Securities Code：5411.T

JFE Group
Financial Results for Fiscal Year 2021
ending March 31, 2022

JFE Holdings, Inc.
May 6, 2022

A table of contents
 JFE Holdings’ Financial Results for Fiscal Year 2021
(April 1, 2021 to March 31, 2022)
 Business Performance by Segment• JFE Steel• JFE Engineering• JFE Shoji Dividends
 Fiscal Year 2022
 Topic

 Progress of the 7 th Medium-Term Business Plan
This presentation material is for information and discussion purpose only.
Any statements in the presentation which are not historical facts are future projections based on certain assumptions
and currently available information. Please note that actual performance may vary significantly due to various factors.

2

Consolidated Results for
Fiscal Year 2021

3

JFE-HD

Financial Results for Fiscal Year 2021

Despite sharply higher prices for raw materials, metals and scrap etc., strong demand for steel and the resultof initiatives to improve sales price led to a significant increase in profit, particularly in the steel business.
Business profit was ¥416.4bn. and profit attributable to owner of parent was ¥288.0bn., both of which recorded
the highest result since the last global financial crisis triggered by the Lehman Brothers collapse, turning
into black from the previous fiscal year.
FY2021 Actual

FY2020
Actual(A)

FY2021
Forecast
(B)

1H

2H

Full Year(C)

3,227.2

4,370.0

1,942.9

2,422.1

4,365.1

1,137.9(4.9)

Business Profit(12.9)

390.0

198.8

217.5

416.4

429.3

26.4

Finance
Income/Costs(12.4)(10.0)

(5.6)

(6.0)

(11.6)

0.8(1.6)

Segment Profit(25.4)

380.0

193.2

211.5

404.8

430.2

24.8

20.4

(12.0)

ー(16.2)(16.2)(36.6)(4.2)

Profit before Tax

(4.9)

368.0

193.2

195.3

388.5

393.4

20.5

Tax Expense andProfit (Loss)
Attributable to NonControlling Interests(16.9)(98.0)(52.4)(48.0)(100.4)(83.5)(2.4)

Profit Attributableto Owners of Parent(21.8)

270.0

140.7

147.3

288.0

309.8

18.0

（billion yen）
Revenue

Exceptional Items

Change(C-A)

Change(C-B)

Business profit is profit before tax excluding financial income and one-time items of a materially significant value. Segment profit is profit
including financial income in business profit.

4

JFE-HD

Financial Results for Fiscal Year 2021 (by Segment)（billion yen）

FY2020
Actual(A)

FY2021
Forecast(B)

FY2021 Actual
1H

2H

Full
Year(C)

Change(C-A)

Change(C-B)

Revenue
Steel Business

2,255.2

3,210.0

1,410.4

1,763.0

3,173.4

918.2(36.6)Engineering
Business

485.7

510.0

229.2

278.9

508.2

22.5

(1.8)

Trading Business

932.5

1210.0

544.4

687.3

1,231.7

299.2

21.7

(446.1)(560.0)(241.1)(307.1)(548.3)(102.2)

11.7

3,227.2

4,370.0

1,942.9

2,422.1

4,365.1

1,137.9(4.9)

Business Profit(A）(12.9)

390.0

198.8

217.5

416.4

429.3

26.4

Finance
Income/Costs(B）(12.4)(10.0)

(5.6)

(6.0)

(11.6)

0.8(1.6)(65.4)

303.0

158.5

165.2

323.7

389.1

20.7

Engineering
Business

24.0

25.0

11.1

14.8

26.0

2.0

1.0

Trading Business

20.0

53.0

25.6

30.3

55.9

35.9

2.9

Adjustments

(4.1)

(1.0)

(2.0)

1.1

(0.9)

3.2

0.1

(25.4)

380.0

193.2

211.5

404.8

430.2

24.8

Adjustments
Total

Segment Profit
Steel BusinessTotal（A+B）

5

JFE-HD

Progress of Cash Flow Improvements, Debt/EBITDA Ratio
 At the end of FY2021, the Debt/EBITDA ratio exceeded the target level ofthe 7 th mid-term business plan (3.0x).
FY2021

Progress of Debt/EBITDA Ratio

Consolidated Cash Flow(billion yen)Cash-in
Net Profit

288.0

Cash-out
CAPEX &
Investments

Debt(Right Axis)

9.0

8.1

7.0
5.0

2.8
668.7

1,000
800
600

Dividend Payment

etc.

41.0
43.3

Debt/EBITDA Ratio

Target of the 7 th mid1,200 term business plan
Approx. 3x40.4

252.2 Working Capital
Asset Compression

1,600
1,400

322.5
Depreciation andAmortization(billion yen)

261.6

400
200
0
Debt

3.0
1.0
(1.0)

EBITDA(Left Axis)

(3.0)

223.4

(5.0)

1,806.1

1,849.4

FY2020

FY2021(7.0)

 EBITDA＝Business profit＋Depreciation and Amortization
 Debt/EBITDA Ratio＝Interest-bearing debt outstanding/EBITDA6

JFE Steel Financial Resultsfor Fiscal Year 2021

7

JFE Steel

Financial Results for Fiscal Year 2021
FY2021Unit

FY2021

FY2020
Full Year
1H

3Q

4Q

2H

Full
Year

Full Year
Previous
Forecast

Revenuebillionyen

2,255.2

1,410.4

832.8

930.2

1,763.0

3,173.4

3,210.0

Segment Profit

billionyenbillionyen(65.4)

158.5

93.5

71.7

165.2

323.7

303.0

(31.4)

68.5

(3.5)

64.7

61.2

129.7

127.0

Mt

22.76

12.70

6.49

6.69

13.18

25.88

Mt

23.96

13.39

6.85

7.02

13.87

27.26

Excluding Inventory
Valuation etc. *Crude Steel(Standalone)

Crude Steel(Consolidated)

Shipment

Mt

20.49

10.83

5.63

5.92

11.55

22.38

%

42.3

46.5

45.9

43.6

44.7

45.5

Average Sales Price k yen/ｔ

74.8

94.5

107.6

116.7

112.2

103.7

Exchange Rate

105.8

109.9

113.1

115.3

114.2

112.1

(Standalone)

Export Ratio on
Value Basis

Approx.

