Consolidated Financial Results for the Fiscal Year Ended December 31, 2022
[Japanese GAAP]
February 14, 2023
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, Prime Market
Code No.:4919
URL https://www.milbon.com/en/
Representative:
Ryuji Sato, Representative Director, President & CEO
Inquiries:
Masahiro Murai, Managing Executive Director
TEL: +81-3-6478-6301
Scheduled date of ordinary general meeting of shareholders: March 29, 2023
Scheduled date to submit securities report: March 29, 2023
Scheduled starting date of dividend payments: March 30, 2023
Preparation of supplementary materials on the Consolidated Financial Results: Yes
Holding of an explanatory meeting on the Consolidated Financial Results: Yes (For institutional investors and analysts)(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the fiscal year ended December 31, 2022 (January 1, 2022 - December 31, 2022)(1) Consolidated operating results
Net salesYear ended December 31, 2022

Operating income

Million yen
45,238%-Million yen
7,551

%
-

Million yen
7,829

41,582

16.4

7,817

22.3

7,158

Year ended December 31, 2021

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
9.4
5,577
9.2

Ordinary income

23.6

5,109

21.5

Note: Comprehensive income

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

Year ended December 31, 2021: 5,754 million yen [52.4%]

Year ended December 31, 2022

Basic earnings per share Diluted earnings per share
Yen
Yen
171.49-Return on assets (ROA)%
15.5

Operating income ratio
%
16.7

15.7

18.8

Year ended December 31, 2021

157.17(Reference) : Equity in earnings (losses) of affiliates

Return on equity (ROE)
%
13.2

-

13.4

Year ended December 31, 2022: (112) million yen

Year ended December 31, 2021: (151) million yen

Note: From the beginning of the fiscal year, sales discounts, previously included 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 may be misleading. Accordingly, the percentage of year-on-year changes in net sales andoperating income are not indicated in the above table. (Ordinary income and profit attributable to owners of parent remain unchanged.) If the figures for the previous fiscal
year were on the same basis as for the current fiscal year, net sales for the fiscal year would increase 10.7%, and operating income would increase 6.6%. Please refer to the
Financial Results Presentation Materials for details.
(2) Consolidated financial position
Total assets
Million yen
52,760

As of December 31, 2022
As of December 31, 2021
(Reference)

EquityNet assets
Million yen
43,991

48,23840,197

As of December 31, 2022: 43,991 million yen

Net assets per share

Equity ratio
%
83.4

Yen
1,352.52

83.3

1,236.41

As of December 31, 2021: 40,197 million yen(3) Consolidated cash flows

Year ended December 31, 2022

Cash flows from operating
activities
Million yen
5,008

Cash flows from investing
activities
Million yen(3,865)

Cash flows from financing
activities
Million yen(2,578)Cash and cash equivalents
at end of period
Million yen
12,258Year ended December 31, 2021

6,636

(3,995)(1,919)13,312

Total dividends(Annual)Dividend
Dividends on
payout ratio
equity (DOE)(Consolidated) (Consolidated)

2. Payment of dividends
Annual dividends

Year ended December 31, 2021

End of 1stquarterYen-

End of 2ndquarterYen
30.00

End of 3rdquarter
Yen-

Year ended December 31, 2022

-

40.00

-

Year ending December 31, 2023
(forecast)

-

40.00

-

End of fiscal
year
Yen
38.00

Total
Yen
68.00

Million yen
2,210

%
43.3

%
5.8

46.00

86.00

2,797

50.2

6.6

48.00

88.00

49.3

3. Consolidated operating forecasts for the fiscal year ending December 31, 2023 (January 1, 2023 - December 31, 2023)(Percentages show year-on-year changes.)
Net salesYear ending December 31, 2023

Million yen
49,200Operating income% Million yen
8.8
8,300

Ordinary income% Million yen
9.9
8,250

Profit attributable to
Basic earnings per shareowners of parent% Million yen
%
Yen
5.4
5,800
4.0
178.34

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation): Yes
Exclude: 0 companies (Company name: )New: 1 company (Company name: Milbon Europe GmbH )(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
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: Yes2) 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 ofDecember 31, 2022
As ofDecember 31, 2022
Year ended
December 31, 2022

33,117,234 shares
591,511 shares
32,521,551 shares

As ofDecember 31, 2021
As ofDecember 31, 2021
Year ended
December 31, 2021

33,117,234 shares
606,080 shares
32,508,933 shares*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(4)Business Risks................................................................................................................................... ....................................

