Summary of Consolidated Financial Results
February 5, 2021
Denka Company Limited

1. Consolidated Financial Results and Forecast（¥ billions）

FY 2020
Apr to Dec

FY 2019
Apr to Dec

FY 2020
Forecast
Apr to MarIncr.
Decr.

FY 2019
ActualApr to Mar

Net Sales

262.0

288.7

- 26.7

350.0

380.8

Operating Income

28.0

24.0

4.0

33.0

31.6

Ordinary Income

27.3

22.7

4.6

30.0

30.0

Net Income attributable to Owners of parent

18.9

16.7

2.2

22.0

22.7

2. Overview (year-on-year comparisons)To realize the corporate philosophy enshrined in The Denka Value, the Denka Group set up a threefold growth vision designed tocreate a “Specialty-Fusion Company,” “Sustained Growth” and “Sound Growth” through the execution of Denka Value-Up, amanagement plan spanning a period of five years beginning in April 2018. To this end, the Group has been promoting the plan’s
two growth strategies, namely, the business portfolio shift and the introduction of innovative processes, aiming to expand its
operations and enhance profitability.
In the first nine months of the fiscal year ending March 31, 2021, the Group’s operating results were negatively affectedby revisions of styrene-based product sales prices in step with plunges in raw material prices. Moreover, the shipping volume ofsome mainstay products was stagnant due to the novel coronavirus pandemic. From the second quarter onward, however, theGroup saw demand show signs of recovery from the decline attributable to the pandemic’s fallout. Consequently, consolidated net
sales totaled ¥262.0 billion, down ¥26.7 billion, or 9.2%, compared with the same period of the previous fiscal year.
On the earnings front, some mainstay products, including chloroprene rubber (CR) and diagnostic reagents, have been
subject to the negative impact of pandemic fallout. On the other hand, the shipping volume of spherical alumina, ultra-high purity
electro-conductive carbon black and other EV-related products was robust. Furthermore, due to growing demand associated with
the introduction of 5G infrastructure as well as an increase in data center-related product needs worldwide, the shipping volumeof semiconductor-related products (e.g. highly functional films for use as embossed carrier tapes for electronic components andsemiconductors, and fused silica fillers for use as semiconductor encapsulant fillers) exceeded the level recorded in the same
period of the previous fiscal year. In addition, the Group launched sales of QuickNavi™-COVID19 Ag, a rapid diagnostic testing kit
for detecting novel coronavirus antigen, in August 2020. This testing kit greatly contributed to the Group’s operating results.
As a result, operating income rose ¥4.0 billion, or 16.7%, year on year to ¥28.0 billion. Ordinary income was ¥27.3 billion,
up 20.2% year on year, while profit attributable to owners of the parent was ¥18.9 billion, up 13.1% year on year.
From the third quarter onward, recovery in CR demand has been more robust than estimated and the Group has also
seen growing demand in the environment and energy field. However, the Group decided not to revise its full-year operating
income forecast of ¥33.0 billion in light of the current resurgence of the virus and resulting uncertainty in future outlook.
3. Assumptions
FY 2020
Apr to Dec

FY 2019
Apr to Dec

FY 2020
Forecast
Apr to Mar

Incr.
Decr.

