FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Fiscal Year ended
March 31, 2018
Tokyo, Japan, April 27, 2018 - Kurita Water Industries Ltd. (TSE Securities Code 6370)
announced net sales of 236,815 million yen and profit attributable to owners of parentof 17,897 million yen, or 159.37 yen per share, for the year ended March 31, 2018
(April 1, 2017 – March 31, 2018).
Results of Operations
Total consolidated orders for the Kurita Group in the fiscal year ended March 31, 2018
increased 15.0% from the level of the previous fiscal year, to 251,447 million yen,while net sales rose 10.6%, to 236,815 million yen. Operating income was up 15.5%
from the previous fiscal year, to 22,475 million yen. Ordinary income was 22,104
million yen, up 10.1%. Profit attributable to owners of parent reached 17,897 million
yen, an increase of 23.4%. The Group recorded a gain on step acquisitions of 2,443
million yen in extraordinary income associated with the conversion of Hansu Co., Ltd.
in South Korea into a consolidated subsidiary from an equity method affiliate throughthe acquisition of its additional shares. The Group also recorded extraordinary incomeof 1,720 million yen from the sale of shares of other listed companies.
During the fiscal year ended March 31, 2018, the global economy remained firm
overall, reflecting the steady recovery of the U.S. and European economies and thepicking up of the Chinese economy and other emerging economies in Asia.
The Japanese economy continued to enjoy a recovery trend, with consumer spending
picking up and corporate earnings improving associated with the strengthening ofoverseas economies.
Looking at the market environment surrounding Kurita Group (Kurita Water
Industries Ltd. and its consolidated subsidiaries and equity method affiliates), in Japan,
the upward momentum continued in the production activities of the manufacturingindustry due to the recovery of exports and the strengthening of demand, and capital
expenditure also remained solid. Overseas, capital expenditure picked up, mainly in theelectronics industry in East Asia.
In this environment, the Group focused on enhancing the foundation of overseas
operations and developing the service business to improve profitability under the basic
policy of “improving customer intimacy by providing customers with best solutions.”
To enhance the foundation of overseas operations, Fremont Industries, LLC, which
recently became a member of the Kurita Group, and Kurita America, Inc., an existing
U.S. subsidiary, cooperated to proceed with initiatives to exercise synergies. In Europe,
to increase the production capacity of process treatment chemicals for paper and pulp ofKurita Europe GmbH, the Group acquired a production base from Akzo Nobel inFrance. In Asia, the Group converted Hansu Co., Ltd., an equity method affiliate, into a
consolidated subsidiary by acquiring additional shares to strengthen the power toprovide solutions in South Korea. To develop the service business, the Group sought todevelop a business model using the standardized wastewater reclamation system that
contributes to water recycling with a combination of the fundamental technologies ofwater treatment facilities and water treatment chemicals of the Company.
The Group also continued to work on competitive products and services that utilize
IT and sensing technology, while developing a market for these products and services.
1

The Group focused on proposal sales that will contribute to the solution of customer
issues, such as the reduction of the environmental impact, energy saving andproductivity improvement.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 90,358 million
yen, up 10.0% versus the fiscal year ended March 31, 2017, while sales rose 10.4%, to90,361 million yen.
Operating income was down 0.7% to 7,180 million yen, reflecting an increase in selling,
general and administrative expenses caused by increases in personnel expenses due tothe active development of overseas businesses, and IT-related expenses despite theeffect of the increase in sales.
In Japan, capacity utilization recovered at customers’ plants, and the Group sought togain new customers by proposing solutions using new products and services. This effort
produced growth in our main products, boiler water treatment chemicals and coolingwater treatment chemicals. Process treatment chemicals for paper and pulp andchemicals for iron and steel also grew. As a result, both orders and sales increased inJapan.
Overseas, both orders and sales increased, reflecting the consolidation of results at theacquired subsidiary based in the United States from the first quarter of this fiscal year,
and the conversion of an equity method affiliate in South Korea into a consolidated
subsidiary in the fourth quarter, in addition to higher sales in each geographical area.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 161,088 million
yen, up 17.9% versus the previous fiscal year. Sales rose 10.7%, to 146,453 million yen.
Operating income climbed 25.3%, to 15,312 million yen mainly due to the increase insales and an improvement in profitability through thorough process control and costmanagement in installment in construction work.
In Japan, in the electronics industry, both orders and sales in the water treatment
facilities increased significantly due to orders for large-scale projects and progress inconstruction work. In maintenance services, both orders and sales also increased due toorders associated with expansion and remodeling projects against a backdrop of a rise incapacity utilization at customers’ plants.
In general industries, orders declined but sales increased in water treatment facilities.
Orders in maintenance services increased mainly due to demand for the renewal andexpansion of facilities at customers’ plants, but sales declined slightly. Orders for water
treatment facilities for electric power declined, but sales increased. Orders in soil
remediation remained flat, but sales declined in a backlash to the posting of sales oflarge projects in the previous fiscal year.
Overseas, orders rose significantly on orders for large-scale projects in China andSouth Korea. Sales also increased, reflecting progress in construction work for projects
the orders for which were received in this fiscal year.
Sales in the ultrapure water supply business declined partly due to a fall in sales
attributable to changes in contracts with a customer in the previous fiscal year, althoughrevenues were posted for projects for the expansion of facilities.
2

