FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Six Months Ended September
30, 2015
Tokyo, Japan, October 29, 2015—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 97,918 million yen and profit attributable to owners of theparent company of 5,764 million yen, or 49.61 yen per share, for the six months ended
September 30, 2015 (April 1, 2015 – September 30, 2015).
Results of Operations
Total consolidated orders for the Kurita Group in the six months ended September 30,
2015 rose 13.4% from the level of the same period of the previous fiscal year, to110,000 million yen, and net sales increased 10.1%, to 97,918 million yen. Operating
income was 9,133 million yen, up 5.8% versus the same period of the previous fiscal
year, and ordinary income was 9,490 million yen, up 3.3%. Profit attributable to ownersof the parent company amounted to 5,764 million yen, down 2.1%. Because of theconsolidation of acquired businesses, the consolidated orders and net sales of the Groupand the Water Treatment Chemicals segment rose 9,858 million yen, but theconsolidated operating income declined 537 million yen. The decline in operating
income was principally attributable to the posting of the amortization of the goodwill
and technology-related assets acquired in association with the business acquisition and atemporary rise in expenses associated with a review of the initial allocation of the costof the business acquisition.
Looking at the market environment surrounding the Kurita Group (Kurita Water
Industries Ltd. and its consolidated subsidiaries and equity method affiliates),
production in the manufacturing industry remained flat mainly due to sluggish growthin exports, but there were signs of recovery in capital expenditure on the back of an
improvement in corporate earnings in Japan. Overseas, growth in China and otheremerging economies slowed, but the U.S. and European economies continued torecover. Overall, economies worldwide grew modestly.
In this environment, the Kurita Group worked to propose solutions to customers’
challenges by combining its three functions: water treatment chemicals, water treatment
facilities and maintenance services. From the first quarter, the Group is consolidating
the results of operations of the businesses that it has acquired from BK Giulini GmbH inGermany and its affiliates.
Segment Information
The Group consists of segments by product and service based on business divisions.
The reportable segments in segment information are the Water Treatment Chemicals
segment and the Water Treatment Facilities segment.
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 41,335 million
yen, up 39.0% versus the same period of the fiscal year ended March 31, 2015, whilesales rose 38.3%, to 40,595 million yen. Operating income was down 12.3% to 3,597
million yen due to the posting of the amortization of goodwill and technology-related
assets and a temporary expense associated with a review of the initial allocation of the1

cost of business acquisition.
In Japan, the Group worked to gain new customers by proposing solutions using new
products and services. Meanwhile, capacity utilization recovered at only part ofcustomers’ plants. For those reasons, orders and sales remained flat. Overseas, bothorders and sales increased significantly, reflecting strong performance in China andSoutheast Asia and the consolidation of acquired businesses from the first quarter.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 68,664 million yen,up 2.1% versus the same period of the previous fiscal year. Sales declined 3.8%, to57,322 million yen. Operating income climbed 22.1%, to 5,541 million yen due to an
improvement in the cost rate as a result of cost cutting.
In Japan, in the electronics industry, orders and sales in maintenance services rose,
mainly reflecting an improvement in capacity utilization at plants manufacturing
electronic components for smartphones. In the ultrapure water supply business, orders
and sales rose mainly due to an increase in basic rate revenue through additional
investment. In general industries, orders declined slightly. Sales of water treatment
facilities for electric power and sales in maintenance services rose, but sales of water
treatment facilities except for electric power declined chiefly due to delays in progressin construction in progress. Overseas, orders rose, chiefly reflecting large-scale projects
in the electronics industry in China and Taiwan, but sales fell.
Financial Condition
Assets, liabilities and net assets
Current assets totaled 146,163 million yen at the end of the second quarter (September
30, 2015), a decrease of 2,804 million yen versus the end of the previous fiscal year
(March 31, 2015). This was mainly a result of declines of 2,868 million yen in cash anddeposits and 5,324 million yen in trade accounts receivable, which overweighed
increases of 2,000 million yen in marketable securities, 2,782 million yen in work inprocess, and 1,146 million yen in “other” current assets.
The decline in cash and deposits principally reflected the settlement of part of theremaining cost of business acquisition in Europe. The decline in trade accounts
receivable was the result of progress in collecting receivables. The increase inmarketable securities was mainly the result of increased investment in negotiablecertificates, which are treated as marketable securities. The rise in work in process waschiefly the result of progress in construction in the water treatment facilities business.
The climb in “other” current assets was mainly due to an increase of 1,000 million yen
in accounts receivable-other in association with the business acquisition in Europe.
Noncurrent assets totaled 143,103 million yen at the end of the first half (September
30, 2015), a decline of 2,422 million yen versus the end of the previous fiscal year. The
decline was principally attributable to a 3,635 million yen decrease in investments andother assets, which was partly offset by a 1,584 million yen rise in property, plant andequipment. The decline in investments and other assets was chiefly due to a decrease inunrealized gains on investment securities due to falls in the market prices of the shares
held by the Group. The increase in property, plant and equipment was mainly due to anincrease in construction in progress in new ultrapure water supply projects.
Current liabilities totaled 43,178 million yen at the end of the period, a decline of2

