Financial Results Briefing for the Six Months
Ended September 30, 2022
Kanto Denka Kogyo Co., Ltd.
(Tokyo Stock Exchange Prime Market, Securities Code: 4047)

November 22, 2022

Contents

I Overview of Financial Results for the Six Months
Ended September 30, 2022
II Business Outlook and Future Trends
III Supplementary Materials© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2

I Overview of Financial Results for the Six Months
Ended September 30, 2022

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

3

Key Earnings Data Record highs were registered for net sales and each profit indicator for Q2.
 Sales remained strong. In the Fine Chemicals Division, sales volume was up, withsales increasing significantly as hikes in raw material and fuel prices were passed
on to product prices. The Fundamental Chemicals Division also benefited fromprice revisions.
 Regarding costs, prices of raw materials and fuels such as lithium compounds,electricity, tungsten and anhydrous hydrofluoric acid increased.
 Although fluorochemicals for semiconductors were unaffected by changes in themarket environment in Q2, it is important to monitor developments closely.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

4

Statement of Income(Billions of yen)

H1 FY2021

H1 FY2022

Difference% change

Net sales

28.2

37.3

9.1

32.3

Operating profit

4.4

6.5

2.1

48.9

Ordinary profit

4.3

7.3

2.9

67.6

Profit before income taxes

4.3

7.1

2.8

65.0

Profit attributable to owners of parent

3.0

5.1

2.1

71.2

52.8

90.4

37.6

Basic earnings per share (yen)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

5Balance Sheet(Billions of yen)

FY2021H1 FY2022

Difference% change

AssetsCash and deposits
Trade receivables
Inventories
Non-current assets (tangible + intangible)

109.9

114.9

5.0

4.6

26.7

18.5

–8.2

–30.7

18.0
13.1

20.2
17.7

2.2
4.5

12.2
34.9

38.9

44.8

5.8

15.1

Liabilities
Interest-bearing debt
Trade payables
Income taxes payable

49.9

49.3

–0.6

–1.4

30.9

29.0

–1.8

–6.1

8.9

10.0

1.1

12.8

2.6

2.1

–0.4

–16.9

Net assets
Equity ratio (%)

59.9

65.6

5.7

9.6

53.0%

55.7%

2.7%

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

6Fundamental Chemicals Division(Billions of yen)

H1 FY2021

Net sales
Operating profit (loss)

H1 FY2022

Difference

3.7

4.1

0.3(0.08)

0.08

0.16

Net sales・ Caustic soda: Sales increased due to effects from price revisions, despite lower sales volumes
・ Hydrochloric acid: Sales increased due to effects from price revisions, despite lower sales volumes
・ Trichloroethylene: Sales increased due to effects from price revisions, despite lower sales volumes
・ Perchloroethylene: Sales increased due to effects from price revisions, despite lower sales volumes
Operating profit (loss)
・There was a turnaround to profitability on the back of price revisions, despite rising raw material and fuelprices.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

7

Fine Chemicals Division(Billions of yen)

H1 FY2021

H1 FY2022

Difference

Net sales

21.9

30.3

8.3

Operating profit

3.9

6.0

2.0

Net sales
・ Nitrogen trifluoride: Sales increased due to higher sales volumes and effects from price revisions
・ Tungsten hexafluoride: Sales increased due to higher sales volumes
・ Hexafluoro-1,3-butadiene: Sales increased due to higher sales volumes
・ Lithium hexafluorophosphate: Sales increased due to higher sales volumes and effects from price revisions
Operating profit
・Profit increased on the back of higher sales despite rising raw material and fuel prices© Kanto Denka Kogyo Co., Ltd. All rights reserved.

8

Ferrochemicals, Commercial Business, Facilities Divisions(Including consolidation adjustments)(Billions of yen)

H1 FY2021

H1 FY2022

Difference

Net sales

2.4

2.80.3Operating profit

0.5

0.4

-0.0

Ferrochemicals
Sales and profit were up due to increased sales of carriers
Commercial Business
Unchanged year on yearFacilities
Sales and profit were up due to more contract work at Jobi Engineering, a consolidated subsidiary© Kanto Denka Kogyo Co., Ltd. All rights reserved.

