Consolidated Financial Results for the Three Months Ended March 31, 2020
[Japanese GAAP]May 12, 2020
Tokyo Stock Exchange, First Section

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
Scheduled filing date for quarterly report: May 15, 2020
Scheduled starting date of dividend payments: Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: None

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

1. Consolidated financial results for the three months ended March 31, 2020 (January 1, 2020 - March 31, 2020)(1) Consolidated operating results
Net sales

Operating income

Three months ended March 31, 2020

Million yen
7,825%(0.8)

Million yen
1,031%(18.5)

Million yen
835

Three months ended March 31, 2019

7,886

3.9

1,265

(9.0)

1,162

(Note) Comprehensive income

Three months ended March 31, 2020: (357) million yen [-%]

Three months ended March 31, 2020

Basic earnings per shareYen
18.45Three months ended March 31, 2019

25.72

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%
(28.1)
601(28.6)

Ordinary income

(3.8)

841

(21.7)

Three months ended March 31, 2018: 1,080 million yen [(3.4)%]

Diluted earnings per shareYen-(2) Consolidated financial position
Total assets
Million yen
37,930

As of March 31, 2020
As of December 31, 2019
(Reference)

EquityNet assets
Million yen
32,986

41,912As of March 31, 2020: 32.986 billion yen

Equity ratio%
87.0

35,88285.6As of December 31, 2019: 35.882 billion yen

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

Year ended December 31, 2019-Year ending December 31, 2020

-Yen
27.00

End of 3rd quarterEnd of fiscal year
Yen

Yen
29.00

-TotalYen
56.00

Year ending December 31, 2020
(forecast)(Note) Changes to latest dividends forecast: Yes
Because it is difficult to reasonably calculate the dividend forecast due to the spread of COVID-19, the dividend forecast for the fiscal year ending December 31, 2020 hasnot been determined. The Company will promptly disclose its earnings forecasts when it becomes possible to reasonably calculate them.

3. Consolidated operating forecasts for the fiscal year ending December 31, 2020 (January 1, 2020 - December 31, 2020)(Percentages show year-on-year changes.)
Net sales

Operating income

Ordinary income

Profit attributable toBasic earnings per shareowners of parent% Million yen%Yen-Million yen% Million yen% Million yen
Year ending December 31, 2020(Note) Changes to latest performance forecast: Yes
Due to the spread of COVID-19, it is difficult to reasonably calculate the earnings forecast. Therefore, the earnings forecast for the fiscal year ending December 31, 2020 has
not been determined yet. The Company will promptly disclose its earnings forecasts when it becomes possible to reasonably calculate them.

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

As ofMarch 31, 2020
As ofMarch 31, 2020Three months ended
March 31, 2020

33,117,234 shares
627,830 shares
32,612,847 shares

As ofDecember 31, 2019
As ofDecember 31, 2019
Three months ended
March 31, 201933,117,234 shares
378,250 shares
32,739,664 shares*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.

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

2(1)Explanation on operating results .................................................................................................................................

2(2)Explanation on financial position ...............................................................................................................................

3(3)Explanation on forward-looking statements including consolidated operating forecasts ............................................

3

2. Quarterly Consolidated Financial Statements and Main Notes ............................................................................................

4(1)Quarterly Consolidated Balance Sheets ......................................................................................................................

4(2)Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................

6

Quarterly Consolidated Statements of Earnings
Three Months Ended March 31, 2019 and 2020 ...................................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income(3)

Three Months Ended March 31, 2019 and 2020 ...................................................................................................

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

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

8Notes in case of any significant changes in shareholders’ equity .................................................................................

8Segment information, etc. ............................................................................................................................................

8Significant subsequent events ......................................................................................................................................

