons across Japan. A full-scale rollout to commence inApril.
Proposals linking hair color and eyebrow color lead to easier cosmetics initiatives
and contributed to higher customer spend at salons. Sales of the new eyebrow
product from the “IM“ brand have significantly exceeded our plan. However, theeffect of improving the market share of our hair coloring products was negligible.
We will enhance our hair coloring product sales and educational efforts at eachsalon by utilizing an assessment sheet to pinpoint issues related to hair coloring insalons.

•Recovery of hair coloringproducts sales throughpromotion of high-value haircolor

Promoting Smart Salon

milbon:iD

Smart Salon store
development© Milbon Co., Ltd. All right reserved.

Preparatory
phase

•

•

Wellprogressed
Preparatory
phase

Members
SalonsEC SalesNumber of
Smart Salons

FY’23
670,000
5,930
1,640 mil. yen

FY’24 1Q YTD
709,000
6,068
370 mil. yen

FY’24 Plan
870,000
6,500
1,950 mil. yen

FY’23

FY’24 1Q YTD

FY’24 Plan

23

29

100

We will initiate an aggressive expansion in April to increase the number ofsalons. Existing salons were highly evaluated for their effectiveness inincreasing salon sales.
10Financial Results by Region: South Korea
Sales have been robust, driven by strengthened haircare and perm sales
initiatives. Operating income surpassed the plan due to revenue growthand cost containment.
YoY growth rate of sales by productcategory*

Hair color sales slow with trend shifts, while
haircare and perm products sales achieve
double-digit growth from boosted activities.

Change in sales
HaircareHair coloringPerm% to sales
HaircareHair coloring
Perm* Based on local currency

Quarterly net sales (mil. yen)
Haircare and perm products are driving
growth, with sales consistently rising.

FY2024
1Q
1Q YTD+20.1%+20.1%+1.1%+1.1%+33.6%+33.6%
1Q
1Q YTD
23.3%
23.3%
71.1%
71.1%
5.0%
5.0%

© Milbon Co., Ltd. All right reserved.

11

Quarterly operating income (mil. yen)

Although profit was expected to decrease due tohigher expenses for increased staff, etc., the delay inhiring and higher-than-expected sales led to anincrease in profit.

Financial Results by Region: China
The high demand period for salons preceding the Lunar New Year significantly
boosted our sales and profits, surpassing the plan. However, the subsequent decreasein salon visits has introduced uncertainties into the market.

YoY growth rate of sales by productcategory*
The rollout of “Global Milbon” and otherprofessional haircare products in salons has
advanced. Conversely, a decrease in the frequencyof hair coloring among salon customers has led toreduced sales from hair coloring products.

Change in sales
HaircareHair coloring% to sales
HaircareHair coloring* Based on local currency

Quarterly net sales (mil. yen)

January witnessed a substantial increase insales preceding the Lunar New Year in
February, but visits to salons dropped
afterwards.

FY2024
1Q
1Q YTD+6.2%+6.2%(0.6%)(0.6%)
1Q
1Q YTD
55.8%
55.8%
37.5%
37.5%

© Milbon Co., Ltd. All right reserved.

12

Quarterly operating income (mil. yen)
Increase in revenue exceeding the plan, and cost
containment increased profit.

Financial Results by Region: USA
Stable growth in mainstay haircare and double-digit sales growth in hair coloringproducts due to strengthened activities. We are directing investments to enhance haircoloring promotions and spur further growth.

YoY growth rate of sales by productcategory*

Continued strong sales of haircare products,
with Global Milbon at the forefront. Total sales
percentage of hair coloring products increased,
supported by strengthened sales andeducation activities for distributors and salons.

Change in sales
HaircareHair coloring% to sales
HaircareHair coloring* Based on local currency

Quarterly net sales (mil. yen)

Sales softened in the 4Q of last year due toa decrease in shipments amid distributortransitions, yet they are showing signs ofrecovery.

FY2024
1Q
1Q YTD+6.0%+6.0%+25.9%+25.9%
1Q
1Q YTD
83.7%
83.7%
10.6%
10.6%

© Milbon Co., Ltd. All right reserved.