9Consolidated Operating Profit: Difference Analysis(H1 FY2021 vs. H1 FY2022）(Billions of yen)1412–6.39

10+9.17–0.12

8–0.49
64
7.07
2

4.41

4.41

(Previous year)
Operating profit

Sales/production

6.54

6.58

0© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelpricesDepreciation

Other(Current year)
Operating profit

10

Operating Profit and Operating Profit Margin Over Time(Consolidated)(Billions of yen)
1217.6%

100

17.9%

17.1%

Operating profit

16.0%

Operating profit margin

14.0%

810.9%
64

12.0%
10.0%

11.1
9.0

20.0%
18.0%

14.4%

0

17.6%

8.0%

9.4
7.7

6.5

5.6

6.0%
4.0%

2

2.0%
0

0.0%

FY2017FY2018© Kanto Denka Kogyo Co., Ltd. All rights reserved.

FY2019FY2020

FY2021

FY2022(Until Q2)

11

Capital Investment and Depreciation Over Time(Consolidated)(Billions of yen)
Capital investment

20Depreciation
169.3

12H2 target

84

10.2
6.1

10.1
5.4

5.0

4.3

4.3

12.2
8.4

6.7

6.6

8.0

H2 target

3.30Investment Depreciation Investment Depreciation Investment Depreciation Investment Depreciation Investment Depreciation Investment Depreciation
FY2017FY2018© Kanto Denka Kogyo Co., Ltd. All rights reserved.

FY2019FY2020

FY2021

FY2022

12

The Kanto Denka Group (Consolidated Subsidiaries)(Billions of yen)
CapitalShare ofinvestment (%)

Net sales:
H1 FY2022

Year-onyear change

Major business linesKanden Kosan Co., Ltd.

¥10 mil.

100.0

4.9

1.1

Sale of chemical products, maintenanceof containers, insurance agency services

Jobi Engineering Co., Ltd.

¥120 mil.

49.4

3.1

0.9

Manufacture, processing, and repair ofchemical industry equipment

Morishita Bengara Kogyo Co.,Ltd.

¥27 mil.

100.0

0.3

–0.0 Manufacture and sale of iron oxide

Kanto Denka Korea Co., Ltd.

300 mil. won

100.0

7.0

0.9 Sale of fluorine products

Taiwan Kanto Denka Co., Ltd.

7 mil. NT dollars

100.0

3.3

1.0 Sale of fluorine products

Kanto Denka Fine Products
Korea Co., Ltd.

42.0 bil. won

100.0

1.40.3

Manufacture and sale of fluorine
products

Xuancheng KDK TechnologyCo., Ltd.

50 mil. dollars

98.3

——

Manufacture and sale of fluorine
products

20.3

4.3

Total
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

13

Business Segments
NameProducts and services

Inorganic products

Caustic soda, hydrochloric acid, sodium hypochlorite, aluminum chloride, etc.

Organic products

Trichloroethylene, perchloroethylene, vinylidene chloride, cyclohexanol, etc.

Fine Chemicals

Fluorine products

Sulfur hexafluoride, carbon tetrafluoride, trifluoromethane,hexafluoroethane, nitrogen trifluoride, hexafluoro-1,3-butadiene,
octafluorobutane, tungsten hexafluoride, silicon tetrafluoride, chlorine
trifluoride, octafluorocyclobutane, monofluoromethane, carbonyl sulfide,iodine pentafluoride, lithium hexafluorophosphate, lithium
tetrafluoroborate, etc.

Ferrochemicals

Ferrochemical products

Carriers, magnetite, pigments, iron oxide, etc.

Commercial
Business

Kanden Kosan Co., Ltd.

Sale of chemical products, maintenance of containers, insurance agency
services, etc.

Facilities

Jobi Engineering Co., Ltd.

Factory plant construction, plant facility maintenance work, etc.

Fundamental
Chemicals© Kanto Denka Kogyo Co., Ltd. All rights reserved.

14

II Business Outlook and Future Trends© Kanto Denka Kogyo Co., Ltd. All rights reserved.

15

Performance Forecast By Segment (Consolidated)(Billions of yen)

Net sales
FY2021(results)

FY2022(initialforecast)

Operating profit
FY2022(revisedforecast)

FY2021(results)

FY2022(initialforecast)

FY2022(revisedforecast)

Fundamental
Chemicals

7.9

8.1

8.9

-0.0

0.1

0.3

Fine Chemicals49.0

61.9

67.5

10.0

9.7

11.0

Other*

5.3

6.0

5.9

1.1

1.1

1.0

Total

62.2

76.0

82.3

11.1

10.9

12.3

Capitalinvestment

12.2

15.8

17.4

Depreciation

6.6

8.8

7.7

R&D expenses

1.4

1.4

1.2

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Assumption for Performance Forecast
USD/JPY Rate: ¥130*"Other" includes the Ferrochemicals,Commercial Business, Facilities Divisions, andconsolidation adjustments.

