Earnings Briefing Materials for the
Fiscal Year Ended December 2023
andthe New Mid-term Business PlanFinancial Result Highlights of FY 12/2023

Financial Result Highlights(Unit: 0.1 billion JPY)

 A higher-than-expected increase in raw material prices and lower GPM from our model mix
negatively impacted results, which ultimately fell short of the plan.
 Insecticides & Repellents overperformed vs. the revised forecast (Nov.), with success incontrolling sales promotion & other expenses also contributing to an operating income
overperformance of 1.37 B yen (5.0 B yen → 6.37 B yen)
Realized

Vs.
Forecast

YoY

Main Factors vs. Forecast•

Impact of underperformance from Household products,
especially Bath salts.
Insecticides & Repellents/Total Health Care System met
the forecast targets.

Sales

1,583

99.0%

103.9%•

Gross Profit

636.2

95.7%

101.9%••

Impact from higher-than-expected increase in raw material prices.
Lower GPM from our model mix.

SG&A
Expenses

572.5

97.9%

104.0%•

Controlled costs, bringing down SG&A by 1.24 B yen vs. theforecast.

Operating
Income

63.7

79.6%

85.7%

•

Vs. the forecast : -1.63 B yen.

Net Income
attributable toowners of parent

41.0

76.0%

77.4%

•

No factors had a significant impact on consolidated results.

© Earth Corporation All Rights Reserved.

2

Main Factors Vs. Revised Forecast (Nov.)(Unit: 0.1 billion JPY)

Item
•

•

Domestic: Sales / GP
overperformance vs. target
in Insecticides & Repellents

Domestic: Sales / GP
underperformance vs. target
in Household products

As of
Nov.
revision

Realizedー＋0.7

Main Factors•

Fewer product returns than expected contributed to profits.

•

Bath salts: -17.4.
Stay-at-home demand no longer at play. Market size: 96% YoY;
Share: -0.9pt YoY.
Fell short of the plan targets; higher-than-expected impact from raw materials.
Oral hygiene products: -5.3.
Market size: 96% YoY; Share: -0.5pt YoY.
Impact of soaring raw material prices and a worsening in profitability
due to the model mix.
Other household products (household detergents, masks, etc.): -3.3
Fell short of the sales target, impacted by a higher COGS ratio.
Expenses related to reduction in excess inventories included in eachcategory.

•

-37

-25.8
•
•

•

China: Gross Profit
underperformance vs. target•

GP underperformance•Control expenses

•

Total

-3

-3.6

-40

-28.7

＋10

＋12.4

-30

-16.3

© Earth Corporation All Rights Reserved.

•

Sales through the e-commerce channel at our Chinese subsidiary struggled;
increase in slow-moving inventories.

•

Personnel expenses: +1.8; Distribution expenses: +0.5;
Advertising expenses:+1.3; R&D expenses: +5.2; Maintenance:+1.0;
Misc.& other expenses: +3.6

3

Operating Income Change Factors (Vs. Forecast)(Unit: 0.1 billion JPY) Greater than expected impact of rising costs, e.g., raw materials.
 The effect of price revisions fell short of expectations, and GPM worsened due toa sales underperformance vs. the forecast and the model mix.
 While cost controls allowed us to limit expenses by 1.24 B yen, operating income
nevertheless fell short of the forecast target.

Decrease factors (-30.8)
Soaring raw
material prices
原材料価格高騰-7.5

Cost pass-throughs
価格改定施策-4.4

Sales Δ vs. forecast(Excluding price revisions)
売上未達(価格改定除く)

Model Mix
モデルミックス

Increase factors (+15.3)

-3.6
-13.3

Personnel expenses
人件費

1.9

Distribution expenses
物流費

0.6

Advertisingexpenses
広告宣伝費

1.3

R&D
expenses
研究開発費
Expenses from sales activities
活動費

5.2
-2.0

Other
expenses
その他費用
Goodwill
amortization
のれん償却負担© Earth Corporation All Rights Reserved.

5.5
0.8
4

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

 Insecticides & Repellents：Plan achieved due to higher than planned Q4.
 Household products：Oral hygiene products, bath salts, and other household goods all fell short ofprojections.

 General Environment： Strong performance from the beginning of the year and steady achievement of the plan.
Last FY(Realized)*

Current FY (Forecast)

572.5

Current FY (Realized)

568.1

314.8
235.2

531.0

289.1

325.0

283.6

256.9

82.1

313.9

236.6

89.7

81.5 84.1

82.2

Insecticides &Repellents

Oral Hygiene
products

Bath salts

YoY diff.

＋41.4

＋0.6

Diff. vs.
forecast

＋4.3

-1.9

© Earth Corporation All Rights Reserved.

278.1

82.3

Other Householdproducts

Pet supplies, etc.

Total Health Care
System

▲1.4

＋0.8

＋7.4

＋11.0

-21.7

-10.1

＋7.4

＋5.5
5

Regarding Losses on Valuation of Shares in
BATHCLIN Corporation Inc.
• As announced on January 29, 2024, the Earth Corporation
recorded a loss in the valuation of shares in BATHCLIN
Corporation Inc.
‣ The business environment has changed significantly from the assumptions
made when we acquired shares in the company in 2012.
‣ Recorded a loss on valuation of shares in subsidiaries and affiliates inaccordance with the Accounting Standard for Financial Instruments.
‣ Impact on non-consolidated results: Extraordinary losses: 10.96 B yen.

• No impact on consolidated results and current Cash levels.

© Earth Corporation All Rights Reserved.

6

Review of Previous Mid-term Business Plans

Act For SMILE‐COMPASS 2023‐ Outline
 The basic strategy for the MTBP was reforming the corporate compass & infrastructure
and improving earnings by expanding the profit foundation in Asia, ESG/Open
Innovation, and generating cost synergies.

Reform Corporate Compass &Infrastructure

Main Drivers of the Medium-term Business Plan (2021 - 2023）
Expand Profit
Foundation in Asia

ESG / Open
Innovation

Generate Cost
Synergies© Earth Corporation All Rights Reserved.

 Acquire market share (consumer support)
in the countries we have entered.
 Expand into new areas.
 Challenge ourselves to address issues
contributing to the achievement of SDGs.
 Realize open innovation throughcollaboration with outside parties.

 Carry out joint operations wheneverlogical to do so.
 Generate synergies and added value
throughout the entire value chain.
8

Review of the Main Drivers
 Updated management accounting and revamped our core system as planned. We now intend todeliver benefits from the use of these new systems.
 While we continue making efforts to reduce product disposals/returns and generate synergies,
we haven’t been able to solve the issue completely.
We will be carrying out a bold review of drivers and enact drastic changes to execution structures.
○・Initiatives with results△・Initiatives in progress

×・Initiatives not fully executed

Reform Corporate
Compass & Infrastructure

Expand Profit Foundation in Asia

ESG / Open Innovation

Improve sophistication ofstrategic proposals
through updates inmanagement accounting

Explore new market areas(Malaysia / Philippines)

Reduceproduct disposals/returns

ESG / Open Innovation

Generate Cost Synergies

Address issues contributing
to the achievement of SDGs

Generate cost synergies
across the whole
Earth Group

Revamp core system

Expand Profit Foundation in Asia

Expand sales & share in
Thailand/Vietnam© Earth Corporation All Rights Reserved.