26.00

Approx.

27.40

Approx.

22.70
46(Standalone)(Standalone)¥/$*Excluding inventory valuation, carry over of raw materials and foreign exchange valuation from segment profit

Approx.

103
112
8

JFE Steel

20.7 Billion Yen Increase in JFE Steel’s Segment Profit(FY2021 (Previous Forecast) vs. FY2021 (Actual))

Segment profit increased from the previous forecast due to selling priceimprovements, such as quick reflection of raw material cost in selling prices,
as well as increase in profit of domestic and overseas subsidiary companies.

JFE SteelSegment Profit

FY2021

FY2021

ChangePrevious Forecast

Actual(billion yen)

303.0

1. Cost±0.0

2. Volumeand Mix(3.0)

3. Sales and
Raw materials
4. Inventory
valuation
5. Others

323.7

+20.7

• Crude steel (Standalone)
Approx. 26.00 Mt→ 25.88 Mt+10.0（+400 yen/t-shipment）• Improvement of steel selling prices, such as quick
reflection of key raw material costs+18.0• Inventory valuation +9.0 (+151.0→+160.0)• Carry over of raw materials +2.0 (+21.0→+23.0)• Foreign exchange valuation +7.0(＋4.0→+11.0）(4.3)• Increase in profit of domestic and overseas
subsidiary companies• Rising in price of metals etc.

9389.1 Billion Yen Increase in JFE Steel’s Segment Profit(FY2020 (Actual) vs. FY2021 (Actual))

JFE Steel• The steel demand recovered significantly from FY2020, which was greatly affected by
COVID-19.
• Segment profit improved significantly from FY2020 due to quick reflection of raw material
cost in domestic sales prices, higher steel prices in overseas markets, and higher production
volumes, as well as higher profits at domestic and overseas subsidiary companies.

JFE Steel

FY2020
Actual(65.4)

Segment Profit

FY2021
ActualChange(billion yen)

323.7

+389.1

1. Cost+30.0• Capital investment effects• Expanded use of low-cost raw materials etc.

2. Volumeand Mix+60.0• Production increase amid recovery of steel demand（Crude steel (Standalone) 22.76⇒25.88Mt）

3. Sales and
Raw materials
4. Inventory
valuation
5. Others+103.0（+4,600yen/t-shipment）• Improvements in metal spread due to supply-demand andmarket condition, despite sharply increased prices for key
raw materials+228.0• Inventory Valuation+197.0 (-37.0→+160.0)• Carry over of raw materials +20.0 (+3.0→+23.0)• Foreign exchange valuation+11.0(±0.0→+11.0)(31.9)• Increase in profit of domestic and overseas subsidiarycompanies.
• Rising in price of metals and scrap etc.

10

JFE Engineering
Financial Resultsfor Fiscal Year 2021

11

Financial Results for Fiscal Year 2021

JFE Engineering

Current Business Environment/ Overview of Financial Status
 Orders stayed at the high level due to strong domestic demand both in the environment& energy sector and infrastructure sector. Segment profit posted 4-year consecutive
increase*.
• Orders increased in carbon neutral area
• Despite an increase in materials and equipment prices, segment profit increased from M&A etc.
*Segment profit: FY2017 ¥19.3bn, FY2018 ¥20.1bn, FY2019 ¥23.1bn, FY2020 ¥24.0bn, FY2021 ¥26.0bn. (FY2017 used J-GAAP)

Financial Results（billion yen）
Orders
Revenue
Segment Profit

FY2020（Actual）
(A)
501.1
485.7
24.0

FY2021（Forecast）
(B)
530.0
510.0
25.0

FY2021(Actual）
(C)
505.8
508.2
26.0

ChangeChange（FromPrevious Year）（From Previous
Forecast）(C)-(A)

4.7
22.5
2.0

Compared to FY2020
・Revenue+22.5 Increase in orders in previous year, increase from M&A
・Segment Profit +2.0 Increase in revenue, increase by cost reduction
Compared to Previous Forecast
・Orders(24.2) Decrease due to delay of bid solicitation of overseas projects
・Segment Profit +1.0
Increase due to cost reduction(C)-(B)(24.2)
(1.8)
1.0

12

JFE Shoji
Financial Resultsfor Fiscal Year 2021

13

Financial Results for Fiscal Year 2021

JFE Shoji

Current Business Environment/ Overview of Financial Status
 Full-year segment profit posted ¥55.9 bn., up ¥2.9 bn. from the previous forecast and up¥35.9 from FY2020.
 Revenue and segment profit recovered from the slump brought by COVID-19 pandemic.
 Earnings of domestic business increased due to the recovery of steel demand and strong
steel market price. Earnings of overseas business, mainly subsidiaries in the US such as
Kelly Pipe, significantly increased due to strong market prices.

Financial Results(billion yen)
Revenue
Segment Profit

FY2020（Actual）(A)

FY2021(Forecast）
(B)

932.5

1,210.0

20.0

53.0

FY2021(Actual）(C)

1,231.7
55.9

Change（YonY）(C)-(A)

299.2
35.9

Change（Previous
Forecast）(C)-(B)

17.6
2.9

Compared to the previous forecast ： Segment Profit +2.9
・Increase due to continued high metal spreads in the US business such as Kelly Pipe etc.

