Organo (6368): FY2025 Results Summary — Operating Profit Up 21.0% on Semiconductor Demand; FY Ending 03/2027 Plan Calls for Orders of ¥230.0 Billion and a 5-for-1 Share Split

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: Organo’s fiscal year ends on March 31. The company’s materials label the fiscal year ended March 31, 2026 as “FY Ended 03/2026” and the fiscal year ending March 31, 2027 as “FY Ending 03/2027”. This site classifies the year ended March 2026 as FY2025; the labels used in the company’s materials are retained in the body, tables, and segment data below.

ORGANO CORPORATION (6368), a water treatment engineering company, released its “Financial Results for Fiscal Year Ended March 31, 2026” presentation dated May 14, 2026. For the FY ended 03/2026, orders received rose 11.0% year on year to 167,956 million yen, net sales rose 8.8% to 177,654 million yen, and operating profit rose 21.0% to 37,648 million yen, lifting the operating profit margin by 2.1pt to 21.2%. Profit attributable to owners of parent rose 17.6% to 28,401 million yen and ROE was 21.5%. The company attributes the result to growing sales in the Electronics Industry, driven by progress in construction for large-scale projects, and improved profit margins of large-scale overseas projects. For the FY ending 03/2027, Organo plans orders received of 230,000 million yen (+36.9%), net sales of 200,000 million yen (+12.6%) and operating profit of 40,000 million yen (+6.2%), and it will implement a 5-for-1 share split effective October 1, 2026.

Consolidated Results (FY Ended 03/2026)

Orders received increased 16,684 million yen year on year to 167,956 million yen. According to the presentation, in addition to orders for large-scale projects being delayed beyond expectations, several large-scale orders in the Electronics Industry in Taiwan and the United States were received. Against the initial plan of 180,000 million yen, orders were 12,044 million yen (-6.7%) short, and against the previous forecast of 185,000 million yen (Oct 31, 2025) they were 17,044 million yen (-9.2%) short. Net sales rose 14,385 million yen to 177,654 million yen, 2,654 million yen (+1.5%) above both the initial plan and the previous forecast of 175,000 million yen; sales grew in both the Plant and Service Solutions segments of the Electronics Industry. Gross profit rose 17.9% to 65,084 million yen, with the gross profit margin improving 2.8pt to 36.6%. SG&A rose 14.0% to 27,435 million yen. Operating profit of 37,648 million yen was 6,148 million yen (+19.5%) above the initial plan of 31,500 million yen and 1,648 million yen (+4.6%) above the previous forecast of 36,000 million yen; improved profit margins in Plant projects overseas contributed. Profit attributable to owners of parent was 28,401 million yen, up 4,251 million yen (+17.6%).

Item (Millions of yen)	FY Ended 03/2026	FY Ended 03/2025	Year-on-Year	Vs. Initial Plan
Orders Received	167,956	151,272	+16,684 (+11.0%)	-12,044 (-6.7%)
Net Sales	177,654	163,269	+14,385 (+8.8%)	+2,654 (+1.5%)
Gross Profit	65,084	55,182	+9,902 (+17.9%)	+6,584 (+11.3%)
Gross Profit Margin	36.6%	33.8%	+2.8pt	+3.2pt
SG&A	27,435	24,061	+3,374 (+14.0%)	+435 (+1.6%)
Operating Profit	37,648	31,120	+6,528 (+21.0%)	+6,148 (+19.5%)
Operating Profit Margin	21.2%	19.1%	+2.1pt	+3.2pt
Profit Attributable to Owners of Parent	28,401	24,150	+4,251 (+17.6%)	+4,201 (+17.4%)
ROE	21.5%	21.7%	-0.2pt	—

By region, overseas net sales were 66,525 million yen (FY ended 03/2025: 63,043 million yen), an overseas ratio of 37.4% (38.6%), while domestic net sales were 111,128 million yen (100,225 million yen). Overseas orders received were 66,303 million yen (59,582 million yen), an overseas ratio of 39.5% (39.4%), and domestic orders were 101,652 million yen (91,688 million yen). The presentation states that active semiconductor investments are continuing, primarily overseas, and that sales remained strong domestically and overseas with the progress of large-scale project construction proceeding smoothly. On the balance sheet, total assets were 224,867 million yen (up 30,471 million yen), total net assets were 142,962 million yen (up 21,768 million yen), and the equity-to-asset ratio was 63.6% (up 1.4pt). Interest-bearing debt was 34,402 million yen (22,557 million yen a year earlier), capital expenditures were 3,520 million yen and R&D expenses were 3,371 million yen (excluding facility-owned services). The number of employees was 2,658.

