Milbon Co., Ltd.

FY2021 Second Quarter (January 1, 2021 – June 30, 2021)
Financial Results Presentation Materials

August 6, 2021
© 2021 MILBON Co., Ltd.

0

Table of Contents
P3

Consolidated Operating Results

P4

Consolidated Sales by Product Category

P15

Consolidated Statement of Earnings

P16

Consolidated Trends in Capital Expenditures and R&D Expenses

P17

Trends in Market Related Data, Trends in FPs

P18

Consolidated Net Sales in Japan and Overseas

P19

Consolidated Operating Income in Japan and Overseas

P20

Outlook of Overseas Subsidiaries

P22

Appendix

P23

Progress in FY2021 (62 th Term)

NOTE :Figures by brand are based on consolidated gross sales figures.

© 2021 MILBON Co., Ltd.

1

Milbon Group
Financial Results for
FY2021 (62 th Term) Second Quarter

Masahiro Murai, Executive Director© 2021 MILBON Co., Ltd.

2

Consolidated Operating Results (FY2021 6 months)
 Despite differences depending on the area, customers began to return to salons,and also due to an increase in product sales, compared to last year, which wassignificantly affected by COVID-19, sales increased significantly by 23.3%.
Operating profit also rose 53.2% due to restrictions on activities following COVID19, which has continued since last year, and the effect of higher sales.
(Unit: million yen)

Increase/

FY2020% total
6 months

FY2021
Increase/
Decrease% total
6 months
Decrease ratio (%)

Net sales

15,869100.0

19,558

100.0

3,689

23.3

Gross profit

10,54066.4

12,907

66.0

2,367

22.5

SG&A expenses

8,151

51.4

9,248

47.3

1,097

13.5

Operating income

2,388

15.1

3,659

18.7

1,270

53.2

Ordinary income

2,102

13.3

3,355

17.2

1,252

59.5

Profit attributable toowners of parent

1,451

9.1

2,413

12.3

962

66.3

© 2021 MILBON Co., Ltd.

3

Consolidated Sales by Product Category [Hair Care Products (1)]Consolidated Sales (FY2021 6 months)
FY2020
6 months

FY2021
6 months

9,391(Unit: million yen)

Increase/
Decrease

11,288

1,896

Increase/
Decrease ratio (%)

20.2• Sales of premium brands grew significantly (+33.8% YoY) on the back ofconsumers' growing awareness of hair and salons' heightened awareness of
product sales. Aujua rose 30.1% YoY, as the Hair Care Series Repairlity Line,launched in February, became a hit due to its response to damages to popularbleached hair and effectiveness you can feel. Global Milbon sales increased
46.6% YoY due to continued steady growth overseas, including in the U.S. andChina. Expectations for future growth of PREMIUM Position launched in June.
• In professional brands, sales rose 11.9% YoY due to GRANDLINKAGE launchedin February and the new Elujuda Bleach Care product for bleached hair launched
in June.

* Sales growth by brand is based on consolidated gross sales.

© 2021 MILBON Co., Ltd.

4

Consolidated Sales by Product Category [Hair Care Products (2)]New Products

FY2021 6 months
Aujua Hair care Series Repairlity LineA hair care series that cares for hair damage due tobleach and makes a smooth hair from inside.
(Unit: million yen)
FY2021 target

800

FY2021
6 months

Progress rate (%)

604

75.6

February 10, 2021 Debut

GRANDLINKAGE
A new color care brand that sustains the colors andhair becomes easy to manage after coloring at thesalon.
(Unit: million yen)
FY2021 target

1,200© 2021 MILBON Co., Ltd.

FY2021
6 months

456

Progress rate (%)

38.0

5

February 9, 2021 Debut

Consolidated Sales by Product Category [Hair Care Products (3)]New Products

FY2021 6 months
Global Milbon PREMIUM Position
A new line of Global Milbon that pursues even higher
quality and leads to “more beautiful hair" that is shiny,
bouncy and rich in moisture.
(Unit: million yen)

FY2021 target

FY2021
6 months

400

Progress rate (%)

51

12.8

June 10, 2021 Debut

Elujuda Bleach CareOil-based leave-in treatments that give bleach designs
a smooth movement and bundle.
(Unit: million yen)
FY2021 target

500© 2021 MILBON Co., Ltd.

