Milbon Co., Ltd. · TSE:4919
Milbon — FY2024 Earnings Presentation
72 slides from Milbon's earnings presentation, Feb 14, 2025
Slide 1: Financial Results for FY2024
Financial Results for FY2024 (Ending December 31, 2024) Milbon Co., Ltd. (TSE code ： 4919) February 14, 2025 © Milbon Co., Ltd. All right reserved.
Slide 2: Contents
1. Consolidated Financial Results P2 2. Financial Results by Region P7 Contents 3. FY2025 and Mid to Long-Term Strategies P14 4. Appendix P39 5. Overview of Milbon P53 This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between th
Slide 3: Key Points of Financial Results for FY2024
Key Points of Financial Results for FY2024 FY24 Domestic haircare products and business in South Korea continued to drive growth, resulting Results in increased sales and profits, exceeding our plan. • Haircare products, including Aujua, have driven the growth of our domestic business. Both our prod
Slide 4: Consolidated Statement of Earnings
Consolidated Statement of Earnings Consolidated net sales surpassed 50 billion yen for the first time. Both sales and profits exceeded the plan. % % Gap FY2024 Vs. Plan FY2023 FY2024 Gap (Unit: million yen) Total Total (%) Plan （％） Net Sales 47,762 100.0% 51,316 100.0% 3,553 7.4% 50,620 101.4% Gross
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 (751) Logistics (million yen) Increase in +875 expenses gross profit R&D due to Personnel (278) ex
Slide 6: Operating Income - Factors Behind Differences Compared to the Plan
Consolidated Operating Income - Factors Behind Differences Compared to the Plan We utilized the SG&A expenses that were unused in Q3, generally as planned. As previously announced, we recorded inventory write-downs. However, due to strong sales, operating income exceeded the plan. Increase in Travel
Slide 7: Contents
1. Consolidated Financial Results P2 2. Financial Results by Region P7 Contents 3. FY2025 and Mid to Long-Term Strategies P14 4. Appendix P39 5. Overview of Milbon P53 © Milbon Co., Ltd. All right reserved. 7
Slide 8: Net Sales and Operating Income by Region
Net Sales and Operating Income by Region Business in China was affected by the deteriorating macro-economic conditions, but overall results were in line with our plan. The weaker yen boosted overseas sales growth. Exchange Exchange Actual gap FY2024 FY2023 FY2024 Gap Gap (%) Rate Rate Rate*1 (%) Pla
Slide 9: Financial Results by Region: Japan
Financial Results by Region: Japan Haircare products drove the growth, resulting in sales and profits surpassing our plan. Aujua, in particular, has received high praise from the hair salon market for both its product quality and the educational activities provided for hair stylists. YoY Growth Rate
Slide 10: Promoting Smart Salon
Financial Results by Region: Japan / Progress of Key Strategies Key Strategies Progress up to 4Q Results and Outlook FY’23 FY’24 FY’24 Plan Promoting Smart Salon Members 670,000 881,000 870,000 milbon:iD Salons 5,930 6,566 6,500 EC Sales 1,640 mil. yen 1,970 mil. Yen 1,950 mil. yen FY’23 FY’24 FY’24
Slide 11: Financial Results by Region: South Korea
Financial Results by Region: South Korea The performance of each product category was robust, resulting in sales and profits exceeding the plan. We aim to solidify the growing support from young hair stylists by holding events and implementing educational activities in FY2025. YoY Growth Rate of Sal
Slide 12: Financial Results by Region: China
Financial Results by Region: China We focused on helping hair salons adapt their management styles to align with the significant changes in consumer behavior. Consequently, our financial performance is gradually recovering in the current, still uncertain market environment. We will continue our exis
Slide 13: Financial Results by Region: USA
Financial Results by Region: USA Haircare products drove our growth, meeting sales and profit targets. Amid gaining a strong reputation, we increased our personnel to better support distributors and salons. In FY2025, we aim to accelerate growth by enhancing field activities and launching products t
Slide 14: Contents
1. Consolidated Financial Results P2 2. Financial Results by Region P7 3. FY2025 and Mid to Long-Term Strategies P14 Contents • Initiatives in FY2025 • Enhancing Profitability • Earnings Guidance for FY2025 and Revision of Medium-term Management Plan • Long-term Vision 4. Appendix P39 5. Overview of
Slide 15: Today's Message
Today’s Message • In Japan, we will focus on generating high-added value through haircare products and education, enabling hair salons to enhance their sales and strengthen their pricing power. We believe this strategy will lead to increased sales and stronger pricing power for Milbon. • For our ove
Slide 16: FY2024 in Review
FY2024 in Review Both sales and profits exceeded the plan, resulting in a year of steady growth both in Japan and overseas. Japan Hair Care Strong performance, led by take-home products, driving overall growth. Sales of grey coverage color products were steady, while sales of fashion colors struggle
