FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Six Months Ended September
30, 2017
Tokyo, Japan, October 31, 2017—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 108,107 million yen and profit attributable to owners ofparent of 7,412 million yen, or 65.99 yen per share, for the six months ended September
30, 2017 (April 1, 2017 – September 30, 2017).
Results of Operations
Total consolidated orders for the Kurita Group (Kurita Water Industries Ltd. and its
consolidated subsidiaries and equity method affiliates) in the six months ended
September 30, 2017 rose 11.4% from the level of the year-ago period, to 125,300
million yen, and net sales increased 4.1%, to 108,107 million yen.
Operating income was 10,153 million yen, up 5.3% versus the same the year-ago
period, and ordinary income was 10,274 million yen, up 6.6%. Profit attributable toowners of parent amounted to 7,412 million yen, up 13.3%.
Looking at the market environment surrounding the Kurita Group, in Japan, there
were signs of a recovery in production and capital expenditure in the manufacturingindustry on the back of a recovery in consumer spending and exports. Overseas, the U.S.
economy and the European economy continued to recover. Emerging economies,
particularly the Chinese economy, have also remained firm.
In this environment, the Group sought to develop and market competitive products
and services using IT and sensing technologies. It also proposed solutions to customers’
challenges including the reduction of environmental footprints, energy saving andimprovements in productivity. Results at Fremont Industries, LLC, a U.S. company theGroup has acquired, are being consolidated from the first quarter of this fiscal year.
Segment Information
The Group consists of two reportable segments in its segment information: Water
Treatment Chemicals and Water Treatment Facilities
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 44,582 million
yen, up 6.1% versus the same period of the fiscal year ended March 31, 2017, whilesales rose 6.3%, to 44,074 million yen.
Operating income was down 5.7% to 3,850 million yen, reflecting an increase in
selling, general and administrative expenses, despite the effect of the increase in sales.
In Japan, capacity utilization recovered at customers’ plants, and the Group sought togain new customers by proposing solutions using new products and services. This effort
produced growth in our main products, boiler water treatment chemicals and coolingwater treatment chemicals. Process treatment chemicals for paper and pulp andchemicals for iron and steel also grew. As a result, both orders and sales increased inJapan.
Overseas, both orders and sales increased, reflecting the consolidation of results at theacquired subsidiary based in the United States from the first quarter of this fiscal year.

1Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 80,717 million yen,up 14.5% versus the same period of the previous fiscal year. Sales rose 2.7%, to 64,032
million yen.
Operating income climbed 13.3%, to 6,307 million yen mainly due to the increase insales and an improvement in profitability through thorough process and costmanagement in installment in construction work.
In Japan, in the electronics industry, orders in the water treatment facilities increased
due to orders for large-scale projects. Sales also increased with progress in construction
work for large-scale projects the orders for which were received in the previous fiscal
year. Orders and sales in maintenance services increased on the strength of orders
associated with expansion and remodeling projects against a backdrop of a rise incapacity utilization at customers’ plants.
In general industries, orders and sales in the water treatment facilities both declined.
Orders and sales in maintenance services increased mainly due to demand for the
renewal and expansion of facilities at customers’ plants. Orders for water treatment
facilities for electric power declined, but sales for them increased. Although orders insoil remediation rose with large-scale projects, sales declined due to the higher sales inthe same period of the previous fiscal year, which included sales from large-scale
projects.
Overseas, orders rose significantly on orders for large-scale projects received in
China and South Korea. Sales also increased, reflecting progress in construction workfor projects the orders for which were received in the previous fiscal year.
Total sales in the ultrapure water supply business in Japan and overseas declined dueto the effect of a decrease in sales resulting from changes in contracts with a certain
customer in the previous fiscal year, despite the posting of sales from expansion
projects.
Financial Condition
Current assets totaled 153,576 million yen at the end of the second quarter (September
30, 2017), a decrease of 2,354 million yen versus the end of the previous fiscal year
(March 31, 2017). This was mainly a result of a decrease of 5,805 million yen in funds
in hand, or cash and deposits and marketable securities, which outweighed increases of
1,610 million yen in trade accounts receivable and 1,419 million yen in work in process.
The increase in trade accounts receivable was chiefly the result of relatively strong sales
in the six months under review. The rise in work in process is attributable mainly toprogress in construction in the Water Treatment Facilities business. The decrease infunds in hand, cash and deposits and marketable securities was mainly the result of theacquisition of 5,588 million yen’s worth of own shares, principally on the open market.
Non-current assets totaled 146,516 million yen at the end of the first half (September
30, 2017), an increase of 3,198 million yen versus the end of the previous fiscal year.
The increase reflected increases of 2,299 million yen in property, plant and equipment
and 1,263 million yen in investments and other assets. The increase in property, plantand equipment was primarily due to capital expenditure mainly on facilities in theultrapure water supply business in excess of depreciation. The rise in investments andother assets was attributable chiefly to an increase in unrealized gains on investment
securities due to rises in the market prices of the shares held by the Group.
Current liabilities totaled 44,868 million yen at the end of the period, an increase of2

