Milbon Co., Ltd.
FY2023 First Quarter (January 1, 2023 – March 31, 2023)
Financial Results Presentation Materials

May 15, 2023
© 2023 Milbon Co., Ltd.

0

Table of Contents
P2

Consolidated Operating Results

P3

Consolidated Sales by Product Category

P13

Consolidated Statement of Earnings

P14

Consolidated Trends in Capital Expenditures and R&D Expenses

P15

Trends in Fieldpersons (FPs)

P16

Consolidated Net Sales in Japan and Overseas

P17

Consolidated Operating Income in Japan and Overseas

P18

Outlook of Overseas Subsidiaries

P21

Appendix

NOTE: Figures by the brand are based on shipment value.
Milbon Co., Ltd. is hereinafter referred to as "the Group“.
Overseas subsidiary in each country is hereinafter referred to as "the Company“.

© 2023 Milbon Co., Ltd.

1

Consolidated Operating Results（FY2023 3 months）
 In Japan, the beauty trend remained unchanged, with our Premium Brands of the haircare products continuing to drive sales growth. Overseas, sales increased due to strong
performance in South Korea and the U.S.
 The gross profit margin declined due to increasing cost of raw materials, etc. In addition,
operating income decreased due to an increase in activity costs, but was 121.3% of theplan, well in line with the annual plan.
(Unit:million yen)

Increase/

FY2022% total
3 months

FY2023
Increase/
Decrease% total
3 months
Decrease ratio (%)

Net sales

9,635 100.0

10,340 100.0

705

7.3

Gross profit

6,451

67.0

6,750

65.3

299

4.6

SG&A expenses

4,954

51.4

5,555

53.7

600

12.1

Operating income

1,496

15.5

1,195

11.6

(301)

(20.1)

Ordinary income

1,633

17.0

1,167

11.3

(466)

(28.6)

Profit attributable toowners of parent

1,166

12.1

882

8.5

(284)

(24.4)© 2023 Milbon Co., Ltd.

2

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Net Sales (FY2023 3 months)
FY20223 months

FY20233 months

5,333(Unit: million yen)

Increase/
Decrease

5,969

Increase/
Decrease ratio (%)

636

11.9

•

Premium Brands led the growth in hair care sales with an 18.1% YoY increase. The Hair
Care Series Inmmetry Line, Aujua’s new product that met a wide range of customers’
needs, contributed to the significant growth of the brand’s overall sales. Both in Japan andoverseas, Global Milbon continued to grow steadily, with strong growth in sales in the U.S.
market.

•

The milbon:iD, an e-commerce platform for our Premium Brands, is supporting their
growth. At the end of the 1Q, the number of registered members reached approximately
490,000 (450,000 at the end of FY2022) and the number of registered salons totaled
5,100 (4,800 at the end of FY2022). E-commerce sales expanded steadily to 280 million
yen (170 million yen at the end of the 1Q of FY2022).

•

Professional Brands experienced steady YoY growth of 3.8%, driven by the successful
launch of the new “Sun Protect” line under the popular Elujuda brand, which effectively
tapped into the seasonal need. Moreover, the newly introduced styling brand “Miincurl,”catering to the trend of Korean hairstyles, has received strong support from hair stylists
and exceeded our initial expectations.

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

© 2023 Milbon Co., Ltd.

3

Consolidated Sales by Product Category [Hair Care Products (2)]New Products FY2023 3 months
Aujua Hair Care Series Inmmetry LineA new line that corrects distortion*1 in the hair and frees fromthe habit of blow drying and ironing to condition hair,leading to lustrous and manageable hair with just a dry.
(Unit: million yen)

FY2023 target

1,100

FY20233 months

193

Progress rate (%)

17.6*1 A condition in which curly or wavy hair suffers from damage, losing its shine and smoothness* Sales figures for each brand are based on shipment value.

© 2023 Milbon Co., Ltd.

