Milbon Co., Ltd.

FY2021 First Quarter (January 1, 2021 –March 31, 2021)
Financial Results Presentation Materials

May 11, 2021
© 2021 MILBON Co., Ltd.

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Table of Contents
P2

Consolidated Operating Results

P3

Consolidated Sales by Product Category

P14

Consolidated Statement of Earnings

P15

Consolidated Trends in Capital Expenditures and R&D Expenses

P16

Trends in Market Related Data, Trends in FPs

P17

Consolidated Net Sales in Japan and Overseas

P18

Consolidated Operating Income in Japan and Overseas

P19

Outlook of Overseas Subsidiaries

P22

Appendix

NOTE :Figures by brand are based on consolidated gross sales figures.

© 2021 MILBON Co., Ltd.

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Consolidated Operating Results (FY2021 3 months)
 Against the backdrop of heightened awareness of hair in mask lifestyles, thecompany collaborated with distributors to develop activities closely linked to salons.
As a result, consolidated sales rose 14.9% YoY.
 Operating income increased year-on-year due to the absorption of fixed costs
associated with the increase in sales and a significant decrease in activity costs suchas travel expenses and event expenses under the Emergency Declaration.

(Unit: million yen)

Increase/

FY2020% total
3 months

FY2021
Increase/
Decrease% total
3 months
Decrease ratio (%)

Net sales

7,825 100.0

8,989 100.0

Gross profit

5,233

66.9

5,950

SG&A expenses

4,202

53.7

Operating income

1,031

Ordinary income
Profit attributable toowners of parent© 2021 MILBON Co., Ltd.

1,163

14.9

66.2

716

13.7

4,316

48.0

114

2.7

13.2

1,633

18.2

602

58.4

835

10.7

1,502

16.7

666

79.8

601

7.7

1,091

12.1

489

81.4

2

2

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Sales (FY2021 3 months)
FY20203 months

FY20213 months

4,424(Unit: million yen)

Increase/
Decrease

4,975

Increase/
Decrease ratio (%)

551

12.5

• Premium brands up 25.6% YoY. In Aujua, the new Hair Care Series Repairlity
Line, which specializes in breach hair, which has increased in recent years, met
market needs. As a result, Aujua brand as a whole grew 22.6% YoY. Sales of
Global Milbon rose 35.3% YoY, driven by growth in sales abroad, particularly in
the US and China.
• In February, the company launched GRANDLINKAGE, a new product that is
expected to be a mainstay brand for professional brands. Expectations for thecreation of a contact point in the future.

* Sales growth by brand is based on consolidated gross sales.

© 2021 MILBON Co., Ltd.

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Consolidated Sales by Product Category [Hair Care Products (2)]New Products

FY2021 3 months
Aujua Hair care Series Repairlity LineA hair care series that cares for hair damage due tobleach and makes a smooth hair from inside.
(Unit: million yen)
FY2021 target

800

FY20213 months

Progress rate (%)

221

27.7

February 10, 2021 Debut

GRANDLINKAGE
A new color care brand that sustains the colors andbundles immediately after salon color.
(Unit: million yen)
FY2021 target

1,200© 2021 MILBON Co., Ltd.

FY20213 months

251

Progress rate (%)

20.9

4

February 9, 2021 Debut

4

A Premium Brand, Aujua
Strong performance of new Hair Care Series Repairlity Lines launched in February
Number of salons
FY2020 *(Unit: salons)

FY2021 *4,222

Increase/
Decrease

4,380

Increase/
Decrease ratio (%)

158

3.7

Consolidated sales (FY2021 3 months) (Unit: million yen)
FY20203 months

1,427

FY20213 months

Increase/
Decrease

Increase/
Decrease ratio (%)

9,000(Number of salons)
4,500

8,000

4,000

7,000

3,500

6,000

3,000

5,000

2,500

4,000

2,000

3,000

1,500

Hair care series

2,000

1,000

Scalp care series

1,000

500

1,749

322

22.6

Brand concept

Product range

A hair care brand that nurtures thebeauty of Japanese women’s hair,born from the climate, culture andhair characteristics of Japan

A wide-ranging line-up that suits the hair
texture of individual customers

What is Aujua?

