Financial Report for Fiscal
Year Ended March 31, 2019
May 15, 20191

Contents

1. FY ended 03/2019 Results
2. FY ending 03/2020 Plan

3. Medium-term Management Plan
4. Company Overview

2

Contents

1. FY ended 03/2019 Results
2. FY ending 03/2020 Plan

3. Medium-term Management Plan
4. Company Overview

3

Overview of FY ended 03/2019 Results
Orders: Expanded due to large-scale semiconductor projects in Japan, China, and Taiwan.
Sales: Plant and Service Solutions both increased, primarily in the electronics industry.
Operating Income: Improved plant-related earnings and expansion in solutions bothcontributed to the increase.
(Unit: Billion JPY)

103.8
88.0

17.8

17.1

70.8

Operating Income

Sales

Orders

79.2

92.2

6.5

17.6

1.2

17.0
85.9

62.1

3.8
74.6

1.4

5.3

2.4
03/2018

03/2019

03/2018■ Water Treatment Engineering

03/2019

03/2018

03/2019■ Performance Products
4

Results for Year Ending March 2019
March 2018
ActualMarch 2019
Forecast

March 2019
ActualYear-on-Year

Actual-toForecast

Orders

88.0

98.0

103.8

＋15.7

＋5.8

Sales

79.2

91.0

92.2

＋13.0

＋1.2

19.1
(24.2%)

21.2(23.3%)

22.9(24.8%)＋3.7(+ 0.6 pt)＋1.7(＋1.5 pt)

SG&A1

15.3

15.7

16.3

＋1.0

＋0.6

Operating income
ratio

3.8
(4.8%)

5.5(6.0%)

6.5(7.1%)＋2.7(＋2.3 pt)

＋1.0(＋1.1 pt)

Ordinary income

3.9

5.4

6.5

＋2.6

＋1.1

Profit attributable toowners of theparent company

2.7

3.7

4.4

＋1.6

＋0.7

Unit: Billion JPY

Gross profit margin
(%)

(%)

1: SG&A = Selling, General, and Administrative expenses
5Orders by Region
Domestic: There was significant growth, primarily in the Plant and Service Solutions
businesses for the electronics industry, including semiconductors.
Overseas: Recovery in Taiwan, which placed orders for large-scale semiconductorrelated projects, contributed significantly to the increase; also received orders from Southeast
Asia related to electronics and electric power.
Orders Overseas
by region

Orders(Domestic/Overseas)

29.8

103.8
88.0

29.8

19.6
28.7%
22.3%

74.0

(Unit: Billion JPY)

7.4
19.6
6.9

4.6

7.8
15.4

68.4
7.2
03/2018
Overseas

03/2019
Domestic

Overseas Ratio

03/2018
SE Asia/Other

03/2019
China

Taiwan6

Sales by Region
Domestic: Plant and Service Solutions businesses performed well in both the electronics
industry and general industry.
Overseas: Progress in the sales of large-scale projects in Taiwan and China contributed
significantly to the increase; sales to the electronics and electric power industries in Southeast
Asia expanded.
(Unit: Billion JPY)

Sales
(Domestic/Overseas)

Sales Overseas
by region

24.1

92.2
79.2

24.1

16.9
21.5%

62.2

6.1

16.9

26.1%

5.0

68.1

5.1

7.6

10.2

6.7
03/2018
Overseas

03/2019
Domestic

Overseas Ratio

03/2018
SE Asia/Other

03/2019
China

Taiwan7

Sales by Segment/Customer:
Water Treatment Engineering
Plant: Sales of large-scale semiconductor-related projects to Japan, China and Taiwan expanded.
Service Solutions: In addition to the electronics industry, sales to domestic general industry
were strong.
Electric Power/Water Supply and Sewage: Despite an increase overseas, domestic sales
were sluggish.
(Unit: Billion JPY)

Sales by Customer

Sales by Segment

74.6
62.1

62.1
38.1
28.4

11.3

74.6
10.1
25.5

24.2
52.3%

54.4%

48.8%

33.8

36.4

43.0%

26.7
03/2018

03/2018
Plant

Service Solutions

03/2019
Service Solutions Ratio

39.0
03/2019

Electric Power/Water Supply and Sewage
General Industry
Electronics Industry
Electronics Industry Ratio