Slide 17: Issues in Hair Salon Management in Japan
Issues in Hair Salon Management in Japan Due to inflation and the declining population, hair salon management is required to improve productivity and pricing power. In light of this situation, we help hair salons elevate the value and pricing of their services. Enhanced customer experiences in servi
Slide 18: Our Initiatives in Japan – Hair Coloring Products
Our Initiatives in Japan – Hair Coloring Products We aim to be chosen by hair salons by proposing high-value-added and higher-priced coloring menus, and offering technical training for hair stylists, supporting the value of the menus. Support Through Products Sales Composition Ratio of Domestic Hair
Slide 19: Our Initiatives in Japan – Supporting Professional Development of Hair Stylists
Our Initiatives in Japan – Supporting the Professional Development of Hair Stylists We aim to strengthen the foundation for promoting take-home products by enhancing salon menu value and prices through educational support and professional development for hair stylists. Overview of the Sommelier Trai
Slide 20: Our Initiatives in Japan – Take-home Products
Our Initiatives in Japan – Take-home Products In haircare, we will introduce high-value-added products featuring the latest research findings. For cosmetics, we will focus on coordinated proposals with hair color while enhancing Imprea to drive repeat purchases. High-value-added haircare products St
Slide 21: Our Initiatives in Japan – Promoting milbon:iD
Our Initiatives in Japan – Promoting milbon:iD We anticipate reaching our target of 1 million registered users one year ahead of schedule. We aim to boost sales of take-home products by promoting milbon:iD, an infrastructure platform designed to enhance purchasing convenience. The Target of EC Sales
Slide 22: Enhancing Convenience of Purchasing Take-home Products Through Smart Salon
Our Initiatives in Japan – Enhancing the Convenience of Purchasing Take-home Products Through Smart Salon As the number of salons expands, both success stories and challenges have emerged. To address this, we will first support all existing Smart Salons to ensure their success, and then aim to re-ex
Slide 23: Expo 2025, Osaka, Kansai, Japan
Expo 2025, Osaka, Kansai, Japan We will showcase our vision of the future hair salon at our booth at the Osaka Healthcare Pavilion and strengthen basic research using the PHR data we acquire, aiming to apply this data to future products. Booth Image and Experience Contents Utilizing Data After the E
Slide 24: Key Overseas Regions
Key Overseas Regions Our key regions are South Korea, the USA, and the EU. We will enhance our investments in these areas to boost market share in South Korea, where profitability and market share are high, and to accelerate sales growth and achieve profitability in the USA and the EU, where the mar
Slide 25: Themes for Strengthening Investment in the USA
Themes for Strengthening Investment in the USA Our presence in the USA is growing, maintaining the #1 in-store share with a distributor based in LA, a trend-setting area. We will strengthen our branding initiatives and increase personnel to drive growth. Product Branding Increasing Personnel A renow
Slide 26: FY2025 and Mid to Long-Term Strategies
1. Initiatives in FY2025 2. Enhancing Profitability FY2025 and Mid to Long-Term Strategies Earnings Guidance for FY2025 and Revision of 3. Medium-term Management Plan 4. Long-term Vision © Milbon Co., Ltd. All right reserved. 26
Slide 27: Why Milbon Can Implement a High-Value-Added Strategy
Enhancing Profitability – Why Milbon Can Implement a High-Value-Added Strategy Our business model and differentiating factors, based on specialization in the hair salon market, enable us to implement a high-value-added strategy. Business Model Focusing on Hair Salons The Reason Hair Salons Choose Us
Slide 28: Enhancing Profitability – Anticipated Effects of the Price Revision
Enhancing Profitability – The Anticipated Effects of the Price Revision We anticipate that the price revision will improve gross profit margin in the second half of the year and beyond. Moving forward, we will consider further price revisions alongside the introduction of high-value-added products t
Slide 29: FY2025 and Mid to Long-Term Strategies
1. Initiatives in FY2025 2. Enhancing Profitability FY2025 and Mid to Long-Term Strategies Earnings Guidance for FY2025 and Revision of 3. Medium-term Management Plan 4. Long-term Vision © Milbon Co., Ltd. All right reserved. 29
Slide 30: Revision of the Medium-term Management Plan Targets (FY2022 to FY2026)
Revision of the Medium-term Management Plan Targets (FY2022 to FY2026) FY2026 FY2026 FY2025 Gap Gap FY2024 Gap Revised Original Target (%) (%) (Unit: million yen) Target Target Net Sales 51,316 54,250 2,933 5.7% 58,000 － 58,000 Japan 38,684 40,850 2,165 5.6% 43,700 － 43,700 Overseas 12,631 13,400 76
