Medium-Term Management Plan

JGP2028
From FY2024 to FY2028
June 11, 2024
THE JAPAN STEEL WORKS, LTD.

[Note]The performance forecasts and other forward-looking statements included in this report are
based on the information that was available to The Japan Steel Works, Ltd. (the “Company”)
and certain assumptions deemed to be reasonable at the time this report was prepared, andthe actual results may differ significantly from these forecasts due to a variety of reasons.

2Composition of Business Segments and Major Products
Business
Segments

Industrial Machinery Products Business

Material and Engineering Business

Other Businesses

Organizations

Plastic Machinery B.D. / Injection Molding Machinery B.D.
/ Industrial Machinery B.D. / Ordnance Business H.Q.

Japan Steel Works M&E, Inc.

New Business
Promotion H.Q.

Hiroshima

Yokohama

Muroran

Nagoya (Meiki)

Production
Bases

Film and sheet
Manufacturing equipment

Pelletizers

Excimer laser annealing systems

Parts for nuclear
reactor pressure vessels

Rotor shafts
for generators

Clad steel plates

Steel rolls for steel mills

Products
Twin-screw extruders (TEX)

Plastic injection
molding machines

Markets

Plastic

Magnesium alloy injection Vacuum laminators
molding machines

Defense equipment(Maritime)

Components for offshore
Steel pressure vessels
wind power generation
Defense equipment
ECR plasma
Plastic injection molding
for hydrogen storage
construction
machines (Special machine) deposition systems (Ground)(Large Anvil for Pile driver)

MobilityHigh performancebattery

Electronic
Devices© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

DefensePower generationequipment

Renewable
EnergyInfrastructure

Photonics

3

INDEXPART 1

Review on JGP2025

PART 2Medium-Term Management Plan JGP2028

PART 3

Segment Policies© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

4

PART 1

Review on JGP2025
manamaPART 2Medium-Term Management Plan JGP2028

PART 3

Segment Policies© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

5

Review on JGP2025 Business Results（FY2023）
Industrial Machinery Products Business: While sales are strong, it is necessary to respond to the sharp
increase in orders and improve profits by maintaining and improving the in-house production rate.
Material and Engineering Business: Orders are strong even though net sales did not reach the target;
profitability is on track to improve due to optimized selling prices.
FY2023
Initial Plan

FY2023Results

Target/Results
Contrast

250

252.5

Same level

190

208.3

＋9.6％

50

41.9

–16.2％

20

18–10.0%

21

20.4

–2.8％

3.5

3.2

–8.6％

Operating income ratio (%)

8.0

7.1

–0.9PP

ROE (%)

8.5

8.5

Same level

Net sales (billion yen)
Industrial Machinery
Products Business
Material andEngineering Business
Operating income (billon yen)
Industrial Machinery
Products Business
Material andEngineering Business© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

6

Review on JGP2025 Capital investment, R&D investment (Until FY2023)
Although capital investment is progressing almost as planned, a major review ofinvestment plans is necessary to respond to increasing orders, including new
businesses, and to avoid lost opportunities due to facility breakdowns.
JGP2025
Initial Plan

Until FY2023
Results

Evaluation

Capital investment

45 Billion yen/Five Years

24.4 Billion yen/Three years

Almost as planned

R&D investment

30 Billion yen/Five Years

15.6 Billion yen/Three years

Almost as planned

Backlog changes during
the JGP2025 period

Major capital investment projects

Industrial
産業機械
400

Machinery

Company-wide
Material
素形材
全社
JGP2025
From FY2021 to FY2023

300

200

100

No.9 Assembly Shop (Hiroshima)
Assemble plastic injection molding machines/extruders

Recycling Technical Center (Hiroshima)
Conducting a chemical recycling test for plastics© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

0

FY2020

FY2021

FY2022

FY20237

Review on JGP2025 Basic Policies（Until FY2023）
4 Basic Policies
Towards the unprecedented generalmanufacturer of plastic
processing machinery in the world⚫ Achieve the No. 1 global market
share for existing products bystrengthening competitiveness⚫ Promote plastic processing
machinery complexification

Achievements

Evaluation
•
•

○

•
•
•

•

Make constant profit in Materialand Engineering Business

○

•
•
•

•

Create new core businesses⚫ New industrial machinery products⚫ Photonics⚫ Composite Materials⚫ Metallic Materials

△

•
•
•

•

Promotion of ESG management

○

•
•
•
•

Promoted product mix optimization and mutual complementation
at the Group’s production bases.
Pelletizers maintain top global market share.
Maintained and strengthened relationships with top global companies
for separator film manufacturing equipment.
Established a production & service base for injection molding machines
in Europe.
Increased production capacity at the Hiroshima Plant, the main plantfor plastic processing machinery.

Improvement in profitability through the optimization of selling
prices is on the horizon.
Reviewed product portfolio to improve profitability.
Strengthened quality assurance system (implemented measures toprevent recurrence of any misconduct in quality inspections).
Increased orders for power-gen related components, taking advantageof the opportunity presented by the global energy policy review.
Won orders for proposal-based development of defense
equipment (railguns*).
Expanded product portfolio by developing laser application products for
power semiconductors.
Commenced operation of a large-scale gallium nitride (GaN) substratedemonstration facility.
Commenced operation of the world’s most advanced copper alloymaterial production facility.
Established The Japan Steel Works Group’s philosophy systemwith “Purpose” as the starting point.
Identified important issues (materiality).
Strengthened environmental measures, including endorsement of the
TCFD.
Strengthened the monitoring function of the Board of Directors.
Increased the ratio of outside directors, and the ratio of female
directors & auditors (to ensure skills and diversity).

Issues still to be addressed
•

•
•

•
•

•
•

•
•
•

Increasing production capacity to meet sharp
increases in orders and sales, andmaintaining and improving in-houseproduction rate
Promoting global expansion and expanding
service business
M&A for business expansion

Preventing breakdowns by investing on the
aging core production facilities
Reviewing the product portfolio for stableprofitability

Establishing a production system for new
defense equipment and increasing production
capacity
M&A to strengthen the industrial machinery
products business

Enhancing information disclosure anddialogue with stakeholders
Strengthening the Group’s governance structure
Enhancing and strengthening human capital© THE JAPAN STEEL WORKS, LTD. All Rights Reserved. *Railguns: A future gun that uses electrical energy to fire bullets. It is expected to significantly increase
the initial velocity of bullets compared to conventional guns using gunpowder.

8

Review on JGP2025
Due to significant changes in the business environment (internal and external), we reviewed the planat the end of three years.
The new medium-term management plan aims to provide social value and increase corporate value
based on the corporate group philosophy system.
JGP2025
Internal
Environment

FY2021

FY2023

FY2022

FY2024FY2025

PurposeWe established a new corporate
philosophy for JSW Group[Our Philosophy]

VisionValue Creation Process
Identified Materiality

Global recession caused by COVID-19

External environment

Disruptions in global supply chains due to the invasion of Ukraine,
friction between the US and China, etc.

Increased security tensions in countries surrounding Japan
Occurrence of weather disasters and their extensive severity around the world
•
•

Plus

•

（opportunity） •
•
•

Minus
（risk）•••

Stable growth in global plastics demand
Aggressive investment in plastic and magnesium molding products due to theprogress of EVs
Increased demand for chemical recycling, etc. to meet plastic resource recycling
requirements
Return to nuclear power generation compatible with energy security anddecarbonization
Accelerated introduction of renewable energy generation
Reinforcement of defense capabilities to respond to the security environment inwhich Japan finds itself
Postponement or cancellation of various investment plans by customers due to
inflation or economic slowdown
Global increases in resource and energy prices due to supply chain disruptions, etc.
Delays in the procurement of various parts© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Formulated a new mediumterm management plan thatviews changes in thebusiness environment asopportunities

JGP
2028

9

Corporate Philosophy of The Japan Steel Works, starting with Purpose "Our Philosophy"

PurposeWhat is the JSW Group’s value?

Material Revolution
making the world sustainable and prosperous.

VisionWhat will JSW Group aim for?

Benefiting all stakeholders by developing and implementing
industrial machinery and new materials that solve social issues.

Value Creation Process
How can JSW Group provide value to realize the Vision?

