Kurita Water Industries Ltd. · TSE:6370
Kurita Water Industries — FY2017 Earnings Presentation
37 slides from Kurita Water Industries's earnings presentation, May 2, 2018
Slide 1: Results Presentation for the Fiscal Year Ended March 31, 2018
Kurita Water Industries Ltd. Results Presentation for the Fiscal Year Ended March 31, 2018 (Securities code: 6370) May 2, 2018
Slide 2: Table of Contents
Table of Contents 1 Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 p1-7 Consolidated Business Plan for the Fiscal Year 2 Ending March 31, 2019 p 8 -16 3 Review of Previous Medium-Term Management Plan p17-20 Competitive Kurita 2017(CK-17) 4 New Medium-Term Management Plan Max
Slide 3: Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
1 Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
Slide 4: Overview of Results
Overview of Results Revised FY ended 03/2017 FY ended 03/2018 Y-o-Y (Billions of Yen) Projections Initial Projections (Results) (Results) Change （1/31） Orders 218.7 251.4 + 15.0% 248.0 221.0 Net Sales 214.2 236.8 + 10.6% 235.0 223.0 Operating Income 19.5 22.5 + 15.5% 21.7 18.5 Ordinary Income 20.1 2
Slide 5: Results by Segment
Results by Segment (Billions of Yen) FY ended 03/2017 FY ended 03/2018 Y-o-Y l Orders and net sales rose in both the Change (Results) (Results) Water Treatment Chemicals business and the Water Treatment Facilities Orders 218.7 251.4 + 15.0% business. Net Sales 214.2 236.8 + 10.6% Total Operating Inc
Slide 6: Water Treatment Chemicals
Water Treatment Chemicals FY ended 03/2017 FY ended 03/2018 Y-o-Y (Billions of Yen) (Results) (Results) Change l Due to a recovery in capacity utilization rates in manufacturing Orders 82.1 90.4 + 10.0% industry in Japan, sales for almost Domestic 43.5 44.5 + 2.3% all industries posted increased. Ov
Slide 7: Water Treatment Facilities (for the domestic electronics industry)
Water Treatment Facilities (for the domestic electronics industry) (Billions of Yen) FY ended FY ended Y-o-Y l Facilities received large orders related 03/2017 03/2018 (Results) (Results) Change to semiconductors and electronic components. Orders 51.3 55.3 + 7.8% l Sales of the ultrapure water suppl
Slide 8: Water Treatment Facilities (for domestic general industries)
Water Treatment Facilities (for domestic general industries) (Billions of Yen) FY ended FY ended Y-o-Y l Orders for maintenance services for 03/2017 03/2018 Change general industries increased due to (Results) (Results) demand associated with renovating old Orders 63.5 56.5 - 11.1% facilities, new f
Slide 9: Water Treatment Facilities (overseas)
Water Treatment Facilities (overseas) FY ended 03/2017 FY ended 03/2018 Y-o-Y (Billions of Yen) (Results) (Results) Change l Facility orders for large projects Orders 21.8 49.3 + 126.2% increased for FPDs and semiconductors in China and for Facilities 14.4 39.1 + 171.7% semiconductors in South Korea
Slide 10: Financial Condition
Financial Condition (Billions of Yen) End of March End of March Change l In current assets, accounts receivable 2017 2018 and inventories increased. Cash, deposits and 73.3 61.1 - 12.3 marketable securities l In non-current assets there were rises Other current assets 82.5 100.9 + 18.4 in property,
