オルガノ（6368） – 【Delayed】Financial Report for Fiscal Year Ended March 31, 2022

Financial Report for FiscalYear Ended March 31, 2022May 19, 2022Securities Code: 63681Contents１． FY ended 03/2022 Results ２． FY ending 03/2023 Plan３． Medium-term Management Plan４． Company Overview2Contents１． FY ended 03/2022 Results ２． FY ending 03/2023 Plan３． Medium-term Management Plan４． Company Overview3Overview of FY ended 03/2022 Results■Orders, sales, and operating income reached record highs.• Water Treatment Engineering business benefited from a series of large semiconductor-related projects in Japan and overseas.•Sales of water treatment chemicals and compact equipment were strong in the Performance Products business.(Unit: Million JPY)Orders135,698 19,581 116,116 94,563 18,336 100,000 19,000 76,227 81,000 ■ Water Treatment Engineering■ Performance ProductsSalesOperating Income112,069 19,346 100,638 18,213 103,000 19,000 9,579 1,113 10,850 1,763 82,424 92,723 84,000 8,466 9,087 03/2021Actual03/2022Actual03/2022Plan03/2021Actual03/2022Actual03/2022Plan03/2021Actual03/2022Actual03/2022Plan8,250 1,200 7,050 4FY ended 03/2022: Quarterly (three month) Results■Orders received remained high and sales progressed steadily in FY03/2022Increases or decreases in orders received are greatly influenced by trends in contracts for •large projects.Sales and profits tend to be concentrated in Q4 when delivery deadlines overlap.•Quarterly (three-month) performance trends (orders received, sales, order backlog, and operating income)50.559.164.159.358.854.372.667.875.066.571.176.170.561.839.030.621.830.726.227.522.720.13.619.526.522.620.629.123.827.028.025.719.516.937.231.923.422.422.321.627.627.81.41.31.34.12.42.04.32.34.72.02.80.31.32.419.416.90 Jun. 18 Sep. 18 Dec. 18 Mar. 19 Jun. 19 Sep. 19 Dec. 19 Mar. 20 Jun. 20 Sep. 20 Dec. 20 Mar. 21 Jun. 21 Sep. 21 Dec. 21 Mar. 22OrdersSalesOperating incomeOrder backlog(Unit: Billion JPY)84.286.441.235.534.25FY ended 03/2022: Overview by BusinessElectronicsLarge projects in China and the U.S. following those in Japan and Taiwan. •• Despite supply chain disruptions such as raw material shortages affecting some projects, overall construction progressed smoothly, and sales increased. General Industry•In addition to a decrease in large investments due to the pandemic, large plant project sales fell as resources were concentrated in the electronics industry.• Steady performance, especially in Service Solutions, and improved profitability.Electric Power/Water Supply and Sewage• Demand for renewal of facilities and Service Solutions.• Continued steady growth, especially in Japan.Performance Products• Water treatment chemicals increased sales of various treatment agents for the electronics industry.• Sales of compact deionized water equipment to medical and research institutions recovered, and sales of the new product Puric µ (Mu) got off to a strong start.Food business remained almost at the same level as the previous year.•6Results for Year Ending March 2022Unit: Million JPYMarch 2021ActualMarch 2022ActualInitial PlanYear-on-YearActual-to-Forecast94,563135,698100,000 +43.5%+35.7％100,638112,069103,000 +11.4%+8.8％Gross profit margin26,32626.2%28,51225.4%26,25025.5%+8.3%+8.6%16,74617,66218,000+5.5%-1.9%9,5799.5%9,90010,8509.7%11,5458,250 +13.3%+31.5%8.0%8,150 +16.6%+41.7%OrdersSales（%）SG&A1Operating incomeratio （%）Ordinary incomeProfit attributable to owners of the parent company7,0749,2106,500 +30.2%+41.7%Return on Equity (ROE) (%)11.112.99.3ーー1: SG&A = Selling, General, and Administrative expenses7Results for FY ended 03/2022: Analysis of Orders and Sales(Unit: Billion JPY)OrdersOrders+1.2135.6+0.5both domestically and internationally.+41.1YoY+39.8+35.6YoY+34.894.503/202103/2022ActualSales10003/2022Plan+1.1112+0.9+7.7+9YoY103+10.6+11.4YoY100.603/2021■ Performance Products ■ Electric Power / Water Supply 機能商品and Sewage03/2022Actual電力・上下水03/2022Plan電子産業■ ElectronicsUp ¥41.1 billion (43.5%) year on year• The electronic industry continues to expand with large investments • Performance Products recovered from the previous year’s decline.Surpassed plan by ¥35.6 billion (35.7%)• The electronics industry saw a greater-than-expected increase in the number and scale of projects.In Performance Products, water treatment chemicals and compact equipment performed well.Up ¥11.4 billion (11.4%) year on year• Sales in the electronics industry increased due to progress in construction work for large-scale projects.In Performance Products, water treatment chemicals and small equipment performed well.Surpassed plan by ¥9.0 billion (8.8%)• The electronics industry saw strong orders and increased sales.