Milbon Co., Ltd.

FY2022 Second Quarter (January 1, 2022 – June30, 2022)
Financial Results Presentation Materials

August 10, 2022
© 2022 Milbon Co., Ltd.

0

Table of Contents
P4

Consolidated Operating Results

P5

Consolidated Sales by Product Category

P15

Consolidated Statement of Earnings

P16

Consolidated Trends in Capital Expenditures and R&D Expenses

P17

Trends in Fieldpersons (FPs), Market Related Data

P18

Consolidated Net Sales in Japan and Overseas

P19

Consolidated Operating Income in Japan and Overseas

P20

Outlook of Overseas Subsidiaries

P22

Appendix

P23

Progress in FY2022 (63 rd Term)

NOTE: Figures by the brand are based on shipment value.
Milbon Co., Ltd. is hereinafter referred to as "the Group“.
Overseas subsidiary in each country is hereinafter referred to as "the Company“.

© 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

Milbon Group
Financial Results for
FY2022 (63 rd Term) Second Quarter

Masahiro Murai,

Managing Executive Director© 2022 Milbon Co., Ltd.

3

Consolidated Operating Results (FY2022 6 months)
 In Japan, sales increased due to recovery compared to the first quarter when the spreadof COVID-19 in rural areas affected the flow of people, the trend of multi-tonal haircoloring, and growing hair care needs in response to the popularity of hair coloring.
Overseas, the overall sales remained strong despite China being impacted by the COVID19-related restrictions.
 Gross profit increased due to the positive effect of the weaker yen on sales, and the effectof increased production. In addition, operating income increased significantly due to thecurtailment of activity costs with limited in-person operations under the COVID-19related restriction.
(Unit: million yen)

FY2021
6 months % total
Reference*

Increase/

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

Net sales

19,217 100.0

21,467 100.0

2,250

11.7

Gross profit

12,56665.4

14,269

66.5

1,702

13.6

SG&A expenses

9,248

48.1

10,444

48.7

1,196

12.9

Operating income

3,317

17.3

3,824

17.8

506

15.3

Ordinary income

3,355

17.5

4,137

19.3

782

23.3

Profit attributable toowners of parent

2,413

12.6

2,875

13.4

461

19.1

* 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.

4

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Net Sales (FY2022 6 months)
FY2021
6 months
Reference*1

11,087

FY20226 months(Unit: million yen)

Increase/
Decrease

12,218

Increase/
Decrease ratio (%)

1,130

10.2

•

Premium brands grew strong by 13.4% YoY. For Aujua, overall sales grewsteadily. However, the Climatic Care Series Exshield Line, launched in February,
struggled since it was hard to communicate the product characteristics of"pollution care." For Global Milbon, sales remained strong in Japan andoverseas. Premium Position Enhancing Vivacity, launched in March, wasevaluated for its full-fledged theory of scalp care and attracted strong interest
from salons as a high-value-added product.

•

Professional brands grew steadily by 6.7% YoY. This growth was due to thecontinued popularity of Elujuda and the overseas expansion of GRANDLINKAGE.

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

© 2022 Milbon Co., Ltd.

5

Consolidated Sales by Product Category [Hair Care Products (2)]New Products FY2022 6 months
Aujua Climatic Care Series Exshield LineA new line of Climatic Care Series that removes particle pollution*1
and prevents it from sticking to hair, leading to a lustrous look.
FY2022 target

307

FY20226 months(Unit: million yen)

Progress rate (%)

41

13.4

Debut on February 10, 2022

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

170

FY20226 months(Unit: million yen)

Progress rate (%)

89

52.5

Debut on March 10, 2022

Global Milbon Reawaken Series

An anti-aging care series that improves dullness and dryness
by targeting hair concerns caused by age-related changes.
FY2022 target

231

FY20226 months

25(Unit: million yen)

Progress rate (%)

10.8*1 Air pollution, such as PM2.5 and pollen, which is difficult to remove even with shampoo.
* Sales figures for each brand are based on shipment value.

© 2022 Milbon Co., Ltd.

