Consolidated Financial Results for the Six Months Ended June 30, 2020
[Japanese GAAP]
Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Executive Director
Scheduled filing date for quarterly report: August 7, 2020
Scheduled starting date of dividend payments: August 28, 2020
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (For institutional investors and analysts)

August 5, 2020
Tokyo Stock Exchange, First Section
TEL: +81-3-3517-3915(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the six months ended June 30, 2020 (January 1, 2020 - June 30, 2020)(1) Consolidated operating results
Net sales
Six months ended June 30, 2020
Six months ended June 30, 2019
(Note) Comprehensive income

Operating income

Million yen
15,869%(8.0)

Million yen
2,388%(22.7)

Million yen
2,102

17,242

6.1

3,089

3.8

2,824

Six months ended June 30, 2020: 515 million yen [(72.9)%]

Six months ended June 30, 2020

Basic earnings per share
Yen
44.57

Six months ended June 30, 2019

61.07

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%(25.6)
1,451(27.4)

Ordinary income

2.8

1,999

(6.4)

Six months ended June 30, 2019: 1,900 million yen [(14.8)%]

Diluted earnings per share
Yen-(2) Consolidated financial position
Total assets
Million yen
38,969As of June 30, 2020

41,912As of December 31, 2019
(Reference)

EquityNet assets
Million yen
33,925

As of June 30, 2020: 33.925 billion yen

Equity ratio%
87.1

35,882

85.6

As of December 31, 2019: 35.882 billion yen

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

Year ended December 31, 2019

-

Yen
27.00

Year ending December 31, 2020

-

27.00

End of 3rd quarterEnd of fiscal year
Yen

Yen
29.00

-

Total
Yen
56.00

Year ending December 31, 2020
29.00
56.00
(forecast)(Note) Changes to latest dividends forecast: Yes
For details, please refer to the "Notice of Revisions to Earnings and Dividend Forecasts and Dividends from Surplus (Interim Dividends)" announced on August 5, 2020.

3. Consolidated operating forecasts for the fiscal year ending December 31, 2020 (January 1, 2020 - December 31, 2020)(Percentages show year-on-year changes.)
Net sales

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
(3.8)
5,930
(12.2)
5,280(15.3)
3,840(15.0)
117.95

Million yen
Year ending December 31, 2020
34,900(Note) Changes to latest performance forecast: Yes
For details, please refer to the "Notice of Revisions to Earnings and Dividend Forecasts and Dividends from Surplus (Interim Dividends)" announced on August 5, 2020.

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 1 company (Company name: Milbon (Zhejiang) Cosmetics Co., Ltd.): Yes
Exclude: 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.
: None2) 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(including treasury shares)
2) Number of treasury shares at the end of the period
3) Average number of shares during the period

As ofJune 30, 2020
As ofJune 30, 2020
Six months ended
June 30, 2020

33,117,234 shares
614,657 shares
32,556,981 shares

As ofDecember 31, 2019
As ofDecember 31, 2019
Six months ended
June 30, 201933,117,234 shares
378,250 shares
32,739,519 shares*These financial statements are not subject to the review of the quarterly financial statements by a certified public accountant or an audit corporation.
*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.

Contents of supplementary materials

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

2(1)

Explanation on operating results .................................................................................................................................

2(2)

Explanation on financial position ...............................................................................................................................

3(3)

Explanation on forward-looking statements including consolidated operating forecasts ............................................

3

2. Quarterly Consolidated Financial Statements and Main Notes ............................................................................................

4(1)

Quarterly Consolidated Balance Sheets ......................................................................................................................

4(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................

6

Quarterly Consolidated Statements of Earnings
Six Months Ended June 30, 2019 and 2020 ..........................................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 30, 2019 and 2020 ............................................................................................................

7(3)

Quarterly Consolidated Statements of Cash Flows .....................................................................................................

8(4)

Notes regarding quarterly consolidated financial statements ......................................................................................

9Notes regarding going concern assumption .................................................................................................................

9Notes in case of any significant changes in shareholders’ equity .................................................................................

9

Segment information, etc. ............................................................................................................................................

