Consolidated Financial Results for the Nine Months Ended September 30, 2019
[Japanese GAAP]
October 28, 2019
Tokyo Stock Exchange, First Section

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
Scheduled filing date for quarterly report: November 8, 2019
Scheduled starting date of dividend payments: Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: None

TEL: +81-3-3517-3915(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the nine months ended September 30, 2019 (January 1, 2019 - September 30, 2019)(1) Consolidated operating results
Net sales(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%

Operating income

Ordinary income

Million yen%
Million yen%
Million yen
Nine months ended September 30,
26,651
9.0
5,175
10.4
4,804
9.4
3,411
2.6
2019
Nine months ended September 30,
24,444
4,687
4,393
3,324
2018
(Note) Comprehensive income
Nine months ended September 30, 2019: 3,307 million yen
Nine months ended September 30, 2018: 3,395 million yen [-%][(2.6)%]
Basic earnings per share
Diluted earnings per share
Yen
Yen
Nine months ended September 30,
104.21
2019
Nine months ended September 30,
101.552018(Notes)
1. From the three-month period ended March 31, 2019, the Company has early applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Board ofJapan (ASBJ) Statement No. 29 issued on March 30, 2018) and the “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30
issued on March 30, 2018). In accordance with the principle treatment, the new accounting policy has been applied retrospectively to all prior-period financial statements.
2. As of the fiscal year ended December 31, 2017, the Company changed its fiscal year end from December 20 to December 31. For the consolidated accounting, overseas
consolidated subsidiaries changed their fiscal year end from September 30 to December 31. Therefore, year-on-year changes are not stated for the nine months ended September
30, 2018, because the nine-month period ended September 30, 2018 (January 1, 2018 to September 30, 2018) differs from that of the previous nine-month period (December
21, 2016 to September 20, 2017).
(2) Consolidated financial position
Total assets
Million yen
39,393As of September 30, 2019
As of December 31, 2018
(Reference)

EquityNet assets
Million yen
34,59039,634As of September 30, 2019: 34,590 million yen

Equity ratio%
87.8

33,151

83.6

As of December 31, 2018: 33,151 million yen(Note) The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 issued on February 16, 2018), etc.,from the beginning of the three-month period ended March 31, 2019. Accordingly, figures of total assets and equity ratio for the fiscal year ended December 31, 2018 havebeen adjusted to reflect the retrospective application of the aforementioned accounting standard, etc.

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

Year ended December 31, 2018

-

Yen
24.00

Year ending December 31, 2019

-

27.00

End of 3rd quarterEnd of fiscal year
Yen-

Year ending December 31, 2019
(forecast)(Note) Changes to latest dividends forecast: None

Total

Yen
30.00

Yen
54.00

27.00

54.00

3. Consolidated operating forecasts for the fiscal year ending December 31, 2019 (January 1, 2019 - December 31, 2019)(Percentages show year-on-year changes.)
Net sales
Million yen
Year ending December 31, 201936,600(Note) Changes to latest performance forecast: None

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
8.0
6,840
9.3
6,190
6.5
4,350
(3.2)
132.86(Note) Following the change in accounting policy, figures have been adjusted to reflect the retrospective application of the new accounting policy. Accordingly, year-on-yearchanges show comparison with the retrospectively adjusted figures.

*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.
: None2) Changes in accounting policies other than those in 1) above: Yes3) 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 ofSeptember 30, 2019
As of
September 30, 2019
Nine months ended
September 30, 201933,117,234 shares
377,994 shares
32,739,431 shares

As ofDecember 31, 2018
As ofDecember 31, 2018
Nine months ended
September 30, 201833,117,234 shares
377,460 shares
32,740,096 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.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019

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
Nine Months Ended September 30, 2018 and 2019 ..............................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income(3)

Nine Months Ended September 30, 2018 and 2019 ..............................................................................................