81

1. Qualitative Information on Consolidated Results for the Current Period(1) Explanation on operating results
During the first quarter of the current fiscal year, the Japanese economy deteriorated rapidly due to sluggish consumption fromthe fourth quarter of the previous year due to the consumption tax hike, as well as to requests to refrain from going out due to
COVID-19 from March onward. Looking ahead, there is a risk of further economic downturns as the impacts of infectious
diseases are expected to continue for the time being. In the beauty salon industry, in addition to the continued harsh businessenvironment caused by demographic changes, there are concerns about the impact of restrictions on salon sales due to COVID19 and a decrease in the number of salon customers.
Against this backdrop, we are addressing the theme of "Aiming for NEXT100, developing new possibilities to support theevolution of a lifetime beauty salon where a community of beauty and spiritual wealth exists."
In the first quarter of the fiscal year under review, the impacts of COVID-19 forced us to stop large events and seminars
scheduled after March. Although sales exceeded the previous year's level, we were greatly constrained by activities that would
lead to the next stage, such as the penetration of policies and the introduction of new products this year. In overseas markets,sales declined significantly in China, where the spread of COVD-19 was rapid. As a result, consolidated net sales amounted to
7,825 million yen (down 0.8% year on year), operating income amounted to 1,031 million yen (down 18.5%), ordinary income
amounted to 835 million yen (down 28.1%), and net income attributable to owners of the parent amounted to 601 million yen(down 28.6%).
Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below:[Breakdown of consolidated net sales by product category](Unit: Million yen)
Product category

Three months ended March 31, Three months ended March 31,20192020
AmountRatio (%)

AmountRatio (%)

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

Hair care products

4,323

54.8

4,424

56.6

101

2.3

Hair coloring products

3,175

40.2

2,995

38.3

(179)

(5.6)

Permanent wave products

337

4.3

291

3.7(45)(13.6)

Cosmetic products--71

0.971-

Other500.7

420.5(7)(15.9)

7,886

100.0

7,825

100.0(60)

(0.8)

Total

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Three months ended March 31,
2019
AmountThree months ended March 31,
2020

Ratio (%)

AmountRatio (%)

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

Domestic sales

6,428

81.5

6,590

84.2

161

2.5

Overseas sales

1,458

18.5

1,235

15.8(222)(15.2)

Total

7,886

100.0

7,825

100.0(60)

(0.8)

2

(2) Explanation on financial position
Total assets at the end of the first quarter under review decreased 3,981 million yen from the end of the previous fiscal year, to37,930 million yen.
Current assets decreased by 3,267 million yen from the end of the previous fiscal year to 17,062 million yen. The main factors
for the change were decreases of 3,404 million yen in cash and deposits and 536 million yen in notes and accounts receivabletrade, and an increase of 596 million yen in merchandise and finished goods.
Non-current assets decreased by 714 million yen from the end of the previous fiscal year to 20,867 million yen. The main factor
for the change was an 829 million yen decrease in investment securities due to a decrease in valuation gains on listed stocks.
Current liabilities decreased by 1,205 million yen from the end of the previous fiscal year to 4,201 million yen. The main factorsof change were decreases of 979 million yen in accounts payable-other, 621 million yen in income taxes payable, and an increaseof 322 million yen in accounts payable-trade.
Non-current liabilities increased by 120 million yen from the end of the previous fiscal year to 742 million yen.
Net assets decreased 2,896 million yen from the end of the previous fiscal year to 32,986 million yen. The main factors of thechange were 1,589 million yen in the purchase of treasury stock, and 561 million yen in valuation difference on available-forsale securities, 338 million yen in foreign currency translation adjustments due to the appreciation of the yen, and 347 million
yen in retained earnings due to the decrease in valuation gains on listed stocks.
As a result, the equity ratio changed from 85.6% at the end of the previous fiscal year to 87.0%. Net assets per share based on
the number of shares outstanding at the end of the period were 1,015.29 yen, compared to 1,096.02 yen at the end of the previous
fiscal year.

(3) Explanation on forward-looking statements including consolidated operating forecasts
Economic activity continues to stagnate as the spread of COVID-19 restricts outings and transfers worldwide. In the beauty
industry, we are not sure when sales restrictions for beauty salons and the reduction in visiting customers in April are going toconverge, making it difficult to calculate a reasonable estimate of our performance. Therefore, we cannot assume the expected
performance for the current fiscal year. The Company will promptly disclose its earnings forecasts when it becomes possible toreasonably calculate them.

