Consolidated Financial Results for the Three Months Ended March 31, 2018
[Japanese GAAP]
April 27, 2018
Tokyo Stock Exchange, First Section

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL
http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
Scheduled filing date for quarterly report: May 11, 2018
Scheduled starting date of dividend payments: Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: None

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

1. Consolidated financial results for the three months ended March 31, 2018 (January 1, 2018 - March 31, 2018)(1) Consolidated operating results
Net sales

Operating income

Three months ended March 31, 2018

Million yen
7,789%-

Million yen
1,390%-

Three months ended March 20, 2017

6,898

2.8786(14.9)(Note) Comprehensive income

Three months ended March 31, 2018: 1,118 million yen [-%]

Three months ended March 31, 2018

Basic earnings per shareYen
32.83

Three months ended March 20, 2017(Reference)

Million yen
1,208
717

(11.8)

538(1.5)

Three months ended March 20, 2017: 838 million yen [92.9%]

Diluted earnings per shareYen-16.44

Equity in earnings (losses) of affiliates(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%
1,074-

Ordinary income-Three months ended March 31, 2018: 0 million yen

Three months ended March 20, 2017: - million yen(Notes)
1. As of the fiscal year ended December 31, 2017, the Company changed its fiscal year end from December 20 to December 31. For the consolidated accounting, overseas
consolidated subsidiaries changed their fiscal year end from September 30 to December 31. Therefore, year-on-year changes are not stated for the three months ended March
31, 2018, because the three month period under review (January 1, 2018 to March 31, 2018) differs from that of the previous three month period (December 21, 2016 to March
20, 2017).
2. On January 1, 2018, the Company conducted a stock split at a ratio of two shares for every one share of common stock. Accordingly, basic earnings per share was calculatedon the assumption that the stock split was conducted at the beginning of the previous fiscal year.
(2) Consolidated financial position
Total assets
Million yen
36,392As of March 31, 2018
As of December 31, 2017
(Reference)

EquityNet assets
Million yen
31,36837,642As of March 31, 2018: 31,368 million yen

Equity ratio%
86.2

31,103

82.6

As of December 31, 2017: 31,103 million yen

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

Year ended December 31, 2017

-Year ending December 31, 2018-Year ending December 31, 2018
(forecast)(Note) Changes to latest dividends forecast: None

Yen
40.00

24.00

End of 3rd quarterEnd of fiscal year

Yen

Total-Yen
52.00

Yen
92.00

-24.0048.00(Note) On January 1, 2018, the Company conducted a stock split at a ratio of two shares for every one share of common stock. Regarding dividends for the end of 2nd quarterand the end of fiscal year for the fiscal year ending December 31, 2018 (forecast), the amount is stated by taking this stock split into account.

3. Consolidated operating forecasts for the fiscal year ending December 31, 2018 (January 1, 2018 - December 31, 2018)(Percentages show year-on-year changes.)
Net sales
Million yen
Year ending December 31, 2018
34,000(Note) Changes to latest performance forecasts: None

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen%Yen
5,740
5,270
3,990
121.87(Notes)1. The fiscal year ended December 31, 2017 is an irregular accounting period. Results are for the 12 months plus 11 days from December 21, 2016 to December 31, 2017. For
the consolidated accounting, financial results for overseas consolidated subsidiaries are their respective individual results for the 15-month period from October 1, 2016 toDecember 31, 2017. Therefore, year-on-year changes are not stated.
2. On January 1, 2018, the Company conducted a stock split at a ratio of two shares for every one share of common stock. Accordingly, basic earnings per share was calculatedon the assumption that the stock split was conducted at the beginning of the previous fiscal year.

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 0 companies (Company name: ): NoneExclude: 0 companies (Company name:)(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: None2) Changes in accounting policies other than those in 1) above: None
3) Changes in accounting estimates: None

4) 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(cumulative)

As ofMarch 31, 2018
As ofMarch 31, 2018
Three months ended
March 31, 201833,117,234 shares
376,996 shares
32,740,412 shares

As ofDecember 31, 2017
As ofDecember 31, 2017
Three months ended
March 20, 201733,117,234 shares
376,572 shares
32,743,298 shares(Note) On January 1, 2018, the Company conducted a stock split at a ratio of two shares for every one share of common stock. Accordingly, the number of shares issued at theend of the period, the number of treasury shares at the end of the period, and the average number of shares during the period were calculated on the assumption that the stock
split was conducted at the beginning of the previous fiscal year.

