Consolidated Financial Results
for the Nine Months Ended September 30, 2023 (Japanese GAAP)
November 9, 2023
Company name:
Stock code:

Earth Corporation
4985

Representative:

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

Contact:
Tel:

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

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

November 10, 2023—
Yes
Yes (for institutional investors and analysts)

Consolidated Financial Results for the Nine Months Ended September 30, 2023
(January 1, 2023 to September 30, 2023)(1) Consolidated operating results
Sales(Percentages indicate YoY change)
Net income attributable
Ordinary income
to owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Nine months ended
126,7691.9
9,217(23.3)
9,944(22.9)
6,448(25.3)
September 30, 2023
Nine months ended
124,445
12,013
12,899
8,635
－
－
－
－
September 30, 2022
Note: Comprehensive income for the nine months ended September 30, 2023 was 8,006 million yen (-19.9%), and comprehensive
income for the nine months ended September 30, 2022 was 9,994 million yen (－%)
Net income per share

Diluted net income
per share

Yen

Yen

Nine months ended
291.76－
September 30, 2023
Nine months ended
391.57－
September 30, 2022
Note: The Company adopted the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan, Statement No.
29) from the beginning of the fiscal year ended December 31, 2022. Figures for Q3 of the fiscal year ended December 31, 2022
are based on the new accounting standard, and no year-on-year comparatives have been provided.

(2) Consolidated financial position
Total assets
Million yen

Net assets
Million yen

Equity ratio%

Nine months ended
140,236
73,475
48.6
September 30, 2023
Fiscal year ended
124,489
68,01850.4
December 31, 2022
Reference: Equity capital amounted to 68,168 million yen as of September 30, 2023 and 62,794 million yen as of December 31, 2022.

2.

Dividends
Dividend per share
End of Q1

End of Q2

Yen

End of Q3

Yen

Year-end

Yen

Total
Yen

Yen

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

3.

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

Sales
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

157,500

3.4

5,000

(32.7)

5,500(32.4)

3,000(43.4)

135.73

Note: Revisions have been made to the Company’s most recently announced consolidated earnings forecast.

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

As of September
30, 2023

22,141,100

As of December
31, 2022

22,077,500

2. Treasury shares outstanding

As of September
30, 2023

14,086

As of December
31, 2022

13,782

3. Cumulative average number ofsharesNine months ended
September 30,
2023

22,101,526

Nine months ended
September 30,
2022

22,052,738*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 five of the accompanying
materials.
(Method of obtaining earnings briefing materials and briefing details)
The Company plans to hold an earnings briefing on Thursday, November 9, 2023, for institutional investors and analysts. We will
upload earnings briefing materials to be used during the briefing session to the TDnet and our official website on Thursday, November
9. Further, we will promptly post the details of the briefing on our website after it is held.

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(3) Notes to Quarterly Financial Statements ........................................................................................................................................ 11(Notes to going concern assumptions) ............................................................................................................................................. 11(Notes in the event of significant changes in shareholders’ equity) ................................................................................................. 11(Changes to accounting policies) ..................................................................................................................................................... 11―1―

