Organo Corporation
Report on the Financial Results for the Term
Ended March 31, 2015

May 15, 2015

1

Report on the Financial Results of FY2014
and Projection for FY2015

Hiroyuki Uchida,President
2

The Consolidated Organo Group
Organo (Suzhou) Water
Treatment Co., Ltd.
< China >Organo Corporation
Organo Plant Service Corporation
Organo Food Tech Corporation
Organo Acty Corporation
Organo Eco Tech Corporation< Japan >Organo (Thailand) Co., Ltd.
< Thailand >Organo (Asia) Sdn. Bhd.
< Malaysia >Ref ; Non-consolidated Companies
Organo (Singapore) Pte Ltd <Singapore>
Organo (Vietnam) Co., Ltd. <Vietnam>
PT Lautan Organo Water <Indonesia> *1

Organo Technology Co., Ltd.
< Taiwan >*1 : PT Lautan Organo
Water will be Consolidated
in FY2015.

3

Financial Results for FY2014 (Consolidated)(millions of yen)
03/2014
Result03/2015Plan

03/2015
Rev ised Plan

03/2015
ResultY ear on Y ear
ChangeChange f rom
Plan

Orders Receiv ed

65,50175,00076,00077,873+ 12,372＋ 2,873

Net Sales

62,09670,00068,00068,7416,645

ᇞ 1,259

Gross Prof it

14,553

15,40015,40015,544＋ 991+ 144(%)

23.4

22.0

22.6

22.6

ᇞ 0.8 pt

+ 0.6 pt

SG&A

13,72013,90013,10013,145ᇞ 575pt

ᇞ 755Operating Income

833

1,500

2,300

2,398＋ 1,565+ 898(%)

1.3

2.1

3.4

3.5+ 2.2+ 1.4

Ordinary Income

1,170

1,400

2,400

2,465＋ 1,295+ 1,065

Net Income

664

900

1,2001,085＋ 421+ 1854

Financial Results of FY2014(by Business Segment)
Orders Received(millions of yen)

77,87365,501Net Sales(millions of yen)
Year onYear
Change+ 541

Operating Income(millions of yen)

68,74162,096

Year onYearChange∆ 832,398833Year on
Year
Change+ 11,831■ Water Treatment EngineeringYear onYear
Change+ 6,729

Year on
YearChange∆ 189
Year onYear
Change+ 1,754■ Functional Product[Water Treatment Engineering] Orders received increased in plants for the electronics industry in Japan and overseas andthe general industries in Japan. Net sales increased because of the growth of plants/maintenance for the electronics industry,
pharmaceutical industry and wastewater treatment plants in Japan. Operating income increased due to the expansion of sales
and decreased SG&A expenses.
[Functional products] Orders received and net sales remained almost the same as the previous fiscal year. Operating
income declined due to decreased profitability.

5Sales by Business Segment and Customer（ Water Treatment Engineering ）Sales by Business Area

Sales by Customer

48,841(millions of yen)(millions of yen)

42,112

48,841
42,112

Year onYear
Change+ 1,253

Year onYear
Change+ 5,476[Plant Business] Increased due to the growth of plants
for the electronics and the pharmaceutical industries, andwastewater treatment plants in Japan.
[Solution Business] Increased mainly due to the growthof maintenance for the electronics and the pharmaceuticalindustries in Japan and overall industries in the overseas.

Year onYear
Change+ 3,859

Year onYear
Change+ 2,870[Electronics Industry] Increased due to the growth ofplants/maintenance in Japan.
[General Industry] Increased due to the growth ofplants/maintenance for the pharmaceutical industry
and wastewater treatment plants in Japan.

6

Sales by Region
Sales by Overseas Region

Domestic and Overseas Sales（millions of yen）

68,502（millions of yen）

14,09068,741
66,71862,096

Year onYear
Change∆ 1,700

12,39010,792

Year onYear
Change+ 68

8,672

Year onYear
Change+ 8,345

Year onYearChange∆ 1,353

Year onYearChange∆ 415

7

Analysis of Operating Income of FY 2014 (by Factor)(millions of yen)

Increase inSales+ 1,558

Profit Ratio
Decrease
∆ 568

SG&A
Decrease+ 575

2,398833*The increase in sales and profit ratio decrease are calculated using the gross profit margin.
8Plan for the Term Ending March 2016
(millions of yen)
03/2015 (Result)
Full Y ear

