Summary of the Q&A Session at the Financial Results Conference Callfor the Fiscal Year Ended March 2022

Date and Time: May 9, 2022 (Mon.) 10:00 - 11:10
Notice: This summary is a reference designed for the convenience of those who could notattend the financial results conference call stated above. Please note that this is not aword-for-word transcript of all remarks made at that session, but is a summary prepared by
Kurita Water Industries Ltd.
Q. With regard to the large-scale water treatment facilities order for the domestic electronics
industry received in 4Q of the fiscal year ended March 2022, can you provide specifics on
the content and profitability of the order? Also, you indicated your intention to leverage
Kurita's strengths overseas. Please discuss the expected direction of the business going
forward.
A. I cannot disclose the names of individual customers but we successfully won an order foran extremely large semiconductor fab project. The project focuses on areas where wecan demonstrate competitive superiority, such as wastewater treatment and reclamation.
From the perspective of further deepening our relationship with this customer, the project
creates opportunities for the customer to fully understand the Kurita Group's strengths. I
believe this order has the potential to generate further opportunities at the customer's
other fabs along similar lines.
Q. In the previous fiscal year, the water treatment chemicals business was impacted by adeterioration in the cost of sales. I understand you expect the positive impact from raising
your selling prices to materialize in the current fiscal year. However, the forecasts appear
to show a slow pace of margin improvement relative to progress on price hikes. How
should we think about the impact of both the deterioration of cost of sales and higher
selling prices in the current fiscal year?
A. There are differences in customers and market characteristics when comparing thedomestic and overseas businesses; the pace of progress on raising selling prices also
differs. We were able to respond swiftly to mitigate the impact of surging raw materials
costs with higher selling prices particularly in Europe and Southeast Asia.
That said, rising materials costs in 2H of FY ended March 2022 went beyond petroleum
derivatives to include a wide array of inputs such as phosphate and energy costs, so ourefforts to raise prices have not been able to keep up. In response to higher logistics andenergy costs, we will be applying a surcharge in the European and US markets this fiscal
year. We will also implement other measures to give us greater flexibility, such as
shortening the period of validity for estimates.
In contrast, selling price initiatives in the domestic business are slightly lagging Europe,
the US and Southeast Asia. I believe rising raw materials and energy costs must be1 / 5

passed on in the form of higher selling prices; we should start to see an impact from thesecond half of the fiscal year. However, because the cost increases are broad-based, I
don't believe we can fully cover all of the impact. Our plan for the current fiscal year
assumes what can be covered by our current efforts.
Q. Could you comment further on how competition is changing in the area of the electronics
industry? Kurita has successfully won large-scale orders from Asian semiconductorrelated players. Please discuss where you feel Kurita was able to leverage its strengths
versus its peers. Was it superiority in terms of price, supply chain, the ability to offer ashort delivery time or other factors?
A. Kurita has been operating the ultra-pure water supply (UPWS) business for close to 20years. Over this time, we have accumulated significant skills in areas such as ensuring
stable operations for our customers or rapid ramp ups, maintenance and waste water
reclamation. Even when we are competing on an EPC basis, we are able to leveragethese skills to differentiate ourselves. I believe that we have successfully won orders byproactively highlighting our strengths to customers that are less familiar with Kurita.
In terms of the competitive environment, there are a limited number of manufacturers ofwater treatment facilities for semiconductors. Given the strong demand, water treatment
facility industry production capacity is running at high levels of utilization. This is driving
an increased need for short delivery times and rapid ramp-ups. This is an environment
which further highlights Kurita's competitive advantages such as its ability to ramp up
facilities quickly.
Q. What were sales for the service contract-type business and the solutions model in FY
ended March 2022?
A. On a non-consolidated basis, the service contract-type business generated sales ofapproximately 3.7 billion yen, while solutions model sales were approximately 1.8 billion
yen.
Q. In developing the domestic service business for general industry, are you experiencing ashortage of human resources?
A. With regard to the shift toward services in the domestic business for general industry, there
were significant overlaps in the previous domestic sales organization between the sales
subsidiary, which was chiefly focused on chemicals, and direct sales by Kurita Water.
Since last year, however, we have been transferring maintenance business humanresources into the sales subsidiary. As epitomized by the decision to eliminate the word
chemical from the sales subsidiary's name, we have been gradually developing aframework capable of handling solutions and service contracts. This framework should besignificantly stronger this fiscal year.

