.

Kurita Water Industries Ltd.
Results Presentation for the First Nine Monthsof the Year Ending March 31, 2016
(Stock code: 6370)

February 1, 2016

Table of Contents

IConsolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

IIConsolidated Business Plan for the Fiscal YearEnding March 31, 2016

I. Consolidated Financial Results for the First Nine
Months of the Year Ending March 31, 2016
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 Business Sales
8. Financial Condition

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

(Billions of Yen)
Fiscal Year to March 2015
Three Quarters Actual

Fiscal Year to March 2016
Three Quarters ActualYear-on-Year
ChangeOrders

137.0

159.2

+16.2%Net Sales

133.2

148.9

+11.8%

Operating Income

12.4

14.0

+13.4%

Ordinary Income

12.7

14.7

+16.1%

Profit attributable toowners of parent

7.7

9.3

+20.8%

 Orders increased in the Water Treatment Chemicals business due to the acquisition effect, and also rose in the Water
Treatment Facilities business, particularly for the electronics industry.
 Net sales declined in the Water Treatment Facilities business, but increased in the Water Treatment Chemicals business due tothe acquisition effect.
 Operating income fell in the Water Treatment Chemicals business, but rose in the Water Treatment Facilities business. Overall,operating income for the entire Group increased.

 The rates of increase in ordinary income and profit attributable to owners of parent exceeded that in operating income.

1I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

Water treatment chemicals

Water treatment facilities

Orders(Billions of Yen)
160

137.0
43.9

Sales
159.2

(Billions of Yen)
160

62.1

80

0

8

93.1

97.1

12/2014

12/2015

12.4
6.0
6.4

0

133.2

148.9

44.4

62.1

88.8

86.8

12/2014

12/2015800Operating Income(Billions of Yen)
16

Total

12/2014

Operating Income Margin
14.0(%)
1413.45.5
108.5
12/2015

9.3
7.2

612/2014

9.8
9.4
8.9
12/2015
2I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

(Billions of Yen)
70

Orders35

 In Japan, orders remained roughly flat, reflecting sluggish growth inorders for our main products due to low capacity utilization atcustomers’ plants.

62.1

43.9012/2014

 Overseas, orders rose due to the acquisition effect in Europe and theexpansion of orders in China and Southeast Asia.

12/2015(Billions of Yen)

Sales

70

 Ditto
35

62.1

44.4
012/2014

12/2015(Billions of Yen)
7.0(%)

13.4

16

 Despite the effect of higher sales, operating income declined due to anincrease in SG&A expenses in association with the acquisition.

8.9
3.5

0.0

6.0

5.512/2014

12/2015

Operating Income8

 Operating income rose except for the acquisition effect in Europe.

0

Operating Income Margin

3I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

(Billions of Yen)

Orders60

 Orders for maintenance services in Japan grew due to a recovery indemand.
30

56.3

51.4012/2014

 Orders for hardware in Japan from customers in the electronic
components business and the ultrapure water supply business rose.
 Orders for hardware overseas increased, reflecting large contracts
won in China and Taiwan.

12/2015(Billions of Yen)

Sales

60

 Sales of hardware overseas fell as the posting of sales from large
contracts was completed.
30

53.5

051.5

12/2014

 Sales of tool cleaning declined due to a withdrawal from certain lessprofitable businesses.
 Sales of maintenance services in Japan and in the ultrapure watersupply business increased.

12/2015(Billions of Yen)

16.8

10(%)
20

 Operating income increased with an improvement in the cost of sales
ratio, despite the decline in sales and an increase in SG&A expenses.

11.458.6

6.1
0Operating Income

12/2014

12/2015

100

Operating Income Margin

4

I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

(Billions of Yen)

Orders50

 Orders for soil remediation, which were at a high level a year ago,
declined.
25

041.7

40.8

12/2014

12/2015

 Orders for general industries hardware rose in the pharmaceuticalindustry, among other industries.

