Kurita Water Industries Ltd. · TSE:6370
Kurita Water Industries — H1 FY2019 Earnings Presentation
31 slides from Kurita Water Industries's earnings presentation, Nov 12, 2018
Slide 1: Results Presentation for the First Half of the Fiscal Year Ending March 31, 2019
Kurita Water Industries Ltd. Results Presentation for the First Half of the Fiscal Year Ending March 31, 2019 (Securities code: 6370) November 12, 2018
Slide 2: Table of Contents
Table of Contents 1 Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2019 p1-9 2 Forecast for the Fiscal Year Ending March 31, 2019 p10-18 3 Priority Measures in Medium-Term Management Plan MVP-22 (Maximize Value Proposition 2022) p19-25
Slide 3: Consolidated Financial Results for the First Half of FY Ending March 31, 2019
1 Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2019
Slide 4: Overview of Results
Overview of Results 1H of FY ended 1H of FY ending (Billions of Yen) Initial Forecast 03/2018 03/2019 YoY Change Orders 125.3 139.6 +11.4% 126.5 Net Sales 108.1 128.6 +18.9% 127.2 Operating Income 10.2 10.3 +1.2% 11.4 Ordinary Income 10.3 10.4 +1.0% 11.5 Extraordinary Gains (Losses) 0.2 (0.7) — — Ne
Slide 5: Results by Segment
Results by Segment 1H of FY 1H of FY Initial Orders and sales increased in both the Water (Billions of Yen) ended ending YoY Change 03/2018 03/2019 Forecast Treatment Chemicals Business and the Water Treatment Facilities Business. Orders 125.3 139.6 +14.3 126.5 The cost of sales ratio rose and S
Slide 6: Water Treatment Chemicals
Water Treatment Chemicals 1H of FY ended 1H of FY ending (Billions of Yen) YoY Change Initial Forecast 03/2018 03/2019 Domestic sales increased by only 1.6% from Orders 44.6 52.5 +7.9 51.8 the same period of the previous fiscal year, in which spot equipment projects were posted. Domestic 23.0 23.5
Slide 7: 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 Initial Forecast Orders for facilities increased due to large 03/2018 03/2019 projects related to semiconductors, electronic Orders 27.6 31.6 +4.0 28.1 components, and waf
Slide 8: 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 Initial Forecast Orders for facilities for the electric power 03/2018 03/2019 industry increased, while orders for facilities Orders 35.4 37.3 +1.9 33.1 for general industries d
Slide 9: Water Treatment Facilities (Overseas)
Water Treatment Facilities (Overseas) 1H of FY ended 1H of FY ending (Billions of Yen) YoY Change Initial Forecast 03/2018 03/2019 Orders increased in China, South Korea, and Orders 17.7 18.2 +0.5 13.5 Taiwan. Facilities 12.7 12.1 (0.6) 6.8 Sales of facilities for China and South Korea Maintenan
Slide 10: Breakdown of Service Business Sales
Breakdown of Service Business Sales (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Initial Forecast Sales in the Ultrapure Water Supply Business 03/2018 03/2019 increased to a level that exceeded the initial Water Treatment 44.1 51.9 +7.8 51.2 forecast. Chemicals Water Treatment 46.2
Slide 11: Capital Expenditures, Depreciation and R&D Expenses
Capital Expenditures, Depreciation and R&D Expenses (Billions of Yen) 1H of FY ended 1H of FY ending YoY Change Capital expenditures increased, mainly in 03/2018 03/2019 the Ultrapure Water Supply Business and Capital Expenditures tool cleaning business. (Property, Plant and 8.8 12.9 +4.1 Equipmen
Slide 12: Financial Condition
Financial Condition End of September (Billions of Yen) End of March 2018 2018 YoY Change Cash and deposits and accounts receivable increased. Cash, deposits and 61.1 71.0 +9.9 marketable securities Property, plant and equipment increased due Other current assets 99.3 102.2 +2.8 to capital expend
Slide 13: Forecast for the Fiscal Year Ending March 31, 2019
2 Forecast for the Fiscal Year Ending March 31, 2019
Slide 14: Business Environment
Business Environment Water Treatment Chemicals Business Production activity in domestic manufacturing industries is expected to be generally strong. Although the economies of Europe, the U.S. and Asia are predicted to show gradual growth overall, there are concerns about the impact of trade fric
Slide 15: Overview of Plan
Overview of Plan FY ended 03/2018 FY ending 03/2019 (Billions of Yen) Initial Forecast (Results) (Forecast) YoY Change Orders 251.4 256.0 +1.8% 247.0 Net Sales 236.8 260.0 +9.8% 255.0 Operating Income 22.5 24.0 +6.8% 24.0 Ordinary Income 22.1 24.2 +9.5% 24.2 Extraordinary Gains (Losses) 3.4 — — — Ne
Slide 16: Forecasts by Segment
Forecasts by Segment FY ended FY ending Initial The initial forecast for orders in the Water (Billions of Yen) 03/2018 03/2019 YoY Change (Results) (Forecast) Forecast Treatment Facilities Business has been revised upward. Orders 251.4 256.0 +4.6 247.0 The initial forecast for sales in the Water
Slide 17: Water Treatment Chemicals