*These financial statements are not subject to the review of the quarterly financial statements by a certified public accountant or an audit corporation.
*Explanation on the appropriate use of operating forecasts and other special instructions
Operating forecasts and other statements regarding the future presented in these materials are based on information currently available and certain
assumptions deemed to be reasonable, and actual performance may differ substantially due to various factors.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018

Contents of supplementary materials
1. Qualitative Information on Consolidated Results for the Current Period ...…………....………………………………………. 2(1)Explanation on operating results ……………………………...…….………………………………...…………………. 2(2)Explanation on financial position ………………………………………………...……………………………...…….… 3(3)Explanation on forward-looking statements including consolidated operating forecasts ...……………………...….…… 3

2. Quarterly Consolidated Financial Statements and Main Notes …………...…………………………………...….…..…..…… 4(1)

Quarterly Consolidated Balance Sheets ……………………………………………………………....…………..……… 4(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ……..……… 6
Quarterly Consolidated Statements of Earnings
Three Months Ended March 20, 2017 and March 31, 2018 ………………………………………….…..…………...

6

Quarterly Consolidated Statements of Comprehensive Income(3)Three Months Ended March 20, 2017 and March 31, 2018 ………………………………………………….…….....

7Notes regarding quarterly consolidated financial statements ……………………………………………………….…...

8Notes regarding going concern assumption ………………………………………...……....…………………………....

8Notes in case of any significant changes in shareholders’ equity …………………...……....……….………………...… 8
Segment information, etc. ………………………………………………...……………………………...………………. 8-1-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 20181.

Qualitative Information on Consolidated Results for the Current Period(1)Explanation on operating results
Starting in the previous fiscal year, the Company changed its fiscal year end from December 20 to December 31. Additionally,
the Company’s consolidated subsidiaries changed their fiscal year end from September 30 to December 31. These changes give
the Company and all of its consolidated subsidiaries the same fiscal year end. While the first quarter of the fiscal year underreview covers the three month period from January 1, 2018 to March 31, 2018, the first quarter of the previous fiscal year covered
the three month period from December 21, 2016 to March 20, 2017 (for consolidated subsidiaries, the period of October 1, 2016
to December 31, 2016). Therefore, year- on-year comparisons are not stated.
During the three month period ended March 31, 2018, the Japanese economy continued on a moderate recovery trend as personal
consumption picked up amid improvement in the employment environment. The global economy is also generally on a recovery
trend. However, the overall economic outlook is uncertain, owing to factors such as unstable operation of the U.S. administration,and concerns over downward revisions to corporate earnings owing to the influence of the strong yen.
Amid this environment, the Milbon Group is working with salons premised on the goal of “aiming to improve labor productivity
by supporting lifetime hair designers who fulfill ‘lifetime beauty’ and enhance its dual time values.”
During the three month period ended March 31, 2018, the upgraded version of Aujua released in November 2017 was very wellreceived by the market. Also, returns of the previous version of Aujua, which was scheduled to be discontinued as of March 31,
2018, were much lower than expected, and this resulted in pushing up gross profit. The “milbon” brand, targeting the global
market, also progressed steadily in salons, and the premium brand remained strong. In overseas markets, the East Asian region
continued to grow steadily.
As a result of the above efforts, consolidated net sales during the three month period ended March 31, 2018 amounted to 7,789
million yen, operating income was 1,390 million yen, ordinary income was 1,208 million yen, and profit attributable to ownersof parent was 1,074 million yen.

Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below:[Breakdown of consolidated net sales by product category](Unit: Million yen)
Product category

Three months ended
March 20, 2017
AmountThree months ended
March 31, 2018

Ratio (%)

AmountRatio (%)

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

Hair care products

3,924

56.9

4,490

57.6

–

–

Hair coloring products

2,667

38.6

2,905

37.3

–

–

Permanent wave products

260

3.8

348

4.5

–

–

Others

46

0.7

45

0.6

–

–

Total

6,898

100.0

7,789

100.0

–

–

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Three months ended
March 20, 2017
AmountThree months ended
March 31, 2018

Ratio (%)

AmountRatio (%)

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

Domestic sales

5,856

84.9

6,479

83.2

––

Overseas sales

1,041

15.1

1,310

16.8

–

–

Total

6,898

100.0

7,789

100.0

––-2-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018(2)

