Financial Report for First Half of
Fiscal Year Ending March 31, 2020
November 11, 20191

Contents
１．First-Half Results for Fiscal Year Ending March 2020
２．Full-Year Forecast for Fiscal Year Ending March 2020
３．Medium-Term Management Plan

４．Company Overview

2

Contents
１．First-Half Results for Fiscal Year Ending March 2020
２．Full-Year Forecast for Fiscal Year Ending March 2020
３．Medium-Term Management Plan

４．Company Overview

3

Overview of First-Half Results
Orders: Declined due to decrease in electronics industry investment overseas, despite strong
domestic performance.
Sales: Increased due to construction progress in Plant orders from preceding year and expansion
in Service Solutions.
Operating Income: Increased significantly due to increased sales and improved Plant profitability.
(Unit: ¥100 million)

500
92

408

Orders

Sales

450

430

92

357

421
91

330

387
90

297

92

337

Operating Income
466

54.4

93

6.5

373

15.0

16.0

7.6
7.4

6.5
9.5

47.8

Sep-18

Sep-19Sep-19Sep-18

Sep-19Sep-19Sep-18

Sep-19Sep-19ActualPlan

ActualActualPlan

ActualActualPlan

Actual■ Water Treatment Engineering ■ Performance Products
4

Results for Year Ending March 2019
September
2018 Actual

September
2019 Initial
Plan

September 2019
ActualYear-on-Year

Actual-toForecast

Orders

500

450

421

-78

-28

Sales

387

430

466

＋78

＋36

93
(24.1%)

99(23.0%)

137(29.5%)＋44(+ 5.4 pt)＋38(＋6.5 pt)

78

83

83

＋4

＋0

15.0
(3.9%)

16.0(3.7%)

54.4(11.7%)＋39.3(＋7.8 pt)

＋38.4(＋8.0pt)

Ordinary income

15.4

15.5

53.1

＋37.6

＋37.6

Profit attributable toowners of theparent company

9.1

8.0

36.4

＋27.2

＋28.4

Unit: ¥100 million

Gross profit margin
(%)

SG&A1
Operating income
ratio
(%)

1: SG&A = Selling, General, and Administrative expenses
5Orders by Region
Despite strong domestic performance, investments slowed overseas, such as
in Taiwan and China, affecting first-half orders.
Domestic: Service Solutions such as maintenance and facility renovation showed strong
performance.
Overseas: Electronics industry-related large-scale investment slowed in Taiwan and China.
(Unit: ¥100 million)

Orders(Domestic/Overseas)

Orders Overseas
by region

500
450
158

125

341

Sep-18ActualDomestic325

Sep-19Plan
Overseas

158
421

33

125

34

30

63

358

Sep-19Actual

40

63

55

23
10
30

Sep-19Plan

Sep-19Actual90

Sep-18ActualTaiwanChina

SE Asia/Other
6

Sales by Region
Did not meet target overseas despite expanded sales domestically and abroad.
Domestic: Construction progressed in Plant orders from preceding year, and Service Solutions
showed strong performance.
Overseas: Negatively impacted by slowdown in large-scale electronics industry investment in
Taiwan and China.
(Unit: ¥100 million)

Sales(Domestic/Overseas)

430

387

Sales Overseas
by region

466

137

104
137

91

91
24

296

293

362

32

104

40

30
24

34
65
32

Sep-18ActualDomestic

Sep-19Plan
OverseasSep-19Actual

Sep-18ActualTaiwanSep-19
Plan
China

49
Sep-19ActualSE Asia/Other

7

Sales by Segment/Customer:
Water Treatment Engineering
Sales in all divisions surpassed the corresponding period of the preceding year, andthe initial first-half forecast.
Plant: While Plant sales to the electronics industry overseas decreased, construction progress on domestic
projects was ahead of projections.
Service Solutions: Strong performance in areas such as facility renovation and maintenance.
Electric Power/Water Supply and Sewage: Sales increased to general industry, centered on solutions.
(Unit: ¥100 million)

