Kurita Water Industries Ltd.
Results Presentation
for the Year Ended March 31, 2014
(Stock code: 6370)

May 2, 2014

I

Consolidated Financial Results for the Fiscal Year Ended March 31, 2014

II

Consolidated Business Plan for the Fiscal Year Ending March 31, 2015

III Key Initiatives
Reference Material

I. Consolidated Financial Results for the Fiscal Year Ended March 31, 2014

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. Financial Condition

(Billions of Yen)

Fiscal Year to
March 2013
ActualFiscal Year to
March 2014
ActualYear-on-Year
ChangeRevised
Projections

InitialProjections

Orders

186.7

173.5

- 7.1%

181.0

197.0

Net Sales

180.1

178.1

- 1.1%

176.0

191.0

Operating
Income21.0

14.9- 29.1%

15.0

23.5

Ordinary
Income22.0

16.1- 27.1%

15.8

24.0

Net Income

11.5

9.4

- 18.5%

9.0

14.0

1

Water treatment chemicals

Orders(Billions of Yen)

200

Water treatment facilities

186.7
56.0

173.5 181.0
59.422180.1

178.1 176.0

56.1

58.8

58.0

124.1

119.3

118.003/201303/2014

58.5
100

130.7

114.003/2013

03/2014122.50Operating Income Margin
(%)

21.0
8.3

1116

14.9

15.0

8.0

8.3

14.9
13.5 14.3

10

11.7
10.2

12.6
6.9
0

denotes revised projections

Sales

200

Operating Income(Billions of Yen)*

(Billions of Yen)

1000

Total

03/201303/20146.7
403/2013

8.4

8.5

5.8

5.703/2014
2

Orders*

Operating Income andOperating Income MarginSales

denotes revised projections*

denotes revised projections

Operating income
Operating income margin*

denotes revised projections(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

60

60

1018

14.9
13.5 14.3

30056.0

59.4 58.503/2013

03/201430056.1

58.8 58.003/2013

03/2014[Major areas of change in Orders / Sales] Japan: Delayed recovery in customers’ capacity utilization in the first half (-)
 Overseas: Growth primarily in Asia (+)

5098.38.003/2013

03/2014

8.30[Major determinants of change] Impact of increase in revenue (+)
 Increase in SG&A expenses (-)

3

Orders*

Operating Income andOperating Income MarginSales

denotes revised projections*

denotes revised projections

Operating income
Operating income margin*(Billions of Yen)80

denotes revised projections(Billions of Yen)

(Billions of Yen)

(%)

80

1420

15.7
10.9 10.6
40

75.4

40

65.2 70.8

73.3

71.0 70.2

107

11.5
7.8

003/2013

03/2014003/2013[Major areas of change in Orders / Sales] Decline in hardware overseas (-)
 Decrease in ultrapure water supply business (-)
 Increase in maintenance services overseas (+)

03/2014003/2013

03/20147.4

0[Major determinants of change] Deterioration of cost of sales ratio (-)
 Impact of decline in revenue (-)
 Increase in SG&A expenses (-)

4Orders*

Operating Income andOperating Income MarginSales

denotes revised projections*

denotes revised projections

Operating income
Operating income margin*(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

60

60

1.2

30

30

055.3

50.7

48.9 51.7

denotes revised projections
(%)

32.2

1.1

48.3 47.8

0-0.8 -0.7

-1.7 1.6003/2013

03/2014[Major areas of change] Decrease in hardware for generalindustries (-)
 Decrease in maintenanceservices for general industries (-)

003/2013

03/2014[Major areas of change] Decrease in hardware forelectric power industry (-)-1.2

03/201303/2014-3[Major determinants of change] Deterioration of cost of sales ratio (-)
 Impact of decline in revenue (-)

5Assets

Liabilities and Net Assets(Billions of Yen)

263.6

77.0

(Billions of Yen)

274.9

95.3

263.6
Cash, deposits
andmarketablesecurities

54.5

274.9
55.8

Liabilities(+ 1.3)(+ 18.3)

69.8

67.2

Other current
assets(- 2.7)

209.1
86.8

77.9

219.2

Net assets

Tangible fixedassets(- 9.0)29.9
Mar. 31, 201334.6(+ 4.7)

Mar. 31, 2014

Other fixedassets(+ 10.0)

Mar. 31, 2013

Mar. 31, 20146

II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2015

1. Business Environment and 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 (sales by region and business)
9. Ultrapure Water Supply Business
10. Capital Expenditures, Depreciation, and R&D Expenses
11. Dividend PolicyJapanIndex of industrial
production

Overseas

Index of industrial
production

Domestic sales ofchemicals(Year-on-year change)(Year-on-year change)(Seasonally adjusted index; 2010 = 100)

(%)

100

20

Demand for water treatment for reuse ofwastewater and other uses is increasing
against a backdrop of water shortages andthe tightening of regulations worldwide.

