Consolidated Financial Results for the Fiscal Year Ended December 20, 2016
[Japanese GAAP]
January 25, 2017
Name of registrant:
Milbon Co., Ltd.
Tokyo Stock Exchange, First Section
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
TEL: +81-6-6928-2331
Scheduled date of annual general meeting of shareholders: March 16, 2017
Scheduled filing date for Securities Report: March 16, 2017
Scheduled starting date of dividend payments: March 17, 2017
Preparation of supplementary materials on the Consolidated Financial Results: Yes
Holding of an explanatory meeting on 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 20, 2016 (December 21, 2015 - December 20, 2016)(1) Consolidated operating results
Net salesYear ended December 20, 2016

Year ended December 20, 2016%
6.4

Million yen
5,113

%
8.2

27,377

8.5

4,727

6.2

Year ended December 20, 2016: 2,757 million yen [(16.0)%]

Million yen
4,733
4,427

180.20Equity in earnings (losses) of affiliates

4.9

2,950

12.6

Year ended December 20, 2015: 3,280 million yen [13.0%]

Basic earnings per share Diluted earnings per share Return on equity (ROE)
Yen
Yen
%
187.47
11.4

Year ended December 20, 2015
(Reference)(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
6.9
3,069
4.0

Ordinary income

Million yen
29,134

Year ended December 20, 2015
(Note) Comprehensive income

Operating income-

Return on assets (ROA)%
15.0

Operating income ratio
%
17.6

15.0

17.3

11.7

Year ended December 20, 2016: – million yen

Year ended December 20, 2015: – million yen(2) Consolidated financial position
Total assets
Million yen
32,444As of December 20, 2016
As of December 20, 2015
(Reference)

EquityNet assets
Million yen
27,70630,799Equity ratio

26,212As of December 20, 2016: 27,706 million yen

Net assets per share
%
85.4

Yen
1,692.33

85.1

1,601.02

As of December 20, 2015: 26,212 million yen(3) Consolidated cash flows

Year ended December 20, 2016

Cash flows from operating
activities
Million yen
3,355

Cash flows from investing
activities
Million yen(4,366)

Cash flows from financing
activities
Million yen(1,262)

Cash and cash equivalents
at end of period
Million yen
4,737Year ended December 20, 2015

3,895

(2,834)(1,135)

7,086

Total dividends(Annual)Dividend payout Dividends onratio
equity (DOE)(Consolidated) (Consolidated)

2. Payment of dividends
Annual dividends-

End of 2ndquarterYen
35.00

Year ended December 20, 2016

-

38.00

-

Year ending December 20, 2017
(forecast)

-

40.00

-

End of 1st quarter
Yen
Year ended December 20, 2015

End of 3rd
End of fiscal year
quarter
Yen
Yen
39.00

Total
Yen
74.00

Million yen
1,211

%
41.1

%
4.8

40.00

78.00

1,277

41.6

4.7

42.00

82.00

38.9

3. Consolidated operating forecasts for the fiscal year ending December 20, 2017 (December 21, 2016 - December 20, 2017)(Percentages show year-on-year changes.)
Net salesYear ending December 20, 2017

Million yen
31,000

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
6.4
5,300
3.6
4,890
3.3
3,450
12.4
210.73

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries resulting in the change in the scope of consolidation)
New: 0 companies (Company name: ): NoneExclude: 0 companies (Company name: )(2) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: Yes2) Changes in accounting policies other than those in 1) above: None3) Changes in accounting estimates: None4) 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

As ofDecember 20, 2016
As ofDecember 20, 2016
Year ended
December 20, 2016

3) Average number of shares during the period

16,558,617 shares
186,816 shares
16,371,984 shares

As ofDecember 20, 2015
As ofDecember 20, 2015
Year ended
December 20, 2015

16,558,617 shares
186,242 shares
16,373,127 shares(Reference) Summary of non-consolidated operating results
Non-consolidated financial results for the fiscal year ended December 20, 2016 (December 21, 2015 - December 20, 2016)(1) Non-consolidated operating results

