Milbon Co., Ltd.

FY2020 Second Quarter (January 1, 2020 – June 30, 2020)
Financial Results Presentation Materials

August 5, 2020
Copyright © 2020 Milbon. All rights reserved.

0Table of Contents
P3

Consolidated Operating Results

P4

Consolidated Net Sales by Product Category

P14

Consolidated Statement of Earnings

P15

Consolidated Trends in Capital Expenditures and R&D Expenses

P16

Trends in FPs, Market Related Data

P17

Consolidated Net Sales in Japan and Overseas

P18

Consolidated Operating Income in Japan and Overseas

P19

Outlook of Overseas Subsidiaries

P21

Appendix

P22

Progress in FY2020 (61th Term)

Copyright © 2020 Milbon. All rights reserved.

1

Milbon Group
Financial Results for
FY2020 (61th Term) Second Quarter

Masahiro Murai, Executive Director

Copyright © 2020 Milbon. All rights reserved.

2

Consolidated Operating Results (FY2020 6 months)
 Sales and profits declined due to the impact of restrictions on the sales ofbeauty salons and restraint from outing due to the issuance of Japan's
Emergency Declaration.
 Overseas, South Korea and China are expected to return to a recovery trend,
but recovery in the U.S., which is heavily affected by infectious diseases, is
expected to take time.
(Unit: million yen)
Increase/

FY2019% total
6 months

FY2020
Increase/
Decrease% total
6 months
Decrease ratio (%)

Net sales

17,242100.0

15,869100.0(1,373)(8.0)

Gross profit

11,496

66.7

10,540

66.4

(955)

(8.3)

SG&A expenses

8,406

48.8

8,151

51.4

(255)

(3.0)

Operating income

3,089

17.9

2,388

15.1

(700)

(22.7)

Ordinary income

2,824

16.4

2,102

13.3

(721)

(25.6)

Profit attributable toowners of parent

1,999

11.6

1,451

9.1

(548)

(27.4)

Copyright © 2020 Milbon. All rights reserved.

3

Consolidated Net Sales by Product Category [Hair Care Products (1)]Consolidated Net Sales (FY2020 6 months)
FY20196 months

9,897
•
•

•

FY2020
6 months(Unit: million yen)

Increase/
Decrease

9,391

(506)

Increase/
Decrease ratio (%)(5.1)

The premium brand has been declining only slightly due to the high repeat
needs during the coronavirus pandemic.
Regarding Aujua, although it had suffered from weak growth due to activity
restrictions in the course for introducing a new product, it was on a recovery
trend due to the return of salon customers in June and the resumption ofactivities.
Professional brands were unable to make new proposals because new productlaunches coincided with the announcement of emergency declaration (all 3
products were launched on April 9). Existing products also fell below theprevious year due to the impact of self-restraint.

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4

Consolidated Net Sales by Product Category [Hair Care Products (2)]New Products
FY2020 6 months
Aujua Scalpcare Series Fortice Line
A scalp care series that approaches Ageing Bacteriapresent on the scalp to curb complex aging damage ofthe hair and scalp.
(Unit: million yen)

FY2020 target*

FY2020
6 months*

Progress rate (%)

181

-

-

February 7, 2020 Debut

Cronna Ice Spa Shampoo Orange
A carbonated foam shampoo below the freezing pointthat continues to cool while eliminating the summerspecific worries of smell and stickiness of the scalp.
(Unit: million yen)
FY2020 target*

FY2020
6 months*-

Progress rate (%)

83-

March 10, 2020 Debut* From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

5

A Premium Brand, Aujua
Despite the harsh business environment, both the number of salons and sales increased.
Number of salons(Unit: salons)

FY2019 *1

FY2020 *1

3,698

3,897

Increase/
Decrease

Increase/
Decrease ratio (%)

199

5.4

Consolidated gross sales (FY2020 6 months) (Unit: million yen)
FY20196 months *2

FY2020
6 months *2

3,290

Increase/
Decrease

Increase/
Decrease ratio (%)

9,000(Number of salons)
4,500

8,000

4,000

7,000

3,500

6,000

3,000

5,000

2,500

4,000

2,000

3,000

1,500

Hair care series

2,000

1,000

Scalp care series

1,000

500

3,330

39

1.2

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

What is Aujua?

