Results Presentation for the Year Ended March 31, 2008
May 9, 2008
Kurita Water Industries Ltd.( Stock code : 6370 )
Table of Contents
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【 1 】
【 2 】
【 3 】
【 4 】
【 5 】
【 6 】
【 7 】
【 8 】
【 9 】
【10】
Financial Highlights
Business Development
Orders, Net Sales, Operating Income, and Operating Income Margin
Water treatment chemicals
Water treatment facilities (for the electronics industry)
Water treatment facilities (for general industries)
Service Business Revenue
Overseas Businesses
Capital Expenditures, Depreciation, and R&D Expenses
Assets, Liabilities, and Net Assets
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
(Billions of Yen)
2007/3 2008/3 Year-on-year change
Orders 192.5 208.7 + 8.4%
Net Sales 197.1 204.9 + 3.9%
Operating Income 24.3 30.5 + 25.5%
Ordinary Income 25.2 31.2 + 23.9%
Net Income 14.2 18.3 + 28.8%
【1】 Financial Highlights
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
1
2
【2】 Business Development
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
Improved domestic product mixOverseas growth contributing to higher salesAbsorb the surge in raw material prices by reducing costs, boosting revenue, and improving product mix
Increased sales to electronics industries on the back of a favorable domestic market environmentSteady expansion in service businessesImproved hardware profitability
Water Treatment Chemicals Business
Water Treatment Facilities Business
136.0 149.7
56.6 59.0
0
100
200 192.5 208.7
15.5 16.2
11.0
14.3
12.3
14.9
10
14
18
211.0
151.9
59.1
140.5 146.2
56.7 58.6
0
100
200 197.1 204.9 207.0
148.3
58.7
15.5 20.9
8.8
9.5
0
15
30 24.3
30.5 27.5
18.1
9.4 16.0
12.213.3
Operating Income MarginOperating Income
SalesOrders(Billions of Yen) (Billions of Yen)
(Billions of Yen) ( % )
2007/3 2008/3 2007/3 2008/3
2007/3 2008/3 2007/3 2008/3
【3】 Orders, Sales, Operating Income, and Operating Income Margin
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
3
Water treatment chemicals Water treatment facilities Total * denotes projections
56.6 59.0 56.7 58.6
0
30
60
2007/3 2008/3
8.8 9.5
15.5 16.2
0
10
20
0
5
10
2007/3 2008/3
【Major areas of growth】Cooling water treatment chemicals; Paper/pulp process treatment chemicals (Japanese market)Overseas subsidiaries
16.0
【Major determinants of change】Improved domestic product mixSurge in raw material pricesHigher revenues overseas
9.459.1 58.7
(Billions of Yen) ( % )(Billions of Yen)
【4】 Water treatment chemicals
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
Operating Income and Operating Income MarginOrders and Sales
4
Orders Sales* denotes projections
Operating income Operating income margin* denotes projections
【Orders/sales growth areas】Wafers, semiconductors, ultrapure water supply, tool cleaning (Japanese market)
【Major determinants of income growth】Increased revenue / improved profitability for domestic hardwareIncreased revenue from the ultrapure water supply business
77.9 88.1 77.0 91.2
0
50
100
13.1 16.9
17.1 18.6
0
10
20
0
10
20 16.1
15.091.1 93.2
【5】 Water treatment facilities (for the electronics industry)
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
(Billions of Yen) ( % )(Billions of Yen)
2007/3 2008/3 2007/3 2008/3
Operating Income and Operating Income MarginOrders and Sales
5
Orders Sales* denotes projections
Operating income Operating income margin* denotes projections
【Major determinants of income growth】Improved hardware profitability
【Major areas of orders growth】Iron and steel, oil refining, petrochemicals
【Major areas of sales declines】Iron and steel, food, public sector demand
58.1 61.5 63.5 55.1
0
30
60
2.3 4.0
3.7
7.3
0
5
10
0
3
6
5.6
3.1
60.8 55.1
【6】 Water treatment facilities (for general industries)
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
(Billions of Yen) ( % )(Billions of Yen)
2007/3 2008/3 2007/3 2008/3
Orders and Sales Operating Income and Operating Income Margin
6
Orders Sales* denotes projections
Operating income Operating income margin* denotes projections
Ultrapure water supply
business
Tool cleaning
Soil remediation
55.2 52.8
85.2 93.5
56.7 58.6
0
100
200
49.9 51.9
12.4 10.4
13.1 14.4
9.8 16.8
0
50
100
197.1 204.9 85.293.5 (+8.3)
54.1
9.8
14.4
16.5
【7】 Service Business Revenue
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
Service Business Revenuein the Water Treatment Facilities BusinessWater treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware) (Billions of Yen)
(Billions of Yen)
2007/3 2008/3 2007/3 2008/3
* denotes projections
7
Maintenance, etc.
