デクセリアルズ（4980） – Consolidated Financial Results for the Nine Months Ended December 31, 2021

Consolidated Financial Results for the Nine Months Ended December 31, 2021 [Under Japanese GAAP] February 2, 2022 Phone: +81-285-39-7950 Company name: Dexerials Corporation Security code: 4980 Representative: Yoshihisa Shinya, Representative Director and President Contact: Quarterly Securities Report (Shihanki Hokokusho) filing date: Scheduled date of dividend payment: Preparation of supplementary briefing material on quarterly financial results: Yes Investors meeting presentation for quarterly financial results: Shinji Tomita, General Manager, IR Department, Corporate Strategy Division February 10, 2022 ‒ Listing: Tokyo Stock Exchange URL: https://www.dexerials.jp/en Yes (For securities analysts and institutional investors) (Note) Amounts of less than one million yen have been omitted. 1. Consolidated financial results for the nine months ended December 31, 2021 (from April 1, 2021 – December 31, 2021) (1) Consolidated operating results (cumulative) (Percentage indicates year-on-year changes) Net sales Operating profit Ordinary profit Nine months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen December 31, 2021 December 31, 2020 Note: Comprehensive income Note: EBITDA Note: Starting from the beginning of the fiscal year ending March 31, 2022, the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 72,115 49,193 For the nine months ended December 31, 2021: For the nine months ended December 31, 2020: For the nine months ended December 31, 2021: For the nine months ended December 31, 2020: ¥13,461 million ¥3,996 million ¥25,146 million ¥13,232 million [236.9%] [58.2%] [90.0%] [46.8%] 19,336 8,275 20,713 8,585 12,710 4,126 141.3 94.7 133.7 96.5 46.6 9.9 31, 2020) has been applied. Profit attributable to owners of parent % 208.0 45.7 Basic earnings per share Diluted earnings per share Nine months ended December 31, 2021 December 31, 2020 Yen 208.81 67.84 Yen 207.37 67.46 (2) Consolidated financial position Total assets As of December 31, 2021 March 31, 2021 Millions of yen 106,364 95,201 Millions of yen 60,245 53,305 Reference: Capital (Shareholders’ equity + Accumulated other comprehensive income) 2. Dividends Net assets Capital to asset ratio Net assets per share % 56.6 56.0 Yen 1,000.47 874.66 As of December 31, 2021: As of March 31, 2021: ¥60,245 million ¥53,305 million Fiscal year Ended March 31, 2021 Ending March 31, 2022 Ending March 31, 2022 (Forecast) First quarter-end Second quarter-end Third quarter-end Yen Yen Yen Fiscal year-end Yen Cash dividends per share ‒ ‒ 17.00 30.00 ‒ ‒ 27.00 30.00 Total Yen 44.00 60.00 Note: Revisions to dividend forecast published most recently: None 3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022 (from April 1, 2021 – March 31, 2022) Net sales Operating profit Ordinary profit (Percentage indicates year-on-year changes) Basic earnings per share Profit attributable to owners of parent Fiscal year Millions of yen 94,000 % Millions of yen 24,500 Note: Revisions to earnings forecast published most recently: Yes For more information on consolidated financial results, please refer to results briefing materials posted on our website (https://www.dexerials.jp/en/ir/library/) and a quarterly securities report to be filed on February 10, 2022 and other materials. % Millions of yen 22,400 % Millions of yen 14,500 % 172.1 106.6 116.1 42.8 Yen 238.33 [Notes] consolidation): None (1) Changes in significant subsidiaries during the current period (Changes in specified subsidiaries resulting in the change in scope of (2) Application of accounting methods used specifically for preparing the quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates and restatements of prior period financial statements (a) Changes in accounting policies due to the application of new or revised accounting standards: Yes (b) Changes in accounting policies due to reasons other than above (a): (c) Changes in accounting estimates: (d) Restatements of prior period financial statements: Note: For further details, please see “1. Quarterly Consolidated Financial Statements and Notes, (3) Notes to quarterly consolidated financial statements (Changes in accounting policies) and (Changes in accounting estimates)” on page 6 of the attached materials. None Yes None (4) Number of shares of common stock issued (a) Number of shares issued (including treasury shares) (b) Number of treasury shares As of December 31, 2021: 4,211,709 shares (c) Average number of shares of common stock during the period As of December 31, 2021: 64,428,400 shares As of March 31, 2021: 64,276,700 shares As of March 31, 2021: 3,332,948 shares Nine months ended December 31, 2021: 60,872,403 shares Nine months ended December 31, 2020: 60,824,342 shares Notes: 1. As a result of the exercise of stock options during the third quarter of the fiscal year ending March 31, 2022, the number of shares issued as of December 31, 2021 has increased by 151,700 shares. 