Kurita Water Industries Ltd. · TSE:6370

Kurita Water Industries — H1 FY2017 Earnings Presentation

30 slides from Kurita Water Industries's earnings presentation, Nov 1, 2016

  1. Slide 1: Results Presentation for the First Half of the Year Ending March 31, 2017

    Kurita Water Industries Ltd. Results Presentation for the First Half of the Year Ending March 31, 2017 (Securities code: 6370) November 1, 2016

  2. Slide 2: Table of Contents

    Table of Contents Consolidated Financial Results for the First Half of the Year I Ending March 31, 2017 Consolidated Business Plan for the Fiscal Year II Ending March 31, 2017 III Priority Measures Reference Material

  3. Slide 3: I. Consolidated Financial Results for the First Half

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 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

  4. Slide 4: Financial Highlights

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 (Billions of Yen) Fiscal Year to Fiscal Year to Fiscal Year to March 2017 Year-on-Year March 2016 March 2017 First Half Initial Change First Half Actual First Half Actual Projections Orders 110.0 112.0 112.5 +2.3%

  5. Slide 5: Orders, Sales, Operating Income, and Operating Income Margin

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 Water treatment chemicals Water treatment facilities Total * denotes initial projections Orders Sales (Billions of Yen) (Billions of Yen) 120 110.0 112.5 112.0 120 97.9 103.8 104.0 41.3 42.0 43.1 40.6 41.5 42.6 60

  6. Slide 6: Water Treatment Chemicals

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 (Billions of Yen) 40 Orders  Domestic orders increased, reflecting a recovery in the production activities of some customers and the development of new 20 41.3 42.0 43.1 customers.  Overseas orders rose slightly

  7. Slide 7: Water Treatment Facilities (for the electronics industry)

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 (Billions of Yen) 40 Orders  Orders for hardware overseas declined in China and Taiwan. 20 38.4 34.6 36.6  Orders for maintenance services in Japan decreased.  Orders in the ultrapure water supply business decl

  8. Slide 8: Water Treatment Facilities (for general industries)

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 (Billions of Yen) 40 Orders  Orders for large projects were received in water treatment facilities for thermal power plants and in soil remediation. 20  Orders for maintenance services increased in response to t

  9. Slide 9: Service Business Revenue

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 Water treatment chemicals Service Business Revenue in the Water Treatment Facilities Segment Water treatment facilities (services) Water treatment facilities (hardware) (Billions of Yen) 50 46.2 44.8 (Billions of

  10. Slide 10: Overseas Business Sales

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 Sales by Region Overseas Sales by Business Segment Asia North America EMEA (formerly Europe) Other Water treatment chemicals Water treatment facilities (Unit: billions of yen) (Unit: billions of yen) 1.5 1.2 7.3 1

  11. Slide 11: Capital Expenditures, Depreciation, and R&D Expenses

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 Capital Expenditures and Depreciation R&D Expenses Capital expenditures Capital expenditures Depreciation (ultrapure water (excl. ultrapure water R&D expenses Percentage of net sales supply business) supply busine

  12. Slide 12: Financial Condition

    I. Consolidated Financial Results for the First Half of the Year Ending March 31, 2017 Assets Liabilities and Net Assets (Billions of Yen) (Billions of Yen) 298.1 298.1 285.6 285.6 65.9 Cash, deposits and 69.1 62.4 Liabilities 71.4 marketable (-6.7) (+5.5) securities 84.6 Other current 77.7 assets (

  13. Slide 13: II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 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

  14. Slide 14: Key Assumptions

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 Water treatment chemicals  Production activities in the domestic manufacturing industry are expected to remain generally flat.  Growth in the Chinese economy and other emerging countries will slow.  The European economy will

  15. Slide 15: Overview of Business Plan

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 (Billions of Yen) Fiscal Year to Fiscal Year to Fiscal Year to Year-on-Year March 2016 March 2017 Initial March 2017 Change Actual Projection Revised Projection Orders 221.3 223.0 218.0 -1.5% Net Sales 214.4 222.0 216.0 +0.8% O

  16. Slide 16: Orders, Sales, Operating Income and Margin Projections

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 Water treatment chemicals Water treatment facilities Total * denotes initial projections Orders Sales (Billions of Yen) (Billions of Yen) 240 221.3 218.0 223.0 240 214.4 216.0 222.0 83.4 82.7 85.9 83.7 82.7 85.9 120 120 137.8 1