Aging care series

Hair care that supports beauty, now andinto the future, by addressing eachindividual’s hair and skin concerns andchoosing the most appropriate item forthat time.
This is Aujua.

Trends in sales & number of salons(Million yen)・5 series
Eternal stage series (new)Climatic care series

0・14 lines02010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sales

・89 items

Number of salons* Graphs are based on individual figures.

* Calculated based on the past year's shipment results for both Japan and overseas.

© 2021 MILBON Co., Ltd.

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A Premium Brand, Global Milbon
Growth in sales fueled by an increase in the number of salons in each country
Number of salons
FY2020 *9,916(Unit: salons)

FY2021 *

11,517

Increase/
Decrease

Increase/
Decrease ratio (%)

1,601

16.1

Consolidated sales (FY2021 3 months) (Unit: million yen)
FY20203 months

578

FY20213 months

781

Increase/
Decrease

Increase/
Decrease ratio (%)

203

35.3

Brand concept

What is “Global Milbon”?

A system hair care brand thatcultivates the “unique beauty” ofeach individual, with 360° shiny hair

We conducted an in-depth analysis of theinner structure of the hair of women from
20 countries around the world, using our
proprietary CT scanning technology, anddiscovered a universal form of hairdamage. Accordingly, we developed a haircare line containing ingredients capable ofrepairing such damaged hair andincreasing the density within each strandof hair.
“Global Milbon” is a system hair careproduct for developing shiny, beautiful hairfrom the core.

Countries with salonsJapan, USA, Hong Kong, China, Thailand,
Taiwan, Turkey, Malaysia, Vietnam,
Indonesia, the Philippines, Singapore,
Germany

Trends in sales & number of salons(Number of salons)(Million yen)
3,000

9,000
8,000

2,500

7,000

2,000

6,000
5,000

1,500

4,000

1,000

3,000
2,000

500

1,000

0

0
2016

Sales

2017

2018

2019

Number of salons* Graphs are based on individual figures.

* Calculated based on the past year's shipment results for both Japan and overseas.

© 2021 MILBON Co., Ltd.

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Consolidated Sales by Product Category [Hair Coloring Products (1)]Consolidated Sales (FY2021 3 months)
FY20203 months

2,995

FY20213 months(Unit: million yen)

Increase/
Decrease

3,495

Increase/
Decrease ratio (%)

499

16.7

• Fashion color sales rose 23.6% year on year, reflecting rising demand for hairfashion in mask lifestyles and the popularity of bleach-on coloring products,
which are dyed into a different color after a breach. In particular, Ordeve
Addicthy continues to be popular, with a 33.6% YoY increase.
• On the other hand, while gray colors have increased compared to the previous
fiscal year, they have decreased compared to 2019 before the impact of COVID19, and we think that the company is continuing to struggle due to intensifiedcompetition.

© 2021 MILBON Co., Ltd.

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Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2021 3 months
Ordeve Addicthy
Erases red-tinged brown with high saturation blue.
With clear and transparent color expression, it lets
customers freely realize individual hair color designs.
(Unit: million yen)
FY20203 months

1,039© 2021 MILBON Co., Ltd.

FY20213 months

1,388

Increase/
Decrease

Increase/
Decrease ratio (%)

349

33.6

8

FY2017 Debut

8

A Premium Organic Brand, Villa Lodola (1)Sales grew due to an increase in the number of salons from the end of last year.
Number of salons(Unit: salons)

FY2020

FY2021

10,128

10,339

Increase/
Decrease

Increase/
Decrease ratio (%)

211

2.1

Consolidated sales (FY2021 3 months) (Unit: million yen)
FY20203 months

257

FY20213 months

271

Increase/
Decrease

Increase/
Decrease ratio (%)

14

5.5

(Number of salons)(Million yen)

Brand concept

1,400

Nurtured in the soil of Italy, these gifts from nature bring out the authentic
beauty of your hair and scalp.

What is Villa Lodola?
Based on the concept of “Beauty, the Organic Way,” Villa Lodola is a trueorganic brand that thoroughly cares about the natural environment not
only for the product itself but also in its container, production phase andpromotional tools.
All of the products are certified by ICEA, an Italian authority. Villa Lodola
supports organic choices, with hair care products nurtured in the soil of
Italy, bringing out true beauty.

