Kurita Water Industries Ltd.

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

August 14, 2019

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. Althoughbusiness 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 theJapanese GAAP of the past.

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

2

Partial Revision to Forecast for the Fiscal Year Ending March 31, 2020

p1-8p 9 -11

1Consolidated Financial Results for
the First Quarter of the Fiscal Year Ending March 31, 2020

Overview of Results(Billions of Yen)

1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY ChangeOrders

70.5

72.7+3.2%

Net Sales

62.3

64.3+3.3%

Business Profit

4.5

5.6+24.4%

(2.9)

4.6

ーOperating Profit

1.6

10.2+528.9%

Profit Before Tax

1.9

10.4+447.5%

Profit Attributable to Owners ofParent

1.5

7.3+396.7%

13.04

64.71+396.2％

USD (yen)

109.07109.90EUR (yen)

130.06123.49CNY (yen)

17.13

16.07

Other Income and Expenses, Net

Earnings per Share (yen)Foreign
ExchangeRate⚫ The effects of new consolidation of U.S. Water Services, Inc. (“U.S. Water”), Avista Technologies, Inc. and Avista
Technologies (UK) Ltd. (“Avista”) are included from the quarter under review.
⚫ Other income and expenses includes a loss on the transfer of the aluminum compound business in Europe in thesame period of the previous fiscal year and a gain on the sale of ultrapure water supply business assets in thequarter under review.

1Results by Segment(Billions of Yen)

(Billions of Yen)

Total

Water Treatment
Chemicals

Water Treatment
Facilities

1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY ChangeOrders

70.5

72.7

+2.2

Net Sales

62.3

64.3

+2.0Business Profit

4.5

5.6+1.1

Business Profit
Margin7.3%

8.7%

Operating Profit

1.6

10.2+8.6

Orders26.9

28.9+2.1

Net Sales

25.4

28.0+2.6

Business Profit

2.5

2.6+0.0

Business Profit
Margin9.9％

9.1％

Operating Profit(0.5)

2.4+2.9

Orders43.6

43.8+0.2

Net Sales

36.8

36.3(0.6)

Business Profit

2.1

3.1+1.0

Business Profit
Margin5.7％

8.7％

Operating Profit

2.27.9⚫ In the Water Treatment Chemicals business,orders and net sales increased as U.S. Waterand Avista were newly consolidated, butbusiness profit remained flat due to the increasein SG&A expenses.
⚫ Operating profit in the Water Treatment
Chemicals business improved substantially as aloss on transfer of the aluminum compoundbusiness in Europe was recorded in the same
period of the previous fiscal year.
⚫ Business profit was up in the Water Treatment
Facilities business owing to an improvement in
the cost of sales ratio resulting from decreased
additional costs and depreciation.

⚫ Operating profit in the Water Treatment Facilities
business increased substantially as a result ofrecording a gain on sale of ultrapure watersupply business assets.

+5.72

Water Treatment Chemicals Business1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

26.9

28.9+2.1

Domestic

12.1

12.3+0.2

Overseas

14.8

16.7+1.9

25.4

28.0+2.6

Domestic

10.8

11.2

+0.4

Overseas

14.6

16.8+2.2

Business Profit

2.5

2.6+0.0

Business Profit Margin

9.9％

9.1％

Operating Profit

(0.5)

2.4

(Billions of Yen)

(Billions of Yen)

OrdersNet Sales+2.9

Overseas Sales by Region(Billions of Yen)

1Q of FY ended
03/2019

1Q of FY ending
03/2020⚫ Overseas orders and sales increased as U.S.
Water and Avista were newly consolidated,
despite a decrease resulting from the sale of
the aluminum compound business in Europe
in the same period of the previous fiscal year.
⚫ Excluding the effect of the new scope of
consolidation, the business profit margin
remained mostly flat.

YoY Change

Asia

7.2

6.6(0.6)

North America

1.2

4.8+3.6

EMEA

5.5

4.8(0.7)

Other

0.7

0.6(0.0)

14.6

16.8+2.2

Total⚫ Domestic orders and sales increased forprocess treatment chemicals for steel
industry, boiler chemicals, and cooling water
treatment chemicals.

