Earnings briefing materials for 3Q ofthe fiscal year ending December 2022
08/11/2022

BARTH - Conclusion of business transfer agreement

Purpose of business acquisition[ Strategic Significance ]• Acquisition of "world view" and "brand value" of the BARTH brand‣ The BARTH brand has established its own unique worldview by appealing for "Night
Routine" from bath time to sleep time by evoking the latent needs of customers throughthe concepts of "beauty," "sleep," and "recovery".
‣ Through this business acquisition, the company will acquire not only the "products"
themselves, including bath salts, but also the unique world view, brand, and marketingknow-how that it has built up to date.

[ Vision for the future ]• Improve profitability by leveraging know-how and Synergy with existingproducts‣ Based on the world view created by the differentiation of the BARTH brand in terms of "design,""functionality," "concept," and "medium to high price range," we will create products under the"BARTH brand" × "our existing or new category," with a view to improving profitability by
developing products in the high price range.

‣ Aiming to generate synergies in our existing categories© Earth Corporation All Rights Reserved.

2

Overview• Details of business acquired‣ Development, manufacture, and sale of products containing neutral
bicarbonate including medicinal BARTH neutral bicarbonate bath salt, andother BARTH brand products, and any other business related to these
operations• Assets and liabilities to be acquired‣ Inventory and intangible fixed assets related to the business to be acquired• Operating results of business acquired‣ Sales

1,838 million yen (Fiscal year ending August 2022)• Business acquisition cost
‣ Undisclosed due to agreement between the involved parties© Earth Corporation All Rights Reserved.

3

Timetable & Overview of accounting treatments• Timetable‣ Date of conclusion of the agreement:‣ Date of acquisition of business:

November 8, 2022
March 1, 2023 (scheduled)• Overview of accounting treatments‣ The impact of this matter on our group's consolidated financial results for the
fiscal year ending December 31, 2022 is negligible.
‣ The amount of goodwill involved in this treatment is now being investigated© Earth Corporation All Rights Reserved.

4

FY12/2022 3Q Results

Executive Summary ①（vs. Forecast）• Financial results overview‣ Sales‣ Operating Income：124.4 billion yen; vs. the forecast: - 2.1%
： 12 billion yen; vs. the forecast: - 14.2%（vs. Forecast）‣ 3 billion yen downward swing in gross profit• Sales of insecticides & repellents fell short of the plan by 3.6 billion yen, mainly
due to the impact of sluggish market caused by unseasonable weather. Althoughsales of other household products and overseas business increased, it was notenough to cover the shortfall in sales of insecticides & repellents, resulting in adecrease of 2.1 billion yen in total, including "impact of sales plan miss" and"change in category composition ratio.
• Impact of soaring material prices and currency fluctuations: 0.9 billion yen as of
3Q‣ 1.0 billion yen reduction in SG&A expenses due to cost controls, etc.
© Earth Corporation All Rights Reserved.

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

Executive Summary ②（YoY）• Financial results overview‣ Sales‣ Operating Income* LFY results calculated and adjusted retroactively
using the new Accounting Standard：124.4 billion yen; YoY* : + 1.9%
： 12 billion yen; YoY*: - 19.4%（YoY）‣ 1.0 billion yen decrease in gross profit• Sales of insecticides & repellents decreased due to weather factors, while sales of other householdproducts increased, but this was offset by "profit increase due to higher sales" and "change in categorycomposition", resulting in a decrease of 170 million yen.
• Decreased by 1.24 billion yen due to soaring raw material prices and exchange rate fluctuations• Increased by 350 million yen due to newly consolidated and foreign exchange fluctuation effects‣ 1.8 billion yen increase in SG&A expenses• Personal expenses：750 million yen• Logistics expenses：390 million yen• Travel & transportation expenses：320 million yen© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 7
using the new Accounting Standard

Financial Result Highlights
 As of the end of 3Q, the Earth Corporation registered an increase in sales accompanied by a decrease in profits.
Operating income fell short of the plan by 14%
 Impacted by raw material price hikes, in addition to the underachievement of insecticides & repellents , which area source of earnings
Following the adoption of the new AccountingStandard for Revenue Recognition

Realized

Vs.
Forecast(Unit: 0.1 billion JPY)

YoY*

Topics
•

Sales

1,244

97.9%

101.9%••

Impact from soaring raw material prices & currency fluctuations: vs.
forecast – 900 million yen
Sales mix

104.7%••

Within an adequate range, as formulated in the forecast
Considering adjustments toward the end of the fiscal year

85.8%

80.6%

•
•

Underperformance of 1.98 billion yen vs. 3Q forecast
Recovery measures are being carried out.

