Consolidated Financial Results
for the Fiscal Year Ended December 31, 2022 (Japanese GAAP)
February 13, 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

Ordinary annual general meeting of shareholders:
Scheduled date for dividend payment:
Scheduled date to file securities report:
Preparation of supplemental explanatory materials:
Results briefing to be held:

March 24, 2023
March 10, 2023
March 27, 2023
Yes
Yes (For securities analysts and institutional investors)(Amounts of less than one million yen are rounded down.)

1.

Consolidated Financial Results for the Fiscal Year Ended December 31, 2022
(January 1 to December 31, 2022)(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%

Fiscal year ended
152,339
7,434
8,133
5,303
－
－
－
－
December 31, 2022
Fiscal year ended
203,785
3.9
10,667(6.6)
11,362
(2.6)
7,142
101.4
December 31, 2021
Note: Comprehensive income for the fiscal year ended December 31, 2022 was 6,457 million yen (－%), and comprehensive income
for the fiscal year ended December 31, 2021 was 7,621 million yen (52.9%).
Ratio of net
Ratio of ordinary
Net income per Diluted net income
Operating income
income to equity
income to total
share
per sharemargincapitalassets
Yen

Yen

%

%

%

Fiscal year ended
240.47
8.6
6.6
4.9
－
December 31, 2022
Fiscal year ended
323.76
12.4
9.4
5.2
－
December 31, 2021
Reference: Equity in
Fiscal year ended**million yen
Fiscal year ended**million yen
earnings of affiliates
December 31, 2022
December 31, 2021
Note: The Company adopted the Accounting Standard for Revenue Recognition (Accounting Standard Board of Japan, Statement No.
29) from the beginning of the fiscal year ended December 31, 2022. Hence, figures for the fiscal year under review are based on
the new accounting standard, and accordingly no year-on-year comparatives have been provided.

(2) Consolidated financial position
Total assets

Net assets

Million yen

Million yen

Equity ratio

Net assets per share%

Million yen

Fiscal year ended
124,489
68,01850.4
2,846.07
December 31, 2022
Fiscal year ended
120,715
64,59649.7
2,720.37
December 31, 2021
Reference: Equity capital amounted to 62,794 million yen as of December 31, 2022 and 59,958 million as of December 31, 2021.

―1―

(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended
December 31, 2022
Fiscal year ended
December 31, 2021

2.

Cash flows frominvesting activities

Million yen

Million yen

Million yen

Million yen

3,901(6,266)(4,464)

14,772

4,814(3,220)(4,610)21,027

Dividends
Ratio of
Total
Payout ratio dividends todividends (consolidated)
net assets(consolidated)

Dividend per share
End of Q1 End of Q2 End of Q3 Year-end
Fiscal year ended
December 31, 2021
Fiscal year ended
December 31, 2022
Fiscal year ending
December 31, 2023
(forecast)3.

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Total

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

－

0.00

－

118.00118.00

2,600

36.4

4.5

－

0.00

－

118.00118.00

2,603

49.1

4.2

－

0.00

－

118.00118.0048.2

Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2023
(January 1, 2022 to December 31, 2023)

Sales(Percentages indicate rates of YoY change)
Net income attributable
Net income
Ordinary income
to owners of parent
per share

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months ending
June 30, 2023

93,5004.7

10,800(9.6)

10,900(14.3)

6,900(19.7)

312.73Full-year

160,000

5.0

8,000

7.6

8,300

2.0

5,400

1.8

244.75―2―

*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) 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(3) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury stock)

As of December
31, 2022

22,077,500

As of December
31, 2021

22,077,500

2. Treasury shares outstanding

As of December
31, 2022

13,782As of December
31, 2021

36,9393. Average number of shares
outstanding

Fiscal year ended
December 31, 2022

22,055,509

Fiscal year ended
December 31, 2021

22,062,456*Summaries of financial statements are not subject to audit through certified public accountants or auditing corporations.
*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. Overview of Operating Results, (4)Future Prospects” on page 6 of the accompanying materials.

―3―

Accompanying Materials ― Contents
1. Overview of Business Results, etc. .................................................................................................................................................... 2(1) Overview of business results for the fiscal year under review ......................................................................................................... 2(2) Overview of financial position for the fiscal year under review ....................................................................................................... 5(3) Overview of cash flows for the fiscal year under review ................................................................................................................. 5(4) Future outlook .................................................................................................................................................................................. 6(5) Basic Policy concerning the Allocation of Profits and Dividends for Fiscal 2021 and Fiscal 2022 ................................................. 8
2. Basic Views on Selection of Accounting Standards ........................................................................................................................... 8
3. Consolidated Financial Statements and Primary Notes ...................................................................................................................... 9(1) Consolidated Balance Sheet ............................................................................................................................................................. 9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income......................................................... 11
Consolidated Statement of Income .................................................................................................................................................. 11
Consolidated Statement of Comprehensive Income......................................................................................................................... 12(3) Consolidated Statement of Changes in Equity ............................................................................................................................... 13(4) Consolidated Statement of Cash Flows .......................................................................................................................................... 16(5) Notes to Consolidated Financial Statements .................................................................................................................................. 18(Notes to going concern assumptions) ............................................................................................................................................. 18(Changes to accounting policies) ..................................................................................................................................................... 18(Change in presentation of results) .................................................................................................................................................. 19(Segment information, etc.) ............................................................................................................................................................. 20(Per share information) .................................................................................................................................................................... 25(Significant subsequent events) ....................................................................................................................................................... 25(6) Other .............................................................................................................................................................................................. 25―1―

