DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of
the original Japanese document. In cases where any differences occur between the English version and the original Japaneseversion, the Japanese version shall prevail. This translation is subject to change without notice.

Consolidated Financial Results for the First Nine Months of
the Fiscal Year Ending March 31, 2020
<under Japanese GAAP>
February 6, 2020
ORGANO CORPORATIONTokyo Stock Exchange
6368
https://www.organo.co.jp/english/
Masaki Uchikura, Representative Director and President
Minoru Ando, General Manager of Accounting Dept., Corporate Management andPlanning
TEL:+81-3-5635-5111
Scheduled date to file quarterly securities report:
February 13, 2020
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results presentation meeting:
None

Company name:
Listing:
Securities code:
URL:
Representative:
Inquiries:(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the first nine months of the fiscal year ending March 31, 2020
(from April 1, 2019 to December 31, 2019)(1) Consolidated operating results (cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen% Millions of yen%
Nine months ended
December 31, 2019
67,352
9.5
7,475
160.2
December 31, 2018
61,528
22.7
2,872
352.9
Note:
Comprehensive income: Nine months ended December 31, 2019
Nine months ended December 31, 2018

Basic earnings
per share
Nine months ended
December 31, 2019
December 31, 2018

Profit attributable toowners of parent

Ordinary profit
Millions of yen%

Millions of yen

7,419
155.3
2,906
296.3
¥5,029 million [208.8%]¥1,628 million [156.4%]

5,151
1,723

%

198.9
435.0

Diluted earnings
per shareYen

450.41150.19Yen––(2) Consolidated financial position
Total assets
Millions of yen
As ofDecember 31, 2019
103,389
March 31, 2019
101,257(Reference) Equity: As of December 31, 2019¥58,742 million

Net assets

Equity-to-asset ratio

Millions of yen

58,86154,795
As of March 31, 2019

%

56.8
54.0
¥54,657 million

2. Cash dividends
Annual dividends per shareFirst quarter-end Second quarter-end Third quarter-end
Yen

Fiscal year ended
March 31, 2019
Fiscal year ending
March 31, 2020

Yen

Fiscal year-end

Yen

–

29.00

–

–

47.00

–

Total

Yen

Fiscal year ending
March 31, 2020
(Forecast)
Note:
Revisions to the forecast of cash dividends most recently announced: None

Yen

44.00

73.00

47.00

94.00

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2020
(from April 1, 2019 to March 31, 2020)(Percentages indicate year-on-year changes.)
Net sales
Millionsof yenOperating profit%

Millionsof yenProfit attributable toowners of parent

Ordinary profit%

Millionsof yenFiscal year ending
97,500
5.7
9,500
44.8
9,350
March 31, 2020
Note:
Revisions to the earnings forecasts most recently announced: Yes

%

43.0

Millionsof yen

6,200

Basic
earnings
per share

%

Yen

39.2

542.13

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Application of specific accounting for preparing the quarterly consolidated financial statements: Yes
Note:

For more details, please refer to “Application of special accounting for preparing the quarterly consolidated
financial statements” on page 8 of the attached material.

(3) Changes in accounting policies, changes in accounting estimates, and restatementa. Changes in accounting policies due to revisions to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatement: None
(4) Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 201911,589,925 shares

As of March 31, 201911,589,925 sharesb. Number of treasury shares at the end of the period
As of December 31, 2019

136,054 shares

As of March 31, 2019

166,788 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
For the nine months ended December 31, 201911,436,336 shares

For the nine months ended December 31, 2018

11,473,155 shares

The Company has introduced an Officer Share Delivery Trust, and shares of the Company held by the Trust havebeen included in treasury shares excluded from the calculation of the number of treasury shares at the end of theperiod and the average number of shares during the period (cumulative from the beginning of the fiscal year).

* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including earnings forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable.
Consequently, any statements herein do not constitute assurances regarding actual results by theCompany. Actual business and other results may differ substantially due to various factors. Please refer
to “Explanation regarding consolidated earnings forecasts and other forward-looking statements” onpage 3 of the attached material for the suppositions that form the assumptions for earnings forecasts andcautions concerning the use thereof.

Attached Material

Index
1. Qualitative information regarding financial results for the first nine months .........................................2(1) Explanation regarding operating results ................................................................................................2(2) Explanation regarding financial position ...............................................................................................3(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements ......3
2. Quarterly consolidated financial statements and significant notes thereto ..............................................4(1) Consolidated balance sheet ......................................................................................................................4(2) Consolidated statement of income and consolidated statement of comprehensive income................6
Consolidated statement of income (cumulative) ....................................................................................6
Consolidated statement of comprehensive income (cumulative) ..........................................................7(3) Notes to quarterly consolidated financial statements ............................................................................8
Notes on premise of going concern ..........................................................................................................8
Notes on substantial changes in the amount of shareholders’ equity ...................................................8Application of special accounting for preparing the quarterly consolidated financial statements ...8
Segment information, etc. ........................................................................................................................9-1-

1. Qualitative information regarding financial results for the first nine months(1) Explanation regarding operating results
In the Japanese economy during the nine months ended December 31, 2019, despite maintaining amoderate recovery trend against the backdrop of a firm underlying trend for internal demand,
uncertainty over the future continued as Japan’s 2019 exports declined for the first time in three years,
mainly due to a decline in global trade sparked by trade friction between the US and China and theslowdown in the Chinese economy, while the IMF also made a further downward revision to its
projection for the global economy in 2020.
Looking at production and capital investment trends in Organo Group’s key market, the electronics
field, differences in activity appeared in each field. For example, capital investment in memory
semiconductors stalled due to a decrease in investment in data centers and other factors, while
aggressive capital investment was seen in fields such as logic semiconductors for calculation andsemiconductors for image processing.
Amid these conditions, the Organo Group aims to enhance cost competitiveness, improve productivity
and profitability, and create products and technologies differentiated from competitors. To this end, weare pursuing various efforts around the key issues of “expanding the electronics field,” “strengthening
the performance products business” and “creating new businesses.”
Consequently, the financial results for the nine months ended December 31, 2019 are as follows.
Orders received increased by 4.6% year on year to ¥81,178 million, net sales increased by 9.5% year on
year to ¥67,352 million, operating profit increased by 160.2% year on year to ¥7,475 million, ordinary
profit increased by 155.3% year on year to ¥7,419 million, and profit attributable to owners of parent
increased by 198.9% year on year to ¥5,151 million.
Results by segment are as follows.
Starting from the first quarter ended June 30, 2019, we have changed the classification method, etc. of
our reportable segments, and the comparisons and analysis of the nine months ended December 31,
2019 are made based on the classifications following the changes.
[Water Treatment Engineering Business Unit]
Orders received increased by 5.9% year on year to ¥67,364 million. This mainly reflected firm orders
for general industrial field in Japan, while in the electronics field there was a recovery in large-scale
investment in Taiwan, primarily for foundries, and the Company won an order for a large
semiconductor project in Japan.
Meanwhile, net sales increased by 12.0% year on year to ¥53,425 million due to a rise in net sales of
the Plant Division, mainly due to a large project in Japan in the electronics field, in addition to strong
performance in the Service Solutions Division, including maintenance and renovation of facilities foreach field, particularly the electronics field.
On the profit side, in addition to the effect of increased sales, improvement in the profitability of the
Plant Division due to various profit-improvement and cost-cutting initiatives, sales expansion in theService Solutions Division, which has comparatively high profit margins, and other factors led to
improvement in the profit ratio. Consequently, operating profit increased by 259.6% year on year to¥6,458 million.
[Performance Products Business Unit]
There were signs of a slowdown in sales growth, which had been trending strongly, as corporate
production activities weakened, mainly due to a decline in exports. However, reflecting solid sales ofstandard equipment and filters, as well as various types of water treatment chemicals, orders received-2-

