FY2018 Financial Results Presentation Summary (held on May 13, 2019）(1)

Overview of FY2018 Financial Results (year-on-year changes)(Billions of yen)
① Net sales:① Operating income:

413.1

34.2

〔+17.5〕Growth in sales volume (+3.3)
Differences in sales prices (+14.2)〔 +0.6〕Growth in sales volume 〔 +3.4〕

Electronics & Innovative Products, etc.

Improvement in spread 〔 +2.8〕 Sales prices (+16.0)
Rises in raw material and fuel prices (-13.2)
Effect of foreign exchange 〔 -0.3〕

Sales prices (-1.8)
Raw material prices, etc. (+1.5)

Other cost elements〔 -4.4〕
Periodic shutdown maintenance (SDM) of styrene monomer(SM) plant (-1.4)
Damage incurred by Denka Performance Elastomer (DPE) in
the United States due to cold wave (-1.0)
Decrease in output from the Omi Plant’s hydroelectric power
generation facilities due to water depletion (-0.6)
Other administrative and manufacturing costs (-1.4): Labor
costs, etc.

Forward-looking investments, etc. 〔 -0.9〕

Rise in R&D expenses---------------------------------------------------------------------------------Net increase due to factors listed above 〔 +0.6〕
Net sales increased thanks to sales volume growth in Electronics & Innovative Products andupward revisions in petrochemical product prices in step with rises in raw material and fuel prices.
Operating income increased due to sales volume growth and improved trade conditions together
offsetting such negative factors as costs for the periodic SDM of SM plant, the impact of a cold wavethat hit the U.S. State of Louisiana, a decline in output from the Omi Plant’s hydroelectric power
generation facilities due to water depletion and rising expenses for R&D and forward-looking
investments.

(2) FY2019 Operating Results Forecasts (year-on-year changes)(Billions of yen)
① Net sales:② Operating income:

415.0 〔 +1.9〕

Growth in sales volume (+12.9)
Differences in sales prices (-11.0)

38.0 〔 +3.8〕

Growth in sales volume 〔 +6.7〕 Electronics & Innovative Products, etc.
Improvement in spread 〔 +5.7〕 Raw material prices, etc. (+15.6)
Sales prices (-9.9)
Effect of foreign exchange 〔 -0.5〕

Sales prices (-1.1)
Raw material prices, etc. (+0.6)

Other cost elements〔 -5.8〕Absence of periodic SDM of SM plant (+1.4)
Absence of damage previously incurred by DPE in the UnitedStates due to cold wave (+1.0)
Restoration of the Omi Plant’s hydroelectric power generation
output from a decrease due to water depletion (+0.6)
Other administrative and manufacturing costs (-8.8): Laborcosts, etc.

Forward-looking investments, etc.〔 -2.4〕 Rise in R&D expenses---------------------------------------------------------------------------------Net increase due to factors listed above 〔 +3.8〕

Net sales are expected to grow due to an increase in sales of Electronics & Innovative Products
despite falling raw material prices which will, in turn, force Denka to reduce styrene-based productprices.
Operating income is expected to increase thanks to the absence of the periodic SDM of SM plantand growing sales of car electronics-related products and other Electronics & Innovative Products
offsetting rises in expenses for R&D and forward-looking investments as well as other fixed costs.
(3) Shareholder Returns
Policy on shareholder returns under the Denka Value-Up management plan: Remain committed to atargeted total shareholder return ratio of 50%; place stronger focus on cash dividends; and flexibly
execute share repurchases
Dividends per share for fiscal 2018:
Interim: \60; year-end: \60; full-year: \120; (dividend payout ratio: 42%)
Forecasts for dividends per share for fiscal 2019:
Interim: \60; year-end: \65; full-year: \125; (dividend payout ratio: 40%)(4)TopicsPursuing the specialization and global expansion of the special cement additive business/
Making a full-scale entry into the biostimulant market (the Agri-Products Dept.)
Embracing an ESG-oriented perspective, the Infrastructure & Social Solutions Div. will strive tocontribute to society through the provision of solutions with an eye to achieving three objectives:
reducing environmental burden, promoting labor saving and developing people-friendly products.
1. Pursuing the specialization and global expansion of the special cement additive businessInitiatives related to specialization
・In 1968, Denka became the first in Japan to release an expansive additive under the product nameDENKA CSA. Today, Denka boasts a longstanding track record spanning more than a half century inthe special cement additive business and is seen as a top manufacturer in this field. In addition to its
mainstay NATMIC shotcrete accelerator for tunnel construction, Denka’s product lineup includes avariety of offerings, such as the aforementioned CSA, TASCON non-shrink grout additive, SUQCEM
ultrahigh-strength fiber-reinforced concrete, ES quick-hardening accelerator for soil grouting work
and SUPER CEMENT quick hardening cement.