(Billions of Yen)

Sales

40

 Sales of general industries hardware declined due to delayed progressin construction.
20

035.3

35.3

12/2014

12/2015(Billions of Yen)(%)

1.00.5

 Sales of soil remediation and from the government and other publicagencies rose from a year ago.

10.40.0-0.10

Operating Income Operating income fell into negative territory due to a deterioration in
the cost of sales ratio associated with a decline in sales of generalindustries hardware and an increase in SG&A expenses.

-0.3
-0.5

12/2014

12/2015-1

Operating Income Margin

5

I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

Service Business Salesin the Water Treatment Facilities Segment

Water treatment chemicals
Water treatment facilities (services)(Billions of Yen)
70

Water treatment facilities (hardware)(Billions of Yen)
150

66.9

24.0

24.2

Ultrapurewater supply
business

4.8

Tool
cleaning

34.9

37.9

Maintenance,
etc.

12/2014

12/2015

148.9
133.2
62.1

44.4

128.9

109.7

75

65.3

0

65.3

35

66.9

23.5

19.9

12/2014

12/2015

06.4

 Sales from tool cleaning declined, but revenues from water treatment chemicals and maintenanceincreased.
 The service business accounted for 86.6% of total sales.

6I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

Sales by Region
Asia

North America

Sales by Overseas Business Segment

EuropeOtherWater treatment chemicals

Water treatment facilities(Billions of Yen)

(Billions of Yen)

2.2
1.1
1.1

2.5

13.3
14.9

43.6

26.7

24.9

14.3

26.7

12.4

43.6
30.3

21.9

12/2014

1.6

12/2015

12/2014

12/2015

 Sales in the Water Treatment Chemicals business rose significantly in Europe
due to the acquisition effect. Sales also increased in Asia.
 Sales in the Water Treatment Facilities business declined with the completion of the postingof sales from large contracts.
7I.

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2016

Assets

294.5
67.5

Liabilities and Net Assets

294.4(Billions of Yen)

64.3(-3.2)

81.5

81.4

Cash, deposits
andmarketablesecurities

294.5

294.4

71.0

67.0

(Billions of Yen)

Liabilities(-4.0)

Other current
assets(-0.1)

75.0

77.9

Property, plantand equipment

223.5

227.4

Net assets(+2.9)

70.5

70.7(+0.3)

Mar. 31, 2015

Dec. 31, 2015

Othernoncurrent
assets(+3.9)

Mar. 31, 2015

Dec. 31, 2015

 Liquidity on hand declined mainly due to business acquisition in Europe.
 Property, plant and equipment rose due to an increase in construction in progress in new ultrapure
water supply projects.
8II. Consolidated Business Plan for theFiscal Year Ending March 31, 2016
1. Overview
2. Orders, Sales, and Operating Income
3. Service Business Revenue
4. Overseas Business Sales
5. Capital Expenditures, Depreciation, and R&D Expenses

II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2016

(Billions of Yen)
Fiscal Year to Fiscal Year toMarch 2015
March 2016
ActualProjection

Year-on-Year
ChangeFiscal Year to Fiscal Year toMarch 2016
March 2016
PreviousInitialProjection
Projection

Orders

181.3

215.0

+18.6%

215.0

217.0

Net Sales

189.4

214.0

+13.0%

214.0

216.0

Operating
Income

19.4

19.5

+0.3%

19.5

19.5

Ordinary Income

18.9

20.0

+5.6%

20.0

20.0

Profit attributableto owners of parent

10.4

12.3

+17.9%

12.3

12.3

 Orders and net sales were revised when the first half results were announced and since then have beenleft unchanged.
 Initial profit line projections remain unchanged.
9II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2016

(Billions of Yen)
240

215.0

Orders84.2

 In the Water Treatment Chemicals business, orders will increase significantly
overseas.

69.3

75.0

 In the Water Treatment Facilities business for the electronics industry, orders
will increase for both hardware and maintenance.

52.6

55.8

 In the Water Treatment Facilities business for general industries, orders areexpected to increase, primarily for hardware.

3/20153/2016

181.3
59.4

1200

(Billions of Yen)
240

214.0

 In the Water Treatment Chemicals business, sales will increase significantly
overseas.