Water Treatment Chemicals FY ending FY ended 03/2018 (Billions of Yen) (Results) 03/2019 YoY Change Initial Forecast Full-year domestic sales are forecast to (Forecast) increase by 1.8%. Orders 90.4 102.0 +11.6 102.2 When the impact of the consolidation of Hansu Domestic 44.5 45.4 +0.8 45.3 is e
Slide 18: Water Treatment Facilities (for the domestic electronics industry)
Water Treatment Facilities (for the domestic electronics industry) FY ended 03/2018 FY ending The orders forecast for facilities has been (Billions of Yen) 03/2019 YoY Change Initial Forecast (Results) (Forecast) revised upward due to robust capital investment demand in the semiconductor and Order
Slide 19: Water Treatment Facilities (for domestic general industries)
Water Treatment Facilities (for domestic general industries) FY ended 03/2018 FY ending The order and sales forecasts for facilities for (Billions of Yen) 03/2019 YoY Change Initial Forecast (Results) (Forecast) electric power and soil remediation have been revised upward. Orders 56.5 65.2 +8.7 63
Slide 20: Water Treatment Facilities (Overseas)
Water Treatment Facilities (Overseas) FY ended 03/2018 FY ending 03/2019 Initial (Billions of Yen) (Results) (Forecast) YoY Change Forecast Although the second-half orders forecasts for facilities for China and South Korea are Orders 49.3 29.6 (19.8) 28.5 cautious, the full-year forecasts have bee
Slide 21: Breakdown of Service Business Sales
Breakdown of Service Business Sales FY ending (Billions of Yen) FY ended 03/2018 03/2019 YoY Change Initial Forecast Sales of the Ultrapure Water Supply Business, (Results) (Forecast) soil remediation, and domestic maintenance Water Treatment services are forecast to exceed the initial 90.4 101.9
Slide 22: Capital Expenditures, Depreciation and R&D Expenses
Capital Expenditures, Depreciation and R&D Expenses (Billions of Yen) FY ended 03/2018 FY ending 03/2019 YoY Change Previous Capital expenditures in the Ultrapure Water (Results) (Forecast) Forecast Supply Business are forecast to increase Capital substantially. Expenditures 22.1 36.0 +13.9 36.0 (
Slide 23: Priority Measures in Medium-Term Management Plan MVP-22
Priority Measures in Medium-Term Management 3 Plan MVP-22 (Maximize Value Proposition 2022)
Slide 24: Measures to Achieve Operating Income Margin of 15%
Measures to Achieve Operating Income Margin of 15％ Expansion of the service contract business model for sharing created 1 value Creation of comprehensive contracts for maintenance and operations 2 management originating from major EPC projects 3 Restructuring and downsizing of low-margin businesses
Slide 25: Expansion of Service Contract Business Model (1)
Expansion of Service Contract Business Model (1) Start of provision of reclaimed water supply service Remote Communication of the Real-time data monitoring status of water quality and collection quantity information IT, sensing Customer site Data Wastewater from plant Recycled water Optimal maintena
Slide 26: Expansion of Service Contract Business Model (2)
Expansion of Service Contract Business Model (2) Example of use of a service contract to reduce steam use at a paper mill Improve heat conduction efficiency in the heating surface, and reduce steam use by adding water treatment chemicals Steam Wire process Press process Dryer process Reel process Pr
Slide 27: Potential for Operations Management of Water Treatment Facilities
Potential for Operations Management of Water Treatment Facilities Provision of wide-ranging solutions in every process Process Raw water treatment Pure water production Wastewater treatment Utilities Value Installation of energy-saving equipment Energy conservation Boiler and cooling tower efficienc
Slide 28: Liquidation and Downsizing of Low-Margin Businesses and Assets
Liquidation and Downsizing of Low-Margin Businesses and Assets Decisions on liquidation and downsizing using capital efficiency as the criterion First-Half Results Future Initiatives Liquidation of non-core businesses Sale of the alumina compound business Continued sale of shares of other list
Slide 29: Acquisition of an Overseas Service Business Base
Acquisition of an Overseas Service Business Base Acquisition of 25% of the shares of Pentagon, a U.S.-based precision tool cleaning company Company Outline Fremont Industries, LLC Company Pentagon Technologies Group, Inc. name Established 1998 Business Tool cleaning, development of semiconductor des
Slide 30: Competitive superiority
Creation of Shared Value Redefine existing products for customers' environmental improvement as Creating Shared Value (CSV) Business High Products for customers' environmental Target fields of the CSV improvement Business: water Competitive superiority CSV Business conservation, CO2 reduction, waste
Slide 31: 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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