Financial Condition
1) Total assets:323,046 million yen (increased 23,797 million yen from the end of theprevious fiscal year)
Current assets increased 6,074 million yen from the end of the previous fiscal year
(March 31, 2017), mainly attributable to increases in accounts receivable-trade andinventories. Noncurrent assets also rose 17,724 million yen from the end of the previous
fiscal year principally attributable to increases in property, plant and equipment andgoodwill.
2) Liabilities: 82,193 million yen (increased 11,703 million yen from the end of theprevious fiscal year)
Current liabilities rose 11,739 million yen from the end of the previous fiscal year
chiefly due to increases in accounts payable-trade and accounts payable-other.
Noncurrent liabilities decreased 36 million yen from the end of the previous fiscal year.
3) Net assets: 240,853 million yen (increased 12,095 million yen from the end of theprevious fiscal year)
The main factors for the increase were a 3,563 million yen increase in retained earnings,
a 3,600 million yen rise in foreign currency translation adjustments, and a 1,766 million
yen increase in unrealized gains on available-for-sale securities. Treasury stock declined
2,947 million yen.
Cash Flows
Consolidated net cash and cash equivalents at the end of the fiscal year (March 31,2018) totaled 58,917 million yen, a decrease of 6,521 million yen from the end of theprevious fiscal year (March 31, 2017).
The various cash flows and related factors are outlined below.
1) Cash Flows from Operating Activities
Net cash provided by operating activities during the fiscal year ended March 31, 2018
totaled 21,408 million yen, a decrease of 12,533 million yen from the previous fiscal
year. Inflows from income before income taxes (25,535 million yen) and depreciation
and amortization (16,861 million yen) including the amortization of goodwill werepartly offset by an increase in notes and accounts receivable-trade (16,332 million yen)
and income taxes paid (6,170 million yen).
2) Cash Flows from Investing Activities
Net cash used in investing activities totaled 15,928 million yen, an increase of 14,809
million yen from the previous fiscal year. Net cash decreased chiefly due to payments
for the purchase of property, plant and equipment of 17,924 million yen and paymentsfor purchase of shares of and purchase of investments in capital of subsidiaries andassociates of 4,012 million yen, which were partially offset by the increase in funds
from net deposits of 8,173 million yen, which is the balance between deposits into time
deposit accounts and withdrawals from time deposits.
3) Cash Flows from Financing Activities
Net cash used in financing activities totaled 12,419 million yen, an increase of 2,265
million yen from the previous fiscal year. The main cash outflows were cash dividends
paid of 5,819 million yen, the purchase of treasury stock of 5,592 million yen.

3

(Reference) Cash flow indicators
Year ended
Year ended
Year ended
Year ended
Year ended
March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018
Equity ratio (%)

79.2

75.5

76.4

76.1

73.9

Equity ratio (market value
basis) (%)

97.0

115.0

100.1

102.8

117.3

Cash flow/interest bearing
liabilities ratio (%)

24.1

32.8

33.0

28.2

42.6

Interest coverage ratio
478.5
277.6
96.3
104.4
41.6
(times)(Notes) Equity ratio: Shareholders’ equity / Total assets
Equity ratio (market value basis): Market capitalization / Total assets
Cash flow / interest bearing liabilities ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest payments
1. Each indicator is calculated based on consolidated financial figures.
2. Market capitalization is calculated based on the number of shares outstanding excluding
treasury stock.
3. Cash flow uses net cash provided by operating activities.
4. Interest-bearing debt includes all liabilities requiring the payment of interest under theliabilities section of the consolidated balance sheet.

Outlook for Overall Results, Including Production, Sales, and Profits and Losses
For the full fiscal year ending March 31, 2019, the Group forecasts 255,000 million yen
in net sales (up 7.7% year on year), 24,000 million yen in operating income (up 6.8%),
24,200 million yen in ordinary income (up 9.5%), and 17,000 million yen in net income
attributable to owners of parent (down 5.0%).
In the fiscal year ending March 31, 2019, the global economy is expected to continue
to grow moderately overall, despite uncertainties due to rising trade protectionism andthe geopolitical risk. In addition, the production activities of domestic companies arelikely to continue to expand, backed by increasing exports and recovering domestic
demand, and capital expenditure to increase production capacity and maintain andupdate existing equipment is expected to remain firm on the back of strong corporate
earnings.
In these circumstances, the Group will continue to promote a shift to the highly
profitable service business in light of the characteristics of each region and market by
injecting management resources after identifying growth regions and markets.
The Group will further focus on improving customer intimacy and will develop totalsolutions that will contribute to the natural environment, industries and people’s lives,
making full use of technologies, products and services of water treatment chemicals,
water treatment facilities and maintenance.