13

Quarterly operating income (mil. yen)
Despite making headway in reducing the deficit by
cutting distribution costs, losses are anticipated topersist this year due to expenses incurred frombolstering sales and education for hair coloringproducts.

Outlook for after 2Q
Outlook for after 2Q
Japan

•
•

Steady demand is anticipated for haircare products.
While the demand for hair bleaching design is plateauing, the effects of sales and education activities forhair coloring products strengthened during 1Q, are expected to become apparent from 2Q onward.

•

Sales and profits in China exceeded expectations, yet post-Lunar New Year salon visits dwindled, casting
uncertainty in the market.
Continued strong performance centered on haircare in South Korea, USA, and other countries.

Sales
Over
seas

•
•

Income••Raw material cost impacts are largely in line with forecasts due to purchasing cost reductions, and negative
impacts are expected to continue until around the first half of this fiscal year.
Growth rate of haircare exceeds that of hair coloring by more than expected, and product mix has negative
impact on gross profit margin.
Negative impact on gross profit margin due to the setting of standard costs is expected to be graduallyeliminated.

© Milbon Co., Ltd. All right reserved.

14

Outlook: Full-year Forecasts
While domestic hair coloring products sales and the market conditions in China
remain focal points, we currently project an increase in both sales and profits,consistent with our initial fiscal year plan.

(Unit: million yen)

FY2023%
total

FY2024
Plan

%
total

Gap
(%)

Gap

Net Sales

47,762100.0%

50,620100.0%

2,857

6.0%

Gross profit

29,52561.8%

32,400

64.0%

2,874

9.7%

SG&A expenses

24,00050.2%

25,800

51.0%

1,799

7.5%

Operating income

5,525

11.6%

6,600

13.0%

1,074

19.5%

Ordinary income

5,586

11.7%

6,560

13.0%

973

17.4%

Profit attributable toowners of parent

4,001

8.4%

4,650

9.2%

648

16.2%

© Milbon Co., Ltd. All right reserved.

15

Agenda1. Consolidated Financial Results

P2

2. Financial Results by Region and Outlook

P7

3. Appendix

P16

Consolidated Net Sales and Sales Ratio by Product Category

P17

Status of Main Brands

P18

Sales Growth and Sales Ratio by Category in Japan and Overseas(Local Currency Basis)

P21

Status of Capital Expenditures, etc.

P23

The number of Field Persons (FP)P24

4. Outline of Milbon© Milbon Co., Ltd. All right reserved.

16

P25

(Appendix) Consolidated Net Sales and Sales Ratio by Product Category(Unit: million yen)

Net sales
HaircareHair coloring
Perm
Cosmetics
Others% to sales
HaircareHair coloring
Perm
Cosmetics
Others1Q
10,340
5,969
3,922
301
126

2Q
12,362
7,370
4,315
413
140

FY2023
3Q
11,446
6,593
4,193
369
154

20

123

136

137

418

73

73

57.7%
38.0%
2.9%
1.2%
0.2%

59.6%
34.9%
3.4%
1.1%
1.0%

57.6%
36.6%
3.2%
1.4%
1.2%

61.9%
33.2%
2.8%
1.1%
1.0%

59.4%
35.5%
3.0%
1.2%
0.9%

58.0%
35.1%
3.1%
3.2%
0.6%

58.0%
35.1%
3.1%
3.2%
0.6%

© Milbon Co., Ltd. All right reserved.

4Q
13,612
8,421
4,522
380
149

YTD
47,76228,355
16,953
1,463
571

1Q
11,508
6,670
4,044
350
369

17

2Q

FY2024
3Q

4Q

YTD
11,508
6,670
4,044
350
369

(Appendix) Status of Haircare Products by Main Brands
Haircare - Aujua

Haircare – Global Milbon

Robust sales centered on new scalp care product “Presedia”.
Continued expansion of touchpoints in Japan and South Korea.

(Unit: mil. yen)

FY2023
1Q
1Q YTD

Gross sales
Japan
South KR
(Unit: salons)

2,121
2,056
64

FY2024
1Q
1Q YTD

2,121
2,056
64

FY2023

Number ofSalonsJapan
South KRNew Products

Sales growth for the brand is being propelled by strong performancein overseas markets, especially in the USA.

