Kurita Water Industries Ltd.
Results Presentation for the First Nine Monthsof the Year Ending March 31, 2017
(Securities code: 6370)

February 1, 2017

Table of Contents

I

Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

IIConsolidated Business Plan for the Fiscal YearEnding March 31, 2017

III Priority Measures

I.

Consolidated Financial Results for the First Nine
Months of the Year Ending March 31, 2017

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. Capital Expenditures, Depreciation, and R&D Expenses
9. Financial Condition

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

(Billions of Yen)
Fiscal Year to March 2016
Three Quarters Actual

Fiscal Year to March 2017
Three Quarters ActualYear-on-Year
ChangeOrders

159.2

162.1

+1.8%

Net Sales

148.9

152.1

+2.2%

Operating Income

14.0

13.6

-2.8%

Ordinary Income

14.7

14.1

-4.3%

Profit attributable toowners of parent

9.3

10.1+8.9%

 Orders and net sales increased due to growth in the Water Treatment Facilities business.
 Operating income decreased due to lower profits in the Water Treatment Facilities business.

 Profit attributable to owners of parent rose mainly due to the lower tax rate.

1

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

Water treatment chemicals

Water treatment facilities

Orders(Billions of Yen)
180

Sales

159.2

162.1

62.1

61.2

900

(Billions of Yen)
180

97.1

100.9

12/2015

12/2016

152.1

62.1

61.3

86.8

90.8

012/2015

12/2016

Operating Income Margin

14.0

13.6

5.5

5.9

80

148.9

90

Operating Income(Billions of Yen)
16Total(%)
109.8

9.4
98.5

7.8

12/2015

12/2016

8.9

9.6
9.0
8.6

812/2015

12/20162

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017
(Billions of Yen)

Orders70

 Domestic orders grew with the development of new customers.
35

62.1

61.2

12/2015(Billions of Yen)

12/20160 Overseas orders grew on a local currency basis but fell in yen
terms on a stronger yen.

Sales70 Domestic sales grew with the development of new customers.
3562.1

61.3

12/2015(Billions of Yen)

12/2016088.9(%)

9.640

 Overseas sales grew on a local currency basis but fell in yen
terms on a stronger yen.

12

6

5.5

5.9

12/2015

12/2016

Operating Income Temporary costs associated with PPA due to the acquisition ofbusinesses in Europe, which had been recorded in the firstnine months last year, ceased to exist.
 SG&A expenses decreased.

0

Operating Income Margin

3

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017
(Billions of Yen)

Orders60

 Domestic orders for hardware increased due to the receipt oforders for large projects.
30

56.3

012/2015(Billions of Yen)

 Orders for hardware overseas declined in China andTaiwan.

51.9

 Orders in the ultrapure water supply business declined dueto the expiration and revision of contracts.

12/2016

Sales60

 Sales of hardware overseas increased in China and South
Korea due to steady progress in construction.
30

51.5

52.4

12/2015(Billions of Yen)

12/2016

012

16.8

(%)

14.660 Sales in the ultrapure water supply business declined dueto the expiration and revision of contracts.

20 Income declined due to smaller sales and higher costs in theultrapure water supply business.
108.6

7.7

12/2015

12/2016

Operating Income Income increased, thanks to higher sales and improved
profitability in overseas hardware business.

0

Operating Income Margin

4

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017
(Billions of Yen)

Orders50

 Orders for large projects were received in water treatment facilitiesfor thermal power plants and in soil remediation.
2548.940.8

012/2015(Billions of Yen)

 Orders for maintenance services increased in response to theaging of facilities and demand for improved efficiency.

12/2016

Sales40

 Sales of electric power industries hardware declined.
20

 Sales of hardware and maintenance services for generalindustries increased due to steady progress with construction.

38.4

35.3

 Sales of soil remediation increased.
012/2015(Billions of Yen)

12/2016

(%)

0.5

1

 Operating income decreased in electric power industries
hardware due to smaller sales.

0.3
0-0.1

0.1

0-0.3-0.5

12/2015

12/2016

Operating Income Operating income increased due to improvement in theprofitability of hardware and maintenance services forgeneral industries.

