Slide 1: Financial Results for Q3 of FY2024
Financial Results for Q3 of FY2024 (Ending December 31,2024) Milbon Co., Ltd. (TSE code ： 4919) November 15, 2024 © Milbon Co., Ltd. All right reserved.
Slide 2: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 Agenda 3. Appendix P16 4. Overview of Milbon P28 This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japan
Slide 3: Today's Message
Today’s Message FY24 Both sales and profit increased. Domestic haircare products and business in South Korea 3Q YTD continued to drive growth from the first half of the year. Results • Haircare products, including Aujua, have driven the growth of our domestic business. Although hair coloring product
Slide 4: Consolidated Statement of Earnings
Consolidated Statement of Earnings Sales are progressing at a pace slightly above what was planned. Profit exceeded the plan due to higher sales and deferred SG&A expenses. FY2023 % FY2024 % Gap FY2024 Vs. Plan Gap (Unit: million yen) 3Q YTD Total 3Q YTD Total (%) 3Q YTD Plan （％） Net Sales 34,150 10
Slide 5: Consolidated Operating Income - Factors Behind YoY Changes
Consolidated Operating Income - Factors Behind YoY Changes Operating income increased significantly due to higher sales and the recovery from last year’s inventory loss. Increase in gross profit margin Increase in Logistics gross profit +884 (625) expenses R&D (million yen) due to expenses Rent high
Slide 6: Consolidated Operating Income - Factors Behind Differences Compared to the Plan
Consolidated Operating Income - Factors Behind Differences Compared to the Plan Operating profit exceeded the plan due to favorable sales. However, full-year operating profit is expected to align with our initial plan as SG&A expenses are projected to be as planned. Travel expenses Other (million ye
Slide 7: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 Agenda 3. Appendix P16 4. Overview of Milbon P28 © Milbon Co., Ltd. All right reserved. 7
Slide 8: Net Sales and Operating Income by Region
Net Sales and Operating Income by Region Both domestic and overseas sales and profits progressed in line with the plan. The weaker yen boosted overseas sales growth. Exchange Exchange FY2023 FY2024 Actual gap FY2024 Gap Gap (%) Rate Rate 3Q YTD 3Q YTD Rate*1 (%) 3Q YTD Plan (Unit: million yen) FY23
Slide 9: Financial Results by Region: Japan
Financial Results by Region: Japan Overall performance has remained strong since the first half of the year. The robust growth in haircare products has compensated for the slower sales of hair coloring products. YoY Growth Rate of Sales by Quarterly Net Sales (mil. yen) Quarterly Operating Income (m
Slide 10: Promoting Smart Salon
Financial Results by Region: Japan / Progress of Key Strategies Key Strategies Progress up to 3Q Results and Outlook FY’23 FY’24 3Q YTD FY’24 Plan Promoting Smart Salon Members 670,000 820,000 870,000 milbon:iD Salons 5,930 6,455 6,500 EC Sales 1,640 mil. yen 1,360 mil. Yen 1,950 mil. yen FY’23 FY’2
Slide 11: Financial Results by Region: South Korea
Financial Results by Region: South Korea Overall performance has remained strong since the first half of the year, driven by steady growth in our mainstay hair coloring products and robust sales of haircare products, indicating that future growth is expected. YoY Growth Rate of Sales by Quarterly Ne
Slide 12: Financial Results by Region: China
Financial Results by Region: China Despite the challenging market environment, including declining consumer confidence, our strong support for salons in adapting their operations to meet these changes has been very well received. YoY Growth Rate of Sales by Quarterly Net Sales (mil. yen) Quarterly O
Slide 13: Financial Results by Region: USA
Financial Results by Region: USA Haircare product sales grew steadily. Although issues remain with hair coloring products, which is our focus area this year, we aim to steadily increase the number of salons that use our products through educational initiatives. YoY Growth Rate of Sales by Quarterly
Slide 14: Full-year Outlook by Region