JSW Group Core Competence
Melting, Mixing, and Solidifying

Machine Element and Precision Control

JSW Group will further refine its core competence, develop industrial machinery andnew materials that solve social issues, and supply them to the world, thereby
simultaneously creating social value and enhancing sustainable corporate value.
© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

10

PART 2Medium-Term Management Plan
JGP2028

PART 1

Review on JGP2025

PART 3

Segment Policies© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

11

FY2033 Our Vision
Purpose Material Revolution ®
Creating Value andSolving Social Issues
Realization of
a Plastic ResourceRecycling Society

Contribution to
a Low-Carbon
Society

Human Capital
Improvement andDEI&B

Investment in the
Future with
Innovation
Management

GovernanceReinforcement of
JSW Group

The Group will further refine its core competencies while
creating social value and sustainably increasing corporate
value through the Value Creation Process, which involves
the development and implementation of industrial
machinery and new materials that solve social issues.

JSW Group
Value Creation Process

Contribution toa Super-Smart
Society

Solving social issues throughmateriality management
Bolstering Management
Foundation for Sustainable GrowthMaterial Revolution ® ,making the world sustainable
and prosperous

Sustainability Targets
Contribute to the realization of asustainable and prosperous world
through the development andimplementation of industrial
machinery and new materials
that solve social issues.

Vision for FY2033
Achievesimultaneously

Financial Targets

Aim to grow into a corporate groupwith sales of 500 billion yen
Net Sales
OperatingincomeROE

500 Billion yen
50 Billion yen
11-12％

DEI&B
Diversity, Equity, Inclusions ＆ Belonging

We have changed the materiality “D&I” to“DEI&B” based on the belief that “E(fairness)” and “B (creating an environment
where employees can be themselves)” areessential, in addition to “traditional D(diversity) & I (inclusion)” for each
employee to reach his or her full potential.

VisionBenefiting all stakeholders by developing and implementing
industrial machinery and new materials that solve social issues.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

12

Positioning of Medium-Term Management Plan JGP2028 and Basic Policy
Reforms and challenges for new growth: Sustainably increase corporate value while resolving
materiality in order to realize our vision for FY2033.
JGP2025（Until FY2023）
4 Basic Policies• Towards the unprecedented
general manufacturer of plastic
processing machinery in the world• Make constant profit in Materialand Engineering Business• Create new core businesses• Promotion of ESG management

Financial Targets
FY2025 (Plan)
Net Sales
Operating income

ROE

270 Billion yen
27 Billion yen
10％

JGP2028
Improving corporate value while
resolving materiality• Realization of a Plastic Resource-Recycling
Society

Materiality • Contribution to a Low-Carbon Society• Contribution to a Super-Smart Society

Solve

Solve

Basic Policy ①

Basic Policy ②

Sustainable improvementof value of existing
businesses

Creating andnurturing new
businesses

Operating income

ROE

252.5 Billion yen
18 Billion yen
8.5％

Sustainability Targets
Contribute to the realization of asustainable and prosperous world throughthe development and implementation ofindustrial machinery and new materials
that solve social issues.

Achievesimultaneously

Financial Targets

Aim to grow into a corporate group withsales of 380 billion yen or more
Net Sales
380 Billion yen
Widening
Operating income
Equity37 Billion yen
Spreads
ROE
10-11％FY2023 (Results)
Net Sales

FY2033

Improve financial foundation
Basic Policy ③
Expanding investment inintangible assets, including
investment in people

Basic Policy ④Strengthening
corporate governance© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Financial Targets
Aim to grow into a corporate group withsales of 500 billion yen or more

Net Sales
Operating income

ROE

500 Billion yen
50 Billion yen
11-12％

13

JGP2028 Financial Targets (consolidated)
Aim to achieve a record operating income plan and widen the equity spread through sustainable growth.

FY2028Net Sales

380

ROE

Operating income

37

Billion yen

Billion yen

FY2023: Results

10-11％FY2026: Plan

FY2028: Plan

252.5

320

380

+50％

(Billion yen)

18

26

37

+106％

Operating income
ratio (%)

7.1

8.1

9.7

+2.6PP

ROE (%)

8.5

9.0

10-11

+1.5-2.5PP

Capital investment(Billion yen/year)
R&D investment(Billion yen/year)

8.1*

20

+147％

5.2*

8.2

+58％

Dividend payout ratio
(%)

30

35

+5PP

DOE (%)

2.0

2.5+0.5PP

Net Sales(Billion yen)

Operating income© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Change from FY2023*Average of three years from FY2021 to FY2023

14

JGP2028 Financial Targets (by segment)
Industrial Machinery Products Business
Molding
machines

Plastic production
and processing
machinery

Defenseequipment

Material and Engineering Business

Other

Material(Electronic devices)

Net Sales

Operating income

Net Sales（Billion yen）

（Billion yen）

208.3
Other
Defenseequipment
Molding
machines
Plastic
production
andprocessing
machinery

22.8
24.1
58.7

34.0

37.0

65.5
60.0

80.0

78.0
20.4

FY2023 Result

113.0

22.5

50.5

FY2026 Plan

123.0

FY2028 Plan

FY2026 Plan

8.0

FY2028 Plan

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

52.5
3.2

41.9

Internal Sales(Betweensegments)
FY2023 Result

7.5

49.8

32.0

Segment
Sales

102.7

（Billion yen）

Net sales including internal sales

51.0
68.0

Operating income（Billion yen）

318.0
266.0

Engineering

7.9

9.5

FY2023 Result

FY2026 Plan

13.0
FY2028 Plan

FY2023 Result

FY2026 Plan

FY2028 Plan

15

JGP2028 Non-Financial Targets (Targets for resolving materiality/KPI)
Materiality

Targets/KPI

Current major initiatives

Related
SDGs

Creating Value and Solving Social Issues through JSW Group’s Businesses
Realization of•
a Plastic ResourceRecycling Society[Offering]
Product provision and development[Renewable]- Twin-screw extruder for biodegradable plastics
Percentage of the relevant product to[Reduce]- Twin-screw extruder for biocomposites
FY2023 sales: 140%
[Recycle]- Twin-screw extruder for chemical and mechanical recycling(As of FY2028)[Under development][Recycle]- Global Standard (GS) specification twin-screw extruder- Mono-material film manufacturing equipment

Strengthen efforts

Contribution to
a Low-Carbon
Society••••- Strengthening of test acceptance at domestic and overseas technical centers

Reduction of CO2 emissions through[Offering]product lines[Zero CO2 emissions]- Spread of electric vehicles: LiB separator film manufacturing equipment
Percentage of relevant products to net- Spread of solar power generation: Pelletizers for panel protection film raw materials
sales in FY2023: 120%- Spread of nuclear power generation: Materials for major key components(As of FY2028)- Spread of offshore wind power generation: Materials for wind turbine construction materials
Reduction of CO2 emissions from
[CO2 emission reduction]
production activities: Over 45%- Energy-saving of equipment: Electric plastic injection molding machinescompared to FY2013 level- Spread of high-efficiency GTCC * power generation: Key component materials(As of FY2028)* Gas turbine combined cycle[Reference: FY2030 target: Over 60%] [Under development][CO2 emission reduction]- Support for giga casting: Ultra-large plastic and magnesium injection molding machines

Strengthen efforts

Contribution toa Super-Smart
Society[Recycle][CO2 emission reduction]- Establishment of a new magnesium injection molding machine technical center atoverseas bases

Improved performance and energy[Offering]- 3-stage vacuum laminator for next-generation package substrates [new product]saving of infrastructure equipment- Laser thermal processing system for power semiconductors [new product]
Increased performance of- Micro LA (laser annealing) system for sensors
input/output terminals- ELA system with floating stage
Percentage of the relevant product to [Under development] - GaN (gallium nitride) substrate
FY2023 sales: 180%
(As of FY2028)

Strengthen efforts- Development of new markets for laser-applied equipment© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

16

JGP2028 4 Basic Policies
Improving corporate
value while resolving
materiality• Realization of a Plastic Resource-Recycling Society

Materiality• Contribution to a Low-Carbon Society• Contribution to a Super-Smart Society

Solve

Solve

Basic Policy①

Basic Policy②

Sustainableimprovement of value ofexisting businesses

Creating andnurturing new
businesses

JGP2028
Basic Policy③

Expanding investment inintangible assets, including
investment in people

4 Basic
Policies

Basic Policy④

Strengthening corporate
governanceImprove financial foundation© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

17

Basic Policy① Sustainable Improvement of Value of Existing Businesses:
Key Strategies by Business Segment

Develop a key strategy that fits each business segment and sustainably
increase the value of existing businesses.