decreased by 1.4% year on year to ¥13,813 million and net sales increased by 0.8% to ¥13,926 million,
the same level year on year.
Meanwhile, on the profit side, development investment in new products and technologies increased, as
did business strengthening costs for the future such as expansion of our production and sales system
aimed at expanding overseas development. Consequently, operating profit decreased by 5.6% year on
year to ¥1,017 million.
(2) Explanation regarding financial position
Assets, liabilities and net assets
AssetsAssets as of December 31, 2019 amounted to ¥103,389 million, an increase of ¥2,131 million from theprevious fiscal year end. This was due mainly to an increase of ¥3,432 million in inventories mainly inwork in process, despite a decline of ¥1,459 million in cash and deposits.
Liabilities
Liabilities as of December 31, 2019 amounted to ¥44,527 million, a decrease of ¥1,934 million fromthe previous fiscal year end. This was due mainly to a decline of ¥3,573 million in notes and accounts
payable - trade, despite an increase of ¥1,944 million in long-term borrowings.
Net Assets
Net assets as of December 31, 2019 amounted to ¥58,861 million, an increase of ¥4,065 million fromthe previous fiscal year end. This was mainly due to an increase of ¥4,103 million in retained earnings
resulting from the recording of profit attributable to owners of parent.
(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements
Regarding our forecasts for orders received and net sales for the fiscal year ending March 31, 2020, we
now expect orders received of ¥107,000 million (up 7.0% from the previous forecast) and net sales of¥97,500 million (up 0.5%), exceeding the forecast announced on October 24, 2019. The revised
forecast reflects capital investment trends in the electronics field in the Water Treatment Engineering
Business Unit, construction progress on projects that have been ordered, and the status of sales in theService Solutions Division, such as maintenance and proposals for renovation of facilities.
As for profit, we are expecting improvement in our profit ratio in the Water Treatment Engineering
Business Unit due to a reduction in finished costs, mainly in the Plant Division, through various profitimprovement and cost-cutting initiatives. We are also expecting to expand sales in the Service
Solutions Division, which has comparatively high profit margins. Consequently, we expect operating
profit of ¥9,500 million (up 11.8%), ordinary profit of ¥9,350 million (up 12.0%), and profit
attributable to owners of parent of ¥6,200 million (up 10.7%).

-3-

2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Investments in leases
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-

As of December 31, 201911,27640,256
13,574
4,717
2,717
1,426
2,206
(139)
76,037

9,817
41,584
12,148
5,318
5,532
1,443
2,563
(139)
78,26817,850(12,339)
5,511
5,576
(4,879)696
12,28845
4,968(4,236)731
19,272
1,209

17,832(12,520)
5,311
5,729
(4,989)740
12,281
107
5,002(4,246)756
19,196
1,081

1,621
2,628
767
(278)
4,739
25,220101,257

1,799
2,670
657
(284)
4,842
25,121
103,389

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Advances received
Provision for bonuses
Provision for product warranties
Provision for loss on construction contracts
Provision for share-based remuneration for
directors (and other officers)
Other provisions
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-5-

As of March 31, 2019

As of December 31, 201918,516
13,458
1,546
1,499
1,165
321
84

14,943
13,871
1,386
2,069
601
247
77

95

77

–
3,242
39,93012
2,932
36,219

200
8
6,209
111
6,531
46,462

2,145
9
6,076
76
8,308
44,5278,225
7,508
39,967(629)
55,071

8,225
7,508
44,070(534)
59,270

273

293

(0)
(193)
(494)
(414)
138
54,795
101,257

(0)
(392)
(428)
(527)
119
58,861
103,389

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of right of using facilities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

