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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, 2020
<under Japanese GAAP>
November 5, 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:
November 14, 2019
Scheduled date to commence dividend payments:
December 9, 2019
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, 2020
(from April 1, 2019 to September 30, 2019)(1) Consolidated operating results (cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen% Millions of yen%
Six months ended
September 30, 201946,675
20.4
5,444
260.6
September 30, 2018
38,782
21.2
1,509
–
Note:
Comprehensive income: Six months ended September 30, 2019
Six months ended September 30, 2018

Basic earnings
per share
Six months ended
September 30, 2019
September 30, 2018

Profit attributable toowners of parent

Ordinary profit
Millions of yen%

Millions of yen

5,317
243.1
1,549
–
¥ 3,498 million [329.0%]¥ 815 million [–%]

3,640
916

%

297.4
–

Diluted earnings
per shareYen

318.51
79.69

Yen

–
–

(2) Consolidated financial position
Total assets
Millions of yen
As ofSeptember 30, 2019
99,798March 31, 2019
101,257(Reference) Equity: As of September 30, 2019¥57,746 million

Net assets

Equity-to-asset ratio

Millions of yen

57,87454,795
As of March 31, 2019

%

57.9
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

–

29.00

–

47.00

Fiscal year-end

Yen

Total

Yen

–

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

Yen

44.00

73.00

47.00

94.00

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 yenFiscal year ending
97,000
5.1
8,500
29.6
8,350
March 31, 2020
Note:
Revisions to the earnings forecasts most recently announced: None

%

27.7

Millionsof yen

5,600

Basic
earnings
per share

%

Yen

25.8

489.99

* 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 10 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, 201911,589,925 shares

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

135,575 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 six months ended September 30, 201911,428,740 shares

For the six months ended September 30, 2018

11,494,315 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 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 ..............................................5(1) Consolidated balance sheet ................................................................................................................ 5(2) Consolidated statement of income and consolidated statement of comprehensive income.......... 7
Consolidated statement of income (cumulative) ....................................................................................7
Consolidated statement of comprehensive income (cumulative) ..........................................................8(3) Consolidated statement of cash flows ............................................................................................... 9(4) Notes to quarterly consolidated financial statements .................................................................... 10
Notes on premise of going concern ........................................................................................................10
Notes on substantial changes in the amount of shareholders’ equity .................................................10
Application of special accounting for preparing the quarterly consolidated financial statements .10
Segment information, etc. ...................................................................................................................... 11-1-

1. Qualitative information regarding financial results for the first six months(1) Explanation regarding operating results
In the Japanese economy during the six months ended September 30, 2019, despite the continuing trendof moderate recovery against the backdrop of solid movement in capital investment and production,
uncertainty over the future continued to deepen, mainly because of developing stagnation, particularlyin the manufacturing sector as a result of the slowdown in exports caused by the US-China trade war,and the reporting that the growth rate of the global economy is expected to weaken.
The business environment surrounding the Organo Group showed a building strength in production andcapital investment in the general industrial field in Japan. However, in terms of large-scale capital
investment in the electronics field, both in Japan and overseas, there is a significant slowing down of
the capital investment that had been progressing vibrantly until last year because the market has been
deteriorating, amid a lull in demand for smartphones and data centers, and companies have been taking
a more cautious approach to investment in light of future uncertainties such as the US-China trade war.
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 six months ended September 30, 2019 are as follows. Orders
received decreased by 15.7% year on year to ¥42,160 million, net sales increased by 20.4% year on
year to ¥46,675 million, operating profit increased by 260.6% year on year to ¥5,444 million, ordinary
profit increased by 243.1% year on year to ¥5,317 million, and profit attributable to owners of parent
increased by 297.4% year on year to ¥3,640 million.
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 six months ended September 30,
2019 are made based on the classifications following the changes.
[Water Treatment Engineering Business Unit]
In the Water Treatment Engineering Business Unit, although capital investments were solid in thegeneral industrial field mainly in Japan, orders received decreased by 19.0% year on year to ¥33,052
million because orders received in the electronics field dropped from those in the same period of theprevious fiscal year during which orders for large semiconductor-related projects were received inJapan and abroad. Meanwhile, net sales increased by 25.7% year on year to ¥37,351 million due to arise in net sales of service solutions including maintenance and proposals for renovation of facilities in
addition to favorable performance in construction for large semiconductor-related projects for which
orders were received up until last year in electronics field, as well as sales expansion mainly forsolutions services in the general industrial field and the electric power/water supply and sewage fields.
On the profit side, in addition to the effect of increased sales as a result of sales of large projects,
improvement in the profitability of the Plant Division due to various profit-improvement measures andcost-cutting initiatives, sales expansion in the Service Solutions Division, and other factors led to
improvement in the profit ratio. Consequently, operating profit increased by 544.0% year on year to¥4,788 million.
[Performance Products Business Unit]
In the Performance Products Business Unit, orders received decreased by 1.3% year on year to ¥9,108
million and net sales increased by 2.7% to ¥9,323 million, reflecting strong sales of standard equipment
and filters for the general industrial field and electronics field, as well as various types of water
treatment chemicals including wastewater treatment chemicals and cooling water treatment chemicals,
backed by strong production and capital investment in Japan. However, on the profit side, development-2-