16Performance Forecast By Segment (Consolidated):
H1 Forecast vs. Results(Billions of yen)

Net sales

Operating profitH1 (forecast)

H1 (results)

Difference

H1 (forecast)

H1 (results)

Difference

Fundamental
Chemicals

4.1

4.1

0.0

0.0

0.0

0.0

Fine
Chemicals

29.0

30.3

1.3

4.6

6.0

1.4

Other*

3.1

2.8

-0.2

0.7

0.4

-0.2

Total

36.2

37.3

1.1

5.3

6.5

1.2

*"Other" includes theFerrochemicals, Commercial
Business, Facilities Divisions, andconsolidation adjustments.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

17

Consolidated Operating Profit: Difference Analysis(H1 Initial Forecast vs. H1 Results)
8.00(Billions of yen)
7.00

+2.36

–1.65
+0.36

6.00

+0.21

5.00

6.58
4.00

5.30
3.00

2.00
(Forecast)
Operating profit

Sales/production© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelpricesDepreciation

Other(Results)
Operating profit

18Performance Forecast By Segment (Consolidated):
H1 vs. H2(Billions of yen)

Net sales

Operating profit

H1 (results)

H2 (forecast)Difference

H1 (results)

H2 (forecast)Difference

Fundamental
Chemicals

4.1

4.7

0.6

0.0

0.2

0.1

Fine Chemicals

30.3

37.1

6.8

6.0

4.9–1.0

Other*

2.8

3.0

0.1

0.4

0.5

0.0

Total

37.3

44.9

7.6

6.5

5.7

–0.8

Capitalinvestment

8.0

9.3

1.2

Depreciation

3.3

4.3

1.0

R&D expenses

0.6

0.6

0.0

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

*"Other" includes the Ferrochemicals,Commercial Business, Facilities
Divisions, and consolidation
adjustments.

19

Consolidated Operating Profit: Difference Analysis(H1 Result vs. H2 Forecast)
12.0
Billions of yen
10.0

+4.40

–4.00

8.0

–1.03

6.0

4.0

–0.21
6.58

5.72

2.0
(H1 result)Operating profit

Sales/production© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Raw material and fuelpricesDepreciation

Other(H2 forecast)
Operating profit

20

Topics (Status of Major Capital Investments)
Investment

Details

Remarks

260t/yr ⇒ 400t/yr

・Facilities were completed in April 2022 andshipments are scheduled to begin in H1 of thefiscal year
・Additional investment under consideration

Carbonyl sulfide (COS)

80t/yr ⇒ 150t/yr

・Facilities were completed in June 2022 andtest operations are currently underway
・Production capacity (Japan: 40t/yr, SouthKorea: 110t/yr)

Lithium hexafluorophosphate(LiPF6)5,400t/yr ⇒ 10,000t/yr

・Scheduled for completion around fall 2023

Xuancheng KDK TechnologyCo., Ltd.

Phase I construction: Ammonium
fluoride
Phase II construction: WF 6, C 4F6,
CF4・Phase I construction: Scheduled forcompletion in March 2023
・Phase II construction: Scheduled forcompletion by the end of 2023

Hexafluoro-1,3-butadiene(C4F6)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

21

III Supplementary Materials© Kanto Denka Kogyo Co., Ltd. All rights reserved.

22

－Outlook for Major Products－Nitrogen Trifluoride (NF3) Chamber cleaning gas for plasma CVD equipment for semiconductor and FPD manufacturing
 Production capacity: 3,700t/year

tons

Demand trends (Kanto Denka forecasts for
FY2022 and beyond)

50,000

Forecasted market share・ Kanto Denka holds over 10% of market share・Kanto Denka holds around a 20% share in themarket for leading semiconductor manufacturers

40,00030,00020,000

Kanto Denka

10,00002018

2019

2020

2021

Semiconductor-related© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

FPD-related

2025Kanto Denka
Competitor C

Competitor A
Competitor D

Competitor B
Other23

－Outlook for Major Products－Tungsten Hexafluoride (WF6) Wiring material gas for semiconductors
 Production capacity: 720t/year (Nov. 2016) ➡ 910t/year (Aug. 2018) ➡ 1,400t/year (Oct. 2019)
Demand trends (Kanto Denka forecasts for
tons
10,000

FY2022 and beyond)

