Milbon Co., Ltd.
FY2017 Financial Results
Presentation Materials

February 14, 2018
Copyright © 2018 Milbon. All rights reserved.

Table of Contents
P4

Consolidated Operating Results

P5

Consolidated Sales by Product Category

P11

Consolidated Statement of Earnings

P12

Consolidated Sales by Product Category, etc.

P13

Consolidated Trends in Capital Expenditures and R&D Expenses

P14

Trends in Market Related Data, Trends in FPs

P15

Outlook of Milbon GroupP16

Outlook of Overseas Subsidiaries

P19

2015-2019 Medium-Term Management Plan & Progress

P23

Initiatives for FY2018 (59th term)

Copyright © 2018 Milbon. All rights reserved.

1

Fiscal Year 2017 (58th term)
Operating Results

Masahiro Murai, Managing Director

Copyright © 2018 Milbon. All rights reserved.

2

Due to the change in the accounting period, the fiscal year underreview is the 12 months plus 11 days from December 21, 2016 to
December 31, 2017. For the consolidated accounting, financial resultsfor overseas consolidated subsidiaries are their respective individual
results for the 15-month period from October 1, 2016 to December 31,
2017. For that reason, the financial results values used for comparisonin these materials have been calculated based on the 12 months prior tothe change in the accounting period.
Notation in thesematerials

Respective periods

FY2017 (12 months)

December 21 to December 20 of the following year October 1 to September 30 of the following(12 months)
year (12 months)

FY2017 (Irregularaccounting period)

December 21 to December 31 of the following year October 1 to December 31 of the following(12 months plus 11 days)
year (15 months)

Copyright © 2018 Milbon. All rights reserved.

Periods for subsidiaries3Consolidated Operating Results

Net sales and profit both grew steadily(Unit: million yen)

FY2016FY2017(12 months)*

Increase/
Decrease

Increase/
FY2017(Irregular
Decrease ratio
accounting
period)(%)

Net sales

29,13431,7082,574

8.8

33,456Gross profit

20,10021,661

1,560

7.8

22,797

SG&A expenses

14,986

16,3471,360

9.1

17,452

Operating income

5,113

5,313

199

3.9

5,345

Ordinary income

4,733

4,980

247

5.2

4,997

Profit attributable toowners of parent

3,069

3,785

715

23.3

3,817

* Values are adjusted for 12 months. (see page 3)
Copyright © 2018 Milbon. All rights reserved.

4

Consolidated Sales by Product Category [Hair Care Product]
Premium brands grew steadily(Unit: million yen)

FY2016FY2017(12 months)*

17,711

Increase/
Decrease

18,688976

Increase/
Decrease ratio
(%)

5.5

FY2017(Irregular accounting
period)19,511• In premium brands, the Aujua upgrade carried out in November received even higher ratings than
expected. Steady progress of “milbon” in salons, including overseas, contributed to good results.
• Professional brands struggled somewhat due to difficulty in keeping them compartmentalized frompremium brands. Sales strategies will need to be restructured in future.

* Values are adjusted for 12 months. (see page 3)
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5

AujuaProduct replacement progressed faster than expected due to upgrade
Number of Aujua salons
FY2016 year-end

Upgrade launched November 2017
Increase/
Decrease ratio(%)

FY2017 year-end

2,779 salons

3,166 salons

13.9

Sales

(Unit: million yen)

FY2016FY2017(12 months)*

5,043

Brand concept
A hair care brand that nurtures thebeauty of Japanese women’s hair,born from the climate, culture andhair characteristics of Japan

What is Aujua?
Hair care that supports beauty,
now and into the future, byaddressing each individual’s hairand skin concerns and choosing
the most appropriate item for that
time.
This is Aujua.