14

Dividends

15

JFE-HD

Dividends

JFE Holdings has decided to propose at its
general meeting of shareholders a year-end
dividend of 80 yen per share, which would bringthe annual dividend of 140 yen per share.

16

Fiscal Year 2022

17

JFE-HD

Financial Forecast for Fiscal Year 2022
Our consolidated financial forecast for FY2022
remains pending because uncertainties regarding
the global economy began rising as the situation in
Ukraine intensified, leaving the outlook highly unclear.
The major impacts on the steel business from the Ukraine
situation are as follows:• The key raw material prices keep swinging drastically ata high level.
• Commodity prices such as ferroalloys and energy remainsoaring.
• Amid the volatile raw material prices, the steel prices arealso difficult to be predicted.

18

JFE SteelBusiness environment（Steel Business）
 Domestic environment•••

Auto production which remained at low level due to the supply restriction ofsemiconductors is gradually recovering. However, its recovering speed issluggish.
Activity level in other sectors remains solid amid the recovery in domestic andoverseas economic trends.
Overall steel supply and demand is anticipated being tightened again in2022.

 Overseas environment•••

Steel demand is expected to continue recovery trends amid the recovery in
the global economy.
Peaking out of COVID-19 will recover the demand in the construction sector.
Activity level in manufacturing industry such as the auto sector is
expected to recover amid the easing supply restriction of semiconductors andparts.

 The impact of the Ukraine situation and re-spread of COVID-19 insideand outside of the country, especially Chinese large-scale lockdown
in cities such as Shanghai, need to be monitored carefully.
19

JFE SteelKey raw materials（Steel Business）
 Iron Ore• The policy of annual crude steel production cuts in China continues
in 2022.
• The iron ore price is considered to remain at a current high level dueto the economic stimulus measures in China.
• However, the trend should be monitored because the iron ore pricedepends on the economic trends and policy in China.

 Coking Coal
• The economic sanction against Russia, the impact of COVID-19 and theChinese government’s policy significantly change the market prices,which makes the market price forecast for FY2022 difficult.
• The market prices will remain at the historically high level for a while,and they will keep drastically fluctuating amid the global trends.

20

JFE Steel

Measures in FY2022 (Steel Business)
 Sales prices:• Accelerate the measures of selling price improvement which we have beenworking on since FY2021, such as quick reflection of key raw material costs.
(Measures have already been taken to reflect the current rise in coking coal prices
and other materials prices in sales prices)• Getting into full swing of improving extra pricing and revising up to thesustainable level of sales prices as part of the initiatives of “shifting focus fromquantity to quality” and “overhauling sales prices” in the 7 th mid-term business plan.

 Cost reduction：+10.0 bn. yen（Cost reduction from action +23.0 bn. Yen,
Cost increase in Blast Furnace refit -13.0 bn. yen）
While the one-off cost increase is expected due to the refit of No.6 blast furnace in
Chiba, we will make every effort to cover it with other cost reduction items.

 Standalone crude steel production: Approx. 26.0 Mt
Based on the premise that the current business environment will remain for a year.
8 blast furnaces are currently operating.
No.6 blast furnace in Chiba is planned to be refitted from this September.
JFE is focusing on optimal production, matching the demand level.

21Topic22

JFE-HD

Restructuring of Group Company(Released on May 6th, 2022)

JFE Container to be JFE Steel’s Wholly-Owned Subsidiary• JFE Steel has decided to make JFE Container, a group company that has
been manufacturing and marketing high-quality steel drums and various
high-pressure gas containers, a wholly-owned subsidiary by shareexchange.（August 1, 2022 as the effective date ）Synergy delivered by the share exchange
1. Solidifying a position in growing markets and stepping up efforts toattain a decarbonized and hydrogen-centric society
2. Sustained growth for the domestic steel drum business3. Acceleration of overseas strategy
4. Enhance expertise sharing and human resource development throughfurther promotion of human resource exchange
5. Streamlining cash management and lowering listing maintenance cost23

Progress ofthe 7 th Medium-TermBusiness Plan

24

JFE-HD

Main Performance & Profitability Targets
and Results of Fiscal Year of 2021
• Business profit for FY2021 was ¥416.4 billion, exceeding the target in FY2024.
• The first year was successfully launched with achieving the other profitability targets.

Consolidated

The 7 th midterm businessplan FY2024
Business Profit¥ 320.0 billion¥ 416.4 billion

Profit attributable to owners of theparent¥ 220.0 billion¥ 288.0 billion

10%

15.7%

10,000 yen/t¥ 230.0 billion

14,000 yen/t¥ 323.7 billion

Engineering Business Segment Profit
Revenue¥ 35.0 billion¥ 650.0 billion¥ 26.0 billion¥ 508.2 billion

Trading Business¥ 40.0 billion¥ 55.9 billion

ROE
Steel Business

Operatingcompanies

FY2021
ActualProfit per ton*
Segment profit

Segment Profit* Steel business profit per ton(consolidated segment profit / non-consolidated sales volume)25

JFE Steel[Steel Business]
Progress of the 7 th Medium-Term Business Plan
Overview of FY2021

 Profit in FY2021 exceeded the target in FY2024, partially due to one-off effect of gain in inventory valuations etc..

（Profit per ton in FY2021: Approx. 14,000 yen/t Target in FY2024: 10,000yen/t）
Excluding inventory valuations etc.：Approx. 6,000 yen/t（4,000 yen/t lower than the mid-term target ）Items Achieved in FY2021
 Cost reduction ¥ 30.0 billion / year

Main measures plannedin the first year were
implemented asscheduled.

