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 Six Months of
the Fiscal Year Ending March 31, 2021
<under Japanese GAAP>
October 29, 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:
November 13, 2020
Scheduled date to commence dividend payments:
December 7, 2020
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:Yes (for institutional investors andanalysts)
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 six months of the fiscal year ending March 31, 2021
(from April 1, 2020 to September 30, 2020)(1) Consolidated operating results (cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating profit

Profit attributable toowners of parent

Ordinary profit

Millions of yen% Millions of yen% Millions of yen%
Six months ended
September 30, 2020
45,322(2.9)
3,182(41.5)
3,276(38.4)
September 30, 201946,675
20.4
5,444
260.6
5,317
243.1
Note:
Comprehensive income: Six months ended September 30, 2020 ¥2,072 million [(40.8)%]
Six months ended September 30, 2019 ¥3,498 million [329.0%]

Basic earnings
per share
Six months ended
September 30, 2020
September 30, 2019

Millions of yen

%

2,080
3,640

(42.8)
297.4

Diluted earnings
per shareYen

181.54318.51

Yen––(2) Consolidated financial position
Total assets
Millions of yen
As ofSeptember 30, 2020
101,896
March 31, 2020
101,448(Reference) Equity: As of September 30, 2020 ¥62,243 million

Net assets

Equity-to-asset ratio

Millions of yen

62,37960,857
As of March 31, 2020

%

61.1
59.9
¥60,717 million

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

Fiscal year ended
March 31, 2020
Fiscal year ending
March 31, 2021

Yen

–

47.00

–

52.00

Fiscal year-end

Yen

Total

Yen

–

Fiscal year ending–
March 31, 2021
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: None

Yen

57.00

104.0052.00

104.003. Consolidated earnings forecasts for the fiscal year ending March 31, 2021
(from April 1, 2020 to March 31, 2021)(Percentages indicate year-on-year changes.)
Net sales
Millionsof yenOperating profit%

Millionsof yenProfit attributable toowners of parent

Ordinary profit%

Millionsof yenFiscal year ending
100,000
3.6
7,200(27.3)
7,100
March 31, 2021
Note:
Revisions to the earnings forecasts most recently announced: None%

(28.5)

Millionsof yen

4,700

Basic
earnings
per share%Yen(34.4)

410.13

Any impact amount factored in for the impact arising due to the proliferation of novel coronavirus disease (COVID-19) islimited to the amount that can be assumed at this stage. We will accordingly revise our earnings outlook as developments
unfold. Please refer to “(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements” in“1. Qualitative information regarding financial results for the first six months” on page 3 of the attached material for the
suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.

* 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 9 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 September 30, 2020

11,589,925 shares

As of March 31, 2020

11,589,925 sharesb. Number of treasury shares at the end of the period
As of September 30, 2020

102,804 shares

As of March 31, 2020

136,593 sharesc. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year)
For the six months ended September 30, 2020

11,459,908 shares

For the six months ended September 30, 201911,428,740 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 outstanding 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 referto “(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements” in“1. Qualitative information regarding financial results for the first six months” on page 3 of the attachedmaterial for the suppositions that form the assumptions for earnings forecasts and cautions concerning
the use thereof.

Attached Material

Index
1. Qualitative information regarding financial results for the first six 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) Consolidated statement of cash flows .....................................................................................................8(4) Notes to quarterly consolidated financial statements ............................................................................9
Notes on premise of going concern ..........................................................................................................9
Notes on substantial changes in the amount of shareholders’ equity ...................................................9Application of special accounting for preparing the quarterly consolidated financial statements ...9Additional information ............................................................................................................................9
Segment information, etc. ......................................................................................................................10
Significant subsequent events ................................................................................................................ 11-1-