Real-world implementationof MA-T
9

Act For SMILE‐COMPASS 2023‐Review
 Sales were achieved against the original plan, but operating profit fell short of the plan.
 Sales were 158.3 B yen against an initial plan of 157 B yen. ( Achievement 100.8% ) Operating income was 6.37 B yen, compared to an initial plan of 14 B yen. ( Achievement 45.5％ )(Unit: 0.1 billion JPY)

【 Sales 】
2,000

1,895

1,960

2,037

【 Operating Income 】
Initial forecast
Results & Outlook

150

1,583

125

Initial forecast
Results & Outlook

140.0
1,523

114.1
106.6

1,500

100

1,000

74.3

75

2,000
1,550

1,570

50

63.7

110.0

107.5

39.1

500

25
0

0
2019
2020
2021
Previous Standard© Earth Corporation All Rights Reserved.

2022
2023
New Standard*

2019
2020
2021
Previous Standard

2022
2023
New Standard** Sales converted to the New Standard for Revenue Recognition 10

Management Accounting Basis: Sales / GPM(2021-2023）
 Domestic - Insecticides & Repellents: Upward trend in sales and stable high levels of profitability make thissegment the Company’s core earnings source.
 Domestic - Household products: We saw heightened competition due to a market slowdown and incomplete
cost pass-throughs led to a lower GPM.
 Overseas: Delivered overall sales growth, with a GPM recovery in 2023.
 Total Health Care System: Stable sales growth thanks to growth in the number of contracts. This segment
maintains high profitability second only to Insecticides & Repellents.
(Unit: 0.1 billion JPY)
Sales / GPM by Portfolio
700
600

60%
49.0%

46.9%

47.3%

50%
577

586

500
400

470

486
450

41.1%

560
34.5%

38.7%

33.6%
300

41.7%

40.5%

38.6%

40%

34.6%

32.1%

30.8%

31.4%
30%

31.3%
272

280

291

20%

200
100

132

175

159

123

123

137

2021

2022

2023

0

10%
0%

2021

2022

2023

2021

2022

2023

Domestic: Insecticides
Domestic:& Repellents
Household products© Earth Corporation All Rights Reserved.

2021

2022

2023

Overseas

2021

2022

2023

Total Health Care
SystemOthers*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

11

Domestic: Insecticides & Repellents
Revenue Status
 Amidst the impact from soaring raw material prices, we executed cost pass-throughs as the top
manufacturer in Japan. In doing so, we not just dampened the decrease in profitability, but also
contributed to growing the scale of this market, within which our share grew.
 Product returns improved from 6.5% in 2021 to 6.2% in 2023, with further room for improvement
remaining.
 The Earth Group’s core earnings source remains solid.
(Unit: 0.1 billion JPY)
Domestic: Insecticides & Repellents Post-deduction Sales & GPM*
800

Domestic: Insecticides & Repellents - Trends in Market
Scale & the Earth Group’s Share60%

Insecticides & Repellents Market

Earth's SharePost-deduction Sales
GPM

1,306
50%

600

49.0%

46.9%

1,269

1,312

1,220

1,127

47.3%
40%

56.9%
400

30%

56.2%

55.8%

56.2%

54.9%
200

470

450

486

20%

10%

0

0%
2021

2022

© Earth Corporation All Rights Reserved.

2023

2019

2020

2021

2022

2023

*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

12

Domestic: Household Products Revenue Status(Unit: 0.1 billion JPY) Greater competition in our core markets of bath salts and mouthwash products, due to
new entrants and lower demand.
 While we attempted cost pass-throughs amidst a decrease in market share, we wereunable to deliver sufficient results.
Domestic: Household Products Post-deduction Sales & GPM*
60%
Post-deduction Sales

GPM

50%

600
40%

Bath salts

800

Trend in Market Share for the Main Product Categories

38.7%

577

586

31.3%

560

0

20%

0%

© Earth Corporation All Rights Reserved.

691

662

46.6%

45.9%

44.6%

43.7%

2020

2021

2022

2023

Mouthwash Market

10%

2022

Earth G. Share

30%

200

2021

47.3%

2019
33.6%

2023

Mouthwash

400

568

Bath Salts Market
697
654

Earth Share

440

471

492

504

487

22.3%

21.0%

19.9%

18.7%

18.2%

2019

2020

2021

2022

2023

*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

13

Domestic: Household Products Diversification of Categories Offered In anticipation of increased demand resulting from the COVID-19 pandemic, we launched
products in new categories, e.g., sanitizer and nursing care products, and household
detergents. However, rapid and drastic changes in the market environment have led to lower
profitability.
 This diversification led to dispersion in terms of marketing recourses, so there is a need for us
to refocus these on our core competences and enhance brand awareness in core categories.
Examples of Product Launches in New Categories

Sanitizer products© Earth Corporation All Rights Reserved.

Nursing care productsHousehold detergents
14

Overseas: Revenue Status In ASEAN, we are seeing steady sales growth in Thailand and Vietnam, and are now in an expansion
phase in Malaysia and the Philippines.
 Strong results in the export business, especially exports to the Middle East and the U.S.
Conversely, the cross-border e-commerce business targeting the Chinese market worsened.
 Lower sales in China, also partially on account of changes in the external environment in the region.
Overseas: Sales by Category*Overseas: Post-deduction Sales & GPM*
200

60%
Post-deduction Sales(Unit: 0.1 billion JPY)

200

GPM

ASEAN

Exports (Incl. cross-border)

China

50%
150

150
40%

100

34.5%

32.1%

159

34.6%

30%

100

175

132

20%

50

132
113

50

77

10%

0

0%
2021

2022

2023

© Earth Corporation All Rights Reserved.

26

24

28

28

22

16

2021

2022

2023

2021

2022

2023

0
2021

2022

2023

*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

15

Overseas: Business Status

VietnamFocus on insecticides & repellents, air
fresheners/deodorants, and mouthwash.
Secured no. 2 market share in insecticides &repellents (16.8% in 2023); aim for no. 1 by 2025
in Thailand.
Work to enhance the brand value of [ARS] throughinitiatives to prevent the spread of dengue fever.
Steady performance from our core category ofhousehold detergent products.
Enhanced EARTH NO MAT and aerosol products
within insecticides & repellents and increased numberof stores carrying these SKUs.
Success in growing the number of stores carrying our
air fresheners/deodorants and mouthwash products.



Malaysia

Thailand

ASEAN Expansion Area (Malaysia & The Philippines)

Philippines

ASEAN Core Area (Thailand & Vietnam)







Carried out business primarily in Saudi Arabia.
Brought an enhanced version of EARTH NO MAT
to market, allowing us to grow results.

