Consolidated Financial Results for the Three Months Ended March 31, 2019
[Japanese GAAP]May 7, 2019
Tokyo Stock Exchange, First Section

Name of registrant:
Milbon Co., Ltd.
Code No.:4919
URL http://www.milbon.co.jp
Representative:
Ryuji Sato, President and CEO
Inquiries:
Masahiro Murai, Managing Director
Scheduled filing date for quarterly report: May 10, 2019
Scheduled starting date of dividend payments: Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: None

TEL: +81-3-3517-3915(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the three months ended March 31, 2019 (January 1, 2019 - March 31, 2019)(1) Consolidated operating results
Net sales

Operating income

Three months ended March 31, 2019

Million yen
7,886

%
3.9

Million yen
1,265

%
(9.0)

Million yen
1,162

Three months ended March 31, 2018

7,592

-

1,390

-

1,208

(Note) Comprehensive income(Percentages show year-on-year changes.)
Profit attributable to ownersof parent%
Million yen
%
(3.8)
841
(21.7)

Ordinary income

-

1,074

-

Three months ended March 31, 2019: 1,080 million yen [(3.4)%] Three months ended March 31, 2018: 1,118 million yen [-%]

Three months ended March 31, 2019

Basic earnings per share
Yen
25.72

Three months ended March 31, 201832.83

Diluted earnings per share
Yen-(Notes)
1. From the three-month period ended March 31, 2019, the Company has early applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Board ofJapan (ASBJ) Statement No. 29 issued on March 30, 2018) and the “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30
issued on March 30, 2018). In accordance with the principle treatment, the new accounting policy has been applied retrospectively to all prior-period financial statements.
2. As of the fiscal year ended December 31, 2017, the Company changed its fiscal year end from December 20 to December 31. For the consolidated accounting, overseas
consolidated subsidiaries changed their fiscal year end from September 30 to December 31. Therefore, year-on-year changes are not stated for the three months ended March
31, 2018, because the three-month period ended March 31, 2018 (January 1, 2018 to March 31, 2018) differs from that of the previous three-month period (December 21, 2016
to March 20, 2017).
(2) Consolidated financial position
Total assets
Million yen
37,720

As of March 31, 2019
As of December 31, 2018
(Reference)

EquityNet assets
Million yen
33,24839,634As of March 31, 2019: 33,248 million yen

Equity ratio%
88.1

33,151

83.6

As of December 31, 2018: 33,151 million yen(Note) The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 issued on February 16, 2018), etc.,from the beginning of the three-month period under review. Accordingly, figures of total assets and equity ratio for the fiscal year ended December 31, 2018 have been adjusted
to reflect the retrospective application of the aforementioned accounting standard, etc.

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

Year ended December 31, 2018-Year ending December 31, 2019-Year ending December 31, 2019
(forecast)(Note) Changes to latest dividends forecast: None

Yen
24.00

27.00

End of 3rd quarterEnd of fiscal year
Yen

Total

-

Yen
30.00

Yen
54.00

-

27.00

54.00

3. Consolidated operating forecasts for the fiscal year ending December 31, 2019 (January 1, 2019 - December 31, 2019)(Percentages show year-on-year changes.)
Net salesYear ending December 31, 2019

Million yen
36,600

Profit attributable toOperating income
Ordinary income
Basic earnings per shareowners of parent% Million yen% Million yen% Million yen
%
Yen
8.0
6,840
9.3
6,190
6.5
4,350
(3.2)
132.86(Note) Changes to latest performance forecast: None
(Note) Following the change in accounting policy, figures have been adjusted to reflect the retrospective application of the new accounting policy. Accordingly, year-on-yearchanges show comparison with the retrospectively adjusted figures.

*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) Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
1) Changes in accounting policies due to amendment to theaccounting standards, etc.
: None2) Changes in accounting policies other than those in 1) above: Yes3) Changes in accounting estimates: None4) Retrospective restatements: None(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period(including treasury shares)
2) Number of treasury shares at the end of the period
3) Average number of shares during the period

As ofMarch 31, 2019
As ofMarch 31, 2019
Three months ended
March 31, 201933,117,234 shares
377,680 shares
32,739,664 shares

As ofDecember 31, 2018
As ofDecember 31, 2018
Three months ended
March 31, 201833,117,234 shares
377,460 shares
32,740,412 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.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019

Contents of supplementary materials
1. Qualitative Information on Consolidated Results for the Current Period .............................................................................

2(1)

Explanation on operating results .................................................................................................................................

2(2)

Explanation on financial position ...............................................................................................................................

3(3)

Explanation on forward-looking statements including consolidated operating forecasts ............................................

3

2. Quarterly Consolidated Financial Statements and Main Notes ............................................................................................

4(1)

Quarterly Consolidated Balance Sheets ......................................................................................................................

4(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................

6

Quarterly Consolidated Statements of Earnings
Three Months Ended March 31, 2018 and 2019 ...................................................................................................