458 million yen versus the end of the previous fiscal year. The increase mainly reflecteda rise of 906 million yen in “other” current liabilities mainly due to an increase inaccounts payable related to capital expenditure.
Non-current liabilities totaled 25,858 million yen at the end of the period, a decreaseof 222 million yen versus the end of the previous fiscal year.
Net assets totaled 229,366 million yen, an increase of 608 million yen versus the endof the previous fiscal year due mainly to a rise of 1,614 million yen in accumulated
other comprehensive income, which outweighed a decrease of 1,026 million yen in
shareholders’ equity. The decrease in shareholders’ equity was attributable mainly to a
decline of 3,978 million yen in retained earnings, which outweighed a decrease of 2,951
million yen in treasury stock (an increase in net assets). The fall in retained earnings
was attributable to a decrease of 11,390 million yen as a result of year-end dividends of
2,865 million yen for the previous fiscal year and the retirement of treasury shares of
8,525 million yen, which outweighed the posting of a profit attributable to owners ofparent of 7,412 million yen for the first six-month period under review. The decrease intreasury stock (an increase in net assets) was attributable to an increase of 5,588 million
yen mainly through market purchases and a decrease of 8,539 million yen mainly due toretirement. The increase in accumulated other comprehensive income resulted mainly
from an increase of 1,477 million yen in unrealized gains on available-for-sale securities
in association with a rise in unrealized gains on investment securities and a rise of 939
million yen in foreign currency translation adjustments due to the weakening of the yen
against foreign currencies, which outweighed a decrease of 797 million yen in deferredgains on hedges.
Cash Flows
Consolidated net cash and cash equivalents at the end of the first half of the fiscal year
(September 30, 2017) stood at 57,789 million yen, a decrease of 7,648 million yen fromthe end of the previous fiscal year (March 31, 2017). Cash flows in each category andtheir main factors are outlined below.
Cash flows from operating activities
Net cash provided by operating activities during the first half of the fiscal year ending
March 31, 2018, totaled 10,957 million yen, a decrease of 5,311 million yen from a year
ago. Inflows from income before income taxes (10,480 million yen), depreciation andamortization (8,209 million yen; including the amortization of goodwill of 561 millionyen), and other inflows were partially offset by an increase in trade notes and accounts
receivable (2,197 million yen), an increase in inventories (1,769 million yen), a decreasein notes and accounts payable-trade (1,371 million yen), income taxes paid (2,911
million yen), and other outflows.
Cash flows from investing activities
Net cash used in investing activities stood at 9,597 million yen, an increase of 13,069
million yen from a year earlier, chiefly reflecting net deposits into time deposit accountsof 1,841 million yen, payments for the purchase of property, plant and equipment,
including capital expenditures for the ultrapure water supply business, of 7,111 million
yen, and other outflows.