Success from the introduction of new products,
primarily insecticides & repellents.

Business expansion strategy with cockroachcontrol products at its core.

© Earth Corporation All Rights Reserved.

LocallyStarted business development following M&A in
2022.
Introducing insecticides & repellents with existing
channels/products as the core.
Promote the development of new channels.

China

Crossborder

NA

TaiwanME

Exports

Established in 2019. This was immediately followed by
the outbreak of COVID and its associated restrictions,leading to results falling short of our estimates.
Carried out contract reviews with distributors in orderto rebuild sales channels.
Further efforts to introduce staple products to main
accounts & promote the development of new channels.

Significant slump following a market slowdown.
While we focused on developing EC channels, we
saw a sluggish performance in terms of shipments,
starting in 2023, due to excess inventories.



Cross-border struggled due to changes in theexternal environment, e.g., a slump in the
livestream shopping market.

16

Total Health Care System: Revenue Status
 The number of contracts has grown year in, year out, fueled by greater demand, with arobust foundation allowing us to deliver earnings in a stable manner.
 There is room for further global expansion, including to Vietnam in addition to China
and Thailand.
Total Health Care System Post-deduction Sales & GPM*
(Unit: 0.1 billion JPY)

350

Total Health Care System - Trend in Annual Contract Numbers

60%

THC

Post-deduction Sales
300

GPM
50%

15,000PC

BM

15,04015,208

1,454

1,442

5,869

6,417

6,543

7,144

7,169

7,223

2021

2022

2023

14,466
1,453

250

41.1%

41.7%

200

40%

40.5%
10,000
30%

150

272

280

291
20%

100

5,000

10%

50
0

0%
2021

2022

© Earth Corporation All Rights Reserved.

2023

0

*On the basis of the Earth Corporation’s management accounting.

17

Impact of Changes in the External Environment
 Soaring prices for raw materials, packaging & other materials, manufacturing costs, etc.
led to a net increase in costs of 6 billion yen in 2 years.
 We had planned a total profit contribution of 3.0 billion yen from price revisions in 2023.
Here, while Insecticides & Repellents delivered good results, results were anemic forHousehold products, so ultimately, price revisions translated into a contribution of 2.1
billion yen.
Impact from Soaring Raw Material Prices, etc.
80

Positive Effect from Price Revisions(Unit: 0.1 billion JPY)
2023 increase2022 increase[Profit Impact Target]

60

40[Profit Impact]

32.5

20

27.5
0
© Earth Corporation All Rights Reserved.

Spring: 68 SKUs (Insecticides & Repellents:49; Household products:19)
18
Fall: 45 SKUs (Household products)

Investment Carried out During the MTBP Raised 12.5 billion yen in equity financing in 2020.
 More active capex, e.g., upgrading our IT infrastructure and enhancing production
capacity.
 Acquired the [BARTH] brand through transfer and also carried out M&A investment
through the acquisition of a local subsidiary in the Philippines, etc.
Equity Financing & Investments
Initial Intended Use•

2020
Equity financeRealized Uses

Investment to expand
our profit foundation in
Asia

•
•

Acquired [BARTH]: 3.5 B yen
Acquired [EHPPI]: 2.0 B yen

Investment in ESG &Innovation•

MA-T-related investment••

Investment in ICT
infrastructure
Investment in DX•

New capex•

12.5 B yen•

Exploratory upfront investment

Expanded production capacity
for our [Onpo] bath salts
Improve manufacturing efficiency© Earth Corporation All Rights Reserved.

5.5 B yen
4.0 B yen

Revamping of core systems
Build a system to help improve
profitability by further enhancing theaccuracy of supply/demand forecasts•

Investment
Amount

3.0 B yen
2.5 B yen
19

System Investment & Management Accounting
Enhancements
 Completed building our core system, integrating and preparing all processes anddata – from the production phase all the way to sales.
 Separate fixed/variable expenses to better understand the earnings structure,
allowing for more sophisticated forecasting and management.
Work to restructure the portfolio by increasing revenue transparency on a percategory/business department basis.
Revamping of the Core System

Earth’s Management Accounting: Items
Total Sales
Product Returns■ Project – Overall Outline

Net Sales

Toward PJ integrating revamped
product sales & EPS
ERP (Financial Accounting)Sales Promotion Expenses
Post-deduction Sales
COGS

ERP (Management Accounting)

Product Disposal Expenses
FormulaSupp/ Dem. Production
development QA
plan
plan

Procurematerials

QC

Production

QC Distribution(Sales)Gross Profit
Distribution Expenses
Marginal Operating Income

Scheduler
ERP (Production plan / MRP)

Variable
Expenses

Decisions re: commercialization & productprofitability evaluation indicator

Business Department Expenses
ERP (Production plan / MRP)

Rebuild the supply/demand plan process(Expand throughput)

Carried out a comprehensive system revamp –from the engineering chain to the supply chain,and promoted digitalization.
Aim toward productivity improvements.
(expand throughput).
© Earth Corporation All Rights Reserved.

Direct Operating Income Business Department Evaluation Indicators
Advertising Expenses
R&D Expenses
Marketing / Research Dept. Expenses
Contribution Margin

Fixed
Expenses

Business / Category profitability evaluation indicator

Staff Dept. Expenses
Operating Income

Within management accounting, the Earth Corporation has its
own proprietary definition of “Marginal Operating Income.”
Put in place a structure for the timely reporting of monthly data.

20

Review - Summary While we started efforts to expand business and improve profitability in overseas areas,each initiative has seen varying levels of success, and we‘re currently still in the process ofshifting to a leaner management structure.

1

While our overseas business continues on an expansion trajectory, challenges related to
growth remain for each country and their respective business stages.
•2

Insecticides & Repellents continue to generate stable revenue.
Unable to fully complete cost pass-throughs for Household products, leading to aworsening in revenue. Need to enhance brand recognition to nurture second revenue pillar.
••

3

While we succeeded in delivering sales growth in the ASEAN region and the export business, wewere unable to achieve sales growth and market share expansion in China due to changes in theexternal environment.

Cost pass-throughs in Insecticides & Repellents allowed us to limit the impact of soaring raw material
prices, but reducing product returns remains an issue.
Progress in diversifying categories with sanitizers, nursing care, and household detergent products.
This led to dispersion in brand investment, which among other factors, resulted in insufficient resource
allocation to our core products of bath salts/mouthwashes and a decrease in market share.

Promoted system investment and the introduction of management accounting.
Put in place a foundation toward a comprehensive transformation going forward.
••

Centralized data – all the way from manufacturing to sales. Reviewed the workflow throughdigitalization and are working to expand throughput.
Build management accounting structure allowing for the monitoring of business and category
revenue in a timely manner. Toward portfolio restructuring.

© Earth Corporation All Rights Reserved.

21

New Mid-term Business Plan (2024-2026)

Targets in the New MTBP to Address Issues
Continue enhancing the earnings structure while also carrying out
growth investment in Household products in Asia and Japan

1

While our overseas business continues on an
expansion trajectory, challenges related to growth
remain for each country and their respective
business stages.

