Milbon : Consolidated Financial Results for the Nine Months Ended September 30, 2021

Consolidated Financial Results for the Nine Months Ended September 30, 2021

[Japanese GAAP]

			November 12, 2021
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: [phone]

Scheduled filing date for quarterly report: November 12, 2021

Scheduled starting date of dividend payments: -

Preparation of supplementary materials on the quarterly results: Yes

Holding of an explanatory meeting on the quarterly results: Yes (Telephone briefing for institutional investors and analysts)

(Amounts of less than one million yen have been omitted.)

1. Consolidated financial results for the nine months ended September 30, 2021 (January 1, 2021 - September 30, 2021)

			(1) Consolidated operating results																			(Percentages show year-on-year changes.)
										Net sales					Operating income	Ordinary income			Profit attributable to owners
																		of parent
										Million yen	%			Million yen	%		Million yen			%		Million yen	%
			Nine months ended September 30, 2021	29,718		17.9			5,758	33.7		5,227			36.1		3,725		36.0
			Nine months ended September 30, 2020		25,214		(5.4)			4,307		(16.8)		3,842			(20.0)		2,740		(19.7)
(Note) Comprehensive income	Nine months ended September 30, 2021: 3,828 million yen [133.6%] Nine months ended September 30, 2020: 1,639 million yen [(50.4)%]
										Basic earnings per share	Diluted earnings per share
												Yen			Yen
		Nine months ended September 30, 2021				114.60				-
		Nine months ended September 30, 2020					84.21				-
(2) Consolidated financial position
										Total assets					Net assets	Equity ratio
											Million yen			Million yen					%
		As of September 30, 2021								44,770					38,273							85.5
		As of December 31, 2020								43,075					36,308							84.3
(Reference)	Equity	As of September 30, 2021: 38,273 million yen	As of December 31, 2020: 36,308 million yen
2. Payment of dividends
																		Annual dividends
										End of 1st quarter	End of 2nd quarter		End of 3rd quarter	End of fiscal year		Total
											Yen					Yen					Yen				Yen				Yen
	Year ended December 31, 2020				-						27.00	-						29.00				56.00
	Year ended December 31, 2021				-						30.00	-
	Year ended December 31, 2021																				33.00				63.00
	(forecast)
(Note) Changes to latest dividends forecast: None

3. Consolidated operating forecasts for the fiscal year ending December 31, 2021 (January 1, 2021 - December 31, 2021)

(Percentages show year-on-year changes.)

	Net sales		Operating income	Ordinary income	Profit attributable to	Basic earnings per share
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Year ending December 31, 2021	40,600		13.6	7,800	22.0	7,120	22.9	5,100	21.3	156.89
(Note) Changes to latest performance forecast: None

*Notes
(1) Significant changes in subsidiaries during the period
(changes in specified subsidiaries resulting in the change in the scope of consolidation)	: None
New: 0 companies (Company name: )	Exclude: 0 companies (Company name: )

1. Application of accounting methods specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates and retrospective restatements

1)	Changes in accounting policies due to amendment to the
	accounting standards, etc.	:	None
2)	Changes in accounting policies other than those in 1) above	:	None
3)	Changes in accounting estimates	:	None
4)	Retrospective restatements	:	None

(4) Number of shares issued (common stock)
1) Number of shares issued at the end of the period	As of	33,117,234 shares	As of	33,117,234 shares
(including treasury shares)	September 30, 2021	December 31, 2020
2) Number of treasury shares at the end of the period	As of	605,759 shares	As of	614,837 shares
	September 30, 2021	December 31, 2020
3) Average number of shares during the period	Nine months ended	32,508,129 shares	Nine months ended	32,538,723 shares
	September 30, 2021	September 30, 2020

*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.

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
	Nine months ended September 30, 2020 and 2021 ...............................................................................................	6
	Quarterly Consolidated Statements of Comprehensive Income
	Nine months ended September 30, 2020 and 2021 ...............................................................................................	7
(3)	Notes regarding quarterly consolidated financial statements ......................................................................................	8
	Notes regarding going concern assumption .................................................................................................................	8
	Notes in case of any significant changes in shareholders' equity .................................................................................	8
	Segment information, etc. ............................................................................................................................................	8
	Significant subsequent events ......................................................................................................................................	8

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1.Qualitative Information on Consolidated Results for the Current Period

(1)Explanation on operating results

In the third quarter of the current fiscal year, the Japanese economy continued to face severe conditions due to the large limitations on socioeconomic activities resulting from the announcement of repeated emergency declaration accompanying the spread of COVID-19. Looking ahead, infectious diseases are heading toward a convergence against the backdrop of the prevalence of vaccines, and economic activity is expected to recover. However, the risk of a re-expansion of infectious diseases remains in the winter, and we cannot be optimistic about the situation.