4

Debut on February 11, 2023

Consolidated Sales by Product Category [Hair Care Products (3)]Elujuda Sun Protect
Elujuda’s new sun care products that shield hair from theharmful rays of the sun while maintaining its moisture throughout day.
Four items with different forms and usage timings to choose from.
(Unit: million yen)

FY2023 target

400

FY20233 months

165

Progress rate (%)

41.3

Debut on March 11, 2023

Miincurl Iron Keep Primer
A pre-ironing primer oil that protects hair from the heat of the iron andkeeps the ironed hair design soft and hydrated for a long time.
(Unit: million yen)

FY2023 target

150

FY20233 months

74

Progress rate (%)

49.6* Sales figures for each brand are based on shipment value.

© 2023 Milbon Co., Ltd.

5

Debut on March 11, 2023

Premium Brand: Aujua
Hair Care Series Inmmetry Line, launched in February, performed well.
Number of Salons*1
FY2022

6,022

FY2023

6,216(Unit: salons)
Increase/
Decrease

Increase/
Decrease ratio (%)

194

3.2

Consolidated Gross Sales (FY2023 3 months)
FY20223 months

1,839

FY20233 months

2,121

Increase/
Decrease(Unit: million yen)
Increase/
Decrease ratio (%)

281

15.3

Brand Concept

Product Range

A premium hair care brand born inconsideration of Japan’s social climate,culture, and characteristics of the hairof the Japanese people.

Aujua supports diverse perspectives on
beauty, now and into the future, byaddressing each individuals' hair and skinconcerns and offering the mostappropriate item for that time.

What is Aujua?
A wide range of product lineups offering
personalized treatment for eachindividual’s needs and hair type.

・5 series / 17 lines / 112 items
Eternal stage series
Aging care series(Number of salons)
7,000
6,000
5,000
4,000

3,000
2,000
1,000
0

Hair care series
Sales

Scalp care series

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

Climatic care series*1 Calculated based on the past year's shipment results for both Japan and overseas.
* Sales figures are based on shipment value.

© 2023 Milbon Co., Ltd.

Trends in sales & number of salons(Billion yen)
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0

6

Premium Brand: Global Milbon
Sales grew steadily both in Japan and overseas, especially in the U.S.
We are currently reviewing the count of

number of salons, so we have
Number of Salons*1 thedecided not to publish this information at
this time.

FY2022

FY2023－－

Increase/
Decrease

1,058

FY20233 months

1,312

Increase/
Decrease ratio (%)－

Consolidated Gross Sales (FY2023 3 months)
FY20223 months(Unit: salons)

Increase/
Decrease－(Unit: million yen)
Increase/
Decrease ratio (%)

254

24.1

Trends in sales & number of salons(Billion yen)
6

Brand Concept

What is “Global Milbon”?

5

A system hair care brand thatcultivates the “unique beauty” ofeach individual, achieving “360
Degree Beautiful Hair.”Based on the hair research technology wehave cultivated since our founding, weanalyzed diverse hair characteristics from
20 countries. Our analysis broke down thefactors for common hair damage
phenomena derived from our research,leading to the establishment of a new haircare system. This line contains ingredientsthat penetrates the shaft with its highaffinity to repair hair’s inner porosity andto improve hair’s overall integrity, from theinside out.

4

Countries and regionswith Salons

The brand is available in the following
countries and regions:Japan, USA, Hong Kong, China, Thailand,
Taiwan, Turkey, Malaysia, Vietnam,
Indonesia, the Philippines, Singapore,
Germany, Korea, Canada

3
2
1
0
2016

2017

2018

Sales

2019

2020

2021

2022

Number of salons

2023
Target＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

* Sales figures are based on shipment value.

© 2023 Milbon Co., Ltd.

(Number of salons)
24,00022,00020,00018,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000
0

7

Consolidated Sales by Product Category [Hair Coloring Products (1)]Consolidated Net Sales (FY2023 3 months)
FY20223 months

FY20233 months

3,800(Unit: million yen)

Increase/
Decrease

3,922

Increase/
Decrease ratio (%)

122

3.2

•

In Japan, sales of hair coloring products remained steady with a 1.9% YoY
increase. The trend of multi-tonal hair coloring, such as hair bleaching designs,
continued to grow among a wide range of age groups.

•

Overseas, sales increase by 11.5% YoY, mainly driven by South Korea, where
hair coloring products are the main source of sales. However, sales in China
dropped as a result of the surge in COVID-19 cases and economic instability
after the relaxation of the zero-COVID policy.

