Kurita Water Industries Ltd.

Results Presentation forthe First Nine Months of the Fiscal YearEnding March 31, 2020
(Securities code: 6370)

February 12, 2020

Table of Contents
1Consolidated Financial Results for the First Nine Months of
the Fiscal Year Ending March 31, 2020

p1-10

2

Forecast for the Fiscal Year Ending March 31, 2020

p11-123Topics

p13-14Voluntary Application of International Financial Reporting Standards (IFRS)

Voluntary Application of IFRSFrom the first quarter of the fiscal year ending March 31, 2020, our disclosures are based on IFRS.
The figures for the same period of the previous fiscal year have been reclassified in compliance withthese standards.

Business Profit
Business profit is calculated by deducting cost of sales and SG&A expenses from net sales.
Although business profit is not an item required to be included in financial statements, we disclose it
within voluntary disclosure materials, deeming it useful for comparisons with operating income under
the Japanese GAAP of the past.

1

Consolidated Financial Results for
the First Nine Months of the Fiscal Year Ending March 31, 2020

Overview of Results
Nine months ofFY ended
03/2019Nine months of
FY ending
03/2020

Orders200.6

196.1(2.2%)

Net Sales

191.7

197.1+2.8%

Business Profit

18.4

20.3+10.4%

Net of Other Income andExpenses(5.1)

4.7

ーOperating Profit

13.3

24.9+87.8%

Profit Before Tax

13.8

24.4+77.2%

Profit Attributable toOwners of Parent

7.8

17.0+118.5%

Earnings per Share (yen)69.15

151.09+118.5%

USD (yen)111.14108.67

EUR (yen)

129.49121.05CNY (yen)

16.61

15.60

(Billions of Yen)

Foreign
ExchangeRate

YoY Change⚫ The effects of new consolidation of U.S. Water Services, Inc. (“U.S. Water”), Avista Technologies, Inc. and Avista Technologies (UK) Ltd. (“Avista”) areincluded in the period under review.
⚫ Other income and expenses includes a loss on the transfer of the aluminum compound business in Europe and the impairment loss on goodwill of a
Chinese subsidiary in the same period of the previous fiscal year and a gain on the sale of ultrapure water supply business assets in the period underreview.

1Results by Segment
Nine months of
FY ended 03/2019

Nine months ofFY ending 03/2020

YoY ChangeOrders

200.6

196.1

(4.5)

Net Sales

191.7197.1+5.4

Business Profit

18.4

20.3+1.9

Business Profit
Margin

9.6%

10.3%

Operating Profit

13.3

24.9+11.7

Orders77.8

86.3+8.5

Net Sales

77.4

86.9+9.4

Business Profit

8.0

9.2+1.2

Business Profit
Margin

10.3%

10.6%

Operating Profit

3.4

8.9+5.6

Orders122.8

109.8(13.0)

Net Sales

114.2

110.2(4.0)

Business Profit

10.5

11.1+0.6

Business Profit
Margin

9.2%

10.1%

Operating Profit

10.0

16.0

(Billions of Yen)

(Billions of Yen)

Total

Water
Treatment
Chemicals

Water
Treatment
Facilities+6.0⚫ Orders and net sales decreased in the Water
Treatment Chemicals business, excluding theimpact of new consolidation.
⚫ Orders in the Water Treatment Facilities businessdecreased significantly for the domestic
electronics and general industries.
⚫ In both segments, business profit rose due toan improved cost of sales ratio.

