Consolidated Financial Results
for the Six Months Ended June 30, 2021 (Japanese GAAP)
August 6, 2021

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.

August 10, 2021—
Yes
Yes (for institutional investors and analysts)

Consolidated Financial Results for the Six Months Ended June 30, 2021
(January 1 to June 30, 2021)(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%

Six months ended
115,821
4.7
18,56615.9
18,90717.2
12,75916.5
June 30, 2021
Six months ended
110,634
6.3
16,024116.5
16,138114.1
10,949135.4
June 30, 2020
Note: Comprehensive income for the six months ended June 30, 2021 was 12,460 million yen (-7.1% YoY), and comprehensive
income for the six months ended June 30, 2020 was 13,417 yen (+92.6% YoY)
Net income per share
Six months ended
June 30, 2021
Six months ended
June 30, 2020

Diluted net income
per share

Yen

Yen

578.41－

540.99－(2) Consolidated financial position
Total assets

Net assets

Million yen

Million yen

Equity ratio%

Six months ended
136,320
69,63447.8
June 30, 2021
Fiscal year ended
119,870
59,82346.1
December 31, 2020
Reference: Equity capital amounted to 65,099 million yen as of June 30, 2021 and 55,299 million as of December 31, 2020.

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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
115.00－－December 31, 2020
Fiscal year ending
0.00－
December 31, 2021
Fiscal year ending
December 31, 2021
115.00－(forecast)
Note: No revisions have been made to the Company’s most recently announced dividend forecast.

3.

115.00115.00Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2022
(January 1, 2021 to December 31, 2021)

Sales

Full-year

Operating income(Percentages indicate YoY change)
Net income
per share

Net income attributableto owners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

201,500

2.8

12,0005.1

12,400

6.3

7,700

117.1

348.97

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

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*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.:
None
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 June 30,
2021

22,077,500

As of December
31, 2020

22,057,500

2. Treasury shares outstanding

As of June 30,
2021

6,815

As of December
31, 2020

5,065

3. Cumulative average number ofsharesSix months ended
June 30, 2021

22,059,386

Six months ended
June 30, 2020

20,240,144*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.

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Accompanying Materials ― Contents

1. Qualitative Information on Quarterly Financial Performance ............................................................................................................ 2(1) Explanation of Operating Results..................................................................................................................................................... 2(2) Explanation of Financial Position .................................................................................................................................................... 5(3) Explanation of Consolidated Earnings Forecasts and Other Projections .......................................................................................... 5
2. Quarterly Consolidated Financial Statements and Primary Notes...................................................................................................... 6(1) Consolidated Balance Sheet ............................................................................................................................................................. 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ........................................................... 8
Consolidated Statement of Income .................................................................................................................................................... 8
Consolidated Statement of Comprehensive Income ........................................................................................................................... 9(3) Quarterly Statement of Cash Flows ................................................................................................................................................ 10(4) Notes to Quarterly Financial Statements ........................................................................................................................................ 11(Notes to going concern assumptions) ............................................................................................................................................. 11(Notes in the event of significant changes in shareholders’ equity) ................................................................................................. 11―1―

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During the six months ended June 30, 2021, the outlook for the Japanese economy remained extremely uncertain despite
expansion in the number of vaccinations against the ongoing COVID-19 pandemic that reached Japan in the fiscal year ended
December 31, 2020 and optimism regarding the future impact of various government policies. The primary causes of thisuncertainty were intermittent state of emergency declarations issued by the Japanese government and semi-emergency measures
adopted in certain regions of the nation. Meanwhile, conditions in Asian regions in which the Earth Corporation is conducting
business development continue to require close attention despite current economic recovery in China thanks to the resumption of
economic activities, which was made possible by early suppression of COVID-19’s spread in the same country. These conditions
still require monitoring because waves of COVID-19 infections continue to intermittently impact various nations in these Asian
regions.
Under these economic conditions, the Company announced its medium-term management plan, “Act For SMILE－COMPASS
2023” in February 2021. In accordance with the Company’s corporate philosophy, “We act to live in harmony with the Earth,” theplan includes four fundamental policies: “Reform Corporate Compass & Infrastructure,” “Expand Profit Foundation in Asia,”“ESG/Open Innovation,” and “Generate Cost Synergies.” The Company is striving to implement priority measures associatedwith these policies during the fiscal year ending December 31, 2021, the first year of the plan.
During the six months ended June 30, 2021, the Group’s financial results were boosted by conditions in both Household
Products Business and General Environment and Sanitation Business. Conditions of consequential impact in the former businessincluded continuously high customer demand stemming from lifestyle changes necessitated by the COVID-19 pandemic and thelaunch of new products while conditions in the latter business included sales growth that occurred due to expansion in contract
count. As a result, the Company reported record-high performance for the six months ended June 30, 2021 with 115,821 million
yen in sales (+4.7% YoY), 18,566 million yen in operating income (+15.9% YoY), 18,907 million yen in ordinary income(+17.2% YoY), and 12,759 million yen in net income (+16.5%).
Results by segment were as follows.
Household Products Business
Through its Household Products Business, the Company endeavored to rejuvenate corresponding markets through advertising,
the creation of appealing sales areas, and other means of communicating with customers while pursuing new customers with thelaunch of new products and updating existing products to improve their value. At the same time, it strove to lower manufacturingcosts and selling costs as it targeted improvements in profitability.
Sales in the Household Products Business during the six months ended June 30, 2021 amounted to 109,224 million yen, up
6.4% YoY thanks to strong growth from new insecticides and repellents launched in spring 2021 and sales of bath salts, whosemarket expanded due to changes in customer demand that occurred in response to the COVID-19 pandemic. Meanwhile, segment
income (operating income) amounted to 17,870 million yen, up 18.0% YoY due to growth in gross profit stemming from higher
sales and improvement in cost-to-sales ratio driven by changes in product sales mix and efficient management of marketing costs
that kept them within the Company’s projected range.

