Consolidated Financial Results for the Fiscal Year
Ended December 31, 2021 [Japanese GAAP]
February 10, 2022
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, First Section
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, Representative Director, President & CEO
Inquiries:
Masahiro Murai, Managing Executive Director
TEL: +81-3-3517-3915
Scheduled date of annual general meeting of shareholders: March 29, 2022
Scheduled filing date for Securities Report: March 29, 2022
Scheduled starting date of dividend payments: March 30, 2022
Preparation of supplementary materials on the Consolidated Financial Results: Yes
Holding of an explanatory meeting on the Consolidated Financial Results: Yes (For institutional investors and analysts)(Amounts of less than one million yen have been omitted.)
1. Consolidated financial results for the fiscal year ended December 31, 2021 (January 1, 2021 - December 31, 2021)(1) Consolidated operating results
Net salesYear ended December 31, 2021

Year ended December 31, 2021

(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
23.6
5,109
21.5

Ordinary income

Million yen
41,582%
16.4

Million yen
7,817

%
22.3

35,725

(1.5)

6,394

(5.3)

Year ended December 31, 2020
(Note) Comprehensive income

Operating income

Year ended December 31, 2021: 5,754 million yen [52.4%]

Million yen
7,158
5,791

(7.1)

4,204

Basic earnings per share Diluted earnings per share Return on equity (ROE) Return on assets (ROA)
Yen
Yen
%
%
157.17
13.4
15.7

Year ended December 31, 2020
(Reference)Equity in earnings (losses) of affiliates(6.9)

Year ended December 31, 2020: 3,776 million yen [(17.9)%]

129.24
Year ended December 31, 2021: (151) million yen

Operating income ratio
%
18.8

11.6
13.6
Year ended December 31, 2020: (138) million yen

17.9(2) Consolidated financial position
Total assets
Million yen
48,238

As of December 31, 2021
As of December 31, 2020
(Reference)

EquityNet assets
Million yen
40,19743,075Equity ratio

36,308

As of December 31, 2021: 40,197 million yen

Net assets per share
%
83.3

Yen
1,236.41

84.3

1,117.10

As of December 31, 2020: 36,308 million yen(3) Consolidated cash flows

Year ended December 31, 2021

Cash flows from operating
activities
Million yen
6,636

Cash flows from investing
activities
Million yen(3,995)

Cash flows from financing
activities
Million yen(1,919)Cash and cash equivalents
at end of period
Million yen
13,312

Year ended December 31, 2020

6,548

(161)

(3,416)

12,307

Total dividends(Annual)Dividend
Dividends on
payout ratio
equity (DOE)(Consolidated) (Consolidated)

2. Payment of dividends
Annual dividends

Year ended December 31, 2020-

End of 2ndquarterYen
27.00

Year ended December 31, 2021

-

30.00

-

Year ending December 31, 2022
(forecast)

-

34.00

-

End of 1st quarter
Yen

End of 3rd
End of fiscal year
quarter
Yen
Yen
29.00

Total
Yen
56.00

Million yen
1,820

%
43.3

%
5.0

38.00

68.00

2,210

43.3

5.8

46.00

80.00

49.7

3. Consolidated operating forecasts for the fiscal year ending December 31, 2022 (January 1, 2022 - December 31, 2022)
Net salesYear ending December 31, 2022

Million yen
43,900Operating income% Million yen
5.6
7,550

Ordinary income% Million yen
(3.4)
7,410

Profit attributable to
Basic earnings per shareowners of parent% Million yen
%
Yen
3.5
5,230
2.4
160.88

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 0 company (Company name: ): NoneExclude: 0 companies (Company name:)(2) 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

(3) 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 ofDecember 31, 2021
As ofDecember 31, 2021
Year ended December
31, 2021

As ofDecember 31, 2020
As of
606,080 shares
December 31, 2020
Year ended December
32,508,933 shares
31, 2020
33,117,234 shares

33,117,234 shares
614,837 shares
32,529,606 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.