4Outlook by Segment
Water Treatment Chemicals
Both orders and sales are likely to increase, particularly in overseas operations,
including Hansu Co. Ltd. which the Group converted into a consolidated subsidiaryfrom an equity method affiliate by acquiring its additional shares in November 2017. In
Japan, this segment will improve profitability by focusing on the service business thatwill provide best solutions for customers while utilizing IT and sensing technology
under a system that has further strengthened cooperation with maintenance services in
the water treatment facilities business.
Water Treatment Facilities
The Group expects orders to decline due to the effects of posting strong orders in theprevious fiscal year, although sales should increase. The segment will increase
profitability by working to improve the quality and accelerate the speed of production
activities through fundamental revisions to the production systems and processes and afocus on providing solutions that will contribute to the prevention of environmental
contamination, the utilization of renewable energy, the effective use of water resources
and the improvement of production technologies of industries.
Dividend Policy and Dividends for the Fiscal Year ended March 31, 2018 and the
Fiscal Year ending March 31, 2019
Kurita Water Industries’ basic policy is to provide shareholders with stable dividends.
Setting a payout ratio of 30 to 50% as our target, we will continuously work to increase
dividends, making decisions based on the payout ratios for the most recent five years to
respond flexibly to fluctuations in business performance each year. We will appropriate
internal reserves for operating funds and will use the remainder of the reserves to invest
in growth on a preferential basis. If there are excess funds, we will take steps to improve
capital efficiency and return profits to shareholders, including the acquisition of treasury
stock, taking the share price into consideration.
We intend to pay a year-end dividend of 26 yen per share for the fiscal year ended
March 31, 2018, 1 yen more than the previous year-end dividend. Combined with theinterim dividend of 26 yen per share (1 yen more than the previous interim dividend),
the annual dividend comes to 52 yen per share, 2 yen higher than the previous fiscal
year’s annual dividend. For the fiscal year ending March 31, 2019, Kurita Water
Industries plans to pay an interim dividend of 27 yen per share and a year-end dividendof 27 yen per share, for an annual dividend of 54 yen per share.

5

Business and Other Risks
The following are summaries of major foreseeable risks present in the businessenvironments in which the Group operates. Forward-looking statements herein are
based on judgments made by management as of March 31, 2018.
1) Economic and market conditions
The Group’s Water Treatment Chemicals and Water Treatment Facilities businesses
are affected by economic conditions in Japan and in other countries and regions where
the Group operates. Demand in the Water Treatment Chemicals business fluctuates in
response to factory capacity utilization rates in such industries as steel, petroleum
refining and petrochemicals, and pulp and paper, which are the business’ main sourcesof demand. Such demand fluctuations may affect the Group’s operating results.
Demand in the Water Treatment Facilities business fluctuates in response to trends incapital expenditure in the electronics industry and other industries that are the business’
main sources of demand. Such demand fluctuations may affect the Group’s operating
results.
Intensification of competition with rivals in the Group’s business domains could
lead to declines in prices of products and services, which could lower the Group’s
profitability.
2) Materials, parts and services procurement
The Group procures raw materials and parts from outside the Group for the
manufacture of products and the fabrication of facilities. The Group also procuresservices necessary to conduct operations from outside the Group. The prices of raw
materials, parts and services fluctuate based on changes in market conditions, and such
fluctuations may affect the Group’s operating results.
3) Overseas business development
The Group is striving to expand its business outside Japan. In contrast to theJapanese market, doing business in overseas markets involves a number of inherent,
unforeseen risks, including the risk of changes to local laws and regulations, the risk ofpolitical and economic instability, and the risk of foreign exchange rate fluctuations. If
such risks materialized, the Group’s operating results could be affected.
4) New product development
The Group continuously endeavors to develop new technology and new products.
The success of new technology and product development efforts cannot be guaranteed.
The Group may not be able to offer new technologies and products that meet the needsof its customers or launch new products in a timely fashion. The Group may also fail tokeep pace with rapid changes in technological innovation and changing customer needs.
If the Group were to fail to develop competitive new products, this could hamper its
future growth and profitability or otherwise affect its operating results.
5) Intellectual property
The Group recognizes the importance of intellectual property and continually seeks
to register its own intellectual property while avoiding infringement of the intellectual
property rights of third parties, both in Japan and overseas. Given the wide scope of theGroup’s business, however, there is potential for the Group’s intellectual property
rights to be infringed and potential for the Group to infringe upon the rights held by
third parties. Such occurrences may affect the Group’s operating results.
6) Information systems
The Group’s use of information systems is increasing, as is the importance of
information systems to the Group’s business. If a computer virus or some other factor
6were to obstruct the functions of the Group’s information systems, the Group’sbusiness activities, operating results, and financial condition could be negatively
affected.
7) Large-scale natural disasters
If an earthquake, typhoon, or other kind of natural disaster were to directly or
indirectly upset the Group’s business execution, the Group’s business activities,
operating results, and financial condition could be negatively affected.
Basic concept for the selection of accounting standards
While the Kurita Group plans to voluntarily apply the International Financial ReportingStandards (IFRS), the Group is currently considering the specific time of application.