Work to further accelerate growth in theOverseas business, which has highgrowth potential.

2

Insecticides & Repellents continue to generate
stable revenue.
Unable to fully complete cost pass-throughs forHousehold products, which led to worsening inrevenue.
Need to enhance brand recognition to nurturesecond revenue pillar.

Nurture Household products as asecond revenue pillar while enhancing
brand recognition.

3

Promoted system investment and the introductionof management accounting.
Put in place a foundation toward a comprehensive
transformation going forward.

Enhance overall Group governance andaim to execute restructuring toward thegeneration of synergies.

© Earth Corporation All Rights Reserved.

23

Concept for the New MTBP
preparatory period toward a shift from individualThree-year
各社個別最適からグループ全体最適に向けた準備の3年間にする
optimization to overall Group optimization efforts

Execute structuraltransformation
to enhance earnings

Domestic operations
drive revenue
Overseas operations
drive sales

Synergy generation
Group restructuring
Enhance governance2025 – which marks the Company’s 100th Anniversary –will see the rebirth of the Earth Group© Earth Corporation All Rights Reserved.

24

Positioning of the New MTBP
Three-year period to build a revamped structure 現中期経営計画の重点方針との連動は以下の通り
for the Earth Group

Reform Corporate Compass &Infrastructure

Medium-Term Business Plan (2021 - 2023) Main Drivers

Medium-Term Business Plan (2024 - 2026) Main Drivers

Expand Profit
Foundation in Asia

Transform the earnings
structure

ESG / Open
Innovation

Expand sales overseas

Generate Cost
Synergies

Group restructuring /Enhance governance© Earth Corporation All Rights Reserved.

25

MTBP

Act For SMILE COMPASS 2026
Our Group Working Together
Toward a Bright Tomorrow for EARTH
Now is the time to fully actualize the Earth Group’s potential.
Throughout the duration of the MTBP, we will be putting inplace a structure allowing us to actualize our potential,
allowing the Earth Group to grow to become an even morerobust organization toward a bright future.

Earth Group’s
Medium-to-long-term
Concept

Our Group Working Together
Toward a Bright Tomorrow for EARTH

Next MTBP
Transform the earnings structure & build a framework

Expand Profit
Foundation in
Asia

Generate Cost
Synergies

ESG / Open
Innovation

ReformCorporate
Compass &InfrastructureGrowmarketshare

Cultivatemarkets

Reviewbusinesses

Drive revenue: Domestic
Shift thebusiness
portfolio

Optimizereleaseallocation

Enhance global expansion

Nurture a second revenue
pillar after Insecticides &Repellents

Build a foundation: Group

Build afoundation fordiverse businessdevelopment

Enhance oversight ofOverseas/Group companies

Enhance M&A capabilities

Group
restructuring &enhanced profit
structure

Enhance investment
profitability

Maximize Groupsales & profits

Operating Income
MarginDrive sales: Overseas

Main Driver ①: Transform the Earnings Structure
Nurture a second revenue pillar following
Insecticides & Repellents• Concentrate in brand, SKU core competencies‣ Review our expanded product selection in Household products and focus on
products with future potential and profitability.
‣ Selection to reduce the number of SKUs tracked. (Aim for a 30% reduction.)• Proactive investment in Bath salts/Oral hygiene products‣ Review allocation of marketing resources and promote brand awarenessand WTP (Willingness To Pay).
‣ Foster favorable associations by customers and re-formulate KPIs to track
and increase customer’s rate of recall associated with our brand.

• Raise unit values ASAP by raising the value of our brand‣ Enhance customer-oriented marketing communication.
‣ Raise customer mind share by developing an effective message tocommunicate to our target customers and through content creation.
© Earth Corporation All Rights Reserved.

28

Main Driver ①: Transform the Earnings Structure
Leverage the corporate compass & infrastructureand derive benefits• Reduce the COGS ratio‣ Our policy is to aim to reduce our environmental footprint and eliminate productreturns in Insecticides & Repellents. We further seek to reduce product waste.

‣ Lower costs by enhancing our sourcing for the overall Group and globally.

• Enhance manufacturing and sales coordination‣ Promote S&OP and enhance supply/demand adjustment functions to achieve
the automatic proposal of optimal production plans.
Minimize product shortages and optimize inventories to improve cash flow.
‣ Reduce fixed expenses and CO2 emissions through the fundamental review of
distribution operations.

• Optimize marketing expenses‣ Review the allocation of advertising and sales promotion expenses towardenhancing our brand and eliminating product returns. Through these efforts,
we seek to optimize our marketing portfolio.
© Earth Corporation All Rights Reserved.

29

Main Driver ②: Expand Sales Overseas
Put in place a growth foundation in coordination with
our strategy for each area
• Enhance strategies on a per-area basis‣ Growth potential: Promote further acquisition of market share in
Thailand/Vietnam and expand exports into North America and the Middle East.
‣ New areas: Expand sales channels in Malaysia/the Philippines and work
to build a sales foundation.
‣ Strategy review: Shift to a strategy focused on earnings in China, which
continues to see market weakness.

• Enhance overseas supply chains‣ Enhance supply chains from a standpoint of overall optimization linked withthe medium-to-long-term plans for each area.
‣ Build a manufacturing structure including M&A.

• Enhance human resources toward a global shift‣ Actively promote the hiring and training of global human resources.
‣ This is the Earth Group’s main human capital materiality.
© Earth Corporation All Rights Reserved.

30

Main Driver ③: Group Restructuring
Restructure our organization from the standpoint of overall
optimization toward generating synergies.
• Carry out Group restructuring‣ Concentrate/integrate corporate planning functions and establish[Corporate Planning Headquarters] to advance transformation.
‣ Launch a Group restructuring project for total optimization with theobjective of generating synergies.

• Enhance our M&A structure‣ Restructure a long/short list of M&A projects.
(Overseas/new categories/VC, etc.)‣ Enhance due diligence efforts and put in place an adequate hurdle rate.
‣ Enhance our PMI structure in order to generate synergies ASAP.

© Earth Corporation All Rights Reserved.

31

Overview of Profitability & Capital Efficiency(Unit: 0.1 billion JPY)

 While ROE and ROIC are down as a result of a decrease in our earnings power andprofitability, the debt ratios remain low and WACC remains high following the executionof equity financing in 2020.
 The efficient use of Debt to allow for growth investment remains a challenge, also fromthe point of view of achieving an optimal capital structure and capital cost.
Profitability & Capital Efficiency

EBITDA & D/E Ratio & Debt/EBITDA

14%

250
12.4%

12%
10.0%

10%

EBITDAROE

D/E Ratio

ROIC
11.3%

4.0x

OI Margin

D/EBITDA

200

8.6%
8%

5.8%

6.4%

6%
4%

4.8%

149

150

7.4%

4.9%

3.0x

176

WACC

8.0%

117

4.9%

6.3%
5.6%

5.0%

4.6%
4.0%

106

2.0x

100
0.96x
1.0x
50

2%

0.31x
0.10x
*WACC estimated by Earth Corporation

0%

0.26x
0.06x

0.21x
0.04x

0.15x

0
2020

2021

2022

© Earth Corporation All Rights Reserved.

