FY2022 2Q Financial Results Presentation
Summary of Q&A Session(November 8, 2022)
Electronics & Innovative Products
Q1: Could you please provide an application-based breakdown of the status of acetylene blacksales in the July–September 2022 period regarding sales for EV-related use and for high-voltage
cable use?
A1: Sales of acetylene black for EV-related use were negatively affected by decreased automobile
production during the April–June 2022 period due to semiconductor shortages. However, since
July demand has been on a recovery track. As for products for use in high-voltage transmission
cables, although demand remained strong, the shipment of such products was hindered bylogistics disruptions and did not progress as planned.
Q2: What is your demand forecast for the second half regarding EV-related products?
A2: The EV market could be negatively affected by economic recessions in various parts of theworld going forward. However, we currently forecast that demand will, to a certain degree, remain
solid over the course of the second half of fiscal 2022. This projection is based on a trend towardmarket recovery as European, U.S. and other automakers are now benefitting from the resolutionof semiconductor shortages.
Q3: What is your forecast for semiconductor-related demand for that period?
A3: Because of declining demand for PCs, smartphones and other consumer-sector products, we
expect the sales environment to remain harsh. We intend to offset downturns arising from thisenvironment by sales from data center-related and vehicle-mounted products, demand for which
has been constantly strong.
Life Innovation
Q4: As the shipment of influenza vaccines commenced in September, the shipment volume ofthese vaccines is reasonably estimated to grow larger in the second half than in the first half. Inaddition, the shipment volume of rapid test kits for COVID-19 antigens is similarly expected torise in the second half, due to concerns over the possible emergence of an eighth wave in theCOVID-19 pandemic as well as the simultaneous breakout of both COVID-19 and influenza.
Despite these projections, however, the operating income forecast for the second half amounts
to only \6.5 billion, keeping it on par with that recorded in the first half. What is your rationale
for this forecast?
A4: We indeed expect influenza vaccine shipment volumes to be higher in the second half than in
the first half. On the other hand, although we do anticipate the emergence of an eighth wave in
the COVID-19 pandemic in the second half, we forecast that the shipment volume of rapid test
kits for COVID-19 antigens for the period will not be as large as that in the first half, during which
the seventh wave of the pandemic remained in place for a prolonged period of time.

Denka Co., Ltd.Elastomers & Infrastructure Solutions
Q5: Denka has stated that its withdrawal from the cement business will, once completed, translate
into a profit effect of around \1.0 billion in comparison with the average operating results recordedin the period spanning fiscal 2018 to fiscal 2022. Could you describe the estimated volume of thismoveʼs profit effect compared with operating results for fiscal 2022 alone?
A5: Considering that cement producers are now contending with radical surges in coal prices thatare sure to lead to an extremely harsh profit environment in fiscal 2022, we believe that ourwithdrawal from said business will translate into an increase in profit in the order of several billionsof yen.
Q6: Donʼt you think that Denkaʼs complete withdrawal from the cement business could result inhigher overall operational costs to be borne by its calcium carbide chain and, further, inflict amajor negative impact on the Companyʼs chloroprene rubber-related and other operations?
A6: There will be no major impact on other businesses.
New Vision and the Next Management Plan “Mission 2030”
Q7: It was announced that Denka intends to restructure its non-“three-star businesses,” namely,
those not associated with specialty businesses, megatrends or sustainability. The Company also
named withdrawal and divestment as viable options for restructuring. Please elaborate on yourcriteria for taking such measures.
A7: With regard to specialty businesses, we have already established a system for calculating
ROIC on a product-by-product basis and, therefore, will focus on assessing the investment
efficiency of each. We consider a WACC of 6% to be a KPI suggesting the bare minimum approvalline. In addition, our judgment criteria include the productʼs market share, with particularemphasis on whether or not its share is large enough to make it influential in the market.
As for our criteria associated with megatrends, we have defined “ICT & Energy,”“Healthcare” and “Sustainable Living” as three key fields. Our resources will be focused on thesefields.
In terms of sustainability, our judgment will be based on a given businessesʼ potential tocontribute to the realization of carbon neutrality in 2050. This also takes the future enforcementof carbon taxation into account.
Q8: Could you elaborate on which new businesses you have in mind in terms of Denkaʼs expansion
into “ICT & Energy”?
A8: We are focusing mainly on the 5G communications system. As this system now
accommodates millimeter waves, we anticipate the launch of new products in relevant fields. As
featured in the presentation material, LCP films are considered a good example.

Denka Co., Ltd.

Q9: Denkaʼs target for fiscal 2030 operating income in the healthcare field totals \40.0 billion,
representing a major increase from the fiscal 2026 operating income target of \20.0 billion definedfor said field. Do you expect The DELYTACT* (G47Δ) Oncolytic Virus to contribute to operating
income through the expansion of the scope of its applications? Or do you anticipate contribution
by new products?
A9: Denka is merely a commissioned manufacturer of The DELYTACT* (G47Δ) Oncolytic Viruspreparation and is in no way positioned to formulate sales plans for it. That being said, we do
anticipate a certain degree of expansion in its applications in countries overseas and future
progress in global marketing. Based on these projections, we are planning to augment our supply
capacity. While our operating income target thus factors in the contribution of this product, wealso expect new products to bolster our operating results.
* DELYTACT is a registered trademark of Daiichi Sankyo Company, Limited.

Denka Co., Ltd.