Kurita Water Industries Ltd. · TSE:6370
Kurita Water Industries — H1 FY2020 Earnings Presentation
30 slides from Kurita Water Industries's earnings presentation, Nov 12, 2019
Slide 1: Results Presentation for the First Half of the Fiscal Year Ending March 31, 2020
Kurita Water Industries Ltd. Results Presentation for the First Half of the Fiscal Year Ending March 31, 2020 (Securities code: 6370) November 12, 2019
Slide 2: Table of Contents
Table of Contents 1 Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 p1-10 2 Forecast for the Fiscal Year Ending March 31, 2020 p11-19 3 Progress on Priority Measures p20-23
Slide 3: Voluntary Application of IFRS and Business Profit
Voluntary Application of International Financial Reporting Standards (IFRS) Voluntary Application of IFRS From the first quarter of the fiscal year ending March 31, 2020, our disclosures are based on IFRS. The figures for the same period of the previous fiscal year have been reclassified in complian
Slide 4: Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020
Consolidated Financial Results for 1 the First Half of the Fiscal Year Ending March 31, 2020
Slide 5: Overview of Results
Overview of Results 1H of FY ended 1H of FY ending Previous Forecast (Billions of Yen) 03/2019 03/2020 YoY Change (8/9 Announcement) Orders 139.6 137.8 (1.3%) 138.7 Net Sales 126.5 131.8 +4.1% 134.6 Business Profit 10.9 13.7 +25.2% 12.3 Net of Other Income and (2.8) 4.8 ー 4.0 Expenses Operating Prof
Slide 6: Results by Segment
Results by Segment (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Previous Forecast 03/2019 03/2020 (8/9 Announcement) ⚫ Orders and net sales decreased in both (Billions of Yen) segments, excluding the impact of new Orders 139.6 137.8 (1.8) 138.7 consolidation. Net Sales 126.5 131.8 +5.
Slide 7: Factors in Change in Business Profit (YoY)
Factors in Change in Business Profit (YoY) Selling, (Billions of Yen) general, and Cost of sales administrative ratio expenses improvement decrease Effect of 3.9 0.2 Effect of new decreased consolidation revenue 0.3 (1.7) FY 3/20 Decrease in net Decreases in additional costs for 1H results FY 3/19 s
Slide 8: Water Treatment Chemicals
Water Treatment Chemicals 1H of FY ended 1H of FY ending Previous Forecast (Billions of Yen) 03/2019 03/2020 YoY Change (8/9 Announcement) ⚫ Domestic sales increased for process treatment (Billions of Yen) chemicals for the steel industry, boiler water Orders 52.5 58.6 +6.1 60.5 treatment chemicals,
Slide 9: Water Treatment Facilities (for the domestic electronics industry)
Water Treatment Facilities (for the domestic electronics industry) (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Previous Forecast ⚫ Orders for facilities decreased, reflecting the 03/2019 03/2020 (8/9 Announcement) absence of the orders for large projects placed in Orders 31.6 27.2 (4
Slide 10: Water Treatment Facilities (for domestic general industries)
Water Treatment Facilities (for domestic general industries) (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Previous Forecast ⚫ Energy and infrastructure orders decreased, 03/2019 03/2020 (8/9 Announcement) reflecting the absence of the large projects for Orders 37.3 32.2 (5.0) 28.9 the
Slide 11: Water Treatment Facilities (Overseas)
Water Treatment Facilities (Overseas) (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Previous Forecast ⚫ Orders decreased, excluding the effects of new 03/2019 03/2020 (8/9 Announcement) consolidation of U.S. Water. Orders 18.2 19.7 +1.5 23.4 ⚫ Orders from China decreased due to the Fac
Slide 12: Breakdown of Service Business Sales
Breakdown of Service Business Sales (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Previous Forecast ⚫ Sales increased in Water Treatment Chemicals 03/2019 03/2020 (8/9 Announcement) and maintenance categories. Water Treatment 51.9 58.5 +6.6 60.0 ⚫ The increase in domestic maintenance w
Slide 13: Capital Expenditures, Depreciation and R&D Expenses
Capital Expenditures, Depreciation and R&D Expenses 1H of FY ended 1H of FY ending (Billions of Yen) YoY Change 03/2019 03/2020 ⚫ Capital expenditures increased in the ultrapure Capital Expenditures water supply business and tool cleaning business. (Property, Plant and 13.7 15.1 +1.4 Equipment) ⚫ De
Slide 14: Financial Condition
Financial Condition End of September (Billions of Yen) End of March 2019 2019 Change ⚫ Property, plant and equipment increased in the ultrapure water supply business and tool Cash and Cash Equivalents 35.5 37.5 +2.0 cleaning business. Other Current Assets 115.6 118.3 +2.7 ⚫ Goodwill increased as a r
Slide 15: Forecast for the Fiscal Year Ending March 31, 2020
2 Forecast for the Fiscal Year Ending March 31, 2020
Slide 16: Business Environment (Changes from Beginning of Year)
