Consolidated Financial Results for the Six Months Ended June 20, 2014
[Japanese GAAP]
June 26, 2014
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: July 25, 2014:
Scheduled starting date of dividend payments: August 8, 2014
Preparation of supplementary materials on the quarterly results: Yes
Holding of an explanatory meeting on the quarterly results: Yes (For institutional investors and analysts)

TEL: +81-6-6928-2331(Amounts of less than one million yen have been omitted)

1.

Consolidated financial results for the six months ended June 20, 2014 (December 21, 2013- June 20, 2014)(1) Consolidated operating results
Net sales
Million yen
Six months ended
June 20, 2014
Six month ended
June 20, 2013
(Note) Comprehensive income

Operating income
Million yen(Percentages show year-on-year changes)
Net income%
Million yen%%

Ordinary income
Million yen

12,173

6.5

2,144

(2.3)

1,981

(4.0)

1,190

(6.4)

11,433

8.4

2,195

11.7

2,063

13.3

1,271

18.9

%

Six months ended June 20, 2014 : 1,308 million yen [(26.7)%]

Six months ended June 20, 2013: 1,784 million yen [62.3%]

Net income per share
Diluted net income per share
Yen
Yen
Six months ended
June 20, 2014
Six month ended
June 20, 2013

72.68

-

76.89

-

(Note) The Company conducted a 1.2 for 1 stock split of its common stock effective December 21, 2013. Consequently, the net income per share calculated andretrospectively adjusted assuming that the stock split was conducted at the beginning of the previous consolidated fiscal year is presented.
(2) Consolidated financial position
Total assets
As ofJune 20, 2014
As ofDecember 20, 2013
(Reference)
EquityNet assets

Equity ratio

Million yen

Million yen%

27,22622,96384.3

26,321

22,14984.1

As of June 20, 2014: 22,963 million yen

As of December 20, 2013: 22,149 million yen

2. Payment of dividends
Annual dividend
End of 1st quarter End of 2nd quarter End of 3rd quarter End of fiscal year
Yen

Yen
33.00

Yen

Year ended
December 20,
2013
Year ending
34.00
December 20,
2014
Year ending
December 20,
2014 (forecast)(Note) Changes to latest dividends forecast: None

Total

-

Yen
35.00

Yen
68.00

-

34.00

68.00

3. Consolidated operating forecasts for the fiscal year ending December 20, 2014 (December 21, 2013 - December 20, 2014)(Percentages show year-on-year changes)
Net sales
Million yen
Year ending December 20, 2014

25,200(Note) Changes to latest performance forecasts: None

Operating income
Ordinary income% Million yen% Million yen
5.8

4,500

4.6

4,215

Net income% Million yen
3.8

2,600

%

Net income per share
Yen

3.3

158.74

*Notes(1) Significant changes in subsidiaries during the period(changes in specified subsidiaries accompanied by changes in the scope of consolidation) : None
New: 0 companies (Company name: )Exclude: 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: None3) 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 stock)2) Number of treasury stock at the end of the period
3) Average number of shares during the period(cumulative)

Six months ended
June 20, 2014
Six months ended
June 20, 2014
Six months ended
June 20, 2014

16,558,617 shares
183,938 shares
16,375,467 sharesYear ended
December 20, 2013
Year ended
December 20, 2013
Six months ended
June 20, 2013

16,558,617 shares
179,953 shares
16,535,858 shares(Note) The Company conducted a 1.2 for 1 stock split of its common stock effective December 21, 2013. Consequently, the number of shares issued at
the end of the period, the number of treasury stock at the end of the period, and the average number of shares during the period calculated andretrospectively adjusted assuming that the stock split was conducted at the beginning of the previous consolidated fiscal year are presented.
*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.

