Financial Report of FY 2018

May. 15, 2018
1

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）2

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）3

1-1. Corporate Outlines
Corporate
Name

Organo Corporation

Head Office

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

Establishment

May 1, 1946

Representative

Yasuyuki Koie (President)

CapitalNo. of Employee

Business
LineupMajor
Business
Offices&
Factries

JPY 8,225,499,312
2,179（Consolidated） ※ as of the end of Mar. 2018
Manufacturing and Sales of Large-scale
Water Treatment Plants
Maintenance, Operation, Refurbishmentof Water Treatment Plants
Standard Water Treatment device
Functional Product
Water Treatment Chemicals
Food Processing Materials
Head Office (Tokyo), R&D Center (Kanagawa),
Tsukuba Factory (Ibaraki), Iwaki Factory (Fukushima)
Hokkaido Branch (Hokkaido), Tohoku Branch (Miyagi)
Kanto Branch (Tokyo), Chubu Branch (Aichi), Kansai Branch (Osaka)
Chugoku Branch (Hiroshima), Kyushu Branch (Fukuoka)

Plant Business
Water
Treatment
Engineering Solution Business4

1-2. Organo group
Area

Company Name
Organo Plant Service Corp.
Organo Eco Tech Corp.
Organo Acty Corp.

Organo Food Tech Corp.
Japan
Hostech Corp.（※)
Tohoku Denki Tekko Corp. (※）
China
TaiwanOverSeas

ASEAN

India

Organo (Suzhou) Water Treatment
Co.,Ltd
Organo Technology Co.,Ltd.
Organo Asia Sdn.Bhd. ＜Malaysia＞
Organo (Thailand) Co.,Ltd.
PT Lautan Organo Water＜Indonesia＞
Organo (Singapore) Pte Ltd
Organo (Vietnam) Co.,Ltd.（※）
Murugappa Organo Water Solutions
Private Limited（※）

Major Business

Water Treatment Engineering
Functional Product(Food Processing Materials)
Functional Product（Manufacturing Standard
Equipment）
Design & Construction ofChemical Plant

Water Treatment Engineering※Non-Consolidated51-3. Business Description – Water Treatment Engineering
Plant Business
Water treatment plants appropriate forvarious uses
based on combinations of
the advanced technologies
 Water Production (Pure/Ultra Pure Water) Wastewater Treatment and Recovery
 Recovery Plant for re-use resources Process Plant for purification (Sugar etc.）

Solution Business

Applied Areas

Electronics(Semiconductors, FPD,Electronic devices etc.

Power
Power Plants(Thermal & Nuclear)

City Water(Municipal water &Sewerage)

Providing solutions for optimal operation of Water plant

General Industries
 Maintenance Operation management
 Refurbishment
 Contract water treatment service(Food & beverages, Pharmaceuticals,
Chemicals,
Machinery etc.)61-4. Business Description – Functional product
Water Treatment Chemicals

Standard Equipments & FIlters
Standard Equipments

High-purify waterproduction units
for R&D and Medical use

Water Production

Production Lines

Wastewater Treatment◆Ultra pure water product◆Pure water product

Boilers

Cooling Towers

排水処理設備For
RO Systems

For
Wastewater
Treatment

For
Coolant Water

For
MachineCleaning

For
Boiler Water

Water treatment Chemicals for optimal water quality management infactories and buildings

Filters for
Safe & Tasty water
for drinking and beverages

Filters◆Water purification
filters for kitchens,vending machines,
restaurants andstoresFood Processing Materials
Various Materials
for Food processing◆ Gelatinizing agents and thickeners for jellies, etc.
◆ Food ingredients such as protein, fibers, etc.

7

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）8

2-1. Financial result of FY2018（100 Millions of JPY）

2017.3Result2018.3Plan

2018.3ResultY/Y Diff.

Diff. from
Plan

Orders
Received

740

785

880

+ 140

+ 95

Net Sales

811

810

792

△ 19

△ 17

Gross Profit
（%）

186

176

191

+5

+ 15

(23.0%)(21.8%)(24.2%)(+ 1.2pt)(+ 2.4pt)

SG&A

145

146

153

+8

+7

Operating
Income
（%）

41

30

38

△3

+8

(5.1%)(3.8%)(4.8%)(Δ 0.3pt)(+ 0.9pt)

Ordinary
Income

41

29

39

△2

+ 10

Net Income

27

20

27

+0

+7
9

2-2. Overview of FY2017 result
Orders

Sales

Operating Income

Increasedfrom
FY 2016 and Plans

Decreasedfrom
FY 2016 and Plans

Decreased from FY2016
Increased from Plans

Water Treatment Engineering
Orders received sharply increased in the electronics due to active investment in Japan and China.
Net sales declined from FY2016 due to a decrease in Taiwan, despite strong orders in Japan and
China.

