Post on 12-Sep-2020
Results Presentationfor the Year Ended March 31, 2014
Kurita Water Industries Ltd.
May 2, 2014
(Stock code: 6370)
I
II
III
Consolidated Financial Results for the Fiscal Year Ended March 31, 2014
Consolidated Business Plan for the Fiscal Year Ending March 31, 2015
Key Initiatives
Reference Material
I. Consolidated Financial Results for the Fiscal Year Ended March 31, 2014
1.
2.
3.
4.
5.
6.
Financial Highlights
Orders, Sales, Operating Income, and Operating Income Margin
Water Treatment Chemicals
Water Treatment Facilities (for the electronics industry)
Water Treatment Facilities (for general industries)
Financial Condition
1
Fiscal Year toMarch 2013
Actual
Fiscal Year toMarch 2014
ActualYear-on-Year
ChangeRevised
ProjectionsInitial
Projections
Orders 186.7 173.5 - 7.1% 181.0 197.0
Net Sales 180.1 178.1 - 1.1% 176.0 191.0
Operating Income 21.0 14.9 - 29.1% 15.0 23.5
Ordinary Income 22.0 16.1 - 27.1% 15.8 24.0
Net Income 11.5 9.4 - 18.5% 9.0 14.0
(Billions of Yen)
2
130.7 114.0
56.0 59.4
186.7 173.5
0
100
200
03/2013 03/2014
(Billions of Yen)
14.9 13.5
10.2
5.8
11.7
8.4
4
10
16
03/2013 03/2014
(%)
181.0
122.5
58.5
124.1 119.3
56.1 58.8
180.1 178.1
0
100
200
03/2013 03/2014
(Billions of Yen)
176.0
118.0
58.0
12.6 6.9
8.3
8.0
21.0
14.9
0
11
22
03/2013 03/2014
(Billions of Yen)
15.0
6.7
8.3
5.7
8.5
Operating Income MarginOperating Income
SalesOrders
Water treatment chemicals Water treatment facilities Total * denotes revised projections
14.3
3
8.3 8.0
14.9 13.5
0
9
18
0
5
10
03/2013 03/2014
(Billions of Yen) (%)
8.356.0 59.4
0
30
60
03/2013 03/2014
(Billions of Yen)
58.5
* denotes revised projections
14.3
Orders Sales Operating Income andOperating Income Margin
[Major areas of change in Orders / Sales] Japan: Delayed recovery in customers’ capacity utilization in the first half (-) Overseas: Growth primarily in Asia (+)
[Major determinants of change] Impact of increase in revenue (+) Increase in SG&A expenses (-)
56.1 58.8
0
30
60
03/2013 03/2014
(Billions of Yen)
58.0
Operating incomeOperating income margin
* denotes revised projections
* denotes revised projections
4
11.5 7.8
15.7
10.9
0
10
20
0
7
14
03/2013 03/2014
7.4
75.4 65.2
0
40
80
03/2013 03/2014
70.8
10.6
[Major determinants of change] Deterioration of cost of sales ratio (-) Impact of decline in revenue (-) Increase in SG&A expenses (-)
73.3 71.0
0
40
80
03/2013 03/2014
70.2
[Major areas of change in Orders / Sales] Decline in hardware overseas (-) Decrease in ultrapure water supply business (-) Increase in maintenance services overseas (+)
Orders Sales Operating Income andOperating Income Margin
* denotes revised projections * denotes revised projections Operating incomeOperating income margin
* denotes revised projections
(Billions of Yen) (%)(Billions of Yen) (Billions of Yen)
5
1.1
-0.8
2.2
-1.7 -3
0
3
-1.2
0
1.2
03/2013 03/2014
-0.755.3 48.9
0
30
60
03/2013 03/2014
51.7
1.6
50.7 48.3
0
30
60
03/2013 03/2014
47.8
[Major determinants of change] Deterioration of cost of sales ratio (-) Impact of decline in revenue (-)
[Major areas of change] Decrease in hardware for general
industries (-) Decrease in maintenance
services for general industries (-)
Operating incomeOperating income margin
* denotes revised projections
[Major areas of change] Decrease in hardware for
electric power industry (-)
(Billions of Yen) (%)(Billions of Yen) (Billions of Yen)
* denotes revised projections
Orders Sales Operating Income andOperating Income Margin
* denotes revised projections
Cash, deposits and
marketable securities
Other current assets
Tangible fixed assets
Other fixed assets
Liabilities
Net assets
6
29.9 34.6
86.8 77.9
69.8 67.2
77.0 95.3
263.6 274.9
209.1 219.2
54.5 55.8
263.6 274.9
(+ 4.7)
(- 9.0)
(- 2.7)
(+ 18.3)
(+ 10.0)
(+ 1.3)
Mar. 31, 2013 Mar. 31, 2014 Mar. 31, 2013 Mar. 31, 2014
Liabilities and Net AssetsAssets
(Billions of Yen) (Billions of Yen)
II. Consolidated Business Plan for the Fiscal Year Ending March 31, 2015
1.2.3.4.5.6.7.8.9.