3Water Treatment Facilities (for the domestic electronics industry)
1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

17.6

14.1(3.5)

Facilities

4.4

0.2(4.2)

Maintenance

5.0

6.1

+1.0

Ultrapure Water
Supply Business

6.4

6.2(0.3)

Tool Cleaning

1.7

1.6(0.1)

13.0

14.1

+1.0

Facilities

1.4

2.6+1.2

Maintenance

3.5

3.6+0.1

Ultrapure Water
Supply Business

6.4

6.2(0.3)

Tool Cleaning

1.7

1.6(0.1)(Billions of Yen)

OrdersNet Sales⚫ Orders for facilities decreased, reflecting theabsence of orders for large projects placed in
the same period of the previous year, butsales increased due to progress on
construction for the orders received in theprevious fiscal year.
⚫ Orders and sales remained at a high level inmaintenance as a result of expansion andrepair demand at customer facilities.
⚫ In the ultrapure water supply business, bothorders and sales decreased due to the impactof certain contracts having expired in thesecond half of the previous fiscal year andbeing renewed.

4Water Treatment Facilities (for domestic general industries)
1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

19.4

21.4+2.0

Energy andInfrastructure

16.3

16.5+0.1

Soil Remediation

2.4

4.2+1.8

Other

0.7

0.7+0.0

Net Sales

11.7

12.5+0.8

Energy andInfrastructure

8.9

10.1+1.2

Soil Remediation

2.2

1.8(0.4)

Other

0.7

0.7+0.0(Billions of Yen)

Orders⚫ Orders for energy and infrastructure weremostly flat overall as orders for facilities forthe electric power industry increased despitea decrease in maintenance orders.
⚫ Sales for energy and infrastructure increased
as a result of progress with construction fromthe order backlog for facilities for the electric
power industry and growth of the chemicalcleaning services.
⚫ Orders for soil remediation increased due tolarge project orders. Sales decreased in theabsence of the large projects that wererecorded in the same period of the previous
fiscal year.

5Water Treatment Facilities (Overseas)(Billions of Yen)

1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

6.6

8.3

+1.7Facilities

3.3

5.4+2.1

Maintenance2.52.1(0.4)

Ultrapure Water
Supply Business

0.8

0.8(0.0)

12.0

9.7(2.4)

Facilities

9.9

7.0(2.9)

Maintenance1.4

1.9+0.5

Ultrapure Water
Supply Business

0.8

0.8(0.0)

OrdersNet Sales⚫ Facilities orders increased due to the impactof the new consolidation of U.S. Water andincreased orders for facilities in South Korea.

⚫ Facilities sales decreased in the absence oflarge projects in China and South Korea thatwere recorded in the same period of theprevious fiscal year, despite the impact of
new consolidation of U.S. Water.

Sales by Region(Billions of Yen)

1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

Asia

11.8

7.8(4.1)

North America andOther

0.2

1.9+1.7

12.0

9.7(2.4)

Total

6

Breakdown of Service Business Sales
1Q of FY ended
03/2019

1Q of FY ending
03/2020

YoY Change

Water Treatment
Chemicals

25.4

28.0+2.6

Water Treatment
Facilities

24.2

24.7+0.5

Ultrapure Water
Supply Business

7.2

6.9(0.3)

Tool Cleaning

1.7

1.6(0.1)

Soil Remediation

2.21.8(0.4)

Domestic
Maintenance

11.2

11.9+0.7

Overseas
Maintenance1.4

1.9+0.5

Other0.5

0.6+0.0

49.7

52.7

+3.1

(Billions of Yen)

Total

⚫ The service business composition ratio
increased, due in part to newly consolidating
U.S. Water and Avista within the Water
Treatment Chemicals business.
⚫ In domestic maintenance, chemical cleaning
services and maintenance services for the
public sector increased.