Sales by Segment

Sales by Customer

450

400

337
350

373

193

297
29
97

145

155

179

169

Sep-18Actual

Sep-19Plan

Sep-19Actual

Sep-18Actual

297

300

250

200

151

182

373

337
35
92

110

210

222

Sep-19Plan

Sep-19Actual

40

150

100

50

0

Service Solutions

Plant

Electric Power/Water Supply and Sewage
General Industry
Electronics Industry

8

Sales by Segment/Customer:
Performance Products
Strong performance in all divisions.
Water Treatment Chemicals: In addition to strong domestic performance, sales expanded overseas
due to fortified sales activities.
Standard Equipment/Filters: In addition to the introduction of new products, business development in
China was successful.
Food Products: Performance was strong despite a slight decline in sales.
(Unit: ¥100 million)

Sales by Segment

90

92

93

27

27

25

29

29

30

34

36

36

Sep-18Actual

Sep-19Plan

Sep-19ActualWater Treatment Chemicals

Standard Equipment/Filters

Food Products
9Comparative Analysis of First-Half Operating Profit
First-half operating profit improved significantly, up ¥3.9 billion year on year.
⇒ While sales and profit had declined somewhat in the second half of the preceding year, theyleveled off due to the expansion of back orders. And, as construction progress surpassed expectations,the profit forecast for the second half of the preceding year was realized in the first half of this year.
⇒ Amidst a decline in overseas sales stemming from a decrease in orders, the profit margin wasbolstered by growth in domestic projects with comparatively high profit margins and Service Solutions
projects.
⇒ The planned reduction in less-profitable projects due to a profitability-focused order strategy was
successful.
(Unit: ¥100 million)
Operating Profit (year on year)
54.4
Effect of construction
progress approx. ¥1.5 billion

Sales
increase

+16.6

6.5

+3.9 billion

Profit marginchange

15.0

+26.6

7.6
7.4
09/2018

Water Treatment

+0.8

- 4.9

47.8

Performance

+0.2
Water
Treatment
Engineering

Performance
Products

Engineering

Products

SG&A

09/201910

Contents
１．First-Half Results for Fiscal Year Ending March 2020
２．Full-Year Forecast for Fiscal Year Ending March 2020
３．Medium-Term Management Plan

４．Company Overview

11Overview of Full-Year Forecast
Orders: Recovery expected in large-scale semiconductor-related investment in Taiwan anddomestically in the second half.
Sales: Plant construction progress for orders from preceding year and expansion in Service
Solutions contributed to the increase.
Operating Profit: Increased due to improved plant profitability and expansion in Service Solutions.
(Unit: ¥100 million)

Sales

Orders
1,038

Operating Profit

922

960

970

184

190

190

950

1,000

190

190

850

760

810

738

770

780

Mar-19Mar-20 Plan

Mar-20Mar-19Mar-20Mar-20

Plan

Forecast

187

Forecast

85
65

66

13

14

14

71
51

52

Mar-19Mar-20 Plan

Mar-20
Forecast■ Water Treatment Engineering ■ Performance Products
12

FY ending 03/2020 Plan
March 2019
ActualMarch 2020 Initial
Plan

March 2020
Forecast

Year-on-Year

Actual-toForecast

Orders

1,038

950

1,000

- 38

+ 50

Sales

922

960

970

+ 47

+ 10

Gross profit margin

229

234

259

＋29

＋25

(24.8%)(24.4%)(26.7%)(+ 1.9pt)(+ 2.3pt)

SG&A1

163

168

174

+ 10

+6

Operating income
ratio

65

66

85

+ 19

＋19

(7.1%)(6.9%)(8.8%)(＋1.7pt)(+ 1.9pt)

Ordinary income

65

65

83

＋17

＋18

Profit attributable toowners of theparent company

44

44

56

＋11

＋12

Unit: ¥100 million

(%)

(%)

1: SG&A = Selling, General, and Administrative expenses
13Full-Year Forecast: Orders by Region
Domestic performance will be steady, while overseas performance, whichslowed in the first half, is expected to recover in the second half bolstered bycapital investment in Taiwan.
Domestic: Large-scale semiconductor-related orders are expected in the second half.
Taiwan: Proactive investment in facilities is planned, centered on foundries.
China: Despite existence of investment plans, U.S.-China trade friction is causing a strong senseof uncertainty.
(Unit: ¥100 million)
Orders Overseas
Ordersby Region(Domestic/Overseas)
1,200

