Consolidated Financial Results
for the Nine Months Ended September 30, 2021 (Japanese GAAP)
November 8, 2021
Company name:
Stock code:

Earth Corporation
4975

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

Representative:
Katsunori Kawabata, President and Representative Director, Chairman of the Board of Directors ofeach group company
Contact:
Tsuyoshi Mitsuzuka, Senior Executive Officer, Director General, Group Management
Headquarters
Tel:+81-3-5207-7458
Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:Results briefing to be held:
1.

—Yes
NoConsolidated Financial Results for the Nine Months Ended September 30, 2021
(January 1 to September 30, 2021)(1) Consolidated operating results
Sales(Percentages indicate YoY change)
Net income attributable
Ordinary income
to owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Nine months ended
165,167
4.4
20,35313.3
20,815
15.0
13,83815.5
September 30, 2021
Nine months ended
158,247
3.6
17,957103.3
18,093
100.2
11,977
119.1
September 30, 2020
Note: Comprehensive income for the nine months ended September 30, 2021 was 13,456 million yen (-2.5% YoY), and comprehensive
income for the nine months ended September 30, 2020 was 13,797 yen (+136.5% YoY)
Net income per share
Nine months ended
September 30, 2021
Nine months ended
September 30, 2020

Diluted net income
per share

Yen

Yen

627.20－587.52

587.11(2) Consolidated financial position
Total assets

Net assets

Million yen

Million yen

Equity ratio%

Nine months ended
128,841
70,62951.2
September 30, 2021
Fiscal year ended
119,87059,823
46.1
December 31, 2020
Reference: Equity capital amounted to 66,014 million yen as of September 30, 2021 and 55,299 million as of December 31, 2020.

―1―2.

Dividends
Dividend per share
End of Q1

End of Q2

Yen

End of Q3

Yen

Year-end

Yen

Total
Yen

Yen

Fiscal year ended
0.00
115.00－－December 31, 2020
Fiscal year ending
0.00－－
December 31, 2021
Fiscal year ending
December 31, 2021
115.00－(forecast)
Note: No revisions have been made to the Company’s most recently announced dividend forecast.

3.

115.00115.00Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2022
(January 1, 2021 to December 31, 2021)

Sales
Full-year

Operating income(Percentages indicate YoY change)
Net income
per share

Net income attributableto owners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

201,500

2.8

12,0005.1

12,400

6.3

7,700

117.1

348.97

Note: No revisions have been made to the Company’s most recently announced consolidated earnings forecast.

―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:
NoneSubsidiaries excluded:
None
Notes on changes in important subsidiaries during the period(2) Distinctive accounting methods applied when preparing quarterly consolidated financial statements: None
Notes on application of distinctive accounting methods in the preparation of quarterly consolidated financial statements(3) Changes in accounting policies and accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:
None
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None
Notes on changes in accounting policies(4) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury stock)

As of September
30, 2021

22,077,500

As of December
31, 2020

22,057,500

2. Treasury shares outstanding

As of September
30, 2021

6,873

As of December
31, 2020

5,065

3. Cumulative average number ofshares

Nine months ended
September 30,2021

22,063,184

Nine months endedSeptember 30,
2020

20,387,246

Notes on number of shares outstanding*The financial information in this quarterly report is not subject to review by certified public accountants or auditing firms.
*Appropriate use of earnings forecast and other special notes
The earnings forecasts and other forward-looking statements contained in this document are based on information currently available
to the Company, and certain assumptions it considers reasonable, but are not intended to be a promise that the Company will achieve.
Actual results may vary materially from forecasts due to a variety of factors. For more information regarding assumptions made when
formulating earnings projections and matters to note when using these projections, please see “1. Qualitative Information on Quarterly
Financial Performance (3) Explanation of Consolidated Earnings Forecasts and Other Projections” on page four of the accompanyingmaterials.