Aging care series

Hair 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.

Trends in sales & number of salons(Million yen)・5 series
Eternal stage series (new)Climatic care series

0・14 lines02010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Sales

・89 items

Number of salons* Graphs are based on individual figures.

*1 Calculated based on the past year's shipment results for both Japan and overseas.
*2 From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

6

A Premium Brand, Global Milbon
Despite an increase in the number of salons, sales decreased due to the impact of overseas lockdowns.

Number of salons(Unit: salons)

FY2019 *1

FY2020 *1

7,674

8,892

Increase/
Decrease

Increase/
Decrease ratio (%)

1,218

15.9

Consolidated gross sales (FY2020 6 months) (Unit: million yen)
FY20196 months *2

1,235

FY2020
6 months *2

1,188

Increase/
Decrease

Increase/
Decrease ratio (%)

(47)

(3.8)

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

Trends in sales & number of salons(Number of salons)(Million yen)
3,000

9,000
8,000

2,500

7,000

2,000

6,000
5,000

1,500

4,000

1,000

3,000
2,000

500

1,000

0

0
2016

Sales

2017

2018

2019

Number of salons* Graphs are based on individual figures.

*1 Calculated based on the past year's shipment results for both Japan and overseas.
*2 From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

7

Consolidated Net Sales by Product Category [Hair Coloring Products (1)]Consolidated Net Sales (FY2020 6 months)
FY20196 months

6,423

FY2020
6 months(Unit: million yen)

Increase/
Decrease

5,594

(828)

Increase/
Decrease ratio (%)(12.9)• In the hair coloring products sale, salon visiting customers declined due torestrictions on salon sales and self-restraint on going outside, and sales fell by
about 13%. The decline in Q1 was largely attributable to the drop in overseas
sales, which had a quick spread of the infectious disease (approximately 60%
fell overseas), but Q2 saw a significant impact from the decline in domestic sales.
(approximately 80% decrease came from Japan)• Gray colors are struggling due to factors such as the fact that older customers
have been reluctant to go to beauty salons and intensifying competition.
• With respect to the gray coloring Ordeve Seedil Interval Re:Care (products thatwere released in the previous fiscal year and that were dyed at home during theinterim before returning to the salons), the Company was able to propose thesale of single items during the period of self-restraint and meet the demands ofcustomers who seek salon quality.

Copyright © 2020 Milbon. All rights reserved.

8

Consolidated Net Sales by Product Category [Hair Coloring Product (2)]Core Product

FY2020 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)
FY20196 months *1,938

FY2020
6 months *1,878

Increase/
Decrease

Increase/
Decrease ratio (%)

(59)

(3.1)

FY2017 Debut* From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

9

A Premium Organic Brand, Villa Lodola (1)Decreased due to delayed launch of new products and restrictions on activities
Number of salons
FY2019

9,015(Unit: salons)

FY20209,351

Increase/
Decrease

Increase/
Decrease ratio (%)

336

3.7

Consolidated gross sales (FY2020 6 months) (Unit: million yen)
FY20196 months *563

FY2020
6 months *500

Increase/
Decrease

Increase/
Decrease ratio (%)(62)(11.2)

Trends in sales & number of salons(Number of salons)(Million yen)

Brand concept

1,400

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

What is Villa Lodola?
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.

10,000

1,200

8,000

1,000
800

6,000

600

4,000

400

2,000

200
0

0
2012

2013

2014

Sales

2015

2016

2017

2018

2019

Number of salons* Graphs are based on individual figures.

