Additional Earnings Briefing Materials for 2Q
of the Fiscal Year Ending December 2024
08/21/2024

Agenda• Financial Result Highlights of 2Q FY 12/2024• Progress in MTBP / Initiatives in 2H• FY 12/2024 Results Forecast© Earth Corporation All Rights Reserved.

1

Financial Result Highlights
of 2Q FY 12/2024

Financial Result Highlights(Unit: 0.1 billion JPY)

 Increase in sales and income.
 Sales overperformance vs. the forecast coupled with ① COGS ratio and ② SG&Aoverperformance allowed the Earth Corporation to reach its income targets.
 Delays in the use of sales promotion expenses, leftover disposal-related costs, andthe carryover of fixed SG&A expenses. We expect to incur these costs in 2H.

①②Net Income attributableto owners of parent© Earth Corporation All Rights Reserved.

3

Management Accounting Basis:
Sales / GPM (2023 vs. 2024)(Unit: 0.1 billion JPY)

 Domestic - Insecticides & Repellents: Sales mostly in line w/ the forecast while profit margin
exceeded expectations.
 Domestic - Household products: Sales of bath salts & oral hygiene products didn’t meetthe forecast.
 Overseas: Strong results in ASEAN and China.
 General Environment and Sanitation Business: Strong results thanks to growth in contract
numbers/amount.
Sales / GPM by Portfolio
70%

500

60%

51.2%
400

49.5%

50.7%
50%
40.5%

300

32.2%

35.7%
30.9%

32.0%

40.9%

39.8%

35.2%

34.5%

36.0%

34.7%

40%

30.6%
30%

200

374

398

394
274

281

20%

272

100
100

118

116

143

147

10%

159
70

72

80

00%
23.2Q
24.2Q
24.2Q
23.2Q
24.2Q
24.2Q
23.2Q
24.2Q
24.2Q
23.2Q
24.2Q
24.2Q
23.2Q
24.2Q
24.2Q
Realized Forecast Realized Realized Forecast Realized Realized Forecast Realized Realized Forecast Realized Realized Forecast Realized

Domestic: Insecticides& Repellents

Domestic:
Household products© Earth Corporation All Rights Reserved.

General Environment andOthers
Sanitation Business*On a management accounting basis.
Consolidated adjustments, e.g., internal eliminations not included.

Overseas4Operating Income Change Factors (Vs. Forecast) As of 2Q, we have been able to offset the negative impact of soaring raw material
prices through the execution of price revisions.
 We met our sales target, leading to an increase in gross profit. SG&A was also lower
than expected and some of these expenses carried over due to the cutoff timing,
leading to significant profit growth.
(Unit: 0.1 billion JPY)
Decrease factors (-1.1)
Soaring raw material prices

Increase factors (+29.7)- 1.0

Cost pass-throughs

3.4

Sales vs. forecast (Excl. price revisions)

8.6

Model mix; Others

2.4

Personnel expenses

3.3

Distribution expenses

1.0

Sales promotion expenses

0.5

Advertising expenses

3.8

R&D expenses
Depreciation expenses
Expenses from sales activitiesOther expenses© Earth Corporation All Rights Reserved.

2.7
- 0.1
0.6
3.45

Consolidated: Balance Sheet(Unit: 0.1 billion JPY)

① Inventories (-4.3 B JPY): Benefits from inventory optimization starting in 2H LFY.

② Borrowings (-3.7 B JPY): Inventory optimization led to lower cash requirements.
2023.2Q

2024.2Q

Change1,499.2

1,548.7＋49.4

Cash & deposits

187.2

236.0

＋48.7

Trade receivables

381.1

394.0

＋12.8

Inventories

336.4

293.4

- 43.0 ①

Property, plant, & equipment

311.4

314.5

＋3.0

Intangible assets

80.587.7＋7.1

Investment & other assets

176.0

195.1

＋19.0

Liabilities

761.6

772.0

+10.3

Trade payables

383.0

413.4

＋30.3

Borrowings

107.2

70.0

- 37.2 ②

Net assets

737.5

776.6

＋39.0

Equity ratio

45.7%

46.6%

＋0.9ptTotal assets© Earth Corporation All Rights Reserved.