3Cash flows from financing activities
Net cash used in financing activities came to 9,040 million yen, an increase of 4,946
million yen from a year earlier, attributable mainly to the purchase of treasury stock of
5,588 million yen and cash dividends paid of 2,882 million yen.
Outlook for the Fiscal Year Ending March 31, 2018
As stated in the “Kurita Water Industries Revises Earnings Forecast” announced on
October 24, 2017, the consolidated earnings forecast for the fiscal year ending March 31,2018 has been revised as stated below.
The forecast is produced by the Company based on information available at the time of
publication of this document. Actual results may differ significantly from the forecast
due to a change in a range of factors.
(Consolidated earnings forecast)
Revision of the consolidated earnings forecast for the fiscal year ending March 31, 2018
(April 1, 2017 – March 31, 2018)
Net sales

OperatingincomeOrdinary
incomeProfitattributableto owners ofparent

Net income
per share(Yen)

Million yen

Million yen

Million yen

Million yen

Yen

Previous forecast (A)223,000

18,50019,00013,000115.76

Revised forecast (B)230,000

21,00021,50015,000133.57

7,000

2,500

2,500

2,000

17.81

3.1

13.5

13.2

15.4

15.4

214,187

19,452

20,074

14,506125.23

Change (B – A)
Percent change (%)
For reference:
Fiscal year ended
March 31, 20174

Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings (net)
Machinery and equipment (net)Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

As ofMarch 31, 2017
Amount

As of
September 30, 2017
Amount

72,7507,843
60,439
603
3,114
4,181
2,229
5,016
(246)
155,930

66,955
8,525
62,049
593
3,386
5,600
2,341
4,396
(272)
153,576

13,20335,93624,89674,036

11,89536,21328,22676,33515,04910,25925,30815,053
9,892
24,94534,8449,317(189)
43,972
143,318
299,249

36,917
8,509(190)
45,235
146,516300,0935

(Million yen)

As ofMarch 31, 2017
Amount

As of
September 30, 2017
AmountLiabilities
Current liabilities
Notes payable – trade
Accounts payable – trade
Income taxes payable
Provision for bonuses
Other provision
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

1,710
21,715
2,875
2,361
883
14,86344,4101,964
20,602
2,989
2,742
799
15,76944,86816,05425
9,999
26,08070,49016,341
86
9,429
25,85870,726

13,45010,993
205,586(13,891)
216,138

13,45010,993201,608(10,940)
215,112

14,792

16,269670(380)(3,593)(3)
11,484
1,135
228,758
299,249

(127)
(380)
(2,654)(8)
13,0981,155
229,366
300,0936

Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors' and corporate auditors' compensations,salaries and allowances
Provision for bonuses
Research and development expenses
Other
Total Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Income before income taxes
Income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Six months ended
September 30, 2016
Amount103,81169,48734,324Six months ended
September 30, 2017
Amount108,107
71,57536,532

8,925

9,487

1,469
2,433
11,851
24,680
9,643

1,465
2,554
12,871
26,378
10,153

99
258

94
281

89

72

226
673

286
734

93
375
208
677
9,639

209
171
232
612
10,274

9,639
3,022
6,616
74
6,542

206
206
10,480
3,015
7,465
52
7,412

7

Statement of Comprehensive Income(Million yen)

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Components:
Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

Six months ended
September 30, 2016
Amount6,616

Six months ended
September 30, 2017
Amount7,465(3,555)

1,471

882(6,049)
50

(798)
656
(4)

(186)

(17)

(8,857)(2,240)

1,306
8,771

(2,239)

8,732

(0)

39

8

Statement of Cash Flows — Consolidated(Million yen)Six months ended
September 30, 2016
AmountCash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in provision(Increase) decrease in notes and accounts receivable –trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in net defined benefit liability
Income taxes paid
Other
Net cash provided by (used in) operating activities
Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales and redemption of investment
securities
Payments associated with acquisition of business
Other payments
Other proceeds
Net cash provided by (used in) investing activities

