Earnings briefing materials for 2Q ofthe fiscal year ending December 2022
08/05/2022
update; 08/18/2022

Executive Summary ①
results calculated and adjusted retroactively• Financial results overview * LFYusing the new Accounting Standard‣ Sales: 89.3 billion yen; vs. the forecast: - 2.4%; YoY* : + 2.0%
‣ Operating Income : 11.9 billion yen; vs. the forecast: - 10.2%; YoY*: - 11.7%‣ The initial full year forecast for FY12/2022 remains unchanged at this point• Overview by category‣ Insecticides & repellents : Despite strong shipments of new products
retailing at high price points, the overall market was sluggish due toweather factors‣ Household products : Progress mostly according to plan, with the categoryof other household products driving sales growth• Overview of the Overseas business‣ China‣ ASEAN: Sluggish performance due to the impact of lockdown measures: Strong performance, especially in Thailand and Vietnam.
Accelerated expansion in our new markets of Malaysia and the Philippines© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 1
using the new Accounting Standard

Executive Summary ②• Impact of soaring material prices and currency fluctuations‣ Impact amount on 2Q forecast : 300 million yen‣ Estimate of impact amount on full year FY12/2022 forecast : approx.1.0 billion yen‣ In case of the continuation of the current forex trend, we expect an impact amountof 300 - 400 million yen on the full year FY12/2022 forecast.

• Outlook for FY12/2022‣ The forecast for FY12/2022 remains unchanged at this point© Earth Corporation All Rights Reserved.

2

FY12/2022 2Q Results

Financial Result Highlights
 As of the end of 2Q, the Earth Corporation registered an increase in sales accompanied by adecrease in profits. Operating income fell short of the plan by 10%
 The impact of soaring raw material prices and currency fluctuations is gradually starting to be seen
Following the adoption of the new AccountingStandard for Revenue Recognition

Realized

Sales

Gross Profit

893.0

399.3

Vs.
Forecast(Unit: 0.1 billion JPY)

YoY*

Topics
•

97.6%

94.4%

102.0%

99.8%•

Sales of insecticides & repellents fell short of company expectations,due to the impact of a generalized market slowdown
Strong performance in ASEAN, in the Overseas business•

Impact from soaring raw material prices & currency fluctuations:- 300 million yen•

Sales mix•

Within an adequate range, as formulated in the forecast•

We registered a quarter spillover for some SG&A items; the company
is considering adjusting for this amount through to the end of the FY•

Underperformance of 1.36 billion yen vs. 2Q forecast

SG&A
Expenses

279.9

Operating
Income

119.4

89.8%

88.3%

•

Prepare and execute recovery measures in 2H

Profit
Before Tax

126.6

95.2%

91.5%

•

Foreign exchange gain: 530 million yen

96.5%© Earth Corporation All Rights Reserved.

105.6%* LFY results provided for reference purposes, calculated retroactively 4
using the new Accounting Standard

Total Sales / Product Returns / Sales Deductions(Unit: 0.1 billion JPY)
 While total sales grew YoY, it fell short of the forecast
 Product returns increased both YoY and vs. the forecast.
However, as of the end of 1H, the impact from this has not been a reason for concern.
 The ratio of sales deductions to total sales rose somewhat versus the plan.
However, these results are mostly in line with company expectations.

Total Sales / Product Returns

Sales Deductions (Prev. Promotion Expenses, etc.)

Total Sales

Product Returns

200

1,250

1,054.5

1,101.5

1,075.7

1,000

162.3

162.5

164.1

Last FY (Realized)*

Current FY(Forecast)

Curent FY(Realized)

150

750
100

500
50

250

16.7

16.9

20.6

Last FY (Realized)*

Current FY(Forecast)

Current FY(Realized)

00© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 5
using the new Accounting Standard

Sales By Segment*To outside customers (excludes internal eliminations)(Unit: 0.1 billion JPY)

 Sales of insecticides & repellents were impacted by sluggishness in the overall market,
decreasing YoY as of the end of 2Q, and falling short of the forecast for the same period
 Strong performance overall for the product segments of household products and total
health care system
400.8

Last FY (Realized)*

422.6

Current FY (Forecast)
Current FY (Realized)

404.6

168.9
103.3
39.2
38.4 38.0

Insecticides &Repellents

107.6
100.6

Oral Hygiene
products

Bath salts

137.2

169.2
151.5

43.6
45.7

42.6

135.0
134.9

Other Householdproducts

Pet supplies, etc.