 Steadily executed CAPEX and refit of No.4 BF in Kurashiki Improvements in sales prices: quick reflection of key raw material costs
to sales prices; started to overhaul the extra pricing and partially finished revision

Initiatives to Achieve Target of Mid-term Plan
-Shifting Focus from Quantity to Quality• Fully overhaul sales pricing

⁻ Further progress of quick reflection of key raw material costto sales prices
⁻ Reflection of increase in prices of other raw materials
⁻ Acceleration of overhauling the extra pricing etc.

• Effects from structural reform

Reduction in fixed costs, increase in labor productivity etc.

（billion yen）

500
450

（Percentage of highly value-added products:
40％ in FY2020→ 45+%* in FY 2021→50% in FY2024）• Increase production capacity of high-grade non-oriented
electrical steel sheet• Increase production capacity of extra-thick steel plate foroff-shore wind-power applications*estimatedProfit per ton excluding400

inventory valuations etc.
(right axis）

350

3,000yen/t

10.0

10,000yen/t 8.0
6.0¥323.7bn.

4.0

300
250
200

• Product-mix enhancements（000 yen/t）

6,000yen/t

150

100
50
0

2.0

¥230.0bn.
Segment Profit（left axis）Inventory valuations etc.

¥141.6bn.

¥194bn.

0.0

(2.0)
(4.0)

¥68.0bn.
¥73.6bn.
2H of FY2020
×２

(6.0)

Excluding inventory
valuations etc.

(8.0)

¥129.7bn.
FY2021(10.0)FY 2024
Mid-term Target

26

JFE Steel

Shifting Focus from Quantity to Quality（Progress of Structural Reform and Major CAPEX）

 Steadily progress the structural reform to realize greatly reducing fixed cost and lowering breakeven point.
 Progress in development plans for partial area of Keihin district resulting from structural reform.
Facilities

FY2020

FY2021

Shutdown of Tin Mills in Chiba（No.2 Tandem Mill, No.4 CAL, TFL)

Refit of Blast Furnace Refit

Kurashiki Refit
No.4 BF(~Dec.2021)

FY2022

To be shut down(~Sep. 2023)（No.2 BF, Sintering Machine, Coke oven,
Converters, EAF, Continuous Casting
Machine etc.)

Shutdown of Hot Rolling
Facilities in Keihin

CAPEX related to improvements ofhigh-value added product ratio

FY2024～To be shut down(~Sep. 2022)
Chiba Refit
No.6 BF(Sep.2022~Jan.2023)

Shut down of upstream facilities
in Keihin（excl. Pickling line and skinpass
mill）

FY2023To be shut down(~Sep. 2023)
Installed new Continuous
Casting Machine（Jun.2021）

Reinforce extra-thick steel
plate production line foroffshore wind-power
application （Nov.2023）

Effect of structuralreform and CAPEX• Maintenance cost
reduction• Fixed cost reduction• Product-mix
enhancements etc.
1H of FY24 Reinforce
Non-oriented Electrical Steel
Sheet Production Line

Joint Study of a Hydrogen and Ammonia Supply Collaboration Base at the Keihin Waterfront Area to begin• ENEOS Corporation, JERA Co., Inc., and JFE Holdings, Inc. have concluded a memorandum of
Released on April 21
understanding of begun to discuss the followings:
Establishment of hydrogen and ammonia receiving and supply baseDevelopment of a hydrogen and ammonia supply network
Hydrogen and ammonia suppliers, transportation carriers, and transportation methods.
Contribute to the establishment of a stable and economical supply chain for decarbonized fuels to achieve carbon neutrality 27

[Engineering Business]
Progress of the 7 th Medium-Term Business Plan
<Revenue & Segment Profit>
40

Revenue¥485.7bn.

¥508.2bn.

FY2021 Initiatives and Future Initiatives¥650.0bn.

30
20
10

Waste to Resource• Nationwide expansion of bases for recycling business andstarted operation of recycling plants（Currently operating 8
plants in Japan. To be operating 5 domestic plants after 2022.）

Segment Profit¥24.0bn.

¥26.0bn.

¥35.0bn.

 Full operation of West Japan PET plastic bottle MR*
center（The first plant manufacturing bottle-to-bottle raw
materials in central and west Japan Apr. 2022）

Carbon Neutral

0
Segment
profit（¥/bn.）JFE Engineering

FY2020(Actual)FY2021(Actual)FY2024(Target)Business Environment• The level of FY2021 segment profit was asplanned in the mid-term plan, increasing
through the effect of M&A* in environment
sector.
*JFE Environment Technology Co., Ltd.
(The former Mitsui E&S Group’s environmental plant division)• Demand mainly for waste treatment
facility inside and outside of country isstrong despite delay in bid solicitation ofoverseas projects caused by COVID-19
pandemic and political turmoil.

*Mechanical Recycling• Decided to invest in establishing a new plant for monopile
foundation structure of offshore windmills（the first plant in all
Japan, expected time to start operation is April 2024.）• Decided to commercialize woody biomass power plant, one of
the largest biomass power plants in Japan（Tahara Biomass Power LLC,
Scheduled start of construction: Apr. 2022, Scheduled start ofoperation: Sep. 2025）

Combined utility services• Started operating business of comprehensive service fromwater supply to gas supply as the first company in Japan（Myoko Green Energy Co., Ltd. : Established in Sep. 2021,
Started operation in Apr. 2022）

Strengthening the earnings base by M&A etc.
• Realized M&A effect in overseas businessTo expand its scale（JFE Project One Co., Ltd. : The former
Mitsui E&S Plant Engineering Inc. ）• Embarked on waste power generation plant in Vietnam and an
operating business of waste treatment facility in Malaysia

28

[Trading Business]
Progress of the 7 th Medium-Term Business Plan

JFE Shoji<Segment Profit>

FY2021 Initiatives and Future Initiatives

60

Establish No.1 global distribution and processing
system of electrical steel sheet market• Promote the investment to capture the growing demandfor in-vehicle motors and transformers inside and outsideof Japan Decided expansion of capacity to manufacture coreproducts for transformer in Canada

50

Recordhigh

40¥55.9bn.