91.2%

84.5%

•
•

Foreign exchange gain: 530 million yen was posted
No extraordinary gains or losses of note

530.8

94.6%

98.0%

SG&A
Expenses

410.6

97.9%

Operating
Income120.1

Profit
Before Tax

128.4

Gross Profit•

Sales of insecticides & repellents fell short of company expectations,due to the impact of a generalized market slowdown
Effect of new consolidation: +0.37 bn yen, Effect of exchange rate
fluctuations: +1.51 bn yen© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 8
using the new Accounting Standard

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

 Sales of insecticides & repellents were affected by unstable weather, decreasing YoY as of the end of 3Q, andfalling short of the forecast for the same period
 Bath salts, which have been growing at a high rate for the past two years, maintained the same level of sales as
the previous year.
 Other household products continued to grow, partly due to the positive effect of exchange rate fluctuations
Last FY (Realized)*

511.0

547.7

Current FY (Forecast)
Current FY (Realized)

248.4

516.9

153.1

58.8

157.8
153.8

208.2
222.1

62.9

58.5 55.0

Insecticides &Repellents

210.2

245.1

64.1

Oral Hygiene
products

Bath salts

205.6

57.1

Other Householdproducts

Pet supplies, etc.

Total Health Care
System

YoY diff.*

- 5.8

+ 0.2

- 0.6

+ 26.3

- 1.1

+ 4.5

Diff. vs.
forecast- 36.7

+ 3.7

- 4.6

+ 3.3

+ 5.8

+ 1.9

© Earth Corporation All Rights Reserved.

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

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

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

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

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

• EARTH NO MAT

40

100
30
80
20

Vs. forecast• MUSHI YOKE NET EX

60
10

89%

Vs. forecast

40

95%

As of September 30:
20

YoY

96.5%

0

0

New Products - Trends-10 Uses against flies, mosquitoes, and cockroaches
decreased YoY
 Strong sales of insecticides targeting ticks & mites,
and harmful insects, as well as of repellents• MAMOROOM
Vs. forecast• ZERO de KNIGHT

Earth Corporation Market Share (As of September 30)

55.7% ➡ 56.1%© Earth Corporation All Rights Reserved.

186%

Vs. forecast

263%
10

COGS – Status Overview
 Overall cost increase in raw materials, packaging materials, etc.
 Impacted by soaring ocean transportation costs and container prices due to yen depreciation, etc.
[Major raw & packaging materials
experiencing soaring prices]

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

Diff. vs. 3Q forecast
Profit Impact Amount•

Profit Impact Amount- 900 million yen - 1.5 billion yen
Foreign exchange – Diff. vs. initial forecast
Currency

Rate

Forecast(September 30)

Vs. Forecast

人民元

17.15

➡

20.37

＋18.7%

USD

111.00➡

144.81＋30.4%

THB

3.38

➡

3.81

＋12.7%

VND

0.00505➡

0.00607＋20.1%© Earth Corporation All Rights Reserved.

•••

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

Impact from foreign currency fluctuations•

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

Should exchange rates remain at current
levels, this could mean costs 300 – 400
million yen higher than forecast
11

SG&A Expenses – Status Overview(Unit: 0.1 billion JPY)

 SG&A expense items remained in an adequate range, as formulated in the forecast
 Ongoing application of cost controls
3Q FY12/2021 3Q FY12/2022 3Q FY12/2022

Realized*

Forecast

Realized

Vs. Forecast

Personal expenses

147.5

156.7

155.0

▲ 1.6

Shipping costs

32.2

34.5

34.7

0.2

Storage costs

18.2

19.4

19.6

0.1

Advertising expenses

56.2

61.3

55.9

▲ 5.4

Sales promotion expenses

7.6

7.7

7.5

▲ 0.2

R&D expenses

20.3

23.0

21.5

▲ 1.5

Depreciation expensess

9.3

10.3

10.8

0.5

Goodwill amortization

14.1

4.4

4.3

0.0

Travel&transportation expenses

7.8

10.4

9.5

▲ 0.9

Entertainment expenses

2.0

3.6

3.6

0.0

Comission paid

8.5

6.6

9.4

2.8

Sales comissions

5.1

9.5

9.8

0.2

Miscellaneous expenses

5.4

6.1

6.2

0.1

Others

58.1

67.4

62.8

▲ 4.6

Total

392.3

420.9

410.6

▲ 10.3© Earth Corporation All Rights Reserved.