  17. Slide 17: Water Treatment Chemicals

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 (Billions of Yen) 90 Orders  Yen-equivalent orders will decline due to the appreciation of the yen. 45 83.4 82.7 85.9  Orders will not achieve the projection at overseas Kurita Group companies despite growth in orders in loca

  18. Slide 18: Water Treatment Facilities (for the electronics industry)

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 (Billions of Yen) 80 Orders  The projections for orders for hardware and maintenance services in Japan have been revised upward. 40 79.1 73.1 75.3  The projection for orders for maintenance overseas has been revised downward.

  19. Slide 19: Water Treatment Facilities (for general industries)

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 (Billions of Yen) 70 Orders  Regarding orders from the electric power industry, the effect of electric power deregulation is expected, in addition to results in 35 58.8 62.2 61.7 the first half.  With respect to orders for ge

  20. Slide 20: Service Business Revenue

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 Water treatment chemicals Service Business Revenue Water treatment facilities (services) in the Water Treatment Facilities Segment Water treatment facilities (hardware) * denotes initial projections (Billions of Yen) 98.9 98.1

  21. Slide 21: Sales Forecast in Ultrapure Water Supply Business

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 (Billions of Yen) 40 +3.8 -3.6 +3.2 -3.6 32.2 32.0 New and Expiration -3.0 additional of contracts business, etc. Review of 28.6 contracts 20 0 03/2016 03/2017 Actual Projection * denotes initial projections 17

  22. Slide 22: Overseas Business Sales

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 Sales by Region Overseas Sales by Business Segment Asia North America EMEA (formerly Europe) Other Water treatment chemicals Water treatment facilities * denotes initial projections * denotes initial projections (Billions of Ye

  23. Slide 23: Capital Expenditures, Depreciation, and R&D Expenses

    II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2017 Capital Expenditures and Depreciation R&D Expenses Capital expenditures Capital expenditures Depreciation (ultrapure water (excl. ultrapure water R&D expenses Percentage of net sales supply business) supply business) * denotes

  24. Slide 24: III. Priority Measures

    III. Priority Measures 1. Expansion of the Water Treatment Chemicals business overseas 2. Change of the service business, using IT 3. Promotion of services in the Water Treatment Facilities business 4. Improvement of Capital Efficiency

  25. Slide 25: Expansion of Water Treatment Chemicals Business Overseas

    III. Priority Measures Expansion of synergy with KEG in products, development and production Establishment of a Searching of local subsidiary in M&A in North Vietnam America Rebuilding and strengthening of the base function in Southeast Asia Strengthening of business in the Middle East Establishment

  26. Slide 26: Change of the Service Business, Using IT

    III. Priority Measures Data collection Sensor Cloud Monitor screen Customer’s facilities such as boilers, cooling Proposal Analysis tower and water Real-time monitoring treatment facilities Optimum chemical dosing control and maintenance Creation of Change of the way of working competitive advantage

  27. Slide 27: Ultrapure Water Supply Business

    III. Priority Measures More aggressive overseas Ultrapure water supply business development Customers’ Semiconductor/ Kurita LCD manufacturing plant Ultrapure water Exploitation of the small and midsize market by KWSS (Kurita Water Supply Service) Payment Build, own, operate and maintain Exploitatio

  28. Slide 28: Future Priority Measures: Uses of Cash

    III. Future Priority Measures Uses of Cash (policy) ¥85.0 ‒ ¥88.0 billion ¥85.0 ‒ ¥88.0 billion  Strive to continue raising dividends, aiming for Dividends a payout ratio of 30-50% over 5 years.  Prioritize investment in promising businesses Share buybacks and consider share buybacks using surplus

  29. Slide 29: Reference Material

    Reference Material (Unit: billions of yen) +1.8 -1.3 -0.0 Effect of change Increase in 9.6 9.1 Impact of increase in cost of sales ratio SG&A expenses in revenue 09/2015 09/2016 Note: The effect of change in the cost of sales ratio is calculated using the gross profit margin. 24

  30. Slide 30: Contact and Forward-looking Statements

    ■URL■ http://ir.kurita.co.jp/en/ ■ M AI 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 factor

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