Kurita Water Industries Ltd.
Results Presentation
for the Year Ended March 31, 2010
( Stock code : 6370 )May 7, 2010

Table of Contents

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【 1 】 Financial Highlights【 2 】 Orders, Sales, Operating Income, and Operating Income Margin【 3 】 Water Treatment Chemicals【 4 】 Water Treatment Facilities (for the electronics industry)【 5 】 Water Treatment Facilities (for general industries)【 6 】 Analysis of Changes in Operating Income for the Fiscal Year Ended March 31, 2010
【 7 】 Financial Condition

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【1】 Financial Highlights(Billions of Yen)
03/2009

03/2010Year-on-yearchangeRevisedprojection
issuedJan. 29, 2010

Orders

195.1

175.2

- 10.2％

187.0

187.0

Net Sales

199.7

178.5

- 10.6％

180.0

192.0

Operating
Income27.9

26.4- 5.6％

26.0

26.0

Ordinary
Income28.9

27.1- 6.3％

26.526.5

Net Income

16.3

17.3

+ 6.1％

15.0

15.0

Initialprojection

1

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【2】 Orders, Sales, Operating Income, and Operating Income Margin
Water treatment chemicals

Water treatment facilities

Total

*

denotes revised projection issued

Orders(Billions of Yen)
200

195.1
58.5

Sales
175.2

187.0

53.4

54.0

1000

(Billions of Yen)
200

58.3

136.6

121.8 133.0

03/2009

03/2010

053.7

54.0

141.4

124.8

126.0

03/200903/2010

Operating Income Margin

27.9

26.4

26.0

8.4

8.2

8.0(%)
1515.2 14.8
14.4

150

178.5 180.0

100

Operating Income(Billions of Yen)
30

199.7

1419.518.203/200903/2010

18.01314.8 14.4
14.6 14.3

14.0
13.803/200903/2010
2

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【3】 Water Treatment Chemicals
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

6060

1030

058.503/2009

53.403/2010

300【 Major determinants of growth/
decline in orders/sales 】
 Decline for all products in all regions of Japan Decline through 3Q overseas

58.303/2009

53.703/2010

50

14.4

15.2

8.4

8.203/2009

03/2010(%)

1680【 Major determinants of change 】
 Lower revenue in Japan and overseas
 Switch to high value-added products
 Drop in raw materials prices
 Curbing of SG&A expenses3

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【4】 Water Treatment Facilities (for the electronics industry)
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

80

80

40073.7

71.003/2009

03/2010【 Major determinants of change 】
 Decline in hardware Decline in maintenance services
 Expansion of ultrapure watersupply business

400(Billions of Yen)

1677.603/2009

67.303/2010【 Major determinants of change 】
 Decline in hardware Decline in maintenance services
 Growth in the ultrapure watersupply business

80

20.9
18.6(%)

20

14.4

14.003/2009

03/2010100【 Major determinants of change 】
 Lower revenue in Japan and overseas
 Improved sales mix
 Lower cost of sales Curbing of SG&A expenses
4Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【5】 Water Treatment Facilities (for general industries)
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

70

7035062.903/2009

35

50.803/2010【 Major determinants of change 】
 Decline in hardware Decline in maintenance services

0(Billions of Yen)

8.0

663.703/2009

57.503/2010【 Major determinants of change 】
 Decline in hardware Decline in maintenance services Decline in soil remediation

30(%)

7.2

5.103/2009

844.103/2010

0【 Major determinants of change 】
 Impacted by decline in revenues
 Lower cost of sales Curbing of SG&A expenses
5Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【6】 Analysis of Changes in Operating Income for the Fiscal Year Ended March 31, 2010
(Billions of Yen)

30+ 3.0

27.9
+ 0.9

26.4

+ 1.0

- 6.5
15003/2009

Effect oflower
revenues*

Lower costof raw
materials

Lower
SG&Aexpenses

Effect ofimproved costof sales ratio*

03/2010

Effects of lower revenues and improved cost of sales ratio* are calculated using the gross profit margin.
*Cost of sales ratio: Costs of sales / Sales

6

Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2010

【7】 Financial Condition
AssetsLiabilities and Net Assets(Billions of Yen)

245.4

251.6

27.1

44.9
( + 17.8)

71.6

64.4
( - 7.2)

126.1

116.5

(Billions of Yen)

245.4
Cash, deposits
andMarketablesecurities

66.8

251.6
57.7

Liabilities( - 9.1)

Other current
assetsTangible fixedassets

178.6

193.9

Net assets( - 9.6)

20.6
Mar. 31, 200925.8

( + 5.2)
Mar. 31, 2010

Other fixedassets( + 15.3)
Mar. 31, 2009

Mar. 31, 2010
7

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【 1 】 Key Assumptions【 2 】 Overview【 3 】 Orders, Sales, Operating Income, and Operating Income Margin【 4 】 Water Treatment Chemicals【 5 】 Water Treatment Facilities (for the electronics industry)【 6 】 Water Treatment Facilities (for general industries)【 7 】 Service Business Revenue【 8 】 Expand Ultrapure Water Supply Business【 9 】 Overseas Businesses【10】 Capital Expenditures, Depreciation, and R&D Expenses【11】 Dividend Policy