22.6 23.7
3.4 2.8 1.3 1.7 2.2 3.1
0
15
30 29.531.3
20.6 20.1
8.9 11.2
0
15
30 29.531.3
25.7
3.21.72.4
33.0
21.8
11.2
33.0
【8】 Overseas Businesses
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
(Billions of Yen) (Billions of Yen)
2007/3 2008/3 2007/3 2008/3
Asia N. America Europe Other* denotes projections
Water treatment chemicals Water treatment facilities
* denotes projections
8
Sales by Region Sales by Overseas Business Segment
3.2 3.5 5.6 8.5
0
15
30
19.0
19.815.7
23.3
4.4 4.6
2.2 2.2
0
2
4
0
3
6
8.06.0
30.0
36.0
4.7
2.3
【9】 Capital Expenditures, Depreciation, and R&D Expenses
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
( % )(Billions of Yen) (Billions of Yen)
2007/3 2008/3 2007/3 2008/3
Capital Expenditures and Depreciation R&D Expenses
Capital expenditures(ultrapure water supply business)
Capital expenditures(excl. ultrapure
water supply business)
Depreciation
* denotes projections
R&D Expenses Percentage of net sales
* denotes projections
9
Liabilities
Net assets
Other fixed assets
Other current assets
Cash, deposits and Marketable securities
Tangible fixed assets
30.8 27.9
67.3 82.0
93.4 87.3
43.6 34.3
235.1 231.5
158.2 171.1
76.9 60.4
235.1 231.5
( - 2.9)
( + 14.7)
( - 6.1)
( - 9.3)
( + 12.9)
( - 16.5)
(Billions of Yen) (Billions of Yen)
Mar. 2007 Mar. 2008
【10】 Assets, Liabilities, and Net Assets
Ⅰ. Consolidated Financial Results for the Fiscal Year Ended March 31, 2008
Assets Liabilities and Net Assets
Mar. 2007 Mar. 2008
10
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
Overview
Key Assumptions
Strategic Focuses for the Fiscal Year Ending March 31,2009
【 1 】
【 2 】
【 3 】
【 4 】
【 5 】
【 6 】
【 7 】
【 8 】
【 9 】
Orders , Sales, Operating Income, and Operating Income Margin
Water treatment chemicals
Water treatment facilities (for the electronics industry)
Water treatment facilities (for general industries)
Capital Expenditures, Depreciation, and R&D Expenses
Profit Distribution Policy
(1) Expansion of Service
(2) Overview of the Ultrapure Water Supply Business
(3) Ultrapure Water Supply Business (Trends)
(4) Ultrapure Water Supply Business (Trends)-2
(5) Expand Ultrapure Water Supply Business
(6) Expand Overseas Businesses
(Billions of Yen)
2008/3 2009/3(Projected)
Year-on-yearchange
Orders 208.7 218.0 + 4.5%
Net Sales 204.9 213.0 + 4.0%
Operating Income 30.5 32.0 + 5.0%
Ordinary Income 31.2 32.3 + 3.4%
Net Income 18.3 18.5 + 1.1%
【1】 Overview
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
11
【2】 Key Assumptions
Operating rates maintained in the domestic materials sector and at electronics plantsClient companies: continued strong productivity increases, cost cutting efforts, and environmental requirementsContinued expansion of Asian economiesContinued rise in raw material prices
Growing demand in the ultrapure water supply businessTemporary pause in large capital expenditures in the domestic electronics industryOverseas capital expenditure: Signs of a recovery for LCDs; Uncertainty for semiconductorsContinued capital investment in the domestic materials sector
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
12
Water Treatment Chemicals Business
Water Treatment Facilities Business
Ultrapure water supply business
Tool cleaning
Maintenance, etc.
