FY2020 1Q Financial Results Presentation Summary(Held on August 7, 2020)(1)

Overview of FY2020 1Q Financial Results (year-on-year changes)① Net sales:(Billions of yen)
Decrease in sales volume (-9.1)

76.2 (-14.7)

Differences in sales prices (-5.5)② Operating income:4.4(-2.3)

Decrease in sales volume (-3.4):

Impact of the novel coronavirus pandemic (-2.5)
Chloroprene rubber (CR), etc. (-0.9)

Improvement in spread(+0.8): Decreases in raw material prices, etc. (+5.7)
Decreases in sales prices (-4.9)

Effect of foreign exchange (-0.3): Sales prices (-0.7)
Raw material prices, etc. (+0.4)
Other cost elements(+1.0):

Other administrative and manufacturing costs, etc.

Forward-looking investments, etc. (-0.3): Rise in R&D expenses, etc.
--------------------------------------------------------------------------------(-2.3)

Net decrease due to factors listed above① Net sales decreased due to a decline in demand reflecting the fallout from the novel coronavirus
pandemic as well as the impact of downward revisions of sales prices of styrene-based products instep with plunges in raw material prices.
② Operating income fell \2.3 billion from the same period of the previous fiscal year to \4.4 billion.
A decline in sales volume due to the spread of the novel coronavirus and other factors resulted in a
\3.4 billion decrease in profit. However, spreads improved due to efforts to maintain selling prices
despite the decline in raw material prices. And fixed costs, such as administrative and manufacturingcosts, decreased.

(2) First-Half Operating Results Forecasts for FY2020 (year-on-year changes)
Although Denka refrained from releasing its first-half operating results forecasts at the beginning offiscal 2020 due to the pandemic, the Company is now able to disclose a forecast.
In addition, despite a lingering sense of uncertainty regarding the future outlook due to thepossibility of resurgence of the novel coronavirus, our full-year operating results forecasts areunchanged from initial forecasts disclosed in May 2020.
(Billions of yen)
Net sales:(Apr. – Sep.)
160.0 (-32.0)
Differences in sales volume (-19.6)
Differences in sales prices (-12.3)

Operating income:

12.0(-3.3)
Differences in sales volume (-6.7)
Differences in sales prices (-12.3)
Differences in costs, etc. (+15.7)

Ordinary income:

12.0(-2.5)First-half profit:

10.0(-0.9)

Denka Co., Ltd.

(3) Assumptions used to formulate full-year operating results forecasts
Initial forecasts
The effect of the novel coronavirus pandemic will gradually taper off from the second quarter
onward and economic activity will be largely normalized in the second half.
Variable factors that subsequently affected the forecasts
Worse:
In the first half, the pandemic’s impact on the performance of some key offerings, such as CR,
will get worse than initial estimates.

Performance of these key offerings may continue to be affected by the pandemic even in thesecond half.

Better:Semiconductor-related products, such as fused silica and highly functional films, will perform
more robustly due to growth in 5G-related demand and an increase in data center-related
product needs.

Reviews of administrative expenses and fixed costs arising from plant operations will help
improve consolidated operating results.

Although the planned release of novel coronavirus rapid test kits is expected to contribute tooperating results, contributions by these products have yet to be reflected in forecasts.

Same:


A megatrend toward the popularization of EVs will remain in place over the medium to longterm, supporting demand for EV-related products, including spherical alumina, acetylene blackand ceramics-based circuit substrates, and contributing to growth in their performance in thesecond half.

Sales of influenza vaccines in the 2020-2021 season are expected to remain virtuallyunchanged from a year earlier.

Despite an extremely harsh operating environment, we will gear up the execution of growth strategies
under the Denka Value-Up management plan and pursue “a company that is genuinely needed bysociety" via the across-the-board implementation of our policy on workstyle reforms, which wasestablished in July 2020, to improve productivity.
We will thus rally our overall strengths to live up to our initial forecasts for full-year operating results.

