Financial Results Briefing Materials for the Second Quarter of the Fiscal Year Ending December 2026 | Earth Corporation (4985) timely disclosure

Worth reading

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Direction

Mixed performance

Direction inferred from the company’s description.

Scale

132.1

¥ billions (operating income)

Wording

Conditional

How definitive the wording is.

Contents of this document

Earnings presentationSecond quarter of the fiscal year ending December 202616 items taken from the company’s own explanation

Financial Results Figures (The key points of this material are explained below)

Net Sales¥109,055 million+6.2%

Operating profit¥13,219 million-2.5%

Ordinary income¥13,484 million-1.3%

Net income¥8,795 million -6.2%interim net profit attributable to owners of the parent

Selling, general and administrative expenses¥34,012 million

Gross Profit Margin

Rate43.3%

Year on year against the same period last year▲0.7pt

Operating profit margin

Rate12.1%

Year on year against the same period last year▲1.1pt

Results for the three months of the current quarterOperating profit was ¥7.27 billion for the standalone second quarter of FY2026 (as shown in the quarterly graph in the materials).

Full-year earnings forecast

Net Sales

¥188,000 million

Gross profit

¥78,900 million

Selling, general and administrative expenses

¥69,900 million

Operating profit

¥9,000 million

Ordinary income

¥9,550 million

Net income attributable to owners of the parent

¥6,200 million

ROE

8.1 %

Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。

Selling, general and administrative expenses

48.7 %

Breakdown of selling, general and administrative expenses

Personnel Expenses48.9%

Freight expenses50.8%

Storage fees51.9%

Advertising expenses50.5%

Selling and Marketing Expenses45.7%

Research and development costs46.6%

Depreciation and amortization48.1%

Amortization of goodwill50.0%

Travel and transportation expenses44.0%

Entertainment expenses49.9%

Fees paid51.9%

Sales Commissions38.2%

Miscellaneous expenses36.4%

Other47.0%

What the company explained in this material

Self-assessment against the planThe company's self-assessment against its own plan.

Revenue was in line with the plan. SG&A expenses remained within the plan, and operating profit increased. Operating profit is progressing well against the full-year plan.

Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.

Operating income versus plan

Sales above plan0.2

Impact of higher cost ratio-4.1

Foreign Exchange Effects-1.8

Selling and Marketing Expenses1.6

Logistics Costs-0.3

Advertising expenses6.9

Personnel Expenses-0.7

Activity expenses1.1

Research and development costs0.9

Fees paid1.1

Advisory fees2

Other expenses2.9

Year-on-year operating profit growth

Gross profit from the newly consolidated Protoleaf business2.3

Impact of higher revenue23.7

Change in Revenue Mix-5

Raw material price fluctuations-0.2

Selling and Marketing Expenses-2.7

Logistics Costs-6.6

Expenses from the newly consolidated Protoleaf business-2.8

Advertising expenses-9.6

Personnel Expenses-0.7

Activity expenses-0.2

Research and development costs-0.6

Other expenses-1

Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.

Exchange rate

USD150

CNY21

THB4.5

VND0.01

MYR35

PHP2.6

EUR170

Foreign exchange sensitivityA 1% depreciation of the yen against all currencies would have a negative impact of approximately ¥60–70 million on profit.

New initiatives

Price revisions focused mainly on daily necessities from September
Make Singapore-based Marvel Clean and Marvel Home wholly owned subsidiaries and establish them as a hub for expansion in ASEAN
Expand distribution of MA-T oral care products through Welcia Pharmacy and Tsuruha Pharmacy
Participation in the public-private-academic consortium for heatstroke prevention and launch of the “Heat Care” website
Concentrate advertising investment on “Mondamin Premium Care”

Key KPIsA metric the company considers important as a management benchmark.

Year-on-year change in the domestic insect control products market103 %
Company share of the domestic insect control products market60.2 %
Year on year against the same period last year+1.0pt
Oral care products market, year-on-year comparison105.9 %
The Company’s oral care products market share18.8 %
Year on year against the same period last year+0.2pt
Mondamin sell-through110.2 %
Number of annual Comprehensive Environmental Hygiene contracts16,646 Engagements
Reduction in MA-T cleaning time30 %
Reduction in mattress disposal rate80 %

Unit price and quantity metricsThese figures show sales broken down by price and volume.

The number of annual contracts in the Integrated Environmental Hygiene business increased, and the average price per contract also rose.

