Summary of Consolidated Financial Results
May 12, 2021
Denka Company Limited

1. Consolidated Financial Results and Forecast（¥ billions）

FY 2019
Apr to Mar

FY 2020
Apr to Mar

FY 2021
Forecast
Apr to Sep

Incr.
Decr.

FY 2021
Forecast
Apr to Mar

Net Sales

380.8

354.4

- 26.4

175.0

365.0

Operating Income

31.6

34.7

3.1

19.0

42.0

Ordinary Income

30.0

32.1

2.1

17.0

39.0

Net Income attributable to Owners of parent

22.7

22.8

0.1

13.0

29.0

2. Overview (year-on-year comparisons)To realize the corporate philosophy enshrined in The Denka Value, the Denka Group set up a threefold growth vision designed tocreate a “Specialty-Fusion Company,” “Sustained Growth” and “Sound Growth” through the execution of Denka Value-Up, amanagement plan spanning a period of five years beginning in April 2018. To this end, the Group has been promoting the plan’s
two growth strategies, namely, the business portfolio shift and the introduction of innovative processes, aiming to expand its
operations and enhance profitability.
In the fiscal year ended March 31, 2021, the Group’s operating results were affected by lower overall sales volumes dueto stagnant demand resulting from global economic recession, despite growth in sales of Electronic & Innovative Products and thepositive effects of new products in the healthcare field. Moreover, the sales prices of some products were revised downward instep with plunges in raw material prices. Taking these and other factors into account, consolidated net sales totaled ¥354.4 billion,
down ¥26.4 billion, or 6.9%, compared with the previous fiscal year.
On the earnings front, the shipment of QuickNavi™-COVID19 Ag, a rapid diagnostic testing kit for detecting novel
coronavirus antigen, greatly contributed to operating results. In addition, the Group has benefitted from such positive factors as
growing demand for EV- and semiconductor-related products and other offerings in the environment and energy field while
reducing fixed costs. As a result, operating income rose ¥3.1 billion, or 9.9%, year on year, to ¥34.7 billion, a record high. The Groupalso achieved year-on-year growth in two other profit indices, with ordinary income and profit attributable to owners of the parent
totaling ¥32.1 billion, up 7.0%, and ¥22.8 billion, up 0.4%, respectively.
3. Forecasts for the Fiscal Year Ending March 31, 2022
For the fiscal year ending March 31, 2022, the Group anticipates recovery in demand associated with our key operations, including
chloroprene rubber (CR), demand for which had been significantly affected by the novel coronavirus pandemic in the prior year.
The Group also expects further growth in demand for offerings related to EVs, semiconductors, 5G communications infrastructure,
renewable energy, and other applications in the environment and energy field. Based on these projections, the Group forecasts
operating income of ¥42.0 billion, well in excess of the ¥34.7 billion recorded in the fiscal year ended March 31, 2021, and thus
expects to achieve record-high operating income for the second consecutive year. The Group’s operating results forecasts also
include ordinary profit of ¥39.0 billion and profit attributable to owners of the parent of ¥29.0 billion, which both will represent
record highs.
4. Assumptions
FY 2019
Apr to Mar

FY 2020
Apr to Mar

FY 2021
Forecast
Apr to Sep

Incr.
Decr.

FY 2021
Forecast
Apr to MarInvestment

36.9

42.3

5.4

22.0

43.0

Depreciation

22.5

22.9

0.4

11.5

23.5

R&D

15.0

14.7

- 0.3

8.0

16.0

Interest-Bearing Debt

134.3

138.2

3.9

138.0

137.0

FY 2019
Apr to Mar

FY 2020
Apr to Mar

FY 2021
Forecast
Apr to Sep

FY 2021
Forecast
Apr to MarForex（¥/$）

109.1

105.8

108.0

108.0

Japan Naphtha（¥/KL）

42,65031,80046,00046,0005. Results by Segment (year-on-year comparisons)
Elastomers & Performance Plastics
Segment income was down year on year due to a substantial decline in CR demand under the influence of the novel coronavirus
pandemic. However, the Group has seen ongoing recovery in such demand from the second half onward. Moreover, the shipmentof MS resin for use in light guiding substrates for televisions and monitors has been consistently firm.
Infrastructure & Social Solutions
Segment income decreased despite the positive effects of the Group’s efforts to maintain product prices after the recent upwardrevisions. This was mainly attributable to declines from results seen in the previous fiscal year in sales of cement, special cement
additives, fertilizers, fire-resistant materials and steelmaking materials due to the pandemic’s fallout and the influence ofunfavorable weather.
Electronics & Innovative Products
As the Group was buoyed by growing demand associated with the global introduction of 5G infrastructure and an increase in data
center-related product needs worldwide, robust sales of highly functional films for use as embossed carrier tapes for electroniccomponents and semiconductors exceeded results recorded in the previous fiscal year, as did sales of fused silica fillers for use as
semiconductor encapsulant fillers. Similarly, sales of spherical alumina and ultra-high purity electro-conductive carbon black foruse in EV-related applications were up year on year. Thanks to these factors, segment income increased.
Living & Environment Products
Although demand for plastic rain gutters, TOYOKALON synthetic wig fibers and industrial tapes returned to a recovery track fromthe decline induced by the pandemic, the sales volume for these products was still down year on year. However, thanks to growing
demand for takeaway food services, overall sales of food packaging sheets and processed products using such sheets largely
remained firm. Moreover, plunges in raw material prices and a reduction in fixed costs contributed to segment results. Taking theseand other factors into account, segment income rose from the previous fiscal year.
Life Innovation
The shipping volume of influenza virus rapid diagnostic testing kits was down from the previous fiscal year. On the other hand, theshipping volume of influenza vaccines increased year on year as medical specialists and authorities issued earlier-than-usual
recommendations regarding vaccination. Moreover, the August 2020 release of QuickNaviTM-COVID19 Ag contributed to segment
results. Consequently, operating income rose significantly from the previous fiscal year.

