Consolidated Financial Results for the Fiscal Year Ended December 31, 2017
[Japanese GAAP]
February 14, 2018
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, First Section
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
TEL: +81-3-3517-3915
Scheduled date of annual general meeting of shareholders: March 29, 2018
Scheduled filing date for Securities Report: March 29, 2018
Scheduled starting date of dividend payments: March 30, 2018
Preparation of supplementary materials on the Consolidated Financial Results: Yes
Holding of an explanatory meeting on 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, 2017 (December 21, 2016 - December 31, 2017)(1) Consolidated operating results
Net salesYear ended December 31, 2017

Year ended December 31, 2017%-

Million yen
5,345

%
-

29,134

6.4

5,113

8.2

Year ended December 31, 2017: 4,715 million yen [(-)%]

Million yen
4,997
4,733

93.73

6.9

3,069

4.0

Year ended December 20, 2016: 2,757 million yen [(16.0)%]

Basic earnings per share Diluted earnings per share Return on equity (ROE)
Yen
Yen
%
116.5813.0

Year ended December 20, 2016

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
3,817
-

Ordinary income

Million yen
33,456

Year ended December 20, 2016
(Note) Comprehensive income

Operating income-

Return on assets (ROA)%
14.3

Operating income ratio
%
16.0

15.0

17.6

11.4

(Reference)
Equity in earnings (losses) of affiliates
Year ended December 31, 2017: 0 million yen Year ended December 20, 2016: – million yen(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
to December 31, 2017. Therefore, year-on-year changes are not stated for the year ended December 31, 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 wascalculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year.
(2) Consolidated financial position
Total assets
Million yen
37,642As of December 31, 2017
As of December 20, 2016
(Reference)

EquityNet assets
Million yen
31,10332,444Equity ratio

27,706

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

Net assets per share
%
82.6

Yen
949.9985.4

846.16

As of December 20, 2016: 27,706 million yen(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, net assets per share wascalculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year.
(3) Consolidated cash flows

Year ended December 31, 2017

Cash flows from operating
activities
Million yen
4,346

Cash flows from investing
activities
Million yen(1,919)Cash flows from financing
activities
Million yen(1,317)

Cash and cash equivalents
at end of period
Million yen
5,928Year ended December 20, 2016
3,355
(4,366)(1,262)
4,737(Note) 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 to December 31, 2017.

2. Payment of dividends
Annual dividends

Year ended December 20, 2016-

End of 2ndquarterYen
38.00

Year ended December 31, 2017

-

40.00

End of 1st quarter
Yen

End of 3rd
End of fiscal year
quarter
Yen
Yen
40.00
-

52.00

Total

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

Yen
78.00

Million yen
1,277

%
41.6

%
4.7

92.00

1,506

39.5

5.1

Year ending December 31, 2018
24.00
24.00
48.00
39.4
(forecast)(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 fiscal year ended
December 20, 2016 and the fiscal year ended December 31, 2017, the amount stated is the actual dividend paid before the stock split.

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 salesYear ending December 31, 2018

Million yen
34,000Operating income% Million yen
5,740

Ordinary income% Million yen
5,270Profit attributable to
Basic earnings per shareowners of parent% Million yen
%
Yen
3,990
121.87(Note)
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
to December 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 wascalculated on 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) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: None2) Changes in accounting policies other than those in 1) above: Yes3) Changes in accounting estimates: Yes4) 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, 2017
As ofDecember 31, 2017
Year ended
December 31, 201733,117,234 shares
376,572 shares
32,742,188 shares

As ofDecember 20, 2016
As ofDecember 20, 2016
Year ended
December 20, 201633,117,234 shares
373,632 shares
32,743,968 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
the end 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 thestock split was conducted at the beginning of the previous fiscal year.

