Insecticides and Repellents Segment

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 mid-June, 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, the Company 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 Segment

Sales of oral hygiene products amounted to 8,191 million yen, thanks to higher sales of Mondahmin mouthwash backed by market growth despite intensified competition.
The bath salt market, which has expanded amid the pandemic, maintained its expanded size, and as more people sought to have 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 energy-saving 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 segment

In pet products, sales benefited from an increase in pet ownership as people spent more time at home, as well as an increase in time 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.

In the General Environment and Sanitation Business, the Company is enhancing its in-house hygiene management as relevant laws 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, and expertise. Meanwhile, personnel expenses (recurring expenses) and material and equipment costs rose at an accelerated pace due to 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 industry-academia-government collaborations, to provide sanitary management services that stand apart from competitors’ offerings, and in doing 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 and consulting 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.
For more information about our General Environment and Sanitation Business, please visit the Earth Environmental Service Co., Ltd. website.