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Accompanying Materials ― Contents
Accompanying Materials ― Contents ........................................................................... 1
1. Qualitative Information on Quarterly Financial Performance ..................................................... 2(1) Explanation of Operating Results.......................................................................... 2(2) Explanation of Financial Position ......................................................................... 5(3) Explanation of Consolidated Earnings Forecasts and Other Projections ............................................ 5
2. Quarterly Consolidated Financial Statements and Primary Notes .................................................. 6(1) Consolidated Balance Sheet .............................................................................. 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income............................. 8
Consolidated Statement of Income ......................................................................... 8Consolidated Statement of Comprehensive Income............................................................ 10(3) Notes to Quarterly Financial Statements ................................................................... 11(Notes to going concern assumptions) ...................................................................... 11(Notes in the event of significant changes in shareholders’ equity) ................................................ 11―1―

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During the nine months ended September 30, 2021, the outlook remained extremely uncertain. Severe economic conditions
continued in the Japanese economy due to the COVID-19 pandemic, despite growth in the number of vaccinations and optimism
regarding the future impact of government policies. Some regions were subject to sporadic state of emergency declarations andmeasures to halt the spread of the disease. Meanwhile, conditions in Asian regions in which the Earth Corporation is conducting
business development continue to require close attention despite current economic recovery in China thanks to the resumption ofeconomic activities, which was made possible by early suppression of COVID-19’s spread in the same country. These conditions
still require monitoring because waves of COVID-19 infections continue to intermittently impact various nations in these Asianregions.
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 is striving to implement priority measures associated withthese policies during the fiscal year ending December 31, 2021, the first year of the plan.
During the nine months ended September 30, 2021, customer demand remained strong in the Household Products Business due
to lifestyle changes driven by the COVID-19 pandemic and new product launches. Sales in the General Environment and Sanitation
Business benefited from growth in contract numbers. As a result, the Company reported record-high performance for the ninemonths ended September 30, 2021, with 165,167 million yen in sales (+4.4% YoY), 20,353 million yen in operating income(+13.3% YoY), 20,815 million yen in ordinary income (+15.0% YoY), and 13,838 million yen in net income (+15.5%).
Results by segment were as follows.
Household Products Business
Through its Household Products Business, the Company endeavored to rejuvenate corresponding markets through advertising,
the creation of appealing sales areas, and other means of communicating with customers while pursuing new customers with thelaunch of new products and updating existing products to improve their value. At the same time, it strove to lower manufacturingcosts and selling costs as it targeted improvements in profitability.
Sales in the Household Products Business during the nine months ended September 30, 2021 amounted to 153,816 million yen,up 5.5% YoY, thanks to solid growth from new insecticides and repellents launched in spring 2021 and sales of bath salts, where
shifts in customer demand in response to the COVID-19 pandemic saw the market expand. Meanwhile, segment income (operatingincome) amounted to 19,151 million yen, up 15.5% YoY, due to growth in gross profit on higher sales and a better cost-to-sales
ratio driven by changes in product sales mix and efficient management of marketing costs that kept them within the Company’s
projected range.

―2―Results in the Household Products Business
Nine months ended
September 30, 2020

