Organo Corporation
Report on the Financial Results for the Term
Ended March 31, 2014

May 16, 2014

1

Report on the Financial Results of FY2013
and Projection for FY2014

Hiroyuki Uchida,President

2

The Consolidated Organo Group (Japan)*1 : Only Balance Sheet is consolidated for FY2013*2 : Merged by Organo Corporation on April 1, 2014

Organo Hokkaido
Corporation *2

Organo Chubu
Corporation *2
Organo Kansai
Corporation *2
Organo Kyushu
Corporation *2

Organo Tohoku
Corporation *2

Organo Food TechCorporation
Organo Corporation
Organo Tokyo Corporation *2
Organo Plant Service Corporation
Organo Acty Corporation
Organo Eco Tech Corporation *13The Consolidated Organo Group (Overseas)
Organo (Suzhou) Water
Treatment Co., Ltd.
< China >Organo (Thailand)Co., Ltd.
< Thailand >Organo (Asia)
Sdn. Bhd.
< Malaysia >Ref ; Non-consolidated Group
Organo (Singapore) Pte Ltd. <Singapore>
Organo (Vietnam) Co., Ltd. <Vietnam>
PT Lautan Organo Water <Indonesia>

Organo Technology
Co., Ltd.
< Taiwan >4

Financial Results for FY2013 (Consolidated)(millions of yen)

03/2013
Result03/2014
Rev ised Plan

03/2014
ResultY ear on Y ear
ChangeChange f rom
Rev ised Plan

Orders Receiv ed

60,23875,00065,501+ 5,263

ᇞ 9,499

Net Sales

66,71867,00062,096

ᇞ 4,622

ᇞ 4,904

Gross Prof it

16,846

14,20014,553

ᇞ 2,293+ 353

(%)

25.3

21.2

23.4

ᇞ 1.9 pt

+ 2.2 pt

SG&A

13,34813,70013,720+ 372+ 20Operating Income

3,498

500

833

ᇞ 2,665+ 333

Ordinary Income

3,909

550

1,170

ᇞ 2,739+ 620

Net Income

2,564

350

664

ᇞ 1,900+ 314
5

Financial Results of FY2013(by Business Segment)
Orders Received(millions of yen)

70,00065,501
60,238

19,68650,000Operating Income(millions of yen)

70,00060,000Net Sales

19,452

Year onYear
Change+ 234(millions of yen)
5,000

66,71862,09660,00019,24919,98350,000Year onYear
Change+ 734

4,000

3,498
3,000

1,177

40,00040,0002,000

30,00020,00040,78645,814

Year onYear
Change+ 5,028

47,46820,00010,00010,0000003/201303/2014833

30,00042,112

Year onYear
Change∆ 5,356

1,000

2,321
1,524

0-691
-1,00003/2013■ Water Treatment Engineering

03/201403/2013

Year onYear
Change+ 347
Year onYear
Change∆ 3,01203/2014■ Functional Product[Water Treatment Engineering] Orders increased, primarily due to growth in overseas business, plant business for domestic
pharmaceuticals and food industries, and the wastewater business segment. Sales reduced mainly due to decline in the domestic
power plant segment and the postponement of projects in general industries. Operating income decreased mainly due to changes inthe sales mix, and lower profitability.
[Functional products] Both orders and sales remained unchanged from the previous year. Operating income increased, primarily
due to an improvement in profitability.

6

Sales by Business Segment and Customer（ Water Treatment Engineering ）Sales by Business Area
(millions of yen)

Sales by Customer

47,468(millions of yen)

47,46842,112

42,11240,00040,00029,25625,03027,745

Year onYear
Change∆ 4.226

20,00022,837

Year onYear
Change∆ 4,908

20,00018,21317,083

Year onYear
Change∆ 1,130

019,723

19,27503/201303/2014

Year onYear
Change∆ 448

003/2013
Plant Business

03/2014
Solution Business[Plant Business] Sales declined, primarily due to a drop in
the sale of plants for the domestic electronics industry.
[Solution Business] Sales declined, given the impact ofdecline in the domestic power plant segment.

Electronics Industry

General Industry[Electronics Industry] Sales declined, largely due to adecline in Japan, despite an increase in both plant andmaintenance in overseas.
[General Industry] Sales decreased as a result of a decline
in the domestic power plant segment.

