Milbon Co., Ltd.
FY2015 Third Quarter(December 21, 2014 – September 20, 2015)

Financial Results Presentation Materials

September 30, 2015
Copyright © 2015 Milbon. All rights reserved.

Table of Contents
P2

Consolidated Operating Results

P3-7

Consolidated Sales by Product Category

P8Aujua

P10

Consolidated Balance Sheet (Chart)

P11

Consolidated Statement of Earnings

P12

Consolidated Trends in Capital Expenditures and R&D Expenses

P13

Trends in Market Related Data, Trends in Fieldpersons

P14-15 Outlook of Milbon Group1
Copyright © 2015 Milbon. All rights reserved.

Consolidated Operating Results (FY 2015 9 months)
Growth in hair coloring category in addition to stable in hair‐care andoverseas market led to overall sales increase(Unit: million yen)Amount
FY20149 months

FY20159 months

Increase/Decrease

Year-on-year
Comparison(%)

Net sales

18,437

19,978

1,541

108.4

Gross profit

12,716

13,943

1,226

109.6

SG&A expenses

9,501

10,156655

106.9

Operating income

3,215

3,787

571

117.8

Ordinary income

3,042

3,594

551

118.1

Net income

1,845

2,331485

126.3
2

Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Hair Care Product](1)Aging care and leave‐in items containing CMADK have been steadily growing(FY2015 9 months)(Unit: million yen)

FY2014 9 months

FY2015 9 months

10,436

Increase/Decrease

11,618YOY Comparison (%)

1,181

111.3

• Activities were focused on enhancing hair designers’ ability to respond to matured women who seek true
professional advice, as well as to younger women in their mid‐20s, who are becoming more conscious of how others
see them.
• Products containing CMADK, Milbon’s original hair keratin restoring ingredients, and aging care products have been
continuously sold well.
* Products containing CMADK includes: DEESSE’S Elujuda Emulsion, Aujua Immurise Line series, Jemile Fran, etc.

New Products

PLARMIAREFINING SERIESDEESSE’S
DAYCHARM UV MIST

A new salon menu for simultaneously caring
for both hair and scalp that has changed withage.
(Unit: million yen)

A UV treatment mist that wraps the hair in apleasant fragrance and protects hair color
from sunlight.
(Unit: million yen)

FY targetResultsProg. rate

50015030.1％

Jan 29 Debut

FY targetResults

Prog. rate

1809854.9％

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

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

Jemile Fran Shampoo & Treatment
A new hair care brand for working women in their 20. Enlightening young women
to hair care, timed to changes in their sense of beauty. Lock moisture into the hair,
improve cuticle and make hair tangle-free and bouncy.
(Unit: million yen)

FY target

Results

Prog. rate

400373

93.3%

Apr 21 Debut

4Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Hair Coloring Product](1)New color line approach and brand new gray color launch led to a rise in sales(FY2015 9 months)(Unit: million yen)

FY2014 9 months

FY2015 9 months

6,654

Increase/Decrease

7,129

YOY Comparison (%)

475

107.1

• New color lines to much Spring/Summer 2015 and Autumn/Fall 2015 trends were launched. New lines that candisplay natural cool colors are well received, and activities to support hair designers to offer trend hair color tosalon customer have proactively continued.
• Brand new hair color range Ordeve Crystal was launched in May. This new product made it possible to dye hair
peppered with gray evenly for a clear color from the roots to the tips, and earned a good reputation.

New Products

ORDEVE CRYSTALORDEVE additional color
INNOCENT LINEA hybrid color for matured women whowant to continue enjoying the color,
tone and texture with beautiful finish
from the roots to the tips.

A soft sheen created by achromaticcolor express a color purity(Unit: million yen)

(Unit: million yen)

FY targetResults

Prog. rate

500509101.9%Jan 29 Debut

FY targetResults

Prog. rate

74062584.6%

May 28 Debut
5Copyright © 2015 Milbon. All rights reserved.

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

ORDEVE additional color
HEALTHY LINE
Display the unadorned beauty of hairthrough smooth, cool beige hues
(Unit: million yen)

FY target

Results

Prog. rate

22012858.2%

Sep 1 Debut

6Copyright © 2015 Milbon. All rights reserved.

Consolidated Sales by Product Category[Permanent Wave Product]
Sales in overseas are in good shape, yet overall sales have been downward trend(FY2015 9 months)FY2014 9 months

1,167(Unit: million yen)

FY2015 First Half

1,076

Increase/Decrease- 90

YOY Comparison (%)

92.2

7Copyright © 2015 Milbon. All rights reserved.

Aujua ［Results and Targets］
Aging care series continued to grow, expanding number of salons and sales
Number of Aujua salons
FY２０１4 year-end

FY２０１5 Q3-end

2,002 salons

2,399 salons

Sales (FY2015 9 months)
FY２０１49 months

FY２０１59 months

2,430

2,998

Comparison
with the 2014year end

119.8％(Unit: million yen)

YOYcomparison

123.4%

Brand concept

Product range

A hair care brand that nurtures
the beauty of Japanese women’s
hair born from the climate, culture
and hair characteristics of Japan

What is Aujua?
A hair care series that responds
to every individual’s hair concerns
by creating and evolving a haircare program just for one
individual. That is Aujua.

