Kurita Water Industries Ltd.
Earnings for the Six Months
Ended September 30, 2010
First Half of the Fiscal Year Ending March 31, 2011

( Stock code : 6370 )November 2, 2010

Table of Contents

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

Ⅲ. Reference Materials

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【 1 】 Financial Highlights【 2 】 Orders, Sales, Operating Income, and Operating Income Margin【 3 】 Water treatment chemicals【 4 】 Water treatment facilities (for the electronics industry)【 5 】 Water treatment facilities (for general industries)【 6 】 Service Business Revenue【 7 】 Overseas Businesses (sales by region and business & map of Asian locations)【 8 】 Capital Expenditures, Depreciation, and R&D Expenses【 9 】 Financial Condition

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【1】 Financial Highlights(Billions of Yen)
Fiscal year to
March 2010
First-half results

Fiscal year to
March 2011
Initial first-halfprojection

Fiscal year to
March 2011
First-half results

Year-on-yearchangeOrders

88.1

96.3

89.9+ 2.1％Net Sales

83.8

88.3

87.7

+ 4.6％

Operating Income

12.9

12.2

13.4

+ 4.1％

Ordinary Income

13.2

12.4

13.9

+ 5.6％Net Income

8.1

7.5

8.2

+ 0.7％

1

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【2】 Orders, Sales, Operating Income, and Operating Income Margin
Water treatment chemicals

Water treatment facilities

Total*Orders
Orders(Billions of Yen)
100

Sales
Sales

88.1

89.9

96.3

26.8

29.2

29.0

(Billions of Yen)
100

500

83.8

87.7

88.3

26.7

28.7

28.4

57.2

59.0

59.9

03/2010First-half results

03/2011First-half results

50

61.3

60.803/2010
First-half results

03/2011First-half results

67.3
0Operating Income(Billions of Yen)
14

denotes initial projections

Operating Income Margin

12.9

13.4

12.2

4.2

5.5

4.7

(%)
20167

8.6

7.9

7.5

19.3 16.6
15.9
15.4
15.1

15.3 13.8
13.3 12.5003/2010
First-half results

03/2011First-half results

1203/2010
First-half results

03/2011First-half results2

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【3】 Water treatment chemicals
Orders*Operating Income andOperating Income MarginSalesdenotes initial projections*

denotes initial projections*

Operating income
Operating income margin
denotes initial projections(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

3030

624

19.3 16.6
15.9
15

26.8

29.2 29.0

1526.728.7 28.4

3

5.5
4.2

003/2010
First-halfresults

03/2011First-halfresults

003/2010
First-halfresults

03/2011First-halfresults【 Major areas of growth/decline in orders/sales 】
 Japan : Increase for mainstay products, particularly cooling water treatment
chemicals from August (+)
 Overseas : Substantial growth in Indonesia, China, Singapore, Taiwan, Brazil, etc. (+)

003/2010
First-halfresults

124.703/2011
First-halfresults0【 Major determinants of change 】
 Impact of revenue growth (+)
 Efforts to reduce cost of sales (+)

3

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【4】 Water treatment facilities (for the electronics industry)
Orders*Operating Income andOperating Income MarginSales

denotes initial projections*

denotes initial projections*(Billions of Yen)

(Billions of Yen)

4040

Operating income
Operating income margin
denotes initial projections(Billions of Yen)10(%)

23.6

26

20.3 18.6

20

32.5003/2010
First-halfresults

36.2 38.6

03/2011First-halfresults【 Major areas of change 】
 Increase in hardware overseas (+)
 Recovery in maintenance services (+)
 Decline in hardware in Japan (-)
 Marginal increase in the ultrapure
water supply business (+)

20

38.0 38.0

531.1

003/2010
First-halfresults

03/2011First-halfresults【 Major areas of change 】
 Increase in hardware overseas (+)
 Increase in hardware in Japan (+)
 Recovery in maintenance services (+)
 Marginal increase in the ultrapure
water supply business (+)

013

7.3

7.703/2010
First-halfresults

03/2011First-halfresults

7.10【 Major determinants of change 】
 Effect of improved cost of sales (+)
 Recovery in maintenance services (+)
 Cost increases in the ultrapure watersupply business (-)

4

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【5】 Water treatment facilities (for general industries)
Orders*Operating Income andOperating Income MarginSales

denotes initial projections*denotes initial projections*

Operating income
Operating income margin
denotes initial projections(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