(Million yen)
Nine months ended
September 30, 2021

ChangeRate of change

Insecticides and repellents

63,80867,072

3,264

5.1%

Household products

74,92079,368

4,447

5.9%

Oral hygiene products

32,26433,587

1,323

4.1%

Bath salts

16,517

19,686

3,169

19.2%

Other household products

26,13826,094(44)(0.2%)Pet products and others

7,055

7,375

319

4.5%

Total sales

145,785

153,816

8,031

5.5%

Segment income (operating income)
16,574
19,151
2,576
15.5%
Note: Sales include internal sales and transfers made within and between segments, which amounted to 7,319 million yen during
the nine months ended September 30, 2020 and 9,196 million yen during the nine months ended September 30, 2021.
Insecticides and repellents
In Japan, demand continues to grow due to lifestyle changes associated with the pandemic, including recommendations toventilate living spaces and more time spent at home, but the market trended below elevated year-earlier levels amid lower
temperatures from August. Sales of Earth Mushiyoke Net EX (insect repellent) and Kobae ga Hoi Hoi (fruit fly traps) grew.
Market share expanded following the launch of new products such as Osu Dake Earth-Red Muen Push (no-flame fumigation of
cockroaches, mites, fleas). Performance overseas was strong, particularly in Thailand.
Sales amounted to 67,072 million yen (+5.1% YoY).
Household products
Sales of oral hygiene products came to 33,587 million yen, up 4.1% YoY, thanks to contribution from Mondahmin Premium
Care Sensitive (a mouthwash) and ongoing strong performance from Shumitect (a line of toothpastes formulated to prevent dentin
hypersensitivity).
Shifts in customer demand in response to the COVID-19 pandemic saw the market for bath salts expand. Bath salt sales were
19,686 million yen, up 19.2% YoY, due to continuing favorable performance from products such as Onpo tablets, the granularform of Kikiyu (a carbonated bath agent), and packaged bath salts Ii Yu Tabidachi.
Sales of other household products came to 26,094 million yen, down 0.2% YoY. Sales of the Rakuhapi series of cleaningproducts grew as demand remained solid, but sales of dehumidifiers and refrigerants declined YoY due to a drop-off versus stayat-home demand the previous year and cooler temperatures from August onward.
Segment sales amounted to 79,368 million yen (+5.9% YoY).
Pet products and others
Sales of pet products and other miscellaneous products came to 7,375 million yen, up 4.5%, thanks to existing product updates
and ongoing growth in sales of cleaning towels and other pet care products driven by dynamic promotional measures.
General Environment and Sanitation BusinessIn the General Environment and Sanitation Business, outsourcing needs for hygiene management are on the rise due to risingconsumer awareness regarding safety and security and difficulty in securing factory workers stemming mainly from a decrease in
the size of Japan’s working population. Accordingly, demand for the Group’s high-quality hygiene management services have risenamong the food and packing material factories that constitute the Group’s core customer base.
Under these circumstances, we endeavored to maintain and expand our contracts by providing standout quality assurance services
through the enhancement of our technological development capabilities. At the same time, we actively invested in the constructionof an internal framework that facilitates the prompt fulfillment of customer needs associated primarily with software development
aimed at improving operational efficiency and recruiting and training human resources. Along with these efforts, we intensified ourinitiatives in the pharmaceutical and regenerative medicine industries and efforts associated with auditing and consulting services
related to food safety management.
Sales in the General Environment and Sanitation Business amounted to 20,650 million yen (+3.9% YoY), and segment income―3―(operating income) came to 1,237 million yen (-4.0% YoY) as personnel expenses rose along with payroll growth.
Results in the General Environment and Sanitation Business
Nine months ended
September 30, 2020

(Million yen)
Nine months ended
September 30, 2021

ChangeRate of change

Sales

19,877

20,650772

3.9%Segment income (operating income)

1,289

1,237(51)(4.0%)

Note: Sales include internal sales and transfers made within and between segments, which amounted to 96 million yen in the ninemonths ended September 30, 2020 and 102 million yen in the nine months ended September 30, 2021.

―4―

(2) Explanation of Financial Position(1) Assets, Liabilities and Net Assets
As of September 30, 2021, total assets amounted to 128,841 million yen, up 8,971 million yen from December 31, 2020, due
primarily to increases in cash, deposits, and accounts receivable.
Meanwhile, total liabilities as of September 30, 2021, came to 58,211 million yen, down 1,834 million yen from December 31,2020, despite growth in accounts payable-trade, as other accounts payable declined.
Net assets amounted to 70,629 million yen as of September 30, 2021, rising 10,806 million yen compared to December 31, 2020,
mainly because of an increase in retained earnings.
The Company’s equity ratio was 51.2% as of September 30, 2021, up 5.1 points from December 31, 2020.
(2) Cash Flows
The Company has not prepared a statement of cash flows for the period ended September 30, 2021, so disclosure is omitted.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
The Company has made no changes to its full-year earnings forecast for the financial year ending December 31, 2021, which
was announced on July 28, 2021.
This forecast is based on information available to the Company at the time of its formulation. Actual results may differ
substantially from the projections included within due to potential changes affecting a variety of factors.