6

Debut on June 11, 2022※※

A Premium Brand, Aujua
Sales grew steadily due to the growth of the existing lines, although theintroduction of new products was sluggish.
Number of Salons*1
FY2021*2

FY2022

5,200

5,626

(Unit: salons)

Increase/
Decrease

426

Consolidated Gross Sales (FY2022 6 months)

FY2021
6 months

FY20226 months

4,332

4,538

Increase/
Decrease ratio (%)

Increase/
Decrease

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

206

4.8

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

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

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

*2 In the previous document, the number of the touchpoints at the end of FY2021 was listed as 4,946, but this has been corrected due to an error in the counting method.
* Sales figures are based on shipment value.

© 2022 Milbon Co., Ltd.

7

A Premium Brand, Global Milbon
Premium Position Enhancing Vivacity, the new line of scalp care, started strong.
Number of Salons*1
FY2021

FY2022

14,575

17,209(Unit: salons)

Increase/
Decrease

Increase/
Decrease ratio (%)

2,634

18.1

Consolidated Gross Sales (FY2022 6 months) (Unit: million yen)

FY2021
6 months

FY20226 months

1,741

2,358

Increase/
Decrease

Increase/
Decrease ratio (%)

616

35.4

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, Canada*1 Calculated based on the past year's shipment results for both Japan and overseas.
* Sales figures are based on shipment value.

© 2022 Milbon Co., Ltd.

8

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 6 months)
FY2021
6 months
Reference*1

6,999

FY20226 months(Unit: million yen)

Increase/
Decrease

8,148

Increase/
Decrease ratio (%)

1,148

16.4

•

Multi-tonal hair coloring, using hair bleaching items, has become popularamong wider generations in Japan. Sales of fashion coloring products*2 were up
17.7% YoY. In particular, Ordeve Addicthy drove its growth. ENOG, launched in
June, has been highly evaluated for its concept that has not previously been
seen in our products.

•

As for overseas, sales were up 24.3% thanks to the robust sales in Korea,
where hair coloring products are the mainstay.

•

In the U.S., the number of touchpoints of SOPHISTONE hair color, developed
for Europe and North America, increased steadily, which is expected to lead tofuture sales.

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

© 2022 Milbon Co., Ltd.

9

Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2022 6 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)

FY2021
6 months

FY20226 months

2,880

3,453

Increase/
Decrease

Increase/
Decrease ratio (%)

573

19.9

Debut in FY2017

New Products
FY2022 6 months
ENOG

A hair color brand that allows you to create unique hair colors
with flexible color expressions as inspired by the concept of
paints (Enogu in Japanese).
FY2022 target

500

FY20226 months

267(Unit: million yen)

Progress rate (%)

53.5* Sales figures for each brand are based on shipment value.

© 2022 Milbon Co., Ltd.

10

Debut on June 11, 2022

A Premium Organic Brand, Villa Lodola (1)Sales grew steadily due to salon strategy activities in collaboration with distributors.
Number of Salons(Unit: salons)

FY2021

FY2022

11,317

11,878

Increase/
Decrease

Increase/
Decrease ratio (%)

561

5.0

Consolidated Gross Sales (FY2022 6 months) (Unit: million yen)

FY2021
6 months

FY20226 months

567

623

Increase/
Decrease

Increase/
Decrease ratio (%)

56

9.9

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.

* Sales figures are based on shipment value.

© 2022 Milbon Co., Ltd.

11

Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2022 6 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.
FY2021
6 months

FY20226 months

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

Increase/
Decrease

479

39

9.0

Debut in FY2015

New Products
FY2022 6 months
Villa Lodola Color PALETTE

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.
FY2022 target

150( Unit: million yen)

FY20226 months

Progress rate (%)

42

28.0

* Sales figures for each brand are based on shipment value.

© 2022 Milbon Co., Ltd.

