Kurita Water Industries : Notice of Recognition of Impairment Loss and Revision of Business Forecast

May 14, 2026

Company name: Kurita Water Industries Ltd. Stock exchange listing: Tokyo Securities code: 6370 URL: https://www.kurita-water.com/

Representative: Hirohiko Ejiri, Director, President and Representative Executive Officer

Contact: Shinichi Masuda, General Manager of Corporate Accounting Department TEL: +81-3-6743-5054

Scheduled date of annual shareholders’ meeting: June 25, 2026 Scheduled starting date of dividend payment: June 26, 2026 Scheduled date of filing securities report: June 23, 2026 Supplementary documents for financial results: Yes

Holding of financial results briefing: Yes (for analysts and institutional investors)

(Amounts are rounded to the nearest million)

1. Consolidated financial results for the fiscal year ended March 31, 2026 (from April 1, 2025 to March 31, 2026)

   1. Consolidated results of operations (%: Year-on-year change)

      	Net sales		Business profit		Operating profit		Profit		Profit attributable to owners of parent		Total comprehensive income
      Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Million yen	%
      March 31, 2026	402,889	3.6	57,343	12.7	58,290	16.8	16,295	(21.3)	15,957	(21.4)	31,790	98.2
      March 31, 2025	388,814	-	50,898	-	49,918	-	20,706	(30.0)	20,305	(30.4)	16,039	(65.7)

      	Basic earnings per share	Diluted earnings per share	Return on equity	Return on assets	Operating profit to net sales
      Fiscal year ended	Yen	Yen	%	%	%
      March 31, 2026	145.34	-	4.7	10.4	14.5
      March 31, 2025	180.66	-	6.1	9.2	12.8

      (Reference) Profit before tax Fiscal year ended March 31, 2026: 58,160 million yen (14.7%) Fiscal year ended March 31, 2025: 50,709 million yen (‒%)

      Share of profit (loss) of investments accounted for using equity method Fiscal year ended March 31, 2026: 119 million yen

      Fiscal year ended March 31, 2025: 108 million yen

      (Notes) 1. Business profit is the Group’s own indicator that measures constant business performance. It is net sales less cost of sales and selling, general and administrative expenses. Although business profit is not defined by IFRS, the Group voluntarily discloses it, believing that it is beneficial for users of its financial statements.

2. In the fiscal year under review, the Company classified the business of Pentagon Technologies Group, Inc. as discontinued operations. Net sales, business profit, operating profit, and profit before tax are figures pertaining only to continuing operations and exclude figures from discontinued operations. Profit, profit attributable to owners of parent, and total comprehensive income encompass profits from both continuing and discontinued operations. These figures for the previous fiscal year have been restated, and year-on-year percentage changes for net sales, business profit, and operating profit are not provided.

1. Consolidated financial condition

   	Total assets	Total equity	Total equity attributable to owners of parent	Ratio of equity attributable to owners of the parent	Equity per share attribute to owners of parent
   As of	Million yen	Million yen	Million yen	%	Yen
   March 31, 2026	564,422	343,977	341,151	60.4	3,117.58
   March 31, 2025	548,949	338,504	336,027	61.2	2,995.84

2. Consolidated cash flows

1. Dividend

   	Dividend per share					Total dividends	Payout ratio (Consolidated)	Ratio of dividends to equity attributable to owners of parent (Consolidated)
   	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
   Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
   	- -	46.00 56.00	- -	46.00 56.00	92.00 112.00	10,365 12,306	50.9 77.1	3.1 3.7
   Fiscal year ending March 31, 2027 (forecast)	-	67.00	-	67.00	134.00		34.1

2. Forecast of consolidated financial results for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027)

(%: Year-on-year change)

(Reference) Profit before tax First half 22,800 million yen (‒%) Full year 60,000 million yen (3.2%)

(Notes) 1. In the fiscal year under review, the Company classified the business of Pentagon Technologies Group, Inc. as discontinued operations. Net sales, business profit, operating profit, and profit before tax are figures pertaining only to continuing operations and exclude figures from discontinued operations. Profit attributable to owners of parent encompasses profits from both continuing and discontinued operations. The year-on-year percentage changes for the full-year forecasts are based on the results for the fiscal year under review, after excluding figures from discontinued operations.

2. At the Board of Directors meeting held on May 14, 2026, the Company resolved to purchase treasury shares. The basic earnings per share in the forecast of consolidated financial results for the fiscal year ending March 31, 2027, takes into account the effect of the purchase of treasury shares by Board resolution. For more information on the decision to purchase treasury shares, please refer to (Purchase of treasury shares) under (Significant Subsequent Events) in section “3. Consolidated Financial Statements and Key Notes, (5) Notes to Consolidated Financial Statements” on page 26 of the accompanying materials.