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During the first nine months of the fiscal year ending December 31, 2023, the Japanese economy gradually recovered as various
activity and travel restrictions were eased and inbound demand increased with the downgrading of COVID-19 to a Class 5 infectious
disease. However, due to factors such as rising consumer prices caused by yen depreciation and soaring energy prices, the economic
outlook remains uncertain.
Meanwhile, in the Asian region, where the Group is focusing on business expansion, the economic recovery in China has beenslow due to a stagnation in the country’s real estate market. In ASEAN, conditions vary among countries and regions due in part toconcerns for an economic downturn amid uncertainties surrounding the prospects for the Chinese and the global economy, but theregional economy overall is holding firm, supported by robust domestic demand.
Under these economic conditions, the Company has been operating in line with the strategies set out in our medium-term
management plan, Act For SMILE–COMPASS 2023–. In accordance with the Company’s corporate philosophy, living in harmony
with the Earth, the plan includes four fundamental policies: Reform Corporate Compass & Infrastructure, Expand Profit Foundationin Asia, ESG/Open Innovation, and Generate Cost Synergies. Due to the impact of significant changes in the external environment,
we had flagged a review of the plan’s numerical targets, but solid results from our initiatives are starting to flow through, so we
intend to maintain our stated direction and strategies, and will continue with our efforts in the current fiscal year.
In the first nine months of the fiscal year under review, sales amounted to 126,769 million yen (+1.9% year-on-year). Sales ofbath salts and masks declined due to changes in the market environment in the Household Products Business and sales were sluggish
in China, but these negative factors were offset by higher sales of insecticides and repellents in Japan thanks to favorable weather
conditions and robust performance in ASEAN and the General Environment and Sanitation Business. Profits were affected by a
year-on-year increase in the cost of sales ratio driven by soaring raw material prices and higher distribution and personnel expenses,
the latter stemming from personnel investment. As a result, operating income came to 9,217 million yen (-23.3% year-on-year),ordinary income to 9,944 million yen (-22.9% year-on-year), and net income attributable to owners of parent to 6,448 million yen(-25.3% year-on-year).
Results by segment are as follows.
[Household Products Business]
In the Household Products Business, the Company improved product value by updating existing products, launched high-valueadded products, and carried out effective promotion using social media. The Company strove to improve profitability by revisingselling prices and reducing product and sales costs in response to soaring raw material prices. Overseas, the Company actively andeffectively invested management resources, mainly in the ASEAN region, including Thailand and Vietnam, and carried out
initiatives to expand the scale of its operations.
In the first nine months of the fiscal year ending December 31, 2023, sales amounted to 112,628 million yen (-0.3% year-onyear). Sales of insecticides and repellents grew backed by the emerging effects of price revisions and favorable weather conditions,and those of pet products and others also increased due to strong sales of pet care and other products. In contrast, sales of bath salts
and masks declined year-on-year due to changes in the market environment. On the profit front, segment income (operating income)was 7,586 million yen (-29.8% year-on-year), due to a year-on-year increase in the cost of sales ratio attributed to changes in the
product mix and soaring raw material prices, a trend that has continued since the previous fiscal year, as well as increased logistics
costs and higher personnel expenses, with the latter stemming from personnel investment.

―2―

(Household Products segment results)(Millions of yen)

Consolidated Q3 results
for the fiscal year ended
December 31, 2022

Consolidated Q3 results
for the fiscal year ending
December 31, 2023

Household insecticides and repellents

56,51757,248730

1.3%Household products

49,73047,965(1,765)(3.5%)

Oral hygiene products

5,910

5,799

(111)

(1.9%)

Bath salts

17,51917,035(484)(2.8%)

Other household products

26,30025,130(1,169)(4.4%)Pet products and others
Total sales

YoY change(amount)

YoY change(percent)

6,718

7,414

695

10.4%

112,966

112,628(338)(0.3%)

Segment income (operating income)
10,802
7,586(3,215)(29.8%)
Notes: Sales include internal sales and transfers made within and between segments, which amounted to 9,540 million yen during
Q3 of the fiscal year ended December 31, 2022 and 7,727 million yen during Q3 of the fiscal year ending December 31,
2023.
Results by product category are as follows.
Insecticides and repellents
In Japan, the market expanded owing to many days of extreme heat nationwide and a longer period of lingering summer heatcompared with the previous fiscal year. While sales of the Earth No-mat fly and mosquito repellent were sluggish, sales of
products for cockroaches and other unpleasant insect pests, such as Black Cap and Kobae Ga Hoi Hoi, increased. Further, sales
continued to grow, mainly in Thailand and Vietnam.
As a result, sales for this category were 57,248 million yen (+1.3% year-on-year).
Household products
In oral hygiene products, sales of Mondahmin Habit Pro, a mouthwash sold exclusively at dental clinics, increased along with
the Group’s progress in cultivating partner dental clinics, as did sales of all-in-one mouthwash Mondahmin Premium Care.
Meanwhile, sales of Mondahmin Peppermint and other general-use products decreased year-on-year, resulting in overall oral
hygiene product sales of 5,799 million yen (-1.9% year-on-year).
As for bath salts, while an increasing number of people are adopting the practice to use bath salts, the market continued to trail
behind the year-ago levels, due to increased outing opportunities following the downgrading of COVID-19 to a Class 5 infectious
disease and the extreme summer heat. Against this market backdrop, the Group’s performance was also lackluster, with bath salts
sales amounting to 17,035 million yen (-2.8% year-on-year).
In other household goods, sales of refrigerants and coolants as means to prevent heat stroke during the summer months werestrong, and sales of the Sukki-ri! series of deodorizing air fresheners also held firm. Meanwhile, sales of masks for household use
and insect repellents for clothing fell year-on-year, resulting in overall other household goods sales of 25,130 million yen (-4.4%
year-on-year).
Sales in this category amounted to 47,965 million yen (-3.5% year-on-year).
Pet products and others
Pet products sales amounted to 7,414 million yen (+10.4% year-on-year), supported by higher sales of care products, such as
cat litter, and premium foods.
[General Environment and Sanitation Business]
The core customers of our General Environment and Sanitation Business (primarily companies involved in the food,―3―