*The financial results are not subject to audit.
*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. For notes on the use of preconditions ofoperating forecasts and the use of operating forecasts, refer to “1. Analysis of Operating Results and Financial Position (1) Analysis of operating
results” on page 2 of the supplementary materials.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017

Contents of supplementary materials
1. Overview of Operating Results, etc. .……………………………………...…………....………………………………………. 2(1)

Analysis of operating results ……………………………………………………...…….………………………………... 2(2)

Analysis of financial position ……………………………………………………...……………………………...……… 3(3)

Basic policy on the distribution of profit and dividends for the fiscal year under review and the following fiscal year ... 4(4)

Business and other risks ……………………………………………………...……………………………...……..…….. 5

2. Outline of the Milbon Group ………………………………………………...…………………………………...……..……… 6
3. Basic Rationale for Selecting the Accounting Standards …………………...…………………………………...……..………. 8
4. Consolidated Financial Statements ………………………...…………………………………...……..………...……..………. 9(1)

Consolidated Balance Sheets ………………………………………………………………………....…………..……… 9(2)

Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ….....…………..……… 11(3)

Consolidated Statements of Changes in Shareholders’ Equity …………………………………………………………... 13(4)

Consolidated Statements of Cash Flows ……………………………………………...……....………………………….. 15-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 20171.

Overview of Operating Results, etc.

(1)

Analysis of operating results
1)

Operating results for the fiscal year under review
During the fiscal year under review, the Japanese economy continued on a moderate recovery trend as personal
consumption picked up amid improvement in the employment environment. However, the overall economic outlook
remains uncertain, owing to factors such as unstable operation of the U.S. administration, political risks in Europe,
together with the concerns over economic slowdowns in China and other Asian emerging economies. In the beauty
industry, business conditions continue to pose challenges due to the adverse impact of demographic trends and otherfactors.
Amid this environment, the Milbon Group worked with salons toward the goal of “supporting ‘the development of lifelong
hair designers’ to create lifelong customers by understanding their generational perspectives and values, with the aim of
improving productivity through consumption that spreads across generations.”
In the hair coloring product category, ORDEVE Addicthy, which allows customers to freely realize individual color design,
was launched in February. The product received a highly favorable response for giving customers the chance to enjoy thevibrant shades of colors. Sales were significantly higher than planned, as a result. In the hair care product category, theenhanced version of Aujua released in November was very well received. In overseas markets, the East Asia region,
including China and South Korea, continued to grow steadily.
As a result of the above efforts, consolidated net sales for the fiscal year under review amounted to 33,456 million yen,operating income was 5,345 million yen, ordinary income was 4,997 million yen, and profit attributable to owners ofparent was 3,817 million yen.
Due to the change in the accounting period, the fiscal year under review is 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 to December 31, 2017. Therefore, yearon-year comparisons are not stated.
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

Previous fiscal year
AmountCurrent fiscal year

Ratio (%)

AmountRatio (%)

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

Hair care products

17,711

60.8

19,511

58.3––

Hair coloring products

9,892

34.0

12,09536.2––

Permanent wave products

1,260

4.3

1,569

4.7

–

–

Others

270

0.9

279

0.8

–

–

Total

29,134100.0

33,456

100.0

–

–

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

25,287

Current fiscal year

Ratio (%)

Amount86.8

27,974

Ratio (%)

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

83.6

–

–

Overseas sales

3,847

13.2

5,481

16.4

–

–

Total

29,134100.0

33,456

100.0

–

–

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 20172)

Outlook for fiscal 2018
Japan’s economic outlook is uncertain due to factors including the political disorder in Europe and the U.S., concerns
about the economic slowdowns in China and other Asian emerging economies, and geopolitical risks in East Asia. In thebeauty industry, business conditions continue to pose challenges due to the adverse impact of demographic trends.
Amid this environment, the Milbon Group will work with salons premised on the goal of “aiming to improve laborproductivity by supporting lifelong hair designers who enhance the two time values of fulfilling ‘lifelong beauty’ andcommunicating the ‘lifetime beauty’ of customers.”
The Company anticipates net sales of 34,000 million yen, operating income of 5,740 million yen, ordinary income of
5,270 million yen, and profit attributable to owners of parent of 3,990 million yen on a consolidated basis for the next
fiscal year.

(2)

Analysis of financial position
1)