・Under the Denka Value-Up management plan, our special cement additives are expected to play key
roles in the priority field of high-value-added infrastructure and thus support our efforts to expand
specialty businesses. We will thus strive to raise operating income from these products to \5.0 to\6.0 billion, which will account for 10% of consolidated operating income, estimated at \50 to \60billion, in fiscal 2022.

・In Japan, we command more than 90% share in the market for shotcrete accelerator used in tunnel
construction thanks to our technological strengths in this field. Having developed the clear shot
method, which produces less dust and concrete splash, we are currently striving to promote thisproduct as one of our innovative solutions for tunnel construction.

・Denka also meets customer needs associated with infrastructure maintenance and upgrade byproviding precast concrete products, performing structure diagnosis and proposing repair methods
and other solutions. Furthermore, Denka endeavors to establish a new 3D scanning technology for
precisely analyzing and drawing the structure of important cultural properties and historical buildings.
This technology is expected to help advance the preservation, maintenance and repair of these
heritage sites.

Initiatives related to global expansion
In Asian countries, there is a growing number of projects associated with the development,maintenance and repair of roads, airports and other transportation infrastructure. With this in mind,
Denka is marketing products that boast higher durability backed by its strengths in quick-hardening
technologies, striving to differentiate itself from competitors. At the same time, the Company isforming partnerships with local companies to establish effective footholds and expand operations.

In Europe, Denka optimizes its regional business approach in light of stronger public awarenesstoward environmental load reduction. To this end, the Company proposes and provides such
solutions as those aimed at reducing CO2 emissions via the use of mixed cement, which employs
tunnel construction-related expertise accumulated over the long course of Denka’s domestic
operations. In doing so, Denka is also acting in collaboration with local partners.

Future outlook

We will contribute to infrastructure development in countries around the world by providing
high-quality and high-value-added products, developing and commercializing unique technologies
and acting in partnership with local companies. In these ways, we will meet the latest needs forsolutions aimed at helping infrastructure developers reduce environmental burden, promote laborsaving and achieve higher durability.

2. Making a full-scale entry into the biostimulant market
The current state of the biostimulant market


Biostimulants are defined as “substances and microorganisms that positively affect the soundgrowth of plants and help enhance their quality in terms of such properties as crop yield.” Due toglobal warming and other climate change-related phenomena, there are growing instances where
farmers experience serious crop damage. Against this backdrop, biostimulants are attracting
attention in regions around the globe and seen as a potential solution to alleviate the impact of these
phenomena. The global biostimulant market was valued at \240 billion in 2018 and is expected to be
worth \360 billion in 2022.

Denka’s biostimulants
Denka has been marketing two biostimulants, namely, AZUMIN humic acid fertilizer and a liquidfertilizer, the application of made via AZUMIN’s humic acid technologies. Unlike orthodox fertilizer
production methods, which rely on weathered coal as a raw material, Denka’s method harnesses thereaction of brown coal and nitric acid. This results in humic acid with a distinctive molecular structurethat is believed to significantly invigorate crop growth.

Growth strategies
Currently, the majority (approximately 65%) of the global biostimulant market is accounted for byliquid fertilizers capable of bringing extremely quick results. Accordingly, Denka has positioned andis actively promoting its liquid humic acid fertilizers as a strategic product category to penetrate theglobal market. Denka is currently engaged in R&D aimed at maximizing the potential of its
technological assets, with plans to take advantage of its unique humic acid-based products andthereby expand operations in the promising biostimulant market. Simultaneously, the Company isseeking to form a global alliance that would help it develop robust its marketing.

Although we expect our fiscal 2019 sales of biostimulants to total nearly \2.0 billion, we aim to raisesales of these products to \10.0 billion by fiscal 2025.

Through the biostimulant business, we will also contribute to the sustainable development of society
by helping address such pressing global issues as the need for increased food production andcountermeasures against climate change.