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Consolidated Financial Results for the First Three Months of
the Fiscal Year Ending March 31, 2020
<under Japanese GAAP>
August 2, 2019
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:
August 9, 2019
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results presentation meeting:
None

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

1. Consolidated financial results for the first three months of the fiscal year ending March 31, 2020
(from April 1, 2019 to June 30, 2019)(1) Consolidated operating results (cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen% Millions of yen%
Three months ended
June 30, 201920,14919.0
1,305–
June 30, 2018
16,926
25.8
33
–
Note:
Comprehensive income: Three months ended June 30, 2019
Three months ended June 30, 2018

Basic earnings
per share
Three months ended
June 30, 2019
June 30, 2018

Profit attributable toowners of parent

Ordinary profit
Millions of yen%

Millions of yen

1,367
–
25
–
¥ 824 million [–%]¥ (357) million [–%]

807
(208)

%

–
–

Diluted earnings
per share
Yen

70.68
(18.15)Yen––(2) Consolidated financial position
Total assets
As ofJune 30, 2019
March 31, 2019
(Reference) Equity: As of June 30, 2019

Net assets

Millions of yen

103,176
101,257¥54,970 million

Equity-to-asset ratio

Millions of yen

55,11354,795
As of March 31, 2019

%

53.3
54.0
¥54,657 million

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

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

Yen–

Fiscal year-end

Yen

29.00

Total

Yen

–

Yen

44.00

73.00

39.00

78.00

–

Fiscal year ending
March 31, 2020
39.00–
(Forecast)
Note:
Revisions to the forecast of cash dividends most recently announced: None

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

Millionsof yenProfit attributable toowners of parent

Ordinary profit%

Millionsof yenSix months ending
46,000
18.6
4,300
184.8
4,300
September 30, 2019
Fiscal year ending
96,000
4.0
6,600
0.6
6,500
March 31, 2020
Note:
Revisions to the earnings forecasts most recently announced: Yes%

Millionsof yenBasicearnings
per share

%

Yen

177.4

3,000

227.5

262.63

(0.6)

4,400

(1.2)

385.19

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

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

(3) Changes in accounting policies, changes in accounting estimates, and restatementa. Changes in accounting policies due to revisions to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatement: None
(4) Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 201911,589,925 shares

As of March 31, 201911,589,925 sharesb. Number of treasury shares at the end of the period
As of June 30, 2019

166,951 shares

As of March 31, 2019

166,788 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
For the three months ended June 30, 201911,423,035 shares

