Milbon Co., Ltd.

FY2021 Third Quarter (January 1, 2021 – September 30, 2021)
Financial Results Presentation Materials

November 12, 2021
© 2021 MILBON Co., Ltd.

0

Table of Contents
P2

Consolidated Operating Results

P3

Consolidated Sales by Product Category

P14

Consolidated Statement of Earnings

P15

Consolidated Trends in Capital Expenditures and R&D Expenses

P16

Trends in Market Related Data, Trends in FPs

P17

Consolidated Net Sales in Japan and Overseas

P18

Consolidated Operating Income in Japan and Overseas

P19

Outlook of Overseas Subsidiaries

P21

Toward the Future

P22

Appendix

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

© 2021 MILBON Co., Ltd.

1

Consolidated Operating Results (FY2021 9 months)
 Domestic sales continued to grow despite the impact of restraint on going out due
to the emergency declaration in August to September. Overseas, 3 major countries
performed well.
 Operating profit rose sharply due to the effects of higher sales and lower activity
costs such as events.
(Unit: million yen)

Increase/

FY2020% total
9 months

FY2021
Increase/
Decrease% total
9 months
Decrease ratio (%)

Net sales

25,214100.0

29,718

100.0

4,504

17.9

Gross profit

16,66566.1

19,771

66.5

3,105

18.6

SG&A expenses

12,35849.0

14,012

47.2

1,653

13.4

Operating income

4,307

17.1

5,758

19.4

1,451

33.7

Ordinary income

3,842

15.2

5,227

17.6

1,385

36.1

Profit attributable toowners of parent

2,740

10.9

3,725

12.5

985

36.0

© 2021 MILBON Co., Ltd.

2

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Sales (FY2021 9 months)
FY20209 months

FY2021
9 months

14,654(Unit: million yen)

Increase/
Decrease

17,086

2,431

Increase/
Decrease ratio (%)

16.6• Premium brands continued to perform well, with sales up 29.5% YoY. Aujua
Repairlity Line, which was launched in February, has already exceeded theannual plan. Global Milbon also benefited from the launch of a high-priced line,
Premium Position, in June.
• There are 2714 Milbon: iD salons registered. The number of registered members
is 110000, continuing to increase further beyond the revised target.
• Professional brands rose 8.3% YoY, partly due to the effects of GRANDLINKAGE
launched in February and Elujuda Bleach Care launched in June, but declined
6.3% compared to 2019.
* Sales growth by brand is based on consolidated gross sales.

© 2021 MILBON Co., Ltd.

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

FY2021 9 months
Aujua Hair care Series Repairlity LineA hair care series that cares for hair damage due tobleach and makes a smooth hair from inside.
(Unit: million yen)
FY2021 target

800

FY2021
9 months

Progress rate (%)

883

110.4

February 10, 2021 Debut

Global Milbon PREMIUM Position
A new line of Global Milbon that pursues even higher
quality and leads to “more beautiful hair" that is shiny,
bouncy and rich in moisture.
(Unit: million yen)
FY2021 target400© 2021 MILBON Co., Ltd.

FY2021
9 months

192

Progress rate (%)

48.0

4

June 10, 2021 Debut

Consolidated Sales by Product Category [Hair Care Products (3)]
GRANDLINKAGE

A new color care brand that sustains the colors and hair
becomes easy to manage after coloring at the salon.
(Unit: million yen)

FY2021 target

FY2021
9 months

1,200

Progress rate (%)

724

60.4

February 9, 2021 Debut

Elujuda Bleach CareOil-based leave-in treatments that give bleach designs
a smooth movement and bundle. (Unit: million yen)
FY2021 target

500

FY2021
9 months

Progress rate (%)

321

64.3

June 10, 2021 Debut

Cronna Sparkling Scalp Essence
Carbonated solution for the scalp that eliminates complex scalp
distress and leads to healthy hair. (Unit: million yen)
FY2021 target30© 2021 MILBON Co., Ltd.

FY2021
9 months

37

Progress rate (%)

124.9

5

September 9, 2021 Debut

A Premium Brand, Aujua
New product Hair Care Series Repairlity Line continues to perform well
Number of salons
FY2020 *(Unit: salons)

FY2021 *4,222

Increase/
Decrease

4,696

Increase/
Decrease ratio (%)

474

11.2

Consolidated sales (FY2021 9 months) (Unit: million yen)
FY20209 months

5,113

FY2021
9 months

6,432

Increase/
Decrease

Increase/
Decrease ratio (%)

1,319

25.8

Trends in sales & number of salons
8,000

4,500

7,000

4,000

Brand concept

Product range

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

A wide-ranging line-up that suits the hair
texture of individual customers

6,000

・5 series

4,000

What is Aujua?

