Milbon Co., Ltd. · TSE:4919
Milbon — FY2022 Earnings Presentation
51 slides from Milbon's earnings presentation, Feb 14, 2023
Slide 1: FY2022 Financial Results Presentation Materials
Milbon Co., Ltd. FY2022 Financial Results Presentation Materials February 14, 2023 © 2023 Milbon Co., Ltd. 0
Slide 2: Table of Contents
Table of Contents P3 Consolidated Operating Results P4 Consolidated Sales by Product Category P14 Consolidated Statement of Earnings P15 Consolidated Trends in Capital Expenditures and R&D Expenses P16 Trends in Fieldpersons (FPs), Market Related Data P17 Consolidated Net Sales in Japan and Overseas
Slide 3: Note: Addition of Sales Deduction Items
NOTE :Addition of Sales Deduction Items Previously, sales discounts for cash payment were treated as financial expenses (non-operating expenses) from the viewpoint of materiality. However, in light of recent interest rate conditions, such expenses will be treated in the same manner as rebates, and f
Slide 4: Consolidated Operating Results
Consolidated Operating Results In Japan, sales showed steady growth, fueled by the increasing popularity of hair bleaching designs and other double-process colors among various age groups, along with robust demand for our premium brands that cater to the growing hair care needs. Overseas, the Comp
Slide 5: Consolidated Sales by Product Category [Hair Care Products (1)]
Consolidated Sales by Product Category [Hair Care Products (1)] Consolidated Net Sales (Unit: million yen) FY2021 Increase/ Increase/ FY2022 Reference*1 Decrease Decrease ratio (%) 24,029 26,312 2,283 9.5 • The Premium Brands experienced a strong performance with a remarkable YoY growth rate of 13.1
Slide 6: Hair Care Products (2) New Products FY2022
Consolidated Sales by Product Category [Hair Care Products (2)] New Products FY2022 Aujua Climatic Care Series Exshield Line A new line of Climatic Care Series designed to effectively eliminate and prevent particle pollution*1 from adhering to hair, resulting in a radiant and glossy appearance. (Uni
Slide 7: A Premium Brand, Aujua
A Premium Brand, Aujua Sales fell short of the target, partly due to a challenging market environment for new products, despite an increase in the number of touchpoints. Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2021*2 FY2022 Decrease Decrease ratio (%) 5,200 6,022 822 15.8 Consolidate
Slide 8: A Premium Brand, Global Milbon
A Premium Brand, Global Milbon Sales growth was primarily driven by the establishment of touchpoints in each country and the positive impact of new products from the Premium Position. Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2021 FY2022 Decrease Decrease ratio (%) 14,575 18,400 3,825
Slide 9: Consolidated Sales by Product Category [Hair Coloring Products (1)]
Consolidated Sales by Product Category [Hair Coloring Products (1)] Consolidated Net Sales (Unit: million yen) FY2021 Increase/ Increase/ FY2022 Reference*1 Decrease Decrease ratio (%) 14,549 16,631 2,082 14.3 • In Japan, sales of hair coloring products showed a steady growth of 12.4% YoY. This grow
Slide 10: Hair Coloring Products (2)
Consolidated Sales by Product Category [Hair Coloring Products (2)] Core Product FY2022 Ordeve Addicthy Effectively cancels out red-tinged brown and allows customers to freely express their individual hair color designs with clear and transparent color expression. (Unit: million yen) Increase/ Incre
Slide 11: A Premium Organic Brand, Villa Lodola (1)
A Premium Organic Brand, Villa Lodola (1) Sales remained steadily due to continued growth in hair coloring products. Number of Salons (Unit: salons) Increase/ Increase/ FY2021 FY2022 Decrease Decrease ratio (%) 11,317 12,458 1,141 10.1 Consolidated Gross Sales (Unit: million yen) Increase/ Increase/
Slide 12: Hair Coloring Products (2): Villa Lodola Color
Consolidated Sales by Product Category [Hair Coloring Products (2)] Core Product FY2022 Villa Lodola Color The product is formulated with 92% naturally derived ingredients and harnesses the power of plants. It offers a fully organic hair care experience, from application to finish and continued use,
