Consolidated Financial Results for the Fiscal Year Ended December 31, 2023
[Japanese GAAP]
February 14, 2024
Tokyo Stock Exchange, Prime Market

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL https://www.milbon.com/en/
Representative:
Hidenori Sakashita, President & CEO
Inquiries:
Masahiro Murai, Managing Executive Director
Scheduled date of ordinary general meeting of shareholders: March 28, 2024
Scheduled filing date for securities report: March 28, 2024
Scheduled starting date of dividend payments: March 29, 2024
Preparation of supplementary materials on the financial results: Yes
Holding of an explanatory meeting on the financial results: Yes (For institutional investors and analysts)

TEL: +81-3-6478-6301(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the fiscal year ended December 31, 2023 (January 1, 2023 - December 31, 2023)(1) Consolidated operating results
Net sales

Operating income

Year ended December 31, 2023

Million yen
47,762%
5.6

Million yen
5,525%(26.8)

Million yen
5,586Year ended December 31, 2022

45,238

-

7,551

-

7,829

Note: Comprehensive income

Year ended December 31, 2023: 4,657 million yen [(25.5)%]
Basic earnings per share

Diluted earnings per share(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%(28.6)
4,001(28.3)

Ordinary income

9.4

5,577

9.2

Year ended December 31, 2022: 6,253 million yen [8.7%]

Return on equity (ROE)

Return on assets (ROA)

Operating income ratio

Yen

Yen

%

%

%

Year ended December 31, 2023

122.99

-

8.9

10.5

11.6

Year ended December 31, 2022

171.49

-

13.2

15.5

16.7

Note: Since the beginning of the previous fiscal year, sales discounts, previously categorized as non-operating expenses, are deducted from net sales. As a result, the Company
has determined that year-on-year comparisons of net sales and operating income with the same period of the previous year may be misleading. Accordingly, the percentage ofyear-on-year changes in net sales and operating income from the same period of the two fiscal years are not indicated in the above table. (Ordinary income and profit attributableto owners of parent remain unchanged.) If the figures of FY2021 were calculated on the same basis as FY2022, net sales and operating income would increase by 10.7% and6.6%, respectively, in FY2022. For more details, please see the FY2022 Financial Results Presentation Materials.
(2) Consolidated financial position
Total assets
Million yen
53,391

As of December 31, 2023
As of December 31, 2022
(Reference)

EquityNet assets
Million yen
45,932

52,76043,991

As of December 31, 2023: 45,932 million yen

Net assets per share

Equity ratio
%
86.0

Yen
1,411.56

83.4

1,352.52

As of December 31, 2022: 43,991 million yen(3) Consolidated cash flows
Cash flows from operating

Cash flows from investing

Cash flows from financing

Cash and cash equivalents

activities

activities

activities

at end of period

Million yen

Million yen

Million yen

Million yen

Year ended December 31, 2023

4,765

(3,109)(2,797)

11,292

Year ended December 31, 2022

5,008

(3,865)(2,578)12,258

2. Payment of dividends
Total
dividends(Annual)Annual dividends

Year ended December 31, 2022

End of 1stquarterYen-

End of 2ndquarterYen
40.00

End of 3rd
End of fiscal
quarter
year
Yen
Yen
46.00

Year ended December 31, 2023

-

40.00

-

Year ending December 31, 2024
(forecast)

-

40.00

-

Dividend
Dividends on
payout ratio equity (DOE)(Consolidated) (Consolidated)

Total
Yen
86.00

Million yen
2,797

%
50.2

%
6.6

48.00

88.00

2,863

71.6

6.4

48.00

88.00

61.6

3. Consolidated operating results forecasts for the fiscal year ending December 31, 2024 (January 1, 2024 - December 31, 2024)(Percentages show year-on-year changes.)
Net salesYear ending December 31, 2024