880

1,000

800

740

950

1,000
40%

298
196

230

230

400

161
21.8%

579

23.0%

28.7%
22.3%

684

24.2%

740

720

74

230

230

69

60

55

196
30%

600

298

50%

1,038

20%

770

161

46

60

55

78

42

154

10%

200

0

35

64

72

Mar-17Mar-18

110

140

0%

Mar-17Mar-18Domestic

Mar-19OverseasMar-20Plan

Mar-20
Forecast

Overseas Ratio

TaiwanMar-19China

Mar-20Plan

Mar-20
Forecast

SE Asia/Other
14

Full-Year Forecast: Sales by Region
We expect to achieve our target due to strong domestic performance.
Domestic: In addition to construction progress on large-scale orders from the preceding year, strong
performance is expected in Service Solutions such as facility renovation projects.
Overseas: Despite the slowdown in China, we expect to achieve our target due to sales fromsecond-half orders in Taiwan.
(Unit: ¥100 million)
Sales Overseas
by Region

Sales(Domestic/Overseas)
1,200

50%

922

1,000

960

970

241

250

169

61

60

50

76

40%

811

792

800

192

169

241

250

225

192
30%

23.2%

600

23.7%
400

618

21.5%

622

26.1%

26.0%

681

710

20%

745

62
20

55

65

45

102

125

125

Mar-19Mar-20Plan

Mar-20
Forecast

51
10%

109

200

0

225

67

0%

Mar-17Mar-18Domestic

Mar-19OverseasMar-20Plan

Mar-20
Forecast

Overseas Ratio

Mar-17Mar-18

TaiwanChina

SE Asia/Other
15

Full-Year Forecast: Sales by Segment/Customer
Water Treatment Engineering
Service Solutions performance will be strong despite a delay in electronics
industry investment recovery.
Electronics Industry: Year-on-year growth is expected for both Plant and Service Solutions,primarily domestically.
General Industry: Performance will be strong for large-scale Service Solutions projects, sparking
a recovery surpassing the plan and essentially matching the level of the preceding year.
Electric Power/Water Supply and Sewage: Steady performance is expected, primarily for(Unit: ¥100 million)
Service Solutions domestically.
Sales by Segment

Sales by Customer

900

800

700

600

641
308

500

614

738

770

770

780

373

410

390

101
247

110

115

230

245

52.8%

55.8%

53.8%

390

430

420

Mar-19Mar-20Plan

Mar-20
Forecast

90%

80%

70%

283

52.0%

53.7%

641

614

119
266

112
234

39.8%

43.3%

60%

50%

400

738

100%

780

49.3%

300

46.8%

50.0%

40%

30%

200

333

330

364

360

390

20%

255

266

Mar-17Mar-18

100
10%

0

0%

Mar-17Mar-18Service Solutions

Mar-19Plant

Mar-20Plan

Mar-20
Forecast

Service Solutions Ratio

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

16Full-Year Forecast: Orders by Segment/Customer
Electronics Industry
Orders are expected to recover in the second half.
Orders slowed in the first half year on year, primarily overseas, and versus the plan.
With a recovery in the second half in large-scale investment domestically and in Taiwan, orders are
expected to surpass the second-half peak of the preceding year.
While orders are expected to fall short of the figures for the preceding year, they are forecast to
surpass this year’s initial plan.

（Unit: ¥100 million）

Electronics Industry Orders(1st half vs. 2nd half)

400

Electronics Industry Orders
600

350

261

300

227

250

226

100

225
103

200

150

284

115

106

50

75

140
95

95

39
120

158
92

80

342

400

175

134

488
500

217

420

190

185

210

235

Mar-20 Plan

Mar-20
Forecast

237

300

135

400

146

200

44
130

144

118
100

90

99

0

196

250

0

1st Half

2nd Half

FY 2017

1st Half

2nd Half

FY 2018

Domestic

1st Half

2nd Half

FY 2019 Plan

Overseas

1st Half

2nd Half

Mar-17Mar-18Mar-19FY 2019
Forecast

Domestic

Overseas17Full-Year Forecast: Sales by Segment/Customer
Electronics Industry
Full-year sales are expected to essentially meet the initial plan.
Domestic: In addition to Plant sales through orders from the preceding year, Service Solutions
performance will be strong.
Overseas: In spite of a decrease in the first half due to a slowdown in investment, sales will
improve in the second half due to a recovery in investment in Taiwan.
(Unit: ¥100 million)

Electronics Industry Sales

Electronics Industry Sales(1st half vs. 2nd half)