5

2.Outline of the Milbon Group ………………………………………………………………………………………………….

7

3.Basic Rationale for Selecting the Accounting Standards ……………………………………………………………………...

8

4.Consolidated Financial Statements and Main Notes..................................................................................................................

9(1)Consolidated Balance Sheets................................................................................................................................................

9(2)Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income.........................................

11

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

11

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

12(3)Consolidated Statements of Changes in Shareholder's Equity..............................................................................................

13(4)Consolidated Statements of Cash Flows..................................................................................... ..........................................

15(5)Notes Regarding Consolidated Financial Statements...........................................................................................................

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

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

17(Changes in accounting policies) ………………………………………………………………………………………..

19(Segment information, etc.)………………………………………………………………………………………….......

19(Per share information) ………………………………………………………………………………………………….

19(Significant subsequent events).................................................................................................................................. .......

19

-1-

1.

Qualitative Information on Consolidated Results for the Current Period
Explanation of Operating Results
Overview(1)①

Throughout the fiscal year, the Japanese economy exhibited moderate recovery, despite the impact of factors such as risingresource prices. This was fueled by the progress made in balancing COVID-19 restrictions and economic activities. However,
the outlook remains highly uncertain due to various trends, such as rising prices, the slowdown of overseas economies, and the
spread of infectious diseases both in Japan and abroad.
Despite fluctuations in the number of COVID-19 patients, the impact on the salon market as a whole was minimal. Against
this backdrop, sales by category saw a significant increase in hair coloring products, particularly in bleach-on-color and otherdouble-process coloring, which became increasingly popular among a wide range of age groups, especially young people.
Sales of hair care products, especially premium brands, also grew strongly, reflecting the importance placed on maintaining thebeauty of hair with hair colors.
Overseas markets saw growth in net sales, mainly due to strong performance in South Korea and the United States, despite
the economic stagnation caused by China's Zero-COVID policy and the market turmoil resulting from the sharp increase in
COVID-19 cases at the end of 2022.
As a result, consolidated net sales for the fiscal year amounted to 45,238 million yen, with operating income reaching 7,551
million yen, ordinary income 7,829 million yen (up 9.4% YoY), and profit attributable to owners of the parent 5,577 million
yen (up 9.2% YoY).
Note: Effective from the beginning of the current fiscal year, sales discounts, which were previously non-operating expenses,
are deducted from net sales. As a result, the Company has determined that year-on-year comparisons of net sales andoperating income may be misleading. Accordingly, the percentage of year-on-year changes in net sales and operating
income are not indicated. (Ordinary income and profit attributable to owners of parent remain unchanged.) If theprevious fiscal year's figures were calculated using the same method as the current fiscal year, net sales and operating
income would have increased by 10.7% and 6.6%, respectively, in this fiscal year. Please refer to the Financial Results
Presentation Materials for details.
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

24,46658.8

26,312

58.2--

Hair coloring products

14,813

35.6

16,631

36.7--

Permanent wave products

1,449

3.5

1,450

3.2

-

-

Cosmetic products

579

1.4

572

1.3

-

-

Other

273

0.7

272

0.6

-

-

41,582100.0

45,238

100.0

-

-

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

33,64380.9

35,334

78.1--

Overseas sales

7,938

19.1

9,904

21.9

-

-

Total

41,582100.0

45,238

100.0

-

-

Note: : Effective from the beginning of the current fiscal year, sales discounts, which were previously non-operating expenses, arededucted from net sales. As a result, the Company has determined that year-on-year comparisons of net sales and operating
income may be misleading. Accordingly, the percentage of year-on-year changes in net sales and operating income are not-2-

indicated. Please refer to the Financial Results Presentation Materials for details on the calculation of the figures for theprevious fiscal year using the same method as for the current fiscal year.
Outlook for fiscal year 2023
The outlook for the economic environment is uncertain due to the prolonged situation in Ukraine and the impact of rising②energy costs and high prices, although a pick-up is expected, mainly in consumption activities, due to developments in socialand economic activities and the effects of various policies.
Under these circumstances, we are proceeding with a medium-term management plan (2022-2026). In the global market, we
will promote a global strategy that is conscious of the seven regions. In the domestic market, we will promote the 2 major
strategies of "Smart Salon Strategy" and "Beauty Life Care Strategy" in order to realize the "Beauty Platform Plan," which is areformation of the ideal form of salons. At the same time, we will continue to promote initiatives aimed at realizing the Five
Key Challenges of our Sustainability Commitment and work to resolve social issues.
For the next fiscal year, the Group forecasts Net sales of 49.2 billion yen, up 8.8% year on year, Operating income of 8.3
billion yen, up 9.9%, and Ordinary income of 8.25 billion yen, up 5.4%, and Profit attributable to owners of parent of 5.8
billion yen, up 4.0%.
Explanation of Financial Position(2)