7

Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)Land
Leased assets
Accumulated depreciation
Leased assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

As ofMarch 31, 2017
AmountAs ofMarch 31, 2018
Amount

72,7507,843
60,439
603
3,114
4,181
2,229
1,568
3,447
(246)
155,930

61,086
7,870
78,994
3
3,968
3,621
2,800
1,595
2,528
(464)
162,004

62,093(48,087)
14,005
121,311(85,258)
36,053
13,881
8,352(3,679)4,673
2,852
13,755(11,184)
2,570
74,036

63,191(51,193)
11,997137,176(94,085)
43,09015,596
8,256(3,831)
4,424
7,880
15,292(12,255)
3,037
86,02815,0491,908
8,350
25,30820,362
2,111
8,529
31,003

34,844
4,275
5,042
(189)
43,972
143,318
299,249

35,683
3,265
5,238
(176)
44,010161,042
323,0468

(Million yen)

As ofMarch 31, 2017
AmountAs ofMarch 31, 2018
AmountCurrent liabilities
Notes payable – trade
Accounts payable – trade
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for loss on construction contracts
Provision for product warranties
Other
Total current liabilities

1,710
21,715
8,019
2,875
2,361
81
801
6,844
44,4102,073
26,801
10,995
4,806
2,420
145
94
455
8,355
56,149Noncurrent liabilities
Lease obligations
Deferred tax liabilities related to revaluation
Provision for directors’ retirement benefit
Net defined benefit liability
Provision for directors’ stock benefits
Other
Total noncurrent liabilities
Total liabilities

4,339
1,119
25
16,054
4,540
26,08070,490

4,038
1,119
7
16,610183
4,084
26,04482,193

13,45010,993
205,586(13,891)
216,138

13,45010,959209,149(10,943)
222,615

14,792

16,558670(380)(3,593)(3)
11,484
1,135
228,758
299,249

(1)
(380)
6
3
16,1872,049
240,853
323,046

Liabilities

Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

9Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors' and corporate auditors' compensations,salaries and allowances
Provision for bonuses
Retirement benefit expenses
Traveling and transportation expenses
Research and development expenses
Other
Total Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Commitment fee
Acquisition-related costs
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Impairment loss
Provision of allowance for building demolition
expenses
Total extraordinary losses
Income before income taxes
Income taxes
Current
Deferred
Total income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Year ended
March 31, 2017
Amount214,187
145,455
68,732

Year ended
March 31, 2018
Amount236,815
160,476
76,338

19,16020,610

1,334
1,440
2,767
5,038
19,53749,28019,452

1,411
1,343
2,906
5,258
22,33353,86322,475

183
488

187
550

175

73

582
1,429

764
1,576

187
39
259
321
807
20,074

352
192
250
319
831
1,946
22,104

391
391

1,720
2,443
4,163

-

413

-

320

20,465733
25,535

5,996
(193)
5,803
14,661
155
14,506

7,906
(408)
7,498
18,037139
17,897

10

Statement of Comprehensive Income(Million yen)

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Components:
Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

Year ended
March 31, 2017
Amount14,661

Year ended
March 31, 2018
Amount18,037(1,263)

1,739

271(2,897)
97

(671)
0
3,219
7

(83)

93

(3,876)
10,784

4,389
22,426

10,64922,255

134

170

11

Statement of Changes in Shareholders’ Equity — Consolidated
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Million yen)

Shareholders’ equity

Balance as of the
beginning of the fiscal
year
Change during theperiodDividend from surplus
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Retirement of treasury
stock
Reversal of revaluation
reserve for land
Changes of equity
interest in consolidated
subsidiaries
Other
Net change in items
other than shareholders’equity during theperiodTotal change during theperiodBalance as of the end of
the fiscal year

Common stock

Capital surplus

Retained earnings

Treasury stock

13,45010,993

196,788(8,695)

Total shareholders’equity212,536(5,693)(5,693)

14,506

14,506(5,195)(5,195)
-

(15)

(15)
-

-

-

8,797

(5,195)

3,602

13,45010,993

205,586(13,891)

216,138

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on available(losses) on
reserve forfor-salehedgeslandsecurities

Balance as of the
beginning of the fiscal
year

16,061

398(380)

NonTotal
Foreign
Remeasure- accumulated
controllingcurrency
ments ofothertranslation defined benefit
interests
comprehensive
adjustments
plansincome

(618)

(101)

15,3601,067

Total net
assets228,964

Change during theperiodDividend from surplus(5,693)