FY2021
6 months

178

Progress rate (%)

35.7

6

June 10, 2021 Debut

A Premium Brand, Aujua
Strong performance of new product Hair Care Series Repairlity Lines
Number of salons
FY2020 *(Unit: salons)

FY2021 *4,222

Increase/
Decrease

4,630

Increase/
Decrease ratio (%)

408

9.7

Consolidated sales (FY2021 6 months) (Unit: million yen)
FY2020
6 months

3,330

FY2021
6 months

4,332

Increase/
Decrease

Increase/
Decrease ratio (%)

1,002

30.1

Trends in sales & number of salons
8,000

4,500

7,000

4,000

Brand concept

Product range

A hair care brand that nurtures thebeauty of Japanese women’s hair,born from the climate, culture andhair characteristics of Japan

A wide-ranging line-up that suits the hair
texture of individual customers

6,000

・5 series

4,000

What is Aujua?

Eternal stage series (new)

3,000

Aging care series

2,000

Hair care series

1,000

Scalp care series

0Hair care that supports beauty, now andinto the future, by addressing eachindividual’s hair and skin concerns andchoosing the most appropriate item forthat time.
This is Aujua.

3,500
3,000

5,000

2,500
2,000
1,500
1,000
500
0

Climatic care series
・15 lines

Sales

・96 items

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

* Calculated based on the past year's shipment results for both Japan and overseas.

© 2021 MILBON Co., Ltd.

(Number of salons)
5,000(Million yen)
9,000

7

A Premium Brand, Global Milbon
Steady sales growth in line with an increase in the number of salons in each country
Number of salons
FY2020 *9,916(Unit: salons)

FY2021 *13,182

Increase/
Decrease

Increase/
Decrease ratio (%)

3,266

32.9

Consolidated sales (FY2021 6 months) (Unit: million yen)
FY2020
6 months

1,188

FY2021
6 months

1,741

Increase/
Decrease

Increase/
Decrease ratio (%)

553

46.6

Brand concept

What is “Global Milbon”?

A system hair care brand thatcultivates the “unique beauty” ofeach individual, with 360° shiny hair

We conducted an in-depth analysis of theinner structure of the hair of women from
20 countries around the world, using our
proprietary CT scanning technology, anddiscovered a universal form of hairdamage. Accordingly, we developed a haircare line containing ingredients capable ofrepairing such damaged hair andincreasing the density within each strandof hair.
“Global Milbon” is a system hair careproduct for developing shiny, beautiful hairfrom the core.

Countries with salonsJapan, USA, Hong Kong, China, Thailand,
Taiwan, Turkey, Malaysia, Vietnam,
Indonesia, the Philippines, Singapore,
Germany, Korea* Calculated based on the past year's shipment results for both Japan and overseas.

© 2021 MILBON Co., Ltd.

8

Trends in sales & number of salons(Million yen)
4,000

(Number of salons)
14,0003,500

12,0003,000

10,000

2,500

8,000

2,000

6,000

1,500

4,000

1,000

2,000

500
0

0
2016

2017

Sales

2018

2019

2020

Number of salons

2021
Targets＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

Consolidated Sales by Product Category [Hair Coloring Products (1)]Consolidated Sales (FY2021 6 months)
FY2020
6 months

5,594

FY2021
6 months(Unit: million yen)

Increase/
Decrease

7,124

1,529

Increase/
Decrease ratio (%)

27.3• Sales of hair coloring products in the quarter grew significantly compared to theprevious fiscal year Second Quarter, when there was a large decline in salon
treatment. However, sales were solid, rising 10.9% compared to 2019, prior to
the impact of COVID-19.
• In particular, the sales of fashion colors increased by 40.7% from the previous
fiscal year and by 25.6% compared to 2019, due to the strong popularity of
bleaches. Ordeve Addicthy continues to drive sales.
• On the other hand, gray colors rose 11.8% YoY and declined 6.3% compared to
2019. There is also a need to enjoy the design colors using bleaches, even if
they are gray hair, and there are more cases where fashion coloring agents areused.