© 2021 MILBON Co., Ltd.

Trends in sales & number of salons
10,000

1,200

8,000

1,000
800

6,000

600

4,000

400

2,000

200
0

0
2012

2013

2014

Sales

2015

2016

2017

2018

2019

Number of salons* Graphs are based on individual figures.

99A Premium Organic Brand, Villa Lodola (2)Core Product
FY2021 3 months
Villa Lodola ColorWith 92% natural ingredients, the product’s formulation utilizes thepower of plants. It brings comfort of an organic product across all
aspects, including during application, the finish and continued use.

Consolidated sales (FY2020 3 months) (Unit: million yen)
FY20203 months

204© 2021 MILBON Co., Ltd.

FY20213 months

216

Increase/
Decrease

Increase/
Decrease ratio (%)

11

5.8

10

FY2015 Debut

10

Consolidated Sales by Product Category [Cosmetic Products (1)]Consolidated Sales (FY2021 3 months)
FY20213 months

FY20203 months

71(Unit: million yen)

Increase/
Decrease

147

Increase/
Decrease ratio (%)

76

107.4

• Even in the aftermath of COVID-19, the number of salons increased due to theimplementation of several small-scale seminars, and sales more than doubled
compared to the previous fiscal year.
• The new product, Eyebrow Pencil & Mascara, launched in March, got off to agood start as product proposals linked to hair coloring are easier to gain
acceptance by beauticians. The limited-time product "Cool Whitening Day
Serum" is easy to introduce as a UV countermeasure in the salon, and it was
sold out.

© 2021 MILBON Co., Ltd.

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Consolidated Sales by Product Category [Cosmetic Products (2)]New Products

FY2021 3 months
Imprea Cool Whitening Day Serum (Limited Quantities)
A cold moussed daytime whitening cosmetic solution thatsuppresses the formation of melanin and prevents spots andfreckles.
(Unit: million yen)

FY2021 target

18

FY20213 months

Progress rate (%)

18

100.0

March 1, 2021 Debut

Imprea Eyebrow Mascara・ Eyebrow Pencil
Mascara for eyebrows with wide variety of color that can bechosen in line with hair color, and pencils for eyebrows thatcan be drawn smoothly and continue to have a natural finish.
(Unit: million yen)
FY2021 target83© 2021 MILBON Co., Ltd.

FY20213 months

20

Progress rate (%)

24.5

12

March 1, 2021 Debut

12

A Premium Brand, Imprea
Significant growth in sales due to an increase in the number of salons and the introduction of new products

Number of salons
FY2020 *645(Unit: salons)

FY2021 *Increase/
Decrease

795

Increase/
Decrease ratio (%)

150

23.3

Consolidated sales (FY2021 3 months) (Unit: million yen)
FY20203 months

71

FY20213 months

Increase/
Decrease

147

76

Increase/
Decrease ratio (%)

107.4

Brand concept

What is Imprea?

The brand concept of Imprea is “Revolutionize Your Aurawith your Professional Stylist”. We will provide new beauty
value by leveraging Professional Stylists’ ability to provide
solutions, which is one of the strengths of them.

Imprea is a salon exclusive brand created through joint research by KOSÉ,
which specializes in skin research, and Milbon, which specializes in hair research.
We will improve the complexion by establishing a good balance between the"corner-layer keratin" on the surface of the skin, which holds the key tocomplexion.

“Revolutionize Your Aura with your Professional Stylist”
Through communication that takes advantage of strength as a beautician, we propose impressions that comprehensively capture hair and facethrough beauticians, and deliver " Change Your Impression " to customers.

* Calculated based on the past year's shipment results.

© 2021 MILBON Co., Ltd.

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Consolidated Statement of Earnings (FY2021 3 months)<Consolidated Statement of Earnings> (Unit: million yen)
FY20203 months

Sales
Cost of sales
Gross profit

% to
sales

7,825 100.0
2,592
5,233

33.1
66.9

FY20213 months

% to
sales

8,989 100.0
3,039
5,950

33.8
66.2

SG&A
expenses

4,202

53.7

4,316

48.0

Operatingincome

1,031

13.2

1,633

18.2

Ordinary
income

835

10.7

1,502

16.7

Profitattributableto owners ofparent

601

7.7

1,091

12.1

© 2021 MILBON Co., Ltd.

