August 7, 2020

Summary of Consolidated Financial Results
Denka company Limited
1. Summary
1.1 Overview
The Denka Group set up the plan’s threefold growth vision designed to create a “Specialty-Fusion Company”,“Sustained Growth” and “Sound Growth,”, to realize the corporate philosophy enshrined in The Denka Value. Under
Denka Value-Up, a management plan spanning a period of five years since April 2018, the Group has been promoting
two growth strategies, namely, the business portfolio shift and the introduction of innovative processes, aiming toexpand its operations and enhance profitability.
In the first three months of the fiscal year ending March 31, 2021, the Group recorded robust shipment volumes forsemiconductor-related products (such as highly functional films for use as embossed carrier tape for electronic
components and semiconductors, and fused silica fillers for use as semiconductor encapsulant fillers), thanks to
growing demand associated with the introduction of the 5G infrastructure as well as an increase in data center-related
product needs worldwide. However, the fallout from the novel coronavirus pandemic caused shipments for some ofour main products, including chloroprene rubber, to decline. Furthermore, sales prices of the Group’s styrene-based
products have been downwardly revised in step with plunges in raw material prices. Consequently, consolidated net
sales totaled ¥76.2 billion, down ¥14.7 billion, or 16.1%, compared with the same period of the previous fiscal year.
On the earnings front, The Group affected the impact of a significant decline in demand reflecting the fallout fromthe novel coronavirus pandemic. On the other hand, the Group has benefitted from improving spreads and thoroughlyreviewed administrative expenses as well as fixed costs associated with its plants. As a result, operating income was¥4.4 billion, down ¥2.3 billion, or 34.8%, year on year, while ordinary income was ¥5.0 billion, down 21.3%. Profit
attributable to owners of the parent was ¥4.2 billion, down 16.5% from the same period of the previous fiscal year.
From the second quarter onward, although the future outlook remains extremely unclear due to such factors as thenovel coronavirus pandemic, the Denka Group will vigorously promote the growth strategy of Denka Value-Up andaim to achieve the initial forecast focusing on the specialty business of Electronics & Innovative Products and Life
Innovation.

1.2 Results by Segment
Elastomers & Performance Plastics
Due to a general stagnation in production activities, especially in the automotive industry, which was greatly
affected by the fallout from the novel coronavirus pandemic, the Group saw a year-on-year decrease in the sales
volume of chloroprene rubber. As a result, segment income decreased significantly.
Although the Group has seen some positive signs suggesting that demand for chloroprene rubber may recover fromthe second quarter onward, it expects segment income to decrease year on year in terms of full-year operating results.

Infrastructure & Social Solutions
The Group successfully maintained product prices that have recently been upwardly revised while promoting costreductions. Despite the positive effects of these efforts, segment income declined due to decreases in the sales
volume of calcium cyanamide, AZUMIN and other agri-products as well as that of fire-resistant and steel materials.
Nevertheless, the Group will continue to strive to maintain product prices while promoting ongoing cost reductionsin the second quarter and beyond, with the aim of achieving year-on-year growth in segment income in terms of fullyear operating results.

Electronics & Innovative Products
Segment income grew despite a decline in demand for HITTPLATE aluminum substrate and other products targetingthe automotive industry. Benefitting from growth in 5G-related demand and an increase in data center-related
product needs worldwide, the increase was due mainly to solid sales of highly functional films for use as embossed
carrier tape for electronic components and semiconductors and robust showings of fused silica fillers for use as
semiconductor encapsulant fillers. Other factors contributing to segment income included year-on-year growth insales of spherical alumina for EV-related applications.
In terms of full-year operating results, the Group expects segment income to increase year on year as it anticipatesthat shipment volumes of semiconductor- and EV-related products will remain firm in the second quarter and beyond.

Living & Environment Products
The sales volume of industrial tapes was down year on year due to the fallout from the novel coronavirus pandemic
and other factors. However, segment income increased thanks mainly to lower raw material prices and a reduction in
fixed costs.
With regard to full-year operating results, the Group expects segment income to increase year on year bycontinuing to improve costs.

Life Innovation
The fallout from the novel coronavirus pandemic led to decreases in the number of diagnostic examinations
associated with health checkups or diseases other than the novel coronavirus, causing sales of the Group’s diagnostic
reagents to decline year on year. On the other hand, the Group carried out the shipment of diethyl malonate, the raw
material for AviganⓇ anti-influenza virus drug, in response to a government request. Consequently, segment income
for the first three months remained virtually unchanged from the same period of the previous fiscal year.
Looking ahead, the Group will continuously endeavor to maintain a stable supply of Life Innovation products in thesecond quarter and beyond, with the aim of meeting the needs of society.
* Avigan is a registered trade name of FUJIFILM Toyama Chemical Co., Ltd.