4,797 million yen versus the end of the previous fiscal year. This was mainly a result of
declines of 1,792 million yen in trade accounts payable, 868 million yen in income
taxes payable, and 2,210 million yen in “other” current liabilities. The decrease in“other” current liabilities was attributable mainly to the settlement of part of theremaining cost of business acquisition in Europe.
Noncurrent liabilities totaled 22,773 million yen at the end of the period, a decreaseof 266 million yen versus the end of the previous fiscal year.
Net assets totaled 223,315 million yen at the end of the period, a decrease of 163
million yen versus the end of the previous fiscal year primarily due to a fall of 2,316
million yen in accumulated other comprehensive income, which was partly offset by anincrease of 2,096 million yen in shareholders’ equity. The decrease in accumulated othercomprehensive income resulted mainly from a decline of 2,591 million yen in
unrealized gains (losses) on available-for-sale securities in association with a decline inunrealized gains on investment securities. The increase in shareholders’ equity reflected
an increase of 3,084 million yen as a result of net income of 5,764 million yen in excess
of year-end dividends of 2,680 million yen for the previous fiscal year, and a rise of 989
million yen in treasury stock due to the acquisition of treasury stock.
Cash flows
Consolidated net cash and cash equivalents at the end of the first half of the fiscal year
(September 30, 2015) stood at 33,777 million yen, an increase of 5,232 million yen
from the end of the previous fiscal year (March 31, 2015). Cash flows in each category
and their main factors are outlined below.
Cash flows from operating activities
Net cash provided by operating activities during the first half of the fiscal year ending
March 31, 2016, totaled 12,227 million yen, a decrease of 297 million yen from a year
ago. Inflows from income before income taxes (9,485 million yen), depreciation andamortization (7,509 million yen; including the amortization of goodwill), and a decreasein trade notes and accounts receivable (5,908 million yen) were partially offset byincome taxes paid (4,762 million yen), an increase in inventories (2,853 million yen), a
decrease in notes and accounts payable-trade (1,970 million yen), and other outflows(1,621 million yen).
Cash flows from investing activities
Net cash used in investing activities stood at 30,703 million yen, an increase of 9,211
million yen from a year earlier, primarily reflecting net deposits into time deposit
accounts of 12,181 million yen, payments for purchases of marketable securities of
9,000 million yen, payments for the purchase of property, plant and equipment,
including capital expenditures for ultrapure water supply business, of 6,790 million yen,
and a payment of 2,549 million yen for business acquisition in Europe.
Cash flows from financing activities
Net cash used in financing activities came to 3,692 million yen, an increase of 324
million yen from a year earlier, attributable mainly to the purchase of treasury stock of
988 million yen and cash dividends paid of 2,707 million yen.