* From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

10

A Premium Organic Brand, Villa Lodola (2)Core Product
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 gross sales (FY2020 6 months) (Unit: million yen)
FY20196 months *403

FY2020
6 months *385

Increase/
Decrease

Increase/
Decrease ratio (%)

(18)

(4.6)

FY2015 Debut* From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively
applied.

Copyright © 2020 Milbon. All rights reserved.

11

Consolidated Net Sales by Product Category [Cosmetic Products]
Consolidated Net Sales (FY2020 6 months)
FY2020
6 months

FY20196 months

47(Unit: million yen)

Increase/
Decrease

136

Increase/
Decrease ratio (%)

89

186.1

• Because of restrictions on the activity due to COVID-19, not all salons proceedwith the new activity of cosmetics immediately after the resumption of theactivity. We were not able to introduce it as expected.

New Products
Imprea Whitening Laser Shot
A whitening solution that directly approaches the origin of spots,
like targeted by a laser. It suppresses the formation of melaninand prevents spots and freckles.
(Unit: million yen)
FY2020 target*

FY2020
6 months*-

Progress rate (%)

28-

February 7, 2020 Debut* From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively
applied.

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12

A Premium Brand, Imprea
Stagnation of new dealing salons due to activity restrictions
Number of salons(Unit: salons)

FY2019 *1

FY2020 *1

200

234

Increase/
Decrease

Increase/
Decrease ratio (%)

34

17.0

Consolidated gross sales (FY2020 6 months) (Unit: million yen)
FY20196 months *2

FY2020
6 months *2

47

136

Increase/
Decrease

89

Increase/
Decrease ratio (%)

186.1

Brand concept“Change Your Impression”

The brand concept of Imprea is “Change Your Impression
by Beauty Authority”. We will provide new beauty value by
leveraging beauticians’ ability to provide solutions, which isone of the strengths of them.

Through communication that takes advantage ofstrength as a beautician, we propose impressions
that comprehensively capture hair and face throughbeauticians, and deliver " Change Your Impression "to customers.

What is Imprea?
Imprea is a salon exclusive brand created through joint
research by KOSÉ, which specializes in skin research, andMilbon, which specializes in hair research.
We will improve the skin impression by establishing a goodbalance between the "corner-layer keratin" on the surfaceof the skin, which holds the key to skin impression.

*1 Calculated based on the past year's shipment results.
*2 From the first quarter of FY2020, consolidated gross sales figures are used. Figures for the first quarter of FY2019 have also been retroactively applied.

Copyright © 2020 Milbon. All rights reserved.

13

Consolidated Statement of Earnings (FY2020 6 months)<Consolidated Statement of Earnings> (Unit: million yen)
FY20196 months

Sales
Cost of sales

17,242
5,746

% to
sales

100.0
33.3

FY2020
6 months

15,869
5,329

% to
sales

100.0
33.6

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

FY20196 months

FY2020
6 months% to sales

Increase/
Decrease

Increase/
Decreaseratio (%)

Hair care products

9,897

9,391

59.2

(506)

(5.1)

Hair coloringproducts

6,423

5,594

35.3

(828)

(12.9)

Permanent wave
products

770

660

4.2

(110)

(14.3)

Cosmetic products

47

136

0.9

89

186.1

103

85

0.5

(18)

(17.6)

OthersGross profit

11,496

66.7

10,540

66.4

SG&A
expenses

8,406

48.8

8,151

51.4

Operatingincome

3,089

17.9

2,388

15.1

Ordinary
income

2,824

16.4

2,102

13.3

Profitattributableto owners ofparent

1,999

11.6

1,451

9.1

Copyright © 2020 Milbon. All rights reserved.

14<Major factors for the increase/decrease>

SG & A expenses
Personnel costs, which are fixed costs,
account for a large share, and the ratio rises.
Ordinary income
Decreased due to a increase in share of lossof Kosei Milbon Cosmetics Co., Ltd. and a
increase in foreign exchange losses

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

FY2016FY2017FY2018FY2019FY2020Jan.–Jun.

