FY2020Q3 Earning Results Presentation

12 November 2020

W-Scope Corporation

I. FY20 Q3 Earnings ResultsII. FY20 Earnings GuidanceIII. The Market TrendIV. Appendix

Contents

I. FY20 Q3 Earnings Results

FY20 Q3 Results Summary Q3 Results Consolidated sales rose by 34.2% YoY to ¥11,847mil despite a major project was still on the way to

recovery from the COVID pandemic. Although negative impact from the pandemic continued in July and August, the September monthly sales

reached ¥2,000mil. Sales to Korean battery makers hit ¥10,732mil (+88.2% YoY), thanks to a recovery in the EV battery

separator demand. Sales of EV battery separator increased by 189.4% YoY to ¥7,353mil. Operating loss was ¥3,354mil, further ¥143mil loss compared to the same period last year. Reasons for

the increase in operating loss are:1. Increase in R&D cost, mainly for a new EV project.2. Increase in depreciation cost and personnel cost.3. ¥988mil YoY increase in inventory revaluation loss to ¥1,200mil – an increase in fixed cost because of lower

utilisation rate during the pandemic was accounted as an inventory revaluation loss.4. ¥584mil increase in indirect production cost along with the sales increase (including new projects).

Production Trend Utilisation rate of production lines for EV battery separator mostly recovered during Q3 There is some excess capacity in production lines for consumer use separator There were several incidences with EV being spontaneously ignited in Korea this September, which led

to a series of reviews on the separator’s quality standard. During the review processes, shipment was suspended. (The ignition incidences were not caused by our separator.)

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Earnings Results (Consolidated)

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(¥mil) 2019 Q3(Cumulative)

2019 Q4(Cumulative)

2020 Q1(Cumulative)

2020 Q2(Cumulative)

2020 Q3(Cumulative)

Change (%)(YoY)

Sales 8,824 13,167 4,520 6,920 11,847 134.26%

OP △3,211 △3,286 △365 △1,799 △3,354―

（OPM, %） ー ー ー ー ーRP △3,881 △3,950 △1,104 △2,887 △4,859 ―

NP △3,204 △3,517 △910 △2,685 △4,407 ―

Depreciation 2,673 3,953 1,348 2,667 3,990 149.27%

R&D 915 1,043 114 253 365 39.89%

CAPEX 13,273 16,498 2,123 5,244 8,885 66.94%

FOREX109.05 108.96 108.87 108.22 107.53 98.61%

(AR:¥/$)

FOREX106.65 106.98 91.1 89.6 89.6 84.01%

(AR:¥/1,000KRW）

FOREX1,162.18 1,165.65 1,194.85 1,207.44 1,200.52 103.30%

(AR:KRW/$）No. of employees 966 1,046 1,046 1,019 1,023 105.90%

BS Summary

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2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

Other Assets 1,994 1,820 1,911 1,889 2,367Tangible Fixed asset 45,604 48,318 46,856 49,116 51,628Inventory 2,581 3,638 4,429 5,974 4,874Sales Receivables 2,268 3,733 3,745 2,075 3,870Cash & Cash Equivalent 777 12,619 10,125 6,644 4,030

777

12,619 10,125 6,644 4,030

45,604

48,318 46,856

49,116 51,628

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

¥mil

Assets

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

Net Assets 12,420 15,245 12,496 10,963 9,380Other Liabilities 5,825 19,460 21,257 21,987 25,301Long-term Debt 22,715 22,495 21,315 12,682 11,887Short-term Debt 11,780 11,747 10,860 19,204 19,358Account Payables 484 1,180 1,138 862 843

11,780 11,747 10,860 19,204 19,358

22,715 22,495 21,315 12,682 11,887

5,825

19,460 21,257 21,987 25,301 12,420

15,245 12,496 10,963

9,380

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

¥mil

Liability & Equity

Waterfall Chart – YoY Change in OP

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FY19Q3 Operating Loss△¥3,211mil

FY20Q3Operating Loss△¥3,354mil

YoY Change¥3,023mil sales increase¥143mil expansion inloss

FY19Q3Marginal Profitability

56.2%

FY20Q3Marginal Profitability

51.7%

-3,211

2,788

235 -170

-1,351

-621 551 -988

-585

-3,354

-4,000

-3,500

-3,000

-2,500

-2,000

-1,500

-1,000

-500

0

Drop in sales

volume

Ch

ang

e in sales m

ix

Increase in raw m

aterial cost Increase in personnel cost

Decrease in R

&D

cost

Other cost increase

(incl. change in inventory)

Inventory valuation loss

Increase in depreciationFY19Q3 OP Loss FY20Q3

OP Loss

(¥mil)

Note: The above figures reflect impact from FOREX.

Quarterly Quarterly Sales Trend by Application

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0%

10%

20%

30%

40%

50%

60%

70%

FY19 7-9 FY19 10-12 FY20 1-3 FY20 4-6 FY20 7-9

Consumer Non-Coating Consumer Coating

Automotive Non-Coating Automotive Coating

Quarterly Sales Trend by Application (YoY)

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0%

10%

20%

30%

40%

50%

60%

FY19 3Q FY20 3Q

Consumer Non-Coating Consumer Coating

Automotive Non-Coating Automotive Coating

Ⅱ．FY20 Earnings Guidance

FY20 Full-Year Guidance Sales Demand for EV battery separator has been on a recovery trend since September and will likely

remain in the uptrend in Q4. Sales to new EV battery businesses which started in July has been surpassing the initial forecast by

more than 40%. Recovery of consumer-use battery separator has been slow, however, demand for a coated

separator has been growing.

