Consolidated Financial Results for the Six Months Ended June 20, 2016
[Japanese GAAP]
June 29, 2016
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, First Section
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
TEL: +81-6-6928-2331
Scheduled filing date for quarterly report: July 29, 2016
Scheduled starting date of dividend payments: August 10, 2016
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (For institutional investors and analysts)(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the six months ended June 20, 2016 (December 21, 2015 - June 20, 2016)(1) Consolidated operating results
Net sales

Operating income

Six months ended June 20, 2016

Million yen
14,218%
8.7

Million yen
2,423

%
2.3

Million yen
2,188

Six months ended June 20, 2015

13,074

7.4

2,370

10.5

2,270

(Note) Comprehensive income Six months ended June 20, 2016: 1,195 million yen [(38.7)%]

Six months ended June 20, 2016

Basic earnings per share
Yen
89.48

Six months ended June 20, 2015

88.21

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
(3.6)
1,464
1.4

Ordinary income

14.6

1,444

21.4

Six months ended June 20, 2015: 1,950 million yen [49.1%]

Diluted earnings per share
Yen-(2) Consolidated financial position
Total assets
Million yen
31,282As of June 20, 2016
As of December 20, 2015
(Reference)

EquityNet assets
Million yen
26,76730,799Equity ratio%
85.6

26,212As of June 20, 2016: 26,767 million yen

85.1

As of December 20, 2015: 26,212 million yen

2. Payment of dividends
Annual dividends
End of 1st quarterEnd of 2nd quarter

Yen
Year ended December 20, 2015

-

Yen
35.00

Year ending December 20, 2016

-

38.00

End of 3rd quarterEnd of fiscal year

Yen

Year ending December 20, 2016
(forecast)(Note) Changes to latest dividends forecast: None

Total

-

Yen
39.00

Yen
74.00

-

40.00

78.00

3. Consolidated operating forecasts for the fiscal year ending December 20, 2016 (December 21, 2015 - December 20, 2016)(Percentages show year-on-year changes.)
Net sales
Million yen
Year ending December 20, 2016

28,950(Note) Changes to latest performance forecasts: None

Profit attributable toOperating income
Ordinary income
owners of parent% Million yen% Million yen% Million yen
%
5.7

5,000

5.8

4,700

6.2

3,100

5.1

Profit per share
Yen
189.34

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 0 companies (Company name: ): NoneExclude: 0 companies (Company name: )(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: Yes2) Changes in accounting policies other than those in 1) above: None3) Changes in accounting estimates: None4) Retrospective restatements: None(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period As of(including treasury shares)June 20, 2016
2) Number of treasury shares at the end of the period As ofJune 20, 2016
3) Average number of shares during the period
Six months ended(cumulative)
June 20, 2016

16,558,617 shares
186,680 shares
16,372,151 shares

As ofDecember 20, 2015
As ofDecember 20, 2015
Six months ended
June 20, 2015

16,558,617 shares
186,242 shares
16,373,548 shares*Status of execution of quarterly review of financial statements
As these financial statements are not subject to the review of the quarterly financial statements pursuant to the Financial Instruments and Exchange Act,
procedures for said review are not completed at the time of disclosure of this report.
*Explanation on the appropriate use of operating forecasts and other special instructions
Operating forecasts and other statements regarding the future presented in these materials are based on information currently available and certain
assumptions deemed to be reasonable, and actual performance may differ substantially due to various factors.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016

Contents of supplementary materials
1. Qualitative Information on Consolidated Results for the Current Period .......................................................................................... 2(1)

Qualitative information on consolidated operating results ............................................................................................................. 2(2)

Qualitative information on consolidated financial position............................................................................................................ 3(3)

Qualitative information on consolidated operating forecasts ......................................................................................................... 3

2. Summary Information (Notes) ........................................................................................................................................................... 4(1)

Significant changes in subsidiaries during the period .................................................................................................................... 4(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements ............................. 4(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements ................................................ 4

3. Quarterly Consolidated Financial Statements ..................................................................................................................................... 5(1)

Quarterly Consolidated Balance Sheets ......................................................................................................................................... 5(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................................... 7(3)

Quarterly Consolidated Statements of Cash Flows ........................................................................................................................ 9(4)

Notes regarding going concern assumption ................................................................................................................................. 10(5)

Segment information .................................................................................................................................................................... 10(6)

Notes in case of any significant changes in shareholders’ equity ................................................................................................. 10-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016