Profit attributable toowners of parent

14,506

Purchase of treasury
stock(5,195)

Disposal of treasury
stock

-

Retirement of treasury
stock

-

Reversal of revaluation
reserve for land-

Changes of equity
interest in consolidated
subsidiaries

-

Other

(15)

Net change in items
other than shareholders’equity during theperiod(1,269)271-(2,975)97(3,875)67(3,807)

Total change during theperiod(1,269)271-(2,975)97(3,875)67(205)

Balance as of the end of
the fiscal year

14,792670(380)(3,593)(3)

11,484

1,135

228,758

12

Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Million yen)

Shareholders’ equity

Balance as of the
beginning of the fiscal
year
Change during theperiodDividend from surplus
Profit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Retirement of treasury
stock
Reversal of revaluation
reserve for land
Changes of equity
interest in consolidated
subsidiaries
Other
Net change in items
other than shareholders’equity during theperiodTotal change during theperiodBalance as of the end of
the fiscal year

Common stock

Capital surplus

Retained earnings

Treasury stock

13,45010,993

205,586(13,891)

Total shareholders’equity216,138(5,793)(5,793)

17,897

17,897(8,525)(5,592)(5,592)

14

14

8,525

-

(0)

(0)

(33)

(33)
(15)

(15)

-

(33)

3,563

2,947

6,476

13,45010,959209,149(10,943)

222,615

Accumulated other comprehensive income
Unrealized
gains (losses) Deferred gains Revaluation
on available(losses) on
reserve forfor-salehedgeslandsecurities

Balance as of the
beginning of the fiscal
year

14,792

670(380)

NonTotal
Foreign
Remeasure- accumulated
controllingcurrency
ments ofothertranslation defined benefit comprehensive interests
adjustments
plansincome(3,593)(3)

11,484

1,135

Total net
assets228,758

Change during theperiodDividend from surplus(5,793)

Profit attributable toowners of parent

17,897Purchase of treasury
stock(5,592)

Disposal of treasury
stock

14

Retirement of treasury
stock

-

Reversal of revaluation
reserve for land(0)

Changes of equity
interest in consolidated
subsidiaries

(33)

Other

(15)

Net change in items
other than shareholders’equity during theperiod

1,766

(671)

0

3,600

7

4,703

914

5,617

Total change during theperiod

1,766

(671)

0

3,600

7

4,703

914

12,094

Balance as of the end of
the fiscal year

16,558

(1)

(380)

6

3

16,1872,049

240,85313

Statement of Cash Flows — Consolidated(Million yen)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Equity in (earnings) losses of unconsolidated subsidiaries andaffiliates
Increase (decrease) in net defined benefit liability
Increase (decrease) in other allowancesInterest and dividend income
Interest expense
Other non-operating (income) losses
Loss (gain) on step acquisitions
Provision of allowance for building demolition expenses(Gains) losses on sale/disposal of property, plant andequipment
Impairment loss
(Gains) losses on sale of investment securities(Increase) decrease in notes and accounts receivable – trade(Increase) decrease in inventories(Increase) decrease in other current assets
Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in other current liabilities
Other
Sub-totalInterest and dividend received
Other proceeds
Interest paid
Other payments
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Proceeds from sale and redemption of marketable securities
Payments for purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Payments for purchases of investment securities
Proceeds from sale and redemption of investment securities
Payments associated with acquisition of business
Payments for purchase of shares in and purchase ofinvestments in capital of subsidiaries and associates
Other payments
Other proceeds
Net cash provided by (used in) investing activities

Year ended
March 31, 2017
AmountYear ended
March 31, 2018
Amount20,465
14,877980

25,535
15,677
1,184

(175)

(73)

646
(143)
(671)
187
(51)
-

387
6
(737)
352
626
(2,443)
320

26

54

(391)
2,030
(144)
(866)
1,525
1,890
112
40,297
835
570
(325)
(542)
(6,893)33,941413(1,720)(16,332)
(29)
1,073
3,699
298
(195)
28,095
897
743
(514)
(1,643)(6,170)21,408(20,802)34,762516(10,156)
30
(791)
(240)
863
(4,506)(11,600)
17,387(1)(17,924)
15
(972)
(5)
2,115
(136)

-

(4,012)(924)
129(1,119)(1,198)404(15,928)

14

(Million yen)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayment of finance lease obligations
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Purchase of shares of subsidiaries without change in scope of
consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

Year ended
March 31, 2017
AmountYear ended
March 31, 2018
Amount

(665)
2,329
(223)
(637)
(5,195)(5,694)
(67)

177
(400)
(610)
(5,592)(5,753)
(66)

-

(173)

(10,154)(12,419)

(821)

417

21,846
43,59165,438(6,521)65,43858,91715

Statement of Income
1. Impairment loss
(1) Overview of assets or asset groups for which an impairment loss was recognized
In the fiscal year under review, an impairment loss was posted for the following assets groups.
Use