© 2021 MILBON Co., Ltd.

9

Consolidated Sales by Product Category [Hair Coloring Products (2)]Core Product
FY2021 6 months
Ordeve Addicthy
Erases red-tinged brown with high saturation blue.
With clear and transparent color expression, it lets
customers freely realize individual hair color designs.
(Unit: million yen)
FY2020
6 months

1,878© 2021 MILBON Co., Ltd.

FY2021
6 months

2,880

Increase/
Decrease

Increase/
Decrease ratio (%)

1,001

53.3

10

FY2017 Debut

A Premium Organic Brand, Villa Lodola (1)Steady increase in number of salons due to continuation of planning and sales activities
Number of salons(Unit: salons)

FY2020

FY2021

10,128

10,646

Increase/
Decrease

Increase/
Decrease ratio (%)

518

5.1

Consolidated sales (FY2021 6 months) (Unit: million yen)
FY2020
6 months

500

FY2021
6 months

567

Increase/
Decrease

Increase/
Decrease ratio (%)

67

13.5

Brand concept
Nurtured in the soil of Italy, these gifts from nature bring out the authentic
beauty of your hair and scalp.

Trends in sales & number of salons(Million yen)

12,000

1,200

10,0001,000
600

Based on the concept of “Beauty, the Organic Way,” Villa Lodola is a trueorganic brand that thoroughly cares about the natural environment not
only for the product itself but also in its container, production phase andpromotional tools.
All of the products are certified by ICEA, an Italian authority. Villa Lodola
supports organic choices, with hair care products nurtured in the soil of
Italy, bringing out true beauty.

400

11

8,000

800

What is Villa Lodola?

© 2021 MILBON Co., Ltd.

(Number of salons)

1,400

6,000
4,000
2,000

200
0

0
Sales

Number of salons＊ Figures in the graph are based on non-consolidated total sales
through 2018 and on consolidated total sales since 2019.

A Premium Organic Brand, Villa Lodola (2)Core Product
FY2021 6 months
Villa Lodola ColorWith 92% natural ingredients, the product’s formulation utilizes thepower of plants. It brings comfort of an organic product across all
aspects, including during application, the finish and continued use.

Consolidated sales (FY2021 6 months) (Unit: million yen)
FY2020
6 months385© 2021 MILBON Co., Ltd.

FY2021
6 months

440

Increase/
Decrease

Increase/
Decrease ratio (%)

54

14.2

12

FY2015 Debut

Consolidated Sales by Product Category [Cosmetic Products]
Consolidated Sales (FY2021 6 months)
FY2021
6 months

FY2020
6 months

136(Unit: million yen)

Increase/
Decrease

293

Increase/
Decrease ratio (%)

156

114.6

• Sales exceeded the plan due to an increase in new salons, new product launches,and promotions.
• Additional sales of Imprea Cool Whitening Day Serum, which was sold out inMarch with limited sales volume, were made in June.

New Products
FY2021 6 months
Imprea Eyebrow Mascara・Eyebrow Pencil
Mascara for eyebrows with wide variety of color that can be chosen inline with hair color, and pencils for eyebrows that can be drawn
smoothly and continue to have a natural finish.
(Unit: million yen)

FY2021 target83© 2021 MILBON Co., Ltd.

FY2021
6 months

37

Progress rate (%)

45.2

13

March 1, 2021 Debut

A Premium Brand, Imprea
Sales increased due to growth in new salons since last year and the launch of new products.
Number of salons
FY2020 *645(Unit: salons)

FY2021 *Increase/
Decrease

890

Increase/
Decrease ratio (%)

245

38.0

Consolidated sales (FY2021 6 months) (Unit: million yen)
FY2020
6 months

136

FY2021
6 months

Increase/
Decrease

293

156

Increase/
Decrease ratio (%)

114.6

Brand concept

What is Imprea?

The brand concept of Imprea is “Revolutionize Your Aurawith your Professional Stylist”. We will provide new beauty
value by leveraging Professional Stylists’ ability to provide
solutions, which is one of the strengths of them.