For the three months ended June 30, 2018

11,510,150 shares

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

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

Attached Material

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

1. Qualitative information regarding financial results for the first three months(1) Explanation regarding operating results
During the three months ended June 30, 2019, a state of extreme uncertainty over the future of theJapanese economy continued, against the backdrop of a slowdown in the Chinese and European
economies and alarm over the deterioration of the global economy due to trade friction between the US
and China and other factors.
The business environment surrounding the Organo Group showed strength in current production andcapital investment mainly in Japan. However, in the electronics field, there is a growing view thatconditions will worsen mainly due to the issue of trade friction between the US and China, stagnant
smartphone demand, and deteriorating conditions in the memory and liquid-crystal panel market. As
such, we saw a more cautious approach to large-scale semiconductor-related capital investment.
Amid these conditions, the Organo Group aims to enhance cost competitiveness, improve productivity
and profitability, and create products and technologies differentiated from competitors. To this end, weare pursuing various efforts around the key issues of “expanding the electronics field,” “strengthening
the performance products business” and “creating new businesses.”
Consequently, the financial results for the three months ended June 30, 2019 are as follows. Orders
received increased by 0.4% year on year to ¥19,514 million, net sales increased by 19.0% year on yearto ¥20,149 million, operating profit amounted to ¥1,305 million (compared with operating profit of ¥33
million in the same period of the previous fiscal year), ordinary profit amounted to ¥1,367 million(compared with ordinary profit of ¥25 million in the same period of the previous fiscal year), and profit
attributable to owners of parent amounted to ¥807 million (compared with loss attributable to ownersof parent of ¥208 million in the same period of the previous fiscal year).
Results by segment are as follows.
Starting from the first quarter ended June 30, 2019, we have changed the classification method, etc. of
our reportable segments, and the comparisons and analysis of the three months ended June 30, 2019 are
made based on the classifications following the changes.
[Water Treatment Engineering Business Unit]
In the Water Treatment Engineering Business Unit, the electric power/water supply and sewage fields
maintained levels slightly above those in the same period of the previous fiscal year mainly due toorders received for water treatment facilities for thermal power stations. Orders received fell slightly inthe electronics field due to a cautious approach to large-scale capital investment from uncertainty overthe future and other factors. However, net sales increased year on year mainly due to steady progress inthe construction of large projects in Japan, China, and Taiwan for which orders were received up until
the previous fiscal year, as well as favorable performance by service solutions including maintenanceservices like expendable item replacement, and renovation and improvement construction of facilities.
In addition, both orders received and net sales were strong in the general industrial field against the
backdrop of solid production and capital investment mainly in Japan. Meanwhile, on the profit side, in
addition to the effect of increased sales mainly in the electronics field, improvement in the profit ratio
for the Plant Divisions from various cost-cutting measures as well as solid performance in service
solutions led to a large-scale increase in profit year on year. Consequently, orders received increased by
1.3% year on year to ¥15,072 million, net sales increased by 25.1% to ¥15,573 million, and operating
profit amounted to ¥1,107 million (compared with operating loss of ¥234 million in the same period of
the previous fiscal year).
[Performance Products Business Unit]
In the Performance Products Business Unit, backed by strong production and capital investment mainly
in Japan, sales were strong for standard equipment and filters for the general industrial field andelectronics field, as well as for water treatment chemicals including wastewater treatment chemicals-2-and cooling water treatment chemicals. However, development investment in new products andtechnologies increased, as did expenses, etc. due to the expansion of our production and sales network
aimed at enhancing overseas development. Consequently, orders received decreased by 2.2% year on
year to ¥4,442 million, net sales increased by 2.3% to ¥4,575 million, and operating profit decreased by
26.2% to ¥197 million.
(2) Explanation regarding financial position
Assets, liabilities and net assets
AssetsAssets as of June 30, 2019 amounted to ¥103,176 million, an increase of ¥1,918 million from theprevious fiscal year end. This was due mainly to an increase in inventories of ¥1,908 million mainly inwork in process and an increase of ¥1,888 million in cash and deposits, despite a decline of ¥1,844
million in notes and accounts receivable - trade.
Liabilities
Liabilities as of June 30, 2019 amounted to ¥48,062 million, an increase of ¥1,600 million from theprevious fiscal year end. This was due mainly to an increase in short-term borrowings of ¥3,263 million
and an increase of ¥2,199 million in long-term borrowings, despite a decline of ¥3,014 million in notes
and accounts payable - trade.
Net Assets
Net assets as of June 30, 2019 amounted to ¥55,113 million, an increase of ¥317 million from theprevious fiscal year end. This was mainly due to an increase of ¥301 million in retained earnings
resulting from the recording of profit attributable to owners of parent.
(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements
Regarding results for the six months ending September 30, 2019, we have revised the forecast
announced on May 9, 2019 based on results trends in the Water Treatment Engineering Business Unit.
Construction of large projects mainly in the electronics field in Japan, Taiwan, and China are expected
to progress ahead of initial forecasts. Additionally, our service solutions such as maintenance, which are
predominantly Japan based, are trending strongly, and the profit ratio in the Plant Divisions is expected
to improve due to cost-cutting and other factors. Consequently, our forecast for net sales increased fromour previous forecast by 7.0% to ¥46,000 million, operating profit by 168.8% to ¥4,300 million,
ordinary profit by 177.4% to ¥4,300 million, and profit attributable to owners of parent by 275.0% to¥3,000 million.
Regarding our full-year earnings forecast, while we are seeing a cautious approach to capital
investment in the electronics field, there are also proactive investment plans depending on the region
and product. As cautious decisions must be made on future investment trends, at present we have left
our full-year earnings forecast unchanged from our previously announced forecast.

