Consolidated Financial Results
for the Three Months Ended March 31, 2023 (Japanese GAAP)May 11, 2023
Company name:
Stock code:

Earth Corporation
4985

Representative:

Katsunori Kawabata, President and Representative Director, Chairman of the Board of Directors ofeach group company
Tsuyoshi Mitsuzuka, Senior Executive Officer, Director General, Group Management Headquarters+81-3-5207-7458

Contact:
Tel:

Listing Stock Exchange: Tokyo
URL: https://corp.earth.jp/en/index.html

Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:1.

May 12, 2023—
Yes
Yes (For securities analysts and institutional investors)

Consolidated Financial Results for the Three Months Ended March 31, 2023
(January 1, 2023 to March 31, 2023)(1) Consolidated operating results
Sales(Percentages indicate YoY change)
Net income attributable
Ordinary income
to owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Three months ended
40,819
5.7
5,532
3.9
5,645
(0.1)
3,889
3.3
March 31, 2023
Three months ended－
38,603
5,323
5,648
3,766
－
－
－
March 31, 2022
Note: Comprehensive income for the three months ended March 31, 2023 was 4,243 million yen (6.2%), and comprehensive income forthe three months ended March 31, 2022 was 3,995 million yen (－%)
Net income per share

Diluted net income
per share

Yen

Yen

Three months ended
176.28－March 31, 2023
Three months ended
170.89－March 31, 2022
Note: The Company adopted the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan, Statement No.
29) from the beginning of the fiscal year ended December 31, 2022. Figures for Q1 of the fiscal year ended December 31, 2022
are based on the new accounting standard, and no year-on-year comparatives have been provided.

(2) Consolidated financial position
Total assets
Million yen

Net assets
Million yen

Equity ratio%

Three months ended
146,520
69,428
43.9
March 31, 2023
Fiscal year ended
124,489
68,01850.4
December 31, 2022
Reference: Equity capital amounted to 64,376 million yen as of March 31, 2023 and 62,794 million as of December 31, 2022.

2.

Dividends
Dividend per share
End of Q1

End of Q2

Yen

End of Q3

Yen

Year-end

Yen

Total
Yen

Yen

Fiscal year ended
0.00
118.00－－December 31, 2022
Fiscal year ending－
December 31, 2023
Fiscal year ending
December 31, 2023
0.00
118.00－(forecast)
Note: No revisions have been made to the Company’s most recently announced dividend forecast.

3.

118.00118.00Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2023
(January 1, 2023 to December 31, 2023)

Sales(Percentage indicates YoY change for full-year and quarters)
Net income attributable
Net income
Ordinary income
to owners of parent
per share

Operating income

Million yen%

Million yen%

Million yen%

Million yen

%

Yen

1H

93,5004.7

10,800(9.6)

10,900(14.3)

6,900(19.7)

312.73Full-year

160,000

5.0

8,000

7.6

8,300

2.0

5,400

1.8

244.75

Notes: No revisions have been made to the Company’s most recently announced consolidated earnings forecast.

*Notes(1) Changes in significant subsidiaries during the period under review:
None(Transfers of specified subsidiaries associated with changes in the Company’s scope of consolidation)
Newly subsidiaries added:
None
Subsidiaries excluded:
None(2) Distinctive accounting methods applied when preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:Yes
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None(4) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury stock)

