Milbon Co., Ltd. · TSE:4919
Milbon — Q2 2023 Earnings Presentation
41 slides from Milbon's earnings presentation, Aug 10, 2023
Slide 1: FY2023 Second Quarter Financial Results Presentation Materials
Milbon Co., Ltd. FY2023 Second Quarter (January 1, 2023 – June 30, 2023) Financial Results Presentation Materials August 10, 2023 © 2023 Milbon Co., Ltd. 0
Slide 2: Table of Contents
Table of Contents P3 Consolidated Operating Results P4 Factors in YoY Changes in Consolidated Operating Income P5 Consolidated Sales by Product Category P16 Consolidated Trends in Capital Expenditures and R&D Expenses P17 Trends in Fieldpersons (FPs) P18 Consolidated Net Sales in Japan and Overseas
Slide 3: Financial Results for FY2023 Second Quarter
Milbon Group Financial Results for FY2023 (64 th Term) Second Quarter Masahiro Murai, Managing Executive Director © 2023 Milbon Co., Ltd. 2
Slide 4: Consolidated Operating Results (FY2023 6 months)
Consolidated Operating Results（FY2023 6 months） Sales grew thanks to the strong performance of domestic haircare products and favorable sales in the U.S., South Korea, and other regions, however, the target was not met due to poor progress in beauty equipment and domestic hair coloring products.
Slide 5: Factors in YoY Changes in Consolidated Operating Income
Factors in YoY Changes in Consolidated Operating Income • Rising raw material costs, which had not emerged in 2Q last year, are pushing down the gross profit margin. • Marketing expenses increased due to proactive hosting of educational seminars and large- scale events both in Japan and overseas aga
Slide 6: Consolidated Sales by Product Category: Hair Care Products (1)
Consolidated Sales by Product Category [Hair Care Products (1)] Consolidated Net Sales (FY2023 6 months) (Unit: million yen) Increase/ FY2022 FY2023 Increase/ Vs. plan ratio Decrease ratio 6 months 6 months Decrease (%) (%) 12,218 13,339 1,121 9.2 1.1 • Premium Brands saw a strong performance, up 14
Slide 7: Hair Care Products (2) New Products
Consolidated Sales by Product Category [Hair Care Products (2)] New Products FY 2023 6 months Aujua Hair Care Series Inmmetry Line A new line that corrects distortion*1 in the hair and frees from the habit of blow drying and ironing to condition hair, leading to lustrous and manageable hair with jus
Slide 8: Hair Care Products (3) New Products
Consolidated Sales by Product Category [Hair Care Products (3)] Miincurl Iron Keep Primer A pre-ironing primer oil that protects hair from the heat of the iron and keeps the ironed hair design soft and hydrated for a long time. (Unit: million yen) FY2023 FY2023 target Progress rate (%) 6 months 150
Slide 9: Premium Brand: Aujua
Premium Brand: Aujua New “Inmmetry Line” continues to perform well Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2022 FY2023 Decrease Decrease ratio (%) 6,022 6,420 398 6.6 Consolidated Gross Sales (FY2023 6 months) (Unit: million yen) FY2022 FY2023 Increase/ Increase/ 6 months 6 months De
Slide 10: Premium Brand: Global Milbon
Premium Brand: Global Milbon Growth in Japan was driven by increased touchpoints due to the new product “Milbon&,” and overseas growth was driven by the U.S. Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2022 FY2023 Decrease Decrease ratio (%) 18,400 21,010 2,610 14.2 Consolidated Gross Sa
Slide 11: Consolidated Sales by Product Category: Hair Coloring Products
Consolidated Sales by Product Category [Hair Coloring Products] Consolidated Net Sales (FY2023 6 months) (Unit: million yen) Increase/ FY2022 FY2023 Increase/ Vs. plan ratio Decrease ratio 6 months 6 months Decrease (%) (%) 8,148 8,238 89 1.1 (2.2) • Sales of hair coloring products in Japan were dow
Slide 12: Premium Organic Brand: Villa Lodola (1)
Premium Organic Brand: Villa Lodola (1) Launched new products, "Tempus" and "Fulgens," from the Renovo haircare series Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2022 FY2023 Decrease Decrease ratio (%) 12,458 12,996 538 4.3 Consolidated Gross Sales (FY2023 6 months) (Unit: million yen)
Slide 13: Premium Organic Brand: Villa Lodola (2)
Premium Organic Brand: Villa Lodola (2) New Products FY 2023 6 months Villa Lodola Renovo Tempus / Fulgens A series that extends hair color longevity with the reparative effects of nature's blessings, promoting healthy beauty in both the scalp and hair. Two types of shampoos and treatments to choose
Slide 14: Consolidated Sales by Product Category: Cosmetic Products (1)