Segment results

Insect Control Products segment total

Net Sales¥51,721 million

Year on year against the same period last year+9.1%

Daily Necessities segment total

Net Sales¥33,319 million

Year on year against the same period last year-0.3%

Gardening Products segment total

Net Sales¥6,514 million

Year on year against the same period last year+23.6%

Pet Products and Other segment total

Net Sales¥6,119 million

Year on year against the same period last year-1.8%

Household Products business total

Net Sales¥97,675 million

Year on year against the same period last year+5.8%

Comprehensive Environmental Hygiene business total

Net Sales¥18,189 million

Year on year against the same period last year+7.7%

Medium-term management plan targets

Capture a 50% share of the bath additives market (medium- to long-term target). The Company aims to expand earnings through four pillars: domestic operations, overseas operations, Integrated Environmental Hygiene, and MA-T.

Financial targets

ROE

2026 plan8.1 %

2025 actual7.3 %

Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.

The Middle East situation and higher prices for raw materials, containers and packaging materials are expected to have a negative impact of approximately ¥1 billion on cumulative operating profit for the current fiscal year. This is expected to be offset through price increases and other measures.

Market Size / Share

Domestic insect control productsMarket: 103.0% of the previous period; the Company’s share: 60.2% (+1.0 percentage point)

Oral Hygiene ProductsMarket: 105.9% of the previous period; the Company’s share: 18.8% (+0.2 percentage point)

Bath additivesMarket: 100.3% of the previous period; the Company’s share: 41.8% (down 0.7 percentage point)

Number of stores and locations

Distribution of MA-T oral care products began at 200 Welcia Pharmacy stores in the Kansai area and 120 Tsuruha Pharmacy stores nationwide. The regular number of stores and store openings and closures are not disclosed.

Capital expenditures

¥6,536 million 2026 plan

Annual Dividend

Annual dividend per share¥130

BreakdownFY2026 forecast. The interim and year-end breakdown is not disclosed.

Payout ratio

2026 forecast45.8 %

202552.1 %

DOE

2026 forecast3.7 %

20253.8 %

Acquisition of treasury shares

As part of its shareholder return policy, the Company will consider share buybacks flexibly. The acquisition limit, number of shares and period are not disclosed.

