Organo : Consolidated Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2023 158KB

DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice.

Consolidated Financial Results for the First Nine Months of

the Fiscal Year Ending March 31, 2023

	February 1, 2023
Company name:	ORGANO CORPORATION
Listing:	Tokyo Stock Exchange
Securities code:	6368
URL:	https://www.organo.co.jp/english/
Representative:	Masayuki Yamada, Representative Director and President
Inquiries:	Shigeru Sonobe, General Manager of Accounting Dept., Corporate Management and
	Planning
TEL:	[phone]

Scheduled date to file quarterly securities report:	February 8, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results presentation meeting:	None

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the first nine months of the fiscal year ending March 31, 2023 (from April 1, 2022 to December 31, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
			Net sales	Operating profit	Ordinary profit		Profit attributable to
				owners of parent
	Nine months ended	Millions of yen	%	Millions of yen		%	Millions of yen	%		Millions of yen	%
	December 31, 2022	95,127	22.2	9,940		61.8	10,986	65.1		7,552	42.6
	December 31, 2021	77,834	13.2	6,141		16.7	6,654	22.7		5,297	47.8
	Note:	Comprehensive	income: Nine	months ended December 31, 2022	¥8,864 million [50.3%]
			Nine months ended December 31, 2021	¥5,896 million [62.6%]
			Basic earnings	Diluted earnings
			per share	per share
	Nine months ended		Yen			Yen
	December 31, 2022		164.71			-
	December 31, 2021		115.36			-

The Company conducted a 4-for-1 common share split effective as of October 1, 2022. Basic earnings per share are calculated on the assumption that said share split was conducted at the beginning of the previous fiscal year.

(2) Consolidated financial position

		Total assets		Net assets	Equity-to-asset ratio
	As of	Millions of yen		Millions of yen	%
	December 31, 2022	150,685		82,644	54.7
	March 31, 2022	130,506		76,004	58.1
	(Reference) Equity: As of December 31, 2022 ¥82,429 million	As of March 31, 2022	¥75,836 million

2. Cash dividends

				Annual dividends per share
			First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
			Yen	Yen	Yen	Yen	Yen
	Fiscal year ended	-	72.00	-	88.00	160.00
	March 31, 2022
	Fiscal year ending	-	116.00	-
	March 31, 2023
	Fiscal year ending				29.00	-
	March 31, 2023
	(Forecast)
	Note:	Revisions to the forecast of cash	dividends most recently	announced: None

The Company conducted a 4-for-1 common share split effective as of October 1, 2022. The year-end dividend per share for the fiscal year ending March 31, 2023 (forecast) stated taking into account the effect of such share split, and the total annual dividend is stated as "-." The year-end dividend per share for the fiscal year ending March 31, 2023 (forecast) that does not take the share split into account is ¥116, and the annual total of dividends per share is ¥232.

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic

earnings

owners of parent

per share

Millions

%

Millions

%

Millions

%

Millions

%

Yen

of yen

of yen

of yen

of yen

Fiscal year ending

140,000

24.9

14,500

33.6

15,200

31.6

11,500

24.9

250.78

March 31, 2023

Note:

Revisions to the earnings forecasts most recently announced: None

Basic earnings per share in the consolidated earnings forecasts for the fiscal year ending March 31, 2023 take into account the effect of the share split. The forecast for basic earnings per share that does not take the share split into account is ¥1,003.14.

* Notes

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

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

(3) Changes in accounting policies, changes in accounting estimates, and restatement

a. Changes in accounting policies due to revisions to accounting standards and other regulations: None

b. Changes in accounting policies due to other reasons: None

c. 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 December	31, 2022	46,359,700 shares
As of March 31,	2022	46,359,700 shares

b. Number of treasury shares at the end of the period

As of December	31, 2022	470,787 shares
As of March 31,	2022	541,020 shares

c. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

For the nine months ended December 31, 2022

For the nine months ended December 31, 2021

45,856,201 shares

45,922,196 shares

Notes:

1. The Company conducted a 4-for-1 common share split effective as of October 1, 2022. Total number of issued shares at the end of the period, number of treasury shares at the end of the period, and average number of shares outstanding during the period are calculated on the assumption that said share split was conducted at the beginning of the previous fiscal year.
2. The Company has introduced an Officer Share Delivery Trust, and shares of the Company held by the Trust have been included in treasury shares excluded from the calculation of the number of treasury shares at the end of the period and the average number of shares outstanding 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 (Caution regarding forward-looking statements and others)

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 the Company. Actual business and other results may differ substantially due to various factors. Please refer to "(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements" in "1. Qualitative information regarding financial results for the first nine months" on page 3 of the attached material for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.

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

- 1 -

1. Qualitative information regarding financial results for the first nine months

1. Explanation regarding operating results
   During the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022), the electronics industry, the Organo Group's main market, saw a deterioration in conditions for semiconductors centered around memory due to slowing demand for smartphones, PCs and others, and there were signs that some customers were reducing production and decreasing/postponing capital investment mainly due to the impact of semiconductor-related restrictions imposed on China by the U.S. However, large-scale investments in cutting-edge semiconductors in Taiwan and elsewhere and capital investments in silicon wafers, automotive/power semiconductors, and others in Japan and overseas remained active. The general industry field saw recovering capital investments, which had been weak due to the COVID-19 pandemic these few years, and the social infrastructure field, such as electric power/water supply and sewage, remained strong.
   Under these conditions, the Organo Group proceeded to draw in orders and make deliveries for large- scale semiconductor projects in Japan and overseas, while establishing supply chains and delivery frameworks in each country, and promoting a shift to digitalization such as of engineering operations and service solutions. We also engaged in initiatives to enhance R&D systems in such areas as next- generation ultrapure water systems and new separation and purification technologies, and to strengthen governance such as by developing risk management systems.
   As a result, in the Group's financial results for the nine months ended December 31, 2022, orders received increased by 24.6% year on year to ¥124,810 million, net sales increased by 22.2% to ¥95,127 million, operating profit increased by 61.8% to ¥9,940 million, ordinary profit increased by 65.1% to ¥10,986 million, profit attributable to owners of parent increased by 42.6% to ¥7,552 million, and our carry-over balance for order backlog as of December 31, 2022 was up 43.4% to ¥120,840 million.
   Results by segment are as follows.
   [Water Treatment Engineering Business Unit]
   ■Orders received
   Orders received increased 28.1% year on year to ¥109,208 million. In the mainstay electronics field, the Organo Group succeeded in capturing orders for large-scale projects in Japan and Taiwan, and large- scale investments mainly in legacy semiconductors such as automotive/power semiconductors were also robust in China and Malaysia. As a result, orders received expanded significantly. In addition, in the general industry field, there was also a recovery in large-scale investments in areas related to the pharmaceutical, food and electronics industries, and orders received increased. The field of social infrastructure, which includes electric power/water supply and sewage, orders received were about the same level as the same period in the previous fiscal year, mainly in solutions projects in Japan.
   ■Net sales
   Net sales increased 25.8% year on year to ¥79,787 million. In the mainstay electronics field, net sales increased mainly due to steady progress on the construction of major projects ordered, as well as a rise in net sales overseas resulting from the effect of the weakening yen, and strength in maintenance, renovation/reconditioning, facility-owned projects/contracted processing, etc. of the Service Solutions Division. On the other hand, in the general industry field, net sales decreased year on year, mainly because the construction of major projects ordered in the current period has not progressed on a full scale, and the recording of sales of small and medium-sized equipment was delayed until the fourth quarter due to a delay in supply of materials. In addition, the social infrastructure field, such as electric power/water supply and sewage, showed strong performance mainly in solutions projects in Japan.
   ■Operating profit
   Operating profit increased 67.1% year on year to ¥8,290 million. Due to greater revenue resulting from sales expansion in the electronics industry field, the significant growth in gross profit exceeded that of expenses, the bulk of which were related to personnel and other items, and resulted in a year-on-year increase in operating profit.
2. • 2 -