Functional Product
Orders received and net sales increased in the area of standardized equipment, where a new
product was launched, and water treatment chemicals for the overseas market and for theelectronics and general industries in Japan.

Total
SG&A increased from FY2016 due to the enhancement of the sales, technology anddelivery system, overseas patent applications, and increased R&D investment.

102-3. Trend of Order Received and Net Sales■ Achieved a record level of Orders received in FY2017■ Despite of Orders received increasing, Net sales declined from FY2016 because thetiming of many of the orders received was delayed into the second half.
■ The amount of outstanding Orders received is at a high level and which will becomesales in the next term or later
Order Received･Net Sales

778

764

880

811

787

484
792

421

740
357

687

03/15

03/16
Order Received

03/17
Net Sales(100M of JPY)

Order Received

03/18

15.3

408
356

16.3
1Q+2Q

383
357

17.3

395

18.3

3Q+4Q

11

2-4. FY2017 Results by Segment
Order Received
Increased due to active investments in the electronics in Japan and China.

Net sales
Declined due to a slowdown of investment in the electronics in Taiwan.

Operating Profit
Declined due to increased SG&A, while gross profit increased.
Net Sales

Order Received

740

880

811

792

171

164

170

164

576

17.3
Functional Product

708

18.3
Engineering

647

17.3
Functional Product

621

18.3
Engineering(100M of JPY)

Operating Profit

41

38

16

14

5.1%

4.8%

25

24

17.3

18.3

Functional ProductEngineering

Operating Profit ratio

122-5. Order Received By Regions
Domestic
Orders rec. increased sharply in the electronics for semicon and electronic materials.

Overseas
Increased significantly in China due to extensive investment in semicon continues,
and on a recovery trend in Taiwan. Influenced by slumping orders in ASEAN.
(100M of JPY)

Order Received (Domestic/Overseas)

Order Received (Overseas)

880
196

740

196

161
21.8%

22.3%

684

579

17.3
Overseas

18.3
Domestic

Overseas ratio

161

46

55
78
42
64

72

17.3

18.3

Southeast Asia etc.

China

Taiwan13

2-6. Net Sales By regions
Domestic
Sales increased mainly in the electronics for semiconductor andelectronic materials.

Overseas
Increased significantly in China but declined in Taiwan, where investment
slowdown, and momentum remains lacking in Southeast Asia.
Net Sales (Domestic/Overseas)

811

792

192

169

23.7%

21.5%

(100 M of JPY)

Overseas Net Sales

192
169
62

50

20

51

622

618

109
67
17.3
Overseas

18.3
Domestic

Overseas ratio

17.3
Southeast Asia etc.

18.3
China

Taiwan14

2-7. Net Sales(Water Engineering）■ Declined due to a decrease in the general industry in Japan, where sales oflarge orders were posted in FY2016, despite increased sales in the electronics
industry in Japan and China.
■ Sales in the solution business remained the same as those of the previous term,
which contributes to profit in a stable manner.
(100M of JPY)Net Sales(Plant, Solution)

647

Net Sales (By Market)

621

309

284

52.3%

54.4%

338

338

17.3
Plant

18.3
Solution

SL ratio

647

621

120

113

272

242

39.5%

43.0%

256

267

17.3

18.3

Power plants + Water sewarage
GeneralElectronics
EL ratio15

2-8. For Electronics market（Engineering）
Orders Received
Large orders were received in Japan and China, which will produce sales after 2018.
Carry-forward orders increased significantly.

Net Sales
Increased from the previous term. Although sales declined in Taiwan, the decline
was covered by sales in Japan and China.

(100M of JPY)Net Sales

Order Received

343

218

146

256

133

267
117

119
197
122

99
17.3
Overseas

18.3
Domestic

17.3
Overseas150

18.3
Domestic
16

2-9. Functional product (Net Sales）
Standard Equipment
Increased due to a favorable start in sales of a new product.