1. Overview of Business Results, etc.
(1) Overview of business results for the fiscal year under review
Effective from the beginning of the fiscal year ended December 31, 2022, the Company has adopted the Accounting Standard for
Revenue Recognition (Accounting Standard Board of Japan [ASBJ] Statement No. 29; March 31, 2020), etc. As a result, revenue
recognition standards applied to results for the fiscal year under review differ from those applied to the previous fiscal year, andhence, no year-on-year comparison figures (% changes) have been provided in the explanation of operating results below.
During the fiscal year ended December 31, 2022, Japan witnessed resumption of economic activity in the new era of coexistencewith COVID-19 amid repeated resurgences of infections. Meanwhile, the Russia-Ukraine war, soaring energy prices, and the sharp
depreciation of the yen had a substantial effect on corporate activity. Further, consumer sentiment weakened due to a steep rise in
prices at an unprecedented pace against a backdrop of higher costs, dampening economic recovery.
Looking at Asia, the key region for the Earth Group’s overseas operations, while the Chinese economy showed signs of recovery
after extended lockdowns were lifted, the strict zero-COVID policy continued to remain in force. The Chinese government later
announced that it would relax the policy, but this caused a surge in infections, clouding the outlook going forward. Meanwhile, inSoutheast Asia, economic activity resumed after a period of stagnation caused by the pandemic, and the local economy is on arecovery track supported by robust local demand.
Under these economic conditions, the Company announced its medium-term management plan, “Act For SMILE–COMPASS
2023–” in February 2021. In accordance with the Company’s corporate philosophy, “We act to live in harmony with the Earth,” theplan includes four fundamental policies: “Reform Corporate Compass & Infrastructure,” “Expand Profit Foundation in Asia,”“ESG/Open Innovation,” and “Generate Cost Synergies.” The Company continued to implement priority measures associated withthese policies in the fiscal year ended December 31, 2022.
In the fiscal year ended December 31, 2022, sales amounted to 152,339 million yen. In domestic sales of household insecticides
and repellents, the Group’s principal source of earnings, while the surge in demand spurred by the protracted pandemic began towind down, performance of newly launched, high-priced products contributed to sales. However, due to inclement weather during
the summer, overall sales of household insecticides and repellents were sluggish. Meanwhile, sales in the overseas markets,
expansion of which the Group has positioned as a top priority in the medium-term management plan, continued to grow, and sales
in the General Environment and Sanitation Business also rose owing to an increase in annual contracts against a backdrop ofheightened need for sanitary management services. Profits were affected by a year-on-year increase in the cost of sales caused by
the surge in raw material prices, forex rate fluctuations, and changes in the sales mix, as well as higher SG&A expenses. As a result,operating income for the year came to 7,434 million yen, ordinary income to 8,133 million yen, and net income attributable toowners of parent to 5,303 million yen.
Consolidated results for the fiscal year ended December 31, 2022
Fiscal year ended
December 31, 2021

(Millions of yen)(Ref.)
FY12/22 results, excl. YoY change, excl. theFiscal year ending
the impact ofimpact of accounting
December 31, 2022
accounting standard
standard changechangeSales

203,785

152,339

209,065

2.6％

Operating income

10,667

7,434

9,118

(14.5％)

Ordinary income

11,362

8,133

9,817

(13.6％)Net income before income taxes
10,9638,057
9,741(11.1％)
Note: Due to the adoption of the Accounting Standard for Revenue Recognition, etc. from the beginning of the fiscal year underreview, sales were reduced by 56,726 million yen and all profit categories from the operating income line down werereduced by 1,684 million yen.
Results by segment are as follows.
[Household Products Business]
In the Household Products Business, the Company strived to revitalize corresponding markets through advertising, the creationof attractive sales areas, and other means of communication with customers while cultivating new customers with the launch of―2―

new products and updating existing products to improve their value. We also worked to improve profitability by reducing
manufacturing costs and selling expenses. Overseas, we aggressively and effectively invested management resources mainly inSoutheast Asia and otherwise worked to expand operations, generating higher sales primarily in Thailand and Vietnam.
In the fiscal year ended December 31, 2022, sales in the Households Products Business amounted to 136,486 million yen. For
the mainstay household insecticides and repellents, market share grew as the Company cultivated new demand with the launch of
high-value-added products, but sales were sluggish due to inclement weather during the summer in Japan with the temperatures
falling below year-ago levels. However, sales of deodorizing air fresheners and cleaning products grew, as did overseas sales,making up for the lackluster performance of household insecticides and repellents. Segment income (operating income) was 5,909
million yen, affected by a year-on-year rise in the cost of sales due to soaring raw material prices, forex-rate fluctuations, andchanges in the sales mix.
Results in the Household Products Business
Fiscal year ended
December 31, 2021
Sales

Fiscal year ended
December 31, 2022

188,493

136,486(Millions of yen)(Ref.) FY12/22
YoY change,
results, excl. theexcl. the impact
impact ofof accounting
accounting
standard change
standard change
193,204

2.5％

Segment income (operating income)
9,944
5,909
7,583
(23.7％)
Notes: 1. Sales include internal sales and transfers made within and between segments, which amounted to 11,804 million yen
during the fiscal year ended December 31, 2021 and 11,957 million yen during the fiscal year ended December 31,
2022.
2. Due to the adoption of the Accounting Standard for Revenue Recognition, etc. from the beginning of the fiscal year
under review, sales decreased by 56,718 million yen and segment income decreased by 1,677 million yen.
Results by product category are as follows.
Household insecticides and repellents
In Japan, sales of household insecticides and repellents for flies and mosquitoes as well as those for cockroaches, the mainstay
for this category, declined as did their market size, due to temperatures trending below year-ago levels between May and midJune, the peak shipping season for these products, and unseasonable weather that persisted intermittently throughout the summer.
Meanwhile, in terms of products for combatting ticks and other unpleasant pests, sales of which have been growing recently, theCompany launched high-value-added, high-priced products MAMO ROOM and Iyana Mushi ZEROdeKNIGHT, which drove
growth in market share to 56.3% (the Company estimate, +0.4pp year-on-year).
Overseas, sales in China slumped as sales activities were restricted due to the country’s zero-COVID policy, but sales in the
ASEAN region, including in Thailand and Vietnam, where economic recovery is ongoing, expanded.
As a result of the above, sales in this category totaled 59,368 million yen.
Household products
Sales of oral hygiene products amounted to 8,191 million yen, thanks to higher sales of Mondahmin mouthwash backed bymarket growth despite intensified competition.
The bath salt market, which has expanded amid the pandemic, maintained its expanded size, and as more people sought tohave an enjoyable bath experience, consumer needs for bath salts have diversified. Under these conditions, sales of bath salts
Kikiyu (granule-type), Nihon no Meito (bubble bath), and Awapi (for children) were brisk, with sales amounting to 26,946 million
yen.
In other product areas, sales of cold and hot packs (refrigerants and insulating packs) increased year-on-year owing to energysaving needs. Sales of Sukkiri! series of deodorizing air fresheners and Raku Hapi series of cleaning products also contributed,
bringing other product sales to 33,137 million yen.
As a result of the above, sales in this category totaled 68,275 million yen.
Pet products and others―3―