8Electronics Industry Orders/Sales:
Water Treatment Engineering
Orders: Recovery of semiconductor-related investment in Taiwan contributed significantly to
expansion overseas.
Sales: In addition to an increase in Plant sales, Service Solution sales also expanded
domestically and overseas.
(Unit: Billion JPY)

Orders

Sales

48.8
34.3

23.7

14.6

19.7
03/2018
Overseas

39.0

26.7

18.6

11.7
25.0

03/2019
Domestic

15.0
03/2018
Overseas

20.4

03/2019
Domestic
9

Sales by Segment (Performance Products)
Standard Equipment/Filters: In addition to the introduction of new products domestically,
the launch of sales in China contributed to the increase.
Water Treatment Chemicals: Growth is attributable to increased sales to the electronics
industry and expansion of sales overseas.
Food Products: Performance was strong despite a slight decline in sales.
(Unit: Billion JPY)

Sales by Segment

17.0

17.6

5.4

5.3

5.8

6.1

5.8

6.1

03/2018

03/2019

Food ProductsStandard Equipment/Filters

Water Treatment Chemicals
10Prospective Analysis of FY ended 03/2019 Operating Income■ In addition to the impact of sales from large-scale projects, improvement in project
profitability and expansion in Service Solutions enabled an improved profit marginand significantly increased profits.
■ SG&A increased due to new product development costs and the strengthening of thesales and manufacturing structures.
Operating Income (Year-on-Year)(Unit: Billion JPY)

Sales
increase+2.7
3.8
Performance
Products

1.4

Water Treatment
Engineering

2.4

03/2018

+0.1

-1.0

6.5

Sales
increase

SG&A increase

1.2

+0.9
Profit marginchange5.3
Year-on-year+2.7
Water Treatment
Engineering

Performance
Products

SG&A

03/201911

FY ended 03/2019 Results: ROE Analysis (I)■ Achieved ROE of 8.4% through the expansion of sales and an improvement in profitability.
■ Sales cash flow improved significantly through the continued collection of receivables(+¥5.6 billion) The reduction in interest-bearing debt also continued.

ROE＝

Improved
profitability

Improved
efficiency

Current profit margin

Asset turnover rate

×

Leverage×

Financial leverage

03/2018

03/2019

03/2018

03/2019

03/2018

03/2019

03/2018

03/2019

5.5％

8.4％

3.5％

4.8％

0.82

0.93

1.90

1.85

Profitability improved,
centered around Water
Treatment Engineering.

Despite an increase
in total assets, thiswas surpassed by
growth in sales, andthe turnover rate
improved.

Interest-bearing debt
was reduced by
11.8%.

12

FY ended 03/2019 Results: ROE Analysis (2)■ ROE trends matched those of the operating profit margin.
■ Water Treatment Engineering business operating profit margin increase due
to increased Plant business sales and Service Solutions business expansion
contributed to improvement in ROE in the year ended March 2019.
(%)
10.0
8.0
6.0

Affected by expansion of
investments

Performance Products(Operating profit margin)

Overall(Operating profit
margin)4.0

ROE

Water Treatment
Engineering(Operating profit
margin)2.0

Increase in Plant sales
Expansion in Service
Solutions0.0-2.0
03/201003/201103/201203/201303/201403/2015

03/2016

03/2017

03/2018

03/2019

13

FY ended 03/2019 Results: Cash Flow Situation■ In addition to performance, construction progress on large-scale projects and thecollection for construction costs significantly affected cash flow fluctuation.
■ Collection of construction costs proceeded during FY ended 03/2019, improving cash flow,
and the reduction in interest-bearing debt also proceeded.
(Unit: Billion JPY)

5.0

4.8

7.4

4.7

3.3
4.0

6.6

5.6

0.6

1.9
-2.5 -1.0

-0.9

-1.3

03/2016

03/2017-4.7

03/2015
Operating CF

Investment CF

Financing CF-0.9-1.3 -2.1-0.1

03/2018

03/2019-2.7

EBITDA(Operating income + depreciation costs)
14

Key Indicators
FY ended 03/2018

FY ended 03/2019

644

635

1,776

1,823

972

920

(million yen)

15,484

13,659No. of employees

2,179

2,186

Annual dividend

53

73

5.5

8.4

Capital expenditures(million yen)

R&D expenses(million yen)

Depreciation(million yen)Interest-bearing debt

(yen)

ROE
(％)

