Kurita Water Industries : Financial Results Presentation (1.18MB)

Kurita Water Industries Ltd.

Results Presentation

for the Fiscal Year Ended March 31, 2024

(Securities code: 6370)

May 10, 2024

Table of Contents

1. Consolidated Financial Results
   for the Fiscal Year Ended March 31, 2024
2. Consolidated Business Forecast
   for the Fiscal Year Ending March 31, 2025
3. Progress of the Medium-Term Management Plan "Pioneering Shared Value 2027（PSV-27）"
4. Appendix

p 1- 8

1. 9-16
   p 17-26
   p 27-29

1 Consolidated Financial Results

for the Fiscal Year Ended March 31, 2024

Overview of Results

(Billions of Yen)

FY 03/2023

Results

FY 03/2024

Results

YoY Change

FY 03/2024 Forecast (Announced in Feb.)

Orders		374.3	390.2		+ 4.2%	375.0
Net Sales		344.6	384.8		+ 11.7%	380.0
Business Profit		38.6	42.1		+ 9.0%	40.0
Net of Other Income and Expenses	(9.5)	(0.8)		－	(0.3)
Operating Profit		29.1	41.2		+ 41.9%	39.7
Profit Before Tax		30.2	41.7		+ 38.3%	39.2
Profit Attributable to Owners of Parent	20.1	29.2		+ 45.0%	28.0
Basic Earnings per Share (yen)	179.14	259.70		+ 45.0％	249.06
Return on Equity (ROE)		7.1％	9.3％		+ 2.2pp	ー
Return on Invested Capital（ROIC）	8.0％	7.2％		(0.8pp)	ー
	USD（Yen）	135.5	144.6			139.7
Foreign Exchange Rate	EUR（Yen）	141.0	156.8			152.5
	CNY（Yen）	19.8	20.1			19.7

• The impact of the new consolidation of Arcade Engineering GmbH and its group companies (herein after "Arcade Engineering") is included in the General Industry segment from the second quarter of the fiscal year ended March 2024.
• Operating profit increased year on year due to the impact of recording a 7.6-billion-yen impairment loss on goodwill related to Kurita America, Inc. in the previous fiscal year.

1

Results by Segment

						FY03/2024
	(Billions of Yen)	FY 03/2023	FY 03/2024	YoY Change	Forecast
	Results	Results	(Announced
						in Feb.)
		Orders	374.3	390.2	+ 15.9	375.0
		Net Sales	344.6	384.8	+ 40.2	380.0
	Total	Business Profit	38.6	42.1	+ 3.5	40.0
		Business Profit	11.2%	10.9%	(0.3pp)	10.5%
		Margin
		Operating Profit	29.1	41.2	+ 12.2	39.7
		Orders	169.9	165.8	(4.1)	159.5
		Net Sales	149.3	172.7	+ 23.4	169.0
	Electronics
	Business Profit	21.8	19.9	(1.8)	19.4
	Industry
	Business Profit	14.6％	11.5％	(3.0pp)	11.5％
		Margin
		Operating Profit	20.9	20.2	(0.7)	19.4
		Orders	204.4	224.3	+ 20.0	215.5
		Net Sales	195.3	212.1	+ 16.8	211.0
	General
	Business Profit	16.9	22.1	+ 5.2	20.6
	Industry
	Business Profit	8.7％	10.4％	+ 1.8pp	9.8％
		Margin
		Operating Profit	8.2	21.0	+ 12.8	20.3

Electronics Industry

• Order declined mainly due to the absence of orders for large-scale projects posted in the previous fiscal year, while net sales increased due to an increase in facilities, maintenance and recurring contract-based services.
• Business profit decreased due to a worsened cost of sales ratio with lower service business composition and the increase of SG&A expenses, despite the sales increase.

General Industry

• Orders and net sales increased due to the new consolidation of Arcade Engineering and expanded facility business in North America.
• Business profit increased, with the effects of higher sales and an improved cost of sales ratio more than offsetting the increase in SG&A expenses.
• Operating profit increased due to the absence of an impairment loss on goodwill related to Kurita America, Inc. recorded in the previous fiscal year

2

Factors in Change in Business Profit (YoY Change)

(Billions of Yen)

50.0

45.0

40.0

38.6

	Impact of		Worsening in the	Increase in
	increased sales		cost of sales ratio
		SG&A expenses	Impact of foreign
	+ 7.4	(0.5)		(4.8)		exchange rate and new
				consolidation
							+ 1.4

42.1

35.0

30.0

25.0

20.0

15.0

10.0

FY 03/2023

Results

• Sales increased in both Electronics Industry segment and General Industry segment

• In Electronics Industry segment, the product mix worsened due to lower service business composition
• In General Industry segment, cost of sales ratio improved due to countermeasures to the soaring raw materials prices/logistics costs and optimization of product composition

• Increase in personnel expenses and sales expenses
• Increase in R&D expenses

FY 03/2024

Results

5.0

0.0

YoY change : ＋35

3

Electronics Industry Segment

								FY 03/2024
		(Billions of Yen)	FY 03/2023	FY 03/2024		YoY Change	Forecast
		Results	Results		(Announced
								in Feb.)
	Orders	169.9		165.8		(4.1)	159.5
		Facilities	68.6		62.6		(5.9)	58.4
		Recurring Contract-	42.3		46.6		+ 4.3	45.2
		Based Services
		Services	59.0		56.6		(2.5)	56.0
		Chemicals	10.7		10.4		(0.2)	11.0
		Precision Tool	27.7		24.9		(2.8)	24.7
		Cleaning
		Maintenance	20.7		21.2		+ 0.5	20.3
	Net Sales	149.3		172.7		+ 23.4	169.0
		Facilities	50.1		70.3		+ 20.2	69.8
		Recurring Contract-	42.1		46.6		+ 4.4	45.0
		Based Services
		Services	57.1		55.8		(1.3)	54.2
		Chemicals	10.7		10.4		(0.3)	10.8
		Precision Tool	27.6		25.0		(2.6)	24.8
		Cleaning
		Maintenance	18.8		20.3		+ 1.6	18.7