-1

Operating Income Margin

5

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017
Service Business Revenue
in the Water Treatment Facilities Segment

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

Water treatment facilities (hardware)

70

66.9

67.5

24.2

21.9

Ultrapure watersupply business

4.8

Tool cleaning

37.9

40.8

Maintenance, etc.

12/2015

12/2016(Billions of Yen)
160

148.9

152.1

62.1

61.3
4.8
35

128.8

128.9

80

66.9

67.5

19.9

23.3

12/2015

12/201600

 Service business revenue decreased in the Water Treatment Chemicals business and the ultrapure water supply business.
 Service business revenue increased in the areas of soil remediation and maintenance services for general industries.
6I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

Sales by Region
Asia

North America

Overseas Sales by Business Segment

EMEA (formerly Europe)

Other

Water treatment chemicals

Water treatment facilities(Unit: billions of yen)

(Unit: billions of yen)

1.9

2.2

13.3

17.5

15.0

14.9

43.6
1.6

12/2015

46.2
24.9

46.2

43.6
27.8

28.7

30.3

1.5

12/2016

12/2015

12/2016

 In the Water Treatment Chemicals business, sales grew on a local currency basis but declined in yen terms
due to the appreciation of the yen.
 Sales in the Water Treatment Facilities business grew due to progress with the construction of hardware forthe electronics industry.
7I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

Capital Expenditures and Depreciation
Capital expenditures(ultrapure watersupply business)

Capital expenditures(excl. ultrapure watersupply business)

Depreciation(Billions of Yen)
15
13.8

7.5

R&D expenses(Billions of Yen)
5

12.5

1.3
12/2015

4.2

2.6

Percentage of net sales

(%)
3

2.4

2.5

6.2
10.1

0

R&D Expenses

10.0

1.5

3.9

3.7

12/2015

12/20162.1012/2016

 Capital expenditures declined in the ultrapure watersupply business.

0 R&D expenses were more or less in line with the initialplan.

8

I. Consolidated Financial Results for the First Nine Monthsof the Year Ending March 31, 2017

Assets298.1
65.9

Liabilities and Net Assets(Billions of Yen)

287.8
71.2
(+5.3)

84.6

80.1

Cash, deposits
andmarketablesecurities

298.1
69.1

(Billions of Yen)

287.8
62.9

Liabilities(-6.3)

Other current
assets(-4.5)

78.4

73.3

Property, plantand equipment

229.0

224.9

Net assets(-5.1)

69.2

63.2(-6.0)

Mar. 31, 2016

Dec. 31, 2016

Othernoncurrent
assets

(-4.0)
Mar. 31, 2016

Dec. 31, 2016

 Property, plant and equipment declined because the depreciation of facilities for the ultrapure water supply business
was larger than capital expenditures.
 Investments and other assets and valuation difference on available-for-sale securities declined due to a fall in
unrealized gains on investment securities.
9II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2017

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, 2017

(Billions of Yen)
Fiscal Year to
March 2016
ActualFiscal Year to
March 2017
Revised Projection

Year-on-Year
ChangeFiscal Year to
March 2017
Initial Projection

Orders

221.3

218.0

-1.5%

223.0

Net Sales

214.4

216.0

+0.8%

222.0

Operating Income

19.8

18.5

-6.7%

21.5

Ordinary Income

20.4

19.0

-7.0%

22.0

Profit attributable toowners of parent

12.6

12.0

-4.6%

14.0

 No change to the revised projections made at the time of announcement of the consolidated financial results for the firsthalf of the year.
10II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2017
(Billions of Yen)
240

1200

221.3

218.0

Orders

83.4

82.7

 In the Water Treatment Chemicals business, yen-equivalent overseas orders
will decline due to the appreciation of the yen.

79.1

73.1

 In the Water Treatment Facilities business for the electronics industry, orders
in the ultrapure water supply business and overseas business will decline.

58.8

62.2

03/2016

03/2017
Projection

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

214.4

216.0

83.782.7

 In the Water Treatment Chemicals business, yen-equivalent overseas sales
will decline due to the appreciation of the yen.

76.1

74.2

 In the Water Treatment Facilities business for the electronics industry,ultrapure water supply business sales will decrease.

54.6

59.1

03/2016

03/2017
Projection

 In the Water Treatment Facilities business for general industries, sales areexpected to increase, particularly sales of maintenance.