1. Qualitative information regarding financial results for the first six months(1) Explanation regarding operating results
During the six months ended September 30, 2020 (from April 1, 2020 to September 30, 2020),
following the global spread of COVID-19, the Japanese and global economies have been in a state ofsignificant turmoil. Looking at the main markets in which the Organo Group operates, in the electronics
field, both production and capital investment have been solid against a backdrop of growth insemiconductor demand, mainly due to the expanding use of teleworking and the full-scale adoption of
5G telecommunications. In Taiwan, strong activity continued, including continued large-scale
investment in cutting-edge semiconductors; but a strong sense of uncertainty clouds the future due to
growing friction over semiconductors between the United States and China. In the general industrial
field, although a recovery has been seen in some areas, there is a continuing trend to curb and delay
capital investment in general, and the impact has been seen in sales of performance products such as
water treatment chemicals, filters, and food processing materials in the automotive and restaurant fields.
In the electric power/water supply and sewage fields, although there has been a trend of curbing certain
capital expenditure and large-scale maintenance programs, no major impacts were observed.
Under these conditions, the Group introduced telework and utilized various online tools and the like tohandle planning for large-scale investments in Taiwan, China and so forth, as well as designing andconstruction and so forth for major projects in Japan. In addition, the Group accelerated thedevelopment of engineering tools that utilize ICT, such as introducing tablets to construction sites. In
this way, under the impact of restrictions on going out and moving both in Japan and overseas, theGroup proceeded to prevent infection spread while continuing business activities. As a result, in theGroup’s financial results for the six months ended September 30, 2020, orders received increased by
4.5% year on year to ¥44,050 million, exceeding the initial plan, net sales decreased by 2.9% year on
year to ¥45,322 million, and our carry-over balance for order backlog as of September 30, 2020 was up
22.3% to ¥66,546 million. On the profit side, operating profit decreased by 41.5% to ¥3,182 million,
ordinary profit decreased by 38.4% to ¥3,276 million, and profit attributable to owners of the parent
decreased by 42.8% to ¥2,080 million.
Results by segment are as follows.
[Water Treatment Engineering Business Unit]
In the Water Treatment Engineering Business Unit, overseas orders received and net sales increased
significantly in the electronics field, as large-scale cutting-edge semiconductor projects continued in
Taiwan and semiconductor-related orders increased in China as well. In addition, the Service Solutions
Division, services such as maintenance performed favorably in Japan and overseas. In the generalindustrial field, orders decreased in the Plant Division partly due to an impact from moves to curb anddelay capital investments; however, the Service Solutions Division performed solidly as construction
proceeded steadily on carry-over orders from the previous fiscal year. As a result, net sales declined
only slightly. Furthermore, in the electric power/water supply and sewage fields, the Group securedorders at about the same level year on year, including an order for a large project for water supply andsewage. Meanwhile, net sales decreased slightly under the impact of a decrease in sales related to watersupply and sewage, despite steady progress on maintenance projects related to electric power.
Consequently, orders received increased by 5.7% year on year to ¥34,948 million and net sales
decreased by 2.5% year on year to ¥36,402 million.
Meanwhile, on the profit side, compared to the same period of the previous fiscal year, when there wasconcentration of sales of comparatively profitable projects, mainly in the electronics field, and projects
with prominent cost reduction effects, the profit margin was lower. As a result, operating profit
decreased by 44.9% year on year to ¥2,636 million.
[Performance Products Business Unit]
In the Performance Products Business Unit, sales decreased in fields such as the automotive andrestaurant industries, as well as the medical institution field, such as examinations and general care, allof which were heavily impacted by COVID-19. On the other hand, sales of water treatment chemicals
for the electronics industry, which continued to maintain solid production levels, and sales of Orplus®
-2-