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【1】 Key Assumptions

Water Treatment Chemicals Segment
 Demand will recover in Asia and emerging countries
 Demand will recover moderately in Japan Raw materials prices may rise

Water Treatment Facilities Segment
 Capital expenditure demand will rise in the Asian electronics industry
 Languid recovery in capital expenditure in Japan Demand for maintenance services will bottom out in Japan8

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【2】 Overview(Billions of Yen)
03/2010
Actual03/2011
Projection

Year-on-yearchange

Orders

175.2

200.0+ 14.2%

Net Sales

178.5

195.0+ 9.2%

Operating Income

26.4

29.5

+ 11.9%Ordinary Income

27.1

30.0

+ 10.7%Net Income

17.3

17.3

+ 0.1%

9

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【3】 Orders, Sales, Operating Income, and Operating Income Margin
Water treatment chemicals

Water treatment facilities

Orders(Billions of Yen)
200

175.2
53.4

Sales
200.0

(Billions of Yen)
200

53.7

121.8

142.1

03/2010Actual

03/2011
Projection

26.4
8.2

29.5
9.3

150

195.0
57.3

1000

Operating Income(Billions of Yen)
30

178.5

57.9

1000Total

20.2

03/2010
Actual03/2011
Projection

137.7

03/2010
Actual03/2011
Projection

Operating Income Margin
(%)
1615

18.2

124.8

14

16.2

15.2

15.1

14.8
14.6

14.7

03/2010
Actual03/2011
Projection10

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【4】 Water Treatment Chemicals
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

60

60

1030053.4

57.903/2010
Actual03/2011
Projection【 Major determinants of growth/
decline in orders/sales 】
 Japan: Modest recovery in demand Overseas: Demand recovery led by Asia

30053.7

57.3

03/2010
Actual03/2011
Projection

15.2

5

8.20

03/2010
Actual

16.2

(%)

169.3

03/2011
Projection

80【 Major determinants of change 】
 Revenue growth in Japan and overseas
 Efforts to reduce cost of sales Curbing of SG&A expenses
 Rise in raw materials prices11

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【5】 Water Treatment Facilities (for the electronics industry)
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

90

90

45

71.0003/2010
Actual84.2(Billions of Yen)

45

【 Major determinants of change 】
 Growth in hardware overseas
 Languid recovery in capital expenditurein Japan Bottoming out of maintenance services

020.1

1867.303/2011
Projection

20.903/2010
Actual82.503/2011
Projection【 Major determinants of change 】
 Growth in hardware overseas
 Bottoming out of maintenanceservices

20914.00(%)

03/2010
Actual16.603/2011
Projection

100【 Major determinants of change 】
 Impact of revenue growth Cost increases in the ultrapure
water supply business
12

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【6】 Water Treatment Facilities (for general industries)
OrdersOperating Income andOperating Income Margin

Sales

Operating income
Operating income margin(Billions of Yen)

(Billions of Yen)

60

60

30

050.803/2010
Actual57.830(Billions of Yen)

657.5

55.1(%)

7.2

344.1

03/2011
Projection【 Major determinants of change 】
 Growth of hardware in electric powerand general industries
 Bottoming out of maintenance services

003/2010
Actual03/2011
Projection【 Major determinants of change 】
 Completion of major projects
 Bottoming out of maintenance services

6.50803/2010
Actual3.603/2011
Projection0【 Major determinants of change 】
 Decline in revenues due tocompletion of major projects
13

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【7】 Service Business Revenue
Service Business Revenue
in the Water Treatment Facilities Segment

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

200

(Billions of Yen)

199.7

100

195.0
178.5

23.9

58.3

57.3
53.7

98.4

003/2009
Actual

161.2

103.8

34.7

Ultrapurewater supply
business

11.0

Tool cleaning

53.6

58.2

Maintenance,etc.

03/2010
Actual03/2011
Projection

34.6

10.2
50

98.9

42.5

98.4

13.1
152.1

157.2
100

98.9

103.8
ServiceBusiness
Revenue

26.4

33.8

03/2010
Actual03/2011
Projection

0

61.9

03/2009
Actual*The soil remediation business is included in "Maintenance, etc."
14

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011【8】 Outlook for the Ultrapure Water Supply Business
Capital Expenditures

Sales(Billions of Yen)

(Billions of Yen)

60

4030

20

52.0

34.6

34.7

23.9
16.8

19.80

5.7
03/2008
Actual03/2009
Actual03/2010
Actual2.1
03/2011

Projection

003/2008
Actual03/2009
Actual03/2010
Actual03/2011

Projection15

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011

【9】 Overseas Businesses
Sales by Region

Asia

N. America

Europe(Billions of Yen)

