FY2022 1Q Financial Results Presentation
Summary of Q&A Session(August 5, 2022)
Electronics & Innovative Products
Q1. The first-half operating income forecast has been revised downward from \11.0 billion to\10.0 billion. However, the quarterly forecast shows that second-quarter operating income will
improve approximately \1.8 billion compared with the first quarter. Please elaborate on factors
supporting these forecasts in light of current circumstances.
A1. Our first-quarter operating results have been significantly affected by lockdowns in Shanghai
and by a decline in automobile production due mainly to semiconductor shortages. However,semiconductor shortages are being alleviated from July onward. Accordingly, we expect
automobile production to get on a recovery track. Moreover, a general trend toward growth in EV
demand has continued even as automobile production declined. Thus, although first-quarter
demand for our EV-related products was temporarily hampered by stagnation in partsprocurement at EV makers and other negative factors, we believe that it will continue on therecovery track we have seen since July.
Q2. Regarding ceramics-based electronic circuit substrates, it was reported that Denka’scompetitors are currently expanding their production capacities. Do you think this trend will affect
the Company’s operating results?
A2. We will remain largely unaffected by these moves because Denka and its competitors target
different countries. We market our substrates mainly to users in Japan and Europe.
Q3. With regard to acetylene black, have you seen changes in the status of competition vis-à-vis
other materials?
A3. Although acetylene black is in a competitive relationship with carbon nanotube, we have notseen a major change in our market share. Currently, market demand for cathode conductive
agents for LiBs is growing. Accordingly, we are not in a situation where two materials compete in
the same market.
Life Innovation
Q4. Did you see a major increase in the first-quarter sales volume of rapid test kits for COVID-19
antigens due to the recent resurgence of the COVID-19 pandemic?
A4. The sixth wave of the pandemic was subdued in the first quarter, with no significant uptick in
the number of infections. On the other hand, the number of infections expanded rapidly from July
onward. This emerged as the seventh wave, leading to strong demand for these test kits.

Denka Co., Ltd.

Q5. In connection with rapid test kits for COVID-19 antigens, please describe your projection forthe second half regarding the status of the COVID-19 pandemic, along with your forecast for salesof these test kits.
A5. In the second half, we do not anticipate a major outbreak of COVID-19 like that we are now
seeing amid the seventh wave. We assume that the COVID-19 pandemic will by and large besubdued. However, the spread of influenza infections is now being reported, mainly in countries
in the southern hemisphere. With this in mind, we believe that sales of combo kits for use in thesimultaneous testing of influenza and COVID-19 will remain strong and contribute to operating
results. Taking these factors into account, in the second half we expect overall sales of these kits
to edge down somewhat from first-half sales.
Elastomers & Infrastructure Solutions
Q6. Please explain the first-quarter status of chloroprene rubber (CR) sales as well as yourforecast for CR sales in the second quarter.
A6. First-quarter demand for CR has been strong, making it possible for us to raise its sales prices
in a manner more proactive than initially planned. Although we estimate that the second-quarter
sales volume of CR will remain largely unchanged from the first quarter, we anticipate a further
improvement in spreads due to progress in upward revisions of CR sales prices.
Q7. On the back of rising coal prices, other cement manufacturers are planning the introductionof a surcharge system. Given these circumstances, what initiatives does Denka intend to launch
to improve profitability?
A7. Thus far, we have not introduced a surcharge system. Having upwardly revised cement priceby \2,300/t in November 2021, we have additionally announced an upward price revision of\3,000/t on August 4, 2022.
Polymer Solutions
Q8. Please describe the first-quarter sales status of MS resin and your forecast for its sales fromthe second-quarter onward.
A8. First-quarter demand for light guiding substrates for televisions and monitors, which are theprimary application of MS resin, was weaker than estimated. Having embarked on the second
quarter, we have yet to see quick recovery in demand. Therefore, we forecast that demand willremain lower than estimated at the beginning of the fiscal year.
Other
Q9. Please provide, if any, updates on Denka’s initiatives in the business portfolio shift.
A9. We have made steady progress in structural reforms. In light of this progress, we believe that
we will be able to report tangible outcomes from these reforms by the end of December or by thetime third-quarter financial results are announced at the latest.

Denka Co., Ltd.