Year ended December 20, 2016

Net sales
Million yen
27,558%
6.3

Year ended December 20, 2015

25,934

7.2

Year ended December 20, 2016

Basic earnings per share
Yen
177.05

Year ended December 20, 2015

184.49Operating income
Million yen
4,841
4,786

%
1.1
4.8

(Percentages show year-on-year changes.)
Ordinary income
ProfitMillion yen%
Million yen
%
4,489
(0.1)
2,898
(4.0)
4,491

3.2

3,020

9.4

Diluted earnings per share
Yen-(2) Non-consolidated financial position

As of December 20, 2016
As of December 20, 2015
(Reference)

EquityTotal assets
Million yen
32,75030,900
As of December 20, 2016: 28,201 million yen

Net assets
Million yen
28,201Equity ratio

26,550Net assets per share
%
86.1

Yen
1,722.58

85.9

1,621.69

As of December 20, 2015: 26,550 million yen*Indication of the status of execution of audit procedures
As these financial results are not subject to audit procedures pursuant to the Financial Instruments and Exchange Act, said audit procedures were notcompleted at the time of disclosure of this report.
*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. For notes on the use of preconditions ofoperating forecasts and the use of operating forecasts, refer to “1. Analysis of Operating Results and Financial Position (1) Analysis of operating results”
on page 2 of the supplementary materials.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

Contents of supplementary materials
1. Analysis of Operating Results and Financial Position ............................................................................................................... 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...................................................................................................................................................... 6
3. Management Policy.................................................................................................................................................................... 8(1)

Basic management policies .............................................................................................................................................. 8(2)

Target management indices .............................................................................................................................................. 8(3)

Medium- to long-term management strategies and target management indices ............................................................... 8(4)

Tasks to be addressed by the Company ............................................................................................................................ 9

4. Basic Rationale for Selecting the Accounting Standards ........................................................................................................... 9
5. Consolidated Financial Statements .......................................................................................................................................... 10(1)

Consolidated Balance Sheets ......................................................................................................................................... 10(2)

Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................................... 12(3)

Consolidated Statements of Changes in Shareholders’ Equity ....................................................................................... 14(4)

Consolidated Statements of Cash Flows ........................................................................................................................ 16-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

1.

Analysis of Operating Results and Financial Position(1)

Analysis of operating results
1)

Operating results for the fiscal year under review
During the fiscal year under review, the Japanese economy was on a moderate recovery trend. Even so, improvements incorporate earnings and capital investment came more or less to a standstill. The economic outlook is also uncertain, due tofactors such as the direction that new U.S. President Trump will take, together with the concerns over an economic
slowdown in China and other Asian emerging economies. In the beauty industry, business conditions continue to posechallenges due to the adverse impact of demographic trends and other factors.
Amid this environment, the Milbon Group worked with salons toward the goal of “helping to lend radiance to the stages ofbeauty experienced by women as individuals, thereby seizing on the two demographic milestones of beauty – that of the‘Hanako generation’ and that of the ‘Hanako junior generation’.”Consolidated net sales during the fiscal year under review increased by 1,757 million yen to 29,134 million yen (up 6.4%
year-on-year). In the hair care product category, the increase in net sales was due to the growth of Aujua, the Company’s
premium brand, and brisk sales of new products in leave-in hair treatments from the Company’s professional brand. In thehair coloring product category, one of the factors for the increase in net sales was that sales of the hair coloring product line
specialized for gray hair launched last year continues to grow steadily. In overseas markets, growth in the East Asia region,
including China and South Korea, was also a major contributor.
Operating income was 5,113 million yen (up 8.2% year-on-year), ordinary income was 4,733 million yen (up 6.9%
year-on-year), and profit attributable to owners of parent was 3,069 million yen (up 4.0% year-on-year). Consolidated net
sales and all levels of income were at new record highs.