32. Quarterly Consolidated Financial Statements and Main Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)Previous fiscal year
(As of December 31, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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, netLand
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
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 bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities

4

Current First Quarter(As of March 31, 2020)

10,615,390
4,180,186
3,912,361
34,781
1,120,202
470,610(3,185)
20,330,346

7,211,240
3,643,955
4,508,515
60,887
1,210,233
432,355(4,525)
17,062,663

7,023,638
2,007,962
5,001,021
84,801
581,100
14,698,524
1,174,902

7,001,415
1,894,654
4,990,676
57,063651,348
14,595,157
1,167,717

3,991,136
149,125
155,832
204,502
1,266,204(58,381)5,708,420
21,581,847
41,912,194

3,161,467
134,721155,078
468,554
1,243,525(58,381)
5,104,966
20,867,841
37,930,504

797,033
2,479,907
891,258
397,297
841,726
5,407,223

1,119,419
1,500,156
269,425
388,001
924,265
4,201,268

4,290
670
505,563
111,835
622,359
6,029,582

3,923
637
528,420
209,983
742,965
4,944,233

(Thousand yen)Previous fiscal year(As of December 31, 2019)
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

5Current First Quarter(As of March 31, 2020)

2,000,000
200,742
33,266,155(563,197)
34,903,700

2,000,000
200,742
32,918,274(2,152,907)
32,966,109

773,082
267,184(61,355)
978,91135,882,612
41,912,194

211,638(65,114)(71,761)(54,600)
20,161
32,986,271
37,930,504

(2) Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Three Months Ended March 31, 2019 and 2020

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Company house defrayment income
Refund of custom duty
Other
Total non-operating income
Non-operating expenses
Sales discounts
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Three Months EndedMarch 31, 2019
(January 1, 2019 March 31, 2019)
7,886,303
2,573,100
5,313,202
4,048,095
1,265,107(Thousand yen)Three Months Ended
March 31, 2020
(January 1, 2020 March 31, 2020)
7,825,824
2,592,507
5,233,317
4,202,128
1,031,188

2,820
232

2,543
236

7,951

-

5,726
9,644
6,977
33,351507
20,001
18,376
41,665136,020

150,596-

36,1072
136,023
1,162,435

49,289989
236,982
835,871

767
767

-

25
25
1,163,176
133,555
187,621
321,177
841,999
841,999

14,352
14,352
821,518
210,802
9,167
219,969
601,549
601,549

6Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2019 and 2020

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent
Comprehensive income attributable to non-controllinginterests

Three Months EndedMarch 31, 2019
(January 1, 2019 March 31, 2019)841,999(Thousand yen)Three Months Ended
March 31, 2020
(January 1, 2020 March 31, 2020)
601,549

206,483
17,527
14,051
238,062
1,080,061(561,444)(65,114)(338,946)
6,754(958,750)(357,200)

1,080,061(357,200)--7

(3) Notes regarding quarterly consolidated financial statements(Notes regarding going concern assumption)
None(Notes in case of any significant changes in shareholders' equity)
Companys acquired 249.5 thousand shares of treasury stock in accordance with a resolution approved at a meeting of the Boardof Directors held on February 12, 2020. As a result, treasury stock increased by 1,589,710 thousand yen in the first quarter of thecurrent fiscal year, to 2,152,907 thousand yen at the end of the first quarter of the current fiscal year.
(Segment information, etc.)【Segment information】
The Company omits segment information, as it operates just one business segment engaged in the manufacturing and sales ofhair cosmetics.
(Significant subsequent events)
At the meeting of the Board of Directors held on April 10, 2020, companies disposed of treasury stock (the "disposal of treasurystock" or "disposal") as restricted stock compensation.
1. Outline of the disposition(1) Date of disposal:(2) Class and number of shares to be disposed of:

May 8, 2020
13,153 shares of our common stock(3) Disposal price:(4) Total disposal price:

5,070 yen per share
66,685,710 yen(5) The persons subject to the allotment of shares, the numberof such persons, and the number of shares to be allotted:

7 directors (excluding outside directors) 11,572 shares
3 executive officers 1581 shares(6) Other:

Regarding this disposal of treasury stock, the Companyhas submitted a notice of securities under the Financial
Instruments and Exchange Act.

2. Purpose and reason of the disposition
At a meeting of the Board of Directors held on February 12, 2020, companies resolved to provide our directors (excludingoutside directors) with an incentive to continuously improve our corporate value, review our executive remuneration systemwith the aim of further promoting value sharing with shareholders, and introduce a restricted stock remuneration system.

8