As of March 31,
2023

22,077,500

As of December
31, 2022

22,077,500

2. Treasury shares outstanding

As of March 31,
2023

13,782As of December
31, 2022

13,782

3. Cumulative average number ofsharesThree months
ended March 31,
2023

22,063,718

Three months
ended March 31,
2022

22,039,961*The financial information in this quarterly report is not subject to review by certified public accountants or auditing firms.
*Appropriate use of earnings forecast and other special notes
The earnings forecasts and other forward-looking statements contained in this document are based on information currently available
to the Company, and certain assumptions it considers reasonable, but are not intended to be a promise that the Company will achieve.
Actual results may vary materially from forecasts due to a variety of factors. For more information regarding assumptions made when
formulating earnings projections and matters to note when using these projections, please see “1. Qualitative Information on Quarterly
Financial Performance (3) Explanation of Consolidated Earnings Forecasts and Other Projections” on page four of the accompanying
materials.
(How to obtain supplementary materials on quarterly financial results)
The Company plans to hold a financial results briefing session for analysts and institutional investors on Thursday, May 11, 2023.
Supplementary materials on financial results to be used at the briefing will be posted on the Company’s website on the day of thebriefing.

Accompanying Materials ― Contents

1. Qualitative Information on Quarterly Financial Performance ............................................................................................................ 2(1) Explanation of Operating Results..................................................................................................................................................... 2(2) Explanation of Financial Position .................................................................................................................................................... 4(3) Explanation of Consolidated Earnings Forecasts and Other Projections .......................................................................................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes ..................................................................................................... 5(1) Consolidated Balance Sheet ............................................................................................................................................................. 5(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income........................................................... 7
Consolidated Statement of Income .................................................................................................................................................... 7
Consolidated Statement of Comprehensive Income........................................................................................................................... 8(3) Notes to Quarterly Financial Statements .......................................................................................................................................... 9(Notes to going concern assumptions) ............................................................................................................................................... 9(Notes in the event of significant changes in shareholders’ equity) ................................................................................................... 9(Changes to accounting policies) ....................................................................................................................................................... 9―1―

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During the first quarter of the fiscal year ending December 31, 2023, the Japanese economy reopened fully as restrictions on
activity to reduce the spread of COVID-19 were eased. However, inflation has affected consumer sentiment recently, resulting in
an increasingly defensive lifestyle mindset. Furthermore, the downtrend in the Japanese yen continues, and despite signs that some
raw material prices are starting to settle down, cost increases due to sharply higher energy prices are ongoing, and we expect theoperating environment to remain challenging.
In Asia, a focus region for the Earth Group’s overseas operations, China ended its zero-COVID policy in January 2023, and there
are clear signs of economic recovery, such as growing personal consumption. In the ASEAN region, despite concerns of slumping
consumption in some countries due to inflation, economic growth remains strong following its post-COVID-19 recovery.
Under these economic conditions, the Company has been operating in line with the strategies set out in our medium-term
management plan, Act For SMILE–COMPASS 2023–. In accordance with the Company’s corporate philosophy, living in harmony
with the Earth, the plan includes four fundamental policies: Reform Corporate Compass & Infrastructure, Expand Profit Foundationin Asia, ESG/Open Innovation, and Generate Cost Synergies. Due to the impact of significant changes in the external environment,
we had flagged a review of the plan’s numerical targets, but solid results from our initiatives are starting to flow through, so we
intend to maintain our stated direction and strategies, and will continue with our efforts in the current fiscal year.
In the first quarter of the fiscal year, Group sales amounted to 40,819 million yen (up 5.7% year-on-year). Sales of household
insecticides and repellents got off to a strong start in the New Year due to warm temperatures in Japan and the impact of price hikes,
and higher contract numbers and contract values drove growth in the General Sanitary Management Business. Turning to profits,
despite the impact of sharply higher raw material prices and increased logistics costs, operating income for the quarter came to5,532 million yen (+3.9% year-on-year), ordinary income to 5,645 million yen (-0.1% year-on-year), and net income attributable toowners of parent to 3,889 million yen (+3.3% year-on-year).
Results by segment are as follows.
[Household Products Business]
In the Household Products Business, the Company tapped into underlying demand with the launch of high-value-added products
and updated our existing product lineup to improve product value. We sold products at prices commensurate with their value andran effective promotional campaigns, using social media, for example. We also worked to reduce product and selling costs toenhance profitability. Overseas, we made aggressive and effective allocations of business resources with a focus on countries suchas Thailand and Vietnam in Southeast Asia, in a bid to improve profitability and expand in scale.
In Q1, the Household Products Business reported segment sales of 37,318 million yen (+4.6% year-on-year) due to higher salesof household insecticides and repellents since the start of the year amid favorable weather and contributions from new products. On
the profit front, despite an increase in infrastructure costs accompanying ongoing rises in raw material prices from the previous
fiscal year and higher energy prices, as well as increased logistics costs, segment income (operating income) was 5,276 million yen(+6.4% year-on-year) thanks to higher sales.