2,312
2,222
90

(Unit: mil. yen)

Gross sales
Japan
USA
China
South KR
Other

2,312
2,222
90

FY2024
6,844

7,072

6,556
288

6,765
307

(Unit: salons)

Number ofSalons

Japan
USA
China
South KR
Other

Aujua Scalp Care Series Presedia (Debut on February 10)(Unit: mil. yen)

FY2024
1Q YTD145

FY2024
Target700

FY2023
1Q
1Q YTD
1,312
704
283
94
45
184

1,312
704
283
94
45
184

FY2023

FY2024
1Q
1Q YTD
1,545
725
355
141
67
255

1,545
725
355
141
67
255

FY2024
13,381

23,557

10,188
0
430
1,022
1,741

10,423
9,822
477
1,087
1,748

*Data for the number of salons in USA for the period from October to December
became inaccessible due to the changeover of distributors, therefore, the figures ofGross sales
FY2023 displayed exclude USA.
* Sales figures are based on shipment value. The number of the salons is calculated based on the past year's shipments for both Japan and overseas.

© Milbon Co., Ltd. All right reserved.

18

(Appendix) Status of Hair Coloring Products by Main Brands
Hair coloring – Ordeve Addicthy

Hair coloring – Villa Lodola Color

In Japan, we’re leveraging eyebrow mascara products to rejuvenate
sales. While South Korea’s significant sales are impacted by hair color
trends, overall international sales continue to grew steadily.
(Unit: mil. yen)

Gross sales
Japan
Overseas

FY2023
1Q
1Q YTD
1,555
1,265
290

1,555
1,265
290

Launch in Hong Kong is set for April. Concurrently, Field Persons inJapan will intensify sales and edcutational efforts starting the samemonth.

FY2024
1Q
1Q YTD
1,490
1,192
297

(Unit: mil. yen)

Gross sales
Japan
Overseas

1,490
1,192
297

(Unit: salons)

Number ofSalonsHair coloring – Sophistone

Continued revenue growth due to strengthened sales and education
activities for distributors and salons in the US.

(Unit: mil. yen)

Gross sales

FY2023
1Q
1Q YTD
31

31

Japan
Overseas

FY2024
1Q
1Q YTD43

43* Sales figures are based on shipment value.

© Milbon Co., Ltd. All right reserved.

19

FY2023
1Q
1Q YTD
252
252
0

252
252
0

FY2023

FY2024
1Q
1Q YTD
256
253
3

256
253
3

FY2024
9,702

9,631

9,702
0

9,631
0

(Appendix) Status of Cosmetics by Main Brands
Cosmetics – IM

Cosmetics – Imprea

New color mascara products, promoted in conjunction with hair color,performed well and exceeded annual plan.

Sales decreased due to increased focus on cosmetics-related
activities within “IM” brand.
(Unit: mil. yen)

Gross sales(Unit: salons)

FY2023
1Q
1Q YTD131

FY2024
1Q
1Q YTD131

FY2023

Number ofSalons120(Unit: mil. yen)

FY2023
1Q
1Q YTD

Gross sales

120

0

FY2024
1Q
1Q YTD
0

271

271

FY2024
1,970

2,013

New Products

New Products

Imprea Cleansing Oil (Debut on February 10)

IM Brow & Lush Color Mascara (Debut on February 10)(Unit: mil. yen)

Gross sales

FY2024
1Q YTD18

FY2024
Target(Unit: mil. yen)

Gross sales

55

FY2024
1Q YTD223* Sales figures are based on shipment value. The number of the salons is calculated based on the past year's shipments for both Japan and overseas.

© Milbon Co., Ltd. All right reserved.

20

FY2024
Target150

(Appendix) Sales Growth and Sales Ratio by Category in Japan and Overseas (Local Currency Basis)
Japan
Net sales
HaircareHair coloring
Perm
Cosmetics
Others% to sales
HaircareHair coloring
Perm
Cosmetics
OthersSouth Korea
Net sales
HaircareHair coloringPerm% to sales
HaircareHair coloring
Perm
Others

1Q
+6.0%
+9.5%
+1.9%
(6.5%)(4.2%)(13.2%)