In pet products, sales benefited from an increase in pet ownership as people spent more time at home, as well as an increase intime spent caring for pets. Under these circumstances, sales of towel cleaners and other pet care products grew as pet owners
sought to provide a more comfortable living environment for their pets. The Company actively rolled out measures to boost sales,
including opening the Earth Pet House, a satellite store for pet care products. As a result, sales in this category came to 8,843
million yen.
[General Environment and Sanitation Business]
In the General Environment and Sanitation Business, the Company is enhancing its in-house hygiene management as relevantlaws in Japan are revised and safety standards for food, pharmaceutical products, and medical care are adjusted on an international
scale. Accordingly, the Company observed growth in demand among core customers (food, pharmaceutical, and packing material
factories) for its high-quality hygiene management services, which leverage the Company's specialized knowledge, skills, andexpertise. Meanwhile, personnel expenses (recurring expenses) and material and equipment costs rose at an accelerated pace dueto the Russia-Ukraine war.
Under these circumstances, the Company aggressively invested in the construction of an internal structure, including for the
installation and development of systems aimed at cultivating human resources and improving operational efficiency, to better
respond to customer needs. At the same time, we stepped up efforts in technology development, including by engaging in industryacademia-government collaborations, to provide sanitary management services that stand apart from competitors’ offerings, and indoing so maintained existing contracts while acquiring new ones and secured an appropriate level of profit. We implemented various
measures targeting the pharmaceutical and regenerative medicine industries in particular, and continued strengthening audit andconsulting operations related to food safety management.
In the fiscal year ended December 31, 2022, while performance was affected by a higher cost ratio and an increase in personnel
expenses attributed to aggressive investment in human resources, the number of annual contracts grew, boosting overall segment
results. Accordingly, sales in the General Environment and Sanitation Business amounted to 27,973 million yen and the segment
income (operating income) to 1,430 million yen.

Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

(Millions of yen)(Ref.) FY12/22
YoY change,
results, excl. theexcl. the impact
impact ofof accounting
accounting
standard change
standard change

Sales27,23427,97327,981

2.7％

Segment income (operating income)

1,114

1,430

1,437

29.0％

Notes: 1. Sales include internal sales and transfers made within and between segments, which amounted to 138 million yen in thefiscal year ended December 31, 2021 and 163 million yen in the fiscal year ended December 31, 2022.
2. Due to the adoption of the Accounting Standard for Revenue Recognition, etc. from the beginning of the fiscal year
under review, sales decreased by 7 million yen and segment income decreased by 7 million yen.

―4―(2) Overview of financial position for the fiscal year under review(Consolidated financial position)(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

ChangeTotal assets

120,715

124,489

3,774

Liabilities

56,11856,470352

Net assets

64,59668,018

3,421

49.7

50.4

0.7 points

2,720.37

2,846.07

125.7

Equity ratio (%)
Net assets per share (yen)As of December 31, 2022, total assets amounted to 124,489 million yen, up 3,774 million yen compared to December 31, 2021.
This was mainly due to increases in accounts receivable–trade, inventories, construction in progress, and retirement benefit assets,
offsetting decreases in cash and cash equivalents, investment securities, and goodwill.
Total liabilities amounted to 56,470 million yen, up 352 million yen compared to December 31, 2021. This was mainly attributed
to increases in accounts payable–trade, electronically recorded obligations–operating, and refund liabilities, partially offset bydecreases in borrowings, accounts payable–other, and income taxes payable.
Net assets rose to 68,018 million yen, up 3,421 million yen compared to December 31, 2021. This growth was chiefly due to anincrease in retained earnings.
Consequently, the Company's equity ratio rose to 50.4%, an increase of 0.7 points compared to December 31, 2021.
Reference: Cash flow-related indicators
Fiscal year
Fiscal year
ended
ended
December 31, December 31,
2018
2019

Fiscal year
Fiscal year
ended
ended
December 31, December 31,
2020
2021

Fiscal year
ended
December 31,
2022

Equity ratio (%)

37.0

37.3

46.1

49.7

50.4

Equity ratio on a fair market value basis (%)

93.4

107.4

107.1

111.9

89.7

Interest-bearing debt to cash flow ratio(annual)

62.1

2.1

0.2

0.8

0.6

Interest coverage ratio

24.2

105.3

549.6

634.1

285.9

(3) Overview of cash flows for the fiscal year under review(Consolidated cash flow)(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

ChangeCash flows from operating activities

4,814

3,901

(912)

Cash flows from investing activities(3,220)(6,266)(3,046)

Cash flows from financing activities(4,610)(4,464)145

Effect of exchange rate change on cash
327
447
120
and cash equivalents
Net increase (decrease) in cash and cash
(2,688)(6,381)(3,693)equivalents
Cash and cash equivalents at end of
21,027
14,772(6,254)
periodAs of December 31, 2022, cash and cash equivalents (below, "cash") stood at 14,772 million yen, down 6,254 million yen compared
to December 31, 2021.
In the fiscal year ended December 31, 2022, net cash provided by operating activities amounted to 3,901 million yen (versus 4,814
million yen in the fiscal year ended December 31, 2021). This mainly reflected 8,057 million yen in profit before income taxes (10,963
million yen), a 4,266 million yen increase in inventories (5,114 million yen), a 1,338 million yen increase in accounts receivable–trade(161 million yen), a 2,997 million yen increase in accounts payable–trade (668 million yen), 429 million yen in goodwill amortization(1,836 million yen), and 2,830 million yen in income taxes paid (5,562 million yen).

―5―

Net cash used in investing activities was 6,266 million yen (3,220 million yen used in the fiscal year ended December 31, 2021).
This figure primarily consisted of 4,893 million yen in purchase of property, plant, and equipment (2,616 million yen), 999 million
yen in purchase of intangible assets (286 million yen), and 539 million yen in gain on the sale of investment securities (68 million
yen).
Net cash used in financing activities amounted to 4,464 million yen (4,610 million yen used in the fiscal year ended December 31,2021). Cash used consisted mainly of 2,600 million yen in dividends paid (2,536 million yen in the fiscal year ended December 31,2021) and 1,021 million yen in repayments of long-term borrowings (1,314 million yen in the fiscal year ended December 31, 2021).