2Factors in Change in Business Profit (YoY)(Billions of Yen)

2420

18.4

Effect of new
consolidation

Effect ofdecreased
sales

+0.3

(3.4)

Cost of sales
ratio
improvement

SG&A
expensesdecrease

+4.9

+0.0

20.3

16128

FY3/193/19
FY
1H monthresults
nineresults

Decrease in net sales
in overseas facilities
and soil remediation

Decreases in additional costs
for facilities and depreciation,and improvement in cost of
sales ratio for overseas
chemicals

FY3/203/20
FY
1H results
ninemonthresults

403

Water Treatment Chemicals
Nine months of
FY ended
03/2019Nine months of
FY ending
03/2020

YoY Change

77.8

86.3

+8.5

Domestic

34.6

34.7

+0.1

Overseas

43.2

51.6

+8.4

77.4

86.9

+9.4

Domestic

34.5

35.2

+0.7

Overseas

43.0

51.7

+8.7

Business Profit8.09.2+1.2

Business Profit Margin

10.3%

10.6%

Operating Profit

3.4

8.9

(Billions of Yen)

(Billions of Yen)

OrdersNet Sales+5.6

Overseas Sales by Region⚫ Domestic sales decreased for process treatment
chemicals for oil and pulp and paper, and increased
for process treatment chemicals for steel.
⚫ Overseas sales decreased due to the impact offoreign exchange and lower sales in Europe andChina, excluding the effects of new consolidation.
⚫ Business profit increased due to the impact of new
consolidation and improvement of the cost of sales
ratio.

⚫ Operating profit increased significantly. During thesame period of the previous year, the Group recordeda loss on the transfer of the aluminum compoundbusiness in Europe and the impairment loss on
goodwill of a Chinese subsidiary.

Nine months ofFY ended
03/2019Nine months ofFY ending
03/2020

YoY Change

Asia

21.1

20.6

(0.5)

Factors in Change(Billions of Yen)

North America

3.5

14.9+11.5

Organic Change

(1.1)

EMEA

16.3

14.2

(2.1)

(2.2)

Other

2.0

2.0

Effect of Foreign
Exchange Rate(0.1)

43.0

51.7+8.7

New
Consolidation+12.0(Billions of Yen)Total4Water Treatment Facilities (for the domestic electronics industry)
Nine months of
FY ended
03/2019Nine months of
FY ending
03/2020

YoY Change

47.9

40.4(7.5)

Facilities

10.7

2.6(8.1)

Maintenance

12.1

12.9+0.7

Ultrapure Water
Supply Business

19.7

19.6

(0.2)

Tool Cleaning

5.3

5.3+0.1

Net Sales

42.6

42.0(0.5)

Facilities

5.9

5.6(0.4)

Maintenance

11.6

11.6+0.0

Ultrapure Water
Supply Business

19.7

19.6

(0.2)

Tool Cleaning

5.3

5.4+0.1(Billions of Yen)

Orders⚫ Orders for facilities decreased due to the absence ofthe orders for large projects placed in the same
period of the previous fiscal year.
⚫ In maintenance services, expansion and repair
demand continued at customer facilities.
⚫ The ultrapure water supply business saw a slightdecrease due to some contract renewals andchanges, despite the commencement of services fora new contract.

5

Water Treatment Facilities (for domestic general industries)
Nine months of
FY ended
03/2019Nine months ofFY ending
03/2020

YoY Change

48.4

41.6

(6.8)

Energy and Infrastructure

36.633.3(3.3)

Soil Remediation

9.6

6.1(3.6)

Other

2.1

2.2+0.0

Net Sales

41.7

41.9+0.2

Energy and Infrastructure

32.2

34.1+1.9

Soil Remediation

7.5

5.7(1.8)

Other

2.0

2.1+0.1(Billions of Yen)

Orders⚫ Energy and infrastructure orders decreased. Orders
for facilities for general industries increased, whileorders for facilities for the electric power industry
and maintenance services decreased.

⚫ Energy and infrastructure sales increased. This wasa result of progress in construction from the orderbacklog for facilities for the electric power industry
and growth of public sector maintenance services
and chemical cleaning services.
⚫ Soil remediation orders and sales decreased,reflecting the absence of the large projects recordedin the same period of the previous fiscal year.