Million yen
50,620Operating income% Million yen
6.0
6,600

Ordinary income% Million yen
19.5
6,560

Profit attributable to
Basic earnings per shareowners of parent% Million yen
%
Yen
17.4
4,650
16.2
142.92

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation): NoneExclude: 0 companies (Company name: )New: 0 company (Company name: )(2) 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(3) 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 ofDecember 31, 2023
As ofDecember 31, 2023
Year ended
December 31, 2023

33,117,234 shares
577,107 shares
32,536,033 shares

As ofDecember 31, 2022
As ofDecember 31, 2022
Year ended
December 31, 2022

33,117,234 shares
591,511 shares
32,521,551 shares(Reference) Overview of non-consolidated financial results
Non-consolidated financial results for the fiscal year ended December 31, 2023 (January 1, 2023 - December 31, 2023)(1) Non-consolidated operating results(Percentages show year-on-year changes.)
Net sales

Operating income

Ordinary income

Year ended December 31, 2023

Million yen
42,520%
1.8

Million yen
4,701%(36.5)

Million yen
4,906%(38.4)

Year ended December 31, 2022

41,780

6.5

7,407

(0.7)

7,959

14.9

Basic earnings per share

As of December 31, 2023
As of December 31, 2022

Profit attributable to ownersof parent
Million yen%
3,233(41.6)
5,533

11.0

Diluted earnings per share

Yen
99.37
170.16

Yen

Total assets
Million yen
48,40049,508

Net assets
Million yen
41,444
41,249-(2) Non-consolidated financial position

As of December 31, 2023
As of December 31, 2022
(Reference)

EquityAs of December 31, 2023: 41,444 million yen

Net assets per share

Equity ratio
%
85.6
83.3

Yen
1,273.65
1,268.22

As of December 31, 2022: 41,249 million yen*These financial statements are not subject to the review 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.

○Accompanying Materials – Contents
1. Qualitative Information on Consolidated Results for the Current Period................................................................................

2(1)Explanation of Operating Results............................................................................................................................. ...........

2(2)Explanation of Financial Position........................................................................................................................................

3(3)Basic Policy on the Distribution of Profit and Dividends for the Current Fiscal Year and the Following Fiscal Year........

4

2. Basic Rationale for Selecting the Accounting Standards..........................................................................................................

4

3. Consolidated Financial Statements and Main Notes................................................................................................................

5(1)Consolidated Balance Sheets...............................................................................................................................................

5(2)Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income........................................

7

Consolidated Statements of Earnings.......................................................................................... ..................................

7

Consolidated Statements of Comprehensive Income....................................................................................................

8(3)Consolidated Statements of Changes in Shareholder's Equity.............................................................................................

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

11(5)Notes to the Consolidated Financial Statements..........................................................................................................

13(Notes regarding going concern assumption)....................................................................................................................

13(Significant matters that serve as the basis for preparation of consolidated financial statements)....................................

13(Segment information, etc.)..................................................................................................................... ..........................

15(Per share information)................................................................................................................................... ...................

15(Significant subsequent events).........................................................................................................................................

15

4. Other....................................................................................................... ...................................................................................

15(1)Changes in Directors and Audit & Supervisory Board Members........................................................................................

15

-3-

1.