6

Quarterly Consolidated Statements of Comprehensive Income(3)

Three Months Ended March 31, 2018 and 2019 ...................................................................................................

7

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

8

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

8

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

8

Changes in accounting policies ....................................................................................................................................

8

Additional information ................................................................................................................................................

8

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

8-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 20191.

Qualitative Information on Consolidated Results for the Current Period(1)Explanation on operating results
During the three-month period ended March 31, 2019, the Japanese economy continued on a moderate recovery trend amid
improvement in the employment and income environment; however, there were signs of weakness in some areas of exports andproduction. The global economy is also generally on a recovery trend, while there are concerns about the impact on various
countries’ economies due to prolonged trade friction between the U.S. and China and the Brexit issue. The operating
environment in the beauty industry remains severe, as it has become a challenge to recruit and retain human resources due tothe impact of population movements.
Amid this environment, the Milbon Group is working with salons premised on the goal of “promoting the NEXT 100 by
supporting ‘the creation of salons where human resources development is well established,’ where personnel are nurtured andretained, and creating ‘lifetime beauty salons’ by training beauty partners who fulfill lifetime beauty for women.”
Consolidated net sales during the three-month period ended March 31, 2019 amounted to 7,886 million yen (up 3.9% year onyear). This was mainly due to strong performance in the hair care product category, including steady progress in salons by the“milbon” brand targeting the global market, in addition to continued substantial growth for the fashion color Ordeve Addicthy
in the hair coloring product category. In overseas markets, the East Asian region, mainly South Korea and China, performed
steadily.
Operating income was 1,265 million yen (down 9.0% year on year), ordinary income was 1,162 million yen (down 3.8% year
on year), and profit attributable to owners of parent was 841 million yen (down 21.7% year on year). The decline in income
was primarily due to recording of 305 million yen in gain on sales of investment securities due to sales of cross-held shares,
etc., and recording of 209 million yen as difference from estimated value of sales returns for the previous version of Aujua inthe first quarter of the previous fiscal year.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 30,2018) and the “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued
on March 30, 2018) from the three-month period under review. Regarding the application of the Accounting Standard for
Revenue Recognition, etc., the new accounting policy has been applied retrospectively to all prior-period financial statements,
in accordance with the principle treatment as set forth in Paragraph 84 of the Accounting Standard for Revenue Recognition.

Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below:[Breakdown of consolidated net sales by product category](Unit: Million yen)
Product category

Three months ended
March 31, 2018
AmountThree months ended
March 31, 2019

Ratio (%)

AmountRatio (%)

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

Hair care products

4,358

57.4

4,323

54.8

(34)

(0.8)

Hair coloring products

2,848

37.5

3,175

40.2

326

11.5

Permanent wave products

341

4.5

337

4.3

(3)

(1.1)

Others

44

0.6

50

0.7

5

12.1

Total

7,592

100.0

7,886

100.0

293

3.9

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Three months ended
March 31, 2018
AmountThree months ended
March 31, 2019

Ratio (%)

AmountRatio (%)

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

Domestic sales

6,282

82.7

6,428

81.5

145

2.3

Overseas sales

1,310

17.3

1,458

18.5

148

11.3

Total

7,592

100.0

7,886

100.0

293

3.9

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Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019(2)

Explanation on financial position
Total assets at the end of the three-month period ended March 31, 2019 decreased by 1,914 million yen compared to the end of
the previous fiscal year to 37,720 million yen.
Current assets decreased by 2,101 million yen compared to the end of the previous fiscal year to 16,729 million yen. This was
mainly due to the 2,932 million yen decrease in cash and deposits, the 320 million yen decrease in notes and accounts receivable- trade, the 915 million yen increase in merchandise and finished goods and the 191 million yen increase in raw materials andsupplies.
Non-current assets increased by 187 million yen compared to the end of the previous fiscal year to 20,991 million yen. This was
mainly due to the 311 million yen increase in investment securities attributable to factors such as higher prices of listed stocks.
Current liabilities decreased by 1,964 million yen compared to the end of the previous fiscal year to 4,380 million yen. This was
mainly due to the 1,390 million yen decrease in income taxes payable, the 680 million yen decrease in accounts payable - otherand the 378 million yen increase in accounts payable - trade.
Non-current liabilities decreased by 46 million yen compared to the end of the previous fiscal year to 91 million yen.
Net assets increased by 96 million yen compared to the end of the previous fiscal year to 33,248 million yen. This was mainly
due to the 206 million yen increase in valuation difference on available-for-sale securities attributable to factors such as higher
prices of listed stocks and the 140 million yen decrease in retained earnings.
As a result, the equity ratio changed from 83.6% at the end of the previous fiscal year to 88.1%. Net assets per share based on
the total outstanding shares as of the end of the period under review increased from 1,012.58 yen per share at the end of theprevious fiscal year to 1,015.55 yen per share.
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28 issued on February 16, 2018), etc., from the beginning of the three-month period under review. Accordingly, for the
explanation on financial position, comparisons have been made with figures at the end of the previous fiscal year after
retrospectively applying the standard, etc.