6Water Treatment Facilities (Overseas)
Nine months of
FY ended
03/2019Nine months of
FY ending
03/2020

YoY Change

26.5

27.9

+1.4

Facilities

17.1

19.7

+2.6

Maintenance

7.0

5.9

(1.1)

Ultrapure Water
Supply Business

2.4

2.3

(0.1)

Net Sales

29.9

26.3

(3.6)

Facilities

22.1

17.3(4.7)

Maintenance

5.5

6.7

+1.3

Ultrapure Water
Supply Business

2.4

2.3

(0.1)

(Billions of Yen)

Orders⚫ Orders decreased, excluding the effects of newconsolidation.
⚫ Orders and sales in China and South Korea
decreased, reflecting the absence of the large
projects recorded in the same period of the previous
fiscal year and the impact of foreign exchange.

Sales by Region(Billions of Yen)

Asia
North America and Other
Total

Nine months of
FY ended
03/2019Nine months ofFY ending
03/2020

YoY Change

29.2

19.9

(9.3)

0.8

6.4

29.926.3Factors in Change(Billions of Yen)
Organic Change

(7.8)
(1.1)

+5.6

Effect of Foreign
Exchange Rate

(3.6)

NewConsolidation+5.3
7

Breakdown of Service Business Sales
Nine months ofFY ended
03/2019Nine months ofFY ending
03/2020

YoY Change

Water Treatment
Chemicals

77.4

86.9

+9.4

Water Treatment
Facilities

79.8

80.3

+0.5

Ultrapure Water Supply
Business

22.1

21.8

(0.3)

Tool Cleaning

5.3

5.4

+0.1

Soil Remediation

7.5

5.7

(1.8)

Domestic Maintenance

37.8

39.1

+1.2

Overseas Maintenance

5.5

6.7

+1.3

Other1.6

1.7+0.0

157.3

167.2+9.9(Billions of Yen)

Total

⚫ In addition to the impact of new consolidation in Water
Treatment Chemicals, sales increased in domestic andoverseas maintenance.
⚫ Public sector maintenance services and chemicalcleaning services contributed to the increase indomestic maintenance.
⚫ The service business increased from 82% to 85% as apercentage of total net sales.

8Capital Expenditures, Depreciation and R&D Expenses(Billions of Yen)

Nine months ofFY ended
03/2019Nine months ofFY ending
03/2020

YoY Change

Capital Expenditures(Property, Plant andEquipment)

25.5

19.4

(6.0)

Ultrapure Water
Supply Business

18.2

10.7(7.5)

Other than the above

7.3

8.7+1.5

Depreciation(Property, Plant andEquipment)

12.3

11.2

(1.2)

Water Treatment
Chemicals

2.3

2.4+0.1

Water Treatment
Facilities

10.0

8.8(1.2)

4.0

4.1+0.1

Water Treatment
Chemicals

1.4

1.5+0.1

Water Treatment
Facilities

2.6

2.6

(0.0)

R&D Expenses⚫ Although capital expenditures decreased
compared to the same period of the previous year
when large investments were made in theultrapure water supply business, they remained ata high level.
⚫ Depreciation decreased, primarily in the ultrapure
water supply business.
⚫ R&D expenses were in line with the same periodof the previous year.

9Financial Condition(Billions of Yen)

End of March 2019

End of December 2019

ChangeCash and Cash Equivalents

35.5

44.0

+8.5

Other Current Assets

115.6

118.9

+3.3

Total Current Assets

151.1

162.9

+11.7

Property, Plant and Equipment

103.3

110.3

+7.0

Goodwill

38.0

45.7

+7.7

Other Non-current Assets

66.3

79.1

+12.8Total Non-current Assets

207.5

235.2

+27.6

358.7

398.0

+39.4

Current Liabilities

73.1

99.8

+26.7

Non-current Liabilities

46.4

49.0+2.6

Total Liabilities

119.6

148.8

+29.3

Total Equity Attributable toOwners of Parent

237.2

247.2

+10.0

Non-controlling Interests

1.9

1.9

+0.0

239.1

249.2

+10.1

358.7

398.0

+39.4

Total Assets

Total Equity
Total Liabilities and Equity⚫ Property, plant and equipment increased in theultrapure water supply business and tool cleaning.
⚫ Goodwill increased as a result of newconsolidation of Avista.
⚫ Current liabilities increased as a result ofborrowing through a commitment line agreement.