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]
Product category(Unit: Million yen)Previous fiscal year

Current fiscal year

AmountAmountRatio (%)

Ratio (%)

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

Hair care products

16,19559.1

17,711

60.8

1,516

9.4

Hair coloring products

9,506

34.7

9,892

34.0

386

4.1

Permanent wave products

1,410

5.2

1,260

4.3

(150)

(10.7)

Others

264

1.0

270

0.9

5

2.2

Total

27,377100.0

29,134

100.0

1,757

6.4

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)
Ratio (%)

Increase(decrease)amountDomestic sales

23,88087.2

25,287

86.8

1,406

5.9

Overseas sales

3,496

12.8

3,847

13.2

350

10.0

Total

27,377100.0

29,134

100.0

1,757

6.4

Previous fiscal year
AmountCurrent fiscal year

Ratio (%)

-2-

AmountYear-on-yearchange (%)

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

2)

Outlook for fiscal 2017
Japan’s economic outlook is uncertain due to factors including the economic slowdown in China and other Asian emerging
economies and the direction that new U.S. President Trump will take. In the beauty industry, business conditions continue
to pose challenges due to the adverse impact of demographic trends.
Amid this environment, the Milbon Group will work with salons premised on the goal of “supporting ‘the development oflifelong hair designers’ to create lifelong customers by understanding their generational perspectives and values, with theaim of improving productivity through consumption that spreads across generations.” We will also stay on a growth track
through measures including the full-scale rollout of premium brand “milbon” in the global market.
As a result of these efforts, the Company anticipates net sales of 31,000 million yen (up 6.4% year-on-year), operating
income of 5,300 million yen (up 3.6% year-on-year), ordinary income of 4,890 million yen (up 3.3% year-on-year), andprofit attributable to owners of parent of 3,450 million yen (up 12.4% year-on-year) on a consolidated basis for the next
fiscal year.

(2)

Analysis of financial position
1)

Assets, liabilities and net assets
Total assets at the end of the fiscal year ended December 20, 2016 increased by 1,644 million yen compared to the end of
the previous fiscal year to 32,444 million yen.
Current assets decreased by 1,213 million yen compared to the end of the previous fiscal year to 13,411 million yen. Thiswas mainly due to the 1,500 million yen decrease in securities (jointly managed designated money trusts, etc.), the 888
million yen decrease in cash and deposits, the 545 million yen increase in merchandise and finished goods and the 380
million yen increase in notes and accounts receivable - trade.
Non-current assets increased by 2,858 million yen compared to the end of the previous fiscal year to 19,032 million yen.
This was due mainly to the 2,399 million yen increase in property, plant and equipment associated with the extension workof the Yumegaoka Plant and the 391 million yen increase in intangible assets.
Current liabilities increased by 234 million yen compared to the end of the previous fiscal year to 4,591 million yen. Thiswas due mainly to the 445 million yen increase in accounts payable - other.
Non-current liabilities decreased by 83 million yen compared to the end of the previous fiscal year to 146 million yen.
Net assets increased by 1,493 million yen compared to the end of the previous fiscal year to 27,706 million yen. This wasdue mainly to the 1,808 million yen increase in retained earnings and the 268 million yen decrease in foreign currencytranslation adjustment.
As a result, the equity ratio changed from 85.1% at the end of the previous fiscal year to 85.4%. Net assets per share basedon the total outstanding shares as of the end of the period under review increased from 1,601.02 yen per share at the end of
the previous fiscal year to 1,692.32 yen per share.