slightly acidic electrolyzed water for disinfecting and deodorizing performed favorably. Consequently,
orders received decreased by 0.1% year on year to ¥9,101 million, net sales decreased by 4.3% year on
year to ¥8,920 million, and operating profit decreased by 16.8% to ¥545 million.
(2) Explanation regarding financial position
Assets, liabilities and net assets
AssetsAssets as of September 30, 2020 amounted to ¥101,896 million, an increase of ¥448 million from theprevious fiscal year end. This was due mainly to an increase of ¥4,061 million in notes and accounts
receivable - trade and an increase of ¥2,832 million in inventories mainly in work in process, despite adecline of ¥5,580 million in cash and deposits and a decline of ¥982 million in investments in leases.
Liabilities
Liabilities as of September 30, 2020 amounted to ¥39,516 million, a decrease of ¥1,073 million fromthe previous fiscal year end. This was due mainly to a decline of ¥2,807 million in other current
liabilities and a decline of ¥851 million in income taxes payable, despite an increase of ¥2,129 million
in short-term borrowings.
Net Assets
Net assets as of September 30, 2020 amounted to ¥62,379 million, an increase of ¥1,521 million fromthe previous fiscal year end. This was mainly due to an increase of ¥1,424 million in retained earnings
resulting from the recording of profit attributable to owners of parent.
Cash flows
Cash and cash equivalents (hereinafter, “cash”) as of September 30, 2020 decreased by ¥5,580 million
from the previous fiscal year end to ¥8,192 million.
Cash flows from operating activities
Net cash used in operating activities for the six months ended September 30, 2020 was ¥6,054 million.
This was mainly because there was an increase in cash due to profit before income taxes of ¥3,288
million while there was a decrease in cash due to an increase in trade receivables of ¥4,282 million, an
increase in inventories of ¥2,839 million, and income taxes paid of ¥2,019 million. (Net cash of ¥916
million was used in the six months ended September 30, 2019.)
Cash flows from investing activities
Net cash used in investing activities for the six months ended September 30, 2020 was ¥647 million.
This was due mainly to purchase of property, plant and equipment of ¥510 million. (Net cash of ¥612
million was used in the six months ended September 30, 2019.)
Cash flows from financing activities
Net cash provided by financing activities for the six months ended September 30, 2020 was ¥1,184
million. This was mainly because there was an increase in cash due to net increase in short-termborrowings of ¥2,354 million while there was a decrease in cash due to repayments of long-termborrowings of ¥500 million and dividends paid of ¥655 million. (Net cash of ¥1,217 million was usedin the six months ended September 30, 2019.)(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements
Turning to full-year earnings forecasts, there are concerns over the impact of COVID-19 as well as theimpacts of trade friction over semiconductors between the United States and China in the electronics
field, which has been trending favorably. However, at this stage, there has been no sign of significant
delays or cancellation of planned projects, and construction on accepted projects in Japan and overseas
is proceeding steadily. Therefore, the full-year earnings forecast has been left unchanged from theprevious announcement. Any impact amount factored in is limited to the amount that can be assumed at
this stage. We will accordingly revise our earnings outlook as developments unfold.

-3-

2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2020

As of September 30, 2020

13,77236,783

8,192
40,844

1,590

1,716

11,752
5,710
2,728
1,392
2,448
(98)
76,078

10,769
5,899
5,310
1,452
2,707
(95)
76,79917,909(12,562)
5,347
5,697
(4,974)722
12,28498
5,088(4,245)842
19,296
1,113

17,927(12,724)
5,203
5,682
(5,038)643
12,280132
5,145(4,356)788
19,049
1,116

1,553
3,037
780
(411)
4,959
25,369101,448

1,595
2,989
758
(411)
4,931
25,097
101,896

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims operating
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-

(Millions of yen)
As of March 31, 2020

As of September 30, 2020

14,381
–
7,644
1,959
1,543
1,339
324
64

11,513
3,624
9,774
1,107
1,659
1,447
344
65

105

47

10
4,866
32,2402
2,059
31,647

2,095
9
6,153
91
8,349
40,590

1,795
9
5,989
74
7,869
39,516

8,225
7,508
46,081(537)
61,2778,225
7,508
47,506(432)
62,808

143

165

–
(178)
(525)
(560)
140
60,857
101,448

0
(259)
(470)
(564)
136
62,379101,896

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
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-(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
Insurance claim income
Share of profit of entities accounted for using
equity method
Other
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
Total extraordinary income
Extraordinary losses
Loss on abandonment of non-current assets
Loss on valuation of right to use facilities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Six months ended
September 30, 2019
(From April 1, 2019 to
September 30, 2019)46,67532,883
13,792
8,348
5,444

-6-

(Millions of yen)Six months ended
September 30, 2020
(From April 1, 2020 to
September 30, 2020)
45,32233,963
11,359
8,176
3,182