―2―(Household Products segment results)(Millions of yen)

Consolidated Q1 results
for the fiscal year ended
December 31, 2022

Consolidated Q1 results
for the fiscal year ending
December 31, 2023

YoY change(amount)

Household insecticides and repellents

17,684

19,503

1,819

10.3%

Household products

15,834

15,522(311)(2.0%)

Oral hygiene products

1,769

1,867

97

5.5%

Bath salts

6,201

6,174

(26)

(0.4%)

Other household products

7,863

7,480

(382)

(4.9%)

YoY change(percent)

Pet products and others

2,150

2,291

140

6.5%

Total sales

35,66937,318

1,648

4.6%

Segment income (operating income)
4,960
5,276
315
6.4%
Notes: Sales include internal sales and transfers made within and between segments, which amounted to 3,454 million yen during
Q1 of the fiscal year ended December 31, 2022 and 3,049 million yen during Q1 of the fiscal year ending December 31,
2023.
Results by product category are as follows.
Insecticides and repellents
Temperatures have been high across Japan since the start of the year, driving growth in sales of products for flies, mosquitoes,
and cockroaches. Also contributing to sales growth were selling products at appropriate prices (including impact of pricerevisions) and the launch of products with a preventative angle, such as MAMO ROOM Essence bug repellent sticks and the Daniga Hoi Hoi series of mite trap sheets. Overseas, sales continued to grow, primarily in Thailand and Vietnam, and Earth Homecare
Products (Philippines), Inc., which was made a subsidiary in the previous fiscal year, also contributed to sales.
As a result, sales for this category were 19,503 million yen (+10.3% year-on-year).
Household products
In oral hygiene products, sales of all-in-one mouthwash Mondahmin Premium Care increased amid improving awareness oforal health and the impact of the COVID-19 pandemic, resulting in sales of 1,867 million yen (+5.5% year-on-year).
The use of bath salts became further entrenched following the COVID-19 pandemic, with strong sales of Nihon no Meito(bubble bath). The BARTH brand of neutral bicarbonate bath salts acquired through business transfer also contributed to sales.
However, the market remains below year-ago levels, and sales were 6,174 million yen (-0.4% year-on-year).
In other household goods, partly due to the impact of social media promotional campaigns, a new household cleaning product,
Kurukuru Baburun Ofuro Marugoto, contributed to sales, and sales of products in the Sukki-ri! range remained strong. However,following changes to thoughts on wearing masks, sales of Kaiteki Guard Pro and Be Style household masks were sluggish, andsales came to 7,480 million yen (-4.9% year-on-year).
Sales in this category amounted to 15,522 million yen (-2.0% year-on-year).
Pet products and others
Sales of pet products and other miscellaneous products were 2,291 million yen (+6.5% year-on-year), on increased sales of pet
products due to growing demand for items such as cat litter due to a rising number of pets.
[General Environment and Sanitation Business]
The core customers of our General Environment and Sanitation Business (primarily companies involved in the food,
pharmaceutical, and packaging material industries) face stringent hygiene management requirements to prevent food poisoning andcontamination with foreign substances. They thus have growing needs for Earth Corporation’s high-quality hygiene management
services that leverage our specialized knowledge, technologies, and expertise.