Slide 31: Factors Behind Consolidated Operating Income Changes (FY2024 to FY2026)
Factors Behind Consolidated Operating Income Changes （FY2024 to FY2026） We anticipate an operating income of 8,400 million yen and an operating income margin of 14.5% for FY2026, driven by an improved gross profit margin through price revisions and the absence of one-time expenses such as Expo spons
Slide 32: Financial Strategy – Capital Allocation in FY2025
Financial Strategy – Capital Allocation in FY2025 (million yen) Investment ✓ Office relocation and facility development for Growth, • Human Resource Development Center (Odawara) CAPEX • Relocation of the sales office 2,611 ✓ Upgrade of manufacturing machinery ✓ Feature development of milbon:iD・Smart
Slide 33: FY2025 and Mid to Long-Term Strategies
1. Initiatives in FY2025 2. Enhancing Profitability FY2025 and Mid to Long-Term Strategies Earnings Guidance for FY2025 and Revision of 3. Medium-term Management Plan 4. Long-term Vision © Milbon Co., Ltd. All right reserved. 33
Slide 34: Long-term Vision
Long-term Vision We have set a new Long-term Vision of net sales of 100 billion yen and an ROE of 14% or more, to be achieved beyond FY2026. Profit Structure Long-term Reform Vision Review cost structure and enhance capital efficiency Consolidated Net Sales Accelerate Overseas Growth of 100 billion
Slide 35: Long-term Vision – Achieve Stable Growth in Japan
Long-term Vision – Achieve Stable Growth in Japan There is room for growth in sales per Field Person. We will focus on enhancing sales per salon and improving FP activity efficiency through the Smart Salon strategy and product range expansion. Sales per Field Person (FP) Ideas for Increasing Sales p
Slide 36: Long-term Vision – Accelerate Overseas Growth
Long-term Vision – Accelerate Overseas Growth When consolidated net sales reach 100 billion yen, the overseas sales ratio is expected to account for 35% to 40% of total sales. While we anticipate continuous growth in Asia, we believe that the USA and European markets will drive our future growth. Th
Slide 37: Long-term Vision – Profit Structure Reform
Long-term Vision – Profit Structure Reform We aim to achieve an ROE of 14% or more by improving margins through a review of our cost structure and by enhancing capital efficiency Review of Cost Structure Enhancing Capital Efficiency ＜Increasing Gross Profit Margin＞ ＜Share Buyback＞ ✓ Launch high-valu
Slide 38: Financial Strategy – Long-term Capital Allocation Policy
Financial Strategy – Long-term Capital Allocation Policy ✓ Prioritizing investment in growth, we will add a fundamental policy of progressive dividends to our existing target dividend payout ratio of 50% to enhance shareholder returns. ✓ We will allocate surplus funds to share buybacks with the aim
Slide 39: Agenda
1. Consolidated Financial Results P2 2. Financial Results by Region and Outlook P7 3. FY2025 and Mid to Long-Term Strategies P7 4. Appendix P39 Factors Behind YoY Changes in Consolidated Operating Income (Quarterly P40 Agenda Basis) Factors Behind Changes Compared to the Consolidated Operating Incom
Slide 40: Factors Behind YoY Changes in Consolidated Operating Income (Quarterly Basis)
Factors Behind YoY Changes in Consolidated Operating Income (Quarterly Basis) Operating income for Q4 decreased year-over-year due to deferred event timings and bonus payments for achieving the plan. However, full-year income increased compared to the previous year. Increase in gross profit due to M
Slide 41: Factors Behind Changes Compared to the Operating Income Plan (Quarterly Basis)
Factors Behind Changes Compared to the Consolidated Operating Income Plan (Quarterly Basis) Although Q4 operating income was below plan due to the utilization of deferred expenses and inventory write-downs, full-year income exceeded the plan. Increase in gross profit Decrease in due to gross profit
Slide 42: Consolidated Net Sales and Sales Ratio by Product Category
Consolidated Net Sales and Sales Ratio by Product Category (FY2024 to FY2025) FY2023 FY2024 FY2025 (Unit: million yen) 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Target Net Sales 10,340 12,362 11,446 13,612 47,762 11,508 13,017 12,467 14,322 51,316 54,250 Haircare 5,969 7,370 6,593 8,421 28,355 6,670 8,012 7,5
Slide 43: Net Sales and Operating Income by Region (FY2024 to FY2026)
Net Sales and Operating Income by Region (FY2024 to FY2026） FY’25 Actual gap FY’26 FY’26 FY’24 Gap Gap (%) Gap (%) (Unit: million yen) Target Rate*1 (%) Target Original Target Net Sales 38,684 40,850 2,165 5.6% 5.6% 43,700 43,700 － Japan Operating Income 5,796 6,000 203 3.5% － 7,118 8,200 (13.2%) Ma
Slide 44: Forex Assumption and Sensitivities
Forex Assumption and Sensitivities Forex Assumption FY2026 Original FY2024 FY2025 FY2026 Assumption Results Assumption Assumption (Reference) KRW 0.111 yen 0.108 yen 0.105 yen 0.093 yen RMB 21.26 yen 20.5 yen 20.0 yen 17.0 yen USD 152.24 yen 145.0 yen 140.0 yen 112.0 yen Forex Sensitivities (million