Key Strategies

Industrial
Machinery
Products
Business

Material andEngineering
Business• Plastic Machinery product group- Plastic production and processing machinery- Plastic injection molding machines, magnesium alloy
injection molding machines• Electronic Devices group- Laser application equipment, hot press devices,vacuum laminators, deposition systems• Defense equipment group- Various products for the Ministry of Defense and theJapan Coast Guard• Material product group- Material and engineering, etc.
- Defense equipment (AMV APC)

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

• Increase production capacity throughlarge-scale capital investment, andmaintain and improve in-houseproduction rate
• Promote global expansion• Deepen our core competence• Maintain and improve capital efficiency• Resolve materiality• Meet market needs related to power
generation equipment• Increase capital investment toenhance business sustainability• Maintain and improve capital efficiency
through product portfolio replacement• Deepen our core competence• Resolve materiality* For more information on each business, refer to“PART 3: Segment Policies.”

18

Basic Policy① Sustainable Improvement of Value of Existing Businesses: Hiroshima Plant
Increase Production Capacity for Plastic Machinery Products

Make large capital investments (plants and facilities) to expand production capacity
while maintaining the in-house production rate, which is one of our strengths.
JGP2028
FY2024FY2025

FY2026

Factory② (Provisional name) New No. 2 Machining Shop

① [No. 10 Assembly Shop]
Expansion and construction underway
Plastic Machinery

Affected
products

EffectFeatureEquipped with large cranes (ultra-large
size machines can be assembled)
2-story plant
Solar power generation installed on theentire roof

FeatureStart ofoperation

Scheduled for Jan 2025

Start ofoperation

Solar power
generation

6,754 ㎡ (including 2F: 303 ㎡)
1.1 GW/year (PV capacity 924 kW)③ (Provisional name) No. 4 Machining Shop

② [New No. 2 Machining Shop]
Construction preparation underway

Increase in-house assembly rate
Improve distribution

Total floor area

FY2028① No. 10 Assembly Shop

Construction, etc.

Affected
products

FY2027

EffectTotal floor area
Solar power
generation

Plastic Machinery
Increase sales of service parts for mediumsize extruders
Maintain and improve in-house machining rate
Respond to aging factories
Streamlined distribution by using lines; smart
factory model plants(Unmanned forklift trucks, visualization offacilities, people, and goods)
Solar power generation installed on the entire
roof
Scheduled for Apr 2026
8,852 ㎡ (including 2F: 338 ㎡)
1.5 GW/year (PV capacity 1,244 kW)© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

③ [No. 4 Machining Shop]
Reconstruction planning underway
Affected
products

Plastic Machinery

EffectIncrease sales of service parts for large
extruders
Maintain and improve in-house machining rate
Respond to aging factories

FeatureInstallation of large processing machines(ultra-large size parts can be manufactured)
Solar power generation installed on the entire
roof

Start ofoperation

Scheduled for Oct 2026

Total floor area
Solar power
generation

3,400 ㎡
0.7 GW/year (PV capacity 556 kW)

19

Basic Policy① Sustainable Improvement of Value of Existing Businesses:
Increase Production Capacity by Manufacturing in Optimal Locations and Mutual Complementation
Maximize production capabilities by optimizing the business and products of eachproduction base in implementing key strategies.
Main businesses: Molding machines,
electronic device product lines, andrailroad products• A plan to build a new plant is being
considered.
• The railway product business wastransferred from the Hiroshima Plant.
• Meets the increased production of
defense equipment lines.
The Meiki Plant merged into JSW in
2020 and was positioned as one of ourmain production plants, creating amutually complementary relationshipwith the Hiroshima Plant.

Japan Steel Works M&E, Inc.
Meiki Plant

Main business: Material product lines• Invest on the aging facilities to maintain manufacturing capabilities
of material products business.
• Meets the increased production of defense equipment lines.
Newly manufactures defense equipment with potential
synergies, such as the production of large welded structures.
The sheet equipment business was consolidated into
GM ENGINEERING CO., LTD. the company (became a subsidiary in 2019).
Develops products in collaboration with the Hiroshima
Plant.
Blow molding machines, excluding those for PFT (plastic gasoline
TAHARAtanks), were consolidated into the company (became a subsidiary in
MACHINERY LTD.
2006)

Hiroshima Plant
Main business: Industrial machinery segment
products in general• Made investments to meet growing demand forindustrial machinery segment products.
• Maintained and improved in-house production rate,a source of its strength, by building an assemblyand machinery plant: Nikko Techno Co., Ltd.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Yokohama Plant

Main business: Electronic device
product lines• JSW AFTY Corporation (became asubsidiary in 2014) was moved tothe plant.
Electronic device-related products
were consolidated to strengthen
collaboration: JSW Aktina System
Co., Ltd., JSW AFTY Corporation• Meets growing demand for plastic
machinery product lines: Nikko
Kouki Co., Ltd.

20

Basic Policy① Sustainable Improvement of Value of Existing Businesses:
Promote Global Expansion by Strengthening Local Production

PolandGermany

JSW Plastics Machinery Europe Sp. z o.o.

• Injection molding machines: Meet quick turnaround times- Large machines: Knockdown production- Small and medium-sized machines: In-stock machine sales(Established in 2022)

South Korea

SMPLATEK Co., LTD.

• Manufacture of global standard twinscrew extruders at a competitive price• Twin-screw extruder technical center(Became a subsidiary in 2015)• Capable of developing and testing a wide
New Jersey Technical &• Strengthening the production system America Distribution Center
variety of processes, including
and expanding production capacity
compounding, devolatilization,• Injection molding machineand dehydration
JSW Machinery (Ningbo) Co., Ltd.
China
technical center(Opened in 2017)• Manufacture of small injection molding- Injection molding machinemachines (Established in 2010)
Suitable for short delivery times• Production has expanded to include
India- Large machines:
Knockdown production• Technical center to be established medium-sized machines.
- Small and medium-sized machines:• Taps into the demand of India’s huge
In-stock machine sales
market while utilizing local subsidiary Japan(Established in 2022)
Steel Works India Pvt., Ltd. (established in2009) and expanding their functions.
Extrusion Technical Center

Key regions are Europe and India.
© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

* Sales locations are excluded.
21

Basic Policy② Creating and Nurturing New Businesses
Strengthen existing businesses by developing elemental technologies and create innovative technologies
through basic technology research.
Development of elemental technologies inlaboratories established at the three plants
Strengthen existing products and resolve
materiality by deepening core technologies
through elemental technology development inclose collaboration with plants.
Formulation and implementation of a businessspecific intellectual property strategy
Formulate and implement a strategy that createsvalue in each business from an intangible asset
utilization perspective through a company-wide
IPE structure.*1
Sustained development of R&D personnel andstrengthening of technological capabilities
Strengthen partnerships with universities andresearch institutes in Japan and overseas topromote sustainable human resource
development and technological advancement by
earning a doctorate degree, etc.
*1 Intellectual Property Executive (IPE) System:
A system in which an intellectual property
manager is assigned to each business division toformulate an intellectual property strategy basedon the business strategy

Deepening
core
technologies

Creating andnurturing new
businesses

Strengthen existing
businesses bydeveloping elemental
technologies

Create innovativetechnologies throughbasic technology
research

Planning to establish a new R&D center todevelop innovative technologies
Establish a new laboratory within the mediumterm plan period that is not attached to a plant,
and that conducts research and development ofinnovative technologies that do not adhere toexisting products or core technologies.
Creating innovation by leveraging diverse
human resources
Encourage the creation of innovativetechnologies and new businesses through theaccumulation of diverse human resources(values) from inside and outside the company
and the promotion of entrepreneurship.
Efficient new product and market
development through IP analysis*2
Examine the company’s strengths, market
trends, and R&D direction through IP analysis
to efficiently develop new products and newmarkets.