―3―

In these circumstances, we stepped up our investment in building an internal framework that can serve customer needs byinstalling and developing systems geared toward human resources development and business process streamlining. At the sametime, we worked to maintain and expand our contract numbers by providing hygiene management systems distinguished bystrengthened technological capabilities, including through collaborative industry, academia, and public-sector research. We targeted
the pharmaceutical and regenerative medicine industries in particular, and continued strengthening audit and consulting operations
related to food safety management.
Sales in the General Environment and Sanitation Business came to 6,590 million yen (+2.7% year-on-year) in Q1, while segment
income (operating income) was 262 million yen (-12.4% year-on-year) due to increased costs in annual contracts, which are themain format for the Company.
(Millions of yen)

Consolidated Q1 results
for the fiscal year ended
December 31, 2022

Consolidated Q1 results
for the fiscal year ending
December 31, 2023

YoY change(amount)

YoY change(percent)

Sales

6,414

6,590

175

2.7%

Segment income (operating income)

299

262

(37)

(12.4%)

Notes: 1. Sales include internal sales and transfers made within and between segments, which amounted to 27 million yen in Q1of the fiscal year ended December 31, 2022 and 38 million yen in Q1 of the fiscal year ending December 31, 2023.

(2) Explanation of Financial Position(1) Assets, Liabilities and Net Assets
As of March 31, 2023, total assets amounted to 146,520 million yen, up 22,030 million yen from December 31, 2022. This wasprimarily due to increased cash and deposits, trade receivables, inventories, and intangible assets.
Meanwhile, total liabilities as of March 31, 2023 came to 77,092 million yen, up 20,621 million yen from December 31, 2022.
This was mainly due to increases in accounts payable–trade and short-term borrowings, which offset decreases in accounts payable–
other and deferred tax liabilities.
Net assets amounted to 69,428 million yen as of March 31, 2023, rising 1,409 million yen compared to December 31, 2022. Thiswas mainly due to the booking of net income attributable to owners of parent, despite a decrease in retained earnings due to dividend
payouts.
The Company’s equity ratio was 43.9% as of March 31, 2023, down 6.5 points from December 31, 2022.
(2) Cash Flows
The Company has not prepared a statement of cash flows for the period ended March 31, 2023, so disclosure is omitted.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
The Company has made no changes to its full-year earnings forecast for the financial year ending December 31, 2023, which
was announced on February 13, 2023.
This forecast is based on information available to the Company at the time of its formulation. Actual results may differ
substantially from the projections included within due to potential changes affecting a variety of factors.

―4―

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet
Fiscal year ended
December 31, 2022
(as of December 31, 2022)(Millions of yen)Three months ended
March 31, 2023
(as of March 31, 2023)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary
operatingMerchandise and finished goods

14,772
22,321

15,76532,933

1,842

2,160

25,617

32,104Work in process
Raw materials and supplies

1,435
5,200

1,382
5,142

Other
Allowance for doubtful accounts

2,795
(22)

3,240
(37)

Total current assets

73,962

92,69130,174(16,336)

30,320(16,645)

Buildings and structures, net

13,837

13,675

Machinery, equipment and vehicles

16,77016,959

Accumulated depreciation and impairment(12,785)(13,093)

Machinery, equipment and vehicles, net

claims-Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment

3,985

3,866

Land

7,787

7,801

Leased assets
Accumulated depreciation and impairment

320
(131)

346
(137)

Leased assets, net

188

208

Construction in progress
Other

2,114
9,499

2,537
9,597

Accumulated depreciation and impairment(7,927)(8,097)

Other, net

1,571

1,499

29,48329,589Intangible assets
Trademark right

Total property, plant and equipment

1,233

1,202

Software
Goodwill

1,432
105

1,361
2,341

Customer-related intangible assets
Other

1,643
940

1,627
1,268

Total intangible assets

5,355

7,802

Investment securities
Retirement benefit asset

5,261
7,336

5,160
7,425

Deferred tax assets
Other

1,001
2,105

1,750
2,119

Allowance for doubtful accounts

(16)

(18)