5,339

Increase/
Decreaseratio (%)

FY2017(Irregularaccounting period)

5.9

5,539

Product range
A wide-ranging line-upthat suits the hair textureof individual customers
・ 4 series

Trends in sales & number of salons(Million yen)

(Number of salons)

7,000

4,000

6,000

3,500

5,000

3,000
2,500

4,000

2,000
3,000

Aging care series
Hair care series
Scalp care series
Climatic care series

1,500

2,000

1,000

1,000

500

0

0

・13 lines ・94 items
販売高
Sales

* Values are adjusted for 12 months. (see page 3)
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6

取引件数
Number of salons

A Premium Brand, “milbon”
Overseas rollout also progressed steadily
Brand concept
A system hair care brand that cultivates the “unique beauty” ofeach individual, with 360°shiny hair

What is “milbon”?
We conducted an in-depth analysis of the inner structure of
the hair of women from 20 countries around the world, using
our proprietary CT scanning technology, and discovered SSVs
(Sticked-Shaped Voids). SSVs are hollow, tubular gaps thatform in damaged hair. Accordingly, we developed a hair careline containing ingredients capable of repairing such hollowed
out hair and increasing the density within each strand of hair.
“milbon” is a system hair care product for developing shiny,
beautiful hair from the core.

Number of salons
As of December 31, 2017・・・・・・3,966 salons

Sales
FY2017・・・・・・・・・・・・・・・・・・・・1,764 million yen

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7

360° BEAUTIFUL HAIR
June 2016 Debut

Consolidated Sales by Product Category [Hair Coloring Product]
New products aimed at the young demographic were well received,
driving sales of hair color products

FY2017(12 months)*1

FY2016

9,892

Increase/Decrease

11,264

Increase/
Decrease ratio
(%)

1,372

13.9

(Unit: million yen)
FY2017(Irregular accounting
period)12,095• We introduced a new brand, “ORDEVE Addicthy,” to respond to the desires of women who want to continue to display freedom in their
hair color design. Sales significantly exceeded annual targets, thanks to a positive reception for its ability to easily express color by
eliminating red tones.

New Product
ORDEVE Addicthy
Erases red-tinged brown with high saturation blue. With clear and transparent
color expression, it lets customers freely realize individual hair color designs.
(Unit: million yen)

FY target

FY2017(12 months)*1, 2Achievements(%)

FY2017(Full-year
accounting period)

755

2,012

266.6%

2,070*1 Values are adjusted for 12 months. (see page 3)*2 Figures are on a non-consolidated basis.
Copyright © 2018 Milbon. All rights reserved.

8

Feb. 1 Debut

A Premium Organic Brand, Villa Lodola (1)Villa Lodola Color continues to be well-received and to drive brand sales

Number of Villa Lodola salons
FY2016 year-end

5,632 salons

Increase/
Decrease ratio(%)

FY2017 year-end

6,895 salons

Sales
FY2016795

22.4(Unit: million yen)

FY2017(12 months)*

Increase/
Decrease ratio(%)

FY2017(Irregular accounting
period)

21.5

998

966

(Number of salons)

1,400

12,000

1,200

10,0001,000

Brand concept

8,000

800

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

6,000
600

What is Villa Lodola?

4,000

400

Based on the concept of “Beauty, the Organic Way,” Villa Lodola is atrue organic brand that thoroughly cares about the naturalenvironment not only for the product itself but also in its container,
production phase and promotional tools. All of the products are
certified by ICEA, an Italian authority.
Villa Lodola supports organic choices, with hair care products
nurtured in the soil of Italy, bringing out true beauty.

2,000

200

0

0

販売高
Sales

* Values are adjusted for 12 months. (see page 3)
Copyright © 2018 Milbon. All rights reserved.

Trends in sales & number of salons(Million yen)9

Number of salons
取引件数

A Premium Organic Brand, Villa Lodola (2)Core Product
Villa Lodola ColorWith 92% natural ingredients, the product’s formulation utilizes the powerof plants. It brings comfort of an organic product across all aspects,
including during application, the finish and continued use.
(Unit: million yen)
FY2016518

FY2017(12 months)*1

Increase/
Decrease ratio
(%)

679

31.0

FY2017(Irregularaccounting period)

FY2015 Debut704*2 Previously, the rate of progress toward achieving FY targets was indicated, but from the third quarter of FY2017,
year-on-year comparisons are shown.