Consolidated Sales by Product Category [Cosmetic Products (1)] Consolidated Net Sales (FY2023 6 months) (Unit: million yen) Increase/ FY2022 FY2023 Increase/ Vs. plan ratio Decrease ratio 6 months 6 months Decrease (%) (%) 262 267 4 1.9 (12.5) • The number of touchpoints continued to increase driven
Slide 15: Premium Brand: iMPREA
Premium Brand: iMPREA Strong sales of new products led to a year-on-year increase in sales Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2022 FY2023 Decrease Decrease ratio (%) 1,601 1,862 261 16.3 Consolidated Gross Sales (FY2023 6 months) (Unit: million yen) FY2022 FY2023 Increase/ Incre
Slide 16: Consolidated Sales by Product Category: Other
Consolidated Sales by Product Category [Other] New Products FY 2023 6 months Elmista（Results for dryer unit only） A hair dryer, jointly developed with Panasonic, that micronizes and atomizes beauty serum. Five types of serums are available to choose from according to hair concerns and desired textur
Slide 17: Consolidated Trends in Capital Expenditures and R&D Expenses
Consolidated Trends in Capital Expenditures and R&D Expenses (Unit: million yen) FY2023 FY2023 Category FY2019 FY2020 FY2021 FY2022 6 months Plan Capital expenditures 1,605 1,917 4,644 4,097 1,704 2,927 Depreciation and amortization 1,453 1,562 1,777 2,026 1,071 2,301 Amount 1,534 1,581 1,741 2,074
Slide 18: Trends in Fieldpersons (FPs)
Trends in Fieldpersons (FPs) Fieldpersons Trends (by Country) (Average number of FPs during the period) The number of Fieldpersons reported FY2021 FY2022 FY2023 represents the average number during the period and is not as of January 1. Please JAPAN 328.2 335.4 349.7 note that the calculation method
Slide 19: Consolidated Net Sales in Japan and Overseas
Consolidated Net Sales in Japan and Overseas FY2023 6 months (Unit: million yen) Increase/ FY2022 FY2023 Changes in local Decrease Vs. plan ratio 6 months 6 months Increase/ currency base*1 ratio Decrease Net sales % to sales Net sales % to sales (%) (%) (%) Consolidated net sales 21,467 100.0 22,70
Slide 20: Consolidated Operating Income in Japan and Overseas
Consolidated Operating Income in Japan and Overseas FY2023 6 months (Unit: million yen) FY2022 FY2023 Increase/ Vs. plan ratio 6 months 6 months Increase/ Decrease ratio Operating Operating Decrease Operating Operating income income (%) (%) income income ratio(%) ratio(%) Consolidated operating inco
Slide 21: Outlook of Overseas Subsidiaries (1)
Outlook of Overseas Subsidiaries (1) USA (Milbon USA) • In haircare, Global Milbon is performing well. New touchpoints are increasing as a result of deeper collaboration with distributors. • Hair color training sessions for distributor representatives across the U.S. have made them enthusiasts of SO
Slide 22: Outlook of Overseas Subsidiaries (2)
Outlook of Overseas Subsidiaries (2) CHINA (Milbon China) • A resurgence of COVID-19 occurred in the second quarter, leading to a decrease in the number of customers visiting hair salons. Despite such a challenging market environment, the Company hosted a large-scale messaging event for beauty profe
Slide 23: Outlook of Overseas Subsidiaries (3)
Outlook of Overseas Subsidiaries (3) SOUTH KOREA (Milbon Korea) • Hair coloring products, which account for more than 70% of total sales, remained steady overall due to strong sales of gray color products. • Sales of haircare products, especially Global Milbon, performed well. Sales are increasing d
Slide 24: Revision to Consolidated Operating Results Forecast (1)
Revision to Consolidated Operating Results Forecast (1) Net sales is expected to fall by 1.2 billion yen from the initial forecast due to the expected shortfall in sales of beauty equipment and domestic hair coloring products. Sales of beauty equipment were adjusted downward in line with the full-
Slide 25: Revision to Consolidated Operating Results Forecast (2)
Revision to Consolidated Operating Results Forecast (2) Consolidated Sales by Product Category FY2023 FY2023 Increase/ FY2022 Initial % total Revised % total Decrease （Unit: million yen） target target Net sales 45,238 49,200 100.0% 48,000 100.0% (1,200) Hair care 26,312 27,942 56.8％ 28,089 58.5% 147
Slide 26: Revision to Forecast (3): Factors Affecting Changes in Operating Income
Revision to Consolidated Operating Results Forecast (3) Factors Affecting Changes in Operating Income （Unit: million yen） Gross profit SG&A expenses Personnel expenses: (200) 8,300 Travel and transportation expenses: (80) Costs to investigate buried cultural properties at the construction site of th
Slide 27: Appendix: Hair Care Brand Positioning Map
