Milbon Co., Ltd.

FY2022 First Quarter (January 1, 2022 –March 31, 2022)
Financial Results Presentation Materials

May 13, 2022
© 2022 Milbon Co., Ltd.

0

Table of Contents
P3

Consolidated Operating Results

P4

Consolidated Sales by Product Category

P14

Consolidated Statement of Earnings

P15

Consolidated Trends in Capital Expenditures and R&D Expenses

P16

Trends in Fieldpersons (FPs), Market Related Data

P17

Consolidated Net Sales in Japan and Overseas

P18

Consolidated Operating Income in Japan and Overseas

P19

Outlook of Overseas Subsidiaries

P21

Appendix

NOTE :Figures by brand are based on consolidated gross sales figures.

© 2022 Milbon Co., Ltd.

1NOTE :Addition of Sales Deduction Items
Previously, sales discounts for cash payment were treated as
financial expenses (non-operating expenses) from the viewpointof materiality. However, in light of recent interest rate conditions,such expenses will be treated in the same manner as rebates,
and from Fiscal Year 2022, they will be deducted from sales.
Figures of the previous fiscal year indicated as "Reference*" in thefollowing briefing materials, shown for the comparison with thecurrent fiscal year, are the amount after deducting the sales
discount from sales in FY2021, and are different from the actual
financial results.

© 2022 Milbon Co., Ltd.

2

Consolidated Operating Results (FY2022 3 months)
 In Japan, the pre-emergency measures to prevent the spread of the disease, which had
been declared during the 1st Quarter FY2022, affected the flow of people, especially inrural areas. Overseas, the overall sales grew despite China being impacted by the
lockdown.
 Operating income increased only slightly because of the increase in SG&A expenses in
response to soaring logistics costs, etc., despite gross profit growth due to overseas sales
growth, weak yen, cost improvement, etc.

(Unit: million yen)

FY20213 months % total
Reference*

Increase/

FY2022
Increase/
Decrease% total
3 months
Decrease ratio (%)

Net sales

8,831 100.0

9,635 100.0

803

9.1

Gross profit

5,792

65.6

6,451

67.0

658

11.4

SG&A expenses

4,316

48.9

4,954

51.4

638

14.8

Operating income

1,476

16.7

1,496

15.5

20

1.4

Ordinary income

1,502

17.0

1,633

17.0

131

8.7

Profit attributable toowners of parent

1,091

12.4

1,166

12.1

75

6.9

* The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

3

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Net Sales (FY2022 3 months)
FY20213 months
Reference*

4,886

FY20223 months(Unit: million yen)

Increase/
Decrease

5,333

Increase/
Decrease ratio (%)

446

9.1

• Premium brands grew steadily by 14.2 % YoY. For Aujua, the Climatic Care
Series Exshield Line, a new genre of products focused on "pollution care", waslaunched in February. Unlike hair repair products, it was difficult to increase theretail sales for at-home care and the launch was a weak start since it aims at
the invisible "pollution care". For Global Milbon, sales and the number oftouchpoints grew steadily in Japan and overseas, and the Enhancing Vivacity,
the scalp care line of Premium Position launched in March, started strong.
• The number of stores registered for the milbon:iD grew steadily to 3,700 with
210,000 registered members• Professional brands were up 6.5%. This growth was due in part to the continued
strong sales at Elujuda and overseas expansion of GRANDLINKAGE.
* Sales growth by brand is based on consolidated gross sales.
* The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

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

FY2022 3 months
Aujua Climatic Care Series Exshield LineA new line of Climatic Care Series that removes
particle pollution* and prevents it from sticking to hair,leading to a lustrious look.
(Unit: million yen)

FY2022 target

307

FY20223 months

Progress rate (%)

24

8.0

February 10, 2022 Debut

Global Milbon Premium Position Enhancing Vivacity
A new scalp care line of Premium Position that nurturesstrong and beautiful hair by approaching hair loss
factors.
(Unit: million yen)
FY2022 target

170

FY20223 months

23

Progress rate (%)

14.0* Air pollution, such as PM2.5 and pollen, which is difficult to remove even with shampoo.

© 2022 Milbon Co., Ltd.