30
20
10
0

Segment
profit（¥/bn.）¥40.0bn.

Segment Profit¥20.0bn.

FY2020(Actual)（JFE Shoji Power Canada Inc. Oct, 2021）


FY2021(Actual)FY2024(Target)Business Environment• Segment profit recorded a historical high in
FY2021 due to steel demand recovery from theslump caused by COVID-19 pandemic andincreasing steel market price. The favorable
business environment such as an increase in steelmarket price helped segment profit in FY2021
exceed the target level of the mid-term plan.
• Initiatives in priority field in this mid-termplan need to continuously proceed• Steadily advancing reinforcement of global supply
chain.

Decided expansion of capacity to manufacture invehicle motor core products in China（Jiangsu JFE
Shoji Steel Products Co., Ltd. Nov. 2021)

Strengthen supply chain management of automotive
steel composite materials• Strengthen collaboration among JFE Group in the fourglobal key regions.
 Started operation of the steel processing center for
automotive industry（JSSB May. 2021: Adjacent to NJSM, JFE Steel’s groupcompany）



Decided to expand production capacity in theprocessing center in China in Oct. 2021.
（Guangzhou JFE Shoji Steel Products Co., Ltd.,: Near
GJSS, JFE Steel’s group company）

Accelerate activities overseas in construction materials
business• Capture the demand for construction materials in ASEAN
 Boosted investment in Vietnamese coated steel
manufacturer（Ton Dong A Corporation, Mar. 2022）
29

JFE-HD

Progress of GX & DX Investment
Progress of GX & DX Investment in FY2021• Investment in each operating company in FY2021 was on track to
the mid-term business plan
• Total investment in FY2021(decision making basis)
GX
Investment

Less
than

40％

of the investment target
during this mid-term planDX
Investment

More
than

30％

of the investment target
during this mid-term plan

• Main GX investments decided in FY2021
 Contribute to reduce CO₂ emissions across society by offshore wind
power generation business and eco-products supply
Amount of Investment
 Construction
Construction offoundation
structureofnew
newplant
plantforfor¥40 billion(monopile) structure (monopile)foundation

OffshoreWindmills

JFE Holdings’
investment
plan during
the 7 th midterm business
plan（JFE Engineering
Scheduledstartstartof operation:
April, 2024）（JFE
Engineering:
Scheduledof operation:
April, 2024）

GX investment¥340 billion

ofextra-hickextra-thickAmountof Investment
 Reinforcement
Reinforcement ofsteel plateproductionline¥13 billion
steel plate production line

DX investment¥120 billion（JFE
Steel:
Scheduledof operation:
November,
（JFE
Steel
Scheduledstartstartof operation:
November,2023） 2023）

of manufacturing
manufacturing
facilities
Amount of Investment
 Expansion
Expansion offacilities
for non-oriented
Electrical¥46 billion
fornon-oriented
electrical steel sheet
Steel Sheetelectricalsteel sheet（JFE（JFESteel:
Steel Scheduled
Scheduledstart
startofofoperation:
operation:1H
1Hof
ofFY2024）
FY2024）

Steadily progress the investment for carbon neutrality in the steelbusiness30

JFE-HD

Initiatives to Establish Environmental Sustainability
Progress of Initiatives for JFE Group’s CO2 emissions reduction in FY2021

 Raised FY2030 CO₂ emissions-reduction target• Raised the FY2030 CO₂-reduction target to 30% or more above the JFE group’s FY2013 levelby expanding the application of existing impact-reduction technologies, adding new measures
for CO₂ reduction, and establishing an efficient in-house framework.

 Revised roadmap for carbon neutrality (See the next page）
 JFE’s proposal of carbon neutral technologies was adopted as the
NEDO Green Innovation Fund Project• Launched development project of super-innovative process, supported by the government.

 Decided to issue transition bonds as the first manufacturing
company in Japan• The external organization certified that JFE’s business plan for carbon neutrality is consistentto The Paris Agreement, and the JFE’s CAPEX plan was consistent to its target of carbon
emissions reduction.

External Recognition in FY2021
 Included in the ESG-related indices, FTSE4Good Index Series and FTSE Blossom
Japan Index, for the second consecutive time
 Received high evaluation, [A-], in the climate change area and the water security
area by CDP 2021
31

JFE Steel[Steel Business] Roadmap for Carbon Neutrality
Revised our roadmap for realizing carbon neutrality in 2050, considering installing the technologies
below in the concrete: Carbon recycling blast furnace: Each established technology to be installed in order (late 2030s）
 Hydrogen-based ironmaking:
Small-scale pilot furnace demo(2024～25), middle-scale direct reduction furnace demo（～2040）
 EAF: Install pilot EAF in Chiba (demo to be started from 2024)→Install highly efficient large scale EAF(2027～30)
JFE Group’s CO2
reduction targets

30% or more reduction compared

18% reduction comparedto FY2013（Steel Business）

to FY2013 （Steel Business）

Carbon neutrality
by 2050

Released in Feb, 2022

Technology
Carbonrecycling
blast
furnace

Blast
Furnace2021 ～

24

26

27

28

（2025-2026）
Element development<GI Fund>Electric Arc
FurnaceTechnologies to beinstalled to theexisting facilities
R&D expenses