2. As the Company has introduced a stock compensation plan which delivers shares with restrictions on transfer, the Company’s shares are included in the number of treasury shares at the end of the period (293,800 shares as of December 31, 2021 and 293,800 shares as of December 31, 2020) mainly for the purpose of allotting them as restricted shares. 3. As the Company has introduced an Employee Stock Ownership Plan (“J-ESOP”) and a Board Benefit Trust (BBT), the number of shares of the Company held by the trust account is included in the number of treasury shares as of the end of the period. In addition, the number of shares of the Company held by the Trust (an average of 3,482,184 shares for the nine months ended December 31, 2021 and an average of 3,219,045 shares for the nine months ended December 31, 2020) was included in the number of treasury shares to be deducted in the calculation of the average number of shares of common stock during the period. * This consolidated financial results report is not subject to a quarterly review by certified public accountants or an audit firm. * Proper use of earnings forecast, and other special notes (Disclaimer with respect to earnings and other forecasts) The forward-looking statements including results forecasts contained in this document are based on information currently available to the Company and certain assumptions that the Company deems reasonable. Accordingly, the Company does not intend to promise their achievement. Actual results may differ from these forecasts and forward-looking statements due to various factors. Contents for Attached Materials 1. Quarterly Consolidated Financial Statements and Notes …………………………………………………………………………………………. P. 2 (1) Quarterly consolidated balance sheet ………………………………………………………………………………………………………………. P. 2 (2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income …………… P. 4 Quarterly consolidated statement of income …………………………………………………………………………………………………… P. 4 Quarterly consolidated statement of comprehensive income …………………………………………………………………………….. P. 5 (3) Notes to quarterly consolidated financial statements …………………………………………………………………………………………. P. 6 (Going concern assumption) ………………………………………………………………………………………………………………………… P. 6 (Significant changes in shareholders’ equity) …………………………………………………………………………………………………. P. 6 (Changes in accounting policies) ………………………………………………………………………………………………………………….. P. 6 (Changes in accounting estimates) ……………………………………………………………………………………………………………….. P. 6 (Supplemental information) …………………………………………………………………………………………………………………………. P. 7 (Segment information) ………………………………………………………………………………………………………………………………… P. 8 – 1 – 1. Quarterly Consolidated Financial Statements and Notes (1) Quarterly consolidated balance sheet Assets Current assets: Cash and deposits Note and accounts receivable – trade Electronically recorded monetary claims – operating Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets: Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Land Construction in progress Other Accumulated depreciation Other, net Total property, plant and equipment Intangible assets: Goodwill Patent right Other Total intangible assets Investments and other assets: Shares of subsidiaries and associates Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets (Millions of yen) Previous fiscal year (As of March 31, 2021) Current quarter (As of December 31, 2021) 20,531 12,639 157 2,670 2,468 2,392 2,400 (2) 43,259 30,163 (20,425) 9,738 36,219 (29,719) 6,500 3,357 1,646 6,483 (5,089) 1,393 22,635 20,683 1,120 1,251 23,055 591 2,868 1,867 935 (11) 6,252 51,942 95,201 22,248 19,619 192 3,210 2,598 3,627 3,985 (4) 55,477 30,387 (20,854) 9,532 37,160 (30,768) 6,392 3,357 2,675 6,849 (5,253) 1,596 23,553 19,214 869 1,316 21,400 466 3,030 1,339 1,107 (11) 5,932 50,886 106,364 – 2 – Liabilities Current liabilities: Notes and accounts payable – trade Electronically recorded obligations – operating Current portion of long-term borrowings Accounts payable – other Accrued expenses Income taxes payable Provision for bonuses Other Total current liabilities Non-current liabilities: Long-term borrowings Retirement benefit liability Deferred tax liabilities Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity: Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income: Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Total net assets Total liabilities and net assets (Millions of yen) Previous fiscal year (As of March 31, 2021) Current quarter (As of December 31, 2021) 8,433 1,948 4,677 3,595 711 1,813 2,440 1,932 25,552 10,808 4,375 222 937 16,344 41,896 16,106 16,106 22,717 (3,491) 51,439 (587) 1,807 645 1,866 53,305 95,201 12,112 2,461 3,761 4,219 860 4,339 1,825 2,519 32,100 8,609 4,455 238 