FY 2019
ActualApr to Mar

Investment31.7

26.5

5.2

45.0

36.9

Depreciation

17.2

16.6

0.6

23.0

22.5

R&D

11.1

11.2

- 0.1

16.0

15.0

Interest-Bearing Debt

140.0

126.8

13.2

141.0

134.3

FY 2020
Apr to Dec

FY 2019
Apr to Dec

FY 2020
Forecast
Apr to Mar

FY 2019
ActualApr to MarForex（¥/$）

106.1

109.1

106.1

109.1

Japan Naphtha（¥/KL）

29,36042,60030,15042,6504. Results by Segment (year-on-year comparisons)
Elastomers & Performance Plastics
Sales of MS resin for use in light guiding substrates for televisions and monitors and other applications was firm. However, segment
income was down year on year because of the significant impact of fallout from the novel coronavirus pandemic on CR sales during
the first half.
Although recovery in demand for CR is expected to continue in the fourth quarter, the Group believes that full-year
segment income will decrease year on year.
Infrastructure & Social Solutions
Segment income decreased despite the positive effects of the Group’s efforts to maintain product prices after the recent upwardrevisions. This was mainly attributable to declines from results seen in the same period of the previous fiscal year in sales ofcement, special cement additives, fertilizers, fire-resistant materials and steelmaking materials due to the pandemic’s fallout andthe influence of unfavorable weather.
In the fourth quarter, the Group will nevertheless continue to maintain the product prices while pushing ahead with cost
reduction efforts as it strives to secure operating income in terms of full-year operating results.
Electronics & Innovative Products
As the Group was buoyed by growing demand associated with the global introduction of 5G infrastructure and an increase in data
center-related product needs worldwide, robust sales of highly functional films for use as embossed carrier tapes for electronic
components and semiconductors exceeded results recorded in the same period of the previous fiscal year, as did sales of fusedsilica fillers for use as semiconductor encapsulant fillers. Similarly, sales of spherical alumina and ultra-high purity
electro-conductive carbon black for use in EV-related applications were up year on year. Thanks to these factors, segment incomeincreased.
As the Group anticipates that the shipping volume of EV- and semiconductor-related products will remain robust in thefourth quarter, segment income is expected to increase year on year in terms of full-year operating results.
Living & Environment Products
Although demand for plastic rain gutters, TOYOKALON synthetic wig fibers and industrial tapes returned to a recovery track fromthe decline induced by the pandemic, the sales volume for these products was still down year on year. However, thanks to growing
demand for takeaway food services, overall sales of food packaging sheets and processed products using such sheets largely
remained firm. Moreover, plunges in raw material prices and a reduction in fixed costs contributed to segment results. Taking theseand other factors into account, segment income rose from the same period of the previous fiscal year.
Despite a projection that segment results could be affected by rising raw material prices in the fourth quarter, the Group
expects segment income to increase year on year in terms of full-year operating results.
Life Innovation
The shipping volume of influenza virus rapid diagnostic testing kits was down from the same period of the previous fiscal year. On
the other hand, the shipping volume of influenza vaccines increased year on year as medical specialists and authorities issued
earlier-than-usual recommendations regarding vaccination. Moreover, the August 2020 release of QuickNavi™-COVID19 Ag, a rapid
diagnostic testing kit for detecting novel coronavirus antigen, contributed to segment results. Consequently, operating income forthe first nine months rose significantly from the same period of the previous fiscal year.
Because of the contribution of QuickNavi™-COVID19 Ag, full-year segment income will grow year on year.

Net Sales and Operating Income by segments

Elastomers &Performance Plastics

Infrastructure &Social Solutions

Electronics &Innovative Products

Living & Environment
Products

FY 2020
Apr to Dec

FY 2019
Apr to Dec

FY 2020
Forecast
Apr to Mar

Incr.
Decr.

FY 2019
ActualApr to Mar

Net Sales

86.4

112.1

- 25.7

115.0

149.3

Operating Income

2.2

8.2

- 5.9

3.0

10.9

Net Sales

38.4

41.3

- 2.9

52.0

54.8

Operating Income

0.1

0.4

- 0.2

0.5

0.3

Net Sales

51.5

49.9

1.6

70.0

68.0

Operating Income

10.1

8.5

1.6

13.0

12.4

Net Sales

25.6

28.1

- 2.5

33.0

37.0

Operating Income

1.1

0.01.1

1.00.1Net Sales

36.6

28.7

7.9

46.0

35.5

Operating Income

13.8

6.3

7.5

15.0

7.0

Net Sales

23.5

28.5

- 5.0

34.0

36.2

Operating Income

0.7

0.7

0.0

0.5

0.9

Net Sales

262.0

288.7

- 26.7

350.0

380.8

Operating Income

28.0

24.0

4.0

33.0

31.6

Life innovation

Others/Companywide

Total

Net Sales
Net Sales by segments

FY 2020
Apr to Dec

FY 2019
Apr to Dec

Incr.
Decr.

Sales priceSales volume

Elastomers & Performance Plastics

86.4

112.1

- 25.7- 17.6- 8.1

Infrastructure & Social Solutions

38.4

41.3- 2.90.3- 3.2

Electronics & Innovative Products

51.5

49.9

1.6

- 1.2

2.8

Living & Environment Products

25.6

28.1

- 2.5

- 1.1

- 1.5

Life innovation

36.6

28.7

7.9

- 0.1

8.0

Others/Companywide

23.5

28.5

- 5.0

―- 5.0

Total

262.0

288.7

- 26.7- 19.7- 7.0

Operating income
Incr.
Decr.
Sales priceSales volume

cost & others

Operating income by segments

FY 2020
Apr to Dec

FY 2019
Apr to Dec

Elastomers & Performance Plastics

2.2

8.2

- 5.9

- 17.6

- 4.0

15.7

Infrastructure & Social Solutions

0.1

0.4

- 0.2

0.3

- 1.0

0.4

Electronics & Innovative Products

10.1

8.5

1.6

- 1.2

2.0

0.8

Living & Environment Products

1.1

0.0

1.1

- 1.1

- 0.8

3.0

Life innovation

13.8

6.3

7.5

- 0.1

8.6

- 1.0

Others/Companywide

0.7

0.7

0.0

―0.1

- 0.1

Total

28.0

24.0

4.0

- 19.7

5.0

18.7