FY2020
Plan

Capitalexpenditures

4,262

1,570

1,149

1,605

611

1,958

Depreciation andamortization

1,077

1,272

1,370

1,453

755

1,632

Amount

1,232

1,422

1,479

1,534

741

1,796

% to sales

4.2

4.3

4.2

4.2

4.7

4.6

Category

R&D exp.

FY2020 CAPEX Main Items (Plan)
•
•
•
•
•

Establishment of sales office in Niigata
Plant equipment: compounding and filling (vacuum emulsification, etc.)
Establishment of Aoyama Sales Office 2
Acquisition of land for construction of the new training center
Part of expenditure for establishment of a plant in China

Copyright © 2020 Milbon. All rights reserved.

15

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

2016

2018

2019

2020

249

258

269

279

297

102

105

111

108

-

USA

9

12

13

13

17

MILBON USA, INC.

63

48

48

50

-

CHINA

18

19

22

21

30

Milbon Trading(Shanghai) Co., Ltd.

40

50

62

70

-

KOREA

20

23

25

30

32

Milbon Korea Co., Ltd.

80

84

82

77

-

25

33

33

35

38

37

31

37

39

-

JAPAN

Others *2

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
(As of June 30, 2020)
10 FPs joined in October 2019, and are
currently in OJT on site
40 FPs joined in April 2020, and are
currently in training(The above 50 FPs are not included in theleft 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

Copyright © 2020 Milbon. All rights reserved.

16

Consolidated Net Sales in Japan and Overseas
FY2020 6 months(Unit: million yen)

FY20196 months

FY2020
6 months

Increase/
Decrease

Increase/
Changes in Local*1
Decrease ratio currency base

Net Sales% to sales

Net Sales% to sales

17,242100.0

15,869100.0(1,373)

(8.0)

(7.2)

JAPAN

14,383

83.4

13,37384.3(1,009)

(7.0)

(7.0)

Overseas

2,859

16.6

2,495

15.7

(363)

(12.7)

(8.2)

USA

315

1.8

189

1.2

(125)

(39.9)(38.9)

CHINA

759

4.4

642

4.0

(117)

(15.5)(10.7)

KOREA

1,143

6.6

1,165

7.3

21

1.9

9.8

Other *2

639

3.7

497

3.1

(141)

(22.2)(22.0)

Consolidated Net Sales

(%)

(%)

*1 Figures are the rates of change in real terms on a local currency basis. Current exchange rates of 108.23 yen to the U.S. dollar, 15.37 yen to the Chinese yuan,
and 0.0890 yen to the Korean won*2 Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others

Copyright © 2020 Milbon. All rights reserved.

17

Consolidated Operating Income in Japan and Overseas
FY2020 6 months(Unit: million yen)

FY20196 months
Operating
IncomeFY2020
6 months

Operatingincome ratio(%)

Operating
IncomeOperatingincome ratio(%)

Increase/
Decrease

Increase/
Decrease ratio(%)

Consolidated
Operating Income

3,089

17.9

2,388

15.1

(700)

(22.7)

JAPAN

2,723

18.9

2,360

17.7

(363)

(13.3)

Overseas

365

12.8

27

1.1

(337)

(92.5)

USA(87)(27.7)(164)(86.5)

(76)

-

CHINA

197

26.0

95

14.8

(102)

(51.8)

KOREA

350

30.7

275

23.7

(74)

(21.3)

Other *

(95)

(14.9)(179)(36.0)(83)-* Thailand, Vietnam, Malaysia, Taiwan, Hong Kong, Turkey, Indonesia, the Philippines, Singapore, Germany and others

Copyright © 2020 Milbon. All rights reserved.

18

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

USA MILBON USA, INC•••

Lockdown, which began in mid-March, continued in Q2, and cumulative sales declined 38.9% YoY.
Although the situation has been recovering since bottoming out in April, the resumption of economic
activity in each state remains unstable, and it is expected that it will take some time for the company torecover its sales to the level of last year.
During the lockdown, the company continued to communicate with distributor executives, and regularly
distributed the information to salons via the Internet. The company focused on maintaining relationships
with them.
The distributors have begun to utilize a system called salon intractive in which distributors deliverproducts from distributors to salon customers, and Milbon USA plans call for introduction in August in the
direct sales area of Manhattan as well.

