FY2023 1Q Financial Results Presentation
Summary of Q&A Session(August 7, 2023)

Electronics & Innovative Products
Q1: According to Slide 7, the volume of spherical alumina and spherical fused silica shipped during
the first quarter decreased year on year due to a decline in demand for consumer electronics.
Could you describe the trend in sales of products for use in server components and vehicle-mountdevices?
A1: Demand for consumer electronics is indeed in a significant decline, but the volume ofshipments was relatively steady for highly functional products, such as those for use in server
components. Market demand for products for use in vehicle-mount devices is on a recovery trend
in Europe and elsewhere.
Q2: What is your projected timeline for recovery in sales of spherical fused silica, highly functionalfilms and other semiconductor-related products?
A2: The consumption of inventories of spherical fused silica and highly functional films forsemiconductor use at user companies is currently progressing and sales are expected to catch up
with actual demand going forward. In addition, we expect demand for highly functional films foruse in electronic parts to recover earlier than demand for semiconductor-use products, as theconsumption of inventories at user companies has already been progressing in the first quarter.
Life Innovation
Q3: Denka has upwardly revised its first-half operating income forecast for Life Innovation. Is that
due to robust demand for test kits currently in excess of the forecast at the beginning of the fiscal
year?
A3: We anticipate that the COVID-19 antigen test kits shipment volume will fall short of our earlier
forecast. On the other hand, due in part to the ongoing spread of influenza infections over a
prolonged period that began in the 2022 season, we believe that demand for influenza virus test
kits will exceed our estimate as will demand for simultaneous test kits for COVID 19 and influenza.
Testing demand for RS virus and A group hemolytic streptococcus is similarly growing. Accordingly,
we expect the shipment volume of other test kits to grow.

Denka Co., Ltd.

Q4: The spread of influenza infections has been ongoing from the 2022 season. Is Denka able toship 11 million rounds of influenza vaccines in line with its shipment forecast at the beginning of
the fiscal year?
A4: The production of these vaccines is steadily under way, with shipments expected to begin in
September 2023 as initially estimated. Considering that public calls for earlier vaccinations arestronger than ever, we are developing our structure to maximize the volume of products shipped
during the September–October 2023 period.
Elastomers & Infrastructure Solutions
Q5: Has the production and shipment of chloroprene rubber (CR) been affected by the accident
at the Omi Plant?
A5: Due to the impact of the accident, the volume of CR production is currently down to 70% ofusual output. However, as CR demand has been more stagnant than expected, there has been noimpact on shipments to date and we have been able to meet what demand there is by, for example,
releasing inventories. Once safety is confirmed by the accident investigation committee, thefacilities currently in suspension will resume operations. Taking these factors into account, webelieve that, going forward, CR production and shipment will remain unaffected by this accident.
Q6: Please elaborate on the factors behind the growth in repair and labor costs recorded at DPE,
a CR manufacturing subsidiary in the United States, as presented in Slide 5.
A6: While inflation has led to increases in repair, labor and other fixed costs, the aging of DPE’s
plant facilities has called for the implementation of repair and other countermeasures, which, inturn, resulted in growing expenses in relevant cost items.
Polymer Solutions
Q7: Denka has been confronting a deterioration in profitability since fiscal 2022. Whatcountermeasures do you intend to implement to improve the situation?
A7: Two years ago, we doubled our MS resin production capacity. While this move resulted inhigher depreciation costs, the MS resin facility utilization rate has yet to grow robust as the timingof the facility expansion coincided with demand stagnation. In addition, a larger proportion of
Denka’s functional resins are used in consumer electronics and general-merchandise products
than for automotive applications. Because of this, a decline in demand for consumer electronics
and general-merchandise products would have a significant immediate impact on functional resinsales. However, we believe that profitability will improve in step with recovery in demand goingforward.

Denka Co., Ltd.

Shareholder Returns
Q8: Denka has revised its first-half operating results forecasts downward while announcing that
it is putting its full-year operating results forecast under close examination. However, thelikelihood of drastic improvement is believed to be low given the harsh environment surrounding
the industry. If Denka’s full-year operating results fall short of its forecasts, would you consider
decreasing dividends to align with the target total shareholder return ratio of 50%?
A8: Once we have renewed our forecasts for full-year operating results and taken acomprehensive look at projections of Denka’s operating results for fiscal 2024 and later as well as
its market ratings and other factors, we will make a fresh announcement of our full-year dividend
forecasts.
As for interim dividends, we plan to pay \60 per share in line with the forecast at thebeginning of the fiscal year, unless first-half operating results radically deviate from the forecasts
we have just disclosed.

Denka Co., Ltd.