2023

0.0x
2020

2021

2022

2023

32

Cash Allocation (2024 - 2026 Cumulative: Outline) Transform the earnings structure to improve profitability and inventory efficiency as a base forgenerating cash.
 We expect to utilize Debt as a source for growth investment, all the while ensuring
the maintenance of a sound financial foundation.
 Continue the stable payment of dividends as part of shareholder returns.
CF from
investingactivities

Debt
net
increase

30.0 B yen
CF from
operatingactivities‐Agile approach to procuring debt when necessary.
‐D/E ratio: 0.3 - 0.4x – ensuring a sound financial
foundation.

[Investment]: We are planning on approx. 30.0 B yen

27.5 B yen

Shareholder
returns

7.8 B yen
CF from operating
activities[Interest-bearing debt]

CF from investing
activities© Earth Corporation All Rights Reserved.

CF from financing
activities‐Structural transformation capital:
5.0 - 6.0 B yen‐Investment in infrastructure/IT digital:
15.0 B yen (5.0 B yen/year)‐Investment in human resources:
1.0 B yen
‐Capital for future M&A:
10.0 B yen【Shareholder returns policy】‐Distribution of stable dividends aiming for a DOE target
of 4%.
‐Consider flexible share buyback programs.
33

2026: Quantitative targets
 As of 2026, the reaping of some of the results of the structural reforms will start, but is considered
only a passing point.
 After three years of preparation, dramatic growth will be achieved from 2027 onwards.

(Unit: 0.1 billion JPY)

2023 Realized

Profitability

CapitalEfficiency

Financial health2026 Plan

Rise & Fall

Consolidated Sales

1,583

1,700

＋117

（Overseas sales*）Sales ratio

175

250

11.1%

14.3%

＋75
＋3.2ptOperating Income

63.7

70

＋6.3

OIM

4.0%

4.1%

＋0.1ptNet Income attributable to ownersof parent

41.0

43.0

＋2.0

ROE

6.3%

7.2%

＋0.9pt

ROIC

5.6%

5.4%

- 0.2pt

WACC

4.6%

4.1%

- 0.5pt

D/E Ratio

0.15x

0.3～0.4x

Shareholder
DOE
returns© Earth Corporation All Rights Reserved.

4.0%

maintain

4% level*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

34

2024: Plan Highlights
 We expect to incur non-recurring expenses related to structural transformation. In addition toactive investment in human resources, we have plans for active investment in key categories.
(Bath salts and Oral care, which we position as our next major revenue source.)
 Also in light of the impact of soaring raw material prices, we forecast a profit decrease(Unit: 0.1 billion JPY)
in FY 2024.
2024 Plan

Highlights

•

Sales

Gross Profit
SG&A
Expenses

We forecast sales growth in all 5 classifications within management
accounting.
Plans to execute price revisions in Insecticides & Repellents in Japan
this fiscal year, as well.

1,583

•
•

Expected COGS impact from soaring raw material prices of 1.1 B yen.
Profitability impact for Domestic Insecticides & Repellents and Householdproducts.

636.2

•
•

This FY we expect 1.5 B yen in expenses related to structural transformation.
We expect +1.6 B yen in human resources investment and +1.1 B yen
in investment in nurturing our brand.

572.5

1,650 •
658.3

628.3

2023 Realized

Operating
Income30.0 •

Temporary profit decrease due to structural transformation.

63.7

Net Income
attributable toowners ofparent17.9 ••We expect non-operating income and expenses in line with last year.
We don’t expect large extraordinary income and loss items.

41.0

ROE

2.7% •

Due to a temporary decrease in profitability.

6.3%© Earth Corporation All Rights Reserved.

35

Management Accounting Basis: Sales & GPM(2023 vs 2024)
 Domestic - Insecticides & Repellents: We expect to continue carrying out price revisions and toachieve higher sales by growing our market share.
 Domestic - Household products: We expect sales growth thanks to a market share recovery in
our core categories.
 Overseas: We expect sales growth, primarily centered around ASEAN and exports.
 Total Health Care System: Continue stable growth.
Sales & GPM by Portfolio(Unit: 0.1 billion JPY)

700
600

60%
47.3%

50%

45.9%

560

500

486

567

503

34.6%
31.3%

400

40.5%

41.0%

36.8%

34.4%

40%

31.4%

31.2%

30%
300
291

300

20%

200
200

175
100

137

143

2023

2024
TargetOthers

0

10%

0%
2023

2024
TargetDomestic: Insecticides& Repellents

2023

2024
TargetDomestic: Householdproducts© Earth Corporation All Rights Reserved.

2023

2024
TargetOverseas

2023

2024
TargetTotal Health Care
System*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

36

Vision for the futureMTBP

Act For SMILE COMPASS 2026
Our Group Working Together
Toward a Bright Tomorrow for EARTH
Now is the time to fully actualize the Earth Group’s potential.
Throughout the duration of the MTBP, we will be putting inplace a structure allowing us to actualize our potential,
allowing the Earth Group to grow to become an even morerobust organization toward a bright future.

COMPASS = MTBP (Guiding Principles)

C: Customer first
O: Open communication
M: Mind-set for evolution
P: Proactive challenge
A: Agility in Asia
S: Sustainability
S: Smile© Earth Corporation All Rights Reserved.

39

Earth Group’s
Medium-to-long-term
Concept

Our Group Working Together
Toward a Bright Tomorrow for EARTH

Next MTBP
Transform the earnings structure & build a framework

Expand Profit
Foundation in
Asia

Generate Cost
Synergies

ESG / Open
Innovation

ReformCorporate
Compass &InfrastructureGrowmarketshare

Cultivatemarkets

Reviewbusinesses

Drive revenue: Domestic
Shift thebusiness
portfolio

Optimizereleaseallocation

Enhance global expansion

Nurture a second revenue
pillar after Insecticides &Repellents

Build a foundation: Group

Build afoundation fordiverse businessdevelopment

Enhance oversight ofOverseas/Group companies

Enhance M&A capabilities

Group
restructuring &enhanced profit
structure

Enhance investment
profitability

Maximize Groupsales & profits

Operating Income
MarginDrive sales: Overseas

VisionBecome one of the Top 5 manufacturersof Household products in Asia by 2030
1
Maintain our no.1 positionin the domestic
Insecticides & Repellents
market and acquire EHP/
EGP share inbath salts/oral care

2
Secure a top-class positionin Asia in the category of
Insecticides & Repellents
and Household products

3
Improve profit margins
through a strategy
fine-tuned toeach category’s
market potential

Technology / Products

Human resources

Our objective is the creation of newvalue from a customer-oriented point ofview, leveraging the strengths unique tothe Earth Corporation to develop andoffer high value-added products.