Creating
innovativetechnologies*2 IP analysis: IP landscapeAnalysis of management andbusiness information
incorporating IP information

Strengthening the management foundation for the sustainable growth of our group

Resolutionof Materiality

Investment in the
Futurewith Innovation
Management

FY2023 results
R&D cost (annual average for the¥5.2 billion/year
medium-term period)
14% (Innovation Management
Doctoral ratio
Headquarters)
Investment of R&D costs with the goal of “contributing to a super-smart society”
Number of patent applications and external publications© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

FY2028 targets

Related SDGs

¥8.2 billion/year
16% (Innovation Management Headquarters)
Double R&D investment focused on megatrends
Increase by 40% or more compared to FY2023

22

Basic Policy③ Expanding Investment in Intangible Assets, Including Investment in Human
Resources (Human Capital Strategy)
Achieve sustainable growth and increase corporate value by fostering diverse individuals andmaximizing organizational results.

Passing on and DX of sales, design, and manufacturing
technologies, skills, and know-how
Pass on proprietary technologies and skills; systemize tacitknowledge with DX.

Human resource strategy toachieve the businessportfolio strategy

Reform towards an organizational culture that encourages
challenge
Create a culture where challenges are rewarded by leveraging
opportunities for continuous problem-solving through anorganizational culture reform project.
Spreading the purpose and promoting DEI&B (basic
environment development)• Promote dialogue that aligns with the purpose and realizes
its connection to the business.
• Prioritize the creation of an environment where all
employees work fairly and are valued and recognized as
individuals by fostering a culture and building systems that
respect DEI&B.

Creating a work
environment that increases
engagement

Improveproductivity

Createinnovation

Increase corporate value

Developing individual skills and strengthening organizational(management) capabilities
Create a mechanism to link growth in individual skills toorganizational growth.

Maximize the value of humancapitalSecuring human resources that match the business strategy
Continue to hire diverse human resources to meet businessstrategies, including new graduates, experienced workers,
women, people with disabilities, and foreign nationals.

Strengthening the management foundation for the sustainable growth of our group
FY 2023 Results

Resolutionof Materiality

Human Capital
Improvement andDEI&B

FY 2028 target

Organizational culture reform project in progress
Percentage of female managers/percentage of womenamong assistant managers
Percentage of male employees who took childcare leave
DX project activities in progress© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Related SDGs

Reduce workload, improve engagement, and selectyoung high performers early
2.0%/9.9%

5.0%/15.0%

88%80% or more continuously
Improve business processes and create new businessmodels with DX

23

Basic Policy③ Expanding Investment in Intangible Assets, Including Investment in Human
Resources (Human Capital Strategy)
Increase productivity and provide new value to society by implementing the DX strategy.
Production
processreformExplore new business
opportunities
Manufacturing infrastructure
innovation

New solutions with DX• Improve efficiency in design,
production, and administration
divisions; streamline and DX the value
chain• Realize smart factories- Visualization of people, goods, andconditions; automation

Internal(within thecompany)

Increaseproductivity*1• Provide- AI-based molding support,
factory management, etc.
• Provide cloud services- Services through a dedicatedcustomer website

Provide newvalue

Digitization of operations, IT literacy

Organizationaland operational
reform• Reform organizational culture- Introduction of an overall
optimization-oriented system• Realize data-driven management• Provide IT literacy education andreskilling programs

Digitalization of operations*1 “J-WiSe” is an IoT solution that
supports customers in shifting tosmart factories. It consists of“Production Control,”“Service/Maintenance,” “Operation
Support,” and a “Production
Automation System.”Outside thecompany(society/customers)• Sophisticate customer response systems- Use of CPQ, SFA, and CRM*2• Digitalize measurement and inspection- Automation of measurement,
Existing businessinspection, and record keeping
transformation

Deepen existing (core)businesses© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Provision of
new value*2 CPQ: Configure Price Quote
SFA: Sales Force Automation
CRM: Customer Relationship Management24Basic Policy④ Strengthening Corporate Governance: Review the Officers’ Remuneration System
Partially revised the officers’ remuneration system to strengthen the incentive function for
medium- and long-term improvement of corporate value and to further promote thesharing of interests with shareholders.
Basic policy on officers’
remuneration

Rate of composition of remuneration for the president (reference value)
Before revision

1. Provide the incentive function forsustainability management torealize our Purpose and Vision
2. Make a remuneration system that
corresponds to the respectiveroles and responsibilities

Short-term incentives 35％
Fixed Remuneration

55％

Fixed Remuneration

55％

Evaluation of the achievement
rate of consolidated operating

Evaluation of the achievement rateof consolidated net profit

profit 17.5％

17.5％

Long-term
incentives(stock-based
remuneration)

10％

Incentives for the
medium- tolong-term
improvementof corporate value

Incentives for improved performancefor a single year

35％

10％

After revision

3. Ensure objectivity andtransparency in the remuneration
determination process
4. Make a remuneration systemthat shares interest withshareholders

Short-term incentives 33％
Fixed Remuneration
55％

Evaluation of theachievement rateof consolidated
operating profit

11.5％

Fixed Remuneration
55％© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Evaluation of
ROE achievement
rate

11.5％

Incentives for improving
performancein a single fiscal year
23％

Evaluation of initiatives
for medium- and longterm measures(including materiality
resolution)

Long-term
incentives(stockcompensation)

10％

12％

Incentives for mid- to long-term
corporate value improvement

22％

25

Basic Policy④ Strengthening Corporate Governance: Others
Sustainably increase corporate value by improving the feasibility of the sustainability
and financial targets while reducing corporate management risks.
Diversify the skill map based on materiality and increase the ratio of outside and female directors to improve supervisory skills.

Increase diversity of the Board of
Directors and Audit &Supervisory Board

Board of Directors* Scheduled following the General
Meeting of Shareholders on June 24

Scheduled for June
2024*

Audit & Supervisory Board
Scheduled for June2024*

As of June 2021

As of June 2021

Ratio of outside directors(5 people/50%) (3 people/33%)

Ratio of outside auditors(2 people/50%) (2 people/50%)

Ratio of female directors(2 people/20%) (0 people/0%)

Ratio of female auditors(1 person/25%) (0 people/0%)

Promote risk management

Establish a Risk Management Group in the Corporate Planning Office to further strengthen group governance.
Promote company-wide risk management activities, including affiliates, to improve the Group’s sustainability.

Reduce policy shareholdings

In accordance with our Corporate Governance Policy, in addition to selling shares of diminished value, continue
to reduce our policy shareholdings to 10% or less of consolidated net assets, a level that is widely understoodby investors, as we believe it is appropriate to do so.
Strengthening the management foundation for the sustainable growth of our group

Resolutionof Materiality

GovernanceReinforcement of
JSW Group

FY 2023 Results
Ratio of outside directors/female directors 44%/11%
Risk Management Team’s activities
IR at interim and year-end closing, SR, etc. as appropriate
Reduction of policy shareholdings
13.4% of consolidated net assets© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

FY 2028 target

Related SDGs

50%/20%Strengthen group governance: Establish a new organization
Improve information disclosure and dialogue with stakeholders
10.0% or less26

Positioning of the Basic Policies for a Sustainable Increase in Corporate Value
The basic policies of JGP2028 are linked to the widening of the equity spreadas follows and aim to increase corporate value by achieving these policies.
Sustained
improvement in
ROE

Widening of theequity spread(ROE − Cost of equity)

Basic Policy ①

Business
portfolio
strategy

Sustainable improvement ofvalue of existing businesses

Basic Policy ④

Basic Policy ②

Creating and nurturing new
businesses

Basic Policy ③
Expanding investment in intangible assets,
including investment in people

Reduction incost of equity

Strengthening IR and SR activities
Strengthening risk management

Recognition of our cost of equity (CAPM)

ROE
The goal: 10-11%（％）

Risk-FreeRate
10-year
JGB yield＝＋

β value
Our market
sensitivity

Cost of equity
capital(reference value)×Strengthening
corporate
governance

Equity Risk
Premium
Estimated fromshareholder
composition

Recognized as 8.0%

12
10

Aim to further
expand equity
spread8
Cost of equity capital about 8%

6
4© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

FY19

FY20

FY21

FY22

FY23

FY26

FY28

27

Business Portfolio Strategy
Increase company-wide ROE by widening the ROIC spread of each business.
Average of FY2021 to FY2022

FY2028 plan

* Size of the circle indicates net sales.