Total Health Care
System

YoY diff.*

- 3.8

＋0.7

＋2.8

＋17.4

- 2.1

＋2.3

Diff. vs.
forecast- 21.8

＋1.1

- 4.2

- 0.2

＋1.0

＋2.2

© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 6
using the new Accounting Standard

Status Of The Insecticides & Repellents
Segment (Domestic)
Market Trends

Flagship Products - Trends（℃）(Unit: 0.1 billion JPY)
120

2020 Sales (Weekly)
2022 Sales (Weekly)
2021 Max. Temp.

2021 Sales (Weekly)2020 Max. Temp.
2022 Max. Temp.

• EARTH NO MAT

40

Vs. forecast

100
30
80
20

• MUSHI YOKE NET EX

60
10

88%

Vs. forecast

89%

40

20

As of June 30: YoY

96.4%

0

0
-10
2/28 3/14 3/28 4/11 4/25 5/9 5/23 6/6 6/20 7/4 7/18 8/1 8/15 8/29 9/12 9/26

 Uses against flies, mosquitoes, and cockroaches
decreased YoY
 Strong sales of insecticides targeting ticks & mites,
and harmful insects, as well as of repellents

New Products - Trends• MAMOROOM
Vs. forecast• ZERO de KNIGHT

Earth Corporation Market Share (As of June 30)

56.0% ➡ 56.4%© Earth Corporation All Rights Reserved.

178%

Vs. forecast

230%
7

COGS – Status Overview
 Costs have soared, primarily for raw materials derived from palm oil and materials tied to the priceof crude oil We have also been impacted by forex fluctuations when procuring goods overseas (including theimpact on sea freight fares)[Major raw & packaging materials
experiencing soaring prices]

Impact of soaring raw material prices
Diff. vs. full year
FY12/2022 forecast

Diff. vs. 2Q forecast•

Profit Impact Amount

Profit Impact Amount- 300 million yen - 1.0 billion yen
Foreign exchange – Diff. vs. initial forecast
Currency

Rate(June 30)

Forecast

Vs. Forecast

RMB

17.15

➡

20.38

＋18.8%

USD

111.00➡

136.68＋24.3%

THB

3.38

➡

3.85

＋13.9%

VND

0.00505➡

0.00583＋15.4%© Earth Corporation All Rights Reserved.

•••

Concentrated glycerin (MONDAHMIN; bathsalts)
Succinic acid; Sodium bicarbonate (bath salts)
LPG (aerosols)
Resins (Used for packaging, film wrapping,etc. across a wide range of products)

Impact from foreign currency fluctuations•

The greatest impact has been fromfluctuations in the RMB exchange rate, since
RMB/JPY has the highest transaction volume
for the Earth Corporation•

Should exchange rates remain at current
levels, this could mean costs 300 – 400
million yen higher than forecast
8

SG&A Expenses – Status Overview(Unit: 0.1 billion JPY) As of the end of 2Q, for the most most, SG&A expense items remained in an adequate
range, as formulated in the forecast
 For the majority of items that fell below the forecast, this was due to a spillover in thetiming of recognition
2Q FY12/2021 2Q FY12/2022 2Q FY12/2022

Realized*

Forecast

Realized

Vs. Forecast

TopicsPoints

Personal expenses

96.8

104.0

101.7

▲ 2.2

Shipping costs

21.5

23.2

23.1

0.0

Storage costs

12.2

13.2

13.1

▲ 0.1

Advertising expenses

42.0

47.0

42.7

▲ 4.3 < than expected(spillover in execution timing vs. the forecast)

Sales promotion expenses

6.4

4.9

5.9

0.9

R&D expenses

13.4

15.3

14.2

▲ 1.0

Depreciation expensess

6.1

6.8

7.1

0.2

Goodwill amortization

9.5

4.3

4.2

▲ 0.1 Goodwill amortization for BATHCLIN CORP ended in 1Q 2022

Travel&transportation expenses

5.0

6.9

5.9

▲ 1.0

Entertainment expenses

1.4

2.8

2.6

▲ 0.2

Comission paid

7.1

7.4

6.2

▲ 1.2

Sales comissions

2.1

6.5

6.6

0.0

Miscellaneous expenses

3.4

4.0

3.4

▲ 0.6

Others

38.2

43.7

43.2

▲ 0.4

Total

265.1

290.0

279.9

▲ 10.0© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 9
using the new Accounting Standard