7

Sales by Region
Sales by Overseas Region

Domestic and Overseas Sales（millions of yen）

（millions of yen）

80,00016,00068,50270,00061,097

8,671

60,00014,09066,718

10,792

9,567

62,096

14,09050,000Year onYear
Change+ 3,298

59,83140,00055,926

51,530

15.7%

22.7%

16.2%

20,0008,352Year onYear
Change+ 1,313

3,745

Year onYear
Change+ 1,510

12,00010,792
10,000

9,567

1,314

48,00630,0001,993

Year onYear
Change+ 474

14,0008,000

Year onYear
Change∆ 7,920

1,519
8,672

1,738

6,000

7,039

5,801
4,818

4,000

12.7%
10,0002,000

003/2011

Domestic

03/2012

Overseas

03/201303/2014

Overseas Ratio

2,452

2,116

2,234

03/201103/201203/201303/2014Southeast Asia

TaiwanChina

08

Analysis of Operating Income of FY 2013 (by Factor)(millions of yen)

3,498

Decrease inSales∆ 1,169

Profit Ratio
Decrease∆ 1,126
SG&AIncrease∆ 372833

03/201303/2014*The decrease in sales and profit ratio decrease are calculated using the gross profit margin.
9Plan for the Term Ending March 2015
(millions of yen)

03/2014 (Result)
Full Y ear

03/2015 (Plan)
Full Y ear

Y ear on Y ear
ChangeOrders Receiv ed

65,50175,000+ 9,499

Net Sales

62,09670,000+ 7,904

Gross Prof it

14,553

15,400＋ 847

(%)

23.4

22.0

ᇞ 1.4pt

SG&A

13,72013,900+ 180

Operating Income

833

1,500＋ 667

Ordinary Income

1,1701,400＋ 230(%)

(1.9)

(2.0)

+ 0.1pt

Net Income

664

900＋ 236
10Plan for the Term Ending March 2015
( by Business Segment )Orders Received

Net Sales(millions of yen)(millions of yen)

80,00070,00065,501

21,50019,686

Year onYear
Change+ 1,814

60,00040,00040,00045,81453,50070,00062,09650,000Year onYear
Change+ 7,686

3,000

70,00050,00030,000(millions of yen)

80,00075,00060,00020,000Operating Income

21,50019,98330,00020,00042,112

48,500Year onYear
2,000
Change+ 1,517

Year onYear
Change+ 6,388

1,0001,52400003/2014

03/2015 (Plan)

1,500

1,700-200-691

10,00010,00083303/2014■ Water Treatment Engineering

03/2015 (plan)

Year onYear
Change+ 176
Year onYear
Change+ 491-1,00003/2014

03/2015 (Plan)■ Functional Product[Water Treatment Engineering] Orders are expected to increase of plants for general industry both in Japan and overseas and forthe domestic electronics industry. Sales are expected to increase mainly due to growth in plants for the domestic electronics
industry, pharmaceutical and food industries, and the wastewater business segment. Operating income is expected to increase dueto sales expansion.
[Functional Product] Sales are expected to increase with a recovery in the operation ratio of customers’ factories, and new productdevelopment and product renewals.

11

Sales by Business Area and Customer( Water Treatment Engineering )Sales by Business Area

Sales by Customer(millions of yen)(millions of yen)
48,50050,00048,50050,00042,112

42,112
25,71025,030Year onYear
Change+ 680

28,70022,837

Year onYear
Change+ 5,863

25,00025,00022,79017,083

Year onYear
Change+ 5,707

19,27519,80003/201403/2015（Plan）

Year onYear
Change+ 5250003/2014

Solution Business

03/2015（Plan）

Plant Business[Plant Business] Sales are expected to increase mainly as a resultof growth of plants for the domestic electronics industry, plants for thepharmaceuticals and food industries, and the wastewater businesssegment.
[Solution Business] Sales are predicted to increase largely due togrowth in maintenance for general industries both in Japan andoverseas.

General Industry

Electronics Industry[Electronics Industry] Sales are expected to grow due togrowth in domestic plants.
[General Industry] Sales are expected to increase,primarily due to growth in plants for the domestic
pharmaceuticals industry and wastewater businesssegment, and growth in overseas thermal power stations
and plants for the food industry.

12

Sales by Region
Domestic and Overseas Sales

Sales by Overseas Region(millions of yen)(millions of yen)
70,00068,502
8,671

66,71870,00062,096

10,792

14,20014,09059,831

15,000Year onYear
Change+ 111

14,200

1,993

2,400

Year onYear
Change+ 407

6,500
8,352

Year onYear
Change∆ 1,852

5,300
3,745

Year onYear
Change+ 1,555

10,79255,80055,926

14,0891,519

10,000

8,672

22.7%
20.3%
35,0001,738Year onYear
Change+ 7,793

48,006
16.2%

7,039
5,000

12.7%

003/2012

Domestic

03/2013

Overseas

03/201403/2015 (plan)

Overseas Ratio

4,818

2,116

2,23403/2012

03/20130Southeast Asia

03/2014

Taiwan03/2015 (plan)

China

13

Analysis of Operating Income of FY 2014 (by Factor)(millions of yen)

Decrease inSales+ 1,852

Profit Ratio
Decrease∆ 1,005

SG&AIncrease∆ 180
1,500833

03/201403/2015*The decrease in sales and profit ratio decrease are calculated using the gross profit margin.