12

Debut on February 10, 2022

Consolidated Sales by Product Category [Cosmetic Products (1)]Consolidated Net Sales (FY2022 6 months)
FY2021
6 months
Reference*1

FY20226 months

293(Unit: million yen)

Increase/
Decrease

262

Increase/
Decrease ratio (%)(31)(10.7)• Sales declined YoY due to limited referral activities such as touch-ups due to the pandemic
and weak growth of new products launched in March. We will review the price and contentsof the starter kit and plan new promotions at salons to create touch points and revitalize
existing salons.

New Products
FY2022 6 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.
FY2022 target

50

FY20226 months

23(Unit: million yen)

Progress rate (%)

47.2

Debut on March 10, 2022

*1 The figures for the previous year have been adjusted to deduct sales discounts from sales, which had been non-operating expenses.
* Sales figures for each brand are based on shipment value.

© 2022 Milbon Co., Ltd.

13•

A Premium Brand, iMPREA
Sales declined because the introduction of new products and season promotion
struggled.
Number of Salons*1
FY2021(Unit: salons)

FY2022

1,104

1,218

Increase/
Decrease

Increase/
Decrease ratio (%)

114

10.3

Consolidated Gross Sales (FY2022 6 months) (Unit: million yen)

FY2021
6 months
Reference*2

FY20226 months

293

262

Increase/
Decrease(31)

Increase/
Decrease ratio (%)(10.7)

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.
* Sales figures are based on shipment value.

© 2022 Milbon Co., Ltd.

14

Consolidated Statement of Earnings<Consolidated Statement of Earnings> (Unit: million yen)
FY2021
6 months
Reference*

Sales
Cost of sales
Gross profit

% to
sales

FY20226 months

% to
sales

19,217 100.0 21,467 100.0
6,650
12,566

34.6

7,198

65.4 14,269

33.5

9,248

48.1 10,444

48.7

Operatingincome

3,317

17.3

3,824

17.8

Ordinary
income

3,355

17.5

4,137

19.3

2,413

12.6

2,875

(Unit: million yen)

FY2021
6 months
Reference*

FY20226 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

11,087

12,218

56.9

1,130

10.2

6,999

8,148

38.0

1,148

16.4

Permanent wave
products

727

751

3.5

24

3.3

Cosmetic products

293

262

1.2

(31) (10.7)

Others

109

87

0.4

(22) (20.2)

Hair care products
Hair coloringproducts

66.5 <Major Factors for the Increase/Decrease>

SG&A
expensesProfitattributableto owners ofparent<Breakdown of Net Sales by Product Category>

13.4

•

Gross profit margin grew significantly due to theforeign exchange effects of a weaker yen and theeffect of increased production on the back ofstrong sales, despite the higher raw material cost.

•

Although SG&A expenses increased due topersonnel, R&D, logistics costs, etc., the operating
income margin increased as there were expenses
that were not used as much as expected due tothe COVID-19.

•

Foreign exchange gains due to the weaker yen
significantly boosted the ratio of ordinary income.

* 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.

15

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

FY2018FY2019FY2020

FY2021

FY2022Jan.-Jun.

FY2022
Plan

Capitalexpenditures

1,149

1,605

1,917

4,644

1,083

5,080

Depreciation andamortization

1,370

1,453

1,562

1,777

988

2,296

Amount

1,479

1,534

1,581

1,741

968

2,080*% to sales

4.2

4.2

4.4

4.2

4.5

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.

16

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 June 30, 2022)
9 FPs joined in October 2021 and are
currently assigned on-site.
27 FPs joined in April 2022, and are currently
in training.
(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.

17

Consolidated Net Sales in Japan and Overseas
FY2022 6 months(Unit: million yen)

FY2021
6 months Reference*1

FY20226 months

Increase/
Decrease

Increase/
Decrease
ratio

Changes in local
currency base*2

(%)

(%)

Net sales% to sales

Net sales% to sales

Consolidated net
sales

19,217100.0

21,467

100.0

2,250

11.7

10.0

JAPAN

15,41380.2

16,627

77.5

1,213

7.9

7.9

Overseas

3,803

19.8

4,839

22.5

1,036

27.2

18.5

USA

406

2.1

603

2.8

197

48.5

29.8

CHINA

1,091

5.7

1,058

4.9

(32)

(3.0)

(15.0)

KOREA

1,596

8.3

2,043

9.5

447

28.0

23.4

Other*3

709

3.7

1,133

5.3

424

59.8

52.9

[Reference] Exchange rate

(Unit: yen)

FY2021 6 months FY2022 6 months

USA（USD）
CHINA（CNY）
KOREA（KRW）

107.8216.75
0.0969123.3319.12
0.1005*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.

