Summary of the Q&A Session at the Financial Conference Callfor the First Quarter of the Fiscal Year Ending March 31, 2020
Date and Time: August 14, 2019 (Wed.) 11:00 - 11:40
Notice: This summary is a reference designed for the convenience of those who could notattend the financial conference call stated above. Please note that this is not a word-for-wordtranscript of all remarks made at that session, but is a summary prepared by Kurita Water
Industries Ltd.
Q. With regard to orders for water treatment facilities for the electronics industry, were 1Q
trends by industry, or the outlook for 2Q and beyond different from your initialassumptions?
A. We saw order push-outs in both the domestic and overseas businesses to 2Q and beyond,but the magnitude of the delays was larger for overseas orders. This was particularly truefor China.
Q. You indicated that recently acquired Avista Technologies is not expected to contribute toprofits in the current fiscal year. What is the expected level of profitability if the impact of
PPA and PMI is excluded, compared to the average for the water treatment chemicals
business?
A. Given Avista Technologies has differentiated products in the field of RO chemicals, webelieve the margin should be higher than the average margin for the domestic watertreatment chemicals business.
Q. The 1Q water treatment facilities business profit rose approximately ¥1 billion YoY. Please
discuss the factors behind the higher profits, and your view of 2Q and beyond.
A. Profits for the water treatment facilities business improved YoY as a result of a lower levelof additional costs for water treatment facilities (approximately ¥1.1 billion in 1Q of theprevious fiscal year) and a decline in depreciation expenses. For 2Q and beyond, thelower level of additional costs and the decline in UPWS (Ultrapure Water Supply)
depreciation should have a positive impact on profits. However, we are also expecting thedecline in UPWS revenues resulting from the sale of assets and the impact of lower
domestic and overseas water treatment facilities sales to have a negative impact on profits.
Q. Please quantify the impact of UPWS asset sales on 1Q orders and sales.
A. There was almost no impact in 1Q. The impact will be felt in 2Q and beyond.
Q. Please discuss local currency growth rates and changes to the operating environment bygeography for the overseas water treatment chemicals business.
A. Excluding new consolidations, sales for the overseas water treatment chemicals businessfell approximately 7% in local currency terms. In China, VAT reforms led to increased sales
in March, pulling forward demand from April, which declined as a consequence. However,
we believe this is a temporary phenomenon.
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Q. The profit contribution to other income from the sale of UPWS assets was larger thaninitially expected. Is this because the scale of the asset sale was larger than expected?
A. The scope of assets sold was unchanged from our initial assumptions. In addition, there
has been no change to the expected impact on sales and profits from our initial plan.
Q. With regard to the domestic water treatment facilities business for general industries, havethere been near-term changes in the operating environment for soil remediation and thefacilities for the electric power industry?
A. Both are trending in line with our assumptions. Orders for the facilities for the electric
power industry increased but we think the impact will be modest given the backlash
against coal-fired thermal power and limited prospects for nuclear power restarts. For soil
remediation, in addition to customers placing a series of orders on an ongoing basis, webelieve demand for land to be used for retail and logistics facilities is strong.
Q. With regard to the sale of UPWS assets, would you expect to see more such sales going
forward?
A. I can’t say never again, but there is nothing that comes to mind at this point in time.
Q. Please disclose 1Q China orders and sales for water treatment facilities.
A. Including maintenance, orders were approximately ¥2.8 billion and sales wereapproximately ¥4.5 billion.
Q. What do you expect for China orders for water treatment facilities this fiscal year?
A. The initial plan was ¥13.8 billion, but if the current pace of orders remains unchanged, wecould fall short of plan.

Business forecasts presented and other statements relating to the future made in thisdocument are based on information currently available and certain assumptions theCompany considers reasonable. A variety of factors may cause actual financial results andother forward-looking statements to differ materially from the forecasts.

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