7

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

8

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

8

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

8

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

8-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019

1. Qualitative Information on Consolidated Results for the Current Period(1)Explanation on operating results
During the nine-month period ended September 30, 2019, the Japanese economy continued on a moderate recovery trend amid
improvement in the employment and income environment; however, there were signs of weakness in some areas of exports andproduction. The global economy is also generally on a recovery trend, while there are concerns about the future such as theimpact of prolonged trade friction between the U.S. and China and the European political climate. The operating environment
in the beauty industry remains severe, as it has become a challenge to recruit and retain human resources due to the impact of
population movements.
Amid this environment, the Milbon Group is working with salons premised on the goal of “promoting the NEXT 100 by
supporting ‘the creation of salons where human resources development is well established,’ where personnel are nurtured andretained, and creating ‘lifetime beauty salons’ by training beauty partners who fulfill lifetime beauty for women.”
Consolidated net sales during the nine-month period ended September 30, 2019 amounted to 26,651 million yen (up 9.0% year
on year). This was primarily due to growth by Aujua in the hair care product category thanks to the contributions of new products,
and growth by the “milbon” brand that targets the global market with more salons both in Japan and overseas. There was also
continued substantial growth in the fashion color Ordeve Addicthy, which was released two years ago, in the hair coloringproduct category. In domestic market, there was also rush demand ahead of the raising of the consumption tax rate.
Operating income was 5,175 million yen (up 10.4% year on year), ordinary income was 4,804 million yen (up 9.4% year onyear), and profit attributable to owners of parent was 3,411 million yen (up 2.6% year on year).
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 30,2018) and the “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on
March 30, 2018) since the three-month period ended March 31, 2019. Regarding the application of the Accounting Standard for
Revenue Recognition, etc., the new accounting policy has been applied retrospectively to all prior-period financial statements,
in accordance with the principle treatment as set forth in Paragraph 84 of the Accounting Standard for Revenue Recognition.

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)
Product category

Nine months ended
September 30, 2018
AmountNine months ended
September 30, 2019

Ratio (%)

AmountRatio (%)

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

Hair care products

14,24658.3

15,313

57.4

1,066

7.5

Hair coloring products

8,853

36.2

9,889

37.1

1,036

11.7

Permanent wave products

1,182

4.8

1,168

4.4

(14)

(1.2)

–

–

101

0.4

101

–

Others

162

0.7

178

0.7

16

10.0

Total

24,444100.0

26,651

100.0

2,207

9.0

Cosmetic products[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)
Nine months ended
September 30, 2018
AmountNine months ended
September 30, 2019

Ratio (%)

AmountRatio (%)

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

Domestic sales

20,511

83.9

22,336

83.8

1,824

8.9

Overseas sales

3,933

16.1

4,315

16.2

382

9.7

Total

24,444100.0

26,651

100.0

2,207

9.0

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Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019(2)

Explanation on financial position
Total assets at the end of the nine-month period ended September 30, 2019 decreased by 241 million yen compared to the endof the previous fiscal year to 39,393 million yen.
Current assets decreased by 441 million yen compared to the end of the previous fiscal year to 18,390 million yen. This was
mainly due to the 1,156 million yen decrease in cash and deposits, the 524 million yen increase in merchandise and finishedgoods and the 120 million yen increase in raw materials and supplies.
Non-current assets increased by 199 million yen compared to the end of the previous fiscal year to 21,003 million yen.
Current liabilities decreased by 1,662 million yen compared to the end of the previous fiscal year to 4,683 million yen. This was
mainly due to the 969 million yen decrease in income taxes payable, the 813 million yen decrease in accounts payable – otherand the 303 million yen increase in provision for bonuses.
Non-current liabilities decreased by 18 million yen compared to the end of the previous fiscal year to 119 million yen.
Net assets increased by 1,438 million yen compared to the end of the previous fiscal year to 34,590 million yen. This was mainly
due to the 1,545 million yen increase in retained earnings and the 131 million yen decrease in foreign currency translation
adjustment due to the appreciation of the yen.
As a result, the equity ratio changed from 83.6% at the end of the previous fiscal year to 87.8%. Net assets per share based on
the total outstanding shares as of the end of the period under review increased from 1,012.58 yen per share at the end of theprevious fiscal year to 1,056.55 yen per share.
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28 issued on February 16, 2018), etc., from the beginning of the three-month period ended March 31, 2019. Accordingly, for the
explanation on financial position, comparisons have been made with figures at the end of the previous fiscal year after
retrospectively applying the standard, etc.

(3)

Explanation on forward-looking statements including consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced
on February 13, 2019.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 20192.