Slide 13: Consolidated Sales by Product Category [Cosmetic Products (1)]
Consolidated Sales by Product Category [Cosmetic Products (1)] Consolidated Net Sales (Unit: million yen) FY2021 Increase/ Increase/ FY2022 Reference*1 Decrease Decrease ratio (%) 579 572 (7) (1.3) • During the COVID-19 pandemic, in-store touch-up referral activities in salons did not develop as exp
Slide 14: A Premium Brand, iMPREA
A Premium Brand, iMPREA Sales fell short of target, but the number of touchpoints surpassed the target, portending future growth. Number of Salons*1 (Unit: salons) Increase/ Increase/ FY2021 FY2022 Decrease Decrease ratio (%) 1,104 1,601 497 45.0 Consolidated Gross Sales (Unit: million yen) FY2021 I
Slide 15: Consolidated Statement of Earnings
Consolidated Statement of Earnings <Consolidated Statement of Earnings> (Unit: million yen) <Breakdown of Net Sales by Product Category> (Unit: million yen) Increase/ FY2021 Increase/ FY2021 % to % to Reference* FY2022 % to sales Decrease Decrease FY2022 ratio (%) Reference* sales sales Hair care pr
Slide 16: Consolidated Trends in Capital Expenditures and R&D Expenses
Consolidated Trends in Capital Expenditures and R&D Expenses (Unit: million yen) Category FY2018 FY2019 FY2020 FY2021 FY2022 Capital expenditures 1,149 1,605 1,917 4,644 4,097 Depreciation and amortization 1,370 1,453 1,562 1,777 2,026 Amount 1,479 1,534 1,581 1,741 2,074 R&D exp. % to sales 4.2 4.2
Slide 17: Trends in Fieldpersons (FPs), Market Related Data
Trends in Fieldpersons (FPs), Market Related Data Fieldpersons Trends (by Country) (Number of FPs / Average number during the period) The number of Fieldpersons reported 2021 2022 represents the average number during the period and is not as of January 1. Please JAPAN 328.2 335.4 note that the calcu
Slide 18: Consolidated Net Sales in Japan and Overseas
Consolidated Net Sales in Japan and Overseas (Unit: million yen) Increase/ FY2021 Changes in local FY2022 Decrease currency base*2 Reference*1 Increase/ ratio Decrease Net sales % to sales Net sales % to sales (%) (%) Consolidated net sales 40,849 100.0 45,238 100.0 4,389 10.7 8.7 JAPAN 32,938 80.6
Slide 19: Consolidated Operating Income in Japan and Overseas
Consolidated Operating Income in Japan and Overseas (Unit: million yen) FY2021 Increase/ FY2022 Reference*1 Increase/ Decrease ratio Operating Operating Operating Operating Decrease (%) income income ratio(%) income income ratio(%) Consolidated operating income 7,084 17.3 7,551 16.7 467 6.6 JAPAN 6,
Slide 20: Outlook of Overseas Subsidiaries (1)
Outlook of Overseas Subsidiaries (1) USA (Milbon USA) • While remote activities became the mainstream with the COVID-19 pandemic, market activities by the Company such as salon visits with distributor sales staff, were highly appreciated and helped to strengthen relationships with distributors. Glob
Slide 21: Outlook of Overseas Subsidiaries (2)
Outlook of Overseas Subsidiaries (2) CHINA (Milbon China) • In addition to the socio-economic stagnation caused by the zero-COVID policy that lasted until December, the outbreak of infections caused by the backlash following the lifting of the zero- COVID restriction on the flow of people and other
Slide 22: Appendix: Hair Care Brand Positioning Map
<Appendix> Hair Care Brand Positioning Map Premium Brands Professional Brands © 2023 Milbon Co., Ltd. 21
Slide 23: Milbon Group Initiatives for FY2023 (64th Term)
Milbon Group Initiatives for FY2023 (64th Term) Ryuji Sato, Representative Director, President and CEO © 2023 Milbon Co., Ltd. 22
Slide 24: Seven Regions
SECTION 1. Seven Regions SECTION Market Environment in Japan / 2. Beauty Platform Plan SECTION Consolidated Target for FY2023 3. © 2023 Milbon Co., Ltd. 23
Slide 25: Seven Regions: Promotion of Local Production for the Local Market
Seven Regions: Promotion of Local Production for the Local Market Seven Regions Making Up the Overall Global Market: Promotion of Local Production for the Local Market ①Japan ②Korea ③Chinese cultural sphere（Mainland China・Hong Kong・Taiwan） ④ASEAN ⑤North America（US・Canada） ⑥EU ⑦Middle East（Turkey） We
Slide 26: Global Sales Network