○Accompanying Materials – Contents
1. Overview of Operating Results, etc. ............................................................................................................................................. 2(1)Analysis of operating results .................................................................................................................................................... 2(2)Analysis of financial position ................................................................................................................................................... 3(3)Basic policy on the distribution of profit and dividends for the fiscal year under review and the following fiscal year ........ 4(4)Business and other risks ........................................................................................................................................................... 5
2. Outline of the Milbon Group ........................................................................................................................................................ 7
3. Basic Rationale for Selecting the Accounting Standards ............................................................................................................. 8
4. Consolidated Financial Statements and Main Notes .................................................................................................................... 9(1)Consolidated Balance Sheets ................................................................................................................................................... 10(2)Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income Consolidated
Statements of Earnings ........................................................................................................................................................... 12(3)Consolidated Statements of Changes in Shareholders' Equity ................................................................................................. 14(4)Consolidated Statements of Cash Flows .................................................................................................................................. 16(5)Notes regarding consolidated financial statements .................................................................................................................. 18
Notes regarding going concern assumption ........................................................................................................................ 18
Significant matters that serve as the basis for preparation of consolidated financial statements........................................ 18
Per share information .......................................................................................................................................................... 20
Significant subsequent events ............................................................................................................................................. 20
5. Other ............................................................................................................................................................................................. 20(1)Change of officers .................................................................................................................................................................... 20- 1 -1. Overview of Operating Results, etc.
(1)Analysis of operating results①Operating results for the fiscal year under review
During the fiscal year under review, the economy continued to face severe conditions as socioeconomic activities were restricted
due to the launch of repeated emergency declarations associated with the spread of COVID-19 from October onwards, the numberof people with infections declined due to the spread of vaccines, and there were signs of a recovery in economic activity.
However, the number of people with infections of new variant is on the rise recently, and we cannot be optimistic about the
future.
In the beauty industry, COVID-19 prompted a rapid surfacing of the importance of incorporating consumers' perspectives in linewith changes in people's behavioral patterns and values, and the need for digital-based transformation even though salon
management is part of the real world. Recognizing the urgent need to respond to this change, our Group has been working on"Change the Stage 18 Month Missions!" as a period to build a foundation for the new medium-term business plan (2022-2026).
In the consolidated fiscal year of the fiscal year under review, the domestic market continued to receive a strong reputation forfield activities that combine online and brick-and-mortar sales to salons amid COVID-19. In the hair care products category,sales of premium-brand Aujua and Global Milbon were favorable due in part to the introduction of new products that capture
demand and the impact of milbon:iD, an e-commerce website accessible exclusively through salons. In the hair coloring products
category, sales of Ordeve Addicthy fashion color continued to be steady. In overseas markets, sales in China and South Korea
continued to be steady, and sales in the U.S. also grew significantly as economic activities resumed and collaboration with
distributors progressed.
As a result, consolidated net sales for the fiscal year under review amounted to 41,582 million, an increase of 16.4% comparedwith the corresponding period of the previous fiscal year. Operating income was 7,817 million yen (up 22.3% year-on-year),ordinary income was 7,158 million yen (up 23.6% year-on-year), and profit attributable to owners of parent was 5,109 million
yen (up 21.5% year-on-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)Previous fiscal year

Current fiscal year

Product category
AmountRatio (%)

AmountRatio (%)

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

Hair care products

21,13559.2

24,466

58.8

3,331

15.8

Hair coloring products

12,59435.3

14,813

35.6

2,219

17.6

Permanent wave products

1,372

3.8

1,449

3.5

76

5.6

Cosmetic products

360

1.0

579

1.4

218

60.6

Other

262

0.7

273

0.7

11

4.3

35,725100.0

41,582

100.0

5,857

16.4

Total

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Previous fiscal year
AmountCurrent fiscal year

Ratio (%)

AmountRatio (%)