―5―2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet(Millions of yen)
Nine months ended
September 30, 2021
(as of September 30, 2021)

Fiscal year ended
December 31, 2020(as of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

23,716
22,74628,19027,520

Merchandise and finished goods
Work in process

17,403789

19,813812

Raw materials and supplies
Other

3,986
2,124

4,362
2,419

Allowance for doubtful accounts
Total current assets

(20)

(25)

70,747

83,09429,002(14,982)

29,740(16,071)

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

14,01913,668Machinery, equipment and vehicles
Accumulated depreciation and impairment

Buildings and structures, net

15,598(11,357)

16,043(12,058)

Machinery, equipment and vehicles, net

4,240

3,985

7,875
115

7,856
226

(58)

(67)

Leased assets, net

56

159

Construction in progress
Other

389
8,616

387
9,066

Accumulated depreciation and impairment(7,166)(7,538)Other, net

1,449

1,527

28,03027,585Land
Leased assets
Accumulated depreciation and impairment

Total property, plant and equipment
Intangible assets
Goodwill

2,260

846

Other

4,008

3,841

Total intangible assets

6,268

4,688

Investment securities
Retirement benefit asset

8,001
4,343

6,516
4,584

Deferred tax assets
Other

1,152
1,333

764
1,618

Allowance for doubtful accounts

(7)

(11)

Total investments and other assets

14,823

13,472

49,12245,746

119,870

128,841

Investments and other assets

Total non-current assets
Total assets―6―

Fiscal year ended
December 31, 2020(as of December 31, 2020)(Millions of yen)
Nine months ended
September 30, 2021
(as of September 30, 2021)

Liabilities
Current liabilitiesNotes and accounts payable - trade
Short-term borrowings

31,714
1,756

33,9591,132

Current portion of long-term borrowings
Accounts payable - other

1,314
10,017

1,055
6,276

Income taxes payable
Accrued consumption taxes

3,640
1,684

4,267
1,629

Provision for bonuses
Provision for sales returns

312
595

1,621
1,831

Other

3,848

2,785

Total current liabilities

54,88454,557

Non-current liabilities
Long-term borrowings

2,218

1,440

Deferred tax liabilities
Retirement benefit liability

1,329
454

731
390

Asset retirement obligations
Other505
652

517
573

Total non-current liabilities

5,161

3,653

60,046

58,211

Shareholders' equity
Share capital

9,829

9,895

Capital surplus
Retained earnings

9,859
33,322

9,928
44,624

Treasury shares

(17)

(17)

Total liabilities
Net assets

52,99464,430

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

Total shareholders' equity

2,723

1,640

(789)

(325)

Remeasurements of defined benefit plans

371

269

2,304

1,584

4,524

4,615

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets―7―59,82370,629

119,870

128,841

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
Nine months ended
September 30, 2020
(from January 1, 2020
to September 30, 2020)
158,247
92,36065,886(Millions of yen)
Nine months ended
September 30, 2021
(from January 1, 2021
to September 30, 2021)
165,167
94,536
70,631

4,784
5,398
11,365(0)
10,707
1,144
796
824
1,836
1,006
1,8428,222
47,9295,049
5,686
11,546
10
11,334
1,219
784
936
1,413
1,066
2,032
9,197
50,278Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Commission income
Rental income from buildings
Other

17,957

20,353

31
64
—
2365
106

54
107
32
20
34260

Total non-operating income
Non-operating expenses
Interest expenses
Stock issuance expenses
Foreign exchange losses
Compensation for damage
Other
Total non-operating expenses

290

510

4240

12—

50—
21154

—
278
48

18,093

20,815

7—

115
32

7

147

1057249410358612311——329

17,741
6,340(852)5,488

20,633
6,191
278
6,469

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

Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment losses
Loss on valuation of investment securities
Loss on valuation of golf club membership
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes―8―Net income

Nine months ended
September 30, 2020
(from January 1, 2020
to September 30, 2020)
12,253(Millions of yen)
Nine months ended
September 30, 2021
(from January 1, 2021
to September 30, 2021)
14,164275
11,977325
13,838Net income attributable to non-controlling interests
Net income attributable to owners of parent―9―

Consolidated Statement of Comprehensive Income

Nine months ended
September 30, 2020
(from January 1, 2020
to September 30, 2020)
12,253(Millions of yen)
Nine months ended
September 30, 2021
(from January 1, 2021
to September 30, 2021)
14,164

Other comprehensive income
Valuation difference on available-for-sale securities

1,956(1,068)Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax(354)
(57)

464
(104)

Total other comprehensive income

1,544(707)

13,797

13,456

13,532

13,117265

338

Net income

Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests―10―

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

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

―11―