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Results in the Household Products BusinessSix months ended
June 30, 2020

(Million yen)Six months ended
June 30, 2021

ChangeRate of change

Insecticides and repellents

48,93751,569

2,632

5.4%

Household products

49,002

52,587

3,584

7.3%

Oral hygiene products

20,852

21,549697

3.3%

Bath salts

10,305

13,124

2,819

27.4%

Other household products

17,844

17,91368

0.4%

Pet products and others

4,729

5,067

338

7.1%

Total sales

102,668

109,224

6,555

6.4%

Segment income (operating income)15,144
17,8702,725
18.0%
Note: Sales include internal sales and transfers made within and between segments, which amounted to 5,048 million yen during
the six months ended June 30, 2020 and 6,880 million yen during the six months ended June 30, 2021.
Insecticides and repellents
Overall insecticide and repellent sales grew in Japan thanks in part to growth in sales of Earth Mushiyoke Net EX (insect
repellent), Kobae ga Hoi Hoi (fruit fly traps), and other products stemming from ongoing lifestyle changes associated with the
COVID-19 pandemic (recommendations suggesting the ventilation of living spaces, an increase in time spent at home, etc.).
Further contributing to sales growth were new products including Osu Dake Earth-Red Muen Push (no-flame fumigation of
cockroaches, mites, fleas). Performance overseas was also strong, particularly in Thailand.
Consequently, sales amounted to 51,569 million yen (+5.4% YoY).
Household products
Sales of oral hygiene products came to 21,549 million yen, up 3.3% YoY thanks to contribution from Mondahmin Premium
Care Sensitive (a mouthwash) and ongoing strong performance from Shumitect (a line of toothpastes formulated to prevent
dentin hypersensitivity).
Meanwhile, sales of bath salts were 13,124 million yen, up 27.4% YoY due in part to continuing favorable performance fromproducts such as the granular form of Kikiyu (a carbonated bath agent) and packaged bath salts Nihon no Meito and Ii Yu
Tabidachi. This strong performance coincided with market scale expansion stemming from changes in customer demandbrought on by the COVID-19 pandemic.
Sales of other household products incurred residual downward impact because demand for Kaiteki Guard protective facemasks fell back from the high levels temporarily seen throughout 2020. However, sales of these products rallied to 17,913
million yen, up 0.4% YoY thanks to growth in sales of the Rakuhapi series of cleaning products due to increasing shelter-inplace demand.
Consequently, sales amounted to 52,587 million yen (+7.3% YoY).
Pet products and others
Sales of pet products and other miscellaneous products came to 5,067 million yen, up 7.1% thanks to existing productupdates and ongoing growth in sales of cleaning towels and other pet care products that was generated by dynamic promotional
measures.
General Environment and Sanitation BusinessIn the General Environment and Sanitation Business, outsourcing needs for hygiene management are on the rise due to risingconsumer awareness regarding safety and security and difficulty in securing factory workers stemming mainly from a decrease in
the size of Japan’s working population. Accordingly, demand for the Group’s high-quality hygiene management services haverisen among the food and packing material factories that constitute the Group’s core customer base.
Under these circumstances, we endeavored to maintain and expand our contracts by providing standout quality assurance
services through the enhancement of our technological development capabilities. At the same time, we actively invested in theconstruction of an internal framework that facilitates the prompt fulfillment of customer needs associated primarily with software―3―