Imprea is a salon exclusive brand created through joint research by KOSÉ,
which specializes in skin research, and Milbon, which specializes in hair research.
We will improve the complexion by establishing a good balance between the"corner-layer keratin" on the surface of the skin, which holds the key tocomplexion.

“Revolutionize Your Aura with your Professional Stylist”
Through communication that takes advantage of strength as a beautician, we propose impressions that comprehensively capture hair and facethrough beauticians, and deliver " Change Your Impression " to customers.

* Calculated based on the past year's shipment results.

© 2021 MILBON Co., Ltd.

14

Consolidated Statement of Earnings (FY2021 6 months)<Consolidated Statement of Earnings> (Unit: million yen)
FY2020
6 months

Sales
Cost of sales

15,869
5,329

% to
sales

100.0
33.6

FY2021
6 months

19,558
6,650

% to
sales

100.0
34.0

<Breakdown of net sales by product category>(Unit: million yen)

FY2020
6 months

FY2021
6 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

Hair care products

9,391

11,288

57.7

1,896

20.2

Hair coloringproducts

5,594

7,124

36.4

1,529

27.3

Permanent wave
products

660

740

3.8

79

12.0

Cosmetic products

136

293

1.5

156

114.6

85

111

0.6

26

31.3

OthersGross profit

10,54066.4

12,90766.0

SG&A
expenses

8,151

Operatingincome

2,388

15.1

3,659

18.7

Ordinary
income

2,102

13.3

3,355

17.2

Profitattributableto owners ofparent© 2021 MILBON Co., Ltd.

1,451

51.4

9.1

9,248

2,413

47.3

12.3

15

<Major factors for the increase/decrease>•

SG&A expenses rose year on year due to logistics expenses,
but SG&A expenses ratio declined as sales growth absorbed
 Logistics expenses:+ 528M (Direct delivery
products = Increase in sales ofpremium brands/Response toshortage airlift in the U.S.) Personnel expenses:+ 217M (increase in personnel,
salary increase, etc.)

 Market development
expenses:+151 M (Education:iD/Digital
Arena related) Travel expenses:△16M (restriction activities in
the aftermath of COVID-19

Consolidated Trends in Capital Expenditures and R&D Expenses(Unit: million yen)

FY2017FY2018FY2019FY2020

FY2021
Jan.–Jun.

FY2021
Plan

Capitalexpenditures

1,570

1,149

1,605

1,917

2,292

7,488

Depreciation andamortization

1,272

1,370

1,453

1,562

832

1,819

Amount

1,422

1,479

1,534

1,581

801

1,765

% to sales

4.3

4.2

4.2

4.4

4.1

4.6

Category

R&D exp.

FY2021 CAPEX Main Items (Plan)• Established Aoyama Sales Office• Acquisition of land for of the new training center / the Innovation Centre• Milbon Digital Arena (Digital virtual space system)• Salon education video platform• Expansion of the Thai factory• Factory construction in China© 2021 MILBON Co., Ltd.

16

Trends in Fieldpersons (FPs), Market Related Data
(Number of FPs / As of January 1, the beginning of theFieldpersons trends (by country) fiscal year (As of December 21 for 2017 and before))2017 *1

2018

2019

2020

2021

258

269

279

297

328

105

111

108

100

-

USA

12

13

13

17

17

MILBON USA, INC.

48

48

50

27

-

CHINA

19

22

21

30

30

Milbon Trading(Shanghai) Co., Ltd.

50

62

70

50

-

KOREA

23

25

30

32

32

Milbon Korea Co., Ltd.

84

82

77

79

-

33

33

35

38

38

31

37

39

34

-

JAPAN

Others *2

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
(As of June 30, 2021)
0 FPs joined in October 2020 no recruitment
activities in autumn
33 FPs joined in April 2021, and are currently
in training(The above 33 FPs are not included in the left
chart.)