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

© 2023 Milbon Co., Ltd.

8

Premium Organic Brand: Villa Lodola
Increase in the number of new touchpoints and "Color Palette" launched last year
boosted sales compared to the same period in the previous fiscal year
Number of Salons(Unit: salons)

FY2022

FY2023

12,458

12,682

Increase/
Decrease

Increase/
Decrease ratio (%)

224

1.8

Consolidated Gross Sales (FY2023 3 months) (Unit: million yen)
FY20223 months

289

FY20233 months

306

Increase/
Decrease

Increase/
Decrease ratio (%)

16

5.7

Brand Concept
Organic brand that proposes lifestyles that fulfill the beauty of people andthe environment

What is Villa Lodola?
Based on the philosophy of "Beauty, the Organic Way“, the brand is fullycommitted to the natural environment not only in its products, but also in
its manufacturing process, packaging, and promotional tools.
All products are certified by ICEA, an Italian organic certification
organization. Organic hair care born in Italy, where nature's blessings bring
beauty to hair and skin.

Trends in sales & number of salons(Million yen)
1,600

(Number of salons)
16,0001,400

14,0001,200

12,0001,000

10,000

800

8,000

600

6,000

400

4,000

200

2,000

0

0

Sales

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

* Sales figures are based on shipment value.

© 2023 Milbon Co., Ltd.

9

Consolidated Sales by Product Category [Cosmetic Products (1)]Consolidated Net Sales (FY2023 3 months)
FY20233 months

FY20223 months

137(Unit: million yen)

Increase/
Decrease

126

(10)

Increase/
Decrease ratio (%)(7.7)• The number of touchpoints for introducing makeup items that can coordinate
with hair color has increased. However, a challenge is that makeup leads tofewer repeat purchases than skincare. We plan to implement strategies toconnect makeup with skincare and promote customer loyalty.
• A contributing factor to the sales decline was the reduced demand for the
regular-size Lotion, a best-selling product, in this quarter, following the releaseof the large-size Lotion at the end of last year.

* Sales figures for each brand are based on shipment value.

© 2023 Milbon Co., Ltd.

10

Consolidated Sales by Product Category [Cosmetic Products (2)]New Products FY2023 3 months
iMPREA Milky Soufflé UV
An airy, soufflé-textured sunscreen cream that blocks powerfulultraviolet rays and protects the skin from damage caused by dryness
and other factors to the stratum corneum.
(Unit: million yen)

FY2023 target32© 2023 Milbon Co., Ltd.

FY20233 months

26

Progress rate (%)

83.0

11

Debut on February 11, 2023

Premium Brand: iMPREAThe new product performed well, but sales declined slightly YoY
Number of Salons*1
FY2022

1,601(Unit: salons)

FY2023

Increase/
Decrease

1,743

Increase/
Decrease ratio (%)

142

8.9

Consolidated Gross Sales (FY2023 3 months) (Unit: million yen)
FY20223 months

137

FY20233 months

Increase/
Decrease

131

Increase/
Decrease ratio (%)

(5)

(4.2)

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, by utilizing their strengths.

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 of moisture in
the “horny layer keratin" on the surface of the skin, which holds the key tocomplexion.

“Revolutionize Your Aura with your Professional Stylist”
This is a communication method that takes advantage of the unique strengths of hair salons, in which the hair stylist crafts your aura byapproaching a total impression of both the hair and face.
We deliver an aura change that is unique to you.
*1 Calculated based on the past year's shipment results.
* Sales figures are based on shipment value.

© 2023 Milbon Co., Ltd.

12

Consolidated Statement of Earnings<Consolidated Statement of Earnings> (Unit: million yen)
FY20223 months

Net sales

Cost of sales

% to
sales

FY20233 months

% to
sales

9,635 100.0 10,340 100.0
3,183

33.0

3,590

34.7

<Breakdown of Net Sales by Product Category>(Unit: million yen)

FY20223 months

FY20233 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

Hair care products

5,333

5,969

57.7

636

11.9

Hair coloringproducts

3,800

3,922

37.9

122

3.2

Permanent wave
products

314

301

2.9

(13)

(4.4)

Cosmetic products

137

126

1.2

(10)

(7.7)

49

20

0.2

(28) (58.0)

OthersGross profit
SG&A
expenses

6,451
4,954

67.0
51.4

6,750
5,555

65.3

•

The effect of high raw material costs, which had notbeen evident in the 1Q of the previous fiscal year, wasthe main factor that lowered the gross profit margin.

