Milbon Co., Ltd. · TSE:4919
Milbon — Q1 2024 Earnings Presentation
40 slides from Milbon's earnings presentation, May 14, 2024
Slide 1: Financial Results for Q1 of FY2024
Financial Results for Q1 of FY2024 (Ending December 31,2024) Milbon Co., Ltd. (TSE code ： 4919) May 14, 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. Outline of Milbon P25 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 Japane
Slide 3: Today's Message
Today’s Message • Both sales and profits increased, exceeding the initial plan. Despite ongoing challenges with domestic hair coloring products and the market environment in China, we have made a solid start towards achieving our full-year forecasts. • The gross profit margin declined due to the imp
Slide 4: Consolidated Statement of Earnings
Consolidated Statement of Earnings Both sales and profits surpassed the plan. FY2023 % FY2024 % Gap FY2024 Vs. plan Gap (Unit: million yen) 1Q YTD total 1Q YTD total (%) 1Q YTD plan （％） Net Sales 10,340 100.0% 11,508 100.0% 1,167 11.3% 11,013 104.5% Gross profit 6,750 65.3% 7,246 63.0% 496 7.3% 7,04
Slide 5: Factors in YoY Changes in Consolidated Operating Income
Factors in YoY Changes in Consolidated Operating Income The operating income increased. The higher-than-expected revenue growth have offset the decrease in gross profit margin due to higher raw material cost, etc., and higher expenses. Increase in gross profit Decrease in due to gross profit higher
Slide 6: Factors in vs. Plan Changes in Consolidated Operating Income
Factors in vs. Plan Changes in Consolidated Operating Income Although a decrease in operating income was anticipated due to the soaring costs of raw materials, the actual results exceeded expectations with a significant increase in sales and cost containment, despite some expense deferrals. (million
Slide 7: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 Agenda 3. Appendix P16 4. Outline of Milbon P25 © 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 income increased above planned. The weak yen boosted overseas revenue growth rate. Exchange Exchange FY2023 FY2024 Actual gap FY2024 Gap Gap (%) *1 rate rate 1Q YTD 1Q YTD rate (%) 1Q YTD plan (Unit: million yen) FY23 1Q FY24 1Q Net
Slide 9: Financial Results by Region: Japan
Financial Results by Region: Japan Haircare and cosmetics products are fueling growth. The impact of ramped-up sales efforts for hair coloring products will likely become apparent from 2Q onward. YoY growth rate of sales by product Quarterly net sales (mil. yen) Quarterly operating income (mil. yen)
Slide 10: Financial Results by Region: Japan Key Strategies
Financial Results by Region: Japan Key strategies Progress up to 1Q Results and outlook • As for “Villa Lodola,” our organic brand, we have strengthened the skills and knowledge of 350 Field Persons across Japan. A full-scale rollout to commence in April. Recovery of hair coloring products sales thr
Slide 11: Financial Results by Region: South Korea
Financial Results by Region: South Korea Sales have been robust, driven by strengthened haircare and perm sales initiatives. Operating income surpassed the plan due to revenue growth and cost containment. YoY growth rate of sales by product Quarterly net sales (mil. yen) Quarterly operating income (
Slide 12: Financial Results by Region: China
Financial Results by Region: China The high demand period for salons preceding the Lunar New Year significantly boosted our sales and profits, surpassing the plan. However, the subsequent decrease in salon visits has introduced uncertainties into the market. YoY growth rate of sales by product Quart
Slide 13: Financial Results by Region: USA
Financial Results by Region: USA Stable growth in mainstay haircare and double-digit sales growth in hair coloring products due to strengthened activities. We are directing investments to enhance hair coloring promotions and spur further growth. YoY growth rate of sales by product Quarterly net sale
Slide 14: Outlook for after 2Q
Outlook for after 2Q Outlook for after 2Q • Steady demand is anticipated for haircare products. Japan • While the demand for hair bleaching design is plateauing, the effects of sales and education activities for hair coloring products strengthened during 1Q, are expected to become apparent from 2Q o
Slide 15: Outlook: Full-year Forecasts
Outlook: Full-year Forecasts While domestic hair coloring products sales and the market conditions in China remain focal points, we currently project an increase in both sales and profits, consistent with our initial fiscal year plan. % FY2024 % Gap FY2023 Gap (Unit: million yen) total Plan total (%