Slide 11: Consolidated Business Plan for the Fiscal Year Ending March 31, 2019
2 Consolidated Business Plan for the Fiscal Year Ending March 31, 2019
Slide 12: Business Environment
Business Environment Water Treatment Chemicals l Production in the manufacturing industry in Japan is expected to move steadily. l Overall, economies in Europe, the United States, and Asia are predicted to post gentle growth. Water Treatment Facilities l For the domestic electronics industry, althou
Slide 13: Overview of Projections
Overview of Projections FY ended 03/2018 FY ending 03/2019 (Billions of Yen) Y-o-Y Change (Results) (Plan) Orders 251.4 247.0 - 1.8% Net Sales 236.8 255.0 + 7.7% Operating Income 22.5 24.0 + 6.8% Ordinary Income 22.1 24.2 + 9.5% Net Income Attributable to 17.9 17.0 - 5.0% Owners of Parent Net Income
Slide 14: Projections by Segment
Projections by Segment (Billions of Yen) FY ended 03/2018 FY ending 03/2019 Y-o-Y l Due to the resolution of the three- Change (Results) (Plan) month lag in consolidation of overseas group companies, the extent of the Orders 251.4 247.0 - 1.8% increase in sales in the Water Net Sales 236.8 255.0 + 7
Slide 15: Water Treatment Chemicals
Water Treatment Chemicals FY ended 03/2018 FY ending 03/2019 Y-o-Y (Billions of Yen) (Results) (Plan) Change l It is assumed that production activity in the domestic manufacturing industry Orders 90.4 102.2 + 13.1% will be firm. Domestic 44.5 45.3 + 1.7% l Overseas, some impact is expected Overseas
Slide 16: Water Treatment Facilities (for the domestic electronics industry)
Water Treatment Facilities (for the domestic electronics industry) (Billions of Yen) FY ended 03/2018 FY ending 03/2019 Y-o-Y l Orders for facilities are projected to (Results) (Plan) Change undershoot the previous fiscal year, but to remain firm. Orders 55.3 53.3 - 3.6% Facilities 9.2 6.5 - 29.4% l
Slide 17: Water Treatment Facilities (for domestic general industries)
Water Treatment Facilities (for domestic general industries) (Billions of Yen) FY ended FY ending Y-o-Y l For electric power industries, orders 03/2018 03/2019 (Results) (Plan) Change are expected to rise and progress with construction from the order Orders 56.5 63.0 + 11.5% backlog is expected to l
Slide 18: Water Treatment Facilities (overseas)
Water Treatment Facilities (overseas) FY ended 03/2018 FY ending 03/2019 Y-o-Y (Billions of Yen) (Results) (Plan) Change l Although orders for facilities are expected to decline in reaction to Orders 49.3 28.5 - 42.2% the strength of the record-setting Facilities 39.1 16.8 - 57.2% previous fiscal ye
Slide 19: Breakdown of Service Business Sales
Breakdown of Service Business Sales FY ended 03/2017 FY ended 03/2018 FY ending 03/2019 l Sales growth in the ultrapure water (Billions of Yen) (Results) (Results) (Plan) supply business to switch from negative to positive. Water Treatment 81.9 90.4 102.2 Chemicals Business Water Treatment 97.8 100.