Sales by Overseas Business Segment

Other

29.6

30

2.8
1.6
3.0

26.0
2.9
1.6
1.4

26.0
10.9
11.0
15

19.0
9.4

03/2010
Actual18.7

14.913.403/2009
Actual

29.6

30

22.3

20.1

0

Water treatment facilities(Billions of Yen)

19.0
2.6
1.4
1.615

Water treatment chemicals

9.603/2011
Projection

003/2009
Actual03/2010
Actual03/2011
Projection
16

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011【10】 Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures and Depreciation

Capital expenditures(ultrapure watersupply business)

Capital expenditures(excl. ultrapure
water supply business)

Depreciation(Billions of Yen)60

R&D Expenses

R&D Expenses(Billions of Yen)(%)

655.744.430

352.0

7.5
10.90

Percentage of net sales

14.8

3.7

5.7
1.803/2009
Actual03/2010
Actual

4.5
4.0

2.2

2.203/2009
Actual03/2010
Actual2.32

4.3 15.5
2.12.203/2011
Projection003/2011
Projection

017

Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2011【11】 Dividend Policy
(Yen)
4032
28343638+2+2+2+420+6003/2007
Actual03/2008
Actual03/2009
Actual03/2010
Projection

03/2011
Projection

Basic Dividend Policy
Kurita’s basic policy is to maintain stable dividends, and the company will work to increase
dividends while giving due consideration to trends in results and investments in its businesses.
18

Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)【 1 】 Basic themes and medium-term vision【 2 】 Expand and evolve service business
Expanding sales of RO (reverse osmosis) membrane water treatment chemicals【 3 】 Expand global operations
Taking in major orders from LCD plants in China and strengthening the wastewater
reclamation business【 4 】 Branch into new products and markets
Electrolyzed sulfuric acid generator / Electrolyte blowout prevention material foraluminum electrolytic capacitors

Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)【1】 Basic themes and medium-term vision
Basic theme :Evolution and Progress

Expand andevolve service
businesses

Expand global
operations

New value throughwater and newfunctionality for water

Bolster operating baseRisk management

Develop our people andpursue manufacturing
excellence19Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)
Expanding sales of RO (reverse osmosis)【2】 Expand and evolve service business : membrane water treatment chemicals
Amid growing global water demand, there is a rising need for seawater desalinationin China and the Middle East and for wastewater reclamation in Asia. In response,
we have initiated an RO Chemicals Project Group.

 Pretreatment coagulant
 Slime control agent
 Scale inhibitor

Developed and launched salesof 3 new products*Slime : Contaminant formed by microbes such as underwater bacteria and algae*Scale : Calcium or silica solid precipitated from waterStandard RO Membrane Processing FlowRawwater

Coagulation
andfiltration

Activatedcarbon

Pretreatment coagulants
Slime control agent

Safety filter

Scale inhibitorROmembrane

Treatedwater

Kurita’s
Water Treatment Chemicals

20

Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)
Taking in major orders from LCD plants in China and【3】 Expand global operations : strengthening the wastewater reclamation businessElectronics Industry

General Industries

Taking in major orders for water treatment
equipment for LCD panel plants

Step up efforts in wastewater reclamation forgeneral industries(food, automotive, plates, pharmaceuticals, etc.)

Aim for top share in water treatment
facilities market in China

Capture demand from existing Japanesecompanies in China for productivity
enhancement and environmental mitigation

 Initiated a Water/Resources Recycling Project Dept.
 Initiated a Water/Resources Recycling Engineering Dept.
 Enhance local production and local procurement efforts in China
 Expand business domain of Kurita Water Industries (Suzhou)(full lineup from production to maintenance)

Concentrated investment of resources in China
21

Ⅲ. Key Strategies for 2nd Year of MP-11 (Medium-term Management Plan)
Electrolyzed sulfuric acid generator / Electrolyte blowout【4】 Branch into new products and markets : prevention material for aluminum electrolytic capacitors
Electrolyzed sulfuric acidgenerator(Green Sulfaceed KDTM)
Reduces amount of liquid used insemiconductor manufacturing (resistremoval) through electrolysis with diamondelectrodes. First order received from major
U.S. semiconductor manufacturer, received
follow-on orders.

Electrolyte blowout prevention
material for aluminum electrolytic
capacitors (Epsiguard TM KC)
Uses clathrate compound technology toinstantly absorb electrolyte materials
discharged from aluminum electrolytic
capacitors when electric anomalies occur.
Clathrate compound technology :A technique used to integrate guest molecules into hostmolecules, thereby creating a solid.

Electrolyzed sulfuric acid generator for resist
removal processes
22Kurita Water Industries Ltd.
■ U R L ■http://www.kurita.jp/■ M A I L ■ir@kurita.co.jp

Forward-looking Statements
This presentation contains forward-looking statements, business plan projections, and judgments based on
information available to management at the time of writing. Due to the existence of a variety of risk factors
and uncertainties, actual results may differ from those specified or implied by these forward-lookingstatements and projections.