15

Contents

1. FY ended 03/2019 Results
2. FY ending 03/2020 Plan

3. Medium-term Management Plan
4. Company Overview

16Overview of FY ending 03/2020 Plan
Orders: Given a strong sense of uncertainty, a decrease is expected in the electronics industry.
Sales: Due to progress in the construction of projects for which orders were received in theprevious fiscal year, an increase is expected.
Operating Income: With an increase in R&D and other costs, this is expected to remainunchanged from the previous fiscal year despite an increase in sales.
(Unit: Billion JPY)

103.8
17.8

85.9

03/2019

Operating
IncomeSales

Orders

92.2

96.0

18.0

17.6

18.0

77.0

74.6

78.0

03/2020

03/2019
03/2020
Performance Products
Water Treatment Engineering

95.0

6.5

6.6

1.2

1.3

5.3

5.3

03/2019

03/202017

FY ending 03/2020 Plan
(Unit: Billion JPY)FY ended 03/2019
ActualFY ending 03/2020
Plan

Year-on-Year

Orders

103.8

95.0

-8.8

Sales

92.2

96.0

+3.7

22.9
(24.8%)

23.4(24.4%)+0.4(-0.4 pt.)

SG&A

16.3

16.8

+0.4

Operating income ratio (%)

6.5(7.1%)

6.6(6.9%)+0.0(-0.2 pt.)

Ordinary income

6.5

6.5

-0.0

Profit attributable toowners of the parent
company

4.4

4.4

-0.0

Gross profit margin(%)

18

FY ending 03/2020 Plan: Order/Sales Trends■ Achieved new records in orders and sales during the year ended March 2019.
■ Backlog of orders to be recorded as sales in subsequent periods are extremely high.
■ Despite a decline in orders during the year ending March 2020, construction progress on carryover orders is expected to result in increased sales.
(Unit: Billion JPY)

Order/Sales Trends

1st Half/2nd Half Order Trends

103.8
92.2

95.0 96.0

48.4

53.8
50.0

88.0
81.1

45.0
79.2

74.0

50.0

59.3

58.3

03/2019

03/2020

38.3
35.7

39.5

48.3
39.2

03/2017

03/2018
OrdersSales

Backlog

03/2017

03/2018
1st Half

03/2019

03/2020

2nd Half
19

FY ending 2020 Plan: Orders by Region
Domestic: A high level of orders will be maintained despite the forecast for a decrease due toslowdowns in investment and manufacturing.
Overseas: A lull in orders is expected in Taiwan, which experienced significant expansion in theprevious fiscal year.
(Unit: Billion JPY)

Orders Overseas
by Region

Orders(Domestic/Overseas)
1,200

103.8
88.0

1,000

800

74.0

95.0
40%

29.8

19.6

400

200

16.1
21.8%

57.9

16.1

28.7%

24.2%

22.3%

74.0

68.4

20%

5.5

4.6

23.0

6.9

6.0

6.0
7.8

4.2

72.0

15.4

10%

0

7.4
19.6

23.0
30%

600

29.8

50%

6.4

7.2

03/2017

03/201811.0

0%03/2017
Domestic

03/2018

03/2019

Overseas

03/2020
Overseas Ratio

TaiwanChina

03/2019

03/2020

SE Asia/Other20

FY ending 2020 Plan: Sales by Region
Domestic: Progress is expected in semiconductor-related carry-over order projects.
Overseas: Expansion is expected due to sales from carry-over order projects in China andTaiwan.
(Unit: Billion JPY)

Sales Overseas
by Region

Sales(Domestic/Overseas)

1,200

1,000

81.1

79.2

800

19.2

50%

92.2

96.0

24.1

25.0

24.1
40%

16.9

19.2

23.7%

200

61.8

16.9

30%

6.2

600

400

26.1%

26.0%

68.1

71.0

21.5%

25.0

62.2

20%

5.0

6.5

7.6

2.0
5.1

10%

10.9
6.7

0

6.0

6.1

10.2

12.5

0%

03/2017
Domestic

03/2018

03/2019

Overseas

03/2020
Overseas Ratio

03/2017
Taiwan03/2018
China

03/2019

03/2020

SE Asia/Other21

FY ending 2020 Plan: Sales by Segment/Customer :(Water Treatment Engineering)
Plant: Expect sales progress for carry-over order projects, primarily for the electronics industry.
Service Solutions: A high level will be maintained despite a slight decline.
(Unit: Billion JPY)