Business Environment (Changes from Beginning of Year) Water Treatment Chemicals Business ⚫ Some weakness can be seen in production activities within the domestic manufacturing industry. ⚫ Risks for an economic downturn are becoming more pronounced amid trade friction between the U.S. and China, a sl
Slide 17: Overview of Business Forecast
Overview of Business Forecast FY ended 03/2019 FY ending 03/2020 Previous Forecast (Billions of Yen) Results Forecast YoY (8/9 Announcement) Orders 258.4 270.0 +4.5% 272.0 Net Sales 257.3 273.0 +6.1% 280.0 Business Profit 25.7 26.5 +3.2% 26.5 Net of Other Income and (5.8) 3.5 ー 3.5 Expenses Operatin
Slide 18: Forecasts by Segment
Forecasts by Segment FY ended FY ending (Billions of Yen) 03/2019 03/2020 YoY Previous Forecast ⚫ The forecast of orders has been revised (8/9 Announcement) Results Forecast downward by 2.0 billion yen due to a decrease Orders 258.4 270.0 +11.6 272.0 in the forecast for the Water Treatment Net Sales
Slide 19: Water Treatment Chemicals
Water Treatment Chemicals FY ended 03/2019 FY ending 03/2020 Previous Forecast (Billions of Yen) (Results) (Forecast) YoY (8/9 Announcement) ⚫ The forecast of orders and net sales has been revised downward due to foreign exchange Orders 102.9 117.4 +14.5 120.4 rate fluctuations and the anticipation
Slide 20: Water Treatment Facilities (for the domestic electronics industry)
Water Treatment Facilities (for the domestic electronics industry) FY ended FY ending (Billions of Yen) 03/2019 03/2020 YoY Previous Forecast ⚫ The forecast of facilities orders and net sales (8/9 Announcement) have been revised downward due to Results Forecast postponement of some projects. Orders
Slide 21: Water Treatment Facilities (for domestic general industries)
Water Treatment Facilities (for domestic general industries) FY ended FY ending (Billions of Yen) 03/2019 03/2020 YoY Previous Forecast ⚫ Energy and infrastructure orders are expected to (8/9 Announcement) be almost in line with the previous forecast, as Results Forecast the shortfall of maintenance
Slide 22: Water Treatment Facilities (Overseas)
Water Treatment Facilities (Overseas) FY ended 03/2019 FY ending 03/2020 Previous Forecast (Billions of Yen) (Results) (Forecast) YoY (8/9 Announcement) ⚫ Orders forecast has been revised upward as South Korean orders are expected to exceed the Orders 30.2 37.6 +7.4 37.1 previous forecast, despite a
Slide 23: Breakdown of Service Business Sales
Breakdown of Service Business Sales FY ended FY ending (Billions of Yen) 03/2019 03/2020 YoY Previous Forecast ⚫ The forecast has been revised downward due to (8/9 Announcement) Water Treatment Chemicals business falling short Results Forecast Water Treatment of the previous forecast despite the exp
Slide 24: Capital Expenditures, Depreciation and R&D Expenses
Capital Expenditures, Depreciation and R&D Expenses FY ended FY ending (Billions of Yen) 03/2019 03/2020 YoY Previous Forecast ⚫ The full-year forecast for capital expenditures in (8/9 Announcement) the ultrapure water supply business has been Results Forecast Capital Expenditures revised upward. (P
Slide 25: Progress on Priority Measures
3 Progress on Priority Measures
Slide 26: Integration of North American Business
Integration of North American Business Consolidation of production, procurement, and sales networks of three companies engaged in Water Treatment Chemicals and Water Treatment Facilities businesses Kurita America April - September 2019 October 2019 - March 2020 April 2020- ⚫ Relocated Kurita America
Slide 27: Initiative to Expand Total Solutions
Initiative to Expand Total Solutions April - September 2019 October 2019 - March 2020 ⚫ Develop solution models through market-specific working ⚫ Promote roll-out of solution models in Japan and other groups countries ⚫ Narrow down solution models ⚫ Create new solution models (Select six models from
Slide 28: Total Solutions for Paper and Pulp Industry
Total Solutions for Paper and Pulp Industry Microorganism generation in the process of recycled water use Past Solution Model Business model: Supply water treatment Business model: Contract-type service chemicals Paper-manufacturing (Receive consideration factory according to expected benefits) Chem
Slide 29: Restructuring of Domestic Sales System
Restructuring of Domestic Sales System Integration of Water Treatment Chemicals Maintenance Water Treatment Facilities domestic sales divisions ⚫ Consolidated three businesses as of April 1, 2019 ⚫ Change awareness of sales reps (mutual training system for chemicals and maintenance, April 2019- shar
Slide 30: Forward-looking Statements
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 sp
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