* Notes

1. Significant changes in the scope of consolidation during the period: None

2. Changes in accounting policies and accounting estimates

   1. Changes in accounting policies required by IFRS: None

   2. Changes in accounting policies other than (i) above: None

   3. Changes in accounting estimates: None

3. Number of issued shares (common share)

   As of March 31, 2026	116,200,694 shares
   As of March 31, 2025	116,200,694 shares
   As of March 31, 2026	6,772,548 shares
   As of March 31, 2025	4,035,900 shares
   Fiscal year ended March 31, 2026	109,795,499 shares
   Fiscal year ended March 31, 2025	112,395,208 shares

   1. Number of issued shares at the end of the period (including treasury shares):

   2. Number of treasury shares at the end of the period:

   3. Average number of shares outstanding during the period:

(Note) The total number of treasury shares at the end of the period includes shares of the Company (447,000 shares in the fiscal year ended March 31, 2026, 499,000 shares in the fiscal year ended March 31, 2025). The Company’s own shares posted as treasury shares remaining in trust are included in the treasury shares that are deducted in the calculation of the average number of shares outstanding for calculation for basic earnings per share. (464,000 shares in the fiscal year ended March 31, 2026, 265,000 shares in the fiscal year ended March 31, 2025).

(Reference) Summary of non-consolidated financial results

Non-consolidated operating results (from April 1, 2025 to March 31, 2026)

1. Non-consolidated operating results (%: Year-on-year change)

   	Net sales		Operating profit		Ordinary profit		Profit
   Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
   March 31, 2026	157,422	12.3	12,419	39.3	30,502	40.4	25,147	-
   March 31, 2025	140,150	(5.0)	8,915	31.3	21,726	10.8	(6,149)	-

   	Basic earnings per share	Diluted earnings per share
   Fiscal year ended March 31, 2026 March 31, 2025	Yen 229.04 (54.71)	Yen - -

2. Non-consolidated financial position

(Reference) Shareholders’ equity As of March 31, 2026: 240,514 million yen As of March 31, 2025: 239,112 million yen

During the fiscal year ended March 31, 2026, net sales increased primarily due to progress with the construction of large-scale projects in both the Electronics Industry and General Industry segments. Operating profit also rose.

Ordinary profit climbed due to the increased operating profit and a rise in dividends from subsidiaries. Profit turned positive because there was no loss on valuation of shares of subsidiaries and associates as an extraordinary loss. In the previous fiscal year, a loss on valuation of shares of 25,388 million yen was recorded.

These factors gave rise to differences between the non-consolidated financial results for the fiscal year ended March 31, 2026, and the actual results for the previous fiscal year.

• These consolidated financial results are outside the scope of audit by certified public accountants or audit firms.

• Explanation about the appropriate use of the results forecasts and other special notes (Note on forward-looking statements, etc.)

  Forward-looking statements, including the results forecasts contained in this material, are based on information currently available for the Company and certain assumptions which the Company deems reasonable. The Company does not intend to provide any guarantee on the realization on these forecasts. Actual results may differ from these forecasts and forward-looking statements due to various factors. For the conditions on which financial results forecasts are based and the notes on the use of these forecasts, please refer to “(4) Future Outlook” on page 7 of the accompanying materials.

• This document is an English translation of the Earnings Report for the Fiscal Year Ended March 31, 2026 as reference information primarily for overseas investors. If there are any discrepancies between the Japanese version and the English version, the Japanese version shall take precedence in all cases.