Sales by Segment

Sales by Customer

900

100%

74.6

800

700

600

64.7
30.9

78.0

90%

62.1
38.1

28.4

42.0

62.1

10.1

12.0

11.3
24.2

25.5

24.0

52.3%

55.1%

39.0

43.0

03/2019

03/2020

70%

60%

27.2

500

400

64.7

78.0
11.0

74.6
80%

52.3%

50%

54.4%
48.8%

46.2%

40%

39.5%

43.0%

300

30%

36.4

200

33.8

33.8

36.0

100
10%

0

0%

03/2017

03/2018

Service Solutions

03/2019
Plant

25.6

26.7

03/2017

03/201820%

03/2020

Service Solutions Ratio

Electric Power/Water Supply and Sewage
General Industry
Electronics Industry
Electronics Industry Ratio
22

Electronics Industry Market Trends■ Deceleration is forecast in the semiconductor and semiconductor manufacturing equipment
markets during the year ending March 2020.
■ Recovery is expected in the second half of FY ending March 2020 due to a recovery in thememory market and investment in 5G.
Semiconductor market(growth rate against
preceding year)

37.3%
Semiconductor manufacturing
equipment market(growth rate against 12.9%
preceding year)

15.9%
21.6%

2.6%
9.7%

1.1%

-16.0%

Organo electronics
industry orders(Billions of JPY)

488

400

343
218
03/301703/3018

03/301903/302003/3021

Source: Created by Organo based on World Semiconductor Trade Statistic (WSTS),
Semiconductor Equipment Association of Japan (SEAJ) materials
23

FY ending 2020 Plan: Electronics Industry Orders/Sales(Water Treatment Engineering)
Orders: Deceleration is expected in investments in the electronics industry domesticallyand overseas.
Sales: Sales progress is expected for carry-over order projects, primarily domestically.
(Unit: Billion JPY)

Orders

600

Sales

500

48.8

43.0

450

39.0

500

400

40.0
350
400

34.3

23.7
19.0

300

21.8

300

14.6

25.6

26.7

19.5
18.6

250

200

200

13.3

11.7

150

11.9
19.7

100

25.0

21.0

9.9

100

50

0

12.2

15.0

20.4

23.5

0

03/2017

03/2018
Domestic

03/2019
Overseas

03/2020

03/2017

03/2018
Domestic

03/2019

03/2020

Overseas24

FY ending 03/2020 Plan: Sales by Segment(Performance Products)
Standard Equipment/Filters: Continue introducing new products domestically andpromote business development in China.
Water Treatment Chemicals: Expand sales measures overseas, primarily to theelectronics industry.
Food Products: Expansion is expected in sales volume, centered on granulation
technology.
(Unit: Billion JPY)

Sales by Segment

16.4

17.0

17.6

18.0

5.4

5.4

5.3

5.5

5.5

5.8

6.1

6.3

5.5

5.8

6.1

6.3

03/2017

03/2018

03/2019

03/2020

Food ProductsStandard Equipment/Filters

Water Treatment Chemicals
25

Plan for Year Ending March 2020: Key Indicators
FY ended 03/2019
ActualFY ending 03/2020
Plan

635

800

1,823

2,100

920

1,100

(million yen)

13,65915,000No. of employees

2,186

2,200

Annual dividends

73

78

8.4

7.8

Capital expenditures(million yen)

R&D expenses(million yen)

Depreciation(million yen)Interest-bearing debt

(yen)

ROE
(%)

26

Contents

1. FY ended 03/2019 Results
2. FY ending 03/2020 Plan

3. Medium-term Management Plan
4. Company Overview

27

Corporate Philosophy and Management Vision and Plan

Management
Philosophy

Management Vision

Management Plan

■ Corporate ethos■ Societal mission, reason
for existence■ Medium-term (3 years)■ Long-term (10 years)■ Three-year
management plan(subject to annual review)

Development andharmony of industry,
environment, and life

Expand areas ofoperation

Medium-term:¥100 billion in net sales,¥7 billion in operating
incomeCreation of economic
and social value

Electronics industry,
separation and purification,
and Performance Products

Long-term:¥120 billion in sales,¥9.6 billion in operating
income28

Group Goals
Challenges & Tasks

Strengths

Goals

Society

Extensive track record inindustry and daily life

Areas of Contribution
Development and harmony ofindustry, environment, and life

Sustainable development
and growth globally■ Efficient reuse of water and energy■ Advancement of life sciences■ Development of advanced IT
technologies