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

Goodwill amortization for BATHCLIN CORP ended in 1Q 2022

* LFY results provided for reference purposes, calculated retroactively12
using the new Accounting Standard

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

 Sales YoY*：125.1% In addition to growth in Thailand and Vietnam, there were positive effects from exchange rate
fluctuations (+1.51 billion yen) and the consolidation of new subsidiaries in Malaysia and the Philippines (+0.37 billionyen), resulting in 105.3% YoY growth in real terms
 Due to rising freight and raw material prices as well as a year-over-year reduction in highly profitable Japanese exports,
profitability somewhat declined

Overseas Sales (3Q)
140

120
100
80
60
40
20

Exports/Cross-border EC
China
Philippines
Malaysia
VietnamThailand← Previous Standard

Overseas OI (Simple Sum)
Current Standard →

17.6

12.2%

20

96.8
84.2

22.0

95.4
27.1

14.1

18.3

23.4

24.5

15.4
6.3

18.8

20.3

20.0

31.7

27.6

26.5

30.2

23.6

2017

2018

2019

2020

2021

13.2

Operating
IncomeOperating
Income Margin

119.3

74.8
10.2

66.6

18.4%

21.8
22.9

15

14.5

1.4 2.3
24.2

37.0

20.6

10

5

33.9

0

0

© Earth Corporation All Rights Reserved.

2022

2021

2022

* LFY results provided for reference purposes, calculated retroactively 13
using the new Accounting Standard

Overseas Results (Status By Country: China)
Effective YoY Sales On A Local Currency Basis : 94.9%

Local Subsidiary Results* (0.1 B JPY)Sales

OI Margin

Progress Status Vs. The Forecast

30

China

25

24.2

22.9

•

20
15
10

5

5.5%

•

2.0%

Measures in the 4th quarter and beyond

Sales began to recover when the lockdown wasremoved, but because of action and power
constraints, there was an excess of goods indistribution, and sales lagged•

Systematic sales promotion for W11 event
and inventory digestion•

Preparation for new product launches

Recovering sales with cockroach and mite
products that are in demand even late in theseason•Development under zero-CODIV policy

0

21.3Q

22.3Q

(Reference) Impact Due To Lockdown Measures etc.
 Even after the prolonged lockdown in Shanghai was lifted, there have been a number of sporadic blockades andquarantines in key cities throughout the nation.
- Sluggish customer traffic in real stores, no delivery or delivery available through e-commerce channels, andfood deliveries are a priority.
- EC channel is overstocked and therefore controlling shipments- Consumer disengagement of major EC companies Plant shutdowns due to power shortages, shortened hours and closures at retail stores, etc.
© Earth Corporation All Rights Reserved.

* LFY results provided for reference purposes, calculated retroactively 14
using the new Accounting Standard

Overseas Results (Status By Country: Thailand & Vietnam)
Effective YoY Sales On A Local Currency Basis : 143.6%

Local Subsidiary Results* (0.1 B JPY)
Sales

Includes internal sales transactions

OI Margin

Thailand40

Progress Status Vs. The Forecast

45.7

50

33.5

30

•

Strong expansion of domestic sales in Thailand•

The effects of rising raw material prices andchanging currency rates became clear. SG&A
costs were kept under control, although profits
did not meet expectations

14.8%
20

8.9%

10

Measures in the 4th quarter and beyond•

Insecticides & Repellents - Challenge toachieve No.1 share•

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

Execute CSR activities in collaboration withpublic government organizations andneighboring retailers

0

21.3Q

22.3Q

Effective YoY Sales On A Local Currency Basis : 179.4%

Local Subsidiary Results* (0.1 B JPY)
Sales

Includes internal sales transactions

OI Margin

Progress Status Vs. The Forecast

50

39.5

Vietnam

40
30
20

22.8
7.2%

•

Steady growth in domestic sales in Vietnam on theback of last year's lockdown and market recovery•

While profitability came slightly below target due tothe impact of soaring raw material prices and otherfactors, we nevertheless achieved the profit target
for Q3

7.1%

10
•

0

21.3Q

22.3Q

© Earth Corporation All Rights Reserved.

