FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Fiscal Year ended March 31, 2021
Tokyo, Japan, May 6, 2021 - Kurita Water Industries Ltd. (TSE Securities Code 6370) announced net
sales of 267,749 million yen and profit attributable to owners of parent of 19,088 million yen, or
169.94 yen per share, for the year ended March 31, 2021 (April 1, 2020 – March 31, 2021).
Results of Operations
Total consolidated orders for the Kurita Group (Kurita Water Industries Ltd. and its consolidated
subsidiaries and equity method affiliates) in the fiscal year ended March 31, 2021 increased 1.1%
from the level of the previous fiscal year, to 262,341 million yen, while net sales rose 1.1%, to267,749 million yen. Business profit* increased 10.6%, to 29,470 million yen, operating profit was
31,529 million yen, up 14.7% versus the year-ago period, profit before tax was 29,150 million yen,rising 9.2%, and profit attributable to owners of parent amounted to 19,088 million yen, up 4.4%.
During the fiscal year, other income of 5,929 million yen and other expenses of 3,870 million yen
were posted. Other income includes a liquidation gain on contract termination settlements of 2,066
million yen due to the termination of an ultrapure water supply agreements with a customer and again on the sale of fixed assets (land) of 1,308 million yen. Other expenses include a loss on
goodwill impairment of 1,304 million yen at Kurita Fracta Holdings, Inc. (Water Treatment Facilities
business). The loss on goodwill impairment at Kurita Fracta Holdings, Inc. was caused by adownward revision of the plan for the water main degradation prediction service business in North
America made at the time of investment by the Company due to COVID-19 restrictions on sales
activities, including holding exhibitions and visiting customers.
The operating results of Pentagon Technologies Group, Inc. (Water Treatment Facilities business)in the United States, which had been an equity method affiliate, has been consolidated since the firstquarter of the fiscal year under review due to the acquisition of its additional shares by the Group to
make it a consolidated subsidiary.
During the fiscal year ended March 31, 2021, economic activities worldwide were sluggish in theface of lockdowns and movement restrictions, among other measures, in response to the COVID-19
pandemic. The second half of the fiscal year, however, brought signs of a recovery as economic
activities gradually resumed.
Looking at the market conditions surrounding the Group, the production activities of the
manufacturing industry declined significantly in Japan, reflecting a fall in demand in Japan andoverseas, although subsequently, there were signs of a recovery, with exports beginning to increase for
instance. More and more companies postponed capital expenditures following weaker corporate
earnings and increasing uncertainty over the future of the economy.
Overseas, while the economies of Europe, the United States and Asia except China were still facing
harsh conditions, there were signs of improvement. In China, economic activity was normalizing, andthe economy was recovering steadily.
In this environment, the Group consistently provided products and services essential for thecontinuation of business activities of customers and accelerated the development of total solutions byfocusing on proposal activities that would help solve customer issues such as reducing theirenvironmental impact, including water saving, reducing CO2 emissions and cutting waste, and an
improvement in productivity based on the Group’s deep insight into social and customer issues underthe basic policy “Maximize customer intimacy by dismantling preconceived ideas and dramaticallyraising the quality and speed of our work.” To reform the business process, the Company establishedthe Digital Strategy Division and worked to provide a water treatment facilities operation management
service using AI and the Internet of Things (IoT) and automate the design of water treatment facilities.
On another front, the Company decided on a merger with Kurita Engineering Co., Ltd. (Water
Treatment Facilities business), a wholly owned subsidiary that engages in the engineering cleaning
business, to strengthen its business for the domestic social and industrial infrastructure market andmade preparations for the merger.
1

Overseas, the Group made the U.S. company Pentagon Technologies Group, Inc. (Water Treatment
Facilities business) a consolidated subsidiary to acquire cutting-edge tool cleaning technology andexpertise and to generate synergies with tool cleaning services in Japan. In addition, the Group
integrated four subsidiaries in North America, and also cut costs by reviewing the product mix of theoverseas Water Treatment Chemicals business and building a global procurement system.
* Business profit is the Group’s own indicator that measures constant business performance. It is net
sales less cost of sales and selling, general and administrative expenses. Although business profit is
not defined by IFRS, the Group voluntarily discloses it, believing that it is beneficial for users of its
financial statements.
Segment Information
The Group consists of two reportable segments in its segment information: Water Treatment
Chemicals and Water Treatment Facilities.
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 103,579 million yen, down
9.0% year on year, while net sales fell 9.2%, to 103,231 million yen. Despite the fall in sales,business profit stood at 12,287 million yen, up 5.3% year on year, and operating profit came to
11,816 million yen, up 16.7% year on year, the result of improving the cost of sales ratio andreducing expenses.
Both orders and net sales declined in Japan due to a fall in capacity utilization at plants ofcustomers, except for some customers such as the electronics industry, affected by stagnant
economic activities due to the spread of COVID-19. Overseas, both orders and net sales decreased
partly due to the effect of a reduction in sales at overseas subsidiaries because of a stronger yen
against certain foreign currencies, in addition to the impact of the spreading COVID-19.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 158,762 million yen, up 8.9%
versus the same period of the previous fiscal year. Net sales increased 8.8%, to 164,518 million yen.
Business profit rose to 17,129 million yen, up 13.7% year on year and operating profit increased to
19,634 million yen, up 12.9%, reflecting the start of consolidation of Pentagon Technologies Group,
Inc. and a reduction in expenses.
In Japan, while orders for water treatment facilities for the electronics industry increased due toorders for large projects posted, net sales declined due to the completion of large projects. Orders formaintenance services for the industry remained flat, reflecting a recovery in demand for maintenancein the latter half of the fiscal year. Net sales increased due to progress in construction projects forwhich orders were posted in the previous fiscal year and a recovery in demand in the latter half of the
fiscal year.
For water treatment facilities for general industries, both orders and net sales increased due to theposting of orders for and sales from large projects. Both orders for and net sales from maintenanceservices for general industries fell, reflecting customers’ move to postpone the implementation ofmaintenance of their facilities due to the spread of COVID-19. For water treatment facilities for theelectric power industry, although orders declined in reaction to the posting of orders for large
projects in the previous fiscal year, net sales increased. Orders and net sales of soil remediation
decreased as orders for and net sales from large projects had run their courses and theimplementation of remediation plans was postponed.
Overseas, both orders and net sales increased due to the new consolidation of operating results (fortwelve months) of Pentagon Technologies Group, Inc. Except for the effect of the new consolidation,
both orders and net sales fell, although net sales from the electronics industry in East Asia rose due toprogress in the construction of large projects in South Korea and Taiwan.
Total net sales in the ultrapure water supply business in Japan and overseas increased due to a2