9-1-

1. Qualitative Information on Consolidated Results for the Current Period(1) Explanation on operating results
During the six-month period ended June 30, 2020, the Japanese economy suffered a sharp deterioration from March onward
due to the impact of a new type of coronaviral infectious disease. Overseas economies also continued to face severe conditions.
Going forward, although socioeconomic activity levels will be raised in stages, conditions are expected to remain severe for thetime being.
In the beauty salon industry, conditions remained challenging due to restrictions on the salon business as a result of thedeclaration of state of emergency and a decrease in the number of customers visiting salons. Customers have begun to return tothe beauty salon after the termination of state of emergency in late May, but we need to pay attention to future trends in
infectious diseases.
Against this backdrop, our group has been supporting salons that continue to operate in the face of severe market constraints bydevising online activities, while placing top priority on the safety of salons, distributors, and employees. In addition, providing
masks and alcohol to salons and distributors was highly evaluated. As a result, consolidated net sales amounted to 15,869
million yen (down 8.0% year on year), operating profit amounted to 2,388 million yen (down 22.7% year on year), ordinary
profit amounted to 2,102 million yen (down 25.6% year on year), and profit attributable to owners of parent amounted to 1,451
million yen (down 27.4% year on year), keeping the drop in performance to a minimum.
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](Unit: Million yen)Six months ended June 30, 2019 Six months ended June 30, 2020
Product category
AmountRatio (%)

AmountRatio (%)

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

Hair care products

9,897

57.4

9,391

59.2

(506)

(5.1)

Hair coloring products

6,423

37.2

5,594

35.2

(828)

(12.9)

Permanent wave products

770

4.5

660

4.2

(110)

(14.3)

Cosmetic products

47

0.3

136

0.9

89

186.1

Other

103

0.6

85

0.5

(18)

(17.6)

Total

17,242100.0

15,869100.0(1,373)(8.0)[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Six months ended June 30, 2019 Six months ended June 30, 2020
AmountRatio (%)

AmountRatio (%)

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

Domestic sales

14,383

83.4

13,37384.3(1,009)(7.0)

Overseas sales

2,859

16.6

2,495

15.7

(363)

(12.7)

Total

17,242100.0

15,869100.0(1,373)

(8.0)

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(2) Explanation on financial position
1) Assets, liabilities and net assets
Total assets at the end of the six-month period ended June 30, 2020 decreased 2,942 million yen from the end of the previous
fiscal year, to 38,969 million yen.
Current assets decreased by 2,054 million yen from the end of the previous fiscal year to 18,275 million yen. The main factorsof change were decreases of 3,059 million yen in cash and deposits, 690 million yen in merchandise and finished goods, and 217
million yen in raw materials and supplies.
Non-current assets decreased by 887 million yen from the end of the previous fiscal year to 20,694 million yen. The main factor
for the change was 907 million yen decrease in investment securities due to a decrease in valuation gains on listed stocks.
Current liabilities decreased by 1,129 million yen from the end of the previous fiscal year to 4,277 million yen. The main factors
for the change were decreases of 610 million yen in accounts payable-other and 238 million yen in income taxes payable.
Non-current liabilities increased by 143 million yen from the end of the previous fiscal year to 766 million yen.
Net assets decreased by 1,957 million yen from the end of the previous fiscal year to 33,925 million yen. The main factors of thechange were decreases of 1,544 million yen in the purchase of treasury stock and 615 million yen in valuation difference on
available-for-sale securities, 260 million yen in foreign currency translation adjustments due to the appreciation of the yen, andan increase of 501 million yen in retained earnings, due to a decrease in valuation gains on listed stocks.
As a result, the equity ratio changed from 85.6% at the end of the previous fiscal year to 87.1%. The net assets per share basedon the total number of issued stocks at the end of the fiscal year was 1,043.78 yen from 1,096.02 yen at the end of the previous
fiscal year.
2) Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the six-month period ended June 30, 2020 decreased by 1,858
million yen from the end of the previous fiscal year to 7,517 million yen.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 223 million yen. This was mainly attributable to profit before income
taxes of 2,088 million yen, depreciation and amortization of 778 million yen, an increase in inventories of 963 million yen, andincome taxes paid of 832 million yen.
(Cash flows from investing activities)
Net cash provided by investment activities amounted to 556 million yen. This was mainly due to payments for purchase ofproperty, plant and equipment of 461 million yen, payments for purchase of intangible assets of 187 million yen, and proceedsfrom withdrawal of time deposits of 1,200 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 2,538 million yen. This was mainly attributable to 1,589 million yen in
payments for purchase of treasury stock and 948 million yen in cash dividends paid to shareholders.

(3) Explanation on forward-looking statements including consolidated operating forecasts
In the first quarter report of the fiscal year ending December 2020, which was announced on May 12, 2020, we did notpredict the results forecast and the distribution forecast for the fiscal year ending December 2020 because there is no prospect
for the restriction of beauty salon operations and declining number of salon visitors due to the declaration of state of
emergency accompanying the spread of the new coronaviruses, and it is difficult to calculate the results forecast and the
distribution forecast rationally. At this point in time, there is uncertainty about the future, but we have made forecasts for
operating results and dividends assuming that the spread of the new coronavirus will gradually converge from the third quarterof the fiscal year under review. For details, please refer to "Notice of Revisions to Earnings and Dividend Forecasts andDividends from Surplus (Interim Dividends)" announced today (August 5, 2020).

