Kurita Water Industries Ltd.

Results Presentation for
the Fiscal Year Ended
March 31, 2018
(Securities code: 6370)

May 2, 2018

Table of Contents
1

Consolidated Financial Results for the Fiscal Year
Ended March 31, 2018

p1-7

2

Consolidated Business Plan for the Fiscal YearEnding March 31, 2019

p 8 -16

3

Review of Previous Medium-Term
Management Plan
Competitive Kurita 2017(CK-17)

p17-20

4

New Medium-Term Management Plan
Maximize Value Proposition 2022 (MVP-22)ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

p21-301 Consolidated Financial Results for
the Fiscal Year Ended March 31, 2018

Overview of Results(Billions of Yen)FY ended 03/2017(Results)

FY ended 03/2018(Results)

Y-o-Y
ChangeRevised
Projections（1/31）

Initial Projections

Orders

218.7

251.4

+ 15.0%

248.0

221.0

Net Sales

214.2

236.8

+ 10.6%

235.0

223.0

Operating Income

19.5

22.5

+ 15.5%

21.7

18.5

Ordinary Income

20.1

22.1

+ 10.1%

21.7

19.0

Net Income Attributableto Owners of Parent

14.5

17.9

+ 23.4%

18.3

13.0

Net Income per Share (yen)125.23

159.37+ 27.3％162.95113.76

USD (yen)

108.8

112.1

EUR (yen)

120.3

126.6

CNY (yen)

16.3

16.6

Foreign
ExchangeRatel Orders increased significantly due to new consolidation in the Water Treatment Chemicals business and large orders
in the Water Treatment Facilities business.
l Operating income rose due to increased revenue and an improvement in the cost of sales ratio in the Water
Treatment Facilities business.
l A gain on the step acquisition of shares in an equity-method affiliate and a gain on sales of shares of other listedcompanies were posted to extraordinary income.
ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

1

Results by Segment
FY ended
03/2017(Results)

FY ended
03/2018(Results)

Orders

218.7

251.4

+ 15.0%Net Sales

214.2

236.8

+ 10.6%

Operating Income

19.5

22.5

+ 15.5%(Billions of Yen)

Y-o-Y
Changel Orders and net sales rose in both theWater Treatment Chemicals businessand the Water Treatment Facilities
business.

Total
Operating Income
MarginWater
Treatment
Chemicals

Water
Treatment
Facilities

9.1%

9.5％

Orders

82.1

90.4+ 10.0%Net Sales

81.9

90.4

+ 10.4%

Operating Income

7.2

7.2

- 0.7%

Operating Income
Margin8.8％

7.9％

Orders

136.6

161.1

+ 17.9%Net Sales

132.3

146.5

+ 10.7%

Operating Income

12.2

15.3

+ 25.3%

9.2％

10.4％

Operating Income
Marginl The operating income margin in the
Water Treatment Chemicals businessfell primarily due to the effects of the
new consolidation and increases in
SG&A expenses.

l The operating income margin in the
Water Treatment Facilities business
improved due to a decline in the costof sales ratio.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

2

Water Treatment Chemicals
FY ended 03/2017(Results)

FY ended 03/2018(Results)

82.1

90.4

+ 10.0%

Domestic

43.5

44.5

+ 2.3%

Overseas

38.6

45.8

+ 18.8%

81.9

90.4

+ 10.4%

Domestic

43.4

44.4

+ 2.4%

Overseas

38.5

45.9

+ 19.3%Operating
Income

7.2

7.2

-0.7%

Operating
Income Margin

8.8％

7.9％

(Billions of Yen)
OrdersNet Sales

Y-o-Y
ChangeOverseas Sales by Region
FY ended 03/2017(Results)

FY ended 03/2018(Results)

Asia

15.6

17.4

+ 11.2%

North America

0.5

4.1

+ 767.1%

EMEA

19.8

21.3

+ 8.0%

Other

2.6

3.1

+ 18.2%

38.5

45.9

+ 19.3%(Billions of Yen)