2Q
+0.7%
+2.9%
(3.5%)(17.1%)+18.4%+133.3%

FY2023
3Q
+3.0%
+4.0%
(1.6%)+7.6%+25.5%+150.8%

61.2%
34.7%
2.3%
1.5%
0.3%

63.0%
31.8%
3.0%
1.3%
1.0%

61.0%
33.5%
2.8%
1.6%
1.1%

1Q
+10.9%+14.4%+9.2%+28.0%

2Q+4.8%+13.5%+1.4%+28.1%FY2023
3Q
+1.2%
+1.1%
(0.0%)+18.2%

4Q+13.7%+29.0%+7.5%+59.1%

YTD+7.4%+13.9%+4.3%+32.4%

1Q+6.5%+20.1%+1.1%+33.6%

20.7%
74.9%
4.0%
0.4%

21.7%
73.9%
3.8%
0.6%

21.4%
73.6%
4.2%
0.8%

23.3%
71.6%
4.6%
0.5%

21.8%
73.5%
4.1%
0.6%

23.3%
71.1%
5.0%
0.6%

4Q
+3.1%
+4.6%
+0.3%
(7.0%)(12.7%)+102.1%

YTD
+3.1%
+4.9%
(0.8%)(7.0%)+4.8%+104.8%

1Q
+9.3%
+9.1%
+0.8%
+2.9%
+197.6%+60.8%

65.5%
30.3%
2.0%
1.3%
0.9%

62.9%
32.4%
2.5%
1.4%
0.8%

61.2%
32.1%
2.2%
4.1%
0.4%

* The figures for Japan are based on shipment value. The overseas figure are based on local currency.

© Milbon Co., Ltd. All right reserved.

21

2Q

FY2024
3Q

4Q

YTD
+9.3%
+9.1%
+0.8%
+2.9%
+197.6%+60.8%
61.2%
32.1%
2.2%
4.1%
0.4%

2Q

FY2024
3Q

4Q

YTD
+6.5%
+20.1%+1.1%+33.6%
23.3%
71.1%
5.0%
0.6%

(Appendix) Sales Growth and Sales Ratio by Category in Japan and Overseas (Local Currency Basis)

China
Net sales
HaircareHair coloringPerm% to sales
HaircareHair coloring
Perm
Others

USA
Net sales
HaircareHair coloringPerm% to sales
HaircareHair coloring
Perm
Others

1Q(2.7%)+11.0%(14.0%)(23.5%)

2Q+22.4%+35.7%+8.4%+25.8%FY20233Q(6.1%)(7.3%)(5.2%)
+0.4%

54.8%
39.3%
5.9%
0.0%

53.5%
41.7%
4.8%
0.0%

53.9%
40.0%
6.1%
0.0%

1Q
+13.5%+15.5%+10.6%(1.5%)

2Q+19.3%+18.1%+27.0%+26.4%FY20233Q+56.0%+64.9%+59.8%+25.7%

4Q(15.9%)(15.2%)(4.5%)(31.8%)

YTD+13.9%+15.7%+18.8%
+1.0%

1Q
+8.5%
+6.0%
+25.9%(19.6%)

85.7%
9.1%
4.2%
1.0%

83.8%
9.7%
4.8%
1.7%

87.3%
7.8%
3.3%
1.6%

85.6%
9.6%
3.6%
1.2%

85.6%
9.0%
4.0%
1.4%

83.7%
10.6%
3.1%
2.6%

© Milbon Co., Ltd. All right reserved.

4Q
+5.8%
+15.9%(8.5%)(0.7%)

YTD+3.8%+12.0%(5.1%)(3.8%)

1Q
+4.3%
+6.2%
(0.6%)+19.0%

61.9%
31.7%
6.4%
0.0%

55.8%
38.4%
5.8%
0.0%

55.8%
37.5%
6.7%
0.0%

22

2Q

FY2024
3Q

4Q

YTD
+4.3%
+6.2%
(0.6%)+19.0%
55.8%
37.5%
6.7%
0.0%

2Q

FY2024
3Q

4Q

YTD
+8.5%
+6.0%
+25.9%(19.6%)
83.7%
10.6%
3.1%
2.6%

(Appendix) Status of Capital Expenditures, etc.