400

350

500

430

420

195

175

204

235

245

Mar-19Mar-20 Plan

Mar-20
Forecast

390

450
300

400

220

250

200

152
150

114

59

210

220

169
68

222

197

350

300

117

100

95

81

255

266

133

116

186

250

93

100

200

150

56
50

57

92

101

2nd Half

1st Half

103

110

125

141

100

103
50

122

150

Mar-17Mar-1800

1st Half

FY 2017

2nd Half

FY 2018

Domestic

1st Half

2nd Half

FY 2019 Plan

Overseas

1st Half

2nd Half

FY 2019
Forecast

Domestic

Overseas
18

Full-Year Forecast: Sales by Segment/Customer
Performance Products
Performance in all divisions will be strong.
Water Treatment Chemicals: Increased sales are planned for the electronics industry due
to fortified sales activities, primarily overseas.
Standard Equipment/Filters: Increased sales are planned through product renewal and thedevelopment of the Chinese market.
Food Products: Sales are expected to be strong, primarily domestically.

(Unit: ¥100 million)

Sales by Segment

184

190

190

169

177

53

54

54

54

54

54

58

61

63

63

60

64

69

73

73

Mar-17Mar-18Mar-19Mar-20Plan

Mar-20
Forecast

Food ProductsStandard Equipment/Filters

Water Treatment Chemicals
19Comparative Analysis of Full-Year Operating Profit Forecast
Full-year operating profit is expected to increase ¥1.9 billion year-on-year to¥8.5 billion.
Profit is expected to improve, centered on Water Treatment Engineering, due to improved
Plant profitability and expansion in Service Solutions.
SG&A will increase due to the strengthening of structures and R&D.
Operating Profit (year on year)
Sales increase

85

+10

65

+20

13

(Unit: ¥100 million)

+2

- 10

14

Profit marginchange+1.9 billion

51

03/2019

Water
Treatment
Engineering

Performance
Products

SG&A

71

03/2020■ Water Treatment Engineering ■ Performance Products
20Full-Year Operating Profit Trends
Aim to achieve record high through expansion of sales and improvement in
profitability.
In addition to the effect of the increase driven by sales recorded from Plant orders from thepreceding year and expansion in Service Solutions, improvement in Plant profitability will also
contribute.
We will attempt to achieve our highest full-year profit in 13 years.
（Unit: ¥100 million）

Full-Year Operating Profit Trends

85

41
17
5.1%
24
Mar-17

38

15
4.8%
23
Mar-18Water Treatment Engineering

65

66

13

14

14
8.8%

7.1%
51

6.9%
52

Mar-19Mar-20 Plan

Performance Products

71

Mar-20 Forecast

Operating Profit Ratio
21

Full-Year Order and Sales Trends■ Despite the first-half slowdown, sales will improve in the second half due to the recovery inelectronic industry investment.
■ Despite orders surpassing expectations, the effect of second-half sales will be limited.
■ Orders for which sales will be reflected from next period onward will surpass figures from thepreceding period.
(Unit: ¥100 million)

Order and Sales Trends

Full-Year Order Trends
578

1,038

1,000
970
960
922 950

880

811
740

538
484

500
450

792
593
483

Mar-18

Oders

Sales

421

623

383
357

395

Mar-20
Forecast

Mar-17Mar-18583

392

Mar-17500

Mar-19Mar-20Plan
Order balance

1st half

Mar-19Mar-20Plan

Mar-20
Forecast

2st half

22

Key Indicators
Unit: ¥100 million

FY ended
03/2019

March 2020
Plan

March 2020
Forecast

635

800

800

1,823

2,100

2,100

920

1,100

1,100

13,65915,00015,000No. of employees

2,186

2,200

2,250

Annual dividend

73

78

94

8.4

7.8

9.8

Capital expenditures(million yen)

R&D expenses(million yen)

Depreciation(million yen)Interest-bearing debt
(million yen)

(yen)

ROE
(％)

23

Interim and Year-End Dividends■ Given the first-half earnings situation, interim and year-end dividends will increase.
■ While maintaining our basic policy of delivering stable, continuous dividends, we will
work to distribute profits in accordance with our earnings situation.