OrganoProviding optimal water forindustry and life
Total water treatment
engineering
Operation &Maintenance

Design and delivery■ Long-term growth stagnation■ Unfavorable profitability■ Stock price stagnation

Proposals for
improvement andenhanced efficiency

Advanced technology cultivatedthrough water treatment■ Optimization of portfolio■ Expansion of business domains anddevelopment areas■ Enhancement of shareholder value

Separation
technologies

Purification
technologies

Contributing to development andadvancement of industry andtechnology

What Organo Wants to Be
Partner company to all
stakeholders

Creator of economic and social
value
Creator of corporate andshareholder value
29

Group Strengths
Extensive track record inindustry/daily life

Total water treatment
engineering

Facility designand delivery

Operation and Maintenance
Proposals forrenovation andenhanced efficiency

Organo technologies and products are
successful in a wide variety of fields
related to industry and daily life. They
encompass manufacturing industries
such as electronics, social infrastructure
including electric power and water supply
and sewage, medical and research
institutes, and restaurants andconvenience stores.

Organo offers total water treatment
engineering – design and delivery ofvarious types of facilities to customer
specs, operation and maintenancesupport services, functional materials,
and proposals for renovation andincreased facility efficiency.

Advanced technology cultivatedthrough water treatment

Separation
technologies|Polymer membrane|Inorganic separation
membrane
Purification
technologies|Ion exchange resin|Chelating resin|Zeolite

Producing result not only in pure waterproduction and wastewater treatment,
but in the purification of sugar solutions
and all types of solvents, and in therecovery of valuable materials (fluorine,
metals, others) from wastewater.

30

What Organo Wants to Be
IssuesMedium-term Strategy

Rigidity of businessstructure
Overemphasis on
sales

What Organo Wants to Be

Partner company to all stakeholders
Optimization ofbusiness portfolio
Creator of social and economic value

Delay in overseas
development

Long-term growthstagnation

Unfavorable
profitability
Stock pricestagnation

Expansion ofbusiness domains
and areas ofdevelopment■ Provider of optimal water for industry andlife■ Contributor to development andadvancement of industry and technology

Creator of corporate andshareholder value
Enhancement ofshareholder value■ Creator of corporate value
Stably record ROE of 8.0% or more
■ Creator of shareholder value
Restore PBR and expand shareholder
returns

31

Areas of Contribution
Challenges & Tasks

Development andharmony of industry,life, and theenvironment
Advancement andgrowth in emerging
and developing
nations
Advancement andspread of medical
and healthtechnologies
Development ofadvanced informationsociety

Our Mission

Areas ofContribution/Technologies

Provide vital, optimal water
for industry and life

Supply industrial
process water to allindustries■ Ensure good quality water for industry
and life■ Improve and maintain water environment■ Efficiently reuse and recycle water

Advanced wastewaterand sewage treatment

Contribute to development andadvancement of industry and technology■ Efficiently reuse and regenerateresources and energy■ Advance life sciences technology■ Develop advanced IT technology

Wastewater recovery
and reuse

Purification of various
solvents for secondary
batteries
Recovery of valuable
resources from liquid
waste
Advanced purificationforbiopharmaceuticals
Advanced treatment
for electronics
industry32

Medium- and Long-term Plans: Selection of Priority Fields
Society/Environment

Key Points

OrganoAdvancement and growthin emerging anddeveloping nations

Effective reuse of waterand energy

Extensive track record inwide range of fields

Advancement and spreadof medical and healthtechnologies

Development of life
sciences market andtechnology

Total water treatment
engineering

Development of advanced
information society

Development ofsemiconductor andelectronics technology

Advanced separation andpurification technologies

Priority Fields

Expansion inelectronics industry

Strengthening of
Performance Products
business

Creation of new
businesses

33Direction of Medium- and Long-term Plans
Priority Fields

Expansion inelectronics industry

Strengthening of
Performance Products
business

Creation of new
businesses

Medium-termLong-term(~FY ending 03/2022)(~FY ending 03/2029)

Securing of share in
Chinese market

Establishmentof Indian market

Entry into US
marketStrengthening of solution
lineup and structure

Business development insemiconductor wet process
field

Development in Chinese andTaiwanese markets

Development in Indian and
SE Asian markets

Expansion of standard
equipment for medical andresearch institutes

Development in life sciences
marketNMP and electrolyte
purification for LiB

Advanced purification andrecycling of secondary battery
materials

Advanced purification forelectronic materials

Development ofchromatography equipment forbiopharmaceutical purification
process34

Medium- and Long-term Management Plans: Targets
Medium-term (~FY ending 03/2022)

Long-term (~FY ending 03/2029)

Achieve ¥100 billion in net sales,¥7 billion in operating income, and operating
income ratio of 7%, and establish anearnings structure that enables consistent
ROE at 8% or more.