7

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

1Q of FY ended
03/2019

1Q of FY ending
03/2020

Capital Expenditures(Property, Plant and Equipment)

6.1

9.8

Ultrapure Water Supply
Business

4.5

6.7

Other than the above

1.6

3.2

Depreciation(Property, Plant and Equipment)

3.7

3.3

Water Treatment Chemicals

0.5

0.9

Water Treatment Facilities

3.2

2.4

1.3

1.3

Water Treatment Chemicals

0.4

0.5

Water Treatment Facilities

0.8

0.8

R&D Expenses⚫ Capital expenditures increased
substantially due to investment in large
projects in the ultrapure water supply
business and increased investment in thetool cleaning business.
⚫ Depreciation decreased, primarily in theultrapure water supply business.

82

Partial Revision to Forecast for
the Fiscal Year Ending March 31, 2020

Overview of Business Forecast
1H(Billions of Yen)FY ending 03/2020 FY ending 03/2020
Initial Forecast
Current Forecast

Full Year
ChangeFY ending 03/2020 FY ending 03/2020
Initial Forecast
Current Forecast

ChangeOrders

137.9

138.7

+0.8

270.0

272.0+2.0

Net Sales

133.8

134.6

+0.8

278.0

280.0

+2.0

Business Profit

12.3

12.3

ー

26.5

26.5

ー

Other Income and Expenses, Net

3.2

4.0

+0.8

2.5

3.5+1.0

Operating Profit

15.5

16.3+0.8

29.0

30.0

+1.0

Profit Before Tax

15.6

16.4

+0.8

29.2

30.2+1.0

Profit Attributable to Owners of Parent

11.0

11.6

+0.6

20.6

21.3

+0.7

97.97

103.31+5.34

183.47

189.71+6.24

USD (yen)

110.0

110.0

110.0

110.0

EUR (yen)

125.0

125.0

125.0

125.0

CNY (yen)

16.6

16.6

16.6

16.6

Earnings per Share (yen)Foreign
Exchange
Rate⚫ The impact of the new consolidation of Avista (U.S. and U.K.), which was acquired in May, has been reflected in orders and sales.
⚫ The forecast for other income and expenses has been revised to reflect the actual gain on the sale of ultrapure water supply
business assets and to adjust acquisition-related costs in the Water Treatment Chemicals business in the second half.
9Forecasts by Segment
1H(Billions of Yen)

Total

Water Treatment
Facilities

ChangeFY ending 03/2020 FY ending 03/2020
Initial Forecast
Current Forecast

ChangeOrders

137.9

138.7

+0.8

270.0

272.0

+2.0

Net Sales

133.8

134.6

+0.8

278.0

280.0

+2.0

Business Profit

12.3

12.3

ー

26.5

26.5ー

9.2%

9.1%

9.5%

9.5%

Operating Profit15.5

16.3+0.8

29.0

30.0+1.0

Orders59.7

60.5+0.8

118.4

120.4+2.0

Net Sales

59.2

60.0+0.8

118.1

120.1+2.0

Business Profit

5.7

5.7ー

11.0

11.0ー

Business Profit
Margin

9.5％

9.4％

9.3％

9.2％

Operating Profit

4.9

4.9ー

9.5

9.7+0.2

Orders

78.2

78.2ー

151.6

151.6ーNet Sales

74.6

74.6ー

159.9

159.9ーBusiness Profit

6.7

6.7

ー

15.5

15.5ー

Business Profit
Margin

8.9％

8.9％

9.7％

9.7％

Operating Profit

10.7

11.5

19.5

20.3

Business Profit
MarginWater Treatment
ChemicalsFY ending 03/2020 FY ending 03/2020
Initial Forecast
Current Forecast

Full Year

+0.8

+0.8
10

Water Treatment Chemicals Business (Sales by Region)
1H(Billions of Yen)FY ending 03/2020
Initial Forecast

Full YearFY ending 03/2020
Current Forecast

ChangeFY ending 03/2020
Initial Forecast

FY ending 03/2020
Current Forecast

ChangeDomestic

23.6

23.6

ー

47.0

47.0

ー

Overseas

35.6

36.4

+0.8

71.1

73.1

+2.0

Asia

14.4

14.4

ー

28.7

28.7

ー

North America

9.6

10.3

+0.7

18.8

20.5

+1.7

EMEA

10.1

10.2

+0.1

20.6

20.9

+0.3Other

1.5

1.5ー

3.0

3.0ー

59.2

60.0

+0.8

118.1

120.1

+2.0

Total

11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.