Eternal stage series (new)

3,000

Aging care series

2,000

Hair care series

1,000

Scalp care series

0Hair care that supports beauty, now andinto the future, by addressing eachindividual’s hair and skin concerns andchoosing the most appropriate item forthat time.
This is Aujua.

3,500
3,000

5,000

2,500
2,000
1,500
1,000
500
0

Climatic care series
・15 lines

Sales

・96 items

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

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

© 2021 MILBON Co., Ltd.

(Number of salons)
5,000(Million yen)
9,000

6

A Premium Brand, Global Milbon
Steady progress with introduction of high-priced line Premium Position
Number of salons
FY2020 *9,916(Unit: salons)

FY2021 *

13,342

Increase/
Decrease

Increase/
Decrease ratio (%)

3,426

34.6

Consolidated sales (FY2021 9 months) (Unit: million yen)
FY20209 months

1,965

FY2021
9 months

2,778

Increase/
Decrease

Increase/
Decrease ratio (%)

813

41.4

Brand concept

What is “Global Milbon”?

A system hair care brand thatcultivates the “unique beauty” ofeach individual, with 360° shiny hair

We conducted an in-depth analysis of theinner structure of the hair of women from
20 countries around the world, using our
proprietary CT scanning technology, anddiscovered a universal form of hairdamage. Accordingly, we developed a haircare line containing ingredients capable ofrepairing such damaged hair andincreasing the density within each strandof hair.
“Global Milbon” is a system hair careproduct for developing shiny, beautiful hairfrom the core.

Countries with salonsJapan, 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.

© 2021 MILBON Co., Ltd.

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Trends in sales & number of salons(Million yen)
4,000

(Number of salons)
14,0003,500

12,0003,000

10,000

2,500

8,000

2,000

6,000

1,500

4,000

1,000

2,000

500
0

0
2016

2017

Sales

2018

2019

2020

Number of salons

2021
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 Sales (FY2021 9 months)
FY20209 months

FY2021
9 months

9,148(Unit: million yen)

Increase/
Decrease

10,954

1,806

Increase/
Decrease ratio (%)

19.7• Fashion color sales remained strong, up 28.1% YoY. Ordeve Addicthy grewsignificantly by 36.8% YoY due to more opportunities for agencies to choose tocapture new open salons and salons using other companies' colors.
• In gray color, sales were up 9.5% YoY, due to the expansion of Ordeve Seedilsalons and other factors.

* Sales growth by brand is based on consolidated gross sales.

© 2021 MILBON Co., Ltd.

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Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2021 9 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)
FY20209 months

3,285© 2021 MILBON Co., Ltd.

FY2021
9 months

4,496

Increase/
Decrease

Increase/
Decrease ratio (%)

1,210

36.8

9

FY2017 Debut

A Premium Organic Brand, Villa Lodola (1)Steady increase in number of salons due to continuation of planning and sales activities
Number of salons(Unit: salons)

FY2020

FY2021

10,128

10,920

Increase/
Decrease

Increase/
Decrease ratio (%)

792

7.8

Consolidated sales (FY2021 9 months) (Unit: million yen)
FY20209 months

790

FY2021
9 months

877

Increase/
Decrease

Increase/
Decrease ratio (%)

87

11.1

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

Trends in sales & number of salons(Million yen)

12,000

1,200

10,0001,000
600

Based on the philosophy of “Beauty, the Organic Way,” Villa Lodola is atrue organic brand that thoroughly cares about the natural environment
not only for the product itself but also in its container, production phaseand promotional tools.
All of the products are certified by ICEA, an Italian authority. Villa Lodola
supports organic choices, with hair care products nurtured in the soil of
Italy, bringing out true beauty.

400

10

8,000

800

What is Villa Lodola?

© 2021 MILBON Co., Ltd.

(Number of salons)

1,400

6,000
4,000
2,000

200
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.

A Premium Organic Brand, Villa Lodola (2)Core Product
FY2021 9 months
Villa Lodola ColorWith 92% natural ingredients, the product’s formulation utilizes thepower of plants. It brings comfort of an organic product across all
aspects, including during application, the finish and continued use.

Consolidated sales (FY2021 9 months) (Unit: million yen)
FY20209 months593© 2021 MILBON Co., Ltd.