Global Sales Network *Reference figures compiled from 4 Target Indicators for Overseas Market figures provided by distributors in each country. FY2021 FY2022 FY2026 Increase / Increase / Progress Result Result Decrease Target Decrease rate ratio (%) Net sales of overseas subsidiaries (million yen) U
Slide 27: Global R&D
Global R&D We advance research and development in every region through our "Global 4-R&D" initiative, fostering research and development seeds that culminate in novel products and services. Milbon Japan Central Research Institute Scheduled to be in operation at the end of 2023 US Thailand China Hane
Slide 28: Global Production
Global Production The triad of factories will collaborate to fortify the regionalized manufacturing infrastructure, fitting for local consumption, with Yumegaoka Factory serving as the central facility. Yumegaoka Factory [Manufacture of products for the Japanese and overseas market] Thailand China F
Slide 29: Milbon Quality
Global Production Initiatives aimed at fostering trust through the "Made by Milbon" philosophy, and to articulate Milbon Quality as a hallmark of value for customers and consumers Made in Japan Milbon Quality ＜Value for Customers＞ Made by Milbon Product Service Education Value in Production Brand Lo
Slide 30: Global Logistics
Global Logistics Advancement of trade systems and logistics strategies in Japan and abroad, with the aim of achieving a Global 2-Week Delivery standard. Domestic Structure Overseas Structure Efforts to reduce the lead time for overseas shipment Netherlands Warehouse Trade Center • Started operation
Slide 31: Global Human Resources
Global Human Resources Preparations for the launch of the Human Resources Development Center in 2025 In a further effort to fortify our employee training 1. The Training Center will become an "educational hub" that will support the development of all employees within the Group. 2. The further develo
Slide 32: Market Environment in Japan / Beauty Platform Plan
SECTION 1. Seven Regions SECTION Market Environment in Japan / 2. Beauty Platform Plan SECTION 3. Consolidated Targets for FY2023 © 2023 Milbon Co., Ltd. 31
Slide 33: Three Perspectives in the eyes of customers and society at large
Three Perspectives in the eyes of customers and society at large Perspective Demographic Trends on Consumption The continued decline of the under-18 population makes it more difficult ０１ to attract younger customers and hire younger employees. Millennials and Generation Z are driving new trends. (40
Slide 34: New Form and Function of Hair Salons: Three Potentials
New Form and Function of Hair Salons : Three Potentials Create an environment where each individual can maximize their own “strengths” Potential By persevering in the enhancement of the “expertise" born from the ０１ interplay of “likes" and “strengths," we can establish a work environment in which ea
Slide 35: Beauty Platform Plan: Two Major Strategies
Salon-based Social Innovation Salon-based Social Innovation Beauty Platform Plan 1 Two major strategies 2 Sustainability Sustainable Cities Smart Salon Lifetime Beauty and Communities Strategy Care Strategy The second year has started © 2023 Milbon Co., Ltd. 34
Slide 36: Market Policy Concept for FY2023
Market Policy Concept for FY2023 Toward a new form of Salon: Beauty Platform Plan Salons that connect with Developing "Expertise" and "Career” Sign for the future consumers Creating an working “Expanding the business environment that Store-based domain" and "Reaching leverages one’s salons out to th
Slide 37: The Basis for the Beauty Platform Plan
The “basis” for the Beauty Platform Plan ・Growth in the ratio of hair color menu use at salons Hair coloring as a basis Percentage of female color customers in their 10s-60s who get their coloring done in salons. 70.6% 74.8% [2017] [2021] （According to the research of National Beauty & Barber Manufa
Slide 38: Smart Salon Strategy
Smart Salon Strategy Smart Salon, a new salon form that fuses the real and digital worlds to fulfill customers' desire for "more," was launched in January 2023. What is “Smart Salon”? ・A salon space where you can experience a new shopping experience that combines the real and the digital, with the a