Overseas Results（Including cross-border EC)(Unit: 0.1 billion JPY)

 Sales YoY* : 115% Strong performance, primarily in Thailand and Vietnam
 Slight decrease in profit margin, due to a YoY decrease in export sales from Japan While the lockdown in Shanghai has effectively been lifted, a full recovery is yet tomaterialize
Overseas Sales (2Q)
Exports/Cross-border EC← Previous Standard

Overseas OI (Simple Sum)
Current Standard →

22.2%

China
80

80.0

Malaysia

66.7

Vietnam
60

53.6
48.1

40

20

20

16.7
15.4

Thailand

38.5

69.4

7.9

17.0

20.0

9.8

16.6

11.5

9.4

11.6

12.6

19.2

17.2

14.9

15

16.5%
13.2

0.9
17.3

16.3

9.9

16.2

Operating
IncomeOperating
Income Margin

10

24.1

12.7
20.5

15.3

16.9

5

22.1

0

0
2017

2018

2019

© Earth Corporation All Rights Reserved.

2020

2021

2022

2021

2022

* LFY results provided for reference purposes, calculated retroactively 10
using the new Accounting Standard

Overseas Results (Status By Country: China)
Effective YoY Sales On A Local Currency Basis : 78.7%

Local Subsidiary Results* (0.1 B JPY)

Sales
20
OI Margin

17.3

•

China

15

10

10.6%

5

•
0.1%

0

21.2Q

Measures In 2H

Progress Status Vs. The Forecast
16.2

22.2Q

The lockdowns caused a series of irregularsituations, such as a paralysis in
distribution and logistics and some of ourclients and trading partners experiencing
financial difficulties
We aimed to expand sales in our EC
channel. Although results for the
618 event were weak overall,
we delivered YoY sales growth•

Planned expansion in anticipation of theend of the COVID-19 pandemic•

Effective sales promotion premised on
securing revenue•

Continue enhancing our EC channel
Expand sales through the W11 event(Reference) Impact Due To Lockdown Measures Lockdown period: Late March – late May (Effectively 2 months)- Paralysis in distribution/logistics and inability to access our warehouses- EC channel : Difficulties in distribution/logistics prevented consumers from being able to makepurchases- East China Area: Difficulty in shipping products to our premium clients. Shipped products from moredistant regions such as Guangzhou, but this led to an increase in transportation costs
 Lockdowns were effectively lifted starting in June, but a full recovery is still not at hand
© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively
using the new Accounting Standard

11

Overseas Results (Status By Country: Thailand & Vietnam)
Effective YoY Sales On A Local Currency Basis : 114.5%

Local Subsidiary Results* (0.1 B JPY)
Includes internal sales transactions
Sales
40

Thailand

30

25.3
18.5%

20

•

Strong expansion of domestic sales inThailand•Insecticides & Repellents – the Earth
Corporation rose to No.2 in market share•

While the impact of soaring raw material
prices and currency fluctuations is gradually
starting to be seen, the control of SG&A
expenses allowed us to reach our profit
target

11.6%
10
0

21.2Q

22.2Q

Includes internal sales transactions
Sales
30

Vietnam

20

9.7%
10

7.7%

Enhance the expansion of OP-T (local)
channels•

Execute CSR activities in collaboration
with public government organizations
and neighboring retailers

Measures In 2H

Progress Status Vs. The Forecast

25.9

17.3

•

Effective YoY Sales On A Local Currency Basis : 128.2%

Local Subsidiary Results* (0.1 B JPY)OI Margin

Measures In 2H

Progress Status Vs. The Forecast

32.4

OI Margin•

Strong expansion of domestic sales inVietnam•

While profitability came slightly below target
due to the impact of soaring raw material
prices and other factors, we neverthelessachieved the profit target for 1H•

Raise prices for floor cleaner and dishwashing products➡ Raise product prices by approx. 10%•

Carry out cost control measures to offset
the impact from soaring raw material prices

0

21.2Q

22.2Q

© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 12
using the new Accounting Standard

Overseas Results（Status By Country: Malaysia & Philippines)
Effective YoY Sales On A Local Currency Basis : ―Local Subsidiary Results (0.1 B JPY)

Sales

3

Measures In 2H

Progress Status Vs. The Forecast

OI Margin2

0.9

Malaysia

1

•

0
▲1
▲2

21.2Q

Executed new product launches
according to plan. Secured sales
exceeding the forecast.