Water treatment Chemicals
Increased due to continued favorable sales for the electronics in Japan and overseas.

Food Processing Materials
Sales remained at the same level as FY2016, but sales of granulated products for nursing
care food increased.
(Millions of JPY)Net Sales

164

170

54

54

55

58

55

58

17.3

18.3

Food Processing Materials

Standard Equipment

Water Treatment Chemicals

17

2-10. Balance sheet(100M of JPY)

Liabilities and Net assets

Assets

954
113

△27

960
86

954

623

376

△7

87

△13

960
369
Adv.rec. ＋6
AP △6
Others △6+30
AR ＋35
Stocks +6
Lease assets△15593

Loans△12

490
248
17.3
Fixed Assets

+2

74

+26

516

250
18.3

Current assets

17.3
Cash

Net assets

Long-term Liabilities

18.3
Current liabilities18

2-11. Major Indicators
2018.32017.3
Capital Investment（M JPY）

R&D Expenses（M JPY）

Depreciation（M JPY）

Interest-bearing Debt
（M JPY）

No.of Employee
Dividend（JPY/Year)

ROE
（％）

903

644

1,495

1,776

950

972

16,910

15,484

2,100

2,179

55

53

5.7

5.5

19

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）20

3-1. Plan for the fiscal year ending March 31, 2019(100 M of JPY)

03/2018
Results

03/2019
Plan

Y/Y
ChangeOrder Received

880

870

△１０

Net Sales

792

890

+ 9８

Gross Profit
（%）

191

199

+8

(24.2%)(22.4%)(△ 1.8pt)

SG&A

153

157

+4

Operating Income
（%）

38

42

+4

(4.8%)(4.7%)(△ 0.1pt)

Ordinary Income

39

41

+2

Profit attributable toowners of parent

27

28

+1

21

3-2. Overview of the plan for FY 2018
Order Received

Net Sales

Operating Income

Decreased from2017.4Q

Increased from2017.4Q

Increased from2017.4Q

Water

Treatment

Engineering

Expect sales from carry-forward orders and active capital investment in theelectronics industry in China and Taiwan, etc. A solid recovery in the generalindustry is also anticipated.

Functional

Product

Expect increases in orders and sales in the three areas of standardized
equipment, water treatment chemicals and food by enhancing the lineup andoverseas development.

Total
Continue the enhancement of the system for sales, technology and delivery inJapan and overseas, the preparation of an information system, and theenhancement of R&D. Expect an increase in SG&A.
22

3-3. Order received Plan by Segment
Water Treatment Engineering
Expect a decrease in orders in the electronics industry in Japan, but expect a large
investment in Taiwan and China, leading to a large number of orders.

Functional ProductExpect a stable increase in orders for functional products.

Order Received

778

740

155

764
159

623

605

576

03/15

03/16

03/17

Engineering(100M of JPY)

880

870

171

175

708

695

03/18

03/19

164

Functional Product23

3-4. Net Sales Plan by Segment
Water Treatment Engineering
Expect sales from large orders received in Japan and China in the previous term.
Aim to post record sales by achieving the target.

Functional ProductExpect a stable increase in sales of functional products.
(100M of JPY)Net Sales

687
153
533

03/15

890

787
158

811

792

164

170

629

647

621

03/16

03/17

03/18

Engineering

175

715

03/19

Functional Product24

3-5. Operating Profit Plan by Segment■ Expect an increase in operating profit from the previous term due to increased

sales of water treatment engineering.
■ Plan an increase in selling, general and administrative expenses for the investment
in R&D and the enhancement of the R&D system for functional products.
(100 M of JPY)

Operating Profit
39

41

42

38
14

14

23
13

13

16

5.0%

5.1%

4.8%

4.7%

3.5%

25

25

24

28

03/16

03/17

03/18

03/19

10
03/15
Engineering

Functional ProductOperating profit ratio25

3-6. Order received Plans by Regions
Domestic
Expect a decrease in orders in the electronics industry in Japan, which were favorable in the previous
term.
Overseas
Plan a record level of orders of 24 billion yen overseas.
Expect a large investment in China and a recovery of investment in Taiwan.
(100M of JPY)

