Consolidated Financial Results for the Three Months Ended March 20, 2017
[Japanese GAAP]
March 31, 2017
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: April 28, 2017
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: +81-6-6928-2331(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the three months ended March 20, 2017 (December 21, 2016 - March 20, 2017)(1) Consolidated operating results
Net sales

Operating income

Three months ended March 20, 2017

Million yen
6,898

%
2.8

Million yen
786%(14.9)

Three months ended March 20, 2016

6,708

10.3

924

(7.3)

(Note) Comprehensive income

Million yen
717
813

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

Three months ended March 20, 2017

Basic earnings per share
Yen
32.88

Three months ended March 20, 2016

33.37

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%(11.8)
538(1.5)

Ordinary income(17.0)

546(14.0)

Three months ended March 20, 2016: 434 million yen [(53.3)%]

Diluted earnings per share
Yen-(2) Consolidated financial position
Total assets
Million yen
31,858

As of March 20, 2017
As of December 20, 2016
(Reference)

EquityNet assets
Million yen
27,88732,444As of March 20, 2017: 27,887 million yen

Equity ratio%
87.5

27,706

85.4

As of December 20, 2016: 27,706 million yen

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

Year ended December 20, 2016-

Year ending December 31, 2017-

Year ending December 31, 2017
(forecast)(Note) Changes to latest dividends forecast: None

Yen
38.00

40.00

End of 3rd quarter
Yen

End of fiscal year

Total

-

Yen
40.00

Yen
78.00

-

42.00

82.00

3. Consolidated operating forecasts for the fiscal year ending December 31, 2017 (December 21, 2016 - December 31, 2017)(Percentages show year-on-year changes.)
Net sales

Profit attributable toOperating income
Ordinary income
owners of parent% Million yen% Million yen% Million yen
%
5,550
5,100
3,580
-

Profit per share

Million yen
Yen
Year ending December 31, 201732,700218.67(Note) Changes to latest performance forecasts: None
The 58th term, which serves as the transition period for the change in the fiscal period, shall be 12 months plus 11 days from December 21, 2016 to December 31, 2017. For
consolidated accounting, overseas consolidated subsidiaries shall announce consolidated financial results on the basis of their respective individual results for the period
from October 1, 2016 to December 31, 2017.

*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: Yes3) Changes in accounting estimates: Yes4) Retrospective restatements: None(Note)The matter falls under Article 10, Paragraph 5 of the “Ordinance on the Terminology, Forms, and Preparation Methods of Quarterly
Consolidated Financial Statements.” For details, refer to “2. Summary Information (Notes) (3) Changes in accounting policies, changes inaccounting estimates and retrospective restatements” on page 4 of the supplementary materials.

(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 20, 2017
As ofMarch 20, 2017
Three months ended
March 20, 201716,558,617 shares
187,227 shares
16,371,649 shares

As ofDecember 20, 2016
As ofDecember 20, 2016
Three months ended
March 20, 2016

16,558,617 shares
186,816 shares
16,372,280 shares*These financial statements are not subject to the review of the quarterly financial statements.
*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 20, 2017

Contents of supplementary materials
1. Qualitative Information on Consolidated Results for the Current Period................................................................................... 2(1)

Qualitative information on consolidated operating results ................................................................................................. 2(2)

Qualitative information on consolidated financial position ............................................................................................... 3(3)

Qualitative information on consolidated operating forecasts ............................................................................................. 3

2. Summary Information (Notes) ................................................................................................................................................... 4(1)

Significant changes in subsidiaries during the period ........................................................................................................ 4(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements ................ 4(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements .................................... 4(4)

Additional information ...................................................................................................................................................... 4

3. Quarterly Consolidated Financial Statements ............................................................................................................................ 5(1)

Quarterly Consolidated Balance Sheets ............................................................................................................................. 5(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ....................... 7(3)

Notes regarding going concern assumption ....................................................................................................................... 9(4)

Segment information.......................................................................................................................................................... 9(5)

Notes in case of any significant changes in shareholders’ equity ....................................................................................... 9-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017

1.

Qualitative Information on Consolidated Results for the Current Period(1)

Qualitative information on consolidated operating results
During the three month period ended March 20, 2017, the Japanese economy continued on a moderate recovery trend, due toimprovement in the employment and income environment. However, the overall economic outlook remains uncertain, owing
to factors such as the protectionist policies of the new administration in the U.S., together with the concerns over an economic
slowdown in China and other Asian emerging economies. In the beauty industry, business conditions continue to posechallenges due to the adverse impact of demographic trends and other factors.
Amid this environment, the Milbon Group is working 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.”
Consolidated net sales during the three month period ended March 20, 2017 increased to 6,898 million yen (up 2.8% year-onyear). One of the factors behind the increase was that ORDEVE Addicthy, a product that lets customers enjoy the kind of
freedom in color design available to Europeans and Americans, got off to a strong start in the hair coloring product category.
Operating income was 786 million yen (down 14.9% year-on-year), ordinary income was 717 million yen (down 11.8% yearon-year), and profit attributable to owners of parent was 538 million yen (down 1.5 % year-on-year). This was mainly due toan increase in cost of sales associated with the extension work on the Yumegaoka Plant.