18

Consolidated Operating Income in Japan and Overseas
FY2022 6 months(Unit: million yen)

FY2021
6 months Reference*1
OperatingincomeOperatingincome ratio(%)

FY20226 months
OperatingincomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
operating income

3,317

17.3

3,824

17.8

506

15.3

JAPAN

2,745

17.8

3,201

19.3

455

16.6

Overseas

571

15.0

622

12.9

50

8.9

USA

(218)

(53.8)(125)(20.7)

93

-

CHINA

269

24.7

(76)

(7.2)

(345)

(128.2)

KOREA

531

33.3

693

34.0

162

30.5

Other*2

(10)

(1.5)

130

11.5

141

-

*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.

19

Outlook of Overseas Subsidiaries (1)USA (Milbon USA)•

Sales increased 29.7% YoY due to continued strong collaboration with distributors, including
actively visiting salons and developing hair coloring trainers.

•

Targeting salons that carry Global Milbon, which has a high product reputation, the Company
actively engaged in introduction activities for hair coloring products, which led to the
expansion of SOPHISTONE’s touchpoints.

•

For the rollout of the Global Milbon Premium Position to be launched in September, theCompany has implemented a branding strategy along the lines of upscale. First, theCompany intends to roll out the Premium Position only to luxurious salons that carry Global
Milbon.

CHINA (Milbon China)•

Sales declined 15.0% YoY due to the lockdown in Shanghai, which lasted about two months.
Even during the lockdown, the Company continued to make future-oriented proposals tosalons to build relationships, leading to a revival in June after the lockdown lifted. Although
the long-term stagnation of economic activity has affected consumer sentiment in somerespects, the Company will continue to strive to maintain good relationships with salons.

•

Although customers' interest in beauty has not declined even under the strict COVID-19
regulation lifestyle, there is a trend toward seeking salon care with shorter stay times. The
Company will implement menu proposals to salons that meet new needs.

* Figures in the text are based on local currency.

© 2022 Milbon Co., Ltd.

20

Outlook of Overseas Subsidiaries (2)KOREA (Milbon Korea)•••

As a result of the early holding of offline seminars in anticipation of the deregulation of
COVID-19 and proactive educational activities for salons, sales increased 23.4% YoY on
significant growth, especially in mainstay hair coloring products.

韓国•

Collaboration with elite sales at distributors nationwide continues to work well, and thenumber of touchpoints for Global Milbon has expanded significantly. Global Milbon has seen
steady growth in repeat business from salons. Before the launch of Global Milbon Premium
Position in July, a pre-launch event was held for top-level elite sales to raise market
expectations.

•

Stylists have promoted the use of Milbon hair coloring products as part of their self-branding,leading to increased awareness of "Milbon for hair color" among the general public.

•* Figures in the text are based on local currency.

© 2022 Milbon Co., Ltd.

21

<Appendix> Hair Care Brand Positioning Map
Premium

BrandsProfessional© 2022 Milbon Co., Ltd.

22

BrandsMilbon Group
Progress in FY2022 (63 rd Term)

Ryuji Sato,

Representative Director, President and CEO© 2021 MILBON Co., Ltd.

23

To p i c s i n t h e F i r s t H a l f ①⇒ The impact is not
significant at this time

①Hikes in raw material prices

・ Difference between public market and professional-use market
・Large ratio of cost to sales
price (raw materials/labor)・Easier to compete on price・Pricing by high-value-added product・Difficult to compete on price・ New products cycle in Japan
More than 55% of sales consist of new products launched within five years
New products are priced by considering customer value, market price, and costat the time of launch.