contract that began in the previous fiscal year.
Financial Condition
1) Total assets: 424,928 million yen (increased 37,179 million yen from the end of the previous
fiscal year)
Current assets totaled 176,482 million yen, an increase of 13,635 million yen from the end of theprevious fiscal year ended March 31, 2020. This was mainly attributable to an increase in cash andcash equivalents of 12,013 million yen.
Non-current assets totaled 248,445 million yen, an increase of 23,543 million yen from the end of
the previous fiscal year. Property, plant and equipment increased 11,245 million yen chiefly due toprogress in the construction of a new research and development base in Akishima-shi, Tokyo, which
the Company plans to open in April 2022. Goodwill increased 8,563 million yen while investments
accounted for using equity method decreased 5,891 million yen due to the conversion of Pentagon
Technologies Group, Inc. (Water Treatment Facilities business), which had been an equity method
affiliate, to a consolidated subsidiary in the first quarter of this fiscal year. Other financial assets rose
5,098 million yen while deferred tax assets decreased 1,096 million yen owing to an increase inunrealized gains mainly caused by a rise in the market value of shares held.
2) Liabilities: 167,090 million yen (increased 23,450 million yen from the end of the previous fiscal
year)
Current liabilities totaled 74,952 million yen at the end of the period, a decrease of 19,456 million
yen from the end of the previous fiscal year. This was mainly due to a decrease in borrowings of
34,926 million yen resulting from the repayment of the commitment line contracts, offsetting an
increase in trade and other payables of 10,826 million yen and an increase in income taxes payable of
6,137 million yen.
Non-current liabilities totaled 92,137 million yen, an increase of 42,905 million yen from the endof the previous fiscal year. Bonds and borrowings increased 29,902 million yen chiefly due to theissuance of unsecured bonds (30,000 million yen) in the third quarter of this fiscal year. An increaseof 11,141 million yen in other financial liabilities is chiefly attributable to the initial recognition of
the present value of the expected value of shares to be transferred in the future based on the forward
contract concluded between Kurita America Holdings Inc., a wholly owned subsidiary of theCompany and non-controlling shareholders of Pentagon Technologies Group, Inc. (Water Treatment
Facilities business).
3) Equity: 257,837 million yen (increased 13,729 million yen from the end of the previous fiscal
year)This principally reflected a rise of 12,682 million yen in retained earnings chiefly due to profit forthe period and an increase of 8,284 million yen in other components of equity in association with arise in the market value of shares held, while the capital surplus decreased 10,424 million yen mainly
as a result of initial recognition related to the aforementioned forward contract for shares in Pentagon
Technologies Group, Inc.
Cash Flows
Consolidated net cash and cash equivalents at the end of the fiscal year ended March 31, 2021 totaled
62,228 million yen, an increase of 12,013 million yen from the end of the previous fiscal year ended
March 31, 2020.
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, 2021 totaled 40,002
million yen, an increase of 2,626 million yen from the previous fiscal year. Inflows from profit
before tax of 29,150 million yen and depreciation and amortization of 20,739 million yen were partly3

offset by income taxes paid of 4,541 million yen.
2) Cash Flows from Investing Activities
Net cash used in investing activities totaled 10,771 million yen, a decrease of 32,912 million yen
from the previous fiscal year. Cash was used mainly for the acquisition of subsidiaries of 4,599
million yen (after deducting cash and cash equivalents included in acquired assets) and purchases ofproperty, plant and equipment of 14,055 million yen, despite inflows, particularly proceeds fromsales of property, plant and equipment of 8,401 million yen.
3) Cash Flows from Financing Activities
Net cash used in financing activities totaled 18,852 million yen, a decrease of 40,833 million yen
from the previous fiscal year. Cash was used mainly for a net decrease in short-term borrowings of
35,001 million yen, dividends paid of 8,083 million yen and repayments of lease liabilities of 5,033
million yen, which more than offset proceeds from issuance of bonds of 29,882 million yen.
The Group’s basic policy is to constantly secure the liquidity necessary for business operations andestablish a stable funds-raising system. Short-term working capital is basically supplied by theGroup’s own funds. Capital investment and other investments in growth fields depend chiefly on theGroup’s own funds, but the Group considers financing through bond markets and bank loans asneeded. As of the end of the fiscal year under review, the Group has concluded commitment line
contracts with one financial institution (no borrowing executed and unexecuted borrowings within
the commitment line was 20,000 million yen).
(Reference) Indicators related to cash flows