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]Three months ended
March 20, 2016
Product category
AmountRatio (%)

(Unit: Million yen)Three months ended
March 20, 2017
AmountRatio (%)

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

Hair care products

3,918

58.4

3,924

56.9

6

0.2

Hair coloring products

2,441

36.4

2,667

38.6

225

9.2

Permanent wave products

307

4.6

260

3.8

(47)

ሺ15.3)

Others

41

0.6

46

0.7

4

11.9

Total

6,708

100.0

6,898

100.0

189

2.8

[Breakdown of net sales into domestic and overseas sales]
Three months ended
March 20, 2016
Amount(Unit: Million yen)Three months ended
March 20, 2017

Ratio (%)

AmountRatio (%)

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

Domestic sales

5,739

85.6

5,856

84.9

116

2.0

Overseas sales

968

14.4

1,041

15.1

72

7.5

6,708

100.0

6,898

100.0

189

2.8

Total

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017(2)

Qualitative information on consolidated financial position
Total assets at the end of the three month period ended March 20, 2017 decreased by 586 million yen compared to the end of
the previous fiscal year to 31,858 million yen.
Current assets decreased by 883 million yen compared to the end of the previous fiscal year to 12,528 million yen. This was
mainly due to the 205 million yen decrease in cash and deposits, the 616 million yen decrease in notes and accounts receivable- trade, the 500 million yen decrease in securities (jointly managed designated money trusts, etc.), the 546 million yen increase
in merchandise and finished goods and the 127 million yen increase in raw materials and supplies.
Non-current assets increased by 296 million yen compared to the end of the previous fiscal year to 19,329 million yen. Thiswas due mainly to the 169 million yen increase in investment securities attributable to factors such as higher prices of listed
stocks.
Current liabilities decreased by 827 million yen compared to the end of the previous fiscal year to 3,763 million yen. This wasdue mainly to the 1,207 million yen decrease in accounts payable - other, the 439 million yen decrease in income taxes payable,
the 291 million yen increase in accounts payable - trade and the 265 million yen increase in provision for bonuses.
Non-current liabilities increased by 60 million yen compared to the end of the previous fiscal year to 206 million yen.
Net assets increased by 181 million yen compared to the end of the previous fiscal year to 27,887 million yen. This was due
mainly to the 116 million yen decrease in retained earnings, the 117 million yen increase in valuation difference on availablefor-sale securities attributable to factors such as higher prices of listed stocks and the 189 million yen increase in foreign
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 87.5%. Net assets per share based on
the total outstanding shares as of the end of the period under review increased from 1,692.33 yen per share at the end of theprevious fiscal year to 1,703.45 yen per share.

(3)

Qualitative information on 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, 2017.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017

2.
(1)

Summary Information (Notes)
Significant changes in subsidiaries during the period
None

(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements
None

(3)

Changes in accounting policies, changes in accounting estimates and retrospective restatements
Changes in accounting policies which are difficult to distinguish from changes in accounting estimates(Change in the depreciation method of property, plant and equipment)
The Company had previously used the declining-balance method for depreciation of property, plant and equipment. However,effective from the first quarter ended March 20, 2017, the straight-line method has been adopted.
This change came about as a result of reviewing the relationship between future manufacturing output and facility maintenancecosts such as depreciation and repair costs, upon completion of investments in the large-scale production facilities in theprevious fiscal year. Consequently, the Company determined that the straight-line method would be reasonable for allocating
costs in a more appropriate manner.
As a result, depreciation for the three month period ended March 20, 2017 decreased by 120,354 thousand yen, and operating
income increased by 119,125 thousand yen, ordinary income and profit before income taxes increased by 120,354 thousand
yen, respectively, as compared with the figures calculated using the previous method.

(4)

Additional information(Application of the Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from the first quarter ended March 20, 2017, the Company adopted the “Implementation Guidance on Recoverabilityof Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017

3.
(1)

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

Current First Quarter(As of December 20, 2016)(As of March 20, 2017)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
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
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
Other
Total non-current liabilities
Total liabilities-5-4,023,328
3,805,519
1,000,000
2,974,165
36,684
883,147
862,383(173,901)
13,411,329

3,818,150
3,189,042
500,000
3,520,306
34,4791,010,987
613,253(157,987)
12,528,231

6,795,092
2,377,617
5,154,087
21,093
333,243
14,681,134
789,601

6,773,953
2,305,074
5,165,432
35,672409,653
14,689,786
858,499

2,621,957
249,854743,866(53,556)3,562,121
19,032,857
32,444,187

2,791,403
250,967805,220(66,041)
3,781,551
19,329,837
31,858,069

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

978,857
1,581,183
238,453
12,763
402,591
549,510
3,763,360

32,270114,456
146,726
4,737,738

36,314
170,503206,818
3,970,178

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017

(Thousand yen)Previous Fiscal Year(As of December 20, 2016)
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-6-

Current First Quarter(As of March 20, 2017)

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

2,000,000
200,066
25,132,185(547,177)
26,785,074

752,695

870,291

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

233,110(585)
1,102,816
27,887,890
31,858,069

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017
(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Three Months Ended March 20, 2016 and 2017

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
Other
Total non-operating income
Non-operating expenses
Sales discounts
Foreign exchange losses
Depreciation
Other
Total non-operating expenses
Ordinary 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, 2016
(December 21, 2015 March 20, 2016)
6,708,575
2,145,906
4,562,668
3,637,852
924,816-7-(Thousand yen)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

1,855
192
–
14,0482,626
2,986
21,7091,937–
37,257
16,120–4,037
59,352

111,796
20,637–392
132,826
813,699

121,409–
7,177
11
128,597
717,408

343
343
813,356
343,739(76,791)
266,948
546,407546,407507
507
716,901
206,167(27,500)
178,667
538,234
538,234

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017
Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended March 20, 2016 and 2017

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

Three Months Ended
March 20, 2016
(December 21, 2015 March 20, 2016)
546,407-8-(Thousand yen)Three Months Ended
March 20, 2017
(December 21, 2016 March 20, 2017)538,234(125,812)
19,888(5,754)(111,677)
434,730

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

434,730

838,426––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 20, 2017(3)

Notes regarding going concern assumption
None

(4)

Segment information
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.

(5)

Notes in case of any significant changes in shareholders’ equityNone-9-