(4) Shareholder Returns
Forecasts for dividends per share for fiscal 2020:
Interim : \60 (We were undecided at the Initial forecasts.)
year-end: undecided as developments related to the pandemic may significantly affect our operatingresults.
However, our policy of working to achieve a total shareholder return ratio of 50% remains constant.

Denka Co., Ltd.

(5) Summary of Q&A Session① Status of demand for Elastomers & Performance Plastics and future outlook
・ Although our chloroprene rubber (CR) business faced a harsh situation in the first quarter due tostagnant demand, we have seen signs of recovery from June onward. Despite a strong sense of
uncertainty regarding the future outlook, we expect CR demand to recover somewhat.
・ Our policy of maintaining CR product prices remains unchanged. In addition, we have positioned CR asa specialty rubber.
・ Despite plunges in prices of raw materials in the first quarter, we have nevertheless succeeded inmaintaining sales prices of some styrene-based resin products even in the second quarter. As a result,the spread between raw material and product prices has improved.
② Future outlook for Infrastructure & Social Solutions
・ In the first quarter, we have seen delays in the signing of contracts for some construction projects,
which would have otherwise contributed to sales of special cement additives. Moreover, the volume ofrecycled materials accepted by our cement manufacturing facilities has temporarily decreased.
However, we anticipate that, from July onward, these operations will begin to recover.
③ Status of demand for Electronics & Innovative Products and future outlook
・ In the first quarter, some of our users sought to secure spare inventories of such offerings as highly
functional films, which are used as embossed carrier tape for semiconductors, in preparation forpossible supply chain disruptions. However, the volume of orders received for these products has
currently returned to normal levels.
・ Demand for EV-related products, including ultra-pure acetylene black and spherical alumina, weakened
in the first quarter due to the global stagnation that idled operations at some automobile production
facilities. However, as we have seen recovery in Europe, China and elsewhere, we expect demand togrow going forward into the second quarter.
④ Future outlook for Life Innovation
・ The volume of fiscal 2020 influenza vaccine shipments is expected to remain virtually unchanged froma year earlier. As medical associations and other specialist organizations recommend earlier vaccination,
we are more focused than ever on increasing shipments in September. Accordingly, sales of thesevaccines are factored into our first-half operating results forecasts.
・ As for diagnostic reagents, sales of inflammation markers in China are likely to fall short of ourestimation at the beginning of the fiscal year due to a trend in some regions of avoiding hospital visits.
In terms of full-year operating results, however, we expect the volume of shipments of these offerings
to eventually expand year on year, due to ongoing demand in the market.
・ Our capacity to produce novel coronavirus rapid test kits amounts to 10,000 kits (for 100,000 roundsof diagnostic tests) per day at maximum. However, considering the latest number of domestic infection
cases, we currently do not expect that demand for these test kits will be high.
・ The success of these rapid test kits hinges on whether they become popular among private-practicephysicians who run clinics, our primary target customers.
Reference: A press release issued on August 11, 2020, following the teleconference,“Approval for Manufacturing and Marketing of COVID-19 Rapid Antigen Test in Japan~ QuickNavi™- COVID19 Ag to be distributed to Japanese Medical Institutions starting on August 13 ~”https://www.denka.co.jp/eng/storage/news/pdf/291/20200811_denka_quicknavi_covid19ag_en.pdf⑤ Other・ In the first quarter, inventory volume grew from the same period of the previous fiscal year due to adecline in shipments reflecting the fallout from the novel coronavirus pandemic. In addition, inventory
volume maintained by Denka tends to grow in the first quarter of the fiscal year as the Company takes
advantage of the seasonal operations peak at its hydroelectric power generation facilities in order toproduce calcium carbide chain products at lower costs. This results in a temporary rise in production
volume and constitutes a seasonal factor that is unique to Denka. Moreover, the initiation of influenza
vaccine production also contributes to growth in inventories. Despite the factors described above, weexpect that inventory volume will decrease and be maintained at an appropriate level from July onward.
Accordingly, its impact on consolidated operating results is insignificant.

Denka Co., Ltd.