*1 Values are adjusted for 12 months. (see page 3)*2 Previously, the rate of progress toward achieving FY targets was indicated, but from the third quarter of FY2017, year-on-year comparisons are shown.
Copyright © 2018 Milbon. All rights reserved.

10

Consolidated Statement of Earnings(Unit: million yen)
FY2016FY2017(12 months)*

Increase/
Decrease

Increase/
Decrease ratio (%)

FY2017(Irregular accounting period)

Sales

29,13431,7082,574

8.8

33,456

Cost of
sales

9,034

10,047

1,013

11.2

10,659 *1

Gross profit

20,10021,661

1,560

7.8

22,797

SG&A
expenses

14,986

16,3471,360

9.1

17,452 *2

Operatingincome

5,113

5,313

199

3.9

5,345

Ordinary
income

4,733

4,980

247

5.2

4,997

Profit attributable toowners of parent

3,069

3,785

715

23.3

3,817 *3

<Major factors for the increase/decrease>*1 Cost of sales:• Increase in depreciation and amortization associated with start of operations at new Yumegaoka Plant• Increase in provision for bonuses (manufacturing and labor expenses) due to change in bonus assessment standards associatedwith the change in the accounting period*2 SG&A expenses:• Higher personnel expenses due to an increase in personnel and salary hikes• Increase in R&D expenses due to structural enhancements• Increase in provision for bonuses due to change in bonus assessment standards associated with the change in the accounting period*3 Profit attributable to owners of parent:• Extraordinary income recorded due to the sale of a portion of cross-held shares• Extraordinary loss recorded due to brand reorganization associated with upgrade of Aujua* Values are adjusted for 12 months. (see page 3)
Copyright © 2018 Milbon. All rights reserved.

11

Consolidated Sales by Product Category, etc.
(Unit: million yen)
FY2017(12 months)*

FY2016

Increase/
Decrease ratio (%)

Increase/
Decrease

FY2017(Irregular accounting
period)Hair care products

17,711

18,688976

5.5

19,511Hair coloring products

9,892

11,264

1,372

13.9

12,095

Permanent wave products

1,260

1,482

222

17.7

1,569

270

273

2

1.0

279

Others*Supplemental Info. – Return to shareholders(Unit: yen)

<Dividends>
FY2015FY2016FY2017

End of 2Q

35

38

40

End of FY

39

40

52

Total

74

78

92

* Values are adjusted for 12 months. (see page 3)
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12

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

Category
Capital expenditures

FY2013

FY2014FY2015FY2016FY2017

1,680

1,028

2,779

4,262

1,570

878

1,004

1,033

1,077

1,272

Amount

969

1,168

1,214

1,232

1,422

% to sales

4.1%

4.6%

4.4%

4.2%

4.3%

Depreciation andamortization
R&D exp.

FY2017 CAPEX Main Items• Development expenses for sales management software• Establishment of a new domestic base (Shizuoka Sales Office)• Interior, equipment, etc., due to relocation of domestic bases (Yokohama
sales Office)*Fukuoka Branch and Okayama Sales Office planned for FY2018

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13

Trends in Market Related Data, Trends in Fieldpersons (FPs)
Market trends (Japan)
2012

2013

2014

2015

2016

Number of salons(salons)

231,134

234,089

237,525

240,299

243,360―

Number of hair
dressers (people)

479,509487,636496,697504,698509,279―

37,02336,734

Number of beauty
customers(thousand people)

39,076

38,46837,84737,395

2017

Remarks(As of Aug. 1)

Ministry of Health, Labour and Welfare, Report on Public
Health Administration and Services
Number of beauty salon facilities / number of employees(year-end)
Statistics Bureau, Ministry of Internal Affairs andCommunications:
Population statistics as of October 1st of each year
Population statistics for females aged 15 to 64

Fieldpersons trends (by country) (Number of FPs / As of the beginning of the fiscal year (December 21))
2013

2014

2015

2016

2017 *1

JAPAN
Milbon Co., Ltd.