2)

Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the current fiscal year decreased by 2,349 million yen
compared to the end of the previous fiscal year to 4,737 million yen, as a result of using the net cash provided by operating
activities for the payment of income taxes and the purchase of property, plant and equipment.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 3,355 million yen. This was mainly the result of posting 4,426
million yen in profit before income taxes, depreciation of 1,083 million yen, 1,510 million yen in income taxes paid, the710 million yen increase in inventories and the 402 million yen increase in notes and accounts receivable - trade.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 4,366 million yen. This was mainly due to the purchase of property, plantand equipment of 3,748 million yen and the purchase of intangible assets of 520 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 1,262 million yen. This was mainly due to the cash dividends paid toshareholders of 1,259 million yen.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

(Reference) Cash flow-related indicators
Year ended
December 20,
2012
Equity ratio (%)
Equity ratio based on market
value (%)
Interest-bearing debt to cash
flows ratio (%)

Year ended
December 20,
2013

Year ended
December 20,
2014

Year ended
December 20,
2015

Year ended
December 20,
2016

86.1

84.1

85.7

85.1

85.4

163.8

243.3

183.0

264.2

223.3

2.7

2.3

3.0

2.1

2.4

(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 number ofoutstanding shares at the end of the period (excluding treasury shares).

*

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 the end of improving 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 ofshareholders, and it is the Group’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 40 yen per share. As a result, the total annual dividend per share willamount to 78 yen per share, which includes the interim dividend of 38 yen per share that has already been paid.
For the following fiscal year, we plan to pay an annual dividend of 82 yen per share.

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

(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 future risks identified in this section are based on assessments made by the Company as of the end of the fiscal year underreview. The Group recognizes the possibility of these risk events actually occurring and has prepared policies to prevent andavert such risks and take appropriate measures to minimize the impact of such risks when they do occur.
1) Risks associated with global expansion
The Milbon Group is aggressively expanding its business into the overseas markets. Global expansion entails risks relating
to intellectual property rights including counterfeit goods, unforeseeable changes in laws and regulations, and risks ofsocial unrest due to terrorism, war and other factors. Such risks could have a major impact on the Group’s operating results
and financial position.
2) Information security
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 major impact on the Group’s operating results and financial position.
3) Risks associated with debt collection
The Milbon Group deliberates and records necessary reserves upon regularly reviewing its business partners from bothquantitative and qualitative perspectives and in terms of collection status. However, deterioration in the business partner’s
credit standing or events such as bankruptcy could have a major impact on the Group’s operating results and financial
position.
4) Risks associated with major accidents
The Milbon Group utilizes company cars in its sales activities. The Group implements safety measures that place maximum
priority on human life, including strict control over driving and the reinforcement of safety training. However, should amajor accident event occur, it could lead to the loss of the customers’ and the public’s trust in the Group and have a major
impact on the Group’s operating results and financial position.
5) Risks associated with product-related health hazards
Many Milbon Group products come into direct contact with consumers’ hair and scalp, and as such the Milbon Group
places top priority on its efforts to ensure product safety and quality. However, should an unforeseeable incident involving
a major health hazard occur, it could lead to the loss of the customers’ and the public’s trust in the Group and have a major
impact on the Group’s operating results and financial position.

-5-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

2.

Outline of the Milbon Group
Name

Location

Capital stockor capital
contribution

New York, USA

USD 2 million

Main line ofbusiness

Percentage ofvoting rights held(%)

Relationship with theCompany

100.0

Sells the Company’s hairproducts in the U.S.

(Consolidated subsidiary)
MILBON USA, INC.

Sale of hairproducts(Consolidated subsidiary)
Milbon Trading(Shanghai) Co., Ltd.

Shanghai, China

JPY 430 million

Sale of hairproducts(Consolidated subsidiary)
Milbon Korea Co., Ltd.

Seoul,South Korea

KRW 3,000 Sale of hairmillion products

Sells the Company’s hairproducts in China.
100.0 Three executives holdconcurrent posts at theCompany.
Sells the Company’s hairproducts in South Korea.
100.0 Two executives holdconcurrent posts at theCompany.