2. Consolidated Financial Results and Forecast
FY2020
Apr to Jun

Net Sales
Operating Income
Ordinary Income
Net Income

FY2019Apr to Jun

76.2
4.4
5.0
4.2

90.9
6.7
6.4
5.0

Billions of Yen
Incｒ.
△Decr.

△ 14.7
△ 2.3
△ 1.4
△ 0.8

FY2020
Forecast
Apr to Sep

160.0
12.0
12.0
10.0

3. Net Sales and Operating Income by segments
FY2020
Apr to Jun

27.1
1.3
11.7
0.2
15.6
2.8
7.9
0.1
5.3
0.0
8.7
0.0
76.2
4.4

Sales
Elastomers ＆Performance Plastics Operating Income
Sales

Infrastructure ＆Social Solutions

Operating Income

Electronics ＆Innovative Products

Operating Income

Sales

Sales
Living ＆Environment Products Operating Income
Life innovation

Sales
Operating Income

Sales

Others/Companywide

Operating Income

Sales

Total

Operating Income

FY2020
Forecast
Apr to Mar

360.0
31.0
29.0
21.0
Billions of Yen

FY2019Apr to Jun

39.4
3.8
12.9
0.3
15.5
2.6
8.8
△ 0.2
5.1
0.1
9.1
0.2
90.9
6.7

Incr.
△Decr.

△ 12.3
△ 2.5
△ 1.2
△ 0.1
0.0
0.2
△ 1.0
0.3
0.1
△ 0.0
△ 0.4
△ 0.2
△ 14.7△ 2.3

FY2020
Forecast
Apr to Sep

55.0
3.0
25.0
1.033.0
6.5
16.0
0.5
15.0
1.0
16.0
0.0
160.0
12.0

4.1 Sales by segments

FY2020
Forecast
Apr to Mar

125.0
7.5
55.0
2.0
73.0
13.5
33.0
0.5
38.0
7.0
36.0
0.5
360.0
31.0
Billions of Yen

FY2020
Apr to Jun

27.1
11.7
15.6
7.9
5.3
8.7
76.2

Elastomers & Performance Plastics
Infrastructure & Social Solutions
Electronics & Innovative Products
Living & Environment ProductsLife innovation
OthersTotal

FY2019Apr to Jun

39.4
12.9
15.5
8.8
5.1
9.1
90.9

Incr.
△Decr.

△ 12.3△ 1.2
0.0△ 1.00.1△ 0.4△ 14.7

Sales price

△ 5.5
0.1
△ 0.1
△ 0.2
△ 0.0
△ 5.6

Sales volume△ 6.8
△ 1.3
0.2
△ 0.8
0.2
△ 0.4
△ 9.0

4.2 Operating income by segments

Billions of Yen
Operating income

FY2020
Apr to Jun

Elastomers & Performance Plastics
Infrastructure & Social Solutions
Electronics & Innovative Products
Living & Environment ProductsLife innovation
Others
Total

1.3
0.2
2.8
0.1
0.0
0.0
4.4

FY2019Apr to Jun

3.8
0.3
2.6
△ 0.2
0.1
0.2
6.7

Incr.
△Decr.

△ 2.5△ 0.1
0.20.3
△ 0.0
△ 0.2
△ 2.3

Sales price

△ 5.5
0.1
△ 0.1
△ 0.2
△ 0.0
△ 5.6

5. Key operating factors

Research and Development
Interest-bearing debt

Yen / USD exchange rate
Naphtha price (yen/ Kl)

Operating cost& others

△ 3.4
△ 0.4
0.4
△ 0.2
0.2
△ 0.0
△ 3.4

6.3
0.2
△ 0.0
0.7
△ 0.2
△ 0.2
6.7

Billions of Yen
FY2020
Apr to Jun

Investment
Depreciation

Sales volume

7.1
5.7
3.8
142.2
107.7
26,000FY2019Apr to Jun

5.3
5.5
3.5
115.8
110.8
45,800Incr.
△Decr.

1.80.20.3
26.4

FY2020
Forecast
Apr to Sep

23.0
12.0
8.0
142.0

FY2020
Forecast
Apr to Mar

47.0
24.0
16.0
152.0