10.11.
Business Environment and Key AssumptionsOverviewOrders, Sales, Operating Income, and Operating Income MarginWater Treatment ChemicalsWater Treatment Facilities (for the electronics industry)Water Treatment Facilities (for general industries)Service Business RevenueOverseas Businesses (sales by region and business)Ultrapure Water Supply BusinessCapital Expenditures, Depreciation, and R&D ExpensesDividend Policy
Capacity utilization at customers is on a recovery trend.
Recovery in capital expenditure is slow.7
-10
5
20
60
80
100
03/2012 03/2013 03/2014
(%)
Index of industrial production
Domestic sales of chemicals
(Year-on-year change)
Index of industrial production
(Year-on-year change)
(Seasonally adjusted index; 2010 = 100)
Japan Overseas
Demand for water treatment for reuse of wastewater and other uses is increasing
against a backdrop of water shortages and the tightening of regulations worldwide.
Capital expenditure in the electronics industry in East Asia varies depending on products
and customers.
Despite concern over a slowdown in economic growth in Southeast Asia and other emerging economies, demand for energy and food will continue to increase due to rises in
population, and the construction of auto parts, steel sheet, and chemical plants will continue
as GDP grows.
8
Fiscal Year toMarch 2014
Actual
Fiscal Year toMarch 2015Projection
Year-on-Year Change
Orders 173.5 189.0 + 9.0%
Net Sales 178.1 185.0 + 3.9%
Operating Income 14.9 17.0 + 14.2%
Ordinary Income 16.1 17.8 + 10.8%
Net Income 9.4 11.0 + 17.6%
(Billions of Yen)
9
114.0 128.0
59.4 61.0 173.5 189.0
0
100
200(Billions of Yen)
13.5 14.4
5.8 6.6 8.4 9.2
4
10
16
03/2014Actual
03/2015Projection
(%)
119.3 124.1
58.8 60.9
178.1 185.0
0
100
200(Billions of Yen)
6.9 8.2
8.0 8.8
14.9 17.0
0
10
20
03/2014Actual
03/2015Projection
(Billions of Yen)Operating Income
SalesOrders
Water treatment chemicals Water treatment facilities Total
03/2014 03/2015Actual Projection
03/2014 03/2015Actual Projection
Operating Income Margin
10
8.0 8.8
13.5 14.4
0
9
18
0
5
10
03/2014 Actual
03/2015 Projection
59.4 61.0
0
35
70
03/2014 Actual
03/2015 Projection
[Major determinants of change] Impact of increase in revenue (+) Improvement in cost of sales ratio (+) Increase in SG&A expenses (-)
58.8 60.9
0
35
70
03/2014 Actual
03/2015 Projection
[Major areas of change in Orders / Sales] Japan: Recovery primarily in core products (+) Overseas: Continued growth particularly in Asia (+)
(Billions of Yen) (%)(Billions of Yen)
Orders Sales Operating Income andOperating Income Margin
(Billions of Yen)
Operating incomeOperating income margin
11
7.8 8.2
10.9 11.2
0
7
14
0
5
10
03/2014 Actual
03/2015 Projection
65.2 72.9
0
40
80
03/2014 Actual
03/2015 Projection
[Major determinants of change] Impact of increase in revenue (+) Improvement in cost of sales ratio (+)
71.0 73.1
0
40
80
03/2014 Actual
03/2015 Projection