Soil remediation
52.8 47.9
93.5 104.4
58.6 60.7
0
100
200
51.9 54.9
10.4 10.5
14.4 15.0
16.8 24.0
0
50
100
204.9 213.0 93.5
104.4 (+10.9)
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
(1) Accelerate Expansion of Service Businesses
Service Business Revenue in theWater Treatment Facilities Business
Water treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)
(Billions of Yen)
(Billions of Yen)
2008/3 2009/3 (Projected)
2008/3 2009/3(Projected)
13
Semiconduction/FPD manufacturing process
payment of fees
supply of ultrapure water
Client Factory
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
(2) Overview of the Ultrapure Water Supply Business
Rawwater
Reclaimed water
Waste-water
Discharge
Pretreatment facility
Ultrapure water production system
Wastewaterreclaim system
Wastewatertreatment facility
・ Construction(CAPEX)・ Ownership(Capitalize)・ Operation/Management・ Maintenance
Kurita
Pays fees based on volume of water usedClient
14
2003/3 2004/3 2005/3 2006/3 2007/3 2008/3 2009/32002/3
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
(3) Ultrapure Water Supply Business (Trends)
【 to LCD plants in Singapore 】
【 to domestic large-scale LCD plants 】
【 to domestic semiconductor plants 】
【 to domestic large-scale LCD plants 】
【 to domestic wafer plants 】
【 to domestic semiconductor plants 】
【 to domestic large-scale LCD plants 】
【 to domestic large-scale plasma display panel (PDP) plants 】
15
Completed LCD industrial complex (conceptual image)
(4) Ultrapure Water Supply Business (Trends)-2
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
16
11.9 15.7 19.8
47.0
24
40
59
106
0
60
120
0
30
60
2006/3
5.7 9.8
16.8
24.0
0
12
24
Capital expenditure (left axis)
Total cumulative investment(right axis)
2007/3 2008/3 2009/3(Projected)
(5) Expand Ultrapure Water Supply Business
(Billions of Yen) (Billions of Yen)
Capital Expenditures andTotal Cumulative Investment Sales
(Billions of Yen)
2006/3 2007/3 2008/3 2009/3(Projected)
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
17
22.6 23.7 25.3
3.4 2.8 2.6 1.3 1.7 1.9 2.2 3.1 2.7
0
20
40
29.5
20.6 20.1 20.0
8.9 11.2 12.5
0
20
40
31.3 32.529.5 31.3 32.5
(6) Expand Overseas Businesses
(Billions of Yen) (Billions of Yen)
Water treatment chemicals Water treatment facilitiesAsia N. America Europe Other
2007/3 2008/3 2009/3(Projected)
2007/3 2008/3 2009/3(Projected)
【3】 Strategic Focuses for the Fiscal Year Ending March 31,2009
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
18
Sales by Region Sales by Overseas Business Segment
149.7 157.2
59.0 60.8
0
100
200 208.7 218.0
16.2 16.6
14.3 14.4 14.9
15.0
13
15
17
146.2 152.3
58.6 60.7
0
100
200 204.9 213.0
20.9 21.9
9.5 10.1
0
15
30 30.5 32.0
【4】 Orders, Sales, Operating Income, and Operating Income Margin
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
Water treatment chemicals Water treatment facilities Total
SalesOrders
(Billions of Yen) (Billions of Yen)
Operating Income MarginOperating Income
(Billions of Yen)( % )
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
19
59.0 60.8 58.6 60.7
0
30
60
9.5 10.1
16.2 16.6
0
10
20
0
5
10
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【5】 Water treatment chemicals
(Billions of Yen)( % )
Operating income Operating income margin
(Billions of Yen)
Orders Sales
Operating Income and Operating Income MarginOrders and Sales