Net Sales and Operating Income by segments

Elastomers &Performance Plastics

Infrastructure &Social Solutions

Electronics &Innovative Products

Living & Environment
Products

FY 2019
Apr to Mar

FY 2020
Apr to Mar

Incr.
Decr.

Net Sales

149.3

124.3

- 25.0Operating Income

10.9

4.4

- 6.5

Net Sales

54.8

50.5

- 4.3

Operating Income

0.3

- 0.5

- 0.8

Net Sales

68.0

71.2

3.2

Operating Income

12.4

14.0

1.6

Net Sales

37.0

33.4

- 3.5

Operating Income

0.1

1.2

1.1

Net Sales

35.5

42.9

7.4

Operating Income

7.0

14.8

7.9

Net Sales

36.2

32.0

- 4.2

Operating Income

0.9

0.8

- 0.1

Net Sales

380.8

354.4

- 26.4

Operating Income

31.6

34.7

3.1

Life innovation

Others/Companywide

Total

Net Sales
Net Sales by segments

FY 2019
Apr to Mar

FY 2020
Apr to Mar

Incr.
Decr.

Sales priceSales volume

Elastomers & Performance Plastics

149.3

124.3

- 25.0- 19.0- 6.0

Infrastructure & Social Solutions

54.8

50.5

- 4.3

0.4

- 4.6

Electronics & Innovative Products

68.0

71.2

3.2

- 2.1

5.3

Living & Environment Products

37.0

33.4

- 3.5

- 1.5

- 2.0

Life innovation

35.5

42.9

7.4

- 0.1

7.5

Others/Companywide

36.2

32.0

- 4.2

-- 4.2

Total

380.8

354.4

- 26.4- 22.4- 4.0

Operating income
Incr.
Decr.
Sales priceSales volume

cost & others

Operating income by segments

FY 2019
Apr to Dec

FY 2020
Apr to Dec

Elastomers & Performance Plastics

10.9

4.4

- 6.5

- 19.0

- 3.2

15.8

Infrastructure & Social Solutions

0.3

- 0.5

- 0.8

0.4

- 1.3

0.2

Electronics & Innovative Products

12.4

14.0

1.6- 2.1

3.5

0.2

Living & Environment Products

0.1

1.2

1.1

- 1.5

- 0.9

3.5

Life innovation

7.0

14.8

7.9

- 0.1

8.6

- 0.6

Others/Companywide

0.9

0.8

- 0.1

-- 0.1

0.0

Total

31.6

34.7

3.1

- 22.4

6.5

19.0

6. Changes in Reportable Segments
As of April 1, 2021, the Group revised its reportable segments as detailed below. The revised segmentation reflects thereorganization of the Group’s conventional structure centered on five business divisions into four business divisions, and applies tothe reporting of its operating results for the fiscal year ending March 31, 2022 and beyond.
Former segmentation

Revised segmentation

Main products

Elastomers
Plastics

Electronics & Innovative Products

Fused silica, fine ceramics, acetylene black, electronic circuit
substrates, electronic packaging materials, etc.

Life Innovation

Vaccines, joint function improvers, diagnostic reagents, etc.

&Performance

Infrastructure & Social Solutions
Electronics & Innovative Products
Elastomers
Solutions

Living & Environment Products&Infrastructure

Chloroprene rubber, cement, special cement additives,
fertilizers,
calcium
carbide,fire-resistantmaterials,
environmental materials, etc.

Life Innovation

Polymer Solutions

Styrene monomer, polystyrene resin, ABS resin, CLEAREN,
heat-resistant resin and transparent resin, POVAL, foodpackaging materials, housing materials, industrial materials, etc.

Other

Other

Trading and engineering

Supplementary information regarding consolidated net sales and operating income to be compiled using the revised segmentation
for the fiscal year ending March 31, 2022, is outlined below.

Net Sales and Operating Income by segments

Electronics &Innovative Products

FY 2020
Apr to Mar

FY 2021
Apr to Mar

FY 2021
Forecast
Apr to Sep

Incr.
Decr.

Net Sales

77.7

85.0

7.3

42.0

Operating Income

14.2

17.0

2.8

8.0

Net Sales

42.9

40.0

- 2.9

18.0

Operating Income

14.8

10.5

- 4.3

5.0

Net Sales

91.8

105.0

13.1

50.0

Operating Income

- 3.6

4.0

7.6

1.0

Net Sales

109.9

125.0

15.1

60.0

Operating Income

8.4

9.5

1.1

4.5

Net Sales

32.0

10.0

* - 22.0

5.0

Operating Income

0.8

1.0

0.2

0.5

Net Sales

354.4

365.0

10.6

175.0

Operating Income

34.7

42.0

7.3

19.0

Life Innovation

Elastomers &Infrastructure Solutions

Polymer Solutions

Others/CompanywideTotal* Includes the effect of applying the accounting standard for revenue recognition to group trading companies.