Qualitative Information on Consolidated Results for the Current Period(1) Explanation of Operating Results(i) Overview
During this fiscal year, the Japanese economy saw a moderate recovery, spurred by the reclassification of COVID-19 asClass5, which led to increased economic activities. However, the outlook remains uncertain due to soaring energy prices driven
by geopolitical tensions in Ukraine and the Middle East, the slowdown of the Chinese economy, which had previously been akey driver of growth, and domestically, a rapid inflation rate that has outpaced wage growth.
In 2023, the second year of our Medium-Term Management Plan (2022-2026), we initiated the development of Smart Salonsdomestically. By the end of Fiscal Year 2023, we had expanded to 19 cities with 23 salons. Additionally, it was a year marked
by steady progress towards realizing our Beauty Platform Concept, which includes the launch of a new product, ALANOUS, in
the Beauty Health Care Category for the domestic market. As for overseas, despite China experiencing an economic slowdown,
growth was driven by the United States, South Korea, and Southeast Asia.
Consolidated net sales for the fiscal year were 47,762 million yen (a 5.6% increase year-on-year). In the domestic hair coloringmarket, sales declined due to the impact of the plateau in color demand, which had been growing during the COVID-19 pandemic.
However, our premium haircare brands, Aujua and Global Milbon, maintained steady sales. In terms of profit, the gross profit
margin declined due to inventory write-downs of hairdryers introduced in Japan and the impact of persistently high raw material
prices. Regarding SG&A expenses, expenses increased mainly due to the resumption of activities, including increased promotion
expenses and market development expenses resulting from active holding of large-scale events and seminars both in Japan andoverseas. Travel expenses increased due to an increase in domestic and overseas business trips. As a result, operating income
was 5,525 million yen (a 26.8% decrease year-on-year), ordinary income was 5,586 million yen (a 28.6% decrease year-on-year),and profit attributable to owners of the parent was 4,001 million yen (a 28.3% decrease 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](Unit: Million yen)Previous fiscal year

Current fiscal year

Product category
AmountRatio (%)

AmountRatio (%)

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

Hair care products

26,31258.2

28,355

59.4

2,042

7.8

Hair coloring products

16,631

36.7

16,953

35.5

322

1.9

Permanent wave products

1,450

3.2

1,463

3.0

13

1.0

Cosmetic products

572

1.3

571

1.2

(0)

(0.1)

Other

272

0.6

418

0.9

145

53.6

45,238100.0

47,762

100.0

2,524

5.6

Total

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Previous fiscal year
AmountCurrent fiscal year

Ratio (%)

AmountRatio (%)

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

Domestic sales

35,33478.1

36,502

76.4

1,168

3.3

Overseas sales

9,904

21.9

11,260

23.6

1,355

13.7

Total

45,238100.0

47,762

100.0

2,524

5.6

-4-

(ii)

Outlook for fiscal year 2024

As for the outlook for the economic environment, although the inflation rate has been stabilizing, global inflationary pressuresremain, and uncertainty is expected to continue, including geopolitical risks such as the prolonged problems in Ukraine and the
Middle East, and downside risks to overseas economies.
Under these circumstances, we are now in the third year of our Medium-Term Management Plan (2022-2026). In the global
market, we view markets as 7 regions (Japan, South Korea, Greater China, ASEAN, North America, EU, and the Middle East).
By promoting a system of local production for local consumption, we aim to minimize geopolitical risks and provide productsthat meet the values and hair types of each region.
In the domestic market, we will accelerate Smart Salon Strategy to realize the Beauty Platform Plan, which aims to create a
new style for salons. We are fully committed to aggressively promoting the expansion of Smart Salons, which expanded to 23
salons in 2023, and we aim to reach 100 salons by the end of Fiscal Year 2024. Furthermore, in the domestic hair coloringproducts market, which has seen sustained stagnation, we will propel domestic hair coloring products sales on a new growthtrajectory by proposing a unique salon-exclusive total color service for both hair and eyebrow, and promoting the proposal ofenhanced color services with high added value for mature individuals featuring our organic brand, Villa Lodola.
For the next fiscal year, the Group forecasts net sales of 50,620 million yen (a 6.0% increase year-on-year), operating incomeof 6,600 million yen (a 19.5% increase year-on-year), and ordinary income of 6,560 million yen (a 17.4% increase year-onyear), and profit attributable to owners of parent of 4,650 million yen (a 16.2% increase year-on-year).
(2)

Explanation of Financial Position(i)