• Electric power, water and wastewater solutions were steady in Japan.Sales••8Results for FY ended 03/2022: Analysis of Orders■Orders received increased significantly both domestically and overseas, particularly in the electronics industry.Japan: Increased investment in power semiconductors and wafers, in addition to expansion projects by major customers.Overseas: In addition to the active Taiwanese market, orders for large-scale projects in China and the U.S. also contributed.NOTE: U.S. projects are included in Southeast Asia and others.(Unit: Billion JPY)Orders(Domestic/Overseas)Orders Overseasby region1,6001,4001,2001,000800600400200094.529.165.330.9%135.65877.642.8%120%110%100%90%80%70%60%50%40%30%20%10%0%10030.569.530.5%5813.916.927.129.13.26.918.903/202103/2022Actual03/2022Plan03/202103/2022Actual03/2022PlanDomesticOverseasOverseas RatioTaiwanChinaSE Asia/Other30.54.57.518.59Results for FY ended 03/2022: Analysis of Sales■Sales expanded mainly overseas, including semiconductor projects in Taiwan and China. Japan: Steady progress in construction of large semiconductor-related projects for which orders were received.Overseas: In addition to Taiwan, China saw substantial growth due to increased orders in the electronics industry.NOTE: U.S. projects are included in Southeast Asia and others.Sales(Domestic/Overseas)(Unit: Billion JPY)Sales Overseasby region1,2001,0008006004002000100.624.975.624.8%03/202111238.97310332.570.534.8%31.6%100%90%80%70%60%50%40%30%20%10%0%24.93.65.21638.96.113.319.532.54.57.520.503/2022Actual03/2022Plan03/202103/2022Actual03/2022PlanDomesticOverseasOverseas RatioTaiwanChinaSE Asia/Other10FY ended 03/2022: Sales by Segment and Customer Water Treatment Engineering■Water Treatment Engineering business expanded sales, mainly to plants in the electronics industry.•Plant sales from large semiconductor projects in Japan and overseas made a significant contribution.•Service Solutions remained strong in the general, electric power, and water and wastewater industries, in addition to the electronics industry.Sales by SegmentSales by Market(Unit: Billion JPY)82.43952.5%43.31,000900800700600500400300200100092.74749.2%45.68440.551.8%43.5120%110%100%90%80%70%60%50%40%30%20%10%0%82.410.624.157.8%47.692.711.422.962.8%58.28410.52360.1%50.503/202103/2022Actual03/2022Plan03/202103/2022Actual03/2022PlanService SolutionsPlantService Solutions RatioElectric Power/Water Supply and SewageGeneral IndustryElectronics IndustryElectronics Industry Ratio11FY ended 03/2022: Orders by Segment and Customer Electronics Industry■Significant growth in the electronics industry, mainly in Taiwan, China, the U.S., and other overseas markets.Japan: In addition to expansion projects by major customers, there was an increase in projects for power semiconductors, wafers, and more.Overseas: In addition to the main market of Taiwan, orders for large-scale semiconductor projects were received in China and the U.S.(Unit: Billion JPY)Electronics Industry: Orders (1st Half vs. 2nd Half)Electronics Industry: Orders600500400300200100032.31517.319.510.78.82314.9849.93811.825121322.5139.5900800700600500400300200100042.525.616.982.35329.21st Half2nd Half1st Half2nd Half1st Half2nd Half03/202103/202103/2022 Actual03/2022 Plan03/2022Actual03/2022PlanDomesticOverseasDomesticOverseas47.52522.512FY ended 03/2022: Sales by Segment and Customer Electronics Industry■Sales grew in Japan and overseas due to progress in construction of ordered projects.Japan: Construction of plant projects progressed steadily, and Service Solutions sales expanded.Overseas: Sales also increased due to a rise in orders despite the impact of process revisions in some projects.Electronics Industry: Sales (1st Half vs. 2nd Half)Electronics Industry: Sales(Unit: Billion JPY)35030025020015010050022.210.811.332.819.825.325.310.213.5261424.51315.111.8131211.5700600500400300200100047.621.126.458.233.324.850.52723.51st Half 2nd HALF 1st Half 2nd HALF 1st Half 2nd HALF03/202103/202103/2022 Actual03/2022 Plan03/2022Actual03/2022PlanDomesticOverseasDomesticOverseas13FY ended 03/2022: Sales by Segment and Customer Performance Products(Unit: Billion JPY)Performance Products: Sales18.256.26.919.34.96.77.7195.36.47.303/202103/2022Actual03/2022PlanFood ProductsStandard Water Treatment Equipment/FiltersWater Treatment ChemicalsWater Treatment Chemicals•In addition to strong sales to the electronics industry, customers’ production activities in the general industry were brisk, and sales of wastewater treatment chemicals and other products also grew.Standard Water Treatment Equipment/ Filters•Sales of compact pure water systems to medical and research institutions recovered from the previous year. Sales of Puric μ, a newly launched compact ultrapure water