Assets, liabilities and net assets
Total assets at the end of the fiscal year increased by 4,521 million yen from the end of the previous fiscal year to 52,760①

million yen.
Current assets increased by 1,797 million yen from the end of the previous fiscal year to 26,698 million yen. The main
factors for the change were decreases of 1,050 million yen in Cash and deposits, and increases of 582 million yen in Notes andaccounts receivable - trade, 1,781 million yen in Merchandise and finished goods, and 638 million yen in Raw materials andsupplies.
Non-current assets increased by 2,724 million yen from the end of the previous fiscal year to 26,061 million yen. This was
mainly due to an increase in Land of 1,457 million yen associated with the purchase of land for the Training Center.
Current liabilities increased by 685 million yen from the end of the previous fiscal year to 7,996 million yen. The main
factor for the change was an increase of 526 million yen in Accounts payable - other.
Non-current liabilities increased by 41 million yen from the end of the previous fiscal year to 772 million yen.
Net assets increased by 3,794 million yen from the end of the previous fiscal year to 43,991 million yen. The main factors
for the change were increases of 3,040 million yen in Retained earnings and 915 million yen in Foreign currency translation
adjustment due to the depreciation of the yen.
As a result, the equity ratio changed from 83.3% at the end of the previous fiscal year to 83.4%. Net assets per share basedon the total number of shares outstanding at the end of the period were 1,352.52 yen, compared with 1,236.41 yen at the end of
the previous fiscal year.
Cash flows②

Cash and cash equivalents (hereinafter, "funds") at the end of the current fiscal year decreased by 1,054 million yen from theend of the previous fiscal year to 12,258 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 5,008 million yen. This was mainly due to Profit before income taxes of 7,823
million yen, Depreciation of 2,080 million yen, Share of loss of entities accounted for using equity method of 112 million yen,an Increase in notes and accounts receivable-trade of 546 million yen, an Increase in inventories of 2,148 million yen, andIncome taxes paid of 2,456 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 3,865 million yen. This was mainly due to Purchase of property, plant andequipment of 3,061 million yen and Purchase of intangible assets of 761 million yen, which were Proceeds from redemption of
investment securities of 200 million yen and Payments for guarantee deposits of 285 million yen.
(Cash flows from financing activities)
Net cash used in financing activities was 2,578 million yen. This was mainly due to Cash dividends paid of 2,534 million
yen.

-3-

(Reference) Cash flow-related indicators
Year ended

Year ended

Year ended

Year ended

Year ended

December 31,
2018

December 31,
2019

December 31,
2020

December 31,
2021

December 31,
2022

Equity ratio

83.6

85.6

84.3

83.3

83.4

Equity ratio based on market
value (%)

369.2

484.3

495.7

384.2

352.6

Interest-bearing debt to cash
flows ratio (%)

1.2

1.7

1.6

1.7

1.5

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 numberof outstanding 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 Current Fiscal Year and the Following Fiscal Year
The Group places high importance on returning profits to shareholders and has a policy of paying dividends in accordancewith 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 theGeneral 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 46 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
86 yen per share, an increase of 18 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 an increase of 2 yenfrom the current fiscal year.

-4-

(4)