Assets, liabilities and net assets
Total assets at the end of the fiscal year ended December 31, 2017 increased by 5,198 million yen compared to the end of
the previous fiscal year to 37,642 million yen.
Current assets increased by 2,695 million yen compared to the end of the previous fiscal year to 16,106 million yen. Thiswas mainly due to the 2,141 million yen increase in cash and deposits, the 1,271 million yen increase in notes andaccounts receivable - trade and the 1,000 million yen decrease in securities (jointly managed designated money trusts, etc.).
Non-current assets increased by 2,503 million yen compared to the end of the previous fiscal year to 21,535 million yen.
This was due mainly to the 2,120 million yen increase in investment securities attributable to factors such as purchases ofinvestment securities and higher prices of listed stocks.
Current liabilities increased by 1,404 million yen compared to the end of the previous fiscal year to 5,995 million yen.
This was due mainly to the 458 million yen increase in accounts payable - trade and the 277 million yen increase inprovision for sales returns.
Non-current liabilities increased by 397 million yen compared to the end of the previous fiscal year to 543 million yen.
Net assets increased by 3,396 million yen compared to the end of the previous fiscal year to 31,103 million yen. This wasdue mainly to the 2,507 million yen increase in retained earnings, the 579 million yen increase in valuation difference on
available- for-sale securities attributable to factors such as higher prices of listed stocks and the 338 million yen increase inforeign currency translation adjustment attributable to the depreciation of the yen.
As a result, the equity ratio changed from 85.4% at the end of the previous fiscal year to 82.6%. Net assets per share basedon the total outstanding shares as of the end of the period under review increased from 846.16 yen per share at the end of
the previous fiscal year to 949.99 yen per share.
On January 1, 2018, the Company conducted a stock split at a ratio of two shares for every one share of common stock.
Net assets per share stated above was calculated on the assumption that the stock split was conducted at the beginning of
the previous fiscal year.

2)

Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the current fiscal year increased by 1,190 million yen
compared to the end of the previous fiscal year to 5,928 million yen, as a result of using the net cash provided by operating
activities for the payment of income taxes and the purchase of property, plant and equipment.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 4,346 million yen. This was mainly the result of posting 5,217
million yen in profit before income taxes, depreciation of 1,278 million yen, 1,369 million yen in income taxes paid andthe 1,232 million yen increase in notes and accounts receivable - trade.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 1,919 million yen. This was mainly due to the purchase of investment
securities of 1,439 million yen and the purchase of property, plant and equipment of 1,151 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 1,317 million yen. This was mainly due to the cash dividends paid toshareholders of 1,308 million yen.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017
(Reference) Cash flow-related indicators
Year ended
December 20,
2013

Year ended
December 20,
2014

Year ended
December 20,
2015

Year ended
December 20,
2016

Year ended
December 31,
2017

Equity ratio (%)

84.1

85.7

85.1

85.4

82.6

Equity ratio based on market
value (%)

243.3

183.0

264.2

223.3

329.6

Interest-bearing debt to cash
flows ratio (%)

2.3

3.0

2.1

2.4

1.8

(Notes) Equity ratio: Equity/net 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). For the fiscal year ended December 31, 2017, total
market capitalization was calculated by the following formula, due to the impact at the end of the period of ex-rights resulting
from the stock split:
Closing stock price at the end of the period multiplied by (total number of outstanding shares at the end of the period plus thenumber of additional shares resulting from the stock split)*

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 Milbon Group considers the returning of profits to shareholders as an important management issue and makes it a basic
policy to pay dividends in accordance with its operating results, while enhancing its business structure by maintaining
internal reserves to the end of improving its earnings in the future. Moreover, we have set the target dividend payout ratio at
40%. Interim dividends are determined at the Board of Directors meetings and year-end dividends at the general meeting ofshareholders, and it is the Group’s basic policy to pay dividends twice every fiscal year.
For the current fiscal year, upon comprehensively taking into account factors including our financial position and profit
levels, we have decided to pay a year-end dividend of 52 yen per share. As a result, the total annual dividend per share willamount to 92 yen per share, which includes the interim dividend of 40 yen per share that has already been paid.
For the following fiscal year, we plan to pay an annual dividend of 48 yen per share. This amount takes into consideration
the impact of the stock split conducted at a ratio of two shares for every one share of common stock on January 1, 2018.

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017(4)