development aimed at improving operational efficiency and recruiting and training human resources. Along with these efforts, we
intensified our initiatives in the pharmaceutical and regenerative medicine industries and efforts associated with auditing andconsulting services related to food safety management.
Consequently, sales in the General Environment and Sanitation Business amounted to 13,546 million yen (+3.6% YoY), while
segment income (operating income) came to 898 million yen (+6.5% YoY).
Results in the General Environment and Sanitation BusinessSix months ended
June 30, 2020

(Million yen)Six months ended
June 30, 2021

ChangeRate of change

Sales

13,075

13,546471

3.6%

Segment income (operating income)

844

898

54

6.5%

Note: Sales include internal sales and transfers made within and between segments, which amounted to 61 million yen during thesix months ended June 30, 2020 and 68 million yen during the six months ended June 30, 2021.

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(2) Explanation of Financial Position(1) Assets, Liabilities and Net Assets
As of June 30, 2021, total assets amounted to 136,320 million yen, up 16,450 million yen from December 31, 2020 due
primarily to increases in accounts receivable and investment securities.
Meanwhile, despite a downturn in accounts payable, total liabilities as of June 30, 2021 came to 66,686 million yen, up 6,640
million yen from December 31, 2020, mainly as a result of growth in accounts payable-trade and income taxes payable.
Net assets amounted to 69,634 million yen as of June 30, 2021, rising 9,810 million yen compared to December 31, 2020,
mainly because of an increase in retained earnings.
Consequently, the Company’s equity ratio was 47.8% as of June 30, 2021, up 1.7 points from December 31, 2020.
(2) Cash Flows
As of June 30, 2021, cash and cash equivalents (below, “cash”) stood at 24,154 million yen, up 438 million yen compared to
December 31, 2020.
In the six months ended June 30, 2021, net cash provided by operating activities amounted to 6,729 million yen (versus net
cash of 15,556 million yen provided during the six months ended June 30, 2020). The primary sources of this net cash were
18,895 million yen in profit before income taxes (16,074 million yen during the six months ended June 30, 2020), an increase of
13,926 million yen in accounts receivable (increase of 14,906 million ye during the six months ended June 30, 2020), and growthof 3,987 million yen in inventories (versus a decline of 1,406 million yen during the six months ended June 30, 2020).
Net cash used in investing activities during the same period was 2,308 million yen (versus 1,313 million yen used during thesix months ended June 30, 2020). This figure primarily consisted of 1,980 million yen in purchase of property, plant, andequipment (versus 1,210 million yen during the six months ended June 30, 2020).
Meanwhile, net cash used in financing activities was 4,175 million yen (versus 12,712 million yen used during the six months
ended June 30, 2020). This amount primarily comprised 2,536 million yen in cash dividends paid (versus 2,023 million yen paid
during the six months ended June 30, 2020).

(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, 2021, which
was announced on July 28, 2021.
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.

―5―

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet(Millions of yen)Six months ended
June 30, 2021
(as of June 30, 2021)

Fiscal year ended
December 31, 2020(as of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

23,716
22,74624,15436,693Merchandise and finished goods
Work in process

17,403789

21,399641

Raw materials and supplies
Other

3,986
2,124

4,245
2,292

Allowance for doubtful accounts

(20)

(36)

70,74789,391

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

29,002

29,665

Accumulated depreciation and impairment(14,982)(15,537)

Buildings and structures, net

14,01914,128

Machinery, equipment and vehicles

15,59815,874

Accumulated depreciation and impairment(11,357)(11,833)

Machinery, equipment and vehicles, net

4,240

4,041

7,875
115

7,875
154

(58)

(61)

Land
Leased assets
Accumulated depreciation and impairment
Leased assets, net

56

93Construction in progress

389

235

8,616
(7,166)

8,985(7,417)

Other
Accumulated depreciation and impairment
Other, net

1,449

1,567

28,03027,940Goodwill
Other

2,260
4,008

1,306
3,951

Total property, plant and equipment
Intangible assets

Total intangible assets

6,268

5,257

Investments and other assets
Investment securities

8,001

6,682

Retirement benefit asset
Deferred tax assets

4,343
1,152

4,499
944

Other
Allowance for doubtful accounts

1,333
(7)

1,612
(7)