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

・14 line ・90 items

What’s new
Aging care series
OATHENAM LINE

Aging care series
IMMURISE Jell Stemrizer

Enhances the strength and damage
resistance of hair that has become brittlewith aging from coloring and perming

A beauty jelly primer rich in CMADK thatbrings greater strength and beauty to thehair(Unit: million yen)

(Unit: million yen)

FY target

400

Results

127

FY target

Prog. rate

31.8

Jan 30 Debut

100

Results

34

Prog. rate

34.4

Apr 1 Debut
8Copyright © 2015 Milbon. All rights reserved.

This page is intentionally left blank.
9Consolidated Balance Sheet(Unit: million yen)

AssetsLiabilities and Net Assets
29,612

29,612
28,13828,138Cash & deposit
Notes & A/R
Securities
Inventories

7,386
3,427
3,076

PP&E
Intangible
Inv. & others

797

10,530448
2,851

December 20, 2014

Cash & deposit
Notes & A/R
Securities
Inventories

14,629PP&E
Intangible
Inv. & others

4,034
Current
Noncurrent

3,869
165

-41

3,783
209

4,537
3,051
2,999
3,835

11,068378
3,182

September 20, 2015

Net Assets

Noncurrent Assets

13,831

675

Liabilities

Current Asset

14,983

14,307

3,993
Current
Noncurrent

24,104

1,515

25,619

Capital stock
2,000
R/E
21,655Comp. income
784

Capital stock
2,000
R/E22,821
Comp. income 1,138

December 20, 2014

September 20, 2015
10Copyright © 2015 Milbon. All rights reserved.

Consolidated Statement of Earnings(FY 2015 9 months)(Unit: million yen)Amount
FY20149 months

FY20159 months

Increase/
Decrease

YOYcomparison
(%)

Sales

18,437

19,978

1,541

108.4

Cost of sales

5,720

6,035

314

105.5

Gross profit

12,716

13,943

1,226

Others154(-24)

19,978Fluctuation Factor(+1,541)＜Increase in SG&A expenses＞• Salaries due to increase the numberof personnel• Sales promotional tools• Rental for newly opened Ginza Branch

Perms
1,076(-90)
13,943

Colors7,129(+475)-6,035

Hair cares
11,618(＋1,181)3,787

Net sales

9,501

10,156655

106.9

Operatingincome

3,215

3,787

571

117.8

Ordinary
incomeNet income

3,042
1,845

3,594
2,331

551
485

118.1
126.3

2,331
-1,251

109.6

SG&A
expenses

3,594-10,156
Cost ofsales

Grossprofit

SG&A
OperatingincomeOrdinary
incomeIncometaxes

NetincomeBreakdown of net sales by product category
FY20159 months

Hair care products

10,436

11,618

58.1

1,181

111.3

Hair coloring product

6,654

7,12935.7475

107.1

Permanent wave
products

1,167

1,076

5.4

- 90

92.2

179

154

0.8

- 24

86.1

OthersRatio(%)

YOYchange

YOYcomparison (%)FY20149 months

11
Copyright © 2015 Milbon. All rights reserved.

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

FY2010FY2012FY2013

FY2014FY2015Jan.-Sep.

Plan for
FY2015

528

840

1,680

1,028

1,215

2,652

1,011

947

878

1,004

760

1,062

Amount

870

873

969

1,168

890

1,211

R&D exp tosales ratio

4.2%

4.0%

4.1%

4.6%

4.5%

4.5%Category
Capital expenditures
Depreciation andamortization

R&D exp.

• R&D expense to sales ratios are calculated based on consolidated figures, starting this quarter end, also retrospectively adjusted.

FY2015 9 months CAPEX Main Items• Purchase of land adjacent to Yumegaoka Plant• Initial expenditure for Tokyo Ginza Branch• Relocation of Sapporo Sales Office• Warehouse expansion of Thai Factory

12Copyright © 2015 Milbon. All rights reserved.

Trends in Market Related Data, Trends in FPs
Market trends (Japan)
Number of salons(Unit: Number of Salons: Salons / Number of hair dresser: people / Number of beauty customer)

2010

2011

2012

2013

2014

223,286

228,429

231,134

234 089

2015—

Number ofhairdressers

456,872

471,161479,509487 636—

Beauty customer
population

39,812

39,64039,076

38,46837,8472013

2014

Remarks——

37,555(As of Apr.1)

Ministry of Health, Labor and Welfare Public Health Administration Report
Number of beauty salon facilities/number of employees (year-end)

Statistics Bureau, Ministry of Internal Affairs and Communications:
population statistics as of October 1st each yearPopulation statistics for females aged 15 to 64

Fieldpersons trends (by country)
2011

2012

2015 Q3

203

221230238240

Milbon Co., Ltd.

95929595ー

USA910121210

MILBON USA, Inc.

39353640ー

CHINA

1115161717

Milbon Trading (Shanghai) Co.,
Ltd.