Full-year Outlook by Region Domestic sales are expected to slightly exceed our plan due to strong haircare sales. Overseas sales should meet expectations as strong performance in South Korea and the weaker yen offset slower sales in China. Region Vs. Initial Plan Haircare （strong sales of new produc
Slide 15: Full-year Outlook for Operating Income
Full-year Outlook for Operating Income The full-year forecast remains unchanged. Despite an anticipated upswing in sales, operating income is expected to be in line with the plan due to potential inventory loss. Outlook at the Beginning of the Year Current Outlook (vs. the Beginning of the Year) SG&
Slide 16: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 3. Appendix P16 Agenda Factors Behind YoY Changes in Consolidated Operating Income (Quarterly Basis) P17 Factors Behind Changes Compared to the Consolidated Operating Income Plan (Quarterly Basis) P18 Consolidated Net
Slide 17: Factors Behind YoY Changes in Consolidated Operating Income (Quarterly Basis)
Factors Behind YoY Changes in Consolidated Operating Income (Quarterly Basis) Operating income increased significantly due to higher sales and the recovery from the inventory loss recorded in the third quarter of last year. Increase in gross profit Personnel Recovery from margin expenses (million ye
Slide 18: Factors Behind Changes Compared to the Operating Income Plan (Quarterly Basis)
Factors Behind Changes Compared to the Consolidated Operating Income Plan (Quarterly Basis) Operating income of the third quarter was generally in line with the plan. Increase in (million yen) gross profit Decrease in due to gross profit higher sales margin Deferral of R&D Travel +115 expenses expen
Slide 19: Consolidated Net Sales and Sales Ratio by Product Category
(Appendix) Consolidated Net Sales and Sales Ratio by Product Category FY2023 FY2024 (Unit: million yen) 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Net Sales 10,340 12,362 11,446 13,612 47,762 11,508 13,017 12,467 36,993 Haircare 5,969 7,370 6,593 8,421 28,355 6,670 8,012 7,560 22,243 Hair Coloring 3,922 4,315
Slide 20: Status of Main Brands - Haircare Products
(Appendix) Status of Main Brands - Haircare Products Haircare - Aujua Haircare – Global Milbon Sales are strong, led by new scalp care product Presedia. The number Brand growth is being propelled by our strong performance in of salons using our products continued to expand in Japan and South oversea
Slide 21: Status of Main Brands - Hair Coloring Products
(Appendix) Status of Main Brands - Hair Coloring Products Hair coloring – Ordeve Addicthy Hair coloring – Villa Lodola Color The competitive environment in Japan is intensifying. However, we The rollout in Hong Kong began in April. In Japan, sales and are seeing signs of growth due to increased sale
Slide 22: Status of Main Brands - Cosmetics
(Appendix) Status of Main Brands - Cosmetics Cosmetics – Imprea Cosmetics – IM Sales decreased due to increased focus on cosmetics-related New color mascara products, promoted in conjunction with hair color, activities within IM brand. performed well and exceeded the annual plan. FY2023 FY2024 FY202
Slide 23: Sales Growth and Sales Ratio by Category in Japan and Overseas
(Appendix) Sales Growth and Sales Ratio by Category in Japan and Overseas (Local Currency Basis) FY2023 FY2024 Japan 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Net Sales +6.0% +0.7% +3.0% +3.1% +3.1% +9.3% +5.0% +7.7% +7.2% Haircare +9.5% +2.9% +4.0% +4.6% +4.9% +9.1% +8.9% +13.4% +10.5% Hair Coloring +1.9% (3
Slide 24: Sales Growth and Sales Ratio by Category in Japan and Overseas
(Appendix) Sales Growth and Sales Ratio by Category in Japan and Overseas (Local Currency Basis) FY2023 FY2024 China 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Net Sales (2.7%) +22.4% (6.1%) +5.8% +3.8% +4.3% (16.5%) +0.0% (4.1%) Haircare +11.0% +35.7% (7.3%) +15.9% +12.0% +6.2% (3.3%) +8.3% +3.7% Hair Colorin
Slide 25: Status of Inventory
(Appendix) Status of Inventory Inventory tends to increase in the first half of the year due to the launch of many new products. Towards the end of the year, inventory levels are expected to temporarily rise to meet the increased demand before next year’s price revision. (million yen) Decrease due I
Slide 26: Status of Capital Expenditures, etc.