715 14,018 46,119 16,150 16,150 31,775 (6,447) 57,628 (15) 2,032 599 2,616 60,245 106,364 – 3 – (2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income (Millions of yen) For the nine months ended December 31, 2020 (From April 1, 2020 to December 31, 2020) For the nine months ended December 31, 2021 (From April 1, 2021 to December 31, 2021) Quarterly consolidated statement of income Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: Interest income Rental income Other Total non-operating income Non-operating expenses: Interest expenses Foreign exchange losses Share of loss of entities accounted for using equity method Depreciation Loss on investments in investment partnerships Other Total non-operating expenses Ordinary profit Extraordinary income: Gain on sale of non-current assets Gain on change in equity Gain on liquidation of subsidiaries Total extraordinary income Extraordinary losses: Loss on sale of non-current assets Loss on retirement of non-current assets Structural reform expenses Head office relocation expenses Compensation for damage Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to owners of parent – 4 – 49,193 28,189 21,003 12,418 8,585 7 71 74 153 48 26 168 176 16 27 463 8,275 0 26 ‒ 27 222 65 1,802 ‒ 154 2,244 6,057 1,751 179 1,930 4,126 4,126 72,115 37,998 34,117 13,403 20,713 6 42 116 165 37 1,160 125 123 22 72 1,542 19,336 0 ‒ 242 242 5 526 ‒ 102 349 984 18,595 5,516 368 5,884 12,710 12,710 Quarterly consolidated statement of comprehensive income Profit Other comprehensive income: Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total other comprehensive income Comprehensive income Comprehensive income attributable to: Owners of parent Non-controlling interests (Millions of yen) For the nine months ended December 31, 2020 (From April 1, 2020 to December 31, 2020) For the nine months ended December 31, 2021 (From April 1, 2021 to December 31, 2021) 4,126 (154) 27 (3) (130) 3,996 3,996 ‒ 12,710 572 224 (45) 750 13,461 13,461 ‒ – 5 – (3) Notes to quarterly consolidated financial statements (Going concern assumption) Not applicable. (Significant changes in shareholders’ equity) (Acquisition of treasury shares) The Company repurchased 922,800 treasury shares based on the resolution of Board of Directors’ meeting held on November 1, 2021. As a result, treasury shares increased by ¥2,999 million, and treasury shares stood at ¥6,447 million as of December 31, 2021. (Changes in accounting policies) (Application of Accounting Standard for Revenue Recognition, etc.) The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; hereinafter referred to as the “Revenue Recognition Accounting Standard”), etc., effective from the beginning of the first quarter, and when the control of the promised goods or services is transferred to the customer, the Company recognizes revenue as the amount expected to be received in exchange for the goods or services. However, the Company has applied the alternative treatment provided for in Paragraph 98 of the Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 26, 2021) and, in the case of sale of merchandise or finished goods in Japan, the Company recognizes revenue at the time of shipping when it takes the usual period of time for control of the merchandise or finished goods to be transferred to the customer after shipping. The application of the Revenue Recognition Accounting Standard, etc. follows the provisional treatment stipulated in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative impact in case of retroactively applying the new accounting policy to before the beginning of the first quarter is added to or deducted from retained earnings at the beginning of the first quarter, and the new accounting policy is applied from this initial balance. However, as a result of applying the method stipulated in Paragraph 86 of the Revenue Recognition Accounting Standard, the new accounting policy is not applied to contracts in which the amount of almost all revenues was recognized according to the previous treatment before the beginning of the first quarter. The amount of impact of applying this accounting standard on quarterly consolidated financial statements for the first nine months of the fiscal year under review is minor. (Changes in accounting estimates) (Change in estimates of asset retirement obligations) During the three months ended December 31, 2021, the Group obtained new information such as information on moving out, and consequently changed its estimates on the restoration costs and expected use period, in conjunction with asset retirement obligations posted as restoration obligations under the real estate lease contract for the previous head office. An increase resulting from this change in estimates, ¥28 million, was added to asset retirement obligations before the change. Although the change did not affect operating profit