purification system, also got off to a good start.Food Products•Sales of products for the restaurant market recovered compared to the previous year, but sales of products for the home food market declined, resulting in performance similar to the previous year.14Results for FY ended 03/2022: Analysis of Operating Profit(Unit: Billion JPY)Operating income+1.2 YoY+2.510.8+0.44 +0.3+0.5-1.2-0.2-0.6Performance Products+0.6Water Treatment Engineering+0.69.5vs. plan+2.68.2+2.0-0.4+0.2 +0.44 -0.1Water Treatment Engineering+2.0Performance Products+0.503/2021Actual03/2022Actual03/2022PlanSales changeSG&A changeProfit margin changeUp ¥1.2 billion (13.3%) year on yearWater Treatment Engineering: Up ¥0.6 billion (7.3%)•Although the profit margin declined slightly due to an increase in the plant ratio, gross profit increased due to sales growth, while SG&A expenses increased mainly due to labor costs.Performance Products: Up ¥0.6 billion (58.4%)•In addition to sales recovery, sales of relatively profitable products were strong, and profit margins improved due to reductions in manufacturing costs.Surpassed plan by ¥2.6 billion (31.5%)Water Treatment Engineering: Up ¥2.0 billion (28.9%)•Orders exceeded expectations and sales also expanded, resulting in increased revenues compared to the plan.Performance Products: Up ¥0.5 billion (47.0%)Increase compared to plan due to sales •increase and profit margin improvement.15Contents１． FY ended 03/2022 Results ２． FY ending 03/2023 Plan３． Medium-term Management Plan４． Company Overview16Overview of FY ending 03/2023 Plan■Orders to decline slightly, but remain relatively high; sales and profits are expected to increase.Orders: Expected to decrease compared to the previous fiscal year, when there was a concentration of large-scale projects in Japan and overseas, but investment is expected to continue at a high level.Sales: Seen increasing along with operating income due to sales of orders received up to the previous fiscal year.(Unit: Million JPY)OrdersSalesOperating Income■ Water Treatment Engineering■ Performance Products135,698 19,581 125,000 20,000 125,000 20,000 10,850 1,763 11,700 1,800116,116 105,000 105,000 9,087 9,900112,069 19,346 92,723 03/202203/202303/202203/202303/202203/202317FY ending 03/2023 Plan: Medium- to Long-Term Performance■Backlog at a high level due to increased orders, sales growth expected in FY ending 03/2023.•Orders in the electronics industry, centered on semiconductors, have continued to grow from FY ended 03/2018.Large projects have a construction period of 1 to 1.5 years; orders received are a leading indicator of sales.•Orders received, sales, and order backlog(Unit: Billion JPY)135.6125.0125.0103.8104.992.296.594.5100.6112.086.486.459.367.861.868.068.560.266.740.134.665.562.039.277.868.776.478.774.081.188.079.248.746.648.339.203/201203/201303/201403/201503/201603/201703/201803/201903/202003/202103/202203/2023OrdersSalesOrder backlog18FY ending 03/2023 PlanOrdersSales(%)SG&A(%)(Unit: Million JPY)FY ended 03/2022FY ending 03/2023Year-on-Year1st HalfActualFull-yearActual1st HalfPlanFull-yearPlan1st HalfFull-year58,903135,69870,000125,000 +18.8％-7.9％50,001112,06960,000125,000 +20.0% +11.5％Gross profit margin12,40424.8％28,51225.4%13,00021.7%24.6%30,700 +4.8%+7.7%8,63217,6629,00019,000 +4.3%+7.6%Operating income ratio 3,7717.5%10,8509.7%4,0006.7%9.4%11,700 +6.1%+7.8%Ordinary income4,19311,5454,00011,700-4.6%+1.3%Profit attributable to owners of the parent Company2,6969,2102,8008,200 +3.8%-11.0%Return on Equity (ROE) (%)ー12.9ー10.6ーー19FY ending 03/2023 Full-year Plan: Earnings ForecastOrders and salesThe company expects to see continued large investments in Japan and overseas—mainly in semiconductors—in the booming electronics industry sector. The order backlog is also at a high level, and the construction schedule is expected to progress smoothly at this time.ProfitsAlthough the profit margin is expected to decline slightly due to the expansion of plant sales, the effect of sales expansion will more than offset the increase in gross profit, and the impact of current price hikes and yen depreciation has already been factored in. The company anticipates higher SG&A expenses due to personnel costs, overseas system development, R&D investment, digital investment, and other factors.Risk factorsA decline in profit margins due to higher prices for raw materials and construction work caused by soaring energy and resource prices and an excessively weak yen, or disruptions in the supply chain—such as shortages in the supply of raw materials and delays in logistics—could delay the progress of construction work on orders received and affect our sales and profits. 