•

The easing of restrictions led to increased sales
activities, which resulted in higher market
development expenses for major events, etc., andtravel and transportation costs. This caused theoperating income to decrease YoY, despite remaining
within the expected range.

•

Foreign exchange gains were recorded in the 1Q of
the previous fiscal year, but foreign exchange losses
were recorded in this fiscal year, which lowered theordinary income margin.

53.7

Operatingincome

1,496

15.5

1,195

11.6

Ordinary
income

1,633

17.0

1,167

11.3

Profitattributableto owners ofparent

1,166

12.1

882

8.5

© 2023 Milbon Co., Ltd.

<Major Factors for the Increase/Decrease>13Consolidated Trends in Capital Expenditures and R&D Expenses(Unit: million yen)

Category

FY2019FY2020

FY2021

FY2022

FY20223 months

FY2023
Plan

Capitalexpenditures

1,605

1,917

4,644

4,097

751

2,927

Depreciation andamortization

1,453

1,562

1,777

2,026

542

2,301

Amount

1,534

1,581

1,741

2,074

512

2,372

% to sales

4.2

4.4

4.2

4.6

5.0

4.8%

R&D exp.

FY2023 CAPEX Main Items (Plans)
Sales Offices, Studios• Establishment andmaintenance of businesslocations(Relocation of Fukuoka
Sales Office, etc.)

Digital•••milbon:iD
education:iD
Smart Salon (Digital marketing,etc.)

Production system•

Yumegaoka Factory(Machinery andequipment)
Thailand Factory(Machinery andequipment)

Others•Internal infrastructure,
production equipment, etc.

•

Innovation Center•© 2023 Milbon Co., Ltd.

14

Trends in Fieldpersons (FPs)
Fieldpersons Trends (by Country) (Average number of FPs during the period)
FY2021JAPANUSA
MILBON USA, INC.
CHINA
Milbon Trading(Shanghai) Co., Ltd.

SOUTH KOREA
Milbon Korea Co., Ltd.

Others *1

FY2022The number of Fieldpersons reported
represents the average number during theperiod and is not as of January 1. Please
note that the calculation method waschanged starting from FY2022 3Q, and thefigures for 2021 have been recalculated
accordingly based on the new method.

FY2023

328.2

335.4

351.0

102

105

-

13.2

13.0

12.5

68

102

-

29.8

31.6

33.5

72

66

-

26.0

32.8

36.0

130

126

-

36.0

36.2

36.0

41

63

-

Upper column: Average number of FPs during the period(persons)
Lower column: Net sales per FP (million yen)
(As of March 31, 2023)-10 FPs joined in October 2022, and are currently in
OJT on site.
-28 FPs are scheduled to join in April 2023.
(The above 38 FPs are not included in the left chart.)*1 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2023 Milbon Co., Ltd.

15

Consolidated Net Sales in Japan and Overseas
FY2023 3 months(Unit: million yen)

FY20223 months

FY20233 months

Increase/
Decrease

Increase/
Decrease
ratio

Changes in local
currency base*1

(%)

(%)

Net sales% to sales

Net sales% to sales

Consolidated net
sales

9,635

100.0

10,340

100.0

705

7.3

5.6

JAPAN

7,249

75.2

7,659

74.1

410

5.7

5.7

Overseas

2,385

24.8

2,681

25.9

295

12.4

5.5

USA

261

2.7

340

3.3

78

30.2

13.5

CHINA

578

6.0

588

5.7

10

1.9

(2.7)

SOUTH
KOREA

931

9.7

1,100

10.6

168

18.1

10.9

Other*2

614

6.4

651

6.3

37

6.1

1.5

[Reference] Exchange rate

(Unit: yen)

FY2022 3 months FY2023 3 months

USA（USD）

CHINA（CNY）
SOUTH KOREA（KRW）

116.3418.53

133.4419.41

0.09750.1038*1 Figures are the rates of change in real terms on a local currency basis.
*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2023 Milbon Co., Ltd.