Achieve ¥120 billion in net sales,¥9.6 billion in operating income,and an operating income ratio of 8%.

March 2019
ActualMarch 2020
Plan

March 2022
Medium-term

March 2029
Long-term

Orders

103.8

95.0

100 or more

120.0

Sales

92.2

96.0

100 or more

120.0

Operatingincome ratio(%)

6.5(7.1%)

6.6(6.9%)

7.0 or more
(7.0% or more)

9.6(8.0%)ROE (%)

8.4%

7.8%

8.0% or more

8.0% or more

Unit:
Billions of JPY

35

Overview of Medium-term Management Plan
Water Treatment Engineering: Promotion of expansion measures for Service Solutions,particularly for the electronics industry.
Performance Products: Sales overseas of Standard Equipment/Filters and Water Treatment
Chemicals.
New Businesses: Development of separation and purification technologies for secondary
batteries, biopharmaceuticals, and electronic materials.
Water Treatment
Engineering

+4.8
92.2
6.5
(7.1%)

8.4%
03/2019

Performance
Products

New
Businesses

+2.0

+ 1.0

(Unit: Billion JPY)

100.0
or better

Sales
+ 7.8
Operating income
+ 5.0
ROE
Stably record
8.0% or better

7.0 or better(7.0% or better)8.0%
or better
03/202236

Overview of Medium-term Management Plan
: Water Treatment Engineering(Unit: Billion JPY)

Sales
74.6

38.1

36.4

03/2019Plant+ ¥1.8billionService
Solutions+ ¥3 billion

79.4

Plant
■ Attempt to expand overseas market share, particularly inthe electronics industry in China and elsewhere■ Undertake strengthening of business foundation bystrengthening overseas technology structure and enhancing
engineering productivity

40.0
Service Solutions

39.4■ Promote strengthening of structure overseas, with afocus on upgrading structure in China where demand formaintenance is gaining momentum■ Upgrade solution service lineup using IoT and othertechnologies■ Strengthen proposals for facility renovation and efficiency
enhancement to realize reductions in energy use, labor, andwaste

03/202237

Overview of Medium-term Management Plan: Performance
Products
Water Treatment Chemicals(Unit: Billion JPY)

Sales
19.6
17.6
5.3

6.1

6.1
03/2019

Food
Products+0.3Standard
Equipment/
Filters+0.9
Water
Treatment
Chemicals
+0.9

5.6

7.0

■ Construct sales network for water treatment chemicals
for Taiwan’s electronics industry■ Strengthen sales activity for large-scale electronics
industry plants in Korea, SE Asia, elsewhere■ Promote development of new chemicals bystrengthening collaboration with external entities

Standard Equipment/Filters■ Launch sales of small pure water equipment toChinese medical and inspection institutes■ Develop sales network in China■ Undertake structural consolidation of production
overseas

Food Products

7.0

03/2022■ Strengthen processing technologies such as
granulation for nursing care, health food, other fields■ Consider development in aging Chinese market

38Overview of Medium-term Management Plan:
New Businesses
Purification Facilities for Lithium-ion Batteries■ NMP recycling facilities
Schedule verification test at actual plant in China,
continue to develop sales activity primarily in
Chinese market■ Electrolyte purification technology
Pass laboratory testing at manufacturers, shift toproduction line evaluation; develop businessprimarily in Chinese, Korean markets

Advanced Purification Equipment for
Biopharmaceuticals

Advanced Purification Treatment forElectronic Materials■ Continuous chromatography equipment forbiopharmaceuticals
Confirm enhanced production efficiency throughcontinuous chromatography equipment being
developed for biopharmaceutical (antibody)
purification process. Accelerate total systemdevelopment through collaboration with research
institutes overseas toward industrialization for mass
production.