Business Risks
The Group defines "risks" as matters that have a significant negative impact on the realization of its management philosophy
and business continuity, and has established a basic risk management policy to reduce the likelihood of this occurring and toprevent the expansion of damage in the event that a risk materializes and a crisis occurs. The Group is working to develop andimprove its risk management promotion system and framework.
Based on this policy, each division and subsidiary reviews the "List of Risk Matters", which summarizes the risks that may
arise in the Group. In addition, the Group identifies and responds to risks arising from the conduct of business and reports themon a quarterly basis to the Management Meeting, which is composed of the Internal Board Directors, the Standing Audit &Supervisory Board Member and the Executive Officers.
In addition, the Group has established the Risk Management Committee, which is chaired by the President and CEO andcomposed of the Internal Board Directors, the Standing Audit & Supervisory Board Member and Executive Officers. This
committee identifies " company-wide risks", i.e. risks that should be addressed on a company-wide basis, taking into accountthe significance and priority of the risks surrounding the Group, the likelihood and timing of the materialization of risks, thelikelihood and impact of impeding the achievement of the medium-term management plan, etc., and appoints a person in chargeof each company-wide risk from among the members of the Risk Management Committee to implement countermeasures on acompany-wide basis. The Risk Management Committee reports to the Board of Directors twice a year on the progress made in
responding to company-wide risks, and the Committee is subject to the supervision and control of the Board of Directors.
Among the major risks that may affect the Group's operating results, share price, financial position, etc., the following are
the Group-wide risks corresponding to this consolidated fiscal year. However, there are risks other than those described abovethat may affect investors' judgment.
The forward-looking statements in the text are based on our judgment as of the end of the current fiscal year.
Risk

Risks Related to Confidential
Information Management

The Group possesses important
information, such as business-related

Details of Risks

Main Initiatives
The Group strives to maintain credibility
by, for example, responding quickly to thetransaction information and confidential
information, through its business activities.

occurrence of information leaks and otherrisks and making public announcements

Unauthorized use of such information by
third parties due to theft or loss, violations

when necessary.
In the current fiscal year, we haveof laws and regulations, and other
unforeseen circumstances could result in

reviewed and developed internal
regulations and clarified internal rules on

incidents such as the disposal or corruptionof important data, information leakage or

the handling of confidential information.

loss, or system failure, which could have amaterial impact on the Group's operating
results and other matters.

Risks Related to the Governanceof Overseas Subsidiaries

The Group's inadequate development of

The Group collects information on the

the Group and governance system, such as
the formulation of Group strategies and thelaws and regulations of each country inwhich our overseas subsidiaries aremonitoring and supervision of Group
companies, and the failure to fully

expanding, identifies issues that need to beaddressed in order to advance our business,demonstrate the effects of the managementof Group companies, could have a materialand cooperates and shares this information
with our subsidiaries as necessary.

impact on the Group's operating results
and other factors.

In the current fiscal year, we haveestablished a system in which the parent
company regularly identifies issues
specific to each subsidiary to ensuresmooth information exchange between theparent company and its subsidiaries.

-5-

Risks Related to Appropriate
Information Dissemination to
Consumers

The Group strives to earn the trust ofcustomers and consumers by complying

The Group strives to maintain the trustof the public by responding promptly towith various laws and regulations,developing and providing safe and high-the occurrence of inappropriate
information dissemination and other risks,quality products and services that meet theneeds of customers and consumers, andand making public announcements whennecessary.

providing accurate information that
customers can use safely and withIn the current fiscal year, the Company
has strengthened internal training andconfidence. However, if inappropriate
expressions or inaccurate information arerevised its system of prior review as an
initiative to prevent inappropriate

disseminated in the Group's
advertisements, etc., it may damage theexpressions in the use of advertising andsocial networking sites.

Group's reputation and materially affect
the Group's operating results, etc.
If a natural disaster such as a major
earthquake were to occur, or if unforeseen

We have formulated a BusinessContinuity Plan (BCP) aimed at quickly

circumstances were to cause a business
continuity crisis, the Group's operating

restoring production and logistics
operations in the event of a natural disaster

Risks Related to Large-Scale

results could be materially affected by suchfactors as the shutdown of the Group's

such as a major earthquake or a business
continuity crisis due to unforeseen

Earthquakes and BusinessContinuity

factory, research institutes or offices, theloss of the Group's human resources,

circumstances, and we regularly review theplan.

delays in the production and shipment ofour products, delays in the development ofIn the current fiscal year, the Production
Headquarters reviewed the BCP for

new products, and a decline in productsales due to our inability to provide our

production and logistics and improved thecontent to be effective in the event of an

products to salons.

emergency.

-6-

2.

Outline of the Milbon Group

Company Name

Location

Capital stock or capital
contribution

United States
New York

USD 2 million

Main business

Share of voting
rightsRelationship with the Company
percentage(Consolidated subsidiary)
MILBON USA, INC.
(Note 1)

Sale of hair products

100.0

Sells the Company's hairproducts in the U.S.

100.0

Sells the Company's hairproducts in China.
Two executives holdconcurrent posts at theCompany.