3636

2

10

5.1
1818

28.9

26.1

24.6 28.7

51

1.3

21.0 21.9

0.7003/2010
First-halfresults

03/2011First-halfresults【 Major areas of change 】
 Decline in hardware (-)
 Decline in orders from the electric
power industry (-)
 Decline in soil remediation (-)
 Recovery in maintenance services (+)

003/2010
First-halfresults

03/2011First-halfresults【 Major areas of change 】
 Decline in hardware (-)
 Decline in soil remediation (-)
 Recovery in maintenanceservices (+)

00.1
03/2010First-halfresults

03/2011First-halfresults

1.90.40【 Major determinants of change 】
 Decline in hardware (-)
 Recovery in maintenance services (+)
 Decline in soil remediation (-)

5

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【6】 Service Business Revenue
Water treatment chemicals

Service Business Revenue
in the Water Treatment Facilities Segment

Water treatment facilities (services)
Water treatment facilities (hardware)(Billions of Yen)

50

(Billions of Yen)

46.6

46.6

17.3

17.7

Ultrapurewater supplybusiness

5.2

4.8

Tool cleaning

24.1

24.1

Maintenance,etc.

03/2010First-half results

03/2011First-half results

100

87.7

83.8

28.7

26.7

2550

75.2

73.3
46.6

0

46.6

10.5

12.4

03/2010First-half results

03/2011First-half results

ServiceBusiness
Revenue06

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【7】 Overseas Businesses (sales by region and business & map of Asian locations)(Billions of Yen)
Substantial growth centering on Asia

Asia

Europe0.7
03/2010First-halfresults

0.7

N. America

9.3

Dalian5.2

03/2011First-halfresults

03/2010First-halfresults

03/2011First-halfresults

SuzhouSouthKorea

0.80.703/2010First-halfresults

03/2011First-halfresults

ShanghaiTaiwanBusiness Segment

OtherThailand

3.6 7.8 4.1

6.8 12.0

5.2
Malaysia
Singapore

03/2010First-half results

03/2011First-half results

Water treatment chemicals
Water treatment facilities

Water treatment
chemicals locations
Water treatment
facilities locations

Indonesia

1.003/2010
First-halfresults

1.4

03/2011First-halfresults

7Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011

【8】 Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures and Depreciation

Capital expenditures(ultrapure watersupply business)

Capital expenditures(excl. ultrapurewater supply business)

R&D Expenses

Depreciation

R&D Expenses(Billions of Yen)

(Billions of Yen)

824

4.0
7.7

7.1
3.0

1

Percentage of net sales

2.0

2.0

(%)

2.3

2.3

203/2010
First-half results

03/2011First-half results

41.7
0.9

1.0003/2010
First-half results

0.803/2011
First-half results008

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2011【9】 Financial Condition
AssetsLiabilities and Net Assets(Billions of Yen)

251.6

251.3

44.9

51.7
( + 6.8)

64.4

63.9

(Billions of Yen)

Cash, deposits
andMarketablesecurities

251.6

251.3

57.7

53.8

Liabilities( - 3.9)

Other current
assets

( - 0.5)

193.9
116.5

110.5

197.6

Tangible fixed
assetsNet assets( - 6)

25.8

25.1

Mar. 31, 2010

Sep. 30, 2010

( - 0.7)

Other fixed
assets( + 3.7)

Mar. 31, 2010

Sep. 30, 20109Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【 1 】 Key Assumptions【 2 】 Overview【 3 】 Orders, Sales, Operating Income, and Operating Income Margin【 4 】 Water treatment chemicals【 5 】 Water treatment facilities (for the electronics industry)【 6 】 Water treatment facilities (for general industries)【 7 】 Service Business Revenue【 8 】 Overseas Businesses (sales by region and business)【 9 】 Outlook for the Ultrapure Water Supply Business【10】 Capital Expenditures, Depreciation, and R&D Expenses【11】 Dividend Policy【12】 Share Buyback

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【1】 Key Assumptions
Water Treatment Chemicals Segment
 Demand will grow in Asia and emerging countries
 Demand will stay at low level in Japan Raw materials prices may rise

Water Treatment Facilities Segment
 Capital expenditure demand will rise in the Asianelectronics industry
 Subdued capital expenditure in Japan Demand for maintenance services will bottom out in Japan10