Raise prices for floor cleaner and dish washingproducts

Measures in the 4th quarter and beyond•

Rise in air freshener market share•

Implementation of cost reduction measures(change of solvents for Insecticides &Repellents products)•

Carry out cost control measures to offset the
impact from soaring raw material prices* LFY results provided for reference purposes, calculated retroactively 15
using the new Accounting Standard

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

OI Margin

Progress Status Vs. The Forecast

3

1.5

Malaysia

2

•

1
0
▲1

21.3Q

22.3Q

•

The effects of raw material price increases
became clear.

•

Increase in SG&A expenses due tostronger promotions-61.2%▲2▲3

OI Margin

2.3

Philippines

Continued promotion to expand sales
channels•

Aggressive promotion of air fresheners
and cleaning agents•

Expect higher procurement costs due tosoaring raw material prices

Progress Status Vs. The Forecast

3

2

1
7.4%
0

21.3Q

•

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

Sales exceeded plan due to promotional
activities to expand sales channels for new
products (ARS) and existing products

Measures in the 4th quarter and beyond

22.3Q

Measures in the 4th quarter and beyond•

Entered the Consolidated PL 3Q FY 2022•

Product launches•

Air freshener and insecticide products
introduced to the market•

Expand awareness of the Earth brand•Price increases implemented as a measure tocope with cost increases•

Profitability improvements•

Unlock integration synergies(Transfer production of existing products,
etc.)

•

© Earth Corporation All Rights Reserved.

Establishment of internal management
system16

FY12/2022 Forecast The full year FY12/2022 forecast remains has not changed as of yet, but we areattentively analyzing it in light of the present circumstances.
Source: FY12/2021
earnings briefing
materials© Earth Corporation All Rights Reserved.

17

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

Objective

1Q

2022
2Q
3Q

4Q

1Q

Business
Acquisition

Closing

2023
2Q
3Q

4Q

•

M&A of a company in thePhilippines

Part of efforts to expand the profit
foundation in Asia•

BARTH brand businessacquisition

Expand brand lineup for businessgrowth•Revamp our core system

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

★

•

Reinforce seismic resistance at
wastewater treatment facilities

BCP measures★

•

Bath salts – increase production lines

Expand production capacity to address
demand growth•

Insecticides & repellents – increase
production lines

Expand production capacity to address
demand growth•

Build a new R&D block at Tokushima
Pet Land

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

★

☆

★

Conclusion of (scheduled)
the agreement

★

★
18

ESG
Environment／Social
 Established a new specialized department.
•

The internal organization was reviewed, and the ensuing new departments were created. To expedite efforts, theentire firm will collaborate.
- CSR & Sustainability Promotion Dept.: The Earth Group's sustainability-related efforts will be promoted
through this division.
-

Well-being Promotion Section, Human Resources Management Dept.: This section encourages different work
methods, health support, and diversity and inclusion.

Environment
 Support for TCFD Recommendations

 Environmentally friendly electricity is
introduced•

We have affirmed our support for the Task Forceon Climate-Related Financial Disclosures'
recommendations (TCFD).

•

Renewable energy sources are now the primarysource of electricity used at Earth Corporation's Ako
Plant.

•

We acknowledge that addressing climate change
is crucial to building a sustainable society.

••In the future, we shall provide information inaccordance with the disclosure frameworksuggested by the TCFD.

The Shizuoka Plant of the
BATHCLIN Corporation
has introduced 100% CO2free electricity withadditional environmental
benefits from renewableenergy sources.
Only available in Japanese：
https://www.bathclin.co.jp/news/2022/0214© Earth Corporation All Rights Reserved.

19

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

DOE(Unit: JPY)

118

120

115

115

115

118

115

110

100

100

5.3%

5.3%

5.5%

5.0%

5.1%
4.5%

90

80

2016

2017

© Earth Corporation All Rights Reserved.