Capital expenditure in the electronics industry
in East Asia varies depending on products
and customers.
8060

503/2012

03/201303/2014-10

Despite concern over a slowdown ineconomic growth in Southeast Asia and otheremerging economies, demand for energy andfood will continue to increase due to rises in
population, and the construction of auto parts,steel sheet, and chemical plants will continue
as GDP grows.

 Capacity utilization at customers is on arecovery trend.
 Recovery in capital expenditure is slow.
7

(Billions of Yen)

Fiscal Year toMarch 2014
ActualFiscal Year toMarch 2015
Projection

Year-on-Year
ChangeOrders

173.5

189.0

+ 9.0%Net Sales

178.1

185.0+ 3.9%

Operating Income

14.9

17.0+ 14.2%

Ordinary Income

16.1

17.8

+ 10.8%Net Income9.411.0+ 17.6%

8

Water treatment chemicals

Water treatment facilities

Orders

Sales(Billions of Yen)

200

(Billions of Yen)

173.5

189.0

100

(Billions of Yen)

185.0

58.8

60.9

119.3

124.103/2014
Actual03/2015
Projection

100

114.0

128.003/2014
Actual03/2015
Projection

Operating Income

20

14.9
10

178.1

200

61.0

59.4

0

8.00

(%)

17.0

Operating Income Margin

16

13.5

14.4

8.8
10

8.40

Total

6.9

8.203/2014
Actual03/2015
Projection

5.8403/2014
Actual9.2
6.603/2015
Projection

9Orders

Operating Income andOperating Income MarginSales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

7070

1018

13.5350535

59.4

61.003/2014
Actual03/2015
Projection

058.8

60.903/2014
Actual03/2015
Projection[Major areas of change in Orders / Sales] Japan: Recovery primarily in core products (+)
 Overseas: Continued growth particularly in Asia (+)

8.0003/2014
Actual14.4

8.803/2015
Projection

90[Major determinants of change] Impact of increase in revenue (+)
 Improvement in cost of sales ratio (+)
 Increase in SG&A expenses (-)

10OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

8080

1014

10.9

40

65.2003/2014
Actual72.903/2015
Projection[Major areas of change] Increase in hardware overseas (+)
 Decrease in hardware in Japan (-)

400

71.0

73.1

03/2014
Actual03/2015
Projection[Major areas of change] Increase in hardware overseas (+)
 Increase in maintenance services
overseas (+)
 Decrease in hardware in Japan (-)

11.2

507

7.8

8.2

03/2014
Actual03/2015
Projection0[Major determinants of change] Impact of increase in revenue (+)
 Improvement in cost of sales ratio (+)

11OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

(%)

60

60

0.8

20.1
30

48.9

55.1

30

0

48.3

-0.8

51.0

0.0

0

-1.7
003/2014
Actual03/2015
Projection[Major areas of change] Increase in general industries hardware (+)
 Increase in maintenance services (+)

003/2014
Actual03/2015
Projection[Major areas of change] Increase for electric power industry (+)
 Increase in general industries hardware (+)
 Increase in maintenance services (+)-0.8

03/2014
Actual03/2015
Projection-2[Major determinants of change] Impact of increase in revenue (+)
 Improvement in cost of sales ratio (+)
 Increase in SG&A expenses (-)

12Service Business Revenue
in the Water Treatment Facilities Segment

Water treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)

100.5(Billions of Yen)

100

96.1

(Billions of Yen)

193.8

200

181.2

180.1

185.0

178.1

31.6

31.5

Ultrapurewater supply
business

8.1

8.2

Tool cleaning

49.451.8

53.7

Maintenance,etc.

03/201303/201403/2015
Projection

35.1
32.4

56.7

56.1

60.9

58.8

9.3
9.7

146.4

152.8

100.5
96.1

8.5

50

157.0

90.3

154.3

150.4

91.5

93.4
Servicebusinessrevenue

0

93.4

34.8

56.4

100

91.5

90.3

28.4

36.7

33.6

27.7

30.7

03/201103/201203/201303/201403/2015
Projection

051.3

03/201156.4

03/2012

13

Sales by Region

Sales by Overseas Business Segment

Water treatment chemicals
Asia

N. America Europe

Other

Water treatment facilities(Billions of Yen)

(Billions of Yen)