(Billions of Yen)
240

1200

(Billions of Yen)
20

19.8

6.5

00.7
03/2016

Operating Income18.5

 In the Water Treatment Chemicals business, operating income will rise due toan improvement in the cost of sales ratio.

7.5

 In the Water Treatment Facilities business for the electronics industry, operating
income will fall due to lower sales in the ultrapure water supply business.

10

12.7

Sales

9.7
1.3
03/2017
Projection

 In the Water Treatment Facilities business for general industries, operating
income will rise mainly due to the effect of higher sales.

Water Treatment Chemicals
Water Treatment Facilities(for general industries)

Water Treatment Facilities(for the electronics industry)11II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2017

Service Business Revenue
in the Water Treatment Facilities Segment

Water treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)(Billions of Yen)
100

(Billions of Yen)
220

180.1

0

150.4

91.5

32.2

98.9

98.1

32.0

28.6

Ultrapurewater supply
business

6.3

Tool
cleaning

60.6

63.2

Maintenance,etc.

03/2016

03/2017
Projection

6.3
182.6

90.3

31.6

60.0

58.8

146.4

32.4

82.7

83.7

110

91.5

189.4

178.1

56.1

90.3

216.0

214.4

94.9

180.8

50

8.5

8.1

8.3

154.9

94.9

98.933.6

27.7

34.5

31.8

03/201303/201403/2015

03/2016

98.1

Servicebusinessrevenue

49.4

51.8

54.4

03/201303/201403/201535.2
03/2017
Projection0 Service business revenue is expected to fall in the ultrapure water supply business.
 Maintenance services in Japan and soil remediation are expected to remain firm.
12II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2017

Sales by Region
Asia

North America

Overseas Sales by Business Segment

EMEA (formerly Europe)(Billions of Yen)

63.9
3.0
20.7

30.5
3.0
1.2
2.3
23.9

0

Water treatment facilities(Billions of Yen)

7035

Water treatment chemicals

Other

33.6
3.3
1.3
1.8
27.2

39.1
3.5
1.6
2.0

32.1

2.4

66.0
2.8

70

63.9

66.0

20.1
39.1

2.3
35

30.5

41.2

39.2

33.6
17.3

37.8

12.0

15.9

18.5

17.7

40.8

03/2013 03/2014 03/2015 03/2016 03/2017
Projection

0

21.8

22.7

26.8

03/2013 03/2014 03/2015 03/2016 03/2017
Projection

 Sales in the Water Treatment Chemicals business are projected to decline given a decrease in yen-equivalent sales
reflecting the appreciation of the yen.
 Sales in the Water Treatment Facilities business are expected to grow with steady progress in construction.
* New geographical segments have been applied from the fiscal year ended March 31, 2016,
and they are applied to the fiscal year ended March 31, 2015 retroactively.

13II. Consolidated Business Plan for the Fiscal YearEnding March 31, 2017

Capital Expenditures and Depreciation
Capital expenditures Capital expenditures(ultrapure water(excl. ultrapure watersupply business)
supply business)

R&D Expenses

Depreciation(Billions of Yen)

R&D expenses

Percentage of net sales(%)(Billions of Yen)

18.8

20

73

2.32.5

2.5

11.4
10

15.8

8.5

14.4

13.4

6.0
0

3.5

2.5

3.0

03/2015

03/2016

6.7

13.6

1.5

4.4

5.3

5.403/2016

03/2017
Projecton

4.703/2017
Projection

 Capital expenditures for the ultrapure water supply
business are expected to fall.

0003/2015

 The focus will be on the generation of synergy with
KEG and the development of new business.

14III. Priority Measures Overview of M&A in North America

III. Priority Measures

Company Overview
Name : Fremont Industries, LLC

Location : Shakopee, Minnesota, U.S.A.
Businesses : Manufacture and sale of watertreatment chemicals
Sales : US$30.94 million (2015)

Acquisition Overview
Percentage of Equity : 100%
Interests Acquired

Aim of Acquisition
To gain a water treatment chemicals
business base in North America

Acquisition Cost : Approximately
US$40 million
Agreement Signing Date : December 19, 2016
Closing : January 3, 2017
* Above dates are in U.S. Central Time (CST)15

■URL■

http://ir.kurita.co.jp/en/■ M AI L ■ir@kurita.co.jp

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