30

2031～2040

Small-scale demo

Large-scale
development<GI Fund>（2024～2025）

2041～2050

Each established technology Implementation
to be installed in order
・ LNG injection
・ Oxygen Blast Furnace
・ CCU

Middle-scale direct reduction
furnace demo

Small-scale pilot furnace demo

(Direct reduction)

Development ofother technologies

29

Small-scale demo

CCU

Hydrogen-based
ironmaking

25

Implementation（～2040）Ferro-coke（300t/day → 1500t/day）
COURSE50
Super-COURSE50<GI Fund>Install highly-efficient
Pilot EAF

large-scale EAF<GI Fund>Expand scrap use in converters（Pretreating in converter etc.）●Implement burner lance（Burner to melt scraps）●HBI use¥100bn. R&D expenses for 10 years

Items newly
released thistime arecolored green

Currently executing R&D expenses
on schedule for technology
development above

32

JFE SteelTechnology Development Items of the Green Innovation
Fund Project On December 24th, 2021, the following technology-development items were adopted as part of the Green Innovation Fund
Project, ”Hydrogen Utilization in Iron and Steelmaking Processes” Project.
 With support from the Green Innovation Fund, JFE accelerates technology development toward the realization of carbon
neutrality as stated in “Environmental Vision 2050”.
1. Carbon-recycling blast furnace

2. Hydrogen-based ironmaking

SinteredOre

Low-purity
iron ore

Effective
Utilization

Coke

Scrap &
Reduced iron
Byproduct Gas

Develo
pment
items

Power
generation

Methanationequipment

Molteniron

Methane CH4
OxygenO₂(CN reductant)

Develop processes where CO2
generated from blast furnace isconverted to methane and it isrepeatedly used as reducing material.
Install a small-scale pilot blast furnaceof 150㎥ in Chiba and confirm CO₂
reduction of more than 50%.
Start demo in small-scale pilot
blast furnaces in 2025 andestablish technologies by 2030 andcompleting the implementation by
2050.

BurnerlanceElectrode

H₂

Hydrogen
H₂

Blast
Furnace

Detailfor internal use,
reduction furnaces etc.
HydrogenCarbonRecycling

3. Highly-efficient large-scale EAF

ReducedPellet

or
Green
Power

Melting
EAF

Develop direct-reduction ironmaking
processes where oxygen is removed in a
reduction furnace from low-purity iron ore
used in the existing blast furnace, andreduced iron (Fe) is produced.
Install a small-scale direct reduction pilot
furnace and confirm CO₂ reduction of
more than 50%.
Start small-scale demo in 2024,
aiming to establish technologies by2030 and complete theimplementation by 2050.

Arc
Develop technologies of high-efficiency
melting and producing high-grade steel
by electric arc furnace (EAF) using scrap
and reduced iron.
Install a small-scale pilot EAF in Chiba
and confirm the same ability to control
the concentration of impurities as theexisting blast furnace process.
Start small-scale demo in 2024, andcompleting implementation by 2030.

33

JFE-HD

Main Performance & Profitability Targets
and Results of Fiscal Year of 2021

• Earnings in FY2021 include the one-off effects such as inventory valuation gains and a rise in
the overseas steel market prices.
Accelerate the main measures from FY2022 to achieve the target in FY2024.
• Continuously progress the measures to achieve carbon neutrality by CO₂ emissions
reduction in Steel Business and the contribution to the CO₂ reduction in the society on
the whole.
• ROE and Debt/EBITDA achieved the target of the mid-term business plan. The annual dividend
will be ¥140/share in FY2021, which is the highest since JFE started.

Consolidated

The 7 th mid-termbusiness plan
FY2024FY2021
ActualBusiness profit¥ 320.0 bn.

¥ 416.4 bn.

Profit attributable to owner of the parent¥ 220.0 bn.

¥ 288.0 bn.

10%

15.7%

About 3x2.8x

About 70%

80.8%

ROE
Debt/EBITDA
D/E*
Payout ratio（DPS）

The 7 th mid-termbusiness plan

Around 30%* For liabilities with equity subject to credit ratings, these equities reflect the evaluation of rating agencies.

(¥140)
34

Appendix

35

JFE-HD

Main Financial DataIFRS

J-GAAP
FY13

FY14

FY15

FY16

FY17

FY18

FY18

FY19

FY20

FY21

(bn. Yen, times)(bn. Yen, times)
Ordinary Income

173.6

231.0

64.2

84.7

216.3

221.1

Business profit

232.0

37.8

-12.9

416.4

EBITDA

368.9

421.5

254.4

279.9

388.8

405.9

EBITDA ＊1

428.2

269.4

223.4

668.7

ROS

4.7%

6.0%

1.9%

2.6%

5.9%

5.6％

ROS ＊2

6.0%

1.0%

-0.4%

9.5%

ROE

6.3%

7.7%

1.8%

3.7%

7.6%

8.3％

ROE ＊3

8.6％-11.1%

-1.3%

15.7%

ROA

4.5%

5.5%

1.7%

2.3%

5.2%

5.1％

ROA ＊4

5.0％

0.8%

-0.3%

8.4%

Debt Outstanding

1,534

1,501

1,379

1,375

1,331

1,450

Interest-bearing debt
outstanding

1,524

1,814

1,806

1,849

Debt/EBITDA Ratio

x4.2

x3.6

x5.4

x4.9

x3.4

x3.6

Debt/EBITDA
multiple
*5

x3.6

x6.7

x8.1

X2.8

D/E Ratio

67.9%

59.0%

56.9%

51.4%

58.1%

62.0％

D/E Ratio ＊6

68.2％

96.4%

93.2%

80.8%

Profit attributable to ownersof parent (yen/share)