FY2021
9 months

668

Increase/
Decrease

Increase/
Decrease ratio (%)

74

12.5

11

FY2015 Debut

Consolidated Sales by Product Category [Cosmetic Products]
Consolidated Sales (FY2021 9 months)
FY2021
9 months

FY20209 months

223(Unit: million yen)

Increase/
Decrease

416

Increase/
Decrease ratio (%)

193

86.3

• Even in the COVID-19 crisis, the company continued devising initiatives, andsales nearly doubled from the previous year. However, sales did not reach theforecast due to the completion of referral activities in Third Quarter and fallpromotions that did not grow more than expected. New issues and approaches
to be addressed are becoming visible and will be utilized for future activities.

New Products
FY2021 9 months
Imprea Eyebrow Mascara・Eyebrow Pencil
Mascara for eyebrows with wide variety of color that can be chosen inline with hair color, and pencils for eyebrows that can be drawn
smoothly and continue to have a natural finish.
(Unit: million yen)
FY2021 target83© 2021 MILBON Co., Ltd.

FY2021
9 months

Progress rate (%)

49

59.4

12

March 1, 2021 Debut

A Premium Brand, Imprea
Both the number of salons and sales increased, but did not reach the forecast.
Number of salons
FY2020 *645(Unit: salons)

FY2021 *Increase/
Decrease

991

Increase/
Decrease ratio (%)

346

53.6

Consolidated sales (FY2021 9 months) (Unit: million yen)
FY20209 months

223

FY2021
9 months

Increase/
Decrease

416

Increase/
Decrease ratio (%)

193

86.3

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, which is one of the strengths of them.

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 between the"corner-layer keratin" on the surface of the skin, which holds the key tocomplexion.

“Revolutionize Your Aura with your Professional Stylist”
Through communication that takes advantage of strength as a beautician, we propose impressions that comprehensively capture hair and facethrough beauticians, and deliver " Change Your Impression " to customers.

* Calculated based on the past year's shipment results.

© 2021 MILBON Co., Ltd.

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Consolidated Statement of Earnings (FY2021 9 months)<Consolidated Statement of Earnings> (Unit: million yen)
FY20209 months

Sales

FY2021
9 months

% to
sales

25,214 100.0 29,718 100.0
8,548

Cost of sales
Gross profit

% to
sales

16,665

33.9

9,947

66.1 19,771

33.5(Unit: million yen)

FY20209 months

FY2021
9 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

14,65417,086

57.5

2,431

16.6

Hair coloringproducts

9,148

10,954

36.9

1,806

19.7

Permanent wave
products

1,036

1,077

3.6

40

3.9

Cosmetic products

223

416

1.4

193

86.3

Others

150

183

0.6

33

22.4

Hair care products

66.5 <Major factors for the increase/decrease>

SG&A
expenses

12,35849.0 14,012

47.2

Operatingincome

4,307

17.1

5,758

19.4

Ordinary
income

3,842

15.2

5,227

17.6

Profitattributableto owners ofparent

2,740

10.9

3,725

12.5

© 2021 MILBON Co., Ltd.

<Breakdown of net sales by product category>

14•

Although SG&A expenses rose due to logistics
costs and personnel costs, the SG&A ratio fell due
to voluntary restraints and other factors, and theoperating profit margin rose significantly.

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

FY2017FY2018FY2019FY2020

FY2021
Jan.–Sep.

FY2021
Plan

Capitalexpenditures

1,570

1,149

1,605

1,917

3,198

7,488

Depreciation andamortization

1,272

1,370

1,453

1,562

1,279

1,819

Amount

1,422

1,479

1,534

1,581

1,236

1,765

% to sales

4.3

4.2

4.2

4.4

4.2

4.6

Category

R&D exp.

FY2021 CAPEX Main Plans• Established Aoyama Sales Office• Acquisition of land for of the new training center / the Innovation Centre• Milbon Digital Arena (Digital virtual space system)• Salon education video platform• Expansion of the Thai factory• Factory construction in China© 2021 MILBON Co., Ltd.

15

Trends in Fieldpersons (FPs), Market Related Data
(Number of FPs / As of January 1, the beginning of theFieldpersons trends (by country) fiscal year (As of December 21 for 2017 and before))2017 *1

2018

2019

2020

2021

258

269

279

297

328

105

111

108

100

-

USA

12

13

13

17

17

MILBON USA, INC.

48

48

50

27

-

CHINA

19

22

21

30

30

Milbon Trading(Shanghai) Co., Ltd.

50

62

70

50

-

KOREA

23

25

30

32

32

Milbon Korea Co., Ltd.