Order Received(Domestic/Overseas)
1,000

880

900

800

Overseas Order Received
50%

764

740

194

161

196

870

240
40%

240

194

700

600

30%

21.8%

500

400

27.6%

25.5%

20%

300

200

569

60

22.3%

579

684

630

18

161

50

46

80

55
78

42
10%

116
64

72

16.3

17.3

18.3

Taiwan

China

100

0

196

110

0%

16.3
Domestic

17.3
Overseas

18.3

19.3
Overseas Ratio

19.3

Southeast Asia etc.
26

3-7. Net Sales Plans by Regions
Domestic
Plan sales from a large order received in the electronics industry in the previous term.
Overseas
Plan record sales of 23 billion yen overseas.
Expect a recovery of investment in Taiwan in addition to an increase in China.
Overseas Net Sales

Domestic・Overseas Net Sales
1,000

50%

900

800

700

787
183

890

811

792

192

230

169

600

230

40%

183

192

60

62

22

20

101

109

16.3

17.3

Taiwan

China

169

30%

500

400

(100 M of JPY)

23.4%

23.7%

603

618

25.8%

20%

21.5%

200

660
10%

100

0

80

51

300

622

50

50

67

100

0%

16.3
Domestic

17.3

18.3

Overseas

19.3

Overseas Ratio

18.3

19.3

Southeast Asia etc.
27

3-8. Sales plan by Category / Market（Water Treatment Engineering）
Plant business
Expect sales from a large order received in the electronics industry in the previous year.

Solution business
Plan sales at a similar level to those of the previous term. Work on the review of the system,
enhancing the solution business.
(100M of JPY)Net Sales

800

700

629

621

647

600

715

377

90%

80%

70%

500

318

284

309

47.3%

400

300

200

Net Sales by Market

100%

60%

629

647

120

120

621
113

206

272

242

49.2%

43.0%

352

50%

49.4%

52.3%

54.4%

311

338

338

40%

338

30%

715
118
245

48.3%

303

20%

39.5%

256

267

17.3

18.3

100

10%

0

0%

03/16

03/17

Solution Business

03/18
Plant Business

03/19
Solution Ratio

16.3

Power Plants+Water Sewarage
GeneralElectronics
Electronics Ratio

19.3

28

3-9. Orders Received and Net Sales for the Electronics Industry（Water Treatment Engineering）
Order Received
Expect a decrease in Japan, but expect large orders in China and Taiwan.
Net Sales
Expect sales from a remaining order in the previous term with a plan to increase
sales in Japan and overseas.
(100M of JPY)

Order Received

Net Sales

400

400

343

350

326

300

250

304
300

241

256

146
174

218

200

150

352

350

250

132

200

150

119

197

133

267
117

150

172

152

100

150

100

166

186

122
50

91

99

50

0

0

03/16

03/17
Domestic

03/18

03/19

Overseas

03/16

03/17
Domestic

03/18

03/19

Overseas293-10. Plans By Business Segments（Functional Product）
Standardized Water Treatment Equipments & Filters
Plan to increase sales due to the enhancement of the lineup and overseas development.
Water Treatment Chemicals
Continue to enhance overseas development with the aim of increasing sales.
Food Processing Materials
Plan to increase sales of granulated products for nursing care food and other products.
(100 M of JPY)Net Sales
164

170

54

54

175
56

52

55

58

60

49

55

58

59

03/16

03/17

03/18

03/19

158
57

Food Processing Materials

Standardized Water Treatment Equipments & Filters

Water Treatment Chemicals

30

3-11. Major Indicators
03/2019

03/2018（Plan）

Capital Investment

644

900

R&D Expenses

1,776

1,950

Depreciation

972

1,100

Interest-bearing Debt

15,48416,000

Number of Employees

2,179

2,200

Dividend per Share

53

58

ROE

5.5

5.2

（Millions of JPY)

（Millions of JPY）
（Millions of JPY）
（Millions of JPY）

（JPY/Year)
（％）

※

31

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）32

4-1. New Organo Group Philosophy
Management Philosophy and Long-term Vision
Our new management philosophy encapsulates our corporate ethos,societal mission, and reason for existence. A new management visionfocuses on medium- and long-term goals as the foundation ofOrgano’s management plan.