-3-

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

As of June 30, 201911,27640,256
13,574
4,717
2,717
1,426
2,206
(139)
76,037

13,16538,411
13,104
4,818
4,539
1,411
2,634
(138)
77,947

17,850(12,339)
5,511
5,576
(4,879)696
12,28845
4,968(4,236)731
19,272
1,209

17,873(12,420)
5,452
5,582
(4,915)667
12,290111
4,944(4,219)724
19,246
1,144

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

1,650
2,711
749
(274)
4,836
25,228103,176(Millions of yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Advances received
Provision for bonuses
Provision for product warranties
Provision for loss on construction contracts
Provision for share-based remuneration for
directors (and other officers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-5-

As of June 30, 201918,516
13,458
1,546
1,499
1,165
321
84

15,502
16,722
661
2,306
499
337
92

95

126

3,242
39,9303,086
39,334

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

2,400
10
6,236
80
8,727
48,062

8,225
7,508
39,967(629)
55,071

8,225
7,508
40,268(629)
55,372

273

247

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

(0)
(175)
(472)
(401)
142
55,113103,176

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income (cumulative)
Three months
ended June 30, 2018
(From April 1, 2018 toJune 30, 2018)
16,926
13,128
3,798
3,764
33

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on abandonment of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent-6-(Millions of yen)Three months
ended June 30, 2019
(From April 1, 2019 toJune 30, 2019)20,14914,791
5,358
4,053
1,305

4
12

9
12

20

73

19
57

15
111

17
31
16
1
66
25

34
11
1
1
48
1,367

0
0

0
0

0
0
25
242
(217)
(8)
(208)

1
1
1,366
558
807
0
807

Consolidated statement of comprehensive income (cumulative)
Three months
ended June 30, 2018
(From April 1, 2018 toJune 30, 2018)(217)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests-7-(Millions of yen)Three months
ended June 30, 2019
(From April 1, 2019 toJune 30, 2019)
807

13
(1)
(182)
30

(25)
0
21
21

(0)

(1)

(140)
(357)

16
824

(338)

820

(18)

4

(3) Notes to quarterly consolidated financial statements
Notes on premise of going concern
No items to report
Notes on substantial changes in the amount of shareholders’ equity
No items to report
Application of special accounting for preparing the quarterly consolidated financial statements
Calculation of tax expenses
Tax expenses are calculated by multiplying the profit before income taxes by the reasonably estimatedeffective tax rates after the application of tax effect accounting to the profit before income taxes for the
fiscal year including the first quarter ended June 30, 2019. However, in cases where the calculation oftax 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. is added to or
deducted from the profit before income taxes, and the result is multiplied by the statutory income tax
rate.

-8-

Segment information, etc.
[Segment information]
I Three months ended June 30, 2018 (from April 1, 2018 to June 30, 2018)
1. Information relating to net sales, profit (loss) by each reportable segment
Reportable Segment(Millions of yen)Amountrecorded in thequarterly
consolidated
statement ofincome(Note)

Water
Treatment
Engineering
Business Unit

Performance
Products
Business Unit

Net sales
Sales to external customers
Intersegment sales or transfers

12,453
0

4,473
81

16,92682–(82)

16,926–

Total

12,453

4,555

17,008(82)

16,926

Total

Adjustment

Segment profit (loss)
(234)
267
33
–
33
Note:
The figures for segment profit (loss) are based on operating profit or operating loss, and there are no discrepancies
with the operating profit shown in the quarterly consolidated statement of income.

II Three months ended June 30, 2019 (from April 1, 2019 to June 30, 2019)
1. Information relating to net sales and profit by each reportable segment
Reportable Segment(Millions of yen)Amountrecorded in thequarterly
consolidated
statement ofincome(Note)

Water
Treatment
Engineering
Business Unit

Performance
Products
Business Unit

Net sales
Sales to external customers
Intersegment sales or transfers

15,5730

4,575
80

20,14980–(80)

20,149–Total

15,574

4,656

20,230(80)

20,149Total

Adjustment

Segment profit
1,107
197
1,305
–
1,305
Note:
The figures for segment profit are based on operating profit, and there are no discrepancies with the operating profit
shown in the quarterly consolidated statement of income.

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

-9-