( *Overseas, price increases are implemented as needed due to long product cycles.)・ Not ruling out the option of the raising prices

We will consider raising prices in Japan if necessary, depending on future
conditions. (First, knowledge-based product sales, then professional products)*Knowledge-based product sales: Products sold alongside information founded in the knowledge andinsights of hairstylists, and valuable to customers.

The impact of the increase in sales, factory cost reduction activities, andforeign exchange effects have offset the impact of the current situation.
© 2022 Milbon Co., Ltd.

24

To p i c s i n t h e F i r s t H a l f ②⇒Showed strenuous efforts
under difficult circumstances②Zero-COVID policy in China

・ Shanghai lockdown for about 2 months⇒Sales declined by 15.0% in local currency terms.
(3.0% decrease in yen terms)

・ The impact of the Zero-COVID Policy is still uncertain.
There are changes in market and customer values and shift from highgrowth. Amid these changes, we will continue activities close to salonsand maintain good relationships with them.

③Weaker yen⇒The overall impact is not significant.

・ Effect of foreign exchange on sales amountOf the 2Q sales increase of 225 million yen (+11.7%), 330 million yen(+1.7%) was due to the impact of foreign exchange
Raw material purchase prices are soaring along with resource prices,
but the impact is negligible at this point.
© 2022 Milbon Co., Ltd.

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Domestic Market①:Hair Coloring Products
In Japan, hair coloring products sales grews i g n i f i c a n t l y i n t h e f i r s t h a l f ( + 1 3 . 3 % Yo Y )Trend

Products

Wearingmasks
diversifies
hair color
trendsThe popularityof hair bleachingamong a wide
range ofgenerations

・Hair bleaching design
・Blending gray hairwith highlights
・Bright and vivid haircolorsOrdeveAddicthyMore stylists
create SNSworthy haircolors and brandthemselves byutilizing them

New

ENOG

* Figures compared to the previous period are based on shipment value.
© 2022 Milbon Co., Ltd.

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Domestic Market②:Hair Care Products
Domestic sales of hair care products increased 6.5%
Yo Y d u e t o s t r o n g s a l e s o f p r e m i u m b r a n d s r e s p o n d i n g
to growing hair care needs
Sales amounts and composition of Premium Brands ・ Hair care needs against thebackground of the hair coloringin hair care products sales in Japan
popularity（Hair care for damage fromhair coloring, demand for long-lasting（billion yen）
hair color, and others.)
11.46
10.76
・ Increased awareness of knowledge9.60
9.37
based product sales within salons, which
9.16
was triggered by COVID-19. / milbon:iD
8.00

Hair care products

4.00

3.79

4.27

5.48

5.97

4.29

[51.0%][52.1%]

2021.2Q

2022.2Q[40.4%][44.5%][46.9%]

2018.2Q

2019.2Q

2020.2Q

Premium Brands

0* Sales figures and figures compared to the previous period are based on shipment value.
* Sales figure of the “Villa Lodola” within the sales of Premium Brands is for hair care products only.
* The “milbon:iD” is the EC for the customer of salons.

© 2022 Milbon Co., Ltd.

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Domestic Market③:Progress in Beauty Platform Plan
Preparations for the strategies outlined in the Mid-term
M a n a g e m e n t P l a n a r e s t e a d i l y u n d e r w a y. T h e " m i l b o n : i D "that supports them is expanding at a brisk pace.

Smart Salon Strategy

Lifetime Beauty Care Strategy[10-Year New Business Plan]
・ Skincare :Despite immediate struggles due to・ Preparations are underway with the candidates ofthe experiential model salons in various locations.
・ Smart salon will be exhibited at Expo 2025 Osaka,
Kansai⇒ We will communicate a new form andfunction of salons to customers and consumers.

COVID-19, preparations are underway
for the next phase of measures.

: Collaborative project with Kao in・ Beauty
Healthcare progress

milbon:iD

Number of registered
Number ofmembers
registered salons[FY2021]

approx. 3,200[FY2022 2Q] approx.

approx. 170,000

4,200 approx. 280,000* EC sales figures are based on shipment value.