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014

Contents of supplementary materials
1. Qualitative information on consolidated results for the current period .............................................................................................. 2(1)

Qualitative information on consolidated operating results ............................................................................................................. 2(2)

Qualitative information on consolidated financial position............................................................................................................ 3(3)

Qualitative information on consolidated operating forecasts ......................................................................................................... 3

2. Summary information (Notes) ........................................................................................................................................................... 4(1)

Significant changes in subsidiaries during the period .................................................................................................................... 4(2) Application of accounting methods specific to the preparation of quarterly consolidated financial statements ............................. 4(3)

Changes in the accounting policies, changes in accounting estimates and retrospective restatements........................................... 4

3. Quarterly Consolidated Financial Statements ..................................................................................................................................... 5(1)

Quarterly Consolidated Balance Sheets ......................................................................................................................................... 5(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income ................................... 7(3)

Quarterly Consolidated Statements of Cash Flows ........................................................................................................................ 9(4)

Notes regarding going concern assumptions ................................................................................................................................ 10(5)

Segment information .................................................................................................................................................................... 10(6)

Notes in case of any significant changes in shareholders’ equity ................................................................................................. 10-1-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014

1. Qualitative information on consolidated results for the current period(1) Qualitative information on consolidated operating results
During the six month period ended June 20, 2014, our nation’s economy was on a moderate recovery trend, as corporate earnings
improved and personal consumption picked up, as a result of the foreign exchange rate stabilizing at a weakening yen.
Nevertheless, uncertainty over the future continued to prevail due to increasing concerns about the decelerating economies of theemerging nations, in addition to the backlash from the last-minute demand preceding the consumption tax hike in April in Japan.
In the beauty industry, the future remains unpredictable with some experiencing a slowdown in customer traffic following theincrease in consumption tax.
Under such circumstances, the Milbon Group, fully aware of the importance of enhancing “intangible value” that centers on
communication to answer to the values of mature women, has been promoting initiatives intended for salons under the slogan of“Supporting the nurture of salon professionals with human appeal who will take the stage and live up to intrinsic, absolute value.”
Consolidated net sales during the six month period ended June 20, 2014 increased to 12,173 million yen (up 6.5% year-on-year).
This was primarily due to the extremely strong sales of Aujua Aging Care series Immurise line, which was launched in February,and leave-in treatment Deesse’s Elujuda Emulsion, which was launched in June, in the hair-care product category. Favorable
sales growth of the overseas subsidiaries thanks to the proactive educational activities conducted in the salons and change indistributor strategy was another factor for the increase.
Operating income was to 2,144 million yen (down 2.3% year-on-year); ordinary income was 1,981 million yen (down 4.0% yearon-year); and net income was 1,190 million yen (down 6.4% year-on-year). This is primarily due to the temporary increase in
selling, general and administrative expenses during the six month period ended June 20, 2014 attributable to the incurrence ofvarious costs relating to the extension work of the Central Research Institute and the renewal of sales promotion tools, which had
been in the plans since the beginning of the fiscal year.

Breakdown of net sales by product category is shown below:[Breakdown of consolidated net sales by product category]
Product category(Unit: million yen)Six months ended
June 20, 2013
AmountRatio (%)

Six months ended
June 20, 2014
AmountRatio (%)

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

Hair care products

5,906

51.6

6,865

56.4

958

16.2

Hair coloring products

4,593

40.2

4,397

36.1

(196)

(4.3)

Permanent wave products

822

7.2

797

6.6

(24)

(2.9)

Others

111

1.0

113

0.9

1

1.6

Total

11,433100.0

12,173

100.0

739

6.5

[Breakdown of net sales into domestic and overseas sales](Unit: Million yen)Six months ended
June 20, 2013
AmountRatio (%)

Six months ended
June 20, 2014
AmountRatio (%)

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

Domestic sales

10,632

93.0

10,959

90.0

326

3.1

Overseas sales

800

7.0

1,213

10.0

412

51.5

11,433100.0

12,173

100.0

739

6.5

Total

-2-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014(2)