Sales Growth Rate

Sales Growth Rate

* Size of the circle indicates net sales.

DefenseEquipment

Electronic
Devices
Products
Group

Plastic
Machinery
ProductGroup

DefenseEquipment
Expanditems
through
R&D

Electronic Devices
Products Group

Material andEngineering

Plastic
Machinery
Products
Group

Material andEngineering
ROIC Spread

ROIC Spread

Plastic Machinery Product Group

Industrial machinery segment (plastic manufacturing
and processing machinery, molding machines)

Electronic Devices Product GroupDefense Equipment

Industrial machinery segment (defense equipment)

Material and Engineering© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Industrial machinery segment (electronic devices) + otherbusiness segments
Material and Engineering Segment* ROIC spread = ROIC by business − WACC by business28

ROIC Tree (Example of the Industrial Machinery Products Business)
Create an ROIC tree for each business as each business has different characteristics.
Set process KPIs for the ROIC tree beforehand to establish it at each level to increase effectiveness.
Process KPI (example)
Improvementof ROIC

Return on
invested capital

Return on sales

Return on investment

Net sales/revenue

Sales growth rate

Expand plant production capacity/review product portfolio

Overseas sales revenue

Revenue from sales
at overseas bases

Expand into growing markets/increase market share by meetingcustomer needs

Expansion ofoverseas bases

Establish overseas bases (including local trading
companies) and technical centers

R&D productivity

R&D investment
efficiency

Establish strategic patent network/develop high valueadded products

Manufacturing
cost rate

Procurement cost
reduction

Reduce costs through design improvements/appropriately
manage delivery dates

Additional cost
reduction

Reduce defects through design standardization/improve
estimation accuracy

Manufacturing
expense ratio

Reduce outsourcing costs through process management/
appropriately manage labor costs

SG&A ratio

General corporate
cost reduction

Reduce overtime by improving operational efficiency/
make efficient non-financial investments

Working capitalturnover ratio

Contract liability(advance payments)

Promote contracts with payment terms with a large
percentage of advance payments

Inventory turnover
ratio

Reduce unnecessary inventories and lead time

Receivables turnover
ratio

Accelerate collection of delinquent receivables/quickly
respond to retention items

Production efficiency
improvement

Promote smart factories/make capital investment
decisions based on NPV method

Net operating profit after tax
Invested capital

Invested capitalturnover ratio

Actions in the division(example of the Industrial Machinery Products Business)

Fixed asset
turnover ratio

Increase company-wide ROE by widening the ROIC spread of each business.
© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

29

Initiatives to Reduce the Cost of Equity (Strengthening IR and SR Activities)
Fully disclose information by disclosing initiatives to increase corporate value andpromoting dialogue, and share obtained evaluations and feedback with management
and the Board of Directors for further engagement.

Medium-Term
Management Plan
Interim and year-end
financial results briefing
Business briefing
Individual interview

We will proactively disclose information to mitigate information asymmetry,
including business overview and environment.
We will also disclose the progress of the Medium-Term Management Plan as
appropriate.

Response

President
Vice President
IR Division

Stakeholders

Enhanceddisclosure on thecompany’s website,
etc.

Summarize
dialoguestatusResponse

Report to thedirectors (fourtimes a year)

IR/SR Division

Strengthening of voluntary
disclosures and press
releases

Response
SR Division© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Regular feedback to
management andBoard of Directors

Board ofDirectors to
identify andaddress
expectation
gaps

Disclose thestatus of
dialogue andresponse• Discussions and actions to
identify and eliminate investor
expectation gaps at Board of
Directors’ meetings.
• The status of the dialogue will
also be disclosed in the future.

30

Cash Allocation Plan
Of the 257.0 billion yen in funds available for distribution, approximately 88% will be used forcorporate growth, mainly for capital investment.
At the same time, we will reward shareholders by raising the consolidated dividend payout ratio, etc.
Total of JGP2028 (FY2024 to FY2028)

Funds

Uses
Increase in
Working Capital
45 billion yen

Funds generated
from operating
activities

210 billion yen
Procurement ofinterest-bearing debt
Utilize interest-bearing
debt to the extent that
financial soundness ismaintained.
Monetization of
investment securities

7 billion yen

Before deductions of;• Working capital• R&D investment• DX Investment

Increase inworking capital•

Increase net sales and defense equipment with long work-in-process
period.

Research andDevelopment
Investment

R&D investment••

Plan about 1.5 times that in JGP2025.
Strengthen investment in priority areas (contribution to a super-smart
society).

41 billion yen

Capital investment ••Plan about 2.5 times that in JGP2025.
Strengthen investment to expand production capacity in the plastic
machinery product line.
Strengthen investment on the aging core production facilities for thematerial product line.
Upon investing in production expansion, verify whether the investment
will contribute to increasing shareholder value using the NPV method.

•

Capital Investment

100 billion yen

DX Investment
16 billion yen
Interest-bearing
debt financing

20 billion yen

Utilization of existing
cash and deposits

20 billion yen

Shareholder
Returns
30 billion yen
M&A Investment

25 billion yen© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

•

DX investment•••

Plan about 3 times that in JGP2025.
Improve operational efficiency with DX for manufacturing,administration, sales, etc.
Develop new AI/IoT products with DX.

Shareholder return ••Consolidated dividend payout ratio: 30% or more → Target 35% or more
DOE: 2% lower limit → 2.5% lower limit

M&A investment

In principle, consider M&A only in businesses where further growth canbe expected by leveraging our core competencies.

•31PART 3

Segment Policies

PART 1

Review on JGP2025

PART 2Medium-Term Management Plan JGP2028© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

32

Segment Policies
Segment
Industrial Machinery Products Business

Segment

Targeted Business Portfolio

Material and Engineering Business

Plastic Production and Processing Machinery

FY2028 Plan

Material

Engineering
Contribute to capturing internal andexternal base construction orders andthe improvement of production
responsiveness of defense equipment.

Sales Growth Rate

* Size of the circle indicates net sales.

To meet market needs for power –genrelated products, invest on the aging
core production facilities to improve
profitability.

Defense Equipment

Expanditems
through
R&D

Plastic
Machinery
Products
Group

Engineering

Segment

Other Businesses *Put new businesses, such as thephotonics business, on track and develop
them into our future core businesses.
* The “Other Businesses” segment is included in the electronic device product line in terms of business portfolio.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Accelerate growth through focusedinvestments, expand the service business,and expand the plastic processing machinerycomplex to increase corporate
Plastic Machinery
value.
Products Group

Molding MachineElectronic Devices
Products Group

Material andElectronic Device
Products Group

Plastic Machinery
Products GroupROIC Spread

Define priority regions for each product,such as Europe and India, to achievesustainable growth by expanding global
market share.

Defense Equipment
In accordance with the national security
strategy, steadily improve theproduction system to meet
Electronic Device
the growing demand.

Products GroupElectronic Devices
Expand and stabilize the business scaleby broadening the product portfolio
through market launches of developed
products.

33

Industrial Machinery Products Business

Plastic production and processing machinery

As JSW’s core business, increase corporate value by accelerating growththrough focused investments.
Key Measures

1.

Accelerate growth with focused investments

2.

(1) Plastic production machinery

Expand the service business• Increase production capacity and expand sales in focused regions(pelletizers, twin-screw extruders)(India, Middle East, China, Japan).

• Achieve both sales growth and improved profitability by increasing
production capacity.

• Capture growth markets, such as India, by strengthening global

3.

expansion.

Promote the expansion of the plastic
processing machinery complex(2) Film and sheet manufacturing equipment• Expand our business scale through M&A (alliances) that leverage• Capture separator film demand, which will grow in the medium tosynergies with our broad range of plastic processing machinery.

long term.

• Expand the lineup of functional materials and packaging materials.