(4) Future outlook
While economic activity began to pick up in Japan under the new era of coexistence with the COVID-19, the outlook continues toremain uncertain due to a stagnation in corporate activity caused by soaring raw material prices and forex rate fluctuations, and weak
consumer sentiment. Additionally, business environments surrounding the industries in which Earth Corporation develops its products
and services continue to change on a daily basis due to a variety of factors, including growth in buying power stemming from M&A
among retailers, expansion in e-commerce channels, fragmentation of customer needs, and trends in raw material prices.
Under these circumstances, the Group will continue to focus on “creating a market with customers” in accordance with its corporate
philosophy of acting to “to live in harmony with the Earth” as it simultaneously contributes to the achievement of the Sustainable
Development Goals (SDGs). Additionally, in accordance with its medium-term management plan, “Act For SMILE－COMPASS
2023－” (in effect until the end of 2023), the Company will remain conscious of capital efficiency while conducting management thatfurther enhances profitability.
In terms of overseas expansion, which is currently Earth Corporation’s most important growth driver, the Company will improve
profitability and establish a foundation for earnings by maintaining local subsidiaries in China and other ASEAN regions (its primarytarget areas for expansion) and proactively investing its management resources. The Company will explore business potential inregions and countries where growth is anticipated, and pioneer new markets. Further, with regard to strategies associated with exports
and cross-border e-commerce, the Company will aim to generate earnings by focusing on highly profitable products and through thedevelopment and introduction of products that meet the needs of each country in which it operates.
In Japan, amid changes in the external environment caused by climate change and the COVID-19 pandemic, we will continue tolaunch new products and services while overhauling existing ones, and conduct promotional campaigns and develop new sales
channels with the aim of enhancing profitability. Additionally, Earth Corporation will leverage the experience and knowledge it has
accumulated as a leader in the field of household insecticides and repellents as it promotes the MA-T (Matching Transformation)
System®, an innovative catalytic technology developed in Japan. The Company believes that its mission includes enhancing thecredibility of the MA-T System throughout society, expanding positive economic impact through the creation of new industries, andexploring possible solutions to social issues. Through the platform provided by Japan MA-T Industrial Association, Earth Corporation
will collaborate with a wide range of companies, research institutes, and organizations as it attempts to augment the value of MA-T
and facilitate its utilization across a broad spectrum of industries.
Earth Corporation is evaluating the results of these activities in each of its individual business divisions and categories, gradually
establishing profit management indicators that enable it to closely monitor profitability. At the same time, the Company is striving toincrease its investment efficiency moving forward. In support of these efforts, it maintains an awareness of capital costs when
formulating hurdle rates for individual investment projects. Additionally, the Company will actively invest in a variety of large-scale
system-related projects that aim to generate work style reforms and improve labor productivity, including upgrades to core systems
and Group ICT infrastructure.
Incorporating impact from these efforts, the Company’s full-year consolidated earnings forecast for the fiscal year ending December
31, 2023 calls for 160,000 million yen (+5.0% year-on-year) in sales, 8,000 million yen (+7.6% year-on-year) in operating income,
8,300 million yen (+2.0% year-on-year) in ordinary income, and 5,400 million yen (+1.8% year-on-year) in net income attributableto owners of parent.
Included below are forecasts for each of the Company’s business segments.
[Household Products Business]
In the Household Products Business, the Company expects demand for its products to hold firm even as shelter-in-place demand―6―

shows signs of winding down, as lifestyle changes brought about by the pandemic take root in the new era of coexistence with COVID19. At the same time, we expect soaring raw material prices and the weak yen to continue weighing on our performance for the time
being. Under these circumstances, we will aim to secure profit necessary to maintain growth, and while striving to maintain sales
growth, we will introduce price revisions to better reflect the rise in raw material prices, appropriately distribute management resources,and enhance cost efficiency.
Regarding the sale of household insecticides and repellents in Japan, the principal source of earnings for the Group, the Company
anticipates continued contributions from new customer demand cultivated in the market that underwent a pandemic-driven change.
The Company will expand the lineup of high-priced, high-value-added products focused on “prevention,” curtail manufacturing costs,
run effective promotions using SNS, improve the efficiency of selling costs, and lower return rates by expanding steady sellers. In
household products, we will work to secure market share and earnings in the mainstay categories of oral hygiene products, bath salts,
and deodorizing air fresheners, and create new markets. To this end, we intend to create buzz by launching high-value-added products
and running promotions, and develop e-commerce and other new sales channels.
With regard to overseas expansion, we will develop products and implement sales measures that satisfy the unique needs of eachof the countries in which we operate. Through these efforts, we will ensure response that is appropriate for the different climates,
cultures, preferences, and laws and regulations associated with each of these countries. Our local subsidiary in Thailand will aim forfurther growth through a focus on business categories where it can leverage the Earth Group’s competitive advantage and efforts toraise brand recognition, all the while improving is profit structure through efficient investment in marketing. Our local subsidiary in
Vietnam will proactively launch new products aimed at increasing market share and work to enhance profitability. Further, we willtake advantage of the country’s favorable geographic location by continuing to invest in the local subsidiary as a major production
base for our medium- to long-term overseas expansion. Through our local subsidiary in Malaysia, we plan to revise and bolster sales
strategies and launch household insecticides and repellents as well as air fresheners to expand earnings. In the Philippines, also throughour local subsidiary, we will focus primarily on expanding the lineup of household insecticides and repellents to increase brandrecognition.
In China, while the impact of the pandemic is likely to persist going forward, we will strive to enhance earnings efficiency bydeveloping new sales channels and launching products that take advantage of the Group’s competitive advantage, including household
insecticides and repellents, mouthwash, and cleaning products.
In the meantime, we will aim to secure adequate profits through ongoing efforts aimed at lowering manufacturing- and sales-related
costs, cutting down on product returns, and limiting marketing expenditures.
Consequently, we project segment sales of 142,156 million yen (+4.2% year-on-year) and segment income (operating income) of
6,750 million yen (+14.3% year-on-year) in the Household Products Business.
[General Environment and Sanitation Business]
The core customers of our General Environment and Sanitation Business (primarily companies associated with the food,
pharmaceutical, and packaging material industries) are facing stringent requirements regarding the establishment of hygiene
management measures aimed at preventing food poisoning and contamination through foreign matter. Accordingly, they are exhibiting
growing need for the high-quality hygiene management services that Earth Corporation provides using its specialized knowledge,
technology, and expertise.
In response to these circumstances, we will envision an ideal environment from the perspective of humans and society. While
positioning the existing sanitary management services as the pillar of the segment, we will apply expertise and technologies we haveaccumulated thus far to flexibly and proactively contribute to realizing the environment we have envisioned, which also encompasses
the natural environment, and a more prosperous future.
Specifically, we will utilize the Saito General Research Institute as a base for promoting research, technological development, andthe training of human resources. At the same time, we will provide services utilizing digital technologies such as IoT and AI, , expand
auditing activities related to food safety, and step up expansion in the life science field as we aim to achieve stable earnings growththrough an increase in annual contracts.
Based on these factors, we project segment sales of 28,500 million yen (+1.9% year-on-year) and segment income (operating
income) of 1,450 million yen (+1.4% year-on-year) in the General Environment and Sanitation Business.