Market Related Data (Japan)
FY2016
Number of businessestablishments(households)

172,304

Number of workers

443,241

Number of beauty
customers(thousand people)

37,023

Remarks
Bureau economy census of ministry
statistics of public management
Statistics Bureau, Ministry of Internal
Affairs and Communications:
Population statistics as of October 1st ofeach year Population statistics forfemales aged 15 to 64* Data in the Ministry of Health, Labour and Welfare's
Ministry of Health, Labour and Welfare administrative
report, which had been used for the number of salonsand beauticians in the "Market Trends,“until FY2020 Q1
was judged to differ greatly from the actual situation.
Accordingly, the number of business establishments andnumber of workers are shown in the data from the
Economy Census of the Statistics Bureau of the Ministryof Internal Affairs and Communications. The number ofworkers includes workers other than those with abeautician license.

*1 Because FY2017 was an irregular accounting period, performance is calculated with adjusted amounts for a 12-month period.
*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

17

Consolidated Net Sales in Japan and Overseas
FY2021 6 months(Unit: million yen)

FY2020
6 months

FY2021
6 months

Increase/
Decrease

Increase/
Changes in Local*1
Decrease ratio currency base

Net Sales% to sales

Net Sales% to sales

15,869100.0

19,558

100.0

3,689

23.3

21.8

JAPAN

13,37384.3

15,742

80.5

2,368

17.7

17.7

Overseas

2,495

15.7

3,816

19.5

1,321

52.9

44.0

USA

189

1.2

406

2.1

216

114.0

114.8

CHINA

642

4.0

1,091

5.6

449

69.9

55.9

KOREA

1,165

7.3

1,609

8.2

443

38.1

26.9

Other *2

497

3.1

709

3.6

211

42.5

41.4

Consolidated Net Sales

(%)

(%)

*1 Figures are the rates of change in real terms on a local currency basis. Current exchange rates of 107.82 yen to the U.S. dollar, 16.75 yen to theChinese yuan, and 0.0969 yen to the Korean won*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

18

Consolidated Operating Income in Japan and Overseas
FY2021 6 months(Unit: million yen)

FY2020
6 months
Operating
IncomeFY2021
6 months

Operatingincome ratio(%)

Operating
IncomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
Operating Income

2,388

15.1

3,659

18.7

1,270

53.2

JAPAN

2,360

17.7

3,074

19.5

713

30.2

27

1.1

585

15.3

557

2024.0(164)(86.5)(218)(53.8)

(54)

-

CHINA

95

14.8

269

24.7

174

183.9

KOREA

275

23.7

544

33.9

268

97.4

Other *

(179)

(36.0)

(10)

(1.5)

168

-

OverseasUSA* Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others© 2021 MILBON Co., Ltd.

19

Outlook of Overseas Subsidiaries (1)Figures in the text are based on local currency.

USA (Milbon USA)•

With lifting of the lock-down and restarting all activities, including visiting salons andbusiness trips, the company worked vigorously to capture new salons throughcollaboration with distributors, and sales grew significantly by 114.8% YoY and 31.3%
compared to the level Second Quarter 2019, prior to the impact of COVID-19. In hair care,
Global Milbon contributed to growth in both the number of salons and sales.

•

In addition to the excellent finish of Sophistone, hair coloring products for Europe and the
U.S., its functionality of curbing odor and easy application is highly valued, and the
distributors are aggressively rolling them out to new salons and is going well.

CHINA (Milbon China)•

Educational activities, 1 of Milbon's strengths, have been accepted in the market, and thenumber of salons with which it does business has steadily increased. Over the past few
years, the company has been expanding its geographical reach by increasing the numberof contracted agencies. As a result, sales rose 55.9% YoY and grew 39.1% compared to2019, prior to the impact of COVID-19.

•

Milbon products are becoming the preferred choice due to heightened awareness of haircare and a growing sense of value, and hair care products are also growing steadily.

© 2021 MILBON Co., Ltd.

20

Outlook of Overseas Subsidiaries (2)Figures in the text are based on local currency.

KOREA (Milbon Korea)•

Second Quarter is continuing to be highly regarded by the marketplace for activities thatmake full use of digital marketing in conjunction with salons. In addition, collaboration
with elite sales from nationwide distributors, which the company has been working on forsome time, has led to results, and sales grew 26.9% YoY.