Assets, liabilities and net assets
Total assets at the end of the fiscal year increased by 631 million yen from the end of the previous fiscal year to 53,391

million yen.
Current assets decreased by 520 million yen from the end of the previous fiscal year to 26,178 million yen. The main factors
for the change were a 962 million yen decrease in Cash and deposits and a 620 million yen increase in Merchandise andfinished goods.
Non-current assets increased by 1,151 million yen from the end of the previous fiscal year to 27,213 million yen. The main
reason for the change was a 541 million yen rise in Construction in progress associated with construction costs at the Human
Resources Development Center.
Current liabilities decreased by 1,428 million yen from the end of the previous fiscal year to 6,567 million yen. The main
factor for the change was a 923 million yen decrease in Income taxes payable.
Non-current liabilities increased by 119 million yen from the end of the previous fiscal year to 891 million yen.
Net assets increased by 1,940 million yen from the end of the previous fiscal year to 45,932 million yen. The main factors
for the change were increases of 1,203 million yen in Retained earnings and 607 million yen in Foreign currency translation
adjustment due to the depreciation of the yen.
As a result, the equity ratio changed from 83.4% at the end of the previous fiscal year to 86.0%. Net assets per share basedon the total number of shares issued and outstanding at the end of the fiscal year were 1,411.56 yen, compared with 1,352.52
yen at the end of the previous fiscal year.
(ii)

Cash flows

Cash and cash equivalents (hereinafter referred to as "funds") at the end of the fiscal year decreased by 966 million yen fromthe end of the previous fiscal year to 11,292 million yen.
The status of cash flows during the current fiscal year and the factors responsible are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 4,765 million yen. This was mainly due to Profit before income taxes of 5,432
million yen, Depreciation of 2,275 million yen, Share of loss of entities accounted for using equity method of 110 million yen,
an increase in inventories of 469 million yen, and Income taxes paid of 2,428 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 3,109 million yen. This was mainly due to Purchase of property, plant andequipment of 2,598 million yen, Purchase of intangible assets of 612 million yen, Payments for guarantee deposits of 179
million yen, and proceeds from cancellation of insurance reserves of 286 million yen.
(Cash flows from financing activities)
Net cash used in financing activities was 2,797 million yen. This was mainly due to dividends paid to shareholders of 2,796
million yen.

-5-

(Reference) Cash flow-related indicators
Year ended

Year ended

Year ended

Year ended

Year ended

December 31,
2019

December 31,
2020

December 31,
2021

December 31,
2022

December 31,
2023

Equity ratio

85.6

84.3

83.3

83.4

86.0

Equity ratio based on market
value (%)

484.3

495.7

384.2

352.6

225.1

Interest-bearing debt to cash
flows ratio (%)

1.7

1.6

1.7

1.5

1.6

Note: Equity ratio : Equity capital/Total assets
Equity ratio based on market value: Total market capitalization/total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debt/cash flows* All indicators were calculated using consolidated financial statements.
* Total market capitalization was calculated by multiplying the closing stock price at the end of the period by the total number ofoutstanding shares at the end of the period (excluding treasury shares).
* Cash flows were shown as an operating cash flow in the consolidated statements of cash flows.
* Interest-bearing debt refers to all debt posted in the balance sheets upon which interest is paid. The amount of interest paid in
the consolidated statements of cash flows was treated as an interest payment in the calculations above.
* Interest-coverage ratio is not shown due to the fact that there were no interest payments.
(3)

Basic policy on the distribution of profit and dividends for the fiscal year under review and the following fiscal year
The Group places high importance on returning profits to shareholders and has a policy of paying dividends in accordance with
operating results. We also maintain internal reserves to improve earnings in the future. In addition, we have set a target payout
ratio of 50%. The Board of Directors determines interim dividends, while year-end dividends are determined by the General
Shareholders' Meeting. We aim to pay dividends twice each fiscal year
For the current fiscal year, we have decided to pay a year-end dividend of 48 yen per share, based on a comprehensive
consideration of factors including our financial position and profit level. As a result, the total annual dividend per share will be
88 yen per share, an increase of 2 yen from the previous fiscal year, including the interim dividend of 40 yen per share alreadypaid.
Looking ahead, for the next fiscal year, we plan to pay an annual dividend of 88 yen per share, which is the same amount as forthe current fiscal year.