• Orders for facilities declined due to the absence of orders for large-scale projects posted in the previous fiscal year. Net sales increased due to the sales progress from ordered projects mainly in Japan and China.
• Recurring contract-based services increased due to an increase in water supply services.
• Net sales for precision tool cleaning decreased reflecting the impact of operations in customers' plants.
• Orders for maintenance were almost at the same level as the previous fiscal year, but net sales increased due to the progress of ordered projects.

			Factors in Change	(Billions of Yen)
			Organic Change		+ 20.0
			Impact of Foreign Exchange Rate	+ 3.4		4

General Industry Segment

							FY 03/2024
		(Billions of Yen)	FY 03/2023	FY 03/2024		YoY Change	Forecast
		Results	Results		(Announced
							in Feb.)
	Orders	204.4	224.3		+ 20.0	215.5
		Facilities	26.4	41.9		+ 15.5	32.6
		Recurring Contract-	7.4	10.4		+ 3.0	10.9
		Based Services*
		Services*	170.6	172.1		+ 1.4	172.0
		Chemicals*	119.4	116.6		(2.8)	117.5
		Maintenance	43.5	46.6		+ 3.1	45.7
		Others	7.6	8.9		+ 1.2	8.8
	Net Sales	195.3	212.1		+ 16.8	211.0
		Facilities	20.0	29.8		+ 9.8	27.7
		Recurring Contract-	6.5	10.2		+ 3.7	10.5
		Based Services*
		Services*	168.8	172.1		+ 3.3	172.8
		Chemicals*	119.0	116.6		(2.4)	116.3
		Maintenance	41.5	45.8		+ 4.2	46.3
		Others	8.3	9.7		+ 1.4	10.2

• Due to changes in disclosed segments, the breakdown figures for the fiscal year ended March 31, 2023, which were provisionally calculated, have been re-calculated as actual figures.

• Orders increased due to the new consolidation of Arcade Engineering, increased orders in North America related to facility projects for public sector and electronics industry. Net sales increased mainly overseas due to the progress of ordered projects.
• Recurring contract-based services increased due to the growth both in Japan and overseas.
• Orders and net sales for chemicals declined mainly due to the impact of the operations in customers' plants in China and the optimization of product composition.
• Orders for maintenance increased due to the winning of engineering cleaning projects. Net sales increased due to the progress of maintenance and cleaning projects.

	Factors in Change	(Billions of Yen)
	Organic Change		+ 4.7
	Impact of Foreign Exchange Rate	+ 7.6
	Impact of New Consolidation		+ 4.5

5

Net Sales by Region / CSV Business Net Sales

Net Sales by Region - Consolidated

	FY 03/2023	FY 03/2024		FY 03/2024
(Billions of Yen)	YoY Change	Forecast
Results	Results	(Announced
				in Feb.)
Japan	178.5	198.4	+ 19.9	195.0
Asia	76.7	85.9	+ 9.3	84.9
North & South	59.9	63.6	+ 3.6	64.0
America
EMEA	29.5	37.0	+ 7.4	36.2
Total	344.6	384.8	+ 40.2	380.0

Net Sales by Region - Electronics Industry

		FY 03/2023	FY 03/2024		FY 03/2024
	(Billions of Yen)	YoY Change	Forecast
	Results	Results	(Announced
					in Feb.)
	Japan	78.8	91.6	+ 12.8	90.4
	Asia	52.1	63.4	+ 11.3	61.3
	North & South	18.4	17.7	(0.7)	17.3
	America
	EMEA	ー	ー	ー	ー
	Total	149.3	172.7	+ 23.4	169.0

Net Sales by Region - General Industry

		FY 03/2023		FY 03/2024		FY 03/2024
	(Billions of Yen)		YoY Change	Forecast
	Results		Results	(Announced
						in Feb.)
	Japan	99.7		106.8	+ 7.1	104.6
	Asia	24.6		22.5	(2.1)	23.6
	North & South	41.5		45.8	+ 4.3	46.7
	America
	EMEA	29.5		37.0	+ 7.4	36.2
	Total	195.3		212.1	+ 16.8	211.0

CSV Business Net Sales

			FY 03/2024		FY 03/2024
		(Billions of Yen)	% of Net Sales*	Forecast
		Results	(Announced
					in Feb.)
Consolidated	40.2	10.4%	45.0
		Electronics Industry	12.1	7.0%	14.0
		General Industry	28.1	13.2％	31.0

* Percentage of consolidated or segment net sales

6

Capital Expenditures, Depreciation and R&D Expenses

	FY 03/2023	FY 03/2024		FY 03/2024
（Billions of Yen）	YoY Change	Forecast
Results	Results	(Announced
				in Feb.)
Capital Expenditures	46.6	38.9	(7.7)	40.0
(Property, Plant and
Equipment*)
Depreciation	25.8	28.3	+ 2.5	27.3
(Property, Plant and
Equipment*)
R&D Expenses	6.3	7.4	+ 1.1	7.6

* Right-of-use assets are included.

• Capital expenditures declined year-on-year due to a lower investment in ultrapure water supply business.
• Depreciation increased due to the start of new ultrapure water supply business projects during the previous fiscal year.
• R&D expenses increased due to strengthening efforts to create innovation.

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