20FY ending 03/2023 Plan: Analysis of Orders and Sales(Unit: Billion JPY)Order ComparisonOrders12503/2022 Actual03/2023 PlanSales Comparison135.6112-10.3YoY-10.6+13YoY+12.903/2022 Actual03/2023 PlanElectronicsDown ¥10.6 billion (7.9%) year on year• Although the forecast is for a decrease due in part to a rebound from the previous year’s strong performance, investment is expected to continue at a high level. Depending on the scale and number of investments by clients, it may exceed the forecast. On the other hand, there are concerns about the impact of risks such as inflation in energy and resource prices and supply chain disruptions.125SalesUp ¥12.9 billion (11.5%) year on year• Plans to expand sales mainly in the electronics industry sector due to the continuation of a high level of semiconductor-related orders and progress in construction of projects with order backlogs carried over.21FY ending 03/2023 Plan: Orders by Region■Orders received are expected to maintain a high level of investment despite a rebound overseas from a large increase in the previous fiscal year.Japan: Taiwanese companies plan to receive orders for large investments in Japan.Overseas: China and the U.S. down from the previous year, but Taiwan maintained a high level of growth, and Malaysia also expanded.Note: U.S. projects are included in Southeast Asia and others.Orders (Domestic/Overseas)1,6001,4001,2001,0008006004002000103.8104.929.828.7%7422.582.321.5%94.529.130.9%65.3135.65842.8%77.67780%70%60%50%40%30%20%10%0%12.54838.4%03/2023Plan(Unit: Billion JPY)Orders Overseas by Region5813.916.927.1488122803/2023Plan2229.87.46.915.422.54.33.11529.13.26.918.903/201903/202003/202103/202203/201903/202003/202103/2022DomesticOverseasOverseas RatioTaiwanChinaSE Asia/OtherFY ending 03/2023 Plan: Sales by Region■Sales are expected to increase both in Japan and overseas due to progress in construction of projects carried over from the previous year. Japan: The company plans to record sales of orders received mainly from semiconductors and other electronics industries.Overseas: Following strong sales in Taiwan and China, large projects are being booked in the U.S.Note: U.S. projects are included in Southeast Asia and others.Sales(Domestic/Overseas)Sales Overseasby Region1,4001,2001,000800600400200092.224.168.196.521.574.9100.624.975.626.1%22.3%24.8%12.5428311.238.97334.8%33.6%100%90%80%70%60%50%40%30%20%10%0%03/2023Plan24.16.17.610.221.55.54.411.524.93.65.21603/201903/202003/202103/202203/201903/202003/202103/2022DomesticOverseasOverseas RatioTaiwanChinaSE Asia/Other(Unit: Billion JPY)38.96.113.342101219.52003/2023Plan23FY ending 03/2023 Plan: Sales by Segment and Customer Water Treatment Engineering■Plans for significant growth in the electronics industry, where orders are strong, following the previous year’s robust growth.•Sales of large projects for semiconductors expanded as orders continued to grow both in Japan and overseas.•Service Solutions also benefited from the start of a contract for a large contract processing project.Sales by SegmentSales by Market(Unit: Billion JPY)1055492.74777.936.582.43952.5%49.4%53.1%49.2%48.6%41.343.345.6511,2001,000800600400200073.837.336.4150%140%130%120%110%100%90%80%70%60%50%40%30%20%10%0%73.810.124.752.8%3977.911.224.653.9%41.982.410.624.157.8%47.692.711.422.962.8%58.203/201903/202003/202103/202203/201903/202003/202103/202203/2023PlanService SolutionsPlantService Solutions RatioElectric Power/Water Supply and SewageGeneral IndustryElectronics IndustryElectronics Industry Ratio1051122.767.9%71.303/2023Plan24FY ending 03/2023 Plan: Orders by Segment and CustomerElectronics Industry■Large orders are expected for semiconductor-related projects both in Japan and overseas in the first half of the year.Japan: The company expects to receive orders from Taiwanese companies for domestic and wafer-related investments.Overseas: In addition to Taiwan, the company expects to receive orders for large-scale projects in China, Malaysia, and other countries.(Unit: Billion JPY)Electronics Industry: Orders (1st Half vs 2nd Half)Electronics Industry: Orders600500400300200100034.613.620.913.54.4932.31517.319.510.78.82314.9849.93811.84220223018121,000900800700600500400300200100048.823.72548.118.13042.525.616.91st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half03/201903/202003/202103/202203/202003/202103/202203/2023 PlanDomesticOverseasDomesticOverseas82.35329.272383403/2023Plan25FY ending 03/2023 Plan: Sales by Segment and CustomerElectronics Industry■The company expects growth in both domestic and overseas sales of projects to be carried over.Japan: Construction of domestic projects is progressing relatively smoothly, and sales are expected to increase.Overseas: Sales seen rising