Total

Y-o-Y
Changel Due to a recovery in capacity
utilization rates in manufacturingindustry in Japan, sales for almost
all industries posted increased.

l In Japan, sales increased for themainstay products of boiler water,
cooling water, paper and pulp
process treatment chemicals, andchemicals for the steel industry.

l Overseas sales, excluding theimpact of the new consolidation in
North America and South Korea,rose around 8% on a yen basis, andabout 4% on a local-currency basis.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

3

Water Treatment Facilities(for the domestic electronics industry)
FY ended
03/2017(Results)

FY ended
03/2018(Results)

51.3

55.3

+ 7.8%

Facilities

4.3

9.2

+ 115.6%

Maintenance

13.1

14.6

+ 11.4%(Billions of Yen)

OrdersY-o-Y
ChangeUltrapure Water
Supply Business

27.4

24.6

- 10.3%Tool Cleaning

6.5

6.9

+ 6.1%

49.3

54.4+ 10.4%

Facilities

2.6

7.9

+ 203.6%

Maintenance

12.8

15.0

+ 17.3%Ultrapure Water
Supply Business

27.4

24.6

- 10.3%Tool Cleaning

6.4

6.9

+ 6.6%Net Salesl Facilities received large orders related
to semiconductors and electronic
components.
l Sales of the ultrapure water supply
business declined due to revisions ofcontracts.
l Sales of facilities grew due to progresswith construction in large projects.
l Sales of maintenance services rose asa result of the response to customers’
increased production.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

4

Water Treatment Facilities(for domestic general industries)
FY ended
03/2017(Results)

FY ended
03/2018(Results)

Y-o-Y
Change63.5

56.5- 11.1%

Energy andInfrastructure

51.5

44.3

- 14.0%

Soil Remediation

9.2

9.1

- 1.1%

Other

2.8

3.2

+ 10.9%Net sales

57.3

59.4

+ 3.6%

Energy andInfrastructure

45.7

48.4

+ 5.9%

Soil Remediation

8.8

7.8

- 10.9%

Other

2.8

3.1

+ 10.3%(Billions of Yen)

Ordersl Orders for maintenance services forgeneral industries increased due todemand associated with renovating old
facilities, new facilities and expansion.
l Orders for facilities for generalindustries declined, as a result of amore targeted approach to orders.
l Orders from facilities for the electric
power industries declined, but salesrose due to progress with construction.
l Sales related to maintenance services
for public offices and chemical cleaning
increased.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

5

Water Treatment Facilities (overseas)
FY ended 03/2017(Results)

FY ended 03/2018(Results)

Orders21.8

49.3+ 126.2%

Facilities

14.4

39.1

+ 171.7%

Maintenance

6.1

7.5

+ 23.1%

Ultrapure Water
Supply Business

1.4

2.8

+ 103.0%

Net Sales

25.7

32.6

+ 27.1%

Facilities

18.2

22.5

+ 23.6%

Maintenance

6.1

7.4

+ 20.9%Ultrapure Water
Supply Business

1.4

2.8

+ 103.0%(Billions of Yen)

Y-o-Y
ChangeSales by Region
FY ended 03/2017(Results)

FY ended 03/2018(Results)

Asia

24.3

31.5

North America &
Other

1.4

1.1

25.7

32.6

(Billions of Yen)

Total

l Facility orders for large projects
increased for FPDs andsemiconductors in China and forsemiconductors in South Korea.

l Facilities sales increased due toprogress with construction for large
projects for which orders werereceived during the fiscal year underreview.

l Orders and sales for the
maintenance services and ultrapure
water supply businesses posted
satisfactory growth.

