FY2023 2Q Financial Results Presentation
Summary of Q&A Session(November 8, 2023)

Electronics & Innovative Products
Q1: Please describe the status of competition between acetylene black and carbon nanotubes in
the field of EV-related applications.
A1: In the EV-related products field, Denkaʼs acetylene black maintains a certain degree of market
share despite competition from carbon nanotubes. Also, assessments are now under way todetermine the feasibility of the mixed-use of acetylene black and carbon nanotubes. Looking
ahead, therefore, we can expect demand for acetylene black to grow in step with theexpansion of the EV-related product market.
Q2: Denkaʼs Electronics & Innovative Products have seen profit improve from the first quarter tothe second quarter. Did demand for semiconductors used in consumer electronics bottom
out?
A2: Yes, it did, and it is now on a gradual recovery track. Demand for our special-grade products
for high-end applications was the first to show growth, reflecting expansion in the market for
high-performance semiconductors, especially those for applications related to generative AI
and other leading-edge fields.
Q3: Some manufacturers that use Denkaʼs spherical alumina in EV lithium ion batteries (LiBs) for
thermal dissipation applications recorded declines in market share in the previous fiscal year.
Could you describe the impact this has had on the Companyʼs operating results?
A3: Although our fiscal 2023 operating results are expected to be negatively affected, we are also
now seeing our user corporations regaining market share. We therefore anticipate that ouroperating results will gradually recover. Furthermore, not only do we expect growth indemand for products used in EV LiBs for thermal dissipation applications, we forecast thatdemand will similarly expand for products used in the On Board Chargers (OBCs) of EVs forsimilar applications as well as those used as semiconductor sealants for high-performancesemiconductors, which are being increasingly called upon to meet ever higher standards interms of thermal dissipation.
Life Innovation
Q4: Denka has upwardly revised its full-year operating income forecast. Does this suggest thelikelihood of an expansion in sales of simultaneous test kits for COVID 19 and influenza?
A4: While sales of the combo kits are currently growing, sales of other rapid antigen test kits forvarious infectious diseases are similarly expanding because of the increasing number of
infections with diseases other than COVID-19 and influenza. This is why our operating income
forecast was upwardly revised.

Denka Co., Ltd.

Elastomers & Infrastructure Solutions
Q5: Denka forecasts that the second half of fiscal 2023 will see Elastomers & Infrastructure
Solutions recording an operating loss of \5.9 billion, representing a deterioration from theoperating loss of \1.6 billion recorded in the first half. Could you elaborate on the factors
behind this forecast?
A5: Periodic repairs are scheduled for the second half on an annual basis and will entail expenses
of around \1.0 billion. Moreover, sales prices are expected to decline in fiscal 2023 due to theintensification of competition. These are the main factors behind our forecast. In addition,
the utilization of our hydroelectric power plants is usually higher in the first half due to theinflux of snowmelt water, which has a seasonal positive effect. Other factors contributing todifferences between first-half and second-half results include the impact of changes ininventory volumes due to acceptances and shipments.
Q6: Please describe the status of profit and loss recorded by Denka Performance Elastomer LLC(DPE), a subsidiary tasked with manufacturing chloroprene rubber (CR).
A6: DPE has seen an increase in fixed costs due to surges in repair and labor costs under theinfluence of inflation. In addition, this subsidiary has had to address the aging of its plant
equipment, with a growing number of facilities now requiring refurbishments. These
circumstances have, in turn, put ongoing pressure on the profitability of its CR business.
Overall
Q7: Denka reduced its forecast for full-year dividends from \120 per share to \100 per share.
Was the Company unable to secure funds for dividends by implementing cash-generation
measures?
A7: We did implement various measures, including the divestment of strategic cross shareholdings.
However, our forecast for fiscal 2023 operating income is now set at \19.0 billion, which falls
significantly short of the \32.3 billion in operating income recorded in the previous fiscal year.
After giving comprehensive consideration to such factors as the current status of ourshareholder returns relative to our policy of targeting a total return ratio of 50%, we
regrettably decided to reduce our full-year dividend forecast to \100 per share, which is on
par with the full-year dividend paid for the previous fiscal year.
Q8: Denkaʼs recent operating results include a notable increase in inventories. Could you namespecific businesses and products for which inventories are now growing? Also, donʼt you thinkthat the higher inventory volume could put pressure on future profit due to resulting
deterioration in the facility utilization ratio?
A8: As of September 30, 2023, the main factors contributing to the higher volume of inventories
consist of (1) the presence of influenza vaccine inventories that are soon to be shipped in thesecond half and (2) the need to secure inventories of some Electronics & Innovative Products
in anticipation of periodic repairs scheduled for the second half. Moving forward, the carryoverof fixed costs arising from inventories may depress profit somewhat from fiscal 2024 onward
when sales volumes grow. However, this will not have a major impact on operating results.
Denka Co., Ltd.