1. Qualitative Information on Consolidated Results for the Current Period(1)

Qualitative information on consolidated operating results
During the six months period ended June 20, 2016, the Japanese economy was on a moderate recovery trend. Corporate earnings
continued to improve, supported by the government’s economic policies. Meanwhile, concerns remained over an economic
slowdown due to downturns in China and other Asian emerging economies. In the beauty industry, although business conditions
continue to pose challenges due to the adverse impact of demographic trends, patterns of consumption seem to be changing, andamounts that people spend in beauty salons on an annual basis appear to be on the rise, among those in their late 20s and 40s, aswell as those in their 50s whose household incomes and expenditures tend to be the highest among demographic segments.
Amid this environment, the Milbon Group believes that professionals must respond to attitudes of female beauty which vary fromgeneration to generation. As such, we will work with salons premised on the goal of “helping to lend radiance to the stages ofbeauty experienced by women as individuals, thereby seizing on the two demographic milestones of beauty — that of the‘Hanako generation’ (women in their 50s embarking on a quest for beauty) and that of the ‘Hanako junior generation’ (women in
their 20s awakening to the notion of beauty).”
Consolidated net sales during the six month period ended June 20, 2016 increased to 14,218 million yen (up 8.7% year-on-year).
In the hair care product category, the increase in net sales was due to the growth of Aujua, the Company’s premium brand, andbrisk sales of new products in leave-in hair treatments from the Company’s professional brand. In the hair coloring productcategory, one of the factors for the increase in net sales was that sales of the hair coloring product line specialized for gray hair
which launched last year continues to grow steadily. Furthermore, steady business development in Asia, including China andSouth Korea, also contributed to the increase.
Operating income was 2,423 million yen (up 2.3% year-on-year), ordinary income was 2,188 million yen (down 3.6%
year-on-year) and profit was 1,464 million yen (up 1.4% year-on-year).

Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below:[Breakdown of consolidated net sales by product category]
Product category(Unit: Million yen)Six months ended
June 20, 2015
AmountRatio (%)

Six months ended
June 20, 2016
AmountRatio (%)

Increase(decrease)amountYear-on-yearchange (%)

Hair care products

7,655

58.6

8,511

59.8

855

11.2

Hair coloring products

4,606

35.2

4,944

34.8

338

7.3

Permanent wave products

718

5.5

664

4.7

(54)

(7.5)

Others

94

0.7

98

0.7

3

4.2

Total

13,074100.0

14,218

100.0

1,143

8.7

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Six months ended
June 20, 2015
AmountRatio (%)

Six months ended
June 20, 2016
AmountRatio (%)

Increase(decrease)amountYear-on-yearchange (%)

Domestic sales

11,441

87.5

12,330

86.7

889

7.8

Overseas sales

1,633

12.5

1,888

13.3

254

15.6

Total

13,074100.0

14,218

100.0

1,143

8.7

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016

(2)

Qualitative information on consolidated financial position

1) Assets, liabilities and net assets
Total assets at the end of the six month period ended June 20, 2016 increased by 483 million yen compared to the end of theprevious fiscal year to 31,282 million yen.
Current assets decreased by 643 million yen compared to the end of the previous fiscal year to 13,981 million yen. This was
mainly due to the 1,500 million yen decrease in securities (jointly managed designated money trusts, etc.), the 157 million yen
decrease in cash and deposits, the 838 million yen increase in merchandise and finished goods, and the 182 million yen increase in
raw materials and supplies.
Non-current assets increased by 1,126 million yen compared to the end of the previous fiscal year to 17,301 million yen. This wasdue mainly to the 1,486 million yen increase in construction in progress, including advance payment on a portion of the extension
work of the Yumegaoka Plant.
Current liabilities decreased by 3 million yen compared to the end of the previous fiscal year to 4,352 million yen.
Non-current liabilities decreased by 68 million yen to 162 million yen compared to the end of the previous fiscal year.
Net assets increased by 555 million yen compared to the end of the previous fiscal year to 26,767 million yen. This was due
mainly to the increase of 826 million yen in retained earnings and the 169 million yen decrease in valuation difference on
available-for-sale securities attributable to the slump in stock markets.
As a result, the equity ratio changed from 85.1% at the end of the previous fiscal year to 85.6%. Net assets per share based on the
total outstanding shares as of the end of the period under review increased from 1,601.02 yen per share at the end of the previous
fiscal year to 1,634.98 yen per share.
2) Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the six month period ended June 20, 2016 decreased by 1,624
million yen compared to the end of the previous fiscal year to 5,461 million yen, as a result of using the net cash provided byoperating activities for the payment of income taxes and the payment of dividends.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 1,103 million yen. This was mainly the result of posting 2,184 million yen
in profit before income taxes, depreciation of 471 million yen, the 249 million yen increase in notes and accounts payable - trade,the 1,074 million yen increase in inventories and 731 million yen in income taxes paid.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 2,051 million yen. This was mainly due to the purchase of property, plant andequipment of 1,812 million yen and the purchase of intangible assets of 166 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 639 million yen. This was mainly due to the cash dividends paid to shareholdersof 637 million yen.

(3)

Qualitative information on consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced on
January 27, 2016.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20162.