Y-o-Y
Change+ 30.0%- 22.7%+ 27.1%ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

6

Financial Condition(Billions of Yen)

End of March2017

End of March
2018

ChangeCash, deposits andmarketable securities

73.3

61.1

- 12.3

Other current assets

82.5

100.9

+ 18.4

Property, plant andequipment

74.0

86.0

+ 12.0Intangible fixed assets

25.3

31.0

+ 5.7

Investments and otherassets

44.0

44.0

+ 0.0

299.2

323.0

+ 23.8Current liabilities

44.4

56.1

+ 11.7

Noncurrent liabilities

26.1

26.0

- 0.0

Total Liabilities

70.5

82.2

+ 11.7

Shareholders’ equity

216.1

222.6

+ 6.5

Other comprehensive
income

11.4

16.2

+ 4.8

Non-controlling interests

1.1

2.0

+0.9

Total Net Assets

228.8

240.9

+ 12.1

Total Liabilities andNet Assets

299.2

323.0

+ 23.8

Total Assets

l In current assets, accounts receivableand inventories increased.
l In non-current assets there were rises
in property, plant and equipment, and in
goodwill.
l In current liabilities there wereincreases in accounts payable, trade
and accounts payable, other.
l In net assets, rises in retained earnings,
foreign currency translation
adjustments, and unrealized gains onavailable-for-sale securities wereposted. Treasury stock decreased.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

7

2

Consolidated Business Plan for
the Fiscal Year Ending March 31, 2019

Business Environment
Water Treatment Chemicals
l Production in the manufacturing industry in Japan is expected to move steadily.
l Overall, economies in Europe, the United States, and Asia are predicted to post gentle growth.

Water Treatment Facilitiesl For the domestic electronics industry, although smartphone production is on the decline, demand formemory for data centers is expected to continue.
l Away from the domestic electronics industry, it is anticipated that there will be steady demand formaintenance and replacements of existing facilities.
l It is likely that there will be a lull in FPD-related investment in China, but semiconductor-related
investment in China and South Korea will remain brisk.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

8

Overview of Projections(Billions of Yen)FY ended 03/2018(Results)

FY ending 03/2019(Plan)

Y-o-Y Change

Orders

251.4

247.0

- 1.8%Net Sales

236.8

255.0

+ 7.7%

Operating Income

22.5

24.0

+ 6.8%

Ordinary Income

22.1

24.2

+ 9.5%Net Income Attributable to
Owners of Parent

17.9

17.0

- 5.0%Net Income per Share (yen)159.37151.41- 5.0%USD (yen)

112.1

110.0

EUR (yen)

126.6

130.0

CNY (yen)

16.6

16.6

Foreign
ExchangeRatel Orders are expected to decline in reaction to the strength of the previous fiscal year.
l Net sales are expected to grow as a result of the subsidiary that was newly consolidated in the Water Treatment
Chemicals business during the previous fiscal year, and due to progress in facilities construction.
l It is anticipated that the Impact of increase in revenue will more than offset increases in SG&A expenses, leading tohigher profit.
l The three-month lag in the consolidation of overseas group companies will be resolved.
ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

9

Projections by Segment(Billions of Yen)FY ended
03/2018(Results)

FY ending
03/2019(Plan)

Orders

251.4

247.0

- 1.8%Net Sales

236.8

255.0

+ 7.7%

Operating
Income22.5

24.0+ 6.8%

Total

Operating
Income margin

9.5％

Y-o-Y
Change

9.4％

90.4

102.2

+ 13.1%

90.4

102.2

+ 13.1%

Income7.2

8.2+ 14.2%

Operating
Income margin

7.9％

8.0％

OrdersWater Treatment Net Sales
Chemicals
OperatingBusiness

161.1

144.8

- 10.1%

146.5

152.8

+ 4.3%

Income15.3

15.8＋ 3.3%

Operating
Income margin

10.4％

10.3％

OrdersWater Treatment Net Sales
Facilities
OperatingBusinessl Due to the resolution of the threemonth lag in consolidation of overseas
group companies, the extent of theincrease in sales in the Water
Treatment Facilities segment will
shrink.