―7―(5) Basic Policy concerning the Allocation of Profits and Dividends for Fiscal 2021 and Fiscal 2022
We view the return of profits to our shareholders as an important management issue, and accordingly strive to ensure stabledividends while securing internal reserves in pursuit of sustainable growth and the maintenance of a sound management structure.
The Company will primarily use internal reserves for strategic investments and M&A targeting an expanded revenue base in Asia,
investment in core system upgrades and other ICT infrastructure construction projects, research and development expected to lead toopen innovation, and capital investment aimed at improving production efficiency. In addition, the Company will consider conducting
share buybacks in flexible accordance with cash flow conditions and stock price trends.
In terms of dividends of surplus, we target a dividend on equity ratio (DOE) of 4–5 % in the aim of paying stable, continuous
dividends.
Based on these policies, the Board of Directors of the Company has resolved to pay 118 yen per share for the fiscal year ended
December 31, 2022, taking into account earnings performance for the year and funds necessary for future growth. As a result,, we
now project a DOE ratio of 4.2% and a consolidated dividend payout ratio of 49.1%.
The Company also plans to pay 118 yen per share in full-year dividends in the fiscal year ending December 31, 2023.

2. Basic Views on Selection of Accounting Standards
Over the near term, the Company will prepare its financial statements based on Japanese generally accepted accounting principles(GAAP), taking into account the inter-period comparability of financial statements and comparability across companies.
In terms of the application of International Financial Reporting Standards (IFRS), the Company will take appropriate measuresin light of the existing circumstances in Japan and overseas.

―8―

3. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet
Fiscal year ended
December 31, 2021
(as of December 31, 2021)(Millions of yen)
Fiscal year ended
December 31, 2022
(as of December 31, 2022)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade

21,027
21,21014,772
22,321

Electronically recorded obligations - operating
Merchandise and finished goods

1,730
21,622

1,842
25,617Work in process
Raw materials and supplies

1,315
4,564

1,435
5,200

Other
Allowance for doubtful accounts

2,568
(20)

2,795
(22)

Total current assets

74,01873,962

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

29,48930,174

Accumulated depreciation and impairment(15,884)(16,336)

Buildings and structures, net

13,604

13,837

Machinery, equipment and vehicles

16,536

16,770

Accumulated depreciation and impairment(12,426)(12,785)

Machinery, equipment and vehicles, net

4,110

3,985

Land

7,873

7,787

Leased assets
Accumulated depreciation and impairment

255
(79)

320
(131)

176

188

Leased assets, net
Construction in progress
Other
Accumulated depreciation and impairment
Other, net

253

2,114

9,198
(7,666)

9,499(7,927)

1,532

1,571

27,551

29,483975

1,233

Software
Goodwill

1,515
423

1,432
105

Customer-related assets
Other

1,073
288

1,643
940

Total intangible assets

4,276

5,355

Investments and other assets
Investment securities

6,025

5,261

Retirement benefit asset
Deferred tax assets

6,114
1,132

7,336
1,001

Other
Allowance for doubtful accounts

1,612
(16)

2,105
(16)

Total investments and other assets

14,86815,688

Total property, plant and equipment
Intangible assets
Trademark right

Total non-current assets
Total assets―9―46,69650,527

120,715

124,489

Fiscal year ended
December 31, 2021
(as of December 31, 2021)(Millions of yen)
Fiscal year ended
December 31, 2022
(as of December 31, 2022)

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

22,617
9,832

24,236
11,288

Short-term borrowings
Current portion of long-term borrowings

1,480
1,018

1,000
1,200

Accounts payable – other
Income taxes payable

10,721
1,520

7,477
426

Accrued consumption taxes
Provision for bonuses

526
255

612
240

Provision for sales returns
Refund liabilities

434

－
1,010

Other

－
3,892

Total current liabilities

52,30053,341

Non-current liabilities
Long-term borrowings

1,200

5,849

Deferred tax liabilities
Retirement benefit liability

1,178
382

－
1,815
314

Asset retirement obligations
Other

516
540

479
520

Total non-current liabilities

3,818

3,129

56,11856,470Shareholders’ equity
Share capital

9,895

9,895

Capital surplus
Retained earnings

9,928
37,9299,917
39,897

Treasury shares

(215)

(79)

Total shareholders’ equity

Total liabilities
Net assets

57,53759,631

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

1,297

1,109

(22)

698

Remeasurements of defined benefit plans

1,146

1,354

Total accumulated other comprehensive income

2,421

3,163

Non-controlling interests

4,638

5,224

Total net assets

64,59668,018120,715

124,489

Total liabilities and net assets―10―(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
Fiscal year ended
December 31, 2021
(from January 1, 2021
to December 31, 2021)
203,785
121,451
82,334(Millions of yen)
Fiscal year ended
December 31, 2022
(from January 1, 2022
to December 31, 2022)
152,339
89,87062,4686,662
8,392
17,09812
17,587
202
1,092
1,277
1,836
1,435
3,172
12,89571,666

7,067
7,393
1,029
2
17,591
189
1,317
1,475
429
1,488
3,217
13,83155,034

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

10,667

7,434

85
141
157
27
46
300

121
77
226
28
45
247

Total non-operating income
Non-operating expenses
Interest expenses
Compensation for damage
Other

759

747

16
30
18

23
－
24

Total non-operating expenses
Ordinary income

65
11,362

47
8,133

121
32

29
10

153

40

8
174
368
1
553

8
107
－
0
116

Net income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes

10,963
3,455
80
3,536

8,057
1,742
674
2,417

Net income
Net income attributable to non-controlling interests

7,426
283

5,639
336

Net income attributable to owners of parent

7,142

5,303

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Transportation and storage costs
Advertising expenses
Promotion expenses
Provision of allowance for doubtful accounts
Salaries and allowances
Provision for bonuses
Travel and transportation expenses
Depreciation
Amortization of goodwill
Rent expenses on land and buildings
Research and development expenses
Other
Total selling, general and administrative expenses