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

Domestic sales

29,88083.6

33,643

80.9

3,762

12.6

Overseas sales

5,844

16.4

7,938

19.1

2,094

35.8

Total

35,725100.0

41,582

100.0

5,857

16.4

- 2 -

②Outlook for fiscal 2022
The economic environment for the next fiscal year remains uncertain due to the re-expansion of COVID-19 and the curtailmentof economic activities, as well as the accompanying soaring prices of raw materials and logistics disruptions. As a result, theoutlook for the global economy is uncertain.
Under these circumstances, the Milbon Group will launch a new medium-term business plan (2022-2026). In Fiscal Year 2022,
the first year of the plan, we will work to lay the foundation for realizing the Beauty Platform Plan, pioneering new functions ofbeauty salons. In line with changes in society, we will continue to pursue the potential of salons that can become "new channels"
for consumers.
In the following fiscal year, we forecast net sales of 43,900 million yen (up 5.6% from the current fiscal year), operating incomeof 7,550 million yen (down 3.4% from the current fiscal year), ordinary income of 7,410 million yen (up 3.5% from the current
fiscal year), and profit attributable to owners of parent of 5,230 million yen (up 2.4% from the current fiscal year).
(2)Analysis of financial position①Assets, liabilities and net assets
Total assets at the end of the fiscal year under review increased 5,162 million yen from the end of the previous fiscal year, to48,238 million yen.
Current assets increased by 2,778 million yen from the end of the previous fiscal year to 24,900 million yen. This was mainly
due to increases of 1,005 million yen in cash and deposits, 545 million yen in merchandise and finished goods, 473 million yen
in notes and accounts receivable-trade, and 183 million yen in raw materials and supplies.
Non-current assets increased by 2,384 million yen from the end of the previous fiscal year to 23,337 million yen. Major
contributing factors included an increase of 2,950 million yen in property, plant and equipment due to the construction of a newfactory in China and the expansion of a factory in Milbon Thailand, and a decrease of 1,325 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 shares.
Current liabilities increased by 1,209 million yen from the end of the previous fiscal year to 7,310 million yen. The main factors
for the change were increases of 764 million yen in accounts payable-other, 296 million yen in income taxes payable, and 147
million yen in accounts payable-trade.
Non-current liabilities increased by 64 million yen from the end of the previous fiscal year to 731 million yen.
Net assets increased by 3,888 million yen from the end of the previous fiscal year to 40,197 million yen. The main factors forthe change were increases of 3,191 million yen in retained earnings and 702 million yen in foreign currency translation
adjustment due to the depreciation of the yen, and a decrease of 305 million yen in valuation difference on available-for-salesecurities due to a decrease in unrealized gains on market value of listed stocks.
As a result, the equity ratio changed from 84.3% at the end of the previous fiscal year to 83.3%. Net assets per share based on
the total number of shares issued at the end of the fiscal year were 1,236.41 yen, compared to 1,117.10 yen at the end of theprevious fiscal year.
②Cash flows
Cash and cash equivalents ("funds") at the end of the fiscal year under review increased by 1,005 million yen from the end of
the previous fiscal year to 13,312 million yen.
The status of cash flows during the current fiscal year and the factors responsible are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 6,636 million yen. This was mainly due to the recording of income before income
taxes of 7,133 million yen, depreciation and amortization of 1,777 million yen, equity in losses of affiliates of 151 million yen,
an increase in notes and accounts receivable-trade of 467 million yen, an increase in inventories of 612 million yen, and income
taxes paid of 195 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 3,995 million yen. This was mainly due to expenditures of 3,827 million yen for thepurchase of tangible fixed assets, 659 million yen for the purchase of intangible fixed assets, proceeds of 200 million yen fromthe redemption of investment securities, and proceeds of 472 million yen from the sale of investment securities.
(Cash flows from financing activities)
Net cash used in financing activities was 1,919 million yen. This was mainly due to dividends paid to shareholders of 1,916
million yen.

- 3 -(Reference) Cash flow-related indicators
Year ended
December 31,

Year ended
December 31,

Year ended
December 31,

Year ended
December 31,

Year ended
December 31,

2017

2018

2019

2020

2021

Equity ratio
Equity ratio based on market
value (%)
Interest-bearing debt to cash
flows ratio (%)

82.6

83.6

85.6

84.3

83.3

329.6

369.2

484.3

495.7

384.2

1.8

1.2

1.7

1.6

1.7

(Notes) Equity ratio: Equity/net assets
Equity ratio based on market value: Total market capitalization/total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debt/cash flows**

All indicators were calculated using consolidated financial statements.
Total market capitalization was calculated by multiplying the closing stock price at the end of the period by the total numberof outstanding shares at the end of the period (excluding treasury shares). For the fiscal year ended December 31, 2017, total
market capitalization was calculated by the following formula, due to the impact at the end of the period of ex-rights resulting
from the stock split:
Closing stock price at the end of the period multiplied by (total number of outstanding shares at the end of the period plus the*number of additional shares resulting from the stock split)
Cash flows were shown as an operating cash flow in the consolidated statements of cash flows.

*

Interest-bearing debt refers to all debt posted in the balance sheets upon which interest is paid. The amount of interest paid in
the consolidated statements of cash flows was treated as an interest payment in the calculations above.

*

Interest-coverage ratio is not shown due to the fact that there were no interest payments.

