Earth Corporation · TSE:4985
Earth — Q1 2022 Earnings Presentation
33 slides from Earth's earnings presentation, May 11, 2022
Slide 1: Earnings briefing materials for 1Q of the fiscal year ended December 2022
Earnings briefing materials for 1Q of the fiscal year ended December 2022 11/05/2022
Slide 2: Summary of FY12/2022.1Q
Summary of FY12/2022.1Q • Effect of adoption of accounting standard for revenue recognition ‣ Quarterly operating income changed from the previous standard due to the implementation of accrual of sales promotion expenses ‣ Minor impact on year-to-date operating income • Financial Highlights of FY12/
Slide 3: Effect of adoption of accounting standard for revenue recognition
Effect of adoption of accounting standard for revenue recognition
Slide 4: Estimated annual impact
Estimated annual impact Items like trades through intermediaries, sales promotion expenses, etc. are deducted from sales, impacting the P/L side, namely sales, gross profit and SG&A expenses; Impact on operating income and items below is minor Impact to the balance sheet is minor (Unit: 0.1 bill
Slide 5: Timing of recording sales promotion expenses (sales deductions)
Timing of recording sales promotion expenses (sales deductions) System is being built to more timely identify the actual status of revenue and to improve the efficiency of sales promotion expenses Reasonably estimate variable promotional expenses from the promotional expense plan tied to the sal
Slide 6: Quarterly Sales Promotion Plan
Quarterly Sales Promotion Plan Cf. Previous standard* (Unit: 0.1 billion JPY) Assume that from this fiscal year, sales promotion expenses will generally follow a curve in proportion to net sales ➡ Expenses are linked to highly seasonal sales trends, and profits are more even than before. 683.0 700
Slide 7: Operating Income Forecast (Quarterly/Cumulative total)
Operating Income Forecast （Quarterly/Cumulative total） Although visually, operating income in Q1-Q3 is expected to decline YoY, the impact on the year-to-date total is expected to be negligible (Unit: 0.1 billion JPY) Q1 Q2 Q3 Q4 Quarterly 81.0 52.0 80.5 105.2 17.9 7.0 - 96.9 - 32.5 FY2021 FY2022
Slide 8: Financial Highlights of FY12/2022.1Q
Financial Highlights of FY12/2022.1Q
Slide 9: FY12/2022.1Q Results Highlights
FY12/2022.1Q Results Highlights Sales and gross profit were slightly below plan, but SG&A expenses were within budget, and operating income was generally in line with plan Impact of raw material price hikes expected to become apparent in 2Q and beyond After application of the "Accounting Standar
Slide 10: Gross sales, returns and sales deductions
Gross sales, returns and sales deductions Real gross sales compared on the same basis exceeded the previous year and slightly missed the plan Returns exceeded both the prior year and the plan, but will not affect the majority at this time Sales deductions are within the scope of the plan (Unit
Slide 11: Sales by Segment
Sales by Segment *To outside customers (excludes internal eliminations) (Unit: 0.1 billion JPY) Initial response to insecticides & repellents was a little sluggish, but within expectations Bath salts are performing well, but the plan was set higher and has not been achieved 156.7 FY2021(Realized
Slide 12: Impact on cost of sales
Impact on cost of sales Although the impact of raw material price hikes and foreign exchange rates is expected to be slightly more severe than originally planned due to the sharp depreciation of the yen and the situation in Ukraine, additional measures will reduce cost burdens Impact of China lo
Slide 13: FY12/2022.1Q SG&A Forecast Details
FY12/2022.1Q SG&A Forecast Details (Unit: 0.1 billion JPY) As of 1Q FY2022, all expenses were properly executed within budgeted amounts Most of the items that have not been achieved are due to the discrepancy between the assumptions made at the time of budget planning and the timing of actual ap
Slide 14: Overseas Results (Including Cross-Border EC)
Overseas Results (Including Cross-Border EC) (Unit: 0.1 billion JPY) Actual Sales YOY：116%, Good performance mainly in Thailand and Vietnam Slightly lower profit margin due to lower export sales from Japan than the previous ye Continue to monitor the impact of the lockdown in China from 2Q onw
Slide 15: Overseas Business Performance (Country Situation)
Overseas Business Performance (Country Situation) China Thailand 【Results】 【Results】 Sales：Actual* YonY change 96% Sales：Actual* YonY change 111% YoY decline was expected and largely in line Good development in Thailand against a with the plan as of 1Q backdrop of economic recovery prioritie
Slide 16: Recent Topics, Investment Policy and Shareholder Returns
Recent Topics, Investment Policy and Shareholder Returns
Slide 17: Topic: Overview of Domestic Market for Insecticides & Repellents
Topic：Overview of Domestic Market for Insecticides & Repellents（As of the end of April） Market YonY change：102.0% Our market share steadily increased to 57.5% (+0.7 pt YonY) Strong sales of products for ticks and pests are increasing their share in the market Market Earth Group Share Market co
Slide 18: Topic: Overview of Domestic Market for Bath Salts