FY2020(Unit: million yen)

FY2021

FY2022

FY2023

FY2024
1Q YTD

FY2024
Plan

Capital expenditures

1,917

4,644

4,097

3,151

535

4,258

Depreciation andamortization

1,562

1,777

2,026

2,213

552

2,404

Amount

1,581

1,741

2,074

2,334

548

2,649

% to sales

4.4

4.2

4.6

4.9

4.8

5.2

R&D exp.

FY2024 CAPEX Main Items
Sales offices, studios

Production system

Digital•Establishment and maintenanceof business locations(Expansion of Seoul Office)HR Development Center•

Technical Center

Others•Yumegaoka Factory(Machinery and equipment)
Thailand Factory (Machinery
23
and equipment)••© Milbon Co., Ltd. All right reserved.

•

milbon:iD•

Education:iD•

Smart Salon (DigitalMarketing)Internal infrastructure
Production equipment••

(Appendix) The number of Field Persons (FP)The number of FPs increased moderately in each country.
The number of FPs by country

FP recruitment and training status in Japan

Upper column: Average number of FPs during the period (persons)Lower column: Net sales per FP (million yen)

Japan
South Korea

China
USA
Other*FY2021
328.2

FY2022335.4

FY2023350.2

FY2024
364.0

102

105

104

ー

26.0

32.8

33.4

32.5

130

126

141

ー

29.8

31.6

34.3

34.5

72

66

65

ー

13.2

13.0

13.2

14.0

68

102

123

ー

36.0

36.2

38.2

39.5

41

63

70

ー

*Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, Philippines, Singapore, Germany© Milbon Co., Ltd. All right reserved.

24

9 FPs

joined in October 2023 and are currently
conducting OJT

45 FPsjoined in April 2024 and are in training(The above 54 FPs are not included in the left chart.)

Agenda© Milbon Co., Ltd. All right reserved.

1. Consolidated Financial Results

P2

2. Financial Results by Region and Outlook

P7

3. Appendix

P16

4. Outline of Milbon

P25

25

(Appendix) Outline Of Milbon
Milbon is a cosmetics manufacturer that produces and sells haircare
products including treatments and hair coloring products exclusively tohair salons.
Cosmetics market
Professional haircosmetics market
Domestic market size:
Approx. 200 billion yen*Domestic market
share
Approx. 18%*Source: Fuji Keizai(2022) haircare products only
© Milbon Co., Ltd. All right reserved.

26

(Appendix) Outline Of Milbon: Business Model
We have established solid trust with hair salons by offering our products andservices that contribute to enhance their sales and profits.
The distribution flow of
products and services

Our sales personnel, Field Person, identifies
salon tasks, provides educational support, andoffers products and beauty techniques.

Distributors

Hair salons

Product development that incorporates thetechniques of top-class hairstylists, who are
overwhelmingly supported by their customers.
*We sale product directly to hair salons in some overseas area.
© Milbon Co., Ltd. All right reserved.

27

Customers(Appendix) Outline Of Milbon: Three Key Points of Our Business Model
Consistent focus on hair salons and hair stylists
Since our founding in 1960, we have sustained continuous growth by steadfastly
narrowing our business focus to hair salons, with the strategy of increasing sales andprofits of hair salons at the forefront of all its initiatives.

Field Person (FP) System – Sales and educational support to hair salonsThis is our unique sales and education system that contributes to greater sales and profit for hair salons. Our Field
Person (FP), who acquire beauty techniques through an intensive 9-month training program after joining thecompany, identifies areas for improvement for each hair salon. FPs support these salons by providing not justproducts, but also additional value through associated beauty techniques.

TAC Product Development System –Standardization of top-class hair stylist’s techniqueThis system seeks out hair stylists with exceptional skills and knowledge, encourages the sharing of their expertiseand techniques, and enables our researchers to scientifically decode this knowledge for product development. We
aim to commercialize sophisticated beauty techniques in a way that can be broadly replicated across general hairsalons.

© Milbon Co., Ltd. All right reserved.