(Consolidated subsidiary)
Milbon Trading (Shanghai)Co., Ltd.
(Note 1)

China
Shanghai CityJPY 430 million

Sale of hair products(Consolidated subsidiary)

South Korea
Seoul City

KRW 3,000 million

Sale of hair products

100.0

Sells the Company's hairproducts in South Korea.
Two executives holdconcurrent posts at theCompany.

MILBON (THAILAND) CO., Kingdom ofLTD.
Thailand(Note 1)Rayong Pref.

THB 450 million

Manufacture andsale of hair products

100.0

Manufactures and sells theCompany's hair products in
Thailand.

Malaysia
Kuala Lumpur

MYR 1.5 million

Sale of hair products

100.0

Sells the Company's hairproducts in Malaysia.

VietnamHo Chi Minh City

VND 46.38 billion

Sale of hair products

100.0

Sells the Company's hairproducts in Vietnam.

SGD 250,000

Sale of hair products

100.0

Sells the Company's hairproducts in Singapore.

Milbon Korea Co., Ltd.
(Note 1)

(Consolidated subsidiary)(Consolidated subsidiary)
MILBON MALAYSIA SDN.
BHD.
(Consolidated subsidiary)
MILBON VIETNAM CO.,LTD.
(Note 1)
(Consolidated subsidiary)
MILBON SINGAPORE PTE.
Singapore
LTD.
(Consolidated subsidiary)
Milbon (Zhejiang) Cosmetics
Co., Ltd.
(Note 1)

China
Zhejiang

CNY 240 million

Manufacture andsale of hair products

100.0

Manufactures and sells theCompany's hair products in
China.
Two executives holdconcurrent posts at theCompany.

Germany
Dusseldorf

EUR 2 million

Sale of hair products

100.0

Sells the Company's hairproducts in Germany.

(Consolidated subsidiary)
Milbon Europe GmbH
(Note 1)

(Notes) 1.
2.

The company falls under the category of "specified subsidiary."
In addition to the companies noted above, the Group has one equity-method affiliate.

-7-

The following diagram shows the positioning of Milbon Group companies and the Group's businesses.
(Diagram of business activities)

Note: Overseas transactions differ in sales channels depending on the country.

3.

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 overdifferent periods and among other companies.
With regard to adoption of International Financial Reporting Standards (IFRS), it is the Group's policy to respond to thisissue appropriately based on consideration of various domestic and international circumstances.

-8-

Consolidated Financial Statements and Main Notes

4.

(1)

Consolidated Balance Sheets(Thousand yen)Previous fiscal year
As of December 31, 2021

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
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-9-

Current fiscal year
As of December 31, 2022

13,350,147
4,673,258
200,000
4,537,613
41,842
1,360,902
740,268(3,271)
24,900,761

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

14,865,989(5,908,390)
8,957,598
8,336,484(5,495,871)
2,840,613
4,995,014
269,654
3,101,336(2,347,955)
753,381
17,816,262
1,516,714

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

1,610,607
32,527438,540
577,944
1,393,519(48,387)
4,004,752
23,337,729
48,238,490

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

(Thousand yen)Previous fiscal year
As of December 31, 2021
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
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- 10 -

Current fiscal year
As of December 31, 2022

936,108
3,495,694
1,401,441
511,612965,353
7,310,210

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

7,753
595
608,139
114,611731,099
8,041,309

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

2,000,000
246,299
38,834,669(2,080,393)
39,000,575

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

100,262
68,821
850,537
176,984
1,196,605
40,197,181
48,238,490

214,928
1,766,040(108,331)
1,872,637
43,991,750
52,760,387

(2) Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Consolidated Statements of Comprehensive Income(Thousand yen)Previous fiscal year
Current fiscal year
(January 1, 2021 - December 31, (January 1, 2022 - December 31,
2021)
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
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Sales discounts
Share of loss of entities accounted for using equity
methodOther
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
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent- 11 -

41,582,267
14,083,338
27,498,928
19,681,230
7,817,698

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

25,87832,4093,761
53,071
54,621
59,254228,997

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

733,118-

151,399

112,392

3,736
888,255
7,158,440

9,530
121,922
7,829,279

351
19,087
19,438

949
448
1,397

517
43,95944,477
7,133,401
2,183,317(159,204)
2,024,112
5,109,288
5,109,288

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

Consolidated Statements of Comprehensive Income(Thousand yen)Previous fiscal year
Current fiscal year
(January 1, 2021 - December 31, (January 1, 2022 - December 31,
2021)
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- 12 -