•

Sales of hair coloring products continued to increase steadily, due in part to the strong
response of promotional videos for the introduction of new colors of Ordeve Addicthy.

•

In hair care, steady growth of new salons for both Aujua and Global Milbon continues.

© 2021 MILBON Co., Ltd.

21

<Appendix> Hair Care Brand Positioning Map
Premium

brand

Professional© 2021 MILBON Co., Ltd.

22

brandsMilbon Group
Progress in FY2021 (62 th Term)

Ryuji Sato, President and CEO© 2021 MILBON Co., Ltd.

23

Environment Surrounding Salons: Growing 3 Awareness

Awarenessof beauty
Material care forhair and skin inmask lifestyles

Awarenessof product sales

Awarenessof digital

Importance of
product sales tocompensate for the
decline in customer
traffic© 2021 MILBON Co., Ltd.

Sales/purchase without
visiting stores

24

Environment Surrounding Salons: Salon Sales Composition
Material Costs/Purchase Ratio as a Percentage of Salon Sales
Selling prices
from salon to consumer
Selling pricefrom distributor to salon
Selling pricefrom manufacturer
to distributor

Material cost

Color agents,
permanent agents,
Salon care menu
products

Technical sales

Product sales• Easy to be affected by a decreasein the number of customers• Increasing consumers' awareness of hair through
COVID-19• Improve shop enthusiasm for salons that want tocompensate for a reduction in the number of customers© 2021 MILBON Co., Ltd.

25

Environment Surrounding Salons: Accelerate of Suburban Consumption

Metropolitan
area

Decrease in customer count by around 10-15%

Average spend per customer increased by around
10% due to multiple menu items and product sales
Urban
residential
area

Local
suburbanareas© 2021 MILBON Co., Ltd.

The number of customers and sales have beenon the increase since before COVID-19 due tothe impact of neighborhood consumption andthe shift to a small commercial area.

No significant impact of COVID-19,
but population decline in the first place

26

Growth of Premium Brands
Growth in premium brands on the back of heightenedawareness of product sales

Net sales[million yen]

Sales and ratio of premium brands
to sales of hair care products※Using consolidated total sales figures

10,716
10,00012,317

10,100Up
33.8%

Hair care products

Premium brand

5,000

4,685

0

Grow into a scalethat accounts forhalf of all haircare products[43.7%][45.9%]

2019.
Cumulative
Second Quarter

2020.
Cumulative
Second Quarter© 2021 MILBON Co., Ltd.

6,200

4,633

[50.3%]※Hair care only

2021.
Cumulative
Second Quarter27

Milbon's DX Strategy

DX strategy for Customers and Salons
Milbon:iD

Education iD

Customer contact
point DX

Beautician
education DX

Area Marketing
Support
Digital marketing

Digital Arena
Digital virtual space

DX Strategy to Support
Aim to evolve and streamline the fieldperson system, 1 of Milbon's businessmodels© 2021 MILBON Co., Ltd.

28

DX Strategy for Customers and Salons-① milbon: iD

Expanded faster than expected since the service
launch in June 2020
*Milbon: iD = Online shopping service for salon customers

Number ofregistered stores

Number ofmembers signed up

E-commerce ratio[End of 2020 years][End of 2020 years][End of 2020 years]

Approx. 1,300 stores

Approx. 27,000

1.5%[End of 2021.6][End of 2021.6][End of 2021.6]

Approx.
70,0005.5%

Approx.
2,000 stores*Initial plan:
60000 at the end of 2021
© 2021 MILBON Co., Ltd.

29

*E-commerce ratio = The percentage of sales at
milbon:iD to the sales of products handled at
milbon:iD (excluding salon-care products and largesized products)

DX Strategy for Customers and Salons-② Education iD

Launched Education iD in April and promoted
digitization of beautician education activities
As of June 2021

•
•

•
•

Online learning not constrained by time & location
Beauty Sommelier certification for multi-skilled humanresource development
Contributing to improving productivity of salon
Opportunity for more beauticians to touch Milbon's
education

Registered
beauticians
6,500* Number of domestic
beauticians= approx. 0.5 million

SommelierParticipants
2,600© 2021 MILBON Co., Ltd.