Nine months
ended December 31, 2018
(From April 1, 2018 to
December 31, 2018)
61,52846,78814,73911,8662,872-6-(Millions of yen)
Nine months
ended December 31, 2019
(From April 1, 2019 to
December 31, 2019)
67,35247,49019,861
12,386
7,475

12
26

30
26

106

150

70
214

70
278

56
11
93
19
181
2,906

104
94
78
56
334
7,419

3
–
–
3

0
4
0
5

0
6
161
168
2,742
1,032
1,709
(13)
1,723

–
10
–
10
7,414
2,270
5,143
(7)
5,151

Consolidated statement of comprehensive income (cumulative)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

Nine months
ended December 31, 2018
(From April 1, 2018 to
December 31, 2018)
1,709

-7-

(Millions of yen)
Nine months
ended December 31, 2019
(From April 1, 2019 to
December 31, 2019)
5,143

(44)
0
(125)
91

18
0
(198)
65

(2)

1

(80)
1,628

(113)
5,029

1,654

5,037

(25)

(7)

(3) Notes to quarterly consolidated financial statements
Notes on premise of going concern
No items to report
Notes on substantial changes in the amount of shareholders’ equity
No items to report
Application of special accounting for preparing the quarterly consolidated financial statements
Calculation of tax expenses
Tax expenses are calculated by multiplying the profit before income taxes by the reasonably estimatedeffective tax rates after the application of tax effect accounting to the profit before income taxes for the
fiscal year including the third quarter ended December 31, 2019. However, in cases where thecalculation of tax expenses using such estimated effective tax rate yields a result that is not reasonable
to a significant extent, the amount of significant difference other than temporary differences, etc. isadded to or deducted from the profit before income taxes, and the result is multiplied by the statutory
income tax rate.

-8-Segment information, etc.
[Segment information]
I Nine months ended December 31, 2018 (from April 1, 2018 to December 31, 2018)
1. Information relating to net sales and profit by each reportable segment
Reportable Segment(Millions of yen)Amountrecorded in the
consolidated
statement ofincome(Note)

Water
Treatment
Engineering
Business Unit

Performance
Products
Business Unit

Net sales
Sales to external customers
Intersegment sales or transfers

47,717
0

13,811
237

61,528
238

–
(238)

61,528–

Total

47,717

14,04961,766(238)

61,528Total

Adjustment

Segment profit
1,795
1,077
2,872
–
2,872
Note:
The figures for segment profit are based on operating profit, and there are no discrepancies with the operating profit
shown in the consolidated statement of income.

II Nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)
1. Information relating to net sales and profit by each reportable segment
Reportable Segment(Millions of yen)Amountrecorded in the
consolidated
statement ofincome(Note)

Water
Treatment
Engineering
Business Unit

Performance
Products
Business Unit

Net sales
Sales to external customers
Intersegment sales or transfers

53,4250

13,926249

67,352
250

–
(250)

67,352–

Total

53,426

14,176

67,602(250)

67,352

Total

Adjustment

Segment profit
6,458
1,017
7,475
–
7,475
Note:
The figures for segment profit are based on operating profit, and there are no discrepancies with the operating profit
shown in the consolidated statement of income.

2. Matters relating to changes, etc. in reportable segments
The Organo Group has positioned the Performance Products Business Unit as one of its key
business fields in its Medium-term Management Plan and is carrying out initiatives to develop new
products and establish a production and sales system for the overseas market. Starting from the firstquarter ended June 30, 2019, we revised our financial results management classifications as part ofstrengthening the Performance Products Business Unit. As a result of these revisions, we changed
the classification of the equipment and chemical business of overseas businesses from inclusion in
the “Water Treatment Engineering Business Unit” to inclusion in the “Performance Products
Business Unit.” Furthermore, to more appropriately evaluate the financial results of the
Performance Products Business Unit, our key business field, on a consolidated basis, we havechanged the measurement method of intersegment sales or transfers.
Moreover, segment information for the nine months ended December 31, 2018 has been preparedaccording to the classification method after the changes.

-9-