  Table of Contents - Attachments

  1. Results of Operations 2

     1. Results of Operations 2

     2. Financial Condition 5

     3. Cash Flows 6

     4. Future Outlook 7

     5. Dividend Policy and Dividends for the Fiscal Year ended March 31, 2026 and the Fiscal Year ending March 31, 2027 8

  2. Basic Concept for the Selection of Accounting Standards 8

  3. Consolidated Financial Statements and Key Notes 9

     1. Consolidated Statement of Financial Position 9

     2. Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income 11

     3. Consolidated Statement of Changes in Equity 13

     4. Consolidated Statement of Cash Flows 15

     5. Notes to Consolidated Financial Statements 17

(Notes on the Going-concern Assumption) 17

(Changes in the Method of Presentation) 17

(Segment Information) 17

(Cash and Cash Equivalents) 22

(Assets Held for Sale and the Liabilities Directly Associated with Them) 22

(Bonds and Borrowings) 23

(Notes in the Event of Significant Changes in Shareholders’ Equity) 23

(Per Share Information) 24

(Discontinued Operations) 24

(Consolidated Statement of Profit or Loss) 25

(Significant Subsequent Events) 25

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1. Results of Operations

   1. Results of Operations

      1. Fiscal Year Ended March 31, 2026 (April 1, 2025 - March 31, 2026)

During the fiscal year ended March 31, 2026, the global economy experienced ongoing uncertainty due to disruptions in supply chains for essential goods and rising prices. These challenges were attributed to the deteriorating situations in Ukraine and the Middle East, as well as changes in trade policies across various countries. Despite these obstacles, a moderate recovery was observed overall. In Japan, production in the manufacturing industry remained roughly flat, though U.S. tariff hikes negatively affected certain sectors in the first half of the fiscal year. Capital expenditures remained solid due to high corporate earnings. Overseas, the U.S. economy slowed but remained firm. European economies continued to recover. In China, signs of a slowdown intensified, particularly in domestic demand. Asian economies outside China experienced a moderate overall recovery. The pace of recovery varied by country.

In this environment, the Company and its consolidated subsidiaries entered the third year of PSV-27 (Pioneering Shared Value 2027), a five-year medium-term management plan. The Group implemented its priority measures based on the basic policy: refining human resources, technologies and business processes to create value that exceeds expectations from stakeholders through overwhelming speed and problem-solving ability. In the electronics industry, the Group aimed to enhance customer engagement, particularly with its global account customers who are among the leading semiconductor manufacturers. To achieve this, the Group focused on launching projects won in Europe and the Americas during the same period of the previous year and establishing a foundation for managing large-scale projects. Additionally, the Group utilized its engineering and technical capabilities to secure orders for water treatment facility projects, which will serve as a launching pad for its global service business. Meanwhile, the Group conducted a thorough assessment of the future growth potential and profitability of Pentagon Technologies Group, Inc. (Electronics Industry), a U.S.-based subsidiary that primarily operates in the precision tool cleaning business in the United States and determined that the best option for Pentagon Technologies Group, Inc. is to pursue further growth under new ownership that will enhance its value. On May 13, 2026, the Group decided to transfer the shares of Pentagon Technologies to a special purpose company that indirectly receives investments from a fund serviced by AEQUITA GmbH & Co. KG and entered into an agreement for the transfer of the shares. In the fiscal year under review, the assets of Pentagon Technologies Group, Inc. met the criteria for classification as assets held for sale under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The Group has thus classified the business of Pentagon Technologies Group, Inc. as discontinued operations. The format of its consolidated financial statements has been updated for the fiscal year under review. Additionally, the consolidated financial statements and notes for the previous fiscal year have been restated to align with the new format.

In the general industry, the Group accelerated sales growth in its CSV business. This business significantly contributes to water savings, avoids GHG emissions, and reduces resource inputs compared to conventional technologies and those of its competitors. The Group provides optimal solutions to the various issues faced by customers across diverse businesses in different countries and regions. To expand sales, the Group focused on increasing the number of solution models it offers and horizontal business development utilizing a group-wide information platform. Kurita America Inc., primarily engaged in the manufacture and sale of water treatment chemicals and facilities, absorbed Avista Technologies Inc., which specializes in the manufacture and sale of chemicals for reverse osmosis (RO) membranes mainly in the United States. This acquisition aims to strengthen the Group’s presence in the North America water treatment market.

The Group focused on strengthening its PFAS (organic fluorine compounds) treatment and removal business to create and develop a new business with high social value. Regulations regarding PFAS are becoming stricter in the United States, Europe, and Japan due to concerns about their environmental persistence and potential effects on human health. The Company has begun efforts to create a comprehensive solution that encompasses PFAS analysis, removal, and detoxification.

These initiatives resulted in a total of 442,961 million yen in consolidated orders for continuing operations, a 7.3% increase year on year. Net sales increased 3.6%, to 402,889 million yen. Business profit* increased 12.7% compared to the previous fiscal year, to 57,343 million yen. Operating profit stood at 58,290 million yen, up 16.8% year on year. Profit before tax was 58,160 million yen, up 14.7%. Profit attributable to owners of parent, which encompasses profits from both continuing and discontinued operations, came to 15,957 million yen, down 21.4%. This decline resulted from an increase of 3,418 million yen in impairment losses on fixed assets, including goodwill, related to Pentagon Technologies Group, Inc., which has now been classified as discontinued operations.

During the fiscal year under review, other income of 2,414 million yen and other expenses of 1,468 million yen were posted in continuing operations. Other income decreased 704 million yen from the previous fiscal year. This decrease was chiefly due to the absence of a gain on reversal of advances received of 1,653 million yen recorded in the previous fiscal year, resulting from cancellations of ultrapure water supply contracts (Electronics Industry) with a certain customer. The decline was partially offset by a liquidation gain of 785 million yen resulting from the cancellations that was recorded in the fiscal year under review. Other expenses fell 2,630 million yen from the previous fiscal year. This decrease reflects the absence of impairment losses of 2,501

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