Liabil.
772.0

Liabil.
761.6
Totalassets
1,548.7

Totalassets
1,499.2

NetAssets
737.5

2023.2Q

Net
Assets776.6

2024.2Q

6

Progress in MTBP / Initiatives in 2H

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

Our Group Working TogetherToward a Bright Tomorrow for EARTH

Next MTBP
Transform the earnings structure & build a framework

Expand Profit
Foundation inAsia

Generate CostSynergies

ESG / Open
Innovation

ReformCorporate
Compass &InfrastructureGrowmarketshare

Cultivatemarkets

Reviewbusinesses

Drive revenue: Domestic
Shift thebusinessportfolio

Optimize
resource
allocation

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

Grouprestructuring &enhanced profitstructure

Enhance investment
profitability

Maximize Groupsales & profits

Operating Income
MarginDrive sales: Overseas

Progress in Earnings Structure
Transformation
 Steady progress in the execution of reform initiatives to the earnings structure.
 While some efforts are already starting to bear fruit, we expect the bulk of the benefits
to materialize in FY 12/2025 and beyond.
Initiatives

Progress & Future initiatives•
Active investment in bath salts& oral hygiene products.
Optimize marketing costs.

•In light of a challenging 1H, Earth is now workingon a recovery in 2H.
Allocate a larger share of marketing resources
to household products and execute initiatives
to enhance our brand/sales.

•

Concentrate on core brands& SKUs.

••

Good progress in reduction of SKU numbers.
Further room to concentrate on core brands.

•

Enhance manufacturing/salesintegration.

•CF improvements from inventory optimization
carried out in 2H 2023.
We expect further cash efficiency improvementsfrom more granular supply/demand adjustments.

••(Supply chain structural transformation)© Earth Corporation All Rights Reserved.

•9Offensive & Defensive Structural Transformation～Future Initiatives～ Two-pronged structural transformation combining Offense = future growth andDefense = improve operational efficiency.
 Discussions toward Group restructuring are proceeding as planned.
We expect to share further details in 3Q.
Offensive Structural Transformation

Defensive Structural Transformation

 Comprehensive overhaul of pricing
policy (price reflecting value) towardfurther profit expansion.

 Project teams to oversee reorganization:→ Discussions toward Group
restructuring are ongoing.

 Review supply/demand & sales policies
for Insecticides & Repellents/Householdproducts to reduce productreturns/disposal.

 Reduce low-profitability assets/brands.

 Reorganize our business portfolio tofocus on domestic & overseas
operations, General Environment andSanitation, and MA-T.

 Active financial strategy and use ofM&A.
© Earth Corporation All Rights Reserved.

 Enhance global governance:
・ Create Global Production Strategy
Division.
・ Enhance the management/oversight
structure overseas.
 Promote use of M&A & enhanceoversight of investment profitability.
 Reduce inventories to improve cashflow.
10Goal of Structural Transformation
 The Earth Group will work to expand its market share, enhance our brands toachieve profitability improvements, and accelerate growth through overseas
expansion – with the goal of further enhancing our value and competitiveness.
Overseas

Domestic

Model:
growing ourmarket share
Operational Group with robusthousehold product offerings
boasting no.1 share acrossmultiple categories

Enhanceourbrands

Model:
Achieve highlevels ofprofitability

Overseas
expansion

Maintain high levels ofprofitability andcompetitivenessthanks to strong consumer loyalty

Global model

Leverage profits & our brandpower in Japan to expand ourbusiness overseas

Business portfolio management(Manage/oversee investment and approaches optimized for each category and each business phase)© Earth Corporation All Rights Reserved.

11Portfolio Targets
 Our current portfolio is overly dependent on insecticides & repellents in Japan.
 Going forward, we seek to grow revenue/profits through a portfolio grounded on the 4pillars of: domestic and overseas operations, the General Environment and Sanitation
business, and MA-T-related.
DomesticOverseas

General Environment
and Sanitation

MA-TAchieve No.1 market
share in:・ Insecticides & repellents
・ Bath salts
・ Repellents for clothing

Achieve No.2 positionin the global market for
insecticides &repellents.

Put in place a 3pronged framework
consisting of R&D
capabilities, training,and expertise.

Secure stableprofits/revenue
through MA-T-based
solutions.

Secure profits by growing
our market presence in:・ Mouthwashes
・ Air fresheners
・ Non-surgical face masks

Expansion strategy
focused on 24
countries (including
regional subsidiaries
and exports).

Further improve ourEnvironment Doctor
service, offering
quality assurance
support to our clients.

Build a businessmodel throughlicense PF.

Growth categories:
・ Gardening products
・ Pet supplies

Nurture global brands in:・ Insecticides &repellents
・ Oral hygiene・ Air fresheners

Offer services in new
domains and shift to abusiness foundation
capable of supporting
sustained growth.

Real-world
implementation ofMA-T® technology
to provide solutions
to social problems.