pharmaceutical, and packaging material industries) face stringent hygiene management requirements to prevent food poisoning andcontamination with foreign substances. They thus have growing needs for Earth Corporation’s high-quality hygiene management
services that leverage our specialized knowledge, technologies, and expertise.
In these circumstances, we stepped up our investment in building an internal framework that can serve customer needs byinstalling and developing systems geared toward human resources development and business process streamlining. At the sametime, we worked to maintain and expand our contract numbers by providing hygiene management systems distinguished bystrengthened technological capabilities, including through collaborative industry, academia, and public-sector research. We targeted
the pharmaceutical and regenerative medicine industries in particular, and continued strengthening audit and consulting operations
related to food safety management.
In the first nine months of the fiscal year under review, sales in the General Environment and Sanitation Business came to 21,992
million yen (+4.0% year-on-year) and segment income (operating income) to 1,304 million yen (+8.0% year-on-year).
(Millions of yen)

Consolidated Q3 results
for the fiscal year ended
December 31, 2022

Consolidated Q3 results
for the fiscal year ending
December 31, 2023

YoY change(amount)

YoY change(percent)

Sales

21,13921,992852

4.0%

Segment income (operating income)

1,208

1,304

96

8.0%

Notes: 1. Sales include internal sales and transfers made within and between segments, which amounted to 119 million yen in Q3of the fiscal year ended December 31, 2022 and 123 million yen in Q3 of the fiscal year ending December 31, 2023.

―4―

(2) Explanation of Financial Position(1) Assets, Liabilities and Net Assets
As of September 30, 2023, total assets amounted to 140,236 million yen, up 15,746 million yen from December 31, 2022. Thiswas mainly due to increases in cash and deposits, trade receivables, buildings and structures, machinery, equipment and vehicles,
trademark rights, goodwill, other intangible assets, and deferred tax assets, despite decreases in inventories and construction inprogress.
As of September 30, 2023, liabilities increased by 10,290 million yen from December 31, 2022 to 66,760 million yen. This was
mainly due to increases in short-term borrowings, income taxes payable, refund liabilities, and other current liabilities, despite
decreases in trade payables, accounts payable-other, and deferred tax liabilities.
Net assets amounted to 73,475 million yen as of September 30, 2023, rising 5,456 million yen from December 31, 2022, mainly
because of the booking of net income attributable to owners of parent, despite a decrease in retained earnings due to dividend
payouts.
Consequently, the Company’s equity ratio was 48.6% as of September 30, 2023, down 1.8 points from December 31, 2022.
(2) Cash Flows
The Company has not prepared a statement of cash flows for the period ended September 30, 2023, so disclosure is omitted.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
In light of the most recent earnings performance, the Company revised the consolidated earnings forecast for the fiscal year
ending December 31, 2023, released on February 13, 2023. For details, please see the “Notice of Revisions to the Consolidate
Earnings Forecast for the Fiscal Year Ending December 31, 2023,” dated today (November 9, 2023).
This forecast is based on information available to the Company at the time of its formulation. Actual results may differ
substantially from the projections included within due to potential changes affecting a variety of factors.

―5―

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet
Fiscal year ended
December 31, 2022
(as of December 31, 2022)(Millions of yen)
Nine months ended
September 30, 2023
(as of September 30, 2023)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims operating
Merchandise and finished goods

14,772
22,321

18,96926,743

1,842

3,380

25,617

24,121Work in process
Raw materials and supplies

1,435
5,200

1,324
4,631

Other
Allowance for doubtful accounts

2,795
(22)

2,749
(27)

Total current assets

73,96281,89230,174(16,336)

32,656(17,258)

Buildings and structures, net

13,837

15,397

Machinery, equipment and vehicles

16,77018,631

Accumulated depreciation and impairment(12,785)(13,526)