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<Breakdown of net sales by product category>(Unit: million yen)

FY20203 months

FY20213 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

Hair care products

4,424

4,975

55.4

551

12.5

Hair coloringproducts

2,995

3,495

38.9

499

16.7

Permanent wave
products

291

318

3.5

26

9.1

Cosmetic products

71

147

1.6

76

107.4

Others

42

52

0.6

10

23.8

<Major factors for the increase/decrease>[Gross profit margin]•
Impact of the replacement of standard costs•
Increase in product attachments due to sales increase【SG & A expenses】•
Logistics expenses: + 138M
(Direct delivery products = Increase in sales ofpremium brands, etc.)•
Personnel expenses: + 82M (increase in personnel,
salary increase, etc.)•
Travel expenses: △ 88M (restriction activities in theaftermath of COVID-19)•
Advertising expenses :△55 M(Stop of brick-and-mortar events and switch to online,
etc.)

14

Consolidated Trends in Capital Expenditures and R&D Expenses(Unit: million yen)

FY2017FY2018FY2019FY2020

FY2021
Jan.–Mar.

FY2021
Plan

Capitalexpenditures

1,570

1,149

1,605

1,917

852

7,488

Depreciation andamortization

1,272

1,370

1,453

1,562

408

1,819

Amount

1,422

1,479

1,534

1,581

384

1,765

% to sales

4.3

4.2

4.2

4.4

4.3

4.6

Category

R&D exp.

FY2021 CAPEX Main Items (Plan)• Established Aoyama Sales Office• Acquisition of land for of the new training center / the Innovation Centre• Milbon Digital Arena (Digital virtual space system)• Salon education video platform• Expansion of the Thai factory• Factory construction in China© 2021 MILBON Co., Ltd.

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Trends in Fieldpersons (FPs), Market Related Data
(Number of FPs / As of January 1, the beginning of theFieldpersons trends (by country) fiscal year (As of December 21 for 2017 and before))2017 *1

2018

2019

2020

2021

258

269

279

297

328

105

111

108

100

-

USA

12

13

13

17

17

MILBON USA, INC.

48

48

50

27

-

CHINA

19

22

21

30

30

Milbon Trading(Shanghai) Co., Ltd.

50

62

70

50

-

KOREA

23

25

30

32

32

Milbon Korea Co., Ltd.

84

82

77

79

-

33

33

35

38

38

31

37

39

34

-

JAPAN

Others *2

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
(As of March 31, 2021)
0 FPs joined in October 2020 no recruitment
activities in autumn
33 FPs are scheduled to join in April 2021
(The above 33 FPs are not included in the left
chart.)

Market Related Data (Japan)
FY2016
Number of businessestablishments(households)

172,304

Number of workers

443,241

Number of beauty
customers(thousand people)

37,023

Remarks
Bureau economy census of ministry
statistics of public management
Statistics Bureau, Ministry of Internal
Affairs and Communications:
Population statistics as of October 1st ofeach year Population statistics forfemales aged 15 to 64* Data in the Ministry of Health, Labour and Welfare's
Ministry of Health, Labour and Welfare administrative
report, which had been used for the number of salonsand beauticians in the "Market Trends,“until FY2020 Q1
was judged to differ greatly from the actual situation.
Accordingly, the number of business establishments andnumber of workers are shown in the data from the
Economy Census of the Statistics Bureau of the Ministryof Internal Affairs and Communications. The number ofworkers includes workers other than those with abeautician license.