■ Separation and purification for semiconductor
manufacturing solvents and gases
Develop advanced purification technology(dehydration and metal removal) for resist, IPA, andother semiconductor manufacturing solvents. Target
US, Taiwan, and other leading semiconductor
markets.
In line with expanded demand for purification inelectronic materials, capacity increase in progress at
Organo resin manufacturing facilities

39

FEATURE: Cutting-edge Semiconductor Technology
Technology Contributing to Semiconductor Miniaturization■ Organo has developed a hydrogen peroxide
monitor featuring a proprietary catalyst for
cutting-edge semiconductor factories.
Real-time measurement of hydrogen peroxide,
which can cause wiring faults on semiconductor
chips, is possible.
■ Organo has developed and rolled out aparticle measurement service, which greatly
enhances the measurement level. Shapemeasurement and composition analysis ofparticles can be performed at the 10nm level.
Organo is working urgently to develop andcommercialize 7nm-level particle measurement
technology.
Hydrogen peroxide monitor

40

Overview of Medium-term Management Plan: Strengtheningof Business Foundation

Strengthening of Overseas
Business Foundation■ Establish global engineering center to serve as technological foundationfor overseas business■ Strengthen cooperation among representative offices in Southeast Asia;
strengthen management and technological structure in India

Evolution of Technology■ Further evolve core technologies in existing businesses■ Search for innovative technologies toward creating new businesses

Enhancement of
Productivity■ Enhance productivity and reform work style■ Review information systems and work processes utilizing engineeringsystems, RPA, others

Overview of Medium-term Management Plan: Strengthen
R&D Investment■ Strengthen investment in R&D, the driving force behind growth.
■ Continue expanding investment with the goal of a ratio of R&D expenses to sales of 2.5%.
■ Strengthen separation, purification, and analysis technologies in line with advanced refinement andultra-high purity(Unit: Billion JPY)

R&D Expense Allocation
2.5
2.1
1.8
1.4

1.8

1.5
2.2%

1.8%

1.8%

03/2016

03/2017
R&D Expenses

03/2018

2.0%

03/2019

2.2%

03/2020

2.5%

03/2022

Ratio of R&D Expenses to Sales

42

Corporate Governance Reform
Initiatives■ Issues in evaluating effectivenessof board of directors
・Effectiveness of board of directors
Management strategy/policy direction

03/2018

03/2019
Overall
3.9

Dialogue withinvestors/shareholders

3.7

3.5

Selection of members/succession plan

Effectiveness ofboard of directors

4.0

3.7

3.4

・Composition of board of directors
Number/proportion of external directors

・Dialogue with investors/shareholders
IR activities

3.8
Supportstructure forexternal
members

3.8

4.0
4.2

4.0

Composition ofboard of directors

4.1
Management conditionof board of directors

43Corporate Governance Reform Initiatives
IssuesFY ended
03/2017

Management
strategy/policy
direction

FY ended
03/2018

FY ended
03/2019

Review philosophy structure,formulate new management
philosophy and vision

Formulate long-term
management plan

Selection ofmembers/
succession plan

Stipulate caliber andcapability of president,
directors, andexecutive officers

Establish examination
criteria for dismissal

Directorcompensation
systemEstablish compensationcommittee;
review performance-based
ratio

Introduce stockcompensation system

Appoint and reorganize
compensation committee(scheduled)Expand external
directors to 3
(scheduled)

Number/composition of
external directors

IR activities

FY ending
03/2020

Hold shareholder
briefing session

Increase IR
personnel

Translate materials
into English

Translateconvocation noticeand financial report
into English

44

Toward Further Evolution (from June 27, 2019)
Establishment of Selection/Compensation Committee
Restructuring of the Compensation Committee into the Selection/ Compensation
Committee to improve the objectivity and transparency of the selection andcompensation decision-making processes for directors and upgrade the corporate
governance structure.
Strengthening of Board of Directors Oversight Function
Attempt to strengthen the board of directors oversight function byappointing a non-executive director to the position of board chairman.
Composition of Board of Directors■ Strengthen the structure from a

corporate governance perspective by
increasing the number of external
directors to three from two, bringing
the number of board members to 10.

■ Achieve a board of directors composedof six members with experience in scientificdisciplines (biology, bioactive compounds,
biotechnology, functional materials, organic
synthesis) and four advanced specialists
with overseas business experience.