Year ended
Year ended
Year ended
Year ended
Year ended
March 31, 2017 March 31, 2018 March 31, 2019 March 31, 2020 March 31, 2021

Ratio of equity attributable to ownersof parent (%)

76.1

73.9

66.0

62.5

59.6

Ratio of equity attributable to ownersof parent based on market value (%)

102.8

117.3

88.3

72.3

125.4

Ratio of interest bearing debt to cash
flows (%)

28.2

42.6

39.6

148.1

130.3

Interest coverage ratio (times)

104.4

41.6

115.9

126.3

187.8

(Notes) Ratio of equity attributable to owners of parent : Equity attributable to owners of parent / Total assets
Ratio of equity attributable to owners of parent based on market value: Market capitalization / Total assets
Ratio of interest bearing debt to cash flows: 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 is net cash provided by operating activities.
4. Interest-bearing debt includes all liabilities requiring the payment of interest under the liabilities section of
the consolidated statement of financial position.
5. The data of the year ended March 31, 2017 and the year ended March 31, 2018 are based on Japanese
GAAP.

4

Outlook for Overall Business, Including Production, Sales, and Profits and Losses
The consolidated results forecasts for the first half of the fiscal year ending March 31, 2022 and thefull year are as shown below.
(The percentages are year-on-year changes.)First half of the fiscal year
(April 1, 2021
- September 30, 2021)

Full year(April 1, 2021
- March 31, 2022)

Million yen%

Million yen%

Net sales

128,000(2.3)

276,000

3.1

Business profit

14,000(0.3)

33,00012.0

Operating profit

13,500(18.0)

32,000

1.5

Profit before tax
Profit attributable to owners of parent

13,1008,600(17.3)(20.2)

31,30021,100

7.4
10.5

While the global economy as a whole slowed significantly in the fiscal year ended March 31, 2021,
due mainly to lockdowns instituted in countries in response to the novel coronavirus pandemic, arebound is expected in the fiscal year ending March 31, 2022. However, measures will be taken until
sufficient vaccinations are completed, including restrictions on people’s activities, in each region
against the continuing increase of new infections, and the economy is unlikely to recover to thepre-pandemic level until the second half of the fiscal year. Trends in the Japanese economy are
expected to be similar to trends in the world economy. Although corporate investment related toremote work and remote services is likely to expand, any recovery in demand will be weak overall
and will be more moderate than in the world economy. The Company’s forecasts of consolidated
results are based on that assumption.
However, in fact it is very uncertain when COVID-19 will subside and it may take a long time. It
is also possible that the infection will lead to a serious economic downturn. In that case, capacity
utilization at plants of customers may fall and capital expenditures may be postponed. It is also
possible that business activities at the Group will be delayed. If the actual situation becomes very
different from our assumption, our business will be affected and the forecasts may have to berevised.
To sustain operations necessary to continue business amid the novel coronavirus pandemic, theGroup is changing its business process to develop remote work arrangements using digitaltechnology. The Group has established guidelines against the novel coronavirus and has taken steps
to prevent the spread of novel coronavirus and is continuing work that will contribute to customers’
business continuity and the maintenance of social and industrial infrastructures.
In these circumstances, the Group will accelerate the creation and development of solution models
that will contribute to social value creation, including the handling of climate change issues, to help
achieve a sustainable society and will advance digital transformation, changing business processes
and transforming business models.
Outlook by Segment
Water Treatment Chemicals
Both orders and sales are likely to increase due to an expected recovery in customers’ production
activities after a fall in demand caused by the spread of COVID-19 and the consolidation of new
subsidiaries, including Kurita Aquachemie Limited (Water Treatment Chemicals business) in the
Middle East. This segment will seek to improve profitability by focusing on the creation anddevelopment of solution models that contribute to creating value shared with society while utilizing
IT and sensing technology under a market-based system integrated with water treatment facilities andmaintenance services in Japan and shifting the focus to highly profitable products and transactions
overseas.