•

Launch new air freshener products•

Promotions toward expanding sales
channels•

Profitability and sales priceimprovements

22.2Q

•
-50.5%▲3

While distribution costs and promotion
expenses to raise brand awarenessincreased, topline growth allowed
us to meet the profit target

Effective YoY Sales On A Local Currency Basis : ―Local Subsidiary Results (0.1 B JPY)

Measures In 2H

Philippines

Progress Status Vs. The Forecast

Entered theConsolidated PL
3Q FY 2022•

© Earth Corporation All Rights Reserved.

Carried out the M&A of a company inthe country, acquiring 66.7% of
outstanding shares•

Establish a market through productlaunches•

Unlock integration synergies(Transfer production of existingproducts, etc.)13

FY12/2022 Forecast

FY12/2022 Forecast While the impact of soaring raw material prices and currency fluctuations exceeds our estimates,
the full year FY12/2022 forecast remains unchanged
 Prepare topline growth thanks to the release of new products not contained in the forecast,and recovery measures such as cost reductions, etc.

Source: FY12/2021
earnings briefing
materials© Earth Corporation All Rights Reserved.

15

Initiatives Toward Achieving The Full-year Targets
 Expand sales through the release of new products
not accounted for in the initial forecast•

Fall launch of 66 new household product SKUs, including products
not accounted for in the initial forecast•

Sales target: 2.6 billion yen

 Execute cost controls•

Make efficient use of expenses toward securing profits•

However, we will be taking a pro-active approach to theuse of expenses necessary for sustainable growth Advance execution of cost pass-throughs•

Execute cost pass-throughs starting in the fall season, for some household products
like chemical dehumidifiers and insulation materials•

We have already started executing these measures in the Overseas market© Earth Corporation All Rights Reserved.

16

Fall Season – New Product Releases
 We plan to launch 66 SKUs. Sales* target : 2.6 billion yen
Bath salts

Oral Hygiene productsｃOther Household productsｃ© Earth Corporation All Rights Reserved.

*On the basis of Earth Corporation shipments

17

Management Policy Going ForwardCost Pass-through Policy
Market expansion is the responsibility &obligation of top manufacturers

Soaring raw material prices & forex fluctuations

 Build a foundation allowing us to sell
products retailing at high price points

Negativepressure on
profits

 2023: Execute cost pass-throughs, especially for
insecticides & repellents•

Make decisions comprehensively, taking into account the impact on things like purchasing
frequency, price elasticity, market share, and the Earth Corporation’s results•

We expect cost pass-throughs to allow us to improve operating income margin by approx. 1 pt.

© Earth Corporation All Rights Reserved.

19

Progress Update On Investment Projects
 Pay close attention to capital efficiency and carry out investments toward profit growth Establish a hurdle rate for each project(Evaluate risk with a baseline of 7% as a rough estimate)
Adequately carry out a decision-making process based on investment viability criteria[Status Of Investment]
Major Investment Projects•

Objective

1Q

2022
2Q 3Q

4Q

1Q

2023
2Q 3Q

4Q

★

M&A of a company in thePhilippines

Part of efforts to expand the profit
foundation in Asia•

Revamp our core system

Efficiency improvements in multiple
domains, such as production,
procurement, sales logistics, etc.

★

•

Reinforce seismic resistance at
wastewater treatment facilities

BCP measures★

•

Bath salts – increase production
lines

Expand production capacity toaddress demand growth•

Insecticides & repellents – increase
production lines

Expand production capacity toaddress demand growth•

Build a new R&D block at
Tokushima Pet Land

Increase product development
capabilities by revamping our R&D
facilities© Earth Corporation All Rights Reserved.

★

★
20

ESG
Social Signed a donation agreement with Monash
University • Collaborate with the World Mosquito

Governance Sale of shares in Taiko Pharmaceutical Co.,Ltd.

Program, established by researchers at
Monash University in Australia, andsupport the prevention of mosquitoborne diseases in Vietnam.
•

Donation agreement with Monash Univ.,
toward the execution of disease
preventative activities, leveraging the
Earth Corp‘s knowledge and knowhow
in insecticide & repellent R&D.

••

This is a project to distribute cosmetics
and household products donated bycompanies that are a signatory of thisproject, to individuals who, for economic
reasons, cannot access these products.
We joined as an advisory board
company, in the hopes of helping
reduce negative impacts on theenvironment and of solving social
issues.