20
13
11

14
14
98

111

18

29
187

17
163

69
119
80
45
314
5,317

53
12
–
3
68
3,276

0
4
4

2
11
14

5
–
5
5,316
1,675
3,640
0
3,640

2
0
2
3,288
1,207
2,081
0
2,080

Consolidated statement of comprehensive income (cumulative)

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
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

Six months ended
September 30, 2019
(From April 1, 2019 to
September 30, 2019)
3,640

-7-

(Millions of yen)Six months ended
September 30, 2020
(From April 1, 2020 to
September 30, 2020)
2,081

(16)

21

0
(168)

0
(86)

43

55

(1)

0

(142)
3,498

(9)
2,072

3,497

2,076

0

(4)

(3) Consolidated statement of cash flows
Six months ended
September 30, 2019
(From April 1, 2019 to
September 30, 2019)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provisions
Increase (decrease) in retirement benefit liability
Interest and dividend income
Insurance claim income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sales of non-current assets
Loss on abandonment of non-current assets
Loss (gain) on sales of investment securities
Loss on valuation of right to use facilities
Decrease (increase) in trade receivables
Decrease (increase) in investments in leases
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Proceeds from insurance income
Income taxes (paid) refund
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Collection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-8-(Millions of yen)Six months ended
September 30, 2020
(From April 1, 2020 to
September 30, 2020)

5,316
557
270
5
(34)
(11)
69
48

3,288
586
166
(79)
(29)
(98)
53
25

(111)

(18)

(0)
5
(4)
–
(560)
944
(2,052)(3,070)
(618)
754
45
(65)
11
(1,654)
(8)
(916)

(2)
2
(11)
0
(4,282)981(2,839)776(2,641)(4,122)39(49)
98(2,019)(0)(6,054)

(573)

(510)

0

2

(38)
(6)
5
0
(0)
(612)

(147)
(7)
15
0
(0)
(647)

(3,092)
3,000
(605)
(506)
(13)
(1,217)

2,354
–
(500)
(655)
(13)
1,184

(138)

(63)

(2,885)
11,276
8,391(5,580)13,772
8,192

(4) 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 second quarter ended September 30, 2020. 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.
Additional information
Impact arising due to the proliferation of COVID-19
There has been no material change in the assumptions regarding the impact of COVID-19 described in
the annual securities report (additional information) (Impact arising due to the proliferation of COVID19) for the previous fiscal year.

-9-

Segment information, etc.
[Segment information]
I Six months ended September 30, 2019 (from April 1, 2019 to September 30, 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

37,351
0

9,323
160

46,675
160

–
(160)

46,675–

Total

37,352

9,484

46,836(160)

46,675

Total

Adjustment

Segment profit
4,788
655
5,444
–
5,444
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 Six months ended September 30, 2020 (from April 1, 2020 to September 30, 2020)
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

36,402
0

8,920
159

45,322
159

–
(159)

45,322–

Total

36,402

9,079

45,481(159)

45,322

Total

Adjustment

Segment profit
2,636
545
3,182
–
3,182
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.

- 10 -

Significant subsequent events
Significant capital investment
The Company resolved at a Board of Directors meeting held on October 23, 2020 to build new testing
blocks (2 blocks) at the R&D Center.
1

Purpose of the capital investment
The Group is advancing various initiatives for realizing “expanding the electronics field,”“strengthening the service solutions” and “creating new businesses,” which are identified as key
fields in the medium-term management plan. To realize these strategies, the Group must strengthen
and accelerate its research and development. To this end, the Group will build new testing blocks
equipped with next-generation ultra-high pure water equipment for the electronics industry, aiming
to execute its technology development roadmap for expanding the electronics field. At the sametime, the Group decided to build a new testing block at its R&D Center for nonaqueous processes,
such as electronic materials chemical solution purification.

2

Details of the capital investment(1) Location(2) Total investment amount3

Kanagawa

Schedule for introducing the facility(1) Construction start(2) Operation start4

4-4-1 Nishi-Onuma, Minami-ku, Sagamihara,
Prefecture (in R&D Center of the Company)
Approximately ¥3.0 billion

January 2021
April 2022

Material impacts of the facility on sales and production activities
The acquisition of this property, plant and equipment will have a negligible impact on the Group’s
consolidated operating results for the current fiscal year.

- 11 -