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【2】 Overview(Billions of Yen)
Fiscal year to
March 2010
ActualFiscal year toMarch 2011
Initial projection

Fiscal year toMarch 2011
Projection

Year-on-yearchangeOrders175.2

200.0

200.0+ 14.2%

Net Sales

178.5

195.0

195.0+ 9.2%

Operating Income

26.4

29.5

29.5

+ 11.9%Ordinary Income

27.1

30.0

30.0+ 10.7%

Net Income

17.3

17.3

17.3

+ 0.1%

11Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【3】 Orders, Sales, Operating Income, and Operating Income Margin
Water treatment chemicals

Water treatment facilities

Total

*

OrdersOrders(Billions of Yen)
200

175.2
53.4

Sales
Sales
200.0 200.0
57.9

53.7

03/2010
Actual142.1 142.1

26.4
8.2

124.8003/2011
Projection

Operating Income
29.529.5

10.1

9.3

195.0 195.0
57.3

57.3

(%)
1803/2010
Actual137.7 137.703/2011
Projection

Operating Income Margin17.6 16.2

1615

18.20

178.5

100

121.8

(Billions of Yen)
30

(Billions of Yen)
200

57.9

100

0

denotes initial projections

03/2010
Actual19.403/2011
Projection

20.2
1415.214.8
14.603/2010
Actual15.1 15.1
14.1 14.703/2011
Projection
12

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【4】 Water treatment chemicals
Orders*Operating Income andOperating Income MarginSales

denotes initial projections*denotes initial projections*(Billions of Yen)

(Billions of Yen)

60

60

Operating income
Operating income margin
denotes initial projections(Billions of Yen)(%)

1016.215.2

30053.403/2010
Actual57.9 57.903/2011
Projection

30057.3 57.3

53.703/2010
Actual

20

17.6

10.1

58.203/2011
Projection【 Major areas of growth/decline in orders/sales 】
 Japan : Growth in mainstay products (+)
 Overseas : Expansion of demand centering on Asia (+)

003/2010
Actual109.303/2011
Projection0【 Major determinants of change 】
 Impact of revenue growth (+)
 Efforts to reduce cost of sales (+)
 Increase in raw materials prices (-)

13

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【5】 Water treatment facilities (for the electronics industry)
Orders*Operating Income andOperating Income MarginSales

denotes initial projections*

denotes initial projections*(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

90

90

1845

71.0

003/2010
Actual84.2 84.2

45

82.5 82.5【 Major areas of change 】
 Expansion in hardware overseas (+)
 Subdued capex in Japan (-)
 Recovery in maintenance services (+)

003/2010
Actual03/2011
Projection【 Major areas of change 】
 Expansion in hardware overseas (+)
 Recovery in maintenance services (+)

(%)

20.9

9

14.0

67.3

03/2011
Projection

Operating income
Operating income margin
denotes initial projections

003/2010
Actual24

19.9 20.1

16.4

12

16.6

03/2011
Projection0【 Major determinants of change 】
 Impact of revenue growth(+)
 Effect of improved cost of sales (+)
 Cost increases in the ultrapure
water supply business (-)

14

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【6】 Water treatment facilities (for general industries)
Orders*Operating Income andOperating Income MarginSales

denotes initial projections*denotes initial projections*

Operating income
Operating income margin
denotes initial projections(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

60

60

610

7.2
5.5 6.5
30

50.8

57.8 57.8

30

57.5

55.1 55.1

35

4.1
3.0
003/2010
Actual03/2011
Projection【 Major determinants of change 】
 Recovery in maintenance services (+)
 Decline in soil remediation (-)

003/2010
Actual03/2011
Projection【 Major determinants of change 】
 Decline in hardware (-)
 Recovery in maintenance services (+)
 Decline in soil remediation (-)

003/2010
Actual03/2011
Projection

3.60【 Major determinants of change 】
 Decline in hardware (-)
 Recovery in maintenance services (+)
 Decline in soil remediation (-)

15

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【7】 Service Business Revenue
Service Business Revenue
in the Water Treatment Facilities Segment

Water treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)*denotes initial projections(Billions of Yen)
200

204.9

197.1

173.7

199.7

58.656.7

126.7

100

85.2

178.5

195.0

53.7

57.3

5.7

152.1
157.2

52.8

161.2

34.7

Ultrapurewater supply
business

13.1

14.4

13.1
10.5
10.2

11.0

Tool
cleaning

50

152.1

98.9

42.5

35.0
34.6

10.4

103.8

98.4

55.2

23.9

9.8

103.8
ServiceBusiness
Revenue

47.0

93.5
16.8

57.3

72.2

98.4

103.8

72.2

58.3

93.5

98.9
85.2

195.0

54.5
141.9

103.8

(Billions of Yen)
100

26.4

56.1

62.3

62.3

61.9
53.6

58.3
58.2

Maintenance,
etc.