(3)Basic policy on the distribution of profit and dividends for the fiscal year under review and the following fiscal year
The Milbon Group considers the returning of profits to shareholders as an important management issue and makes it a basic
policy to pay dividends in accordance with its operating results, while enhancing its business structure by maintaining internal
reserves to improve its earnings in the future. Moreover, we have set the target dividend payout ratio at 40%. Interim dividends
are determined at the Board of Directors meetings and year-end dividends at the general meeting of shareholders, and it is theGroup's basic policy to pay dividends twice every fiscal year.
For the current fiscal year, upon comprehensively taking into account factors including our financial position and profit levels,
we have decided to pay a year-end dividend of 38 yen per share. As a result, the total annual dividend per share will amount to68 yen per share, an increase of 12 yen from the previous fiscal year, which includes the interim dividend of 30 yen per sharethat has already been paid.
For the following fiscal year, we plan to pay an annual dividend of 80 yen per share. This is due to the targeted payout ratio of
50% under the New Medium-Term Business Plan (2022-2026) in order to further enhance returns to shareholders.

- 4 -(4)Business and other risks
Risks that could potentially affect the operating results, stock price and financial position of the Milbon Group include thefollowing.
The forward-looking statements in the text are based on judgments made by the Group as of the end of the fiscal year underreview, but are not limited to the items listed herein.
➀Risks Related to COVID-19
With the global spread of COVID-19, the Japanese government has taken measures to restrict socio-economic activities in Japanand other countries in which it operates, which could have a significant impact on the Group's operating results and other factors.
In the beauty market in which we operate, the reversal of the flow of people in residential areas and urban centers and changes
in consumption behavior are evident. In addition to the urgent issues that originally existed, such as the declining birthrate, theaging of society, and the declining population, structural issues such as the trend toward smaller salons and the prolonged cycleof store visits are becoming more apparent.
Corporate Administration Department plays a central role in gathering and responding to these risks, and we flexibly decide on
our response policies while giving top priority to ensuring the health and safety of our business partners and employees in theGroup. As part of our efforts to prevent the spread of infections, we are implementing safety measures for all domestic Group
employees, including active use of telecommuting and staggered commuting, and online implementation of meetings and othermeasures. In addition, we formulated guidelines for COVID-19, and established a system to enable swift responses in the eventof an infectious disease among employees or persons concerned.
Based on the above initiatives, we are striving to respond with an emphasis on financial stability in order to expand our businessafter the pandemic.
②Risks associated with global expansion
The Milbon Group has taken various measures to protect information assets including customers' personal information andconfidential information. However, unforeseeable events, such as the leakage of information due to unauthorized access, could
have a significant impact on the Group's operating results and other factors.
In response to this risk, we gather information on political, economic and social conditions in each country in which it operates,
as well as laws and regulations related to the Group's businesses in each country, on a daily basis, and then responding asnecessary.
③Information security
Through its business activities, the Milbon Group possesses important information, such as business-related transaction
information and confidential information. With regard to this information, incidents such as unauthorized misappropriation of
third parties due to theft or loss, violations of laws and regulations, cyber-attacks that exceed expectations, and other unforeseen
situations could result in the destruction or falsification of important data, information leaks, leakage, or system shutdowns.
These threats are increasing year by year. As a result, our Group's operating results and other factors could be significantly
affected.
In response to this risk, we have established a management system and rules related to information security, and has taken
measures to combat cyber-attacks, strengthen IT governance, and take other advanced measures, including employee training
to increase information literacy, management of subcontractors, warnings concerning the handling of information, analysis ofrisk cases, response to stricter laws and regulations, including the protection of personal information, and reinforcement oftechnical measures.
④Risks associated with debt collection
The Milbon Group has credit risk receivables such as trade receivables from customers. Deterioration in the creditworthiness ofcustomers or business failures could have a significant impact on the Group's operating results and other factors.
In response to this risk, we strive to minimize the risk of collection of receivables by collecting information, setting certain
internal standards, and managing receivables separately from each company in order to strictly manage credit. In addition, theGroup takes measures to protect receivables, such as entering into customer credit guarantee agreements with financial
institutions.
⑤Risks associated with major accidents
The Milbon Group utilizes company vehicles to carry out sales activities. In the event of a major traffic accident, the trust ofcustomers and social credibility may be lost which could have a significant impact on the Group's operating results and otherfactors.
In response to these risks, we are implementing safety measures that give top priority to respect for human life, such as thoroughoperational management and enhanced safety education.
⑥Risks associated with product-related health hazards
Many Milbon Group products come into direct contact with the scalp and skin of consumers. In the event of an unexpected- 5 -and serious health hazard or quality defect caused by our products, the trust of our customers and social credibility may be lost,which could have a significant impact on the Group's operating results and other factors.
In response to these risks, we have established a safety management system in which divisions in charge of safety and quality
assurance confirm the design and quality control status of products manufactured and sold to related divisions.