5

Water Treatment Facilities
Orders are expected to increase chiefly due to the expansion of demand for maintenance service andgrowth in the ultrapure water supply business. Net sales is likely to remain flat, reflecting a
year-on-year decrease in projects in the water treatment facilities business. This segment will seek toenhance profitability by focusing on advancing digital transformation in customer contacts and in the
production process and creating and developing solution models.
Dividend Policy and Dividends for the Fiscal Year ended March 31, 2021 and the Fiscal Yearending March 31, 2022
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 work to continue to increase dividends,
making decisions based on the payout ratios for the most recent five years to respond flexibly tofluctuations in business performance each year. In using retained earnings, we will maintain capitaldiscipline and will prioritize promising business fields that are expected to grow. If we have decided
that there are excess funds, we will take steps to improve capital efficiency and return profits toshareholders, including the acquisition of treasury stock, taking the share price into consideration.
We forecast that we would pay an annual dividend of 64 yen per share for the fiscal year ended
March 31, 2021, 2 yen more than the previous annual dividend, taking into consideration uncertainty
because of COVID-19. The operating results in the fiscal year have confirmed, however, the stabilityof the Group’s operations, and we plan to pay a year-end dividend of 34 yen (up 3 yen year on year)
per share, 2 yen more than the previous year-end dividend forecast, in recognition of the support ofour shareholders. Combined with the interim dividend of 32 yen per share (1 yen more than theprevious interim dividend), the annual dividend comes to 66 yen per share, 4 yen higher than theprevious fiscal year’s annual dividend. For the fiscal year ending March 31, 2022, Kurita Water
Industries plans to pay an interim dividend of 36 yen per share and a year-end dividend of 36 yen per
share, for an annual dividend to be 72 yen per share.
(Revision to dividends)

Annual dividend (yen)Interim dividend

Previous forecast for fiscal
year ended March 31, 2021
Revised forecast for fiscal
year ended March 31, 2021

Year-end dividend

Total

‒

32.00

64.00

‒

34.00

66.00

Dividend paid

32.00

‒

‒

Dividend paid for fiscal year
ended March 2020

31.00

31.00

62.00

The above forecasts are made based on our judgment using information currently available. Actual
results may differ materially from forecasts due to various factors.
Basic Concept for the Selection of Accounting Standards
The Kurita Group voluntarily applied IFRS from the first quarter of the fiscal year ended March 31,
2020 for its consolidated financial statements for the purpose of increasing the international
comparability of financial information and unifying accounting treatment within the Group.

6

Consolidated financial statements(1) Consolidated statement of financial position(Million yen)
As of March 31, 2020

As of March 31, 2021

AssetsCurrent assets
Cash and cash equivalents

50,21562,228Trade and other receivables

96,974

97,745

Other financial assets

2,562

2,817

Inventories

9,247

9,911

Other current assets

3,847

3,780

Total current assets

162,847

176,482

Property, plant and equipment

106,358

117,603

Right-of-use assets

17,784

19,405

Goodwill

47,03355,596

Intangible assets

13,381

17,320Non-current assets

Investments accounted for using equity method

7,469

1,578

Other financial assets

28,46533,563

Deferred tax assets

4,295

3,199

Other non-current assets

113

177

Total non-current assets

224,902248,445

387,749

424,928

Total assets

7

(Million yen)
As of March 31, 2020

As of March 31, 2021

Liabilities and equity
Current liabilities
Trade and other payables

35,68046,506

Borrowings

35,371445

Lease liabilities

4,234

4,373

219

‒

Income taxes payable

1,998

8,135

Provisions

1,557

1,847

Other current liabilities

15,345

13,644

Total current liabilities

94,40874,952

Bonds and borrowings

1,305

31,207

Lease liabilities

13,701

15,327

Other financial liabilities

2,562

13,703Retirement benefit liability

16,91318,027

Other financial liabilities

Non-current liabilities

Provisions

499

1,160

Deferred tax liabilities

1,346

2,368

Other non-current liabilities

12,903

10,343

Total non-current liabilities

49,232

92,137

143,640

167,090

13,45013,450Total liabilities
EquityShare capital
Capital surplus

8,212(2,212)

Treasury shares(10,893)(10,787)

Other components of equity

216

8,500

Retained earnings

231,456

244,138

Equity attributable to owners of parent

242,442

253,089

1,666

4,748

244,108

257,837

387,749

424,928

Non-controlling interests
Total equity
Total liabilities and equity8(2) Consolidated statement of profit or loss and comprehensive income
Consolidated statement of profit or loss

(Million yen)
Year ended March 31, 2020

Year ended March 31, 2021

264,807267,749

172,092

173,073

92,715

94,676

Selling, general and administrative expenses

66,06065,206

Other income

5,832

5,929

Net sales
Cost of sales
Gross profit

Other expenses
Operating profit

5,006

3,870

27,47931,529Finance income

569

545

Finance costs

1,417

1,923

60

(999)

26,691

29,150Share of profit (loss) of investments accounted for using
equity method
Profit before tax
Income tax expense
Profit for the period

8,378

9,326

18,312

19,824

18,287

19,08825

735

18,312

19,824162.86169.94‒‒

Profit attributable to
Owners of parent
Non-controlling interests
Profit for the period
Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)9Consolidated statement of comprehensive income(Million yen)
Year ended March 31, 2020

Year ended March 31, 2021

18,312

19,824

(462)

5,202

62

(234)

(400)

4,968

(4,316)

4,851

Cash flow hedges

192

(594)

Share of other comprehensive income of investments
accounted for using equity method

(94)

24

Total of items that may be reclassified to profit or loss

(4,219)4,280(4,619)9,249

13,69329,073

13,71728,021

Profit for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in the fair value of financial assets
measured at fair value through other comprehensive
incomeRemeasurements of defined benefit plans
Total of items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations

Other comprehensive income, net of tax
Comprehensive income for the period
Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income for the period

(24)

1,052

13,69329,07310

(3) Consolidated statement of changes in equity
Fiscal year ended March 31, 2020 (April 1, 2019 - March 31, 2020)(Million yen)
Equity attributable to owners of parent
Other components of equity

Balance as of April 1, 2019

Share capital

Capital surplus

Treasury shares

Exchangedifferences ontranslation offoreign
operations

Cash flow
hedgesFinancial assets
measured at fairvalue throughothercomprehensive
income13,45010,265(10,932)(4,671)

310

Profit for the period

‒

‒

‒

‒

‒

‒

Other comprehensive income

‒

‒

‒

(4,362)

192

(462)

Total comprehensive income for the period

9,199

‒

‒

‒

(4,362)

192

(462)

Purchase of treasury shares

‒

‒

(3)

‒

‒

‒

Dividends

‒

‒

‒

‒

‒

‒

Share-based payment transactions

‒

103

42

‒

‒

‒

Changes in ownership interests in subsidiaries‒(1,385)

‒

0

‒

‒

Increase (decrease) by business combination

‒

‒

‒

‒

‒

‒

Liabilities pertaining to forward contracts
concluded with non-controlling shareholders

‒

‒

‒

‒

‒

‒

Transfer from other components of equity toretained earnings

‒

‒

‒

‒

‒

10

Other

‒

(771)

‒

‒

‒

‒

Total transactions with owners‒(2,053)

38

0

‒

10

Balance as of March 31, 2020

13,4508,212(10,893)(9,033)503

8,747(Million yen)

Equity attributable to owners of parent
Other components of equity
Remeasurementsof defined
benefit plans

Retainedearnings

Total

Non-controllinginterests

Total

Total

Balance as of April 1, 2019

‒

4,838

219,660

237,282

1,902

239,184

Profit for the period‒‒

18,28718,28725

18,312Other comprehensive income

63(4,569)‒(4,569)(49)(4,619)63(4,569)18,287

13,717(24)

13,693Purchase of treasury shares

‒

‒

‒

(3)

‒

(3)

Dividends‒‒(6,521)(6,521)(24)(6,546)

Share-based payment transactions

‒

‒

‒

145

8

154

Changes in ownership interests in subsidiaries

‒

0

‒

(1,385)(196)(1,581)

Increase (decrease) by business combination

‒

‒

‒

‒

‒

‒

Liabilities pertaining to forward contracts
concluded with non-controlling shareholders

‒

‒

‒

‒

‒

‒

Transfer from other components of equity toretained earnings

(63)

(52)

52

‒

‒

‒

‒

‒

(21)

(792)

‒

(792)

Total comprehensive income for the period

Other
Total transactions with owners

(63)

(52)

(6,490)(8,557)(211)(8,769)Balance as of March 31, 2020‒

216

231,456

242,442

1,666

244,108

11

Fiscal year ended March 31, 2021 (April 1, 2020 - March 31, 2021)(Million yen)
Equity attributable to owners of parent
Other components of equity
Share capital

Balance as of April 1, 2020

Capital surplus Treasury shares

Exchangedifferences ontranslation offoreign
operations

Cash flow
hedgesFinancial assets
measured at fairvalue throughothercomprehensive
income13,4508,212(10,893)(9,033)

503

Profit for the period

‒

‒

‒

‒

‒

‒

Other comprehensive income

‒

‒

‒

4,560

(594)

5,202

Total comprehensive income for the period

8,747

‒

‒

‒

4,560

(594)

5,202

Purchase of treasury shares

‒

‒

(4)

‒

‒

‒

Dividends

‒

‒

‒

‒

‒

‒

Share-based payment transactions

‒

9

111

‒

‒

‒

Changes in ownership interests in subsidiaries

‒

(991)

‒

4

‒

‒

Increase (decrease) by business combination

‒

‒

‒

‒

‒

‒

Liabilities pertaining to forward contracts
concluded with non-controlling shareholders‒(10,578)

‒

‒

‒

‒

Transfer from other components of equity toretained earnings

‒

‒

‒

‒

‒

(888)

Other

‒

1,135

‒

‒

‒

‒

Total transactions with owners‒(10,424)

106

4

‒

(888)

Balance as of March 31, 2021

13,450(2,212)(10,787)(4,469)(91)

13,060(Million yen)

Equity attributable to owners of parent
Other components of equity
Remeasurementsof defined
benefit plans

Retainedearnings

Total

Non-controllinginterests

Total

Total

Balance as of April 1, 2020‒

216

231,456

242,442

1,666

244,108

Profit for the period‒‒

19,08819,088735

19,824

(235)

8,932

‒

8,932

316

9,249

(235)

8,932

19,08828,021

1,052

29,073Purchase of treasury shares

‒

‒

‒

(4)

‒

(4)

Dividends‒‒(7,076)(7,076)(1,013)(8,090)Share-based payment transactions

‒

‒

‒

120

(9)

111

Changes in ownership interests in subsidiaries

‒

4

‒

(986)

(208)

(1,194)