210

216

237

249

258

104

104

100

102

105

USA
MILBON USA, INC.

12

12

12

9

12

36

40

53

63

48

CHINA
Milbon Trading(Shanghai) Co., Ltd

16

17

18

18

19

17

25

36

40

50

KOREA
Milbon Korea Co., Ltd.

17

17

19

20

23

41

64

75

80

84

THAILAND
Milbon (Thailand) Co.,
Ltd

3

6

6

6

9

6

8

15

14

13

7

12

16

19

24

63

46

42

47

38

Others *2

Upper column: Number of FPs (persons)Lower column: Sales per FP (million yen)
13 FPs in training as of the end of FY2017
31 FPs expected to join in April 2018
(The above 44 FPs are not included in the left chart.)*1 Values are adjusted for 12 months. (see page 3)*2 Taiwan, Hong Kong, Vietnam, Malaysia, Turkey, Indonesia, the Philippines, Singapore, Germany and others
Copyright © 2018 Milbon. All rights reserved.

14

Outlook of Milbon Group
East Asia region continues to drive growth
Sales (million yen)

FY2017(12 months)*1

FY2016

Japan
Milbon Co., Ltd

Forex rates
Increase/
Decrease ratio
(%)

Start
operations

25,287

27,173

7.5

1960

USA
MILBON USA, INC

571

579

1.5

2004

CHINA
Milbon Trading(Shanghai) Co., Ltd.

737

959

30.0

2009

KOREA
Milbon Korea Co., Ltd.

1,603

1,941

21.1

2009

THAILAND
Milbon (Thailand) Co.,
Ltd.

86

119

37.1

2013

847

935

10.4

-

Others *2

FY2016-

Sales (million yen)Forex rates

FY2017(12 months)*1

FY2017(Irregular accounting
period)FY2017(Irregularaccounting
period)-27,974

1 dollar =111.81

1 dollar =111.31735

1 yuan =

16.97

16.37

0.0972

1 baht =

3.18

3.21

-

-

*1 Values are adjusted for 12 months. (see page 3)*2 Taiwan, Hong Kong, Vietnam, Malaysia, Turkey, Indonesia, the Philippines, Singapore, Germany and others
Copyright © 2018 Milbon. All rights reserved.

15

111.64
1 yuan =1 won =

0.0969

-

1,208

2,440

154

943

16.51
1 won =

0.0980
1 baht =3.25-

Outlook of Overseas Subsidiaries (1)USA (MILBON USA, Inc.)
Sales did not grow as expected owing to a series of closures and consolidations of major salons due to soaring rents in
Manhattan and other factors, and a hike in the distributor margin in the distributor category offsetting steady growth inoutside sales.
By product, “milbon” grew significantly as a result of activities focused on hair care, styling and scalp care, but was notable to cover a decrease in sales in other categories.
With a view to the next fiscal year and beyond, we started considering distributors in Georgia, Texas and other areas
and began preparing the sales and training system for hair colors scheduled for launch in 2019.

CHINA (Milbon Trading (Shanghai) Co., Ltd.)In the market environment, high unit-price trendy salons that offer personalized service are increasingly successful inattracting customers. Also, customer preferences are shifting toward services such as hair color design and salon
treatment. Amid this trend, ORDEVE’s high-quality training activities and introduction of trendy colors have been wellreceived for allowing personalized service, and hair color products have grown significantly.
In hair care products, the first “milbon” launch was focused on 40 influential salons. Customer satisfaction has been
extremely high, and we anticipate strong performance from future rollouts.
In addition, regular implementation of OJT has significantly raised awareness among locally hired manager-level
employees. This in turn improved the quality of activities for distributors and salons, in a positive cycle that leads to results.

*Figures in the text on pages 16 and 17 are based on local currencies.
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16

Outlook of Overseas Subsidiaries (2)KOREA (Milbon Korea Co., Ltd.)Regionally based market activities were further strengthened through the opening of the Daejeon Branch, following thebranches in Seoul and Pusan. These moves are producing results.
In hair color products, ORDEVE has grown considerably due to the continuing favorable reception for training on trends
in connection with the launch of seasonal trend colors that cannot be imitated by other companies. In hair care products,
Aujua has been growing steadily in its introduced salons.