(Consolidated subsidiary)
Manufacture and
MILBON (THAILAND) CO., Rayong, Thailand THB 450 million sale of hairLTD.
products(Note) All companies fall under the category of “specified subsidiary.”-6-

Manufactures and sells the
100.0 Company’s hair productsin Thailand.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

The following diagram shows the positioning of Milbon Group companies and the Group’s businesses.
(Diagram of business activities)

Milbon Co., Ltd. (Manufacturing and sales company)

Commercial use

MILBON USA, INC.
Milbon Trading (Shanghai) Co., Ltd.
Milbon Korea Co., Ltd.

Distributors

Store sales

Commercial use

Store sales

Commercial use

Store sales

Commercial use

Store sales

Commercial use

Store sales

Commercial use

Store sales

MILBON (THAILAND) CO., LTD.

Distributors

SalonsSalonsGeneral consumers

General consumers

Overseas transactions

Domestic transactions(Notes) 1. For overseas transactions, sales channels differ depending on the country.
2. The main items for store sales are hair-care products.

-7-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

3.
(1)

Management Policy
Basic management policies
The Milbon Group has been developing its business that supports a beautiful way of life through hair designers.
Given our aim or building long-term relationships of trust with customers, we have created a brand statement which
embodies the value we deliver to our customers through business pursued by the Milbon Group, combined with a slogan
symbolizing the brand statement.
―Brand Statement―“To live beautifully.
It’s how we approach the world. It’s the one, single idea that drives us.
Our hair frames our personal beauty—how it’s styled, how it feels, how it flows.
It sets the stage for the inner self we radiate. Everyone’s hair is unique, and everyone’s beauty is, too. Our purpose is to help
every woman find, embrace, and express her individuality—to head out into each day confidently and gracefully, and to live
vibrantly.
For more than 50 years, professional stylists have been our partners: we learn from and inspire each other. What unites us is
our passion for transforming everything we touch into something beautiful. Together, we constantly push the boundaries of
the global haircare industry. Together, we help give women the confidence, sophistication, and grace with which they inspire
the world.”―Brand Slogan―
Milbon. Find Your Beauty.
(2)

Target management indices
From the standpoint of effectively utilizing shareholders’ equity and boosting earning power, the Milbon Group aims to
exceed the following indices in 2019, the final year of the Medium Term 5-Year Business Vision (2015-2019).

(3)

1)

ROE (Return On Equity): 12%2)

Consolidated Operating Income Ratio:

20%

Medium- to long-term management strategies and target management indices
The Milbon Group has formulated a Medium Term 5-Year Business Vision (2015-2019) covering the 5-year period
beginning in 2015. The Milbon Group has set forth the following global vision: “Milbon aims to be the global No.1, first asa Japanese professional manufacturer, by cultivating global field ideas through human resource development and training inorder for hair designers to achieve their goals,” and aims to achieve consolidated net sales of 35,000 million yen,consolidated operating income of 7,000 million yen and overseas sales to total sales ratio of 18.6% in 2019, the final year of
the 5-year plan.
As a part of this, we will develop personnel who can conduct business on a global basis and who will lead the company in the
future, as well as develop products and engage in marketing activities on a localized basis.

-8-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

(Vision by area)
Japan: Be the first in the world to create an aging beauty model to respond to the declining birthrate

East Asia: Foster local employees and promote educational and marketing activities to create a growthSoutheast Asia

: Start full-scale operation of the Thai Factory and create a foundation that will become a new

U.S. and Europe: Switch the business model to a distributor based system, and create opportunities to enter theand the aging of society
track which will be the pillar for Asia, including the earnings structure
growth pillar after Japan and East Asia
market in Europe(Global financial strategy)● Execute growth investment in order to build a global product supply framework and develop more localized marketing
activities in each region.
● Carry out shareholder returns with a target payout ratio of 40%, proactively returning to investors the profits earned
through growth. Also, conduct stock splits as appropriate in light of the share price and liquidity in the market.
Based on the above strategies, we aim to be No.1 in Asia and enter the top five in the world in the hair care products
professional use market in 2019, the final year of the 5-year plan.
(4)