5,109,288

5,577,274(305,133)
70,027
702,761
177,438
645,0935,754,382

114,665(68,821)915,502(285,315)
676,032
6,253,306

5,754,382

6,253,306

-

-

(3)

Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (January 1, 2021, - December 31, 2021)(Thousand yen)
Shareholders' equity

Balance at beginning of period
Changes of items during period

Capital stock

Capital surplus

2,000,000

Retained earnings

222,490

Treasury shares

35,643,295

Total shareholders' equity(2,108,947)

35,756,838

Dividends of surplus
Dividends of surplus(1,917,914)(1,917,914)

Profit attributable to owners ofparent5,109,288

5,109,288

Purchase of treasury shares
Disposal of treasury shares

23,809(3,244)(3,244)

31,79855,608Net changes of items other thanshareholders' equity
Total changes of items during
periodBalance at end of period-

23,8093,191,374

28,5533,243,737

2,000,000

246,299

38,834,669(2,080,393)

39,000,575

Accumulated other comprehensive income

Balance at beginning of period

Valuation difference
Total net assets onavailable-for-salesecurities

Deferred gains orlosses on hedges

Foreign currencytranslation adjustment

405,396(1,206)

147,775

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome(454)

551,511

Total net assets

36,308,349

Changes of items during period
Dividends of surplus(1,917,914)

Profit attributable to owners ofparent5,109,288

Acquisition of treasury shares(3,244)

Disposal of treasury shares

55,608Net changes of items other thanshareholders' equity(305,133)

70,027

702,761

177,438

645,093645,093

Total changes of items during
period(305,133)

70,027

702,761

177,438

645,0933,888,831

Balance at end of period

100,262

68,821

850,537

176,984

1,196,605

40,197,181- 13 -

Current fiscal year (from January 1, 2022 to December 31, 2022)(Thousand yen)
Shareholders' equity
Balance at beginning of period
Changes of items during period

Capital stock

Capital surplus

2,000,000

Retained earnings

246,299

Treasury shares

38,834,669

Total shareholders' equity(2,080,393)

39,000,575

Dividends of surplus
Dividends of surplus(2,536,456)(2,536,456)

Profit attributable to owners ofparent

5,577,274

5,577,274

Purchase of treasury shares
Disposal of treasury shares

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

79,069Net changes of items other thanshareholders' equity
Total changes of items during
periodBalance at end of period-

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

Balance at beginning of period

Valuation difference
Total net assets onavailable-for-salesecurities

Deferred gains orlosses on hedges

Foreign currencytranslation adjustment

100,262

68,821

850,537

Remeasurements of Total accumulated
defined benefit
other comprehensive
plansincome176,984

1,196,605

Total net assets

40,197,181

Changes of items during period
Dividends of surplus(2,536,456)

Profit attributable to owners ofparent

5,577,274

Acquisition of treasury shares(1,350)

Disposal of treasury shares

79,069Net changes of items other thanshareholders' equity

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

676,032

676,032

Total changes of items during
period114,665(68,821)915,502(285,315)

676,032

3,794,569

Balance at end of period

214,928-

1,766,040(108,331)

1,872,637

43,991,750- 14 -

(4)Consolidated Statements of Cash Flows(Thousand yen)Previous fiscal year
Current fiscal year
(January 1, 2021 - December 31, (January 1, 2022 - December 31,
2021)
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
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventory
Increase (decrease) in notes and accounts payable trade
Other
SubtotalInterest and dividend income received
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
Purchase of investment securities
Proceeds from redemption of investment securities
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
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- 15 -

7,133,401
1,777,323(10,741)
71,94324,6092,529(58,287)

7,823,617
2,080,891(5,856)
77,241(28,757)
1,951(37,193)

151,399

112,392

55,54024,872(351)
517(30,521)
(448)
(949)
7,060

(467,843)(546,020)(612,402)(2,148,445)

122,057

108,264

268,5888,483,156
58,805(1,905,137)
6,636,823

16,726
7,429,954
34,812(2,456,758)
5,008,008(3,827,976)
351(659,900)(148,000)
2,024(12,150)
200,000
472,646(58,435)
28,285
7,875(3,995,279)(3,061,820)
1,003(761,154)(73,500)
3,454
200,000
546(285,452)
115,978(4,277)(3,865,221)-(42,631)(3,244)(1,916,504)(1,919,749)(1,243)(2,534,587)(2,578,462)

(Thousand yen)Previous fiscal year
Current fiscal year
(January 1, 2021 - December 31, (January 1, 2022 - December 31,
2021)
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- 16 -

283,248

381,279

1,005,043
12,307,591
13,312,634(1,054,396)
13,312,634
12,258,237

(5) Notes Regarding Consolidated Financial Statements(Notes regarding going concern assumption)
Not applicable.
(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 GmbH2.