THAILAND (Milbon (Thailand) Co., Ltd.)[Sales division]
We are starting to see positive effects as a result of concentrating our market activities by focusing on a single
distributor, which has also allowed us to share market information.
In hair color products, sales have grown steadily, partly due to the synergy effects of activities to introduce new color
trends from ORDEVE and a launch focused on cold shades from Addicthy. The “milbon” products launched in the period
under review have been highly rated for their finish texture and feel. We focused on target salons, and the need for two
training sessions has been accepted, so performance looks promising going forward.

[Production division]
Production has expanded far more than planned, reflecting a steady growth in production of hair color products, thestart of production for “milbon” for commercial use, and the start of shipments to China. The local procurement rate is also
rising steadily. As a result, the manufacturing cost ratio has improved substantially.
With regard to the quality-control system, errors and inconsistencies are rare, managers and frontline personnel areboth developing, and the employee turnover rate is less than 1%.

Copyright © 2018 Milbon. All rights reserved.

17

Milbon Group
2015-2019 Medium-Term Management Plan & Progress
Initiatives for FY2018 (59th term)

Ryuji Sato, President & CEO

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18

2015-2019 Medium-Term Management Plan
~Progress at the end of FY2017~* With regard to the progress of the Medium-Term Management Plan, in order tocompare the values for the final year FY2019 with those for a similar 12-month period,
we used the values for the 12 months prior to the change in the accounting period as
the “FY2017 results (12 months).” (For details, please see page 3.) For the same
reason, we used the target figures of the 12-month operating forecast prior to therevisions associated with the change in the accounting period.

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19

2015-2019 Medium-Term Management Plan
~Progress at the end of FY2017~
The net sales targets of the Medium-Term Management Plan are within reach, eventhough SG&A expenses piled up due to forward investment(Unit: million yen)
FY2017 target(12 months)*1

Amount

FY2017 results(12 months)*2% to sales

AmountAchievements(%)% to sales

Growthrate frompreviousyear(%)

FY2019 target(medium-term end)
Amount% to sales

31,000100.0

31,708

100.0

2.3

8.8

35,000100.0

Domestic

26,56085.7

27,173

85.7

2.3

7.5

28,50081.4

Overseas

4,440

14.3

4,535

14.3

2.2

17.9

6,500

18.6

67.9

3.0

7.8

51.6

3.9

9.1

16.8

0.3

3.9

15.7

1.9

5.2

24,50018,500
6,000
5,600

70.0

15.8

21,661
16,347
5,313
4,980

68.3

Ordinary income

21,04015,740
5,300
4,890

16.0

Profit attributable toowners of parent

3,450

11.1

3,785

11.9

9.7

23.3

3,850

11.0

Net sales

Gross profit
SG&A
Operating income

50.8
17.1

*1 Values are for the 12 months prior to revision of the operating forecast.
*2 Values are adjusted for 12 months. (see page 3)
Copyright © 2018 Milbon. All rights reserved.
20

52.9
17.1

2015-2019 Medium-Term Management Plan
~Progress in net sales by country~

Extremely favorable performance in Japan, China and Korea(Unit: million yen)
FY2017 target(12 months)*1

FY2017 results(12 months)*2

Achievements(%)

Growth rate
from
previousyear(%)

26,56027,173

2.3

7.5

28,500--USA
MILBON USA, INC.

590

579

(1.9)

1.5

840

111.31105.00

CHINA
Milbon Trading(Shanghai) Co., Ltd.

881

959

8.9

30.0

1,350

16.37

17.00

KOREA
Milbon Korea Co., Ltd.

1,811

1,941

7.2

21.1

2,500

0.09720.1000THAILAND
Milbon (Thailand) Co.,
Ltd.

105

119

13.4

37.1

250

3.21

3.20

1,052

935

(11.1)

10.4

1,560

-

-

3,314
478

3,473
471

4.8
(1.4)

20.3
22.7

4,490
1,020

-

-

JAPAN
Milbon Co., Ltd.

