Consolidated Financial Results for the Nine Months Ended September 30, 2021[JGAAP]

Consolidated Financial Results

for the Nine Months Ended September 30, 2021 (Japanese GAAP)

		November 8, 2021
Company name:	Earth Corporation	Listing Stock Exchange: Tokyo
Stock code:	4975	URL: https://corp.earth.jp/en/index.html
Representative:	Katsunori Kawabata, President and Representative Director, Chairman of the Board of Directors of
each group company
Contact:	Tsuyoshi Mitsuzuka, Senior Executive Officer, Director General, Group Management
	Headquarters
Tel:	[phone]
Scheduled date for quarterly report submission:
Scheduled date for dividend payment:	-
Preparation of supplemental explanatory materials:	Yes
Results briefing to be held:	No

1. Consolidated Financial Results for the Nine Months Ended September 30, 2021 (January 1 to September 30, 2021)

(1) Consolidated operating results

(Percentages indicate YoY change)

	Sales		Operating income	Ordinary income	Net income attributable
		to owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%
Nine months ended	165,167		4.4	20,353	13.3	20,815	15.0	13,838	15.5
September 30, 2021
Nine months ended	158,247		3.6	17,957	103.3	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	Diluted net income
	per share
	Yen	Yen
Nine months ended	627.20	－
September 30, 2021
Nine months ended	587.52	587.11
September 30, 2020

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
Nine months ended	128,841	70,629	51.2
September 30, 2021
Fiscal year ended	119,870	59,823	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	End of Q3		Year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended	－	0.00	－		115.00	115.00
December 31, 2020
Fiscal year ending	－	0.00	－
December 31, 2021
Fiscal year ending
December 31, 2021			－		115.00	115.00
(forecast)

Note: No revisions have been made to the Company's most recently announced dividend forecast.

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

(Percentages indicate YoY change)

	Sales		Operating income	Ordinary income	Net income attributable	Net income
		to owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full-year	201,500	2.8	12,000	5.1	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:	None
Subsidiaries excluded:	None

Notes on changes in important subsidiaries during the period

1. 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)
2. Treasury shares outstanding
3. Cumulative average number of shares

As of September	22,077,500	As of December	22,057,500
30, 2021	31, 2020
As of September	6,873	As of December	5,065
30, 2021	31, 2020
Nine months ended		Nine months ended
September 30,	22,063,184	September 30,	20,387,246
2021		2020

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 accompanying materials.

―3―

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 .........................................................................	8
Consolidated 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 and measures 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 of economic 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 Asian regions.

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," the plan 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 with these 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 nine months 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 the launch of new products and updating existing products to improve their value. At the same time, it strove to lower manufacturing costs 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 (operating income) 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―