MANAGEMENTPHILOSOPHY• Corporate ethos• Societal mission• Reason for existence

MANAGEMENTVISION• Medium-term (3 years)• Long-term (10 years)

MANAGEMENT

PLAN• Three-year
management plan(subject to annual review)334-2. Management philosophy
Statement
Organo serves as a valuable partner company by leveraging its
advanced technologies cultivated through long experience with water
treatment, by contributing to the industries that create the future, andby playing a key role in the development of societal infrastructure.

 Organo deploys its water-related technology and services across a wide
range of fields, thereby contributing to the development and harmony ofindustry, environment, and life.

 Organo takes the advanced technologies cultivated through its involvementin the science of water and develops them in non-water fields, thereby
contributing to industry development and the resolution of societal issues.
 Organo pursues the creation of economic and social value together withstakeholders, as a reliable and valued partner.

34

4-3. Long-term Management Vision
Statement
At Organo, we seek to expand our business through high value-added
separation and purificaion as well as analysis and manufacturing
technologies, and by providing products and services that promote
the creation of value and which resolve the challenges that confront
industry and society.

We proactively contribute to a better tomorrow by cultivating people
today who will improve upon the way things were done yesterday, as
a company where we all are energetic and passionate about their
work.

35

4-4. Long-Term Management Vision
Expansion of Business Activities
New Business
FieldsWater Purification,
Collection, Recycling

Non-water Related
Activities

Semiconductor wet
process

Advanced water
treatment

Advanced separationand purification

Natural resources andenergy

•
•

•
•
•
•

Life-science fields•

Water (pure/ultrapure)
Wastewater treatment
and water recycling
Functional Products

LiB
Electronic materials
Bio-pharmaceuticals
Water-heat recycling
system36

4-5. Long-Term Management Vision
Expansion of Areas of Operation
Cultivate
New Markets

Build Market Sharein Asia

Build market share in
Asia

China / Taiwan

Penetrate new markets

Southeast Asia

• Electronics industry• Electronics/power
generation/general

Functional Products• Reinforce water treatment
equipment/chemicals
businesses• Reinforce food processing
materials business

Penetrate
New Markets

India• Emergence of electronics
industry

North America• Cutting-edge semiconductors• High demand for watersupply and sewerage
upgrades37

4-6. Long-Term Management Vision
Microorganism Technology Development
Biopharmaceutical

Advanced
High-performanceelectronic materials
saccharides

Bacteria/Algae

Antibody(<1μm)

Monosaccharide Noble Gas(10-20nm)

Water fordomestic use(<0.4nm)(<1nm)

Pure/Ultrapure water >>River water >>Tap water >>Ultrapure domain >>Suspended solids

Virus/Fine particle

Particle(1-1,000μm)(<30nm)(<10nm)Wastewater
treatment

Industrial
water

Precisioncleaning

Water forpharma.

Electronics
industry

Advanced
semiconductors

38

Contents
１．Corporate Outlines

２．Financial Result of FY 2018
３．Financial Forecasts for FY 2019

４．Company policy &Long-term management vision
５．New Mid-term management plan（2018～2020）39

5-1. Medium-term Management Vision
Statement
To become a profitable engineering company that provides water ofthe highest quality, at a reasonable cost and in a timely fashion, tocustomers in electronics manufacturing and other industries in key
Asian economies.

To use our proprietary separation and purification processes togenerate new businesses in support of next-generation industry.

To continuously create and deliver high value-added Functional
Products to the global market.

40

5-2. Medium-term Management Plan (2017-2019)
Key Management Targets
Achieve 90 billion yen in net sales, 5 billion yen in operating income,and ROE and operating margin of 5% or better by 2020, with
continued efforts to increase ROE to 8%.
(Unit: 100 million yen)

03/2018

03/2019

03/2020

03/2021

Orders Received

880

870

880

900

Net Sales

792

890

880

900

Operating Income (%)

38 (4.8%)42 (4.7%)

43 (4.9%)50 (5.6%)

ROE (%)

5.5%

5.2%

5.2%

5.6%

41

5-3. Medium-term Management Plan (2017-2019)
Increasing ROE
ROEProfitability

Efficiency

Financial
Leverage

Organo

5.5%

3.5

82.5

191.3

Competitors(avg.)