Qualitative information on consolidated financial position

1) Assets, liabilities and net assets
Total assets at the end of the six month period ended June 20, 2014 increased by 905 million yen compared to the end of theprevious consolidated fiscal year to 27,226 million yen.
Current assets increased by 649 million yen compared to the end of the previous consolidated fiscal year to 13,587 million yen.
This was due mainly to the increase in notes and accounts receivable-trade and in merchandise and finished goods by 427 million
yen and 616 million yen, respectively; as well as the decrease in cash and deposits by 646 million yen.
Noncurrent assets increased by 255 million yen compared to the end of the previous consolidated fiscal year to 13,639 million
yen. This was due primarily to the increase by 645 million yen attributable to capital expenditure including the extension of theCentral Research Institute and a decrease by 477 million yen attributable to the posting of depreciation and amortization.
Current liabilities increased by 131 million yen compared to the end of the previous consolidated fiscal year to 4,101 million yen.
This was due mainly to the increase in accounts payable-trade by 314 million yen; in addition to the decrease in income taxes
payable by 148 million yen.
There were no material changes in noncurrent liabilities from the end of the previous consolidated fiscal year.
Net assets increased by 814 million yen compared to the end of the previous consolidated fiscal year to 22,963 million yen. Thiswas due mainly to the 712 million yen increase in retained earnings.
As a result, equity ratio changed from the 84.1% at the end of the previous consolidated fiscal year to 84.3%. Net assets per sharebased on total outstanding shares as of the end of the current consolidated fiscal year increased from 1,352.34 yen per share at
the end of the previous consolidated fiscal year to 1,402.40 yen per share.
2) Cash flows
Cash and cash equivalents (hereinafter “net cash”) at the end of the six month period ended June 20, 2014 decreased by 647
million yen compared to the end of the previous consolidated fiscal year to 5,962 million yen, as a result of using the net cash
provided by operating activities for the payment of income taxes and the payment of dividends.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to 694 million yen. This was mainly the result of posting 1,963 million yen
in income before taxes and minority interests, depreciation and amortization of 479 million yen, the 424 million yen increase innotes and accounts receivable-trade, the 755 million yen increase in inventories and 925 million yen in income taxes paid.
(Cash flows from investing activities)
Net cash used in investing activities amounted to 878 million yen. This was mainly due to the purchase of property, plant andequipment of 791 million yen and the purchase of intangible assets of 86 million yen.
(Cash flows from financing activities)
Net cash used in financing activities amounted to 493 million yen. This was mainly due to the cash dividends paid to shareholdersof 477 million yen.

(3)

Qualitative information on consolidated operating forecasts
In terms of the full-year forecast there are no changes to the previous consolidated performance forecasts, which were announced
on January 22, 2014.

-3-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20142.

Summary information (Notes)(1)

Significant changes in subsidiaries during the period
None

(2)

Application of accounting methods specific to the preparation of quarterly consolidated financial statements
None

(3)

Changes in the accounting policies, changes in accounting estimates and retrospective restatements
None

-4-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 20143.

Quarterly Consolidated Financial Statements(1)

Quarterly Consolidated Balance Sheets(Thousand yen)Previous Consolidated Fiscal Year Current Consolidated Second Quarter(As of December 20, 2013)(As of June 20, 2014)

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
Noncurrent 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
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-other
Income taxes payable
Provision for sales returns
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Provision for retirement benefits
Other
Total noncurrent liabilities
Total liabilities-5-

6,845,649
3,110,419
1,987,133
21,957
607,585
420,934(55,548)
12,938,131

6,198,782
3,538,045
2,603,931
31,103754,827
521,896(61,248)
13,587,338

3,655,029
902,286
4,867,542
835,253
155,945
10,416,058
481,762

4,326,676
1,052,492
4,869,544
57,478297,904
10,604,096
468,109

1,767,519
767,402(49,141)
2,485,780
13,383,601
26,321,732

1,857,292
759,171(49,141)
2,567,321
13,639,527
27,226,866

501,379
1,914,806
945,236
26,59083,995
498,640
3,970,648

815,919
1,875,015
796,328
25,061
83,274
506,055
4,101,655

55,564
146,076
201,641
4,172,289

16,498144,862
161,361
4,263,017

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014
(Thousand yen)Previous Consolidated Fiscal
Year(As of December 20, 2013)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets-6-