(Appendix) Status of Capital Expenditures, etc. FY2024 FY2024 FY2020 FY2021 FY2022 FY2023 (Unit: million yen) 3Q YTD Plan Capital Expenditures 1,917 4,644 4,097 3,151 1,982 4,258 Depreciation and 1,562 1,777 2,026 2,213 1,693 2,404 Amortization Amount 1,581 1,741 2,074 2,334 1,788 2,649 R&D exp. % t
Slide 27: The Number of Field Persons (FP)
(Appendix) The number of Field Persons (FP) The number of FPs increased moderately in each country. The Number of FPs by Country FP Recruitment and Training Status in Japan Upper column: Average number of FPs during the period (persons) Lower column: Net sales per FP (million yen) FY2021 FY2022 FY20
Slide 28: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 Agenda 3. Appendix P16 4. Overview of Milbon P28 © Milbon Co., Ltd. All right reserved. 28
Slide 29: Overview of Milbon
(Appendix) Overview of Milbon Milbon is a cosmetics manufacturer that produces and sells haircare products including treatments and hair coloring products exclusively to hair salons. Cosmetics market Professional hair cosmetics market Domestic market size: Approx. 200 billion yen* Domestic market sh
Slide 30: Overview of Milbon: Business Model
(Appendix) Overview of Milbon: Business Model We have established solid trust with hair salons by offering our products and services that contribute to enhance their sales and profits. The distribution flow of Our sales personnel, Field Person, identifies salon tasks, provides educational support, a
Slide 31: Overview of Milbon: Three Key Points of Our Business Model
(Appendix) Overview of Milbon: Three Key Points of Our Business Model Consistent focus on hair salons and hair stylists Since our founding in 1960, we have sustained continuous growth by steadfastly narrowing our business focus to hair salons, with the strategy of increasing sales and profits of hai
Slide 32: Overview of Milbon: Our Growth Trajectory
(Appendix) Overview of Milbon: Our Growth Trajectory Steady growth through business expansion in Japan and overseas Net Sales and Operating Income Composition of Sales by (billion yen) Launched “Smart Salons” (billion yen) Country (FY2023) Launched “milbon:iD”, our official online stores Launched “I
Slide 33: Overview of Milbon: Our Main Products
(Appendix) Overview of Milbon: Our Main Products Haircare and hair coloring products are the mainstay of our sales. In recent years, we have expanded our business to include cosmetics, etc. Composition of Sales by Product Category Cosmetics (only available in Japan) (FY2023) Haircare Products sold f
Slide 34: Overview of Milbon: Domestic Hair Salon Market Conditions
(Appendix) Overview of Milbon: Domestic Hair Salon Market Conditions Hair salons have the potential for further growth despite the medium- to long term decrease in the number of customers due to declining birth rate and aging population. Challenges and Growth of Aging Population with Low Fertility C
Slide 35: Our Recent Initiatives in Japan, milbon:iD
(Appendix) Overview of Milbon: Our Recent Initiatives in Japan, milbon:iD We launched milbon:iD, an EC platform, in 2020 to support productivity enhancement of hair salons. This platform allows salon customers to purchase retail products online. How milbon:iD Works – Revenue is attributed to salons
Slide 36: Our Recent Initiatives in Japan, Two Major Strategies
(Appendix) Overview of Milbon: Our Recent Initiatives in Japan, Two Major Strategies We aim to maximize the inherent value of hair salons, which enables frequent and extended in-person visits, by enhancing our Smart Salon concept and broadening the range of products available for in-salon purchase.
Slide 37: Overview of Milbon: Status of Overseas Expansion
(Appendix) Overview of Milbon: Status of Overseas Expansion We conduct business across 14 countries and regions, and have recently expanded our international bases for R&D as well as production. Milbon Europe Milbon Korea GmbH Co., Ltd. Milbon Trading(Shanghai) Istanbul Main Branch Co.,Ltd. Milbon C
Slide 38: Overview of Milbon: Our Three Major Overseas Countries
(Appendix) Overview of Milbon: Our Three Major Overseas Countries Three major countries, South Korea, China, and the USA account for nearly 80% of overseas sales South Korea China USA Our educational initiatives focused on hair Subsequent to COVID-19, activities for hair We have enjoyed rapid growth
Slide 39: Overview of Milbon: Other Countries and Regions
(Appendix) Overview of Milbon: Other Countries and Regions Our sales are particularly significant in East Asia and ASEAN, and we have recently expanded into Europe. Europe and Middle East East Asia (Taiwan and Hong 8.4% Kong) 36.6% FY2023 Sales in Other Countries and Regions 2.68 billion yen ASEAN 5
Slide 40: Overview of Milbon: Our Global R&D and Production
(Appendix) Overview of Milbon: Our Global R&D and Production We aim to minimize geopolitical risks and to align ourselves with the diverse values of beauty unique to each locality, by establishing R&D and production systems in each region. R&D－ Production－ Collaboration Among our Four Global R&D Bas
Slide 41: Overview of Milbon: Shareholder Returns
(Appendix) Overview of Milbon: Shareholder Returns We have set a dividend payout ratio target of 50% from FY2022, aiming for steady and continuous shareholder returns. (Yen) FY2024 Plan 88 yen © Milbon Co., Ltd. All right reserved. 41
Slide 42: Overview of Milbon: Corporate Governance Structure
(Appendix) Overview of Milbon: Corporate Governance Structure See our Integrated Report for more details ： https://www.milbon.com/en/ir/library/report.html © Milbon Co., Ltd. All right reserved. 42
Slide 43: Overview of Milbon: Compensation for Board Members
Appendix Overview of Milbon: Compensation for Board Members Compensation for board directors (excluding external board directors) shall consist of cash and stock-based compensation as an incentive to continuously increase corporate value, in order to encourage each board director to perform their du
Slide 44: ESG Investment Index and External Assessments
(Appendix) Overview of Milbon: ESG Investment Index and External Assessments ESG investment index to be selected THE INCLUSION OF Milbon Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION
Slide 45: Disclaimer
Disclaimer 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 result