2018

2019

2020

2021

4.2%

2022
(Forecast)

20

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

APPENDIX.

© Earth Corporation All Rights Reserved.

Effect of adoption of accounting standard for revenue
recognition

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

FY2022(Forecast)(Previous
standard）

Purchase &
sale

Sales

2,037

2,110

- 378

Gross
Profit1,214.5

1,259.5

378

SG&A
Expenses

716.6

743.0

Operating
Income

106.6

107.5

© Earth Corporation All Rights Reserved.

Sales promo. exp.
(deducted fromsales)- 182

FY2022(Forecast)(New standard)

1,550

881.5
182

561.0
107.5
24

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

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



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

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

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

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

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

25

Quarterly Sales Promotion Plan

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

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

FY2022 Sales(Forecast)

683.0

700

665.4

600

517.0

500.0

492.7

493.4

500

411.0

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

300

386.1

66.2
48.6

200

55.5

48.1

26.0

43.0

43.8

Q1(1～3月)

Q2(4～6月)

Q3(7～9月)

Q1

Q2

100

28.6
0

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

＋20.0

Q3

＋23.2

Q4(10～12月)

Q4

＋4.3

▲29.5

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

26

Operating Income Forecast（Quarterly/Cumulative total）

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

Q1

Q2

Q3

Q4

81.0

Quarterly

52.0

105.2

80.5

17.9

7.0
- 96.9FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)- 32.5

FY2021
FY2022(Realized) (Forecast)

Q. Cumul.
140.0

133.0
52.0

185.7

107.5
203.5
106.7

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

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)

FY2021
FY2022(Realized) (Forecast)

27

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

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

Sales target: 2.6 billion yen

 Execute cost controls•

Make efficient use of expenses toward securing profits•

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

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

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

28

Supplementary Materials;
FY12/2022 3Q Results

Consolidated Statement of Income
3Q FY12/22 3Q FY12/22 3Q FY12/22
Realized*
Sales

Forecast

Realized（Unit：million JPY）
3Q FY12/21

FY12/22
YoY

vs.FCT

Forecast

3Q YTD

Realized**

122,102

127,100

124,445101.9%

97.9%

155,000

80.3%

165,167

67,94971,00071,362105.0%

100.5%

88,15081.0%

94,53654,152

56,10053,083

98.0%

94.6%

66,85079.4%

70,631

39,23842,09941,069104.7%

97.6%

56,09973.2%

50,27814,91314,00012,013

80.6%

85.8%

10,750111.8%

20,353Non-operating income

510

240

920

180.1%

383.4%

500

184.0%

510

Non-operating expenses

48

60

33

68.8%

55.7%

100

33.4%

48

15,37614,18012,899

83.9%

91.0%

11,150115.7%

20,815Extraordinary income

147

0

25

Extraordinary losses

329

100

80

24.3%

80.3%

250

32.1%

329

Net income before income taxes

15,19314,08012,845

84.5%

91.2%

10,900117.8%

20,633Gross profit ratio

44.4%

44.1%

42.7% ▲ 1.7pt ▲ 1.5pt

43.1%

42.8%

Operating income ratio

12.2%

11.0%

9.7% ▲ 2.6pt ▲ 1.4pt

6.9%

12.3%

Net income before income taxes ratio

12.4%

11.1%

10.3% ▲ 2.1pt ▲ 0.8pt

7.0%

12.5%

Cost of sales
Gross profit
SG&A expenses
Operating profit

Ordinary profit

0147*LFY results provided for reference purposes, calculated retroactively using the new Accounting Standard **Standard until 2021

© Earth Corporation All Rights Reserved.