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March 10, 2022 Debut

A Premium Brand, Aujua
Sales remained steady due to growth in existing lines, although new products
struggled to get off to a good start.
Number of Salons
FY2021*(Unit: salons)

FY2022*

4,946

5,394

Increase/
Decrease

448

Consolidated Gross Sales (FY2022 3 months)

FY20213 months

FY20223 months

1,749

1,839

Increase/
Decrease ratio (%)

Increase/
Decrease

9.1(Unit: million yen)
Increase/
Decrease ratio (%)

89

5.1

Brand Concept

Product Range

A premium hair care brand born inconsideration of Japan’s social climate,culture, and characteristics of the hairof the Japanese people.

Aujua supports diverse perspectives on
beauty, now and into the future, byaddressing each individuals' hair and skinconcerns and offering the mostappropriate item for that time.

What is Aujua?
A wide range of product lineups offering
personalized treatment for eachindividual’s needs and hair type.

・5 series / 16 lines / 99 items
Eternal stage series
Aging care series
Hair care series(Number of salons)
6,000
5,000
4,000
3,000
2,000
1,000
0
Sales

Scalp care series

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

Climatic care series* Calculated based on the past year's shipment results for both Japan and overseas.

© 2022 Milbon Co., Ltd.

Trends in sales & number of salons(Million yen)
12,00011,00010,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

6

A Premium Brand, Global Milbon
An increase in the number of touchpoints and sales due to the continued strong
sales of Premium Position, launched last year.
Number of Salons(Unit: salons)

FY2021*

FY2022*

14,57516,092

Increase/
Decrease

Increase/
Decrease ratio (%)

1,517

10.4

Consolidated Gross Sales (FY2022 3 months) (Unit: million yen)

FY20213 months

FY20223 months

781

1,058

Increase/
Decrease

Increase/
Decrease ratio (%)

276

35.3

Brand Concept

What is “Global Milbon”?

A system hair care brand thatcultivates the “unique beauty” ofeach individual, achieving “360
Degree Beautiful Hair.”Based on the hair research technology wehave cultivated since our founding, weanalyzed diverse hair characteristics from
20 countries. Our analysis broke down thefactors for common hair damage
phenomena derived from our research,leading to the establishment of a new haircare system. This line contains ingredientsthat penetrates the shaft with its highaffinity to repair hair’s inner porosity andto improve hair’s overall integrity, from theinside out.

Countries with Salons
The brand is available in the following
countries and regions:Japan, USA, Hong Kong, China, Thailand,
Taiwan, Turkey, Malaysia, Vietnam,
Indonesia, the Philippines, Singapore,
Germany, Korea* Calculated based on the past year's shipment results for both Japan and overseas.

© 2022 Milbon Co., Ltd.

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Trends in sales & number of salons(Million yen)
6,000

(Number of salons)
20,00018,0005,000

16,00014,0004,000

12,0003,000

10,000
8,000

2,000

6,000
4,000

1,000

2,000

0

0
2016

2017

2018

Sales

2019

2020

2021

Number of salons

2022
Targets＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

Consolidated Sales by Product Category [Hair Coloring Products (1)]Consolidated Net Sales (FY2022 3 months)
FY20213 months
Reference*

3,433

FY20213 months(Unit: million yen)

Increase/
Decrease

3,800

Increase/
Decrease ratio (%)

366

10.7

•

Sales of Ordeve and Ordeve Addicthy were up 6.4% YoY. In Japan, design color,using hair bleaching items, has become popular among older generations inJapan. On the other hand, dark hair and more bright and vivid hair color are
beginning to spread as a trend.

•

As for overseas, sales were up 28.7% thanks to robust sales in Korea, where
hair coloring products are the mainstay, and in the U.S., where the company isbuilding a foundation for Sophistone hair color for Europe and the U.S.

* Sales growth by brand is based on consolidated gross sales.
* The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

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Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2022 3 months
Ordeve Addicthy
Erases red-tinged brown with high saturation blue.
With clear and transparent color expression, it lets
customers freely realize individual hair color designs.
(Unit: million yen)
FY20213 months

1,388© 2022 Milbon Co., Ltd.