CHINA (Milbon Trading (Shanghai) Co., Ltd.)
•
•

•
•

The business operation has been in recovery trend from February, which monthly sales declined 80%
compared to the same month last year, and sales for the second quarter from April to June increased
10.6%. However, the results in cumulative period still declined by 10.7%.
Since April, when it became possible to resume some activities, the company shared information aboutmarket changes and countermeasures by COVID-19 with business partners in a studio or online format.
The relationship with salons has been built, leading to an increase in the number of salons with whom thecompany does business.
As for the Global Milbon, the number of salons increased as the company expanded the targets, and salesof hair care products grew.
During periods when activities for salons are restricted, in-house study sessions are held to review basic
color knowledge and improve basic techniques. It is hoped that the improvement of application techniquewill lead to the speed of treatment and lead to shorter service times.

Copyright © 2020 Milbon. All rights reserved.

19

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

KOREA (Milbon Korea Co., Ltd.)•••The beauty salon market recovered its vigor from mid-May, reflecting government subsidies and signsof a softening of social distance. However, despite the outbreak of a mass infectious disease in certain
area of Seoul and a resurgence of regulatory and cautious attitudes, sales increased 9.8% YoY.
In the hair coloring products category, Addicthy, which is highly designed, contributed to the acquisitionof new salons and sales growth. The market is also growing thanks to the use of SNS distribution, etc.
in partnership with influencer beauticians.
In haircare category, the company took advantage of the unexpectedly difficult times for COVID-19
activity, and held a course to become a sales educator for top sales representatives of major
distributors nationwide in preparation for the July launch of Global Milbon. Not only did they acquire
knowledge and skills up to the level where training activities could be conducted for salons, they also
contributed to the sales promotion of existing products.

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20

<Appendix> Hair Care Brand Positioning Map

Targets

LINE generation(born 1992-1996)

Premium

brand

Hanako juniorgeneration(born 1987-1991)

Baby boomer juniorgeneration(born 1971-1976)

Professional
Copyright © 2020 Milbon. All rights reserved.

brands21

Hanako generation(born 1956-1964)

facingMilbon Group
Progress in Fiscal Year 2020
(61th Term)
Ryuji Sato, President and CEO
I.

Impact of COVID-19 on business results
Monthly changes in sales YoY by country (January to June)
II. About the beauty market of After Corona
Measures Based on Discussion and Hypothesis
Change the Stage 18 monthly missions 4 Stages 25 Mission
III. Various progress points
1. Sales by Product Brand
2. Capital Expenditures
3. SDGs Promotion
IV. Consolidated Operating Forecasts for Fiscal Year 2020
V. Return to shareholders

Copyright © 2020 Milbon. All rights reserved.

22

I. Impact of COVID-19 on
business results
Monthly changes in sales YoY by country(January to June)

Copyright © 2020 Milbon. All rights reserved.

23

Monthly changes in sales YoY by country(Unit: %)January

February

March

April

May

June

Consolidated

100.4

100.2

97.6

63.5

76.9

115.9

JAPAN

99.7

105.4

102.4

60.3

76.0

118.0

KOREA

105.5

103.9

90.5

104.6

114.9

139.7

CHINA

98.7

16.1

55.8

100.4

104.7

129.9

USA

138.4

113.9

40.9

16.7

32.3

66.6

* Overseas figures are based on local currency.
* 100% = Year-on-year change ±0%

Copyright © 2020 Milbon. All rights reserved.