Forecasted market share・ Kanto Denka holds nearly 30% of market share

8,000

6,000

Kanto
Denka

4,000

2,000

Kanto Denka
Competitor C02018

201920202021© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

Competitor A
Competitor D

Competitor B
Other2025

24

－Outlook for Major Products－Hexafluoro-1,3-butadiene (C4F6)

 Etching gas for semiconductors
 Production capacity: 125t/year ➡ 160t/year (Dec. 2018) ➡ 260t/year (Dec. 2019) ➡ 400t/year (Apr. 2022)
tons
2,500

Demand trends (Kanto Denka forecasts for
FY2022 and beyond)

Forecasted market share・ Kanto Denka holds around 30% of market share
・Steady demand alongside progress in the multilayeringof 3D-NAND

2,000

1,500

1,000

Kanto Denka

50002018201920202021© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

2025

Kanto Denka
Competitor CCompetitor A
OtherCompetitor B

25

－Outlook for Major Products－Carbonyl Sulfide (COS) Etching gas for semiconductors
 Production capacity: 40t/year ➡ 80t/year (Oct. 2019) ➡ 150t/year (Jun. 2022)
Demand trends (Kanto Denka forecasts fortons400

FY2022 and beyond)

Forecasted market share・ Kanto Denka holds 60% or more of market share

350

・Steady demand alongside progress in themultilayering of 3D-NAND

300
250
200

Kanto Denka15010050

Kanto Denka

02018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

Competitors

2025

26

－Outlook for Major Products－Lithium Hexafluorophosphate (LiPF6)

 Electrolyte materials for lithium-ion secondary batteries Demand reaches full-scale pace for EVs and other in-vehicle applications
 Production capacity: 5,400t/year ➡ 10,000t/year (Planned for 2023)

tons

Forecasted market share

Demand trends (Kanto Denka forecasts
for FY2022 and beyond)

250,000

In the automotive battery market, Kanto Denka commands 70% sharein Japan, 40% in the United States and 10% in Europe.

200,000

It is essential to have high-quality LiPF6 amid tough requirements forautomotive application in terms of battery properties and safety, etc.

150,000

100,000

Kanto Denka
50,00002018

2019

2020

2021

© Kanto Denka Kogyo Co., Ltd. All rights reserved.

2022

2023

2024

2025

Kanto Denka
Competitor D

Competitor A
Competitor E

Competitor B
Competitor F

Competitor C
Other

27

－Overseas Production Sites－

Kanto Denka Fine Products Korea Co., Ltd.

 Location
Cheonan City, South Chungcheong
Province, Republic of Korea
 Business Lines
Manufacture and sale of fluorochemicals
for semiconductors and FPDs
 Production Items
・ Carbonyl sulfide (COS)・ Carbon tetrafluoride (CF4)・ Chlorine trifluoride (ClF3)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Exterior plant view28

－Overseas Production Sites－

Xuancheng KDK Technology Co., Ltd.

 Location
Xuancheng City, Anhui Province, People's
Republic of China
 Business Lines
Manufacture and sale of fluorochemicals forsemiconductors and FPDs
 Production Items
Phase I construction: Ammonium fluoride
Phase II construction:

Rendering of completed plantApprox. 250 km

・ Tungsten hexafluoride (WF 6)・ Carbon tetrafluoride (CF4)・ Hexafluoro-1,3-butadiene (C4F6)© Kanto Denka Kogyo Co., Ltd. All rights reserved.

29

Kanto Denka's Technology and Business Direction■ Future
Significantly strengthen
existing businesses

SDGs/ESG
High-sensitivity
analysis

Polymerization

LIB materials using
recycled Li

Create new business pillars

Fine Chemicals
Fluorination

High purity
MI* andcomputational
scienceElectrolysis

Ferrochemicals

Recycling

Chlorination

Organic-inorganic
hybrid materials

Ferrochemical products

Fundamental
Chemicals

InorganicsynthesisMiniaturization

Fluorochemicals
Battery materials

Creatingcomposites

Inorganic and organicproducts

Coating■KDK-Core Technology© Kanto Denka Kogyo Co., Ltd. All rights reserved.

Fluorine-based coating materials

Life science materials* MI: Material informatics

30

Notes This document does not constitute disclosurematerial as defined by the Financial Instruments andExchange Act and other laws and regulations, andtherefore the Company does not guarantee its
accuracy or completeness.
 Performance forecasts in this document werecreated based on information available as of thedate of this document's publishing, and actual
results may differ versus forecasted figures due to avariety of factors arising in the future.
© Kanto Denka Kogyo Co., Ltd. All rights reserved.

31