7.2%

5.3

80.0

169.5

ROE = Profitability x Efficiency x Financial Leverage

Improve ROE by improving profitability•

Profitability is inferior to competitors Reform cost structure•

Efficiency is essentially average Strengthen Functional Products•

Financial leverage is within acceptable range

 Expand Solution Business42

5-4. Medium-term Management Plan (2017-2019)
Growth in Electronics, Functional Products, New Businesses
Advanced Technologies

Business
Water Treatment
Engineering

Purification
Ion-exchange and chelating
resins, zeolite

Expand Electronics
Business

Pure/ultrapure water,
wastewater treatment, water
recycling, solution services

Increase market share in China,
enhance solution business

Functional Products

Strengthen Functional
Products BusinessStandardized equipment/filters,
water treatment chemicals, foodprocessing materials

Separation
Polymer and inorganic
separation membranes

Targets

New Businesses
Separation and purification forsolvents/electronic materials,
collection/separation andpurification for noble gases, etc.

Develop and launch new
products, expand overseas
sales

Cultivate New
Businesses
LiB, electronic materials,
bio-pharmaceuticals, others43

5-5. Outlines of Mid-term Plan
Mid-term Plan

(100 M of JPY)

New Fields
Water
Engineering
Functional
Product

+ 36

+ 47

Net Sales
900

Net Sales+108

792
Operating
Profit38(4.8%)
ROE
5.5%

18.3

Ope-Pro.
+12(+0.8pt)

Aim to expand the business through the enhancement of the
new product development of standardized water
treatment equipment, water treatment chemicals and overseas
expansion, and the enhancement of manufacturing technology
in the food area.

Water Engineering+ 25
Net Sales

Functional ProductOperating
Profit50(5.6%)

Aim to increase market share and the solution business in
China, where active capital investment continues, and in theelectronics industry.

New Fields
ROE+0.1pt

ROE
5.6%

21.3

Use our separation and purification technologies in the LiB
market, where increased sales are expected for EVs, in thearea of electronic materials, which is related to the
manufacture of increasingly miniaturized semiconductors, andin the area of bio-pharmaceuticals for the extraction of active
ingredients.

44

5-6. Mid-term Plan Functional Product
Functional Product(100M of JPY)

170

Standard
Equipment Food
11
+11
Chemical
+77
+77

54

Net Sales
+25

195

58

Operating
Profit+6

・Development of new water treatment chemicals
・Overseas expansion of sales of chemicals for effluent
treatment and the electronics industry
・Development and deployment of a solution service using IoT
and AI

65
Standard Equipment & Filter
20

14

Water Treatment Chemicals

65

・Enhancement of a lineup of standardized pure water/ultra purewater supply system Purelite/Puric-α series
・Developing a system for sales and maintenance in China
・Preparation and promotion of an efficient production system

Food Processing Materials

58

65

18.3

21.3

Foods

Srandard Equipment

Water Chemical

Operating Profit

・Enhancement of processing technologies including granulation
technology
・Establishment of a production system with higher safety
・Enhancement of the marketing function overseas

45

5-7. Mid-term Plan Expanding Electronics
Developing New Market

Electronics Area
(Millions of JPY)Net Sales
+33
+48

267
117

Overseas

300

△15

165
Domestic

55.0%

Competitiveness・Reforming of the cost system⇒Overhaul of the engineering system
・Differentiation by promoting a joint experiment with acustomer

43.8%
Overseasratio+11.2pt

150

・Increase in market share and preparation of a maintenance system
in China⇒A sense of uncertainty regarding the investment plan in 2019
and thereafter・Deployment of advanced technology for extensive investment inJapan and Taiwan
・Preparation of a system in India as a future market

135

Solution Business・Preparation of a system for the improvement of profitability
and the expansion of the solution business overseas

18.3
Domestic

21.3
Overseas⇒Overhaul of the maintenance engineering system in Japan andoverseas

Overseas ratio

46

5-8. Mid-term Plan New Fields■ Deployment of own separation and purification technologies in areas
other than water, including solvent mediums and solvents■ Work on discovering a market for secondary batteries and electronic materials
New Fields

Lithium Ion Battery Market(100M of JPY)

47

31

・Purification System for
NMP(solvent for manufacturing electrodes)
・Purification forelectrolytes⇒ Focusing on growing China Market

27
Wet/Cleaning Process of semicon

19

15
12

13

20

4
19.3

20.3

Wet process

21.3
Battery

Separation, purification, andcollection of organic solvent,photoresist, rare gas,
etc., which are used in
manufacturing
semiconductors (wet process)⇒Deployment in advanced markets in Japan, Taiwan,
and the US47