84

82

77

79

-

33

33

35

38

38

31

37

39

34

-

JAPAN

Others *2

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
(As of September 30, 2021)
0 FPs joined in October 2020 no recruitment
activities in autumn
33 FPs joined in April 2021, and are currently
in OJT on site
9 FPs are scheduled to join in October 2021
(The above 42 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 Because FY2017 was an irregular accounting period, performance is calculated with adjusted amounts for a 12-month period.
*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

16

Consolidated Net Sales in Japan and Overseas
FY2021 9 months(Unit: million yen)

FY20209 months

FY2021
9 months

Increase/
Decrease

Increase/
Changes in Local*1
Decrease ratio currency base

Net Sales% to sales

Net Sales% to sales

25,214100.0

29,718

100.0

4,504

17.9

16.5

JAPAN

21,102

83.7

23,904

80.4

2,801

13.3

13.3

Overseas

4,111

16.3

5,814

19.6

1,703

41.4

32.9

USA

334

1.3

662

2.2

327

97.9

96.0

CHINA

1,107

4.4

1,658

5.6

550

49.7

36.3

KOREA

1,832

7.3

2,517

8.5

684

37.4

27.1

Other *2

836

3.3

976

3.3

139

16.7

16.0

Consolidated Net Sales

(%)

(%)

*1 Figures are the rates of change in real terms on a local currency basis. Current exchange rates of 108.59 yen to the U.S. dollar, 16.86 yen to theChinese yuan, and 0.0962 yen to the Korean won*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

17

Consolidated Operating Income in Japan and Overseas
FY2021 9 months(Unit: million yen)

FY20209 months
Operating
IncomeFY2021
9 months

Operatingincome ratio(%)

Operating
IncomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
Operating Income

4,307

17.1

5,758

19.4

1,451

33.7

JAPAN

4,087

19.4

4,921

20.6

834

20.4

Overseas

219

5.3

837

14.4

617

280.8

USA

(215)

(64.3)(392)(59.3)

(177)

-

CHINA

214

19.3

381

23.0

167

78.1

KOREA

439

24.0

907

36.0

468

106.6

Other *

(218)

(26.1)

(58)

(6.0)

159

-

* Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

18

Outlook of Overseas Subsidiaries (1)Figures in the text are based on local currency.

USA (Milbon USA)•

Sales continued to be robust, rising 96.0% YoY and 43.9% compared to 2019, prior to theimpact of COVID-19, as the company continued to work with distributors in various
regions to develop activities such as salon classes and accompanying sales.

•

Global Milbon has been highly evaluated for its high product appeal and its targets areeasy to understand, leading to repeat customers. The 16000 hair care gift boxes sold out
in 1 day, contributing to sales growth.

•

Sales of hair coloring products grew steadily, reflecting proposals tailored to the diversityof the U.S. and European markets for Sophistone and Ordeve Addicthy in Asian salons.

CHINA (Milbon China)•

The company continued to carefully implement proposal activities to deepen therelationship of trust with salons, and sales rose 36.3% YoY despite the impact of COVID19, which was re-expanded in some regions from July to August.

•Sales of Global Milbon grew strongly, driving growth in hair care products.

•

Sales of hair coloring products grew as a result of a review of color education for salonsthis year.

© 2021 MILBON Co., Ltd.

19

Outlook of Overseas Subsidiaries (2)Figures in the text are based on local currency.

KOREA (Milbon Korea)•

It continued to aggressively cultivate new salons in collaboration with elite sales
representatives at distributors nationwide, and sales grew 27.1% YoY. The company issupporting new salons by preparing open salon kits, including cut cloths.

•

The number of people who enjoy color in mask lifestyles is increasing, and in hair coloringproducts, Ordeve Addicthy continues to maintain high growth.

•

In hair care, in addition to steady increases in Aujua and Global Milbon, from September
the company launched GRANDLINKAGE, aiming for further growth through approaches tocustomers utilizing video and other media.

© 2021 MILBON Co., Ltd.

20

Toward the Future[Capital Expenditures] ⇒ Increase in depreciation

Established
Aoyama Sales Office

Expansion of
the Thai factory

The new
training center

Factory constructionin China

Digitalinvestment[About the status of expenses] ⇒ Higher expenses due to resumption ofactivities and the opening of overseas plants
and R&D
Preparing to start operationsatChina factory
China R&D

Expenses,
travel expenses© 2021 MILBON Co., Ltd.

Thai R&D

Logistics costs

USA R&D
21

<Appendix> Hair Care Brand Positioning Map
Premium

brand

Professional© 2021 MILBON Co., Ltd.

22

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

© 2021 MILBON Co., Ltd.

23