Train human resources with [a desire toaddress customer pain points andneeds], [the drive to challenge oneself
without fear of failure] and [the ability tobuild up a business from a global
vantage point]

Managementfoundation© Earth Corporation All Rights Reserved.

Promote DX with the objective ofimproving efficiency and increasing
added value. Execute an investment
strategy to deliver value creation in a
way that only the Earth Group can.

41

Earnings Structure Target for 2028
 Transform the earnings structure and continue price revisions, making steady progress
toward achieving our quantitative targets for 2026.
 In 2027 and beyond, we expect to reap the fruits of this transformation and improve
profitability.
2023 (Realized)

2026 (Forecast)

2028 Estimate

Vs. 2026

COGS Margin
59.8%

COGS Margin58.1%

SG&A Margin36.2%

SG&A Margin
37.8%
OIM
4.0%

Sales

COGS

SG&A

OI

© Earth Corporation All Rights Reserved.

COGS
Margin-1.5ptSG&A
Margin-1.5ptOperating
IncomeMargin+3.0pt

OIM
4.1%

Sales

COGS

SG&A

OI

42

APPENDIX.

© Earth Corporation All Rights Reserved.

Progress Toward The Operating Income Target(Quarterly / Cumulative)(Unit: 0.1 billion JPY) Q4 losses narrowed as a result.

Q1

Q2

Q3

Q4

Quarterly
45.0

63.0

55.3

43.9
66.2

53.2

0.7

4.0
▲ 7.0

▲ 45.8▲ 32.0 ▲ 28.5

Quarterly

108.0

Cumulative
45.0

55.3

112.0
99.2

92.2

63.7
119.4

120.1
74.3

53.2
2022
2023
2023
(Realized) (Forecast) (Realized)© Earth Corporation All Rights Reserved.

80.0

2022
2023
2023
(Realized) (Forecast) (Realized)

2022
2023
2023
(Realized) (Forecast) (Realized)

2022
2023
2023
(Realized) (Forecast) (Realized)

45

Operating Income Change Factors (YoY)(Unit: 0.1 billion JPY)

 Our price revision strategy bore some fruit, and sales growth excluding price revisions also
contributed to sales.
 Conversely, soaring prices, e.g., raw materials, offset the gross increase in profits. This wascoupled with increases in personnel and distribution expenses, and expenses from sales
activities, resulting in lower profits.
Decrease factors (-58.3)

Increase factors (+37.6)

Soaring raw material prices -32.5
Cost pass-throughs

21.6

Sales Δ (Excluding price revisions)

22.4

Personnel expenses
Distribution expenses-9.2(Breakdown)

-4.9

0.7

Advertising expenses
Expenses from sales activities
Other expenses
Goodwill amortization© Earth Corporation All Rights Reserved.

Impact of sales volume decrease:-2.83 B yen
Positive impact of higher unit prices:
4.99 B yen

-3.5
-8.4
3.1
46

Status of the Insecticides & Repellents
Segment (Domestic)
Trends in the Domestic Market by 4-week Period(Unit: 0.1 B JPY)

300





YoY underperformance early in the season, but latera recovery during peak season.

Domestic Market - Product Returns(Unit: 0.1 B JPY)800

YoY increase starting in June and beyond.

250

As hot weather persisted late into the season in
2023, consumers continued to buy our products,
leading to a reduction in the product return
percentage.

600
2022
2023

200

Returns
400

6.9%

6.5%

150

6.8%

6.2%

Net Sales
Returns %

4.8%
100

200

50
0

0
1-4w

5-8w

9-12w 13-16w 17-20w 21-24w 25-28w 29-32w 33-36w 37-40w 41-44w 45-48w 49-52w

Market overview & Earth Corporation’s
market share as of 12/31/2023[Market YoY]

2019

2020

2021

2022

2023

Sales Change Factors (Vs. Forecast)[Market Share]

107.5% 56.9% ＋0.6pt

Contribution from new products
Benefits from cost pass-throughs
Other existing products© Earth Corporation All Rights Reserved.

-7.8
-4.4
13.6

47

COGS - Status Overview(Unit: 0.1 billion JPY) The impact at the end of the financial year exceeded expectations at 3.25 B yen, compared to theassumed annual impact of 2.5 B yen.
 The main reasons for the higher-than-expected results were higher energy costs and higher
purchase prices for semi-finished products.
Rising COGS
60
50

Ingredients
Packaging
Processing
LFY increase■Ingredients
8.0
8.0

6.0

7.0

40

18.5
10.0

30

In addition to price increases in FY 2022, we were also
faced with cost increases for active ingredients for
insecticides, sodium bicarbonate, alcohol, etc.

■ Containers / Packaging materials
Price increases across the board, for PET resins, exterior
cases, cans, etc.

20
10

27.5

LFY
increase

LFY
increase

FY 2023
Full-year forecast

2023

0
2022

© Earth Corporation All Rights Reserved.

■Processing expenses／Outsourcing
Higher energy costs translated into an increase in aerosol
filling costs, etc.
Increase in purchase price of semi-finished products

48

Overseas Results
 Steady sales increase in Thailand and Vietnam, coupled with a strong
exports performance to the Middle East and the United States.
 Expansion phase in the Philippines and Malaysia.
 Decrease in sales on account of changes in the external environment in China.

(Unit: 0.1 billion JPY)

Overseas sales (Includes cross-border EC)
200

Exports / Cross-border EC

Overseas OI (Simple sum)

← Previous standard Current standard →

8.4%

China

165.0

Philippines

149.1

Malaysia

150

VietnamThailand

123.8
32.4

27.4

28.3

25.7

26.5

29.3

28.4

31.6

35.8

37.8

41.1

34.2

24.2

15.8
21.8

50

127.4

15

6.3%

33.0

29.7

99.8
100

118.7

29.9
24.4
1.5
44.9

17.4
1.7 8.6

Operating
IncomeOperating
Income Margin

12.5
10

10.3

53.1
5

44.9

51.2

0

0
2018

2019

2020

© Earth Corporation All Rights Reserved.

2021

2022

2023

2022

2023

49

Shareholder Returns【Shareholder Returns Policy】
 Adopt an agile approach and, should our performance and retained earnings levels allow it,
consider raising dividends and/or executing share buybacks.
 The dividend per share for 2024 is expected to remain unchanged from 2023 at 118 .
Dividend-related KPIs
DOE（Dividend on Equity Ratio）

Ordinary Dividend Per Share - Trend（Unit: JPY）

120

118

118

118

118

2021

2022

2023
(Plan)

2024(Forecast)

115
110

2023

2024 (Forecast)

4.0% ➡ 4% level

100

90

80

© Earth Corporation All Rights Reserved.