- 6 -2. Outline of the Milbon Group

Name

Location

Share ofCapital stock or capitalvoting rights
Main line of business
contribution
Percentage(%)

Relationship with the Company(Consolidated subsidiary)
MILBON USA, INC.
(NOTE)1

New York
United States

USD 2 million

Sale of hair products

100.0

Sells the Company's hair productsin the U.S.

100.0

Sells the Company's hair products
in China.
Two executives hold concurrent
posts at the Company.

(Consolidated subsidiary)
Milbon Trading (Shanghai) Co.,Ltd.
(NOTE)1

Shanghai City
China

JPY 430 million

Sale of hair products(Consolidated subsidiary)
Milbon Korea Co., Ltd.
(NOTE)1

KRW 3,000 million

Sale of hair products

100.0

Sells the Company's hair products
in South Korea.
Three executives hold concurrent
posts at the Company.

Rayong Pref.
Kingdom of Thailand

THB 450 million

Manufacture andsale of hair products

100.0

Manufactures and sells theCompany's hair products in
Thailand.

Kuala Lumpur
Malaysia

MYR 1.5 million

Sale of hair products

100.0

Sells the Company's hair products
in Malaysia.

VND 22,594 million

Sale of hair products

100.0

Sells the Company's hair products
in Vietnam.

SGD 250,000

Sale of hair products

100.0

Sells the Company's hair productsin Singapore.

100.0

Manufactures and sells theCompany’s hair products in
China.
Two executives hold concurrent
posts at the Company.

Seoul City
South Korea(Consolidated subsidiary)
MILBON (THAILAND) CO.,LTD.
(NOTE)1(Consolidated subsidiary)
MILBON MALAYSIA SDN.
BHD.
(Consolidated subsidiary)
MILBON VIETNAM CO.,LTD.

Ho Chi Minh City
Vietnam(Consolidated subsidiary)
MILBON SINGAPORE PTE.
LTD.

Singapore(Consolidated subsidiary)
Milbon (Zhejiang) Cosmetics
Co., Ltd.
(NOTE)1

Zhejiang
China

CNY 240 million

Manufacture andsale of hair products(NOTE)1. The company falls under the category of "specified subsidiary."
2. In addition to the companies noted above, the Group has one equity-method affiliate.

- 7 -The following diagram shows the positioning of the Milbon Group companies and the Group's businesses.
(Diagram of business activities)(NOTE)

1. Overseas transactions differ in sales channels depending on the country.
2. The main items for store sales are haircare products.
3. Milbon (Zhejiang) Cosmetics Co., Ltd. is not shown in the above business diagram because it did not engage inproduction or sales as of the end of Fiscal Year 2021.

3. Basic Rationale for Selecting the Accounting Standards
The Milbon Group currently prepares the consolidated financial statements according to the generally accepted accounting
standards in Japan (Japanese GAAP), taking into consideration the comparability of consolidated financial statements over different
periods and among other companies.
With regard to adoption of International Financial Reporting Standards (IFRS), it is the Group's policy to respond to this issue
appropriately based on consideration of various domestic and international circumstances.

- 8 -- 9 -

4. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets(Thousand yen)Previous fiscal year
(As of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
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
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress
Other
Accumulated depreciation
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- 10 -

Current fiscal year
(As of December 31, 2021)

12,345,024
4,199,283
3,991,946
46,317
1,177,090
366,288(3,648)22,122,303

13,350,147
4,673,258
200,000
4,537,613
41,842
1,360,902
740,268(3,271)
24,900,761

12,223,211(5,430,925)
6,792,285
7,001,271(5,057,731)
1,943,540
4,995,014
543,159
2,807,331(2,215,534)
591,796
14,865,795
1,318,478

14,865,989(5,908,390)
8,957,598
8,336,484(5,495,871)
2,840,613
4,995,014
269,654
3,101,336(2,347,955)
753,381
17,816,262
1,516,714

2,935,650
28,906
207,475
395,087
1,260,203(58,381)4,768,942
20,953,217
43,075,520

1,610,607
32,527438,540
577,944
1,393,519(48,387)
4,004,752
23,337,729
48,238,490