38.2

40

33.6
29.3
26.4

20

3.11.3
2.8

3.0
1.4
2.3

30.5
3.0
1.2
2.3

3.3
1.3
1.8

38.2

40

3.6
1.2
1.4

33.6
29.3

30.5
17.2

26.4

20

15.9

11.5

12.0

17.8

18.5

17.7

03/201203/201303/2014

10.9

32.0
19.2

003/2011

22.5

23.9

27.2
15.5

03/201203/201303/201403/2015
Projection

003/2011

21.0

03/2015
Projection

14

SalesCapital Expenditures(Billions of Yen)

(Billions of Yen)

40

6

20

3

35.1

34.8

32.4

5.3
31.6

4.8

31.5
3.9
3.2

003/2011 03/2012 03/2013 03/2014 03/2015
Projection

02.803/2011 03/2012 03/2013 03/2014 03/2015
Projection

15

Capital Expenditures and Depreciation

Capital expenditures(ultrapure watersupply business)

Capital expenditures(excl. ultrapure watersupply business)

R&D Expenses

Depreciation(Billions of Yen)

R&D expenses(Billions of Yen)

15

(%)

53

2.4

8

7.3
6.1 14.5
3.2

0Percentage of net sales

14.5

14.3

3

5.3

2.5

4.4

4.5

03/201303/2014

2.6

4.8

1.5

4.8
2.8

2.9

2.5

2.5

03/201303/201403/2015
Projection

003/2015
Projection

016

(Yen)

50

32
28

25

22
18+434+236+238+240+242+244+246+2+6+4+20

03/2005

03/2006

03/2007

03/2008

03/2009

03/201003/201103/201203/201303/201403/2015
Projection

Basic 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.
17III. Key Initiatives

1. Direction of Management
2. Restore Earnings Power
3. Overseas Business Growth
4. Improve Capital Efficiency

Completion of the Medium-Term Management Plan,
Take Action 2014 (TA-14)

Make Group-wide efforts
Enhance the quality of the solutions
that we propose to customers
Restore earnings
power

Expand overseas
operations
steadily

Improve capitalefficiency
18

Initiative 1
Promoting cooperation between the sales division and production division

 Lowering the cost of sales ratio at the time of receipt of orders andpreventing the occurrence of additional costs

Initiative 2Standardizing designs, expanding global sourcing, and building an optimum production system Increasing cost competitivenessInitiative 3
Enhancing the added value ofsolutions to be proposed

 Maintaining prices at thetime of receipt of orders(Example) S.sensing
In the Water Treatment Chemicals
business, we have started a water
treatment management system for
optimum real-time water treatmentusing sensing technologies.

19

Overseas maintenance sales(Billions of Yen)

[China / South Korea]
Expandingmaintenance services

SouthDalian Korea
Tianjin[Europe] M&AsEurope

 Standardized water
treatment facilities

5.2
2.6 2.6 2.7

SuzhouGuangzhou

03/
03/
03/
03/
03/
03/
2009 2010 2011 2012 2013 2014

Malaysia[Southeast Asia]
Development as one area

Water treatment
facilities locations

TaiwanUS[Taiwan]Cost cutting

 Reverse osmosis membrane
treatment chemicals

Singapore

Water treatment
chemicals locations

ShanghaiThailand Chemicals forautomobiles
 Chemicals composedof food additives[US] M&As

3.3 3.5

 Products having halal
certificates Dispatching engineers andutilizing employees assigned fromJapan and local staff within the area
 Bolstering systems

 Cooling water treatment
chemicalsIndonesia

 Supplying strategic products to each other20

We will prioritize investment in businesses for growth,
including investment in M&A, and will seek to increase returns
to shareholders at the same time.

Uses of Cash
¥83 billion¥83 billion
CapitalExpenditures

Dividends

Operating cash
flow
M&As

 New and additional investments in the ultrapure
water supply business Investments in research and testing equipment
overseas Planning a dividend increase for the 11th
consecutive fiscal year The targets are companies in North Americaand Europe.
 Companies having a sales network and unique
technologies
 November 1 to November 29, 2012
Repurchased shares (7,493,665 shares).

Sharebuybacks
Generation of cash
キャッシュの創出

Uses of cash
キャッシュの使いみち August 6, 2013
Cancelled all treasury stock (13,635,662shares).

(For three years from the fiscal year ended March 31,
2013 to the fiscal year ending March 31, 2015 (forecast))

21

(Billions of yen)

21.0

- 3.8
Effect ofchange in costof sales ratio*

- 2.3

- 0.2

+ 0.2

Increase in
SG&A
expenses

Effect of raw
materials
pricesOther03/2013

14.903/2014* The effect of change in the cost of sales ratio is calculated using the gross profit margin.
22

Kurita Water Industries Ltd.
■URL■

http://ir.kurita.co.jp/■MAIL■

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.