Classification

Location

AmountIdle assets

Buildings and structures

Atsugi-shi, Kanagawa

214 million yen

Idle assets

Land

Yamaguchi-shi, Yamaguchi

113 million yen

Idle assets

Machinery and equipment

Ludwigshafen, Germany

85 million yen(2) Background of recognizing an impairment loss
In the fiscal year under review, we have decided to begin demolishing the buildings and structures ofthe former aging Corporate Research & Development Center (Atsugi-shi, Kanagawa) starting in June
2018, and the recoverability is now no longer recognized. Therefore, we have recognized an
impairment loss.
Part of the land of Yamaguchi Plant (Yamaguchi-shi, Yamaguchi) is not expected to be used forbusiness, and we have made it land to be sold. Therefore, we have recognized an impairment loss up
to the recoverable amount.
Manufacturing facilities for a certain customer in Ludwigshafen, Germany became idle, and therecoverability is now no longer recognized because the commissioned manufacturing contract with thecustomer was terminated at the end of January 2018. Therefore, we have recognized an impairment
loss.
(3) Amount of impairment losses
The book value of the asset groups for which we have recognized an impairment loss was reduced to
the recoverable amount, and the amount of reduction was posted in extraordinary losses as impairment
losses of 413 million yen.
(4) Method of asset grouping
The Group performs the asset grouping of business assets based on the type of business and leased
assets and idle assets by individual property.
(5) Calculation of the recoverable amountThe recoverable amount of idle assets for which we have come to recognize an impairment loss ismeasured by net sales value. The net sales value is assessed by using the memorandum value of 1 yen
for buildings, structures, machinery and equipment and by the official land price for land.
2. Provision of allowance for building demolition expenses
In the fiscal year under review, we have decided to demolish the buildings and structures of the former
Corporate Research & Development Center (Atsugi-shi, Kanagawa) and posted a reasonably estimatedamount for expenses to be incurred in the future as provision of allowance for building demolition
expenses of 320 million yen in extraordinary losses.

Business Combination
Business combination through acquisition
1. Overview of business combination(1) Name and business of the acquired company
Name: Hansu Co. Ltd.
Business: Manufacturing and sales of water treatment chemicals(2) Reason of business combination
Hansu Co. Ltd. was established in 1974 as a joint venture company of Kurita Water Industries Ltd.
and has been developing the water treatment chemicals business in South Korea for more than 40
years. It has built community-based sales and service networks and customer base and has a numberof staff with knowledge about water treatment in the electronics and other manufacturing industries.
This time, we have acquired its shares for the purpose of strengthening its business base andpromoting the unification of business strategies.
(3) Date of business combination
November 30, 2017(4) Legal form of business combination
Acquisition of shares with cash as consideration(5) Name after business combination
The name will not change.

16(6) Percentage of voting rights acquired
Percentage of voting rights owned immediately before business combination
33.2%
Percentage of voting rights additionally acquired on the date of business combination
51.8%
Percentage of voting rights after acquisition
85.0%
Percentage of voting rights at the end of the fiscal year under review has become 87.1% as a result of
acquiring additional shares from non-controlling shareholders after business combination.
(7) Main reason for determining the acquiring company
Because the Company acquired shares with cash as consideration.
2. Period of consolidation of the results of acquired business
From December 1, 2017 to December 31, 2017
Results from January 1, 2017 to November 30, 2017 are posted as share of profit of entities accounted
for using equity method.
3. Breakdown of the acquisition cost of acquired business and consideration by typeMarket value of equity of Hansu Co. Ltd. owned immediately before business combination on the dateof business combination
3,991 million yen
Cash spent for the acquisition of additional shares
6,241 million yen
Acquisition cost
10,232 million yen
4. Major expenses related to the acquisition
Compensation, fees, etc. paid to the advisor: 413 million yen
5. Difference between the acquisition cost of acquired business and the sum of acquisition costs for eachtransaction to arrive at the acquisition
Gain on step acquisitions: 2,443 million yen
6. Amount of goodwill, reason of the occurrence of goodwill, amortization method, and amortization
period(1) Amount of goodwill
5,155 million yen
In the third quarter of the fiscal year, we conducted provisional accounting for the allocation of theacquisition cost of Hansu Co. Ltd. based on reasonable information, etc. available at the time of
preparing the consolidated financial statements for the quarter. However, the accounting was fixed in
the fourth quarter of the fiscal year under review.
(2) Reason of the occurrence of goodwill
Expected excess earning power(3) Amortization method and amortization period
Amortized for 15 years by the straight-line method
7. Assets accepted and liabilities assumed on the date of the business combination
Current assets
4,225 million yen
Noncurrent assets
4,092 million yen
Total assets
8,317 million yen
Current liabilities
1,523 million yen
Noncurrent liabilities
460 million yen
Total liabilities
1,984 million yen
8. Amount allocated to intangible fixed assets other than goodwill and its major breakdown by type andweighted average amortization period(1) Amount allocated to intangible fixed assets: 733 million yen(2) Major breakdown and amortization period
Customer-related assets: 733 million yen
Amortization period: 7 years