2.

Basic Rationale for Selecting the Accounting Standards
The Milbon Group currently prepares the consolidated financial statements according to the generally accepted accounting
standards in Japan (Japanese GAAP), taking into consideration the comparability of consolidated financial statements over different
periods and among other companies.
With regard to adoption of International Financial Reporting Standards (IFRS), it is the Group's policy to respond to this issue
appropriately based on consideration of various domestic and international circumstances.

-6-

3.

Consolidated Financial Statements and Main Notes(1)

Consolidated Balance Sheets(Thousand yen)Previous fiscal year
As of December 31, 2022

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
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress
Other
Accumulated depreciation
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-7-

Current fiscal year
As of December 31, 2023

12,300,053
5,255,686
6,319,121
39,927
1,999,103
784,924(185)
26,698,631

11,337,201
5,345,669
6,939,156
36,8382,072,829
446,775
26,178,470

15,437,304(6,423,189)
9,014,115
9,088,926(6,006,867)
3,082,059
6,452,228
453,7543,331,141(2,513,398)
817,742
19,819,899
1,902,217

16,206,867(6,946,103)
9,260,764
9,889,933(6,575,887)
3,314,046
6,461,904
995,352
3,850,747(2,883,355)
967,392
20,999,461
1,930,204

1,775,734
7,425
56,180826,583
1,719,802(46,087)
4,339,639
26,061,755
52,760,387

1,312,251
1,120
511,056
909,850
1,595,544(46,087)
4,283,736
27,213,401
53,391,872

(Thousand yen)Previous fiscal year
As of December 31, 2022
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
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
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-8-

Current fiscal year
As of December 31, 2023

1,133,259
4,022,247
1,334,496
591,582
914,619
7,996,205

931,247
3,665,522
410,988581,530
978,650
6,567,940

10,628610
643,317
117,875
772,4318,768,636

14,620277
734,815
141,919
891,633
7,459,574

2,000,000
274,537
41,875,487(2,030,911)
42,119,113

2,000,000
306,957
43,079,323(1,982,161)
43,404,119

214,928
1,766,040(108,331)
1,872,637
43,991,750
52,760,387(106,728)
2,373,812
261,0942,528,178
45,932,297
53,391,872

(2)Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Consolidated Statements of Earnings(Thousand yen)Previous fiscal year
(January 1, 2022
- December 31, 2022)

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
Subsidy income
Surrender value of insurance
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
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
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Compensation for damages
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent-9-

Current fiscal year
(January 1, 2023
- December 31, 2023)

45,238,377
15,729,160
29,509,216
21,957,505
7,551,711

47,762,432
18,237,124
29,525,308
24,000,097
5,525,210

21,212
15,9803,890
101,506
152,574
104,327
399,491

20,044
17,247
3,604
20,94986,35938,247
186,454

112,392

110,704

9,530
121,922
7,829,279

6,375
7,934
125,014
5,586,650

949
448
1,397

1
1

7,060
7,060
7,823,617
2,387,643(141,300)
2,246,342
5,577,274
5,577,274

39,568115,000
154,568
5,432,083
1,533,874(103,419)
1,430,455
4,001,627
4,001,627

Consolidated Statements of Comprehensive Income(Thousand yen)Previous fiscal year
(January 1, 2022
-o December 31, 2022)
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- 10 -

Current fiscal year
(January 1, 2023
- December 31, 2023)

5,577,274

4,001,627

114,665(68,821)915,502(285,315)
676,032
6,253,306(321,656)
607,772
369,425
655,541
4,657,169

6,253,306

4,657,169

-

-

(3)

Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (January 1, 2022 - December 31, 2022)(Thousand yen)
Shareholders' equity
Capital stock

Balance at beginning of
periodChanges of items during
periodDividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of period

Capital surplus

2,000,000

246,299

38,834,669

Total shareholders'equity(2,080,393)
39,000,575(2,536,456)(2,536,456)

5,577,274

5,577,274

Retained earnings

Treasury shares

28,237(1,350)(1,350)50,832

79,069-28,2373,040,818

49,482

3,118,537

2,000,000

274,537

41,875,487(2,030,911)

42,119,113

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of
periodChanges of items during
period100,262

Total
Deferred gains Foreign currency Remeasurements accumulated Total net assets
or losses ontranslationof definedotherhedgesadjustment
benefit plans comprehensive
income68,821
850,537
176,984
1,196,605
40,197,181

Dividends of surplus(2,536,456)

Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of period

5,577,274(1,350)79,069114,665(68,821)915,502(285,315)

676,032

676,032

114,665(68,821)915,502(285,315)

676,032

3,794,569

214,928-

1,766,040(108,331)

1,872,637

43,991,750- 11 -

Current fiscal year (from January 1, 2023 - December 31, 2023)(Thousand yen)
Shareholders' equity
Capital stock
Balance at beginning of
periodChanges of items during
periodCapital surplus

2,000,000

274,537

Retained earnings

Treasury shares

Total shareholders'equity41,875,487(2,030,911)

42,119,113

Dividends of surplus(2,797,792)(2,797,792)

Profit attributable toowners of parent

4,001,627

4,001,627

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period-

32,420

Balance at end of period

2,000,000

306,957(2,148)(2,148)50,89883,3191,203,835

48,7491,285,005

43,079,323(1,982,161)

43,404,119

32,420

Accumulated other comprehensive income

Balance at beginning of
periodChanges of items during
periodValuationdifference on
available-forsale securities
214,928

Deferred gains Foreign currency Remeasurements Total net assets
or losses ontranslationof defined
hedgesadjustment
benefit plans
1,766,040(108,331)

1,872,637

43,991,750

Dividends of surplus(2,797,792)

Profit attributable toowners of parent

4,001,627

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period(2,148)

Balance at end of period

83,319(321,656)

607,772

369,425

655,541655,541(321,656)

607,772

369,425

655,541

1,940,547(106,728)

2,373,812

261,0942,528,178

45,932,297- 12 -

(4)Consolidated Statements of Cash Flows(Thousand yen)Previous fiscal year
(January 1, 2022
- December 31, 2022)

Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
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 investment securities
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Loss on compensation for damages
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventory
Increase (decrease) in notes and accounts payable trade
Surrender value of insurance
Other
SubtotalInterest and dividend income received
Cash compensation for damage paid
Income taxes paid
Cash flows from 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
Proceeds from redemption of investment securities
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Proceeds from cancellation of insurance funds
Other
Cash flows from investing activities
Net cash provided by (used in) financing activities
Increase (decrease) in notes and short-term borrowings- tradeNet decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities- 13 -

Current fiscal year
(January 1, 2023
- December 31, 2023)

7,823,617
2,080,891(5,856)
77,241(28,757)
1,951(37,193)5,432,083
2,275,209(197)(12,545)
77,4373,135(37,292)

112,392

110,704(30,521)
(448)
(949)
7,060
-

(48,215)(1)
39,568115,000(546,020)(63,545)(2,148,445)(469,541)

108,264(251,803)

16,726
7,429,954
34,812(2,456,758)
5,008,008(86,359)
188,547
7,272,184
36,613(115,000)(2,428,110)
4,765,687(3,061,820)
1,003(761,154)(73,500)
3,454
200,000
546(285,452)
115,978(4,277)(3,865,221)(2,598,241)
1(612,051)(75,200)
5,661(179,032)
101,153
286,368(38,350)(3,109,692)(42,631)-(1,243)(2,534,587)(2,578,462)(1,669)(2,796,096)(2,797,765)

(Thousand yen)Previous fiscal year
(January 1, 2022
- December 31, 2022)
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- 14 -

Current fiscal year
(January 1, 2023
- December 31, 2023)

381,279

175,610(1,054,396)
13,312,634
12,258,237(966,159)
12,258,237
11,292,078

(5)Notes to the Consolidated Financial Statements(Notes regarding going concern assumption)
Not applicable.