3

Outlook for the Fiscal Year Ending March 31, 2016
The Company has revised its earnings forecast for the fiscal year ending March 31,
2016, in light of its results in the first half under review and uncertainty about thebusiness environment in the second half. The details of the revision are as shown below.
The forecast is produced by the Company based on information available at the timeof publication of this document. Actual results may differ significantly from the forecast
due to a change in a range of factors.
(Consolidated earnings forecast)
Revision of consolidated earnings forecast for the fiscal year ending March 31, 2016
(April 1, 2015 – March 31, 2016)

Previous forecast (A)Revised forecast (B)Change (B – A)
Percent change (%)
For reference: The fiscal
year ended March 31, 2015

Net sales

OperatingincomeOrdinary
incomeProfitattributableto ownersof parent

Net income
per share(Million yen)

(Million yen)

(Million yen)

(Million yen)

(Yen)

216,000
214,000(2,000)(0.9)

19,50019,500‒‒20,00020,000‒‒12,30012,300‒‒105.85105.85‒‒

189,398

19,43518,934

10,43487.81

4

Other Information(1) Important changes in subsidiaries during the six months under review
There have been no changes in specified subsidiaries resulting in changes in the scopeof consolidation.
An equity method affiliate has been included in the scope of consolidation since the firstquarter due to an increase in its significance.
(2) Accounting treatment specific to the preparation of quarterly consolidated financial
statements
Tax expense
The Company calculates tax expense by producing a reasonable estimate of theeffective tax rate after applying tax-effect accounting to income before income taxes forthe fiscal year and then multiplying quarterly income before income taxes by thisestimated effective tax rate.

5

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

As ofMarch 31, 2015
Amount

As of
September 30, 2015
Amount52,497
7,513
59,81014,999
3,840
3,078
2,561
4,898
(233)
148,967

49,6297,105
54,486
16,999
3,439
5,860
2,825
6,044
(227)
146,163

18,307
29,70827,01775,033

16,631
26,37033,61576,617

17,475
9,701
27,177

17,3409,465
26,80635,678
7,938(302)
43,314
145,525
294,492

31,8288,111(260)
39,679143,103289,267

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

6

(Million yen)

As ofMarch 31, 2015
AmountLiabilities
Current liabilities
Notes payable – trade
Accounts payable – trade
Income taxes payable
Provision for bonuses
Other provision
Other
Total current liabilities
Noncurrent liabilities
Net defined benefit liability
Provision
Other
Total noncurrent liabilities
Total liabilities

As of
September 30, 2015
Amount1,650
19,169
4,595
2,255
1,821
18,48347,975

1,463
17,377
3,727
2,741
1,594
16,27343,17813,75075
9,213
23,03971,014

14,21257
8,504
22,77365,951

13,45010,980189,693(7,705)
206,419

13,45010,980192,777(8,694)
208,515

14,768

12,177

66
(442)
1,510
8
15,911
1,147
223,478
294,492

(144)
(442)
2,001
4
13,595
1,204
223,315
289,267

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

7

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
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
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on liquidation of businessTotal extraordinary losses
Income before income taxes
Income taxes
Net income
Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Six months ended
September 30, 2014
Amount88,95660,511
28,444Six months ended
September 30, 2015
Amount97,91864,12933,788

7,223

8,920

1,457
2,141
8,985
19,808
8,636

1,504
2,620
11,60924,654
9,133

79
194

103
253

139

87

260
674

206
650

33
85
119
9,191

108
72
112
294
9,490

-

146
146

9,191
3,312
5,879
(5)
5,885

150
150
9,485
3,642
5,843
79
5,764

8

Statement of Comprehensive Income(Million yen)

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
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

Six months ended
September 30, 2014
Amount5,879

Six months ended
September 30, 2015
Amount
5,843

1,974

(2,591)

(397)
12

(210)
487
(4)

5

(6)

1,595
7,475

(2,325)
3,518

7,515

3,448

(40)