24Impact of COVID-19 on business results[Trends in Japan]
1/6 First-time
infections in Japan

2/5

D Princess
Sequestration
procedure
2/26 Voluntary restraintof events
2/27 Temporary school
closing

3/12 WHO Pandemic
4/7 Declaration of
5/4 Extension of
3/13 Enactment of theState of Emergency
Declaration
amendment Special(SOE)
5/27 To cancel the
Measures Law
4/16 Nationwide SOE
declaration
3/24 Olympic
postponement
3/25 Request for selfrestraint in Tokyo

January

February

March[Domestic response]

2/5 Raw Materials &Materials
Mask procurement

3/30 Policy education
Digitization

Sales YoY (%)

150
140

April

May

4/2 Urgent message
4/14 Temporary productdelivery to customer
4/20 Masks & Alcohol
SendingJune
6/1

Management visit to
distributors and salons
6/ 1 milbon: iD start
6/16 Change the Stage
18-month mission※ In-graph data labels are numeric values for consolidated sales.

Monthly changes in sales YoY by country

130

KOREA

120
110
100
90

115.2
100.4

100.2

97.6

CHINA
JAPAN

76.9

80
70

Consolidated

63.5

60

USA

50
40
30
20
10
0

* Overseas figures are based on local currency.
* 100% = Year-on-year change ±0%
Distributors in Tokyo area
Distributors in Kansai area
Distributors in Chubu area
Distributors in Fukuoka area

Copyright © 2020 Milbon. All rights reserved.

90
90

60
70
80
70

25

70
80
90
90

Left chart:
YoY sales change of major distributors(Based on interviews)*Sales of beauty equipments are included.

II. About the beauty market ofafter Corona
Measures based on Discussionand Hypothesis
Change the Stage 18 monthly missions
4 Stages 25 Mission

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26

II. About the beauty market of after Corona Measures based on Discussion and Hypothesis■ Discussion and assumptions about the beauty market
Crisis and challenge are opportunities: life, economy, people, companies, and the world are all connected

Change in themarketDetermine responses
and measures

In making crises and challenges anopportunity for change

Change working
stylesCorona surfacingNew

and acceleratingchangesstructural issues

by corona

existing in industry

Be overwhelmingly
large

before corona

Capture the essence without being confusedby the Corona temporary climate
Measures based on the Medium-Term Business Plan (Annual Policy)
Copyright © 2020 Milbon. All rights reserved.

27

II. About the beauty market of after Corona Measures based on Discussion and Hypothesis■ Instructing countermeasures from discussion and hypothesis

Responding to Changes in society and beauty markets is toaccelerate response to changes in society and customer values as
outlined in the Medium-Term Business Plan
Copyright © 2020 Milbon. All rights reserved.

28

II. About the beauty market of after Corona Measures based on Discussion and Hypothesis■ Policy of reviewing and accelerating the mid-term business plan fromconsiderations and hypotheses to countermeasures

Domestic policies: Lifetime Beauty Innovation Next 100
Improving productivity
Establishment of a studio and FP system incorporating digital education
Full-scale development of the take-home businessCorporate branding and product branding
Customers
Take-homebusiness

Digitization
SupportReal Support

EC support
Copyright © 2020 Milbon. All rights reserved.

Education29

II. About the beauty market of after Corona Measures based on Discussion and Hypothesis
Discussion and Hypothesis<What the Corona Shock Caused>

Measures<Medium term Project Plan (Annual Policy)+ Policy Issues to be Addressed>
Bases

Sales activities

Free customers are difficult to capture▶

Lifetime customers, customer-oriented MCC *1,
and customer fan index surveys

Shifting from central urban areas toneighboring residential areas▶

Accelerating Neighborhood Consumption and Small
Commercial Areas: Lifestyle Area Marketing

Customers are not the only visitors infront of us or in the current month.