supplement 1

Consolidated Sales by Segment
3Q FY12/21 3Q FY12/21 3Q FY12/21
Realized*

Forecast

Realized

YoY

vs.FCT

FY12/21（Unit：million JPY）
3Q FY12/21

Forecast

3Q YTD

Realized**

Insecticides & Repellents

56,68458,711

56,517

99.7%

96.3%

61,431

92.0%

67,072

Oral hygene products

5,867

5,513

5,910

100.7%

107.2%

8,280

71.4%

33,587Bath salts

17,546

17,724

17,519

99.8%

98.8%

27,21964.4%

19,686

Other household products

23,64725,80626,300111.2%

101.9%

33,792

77.8%

26,094

Household products

47,062

49,04449,730105.7%

101.4%

69,292

71.8%

79,368Pet products & others

6,987

6,634

6,718

96.1%

101.3%

7,039

95.4%

7,375

Household products business subtotal

110,734

114,389

112,966

102.0%

98.8%

137,763

82.0%

153,816

General environment & sanitation business subtotal

20,666

20,933

21,139102.3%

101.0%

27,70076.3%

20,650Total sales include internal sales

131,400

135,322

134,105

102.1%

99.1%

165,463

81.0%

174,466(Adjustments)▲ 9,298▲ 8,222▲ 9,660

Total sales

122,102

127,100

124,445(Composition ratio)▲ 10,463
101.9%

97.9%

155,000▲ 9,298
80.3%

165,167*Denominator is total including internal sales

Insecticides & Repellents

46.4%

46.2%

45.4% ▲ 1.0pt ▲ 0.8pt

39.6%

40.6%

Household products

38.5%

38.6%

40.0%

1.4pt

1.4pt

44.7%

48.1%

Pet products & others

5.7%

5.2%

5.4% ▲ 0.3pt

0.2pt

4.5%

4.5%

Household products business

90.7%

90.0%

90.8%

0.1pt

0.8pt

88.9%

93.1%

General environment & sanitation business

16.9%

16.5%

17.0%

0.1pt

0.5pt

17.9%

12.5%

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

supplement 2

Operating Income Change Factors (YoY)（Unit：million JPY）

14,913

FY12/21.3Q(Realized)*

Decrease in grossprofit•- 1,069••- 2,900

Increase in SG&A
expenses- 1,831

•
•
•
•
•

•
•

12,013＜Breakdown＞
Increase in gross profit due to anincrease in sales
Impact from changes in the sales
composition ratio
Impact from raw material prices andexchange rate fluctuations
Increase in personnel expenses
Increase in distribution expenses
Decrease in advertising expenses
Increase in sales promotion expenses
Costs of travel & transportation
expenses, other activities
Decrease in commissions paid
Others+1,079-2,148
-757
-390
+34
+18
-327

-83
-326

FY12/22.3Q(Realized)© Earth Corporation All Rights Reserved.

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

supplement 3

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

14,000FY12/22.3Q(Forecast)Gross Profit
overperformance••-3,017•-1,987

SG&A expenses
within budget+1,030

•
•
•
•
•

•

12,013＜Breakdown＞
Impact from sales plan not achieved
Impact from changes in the sales
composition ratio
Impact from raw material prices andexchange rate fluctuations
Personnel expenses below the forecast
Distribution expenses avobe the forecast
Unused/moved to next FY advertisingexpenses
Unused/moved to next FY R&D
expenses
Costs of travel & transportation
expenses, other activities
Others-1,157-1,860
+170
-37
+545
+154
+91
+107

FY12/22.2Q(Realized)© Earth Corporation All Rights Reserved.

supplement 4

Consolidated: SG&A Expeses（Unit：million JPY）
3Q FY12/21 3Q FY12/22 3Q FY12/22
Realized*

