Consolidated Financial Results for the Six Months Ended June 30, 2018
[Japanese GAAP]
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: August 10, 2018
Scheduled starting date of dividend payments: August 22, 2018
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (For institutional investors and analysts)

July 25, 2018
Tokyo Stock Exchange, First Section

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

1. Consolidated financial results for the six months ended June 30, 2018 (January 1, 2018 - June 30, 2018)(1) Consolidated operating results
Net sales
Six months ended June 30, 2018
Six months ended June 20, 2017
(Note) Comprehensive income

Six months ended June 30, 2018

Operating income

Million yen
16,802%-Million yen
2,975

%
-

14,956

5.2

2,333

(3.7)

Six months ended June 30, 2018: 2,230 million yen [-%]
Basic earnings per share
Yen
65.28

Six months ended June 20, 2017
(Reference)

Million yen
2,746
2,147

(1.9)

1,508

3.0

Six months ended June 20, 2017: 2,117 million yen [77.1%]

Diluted earnings per share
Yen
-

46.06

Equity in earnings (losses) of affiliates(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
2,137
-

Ordinary income-

Six months ended June 30, 2018: (0) million yen

Six months ended June 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 six months ended June 30,
2018, because the six month period under review (January 1, 2018 to June 30, 2018) differs from that of the previous six month period (December 21, 2016 to June 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
38,685

As of June 30, 2018
As of December 31, 2017
(Reference)

EquityNet assets
Million yen
32,47837,642As of June 30, 2018: 32,478 million yen

Equity ratio%
84.0

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

-

Yen
40.00

Year ending December 31, 2018

-

24.00

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

End of 3rd quarterEnd of fiscal year

Yen

Total

-

Yen
52.00

Yen
92.00

-

24.00

48.00

(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 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, 201834,700(Note) Changes to latest performance forecasts: Yes

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
6,160
5,640
4,240
129.51(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.
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: None3) Changes in accounting estimates: None4) Retrospective restatements: None(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period(including treasury shares)
2) Number of treasury shares at the end of the period
3) Average number of shares during the period(cumulative)

As ofJune 30, 2018
As ofJune 30, 2018
Six months ended
June 30, 201833,117,234 shares
377,284 shares
32,740,216 shares

As ofDecember 31, 2017
As ofDecember 31, 2017
Six months ended
June 20, 201733,117,234 shares
376,572 shares
32,742,918 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 Six Months Ended June 30, 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
Six Months Ended June 20, 2017 and June 30, 2018 ………………………………………….…..………….............

6

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 20, 2017 and June 30, 2018 ………………………………………………….……...............

7(3)

Quarterly Consolidated Statements of Cash Flows………………………………………………….……......................

8(4)

Notes regarding quarterly consolidated financial statements ……………………………………………………….….... 9
Notes regarding going concern assumption ………………………………………...……....…………………………....

9

Notes in case of any significant changes in shareholders’ equity …………………...……....……….………………......

9

Segment information, etc. ………………………………………………...……………………………...………………. 9-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 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 second quarter of the fiscal year underreview covers the six month period from January 1, 2018 to June 30, 2018, the second quarter of the previous fiscal year covered
the six month period from December 21, 2016 to June 20, 2017 (for consolidated subsidiaries, the period of October 1, 2016 to
March 31, 2017). Therefore, year-on-year comparisons are not stated.
During the six month period ended June 30, 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, concerns surround the overall economic outlook regarding the impact on the global economy, as a result of thetightened monetary policy and protectionist trade policy of the U.S.
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 six month period ended June 30, 2018, the upgraded version of Aujua released in November 2017 continued to bevery well received by the market. Additionally, the “milbon” brand, targeting the global market, also progressed steadily insalons, and the premium brand remained strong. Furthermore, the fashion color Ordeve Addicthy, which was launched in
February of last year, also saw significant growth. In overseas markets, the East Asian region continued to show steady
performance.
As a result of the above efforts, consolidated net sales during the six month period ended June 30, 2018 amounted to 16,802
million yen, operating income was 2,975 million yen, ordinary income was 2,746 million yen, and profit attributable to ownersof parent was 2,137 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

Six months ended
June 20, 2017
AmountSix months ended
June 30, 2018

Ratio (%)

AmountRatio (%)

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

Hair care products

8,680

58.0

9,995

59.5

–

–

Hair coloring products

5,462

36.5

5,886

35.0

–

–

Permanent wave products

709

4.8

819

4.9

–

–

Others

104

0.7

101

0.6

–

–

Total

14,956100.0

16,802

100.0

–

–

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Six months ended
June 20, 2017
AmountSix months ended
June 30, 2018

Ratio (%)

AmountRatio (%)

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

Domestic sales

12,84785.9

14,18884.4––

Overseas sales

2,109

14.1

2,614

15.6

–

–

Total

14,956100.0

16,802

100.0

–

–

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Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018(2)

Explanation on financial position
1)

Assets, liabilities and net assets
Total assets at the end of the six month period ended June 30, 2018 increased by 1,042 million yen compared to the end of
the previous fiscal year to 38,685 million yen.
Current assets increased by 943 million yen compared to the end of the previous fiscal year to 17,050 million yen. This was
mainly due to the 1,201 million yen increase in cash and deposits, the 841 million yen increase in merchandise and finishedgoods and the 1,299 million yen decrease in notes and accounts receivable - trade.
Non-current assets increased by 98 million yen compared to the end of the previous fiscal year to 21,634 million yen.
Current liabilities decreased by 449 million yen compared to the end of the previous fiscal year to 5,546 million yen. Thiswas mainly due to the 264 million yen increase in income taxes payable, the 261 million yen decrease in provision for sales
returns and the 136 million yen decrease in accounts payable - trade.
Non-current liabilities increased by 116 million yen compared to the end of the previous fiscal year to 660 million yen.
Net assets increased by 1,375 million yen compared to the end of the previous fiscal year to 32,478 million yen. This wasdue mainly to the 1,285 million yen increase in retained earnings and the 226 million yen increase in valuation difference
on available-for-sale securities attributable to factors such as higher prices of listed stocks, and the 124 million yen decreasein foreign currency translation adjustment attributable to the strong yen.
As a result, the equity ratio changed from 82.6% at the end of the previous fiscal year to 84.0%. Net assets per share basedon the total outstanding shares as of the end of the period under review increased from 949.99 yen per share at the end of
the previous fiscal year to 992.03 yen per share.