due to an increase in projects despite the impact of process revisions in some projects.Electronics Industry: Sales (1st Half vs 2nd Half)Electronics Industry: Sales(Unit: Billion JPY)40035030025020015010050022.28.114.122.210.819.78.725.325.310.213.532.819.836.316.120.135201580070060050040030020010003918.620.41111.315.111.81325.126.424.81st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half03/201903/202003/202103/202203/202003/202103/202203/2023 PlanDomesticOverseasDomesticOverseas41.916.847.621.158.233.371.336.135.103/2023Plan26FY ending 03/2022 Plan: Sales by Segment and CustomerPerformance Products(Unit: Billion JPY)Sales by Segment18.418.518.25.35.156.16.26.26.97.16.919.34.96.77.72057803/201903/202003/202103/202203/2023PlanFood ProductsWater Treatment ChemicalsStandard Equipment/FiltersWater Treatment Chemicals•In addition to expanding sales to the electronics industry, plans to re-accelerate overseas expansion in Taiwan, China, and elsewhere.Standard Water Treatment Equipment/ Filters•The company will expand sales of Puric μ, launched in the previous fiscal year, to medical and research institutions. It will further strengthen overseas development in China and other countries.Food Products•Efforts will be re-accelerated to develop new customers and expand sales of new products that stagnated due to the pandemic with the aim of a recovery in sales.27FY ending 03/2023 Plan: Operating Income (Unit: Billion JPY)Operating Income ComparisonWaterTreatmentEngineering+0.8PerformanceProducts＋0+0.9YoY10.8+2.8-0.7-1.311.7+0.1-003/2022 Actual03/2023 PlanSales changeProfit margin changeSG&A changeUp ¥0.9 billion (7.8%) year on yearWater Treatment Engineering: Up 0.8 billion yen (8.9%)•Although the profit margin is expected to decline slightly due to an increase in the plant sales ratio, the company plans to increase profit through sales expansion, primarily in the electronics industry.Performance Products: Up 0.0 billion yen (2.1%)•The company plans to expand sales in each field, especially in Taiwan, China, and other overseas markets.28FY ending 03/2023 Full-year Plan: Cash Flows(Unit: Billion JPY)Cash Flow Trends12.213.212.510.810.84.9-1.3-4.6-1.5-2.6-2.003/202103/2022Cash Flow from Operating ActivityCash Flow from Investment ActivityCash Flow from Financing ActivityEBITDA-10.503/2023 (Plan)(Operating income + depreciation and amortization)In addition to business performance, the progress of construction and collection of payments for large projects have a significant impact on the Company’s cash flow.Major developments in FY ending 03/2023•Operating cash flow is expected to include a total of about ¥25 billion in phased investments by FY ending 03/2025, including the amount invested in facility-owning Service Solutions projects. Expansion of R&D, overseas structure, and digital-related expenses are also expected.Plans for investment cash flow include strengthening the Tsukuba plant and expanding digital and R&D investmentsFinancial cash flow is expected to improve due to increased borrowings for investment in equipment-owning projects. Dividends are seen rising 25% year-on-year to over ¥1.9 billion in FY ending 03/2023.••29Key IndicatorsFY ended03/2021FY ended 03/2022ActualFY ending 03/2023PlanNew Laboratory Buildings (at the R&D Center)Organo invested approximately ¥3 billion to construct a new experimental building at the R&D Center. The building will be completed by March 2023.The company will work to strengthen the development of next-generation ultrapure water systems and separation and purification technologies.Capital expenditures(million yen)1,0153,3872,000R&D expenses(million yen)Depreciation (million yen)2,3002,1462,7001,2121,3321,500Interest-bearing debt (million yen)16,00515,62830,000No. of employees2,3192,4762,500Annual dividends (yen)ROE(%)11411.116012.916010.6*Capital expenditures include investments in intangible assets.The annual dividend of ¥160 for FY ending 03/2023 does not take into account the stock split scheduled for October 1, 2022 (from 1 share to 4 shares).Image of new laboratory building30Contents１． FY ended 03/2022 Results ２． FY ending 03/2023 Plan３． Medium-term Management Plan４． Company Overview31Medium-term Management Plan: 03/2022-03/2024Focus AreasElectronics IndustrySecure orders and delivery of large-scale projects (Japan, Taiwan, China, U.S.)Establish a competitive global value chainGrowth AreasChina/Taiwan Markets• Establish and maintain R&D, solutions, and production systems• Strengthen the development of the Chinese market outside of the electronics industryGrowth DriversService Solutions• Develop a foundation for digital solution services•Improve global solution system and qualityR&DWater Treatment