Other areas*3

Exchange rate
FY2019 target(medium-term
end)

FY2017
actual

FY2019estimate<Reference>
East Asia*4 total
South-east Asia*5 total*1 Values are for the 12 months prior to revision of the operating forecast.
*2 Values are adjusted for 12 months. (see page 3)*3 Taiwan, Hong Kong, Vietnam, Malaysia, Turkey, Indonesia, the Philippines, Singapore,
Germany and others

Copyright © 2018 Milbon. All rights reserved.

21*4 China, Korea, Taiwan and Hong Kong
*5 Thailand, Vietnam, Malaysia, Indonesia, the Philippines, Singapore andothers2015-2019 Medium-Term Management Plan~CAPEX FY2017~

Aggressive investment in cosmetic products business and overseas business
Use

FY2015-FY2017

Investment in future
growthMain items

FY20198,610 million yen• Construction of new Yumegaoka Plant• Establishment and expansion of new domestic
branches(Ginza, Sapporo, Kumamoto, Okayama, thePhilippines, Yokohama, Shizuoka, Chengdu(China), Germany, Singapore and Daejeon(Korea))• Expansion of Thai warehouse• Relocation of head office to Tokyo• New sales management software• Cosmetic products business

3,990 million yen
Return toshareholders• Dividend payout ratio
FY2015 41.1%
FY2016 41.6%
FY2017 39.5%

Capital efficiency

ROE 13.0% *FY2017

Copyright © 2018 Milbon. All rights reserved.

• Construction of new Yumegaoka Plant• Expansion of Thailand Plant• Establishment and expansion of new domestic
branches(8 domestic locations including Ginza andYokohama and several foreign locations
including the Philippines)• M&A investment in the US and Europe• Cosmetic products business

7,000 million yen• Stable return to shareholders targeting adividend payout ratio of 40%- 1,210 million yen

Increase in R/E

10,000 million yen

3,000 million yen
ROE 12% or over *FY2019 target

22

Initiatives for FY2018 (59th term)* In order to compare FY2018 targets with a similar period, we used the “FY2017
results (12 months)” values before the change in the accounting period forcomparison. (For details, please see page 3.)

Copyright © 2018 Milbon. All rights reserved.

23

Domestic Market Environment

 Background Demographic trends, declining birthrate
and aging population
 Difficulties in attracting customers andrecruitment
 Wave of labor and workstyle reforms

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24

Domestic Market Environment

 Changes in salon environment
Polarization of average customer spend
Average customer spend at regular salons nationwide*

High-end salons (¥8,000 and above) Low-end salons (under ¥4,000)
(%)

(%)

18.6

20

19.3

20

15.5
15

15

10.2
10

10

5

5

0

0

2000

2010

2000

(Year)* “Fact-finding Survey on Economic Conditions in the Beauty Industry,” Ministry of Health, Labour and Welfare
Copyright © 2018 Milbon. All rights reserved.

25

2010

(Year)Domestic Market Environment

 Breakdown of average customer spend
Average customer spend at Milbon introduced salons

+50%

+6%
(yen)

Average spend on techniques

(yen)

8,000
700

7,000

600

6,000

500

5,000

400

4,000
3,000

Average spend on take-homeproducts

6,719

7,181

2,000

200

1,000

100

0

0
2007

2017

383
2007

(Year)

Increase in both average spend on techniques andaverage spend on take-home products

Copyright © 2018 Milbon. All rights reserved.

573

300

26

2017

(Year)*Milbon management index survey

Market Strategy

 “Lifetime customers” are created by “Lifetime hair designers”
Lifetime relationshipof trust
Lifetime customers

Lifetimehair designers

Lifetime beauty salon
 Supporting the creation of lifetime beauty salons that nurture
lifetime hair designers(Creating an organization built around people and education)
 Shifting salon take-home product business into full gear

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27

Market Strategy

 Changing times

Up to the 1980s

The era of selling techniques

1990s

The era of selling hairstyles

Now

The era of selling beauty

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28

Market Strategy

 Capturing lifetime customers
From anti-aging

To aging beauty
From aging beauty

To lifetime beauty
What is lifetime beauty?