[Major areas of change] Increase in hardware overseas (+) Decrease in hardware in Japan (-)
[Major areas of change] Increase in hardware overseas (+) Increase in maintenance services
overseas (+) Decrease in hardware in Japan (-)
(Billions of Yen) (%)(Billions of Yen)
Orders Sales Operating Income andOperating Income Margin
(Billions of Yen)
Operating incomeOperating income margin
12
-0.8 0.0
-1.7
0.1
-2
0
2
-0.8
0
0.8
03/2014 Actual
03/2015 Projection
48.9 55.1
0
30
60
03/2014 Actual
03/2015 Projection
48.3 51.0
0
30
60
03/2014 Actual
03/2015 Projection
[Major determinants of change] Impact of increase in revenue (+) Improvement in cost of sales ratio (+) Increase in SG&A expenses (-)
[Major areas of change] Increase in general industries hardware (+) Increase in maintenance services (+)
[Major areas of change] Increase for electric power industry (+) Increase in general industries hardware (+) Increase in maintenance services (+)
(Billions of Yen) (%)(Billions of Yen)
Orders Sales Operating Income andOperating Income Margin
(Billions of Yen)
Operating incomeOperating income margin
Maintenance, etc.
Tool cleaning
Ultrapure water supply
business
51.3 56.4 49.4 51.8 53.7
9.7 9.3
8.5 8.1 8.2
35.1 34.8
32.4 31.6 31.5
96.1 100.5
90.3 91.5 93.4
0
50
100
03/2011 03/2012 03/2013 03/2014 03/2015Projection
28.4 36.7 33.6 27.7 30.7
96.1 100.5
90.3 91.5 93.4
56.7 56.4
56.1 58.8 60.9
181.2 193.8
180.1 178.1 185.0
0
100
200
03/2011 03/2012 03/2013 03/2014 03/2015Projection
13
Service Business Revenuein the Water Treatment Facilities SegmentWater treatment chemicals
Water treatment facilities (services)
Water treatment facilities (hardware)(Billions of Yen)
(Billions of Yen)
Service business revenue
150.4152.8157.0
146.4 154.3
14
19.222.5 23.9
27.232.0
2.82.3 2.3
1.8
1.4
1.31.4 1.2
1.3
1.2
3.13.0 3.0
3.3
3.6
26.429.3 30.5
33.6
38.2
0
20
40(Billions of Yen)
15.5 17.8 18.5 17.721.0
10.911.5 12.0 15.9
17.226.429.3 30.5
33.6
38.2
0
20
40(Billions of Yen)
Sales by Region Sales by Overseas Business Segment
Asia N. America Europe Other
Water treatment chemicals
Water treatment facilities
03/2011 03/2012 03/2013 03/2014 03/2015Projection
03/2011 03/2012 03/2013 03/2014 03/2015Projection
15
35.1 34.8 32.4 31.6 31.5
0
20
40
03/2011 03/2012 03/2013 03/2014 03/2015Projection
(Billions of Yen)
Sales
3.9
5.3
3.22.8
4.8
0
3
6
03/2011 03/2012 03/2013 03/2014 03/2015Projection
(Billions of Yen)
Capital Expenditures
16
4.4 4.5 4.8
2.4 2.5 2.6
0
1.5
3
0
3
5
03/2013 03/2014 03/2015Projection
(%)(Billions of Yen)
R&D ExpensesCapital Expenditures and Depreciation
Capital expenditures(ultrapure watersupply business)
Capital expenditures (excl. ultrapure water
supply business)
Depreciation
2.9 2.5 2.5
3.22.8
4.8
6.1 5.3
7.3 14.5 14.3 14.5
0
8
15
03/2013 03/2014 03/2015Projection
(Billions of Yen)
R&D expenses Percentage of net sales
17
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.