l The cost of sales ratio is assumed to beflat for Water Treatment Chemicals andlower for Water Treatment Facilities.

l The assumption for SG&A expenses inboth segments is that they will rise.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

10

Water Treatment Chemicals
FY ended 03/2018(Results)

FY ending 03/2019(Plan)

90.4

102.2

+ 13.1%

Domestic

44.5

45.3

+ 1.7%

Overseas

45.8

56.9

+ 24.1%

90.4

102.2

+ 13.1%

Domestic

44.4

45.2

+ 1.8%

Overseas

45.9

57.0

+ 24.1%

Operating Income

7.2

8.2

+ 14.2%

Operating Income
Margin7.9％

8.0％(Billions of Yen)
OrdersNet Sales

Y-o-Y
ChangeOverseas Sales by Region
FY ended 03/2018(Results)

FY ending 03/2019(Plan)

Asia

17.3

25.8

+ 48.3%

North America

4.1

4.6

+ 13.5%

EMEA

21.4

23.3

+ 9.0%

Other

3.1

3.3

+ 5.4%

45.9

57.0+ 24.1%(Billions of Yen)

Total

Y-o-Y
Changel It is assumed that production activity inthe domestic manufacturing industry
will be firm.
l Overseas, some impact is expectedfrom the consolidation of Hansu Co.,
Ltd., which began in the previous fiscal
year.
l Excluding the effect of Hansu, overseas
sales are forecast to grow around 7%
on yen basis and about 6% on a localcurrency basis.
l Assuming that the effect of higher sales
will more than offset increases in SG&A
expenses, it is anticipated that profits
will be higher.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

11

Water Treatment Facilities(for the domestic electronics industry)(Billions of Yen)

OrdersFY ended 03/2018 FY ending 03/2019(Results)(Plan)

Y-o-Y
Change55.3

53.3- 3.6%

Facilities

9.2

6.5

- 29.4%Maintenance

14.6

14.5

- 0.6%

Ultrapure Water
Supply Business

24.6

25.3

+ 3.0%

Tool Cleaning

6.9

6.9

+ 0.8%

54.4

56.0+ 2.9%

Facilities

7.9

8.7

+ 9.5%

Maintenance

15.0

15.0

+ 0.2%

Ultrapure Water
Supply Business

24.6

25.3

+ 3.0%

Tool Cleaning

6.9

6.9

+ 0.9%Net Salesl Orders for facilities are projected toundershoot the previous fiscal year,
but to remain firm.

l Facilities sales are seen rising, due toprogress with construction of projects
for which orders were received in theprevious fiscal year.

l Continuing on from the previous fiscal
year, orders and sales formaintenance services are expected toremain at a high level.

l In the ultrapure water supply business,some contracts will expire, but higher
sales are forecast due to thecontribution from new projects.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

12

Water Treatment Facilities(for domestic general industries)
FY ended
03/2018(Results)

FY ending
03/2019(Plan)

56.5

63.0+ 11.5%

Energy andInfrastructure

44.3

51.9

+ 17.2%

Soil Remediation

9.1

8.7

- 3.8%

Other

3.2

2.4

- 23.8%Net Sales

59.4

62.5

+ 5.2%

Energy andInfrastructure

48.4

50.2

+ 3.7%

Soil Remediation

7.8

9.9

+ 26.1%

Other

3.1

2.4

- 23.4%(Billions of Yen)

OrdersY-o-Y
Changel For electric power industries, orders
are expected to rise and progresswith construction from the orderbacklog is expected to lead tohigher sales.

l In facilities for general industries,
despite expected increases inorders due to large projects, it isprojected that sales will be lower asa result of a more targeted
approach to orders.

l Maintenance orders are expected toincrease as a result of continued
demand for facilities replacement inboth the private and public offices.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