<Appendix> Hair Care Brand Positioning Map Premium Brands Professional Brands © 2023 Milbon Co., Ltd. 26
Slide 28: Progress in FY2023 (64th Term)
Milbon Group Progress in FY2023 (64 th Term) Ryuji Sato, Representative Director, President and CEO © 2023 Milbon Co., Ltd. 27
Slide 29: Situation in the First Half
Situation in the First Half Factors Influencing Customer Behavior Soaring Energy Costs Expenditures on Inflation travel, food, etc. © 2023 Milbon Co., Ltd. 28
Slide 30: Key Points of the First Half Results
Key Points of the First Half Results Consolidated Net Sales in Japan and Overseas Increase/ FY2022 FY2023 Increase/ Decrease ratio (Unit: million yen) 6 months 6 months Decrease （％） Net sales 21,467 22,703 1,236 5.8% Japan 16,627 17,175 547 3.3% Overseas 4,839 5,528 688 14.2% Sales by Product Catego
Slide 31: Analysis (1) Elmista
Analysis (1) Elmista We intend to regain dryer sales by proactively offering product trials to hair salons and their customers. Factors for • Selling beauty appliances was our first-time endeavor, and there was a lack of understanding of the market. The Deviation competitive environment for high-end
Slide 32: Analysis (2) Hair Coloring Products
Analysis (2) Hair Coloring Products We see no change in the hair color trend and will take advantage of the new product roll outs in the second half of the year to revitalize the market. • With our hair coloring products seeing double digit growth for two consecutive years amidst the COVID-19 pandem
Slide 33: Domestic Market: Beauty Platform Plan
Domestic Market: Beauty Platform Plan Smart Salon Deployment Status 11 salons opened in 1H ＋9 salons in 2H To be expanded to 20 salons by the end of FY2023 ▲GIEN Smart Salon NU Chayamachi＋ (Osaka) ▲MINX Shibuya smart salon (Tokyo) ▲The interior of MINX ▲lili by CieL Smart Salon（Kyoto） ▲La Bless Gran
Slide 34: Two Responses Regarding Smart Salon Strategies
Two Responses Regarding Smart Salon Strategies Response 1 Response 2 Three salons have already opened Retail sales results are double the or are considering a second location. × normal Milbon Management Index Survey cooperating salons. Milbon As of Estimated Management Smart June30, as of the Index
Slide 35: Domestic Market: Progress in milbon:iD
Domestic Market: Progress in milbon:iD Results by the end of July, 2023 Number of registered users ⇒560,000（Target for FY2023：640,000） Number of registered salons ⇒5,548（Target for FY2023：6,000） New functions added Developed Style Stock (tentative name), to be fully deployed from FY2024 The hairstyl
Slide 36: Domestic Market: Progress in Lifetime Beauty Care Strategies
Domestic Market: Progress in Lifetime Beauty Care Strategies Adding New Products Debut Debut Im in Jul. Alanous in Sept. The first product： Beauty Up Mist • New cosmetics brand for distributor delivery Beauty supplement born from • The first product is a setting spray approximately 20 years of • Mor
Slide 37: Progress in Overseas Market
Progress in Overseas Market Net Sales in Overseas <YoY＋14.2％ Vs. plan ratio ＋3.2％> Sales in China increased from the same period of the previous year, though it did not reach the plan. However, overall sales in the overseas business exceeded the plan, with strong sales in South Korea, the U.S., and
Slide 38: China
China <Sales in local currency basis: YoY＋8.2％, Vs. plan ratio (11.3％)> 【Sales Company】 • The Company is bolstering ties with hair salons through various measures including holding events, educational programs, and seminars. These initiatives are designed to support salons in adapting to the evolvin
Slide 39: USA and ASEAN
USA <Sales in local currency basis: YoY＋16.6％, Vs. plan ratio＋7.9％> • The Company’s “Roundtable,” an exchange meeting between the Company’s top management and all U.S. distributors, is boosting its presence in the market. • An intensive hair color training session for distributors called “Color Boot
Slide 40: Return to Shareholders
Return to Shareholders Dividend Forecast Interim dividend was carried out as planned at 40 yen per share. Year-end dividend is set at 48 yen, as originally planned. FY2023 FY2021 FY2022 FY2023 Forecast （Unit: yen） End of 2Q 30 40 40 - *The interim dividend for FY2023 has been End of FY 38 46 - 48 co
Slide 41: Forward-looking statements notice
With respect to the business forecasts included in this document, any statement that is not historical fact is a forward-looking statement based on information available and certain premises that are judged to be rational at the time of the announcement. Please be aware that actual results may diffe