Six months ended
September 30, 2017
Amount

9,639
7,545
507
301

10,480
7,648
561
382

5,460

(2,197)(1,290)(2,584)354(4,038)372
16,268(1,769)(1,371)234(2,911)(94)
10,962(13,476)
22,340(4,818)10(5)(9,533)
7,692(7,111)
30
(4)

9

286

(54)
(703)
170
3,472

(137)
(913)
93
(9,597)

(171)
(11)
(323)
(782)
(2,787)(16)(4,094)

(250)
(322)
4
(5,588)(2,863)(19)(9,040)Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term loans payable
Repayment of finance lease obligations
Proceeds from sales of treasury shares
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(1,222)32

14,424(7,648)Cash and cash equivalents at the beginning of the period

43,59165,438Cash and cash equivalents at the end of the period

58,01657,7899Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Six months ended September 30, 2017 (April 1, 2017 – September 30, 2017)
Not applicable(Notes on Significant Changes in Shareholders’ Equity)
Six months ended September 30, 2016 (April 1, 2017 – September 30, 2017)(1) Based on a resolution at a meeting of the Board of Directors held on February 28, 2017, 2,004,400
shares of own shares was acquired. As a result, treasury stock increased 5,586 million yen.
(2) Based on a resolution at a meeting of the Board of Directors held on March 30, 2017, treasury stock
was canceled. The retirement of treasury stock did not have any impact on the total amount ofshareholders’ equity. However, treasury stock declined by 8,525 million yen (shareholders amountincreased), and retained earnings declined by the same amount.
1) Class of stock canceled
Common stock of the Company
2) Number of shares canceled
2,963,900 shares
3) Value of shares canceled
8,525 million yen
4) Date of retirement of stock
April 6, 20175) Number of issued shares after the retirement of treasury stock
116,200,694 shares(Application of accounting unique to the creation of quarterly consolidated financial statements)
Calculation of tax expense
The Company reasonably estimates an effective tax rate after the application of tax effect accounting fornet income before income taxes for the consolidated fiscal year and multiplies the net income before
income taxes by the estimated effective tax rate.

10

(Segment Information)
1. Sales and income by reportable segment
Six months ended September 30, 2016 (April 1, 2016 – September 30, 2016)(Million yen)

Reportable Segments

Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

Sales
Sales to outside customers
Inter-segment sales or transfers

41,451
120

62,360106

103,811
227

–
(227)

103,811–

Total

41,572

62,466

104,039(227)

103,811

4,083

5,569

9,653

(9)

9,643

Segment income

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

Six months ended September 30, 2017 (April 1, 2017 – September 30, 2017)(Million yen)

Reportable Segment

Sales
Sales to outside customers
Inter-segment sales or transfers
Total
Segment income

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

44,074202
44,2763,850

64,032
128
64,161
6,307

108,107330
108,438
10,158Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)
–
(330)
(330)
(5)

108,107–108,107
10,153

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

11Supplementary Information — Consolidated(1) Order Intake(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2016
2017
Amount%Amount42,00537.3
44,582%
35.6

Water Treatment Facilities

70,47662.7

80,717

64.4

Total

112,481100.0

125,300

100.0(2) Net Sales(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2016
2017
Amount%Amount41,451
39.9
44,074%40.8

Water Treatment Facilities

62,36060.1

64,032

59.2

Total

103,811100.0

108,107100.0(3) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2016
2017
Amount%Amount
862
22.6
917

%
10.4

Water Treatment Facilities

2,951

77.4

7,901

89.6

Total

3,813

100.0

8,819

100.0

(4) Depreciation (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2016
2017
Amount%Amount
784
11.6
843

%
12.8

Water Treatment Facilities

5,954

88.4

5,744

87.2

Total

6,738

100.0

6,588

100.0

12