13

Water Treatment Facilities (overseas)(Billions of Yen)FY ended 03/2018(Results)

FY ending 03/2019(Plan)

Y-o-Y
Change49.3

28.5- 42.2%

Facilities

39.1

16.8

- 57.2%

Maintenance

7.5

8.9

+ 18.8%Ultrapure Water
Supply Business

2.8

2.9

+ 5.8%Net Sales

32.6

34.3

+ 5.1%

Facilities

22.5

22.8

+ 1.2%

Maintenance

7.4

8.6

+ 16.9%Ultrapure Water
Supply Business

2.8

2.9

+ 5.8%

OrdersSales by Region(Billions of Yen)FY ended 03/2018(Results)

FY ending 03/2019(Plan)

Y-o-Y
Change

Asia

31.5

32.6

+ 3.4%

North America

1.1

1.7

+ 54.6%

Total

32.6

34.3

+ 5.1%l Although orders for facilities are
expected to decline in reaction to
the strength of the record-setting
previous fiscal year, they are
projected to remain at a high level.

l Facilities sales are expected toincrease as the order backlog fromthe previous fiscal year is converted
into sales, but the resolution of thethree-month lag in consolidation ofgroup companies means that theincrease in January to March in2018 will not be reflected in sales.

l Maintenance services are expected
to grow steadily.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

14

Breakdown of Service Business Sales(Billions of Yen)FY ended 03/2017(Results)

FY ended 03/2018 FY ending 03/2019(Results)(Plan)

Water Treatment
Chemicals Business

81.9

90.4

102.2

Water Treatment
Facilities Business

97.8

100.5

108.8

Ultrapure Water Supply
Business

28.8

27.3

28.2

Tool Cleaning

6.4

6.9

6.9

Soil Remediation

8.8

7.8

9.9

Domestic Maintenance

47.7

51.1

52.8

Overseas Maintenance

6.1

7.4

8.6

-

-

2.4

179.6

190.8

211.0

Other
Total

l Sales growth in the ultrapure watersupply business to switch fromnegative to positive.

l Domestic maintenance sales are
expected to rise, on the assumptionof steady demand.

l Judging by our track record forfacilities installation, overseas
maintenance sales is expected totrend upwards.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

15

Capital Expenditures, Depreciation, and R&D Expenses
FY ended
03/2017(Results)

FY ended
03/2018(Results)

FY ending
03/2019(Plan)

Capital Expenditures(Property, plant and equipment)

9.3

22.1

26.0

Ultrapure Water Supply Business

6.3

16.2

18.0

Other than the above

3.0

5.8

8.0

(Billions of Yen)

Depreciation(Property, plant and equipment)

13.2

13.5

13.5

Water Treatment Chemicals Business

1.6

1.8

2.0

Water Treatment Facilities Business

11.6

11.7

11.5

5.0

5.3

5.5

Water Treatment Chemicals Business

2.1

2.1

1.7

Water Treatment Facilities Business

2.9

3.2

3.8

R&D Expensesl In the fiscal year ended March 31,
2018, capital expenditure in theultrapure water supply business andinvestment in the replacement andreinforcement of other facilities rose.

l In the fiscal year ending March 31,
2019, capital expenditure in theultrapure water supply business willremain at a high level.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

16

3

Review of Previous Medium-Term
Management Plan
Competitive Kurita 2017 (CK-17)

Performance targets and results
Although profits did not reach projections,overseas sales doubled(Billions of Yen)FY ended 03/2015(Results)

FY ended 03/2018(Plan)FY ended 03/2018(Results)

Three-year Average
Growth Rate

Net Sales

189.4

235.0

236.8

+ 7.7%

Operating Income

19.4

24.5

22.5

+ 5.0%

Operating Income Margin

10.3％

10.4％

9.5％

Overseas Sales

39.1

81.3

78.6

Overseas Sales Ratio

20.6％

34.6％

33.2％

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

―+ 26.2%―17

Achievements and Challenges
While progress was made with these measures,the establishment of a rock-solid earnings base is not yet complete
Priority Measures

