Consolidated Financial Results for the Nine Months Ended September 30, 2020
[Japanese GAAP]
November 13, 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: November 13, 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 nine months ended September 30, 2020 (January 1, 2020 - September 30, 2020)(1) Consolidated operating results
Net sales

Operating income

Nine months ended September 30, 2020

Million yen
25,214%(5.4)

Million yen
4,307%(16.8)

Million yen
3,842

Nine months ended September 30, 2019

26,651

9.0

5,175

10.4

4,804

(Note) Comprehensive income(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen%(20.0)
2,740(19.7)

Ordinary income

9.4

3,411

2.6

Nine months ended September 30, 2020: 1,639 million yen [(50.4)%] Nine months ended September 30, 2019: 3,307 million yen [(2.6)%]

Nine months ended September 30, 2020

Basic earnings per share
Yen
84.21

Nine months ended September 30, 2019104.21

Diluted earnings per share
Yen-(2) Consolidated financial position
Total assets
Million yen
40,025

As of September 30, 2020
As of December 31, 2019
(Reference)

EquityNet assets
Million yen
34,171

41,912As of September 30, 2020: 34,171 million yen

Equity ratio%
85.4

35,882

85.6

As of December 31, 2019: 35,882 million yen

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

End of 3rd quarter

Year ending December 31, 2019

-

Yen
27.00

Year ending December 31, 2020

-

27.00

-

-

-

Year ending December 31, 2020
(forecast)(Note) Changes to latest dividends forecast: None

End of fiscal year
Yen

-

Total

Yen
29.00

Yen
56.00

29.00

56.00

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 salesYear ending December 31, 2020

Million yen
34,900(Note) Changes to latest performance forecast: None

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
(3.8)
5,930
(12.2)
5,280(15.3)
3,840(15.0)
117.95

*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 the accounting standards, etc.
: None2) Changes in accounting policies other than those in 1) above

:

None

3) Changes in accounting estimates

:

None

4) 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 ofSeptember 30, 2020
As of
September 30, 2020
Nine months ended
September 30, 2020

33,117,234 shares
614,717 shares
32,538,723 shares

As ofDecember 31, 2019
As ofDecember 31, 2019
Nine months ended
September 30, 201933,117,234 shares
378,250 shares
32,739,431 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
Nine Months Ended September 30, 2019 and 2020 ..............................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended September 30, 2019 and 2020................................................................................................

7(3)

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

8(4)

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

9Notes regarding going concern assumption .................................................................................................................

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

9

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

9-1-

1. Qualitative Information on Consolidated Results for the Current Period(1)Explanation on operating results
During the nine-month period ended September 30, 2020, the Japanese economy was extremely challenging due to the ongoingstagnation of the global economy caused by the lifting of the COVID-19. Economic activities gradually resumed after thetermination of the state of emergency. Recently, however, the COVID-19, mainly in Europe and the United States, haverepeatedly fluctuated, and the outlook for the future does not warrant optimism.
In the beauty salon industry as well, customers have begun to return to salons due to the lifting of the state of emergency inlate May. However, in many urban beauty salons, customers have not yet fully returned, and it is necessary to keep in mind
trends in infectious diseases in the future.
Under these circumstances, our group has continued to devise market activities that are closely linked to salons, while giving
top priority to the safety of salons, distributors, and employees. Overseas, performance in South Korea has returned to a levelexceeding that of the same period of the previous fiscal year.
As a result, consolidated net sales for the third quarter of the fiscal year under review were 25,214 million yen (down 5.4%
year-on-year), operating income was 4,307 million yen (down 16.8% year-on-year), ordinary income was 3,842 million yen(down 20.0% year-on-year), and profit attributable to owners of parent was 2,740 million yen (down 19.7% year-on-year),
despite the impact of the rush to beat the consumption tax hike in September of the previous fiscal year.

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 30, 2019
AmountNine months ended
September 30, 2020

Ratio (%)

AmountRatio (%)

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

Hair care products

15,313

57.4

14,654

58.1

(658)

(4.3)

Hair coloring products

9,889

37.1

9,148

36.3

(741)

(7.5)

Permanent wave products

1,168

4.4

1,036

4.1

(131)

(11.2)

Cosmetic products

101

0.4

223

0.9

121

119.4

Other

178

0.7

150

0.6

(28)

(16.0)

26,651

100.0

25,214100.0(1,437)

(5.4)

Total

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)
Nine months ended
September 30, 2019
AmountNine months ended
September 30, 2020

Ratio (%)

AmountRatio (%)

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

Domestic sales

22,336

83.8

21,102

83.7(1,233)(5.5)

Overseas sales

4,315

16.2

4,111

16.3

(204)

(4.7)

Total

26,651

100.0

25,214100.0(1,437)

(5.4)