Increase (decrease) by business combination

‒

‒

‒

‒

3,260

3,260

Liabilities pertaining to forward contracts
concluded with non-controlling shareholders

‒

‒

‒

(10,578)‒(10,578)

Transfer from other components of equity toretained earnings

235

(653)

653

‒

‒

‒

Other comprehensive income
Total comprehensive income for the period

‒

‒

16

1,152

‒

1,152

Total transactions with owners

Other

235

(648)

(6,406)(17,373)

2,029(15,344)

Balance as of March 31, 2021

‒

8,500

244,138

253,089

4,748

257,83712

(4) Consolidated statement of cash flows(Million yen)
Year ended March 31, 2020

Year ended March 31, 2021

Profit before tax

26,691

29,150Depreciation and amortization

18,70020,739(60)

999

Loss (gain) on sale of fixed assets(2,471)(1,333)

Decrease (increase) in inventories

(169)

254

Cash flows from operating activities

Share of loss (profit) of investments accounted for using
equity method

Decrease (increase) in trade and other receivables

4,527

746

Increase (decrease) in trade and other payables(1,893)(2,904)

Other

2,652

(3,410)47,97744,242

Interest received

141

153

Dividends received

410

360

Interest paid

(305)

(213)

Subtotal

Income taxes paid

(10,847)(4,541)

Net cash provided by (used in) operating activities

37,37640,002

Payments into time deposits(1,951)(1,856)

Proceeds from withdrawal of time deposits

1,545

1,588

Purchase of property, plant and equipment

Cash flows from investing activities(31,168)(14,055)

Proceeds from sale of property, plant and equipment

5,942

8,401

Purchase of intangible assets(1,534)(1,909)41

2,533

Payments for acquisition of subsidiaries (after deductionof cash and cash equivalents included in acquired assets)(8,501)(4,599)Purchase of investments in associates(5,915)‒Other(2,140)(874)

Net cash provided by (used in) investing activities(43,683)(10,771)

35,001(35,001)

Proceeds from sale of investment securities

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from issuance of bonds‒

29,882

(384)

(645)

Repayments of lease liabilities(4,514)(5,033)

Dividends paid

(6,539)(8,083)Purchase of shares of subsidiaries not resulting in change
in scope of consolidation(1,588)‒

Repayments of long-term borrowings

Other
Net cash provided by (used in) financing activities

7

29

21,981(18,852)

Effect of exchange rate changes on cash and cash equivalents(1,006)

1,634

Net increase (decrease) in cash and cash equivalents

14,667

12,013

Cash and cash equivalents at beginning of period

35,54750,215

Cash and cash equivalents at end of period

50,21562,22813

Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Segment Information)(1) Overview of reportable segments
The Company’s reportable segments are components of the Group about which separate financial information is available. Thesesegments are subject to periodic review to enable the Company’s board of directors to decide how to allocate resources and assess
performance.
The Group plans comprehensive strategies for the products that it handles in Japan and overseas, and develops a business. The
Group’s operations are therefore classified into two reportable segments, the Water Treatment Chemicals segment and the Water
Treatment Facilities segment.
The Water Treatment Chemicals segment manufactures and sells water treatment chemicals and equipment and provides
maintenance services. The Water Treatment Facilities segment manufacturers and sells water treatment equipment and facilities,
supplies ultrapure water, chemical cleaning, tool cleaning, soil and groundwater remediation services, and provides maintenanceservices that encompass operation, maintenance, and management of water treatment facilities.
(2) Information of reportable segments
Inter-segment net sales are based on prevailing market prices.

14

Fiscal year ended March 31, 2020 (April 1, 2019 - March 31, 2020)(Million yen)
Reportable Segments

Sales
Sales to outside customers
Inter-segment sales and transfers
Total
Segment income

Adjustments(Note)

Amounts
reported on the
consolidated
financialstatements

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

113,632681

151,174
1,777

264,8072,458‒(2,458)

264,807‒

114,313

152,952

267,265(2,458)

264,807

10,127

17,39027,518(38)

27,479Finance income

569

Finance costs

1,417

Share of profit (loss) of investments accounted for using equity method

60

Profit before tax

26,691(Million yen)
Reportable Segments

Segment assets
Other amounts
Depreciation and amortization
Impairment loss
Investment in equity method affiliates
Capital expenditures

Adjustments(Note)

Amounts
reported on the
consolidated
financialstatements

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

119,960

209,015

328,975

58,774

387,749

5,496
‒
2,489
6,853

13,20429
4,960
26,42818,70029
7,449
33,281‒‒20‒

18,70029
7,469
33,281(Notes) 1. Segment income: Amount resulting from eliminations of inter-segment transactions.
2. Segment income is shown at the operating profit level.
3. Segment assets: Amount resulting from eliminations of inter-segment transactions.
The main factor of adjustments for segment assets is company-wide assets that are not allocated to the reportablesegments.
4. Capital expenditures include an increase in right-of-use assets.
5. Capital expenditures do not include assets acquired through corporate acquisitions.