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
Impairment losses
Loss on valuation of investment securities
Total extraordinary losses―11―Consolidated Statement of Comprehensive Income

Fiscal year ended
December 31, 2021
(from January 1, 2021
to December 31, 2021)
7,426(Millions of yen)
Fiscal year ended
December 31, 2022
(from January 1, 2022
to December 31, 2022)
5,639

Other comprehensive income
Valuation difference on available-for-sale securities(1,414)(184)

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

767
841

716
285

Total other comprehensive income

194

817

7,621

6,457

7,259

6,045

361

412

Net income

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests―12―(3) Consolidated Statement of Changes in Equity
Fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity

9,829

9,859

33,322(17)

52,99465

65

Share capital
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Dividends of surplus
Net income attributable toowners of parent
Purchase oftreasury shares
Change in ownershipinterest of parent due totransactions with
noncontrollinginterests
Net changes in
items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current
period(2,536)131(2,536)

7,142

7,142
(198)

(198)

2

2

65

68

4,606

(198)

4,542

9,895

9,928

37,929(215)

57,537(Millions of yen)
Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements
difference ontranslationof defined benefit
available-for-saleadjustment
plans
securities
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Dividends of surplus
Net income attributable toowners of parent
Purchase oftreasury shares
Change in ownershipinterest of parent due totransactions with
noncontrollinginterests
Net changes in
items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current
period

2,723

(789)

371

Non-controllinginterests

Total net assets

4,524

59,823131(2,536)
7,142
(198)

2

(1,425)

767

775

113

230

(1,425)

767

775

113

4,773

1,297

(22)

1,146

4,638

64,596―13―

Fiscal year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance
Changes of items during
periodIssuance of new shares
Dividends of surplus
Net income attributable toowners of parent
Purchase oftreasury shares
Disposal of treasury shares
Change in scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in
items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current
period9,895

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity9,928

37,929(215)

57,537

(542)
9,895

9,928

37,387

(542)
(215)

56,995(2,600)－(2,600)

5,303

5,303

(12)

(99)

(99)

236

224

(192)

(192)

1

1

－

(10)

2,510

136

2,636

9,895

9,917

39,897(79)

59,631(Millions of yen)
Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements
difference ontranslationof defined benefit
available-for-saleadjustment
plans
securities
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

1,297

1,297

(22)

(22)

Changes of items during
periodIssuance of new shares
Dividends of surplus
Net income attributable toowners of parent
Purchase oftreasury shares
Disposal of treasury shares
Change in scope of
consolidation

1,146

1,146

Non-controllinginterests

Total net assets

4,638

64,596

(66)

(608)

4,572

63,988－(2,600)
5,303
(99)
224
(192)

―14―

(Millions of yen)
Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements
difference ontranslationof defined benefit
available-for-saleadjustment
plans
securities
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in
items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current
periodNon-controllinginterests

Total net assets

1

(188)

721

208

651

1,393

(188)

721

208

651

4,030

1,109

698

1,354

5,224

68,018―15―

(4) Consolidated Statement of Cash Flows
Fiscal year ended December 31,
2021 (from January 1, 2021 to
December 31, 2021)(Millions of yen)
Fiscal year ended December 31,
2022 (from January 1, 2022 to
December 31, 2022)

10,963
3,536

8,057
3,852

368
1,836

－
429

(635)

(882)

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Increase (decrease) in retirement benefit assets andliabilities
Increase (decrease) in allowance for doubtful accounts

90Interest and dividend income
Interest expenses

(227)
16

(198)
23

Foreign exchange losses (gains)
Loss (gain) on sale of investment securities

(33)
(32)

(217)
(10)

Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables

1
(161)

0
(1,338)Decrease (increase) in inventories
Decrease (increase) in other assets(5,114)(271)(4,266)(367)

Increase (decrease) in trade payables
Increase (decrease) in other liabilities
Other

668
(597)
(161)

2,997
(2,165)645

Subtotal

10,1656,557Interest and dividends received
Interest paid
Income taxes paid

227
(16)
(5,562)198(23)(2,830)Net cash provided by (used in) operating activities

4,814

3,901

(2,616)
186(4,893)
175

(286)
(101)

(999)
(20)

Proceeds from sale of investment securities
Purchase of shares of subsidiaries and associates

68
－

539
(163)

Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other payments
Other proceeds

－

(722)

(518)
48

(1,307)126

Net cash provided by (used in) investing activities(3,220)(6,266)(274)(1,314)(532)(1,021)

Purchase of treasury shares
Purchase of treasury shares of subsidiaries

(198)
(86)

(99)
(3)

Dividends paid
Dividends paid to non-controlling interests(2,536)(158)(2,600)
(155)

(41)

(51)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings

Other

―16―

Net cash provided by (used in) financing activities(Millions of yen)
Fiscal year ended December 31, Fiscal year ended December 31,
2021 (from January 1, 2021 to
2022 (from January 1, 2022 to
December 31, 2021)
December 31, 2022)(4,610)(4,464)

