May 12, 2021
Company: Denka Company Limited
Representative: Toshio Imai, Representative Director, President(Code: 4061, First Section of the Tokyo Stock Exchange)
Inquiries: Satoshi Fukuoka, General Manager, Corporate Communications Dept.
(Tel: +81+81-3-5290
5290-5511)

Denka Value
Value-Up:
Up: FY2022 Numerical Targets and Initiatives for the Next Two Years
Denka Company Limited (headquarters: ChuoChuo-ku,, Tokyo; president: Toshio Imai; hereinafter, “Denka”)
has conducted an interim review of its five-yearyear management plan “Denka Value-Up”
Value Up” launched in 2018 andhas determined the initiatives to focus on over the next two years and the numerical targets for FFY2022.
Y2022.
Under Denka Value
Value-UpUp thus far, our growth strategies, focused primarily on healthcare and theenvironment and energy, have driven us to steadily achieve results, and we are moving smoothly on thepath toward becoming a Specialty
Specialty--Fusion
Fusion Company, an aaim
im set out in our growth vision. This also provesthat the direction we have been heading in under Denka Value
Value-Up
Up has been appropriate.
We are taking this opportunity to clarify the significance of our existence in society in addition to theinitiatives foforr the next two years based on the growth strategies set out under Denka Value
Value-Up
Up in an aim toachieve the numerical targets for FY2022.
Recognizing that the final two years of Denka Value
Value-UpUp will be an important preparation period for us toadvance toward our vision in the next management plan under which we will be aiming even higher, wewill strive to move forward.

Numerical Targets❏ Operating income, Operating income ratio, Ratio of specialty business:1

Denka’s definition of specialty business・A business that is consistent with ESG initiatives and meets or has the potential to meet the following conditions inthe near future: 1) boasting distinctive strengths and product value; 2) possessing resilience to changes in external
factors; and 3) commanding an industry-leading market share.
・In addition to the three priority fields of healthcare, the environment and energy, and high-value-added infrastructure,
we have been striving to specialize our key operations focusing on functional polymer since FY2018.

Profit Distribution❏ Investment: Actively promote strategic investments
5-year plan:¥200 billion (strategic investment: ¥75 billion; regular investment: ¥125 billion)

5-year estimate:¥210 billion (strategic investment: ¥85 billion; regular investment: ¥125 billion)❏ Shareholder returns: Keep committed to the targeted total shareholder return ratio of 50% as initiallyplanned for FY2021 and FY2022*Total shareholder return ratio = (Cash dividends + Shares repurchased)/Consolidated net
income attributable to owners of the parent

Initiatives for the Next Two Years Toward Realizing Denka’s Vision
We will adopt methods unique to Denka in undertaking challenges toward resolving various social issues
with SDGs as a compass, and aim to become a company that employees and stakeholders can be proud ofand one that is indispensable for society. As the first step in our aim, we will focus on the initiatives for ourthreefold Value-Up.

I. Business Value-Up
Business portfolio shift through “concentration in businesses in which we outperform others” andfurther specializing our key operations(1)

Business Portfolio Shift(i) Accelerate growth of specialty businesses
The environment andenergy

・Expand sales to markets related to xEV, 5G, semiconductors and renewableenergy・Focus on developing new product lineups that are ahead of the times

Healthcare

・Actively contribute to measures for novel & re-emerging infectious
diseases
・Respond to diagnosis using genetic detection and digitalization in theclinical field

High-value-added
infrastructure

・Accelerate overseas development, new product development and drastic
reforms of unprofitable products
・Pursue a new growth track to continue making it a priority field(ii) Specialize our key operations; redefine the positioning of the commodity businesses
For businesses that require reconstruction, generally achieve the portfolio shift in two years.

2(2)Innovative Processes
Production process
reforms・Develop new processes, automate visual inspection, introduce robots
・Stabilize operations by utilizing big data analytics (for detecting irregularsigns, etc.)

R&D process reforms

・Develop R&D support system, which is key to companywide deploymentof DX
・Pursue full-fledged use of materials informatics

Operational process
reforms, work stylereforms

・Adopt online meetings and computerize documents and approval to realizea new work style・Remove 3D (dangerous, dirty, demanding) workplaces in an aim to convert
to a creative operation in the production and R&D areas

II. Environment Value-Up
With environmental management at the base of management, aim to reduce greenhouse gas
emissions by 50% by FY2030 (compared to the FY2013 level), carbon neutrality by FY2050

Initiatives(i) Business Portfolio Shift(ii) Greater use of clean energy and introduction of highly efficient gas turbine(iii) Environmentally friendly products and environmental load reduction technologies(iv) Development and practical implementation of Carbon dioxide Capture, Utilization and Storage(CCUS)(v) Chemical recycling technology(vi) Reduction of greenhouse gas emissions throughout the product life cycle (life-cycle assessmentor LCA)

III. Human Resources Value-Up
Setting human resource strategies related to education, diversity, health, etc. as a high priority,
becoming a company in which employees can feel growth through job satisfaction and work
Initiatives(i) Set KPIs for “securing specialists,” “diversity promotion” and “work style reforms”(ii) Implement system reforms on evaluation, hiring, development, labor environment, etc.
(iii) Provide staff education for early development of future senior management candidates, pursue
bold organizational and human resources restructuring(iv) In an aim to realize sound growth, promote sound management by putting in place anenvironment in which employees can fully demonstrate their skills

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