Forecast

Realized

FY12/22
YoY

vs.FCT

Forecast

3Q FY12/21
3Q YTD

Realized**

Personal expenses

14,75015,677

15,507105.1%

98.9%

20,91074.2%

14,750

Shipping costs

3,225

3,453

3,476

107.8%

100.7%

4,449

78.1%

3,225

Strage costs

1,824

1,949

1,963

107.6%

100.7%

2,511

78.2%

1,824

Advertising costs

5,627

6,138

5,593

99.4%

91.1%

8,120

68.9%

5,686

769

771

751

97.7%

97.4%

1,070

70.2%

11,546

2,032

2,306

2,152

105.9%

93.3%

3,386

63.6%

2,032

Depreciation expenses

936

1,033

1,089

116.3%

105.4%

1,388

78.5%

936

Goodwill amortization

1,413

444

439

31.1%

98.9%

450

97.6%

1,413

Travel&transportation expenses

784

1,048

953

121.6%

90.9%

1,393

68.4%

784

Entertainment expenses

207

361

365

176.3%

101.1%

474

77.0%

207

Comission paid

858

661

941

109.7%

142.4%

1,372

68.6%

1,061

Sales comission

518

952

980

189.2%

102.9%

1,245

78.7%

518

Miscellaneous expenses

541

612

626

115.7%

102.3%

1,028

60.9%

541

Others

5,754

6,694

6,234

108.3%

93.1%

8,303

75.1%

5,755

Total

39,23842,09941,069104.7%

97.6%

56,09973.2%

50,278Personal expenses ratio

16.8%

17.1%

17.4%

0.5pt

0.2pt

13.5%

12.7%

Advertising costs ratio

6.4%

6.7%

6.3%

▲ 0.2pt▲ 0.4pt

5.2%

4.9%

R&D expenses ratio

2.3%

2.5%

2.4%

0.1pt

▲ 0.1pt

2.2%

1.8%

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

© Earth Corporation All Rights Reserved.

supplement 5

Consolidated Balance Sheet（Unit：million JPY）

2021.3Q

2022.3Q

End of

YoY

2021

Current

Cash & deposits

28,19025,322▲ 2,868

21,027

assetsTrade receivable

27,52027,414▲ 106

22,941Inventories

24,98929,351

4,362

27,502Others

2,394

3,105

711

2,547

Non-current Property, plant & equipment

27,58528,882

1,297

27,551

assetsIntangible assets

4,688

4,868

180

4,276

Investments & other assets

13,472

15,9952,523

14,868

128,841

134,940

6,099

120,715

Total assets

Current

Trade paypables

33,95936,4672,508

32,449liabilities

Short-term borrowings

2,187

1,960

▲ 227

2,498

Others

18,411

22,783

4,372

17,351

Non-current Long-term borrowings

1,440

480

▲ 960

1,200

liabilities

2,213

1,957

▲ 256

2,618

Total liabilities

58,21163,648

5,436

56,118

Net assets Total shareholders' equity

64,43062,963▲ 1,467

57,537

Total accumulated other comprehensive income

1,584

3,482

1,897

2,421

Non-controlling interests

4,615

4,846

231

4,638

70,62971,292662

64,596

OthersTotal net assets© Earth Corporation All Rights Reserved.

supplement 6

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

Realized

Realized

Realized

Realized

Forecast

Capital expenditure

2,442

1,953

3,548

2,928

6,200

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

6,000

6,000

5,000

5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

FY2018FY2019FY2020© Earth Corporation All Rights Reserved.

FY2021

Realized

Realized

Realized

Forecast

3,290

3,334

3,334

3,537

3,500

Depreciation expenses

7,000

0

Realized

FY20220

FY2018FY2019FY2020

FY2021

FY2022

supplement 7

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

BATHCLIN Corporation

Hakugen Earth Co., Ltd.

Earth Pet Co., Ltd.

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Sales

69,43470,88867,34010,59011,086

10,90013,764

14,731

14,249

4,650

4,830

4,545

Gross profit

30,55832,51728,876

4,746

4,669

4,566

5,227

5,087

4,726

1,882

1,837

1,736

Operatig income

11,245

10,789

8,390

1,084

802

725

1,444

999

840

528

374

405

Earth(Thailand)Co.,Ltd.

Earth Corporation Vietnam

EARTH HOME PRODUCTS（MALAYSIA）

EARTH HOMECARE PRODUCTS（PHILIPPINES）

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Sales

3,349

3,759

4,568

2,205

2,866

3,954

0

98

147

0

0

229

Gross profit

1,107

1,136

1,292

842

1,161

1,452

0

37

35

0

0

101

495

317

405

158

182

282

0

-71

-90

0

0

16

Operatig income

Sales

Earth Corporation (Shanghai)

Earth Corporation (Tianjin)

Earth Corporation (Suzhou)

Earth Environmental Service Co.,Ltd.

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

FY21.3Q FY22.3Q FY22.3Q

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

Realized* Forecast Realized

2,167

2,138

2,161

2,928

2,483

3,154

1,271

1,041

1,305

20,666

20,933

21,139Gross profit

565

543

633

562

311

530

306

145

247

8,354

8,732

8,795

Operatig income

47

110

126

350

86

274

148

19

106

938

1,147

1,208

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

supplement 8