(Thousand yen)Previous fiscal year
(As of December 31, 2020)
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
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- 11 -

Current fiscal year
(As of December 31, 2021)

788,9112,730,817
1,104,850
436,811
1,038,850
6,100,241

936,108
3,495,694
1,401,441
511,612965,353
7,310,210

5,216
2,329
546,954
112,427
666,928
6,767,170

7,753
595
608,139
114,611731,099
8,041,309

2,000,000
222,490
35,643,295(2,108,947)
35,756,838

2,000,000
246,299
38,834,669(2,080,393)
39,000,575

405,396(1,206)
147,775(454)
551,51136,308,349
43,075,520

100,262
68,821
850,537
176,984
1,196,605
40,197,181
48,238,490

(2) Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income Consolidated Statements of Earnings
Consolidated Statements of Earnings(Thousand yen)Previous fiscal year
(On January 1, 2020
To December 31, 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
Refund of custom duty
Subsidy income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Sales discounts
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent- 12 -

Current fiscal year
(January 1, 2021
From December 31, 2021)

35,725,069
12,339,754
23,385,315
16,990,520
6,394,794

41,582,267
14,083,338
27,498,928
19,681,230
7,817,698

28,30649,003
4,683
52,41039,674
100,829
274,907

25,87832,4093,761
53,071
54,621
59,254228,997642,698

733,118

138,963

151,399

90,906
5,817
878,386
5,791,315

3,736
888,255
7,158,440

114,578
114,578351
19,087
19,43815,884
15,884
5,890,009
1,740,038(54,167)
1,685,870
4,204,139
4,204,139

517
43,95944,477
7,133,401
2,183,317(159,204)
2,024,112
5,109,288
5,109,288

Consolidated Statements of Comprehensive Income(Thousand yen)Previous fiscal year
(On January 1, 2020
To December 31, 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- 13 -

Current fiscal year
(January 1, 2021
From December 31, 2021)

4,204,139

5,109,288(367,685)(1,206)(119,408)
60,900(427,400)
3,776,739(305,133)
70,027
702,761
177,438
645,0935,754,382

3,776,739

5,754,382--

(3)Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (January 1, 2020, to December 31, 2020)(Thousand yen)
Shareholders' equity
Capital stock
Changes of items during period

Capital surplus

2,000,000

Retained earnings

200,742

Treasury shares

33,266,155(563,197)

Total shareholders'equity34,903,700

Dividends of surplus
Dividends of surplus(1,827,000)(1,827,000)

Profit attributable to ownersof parent

4,204,139

4,204,139

Purchase of treasury shares
Disposal of treasury shares

21,748(1,591,235)(1,591,235)

45,485

67,233

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period-

21,7482,377,139(1,545,750)

853,1372,000,000

222,490

35,643,295(2,108,947)

35,756,838

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-for-salelosses on hedges
securities
Changes of items during period

773,082

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans, net of tax

Total othercomprehensive
incomeTotal net assets

267,184(61,355)

978,91135,882,612-

Dividends of surplus
Dividends of surplus(1,827,000)

Profit attributable to ownersof parent

4,204,139

Purchase of treasury shares(1,591,235)

Disposal of treasury shares

67,233

Net changes of items otherthan shareholders' equity(367,685)(1,206)(119,408)

60,900(427,400)(427,400)

Total changes of items during
period(367,685)(1,206)(119,408)

60,900(427,400)

425,736

Balance at end of current period

405,396(1,206)

147,775(454)

551,51136,308,349- 14 -

Current fiscal year (from January 1, 2021 to December 31, 2021)(Thousand yen)
Shareholders' equity
Capital stock
Changes of items during period

Capital surplus

2,000,000

Retained earnings

222,490

Treasury shares

35,643,295(2,108,947)

Total shareholders'equity35,756,838

Dividends of surplus
Dividends of surplus(1,917,914)(1,917,914)

Profit attributable to ownersof parent

5,109,288

5,109,288

Purchase of treasury shares
Disposal of treasury shares

23,809(3,244)(3,244)

31,79855,608Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period-

23,8093,191,374

28,5533,243,737

2,000,000

246,299

38,834,669(2,080,393)

39,000,575

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-for-salelosses on hedges
securities
Changes of items during period

405,396

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans, net of tax

Total othercomprehensive
incomeTotal net assets

147,775(454)

551,51136,308,349(1,206)

Dividends of surplus
Dividends of surplus(1,917,914)