45

Expand Shareholder Returns■ Increased dividends for three consecutive terms (five consecutive terms, excludingcommemorative dividends)■ Distribute profits in accordance with earnings situation with the aim of achieving stable,
continuous dividends(Unit: JPY)

73
5
50

40

53

45
42.4%

20.8%
03/201578

03/2016

18.8%
21.9%

21.9%

03/2017

03/2018

03/2019

20.3%

03/2020

Commemorative Dividend
Dividend
Dividend Payout Ratio (consolidated)
46

Contents

1. FY ended 03/2019 Results
2. FY ending 03/2020 Plan

3. Medium-term Management Plan
4. Company Overview

47

Company Overview
Corporate name

Organo Corporation

Head office

1-2-8 Shinsuna, Koto-ku, Tokyo 136-8631

EstablishedMay 1, 1946

Representative

Yasuyuki Koie, President

Capitalization¥8,225,499,312

No. of employees

2,186 (consolidated) as of March 31, 2019
Water treatment
engineering

Servicesolutions

Main areas ofbusiness

Performance products

Main offices

Plant

Manufacturing and sales of large-scale water treatment facilities

Facility maintenance, operational support services,
renovation and reconditioning, etc.
Manufacturing and sales of standard water treatment
equipment,water treatment chemicals, food processing agents

Head Office (Koto-ku, Tokyo), R&D Center (Sagamihara), Tsukuba Factory (Tsukuba),
Iwaki Factory (Iwaki), Hokkaido Branch Sales Office (Sapporo), Tohoku Branch Sales Office(Sendai), Kanto Branch Sales Office (Koto-ku, Tokyo), Chubu Branch Sales Office (Nagoya),
Kansai Branch Sales Office (Suita), Chugoku Branch Sales Office (Hiroshima),
Kyushu Branch Sales Office (Fukuoka)

48

Organo Subsidiaries and Affiliates

Organo (Vietnam)
Organo(Thailand)
Organo (Asia)

Murugappa Organo
Water Solutions
Organo (Singapore)

OrganoOrgano Plant Service
Organo Eco Tech
Organo Food Tech
Organo Acty
HOSTEC
Tohoku Denki Tekko *Organo (Suzhou)
Organo Technology

PT Lautan Organo Water* Indicates subsidiaries accounted for using the equity method;underline indicates non-consolidated subsidiaries or affiliated companies

49

Organo Group History
Development

Evolution

Growth● Sales trends
1990’s■ Ultrapure water facilities
for electronics industry

Expansion

2000’s■ Overseas development■ Strengthening of service solutions

1980’s■ Water treatment
facilities for power plants
1970’s■ Water supply andsewage facility■ Refinement facility forsugar solution, other■India (2015)2005■ Comprehensive service

1960’s■ Large-scale purewater equipment for
general industry

solutions begin in earnest■Vietnam (2010)

Founded 1946
■ Athermal water
distillation equipment

1960■Taiwan(2005)■Thailand (1989)■China(2003)■Malaysia (1986)

1970■Indonesia(2011)

1980

1990

2000

2010
50

Organo Group Businesses
Water Treatment Engineering
Service Solutions¥36.4 billion

Plant¥38.1 billion
Year Ended
March 2019¥74.6 billion■ Replacement ofexpendable items and maintenance■ Operational support services andcomprehensive maintenance■ Renovation and reconditioning■ Contract water treatment■ Pure and ultrapure water facilities■ Wastewater treatment and recovery
facilities■ Valuable material recovery facilities■ Production processing-related
facilities

Performance Products
Food
Processing Agents¥5.3 billion

Standard Equipment/Filters¥6.1 billion
Year Ended
March 2019¥17.6 billion■ Food processing
agents■ Food ingredients■ Pure and ultrapure
water equipment■ Water purification filters

Water Treatment
Chemicals¥6.1 billion■ Treatment chemicals for wastewater, coolingwater, cleaning and RO membranes, boilers

Electronics

・Semiconductors
・FPD・Electronic parts

Electric Power/Water
Supply and Sewage

・Power plants
・Water purification
plants・Sewage treatment
plantsGeneral Industry

・Pharmaceuticals,
cosmetics
・Food and beverage・Machinery andchemicals

Equipment/Filters

Water Treatment
Chemicals

・Pharmaceuticals,
research・Various manufacturingindustries
・Food and beverage,
convenience stores

・Various manufacturingindustries
・Buildings andcommercial facilities

Food Processing
Agents・Food processing
・Beverage
manufacturing
・Nursing care andhealth food51

Contact
Organo Corporation Corporate Planning Dept.
TEL: 03-5635-5111
FAX: 03-3699-7240
https://www.organo.co.jp/english
https://www.organo.co.jp/english/contact/input/

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

52