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Q. Have you seen technology synergies emerge in the tool cleaning business as a result ofthe acquisition of Pentagon Technologies?
A. Pentagon Technologies' business is primarily concentrated in the US and takes a different
approach to Kuritec Service, the domestic tool cleaning business. There are uniquefeatures to Pentagon's technology, production framework and products. Since last year,
we have launched collaborations to expand on this throughout the group. However, partly
because Pentagon has yet to become a wholly-owned subsidiary, the pace has beenslower than we had initially anticipated. Pentagon will become a wholly-owned subsidiaryfrom July 2022. We would like to make more progress on adopting technology andproduction systems in order to boost profitability.
Q. In your explanation of plans to improve the profitability of Kurita America, you indicatedthat you were considering entering the water treatment facilities business for theelectronics industry in the US. Are you considering a business focused on hardware or aservice-based business, focused on maintenance services or UPWS?
A. With regard to the US electronics industry business, we feel we need a deeper
understanding of the market. We are currently conducting a feasibility study. Goingforward, we believe that investments in the electronics industry will continue in many
countries and regions, concentrated around semiconductors, which are a key building
block for industry. If we can confirm the development of a broad-based electronics industry,including semiconductors as well as electronic components, in the US, we must then givedue consideration to which fields we should target and the competitive superiority we canleverage, based on an understanding of which of our services and products might meetthe needs of customers. Depending upon the result of the study, Kurita could potentiallyconsider entering a number of businesses, such as EPC, standardized facilities,maintenance and services or UPWS.
Q. This fiscal year's forecast for the business profit margin falls short of the medium-term
management plan target of 15%. Please discuss the expected magnitude of thecontribution from each of the 3 initiatives you highlighted to improve profitability. If possible,
can you disclose specific numerical targets?
A. We are not disclosing specific numerical targets but I can tell you that we expect to see
the most immediate improvement from our efforts to boost the profitability of Kurita
America. This would be followed by a further strengthening of the electronics industryrelated business. With regard to initiatives for the general industry business, we willconcentrate first on reforming the facilities business, before making the shift to a focus onservice businesses. We have clearly set out the directions for various businesses,
identifying which services and models should be targeted at which customers, as a leadin to the next medium-term management plan this fiscal year. However, progress has beenslower than expected as a result of the pandemic, which restricted our ability to show theeffectiveness of our services at our customers' sites. We expect the strength of thebusiness model to materialize in the next fiscal year and beyond.

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Q. I believe that the large-scale domestic and overseas orders for the electronics industry
that Kurita won in the last fiscal year will be one factor depressing profits in the current
fiscal year. Kurita has undertaken many initiatives to eliminate the margin volatility
associated with facilities projects but when I hear Kurita has won a large-scale order, myimpression is that Kurita reverts to its previous patterns. For the large-scale orders
recently won, does Kurita have visibility into potential follow-on business? What haschanged from before?
A. It is true that we hesitated somewhat in considering this order given we are in the midst of
shifting our focus away from EPC. On the recently won domestic order, we focused on
the fact that not only are we competitive in the EPC business because we have all of thefunctionalities required for EPC domestically, but that this was an opportunity for thecustomer to better understand our competitive advantages.
There is a necessary progression where the customer must get to know the functionality
and operability of the facility we supply and understand how to operate and maintain thefacility before we can move on to the next phase of providing services. We made astrategic decision to accept this order based on this perspective. Unlike the past, wherewe pursued large-scale opportunities simply because the opportunities were there, ourdecision to accept this business was based on our view that there was potential for further
business in the future.
Q. Where do you think there may be potential upside to the forecasts for this fiscal year?
A. The pandemic did result in slow progress on evaluating the on-site value of our solutions
by our customers, but there were also positives. As a result of higher energy costs, theincreased value of remote monitoring and the need for responses to labor shortages,
customers have come to better appreciate the value of services that they had previouslychosen not to adopt even if they did understand the benefits. Near term, responses tosuch services are increasingly positive. This makes it possible for our sales force topromote the product on the basis of value. As such, we would expect to see the tractionof our services improve gradually going forward.
Q. Please discuss your image of FY ending March 2023. Even if there were to be a lull inorders, can we expect profit growth that is not driven by topline expansion, such as theinitiatives to improve profitability at Kurita America?
A. This fiscal year will be impacted by the weakening of the yen and the rise in large-scale
investments, but from next fiscal year onward, we expect to revert to a pattern where profit
will grow faster than the topline.
Q. How should we think about the impact on the balance sheet when Kurita has madeprogress on shifting toward services in the general industry area?
A. For general industry, unlike the electronics industry, even with businesses where Kurita
owns the assets, the scale of capex for individual projects is small. For example, with aservice contract-type business which combines chemicals with sensing devices, the scaleof assets owned by Kurita would be small. We believe that we can make the transition to4 / 5

service businesses without significantly altering the structure of the balance sheet.
Q. Is it possible that a shift from a strong yen to a weak yen could lead to changes in theglobal supply chain or business styles?
A. We would need to consider how to globally procure the key components for the water
treatment chemicals and water treatment facilities businesses. However, for othercomponents and materials, we can procure locally for local production. Where we canbenefit from a horizontal approach, we would procure globally. I don't think we would needto make major changes to our current structure.
Q. What is the sensitivity of a 1 yen weakening of JPY versus USD?
A. Based on last fiscal year's results, it has a positive 380 million yen impact on sales. The
impact on business profit is negligible.
Business forecasts presented and other statements relating to the future made in thisdocument are based on information currently available and certain assumptions theCompany considers reasonable. A variety of factors may cause actual financial results andother forward-looking statements to differ materially from the forecasts.

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