16

Consolidated Operating Income in Japan and Overseas
FY2023 3 months(Unit: million yen)

FY20223 months
OperatingincomeFY20233 months

Operatingincome ratio(%)

OperatingincomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
operating income

1,496

15.5

1,195

11.6

(301)

(20.1)

JAPAN

1,146

15.8

881

11.5

(264)

(23.1)

Overseas

350

14.7

313

11.7

(37)

(10.6)(65)(25.1)(39)(11.5)

26

-

CHINA

9

1.7

22

3.8

12

133.2

SOUTH
KOREA

310

33.3

298

27.1

(12)

(4.0)

Other*

96

15.7

32

4.9

(64)

(66.6)

USA* Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2023 Milbon Co., Ltd.

17

Outlook of Overseas Subsidiaries (1)USA (Milbon USA)•

Global Milbon continues to achieve significant sales growth in terms of hair care products,
thanks to its high-quality products. The Premium Position, which has been launched as theluxury brand called the “Gold Line,” is steadily increasing its sales. The strong appeal of
the brand to affluent consumers has resulted in sales at new outlets, such as salons inluxury resort hotels.

•

The Company is actively undertaking initiatives to enhance sales for its hair coloringproducts. These efforts include conducting multiple one-day intensive hair color training
sessions for distributor representatives from different regions.

•

The profit deficit has narrowed due to the price increase implemented last November, theincreased profit from selling the higher-priced “Global Milbon Gold Line,” and the lower
shipping costs to the U.S. compared to the previous year.

Figures in the text are based on local currency.

© 2023 Milbon Co., Ltd.

18

Outlook of Overseas Subsidiaries (2)CHINA (Milbon China)•

Sales in January plummeted due to the effect of the Lunar New Year break and the spikein COVID-19 cases caused by the backlash of the zero-COVID policy relaxation. However,sales progressed at the planned level from February onward, resulting in a decline of
2.7% YoY in Q1 sales on a local-currency basis.

•Salon customers have been refraining from opting for high-priced services, such as color
services, due to the economic turmoil. Under these circumstances, the Company
continues its efforts to build trust by supporting salons through activities such as
proposing rational menus that contribute to customer loyalty. In May, we will hold a large
event targeting thousands of beauty industry professionals to communicate the role ofbeauty salons and the value of beauty in a changing society, with the aim of building
stronger relationships with them.

•

The one-time costs associated with the start of production at the China Factory, which
occurred in the same quarter of the previous fiscal year, did not occur this quarter, thusincreasing profits.

* Figures in the text are based on local currency.

© 2023 Milbon Co., Ltd.

19

Outlook of Overseas Subsidiaries (3)•SOUTH KOREA (Milbon Korea)•••

Hair coloring products, which make up more than 70% of total sales, continued toperform well. As future initiatives, the Company plans to strategically capture new young
hair stylists with ENOG, which was released in March, and further expand its mainstay
Ordeve Addicthy with the new color to be released in May and other products.
In the hair care category, Global Milbon is steadily increasing the number of touchpoints
and sales. The recently launched "Premium Position Enhancing Vivacity" in South Korea inMarch has gotten off to a strong start attributed to its high effectiveness in reducing hairloss, and it is expected to grow further in the future.

Profit decreased due to costs associated with aggressive hiring to enhance the Company’s
structure and expenses for major events, which were previously cancelled or suspended
during the COVID-19 pandemic.

* Figures in the text are based on local currency.

© 2023 Milbon Co., Ltd.

韓

20

•

•

<Appendix> Hair Care Brand Positioning Map
Premium

BrandsProfessional© 2023 Milbon Co., Ltd.

21

BrandsWith respect to the business forecasts included in this document, any
statement that is not historical fact is a forward-looking statement based on
information available and certain premises that are judged to be rational at
the time of the announcement. Please be aware that actual results may
differ from any forward-looking statements due to risks, uncertainties, and anumber of other factors.
© 2023 Milbon Co., Ltd.

22