© 2022 Milbon Co., Ltd.

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EC Sales*
510 million yen(full year)

430 million yen(half year)

Overseas Market
Building a global logistics system in parallel withbusiness expansion through new initiatives in eachregionThe Korean version of
the milbon:iD will belaunched in August
Established anoverseassubsidiary inGermany in April

Steady business expansion
in North America
Sales began in Canada in
April

Production of haircare products will
begin in August at
the China Factory~Two-Week Delivery Plan~①Maximize sales opportunities (prevent opportunity loss) ②Contribute to
distributor's working capital turnover ③Reduction of logistics costs

Building a global logistics system: EU (Netherlands) warehouse started operation in July /ASEAN (assuming Thailand) warehouse to be established in November© 2022 Milbon Co., Ltd.

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Progress in Sustainability Commitment
Actively promoting the sustainability
commitment
Hair color tube cap(ENOG) downsizing to
reduce plastic usage
・54% reduction from conventional
caps
・When all the colorants caps havebeen changed, an annual
reduction of 55 tons is expected.

Formulated andannounced
Milbon Group Human
Rights Policy© 2022 Milbon Co., Ltd.

Acquired RSPO
Supply Chain
Certification at
Yumegaoka Plant
RSPO certified palm oil adoption rate

FY2021
3.2%

FY2030 Target⇒

100%

CertifiedHealth and Productivity
Management Organization(by the Ministry of Economy, Trade andIndustry and the Nippon Kenko Kaigi)

for the second year in a row
30

Sustainable
CosmeticAward 2021
Jury's Award:“Villa Lodola COLOR Interval
Re:CareInternational Award in the corporate
category: Milbon Co., Ltd.

Appointed two new Outside
Board Directors, bringing
the total number to fiveThe ratio of Outside Board
Directors:45%
The ratio of female Board
Directors:14%

Full-year Operating Forecast
The full-year operating forecast remains unchanged due touncertainties such as soaring raw material prices and COVID-19.
(Revisions to the operating forecast will be considered in light of
future conditions.)
FY2021（Unit: million yen）

FY2021
Reference

Adjustments* % total sales

FY2022

FY2022

Target% total sales

Increase /Decrease

Increase /Decreaseratio (%)

FY2022 2Q

FY2022

Results

Achievement (%)

Net sales

40,849100.0

43,900

100.0

3,050

7.5

21,467

48.9

Domestic

32,93880.6

35,150

80.1

2,211

6.7

16,627

47.3

Overseas

7,910

19.4

8,750

19.9

839

10.6

4,839

55.3

Gross profit

26,76565.5

29,140

66.4

2,374

8.9

14,26949.0

SG&A expenses

19,681

48.2

21,590

49.2

1,908

9.7

10,444

48.4

Operating income

7,084

17.3

7,550

17.2

465

6.6

3,824

50.7

Ordinary income

7,158

17.5

7,410

16.9

251

3.5

4,137

55.8

Profit attributableto owners ofparent

5,109

12.5

5,230

11.9

120

2.4

2,875

55.0

Concerns forthe second halfof the year

・ Spread of COVID-19 (BA.5) infection in Japan, affecting the flowof the people (especially the older generation) in rural areas.
・ The future outlook of China's Zero-COVID Policy is still unclear.

* 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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Return to Shareholders
The interim dividend will be 40 yen per share, an
i n c r e a s e o f 1 0 y e n f r o m t h e p r e v i o u s y e a r.
Excluding the effect of the weaker yen, the dividend
payout ratio is close to the 50% target set in the Midterm Management Plan.
FY2020

FY2021（Unit: yen）

FY2022
Forecast(2022/2/10)

FY2022 2Q
ResultEnd of 2Q

27

30

34

40

End of FY

29

38

46

－

Total

56

68

80

－

43.3%

43.3%

49.7%

45.3%

Consolidated dividend
payout ratio

The dividend payout ratio is 49.7%
excluding the effect of weaker yen(foreign exchange gains)© 2022 Milbon Co., Ltd.

32

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.

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