2020

50

Value Creation Through Initiative Themes(Business Contribution)
 Contribute to MTBP results through human resources materialities within
initiative themes.
Realize MTBP Themes
Pool human resources toward
overseas expansion

Reduce fixed costs through theconsolidation of various functions

3. Secure & train the necessary human resources
for our management/business strategies

Supply and leverage
human resourcessought-after by ourcompanies/businesses

Enhance oversight of overseas /Group companies

4. Support & put in place a structure for
employee-driven career development of adiverse workforce

Re-skilling(Provide employeedriven opportunities)

HR reform(Position / remuneration/ evaluation)キ
Put in place andleverage a career
support framework

More sophisticatedworkforce/hiring plan

Skill management(Skill transparency)

Strategic hiring
and training

Revise the objectives
target program(Shift to OKR)

Leader incubator

Cultivate Earth’s corporate culture

Further improve theworkplace environment

Deepen Earth’s corporate philosophy
Deliver Group synergies© Earth Corporation All Rights Reserved.

2. Improve the workplaceenvironment & cultivate ourcorporate culture to further
increase employee Well-being

1. Generate cost synergies byenhancing Group management
Initiative themes51

Training Human Resources Sought-after
by the Earth Group
Highly engaged,
diverse humanresources with careerdevelopment
opportunities leading
to greater Well-being

 Contribute not just to business development but
also to sustained employee career development.
 Aim to be a model Company to work for.

Our Hope.

How Act for future.

Raise
engagement

Pass on Earth’s
corporatephilosophy

Supportemployee-driven
careerdevelopment

Raise
Well-being Actions toward the vision of highly engaged, diverse human resources withcareer development opportunities leading to greater Well-being
Cultivate Earth’s
corporate culture
Further improve theworkplace environment
2. Improve the workplace environment& cultivate our corporate culture tofurther increase employee Well-being

Deepen Earth’s
corporate philosophy

1. Generate cost synergies byenhancing Group management

Put in place andleverage a career
support framework

Revise the objectives
target program(Shift to OKR)

Skill management(Skill transparency)

HR reform(Position / remuneration /evaluation)

4. Support & put in place a structure for
employee-driven career development of adiverse workforce

Structural transformation at the organizational and function level for the creation of a framework for training and© Earth Corporation All Rights Reserved.
leveraging human resources sought-after by our businesses

52Supplementary Materials;
FY12/2023 Results

Consolidated: Statement of Income（Unit：million JPY）

Q4 FY12/22 Q4 FY12/23 Q4 FY12/23
Realized
Sales

Forecast

Realized

FY12/24
YoY

vs.FCT

Original forecast

YoY

152,339

160,000

158,344

1.0pt

1.0pt

165,000

104.2%

89,87093,50094,719

1.1pt

1.0pt

99,168104.7%

62,46866,50063,624

1.0pt

1.0pt

65,831103.5%

55,03458,50057,254

1.0pt

1.0pt

62,831109.7%

7,434

8,000

6,370

0.9pt

0.8pt

3,000

47.1%

Non-operating income

747

600

818

1.1pt

1.4pt

700

85.6%

Non-operating expenses

47

300

396

8.3pt

1.3pt

140

35.3%

8,133

8,300

6,791

0.8pt

0.8pt

3,560

52.4%

Extraordinary income

60

0

12

0.2pt

Extraordinary losses

136

80

240

1.8pt

3.0pt

60

24.9%

8,057

8,220

6,563

0.8pt

0.8pt

3,500

53.3%

2,417

2,483

2,153

0.9pt

0.9pt

1,370

63.6%

5,639

5,736

4,410

0.8pt

0.8pt

2,130

48.3%

Net income attributable to non-controlling interests

336

336

307

0.9pt

0.9pt

340

110.5%Net income attributable to owners of parent

5,303

5,400

4,102

0.8pt

0.8pt

1,790

43.6%

Gross profit ratio

41.0%

41.6%

40.2%

- 0.8pt- 1.4pt

39.9%

Operating income ratio

4.9%

5.0%

4.0%

- 0.9pt- 1.0pt

1.8%

Net income before income taxes ratio

5.3%

5.1%

4.1%

- 1.1pt- 1.0pt

2.1%

Cost of sales
Gross profit
SG&A expenses
Operating profit

Ordinary profit

Net income before income taxes
Income taxes
Net income© Earth Corporation All Rights Reserved.

0

supplement 1

Consolidated: Sales by Segment（Unit：million JPY）

Q4 FY12/22 Q4 FY12/23 Q4 FY12/23
Realized

Forecast

Realized

FY12/24
YoY

vs.FCT

Original forecast

YoY

Insecticides & Repellents

59,36861,71362,031104.5%

100.5%

65,175105.1%

Oral hygene products

8,191

8,442

8,364

102.1%

99.1%

8,916

106.6%

Bath salts

26,94628,51826,041

96.6%

91.3%

26,375101.3%

Other household products

33,13734,01632,793

99.0%

96.4%

34,319104.7%

Household products

68,27570,977

67,199

98.4%

94.7%

69,611103.6%Pet products & others

8,843

9,465

9,776

110.6%

103.3%

10,292105.3%

Household products business subtotal

136,486

142,156

139,007101.8%

97.8%

145,079

104.4%

General environment & sanitation businesssubtotal

27,97328,50029,073103.9%

102.0%

30,000103.2%

Total sales include internal sales

164,460

170,656

168,081102.2%

98.5%

175,079

104.2%(Adjustments)- 12,121- 10,656- 9,736

Total sales

152,339

160,000

158,344103.9%

99.0%

165,000

Insecticides & Repellents

36.1%

36.2%

36.9%

0.8pt

0.7pt

37.2%

Household products

41.5%

41.6%

40.0%

- 1.5pt- 1.6pt

39.8%

Pet products & others

5.4%

5.5%

5.8%

0.4pt

0.3pt

5.9%

Household products business

83.0%

83.3%

82.7%

- 0.3pt- 0.6pt

82.9%

17.0%
© Earth Corporation All Rights Reserved.

16.7%

17.3%

0.3pt

0.6pt

17.1%

- 10,079
104.2%(Composition ratio)

General environment & sanitation businesssupplement 2

Operating Income Change Factors (YoY)
7,434-1,064（Unit：million JPY）

2022 (Realized)
Increase ingross profit•+1,156••••

Increase in
SG&A expenses

•
•
•
•

-2,220

•
•
•

6,370

2023 (Realized)© Earth Corporation All Rights Reserved.

＜Breakdown＞
Effect of revenue increase (excluding the+974
effect of price pass-through)Price shifting effect+2,164
Sales contribution of BARTH business+630
Model mix
+639
Impact of raw material prices and-3,250exchange rate fluctuations
Increase in personnel expenses-922
Increase in distribution expenses-492
Decrease in advertising expenses+74
Increase in sales promotion-16
expenses(other than sales deductions)
Costs of travel & transportation-348
expenses, other activities
Amortization of goodwill+310
Others(Commission paid, Depreciation-826
paid, etc.)+: Factors contributing to higher earnings,-: Factors contributing to lower earnings

supplement 3

Operating Income Change Factors (vs. Forecast)（Unit：million JPY）

8,000

-1,6302022 (Realized)
Gross profit below
the forecast•-2,875•＜Breakdown＞
Sales plan achieved (excluding the impact
of price pass-through)Price shift effect•Sales contribution of BARTH business•••

Model mix
-1,327
Impact of raw material prices and exchange-750
rate fluctuations
Personnel expenses below the forecast+188•

Distribution expenses below the forecast+55•

Unspent advertising expenses

+133

•
•

+520

•

Unspent R&D expenses
Costs of travel & transportation expenses,
other activities
Amortization of goodwill•

Others+461

SG&A expenses
within budget+1,2466,3702023 (Realized)© Earth Corporation All Rights Reserved.