69

9

Statement of Cash Flows — Consolidated(Million yen)Six months ended
September 30, 2014
AmountCash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in provision(Increase) decrease in notes and accounts receivable trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in net defined benefit liability
Income taxes paid
Other
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 marketablesecurities
Payments for purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchases of investment securities
Payments associated with acquisition of business
Other payments
Other proceeds
Net cash provided by (used in) investing activities
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
Proceeds from share issuance to non-controllingshareholders
Cash dividends paid
Dividends paid to non-controlling interests
Purchase of shares of subsidiaries without change in scopeof 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
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at the end of the period

Six months ended
September 30, 2015
Amount

9,191
7,375
(21)

9,485
7,025
484
139

1,575

5,908

(2,003)(171)
230(2,550)(1,101)
12,524(2,853)(1,970)391(4,762)(1,621)
12,227(26,587)
10,519(44,000)(23,940)
11,759(9,000)42,000-(3,216)
23
(5)
(345)
118
(21,492)(6,790)161(4)(2,549)(346)
6(30,703)

330
48
(295)
(1)

326
(2)
(320)
(988)

51

-

(2,623)(63)(2,684)
(23)

(815)

-

(3,368)(3,692)

(147)

212

(12,483)
41,028(21,957)
55,675-59

28,54533,77710

Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Six months ended September 30, 2015 (April 1, 2015 – September 30, 2015)
Not applicable(Notes on Significant Changes in Shareholders’ Equity)
Six months ended September 30, 2015 (April 1, 2015 – September 30, 2015)
Not applicable(Segment Information)
1. Sales and income by reportable segment
Six months ended September 30, 2014 (April 1, 2014 – September 30, 2014)(Million yen)

Reportable Segments

Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

Sales
Sales to outside customers
Inter-segment sales or transfers

29,349134

59,606105

88,956
239

–
(239)

88,956–

Total

29,48359,712

89,195(239)

88,956

Segment income

4,100

4,539

8,640

(3)

8,636

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

Six months ended September 30, 2015 (April 1, 2015 – September 30, 2015)(Million yen)

Reportable Segment

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

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

40,595132
40,727
3,597

57,322
70
57,393
5,541

97,918
202
98,1209,139

Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)
–
(202)
(202)
(5)

97,918–97,9189,133

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

11

(Business combinations)
Completion of provisional accounting treatment associated with business combinations
The Company applied provisional accounting treatment to business combinations on January 31, 2015,
with Kurita Europe APW GmbH, Kurita Water Industries (Jiangyin) Co., Ltd., and seven other companies,
and the provisional accounting treatment was completed in the second quarter under review.
On the completion of the provisional accounting treatment, a significant revision to the initial
allocation of the acquisition cost is reflected in comparison information included in the consolidated
financial statements for the six months under review.
The amount of goodwill that was provisionally calculated, 19,391 million yen, has been reduced by
1,916 million yen, to 17,475 million yen on the completion of the provisional accounting. The decrease ingoodwill mainly reflects increases of 626 million yen in inventories, 987 million yen in property, plantand equipment, and 1,760 million yen in “other” intangible fixed assets.

12

Supplementary Information — Consolidated(1) Order Intake(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2014
2015
Amount%Amount29,73230.7
41,335%
37.6

Water Treatment Facilities

67,235

69.3

68,664

62.4

Total

96,967100.0

110,000

100.0(2) Net Sales(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2014
2015
Amount%Amount29,34933.0
40,595%
41.5

Water Treatment Facilities

59,60667.0

57,322

58.5

Total

88,956100.0

97,918100.0(3) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2014
2015
Amount%Amount
690
21.9
920

%
11.1

Water Treatment Facilities

2,456

78.1

7,408

88.9

Total

3,146

100.0

8,329

100.0

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

Business segment
Water Treatment Chemicals

Six months ended September 30,
2014
2015
Amount%Amount
580
8.1
667

%
10.2

Water Treatment Facilities

6,549

91.9

5,865

89.8

Total

7,129

100.0

6,532

100.0

13