Customers who have not visited the salons during the current month▶ should also be included in this month's customer.
Target for customer management ~ Conversion of ideas ~Take-home business▶

Ongoing online purchasing of hair careproducts sold exclusively in salons(Temporary legislation) Aujua, Global Milbon Supporting
Direct Delivery to Customers▶
To accelerate EC operation throughpromotion of milbon:iD (2020.06～)

Educational aspects

Accelerating Digital Education(Labor Perspective)

Bases

Real

FP

Brand

FP

Digital
【EC】

Brand

Digital[Video]Digital
【EC】

Brand

▶

Promotion of digital education for various speciality
qualification

FP

Build studio site
networkFP
FP system(FP system, FD
activities)
Real
Strengthening Real
Communication
Capabilities
Digital[Video]Installation of digital facilities in studios so that online
DigitalBases
FP[Video]seminars will be performed smoothly.
▶
Responding to individual = to offer education videos, utilize MS Teams for meeting, productsupport via SNSs, visit salons during the day etc.
FP

Digital[Video]Real

Digital[Video]Terms ofproductivity

Enhancing the value of various specialist
FP
Real
Brand
qualification systems and MCM＊４▶
Creating and offering VM*5
To accelerate the cosmetics business* 1 MCC Milbon carrier step curriculum* 2 MCA Milbon Color Academy* 3 SD Self-Development (Voluntary Learning Climate Support)* 4 MCM Milbon Counseling Method30
Copyright © 2020 Milbon. All rights reserved.
* 5 VM visual marketing
The balance between service revenue
and take-home product sales.
Product sales became more important.

FP

FP

Ordeve interval re:care : change awareness from salon use productto take-home, and strengthen sales, and increase product value

Responding to changes from collective toPromotion of Personal Education
personal▶
・ SD&MCC support *3(Labor Perspective)
Transition to self-reliant multi-skilledhuman resources(possess 2 or more strengths)

Real
Bases

Sales of hair coloring and hair careproducts, make them to the emergency
public marketed product

Even in emergency situations, take-home
Connected consumption
FPbusiness becomes as a bridge between ▶ Real = sell technique (hairstyle)salon and salon customers
Digital = Sell knowledge (takehome business)

FP

Medium-Term
Initiative

Digital【EC】

Strengthen digitalcommunication[Video Education][E-commerce site]
Brand
Corporate branding
Product branding

Cosmetic
products
Cosmetic
products

Challenge in cosmetic
products businessII. About the beauty market of after Corona Measures based on Discussion and Hypothesis■ 4 Stages 25 Mission Specific Measures

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31

II. About the beauty market of after Corona Measures based on Discussion and Hypothesis■ 18-sale Mission/4-stage 25 Mission New sales track
Aftercorona

Changes in social values

Accelerateby corona

As outlined in the mid-term business plan
Changes in the values and structureof society and customers

New sense of value
created by Corona

Change the Stage 18 Month Missions!

(according to changes in the market)
Track for a new stage

New sales trajectory

Orbit of
Sales and Stage2019

Copyright © 2020 Milbon. All rights reserved.

2020.12020.732

18-monthmission2022.12023.12

III. Various progress points
Sales by product brandCapital Expenditures
SDGs promotion
Consolidated Operating Forecasts for Fiscal Year 2020
Return to Shareholders
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33

III. Various progress points■ Sales by Product Brand ①* Consolidated gross sales basis[Premium brand for hair care products]① AujuaJapan

Q2 cumulative sales YoY +1.2%

Group contact number of salons② Global Milbon

Beginning of the year

3,698 salons

End of June

3,897 salonsQ2 cumulative sales YoY +2.5%

JapanGroup contact number of salons

Beginning of the year

7,674 salons

End of June

8,892 salons[Professional brand for hair care products]① Cronna Ice Spa Shampoo Orange annual target achievement rate 56.0%② Elujuda SDGs Special Packaging Launched April 9 Limited 6 Months Sales
Progress 37.3%
 The timing of the launch coincided with the emergency declaration.
 Scheduled to launch a new special package in fall
⇨ New buds: Salons with premium brands can also be sold.
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34

III. Various progress points■ Sales by Product Brand ②* Consolidated gross sales basis【Hair coloring products】
Ordeve brands as a whole YoY Growth -11.6%
Ordeve Addicthy
Ordeve Seedil

YoY Growth -3.1%
Seedil Interval Re:Care (home color between salon visits)
January to March

Average monthly sales volume

Approx. 1,500

April to May

Approx. 14,500

June (Single month)Approx. 3,000■Point of progress of cosmetic products business
Imprea2019Q4 Past year's2020Q2
shipments
Number of salons(salons)
Sales(Millions yen)

Copyright © 2020 Milbon. All rights reserved.