Matters regarding the 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 fiscal years, etc., of consolidated subsidiaries
The account closing dates 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
1) Held-to-maturity bonds
Stated using the amortized cost method
2) Available-for-sale securities
Other than shares, etc. without market priceStated at market value based on the market price, etc., on the account closing date (unrealized gains and losses arereported 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 first-in first-out 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 theinventory 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 theinventory write-down method based on decreased profitability)
Supplies
Stated at cost using the last-purchase-price method (the balance sheet value is calculated using the inventory writedown method based on decreased profitability)- 17 -

(2) Depreciation and amortization methods for significant depreciable assets(i) Property, plant and equipment
They are depreciated using the straight-line method.
Useful lives of principal assets are as follows:
Buildings and structures: 31 to 50 years
Machinery, equipment and vehicles: 6 to 8 years(ii)

Intangible assets
They are amortized using the straight-line method.
Software for internal use is amortized using the straight-line method over the estimated period of internal use (3 to5 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(ii)accounts and other specific receivables.
Provision for bonuses
To provide for payment of bonuses to employees (including those for employees also serving as officers), theCompany 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
the current 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
average remaining years of service of the eligible employees at the time of occurrence.

(iii) Adoption of 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 table below outlines the principal performance obligations relating to revenue stemming from contracts with customers of
the Company and its consolidated subsidiaries, as well as the standard point at which such obligations are satisfied (i.e. thepoint at which revenue is recognized).
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 performanceobligation 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 rateon 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 thelocal account closing dates of overseas consolidated subsidiaries, while revenue and expenses are translated into Japanese yen- 18 -

at the average exchange rate for the period, and foreign exchange gains and losses from translation are recorded in foreign
currency translation 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 fluctuations in value.
(8) Other significant matters for preparation of consolidated financial statements
Accounting method for consumption taxes, etc.
Consumption taxes, etc., are accounted for by the tax exclusion method.
(Changes in accounting policies)(Change in valuation method for inventories)
The Company used the first-in, first-out method for the valuation of merchandise; however, beginning in the first quarter of thecurrent fiscal year, we have changed to the cost method based on the weighted average method. This change in the valuation
method is aimed at realizing a more appropriate calculation of periodic profit and loss by smoothing out the impact offluctuations in purchase prices, triggered by an increase in overseas product purchases, etc. As the impact of this change isimmaterial, it has not been applied retrospectively.
(Application of Accounting Standard for Fair Value Measurement)
The Company has applied the "Accounting Standard for Fair Value Measurement" (ASBJ Statement No. 30, July 4, 2019;
hereinafter referred to as the "Fair Value Measurement Standard") and other standards from the beginning of the first quarter ofthe current fiscal year, and under the transitional treatment stipulated in paragraph 19 of the Fair Value Measurement Standard
and paragraph 44-2 of the "Accounting Standard for Financial Instruments" (ASBJ Statement No. 10, July 4, 2019), the new
accounting policy stipulated by the Fair Value Measurement Standard will be applied in the future.
There is no impact on the quarterly consolidated financial statements.
(Segment information, etc.)
Segment information
This information is omitted since the Group has a single segment of manufacture and sales of cosmetic products.

- 19 -

(Per share information)
Previous fiscal year
(January 1, 2021 - December 31,
2021)
Net assets per share (Yen)
Basic earnings per share (Yen)Current fiscal year
(January 1, 2022 - December 31,
2022)

1,236.41

1,352.52

157.17171.49Note: 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, 2021
- December 31, 2021)
Profit attributable to owners of parent (thousand yen)Amount not attributable to common shareholders(thousand yen)
Profit attributable to owners of parent related to common
stock (thousand yen)
Average number of shares of common stock during theperiod (shares)(Significant subsequent events)
Not applicable.

- 20 -

Current fiscal year
(January 1, 2022
- December 31, 2022)

5,109,288

5,577,274--

5,109,288

5,577,274

32,508,933

32,521,551