Operating Profit Negative impacts from the pandemic were mostly accounted by Q3. Increase in sales will likely lead to operating profit in Q4 (from a loss-making as in Q3)

Facilities The utilisation rate at production lines for EV battery operated by WSK and that for membrane and

coating lines for large-size consumer products will likely improve. The lines for the small-medium size consumer products will likely see lower utilization – the excess

capacity will be used to test the mass production capability for a new EV battery business and a power storage system.

WCP will likely see a favourable utilisation rate at both membrane lines and coating lines. Installation of CP5th & 6th membrane lines are currently underway.

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Sales by Region – trend and forecast

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY19 7-9月 FY19 10-12月 FY20 1-3月 FY20 4-6月 FY20 7-9月 FY20 10-12月計画

(¥mil)

中国 韓国 日本 米国 その他 合計

Q4 sales will be led by strong demand for EV battery separator and might surpass pre-revised FY20 sales forecast

Demand from Korean customers continue to remain strong. Preparation for mass production of a separator for a new EV business and a power storage

system is underway. Recovery of consumer products will likely need more time.

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Ⅲ． Market Trend

BEV/PHEV Growth Forecast by Region

Source: Macquarie Research

Demand for automobile battery was briefly affected by the COVID-19pandemic, but the awareness for the environmental issues and governments’subsidies will continue to boost demand.

Subsidies by European CountriesSubsidies ICE vehicles sales

regulation policy

UK Subsidises up to £3,000 for BEVs priced less than £50,000 until 2023

Ban on sale of ICE vehicles after 2035. Ban on entry by ICE vehicles in the Central London will likely be introduced by 2030.

FranceSubsidises €7,000 for BEVs priced up to €45,000, and €2,000 for PHEV priced up to €50,000 and with WLTP cruising range of more than 50km

Bans sale of ICE vehicles by 2040 (by 2030 in Paris).

Germany Subsidises €9,000 for a buyer of a BEV priced below €40,000 Bans sale of ICE vehicles by 2030.

TheNetherlands

Subsidises €4,000 for a consumer who buys or leases an EV. Also subsidises €2,000 for a used EV.

Aims to ban sale of ICE vehicles by 2030.

Others

Other examplesPoland: €9,900Romania: €11,100Croatia: €11,800

The EV Policy By the Chinese Government2012-14 Institutionalised the subsidy policy to promote sale of EVs

2015-16 Chinese makers exploited the subsidy system

2017Announced the 2018 introduction of the NEV regulation that obligates OEM makers to manufacture EVs. Due to opposition by the non-Chinese OEMs, the introduction of the regulation was delayed to 2019.

2017-19 Many fraudulent receipts of the subsidies were exposed, and the eligibility criteria became stricter. The amount of the subsidy was drastically reduced.

March 2020

Due to a sluggish sales, the Government announced the extension of the subsidy for 2 years with 10% pa. reduction in the amount after 2020. The subsidy is allocated for up to 2 million units with maximum price of vehicle RMB300,000.

U.S. policies moving

Democratic Party Biden's environmental policy(extracted from Biden's website)

Eliminate CO2 emissions by 2050

$5 billion investment in battery and energy storage technologies [DOE]

Installation of 0.5 million electric vehicle charging stations

Promote demonstration projects using electric vehicles as mobile energy storage unitsSupporting the development of domestic production capacity by accelerating research on battery technology

Achieve zero emissions for all American buses by 2030

0.5 million School Buses to Zero Emissions

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Ⅳ Appendix

Company Outline

Separator film

W-SCOPE KOREA CO., LTD.

Sumitomo Sseimei GotandaBuilding

Company Name W-SCOPE Corporation (6619)

President and CEO Won-Kun CHOI

Address of Head Office

Sumitomo Seimei Gotanda Building 10F 5-1-11 Osaki, Shinagawa-ku, Tokyo

Founded in October 2005

Business Activities Development, production, and sales of separators, a core component of lithium-ion secondary batteries

Capital ¥9,094 million (as in June 2020)

Consolidated earnings (FY19)

Sales: ¥13,167mil Operating Loss: ¥3,286mil

Number of Employees 1,019 staff members (As in June20)

Consolidated Subsidiaries

W-SCOPE KOREA CO.,LTD.W-SCOPE HONGKONG CO., LIMITEDW-SCOPE New Energy (Shenzhen) Co., Limited W-SCOPE CHUGJU PLANT CO., LTD.

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Ochang Plant 2019. 11

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Chungju PlantAs of October 2020

The 14th & 15th membrane lines for EV battery under construction

Membrane films essential for day-to-day lives of humans

Ion-exchange membrane Water treatment filte

Waterr

Air Irreversible filter

Energy

Redox Flow Battery Lithium-ion capacitor

Artificial dialyzerMedical

Dialysis filter22

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Disclaimer

This presentation includes predictions and forecast of W-Scope Corporation’s business and market trends in which it operates. There predictions and forecast are made based on currently available information, therefore, the actual result may differ due to various factors.

W-Scope Corporation makes no representations or guarantees regarding predictions and forecast in this presentation. Investment decision should be made using investors’ own judgement.