03/2016 (Plan)
Full Y ear

Y ear on Y ear
ChangeOrders Receiv ed

77,87375,000ᇞ 2,873

Net Sales

68,74177,000+ 8,259

Gross Prof it15,54416,700+ 1,156(%)

22.6

21.7

ᇞ 0.9pt

SG&A

13,14514,000+ 855

Operating Income

2,398

2,700+ 302(%)

3.5

3.5+ 0.0pt

Ordinary Income

2,465

2,600+ 135

Net Income

1,085

1,680+ 5959

Plan for the Term Ending March 2016
( by Business Segment )Orders Received(millions of yen)

Net Sales(millions of yen)

77,87375,000Year onYear
Change+ 773

77,000Operating Income(millions of yen)

68,741

Year onYear
Change∆ 3,645■ Water Treatment EngineeringYear onYear
Change+ 1,100

Year onYear
Change+ 7,159

2,700
2,398
Year onYear
Change+ 105
Year onYear
Change+ 197■ Functional Product[Water Treatment Engineering] Orders received are forecast to decline in plants for the electronics industry in Japan, forwhich orders received increased substantially in FY 2014. Net sales are forecast to increase due to the growth ofplants/maintenance for the electronics industry in Japan and overseas, and plants for municipal water and sewage treatmentin Japan. Operating income is expected to increase due to increases in sales.
[Functional Product] An increase is forecast due to a recovery in the capacity utilization rate of the customers’ factories,and the development or renewal of products.

10

Sales by Business Area and Customer( Water Treatment Engineering )Sales by Business Area
(millions of yen)

Sales by Customer(millions of yen)
56,00056,00048,841

48,841
Year onYear
Change+ 1,397

Year onYear
Change+ 5,761[Plant Business] Sales are expected to increase, mainly as aresult of the growth of plants for the electronics industry in Japanand overseas and plants for municipal water and sewage
treatment in Japan.
[Solution Business] Sales are expected to increase due mainly
to the growth of maintenance for the electronics industry in Japanand overseas.

Year onYear
Change+ 1,004

Year onYear
Change+ 6,155[Electronics Industry] Sales are expected to increase
due to the growth of plants/maintenance in Japan andoverseas.
[General Industry] Sales are expected to increase
mainly in plants for municipal water and sewage
treatment in Japan.

11

Sales by Region
Domestic and Overseas Sales

Sales by Overseas Region(millions of yen)(millions of yen)
77,00068,741

66,71862,096

Year onYear
Change+ 3,410

15,80014,09012,39010,792

Year onYear
Change+ 4,849

Year onYear
Change+ 839
Year on
YearChange+ 501

Year onYear
Change+ 2,070

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Analysis of Operating Income of FY 2015 (by Factor)
Increase inSales+ 1,867(millions of yen)

Profit Ratio
Decrease∆ 712

SG&AIncrease
∆ 853
2,700

2,398

*The increase in sales and profit ratio decrease are calculated using the gross profit margin.

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Progress of Orders Received and Net Sales
from the Electronics Industry
Orders Received

Net Sales(millions of yen)(millions of yen)

30,33528,30027,40022,14519,08819,745

19,723

19,27514

Progress of Orders Received,Net Sales and Orders on Hand (Consolidated)
Orders received/Net sales(millions of yen)Orders on Hand
(millions of yen)

15

Balance SheetAssets

Liabilities and Net Assets(millions of yen)

Cash on Hand
and Deposits(millions of yen)

83,60983,60976,852

76,852(∆ 1,329)

Current
Liabilities

10,268Long-term
Liabilities

Current Assets
and Others(+ 3,488)(+ 2,213)(+ 8,939)

Net Assets(+ 1,056)

Fixed Assets(∆ 853)16

Major Indicators (Consolidated)(millions of yen)

FY2015 Full Year(Plan)

FY2014 Full Year
Capital Investment

334

1,100

TechnologicalDevelopment Costs

1,392

1,450

Depreciation

999

1,000

Interest-bearing
Borrowings

12,717

13,000

Number of Employees

1,944

2,050

Dividend per Share(yen/year)88

ROE (%)

2.4

3.6
17

Medium-term Management Policy ofOrgano Group18

Business Conditions ofPrevious Medium-Term Management Policy (from FY2013)
Streamlining of domestic production bases or their transfer overseas in various industries
The market environment has changed significantly