ChemicalsFunctional Materials•••••Expand investment in development to 2.5% of salesDevelop next-generation ultrapure water systems for the electronics industryCreate new business through advanced separation and purification technologiesStrengthen sensing and digital technologiesExpand open innovation••Expand packaged service menu including chemicals + equipment + IoTExpand overseas business by strengthening the development of local partners•Establish and maintain a global supply chain• Develop differentiated functional materials and create business models that realize social valueBuilding a Business FoundationReinforce engineering structureESG and SDG initiativesThorough safety and compliancePromote data utilizationCultivate/utilize personnel32Medium-Term Management Plan: FY03/2023-FY03/2025Sales, Operating Income, and ROE Trends(Unit: Billion JPY/%)ROE12.4 12.9 10.6 10.4 10.7 •11.1 9.3 8.3 125.09.0 140.0130.0112.0105.0110.0100.6103.096.5Sales14.010.812.511.710.59.9Operating income9.58.29.020.321.322.323.324.325.303/2020-03/2023 ActualNew Medium-term Management Plan (FY03/2023-FY03/2025)Previous Medium-term Management Plan (FY03/2022-FY03/2024)Expand sales•Expand sales to ¥140 billion, mainly in the active electronics industry.In addition to orders for and delivery of large-scale projects, strengthen the Service Solutions business.Secure stable profits•Establish a profit structure capable of consistently achieving an operating income margin and ROE of 10% or more.Strengthen business foundation•Pursue the realization of social and customer value while developing human resources and strengthening the engineering structure that will serve as the foundation of the business.33Medium-term Management Plan: Sales by Segment(Unit: Billion JPY/%)Sales by SegmentPerformance ProductsService SolutionsPlantElectronics Industry112.019.345.658.296.518.541.341.9100.618.243.347.636.539.047.003/2020 03/2021 03/202203/2025(Final Fiscal Year)Electronics Industry•Expand both Plant and Service Solutions, mainly in the electronics industry.Plant •Expand large-scale semiconductor projects in Japan, Taiwan, China and the U.S.Service Solutions•Launch large contract processing projects in Japan and strengthen the digitalization of Service Solutions.Performance Products •Strengthen overseas sales expansion centered on water treatment chemicals and small equipment.Expand Service Solutions, Performance Products as stable revenue sources140.023.0+18.9%62.0+35.8％81.5+39.9％55.0+16.8％34Medium-Term Management Plan: Initiatives in Priority AreasElectronicsIn addition to receiving orders for and delivering large-scale projects in Japan and overseas, the company will invest in large-scale equipment-owning contracts (approximately ¥25 billion by FY03/2025), develop its business structure in the U.S., strengthen its R&D structure in Taiwan, and enhance its Service Solutions structure in China.Strengthen overseas structureIn addition to reinforcing its structure in the U.S., Taiwan, and China targeting the electronics industry, the company will fortify its global supply chain for functional materials such as ion exchange resins and water treatment membranes, and its overseas sales network for Performance Products such as water treatment chemicals, by strengthening overseas partnerships, M&A, and more.••Promote digitalization• Accelerate the creation of digital Service Solutions, including proposals for improving facility efficiency and energy conservation using sensing technology, in addition to automated operation and remote monitoring services, by consolidating group resources in Japan and overseas.Sustainability services• Push forward the development and provision of technologies, products, and services that combine economic value for customers and social value such as energy conservation and decarbonization, including water recycling technologies such as closed systems and recovery systems that capture valuable resources from wastewater and effluents.35Organo Sustainability ServicesTechnology for recovering hydrofluoric acid from wastewaterECOCRYSTARecovers hydrofluoric acid used in semiconductor manufacturing from factory wastewater. It is then refined as high-purity pellets and recycled as raw material for hydrofluoric acid.Circulating water resource recycling systemClosed SystemSeparate collection and recycling of wastewater from factories, reducing wastewater other than rainwater to zero. Impurities are dehydrated and dried, and then reused as raw materials for cement.Japan Environmental Management Association for Industry (JEMAI)Minister of Economy, Trade and Industry Award, Award for Resource Recirculation Technologies and SystemsOrgano supplied wastewater