Segment Information
1. Overview of reportable segments
The Company’s reportable segments are components of the Group about which separate financial
information is available. These segments are subject to periodic examinations to enable the Company’sboard of directors to decide how to allocate resources and assess performance.
The Company’s business divisions are based on product and service categories. Each of the divisions
conduct business based on comprehensive strategies formulated for the products and services that theyhandle in Japan and overseas. The Company’s consolidated subsidiaries conduct business under the17

supervision of the relevant business divisions.
The Group’s operations are therefore classified into two reportable segments, the Water Treatment
Chemicals segment and the Water Treatment Facilities segment, based on the products and services
handled by each of the divisions.
The Water Treatment Chemicals segment manufactures and sells water treatment chemicals andequipment and provides maintenance services. The Water Treatment Facilities segment manufacturers
and sells water treatment equipment and facilities, provides ultrapure water, chemical cleaning, toolcleaning, soil and groundwater remediation services, and provides maintenance services that encompass
operation, maintenance, and management of water treatment facilities.
2. Method for calculating sales, income and loss, assets and liabilities, and other amounts by reportablesegment
Accounting methods applied in reportable segments are consistent with the methods applied in
preparation of consolidated financial statements. Segment income represents operating income.
Inter-segment sales and transfers between consolidated-group companies reflect values based on market
prices. Inter-segment sales and transfers between the Company’s divisions are based primarily on bookvalues.
3. Sales, income and loss, assets and liabilities, and other amounts by reportable segment
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Million yen)

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total
Sales
Sales to outside customers
Inter-segment sales and transfers
Total81,883242
82,126132,304
191
132,495

214,187434
214,621

Amounts
reported on the
Adjustments statements of(see note)
income(434)(434)

214,187
214,187

Segment income

7,231

12,22019,4510

19,452

Segment assets

80,120134,623

214,744

84,504299,249

Segment liabilities

24,75945,78670,545(54)

70,4902,926-

11,950-14,877--

14,877
-

2,175

7,911

10,087-

10,087

Other amounts
Depreciation
Impairment loss
Change in property, plant andequipment and intangible fixed
assets18

Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Million yen)

Reportable segment
Water
Water
Treatment Treatment
Chemicals Facilities
Total

Amounts
reported on the
Adjustments statements of(see note)
incomeSales
Sales to outside customers
Inter-segment sales and transfers
Total

90,361431
90,792

146,453298
146,751

236,815729
237,544

(729)
(729)

236,815
236,815

Segment income

7,180

15,312

22,493(18)

22,475

Segment assets

95,589158,631254,220

68,826

323,046

Segment liabilities

29,19853,16782,366(172)

82,193

Other amounts
Depreciation
3,593
12,083
15,677
15,677
Impairment loss
85
85
327
413
Change in property, plant andequipment and intangible fixed
3,162
19,80522,96722,967
assetsNote: “Adjustments” represents the following:
1. Sales: Elimination of inter-segment transactions.
2. Segment income: Amount resulting from eliminations of inter-segment transactions.
3. Segment assets: Consisting mainly of corporate assets (cash deposits, securities in trust, andlong-term investments) unallocated to reportable segments. Corporate assets totaled 84,550 million
yen at March 31, 2017 and 68,890 million yen at March 31, 2018.
4. Segment liabilities: Amount resulting from eliminations of inter-segment claims and liabilities.
5. Details of impairment losses in the fiscal year under review are stated in (Statement of Income).
Related information
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
1. Information by product and service
The Company has omitted disclosure here because equivalent information appears in the segment
information.
2. Information by geographic region(1) Sales(Million yen)

North
Japan
Asia
America
EMEA
Other
Total
39,8991,885
19,774
2,641
214,187
149,988
Note: Sales are allocated to regions based on the location of the customer to which the products orservices are provided. EMEA here stands for Europe, the Middle East and Africa.
(2) Property, plant and equipment(Million yen)

North
Japan
Asia
America
EMEA
8,881
147
1,939
62,387
Note: EMEA here stands for Europe, the Middle East and Africa.

Other
682

Total
74,036

3. Information by major customer
The Company states no information here because, among the sales to outside customers, no single
external customer accounts for 10% or more of net sales posted in the consolidated statement ofincome.

19

Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)
1. Information by product and service
The Company has omitted disclosure here because equivalent information appears in the segment
information.
2. Information by geographic region(1) Sales(Million yen)

North
Japan
Asia
America
EMEA
Other
Total
158,232
48,911
5,178
21,3503,142
236,815
Note: Sales are allocated to regions based on the location of the customer to which the products orservices are provided. EMEA here stands for Europe, the Middle East and Africa.
(2) Property, plant and equipment(Million yen)

North
Japan
Asia
America
EMEA
68,671
14,275182
2,212
Note: EMEA here stands for Europe, the Middle East and Africa.