Tasks to be addressed by the Company
1) In terms of the sales framework, in order to achieve further evolution in the Fieldperson (education-oriented sales
representative) strategy, raise the quality of sales activities and educational support for salons through selection andconcentration of field activities and create Milbon salons that will be the model for activities and success.
2) In product development, further improve Target Authority Customer (TAC) product development system, which catches thelatest changes in hair design trends and utilizes such information in development.
3) Discover customers’ latent needs and improve product development technologies with basic and fundamental research torespond to such needs.
4) Build a product supply framework which matches the needs of each region by improving the production capacity of plants inJapan and overseas, and by raising the efficiency of the distribution system.
5) In order to advance our global vision, develop a system for fostering human resources capable of international businessactivities, executives with a keen sense of management and specialists.

4.

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), as it makes it possible to compare the consolidated financial statements against previous
fiscal year and against 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.

-9-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 20165.
(1)

Consolidated Financial Statements
Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year(As of December 20, 2015)

Current Fiscal Year(As of December 20, 2016)

4,912,293
3,424,543
2,500,000
2,428,521
30,925835,568
278,166
263,456(48,570)
14,624,904

4,023,328
3,805,519
1,000,000
2,974,165
36,684
883,147
289,131573,252(173,901)
13,411,329

9,019,076(4,756,405)
4,262,671
4,891,566(3,771,219)
1,120,346
5,277,410
1,348,999
2,191,555(1,919,490)
272,064
12,281,492
398,357

11,826,282(5,031,190)
6,795,092
6,219,285(3,841,667)
2,377,617
5,154,087
21,093
2,161,337(1,828,094)
333,243
14,681,134
789,601

2,525,286
278,650
5,330
734,891(49,681)3,494,477
16,174,327
30,799,232

2,621,957
249,854
6,667
737,198(53,556)3,562,121
19,032,857
32,444,187

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
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
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 10 -

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016
(Thousand yen)Previous Fiscal Year(As of December 20, 2015)
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for sales returns
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets- 11 -

Current Fiscal Year(As of December 20, 2016)

684,978
2,343,762
749,005
18,394
108,823
451,599
4,356,565

687,1932,788,818
678,180
15,198
137,562
284,059
4,591,012

27,425
117,962
84,745230,133
4,586,698

32,27030,667
83,788
146,726
4,737,738

2,000,000
199,748
23,440,262(542,094)
25,097,916

2,000,000
199,946
25,248,823(544,946)
26,903,823

737,221752,695

311,451
65,944
1,114,616
26,212,533
30,799,232

43,336
6,592
802,624
27,706,448
32,444,187

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016(2)

Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Consolidated Statements of Earnings

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
Gain on surrender of insurance
Other
Total non-operating income
Non-operating expenses
Sales discounts
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Fiscal Year Ended
December 20, 2015
(December 21, 2014 December 20, 2015)
27,377,173
8,695,222
18,681,951
13,954,349
4,727,601- 12 -(Thousand yen)
Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)
29,134,631
9,034,279
20,100,351
14,986,915
5,113,435

6,098
50,47861,611
43,962
27,272
189,422

4,377
54,45259,582
5,910
28,226
152,549447,972
35,6195,910
489,501
4,427,523

472,361
59,340605
532,307
4,733,678

1,403
1,403

95
95

13,128–13,1284,415,797
1,420,048
45,271
1,465,319
2,950,478
2,950,478

66,238241,389
307,627
4,426,145
1,410,348(53,420)
1,356,928
3,069,216
3,069,216

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

Fiscal Year Ended
December 20, 2015
(December 21, 2014 December 20, 2015)
2,950,478- 13 -(Thousand yen)
Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)
3,069,216

368,701
551(39,144)
330,108
3,280,586

15,474(268,114)(59,351)(311,991)
2,757,224

3,280,586

2,757,224––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016(3)