recovery and treatment equipment to Oita Canon Materials, winner of the Minister of Economy, Trade and Industry’s Prize at the 24th Japan Water Grand Prize (citation: Oita Canon Inc. water resource reuse activities https://www.oita-canon.co.jp/env/water.html）Energy saving and decarbonization using water heatWater Heat Utilization SystemUtilizes heat pump technology to harness the heat of water used in factories and other facilities as energy, reducing power consumption and CO2 emissions by more than 50%.Energy Conservation Grand Prize 2016 Energy Conservation Center, Japan Chairman’s AwardCooling water treatment agentORBRAIDA cooling water complex treatment agent containing a new sterilizing ingredient developed by Organo. Optimized treatment of cooling water for air-conditioning chillers in factories, etc., contributes to reduction of power consumption.Energy-saving solutions for RO membrane treatment facilitiesORSMART ROReduces power consumption and CO2emissions of RO membrane water treatment facilities through a unique service solution that combines operation management, remote monitoring, and chemicals.Energy Conservation Grand Prize 2020 Energy Conservation Center, Japan Chairman’s AwardEnergy Conservation Grand Prize 2021 Judging Committee Special Excellence Award36Corporate Governance: Efforts to Ensure the Effectiveness of the Board of DirectorsDividend per share (yen)(% is consolidated dividend payout ratioROE (%)Key Corporate Governance Initiatives2016Compensation Committee established1.5 2.4 2018Introduction of stock compensation plan2019Nomination and Compensation Committee established2020Independent Outside Directors and Outside Corporate Auditors to be more than 1/32021Creation of Skill Matrix for female auditors appointed as executives2022Special committee established Stock split implemented (1 share → 4 shares)12.9 11.1 5.4 5.7 5.5 8.4 12.4 160 (19.9%)104 (16.6%)114 (18.5%)73 (18.8%)40 (69.4%)40 (42.4%)45 (20.8%)55 (23.2%)53 (21.9%)03/201403/201503/201603/201703/201803/201903/202003/202103/2022*Dividend amounts prior to March 2017 are shown in accordance with the June 2017 reverse stock split.*Dividends for the fiscal year ended March 31, 2017 include a dividend of ¥5 per share in commemoration of the company’s 70th anniversary.Jun. 2014Jun. 2015Jun. 2019Jun. 2020Number of Independent Outside DirectorsNumber of Directors110293103937Corporate Governance: Shareholder Returns and IR Policy(Unit: Yen/%)Dividend per share and dividend payout ratioImage up to FY03/2025160 160 (19.9%)(22.4%)114 (18.5%)104 (16.6%)Shareholder return policyExpand investment for growth and continue to increase dividendsAchieve a dividend payout ratio of 25% or more as soon as possibleShareholder return policy•Shareholder returns are considered to be centered on dividends. The company hopes to achieve a dividend payout ratio of 25% or more as soon as possible, while expanding investment for growth and continuing to raise dividends.Implement stock split•A four-for-one stock split is scheduled to take effect on October 1, 2022. The investment unit will be lowered to create an environment that makes it easier to invest and to expand the investor base.Strengthen IR support•Hold briefings for institutional and individual investors to expand opportunities for dialogue. Increase the number of people in charge and enhance disclosure materials such as English-language information.03/202003/202103/202203/202303/202403/2025(Final Fiscal Year)*Dividends for FY03/2023 and thereafter in the graphs are based on the assumption that the stock split scheduled to be implemented in October 2022 will not be taken into account.38Corporate Governance: Other InitiativesSustainabilityResponse to sustainability issuesThe company established the Sustainability Committee in December 2020 to promote discussions on Scope 1, 2 and Scope 3 emissions calculation and target setting for climate change-related information disclosure in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD).Risk managementImprovement and strengthening of risk management systemOrgano improved the group-wide risk management system by establishing a new risk management department and strengthening the internal audit department. The company will promote effective measures such as risk scenario assumptions, and the identification and monitoring of major risks, while taking into account the market environment and geopolitical climate.Personnel cultivation/utilizationPromotion of diversityThe company launched a reform of the personnel system to become a company where women and foreign personnel can play an active role. Going forward, it will accelerate the utilization and development of human resources across