Kurita Water Industries Ltd.
Earnings for the Six Months Ended September 30, 2009
(First Half of the Fiscal Year Ending March 31, 2010)( Stock code : 6370 )November 5, 2009

Table of Contents

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

Ⅲ. Reference Materials

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【 1 】 Financial Highlights【 2 】 Factors Behind Consolidated Financial Results【 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【 9 】 Capital Expenditures, Depreciation, and R&D Expenses【10】 Financial Condition

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【1】 Financial Highlights(Billions of Yen)

03/2009First-halfresults

03/2010First-halfprojections

03/2010First-halfresults

Year-on-yearchangeOrders

106.8

93.2

88.1

- 17.5％Net Sales

95.7

90.0

83.8

- 12.4％

Operating Income13.211.0

12.9- 2.5％

Ordinary Income

13.7

11.3

13.2

- 3.6％Net Income

7.5

6.3

8.1

+ 8.9％

1

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【2】 Factors Behind Consolidated Financial Results

Water Treatment Chemicals Segment
 Declining capacity utilization among Japanese and overseas customers
 Reduction of costs of sales and SG&A expenses

Water Treatment Facilities Segment
 Curtailing of capital expenditure in all industries
 Bottoming out of capacity utilization in the electronics industry
 Steady expansion of the ultrapure water supply business2Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

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

Water treatment facilities

Total*Orders(Billions of Yen)
100

Sales

106.8
31.2

88.1

93.2

26.8

27.6

(Billions of Yen)
100

83.8

90.0

26.7

27.1

65.0

57.2

62.903/2009
First-half results

03/2010First-half results

50

75.603/2009
First-half results

61.3

65.6003/2010
First-half results

Operating Income(Billions of Yen)
1495.730.7

50

0denotes initial projections

Operating Income Margin13.212.911.0

5.0

4.2

3.7

7(%)
16148.2

8.6

16.4

15.9 13.7
15.4 12.2
15.1 11.6

13.8

7.3

12.6
003/2009
First-half results

03/2010First-half results

1203/2009First-half results

03/2010First-half results
3

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

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

denotes initial projections*

denotes initial projections*(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

30

30

6

Operating income
Operating income margin
denotes initial projections

16.4(%)

1815.9

13.7

150

31.2

26.8 27.603/200903/2010

First-halfresults

First-halfresults

30.7

150

26.7 27.103/200903/2010

First-halfresults

First-halfresults【 Major determinants of growth/decline in orders/sales 】
 Decline for all products in all regions of Japan Decline in overseas demand

93

5.00

4.203/200903/2010

First-halfresults

First-halfresults

3.70【 Major determinants of change 】
 Lower revenue in Japan and overseas
 Switch to high-value-added products Curbing of SG&A expenses
4Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【5】 Water treatment facilities (for the electronics industry)
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)

40

40

823.6

24

17.7

17.4

20

20

39.7
32.5 35.1

003/2009

03/2010First-halfresults

First-halfresults【 Major determinants of change 】
 Decline in hardware in Japan and overseas
 Decline in maintenance services in Japan Growth in the ultrapure water supply business

437.6

6.5

31.1 34.3

003/2009

03/2010First-halfresults

First-halfresults0【 Major determinants of change 】
 Decline in hardware in Japan and overseas
 Decline in maintenance service in Japan Growth in the ultrapure water supply business

(%)

7.3

03/2009

03/2010First-halfresults

First-halfresults

126.10【 Major determinants of change 】
 Revenue growth in the ultrapure
water supply business Curbing of SG&A expenses

5Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

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

denotes initial projections*

denotes initial projections*(Billions of Yen)

36

(Billions of Yen)

(Billions of Yen)

36

2

Operating income
Operating income margin
denotes initial projections
(%)

5.9

6

5.1
4.3

18

35.9
28.9 30.5011803/2009

03/2010First-halfresults

First-halfresults【 Major determinants of change 】
 Decline in hardware Decline in maintenance services

027.4

26.1 28.603/200903/2010

First-halfresults

First-halfresults【 Major determinants of change 】
 Decline in maintenance services

3

1.60

1.303/2009

03/2010First-halfresults

First-halfresults

1.20【 Major determinants of change 】
 Decline in maintenance services
 Curbing of SG&A expenses
6Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【7】 Service Business Revenue
Water treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)

Service Business Revenue
in the Water Treatment Facilities Segment(Billions of Yen)

50

48.8

(Billions of Yen)

100

95.7

46.6(-2.2)

10.2
83.8

30.7

17.3Ultrapure
water supply
business

5.2

Tool cleaning

24.1

Maintenance,
etc.