Total investments and other assets

15,68816,43750,52753,828124,489

146,520

Investments and other assets

Total non-current assets
Total assets―5―Fiscal year ended
December 31, 2022
(as of December 31, 2022)(Millions of yen)Three months ended
March 31, 2023
(as of March 31, 2023)

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating

24,236
11,28824,81914,534

Short-term borrowings
Current portion of long-term borrowings

1,000
1,200

18,000960

Accounts payable - other
Income taxes payable

7,477
426

4,897
2,329

Accrued consumption taxes
Provision for bonuses

612
240

323
1,477

Refund liabilities
Other

1,010
5,849

897
6,501

Total current liabilities

53,34174,741

Deferred tax liabilities
Retirement benefit liability

1,815
314

1,046
304

Asset retirement obligations
Other

479
520

480
519

Non-current liabilities

Total non-current liabilities

3,129

2,350

56,47077,092

Shareholders' equity
Share capital

9,895

9,895

Capital surplus
Retained earnings

9,917
39,897

9,918
41,183

Treasury shares

(79)

(79)

Total liabilities
Net assets

59,63160,918

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

Total shareholders' equity

1,109

1,190

698

964

Remeasurements of defined benefit plans

1,354

1,303

Total accumulated other comprehensive income

3,163

3,457

5,224

5,052

Non-controlling interests
Total net assets
Total liabilities and net assets―6―

68,01869,428124,489

146,520

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
Three months ended
March 31, 2022
(from January 1, 2022
to March 31, 2022)
38,603
21,236
17,367(Millions of yen)Three months ended
March 31, 2023
(from January 1, 2023
to March 31, 2023)
40,81923,067
17,752

1,557
698
289
15
3,325
939
251
346
423
362
664
3,169
12,043

1,705
707
252
16
3,509
944
314
394
21
365
711
3,276
12,220Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Commission income
Rental income from buildings
Other

5,323

5,532

33
3
248
4
11
31

26
3
31
6
11
47

Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses

333

126

7
1
8

9
3
13

5,648

5,645

0
－
0

0
3

3
26
－
0

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Transportation and storage costs
Advertising expenses
Promotion expenses
Provision of allowance for doubtful accounts
Salaries and allowances
Provision for bonuses
Travel and transportation expenses
Depreciation
Amortization of goodwill
Rent expenses on land and buildings
Research and development expenses
Other
Total selling, general and administrative expenses

Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of investment securities

4

Total extraordinary losses
Net income before income taxes

30
5,617

0
5
7
－
13
5,636

Income taxes - current
Income taxes - deferred

2,087
(331)

2,232
(543)

Total income taxes
Net income

1,756
3,861

1,688
3,947

Net income attributable to non-controlling interests
Net income attributable to owners of parent

94
3,766

58
3,889

―7―

Consolidated Statement of Comprehensive Income

Net income

Three months ended
March 31, 2022
(from January 1, 2022
to March 31, 2022)
3,861(Millions of yen)Three months ended
March 31, 2023
(from January 1, 2023
to March 31, 2023)
3,947

Other comprehensive income
Valuation difference on available-for-sale securities

(370)

82

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

578
(73)

268
(55)

Total other comprehensive income

133

295

3,995

4,243

3,903

4,184

91

59

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests―8―

(3) Notes to Quarterly Financial Statements(Notes to going concern assumptions)None to be reported.

(Notes in the event of significant changes in shareholders’ equity)
None to be reported.

(Changes to accounting policies)
Effective from the beginning of the first quarter of the year ending December 31, 2023, the Group has adopted the
Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Statement No. 31; June 17, 2021). In
accordance with the transitional treatment stipulated in Paragraph 27-2 of Implementation Guidance on Accounting Standard
for Fair Value Measurement, the Group has decided to prospectively apply the new accounting policy prescribed in the
Accounting Standard for Fair Value Measurement. Please note that this has no impact on the Group’s quarterly consolidated
financial statements.

―9―