28

(Appendix) Outline Of Milbon: Our Growth Trajectory
Steady growth through business expansion in Japan and overseas
Net Sales and Operating Income(billion yen)

Launched “Smart Salons”
Launched “milbon:iD”, our official online stores(billion yen)

Composition of Sales byCountry (FY2023)

Launched “Imprea”, salon-exclusive cosmetics brandEstablished South Korea subsidiarycompany

Launched “Global Milbon”,
a haircare brandLaunched “Aujua”,
a haircare brandEstablished China
subsidiary company

47.7

EstablishedUS subsidiarycompany

billion yen* FY2017 is an irregular accounting period due to a change in the fiscal year-end date.
* The “Accounting Standard for Revenue Recognition,” etc., has been adopted since FY2019.

© Milbon Co., Ltd. All right reserved.

29

(Appendix) Outline Of Milbon: Our Main Products
Haircare and hair coloring products are the mainstay of our sales. In
recent years, we have expanded our business to include cosmetics, etc.

Composition of Sales by Product Category
Cosmetics (only available in Japan)
Haircare(FY2023)
Products sold for retail in hair salons

Products sold for retail in hair salonsand items used for in-salon treatments

Main Brand
ImpreaMain Brand

IM

Hair coloring

Items used for in-salon hair coloring

Aujua (Only available in Japan and South Korea)

47.7

Global Milbon

billion yen

Main Brand
Ordeve Series

ElujudaVilla Lodola Color

Sophistone(Hair color brand exclusive forEurope and North America)© Milbon Co., Ltd. All right reserved.

30

(Appendix) Outline Of Milbon: Domestic Hair Salon Market Conditions
Hair salons have the potential for further growth despite the mediumto long term decrease in the number of customers due to declining
birth rate and aging population.
Community characteristics unique to salons

Challenges and growth of aging population with low fertility

Although the number of customers at hairsalons is expected to decrease over the
medium to long term, the promotion ofpremium-priced services and retail products is
expected to drive further improvements insalon productivity and customer spend.
Numberof staff

A visit to a hair salon is necessary to receive its
services. Additionally, hair salons hold a place as
an indispensable part of people’s lives.

Anticipated to decrease
Numberover the mid to long termofdue to declining birthrate customers＝
Staff
productivity

Hair salon
sales
Room forfurther growth＝

The need for inperson service
Average rate of use
in the past year

The need for repeated,periodic visits

Women

Women

80.3%
Men

Spend percustomer

33.9%

Average number ofvisits per year

4.32times
Men

5.25times

The need for an
extended stay
Average timespent per visit
Women

84min
Men

52min

Source: Beauty Industry Census, First Half of FY2023 (Hair Salons), Recruit Co., Ltd.

© Milbon Co., Ltd. All right reserved.

31

(Appendix) Outline Of Milbon: Our Recent Initiatives in Japan, milbon:iD

We launched milbon:iD, an EC platform, in 2020 to support productivity
enhancement of hair salons. This platform allows salon customers topurchase retail products online.
How milbon:iD works – Revenue is attributed to salons in the BtoBtoC sales channel
Sales
Payment

Payment
Distributors

ChargeChargeRegisteredsalons=Ordermilbon:iD

Registeredmembers

Product Shipment
Progress of milbon:iD (as of the end of FY2023)

Number of registered salons

5,930© Milbon Co., Ltd. All right reserved.

Number of registered members

670,000

32

EC sales (Gross sales)

1,640 million yen

(Appendix) Outline Of Milbon: Our Recent Initiatives in Japan, Two Major Strategies
We aim to maximize the inherent value of hair salons, which enables frequent andextended in-person visits, by enhancing our Smart Salon concept and broadening therange of products available for in-salon purchase.
Smart Salon Strategy－
Enhancing the salon customer experience

Lifetime Beauty Care Strategy－
broadening the range of products

The Smart Salon system is implemented in hair salons thathave embraced the concept. It aims to enhance salon
productivity by eliminating the challenges customers facewhen purchasing retail products.

We collaborate with other companies to extend salon
services and product sales beyond haircare to include
skincare and beauty health care.

Styling station toprovide face-to-faceconsultation

Cosmetics (Collaborated with KOSÉ)Tester station toraise productawareness and offer
trial opportunities

Beauty Supplements

Generating synergies through the
integration of three sales areas
EC service milbon:iD to enhance
convenience of products purchase

Beauty Equipment (Collaborated with Panasonic)

See our corporate website for more details.:
https://www.milbon.com/en/ir/management/business.html© Milbon Co., Ltd. All right reserved.