ResolutionofMateriality

Realization of a
Plastic ResourceRecycling Society

Contributing toa Low-Carbon
Society• Expanding chemical and mechanical recycling with twin-screw extruders• Expanding recycling through the mono-materialization of films• Contributing to low carbonization by providing equipment for renewableenergy, EVs, etc.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

34

Industrial Machinery Products Business

Plastic production machinery
Maintain strong performance against a backdrop of increased demand for plastics;
respond to increased demand by strengthening production capacity.
Sales trends and forecasts for plastic production
machinery (pelletizers, twin-screw extruders)

Initiatives to strengthen global expansion(Index: FY21 = 1.0)
Pelletizers
造粒機

2.4

Twin-screw extruders
二軸混練押出機

1.7
1.0

FY2021
22.3期

FY202223.3期

FY202324.3期

FY202425.3期
forecast
予想

FY202526.3期
予想
forecast

FY202627.3期
予想
forecast

FY202728.3期
予想
forecast

FY202829.3期
予想
forecast• There is no change in the trend of increasing global demand for plastics

against the backdrop of population growth and economic growth.
Plastics can reduce CO2 emissions by making good use of theircharacteristics (lightweight, gas barrier properties, electrical insulation, etc.),
and are therefore effective in solving social and environmental problems.
• In China, they will continue to make capital investments for the domestic
production of plastic raw materials.
In addition, in emerging countries such as India and the Middle East,
demand for plastics is increasing in line with economic growth, and there isa move towards the domestic production of raw materials.

• Demand for polyolefin elastomer (POE) and ethylene-vinyl acetate (EVA) as
raw materials for solar panel encapsulants is expected to increase due tothe increasing adoption of renewable energy. Orders for medium to ultralarge twin-screw extruders are on an increasing trend.

Polyolefin elastomer (POE) demand forecast(Unit: 1,000 tons)
4,000

Solar cell structure andencapsulant films

2,000

0
2022

2023

2024
forecast
予想

2025
forecast
予想

2026
forecast
予想

2027
forecast
予想

2028 (year)
forecast
予想(POE/EVA)(Created by JSW based on various materials)© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

35

Industrial Machinery Products Business

Plastics processing machinery
Demand for EV batteries is expected to rise in the medium to long term,
but is currently in adjustment phase.
EV sales by region (Stated policies scenario）
中
国
China

欧
州
Europe米
国
United日Japan本

イIndiaン ド

そOtherの 他◼

States(million vehicles)

63.5

◼

60.0

50.0

45.0

From FY23

◼

890%
40.0

28.0
From FY23

From FY23

10.0

From FY23

6.80%

30.0

20.0

Capturing the demand for separator film in response to
the trilateral structure of the global market

460%

19.6

300%

14.1
1.4
3.4
8.4

From FY23
From FY23

19.1

300%

24.8

230%

Trends in Sales of Film
& Sheet Manufacturing
Equipment(INDEX: FY21＝1.0)

0.0
2023

◼

Growth in EVs is currently in a correctional phase, but the medium to long-term
growth trend is continuing. However, the market is splitting into three district
regions: the United States, Europe and China.
In China, competition among EV manufacturers is intensifying, sparked partly
by the economic slowdown and excess supply. Even though EVs continue toaccount for a growing percentage of new car sales, new investments are at astandstill.
In the United States, efforts are underway to build supply chains within theregion not reliant on China. Meanwhile, the focus on the impact of the US
presidential election is a concern.
Sales of the Company’s production equipment for battery separator films should
be maintained at a certain level in the future with capital investments
continuing with an eye to medium to long-term growth in EVs. For applications
beyond separators, such as the ones for industrial use, film and sheet
equipment and after-sales services are being strengthened.

2030

1.4

1.0
0.5

2035 （year）* The figures include PHEV as well as BEV.
Created by our company based on Global EV Outlook 2024, IEA© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

forecast

forecast

forecast

forecast

forecast36

Industrial Machinery Products Business

Molding machine

Achieve sustainable growth by expanding global market share.
Key Measures
1.

Plastic injection molding machines2.

Position Europe and India as key
regions for future sales expansion.

Magnesium injection molding machines• Expand large machine series that meet thegrowing demand for magnesium components
for automotive applications, against a backdropof lighter weight, higher recyclability, larger
displays, etc.

• Europe: Accelerate the adoption of electricmachines to meet rising energy costs andthe need to reduce CO2 emissions.

• India: Establish a technical center toincrease our presence and strengthen sales
and service networks.

3.

Improve product competitivenessby incorporating AI/IoT functionality• Remote maintenance (North America and Asia)and productivity improvement with smart
molding machines (Japan): Injection molding machine service
agents in India• Contributing to a low-carbon society by expanding sales of electric machines with

ResolutionofMateriality

Contributing toa Low-Carbon
Society

Realization of a
Plastic ResourceRecycling Society

superior energy-saving performance• Realization of a resource-recycling society through molding technologies supporting
various recycled materials and bioplastics• Contributing to energy saving by reducing the weight of automotive parts to improvefuel and electricity costs© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

37

Industrial Machinery Products Business

Molding machine: Plastic Injection molding machine
Demand to replace hydraulic systems with electric systems is on the rise in Europe due to rising
electricity costs and the increasing need to reduce CO2 emissions.
Capture demand by leveraging the strength of our entire line of electric injection molding
machines, from small to large.
Percentage of molding machine electrification
100%
80%

[Japan] Small to medium size

• Leverage the large electric machine assembly and service capabilities of our Poland
base, established in FY2022, to capture the growing need for electrification in Europe.

[Japan] Large size

• Expand global sales by strengthening support for overseas customers through the

60%[Europe] Small to medium size
40%
20%
0%

FY2022

FY2021

expansion ofElectrification rate
expected to increase[Europe] Large size

22.3期

Expanding sales of electric machines and capturing emerging markets

23.3期

FY2023
24.3期.

• Improve the level of service quality through collaboration between remote services
from Japan and local service staff to establish the same service system worldwide andimprove customer satisfaction.

Comparison of hydraulic and electric systems
Power consumption [kWh/h]

CloudInternet

Hydraulic oil consumption [L]60%
reduction

98%
Electric

HydraulicEuropereduction

Asia

Japan

North
America
Latin
America(Our trial calculation is based on the assumption of a large-size electric machine(clamping force of 850 t).)© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

38

Industrial Machinery Products Business

Molding machine: Magnesium injection molding machine
The market size is expected to expand due to the need for larger in-vehicle displays and lighter
vehicles with the growing trend of EVs.
Expand the lineup of large to ultra-large magnesium injection molding machines and offer them tothe market.
Global automotive display market size forecast

Expanding product lineup to meet needs• Develop and introduce new models targeting large automotive component products.

(Unit: 100 million dollars)

153.0

180.0
120.0

89.8

93.2

2022
2022年

2023年
2023
forecast(予測)

Ultra-large magnesium injection molding machine:
JLM3000-MG ll eL

60.0
0.0

• Launch region-specific machines in Europe, the US, Southeast Asia, India, etc.

2031
2031年
forecast(予測)*1 Business operators’ net sales basis. *2 Forecast values for 2023 and 2031.
*3 LCD-TFT, AMOLED, and Mini/Micro LED for automotive CID, Cluster, RSE, HUD, and Mirror are covered.
Note that CID and Cluster include those for Digital Cockpit (Pillar to Pillar Display/Multi Display).
Also, the market size does not include commercial products, and only genuine products are covered.
(Source: Yano Research Institute Ltd., “Research on the Global Automotive Display Market (2023)”(released September 20, 2023))

Magnesium usage for automobiles
600

380

200

177

173

2005
2005年

2010
2010年

239

know-how, etc. by utilizing our group company which manufacture molded
magnesium parts.

Features of magnesium products
Rigidity: Higher than iron

(Unit: Thousand tons)

400• Develop new markets for molded products by supporting customers with molding

530

260

Magnesium

From the website of the Japan Magnesium Association(Source: Excerpts from CM Group presentation materials)

2020
2020年

Weight comparison with same dimensions(long tray sample)
Weight: 4 kg
Iron

Boardscarrying thesame weight-70%
Magnesium

0
2015
2015年

Weight: Lighter than iron

列2

2027年
2027
forecast
（予測）

2037年
2037
forecast（予測）© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Iron

Weight: 1.2 kg

In-vehicle equipment(sample)39

Industrial Machinery Products Business

Defense equipment

Steadily improve the production system to meet the growing demandin accordance with the national security strategy.
Key Measures
1.

Work to address defense priority
areas as defined by the government(1) Conventional products (e.g., artillery)

Production Bases
Manufacturing defense equipment, with Hiroshima
and Muroran being the main production bases.
Other locations can also be used depending on
circumstances.

• Expand the supply capacity by developing and expanding
production bases.