Topic：Overview of Domestic Market for Bath Salts （As of the end of April） Market YonY change ：102.4% Our market share is 46.2% (-1.0 pt YonY) Sales of divided packaged and individually packaged types were good Market Earth Group Share Market composition ratio Bath Salts Y on Y 21.1Q 22.1Q ± 21
Slide 19: Topic: New Product Trends
Topic：New Product Trends (As of the end of April) New products launched in spring, including MAMOROOM, Zerodenite, and Puriture, contributed to substantial revenue growth Favorable conditions, far exceeding plans MAMOROOM Zerodenite Puriture vs. Forecast vs. Forecast vs. Forecast 231% 315% 93% R
Slide 20: Topic: Sustainability
Topic：Sustainability Recognized as one of the "White 500 in Health Management Establish materiality and non-financial KPIs Excellence Corporation 2022". Set non-financial KPIs tied to materiality Our efforts were highly evaluated and certified Materiality 2030 Target KPI SDGs for the second cons
Slide 21: Investment Philosophy
Investment Philosophy Investing for revenue growth while securing 10-15% of total assets Cash Hurdle rates for each project; 7% as a guide, taking into account the risk of each deal Appropriate decision-making process based on investment adoption criteria that results in a positive equity spread
Slide 22: Shareholders Returns
Shareholders Returns Target a Dividend on Equity Ratio (DOE) of 4 – 5% For FY2022, we forecast a dividend per share of 118 yen, a DOE of 4.2%, and a consolidated dividend payout ratio of 35.8% Adopt an agile approach and, should our performance and retained earnings levels allow it, consider r
Slide 23: Forward-looking statements disclaimer
This presentation contains forward-looking statements and financial results forecasts. These forward-looking statements and financial results forecasts were formulated on the basis of company assumptions based on the information available. These statements and forecasts are subject to risks and unce
Slide 24: Supplementary Materials; FY12/2022 1Q Results
Supplementary Materials; FY12/2022 1Q Results
Slide 25: Consolidated Statement of Income
Consolidated Statement of Income （Unit：million JPY） 1Q FY12/21 1Q FY12/22 1Q FY12/22 FY12/2022 1Q FY12/21 （単位：百万円） Realized* Forecast Realized Forecast Realized** Sales 37,034 38,900 38,603 155,000 49,278 Cost of sales 19,951 21,000 21,236 88,150 27,497 Gross profit 17,083 17,900 17,367 66,850 21,78
Slide 26: Consolidated Sales by Segment
Consolidated Sales by Segment （Unit：million JPY） 1Q FY12/21 1Q FY12/22 1Q FY12/22 FY12/2022 1Q FY12/21 （単位：百万円） Realized* Forecast Realized Forecast Realized** Insecticides & Repellents 17,183 17,612 17,684 61,431 19,114 Oral hygene products 1,799 1,917 1,769 8,280 10,142 Bath salts 5,812 6,744 6,20
Slide 27: Operating Income Change Factors (YonY)
Operating Income Change Factors (YonY) （Unit：million JPY） 5,774 FY12/21.1Q (Realized)* ＜Breakdown＞ Increase in gross • Increase in gross profit due to an increase in sales ＋680 profit ＋283 • Impact from changes in the sales composition ratio • Impact from raw material prices and - 396 exchange rate
Slide 28: Operating Income Change Factors (VS. Forecast)
Operating Income Change Factors (VS. Forecast) （Unit：million JPY） 5,200 FY12/22.1Q (Forecast) ＜Breakdown＞ Gross Profit • Impact from sales plan not achieved -135 overperformance - 532 • Impact from changes in the sales composition ratio -397 • Impact from raw material prices and exchange rate fluctu
Slide 29: Consolidated SG&A Expenses
Consolidated SG&A Expeses （Unit：million JPY） 1Q FY12/21 1Q FY12/22 1Q FY12/22 FY12/2022 1Q FY12/21 * （単位：百万円） Realized Forecast Realized Forecast Realized** Personnel expenses 4,723 5,084 4,987 20,910 4,723 Shipping costs 875 945 957 4,449 875 Storage costs 539 605 599 2,511 539 Advertising expenses
Slide 30: Consolidated Balance Sheet
Consolidated Balance Sheet （Unit：million JPY） Y on Y End of 2021.1Q 2022.1Q （単位：百万円） +/- 2021 Current Cash & deposits 10,602 16,221 5,618 21,027 assets Trade receivable 32,853 33,448 595 22,941 Inventories 28,998 33,848 4,849 27,502 Others 2,112 2,890 778 2,547 Non-current Property, plant & equipmen
Slide 31: Consolidated: Capital expenditure, Depreciation expenses
Consolidated: Capital expenditure, Depreciation expenses （Unit：million JPY） FY2018 FY2019 FY2020 FY2021 FY2022 FY2018 FY2019 FY2020 FY2021 FY2022 （単位：百万円） Realized Realized Realized Realized Forecast （単位：百万円） Realized Realized Realized Realized Forecast Depreciation Capital expenditure 2,442 1,953 3
Slide 32: Overview of Group Companies' Business Performance
Overview of Group Companies' Business Performance （Unit：million JPY） Earth Corporation BATHCLIN Corporation Hakugen Earth Co., Ltd. Earth Pet Co., Ltd. FY21.1Q FY22.1Q FY22.1Q FY21.1Q FY22.1Q FY22.1Q FY21.1Q FY22.1Q FY22.1Q FY21.1Q FY22.1Q FY22.1Q （単位：百万円） Realized* Forecast Realized Realized* Forec
Slide 33: Forward-looking statements disclaimer
This presentation contains forward-looking statements and financial results forecasts. These forward-looking statements and financial results forecasts were formulated on the basis of company assumptions based on the information available. These statements and forecasts are subject to risks and unce