33

(Appendix) Outline Of Milbon: Status of Overseas Expansion
We conduct business across 14 countries and regions, and have recently
expanded our international bases for R&D as well as production.

Milbon Europe
GmbH
Istanbul Main Branch

MilbonTrading(Shanghai)
Co.,Ltd.

MILBON VIETNAM
CO., LTD.
MILBON(THAILAND)
CO., LTD.
MILBON MALAYSIA
SDN. BHD.

Milbon Korea
Co., Ltd.
Milbon Co., Ltd.
Taiwan Representative OfficeHong Kong Representative Office
Philippines Representative Office
Indonesia Representative Office

R&D: Japan, Thailand, China, US
Production: Japan, Thailand, China

MILBON SINGAPORE
PTE. LTD.

© Milbon Co., Ltd. All right reserved.

MILBON USA, INC.

34

(Appendix) Outline Of Milbon: Our Global R&D and Production
We aim to minimize geopolitical risks and to align ourselves with thediverse values of beauty unique to each locality, by establishing R&D
and production systems in each region.
R&D－
Collaboration among our four global R&D bases.

Production－
Collaboration among our three global factories
We respond flexibly to regulatory and trade risks andensure stable supply both domestically andinternationally through collaboration among factories
in each country.

Through collaboration with R&D bases in each country,
we aim to develop global products that captures
beauty needs shared worldwide, as well as localized
products tailored to each country and region's uniqueclimate, beauty customs, and laws and regulations.

Japan: Yumegaoka Factory
Products for Japan andoverseas

Japan
Central Research InstituteUS
R&D

Thailand
R&D

China
R&D

Since 2021

Since 2022

Since 2022

© Milbon Co., Ltd. All right reserved.

35

Thailand Factory
Products for overseas

China Factory
Products for Greater China

(Appendix) Outline Of Milbon: Our Three Major Overseas Countries
Three major countries, South Korea, China, and the US account fornearly 80% of overseas sales
South Korea

China

US

Our educational initiatives focused on haircoloring are highly regarded, contributing
to a strong market presence in South Korea.
In recent years, we have been strengthening
our haircare business, working to transform
ourselves into a comprehensive
manufacturer.

Subsequent to COVID-19, activities for hairsalons have gained traction amid market
changes, such as decreased frequency of
customer visits to salons, leading to asustained increase in our sales. The local
factory commenced operations in 2022.

We have enjoyed rapid growth triggered bylaunch of the Global Milbon haircare line andshift in sales structure (from direct sales to
distributor ship). With the launch of hair coloringproducts exclusive for the European and North
American markets, further growth is anticipated.

(million yen)

Sales in South Korea© Milbon Co., Ltd. All right reserved.

4.7

billion yen(million yen)

Sales in China

36

2.2

billion yen(million yen)

Sales in the US

1.6

billion yen

(Appendix) Outline Of Milbon: Other Countries and Regions
Our sales are particularly significant in East Asia and ASEAN, and wehave recently expanded into Europe.
East Asia (Taiwan and HongKong) 36.6%

Europe and Middle East
8.4%

FY2023
Sales in othercountries and regions

2.68

billion yen

ASEAN 55.0%© Milbon Co., Ltd. All right reserved.

37

(Appendix) Outline Of Milbon: Shareholder Returns
We have set a dividend payout ratio target of 50% from FY2022, aiming
for steady and continuous shareholder returns.
(Yen)© Milbon Co., Ltd. All right reserved.

FY2024 Plan
88 yen38

(Appendix) Outline Of Milbon: ESG Investment Index and External Assessments
ESG investment index to be selected

FTSE Blossom Japan Index Series: https://www.lseg.com/en/ftse-russell/indices/blossom-japan

THE INCLUSION OF Milbon Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF Milbon Co., Ltd. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

External assessments

MILBON CO LTD (YUMEGAOKA SITE)© Milbon Co., Ltd. All right reserved.

39

Disclaimer
With respect to the business forecasts included in this document, any statementthat is not historical fact is a forward-looking statement based on information
available and certain premises that are judged to be rational at the time of theannouncement. Please be aware that actual results may differ from any forwardlooking statements due to risks, uncertainties, and a number of other factors.

© Milbon Co., Ltd. All right reserved.