-2-

(2) Explanation on financial position
Total assets at the end of the third quarter under review decreased 1,887 million yen from the end of the previous fiscal year,
to 40,025 million yen.
Current assets decreased by 477 million yen from the end of the previous fiscal year to 19,853 million yen. The main factors
for the change were decreases of 680 million yen in notes and accounts receivable-trade and 444 million yen in cash anddeposits, and increases of 574 million yen in merchandise and finished goods and 152 million yen in raw materials and supplies.
Non-current assets decreased by 1,409 million yen from the end of the previous fiscal year to 20,172 million yen. The main
factors for the change were a decrease of 1,666 million yen in investment securities due to the sale of a portion of investment
securities held and a decrease in unrealized gains on the market value of listed stocks.
Current liabilities decreased by 280 million yen from the end of the previous fiscal year to 5,127 million yen. The main factors
for the change were increases of 396 million yen in provision for bonuses and 214 million yen in accounts payable-trade, anddecreases of 781 million yen in accounts payable-other and 214 million yen in income taxes payable.
Non-current liabilities increased by 104 million yen from the end of the previous fiscal year to 726 million yen.
Net assets decreased 1,711 million yen from the end of the previous fiscal year to 34,171 million yen. The main reasons forthe change were a decrease of 1,545 million yen in the acquisition of treasury stock, a decrease of 791 million yen in theamount of difference in the evaluation of other instruments due to the decrease of the valuation gain by the market value oflisted stocks, a decrease of 283 million yen in the exchange conversion adjustment account due to the high, and an increase of
913 million yen in the amount of the margin surplus.
As a result, the equity ratio changed from 85.6% at the end of the previous fiscal year to 85.4%. Net assets per share based on
the total number of shares issued at the end of the fiscal year were 1,051.34 yen, compared to 1,096.02 yen at the end of theprevious fiscal year.
(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 wereannouncement on August 5, 2020.
We cannot deny the possibility of unexpected fluctuations due to external factors, including the COVID-19. Therefore, we willpromptly revise our earnings forecasts if significant fluctuations are anticipated.

-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, net
LandConstruction 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 Third Quarter(As of September 30, 2020)

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

10,171,222
3,499,407
4,486,433
70,622
1,272,294
357,786(4,728)19,853,039

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

6,855,390
1,939,577
4,991,344
30,674584,266
14,401,253
1,319,937

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

2,324,351
82,504
157,458
683,332
1,261,583(58,381)4,450,849
20,172,040
40,025,079

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

1,011,571
1,698,312
676,516
793,840
946,922
5,127,163

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

3,947
643
542,238
179,738
726,567
5,853,731

(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-5-

Current Third Quarter(As of September 30, 2020)

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

2,000,000
222,490
34,179,362(2,108,260)
34,293,592

773,082
267,184(61,355)
978,91135,882,612
41,912,194(18,845)(46,422)(15,887)(41,090)(122,244)
34,171,347
40,025,079

(2)Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Nine Months Ended September 30, 2019 and 2020

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Company house defrayment income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Share of loss of entities accounted for using equity
methodSales discounts
Foreign exchange losses
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 sales of non-current assets
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 30, 2019
(January 1, 2019 September 30, 2019)
26,651,910
9,042,312
17,609,597
12,433,817
5,175,780(Thousand yen)
Nine Months Ended
September 30, 2020
(January 1, 2020 September 30, 2020)
25,214,042
8,548,138
16,665,904
12,358,616
4,307,287

12,40832,00812,90644,01369,662
171,000

20,30732,363
3,280
39,67473,509169,135

40,91687,184

470,230
31,281
280
542,7094,804,071

462,842
83,0191,223
634,270
3,842,152

799
799

114,578
114,578

3,403
11,256
14,6594,790,210
1,350,596
27,882
1,378,479
3,411,731
3,411,731

15,454
15,454
3,941,276
1,314,632(113,562)
1,201,069
2,740,206
2,740,206-6-

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended September 30, 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 ofparentComprehensive income attributable to non-controllinginterests

Nine Months Ended
September 30, 2019
(January 1, 2019 September 30, 2019)
3,411,731(Thousand yen)
Nine Months Ended
September 30, 2020
(January 1, 2020 September 30, 2020)
2,740,206(14,418)(131,849)
42,153(104,114)
3,307,617(791,927)(46,422)(283,071)
20,264(1,101,156)
1,639,050

3,307,617

1,639,050

-

-

-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 theBoard of Directors held on February 12, 2020. As a result, treasury stock increased by 1,545,063 thousand yen in the third
quarter of the current fiscal year, and at the end of the third quarter of the current fiscal year, treasury stock was 2,108,260
thousand yen.
(Segment information, etc.)
The Company omits segment information, as it operates just one business segment engaged in the manufacturing and sales ofhair cosmetics.

-8-