Kurita Water Industries Ltd. · TSE:6370
Kurita Water Industries — Investor Presentation (May 2023)
40 slides from Kurita Water Industries's investor presentation, May 12, 2023
Slide 1: Kurita Group Medium-Term Management Plan PSV-27
Kurita Water Industries Ltd. Kurita Group Medium-Term Management Plan PSV-27 Pioneering Shared Value 2027 (Securities code: 6370) May 12, 2023
Slide 2: Contents
Contents I Review of MVP-22 3- 8 II The Kurita Group’s Vision 9 - 12 III PSV-27 (Pioneering Shared Value 2027) 13 - 34 IV Reference 35 - 39 2
Slide 3: I Review of MVP-22
@ Kurita | Review of MVP-22
Slide 4: Outline of MVP-22
Outline of MVP-22 Aiming to establish a rock-solid earnings base, we took on the challenge of transforming our business model and reforming business processes. Basic Policy Priority measures ⚫ Development of CSV business ⚫ Enhancement of total solutions Maximize customer intimacy by dismantling prec
Slide 5: Changes in Business Environment
Changes in Business Environment The COVID-19 pandemic became an opportunity to significantly change the values and structure of society and industry. Changing population dynamics (decline and increasingly uneven distribution of the working population) Status of the semiconductor industry as social i
Slide 6: Change in Consolidated Financial Results During MVP-22
Change in Consolidated Financial Results During MVP-22 Although net sales grew 1.5-fold and business profit margin improved, we fell short of management targets. Net sales ◼ Net sales ⚫ Business profit margin Business profit margin ROE ⚫ ROE ⚫ Equity ratio Equity ratio (Billions of yen) (%) (%) (%)
Slide 7: Promotion of Management Placing CSR at its Core
Promotion of Management Placing CSR at its Core The creation of shared value with society advanced due to the CSV business Expansion of the CSV business Progress on materiality items Year ended March 31, 2023 CSV businesses refer to products, technologies, and business models that contribute Index E
Slide 8: MVP-22 Achievements and Issues
MVP-22 Achievements and Issues We made progress securing an operating base and making the shift to a service business, but need to make further changes that will lead to revenue growth Key Achievements Main Issues Business expansion tailored to the characteristics Established a global four-region st
Slide 9: II The Kurita Group's Vision
II The Kurita Group’s Vision 9
Slide 10: Corporate Philosophy and Philosophy System
Corporate Philosophy and Philosophy System Study the properties of water, master them, and we will create an environment in which nature and humanity are in harmony Pioneering “new value for water” to contribute to the realization of a sustainable society ⚫ Deepen understanding of frontline sites ⚫
Slide 11: Flow of the Philosophy System and Value Creation
Flow of the Philosophy System and Value Creation Aim for sustainable growth which is influenced by the interactions of corporate activities, the natural environment and social system Materiality at the Kurita Group (Shared Value Themes, Basic Themes) Kurita’s Value Creation Story The Mega Trends the
Slide 12: Materiality of the Kurita Group
Materiality of the Kurita Group With the aim of expanding the core of management strategy from CSR to sustainability and synchronizing Kurita’s earnings capacity with the realization of a sustainable society, we have identified materiality along two tracks:the impact on society and the environment,
Slide 13: III PSV-27 (Pioneering Shared Value 2027)
III PSV-27 (Pioneering Shared Value 2027) 13
Slide 14: The Positioning of PSV-27
The Positioning of PSV-27 We will make full use of what we achieved in MVP-22 and accelerate revenue growth globally PSV-27 Vision MVP-22 Pioneering new value for water to ⚫ Increasingly diversified and in-depth service businesses contribute to the realization of a ⚫ Shift to a service business sust
Slide 15: Overview of PSV-27
Overview of PSV-27 Refine human resources, technologies and business processes to create value that exceeds expectations from stakeholders through overwhelming speed and problem-solving ability. I. Growth Strategy Measures for Growth Developing Markets Increasingly diversified and in-depth service b
Slide 16: PSV-27 Management Targets
PSV-27 Management Targets (Targets to be Achieved by the Fiscal Year Ending March 31, 2028) Financial Indicators Main Non-Financial Indicators Amount of water savings through CSV Net sales 450.0 billion yen business 300 million m 3 Avoided GHG emissions through CSV Business profit margin on sales 16
Slide 17: Electronics Business Environment and Recognition of Current Conditions
Electronics Business Environment and Recognition of Current Conditions Market growth up to 2027 is expected to exceed a CAGR of 6%, with trends spurring large-scale investment set to continue Semiconductor Support Trends Worldwide Semiconductor Sales by Country/Region (US$B) 1,000 Countries Major Tr
Slide 18: Business Strategy for the Electronics Industries
Electronics Business Strategy for the Electronics Industries Securing points of contact with a wide range of customers globally through various services and DX Net sales Key Measures 210.0 billion yen • Expansion of diverse value-driven service businesses * Including the precision tool cleaning busi
Slide 19: Expansion of Diverse Value-Driven Service Businesses
Electronics Expansion of Diverse Value-Driven Service Businesses Expanding the customer base and operating areas due to the diversification of services Customer Base Services Newly Targeted Domains Function-Specific and corresponding to Standardized Services Proposals to (Reclaimed water supply, pur
Slide 20: Evolution of the Water Supply Business
Electronics Evolution of the Water Supply Business Developing and rolling out new a water supply business model with a value-driven approach Area Water Supply Business in Newly Conventional Water Supply Targeted Domains (Conceptual Image) (Ultrapure Water Supply Business) Recycled water supply servi
Slide 21: Strengthened Foundations of the Precision Tool Cleaning Business
Electronics Strengthened Foundations of the Precision Tool Cleaning Business We will translate market growth into business opportunities, aiming to achieve stable growth through business diversification Direction of Initiatives Adopt an integrated operating structure for the precision Net sales tool