or ordinary profit, profit before income taxes decreased by ¥28 million for the first nine months of the fiscal year under review. – 6 – (Supplemental information) (Employee Stock Ownership Plan (“J-ESOP”)) The Company has introduced an Employee Stock Ownership Plan (“J-ESOP”) as an incentive program to grant employees the Company’s shares for the purpose of increasing their motivation and morale to improve the Company’s stock price and business performance by more strongly linking their compensation to the Company’s stock price and financial results and sharing economic benefits with shareholders. The Company’s shares remaining in the trust are posted as treasury shares in the net assets section at the book value in the trust (excluding the amount of ancillary expenses). The book value and the number of the treasury shares at the end of the previous fiscal year and at the end of the third quarter of the current fiscal year are ¥3,103 million and 2,961 thousand shares and ¥3,068 million and 2,927 thousand shares, respectively. (Board Benefit Trust (BBT)) The Company has introduced a Board Benefit Trust (BBT) as a performance-based stock compensation plan for directors and executive officers (excluding directors who are Audit and Supervisory Committee members and outside directors; the same applies hereinafter) to more clearly link their compensation to the Company’s financial results and stock value and increase their awareness of contributing to better business performance and enhancing corporate value continuously over the medium to long terms by sharing the benefits of rising stock price and the risks of falling stock prices. The Company’s shares remaining in the trust are posted as treasury shares in the net assets section at the book value in the trust (excluding the amount of ancillary expenses). The book value and the number of the treasury shares at the end of the previous fiscal year and at the end of the third quarter of the current fiscal year are ¥62 million and 77 thousand shares and ¥54 million and 67 thousand shares, respectively. – 7 – (Segment information) I. For the nine months ended December 31, 2020 (from April 1, 2020 to December 31, 2020) Information on amounts of net sales and profit (loss) by reportable segment Reportable Segment Optical Materials and Components Electronic Materials and Components (Millions of yen) Total Adjustment (Note) Consolidated Net sales Sales to external customers Intersegment sales or transfers Total Segment profit 21,317 6 21,324 4,110 27,875 82 27,958 5,822 49,193 89 49,282 9,933 ‒ (89) (89) (1,348) 49,193 ‒ 49,193 8,585 (Note) The amount of adjustment for segment profit of ¥1,348 million is the amount of amortization of goodwill that does not belong to any reportable segment. (Reference) Net sales by region: (Japan ¥16,145 million, China ¥16,214 million, South Korea ¥5,363 million, Taiwan ¥5,349 million and Other ¥6,120 million) II. For the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021) Information on amounts of net sales and profit (loss) by reportable segment Reportable Segment Optical Materials and Components Electronic Materials and Components (Millions of yen) Total Adjustment (Note) Consolidated Net sales Sales to external customers Intersegment sales or transfers Total Segment profit 36,174 82 36,256 9,706 35,941 306 36,247 12,348 72,115 388 72,504 22,054 ‒ (388) (388) (1,341) 72,115 ‒ 72,115 20,713 (Note) The amount of adjustment for segment profit of ¥1,341 million is the amount of amortization of goodwill that does not belong to any reportable segment. (Reference) Net sales by region: (Japan ¥20,832 million, China ¥17,805 million, South Korea ¥10,526 million, Taiwan ¥14,803 million and Other ¥8,147 million) Matters concerning the change in reportable segments, etc. (Reclassification of reportable segments) The Group reviewed the reportable segment of some categories which constituted the Electronic Materials and Components business and reclassified these categories into the Optical Materials and Components business from the first quarter. For the segment information for the third quarter of the previous fiscal year, the information that was prepared based on the classification of reportable segments after the change above is disclosed. (Application of Accounting Standard for Revenue Recognition, etc.) As stated in (Changes in accounting policies), the Company has applied the Accounting Standard for Revenue Recognition, etc. effective from the beginning of the first quarter and changed the accounting method for revenue recognition. Therefore, the method of measuring the profit or loss of reportable segments has also been changed in the same way. The amount of impact of applying this accounting standard on the quarterly consolidated financial statements for the first nine months of the fiscal year under review is minor. – 8 –