In the beauty salon industry, despite the impact of COVID-19, customers are returning to the level before the COVID-19 crisis in the salon industry. However, some salons in central metropolitan areas continue to have insufficient customer returns. Under these circumstances, in Fiscal Year 2021, we are working on "Change the Stage 18 Month Missions!" in order to lead us to a new stage of growth from Fiscal Year 2022.

In the third quarter of the fiscal year under review, the domestic market continued to receive a strong reputation for field activities that combine online and brick-and-mortar sales to salons amid COVID-19. In the hair care products segment, sales of premium brands Aujua and Global Milbon were strong, partly due to the introduction of new products and the impact of milbon:iD, an e-commerce platform that supports beauty salons in the sale of salon haircare products. In the hair coloring products category, sales of the fashion color Addicthy continue to be strong. In overseas markets, sales in China and South Korea continued to be steady, and sales in the U.S. also grew significantly.

As a result of the above, consolidated net sales for the third quarter of the current fiscal year were 29,718 million yen (up 17.9% year-on-year), operating income was 5,758 million yen (up 33.7% year-on-year), ordinary income was 5,227 million yen (up 36.1% year-on-year), and profit attributable to owners of parent was 3,725 million yen (up 36.0% year-on-year).

Breakdown of net sales by product category and breakdown of net sales into domestic and overseas sales are shown below: [Breakdown of consolidated net sales by product category]

(Unit: Million yen)

	Nine months ended September 30, 2020	Nine months ended September 30, 2021	Increase	Year-on-year
Product category					(decrease)
				change (%)
	Amount	Ratio (%)	Amount	Ratio (%)	amount
Hair care products	14,654	58.1	17,086	57.5	2,431	16.6
Hair coloring products	9,148	36.3	10,954	36.9	1,806	19.7
Permanent wave products	1,036	4.1	1,077	3.6	40	3.9
Cosmetic products	223	0.9	416	1.4	193	86.3
Other	150	0.6	183	0.6	33	22.4
Total	25,214	100.0	29,718	100.0	4,504	17.9

[Breakdown of net sales into domestic and overseas sales]

(Unit: Million yen)

	Nine months ended September 30, 2020	Nine months ended September 30, 2021	Increase	Year-on-year
					(decrease)
					change (%)
	Amount	Ratio (%)	Amount	Ratio (%)	amount
Domestic sales	21,102	83.7	23,904	80.4	2,801	13.3
Overseas sales	4,111	16.3	5,814	19.6	1,703	41.4
Total	25,214	100.0	29,718	100.0	4,504	17.9

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(2)Explanation on financial position ① Assets, liabilities and net assets

Total assets at the end of the third quarter under review increased 1,694 million yen from the end of the previous fiscal year, to 44,770 million yen.

Current assets decreased by 28 million yen from the end of the previous fiscal year to 22,093 million yen. The main factors for the change were increases of 1,084 million yen in merchandise and finished goods and 299 million yen in raw materials and supplies, and decreases of 940 million yen in cash and deposits and 714 million yen in notes and accounts receivable-trade.

Non-current assets increased by 1,723 million yen from the end of the previous fiscal year to 22,676 million yen. This was mainly due to an increase of 1,704 million yen in construction in progress, including a partial advance payment for the construction of a new factory in China and the expansion of a factory in Milbon Thailand, and a decrease of 686 million yen in investment securities due to the sale of a portion of investment securities held and a decrease in unrealized gains on the market value of listed shares.

Current liabilities decreased by 331 million yen from the end of the previous fiscal year to 5,768 million yen. The main factors for the change were increases of 473 million yen in accounts payable-trade and 429 million yen in provision for bonuses, and decreases of 918 million yen in accounts payable-other and 214 million yen in income taxes payable.

Non-current liabilities increased by 60 million yen from the end of the previous fiscal year to 727 million yen.

Net assets increased by 1,965 million yen from the end of the previous fiscal year to 38,273 million yen. The main factors for the change were increases of 1,807 million yen in retained earnings and 351 million yen in foreign currency translation adjustment due to the depreciation of the yen, and a decrease of 306 million yen in valuation difference on available-for-sale securities due to a decrease in unrealized gains on market value of listed stocks.

As a result, the equity ratio changed from 84.3% at the end of the previous fiscal year to 85.5%. Net assets per share based on the total number of shares issued at the end of the period were 1,177.24 yen, compared to 1,117.10 yen at the end of the previous fiscal year.

(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 announcement on August 6, 2021.

We cannot deny the possibility of unexpected fluctuations due to external factors, including the COVID-19. Therefore, we will promptly revise our earnings forecasts if significant fluctuations are anticipated.

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