investment in new products and technologies increased, as did business strengthening costs for the
future such as expansion of our production and sales network aimed at expanding overseas
development. Consequently, operating profit decreased by 14.4% year on year to ¥655 million.
(2) Explanation regarding financial position
Assets, liabilities and net assets
AssetsAssets as of September 30, 2019 amounted to ¥99,798 million, a decline of ¥1,459 million from theprevious fiscal year end. This was due mainly to a decline in cash and deposits of ¥2,885 million and a
decline in investments in leases of ¥946 million, despite an increase of ¥2,043 million in inventories
mainly in work in process.
Liabilities
Liabilities as of September 30, 2019 amounted to ¥41,924 million, a decrease of ¥4,537 million fromthe previous fiscal year end. This was due mainly to a decline in notes and accounts payable - trade of¥3,211 million and a decline in short-term borrowings of ¥2,924 million, despite an increase of ¥2,194
million in long-term borrowings.
Net Assets
Net assets as of September 30, 2019 amounted to ¥57,874 million, an increase of ¥3,078 million fromthe previous fiscal year end. This was mainly due to an increase of ¥3,133 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, 2019 decreased by ¥2,885 million
from the previous fiscal year end to ¥8,391 million.
Cash flows from operating activities
Net cash used in operating activities for the six months ended September 30, 2019 was ¥916 million.
This was mainly because there was an increase in cash due to profit before income taxes of ¥5,316
million while there was a decrease in cash due to an increase in inventories of ¥2,052 million, adecrease in trade payables of ¥3,070 million and income taxes paid of ¥1,657 million. (Net cash of¥977 million was provided in the six months ended September 30, 2018.)
Cash flows from investing activities
Net cash used in investing activities for the six months ended September 30, 2019 was ¥612 million.
This was due mainly to purchase of property, plant and equipment of ¥573 million. (Net cash of ¥147
million was used in the six months ended September 30, 2018.)
Cash flows from financing activities
Net cash used in financing activities for the six months ended September 30, 2019 was ¥1,217 million.
This was due mainly to a net decrease in short-term borrowings of ¥3,092 million, repayments of longterm borrowings of ¥605 million and dividends paid of ¥506 million, despite an increase in cash
stemming from proceeds from long-term borrowings of ¥3,000 million. (Net cash of ¥1,488 million
was used in the six months ended September 30, 2018.)(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements
Regarding the forecasts for the fiscal year ending March 31, 2020, we expect results to be at levels
exceeding the initial forecast for all of orders received, net sales, and the profit categories. For orders
received, although there has been a continued cautious approach to large-scale capital investment since
the beginning of the year in the electronics field, large-scale investment related to semiconductors has
been planned in Taiwan and Japan in the second half of the fiscal year. Therefore, we forecast orders
received of ¥100,000 million (decrease of 3.7% year on year). For net sales, after taking into accountnot only the construction progress of large projects related to the electronics field for which orders werereceived up until last year, but also the sales growth expected to be provided by the Service Solutions
Division including maintenance and renovation of facilities, particularly for the electronics field andthe general industrial field, and the solid performance expected from the Performance Products
Business Unit, such as from standard equipment and filters and various types of water treatment
chemicals, we forecast net sales of ¥97,000 million (increase of 5.1%).
-3-