Slide 22: Building New Business Foundations in North America and Europe
Electronics Building New Business Foundations in North America and Europe Aim to launch facilities businesses in Europe and the US in light of market characteristics and the existing business base North America Take on the challenge of establishing the facilities business for cutting-edge semiconduc
Slide 23: Production Process Reform and Supply Chain Strengthening
Electronics Production Process Reform and Supply Chain Strengthening Improve competitiveness through stronger coordination in the value chain and DX Before Design Procurement Manufacturing to Construction Work Demand Post-Handover Follow-Ups After Design Procurement Manufacturing to Construction Wor
Slide 24: General Industries: Business Environment and Current Conditions
General water treatment Business Environment and Recognition of Current Conditions The diversification of industries and regions contributes to business stability but also results in increasingly diverse needs Extensive points of contact with various industries Regional diveristy Points of contact w
Slide 25: Business Strategy for the General Industries
General water treatment Business Strategy for the General Industries Accelerate the rollout of high value-added models through business expansion tailored to the characteristics of specific regions and markets Key Measures Net sales • Building a business structure in light of regional 240.0 billion
Slide 26: Building a Business Structure in light of Regional Characteristics
General water treatment Building a Business Structure in light of Regional Characteristics In the four regions, we will create shared value together with the customers of each region, with regional management promoting collaboration ⚫ Early profitability of Kurita America based on experiences ⚫ Expa
Slide 27: Further Expansion of CSV Business
General water treatment Further Expansion of CSV Business Share information globally and promote an expansion with optimum models and sales methods for each industry and region For utility equipment For production and manufacturing processes (applied to boilers and cooling systems, etc.) (applied to
Slide 28: Utilize Digital Infrastructure to Accelerate Expansion
General water treatment Utilize Digital Infrastructure to Accelerate Expansion Share and utilize information on contact points with customer around the world to create value globally EMEA sales Customer representative Japan Americas sales sales representative Customer Customer representative ASEAN E
Slide 29: New Businesses Contributing to a Recycling-Oriented Society
General water treatment New Businesses Contributing to a Recycling-Oriented Society Cultivation of new businesses that will be future revenue pillars utilizing water knowledge, including the water treatment and purification technologies cultivated through diverse contact points with customers Exampl
Slide 30: Strengthening of Human Capital
II. Strengthening the Business Strengthening of Human Capital Foundation (Strategic Cultivation and Utilization of Human Resources) Acquire and cultivate human resources that are the key to the creation of innovation and strengthen mechanisms to ensure their success Main Initiatives Secure and culti
Slide 31: Promoting Innovation (Technological Capital, Intellectual Capital)
II. Strengthening the Business Foundation Promoting Innovation (Technological Capital, Intellectual Capital) Leverage the strengths of the Kurita Group’s technologies, infrastructure, networks and intellectual property to facilitate innovation Offense (Analysis and utilization of intellectual In-dep
Slide 32: Enhancing Governance
II. Strengthening the Business Foundation Enhancing Governance Transition to a company with a Nominating Committee, etc. to further enhance governance ⚫ Through a system that clearly separates management supervision and execution, focus on management supervision with the perspectives of various stak
Slide 33: Growth Investment and Cash Allocation
III. Financial Strategy Growth Investment and Cash Allocation Prioritize use for growth investment under well-disciplined investment decision-making and financial management Cash Allocation Priority of the Use of Funds Growth investment (water supply, asset ownership-based Shareholder 1 services, re
Slide 34: Initiatives to Enhance Corporate Value
III. Financial Strategy Initiatives to Enhance Corporate Value Maximize corporate value of the Company through expanded equity spread and steady shareholder returns ✓ Net sales 450.0 billion yen Profit growth ✓ Business profit margin 16% ✓ Stable generation of operating CF Expanded equity spread ✓ R
Slide 35: IV Reference
@ Kurita IV Reference 35
Slide 36: PSV-27: Targets and Exchange Rate Assumptions
PSV-27: Targets and Exchange Rate Assumptions Profit/Loss Situation Financial Status FY2023 FY2024 FY2028 FY2023 FY2024 FY2028 (Results) (Forecast) (Target) (Results) (forecast) (Target) Net sales 344.6 billion yen 375.0 billion yen 450.0 billion yen ROE 7.1% ー 12% or more Electronics 149.3 billion
Slide 37: Materiality Indicators (Targets to be achieved by March 31, 2028)
Materiality Indicators (Targets to be achieved by March 31, 2028) Shared Value Themes Basic Themes Develop and disseminate innovative products, technologies, and business models Solve issues related to water resources Investment rate in innovation areas 30% Total number of basins where collective ac
Slide 38: Segment Changes
Segment Changes Up to Fiscal Year Ended From Fiscal Year Ending March 31, 2023 March 31, 2024 Water Treatment Chemicals business Water Treatment Facilities business Electronics industries (domestic electronics industry) (breakdown) Facilities Chemicals Japan Maintenance Facilities Asia Ultrapure wat
Slide 39: Major External Recognitions During the Term of MVP-22
Major External Recognitions During the Term of MVP-22 Recognition from ESG Inclusion in ESG indices rating organizations FTSE Blossom ISS-ESG FTSE4Good FTSE Blossom MSCI ACWI Japan Sector Index Series Japan Index ESG Leaders Index Relative Index Recognition from supplier rating organizations MSCI MS
Slide 40: 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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