-451

+88

-436

-199

+88

+: Factors contributing to higher earnings,-: Factors contributing to lower earnings

supplement 4

Consolidated: SG&A Expenses
FY12/22

FY12/23

FY12/23

Realized

Forecast

Realized（Unit：million JPY）
FY12/24
YoY

vs.FCT

Original forecast

YoY

Personal expenses

20,685

21,795

21,607

1.0pt

1.0pt

23,215107.4%

Shipping expenses

4,502

4,821

4,594

1.0pt

1.0pt

5,049

109.9%

Strage expenses

2,565

2,793

2,965

1.2pt

1.1pt

2,859

96.4%

Advertising expenses

7,393

7,452

7,319

1.0pt

1.0pt

8,493

116.0%

Sales promotion expenses

1,029

1,071

1,045

1.0pt

1.0pt

1,062

101.6%

R&D expenses

3,217

3,821

3,301

1.0pt

0.9pt

3,803

115.2%

Depreciation expenses

1,475

1,653

1,728

1.2pt

1.0pt

2,024

117.1%

Goodwill amortization

429

207

119

0.3pt

0.6pt

146

122.7%

1,317

1,456

1,521

1.2pt

1.0pt

1,690

111.1%

522

532

666

1.3pt

1.3pt

664

99.7%

Comission paid

1,323

1,653

1,493

1.1pt

0.9pt

1,558

104.4%

Sales comission

1,410

1,405

1,246

0.9pt

0.9pt

1,309

105.1%

802

1,549

802

1.0pt

0.5pt

1,915

238.8%

Others

8,365

8,292

8,848

1.1pt

1.1pt

9,044

102.2%

Total

55,03458,50057,254

1.0pt

1.0pt

62,831109.7%

Personal expenses ratio

13.6%

13.6%

13.6%

0.1pt

0.0pt

14.1%

Advertising expenses ratio

4.9%

4.7%

4.6%

- 0.2pt- 0.0pt

5.1%

R&D expenses ratio

2.1%

2.4%

2.1%

- 0.0pt- 0.3pt

2.3%

Travel&transportation expenses

Entertainment expenses

Miscellaneous expenses(Composition ratio)© Earth Corporation All Rights Reserved.

supplement 5

Consolidated: Balance Sheet（Unit：million JPY）

End of

End ofFinal comparison

FY2022

FY2023+/-Current

Cash & deposits

14,772

17,5052,732

assetsTrade receivable

24,16325,6391,476

Inventories

32,25328,266- 3,986

Others

2,772

2,758

- 14

Non-current Property, plant & equipment

29,48331,383

1,899

assetsIntangible assets

5,355

8,774

3,418

Investments & other assets

15,68818,0792,391

124,489

132,407

7,917

Total assets

Current

Trade paypables

35,52530,005- 5,520

liabilities

Short-term borrowings

2,200

10,0007,800

Others

15,615

17,488

1,872

0

0

0

3,129

2,912

- 216

Total liabilities

56,47060,406

3,935

Net assets Total shareholders' equity

59,631

61,415

1,784

Total accumulated other comprehensive income

3,163

5,130

1,967

Non-controlling interests

5,224

5,453

229

68,01872,0003,982

Non-current Long-term borrowings

liabilities

OthersTotal net assets© Earth Corporation All Rights Reserved.

supplement 6

Consolidated: statement of Cash flows（Unit：million JPY）

End of Q4

End of Q4

FY2022

FY2023

YoY

Cash flows from operating activities

3,901

7,524

3,622

Cash flows from investing activities- 6,266- 10,135- 3,869

Cash flows from financing activities- 4,464

4,893

9,358

447

450

2

Net increase(decrease) in cash and cash equivalents- 6,381

2,732

9,113

Cash and cash equivalents at beginning of period

21,027

14,772- 6,254

126

-

- 126

14,772

17,5052,732

Effect of exchange rate change on cash and cash equivalents

Increase in cash and cash equivalents from newly consolidated subsidiaries

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

supplement 7

Consolidated:
Capital expenditure, Depreciation expenses

CAPEX

FY2020 FY2021 FY2022 FY2023 FY2024（Unit：million JPY）
FY2020 FY2021 FY2022 FY2023 FY2023

Realized

Realized

Realized

Realized

Forecast

Realized

Realized

Realized

Realized

Forecast

3,548

2,928

5,878

7,504

5,600

3,334

3,537

3,853

4,118

4,234

Depreciation
expenses

CAPEX

Depreciation
expenses

8,000
8,000

6,000
6,000

4,000

4,000

2,000

0

2,000

FY2020

FY2021

FY2022© Earth Corporation All Rights Reserved.

FY2023

FY20240

FY2020

FY2021

FY2022

FY2023

FY2023

supplement 7

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

BATHCLIN Corporation

Hakugen Earth Co., Ltd.

Earth Pet Co., Ltd.

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

Sales

76,59482,50780,622

15,754

16,60015,40018,923

19,942

17,679

6,502

6,674

6,966

Gross profit

31,002

33,97732,086

6,353

6,548

5,652

5,947

6,148

5,793

2,354

2,408

2,387

Operatig income

3,840

4,458

3,425

974

1,050

307

723

500

534

140

10

34

Earth(Thailand)Co.,Ltd.

Earth Corporation Vietnam

EARTH HOME PRODUCTS（MALAYSIA）

EARTH HOMECARE PRODUCTS（PHILIPPINES）

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

Sales

5,894

5,858

6,494

4,771

5,297

5,666

151

317

170

347

875

859

Gross profit

1,735

1,741

1,988

1,780

2,035

2,335

18

83

17

134

370

417

512

396

539

340

434

490

-149

-134

-165

-44

13

17

Operatig income

Sales

Earth Corporation (Shanghai)

Earth Corporation (Tianjin)

Earth Corporation (Suzhou)

Earth Environmental Service Co.,Ltd.

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

FY22.Q4 FY23.Q4 FY23.Q4

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

Realized Forecast Realized

2,305

2,677

1,551

3,567

3,029

2,559

1,675

1,260

1,035

27,97328,50029,073Gross profit

634

671

310

579

402

421

335

203

144

11,675

11,72011,781

Operatig income

-5

6

-378

205

23

44

136

17

-15

1,430

1,450

1,451

© Earth Corporation All Rights Reserved.

supplement 9

This presentation contains forward-looking statements and financial results forecasts. These forward-looking statements andfinancial 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 fromthose described.