- 15 -

(Significant matters that serve as the basis for preparation of consolidated financial statements)
1 Matters regarding the scope of consolidation
Number of consolidated subsidiaries: 9
Names of consolidated subsidiaries
MILBON USA, INC.
Milbon Trading (Shanghai) Co.,Ltd.
Milbon Korea Co., Ltd.
MILBON (THAILAND) CO., LTD.
MILBON MALAYSIA SDN. BHD.
MILBON VIETNAM CO., LTD.
MILBON SINGAPORE PTE. LTD.
Milbon (Zhejiang) Cosmetics Co., Ltd.
Milbon Europe GmbH
2 Matters regarding application of equity method
Number of associates accounted for by the equity method: 1
Names of companies, etc.
KOSÉ Milbon Cosmetics Co., Ltd.
3 Matters regarding the fiscal year, etc. of consolidated subsidiaries
The account closing date of consolidated subsidiaries are the same as the consolidated account closing date.
4 Matters regarding accounting policies(1) Valuation standards and methods for significant assets(i) Securities
Available-for-sale securities
Other than shares, etc. without market priceStated at market value (unrealized gains and losses are reported as a separate component of net assets, and cost of
sales is calculated by the moving-average method)
Stocks, etc. without market priceStated at cost using the moving-average method(ii) Inventories
MerchandiseStated primarily at cost using the weighted average method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)
Finished goods and work in process
Stated primarily at cost using the weighted average method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)
Raw materials
Stated primarily at cost using the weighted average method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)
Supplies
Stated primarily at cost using the last-purchase-price method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)(2)

Depreciation and amortization methods for important depreciable assets(i) Property, plant and equipment
They are depreciated using the straight-line method.
Estimated useful lives of major asset items are as follows:
Buildings and structures:
2 to 50 years
Machinery, equipment and vehicles:(ii) Intangible assets

2 to 17 years

They are depreciated using the straight-line method.
Software for internal use is amortized using the straight-line method over the estimated period of internal use (2 to 5