35

200

234

165

137

2020Q2

Number of contract376

III. Various progress points■ Progress on the EC Site
Milbon official e-commerce website “milbon:iD” launched on June 1
Beginning of the annual plan
Number of salons registered in June
Targeted number of salons in December

500 salons
1000 salons

As of the end of July
Contracted and registered salons numbered approximately 900.
・ Registered, in operation:
・ Registered, in preparation:
・ Contracted

Approx. 100 salonsApprox. 400 salonsApprox. 400 salons (awaiting for credit card
system authorization)

Full operation expected to be from end of 2020 to 2021

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36

III. Various progress points■ Capital Expenditures
Situation
In progress
Variance intimingVariance intimingNew

Capital Expenditure
Investment in capital to establish
a plant in China
Acquisition of land forconstruction of the new
fieldperson training center
Establishment of Aoyama 2 nd
Sales Office
Remote seminar distribution
facilities, etc.

* Total 3.6 billion yen (Plan)

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37

Timing of
implementation

AmountInvested(Million yen)

Implemented

1,622 *

2021 orthereafter

1,000

In 2021240

From the second
half of 2020

III. Various progress points■ SDGs Promotion
1. Signs the United Nations Global Compact (UNGC)
2. Continuation of support for employment of people with disabilities
3. Collection of haircare plastic containers (currently under test marketing)
FY2019 30 salons⇨ FY2020 100 salons

4. Raw materials
 Membership in the Organization RSPO to Promote Sustainable Use ofPalm Oil(Some products currently use palm oil, which has acquired RSPO certification, and will beapplied to all products in the future.) Use of FSC-certified paper(Currently only part of the pamphlet is available. In the future, the application will be promoted
to all decorative boxes and promotional materials.)■ Release of SDGs Matrix - scheduled to be opened in Augusut 2020
■ Publication of the Integrated Report (scheduled for the end of
August 2020)
Copyright © 2020 Milbon. All rights reserved.

38

IV. Consolidated Operating Forecasts for Fiscal Year 2020

■ Statement of Earnings(Unit: million yen)

FY2019FY2019FY2020

FY2020Results% total sales

Target% total sales

Increase/
Decrease

Increase/
Decrease ratio(%)

36,266100.0

34,900100.0(1,366)(3.8)

Domestic

30,40983.8

29,600

84.8

(809)

(2.7)

Overseas

5,857

16.2

5,300

15.2

(557)

(9.5)

Gross profit

23,711

65.4

22,960

65.8

(751)

(3.2)

SG & A expenses

16,95946.8

17,030

48.8

70

(0.4)

Operating income

6,751

18.6

5,930

17.0

(821)

(12.2)

Ordinary income

6,231

17.2

5,280

15.1

(951)

(15.3)

Profit attributableto owners ofparent

4,517

12.5

3,840

11.0

(677)

(15.0)Net sales

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39

V. Return to shareholders■ Shareholder Returns <Dividend Forecast>(Unit: yen)

FY2018FY2019FY2020End of 2Q

24

27

27

End of FY

30

29

29 *

Total

54

56

56

* FY2020 year-end dividend is forecast
We have left the dividend amount unchanged assuming that the spread of the newcoronavirus will gradually converge from the third quarter of the fiscal year under review.
The dividend payout ratio is expected to be 47.4%.
The year-end dividend forecast cannot be denied any unexpected changes due toexogenous factors such as the spread and convergence of the new coronavirus. Therefore,
if there are large fluctuations in the forecast, the dividend forecast will be revised
promptly.

Copyright © 2020 Milbon. All rights reserved.

40

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.

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41