Other
686

Total
86,028

3. Information by major customer
The Company states no information here because, among the sales to outside customers, no single
external customer accounts for 10% or more of net sales posted in the consolidated statement ofincome.
Information on impairment of reportable segments’ noncurrent assets
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
Not applicableYear ended March 31, 2018 (April 1, 2017 - March 31, 2018)
The Company has omitted disclosure here because equivalent information appears in the segment
information.
Goodwill amortization and unamortized balance of goodwill by segment
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Million yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
Goodwill
amortization
Unamortizedbalance of
goodwill

Total

Eliminationor corporate

Total

980

-

980

-

980

15,049-15,049-15,04920

Year ended March 31, 2018 (April 1, 2017 - March 31, 2018)(Million yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
Goodwill
amortization
Unamortizedbalance of
goodwill

Eliminationor corporate

Total

Total

1,184

-

1,184

-

1,184

20,362-

20,362-

20,362

Information on negative goodwill
Year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
Not applicableYear ended March 31, 2018 (April 1, 2017 - March 31, 2018)
Not applicable

Per Share Information
Net assets per share
Net income per share

Year ended March 31, 2017
1,991.91 yen
125.23 yen

Year ended March 31, 2018
2,126.96 yen
159.37 yen

Notes: 1. Fully diluted net income per share was not reported here because there were no dilutive securities
outstanding.
2. The Company’s own shares remaining in trust that are posted as treasury stock in shareholders’ equity areincluded in treasury stock that are deducted in the calculation of the average number of shares outstandingused for the calculation of per share information. The average number of shares outstanding of the deductedtreasury stock was 226,000 in the previous fiscal year and 335,000 in the fiscal year under review.
3. The calculation bases for net assets per share are as follows.
(Million yen unless otherwise stated)

Total net assets
Amount deducted from total net assets(Those with non-controlling interests)
Net assets attributed to common stock
Number of common stock used in calculation of
net assets per share (shares)

As ofMarch 31, 2017
228,758
1,135(1,135)
227,623

As ofMarch 31, 2018
240,853
2,049(2,049)238,803

114,274,081

112,274,296

Note: The calculation bases for net income per share are as follows.
(Million yen unless otherwise stated)

Net income attributable to owners of parent
Amount not attributed to common stockholders
Net income attributed to owners of parent
associated with common stock
Average number of shares outstanding (shares)

Year ended
March 31, 2017
14,506-

Year ended
March 31, 2018
17,897-

14,506

17,897

115,837,837

112,303,666

Significant Subsequent Events
Not applicable21

Supplementary Information — Consolidated(1) Net Sales(Million yen)

Year ended March 31,
2017
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount81,883132,304
214,187

2018
%
38.2
61.8
100.0

Amount90,361
146,453
236,815

%
38.2
61.8
100.0

(2) Order Intake and Backlog(Million yen)

Year ended March 31,
2017
Business segment

Order Intake

Order Backlog

AmountWater Treatment
Chemicals
Water Treatment
Facilities
Total
Water Treatment
Chemicals
Water Treatment
Facilities
Total

2018
%

Amount%82,11837.5

90,35835.9

136,61162.5

161,08864.1

218,730100.0

251,447

100.0

3,793

6.3

3,791

5.0

56,783

93.7

71,41795.0

60,577100.0

75,209100.0(3) Production Results(Million yen)

Year ended March 31,
2017
Business segment
AmountWater Treatment Chemicals
81,363
Water Treatment Facilities
132,828
Total
214,192
Note: The amounts were based on sales amounts.

2018
%
38.0
62.0
100.0

Amount90,088145,811
235,899

%
38.2
61.8
100.0

(4) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Year ended March 31,
2017
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount
1,822
7,466
9,289

2018
%
19.6
80.4
100.0

Amount2,809
19,261
22,070

%
12.7
87.3
100.0

(5) Depreciation (Property, Plant and Equipment)(Million yen)

Year ended March 31,
2017
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Amount1,624
11,623
13,248

2018
%
12.3
87.7
100.0

Amount1,804
11,702
13,507

%
13.4
86.6
100.0

22

Disclaimer- This document is an English translation of the Earnings Report for the Year Ended
March 31, 2018 as reference information primarily for overseas investors. If there areany discrepancies between the Japanese version and the English version, theJapanese version shall take precedence in all cases.
- This document is not subject to audit.
- The forward-looking statements such as performance forecasts contained in thisdocument are based on information currently available to the Company and certain
assumptions deemed to be reasonable, and are not intended to be a commitment by
the Company.
Actual performance, etc. may differ due to a variety of factors.
See “Outlook” on page 5 of this document for the conditions assumed in theperformance forecasts and the precautions concerning the use of performance
forecasts.

23