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period

―17―

327

447

(2,688)23,716(6,381)
21,027－

126

21,027

14,772

(5) Notes to Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Changes to accounting policies)(Adoption of the Accounting Standard for Revenue Recognition, etc.)
Effective from the beginning of the fiscal year ended December 31, 2022, the Earth Group has adopted the AccountingStandard for Revenue Recognition (ASBJ Statement No. 29; March 31, 2020) and Implementation Guidance on AccountingStandard for Revenue Recognition (ASBJ Guidance No. 30; March 26, 2021). As a result, the Group now recognizes revenue
at the time of transfer of control of promised goods or services to the customer, in the amount it expects to receive in exchange
for said goods or services.
In light of this, the Group has made the following changes.
(1) Change in the timing of revenue recognition
In the Household Products Business, the Company (parent) and some of its consolidated subsidiaries previously recognizedrevenue for sales of products at the time the products were shipped. Under the new accounting standards, however, revenue
is recognized when the products are shipped to the destination designated by the customer and handed over to the customer,
as this is when control of the products is transferred to the customer.
Under the previous accounting standards, for some transactions in the General Sanitary Management Business, revenue
was recognized over the period in which services promised in the contract were provided. Under the new accounting
standards, however, the Group identifies services that are performance obligations as promised in the contract, and since theperformance obligations are deemed satisfied when the services identified as such have been provided in full, the Group
recognizes revenue at the time of the completion of the services.
(2) Considerations payable to customers
From the fiscal year under review, the Group deducts a portion of sales promotion expenses and other considerations
payable to customers from revenue as it has identified performance obligations in contracts with customers. Under theprevious accounting standards, some sales promotion expenses and other considerations payable to customers were recorded
as SG&A expenses at the time the Group determined these payables were highly likely to occur. However, under the new
accounting standards, the Group makes a reasonable estimate of the variable portion of the transaction price based on pastrecords and only deducts from revenue the portion that is highly likely to not result in a substantial reduction in revenue.
(3) Products sales with rights of return
Under the previous accounting standards, the Group recorded provisions for product returns in the amount equivalent toanticipated losses resulting from the product returns based on the past rate of returns and gross profit margin. Under the new
accounting standards, however, the Group deducts from revenue the estimated amount of refunds payable to customers as an
obligation to refund the amount of consideration received for the products expected to be returned and recognizes refund
liabilities for the products in questions. Further, the Group records return assets and makes corresponding adjustments(deductions) to the cost of sales for its right to recover products from customers when the refund liabilities are settled.
(4) Revenue recognition for agent transactions
For the purchase and sales transactions involving denture-related products and toothpaste and toothbrush-related productswith GlaxoSmithKline Consumer Healthcare Japan Co., Ltd. (hereafter “GSKCHJ”), the Company previously recorded thetotal amount of consideration it expected to receive from customers as revenue. However, under the new accounting standards,
since the Company’s role of providing these products to customers is classified as that of an agent, the Company records a
net amount obtained by subtracting the amount it pays to GSKCHJ, the supplier, from the amount billed to the customer asrevenue.
The Group has applied the Accounting Standard for Revenue Recognition, etc. in accordance with the transitional treatment
stipulated in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative amount of
impact of retroactively applying the new accounting policy to periods prior to the fiscal year under review has been added toor subtracted from retained earnings at the beginning of said period, and the new accounting policy has been applied from the―18―

balance at the beginning of said period.
However, in accordance with the methods prescribed in Paragraph 86 of the Accounting Standard for Revenue Recognition,
the Group has not retroactively applied the new accounting policy to contracts prior to the fiscal year under review where
nearly all revenue amounts were recorded based on the previous accounting standards.
As a result, in the fiscal year under review, sales were reduced by 56,726 million yen, cost of sales by 38,780 million yen,and SG&A expenses by 16,261 million yen, and operating income, ordinary income, and net income before income taxes
were each reduced by 1,684 million yen. The balance of retained earnings at the beginning of the period under review was
down by 542 million yen, and the balance of non-controlling interests at the beginning of the said period was down by 66
million yen.
Further, net assets per share for the fiscal year under review was lowered by 77.35 yen, and earnings per share by 52.81
yen.
As a result of the application of the Accounting Standard for Revenue Recognition, etc., provisions for sales returns shown
under the current liabilities section of the consolidated balance sheet for the previous fiscal year ended December 31, 2021
are shown as return assets included in other under the current assets section and as refund liabilities under the current liabilities
section of the balance sheet from the fiscal year under review ended December 31, 2022. Note that in accordance with thetransitional treatment stipulated in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, the Group has notreclassified the amounts reported in the previous fiscal year using the new representation method. Further, in accordance withthe transitional treatment set forth in Paragraph 89-3 of the Accounting Standard for Revenue Recognition, the Group has notprovided any notes on revenue recognition related to the previous fiscal year.
(Application of Accounting Standard for Fair Value Measurement, etc.)
Effective from the beginning of the fiscal year under review, the Group has adopted the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30; July 4, 2019). In accordance with the transitional treatment stipulated in Paragraph
19 of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10; July 4, 2019), the Group has decided to prospectively apply the new accounting policy
prescribed in the Accounting Standard for Fair Value Measurement, etc. Please note that this has no impact on the Group’s
consolidated financial results.
(Change in presentation of results)(Changes to consolidated balance sheet)
In the fiscal year under review ended December 31, 2022, we have separately presented trademark, software, and customerrelated assets previously included in other under intangible assets to enhance the clarity of consolidated balance sheet display.
To reflect this change in presentation, we have retroactively revised the consolidated balance sheet for the previous fiscal year
ended December 31, 2021, replacing 3,853 million yen shown as other under intangible assets with trademark right, 975
million yen, software, 1,515 million yen, customer-related assets, 1,073 million yen, and other, 288 million yen.
(Changes to consolidated statement of cash flows)
In the fiscal year under review ended December 31, 2022, we have separately presented purchase of intangible assets
previously included in other payments under cash flows from investing activities to enhance the clarity of the display of
consolidated cash flow statements. To reflect this change in presentation, we have retroactively revised the statement of cash
flows for the previous fiscal year ended December 31, 2021, replacing (805) million yen shown as other payments under cash
flows from investing activities with purchase of intangible assets, (286) million yen and other payments, (518) million yen.

―19―

(Segment information, etc.)
a. Segment information
1. Overview of reportable segments
Earth Corporation's reportable segments represent constituent units of the Company’s corporate group for which separate financial
information is available. These segments are subject to periodic reviews conducted by the Company’s Board of Directors with theaim of evaluating business performance and facilitating decisions regarding the allocation of management resources.
Earth Corporation maintains a Household Products Business and a General Environment and Sanitation Business, and these twobusinesses constitute the Company's reportable segments.
Through its Household Products Business, the Company manufactures, sells, purchases, imports, and exports a variety of products,
including household insecticides and repellents; gardening supplies; household products (mouthwash, denture-related supplies,
toothpaste and associated products, bath salts, deodorizing air fresheners, etc.); pet products; chemical agents used for communicabledisease control and in the fields of agriculture, forestry, and animal husbandry; and raw materials for overseas markets.
Through General Environment and Sanitation Business, the Company provides hygiene management services for facilities suchas factories and hospitals.
2. Method for calculating sales, profit or loss, assets, liabilities and other items for each reportable segment
We apply the same accounting methods for all reportable segments as the ones we use to prepare consolidated financial statements.
The income figures of our reportable segments indicate operating income generated through these segments.
Intersegment sales and transfers are based on prevailing market prices.
3. Sales, income or loss, assets, liabilities and other items for each reportable segment
Fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)(Millions of yen)
Reportable segments
Adjustments*2

Amountrecorded inconsolidated
financialstatements*3

203,785－

203,785

138

11,942(11,942)－

188,493

27,234

215,728(11,942)

203,785

Segment income

9,944

1,114

11,059(391)

10,667

Segment assets

124,919

16,959141,879(21,163)

120,715

Depreciation*4

3,115

421

3,536

－

3,536

Amortization of goodwill

1,836

－

1,836

－

1,836

369

3,090

－

3,090

Household Products
Business

General Environment
and Sanitation
Business

176,689

27,095

11,804

Total

Total

Sales
Sales generated throughexternal customers
Intersegment sales andtransfers*1

Other items

Increases in tangible andintangible non-current
2,721
assets*4
Notes: 1. Includes internal sales within and among segments
2. Adjustments were as follows:(1) The 391 million-yen downward adjustment to segment income comprised eliminations of intersegment transactions.
(2) The 21,163 million-yen downward adjustment to segment assets is comprises eliminations of intersegment transactions.