15

Fiscal year ended March 31, 2021 (April 1, 2020 - March 31, 2021)(Million yen)
Reportable Segments

Sales
Sales to outside customers
Inter-segment sales and transfers
Total
Segment income

Adjustments(Note)

Amounts
reported on the
consolidated
financialstatements

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

103,231453

164,518
2,306

267,749
2,760‒(2,760)267,749‒

103,684

166,825

270,509(2,760)267,749

11,816

19,634

31,451

78

31,529Finance income

545

Finance costs

1,923

Share of profit (loss) of investments accounted for using equity method(999)

Profit before tax

29,150(Million yen)
Reportable Segments

Segment assets
Other amounts
Depreciation and amortization
Impairment loss
Investment in equity method affiliates
Capital expenditures

Adjustments(Note)

Amounts
reported on the
consolidated
financialstatements

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

123,476

233,530

357,006

67,921

424,928

4,986
‒
1,448
8,719

15,752
1,419
110
25,84820,7391,419
1,558
34,568‒‒19‒

20,7391,419
1,578
34,568(Notes) 1. Segment income: Amount resulting from eliminations of inter-segment transactions.
2. Segment income is shown at the operating profit level.
3. Segment assets: Amount resulting from eliminations of inter-segment transactions.
The main factor of adjustments for segment assets is company-wide assets that are not allocated to the reportablesegments.
4. Capital expenditures include an increase in right-of-use assets.
5. Capital expenditures do not include assets acquired through corporate acquisitions.
6. The main factor of impairment loss is a loss on goodwill impairment of 1,304 million yen.
(3) Information related to products and services
Information about products and services is omitted because the classifications are the same as the reportable segments.

16

(4) Information related to geographic regions
Non-current assets and sales to external customers by geographic region in each fiscal year are as follows.
(i) Non-current assets(Million yen)
As of March 31, 2020
Japan
Asia
North America
EMEA
Other
Total

As of March 31, 2021
110,963
17,44640,161
15,695405

119,495
17,93955,323
16,975
370

184,671

210,104(Note) Non-current assets are allocated based on the location of assets. Financial instruments or deferred tax assets are not included.
EMEA stands for Europe, the Middle East and Africa.
(ii) Net Sales(Million yen)
Year ended March 31, 2020
Japan
Asia
North America
EMEA
Other
Total

Year ended March 31, 2021

161,699
52,50928,826
19,132
2,639

161,371
48,53536,994
18,681
2,166

264,807267,749(Note) Net sales are allocated to a country or areas based on the locations of customers.
EMEA stands for Europe, the Middle East and Africa.
(5) Information related to major customers
Because there is no single external customer that accounts for 10% or more of the net sales in the consolidated statement of income,no information is stated here.

(Business Combination and Acquisition of Non-Controlling Interests)(Acquisition of Pentagon Technologies Group, Inc.)On April 1, 2020, Kurita America Holdings Inc., a wholly owned subsidiary of the Company, acquired an additional 26% stake inPentagon Technologies Group, Inc. (“Pentagon Technologies”), a tool cleaning company operating in the United States in which
Kurita America Holdings Inc. held a 25% stake as of the end of the previous fiscal year. As a result, the proportion of equity interest
Kurita America Holdings Inc. has in Pentagon Technologies increased to a total of 51%, and Pentagon Technologies became aconsolidated subsidiary of the Company.
The Company will make Pentagon Technologies its subsidiary to have a base for overseas service in the electronics industry, which
the Company positions as one of its key business fields, and to further strengthen its competitiveness in the market. The Company
also aims to accelerate its growth and offer new value by acquiring the cutting-edge tool cleaning technologies and expertise ofPentagon Technologies and creating synergies with the tool cleaning business that the Kurita Group has been developing in Japan.
(1) Acquisition cost and a breakdown
Consideration for acquisition
Fair value on the date of acquisition of the shares in the acquired company held immediately before the date ofacquisition
Fair value of the additional shares in the acquired company acquired on the date of acquisition
Total(Million yen)
5,379
5,594
10,974(2) Gain on remeasurement relating to business combinations
As a result of remeasuring equity interest in the acquired company held immediately before the date of acquisition at fair value, theCompany has recognized gain on remeasurement relating to business combinations of 463 million yen due to the business17

combination. The gain is recorded in Other income in the consolidated statement of profit or loss.
(3) Assets acquired and liabilities assumed
The fair value of identifiable assets acquired and liabilities assumed of Pentagon Technologies Group, Inc. on the date of acquisition
are shown below.
(Million yen)
Fair value of consideration for acquisition

10,974

Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Trade receivables
Other current assets

995
1,636
554

Technology-related assets

2,334

Customer-related assets

1,732

Other non-current assets

3,169

Trade and other payables(1,520)Non-current liabilities(2,407)