Group reorganization （April 1, 2014）<Objective> To focus management resources and improve efficiency as well as to enhancemarket competitiveness Merging 7 regional sales headquarters Strengthening and expanding Organo Eco Techno Corporation through the consolidation ofwastewater treatment technologies

In light of the organizational restructure, we have decided toreset new numerical targets from FY2015.
19

New Medium-term Management
Policy (FY 2015~FY 2017)20

Corporate Concept/Philosophy and Management
Vision for the New Medium-term Management Policy
Corporate Concept“Ecologically Clean”

Corporate Philosophy

Organo Group looks ahead to the future of the earth andcreates the value of the water with "heart" and "technology."“Process ' 17”
Medium-termManagement Vision(Portfolio Reconstruction in Organo-group to
Create “Ecologically Clean”
and Sustainable Success for 2017)

Based on “One Stop Solutions,” which we have promoted from FY2013,
through selection and concentration, we focus on the three businesses –wastewater treatment, water treatment chemicals, and overseas –thereby accelerating the shift of the business portfolio and expanding thesolution business to develop a stable revenue base.
21

Consolidated Sales and Operating Income
under the New Medium-term Management Policy
Net sales（millions of yen）

Operating income(millions of yen）

New Medium-termManagement Policy

22Plan for the Term Ending March 2018
(millions of yen)
03/2015 (Result)
Full Y ear

03/2018 (Plan)
Full Y ear

Changes

Orders Receiv ed

77,87382,000+ 4,127

Net Sales

68,74182,000+ 13,259

Gross Prof it

15,544

19,100+ 3,556(%)

22.6

23.3+ 0.7pt

SG&A

13,14515,000+ 1,855

Operating Income

2,398

4,100+ 1,702(%)

3.5

5.0+ 1.5pt

Ordinary Income

2,465

4,000+ 1,535

Net Income

1,085

2,600+ 1,515

Av erage Annual
Growth Rate

6.1%

19.5%

23Plan for the Term Ending March 2018
( by Business Segment ）Orders received

Net sales(millions of yen)(millions of yen)

90,00090,00080,00070,00077,873
20,227

Operating income(millions of yen)
7,000

82,00082,00080,00024,00070,00068,741+ 3,773

6,000

24,000+ 4,100
5,000

60,00060,00050,00050,0004,000

40,00040,0003,000

19,9004,100+ 1,065+ 9,159+ 355
30,00057,64558,00030,0005 8 ,000
4 8 ,841

20,000

2,398
2,000

20,00010,000

+ 637

'18.3

1 ,700
1 ,06300'15.3

1 ,3351,000

10,00002 ,400'15.3■ Water treatment engineering

'18.3

'15.3

'18.3

■ Functional product24Medium-term Management Policy;
Priority Measure
Marketability

PotentialRevenue< Focused Businesses>

WastewaterTreatment

Water Treatment
Chemicals

Overseas

Accelerating the shift of business portfolio
Securing stable revenue
25Medium-term Management Policy;
Priority Measures <Wastewater Treatment Business>[Wastewater Treatment Business]
 Expanding by enhancing personnel/structure Focusing on food, beverage and pharmaceuticals area
and increasing sales in Japan
 Promoting differentiation through the unique technologies,
including Moving Bed Anaerobic Bio-Reactor andFat Decomposition Treatment Technology Expanding business overseas by establishing a task force

26Medium-term Management Policy;
Priority Measures <Wastewater Treatment Business>Moving Bed Anaerobic Bio-ReactorMore than three times faster than current anaerobic
treatment systems.
The bio-carriers holds microbes stably and thebiomass washout is limited.
Applicable for wide range concentration of organic
wastewater.
The methane gas obtained is available as a powersource for gas generator, etc.

Bio-gasTreated Water
OutletWastewater
Inlet

Image of Reactor

Fat Decomposition Accelerator “Orgamin G”
Special nutrients for improving microorganism’s
fat-decomposing activities.
The generation of scum (stratiform oil film/fat floatingon water) is also inhibited.
Skipping the pre-treatment system of dissolved airfloatation is possible.

Orgamin G

Regulating Tank

Aeration Tank

Settling
Tank
Excess Sludge

Example of the Application of Orgamin G27

Medium-term Management Policy;
Priority Measures <Water Treatment Chemicals Business>[Water Treatment Chemicals business]
 Expanding by enhancing personnel/structure Expanding business for new slime control chemical
containing non-chloride-based oxidants in Japan andoverseas
 Strengthening the sales system for cooling watertreatment chemicals in Japan, and preparing anoverseas supply system and full-scale entry
 Promotion of M&A, business alliances, etc.