Slide 16: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 3. Appendix P16 Agenda Consolidated Net Sales and Sales Ratio by Product Category Status of Main Brands P17 P18 Sales Growth and Sales Ratio by Category in Japan and Overseas (Local Currency Basis) P21 Status of Capit
Slide 17: 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 11,508 Haircare 5,969 7,370 6,593 8,421 28,355 6,670 6,670 Hair coloring 3,922 4,315 4,193 4,522 16,953 4,044 4,
Slide 18: Status of Haircare Products by Main Brands
(Appendix) Status of Haircare Products by Main Brands Haircare - Aujua Haircare – Global Milbon Robust sales centered on new scalp care product “Presedia”. Sales growth for the brand is being propelled by strong performance Continued expansion of touchpoints in Japan and South Korea. in overseas mar
Slide 19: Status of Hair Coloring Products by Main Brands
(Appendix) Status of Hair Coloring Products by Main Brands Hair coloring – Ordeve Addicthy Hair coloring – Villa Lodola Color In Japan, we’re leveraging eyebrow mascara products to rejuvenate Launch in Hong Kong is set for April. Concurrently, Field Persons in sales. While South Korea’s significant
Slide 20: Status of Cosmetics by Main Brands
(Appendix) Status of Cosmetics by Main Brands 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 annual plan. FY2023 FY2024 FY2023
Slide 21: 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% +9.3% Haircare +9.5% +2.9% +4.0% +4.6% +4.9% +9.1% +9.1% Hair coloring +1.9% (3.5%) (1.6%) +0.3% (0.8%) +
Slide 22: 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% +4.3% Haircare +11.0% +35.7% (7.3%) +15.9% +12.0% +6.2% +6.2% Hair coloring (14.0%) +8.4% (5.2%) (8.5%
Slide 23: Status of Capital Expenditures, etc.
(Appendix) Status of Capital Expenditures, etc. FY2024 FY2024 FY2020 FY2021 FY2022 FY2023 (Unit: million yen) 1Q YTD Plan Capital expenditures 1,917 4,644 4,097 3,151 535 4,258 Depreciation and 1,562 1,777 2,026 2,213 552 2,404 amortization Amount 1,581 1,741 2,074 2,334 548 2,649 R&D exp. % to sale
Slide 24: 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 25: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 Agenda 3. Appendix P16 4. Outline of Milbon P25 © Milbon Co., Ltd. All right reserved. 25
Slide 26: Outline of Milbon
(Appendix) Outline 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 sha
Slide 27: Milbon: Business Model
(Appendix) Outline 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, an
Slide 28: Three Key Points of Our Business Model
(Appendix) Outline 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 hair
Slide 29: Our Growth Trajectory
(Appendix) Outline 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 “Im
Slide 30: Our Main Products
(Appendix) Outline 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 fo
Slide 31: Domestic Hair Salon Market Conditions
(Appendix) Outline 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 Co
Slide 32: Recent Initiatives in Japan, milbon:iD
(Appendix) Outline 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 i
Slide 33: Recent Initiatives in Japan, Two Major Strategies
(Appendix) Outline 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. S
Slide 34: Status of Overseas Expansion
(Appendix) Outline 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 Co
Slide 35: Our Global R&D and Production
(Appendix) Outline 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 base
Slide 36: Our Three Major Overseas Countries
(Appendix) Outline Of Milbon: Our Three Major Overseas Countries Three major countries, South Korea, China, and the US account for nearly 80% of overseas sales South Korea China US Our educational initiatives focused on hair Subsequent to COVID-19, activities for hair We have enjoyed rapid growth tr
Slide 37: Other Countries and Regions
(Appendix) Outline 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 55
Slide 38: Shareholder Returns
(Appendix) Outline 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. 38
Slide 39: ESG Investment Index and External Assessments
(Appendix) Outline Of Milbon: ESG Investment Index and External Assessments ESG investment index to be selected FTSE Blossom Japan Index Series THE INCLUSION OF Milbon Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, : https://www.lseg.com/en/ftse-russell/indices/blossom-japan TRADEMARKS, SER
Slide 40: 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