Business and other risks
Risks that could potentially affect the operating results, stock price and financial position of the Milbon Group include thefollowing.
The future risks identified in this section are based on assessments made by the Company as of the end of the fiscal year
under review. The Group recognizes the possibility of these risk events actually occurring and has prepared policies toprevent and avert such risks and take appropriate measures to minimize the impact of such risks when they do occur.
1) Risks associated with global expansion
The Milbon Group is aggressively expanding its business into the overseas markets. Global expansion entails risks relating
to intellectual property rights including counterfeit goods, unforeseeable changes in laws and regulations, and risks ofsocial unrest due to terrorism, war and other factors. Such risks could have a major impact on the Group’s operating results
and financial position.
2) Information security
The Milbon Group has taken various measures to protect information assets including customers’ personal information andconfidential information. However, unforeseeable events, such as the leakage of information due to unauthorized access,could have a major impact on the Group’s operating results and financial position.
3) Risks associated with debt collection
The Milbon Group deliberates and records necessary reserves upon regularly reviewing its business partners from bothquantitative and qualitative perspectives and in terms of collection status. However, deterioration in the business partner’s
credit standing or events such as bankruptcy could have a major impact on the Group’s operating results and financial
position.
4) Risks associated with major accidents
The Milbon Group utilizes company cars in its sales activities. The Group implements safety measures that placemaximum priority on human life, including strict control over driving and the reinforcement of safety training. However,should a major accident event occur, it could lead to the loss of the customers’ and the public’s trust in the Group and havea major impact on the Group’s operating results and financial position.
5) Risks associated with product-related health hazards
Many Milbon Group products come into direct contact with consumers’ hair and scalp, and as such the Milbon Group
places top priority on its efforts to ensure product safety and quality. However, should an unforeseeable incident involving
a major health hazard occur, it could lead to the loss of the customers’ and the public’s trust in the Group and have a major
impact on the Group’s operating results and financial position.

-5-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 20172.

Outline of the Milbon Group
Name

Location

Capital stockor capital
contribution(Consolidated subsidiary)
MILBON USA, INC.

New York, USA

USD 2 million

Main line ofbusiness

Percentage ofvoting rights held(%)

Relationship with theCompany

100.0

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

Sale of hairproducts(Consolidated subsidiary)
Milbon Trading(Shanghai) Co., Ltd.

Shanghai, China

JPY 430 million

Sale of hairproducts(Consolidated subsidiary)
Milbon Korea Co., Ltd.

Seoul,South Korea

KRW 3,000 Sale of hairmillion products(Consolidated subsidiary)
Manufacture andRayong, Thailand THB 450 million sale of hair
MILBON (THAILAND)
products
CO., LTD.
(Notes) 1. All companies fall under the category of “specified subsidiary.”
2. In addition to the companies noted above, the Group has one equity-method affiliate.

-6-

Sells the Company’s hairproducts in China.
100.0 Three executives holdconcurrent posts at theCompany.
Sells the Company’s hairproducts in South Korea.
100.0 Three executives holdconcurrent posts at theCompany.
Manufactures and sells the
100.0 Company’s hair productsin Thailand.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017
The following diagram shows the positioning of Milbon Group companies and the Group’s businesses.
(Diagram of business activities)(Notes) 1. For overseas transactions, sales channels differ depending on the country.
2. The main items for store sales are hair-care products.

-7-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 20173.

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), as it makes it possible to compare the consolidated financial statements against previous
fiscal year and against 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.

-8-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 20174.
(1)

Consolidated Financial Statements
Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year

Current Fiscal Year(As of December 20, 2016)(As of December 31, 2017)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work 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
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
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-9-4,023,328
3,805,519
1,000,000
2,974,165
36,684
883,147
289,131573,252(173,901)
13,411,329

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

11,826,282(5,031,190)
6,795,092
6,219,285(3,841,667)
2,377,617
5,154,087
21,093
2,161,337(1,828,094)
333,243
14,681,134
789,601

11,148,669(4,286,940)
6,861,729
6,172,774(4,002,956)
2,169,817
5,029,802
12,9812,476,243(1,923,830)
552,412
14,626,742
943,6542,621,957
249,854
6,667
737,198(53,556)3,562,121
19,032,857
32,444,187

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

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017

(Thousand yen)Previous Fiscal Year

Current Fiscal Year(As of December 20, 2016)(As of December 31, 2017)

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
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- 10 -

687,1932,788,818
678,180
15,198
137,562
284,059
4,591,012

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

32,27030,667
83,788
146,726
4,737,738

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

2,000,000
199,946
25,248,823(544,946)
26,903,823

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

752,695

1,332,021

43,336
6,592
802,624
27,706,448
32,444,187

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

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017(2)

Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Consolidated Statements of Earnings

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
methodCompany house defrayment income
Gain on surrender of insurance
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
Loss on renewal of brandImpairment loss
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)
29,134,631
9,034,279
20,100,351
14,986,915
5,113,435- 11 -(Thousand yen)
Fiscal Year Ended
December 31, 2017
(December 21, 2016 December 31, 2017)33,456,268
10,659,047
22,797,220
17,452,054
5,345,165