28Medium-term Management Policy;
Priority Measures <Water Treatment Chemicals Business>
New slime control chemical containing non-chloride-based oxidant
Contains oxidant uniquely developed by the Company
High safety
Superb disinfect and algicidal effectLow-level metal corrosiveness and degradation effectto RO membranes
 High stability Low environmental impact For Cooling water;
ORBLADE J Series
 For RO membrane;
ORPERSION E Series
29Medium-term Management Policy;
Priority Measures <Overseas Business>[Overseas business]
 Strengthening overseas affiliated companies
through cooperation with the divisions in Japan Fostering local managers and alliances withpartner companies to expand non-Japanese customers
 Shifting to a structures centered on local employees
 Continuously considering the establishment of
new business bases

30Medium-term Management Policy;
Priority Measures <Overseas Business>
Domestic and Overseas Sales82,000(millions of yen)

Sales by Overseas Region(millions of yen)
20,00080,00068,74160,00019,00019,000+ 6,6103,500

12,390+ 1,439

15,00012,390

6,500

△ 499

2,061

23.2%
10,00040,00018.0%
63,00020,0006,999+ 6,6495,000+ 5,670
9,000

56,351
3,330
00
'15.3

'18.3

Domestic

Overseas'15.3

Southeast Asia

'18.3

TaiwanChina

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Medium-term Management Policy;
Priority Measures
Consolidated Net Sales Composition for '18.3 (plan)
100,000
90,000Consolidated Net Sales
68,741

Consolidated Net Sales
82,00041%

Net Sales (millions of yen)

80,00070,00031%

60,000Wastewater + Water Treatment
Chemical + Overseas
Others

50,00040,00030,00020,00010,0000'15.3'18.3

32

New Efforts◆ Succeeded in developing technology that continuously purifies
ceramide from rice bran
“New Simulated Moving-Bed System”
 Organo’s unique chromatographic separation technologythat can separate more than three ingredients
 Used in numerous production facilities for processing sugar

Applications

Development of technology that continuously purifies ceramide(Joint development with the National Agriculture and Food Research Organization (NARO) and Nippon Flour Mills Co., Ltd.）

Conventional natural ceramide Material with low purity of approx. 10%
 Uses are limited due to its color and smell
inherent in impurities Continuous production of highly refinedmaterials with purity of 95% or higher is possible
 New applications are expected for cosmetics,
pharmaceuticals, and R&D

33

New Efforts◆Launched water treatment system for dialysis “HD series”
 Pursued downsizing to meet high market needs⇒Achieved industry-leading levels of downsizing
 Fulfilling optional features⇒Warming, UF membrane modules, etc.
(All-in-one type product. The optional
component can also be placed in one package.) High quality and safety⇒Manufacturing/quality control at our plantwith ISO certification

Entry into the market for a water treatment system for dialysis
34

New Efforts◆ Reinforcement of business of soil and groundwater
investigation and remediation
 Businesses were consolidated into Organo (from October 2014)
Soil and Groundwater Group was set up in the Plant Division, and dedicated staffs weredeployed in all domestic branches.
⇒ Strengthen sales capabilities leveraging the network of the Organo GroupObjectives
Outlook for market expansion
 Work for the improvement of circularroutes in Tokyo
 Tokyo Olympics in 2020
 Maglev train project

Strengthen sales and technical organizations
to deal appropriately with projects that are
expected to increase

Strengthen and promote“One Stop Solutions” to respond tocustomers’ diverse needs in relation
to water treatment

35

New Efforts◆Obtained the Food Safety System Certification, FSSC22000(Organo Food Tech Corporation)
Obtained GMP for food additives(2005)

Obtained FSSC22000 (2015)

Japan Food Additives Association
voluntary standards

Food safety management standards
ISO22000＋Additional requirements including
stringent hygiene control standards/food defense＋ Proving the effectiveness of the company’s food safety management system
 Improving trust from existing customers
 Acquiring new customers
36Organo Corporation
Corporate Planning Department
1-2-8, Shinsuna, Koto-ku, Tokyo 136-8631, Japan
TEL +81-3-5635-5111
FAX +81-3-3699-7240
URL http://www.organo.co.jp

This document includes forecasts of future developments made by management basedon their assumptions, forecasts and plans at the time of writing. Actual performance may
differ materially from the above projections due to a variety of factors.

37