Segment Results

Organo reports two segments: Water Treatment Engineering and Performance Products. In Water Treatment Engineering, orders received rose 12.2% to 141,685 million yen, net sales rose 10.0% to 151,961 million yen, and operating profit rose 25.4% to 34,339 million yen, with the operating profit margin up 2.8pt to 22.6%. In Performance Products, orders received rose 5.3% to 26,270 million yen and net sales rose 2.2% to 25,693 million yen, but operating profit fell 11.5% to 3,309 million yen and the margin declined 2.0pt to 12.9%. Within Water Treatment Engineering, sales by department were Plant 75,804 million yen (69,199 million yen a year earlier) and Service Solutions 76,157 million yen (68,931 million yen), for a Service Solutions ratio of 50.1% (49.9%). Sales by market were Electronics Industry 108,052 million yen (96,652 million yen), General Industry 32,936 million yen (30,083 million yen) and Electric Power/Water Supply and Sewage 10,973 million yen (11,396 million yen); orders by market were Electronics Industry 99,065 million yen (82,736 million yen), General Industry 28,904 million yen (32,534 million yen) and Electric Power/Water Supply and Sewage 13,716 million yen (11,056 million yen). In Performance Products, sales by department were Food Products 9,449 million yen (9,170 million yen), Standard Equipment and Functional Materials 10,832 million yen (10,001 million yen) and Chemicals 5,412 million yen (5,967 million yen). The presentation notes that in the Electronics Industry, investment in cutting-edge semiconductors in Taiwan, the United States and elsewhere continues, with orders and sales trending upward; in General Industry, orders declined according to trends in large-scale projects while net sales grew steadily; and in Electric Power/Water Supply and Sewage, orders were received for the restart of nuclear power plants and the replacement of thermal power plants.

Segment (Millions of yen)	Metric	FY Ended 03/2026	FY Ended 03/2025	Year-on-Year
Water Treatment Engineering	Orders Received	141,685	126,327	+15,358 (+12.2%)
Water Treatment Engineering	Net Sales	151,961	138,130	+13,831 (+10.0%)
Water Treatment Engineering	Operating Profit	34,339	27,382	+6,957 (+25.4%)
Water Treatment Engineering	Operating Profit Margin	22.6%	19.8%	+2.8pt
Performance Products	Orders Received	26,270	24,944	+1,326 (+5.3%)
Performance Products	Net Sales	25,693	25,139	+554 (+2.2%)
Performance Products	Operating Profit	3,309	3,738	-429 (-11.5%)
Performance Products	Operating Profit Margin	12.9%	14.9%	-2.0pt

FY Ending 03/2027 Plan

For the FY ending 03/2027, Organo plans orders received of 230,000 million yen (+62,044 million yen, +36.9%), net sales of 200,000 million yen (+22,346 million yen, +12.6%), gross profit of 72,000 million yen (+10.6%, margin 36.0%), SG&A of 32,000 million yen (+16.6%), operating profit of 40,000 million yen (+2,352 million yen, +6.2%, margin 20.0%, -1.2pt) and profit attributable to owners of parent of 30,000 million yen (+5.6%), with ROE of 20.0%. The first-half plan is orders received of 130,000 million yen, net sales of 90,000 million yen, operating profit of 17,500 million yen and profit attributable to owners of parent of 12,000 million yen. The company expects investment in cutting-edge semiconductors to remain highly active in Taiwan and the United States and plans large-scale Plant project orders in the United States, Taiwan and Japan; on profit, although it plans to increase personnel expenses and research and development expenses, it expects the operating profit ratio to remain at the same level as the previous fiscal year due to growing sales. Overseas net sales are planned at 87,000 million yen (overseas ratio 43.5%) and overseas orders at 108,000 million yen (47.0%). The plan assumes that, against the backdrop of geopolitical risks such as the situation in the Middle East, there are concerns about shortages and price increases of petrochemical products, but at present there are no circumstances that would significantly affect business performance.