177.4

241.6

58.4

117.8

250.8

285.0

Profit attributable toowners of parent(yen/share)

283.8-343.4

-38.0

500.1

40

60

30

30

80

95

95

20

10

140

ー

28.0%

Dividend(yen/share)
Pay-out Ratio

Notes[IFRS]

Dividend(yen/share)

22.5%

24.8%

51.4%

25.5%

31.9%

33.3％

33.5％
ー
Pay-out Ratio＊1 EBITDA = Business profit + Depreciation and Amortization＊2 ROS = Business profit / Revenue＊3 ROE = Profit attributable to owners of parent company / Equity＊4 ROA = Business profit / Total assets＊5 Debt/EBITDA ratio = Interest-bearing debt outstanding / EBITDA＊6 D/E ratio = Interest-bearing debt outstanding / Equity attributable to owners of parent
For debt having a capital component, a portion of its issue price is deemed to be capital, as assessed by rating agencies.

366.7 Billion Yen Increase in JFE Steel’s Segment Profit(FY2021.1H vs. FY2021.2H)••

JFE Steel

Crude steel production increased, and further cost reduction was achieved in 2H
Despite rising in the price of other raw materials such as metals and scrap, segment
profit in 2H increased due to selling price improvements, such as quick reflection of key
raw materials in selling prices.

JFE SteelSegment Profit
1. CostFY2021
1H

2H

158.5

165.2

Full Year

Change(billion yen)

323.7

+6.7

+15.0

• Capital investment effects• Variable cost reduction etc.

+14.0

• Production volume increase along with the completion ofKurashiki No.4 BF refit（Crude steel (Standalone) 12.70Mt⇒13.18Mt）+53.0（＋4,600 yen/t-shipment）• Metal spread increased due to selling price improvements,
such as quick reflection of key raw materials in selling prices.

4. Inventory
valuation+14.0• Inventory valuation +42.0 (+59.0→＋101.0)• Carry over of raw materials -37.0 (+30.0→-7.0)• Foreign exchange valuation +9.0(+1.0→+10.0)

5. Others(89.3)• Increase in depreciation cost and other expenses• Rising in price of metals and scrap etc.

2. Volumeand Mix
3. Sales and
Raw materials

37JFE Steel

21.8 Billion Yen Decrease in JFE Steel’s Segment Profit(FY2021.3Q vs. FY2021.4Q)

FY2021JFE SteelSegment Profit

2Q

3Q

4Q

Full
Year

(billion yen)

69.7

88.8

93.5

71.7

323.7

(21.8)

1. Cost±0.0

2. Volumeand Mix+3.0

3. Sales and
Raw materials

Change1Q＋110.0• Crude steel (Standalone) 6.49⇒6.69Mt +0.2Mt（+18,600 yen/t-shipment）• Metal spread improvement by quickly reflecting the
coking coal price which soared in the 3Q in the selling
price, in addition to falling price of iron ore.

4. Inventory
valuation(90.0)• Inventory valuation -27.0(＋64.0→＋37.0)• Carry over of raw material -67.0 (＋30.0→-37.0)• Foreign exchange valuation+4.0(+3.0→+7.0)

5. Others(44.8)• Increase in depreciation cost and other expenses etc.
38

Domestic
Market Environment
5,000

Combined Inventories of HR,
CR and Coated Steel SheetJFE Steel（Month）（k ton)Maker

Whole Saler

Coil Center

5

Inventory Ratio(Right axis)

4,000

4

3,000

3

2,000

2
Change

Feb,
2022

1,000
Inventories(k ton)Inventory Ratio
0（month）

4,646
3.33

From
previousmonth±0(±0.0%)

Frompreviousyear+1,100(+31.0%)

+0.59

+0.96

Jan,
2022

Feb.
2021

4,646

3,546

2.74

2.37

1

0

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan
2018

2019

2020

2021

2022
39

JFE SteelInventories of Plate (Plate Shear)and Wide Flange Shapes

Domestic
Market Environment

Inventories of Plate (Plate Shear) （Month） （k ton）

（k ton）
500

3.5

Inventories of Wide Flange Shapes （Month）

250

Inventories
Inventory Ratio(Right axis)
450

3.5

Inventories
Shipment
Inventory Ratio(Right axis)

3.0

400

200

3.0

150

2.5

100

2.0

2.5

350

2.0

1.5

2018

2019

2020

2021

2022

2018

2.8

-0.5

-0.3

Feb,
2022

Mar,
2021

204

209

3.3

3.1

1.5

2019

2020

2021

Jan

Oct

Jul

1.0

Apr

0

Inventory
ratio（Month）

Jan

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

Jan

Oct

Jul

Apr

0.5

Jan

200

-6
(-2.9%)

Oct

2.5

-1
(-0.3%)

Jul

2.8

203

From
previous
year

Apr

+0.3

Inventories（k ton）

Jan

±0.0

351

ChangeFromprevious
month

Oct

2.8

401

Mar,
2022

Jul

（Month）+63(+17.9%)

1.0

50

Jan

Inventory ratio+13(+3.2%)

Feb,
2021

Oct

414

Jan,
2022

Jul

Inventories（k ton）

From
previous year

Apr

250

ChangeFromprevious
month

Jan

Feb,
2022

Apr

300

2022

40

JFE Steel

Domestic
Market Environment

Trend of Import Steel (Ordinary Steel)（k ton）
600

S.Korea

China

TaiwanOthers

500

400

300

200

100

Unit: k ton

Feb,
2022

Import Steel

321

-47

-70

(-12.8%)(-17.9%)