Slide 39: Initiatives for Lifetime Beauty Care Strategies
Initiatives for Lifetime Beauty Care Strategies h Hair Care Skin Care • Aujua Expect synergistic effects with Smart New product INMMETRY Line takes hair care to Salon in addition to existing cosmetic the next level referral activities • Global Milbon • New Brand “IM” Blonde Plus： Damage care for ble
Slide 40: ELMISTA
E L M I STA ELMISTA, a hair dryer that micronizes and atomizes beauty serum, is jointly developed by Milbon and Panasonic. • Launch of Airconc (interchangeable cartridges containing hair serums that *Airconc for approx. 60 can be selected according to hair times(when 2 minutes of concerns and desire
Slide 41: Progress of Sustainability Key Challenges
Progress of Sustainability Key Challenges Case Initiatives in Manufacturing Yumegaoka Factory receives RSPO Supply Chain Certification 1 Achieves distribution certification as first cosmetics manufacturer Yumegaoka Factory wins EcoVadis Silver Medal 2 Assessment items of EcoVadis; Environment Labor
Slide 42: Consolidated Targets for FY2023
SECTION Seven Regions 1. SECTION Market Environment in Japan / 2. Beauty Platform Plan SECTION 3. Consolidated Targets for FY2023 © 2023 Milbon Co., Ltd. 41
Slide 43: Consolidated Targets for FY2023
Consolidated Targets for FY2023 ■Consolidated Statement of Earnings FY2022 FY2023 FY2023 Increase / FY2026 FY2026 Increase / FY2022 ％ total % total Decrease Target Decrease Target % total sales （Unit: million yen） sales sales ratio(%) Net sales 45,238 100.0 49,200 100.0 3,961 8.8 58,000 100.0 Japan
Slide 44: FY2023 Major New Products
FY2023 Major New Products Schedule Name of Products Target* (million yen) *The target amounts are not Feb. Hair Care Aujua Hair Care Series INMMETRY Line 1,100 presented on a consolidated Feb. Hair Coloring ORDEVE Relaxy Line 250 basis. ★ Feb. Cosmetics iMPREA Milky Souffle UV 32 1Q Mar. Hair Care E
Slide 45: Actions to address rising raw material prices
Actions to address rising raw material prices (short, medium and long term) Development Procurement Manufacturing Short- Medium- Take advantage of raw Strengthening price negotiation Consideration and sequential term implementation of equipment material sourcing Establishment of a stable systems lea
Slide 46: Consolidated Targets for FY2023 (Net Sales and Operating Income by Country)
Consolidated Targets for FY 2023 (Net Sales and Operating Income by Country) ■Consolidated Net Sales in Japan and Overseas FY2023 Increase / Forex rates Forex rates FY2026 Increase / FY2022 Decrease FY2022 FY2023 （Unit: million yen） Target Decrease Target ratio (%) (Unit : yen) (Unit : yen) Japan 35
Slide 47: Consolidated Targets for FY2023 (Net Sales by Product Category / Premium Brands)
Consolidated Targets for FY2023 (Net Sales by Product Category / Premium Brands) ■Reference: Net Sales by Product Category (Consolidated Net Sales) Increase / Increase / FY2022 FY2023 Target Decrease ratio （Unit: million yen） Decrease (%) Hair care products 26,312 27,942 1,629 6.2 Hair coloring prod
Slide 48: Capital Expenditures in FY2023
Capital Expenditures in FY2023 ■ Capital expenditures, Depreciation and R&D expenses FY 2023 Classification FY 2022 Planned Capital expenditures 4,097 2,927 Depreciation and amortization 2,026 2,301 Amount 2,074 2,372 R&D exp. % to sales 4.6% 4.8% FY2023 CAPEX Main Items Sales Offices, • Establishme
Slide 49: Progress in Medium-term Financial Strategy
Progress in Medium-term Financial Strategy (2022-2026) Target: Results: New Meduim-term Progress Rate FY2022 (2022-2026)：5 years Cash flows 5 billion yen Over 44 billion yen 11.4% from operating activities Use: 4.1 billion yen 23 billion yen 17.8% Capital Sales Offices, Studios: 150 million yen Sale
Slide 50: Return to Shareholders
Return to Shareholders ■Shareholder Return <Divident Forecast> FY2023 FY2021 FY2022 Forecast （Unit：yen） End of 2Q 30 40 40 End of FY 38 46 48 Total 68 86 88 Consolidated dividend payout ratio 43.3% 50.2% 49.3% © 2023 Milbon Co., Ltd. 49
Slide 51: 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