- 16 -

years).
(3) Accounting standards for significant allowances(i) Allowance for doubtful accounts
To prepare for losses arising from uncollectible receivables, the Company and its overseas consolidated subsidiaries
record an allowance for doubtful accounts at an estimated uncollectible amount based on the historical rate of credit losses
with respect to general receivables, and in consideration of individual collectability with respect to doubtful accounts andother specific receivables.
(ii) Provision for bonuses
To provide for payment of bonuses to employees (including those for employees also serving as officers), the Company
and its overseas consolidated subsidiaries record a provision for bonuses based on the estimated payment amount.
(4) Accounting method for retirement benefits(i) Method of attributing expected retirement benefits to periods
In calculating retirement benefit obligations, expected retirement benefits are attributed to the period up to the end of thecurrent fiscal year based on the benefit formula basis.
(ii) Method of amortizing actuarial differences and past service costs
Actuarial gains and losses are amortized using the straight-line method over a certain number of years (5 years) within the
average remaining years of service of the eligible employees at the time of occurrence, starting from the fiscal year
following the occurrence.
Prior service cost is amortized using the straight-line method over a certain number of years (5 years) within the averageremaining years of service of the eligible employees at the time of occurrence. Adoption of simplified method in small
companies(iii)Adoption of a simplified method in small companies, etc.
Certain overseas consolidated subsidiaries apply a simplified method to calculate net defined benefit liability andretirement benefit expenses based on the method where the amount of retirement benefits to be paid for voluntary
retirement at the end of the fiscal year represents the amount of retirement benefit obligations.
(5) Accounting standards for significant revenue and expenses
The principal performance obligations relating to revenue from contracts with customers of the Company, as well as thestandard point at which such obligations are satisfied (i.e., the point at which revenue is recognized) are explained as follows.
The Group is engaged in the manufacturing and sale of cosmetic products. In terms of the sale of such goods or products,
revenue is recognized upon delivery of the goods or products to customers. However, revenue is recognized at the time of
shipment if the period from the time of shipment to the point at which control of the goods or products is transferred to thecustomer is the standard period.
Revenue is measured by the amount of consideration promised in the contract with the customer, less any applicable rebates
and returns.
The transaction consideration is typically received within one month of the fulfillment of the performance obligation and does
not contain any significant financial elements.
.
(6) Translation standards of significant assets and liabilities denominated in foreign currencies into Japanese yen
Foreign currency denominated monetary receivables and payables are translated into Japanese yen at the spot exchange rate on
the consolidated closing date, and foreign exchange gains and losses from translation are recognized as profit or loss. The assets
and liabilities of overseas consolidated subsidiaries are translated into Japanese yen at the spot exchange rate on the local
account closing dates of overseas consolidated subsidiaries, while revenue and expenses are translated into Japanese yen at the
average exchange rate for the period, and foreign exchange gains and losses from translation are recorded in foreign currencytranslation adjustment under net assets.
(7)

Scope of funds in the consolidated statements of cash flows
Funds (cash and cash equivalents) in the consolidated statements of cash flows comprise cash on hand, deposits available forwithdrawal as needed and short-term investments due for redemption within three months from the date of acquisition, which
are easily cashable and are subject to minimal risk of fluctuation in value.

- 17 -

(Segment information, etc.)
Segment information
This information is omitted since the Group has a single segment of manufacture and sales of cosmetic products.
(Per share information)
Previous fiscal year
(January 1, 2022
- December 31, 2022)
Net assets per share (yen)Basic earnings per share (yen)Current fiscal year
(January 1, 2023
- December 31, 2023)

1,352.52

1,411.56

171.49122.99(Notes) 1. Diluted earnings per share are not presented because there are no dilutive shares.
2. The basis for calculating basic earnings per share is as follows:
Previous fiscal year
(January 1, 2022
- December 31, 2022)
Profit attributable to owners of parent (thousand yen)Amount not attributable to common shareholders(thousand yen)
Profit attributable to owners of parent related to commonsharesCurrent fiscal year
(January 1, 2023
- December 31, 2023)

5,577,274

4,001,627--

5,577,274

4,001,627

32,521,551

32,536,033

Amount (thousand yen)
Average number of outstanding shares of common stockduring the period (shares)(Significant subsequent events)
Not applicable.

4.

Other

(1)

Changes in Directors(i) Change in Representatives
For changes in representatives, please refer to the "Notice Concerning Changes of Representative Directors" announced on
October 13, 2023.
(ii) Changes in Other Directors (Scheduled for March 28, 2024)
1. Retiring Directors
Yasufumi Takeda, Board Director
Shoichiro Takahata, Outside Board Director
2. Retiring Audit & Supervisory Board Member
Keisuke Endo, Outside Audit & Supervisory Board Member
3. Candidate for New Director
Harumichi Okazaki, Board Director (Director of International FP Sales and FP Headquarters and in charge of
Education Planning)
Hiroyuki Ogata, Board Director (Director of Corporate Strategy Headquarters and in charge of KMC)
Tomomi Fukumoto, Outside Director (currently Senior General Manager of Suntory Foundation for the Arts)
4. Candidate for new Auditor
Takashi Hirano, Outside Audit & Supervisory Board Member (currently an attorney at law)

- 18 -