Fair value of assets acquired and liabilities assumed (net)6,494

Non-controlling interests

3,260

Goodwill

7,739

The provisional accounting method was determined in the fourth quarter under review, and goodwill on the date of acquisition
decreased 1,881 million yen. This reflected an increase of 2,334 million yen in technology-related assets and an increase of 1,732
million yen in customer-related assets on the one hand, and on the other an increase of 1,234 million yen in non-current liabilities
and an increase of 1,808 million yen in non-controlling interests. The amount of goodwill that occurred was 7,739 million yen,which reflects expected excess earning power. We do not expect any amounts related to recognized goodwill to be deductible
expenses from tax perspective.
Net sales and profit of Pentagon Technologies included in the consolidated statement of profit or loss for the fiscal year under review
are 11,350 million yen and 814 million yen, respectively.
Non-controlling interests are measured using the proportion of non-controlling interests to the fair value of identifiable net assets of
the acquired company.
(4) Transactions that are accounted for separately from business combination
Expenses related to the acquisition for the business combination were 171 million yen. The amount is posted in Other expenses in
the consolidated statement of profit or loss.
(5) Forward contract concluded with non-controlling shareholders
With regard to the remaining 49% of shares in Pentagon Technologies, a forward contact has been concluded between Kurita
America Holdings Inc. and non-controlling shareholders of Pentagon Technologies, and it has been agreed that Pentagon
Technologies will become a wholly owned subsidiary of Kurita America Holdings Inc. with June 30, 2022 as the target date.
The present value of expected value of shares to be transferred based on the forward contract which is 10,578 million yen, is initiallyrecognized as Other financial liabilities, and the same amount is deduced from Capital surplus. After the initial recognition, thepresent value is measured at amortized cost based on the effective interest method, in principle, and the amount of subsequentchanges is recognized in profit or loss.

18

(Bonds)
Fiscal year ended March 31, 2020 (April 1, 2019 - March 31, 2020)
No bonds were issued or redeemed.
Fiscal year ended March 31, 2021 (April 1, 2020- March 31, 2021))
The bonds issued are described below.
Total amount issued(million yen)

Name

Issue

Issue date

The Company

First series of unsecured
bonds

December 10, 2020

Interest rate(%)

30,0000.150

Redemption period
December 10, 2025

No bonds were redeemed.

(Per Share Information)
The basis for calculation of basic earnings per share is as shown below.

(Million yen)

Year ended March 31, 2020
Profit attributable to owners of parent
Amount not attributed to common stockholders
Profit that is used for calculating basic earnings per share
Average number of common shares outstanding

Year ended March 31, 2021

18,287

19,088‒‒18,287

19,088112,291,114

112,327,368(Notes) 1. Because there are no dilutive shares, diluted earnings per share are not stated.
2. The Company’s own shares posted as treasury shares remaining in trust are included in the treasury shares that are
deducted in the calculation of the average number of shares outstanding for calculation for basic earnings per share.
(286,000 shares in the fiscal year ended March 31, 2021, 317,000 shares in the fiscal year ended March 31, 2020)(Consolidated Statement of Profit or Loss)
In the fiscal year under review, a liquidation gain on contract termination settlements of 2,066 million yen and a gain on the sale of
fixed assets (land) of 1,308 million yen were posted in other income.
A loss on goodwill impairment of 1,304 million yen was posted in other expenses.

19

(Significant Subsequent Events)
Transaction under Common Control(1) Outline of the transaction(i) Company names and businesses at the time of integrationi) Surviving company
Company name
Kurita Water Industries Ltd.
Business description Manufacture and sale of water treatment chemicals and water treatment facilities; maintenance of water
treatment facilities; ultrapure water supply; soil and groundwater remediationii) Merged companies
Company name
Kurita Engineering Co., Ltd. (“Kurita Engineering”)
Business description Plant cleaning and maintenance; manufacture and sale of cleaning and sewage treatment chemicals,
facilities, and equipment; rental of temporary machinery(ii) Date of business combination
April 1, 2021(iii) Legal form of business combination
The business combination is an absorption-type merger. The surviving company is the Company. Kurita Engineering has been
dissolved.
(iv) Name of the company after business combination
Kurita Water Industries Ltd.
(v) Main reason of integration
Kurita Engineering was established in 1959, by spinning off the chemical cleaning division of the Company. As a leading plantcleaning engineering company, Kurita Engineering engages primarily in chemical cleaning for large plants in Japan. In the social
and industrial infrastructure market, including the electricity, iron and steel, petroleum refinery and petrochemical industries,
which are primarily where Kurita Engineering and the Company operate, needs to reduce the environmental impact, including
decarbonization to address climate change, and demand productivity improvement are increasing.
The merger enables the Company to appropriately respond to those needs by harnessing Kurita Engineering’s strong technologicalbase and customer base and using in an agile way the Company’s management resources, including financial capital and humancapital, and to provide optimal solutions. The Company will build a system to promptly respond to social and customer needs inthe social and industrial infrastructure market and will expand the plant cleaning business and achieve sustainable growth in thebusiness.
(2) Outline of accounting
The business combination under common control is a business combination in which all companies or businesses involved areultimately controlled by the same company before and after the business combination. The control is not temporary. The Group
continues to perform accounting treatment for all business combination transactions under common control based on book value.

Disclaimer- This document is an English translation of the Earnings Report for the Fiscal Year Ended March 31, 2021 as reference information
primarily for overseas investors. If there are any discrepancies between the Japanese version and the English version, the Japaneseversion shall take precedence in all cases.
- This document is not subject to audit.
- The forward-looking statements such as performance forecasts contained in this document 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 theCompany. Actual performance, etc. may differ due to a variety of factors. See “Outlook for Overall Business, Including Production,
Sales, and Profits” on page 5 of this document for the conditions assumed in the performance forecasts and the precautions
concerning the use of performance forecasts.

20