14

Progress of Orders Received and Net Sales
from the Electronics Industry
Orders Received

Net Sales(millions of yen)(millions of yen)

30,00030,00019,08820,00019,745

21,14921,00017.354
9,009

9,240

8,817

10,00019,27519,800

6,804

8,100
4,871

19,72320,00010,0338,300

10,00012,483

10,07910,50503/201303/2014

Domestic

Overseas

12,900003/2012

03/2015 (Plan)

14,345

11,50010,906

9,242

03/201303/2014003/2012

Domestic

Overseas

03/2015 (plan)15

Progress of Orders Received,
Net Sales and Orders on Hand (Consolidated)
Orders on Hand
(millions of yen)Orders received/Net sales(millions of yen)
100,000

70,000Orders Received

Net Sales

Orders on Hand
60,00080,00075,00068,041 68,502

66,71860,23865,50170,00062,09660,00044,20040,14550,00040,00039,212
34,64530,00040,00020,00020,00010,00000
03/201203/201303/201403/2015 (plan)

16

Balance Sheet
AssetsCash on Hand
and Deposits

Liabilities and Net Assets(millions of yen)

85,30985,3098,809

76,852Current
Liabilities

10,268(+ 1,459)

Current Assets andOthers

41,41576,852

31,991
24,742(∆ 7,249)

Long-term
Liabilities

51,862(millions of yen)

8,110

7,857
(∆ 253)(∆ 10,447)

Net Assets
45,20744,252(∆ 955)

03/201303/2014

Fixed Assets

24,63725,16903/201303/2014(+ 532)17

Major Indicators (Consolidated)(millions of yen)

FY2014 Full Year
(Plan)FY2013 Full Year
Capital Investment

358

800

TechnologicalDevelopment Costs

1,490

1,600

Depreciation

1,065

1,000

Interest-bearing
Borrowings

10,230

11,200

Number of Employees

1,896

1,910

Dividend per Share(yen/year)

8818

Medium-term Management Policy ofOrgano Corporation Group19

Corporate Concept/Philosophy and Management Vision for
the Current Medium-term Management Policy
Corporate Concept“Ecologically Clean”

Corporate Philosophy

Organo Group looks ahead to the future of
the earth and creates the value of the waterwith "heart" and "technology."

Medium-termManagement Vision“One Stop Solutions”

Develop into a corporate group capable of providing “One StopSolutions” to meet various our customers’ needs in the water
treatment field.
20

Resetting the Medium-Term Management Policy
The market environment has changed significantly compared with assumptions made on theformulation of the current medium-term management policy, with the streamlining of domestic
production bases or their transfer overseas in various industries.

On April 1, 2014, Organo reorganized the Group, mainly by merging 7 regional sales headquarters,
which are the Organo Corporation’s wholly owned subsidiaries, and strengthening and expanding
Organo Eco Techno Corporation through the consolidation of wastewater treatment technologies,
with the aim of focusing management resources and improving efficiency as well as enhancing
market competitiveness.

In light of organizational restructure, we have decided to review the numericaltargets under the current medium-term management policy.
We will strive for an early realization of the effects of group reorganization andwill reset new numerical targets from FY2015.
21

FY2014 Priority Issues◇ Strengthen sales capabilities by flattening sales organization.
◇ Expand general industry segment and wastewater business by strengthening technicalcapabilities of Organo Eco Techno Corporation.
◇ Expand and improve profitability of functional product business and overseas business.
◇ Strengthen construction capabilities and cost competitiveness.

Development, manufacturing, sales and maintenance divisions will work
together, focusing on the transition of the business portfolio, improvement ofbusiness efficiency, cost reductions, and the generation of stable earnings.
22

Major Efforts for Expansion of Domestic Business◇ Strengthen the pure water/wastewater business for the general industries, including
pharmaceuticals, food, and chemicals.
◇ Increase orders received through cooperation with Meidensha Corporation in thedomestic water supply business.
◇ Secure orders in the electronics industry segment.
◇ Respond to coal and LNG thermal power plant projects as alternative energy
resources in the power plant segment.
◇ Further expand solution business including reconstruction and maintenance.
◇ Continue new product development and product renewals in the functional productbusiness.
◇ Expand the water treatment chemicals business through cooperation with Katayama
Nalco Inc.
◇ Strengthen cost reduction and construction capabilities.
23

Major Efforts for Expansion of Overseas Business◇ Strengthen business promotion targeting non-Japanese customers.
◇ Promote technology and product development according to market characteristics ofthe region through use of the ASEAN Engineering Center.
◇ Strengthen purchasing capability and promote cost reduction through the ASIA
Procurement Center.
◇ Expand the business in South East Asian countries by making subsidiaries in Malaysia
and Thailand wholly owned subsidiaries and increasing capital of subsidiaries inMalaysia and Indonesia.
◇ Consider alliances and M&A for expanding and strengthening of overseas businesses.

24Organo Corporation
Corporate Planning Department
1-2-8, Shinsuna, Koto-ku, Tokyo 136-8631, Japan
TEL +81-3-5635-5111
FAX +81-3-3699-7240
URL http://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 a variety of factors.

25