Part of the sustained review of the Earth
Corporation’s strategic cross-shareholdings.

•

The method of sale is currently being discussed.

•

Continuation of the Business Alliance Agreementwith Taiko Pharmaceutical.
Advance efforts together with Taiko Pharma, toward
the widespread adoption and use of MA-T.

Notice Regarding Sale of Shares in Taiko Pharmaceutical Co., Ltd. andContinuation of Business Alliance Agreement (earth.jp)

Earth Corp. signs a donation agreement with Monash Univ. in Australia (earth.jp)*

 Participate in the Cosme Bank Project• Establish a Nomination and Remuneration
Committee•

Adhered to CGC Supplementary Principle 4-10-1.

•

Have a structure with a majority of Independent
Outside Directors, and employ a process of
consultation prior to BOD meeting decisions, on
matters such as:- Director remuneration- Appointment and dismissal of Directors- Succession plans

Earth Corp. participates in the Cosme Bank Project (earth.jp)*© Earth Corporation All Rights Reserved.

* Only available in Japanese21

Shareholder Returns
 Target a Dividend on Equity Ratio (DOE) of 4 – 5%
 For FY2022, we forecast a dividend per share of 118 yen, a DOE of 4.2%,
and a consolidated dividend payout ratio of 35.8%
 Adopt an agile approach and, should our performance and retained earnings levels
allow it, consider raising dividends and/or executing share buybacks
Ordinary Dividend per Share (JPY)

DOE(Unit: JPY)

118

120

115

115

115

118

115

110

100

100

5.3%

5.3%

5.5%

5.0%

5.1%
4.5%

90

80

2016

2017

© Earth Corporation All Rights Reserved.

2018

2019

2020

2021

4.2%

2022
(Forecast)22

This presentation contains forward-looking statements and financial results forecasts. These forward-looking statements and financial
results forecasts were formulated on the basis of company assumptions based on the information available.
These statements and forecasts are subject to risks and uncertainties that could cause actual results to differ materially from thosedescribed.

APPENDIX.

© Earth Corporation All Rights Reserved.

Effect of adoption of accounting standard for revenue
recognition

Estimated annual impact
 Items like trades through intermediaries, sales promotion expenses, etc. are deducted fromsales, impacting the P/L side, namely sales, gross profit and SG&A expenses; Impact on
operating income and items below is minor(Unit: 0.1 billion JPY)
 Impact to the balance sheet is minor
FY2021(Realized)(Previous
standard)

FY2022(Forecast)(Previous
standard）

Purchase &
sale

Sales

2,037

2,110

- 378

Gross
Profit1,214.5

1,259.5

378

SG&A
Expenses

716.6

743.0

Operating
Income

106.6

107.5

© Earth Corporation All Rights Reserved.

Sales promo. exp.
(deducted fromsales)- 182

FY2022(Forecast)(New standard)

1,550
881.5

182

561.0

107.5
26

Timing of recording sales promotion expenses(sales deductions) System is being built to more timely identify the actual status of revenue and to improve the efficiency of sales promotion
expenses Reasonably estimate variable promotional expenses from the promotional expense plan tied to the sales plan and deduct
them from revenue
This will allow us to implement efficient marketing initiatives with enhanced revenue management (by division and byclient)Construction and operation of sales promotion costmanagement system（From 2019）Managed on two axes by company and by productClarify "to what (where)," "how much," and "how," toenable appropriate effectiveness verification.

In addition to the system, management accuracy is
increased based on past results.
Appropriate promotional expense management clarifies theuse and duration of promotional expenses.



Estimates sales promotion costs for each transaction withhigh accuracy by comparing sales forecasts and sales
promotion conditions with past actual results, and deducts
sales at the time sales are recorded.

Restructuring of profit management system (from 2021)
and resource allocationVisualization by business unit andproduct category on two axes

Understand the earnings situation in a more timely andprecise manner and take appropriate measures under any

More timely grasp of theactual status of earnings
More Timely and Reliable

circumstances.

Foundation for business portfolio reorganization© Earth Corporation All Rights Reserved.