Contents of this document
Item	Details
Document type	Earnings presentation
Fiscal Period Covered	Second quarter of the fiscal year ending December 2026
Net Sales	¥109,055 million (YoY +6.2%)
Operating profit	¥13,219 million (YoY -2.5%)
Ordinary income	¥13,484 million (YoY -1.3%)
Net income	¥8,795 million (interim net profit attributable to owners of the parent) (YoY -6.2%)
Gross Profit Margin	Rate 43.3% / Year on year against the same period last year ▲0.7pt
Operating profit margin	Rate 12.1% / Year on year against the same period last year ▲1.1pt
Selling, general and administrative expenses	¥34,012 million
Results for the three months of the current quarter	Operating profit was ¥7.27 billion for the standalone second quarter of FY2026 (as shown in the quarterly graph in the materials).
Full-year earnings forecast	Net Sales ¥188,000 million / Gross profit ¥78,900 million / Selling, general and administrative expenses ¥69,900 million / Operating profit ¥9,000 million / Ordinary income ¥9,550 million / Net income attributable to owners of the parent ¥6,200 million / ROE 8.1 %
Progress against full-year forecast	Selling, general and administrative expenses 48.7 % / Breakdown of selling, general and administrative expenses Personnel Expenses 48.9% / Freight expenses 50.8% / Storage fees 51.9% / Advertising expenses 50.5% / Selling and Marketing Expenses 45.7% / Research and development costs 46.6% / Depreciation and amortization 48.1% / Amortization of goodwill 50.0% / Travel and transportation expenses 44.0% / Entertainment expenses 49.9% / Fees paid 51.9% / Sales Commissions 38.2% / Miscellaneous expenses 36.4% / Other 47.0%
Self-assessment against the plan	Revenue was in line with the plan. SG&A expenses remained within the plan, and operating profit increased. Operating profit is progressing well against the full-year plan.
Segment results	Insect Control Products segment total Net Sales ¥51,721 million / yoy_pct ¥9.1 million / Daily Necessities segment total Net Sales ¥33,319 million / yoy_pct ¥-0.3 million / Gardening Products segment total Net Sales ¥6,514 million / yoy_pct ¥23.6 million / Pet Products and Other segment total Net Sales ¥6,119 million / yoy_pct ¥-1.8 million / Household Products business total Net Sales ¥97,675 million / yoy_pct ¥5.8 million / Comprehensive Environmental Hygiene business total Net Sales ¥18,189 million / yoy_pct ¥7.7 million
Breakdown of Factors Affecting the Change	Operating income versus plan Sales above plan 0.2 / Impact of higher cost ratio -4.1 / Foreign Exchange Effects -1.8 / Selling and Marketing Expenses 1.6 / Logistics Costs -0.3 / Advertising expenses 6.9 / Personnel Expenses -0.7 / Activity expenses 1.1 / Research and development costs 0.9 / Fees paid 1.1 / Advisory fees 2 / Other expenses 2.9 / Year-on-year operating profit growth Gross profit from the newly consolidated Protoleaf business 2.3 / Impact of higher revenue 23.7 / Change in Revenue Mix -5 / Raw material price fluctuations -0.2 / Selling and Marketing Expenses -2.7 / Logistics Costs -6.6 / Expenses from the newly consolidated Protoleaf business -2.8 / Advertising expenses -9.6 / Personnel Expenses -0.7 / Activity expenses -0.2 / Research and development costs -0.6 / Other expenses -1
Key KPIs	Indicator name Year-on-year change in the domestic insect control products market / Value 103 % / Year on year against the same period last year Not disclosed, Indicator name Company share of the domestic insect control products market / Value 60.2 % / Year on year against the same period last year +1.0pt, Indicator name Oral care products market, year-on-year comparison / Value 105.9 % / Year on year against the same period last year Not disclosed, Indicator name The Company’s oral care products market share / Value 18.8 % / Year on year against the same period last year +0.2pt, Indicator name Mondamin sell-through / Value 110.2 % / Year on year against the same period last year Not disclosed, Indicator name Number of annual Comprehensive Environmental Hygiene contracts / Value 16,646 Engagements / Year on year against the same period last year Not disclosed, Indicator name Reduction in MA-T cleaning time / Value 30 % / Year on year against the same period last year Not disclosed, Indicator name Reduction in mattress disposal rate / Value 80 % / Year on year against the same period last year Not disclosed
Unit price and quantity metrics	The number of annual contracts in the Integrated Environmental Hygiene business increased, and the average price per contract also rose.
Number of stores and locations	Distribution of MA-T oral care products began at 200 Welcia Pharmacy stores in the Kansai area and 120 Tsuruha Pharmacy stores nationwide. The regular number of stores and store openings and closures are not disclosed.
Assumptions Underlying the Business Outlook	Exchange rate USD 150 / CNY 21 / THB 4.5 / VND 0.01 / MYR 35 / PHP 2.6 / EUR 170 / Foreign exchange sensitivity A 1% depreciation of the yen against all currencies would have a negative impact of approximately ¥60–70 million on profit.
Risk amount incorporated into the outlook	The Middle East situation and higher prices for raw materials, containers and packaging materials are expected to have a negative impact of approximately ¥1 billion on cumulative operating profit for the current fiscal year. This is expected to be offset through price increases and other measures.
Medium-term management plan targets	Capture a 50% share of the bath additives market (medium- to long-term target). The Company aims to expand earnings through four pillars: domestic operations, overseas operations, Integrated Environmental Hygiene, and MA-T.
Financial targets	ROE 2026 plan 8.1 % / 2025 actual 7.3 %
Annual Dividend	Annual dividend per share ¥130 / Breakdown FY2026 forecast. The interim and year-end breakdown is not disclosed.
Payout ratio	2026 forecast 45.8 % / 2025 52.1 % / DOE 2026 forecast 3.7 % / 2025 3.8 %
Acquisition of treasury shares	As part of its shareholder return policy, the Company will consider share buybacks flexibly. The acquisition limit, number of shares and period are not disclosed.
Capital expenditures	¥6,536 million (2026 plan)
Market Size / Share	Domestic insect control products Market: 103.0% of the previous period; the Company’s share: 60.2% (+1.0 percentage point) / Oral Hygiene Products Market: 105.9% of the previous period; the Company’s share: 18.8% (+0.2 percentage point) / Bath additives Market: 100.3% of the previous period; the Company’s share: 41.8% (down 0.7 percentage point)
New initiatives	Price revisions focused mainly on daily necessities from September, Make Singapore-based Marvel Clean and Marvel Home wholly owned subsidiaries and establish them as a hub for expansion in ASEAN, Expand distribution of MA-T oral care products through Welcia Pharmacy and Tsuruha Pharmacy, Participation in the public-private-academic consortium for heatstroke prevention and launch of the “Heat Care” website, Concentrate advertising investment on “Mondamin Premium Care”

Items this document does not state (3)

Number of employeesOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Revenue was supported by new insect care products, an increase in contract volume in the Integrated Environmental Hygiene business, and higher overseas revenue. On the profit side, soaring prices for raw materials, containers and packaging materials, changes in the sales mix, foreign exchange movements, and increases in advertising and logistics expenses reduced profit, while the restraint and non-use of fixed costs such as advertising expenses contributed to profit exceeding the plan.

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