FY20223 months

1,611

Increase/
Decrease

Increase/
Decrease ratio (%)

222

16.0

9

FY2017 Debut

A Premium Organic Brand, Villa Lodola (1)Launched Villa Lodola Color PALETTE, which achieves bright and vibrant tone.
Number of Salons(Unit: salons)

FY2021

FY2022

11,317

11,567

Increase/
Decrease

Increase/
Decrease ratio (%)

250

2.2

Consolidated Gross Sales (FY2022 3 months) (Unit: million yen)

FY20213 months

FY20223 months

271

289

Increase/
Decrease

Increase/
Decrease ratio (%)

18

6.7

Brand Concept
Organic brand that proposes lifestyles that fulfill the beauty of people andthe environment

What is Villa Lodola?
Based on the philosophy of "Beauty, the Organic Way“, the brand is fullycommitted to the natural environment not only in its products, but also in
its manufacturing process, packaging, and promotional tools.
All products are certified by ICEA, an Italian organic certification
organization. Organic hair care born in Italy, where nature's blessings bring
beauty to hair and skin.

Trends in sales & number of salons(Million yen)
1,400

(Number of salons)
14,0001,200

12,0001,000

10,000

800

8,000

600

6,000

400

4,000

200

2,000

0

0

Sales

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

© 2022 Milbon Co., Ltd.

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A Premium Organic Brand, Villa Lodola (2)Core Product
FY2022 3 months
Villa Lodola ColorWith 92% naturally derived ingredients, the product’s formulation utilizes the powerof plants. It enables consumers to experience the comfort of an organic productacross all aspects of hair care, from application, to finish, and continued use.
Consolidated Net Sales (FY2022 3 months)
FY20213 months

FY20223 months(Unit: million yen)

Increase/
Decrease

Increase/
Decrease ratio (%)

216
229
12
New Products
FY2022 3 months
Villa Lodola Color PALETTE

6.0

FY2015 Debut

From beautiful texture and shine to vibrant tone, the new shades of Villa Lodola
Color deliver values that are unique to 92% naturally derived ingredients.
(Unit: million yen)

FY2022 target

150© 2022 Milbon Co., Ltd.

FY20223 months

19

Progress rate (%)

12.8

11

February 10, 2022 Debut

Consolidated Sales by Product Category [Cosmetic Products (1)]Consolidated Net Sales (FY2022 3 months)
FY20213 months
Reference*

FY20223 months

147(Unit: million yen)

Increase/
Decrease

137

Increase/
Decrease ratio (%)

(10)

(7.0)

• Introduction of the new product "Tone Up CC Cushion Foundation," launched in March, did
not proceed as expected due to restrictions on referral activities caused by the re-spread of
COVID-19 and difficulties in communicating product characteristics.

New Products
FY2022 3 months
iMPREA Tone UP CC Cushion Foundation
A cushion foundation infused with serum formula creates a veil that
controls the reflection of light to give the skin a translucent appearance.
(Unit: million yen)

FY2022 target

50

FY20223 months

Progress rate (%)

16

33.2

March 10, 2022 Debut* The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

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A Premium Brand, iMPREA
Sales declined as a result of the introduction of new products not proceeding as
expected.
Number of Salons
FY2021*1(Unit: salons)

FY2022*1

1,104

1,159

Increase/
Decrease

Increase/
Decrease ratio (%)

55

5.0

Consolidated Gross Sales (FY2022 3 months) (Unit: million yen)

FY20213 months
Reference*2

FY20223 months

147

137

Increase/
Decrease

Increase/
Decrease ratio (%)

(10)

(7.0)

Brand Concept

What is iMPREA?

The brand concept of iMPREA is “Revolutionize Your Aurawith your Professional Stylist”. We will provide new beauty
value by leveraging Professional Stylists’ ability to provide
solutions, by utilizing their strengths.

iMPREA is a salon exclusive brand created through joint research by KOSÉ,
which specializes in skin research, and Milbon, which specializes in hair research.
We will improve the complexion by establishing a good balance of moisture in
the "corner-layer keratin" on the surface of the skin, which holds the key tocomplexion.