27

Quarterly Sales Promotion Plan

Cf. Previous standard*(Unit: 0.1 billion JPY)

 Assume that from this fiscal year, sales promotion expenses will generally follow a
curve in proportion to net sales➡ Expenses are linked to highly seasonal sales trends, and profits are more even than
before.
FY2021 Sales(Realized)

FY2022 Sales(Forecast)

683.0

700

665.4

600

517.0

500.0

492.7

493.4

500

411.0

400
FY2021 Sales
promotion expenses(Realized)
FY2021 Sales
promotion expenses(Forecast)

300

386.1

66.2
48.6

200

55.5

48.1

26.0

43.0

43.8

Q1(1～3月)

Q2(4～6月)

Q3(7～9月)

Q1

Q2

100

28.6
0

Promotional
Expenses_Difference by Quarter
FY21 (Realized) vs. FY22 (Forecast)© Earth Corporation All Rights Reserved.

＋20.0

Q3

＋23.2

Q4(10～12月)

Q4

＋4.3

▲29.5

*Comparison of 2022 plan figures with pre-2021 accounting standards

28

Operating Income Forecast（Quarterly/Cumulative total）

 Although visually, operating income in Q1-Q3 is expected to decline YoY, the impact on
the year-to-date total is expected to be negligible(Unit: 0.1 billion JPY)

Q1

Q2

Q3

Q4

81.0

Quarterly

52.0
105.2

80.5

17.9

7.0
- 96.9FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)- 32.5

FY2021
FY2022(Realized) (Forecast)

Q. Cumul.
140.0

133.0
52.0

185.7

107.5
203.5
106.7

80.5
FY2021
FY2022(Realized) (Forecast)© Earth Corporation All Rights Reserved.

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)29

Supplementary Materials;
FY12/2022 2Q Results

Consolidated Statement of Income
2Q FY12/22 2Q FY12/22 2Q FY12/22
Realized*
Sales

Forecast

Realized（Unit：million JPY）
2Q FY12/21

FY12/22
YoY

vs.FCT

Forecast

2Q YTD

Realized**

87,56991,50089,305102.0%

97.6%

155,000

57.6%

115,82147,53649,20049,372103.9%

100.4%

88,15056.0%

64,21840,03242,30039,933

99.8%

94.4%

66,85059.7%

51,603

26,51629,00027,991105.6%

96.5%

56,09949.9%33,036

13,516

13,30011,941

88.3%

89.8%

10,750111.1%

18,566

Non-operating income

385

130

796

206.7%

613.0%

500

159.4%

385

Non-operating expenses

45

30

23

53.1%

79.7%

100

23.9%

45

13,857

13,40012,714

91.8%

94.9%

11,150114.0%

18,907Extraordinary income

1

0

23

Extraordinary losses

13

100

69

502.4%

69.6%

250

27.9%

13

Net income before income taxes

13,844

13,30012,668

91.5%

95.2%

10,900116.2%

18,895Gross profit ratio

45.7%

46.2%

44.7%

- 1.0pt- 1.5pt

43.1%

44.6%

Operating income ratio

15.4%

14.5%

13.4%

- 2.1pt- 1.2pt

6.9%

16.0%

Net income before income taxes ratio

15.8%

14.5%

14.2%

- 1.6pt- 0.4pt

7.0%

16.3%

Cost of sales
Gross profit
SG&A expenses
Operating profit

Ordinary profit

0

1*LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard **Standard until 2021

© Earth Corporation All Rights Reserved.