33.8
33.8

003/2006

03/2007

03/2008

03/2009

03/201003/2011
Projection003/2006 03/2007 03/2008 03/2009 03/2010 03/2011
Projection

16

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011【8】 Overseas Businesses (sales by region and business)
Sales by Region

Asia(Billions of Yen)

30

21.8

Sales by Overseas Business Segment

N. America
EuropeOther*
denotes initial projections

31.3
29.5
2.2
1.3
3.4

3.1
1.7
2.8

1.7
1.1
2.3

29.6 29.6

22.6

30

23.7

Water treatment facilities
denotes initial projections

31.3

29.6 29.6

29.5
26.0

21.8
20.1

19.0

20.6

2.6
1.4
1.6

15

(Billions of Yen)

2.8 2.8
1.6 1.6
3.0 3.0

26.0
2.9
1.6
1.4

Water treatment chemicals*1519.0

18.7 18.7

14.9

15.0

9.6

22.3 22.3

20.1

16.6
13.4
6.8
003/2006 03/2007 03/2008 03/2009 03/2010 03/2011
Projection

0

8.9

11.2

11.0

9.4

10.9 10.9

03/2006 03/2007 03/2008 03/2009 03/2010 03/2011
Projection17

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011

【9】 Outlook for the Ultrapure Water Supply Business
Capital Expenditures
*

Sales

denotes initial projections*(Billions of Yen)

(Billions of Yen)

60

40

30

20

denotes initial projections

52.034.6

35.0 34.7

23.9
16.8
19.8

003/2008

03/2009

5.7

4.7

03/201003/2011
Projection

2.1

003/2008

03/2009

03/201003/2011
Projection18

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011【10】 Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures and Depreciation

Capital expenditures(ultrapure watersupply business)

R&D Expenses

Depreciation
Capital expenditures(excl. ultrapure
water supply business)* denotes initial projections

R&D Expenses

Percentage of net sales*denotes initial projections(Billions of Yen)

(Billions of Yen)

（％）

1664

4.3

4.5

2.2

2.2

2.3 203/2010
Actual03/2011
Projection

4.0
80

7.5
14.8

4.3 7.0 15.5 15.5

5.7

2.1 4.7

1.8

2.2 2.203/2010
Actual03/2011
Projection

30019

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011【11】 Dividend Policy
(Yen)

40

32+2+2+422
18

38+22820

34

36+6+4+2003/2005

03/2006

03/2007

03/2008

03/2009

03/201003/2011
Projection

Basic Dividend Policy
Kurita’s basic policy is to maintain stable dividends, and the company will work to increasedividends while giving due consideration to trends in results and investments in its businesses.
20

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2011【12】 Share Buyback

5.0 billion yen
Upper limit

Buyback period

2.5 million shares
As a percentage of the number of outstanding shares(excluding treasury stock) : 1.94%
November 8, 2010 – December 22, 2010

To improve capital efficiency and ensuring a flexible capital strategy.

21

Ⅲ. Reference Materials
Analysis of Changes in First-half Operating Income for the Fiscal Year Ending March 31, 2011
(Billions of Yen)

20+1.5
△0.06

△0.2

12.9

△0.8

13.4

10003/2010
First-half results

0000

Effect ofrevenue
growth*Effect of raw
materials
prices

Effect ofchange in costof sales ratio*

Increase in
SG&A
expenses

03/2011First-half results*The effects of revenue growth and change in the cost of sales ratio are calculated using the gross profit margin.

22

Kurita Water Industries Ltd.
■ U R L ■http://www.kurita.jp/■ M A I L ■ir@kurita.co.jp

Forward-looking Statements
This presentation contains forward-looking statements, business plan projections, and judgments based on
information available to management at the time of writing. Due to the existence of a variety of risk factors
and uncertainties, actual results may differ from those specified or implied by these forward-looking
statements and projections.