60.0

84.2 In the Water Treatment Facilities business for the electronics industry, sales
are expected to increase, particularly sales of maintenance.

75.4

76.1

 In the Water Treatment Facilities business for general industries, sales will
decline following a delay in progress in construction.

54.0

53.7

3/20153/2016

189.4

1200

(Billions of Yen)
20

19.4

19.5

7.9

7.0

9.7

12.1

100

Sales

1.8
3/20150.4

3/2016

Operating Income
 In the Water Treatment Chemicals business, operating income will decline due
to an increase in SG&A expenses.
 In the Water Treatment Facilities business for the electronics industry,
operating income will rise due to an improvement in the cost of sales ratio.
 In the Water Treatment Facilities business for general industries, operating
income is expected to decline due to a deterioration in the cost of sales ratio
associated with a decline in revenue from hardware and an increase in SG&Aexpenses.
Water Treatment Chemicals
Water Treatment Facilities(for general industries)

Water Treatment Facilities(for the electronics industry)10II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2016
Service Business Revenue
in the Water Treatment Facilities Segment

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

Water treatment facilities (hardware)

100(Billions of Yen)

193.8

180.1

56.4

146.4

90.3

150.4

91.5

9.3

154.9

94.9

32.4

84.2

60.0

58.8

91.5

34.8

189.4

178.1

56.1

157.0

100.5

0

90.3

214.0

220

110

100.5

180.8

96.6

36.7

33.6

27.7

34.5

33.1

3/20123/20133/20143/20153/2016
Projection

8.5

50Servicebusiness
revenue

056.4

3/2012

31.6

8.1

94.9

96.6

32.2

31.6

Ultrapurewater supply
business

6.9

Tool
cleaning

58.1Maintenance,etc.

3/2016
Projection

8.3

49.4

51.8

54.4

3/20133/20143/2015

 In the fiscal year ending March 31, 2016, service business revenue is expected to account for 84.5%
of total sales, reflecting increases in revenue in water treatment chemicals and maintenance.
11II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2016

Sales by Region
Asia

North America

Europe(Billions of Yen)
70

Sales by Overseas Business Segment
Other

66.0
4.0

Water treatment chemicals

Water treatment facilities(Billions of Yen)
70

66.0

20.3

350

29.3
3.0
1.4
2.330.5
3.0
1.2
2.3

33.6
3.3
1.3
1.8

22.5

23.9

27.2

3/20123/20133/2014

39.1
3.5
1.5
2.0

32.1

3/2015

39.1

2.6
35

39.1

3/2016
Projection

0

42.1

33.6

29.3

30.5

11.5

12.0

15.9

17.8

18.5

17.7

3/20123/20133/2014

17.3

21.8

23.9

3/20153/2016
Projection

 In the fiscal year ending March 31, 2016, European sales and water treatment chemicals sales
will increase considerably due to the contribution of business acquisitions.
 The overseas sales ratio will climb to 31%.
12II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2016

Capital Expenditures and Depreciation
Capital expenditures Capital expenditures(ultrapure water(excl. ultrapure watersupply business)
supply business)(Billions of Yen)
20

R&D Expenses

Depreciation

R&D expenses

Percentage of net sales(Billions of Yen)
6

20.0

2.5

2.6(%)
3

2.3

16.5
10

5.3 14.3
2.8
0

3

8.5

2.5
3/2014

6.0

14.4

2.5
3/2015

13.7

5.5

4.5

4.4

3/20143/20151.5

3.5
3/2016
Projection In the fiscal year ending March 31, 2016, capital
expenditures will exceed depreciation due to asignificant increase in capital expenditure in theultrapure water supply business.

03/2016
Projection

 In the fiscal year ending March 31, 2016,
investments will be made to generatetechnological synergy with KEAG and toenhance the Group’s overall strength.

013

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http://ir.kurita.co.jp/

MAIL

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Forward-looking Statements
This presentation contains forward-looking statements, business plan projections, and judgments basedon 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.