“Revolutionize Your Aura with your Professional Stylist”
This is a communication method that takes advantage of the unique strengths of hair salons, in which the hair stylist crafts your aura byapproaching a total impression of both the hair and face.
We deliver an aura change that is unique to you.
*1 Calculated based on the past year's shipment results.
*2 The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

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Consolidated Statement of Earnings<Consolidated Statement of Earnings> (Unit: million yen)
FY20213 months
Reference*

Sales
Cost of sales

% to
sales

8,831 100.0
3,039

34.4

FY20223 months

% to
sales

9,635 100.0
3,183

33.0

<Breakdown of Net Sales by Product Category>(Unit: million yen)

FY20213 months
Reference*

FY20223 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

Hair care products

4,886

5,333

55.4

446

9.1

Hair coloringproducts

3,433

3,800

39.4

366

10.7

Permanent wave
products

312

314

3.3

1

0.6

Cosmetic products

147

137

1.4

(10)

(7.0)

50

49

0.5

(1)

(3.6)

OthersGross profit

5,792

65.6

6,451

67.0 <Major Factors for the Increase/Decrease>•

Gross profit margin grew due to a decrease indisposal and write-downs, which were high in theprevious fiscal year, the cost-saving from
Yumegaoka Factory production improvement
activities, and the impact of foreign exchange
rates.

SG&A
expenses

4,316

48.9

4,954

51.4

Operatingincome

1,476

16.7

1,496

15.5

Ordinary
income

1,502

17.0

1,633

17.0

•

Profitattributableto owners ofparentOperating income margin declined due to anincrease in SG&A expenses from labor costs andlogistics costs.

1,091

12.4

1,166

12.1

•

Foreign exchange gains due to yen depreciation
were recorded in non-operating income, boosting
ordinary income margin.

* The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.

© 2022 Milbon Co., Ltd.

14

Consolidated Trends in Capital Expenditures and R&D Expenses(Unit: million yen)

FY2018FY2019FY2020

FY2021

FY2022Jan.-Mar.

FY2022
Plan

Capitalexpenditures

1,149

1,605

1,917

4,644

592

5,080

Depreciation andamortization

1,370

1,453

1,562

1,777

492

2,296

Amount

1,479

1,534

1,581

1,741

455

2,080*% to sales

4.2

4.2

4.4

4.2

4.7

4.7*

Category

R&D exp.

FY2022 CAPEX Main Items (Plan)
Sales Offices,
Studios・Establishment and maintenance ofbusiness locations(Relocation of Kobe Sales Office, etc.)

Production system

・Yumegaoka Plant(Machinery andequipment circulation equipment
investment, implementation)

Digital・Education: iD・milbon: iD
・DX in field activities

・Thai Plant machinery and equipment
Training

・Training Center (Land)・Digital Arena

・Smart Salon（Digital marketing, etc.）
Others・Internal infrastructure, researchequipment, etc.

* In the financial results presentation released on February 10, 2022, the R&D expense target for 2022 was set at 1,874 million
yen (4.3% of sales). However, the Group has revised the allocation of overseas R&D expenses, which had been recorded as otheritems, to R&D expenses.

© 2022 Milbon Co., Ltd.

15

Trends in Fieldpersons (FPs), Market Related Data
Fieldpersons Trends (by Country) (Number of FPs / As of January 1, the beginning of the fiscal year)
2018

2019

2020

2021

2022

269

279

297

328

333

111

108

100

102

-

USA

13

13

17

17

12

MILBON USA, INC.

48

50

27

53

-

CHINA

22

21

30

30

30

Milbon Trading(Shanghai) Co., Ltd.

62

70

50

71

-

KOREA

25

30

32

32

29

Milbon Korea Co., Ltd.

82

77

79

106

-

33

35

38

38

38

37

39

34

39

-

JAPAN

Others *1

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
(As of March 31, 2022)
9 FPs joined in October 2021, and are
currently in OJT on site
27 FPs are scheduled to join in April 2022
(The above 36 FPs are not included in the left
chart.)

Market Related Data (Japan)
FY2016
Number of businessestablishments(households)

172,304

Number of workers

443,241

Number of beauty
customers(thousand people)

37,023

Remarks
Bureau economy census of ministry
statistics of public management
Statistics Bureau, Ministry of Internal
Affairs and Communications:
Population statistics as of October 1st ofeach year Population statistics forfemales aged 15 to 64* Data in the Ministry of Health, Labour and Welfare's
Ministry of Health, Labour and Welfare administrative
report, which had been used for the number of salonsand beauticians in the "Market Trends,“until FY2020 Q1
was judged to differ greatly from the actual situation.
Accordingly, the number of business establishments andnumber of workers are shown in the data from the
Economy Census of the Statistics Bureau of the Ministryof Internal Affairs and Communications. The number ofworkers includes workers other than those with abeautician license.