1822
2832 34 36 38 40 42 44 46
0
25
50
03/2005 03/2006 03/2007 03/2008 03/2009 03/2010 03/2011 03/2012 03/2013 03/2014 03/2015Projection
+ 6+ 6+ 4+ 4
+ 2+ 2
(Yen)
+ 4+ 4
+ 2+ 2 + 2+ 2+ 2+ 2 + 2+ 2
+ 2+ 2+ 2+ 2
+ 2+ 2
III. Key Initiatives
1.
2.
3.
4.
Direction of Management
Restore Earnings Power
Overseas Business Growth
Improve Capital Efficiency
18
Completion of the Medium-Term Management Plan,Take Action 2014 (TA-14)
Enhance the quality of the solutionsthat we propose to customers
Make Group-wide effortsMake Group-wide efforts
Restore earnings power
Restore earnings power
Expand overseas operations
steadily
Expand overseas operations
steadily
Improve capital efficiency
Improve capital efficiency
Initiative 3Enhancing the added value of solutions to be proposed
Maintaining prices at thetime of receipt of orders
19
Initiative 1Promoting cooperation between the sales division and production division
Lowering the cost of sales ratio at the time of receipt of orders and preventing the occurrence of additional costs
Initiative 2Standardizing designs, expanding global sourcing, and building an optimum production system
Increasing cost competitiveness
(Example) S.sensingIn the Water Treatment Chemicals business, we have started a water treatment management system for optimum real-time water treatment using sensing technologies.
Guangzhou
ShanghaiSuzhou
South KoreaDalian
Tianjin
Thailand
MalaysiaSingapore
Indonesia
Taiwan
[China / South Korea]Expanding
maintenance services
[Taiwan]Cost cutting
[US] M&As[Europe] M&As
20
Water treatment chemicals locationsWater treatment facilities locations
Europe
US
Products having halal certificates
Chemicals for automobiles
Chemicals composed of food additives
Reverse osmosis membrane treatment chemicals
Cooling water treatment chemicals
Standardized water treatment facilities
2.6 2.6 2.73.3 3.5
5.2
Overseas maintenance sales
(Billions of Yen)
[Southeast Asia]Development as one area Dispatching engineers and
utilizing employees assigned fromJapan and local staff within the area
Bolstering systems Supplying strategic products to each other
03/ 03/ 03/ 03/ 03/ 03/2009 2010 2011 2012 2013 2014
21
キャッシュの創出 キャッシュの使いみち
Capital Expenditures
M&As
Dividends
Share buybacks
Operating cash flow
(For three years from the fiscal year ended March 31, 2013 to the fiscal year ending March 31, 2015 (forecast))
¥83 billion ¥83 billion
Planning a dividend increase for the 11th consecutive fiscal year
New and additional investments in the ultrapure water supply business
Investments in research and testing equipment overseas
November 1 to November 29, 2012Repurchased shares (7,493,665 shares).
August 6, 2013Cancelled all treasury stock (13,635,662 shares).
The targets are companies in North America and Europe.
Companies having a sales network and unique technologies
We will prioritize investment in businesses for growth, including investment in M&A, and will seek to increase returns to shareholders at the same time.
Uses of Cash
Generation of cash Uses of cash
22
21.0
14.9
03/2013 03/2014
- 3.8
- 0.2Increase in
SG&A expenses
Effect of raw materials
prices
Effect of change in cost of sales ratio*
+ 0.2Other
(Billions of yen)
- 2.3
* The effect of change in the cost of sales ratio is calculated using the gross profit margin.
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.
Kurita Water Industries Ltd.■URL■
■MAIL■
http://ir.kurita.co.jp/
ir@kurita.co.jp