Slide 20: Capital Expenditures, Depreciation, and R&D Expenses
Capital Expenditures, Depreciation, and R&D Expenses (Billions of Yen) FY ended 03/2017 FY ended 03/2018 FY ending 03/2019 l In the fiscal year ended March 31, (Results) (Results) (Plan) 2018, capital expenditure in the Capital Expenditures ultrapure water supply business and 9.3 22.1 26.0 investmen
Slide 21: Review of Previous Medium-Term Management Plan Competitive Kurita 2017 (CK-17)
3 Review of Previous Medium-Term Management Plan Competitive Kurita 2017 (CK-17)
Slide 22: Performance targets and results
Performance targets and results Although profits did not reach projections, overseas sales doubled FY ended 03/2015 FY ended 03/2018 FY ended 03/2018 Three-year Average (Billions of Yen) (Results) (Plan) (Results) Growth Rate Net Sales 189.4 235.0 236.8 + 7.7% Operating Income 19.4 24.5 22.5 + 5.0%
Slide 23: Achievements and Challenges
Achievements and Challenges While progress was made with these measures, the establishment of a rock-solid earnings base is not yet complete Priority Measures Achievements Challenges • Expanding the business in • Growth accompanied by improved Europe, North America and the profitability 1 Cultivate
Slide 24: Results of Allocation of Funds
Results of Allocation of Funds Allocated funds in excess of operating cash flow to growth investments and shareholder returns ¥88.3 billion ¥81.9 billion l 13 consecutive years of dividend increases Dividends Shareholder returns Share buybacks l From the fiscal year ended March 31, 2017, through the
Slide 25: Shareholder Returns
Shareholder Returns Continued to increase the dividend, also implemented share buybacks (Billions of Yen) █ Share buybacks █ Dividends 14 l Continued to increase the dividend, based on 11.3 10.9 our policy of stable increases in dividends and a target payout ratio of 30% to 50%. 5.2 5.6 l Implemente
Slide 26: New Medium-Term Management Plan Maximize Value Proposition 2022 (MVP-22)
4 New Medium-Term Management Plan Maximize Value Proposition 2022 (MVP-22)
Slide 27: Establishes the "Kurita Group Philosophy System"
Establishes the “Kurita Group Philosophy System” From “21st Century Vision” to “Kurita Group Philosophy System” With its corporate philosophy as the starting point, the missions that the Kurita Group will fulfill in society into the Core Values future, its medium- and long-term visions, and its ways
Slide 28: Ideal Form of the New Corporate Vision
Ideal Form of the New Corporate Vision “A Creator of unique value to the solution of water and environment“, contributing to the realization of a sustainable society． 1 Kurita Group will seek to create shared value with society such as environmental preservation and the effective use of resources, a
Slide 29: Establishing a CSR Policy
Establishing a CSR Policy In order for the Kurita Group to continue to grow as it works to realize its corporate philosophy, CSR has been positioned at the heart of management strategy Definition of CSR The Kurita Group’s responsibility for its impacts on society Objectives 1. Creating and maximizin
Slide 30: The Ideal Form, Five Years from Now
The Ideal Form, Five Years from Now Global value creator with a rock-solid earnings base Innovation through “Seeing” from three perspectives “Seeing from the “Seeing from “Seeing from customer” value” outside” Business processes from the customer's Value pricing Open innovation perspective ⓒ2018 KUR
Slide 31: The Two Pillars
The Two Pillars The two pillars of our initiatives are Investment in growth and improved profitability Electronics Energy and industry field infrastructure field Existing General overseas industries field businesses New Overseas businesses business base Investment in growth Improved profitability Ul
Slide 32: Basic Policy and Priority Measures
Basic Policy and Priority Measures Basic Policy Maximize close relationships with customers by redefining preconceived ideas and dramatically raising the quality and speed of our work. Priority Measures l Development of CSV Business l Enhancement of total solutions l Rebuilding of plant production s
Slide 33: Develop CSV Business
Develop CSV Business Contribute to the natural environment, industry and people's lives, provide integrated solutions that generate social value l Developing businesses that contribute to preventing and removing environmental pollution, utilizing renewable energy, and treating and recycling waste. l
Slide 34: Create New Businesses and Promote Innovation
Create New Businesses and Promote Innovation As well as expanding domain of existing businesses, create new business domains that will become pillars of earnings l Create new businesses through the promotion of open innovation. l Realize innovation through business processes and business models that
Slide 35: Acceleration of Investment and Utilization of Capital
Acceleration of Investment and Utilization of Capital Concentrated investment in growth fields, and efficient and effective use of capital Share buybacks l Consider implementing after taking into account Utilization of demand for funds and share price liabilities Dividends l Continue dividend increa
Slide 36: Management Targets
Management Targets Place emphasis on profitability and capital efficiency Net sales Operating income margin Organic growth rate 3 ％ or more 15 ％ Return on equity Adoption of management using （ROE） return on invested capital (ROIC) Aim for 10 ％ or more improved capital efficiency in each business seg
Slide 37: 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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