Consolidated Financial Results for the Nine Months Ended September 30, 2018
[Japanese GAAP]
October 26, 2018
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: November 9, 2018
Scheduled starting date of dividend payments: Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: NoneTEL: +81-3-3517-3915(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the nine months ended September 30, 2018 (January 1, 2018 - September 30, 2018)(1) Consolidated operating results
Net sales(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%

Operating income

Ordinary income

Million yen%
Million yen%
Million yen
Nine months ended September 30,
25,261
4,687
4,393
3,324
2018
Nine months ended September 20,
22,839
6.6
3,894
1.3
3,665
4.9
3,136
32.3
2017(Note) Comprehensive income
Nine months ended September 30, 2018: 3,395 million yen [-%] Nine months ended September 20, 2017: 3,327 million yen [80.3%]
Basic earnings per share
Yen
Nine months ended September 30,
2018
Nine months ended September 20,2017(Reference)
Equity in earnings (losses) of affiliates

Diluted earnings per share
Yen

101.55-95.80-Nine months ended September 30, 2018: (0) million yen

Nine months ended September 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 nine months ended
September 30, 2018, because the nine month period under review (January 1, 2018 to September 30, 2018) differs from that of the previous nine month period (December 21,
2016 to September 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 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
38,771

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

EquityNet assets
Million yen
32,85737,642As of September 30, 2018: 32,857 million yen

Equity ratio%
84.7

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

End of 3rd quarter

Year ended December 31, 2017

-

Yen
40.00

Year ending December 31, 2018

-

24.00

End of fiscal year

Yen
-Year ending December 31, 2018
(forecast)(Note) Changes to latest dividends forecast: NoneTotal

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 fiscal years
preceding 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
34,700Operating income% Million yen
6,160

Ordinary income% Million yen
5,640Profit attributable to
Basic earnings per shareowners of parent% Million yen%Yen
4,240
129.51(Note) Changes to latest performance forecasts: None(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 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) 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 of
September 30, 2018
As of
September 30, 2018
Nine months ended
September 30, 201833,117,234 shares
377,444 shares
32,740,096 shares

As ofDecember 31, 2017
As ofDecember 31, 2017
Nine months ended
September 20, 201733,117,234 shares
376,572 shares
32,742,592 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.

*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 Nine Months Ended September 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
Nine Months Ended September 20, 2017 and September 30, 2018 …………………………….…..…………............. 6
Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended September 20, 2017 and September 30, 2018 …………………………………….……............... 7(3)Notes regarding quarterly consolidated financial statements ……………………………………………………….….... 8Notes regarding going concern assumption ………………………………………...……....…………………………....

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

8

Segment information, etc. ………………………………………………...……………………………...………………. 8-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 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 third quarter of the fiscal year
under review covers the nine month period from January 1, 2018 to September 30, 2018, the third quarter of the previous fiscalyear covered the nine month period from December 21, 2016 to September 20, 2017 (for consolidated subsidiaries, the periodof October 1, 2016 to June 30, 2017). Therefore, year-on-year comparisons are not stated.
During the nine month period ended September 30, 2018, the Japanese economy continued on a moderate recovery trend aspersonal 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 aresult of the tightened monetary policy of the U.S. and intensified trade friction between the U.S. and China.
Amid this environment, the Milbon Group is working with salons premised on the goal of “aiming to improve laborproductivity by supporting lifetime hair designers who fulfill ‘lifetime beauty’ and enhance its dual time values.”
During the nine month period ended September 30, 2018, the upgraded version of Aujua released in November 2017 continued
to be very well received by the market. Additionally, the “milbon” brand, targeting the global market, also progressed steadily
in salons, and the premium brand remained strong. Furthermore, the fashion color Ordeve Addicthy, which was launched inFebruary of last year, also saw 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 nine month period ended September 30, 2018 amounted to25,261 million yen, operating income was 4,687 million yen, ordinary income was 4,393 million yen, and profit attributable toowners of parent was 3,324 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

Nine months ended
September 20, 2017
AmountNine months endedSeptember 30, 2018

Ratio (%)

AmountRatio (%)

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

Hair care products

13,21057.9

14,80058.6––

Hair coloring products

8,360

36.6

9,080

35.9

–

–

Permanent wave products

1,101

4.8

1,213

4.8

–

–

Others

167

0.7

167

0.7–

–

Total

22,839100.0

25,261100.0––[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)
Nine months ended
September 20, 2017
AmountNine months ended
September 30, 2018