Summary Information (Notes)(1)

Significant changes in subsidiaries during the period
None

(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements
None

(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements(Changes in accounting policies)(Application of the Accounting Standard for Business Combinations, etc.)
Effective from the first quarter ended March 20, 2016, the Company adopted the “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, September 13, 2013), the “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, September 13, 2013) and the “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, September 13, 2013). As a result, the presentation method for “profit” and other related items has been changed,
and “minority interests” are now presented as “non-controlling interests.” To reflect these changes, the Company has reclassified
its quarterly and full-year consolidated financial statements for the first six months of the previous fiscal year and the previous
fiscal year.

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20163.

Quarterly Consolidated Financial Statements(1)

Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year(As of December 20, 2015)

Current Second Quarter(As of June 20, 2016)

4,912,293
3,424,543
2,500,000
2,428,521
30,925835,568
541,623(48,570)
14,624,904

4,754,483
3,463,089
1,000,000
3,267,053
48,213
1,017,755
593,423(162,552)
13,981,466

4,262,671
1,120,346
5,277,410
1,348,999
272,064
12,281,492
398,357

4,087,225
1,023,741
5,273,740
2,835,519
305,249
13,525,475
434,874

2,525,286
278,650
740,222(49,681)3,494,477
16,174,327
30,799,232

2,355,623
297,680
741,215(53,556)
3,340,962
17,301,312
31,282,778

684,978
2,343,762
749,005
18,394
108,823
451,599
4,356,565

918,883
2,282,957
691,562
17,151
109,460
332,937
4,352,953

27,425
202,708
230,133
4,586,698

31,076130,989
162,065
4,515,019

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for sales returns
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities-5-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016
(Thousand yen)Previous Fiscal Year(As of December 20, 2015)

Current Second Quarter(As of June 20, 2016)

2,000,000
199,748
23,440,262(542,094)
25,097,916

2,000,000
199,761
24,266,695(544,120)
25,922,336

737,221567,472

311,451
65,944
1,114,616
26,212,533
30,799,232

222,22955,721
845,423
26,767,759
31,282,778

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-6-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016

(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Six Months Ended June 20, 2015 and 2016

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Company house defrayment income
Gain on surrender of insurance
Other
Total non-operating income
Non-operating expenses
Sales discounts
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Six Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)
13,074,879
3,935,993
9,138,886
6,768,786
2,370,100-7-(Thousand yen)
Six Months Ended
June 20, 2016
(December 21, 2015 June 20, 2016)
14,218,270
4,430,459
9,787,810
7,364,168
2,423,642

2,531
6,474
26,46329,721
44,0207,140
116,351

2,632
6,073
–
28,5902,622
12,44252,361

214,451–
1,442
215,894
2,270,557

233,41154,061
403
287,876
2,188,127

10,887
10,8872,259,669
779,348
36,044815,392
1,444,277
1,444,277

4,124
4,124
2,184,002
667,995
51,050719,0461,464,955
1,464,955

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 20, 2015 and 2016

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

Six Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)
1,444,277-8-(Thousand yen)
Six Months Ended
June 20, 2016
(December 21, 2015 June 20, 2016)
1,464,955

348,285
164,846(7,402)505,728
1,950,006(169,748)(89,222)(10,223)(269,193)
1,195,762

1,950,006

1,195,762––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016(3)

Quarterly Consolidated Statements of Cash FlowsSix Months Ended
June 20, 2015
(December 21, 2014 June 20, 2015)

Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Interest and dividend income
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Other, net
SubtotalInterest and dividend income received
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-9-(Thousand yen)
Six Months Ended
June 20, 2016
(December 21, 2015 June 20, 2016)

2,259,669
499,914
(97)
4,627
112
(70,672)
6,299(9,006)(7,467)
10,8872,184,002
471,529
118,037
1,436(1,243)(36,003)
4,604(8,705)
13,796
4,124

26,335(45,833)(573,640)(1,074,475)

257,608249,305

19,5132,424,082
8,762(756,287)
1,676,557(53,883)
1,826,692
7,774(731,413)
1,103,053(1,013,504)(66,578)(1,700)4,467(92,560)––(63,102)
24,902(49,584)
51,766(3,738)(1,209,632)(1,812,088)(166,608)
(500)
1,318
–
29,970(100,000)(23,649)
10,970(26)
12,634(3,439)(2,051,419)(2,972)(556,032)(559,004)(2,013)(637,773)(639,787)

34,994(36,810)(57,084)
7,147,043
7,089,958(1,624,963)
7,086,948
5,461,985

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2016
(4)

Notes regarding going concern assumption
None

(5)

Segment information
The Company omits information on business segments, as it is engaged in the production and distribution of hair-care
products and related merchandise, all of which are deemed to belong to a single business segment.

(6)

Notes in case of any significant changes in shareholders’ equity
None- 10 -