(3)

Explanation on forward-looking statements including consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated operating forecasts, which were announced
on February 13, 2019.

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Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 20192.

Quarterly Consolidated Financial Statements and Main Notes(1)

Quarterly Consolidated Balance Sheets(Thousand yen)Previous Fiscal Year

Current First Quarter(As of December 31, 2018)(As of March 31, 2019)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities-4-

9,778,129
3,875,865
3,643,382
39,6871,140,083
410,547(56,335)
18,831,359

6,845,680
3,555,079
4,558,790
94,704
1,331,815
388,584(44,987)
16,729,667

6,651,355
2,107,722
5,028,467
13,830540,072
14,341,447
987,821

6,588,920
2,130,712
5,030,469
65,123619,856
14,435,081
1,030,168

4,147,992
324,909
1,049,684(48,272)
5,474,314
20,803,583
39,634,942

4,459,972
39,9681,074,319(48,272)
5,525,988
20,991,238
37,720,905

865,878
2,376,675
1,585,720
419,922
1,097,287
6,345,484

1,244,709
1,696,441
194,738
356,292
888,629
4,380,811

57,24380,417
137,660
6,483,145

11,02880,41791,446
4,472,258

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019

(Thousand yen)Previous Fiscal Year

Current First Quarter(As of December 31, 2018)(As of March 31, 2019)

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-5-2,000,000
200,61330,614,693(558,811)
32,256,496

2,000,000
200,61330,474,500(559,829)
32,115,284

859,702

1,066,185

264,024(228,425)
895,301
33,151,797
39,634,942

281,552(214,374)
1,133,363
33,248,647
37,720,905

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Three Months Ended March 31, 2018 and 2019

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Company house defrayment income
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
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

Three Months Ended
March 31, 2018
(January 1, 2018 March 31, 2018)
7,592,773
2,422,487
5,170,286
3,780,210
1,390,075-6-(Thousand yen)Three Months Ended
March 31, 2019
(January 1, 2019 March 31, 2019)
7,886,303
2,573,100
5,313,202
4,048,095
1,265,107

1,672
192

2,820
232

764

7,951

–
14,9005,576
23,105

5,726
9,644
6,977
33,351

148,648
55,55479
204,282
1,208,898

136,020–2
136,023
1,162,435

9
305,980
305,990

767
–
767

338
338
1,514,551
435,335
4,359
439,694
1,074,856
1,074,856

25
25
1,163,176
133,555
187,621
321,177
841,999
841,999

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019
Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2018 and 2019

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

Three Months Ended
March 31, 2018
(January 1, 2018 March 31, 2018)
1,074,856-7-(Thousand yen)Three Months Ended
March 31, 2019
(January 1, 2019 March 31, 2019)841,999

135,978(88,182)(4,331)
43,464
1,118,321

206,483
17,527
14,051
238,062
1,080,061

1,118,321

1,080,061––

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Three Months Ended March 31, 2019(3) Notes regarding quarterly consolidated financial statements(Notes regarding going concern assumption)
None(Notes in case of any significant changes in shareholders’ equity)
None(Changes in accounting policies)
With the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 30, 2018; hereinafter“Revenue Recognition Accounting Standard”) and the “Implementation Guidance on Accounting Standard for Revenue
Recognition” (ASBJ Guidance No. 30 issued on March 30, 2018) becoming applicable from the beginning of the fiscal yearthat begins on or after April 1, 2018, the Company has early applied the Revenue Recognition Accounting Standard, etc., fromthe beginning of the three-month period under review.
When consideration arising from contracts with customers includes variable consideration, the Company includes suchvariable consideration within the transaction price to the extent that it is highly probable that a significant reversal of previously
recognized cumulative revenue will not occur when the uncertainty is subsequently resolved. Accordingly, sales rebates
previously presented as selling, general and administrative expenses are deducted from net sales and expenses related to thegoods transferred to business partners free of charge according to their sales results are added to cost of sales.
The application of the Revenue Recognition Accounting Standard, etc., is in accordance with the principle treatment as set
forth in Paragraph 84 of the Accounting Standard for Revenue Recognition, and the new accounting policy has been applied
retrospectively to all prior-period financial statements.
As a result, net sales and gross profit for the three-month period ended March 31, 2018 decreased by 196 million yen and 381
million yen, respectively, compared to the figures before retrospective application. The application of the new accounting
policy had no impact on operating income, ordinary income, profit before income taxes and profit.
(Additional information)(Application of the “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.
28 issued on February 16, 2018), etc., from the beginning of the three-month period under review. Accordingly, deferred tax
assets are presented under investments and other assets and deferred tax liabilities are presented under non-current liabilities.
(Segment information, etc.)
The Company omits segment information, as it operates just one business segment engaged in the manufacturing and sales ofhair cosmetics.

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