Quarterly Consolidated Financial Statements and Main Notes(1)

Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year

Current Third Quarter(As of December 31, 2018)(As of September 30, 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
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
Other
Total non-current liabilities
Total liabilities-4-

9,778,129
3,875,865
3,643,382
39,6871,140,083
410,547(56,335)
18,831,359

8,621,373
3,810,922
4,167,729
57,253
1,260,807
517,290(45,211)
18,390,164

6,651,355
2,107,722
5,028,467
13,830540,072
14,341,447
987,8216,606,862
2,073,728
4,997,684
35,809572,438
14,286,523
1,129,584

4,147,992
324,909
1,049,684(48,272)
5,474,314
20,803,583
39,634,942

4,120,408
284,2111,240,883(58,381)
5,587,123
21,003,231
39,393,396

865,878
2,376,675
1,585,720
419,922
1,097,287
6,345,484

909,153
1,563,286
616,559
723,167
871,107
4,683,274

57,24380,417
137,660
6,483,145

17,525102,029
119,555
4,802,829

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019

(Thousand yen)Previous Fiscal Year

Current Third Quarter(As of December 31, 2018)(As of September 30, 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-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-5-2,000,000
200,61330,614,693(558,811)
32,256,496

2,000,000
200,742
32,160,271(561,634)
33,799,379

859,702845,284

264,024(228,425)
895,301
33,151,797
39,634,942

132,174(186,272)
791,186
34,590,566
39,393,396

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Nine Months Ended September 30, 2018 and 2019

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
Subsidy income
Other
Total non-operating income
Non-operating expenses
Share of loss of entities accounted for using equity
methodSales discounts
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
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

Nine Months Ended
September 30, 2018
(January 1, 2018 September 30, 2018)
24,444,871
8,151,086
16,293,785
11,606,568
4,687,216-6-(Thousand yen)
Nine Months Ended
September 30, 2019
(January 1, 2019 September 30, 2019)
26,651,910
9,042,312
17,609,597
12,433,817
5,175,780

4,796
31,43243,851
3,255
50,52853,666
187,530

12,40832,00812,906–44,01369,662
171,000

382

40,916

451,876
29,377
86
481,722
4,393,024

470,230
31,281
280
542,7094,804,071

229
310,341
310,570

799
–
799

–
1,255
1,255
4,702,340
1,375,290
2,443
1,377,733
3,324,606
3,324,606

3,403
11,256
14,6594,790,210
1,350,596
27,882
1,378,479
3,411,731
3,411,731

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019
Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended September 30, 2018 and 2019

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

Nine Months Ended
September 30, 2018
(January 1, 2018 September 30, 2018)
3,324,606-7-(Thousand yen)
Nine Months Ended
September 30, 2019
(January 1, 2019 September 30, 2019)
3,411,731

104,329(20,558)(12,994)
70,776
3,395,383(14,418)(131,849)
42,153(104,114)
3,307,617

3,395,383

3,307,617––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2019(3) Notes regarding quarterly consolidated financial statements(Notes regarding going concern assumption)
None(Notes in case of any significant changes in shareholders’ equity)
None(Changes in accounting policies)
With the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 30, 2018; hereinafter“Revenue Recognition Accounting Standard”) and the “Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30 issued on March 30, 2018) becoming applicable from the beginning of the fiscal yearthat begins on or after April 1, 2018, the Company has early applied the Revenue Recognition Accounting Standard, etc., fromthe beginning of the three-month period ended March 31, 2019.
When consideration arising from contracts with customers includes variable consideration, the Company includes suchvariable consideration within the transaction price to the extent that it is highly probable that a significant reversal of previously
recognized cumulative revenue will not occur when the uncertainty is subsequently resolved. Accordingly, sales rebates
previously presented as selling, general and administrative expenses are deducted from net sales and expenses related to thegoods transferred to business partners free of charge according to their sales results are added to cost of sales.
The application of the Revenue Recognition Accounting Standard, etc., is in accordance with the principle treatment as set
forth in Paragraph 84 of the Accounting Standard for Revenue Recognition, and the new accounting policy has been applied
retrospectively to all prior-period financial statements.
As a result, net sales and gross profit for the nine-month period ended September 30, 2018 decreased by 816 million yen and
1,366 million yen, respectively, compared to the figures before retrospective application. The application of the new
accounting policy had no impact on operating income, ordinary income, profit before income taxes and profit.
(Additional information)(Application of the “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28 issued on February 16, 2018), etc., from the beginning of the three-month period ended March 31, 2019. Accordingly,
deferred tax assets are presented under investments and other assets and deferred tax liabilities are presented under non-current
liabilities.
(Segment information, etc.)
The Company omits segment information, as it operates just one business segment engaged in the manufacturing and sales ofhair cosmetics.

-8-