(Unit: JPY)
Commemorative dividend
Dividend

94( ) Consolidated dividend payout ratio

73
5

40

45

50
(23.2%)

53(18.8%)(21.9%)

78(19.2%)(20.3%)

Interim/year-end¥47

Interim/year-end¥39(20.8%)(42.4%)

Mar-15Mar-16

Mar-17Mar-18Mar-19Mar-20 Plan

Mar-20 Forecast

24

Contents
１．First-Half Results for Fiscal Year Ending March 2020
２．Full-Year Forecast for Fiscal Year Ending March 2020
３．Medium-Term Management Plan

４．Company Overview

25Medium-Term Management Plan: Earnings Outlook
Profit is expected to continue improving, and profit for March 2020 isforecast to surpass the medium-term management plan target.
Strong performance in orders is expected to support profit, and earnings improvement
measures are seen bearing fruit.
Electronics industry performance is forecast to surpass expectations. Sales will increase,centered on Plant business.
The performance of Service Solutions and Performance Products will be steady, and new
businesses are in the preparation stage.
(Unit: ¥100 million)

Sales and Operating Profit forecast

922

960

970

970

184

190

190

200

1,000
10
210

738

770

780

770

780

65

66

(7.1%)(6.9%)

19-MarMar-20 Plan

85

Mar-20 Forecast

70

68(7.0%)(7.0%)(Medium-Term
Management Plan)

Mar-22 (Medium-Term
Management Plan)

Mar-21 Plan

Medium-Term(8.8%)

Management Plan
New Businesses

Performance Products

Water Treatment Engineering

Operating Profit

26Medium-Term Management Plan: Progress
Expansion ofElectronics
Industry・Large-scale capital investment activity driven by expectations for recovery indemand for smartphones and data centers in line with the development of 5G・Expectations for investment recovery in China from next year onward due tomovement in some investment plans, despite uncertainty
・Fortification of R&D investment for cutting-edge semiconductors as
miniaturization proceeds

Strengthening of
Performance
Products

・Continued product renewal, new productdevelopment
・Fortification of development of Chinese market(Standard Products), and Taiwanese, Chinese, andAsian markets (Water Treatment Chemicals)

Creation of New
Businesses

・Demand expands for solvent purification for
cutting-edge semiconductors
・Undertake demonstration testing for purification
facilities for biopharmaceuticals and lithium-ion batteries
with customers and research institutes
・Continue preparation for development in U.S. of cuttingedge semiconductors and advanced sewage treatment
27

Medium-Term Management Plan: Additional Initiatives
In addition to priority issues – Electronics Industry, Performance Products and New
Businesses – initiatives will be strengthened to enhance production efficiency and Service
Solutions.

Enhancement of
Production Efficiency

・Begin hiring and cultivating foreign engineers toward the establishment of a
global engineering center which would aim to enhanced production capacity andstrengthen technological capability
・Promote enhanced work efficiency companywide, including the operation of a
new ERP system**A backbone system that enables centralized management of information on management resources.

※経営資源情報を一元管理する統合基幹業務システム

Strengthening ofService Solutions

・Promote the strengthening of the Service Solutions structure overseas⇒ China: Establish a Service Solutions structure for electronics industry⇒ ASEAN: Strengthen Service Solutions for general industry and electric
power

28

Medium-Term Management Plan: Progress Topics
Promoting Production and Work Efficiency
・Use of Information and Communications
Technology (ICT)We have introduced tablet computers to enhance theefficiency of work performed at customers’ factories
such as the construction of water treatment facilities
and facility diagnosis. Drawings, technical information,and system status can be shared instantly, reducing
the time required to perform work.

・Introduction of Smart Glass

We have introduced smart glass for use in plant
construction and facility diagnosis. The ability toshare local information with remote locations enables
rapid on-site support. We will expand the range ofapplication to include sharing information withcustomers and usage overseas.

29

Contents
１．First-Half Results for Fiscal Year Ending March 2020
２．Full-Year Forecast for Fiscal Year Ending March 2020
３．Medium-Term Management Plan

４．Company Overview

30Company Overview
Corporate nameORGANO CORPORATIONHead office

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

EstablishedMay 1, 1946

Representative

Masaki Uchikura, President

Capitalization¥8,225,499,312

No. of employees

2,249 (consolidated) as of September 30, 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)

31

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

32

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
33

Organo Group Businesses
Water Treatment Engineering
Service Solutions¥36.4 billion

Plant¥37.3 billion
Year Ended
March 2019¥73.8 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¥18.4 billion■ Food processing
agents■ Food ingredients■ Pure and ultrapure
water equipment■ Water purification filters

Water Treatment
Chemicals¥6.9 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 food34

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.

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