supplement 1

Consolidated Sales by Segment
2Q FY12/21 2Q FY12/21 2Q FY12/21
Realized*

Forecast

Realized

YoY

vs.FCT

FY12/21（Unit：million JPY）
2Q FY12/21

Forecast

2Q YTD

Realized**

Insecticides & Repellents

44,31945,40544,086

99.5%

97.1%

61,431

71.8%

51,569Oral hygene products

3,857

3,807

3,950

102.4%

103.7%

8,280

47.7%

21,549Bath salts

11,59012,128

11,865102.4%

97.8%

27,21943.6%

13,124

Other household products

16,21817,813

17,941110.6%

100.7%

33,792

53.1%

17,913

Household products

31,66633,74933,757106.6%

100.0%

69,292

48.7%

52,587

Pet products & others

4,971

4,962

4,709

94.7%

94.9%

7,039

66.9%

5,067

Household products business subtotal

80,956

84,11782,553102.0%

98.1%

137,76359.9%

109,224

General environment & sanitation business subtotal

13,557

13,57213,800101.8%

101.7%

27,70049.8%

13,546

Total sales include internal sales

94,514

97,68996,353101.9%

98.6%

165,463

58.2%

122,770(Adjustments)- 6,945- 6,189- 7,048

Total sales

87,56991,50089,305(Composition ratio)- 10,463
102.0%

97.6%

155,000- 6,949
57.6%

115,821*Denominator is total including internal sales

Insecticides & Repellents

50.6%

49.6%

49.4%

- 1.2pt- 0.3pt

39.6%

44.5%

Household products

36.2%

36.9%

37.8%

1.6pt

0.9pt

44.7%

45.4%

Pet products & others

5.7%

5.4%

5.3%

- 0.4pt- 0.1pt

4.5%

4.4%

Household products business

92.4%

91.9%

92.4%

- 0.0pt

0.5pt

88.9%

94.3%

General environment & sanitation business

15.5%

14.8%

15.5%

- 0.0pt

0.6pt

17.9%

11.7%

*LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard© Earth Corporation All Rights Reserved. **Standard until 2021

supplement 2

Operating Income Change Factors (YonY)
13,516（Unit：million JPY）

FY12/21.2 Q(Realized)*

Increase in grossprofit

•

-99

•
•

-1,575

Increase in SG&A
expenses-1,475

•
•
•
•
•
•
•

11,941＜Breakdown＞
Increase in gross profit due to anincrease in sales
Impact from changes in the sales
composition ratio
Impact from raw material prices andexchange rate fluctuations
Increase in personnel expenses
Increase in distribution expenses
Increase in advertising expenses
Decrease in sales promotion expenses
Costs of travel & transportation
expenses, other activities
Increase in commissions paid
Others＋961-1,060
-487
-255
-75
＋47
-204
-347
-154

FY12/21.2Q(Realized)*LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard© Earth Corporation All Rights Reserved.

supplement 3

Operating Income Change Factors (VS. Forecast)
13,300（Unit：million JPY）

FY12/22.2Q(Forecast)Gross Profit
overperformance••-2,366•-1,359

SG&A expenses
within budget＋1,009

•
•
•
•
•

•

11,941＜Breakdown＞
Impact from sales plan not achieved
Impact from changes in the sales
composition ratio
Impact from raw material prices andexchange rate fluctuations
Personnel expenses below the forecast
Distribution expenses avobe the forecast
Unused/moved to next FY advertisingexpenses
Unused/moved to next FY R&D
expenses
Costs of travel & transportation
expenses, other activities
Others-1,000-1,366
＋228
＋19
＋432

＋104
＋125
＋101

FY12/21.2Q(Realized)© Earth Corporation All Rights Reserved.

supplement 4

SG&A Expeses（Unit：million JPY）
2Q FY12/21 2Q FY12/22 2Q FY12/22
Realized*

Forecast

Realized

FY12/22
YoY

vs.FCT

Forecast

2Q FY12/21
2Q YTD

Realized**

Personal expenses

9,686

10,401

10,173105.0%

97.8%

20,910

48.7%

9,686

Shipping costs

2,150

2,322

2,315

107.7%

99.7%

4,449

52.0%

2,150

Strage costs

1,224

1,326

1,314

107.4%

99.1%

2,511

52.3%

1,224

Advertising costs

4,201

4,708

4,276

101.8%

90.8%

8,120

52.7%

4,201

641

496

594

92.7%

119.8%

1,070

55.5%

7,161

1,346

1,530

1,426

105.9%

93.2%

3,386

42.1%

1,346

Depreciation expenses

619

686

715

115.5%

104.2%

1,388

51.5%

619

Goodwill amortization

954

437

423

44.3%

96.8%

450

94.0%

954

Travel&transportation expenses

506

691

590

116.6%

85.4%

1,393

42.4%

506

Entertainment expenses

141

285

261

185.1%

91.6%

474

55.1%

141

Comission paid

718

743

620

86.4%

83.4%

1,372

45.2%

718

Sales comission

216

653

661

306.0%

101.2%

1,245

53.1%

216

Miscellaneous expenses

342

409

348

101.8%

85.1%

1,028

33.9%

342

Others

3,772

4,313

4,275

113.3%

99.1%

8,303

51.5%

3,772

Total

26,51629,00027,991105.6%

96.5%

56,09949.9%33,036

Personal expenses ratio

11.1%

11.4%

11.4%

0.3pt

0.0pt

13.5%

8.4%

Advertising costs ratio

4.8%

5.1%

4.8%

- 0.0pt- 0.4pt

5.2%

3.6%

R&D expenses ratio

1.5%

1.7%

1.6%

0.1pt

- 0.1pt

2.2%

1.2%

Sales promotion expenses
R&D expenses(Composition ratio)*LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard**Standard until 2021