As for profits, we are expecting to improve our profit margin by realizing improved profitability in the
Plant Division in the Water Treatment Engineering Business Unit and expanding sales in the Service
Solutions Division, such as from maintenance and proposals for renovation of facilities. Consequently,
we expect operating profit of ¥8,500 million (up 29.6%), ordinary profit of ¥8,350 million (up 27.7%),
and profit attributable to owners of parent of ¥5,600 million (up 25.8%).

-4-

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-5-

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

8,391
40,545
12,628
5,198
4,302
1,404
2,291
(139)
74,622

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

17,862(12,480)
5,382
5,615
(4,948)667
12,287198
4,940(4,191)
748
19,284
1,105

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

1,702
2,702
666
(285)
4,786
25,176
99,798(Millions of yen)

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-6-

As of March 31, 2019

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

15,305
10,534
1,627
1,940
1,368
337
100

95

48

3,242
39,9302,029
33,292

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

2,395
9
6,153
73
8,631
41,9248,225
7,508
39,967(629)
55,071

8,225
7,508
43,100(531)
58,303

273

256

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

(0)
(362)
(450)
(556)
127
57,874
99,798

(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

Six months
ended September 30, 2018
(From April 1, 2018 toSeptember 30, 2018)
38,782
29,421
9,361
7,851
1,509

Foreign exchange gains
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
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on abandonment of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-7-(Millions of yen)Six months
ended September 30, 2019
(From April 1, 2019 to
September 30, 2019)46,67532,883
13,792
8,348
5,444

8
14

20
13

10

–

42

111

27
103

41
187

34

69

–

119

10
17
63
1,549

80
45
314
5,317

1

0

–

4

1

4

1
1
1,549
637
912
(3)
916

5
5
5,316
1,675
3,640
0
3,640

Consolidated statement of comprehensive income (cumulative)

ProfitOther 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

Six months
ended September 30, 2018
(From April 1, 2018 toSeptember 30, 2018)
912

-8-

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

69
(0)
(226)
61

(16)
0
(168)
43

(0)

(1)

(96)
815

(142)
3,498

829

3,497

(14)

0

(3) Consolidated statement of cash flows
Six months
ended September 30, 2018
(From April 1, 2018 toSeptember 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of non-current assets
Loss on abandonment of non-current assets
Loss (gain) on sales of investment securities
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
Income taxes paid
Income taxes 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(Millions of yen)Six months
ended September 30, 2019
(From April 1, 2019 to
September 30, 2019)

1,549
438
98
88
(22)
34
(5)

5,316
557
270
5
(34)
69
48

(42)

(111)

(1)
1

(0)
5

–

(4)

3,948
886
(1,888)(2,250)
(921)
1,914
21
(35)
(976)
58
(4)
977

(560)
944
(2,052)(3,070)
(630)
754
45
(65)
(1,657)
3
3
(916)

(212)

(573)

1

0

(79)
(6)

(38)
(6)

–

5

150

0

–

(0)

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

(147)

(612)

(285)

(3,092)–

3,000

Repayments of long-term borrowings
Purchase of treasury shares
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

(600)
(271)
(322)
(9)
(1,488)

(605)
(2)
(506)
(11)
(1,217)

(68)

(138)

(726)
8,652
7,926

(2,885)
11,2768,391-9-

(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, 2019. 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.

- 10 -

Segment information, etc.
[Segment information]
I Six months ended September 30, 2018 (from April 1, 2018 to September 30, 2018)
1. Information relating to net sales, 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

29,707
0

9,074
159

38,782
159

–
(159)

38,782–

Total

29,7089,233

38,942(159)

38,782

Total

Adjustment

Segment profit
743
766
1,509
–
1,509
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, 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.

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 six months ended September 30, 2018 has been preparedaccording to the classification method after the changes.

- 11 -