Machinery, equipment and vehicles, net

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

3,985

5,104

Land

7,787

7,825

Leased assets
Accumulated depreciation and impairment

320
(131)

368
(173)

Leased assets, net

188

195

Construction in progress
Other

2,114
9,499

996
10,055

Accumulated depreciation and impairment(7,927)(8,368)Other, net

1,571

1,686

29,48331,206

Intangible assets
Trademark right

Total property, plant and equipment

1,233

2,543

Software
Goodwill

1,432
105

1,431
1,299

Customer-related intangible assets
Other

1,643
940

1,649
1,875

Total intangible assets

5,355

8,798

Investment securities
Retirement benefit asset

5,261
7,336

5,772
7,627

Deferred tax assets
Other

1,001
2,105

2,660
2,303

Allowance for doubtful accounts

(16)

(25)

Total investments and other assets

15,68818,33850,52758,343

124,489

140,236

Investments and other assets

Total non-current assets
Total assets―6―

Fiscal year ended
December 31, 2022
(as of December 31, 2022)(Millions of yen)
Nine months ended
September 30, 2023
(as of September 30, 2023)

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

24,236
11,28820,87012,052

Short-term borrowings
Current portion of long-term borrowings

1,000
1,200

5,000
480

Accounts payable - other
Income taxes payable

7,477
426

4,445
4,359

Accrued consumption taxes
Provision for bonuses

612
240

1,494
1,693

Refund liabilities
Other

1,010
5,849

3,896
10,177

Total current liabilities

53,34164,469Deferred tax liabilities
Retirement benefit liability

1,815
314

1,036
272

Asset retirement obligations
Other

479
520

481
500

Non-current liabilities

Total non-current liabilities

3,129

2,291

56,47066,760Shareholders' equity
Share capital

9,895

10,043

Capital surplus
Retained earnings

9,917
39,897

10,06643,731

Treasury shares

(79)

(79)

Total liabilities
Net assets

59,631

63,761

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

Total shareholders' equity

1,109

1,498

698

1,707

Remeasurements of defined benefit plans

1,354

1,199

Total accumulated other comprehensive income

3,163

4,406

5,224

5,307

Non-controlling interests
Total net assets
Total liabilities and net assets―7―

68,01873,475

124,489

140,236(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Sales
Cost of sales
Gross profit

Nine months ended
September 30, 2022
(from January 1, 2022
to September 30, 2022)
124,445
71,36253,083(Millions of yen)
Nine months ended
September 30, 2023
(from January 1, 2023
to September 30, 2023)
126,769
74,50552,263

5,439
5,593
751
6
12,121
1,183
953
1,089
439
1,111
2,152
10,22741,069

5,820
5,567
832
15
12,644
1,291
1,103
1,299
84
1,121
2,346
10,91843,046

12,013

9,217

88
42
535
12
35
205

136
47
289
18
32
284

920

810

23

28

－

31

9
33

23
83

12,899

9,944

25
－
25

2
7
10

3
76
－
0

Selling, general and administrative expenses
Transportation and storage costs
Advertising expenses
Promotion expenses
Provision of allowance for doubtful accounts
Salaries and allowances
Provision for bonuses
Travel and transportation expenses
Depreciation
Amortization of goodwill
Rent expenses on land and buildings
Research and development expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Commission income
Rental income from buildings
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Net income before income taxes

80
12,845

2
177
7
－
186
9,767

Income taxes - current
Income taxes - deferred
Total income taxes

4,538
(636)
3,901

5,057
(2,038)3,018―8―Net income

Nine months ended
September 30, 2022
(from January 1, 2022
to September 30, 2022)
8,944(Millions of yen)
Nine months ended
September 30, 2023
(from January 1, 2023
to September 30, 2023)
6,749

308
8,635

301
6,448

Net income attributable to non-controlling interests
Net income attributable to owners of parent―9―Consolidated Statement of Comprehensive Income

Net income
Other comprehensive income

Nine months ended
September 30, 2022
(from January 1, 2022
to September 30, 2022)
8,944(Millions of yen)
Nine months ended
September 30, 2023
(from January 1, 2023
to September 30, 2023)
6,749

(88)
1,359

401
1,021

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

(220)

(166)

Total other comprehensive income

1,050

1,256

Comprehensive income

9,994

8,006

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

9,695

7,691

298

314

―10―

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

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

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

―11―