30

DX Strategy for Customers and Salons-③ Digital Arena
Launched Milbon Digital Arena, a virtual event space, in June
as a place for beauticians to learn hair design technology•

6,800 downloads at the end of June (including 14% overseas)•

Launch event: 4,500 participants in 2 days•

DA-AWARD, a hair design contest for beauticians, was held in July using a digitalarena for the first time
⇒ More than 1,800 people from around the world participate in apps*(* Real implementation in 2019 ⇒ 850 participants)* DA(=Design Abilities): Milbon's educational event aimed at bringing beauticians to wake up their sensitivity and the design abilities of themselves© 2021 MILBON Co., Ltd.

31

DX Strategy for Customers and Salons-④ Area Marketing Support
Using digital information to evolve salon's area marketing support[Traditional Tools]
Utilization of resident
information from public
statistical data

Introduced a new tool that enables
aggregation of information on visitors
traveling/staying based on GPS information
on smartphones(Number of visitors to designated areas/age/residential areas, etc.)

Official statistics(Population
Census, etc.)

Resident(nighttime
population)

Increase in
the numberof tools usedby 1.5 times
year-on-year

Commuter/college(Daytime
population)* Using data processed in an unspecified way by millions of KDDI subscribers who received approval© 2021 MILBON Co., Ltd.

32

Progress in the Cosmetics Business
Against the backdrop of changes in consumers and shopping
centers under the COVID-19 situation, the cosmetics businessis working toward plans
Net sales

ConsumerAwareness of materials
for skin and hair inmask lifestyles

640M

Buying place
294M

COVID-19's suspensionof operations at
department stores, etc.
and a decrease inopportunities to go out
to urban centers

47M

136M

2019.
2021.
2020.
2021.
Cumulative
Cumulative
Cumulative
Annual plan
Second Quarter Second Quarter Second Quarter

Introduction contact number of salons
1,800

Salon

Merchandise

Increase in awarenessof product sales due todecrease in customer
visits and expectations
for new products

Beauticians can enjoy
and recommend it inconjunction with haircolors(Eyebrow Mascara,
Pencil)© 2021 MILBON Co., Ltd.

890
645
200
2019.
12-year-end

33

2020.
12-year-end

2021.
End of 6

2021.
Annual planGrowth of Overseas Subsidiaries

Over 30% sales growth in each country compared
to 2019 levels before the impact of COVID-19* Figures in the text are based on local currency.

Milbon USA

Milbon China

Milbon Korea+31.3%+39.1%+39.3%[compared to 2019.1H][compared to 2019.1H][compared to 2019.1H](*compared to 2020.1H:+114.8%)(*compared to 2020.1H:+55.9%)(*compared to 2020.1H:+26.9%)

・With the resumption of economic
activities, the movement of agents andsalons is becoming more active at once.

・

Expansion of distributors' areasof activity

・

Global Milbon Education Sales byDistributors

・Strong reputation for Sophistone's
product appeal

・

・

・

Effectiveness of Anh Co Tran, a global
creative director

Plant: Scheduled completion ofbuilding within the year, progress
toward test operation

Aqua Curl highly valued,
expected to be a seed for new
growth in the future・Preparation for R&D branch office・

Appointed hair color training personnel
in collaboration with key distributors▵ Loss of goods due to unexpectedorders and temporary increase inlogistics costs© 2021 MILBON Co., Ltd.

▵ COVID-19 re-expansion andtyphoon damage

34

Preannouncement for the Whole Financial

FY2020 Results

Amount(Unit: million yen)

Net sales

YoY change
Increase/
Decrease ratio(%)[Before revision][After revision]

FY2021 full year Targets
Amount(A)

YoY
Increase/
Decrease ratio(%)

FY2021 full year Targets
Amount(B)

Target before Target before
YoY
revision
revision
Increase/
Increase/
Increase/
Decrease ratio
Decrease
Decrease ratio
(%)
(B-A)
(%)

35,725(1.5)

38,2006.9

40,600

2,400

6.3

13.6

Domestic

29,880(1.7)

31,3184.8

33,100

1,782

5.7

10.8

Overseas

5,844

(0.2)

6,882

17.8

7,500

618

9.0

28.3

Operating income

6,394

(5.3)

6,420

0.4

7,800

1,380

21.5

22.0

Ordinary income

5,791

(7.1)

5,710

(1.4)

7,120

1,410

24.7

22.9

Profit attributable toowners of parent

4,204

(6.9)

4,050

(3.7)

5,100

1,050

25.9

21.3

[Reference: Overseas sales ratio]2020 16.4% ⇒ 2021 Plan (revised) 18.5%© 2021 MILBON Co., Ltd.