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
【Major areas of growth】Japan: Cooling water treatment chemicals, paper/pulp process treatment chemicalsOverseas: China, Thailand, Europe
【Major determinants of change】Improved domestic product mixHigher revenues overseasSurge in raw material prices
20
88.1 95.0 91.2 92.4
0
50
100
16.9 17.5
18.6 19.0
0
10
20
0
10
20 (Billions of Yen) ( % )(Billions of Yen)
Operating Income and Operating Income MarginOrders and Sales
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【6】 Water treatment facilities (for the electronics industry)
【Major determinants of change】Decrease in domestic hardwareGrowth in the ultrapure water supply business
【Major determinants of change】Decreased revenue from domestic hardwareIncreased revenue from the ultrapure water supply business
21
Operating income Operating income marginOrders Sales
61.5 62.2 55.1 59.9
0
30
60
4.0 4.4
7.3 7.4
0
5
10
0
3
6
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【7】 Water treatment facilities (for general industries)
(Billions of Yen) ( % )(Billions of Yen)
Operating Income and Operating Income MarginOrders and Sales
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
【Major determinants of change】Increased revenue from domestic hardware
【Major areas of sales growth】Iron and steel
22
Operating income Operating income marginOrders Sales
3.5 4.0 8.5 11.5 0
25
50
23.3 47.0
19.8
51.0
4.6 4.8
2.2 2.2
0
2
4
0
3
6
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【8】 Capital Expenditures, Depreciation, and R&D Expenses
R&D Expenses Percentage of net salesCapital expenditures
(ultrapure water supply business)
Capital expenditures(excl. ultrapure
water supply business)
Depreciation
Capital Expenditures and Depreciation R&D Expenses
2008/3 2009/3 (Projected) 2008/3 2009/3 (Projected)
(Billions of Yen) ( % )(Billions of Yen)
23
1822
2832
34
0
20
40
Basic Dividend PolicyKurita’s basic policy is to maintain stable dividends, and the company will work to increase dividends while giving due consideration to trends in results and investments in its businesses.
+ 4
2005/3 2006/3 2007/3 2008/3
+ 6+ 4
+ 2
+ 2
Ⅱ. Consolidated Business Plan for the Fiscal Year Ending March 31, 2009
【9】 Profit Distribution Policy
(Yen)
2009/3(Projected)
24
Reference Materials
Reference Materials
Analysis of Changes in Operating Income for the Fiscal Year Ended March 31, 2008
24.3
0.0 0.0 0.0 0.0
30.5
0
15
30
Rise in prices of primary chemical products resulting from the surge inraw material prices
Increase in personnel expensesIncrease in advertising and promotional expensesIncrease in research and development expenses
Improved domestic product mix in chemicalsImproved cost ratio for the hardware segment of the facilities business
- 0.8
+ 5.4+ 2.3
- 0.6
(Billions of Yen)
2007/3 2008/3
* Effects of improved cost ratio and higher income are calculated using the gross profit margin. “Cost ratio” refers to the sales-to-cost ratio.
Higher costof raw
materials
HigherSG&A
expenses
Effect ofimprovedcost ratio*
Effect ofhigher
income*
25
■ U R L ■
■ M A I L ■
h t t p : / / w w w . k u r i t a . j p /
i r @ k u r i t a . c o . j p
Kurita Water Industries Ltd.
Forward-looking StatementsThis 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 specified or implied by these forward-looking statements and projections.