(2) Next generation wheeled armored vehicles• Steadily build a production system for mass production.

2.

Hiroshima: Systems development,
processing, and assembly technology

Work for research andprototyping of future devices

Yokohama
Plant• Strengthen the railgun development system and ensure that
research and prototyping is carried out for future equipment.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Meiki Plant

Maintenance businesslocations for artillery andvehicles, etc.
(overhauls, repairs, etc.)

Muroran: Materials development andmanufacturing technology

40Industrial Machinery Products Business

Defense equipment
Expansion of the Mid-term Defense Program(material expenses)(Unit: Trillion yen)
50

Approx.

43.5 Trillion yen• As the only manufacturer of artillery in Japan, manufacture various types of artillery, missile
canisters, etc.

• Develop and supply advanced defense equipment by utilizing our Muroran Plant’s material
development and manufacturing technologies, with Hiroshima Plant as the final assembly plant.

• The scale of the business is expected to more than triple compared to FY2023 due to the expansionof the defense buildup program.

40• Steadily build a production system and strengthen the supply chain to meet increasing demand.

7 Focus
Areas

30

Main
products

Major defense equipment for the Ministry of
Defense (including overhaul and repair services)

Nextgeneration
products

Approx.

Image of nextgeneration APC(Source: Japan Ministryof Defense website)

35

20

10

Approx.

7 Focus
Areas

Approx.

110

Trillion yen
Type 19155 mmWheeled SPH

17.2 Trillion yen

Trillion yen
Medium Term
Defense Program(FY 2019 - FY 2023)

105 mm Tank Gun 120 mm Tank Gun(Type 10 MBT)
(Type 16 MCV)
(Source: JGSDF website)

Approx.

3 timesEstablish a production system at
the Muroran Plant for mass
production and supply.

62 caliber 5-inch naval Gun(Source: JMSDF)

Medium Term
Defense Program(FY 2023 - FY 2027)© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Missile Canisters(Photo: Type 12 SSM)
(Source: JGSDF website)

R&D

Aim to equip next-generation
products through proposalbased development.

Prototype railgun(Source: Photo fromAcquisition, Technology,
and Logistics Agency
website)41

Industrial Machinery Products BusinessElectron devices

Expand and stabilize our business scale by expanding our product portfolio throughthe launch of developed products.
Key Measures

1. ELA equipment for displays(conventional products)• Launch the world’s first 8th generation (G8) substratecompatible equipment and increase our market sharewith high quality and high productivity.
★Development of laser application equipment
Leverage laser
annealing knowledge
and technology.

ELA equipment
for displays

ResolutionofMateriality

Laser
applicationequipment

Contributing toa Low-Carbon
Society• Develop equipment for
power semiconductor
manufacturing.
• Fully enter thegrowing power
semiconductor market.

Contributing to a
Super- Smart
Society

2. Press machines forprinted circuit boards• Expand overseas where future demand is expected to
grow (focus areas: Asia, Southeast Asia, India).

3.

Laminators for semiconductor
package substrates

New 3-stage vacuum laminator• Launch new laminators to increase market share in the
expanding data center market.

• Contributing to the realization of power semiconductor devices that

improve the cruising range of EVs• Contributing to the production of automated automobile driving andnext-generation display products© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

42

Industrial Machinery Products BusinessElectron devices： Laser application equipment
ELA equipment for displays is moving to the 8th generation with higher performance and productivity.
Demand for next-generation power semiconductors is growing as automobiles become more electrified andautomated.
Demand for laser annealing equipment for semiconductor manufacturing is expected to grow over the long term.

Sales trends and forecast for laser application equipment(Index: 2023 = 1.0)

(Index: FY23 = 1.0)
2.0

ELA

1.5
1.0
0.5
0.0

Semiconductors, etc.

0.1

6.0

0.2
0.4

0.1

0.5

0.1
0.9

Market scale forecast for next-generation power semiconductors (SiC)

1.2

1.6

1.6

5.0
4.0
3.0

1.4

1.3

FY202425.3期

1.0
FY202526.3期

FY202627.3期

FY2027
28.3期

5.1

2.0
0.0

FY2023
24.3期

5
times

FY2028
29.3期

1

1.2

2023年
2023

2024年
2024

1.8
2025年
2025

2.5
2030
2030年

2026年
2026

(Created by JSW based on various materials)

Expanding semiconductor equipment based on display equipment• We delivered the world’s first laser annealing equipment (F-ELA) that applies a float-type transfer system to a panel

manufacturer in China in 2023. Its productivity was highly valued and we received orders for multiple units to support 8th
generation substrates in 2024. Demand is expected to continue in the future.
• Leveraging our technical expertise in laser annealing, develop and launch equipment for the heat treatment process of SiC
substrates, the next generation of power semiconductors, to meet growing demand armed with our productivity that ismore than twice that of conventional equipment.
• Expand our service business by introducing new products and utilize the service system established for ELA to keep pacewith market expansion.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Laser annealing equipment
for semiconductors

43Material and Engineering Business

Material and Engineering Business

Invest in the renewal of aging equipment to meet market demands andfurther improve profitability.
Key Measures
1.

Capture demand for forged steel products related
to power generation equipment

Power generation mechanisms and JSW’s forged steel products• Securely capture ultra-large forged steel products for nuclear power
generation, offshore wind power generation, and other applications
that help reduce CO2 emissions.

• Respond to robust demand for forged steel products for high-Primary system(steam generation)
Steam generator

Secondary system(generation of electricity)
Steam turbine
Generator

Pressurizer

efficiency thermal power generation.

2.

Investment in the renewal of aging core production facilities
Steam• Aim to maintain manufacturing capabilities, improve efficiency, and increase
profitability by investing on the aging production facilities.

ResolutionofMateriality

Contributing to a
Low-Carbon
Society

Water
Reactor Pressure Vessel

Our products(parts supplied)• Contributing to a stable supply of electricity and other resourcesin the energy sector and reducing CO2 emissions© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

44

Material and Engineering Business

Material products：Electric power & nuclear products
The increasing trend in demand for nuclear power generation will continue to be driven from theperspective of decarbonization and energy security.
In addition to nuclear power, demand for high-efficiency thermal power generation will continue
over the long term.
Outlook for installed power generation capacity
by energy (Stated policies scenario)
Nuclear
原子力 energy

天然ガス
Natural gas

Petroleum
石油

Ensuring nuclear power generation-related demand is captured

石炭
Coal

• Meet growing demand by leveraging our extensive track record of manufacturing and

5,000

knowledge in a wide variety of furnace types in countries and regions around the world.

1 GW = 1 million kW

4,500
4,000

3,500

Coal and oil-fired power
generation is expected to decline

3,000
2,500

Reactor pressure vessel components

2,000
1,500

1,000

• Utilize our manufacturing capabilities for

0
2030

2040

(for spent fuel transportation/storage)

Ensuring demand related to high-efficiency power generation using natural gas is captured

Nuclear and gas-fired power
generation is expected toincrease

500

2022
（実績）
（Results）

Component for casks

2050 (Year)large heat-resistant materials, respondto demand for GTCC* and other highefficiency thermal power generation.
* GTCC: Gas turbine combined cycle（Source: Created by JSW from IEA WEO2023）© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

High heat-resistant steel rotor shaft for
high-efficiency power generation

45

Other Businesses

Photonics (GaN, LN, Synthetic quartz)

Put the business on track as a new business and make it a corebusiness for the future.
Key Measures

Next generation high-speed, high-capacity communication◼ Crystal materials for various◼ Gallium nitride (GaN) crystal material

substrates:
Lithium niobate (LN)
Synthetic quartz• Application is assumed to be mainly for laser diodes (LD: for special
high-intensity lighting, such as high-intensity projectors) and highfrequency devices.
• Collaboration with Mitsubishi Chemical Corporation to build aproduction system for crystal growth, crystal mass production, andwafer processing (business development based on the synergy effectsof JSW M&E’s strengths in manufacturing technology for highly heatresistant and highly corrosion-resistant metal materials, autoclave
design and manufacturing technology, and crystal growth technology).