Jan,
2022

Feb,
2021

368

391

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb

0

ChangeFrom
Fromprevious previous
month
year

2018

2019

2020

2021

2022

41

JFE Steel

Overseas
Market Environment

Crude Steel & Im/Export, China

Export（Left axis）（Mｔ）

Import（Left axis）

Crude steel（Right axis）

（Mｔ）

9

120

8
100
7
6

80

5
60
4
3

40

Mar,
2022

From
previousmonth

Jan-Mar,
2022

From
Jan-Mar,
2021

Crude Steel（Mt）

88.3+11.8%

242.3-10.7%

Export（Mt）

5.0+36.7%

13.2-25.3%

2
1
0

20

0

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar
2018

2019

2020

2021

2022

42

JFE Steel

Overseas
Market Environment

Inventories in China by Product

（Mｔ）

30.0

Bar

Rod & Wire

Plate

HR

CR

100.0%

Change by Previous year

50.0%
25.0
0.0%
20.0
-50.0%

15.0-100.0%-150.0%10.0-200.0%Change

2018

2019

Feb,
2022

Mar,
2021

17.6

20.7

-250.0%

2020

2021

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

Nov

Sep

Jul

May

-300.0%

Mar

Jan

Mar

Jan

Nov

Sep

Jul

May

Mar

Jan

0.0

(-18.4%)

Nov

16.9

From
previous
year
-3.8

Sep

Inventories

Jul

From
previousmonth-0.7（-4.0%)

Mar,
2022

(Mt)

May

5.0

2022

43

Overseas
Market Environment

Metal Spread Trend(Chinese Spot Basis)

JFE Steel

（$/t)

（$/t)

1000

1000

900

900

800

800

700

HRC

700

600

600

500

500

400

Metal Spread

400

300

300

200

200

100

100

0

0

Metal Spread ＝ HRC Price － Raw Materials Cost
*HRC Price： Chinese Spot basis
Raw Materials Cost： Calculated from market price of Iron Ore and Hard Coking Coal

44

Domestic
Market Environment

JFE SteelPrice Trend of Import Steel（k yen /ｔ）

110
100
90
80
70
60
50

Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan

40
2016

2017

2018

2019

2020

Data: The Japan Iron and Steel Federation Import Steel from S. Korea

2021

2022
45

JFE Steel

Progress of Initiatives of Steel Business（Structural Reforms and Strategic Investment in Japan）

Facilities

Structural
Reforms

KeihinDistrict

～FY19

FY20

FY21

FY23～

Upstream Facilities

To be shut down

Hot rolling Facilities

To be shut down(~Sep. 2023)(~Sep. 2023)

Cold-rolling & Hot-dip
Galvanizing Facilities

Shut downed

Chiba
District

Tin Mills

Shut downed

Chiba &
Kurashiki

Blast Furnace Refit(2CAL・2ETL)Continuous
Casting Machine

Strategic Investments

Kurashiki
District

FY22

Facilities manufacturing steel sheet forcans to be shut down (~Sep.2022)

Kurashiki Refit
No.4 BF(~Dec.2021)

Chiba Refit
No.6 BF(Sep.2022~Jan.2023)

Installed new Continuous
Casting Machine（Jun.2021）
Reinforce extra-thick steel plateproduction line (Nov. 2023)

Extra-thick steel platefor offshore wind-power
application

Electrical Steel
Sheet Facilities
Coke Oven
Fukuyama
District

Sintering Machine
Energy Plants
Ferro Coke
Production Facility

Overseas

Mexico NJSM

RenewedNo.3 Coke Oven(A)Renewed No.3 CokeOven(B) (Jun.2021)

FY24 Reinforce
Non-oriented Electrical
Steel Sheet ProductionLine

Installed new Sintering Machine
Installed No.2 power generator in Joint Thermal
Power
Develop ferro coke production technology

Begun Operating CGL for Automotive Applications46

Orders by Business Area

JFE Engineering（billion yen）

Business
Area
Waste
to
Resource

CarbonNeutralActualFY2020

ActualFY2021220.0 203.9

36.0

87.4

ChangeMain orders received in FY2021★: New projects received in FY2021 4Q

Construction of domestic waste treatment plant[Nara, Nagoya]-16.1 Improvement works of domestic waste treatment plant [Kochi]
Construction of overseas waste treatment plant [Vietnam]
Renewal construction of Matsukawa geothermal power generation
plant[Iwate prefecture]

51.4 Construction of Mori Binary power generation plant [Hokkaido]
Construction of Tahara Biomass Power plant [Aichi]

Combined
Utility
Service

11.0

13.4

2.4
Installation of offsite equipment of Himeji power generation [Hyogo]

Core
Infrastracture

Total

234.1 201.1

Reconstruction of Sludge Treatment Plant at Iriezaki General Sludge
Center [Kawasaki]-33.0 Construction of domestic bridge (★Tokai-Kanjo Expressway [Gifu]）
Reconstruction of domestic bridge（Tomei Expressway [Shizuoka], Shuto Expressway
Chuo Expressway[Nagano]）

501.1 505.8

4.7[Tokyo],47

JFE-HD

Links to the reports published during FY2021
ReportURL

JFE Group REPORT
2021

https://www.jfeholdings.co.jp/en/investor/library/gro
up-report/index.html

JFE Group CSR
REPORT 2021

https://www.jfeholdings.co.jp/en/csr/data/index.html

JFE Group CSR
REPORT 2021
ESG Data

https://www.jfeholdings.co.jp/en/csr/pdf/2021/2021_08.pdf

DX REPORT 2021

https://www.jfeholdings.co.jp/en/investor/library/dxr
eport/index.html

QR code48

Copyright © 2022 JFE Holdings, Inc. All Rights Reserved
49