the Group by developing skill requirements for management executives.39Contents１． FY ended 03/2022 Results ２． FY ending 03/2023 Plan３． Medium-term Management Plan４． Company Overview40Company Overview and Shareholder Composition■ Company profile■ Major shareholders (top ten)(as of March 31, 2022)Company name ORGANO CORPORATIONName of shareholderHead office1-2-8, Shinsuna, Koto-ku, TokyoTosoh CorporationFoundationMay 1, 1946The Master Trust Bank of Japan, Ltd. (Trust account) RepresentativeMasaki Uchikura, Representative Director and PresidentCapital8,225,499,312 yenStock exchange listingTotal number of shares issued and outstandingNumber of shareholdersTokyo Stock Exchange Prime Market11,589,925 shares (a four-for-one stock split isscheduled to take effect on October 1, 2022)4,103 (as of March 31, 2022)Custody Bank of Japan, Ltd. (Trust account)SSBTC CLIENT OMNIBUS ACCOUNT Mizuho Bank, Ltd.KBC BANK NV – UCITS CLIENTS NON TREATY1531.33BBH The Advisors’ Inner Circle Fund II KopernikGlobal All-Cap Fund127 1.11■ Shareholder compositionDZ PRIVATBANK S.A. RE INVESTMENTFONDS1100.96Number of shares held (Thousands of shares)Holding ratio(%) 4,92542.819666322792008.405.502.431.74Domestic corporations44.77%Foreigners24.64%Financial institutions18.59%Individuals10.31%MLI FOR CLIENT GENERAL OMNI NON COLLATERAL NON TREATY-PB1020.89Securities companies 0.97%BNYM as AGT/Clients 10 percent910.79Treasury shares 0.72%*The shareholding ratio calculation excludes treasury stock (84,905 shares).41Organo Subsidiaries and Affiliates* Indicates subsidiaries accounted for using the equity method; underline indicates non-consolidated subsidiaries or affiliated companiesSemiconductor production share by region (2021; according to WSTS)Europe, 9%United States21%Japan 8%Asia Pacific 62%Established representative office in U.S.To this point, the company has expanded its business mainly in East Asia, including Japan, China, and Taiwan, as well as in Malaysia and other countries where the electronics industry is prominent.In September 2021, Organo established a U.S. subsidiary, based in Arizona, to coincide with its customers’ factory expansions. In addition to improving the delivery system, it plans to expand sales to new customers.42Organo Group Businesses｜Water Treatment Engineering｜Plant¥92.7 billion(82.7％)｜Service Solutions｜Sales by Segment¥45.6billion(49%)Service Solutions｜Sales by Market■ Pure and ultrapure water facilities■ Wastewater treatment and recovery facilities■ Valuable material recovery facilities■ Production processing-related facilities■ Replacement of expendable items and maintenance■ Operational support services and comprehensive maintenance■ Renovation and reconditioning■ Contract water treatment｜Performance Products｜Water Treatment ChemicalsTreatment chemicals for wastewater, cooling water, cleaning and RO membranes, boilers¥19.3 billion(17.3％)｜Standard Equipment/Filters■Pure and ultrapure water equipment■Water purification filters｜Food Processing Agents■ Food processing agents■ Food ingredients¥47billion(51%)Plant｜Performance Products: Sales¥7.7billion(40%)¥6.7billion(35%)¥4.9billion(25%)Water Treatment ChemicalsStandard Equipment/FiltersFood Processing Agents・Various manufacturing ・Pharmaceuticals,industries・Buildings and research・Various manufacturing commercial facilitiesindustries・Food processing・Beverage manufacturing・Nursing care and health food・Food and beverage, convenience storesAmounts represent sales for FY03/2022, and % represents sales composition.43¥58.2billion(63%)Electronics・Semiconductors・FPD・Electronic parts¥22.9billion(25%)¥11.4billion(12%)General Industry・Pharmaceuticals, cosmetics・Food and beverage・Machinery and chemicalsElectric Power/Water Supply and・Power plants・Water purification ・Sewage treatment plantsplantsOrgano Group HistoryDevelopment● Sales trendsGrowthEvolutionExpansion2010～■ Semiconductor market expansion, Taiwan/China market growth1990’s■ Ultrapure water facilities for electronics industry2000’s■ Overseas development■ Strengthening of service solutions1980’s■ Water treatment facilities for power plants1970’s■ Water supply and sewage facility■ Refinement facility for sugar solution, other2005■ Comprehensive service solutions begin in earnestAmerica■(2021)■Indonesia(2013)1960’s■ Large-scale pure water equipment for general industryFounded 1946■ Athermal water distillation equipment■Thailand(1989)■Taiwan(2005)■Malaysia(1986)■China(2003)■Vietnam(2010)196019701980199020002010202144ContactOrgano Corporation Corporate Planning Dept.TEL: 03-5635-5111 FAX: 03-3699-7240https://www.organo.co.jp/englishhttps://www.organo.co.jp/english/contact/input/DISCLAIMERThis 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.45