ResolutionofMateriality

Contributing to a
Low-Carbon
Society

Contributing to a
Super-Smart
Society• Substrates for optical communicationand optical modulators used intelecommunications infrastructure• Development of materials for various
GaN 4-inch crystal

types of bonded wafer, establishmentof production systems, and mass
production• Reducing CO2 emissions by improving the efficiency of various

equipment• Contributing to the realization of an ultra-smart society by creating
highly functional devices© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

46

Other Businesses

Photonics (GaN, LN, Synthetic quartz)
Laser diode market forecast
Commercialization of GaN substrates(100 million yen)

35,000• Establish mass-production technology for large-size, low-defect GaN

30,000crystals by the ammonothermal method, making social implementation a
reality.

25,00020,00015,000• Demonstrate strength in high-power LDs, where demand is growing.

10,000• Realize compact, high-efficiency devices that outperform SiC, which has

5,000

begun to be fully adopted for high-frequency devices and power devices.

0
2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033 (Year)• Evaluation of device characterization of sample shipments in progress(favorable rating)(Created by JSW based on various materials)

Telecommunications equipment market forecast

Development of various substrates(100 million yen)

46,000• Develop materials for various substrates for surface acoustic wave (SAW)
devices and for optical communications and optical modulators.

42,000• Contribute to the realization of an ultra-smart society by supporting thesocial implementation of various elements that are suitable for high-speed,

38,000large-capacity communication and offer superior energy-saving
performance through the mass production of LNs and other devices.

34,00030,000
2022

2023

2024

2025

2026

2027

2028

(Year)(Created by JSW based on various materials）© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

47

Reference Materials© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

48

Trends in Net Sales, Operating Income and Profit（Unit: Billion Yen)FY2018FY2019FY2020

FY2021

FY2022

FY2023

220.1

217.5

198.0

213.7

238.7

252.5

Industrial Machinery Products Business

173.6

171.4

156.3

171.1

202.9

208.3

Plastic production and processing
machinery

52.5

61.3

58.8

62.1

92.2

102.7

Molding machines

72.7

65.3

54.5

65.3

65.8

58.7

Defense equipment

‐

‐

-

-

23.8

24.1

Others

20.4

44.8

43.0

43.7

21.1

22.8

FPD equipment

16.4

‐

-

-

-

-

Consolidated subsidiaries, etc.

11.6

‐

-

-

-

-

Material and Engineering Business

41.2

42.8

38.5

40.0

33.9

41.9

Steel Forgings and plates

-

19.6

19.9

25.4

24.9

33.0

Electric and nuclear power

12.5

-

‐

‐

-

-

Clad steel plates and pipes

13.0

12.8

10.5

6.0

-

-

-

10.4

8.1

8.6

9.0

8.9

Others

9.5

-

-

-

-

-

Consolidated subsidiaries, etc.

6.2

-

-

-

-

-

5.2

3.2

3.1

2.6

1.8

2.2

24.2

18.7

10.2

15.4

13.8

18.0

Industrial Machinery Products Business

23.5

19.2

13.9

17.7

18.9

20.4

Material and Engineering Business

2.6

2.7

1.8

1.3

(8)

3.2

Other Businesses

0.3

(0.4)

0.0

0.0

(4)

0.0

19.9

9.3

6.8

13.9

11.9

14.2

Net Sales

Engineering, etc.

Other Businesses
Operating Income

Profit*Sub-segment changed in FY2020; Figures from FY2019 have been restated to reflect this change.
• Three companies (GM Engineering Co., Ltd, Nichiyu Machinery Co., Ltd and SM Platek Co., Ltd.), which had been treated as consolidate subsidiaries, were reclassified as the Plastic production and processing machinery in the Industrial Machinery Products Business.
• FPD equipment, Other products and Consolidated subsidiaries, etc. were reclassified as Other products in the Industrial Machinery Products Business.
• Pressure vessels for oil refineries out of steel castings and forgings in the Material and Engineering Business and wind power maintenance services out of the Other Business were reclassified as Engineering, etc. in the Material and Engineering Business.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

49

Trends in Main Assets and Cash Flows（Unit: Billion Yen)FY2018FY2019FY2020

FY2021

FY2022

FY2023

Total Assets

305.5

297.1

316.2

339.7

348.3

366.7

Net Assets

129.8

132.4

141.9

151.0

160.6

178.6

1,746.91

1,778.94

1,908.76

2,031.29

2,162.18

2,404.83

Equity Ratio (%)

42.0

44.0

44.4

44.0

45.7

48.3

Return on Equity (%)

16.3

7.2

5.1

9.6

7.8

8.5

Operating Cash Flow

1.1

18.9

14.7

22.3

(0.9)

21.7

Investing Cash Flow

(1.3)

(13.1)

(3.2)

(2.9)

0.9

(6.8)

Financing Cash Flow

(3.7)

(6.1)

2.7

(2.8)

(20.1)(4.8)

Cash and Cash Equivalents at Endof the Period

73.8

74.4

88.7

105.7

86.4

96.9

Net Assets per Share (yen)© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

50

Prioritized Material issues (Materiality) in order to realize our Purpose
Creating Value and Solving Social Issues throughJSW Group’s Businesses
Materiality

Reasons why considered to be ofhigh importanceRealization of
a Plastic
ResourceRecycling
Society

It is extremely important to supply society withall manner of plastics processing machinery thatrealizes 3Rs + Renewable. Since JSW Group canleverage its core competence to the maximum, it
can demonstrate its strengths in thedevelopment and creation of plastic processing
machinery that meets the demand of society.
This is a high-priority business expansion
opportunity.

Contribution to
a Low-Carbon
Society

The realization of a low-carbon society is themost important challenge faced worldwide.
Products created by JSW Group have contributed
to the reduction of CO2 emissions and its
demand is expected to increase in the future. The
Reduction of energy consumption of industrial
machinery products and the curbing of CO2
emissions from the operations of manufacturing
sites are also responsibilities of the Group.

Contribution toa Super-Smart
Society

RelatedSDGs

It is essential to build a 5G/6G-compatible digital
infrastructure toward the super-smart society.
The industrial machinery and new materials of
JSW Group are incorporated into the key
components that make up the infrastructure, andcould potentially be indispensable to therealization of a super-smart society.
This is also considered to be a highly importantbusiness expansion opportunity for the Group.

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

Bolstering JSW Group’s Management Foundation for
Sustainable GrowthMateriality

Reasons why considered to be ofhigh importance

Human Capital
Improvement
and
DEI&B

The diversification and expansion of our humancapital, including the human resources capable ofdriving the Group’s growth, generating innovation,and creating value, is a matter of the highest
priority and importance for strengthening JSWGroup's management foundation. It is also
important to create a work environment thatenhances engagement.

Investment in
the Futurewith Innovation
Management

In order for JSW Group to continue contributing
to society, it is essential to maintain andstrengthen its technological superiority by refining
its core competence and expanding its business.

Related
SDGs

Innovation is essential factor for sustainablegrowth. It is important to promote digitaltransformation which supports data-based, rapid
decision-making, business model innovation, andthe creation of new value.
GovernanceReinforcementof JSW GroupFor the sustained growth of JSW Group, it isimportant not only to further strengthen
compliance and governance, but also to engage indialogue with stakeholders.
And supplying society with industrial machineryand new materials of high quality and superiorreliability is the very foundation of JSW Group’sbusiness and important to the further
strengthening of its quality assurance structureand system.

51

Dividend Policy of JGP2028 and the Results

Dividend policy in the period of JGP2028
JGP2025

JGP2028

Paying dividends at a level that ensures dividend on
equity (DOE) is 2% or higher while aiming for a
consolidated dividend payout ratio of 30% or more.

Paying dividends at a level that ensures dividend on
equity (DOE) is 2.5% or higher while aiming for a
consolidated dividend payout ratio of 35% or more.

■Schematic of dividend policy
Dividends

Lower-limit dividend（DOE of 2.5％）

ProfitPerformance-based dividend（Payout ratio of 35％）

Results and forcast: Year-end dividend for FY2023 is increased by 1 yen to 30 yen (annual dividend of 59 yen)
Annual dividend for FY2024 is expected to be 74 yen.

FY2021

FY2022

FY2023

Forecast for
FY2024

Annual dividends
per share (Yen)

57.0

58.0

59.0

74.0

Dividends payout
ratio（Consolidated）

30.1%

35.6%

30.4%

35.1%

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.

52

© THE JAPAN STEEL WORKS, LTD. All Rights Reserved.