Ratio (%)

AmountRatio (%)

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

Domestic sales

19,58085.7

21,32884.4––

Overseas sales

3,259

14.3

3,933

15.6

–

–

Total

22,839100.0

25,261100.0––-2-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2018(2)

Explanation on financial position
Total assets at the end of the nine month period ended September 30, 2018 increased by 1,128 million yen compared to the endof the previous fiscal year to 38,771 million yen.
Current assets increased by 1,148 million yen compared to the end of the previous fiscal year to 17,254 million yen. This was
mainly due to the 1,852 million yen increase in cash and deposits, the 1,202 million yen increase in merchandise and finishedgoods and the 2,036 million yen decrease in notes and accounts receivable - trade.
Non-current assets decreased by 19 million yen compared to the end of the previous fiscal year to 21,516 million yen.
Current liabilities decreased by 712 million yen compared to the end of the previous fiscal year to 5,282 million yen. This was
mainly due to the 580 million yen increase in income taxes payable, the 360 million yen increase in provision for bonuses, the1,178 million yen decrease in accounts payable – other, the 277 million yen decrease in provision for sales returns and the 193
million yen decrease in accounts payable - trade.
Non-current liabilities increased by 87 million yen compared to the end of the previous fiscal year to 631 million yen.
Net assets increased by 1,754 million yen compared to the end of the previous fiscal year to 32,857 million yen. This was duemainly to the 1,687 million yen increase in retained earnings and the 104 million yen increase in valuation difference on
available-for-sale securities attributable to factors such as higher prices of listed stocks.
As a result, the equity ratio changed from 82.6% at the end of the previous fiscal year to 84.7%. Net assets per share based on
the total outstanding shares as of the end of the period under review increased from 949.99 yen per share at the end of theprevious fiscal year to 1,003.60 yen per share.

(3)

Explanation on forward-looking statements including consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced
on July 25, 2018.

-3-Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 30, 2018

2.
(1)

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

Current Third Quarter(As of December 31, 2017)(As of September 30, 2018)

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 assetsLiabilities
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-

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

8,017,528
3,040,062
4,193,949
57,657
1,139,554
496,141
415,302(105,467)
17,254,729

6,861,729
2,169,817
5,029,802
12,981
552,412
14,626,742
943,654

6,738,763
2,183,520
5,031,470
14,186
573,751
14,541,692
972,277

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

4,740,259
281,152
11,9281,023,094(53,556)
6,002,879
21,516,849
38,771,578

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

952,739
1,356,160
1,366,707
14,526
679,532
912,624
5,282,291

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

53,806493,91983,794
631,520
5,913,811

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Nine Months Ended September 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 Third Quarter(As of September 30, 2018)

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

2,000,000
200,491
29,443,883(558,618)
31,085,756

1,332,021

1,436,350

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

360,833(25,173)
1,772,010
32,857,767
38,771,578

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

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Nine Months Ended September 20, 2017 and September 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 investment 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

Nine Months Ended
September 20, 2017
(December 21, 2016 September 20, 2017)
22,839,995
7,328,699
15,511,296
11,616,862
3,894,433-6-(Thousand yen)
Nine Months Ended
September 30, 2018
(January 1, 2018 September 30, 2018)25,261,684
7,601,789
17,659,894
12,972,677
4,687,2164,810
42,55927,79250,732
14,439–31,176
171,510

4,796
31,432–43,851
3,255
50,52853,666
187,530–

382

381,670–
11,962
6,685
400,318
3,665,626

451,876
29,377–
86
481,722
4,393,024

70
788,540
788,611229
310,341
310,570

15,89015,8904,438,347
1,354,095(52,450)
1,301,644
3,136,703
3,136,703

1,255
1,255
4,702,340
1,375,290
2,443
1,377,733
3,324,606
3,324,606

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

Nine Months Ended
September 20, 2017
(December 21, 2016 September 20, 2017)
3,136,703-7-(Thousand yen)Nine Months Ended
September 30, 2018
(January 1, 2018 September 30, 2018)
3,324,606

10,269202,190(21,536)
190,923
3,327,627

104,329(20,558)(12,994)
70,776
3,395,383

3,327,627

3,395,383––

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

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.

-8-