7.5
26.7
25

50

48.8

31.1

46.6

16.2
003/2009
First-half results

10.503/2010
First-half results

003/2009
First-half results

03/2010First-half results
7

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

【8】 Overseas Businesses
Sales by Region

Asia

N. America

Sales by Overseas Business Segment

EuropeOther

Water treatment chemicals Water treatment facilities(Billions of Yen)

(Billions of Yen)

14

14

12.5

12.5

1.7
0.8
0.5

5.9
7.8
1.0
0.7
0.8

77.874.1

9.5
6.6

5.2

3.6003/2009
First-half results

03/2010First-half results

003/2009
First-half results

03/2010First-half results
8

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010

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

Capital expenditures(ultrapure watersupply business)(Billions of Yen)

32

Capital expenditures(excl. ultrapure
water supply business)

R&D Expenses

Depreciation

31.6

R&D Expenses(Billions of Yen)

(%)

44

2.5
16

30.2

1.4

2.3

22

2.40Percentage of net sales

4.903/2009
First-half results

4.0
3.0 7.1
1.003/2010
First-half results

02.003/2009
03/2010First-half results First-half results

09

Ⅰ. First-half Results for the Fiscal Year Ending March 31, 2010【10】 Financial Condition
AssetsLiabilities and Net Assets(Billions of Yen)

245.4
27.1

(Billions of Yen)

240.2
31.9
(+4.8)

Cash, deposits
andMarketablesecurities

245.4

240.2

66.8

53.8

Liabilities(-13.0)

71.6

63.8

Other currentassets(- 7.8)

126.1

122.6

Tangible
fixed assets

178.6

186.4

Net assets(- 3.4)

20.6

21.9 (+1.2)

Mar. 31, 2009

Sep. 30, 2009

Other fixedassets(+7.8)

Mar. 31, 2009

Sep. 30, 200910

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【 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【 9 】 Outlook for the Ultrapure Water Supply Business【10】 Ultrapure Water Supply Business (Trends)【11】 Capital Expenditures, Depreciation, and R&D Expenses【12】 Dividend Policy

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【1】 Key Assumptions

Water Treatment Chemicals Segment
 Customers will continue to face a strong need to boost productivity, save energy,and reduce their environmental footprint Demand will recover in Asia and emerging economies Raw materials prices remain relatively low but may resurge

Water Treatment Facilities Segment
 Net growth in the ultrapure water supply business Capital expenditure demand will rise in the Asian electronics industry
 Demand for maintenance services will bottom out in Japan11

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【2】 Overview(Billions of Yen)
03/2009
Actual03/2010
Current Projection

Year-on-yearchangeOrders

195.1

187.0

- 4.1%Net Sales

199.7

192.0

- 3.9%

Operating Income

27.9

26.0

- 6.9%

Ordinary Income

28.9

26.5

- 8.4%Net Income

16.3

15.0

- 8.0%

12

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

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

Water treatment facilities

Total*Orders(Billions of Yen)
200

Sales

195.1

187.0 187.0

58.5

55.6

(Billions of Yen)
200

55.6

1000

199.7

192.0 192.0

58.3

55.5

55.5

141.4

136.5

136.503/2009
Actual03/2010
Projection

100

136.6

131.4 131.403/2009
Actual03/2010
Projection

0

Operating Income(Billions of Yen)30

denotes initial projections

Operating Income Margin

27.9

26.0

26.0

8.4

8.0

8.0

15(%)
15

14.4
1419.5

18.0

14.0
13.8

18.0

13.5 13.5
13.2 13.2

13003/2009
Actual03/2010
Projection

14.4 14.403/2009Actual

03/2010
Projection
13

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

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

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

(Billions of Yen)

(Billions of Yen)

60

60

10

Operating income
Operating income margin
denotes initial projections
(%)

14.4

14.4

16

14.4

30

0

58.5

55.6 55.6

03/2009

03/2010

ActualProjection

300【 Major areas of growth/decline in orders/sales 】
 Japan: Demand pickup in the second half Overseas: Recovery in the second half58.3

55.5 55.503/2009

03/2010

ActualProjection

5088.48.003/200903/2010

ActualProjection

8.00【 Major determinants of change 】
 Decline in revenues in Japan and overseas
 Curbing of SG&A expenses
 Declines/rebounds in raw materials prices
14

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【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)

80

80

16

Operating incomeOperating income margin
denotes initial projections

18.6(%)