Total investments and other assets

14,823

13,731

49,122

46,929

119,870

136,320

Total non-current assets
Total assets―6―

Fiscal year ended
December 31, 2020(as of December 31, 2020)(Millions of yen)Six months ended
June 30, 2021
(as of June 30, 2021)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

31,714
1,756

39,852
1,137

Current portion of long-term borrowings
Accounts payable - other

1,314
10,017

1,086
6,341

Income taxes payable
Accrued consumption taxes

3,640
1,684

5,751
1,472

Provision for bonuses
Provision for sales returns

312
595

316
1,159

Other

3,848

5,316

Total current liabilities

54,88462,434

2,218
1,329

1,690
1,105

Retirement benefit liability
Asset retirement obligations

454
505

416
516

Other

652

523

Non-current liabilities
Long-term borrowings
Deferred tax liabilities

Total non-current liabilities

5,161

4,252

60,046

66,686

Share capital
Capital surplus

9,829
9,859

9,895
9,928

Retained earnings
Treasury shares

33,322(17)

43,545(17)

Total shareholders' equity

52,99463,351

2,723

1,793

(789)
371

(350)
304

2,304

1,747

4,524

4,534

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets―7―59,823

69,634

119,870

136,320

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
Six months ended
June 30, 2020
(from January 1, 2020
to June 30, 2020)
110,634
62,856(Millions of yen)Six months ended
June 30, 2021
(from January 1, 2021
to June 30, 2021)
115,82164,218Gross 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

47,77751,603

3,179
4,133
6,981
17
7,574
213
541
552
1,230
670
1,200
5,456

3,375
4,201
7,161
17
8,016
228
506
619
954
707
1,346
5,900

Total selling, general and administrative expenses
Operating income

31,75316,02433,036
18,566

Non-operating income
Interest income
Dividend income
Foreign exchange gains
Commission income
Rental income from buildings
Other
Total non-operating income

22
61
—
15
43
83
227

30
103
68
14
23
145
385

Non-operating expenses
Interest expenses
Foreign exchange losses
Compensation for damage
Other
Total non-operating expenses

34
42
—
36
113

10
—
27
6
45

16,13818,907

7
7

1
1

9
16
45
71

6
5
1
13

Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes

16,074
5,374
(451)
4,923

18,895
5,486
399
5,885

Net income
Net income attributable to non-controlling interests

11,151
201

13,009250

Net income attributable to owners of parent

10,94912,759

Sales
Cost of sales

Ordinary income
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses―8―Consolidated Statement of Comprehensive Income

Net income
Other comprehensive income

Six months ended
June 30, 2020
(from January 1, 2020
to June 30, 2020)
11,151(Millions of yen)Six months ended
June 30, 2021
(from January 1, 2021
to June 30, 2021)
13,009

2,497
(193)

(920)
439

Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

(38)

(68)

Total other comprehensive income

2,266

(549)

Comprehensive income

13,417

12,460(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

13,224

12,202

192

258

―9―

(3) Quarterly Statement of Cash Flows(Millions of yen)Six months ended
June 30, 2021
(from January 1, 2021
to June 30, 2021)

Six months ended
June 30, 2021
(from January 1, 2020
to June 30, 2020)
Cash flows from operating activities
Profit before income taxes

16,07418,895

Depreciation
Amortization of goodwill

1,595
1,230

1,687
954

Increase (decrease) in provision for sales returns
Increase in retirement benefit assets (increase inretirement benefit liabilities)
Decrease (increase) in trade receivables

1,016

563

(210)

(298)

(14,906)(13,926)

Decrease (increase) in inventories
Increase (decrease) in trade payables

1,406
8,583

(3,987)
8,099

Other

2,318

(2,046)

Subtotal

17,109

9,940

84
(34)

134
(10)

Income taxes paid

(1,602)(3,334)

Net cash provided by (used in) operating activities

15,556

6,729(1,210)(9)(1,980)
(9)

(306)
212

(345)
27

Net cash provided by (used in) investing activities(1,313)(2,308)Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Interest and dividends received
Interest paid

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of investment securities
Other payments
Other proceeds(8,868)(619)

Repayments of long-term borrowings
Purchase of treasury shares(1,641)
(0)

(757)
(0)

Purchase of treasury shares of subsidiaries
Dividends paid—
(2,023)(86)(2,536)

Dividends paid to non-controlling interests
Other

(158)
(20)

(158)
(17)

(12,712)(4,175)

(68)

192

1,462

438

Cash and cash equivalents at beginning of period

7,312

23,716

Cash and cash equivalents at end of period

8,774

24,154

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents―10―(4) 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.

―11―