4,377
54,452

6,981
67,316–979

59,582
5,910
28,226
152,549

74,07814,43940,884
204,680

472,361
59,340–605
532,307
4,733,678

512,060
10,032
11,96218,006552,062
4,997,783

95
–
95

70
788,540
788,611

66,238–241,389
307,627
4,426,145
1,410,348(53,420)
1,356,928
3,069,216
3,069,216

48,144
520,594–568,739
5,217,656
1,438,644(38,174)
1,400,469
3,817,186
3,817,186

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017

Consolidated Statements of Comprehensive Income

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

Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)
3,069,216- 12 -(Thousand yen)
Fiscal Year Ended
December 31, 2017
(December 21, 2016 December 31, 2017)
3,817,186

15,474(268,114)(59,351)(311,991)
2,757,224

579,325
338,055(18,771)
898,609
4,715,795

2,757,224

4,715,795––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017(3)

Consolidated Statements of Changes in Shareholders’ Equity
Fiscal Year Ended December 20, 2016 (December 21, 2015 - December 20, 2016)(Thousand yen)
Shareholders’ equity
Capital stock

Balance at beginning ofcurrent period
Changes of items during
period2,000,000

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity199,748

23,440,262(542,094)

25,097,916

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period(1,260,656)(1,260,656)

3,069,216

3,069,216

198(3,196)(3,196)

344

542

–

198

1,808,560(2,852)

1,805,906

2,000,000

199,946

25,248,823(544,946)

26,903,823

Total accumulated
other comprehensive
incomeTotal net assets

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
period737,221

Foreign currencytranslation
adjustment
311,451

Remeasurements ofdefined benefit plans
65,944

1,114,616

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period26,212,533(1,260,656)
3,069,216(3,196)542
15,474(268,114)(59,351)(311,991)(311,991)

15,474(268,114)(59,351)(311,991)

1,493,914

752,695

43,336

6,592

802,624

27,706,448- 13 -

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017

Fiscal Year Ended December 31, 2017 (December 21, 2016 - December 31, 2017)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
period2,000,000

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity199,946

25,248,823(544,946)

26,903,823

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

(1,309,716)(1,309,716)

3,817,186

3,817,186

119(9,508)(9,508)

227

347

–

119

2,507,469(9,280)2,498,308

2,000,000

200,066

27,756,292(554,227)

29,402,131

Total accumulated
other comprehensive
incomeTotal net assets

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
period752,695

Foreign currencytranslation
adjustment
43,336

Remeasurements ofdefined benefit plans
6,592

802,624

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period27,706,448(1,309,716)
3,817,186(9,508)347
579,325

338,055(18,771)

898,609898,609579,325

338,055(18,771)

898,6093,396,917

1,332,021

381,392(12,178)

1,701,234

31,103,366- 14 -

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 31, 2017(4)

Consolidated Statements of Cash Flows(Thousand yen)
Fiscal Year Ended
December 31, 2017
(December 21, 2016 December 31, 2017)

Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
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 inventories
Increase (decrease) in notes and accounts payable trade
Other, net
SubtotalInterest and dividend income received
Income taxes paid
Net cash provided by (used in) 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
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
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- 15 -

4,426,145
1,083,053
241,389

5,217,656
1,278,755–

129,589(44,328)

33,743(3,196)(58,967)
7,428(58,830)

176,422
277,302(52,382)
10,214(74,297)–(979)

17,141–(95)
54,466(35,648)(788,540)(70)
48,144(402,947)(1,232,633)(710,690)(25,676)

47,738399,781390
4,806,360
59,647(1,510,759)
3,355,248

487,6035,641,322
75,003(1,369,467)
4,346,858(3,748,157)
1,500(520,297)(3,000)4,599(1,348)28,620(200,000)–
100,000(47,798)
15,591(3,314)
12,634(5,836)(4,366,808)(1,151,251)
300,091(386,997)(6,400)7,020(619)
61,605(1,439,880)
938,007–(315,192)
48,847–54,873(29,961)(1,919,858)(2,654)(1,259,571)(1,262,225)(9,161)(1,308,689)(1,317,850)(75,736)

81,441(2,349,522)
7,086,948
4,737,426

1,190,590
4,737,426
5,928,017