35

Track of Sales Growth
In the 2021 forecast, the year-on-year growth rate was large when the COVID-19 impact
was strong, but showed solid growth in line with the growth trajectory of the compound
annual growth rate (CAGR) prior to COVID-19

Compound annual growth rate
(CAGR) for the 5 years to 2019
=7.5%

Assuming the growthrate of 2020-2021 with
COVID-19 is about 5.8%

Net sales[million yen]

40,000[2021 Forecast]

33,45630,00025,2260

FY2014© 2021 MILBON Co., Ltd.

27,377FY201535,185

29,134FY201636,26635,72540,600* Adoption of "Accounting Standard for
Revenue Recognition" and otherstandards from Fiscal Year 2019

FY2017FY201836

FY2019FY2020

FY2021
Forecast

Revision of Full-Year Forecast (by Category)FY2020 Results

Amount(Unit: million yen)

Hair careproducts
Hair coloringproducts
Permanent wave
products
Cosmetic
products
OthersTotal© 2021 MILBON Co., Ltd.

YoY change
Increase/
Decrease ratio(%)[Before revision][After revision]

FY2021 full year Targets
Amount(A)

YoY
Increase/
Decrease ratio(%)

FY2021 full year Targets
Amount(B)

Target before Target before
YoY
revision
revision
Increase/
Increase/
Increase/
Decrease ratio
Decrease
Decrease ratio
(%)
(B-A)
(%)

21,135(0.9)

22,768

7.7

23,798

1,030

4.5

12.6

12,594(3.1)

13,112

4.1

14,400

1,288

9.8

14.3

1,372

(9.4)

1,416

3.2

1,485

69

4.9

8.2

360

118.3

640

77.4

640

0

0.0

77.4

262

(0.3)

264

0.7

277

13

4.9

5.6

35,725(1.5)

38,2006.9

40,600

2,400

6.3

13.6

37

Toward the Future[Capital Expenditures] ⇒ Increase in depreciation

Established
Aoyama Sales Office

Expansion of the Thai factory
Factory construction in China

The new training center
The Innovation Centre

Digitalinvestment[About the status of expenses] ⇒ Higher costs due to resumption of activities
and increased orders

Expenses,
travel expenses© 2021 MILBON Co., Ltd.

Logistics costs

38Formulation of New Medium-Term Business Plan
In this fiscal year, we will concentrate on the 18-Month Mission todevelop our business foundation, and plan to announce a new
medium-term business plan in February 2022.

"18-Month Mission"

2022 February

Formulation of
New Medium-TermBusiness Plan
(2022-2026)

Initiatives for the 4 stages/25 missions of"product sales," "education," "products,"
and "in-house measures"• Promote "365-Day Customer Concept,""Intellectual Sales," and "Multi-Skill
Human Resources“• Digital investments and overseas-related
up-front investments© 2021 MILBON Co., Ltd.

39

Interim Dividend Increase and Year-end Dividend Forecast Revision

FY2019FY2020(Unit: yen)

[Before revision][After revision]

FY2021
Forecast

FY2021
Forecast

End of 2Q

27

27

28

30

End of FY

29

29

28

33

Annual total

56

56

56

63

40.6%

43.3%

45.0%

40.2%

Consolidated dividend
payout ratio© 2021 MILBON Co., Ltd.

40

* 2021 interim dividend finalizedStatements concerning the future such as the earnings forecasts given in thisdocument are based on information currently in the possession of theCompany and on assumptions that the Company considers reasonable.

© 2021 MILBON Co., Ltd.

41