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2. Quarterly Consolidated Financial Statements and Main Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)Previous fiscal year
(As of December 31, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
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 bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities-4-

Current Second Quarter(As of June 30, 2020)

10,615,390
4,180,186
3,912,361
34,781
1,120,202
470,610(3,185)
20,330,346

7,555,571
4,244,127
4,602,550
34,386
1,337,254
505,714(4,200)18,275,405

7,023,638
2,007,962
5,001,021
84,801
581,100
14,698,524
1,174,902

6,984,328
1,917,400
4,996,349
13,440631,697
14,543,216
1,156,175

3,991,136
149,125
155,832
204,502
1,266,204(58,381)5,708,420
21,581,847
41,912,194

3,083,449
100,710156,126
461,8031,250,988(58,381)4,994,696
20,694,089
38,969,495

797,033
2,479,907
891,258
397,297
841,726
5,407,223

746,861
1,869,153
652,776
408,672
600,144
4,277,607

4,290
670
505,563
111,835
622,359
6,029,582

4,124
636
542,284
219,237
766,283
5,043,891

(Thousand yen)Previous fiscal year
(As of December 31, 2019)
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-5-

Current Second Quarter(As of June 30, 2020)

2,000,000
200,742
33,266,155(563,197)
34,903,700

2,000,000
222,405
33,767,849(2,107,803)
33,882,451

773,082
267,184(61,355)
978,91135,882,612
41,912,194

157,492(73,113)6,617(47,845)
43,15233,925,603
38,969,495

(2) Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Six Months Ended June 30, 2019 and 2020

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Company house defrayment income
Gain on surrender of insurance
Refund of custom duty
Other
Total non-operating income
Non-operating expenses
Sales discounts
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
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 30, 2019
(January 1, 2019 June 30, 2019)17,242,829
5,746,806
11,496,022
8,406,961
3,089,061(Thousand yen)
Six Months Ended
June 30, 2020
(January 1, 2020 June 30, 2020)
15,869,207
5,329,116
10,540,090
8,151,746
2,388,344

7,019
31,969
11,621
29,13479,744

12,28432,338
2,174
6,835
19,74541,941
115,319304,866

283,864

20,381

66,45818,78828
344,065
2,824,740

49,333
1,013
400,669
2,102,994

799
799

-

3,506
5,003
8,509
2,817,031
785,168
32,543
817,712
1,999,318
1,999,318

14,353
14,353
2,088,641
597,047
40,470637,518
1,451,123
1,451,123-6-

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 30, 2018 and 2019

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
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 to non-controllinginterests

Six Months Ended
June 30, 2019
(January 1, 2019 June 30, 2019)
1,999,318(Thousand yen)
Six Months Ended
June 30, 2020
(January 1, 2020 June 30, 2020)
1,451,123(48,794)(78,177)
28,217(98,754)
1,900,563(615,589)(73,113)(260,566)
13,509(935,759)
515,364

1,900,563

515,364---7-

(3) Quarterly Consolidated Statements of Cash Flows(Thousand yen)
Six Months Ended
June 30, 2020
(January 1, 2020 June 30, 2020)

Six Months Ended
June 30, 2019
(January 1, 2019 June 30, 2019)
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
Share of (profit) loss of entities accounted for using
equity method
Foreign exchange losses (gains)
Loss (gain) on sales of non-current assets
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
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
Proceeds from sales 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
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
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-8-2,817,031
714,778(638)(41,685)(27,271)
44,495(45,379)(38,989)

2,088,641
778,148
1,072
11,783(136,953)
156,126(44,623)

20,381

66,458(5,968)
2,706
5,003

(57,579)
14,353

20,773(75,300)(1,220,209)(963,892)

7,107(39,289)(674,174)
1,577,961
37,054(1,494,549)
120,465(789,983)
1,008,963
46,712(832,299)
223,375(706,762)
1,429(230,984)(149,340)
1,475(1,000,358)(63,778)
58,907(442)(2,089,854)(461,742)(187,072)
(60)
1,520
1,200,000(40,268)
48,019(3,776)556,619(2,481)(980,590)(983,071)(1,589,628)(948,843)(2,538,472)(50,477)(99,977)(3,002,937)
9,541,483
6,538,546(1,858,454)
9,376,300
7,517,845

(4) Notes regarding quarterly consolidated financial statements(Notes regarding going concern assumption)
None(Notes in case of any significant changes in shareholders' equity)
Companys acquired 249.5 thousand shares of treasury stock in accordance with a resolution approved at a meeting of theBoard of Directors held on February 12, 2020. As a result, treasury stock increased by 1,544,606 thousand yen during the firsthalf of the current fiscal year to 2,107,803 thousand yen at the end of the second quarter of the current fiscal year.
(Segment information, etc.)
The Company omits segment information, as it operates just one business segment engaged in the manufacturing and sales ofhair cosmetics.

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