Achievements

Challenges

1

Cultivate New Markets• Expanding the business in
Europe, North America and the
Middle East
• Investments in start-ups• Growth accompanied by improved
profitability• Accelerating the commercializationof new businesses

2

Optimize production
systems and utilize theGroup’s network• Obtaining and utilizing new
production bases through M&A• Improving productivity in China
and South Korea• Further global optimization of
production bases

3

Create competitive
products and services• Created DReeM Polymer,
S.sensing GW, KWSS,Standardized Wastewater
Reclamation system• New business model anddevelopment of customeroriented solutions still a workin progress• Raise capital efficiency bydirecting funds to investing in
growth and shareholder returns• Have not reached the averagelevel for Japanese companies

4

Improve capitalefficiencyⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

18

Results of Allocation of Funds
Allocated funds in excess of operating cash flow
to growth investments and shareholder returns¥88.3 billion¥81.9 billion

l 13 consecutive years of dividend increases

Dividends
Shareholder
returns

Share buybacks

l From the fiscal year ended March 31, 2017,
through the fiscal year ended March 31, 2018

M&A

l Acquired water treatment business in the UnitedStates, made equity-method affiliate in South
Korea a subsidiary

Operatingcash flow
Investment ingrowthCapitalexpenditures

キャシュの創出
Generation of cashl Investments in ultrapure water supply business fordomestic and overseas semiconductors and LCD,
etc.

キャッシュの使いみち
Uses of cash

(From the fiscal year ended March 31, 2016, through the fiscal year ended March 31, 2018,
three-year cumulative basis)ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

19

Shareholder Returns
Continued to increase the dividend, also implemented share buybacks(Billions of Yen)

█ Share buybacks

14█ Dividends

10.9

11.3

5.2

5.6

5.5

5.7

5.8

FY 3/2016

FY 3/2017

FY 3/2018

Dividends
per share

¥48

¥50

¥52
(forecast)

Payout ratio

44.3％

39.9％

32.6％
(forecast)

7

6.5
1.0

l Continued to increase the dividend, based on
our policy of stable increases in dividends anda target payout ratio of 30% to 50%.
l Implemented share buybacks, having
considered investment opportunities andfunds on hand.

0ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

20

4

New Medium-Term Management Plan
Maximize Value Proposition 2022 (MVP-22)

Establishes the “Kurita Group Philosophy System”
From “21st Century Vision” to “Kurita Group Philosophy System”

Core Values
Corporate
Philosophy

With its corporate philosophy as the starting point, themissions that the Kurita Group will fulfill in society into the
future, its medium- and long-term visions, and its ways ofthinking and values as the foothold for achieving them
have been reorganized and stipulated as the Kurita Group
Philosophy System.

Corporate Vision

Former corporate vision

Basic Policy

Advanced water and environmental management company

1. Kurita Group Code of Conduct
2. Corporate Governance Policies
3. Basic Policies for Constructing an Internal Control System

New corporate vision

4. CSR Policy
5. Kurita Group BCM Policy (Business Continuity Management)
6. Kurita Group Business Policy“A Creator of unique value tothe solution of water and environment“,
contributing to the realization of a sustainable society．

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

21

Ideal Form of the New Corporate Vision“A Creator of unique value to the solution of water and environment“,
contributing to the realization of a sustainable society．
1

Kurita Group will seek to create shared value with society such as environmental
preservation and the effective use of resources, and will realize its corporate
philosophy, by continuing to innovate and through businesses contributing to thenatural environment, industry and people's lives.