Allowing a woman’s beauty to continue shining
throughout her life, with the help of a hair designer who
looks at the customer’s entire lifetime.
Copyright © 2018 Milbon. All rights reserved.

29

Initiatives for FY2018 (1)Relocating and expanding studio sites
With a 16-site system in Japan● Existing sites (14 locations)● Relocation and expansion (2 locations)

SapporoKanazawa
Okayama
Hiroshima

Sendai

Kyoto
SaitamaGinza, Tokyo

Fukuoka
Shizuoka
Kobe
Kumamoto

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Osaka

Nagoya30

Aoyama, Tokyo

Yokohama

Initiatives for FY2018 (1) Overseas markets
 Initiatives in countries overseas where
results are emerging(1) Thoroughly implementing the MILBON WAY(study groups including distributors as well as
employees)(2) Creating contact points for hair color products

Strengthen in all areas overseas

Copyright © 2018 Milbon. All rights reserved.

31

Initiatives for FY2018 (1) Overseas bases in 17 locations in 13 countries● FY2017 establishment (3 location)
Korea(Daejeon Branch)

Germany

USA

TurkeyChina
Japan
TaiwanHong Kong
Vietnam
The Philippines
Thailand
Malaysia
Singapore

Indonesia

Copyright © 2017 Milbon. All rights reserved.

Copyright © 2018 Milbon. All rights reserved.

32

Initiatives for FY2018 (2) Enhancing support for designer education• DA (Designer’s Ability)
Held in eight blocks in Japanand four countries overseas• Photo Revolution Grand Prix

Copyright © 2018 Milbon. All rights reserved.

33

Initiatives for FY2018 (3) Find Your Beauty Project…Supporting salons’ customer attraction and recruitment⇦ “Watashi Hiraku” (“Finding myself”),
a special movie
One woman’s story of encountering her new self
at a beauty salon
https://www.youtube.com/watch?v=HKrDtCCJmaU

Find Your Beauty Magazine ⇨Online magazine offering beauty-related content
http://www.milbon.co.jp/fyb-magazine/report/article-31/

Copyright © 2018 Milbon. All rights reserved.

34

Initiatives for FY2018 (4) Corporate &Product Branding

Copyright © 2018 Milbon. All rights reserved.

35

Initiatives for FY2018 (4) Corporate & Product Branding Transit advertisingTokyo: Yaesu area in Tokyo Station Feb. 12 – Feb. 18
Osaka: Hankyu Umeda Station
Feb. 19 – Feb. 25▼ Tokyo Station, near Yaesu Central Gate
▲ Tokyo Station,near Yaesu North Gate

Copyright © 2018 Milbon. All rights reserved.

36

Initiatives for FY2018 (5) Taking on the challenge of the cosmetic products business

Progress to date
 January 2017 Announced capital and business alliance July 2017
Established KOSÉ Milbon Cosmetics Co., Ltd.
 Currently examining product planning, research and development,
sales strategy, and training structure

Copyright © 2018 Milbon. All rights reserved.

37

Initiatives for FY2018 (5) Organization structure

FCE

FS

(Field Cosmetics Educator)
Autumn 2018

FP
FE

Newly established

Training scheduled to start

FCE

Contributing to a new earnings structure for salons

Copyright © 2018 Milbon. All rights reserved.

38

Initiatives for FY2018

 Relocation of head office to Tokyo
(1)
(2)
(3)

Expanding research and development
Strengthening recruitment
Cosmetic products business + overseas
expansion

Copyright © 2018 Milbon. All rights reserved.

39

Initiatives for FY2018

 Workstyle reform Frontline initiatives
For FPs, for example

Nighttime seminars
at salons

In the past…
Daytime salon visitsNighttime seminars
at salons

Use of studios
Online video training

Copyright © 2018 Milbon. All rights reserved.