© Earth Corporation All Rights Reserved.

12

Initiatives in 2H ｜Bringing a New
Product to Market (Insecticides & Repellents)
 Speedy release of new product to combat the ongoing “super” bed bug epidemic.
 Earth will be releasing a new product this fall to capture rising demand for insecticides &repellents in the fall/winter season. We will work to reduce seasonal sales variance byoffering products covering different seasons and securing sales space throughout theyear.

 Single application once a year offers full
protection (Longest lasting of Earth’sproduct lineup) Much more effective than traditional
insecticide products against insecticideresistant cockroaches and super bed bugs!
 Just spray it into spaces and crevices!
Quasi-pharmaceutical product for prevention or extermination© Earth Corporation All Rights Reserved.

13

Initiatives in 2H｜Recovery in theHousehold Product Category Raise the sales & profit baseline by releasing new & thematic products outside thescope of the planned release schedule for FY 12/2024.
 Dedicate more marketing resources to this category, including through the execution of
new communication initiatives.
Bath salts© Earth Corporation All Rights Reserved.

Oral Hygiene Products (Mouthwashes)

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Initiatives in 2H｜
Additional Cost Pass-Throughs
 Price revisions to our product lineup of Sukki-ri! brand air fresheners(total of 53 SKUs), with the objective of improving profitability.
 Enhance sales efforts through, for example, the use of TV commercials tounderscore these products’ value proposition, making for a smoother transition
to the new price regime.
Examples of target SKUs

Sukki-ri! toilet air fresheners© Earth Corporation All Rights Reserved.

Sukki-ri! room air fresheners

Sukki-ri air! toilet sprays

15

FY 12/2024 Results Forecast

Progress Vs. OI Target (Quarterly/Cumulative)
 We do expect an overperformance for 2H, as well, but we face challenges from:① weather-related risk factors, ② higher COGS than expected, ③ recording ofexpenses not used in 1H. Additionally, we will also consider the strategic deploymentof ④ sales promotion/advertising resources.
(Unit: 0.1 billion JPY)
Q1

Q2

Q3

Q4

Quarterly
51.0

49.8

57.8

2H Forecast: ¥-4.9 B + carryforward+ strategic expenses

28.0
55.3

43.9
- 7.0

- 28.5- 4.5- 44.5

Quarterly
Cumulative

107.6
79.0

74.5

49.8
99.2

28.0

92.2
63.7

55.3
2023
2024
Realized Forecast

2024
Realized© Earth Corporation All Rights Reserved.

2023
2024
Realized Forecast

2024
Realized

2023
2024
Realized Forecast

2024
Realized30.0

2023
2024
Realized Forecast

2024
Realized172024 Results Forecast While we are hopeful for a year-end results overperformance, the forecast targets
disclosed 02/13/2024 remain unchanged.
 Earth Corp. is evaluating various factors/risk scenarios and will aim for transparent(Unit: 0.1 billion JPY)
disclosure.
Topics2024 Forecast

•

Sales

Gross Profit

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 andHousehold products.

636.2•This FY we expect 1.5 B yen in expenses related to structuraltransformation.
We expect +1.6 B yen in human resources investment and +1.1 B yen
in brand incubation investment.

572.5

1,650 •
658.3

2023 RealizedSG&A

628.3 •Operating
Income30.0 •Net Income
attributable toowners ofparentROE

Temporary decrease in OI due to structural transformation.

63.7

17.9 •

Non-operating income & expenses expected to be in line with LFY.
We don’t expect any major extraordinary income/loss items.

41.0

2.7% •

Due to a temporary decrease in profitability.

6.3%

•

© Earth Corporation All Rights Reserved.

18

Shareholder Returns
 Shareholder Returns Policy: Stable dividend distribution with a DOE target of around
4%. Consider an agile approach to dividend raises and share buybacks.
 2024 dividend target: 120 JPY/share (incl. a 2 JPY/share commemorative dividend).
 Completed share buyback: 2.0 B JPY; 417,000 shares; 1.9% of shares outstanding.
Ordinary dividend per share - trend

Total returns (Dividends + share buybacks)(Unit: 0.1 B JPY)

(Unit: JPY)

Commemorative dividend per share (JPY)
Ordinary dividend per share (JPY)
120

120
250

Share buybacks

46Dividend payments
40

20
30
100
115

80

2020

118

2021

118

2022

© Earth Corporation All Rights Reserved.

118

2023

118

2024
(Forecast)

200

10

2002020

21025

26

26

26

2021

2022

2023

2024
(Forecast)

19

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 materiallyfrom those described.