2

Kurita Group will, as an indispensable partner, create value for customers such as“pursuit of safety,“ “productivity enhancement“ and “reduction of environmental
impact.“3

Kurita Group will evolve its “service business“ and will provide customers, atspeed, with comprehensive solutions making full use of Kurita's technologies,
products and services in chemicals, facilities and maintenance.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

22

Establishing a CSR Policy
In order for the Kurita Group to continue to grow as it works to realize its
corporate philosophy, CSR has been positioned at the heart of management strategy

Definition of CSR

The Kurita Group’s responsibility for its impacts on society

Objectives

1. Creating and maximizing shared value for the Kurita Group and society
2. Identifying, preventing and mitigating possible adverse impacts by the Kurita GroupCSR policy

Provide solutions to issues related to water and the environment, and fulfill responsibility
for the future
Basic themes

Growth opportunity themes

1. Provide highly safe services andproducts

4. Solve issues related to water
resources

2. Conduct fair business activities

5. Realize sustainable energy use

3. Respect human rights

6. Reduce waste
7. Advance industrial production
technologiesⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

23

The Ideal Form, Five Years from Now
Global value creator with a rock-solid earnings baseInnovation through “Seeing” from three perspectives“Seeing from thecustomer”
Business processes
from the customer's
perspective“Seeing fromvalue”“Seeing fromoutside”

Value pricing

Open innovationⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

24

The Two Pillars
The two pillars of our initiatives are Investment in growth and improved profitability

Electronics
industry field

Energy andinfrastructure
field

Generalindustries field

Existing
overseasbusinesses

OverseasbusinessbaseNewbusinesses

Investment in growth

Improved profitability

Ultrapure water supply business
M&A

Review of business portfolio

R&D

Providing integrated solutionsⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

25

Basic Policy and Priority Measures

Basic Policy
Maximize close relationships with customers by redefining preconceived ideas anddramatically raising the quality and speed of our work.

Priority Measuresl Development of CSV Businessl Enhancement of total solutions

l Rebuilding of plant production systeml Creation of new business and thepromotion of innovationl Strengthening the foundation andpromotion of research and development

l Establishment of the Group governancesystemⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

26

Develop CSV BusinessContribute to the natural environment, industry and people's lives,
provide integrated solutions that generate social valuel Developing businesses that contribute to preventing and removing environmental
pollution, utilizing renewable energy, and treating and recycling waste.
l Develop solutions for the effective use of water resources, such as wastewater
reclamation.
l Create contract-type service businesses that allow risks to be hedged and profits tobe secured.
l Develop solutions that contribute to the customer's product quality and stable
operation.

ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

27

Create New Businesses and Promote Innovation
As well as expanding domain of existing businesses,
create new business domains that will become pillars of earnings
l Create new businesses through the promotion of open innovation.
l Realize innovation through business processes and business models that make full use of IoT/AI.
l Expand our technological infrastructure.
l Strengthen the global research and development base, and make optimal use of people,
technology and facilities.

Kurita Global Technology Center

Kurita Europe GmbHⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

Kurita R&D AsiaPte.Ltd.
28

Acceleration of Investment and Utilization of Capital
Concentrated investment in growth fields,
and efficient and effective use of capital
Utilization of
liabilities

Share buybacks

l Consider implementing after taking into accountdemand for funds and share price

Dividendsl Continue dividend increases whenever possible

M&A

l Utilize for obtaining business basis, irrespective ofwhether they are existing or new

Compression ofassetsOperating cash
flow
Capitalexpenditures

Sourcesof funds
資金の源泉

l Accelerate investments in ultrapure watersupply business, new business models

Uses of funds
資金の使途ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

29

Management Targets
Place emphasis on profitability and capital efficiency
Net sales
Organic growth rate

Operating income margin

3％ or more

15

Return on equity（ROE）

Adoption of management using
return on invested capital (ROIC)10

Aim for
improved capital efficiency
in each business segment％ or more％ⓒ2018 KURITA WATER INDUSTRIES LTD. All Rights Reserved.

30

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.