2)

Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the six month period ended June 30, 2018 increased by
1,202 million yen compared to the end of the previous fiscal year to 7,130 million yen, as a result of using the net cash
provided by operating activities for the payment of income taxes and the payment of dividends.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 2,495 million yen. This was mainly the result of posting 3,051 million
yen in profit before income taxes, depreciation of 670 million yen, the 939 million yen increase in inventories, the 1,287
million yen decrease in notes and accounts receivable - trade and 730 million yen in income taxes paid.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 396 million yen. This was mainly due to the purchase of property, plantand equipment of 626 million yen, the purchase of intangible assets of 241 million yen and proceeds from sales of investment
securities of 471 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 853 million yen. This was mainly due to the cash dividends paid toshareholders of 850 million yen.

(3)

Explanation on forward-looking statements including consolidated operating forecasts(Operating forecasts for the fiscal year ending December 31, 2018)
In terms of the full-year forecast, we have revised the previous consolidated operating forecasts, which were announced on
February 14, 2018. For more details, please refer to the “Revision of Consolidated Operating Forecasts” published on July 25,
2018.

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Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018

2.
(1)

Quarterly Consolidated Financial Statements and Main Notes
Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year(As of December 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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, net
Machinery, equipment and vehicles, net
LandConstruction in progress
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
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-

Current Second Quarter(As of June 30, 2018)

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

7,366,388
3,776,802
3,833,405
50,149
1,070,432
583,956
472,032(102,530)
17,050,637

6,861,729
2,169,817
5,029,802
12,981
552,412
14,626,742
943,6546,737,593
2,127,706
5,025,797
45,014615,325
14,551,438
970,4634,748,113
275,1889,750
996,332(63,862)
5,965,522
21,535,919
37,642,605

4,908,539
278,136
10,956
978,987(63,862)
6,112,757
21,634,659
38,685,297

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

1,009,197
2,449,950
1,050,709
31,071
353,354651,8315,546,114

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

47,316
528,833
84,048660,198
6,206,312

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 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 Second Quarter(As of June 30, 2018)

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

2,000,000
200,381
29,042,186(557,733)
30,684,834

1,332,021

1,558,225

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

256,766(20,841)
1,794,149
32,478,984
38,685,297

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Six Months Ended June 20, 2017 and June 30, 2018

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Company house defrayment income
Gain on surrender of insurance
Subsidy income
Other
Total non-operating income
Non-operating expenses
Share of loss of entities accounted for using equity
methodSales 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 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

Six Months Ended
June 20, 2017
(December 21, 2016 June 20, 2017)
14,956,764
4,887,391
10,069,372
7,736,350
2,333,022-6-(Thousand yen)
Six Months Ended
June 30, 2018
(January 1, 2018 June 30, 2018)
16,802,867
5,050,146
11,752,721
8,777,371
2,975,349

2,991
8,352
8,592
33,203––
26,24879,388

3,323
20,975–29,892
3,255
50,528
9,738
117,714–103

246,739–
11,962
6,588
265,290
2,147,120

296,658
49,496–
84346,3422,746,720

–
–
–

47
305,980
306,028954
954
2,146,165
520,603117,321637,924
1,508,240
1,508,240

1,245
1,245
3,051,503
1,019,872(105,520)
914,351
2,137,151
2,137,151

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018
Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended June 20, 2017 and June 30, 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 ofparentComprehensive income attributable tonon-controlling interests

Six Months Ended
June 20, 2017
(December 21, 2016 June 20, 2017)
1,508,240-7-(Thousand yen)
Six Months Ended
June 30, 2018
(January 1, 2018 June 30, 2018)
2,137,151

430,684
193,344(14,357)
609,671
2,117,912

226,204(124,626)(8,663)
92,9152,230,066

2,117,912

2,230,066––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018(3)

Quarterly Consolidated Statements of Cash Flows(Thousand yen)
Six Months Ended
June 30, 2018
(January 1, 2018 June 30, 2018)

Six Months Ended
June 20, 2017
(December 21, 2016 June 20, 2017)
Cash flows from operating activities
Profit before income taxes
Depreciation
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
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
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-8-2,146,165
553,015

3,051,503
670,262(6,139)(16,950)(10,121)(844)(19,343)6,241(11,344)

35,840(261,429)(15,431)2,537(24,299)–

103(16,498)––954

15,870(305,980)
(47)
1,245

99,152

1,287,331(409,398)(939,465)

58,790(120,660)

231,5812,622,211
11,128(640,538)
1,992,801(178,812)
3,201,616
24,270(730,545)
2,495,341(419,815)
300,000(216,798)(3,150)3,013(430)
51,407(1,434,980)–(67,867)
7,446–(4,186)(1,785,360)(626,386)
84(241,930)(2,010)
2,818
(139)
–
–
471,395(8,627)
11,365
6,589(9,722)(396,565)(3,682)(653,968)(657,650)(3,191)(850,320)(853,512)

46,198(42,500)(404,011)
4,737,426
4,333,415

1,202,763
5,928,017
7,130,781

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 30, 2018
(4)

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.

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