―20―

3. Segment income (losses) are adjusted according to the amount of operating income indicated on the consolidated statements
of income.
4. "Depreciation" and "Increase in tangible and intangible non-current assets" include both amortization of, and increases in,long-term prepaid expenses.

―21―

Fiscal year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)(Millions of yen)
Reportable segments
General Environment
Household Products
and Sanitation
Business
Business

Adjustments*2

Amount recordedin consolidated
financialstatements*3

Total

Sales
Sales generated throughexternal customers
Intersegment sales andtransfers*1

124,529

27,809152,339－

152,339

11,957163

12,121(12,121)－

Total

136,486

27,973

164,460(12,121)

152,339

Segment income

5,909

1,430

7,339

94

7,434

Segment assets

130,579

17,748148,328(23,838)

124,489

3,430

421

3,852

－

3,852

429

－

429

－

429

259

5,997

－

5,997

Other items
Depreciation*4
Amortization of goodwill

Increases in tangible andintangible non-current
5,737
assets*4
Notes: 1. Includes internal sales within and among segments
2. Adjustments were as follows:(1) The 94 million yen adjustment to segment income comprised eliminations of intersegment transactions.
(2) The 23,838 million-yen downward adjustment to segment assets is comprises eliminations of intersegment transactions.
3. Segment income (losses) are adjusted according to the amount of operating income indicated on the consolidated statements
of income.
4. "Depreciation" and "Increase in tangible and intangible non-current assets" include both amortization of, and increases in,long-term prepaid expenses.
b. Related information
Fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)
1. Information by product and service(Millions of yen)
Householdinsecticides andrepellents
Sales generated throughexternal customers

62,858Household products

105,158

Pet products andothers
8,672

General Environment
and Sanitation
27,095

Total

203,785

2. Information about geographical areas(1) Sales
Sales by geographical area have been omitted because sales generated through external customers in Japan accounted for morethan 90% of sales reported on the Company's consolidated statement of income.

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(2) Property, plant and equipment(Millions of yen)
Japan

China
25,010Thailand
1,010

Other
1,425

Total
105

27,551

3. Information by the major customer(Millions of yen)
Customer name or title

Sales

Name of related segment

PALTAC Corporation

42,459Household Products Business

ARATA Corporation

35,971

Household Products Business

Fiscal year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)
1. Information by product and service(Millions of yen)
Householdinsecticides
and repellents
Sales generated throughexternal customers

Household products

53,099General Environment
and Sanitation

Pet products
and others

63,205

8,224

Total

27,809152,339

2. Information about geographical areas(1) Sales
Sales by geographical area have been omitted because sales generated through external customers in Japan accounted for morethan 90% of sales reported on the Company's consolidated statement of income.
(2) Property, plant and equipment(Millions of yen)
Japan

China
26,844Thailand
964

Other
1,513

Total
161

29,483

3. Information by the major customer(Millions of yen)
Customer name or title

Sales

Name of related segment

PALTAC Corporation

39,209Household Products Business

ARATA Corporation

37,414

Household Products BusinessAlfresa Healthcare Corporation

19,422

Household Products Business―23―

c. Information about impairment loss on non-current assets by reportable segment
Fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)(Millions of yen)
Reportable segments
GeneralEnvironment andHousehold
Sanitation
Products BusinessBusiness
Impairment
losses311

Adjustments

Total

Total

57

368

－

368

Fiscal year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)
None to be reported.

d. Amortization of goodwill and unamortized goodwill by reportable segment
Fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)(Millions of yen)
Reportable segments
GeneralEnvironment andHousehold
Sanitation
Products BusinessBusiness

Adjustments

Total

Total

Amortizationof goodwill

1,836

－

1,836

－

1,836

Unamortized
goodwill

423

－

423

－

423

Fiscal year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)(Millions of yen)
Reportable segments
GeneralEnvironment andHousehold
Sanitation
Products BusinessBusiness

Adjustments

Total

Total

Amortizationof goodwill

429

－

429

－

429

Unamortized
goodwill

105

－

105

－

105

4. Matters relating to changes in the reportable segments
As stated under Change to accounting policies above, the Company applied the Accounting Standard for Revenue
Recognition from the fiscal year ended December 31, 2022 and accordingly revised accounting procedures related to revenue
recognition. Methods of calculating profit and loss for each reportable segment have also been changed.
Due to the adoption of the new accounting standard, sales in the Household Products Business in the fiscal year under review
were reduced by 56,718 million yen and segment income by 1,677 million yen, and sales and segment income in the General
Environment and Sanitation Business were each reduced by 7 million yen, compared with what they would have been under
the previous accounting standard.

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(Per share information)

Fiscal year ended December 31, 2021
Fiscal year ended December 31, 2022
(from January 1, 2021 to December 31, 2021) (from January 1, 2022 to December 31, 2022)
Net assets per share

2,720.37 yen

2,846.07 yen

Net income per share

323.76 yen

240.47 yen

Notes: 1. Due to a lack of dilutive shares, diluted net income per share for the fiscal years ended December 31, 2021 and 2022 havebeen omitted.
2. The basis for calculating loss per share is as follows:
Fiscal year ended December 31,
2021(from January 1, 2021 to
December 31, 2021)

Fiscal year ended December 31,
2022(from January 1, 2022 to
December 31, 2022)(millions of yen)

7,142

5,303

Amount not attributable to common(millions of yen)shareholders
Net income attributable to ownersof parent attributable to common (millions of yen)
stock

－

－

7,142

5,303

22,062

22,055Item

Net income attributable to ownersof parent

Average number of common stock (thousands ofoutstanding during the fiscal year
shares)(Significant subsequent events)
None to be reported.

(6) Other
For further details, please refer to the announcement entitled "Notice of Change of Directors" released on February 13, 2023.

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