Profit attributable to ownersof parent

5,109,288

Purchase of treasury shares(3,244)

Disposal of treasury shares

55,608Net changes of items otherthan shareholders' equity(305,133)

70,027

702,761

177,438

645,093645,093

Total changes of items during
period(305,133)

70,027

702,761

177,438

645,0933,888,831

Balance at end of current period

100,262

68,821

850,537

176,984

1,196,605

40,197,181- 15 -

(4)Consolidated Statements of Cash Flows(Thousand yen)Previous fiscal year
(On January 1, 2020
To December 31, 2020)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Interest and dividend income
Share of (profit) loss of entities accounted for using
equity method
Foreign exchange losses (gains)
Loss (gain) on sales of investment securities
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Other
SubtotalInterest and dividend income received
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from redemption of investment securities
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other
Cash flows from investing activities
Net cash provided by (used in) financing activities
Net decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities- 16 -

Current fiscal year
(January 1, 2021
From December 31, 2021)

5,890,009
1,609,008
659
39,915
36,111
1,122(77,309)

7,133,401
1,777,323(10,741)
71,94324,6092,529(58,287)

138,963

151,399(22,265)(114,578)
15,88455,54024,872(351)
517(28,189)(467,843)(164,891)(612,402)(4,605)122,057

677,197
7,997,031
78,114(1,527,029)
6,548,116

268,5888,483,156
58,805(1,905,137)
6,636,823(1,388,061)(581,146)(9,130)3,027
1,200,000
619,587(63,105)
58,877(1,828)(161,779)(3,827,976)
351(659,900)(148,000)
2,024(12,150)
200,000
472,646(58,435)
28,285
7,875(3,995,279)(1,590,687)(1,825,436)(3,416,124)(3,244)(1,916,504)(1,919,749)

(Thousand yen)Previous fiscal year
(On January 1, 2020
To December 31, 2020)
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 17 -

Current fiscal year
(January 1, 2021
From December 31, 2021)(38,921)283,248

2,931,291
9,376,300
12,307,591

1,005,043
12,307,591
13,312,634

(5)Notes regarding consolidated financial statements(Notes regarding going concern assumption)
None(Significant matters that serve as the basis for preparation of consolidated financial statements)
1 Scope of consolidation
Matters regarding Number of consolidated subsidiaries: 8
Names of consolidated subsidiaries
MILBON USA, INC.
Milbon Trading (Shanghai) Co., Ltd.
Milbon Korea Co., Ltd.
MILBON (THAILAND) CO., LTD.
MILBON MALAYSIA SDN. BHD.
MILBON VIETNAM CO., LTD.
MILBON SINGAPORE PTE. LTD.
Milbon (Zhejiang) Cosmetics Co., Ltd.
2 Matters regarding application of equity method
Number of equity-method affiliates: 1
Names of companies, etc.
KOSÉ Milbon Cosmetics Co., Ltd.
3 Matters regarding the fiscal year, etc. of consolidated subsidiaries
The account closing date of consolidated subsidiaries is the same as the consolidated account closing date.
4 Matters regarding accounting policies(1)Valuation standards and methods for important assets➀ Securities
1) Held-to-maturity bonds
Stated using the amortized cost method
2) Available-for-sale securities
With market value
Stated at market value based on the market price, etc. of the account closing date (unrealized gains and losses arereported as a separate component of net assets, and cost of sales is calculated by the moving-average method)
Market value not available
Stated at cost using the moving-average method② Inventories
MerchandiseStated primarily at cost using the first-in first-out method (the balance sheet value is calculated using the inventory
write- down method based on decreased profitability)
Finished goods and work in process
Stated primarily at cost using the weighted average method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)
Raw materials
Stated primarily at cost using the weighted average method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)
Supplies
Stated primarily at cost using the last-purchase-price method (the balance sheet value is calculated using the inventory
write-down method based on decreased profitability)- 18 -

(2)Depreciation and amortization methods for important depreciable assets① Property, plant and equipment
They are amortized using the straight-line method.
Useful lives of principal assets are as follows.
Buildings and structures
31 to 50 years
Machinery, equipment and vehicles② Intangible assets