102Forecast for the Fiscal Year Ending March 31, 2020

Overview of Business Forecast
FY ended 03/2019
Results

FY ending 03/2020
Forecast

YoYOrders

258.4

270.0

+4.5%

270.0

Net Sales

257.3

273.0

+6.1%

273.0

Business Profit

25.7

26.5

+3.2%

26.5

Net of Other Income andExpenses

(5.8)

3.5

－3.5

Operating Profit

19.9

30.0

+51.1%

30.0

Profit Before Tax

20.3

30.2

+49.0%

30.2

Profit Attributable toOwners of Parent

12.1

21.3

+76.8%

21.3

107.33189.69+76.7%

189.69USD (yen)

110.9

109.0

109.0

EUR (yen)

128.4

122.0

122.0

CNY (yen)

16.5

15.8

15.8

(Billions of Yen)

Earnings per Share (yen)Foreign
Exchange
Rate

Previous Forecast(Announced on Nov. 11)⚫ The orders, net sales and profit forecasts are unchanged from the previous announcement.

11Forecasts by Segment(Billions of Yen)

Total

Water
Treatment
Chemicals

Water
Treatment
Facilities

FY ended 03/2019
Results

FY ending 03/2020
Forecast

YoY

Previous Forecast(Announced onNov. 11)

Orders258.4

270.0+11.6

270.0

Net Sales

257.3

273.0+15.7

273.0

Business Profit

25.7

26.5+0.8

26.5

Business Profit
Margin

10.0%

9.7%

Operating Profit

19.9

30.0+10.1

30.0

Orders102.9

117.4+14.5

117.4

Net Sales

102.1

117.2

+15.1

117.2

Business Profit

9.8

11.5+1.7

11.5

Business Profit
Margin9.6%

9.8%

Operating Profit

4.3

10.5+6.2

10.5

Orders155.5

152.6(2.9)

152.6

Net Sales

155.2

155.8+0.6

155.8

Business Profit

15.9

15.0(0.9)

15.0

Business Profit
Margin

10.2%

9.6%

Operating Profit

15.5

19.5⚫ Forecasts for both Water Treatment Chemicals
and Water Treatment Facilities are unchanged
from the previous announcement.
⚫ The same applies to forecasts by region and byindustry.

9.7%

9.8%

9.6%

+4.0

19.5
123Topics

Acquisition of Additional Shares of Pentagon Technologies
Making it a subsidiary and strengthening of position in the electronics industry as a global
supplier of tool cleaning
Kurita’s
shareholding ratio
51%(Scheduled in April2020)

Established

1998

Businessdetails

Tool cleaning business, development of measuring
instruments for surface particles on semiconductormanufacturing equipment, cleanroom-related services

Employees

Approx. 700

CapitalUSD 2,000

Net Sales

USD 89,790 thousand(year ended December 31, 2018)◼ Head office⚫ Offices13

Establishment of New R&D Base
Establishment of cutting-edge development environment and strengthening of next-generation
technological innovation◼ Positioning of the new R&D base• Hub in the global R&D system• An R&D facility open to society (a variety ofstakeholders)◼ The current development center in Japan will be
relocated at the end of March 2022 (land to be sold)
Overview of new R&D baseLocation

Akishima-shi, Tokyo

Site area

30,381.37ｍ²

Opening date

Scheduled for April 2022

Construction
costApprox. 30 billion yen◼ It is assumed that the construction costs will beprocured through the company’s own funds and debt
financing14

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.