40

Initiatives for FY2018

Satisfied customers and salons are what give value toour existence
Every employee thinks and acts

The MILBON WAY:
Creating a “company that will not fail”<Reforming awareness toward workstyles>

Copyright © 2018 Milbon. All rights reserved.

41

Consolidated targets for FY2018
 Consolidated Sales
by Product Category(Unit: million yen)
Increase/
Decrease ratio(%)

FY2017 results(12 months)*1

FY2018 target

Hair care products

18,68820,281

1,592

8.5

Hair coloring products

11,264

11,994729

6.5

Permanent wave products

1,482

1,512

29

2.0

273

213

(60)

(22.0)

OthersIncrease/
Decrease Sales of technical brands *2(Unit: million yen)
Increase/
Decrease ratio(%)

FY2017 results(12 months)*1

FY2018 target

ORDEVE

3,191

3,270

78

2.5

ORDEVE Addicthy

2,012

2,720

707

35.1

-

500

500

-

570

680

109

19.1

<Hair coloring products>

New gray-hair coloring products

Increase/
Decrease<Permanent wave products>
Neo Liscio*1 Values are adjusted for 12 months. (see page 3)*2 Figures are on a non-consolidated basis.
Copyright © 2018 Milbon. All rights reserved.

42

Consolidated targets for FY2018

 Sales and number of salons for premium brands(Unit: million yen)
FY2017 results(12 months)*

Aujua“milbon”

Villa Lodola

FY2018 target

Increase/
Decrease

Increase/
Decrease ratio
(%)

Sales

5,339

6,079

739

13.8

Number of salons(salons)

3,166

3,400

234

7.4

Sales

1,635

2,221

586

35.9

Number of salons
Domestic (salons)

2,738

3,300

562

20.5

Number of salonsOverseas (salons)

1,228

1,995

767

62.5

Sales

966

1,200

233

24.1

Number of salons(salons)

6,895

10,000

3,105

45.0

* Values are adjusted for 12 months. (see page 3)
Copyright © 2018 Milbon. All rights reserved.

43

Consolidated targets for FY2018
Full-fledged start of initiatives for cosmetic products business Statement of Earnings
Amount
FY2017(Irregularaccounting
period)(Unit: million yen)  Capital expenditures and others(Unit: million yen)Amount
FY2017
results(12 months)*1

FY2018targetIncrease/
Decrease*2

Increase/
Decreaseratio (%)
*2

Classification

1,570

1,668

Depreciation andamortization

1,272

1,376

Amount

1,422

1,448

% to sales

4.3%

4.3%

31,70834,0002,291

7.2

Domestic

27,974

27,17328,620

1,446

5.3

Overseas

5,481

4,535

5,380

844

18.6

Gross profit

22,797

21,661

23,580

1,918

8.9

SG&A

17,452

16,347

17,840

1,492

9.1

•

Operatingincome

5,345

5,313

5,740

426

8.0

•

Ordinary
income

4,997

4,980

5,270

289

5.8

Profit attributableto owners ofparent

3,817

3,785

3,990

204

5.4

R&D
expenses

FY2018 CAPEX Main Items••*1 Values are adjusted for 12 months. (see page 3)*2 Comparison with FY2017 results (12 months).
Copyright © 2018 Milbon. All rights reserved.

44

FY2018plan

Capital expenditures

33,456

Net sales

FY2017
results

Compounding equipment for plant(4-ton vacuum tank)
Relocation and expansion of
Fukuoka Branch
Relocation and expansion of
Okayama Sales Office
Renovation of Central ResearchInstitute

Consolidated targets for FY2018
 Return to shareholders<Dividend forecast>(Unit: yen)

FY2016FY2017FY2018
forecast*

End of 2Q

38

40

24

End of FY

40

52

24

Total

78

92

48

* Takes into consideration the impact of a stock split at a ratioof two for every one of the Company’s shares, conducted
on January 1, 2018.

Copyright © 2018 Milbon. All rights reserved.

45

Statements concerning the future such as the earnings forecasts given in thisdocument are based on information currently in the possession of the Company andon assumptions that the Company considers reasonable.