19.52018.940073.7

74.8 73.003/200903/2010

ActualProjection【 Major determinants of change 】
 Growth in the ultrapure water supply business Decline in maintenance services
 Growth in hardware orders from theelectronics industry overseas

40077.6

73.4 74.603/200903/2010

ActualProjection【 Major determinants of change 】
 Growth in the ultrapure watersupply business Decline in hardware Decline in maintenance services

801014.4

14.303/200903/2010

ActualProjection

14.10【 Major determinants of change 】
 Revenue growth in the ultrapure watersupply business Decline in hardware revenue Decline in maintenance services revenue
15

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【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)

(%)

70

70

6108.05.835

62.93556.6 58.4

63.7

63.1 61.9355.1
3.7003/2009

03/2010

ActualProjection【 Major determinants of change 】
 Decline in maintenanceservices003/2009

03/2010

ActualProjection【 Major determinants of change 】
 Decline in maintenance services

6.3003/2009

03/2010

ActualProjection

3.90【 Major determinants of change 】
 Decline in hardware revenue Decline in maintenance services revenue
16

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【7】 Service Business Revenue
Water treatment facilities (services)

Service Business Revenue
in the Water Treatment Facilities Segment

Water treatment facilities (hardware)*

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

200

199.7

100

98.9

55.5

33.5

Ultrapurewater supply
business

11.5

11.4

Tool cleaning

62.2

58.9

Maintenance,
etc.

50

98.9

103.8 104.7
61.9

0

31.0

55.5

13.1

100

104.7 103.8 (+4.9)

192.0 192.0
23.9

58.3

denotes initial projections

42.5

32.7

03/2009
Actual03/2010
Projection

31.8003/2009
Actual03/2010
Projection17

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

【8】 Overseas Businesses
Sales by Region

Asia

Sales by Overseas Business Segment

N. AmericaEuropeOther*
denotes initial projections

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

(Billions of Yen)

30

30

26.0
2.9
1.6
1.4

26.0
22.4 23.0
2.4 2.2
1.5 1.5
1.8 1.8

15

22.4 23.0
11.0
10.0 10.0
15

20.1
16.7 17.5003/2009
Actual03/2010
Projection

14.9003/2009
Actual12.4 13.003/2010
Projection18

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010

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

Sales

denotes initial projections*(Billions of Yen)

(Billions of Yen)

60

403020denotes initial projections

52.0

33.5 31.0
23.9

15.70

16.8

19.8

9.8
5.5

03/2007

03/2008

03/2009

03/2010

ActualActualActualProjection

3.0003/2007

03/2008

03/2009

03/2010

ActualActualActualProjection

19

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010【10】 Ultrapure Water Supply Business (Trends)【 to domestic large-scale LCD plants 】【 to a domestic large-scale plasma display panel (PDP) plant 】【 to a domestic large-scale LCD plant 】【 to domestic semiconductor plants 】【 to a domestic wafer plant 】【 to a domestic semiconductor plant 】【 to domestic large-scale LCD plants 】【 to an LCD plant in Singapore 】

03/2002

03/2003

03/2004

03/2005

03/2006

03/2007

03/2008

03/200920

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010【11】 Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures and Depreciation

Capital expenditures(ultrapure watersupply business)

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

60

30

55.7

3.7
03/2009
Actual5.5
3.0
2.5

8.0
14.5 14.0
5.5
2.503/2010
Projection

R&D Expenses

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

64352.0

10.90

R&D Expenses

04.4

4.4

4.4

2.2

2.3

2.303/2009
Actual03/2010
Projection

2021

Ⅱ. Full-year Business Plan for the Fiscal Year Ending March 31, 2010【12】 Dividend Policy
(Yen)

4032
28
20

22+4

34

34+2±003/2009
Actual03/2010
Projection+6+4003/2006
Actual03/2007
Actual03/2008
ActualBasic Dividend Policy
Kurita’s basic policy is to maintain stable dividends, and the company will work to increase
dividends while giving due consideration to trends in results and investments in its businesses.
22

Ⅲ. Reference Materials
Analysis of Changes in First-half Operating Income for the Fiscal Year Ending March 31, 2010
(Billions of Yen)

20+ 2.0
13.2

12.9+ 1.4
+ 0.3

10- 4.0003/2009
First-half results000

Effect oflower
revenues*

Lower costof raw
materials

Lower
SG&A
expenses

0Effect of03/2010
improved cost First-half resultsof sales ratio*

Effects of lower revenues and improved cost of sales ratio* are calculated using the gross profit margin.
*Cost of sales ratio: Costs of sales / Sales23

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.