Consolidated Statements of Changes in Shareholders’ Equity
Fiscal Year Ended December 20, 2015 (December 21, 2014 - December 20, 2015)(Thousand yen)
Shareholders’ equity
Capital stock

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

2,000,000

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity199,599

21,655,660(535,654)

23,319,606(36,103)2,000,000

199,599

21,619,557(36,103)(535,654)

23,283,502

Changes of items during
periodDividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(1,129,773)(1,129,773)

2,950,478

2,950,478

148(6,933)(6,933)

493

642

–

148

1,820,704(6,439)1,814,413

2,000,000

199,748

23,440,262(542,094)

25,097,916

Total accumulated
other comprehensive
incomeTotal net assets

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

368,519

Foreign currencytranslation
adjustment
310,899

Remeasurements ofdefined benefit plans
105,089784,508

24,104,114(36,103)368,519

310,899

105,089784,508

24,068,011

Changes of items during
periodDividends of surplus(1,129,773)

Profit attributable toowners of parent
Purchase of treasury
shares2,950,478(6,933)

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period642
368,701

551(39,144)

330,108

330,108

368,701

551(39,144)

330,108

2,144,522

737,221311,451

65,944

1,114,616

26,212,533- 14 -

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

Fiscal Year Ended December 20, 2016 (December 21, 2015 - December 20, 2016)(Thousand yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

2,000,000

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity199,748

23,440,262(542,094)

25,097,916–

2,000,000

199,748

23,440,262(542,094)

25,097,916

Changes of items during
periodDividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(1,260,656)(1,260,656)

3,069,216

3,069,216

198(3,196)(3,196)

344

542

–

198

1,808,560(2,852)

1,805,906

2,000,000

199,946

25,248,823(544,946)

26,903,823

Total accumulated
other comprehensive
incomeTotal net assets

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

737,221

Foreign currencytranslation
adjustment
311,451

Remeasurements ofdefined benefit plans
65,944

1,114,616

26,212,533–

737,221311,451

65,944

1,114,616

26,212,533

Changes of items during
periodDividends of surplus(1,260,656)

Profit attributable toowners of parent
Purchase of treasury
shares3,069,216(3,196)

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period542
15,474(268,114)(59,351)(311,991)(311,991)

15,474(268,114)(59,351)(311,991)

1,493,914

752,695

43,336

6,592

802,624

27,706,448- 15 -

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Fiscal Year Ended December 20, 2016

(4)

Consolidated Statements of Cash Flows
Fiscal Year Ended
December 20, 2015
(December 21, 2014 December 20, 2015)

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Interest and dividend income
Foreign exchange losses (gains)
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, net
SubtotalInterest and dividend income received
Income taxes paid
Net cash provided by (used in) 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
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from redemption of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net decrease (increase) in treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
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- 16 -(Thousand yen)
Fiscal Year Ended
December 20, 2016
(December 21, 2015 December 20, 2016)

4,415,797
1,038,954–

4,426,145
1,083,053
241,389

4,269

129,589

19,829(6,041)(142,640)
8,507(56,577)
19,364(1,403)
13,12833,743(3,196)(58,967)
7,428(58,830)
17,141(95)
54,466(2,959)(402,947)(219,025)(710,690)

184,220

47,7381,710
5,277,137
56,025(1,437,434)
3,895,728

390
4,806,360
59,647(1,510,759)
3,355,248(2,517,265)
1,403(96,293)(4,200)9,081(93,924)–(100,558)–(65,831)35,778(49,572)
51,766(4,864)(2,834,480)(3,748,157)
1,500(520,297)(3,000)4,599(1,348)28,620(200,000)
100,000(47,798)
15,591(3,314)
12,634(5,836)(4,366,808)(6,290)(1,129,170)(1,135,461)(2,654)(1,259,571)(1,262,225)

14,118(75,736)(60,094)
7,147,043
7,086,948(2,349,522)
7,086,948
4,737,426