Current Consolidated Second Quarter(As of June 20, 2014)

2,000,000
199,183
20,069,024(516,646)
21,751,561

2,000,000
199,461
20,781,411(532,958)
22,447,913

277,439
120,442
397,881
22,149,443
26,321,732

335,342
180,592
515,935
22,963,849
27,226,866

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014

(2)

Quarterly Consolidated Statements of Earnings and Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Earnings
Quarterly Consolidated Six Months Ended June 20, 2013 and 2014

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Foreign 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 noncurrent assets
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Net income-7-

Six Months Ended
June 20, 2013
(December 21, 2012 June 20, 2013)
11,433,847
3,617,568
7,816,279
5,620,491
2,195,787(Thousand yen)
Six Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)
12,173,175
3,736,266
8,436,908
6,292,582
2,144,326

5,811
5,480
16,067
26,884
6,604
60,846

6,717
6,591
22,918
7,646
43,874

193,078
56
193,134
2,063,499

195,440
11,311
126
206,877
1,981,322

-

811
811

1,247
1,247
2,062,252
847,165
ሺ56,406)
790,758
1,271,494
1,271,494

18,92818,928
1,963,205
775,526
ሺ2,417)773,108
1,190,097
1,190,097

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014

Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Six Months Ended June 20, 2013 and 2014

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests-8-

Six Months Ended
June 20, 2013
(December 21, 2012 June 20, 2013)
1,271,494(Thousand yen)
Six Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)
1,190,097

249,698
263,399
513,097
1,784,592

57,90360,149118,053
1,308,150

1,784,592-

1,308,150-

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014(3)

Quarterly Consolidated Statements of Cash FlowsSix Months Ended
June 20, 2013
(December 21, 2012 June 20, 2013)

Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for retirement benefits
Decrease (increase) in prepaid pension costs
Interest and dividends income
Foreign exchange losses (gains)
Loss (gain) on sales of noncurrent assets
Loss on retirement of noncurrent 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 dividends income received
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) 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
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
Net cash provided by (used in) financing activities
Net decrease (increase) in treasury stock
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-9-(Thousand yen)
Six Months Ended
June 20, 2014
(December 21, 2013 June 20, 2014)

2,062,252
425,4443,627
5,973
12,2642,974
ሺ11,291)
ሺ5,347)
1,247(153,736)
ሺ232,144)
69,322
236,352
2,416,938
9,182
ሺ627,202)
1,798,918

1,963,205
479,762
5,395(1,069)(1,528)(39,719)(26,414)(13,308)
1,929
(811)
18,928(424,446)(755,727)
303,486
99,001
1,608,683
11,510ሺ925,722)
694,470

ሺ787,731)
1,259
ሺ82,769)
ሺ2,240)10,064
ሺ3,587)
197,558
ሺ12,223)
3,334
ሺ790)
ሺ3,166)
ሺ680,290)

ሺ791,251)
1,047(86,988)(2,930)9,476(7,080)
4,653
(924)
3,352
ሺ7,469)(878,113)

ሺ1,836)
ሺ467,916)
ሺ469,752)
84,139733,015
5,633,298
6,366,313(16,033)(477,374)(493,408)
29,211(647,839)
6,610,371
5,962,531

Milbon Co., Ltd. (4919) Consolidated Financial Results for the Six Months Ended June 20, 2014

(4)

Notes regarding going concern assumption
None

(5)

Segment information
The Company omits information on business segments, as it is engaged in the production and distribution of hair-care
products and related merchandise, all of which are deemed to belong to a single business segment.

(6)

Notes in case of any significant changes in shareholders’ equity
None- 10 -