Explanation on financial position
Total assets at the end of the three month period ended March 31, 2018 decreased by 1,249 million yen compared to the end of
the previous fiscal year to 36,392 million yen.
Current assets decreased by 1,271 million yen compared to the end of the previous fiscal year to 14,835 million yen. This was
mainly due to the 445 million yen decrease in cash and deposits, the 1,459 million yen decrease in notes and accounts receivable- trade, the 523 million yen increase in merchandise and finished goods and the 142 million yen increase in raw materials andsupplies.
Non-current assets increased by 22 million yen compared to the end of the previous fiscal year to 21,557 million yen.
Current liabilities decreased by 1,590 million yen compared to the end of the previous fiscal year to 4,404 million yen. This was
mainly due to the 1,050 million yen decrease in accounts payable - other, the 322 million yen decrease in income taxes payable,
the 277 million yen decrease in provision for sales returns and the 320 million yen increase in provision for bonuses.
Non-current liabilities increased by 75 million yen compared to the end of the previous fiscal year to 619 million yen.
Net assets increased by 265 million yen compared to the end of the previous fiscal year to 31,368 million yen. This was due
mainly to the 223 million yen increase in retained earnings and the 135 million yen increase in valuation difference on availablefor-sale securities attributable to factors such as higher prices of listed stocks.
As a result, the equity ratio changed from 82.6% at the end of the previous fiscal year to 86.2%. Net assets per share based on
the total outstanding shares as of the end of the period under review increased from 949.99 yen per share at the end of theprevious fiscal year to 958.11 yen per share.

(3)

Explanation on forward-looking statements including consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced
on February 24, 2018.

-3-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018

2.
(1)

Quarterly Consolidated Financial Statements and Main Notes
Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year

Current First Quarter(As of December 31, 2017)(As of March 31, 2018)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goodsWork in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, netLand
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for sales returns
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities-4-

6,164,763
5,076,624
2,991,885
57,709
1,025,671
458,893
450,693(119,553)
16,106,686

5,718,843
3,617,430
3,515,389
69,723
1,168,319
463,112
378,049(95,842)
14,835,024

6,861,729
2,169,817
5,029,802
12,981
552,412
14,626,742
943,654

6,818,810
2,071,119
5,028,133
40,420617,330
14,575,814
1,003,166

4,748,113
275,1889,750
996,332(63,862)
5,965,522
21,535,919
37,642,605

4,779,398
275,040
11,465976,918(63,862)
5,978,960
21,557,941
36,392,966

1,145,987
2,535,084
786,252
292,501
318,617
916,809
5,995,253

1,066,499
1,484,906
464,117
14,985
638,765
735,541
4,404,816

47,859411,51184,614543,986
6,539,239

54,366
480,401
84,689619,457
5,024,273

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018

(Thousand yen)Previous Fiscal Year(As of December 31, 2017)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-5-Current First Quarter(As of March 31, 2018)

2,000,000
200,066
27,756,292(554,227)
29,402,131

2,000,000
200,310
27,979,891(556,209)
29,623,993

1,332,021

1,467,999

381,392(12,178)
1,701,234
31,103,366
37,642,605

293,209(16,510)
1,744,699
31,368,692
36,392,966

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Three Months Ended March 20, 2017 and March 31, 2018

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Company house defrayment income
Other
Total non-operating income
Non-operating expenses
Sales discounts
Foreign exchange losses
Depreciation
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
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Three Months Ended
March 20, 2017
(December 21, 2016 March 20, 2017)
6,898,132
2,354,086
4,544,046
3,757,392
786,653-6-(Thousand yen)Three Months Ended
March 31, 2018
(January 1, 2018 March 31, 2018)
7,789,729
2,238,017
5,551,711
4,161,636
1,390,075

1,937
－

1,672
192

－

764

37,257
16,1204,037
59,352－
14,9005,576
23,105

121,409－
7,177
11
128,597
717,408148,648
55,554－79
204,282
1,208,898－－－9
305,980
305,990507
507
716,901
206,167(27,500)
178,667
538,234
538,234

338
338
1,514,551
435,335
4,359
439,694
1,074,856
1,074,856

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018
Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended March 20, 2017 and March 31, 2018

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent
Comprehensive income attributable tonon-controlling interests

Three Months Ended
March 20, 2017
(December 21, 2016 March 20, 2017)538,234-7-(Thousand yen)Three Months Ended
March 31, 2018
(January 1, 2018 March 31, 2018)
1,074,856

117,595
189,774(7,178)300,191
838,426

135,978(88,182)(4,331)
43,464
1,118,321

838,426

1,118,321––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2018(3)

Notes regarding quarterly consolidated financial statements(Notes regarding going concern assumption)
None(Notes in case of any significant changes in shareholders’ equity)
None(Segment information, etc.)
The Company omits information on business segments, as it is engaged in the production and distribution of hair-care products
and related merchandise, all of which are deemed to belong to a single business segment.

-8-