6 to 8 years

They are amortized using the straight-line method.
Software for internal use is amortized using the straight-line method over the estimated period of internal use (3 to 5 years).
(3)Accounting standards for major allowances① Allowance for doubtful accounts
The allowance for doubtful receivables is provided at an amount calculated based on the historical write-off ratio forgeneral receivables and on an estimated uncollectible amount determined by reference to the individual collectability ofcertain doubtful receivables.
② Provision for bonuses
To provide for payment of bonuses to employees (including those for employees also serving as officers), the Company
and its overseas consolidated subsidiaries record the estimated amount of payment of bonuses.
(4)Accounting method for retirement benefits① Periodic allocation of projected retirement benefits
Method of attributing expected retirement benefits to the period up to the end of the current fiscal year in calculating
retirement benefit obligations
Figures are based on the benefit formula basis.
② Method of amortizing actuarial differences and past service costs
Actuarial gains and losses are determined over a certain number of years (5 years) within the average remaining years ofservice of the eligible employees at the time of occurrence.
Actuarial differences are amortized using the occurrence, starting from the fiscal year following the occurrence.
Prior service cost is determined over a certain number of years (5 years) which are shorter than the average remaining
years of service of the eligible employees at the time of accrual.
Amortized using the straight-line method.
③ Adoption of simplified method in small companies
Certain overseas consolidated subsidiaries need to calculate net defined benefit liability and retirement benefit expenses
voluntarily at the end of the fiscal year.
The simplified method using the method where the amount paid is the retirement benefit obligation is applied.
(5)The standards for recognition of significant revenues and expenses
The Company and its overseas consolidated subsidiaries have applied the "Accounting Standards for Revenue Recognition"(corporate accounting standard No. 29, March 30, 2018) and the "Guidelines for the Application of Accounting Standards for
Revenue Recognition" (corporate accounting standard No. 30, March 30, 2018), and recognize the amount of revenues
expected to be received for replacement with the goods or services promised upon transfer of control of the goods or services
to the customer.
(6)Standard for translation of significant foreign currency dominated assets and liabilities into yen
Foreign currency denominated monetary claims and liabilities are translated into yen at the spot exchange rate on the
consolidated account closing date, and translation differences are accounted for as profit or loss. The assets and liabilities ofoverseas consolidated subsidiaries are translated into yen at the spot exchange rate on the local account closing dates ofoverseas consolidated subsidiaries, while revenue and expenses are translated into yen at the average exchange rate for theperiod, and translation differences are recorded in foreign currency translation adjustment under net assets.

- 19 -

(7)Scope of funds in the consolidated statements of cash flows
Funds (cash and cash equivalents) in the consolidated statements of cash flows comprise cash on hand, deposits available forwithdrawal as needed and short-term investments due for redemption within three months from the date of acquisition, which
are easily cashable and are subject to minimal risk of fluctuation in value.
(8)Other significant issues for the preparation of consolidated financial statements
Taxes are accounted for by the tax
Consumption tax and other similar taxes are accounted for by the tax-exclusion method.
(Per share information)
Previous fiscal year
(January 1, 2020
From December 31, 2020)
Net assets per share (Yen)
Basic earnings per share (Yen)Current fiscal year
(On January 1, 2021
To December 31, 2021)

1,117.10

1,236.41

129.24157.17(NOTE) 1 Diluted net income per share is not presented because there are no dilutive shares.
2 The basis for calculating basic earnings per share is as follows.
Previous fiscal year
(January 1, 2020
From December 31, 2020)
Profit attributable to owners of parent (Thousand yen)

Current fiscal year
(On January 1, 2021
To December 31, 2021)

4,204,139

5,109,288

Amount not attributable to common shareholders(Thousand yen)--

Profit attributable to owners of parent relating to
Amount (Thousand yen)

4,204,139

5,109,288

32,529,606

32,508,933

Average number of outstanding shares of common stockduring the period (shares)(Significant subsequent events)
None

5. Other(1)Change of officers➀Change in representatives
None②Changes in Other Officers (Scheduled for March 29, 2022)
1. Retiring Director
Noboru Shigemune, Senior Executive Director
Teruo Murata, Board Director
2. Candidate for new Director
Junji Morimoto, Board Director (FP Headquarters Dept., International FP Headquarters Dept., Education Planning
Dept.)
Hidenori Sakashita, Board Director (Corporate Strategy Development Dept., Cosmetics Planning Dept., Information
Planning Dept.)
Etsuhiro Takato, Outside Board Director (Part-time)
Chisa Hayakawa, Outside Board Director (Part-time)(currently Advisor of Ajinomoto Co., Inc.)(currently Executive Officer, General Manager of Finance &Accounting and Investor Relations Division of Calbee Corporation)- 20 -