5-9. Mid-term Plan R&D■ Enhancement of R&D investment as a driving force for growth■ Increase investment, targeting a sale-to-research expense ratio of 2.5%
■ Enhancement of separation, purification and analysis technologies to respond to
the needs for advanced miniaturization and ultra purity
R&D Expenses(100M of JPY)

23
18
14

20

15

1.8%

1.8%

16.3

17.3

2.2%

2.2%

18.3

19.3

R&D expenses

2.5%

21.3

Purification and Separation■ Highly advanced semiconductors
Development of advanced water
treatment technology to respond tofurther miniaturization (X nano)■ Biological pharmaceuticals
Development of a nano-scale separation and purification
process of protein to improve the efficiency of the drug
manufacturing process■ Functional productEnhancement of the lineup of acompact pure water/ultra pure watersupply system for laboratories andmedical facilities and medical use, avariety of filters, and water treatment
chemicals

R&D ratio48

5-10. India Market■ Enhancement of expansion into India as a market following Asia market■ Expect further development due to the growth of the market and production
related to the electronics industry■ Enhancement of a technology and delivery system based on a local affiliate

Greater
China

Japan

India

ASEAN

49

5-11. For further development■ Aim to produce sales of 100 billion yen by 2025
■ Expand into North America again, in addition to expansion into India■ Actively explore the possibility of M&A for function complementation

Re-entry into USA(100 M of JPY)

Mid-term
Plan
+108

+100

1,000

Sell advanced technology, targeting demand for themost advanced manufacturing process ofsemiconductors and the replacement of municipal waterand sewerage systems in large cities

900

M&A/Aliance
792
Actively explore the possibility of M&A, alliances and theintroduction of technology mainly overseas for function
complementation

18.3

21.3

～2025

50

5-12. Mid-term plan restructuring organization
Technology andDevelopment

Establish the Technology Development Headquarters. Integrate R&D andengineering functions, and also promote a system for cost reductions and anengineering system overseas.

Overseas Business

Establish the Overseas Business Promotion Headquarters. Adjust theoverseas strategy of each business area, and enhance M&A and theintroduction of technology overseas.

Solution Business

Establish the Solution Promotion Office. Enhance the business system inJapan and overseas, and promote the expansion of business under a crosssectional strategy.

New Field

Establish the Separation and Purification Business Unit. Promote thedevelopment and commercialization of the area of secondary batteries andelectronic materials.

Productivity

Establish the Operational Reform Promotion Division. Work on operational
reform and the improvement of productivity collectively with the overhaul of theinformation system.

51

5-13. Corporate GovernanceCorporate Governance■ Overview of the assessment of theworkability of the Board of Directors
in the past and the status of response
・Reconsideration of company
objectives and social significance⇒Create a new corporate philosophy
and a long-term management vision
・Standard for compensation for directors
and decision process⇒Review of compensation system fordirectors（described later）
・Enhancement of dialogue withinvestors and shareholders
・Discussion on selection of directors
and the role of the Board of Directors⇒Proceed with improvement efforts

2017年度

2018年度Overall
4.0
4.0

Dialogue with investors
3.4
and shareholders

Workable Board of
Directors
3.7

3.0

3.8

3.5

3.7

4.5

Support system foroutside directors

4.1
4.2

4.0

Composition ofBoard of Directors

Status of administrationof Board of Directors

52

5-14. Corporate Governance
Stock remuneration Plan
■ Introduction of stock remuneration planStockremuneration(medium/longterm)

Performancebased
remuneration(short term)

Variablepart

Performancebased
remuneration(short term)

・Aim to improve the medium- to long-term
performance of the Group and enhance officers’
awareness of contributing to the increase incorporate value
・Part of the remuneration for officers is replacedwith a performance-based stock remuneration plan
starting in FY2018
・Shares are issued as remuneration according to
the achievement ratio on the basis of the standard ofreturn on equity (ROE)Basicremuneration

現状
Current

Basic
remuneration

・Shares are issued every year. It is prohibited tosell the shares for three years from their issuance.

見直し案
Plannedrevision53

Contact
Organo Corporation Corporate Planning Dept.
TEL : +81-3-5635-5111／ FAX : +81-3-3699-7240
E-mail : info@organo.co.jp
https://www.organo.co.jp/
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 variety of factors.

54