© Earth Corporation All Rights Reserved.

supplement 5

Consolidated Balance Sheet（Unit：million JPY）

2021.2Q

2022.2Q

End of

YoY

2021

Current

Cash & deposits

24,154

21,739- 2,415

21,027

assetsTrade receivable

36,69337,223529

22,941Inventories

26,28629,1472,860

27,502Others

2,256

2,809

553

2,547

Non-current Property, plant & equipment

27,94028,501560

27,551

assetsIntangible assets

5,257

4,788

- 469

4,276

Investments & other assets

13,731

15,9162,185

14,868136,320140,125

3,804

120,715

Total assets

Current

Trade paypables

39,852

38,834- 1,018

32,449liabilities

Short-term borrowings

2,223

2,284

61

2,498

Others

20,35725,426

5,068

17,351

Non-current Long-term borrowings

1,690

720

- 970

1,200

liabilities

2,562

1,903

- 658

2,618

Total liabilities

66,686

69,1682,482

56,118

Net assets Total shareholders' equity

63,351

62,916- 435

57,537

Total accumulated other comprehensive income

1,747

3,289

1,542

2,421

Non-controlling interests

4,534

4,750

216

4,638

69,63470,956

1,322

64,596

OthersTotal net assets© Earth Corporation All Rights Reserved.

supplement 6

Quarterly statement of Cash flows（Unit：million JPY）

2021.2Q

2022.2Q

End of

YoY

2021

Cash flows from operating activities

6,729

6,686

-43

4,814

Cash flows from investing activities-2,308-3,173-864-3,220Cash flows from financing activities-4,175-3,642533-4,610Effect of exchange rate change on cash and cash equivalents

192

713

521

327

Net increase(decrease) in cash and cash equivalents

438

584

146

-2,68823,71621,027-2,68823,716-2,41521,027

Cash and cash equivalents at beginning of period

126

Increase in cash and cash equivalents from newly consolidated subsidiaries

Cash and cash equivalents at end of period© Earth Corporation All Rights Reserved.

24,154

21,739supplement 7

Consolidated:
Capital expenditure, Depreciation expenses（Unit：million JPY）
FY2018 FY2019 FY2020 FY2021 FY2022（単位：百万円）

Realized

Realized

Realized

Realized

Forecast

Capital expenditure

2,442

1,953

3,548

2,928

6,200

FY2018 FY2019 FY2020 FY2021 FY2022（単位：百万円）
Depreciation
expensesCapital expenditure
7,000

6,000

6,000

5,000

5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

FY2018FY2019FY2020© Earth Corporation All Rights Reserved.

FY2021

Realized

Realized

Realized

Forecast

3,290

3,334

3,334

3,537

3,500

Depreciation expenses

7,000

0

Realized

FY20220

FY2018FY2019FY2020

FY2021

FY2022

supplement 8

Overview of Group Companies' Business
Performance（Unit：million JPY）

Earth Corporation

BATHCLIN Corporation

Hakugen Earth Co., Ltd.

Earth Pet Co., Ltd.

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Sales

52,15554,41151,479

6,996

7,360

7,425

9,226

9,967

9,605

3,418

3,292

3,137

Gross profit

24,111

26,373

23,417

3,075

3,120

3,179

3,551

3,418

3,208

1,429

1,272

1,346

Operatig income

11,041

11,215

9,052

645

586

652

988

617

571

395

286

457

PETFOOD KITCHEN CO., LTD.

Earth(Thailand)Co.,Ltd.

Earth Corporation Vietnam

Earth Home Products Maraysia

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Sales

245

281

265

2,530

2,641

3,243

1,649

1,922

2,588

0

60

92

Gross profit

133

150

138

862

772

943

643

773

953

0

26

26

Operatig income

- 24

-6

2

469

256

375

162

103

200

0

- 45

- 46

Sales
Gross profit
Operatig income

Earth Corporation (Shanghai)

Earth Corporation (Tianjin)

Earth Corporation (Suzhou)

Earth Environmental Service Co.,Ltd.

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

FY21.2Q FY22.2Q FY22.2Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

1,597

1,518

1,535

2,136

1,958

2,269

1,004

734

909

13,557

13,57213,800

481

461

491

415

250

387

255

107

174

5,392

5,638

5,761

1

155

171

275

92

214

153

19

81

584

578

790

* *LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard© Earth Corporation All Rights Reserved.

supplement 9