FY2021 3Q Financial Results Presentation Summary(February 7, 2022)(1)

Overview of FY2021 3Q Financial Results (year-on-year changes)
Through the implementation of the Denka Value-Up management plan initiatives, Denka achieved a
new record high in terms of profit for the first nine months.
(Billions of yen)
① Net sales:

284.0 (+22.0):

Increase in sales volume (+17.5)
Differences in sales prices (+26.7)
Impact of the revision of Accounting Standard for
Revenue Recognition (-22.3)② Operating income:32.2 (+4.2):

Changes in sales volume (+10.2):

Growth in demand for EV related products andsemiconductor related products
Sales increased for test reagents such as rapid test kits
for COVID-19 antigens (including supply to thegovernment) and inflammation markers, while sales ofinfluenzavaccinesdecreasedduetoweakening

productivity.
Demand recovered from the negative impact of COVID19 (chloroprene rubber (CR), etc.)
Differences in sales prices (+26.7):

Upward revision of styrene-based product prices in stepwith rises in raw material prices, etc. (including +4.6
attributable to foreign exchange fluctuations)Differences in manufacturing costs (-26.7):

Rises in raw material prices, etc. (including -2.5
attributable to foreign exchange fluctuations)

Other differences in costs (-6.1):(+4.2)

Fixed costs, etc.
Net increase due to the factors listed above

Maintaining robust spreads through flexible product price revisions in response to higher raw material prices,
we achieved profit growth as sales volume increased on the back of recovery, expansion and growth indemand.

Denka Co., Ltd.

(2)Forecasts for Full-Year Operating Results for FY2021 (comparisons withforecasts as of November 2021)
Although the latest forecasts were revised downward from forecasts as of November 2021, we expect
each profit indicator to beat our record high.
(Billions of yen)
① Net sales:

385.0 (-10.0):

Changes in sales volume (-6.5)
Differences in sales prices (-3.5)② Operating income:40.0 (-4.0)

Changes in sales volume (-0.9): Positive factor: Increasing demand for COVID-19 rapid
antigen test kits
Negative factors: Opportunity loss due to reduced DPE
production, reduced demand for functional resins
Differences in sales prices (-3.5):
Positive factor: Additional upward revisions of CR, Povaland other product prices
Negative factors: Reduced insurance points for COVID19 rapid antigen test kits(including -0.2 attributable to foreign exchange
fluctuations)Differences in manufacturing costs (-0.5): Rises in raw material prices, etc. (including +0.1
attributable to foreign exchange fluctuations)
Other differences in costs (+0.9):
Other manufacturing and administrative costs, etc.
(-4.0) Net decrease due to the factors listed above
Despite growth in the shipment volume of COVID-19 rapid antigen test kits on the back of growing
testing demand, changes in sales volume are expected to result mainly from the loss of business
opportunities due to production decrease at DPE and a decline in demand for functional resins, causing
our latest forecast to be \0.9 billion lower than the previous forecast. Differences in sales prices areexpected to result in a \3.5 billion decrease in profit due primarily to the downward revision of healthinsurance points allocated to novel coronavirus antigen testing, despite the scheduled additional
upward revisions of CR and other product prices. Overall, we revised our operating income forecast
downward by \4.0 billion.

(3)

Shareholder Returns
Although full-year operating results forecasts have been lowered, our fiscal 2021 annual dividend
forecast remains unchanged from \145 per share, based on our policy of targeting a total return ratioof 50%.
Fiscal 2020 dividends:\125 per share (interim: \60; year-end: \65); dividend payout ratio: 47%
Revised forecasts for dividends per share for fiscal 2021:\145 per share (interim: \70; year-end: \75); dividend payout ratio: 48%

Denka Co., Ltd.

(4)Fiscal 2022 Numerical Targets under Denka Value-Up (year-on-year changes)
Fiscal 2022 numerical targets: Operating income of \50.0 billion
Breakdown by segment
Electronics & Innovative Products:\22.0 billion (+\ 3.5 billion)
Life Innovation:\11.0 billion (- \ 3.5 billion)
Elastomers & Infrastructure Solutions: \ 7.0 billion (+\10.5 billion)
Polymer Solutions:\11.0 billion (+\ 2.5 billion)
Others:-\ 1.0 billion (- \ 3.0 billion)--------------------------------------------------------------------------------Total\50.0 billion (+\10.0 billion)
To achieve operating income of \50.0 billion, we will continue to push ahead with our strategy ofincreasing outstanding global competitiveness backed by a robust portfolio of specialty businesses andproducts under the Denka Value-Up management plan.

(5) Summary of Q&A Session① Trends in demand for Electronics & Innovative Products⚫
At the time of the November 2021 announcement of our previous forecasts, we had assumed thatdemand for acetylene black, ceramics-based electronic circuit substrates and HITTPLATE, all of whichhave been affected by reduced automobile production on the back of semiconductor shortages, would
recover sometime in the January–March 2022 period. However, this assumption has yet to come intoplay due mainly to resurgences of the novel coronavirus pandemic and worldwide logistics disruption.
We currently expect to see recovery during fiscal 2022.
⚫
Although spherical alumina was similarly affected by reduced automobile production, we expect
shipping volume to live up to our November forecast since sales remained robust for offerings for arange of applications, such as 5G communications devices and semiconductor encapsulant fillers.
②⚫

Status of sales and production of COVID-19 rapid antigen test kits
As we aim to supply as many testing kits as possible in response to the rapid surge in demand, we areplanning to further augment our production system, which is currently operating at full capacity. We
will not slow down the pace of supply before the end of March 2022. At present, we assume that testing
demand will peak sometime during February 2022.

③ Performance outlook for Elastomers & Infrastructure Solutions⚫
DPE, a CR production base in the United States, has been affected by Hurricane Ida, which disrupted
the upstream supply chain and caused DPE to suspend facility operations. In addition to our November
2021 estimate that the hurricane’s impact on profit would roughly amount to -\2.5 billion, we currently
expect to also record about -\1.5 billion as the resumption of DPE facilities has been delayed beyond
our assumption when the November forecasts were announced. (This brings our estimate toapproximately -\4.0 billion in total.)⚫
We have steadily revised product sales prices upward in step with rises in raw material prices (seegraphs on page 19 of the presentation material). However, we still expect higher raw material prices
to exert a negative impact on fiscal 2021 operating results as there will be time lags until revised sales
prices take effect.
④ Status of the business portfolio shift⚫
Multiple projects with specific goals are currently progressing.
⚫
We aim to disclose tangible outcomes of the business portfolio shift by the end of fiscal 2022.
⚫
Denka’s portfolio includes no operation whose marginal profit ratio is negative. Accordingly, the businessportfolio shift is not necessarily expected to yield immediate growth in profitability. We therefore takea medium- to long-term perspective in our pursuit of a further shift to high-profitability businesses
through specialization.
Denka Co., Ltd.