Slide 45: Status of Main Brands - Haircare Products
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 overseas markets,
Slide 46: Status of Main Brands - Hair Coloring Products
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 sales and educa
Slide 47: Status of Main Brands - Cosmetics
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 FY2023 FY2024 (U
Slide 48: Sales Growth and Sales Ratio by Category in Japan and Overseas
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% +3.0% +6.0% Haircare +9.5% +2.9% +4.0% +4.6% +4.9% +9.1% +8.9% +13.4% +7.1% +9.4% Hair Coloring +1.9% (3
Slide 49: Sales Growth and Sales Ratio by Category in Japan and Overseas
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% +2.0% (2.7%) Haircare +11.0% +35.7% (7.3%) +15.9% +12.0% +6.2% (3.3%) +8.3% +3.4% +3.6% Hair Colori
Slide 50: Status of Inventory
Status of Inventory (million yen) Decrease due Increase due to seasonality to seasonality <Increase Factor> and inventory (launch of new ・ Meet demand before next year’s loss products) price revision Increase due ・ Prepare for new to seasonality products. (launch of new products) <Decrease Factor> ・
Slide 51: Status of Capital Expenditures, etc.
Status of Capital Expenditures, etc. FY2025 FY2020 FY2021 FY2022 FY2023 FY2024 (Unit: million yen) Plan Capital Expenditures 1,917 4,644 4,097 3,151 2,865 2,611 Depreciation and 1,562 1,777 2,026 2,213 2,288 2,354 Amortization Amount 1,581 1,741 2,074 2,334 2,452 2,829 R&D exp. % to Sales 4.4 4.2 4.
Slide 52: The Number of Field Persons (FP)
The Number of Field Persons (FP) 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 FY2023 FY2024 As of December 31, 2024 Japan 328.2 335.4 350.2 361.4 44
Slide 53: Contents
1. Consolidated Financial Results P2 2. Financial Results by Region P7 Contents 3. FY2025 and Mid to Long-Term Strategies P14 4. Appendix P39 5. Overview of Milbon P53 © Milbon Co., Ltd. All right reserved. 53
Slide 54: Overview of Milbon
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 share Approx.
Slide 55: Overview of Milbon: Business Model
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, and products
Slide 56: Three Key Points of Our Business Model
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 hair salons at
Slide 57: Overview of Milbon: Our Growth Trajectory
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 (FY2024) Launched “milbon:iD”, our official online stores Launched “Imprea”, sal
Slide 58: Overview of Milbon: Our Main Products
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) (FY2024) Haircare Products sold for retail i
Slide 59: Domestic Hair Salon Market Conditions
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 Community Ch
Slide 60: Our Recent Initiatives in Japan, milbon:iD
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 in the BtoB
Slide 61: Our Recent Initiatives in Japan, Two Major Strategies
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. Smart Salo
Slide 62: Status of Overseas Expansion
Overview of Milbon: Status of Overseas Expansion We conduct business across the world, 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., Ltd. MILBON USA, INC.
Slide 63: Our Three Major Overseas Countries
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 triggered
Slide 64: Other Countries and Regions
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 12.8% Kong) 35.8% FY2024 Sales in Other Countries and Regions 2.98 billion yen ASEAN 51.4% © Mil
Slide 65: Our Global R&D and Production
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 Bases Collabor
Slide 66: Shareholder Returns
Overview of Milbon: Shareholder Returns We have set a dividend payout ratio target of 50% and will increase or maintain dividends without reducing them, aiming for higher dividends in line with profit growth. (Yen) FY2025 Plan 88 yen © Milbon Co., Ltd. All right reserved. 66
Slide 67: Corporate Governance Structure
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. 67
Slide 68: Compensation for Board Members
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 duties wit
Slide 69: Status of Dialogues with Shareholders (FY2024)
Overview of Milbon: Status of Dialogues with Shareholders (FY2024) We held a total of 163 meetings throughout the year, led primarily by the Managing Executive Director in charge of Finance and IR. During interim and year-end results reporting, the President and CEO actively participated in IR meeti
Slide 70: Status of Dialogues with Shareholders (FY2024)
Overview of Milbon: Status of Dialogues with Shareholders (FY2024) In response to the various opinions and requests from institutional investors and other shareholders, we outlined the main examples of changes in our actions and disclosures resulting from these dialogues. ■Incorporation of Feedback
Slide 71: ESG Investment Index and External Assessments
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 OF Milbon C
Slide 72: 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