*1 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2022 Milbon Co., Ltd.

16

Consolidated Net Sales in Japan and Overseas
FY2022 3 months(Unit: million yen)

FY20213 months Reference*1

FY20223 months

Increase/
Decrease

Increase/
Decrease
ratio

Changes in
Local currency
base*2(%)(%)

Net Sales% to sales

Net Sales% to sales

Consolidated Net
Sales

8,831

100.0

9,635

100.0

803

9.1

9.0

JAPAN

7,030

79.6

7,249

75.2

218

3.1

3.1

Overseas

1,800

20.4

2,385

24.8

584

32.5

25.6

USA

171

1.9

261

2.7

89

52.1

38.7

CHINA

552

6.3

578

6.0

26

4.7

(7.1)

KOREA

721

8.2

931

9.7

210

29.2

26.4

Other*3

355

4.0

614

6.4

258

72.8

68.3

[Reference] Exchange rate
FY2021 3 months FY2022 3 months

USA（USD）
CHINA（CNY）
KOREA（KRW）

106.09 yen
16.45 yen
0.0955 yen

116.34 yen
18.53 yen
0.0975 yen*1 The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.
*2 Figures are the rates of change in real terms on a local currency basis.
*3 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2022 Milbon Co., Ltd.

17

Consolidated Operating Income in Japan and Overseas
FY2022 3 months(Unit: million yen)

FY20213 months Reference*1
Operating
IncomeOperatingincome ratio(%)

FY20223 months
Operating
IncomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
Operating Income

1,476

16.7

1,496

15.5

20

1.4

JAPAN

1,159

16.5

1,146

15.8

(13)

(1.2)

Overseas

316

17.6

350

14.7

33

10.7

USA

(41)

(24.0)(65)(25.1)

(24)

-

CHINA

126

22.9

9

1.7

(116)

(92.4)

KOREA

224

31.7

310

33.3

86

38.4

Other*2

7

2.0

96

15.7

88

1240.9*1 The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.
*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2022 Milbon Co., Ltd.

18

Outlook of Overseas Subsidiaries (1)USA (Milbon USA)•The sales style of actively visiting salons to solve on-site problems was strongly supported
by distributors, leading to a 38.7% increase in sales.

•

In the hair care section, Global Milbon continued to perform well. In the hair coloring
section, the number of touchpoints of SOPHISTONE was expanded steadily through the
expansion of the sales network due to an increase in sales personnel at distributors andbuilding the educational system developing hair coloring trainers who conduct courses atstudios around the country. As a result, sales more than doubled from the previous year.

•

In April, the Company will begin rolling out the product in Canada. In the future, theCompany will expand into the North American market as well as the USA.

* Figures in the text are based on local currency.

© 2022 Milbon Co., Ltd.

19

Outlook of Overseas Subsidiaries (2)CHINA (Milbon China)•

Sales declined 7.1 % YoY due to the tightening of regulations imposed as a result of thepandemic since February of this year and especially the strong impact of the lockdown inShanghai.

•

The Company is providing the following two types of support to salons: 1) holding aseminar on the condition of salons after COVID-19 deregulation for salon owners, and 2)
educational activities on the development of color and salon treatment menus andcustomer proposals that are likely to lead to customer retention.

KOREA (Milbon Korea)•

The Company developed new touchpoints in collaboration with elite sales at distributors
nationwide, leading to a 26.6 % YoY increase in sales.

•

Hair coloring products, which account for nearly 80% of sales, continued to perform well.
In addition to the mainstay Ordeve Addicthy, the new product Ordeve Lucent Line,launched in February, was making a smooth start.

•

As a new way of educational activities, the Company organized the YouTube online
educational event for young stylists born in the 1990s. This has been leading to thecreation of a fan base for Milbon Korea.

* Figures in the text are based on local currency.

© 2022 Milbon Co., Ltd.

20

<Appendix> Hair Care Brand Positioning Map
Premium

BrandsProfessional© 2022 Milbon Co., Ltd.

21

BrandsWith respect to the business forecasts included in this document, any
statement that 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 the announcement. Please be aware that actual results may
differ from any forward-looking statements due to risks, uncertainties, and anumber of other factors.
© 2022 Milbon Co., Ltd.

22