*1 Because FY2017 was an irregular accounting period, performance is calculated with adjusted amounts for a 12-month period.
*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

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Consolidated Net Sales in Japan and Overseas
FY2021 3 months(Unit: million yen)

FY20203 months

FY20213 months

Increase/
Decrease

Increase/
Changes in Local*1
Decrease ratio currency base

Net Sales% to sales

Net Sales% to sales

7,825

100.0

8,989

100.0

1,163

14.9

14.0

JAPAN

6,590

84.2

7,182

79.9

592

9.0

9.0

Overseas

1,235

15.8

1,807

20.1

571

46.2

40.9

USA

113

1.4

171

1.9

58

52.0

55.9

CHINA

291

3.7

552

6.1

260

89.6

79.9

KOREA

524

6.7

727

8.1

203

38.8

31.0

Other *2

307

3.9

355

4.0

48

15.7

15.3

Consolidated Net Sales

(%)

(%)

*1 Figures are the rates of change in real terms on a local currency basis. Current exchange rates of 106.09 yen to the U.S. dollar, 16.45 yen to theChinese yuan, and 0.0955 yen to the Korean won*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

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Consolidated Operating Income in Japan and Overseas
FY2020 3 months(Unit: million yen)

FY20203 months
Operating
IncomeFY20213 months

Operatingincome ratio(%)

Operating
IncomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
Operating Income

1,031

13.2

1,633

18.2

602

58.4

JAPAN

1,061

16.1

1,310

18.3

249

23.5

Overseas

(30)

(2.5)

322

17.9

353

-

USA

(87)

(77.2)(41)(24.0)

46

-

CHINA

27

9.6

126

22.9

98

351.4

KOREA

104

19.9

230

31.7

126

120.9

Other *

(75)

(24.5)

7

2.0

82

-

* Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

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Outlook of Overseas Subsidiaries (1)Figures in the text are based on local currency.

USA (MILBON USA)•

Increase in areas where restrictions on activities are relaxed due to the early
popularization of vaccinations. Even when activities were restricted due to COVID-19, thecompany continued to contact distributors online and strengthened cooperation, and after
the activities resumed, it collaborated to capture new salons. As a result, sales rose
55.9% YoY, leading to strong growth.

•

The hair care business continued to be highly regarded and performing well, mainly for
Global Milbon. Sales grew, supported by the repeat demand for take-home products.

•

In hair coloring products, operating activities for Sophistone hair coloring products for the
US and Europe progressed steadily due to the relaxation of activity restrictions. The
number of salons is also increasing, and sales growth can be expected in the future.

© 2021 MILBON Co., Ltd.

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Outlook of Overseas Subsidiaries (2)Figures in the text are based on local currency.

CHINA (Milbon China)•

There was a re-expansion of COVID-19 from the end of January, and the number of salon
customers declined significantly in the period near Chinese new year, which is essentiallythe busy season. However, the activities closely linked to salons from the past were highly
evaluated, and sales grew significantly by 79.9% YoY and by 29.6% compared to the level
First Quarter 2019, prior to the impact of COVID-19.

•

In particular, hair care sales were steady in conjunction with educational activities. The
number of Global Milbon salons is steadily increasing, leading to sales growth.

© 2021 MILBON Co., Ltd.

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Outlook of Overseas Subsidiaries (3)Figures in the text are based on local currency.

KOREA (Milbon Korea)•

Amid the re-expansion of infections from January to February, we effectively
disseminated a new color introduction web video employing young influencer beauticianson SNS, etc. Sales were up 31.0% YoY, driven by sales of the mainstay hair coloringproduct Ordeve Addicthy through innovative activities.

•

Hair care steadily grew due to rising demand for care at home. The premium brandremained robust, and Aujua began its first Korean version of Aujuasomlier and began toroll out. In addition, sales of Global Milbon, which was launched in July last year, grewsignificantly thanks to the involvement of selected elite sales from distributors nationwide.

•

Launched Aqua Carl, a digital perm brand, in March. With the cooperation of its
distributors, it developed the market through sample activities and other means, and as
a result, it has been well received by its distributors and salons, and it is making asmooth start. Expectations for a new growth engine in the future.

© 2021 MILBON Co., Ltd.

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<Appendix> Hair Care Brand Positioning Map
Premium

brand

Professional© 2021 MILBON Co., Ltd.

22

brands22

Statements concerning the future such as the earnings forecasts given in thisdocument are based on information currently in the possession of theCompany and on assumptions that the Company considers reasonable.

© 2021 MILBON Co., Ltd.

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