Item (Millions of yen)	FY Ending 03/2027 Plan	FY Ended 03/2026 Actual	Year-on-Year
Orders Received	230,000	167,956	+62,044 (+36.9%)
Net Sales	200,000	177,654	+22,346 (+12.6%)
Gross Profit	72,000	65,084	+6,916 (+10.6%)
SG&A	32,000	27,435	+4,565 (+16.6%)
Operating Profit	40,000	37,648	+2,352 (+6.2%)
Operating Profit Margin	20.0%	21.2%	-1.2pt
Profit Attributable to Owners of Parent	30,000	28,401	+1,599 (+5.6%)
ROE	20.0%	21.5%	-1.5pt

By segment, Water Treatment Engineering plans orders received of 203,000 million yen (+43.3%), net sales of 173,000 million yen (+13.8%) and profit of 36,480 million yen (+6.2%, margin 21.1%); Performance Products plans orders received of 27,000 million yen (+2.8%), net sales of 27,000 million yen (+5.1%) and profit of 3,520 million yen (+6.4%, margin 13.0%). Note: the segment plan slide (P.26) labels the profit line “Gross Profit”, but the figures shown (37,648 million yen for the company in FY ended 03/2026, 34,339 million yen for Water Treatment Engineering and 3,309 million yen for Performance Products) match the operating profit figures on P.22 and P.23.

Shareholder Returns

Organo’s basic policy is to pay stable and consistent dividends. Specifically, while maintaining the dividend payout ratio of 30% or more, the company will work to further improve the dividend payout ratio, with the aim of both expanding investment in growth and strengthening shareholder returns. The annual dividend for the FY ended 03/2026 was 200 yen per share (interim 95 yen, year-end 105 yen), up from 160 yen (interim 71 yen, year-end 89 yen) in the FY ended 03/2025 and above the initial plan of 170 yen (85 yen + 85 yen); the dividend payout ratio was 32.4% (30.5% a year earlier). For the FY ending 03/2027, the dividend forecast is 220 yen (interim 110 yen, year-end 110 yen) on a pre-share-split basis, for a payout ratio of 33.7%. Because the value per investment unit has continued to exceed the Tokyo Stock Exchange’s standard following the stock price rise, the company will implement a share split with an effective date of October 1, 2026, splitting one common share into five, with the aim of improving share liquidity and expanding its investor base. The stock price on the last day of the fiscal year was 13,610 yen (6,370 yen a year earlier), with a PER of 22.0 and a PBR of 4.4.

Item	FY Ending 03/2027 (Forecast)	FY Ended 03/2026	FY Ended 03/2025
Interim dividend (yen)	110	95	71
Year-end dividend (yen)	110	105	89
Annual dividend (yen)	220 (pre-share split)	200	160
Dividend payout ratio	33.7%	32.4%	30.5%

Medium- to Long-term Management Plan (ORGANO 2030)

Organo has revised its targets for the FY ending 03/2031 under its medium- to long-term management plan ORGANO 2030 in light of current conditions such as investment trends in the electronics industry and profit levels. The achievement targets for the FY ending 03/2031 are net sales of ¥260.0 billion or more (base CAGR of 7% or higher), an operating profit ratio of 18–20% (maintain current strong profit levels), ROE of 20% or higher (maintain current high ROE levels for the time being), and ROIC of 15% or higher. The company notes that there is also a possibility of fluctuations in accordance with developments in large-scale projects, such as those in Taiwan and the United States, and that depending on investment trends from the FY ending 03/2028, the sales ratio of the Plant Div. of Electronics could exceed 50%. Growth drivers identified include cutting-edge semiconductors, Taiwan and the United States (Emerging Drivers), with Field Solutions and Performance Products, General Industry, Electric Power/Water Supply and Sewage and Asia as Core Drivers; by region, the company will strengthen frameworks for cutting-edge semiconductors in Taiwan and North America, rebuild its expansion strategy for China and ASEAN, and develop new markets starting with India. The company estimates its cost of equity at approximately 8% to 10% and aims to achieve ROE of 20.0% or higher; it will address the expansion of growth investments and the increase in working capital by utilizing borrowings while maintaining financial soundness.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.