11121725ー

KOREA

1113181720

Milbon Korea Co., Ltd.

30343964ー--

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

Others438111495

1355550ーUpper row：
Number of FPs (unit: persons)Lower column：
Sales per FP (unit: million yen)

*29 FPs are under training(as of Sep. 20, 2015)(not included in the left chart)

13
Copyright © 2015 Milbon. All rights reserved.

Outlook of Milbon Group (FY2015 9 months)
Sales in all areas centering on East Asia including Japan are steadily growing
Number ofemployees

Sales (million yen)

Number of FPs

JAPAN
Milbon Co., Ltd.

USA

240

CHINA

23

Milbon Korea Co., Ltd.

THAI
Milbon(Thailand)Co., Ltd.

Forex rates

FY20149 months

FY20159 months

16,562

17,455

105.4

1960--363

472

129.9

2004

1$=101.73

118.29

295

460

155.7

2009

1 yuan =16.5819.32

778

1,046

134.4

2009

1 won =
0.09627

0.1083

3366200.7

2013

1 baht =
3.15

3.60

403

477

118.4

---

14
10KOREAStart
operations

FY2014FY2015580

MILBON USA, Inc.

Milbon Trading(Shanghai) Co., Ltd.

YOYcomparison

1731
2047
614Others *1

14*1: Taiwan, Hong-Kong, Vietnam, Malaysia, Turkey, Indonesia, Philippine and others
Copyright © 2015 Milbon. All rights reserved.

14

Outlook of Milbon Group (FY2015 9 months)*JAPAN (Milbon Co., Ltd.)In the increasingly competitive environment for the hair coloring products category, the new hair coloring products launched in the first half of the term, Ordeve Crystal andVilla Lodola Color, are highly thought of in the market. Additional colors for the existing hair color range Ordeve also had good sales results and the decreasing sales of the haircoloring products category have started to increase. In addition to the products that meet the needs of older generations, Milbon Japan launched a new hair care brand Jemile
Fran shampoo & treatment for the younger generation in their 20s who have just started their careers. The market appreciates this supporting activity that provides thisgeneration at the timing of changing their awareness of beauty with professional hair design and hair care values that may lead to lifetime customers.

USA (Milbon USA, Inc.)
Sales activities through a distributor have expanded to seven states on the East Coast and are firmly taking hold. The number of partner salons is steadily increasing. With
respect to Plarmia Hair Serum launched in February, Milbon USA touted Milbon’s exclusive technology that replenishes the broken protein in damaged hair. The product wasaccepted in the US market, where many customers care about damage caused by hair color, and had great sales results. More customers than the company had expected
replaced the existing products with Plarmia Hair Serum, and therefore there wasn’t a big increase in sales. However, the overall sales results for Milbon USA were good.

CHINA (Milbon Trading (Shanghai) Co., Ltd.)
Milbon Shanghai holds seminars for distributors. The distributors’ proactive training activities for salons strengthen their relationship with strong salons in the region. In thenew areas Sichuan (Chengdu City) and Chongqing, the number of customers is steadily increasing and expected to increase further in the next term. For salons, Milbon
Shanghai holds manager seminars focusing on the promotion of repeat customers and educational seminars with an external lecturer who is successful in Japan or China. It
contributes to improving customer satisfaction. In addition, a hair care technician qualification system has been introduced. Improving stylists’ counseling skills and productknowledge contributes to an increase in the sales of hair care products and in-salon treatments.

KOREA (Milbon Korea Co., Ltd.)In April, Milbon Korea implemented a campaign celebrating the first anniversary of Plarmia. In May, Plarmia Hair Serum series, hair care products for aging hair, waslaunched. It enabled Plarmia to provide both scalp treatment and hair treatment and improved the comprehensive strength of the Plarmia brand. The total sales of Plarmia asof June were good, resulting in a 35% increase in sales compared with the same period of the previous year. Due to the breakout of MERS from the beginning to the end ofJune, the number of customers coming to salons decreased significantly. Although salons remained opened, some had virtually no business and the overall economy in South
Korea slowed down. In such a difficult situation, Milbon Korea continued its activities focusing on hair color training. As a result, the sales of hair coloring products increased by
26% compared with the same period of the previous year.

THAILAND (Milbon (Thailand) Co., Ltd.)[Sales division] Consumption decreased in May after Songkran (Thai New Year), but hair color sales, which were the main products and accounted for a high percentage ofsales, continued to be robust, resulting in a 38% increase. In addition, the Plarmia brand, for which new items have been launched periodically since last year, has started togain popularity in the market.
[Production division] Overall shipments were delayed due to issues related to an import permit in the country of destination. The permit was obtained for all products shipped to
Taiwan, and Milbon Thailand will start shipping from the 4th quarter. For increases in production volume going forward, Milbon Thailand replaced the preparation tank to raise
production capacity.

*The values in the text above are based on local currencies.
Copyright © 2015 Milbon. All rights reserved.

15

Statements concerning the future such as the earnings forecasts given in this document
are based on information currently in the possession of the Company and on
assumptions that the Company considers reasonable.

Copyright © 2015 Milbon. All rights reserved.